6-K

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
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of December 2009

Commission File Number 000-51559

STEALTHGAS INC.

(Translation of registrant’s name into English)

331 Kifissias Avenue Erithrea 14561 Athens, 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 þ Form 40-F o

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): o

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): o

This Report on Form 6-K is hereby incorporated by reference into (1) the Registration Statement on Form S-8 (Reg. No. 333-144240) of StealthGas Inc. filed with the Securities and Exchange Commission (“SEC”) on June 29, 2007 and the reoffer prospectus, dated June 29, 2007, contained therein, and (2) the Registration Statement on Form F-3 of StealthGas Inc. (Registration No. 333-143804) and the related prospectus supplement filed with the SEC on November 13, 2007, and in each case to be a part thereof from the date on which this Report is furnished, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBIT INDEX

99.1	Consolidated Financial Statements (Unaudited) for the Nine Months Ended September 30, 2009
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations

2

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.

Date: December 28, 2009

STEALTHGAS INC.
By:	/s/ Andrew J. Simmons
	Name:	Andrew J. Simmons
	Title:	Chief Financial Officer

3

EX-99.1

Exhibit 99.1

StealthGas Inc.
Unaudited Condensed Consolidated Financial Statements

Index to unaudited condensed consolidated financial statements

	Pages
Unaudited Condensed Consolidated Balance Sheets — December 31, 2008 and September 30, 2009		2
Unaudited Condensed Consolidated Statements of Income for the three and nine month periods ended September 30, 2008 and 2009		3
Unaudited Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2008 and 2009		4
Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity for the nine month periods ended September 30, 2008 and 2009		5
Notes to the Unaudited Condensed Consolidated Financial Statements		6 - 21

1

StealthGas Inc.
Unaudited Condensed Consolidated Balance Sheets
December 31, 2008 and September 30, 2009 (Expressed in United States Dollars, except share data)

	December 31,			September 30,
	2008			2009
Assets
Current assets
Cash and cash equivalents		41,848,059			30,858,728
Trade and other receivables		2,325,438			1,824,087
Claims receivable		607,306			13,824
Inventories		1,254,142			2,120,101
Advances and prepayments		812,654			532,969
Restricted cash		3,672,439			5,077,034
Fair value of derivatives		1,938,480			4,623
Total current assets		52,458,518			40,431,366
Non current assets
Advances for vessels under construction and acquisitions		23,009,597			29,086,967
Vessels, net		551,771,040			631,003,848
Other receivables		246,219			210,317
Restricted cash		600,000			1,550,000
Deferred finance charges, net of accumulated amortization of $267,118 and $414,333		550,226			1,522,311
Fair value of derivatives		5,711,523			7,924,204
Total non current assets		581,888,605			671,297,647
Total assets		634,347,123			711,729,013
Liabilities and Stockholders’ Equity
Current liabilities
Payable to related party		2,407,377			3,578,190
Trade accounts payable		3,256,175			3,645,535
Other accrued liabilities		4,518,097			5,590,061
Customer deposits		1,436,369			4,955,108
Deferred income		4,776,359			1,378,047
Current portion of long-term debt		24,380,554			31,612,718
Total current liabilities		40,774,931			50,759,659
Non current liabilities
Fair value of derivatives		12,762,979			11,628,665
Customer deposits		3,467,017			—
Fair value of below market acquired time charter		181,552			—
Long-term debt		259,313,319			321,449,016
Total non current liabilities		275,724,867			333,077,681
Total liabilities		316,499,798			383,837,340
Commitments and contingencies		—			—
Stockholders’ equity
Capital stock
5,000,000 preferred shares authorized and zero outstanding with a par value of $0.01 per share
100,000,000 common shares authorized, 22,310,110 and 22,310,110 shares issued and outstanding with a par value of $0.01 per share		223,101			223,101
Additional paid-in capital		283,526,241			284,027,628
Retained earnings		34,910,189			44,565,784
Accumulated other comprehensive (loss)		(812,206	)		(924,840	)
Total stockholders’ equity		317,847,325			327,891,673
Total liabilities and stockholders’ equity		634,347,123			711,729,013

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

2

StealthGas Inc.
Unaudited Condensed Consolidated Statements of Income
(Expressed in United States Dollars, except share data)

	Quarters Ended						Nine Month Periods Ended
	September 30,						September 30,
	2008			2009			2008			2009
Revenues
Voyage revenues		28,895,043			28,383,945			84,389,367			84,665,459
Expenses
Voyage expenses		1,626,513			2,665,992			3,850,401			7,084,432
Vessels’ operating expenses		8,782,014			9,649,509			23,961,148			28,047,187
Dry-docking costs		43,401			518,522			510,832			784,901
Management fees		1,161,250			1,333,420			3,419,065			3,832,670
General and administrative expenses		1,672,909			957,807			5,133,658			2,784,858
Depreciation		5,976,036			7,104,351			17,128,670			19,828,575
Charter termination fees		—			(618,000	)		—			(618,000	)
Net (gain)/loss on sale of vessels		—			—			(1,673,321	)		791,659
Total expenses		19,262,123			21,611,601			52,330,453			62,536,282
Income from operations		9,632,920			6,772,344			32,058,914			22,129,177
Other income and (expenses)
Interest and finance costs		(2,361,087	)		(2,333,499	)		(7,581,916	)		(6,501,636	)
Change in fair value of derivatives		(1,956,211	)		2,743,086			(2,497,747	)		(1,859,120	)
Interest income		65,551			40,163			457,612			210,555
Foreign exchange loss		(12,316	)		(63,348	)		(198,788	)		(140,235	)
Other expenses, net		(4,264,063	)		386,402			(9,820,839	)		(8,290,436	)
Net income		5,368,857			7,158,746			22,238,075			13,838,741
Earnings per share
— Basic		0.24			0.32			1.00			0.62
— Diluted		0.24			0.32			1.00			0.62
Weighted average number of shares
— Basic		22,114,105			22,210,108			22,114,105			22,206,440
— Diluted		22,233,081			22,245,939			22,194,740			22,222,330
Cash dividends declared		0.1875			—			0.5625			0.1875

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

3

StealthGas Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(Expressed in United States Dollars)

	Nine Month Periods Ended
	September 30,
	2008			2009
Cash flows from operating activities
Net income for the period		22,238,075			13,838,741
Items included in net income not affecting cash flows:
Depreciation and amortization of deferred finance charges		17,213,467			19,975,790
Amortization of fair value of time charter		(871,638	)		(181,552	)
Share based compensation		1,614,511			501,387
Change in fair value of derivatives		1,440,120			(1,525,772	)
(Gain)/loss on sale of vessels		(1,673,321	)		791,659
Changes in operating assets and liabilities:
(Increase)/decrease in
Trade and other receivables		160,545			537,253
Claims receivable		(3,523	)		(510,692	)
Inventories		(526,754	)		(865,959	)
Advances and prepayments		(87,430	)		279,685
Increase/(decrease) in
Payable to related party		(3,700,172	)		1,170,813
Trade accounts payable		236,766			389,360
Other accrued liabilities		1,199,437			1,071,964
Deferred income		(255,269	)		(3,398,312	)
Net cash provided by operating activities		36,984,814			32,074,365
Cash flows from investing activities
Insurance proceeds		—			1,104,174
Advances for vessels under construction and acquisitions		(22,893,343	)		(6,077,370	)
Proceeds from sale of vessels, net		26,883,889			6,229,973
Acquisition of vessels		(145,173,795	)		(106,083,015	)
Decrease/(increase) in restricted cash account		4,464,202			(2,354,595	)
Net cash (used in) investing activities		(136,719,047	)		(107,180,833	)
Cash flows from financing activities
Dividends paid		(12,544,561	)		(4,183,146	)
Deferred finance charges		(245,675	)		(1,119,300	)
Customer deposits		(306,772	)		51,722
Loan repayment		(19,530,636	)		(18,782,139	)
Proceeds from long-term debt		115,745,000			88,150,000
Net cash provided by financing activities		83,117,356			64,117,137
Net (decrease) in cash and cash equivalents		(16,616,877	)		(10,989,331	)
Cash and cash equivalents at beginning of year		33,114,872			41,848,059
Cash and cash equivalents at end of period		16,497,995			30,858,728
Supplemental Cash Flow Information:
Cash paid during the period for interest		8,875,987			5,744,015

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

4

StealthGas Inc.
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the nine month periods ended September 30, 2008 and 2009
(Expressed in United States Dollars)

													Accumulated
				Capital stock									Other
	Comprehensive			Number of				Additional		Retained			Comprehensive
	Income			Shares		Amount		Paid-in Capital		Earnings			Income/(loss)			Total
Balance as of January 1, 2008					22,284,105		222,841		281,612,867		21,650,412			(455,332	)		303,030,788
Issuance of restricted shares and and related stock based compensation					26,005		260		1,614,251		—			—			1,614,511
Dividends paid ($0.5625 per share)					—		—		—		(12,544,561	)		—			(12,544,561	)
Net income for the period		22,238,075			—		—		—		22,238,075			—			22,238,075
Other comprehensive income
— Cash flow hedges:
Swap contract		1,486,553												1,486,553			1,486,553
Reclassification adjustment		146,401												146,401			146,401
Comprehensive income		23,871,029			—		—		—		—			—			—
Balance, September 30, 2008					22,310,110		223,101		283,227,118		31,343,926			1,177,622			315,971,767
Balance as of January 1, 2009					22,310,110		223,101		283,526,241		34,910,189			(812,206	)		317,847,325
Stock based compensation					—		—		501,387		—			—			501,387
Dividends paid ($0.1875 per share)					—		—		—		(4,183,146	)		—			(4,183,146	)
Net income for the period		13,838,741			—		—		—		13,838,741			—			13,838,741
Other comprehensive income
— Cash flow hedges:
Swap contract		168,825									168,825			168,825
Reclassification adjustment		(281,459	)								(281,459	)		(281,459	)
Comprehensive income		13,726,107			—		—		—		—			—			—
Balance, September 30, 2009					22,310,110		223,101		284,027,628		44,565,784			(924,840	)		327,891,673

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

5

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

1. Interim Financial Statements

The unaudited condensed consolidated financial statements include the accounts of StealthGas Inc. and its wholly consolidated owned subsidiaries (collectively referred to as the “Company”) in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information. The unaudited condensed consolidated financial statements have been prepared in accordance with the accounting policies described in the Company’s 2008 Annual Report on Form 20-F and should be read in conjunction with the consolidated financial statements and notes thereto.

Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain reoccurring adjustments necessary to present fairly the Company’s financial position as of September 30, 2009, and the results of its operations and its cash flows for the nine month periods ended September 30, 2008 and 2009.

2. Organization

StealthGas Inc. was formed under the laws of Marshall Islands on December 22, 2004 and, as of September 30, 2009 owned a fleet of forty liquefied petroleum gas (LPG) carriers and three medium range (M.R.) type product carriers providing worldwide marine transportation services under long, medium or short-term charters.

As of September 30, 2009, StealthGas Inc. included the ship-owing companies listed below:

LPG carriers

			Acquisition /
	Name of Company	Vessel Name	Disposition Date	cbm
1.	VCM Trading Ltd.	Ming Long	October 12, 2004		3,515.55
2.	Gaz De Brazil Inc.	Gas Prodigy	October 15, 2004		3,014.59
3.	LPGONE Ltd.	Gas Tiny	October 29, 2004		1,319.96
4.	Geneve Butane Inc.	Gas Courchevel	November 24, 2004		4,102.00
5.	Matrix Gas Trading Ltd.	Gas Shanghai	December 7, 2004		3,525.92
6.	Pacific Gases Ltd.	Gas Emperor	February 2, 2005		5,009.07
7.	Semichlaus Exports Ltd.	Gas Ice	April 7, 2005		3,434.08
8.	Ventspils Gases Ltd.	Gas Arctic	April 7, 2005		3,434.08
9.	Industrial Materials Inc.	Birgit Kosan	April 11, 2005		5,013.33
	Independent Trader Ltd.	Gas Oracle	April 26, 2005		3,014.59
			(sold on January 28, 2008)
10.	Aracruz Trading Ltd.	Gas Amazon	May 19, 2005		6,562.41
11.	Continent Gas Inc.	Gas Chios	May 20, 2005		6,562.09
12.	Empire Spirit Ltd.	Sweet Dream	May 31, 2005		5,018.35
13.	Jungle Investment Limited	Gas Cathar	July 27, 2005		7,517.18
14.	Northern Yield Shipping Ltd.	Gas Legacy	October 27, 2005		3,500.00
15.	Triathlon Inc.	Gas Marathon	November 2, 2005		6,572.20
16.	Iceland Ltd.	Gas Crystal	November 11, 2005		3,211.04
17.	Soleil Trust Inc.	Gas Sincerity	November 14, 2005		4,128.98
18.	East Propane Inc.	Catterick	November 24, 2005		5,001.41
19.	Petchem Trading Inc.	Gas Spirit	December 16, 2005		4,112.18
	Malibu Gas Inc.	Feisty Gas*	December 16, 2005		4,111.24
20.	Balkan Holding Inc.	Gas Czar	February 14, 2006		3,509.65
21.	Transgalaxy Inc.	Gas Fortune	February 24, 2006		3,512.78

6

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

2. Organization — Continued

			Acquisition /
	Name of Company	Vessel Name	Disposition Date	cbm
22.	International Gases Inc	Gas Zael*	April 03, 2006		4,111.24
23.	Balkan Profit Ltd	Gas Eternity	March 09, 2006		3,528.21
24.	Oxfordgas Inc.	Lyne	May 19, 2006		5,013.90
25.	Energetic Peninsula Limited	Sir Ivor	May 26, 2006		5,000.00
	Ocean Blue Limited	Gas Nemesis	June 15, 2006		5,016.05
			(sold on January 29, 2008)
26.	Baroness Holdings Inc.	Batangas	June 30, 2006		3,244.04
27.	Evolution Crude Inc.	Gas Flawless	February 1, 2007		6,300.00
28.	Aura Gas Inc.	Sea Bird	May 18, 2007		3,518.00
	European Energy Inc.	Gas Renovatio	May 29, 2007		3,312.50
			(sold on March 19, 2008)
29.	Fighter Gas Inc.	Gas Icon	June 27, 2007		5,000.00
30.	Luckyboy Inc.	Chiltern	June 28, 2007		3,312.00
31.	Italia Trades Inc.	Gas Evoluzione	July 23, 2007		3,517.00
32.	Studio City Inc.	Gas Kalogeros	July 27, 2007		5,000.00
33.	Gastech Inc.	Gas Sikousis	August 03, 2007		3,500.00
	Espace Inc.	Gas Sophie	October 15, 2007		3,500.00
			(sold on June 10, 2009)
34.	Cannes View Inc.	Gas Haralambos	October 30, 2007		7,000.00
35.	Ecstasea Inc.	Gas Premiership	March 19, 2008		7,200.00
36.	Spacegas Inc.	Gas Defiance	August 1, 2008		5,000.00
37.	Financial Power Inc.	Gas Shuriken	November 3, 2008		5,000.00
38.	Tankpunk Inc.	Gas Natalie	January 22, 2009		3,213.92
39.	Sound Effex Inc.	Gas Astrid	April 16, 2009		3,500.00
40.	Revolution Inc.	Gas Exelero	June 30, 2009		3,500.00

Name of Company	Vessel Name	To be delivered on	cbm
Pelorus Inc.	Hull K 421	July 2011		5,000.00
Rising Sun Inc.	Hull K 422	February 2011		5,000.00
Carinthia Inc.	Hull K 423	March 2011		5,000.00
Tatoosh Beauty Inc.	Hull K 424	May 2012		7,500.00
Octopus Gas Inc.	Hull K 425	November 2011		7,500.00

M.R. type product carriers

	Name of Company	Vessel Name	Acquisition Date	dwt
41.	Clean Power Inc.	Navig8 Fidelity	January 9, 2008		46,754.29
42.	MR Roi Inc.	Navig8 Faith	February 27, 2008		46,754.29
43.	King of Hearts Inc.	Alpine Endurance	July 14, 2009		47,000.00

Name of Company	Vessel Name	To be delivered on	dwt
Castell Castle Inc.	Stealth Argentina	December 2009		50,500.00

* On April 3, 2006, the “Feisty Gas” was delivered to International Gases Inc., subsidiary of StealthGas Inc., and renamed to “Gas Zael”.

The Company’s vessels are managed by Stealth Maritime Corporation S.A. — Liberia (the “Manager”), a related party. The Manager is a company incorporated in Liberia and registered in Greece on May 17, 1999 under the provisions of law 89/1967, 378/1968 and article 25 of law 27/75 as amended by the article 4 of law 2234/94. (See Note 5).

7

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

3. Significant Accounting Policies

A discussion of the Company’s significant accounting policies can be found in the Annual Report on Form 20-F for the fiscal year ended December 31, 2008. There have been no material changes to these policies in the nine month period ended September 30, 2009.

4. Recent Accounting Pronouncements

In March 2008, new guidance was issued with the intent to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years and interim periods within those fiscal years, beginning after November 15, 2008, with early application allowed. The new guidance allows but does not require comparative disclosures for earlier periods at initial adoption. The Company adopted the new guidance and included the required disclosures (Note 14).

On June 16, 2008, new guidance clarified that all unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. The new guidance is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. The Company adopted the new guidance in 2009 and presents earnings per share pursuant to the two-class method (Note 16).

In April 2009, new guidance was issued for interim disclosures about fair value of financial instruments, which amends previous guidance for disclosures about fair value of financial instruments to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. The guidance also require those disclosures in summarized financial information at interim reporting periods. The new guidance is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company adopted the new guidance in the second quarter of 2009 and included the required disclosures (Note 14).

In May 2009, new guidance was issued relating to management’s assessment of subsequent events. This new guidance is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, the new guidance sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The new guidance is effective for fiscal years and interim periods ended after June 15, 2009 and will be applied prospectively. The Company adopted the new guidance in the second quarter of 2009 and included the required disclosures (Note 20).

8

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

4. Recent Accounting Pronouncements — Continued

In June 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, which became the single source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. The Codification’s content will carry the same level of authority, effectively superseding previous guidance. In other words, the GAAP hierarchy will be modified to include only two levels of GAAP: authoritative and non-authoritative. The new guidance is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company adopted the new guidance in the third quarter of 2009 and updated references to U.S. GAAP in these condensed consolidated financial statements to reflect the guidance in the Codification.

In June 2009, new guidance was issued with regards to the consolidation of variable interest entities (“VIE”). This guidance responds to concerns about the application of certain key provisions of the FASB Interpretation, including those regarding the transparency of the involvement with VIEs. The new guidance revises the approach to determining the primary beneficiary of a VIE to be more qualitative in nature and requires companies to more frequently reassess whether they must consolidate a VIE. Specifically, the new guidance requires a qualitative approach to identifying a controlling financial interest in a VIE and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. In addition, the standard requires additional disclosures about the involvement with a VIE and any significant changes in risk exposure due to that involvement. The guidance is effective as of the beginning of the first fiscal year that begins after November 15, 2009 and early adoption is prohibited. The Company is evaluating the impact of this guidance on the Company’s consolidated financial statements.

5. Transactions with Related Party

The Manager provides the vessels with a wide range of shipping services such as chartering, technical support and maintenance, insurance, consulting, financial and accounting services, for a fixed daily fee of $440 per vessel operating under a voyage or time charter or $125 per vessel operating under a bareboat charter and a brokerage commission of 1.25% on freight, hire and demurrage per vessel, effective after an amendment on January 1, 2007 of the Management Agreement. For the nine month periods ended September 30, 2008 and 2009, total brokerage commissions of 1.25% amounted to $1,035,927 and $1,062,906, respectively, ($351,883 and $360,378 for the quarters ended September 30, 2008 and 2009, respectively) and were included in voyage expenses. For the nine month periods ended September 30, 2008 and 2009, the management fees were $3,419,065 and $3,832,670, respectively ($1,161,250 and $1,333,420 for the quarters ended September 30, 2008 and 2009, respectively).

The Manager also acts as a sales and purchase broker of the Company in exchange for a commission fee equal to 1% of the gross sale or purchase price of vessels or companies. For the nine month periods ended September 30, 2008 and 2009, commission fees of $1,340,000 and $575,000, respectively, ($0 and $575,000 for the quarters ended September 30, 2008 and 2009, respectively) were incurred and capitalized to the cost of the vessels. As of September 30, 2008 and 2009 the amounts of $272,750 and $65,000, respectively, were recognized as expenses relating the sale of vessels and are included in the consolidated statements of income under the caption “Net (gain)/loss on sale of vessels”.

The Manager has subcontracted the technical management some of the vessels to two unaffiliated ship-management companies, EMS Ship Management (“EMS”) and Swan Shipping Corporation (Manila). These companies provide technical management to the Company’s vessels for a fixed annual fee per vessel.

In addition to management services, the Company reimburses the Manager for compensation of our Chief Executive Officer, our Chief Financial Officer, our Internal Auditor and our Deputy Chairman and Executive Director for the amounts of $2,286,911 and $913,755 for the nine month periods ended September 30, 2008 and 2009, respectively, ($726,265 and $314,840 for the quarters ended September 30, 2008 and 2009, respectively) and are included in the consolidated statement of income under the caption “General and administrative expenses”.

9

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

5. Transactions with Related Party — Continued

The current account balance with the Manager at December 31, 2008 and at September 30, 2009 was a liability of $2,407,377 and $3,578,190, respectively. The liability represents revenues collected less payments made by the Manager on behalf of the ship-owning companies.

The Company occupies office space that is owned by an affiliated company of the Vafias Group with which it has a new two-year cancelable agreement for the provided office facilities. Rental expense for the nine month periods ended September 30, 2008 and 2009 amounted to $36,932 and $33,580, respectively ($11,661 and $11,694 for the quarters ended September 30, 2008 and 2009, respectively).

6. Inventories

The amounts shown in the accompanying consolidated balance sheets are analyzed as follows:

	December 31, 2008		September 30, 2009
Bunkers		384,481		1,057,061
Lubricants		869,661		1,063,040
Total		1,254,142		2,120,101

7. Advances for Vessels Under Construction and Acquisitions

During the nine month period ended September 30, 2009, the movement of the account, advances for vessels under construction and acquisitions, was as follows:

Balance, December 31, 2008		23,009,597
Advances for vessels under construction	11,375,989
Capitalized interest		451,381
Vessel delivered		(5,750,000	)
Balance, September 30, 2009		29,086,967

The amounts shown in the accompanying consolidated balance sheets as of December 31, 2008 and September 30, 2009 amounting to $23,009,597 and $29,086,967, respectively, represent advance payments to a ship-builder for five LPG carriers under construction and to sellers for two new re-sale M.R. product tankers.

On February 27, 2009, the Company paid the second 10% installment of Yen 1,200,800,000 ($11,375,989) to the shipbuilding yard Mitsubishi Corporation of Japan for the construction of five LPG carriers.

On July 14, 2009, the Company took delivery of the M.R. product tanker “Alpine Endurance”.

As of September 30, 2009, the five LPG carriers under construction and the one re-sale M.R. product tanker have a total purchase price of $187,019,160.

10

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

8. Vessels, net

				Accumulated
	Vessel cost			Depreciation			Net Book Value
Balance, December 31, 2008		608,801,435			(57,030,395	)		551,771,040
Acquisitions		106,083,015			—			106,083,015
Disposal		(7,021,632	)		—			(7,021,632	)
Depreciation for the period		—			(19,828,575	)		(19,828,575	)
Balance, September 30, 2009		707,862,818			(76,858,970	)		631,003,848

The Company acquired the vessels “Gas Natalie”, “Gas Astrid”, “Gas Exelero” and “Alpine Endurance” on January 22, 2009, April 16, 2009, June 30, 2009 and July 14, 2009, respectively, at an aggregate price of $106,083,015.

On May 19, 2009 the Company concluded a memorandum of agreement for the disposal of the vessel “Gas Sophie” to an unaffiliated third party for $6,500,000. The vessel was delivered to her new owners on June 10, 2009 and the Company realized an aggregate loss from the sale of vessel of $791,659 which is included in the Company’s condensed consolidated statement of income.

9. Fair value of acquired time charter

The fair value of the time charters acquired at below / (above) fair market charter rates on the date of vessels’ acquisition is summarized below. These amounts are amortized on a straight-line basis to the end of the charter period. For the nine month periods ended September 30, 2008 and 2009, the amounts of $871,638 and $181,552, respectively ($134,227 and $0 for the quarters ended September 30, 2008 and 2009, respectively), are included in voyage revenues.

				Total
		Fair		accumulated			Amortization
		value of		amortization			for the			Unamortized
		acquired		as at			period ended			balance as at
	End of Time	time		December			September			September
Vessel	Charter	Charter		31, 2008			30, 2009			30, 2009
Fair value of acquired time charter — Liability
Sir Ivor	April 2009		479,000		(426,876	)		(52,124	)		—
Lyne	April 2009		483,000		(430,786	)		(52,214	)		—
Sea Bird II	May 2009		409,000		(331,786	)		(77,214	)		—
Total			1,371,000		(1,189,448	)		(181,552	)		—

10. Deferred Finance Charges

Gross deferred finance charges amounting to $817,344 and $1,936,644 as at December 31, 2008 and September 30, 2009, respectively, represent fees paid to the lenders for obtaining the related loans, net of amortization. For the nine month periods ended September 30, 2008 and 2009, the amortization of deferred financing charges amounted to $84,797 and $147,215, respectively ($31,429 and $91,341 for the quarters ended September 30, 2008 and 2009, respectively) and is included in Interest and finance costs in the accompanying condensed consolidated statements of income.

11. Deferred Income

The amounts shown in the accompanying consolidated balance sheets amounted to $4,776,359 and $1,378,047 represent time charter revenues received in advance as of December 31, 2008 and as of September 30, 2009, respectively.

11

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

12. Customer Deposits

These amounts represent deposits received from charterers as guarantees and comprised as follows:

(a) On September 26, 2006 an amount of $1,320,000 was received from the bareboat charterer of LPG carrier “Ming Long” which is equal to one-year hire. This amount plus any interest earned ($118,478 up to September 30, 2009) will be returned to the charterer at the end of the three years bareboat charter.

(b) On January 30, 2007 an amount of $367,500 was received from the bareboat charterer of LPG carrier “Gas Eternity” which is equal to three-months hire. This amount followed by a subsequent receipt of an nine-months hire on April 12, 2007 amounted to $1,102,500 plus any interest earned ($147,935 up to September 30, 2009) will be returned to the charterer at the end of the three years bareboat charter.

(c) On June 8, 2007 an amount of $449,978 was received from the bareboat charterer of LPG carrier “Gas Monarch” which is equal to three-months hire. This amount followed by a subsequent receipt of an nine-months hire on October 23, 2007 amounted to $1,349,978 plus any interest earned ($98,739 up to September 30, 2009) will be returned to the charterer at the end of the three years bareboat charter.

13. Long-term Debt

	December 31,		Movements					September 30,
	2008		Additions		Repayments			2009
Fortis Bank		56,635,280		—		(4,478,270	)		52,157,010
DnB Nor Bank		80,139,579		—		(8,310,328	)		71,829,251
Scotia Bank		45,867,014		—		(1,877,750	)		43,989,264
Deutche Bank		38,375,000		—		(1,875,000	)		36,500,000
National Bank of Greece		33,240,000		—		(969,500	)		32,270,500
Emporiki Bank		29,437,000		—		(858,583	)		28,578,417
DVB Bank		—		32,200,000		(412,708	)		31,787,292
NIBC		—		26,700,000		—			26,700,000
EFG Eurobank		—		29,250,000		—			29,250,000
Total		283,693,873		88,150,000		(18,782,139	)		353,061,734

On January 30, 2009, the Company entered into a $43,000,000 facility agreement with DnB NOR Bank to partially finance the acquisition of one under construction M.R. type product carrier named “Stealth Argentina” (formerly “Hull No 061”) to be constructed in Korea for delivery in the fourth quarter of 2009. The senior secured term loan facility will be the lesser of the amount of $43,000,000 and the 75% of the vessel’s charter free market value at the time of delivery. The term loan will be drawn down in one tranche upon the delivery of the vessel, which is expected in December 2009, and will be repayable, with the first installment commencing six months after the drawdown in eight consecutive semi-annual installments of $1,700,000 each and eight consecutive semi-annual installments of $1,300,000 each plus a balloon payment of $19,000,000 payable together with the last installment. The term loan’s interest rate is LIBOR plus 2.0%. In addition to a first priority mortgage over the vessel, the term loan is secured by the assignment of the vessels’ insurances, earnings, operating and retention accounts and the guarantee of the ship owning subsidiary.

On February 18, 2009, the Company entered into an up to $33,880,000 facility agreement with DVB Bank SE Nordic Branch to partially finance the acquisition of a second-hand and two under construction LPG carriers, named “Chiltern”, “Gas Astrid” (formerly Hull “K411”) and “Gas Exelero” (formerly Hull “K412”), respectively, by three of the Company’s wholly owned subsidiaries. The senior secured term loan facility will be the lesser of the amount of $33,880,000 and the 70% of the vessels’ charter free market value at the time of delivery. The term loan will be drawn down in two tranches upon the delivery of each vessel.

12

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

13. Long-term Debt — Continued

The first tranche amounted to $19,250,000 was drawn down on April 16, 2009 and the second tranche of $12,950,000 was drawn down on July 1, 2009. The total facility of $32,200,00 will be repayable, with the first installment commencing three months after the drawdown, in twenty consecutive quarterly installments of $628,541 each plus a balloon payment of $19,629,180 payable together with the last installment. The term loan’s interest rate is LIBOR plus 2.85%. In addition to a first priority mortgage over the vessels, the term loan is secured by the assignment of the vessels’ insurances, earnings, operating and retention accounts and the guarantee of the ship owning subsidiary.

On February 19, 2009, the Company entered into a $37,500,000 facility agreement with EFG Eurobank Ergasias S.A. to partially finance the acquisition of the under construction M.R. type product carrier named “Alpine Endurance” (formerly “Hull No. 2139”). Following a revaluation of the vessel on April 13, 2009, the senior secured term loan facility will be the lesser of the amount of $31,500,000 and the 75% of the vessel’s charter free market value at the time of delivery. The term loan, amounted to $29,250,000, was drawn down in one tranche upon the delivery of the vessel, which was delivered on July 14, 2009, and will be repayable, with the first installment commencing three months after the drawdown, in ten consecutive quarterly installments of $650,000 each and thirty consecutive quarterly installments of $420,000 each plus a balloon payment of $12,400,000 payable together with the last installment. The term loan’s interest rate is LIBOR plus 2.50%. In addition to first priority mortgage over the vessel, the term loan is secured by the assignment of this vessel’s insurances, earnings, operating and retention accounts and the guarantee of the ship owning subsidiary.

On May 25, 2009, the Company entered into a $26,700,000 facility agreement with NIBC, secured by the Gas Haralambos, Gas Spirit and the Gas Natalie, three vessels already owned by three of the Company’s wholly-owned subsidiaries. The senior secured term loan facility will be the lesser of the amount of $26,700,000 or 65% of the vessels’ market value at the time of drawdown and was drawn down in three tranches on July 2, 2009 in connection with the part funding of deposits required for vessels under construction as ordered by the Company. The term loan is repayable in five semi-annual installments of $1,637,634 each and five semi-annual installments of $1,077,634 each plus a balloon payment of $13,123,660 payable together with the last installment. The term loan’s interest rate is LIBOR plus 3.00%. In addition to first priority mortgages over the Gas Haralambos, Gas Spirit and the Gas Natalie, the term loan is secured by the assignment of these vessels’ insurances, earnings and operating and retention accounts and the guarantee of the ship owning subsidiaries.

On October 7, 2009, the Company reached an agreement with Deutsche Bank in regard to the facility that finances the “Navig8 Faith”. In consideration of an increase in the interest margin from 0.70% to 2.00% over LIBOR for the remaining term of the facility the Bank has agreed that the minimum asset valuation clause will be reduced from 125% to 105% for the period up to September 30, 2010.

The annual principal payments to be made, for the nine loans, after September 30, 2009 are as follows:

September 30,	Amount
2010		31,612,718
2011		31,612,718
2012		30,632,718
2013		29,652,718
2014		61,992,850
Thereafter		167,558,012
Total		353,061,734

13

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

13. Long-term Debt — Continued

The loan agreements contain financial covenants requiring the Company to ensure that the aggregate market value of each mortgaged vessel at all times exceed between 100% to 130% of the amount outstanding under these facilities, the leverage of the Company defined as Total Debt net of Cash should not exceed 80% of total market value adjusted assets, the Interest Coverage Ratio of the Company defined as EBITDA to interest expense over the preceding six months to be at all times greater than to 2.5:1, and that at least 15% of the Company is to always be owned by members of the Vafias family.

The loans agreements also require the Company to make deposits in retention accounts with certain banks that can only be used to pay the current loan installments. Minimum cash balance requirements are in addition to cash held in retention accounts. These cash deposits amounted to $4,272,439 and $6,627,034 as of December 31, 2008 and September 30, 2009, respectively, and are shown as “Restricted cash” under “Current assets” and “Non current assets” in the condensed consolidated balance sheets. The Company is also restricted, under the loan agreements, from paying cash dividends in amounts that exceed 50% of its free cash flow over the preceeding twelve months.

Total bank loan interest expense for the nine month periods ended September 30, 2008 and 2009 amounted to $7,264,665 and $6,232,499, respectively ($2,223,203 and $2,108,335 for the quarters ended September 30, 2008 and 2009, respectively), and is included in Interest and finance costs in the accompanying condensed consolidated statements of income.

At September 30, 2009, the amount outstanding of $353,061,734 bore an average interest rate (including the margin) of 2.85%.

14. Derivatives and Fair Value Disclosures

On July 16, 2009, the Company entered into an amortizing interest rate swap agreement for a notional amount of $53,330,131 in regard to “DnB” facility. The agreement was effective starting September 9, 2009 and expires on March 9, 2016; under this agreement the Company receives each quarter interest on the notional amount based on the three month LIBOR rate and pays interest based on a fixed interest rate of 4.73%. This agreement replaces the two un-amortizing interest rate swap agreements of $25,000,000 each, dated May 22, 2006 and June 22, 2007, which were due to expire on September 9, 2011 and September 11, 2012, respectively, and which bore fixed interest rates of 5.42% and 5.58%, respectively.

On July 16, 2009, the Company as a condition of its facility with NIBC Bank, entered into an amortizing interest rate swap agreement for a notional amount of $23,900,000. The agreement was effective starting July 20, 2009 and expires on July 20, 2014; under this agreement the Company receives each quarter interest on the notional amount based on the three month LIBOR rate and pays interest based on a fixed interest rate of 2.77%.

The Company uses interest rate swaps for the management of interest rate risk exposure. The interest rate swaps effectively convert a portion of the Company’s debt from a floating to a fixed rate and are designated and qualify as cash flow hedges. The Company is a party to six floating-to-fixed interest rate swaps with various major financial institutions covering notional amounts aggregating approximately $180,017,141 at September 30, 2009 pursuant to which it pays fixed rates ranging from 2.77% to 4.73% and receives floating rates based on the London interbank offered rate (“LIBOR”) (approximately 1.55% at September 30, 2009). These agreements contain no leverage features and have maturity dates ranging from February 2013 to March 2016.

The Company enters into foreign currency forward contracts in order to manage risks associated with fluctuations in foreign currencies. On August 5, 2008 the Company entered into a series of foreign currency forward contracts to hedge part of its exposure to fluctuations of its anticipated cash payments in Japanese Yen relating to certain vessels under construction described in note 7. Under the contracts the Company will convert U.S. dollars to approximately JPY5.4 billion of cash outflows at various dates from 2009 to 2011.

14

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

14. Derivatives and Fair Value Disclosures — Continued

Five of the Company’s swap agreements did not meet hedge accounting criteria. All derivatives are recorded in the consolidated balance sheet at fair value at each period end with the resulting unrealized gains (losses) during the period reflected in “Change of fair value of derivatives” on its consolidated condensed statement of income. The following tables present information on the location and amounts of derivatives fair values reflected in the consolidated condensed balance sheet and with respect to gains and losses on derivative positions reflected in the consolidated condensed statement of income or in the consolidated condensed balance sheet, as a component of accumulated other comprehensive loss.

Tabular disclosure of financial instruments is as follows:

		September 30, 2009
		Asset		Liability
	Balance Sheet Location	Derivatives		Derivatives
Derivatives designated as hedging instruments
Interest Rate Swap Agreements	Non current liabilities — Fair value of derivatives		—		489,378
Total derivatives designated as hedging instruments			—		489,378
Derivatives not designated as hedging instruments
Foreign Currency Contract	Current assets — Fair value of derivatives		4,623		—
Foreign Currency Contract	Non current assets — Fair value of derivatives		7,924,204		—
Interest Rate Swap Agreements	Non current liabilities - Fair value of derivatives		—		11,139,287
Total derivatives not designated as hedging instruments			7,928,827		11,139,287
Total derivatives			7,928,827		11,628,665

The effect of derivative instrument on the consolidated condensed balance sheet as of September 30, 2009 is as follows:

	Nine Month Period
	ended September 30,
	2009
	Amount of Gain / (Loss)
	Recognized in OCL on
	Derivative (Effective
Derivatives designated as hedging instruments	Portion)
Interest Rate Swap Agreement		(112,634	)

The effect of derivative instruments on the consolidated condensed statement of income for the quarter and nine month period ended September 30, 2009 are as follows:

15

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

14. Derivatives and Fair Value Disclosures — Continued

					Nine
					Month
		Quarter			Period
		ended			ended
		September			September
		30, 2009			30, 2009
Derivatives designated as hedging instruments
	Location of Gain / (Loss)	Amount of Gain / (Loss)
	Reclassified from	Reclassified from
	Accumulated OCL into Income	Accumulated OCL into
	(Effective	Income (Effective
	Portion)	Portion)
Interest Rate Swap Agreement	Change in fair value of derivatives		(478,847	)		(790,255	)
	Location of	Amount of Gain / (Loss)
	Gain / (Loss)	Recognized in Income on
	Recognized in Income on Derivative	Derivative (Ineffective
	(Ineffective Portion)	Portion)
Interest Rate Swap Agreement	Change in fair value of derivatives		(157,754	)		281,459
Derivatives not designated as hedging instruments	Location of Gain / (Loss) Recognized
Interest Rate Swap — Fair Value	Change in fair value of derivatives		(1,115,586	)		965,488
Interest Rate Swap — Realized loss	Change in fair value of derivatives		(1,313,499	)		(2,594,636	)
Foreign Currency Contract — Fair Value	Change in fair value of derivatives		5,808,772			278,824
Total loss on derivatives not designated as hedging instruments			3,379,687			(1,350,324	)
Total loss on derivatives			2,743,086			(1,859,120	)

Fair Value of Financial Instruments: The carrying values of 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 long term bank loans bearing interest at variable interest rates approximates the recorded values. Additionally, the Company considers the creditworthiness when determining the fair value of the credit facilities. The carrying value approximates the fair market value of the floating rate loans. The Company’s interest rate swap agreements are based on LIBOR swap rates. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swap and therefore are considered Level 2 items. The fair values of the interest rate swaps determined through Level 2 of the fair value hierarchy are derived principally from or corroborated by observable market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allow value to be determined. The fair value of the interest rate swaps is determined using a discounted cash flow method based on market-base LIBOR swap yield curves. The fair value of the Company’s interest rate swaps and foreign currency contracts was the estimated amount the Company would pay or receive to terminate the swap agreements and contracts at the reporting date, taking into account current interest rates and the prevailing USD/JPY exchange rate, respectively, and the current creditworthiness of the Company and its counter parties.

16

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

14. Derivatives and Fair Value Disclosures — Continued

Fair Value Disclosures: The Company has categorized our assets and liabilities recorded at fair value based upon the fair value hierarchy specified by the relevant guidance. The levels of fair value hierarchy are as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The following table presents the fair values for assets and liabilities measured on a recurring basis categorized into a Level based upon the lowest level of significant input to the valuations as of September 30, 2009:

				Fair Value Measurements Using
				Quoted Prices in					Significant
	Fair Value as			Active Markets for		Significant Other			Unobservable
	of September			Identical Assets		Observable Inputs			Inputs
Description	30, 2009			(Level 1)		(Level 2)			(Level 3)
Assets/(Liabilities):
Foreign Currency Contract		7,928,827			—		4,623			7,924,204
Interest Rate Swap Agreements		(11,628,665	)		—		(11,628,665	)		—
Total		(3,699,838	)		—		(11,624,042	)		7,924,204

The company determined the fair value of the derivative contracts using standard valuation models that are based on market-based observable inputs including forward and spot exchange rates and interest rate curves. Level 2 derivative assets include interest rate swaps and foreign currency forward contracts.

The fair value of the foreign currency forward contracts with various potential levels of profit participating in the Deutsche Bank “Harvest Fund” were determined by using Black-Scholes option valuation model. The inputs into the valuation model included USD/JPY currency forward rates, contract expiration dates, strike price, risk free interest rate and harvest volatility. This asset is included in Level 3 because some of the inputs into the valuation model represent significant unobservable inputs.

The following table presents additional information about assets measured at fair value on a recurring basis and for which we utilized Level 3 inputs to determine fair value:

	Fair Value Measurements Using
	Significant Unobservable Inputs
	(Level 3)
	Foreign Currency Contract
Balance, January 1, 2009		6,514,523
Total unrealized gains Included in earnings		1,409,681
Balance, September 30, 2009		7,924,204
The amount of total gains for the period included in earnings attributable to the change in unrealized gains relating to assets still held at the reporting date		1,409,681

17

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

15. Equity Compensation Plan

The Company’s board of directors has adopted an Equity Compensation Plan (“the Plan”), under which the Company’s employees, directors or other persons or entities providing significant services to the Company or its subsidiaries are eligible to receive stock-based awards including restricted stock, restricted stock units, unrestricted stock, bonus stock, performance stock and stock appreciation rights. The Plan is administered by the Compensation Committee of the Company’s board of directors and the aggregate number of shares of common stock reserved under this plan cannot exceed 10% of the number of shares of Company’s common stock issued and outstanding at the time any award is granted. The Company’s board of directors may terminate the Plan at any time.

As of September 30, 2009 a total of 250,005 restricted shares had been granted under the Plan since the first grant in the third quarter of 2007.

Management has selected the accelerated method allowed by the relevant guidance with respect to recognizing stock based compensation expense for restricted share awards with graded vesting because it believes that this method better matchs expense with benefits received. In addition, non-vested awards granted to non-employees are measured at their then-current fair value as of the financial reporting dates until non-employees complete the service.

The stock based compensation expense for the restricted vested and non-vested shares for the nine month periods ended September 30, 2008 and 2009 amounted to $1,614,511 and $501,387, respectively, ($559,973 and $170,117 for the quarters ended September 30, 2008 and 2009, respectively), and is included in the condensed consolidated statement of income under the caption “General and administrative expenses”.

A summary of the status of the Company’s vested and non-vested restricted shares for the nine month period ended September 30, 2009, is presented below:

				Weighted average grant
				date fair value per non-
	Number of restricted shares			vested share
Non-vested, January 1, 2009		113,005			15.69
Granted		—			—
Vested		(13,003	)		13.52
Forfeited		—			—
Non-vested, September 30, 2009		100,002			15.97

As of September 30, 2009, there was $320,043 of total unrecognized compensation cost related to non-vested restricted shares granted under this Plan. That cost is expected to be recognized over an average period of 0.9 years. The total fair value of shares vested during the nine month period ended September 30, 2009 was $175,853.

15. Earnings per share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share give effect to all potentially dilutive securities. Our non-vested restricted shares were potentially dilutive securities during the nine month period ended September 30, 2009. All of the Company’s shares (including non-vested common stock issued under the Plan) participate equally in dividend distributions and in undistributed earnings. Non-vested common stock does not have a contractual obligation to share in the losses.

18

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

16. Earnings per share — Continued

On January 1, 2009 the Company adopted new guidance which clarified that unvested share-based payment awards that contain rights to receive non forfeitable dividends or dividend equivalents (whether paid or unpaid) are participating securities, and thus, should be included in the two-class method of computing earnings per share (EPS). This standard was applied retroactively to all periods presented and reduced basic EPS by $0 and $0.01 for the quarter and nine month period ended September 30, 2008, respectively.

Dividends declared during the period for non-vested common stock as well as undistributed earnings allocated to non-vested stock are deducted from net income for the purpose of the computation of basic earnings per share in accordance with two-class method as required by the new guidance. The denominator of the basic earnings per common share excludes any non-vested shares as such are not considered outstanding until the time-based vesting restriction has elapsed.

For purposes of calculating diluted earnings per share, dividends declared during the period for non-vested common stock and undistributed earnings allocated to non-vested stock are not deducted from net income as reported since such calculation assumes non-vested common stock is fully vested from the grant date.

The Company calculates the number of shares outstanding for the calculation of basic and diluted earnings per share as follows:

	Quarters ended						Nine Month Periods ended
	September 30,						September 30,
	2008			2009			2008			2009
Numerator
Net income		5,368,857			7,158,746			22,238,075			13,838,741
Less: Dividends declared and undistributed earnings allocated to non-vested shares		(47,168	)		(32,088	)		(121,913	)		(63,618	)
Net income attributable to common shareholders, basic		5,321,689			7,126,658			22,116,162			13,775,123
Denominator
Basic Weighted average shares — outstanding		22,114,105			22,210,108			22,114,105			22,206,440
Effect on dilutive securities:
Non-vested restricted shares		118,976			35,831			80,635			15,890
Diluted Weighted average shares — outstanding		22,233,081			22,245,939			22,194,740			22,222,330
Basic and diluted earnings per share		0.24			0.32			1.00			0.62

17. Dividends Paid

On February 19, 2009 the Company’s Board of Directors declared a cash dividend for 22,310,110 common shares outstanding of $0.1875 per common share, payable on March 9, 2009 to stockholders of record on March 2, 2009. The total amount of $4,183,146 was paid on March 06, 2009.

19

StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

18. Voyage Expenses and Vessel Operating Expenses

The amounts in the accompanying condensed consolidated statements of income are analyzed as follows:

	Quarters ended				Nine Month Periods ended
	September 30,				September 30,
Voyage Expenses	2008		2009		2008		2009
Port expenses		163,985		529,549		350,237		1,238,655
Bunkers		621,903		1,342,532		1,166,263		3,300,982
Commissions charged by third parties		393,445		426,829		1,194,190		1,313,793
Commissions charged by related party		351,883		360,378		1,035,927		1,062,906
Other voyage expenses		95,297		6,704		103,784		168,096
Total		1,626,513		2,665,992		3,850,401		7,084,432
	Quarters ended				Nine Month Periods ended
	September 30,				September 30,
Vessels’ Operating Expenses	2008		2009		2008		2009
Crew wages and related costs		5,099,834		6,150,583		13,824,092		17,336,177
Insurance		405,239		472,821		1,132,133		1,268,390
Repairs and maintenance		1,153,537		981,472		3,339,925		3,564,856
Spares and consumable stores		1,372,206		1,321,869		3,694,444		4,114,573
Miscellaneous expenses		751,198		722,764		1,970,554		1,763,191
Total		8,782,014		9,649,509		23,961,148		28,047,187

19. Commitments and Contingencies

•	From time to time the Company expects to be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company is not aware of any current legal proceedings or claims.
•	In January 2005, the Company entered into a three-year cancelable operating lease for its office facilities that terminated in January 2008. In January 2008, the Company entered into a new two-year cancelable operating lease for its office facilities that terminates in January 2010. Rental expense for the nine month periods ended September 30, 2008 and 2009 amounted to $36,932 and $33,580, respectively ($11,661 and $11,694 for the quarters ended September 30, 2008 and 2009, respectively). In October 2005, the Company entered into a three-year cancelable operating lease for an armored car that terminated in October 2008. In October 2008 the Company entered into a new three-year cancelable operating lease for an armored car that terminates in October 2011. Rental expense for the nine month periods ended September 30, 2008 and 2009 amounted to $38,977 and $35,224, respectively ($12,767 and $12,305 for the quarters ended September 30, 2008 and 2009, respectively) and is recorded in the consolidated statement of income under the caption “General and administrative expenses”.
	Future rental commitments were payable as follows:

September 30,	Office Lease		Car Rent		Total
2010		11,694		49,990		61,684
2011		—		49,990		49,990
2012		—		4,166		4,166
		11,694		104,146		115,840

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StealthGas Inc.
Notes to the condensed consolidated financial statements (unaudited)
(Expressed in United States Dollars)

19. Commitments and Contingencies — Continued

• During the year ended December 31, 2008 the Company entered into memoranda of agreement with third parties to acquire two re-sale M.R. product tankers. As of September 30, 2009, since the acquisition of the one M.R. product tanker, the Company has short-term outstanding commitments for the unpaid balance of the purchase price for one vessel of $51,750,000, net of $5,750,000 already advanced to the sellers in 2008.

• As described in Note 7, as of September 30, 2009 the Company has long-term outstanding commitments for installment payments for five vessels under construction, as follows:

Year ended	Shipbuilding Contracts
2010		7,152,405
2011		59,405,079
2012		40,465,687
Total		107,023,171

As of September 30, 2009, the Company’s long term obligations due under the shipbuilding contracts with Mitsubishi Corporation of Japan totaled to JPY9,606,400,000 were converted to US Dollars based upon the foreign currency forward contracts entered into by the Company and the prevailing USD/JPY exchange rate as at September 30, 2009. The total obligation under these contracts was $107,023,171.

Based upon the above the average prevailing USD/JPY exchange rate used for the calculation of the total obligation was 89.76 JPY to $1.

20. Subsequent Events

The Company has evaluated subsequent events through December 24, 2009, the date the financial statements are issued.

(a)

On October 22, 2009, the Company concluded a memorandum of agreement for the disposal of the vessel “Gas Fortune” to an unaffiliated third party for $5,600,000. The vessel was delivered to her new owners on December 9, 2009 and the Company realized a loss from the sale of the above vessel of $2,500,760 which will be included in the Company’s consolidated statement of income in the fourth quarter of 2009.

(b)

On November 10, 2009, the Company concluded a memorandum of agreement for the disposal of the vessel “Gas Natalie” to an unaffiliated third party for $6,800,000. The vessel is classified as vessel held for sale in the fourth quarter of 2009 and is scheduled to be delivered to her new owners on January 20, 2010. The Company will record an impairment charge of $3,660,390 to write down the carrying amount of the vessel to fair market value less costs to sell and will be included in the Company’s consolidated statement of income in the fourth quarter of 2009.

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EX-99.2

Exhibit 99.2

STEALTHGAS INC.

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

The following management’s discussion and analysis should be read in conjunction with our interim unaudited condensed consolidated financial statements and the notes thereto included elsewhere in this report and our management’s discussion and analysis included in “Item 5. Operating and Financial Review and Prospects” and our audited consolidated financial statements for the years ended December 31, 2006, December 31, 2007 and December 31, 2008 and the notes thereto included in our Annual Report on Form 20-F for the year ended December 31, 2008, filed with the Securities and Exchange Commission, or SEC, on June 18, 2009.

Outlook

In view of the uncertain global economic outlook, below is a short summary of various key factors in regard to the future outlook for the Company.

We primarily operate in and have an approximate 14% market share of the “Handysize” sector of the liquified petroleum gases (“LPG”) shipping market, which is made up of approximately 270 vessels that are 20 years old or less. The LPG Handysize sector is characterized by relative stability and participation of established operators, unlike the dry bulk sector, which is comprised of many operators, including some with limited track records. Accordingly, the reputation and standing of these operators, as well as the significant participation in the industry of the “oil majors,” underpins this core sector of our activity.

We currently employ 39 vessels in the transportation of LPG and three M.R. type product carriers that transport such cargoes as jet fuel, vegetable oils, Naptha and Kerosene. Of these vessels, 8 of the LPG carriers and the three M.R. product carriers are currently on bareboat charters whereby the charterer is responsible for the costs associated with the operating the vessels. Of the 31 remaining ships in our fleet of LPG carriers, as of December 24, 2009, 19 are employed on time charters to high quality charterers, including Shell, Petredec, Statoil and Vitol, with the balance deployed in the spot market. We do not operate any vessels in the drybulk or container shipping sectors. To date, our core LPG sector has not experienced reductions in charter rates and vessel values to the degree experienced in other areas of the shipping industry. Although the product carrier charter market has experienced significant declines in 2009, our product carriers are employed on bare boat charters that range from three years to five and a half years in duration, limiting our exposure to short term charter rate volatility.

As of December 24, 2009, 48% of our anticipated fleet days are covered by period charter contracts for 2010. The spot market continues to operate efficiently with vessels being regularly deployed at sustainable rates and, as noted above, we are currently deploying some of our vessels in this market pending their potential fixing on period employment later in 2009 and early 2010.

We continue to receive support from both our existing and potential new lenders, although the available terms, including margins and fees, are somewhat less favorable than available in the past. The supply of credit to all industries, including the shipping sector, has become much more difficult to obtain and this may impact our ability to sell any older vessels we elect to sell as potential buyers may find it difficult in the current economic climate to arrange financing on any prospective purchase. However, our short term liquidity, debt service and working capital needs in 2010 are not dependent upon any such sales of vessels. We have a committed credit facility in place for one M.R. product carrier, the Stealth Argentina (Hull 061), which is scheduled to be delivered to us by the end of December 2009. In addition, we also have contracted to acquire five additional LPG carriers scheduled to be delivered to us in 2011 and 2012. We expect to finance the remaining purchase price of these vessels with cash generated from operations and borrowings under new credit facilities, which we would need to arrange. See “Liquidity and Capital Resources” below.

The Stealth Argentina, upon her delivery scheduled for December 2009, is scheduled to be deployed on a three year bareboat charter. The remaining vessels described above to be delivered to us from March 2011 until February 2012 remain at this time unfixed in regard to their future employment.

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Results of Operations

Three months ended September 30, 2009 compared to three months ended September 30, 2008

The average number of vessels in our fleet was 42.9 for the three months ended September 30, 2009 compared to 38.7 for the three months ended September 30, 2008.

VOYAGE REVENUES — Voyage revenues for the three months ended September 30, 2009 were $28.4 million compared to $28.9 million for the three months ended September 30, 2008, a decrease of $0.5 million or 1.7%. The average daily TCE (Time Charter Equivalent) rate for the three months ended September 30, 2009 was $6,564, a decrease of $1,117, or 14.5%, compared to an average daily TCE rate of $7,681 for the three months ended September 30, 2008. Total voyage days for our fleet were 3,918 for the three months ended September 30, 2009 compared to 3,550 for the three months ended September 30, 2008. Of the total voyage days for the three months ended September 30, 2009, 2,155, or 55.0%, were time charter days, 1,000, or 25.5%, were bareboat charter days and 763, or 19.5%, were spot voyage days. This compares to 2,051 or 57.8%, time charter days, 1,283, or 36.1%, bareboat charter days and 216, or 6.1%, spot voyage days for the three months ended September 30, 2008.

Our fleet utilization was 99.3% for the three months ended September 30, 2009 compared to 99.8% for the three months ended September 30, 2008.

The decrease in revenue reflects principally the increase in the number of vessels in our fleet trading on the spot market, generally lower rates for the charters under which our vessels were employed and an increase in the number of commercially idle days for some of our vessels due to the slowdown in economic activity compared to the same period in 2008.

VOYAGE EXPENSES — Voyage expenses were $2.7 million for the three months ended September 30, 2009 compared to $1.6 million for the three months ended September 30, 2008. Voyage expenses consisted of bunker charges in the amount of $1.3 million, port expenses of $0.5 million, commissions charged by third parties of $0.4 million, commissions charged by related parties of $0.4 million, and other voyage expenses of $0.006 million. For the three months ended September 30, 2008, the same charges were $0.6 million, $0.2 million, $0.4 million, $0.4 million and $0.1 million. Voyage expenses increased by $1.1 million or 68.8% primarily due to the increase in the number of spot charter days on which the vessels were deployed during the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Under spot market voyage charters, we are responsible for all the above types of voyage expenses, whereas under time and bareboat charters we are not responsible for bunker, port and canal expenses.

VESSEL OPERATING EXPENSES — Vessel operating expenses were $9.6 million for the three months ended September 30, 2009 and were $8.8 million for the three months ended September 30, 2008, an increase of $0.8 million, or 9.1%, due primarily to the increase in the average number of vessels in our fleet compared to the three months ended September 30, 2008 and higher crew wages. For the three months ended September 30, 2009, crew wages totaled $6.2 million compared to $5.1 million in the three months ended September 30, 2008. Due to strong demand for and limited supply of well qualified crew, we expect continued upward pressure on crew wages.

DRY DOCKING COSTS — Dry docking costs in the three months ended September 30, 2009 were $0.5 million compared to $0.05 million in the three months ended September 30, 2008. These expenses reflect the costs related to dry docking the Gas Shanghai during the three months ended September 30, 2009 and the Gas Renovatio during the three months ended September 30, 2008.

MANAGEMENT FEES — Management fees were $1.3 million for the three months ended September 30, 2009 and were $1.2 million for the three months ended September 30, 2008, an increase of $0.1 million, or 8.3%, reflecting the increase in the average number of vessels in our fleet. There was no increase in the amount of management fees per day per vessel; these remained at $440 per day for vessels under time or spot charter and $125 per day for those ships under bareboat charter.

GENERAL AND ADMINISTRATIVE EXPENSES — General and administrative expenses were $1.0 million for the three months ended September 30, 2009 and were $1.7 million for the three months ended September 30, 2008, a decrease of $0.7 million, or 41.2%, due primarily to lower accountancy and counsel fees and the non-accrual for any

2

bonus for 2009 compared to an accrual of $0.4 million for the three months ended September 30, 2008. This accrual was subsequently reversed in the fourth quarter of 2008.

DEPRECIATION — Depreciation expenses for the 42.9 average number of vessels in our fleet for the three months ended September 30, 2009 were $7.1 million compared to $6.0 million for the 38.7 average number of vessels in our fleet for the three months ended September 30, 2008, an increase of $1.1 million or 18.3%.

INTEREST AND FINANCE COSTS, NET — Net interest and finance costs were $2.3 million for the three months ended September 30, 2009 and were $2.4 million for the three months ended September 30, 2008, a decrease of $0.1 million, or 4.2%, resulting primarily from lower prevailing interest rates.

CHANGE IN FAIR VALUE OF DERIVATIVES — For the three months ended September 30, 2009, we had a non-cash profit on derivatives relating to Japanese Yen/United States dollar Foreign Exchange forward hedge agreements of $4.5 million and a cash loss of $1.8 million based on the estimated value and cost of interest rate swaps, with DnB NOR Bank ASA, Fortis Bank and Deutsche Bank compared to a non-cash loss on derivatives of $0.9 million and cash loss of $1.1 million for the three months ended September 30, 2008.

INTEREST INCOME — Net interest income was $0.04 million for the three months ended September 30, 2009 compared to $0.07 million for the three months ended September 30, 2008.

FOREIGN EXCHANGE LOSS — for the three months ended September 30, 2009 we incurred a foreign exchange loss of $0.06 million compared to a loss of $0.012 million for the three months ended September 30, 2008.

NET INCOME — As a result of the above factors, net income was $7.2 million for the three months ended September 30, 2009, representing an increase of $1.8 million, or 33.3%, from net income of $5.4 million for the three months ended September 30, 2008.

Nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.

The average number of vessels in our fleet was 41.8 for the nine months ended September 30, 2009 compared to 38.2 for the nine months ended September 30, 2008.

VOYAGE REVENUES — Voyage revenues for the nine months ended September 30, 2009 were $84.7 million compared to $84.4 million for the nine months ended September 30, 2008, an increase of $0.3 million or 0.4%. The average daily TCE rate for the nine months ended September 30, 2009 was $6,840, a decrease of $907, or 11.7%, compared to an average daily TCE rate of $7,747 for the nine months ended September 30, 2008. Total voyage days for our fleet were 11,342 for the nine months ended September 30, 2009 compared to 10,396 for the nine months ended September 30, 2008. Of the total voyage days for the nine months ended September 30, 2009, 5,861, or 51.7%, were time charter days, 3,474, or 30.6%, were bareboat charter days and 2,007, or 17.7%, were spot voyage days. This compares to 6,310, or 60.7%, time charter days, 3,765, or 36.2%, bareboat charter days and 321, or 3.1%, spot voyage days for the nine months ended September 30, 2008. Our fleet utilization was 99.5% for the nine months ended September 30, 2009 compared to 99.3% for the nine months ended September 30, 2008.

The minimal growth in revenue despite the increase in the average number of vessels in our fleet from 38.2 vessels in the nine months ended September 30, 2008 to 41.8 vessels in the nine months ended September 30, 2009, reflects primarily the generally lower time charter rates available during the period and the increase in the number of spot charter voyage days undertaken by the fleet, plus an increased level of commercial downtime due to the slowdown in worldwide economic activity.

During the nine months ended September 30, 2009, the Gas Arctic, the Gas Ice, the Birgit Kosan, the Gas Marathon, the Gas Prophet (now renamed the M.T. Ming Long), the Sir Ivor, the Lyne, the Batangas (now renamed the Gas Pasha), the Gas Eternity, the Sea Bird II, the Chiltern, the Gas Monarch, the Gas Monarch, the Gas Natalie, the Navig8 Fidelity, the Navig8 Faith and the Alpine Endurance were employed on bareboat charters. Bareboat charters are generally for lower monthly rates, however, under bareboat charters we are not responsible for voyage or operating expenses or cash associated with drydocking or repairs. The prevailing charter rates in the handy size LPG sector for the nine months ended September 30, 2009 were lower than the nine months ended September 30, 2008.

3

VOYAGE EXPENSES — Voyage expenses, were $7.1 million for the nine months ended September 30, 2009 compared to $3.9 million for the nine months ended September 30, 2008. Voyage expenses consisted of bunker charges in the amount of $3.3 million, port expenses of $1.2 million, commissions charged by third parties of $1.3 million, commissions charged by related parties of $1.0 million and other voyage expenses were $0.2 million. During the nine months ended September 30, 2008, the same expenses were $1.2 million, $0.4 million, $1.2 million, $1.0 million and $0.1 million, respectively. Overall, the $3.2 million increase in voyage expenses for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 resulted from the increased number of spot voyage charter days undertaken by the fleet during the period. Under spot charters, we are responsible for all of the above types of voyage expenses, whereas under time and bareboat charters we are not responsible for bunker, port and canal expenses.

VESSEL OPERATING EXPENSES — Vessel operating expenses were $28.0 million for the nine months ended September 30, 2009 and were $24.0 million for the nine months ended September 30, 2008, an increase of $4.0 million, or 16.7%, due primarily to the increase in the average number of vessels in our fleet compared to the nine months ended September 30, 2008 and higher crew wages. For the nine months ended September 30, 2009, crew wages totaled $17.3 million compared to $13.8 million in the nine months ended September 30, 2008. Due to strong demand for and limited supply of well qualified crew, we expect continued upward pressure on crew wages. Other significant changes in vessel operating expenses were spares and consumable stores, which increased from $3.7 million to $4.1 million for the nine months ended September 30, 2009.

DRY DOCKING COSTS — Dry docking costs in the nine months ended September 30, 2009 were $0.8 million, which were related to the Gas Shanghai and the Gas Icon compared to dry docking costs of $0.5 million for the nine months ended September 30, 2008 relating to the Gas Renovatio.

MANAGEMENT FEES — Management fees were $3.8 million for the nine months ended September 30, 2009 compared to $3.4 million for the nine months ended September 30, 2008, an increase of $0.4 million, or 11.8%, reflecting the increased number of vessels in the fleet. There was no increase in the amount of management fees per day per vessel; these remained at $440 per day for vessels under time or spot charter and $125 per day for those ships under bareboat charter.

GENERAL AND ADMINISTRATIVE EXPENSES — General and administrative expenses were $2.8 million for the nine months ended September 30, 2009 compared to $5.1 million for the nine months ended September 30, 2008, a decrease of $2.3 million, or 45.1%. This decrease was due primarily to lower auditing and counsel fees and the non-accrual for any bonus provision compared to an accrual of $1.3 million for the nine months ended September 30, 2008. This accrual was subsequently reversed in the fourth quarter of 2008.

DEPRECIATION — Depreciation expenses for the 41.8 average number of vessels in our fleet for the nine months ended September 30, 2009 were $19.8 million compared to $17.1 million for the 38.2 average number of vessels in our fleet for the nine months ended September 30, 2008, an increase of $2.7 million, or 15.8%.

INTEREST AND FINANCE COSTS — Interest and finance costs were $6.5 million for the nine months ended September 30, 2009 compared to $7.6 million for the nine months ended September 30, 2008, a decrease of $1.1 million, or 14.5%, resulting primarily from the decreased level of prevailing interest rates despite the increased level of indebtedness due to the increased number of vessels in our fleet.

CHANGE IN FAIR VALUE OF DERIVATIVES — For the nine months ended September 30, 2009, we had a non-cash profit on derivatives relating to Japanese Yen/United States dollar Foreign Exchange forward hedge agreements of $1.5 million and a cash loss of $3.4 million on derivatives based on the estimated value of our interest rate swap arrangements, compared to a non-cash loss of $1.4 million and a cash loss of $1.1 million for the nine months ended September 30, 2008.

INTEREST INCOME — Net interest income was $0.2 million for the nine months ended September 30, 2009, compared to $0.5 million for the nine months ended September 30, 2008.

FOREIGN EXCHANGE LOSS — For the nine months ended September 30, 2009, we incurred a foreign exchange loss of $0.14 million compared to a loss of $0.2 million for the nine months ended September 30, 2008.

4

NET INCOME — As a result of the above factors, net income, including an $0.8 million loss on the sale of the Gas Sophie, was $13.8 million for the nine months ended September 30, 2009, representing a decrease of $8.4 million, or 37.8%, from net income of $22.2 million, which included the $1.7 million gain on the sales of the Gas Renovatio, the Gas Nemesis and the Gas Oracle, for the nine months ended September 30, 2008.

Liquidity and Capital Resources

Since our inception, our principal source of funds has been equity provided by our affiliates, proceeds from our initial public offering, proceeds from our follow-on public offering concluded early in the third quarter of 2007, cash generated by our operations and bank borrowings. Our principal use of funds has been to acquire our vessels, to maintain the quality of our vessels, to comply with international standards, laws and regulations and to fund working capital requirements.

As of September 30, 2009, we had cash and cash equivalents of $30.9 million and $5.1 million of restricted cash classified as current assets. As of December 24, 2009 we had $346 million of outstanding indebtedness, of which $31.6 million was payable within 12 months of December 24, 2009.

Our medium-term liquidity needs between now and the second quarter of 2012 primarily relate to the purchase of the five LPG carriers and one M.R. product carrier for which we had contracted as of December 24, 2009 and for which we have scheduled future payments through the delivery of the final contracted vessel during 2012 aggregating $158.8 million as of December 24, 2009. Of the $158.8 million, $107.0 million or approximately Japanese Yen 9.6 billion, concern the five LPG carriers while the remaining $51.8 million is for the one product carrier.

We funded the purchase price for three liquefied petroleum gas carriers, the Gas Natalie, the Gas Astrid and the Gas Exelero, and one product carrier, the Alpine Endurance, delivered to us during 2009, with cash generated by our operations and as well as borrowings under our credit facilities. We expect to fund the remaining acquisition cost of the five LPG carriers and one M.R. product carrier for which we had contracted as of December 24, 2009, which in aggregate amounts to $158.8 million payable between December 2009 and May 2012, with borrowings under an existing credit facility having $43.0 million capacity as of December 24, 2009 and $115.8 million of cash generated from operations and borrowings under new credit facilities, which we would need to arrange. Of the $158.8 million in installments due for contracted vessels, approximately $58.9 million is payable prior to September 30, 2010.

Overall we will continue to rely upon operating cash flows and bank borrowings, as well as future financings, to fund any additional vessel acquisitions we make in the future. As noted above, as of December 24, 2009, we had approximately $43.0 million of availability under our existing credit facilities. Of our current fleet of 42 vessels, 7 of our vessels, the Gas Prodigy, the Gas Chios, the Gas Crystal, the Seabird II, the Gas Evoluzione, the Gas Zael and the Catterick are unencumbered. As a result, we may incur additional indebtedness secured by certain or all of these unencumbered vessels. We expect to use these resources, together with cash from operations, to fund a portion of the purchase price for our contracted vessels, as well as for additional vessel acquisitions. In addition, we may in the future finance additional growth through equity offerings.

Our Board of Directors’ recently determined to suspend the payment of cash dividends as a result of market conditions in the international shipping industry and the capital commitments that we are contracted to fulfill. Our management along with our Board of Directors believes the suspension of dividends is a prudent action to help preserve and maintain adequate levels of liquidity during the currently negative world economic conditions.

We believe that, unless there is a major and sustained downturn in market conditions applicable to our specific shipping industry segment, our internally generated cash flows and the borrowings under existing credit facilities will be sufficient to fund our operations, including working capital requirements, over the next 12 months.

Since the formation of the Company in October 2004, our subsequent initial public offering in October 2005 and our follow-on public offering completed early in the third quarter of 2007, we have continued to implement our strategy of growth by acquisition of LPG carriers, to become a market leader within the handysize (3,000 to 8,000 cbm) LPG carrier sector, as well as entering the product carrier sector, using the resources outlined above.

5

For a description of our credit facilities please refer to the discussion under the heading “—Loan Agreements” below.

Loan Agreements

We currently have loan agreements with Fortis Bank, DnB NOR Bank ASA, Scotiabank, Deutsche Bank, the National Bank of Greece, Emporiki Bank, DVB Bank and NIBC Bank including a credit facility with DnB NOR Bank ASA to part finance the acquisition of the Stealth Argentina a M.R. Type Product Carrier due to be delivered to us in December 2009. For a full description of our credit facilities see “Item 5. Operating and Financial Review and Prospects — Loan Agreements” of our Annual Report on Form 20-F for the year ended December 31, 2008, filed with the SEC on June 18, 2009.

Our credit facilities contain financial covenants requiring us to:

• ensure that our leverage, which is defined as total debt net of cash/total market adjusted assets, does not at any time exceed 80%;

• maintain a ratio of the aggregate market value of the vessels securing the loan to the principal amount outstanding under such loan at all times in excess of (i) 130% under our loan agreement with Fortis Bank-Athens Branch and NIBC Bank, and (ii) 125% under our loan agreements with DnB NOR Bank ASA, Emporiki Bank, National Bank of Greece, Scotiabank (100% in the case of the facility related to a product carrier), DVB Bank and Deutsche Bank (105% until September 30, 2010).

• ensure that our ratio of EBITDA to interest expense over the preceding six months is at all times more than 2.5 times; and

• ensure that members of the Vafias family at all times own at least 15% of our outstanding capital stock.

In addition, our loan agreements with Fortis Bank-Athens Branch and DnB NOR Bank ASA require us to maintain a minimum cash balance equivalent to six months interest in a pledged account with the lender at all times; our loan agreement with Scotiabank requires us to maintain a cash balance equivalent of $200,000 for each vessel mortgaged to Scotiabank at all times; our loan agreement with Emporiki Bank requires us to maintain an aggregate cash balance equivalent of $800,000 with Emporiki Bank at all times, our loan agreement with Deutsche Bank requires us to maintain a cash equivalent of $200,000 at all times, our loan agreement with EFG Eurobank requires us to maintain a cash balance equivalent of $200,000 at all times and our loan agreement with NIBC Bank requires us to maintain a cash balance equivalent of $250,000 for each vessel mortgaged to them. Under our credit facilities, we are also restricted from paying cash dividends in amounts that exceed 50% of our consolidated free cash flow on a rolling 12 months basis.

On October 7, 2009, the Company reached an agreement with Deutsche Bank in regard to the facility that finances the “Navig8 Faith”. In consideration of an increase in the interest margin from 0.70% to 2.00% over LIBOR for the remaining term of the facility the Bank has agreed that the minimum asset valuation clause will be reduced from 125% to 105% for the period up to September 30, 2010.

Our credit facility agreements contain customary events of default with respect to us and our applicable subsidiaries, including upon the non-payment of amounts due under these credit facilities; breach of covenants; matters affecting the collateral under such facility; and the occurrence of any event that in light of which, the lenders consider there is a significant risk that the borrowers are, or will later become, unable to discharge their liabilities as they fall due.

Our credit facilities provide that upon the occurrence of an event of default, the lenders may require that all amounts outstanding under our credit facilities be repaid immediately and terminate our ability to borrow under any existing undrawn committed credit facility and foreclose on the mortgages over the vessels and any other related collateral. Our loan agreements also contain cross-default clauses.

6

Interest Rate Swaps

We have entered into interest rate swap agreements converting floating interest rate exposure into fixed interest rates in order to hedge our exposure to fluctuations in prevailing market interest rates. See Note 14, Derivatives and Fair Value Disclosures to our condensed consolidated financial statements (unaudited) included in this report.

Foreign Currency Contracts

We have entered into forward foreign exchange contracts covering Japanese Yen 4.8 billion, which represents approximately 50% of the remaining amounts to be paid under our Japanese Yen-denominated new-building construction contracts with Mitsubishi Corporation of Japan at an overall rate of JPY99.76 to the US$1.00. The remaining amount payable in Japanese Yen under these new-building construction contracts are currently unhedged. As our forward foreign exchange contracts do not qualify for hedge accounting any marked to market fluctuations in their value will be recognized in our statement of income. See Note 14, Derivatives and Fair Value Disclosures to our condensed consolidated financial statements (unaudited) included in this report.

Cash Flows

NET CASH PROVIDED BY OPERATING ACTIVITIES — was $32.1 million for the nine months ended September 30, 2009 compared to $37.0 million for the nine months ended September 30, 2008, a decrease of $4.9 million, or 13.2%. This represents the net amount of cash, after expenses, generated by the chartering activities of our vessels, including the loss on the sale of the Gas Sophie. Stealth Maritime, on our behalf, collects our chartering revenues and pays our expenses.

NET CASH USED IN INVESTING ACTIVITIES — was $107.2 million for the nine months ended September 30, 2009 compared to $136.7 million for the nine months ended September 30, 2008, a decrease of $29.5 million, or 21.6%. The primary reason for the decrease was the slowdown in the rate of vessels being acquired by the company during the first nine months of 2009 whereby $106.1 million was spent on vessel acquisitions as compared to $145.2 million during the nine months ended September 30, 2008. There was also a reduction in the amount used to place deposits upon vessels to be purchased in the future with $6.1 million being spent during the nine months ended September 30, 2009 as compared to $22.9 million in the same period of 2008.

NET CASH PROVIDED BY FINANCING ACTIVITIES — was $64.1 million for the nine months ended September 30, 2009, reflecting primarily the decision to suspend the payment of a dividend in the first quarter of 2009 and an increased level of net indebtedness of $69.4 million due to the financing of the acquisition of the Gas Natalie, the Gas Exelero, the Gas Astrid and the Alpine Endurance and the drawdown of the $26.7 million working capital facility with NIBC for the nine months ended September 30, 2009. For the nine months ended September 30, 2008, net cash provided by financing activities was $83.1 million, which reflects indebtedness incurred in regard to the increased number of vessels in our fleet for the nine months ended September 30, 2008. Net cash provided by financing activities was less for the nine months ended September 30, 2009 than the same period in 2008 primarily due to comparatively fewer vessels being purchased, for which we needed to arrange financing during the nine months ended September 30, 2009 than the nine months ended September 30, 2008.

CAPITALIZATION

     The table below sets forth our consolidated capitalization as of September 30, 2009:

• on an actual basis; and

• on an as adjusted basis to reflect aggregate scheduled loan repayments of $7.0 million until December 24, 2009.

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Other than these adjustments, there has been no material change in our capitalization from debt or equity issuances, recapitalizations or special dividends since September 30, 2009.

	As of September 30, 2009
In U.S. dollars	Actual			As Adjusted
Long-term secured debt obligations (including current portion)	$	353,061,734		$	346,058,950
Stockholders’ equity:
Common stock, $0.01 par value per share, 100,000,000 shares authorized; 22,310,110 shares issued and outstanding actual and 22,310,110 shares issued and outstanding as adjusted		223,101			223,101
Additional paid-in capital		284,027,628			284,027,628
Retained earnings		44,565,784			44,565,784
Accumulated other comprehensive (loss)		(924,840	)		(924,840	)
Total stockholders’ equity		327,891,673			327,891,673
Total capitalization	$	680,953,407		$	673,950,623

Off Balance Sheet Arrangements

     We do not have any off balance sheet arrangements.

Forward-Looking Statements

Matters discussed in this report may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although StealthGas Inc. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, StealthGas Inc. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charterhire rates,, vessel values, and charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry-docking, changes in StealthGas Inc.’s operating expenses, including bunker prices, dry-docking and insurance costs, our ability to obtain financing and comply with covenants in our financing arrangements, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

Risks and uncertainties are further described in reports filed by StealthGas Inc. with the SEC.

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