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 September 30, 2009


o
            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.


x Yes  o 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  o
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
                o
                Accelerated
      filer oNon-accelerated
      filer
                o (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).


o
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.


o Yes  o 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 September 30, 2009 (unaudited) and December 31,
      2008
                    
                    4Consolidated
      Statements of Operations for the three and nine months ended September 30,
      2009 and 2008 (unaudited)
                    
                    5Consolidated
      Statements of Partners’ Equity as of September 30, 2009 (unaudited) and
      December 31, 2008
                    
                    6Consolidated
      Statements of Cash Flows for the nine months ended September 30, 2009 and
      2008 (unaudited)
                    
                    7Consolidated
      Statements of Comprehensive Income (Loss) for the three and nine months
      ended September 30, 2009 and 2008 (unaudited)
                    
                    8Notes
      to Consolidated Financial Statements
                    
                    9Item
      2.
                    Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                    
                    26Item
      4.
                    Controls
      and Procedures
                    
                    42PART
      II.
                    Other
      Information
                    
                    44Item
      1.
                    Legal
      Proceedings
                    
                    44Item
      1A.
                    Risk
      Factors
                    
                    44Item
      2.
                    Unregistered
      Sales of Equity Securities and Use of Proceeds
                    
                    45Item
      6.
                    Exhibits
                    
                    46


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;
      and


·
            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)




September
      30,
                                                    
                                                    
                                                    December
      31,2009
                                                    
                                                    
                                                    2008ASSETSCash
                                                    
                                                    $
                                                    18,628,344
                                                    
                                                    
                                                    $
                                                    2,222,196Cash
      held in escrow
                                                    
                                                    
                                                    25,000
                                                    
                                                    
                                                    
                                                    314,500Related
      party receivable
                                                    
                                                    
                                                    1,920,691
                                                    
                                                    
                                                    
                                                    5,940,945Due
      from charterers
                                                    
                                                    
                                                    2,205,941
                                                    
                                                    
                                                    
                                                    -Other
      receivables
                                                    
                                                    
                                                    29,603
                                                    
                                                    
                                                    
                                                    198,133Prepaid
      assets
                                                    
                                                    
                                                    256,054
                                                    
                                                    
                                                    
                                                    100,000Current
      derivative assets
                                                    
                                                    
                                                    3,566,257
                                                    
                                                    
                                                    
                                                    -Other
      current assets
                                                    
                                                    
                                                    895,110
                                                    
                                                    
                                                    
                                                    491,335Current
      assets
                                                    
                                                    
                                                    27,527,000
                                                    
                                                    
                                                    
                                                    9,267,109Vessels
                                                    
                                                    
                                                    113,512,148
                                                    
                                                    
                                                    
                                                    -Vessel
      construction in progress
                                                    
                                                    
                                                    81,525,156
                                                    
                                                    
                                                    
                                                    80,049,335On
      board equipment
                                                    
                                                    
                                                    7,987,090
                                                    
                                                    
                                                    
                                                    811,255203,024,394
                                                    
                                                    
                                                    
                                                    80,860,590Less
      accumulated depreciation
                                                    
                                                    
                                                    (2,746,080
                                                    )
                                                    
                                                    
                                                    -Vessels
      and equipment, net
                                                    
                                                    
                                                    200,278,314
                                                    
                                                    
                                                    
                                                    80,860,590Investment
      in unconsolidated entities
                                                    
                                                    
                                                    3,066,979
                                                    
                                                    
                                                    
                                                    3,575,462Restricted
      cash
                                                    
                                                    
                                                    -
                                                    
                                                    
                                                    
                                                    55,967,374Deferred
      loan fees
                                                    
                                                    
                                                    3,879,685
                                                    
                                                    
                                                    
                                                    3,771,774Derivative
      assets, net of current portion
                                                    
                                                    
                                                    5,350,332
                                                    
                                                    
                                                    
                                                    -Deposits
      on asset acquisition
                                                    
                                                    
                                                    9,603,841
                                                    
                                                    
                                                    
                                                    -Other
      assets
                                                    
                                                    
                                                    527
                                                    
                                                    
                                                    
                                                    1,426Total
      assets
                                                    
                                                    $
                                                    249,706,678
                                                    
                                                    
                                                    $
                                                    153,443,735LIABILITIES
      AND PARTNERS' EQUITYAccounts
      payable and other accrued liabilities
                                                    
                                                    $
                                                    9,525,147
                                                    
                                                    
                                                    $
                                                    2,653,705Vessel
      construction installments payable
                                                    
                                                    
                                                    29,499,771
                                                    
                                                    
                                                    
                                                    10,381,453Accrued
      interest payable
                                                    
                                                    
                                                    42,079
                                                    
                                                    
                                                    
                                                    322,220Due
      to related party
                                                    
                                                    
                                                    8,376,646
                                                    
                                                    
                                                    
                                                    850,828Unaccepted
      equity contributions
                                                    
                                                    
                                                    25,000
                                                    
                                                    
                                                    
                                                    314,500Current
      derivative liabilities
                                                    
                                                    
                                                    2,782,875
                                                    
                                                    
                                                    
                                                    -Current
      portion of long-term debt
                                                    
                                                    
                                                    8,523,549
                                                    
                                                    
                                                    
                                                    34,927,967Current
      liabilities
                                                    
                                                    
                                                    58,775,067
                                                    
                                                    
                                                    
                                                    49,450,673Long-term
      derivative liabilities
                                                    
                                                    
                                                    7,644,563
                                                    
                                                    
                                                    
                                                    -Notes
      payable to related party
                                                    
                                                    
                                                    482,500
                                                    
                                                    
                                                    
                                                    1,250,000Long-term
      debt, net of current portion
                                                    
                                                    
                                                    95,862,743
                                                    
                                                    
                                                    
                                                    21,327,408Total
      liabilities
                                                    
                                                    
                                                    162,764,873
                                                    
                                                    
                                                    
                                                    72,028,081Commitments
      and contingenciesIII
      to I Maritime Cayman I, L.P. partners' equity:General
      partner
                                                    
                                                    
                                                    694,362
                                                    
                                                    
                                                    
                                                    942,557Class
      A limited partners (units issued and outstanding:September
      30, 2009 - 605,618, December 31, 2008 - 556,725)
                                                    
                                                    
                                                    46,673,713
                                                    
                                                    
                                                    
                                                    53,153,690Class
      B limited partners (units issued and outstanding:September
      30, 2009 - 84,313, December 31, 2008 - 84,313)
                                                    
                                                    
                                                    6,323,881
                                                    
                                                    
                                                    
                                                    8,026,114Class
      D limited partners (units issued and outstanding:September
      30, 2009 - 2,000, December 31, 2008 - 0)
                                                    
                                                    
                                                    (74,860
                                                    )
                                                    
                                                    
                                                    -Accumulative
      other comprehensive income
                                                    
                                                    
                                                    9,266,359
                                                    
                                                    
                                                    
                                                    123,166III
      to I Maritime Cayman I, L.P. partners' equity
                                                    
                                                    
                                                    62,883,455
                                                    
                                                    
                                                    
                                                    62,245,527Noncontrolling
      interest
                                                    
                                                    
                                                    24,058,350
                                                    
                                                    
                                                    
                                                    19,170,127Total
      partners' equity
                                                    
                                                    
                                                    86,941,805
                                                    
                                                    
                                                    
                                                    81,415,654Total
      liabilities and partners' equity
                                                    
                                                    $
                                                    249,706,678
                                                    
                                                    
                                                    $
                                                    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 September 30,
                                
                                
                                Nine
      Months Ended September 30,2009
                                
                                
                                2008
                                
                                
                                2009
                                
                                
                                2008Time
      charter revenue
                                
                                $
                                5,886,791
                                
                                
                                $
                                -
                                
                                
                                $
                                11,105,681
                                
                                
                                $
                                -Operating
      expenses:Vessel
      operating expenses
                                
                                
                                5,177,821
                                
                                
                                
                                -
                                
                                
                                
                                10,467,462
                                
                                
                                
                                -Professional
      fees
                                
                                
                                549,205
                                
                                
                                
                                398,328
                                
                                
                                
                                2,489,317
                                
                                
                                
                                747,945Brokerage
      and representation fees
                                
                                
                                232,408
                                
                                
                                
                                164,063
                                
                                
                                
                                560,533
                                
                                
                                
                                492,188Other
      operating expenses
                                
                                
                                197,167
                                
                                
                                
                                75,355
                                
                                
                                
                                430,250
                                
                                
                                
                                268,362Total
      operating expenses
                                
                                
                                6,156,601
                                
                                
                                
                                637,746
                                
                                
                                
                                13,947,562
                                
                                
                                
                                1,508,495Operating
      loss
                                
                                
                                (269,810
                                )
                                
                                
                                (637,746
                                )
                                
                                
                                (2,841,881
                                )
                                
                                
                                (1,508,495
                                )Other
      income (expense):Interest
      income
                                
                                
                                70,387
                                
                                
                                
                                673,123
                                
                                
                                
                                935,719
                                
                                
                                
                                1,896,922Interest
      expense
                                
                                
                                (563,937
                                )
                                
                                
                                54
                                
                                
                                
                                (2,404,448
                                )
                                
                                
                                (10,261
                                )Loss
      on interest rate swap
                                
                                
                                (6,199,724
                                )
                                
                                
                                -
                                
                                
                                
                                (9,767,863
                                )
                                
                                
                                -Foreign
      currency transaction gain (loss)
                                
                                
                                407,429
                                
                                
                                
                                (4,513,356
                                )
                                
                                
                                180,601
                                
                                
                                
                                (1,273,406
                                )Equity
      in loss of unconsolidated entities
                                
                                
                                (284,897
                                )
                                
                                
                                (201,240
                                )
                                
                                
                                (593,926
                                )
                                
                                
                                (1,336,583
                                )Total
      other income (expense)
                                
                                
                                (6,570,742
                                )
                                
                                
                                (4,041,419
                                )
                                
                                
                                (11,649,917
                                )
                                
                                
                                (723,328
                                )Net
      loss
                                
                                
                                (6,840,552
                                )
                                
                                
                                (4,679,165
                                )
                                
                                
                                (14,491,798
                                )
                                
                                
                                (2,231,823
                                )Net
      loss attributable to the noncontrolling interest
                                
                                
                                1,344,176
                                
                                
                                
                                4,810
                                
                                
                                
                                2,331,361
                                
                                
                                
                                55,685Net
      loss attributable to III to I Maritime Partners Cayman I,
    L.P.
                                
                                
                                (5,496,376
                                )
                                
                                
                                (4,674,355
                                )
                                
                                
                                (12,160,437
                                )
                                
                                
                                (2,176,138
                                )Less
      general partner interest in net loss
                                
                                
                                (78,078
                                )
                                
                                
                                (79,972
                                )
                                
                                
                                (176,520
                                )
                                
                                
                                (39,775
                                )Limited
      partner interest in net loss
                                
                                $
                                (5,418,298
                                )
                                
                                $
                                (4,594,383
                                )
                                
                                $
                                (11,983,917
                                )
                                
                                $
                                (2,136,363
                                )Net
      loss per general partner unit:Basic
      and diluted
                                
                                $
                                (7.89
                                )
                                
                                $
                                (8.08
                                )
                                
                                $
                                (17.83
                                )
                                
                                $
                                (4.02
                                )Weighted
      average general partner units outstanding
                                
                                
                                9,900
                                
                                
                                
                                9,900
                                
                                
                                
                                9,900
                                
                                
                                
                                9,900Net
      loss per limited partner unit:Basic
      and diluted
                                
                                $
                                (7.89
                                )
                                
                                $
                                (8.08
                                )
                                
                                $
                                (17.83
                                )
                                
                                $
                                (4.02
                                )Weighted
      average limited partner units outstanding
                                
                                
                                687,016
                                
                                
                                
                                568,753
                                
                                
                                
                                672,125
                                
                                
                                
                                531,772





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
                        
                        
                        (23,361
                        )
                        
                        
                        3,516,745
                        
                        
                        
                        (198,942
                        )
                        
                        
                        (2,642
                        )
                        
                        
                        -
                        
                        
                        
                        5,801,052
                        
                        
                        
                        9,092,852Payment
      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
                        
                        
                        (176,520
                        )
                        
                        
                        (10,456,722
                        )
                        
                        
                        (1,503,291
                        )
                        
                        
                        (23,904
                        )
                        
                        
                        -
                        
                        
                        
                        (2,331,361
                        )
                        
                        
                        (14,491,798
                        )Forward
      currency exchange contract
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        5,766,729
                        
                        
                        
                        1,922,243
                        
                        
                        
                        7,688,972Foreign
      currency translation adjustment
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        3,376,464
                        
                        
                        
                        89,647
                        
                        
                        
                        3,466,111Balance
      at September 30, 2009
                        
                        $
                        694,362
                        
                        
                        $
                        46,673,713
                        
                        
                        $
                        6,323,881
                        
                        
                        $
                        (74,860
                        )
                        
                        $
                        9,266,359
                        
                        
                        $
                        24,058,350
                        
                        
                        $
                        86,941,805





See Notes
to Consolidated Financial Statements.


6


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




CONSOLIDATED
STATEMENTS OF CASH FLOWS




(Unaudited)




Nine
      Months Ended September 30,2009
                                
                                
                                2008Operating
      activities:Net
      loss
                                
                                $
                                (14,491,798
                                )
                                
                                $
                                (2,231,823
                                )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Depreciation
                                
                                
                                2,573,269
                                
                                
                                
                                990Amortization
      of debt issue costs
                                
                                
                                24,467
                                
                                
                                
                                10,261Foreign
      currency transaction loss
                                
                                
                                1,775,465
                                
                                
                                
                                1,273,406Net
      gain on forward currency exchange contracts
                                
                                
                                (1,956,066
                                )
                                
                                
                                -Net
      loss on interest rate swap
                                
                                
                                9,767,864
                                
                                
                                
                                -Equity
      in loss of unconsolidated entities
                                
                                
                                593,926
                                
                                
                                
                                1,336,583Payment
      of interest on Berenberg Facility
                                
                                
                                (4,109,718
                                )
                                
                                
                                (86,901
                                )Changes
      in assets and liabilities:Due
      from charterers
                                
                                
                                (2,205,941
                                )
                                
                                
                                -Other
      receivables
                                
                                
                                174,079
                                
                                
                                
                                (140,164
                                )Prepaid
      and other assets
                                
                                
                                (542,572
                                )
                                
                                
                                (24,129
                                )Accounts
      payable and accrued liabilities
                                
                                
                                36,302,982
                                
                                
                                
                                (112,511
                                )Accrued
      interest payable
                                
                                
                                (291,375
                                )
                                
                                
                                308,176Net
      cash provided by operating activities
                                
                                
                                27,614,582
                                
                                
                                
                                333,888Investing
      activities:Related
      party receivable
                                
                                
                                (118,692
                                )
                                
                                
                                (4,025,593
                                )Distribution
      from unconsolidated entities
                                
                                
                                -
                                
                                
                                
                                169,332Advances
      for vessel acquisitions
                                
                                
                                (106,389,834
                                )
                                
                                
                                (12,076,908
                                )Advances
      for capitalized vessel construction costs
                                
                                
                                (5,952,188
                                )
                                
                                
                                (2,973,441
                                )Purchase
      on board equipment
                                
                                
                                (7,147,349
                                )
                                
                                
                                (387,201
                                )Proceeds
      from sale to affiliate
                                
                                
                                -
                                
                                
                                
                                3,000,093Decrease
      (increase) in restricted cash
                                
                                
                                55,967,374
                                
                                
                                
                                (7,898,860
                                )Net
      cash used in investing activities
                                
                                
                                (63,640,689
                                )
                                
                                
                                (24,192,578
                                )Financing
      activities:Proceeds
      from Berenberg Facility
                                
                                
                                1,314,005
                                
                                
                                
                                11,876,504Repayments
      on Berenberg Facility
                                
                                
                                (55,435,008
                                )
                                
                                
                                (2,975,766
                                )Proceeds
      from senior loan with Nord/LB
                                
                                
                                102,282,624
                                
                                
                                
                                -Repayments
      on senior loan with Nord/LB
                                
                                
                                (3,196,332
                                )
                                
                                
                                -Deferred
      loan fees
                                
                                
                                (9,527
                                )
                                
                                
                                -Repayment
      of related party note payable
                                
                                
                                (11,513,487
                                )
                                
                                
                                -Payable
      to related party
                                
                                
                                7,501,011
                                
                                
                                
                                251,707Contributions
      from partners
                                
                                
                                5,542,172
                                
                                
                                
                                11,684,000Unaccepted
      equity contributions
                                
                                
                                (289,500
                                )
                                
                                
                                -Syndication
      costs
                                
                                
                                (1,597,500
                                )
                                
                                
                                -Contributions
      from minority interests
                                
                                
                                5,897,680
                                
                                
                                
                                3,662,453Distributions
      to minority interests
                                
                                
                                (689,986
                                )
                                
                                
                                (528,607
                                )Net
      cash provided by financing activities
                                
                                
                                49,806,152
                                
                                
                                
                                23,970,291Effect
      of exchange rate changes on cash
                                
                                
                                2,626,103
                                
                                
                                
                                (1,536,870
                                )Net
      increase (decrease) in cash and cash equivalents
                                
                                
                                16,406,148
                                
                                
                                
                                (1,425,269
                                )Cash
      and cash equivalents, beginning of period
                                
                                
                                2,222,196
                                
                                
                                
                                5,988,201Cash
      and cash equivalents, end of period
                                
                                $
                                18,628,344
                                
                                
                                $
                                4,562,932Non-cash
      operating and investing activities:Vessel
      construction installments financed through accounts
payable
                                
                                $
                                29,499,771
                                
                                
                                $
                                -Deposits
      on asset acquisition financed through long-term debt
                                
                                $
                                5,300,000
                                
                                
                                $
                                -





See Notes
to Consolidated Financial Statements.


7


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




CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)




(Unaudited)





Three
      Months Ended September 30,
                        
                        
                        Nine
      Months Ended September 30,2009
                        
                        
                        2008
                        
                        
                        2009
                        
                        
                        2008Net
      loss
                        
                        $
                        (6,840,552
                        )
                        
                        $
                        (4,679,165
                        )
                        
                        $
                        (14,491,798
                        )
                        
                        $
                        (2,231,823
                        )Foreign
      currency exchange forward contracts
                        
                        
                        4,935,865
                        
                        
                        
                        -
                        
                        
                        
                        7,688,972
                        
                        
                        
                        -Foreign
      currency translation adjustment
                        
                        
                        2,433,472
                        
                        
                        
                        (1,595,742
                        )
                        
                        
                        3,466,111
                        
                        
                        
                        (461,666
                        )Comprehensive
      income (loss)
                        
                        $
                        528,785
                        
                        
                        $
                        (6,274,907
                        )
                        
                        $
                        (3,336,715
                        )
                        
                        $
                        (2,693,489
                        )





See Notes
to Consolidated Financial Statements.


8


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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
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 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 September 30, 2009, the results of operations for the
three and nine months ended September 30, 2009 and 2008 and cash flows for the
nine months ended September 30, 2009 and 2008.  These financial
statements should be read in conjunction with the consolidated financial
statements for the year ended December 31, 2008 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 translated to 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 September
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 September 30,
2009, delivery of two of our AHTS vessels had occurred from the shipyard,
Fincantieri Cantieri Navali Italiani SpA (“Fincantieri”) in Italy.  We
currently have contracts to purchase seven additional new AHTS vessels currently
under construction by Fincantieri.  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 the topic Development Stage Entities of
Financial Accounting Standards Board Accounting Standards Codification (“FASB
ASC”), FASB ASC 915.


9


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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
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 reorganization was effective on 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 FASB ASC 810, Consolidation -Non-controlling Interest in a
Subsidiary, 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 September 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
                        )
                        
                        
                        96,628Contributions,
      net of syndication costs
                        
                        
                        (23,361
                        )
                        
                        
                        (2,642
                        )
                        
                        
                        5,801,052Distributions
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (71,025
                        )Net
      loss
                        
                        
                        (98,253
                        )
                        
                        
                        (23,904
                        )
                        
                        
                        (2,184,136
                        )Forward
      currency exchange contract
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        1,922,243Foreign
      currency translation adjustment
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        1,143,544Balance
      at September 30, 2009
                        
                        $
                        694,362
                        
                        
                        $
                        (74,860
                        )
                        
                        $
                        24,058,350





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


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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
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 September 30, 2009, we had recorded no allowance for
doubtful accounts.





Derivatives
Instruments


We
account for derivatives and derivatives classified as hedges in accordance with
FASB ASC 815, Derivatives and
Hedging.  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 loss
on interest rate swaps.


11


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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
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 allocated to  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 using the effective interest method over the life of the related
debt agreements.  Deferred loan fees at September 30, 2009 and
December 31, 2008 amounted to $3,879,685 and $3,771,774, respectively, net of
accumulated amortization of $37,800 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 to
the noncontrolling unitholders 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




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
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





FASB
Accounting Standards Codification


(Accounting
Standards Update (“ASU”) 2009-01)





In June
2009, the FASB issued ASU 2009-01, 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.  We adopted Update
2009-01 as of September 30, 2009.





Derivatives
and Hedging Activities


(Included
in ASC 815 “Derivatives and Hedging”, previously SFAS No. 161 “Disclosures about
Derivative Instruments and Hedging Activities, an Amendment of SFAS No.
133”)





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.





Disclosure
about Fair Value of Financial Instruments


(Included
in ASC 825 “Financial Instruments”, previously FSP FAS 107-1 and APB 28-1
“Interim Disclosure about Fair Value of Financial Instruments”)





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.


13




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





Subsequent
Events


(Included
in ASC 855 “Subsequent Events”, previously SFAS No. 165 “Subsequent
Events”)





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.





2.
            Maritime
      Vessels





We
committed to purchase nine AHTS vessels.  As of September 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 $54,222,413
(EUR 37,159,000) to $62,154,624 (EUR 42,595,000) for a total commitment for the
nine vessels of $525,821,261 (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, our noncontrolling
interest holder and the 25% owner of the three AHTS SPVs of FLTC Fund I,
(“Hartmann Guarantee”) in the amount of $54,518,448 (EUR 37,361,875) was
outstanding at September 30, 2009.  There were no guarantees
outstanding at December 31, 2008.  As of September 30, 2009, the terms
of the Hartmann Guarantee were being renegotiated between Reederei
Hartmann and Nord/LB, and those discussions are ongoing.  The main subject
of these negotiations is the form of collateral to be provided under the
guarantee by Reederei Hartmann to Nord/LB.  Please refer to the full
discussion regarding this issue under Note 4 on Page 19.  As of September
30, 2009 and December 31, 2008, we incurred $203,024,394 and $80,860,590,
respectively, in connection with the acquisition of the AHTS
vessels.  The remaining seven AHTS vessels are scheduled to be
delivered from October 2009 through April 2010.  Each of our assets
under construction is allocated a portion of the total interest incurred on all
of our debt instruments for the period based on the product of the weighted
average accumulated expenditures and the weighted average interest rate for the
period.  The remaining balance of the interest incurred is
expensed.  See Note 4 for additional information.





In
addition to our AHTS vessels, we 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
formed Anthos Shipping Co. Limited (“Anthos”), a Cyprus SPV, to own the chemical
tanker.  The equity of Anthos is to be assigned to 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.


14




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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 September 30, 2009, we have incurred costs
of $9,603,841 including debt, fees and interest allocated as described above, in
connection with the potential acquisition of chemical tanker through
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.





The
following presents summarized financial information for the unconsolidated
entities:





September 30,
                                
                                
                                December 31,2009
                                
                                
                                2008Assets
                                
                                $
                                26,832,489
                                
                                
                                $
                                26,294,940Liabilities
                                
                                $
                                20,453,634
                                
                                
                                $
                                19,323,326Equity
                                
                                
                                6,378,855
                                
                                
                                
                                6,971,614Total
      liabilities and equity
                                
                                $
                                26,832,489
                                
                                
                                $
                                26,294,940Three
      Months Ended September 30,
                                
                                
                                Nine
      Months Ended September 30,2009
                                
                                
                                2008
                                
                                
                                2009
                                
                                
                                2008For
      the PeriodRevenue
                                
                                $
                                1,909,989
                                
                                
                                $
                                1,705,380
                                
                                
                                $
                                4,944,435
                                
                                
                                $
                                4,606,163Expenses
                                
                                
                                (2,491,411
                                )
                                
                                
                                (2,116,073
                                )
                                
                                
                                (6,156,529
                                )
                                
                                
                                (7,333,883
                                )Net
      loss
                                
                                $
                                (581,422
                                )
                                
                                $
                                (410,693
                                )
                                
                                $
                                (1,212,094
                                )
                                
                                $
                                (2,727,720
                                )Interest
      in net loss of unconsolidated entities
                                
                                $
                                (284,897
                                )
                                
                                $
                                (201,240
                                )
                                
                                $
                                (593,926
                                )
                                
                                $
                                (1,336,583
                                )


15




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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 $58,660 between the amount at which the
investment is reflected on our consolidated balance sheet as of September 30,
2009, $3,066,979, and 49% of the equity as shown on the financial information
above, $3,125,639, 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 September 30, 2009.





4.
            Long-Term
      Debt and Pledged Cash





September 30,
                  
                  
                  December 31,2009
                  
                  
                  2008Berenberg
      Facility
                  
                  $
                  -
                  
                  
                  $
                  56,255,375Senior
      Loan
                  
                  
                  99,086,292
                  
                  
                  
                  -Schulte
      Group
                  
                  
                  5,300,000
                  
                  
                  
                  -Total
      debt
                  
                  
                  104,386,292
                  
                  
                  
                  56,255,375Current
      portion of long-term debt
                  
                  
                  (8,523,549
                  )
                  
                  
                  (34,927,967
                  )Total
      debt classified as long-term
                  
                  $
                  95,862,743
                  
                  
                  $
                  21,327,408





In
November 2006, we entered into a credit facility (“Berenberg Facility”) with
Berenberg Bank, a German financial institution, allowing for borrowings up to
$38,522,880 (EUR 26,400,000).  Proceeds from borrowings were primarily
used for the acquisition of AHTS vessels.  The Berenberg Facility was
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 $73,397,760 (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 was calculated based on the one-month EURIBOR rate
plus a margin of 0.35%.  The weighted-average effective interest rate
as of December 31, 2008 was 3.97%.  Interest was due quarterly but was
rolled into the principal amount instead of being paid.  Principal
payments were 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 were required to maintain compensating balances as
security for the repayment of the borrowings under such facility.  The
compensating balances were required to 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 represented the
original tranche balance plus interest earned since the original deposit
date.  The tranche balance represented the original loan plus all
incurred interest which was rolled into the new loans upon maturity which was
usually three months.  As the interest rate earned on the compensating
balances was less than the interest charged on the tranche balance, the
compensating balances did not fully offset the outstanding tranche
balances.  During the second and third quarters of 2009, the Berenberg
Facility loans were repaidutilizing
the restricted cash balances which were pledged against the loans, supplemented
with contributions from our limited partners.  As of September 30,
2009, there were no borrowings or compensating balances.  As of
December 31, 2008, borrowings of $56,255,375 (EUR 39,905,920), were outstanding
and the related compensating balance was $55,967,374 (EUR
39,701,620).  We do not intend to utilize the Berenberg Facility in
the future.


16




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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 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
quarterly 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
(“Schulte Group Facility”) and to facilitate a bank guarantee for the second
installment payment of $8,300,000.





IMS
Holdings repaid $3,000,000 of the Schulte Group Facility through its affiliate
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.  The interest on the Schulte Group Facility is based on the
three-month US LIBOR rate plus a margin of 4.50%.  The effective
interest rate as of September 30, 2009 was 5.10%.  Interest is due
quarterly.  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.





On
December 19, 2008, we entered into a $613,695,744 (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 $122,729,149 (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.


17




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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 $14,592 (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 $7,296 (EUR 5,000) per year per vessel until the
Senior Loan is paid in full.





Amounts
drawn on the Pre-Delivery Facility of the 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 to provide
assurance of repayment of the Pre-Delivery Facility.  As of September
30, 2009, we have incurred expenses of $633,360 (EUR 463,355) related to the
guarantee.  The Hartmann Guarantee in the amount of $54,518,448 (EUR
37,361,875) was outstanding at September 30, 2009.  There were no
guarantees outstanding at December 31, 2008.





As of
September 30, 2009, the terms of the Hartmann Guarantee were being
renegotiated between Reederei Hartmann and Nord/LB, and those discussions
are ongoing.  The main subject of these negotiations is the form of
collateral to be provided under the guarantee by Reederei Hartmann to
Nord/LB.  Pending resolution of these discussions, Nord/LB has delayed
certain requested draws on the Pre-Delivery Facility under the Senior Loan to
allow us to make progress payments to Fincantieri.  Due to the delay, a
number of progress payments which were otherwise due to be paid to Fincantieri
under the shipbuilding contracts in the aggregate amount of $29,499,771 (EUR
20,216,400) with respect to 5 of the remaining 6 vessels to be delivered
have not been paid.  As a result, we are not in compliance with the
terms of the shipbuilding contracts, and Fincantieri would have the right to
cease construction activities on the remaining 6 vessels.  However,
Fincantieri has acknowledged the delay and has indicated to us that it does
not intend to cease construction pending resolutions of these matters.  In
addition, Fincantieri has not taken any action under the shipbuilding contracts
to demand payment.  As a result of these missed payments, we may not be in
compliance with the terms of our Senior Loan with Nord/LB.  Nord/LB is
aware that the payments have not been made, and has not taken any action under
the Senior Loan related to the non-compliance.  In the event we
are unable to resolve the issues with Nord/LB to fund amounts under the
Senior Loan sufficient to make these progress payments or are unable to raise
the necessary funds from other sources, we may not be able to fund the progress
payments currently due under the shipbuilding contracts for the remaining
vessels.  If that were to occur, we would be in default of the
shipbuilding contracts and our Senior Loan documents.  If Reederei Hartmann
were to provide funds to the SPV pursuant to the Hartmann Guarantee to cover the
payments due and we were unable to fund our remaining unfunded capital by the
date of delivery of the respective vessels, Reederei Hartmann could take over
the unfunded portion of our 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 $1,459,200 (EUR 1,000,000).  If interest incurred exceeds
$1,459,200 (EUR 1,000,000), the excess interest will be due at each interest
payment date which can be every three to six months.


18




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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 $350,208,000
(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.





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
$14,774,400 (EUR 10,125,000) to $41,587,200 (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
September 30, 2009, a total of $99,086,292 (EUR 67,904,531) was outstanding
under the Senior Loan with an effective interest rate of 3.043%.  The
outstanding balance will be due in full in February 2021.  During the
three and nine months ended September 30, 2009, we incurred interest expense of
$784,829 (EUR 549,148) and $1,474,323 (EUR 1,078,589), respectively, related to
the drawdown on the Senior Loan.





A summary
of the total interest incurred, capitalized and expensed is shown
below:





Three Months Ended
                  
                  
                  Nine Months EndedEnded September 30,
                  
                  
                  Ended September 30,2009
                  
                  
                  2008
                  
                  
                  2009
                  
                  
                  2008Interest
      capitalized to vessel construction in progress:Beginning
      of period
                  
                  $
                  2,872,169
                  
                  
                  $
                  2,369,188
                  
                  
                  $
                  3,448,928
                  
                  
                  $
                  1,017,307Interest
      incurred
                  
                  
                  1,360,842
                  
                  
                  
                  532,797
                  
                  
                  
                  3,795,361
                  
                  
                  
                  1,916,113Currency
      translation change related to beginning balance
                  
                  
                  133,093
                  
                  
                  
                  (93,242
                  )
                  
                  
                  121,105
                  
                  
                  
                  (19,339
                  )Interest
      related to property and other assets held for sale
                  
                  
                  -
                  
                  
                  
                  8,120
                  
                  
                  
                  -
                  
                  
                  
                  (86,903
                  )Interest
      expense
                  
                  
                  (563,937
                  )
                  
                  
                  54
                  
                  
                  
                  (2,404,448
                  )
                  
                  
                  (10,261
                  )Amount
      reclassed to delivered vessels
                  
                  
                  (44,873
                  )
                  
                  
                  -
                  
                  
                  
                  (1,203,652
                  )
                  
                  
                  -End
      of period
                  
                  $
                  3,757,294
                  
                  
                  $
                  2,816,917
                  
                  
                  $
                  3,757,294
                  
                  
                  $
                  2,816,917Interest
      paid
                  
                  $
                  1,336,824
                  
                  
                  $
                  (533
                  )
                  
                  $
                  3,177,335
                  
                  
                  $
                  101,834Interest
      added to principal on borrowings on Berenberg Facility
                  
                  $
                  24,017
                  
                  
                  $
                  532,851
                  
                  
                  $
                  618,026
                  
                  
                  $
                  1,905,852


19




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
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
FASB ASC 815, Derivatives and
Hedging.





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 $46,879,536 (EUR 32,126,875) at September 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 $395,279,724 (EUR 270,887,969) at
September 30, 2009, bringing the total notional value under the nine interest
rate swap agreements to $442,159,260 (EUR 303,014,844) at September 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.  The interest rate swaps contain no
credit-risk-related contingent features and are not
collateralized.  These instruments are not designated for hedge
accounting under FASB ASC 815,
Derivatives and Hedging.





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.  The forward
currency exchange contracts, which have been designated for hedge accounting
under FASB ASC 815, Derivatives and Hedging,
total $113,400,000.





Derivative
instruments, including those classified as hedges, are reported as either assets
or liabilities at their individual fair values and the 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 loss on interest rate swaps 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 fair 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.  For purposes
of testing our derivatives classified as hedges, no portion of the contracts was
excluded from testing.


20




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





The fair
value of our derivative instruments as of September 30, 2009 is as
follows:





Fair Value
                
                
                Fair Value
                
                
                Fair Value
                
                
                Fair Valueof Short-Term
                
                
                of Derivative
                
                
                of Short-Term
                
                
                of DerivativeDerivative
                
                
                Assets, net of
                
                
                Derivative
                
                
                Liabilities, net ofDerivatives by hedge designation
                
                Assets
                
                
                short-term portion
                
                
                Liabilities
                
                
                short-term portionDesignated
      as hedging instruments:Forward
      currency exchange contracts
                
                $
                2,246,254
                
                
                $
                5,350,332
                
                
                $
                -
                
                
                $
                -Not
      designated as hedging instruments:Forward
      currency exchange contracts
                
                
                1,320,003
                
                
                
                -
                
                
                
                -
                
                
                
                -Interest
      rate swap agreements
                
                
                -
                
                
                
                -
                
                
                
                2,782,875
                
                
                
                7,644,563Total
      derivatives
                
                $
                3,566,257
                
                
                $
                5,350,332
                
                
                $
                2,782,875
                
                
                $
                7,644,563





For the
three and nine months ended September 30, 2009, we recognized net gains and
(losses) on derivative instruments as follows:





Three Months
                      
                      
                      Nine MonthsEnded
                      
                      
                      EndedDerivatives by hedge designation
                      
                      Classification of gains (losses)
                      
                      September 30, 2009
                      
                      
                      September 30, 2009Designated
      as hedging instruments:Cash
      flow hedges:Forward
      currency exchange contracts
                      
                      Foreign
      currency transaction gain (loss)
                      
                      $
                      (12,075
                      )
                      
                      $
                      (86,543
                      )Not
      designated as hedging instruments:Forward
      currency exchange contracts
                      
                      Foreign
      currency transaction gain (loss)
                      
                      $
                      524,126
                      
                      
                      $
                      2,042,609Interest
      rate swap agreements
                      
                      Loss
      on interest rate swaps
                      
                      $
                      (6,199,724
                      )
                      
                      $
                      (9,767,863
                      )





For the
three and nine months ended September 30, 2009, the foreign currency transaction
loss related to forward currency exchange contracts designated as Cash Flow
Hedges of $12,075 and $86,543, respectively, is related to the fair value of the
ineffective portion of the forward currency exchange contracts.  The
contracts do not start maturing until December 2009.  As the contracts
mature, the fair value amounts related to the effective portion of the currency
forward exchange contracts, which are currently recorded as Accumulated Other
Comprehensive Income, will be recorded to Hedge Foreign Currency Transaction
gain (loss).  The current effective portion of $2,219,966
(EUR 1,521,358), is expected to be reclassified into net income within the
next twelve months.





For the
three months ended September 30, 2009, $650,432 of the foreign currency
transaction gain totaling $524,126 is related to forward currency exchange
contracts not designated as hedging instruments is due to the contracts that
have matured, and the offsetting amount of $126,306 is due to the fair value of
the remaining contracts, which is currently a liability amount.





For the
nine months ended September 30, 2009, $806,101 of the foreign currency
transaction gain related to forward currency exchange contracts not designated
as hedging instruments is due to the contracts that have matured, and $1,236,508
is due to the fair value of the remaining contracts.





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 three year management fee of $4,200,000,
payable in 12 quarterly 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.


21




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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 September 30, 2009 and December 31, 2008, the
amount receivable from SCMH in connection with the Letter Agreement was
$1,819,654 and $1,661,782, respectively, including accrued interest of $186,671
and $118,798, respectively.  During the three and nine months ended
September 30, 2009, we recognized interest income of $22,669and $67,872,
respectively.





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 September 30, 2009, we had a residual
amount due of $100,037 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 September 30, 2009 and December 31, 2008 was $524,579 and $1,001,041,
including $42,079 and $1,041 of accrued interest,
respectively.  During the three and nine months ended September 30,
2009, we incurred interest of $19,688 and $71,128, 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.  As of September 30, 2009, the loan
is paid in full.  The loan balance at December 31, 2008 is $251,233,
and includes accrued interest of $1,233.  There was no accrued
interest payable as of September 30, 2009.  During the three and nine
months ended September 30, 2009, we incurred interest of $1,119 and $11,319,
respectively, related to this loan.


22




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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
September 30, 2009 and December 31, 2008 were $4,560,000 (EUR 3,125,000) 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 September 30, 2009 and December 31,
2008 were $2,006,400 (EUR 1,375,000) and $352,425 (EUR 250,000),
respectively.





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 $729,600 (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, all of which are affiliates of SCMH.  As of
September 30, 2009 and December 31, 2008, we incurred $3,420,000 (EUR 2,343,750)
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 FASB ASC 820, Fair Value Measurements and
Disclosures 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 FASB ASC 820, Fair Value Measurements and
Disclosures 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, accrued interest, 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 September 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.


23




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





The fair
value of the interest rate swaps and the forward currency exchange contracts
discussed in Note 5 are presented separately in both current and long-term
derivative liabilities and 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 September 30,
2009.  The fair values 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.





Our
assets and liabilities as of September 30, 2009 that are measured at fair value
on a recurring basis are summarized below:





Level 1
                
                
                Level 2
                
                
                Level 3AssetsForward
      currency exchange contracts
                
                $
                -
                
                
                $
                8,916,589
                
                
                $
                -LiabilitiesInterest
      rate swap agreements
                
                $
                -
                
                
                $
                10,427,438
                
                
                $
                -





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 September 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 September 30,
                          
                          
                          Nine Months Ended September 30,2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008Unrealized
      gain on forward currency exchange contract hedge
                          
                          $
                          4,935,865
                          
                          
                          $
                          -
                          
                          
                          $
                          7,688,972
                          
                          
                          $
                          -Foreign
      currency translation adjustment
                          
                          
                          2,433,472
                          
                          
                          
                          (1,595,742
                          )
                          
                          
                          3,466,111
                          
                          
                          
                          (461,666
                          )Other
      comprehensive income (loss)
                          
                          
                          7,369,337
                          
                          
                          
                          (1,595,742
                          )
                          
                          
                          11,155,083
                          
                          
                          
                          (461,666
                          )Less
      other comprehensive (income) loss attributable to noncontrollinginterest
                          
                          
                          (1,636,313
                          )
                          
                          
                          61,374
                          
                          
                          
                          (2,011,890
                          )
                          
                          
                          17,756Other
      comprehensive income (loss) attributable to III to I MaritimePartners Cayman I, L.P.
                          
                          $
                          5,733,024
                          
                          
                          $
                          (1,534,368
                          )
                          
                          $
                          9,143,193
                          
                          
                          $
                          (443,910
                          )


24




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




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




SEPTEMBER
30, 2009




(Unaudited)





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





September 30,
                  
                  
                  December 31,2009
                  
                  
                  2008Unrealized
      loss on forward currency exchange contract hedge
                  
                  $
                  5,766,729
                  
                  
                  $
                  -Foreign
      currency translation adjustment
                  
                  
                  3,499,630
                  
                  
                  
                  123,166Accumulated
      other comprehensive income
                  
                  $
                  9,266,359
                  
                  
                  $
                  123,166





10.
            Subsequent
      Events





On
October 5, 2009, the vessel UOS Columbia was delivered to our AHTS SPV, Isle of
Baltrum.  We accepted a drawdown on the Senior Loan Facility on
October 2, 2009 related to the delivery totaling  $51,116,779 (EUR
35,047,500).





On
November 4, 2009, an extension of the current charter with EDT Offshore Egypt
S.A.E. for our vessel UOS Atlantis held in our AHTS SPV MS Juist was executed,
resulting in an adjustment to the rate and an extension of the term of the
contract through March 14, 2011.  The new rate is retroactive to
September 16, 2009, and therefore our revenue for the nine months ended
September 30, 2009 has been adjusted to reflect this change.





We
analyze subsequent events in accordance with FASB ASC 855, Subsequent Events 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 November 19, 2009 which is the date of issuance of the
financial statements, and we have determined that no additional disclosures are
required.


25


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 nine
months ended September 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, and an update to our Quarterly Report on
Form 10-Q for the three and six months ended June 30, 2009 and 2008.
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 September 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, three 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, and the third on October 5, 2009,
with the six AHTS vessels still under construction scheduled for delivery from
late November 2009 through April 2010. Our three delivered AHTS vessels were
immediately placed in service. The first two vessels began operating under their
respective charter agreements on March 15, 2009 and June 24, 2009, respectively.
The third vessel is currently available in the North Sea spot market, under
which vessels are available for short-term hire typically measured in days or
weeks. 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, and the
third delivered and operating in the North Sea spot market, 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 theDevelopment Stage Entitiestopic of Financial Accounting Standards Board Accounting Standards
Codification (“FASB ASC”), FASB ASC 915.





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.


26





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.





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 anticipate that 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.





The
average charter rate per day based on contracts currently in place as of
September 30, 2009 is $39,500 per day. 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. On
November 4, 2009, an extension of this charter was executed, resulting in an
adjustment to the rate and an extension of the term of the contract through
March 14, 2011. The new rate is retroactive to September 16, 2009, and therefore
the effect is included in the average charter rate per day as of September 30,
2009 shown above. 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 (deficit)
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 ($1,758) and $6,736 for the three and nine months
ended September 30, 2009, based on the date the vessel was placed in service
through September 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 $99,802 and $276,419 for the three and nine months ended
September 30, 2009. Also included in current results are expenses related to
damage to the vessel’s propeller sustained in July while the vessel was in port
totaling $549,277.


27





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
(deficit) for our second AHTS vessel averaged $13,615 and ($3,670) for the three
and nine months ended September 30, 2009, based on the date the AHTS vessel was
placed in service through September 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 $141,337 and $176,699 for the three and nine
months ended September 30, 2009. Also included are charges related to repairs
resulting from damage to the AHTS vessel’s main winch sustained during regular
operations, and compensation due to the charterer related to days the vessel was
unavailable to the charterer while the repairs on the main winch were made,
totaling $708,676 for the nine months ended September 30, 2009.





The
current AHTS market reflects day rates which are significantly off the high day
rates experienced at the peak of the market during 2007. This can be traced to
the weakening of the economy over the past 18 months, combined with the
contraction in the credit markets. Both of these factors have negatively
impacted budgets for exploration and development, especially outside of the
major oil companies. If economic expectations rise or the price of oil increases
significantly, we would expect day rates to firm. However, we do not expect
significant strengthening of day rates until the credit markets recover,
allowing both the major oil companies and other smaller companies to expand
their exploration and development budgets.





Our third
vessel, UOS Columbia, was delivered in October 2009. The vessel is currently
working in the North Sea spot market. Our commercial manager, UOS, is currently
pursuing opportunities with charterers for our vessels. The remaining AHTS
vessels are currently scheduled for delivery from late November 2009 through
April 2010, although delays in delivery of one or two months are not
unusual.If the current
environment were to continue or worsen, and we were unable to achieve adequate
utilization of our vessels, the delivery of the additional vessels and the
associated operating costs and debt service could negatively impact our
financial results.


28


Results
of Operations





Three
      Months Ended September 30,
                                      
                                      
                                      Nine
      Months Ended September 30,2009
                                      
                                      
                                      2008
                                      
                                      
                                      2009
                                      
                                      
                                      2008Time
      charter revenue
                                      
                                      $
                                      5,886,791
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      11,105,681
                                      
                                      
                                      $
                                      -Operating
      expenses:Vessel
      operating expenses
                                      
                                      
                                      5,177,821
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      10,467,462
                                      
                                      
                                      
                                      -Professional
      fees
                                      
                                      
                                      549,205
                                      
                                      
                                      
                                      398,328
                                      
                                      
                                      
                                      2,489,317
                                      
                                      
                                      
                                      747,945Brokerage
      and representation fees
                                      
                                      
                                      232,408
                                      
                                      
                                      
                                      164,063
                                      
                                      
                                      
                                      560,533
                                      
                                      
                                      
                                      492,188Other
      operating expenses
                                      
                                      
                                      197,167
                                      
                                      
                                      
                                      75,355
                                      
                                      
                                      
                                      430,250
                                      
                                      
                                      
                                      268,362Total
      operating expenses
                                      
                                      
                                      6,156,601
                                      
                                      
                                      
                                      637,746
                                      
                                      
                                      
                                      13,947,562
                                      
                                      
                                      
                                      1,508,495Operating
      loss
                                      
                                      
                                      (269,810
                                      )
                                      
                                      
                                      (637,746
                                      )
                                      
                                      
                                      (2,841,881
                                      )
                                      
                                      
                                      (1,508,495
                                      )Other
      income (expense):Interest
      income
                                      
                                      
                                      70,387
                                      
                                      
                                      
                                      673,123
                                      
                                      
                                      
                                      935,719
                                      
                                      
                                      
                                      1,896,922Interest
      expense
                                      
                                      
                                      (563,937
                                      )
                                      
                                      
                                      54
                                      
                                      
                                      
                                      (2,404,448
                                      )
                                      
                                      
                                      (10,261
                                      )Loss
      on interest rate swap
                                      
                                      
                                      (6,199,724
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (9,767,863
                                      )
                                      
                                      
                                      -Foreign
      currency transaction gain (loss)
                                      
                                      
                                      407,429
                                      
                                      
                                      
                                      (4,513,356
                                      )
                                      
                                      
                                      180,601
                                      
                                      
                                      
                                      (1,273,406
                                      )Equity
      in loss of unconsolidated entities
                                      
                                      
                                      (284,897
                                      )
                                      
                                      
                                      (201,240
                                      )
                                      
                                      
                                      (593,926
                                      )
                                      
                                      
                                      (1,336,583
                                      )Total
      other income (expense)
                                      
                                      
                                      (6,570,742
                                      )
                                      
                                      
                                      (4,041,419
                                      )
                                      
                                      
                                      (11,649,917
                                      )
                                      
                                      
                                      (723,328
                                      )Net
      loss
                                      
                                      
                                      (6,840,552
                                      )
                                      
                                      
                                      (4,679,165
                                      )
                                      
                                      
                                      (14,491,798
                                      )
                                      
                                      
                                      (2,231,823
                                      )Net
      loss attributable to thenoncontrolling
      interest
                                      
                                      
                                      1,344,176
                                      
                                      
                                      
                                      4,810
                                      
                                      
                                      
                                      2,331,361
                                      
                                      
                                      
                                      55,685Net
      loss attributable to III to I Maritime
                                      
                                      
                                      (5,496,376
                                      )
                                      
                                      
                                      (4,674,355
                                      )
                                      
                                      
                                      (12,160,437
                                      )
                                      
                                      
                                      (2,176,138
                                      )Partners
      Cayman I, L.P.Less
      general partner interest in net loss
                                      
                                      
                                      (78,078
                                      )
                                      
                                      
                                      (79,972
                                      )
                                      
                                      
                                      (176,520
                                      )
                                      
                                      
                                      (39,775
                                      )Limited
      partner interest in net loss
                                      
                                      $
                                      (5,418,298
                                      )
                                      
                                      $
                                      (4,594,383
                                      )
                                      
                                      $
                                      (11,983,917
                                      )
                                      
                                      $
                                      (2,136,363
                                      )Net
      loss per general partner unit:Basic
      and diluted
                                      
                                      $
                                      (7.89
                                      )
                                      
                                      $
                                      (8.08
                                      )
                                      
                                      $
                                      (17.83
                                      )
                                      
                                      $
                                      (4.02
                                      )Weighted
      average general partner units outstanding
                                      
                                      
                                      9,900
                                      
                                      
                                      
                                      9,900
                                      
                                      
                                      
                                      9,900
                                      
                                      
                                      
                                      9,900Net
      loss per limited partner unit:Basic
      and diluted
                                      
                                      $
                                      (7.89
                                      )
                                      
                                      $
                                      (8.08
                                      )
                                      
                                      $
                                      (17.83
                                      )
                                      
                                      $
                                      (4.02
                                      )Weighted
      average limited partner units outstanding
                                      
                                      
                                      687,016
                                      
                                      
                                      
                                      568,753
                                      
                                      
                                      
                                      672,125
                                      
                                      
                                      
                                      531,772





Three
Months Ended September 30, 2009 Compared to the Three Months Ended September 30,
2008 and the Nine Months Ended September 30, 2009 Compared to the Nine Months
Ended September 30, 2008





Revenues


Revenues
consist of charter revenue earned by our delivered AHTS vessels.





Revenues
increased approximately $5,887,000 and $11,106,000 for the three and nine months
ended September 30, 2009 compared to the three and nine months ended September
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.


29





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 $5,178,000 and $10,467,000 for the
three and nine months ended September 30, 2009, respectively, represent
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 and nine months ended September 30, 2009 include approximately
$291,000 and $873,000, respectively, of charges related to vessel repairs, the
majority of which is related to damage to the main winch of UOS Challenger
sustained during operations, and damage to the propeller of UOS Atlantis
sustained in a collision with an underwater object while the vessel was in
port.





Vessel
operating expenses for the fourth quarter will include repair costs related to
an incident with UOS Challenger involving the loss of its main wire during
vessel operations. Current estimates of repair costs and penalties due to the
charterer related to this incident are approximately $1,850,000. At this point,
we have not included any expectation of insurance reimbursement related to this
incident in our estimates, as any reimbursement is uncertain and the amount
received will likely be immaterial.





Professional
Fees


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





The
increase in professional fees of approximately $151,000, or 38%, from
approximately $398,000 for the three months ended September 30, 2008 compared to
approximately $549,000 for the three months ended September 30, 2009, was due to
an increase in legal and consulting fees of approximately $118,000 related to
responding to SEC inquiries regarding our initial registration statement and
legal and consulting work related to financing options for our additional
capital needs, and increases in audit fees of approximately $13,000 related to
the increased regulatory environment to which we are subject. Additionally, the
fees charged related to our administrative and professional services agreement
with Dental Community Management, Inc. (“DCMI”), which maintains our books and
records and handles all our business activities, accounted for $120,000 of the
increase. 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 increases in
the fee to DCMI relate to significant increases in all areas of our business,
including the complexity of the regulatory environment under which we operate,
the management services provided by DCMI personnel in relation to our regulatory
environment, and our business activities as the AHTS vessels are placed in
service. These differences were partially offset by decreases to our financing
fees of $100,000.





The
increase in professional fees of approximately $1,741,000, or 233%, from
approximately $748,000 for the nine months ended September 30, 2008 compared to
approximately $2,489,000 for the nine months ended September 30, 2009, was due
to increased legal, audit and tax service 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. These factors accounted for approximately
$1,341,000 of the increase. Additionally, our entrance into the DCMI agreement
accounted for an increase of $500,000. This effect was offset by the decreases
in our financing fees of $100,000, as mentioned above.





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 our current
agreement which is related to the acquisition of the AHTS vessels falls due
during the fourth quarter of 2009.





Our
brokerage and professional fees for the three and nine months ended September
30, 2008 as compared to that for the three and nine months ended September 30,
2009 each increased by approximately $68,000, due to our retaining a consultant
to assist in negotiations surrounding the acquisition of the remaining
vessels.





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.


30





The
increase in other operating expenses of approximately $122,000, or 162%, from
approximately $75,000 for the three months ended September 30, 2008 to
approximately $197,000 for the three months ended September 30, 2009, was due to
an increase in commissions related to the chartering of our vessels of
approximately $97,000. There was also a $43,000 increase in office and
miscellaneous costs, which was offset by an $18,000 decrease in travel costs due
to normal fluctuations.





The
increase in other operating expenses of approximately $162,000, or 60%, from
approximately $268,000 for the nine months ended September 30, 2008 to
approximately $430,000 for the nine months ended September 30, 2009, was due to
an increase in commissions related to the chartering of our vessels of $173,000,
and an increase in bank fees and miscellaneous and office costs of approximately
$89,000. These increases were partially offset by a decrease in travel and other
administrative costs of approximately $100,000.





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 the shipyard, Fincantieri Cantieri Navali Italiani SpA
(“Fincantieri”). As the balance of these pledged funds grew, so too did the
interest earned on the funds. During the nine months ended September 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 $603,000, or 90%, from approximately $673,000 for
the three months ended September 30, 2008 to approximately $70,000 for the three
months ended September 30, 2009. Interest income also decreased approximately
$961,000, or 51%, from approximately $1,897,000 for the nine months ended
September 30, 2008 to approximately $936,000 for the nine months ended September
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 repaid during the second and third quarters of
2009.





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. In addition, loss on interest rate swaps has been
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 $564,000, from approximately $(54)
for the three months ended September 30, 2008 to approximately $564,000 for the
three months ended September 30, 2009, was primarily due to the drawdowns on our
Senior Loan facility related to the delivery of our AHTS vessels, which were
delivered in February and May 2009. The amount included in expense is the amount
incurred less the amount allocated to our assets under construction. Each of our
assets under construction is allocated a portion of the total interest incurred
on all of our debt instruments for the period based on the product of the
weighted average accumulated expenditures and the weighted average interest rate
for the period. The agency and commitment fees related to the Senior Loan, the
guarantee fees due under the guarantee provided by Reederei Hartmann, and
interest expense related to a loan from a related party and amortization expense
on the deferred loan costs also contributed to the increase in interest
expense.





The loss
on interest rate swaps of approximately $6,200,000 for the three months ended
September 30, 2009 is due to the recognition of loss related to the interest
rate swap agreements related to the Nord/LB senior loan facility for 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 $6,200,000 is recorded in our results of operations
as loss on interest rate swaps. The agreements are effective from 2010 through
2019, and are currently recorded as a derivative liability totaling
approximately $10,427,438, due to the relatively low variable rates being
experienced as compared with the fixed rates under the swap
agreements.


31





The
increase in interest expense of approximately $2,394,000, from approximately
$10,000 for the nine months ended September 30, 2008 to approximately $2,404,000
for the nine months ended September 30, 2009, was related to the increases in
interest expense 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 remaining increase is due to the fees due under the guarantee provided by
Reederei Hartmann, payments related to the option to purchase the chemical
tanker, and interest expense related to a loan from a related party and
amortization expense of the deferred loan costs.





The loss
on interest rate swaps of $9,768,000 is due to the execution of the interest
rate swap agreements discussed above. All of the interest rate swap agreements
were entered into during the nine months ended September 30, 2009, resulting in
the initial recording of the fair value of these positions during this period,
the offset of which is loss on interest rate swaps in the amount of
approximately $9,768,000.





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 Cayman partnership are converted to our
functional currency, USD, on each balance sheet date. Also included are amounts
related to recording the current fair value of currency forward exchange
contracts which are not designated as cash flow hedges and the ineffective
portion of currency forward exchange contracts which are designated as cash flow
hedges.





The
change in our foreign currency transaction gain (loss) from the three and nine
months ended September 30, 2008 to the three and nine months ended September 30,
2009, was caused by a continuation of a period of relatively high volatility in
exchange rates. One 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, our entrance 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 USD revenue will be converted
to EUR, resulted in the recognition of a net foreign currency transaction gain
for the three and nine months ended September 30, 2009 totaling $1,956,000 and
$512,000, respectively.





Equity in 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
increase of approximately $84,000 in the loss recognized from the three months
ended September 30, 2008 compared to the three months ended September 30, 2009,
is due to normal fluctuations in the activity of the vessels, which is fairly
sensitive to the current economic environment.





The
decrease of approximately $743,000 in the loss recognized from the nine months
ended September 30, 2008 compared to the nine months ended September 30, 2009,
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 nine months ended September 30, 2008 and
the three and nine months ended September 30, 2009, was primarily due to the
difference in income for the periods presented.


32





Liquidity
and Capital Resources





As of
September 30, 2009, we had cash of $18,628,344. Since inception through
September 30, 2009, we have raised approximately $66,558,588, net of syndication
costs of approximately $3,424,532, 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. The net result of this is that the majority of the funds raised were
ultimately used to pay the first two of five installments to Fincantieri for the
construction of the AHTS vessels.





Upon the
deliveries of UOS Atlantis, UOS Challenger, and UOS Columbia, funds were drawn
on the Senior Loan. Those funds were used to repay outstanding balances on loans
from Reederei Hartmann in the case of the first two vessels, and to 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 $27,615,000 for the nine
months ended September 30, 2009, as compared to net cash provided of
approximately $334,000 for the nine months ended September 30, 2008, for an
increase in net cash used of approximately $27,281,000. Net cash used increased
between periods due to increased expenses in excess of revenues, 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. These increases were partially offset by significant
increases in accounts payable due to the accrued vessel installment payments and
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.





Investing Cash
Flows


Investing
activities used approximately $63,641,000 for the nine months ended September
30, 2009, as compared to $24,193,000 for the nine months ended September 30,
2008, for an increase in net cash used of approximately $39,448,000. This was
due primarily to the use of approximately $112,342,000 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 $7,147,000
was purchased during the nine months ended September 30, 2009. During the nine
months ended September 30, 2008, proceeds of approximately $3,000,000 were
provided by the sale of an AHTS vessel to FLTC Fund I. There were no
corresponding dispositions during the nine months ended September 30, 2009.
These factors were partially offset by a decrease in amounts due from related
parties between the two periods, and a decrease in restricted cash of
approximately $55,967,000 from the recording of the release by Berenberg Bank of
pledged cash for loans related to 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 $49,806,000 for the nine
months ended September 30, 2009 as compared by approximately $23,970,000 for the
nine months ended September 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 $102,283,000, and a loan from Hartmann Reederei related to
the delivery of the third vessel of $7,501,000. These effects were partially
offset by the net repayments on the Berenberg Facility related to either of our
nine AHTS vessels of $54,121,000 and repayment of related party loans which
funded the fourth installments to the shipyard for UOS Atlantis and UOS
Challenger totaling $11,513,000. In addition, principal repayments to Nord/LB
utilized cash of approximately $3,196,000 and payment of syndication costs
utilized cash of approximately $1,598,000. Contributions from partners were
approximately $5,542,000 for the nine months ended September 30, 2009, as
compared with approximately $11,684,000 for the nine months ended September 30,
2008. Contributions from noncontrolling interests in the AHTS SPVs were
approximately $5,898,000 for the nine months ended September 30, 2009 as
compared with approximately $3,662,000 for the nine months ended September 30,
2008.


33





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 $38,522,880 (EUR
26,400,000). The Berenberg Facility was amended in March and May 2007,
increasing the available borrowings to $73,397,760 (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 were required to maintain compensating balances as
security for the repayment of the borrowings under such facility. The
compensating balances were required to be equal to or greater than the amounts
drawn by our German Subsidiary and were used to pay deposits on the acquisition
and construction of our AHTS vessels. The Berenberg Facility was funded in
multiple tranches with each tranche being directly related to a single AHTS
vessel.





Interest
under the Berenberg Facility was calculated based on the one-month EURIBOR rate
plus a margin of 0.35%. The weighted-average effective interest rate as of
September 30, 2009 and December 31, 2008 was 0% and 3.97%, respectively.
Interest was due quarterly but was rolled into the principal amount instead of
being paid. Principal payments were due on each tranche upon the earlier of the
delivery date, sale of the related vessel or September 30, 2010.





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





Upon the
deliveries of UOS Atlantis and UOS Challenger, the restricted cash related to
the compensating balances was used to repay the majority of the outstanding
loans related to the AHTS vessels 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 September 30, 2009, there were no borrowings and correspondingly no
compensating balances held as restricted cash. As of December 31, 2008,
borrowings of $56,255,375 (EUR 39,905,920) were outstanding and the related
compensating balances were $55,967,374 (EUR 39,701,620). We do not intend to
utilize the Berenberg Facility in the future.





Nord/LB
Facility


On
December 19, 2008, we entered into a $613,695,744 (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
$122,739,148 (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 $14,592 (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 $7,296 (EUR 5,000) per year per vessel until the Senior Loan
is paid in full.


34





Amounts
drawn on the Pre-Delivery Facility of the 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 to provide
assurance of repayment of the Pre-Delivery Facility. A guarantee from Reederei
Hartmann, our noncontrolling interest holder and the 25% owner of the three AHTS
SPVs of FLTC Fund I (“Hartmann Guarantee”) in the amount of $54,518,448 (EUR
37,361,875) was outstanding at September 30, 2009. There were no guarantees
outstanding at December 31, 2008.





As of
September 30, 2009, the terms of the Hartmann Guarantee were being renegotiated
between Reederei Hartmann and Nord/LB, and those discussions are ongoing. The
main subject of these negotiations is the form of collateral to be provided
under the guarantee by Reederei Hartmann to Nord/LB. Pending resolution of these
discussions, Nord/LB has delayed certain requested draws on the Pre-Delivery
Facility under the Senior Loan to allow us to make progress payments to
Fincantieri. Due to the delay, a number of progress payments which were
otherwise due to be paid to Fincantieri under the shipbuilding contracts in the
aggregate amount of $29,499,771 (EUR 20,216,400) with respect to 5 of the
remaining 6 vessels to be delivered have not been paid. As a result, we are not
in compliance with the terms of the shipbuilding contracts and Fincantieri would
have the right to cease construction activities on the remaining 6 vessels.
However, Fincantieri has acknowledged the delay and has indicated to us that it
does not intend to cease construction pending resolutions of these matters. In
addition, Fincantieri has not taken any action under the shipbuilding contracts
to demand payment. As a result of these missed payments, we may not be in
compliance with the terms of our Senior Loan with Nord/LB. Nord/LB is aware that
the payments have not been made, and has not taken any action under the Senior
Loan related to the non-compliance. In the event we are unable to resolve the
issues with Nord/LB to fund amounts under the Senior Loan sufficient to make
these progress payments or are unable to raise the necessary funds from other
sources, we may not be able to fund the progress payments currently due under
the shipbuilding contracts for the remaining vessels. If that were to occur, we
would be in default of the shipbuilding contracts and our Senior Loan documents.
If Reederei Hartmann were to provide funds to the SPV pursuant to the Hartmann
Guarantee to cover the payments due and we were unable to fund our remaining
capital by the date of delivery of the respective vessels, Reederei Hartmann
could take over the unfunded portion of our 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
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 $1,459,200 (EUR
1,000,000). If interest incurred exceeds $1,459,200 (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
September 30, 2009, a total of $99,086,292 (EUR 67,904,531) was outstanding
under the Senior Loan with an effective interest rate of 3.043%. The outstanding
balance will be due in full in February 2021. During the nine months ended
September 30, 2009, we incurred interest of $1,474,323 (EUR 1,078,589) related
to the drawdowns on the Senior Loan.


35





UOS
Columbia was delivered to our AHTS SPV Isle of Baltrum on October 5, 2009. In
anticipation of the delivery and in order to meet the conditions of the Senior
Loan, a loan was granted to our AHTS SPV Isle of Baltrum by Reederei Hartmann,
which was included in liabilities as of September 30, 2009 in the amount of
$7,755,648 (EUR 5,315,000). We accepted a drawdown on the Senior Loan on October
2, 2009 totaling $51,120,284 (EUR 35,047,500). The proceeds from the drawdown
were used to repay the pre-delivery facility from Nord/LB and to pay the fifth
and final installments to Fincantieri totaling $49,179,110 (EUR 33,716,653). The
remaining proceeds were used to provide cash reserves to the respective SPV for
remaining outfitting costs and future operations.





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 $350,208,000
(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 (“Schulte Group Facility”)
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 September 30, 2009 and December 31, 2008, $8,300,000
had been paid toward the option to purchase the chemical tanker.





IMS
Holdings repaid $3,000,000 on the Schulte Group Facility 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.


36





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. The interest on
the Schulte Group Facility is based on the three-month US LIBOR rate plus a
margin of 4.50%. The effective interest rate as of September 30, 2009 was 5.10%.
Interest is due quarterly. 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 September 30, 2009, a total of
$5,300,000 was outstanding under the Schulte loan agreement at an effective
interest rate of 5.10%. During the nine months ended September 30, 2009, we
incurred interest of $231,904 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.





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





September
      30,
                            
                            
                            December
      31,2009
                            
                            
                            2008Cash
      and cash equivalents
                            
                            $
                            1,240
                            
                            
                            $
                            -Related
      party receivable
                            
                            
                            -
                            
                            
                            
                            4,278,164Deferred
      loan fees
                            
                            
                            233,801
                            
                            
                            
                            222,316Deposits
      on asset acquisition
                            
                            
                            9,603,841
                            
                            
                            
                            -Total
      assets
                            
                            
                            9,838,882
                            
                            
                            
                            4,500,480Accounts
      payable and other accrued liabilities
                            
                            
                            78,534
                            
                            
                            
                            223,547Accrued
      interest payable
                            
                            
                            -
                            
                            
                            
                            -Due
      to related party
                            
                            
                            137,117
                            
                            
                            
                            144,308Schulte
      Group note payable
                            
                            
                            5,300,000
                            
                            
                            
                            -Total
      liabilities
                            
                            
                            5,515,651
                            
                            
                            
                            367,855Net
      assets
                            
                            $
                            4,323,231
                            
                            
                            $
                            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 obtain the equity of Anthos, 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 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 quarterly 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.


37





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.





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 the equity in Anthos, which holds the
contract for the acquisition of the chemical tanker, which would be held through
Kronos.





Ongoing Capital
Expenditures


We had
commitments to purchase the seven remaining AHTS vessels under construction as
of September 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 September 30, 2009.  The estimated cost of each of the
remaining seven AHTS vessels ranges from $54,965,146 (EUR 37,668,000) to
$62,154,624 (EUR 42,595,000), for a total commitment for the remaining vessels
of $417,084,595 (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.  As of September 30, 2009, we have incurred expenses of
$633,360 (EUR 463,355) related to the guarantee. The Hartmann Guarantee in
the amount of $54,518,448 (EUR 37,361,875) was outstanding at September 30,
2009.


38


As
mentioned above underNord/LB
Facility, as of September 30, 2009, the terms of the Hartmann Guarantee
were being renegotiated with Nord/LB, and those discussions are
ongoing.  The main subject of these discussions is the form of
collateral to be provided under the guarantee by Reederei Hartmann to
Nord/LB.  During this period, Nord/LB has suspended payments under the
Pre-Delivery Facility, and as a result, certain progress payments due to
Fincantieri have not been paid.  Fincantieri has acknowledged the
delay and has indicated to us that it does not intend to cease construction
pending resolutions of these matters.  In spite of these issues, which
are currently affecting the funds available under the Pre-Delivery Facility of
the Senior Loan, we were able to draw on the loan for the delivery of the third
vessel on October 5, 2009 to our AHTS SPV “Isle of Baltrum”.  In
addition to our obligations to Fincantieri, there are agreements between the
AHTS SPVs and Hartmann Offshore for vessel construction oversight and commercial
and technical management during construction, which are included in our
commitments.  As of September 30, 2009 and December 31, 2008, we
incurred $203,024,394 and $80,860,590, respectively, in connection with the AHTS
vessel acquisition.





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 $729,600 (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.





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.  As mentioned above underNord/LB Facility, as of
September 30, 2009, the terms of the Hartmann Guarantee were being renegotiated
with Nord/LB, and those discussions are ongoing.  The main subject of
these discussions is the form of collateral to be provided under the guarantee
by Reederei Hartmann to Nord/LB.  During this period, Nord/LB has
suspended payments under the Pre-Delivery Facility.  Fincantieri has
acknowledged the delay and has indicated to us that it does not intend to
cease construction pending resolutions of these matters.





Upon
resolution of this matter, we anticipate that we will resume draws on the
Pre-Delivery Facility 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 $51,141,312 (EUR 35,047,500).  The
proceeds will be used to repay the Pre-Delivery Facility for the AHTS vessel,
fund the fifth installment to Fincantieri and, where amounts are available, fund
the outfitting of each vessel.  The schedule below reflects the
anticipated amount of reserves upon delivery for the remaining seven AHTS
vessels under construction based on the equity funded to the AHTS SPVs as of
September 30, 2009.





Remaining
                                      
                                      
                                      
                                      
                                      
                                      AnticipatedCapital
                                      
                                      
                                      
                                      
                                      
                                      Reserves orExpenditure
                                      
                                      
                                      Senior Loan
                                      
                                      
                                      (Deficit) in SPVSPV Name
                                      
                                      Vessel Name
                                      
                                      Obligation
                                      
                                      
                                      Proceeds
                                      
                                      
                                      at Delivery6162
      –  Isle of Baltrum
                                      
                                      UOS
      Columbia
                                      
                                      $
                                      53,619,473
                                      
                                      
                                      $
                                      51,141,312
                                      
                                      
                                      $
                                      5,277,487
                                      (1)6163
      –  Isle of Langeoog
                                      
                                      UOS
      Discovery
                                      
                                      
                                      53,468,006
                                      
                                      
                                      
                                      51,141,312
                                      
                                      
                                      
                                      (2,326,694
                                      )6168
      –  Isle of Amrum
                                      
                                      UOS
      Endeavour
                                      
                                      
                                      58,310,070
                                      
                                      
                                      
                                      51,141,312
                                      
                                      
                                      
                                      (7,168,758
                                      )6169
      –  Isle of Sylt
                                      
                                      UOS
      Enterprise
                                      
                                      
                                      58,310,070
                                      
                                      
                                      
                                      51,141,312
                                      
                                      
                                      
                                      (7,168,758
                                      )6171
      –  Isle of Wangerooge
                                      
                                      UOS
      Explorer
                                      
                                      
                                      60,226,729
                                      
                                      
                                      
                                      51,141,312
                                      
                                      
                                      
                                      (9,085,417
                                      )6172
      –  Isle of Neuwerk
                                      
                                      UOS
      Freedom
                                      
                                      
                                      60,226,729
                                      
                                      
                                      
                                      51,141,312
                                      
                                      
                                      
                                      (9,085,417
                                      )6173
      –  Isle of Usedom
                                      
                                      UOS
      Liberty
                                      
                                      
                                      60,226,729
                                      
                                      
                                      
                                      51,141,312
                                      
                                      
                                      
                                      (9,085,417
                                      )$
                                      404,387,806
                                      
                                      
                                      $
                                      357,989,184




(1)
            Isle
      of Baltrum – Anticipated Reserves in SPV at Delivery includes $7,755,648
      loaned by Hartmann to comply with Nord/LB’s Senior Loan
      conditions.





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,
which equity will 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 $153,216,000 (EUR 105,000,000) (“Capital
Commitment”).  This amount reflects an increase in our share capital
commitment for the Isle of Usedom SPV from $14,774,400 (EUR 10,125,000) to
$41,587,200 (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 $60,549,504 (EUR 41,495,000) as of
September 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 in order to meet obligations of the SPV, 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 the Company Agreements for each AHTS SPV, 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 meet such a capital
call at least to the extent to establish 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.


39


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





AnticipatedRemaining
                                  
                                  
                                  Reserves orCapital Contribution
                                  
                                  
                                  (Deficit) in SPV
                                  
                                  
                                  
                                  Anticipated VesselSPV Name
                                  
                                  Vessel Name
                                  
                                  Commitment(1)
                                  
                                  
                                  atDelivery
                                  
                                  
                                  
                                  DeliveryDate6160
      –  MS Juist
                                  
                                  UOS
      Atlantis
                                  
                                  $
                                  2,181,504
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  
                                  February
      27, 2009 (delivered)6161
      –  MS Norderney
                                  
                                  UOS
      Challenger
                                  
                                  
                                  3,312,384
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  May
      28, 2009 (delivered)6162
      –  Isle of Baltrum
                                  
                                  UOS
      Columbia
                                  
                                  
                                  7,755,648
                                  
                                  
                                  
                                  5,277,487
                                  (2)
                                  
                                  
                                  October
      2009 (3)6163
      –  Isle of Langeoog
                                  
                                  UOS
      Discovery
                                  
                                  
                                  9,864,192
                                  
                                  
                                  
                                  (2,326,694
                                  )
                                  
                                  
                                  November
      20096168
      –  Isle of Amrum
                                  
                                  UOS
      Endeavour
                                  
                                  
                                  11,221,248
                                  
                                  
                                  
                                  (7,168,758
                                  )
                                  
                                  
                                  December
      20096169
      –  Isle of Sylt
                                  
                                  UOS
      Enterprise
                                  
                                  
                                  11,476,608
                                  
                                  
                                  
                                  (7,168,758
                                  )
                                  
                                  
                                  April
      20106171
      –  Isle of Wangerooge
                                  
                                  UOS
      Explorer
                                  
                                  
                                  11,213,952
                                  
                                  
                                  
                                  (9,085,417
                                  )
                                  
                                  
                                  January
      20106172
      –  Isle of Neuwerk
                                  
                                  UOS
      Freedom
                                  
                                  
                                  11,162,880
                                  
                                  
                                  
                                  (9,085,417
                                  )
                                  
                                  
                                  March
      20106173
      –  Isle of Usedom
                                  
                                  UOS
      Liberty
                                  
                                  
                                  47,949,312
                                  
                                  
                                  
                                  (9,085,417
                                  )
                                  
                                  
                                  April
      2010$
                                  116,137,728





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


(2)
              Isle
      of Baltrum – Anticipated Reserves in SPV at Delivery includes $7,755,648
      loaned by Hartmann to comply with Nord/LB’s Senior Loan
      conditions.


(3)
              This
      vessel was delivered in October
2009.





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 if it is necessary for ATL to call in the capital in order to meet
obligations of the AHTS 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 September 30, 2009, we have contributed capital totaling
$60,549,504 (EUR 41,495,000) 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 three AHTS vessels have been delivered, and the
remaining capital obligations of the AHTS SPVs for the vessels total
$350,768,333 (EUR 240,384,000).  We anticipate receiving $306,847,872
(EUR 210,285,000) in loan proceeds through the Senior Loan.  The
remaining obligations of each AHTS SPV 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 based on the capital commitments in
the Company Agreements, which is currently a requirement under the Senior Loan
Conditions, we must fund an additional amount of approximately $41,594,496 (EUR
28,505,000).  Failure to reach this funding level is likely to result
in the sale or transfer of the ownership interest in one or more
vessels.


40


In order
to maintain our 75% ownership of all nine AHTS SPVs, we must fund an additional
amount that is estimated to range from $49,612,800 (EUR 34,000,000) to
$92,666,496 (EUR 63,505,000).  The lower range includes minimum
reserves of $2,918,400 (EUR 2,000,000) for each AHTS SPV.  Funding the
upper range of $92,666,496 (EUR 63,205,000) would represent full funding of our
obligation under the current Company Agreements for each AHTS
SPV.  The actual funding level will 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 to meet obligations of the AHTS SPVs.  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.





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 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 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
FASB ASC 815, Derivatives and
Hedges.  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 loss on interest rate swaps.


41


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 the portion of
capitalized interest allocable 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.





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





Subsequent
Events


(Included
in ASC 855 “Subsequent Events”, previously SFAS No. 165 “Subsequent
Events”)





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.





Item
      4.
            Controls
      and Procedures





As of
September 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.


42


During
the quarter ended September 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.


43


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 September 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.




Nord/LB
has requested a change in the form of collateral from Reederei Hartmann under
the Hartmann Guarantee and has delayed funding certain progress payments to
Fincantieri on our remaining AHTS vessels.


As of
September 30, 2009, the terms of the Hartmann Guarantee were being
renegotiated between Reederei Hartmann and Nord/LB, and those discussions
are ongoing.  The main subject of these negotiations is the form of
collateral to be provided under the guarantee by Reederei Hartmann to
Nord/LB.  Pending resolution of these discussions, Nord/LB has delayed
certain requested draws on the Pre-Delivery Facility under the Senior Loan to
allow us to make progress payments to Fincantieri.  Due to the delay, a
number of progress payments which were otherwise due to be paid to Fincantieri
under the shipbuilding contracts in the aggregate amount of $29,499,771 (EUR
20,216,400) with respect to 5 of the remaining 6 vessels to be delivered
have not been paid.  As a result, we are not in compliance with the
terms of the shipbuilding contracts and Fincantieri would have the right to
cease construction activities on the remaining 6 vessels.  However,
Fincantieri has acknowledged the delay and has indicated to us that it does
not intend to cease construction pending resolutions of these matters.  In
addition, Fincantieri has not taken any action under the shipbuilding contracts
to demand payment.  As a result of these missed payments, we may not be in
compliance with the terms of our Senior Loan with Nord LB.  Nord/LB is
aware that the payments have not been made, and has not taken any action under
the Senior Loan related to the non-compliance.


44


In the
event we are unable to resolve the issues with Nord LB to fund amounts
under the Senior Loan sufficient to make these progress payments or are unable
to raise the necessary funds from other sources, we may not be able to fund the
progress payments currently due under the shipbuilding contracts for the
remaining vessels.  If that were to occur, we would be in default of
the shipbuilding contracts and our Senior Loan documents.  In the
event we were to default on the Senior Loan agreement, Nord/LB could foreclose
on our vessels or avail itself of the other rights and remedies contained in the
Senior Loan documents.  If we were to default on the shipbuilding
contracts, Fincantieri could cease construction on the vessels, and could seek
payment for completed work, plus a 10 percent profit on the remaining work to
complete the vessel.  If Reederei Hartmann were to provide funds to
the SPV pursuant to the Hartmann Guarantee to cover the payments due and we were
unable to fund our remaining capital by the date of delivery of the respective
vessels, Reederei Hartmann could take over the unfunded portion of our equity
interest in (i) the AHTS SPVs pursuant to the 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.





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





During
the three months ended September 30, 2009, we issued and sold approximately
8,621 Class A limited partnership units to our partners at a purchase price of
$100.00 per unit.





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 $862,100.





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.


45


Item
      6.
            Exhibits


Exhibit
                    Number
                  
                  Title of Document10.1*
                  
                  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, Addendum
      No. 2, dated June 18, 2009, Addendum No. 3, dated August 14, 2009,
      Addendum No. 4, dated August 31, 2009, Addendum No. 5, dated September 29,
      2009, Addendum No. 6, dated September 30, 2009, and Addendum No. 7, dated
      November 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.


46


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:           November
      19, 2009


47


Exhibits





Exhibit
                    Number
                  
                  Title of Document10.1*
                  
                  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, Addendum
      No. 2, dated June 18, 2009, Addendum No. 3, dated August 14, 2009,
      Addendum No. 4, dated August 31, 2009, Addendum No. 5, dated September 29,
      2009, Addendum No. 6, dated September 30, 2009, and Addendum No. 7, dated
      November 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.


48