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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2010

Commission File Number: 001-33655

Paragon Shipping Inc.

(Translation of registrant’s name into English)

15 Karamanli Ave., GR 166 73, Voula, Greece

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [X] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)7: ___

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's “home country”), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K

Attached as Exhibit 99.1 to this Report on Form 6-K is the Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2010 of Paragon Shipping Inc. (the “Company”), and unaudited interim condensed consolidated financial statements of the Company for the three months ended March 31, 2010 and the accompanying notes thereto.

This Report on Form 6-K is hereby incorporated by reference into the Company’s Registration Statement on Form F-3 (Registration No. 333-164370) that was declared effective on February 5, 2010.

SIGNATURES

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.


	Paragon Shipping Inc.


Dated: May 3, 2010	By:	/s/ Christopher J. Thomas
	Name:	Christopher J. Thomas
	Title:	Chief Financial Officer

Exhibit 99.1

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our financial condition and results of operations for the three months ended March 31, 2010 and 2009. Unless otherwise specified herein, references to the “Company” or “we” shall include Paragon Shipping Inc. and its subsidiaries. You should read the following discussion and analysis together with the financial statements and related notes included elsewhere in this report. For additional information relating to our management’s discussion and analysis of financial condition and results of operation, please see our annual report on Form 20-F for the year ended December 31, 2009. This discussion includes forward-looking statements which, although based on assumptions that we consider reasonable, are subject to risks and uncertainties which could cause actual events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements.

Overview

We are Paragon Shipping Inc., a company incorporated in the Republic of the Marshall Islands in April 2006 to provide drybulk shipping services worldwide. We are a provider of international seaborne transportation services, carrying various drybulk cargoes including iron ore, coal, grain, bauxite, phosphate and fertilizers. We commenced operations in December 2006 and completed our initial public offering in August 2007. Our current fleet consists of seven Panamax drybulk carriers, two Supramax drybulk carriers and two Handymax drybulk carriers. In addition, the Company has agreed to acquire a 2009-built Panamax bulk carrier, to be named “Dream Seas”, which is expected to be delivered to the Company within June and July 2010. Furthermore, the Company has also entered into shipbuilding contracts for the construction of two Handysize drybulk vessels and two Kamsarmax drybulk vessels. The Company expects to take delivery of the Handysize drybulk vessels in the fourth quarter of 2011 and the Kamsarmax drybulk vessels in the second and third quarters of 2012.

Vessel Management

Allseas Marine is responsible for all commercial and technical management functions for our fleet. Allseas is an affiliate of our chairman and chief executive officer, Michael Bodouroglou.

We primarily employ our vessels on time charters. We may also employ our vessels in the spot charter market, on voyage charters or trip time charters, which generally last from 10 days to three months.

A spot market voyage charter is generally a contract to carry a specific cargo from a load port to a discharge port for an agreed upon total amount. Under spot market voyage charters, we pay voyage expenses such as port, canal and fuel costs. A spot market trip time charter and a period time charter are generally contracts to charter a vessel for a fixed period of time at a set daily rate. Under trip time charters and period time charters, the charterer pays voyage expenses. Whether our drybulk carriers are employed in the spot market or on time charters, we pay for vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs. We are also responsible for each vessel’s intermediate and special survey costs.

Results of Operations

Our revenues consist of earnings under the charters on which we employ our vessels. We believe that the important measures for analyzing trends in the results of our operations consist of the following:

Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was owned including off-hire days associated with major repairs, drydockings or special or intermediate surveys. Calendar days are an indicator of the size of the fleet over a period and affect both the amount of revenues and the amount of expenses that are recorded during that period.

Voyage days (also referred to as available days). We define voyage days as the total number of days in a period during which each vessel in the fleet was owned net of off-hire days associated with major repairs, drydockings or special or intermediate surveys. The shipping industry uses voyage days to measure the number of days in a period during which vessels actually generate revenues.

Fleet utilization. We calculate fleet utilization by dividing the number of voyage days during a period by the number of calendar days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades, drydockings or special or intermediate surveys.

Charter contracts. A time charter is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all of the voyage expenses, including port and canal charges, and bunkers (fuel) expenses, but the vessel owner pays the vessel operating expenses and commissions on gross voyage revenues. In the case of a spot market charter, the vessel owner pays voyage expenses (less specified amounts, if any, covered by the voyage charterer), commissions on gross revenues and vessel operating expenses. Time charter rates are usually fixed during the term of the charter. Prevailing time charter rates fluctuate on a seasonal and year to year basis and may be substantially higher or lower from a prior time charter contract when the subject vessel is seeking to renew that prior charter or enter into a new charter with another charterer. Fluctuations in charter rates are caused by imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes. Fluctuations in time charter rates are influenced by changes in spot charter rates.

Time Charter Revenues

Time charter revenues are driven primarily by the number of vessels that we have in our fleet, the number of voyage days during which our vessels generate revenues and the amount of daily charter hire that our vessels earn under charters, which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in drydock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, levels of supply and demand in the drybulk carrier market and other factors affecting spot market charter rates for our vessels.

Vessels operating on period time charters provide more predictable cash flows but can yield lower profit margins than vessels operating in the spot charter market during periods characterized by favorable market conditions. Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improvements in charter rates although we are exposed to the risk of declining charter rates, which may have a materially adverse impact on our financial performance. If we employ vessels on period time charters, future spot market rates may be higher or lower than the rates at which we have employed our vessels on period time charters.

Out of Market Acquired Time Charters

When vessels are acquired with time charters attached and the charter rate on such charters is above or below market, we include the fair value of the above or below market charter in the cost of the vessel on a relative fair value basis and record a corresponding asset or liability for the above or below market charter. The fair value is computed as the present value of the difference between the contractual amount to be received over the term of the time charter and the management’s estimate of the then current market charter rate for equivalent vessels at the time of acquisition. The asset or liability recorded is amortized over the remaining period of the time charter as a reduction or addition to time charter revenue.

Vessel Operating Expenses

Our vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes, other miscellaneous expenses and drydocking. We anticipate that our vessel operating expenses, which generally represent fixed costs, will fluctuate based primarily upon the size of our fleet. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for insurance and difficulty in obtaining crew, may also cause these expenses to increase.

Drydocking expenses

We expense drydocking costs as incurred as we believe that the direct expense method eliminates the significant amount of time and subjectivity that is needed to determine which costs and activities related to drydocking should be deferred.

Depreciation and Amortization

We depreciate our vessels on a straight-line basis over their estimated useful lives determined to be 25 years from the date of their initial delivery from the shipyard. Depreciation is based on cost less estimated residual value.

Management Fees

We pay Allseas management fees that are adjusted according to the management agreements based on the Euro/U.S. dollar exchange rate as published by EFG Eurobank Ergasias S.A. two days prior to the end on the previous calendar quarter.

We entered into an administrative service agreement with Allseas on November 12, 2008. Under the agreement, Allseas will provide telecommunication services, secretarial and reception personnel and equipment, security facilities and cleaning for our offices and information technology services. The agreement provides that all costs and expenses incurred in connection with the provision of the above services by Allseas be reimbursed on a quarterly basis.

For each of the three months ended March 31, 2010 and March 31, 2009, an additional amount of €50,000 and $50,000 respectively, was charged by Allseas for legal, accounting and finance services that were provided during the period. We have also entered into a compensation agreement with Allseas whereby in the event that Allseas is involuntarily terminated as the manager of our fleet, we shall compensate Allseas with an amount equal to the sum of (i) three years of the most recent management fees and commissions, based on the fleet at the time of termination, and (ii) Euro 3 million.

General and Administrative Expenses

General and administrative expenses include share based compensation. In addition, general and administrative expenses include the cost of remuneration to directors and officers, a bonus award for executive officers, other professional services, fares and traveling expenses, directors and officers insurance and other expenses for our operations.

Interest and Finance Costs

We incur interest expense and financing costs in connection with vessel specific debt relating to the acquisition of our vessels.

Selected Information

The following tables present selected unaudited consolidated financial and other data of Paragon Shipping Inc. for the three months ended March 31, 2009 and 2010 and as of December 31, 2009 and March 31, 2010, which is derived from our unaudited consolidated condensed financial statements and notes thereto, included elsewhere herein. All amounts are expressed in United States Dollars, except for fleet data and average daily results.


		STATEMENTS OF INCOME	Three Months Ended March 31,
			2009	2010

		Net revenues	39,354,889	29,667,874
		Vessel operating expenses	5,305,995	4,694,074
		Drydocking expenses	39,664	119,324
		Management fees	895,640	881,409
		General and administrative expenses	1,001,440	3,625,435
		Operating income	23,503,546	12,603,031
		Net income	19,184,777	9,159,495
		Earnings per Class A common share, basic and diluted	0.71	0.18
	CASH FLOW DATA
	Net Cash from operating activities		23,305,166	16,624,696
	Net Cash (used in) / from investing activities		(43,000,000)	18,274,230
	Net Cash used in financing activities		(11,735,020)	(38,133,688)
	Net decrease in cash and cash equivalents		(31,429,854)	(3,234,762)

			December 31,	March 31,
			2009	2010
	BALANCE SHEET DATA

	Total assets		812,692,848	781,511,558
	Total liabilities		356,427,030	316,238,404
	Total shareholders’ equity		456,265,818	465,273,154
			Three Months Ended March 31,
			2009	2010
FLEET DATA
Average number of vessels (1)			12.0	11.2
Available days for fleet (2)			1,057	990
Calendar days for fleet (3)			1,080	1,004
Fleet utilization (4)			98%	99%
AVERAGE DAILY RESULTS
Vessel operating expenses (5)			4,913	4,675
Drydocking expenses (6)			37	119
Management Fees (7)			829	878
General and administrative expenses (8) adjusted			788	1,211
Total vessel operating expenses (9) adjusted			6,567	6,883

(1)

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 calendar days each vessel was a part of our fleet during the period divided by the number of calendar days in the period.

(2)

Available days for the fleet are the total calendar days the vessels were in our possession for the relevant period after subtracting for off-hire days with major repairs, drydocks or special or intermediate surveys.

(3)

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

(4)

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

(5)

Daily vessel operating expenses, which include 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.

(6)

Daily drydocking expenses is calculated by dividing drydocking expenses by fleet calendar days for the relevant time period.

(7)

Daily management fees are calculated by dividing management fees by fleet calendar days for the relevant time period.

(8)

Daily general and administrative expenses are calculated by dividing general and administrative expense by fleet calendar days for the relevant time period. Non-cash expenses relating to the amortization of the share based compensation cost for non-vested share awards have been excluded.

(9)

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, drydocking expenses, management fees and general and administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet calendar days for the relevant time period. Non-cash expenses relating to the amortization of the share based compensation cost for non-vested share awards have been excluded.

Results of Operations

Three months ended March 31, 2010 and March 31, 2009

The following analysis exhibits the primary driver of differences between these periods.

Time charter revenue—Time charter revenue for the three months ended March 31, 2010, was $31.4 million, compared to $41.6 million for the three months ended March 31, 2009. The decrease in time charter revenue reflects principally the decrease in the charter rates earned by the vessels and the decrease in the average number of vessels in our fleet from 12.0, for the three months ended March 31, 2009, to 11.2 for the three months ended March 31, 2010, and a corresponding decrease in the number of calendar days of our fleet from 1,080, for the three months ended March 31, 2009, to 1,004 for the three months ended March 31, 2010. The amortization of below and above market acquired time charters increased total net revenue by $2.9 million for the three months ended March 31, 2010, compared to $4.6 million for the three months ended March 31, 2009. After deducting commissions of $1.7 million, we had net revenue of $29.7 million, for the three months ended March 31, 2010, compared to $39.4 million net revenue after deducting commissions of $2.2 million for the three months ended March 31, 2009. The decrease in commissions for the three months ended March 31, 2010, compared to commissions for the three months ended March 31, 2009, is mainly due to the decrease in the average number of vessels and the number of calendar days of our fleet. The charter rates earned by the vessels may be negatively affected in the future following expiration of current charters if the current charter market environment does not improve or worsens.

Vessel operating expenses—Vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs for the three months ended March 31, 2010 amounted to $4.7 million, compared to $5.3 million for the three months ended March 31, 2009, primarily as a result of the sale of the M/V Blue Seas, which was delivered to its new owners in January 2010, and the corresponding decrease in the number of calendar days in our fleet and crewing costs for the three months ended March 31, 2010, compared to the three months ended March 31, 2009.

Management fees charged by a related party— We incurred an aggregate of $881,409 in management fees charged by Allseas for the three months ended March 31, 2010, compared to $895,640 in management fees for the three months ended March 31, 2009, reflecting the decrease in the average number of vessels in our fleet for the three months ended March 31, 2010, compared to the three months ended March 31, 2009, and the corresponding decrease in the number of calendar days of our fleet, as well as the adjustment to the management fee per day per vessel in line with the management agreement. We paid Allseas an average management fee of $811 per day per vessel during the three months ended March 31, 2010 and an additional amount of €50,000 was charged by Allseas to us for legal, accounting and finance services that were provided throughout the period. The management fee was adjusted according to the management agreement based on the Euro/U.S. dollar exchange rate, as published by EFG Eurobank Ergasias S.A. two days prior to the end of the previous calendar quarter. We paid a management fee to Allseas of $783 per day per vessel during the three months ended March 31, 2009, pursuant to the management agreement for the management services. For the three months ended March 31, 2009 an amount of $50,000 was also charged for legal, accounting and finance services that were provided during the period, as per the agreement dated February 19, 2008.

Depreciation—Depreciation of vessels for the three months ended March 31, 2010, amounted to $8.0 million, compared to $8.6 million for the three months ended March 31, 2009, reflecting the decrease in the average number of vessels in our fleet for the three months ended March 31, 2010, compared to the three months ended March 31, 2009.

General and administrative expenses—General and administrative expenses for the three months ended March 31, 2010, were $3.6 million, including share-based compensation of $2.4 million, compared to $1.0 million of general and administrative expenses, including share-based compensation of $0.2 million for the three months ended March 31, 2009. The $2.6 million increase in general and administrative expenses relates mainly to the increase of $2.2 million in share-based compensation due to the amortization of the share awards granted in the second half of 2009. In addition, the increase in general and administrative expenses is also due to the aggregate increase of $0.2 million in the cost of remuneration to directors and officers, the increase in costs of $0.1 million for professional services and other related costs incurred in connection with publicly listed company requirements, as well as the increase of $0.1 million in other general and administrative expenses.

Interest and finance costs—Interest and finance costs for the three months ended March 31, 2010 were $2.5 million, compared to $4.3 million for the three months ended March 31, 2009, resulting primarily from the decrease in the average outstanding indebtedness.

Loss on interest rate swaps—Loss on interest rate swaps for the three months ended March 31, 2010 of $1.1 million consists of unrealized gain of $1.0 million, representing a gain to record at fair value six interest rate swaps for the three months ended March 31, 2010 and realized expenses of $2.1 million incurred during the three months ended March 31, 2010. Loss on interest rate swaps for the three months ended March 31, 2009 of $0.3 million consists of unrealized gain of $0.7 million, representing a gain to record at fair value six interest rate swaps for the three months in 2009 and realized expenses of $1.0 million incurred during the three months ended March 31, 2009.

Interest income—Interest income for the three months ended March 31, 2010 was $155,775, compared to $220,202 for the three months ended March 31, 2009, reflecting differences in the average amount of cash on hand that was held in interest bearing accounts.

Net income—As a result of the above factors, net income for the three months ended March 31, 2010 was $9.2 million, compared to $19.2 million net income for the three months ended March 31, 2009.

Cash Flows

Our principal sources of funds for the three months ended March 31, 2010 have been the earnings before non-cash charges and proceeds from the sale of one of our vessels. Our principal uses of funds have been (i) working capital requirements, (ii) principal and interest payments on our existing indebtedness and (iii) dividend payments to our common stockholders. Cash and cash equivalents totaled $130.7 million at March 31, 2010, compared to $134.0 million at December 31, 2009. Working capital surplus was $117.9 million as of March 31, 2010, compared to $111.1 million as of December 31, 2009. This increase is mainly due to the sale of the M/V Blue Seas, which resulted in a decrease in liabilities associated with vessel held for sale of $24.9 million offset by a decrease in vessel held for sale by $18.1 million. It is also due to the decrease in current portion of long-term debt by $2.0 million offset by a decrease in cash and cash equivalents by $3.2 million and to other fluctuations in the rest of current assets and current liabilities. The overall cash position in the future may be negatively impacted if the current economic environment worsens.

Operating Activities

Net cash from operating activities was $16.6 million for the three months ended March 31, 2010, compared to $23.3 million for the three months ended March 31, 2009, mainly due to the lower cash flows from charter hire, partly offset by the decrease in commissions and operating expenses.

Investing Activities

Net cash from investing activities was $18.3 million, for the three months ended March 31, 2010, which reflects the proceeds of $18.3 million from the sale of the M/V Blue Seas that was delivered to its new owners in January 2010. Net cash used in investing activities, for the three months ended March 31, 2009, was $43.0 million, which reflects a net increase of $43.0 million in restricted cash for the three months ended March 31, 2009.

Financing Activities

Net cash used in financing activities was $38.1 million for the three months ended March 31, 2010, which is the result of the repayment of long-term debt, which in aggregate amounted to $34.8 million, the payments of financing costs of $0.7 million and by the dividends paid of $2.6 million. Net cash used in financing activities was $11.7 million, for the three months ended March 31, 2009, which is the result of the repayment of long-term debt in the amount of $41.6 million offset by proceeds from loans of $30.0 million, as well as payments of financing costs of $0.1 million.

Loan Facilities

For information relating to our credit facilities, please see Note 12 to our financial statements included in our annual report on Form 20-F for the year ended December 31, 2009 and Note 4 to our unaudited condensed consolidated financial statements included elsewhere herein.

Liquidity and Capital Resources

Our principal sources of funds are our operating cash flows, borrowings under our credit facilities and equity provided by our shareholders. Our principal uses of funds are capital expenditures to grow our fleet in the future, maintenance costs to ensure the quality of our drybulk carriers, compliance with international shipping standards and environmental laws and regulations, fund working capital requirements, make principal repayments on loan facilities, and, with the discretion of our board of directors and subject to the consent of our lenders, pay dividends to our shareholders. Furthermore, we have agreed to acquire a 2009-built Panamax for $41.0 million and entered into contracts for the building of four vessels of an aggregate cost of $111.5 million which we intend to finance with a combination of equity and debt. If we do not acquire any additional vessels, we believe that our forecasted operating cash flows will be sufficient to meet our liquidity needs for the next 12 months assuming the charter market does not further deteriorate. If we do acquire additional vessels, we will rely on additional borrowings under credit facilities that we would seek to enter into, proceeds from existing and future equity offerings and revenues from operations to meet our liquidity needs going forward.

In addition, the Company has an unused credit facility from First Business Bank S.A for an amount of up to $25.0 million to finance up to 60% of the market value of either Panamax, Supramax or Handymax drybulk carriers with a maximum age of 10 years, which is available up to June 2010. We do not currently intend to renew or extend this facility.

As of March 31, 2010, we had approximately $299.5 million of outstanding indebtedness, of which $37.2 million is payable within the next 12 months. In connection with amendments to our five loan agreements during the first quarter of 2010, as of March 31, 2010, restricted cash decreased to 46.5 million.

Our business is capital intensive and its future success will depend on our ability to maintain a high-quality fleet through the acquisition of newer drybulk vessels and the selective sale of older drybulk vessels. These acquisitions will be principally subject to management’s expectation of future market conditions as well as our ability to acquire drybulk carriers on favorable terms. Our dividend policy will also impact our future liquidity position.

We manage our exposure to interest rate fluctuations that will impact our future liquidity position through swap agreements. For information relating to our swap agreements, please see Note 13 to our financial statements included in our annual report on Form 20-F for the year ended December 31, 2009.

Subsequent Events

Dividend Declaration Subsequent to Quarter-End

On May 3, 2010, the Company’s board of directors declared a quarterly dividend of $0.05 per Class A common share with respect to the first quarter of 2010, payable on May 31, 2010 to shareholders of record on May 17, 2010.

Vessel Acquisitions

The Company has agreed to acquire a 2009-built Panamax bulk carrier, to be named “Dream Seas” with a carrying capacity of 75,151 dwt for the amount of $41 million. The vessel was built at the Hudong Zhonghua Shipyard, Shanghai. “Dream Seas” is expected to be delivered to the Company within June and July 2010. The Company also announced that it has entered the “Dream Seas” into a period time charter agreement with Intermare Transport GMBH, a leading German based commodities trading house, for a minimum 35 months and maximum 37 months at a gross daily time charter rate of $20,000.

The Company has also entered into shipbuilding contracts with a Chinese shipyard for the construction of two Handysize drybulk vessels, each approximately 37,200 deadweight tons, or dwt, and two Kamsarmax drybulk vessels, each approximately 82,000 dwt, for an aggregate purchase price of approximately $111.5 million. The Company expects to take delivery of the Handysize drybulk vessels in the fourth quarter of 2011 and the Kamsarmax drybulk vessels in the second and third quarters of 2012. Following the delivery of these four vessels, the Company’s fleet will expand to 16 vessels with an aggregate carrying capacity of approximately 1,000,000 dwt. Furthermore, the Company has the option up until May 6, 2010, to enter into agreements for the construction of an additional two Handysize and two Kamsarmax drybulk vessels with expected deliveries in the third and fourth quarters of 2012, respectively, if the options are exercised.

Increase in authorized Class A common shares

On April 7, 2010 the Company’s Amended and Restated Articles of Incorporation were further amended to increase the number of authorized Class A common shares from 120 million to 750 million shares, $0.001 par value. This amendment was approved by the Company’s shareholders at a special meeting held on March 30, 2010.

Significant Accounting Policies and Critical Accounting Policies

For a description of all of our significant accounting policies, see Note 2 to our audited financial statements included in our annual report on Form 20-F for the year ended December 31, 2009. For a discussion on our critical accounting policies please see Item 5 included in our annual report on Form 20-F for the year ended December 31, 2009.

-Table Follow-

Updated Fleet List

The following tables represent our fleet and the additional secondhand vessel and newbuilding vessels that we have agreed to acquire, as well as options to acquire an additional four newbuildings, as of May 3, 2010.


Name	Type	Dwt	Year Built
*Panamax*
Deep Seas	Panamax	72,891	1999
Calm Seas	Panamax	74,047	1999
Kind Seas	Panamax	72,493	1999
Pearl Seas	Panamax	74,483	2006
Diamond Seas	Panamax	74,274	2001
Coral Seas	Panamax	74,477	2006
Golden Seas	Panamax	74,475	2006
Total Panamax	7	517,140
*Handymax*
Clean Seas	Handymax	46,640	1995
Crystal Seas	Handymax	43,222	1995
Total Handymax	2	89,862
*Supramax*
Sapphire Seas	Supramax	53,702	2005
Friendly Seas	Supramax	58,779	2008
Total Supramax	2	112,481
Grand Total	11	719,483

Secondhand vessels that we have agreed to acquire


Name	Type	Dwt	Year Built
*Panamax*
Dream Seas	Panamax	75,151	2009
Total Panamax	1	75,151
Grand Total	1	75,151

Newbuildings that we have agreed to acquire


Name	Type	Dwt	Year Built
*Kamsarmax*
Hull no. 619	Kamsarmax	82,000	2012
Hull no. 622	Kamsarmax	82,000	2012
Total Panamax	2	164,000
*Handysize*
Hull no. 604	Handysize	37,200	2011
Hull no. 605	Handysize	37,200	2011
Total Handymax	2	74,400
Grand Total	4	238,400

Options to acquire newbuildings


Name	Type	Dwt	Year Built
*Kamsarmax*
Hull no. 623	Kamsarmax	82,000	2012
Hull no. 624	Kamsarmax	82,000	2012
Total Panamax	2	164,000
*Handysize*
Hull no. 612	Handysize	37,200	2012
Hull no. 625	Handysize	37,200	2012
Total Handymax	2	74,400
Grand Total	4	238,400

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	Page

Unaudited condensed consolidated balance sheets as of December 31, 2009 and March 31, 2010	F-2
Unaudited condensed consolidated statements of income for the three months ended March 31, 2009 and March 31, 2010	F-3
Unaudited condensed consolidated statements of shareholders’ equity for the three months ended March 31, 2009 and March 31, 2010	F-4
Unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2009 and March 31, 2010	F-5
Notes to the unaudited condensed consolidated financial statements	F-6

F-1


Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2009 and March 31, 2010
(Expressed in United States Dollars)
December 31, 2009 March 31, 2010
Assets
Current assets
Cash and cash equivalents..........	133,960,178		130,725,416
Restricted cash..............	31,000,000		31,000,000
Assets held for sale............	18,050,402	-
Trade receivables.............	2,187,039		913,065
Other receivables.............	2,233,809		2,265,704
Prepaid expenses.............	464,804		89,190
Due from management company........	1,231,879		1,434,761
Inventories................	921,325		887,518
Total current assets	190,049,436		167,315,654
Fixed assets
Vessels at cost...............	683,721,898		683,721,898
Less: accumulated depreciation.......	(78,989,341)		(87,021,065)
Other fixed assets	51,718		86,232
Total fixed assets	604,784,275		596,787,065
Other assets...............	1,380,577		1,525,198
Restricted cash...............	15,510,000		15,510,000
Other long-term receivables.........	968,560		373,641
Total Assets	812,692,848		781,511,558
Liabilities and Shareholders' Equity
Current liabilities
Trade accounts payable (including balance due to a related party of $17,300
and $2,090 as of December 31, 2009 and March 31, 2010 respectively)	1,951,695		1,843,290
Accrued expenses..............	2,416,524		2,031,769
Interest rate swaps.............	6,820,289		5,782,439
Deferred income..............	3,701,832		2,538,879
Current portion of long-term debt......	39,200,000		37,200,000
Liability associated with vessel held for sale..	24,900,000	-
Total current liabilities	78,990,340		49,396,377
Long-Term Liabilities
Long-term debt..............	270,235,000		262,310,000
Deferred income..............	461,390		667,555
Interest rate swaps.............	1,467,499		1,489,412
Below market acquired time charters......	5,272,801		2,375,060
Total long-term liabilities	277,436,690		266,842,027
Total Liabilities	356,427,030		316,238,404
Commitments and Contingencies
Shareholders' equity
Preferred shares, $0.001 par value; 25,000,000 authorized, none issued,
none outstanding at December 31, 2009 and March 31, 2010	-		-
Class A common shares, $0.001 par value; 120,000,000
authorized 51,189,033 issued and outstanding at December 31, 2009
and 51,233,033 issued and outstanding at March 31, 2010	51,189		51,233
Class B common shares, $0.001 par value; 5,000,000 authorized
none issued and outstanding at December 31, 2008 and March 31, 2010	-		-
Additional paid-in capital..........	408,619,010		411,028,311
Retained earnings.......	47,595,619		54,193,610
Total shareholders' equity	456,265,818		465,273,154
Total Liabilities and Shareholders' Equity	812,692,848		781,511,558

The accompanying notes are an integral part of these condensed consolidated financial statements

F-2


Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Income
For the three months ended March 31, 2009 and 2010
(Expressed in United States Dollars)

	Three Months Ended	Three Months Ended
	March 31, 2009	March 31, 2010
Revenue
Time charter revenue (including amortization of below and above market
acquired time charters of $4,580,635 and $2,897,745 for the
three months ended March 31, 2009 and 2010, respectively)	41,598,840	31,406,252
Less: commissions	2,243,951	1,738,378
Net Revenue	39,354,889	29,667,874
Expenses/(Income)
Voyage expenses	56,295	84,555
Vessels operating expenses (including expenses charged by a
related party of $48,200 and $73,366 for the three months ended
March 31, 2009 and 2010, respectively)	5,305,995	4,694,074
Dry-docking expenses	39,664	119,324
Management fees charged by a related party	895,640	881,409
Depreciation	8,552,309	8,035,874
General and administrative expenses (including share
based compensation of $150,493 and $2,409,345 for the three months ended
March 31, 2009 and 2010, respectively)	1,001,440	3,625,435
Profit on sale of assets held for sale	-	(262,490)
Gain from vessel early redelivery	-	(113,338)
Operating Income	23,503,546	12,603,031

Other Income/(Expenses)
Interest and finance costs	(4,308,367)	(2,546,488)
Loss on interest rate swaps	(292,930)	(1,083,280)
Interest income	220,202	155,775
Foreign currency gain	62,326	30,457
Total Other Expenses, net	(4,318,769)	(3,443,536)
Net Income	19,184,777	9,159,495

Earnings per Class A common share, basic and diluted	$ 0.71	$ 0.18

Weighted average number of Class A common shares, basic and diluted	27,077,348	49,481,525

The accompanying notes are an integral part of these condensed consolidated financial statements

F-3


Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Shareholders' Equity
For the three months March 31, 2009 and 2010
(Expressed in United States Dollars, except for number of shares)

	Class A Shares
				(Accumulated
			Additional	Deficit)/
	Number of	Par	Paid-in	Retained
	Shares	Value	Capital	Earnings	Total
Balance January 1, 2009	27,138,515	27,139	318,515,490	(10,111,350)	308,431,279
Issuance of Class A common shares and share based compensation	40,600	41	150,452		150,493
Dividends declared (0.05 per share)				(1,358,806)	(1,358,806)
Net Income..........				19,184,777	19,184,777
Balance March 31, 2009	27,179,115	27,180	318,665,942	7,714,621	326,407,743


Balance January 1, 2010	51,189,033	51,189	408,619,010	47,595,619	456,265,818
Issuance of Class A common shares, and share based compensation	44,000	44	2,409,301		2,409,345
Dividends declared (0.05 per share)				(2,561,504)	(2,561,504)
Net Income..........				9,159,495	9,159,495
Balance March 31, 2010	51,233,033	51,233	411,028,311	54,193,610	465,273,154

The accompanying notes are an integral part of these condensed consolidated financial statements

F-4


Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2009 and 2010
(Expressed in United States Dollars)

	Three Months Ended	Three Months Ended
	March 31, 2009	March 31, 2010

Cash flows from operating activities
Net Income.......................	19,184,777	9,159,495
Adjustments to reconcile net income to net cash provided by
operating activities
Depreciation......................	8,552,309	8,035,874
Profit on sale of assets held for sale	-	(262,490)
Amortization of below and above market acquired time charters	(4,580,635)	(2,897,745)
Amortization of financing costs...............	501,201	342,629
Share based compensation................	150,493	2,409,345
Unrealized gain on interest rate swaps.............	(726,321)	(1,015,937)
Changes in assets and liabilities
Trade receivables.....................	(546,940)	1,273,974
Other receivables.....................	22,678	(31,895)
Prepaid expenses.....................	57,977	375,614
Inventories.......................	(36,111)	33,807
Due from management company..............	(516,305)	(202,882)
Other long term receivables................	74,760	594,919
Trade accounts payable...................	(61,518)	(108,405)
Accrued expenses....................	1,328,757	(124,819)
Deferred income.....................	(99,956)	(956,788)
Net cash from operating activities	23,305,166	16,624,696
Cash flow from Investing Activities
Net proceeds from sale of assets held for sale.........	-	18,312,892
Increase in other fixed assets...............	-	(38,662)
Restricted cash (net).....................	(43,000,000)	-
Net cash (used in) / from investing activities	(43,000,000)	18,274,230
Cash flows from financing activities
Proceeds from long-term debt...............	30,000,000	-
Repayment of long-term debt................	(41,575,000)	(34,825,000)
Payment of financing costs................	(160,020)	(747,184)
Dividends paid.....................	-	(2,561,504)
Net cash used in financing activities	(11,735,020)	(38,133,688)
Net decrease in cash and cash equivalents	(31,429,854)	(3,234,762)
Cash and cash equivalents at the beginning of the period	68,441,752	133,960,178
Cash and cash equivalents at the end of the period	37,011,898	130,725,416

The accompanying notes are an integral part of these condensed consolidated financial statements

F-5

Paragon Shipping Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Expressed in United States Dollars except for number of shares data)

1. Basis of Presentation and General Information

Basis of Presentation: Paragon Shipping Inc. is a public company incorporated in the Republic of the Marshall Islands on April 26, 2006 to act as a holding company. In December 2006, the Company established a branch in Greece under the provision of Law 89 of 1967, as amended. The accompanying consolidated condensed financial statements include the accounts of Paragon Shipping Inc., and its wholly owned vessel owning subsidiaries (collectively the “Company”) as discussed in Note 1 to the consolidated financial statements for the year ended December 31, 2009 included in the Company’s Annual Report on Form 20-F.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the management of Paragon Shipping Inc., all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of financial position, operating results and cash flows have been included in the accompanying financial statements. Interim results are not necessarily indicative of results that may be expected for the year ending December 31, 2010. These financial statements should be read in conjunction with the consolidated financial statements and footnotes for the year ended December 31, 2009 included in the Company’s Annual Report on Form 20-F.

2. Significant Accounting Policies

A summary of the Company’s significant accounting policies is identified in Note 2 of the Company’s consolidated financial statements for the year ended December 31, 2009 included in the Company’s Annual Report on Form 20-F. There have been no changes to the Company’s significant accounting policies.

3. Assets held for sale

The decrease of $18.1 million in the assets held for sale during the three-month period ended March 31, 2010 reflects the completion of the sale of the M/V Blue Seas and the delivery of the vessel to its new owners in January 2010.

4. Vessels, Net

The decrease in the net vessels during the three month period ended March 31, 2010 is attributable to the depreciation charge of $8.0 million.

5. Long-Term Debt


Debt	December 31 , 2009	March 31, 2010
Long-term debt	$270,235,000	$262,310,000
Current portion of long-term debt	$39,200,000	$37,200,000
Liability associated with vessel held for sale	$24,900,000	-
Total long-term debt	$334,335,000	$299,510,000

Details of the loan and credit facilities are discussed in Note 12 of our consolidated financial statements for the year ended December 31, 2009 included in the Company’s annual report on Form 20-F.

The decrease in total long-term debt is attributable to the scheduled loan repayments of $9.9 million, as well as the repayment of the outstanding loan balance of $24.9 million relating to the M/V Blue Seas, which was repaid in full with the completion of the sale of the vessel in January 2010.

All vessels are first-priority mortgaged as collateral to the Company’s loan facilities.

F-6

Paragon Shipping Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Expressed in United States Dollars except for number of shares data)

5. Long-Term Debt

The minimum annual principal payments, in accordance with the loan and credit facility agreements, as amended, required to be made after March 31, 2010 are as follows:


To March 31,
2011	37,200,000
2012	31,700,000
2013	146,010,000
2014	17,700,000
2015	21,200,000
Thereafter	45,700,000
Total	299,510,000

6. Financial Instruments

The Company enters into interest rate swap transactions to manage interest costs and the risk associated with changing interest rates with respect to its variable interest rate loan and credit facilities. These interest rate swap transactions fix the interest rates based on predetermined ranges in current LIBOR rates. As of March 31, 2010, the Company’s outstanding interest rate swaps had a combined notional amount of $258 million.

The Company’s interest rate swaps did not qualify for hedge accounting. The Company adjusts its interest rate swap contracts to fair market value at the end of every period and reflects the resulting unrealized loss/gain during the period in earnings. Information on the location and amounts of derivative fair values in the condensed consolidated balance sheets and derivative losses in the condensed consolidated income statements are shown below:


Derivatives Instruments not	Liability Derivatives
designated as hedging instruments		December 31, 2009	March 31, 2010
	Balance Sheet Location	Fair Value	Fair Value
Interests rate contracts	Current liabilities – Interest rate swaps	$6,820,289	$5,782,439
Interest rate contracts	Long-Term Liabilities – Interest rate swaps	1,467,499	1,489,412
Total derivatives		$8,287,788	$7,271,851


Derivatives Instruments not		Three Months Ended	Three Months Ended
designated as hedging instruments	Location of (Loss)/Gain Recognized	March 31, 2009	March 31, 2010
Interest rate swaps – Fair value	Gain on interest rate swaps	$726,321	$1,015,937
Interest rate swaps – Realized Loss	Loss on interest rate swaps	(1,019,251)	(2,099,217)
Total loss on interest rate swaps		$(292,930)	$(1,083,280)

F-7

Paragon Shipping Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Expressed in United States Dollars except for number of shares data)

6. Financial Instruments – Continued

The fair value of the Company’s interest rate swap agreements is determined using a discounted cash flow approach based on market based LIBOR swap yield rates. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items in accordance with the fair value hierarchy.

The following table summarizes the valuation of our financial instruments as of December 31, 2009 and March 31, 2010.


	Significant Other Observable Inputs (Level 2)
	December 31, 2009		March 31, 2010
Interest rate swaps - liability		$8,287,788		$7,271,851

As of December 31, 2009 and March 31, 2010, no fair value measurements for assets or liabilities under Level 1 or Level 3 were recognized in the Company’s consolidated balance sheet.

The carrying values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable are reasonable estimates of their fair value due to the short-term nature of these financial instruments. The fair value of the loan/credit facilities approximates the carrying value due to the variable interest rate and no significant change in the Company’s credit risk.

7. Earnings per Share (“EPS”)

All shares issued (including the non-vested share awards issued under the Equity Incentive Plan, as amended) of the Company’s common stock and have equal rights to vote and participate in dividends. The calculation of basic earnings per share does not consider the non-vested shares as outstanding until the time-based vesting restriction has lapsed. Non-vested share awards are included in the two-class method of computing earnings per share and income attributable to non-vested share awards is deducted from the net income reported for purposes of calculating net income available to common shareholders for the computation of basic earnings per share.

The Company excluded the dilutive effect of 32,000 stock option awards, 290,006 warrants as of March 31, 2009 and 2010 and 101,767 and 1,751,508 non-vested share awards as of March 31, 2009 and 2010, respectively, in calculating dilutive EPS for its Class A common shares as they were anti-dilutive.

The following table sets forth the computation of basic and diluted net income per share for the three months ended March 31, 2009 and 2010:


	Three Months Ended	Three Months Ended
Numerators	March 31, 2009	March 31, 2010
Net income	$19,184,777	$9,159,495
Less: Income attributable to non-vested share awards	(71,834)	(312,635)
Net Income available to common shareholders	$19,112,943	$8,846,860
Denominators
Weighted average common shares outstanding, basic and diluted	27,077,348	49,481,525
Net income per common share:
Basic and diluted	$0.71	$0.18

F-8

Paragon Shipping Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(Expressed in United States Dollars except for number of shares data)

8. Share Based Payments - Equity incentive plan – Non-vested share awards

During the three months ended March 31, 2010, the Company, under its Equity Incentive Plan, granted 12,000 of non-vested share awards to employees of Allseas on February 1, 2010, with a grant date fair value of $4.45 per share. The non-vested share awards will vest ratably over a four-year period with the first vesting date commencing on December 31, 2010.

A summary of the activity for non-vested share awards is as follows:


	Number of Shares	Weighted Average Fair Value

Non vested, December 31, 2009	1,739,508	$4.72
Granted	12,000	$4.45
Non vested, March 31, 2010	1,751,508	$4.72

The remaining unrecognized compensation cost amounting to $9,261,063 as of March 31, 2010, is expected to be recognized over the remaining weighted average period of 1.2 years, according to the contractual terms of those non-vested share awards.

9. Contingencies

From time to time the Company is subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Such claims, even if lacking in merit, could result in the expenditure of significant financial and managerial resources. As of March 31, 2010 the Company is not aware of any claim or contingent liability, which should be disclosed, or for which a provision should be established in the accompanying financial statements.

10. Subsequent Events

Dividend Declaration Subsequent to Quarter-End

Vessel Acquisitions

The Company has agreed to acquire a 2009-built Panamax bulk carrier, to be named “Dream Seas” with a carrying capacity of 75,151 dwt for an amount of $41 million. The vessel was built at the Hudong Zhonghua Shipyard, Shanghai. “Dream Seas” is expected to be delivered to the Company within June and July 2010. The Company also announced that it has entered the “Dream Seas” into a period time charter agreement with Intermare Transport GMBH, a leading German-based commodities trading house, for a minimum 35 months and maximum 37 months at a gross daily time charter rate of $20,000.

The Company has also entered into shipbuilding contracts with a Chinese shipyard for the construction of two Handysize drybulk vessels, each approximately 37,200 deadweight tons, or dwt, and two Kamsarmax drybulk vessels, each approximately 82,000 dwt, for an aggregate purchase price of approximately $111.5 million. The Company expects to take delivery of the Handysize drybulk vessels in the fourth quarter of 2011 and the Kamsarmax drybulk vessels in the second and third quarters of 2012. Furthermore, the Company has the option up until May 6, 2010, to enter into agreements for the construction of an additional two Handysize and two Kamsarmax drybulk vessels with expected deliveries in the third and fourth quarters of 2012, respectively, if the options are exercised.

Increase in Authorized Class A common shares

F-9