UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~2020



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: ~~001-36139~~001-36798

PANGAEA LOGISTICS SOLUTIONS LTD.

(Exact name of Registrant as specified in its charter)



Bermuda						98-1205464
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

c/o Phoenix Bulk Carriers (US) LLC

109 Long Wharf

Newport, RI 02840

(Address of principal executive offices)~~(Zip~~ (Zip Code)

Registrant’s telephone number, including area code: (401) 846-7790

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	PANL	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

~~YES~~ x NO ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

~~YES~~ x NO ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and ~~smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated Filer¨

☐

Accelerated Filer¨

☐

Non-accelerated Filer¨

☒

Smaller reporting companyx

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

~~YES~~ ¨ NO x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, par value ~~$0.01~~$0.0001 per share, ~~43,795,182~~45,065,662 shares outstanding as of ~~November 9, 2017.~~

August 12, 2020.

TABLE OF CONTENTS


				Page
PART I		FINANCIAL INFORMATION

Item 1.		Financial Statements		~~Page~~
~~PART I~~		~~FINANCIAL INFORMATION~~
~~Item 1.~~		~~Financial Statements~~

	Consolidated Balance Sheets as of ~~September 30, 2017~~June 3 0 , 2020 (unaudited) and December 31, ~~2016~~2019		3

		Consolidated Statements of Operations (unaudited) for the three and ~~nine~~six months ended ~~September 30, 2017~~June 3 0 , 2020 and ~~2016~~2019		4

		Consolidated Statements of Stockholders' Equity (unaudited) for the three and six months ended June 3 0 , 2020 and 2019		5

		Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~six months ended ~~September 30, 2017~~June 3 0 , 2020 and ~~2016~~2019		56

		Notes to Consolidated Financial Statements (unaudited)		67

Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations		1820

Item 3.		Quantitative and Qualitative Disclosures about Market Risks		2529

Item 4.		Controls and Procedures		2529

PART II		OTHER INFORMATION
Item 1.		Legal Proceedings		2630
Item 1A.		Risk Factors		2630
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		2631
Item 3.		Defaults upon Senior Securities		2631
Item 4.		Mine Safety Disclosures		2631
Item 5.		Other Information		2631
Item 6.		Exhibits		2732
Signatures					33

Pangaea Logistics Solutions Ltd.

Consolidated Balance Sheets


	September 30, 2017			December 31, 2016				June 30, 2020		December 31, 2019
	(unaudited)							(unaudited)
Assets							Assets
Current assets							Current assets
Cash and cash equivalents	$	29,336,687		$	22,322,949		Cash and cash equivalents	$	46,993,067	$	50,555,091
Restricted cash	4,000,000			6,100,000			Restricted cash	1,000,000		1,000,000
Accounts receivable (net of allowance of $4,183,826 at September 30, 2017 and $4,752,265 at December 31, 2016)	30,915,458			20,476,797
Accounts receivable (net of allowance of $1,723,510 and $1,908,841 at June 30, 2020 and December 31, 2019, respectively)							Accounts receivable (net of allowance of $1,723,510 and $1,908,841 at June 30, 2020 and December 31, 2019, respectively)	18,197,943		28,309,402
Bunker inventory	16,470,391			13,202,937			Bunker inventory	11,648,319		21,001,010
Advance hire, prepaid expenses and other current assets	13,465,163			6,441,583			Advance hire, prepaid expenses and other current assets	15,575,442		18,770,825
Vessel held for sale							Vessel held for sale	4,563,000		8,319,152
Total current assets	94,187,699			68,544,266			Total current assets	97,977,771		127,955,480

Restricted cash							Restricted cash	1,500,000		1,500,000
Fixed assets, net	290,837,537			275,265,672			Fixed assets, net	278,383,059		281,474,857
Investments in newbuildings in-process	—			18,383,964
Vessels under capital lease	30,285,569			—
Investment in newbuildings in-process							Investment in newbuildings in-process	15,390,634		15,357,189
Finance lease right of use assets, net							Finance lease right of use assets, net	46,259,982		53,615,305
Total assets	$	415,310,805		$	362,193,902		Total assets	$	439,511,446	$	479,902,831

Liabilities and stockholders' equity							Liabilities and stockholders' equity
Current liabilities							Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	30,160,371		$	23,231,179		Accounts payable, accrued expenses and other current liabilities	$	26,528,278	$	39,973,635
Related party debt	6,929,885			15,972,147			Related party debt	242,852		332,987
Deferred revenue	7,913,518			6,422,982			Deferred revenue	5,343,392		14,376,394
Current portion of secured long-term debt	17,830,996			19,627,846			Current portion of secured long-term debt	21,490,674		22,990,674
Current portion of capital lease obligations	1,759,303			—
Current portion of finance lease liabilities							Current portion of finance lease liabilities	6,927,362		12,549,208
Dividend payable	7,238,401			12,624,825			Dividend payable	95,500		631,961
Total current liabilities	71,832,474			77,878,979			Total current liabilities	60,628,058		90,854,859

Secured long-term debt, net	113,430,205			107,637,851			Secured long-term debt, net	78,779,452		83,649,717
Obligations under capital lease	25,472,098			—
Finance lease liabilities, net							Finance lease liabilities, net	54,028,493		57,498,217
Long-term liabilities - other - Note 8							Long-term liabilities - other - Note 8	5,108,793		4,828,364

Commitments and contingencies (Note 7)
Commitments and contingencies - Note 7							Commitments and contingencies - Note 7

Stockholders' equity:							Stockholders' equity:
Preferred stock, $0.0001 par value, 1,000,000 shares authorized and no shares issued or outstanding	—			—
Common stock, $0.0001 par value, 100,000,000 shares authorized; 43,795,182 shares issued and outstanding at September 30, 2017; 36,590,417 shares issued and outstanding at December 31, 2016	4,380			3,659
Preferred stock, $0.0001 par value, 1,000,000 shares authorized and 0 shares issued or outstanding							Preferred stock, $0.0001 par value, 1,000,000 shares authorized and 0 shares issued or outstanding	—		—
Common stock, $0.0001 par value, 100,000,000 shares authorized; 45,065,662 shares issued and outstanding at June 30, 2020; 44,886,122 shares issued and outstanding at December 31, 2019							Common stock, $0.0001 par value, 100,000,000 shares authorized; 45,065,662 shares issued and outstanding at June 30, 2020; 44,886,122 shares issued and outstanding at December 31, 2019	4,507		4,489
Additional paid-in capital	154,781,731			133,677,321			Additional paid-in capital	158,874,237		157,504,895
Accumulated deficit	(13,618,666		)	(17,409,579		)
Retained earnings							Retained earnings	8,946,381		12,736,580
Total Pangaea Logistics Solutions Ltd. equity	141,167,445			116,271,401			Total Pangaea Logistics Solutions Ltd. equity	167,825,125		170,245,964
Non-controlling interests	63,408,583			60,405,671			Non-controlling interests	73,141,525		72,825,710
Total stockholders' equity	204,576,028			176,677,072			Total stockholders' equity	240,966,650		243,071,674
Total liabilities and stockholders' equity	$	415,310,805		$	362,193,902		Total liabilities and stockholders' equity	$	439,511,446	$	479,902,831

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

Pangaea Logistics Solutions Ltd.

Consolidated Statements of ~~Income~~Operations

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016				2020		2019		2020		2019

Revenues:													Revenues:
Voyage revenue	$	93,688,834		$	65,986,320		$	251,608,298		$	161,509,615		Voyage revenue	$	66,857,166	$	77,430,067	$	153,381,057	$	143,281,414
Charter revenue	13,334,202			4,797,572			31,293,637			10,173,501			Charter revenue	3,539,004		5,860,548		12,895,050		19,553,386
	107,023,036			70,783,892			282,901,935			171,683,116				70,396,170		83,290,615		166,276,107		162,834,800
Expenses:													Expenses:
Voyage expense	44,305,446			29,166,651			124,174,513			74,434,257			Voyage expense	31,757,910		37,224,412		79,553,822		69,398,519
Charter hire expense	34,764,942			19,655,327			91,140,160			43,199,730			Charter hire expense	15,203,731		18,317,345		47,529,178		43,264,714
Vessel operating expense	9,144,472			7,483,507			26,810,071			22,277,417			Vessel operating expense	9,325,060		11,074,547		19,258,922		20,828,922
General and administrative	4,762,860			3,179,287			11,418,900			9,151,608			General and administrative	3,872,388		5,358,991		7,865,631		9,392,671
Depreciation and amortization	3,950,661			3,532,171			11,604,168			10,576,223			Depreciation and amortization	4,345,707		4,491,327		8,587,958		8,868,515
Loss on sale and leaseback of vessels	70,000			—			9,275,042			—
Loss on impairment of vessels													Loss on impairment of vessels	1,801,039		—		1,801,039		—
Loss on sale of vessels													Loss on sale of vessels	297,475		—		219,485		—
Total expenses	96,998,381			63,016,943			274,422,854			159,639,235			Total expenses	66,603,310		76,466,622		164,816,035		151,753,341

Income from operations	10,024,655			7,766,949			8,479,081			12,043,881			Income from operations	3,792,860		6,823,993		1,460,072		11,081,459

Other income (expense):
Other (expense) income:													Other (expense) income:
Interest expense, net	(2,106,139		)	(1,258,105		)	(5,981,237		)	(4,158,143		)	Interest expense, net	(2,000,550)		(2,101,052)		(4,116,870)		(4,308,220)
Interest expense on related party debt	(79,713		)	(79,712		)	(236,538		)	(235,212		)	Interest expense on related party debt	—		(11,138)		—		(38,036)
Unrealized (loss) gain on derivative instruments, net	(59,138		)	161,002			430,869			1,212,434
Other income (expense)	977,795			(8,097		)	1,885,801			(42,754		)
Total other expense, net	(1,267,195		)	(1,184,912		)	(3,901,105		)	(3,223,675		)
Unrealized gain (loss) on derivative instruments, net													Unrealized gain (loss) on derivative instruments, net	1,404,317		215,171		(1,512,777)		2,504,957
Other income													Other income	98,635		232,092		695,191		399,912
Total other (expense), net													Total other (expense), net	(497,598)		(1,664,927)		(4,934,456)		(1,441,387)

Net income	8,757,460			6,582,037			4,577,976			8,820,206
Net income (loss)													Net income (loss)	3,295,262		5,159,066		(3,474,384)		9,640,072
Income attributable to non-controlling interests	(1,576,209		)	(517,701		)	(787,063		)	(1,429,132		)	Income attributable to non-controlling interests	(290,086)		(1,126,565)		(315,815)		(1,905,017)
Net income attributable to Pangaea Logistics Solutions Ltd.	$	7,181,251		$	6,064,336		$	3,790,913		$	7,391,074
Net income (loss) attributable to Pangaea Logistics Solutions Ltd.													Net income (loss) attributable to Pangaea Logistics Solutions Ltd.	$	3,005,176	$	4,032,501	$	(3,790,199)	$	7,735,055

Earnings per common share:													Earnings per common share:
Basic	$	0.18		$	0.17		$	0.10		$	0.21		Basic	$	0.07	$	0.09	$	(0.09)	$	0.18
Diluted	$	0.17		$	0.17		$	0.10		$	0.21		Diluted	$	0.07	$	0.09	$	(0.09)	$	0.18

Weighted average shares used to compute earnings
per common share
Weighted average shares used to compute earnings per common share:													Weighted average shares used to compute earnings per common share:
Basic	40,796,867			35,165,532			37,225,825			35,148,793			Basic	43,445,789		42,767,785		43,442,773		42,684,966
Diluted	41,074,592			35,347,403			37,674,123			35,299,839			Diluted	43,445,789		43,293,022		43,442,773		43,202,187

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

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Stockholders' Equity

(unaudited)


	Common Stock					Additional Paid-in Capital		Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest		Total Stockholders' Equity
	Shares	Amount
Balance at March 31, 2020	45,112,062	$	4,512	$	158,564,477	$	5,941,205	$	164,510,194	$	72,851,439	$	237,361,633
Share-based compensation	—	—		420,717		—		420,717		—		420,717
Issuance of restricted shares, net of forfeitures	(46,400)	(5)		(110,957)		—		(110,962)		—		(110,962)



Net Income	—	—		—		3,005,176		3,005,176		290,086		3,295,262
Balance at June 30, 2020	45,065,662	$	4,507	$	158,874,237	$	8,946,381	$	167,825,125	$	73,141,525	$	240,966,650

Balance at December 31, 2019	44,886,122	$	4,489	$	157,504,895	$	12,736,580	$	170,245,964	$	72,825,710	$	243,071,674
Share-based compensation				1,523,486				1,523,486				1,523,486
Issuance of restricted shares, net of forfeitures	179,540	18		(154,144)				(154,126)				(154,126)
Net (Loss) Income						(3,790,199)		(3,790,199)		315,815		(3,474,384)
Balance at June 30, 2020	45,065,662	$	4,507	$	158,874,237	$	8,946,381	$	167,825,125	$	73,141,525	$	240,966,650

	Common Stock					Additional Paid-in Capital		Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest		Total Stockholders' Equity
	Shares	Amount
Balance at March 31, 2019	44,504,090	$	4,450	$	156,621,001	$	9,439,753	$	166,065,204	$	72,457,398	$	238,522,602
Share-based compensation	—	—		370,908		—		370,908		—		370,908
Issuance of restricted shares, net of forfeitures	(52,150)	(5)		(136,148)		—		(136,153)		—		(136,153)
Distribution to Non-Controlling Interests										(4,666,665)		(4,666,665)
Common Stock Dividend						(1,555,818)		(1,555,818)				(1,555,818)
Net income	—	—		—		4,032,501		4,032,501		1,126,565		5,159,066
Balance at June 30, 2019	44,451,940	$	4,445	$	156,855,761	$	11,916,436	$	168,776,642	$	68,917,298	$	237,693,940

Balance at December 31, 2018	43,998,560	4,400		155,946,452		5,737,199		161,688,051		71,678,946		233,366,997
Share-based compensation	—	—		1,045,507		—		1,045,507		—		1,045,507
Issuance of restricted shares, net of forfeitures	453,380	45		(136,198)		—		(136,153)		—		(136,153)
Distribution to Non-Controlling Interests	—	—		—		—		—		(4,666,665)		(4,666,665)
Common Stock Dividend	—	—		—		(1,555,818)		(1,555,818)		—		(1,555,818)
Net Income	—	—		—		7,735,055		7,735,055		1,905,017		9,640,072
Balance at June 30, 2019	44,451,940	$	4,445	$	156,855,761	$	11,916,436	$	168,776,642	$	68,917,298	$	237,693,940

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

Pangaea Logistics Solutions, Ltd.

Consolidated Statements of Cash Flows

(unaudited)


	Six Months Ended June 30,
	2020		2019
Operating activities
Net (loss) income	$	(3,474,384)	$	9,640,072
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense	8,587,958		8,868,515
Amortization of deferred financing costs	346,985		365,564
Amortization of prepaid rent	61,136		59,299
Unrealized loss (gain) on derivative instruments	1,512,777		(2,504,957)
Gain from equity method investee	(795,988)		(247,312)
Earnings attributable to non-controlling interest recorded as interest expense	28,166		—
(Recovery) provision for doubtful accounts	(185,331)		320,491
Loss on impairment of vessels	1,801,039		—
Loss on sale of vessel	219,485		—
Drydocking costs	(2,882,109)		(1,545,094)
Share-based compensation	1,523,486		1,045,507
Change in operating assets and liabilities:
Accounts receivable	10,296,790		7,984,657
Bunker inventory	9,352,691		1,775,598
Advance hire, prepaid expenses and other current assets	3,991,371		(1,821,751)
Accounts payable, accrued expenses and other current liabilities	(14,444,003)		1,546,305
Deferred revenue	(9,033,002)		(5,902,610)
Net cash provided by operating activities	6,907,067		19,584,284

Investing activities
Purchase of vessels and vessel improvements	(1,652,366)		(25,557,060)
Investment in newbuildings in-process	(33,445)		(7,657,000)
Purchase of fixed assets and equipment	(7,801)		(281,011)
Proceeds from sale of vessels	8,099,667		—
Purchase of derivative instrument	(628,000)		—
Net cash provided by (used in) investing activities	5,778,055		(33,495,071)

Financing activities
Proceeds from long-term debt	—		14,000,000
Payments of related party debt	—		(1,691,964)
Payments of financing fees and debt issuance costs	(149,118)		(277,577)
Payments of long-term debt	(6,568,134)		(12,242,949)
Proceeds from finance leases	—		13,000,000
Dividends paid to non-controlling interests	—		(4,666,665)
Payments of finance lease obligations	(9,091,570)		(2,908,693)
Accrued common stock dividends paid	(536,461)		(3,754,985)
Cash paid for incentive compensation shares relinquished	(154,126)		—
Contributions from non-controlling interest recorded as long-term liability	322,750		—
Payments to non-controlling interest recorded as long-term liability	(70,487)		—
Net cash (used in) provided by financing activities	(16,247,146)		1,457,167

Net decrease in cash, cash equivalents and restricted cash	(3,562,024)		(12,453,620)
Cash, cash equivalents and restricted cash at beginning of period	53,055,091		56,114,735
Cash, cash equivalents and restricted cash at end of period	$	49,493,067	$	43,661,115


Supplemental cash flow information




Cash and cash equivalents	$	46,993,067	$	41,161,115
Restricted cash	2,500,000		2,500,000
	$	49,493,067	$	43,661,115

Nine Months Ended September 30,
2017 2016
Operating activities

Net income $ 4,577,976
$ 8,820,206
Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization expense 11,604,168
10,576,223
Loss on sale and leaseback of vessel 9,134,908
—
Amortization of deferred financing costs 527,348
513,311
Amortization of prepaid rent 91,453
—
Unrealized gain on derivative instruments (430,869 ) (1,212,434 )
(Gain) loss from equity method investee (282,362 ) 68,477
(Recovery of) provision for doubtful accounts (10,356 ) 982,393
Share-based compensation 878,759
274,286
Change in operating assets and liabilities:
Decrease in restricted cash —
499,269
Accounts receivable (10,428,305 ) 3,824,491
Bunker inventory (3,267,454 ) (1,845,707 )
Advance hire, prepaid expenses and other current assets (7,118,526 ) (2,471,301 )
Drydocking costs (1,043,164 ) (42,478 )
Accounts payable, accrued expenses and other current liabilities 8,021,053
(743,918 )
Deferred revenue 1,490,536
(925,490 )
Net cash provided by operating activities 13,745,165
18,317,328

Investing activities

Purchase of vessels (47,328,517 ) (3,372,433 )
Purchase of building and equipment —
(315,818 )
Purchase of non-controlling interest in consolidated subsidiary (832,572 ) —
Net cash used in investing activities (48,161,089 ) (3,688,251 )

Financing activities

Proceeds of related party debt —
1,522,500
Payments of related party debt —
(2,500,497 )
Proceeds from long-term debt 25,000,000
1,375,971
Payments of financing and issuance costs (896,175 ) (45,755 )
Payments of long-term debt (20,635,670 ) (20,809,044 )
Proceeds from sale and leaseback of vessel 28,000,000
—
Payments of capital lease obligations (768,599 ) —
Decrease (increase) in restricted cash 2,100,000
(5,000,000 )
Proceeds from non-controlling interests —
1,600,000
Proceeds from private placement of common stock, net of issuance costs 9,631,530
—
Accrued common stock dividends paid (1,001,424 ) (100,000 )
Net cash provided by (used in) financing activities 41,429,662
(23,956,825 )

Net increase (decrease) in cash and cash equivalents 7,013,738
(9,327,748 )
Cash and cash equivalents at beginning of period 22,322,949
37,520,240
Cash and cash equivalents at end of period $ 29,336,687
$ 28,192,492

Supplemental cash flow information and disclosure of noncash items

Cash paid for interest $ 5,052,102
$ 3,520,635
Conversion of dividend into common stock $ 4,385,000
$ —
Extinguishment of related party loan $ 9,278,800
$ —

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

~~Note 1.~~

NOTE 1 - GENERAL INFORMATION AND RECENT EVENTS

Organization and General ~~Information~~

The accompanying consolidated financial statements include the accounts of Pangaea Logistics Solutions Ltd. and its consolidated subsidiaries (collectively, the “Company”, “Pangaea” “we” or “our”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership, chartering and operation of drybulk vessels. The Company is a holding company incorporated under the laws of Bermuda as an exempted company on April 29, 2014.

~~The~~At June 30, 2020, the Company owns ~~two~~2 Panamax, ~~two~~2 Ultramax Ice Class 1C, ~~five~~and 8 Supramax ~~and two Handymax Ice Class 1A~~ drybulk ~~vessels, including two vessels financed under capital lease obligations.~~vessels. The Company also owns one-third of Nordic Bulk Holding Company Ltd. (“NBHC”), a consolidated joint venture with a fleet of ~~six~~6 Panamax Ice Class 1A drybulk ~~vessels. The Company operates two additional Supramax drybulk~~ vessels ~~under bareboat charter for five-year periods that commenced on July 13, 2016.~~ and has a 50% interest in the owner of a deck barge.

Recent Events

In ~~addition,~~March 2020, the ~~Company, through~~World Health Organization declared the outbreak of a ~~new wholly-owned subsidiary, signed a Memorandum of Agreement to purchase a Supramax bulk carrier built in 2008, for approximately $13.8 million. The vessel is expected~~novel coronavirus strain, or COVID-19, to be ~~delivered~~a pandemic. The COVID-19 pandemic (“COVID-19”) is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Management continues to evaluate the impact of COVID-19 on the industry and its business. At present, the surge in ~~December 2017.~~cases has slowed, or is under control, in many countries around the world, especially those that are core to the dry bulk industry. However it is not possible to forecast the virus spread in the future or ascertain the overall impact of COVID-19 on the Company’s financial position and results of its operations. An increase in the severity or duration or a resurgence of COVID-19 could have a material adverse effect on the Company’s business, results of operations, cash flows and financial condition. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

On January 27, 2017, the Company acquired its consolidated joint venture partner's interest in Nordic Bulk Ventures Holding Company Ltd. (“BVH”). BVH owns m/v Bulk Destiny and m/v Bulk Endurance through wholly-owned subsidiaries. BVH is wholly-owned by the Company after the acquisition.

~~On March 21, 2017, the Company's Board of Directors (the “Board~~”) approved, and on June 27, 2017, the shareholders holding a majority of the issued and outstanding shares of our Common Stock approved, by unanimous written consent, the issuance of shares of our Common Stock in connection with two stock purchase agreements, both dated as of June 15, 2017, (the “~~Agreements”).~~NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Shares of common stock sold under the Agreements totaled 6,533,443. These shares were issued on June 29, 2017 and August 9, 2017 for aggregate net proceeds of $14.1 million of which approximately $4.4 million was issued as in-kind payment of accrued dividends. Upon completion of these transactions, issued and outstanding shares of Common Stock totaled 43,795,182.

~~Note 2. Basis of Presentation~~

The accompanying ~~consolidated balance sheet as of September 30, 2017, the consolidated statements of income and cash flows for the three and nine months ended September 30, 2017 and 2016 are unaudited. The~~ unaudited ~~interim~~ consolidated financial statements have been prepared onin accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and the ~~same basis as the annual consolidated~~instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments that are, in the opinion of management, ~~reflect all adjustments, which include only normal recurring adjustments,~~ necessary ~~to present fairly~~for a fair presentation of the ~~Company’s~~interim period results. These unaudited consolidated financial position as of September 30, 2017 and December 31, 2016, and its results of operations and cash flows for the three and nine months ended September 30, 2017 and 2016. The financial data and the other information disclosedstatements should be read in ~~these notes to~~conjunction with the consolidated financial statements ~~related to these three~~ and ~~nine month periods are unaudited. Certain information and disclosures~~notes thereto included in the annual consolidated financial statements have been omitted for the interim periods pursuant to the rules and regulations of the SEC. The results for the three and nine months ended September 30, 2017 are not necessarily indicative of the resultsour Annual Report on Form 10-K for the year ~~ending~~ended December 31, ~~2017~~2019.

Certain reclassifications have been made to prior periods to conform to current period presentation. There was no impact on total operating expenses or ~~for any other interim period or future years.~~net income (loss) resulting from these reclassifications.

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company are the estimated ~~fair value used in determining loss on sale and leaseback of vessel, the estimated~~ future cash flows used in its impairment analysis, the estimated salvage value used in determining depreciation expense and the allowances for doubtful accounts.

Voyage revenues represent revenues earned by the Company, principally from providing transportation services under voyage charters. A voyage charter involves the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to various cargo handling terms. Under a voyage charter, the service revenues are earned and recognized ratably over the duration of the voyage. A contract is accounted for when it has approval and commitment from both parties, the rights and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Estimated losses under a voyage charter are provided for in full at the time such losses become probable. Demurrage, which is included in voyage revenues, represents payments by the charterer to the vessel owner when loading and discharging time exceed the stipulated time in the voyage charter. Demurrage is measured in accordance with the provisions of the respective charter agreements and the circumstances under which demurrage revenues arise. At the time demurrage revenue can be estimated, it is included in the calculation of voyage revenue and recognized ratably over the duration of the voyage to which it pertains. Voyage revenue recognized is presented net of address commissions.

Charter revenues relate to a time charter arrangement under which the Company is paid to provide transportation services on a per day basis for a specified period of time. Revenues from time charters are earned and recognized on a straight-line basis over the term of the charter, as the vessel operates under the charter. Revenue is not earned when vessels are offhire.

Cash and cash equivalents include short-term deposits with an original maturity of less than three months. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows:


	June 30, 2020		December 31, 2019
	(unaudited)
Money market accounts – cash equivalents	$	34,778,166	$	32,150,342
Cash ⁽¹⁾	12,214,901		18,404,749
Total cash and cash equivalents	$	46,993,067	$	50,555,091
Restricted cash	2,500,000		2,500,000
Total cash, cash equivalents and restricted cash	$	49,493,067	$	53,055,091

⁽¹⁾Consists of cash deposits at various major banks.

Restricted cash at June 30, 2020 and December 31, 2019 consists of $2.5 million held by the facility agent as required by the Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd., Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd., and Bulk Nordic Oshima Ltd. – Dated September 28, 2015 - Amended and Restated Loan Agreement. $1,000,000 restricted cash was reclassified to current assets due to the balloon payments related to the Bulk Nordic Odyssey Ltd. and Bulk Nordic Orion Ltd. tranches due in September of 2020.

Advance hire, prepaid expenses and other current assets were comprised of the following:


	June 30, 2020		December 31, 2019
	(unaudited)
Advance hire	$	4,462,379	$	3,985,826
Prepaid expenses	2,813,696		4,924,557
Accrued receivables	3,869,769		6,466,068
Margin deposit	2,023,596		269,379
Other current assets	2,406,002		3,124,995
	$	15,575,442	$	18,770,825

September 30, 2017 December 31, 2016
(unaudited)
Advance hire $ 5,159,896
$ 2,232,444
Prepaid expenses 646,493
1,844,522
Accrued receivables 5,042,672
1,319,220
Other current assets 2,616,102
1,045,397
$ 13,465,163
$ 6,441,583

Accounts payable, accrued expenses and other current liabilities were comprised of the following:


	June 30, 2020		December 31, 2019
	(unaudited)
Accounts payable	$	16,898,441	$	24,173,291
Accrued expenses	7,077,145		14,883,555
Derivative liabilities	1,356,850		472,073
Other accrued liabilities	1,195,842		444,716
	$	26,528,278	$	39,973,635

September 30, 2017 December 31, 2016
(unaudited)
Accounts payable $ 17,690,288
$ 15,435,179
Accrued voyage expenses 11,656,486
6,955,389
Accrued interest 604,041
412,984
Other accrued liabilities 209,556
427,627
$ 30,160,371
$ 23,231,179
Time charter out contracts

~~Recently Issued Accounting Pronouncements~~

~~In February 2016,~~Charter revenue is earned when the ~~FASB issued an ASU 2016-02, Accounting Standards Update~~Company lets a vessel it owns or operates to a charterer for ~~Leases. The update~~a specified period of time. Charter revenue is ~~intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities~~based on the ~~balance sheet~~agreed rate per day. The charterer has the power to direct the use and ~~disclosing key information about leasing arrangements. A lessee should recognize~~receives substantially all of the economic benefits from the use of the vessel. The Company determined that all time charter contracts are considered operating leases and therefore fall under the scope of ASC 842 because: (i) the vessel is an identifiable asset; (ii) the Company does not have substantive substitution rights; and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benefits from such use.

Time charter in contracts

The Company charters in vessels to supplement its owned fleet to support its voyage charter operations. The Company hires vessels under time charters with third party vessel owners, and recognizes the charter hire payments as an expense on a straight-line basis over the term of the charter. Charter hire payments are typically made in advance, and the unrecognized portion is reflected as advance hire in the ~~statement~~accompanying consolidated balance sheets. Under the time charters, the vessel owner is responsible for the vessel operating costs such as crews, maintenance and repairs, insurance, and stores. As allowed by a practical expedient under ASC 842, the Company made an accounting policy election by class of ~~financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the~~ underlying asset for ~~the lease term. For~~ leases with a term of 12 months or less, to forego recognizing a ~~lessee is permitted to make an accounting policy election by class of underlying~~right-of-use asset ~~not to recognize lease assets~~ and lease ~~liabilities.~~liability on its balance sheet. For the quarter ending June 30, 2020, the Company did not have any time charter in contracts with terms greater than 12 months, as such charter hire expense presented on the consolidated statements of income are lease expenses for chartered in contracts less than 12 months.

Leases under ASC 842

At June 30, 2020, the Company had 6 vessels chartered to customers under time charters that contain leases. These 6 leases varied in original length from 1 day to 72 days. At June 30, 2020, lease payments due under these arrangements totaled approximately $1,611,000 and each of the time charters were due to be completed in 70 days or less. The Company does not typically enter into charters for terms exceeding six months. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. have any sales-type or direct financing leases.

The Company ~~does~~has 2 non-cancelable office leases and non-cancelable office equipment leases and the lease assets and liabilities are not ~~expect adoption~~material.

RevenueRecognition

Voyage revenues represent revenues earned by the Company, principally from providing transportation services under voyage charters. A voyage charter involves the carriage of ~~this guidance~~a specific amount and type of cargo on a load port to ~~have~~discharge port basis, subject to various cargo handling terms. Under a ~~material impact~~voyage charter, the service revenues are earned and recognized ratably over the duration of the voyage. Estimated losses under a voyage charter are provided for in full at the time such losses become probable. Demurrage, which is included in voyage revenues, represents payments by the charterer to the vessel owner when loading and discharging time exceed the stipulated time in the voyage charter. Demurrage is measured in accordance with the provisions of the respective charter agreements and the circumstances under which demurrage revenues arise. Demurrage revenue is included in the calculation of voyage revenue and recognized ratably over the duration of the voyage to which it pertains. Voyage revenue recognized is presented net of address commissions.

Charter revenues relate to a time charter arrangement under which the Company is paid to provide transportation services on ~~its financial statements.~~a per day basis for a specified period of time. Revenues from time charters are earned and recognized on a straight-line basis over the term of the charter, as the vessel operates under the charter and do not fall under the scope of ASC 606, as defined below, revenue is not earned when vessels are offhire.

Recently Issued Accounting Pronouncements Not Yet Adopted

In ~~May 2014,~~March 2020, the FASB issued an ASU ~~2014-09, Accounting Standards Update for Revenue from Contracts with Customers. The core principle~~2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. Companies can apply the ASU immediately, however the guidance will only be available until December 31, 2022. The Company is currently evaluating the impact that ~~an entity should recognize revenue~~adopting this new accounting standard will have on its consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses. For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to ~~depict~~a forward-looking expected credit loss model, which generally will result in the ~~transfer~~earlier recognition of ~~promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange~~allowances for ~~those goods or services.~~losses. The new standard is effective for ~~interim and annual reporting periods in fiscal years that begin after December 15, 2017. Management has organized a working group and is currently analyzing contracts with our customers covering~~ the ~~significant streams~~Company at the beginning of ~~the Company's annual revenues under~~2023. Entities are required to apply the provisions of the ~~new~~ standard ~~as well as changes necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting.~~

While we are continuing to assess all potential impacts of the standard, the Company's preliminary expectation is that revenue from vessels operating on time charter will continue to be recognized under current revenue recognition policies because the services being provided to its customers currently reflect the consideration to which the entity expects to be entitled in exchange for those services, and because these arrangements qualify as single performance obligations that meet the criteria to recognize revenue over time, as the customer is simultaneously receiving and consuming the benefits of these services. The performance obligation in a voyage charter is also the transportation service provided and also meets the criteria to recognize revenue over time. However, under the new standard, our expectation is that revenue for these voyages will be recognized over the period between load port and discharge port in contrast to the current recognition policy to recognize revenue from discharge port to discharge port. The Company also believes that under the new standard, it will recognize an asset from certain costs incurred to fulfill contracts that have not begun to load if they meet the criteria outlined in this update. Such assets will be amortized pro rata over the period of the contract. Neither of these changes is expected to have a material impact on the consolidated financial statements because the number of open voyages at any point in time are not a significant portion of the annual total and the difference in revenue is expected to be only a small percentage of such voyage revenue. The Company will apply the new revenue standard on a modified retrospective basis with a cumulative effect adjustment to the opening balance of retained earnings as of

January 1, 2018. Prior periods will not be retrospectively adjusted. The Company is prepared to implement the new revenue standard on the effective date and will follow recently issued guidance on practical expedients as part of our transition.

In November 2016, the FASB issued an ASU 2016-18 Accounting Standards Update for Statement of Cash Flows. The amendments in this Update provide guidance on the presentation of restricted cash or restricted cash equivalents in the statement of cash flows, thereby reducing the diversity in practice. Specifically, this Update addresses how to classify and present changes in restricted cash or restricted cash equivalents that occur when there are transfers between cash, cash equivalents, and restricted cash or restricted cash equivalents and when there are direct cash receipts into restricted cash or restricted cash equivalents or direct cash payments made from restricted cash or restricted cash equivalents The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The Company does not expect adoption of this guidance to have a material impact on its financial statements.

In August 2017, the FASB issued an ASU 2017-12 Accounting Standards Update for Derivatives and Hedging. The amendments in this Update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early application is permitted in any interim period after issuance of the Update. All transition requirements and elections should be applied to hedging relationships existing on the date of adoption. The effect of adoption should be reflected as of the beginning of the fiscal year of adoption. For cash flow and net investment hedges existing at the date of adoption, an entity should apply a cumulative-effect adjustment ~~related~~ to ~~eliminating the separate measurement of ineffectiveness to accumulated other comprehensive income with a corresponding adjustment to the opening balance of~~ retained earnings as of the ~~beginning of the fiscal year that an entity adopts the amendments in this Update. The amended presentation and disclosure guidance is required only prospectively.~~effective date. The Company ~~does not expect adoption of this~~is currently assessing the new guidance ~~to have a material~~and its impact on its consolidated financial ~~statements.~~

statements, and it intends to adopt the guidance when it becomes effective in the first quarter of 2023.

~~Note 3. Fixed Assets~~

NOTE 3 - FIXED ASSETS

At ~~September~~June 30, ~~2017,~~2020, the Company owned ~~seventeen~~18 dry bulk vessels including ~~two~~3 financed under ~~capital lease obligations.~~finance leases; and 1 barge. The carrying amounts of these vessels, including unamortized drydocking costs, are as follows:


	June 30,		December 31,
	2020		2019
Owned vessels	(unaudited)
m/v BULK PANGAEA	$	14,312,159	$	14,988,076
m/v BULK NEWPORT	12,470,458		12,975,767
m/v NORDIC ODYSSEY ⁽³⁾	22,232,766		22,897,029
m/v NORDIC ORION ⁽³⁾	23,100,663		23,688,812
m/v NORDIC OSHIMA ⁽³⁾	27,646,301		28,325,078
m/v NORDIC ODIN ⁽³⁾	28,060,270		28,094,764
m/v NORDIC OLYMPIC ⁽³⁾	27,983,056		27,931,771
m/v NORDIC OASIS ⁽³⁾	28,609,980		29,190,935
m/v BULK ENDURANCE	24,531,184		25,037,775
m/v BULK FREEDOM	9,806,141		8,269,777
m/v BULK PRIDE	13,028,499		12,996,311
m/v BULK SPIRIT	12,896,925		12,867,060
m/v BULK INDEPENDENCE	14,138,559		14,000,946
m/v BULK FRIENDSHIP	13,741,877		14,052,500

MISS NORA G PEARL ⁽⁴⁾	3,385,815		3,609,851
	275,944,653		278,926,452
Other fixed assets, net	2,438,406		2,548,405
Total fixed assets, net	$	278,383,059	$	281,474,857

Right of Use Assets
m/v BULK DESTINY	$	21,060,499	$	21,484,733
m/v BULK BEOTHUK ^{(1) (2)}	—		6,589,537
m/v BULK TRIDENT	11,802,319		12,095,727
m/v BULK PODS	$	13,397,164	13,445,308
	$	46,259,982	$	53,615,305

September 30, December 31,
2017 2016
Owned vessels (unaudited)
m/v BULK PANGAEA $ 16,768,833
$17,879,380
m/v BULK PATRIOT 11,426,580
12,391,724
m/v BULK JULIANA 11,621,472
12,252,733
m/v NORDIC ODYSSEY 25,981,360
27,021,211
m/v NORDIC ORION 26,819,591
27,874,584
m/v BULK TRIDENT 14,386,864
14,962,163
m/v BULK BEOTHUK ⁽¹⁾
—
12,006,270
m/v BULK NEWPORT 13,312,095
13,473,429
m/v NORDIC BARENTS 3,526,711
3,517,151
m/v NORDIC BOTHNIA 3,518,031
3,520,616
m/v NORDIC OSHIMA 30,428,323
31,346,414
m/v NORDIC OLYMPIC 30,668,705
31,560,965
m/v NORDIC ODIN 30,846,740
31,741,658
m/v NORDIC OASIS 31,915,214
32,834,500
m/v BULK ENDURANCE ⁽²⁾
27,284,169
—
m/v BULK FREEDOM ⁽³⁾
8,942,254
—
287,446,942
272,382,798
Other fixed assets, net 3,390,595
2,882,874
Total fixed assets, net $ 290,837,537
$ 275,265,672

Vessels under capital lease
m/v BULK DESTINY ⁽⁴⁾
$ 23,365,388
$ —
m/v BULK BEOTHUK ⁽¹⁾
$ 6,920,181
$ —
$ 30,285,569
$ —


⁽¹⁾	~~The m/v Bulk Beothuk was sold on June 15, 2017 and simultaneously chartered back under a bareboat charter accounted for as a capital lease, the terms of which are discussed in Note 7.~~


⁽²⁾	~~The m/v Bulk Endurance was delivered to the Company on January 7, 2017.~~


⁽³⁾	~~The Company acquired the m/v Bulk Freedom on June 14, 2017.~~


⁽⁴⁾	~~The Company took delivery of the m/v Bulk Destiny on January 7, 2017 and simultaneously entered into a sale and leaseback financing agreement, the terms of which are discussed in Note 7.~~

⁽¹⁾ In January 2020 the Company completed an early buy-out of the lease for a purchase price of $5.5 million.

⁽²⁾ On June 29, 2020, the Company entered into a memorandum of agreement to sell the Bulk Beothuk, a 2002-built Supramax vessel, to a third party for $4.6 million less a broker commission payable to a third party. The vessel assets were classified as held for sale in the Consolidated Balance Sheet as of June 30, 2020.

⁽³⁾ Vessels are owned by Nordic Bulk Holding Company ~~also operates two dry bulk vessels under bareboat charters accounted for as operating leases, as discussed in Note 7.~~Ltd. (“NBHC”), a consolidated joint venture which the Company has one-third of ownership.

⁽⁴⁾ Venture Barge is owned by a 50% owned consolidated subsidiary.

Long-lived Assets Impairment ~~Considerations.~~Considerations

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying ~~values~~amounts. If indicators of impairment are present, we perform an analysis of the Company’s vessels may not represent their fair market value or the amount that could be obtained by selling the vessel at any point in time because the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the pricing of new vessels, which tendanticipated undiscounted future net cash flows to be cyclical. The carrying value of each group of vessels classified as held and used are reviewed for potential impairment when events or changes in circumstances indicate that the carrying value of a particular group may not be fully recoverable. In such instances, an impairment charge would be recognized if the estimate of the undiscounted future cash flows expected to resultderived from the ~~use of the group and its eventual disposition is less than its carrying value. This~~related long-lived assets. Our assessment is made at the asset group level, which represents the lowest level for which identifiable cash flows are largely independent of other groups of assets. The asset groups established by the Company are defined by vessel size and major characteristic or trade.

~~The significant factors~~On June 29, 2020 the Company entered into an agreement to sell the Bulk Beothuk for $4.6 million, the sale was finalized and ~~assumptions used~~the vessel delivered to its new owner on August 4, 2020. A loss on impairment of $1.8 million was recorded in the ~~undiscounted projected net operating cash flow analysis include~~second quarter of 2020 when the ~~Company’s estimate~~Memorandum of future time charter equivalent "TCE" rates based on current rates under existing charters and contracts. When existing contracts expire, the Company uses an estimated TCE based on actual results and extends these rates out to the end of the vessel’s useful life. TCE rates can be highly volatile, may affect the fair value of the Company’s vessels and may have a significant impact on the Company’s ability to recover the carrying amount of its fleet. Accordingly, the volatility is contemplated in the undiscounted projected net operating cash flow by using a sensitivity analysis based on percent changes in the TCE rates. The Company prepares a series of scenarios in an attempt to capture the range of possible trends and outcomes. Projected net operating cash flows are net of brokerage and address commissions and assume no revenue on scheduled offhire days. The Company uses the current vessel operating expense budget, estimated costs of drydocking and historical general and administrative expenses as the basis for its expected outflows, and applies an inflation factor it considers appropriate. The net of these inflows and outflows, plus an estimated salvage value, constitutes the projected undiscounted future cash flows. If these projected cash flows do not exceedAgreement was signed. As the carrying value of the assets exceeded the fair value, the Company concluded it constituted a triggering event requiring assessment of impairment for its long-lived assets as of June 30, 2020. The Company performed an impairment analysis on each asset group ~~an impairment charge would be recognized.~~

~~During the three months ended September 30, 2017, the Company did not identify any potential triggering events. At December 31, 2016, testing for recoverability indicated that~~and concluded the estimated undiscounted future cash flows were higher than ~~the~~their carrying amount ~~of each long-lived asset group, therefore, the Company did not recognize any~~and as such, no additional loss on ~~impairment.~~impairment was recognized.

~~Note 4. Debt~~NOTE 4 - DEBT

Long-term debt consists of the following:


	June 30, 2020		December 31, 2019		Interest Rate (%) ⁽¹⁾		Maturity Date
	(unaudited)
Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd. Loan Agreement ⁽²⁾	26,966,300		28,466,300		4.06	%	January 2022
Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd. Loan Agreement ^{(2) (3)}	11,354,406		12,854,405		3.77	%	September 2020
Bulk Nordic Oshima Ltd. Amended and Restated Loan Agreement ^{(2) (4)}	12,754,295		13,504,295		2.56	%	September 2021
Bulk Nordic Oasis Ltd. Loan Agreement	14,750,000		15,500,000		4.30	%	December 2021
The Amended Senior Facility - Dated May 13, 2019 (formerly The Amended Senior Facility - Dated December 21, 2017) ⁽⁵⁾
Bulk Nordic Six Ltd. - Tranche A	12,766,663		13,299,997		3.69	%	May 2024
Bulk Nordic Six Ltd. - Tranche B	2,720,000		2,850,000		2.97	%	May 2024
Bulk Pride - Tranche C	5,750,000		6,300,000		4.69	%	May 2024
Bulk Independence - Tranche E	13,000,000		13,500,000		2.84	%	May 2024
Bulk Freedom Loan Agreement	3,500,000		3,800,000		4.06	%	June 2022
109 Long Wharf Commercial Term Loan	648,466		703,266		3.69	%	April 2026
Total	$	104,210,130	$	110,778,263
Less: unamortized bank fees	(3,940,004)		(4,137,872)
	$	100,270,126	$	106,640,391
Less: current portion	(21,490,674)		(22,990,674)
Secured long-term debt, net	$	78,779,452	$	83,649,717

September 30, 2017 December 31, 2016
(unaudited)
Bulk Pangaea Secured Note $ —
$ 1,040,625
Bulk Patriot Secured Note —
1,087,500
Bulk Trident Secured Note (1)
3,887,500
5,737,500
Bulk Juliana Secured Note (1)
2,028,126
3,042,186
Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd. Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd. and Bulk Nordic Oshima Ltd. Amended and Restated Loan Agreement (2)
71,700,000
77,325,001
Bulk Atlantic Secured Note —
5,350,000
Bulk Phoenix Secured Note (1)
4,916,663
6,816,685
Term Loan Facility of USD 13,000,000 (Nordic Bulk Barents Ltd. and Nordic Bulk Bothnia Ltd.) 6,119,550
7,097,820
Bulk Nordic Oasis Ltd. Loan Agreement (2)
18,875,000
20,000,000
Bulk Nordic Six Ltd. Loan Agreement 19,135,000
—
Bulk Freedom Loan Agreement 5,325,000
—
109 Long Wharf Commercial Term Loan 949,864
1,032,067
Phoenix Bulk Carriers (US) LLC Automobile Loan 24,483
28,582
Phoenix Bulk Carriers (US) LLC Master Loan 197,362
236,242
Total 133,158,548
128,794,208
Less: unamortized bank fees (1,897,347 ) (1,528,511 )
131,261,201
127,265,697
Less: current portion (17,830,996 ) (19,627,846 )
Secured long-term debt, net $ 113,430,205
$ 107,637,851

⁽¹⁾As of June 30, 2020.


⁽¹⁾	The Bulk Juliana Secured Note, the Bulk Trident Secured Note and the Bulk Phoenix Secured Note are cross-collateralized by the m/v Bulk Juliana, m/v Bulk Trident and m/v Bulk Newport and are guaranteed by the Company.

⁽²⁾

⁽²⁾The borrower under this facility is NBHC, of which ~~the Company and its joint venture partners, STST and ASO2020, each own one-third. NBHC is consolidated in accordance with Accounting Standards Codification ("ASC") 810,~~ ~~Consolidation~~, and as such, amounts pertaining to the non-controlling ownership held by these third parties in the financial position of NBHC are reported as non-controlling interest in the accompanying balance sheets.

~~The Senior Secured Post-Delivery Term Loan Facility~~

~~On April 14, 2017,~~ the Company ~~through~~and its ~~wholly owned subsidiaries, Bulk Pangaea, Bulk Patriot, Bulk Juliana, Bulk Trident~~joint venture partners, STST and ~~Bulk Phoenix, entered into the Fourth Amendatory Agreement, (the "Fourth Amendment"), amending~~ASO2020, each own one-third. NBHC is consolidated in accordance with ASC 810-10 and ~~supplementing the Loan Agreement dated April 15, 2013,~~ as amended by a First Amendatory Agreement dated May 16, 2013, the Second Amendatory Agreement dated August 28, 2013 and the Third Amendatory Agreement dated July 14, 2016. The Fourth Amendment advanced the final repayment dates for Bulk Pangaea and Bulk Patriot and extended the final maturity date and modified the repayment schedules, as follows:

~~Bulk Pangaea Secured Note~~

Initial amount of $12,250,000, entered into in December 2009, for the acquisition of m/v Bulk Pangaea. The Fourth Amendment advanced the final installment to April 18, 2017, thereby increasing the amount to $1,040,625, which was paid on the maturity date.

~~Bulk Patriot Secured Note~~

Initial amount of $12,000,000, entered into in September 2011, for the acquisition of the m/v Bulk Patriot. The Fourth Amendment advanced the final installment to April 18, 2017, thereby increasing the amount to $1,087,500, which was paid on the maturity date.

~~Bulk Trident Secured Note~~

Initial amount of $10,200,000, entered into in April 2012, for the acquisition of the m/v Bulk Trident. The Fourth Amendment extends the final maturity date and modifies the repayment schedule. The first and second quarterly installments following the amendment were increased to $650,000 and the third and fourth installments were increased to $435,000. These are followed by two installments of $327,500 and three of $300,000. A balloon payment of $1,462,500 is payable on July 19, 2019. The interest rate was fixed at 4.29% through April 19, 2017 and is floating at LIBOR plus 3.50% (4.78% at September 30, 2017), since April 19, 2017.

~~Bulk Juliana Secured Note~~

Initial amount of $8,112,500, entered into in April 2012, for the acquisition of the m/v Bulk Juliana. The Fourth Amendment did not change this tranche, the balance of which is payable in six quarterly installments of $507,031. The final payment is due in July 19, 2018. The interest rate is fixed at 4.38%.

~~Bulk Phoenix Secured Note~~

Initial amount of $10,000,000, entered into in May 2013, for the acquisition of m/v Bulk Newport. The Fourth Amendment did not change this tranche, the balance of which is payable in two installments of $700,000 and seven installments of $442,858. A balloon payment of $1,816,659 is payable on July 19, 2019. The interest rate is fixed at 5.09%.

The agreement contains financial covenants that require the Company to maintain a minimum net worth and minimum liquidity, on a consolidated basis. The facility also contains a consolidated leverage ratio and a consolidated debt service coverage ratio. In addition, the facility contains other Company and vessel related covenants that, among other things, restrict changes in management and ownership of the vessel, declaration of dividends, further indebtedness and mortgaging of a vessel without the bank’s prior consent. It also requires minimum collateral maintenance, which is tested at the discretion of the lender. As of September 30, 2017 and December 31, 2016, the Company was in compliance with these covenants.

~~Bulk Atlantic Secured Note~~

Initial amount of $8,520,000, entered into on February 18, 2013, for the acquisition of m/v Bulk Beothuk. The loan required repayment in 8 equal quarterly installments of $90,000 beginning in May 2013, 12 equal quarterly installments of $295,000 and a balloon payment of $4,170,000 due in February 2018. The loan was repaid in conjunction with the sale of the vessel on June 6, 2017.

~~Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd. Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd. And Bulk Nordic Oshima Ltd. – Dated September 28, 2015 - Amended and Restated Loan Agreement~~

The amended agreement advanced $21,750,000 in respect of each the m/v Nordic Odin and the m/v Nordic Olympic; $13,500,000 in respect of each the m/v Nordic Odyssey and the m/v Nordic Orion, and $21,000,000 in respect of the m/v Nordic Oshima.

~~The agreement requires repayment of the advances as follows:~~

~~In respect of the Odin and Olympic advances, repayment to be made in 28 equal quarterly installments of $375,000 per borrower (one of which was paid prior~~such, amounts pertaining to the ~~amendment~~non-controlling ownership held by ~~each borrower) and balloon payments~~these third parties in the financial position of ~~$11,233,150 due with each of~~NBHC are reported as non-controlling interest in the ~~final installments in January 2022.~~accompanying balance sheets.

In respect of the Odyssey and Orion advances, repayment to be made in 20 quarterly installments of $375,000 per borrower and balloon payments of $5,677,203 due with each of the final installments in September 2020.

~~In respect of the Oshima advance, repayment to be made in 28 equal quarterly installments of $375,000 and a balloon payment of $11,254,295 due with the final installment in September 2021.~~

⁽³⁾Interest on 50% of the advances to Bulk Nordic Odyssey and Bulk Nordic Orion was fixed at 4.24% in March ~~2017.~~2017 and Interest on the remaining advances ~~to Odyssey and Orion~~ is floating at LIBOR plus 2.40% ~~(3.55% at~~. The Company plans to refinance or pay off the balloon payments of $11.4 million maturing in September ~~30, 2017). Interest on 50%~~ of ~~the advances to Odin and Olympic was fixed at 3.95% in January 2017. Interest on the remaining advances to Odin and Olympic was floating at LIBOR plus 2.0% and was fixed at 4.07% on April 27, 2017.~~ 2020.

⁽⁴⁾Interest on 50% of the advance to Bulk Nordic Oshima was fixed at 4.16% in January ~~2017.~~2017 and Interest on the remaining advance ~~to Oshima~~ is floating at LIBOR plus 2.25% ~~(3.55% at September 30, 2017)~~.

~~The amended loan~~⁽⁵⁾This facility is ~~secured~~cross-collateralized by ~~first preferred mortgages on~~ the vessels m/v ~~Nordic Odin,~~Bulk Endurance, m/v ~~Nordic Olympic, m/v Nordic Odyssey, m/v Nordic Orion~~Bulk Pride, and m/v ~~Nordic Oshima,~~Bulk Independence and is guaranteed by the ~~assignment of earnings, insurances and requisite compensation of the five entities, and by guarantees of their shareholders.~~Company.

The ~~amended agreement contains one~~future minimum annual payments under the debt agreements are as follows:


	Years ending December 31,
	(unaudited)
2020 (remainder of the year)	$	16,422,540
2021	33,140,563
2022	28,602,568
2023	3,536,268
2024	22,352,925
Thereafter	155,266
	$	104,210,130

Financial Covenants

Under the Company's respective debt agreements, the Company is required to comply with certain financial ~~covenant that requires the Company~~covenants, including to maintain minimum liquidity and a collateral maintenance ratio clause, which requires the aggregate fair market value of the vessels plus the net realizable value of any additional collateral provided, to remain above defined ~~ratios. At September 30, 2017~~ratios and ~~December 31, 2016, the Company was in compliance with this clause.~~

~~The Bulk Nordic Oasis Ltd. - Loan Agreement - Dated December 11, 2015~~

The agreement advanced $21,500,000 in respect of the m/v Nordic Oasis. The agreement requires repayment of the advance in 24 equal quarterly installments of $375,000 beginning on March 28, 2016 and a balloon payment of $12,500,000 due with the final installment in March 2022. Interest on this advance is fixed at 4.30%.

The loan is secured by a first preferred mortgage on the m/v Nordic Oasis, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders. Additionally, the agreement contains a collateral maintenance ratio clause which requires the fair market value of the vessel plus the net realizable value of any additional collateral previously provided, to ~~remain above defined ratios. As of September 30, 2017 and December 31, 2016, the Company was in compliance with this covenant.~~

~~Term Loan Facility of USD 13,000,000 (Nordic Bulk Barents Ltd. and Nordic Bulk Bothnia Ltd.)~~

Barents and Bothnia entered into a secured Term Loan Facility of $13,000,000 in two tranches of $6,500,000 which were drawn in conjunction with the delivery of the m/v Bulk Bothnia on January 23, 2014 and the m/v Bulk Barents on March 7, 2014. The loan is secured by mortgages on the m/v Nordic Bulk Barents and m/v Nordic Bulk Bothnia and is guaranteed by the Company.

The facility bears interest at LIBOR plus 2.50% (3.80% at September 30, 2017). The loan requires repayment in 22 equal quarterly installments of $163,045 (per borrower) beginning in June 2014, one installment of $163,010 (per borrower) and a balloon payment of $1,755,415 (per borrower) due in December 2019. In addition, any cash in excess of $750,000 per borrower on any repayment date shall be applied toward prepayment of the relevant loan in inverse order, so the balloon payment is

~~prepaid first. The agreement also contains a profit split in respect of the proceeds from the sale of either vessel and a minimum value clause ("MVC").~~maintain positive working capital. The Company was in compliance with ~~this covenant at September~~all applicable financial covenants as of June 30, ~~2017~~2020 and December 31, ~~2016.~~2019.

~~The Bulk Nordic Six Ltd. - Loan Agreement -- Dated December 21, 2016~~

The agreement advanced $19,500,000 in respect of the m/v Bulk Endurance on January 7, 2017, in two tranches. The agreement requires repayment of Tranche A, totaling $16,000,000, in 3 equal quarterly installments of $100,000 beginning on April 7, 2017 and, thereafter, 17 equal quarterly installments of $266,667 and a balloon payment of $11,667,667 due with the final installment in March 2022. Interest on this advance was fixed at 4.74% on March 27, 2017. The agreement also advanced $3,500,000 under Tranche B, which is payable in 18 equal quarterly installments of $65,000 beginning on October 7, 2017, and a balloon payment of $2,330,000 due with the final installment in March 2022. Interest on this advance is floating at LIBOR plus 6.00% (7.30% at September 30, 2017).

The loan is secured by a first preferred mortgage on the m/v Bulk Endurance, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders. Additionally, the agreement contains a minimum liquidity requirement, positive working capital of the borrower and a collateral maintenance ratio clause which requires the fair market value of the vessel plus the net realizable value of any additional collateral previously provided, to remain above defined ratios.

~~The Bulk Freedom Corp. Loan Agreement -- Dated June 14, 2017~~

The agreement advanced $5,500,000 in respect of the m/v Bulk Freedom on June 14, 2017. The agreement requires repayment of the loan in 8 quarterly installments of $175,000 and 12 quarterly installments of $150,000 beginning on September 14, 2017. A balloon payment of $2,300,000 is due with the final installment. Interest is floating at LIBOR plus 3.75% (5.05% at September 30, 2017).

The loan is secured by a first preferred mortgage on the m/v Bulk Freedom, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders. Additionally, the agreement contains a collateral maintenance ratio clause which requires the fair market value of the vessel plus the net realizable value of any additional collateral previously provided, to remain above defined ratios.

~~109 Long Wharf Commercial Term Loan~~

~~Initial amount of $1,096,000 entered into on May 27, 2016. The~~ ~~Long Wharf Construction to Term Loan~~ was repaid from the proceeds of this new facility. The loan is payable in 120 equal monthly installments of $9,133. Interest is floating at the 30 day LIBOR plus 2.00% (3.30% at September 30, 2017). The loan is collateralized by all real estate located at 109 Long Wharf, Newport, RI, and a corporate guarantee of the Company. The loan contains a maximum loan to value covenant and a debt service coverage ratio. At September 30, 2017 and December 31, 2016, the Company was in compliance with these covenants.

~~Phoenix Bulk Carriers (US) LLC Automobile Loan~~

The Company purchased a commercial vehicle for use at the site of its port project on the United States' East Coast. The total loan amount of $29,435 is payable in 60 equal monthly installments of $539. Interest is fixed at 3.74%.

~~Phoenix Bulk Carriers (US) LLC Master Equipment Loan~~

The Company purchased commercial equipment for use at the site of its port project on the United States' East Coast. The total loan amount of $250,536 is payable in 48 equal monthly installments of $5,741. Interest is fixed at 4.75%.

~~The future minimum annual payments (excluding unamortized bank fees) under the debt agreements are as follows:~~

Years ending
September 30,
(unaudited)
2018 $ 17,830,996
2019 17,999,412
2020 25,225,098
2021 18,921,949
2022 52,779,228
Thereafter 401,865
$ 133,158,548

~~Note 5. Derivative Instruments and Fair Value Measurements~~NOTE 5 - DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS

~~Interest-Rate Swaps~~

From time to time, the Company enters into interest rate swap agreements to mitigate the risk of interest rate fluctuations on its variable rate debt. The Company was party to one interest rate swap, which was entered into in February 2011, as required by the ~~109 Long Wharf Construction to Term Loan~~ ~~agreement. Under the terms of the swap agreement, the interest rate was fixed at 6.63%. The swap was cancelled in conjunction with, and the outstanding balance was financed by, the~~ ~~109 Long Wharf Commercial Term Loan~~ ~~in May 2016, which is discussed in Note 4.~~

The Company did not elect to designate the swap as a hedge at inception, pursuant to ASC 815, Derivatives and Hedging. Accordingly, changes in the fair value are recorded in current earnings in the accompanying consolidated statements of income.

The aggregate change in the fair value of the interest rate swap agreement for the nine months ended September 30, 2016 was a loss of $104,000 which was reflected in the unrealized (loss) gain on derivative instruments in the accompanying consolidated statements of operations.

Forward freight agreements

The Company assesses risk associated with fluctuating future freight rates and, when appropriate, hedges identified economic risk with appropriate derivative instruments, specifically forward freight agreements (FFAs). ~~Such~~These economic hedges do not ~~always~~usually qualify for hedge accounting under ASC 815 and as such, the usage of such derivatives can lead to fluctuations in the Company’s reported results from operations on a period-to-period basis. ~~Between November 2016 and September 30, 2017, the Company entered into FFAs that were not designated for hedge accounting.~~ The aggregate fair value of ~~these~~ FFAs at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 were ~~assets of approximately $675,000, which are included in other current assets on the consolidated balance sheets, and~~ liabilities of approximately ~~$21,000,~~$31,590 and $150,000, respectively, which are included in other current liabilities on the consolidated balance sheets. The change in the aggregate fair value of the FFAs during the three ~~and nine~~ months ended ~~September~~June 30, ~~2017~~2020 and 2019 are ~~a loss~~gains of approximately ~~$379,000~~$104,000 and ~~a gain of approximately $696,225,~~$557,000, respectively, which are included in unrealized gain (loss) ~~gain~~ on derivative instruments in the accompanying consolidated statements of ~~operations. There were no open positions, and therefore no gain or loss~~income. The change in the ~~three and nine~~aggregate fair value of the FFAs during the six months ended ~~September~~June 30, ~~2016.~~2020 and 2019 are gains of approximately $118,170 and $117,000, respectively, which are included in unrealized gain (loss) on derivative instruments in the accompanying consolidated statements of income.

Fuel Swap Contracts

The Company continuously monitors the market volatility associated with bunker prices and seeks to reduce the risk of such volatility through a bunker hedging program. ~~During 2017 and 2016, the~~The Company ~~entered~~enters into ~~various~~ fuel swap contracts that ~~were~~are not designated for hedge ~~accounting.~~accounting under ASC 815 and as such, the usage of such derivatives can lead to fluctuations in the Company’s reported results from operations on a period-to-period basis. The aggregate fair value of these fuel swaps at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 are ~~assets~~liabilities of approximately ~~$38,000~~$1,509,000 and ~~$304,000,~~$322,000, respectively, which are included in other current ~~assets~~liabilities on the consolidated balance sheets. The change in the aggregate fair value of the fuel swaps during the three ~~and nine~~ months ended ~~September~~June 30, ~~2017~~2020 and 2019 are ~~gains~~a gain of approximately ~~$319,000~~$1,364,000 and ~~losses~~a loss of approximately ~~$265,000,~~$342,000, respectively, which are included in unrealized gain (loss) ~~gain~~ on derivative instruments in the accompanying consolidated statements of ~~operations.~~income. The change in the aggregate fair value of the fuel swaps during the ~~three and nine~~six months ended ~~September~~June 30, ~~2016~~2020 and 2019 are ~~losses~~a loss of approximately ~~$156,000~~$1,187,000 and ~~gains~~a gain of approximately ~~$1,109,000,~~$2,388,000, respectively, which are included in unrealized gain (loss) ~~gain~~ on derivative instruments in the accompanying consolidated statements of income.

Interest rate cap

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and interest rate caps as part of its interest rate risk management strategy. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.

In January 2020, the Company paid $628,000 for interest rate cap contracts to mitigate the risk associated with increases in interest rates on our sale and lease back financing arrangements of the four new-buildings. In the event that the three-month LIBOR rate rises above the applicable strike rate, the Company would receive quarterly payments related to the spread difference.

The following table summarizes these derivative instruments as of June 30, 2020.


				Fair Value			Notional Amount
Interest Rate Derivative	Effective Date	Maturity Date	Interest Rate Strike	June 30, 2020	December 31, 2019	June 30, 2020	December 31, 2019
Interest rate cap contract - 1	November 15, 2020	April 30, 2026	3.25%	$38,870	$—	$5,742,750	$—
Interest rate cap contract - 2	December 15, 2020	May 31, 2026	3.25%	$40,743	$—	$5,742,750	$—
Interest rate cap contract - 3	May 15, 2021	November 30, 2026	3.25%	$52,278	$—	$5,654,336	$—
Interest rate cap contract - 4	May 15, 2021	November 30, 2026	3.25%	$52,278	$—	$5,654,336	$—
Total				$184,169

These interest rate cap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change as income or expense during the period in which the change occurs. For the three and six months ended June 30, 2020, the Company recorded losses of $63,921 and 443,831, respectively, related to changes in the fair value of the interest rate cap contracts.

The three levels of the fair value hierarchy established by ASC 820, Fair Value Measurements and Disclosures, in order of priority are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 fair value measurements include cash, money-market accounts and restricted cash accounts.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

Level 3 – Inputs that are unobservable (for example cash flow modeling inputs based on assumptions).

The following table summarizes assets and liabilities measured at fair value on a recurring basis at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016:~~2019:


										Balance at
	Balance at September 30, 2017		Level 1		Level 2		Level 3			June 30, 2020		Level 1		Level 2		Level 3
	(unaudited)									(unaudited)
Margin accounts	$	2,688,122	$	2,688,122	$	—	$	—	Margin accounts	$	2,023,596	$	2,023,596	$	—	$	—
Fuel swaps	$	38,319	$	—	$	38,319	$	—	Fuel swaps	$	(1,509,429)	$	—	$	(1,509,429)	$	—
Freight forward agreements	$	675,275	$	—	$	675,275	$	—	Freight forward agreements	$	(31,590)	$	—	$	(31,590)	$	—
Interest Rate Derivative									Interest Rate Derivative	$	184,169			$	184,169	$	—


	Balance at December 31, 2016			Level 1		Level 2			Level 3			Balance at December 31, 2019		Level 1		Level 2		Level 3
Margin accounts	$	488,084		$	488,084	$	—		$	—	Margin accounts	$	269,379	$	269,379	$	—	$	—
Fuel swaps	$	303,675		$	—	$	303,675		$	—	Fuel swaps	$	(322,313)	$	—	$	(322,313)	$	—
Freight forward agreements	$	(20,950	)	$	—	$	(20,950	)	$	—	Freight forward agreements	$	(149,760)	$	—	$	(149,760)	$	—

The estimated fair values of the Company’s forward freight agreements and fuel swap contracts are based on market prices obtained from an independent third-party valuation specialist based on published ~~indexes.~~indices. Such quotes represent the estimated amounts the Company would receive or pay to terminate the contracts. The interest rate caps contracts are valued using analysis obtained from independent third party valuation specialists based on market observable inputs, representing Level 2 assets.

~~Note 6. Related Party Transactions~~NOTE 6 - RELATED PARTY TRANSACTIONS

December 31, 2016 Activity September 30, 2017
(unaudited)
Included in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets:

Affiliated companies (trade payables) $ 1,109,570
34,994
$ 1,144,564

Included in current related party debt on the consolidated balance sheets:

Loan payable – 2011 Founders Note $ 4,325,000
—
$ 4,325,000
Interest payable in-kind - 2011 Founders Note ⁽ⁱ⁾
368,347
236,538
604,885
Promissory Note 2,000,000
—
2,000,000
Loan payable – BVH shareholder (STST)⁽ⁱⁱ⁾
9,278,800
(9,278,800 ) —
Total current related party debt $ 15,972,147
$ (9,042,262 ) $ 6,929,885

⁽ⁱ⁾~~Paid in cash~~

⁽ⁱⁱ⁾~~ST Shipping~~Amounts and ~~Transport Pte. Ltd. ("STST")~~

~~In November 2014, the Company entered into a $5,000,000 Promissory Note (the “Note”) with Bulk Invest, Ltd., a company controlled by the Founders. The Note is~~notes payable ~~on demand. Interest on the Note is 5%. The Company repaid a net amount of $3,000,000 since the Note's inception.~~

~~BVH entered into an agreement for the construction of two new ultramax newbuildings in 2013. Shareholder loans totaling $9,278,800 at December 31, 2016, were provided in order~~ to make deposits on these contracts. The loans were converted to equity in conjunction with the acquisition of the noncontrolling interest in BVH on January 27, 2017. BVH is a wholly-owned subsidiary of the Company after the acquisition.

On October 1, 2011, the Company entered into a $10,000,000 loan agreement with the Founders, which was payable on demand at the request of the lenders (the 2011 Founders Note). The note bears interest at a rate of 5%. The balance of the 2011 Founders Note was $4,325,000 at September 30, 2017 and December 31, 2016.

~~Dividends payable~~related parties consist of the ~~following, all~~following:


	December 31, 2019		Activity		June 30, 2020
					(unaudited)
Included in trade accounts receivable and voyage revenue on the consolidated balance sheets and statements of income, respectively:
Trade receivables due from King George Slag ⁽ⁱ⁾	$	457,629	$	(129,999)	$	327,630

Included in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets:
Affiliated companies (trade payables) ⁽ⁱⁱ⁾	5,679,768		1,233,527		6,913,295

Included in current related party debt on the consolidated balance sheets:

Interest payable - 2011 Founders Note	332,987		(90,135)		242,852
Total current related party debt	$	332,987	$	(90,135)	$	242,852

i.King George Slag LLC is a joint venture of which ~~are payable to related parties:~~the Company owns 25%

ii.Seamar Management S.A. ("Seamar")

2008
common
stock
dividend 2012
common
stock
special
dividend 2013
common
stock
dividend 2013
Odyssey
and Orion
dividend Total
Balance at December 31, 2015 2,474,125
2,934,357
6,411,540
904,803
12,724,825
Paid in cash (100,000 ) —
—
—
(100,000 )
Balance at December 31, 2016 2,374,125
2,934,357
6,411,540
904,803
12,624,825
Converted to common shares (2,374,125 ) (2,010,875 ) —
—
(4,385,000 )
Paid in cash (100,000 ) (1,001,424 ) —
—
(1,001,424 )
Balance at September 30, 2017 $ —
$ (77,942 ) $ 6,411,540
$ 904,803
$ 7,238,401

Under the terms of a technical management agreement between the Company and Seamar Management S.A. (“Seamar”), an equity method investee, Seamar is responsible for the day-to-day operations for certain of the Company’s owned ~~vessels and the two vessels operating under bareboat charters.~~vessels. During the three months ended June 30, 2020 and ~~nine-month periods ended September 30, 2017 and 2016,~~2019, the Company incurred technical management fees of approximately ~~$718,000~~$655,000 and ~~$2,022,000; and $538,000 and $1,411,000,~~$793,000, respectively, under this arrangement. ~~These~~During six months ended June 30, 2020 and 2019, the Company incurred technical management fees ~~are included in vessel operating expenses in the consolidated statements~~ of ~~income.~~approximately $1,363,000 and $1,510,000, respectively, under this arrangement. The total amounts payable to Seamar at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016~~2019 were approximately ~~$1,145,000~~$6,913,000 and ~~$1,110,000,~~$5,680,000, respectively.

Dividends payable to related parties consist of the following:


	2013 common stock dividend
Balance at December 31, 2019	$	478,359
Paid in cash	(478,359)
Balance at June 30, 2020	$	—

~~Note 7. Commitments~~NOTE 7 - COMMITMENTS AND CONTINGENCIES

The Company's leases are secured by the assignment of earnings and ~~Contingencies~~insurances and by guarantees of the Company.

Vessel ~~Sales and Leasebacks~~Acquisition Accounted for as ~~Capital Leases~~a Finance Lease (in accordance with previous accounting guidance - ASC 840)

~~The Company's fleet includes one vessel financed under a sale and leaseback financing arrangement accounted for as a capital lease.~~ The selling price of the ~~vessel~~m/v Bulk Destiny to the new owner (lessor) was $21.0 million and the fair value of the vessel at the inception of the lease was $24.0 million. The difference between the selling price and the fair value of the vessel was recorded as prepaid rent and is being amortized over the 25 year estimated useful life of the vessel. Prepaid rent is included in ~~vessel~~finance lease right of use assets (previously "vessels under capital ~~lease~~lease") on the consolidated balance sheet at ~~September~~June 30, ~~2017.~~2020. Minimum lease payments fluctuate based on three-month LIBOR and are payable quarterly over the seven year lease term, with a ~~balloon payment~~purchase obligation of ~~$11,200,000~~$11.2 million due with the final lease payment in January 2024. Interest is floating at LIBOR plus 2.75% ~~(3.85%~~(4.12% including the margin, at inception of the lease). The Company will own this vessel at the end of the lease term.

~~The Company's fleet also includes one vessel financed under a sale and leaseback (bareboat charter) accounted for as a capital lease.~~ The selling price of the m/v Bulk Beothuk was ~~$7,000,000~~$7.0 million and the fair value iswas estimated to be the same. The lease is payable at $3,500 per day every fifteen days over the five year lease term, and a balloon payment of ~~$4,000,000~~$4.0 million is due with the final lease payment in June 2022. The implied interest rate at inception was 11.83%. In January 2020 the Company completed

an early buy-out of the lease for a purchase price of $5.5 million. On June 29, 2020, the Company signed a memorandum of agreement to sell the Bulk Beothuk for $4.6 million after brokerage commissions. The Company recorded an impairment charge of $1.8 million, and recorded the carrying amount of the vessel as vessels held for sale in its Consolidated Balance Sheet as of June 30, 2020.

The selling price of the m/v Bulk Trident was $13.0 million and the fair value was estimated to be the same. The Company simultaneously leased the vessel back from the buyer. The minimum lease payments fluctuate based on three-month LIBOR and are payable monthly over the eight-year lease term. The Company has the option to purchase the vessel at the end of the third year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. Interest is ~~fixed~~floating at ~~11.83%~~LIBOR plus 1.7% (2.06% including the margin, at inception of the lease). The Company will own this vessel at the end of the lease term.

The selling price of the m/v Bulk PODS was $14.8 million and the fair value was estimated to be the same. The Company simultaneously leased the vessel back from the buyer. The minimum lease payments fluctuate based on three-month LIBOR and are payable monthly over the eight-year lease term. The Company has the option to purchase the vessel at the end of the third year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. Interest is floating at LIBOR plus 1.7% (2.00% including the margin, at inception of the lease). The Company will own this vessel at the end of the lease term.

Vessel Acquisition Accounted for as a Finance Lease (in accordance with new accounting guidance - ASC 842)

In February 2019, the Company acquired the m/v Bulk Spirit for $13.0 million, which is the estimated fair value and simultaneously entered into a failed sale and leaseback of the vessel. The Company determined that the transfer of the vessel to the lessor was not a sale in accordance with ASC 606, because control of the vessel was not transferred to the lessor. The lease is classified as finance lease in accordance with ASC 842, because the lease transfers ownership of the vessel to the Company by the end of the lease term. The minimum lease payments include interest at 5.10% for the first five years. Interest fluctuates based on the three-month LIBOR for the remaining three years of the eight-year lease term. The Company has the option to purchase the vessel at the end of the second year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. The Company is obligated to repurchase the vessel at the end of the lease term. A balloon payment of $3.9 million is due with the final lease payment in March 2027. This lease is secured by the assignment of earnings and insurances and by a guarantee of the Company.

In September 2019, the Company acquired the m/v Bulk Friendship for $14.1 million, which is the estimated fair value and simultaneously entered into a failed sale and leaseback of the vessel. The Company determined that the transfer of the vessel to the lessor was not a sale in accordance with ASC 606, because control of the vessel was not transferred to the lessor. The lease is classified as finance lease in accordance with ASC 842, because the lease includes a fixed price purchase option, which the Company expects to exercise at the end of the lease term. The minimum lease payments include imputed interest at 5.29%. The Company has the option to purchase the vessel at the end of the third year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. In the event the Company has not exercised any of the purchase options during the term of the charter then the Company shall have a final purchase option to purchase the vessel at the end of the fifth year at a fixed price of $7.8 million. This lease is secured by the assignment of earnings and insurances and by a guarantee of the Company.

Vessel Newbuildings

During second and third quarter of 2019, the Company entered into 2 vessel newbuilding contracts to build 4 new high ice class post-panamax 95,000 dwt dry bulk vessels. The new vessels, with a building cost of approximately between $37.7 million to $38.3 million each, are expected to be delivered in 2021. As of June 30, 2020, the Company has made deposits of $15.4 million for the 4 new vessels. The second installments of 20% are due and payable upon launching of the vessels and the final payments are due upon delivery of the vessels.

The Company entered into a series of transactions to finance its 4 new post-panamax dry bulk vessels, to be delivered in 2021, under sale and leaseback transactions. The agreements obligate the Company to sell the vessels upon completion of construction at the lesser of approximately $32 million or 85% of fair market value at closing. Following the sale, the Company is obligated to charter the vessels from the buyer under a bareboat charter for a period of 15 years with a purchase obligation of $2.5 million at the end of year 15. The Company has options to purchase the vessels at designated prices starting the sixth year after delivery of each vessel. The Company expects to account for these transactions as failed sale and leaseback transactions and classify the leases as finance leases.

The Company has also entered into a LLC agreement with the non-controlling interest holder of NBP which includes certain obligations as described in Note 8.

Long-term Contracts Accounted for as Operating Leases

On July 5, 2016, the Company entered into five-year bareboat charter agreements with the owner of two vessels (which were then renamed the m/v Bulk Power and the m/v Bulk Progress). Under a bareboat charter, the charterer is responsible for all of the vessel operating expenses in addition to the charter hire. The agreement also contains a profit sharing arrangement. Scheduled increases in charter hire are included in minimum rental payments and recognized on a straight-line basis over the lease term.

Profit sharing is excluded from minimum lease payments and recognized as incurred. The rent expense under these bareboat charters (which are classified as operating leases) totals approximately $365,000 per annum.

The Company leases office space for its Copenhagen operations. Since December 31, 2018, this lease continues on a month to month basis. The non-cancelable period is six months.

The Company leases office space for its Singapore operations. At June 30, 2020, the remaining lease ~~can be terminated with~~term is fourteen months.

For the three and six months ~~prior notice after~~ended June 30, ~~2018.~~2020 and 2019, the Company recognized approximately $52,000 and $104,000, respectively, as lease expense for office leases in General and Administrative Expenses.

Future minimum lease payments under ~~capital leases and operating~~finance leases with initial or remaining terms in excess of one year at ~~September~~June 30, ~~2017~~2020 were:


Year ending December 31,
2020	$	4,894,152
2021	9,660,670
2022	9,516,509
2023	9,371,813
2024	26,119,332
Thereafter	13,024,453
Total minimum lease payments	$	72,586,929
Less imputed interest	11,631,074
Present value of minimum lease payments	60,955,855
Less current portion	6,927,362
Long-term portion	$	54,028,493

Capital Lease Operating Leases
2018 $ 3,278,295
$ 585,717
2019 3,278,295
420,514
2020 3,278,295
365,446
2021 3,278,295
285,348
2022 6,858,295
—
Thereafter 14,227,441
—
Total minimum lease payments $ 34,198,916
$ 1,657,025
Less amount representing interest 6,967,515

Present value of minimum lease payments 27,231,401

Less current portion 1,759,303

Long-term portion $ 25,472,098

Legal Proceedings and Claims

The Company is subject to certain asserted claims arising in the ordinary course of business. The Company intends to vigorously assert its rights and defend itself in any litigation that may arise from such claims. While the ultimate outcome of these matters could affect the results of operations of any one year, and while there can be no assurance with respect thereto, management believes that after final disposition, any financial impact to the Company would not be material to its consolidated financial position, results of operations, or cash flows.

NOTE 8 - OTHER LONG-TERM LIABILITIES

In ~~April 2017,~~September 2019, the Company entered into an LLC agreement for the formation of Nordic Bulk Partners LLC (“NBP”), that, at inception is owned 75% by the Company and 25% by an independent third party. NBP was established for the purpose of constructing and owning 4 new-build ice class post panamax vessels. During the construction phase of the vessel, the third party has committed to contribute additional funding and ultimately own 50% of NBP at the time of delivery of the new-build ice class post panamax vessels. The agreement contains both put and call option provisions. Accordingly, the Company may be obligated, pursuant to the put option, or entitled pursuant to the call option, to purchase the third party's interest in NBP beginning any time after September 2026. The put option and call option are at fixed prices which are not significantly different from each other, starting at $4.0 million per vessel on the fourth anniversary from completion and delivery of each vessel and declining to $3.7 million per vessel on or after the seventh anniversary from completion and delivery of each vessel. If neither put nor call option is exercised, the Company is obligated to purchase the vessels from NBP at a fixed price. Pursuant to ASC 480, Distinguishing Liabilities from Equity, the Company has recorded the third party's interest in NBP of $5.1 million in Long term liabilities - Other at June 30, 2020. Earnings attributable to the third party’s interest in NBP are recorded in Interest expense, net, which resulted in additional interest expenses of $55,809 and $28,166, respectively, for the three and six months ended June 30, 2020.

NOTE 9 - SUBSEQUENT EVENTS

On June 29, 2020, the Company entered into a ~~settlement~~memorandum of agreement ~~related~~to sell the Bulk Beothuk, a 2002-built Supramax vessel, to a ~~litigation action.~~third party for $4.6 million less a broker commission payable to a third party. The ~~Company~~vessel was ~~indemnified by third parties related~~delivered to this matter and recovered approximately $462,000 that was reserved at the time the action was initiated which is included in other income (expense) in the consolidated statements of operations for the nine months ended September 30, 2017.

~~Note 8. Subsequent Events~~

~~The Company acquired the m/v Bulk Pride on October 11, 2017 through~~ its new wholly owned subsidiary Bulk Pride Corp. The purchase price of the vessel, which is expected to be delivered in December 2017, was $13.8 million. The purchase price will be financed with a commercial facility.owner on August 4, 2020.

The Company acquired a 50% interest in a joint venture, Venture Barge (US) Corp. which purchased a deck barge on November 3, 2017. The barge, which was built in 1979 and rebuilt in 2016, was acquired for $2.4 million.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our ~~condensed~~ consolidated financial statements and footnotes thereto contained in this report.

Forward Looking Statements

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward looking statements as a result of the risk factors and other factors detailed in our filings with the Securities and Exchange Commission. All subsequent written or oral forward looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

Important Financial and Operational Terms and Concepts

The Company uses a variety of financial and operational terms and concepts when analyzing its performance.

These include revenue recognition, deferred revenue, allowance for doubtful accounts, vessels and depreciation and long-lived assets impairment considerations, as defined above as well as the following:

Voyage Revenue. Voyage revenue is derived from voyage charters which involve the carriage of cargo from a load port to a discharge ~~port.~~port, which is predetermined in each voyage contract. Gross revenue is calculated by multiplying the agreed rate per ton of cargo by the number of tons loaded. The Company directs how and for what purpose the vessel is used and therefore, these voyage contracts do not contain leases.

Charter Revenue. Charter revenue is earned when the Company lets a vessel it owns or operates to a charterer for a specified period of time. Charter revenue is based on the ~~agree~~agreed rate per day. These time-charter arrangements contain leases because the lessee has the power to direct the use and receives substantially all of the economic benefits from the use of the vessel. The operating lease component and the vessel operating expense non-lease component of a time-charter contract are reported as a single component.

Voyage Expenses. The Company incurs expenses for voyage charters, including bunkers (fuel), port charges, canal tolls, brokerage commissions and cargo handling operations, which are expensed as incurred.

Charter Expenses. The Company charters in vessels to supplement its owned fleet to support its voyage charter operations. The Company hires vessels under time charters with third party vessel owners, and recognizes the charter hire payments as an expense on a straight-line basis over the term of the charter. Charter hire payments are typically made in advance, and the unrecognized portion is reflected as advance hire in the accompanying consolidated balance sheets. Under the time charters, the vessel owner is responsible for the vessel operating costs such as crews, maintenance and repairs, insurance, and stores. The Company does not record a right-of-use asset or lease liability for any arrangement less than one year.

Vessel Operating Expenses. Vessel operating expenses represent the cost to operate the Company’s owned vessels. Vessel operating expenses include crew hire and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes, other miscellaneous expenses, and technical management fees. These expenses are recognized as incurred. Technical management services include day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory and classification society compliance, arranging the hire of crew, and purchasing stores, supplies, and spare parts.

Fleet Data. The Company believes that the measures for analyzing future trends in its results of operations consist of the following:

• Shipping days. The Company defines shipping days as the aggregate number of days in a period during which its owned or chartered-in vessels are performing either a voyage charter (voyage days) or a time charter (time charter days).

• Daily vessel operating expenses. The Company defines daily vessel operating expenses as vessel operating expenses divided by ownership days for the period. Vessel operating expenses include crew hire and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes, other miscellaneous expenses, and technical management fees.

• Chartered in days. The Company defines chartered in days as the aggregate number of days in a period during which it chartered in vessels from third party vessel owners.

• Time Charter Equivalent ‘‘TCE’’ ~~rates.~~rates. The Company defines TCE rates as total revenues less voyage expenses divided by the length of the voyage, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because rates for vessels on voyage charters are generally not expressed in per-day amounts while rates for vessels on time charters generally are expressed in per-day amounts.

~~Overview~~

Selected Financial Information


(in thousands, except for shipping days data and per share data) (figures may not foot due to rounding)	For the three months ended June 30,						For the six months ended June 30,
	2020		2019		2020		2019
Selected Financial Data
Voyage revenue	$	66,857	$	77,430	$	153,381	$	143,281
Charter revenue	3,539		5,861		12,895		19,553
Total revenue	70,396		83,291		166,276		162,834
Voyage expense	31,758		37,224		79,554		69,399
Charter hire expense	15,204		18,317		47,529		43,265
Vessel operating expenses	9,325		11,075		19,259		20,829
Total cost of transportation and service revenue	56,287		66,616		146,342		133,493
Vessel depreciation and amortization	4,328		4,456		8,525		8,797
Gross Profit	9,781		12,219		11,410		20,546
Other operating expenses	3,890		5,395		7,929		9,464
Loss on impairment of vessels	1,801		—		1,801		—
Loss on sale of vessels	297		—		219		—
Income from operations	3,793		6,824		1,461		11,081
Total other expense, net	(498)		(1,665)		(4,934)		(1,441)
Net income (loss)	3,295		5,159		(3,473)		9,640
Income attributable to non-controlling interests	(290)		(1,127)		(316)		(1,905)
Net income (loss) attributable to Pangaea Logistics Solutions Ltd.	$	3,005	$	4,033	$	(3,789)	$	7,735

Net income (loss) from continuing operations per common share information
Basic net income (loss) per share	$	0.07	$	0.09	$	(0.09)	$	0.18
Diluted net income (loss) per share	$	0.07	$	0.09	$	(0.09)	$	0.18
Weighted-average common shares Outstanding - basic	43,446		42,768		43,443		42,685
Weighted-average common shares Outstanding - diluted	43,446		43,293		43,443		43,202

Adjusted EBITDA ⁽¹⁾	$	10,658	$	11,686	$	13,591	$	20,996

Shipping Days ⁽²⁾
Voyage days	3,175		3,053		6,800		5,958
Time charter days	425		509		1,376		1,542
Total shipping days	3,600		3,562		8,176		7,500

TCE Rates ($/day)	$	10,733	12,933		10,607		12,458


	June 30, 2020		December 31, 2019
Selected Data from the Consolidated Balance Sheets
Cash, restricted cash and cash equivalents	$	49,493	$	53,055
Total assets	$	439,511	$	479,903
Total secured debt, including finance leases liabilities	$	161,226	$	176,688
Total shareholders' equity	$	240,967	$	243,072

	For the six months ended June 30,
	2020		2019
Selected Data from the Consolidated Statements of Cash Flows
Net cash provided by operating activities	$	6,907	$	19,584
Net cash provided by (used in) investing activities	$	5,778	$	(33,495)
Net cash (used in) provided by financing activities	$	(16,247)	$	1,457

⁽¹⁾Adjusted EBITDA represents operating earnings before interest expense, income taxes, depreciation and amortization, loss on sale and leaseback of vessels, share-based compensation and other non-operating income and/or expense, if any. Adjusted EBITDA is included because it is used by management and certain investors to measure operating performance and is also reviewed periodically as a measure of financial performance by Pangaea's Board of Directors. Adjusted EBITDA is not an item recognized by the generally accepted accounting principles in the United States of America, or U.S. GAAP, and should not be considered as an alternative to net income, operating income, or any other indicator of a company's operating performance required by U.S. GAAP. Pangaea’s definition of Adjusted EBITDA used here may not be comparable to the definition of EBITDA used by other companies.

⁽²⁾Shipping days are defined as the aggregate number of days in a period during which its owned or chartered-in vessels are performing either a voyage charter (voyage days) or time charter (time charter days).

The ~~seaborne drybulk~~reconciliation of gross profit to net transportation and service revenue and income from operations to Adjusted EBITDA is as follows:


(in thousands, figures may not foot due to rounding)	Three Months Ended June 30,							Six Months Ended June 30,
	2020		2019			2020		2019
Net Transportation and Service Revenue ⁽³⁾
Gross Profit	$	9,781	$	12,219		$	11,410	$	20,546
Add:
Vessel Depreciation and Amortization	4,328		4,456			8,525		8,797
Net transportation and service revenue	$	14,109	$	16,675		$	19,935	$	29,343

Adjusted EBITDA
Income from operations	$	3,793	$	6,824		$	1,460	$	11,081
Depreciation and amortization	4,346		4,491		4,346	8,588		8,869
Loss on impairment of vessels	1,801		—			1,801		—
Loss on sale of vessels	297		—			219		—
Share-based compensation	421		371			1,523		1,046
Adjusted EBITDA	$	10,658	$	11,686		$	13,591	$	20,996

⁽³⁾ Net transportation and service revenue represents total revenue less the total direct costs of transportation and services, which includes charter hire, voyage and vessel operating expenses. Net transportation and service revenue is included because it is used by management and certain investors to measure performance by comparison to other logistic service providers. Net transportation and service revenue is not an item recognized by the generally accepted accounting principles in the United States of America, or U.S. GAAP, and should not be considered as an alternative to net income, operating income, or any other indicator of a company's operating performance required by U.S. GAAP. Pangaea’s definition of net transportation and service revenue used here may not be comparable to an operating measure used by other companies.

Business Overview

The dry bulk sector of the transportation and logistics industry is cyclical and volatile. Drybulk market rates improved markedly from the fall of 2016 to March of this year, gave up some of the gains in the second quarter, then finished the third quarter at its highest in nearly three years. The increase in freight rates iscan be volatile due to ~~various factors, including the improving global economy~~changes in supply of vessels and ~~increasing base metal and industrial commodity prices.~~demand for transportation of dry bulk commodities. The Baltic Dry Index ~~("BDI"~~(“BDI”), a measure of dry bulk market performance, ~~increased to an average of 1,162~~averaged 979 for the ~~third~~second quarter of ~~2017,~~2020, down from an average of ~~744~~1,154 for the ~~third~~comparable quarter of ~~2016.~~2019. More specifically, and reflecting the composition of the Company's fleet, the average published market rates for Supramax and Panamax vessels decreased approximately 36% from an average of $8,665 in second quarter of 2019 to $5,548 in the same period of 2020. We have historically experienced fluctuations in our results of operations on a quarterly and annual basis. We expect to experience continued fluctuations in our operating results in the foreseeable future due to a variety of factors, including competition and seasonality.

Although our trades are not heavily focused on China, the dry bulk sector of the shipping industry is closely correlated to economic activity in China, which was the first country to be impacted by the novel coronavirus or COVID-19. This resulted in closures and an overall contraction in China's economic output in January and February. By March, China began to loosen restrictions and show some signs of economic recovery which resulted in a slight rebound in the BDI. However also in early March, the global spread of the virus accelerated especially in parts of Europe and the United States resulting in various forms of nationwide shut downs. Global economic output continues to be impacted by the COVID-19 pandemic as evidenced by contraction in many countries annualized gross domestic product reported in the second quarter of 2020. The continued implications of these shutdowns on the demand for dry bulk goods will be highly dependent on the duration and how quickly various countries can return to normal levels of industrial activity, which is uncertain.

Given the uncertainties of the COVID-19 pandemic, we have taken steps to manage and reduce operating costs, further enhance our financial flexibility, and protect the health and safety of our crew and shore based employees. Consistent with our chartering strategy we have redelivered chartered-in vessels when possible and continue to charter in new vessels, when needed, for short term period to limit our exposure to further declines in the market and to reduce our time charter expenses in future periods. Further, we have temporarily suspended our dividend to maintain a strong liquidity position for eventual market recovery. We have implemented stricter protocols around crew changes, and required quarantine periods, and shore based employees in our Newport, Copenhagen, Singapore and Athens continue to comply with local and international guidelines as we begin to return to our office locations.

Quarterly TCE Performance

The Company's ~~strategy to charter in vessels to serve primarily contracted business means we limit our carried volume of chartered-in vessels, which shields us~~TCE rates were down 17% from losses we may incur under a long-term charter-in strategy, but will also have the effect of limiting upside in an increasing rate environment, when we charter-in vessels at higher rates to meet the needs of this contracted business.

~~3rd Quarter 2017 Highlights~~

~~Income from operations up 29% to $10.0 million~~$12,933 for the three months ended ~~September~~June 30, ~~2017, from $7.8 million~~2019 to $10,733 for the ~~same period~~three months ended June 30, 2020. The Company's achieved TCE rates continued to outperform against the average of ~~2016.~~the Baltic panamax and supramax market indexes and exceeded the average market rates by approximately 93% due to its long-term contracts of affreightment, ("COAs"), its specialized fleet and its cargo-focused strategy.

2nd Quarter Highlights

•Net income attributable to Pangaea Logistics Solutions Ltd. ~~of $7.2~~was approximately $3.0 million for three months ended June 30, 2020 as compared to ~~$6.1~~approximately $4.0 million net income for the same period of 2019.

•Diluted net income per share was $0.07 for three months ended June 30, 2020 compared to $0.09 for the same period of 2019.

•Pangaea's TCE rates were $10,733 for the three months ended June 30, 2020 and $12,933 for the three months ended June 30, 2019 while the market average for the second quarter of 2020 was approximately $5,548, giving the Company an overall average premium over market rates of approximately $5,185 or 93%. The Company's long-term COAs, cargo focus, and specialized fleet give rise to this premium.

•Total revenue decreased to $70.4 million for the three months ended ~~September~~June 30, ~~2016.~~

~~51% increase in revenue to $107.0~~2020, from $83.3 million for the three months ended ~~September~~June 30, ~~2017, up from $70.8 million for the same period in 2016.~~

~~Pangaea's~~2019 due to lower average TCE rates ~~increased 13% to $11,822 while the market average was approximately $9,715. Total shipping days increased 34%. These improvements are due to continued growth~~ in the ~~drybulk market and to an increase in drybulk market rates. The Company operated 58 vessels, on average during the third quarter of 2017 versus approximately 43 during the third quarter of 2016.~~market.

•At the end of the quarter, Pangaea had ~~$29.3~~$49.5 million in ~~unrestricted~~cash, restricted cash and cash equivalents.

Three Months Ended ~~September~~June 30, ~~2017~~2020 Compared to Three Months Ended ~~September~~June 30, ~~2016~~2019

Revenues

Pangaea’s revenues are derived predominately from voyage and time charters, which are discussed below. Total revenue for the three months ended ~~September~~June 30, ~~2017~~2020 was ~~$107.0~~$70.4 million, compared to ~~$70.8~~$83.3 million for the same period in ~~2016,~~2019, a ~~51% increase.~~15% decrease. The decrease in revenues was primarily due to lower average TCE rates earned as discussed above. However the total number

of shipping days increased ~~34%~~1% to ~~5,305~~3,600 in the three months ended ~~September~~June 30, ~~2017,~~2020, compared to ~~3,971~~3,562 for the same period in 2016. The average TCE rate was $11,822 per day for the three months ended September 30, 2017, compared to $10,480 per day for same period in 2016. The revenue increase is predominantly due to the increase in total shipping days and to overall improvement in the dry bulk market.2019.

Components of revenue are as follows:

Voyage revenues ~~which represent 88% of total revenue, increased~~decreased by ~~42%~~14% for the three months ended ~~September~~June 30, ~~2017~~2020 to ~~$93.7~~$66.9 million compared to ~~$66.0~~$77.4 million for the same period in ~~2016.~~2019. The ~~increase~~decrease in voyage revenues was ~~predominantly driven by the 23% increase in the~~primarily due to lower average TCE rates, as discussed above. The number of voyage days ~~which were 4,133 in~~increased by 4% to 3,175 days for the ~~third quarter of 2017~~three months ended June 30, 2020 as compared ~~to 3,364~~3,053 days for the same period in ~~the third quarter of 2016. Voyage revenues were also bolstered by the increased rates in the drybulk market over the comparable quarter.~~2019.

Charter revenues ~~which represent 12% of total revenue, increased~~decreased to ~~$13.3~~$3.5 million from ~~$4.8~~$5.9 million, or ~~178%~~40%, for the three months ended ~~September~~June 30, ~~2017~~2020 compared to the same period in ~~2016.~~2019. The ~~increase~~decrease in charter revenues was due to ~~improvement~~a decrease in drybulk market rates ~~as indicated above,~~ and a decline in time charter days which were down 17% to ~~an increase~~425 in the ~~number~~second quarter of ~~time charter days. Time charter days were up 93% to 1,172~~2020 from 509 in the ~~third~~second quarter of ~~2017 from 607 in the third quarter~~2019. The optionality of ~~2016. As the dry bulk~~

~~market improves,~~our chartering strategy allows the Company ~~increases its chartered-in profile and looks for additional spot opportunities. In~~to selectively release excess tonne-days, if any, into the ~~event a cargo does not present itself, the Company will sub-let the vessel on time-charter to another operator for those days remaining~~market under ~~the contract.~~time charters arrangements.

Voyage Expenses

Voyage expenses for the three months ended ~~September~~June 30, ~~2017~~2020 were ~~$44.3~~$31.8 million, compared to ~~$29.2~~$37.2 million for the same period in ~~2016, an increase~~2019, a decrease of approximately ~~52%~~15%. The ~~increase in voyage expense~~decrease was primarily due to a decrease in bunker expenses as a result of the ~~23% increase~~COVID-19 triggered decline in ~~voyage days, as discussed above and~~market prices for bunkers in the second quarter of 2020 compared to the $6.3 million increase in the cost of bunker fuel consumed. The $6.3 million increase in the cost of bunker fuel consumed was due to both the increase in the number of voyage days, as noted above, and to an increase in price. The average price paid for inventory increased 36% in the thirdsecond quarter of 2017 over the third quarter of 2016. Bunker prices expressed on a voyage day basis were approximately $4,928 in the three months ended September 30, 2017 as compared to $4,189 in the three months ended September 30, 2016. Port expenses increased $2.5 million or 18%, due to the increase in the number of voyage days and ports visited. In addition, the Company incurred relet expenses of $3.7 million in the third quarter of 2017, but did not relet any cargoes in the same period of 2016. The Company will opportunistically relet a cargo depending on market conditions and as a risk management tool.2019.

Charter Hire Expenses

Charter hire expenses for the three months ended ~~September~~June 30, ~~2017~~2020 were ~~$34.8~~$15.2 million, compared to ~~$19.7~~$18.3 million for the same period in ~~2016.~~2019, a 17% decrease. This was due to a decrease in chartered-in rate from $10,515 per day for three months ended June 30, 2019 to $7,690 per day for the three months ended June 30, 2020, despite the increase in the number of chartered-in days. The number of chartered-in days increased ~~39%~~13% from ~~2,704~~1,742 days in the three months ended ~~September~~June 30, ~~2016~~2019 to ~~3,763~~1,977 days for the three months ended ~~September~~June 30, ~~2017. Further, the improving dry bulk~~2020. The Company's flexible charter-in strategy allows it to supplement its owned fleet with short term chartered-in tonnage at prevailing market ~~pushed average charter-hire rates paid by the Company up 27% for the three months ended September 30, 2017 as compared~~prices, when needed, to the same period of 2016. Charter hire expense as a percentage of total revenue rose from 28% in the three months ended September 30, 2016 to 32% in the three months ended September 30, 2017. The Company continues to operate under its successful strategy of chartering-in primarily for committed contracts. However, demand in the third quarter resulted in a 34% increase in total shipping days, many of which are performed on chartered-in ships.meet cargo demand.

Vessel Operating Expenses

Vessel operating expenses for the three months ended ~~September~~June 30, ~~2017~~2020 were ~~$9.1~~$9.3 million, compared to ~~$7.5~~$11.1 million infor the ~~comparable~~same period in ~~2016, an increase~~2019, a decrease of approximately ~~22%~~16%. Excluding technical management fees, vessel operating expenses on a per day basis were $5,167 for the three months ended June 30, 2020 and $5,398 for the three months ended June 30, 2019. The ~~increase~~decrease in vessel operating expenses iswas primarily due to ~~the 21% increase~~a decrease in owned days resulting from the sale of vessels in 2020. Technical management fees were approximately $0.9 million and ~~bareboat charter days, which were 1,748 in~~$1.0 million during the three months ended ~~September~~June 30, ~~2017 as compared to 1,448 in the three months ended September 30, 2016. This increase is due to the addition of two newbuildings delivered on January 7, 2017~~2020 and ~~a vessel acquisition on June 14, 2017.~~2019, respectively.

General and Administrative Expenses

General and administrative expenses ~~increased from $3.2~~were $3.9 million inand $5.4 million for the three months ended ~~September~~June 30, ~~2016~~2020 and 2019, respectively. This is primarily due to ~~$4.8 million~~a reduction in the ~~three months ended September 30, 2017. The increase is due to an increase in~~amount recognized for incentive ~~compensation and payroll related expenses.~~compensation.

Income from Operations

The Company had income from operations of ~~$10.0~~$3.8 million for the three months ended ~~September~~June 30, ~~2017~~2020 as compared to ~~$7.8~~income from operations of $6.8 million for the three months ended ~~September~~June 30, ~~2016.~~2019. This is primarily due to an impairment charge of $1.8 million and loss on sale of vessels of $0.3 million for the ~~increase~~three months ended June 30, 2020 as well as a slight decrease in ~~total shipping days~~gross profit.

Unrealized (loss) gain on derivative instruments

The Company incurred gains on bunker swaps of approximately $1,364,000 and ~~to improvement~~losses on forward freight agreements (FFAs) of approximately $32,000 in the ~~dry bulk market over~~three months ended June 30, 2020 as compared to losses of approximately $342,000 on bunker swaps and gains of approximately $557,000 on FFAs in the ~~same period of 2016.~~three months ended June 30, 2019. The fair value loss on interest

~~Interest Expense~~

~~The increase~~rate derivative was approximately $64,000 for the three months ended June 30, 2020. These result from changes in ~~interest expense is predominantly due to financing~~the fair value of the ~~m/v Bulk Destiny under a capital lease and to~~derivatives at the ~~acquisition of the m/v Bulk Endurance, both in January 2017, and to the purchase of the Bulk Freedom in June 2017.~~respective balance sheet dates.

~~Other Income (Expense)~~

~~Other income represents the $0.9 million settlement of a non-performance claim that had not previously been recognized, and to income from an unconsolidated subsidiary.~~

~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2020 Compared to ~~Nine~~Six Months Ended ~~September~~June 30, ~~2016~~2019

Revenues

Pangaea’s revenues are derived predominately from voyage and time charters, which are discussed below. Total revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 was ~~$282.9~~$166.3 million, compared to ~~$171.7~~$162.8 million for the same period in ~~2016, an increase of 65%. The~~2019, as the total number of shipping days increased ~~39%~~9% to ~~14,309 for~~8,176 in the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2020, compared to ~~10,290~~7,500 for the same period in ~~2016.~~2019. The average TCE rate ~~was $11,093~~earned by the Company decreased 15% to $10,607 per day in the six months ended June 30, 2020 from $12,458 per day for the ~~nine months ended September 30, 2017, compared to $9,451 per day for~~ same period in ~~2016. The revenue increase is predominantly due to~~2019, however the ~~increase in total shipping days and to overall improvement in~~rate outperformed against the ~~dry bulk market. The BDI increased 75%, to an~~ average of ~~1,035 for~~ the ~~nine months ended September 30, 2017 from an average of 591 for the comparable period of 2016.~~Baltic panamax and supramax market by approximately 80%.

Components of revenue are as follows:

Voyage revenues ~~which represent 89% of total revenue,~~ increased by ~~56% to $251.6 million~~7% for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 to $153.4 million compared to ~~$161.5~~$143.3 million for the same period in ~~2016.~~2019. The increase in voyage revenues was ~~predominantly driven by~~primarily due to the ~~31%~~ increase in ~~the number of~~ voyage days ~~which were 11,519 in the nine months ended September 30, 2017 as compared~~from 5,958 to ~~8,760 in the same period of 2016. Voyage revenues also reflect the increased rates in the drybulk market over the prior nine-month period.~~

~~Charter revenues, which represent 11% of total revenue, increased to $31.3 million from $10.2 million,~~6,800, or ~~208%~~14%, for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 compared to the same period in ~~2016.~~2020. This was offset by lower average TCE rates, as discussed above.

Charter revenues decreased to $12.9 million from $19.6 million, or 34%, for the six months ended June 30, 2020 compared to the same period in 2019. The ~~increase~~decrease in charter revenues was due to ~~improvement~~a decrease in drybulk market rates ~~as indicated above,~~ and ~~to an increase in the number of~~ time charter ~~days. Time charter~~ days which were ~~2,790 in~~down 11%, to 1,376 for the ~~nine~~six months ended ~~September~~June 30, ~~2017 versus 1,530~~2020, from 1,542 for the same period in ~~the nine months ended September 30, 2016, which is also indicative~~2019. The optionality of ~~the increased demand in the drybulk market. As the dry bulk market improves,~~our chartering strategy allows the Company ~~increases its chartered-in profile and looks for additional spot opportunities. In~~to selectively release excess tonne-days, if any, into the ~~event a cargo does not present itself, the Company will sub-let the vessel on time-charter to another operator for those days remaining~~market under ~~the contract.~~time charters arrangements.

Voyage Expenses

Voyage expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 were ~~$124.2~~$79.6 million, compared to ~~$74.4~~$69.4 million for the same period in ~~2016,~~2019, an increase of approximately ~~67%~~15%. The increase in voyage expense was primarily due to ~~the~~a 14% increase in voyage days ~~as discussed above and to~~for the increase in the cost of bunker fuel consumed. The $19.6 million increase in the cost of bunker fuel consumed of was due to both the increase in the number of voyage days, as noted above, and to an increase in price. The average price paid for inventory increased 45% in the ninesix months ended ~~September~~June 30, 2017 over the nine months ended September 30, 2016. Bunker prices expressed on a voyage day basis were approximately $3,287 in the nine months ended September 30, 2017 as compared to $2,082 in the nine months ended September 30, 2016. Port expenses increased $8.4 million or 35%, due to the increase in the number of voyage days and the consequent number of ports visited.2020.

Charter Hire Expenses

Charter hire expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 were ~~$91.1~~$47.5 million, compared to ~~$43.2~~$43.3 million for the same period in ~~2016. The~~2019, a 10% increase. This was primarily due to a 26% increase in the number of chartered-in days ~~increased 52%~~ from ~~6,546 days in~~3,962 for the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2019 to ~~9,932 days~~4,980 for the ~~nine~~six months ended ~~September~~June 30, ~~2017, while~~2020. The Company's flexible charter-in strategy allows it to supplement the ~~improving~~its owned fleet with short term chartered-in tonnage at prevailing market ~~pushed average charter-hire rates paid by~~prices, which decreased significantly in 2020, reducing the ~~Company up 39% for~~Company's charter hire expenses on the nine months ended September 30, 2017 as compared to the same period of 2016. Charter hire expense as a percentage of total revenue rose from 25% in the nine months ended September 30, 2016 to 32% in the nine months ended September 30, 2017. The Company continues to operate under its successful strategy of chartering-in primarily for committed contracts. However, demand in the nine months ended September 30, 2017 resulted in a 39% increase in total shipping days, many of which are performed onadditional chartered-in ~~ships.~~days.

Vessel Operating Expenses

Vessel operating expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 were ~~$26.8~~$19.3 million, compared to ~~$22.3~~$20.8 million infor the ~~comparable~~same period in ~~2016, an increase~~2019, a decrease of approximately ~~20%. The increase~~8%, due to a decrease in owned days decreased by approximately 11% resulting from the sale of vessels in 2020. Excluding technical management fees, vessel operating expenses is due to the increase in owned and bareboat chartered-in days, which were 5,008 in the nine months ended September 30, 2017 as compared to 3,992 in the nine months ended September 30, 2016. This increase is due to the addition of two newbuildings delivered on January 7, 2017, two vessels under bareboat charter since July 2016 and a vessel acquisition on June 14, 2017. Vessel operating expenses under these bareboat charters are paid by Pangaea. Vessel operating expense expressed on a per day basis ~~decreased to $5,353~~were $5,198 for the ~~nine~~six months ended ~~September~~June 30, ~~2017 from $5,581~~2020 and $5,254 for the ~~same period in 2016.~~six months ended June 30, 2019. Technical management fees were approximately $1.8 million and $1.9 million during the six months ended June 30, 2020 and 2019, respectively.

General and Administrative Expenses

General and administrative expenses ~~increased 25%, from $9.2~~were $7.9 million inand $9.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016 to $11.4 million in the nine months ended September 30, 2017. The change~~2020 and 2019, respectively. This is due to ~~increases in~~timing of recognition of incentive compensation, payroll and related expenses, including an increase in personnel in the corporate offices, employee stock based compensation expense, an increase in Director fees and to an increase in travel and representation expense.compensation.

~~Loss on Sale and Leaseback of Vessels~~Income from Operations

The Company ~~sold~~had income from operations of $1.5 million for the ~~m/v Bulk Destiny, one~~six months ended June 30, 2020 as compared to income from operations of ~~two ultramax newbuildings delivered~~$11.1 million for the six months ended June 30, 2019. This is primarily due to the decrease in the Company's

gross profit due to relative increase in voyage expenses and charter hire expenses as discussed above, as well as an impairment charge of $1.8 million and loss on ~~January 7, 2017,~~sale of vessels of $0.3million for the six months ended June 30, 2020.

Unrealized (loss) gain on derivative instruments

The Company incurred losses on bunker swaps of approximately $1,187,000 and ~~simultaneously chartered-back~~gains on forward freight agreements (FFAs) of approximately $118,000 in the ~~vessel under a capital lease financing arrangement with~~six months ended June 30, 2020, as compared to unrealized gains of approximately $2,388,000 on bunker swaps and gains of approximately $117,000 on FFAs in the ~~buyer. At inception of~~six months ended June 30, 2019. The fair value loss on interest rate derivative was approximately $444,000 for the ~~lease, the Company recognized a loss of $4.3 million representing the difference between the delivered cost and~~six months ended June 30, 2020. These result from changes in the fair value of the ~~vessel, as determined by independent ship brokers. The Company's joint venture partner absorbed 50% of this loss, which is allocated to non-controlling interests to arrive~~derivatives at ~~net income attributable to Pangaea. The Company also sold~~ the m/v Bulk Beothuk on June 6, 2017 and simultaneously chartered-back the vessel from the buyer under a capital lease. At inception of the lease, the Company recognized a loss of $4.9 million representing the difference between the selling price and the carrying amount of the vessel.respective balance sheet dates.

~~Income from Operations~~

The Company has income from operations of $8.5 million for the nine months ended September 30, 2017 as compared to $12.0 million for the nine months ended September 30, 2016. The decrease is due to losses on sale and leaseback transactions totaling $9.3 million, without which there would be adjusted income from operations of $17.8 million. Total revenue increased 65% from $171.7 million for the nine months ended September 30, 2016 to $282.9 million for the nine months ended September 30, 2017, which is due to improvement in the drybulk shipping market and a resulting increase in total shipping days. However, the increase in market rates was met with increasing bunker prices and increasing charter hire rates, as noted above, which lowered operating margins to a limited extent.

~~Interest Expense~~

The increase in interest expense is due to the lease of the m/v Bulk Destiny and the acquisition of the m/v Bulk Endurance, both in January 2017. In addition, the interest rates on certain loans were fixed at higher levels during 2016 and 2017 in order to mitigate the risk of further increases in LIBOR.

~~Unrealized (Loss) Gain on Derivative Instruments, Net~~

The Company entered into numerous freight forward agreements, or FFAs, between November 2016 and the June 2017, in order to manage the risk associated with increasing charter-hire rates due to improvement in the drybulk market. The total gain on these FFAs was approximately $0.7 million for the nine months ended September 30, 2017. There were no open positions and therefore no gain or loss on FFAs in nine months ended September 30, 2016. The Company also enters into fuel swaps to manage the risk associated with fluctuating bunker prices. The loss on these swaps was approximately $0.3 million for the nine months ended September 30, 2017 as compared to a gain of approximately $1.1 million for the nine months ended September 30, 2016.

~~Other Income (Expense)~~

Other income represents the $0.9 million settlement of a non-performance claim that had not previously been reserved, to the recovery of $0.5 million of expenses incurred in a litigation action that was indemnified by third parties, to other reductions in the reserve for uncollectible accounts, and to income from an unconsolidated subsidiary of $0.3 million.

~~Income Attributable to Noncontrolling Interests~~

The decrease in income attributable to noncontrolling interests resulted predominantly from the $4.3 million loss on the sale and leaseback of the m/v Bulk Destiny, of which the former joint venture partner in this entity absorbed 50%. This was offset by an increase in net income of NBHC.

Significant accounting estimates

The discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company are the estimated fair value used in determining the estimated future cash flows used in its impairment analysis, the estimated salvage value used in determining depreciation expense and the allowances for doubtful accounts.

Long-lived Assets Impairment Considerations

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying ~~values~~amounts. If indicators of impairment are present, we perform an analysis of the Company’s vessels may not represent their fair market value or the amount that could be obtained by selling the vessel at any point in time because the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the pricing of new vessels. Historically, both charter rates and vessel values tendanticipated undiscounted future net cash flows to be cyclical. The carrying value of each group of vessels (allocated by size, age and major characteristic or trade), which are classified as held and used by the Company, are reviewed for potential impairment when events or changes in circumstances indicate that the carrying value of a particular group may not be fully recoverable. In such instances, an impairment charge would be recognized if the estimate of the undiscounted future cash flows expected to resultderived from the ~~use of the group and its eventual disposition is less than its carrying value. This~~related long-lived assets. Our assessment is made at the assets group level, which represents the lowest level for which identifiable cash flows are largely independent of other groups of assets. The asset groups established by the Company are defined by vessel size and major characteristic or trade.

~~The significant factors~~On June 29, 2020 the Company entered into an agreement to sell the Bulk Beothuk for $4.6 million, the sale was finalized and ~~assumptions used~~the vessel delivered to its new owner on August 4, 2020. A loss on impairment of $1.8 million was recorded in the ~~undiscounted projected net operating cash flow analysis include~~second quarter of 2020 when the ~~Company’s estimate~~Memorandum of ~~future TCE rates based on current rates under existing charters and contracts. When existing contracts expire,~~Agreement was signed. As the ~~Company uses an estimated TCE based on actual results and extends these rates out to the end~~carrying value of the ~~vessel’s useful life. TCE rates can be highly volatile, may affect~~assets exceeded the fair value, the Company concluded it constituted a triggering event requiring assessment of ~~the Company’s vessels and may have a significant impact on the Company’s ability to recover the carrying amount~~impairment for its long-lived assets as of ~~its fleet. Accordingly, the volatility is contemplated in the undiscounted projected net operating cash flow by using a sensitivity analysis based on percent changes in the TCE rates.~~June 30, 2020. The Company ~~prepares a series of scenarios in~~performed an ~~attempt to capture the range of possible trends and outcomes. Projected net operating cash flows are net of brokerage and address commissions and assume no revenue~~impairment analysis on scheduled offhire days. The Company uses the current vessel operating expense budget, estimated costs of drydocking and historical general and administrative expenses as the basis for its expected outflows, and applies an inflation factor it considers appropriate. The net of these inflows and outflows, plus an estimated salvage value, constitutes the projected undiscounted future cash flows. If these projected cash flows do not exceed the carrying amount of theeach asset group ~~an impairment charge equal to the difference between the carrying amount~~ and ~~the fair value of the group would be recognized.~~

~~During the three months ended September 30, 2017, the Company did not identify any potential triggering events. At December 31, 2016, testing for recoverability indicated that~~concluded the estimated undiscounted future cash flows were higher than ~~the~~their carrying amount ~~of each long-lived asset group, therefore, the Company did not recognize any~~and as such, no additional loss on ~~impairment.~~ impairment was recognized.

Liquidity and Capital Resources

~~Liquidity and Cash Needs~~

The Company has historically financed its capital requirements with cash flow from operations, proceeds from related party debt, proceeds from long-term debt and ~~capital~~finance leases, and ~~in June 2017,~~ through a private placement of common stock. The Company may consider additional debt and equity financing alternatives in the future. ~~However, if market conditions are negative, the Company may be unable to raise additional debt or equity financing on acceptable terms or at all.~~ As a result, the Company may not be ~~unable~~able to pursue opportunities to expand its business.

At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company had working capital of ~~$22.4~~$37.3 million and ~~a working capital deficit of $9.3~~$37.1 million, respectively.

Operating Activities

Operating cash flows during the six months ended June 30, 2020 resulted in a net inflow of $6.9 million compared to a net inflow of $19.6 million during the same period of 2019. The ~~improvement~~decrease primarily resulted from the decrease in ~~working capital is~~income from operations as well as changes in operating assets and liabilities during the six months ended June 30, 2020.

Investing Activities

Investing cash flows during the six months ended June 30, 2020 was a net inflow of $5.8 million compared to a net outflow of $33.5 million during the same period of 2019. The increase was primarily due to the ~~acquisition~~cash receipts from sale of ~~noncontrolling interest in a consolidated joint venture in January 2017 and~~two vessels during the ~~resulting reduction in related party debt,~~six months ended June 30, 2020, as compared to the ~~increase in cash from proceeds~~purchase of ~~common stock issuance, to~~two vessels and deposits on newbuildings in-process during the ~~sale of the m/v Bulk Beothuk, and to cash generated from operations.~~six months ended June 30, 2019.

~~Considerations made by management in assessing the Company’s ability to continue as a going concern are its ability to consistently generate positive~~Financing Activities

Financing cash flows ~~from operations, which were approximately $13.7 million and $18.3 million in~~during the ~~nine~~three months ended ~~September~~June 30, ~~2017 and 2016, respectively; $19.2~~2020 was a net outflow of $16.2 million ~~in 2016 and $26.0~~compared to net inflow of $1.5 million ~~in 2015; and~~during the same period of 2019. The Company accelerated the final installment of one of its ~~ability~~finance leases during the six months ended June 30, 2020 compared to ~~procure long-term fixed contract employment (COAs) with new and longstanding customers. In addition,~~proceeds received of $13.0 million from a finance lease during the same period of 2019.

The Company has demonstrated its unique ability to adapt to changing market conditions by ~~changing the~~maintaining a nimble chartered-in profile to meet its cargo commitments. ~~For more information on~~We believe, given our current cash holdings, if drybulk shipping rates do not decline significantly from current levels, our capital resources, including cash anticipated to be generated within the ~~results of~~year, are sufficient to fund our operations ~~see~~ ~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Results of Operations.~~for at least the next twelve months.

Capital Expenditures

The Company’s capital expenditures relate to the purchase and lease of interests in vessels, newbuild vessels, and capital improvements to its vessels which are expected to enhance the revenue earning capabilities and safety of these vessels. The Company’s owned and leased fleet includes two Panamax drybulk carriers, ~~four Supramax drybulk carriers,~~ two Ultramax Ice-Class 1C, ~~and two Handymax~~eight Supramax drybulk carriers ~~(both of which are Ice-Class 1A).~~and one barge. The Company also has a one-third interest in a consolidated joint venture which owns six Panamax Ice-Class 1A drybulk carriers.

In addition to vessel acquisitions that the Company may undertake in future periods, its other major capital expenditures include funding its program of regularly scheduled drydockings necessary to make improvements to its vessels, as well as to comply with international shipping standards and environmental laws and regulations. This includes installation of ballast water treatment systems required under new regulations, the cost of which will be approximately $0.5 million to $0.7 million per vessel. The Company has some flexibility regarding the timing of dry docking, but the total cost is unpredictable. Funding expenses associated with these requirements will be met with cash from operations. The Company anticipates that this process of recertification will require it to reposition these vessels from a discharge port to shipyard facilities, which will reduce the Company’s available days and operating days during that period. The Company capitalized drydocking costs totaling approximately $2,882,000 and $1,545,000 in the six months ended June 30, 2020 and 2019, respectively. The Company expensed drydocking costs of approximately $83,000 and $78,018, respectively, in the six months ended June 30, 2020 and 2019.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet arrangements at ~~September~~June 30, ~~2017~~2020 or December 31, ~~2016.~~2019.

ITEM 3. Quantitative and Qualitative Disclosures about Market Risks

~~Interest Rate Risk~~

~~The international shipping industry is capital intensive, requiring~~No significant ~~amounts~~changes to our market risk have occurred since December 31, 2019. For a discussion of ~~investment provided~~market risks affecting us, refer to Part II, Item 7A—"Quantitative and Qualitative Disclosures About Market Risk" included in the form of long-term debt. Certain of the Company’s outstanding debt contain floating interest rates that fluctuate with changes in the financial markets and in particular changes in LIBOR. Increasing interest rates could increase the Company’s interest expense and adversely impact its future earnings. In the past, the Company ~~has managed this risk by entering into interest rate swap agreements in which the Company exchanged fixed and variable interest rates based~~Annual Report on ~~agreed upon notional amounts. The Company has used such derivative financial instruments as risk management tools and not~~Form 10-K for speculative or trading purposes. As of September 30, 2017 and December 31, 2016, the Company did not have any open interest rate swap agreements. The Company’s net effective exposure to floating interest rate fluctuations on its outstanding debt was $52.7 million and $46.8 million, respectively, at September 30, 2017 and December 31, 2016.

The Company’s interest expense is affected by changes in the general level of interest rates, particularly LIBOR. As an indication of the extent of the Company’s sensitivity to interest rate changes, an increase in LIBOR of 1% would have decreased the Company’s net income and cash flows during the nine months ended September 30, 2017 and 2016 by approximately $0.4 million and $0.6 million, respectively, based on the debt levels at the beginning of each period. The Company expects its sensitivity to interest rate changes to increase in the future if the Company enters into additional floating rate debt agreements in connection with its acquisition of additional vessels.

~~Forward Freight Agreements~~

~~Fuel Swap Contracts~~

The Company continuously monitors the market volatility associated with bunker prices and seeks to reduce the risk of such volatility through a bunker hedging program. During the nine months ended September 30, 2017 and the year ended December 31, 2016, the Company entered into various fuel swap contracts that were not designated for hedge accounting. The aggregate fair value of these fuel swaps at September 30, 2017 and December 31, 2016 were assets of approximately $38,000 and $0.3 million, respectively.2019.

ITEM 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as such term is defined in Rule 13a-15(e). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2020.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

Item 1 - Legal Proceedings

From time to time, we are involved in various other disputes and litigation matters that arise in the ordinary course of our business, principally cargo claims. Those claims, even if lacking merit, could result in the expenditure by us of significant financial and managerial resources.

Item 1A – Risk Factors

~~There have been no material changes from~~In addition to the ~~“Risk~~other information set forth in this report, the reader should carefully consider the factors discussed in “Item 1A. Risk Factors” ~~previously disclosed~~ in ~~our~~the Company’s Annual Report on Form 10-K ~~filed with~~for the ~~SEC~~year ended December 31, 2019 and the Risk Factor described below, which could materially affect the Company’s business, financial condition or future results.

The coronavirus or COVID-19 pandemic is dynamic and expanding. The continuation of this outbreak likely will have, and the emergence of other epidemic or pandemic crises could have, material adverse effects on ~~March 23, 2017.~~our business, results of operations, or financial condition.

The COVID-19 pandemic is dynamic and expanding, and its ultimate scope, duration and effects are uncertain. We expect that this pandemic, and any future epidemic or pandemic crises, could result in direct and indirect adverse effects on our industry and customers, which in turn may impact our business, results of operations and financial condition. Effects of the current pandemic include, or may include, among others:

•disruptions to our operations as a result of the potential health impact on our employees and crew, and on the workforces of our customers and business partners;

•disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in response to the pandemic, such as travel restrictions (including for any of our onshore personnel or any of our crew members to timely embark or disembark from our vessels), increased inspection regimes, hygiene measures (such as quarantining and physical distancing) or increased implementation of remote working arrangements;

•potential delays in the loading and discharging of cargo on or from our vessels, and any related off hire due to quarantine, worker health, or regulations, which in turn could disrupt our operations and result in a reduction of revenue;

•potential shortages or a lack of access to required spare parts for our vessels, or potential delays in any repairs to, scheduled or unscheduled maintenance or modifications, or drydocking of, our vessels, as a result of a lack of berths available by shipyards from a shortage in labor or due to other business disruptions;

•potential delays in vessel inspections and related certifications by class societies, customers or government agencies;

•potential reduced cash flows and financial condition, including potential liquidity constraints;

•reduced access to capital, including the ability to refinance any existing obligations, as a result of any credit tightening generally or due to continued declines in global financial markets, including to the prices of publicly-traded securities of us, our peers and of listed companies generally;

•a reduced ability to opportunistically sell any of our vessels on the second-hand market, either as a result of a lack of buyers or a general decline in the value of second-hand vessels;

•a decline in the market value of our vessels, which may cause us to (a) incur impairment charges or (b) breach certain covenants under our financing agreements (including our secured facility agreements and financial leases) relating to vessel-to-loan covenants; and

•potential deterioration in the financial condition and prospects of our customers, joint venture partners or business partners, or attempts by customers or third parties to invoke force majeure contractual clauses as a result of delays or other disruptions.

Although disruption and effects from COVID-19 pandemic may be temporary, given the dynamic nature of these circumstances and the worldwide nature of our business and operations, the duration of any business disruption and the related financial impact to us cannot be reasonably estimated at this time but could materially affect our business, results of operations and financial condition.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

~~As previously disclosed on a Current Report on Form 8-K, Pangaea Logistics Solutions Ltd. (the “Company”) enteredinto two stock purchase agreements, both dated June 15, 2017 (the “Agreements”), for the sale of an aggregate of approximately $15.0 million of its common shares, par value $0.0001 per share (the “Common Shares~~”), in private placement transactions which are exempt from the registration requirements of the Securities Act of 1933, as amended, under Section 4(2) thereof, at a purchase price of $2.25 per share (the “~~Transaction”). One agreement was completed with certain directors, officers and employees of the Company (the “Insider Investors~~”) and was subject to shareholder approval pursuant to NASDAQ Listing Rule 5635(c) and the other agreement was completed with other institutional and other accredited investors. The transaction has closed and the Company issued a total of 6,533,443 Common Shares in connection with the sales under both Agreements. As of November 9, 2017 the Company has 43,795,182 Common Shares issued and outstanding. None.

Item 3 - Defaults Upon Senior Securities

None.

Item 4 – Mine Safety Disclosures

None.

Item 5 - Other Information

None.

Item 6 – Exhibits



Exhibit ~~no.~~No.	Description	~~Incorporated By Reference~~			~~Filed herewith~~
		~~Form~~	~~Date~~	~~Exhibit~~



31.1	Certification of ~~Principal~~Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002*				X

31.2	Certification of ~~Principal~~Chief Financial ~~and Accounting~~ Officer pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002~~2002*				X

32.1	Certification of ~~Principal~~Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002*				X

32.2	Certification of ~~Principal~~Chief Financial ~~and Accounting~~ Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~2002*				X

EX-101.INS	XBRL Instance Document				X

EX-101.SCH	XBRL Taxonomy Extension Schema				X

EX-101.CAL	XBRL Taxonomy Extension Calculation Linkbase				X

EX-101.DEF	XBRL Taxonomy Extension Definition Linkbase				X

EX-101.LAB	XBRL Taxonomy Extension Label Linkbase				X

EX-101.PRE	XBRL Taxonomy Extension Presentation Linkbase				X

______________

* Filed herewith

SIGNATURES

Pursuant to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on ~~November 9, 2017.~~August 12, 2020.



			PANGAEA LOGISTICS SOLUTIONS LTD.

			By:			/s/ Edward Coll
			Edward Coll
			Chief Executive Officer
			(Principal Executive Officer)

			By:			/s/ Gianni ~~DelSignore~~Del Signore
			Gianni ~~DelSignore~~Del Signore
			Chief Financial Officer
			(Principal Financial and Accounting Officer)



	Nine Months Ended September 30,
	2017			2016
Operating activities
Net income	$	4,577,976		$	8,820,206
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense	11,604,168			10,576,223
Loss on sale and leaseback of vessel	9,134,908			—
Amortization of deferred financing costs	527,348			513,311
Amortization of prepaid rent	91,453			—
Unrealized gain on derivative instruments	(430,869		)	(1,212,434		)
(Gain) loss from equity method investee	(282,362		)	68,477
(Recovery of) provision for doubtful accounts	(10,356		)	982,393
Share-based compensation	878,759			274,286
Change in operating assets and liabilities:
Decrease in restricted cash	—			499,269
Accounts receivable	(10,428,305		)	3,824,491
Bunker inventory	(3,267,454		)	(1,845,707		)
Advance hire, prepaid expenses and other current assets	(7,118,526		)	(2,471,301		)
Drydocking costs	(1,043,164		)	(42,478		)
Accounts payable, accrued expenses and other current liabilities	8,021,053			(743,918		)
Deferred revenue	1,490,536			(925,490		)
Net cash provided by operating activities	13,745,165			18,317,328

Investing activities
Purchase of vessels	(47,328,517		)	(3,372,433		)
Purchase of building and equipment	—			(315,818		)
Purchase of non-controlling interest in consolidated subsidiary	(832,572		)	—
Net cash used in investing activities	(48,161,089		)	(3,688,251		)

Financing activities
Proceeds of related party debt	—			1,522,500
Payments of related party debt	—			(2,500,497		)
Proceeds from long-term debt	25,000,000			1,375,971
Payments of financing and issuance costs	(896,175		)	(45,755		)
Payments of long-term debt	(20,635,670		)	(20,809,044		)
Proceeds from sale and leaseback of vessel	28,000,000			—
Payments of capital lease obligations	(768,599		)	—
Decrease (increase) in restricted cash	2,100,000			(5,000,000		)
Proceeds from non-controlling interests	—			1,600,000
Proceeds from private placement of common stock, net of issuance costs	9,631,530			—
Accrued common stock dividends paid	(1,001,424		)	(100,000		)
Net cash provided by (used in) financing activities	41,429,662			(23,956,825		)

Net increase (decrease) in cash and cash equivalents	7,013,738			(9,327,748		)
Cash and cash equivalents at beginning of period	22,322,949			37,520,240
Cash and cash equivalents at end of period	$	29,336,687		$	28,192,492

Supplemental cash flow information and disclosure of noncash items
Cash paid for interest	$	5,052,102		$	3,520,635
Conversion of dividend into common stock	$	4,385,000		$	—
Extinguishment of related party loan	$	9,278,800		$	—



	September 30,		December 31,
	2017		2016
Owned vessels	(unaudited)
m/v BULK PANGAEA	$	16,768,833	$17,879,380
m/v BULK PATRIOT	11,426,580		12,391,724
m/v BULK JULIANA	11,621,472		12,252,733
m/v NORDIC ODYSSEY	25,981,360		27,021,211
m/v NORDIC ORION	26,819,591		27,874,584
m/v BULK TRIDENT	14,386,864		14,962,163
m/v BULK BEOTHUK ⁽¹⁾	—		12,006,270
m/v BULK NEWPORT	13,312,095		13,473,429
m/v NORDIC BARENTS	3,526,711		3,517,151
m/v NORDIC BOTHNIA	3,518,031		3,520,616
m/v NORDIC OSHIMA	30,428,323		31,346,414
m/v NORDIC OLYMPIC	30,668,705		31,560,965
m/v NORDIC ODIN	30,846,740		31,741,658
m/v NORDIC OASIS	31,915,214		32,834,500
m/v BULK ENDURANCE ⁽²⁾	27,284,169		—
m/v BULK FREEDOM ⁽³⁾	8,942,254		—
	287,446,942		272,382,798
Other fixed assets, net	3,390,595		2,882,874
Total fixed assets, net	$	290,837,537	$	275,265,672

Vessels under capital lease
m/v BULK DESTINY ⁽⁴⁾	$	23,365,388	$	—
m/v BULK BEOTHUK ⁽¹⁾	$	6,920,181	$	—
	$	30,285,569	$	—



	Years ending September 30,
	(unaudited)
2018	$	17,830,996
2019	17,999,412
2020	25,225,098
2021	18,921,949
2022	52,779,228
Thereafter	401,865
	$	133,158,548



	2008 common stock dividend			2012 common stock special dividend			2013 common stock dividend		2013 Odyssey and Orion dividend		Total
Balance at December 31, 2015	2,474,125			2,934,357			6,411,540		904,803		12,724,825
Paid in cash	(100,000		)	—			—		—		(100,000		)
Balance at December 31, 2016	2,374,125			2,934,357			6,411,540		904,803		12,624,825
Converted to common shares	(2,374,125		)	(2,010,875		)	—		—		(4,385,000		)
Paid in cash	(100,000		)	(1,001,424		)	—		—		(1,001,424		)
Balance at September 30, 2017	$	—		$	(77,942	)	$	6,411,540	$	904,803	$	7,238,401



	Capital Lease		Operating Leases
2018	$	3,278,295	$	585,717
2019	3,278,295		420,514
2020	3,278,295		365,446
2021	3,278,295		285,348
2022	6,858,295		—
Thereafter	14,227,441		—
Total minimum lease payments	$	34,198,916	$	1,657,025
Less amount representing interest	6,967,515
Present value of minimum lease payments	27,231,401
Less current portion	1,759,303
Long-term portion	$	25,472,098