Paragon Shipping Inc. Reports Third Quarter And Nine Months Ended September 30, 2013 Results

 Paragon Shipping Inc. Reports Third Quarter And Nine Months Ended September
                               30, 2013 Results

- Net revenue of $13.4 million, up by 3% year over year in the third quarter
of 2013

- Adjusted EBITDA of $5.7 million in the third quarter of 2013

- Adjusted net loss of $409,676, or $0.04 per common share in the third
quarter of 2013

- Completed a $34.5 million equity offering and subsequently purchased two
Eco-Design Ultramax newbuilding drybulk carriers

PR Newswire

ATHENS, Greece, Nov. 7, 2013

ATHENS, Greece, Nov. 7, 2013 /PRNewswire/ -- Paragon Shipping Inc. (NASDAQ:
PRGN) ("Paragon Shipping" or the "Company"), a global shipping transportation
company specializing in drybulk cargoes, announced today its results for the
third quarter and nine months ended September 30, 2013.

Financial Highlights

(Expressed in United States Dollars where applicable)
                       Quarter Ended Quarter Ended Nine Months   Nine Months
                                                   Ended         Ended
                       September 30, September 30,
                       2012          2013          September 30, September 30,
                                                   2012          2013
Average number of      12.0          13.0          10.9          12.9
vessels
Time charter
equivalent rate (TCE)  11,574        9,274         12,418        10,360
^(1)
Net Revenue            12,929,126    13,353,696    37,355,838    40,685,326
EBITDA ^(1)            (12,251,606)  (1,431,108)   719,953       7,316,386
Adjusted EBITDA ^(1)   6,395,056     5,657,733     20,068,979    14,959,187
Net Loss               (18,785,001)  (7,498,517)   (17,885,810)  (10,992,587)
Adjusted Net (Loss) /  (138,339)     (409,676)     1,463,216     (3,349,786)
Income ^(1)
Loss per common share  (3.08)        (0.65)        (2.93)        (0.97)
basic and diluted ^(2)
Adjusted (Loss) /
Earnings per common    (0.02)        (0.04)        0.24          (0.30)
share basic and
diluted ^(1), (2)

    Please see the table at the back of this release for a reconciliation of
    TCE to Charter Revenue, EBITDA and Adjusted EBITDA to Net Income / (Loss),
    Adjusted Net Income / (Loss) to Net Income / (Loss) and Adjusted Earnings
(1) / (Loss) per common share to Earnings / (Loss) per common share, the most
    directly comparable financial measures calculated and presented in
    accordance with generally accepted accounting principles in the United
    States ("U.S. GAAP").
    All per-share figures in this table and in our financial results reported
(2) below have been adjusted to give effect to the 10-for-1 reverse stock
    split that became effective on November 5, 2012.

Management Commentary
Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive
Officer of Paragon Shipping, stated, "The third quarter of 2013 was
transformative for Paragon as we switched our focus to growth and execution of
our strategy so we can take full advantage of the improvements we are seeing
in the drybulk market."

Mr. Bodouroglou continued, "During the quarter, we successfully completed a
$34.5 million equity offering, and acquired two Eco-Design Ultramax
newbuilding drybulk carriers that are expected to be delivered in 2014. In
addition, Box Ships proceeded with the full repayment of the outstanding
balance of the loan provided by the Company in October, which further improves
our liquidity and cash position."

Mr. Bodouroglou concluded, "During the third quarter and into the fourth
quarter, we have witnessed significant strength in the drybulk market,
starting with the Capes in August, and followed by Panamaxes in late
September. We believe that the worst is behind us, although we expect that
going forward the market will continue to be volatile. Overall, we are better
positioned to capture the anticipated upcoming recovery of the drybulk market
with a significantly lower cost structure and efficient operations."

Third Quarter 2013 Financial Results
Gross charter revenue for the third quarter of 2013 was $14.1 million,
compared to $13.7 million for the third quarter of 2012. The Company reported
a net loss of $7.5 million, or $0.65 per basic and diluted share, for the
third quarter of 2013, calculated based on a weighted average number of basic
and diluted shares outstanding for the period of 11,307,194 and reflecting the
impact of the non-cash items discussed below. For the third quarter of 2012,
the Company reported net loss of $18.8 million, or $3.08 per basic and diluted
share, calculated based on a weighted average number of basic and diluted
shares of 5,960,610.

Excluding all non-cash items described below, the adjusted net loss for the
third quarter of 2013 was $0.4 million, or $0.04 per basic and diluted share,
compared to adjusted net loss of $0.01 million, or $0.02 per basic and diluted
share, for the third quarter of 2012.

EBITDA for the third quarter of 2013 was negative $1.4 million, compared to
negative $12.3 million for the third quarter of 2012. EBITDA for the third
quarter of 2013 was calculated by adding the net loss of $7.5 million to net
interest expense, including interest expense from interest rate swaps, and
depreciation that in the aggregate amounted to $6.1 million. Adjusted EBITDA,
excluding all non-cash items described below, was $5.7 million for the third
quarter of 2013, compared to $6.4 million for the third quarter of 2012.

The Company operated an average of 13.0 vessels during the third quarter of
2013, earning an average TCE rate of $9,274 per day, compared to an average of
12.0 vessels during the third quarter of 2012, earning an average TCE rate of
$11,574 per day.

Total adjusted operating expenses for the third quarter of 2013 equaled $7.8
million, or approximately $6,510 per vessel per day, which include vessel
operating expenses, management fees, general and administrative expenses and
dry-docking costs, and exclude share-based compensation for the period of $0.9
million. For the third quarter of 2012, total adjusted operating expenses were
$7.5 million, or approximately $6,832 per vessel per day, which include the
items mentioned above, and exclude share-based compensation of $0.8 million.

In the third quarter of 2013, the Company recorded a $2.3 million gain from
vessel early redelivery, mainly representing the total cash compensation, net
of commissions, received due to the early termination of the M/V Coral Seas
and M/V Deep Seas time charter agreements with Morgan Stanley Capital Group
Inc.

As of September 30, 2013, the Company owned approximately 13.8% of the
outstanding common stock of Box Ships Inc. (NYSE:TEU) ("Box Ships"), a former
wholly-owned subsidiary of the Company which successfully completed its
initial public offering in April 2011. The investment in Box Ships is
accounted for under the equity method and is separately reflected on the
Company's unaudited condensed consolidated balance sheets. For the third
quarter of 2013, the Company recorded income of $0.3 million, representing its
share of Box Ships' net income for the period, compared to $0.5 million for
the third quarter of 2012. In the third quarter of 2013, we received a cash
amount of $0.4 million, representing dividend distributions from Box Ships,
compared to $0.9 million received in the third quarter of 2012.

As of September 30, 2013, the difference between the fair value and the book
value of the Company's investment in Box Ships was considered as other than
temporary. Therefore, the investment was impaired and the Company recorded a
non-cash loss of $5.4 million in the third quarter of 2013, which is presented
as "Loss on investment in affiliate" in the unaudited condensed consolidated
statements of comprehensive loss at the end of this release.

As of September 30, 2013, the change in the fair value of the 65,896 shares of
Korea Line Corporation ("KLC"), which the Company received as part of the
settlement agreement entered into with KLC in September 2011 and pursuant to
the amended KLC rehabilitation plan that was approved by the Seoul Central
District Court on March 28, 2013, was considered as other than temporary, and
therefore the Company recorded a non-cash loss of $1.0 million in the third
quarter of 2013.

Third Quarter 2013 Non-cash Items
The Company's results for the three months ended September 30, 2013 included
the following non-cash items:

  oLoss on investment in affiliate of $5.4 million, or $0.46 per basic and
    diluted share.
  oLoss on marketable securities of $1.0 million, or $0.08 per basic and
    diluted share.
  oAn unrealized gain on interest rate swaps of $0.2 million, or $0.01 per
    basic and diluted share.
  oNon-cash expenses of $0.9 million, or $0.08 per basic and diluted share,
    relating to share based compensation to the management company amounting
    to $0.7 million and to the amortization of the compensation cost
    recognized for non-vested share awards issued to executive officers,
    directors and employees amounting to $0.2 million.

In the aggregate, these non-cash items decreased the Company's earnings by
$7.1 million, which represents a $0.61 decrease in earnings per basic and
diluted share, for the three months ended September 30, 2013.

Nine months ended September 30, 2013 Financial Results
Gross charter revenue for the nine months ended September 30, 2013 was $43.0
million, compared to $39.5 million for the nine months ended September 30,
2012. The Company reported a net loss of $11.0 million, or $0.97 per basic and
diluted share, for the nine months ended September 30, 2013, calculated based
on a weighted average number of basic and diluted shares outstanding for the
period of 11,114,617 and reflecting the impact of the non-cash items discussed
below. For the nine months ended September 30, 2012, the Company reported a
net loss of $17.9 million, or $2.93 per basic and diluted share, calculated
based on a weighted average number of basic and diluted shares of 5,929,115.

Excluding all non-cash items described below, the adjusted net loss for the
nine months ended September 30, 2013 was $3.3 million, or $0.3 per basic and
diluted share, compared to adjusted net income of $1.5 million, or $0.24 per
basic and diluted share, for the nine months ended September 30, 2012.

EBITDA for the nine months ended September 30, 2013 was $7.3 million, compared
to $0.7 million for the nine months ended September 30, 2012. EBITDA for the
nine months ended September 30, 2013 was calculated by adding the net loss of
$11.0 million to net interest expense, including interest expense from
interest rate swaps, and depreciation that in the aggregate amounted to $18.3
million. Adjusted EBITDA, excluding all non-cash items described below, was
$15.0 million for the nine months ended September 30, 2013, compared to $20.1
million for the nine months ended September 30, 2012.

The Company operated an average of 12.9 vessels during the nine months ended
September 30, 2013, earning an average TCE rate of $10,360 per day, compared
to an average of 10.9 vessels during the nine months ended September 30, 2012,
earning an average TCE rate of $12,418 per day.

For the nine months ended September 30, 2013, the Company recorded a $2.3
million gain from vessel early redelivery, mainly representing the total cash
compensation, net of commissions, received due to the early termination of the
M/V Coral Seas and M/V Deep Seas time charter agreements with Morgan Stanley
Capital Group Inc.

Total adjusted operating expenses for the nine months ended September 30, 2013
equaled $27.3 million, or approximately $7,757 per vessel per day, which
include vessel operating expenses, management fees, general and administrative
expenses and dry-docking costs, and exclude share-based compensation for the
period of $1.6 million. For the nine months ended September 30, 2012, total
adjusted operating expenses were $20.9 million, or approximately $6,982 per
vessel per day, which include the items mentioned above, and exclude
share-based compensation of $2.4 million.

For the nine months ended September 30, 2013, the Company recorded income of
$1.3 million, representing its share of Box Ships' net income for the period,
compared to $1.9 million for the nine months ended September 30, 2012. In the
nine months ended September 30, 2013, we received a cash amount of $1.6
million, representing dividend distributions from Box Ships, compared to $3.0
million received in the nine months ended September 30, 2012.

In the nine months ended September 30, 2013, the Company recorded a non-cash
loss of $0.4 million relating to the dilution effect from the Company's
non-participation in the public offering by Box Ships of 4,000,000 of Box
Ships' common shares, which was completed on March 18, 2013. In addition, as
of September 30, 2013, the difference between the fair value and the book
value of the Company's investment in Box Ships was considered to be other than
temporary and therefore, the investment was impaired and the Company recorded
a non-cash loss of $5.4 million. Both items are included in "Loss on
investment in affiliate" in the unaudited condensed consolidated statements of
comprehensive loss at the end of this release.

Pursuant to the amended KLC rehabilitation plan, in the nine months ended
September 30, 2013, the Company recorded a gain from marketable securities of
$3.1 million, representing the fair value of 58,483 additional KLC shares
issued to the Company, based on the closing price of KLC shares as of May 9,
2013, the date of issuance. As of September 30, 2013, the change in the fair
value of the 65,896 shares of KLC owned by the Company was considered as other
than temporary, and therefore the Company recorded a non-cash loss of $1.0
million in the third quarter of 2013.

Nine months ended September 30, 2013 Non-cash Items
The Company's results for the nine months ended September 30, 2013 included
the following non-cash items:

  oLoss on investment in affiliate of $5.8 million, or $0.51 per basic and
    diluted share.
  oLoss on marketable securities of $1.0 million, or $0.08 per basic and
    diluted share.
  oAn unrealized gain on interest rate swaps of $0.7 million, or $0.06 per
    basic and diluted share.
  oNon-cash expenses of $1.6 million, or $0.14 per basic and diluted share,
    relating to share based compensation to the management company amounting
    to $1.1 million and to the amortization of the compensation cost
    recognized for non-vested share awards issued to executive officers,
    directors and employees amounting to $0.5 million.

In the aggregate, these non-cash items decreased the Company's earnings by
$7.6 million, which represents a $0.67 decrease in earnings per basic and
diluted share, for the nine months ended September 30, 2013.

Cash Flows
For the nine months ended September 30, 2013, the Company generated net cash
from operating activities of $2.1 million, compared to $10.6 million for the
nine months ended September 30, 2012. For the nine months ended September 30,
2013, net cash from investing activities was $5.4 million and net cash from
financing activities was $19.0 million. For the nine months ended September
30, 2012, net cash used in investing activities was $24.0 million and net cash
from financing activities was $2.0 million.

Time Charter Coverage Update
Pursuant to our chartering strategy, we will continue to employ our vessels on
short-term time charters or voyage charters, which generally last for periods
of ten days to four months, to be in a position to take advantage of any
strengthening of the spot market when the charter market recovers.

Assuming all charter counterparties fully perform under the terms of the
charters, based on the earliest redelivery dates  and including our
newbuilding vessels, we have secured employment for 61% and 5% of our fleet
capacity for the remainder of 2013 and full year 2014, respectively.

Follow-On Public Offering
On September 27, 2013, the Company closed a public offering of 6,000,000 of
its Class A common shares at $5.75 per share, including the full exercise of
the over-allotment option granted to the underwriters to purchase up to
782,609 additional common shares. The gross proceeds from the offering before
the underwriting discount and other offering expenses payable by the Company
amounted to approximately $34.5 million (including $4.5 million from the
exercise of the over-allotment option). The net proceeds from the offering
after the underwriting discount and other offering expenses amounted to $31.9
million.

Newbuilding Program
Following the completion of the Company's previously-announced public offering
of 6,000,000 common shares, on October 3, 2013, the Company completed the
acquisition of two Ultramax newbuilding drybulk carriers from Allseas Marine
S.A., a ship management company which is wholly-owned by the Company's
Chairman, President and Chief Executive Officer, Mr. Michael Bodouroglou, and
which provides commercial and technical management services for the Company's
fleet. The Ultramax newbuildings have a carrying capacity of 63,500 dwt each,
and are currently under construction at Yangzhou Dayang Shipbuilding Co.,
Ltd., member of Sinopacific Shipbuilding Group, with scheduled delivery on May
31, 2014 and July 31, 2014, respectively.

The acquisition cost of these two newbuildings is $26.5 million per vessel, or
$53.0 million in the aggregate. In October 2013, the Company paid an amount of
$8.1 million per vessel, and the balance of the contract price, or $18.4
million per vessel, will be payable upon the delivery of each vessel.

Loan Agreement with Box Ships (May 27, 2011)
On October 18, 2013, Box Ships proceeded with the full repayment of the
outstanding balance of the loan provided by the Company, plus accrued
interest, that in the aggregate amounted to $6.1 million.

Settlement Agreement with KLC
On October 29, 2013, KLC paid $0.4 million representing the present value of
the total outstanding cash payments the Company was entitled to receive as
part of the settlement agreement entered into with KLC in September 2011 and
pursuant to the amended KLC rehabilitation plan that was approved by the Seoul
Central District Court on March 28, 2013.

Conference Call and Webcast details
The Company's management team will host a conference call to discuss its third
quarter and nine months ended September 30, 2013 results on November 8, 2013
at 10:00 am Eastern Time.

Participants should dial into the call ten minutes before the scheduled time
using the following numbers 1-877-300-8521 (USA) or +1-412-317-6026
(international) to access the call. A replay of the conference call will be
available for seven days and can be accessed by dialing 1-877-870-5176 (USA)
or +1-858-384-5517 (international) and using passcode 10036460.

Slides and audio webcast
There will also be a simultaneous live webcast through the Company's website,
www.paragonship.com. Participants should register on the website approximately
ten minutes prior to the start of the webcast. If you would like a copy of the
release mailed or faxed, please contact Allen & Caron Investor Relations at
212-691-8087.

About Paragon Shipping Inc.
Paragon Shipping Inc. is an international shipping company incorporated under
the laws of the Republic of the Marshall Islands with executive offices in
Athens, Greece, specializing in the transportation of drybulk cargoes. Paragon
Shipping's current fleet consists of thirteen drybulk vessels with a total
carrying capacity of 816,472 dwt. In addition, the Paragon Shipping's current
newbuilding program consists of one Handysize drybulk carrier that is
scheduled to be delivered in the fourth quarter of 2013, as well as two
Ultramax drybulk carriers and two 4,800 TEU containerships that are scheduled
to be delivered in 2014. Paragon Shipping has granted Box Ships Inc., an
affiliated company, the option to acquire its two containerships under
construction. For more information, visit: www.paragonship.com. The
information contained on the Paragon Shipping's website does not constitute
part of this press release.

Forward-Looking Statements
Certain statements in this press release are "forward-looking statements"
within the meaning of the Private Securities Litigation Act of 1995. These
forward-looking statements are based on our current expectations and beliefs
and are subject to a number of risk factors and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. Such risks and uncertainties include, without
limitation, the strength of world economies and currencies, general market
conditions, including fluctuations in charter rates and vessel values, changes
in demand for drybulk shipping capacity, changes in our operating expenses,
including bunker prices, dry-docking and insurance costs, the market for our
vessels, availability of financing and refinancing, charter counterparty
performance, ability to obtain financing and comply with covenants in such
financing arrangements, changes in governmental rules and regulations or
actions taken by regulatory authorities, potential liability from pending or
future litigation, general domestic and international political conditions,
potential disruption of shipping routes due to accidents or political events,
vessels breakdowns and instances of off-hires and other factors, as well as
other risks that have been included in filings with the Securities and
Exchange Commission, all of which are available at www.sec.gov.

Contacts:

Paragon Shipping Inc.
Robert Perri, CFA
Chief Financial Officer
ir@paragonshipping.gr

Allen & Caron Inc.
Rudy Barrio (Investors)
r.barrio@allencaron.com
(212) 691-8087

Len Hall (Media)
len@allencaron.com
(949) 474-4300



- Tables Follow -

Fleet List

Drybulk Fleet

The following tables represent our drybulk fleet and the drybulk newbuilding
vessels that we have agreed to acquire as of November 7, 2013.

Operating Drybulk Fleet
Name            Type / No. of Vessels Dwt     Year Built
Panamax
Dream Seas      Panamax               75,151  2009
Coral Seas      Panamax               74,477  2006
Golden Seas     Panamax               74,475  2006
Pearl Seas      Panamax               74,483  2006
Diamond Seas    Panamax               74,274  2001
Deep Seas       Panamax               72,891  1999
Calm Seas       Panamax               74,047  1999
Kind Seas       Panamax               72,493  1999
Total Panamax   8                     592,291
Supramax
Friendly Seas   Supramax              58,779  2008
Sapphire Seas   Supramax              53,702  2005
Total Supramax  2                     112,481
Handysize
Prosperous Seas Handysize             37,293  2012
Precious Seas   Handysize             37,205  2012
Priceless Seas  Handysize             37,202  2013
Total Handysize 3                     111,700
Grand Total     13                    816,472



Drybulk Newbuildings that we have agreed to acquire
Hull no.        Type / No. of Vessels Dwt     Expected Delivery
Ultramax
Hull no. DY152  Ultramax              63,500  Q2 2014
Hull no. DY153  Ultramax              63,500  Q3 2014
Total Ultramax  2                     127,000
Handysize
Hull no. 625    Handysize             37,200  Q4 2013
Total Handysize 1                     37,200
Grand Total     3                     164,200

Containership Fleet

The following table represents the containership newbuilding vessels that we
have agreed to acquire as of November 7, 2013.

Containership Newbuildings that we have agreed to acquire
Hull no.            TEU     Dwt       Expected Delivery
Hull no. 656 ^(1)   4,800   56,500    Q3 2014
Hull no. 657 ^(1)   4,800   56,500    Q3 2014
Total               9,600   113,000

(1) The Company has granted to Box Ships an option to purchase.

Summary Fleet Data

(Expressed in United States Dollars where applicable)
                                         Quarter Ended      Quarter Ended

                                         September 30, 2012 September 30, 2013
FLEET DATA
Average number of vessels (1)            12.0               13.0
Calendar days for fleet (2)              1,104              1,196
Available days for fleet (3)             1,104              1,196
Operating days for fleet (4)             1,098              1,184
Fleet utilization (5)                    99.5%              99.0%
AVERAGE DAILY RESULTS
Time charter equivalent (6)              11,574             9,274
Vessel operating expenses (7)            4,714              4,313
Management fees - related party adjusted 967                1,023
(9)
General and administrative expenses      1,151              1,174
adjusted (10)
Total vessel operating expenses adjusted 6,832              6,510
(11)
                                         Nine Months Ended  Nine Months Ended

                                         September 30, 2012 September 30, 2013
FLEET DATA
Average number of vessels (1)            10.9               12.9
Calendar days for fleet (2)              2,995              3,521
Available days for fleet (3)             2,995              3,456
Operating days for fleet (4)             2,980              3,442
Fleet utilization (5)                    99.5%              99.6%
AVERAGE DAILY RESULTS
Time charter equivalent (6)              12,418             10,360
Vessel operating expenses (7)            4,684              4,474
Dry-docking expenses (8)                 -                  482
Management fees - related party adjusted 998                1,014
(9)
General and administrative expenses      1,300              1,787
adjusted (10)
Total vessel operating expenses adjusted 6,982              7,757
(11)

     Average number of vessels is the number of vessels that constituted our
(1)  fleet for the relevant period, as measured by the sum of the number of
     calendar days each vessel was a part of our fleet during the period
     divided by the number of days in the period.
(2)  Calendar days for the fleet are the total days the vessels were in our
     possession for the relevant period.
     Available days for the fleet are the total calendar days for the relevant
(3)  period less any off-hire days associated with scheduled dry-dockings or
     special or intermediate surveys.
     Operating days for the fleet are the total available days for the
     relevant period less any off-hire days due to any reason, other than
(4)  scheduled dry-dockings or special or intermediate surveys, including
     unforeseen circumstances. Any idle days relating to the days a vessel
     remains unemployed are included in operating days.
     Fleet utilization is the percentage of time that our vessels were able to
(5)  generate revenues and is determined by dividing operating days by fleet
     available days for the relevant period.
     Time charter equivalent ("TCE") is a measure of the average daily revenue
     performance of a vessel on a per voyage basis. Our method of calculating
     TCE is consistent with industry standards and is determined by dividing
     Net Revenue generated from charters less voyage expenses by operating
     days for the relevant time period. Voyage expenses consist of all costs
     that are unique to a particular voyage, primarily including port
(6)  expenses, canal dues, war risk insurances and fuel costs, net of gains or
     losses from the sale of bunkers to charterers. TCE is a non-GAAP standard
     shipping industry performance measure used primarily to compare
     period-to-period changes in a shipping company's performance despite
     changes in the mix of charter types (i.e., spot voyage charters, time
     charters and bareboat charters) under which the vessels may be employed
     between the periods.
     Daily vessel operating expenses, which includes crew costs, provisions,
(7)  deck and engine stores, lubricating oil, insurance, maintenance and
     repairs, is calculated by dividing vessel operating expenses by fleet
     calendar days for the relevant time period.
(8)  Daily dry-docking expenses are calculated by dividing dry-docking
     expenses by fleet calendar days for the relevant time period.
     Daily management fees - related party adjusted are calculated by dividing
(9)  management fees - related party, excluding share based compensation to
     the management company, by fleet calendar days for the relevant time
     period.
     Daily general and administrative expenses adjusted are calculated by
     dividing general and administrative expenses, excluding non-cash expenses
(10) relating to the amortization of the share based compensation cost for
     non-vested share awards, by fleet calendar days for the relevant time
     period.
     Total vessel operating expenses ("TVOE") is a measurement of our total
     expenses associated with operating our vessels. TVOE is the sum of vessel
     operating expenses, dry-docking expenses, management fees and general and
(11) administrative expenses. Daily TVOE adjusted is calculated by dividing
     TVOE, excluding non-cash expenses relating to the amortization of the
     share based compensation cost for non-vested share awards and share based
     compensation to the management company, by fleet calendar days for the
     relevant time period.



Time Charter Equivalents Reconciliation

(Expressed in United States Dollars where applicable)
                                         Quarter Ended      Quarter Ended

                                         September 30, 2012 September 30, 2013
Charter Revenue                          13,680,309         14,112,237
Commissions                              (751,183)          (758,541)
Voyage Expenses, net                     (220,807)          (2,373,495)
Net Revenue, net of voyage expenses      12,708,319         10,980,201
Total operating days                     1,098              1,184
Time Charter Equivalent                  11,574             9,274
                                         Nine Months Ended  Nine Months Ended

                                         September 30, 2012 September 30, 2013
Charter Revenue                          39,536,592         43,021,461
Commissions                              (2,180,754)        (2,336,135)
Voyage Expenses, net                     (350,748)          (5,026,294)
Net Revenue, net of voyage expenses      37,005,090         35,659,032
Total operating days                     2,980              3,442
Time Charter Equivalent                  12,418             10,360
Condensed Cash Flow Information (Unaudited)

(Expressed in United States Dollars)
                                         Nine Months Ended  Nine Months Ended

                                         September 30, 2012 September 30, 2013
Cash and Cash Equivalents,
                                         14,563,517         17,676,885
beginning of period
Cash generated from / (used in):
Operating Activities                     10,600,820         2,132,169
Investing Activities                     (24,012,113)       5,377,336
Financing Activities                     2,008,217          19,049,363
Net (decrease) / increase in Cash and    (11,403,076)       26,558,868
Cash Equivalents
Cash and Cash Equivalents,
                                         3,160,441          44,235,753
end of period





Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial
Information



EBITDA and Adjusted EBITDA Reconciliation (1)

(Expressed in United States Dollars)
                                         Quarter Ended      Quarter Ended

                                         September 30, 2012 September 30, 2013
Net Loss                                 (18,785,001)       (7,498,517)
Plus Net interest expense, including
interest expense from interest rate      2,164,235          1,769,804
swaps
Plus Depreciation                        4,369,160          4,297,605
EBITDA                                   (12,251,606)       (1,431,108)
Adjusted EBITDA Reconciliation
Net Loss                                 (18,785,001)       (7,498,517)
Loss on investment in affiliate          17,293,266         5,377,901
Loss on marketable securities            980,430            952,137
Unrealized gain on interest rate swaps   (433,787)          (151,476)
Non-cash expenses from the amortization
of share based compensation cost         806,753            910,279
recognized and share based compensation
to the management company
Adjusted Net Loss                        (138,339)          (409,676)
Plus Net interest expense, including     2,164,235          1,769,804
interest expense from swaps
Plus Depreciation                        4,369,160          4,297,605
Adjusted EBITDA                          6,395,056          5,657,733
                                         Nine Months Ended  Nine Months Ended

                                         September 30, 2012 September 30, 2013
Net Loss                                 (17,885,810)       (10,992,587)
Plus Net interest expense, including
interest expense from interest rate      6,293,986          5,626,063
swaps
Plus Depreciation                        12,311,777         12,682,910
EBITDA                                   719,953            7,316,386
Adjusted EBITDA Reconciliation
Net Loss                                 (17,885,810)       (10,992,587)
Loss on investment in affiliate          17,293,266         5,768,722
Loss on marketable securities            980,430            952,137
Unrealized gain on interest rate swaps   (1,325,422)        (660,292)
Non-cash expenses from the amortization
of share based compensation cost         2,400,752          1,582,234
recognized and share based compensation
to the management company
Adjusted Net Income / (Loss)             1,463,216          (3,349,786)
Plus Net interest expense, including     6,293,986          5,626,063
interest expense from swaps
Plus Depreciation                        12,311,777         12,682,910
Adjusted EBITDA                          20,068,979         14,959,187

    The Company considers EBITDA to represent Net Income / (Loss) plus net
    interest expense, including interest expense from interest rate swaps, and
    depreciation and amortization. The Company's management uses EBITDA and
    Adjusted EBITDA as a performance measure. EBITDA and Adjusted EBITDA are
    not items recognized by U.S. GAAP and should not be considered as an
    alternative to Net Income / (Loss), Operating Income / (Loss) or any other
    indicator of a Company's operating performance required by U.S. GAAP. The
(1) Company's definition of EBITDA and Adjusted EBITDA may not be the same as
    that used by other companies in the shipping or other industries. The
    Company believes that EBITDA is useful to investors because the shipping
    industry is capital intensive and may involve significant financing costs.
    The Company excluded non-cash items to derive the Adjusted Net Income /
    (Loss) and the Adjusted EBITDA because the Company believes that these
    adjustments provide additional information on the fleet operational
    results.



Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial
Information



Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share
Reconciliation

(Expressed in United States Dollars - except for share data)
                                         Quarter Ended      Quarter Ended
U.S. GAAP Financial Information
                                         September 30, 2012 September 30, 2013
Net Loss                                 (18,785,001)       (7,498,517)
Net Loss attributable to non-vested      (427,587)          (181,410)
share awards
Net Loss available to common             (18,357,414)       (7,317,107)
shareholders
Weighted average number of common shares 5,960,610          11,307,194
basic and diluted (2)
Loss per common share basic and diluted  (3.08)             (0.65)
(2)
Reconciliation of Net Income / (Loss) to
Adjusted Net Income / (Loss)
Net Loss                                 (18,785,001)       (7,498,517)
Loss on investment in affiliate          17,293,266         5,377,901
Loss on marketable securities            980,430            952,137
Unrealized gain on interest rate swaps   (433,787)          (151,476)
Non-cash expenses from the amortization
of share based compensation cost         806,753            910,279
recognized and share based compensation
to the management company
Adjusted Net Loss (1)                    (138,339)          (409,676)
Adjusted Net Loss attributable to        (3,149)            (9,911)
non-vested share awards
Adjusted Net Loss available to common    (135,190)          (399,765)
shareholders
Weighted average number of common shares 5,960,610          11,307,194
basic and diluted (2)
Adjusted Loss per common share basic and (0.02)             (0.04)
diluted (1), (2)

    Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common
    share are not items recognized by U.S. GAAP and should not be considered
    as alternatives to Net Income / (Loss) and Earnings / (Loss) per common
    share, respectively, or any other indicator of a Company's operating
    performance required by U.S. GAAP. The Company excluded non-cash items to
(1) derive at the Adjusted Net Income / (Loss) and the Adjusted Earnings /
    (Loss) per common share basic and diluted because the Company believes
    that these adjustments provide additional information on the fleet
    operational results. The Company's definition of Adjusted Net Income /
    (Loss) and Adjusted Earnings / (Loss) per common share may not be the same
    as that used by other companies in the shipping or other industries.
(2) Adjusted to give effect to the 10-for-1 reverse stock split that became
    effective on November 5, 2012.



Reconciliation of U.S. GAAP Financial Information to Non-GAAP Financial
Information



Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common share
Reconciliation

(Expressed in United States Dollars - except for share data)
                                         Nine Months Ended  Nine Months Ended
U.S. GAAP Financial Information
                                         September 30, 2012 September 30, 2013
Net Loss                                 (17,885,810)       (10,992,587)
Net Loss attributable to non-vested      (497,320)          (228,186)
share awards
Net Loss available to common             (17,388,490)       (10,764,401)
shareholders
Weighted average number of common shares 5,929,115          11,114,617
basic and diluted (2)
Loss per common share basic and diluted  (2.93)             (0.97)
(2)
Reconciliation of Net Income / (Loss) to
Adjusted Net Income / (Loss)
Net Loss                                 (17,885,810)       (10,992,587)
Loss on investment in affiliate          17,293,266         5,768,722
Loss on marketable securities            980,430            952,137
Unrealized gain on interest rate swaps   (1,325,422)        (660,292)
Non-cash expenses from the amortization
of share based compensation cost         2,400,752          1,582,234
recognized and share based compensation
to the management company
Adjusted Net Income / (Loss) (1)         1,463,216          (3,349,786)
Adjusted Net Income / (Loss)             40,685             (69,535)
attributable to non-vested share awards
Adjusted Net Income / (Loss) available   1,422,531          (3,280,251)
to common shareholders
Weighted average number of common shares 5,929,115          11,114,617
basic and diluted (2)
Adjusted Earnings / (Loss) per common    0.24               (0.30)
share basic and diluted (1), (2)

    Adjusted Net Income / (Loss) and Adjusted Earnings / (Loss) per common
    share are not items recognized by U.S. GAAP and should not be considered
    as alternatives to Net Income / (Loss) and Earnings / (Loss) per common
    share, respectively, or any other indicator of a Company's operating
    performance required by U.S. GAAP. The Company excluded non-cash items to
(1) derive at the Adjusted Net Income / (Loss) and the Adjusted Earnings /
    (Loss) per common share basic and diluted because the Company believes
    that these adjustments provide additional information on the fleet
    operational results. The Company's definition of Adjusted Net Income /
    (Loss) and Adjusted Earnings / (Loss) per common share may not be the same
    as that used by other companies in the shipping or other industries.
(2) Adjusted to give effect to the 10-for-1 reverse stock split that became
    effective on November 5, 2012.







Paragon Shipping Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2012 and September 30, 2013
(Expressed in United States Dollars)
                                         December 31, 2012  September 30, 2013
Assets
Cash and restricted cash (current and    27,686,885         54,245,753
non-current)
Vessels, net                             298,376,440        310,392,732
Advances for vessel acquisitions and     49,592,684         27,945,904
vessels under construction
Other fixed assets, net                  497,619            523,468
Investment in affiliate                  19,987,743         14,025,000
Loan to affiliate                        14,000,000         6,000,000
Other assets                             9,833,531          17,903,569
Total Assets                             419,974,902        431,036,426
Liabilities and Shareholders' Equity
Total debt                               195,542,176        183,221,739
Total other liabilities                  8,912,213          9,473,270
Total shareholders' equity               215,520,513        238,341,417
Total Liabilities and Shareholders'      419,974,902        431,036,426
Equity







Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
For the three months ended September 30, 2012 and 2013
(Expressed in United States Dollars - except for share data)
                                        Three Months Ended  Three Months Ended
                                        September 30, 2012  September 30, 2013
Revenue
Charter revenue                        13,680,309          14,112,237
Commissions                            (751,183)           (758,541)
Net Revenue                             12,929,126          13,353,696
Expenses / (Income)
Voyage expenses, net                    220,807             2,373,495
Vessels operating expenses             5,204,737           5,158,770
Management fees - related party        1,067,343           1,937,304
Depreciation                            4,369,160           4,297,605
General and administrative expenses    2,077,779           1,600,949
Bad debt provisions                     -                   68,865
Gain from vessel early redelivery       -                   (2,267,818)
Loss from marketable securities, net    980,430             952,137
Other income                            (703,422)           -
Operating Loss                          (287,708)           (767,611)
Other Income / (Expenses)
Interest and finance costs              (1,664,747)         (1,656,841)
Loss on derivatives, net                (245,750)           (74,618)
Interest income                         180,049             113,131
Equity in net income of affiliate       540,338             331,144
Loss on investment in affiliate         (17,293,266)        (5,377,901)
Foreign currency loss                   (13,917)            (65,821)
Total Other Expenses, net               (18,497,293)        (6,730,906)
Net Loss                                (18,785,001)        (7,498,517)
Other Comprehensive Income / (Loss)
Unrealized loss on cash flow hedges     (417,425)           (211,863)
Transfer of realized loss on cash flow  64,200              78,459
hedges to "Interest and finance costs"
Equity in other comprehensive loss of   -                   (29,326)
affiliate
Unrealized loss on change in fair       (273,126)           (1,094,268)
value of marketable securities
Transfer of impairment of marketable    980,430             952,137
securities to earnings
Total Other Comprehensive Income /      354,079             (304,861)
(Loss)
Comprehensive Loss                      (18,430,922)        (7,803,378)
Loss per Class A common share, basic    ($3.08)             ($0.65)
and diluted (1)
Weighted average number of Class A      5,960,610           11,307,194
common shares, basic and diluted (1)

(1) Adjusted to give effect to the 10-for-1 reverse stock split that became
    effective on November 5, 2012.







Paragon Shipping Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
For the nine months ended September 30, 2012 and 2013
(Expressed in United States Dollars - except for share data)
                                        Nine Months Ended   Nine Months Ended
                                        September 30, 2012  September 30, 2013
Revenue
Charter revenue                        39,536,592          43,021,461
Commissions                            (2,180,754)         (2,336,135)
Net Revenue                             37,355,838          40,685,326
Expenses / (Income)
Voyage expenses, net                    350,748             5,026,294
Vessels operating expenses             14,029,628          15,753,723
Dry-docking expenses                    -                   1,698,217
Management fees - related party        2,989,520           4,620,394
Depreciation                            12,311,777          12,682,910
General and administrative expenses    6,293,568           6,823,437
Bad debt provisions                     -                   68,865
Gain from vessel early redelivery       -                   (2,267,818)
Gain from marketable securities, net    (414,235)           (2,161,169)
Other income                            (703,422)           -
Operating Income / (Loss)               2,498,254           (1,559,527)
Other Income / (Expenses)
Interest and finance costs              (4,798,734)         (5,417,953)
Loss on derivatives, net                (727,340)           (54,492)
Interest income                         557,510             506,674
Equity in net income of affiliate       1,896,839           1,309,846
Loss on investment in affiliate         (17,293,266)        (5,768,722)
Foreign currency loss                   (19,073)            (8,413)
Total Other Expenses, net               (20,384,064)        (9,433,060)
Net Loss                                (17,885,810)        (10,992,587)
Other Comprehensive Income / (Loss)
Unrealized (loss) / gain on cash flow   (858,342)           191,847
hedges
Transfer of realized loss on cash flow  100,318             233,096
hedges to "Interest and finance costs"
Equity in other comprehensive income    -                   77,383
of affiliate
Unrealized loss on change in fair       (980,430)           (1,105,190)
value of marketable securities
Transfer of impairment of marketable    980,430             952,137
securities to earnings
Total Other Comprehensive (Loss) /      (758,024)           349,273
Income
Comprehensive Loss                      (18,643,834)        (10,643,314)
Loss per Class A common share, basic    ($2.93)             ($0.97)
and diluted (1)
Weighted average number of Class A      5,929,115           11,114,617
common shares, basic and diluted (1)

(1) Adjusted to give effect to the 10-for-1 reverse stock split that became
    effective on November 5, 2012.

SOURCE Paragon Shipping Inc.

Website: http://www.paragonship.com