Registration Statement No. 333-122008

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 4
TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

DryShips Inc.
(Exact name of registrant as specified in its charter)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

        If any of the securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o

CALCULATION OF REGISTRATION FEE

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 under the Securities Act of 1933.

(2)

Of this amount, $17,298.37 was paid with the filing of the Form F-1 and $14,377.00 is paid herewith.

        The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion Dated February 2, 2005

		DryShips Inc.
		13,000,000 Shares Common Stock

We are offering 13,000,000 shares of our common stock. The underwriters have an option to purchase up to an additional 1,950,000 shares of common stock from us to cover over-allotments.

This is our initial public offering. We have been approved for listing of our common stock on the Nasdaq National Market under the symbol "DRYS." We currently anticipate the initial public offering price to be between $16.00 and $18.00 per share.

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 8.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The underwriters expect to deliver the shares to purchasers on or about             , 2005.

The date of this prospectus is             , 2005

TABLE OF CONTENTS

        We have not authorized anyone to give any information or to make any representations other than those contained in this prospectus. Do not rely upon any information or representations made outside of this prospectus. This prospectus is not an offer to sell, and it is not soliciting an offer to buy (1) any securities other than shares of our common stock or (2) shares of our common stock in any circumstances in which our offer or solicitation is unlawful. The information contained in this prospectus may change after the date of this prospectus. Do not assume after the date of this prospectus that the information contained in this prospectus is still correct.

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ENFORCEABILITY OF CIVIL LIABILITIES

        DryShips Inc. is a Marshall Islands company and our executive offices are located outside of the U.S. in Amaroussion, Greece. All of our directors, officers and some of the experts named in this prospectus reside outside the U.S. In addition, a substantial portion of our assets and the assets of our directors, officers and experts are located outside of the U.S. As a result, you may have difficulty serving legal process within the U.S. upon us or any of these persons. You may also have difficulty enforcing, both in and outside the U.S., judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.

        Furthermore, there is substantial doubt that the courts of the Marshall Islands or Greece would enter judgments in original actions brought in those courts predicated on U.S. federal or state securities laws.

THE INTERNATIONAL DRYBULK SHIPPING INDUSTRY

        The discussions contained under the heading "The International Drybulk Shipping Industry" have been reviewed by Drewry Shipping Consultants, Ltd., which has confirmed to us that they accurately describe the international drybulk market, subject to the reliability of the data supporting the statistical and graphical information presented in this prospectus.

        The statistical and graphical information we use in this prospectus has been compiled by Drewry from its database. Drewry compiles and publishes data for the benefit of its clients. Its methodologies for collecting data, and therefore the data collected, may differ from those of other sources, and its data does not reflect all or even necessarily a comprehensive set of the actual transactions occurring in the market.

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PROSPECTUS SUMMARY

        This section summarizes some of the information and financial statements that appear later in this prospectus. As an investor or prospective investor, you should review carefully the risk factors and the more detailed information and financial statements that appear later. We use the term deadweight tons, or dwt, in describing the size of our drybulk carriers, also commonly referred to as drybulk vessels. Dwt, expressed in metric tons each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.

        Unless the context otherwise requires, when used in this prospectus, the terms "DryShips," the "Company," "we," "our" and "us" refer to DryShips Inc. Unless otherwise indicated, all references to currency amounts in this prospectus are in U.S. dollars.

Our Company

        We are a privately-owned Marshall Islands corporation that was incorporated in September 2004. We own and operate, through our subsidiaries, six drybulk carriers. We intend to purchase 11 additional drybulk carriers to expand our fleet. Our affiliate, Cardiff Marine Inc., or Cardiff, manages our vessels under separate ship management agreements.

        This is our initial public offering. After we complete this offering, we intend to declare and pay quarterly dividends from our net profits to the holders of our common shares in January, April, July and October of each year. We expect to declare our first dividend in July 2005 in the amount of $0.20 per share. Also, from time to time, the Board of Directors may determine to declare and pay quarterly dividends in an amount up to 50% of our net quarterly income, as it deems appropriate. For a more detailed summary of our dividend policy, we refer you to "Dividend Policy" below.

Our Fleet

        We currently own and operate a fleet of six vessels consisting of one Capesize drybulk carrier and five Panamax vessels. One of these Panamax vessels is a combination carrier that is capable of carrying drybulk cargo or crude oil and oil products. We refer to our Panamax combination carrier as a drybulk carrier and refer to all six of these vessels as our Initial Fleet.

        Our Initial Fleet principally carries a variety of drybulk commodities including major bulks such as coal, iron ore, and grains, and minor bulks such as bauxite, phosphate, fertilizers and steel products. We intend to acquire eleven additional drybulk carriers for a total cash payment of $299.3 million including certain pre-delivery and other fees and expenses and approximately 1.35 million of our shares. We refer to these eleven drybulk carriers as our Identified Vessels. We will pay the purchase price for the Identified Vessels with the entire net proceeds of this offering, funds that we will borrow under our new credit facility, approximately 1.35 million of our common shares based on the mid-point of the anticipated initial public offering price range of our shares and up to an additional $30.0 million under another new credit facility that we intend to procure, together with cash on hand. We expect to acquire all of the Identified Vessels prior to April 30, 2005.

        The Identified Vessels consist of one Capesize drybulk carrier, eight Panamax drybulk carriers and two Handymax drybulk carriers. Unless indicated otherwise, references to our combined fleet are to our fleet of drybulk carriers after giving effect to the purchase of the Identified Vessels. Our acquisition of the Identified Vessels will increase the size of our combined fleet to 17 drybulk carriers representing approximately 1.3 million dwt and will consist of two Capesize, 13 Panamax and two Handymax drybulk carriers. The average age of the vessels in our combined fleet will be 13 years.

        We intend to employ our vessels in the spot charter market, under period time charters and in drybulk carrier pools. Three of the Panamax drybulk carriers in our Initial Fleet are currently operated in a Panamax pool. Pools have the size and scope to combine spot market voyages, time charters and

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contracts of affreightment with freight forward agreements for hedging purposes and to perform more efficient vessel scheduling thereby increasing fleet utilization. One of the Panamax drybulk carriers in our Initial Fleet is currently on time charter.

        All of our vessels will be managed by Cardiff, a Liberian corporation with offices in Greece. We are under common control with Cardiff.

Our Competitive Strengths

        We believe that we possess a number of competitive strengths in our industry:

•

Experienced Management Team.    Our founder, Chairman and Chief Executive Officer, Mr. George Economou, started his career in shipping following graduation from the Massachusetts Institute of Technology with degrees in Naval Architecture and Marine Engineering and Shipping and Shipbuilding Management. Cardiff, under Mr. Economou's leadership, has assembled a management team of senior executive officers and key employees with decades of experience in all aspects of vessel operations and maintenance of drybulk carriers, tankers and container vessels.



•

Strong Customer Relationships.    Cardiff has established relationships with leading charterers and a number of chartering, sales and purchase brokerage houses around the world. Since its founding, Cardiff has maintained relationships with, and has achieved acceptance by, major national and private industrial users, commodity producers and traders. These customers have repeatedly chartered vessels managed by Cardiff over a span of several years.



•

Efficient and Dependable Vessel Operations.    We believe Cardiff has established its reputation as an efficient and dependable vessel operator. During the past 13 years, Cardiff has managed and operated vessels across a variety of shipping sectors such as drybulk carriers, container vessels, crude oil tankers, oil products tankers, chemical tankers and refrigerated cargo vessels. Currently, Cardiff actively manages 18 vessels and arranges the employment of 10 other vessels on bareboat charters. Many of the vessels managed by Cardiff are owned by related parties. We believe that Cardiff maintains high standards of operation, vessel technical condition, safety and environmental protection. Cardiff has managed approximately 60 vessels since its inception. None of its managed vessels have suffered a total loss, constructive total loss or caused any material environmental damage. Cardiff contains operating expenses through comprehensive planned maintenance systems, preventive maintenance programs and by retaining and training qualified crew members.

Our Business Strategy

        We focus our business strategy on providing reliable seaborne transportation services for drybulk cargoes at a competitive cost. We believe we can achieve our business objectives and increase shareholder value through our business strategy. The elements of our business strategy consist of:

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Fleet Expansion Through Second Hand Vessel Acquisitions.    We intend to grow our fleet through timely and selective acquisitions of drybulk carriers. We will seek to identify potential second hand vessel acquisition candidates among all size categories of drybulk carriers, in order to gain a worldwide presence in the drybulk carrier market with a fleet capable of servicing virtually all major ports and routes used for the seaborne transportation of key commodities and raw materials. We believe that second hand vessels when operated in a cost efficient manner provide better value to shareholders as compared with more expensive newbuilding vessels. We therefore expect to maintain an average fleet age of between 10 to 20 years.



•

Diversified Fleet Profile.    We intend to develop a diversified fleet of drybulk carriers in all size categories: Capesize, Panamax, Handymax and Handysize. Larger drybulk carriers, such as

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Capesize and Panamax vessels, have historically experienced a greater degree of freight rate volatility, while smaller drybulk carriers, such as Handymax and Handysize vessels, enjoy greater charter rate stability. Furthermore, a diversified drybulk carrier fleet will enable us to serve our customers in both major and minor bulk trades. Our vessels are able to trade worldwide in a multitude of trade routes carrying a wide range of cargoes for a number of industries. Capesize and Panamax drybulk carriers carry predominantly coal and iron ore for energy and steel production as well as grain for feedstocks. Handymax and Handysize drybulk carriers carry iron and steel products, fertilizers, minerals, forest products, ores, bauxite, alumina, cement and other construction materials. These raw materials and products are used as production inputs in a number of industries. We will transport these various cargoes on several geographical routes thereby reducing our dependency on any one cargo, trade route or industry and maximizing fleet utilization.

•

Combined Fleet Employment.    As we expand our fleet of drybulk carriers, we will actively and strategically employ our fleet between spot charters, which generally last for periods of ten days to four months, and fixed employment contracts, including time or bareboat charters, which can last up to several years. Drybulk carriers operating in the spot market may generate increased or decreased profit margins during periods of improvement or deterioration in freight (or charter) rates, while drybulk carriers operating on fixed employment contracts provide more predictable cash flows. We may also enter into freight forward agreements in order to hedge our exposure to market volatility.

Our History and Corporate Structure

        Subsequent to our formation, in October 2004, we issued 15,400,000 shares of our common stock to the Entrepreneurial Spirit Foundation, or the Foundation, as consideration for the contribution to us of all of the issued and outstanding capital stock of our subsidiaries. These subsidiaries own the vessels in our Initial Fleet.

        Mr. Economou, our Chairman and Chief Executive Officer, has been active in shipping since 1976 and formed Cardiff in 1991. Cardiff will be responsible for all technical and commercial management functions of our fleet. We believe that Cardiff has established a reputation in the international drybulk shipping industry for operating and maintaining a fleet with high standards of performance, reliability and safety. We are under common control with Cardiff. Our common shareholder is the Foundation, which is controlled by Mr. Economou.

        Existing shareholders, including members of the Economou family, will own, directly or indirectly, approximately 51.8% of our shares after this offering, assuming the underwriters do not exercise their over-allotment option. We will acquire six of the Identified Vessels from companies beneficially owned by Mr. Economou's sister.

        Cardiff provides comprehensive ship management services including technical supervision, such as repairs, maintenance and inspections, safety and quality, crewing and training, as well as supply provisioning. Cardiff's commercial management services include operations, chartering, sale and purchase, post-fixture administration, accounting, freight invoicing and insurance. Cardiff completed early implementation of the International Maritime Organization's, or IMO, International Management Code for the Safe Operation of Ships and Pollution Prevention, or ISM Code, in 1996. Cardiff has obtained documents of compliance for its office and safety management certificates for its vessels as required by the ISM Code and has been ISO 14001 certified since 2003, in recognition of its commitment to overall quality.

        Immediately prior to the closing of this offering, we expect to settle all intercompany balances between us and Cardiff to an amount that will be less than $0.5 million, and declare a dividend to our existing shareholders of $69.0 million, consisting of $51.0 million of retained earnings as of October 31,

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2004, and $18.0 million of earnings of our Initial Fleet for the period between November 1, 2004, and the date of this prospectus. The $69.0 million dividend has been accrued and reflected as a payable in the October 31, 2004 financial statements. See note 19(e) to the audited financial statements. Of the total amount of dividends ($69.0 million), $61.75 million will be paid to the existing shareholders prior to the closing of this offering, by utilizing amounts due from Cardiff and also from cash on hand, so that we will have at least $7.0 million cash immediately prior to the closing of this offering. The remaining amount of the dividend ($7.25 million) will be paid to the shareholders existing prior to the closing of this offering not earlier than three months after the date of this prospectus.

        We maintain our principal executive offices at 80 Kifissias Avenue, Amaroussion 15125, Athens, Greece. Our telephone number at that address is (011) (30) (210) 809 0570. We also maintain an office at One Stamford Landing, Suite 214, 62 Southfield Avenue, Stamford, Connecticut 06902. Our telephone number at that address is (203)                  .

Our Dividend Policy

        Our policy is to declare and pay quarterly dividends to shareholders from our net profits each January, April, July and October, beginning July 2005, in amounts the Board of Directors may from time to time determine are appropriate. However, we may have to make provisions for vessel acquisition and other liabilities that would reduce or eliminate the cash available for distribution as dividends. While we cannot assure you that we will do so, and subject to the limitations set forth below, we expect to declare and pay a dividend per share of $0.20 in July 2005. Also, from time to time, the Board of Directors may determine to declare and pay quarterly dividends in an amount up to 50% of our net quarterly income, as the Board of Directors deems appropriate. Declaration and payment of any dividend is subject to the discretion of our Board of Directors. The timing and amount of dividend payments will be dependent upon our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of distributions to shareholders and other factors. The payment of dividends is not guaranteed or assured, and may be discontinued at any time at the discretion of our Board of Directors. Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. If there is a substantial decline in the drybulk charter market, our earnings would be negatively affected thus limiting our ability to pay dividends. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment of such dividend.

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The Offering

(1)

Assumes that our underwriters do not exercise the over-allotment option. Includes approximately 1.35 million shares that the Company expects to issue to the seller of an Identified Vessel based on the mid-point of the anticipated initial public offering price range of our shares.

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Summary Consolidated Financial and Other Data

        The following table sets forth summary consolidated financial data and other operating data of DryShips Inc. The summary financial data in the table for the three years ended October 31, 2004, are derived from the audited consolidated financial statements of DryShips Inc. We refer you to the footnotes to our consolidated financial statements for a discussion of the basis upon which our consolidated financial statements are presented. The data should be read in conjunction with the consolidated financial statements, related notes and other financial information included herein.

(1)

We did not pay any compensation to members of our senior management or our directors in the years ended October 31, 2002, 2003 and 2004.

(2)

After giving effect to a stock dividend effected in October 2004, the selected financial data reflects an increase in the number of outstanding shares of common stock. All share and per share amounts have been restated to reflect the retroactive effect of the stock dividend.

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(3)

EBITDA represents net earnings before interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to net income or cash flow from operations, as determined by U.S. GAAP, and our calculation of EBITDA may not be comparable to that reported by other companies. EBITDA is included in this prospectus because it is a basis upon which we assess our liquidity position and because we believe that it presents useful information to investors regarding a company's ability to service and/or incur indebtedness.

        The following table reconciles net cash from operating activities, as reflected in the consolidated statements of cash flows, to EBITDA:

(4)

Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.

(5)

Total voyage days for fleet are the total days the vessels were in our possession for the relevant period net of off hire days associated with major repairs, drydocks or special or intermediate surveys.

(6)

Calendar days are the total days the vessels were in our possession for the relevant period including off hire days associated with major repairs, drydockings or special or intermediate surveys.

(7)

Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.

(8)

Time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating TCE is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods.

(9)

Daily vessel operating expenses, which includes crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

(10)

Daily general and administrative expense is calculated by dividing general and administrative expense by fleet calendar days for the relevant time period.

(11)

Total vessel operating expenses, or TVOE, is a measurement of our total expenses associated with operating our vessels. TVOE is the sum of vessel operating expenses and general and administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period.

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RISK FACTORS

        You should consider carefully the following factors, as well as the other information set forth in this prospectus, before making an investment in our common stock. Some of the following risks relate principally to the industry in which we operate and our business in general. Other risks relate principally to the securities market and ownership of our stock. Any of the risk factors could significantly and negatively affect our business, financial condition or operating results and the trading price of our stock. You could lose all or part of your investment.

Industry Specific Risk Factors

The cyclical nature of the international drybulk shipping industry may lead to volatile changes in charter rates and vessel values, which may adversely affect our earnings

        The international drybulk shipping industry is cyclical with attendant volatility in profitability, charter rates and vessel values. During the past several weeks charter rates and vessel values reached historically high levels. More recently, however, rates have decreased by approximately 20%. Because many factors influencing the supply of, and demand for, vessel capacity are unpredictable, the timing, direction and degree of changes in the international drybulk shipping industry are also not predictable.

        The degree of charter rate volatility among different types of drybulk carriers has varied widely. The Company is exposed to changes in spot rates for drybulk carriers and such changes affect the Company's earnings and the value of the Company's drybulk carriers at any given time.

The international drybulk shipping industry reached an historic high in the past several weeks and future growth will depend on continued economic growth in the world economy that exceeds the capacity of the growing world fleet's ability to match it

        During the past several weeks charter rates for the international drybulk shipping industry have reached historic highs. More recently, however, rates have decreased by approximately 20%. The Company anticipates that the future demand for its drybulk carriers and drybulk charter rates will be dependent upon continued economic growth in China's and the world's economy, seasonal and regional changes in demand and changes to the capacity of the world fleet. The capacity of the world fleet seems likely to increase and there can be no assurance that economic growth will continue. Adverse economic, political, social or other developments could have a material adverse effect on the Company's business and results of operations.

        The factors affecting the supply and demand for vessels are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. Factors that influence demand for vessel capacity include:

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supply and demand for drybulk products;



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global and regional economic conditions;



•

the distance drybulk is to be moved by sea; and



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changes in seaborne and other transportation patterns.

        The factors that influence the supply of vessel capacity include:

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the number of newbuilding deliveries;



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the scrapping rate of older vessels;



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changes in environmental and other regulations that may limit the useful life of vessels;



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the number of vessels that are out of service; and



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changes in global drybulk production.

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An economic slowdown in the Asia Pacific region could have a material adverse effect on our business, financial position and results of operations

        A significant number of the port calls made by our vessels involve the loading or discharging of raw materials and semi-finished products in ports in the Asia Pacific region. As a result, a negative change in economic conditions in any Asia Pacific country, but particularly in China or Japan, may have an adverse effect on our business, financial position and results of operations, as well as our future prospects. In particular, in recent years, China has been one of the world's fastest growing economies in terms of gross domestic product. We cannot assure you, that such growth will be sustained or that the Chinese economy will not experience negative growth in the future. Moreover, any slowdown in the economies of the United States, the European Union or certain Asian countries may adversely effect economic growth in China and elsewhere. Our business, financial position and results of operations, as well as our future prospects, will likely be materially and adversely affected by an economic downturn in any of these countries.

We are dependent on spot charters in the volatile shipping markets

        We currently charter five of our vessels on a spot charter basis (three through a Panamax pool) and one on a time charter basis. Although dependence on spot charters is not unusual in the shipping industry, the spot charter market is highly competitive and spot charter rates may fluctuate significantly based upon available charters and the supply of and demand for seaborne shipping capacity. While our focus on the spot charter market may enable us to benefit if industry conditions strengthen, we must consistently procure spot charter business. Conversely, such dependence makes us vulnerable to declining market rates for spot charters. We cannot give assurances that future available spot charters will enable us to operate our vessels profitably.

        The spot charter market is highly competitive and rates within this market are subject to volatile fluctuations while longer-term time charters provide income at pre-determined rates over more extended periods of time. There can be no assurance that we will be successful in keeping all our vessels fully employed in these short-term markets or that future spot rates will be sufficient to enable our vessels to be operated profitably. A significant decrease in charter rates will affect the value of our fleet and will adversely affect our profitability and cash flows with the result that our ability to pay debt service to our lenders and dividends to our shareholders could be impaired.

We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income

        Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration. Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale price or useful life of our vessels. Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations.

        The operation of our vessels is affected by the requirements set forth in the ISM Code. The ISM Code requires shipowners and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels, and may result in a denial of access to, or detention in, certain ports. Currently, each of the

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vessels in the Initial Fleet is ISM Code-certified. However, there can be no assurance that such certification will be maintained indefinitely.

        The European Union is considering legislation that will affect the operation of vessels and the liability of owners for oil pollution. It is difficult to predict what legislation, if any, may be promulgated by the European Union or any other country or authority.

        Although the United States is not a party thereto, many countries have ratified and follow the liability scheme adopted by the IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended (the "CLC"), and the Convention for the Establishment of an International Fund for Oil Pollution of 1971, as amended. Under these conventions, a vessel's registered owner is strictly liable for pollution damage caused on the territorial waters of a contracting state by discharge of persistent oil, subject to certain complete defenses. Many of the countries that have ratified the CLC have increased the liability limits through a 1992 Protocol to the CLC. The liability limits in the countries that have ratified this Protocol are currently approximately $4.0 million plus approximately $566.0 per gross registered ton above 5,000 gross tons with an approximate maximum of $80.5 million per vessel, with the exact amount tied to a unit of account which varies according to a basket of currencies. The right to limit liability is forfeited under the CLC where the spill is caused by the owner's actual fault or privity and, under the 1992 Protocol, where the spill is caused by the owner's intentional or reckless conduct. Vessels trading to contracting states must provide evidence of insurance covering the limited liability of the owner. In jurisdictions where the CLC has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or in a manner similar to the CLC.

        We currently maintain, for each of our vessel's, pollution liability coverage insurance in the amount of $1.0 billion per incident. If the damages from a catastrophic spill exceeded our insurance coverage, it would severely hurt us.

        In December 2003, the IMO adopted a proposed amendment to the International Convention for the Prevention of Pollution from Ships to accelerate the phase out of single-hull tankers from 2015 to 2010 unless the relevant flag state, in a particular case, extends the date to 2015. This proposed amendment will take effect in April 2005 unless objected to by a sufficient number of states. This accelerated phase out will result in our Panamax combination carrier being unable to carry crude oil and oil products in many markets after December 2007. The Company does not expect any impairment to result from the expected inability of our Panamax combination carrier to carry oil and oil products after 2007, as that vessel will be fully depreciated as of December 2006 (the last month of the vessel's current estimated useful life of 25 years from the date of her initial delivery from the shipyard), and carried at residual scrap value on the Company's books. Further, the Company believes that the value of this vessel in service as a drybulk carrier will exceed its book value for the foreseeable future and therefore the Company does not expect any impairment to result regardless if the proposed amendments are adopted by the IMO. Moreover, the IMO or other regulatory bodies may adopt further regulations in the future that could adversely affect the useful lives of our vessels as well as our inability to generate income from them.

        These requirements can affect the resale value or useful lives of our vessels. As a result of accidents such as the recent oil spill relating to the loss of the m.t. Prestige, a 26 year old single-hull tanker, we believe that regulation of the shipping industry will continue to become more stringent and more expensive for us and our competitors. Substantial violations of applicable requirements or a catastrophic release from one of our vessels could have a material adverse impact on our financial condition and results of operations.

        The United States Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all owners and operators whose vessels trade in the United States, its territories and possessions or whose

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vessels operate in United States waters, which includes the United States' territorial sea and its 200 nautical mile exclusive economic zone.

        Under OPA, vessel owners, operators and bareboat charterers are "responsible parties" and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel).

Because the market value of our vessels may fluctuate significantly, we may incur losses when we sell vessels, which may adversely affect our earnings

        The fair market value of our vessels may increase and decrease depending on a number of factors including:

•

general economic and market conditions affecting the shipping industry;



•

competition from other shipping companies;



•

types and sizes of vessels;



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other modes of transportation;



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cost of newbuildings;



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governmental or other regulations;



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prevailing level of charter rates; and



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technological advances.

        If we sell vessels at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial statements, the sale may be at less than the vessel's carrying amount on our financial statements, resulting in a loss and a reduction in earnings.

Inspection by classification society

        The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention. The Initial Fleet is currently enrolled with Bureau Veritas, N.K.K. and Det norske Veritas. Det norske Veritas has awarded ISM certification to Cardiff and the Initial Fleet.

        A vessel must undergo Annual Surveys, Intermediate Surveys and Special Surveys. In lieu of a Special Survey, a vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Our vessels are on Special Survey cycles for hull inspection and continuous survey cycles for machinery inspection. Every vessel is also required to be drydocked every two to three years for inspection of the underwater parts of such vessel.

        If any vessel does not maintain its class and/or fails any Annual Survey, Intermediate Survey or Special Survey, the vessel will be unable to trade between ports and will be unemployable and we could be in violation of certain covenants in our loan agreements. This would negatively impact our revenues.

Maritime claimants could arrest our vessels, which could interrupt our cash flow

        Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of funds to have the arrest lifted.

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        In addition, in some jurisdictions, such as South Africa, under the "sister ship" theory of liability, a claimant may arrest both the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert "sister ship" liability against one vessel in our fleet for claims relating to another of our ships.

Governments could requisition our vessels during a period of war or emergency, resulting in loss of earnings

        A government could requisition for title or seize our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels and may negatively impact our revenues.

Effect of world events

        Terrorist attacks such as the attacks on the United States on September 11, 2001, and the continuing response of the United States to these attacks, as well as the threat of future terrorist attacks, continue to cause uncertainty in the world financial markets and may affect our business, results of operations and financial condition. The recent conflict in Iraq may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all.

        Terrorist attacks, such as the attack on the vessel Limburg in October 2002, may in the future also negatively affect our operations and financial condition and directly impact our vessels or our customers. Future terrorist attacks could result in increased volatility of the financial markets in the United States and globally and could result in an economic recession in the United States or the world. Any of these occurrences could have a material adverse impact on our operating results, revenue and costs.

Company Specific Risk Factors

If we cannot complete the purchase of the Identified Vessels, we may use the proceeds of this offering for general corporate purposes with which you may not agree

        If the sellers of some or all of the Identified Vessels that are currently owned by third parties fail to deliver the vessels to us as agreed, or if we cancel a purchase because a seller has not met its obligations, our management will have the discretion to apply the proceeds of this offering that we would have used to purchase those vessels to acquire other vessels or for general corporate purposes that you may not agree with. In particular, certain events may arise which could result in us not taking delivery of a vessel, such as a total loss of a vessel, a constructive total loss of a vessel, or substantial damage to a vessel prior to its delivery. We will not escrow the proceeds from this offering and will not return the proceeds to you if we do not take delivery of one or more vessels. It may take a substantial period of time before we can locate and purchase other suitable vessels. During this period, the portion of the proceeds of this offering originally planned for the acquisition of these Identified Vessels will not be invested on a short-term basis and therefore will not yield returns at rates comparable to those these Identified Vessels might have earned.

We will depend entirely on Cardiff to manage and charter our fleet

        We are a newly formed company with only two employees, our Chief Executive Officer and our Chief Financial Officer, and currently have no plans to hire additional employees. As we intend to subcontract the commercial and technical management of our fleet, including crewing, maintenance and repair to Cardiff Marine Inc., an affiliated company with which we are under common control, the loss of Cardiff's services or its failure to perform its obligations to us could materially and adversely affect

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the results of our operations. Although we may have rights against Cardiff if it defaults on its obligations to us, you will have no recourse against Cardiff. Further, we expect that we will need to seek approval from our lenders to change our manager.

Cardiff is a privately held company and there is little or no publicly available information about it

        The ability of Cardiff to continue providing services for our benefit will depend in part on its own financial strength. Circumstances beyond our control could impair Cardiff's financial strength, and because it is privately held it is unlikely that information about its financial strength would become public unless Cardiff began to default on its obligations. As a result, an investor in our shares might have little advance warning of problems affecting Cardiff, even though these problems could have a material adverse effect on us.

Our Chairman and Chief Executive Officer has affiliations with Cardiff which could create conflicts of interest

        Our majority shareholder is controlled by Mr. George Economou who controls a foundation that owns 70% of us and Cardiff. Mr. Economou is also our Chairman and Chief Executive Officer, and a director of our company. These responsibilities and relationships could create conflicts of interest between us, on the one hand, and Cardiff, on the other hand. These conflicts may arise in connection with the chartering, purchase, sale and operations of the vessels in our fleet versus drybulk carriers managed by other companies affiliated with Cardiff and Mr. Economou. In particular, Cardiff may give preferential treatment to vessels that are beneficially owned by related parties because Mr. Economou and members of his family may receive greater economic benefits.

Companies affiliated with Cardiff own and may acquire vessels that compete with our fleet

        McCallister Shipping S.A., Panatrade Shipping and Management S.A., Calypso Marine Corp. and Glorious Marine Co. Ltd. are companies affiliated with Cardiff that each own a Capesize drybulk carrier. The four vessels owned by those companies, or the Bareboat Charter Vessels, are currently employed under bareboat charters that end in 2005 through 2007. Subject to the obligations of Mr. Economou set forth in a letter agreement between him and the Company to use commercially reasonable efforts to cause the sale of the Bareboat Charter Vessels, and to give us a right of first refusal to acquire them, when the Bareboat Charter Vessels are redelivered to the owners, they may be managed by Cardiff in competition with our fleet. In addition, Cardiff affiliates may acquire additional drybulk carriers in the future, subject to a right of first refusal that Mr. Economou has granted to us in this letter agreement. These vessels could be in competition with our fleet and Cardiff and other companies affiliated with Cardiff might be faced with conflicts of interest with respect to their own interests and their obligations to us.

No assurance of dividends

        Our policy is to declare and pay quarterly dividends to shareholders each January, April, July and October, beginning July 2005, in amounts the Board of Directors may from time to time determine are appropriate, commencing with a dividend of $0.20 in July 2005. However, we may incur other expenses or liabilities that would reduce or eliminate the cash available for distribution as dividends. Our loan agreements may also prohibit our declaration and payment of dividends under some circumstances.

        If we are not successful in acquiring the Identified Vessels, any unused net proceeds from this offering may be used for other corporate purposes or held pending investment in other vessels. Identifying and acquiring other vessels may take a significant amount time. The result may be that proceeds of this offering are not invested in new vessels, or are so invested but only after some delay. In either case, we will not be able to earn charterhire consistent with our current anticipations, and our profitability and our ability to pay dividends will be affected.

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        In addition, the declaration and payment of dividends will be subject at all times to the discretion of our board of directors. The timing and amount of dividends will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends and other factors. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment of such dividends. There can be no assurance that dividends will be paid in the anticipated amounts and frequency set forth in this prospectus.

If we fail to manage our planned growth properly, we may not be able to successfully expand our market share

        With the acquisition of the eleven Identified Vessels, we will more than double the size of the fleet. This will impose significant additional responsibilities on our management and staff, and the management and staff of Cardiff, and may necessitate that we, and they, increase the number of personnel. Cardiff may have to increase its customer base to provide continued employment for the Identified Vessels.

        We intend to continue to grow our fleet. Our growth will depend on:

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locating and acquiring suitable vessels;



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identifying and consummating acquisitions or joint ventures;



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integrating any acquired business successfully with our existing operations;



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enhancing our customer base;



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managing our expansion; and



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obtaining required financing.

        Growing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty experienced in obtaining additional qualified personnel and managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. We cannot give any assurance that we will be successful in executing our growth plans or that we will not incur significant expenses and losses in connection therewith.

A decline in the market value of our vessels could lead to a default under our loan agreements and the loss of our vessels

        If the market value of our fleet declines, we may not be in compliance with certain provisions of our existing credit facilities and we may not be able to refinance our debt or obtain additional financing. If we are unable to pledge additional collateral, our lenders could accelerate our debt and foreclose on our fleet. For instance, if the market value of the vessels financed under our new senior secured credit facility declines below $216.0 million, we will not be in compliance with certain provisions of that facility and we may not be able to refinance our debt or obtain additional financing.

        During 2004 the shipping industry was in a relatively unusual position. That is, each of its major sectors—drybulk carriers, tankers and containerships—had prospered. This has helped trigger an upsurge in newbuilding activity across each of these fleet sectors. In addition, newbuilding demand is also strong for Liquefied Natural Gas, or LNG, carriers and other specialized ship categories. The significance of this is that the near term availability of newbuilding berths for vessel delivery before the third and fourth quarter of 2007 is scarce. The result of this is that the value of second hand vessels has increased significantly. Below is a table setting forth approximate drybulk carrier prices for the

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10 year period from September 1994 through September 2004 with September 1994 being the base year.