PARAGON SHIPPING INC. REPORTS FOURTH QUARTER AND ANNUAL 2008 RESULTS ATHENS, Greece, March 18, 2009 - Paragon Shipping Inc. (Nasdaq: PRGN), a global shipping transportation company specializing in drybulk cargoes, announced today its results for the three months and year ended December 31, 2008. Commenting on the results, Michael Bodouroglou, Chairman and Chief Executive Officer of Paragon Shipping, stated, “I am pleased to announce yet another profitable quarter and once again we have delivered a solid performance against a background of a harsh worldwide economic environment and a depressed shipping market.” Mr. Bodouroglou continued, “In addition, we amended our six credit facilities that will be in effect through December 31, 2009 and on terms that allow Paragon to maintain its high level of liquidity.” Mr. Bodouroglou concluded, “Paragon continues to have a considerable chartering base with 98% of our fleet capacity under contract for 2009, 55% for 2010 and 38% for 2011. So far our charterers are meeting their contractual obligations. Moreover, we were not drawn into the newbuilding market and therefore have no capital commitments to finance which has proved costly for many drybulk shipping operators. I am also pleased to announce that our board of directors has elected to continue paying dividends in this tough economic environment for the fourth quarter of 2008. Given the extraordinary market conditions and uncertainty surrounding the global economy, our board decided to reduce our quarterly dividend to $0.05 per share, which provides us with additional financial flexibility while also delivering value to our shareholders. While we believe 2009 will be a challenging year for the drybulk market, we expect Paragon not only to weather the storm but to have the financial strength and ability to seek investment opportunities in the year to come.” Fourth Quarter 2008 Financial Results: Time charter revenue for the fourth quarter of 2008 was $44.7 million, compared to $30.4 million for the fourth quarter of 2007. The Company reported net income of $10.0 million, or $0.37 per basic and diluted share for the fourth quarter of 2008, calculated on 27,038,015 weighted average number of basic shares, and on 27,038,015 weighted average number of diluted shares, outstanding for the period and reflecting the impact of the non-cash items discussed below. For the fourth quarter of 2007, the Company reported net income of $7.7 million, or $0.31 and $0.29 per basic and diluted share, respectively, calculated on 25,334,026 weighted average number of basic shares and on 26,330,136 weighted average number of diluted shares. Excluding all non-cash items described below, adjusted net income for the fourth quarter of 2008 was $14.0 million, or $0.52 per basic and diluted share. This compares to adjusted net income of $3.6 million, or $0.14 per basic and diluted share, for the fourth quarter of 2007. Please refer to the table at the back of this press release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non- GAAP adjusted earnings per share. EBITDA was $22.7 million for the fourth quarter of 2008, compared to $18.0 million for the fourth quarter of 2007. This was calculated by adding to net income of $10.0 million for the fourth quarter of 2008, net interest expense and depreciation that in the aggregate amounted to $12.7 million for the fourth quarter of 2008. Adjusted EBITDA, excluding all non-cash items described below, was $26.0 million for the fourth quarter of 2008, compared to $13.2 million for the fourth quarter of 2007. Please see the table at the back of this release for a reconciliation of EBITDA and Adjusted EBITDA to net income. The Company operated an average of 12 vessels during the fourth quarter of 2008, earning an average time charter equivalent rate of $39,361 per day, compared to an average of 9.68 vessels during the fourth quarter of 2007, earning an average time charter equivalent rate of $35,284 per day. Total adjusted operating expenses for the fourth quarter of 2008 were $10.1 million, or approximately $9,181 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $0.1 million of share-based compensation for the period. For the fourth quarter of 2007, total adjusted operating expenses were $9.5 million, or approximately $10,675 per day, including vessel operating expenses, management fees and general and administrative expenses, but excluding $0.3 million of share-based compensation. Fourth Quarter 2008 Non-cash Items The Company’s results for the three months ended December 31, 2008 included the following non-cash items: • Non-cash revenue of $5.3 million and depreciation expense of $0.7 million associated with below market time charters attached to vessels acquired, which increases net revenue (amortized over the remaining period of the time charter) and increases depreciation expense (amortized over the remaining useful life of the vessel). These non-cash items contributed an aggregate of $4.6 million to net income, or $0.17 to basic and diluted earnings per share, for the three months ended December 31, 2008. • An unrealized loss from interest rate swaps of $8.5 million, or $0.32 per basic and diluted share, respectively, for the three months ended December 31, 2008. • Non-cash expenses of $0.1 million, or $0.01 per basic and diluted share, relating to the amortization for the three months ended December 31, 2008, of the compensation cost recognized for restricted common shares issued to executive officers, directors and employees. In the aggregate, these non-cash items contributed $4.2 million to net income, or $0.15 to earnings per basic and diluted share, for the three months ended December 31, 2008. Dividend Declared The Company’s Board of Directors declared a quarterly dividend of $0.05 per share, payable on April 9, 2009, to shareholders of record as of March 30, 2009. Time Charter Coverage Update Pursuant to its time chartering strategy, Paragon Shipping Inc. employs vessels under fixed rate charters for periods ranging from one to five years. The Company has secured under such contracts 98%, 55% and 38% of its fleet capacity under for 2009, 2010 and 2011, respectively. Cash Flows For the year ended December 31, 2008 the Company generated net cash from operating activities of $83.5 million, compared to $42.8 million in the year ended December 31, 2007. For the year ended December 31, 2008, net cash used in investing activities was $78.1 million and cash from financing activities was $31.7 million. For the year ended December 31, 2007, net cash used in investing activities was $426.5 million and cash from financing activities was $382.7 million. Year ended December 31, 2008 Financial Results: Time charter revenue for the year ended December 31, 2008 was $169.3 million, compared to $76.7 million for the year ended December 31, 2007. The Company reported net income of $69.2 million, or $2.58 and $2.56 per basic and diluted share, respectively, for the year ended December 31, 2008, calculated on 26,819,923 weighted average number of basic shares, and on 27,010,013 weighted average number of diluted shares, outstanding for the period and reflecting the impact of the non-cash items discussed below. For the year ended December 31, 2007, the Company reported net income of $4.9 million, or $0.12 and $0.11 per basic and diluted share, respectively, calculated on 16,495,980 weighted average number of basic shares and on 17,438,463 weighted average number of diluted shares, respectively. Excluding all non-cash items described below, adjusted net income for the year ended December 31, 2008, was $56.2 million, or $2.10 and $2.08 per basic and diluted share, respectively. This compares to adjusted net income of $18.7 million, or $1.13 and $1.07 per basic and diluted share for the year ended December 31, 2007. Please refer to the table at the back of this press release for reconciliations of GAAP net income to non-GAAP adjusted net income and GAAP earnings per share to non-GAAP adjusted earnings per share. EBITDA was $116.1 million for the year ended December 31, 2008, compared to $31.4 million for the year ended December 31, 2007. This was calculated by adding to net income of $69.2 million for the year ended December 31, 2008, net interest expense and depreciation that in the aggregate amounted to $46.8 million for the year ended December 31, 2008. Adjusted EBITDA, excluding all non-cash items described below, was $100.3 million for the year ended December 31, 2008, compared to $44.4 million for the year ended December 31, 2007. Please see the table at the back of this press release for a reconciliation of net income to EBITDA and to Adjusted EBITDA. The Company operated an average of 11.4 vessels during the year ended December 31, 2008, earning an average time charter equivalent rate of $39,439 per day, compared to an average of 7.18 vessels during the year ended December 31, 2007, earning an average time charter equivalent rate of $28,563 per day. Total adjusted operating expenses for the year ended December 31, 2008, were $32.6 million, or approximately $7,809 per day, including vessel operating expenses, management fees, general and administrative expenses and dry-docking costs, but excluding $0.5 million of share-based compensation. For the year ended December 31, 2007, total adjusted operating expenses were $20.3 million, or approximately $7,761 per day, including vessel operating expenses, management fees and general and administrative expenses, but excluding $20.2 million of share-based compensation. Year ended December 31, 2008 Non-cash Items: The Company’s results for the year ended December 31, 2008 included the following non-cash items: • Non-cash revenue of $26.6 million and depreciation expense of $2.8 million associated with below market time charters attached to vessels acquired, which increases net revenue (amortized over the remaining period of the time charter) and increases depreciation expense (amortized over the remaining useful life of the vessel). These non-cash items contributed an aggregate of $23.8 million to net income, or $0.89 and $0.88 to basic and diluted earnings per share, respectively, for the year ended December 31, 2008. • An unrealized loss from interest rate swaps of $10.3 million, or $0.38 per basic and diluted share, for the year ended December 31, 2008. • Non-cash expenses of $0.5 million, or $0.02 per basic and diluted share, relating to the amortization for the year ended December 31, 2008, of the compensation cost recognized for a total of 139,875 restricted common shares issued to executive officers, directors and employees. In the aggregate, these non-cash items contributed $13.0 million to net income, or $0.48 to earnings per basic and diluted share, for the year ended December 31, 2008. Paragon Shipping Press Release