EX-99.1

StealthGas Inc.
Unaudited Condensed Consolidated Balance Sheets
December 31, 2007 and March 31, 2008 (Expressed in United States Dollars, except share data)


	December 31,			March 31,
	2007			2008
Assets
Current assets
Cash and cash equivalents		33,114,872			21,500,130
Trade receivables		2,349,275			2,317,148
Claims receivable		46,070			47,328
Other receivable		—			59,788
Inventories		836,365			716,652
Advances and prepayments		212,919			463,208
Restricted cash		7,727,272			2,781,713
Vessels held for sale		25,210,568			—

Total current assets		69,497,341			27,885,967

Non current assets
Advances for vessels under construction and acquisitions		12,450,000			16,870,002
Vessels, net		395,095,322			525,165,359
Restricted cash		200,000			600,000
Deferred finance charges, net of accumulated amortization of $162,132 and $199,354		350,663			458,316
Fair value of derivatives		—			138,521

Total non current assets		408,095,985			543,232,198

Total assets		477,593,326			571,118,165

Liabilities and Stockholders’ Equity
Current liabilities
Payable to related party		7,846,691			6,064,701
Trade accounts payable		3,406,421			3,104,864
Other accrued liabilities		3,928,028			4,037,662
Deferred income		3,972,370			3,290,917
Current portion of long-term debt		14,719,156			21,681,156
Current portion of long-term debt associated with vessel held for sale		3,500,000			—

Total current liabilities		37,372,666			38,179,300

Non current liabilities
Fair value of derivatives		3,288,989			7,292,017
Customer deposits		5,174,093			5,214,732
Fair value of below market acquired time charter		1,187,417			697,153
Long-term debt		127,539,373			214,512,565

Total non current liabilities		137,189,872			227,716,467

Total liabilities		174,562,538			265,895,767


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 22,284,105 and 22,310,110 shares issued and outstanding with a par value of $0.01 per share		222,841			223,101
Additional paid-in capital		281,612,867			282,113,258
Retained earnings		21,650,412			24,903,585
Accumulated other comprehensive loss		(455,332	)		(2,017,546	)

Total stockholders’ equity		303,030,788			305,222,398

Total liabilities and stockholders’ equity		477,593,326			571,118,165

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

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


	For The Three Months Ended March 31,
	2007			2008
Revenues
Voyage revenues		20,744,106			27,014,176

Expenses
Voyage expenses		1,275,448			903,915
Vessels’ operating expenses		5,292,794			7,285,792
Dry-docking costs		—			401,325
Management fees		907,960			1,137,605
General and administrative expenses		817,675			1,537,542
Depreciation		3,661,831			5,294,745
Net gain on sale of vessels		—			(1,673,321	)

Total expenses		11,955,708			14,887,603

Income from operations		8,788,398			12,126,573

Other income and (expenses)
Interest and finance costs		(2,392,209	)		(2,623,387	)
Change in fair value of derivatives		(25,945	)		(2,302,293	)
Interest income		262,044			301,504
Foreign exchange loss		(9,834	)		(70,954	)

Other expenses, net		(2,165,944	)		(4,695,130	)

Net income		6,622,454			7,431,443

Per common share amounts
- Basic earnings		0.46			0.34

- Diluted earnings		0.46			0.34

- Cash dividends declared		0.1875			0.1875

Weighted average number of common shares
- Basic		14,400,000			22,114,105

- Diluted		14,400,000			22,150,607

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

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


	For The Three Months Ended March 31,
	2007			2008
Cash flows from operating activities
Net income for the period		6,622,454			7,431,443
Items included in net income not affecting cash flows:
Depreciation and amortization		3,682,678			5,331,967
Amortization of fair value of time charter		(99,096	)		(490,264	)
Share based compensation		—			500,651
Change in fair value of derivatives		25,945			2,302,293
Gain on sale of vessels		—			(1,673,321	)
Changes in operating assets and liabilities:
(Increase)/decrease in
Trade receivables		(188,255	)		32,127
Claims receivable		(1,572	)		(1,258	)
Other receivable		—			(59,788	)
Inventories		147,891			119,713
Advances and prepayments		(24,542	)		(250,289	)
Increase/(decrease) in
Payable to related party		772,959			(1,781,990	)
Trade accounts payable		(375,461	)		(301,557	)
Other accrued liabilities		(1,889,824	)		109,634
Deferred income		136,567			(681,453	)

Net cash provided by operating activities		8,809,744			10,587,908

Cash flows from investing activities
Insurance proceeds		260,016			—
Advances for vessel under construction and acquisitions		(1,650,000	)		(16,870,002	)
Proceeds from sale of vessels, net		—			26,883,889
Acquisition of vessels		(21,825,765	)		(122,914,782	)
(Increase)/decrease in restricted cash account		(434,691	)		4,545,559

Net cash (used in) investing activities		(23,650,440	)		(108,355,336	)

Cash flows from financing activities
Dividends paid		(2,700,000	)		(4,178,270	)
Deferred finance charges		(50,795	)		(144,875	)
Customer deposits		382,902			40,639
Loan repayment		(6,808,000	)		(8,689,808	)
Proceeds from long-term debt		20,317,500			99,125,000

Net cash provided by financing activities		11,141,607			86,152,686

Net (decrease) in cash and cash equivalents		(3,699,089	)		(11,614,742	)
Cash and cash equivalents at beginning of year		11,146,871			33,114,872

Cash and cash equivalents at end of period		7,447,782			21,500,130

Supplemental Cash Flow Information:
Cash paid during the period for interest		3,088,195			3,020,885

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

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 2007 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 March 31, 2008, and the results of its operations and its cash flows for the three month periods ended March 31, 2007 and 2008.

2. Organization

StealthGas Inc. was formed under the laws of Marshall Islands on December 22, 2004 and, as of March 31, 2008 owned a fleet of thirty-six liquefied petroleum gas (LPG) carriers and two medium range (M.R.) type product carriers providing worldwide marine transportation services under long, medium or short-term charters.

As of March 31, 2008, StealthGas Inc. included the ship-owing companies listed below:

LPG carriers


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

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
Balkan Holding Inc.	Gas Czar	February 14, 2006		3,509.65
Transgalaxy Inc.	Gas Fortune	February 24, 2006		3,512.78
International Gases Inc	Gas Zael*	April 03, 2006		4,111.24
Balkan Profit Ltd	Gas Eternity	March 09, 2006		3,528.21
Oxfordgas Inc.	Lyne	May 19, 2006		5,013.90
Energetic Peninsula Limited	Sir Ivor	May 26, 2006		5,000.00
Ocean Blue Limited	Gas Nemesis	June 15, 2006 (sold on January 29, 2008)		5,016.05
Baroness Holdings Inc.	Batangas	June 30, 2006		3,244.04
Evolution Crude Inc.	Gas Flawless	February 1, 2007		6,300.00
Aura Gas Inc.	Sea Bird	May 18, 2007		3,518.00
European Energy Inc.	Gas Renovatio	May 29, 2007 (sold on March 19, 2008)		3,312.50
Fighter Gas Inc.	Gas Icon	June 27, 2007		5,000.00
Luckyboy Inc.	Chiltern	June 28, 2007		3,312.00
Italia Trades Inc.	Gas Evoluzione	July 23, 2007		3,517.00
Studio City Inc.	Gas Kalogeros	July 27, 2007		5,000.00
Gastech Inc.	Gas Sikousis	August 03, 2007		3,500.00
Espace Inc.	Gas Sophie	October 15, 2007		3,500.00
Cannes View Inc.	Gas Haralambos	October 30, 2007		7,000.00
Ecstasea Inc.	Gas Premiership	March 19, 2008		7,200.00


Name of Company	Vessel Name	To be delivered on	cbm
Tankpunk Inc.	Gas Natalie	October 2008		3,213.92
Spacegas Inc.	Gas Defiance	August 2008		5,000.00
Financial Power Inc.	Gas Shuriken	November 2008		5,000.00
Sound Effex Inc.	Hull 411	May 2009		3,500.00
Revolution Inc.	Hull 412	July 2009		3,500.00
Pelorus Inc.	Hull K 421	September 2010		5,000.00
Rising Sun Inc.	Hull K 422	November 2010		5,000.00
Carinthia Inc.	Hull K 423	March 2011		5,000.00
Tatoosh Beauty Inc.	Hull K 424	July 2011		7,500.00
Octopus Gas Inc.	Hull K 425	December 2011		7,500.00

M.R. type product carriers


Name of Company	Vessel Name	Acquisition Date	dwt
Clean Power Inc.	Navig8 Fidelity	January 9, 2008		46,754.29
MR Roi Inc.	Navig8 Faith	February 27, 2008		46,754.29


Name of Company	Vessel Name	To be delivered on	dwt
King of Hearts Inc.	Hull 2139	June 2009		47,000.00

*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 4).

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, 2007. There have been no material changes to these policies in the three month period ended March 31, 2008. Effective January 1, 2008, the Company adopted FASB Statement No. 157 “Fair Value Measurements” (“SFAS 157”) which had no effect on the Company’s consolidated financial statements. In addition, on January 1, 2008, the Company made no elections to account for its monetary assets and liabilities at fair values as allowed by FASB statement No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”).

4. Recent Accounting Pronouncements

In March 2008 the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities” (“SFAS 161”). The new standard is intended 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. SFAS 161 allows but does not require comparative disclosures for earlier periods at initial adoption. The Company is currently evaluating the potential impact, if any, of the adoption of SFAS 161 on the Company’s consolidated financial condition, results of operations or cash flows.

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 three month periods ended March 31, 2007 and 2008, total brokerage commissions of 1.25% amounted to $260,915 and $331,084, respectively, and were included in voyage expenses. For the three month periods ended March 31, 2007 and 2008, the management fees were $907,960 and $1,137,605, 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. As of December 31, 2007 and March 31, 2008 the amounts of $1,008,090 and $1,340,000, respectively, were capitalized to the cost of the vessels and as of March 31, 2008 the amount of $272,750 was recognized as expense relating the sale of vessels and is included in the consolidated statement of income under the caption “Net gain on sale of vessels”.

The Manager has subcontracted the technical management of the vessels to three unaffiliated ship-management companies, V.Ships Limited (“V.Ships”), 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. Such fees for the three month periods ended March 31, 2007 and 2008 amounted to $257,959 and $259,291, respectively and are included in the total management fees of $907,960 and $1,137,605, respectively.

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 $408,353 and $767,188 for the three month periods ended March 31, 2007 and 2008, respectively, and are included in the consolidated statement of income under the caption “General and administrative expenses”.

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, 2007 and at March 31, 2008 was a liability of $7,846,691 and $6,064,701, 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 three-year cancelable agreement for the provided office facilities. Rental expense for the three month periods ended March 31, 2007 and 2008 amounted to $7,991 and $12,638, respectively.

6. Inventories

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


	December 31, 2007		March 31, 2008
Bunkers		101,050		—
Lubricants		735,315		716,652

Total		836,365		716,652

7. Advances for Vessels Under Construction and Acquisitions

During the quarter ended March 31, 2008, the movement of the account, advances for vessels under construction and acquisitions, was as follows:


Balance, December 31, 2007	12,450,000
Advances for vessels acquisitions	5,750,000
Advances for vessels under construction	11,120,002
Vessels delivered	(12,450,000	)

Balance, March 31, 2008	16,870,002

The amounts shown in the accompanying consolidated balance sheets as of December 31, 2007 and March 31, 2008 amounting to $12,450,000 and $16,870,002, respectively, represent advance payments to a ship-builder for five LPG carriers under construction and to sellers for three new re-sale M.R. product tankers and one second-hand LPG carrier.

As of December 31, 2007, the two vessels under construction and the one second-hand LPG carrier, named “Navig8 Fidelity” (formerly “Hull No. 3013”) which was delivered to the Company on January 9, 2008, “Navig8 Faith” (formerly “Hull No. 3014”) which was delivered to the Company on February 27, 2008 and “Gas Premiership” (formerly “Premiership”), which was delivered to the Company on March 19, 2008, have a total purchase price of $134,000,000.

On March 18, 2008, the Company entered into a memorandum of agreement to acquire from an unaffiliated entity an under construction M.R. type product carrier named “Hyundai Mipo Hull Number 2139” which is scheduled to be delivered in the second quarter of 2009. The purchase price of this vessel is $57,500,000. On March 27, 2008, the Company paid 10% of the purchase price, to a joint escrow account in the name of the seller and buyer.

On February 25, 2008, the Company signed contracts with Mitsubishi Corporation of Japan for the construction of five LPG carriers scheduled for delivery between September 2010 and December 2011, at an aggregate contract price of Yen 12,008,000,000 (approx. $111,185,185 based upon the prevailing USD/JPY exchange rate of $1.00:JPY 108). On February 29, 2008, the Company paid the first 10% installment of Yen 1,200,800,000 ($11,120,002).

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

8. Vessels, net


			Accumulated			Net Book
	Vessel cost		Depreciation			Value
Balance, December 31, 2007		428,842,324		(33,747,002	)		395,095,322
Acquisitions		135,364,782		—			135,364,782
Depreciation for the period		—		(5,294,745	)		(5,294,745	)

Balance, March 31, 2008		564,207,106		(39,041,747	)		525,165,359

The Company acquired the vessels “Navig8 Fidelity”, “Navig8 Faith” and “Gas Premiership” on January 9, 2008, February 27, 2008 and March 19, 2008, respectively, at respective cash purchase prices of $57,500,000, $57,500,000 and $19,000,000 and related capitalized costs of $1,364,782.

On November 8, 2007 the Company concluded memoranda of agreement for the disposal of the vessels “Gas Oracle”, “Gas Nemesis” “Gas Renovatio” to unaffiliated third parties for $6,000,000, $10,750,000 (plus an amount of $443,999 which represents the dry-docking cost incurred in 2007) and $10,525,000, respectively. The vessels were delivered to her new owners on January 28, 2008, January 29, 2008 and March 19, 2008, respectively, realized an aggregate gain from the sale of vessels of approximately $1,673,321 which is included in the Company’s condensed consolidated statement of income.

On February 29, 2008, the Company entered into separate memoranda of agreement with affiliated parties to acquire one second hand LPG carrier named “Gas Natalie” with expected delivery in August 2008 and four under construction LPG carriers, the “Gas Defiance” which was delivered on August 1, 2008, the “Gas Shuriken, the “K411” and “K412” with expected delivery in November 2008, May 2009 and July 2009, respectively. There were no advance payments made for these vessels. The aggregate purchase price of all these vessels is $92,620,000.

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 three month periods ended March 31, 2007 and 2008, the amounts of $99,096 and $490,264, respectively, are included in voyage revenues.


		Fair value of		Total accumulated			Amortization for			Unamortized balance
	End of Time	acquired time		amortization as at			the quarter ended			as at
Vessel	Charter	Charter		December 31, 2007			March 31, 2008			March 31, 2008
Fair value of acquired time charter — Liability
Sir Ivor	April 2009		479,000		(262,417	)		(40,890	)		175,693
Lyne	April 2009		483,000		(266,035	)		(40,963	)		176,002
Batangas	June 2008		340,000		(255,349	)		(42,326	)		42,325
Sea Bird II	May 2009		409,000		(127,008	)		(50,913	)		231,079
Gas Renovatio	January 2008		310,000		(271,093	)		(38,907	)		—
Chiltern	March 2008		300,000		(201,444	)		(98,556	)		—
Gas Kalogeros	May 2008		411,000		(231,280	)		(134,054	)		45,666
Gas Sikousis	May 2008		142,000		(71,958	)		(43,655	)		26,388

Total			2,874,000		(1,686,584	)		(490,264	)		697,153

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

10. Deferred Finance Charges

Gross deferred finance charges amounting to $512,795 and $657,670 as at December 31, 2007 and March 31, 2008, respectively, represent fees paid to the lenders for obtaining the related loans, net of amortization. For the three month periods ended March 31, 2007 and 2008, the amortization of deferred financing charges amounted to $20,847 and $37,222, 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 $3,972,370 and $3,290,917 represent time charter revenues received in advance as of December 31, 2007 and as of March 31, 2008, respectively.

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 ($98,329 up to March 31, 2008) will be returned to the charterer at the end of the three years bareboat charter.

(b) On December 6, 2006 an amount of $643,500, net of commission of $16,500, was received from the charterer of LPG carrier “Gas Oracle” which is equal to three-months hire. On October 15, 2007 the amount of $420,000 was deducted from the above deposit and transferred under the “Gas Tiny” new charter as deposit equal to three-months hire. This amount will be returned to the charterer at the end of the two years new charter or when an acceptable letter of guarantee is presented to the Company.

(c) 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 ($69,042 up to March 31, 2008) will be returned to the charterer at the end of the three years bareboat charter.

(d) 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 ($37,405 up to March 31, 2008) will be returned to the charterer at the end of the three years bareboat charter.

13. Long-term Debt


	Fortis Bank			DnB Nor Bank			Scotia Bank		Deutche Bank		Total
December 31, 2007		62,705,000			76,556,015			6,497,514		—		145,758,529
Additions		—			15,750,000			43,125,000		40,250,000		99,125,000
Payments		(1,517,430	)		(7,172,378	)		—		—		(8,689,808	)

March 31, 2008		61,187,570			85,133,637			49,622,514		40,250,000		236,193,721

On January 8, 2008, the Company, under the terms of Scotiabank Facility, drew down the second advance of $43,125,000 to part finance the acquisition of the “Navig8 Fidelity” (formerly “Hull No 3013”).

On January 17, 2008 the Company signed a commitment letter with the Deutsche Bank to partially finance the acquisition of one new, under construction M.R. product carrier, named “Navig8 Faith”, by one of the Company’s wholly owned subsidiaries. The senior secured term loan facility amounted to

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

13. Long-term Debt — Continued

$40,250,000 and was fully drawn down in one tranche on February 19, 2008. The tranche is repayable in forty-seven consecutive quarterly installments of $625,000 each three months after the drawdown, plus a balloon payment of $10,875,000 payable together with the last installment. The term loan charges interest at LIBOR plus 0.70% and is secured by first priority mortgage over the vessel involved, plus the assignment of the vessel insurances, earnings and the pledge of the Company’s earnings account with the lender, and the guarantee of the ship-owning company, as owner of the vessel.

On February 13, 2008 the Company signed a commitment letter with the DnB NOR Bank to partially finance the acquisition of one second hand LPG vessel, named “Gas Premiership”, by one of the Company’s wholly owned subsidiaries. The senior secured term loan facility amounted to $15,750,000 and was fully drawn down on March 19, 2008 and is repayable in sixteen semi-annual installments of $690,000 each plus a balloon payment of $4,710,000 payable together with the last installment. The term loan charges interest at LIBOR plus 0.85% and is secured by a first priority mortgage over the vessel involved and cross-collateralized with security vessels under the “DnB Loan” plus the assignment of the vessel’s insurances, earnings and the vessel’s operating and retention account, and the guarantee of StealthGas Inc.

On February 25, 2008, the Company signed a commitment letter with Emporiki Bank, secured by the Gas Sikousis and the Gas Kalogeros, two vessels already owned by two of the Company’s wholly-owned subsidiaries. The senior secured term loan facility amounted to $29,437,000 and is expected to be drawn down in full in September 2008 in connection with the part funding of deposits required for vessels under construction as ordered by the Company. The term loan is repayable in twenty four semi-annual installments of $858,583 each plus a balloon payment of $8,831,008 payable together with the last installment. The term loan’s interest rate is LIBOR plus 0.90%. In addition to first priority mortgages over the Gas Sikousis and the Gas Kalogeros, the term loan is secured by the assignment of these vessels’ insurances, earnings and operating and retention accounts and Company’s guarantee.

The annual principal payments to be made, for the four loans, after March 31, 2008 are as follows:


Year ended	Amount
2009		21,681,656
2010		19,920,100
2011		19,767,120
2012		19,767,120
2013		19,767,120
Thereafter		135,290,605

Total		236,193,721

Total bank loan interest expense for the three month periods ended March 31, 2007 and 2008 amounted to $2,324,564 and $2,682,595, respectively, and is included in Interest and finance costs in the accompanying condensed consolidated statements of income.

At March 31, 2008, the Company was in compliance with all covenants under the term loans and the amount outstanding of $236,193,721 bore an average interest rate (including the margin) of 4.42%.

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

14. Interest Rate Swap Agreements

On January 15, 2008, the Company entered into an agreement to enter into an interest rate swap in regard to the “Fortis Loan” in order to hedge the Company’s variable interest rate exposure. The amount of the swap will be $41,702,995 over its five-year life commencing January 17, 2008. The rate is fixed throughout the period at 3.66%.

On March 18, 2008, the Company entered into an agreement to enter into an interest rate swap in regard to the “Deutsche Bank Loan” in order to hedge the Company’s variable interest rate exposure. The notional amount of the swap will be $40,250,000 over its five-year life commencing March 20, 2008. The rate is fixed throughout the period at 3.09%.

As of March 31, 2008, the Company is a party to six floating-to-fixed interest rate swaps, which are designated and qualified as cash flow hedges, with various major financial institutions covering notional amounts aggregating approximately $168,537,570 pursuant to which it pays fixed rates ranging from 3.09% to 5.58% and receives floating rates based on LIBOR (approximately 2.8% as of March 31, 2008). Three from the above swap agreements did not meet hedge accounting criteria and accordingly changes in its fair value amounted to $25,945 (loss) and $2,302,293 (loss) for the quarters ended March 31, 2007 and 2008, respectively, were recognized in the accompanying condensed consolidated statement of income. The changes in fair value of the three swap agreements which qualified as effective cash flow hedge were recorded as a component in comprehensive loss and as of March 31, 2007 and 2008 amounted to $107,231 (income) and $1,463,868 (loss), respectively, and changes in ineffective portion of the swaps of $33,791 (income) and $29,222 (loss), respectively, charged in the consolidated statement of income under the caption “Change in fair value of derivatives”.These agreements contain no leverage features and have maturity dates ranging from September 2011 to March 2016. Under SFAS No. 157, the interest rate (LIBOR) used in the measurement of the swaps’ fair value falls into level 2 of the hierarchy for ranking the quality and reliability of the information used to determine fair values. As of March 31, 2008, the Company has recorded an asset of $138,521 and a liability of $7,292,017 related to the fair values of these swaps.

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. The Plan expires ten years from the date of adoption.

On March 18, 2008, the Company granted 9,396 of non-vested restricted shares to the Deputy Chairman of the Board and Executive Director of the Company and 16,609 restricted shares to certain employees of the “Manager” (a related party) under the Plan, treated as non-employees for stock based compensation recording purposes. The fair value of each share granted was $13.52 which is equal to the market value of the Company’s common stock on the day of a grant. The restricted shares will be vested over 3 years from the grant date, (13,003 shares on March 18, 2009, 6,501 shares on March 18, 2010 and 6,501 shares on March 18, 2011).
As of March 31, 2007 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 SFAS No. 123(R) Share-Based Payment with respect to recognizing stock based compensation expense for restricted share awards with graded

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

15. Equity Compensation Plan — Continued

vesting because it considers that this method to better match expense with benefits received. In addition, non-vested awards granted to non-employees are measured at its 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 unvested shares for the three month periods ended March 31, 2008 amounted to $560,651, and is included in the 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 three month periods ended March 31, 2008, is presented below:


			Weighted average
	Number of		grant date fair value
	restricted shares		per non-vested share
Non-vested, January 1, 2008		170,000		16.34
Granted		26,005		13.52
Vested		—		—
Forfeited		—		—

Non-vested, March 31, 2008		196,005		15.97

As of March 31, 2008, there was $2,227,898 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 2.6 years.

16. 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. The weighted-average number of common shares outstanding does not include any potentially dilutive securities or any unvested restricted shares of common stock. These unvested restricted shares are considered contingently returnable until the restrictions lapse and will not be included in the basic net income per share calculation until the shares are vested.

Diluted earnings per share give effect to all potentially dilutive securities. Our unvested restricted shares were potentially dilutive securities during the three month periods ended March 31, 2008. The difference between basic and diluted weighted-average number of shares outstanding was the dilutive effect of the unvested restricted shares and is computed as follows:


	Three month periods ended March 31,
	2007		2008
Net income		6,622,454		7,431,443

Basic Weighted average shares — outstanding		14,400,000		22,114,105
Effect on dilutive securities:
Unvested restricted shares		—		36,502

Diluted Weighted average shares — outstanding		14,400,000		22,150,607
Basic earnings per share		0.46		0.34

Diluted earnings per share		0.46		0.34

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

17. Dividends Paid

On February 19, 2008 the Company’s Board of Directors declared a cash dividend for 22,284,105 common shares outstanding of $0.1875 per common share, payable on March 5, 2008 to stockholders of record on February 29, 2008. The total amount of $4,178,270 was paid on March 03, 2008.

18. Voyage Expenses and Vessel Operating Expenses

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


	Three month periods ended March 31,
Voyage Expenses	2007		2008
Port expenses		336,441		31,762
Bunkers		252,977		157,401
Commissions charged by third parties		336,712		380,765
Commissions charged by related party (Note 4)		260,915		331,084
Other voyage expenses		88,403		2,903

Total		1,275,448		903,915


	Three month periods ended March 31,
Vessels' Operating Expenses	2007		2008
Crew wages and related costs		2,829,302		4,194,745
Insurance		383,570		381,645
Repairs and maintenance		615,893		824,781
Spares and consumable stores		942,670		1,204,680
Miscellaneous expenses		521,359		679,941

Total		5,292,794		7,285,792

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 significant 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 three month periods ended March 31, 2007 and 2008 was $7,991 and $12,638, respectively. In October 2005, the Company entered into a three-year cancelable operating lease for an armored car that terminates in October 2008. Rental expense for the three month periods ended March 31, 2007 and 2008 was $11,090 and $12,822, respectively and is recorded in the consolidated statement of income under the caption “General and administrative expenses”.

Future rental commitments were payable as follows:


March 31,	Office Lease		Car Rent		Total
2009		47,056		27,000		74,056
2010		35,292		—		35,292

		82,348		27,000		109,348

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

19. Commitments and Contingencies — Continued

•

As described in Note 6, during the three month periods ended March 31, 2008 the Company entered into memorandum of agreement with third party to acquire one vessel under construction and signed contracts with a shipyard for the construction of five vessels. As of March 31, 2008, the unpaid balance of the purchase price for these vessels was $168,685,186, net of $16,868,519 already advanced to the sellers in 2008.

•

As described in Note 7, during the three month periods ended March 31, 2008 the Company entered into separate memoranda of agreement with affiliated parties to acquire four vessels under construction and one second-hand vessel. As of March 31, 2008, the unpaid balance of the purchase price for these vessels was $92,620,000.

20. Subsequent Events

(a)

On May 27, 2008 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 June 13, 2008 to stockholders of record on June 6, 2008. The total amount of $4,183,146 was paid on June 11, 2008.

(b)

On June 25, 2008, the Company entered into a memorandum of agreement to acquire from an unaffiliated entity an under construction M.R. type product carrier named “Hull No 061” which is scheduled to be delivered in the fourth quarter of 2009. The purchase price of this vessel is $57,500,000. On June 30, 2008, the Company paid 10% of the purchase price, to a joint escrow account in the name of the seller and buyer.

(c)

On July 4, 2008, the Company signed a Letter of Intent with a shipyard in China to construct two 156,000 deadweight Suezmax oil tankers with a contract price of $85,800,000 each for delivery between May and July and between July and September 2011 respectively. We also have an option to be exercised at a later date to construct two further such vessels with delivery dates in the first and second quarters of 2012.

(d)

On July 30, 2008 the Company entered into a $33,600,000 facility agreement with the National Bank of Greece (the “NBG Facility”) to partially finance the acquisition of two under construction LPG carriers, named “Gas Defiance”, and “Gas Shuriken” by two of the Company’s wholly owned subsidiaries. The NBG facility will be fully drawn down in two tranches of up to $16,800,000 in August and October 2008 upon delivery of each vessel. The tranches will be repayable in twenty-four consecutive semi-annual installments of $980,000 each six months after the final drawdown and in no case later than nine months after the first drawdown, plus a balloon payment of $10,080,000 payable together with the last installment. The first tranche amounted to mi$16,620,000 was drawn down on August 1, 2008 to part finance the acquisition of the “Gas Defiance”. The term loan will charge interest at LIBOR plus 0.95% until the repayment of the third installment and 0.80% thereafter and will be secured by first priority mortgage over the vessels involved, plus the assignment of the vessel insurances, earnings and the pledge of the Company’s earnings account with the lender, and the guarantee of the ship-owning company, as owner of the vessel.

(e)

On August 1, 2008, the Company took delivery of the “Gas Defiance”.

(f)

On August 4, 2008 the Company signed a commitment letter with the Nordea Bank Finland Plc, London Branch (“Nordea”) to provide financing of its working capital with an amount of $70,000,000 (the “Nordea Facility”). The senior secured credit facility will be fully drawn down in up to three tranches at any time in the next three months. The facility will be repayable in twenty eight consecutive quarterly installments of $1,350,000 each three months after the loan

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

20. Subsequent Events — Continued

agreement date, plus a balloon payment of $33,550,000 payable together with the last installment. The term loan charges interest at LIBOR plus 1.30% and is secured by first priority cross collateralized mortgages over the seven collateral vessels involved (Gas Haralambos, Gas Zael, Gas Spirit, Chiltern, Gas Natalie, Catterick, Gas Sophie) plus the assignment of the collateral vessels insurances, earnings and the pledge of the Company’s shares and earnings account with the lender, and the guarantee of the ship-owning companies, as owners of the vessels.

(g)

On August 5, 2008 the Company entered into a foreign currency forward contract 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 6. Under the contract the Company will convert approximately JPY5.4 billion of cash outflows to U.S. dollars at various dates from 2009 to 2011.

(h)

On August 19, 2008 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 September 5, 2008 to stockholders of record on August 29, 2008. The total amount of $4,183,146 was paid on September 03, 2008.

(i)

On September 1, 2008 the Company signed a commitment letter with Scotiabank (Ireland) Limited to part finance the construction of a 156,000 deadweight Suezmax tanker to be constructed in China for delivery in July 2011. The senior secured term loan facility amounted to $64,350,000 and is expected to be drawn down in stages as the vessel is constructed. The term loan once fully drawn down upon the delivery of the vessel, which is expected in July 2011, is repayable, commencing six months after drawdown in 14 consecutive semi-annual installments of $1,935,000 each plus a balloon payment of $37,260,000 payable together with the last installment. The term loan’s interest rate is LIBOR plus 1.30%. In addition to first priority mortgage over the vessel, the term loan is secured by the assignment of the vessel’s insurances, refund guarantees from the shipyard, earnings, operating and retention accounts and the guarantee of the ship owning subsidiary. As at September 26, 2008 this facility was undrawn.

(j)

On September 2, 2008 the Company concluded a memorandum of agreement for the disposal of the vessel “Gas Amazon” to an unaffiliated third party for $11,000,000 with expected delivery date in November 2008. The Company expects to realize a gain from the sale of the above vessel of approximately $3,020,000 and will be included in the Company’s consolidated statement of income in the quarter in which the vessel will be delivered to her new owners.

(k)

On September 11, 2008, the Company signed a commitment letter with KFW IPEX-Bank Limited to part finance the construction of a 156,000 deadweight Suezmax tanker to be constructed in China for delivery in April 2011. The senior secured term loan facility amounted to $64,500,000 and is expected to be drawn down in stages as the vessel is constructed. The term loan once fully drawn down upon the delivery of the vessel, which is expected in April 2011, is repayable, commencing three months after drawdown in 40 consecutive quarterly installments of $1,075,000 each plus a balloon payment of $21,500,000 payable together with the last installment. The term loan’s interest rate is LIBOR plus 1.30%. In addition to first priority mortgage over the vessel, the term loan is secured by the assignment of these vessels’ insurances, refund guarantees from the shipyard, earnings, operating and retention accounts and the guarantee of the ship owning subsidiary. As at September 26, 2008 this facility was undrawn.

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

20. Subsequent Events — Continued

(l)

On September 18, 2008, the Company signed a commitment letter with EFG Eurobank Ergasias S.A. to part finance the acquisition of one under construction M.R. type product carrier named “Hyundai Mipo Hull Number 2139” to be constructed in Korea for delivery in the second quarter of 2009. The senior secured term loan facility will be the lesser of the amount of $41,000,000 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 April 2009, and will be repayable, with the first installment commencing three months after the drawdown in ten consecutive quarterly installments of $850,000 each and thirty consecutive quarterly installments of $550,000 each plus a balloon payment of $16,000,000 payable together with the last installment. The term loan’s interest rate is LIBOR plus 1.50%. In addition to first priority mortgage over the vessel, the term loan is secured by the assignment of these vessels’ insurances, earnings, operating and retention accounts and the guarantee of the ship owning subsidiary.


	Pages
Unaudited Condensed Consolidated Balance Sheets — December 31, 2007 and March 31, 2008		2
Unaudited Condensed Consolidated Statements of Income for the three month periods ended March 31, 2007 and 2008		3
Unaudited Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 2007 and 2008		4
Notes to the Unaudited Condensed Consolidated Financial Statements		5 — 17