The drybulk shipping industry is an essential link in international trade, with ocean-going vessels representing the most efficient, and often the only method of transporting large volumes of basic commodities and finished products. In 2004, approximately 2.5 billion tonnes of drybulk cargo was transported by sea, comprising more than one-third of all international seaborne trade.

Over the past decade, Asia has significantly increased its presence as an importer in the drybulk market. Regional growth has been varied with China providing the fastest growth during this period. During this same period the U.S. has shown an increase in drybulk imports while Japan and Western Europe experienced a decline in drybulk imports.

Volume in the global dry bulk market has increased from 1.7 billion tonnes to 2.5 billion tonnes over the past 10 years, an increase of over 40%. Total dry bulk trade in 2004 amounted to over a third of the total international seaborne market.

The demand for drybulk carrier capacity is determined by the underlying demand for commodities transported in drybulk carriers, which in turn is influenced by trends in the global economy. Seaborne drybulk trade increased by slightly more than 2%, on an average annual basis during the 1980s and 1990s. However, this rate of growth has increased dramatically in recent years. Between 1999 and 2004, trade in all drybulk commodities increased from 2.0 billion tonnes to 2.5 billion tonnes, an increase of 25% overall.

The Company currently employs its drybulk carriers to customers under time charters. A time charter involves the hiring of a vessel from its owner for a period of time pursuant to a contract under which the vessel owner places its ship (including its crew and equipment) at the disposal of the charterer. Under a time charter, the charterer periodically pays a fixed daily charterhire rate and bears all voyage expenses, including the cost of bunkers, port expenses and canal dues.

Subject to any restrictions in the contract, the charterer determines the type and quantity of cargo to be carried and the ports of loading and discharging. The Company’s vessels operate worldwide within the trading limits imposed by its insurance terms. The technical operation and navigation of the vessel at all times remains the responsibility of the vessel owner, which is generally responsible for the vessel's operating expenses, including the cost of crewing, insuring, repairing and maintaining the vessel, costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses.

Each of the Company’s current time charters expires within a range of dates (for example, a minimum of twenty and maximum of twenty-eight months following delivery), with the exact end of the time charter left open to a range of months to account for the uncertainty of when a vessel will complete its final voyage under the time charter. The charterer may extend the charter period by any time that the vessel is off-hire. If a vessel remains off-hire for more than 30 days, the time charter may be cancelled at the charterer's option.

Each of the Company’s vessels is crewed primarily with 23 officers and seamen. The Company’s technical managers are responsible for locating and retaining qualified officers for the vessels. The Company typically mans its vessels with more crew members than are required by the country of the vessel's flag in order to allow for the performance of routine maintenance duties.

Voyage expenses for the period September 27, 2004, through December 31, 2004, were $44,000.

Vessel operating expenses for the period September 27, 2004, through December 31, 2004, were $0.1 million.

General and administrative expenses were $0.1 million for the period September 27, 2004, through December 31, 2004.

Depreciation charges were $0.4 million for the period September 27, 2004, through December 31, 2004.

Net interest expense was $0.2 million for the period September 27, 2004, through December 31, 2004.