Earnings Conference Call First Quarter 2014

Earnings Conference Call First Quarter 2014

Forward Looking Statements This presentation contains certain statements that may be deemed to be forward-looking statements within the meaning of the Securities Acts. Forward-looking statements reflect management's 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 historic facts. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, managements' examination of historical operating trends, data contained in our records and other data available from third parties. Although Paragon Shipping 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, Paragon Shipping Inc. can not 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 the world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydockings, changes in our vessel operating expenses, including drydocking, crewing and insurance costs, or actions taken by regulatory authorities, ability of our counterparties to perform these obligations under sales agreements and charter contracts on a timely basis, potential liability from 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 Paragon Shipping Inc. with the Securities and Exchange Commission. Slide 2

Agenda 1Q 2014 & YTD Highlights Company Update Drybulk Industry Overview Financial Update Investment Summary Slide 3

Highlights - 1Q 2014 & YTD Financial Performance: Net Revenue: $13.4 m. Adjusted EBITDA: $ 0.3 m. Adjusted Net Loss: $ 6.5 m. or $0.31 per share Took delivery of our fourth Handysize drybulk carrier; the M/V Proud Seas. Completed a $42.4 million equity offering, the proceeds of which were used for further fleet expansion and other general corporate purposes. Ordered three Eco-Design Kamsarmax newbuilding drybulk carriers, which are expected to be delivered between 2Q 2015 and 4Q 2015. Subsequent events: Completed the documentation for the previously announced loan agreement with HSH Nordbank AG for a $47.0 million secured loan facility. Completed the documentation and increased the size of the new syndicated secured loan facility led by Nordea Bank Finland Plc to $160.0 million from $120.0 million. Sold the 4,800 TEU containership newbuilding for a net amount of $41.2 million. In addition, we mutually agreed with China Development Bank to cancel the corresponding credit facility for the vessel. Authorized a share buyback program of up to $10.0 million for a period of twelve months. Slide 4

Asset Values & Fleet Growth Average age of Paragon s current fleet 7.7 years vs. 9.4 years for the industry Reduction in fleet age from 7.7 to 6.4 years on a fully-deployed basis 21 vessels totaling 1.35 million Dwt on a fully-deployed basis Market Value of Fleet on a fully deployed basis: $565 million Net Asset Value Calculation (1) Fleet Growth Since Inception Total P. Share Cash (including restricted cash) $ 29 m $1.17 21 Vsls 6.4 Yrs Market Value of Operating Fleet (TC Free) $ 286 m $11.63 Market Value of Newbuilding Contacts $ 105 m $4.27 Market Value of Box Ships & KLC Shares $ 7 m $0.27 Other Assets, net of Other Liabilities $ 3 m $0.12 Total Outstanding Debt ($ 200) m ($8.11) Net Asset Value (NAV) - Charter Free $ 230 m $9.35 4 Vsls 8.7 Yrs 10 Vsls 7.8 Yrs 14 Vsls 7.7 Yrs Remainder Q2 2014 2006 2011 Today 2015 Q3 2014 Q4 2014 H1 2015 H2 2015 Outstanding CapEx $22.3 m. $18.4 m. - $80.3 m. $21.4 m. Contracted Credit Facilities (2) $17.2 m. $17.2 m. - $78.0 m. - Expected Credit Facilities (2) - - - - $20.0 m. Expected Equity CapEx $5.1 m. $1.2 m. - $2.3 m. $1.4 m. (1) As of May 19, 2014 (2) Contracted credit facilities are facilities we have already signed agreements for, expected facilities are based on our financing expectation and assumes approximately 60% leverage. Slide 5

Newbuildings On the Water Chartering Update Spot exposure significant upside potential Name Calm Seas Priceless Seas Proud Seas Deep Seas Kind Seas Diam ond Seas Pearl Seas Dream Seas Precious Seas F riendly Seas Golden Seas Sapphire Seas Prosperous Seas Coral Seas Hull No. DY152 Hull No. DY153 Hull No. DY4050 Hull No. DY4052 Hull No. YZJ1144 Hull No. YZJ1145 Hull No. YZJ1142 Type Fixed Revenue Days ( 1) Panam ax Handysiz e Handysiz e Panam ax Panam ax Panam ax Panam ax Panam ax Handysiz e Supram ax Panam ax Supram ax Handysiz e Panam ax Ultram ax Ultram ax Ultram ax Ultram ax Kamsarmax Kamsarmax Kamsarmax Rem ainder 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 3,237 open days 6,759 open days Minimum Fixed Days Open Days (1) Assumes earliest redelivery dates Slide 6

Financing Update Newbuilding program: Delivery of M/V Proud Seas financed with $25.4 million from Nordea facility Box King sold - Credit facility with CDB cancelled Agreed with HSH to partially finance two Ultramax newbuildings Agreed with Nordea to partially finance two Ultramax and two Kamsarmax newbuildings Intend to secure financing for the remaining Kamsarmax newbuilding prior to delivery Leverage Ratio (1) Cash (including restricted cash) Total Outstanding Debt Net Outstanding Debt M.V. Adjusted Net Worth (2) $ 29 m $ 200 m $ 171 m $ 185 m Total Capitalization (Market Value Adjusted (2) ) $ 356 m Net Debt / Total Capitalization 48% (1) As of May 19, 2014 (2) Including newbuilding deposits, KLC Shares and M.V. adjusted investment in Box Ships Slide 7

USD Million Repayment Profile Refinancing of existing fleet: Successfully streamlined our debt repayment profile Reduced our total debt repayment obligations by $22.6 million (1) for the period 2014-2015 Scheduled Loan Repayments - Before Refinancing Scheduled Loan Repayments - After Refinancing (2) $60 $50 $40 $30 $20 202 198 192 186 179 173 139 27.1 134 $210 $180 $150 $120 $90 $60 $60 $50 $40 $30 $20 202 190 188 181 175 169 163 156 $210 $180 $150 $120 $90 $60 $10 $0 0.8 3.5 3.5 5.4 6.5 6.5 6.5 6.5 5.5 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 $30 $0 $10 $0 8.1 3.5 3.5 5.3 6.3 6.3 6.3 6.3 6.3 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 $30 $0 Debt O/S Scheduled Quarterly Repayments Debt O/S Scheduled Quarterly Repayments Prepayments, net of Proceeds Balloon Repayments Prepayments, net of Proceeds Balloon Repayments 1. Assumes drawdown of the maximum available amounts as per the respective loan agreements 2. Excludes debt proceeds and repayment installments relating to the newbuildings Slide 8

Demand vs Supply Drybulk market growing by more than 5% CAGR in volumes through 2014 Orderbook currently stands at 21.5% of existing fleet Deletions remain significant 2014YTD: 19.4 m. dwt delivered vs 4.5 m. dwt scrapped (23%) Drybulk fleet growth is slowing Demand (Drybulk Seaborne Trade) Supply (Fleet Development) 5,000 4,000 3,000 2,000 1,000 0 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% 120 100 80 60 40 20 0-20 Minor Bulks Phosrock Bauxite / Alumina Grain Coking Coal Steam Coal Iron Ore Growth -40-60 Deliveries Demolitions Capesize O/B Panamax O/B Supramax O/B Handysize O/B Source: Clarkson s Research Slide 9

Drybulk Market TC Rates: Significant improvement in rates started in late 2013 Asset Values: Sentiment continues to improve - vessel values increasing Average T/C Routes (USD Per Day) 5 Year Old Secondhand Prices (USD Mil.) 50,000 40,000 30,000 20,000 Capesize Panamax Supramax Handysize 60 50 40 30 20 10,000 0 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 10 Capesize Panamax Supramax Handysize Linear (Capesize) Linear (Panamax) 0 Linear (Supramax) Linear (Handysize) Jan-13 May-13 Sep-13 Jan-14 May-14 Source: Clarkson s Research Slide 10

Operating Performance 9.5% YOY increase in average number of vessels 13.5% YOY decrease in TVOE 1Q 2013 1Q 2014 Fleet Data Average number of vessels 12.7 13.9 Calendar days for fleet 1,142 1,254 Available days for fleet 1,125 1,211 Operating days for fleet 1,123 1,198 Fleet utilization 99.8% 98.9% Daily Results Time Charter Equivalent 11,388 8,557 Vessel operating expenses 4,449 4,262 Dry-docking expenses 413 1,178 Management fees 1,016 1,056 G&A expenses (ex. non-cash items) 3,038 1,221 Total Vessel Operating Expenses (TVOE) 8,916 7,717 Slide 11

Financial Performance Net revenue: $13.4 million in 1Q 2014 Adjusted EBITDA: $0.3 million in 1Q 2014 1Q 2013 1Q 2014 F inancial Performance Net Revenue $ 13.5 m $ 13.4 m EBITDA $ 2.6 m ($ 19.1 m) Adjusted EBITDA $ 3.2 m $ 0.3 m Net Loss ($ 3.5 m) ($ 25.9 m) Adjusted Net Loss ($ 2.9 m) ($ 6.5 m) Loss Per Share ($0.32) ($1.24) Adjusted Loss Per Share ($0.26) ($0.31) Non - Cash Items (USD 000's) Impairment loss - $15,695 Loss on Investment in Affiliate $391 $2,754 Unrealized Gain on Interest Rate Swaps ($238) ($177) Share Based Compensation $478 $1,113 Total $631 $19,385 Slide 12

Investment Summary Drybulk Market A gradual recovery started in late 2013. Increased scrapping and reduced orderbook will speed up recovery. Paragon Shipping Inc. Fleet Growth: 4 drybulk newbuildings already delivered, 7 expected through 2015. The Kamsarmax & Ultramax newbuildings facilitate further fleet expansion and improve fleet age profile. $565 million M.V. of fleet on a fully deployed basis. Current charter free NAV of $9.35 per share. Financing & Debt Exposure: Efficient capital structure. Current leverage ratio of 48%. Chartering: Spot exposure = significant upside potential. Well positioned to capture the anticipated recovery of the drybulk market with significant lower cost and efficient operations. Slide 13

Investor Relations /Media: Allen & Caron Inc. Rudy Barrio (Investors) Tel: (212) 691-8087 Email: r.barrio@allencaron.com Len Hall (Media) Tel: (949) 474-4300 Email: len@allencaron.com Company: Paragon Shipping Inc. Robert Perri, CFA Chief Financial Officer 15 Karamanli Ave. GR 166 73, Voula, Greece Tel: +30 (210) 8914 600 Email: ir@paragonshipping.gr

Appendices Slide 15

Dry-dockings 2014-2015 Vessel Type Next DD Quarter Budget (1) Offhire Days (1) Deep Seas Panamax Completed $ 500,000 21 Actual Calm Seas Panamax Completed $ 500,000 22 Actual Dream Seas Panamax Q2 2014 $ 750,000 18 Kind Seas Panamax Q4 2014 $ 750,000 18 Total 2014 $ 2,500,000 79 Sapphire Seas Supramax Q2 2015 $ 650,000 18 Total 2015 $ 650,000 18 1. The costs reflected are estimates based on drydocking our vessels in China. We estimate that each dry-dock will result in 18 days off-hire. Actual costs may vary on various factors. We expect to fund these costs with cash from operations Slide 16

Statement of Operations 1Q13 vs 1Q14 (US$ 000's) 3 Months Ended 3 Months Ended Mar. 31, 2013 Mar. 31, 2014 Revenue Charter revenue $14,225 $14,237 Commisssions (772) (808) Net Revenue 13,453 13,429 Expenses / (Income) Voyage expenses, net 664 3,178 Vessel operating expenses 5,081 5,345 Dry-docking expenses 471 1,477 Management fees - related party 1,496 2,204 Depreciation 4,134 4,427 General & administrative expenses 3,611 1,765 Impairment loss - 15,695 Bad debt provisions 17 - Other income - (40) Total Operating Expenses 15,474 34,051 Operating Loss (2,021) (20,622) Other Income / (Expenses) Interest and finance costs (1,902) (2,210) Loss on derivatives, net (15) (26) Interest income 226 7 Equity in net income / (loss) of affiliate 569 (276) Loss on investment in affiliate (391) (2,754) Foreign currency gain / (loss) 23 (4) Total Other Expenses, net (1,490) (5,263) Net Loss ($3,511) ($25,885) Weighted av. number of shares, basic & diluted 10,992 20,560 Loss per Common Share, basic & diluted ($0.32) ($1.24) Slide 17

Statement of Operations Adjustments Adjusted Net Loss Reconciliation 3 Months Ended 3 Months Ended Mar. 31, 2013 Mar. 31, 2014 (US$ 000's) Net Los s ( 3,511) ( 25,885) Impairment loss - 15,695 Loss on investment in affiliate 391 2,754 Unrealized gain on interest rate swaps (238) (177) Share based compensation 478 1,113 Adjusted Net Loss (2,880) (6,500) Adjusted EBITDA Reconciliation Adjusted Net Loss (2,880) (6,500) Plus Net interest expense, including swap interest 1,928 2,406 Plus Depreciation 4,134 4,427 Adjusted EBITDA 3,182 333 Slide 18

Balance Sheet & Cash Flow Statement (US$ 000's) December 31, March 31, 2013 2014 Cash and restricted cash (current and non-current) 41,312 42,245 Vessels, net 306,136 327,675 Advances for vessel under construction 45,209 66,855 Other fixed assets, net 596 547 Investment in affiliate 11,309 8,284 Other assets 14,984 14,843 TOTAL ASSETS 419,546 460,449 Total debt 180,115 201,961 Total other liabilities 6,780 11,050 TOTAL LIABILITIES 186,895 213,011 Total shareholders'equity 232,651 247,438 TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 419,546 460,449 3 Months Ended 3 Months Ended Mar. 31, 2013 Mar. 31, 2014 Cash and cash equivalent at the beginning of the period 17,677 31,302 Net cash from operating activities 261 1,204 Net cash used in investing activities (620) (63,240) Net cash (used in) / from financing activites (3,721) 61,794 Net decrease in cash and cash equivalents (4,080) (242) Cash and cash equivalent at the end of the period 13,597 31,060 Slide 19

Operating Fleet & Newbuilding Program Operating Fleet Newbuilding Program Name & Type DWT Year Built Country of Build Panamax Fleet Hull No. & Type DWT Country of Build Ultramax Fleet Expected Delivery Calm Seas 74,047 1999 Japan Deep Seas 72,891 1999 Korea Kind Seas 72,493 1999 Japan Pearl Seas 74,483 2006 China Diamond Seas 74,274 2001 Japan Coral Seas 74,477 2006 China Golden Seas 74,475 2006 China Dream Seas 75,151 2009 China Supramax Fleet Sapphire Seas 53,702 2005 China DY152 63,500 DWT China Q2 2014 DY153 63,500 DWT China Q3 2014 DY4050 63,500 DWT China Q2 2015 DY4052 63,500 DWT China Q2 2015 Kamsarmax Fleet YZJ1144 81,800 DWT China Q2 2015 YZJ1145 81,800 DWT China Q2 2015 YZJ1142 81,800 DWT China Q4 2015 TOTAL 499,400 DWT Friendly Seas 58,779 2008 China Handysize Fleet Prosperous Seas 37,293 2012 China Precious Seas 37.205 2012 China Priceless Seas 37,202 2013 China Proud Seas 37,227 2014 China TOTAL 853,699 Slide 20

Current Fleet Employment PARAGON FLEET EMPLOYMENT VESSEL CHARTERER GROSS HIRE PERIOD COMMENCED EXPIRES PANAMAX FLEET Calm Seas Spot Deep Seas Oldendorff GmbH & Co. KG $ 11,000 T/C Trip Feb-14 May-14 Kind Seas Marubeni Corporation $ 7,350 T/C Trip May-14 Jun-14 Pearl Seas HC Trading Malta Ltd. Voyage Charter V/C Trip Jan-14 May-14 Diamond Seas Marubeni Corporation $ 8,500 T/C Trip May-14 Jun-14 Coral Seas Phaethon International Co. S.A. $ 14,250 T/C Trip May-14 Jul-14 Golden Seas Al Ghurair Resources Llc. $ 11,400 T/C Trip Mar-14 Jun-14 Dream Seas Louis Dreyfus Commodities $ 15,500 T/C Trip Mar-14 Jun-14 SUPRAMAX FLEET Sapphire Seas Cargill International S.A. $ 8,750 T/C Trip May-14 Jul-14 Friendly Seas NYK Bulk & Projects Carrier Ltd. $ 12,000 2 Laden Legs Feb-14 Jun-14 HANDYSIZE FLEET Prosperous Seas Cargill International S.A. $ 12,125 23-26 Months May-12 Jul-14 Precious Seas Seatrek Trans Pte Ltd. $ 10,700 T/C Trip Apr-14 May-14 Priceless Seas Spot Proud Seas Orient Asia Lines Limited $ 11,250 T/C Trip Mar-14 Jun-14 Slide 21