1328307--3/14/2007--Star_Maritime_Acquisition

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Risks associated with our business We are a development stage company with no operating history and, accordingly, you do not have any basis on which to evaluate our ability to achieve our business objective. If we are forced to liquidate before a business combination, our warrants will expire worthless. If third parties bring claims against us, the funds in the trust account could be reduced and the per-share liquidation price received by stockholders could be less than $10.00 per share. We may issue shares of our capital stock or debt securities to complete a business combination, which would reduce the equity interest of our current stockholders and likely cause a change in control of our ownership. Our officers and directors, control a substantial interest in us and thus may influence certain actions requiring stockholder vote. Limited ability to evaluate the target business management We will be dependent upon interest earned on the trust account to fund our search for a target company and consummation of a business combination. Our ability to successfully effect a business combination and to be successful afterward will be totally dependent upon the efforts of our key personnel, some of whom may join us following a business combination and whom we would have only a limited ability to evaluate. It is also possible that our current officers and directors will resign upon the consummation of a business combination. If we seek to effect a business combination with an entity that is directly or indirectly affiliated with our officers or directors, conflicts of interest could arise. Our officers and directors may allocate their time to other businesses thereby causing conflicts of interest in their determination as to how much time to devote to our affairs. This could have a negative impact on our ability to consummate a business combination. Our officers and directors may in the future become affiliated with entities engaged in business activities similar to those intended to be conducted by us and accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented. All of our officers and directors own shares of our common stock which will not participate in liquidation distributions and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination. Our officers and directors will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount in the trust account unless the business combination is consummated and therefore they may have a conflict of interest in determining whether a particular target business is appropriate for a business combination and in the public stockholders best interest. It is probable that our initial business combination will be with a single target business, which may cause us to be solely dependent on a single business and a limited number of services. Because of our limited resources and the significant competition for business combination opportunities, we may not be able to consummate an attractive business combination. We may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth of the target business, which could compel us to restructure the transaction or abandon a particular business combination. Risks associated with the shipping industry If charter rates fluctuate and the shipping industry continues to undergo cyclical turns, it may have a negative impact on our profitability and operations. Changes in the shipping industry may reduce the demand for the types of vessels we seek to acquire or the services we may ultimately provide and thereby reduce our profitability. If we experienced a catastrophic loss and our insurance is not adequate to cover such loss, it could have a material adverse affect on our operations. We may incur significant costs in complying with environmental, safety and other governmental regulations and our failure to comply with these regulations could result in the imposition of penalties, fines and restrictions on our operations. World events could affect our results of operations and financial condition. We anticipate re-domiciling in the Marshall Islands in connection with a business combination, and the laws of the Marshall Islands will likely govern all of our material agreements and we may not be able to enforce our legal rights. could requisition vessels of a target company during a period of war or emergency, resulting in a loss of earnings. Because our directors and officers reside outside of the United States and, after the consummation of a business combination, substantially all of our assets may be located outside of the United States, it may be difficult for investors to enforce their legal rights against such individuals. We may become subject to United States Federal income taxation on our United States source shipping income. If we acquire a business that charters vessels on the spot market, it may increase our risk of doing business following the business combination. If a target company has or obtains a vessel that is of second-hand or older nature, it could increase our costs and decrease our profitability. Management services relating to a target company s vessels may be performed by management companies that are affiliates of our officers and directors which could result in potential conflicts of interest. Risks associated with our common stock. Our outstanding warrants may have an adverse effect on the market price of common stock and make it more difficult to effect a business combination. If our officers and directors exercise their registration rights, it may have an adverse effect on the market price our common stock and the existence of these rights may make it more difficult to effect a business combination. The American Stock Exchange may delist our securities from quotation on its exchange which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions. If we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete a business combination. Our directors may not be considered independent under the policies of the North American Securities Administrators Association, Inc. Because some of our directors and officers reside outside of the United States and, after the consummation of a business combination, substantially all of our assets may be located outside of the United States, it may be difficult for investors to enforce their legal rights against such individuals or such assets. Because we may acquire a company located outside of the United States, we may be subject to various risks of the foreign jurisdiction in which we ultimately operate. Risks associated with the proposed Business Combination Star Bulk has no operating history and may not operate profitably in the future. Star Bulk s senior executive officers and directors may not be able to organize and manage If any of the eight drybulk carriers in Star Bulk s fleet are not delivered on time or delivered with significant defect, Star Bulk s proposed business, results of operations and financial coalition could suffer. If Star Bulk fails to manage its planned growth properly, it may not be able to successfully expand its fleet. Star Bulk s loan agreements may contain restrictive covenants that may limit its liquidity and corporate activities. Servicing future debt would limit funds available for other purposes. Star Bulk s ability to obtain additional debt financing may be dependent on the performance and the creditworthiness of it s charterers. In the highly competitive international drybulk shipping industry, Star Bulk may not be able to compete for charters with new entrants or established companies with greater resources. Star Bulk may be unable to att act and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of its management and its results of operations. As Star Bulk commences its business, it will need to implement its operations and financial systems and hire new vessel shift if it cannot implement these systems or recruit suitable employees, its performance may be adversely affected Risks involved with operating ocean going vessels could affect Star Bulk s business and reputation, which would adversely affect its revenues. Star Bulk s vessels may suffer damage and it may face unexpected drydocking costs, which could affect its cash flow and financial condition. Purchasing and operating secondhand vessels may result in increased operating costs and vessel off-hire, which could adversely affect Star Bulk s earnings. Star Bulk s worldwide operations will expose it to global risks that may interfere with the operation of its vessels. Star Bulk may not have adequate insurance to compensate it if it loses its vessels. Star Bulk is incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law. Because Star Bulk is incorporated under the haws of the Marshall Islands, it may be difficult to serve Star Bulk with legal process or enforce judgments against Star Bulk, its directors or its management There is a risk that Star Bulk could be treated as a U.S. domestic corporation for U.S. federal income tax purposes after the Redomiciliation Merger Star Bulk may have to pay tax on United States source income, which would reduce its earnings. US. tax authorities could treat Star Bulk as a passive foreign investment company, which could have adverse U.S. federal income tax consequences to US. holders. Star Bulk cannot assure you that it will pay dividends. Star Bulk is a holding company, and will depend on the ability of its subsidiaries to distribute funds to it in order to satisfy its financial obligations or to make dividend payments. Servicing future debt would limit funds available for other purposes, such as the payment of dividends. Star Bulk may be unable to procure financing arrangements which may affect its ability to purchase the vessels in the initial fleet Star Bulk may not he able to borrow amounts under its credit facility which may affect its ability to purchase the vessels in the initial fleet. The assumptions underlying Star Bulk s forecasted cash available for dividends, reserves and extraordinary expenses are inherently uncertain and are subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause actual results to differ materially from those forecasted. If the Redomiciliation Merger is completed, the warrants issued in the Initial Public Offering, which will he assumed by Star Bulk, become exercisable and you may experience dilution. Registration rights held by our stockholders who purchased shares prior to the Initial Public Offering may have an adverse effect on the market price of Star Bulk s common stock. If Star Bulk is unable to receive a listing of its securities on the Nasdaq Global Market, it may be more difficult for stockholders to sell their securities. Our directors and executive officers have interests in the Redomiciliation Merger that are different from yours. We will dissolve and liquidate if we do not consummate the Redomiciliation Merger, or another business combination, in which event our stockholders may be held liable for claims by third parties against us to the extent of distributions received by them If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share liquidation value receivable by our public stockholders from the trust account as part of our plan of dissolution and liquidation will be less than $10.00 per share. If the Redomiciliation Merger or another business combination is not approved by our stockholders by December 21, 2007, then the funds in the trust account may only be distributed upon our dissolution. If we do not consummate the Redomciliation Merger or another business combination, and dissolves, payments from the trust account to our public stockholders may be delayed. Industry Risk Factors Relating to Star Bulk The drybulk shipping industry is cyclical and volatile, and this may lead to reductions and volatility of charter rates, vessel values and results of operations. Charter rates in the drybulk shipping market are at historically high levels and future growth will depend on continued economic growth in he world economy that exceeds growth in vessel capacity. An economic slowdown in the Asia Pacific region could have a material adverse effect on Star Bulk s business,. financial position and results of operations Star Bulk may become dependent on spot charters in the volatile shipping markets. Star Bulk s operating results will be subject to seasonal fluctuations, which could affect its operating results and the amount of available cash with which Star Bulk can pay dividends. Star Bulk will he subject to regulation and liability under environmental laws that could require significant expenditures and effect its cash flows and net income. The operation of drybulk carriers has particular operational risks which could affect our earnings and cash flow. If any of Star Bulk s vessels fails to maintain its class certification and/or fails any annual survey, intermediate survey, drydocking or special survey, it could have a material adverse impact on Star Bulk s financial condition and results of operations. Maritime claimants could arrest Star Bulk s vessels, which could interrupt its cash flow. Governments could requisition Star Bulk s vessels during a period of war or emergency, resulting in loss of earnings. World events outside Star Bulk s control may negatively affect its operations and financial condition. Risks Factors Relating to the Redomiciliation Merger There may not be an active market for Star Bulk s common stock or warrants, which may cause its common stock or warrants to trade at a discount and make it difficult to sell your common stock or warrants. The price of Star Bulk s shares after the Redomiciliation Merger may be volatile. Star Bulk may choose to redeem its outstanding warrants at a time that is disadvantageous to warrant holders. We expect to incur significant costs associated with the Redomiciliation Merger, whether or not the Redomiciliation Merger is completed and the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes. As a result of the Redomiciliation Merger, Star Bulk stockholders will he solely dependent on a single business. We may waive one or more of the conditions to the Redomiciliation Merger without resoliciting stockholder approval for the Redomiciliation Merger.

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1328307--3/14/2007--Star_Maritime_Acquisition_Corp.