UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~March 31,~~September 30, 2023


☐			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: 001-36798

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 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~~Nasdaq Stock Market LLC

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 ¨

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 ¨

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

Large accelerated Filer

☐

Accelerated Filer

☒

Non-accelerated Filer

☐

Smaller reporting company

☒

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

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 $0.0001 per share, 46,466,622 shares outstanding as of ~~May 8,~~November 7, 2023.

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of MSeptember a ~~rch 31, 202~~3 30, 2023 (unaudited) and December 31, ~~202~~22022	3

	Consolidated Statements of Operations (unaudited) for the three and nine months ended ~~March 31, 202~~3September 30, 2023 and 20 2 22022	4

	Consolidated Statements of Stockholders' Equity (unaudited) for the three and nine months ended ~~March~~ 3 1 ~~, 202~~3 September 30, 2023 and 20 2 22022	5

	Consolidated Statements of Cash Flows (unaudited) for the ~~three~~nine months ended ~~March 31, 202~~3 September 30, 2023 and 20 2 22022	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2122

Item 3.	Quantitative and Qualitative Disclosures about Market Risks	3133

Item 4.	Controls and Procedures	3133

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	3234
Item 1A.	Risk Factors	3234
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3234
Item 3.	Defaults upon Senior Securities	3234
Item 4.	Mine Safety Disclosures	3234
Item 5.	Other Information	3234
Item 6.	Exhibits	3335
Signatures		3436

Pangaea Logistics Solutions Ltd.

Consolidated Balance Sheets


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	129,149,673	$	128,384,606	Cash and cash equivalents	$	87,358,220	$	128,384,606

Accounts receivable (net of allowance of $4,197,323 and $4,367,848 at March 31, 2023 and December 31, 2022, respectively)		33,439,701		36,755,149
Accounts receivable (net of allowance of $5,301,297 and $4,367,848 at September 30, 2023 and December 31, 2022, respectively)						Accounts receivable (net of allowance of $5,301,297 and $4,367,848 at September 30, 2023 and December 31, 2022, respectively)	53,498,562		36,755,149
Bunker inventory	Bunker inventory	26,734,280		29,104,436		Bunker inventory	26,347,230		29,104,436
Advance hire, prepaid expenses and other current assets	Advance hire, prepaid expenses and other current assets	30,439,156		28,266,831		Advance hire, prepaid expenses and other current assets	31,280,425		28,266,831

Total current assets	Total current assets	219,762,810		222,511,022		Total current assets	198,484,437		222,511,022

Fixed assets, net	Fixed assets, net	461,744,846		476,524,752		Fixed assets, net	479,980,216		476,524,752

Finance lease right of use assets, net	Finance lease right of use assets, net	42,985,763		43,921,569		Finance lease right of use assets, net	40,951,455		43,921,569
Goodwill						Goodwill	3,104,800		—
Other non-current assets	Other non-current assets	5,734,456		5,284,127		Other non-current assets	6,073,002		5,284,127
Total assets	Total assets	$	730,227,875	$	748,241,470	Total assets	$	728,593,910	$	748,241,470

Liabilities and stockholders' equity	Liabilities and stockholders' equity					Liabilities and stockholders' equity
Current liabilities	Current liabilities					Current liabilities
Accounts payable, accrued expenses and other current liabilities	Accounts payable, accrued expenses and other current liabilities	$	40,224,765	$	38,554,131	Accounts payable, accrued expenses and other current liabilities	$	42,374,839	$	38,554,131

Deferred revenue	Deferred revenue	16,419,178		20,883,958		Deferred revenue	13,797,326		20,883,958
Current portion of secured long-term debt	Current portion of secured long-term debt	13,373,846		15,782,530		Current portion of secured long-term debt	31,505,463		15,782,530
Current portion of finance lease liabilities	Current portion of finance lease liabilities	16,467,180		16,365,075		Current portion of finance lease liabilities	26,630,754		16,365,075
Dividend payable	Dividend payable	639,632		626,178		Dividend payable	977,592		626,178
Total current liabilities	Total current liabilities	87,124,601		92,211,872		Total current liabilities	115,285,974		92,211,872

Secured long-term debt, net	Secured long-term debt, net	95,561,614		98,819,739		Secured long-term debt, net	70,953,795		98,819,739
Finance lease liabilities, net	Finance lease liabilities, net	164,519,655		168,513,939		Finance lease liabilities, net	146,474,158		168,513,939
Long-term liabilities - other - Note 10	Long-term liabilities - other - Note 10	19,829,654		19,974,390		Long-term liabilities - other - Note 10	18,502,188		19,974,390

Commitments and contingencies - Note 9	Commitments and contingencies - Note 9					Commitments and contingencies - Note 9

Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Preferred stock, $0.0001 par value, 1,000,000 shares authorized and no shares issued or outstanding	Preferred stock, $0.0001 par value, 1,000,000 shares authorized and no shares issued or outstanding	—		—		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; 46,466,622 shares issued and outstanding at March 31, 2023; 45,898,395 shares issued and outstanding at December 31, 2022		4,648		4,590
Common stock, $0.0001 par value, 100,000,000 shares authorized; 46,466,622 shares issued and outstanding at September 30, 2023; 45,898,395 shares issued and outstanding at December 31, 2022						Common stock, $0.0001 par value, 100,000,000 shares authorized; 46,466,622 shares issued and outstanding at September 30, 2023; 45,898,395 shares issued and outstanding at December 31, 2022	4,648		4,590
Additional paid-in capital	Additional paid-in capital	163,623,173		162,894,080		Additional paid-in capital	164,160,253		162,894,080
Retained earnings	Retained earnings	150,140,417		151,327,392		Retained earnings	162,544,652		151,327,392
Total Pangaea Logistics Solutions Ltd. equity	Total Pangaea Logistics Solutions Ltd. equity	313,768,238		314,226,062		Total Pangaea Logistics Solutions Ltd. equity	326,709,553		314,226,062
Non-controlling interests	Non-controlling interests	49,424,113		54,495,468		Non-controlling interests	50,668,242		54,495,468
Total stockholders' equity	Total stockholders' equity	363,192,351		368,721,530		Total stockholders' equity	377,377,795		368,721,530
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	730,227,875	$	748,241,470	Total liabilities and stockholders' equity	$	728,593,910	$	748,241,470

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

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Operations

(unaudited)

Three Months Ended March 31,
2023 2022

Revenues:
Voyage revenue $ 107,950,123 $ 176,336,751
Charter revenue 5,748,952 15,425,652
Total revenue 113,699,075 191,762,403
Expenses:
Voyage expense 56,814,631 65,250,467
Charter hire expense 22,590,840 77,711,607
Vessel operating expense 13,606,815 13,187,833
General and administrative 5,691,733 5,281,388
Depreciation and amortization 7,326,860 7,301,419
Loss on impairment of vessel — 3,007,809
Loss on sale of vessel 1,172,196 —
Total expenses 107,203,075 171,740,523
Income from operations 6,496,000 20,021,880
Other income (expense):
Interest expense (4,250,514) (3,371,712)
Interest income 1,049,846 539
Loss (income) attributable to Non-controlling interest recorded as long-term liability interest expense 144,736 (1,840,333)
Unrealized (loss) gain on derivative instruments, net (423,569) 7,500,314
Other income 386,413 137,207
Total other (expense) income, net (3,093,088) 2,426,015
Net income 3,402,912 22,447,895
Loss (income) attributable to non-controlling interests 71,355 (2,279,930)
Net income attributable to Pangaea Logistics Solutions Ltd. $ 3,474,267 $ 20,167,965
Earnings per common share:
Basic $ 0.08 $ 0.45
Diluted $ 0.08 $ 0.45
Weighted average shares used to compute earnings per common share:
Basic 44,712,290 44,388,960
Diluted 45,116,719 45,192,983


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Revenues:
Voyage revenue	$	127,884,506	$	173,167,990	$	346,300,186	$	522,693,814
Charter revenue	3,797,528		11,309,147		16,636,920		49,089,682
Terminal & Stevedore Revenue	3,934,154		—		4,453,811		—
Total revenue	135,616,188		184,477,137		367,390,917		571,783,496
Expenses:
Voyage expense	59,075,208		74,716,194		170,349,472		207,874,485
Charter hire expense	25,466,886		50,750,809		77,183,388		194,175,432
Vessel operating expense	14,252,533		15,361,640		41,070,199		41,479,173
Terminal & Stevedore Expenses	3,517,736		—		3,892,318		—
General and administrative	5,500,121		5,776,666		17,115,013		16,195,441
Depreciation and amortization	8,092,495		7,365,561		22,546,350		21,960,413
Loss on impairment of vessel	—		—		—		3,007,809
Loss on sale of vessel	—		—		1,172,196		318,032
Total expenses	115,904,979		153,970,870		333,328,936		485,010,785

Income from operations	19,711,209		30,506,267		34,061,981		86,772,711

Other income (expense):
Interest expense	(4,348,686)		(4,400,473)		(12,724,920)		(11,445,249)
Interest income	775,504		284,154		2,867,914		323,025
Income attributable to Non-controlling interest recorded as long-term liability interest expense	(267,198)		(2,418,844)		(1,027,798)		(5,961,851)
Unrealized gain (loss) on derivative instruments, net	4,531,912		(4,508,758)		2,760,059		(510,093)
Other income	(212,639)		298,679		422,636		517,117
Total other income (expense), net	478,893		(10,745,242)		(7,702,109)		(17,077,051)

Net income	20,190,102		19,761,025		26,359,872		69,695,660
Income attributable to non-controlling interests	(1,321,811)		(972,611)		(1,172,774)		(5,706,848)
Net income attributable to Pangaea Logistics Solutions Ltd.	$	18,868,291	$	18,788,414	$	25,187,098	$	63,988,812

Earnings per common share:
Basic	$	0.42	$	0.42	$	0.56	$	1.44
Diluted	$	0.42	$	0.42	$	0.56	$	1.43

Weighted average shares used to compute earnings per common share:
Basic	44,775,438		44,415,575		44,754,620		44,386,628
Diluted	45,081,668		44,640,278		45,108,039		44,624,228

The accompanying notes are an integral part of these 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						Common Stock		Additional Paid-in Capital	Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest		Total Stockholders' Equity
			Shares												Amount															Total Stockholders' Equity		Amount
Balance at December 31, 2022			45,898,395	$	4,590		$	162,894,080	$	151,327,392	$	314,226,062	$	54,495,468		$	368,721,530
Balance at June 30, 2023																		Balance at June 30, 2023			46,466,622	$	4,648	$	163,890,246	$	148,330,406	$	312,225,300				$	49,346,431	$	361,571,731
Share-based compensation	Share-based compensation		—	—			856,434		—		856,434		—			856,434		Share-based compensation			—	—		270,007		—		270,007		—			270,007
Issuance of restricted shares, net of forfeitures			568,227	58			(127,341)		—		(127,283)		—			(127,283)

Distribution to Non-Controlling Interests			—	—			—		—		—		(5,000,000)			(5,000,000)
Common Stock Dividend			—	—			—		(4,661,242)		(4,661,242)		—			(4,661,242)
Net Income			—	—			—		3,474,267		3,474,267		(71,355)			3,402,912
Balance at March 31, 2023			46,466,622	$	4,648		$	163,623,173	$	150,140,417	$	313,768,238	$	49,424,113		$	363,192,351

Common Stock Dividend																		Common Stock Dividend			—	—		—		(4,654,045)		(4,654,045)		—			(4,654,045)
Net Income																		Net Income			—	—		—		18,868,291		18,868,291		1,321,811			20,190,102
Balance at September 30, 2023																		Balance at September 30, 2023			46,466,622	$	4,648	$	164,160,253	$	162,544,652	$	326,709,553	$	50,668,242		$	377,377,795

Balance at December 31, 2022																		Balance at December 31, 2022			45,898,395	$	4,590	$	162,894,080	$	151,327,392	$	314,226,062	$	54,495,468		$	368,721,530
Share-based compensation																		Share-based compensation			—	—		1,393,514		—		1,393,514		—			1,393,514
Distribution to Non-Controlling Interests																		Distribution to Non-Controlling Interests			—	—		—		—		—		(5,000,000)			(5,000,000)
Issuance of restricted shares, net of forfeitures																		Issuance of restricted shares, net of forfeitures			568,227	58		(127,341)		—		(127,283)		—			(127,283)
Common Stock Dividend																		Common Stock Dividend			—	—		—		(13,969,838)		(13,969,838)		—			(13,969,838)
Net Income																		Net Income			—	—		—		25,187,098		25,187,098		1,172,774			26,359,872
Balance at September 30, 2023																		Balance at September 30, 2023			46,466,622	$	4,648	$	164,160,253	$	162,544,652	$	326,709,553	$	50,668,242		$	377,377,795

																				Common Stock		Additional Paid-in Capital		Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest		Total Stockholders' Equity
																					Shares											Amount
Balance at June 30, 2022																		Balance at June 30, 2022			45,991,977	4,599		162,385,398		125,250,467		287,640,464		53,213,414			340,853,878
Share-based compensation																		Share-based compensation			—	—		319,188		—		319,188		—			319,188

Issuance of restricted shares, net of forfeitures																		Issuance of restricted shares, net of forfeitures			(69,285)	(7)		7		—		—		—			—

		Common Stock		Additional Paid-in Capital			Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest		Total Stockholders' Equity
Common Stock Dividend															Common Stock Dividend					—	—	—		(3,336,710)		(3,336,710)		—		(3,336,710)
Net Income																		Net Income			—	—		—		18,788,414		18,788,414		972,611			19,761,025
Balance at September 30, 2022																		Balance at September 30, 2022			45,922,692	$	4,592	$	162,704,593	$	140,702,171	$	303,411,356	$	54,186,025		$	357,597,381
			Shares				Additional Paid-in Capital		Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest			Total Stockholders' Equity		Amount
Balance at December 31, 2021	Balance at December 31, 2021		45,617,840			300,681,394												Balance at December 31, 2021			45,617,840	4,562		161,534,280		85,663,375		247,202,217		53,479,177			300,681,394
Share-based compensation	Share-based compensation		—	—			827,806		—		827,806		—			827,806		Share-based compensation			—	—		1,457,972		—		1,457,972		—			1,457,972

Issuance of restricted shares, net of forfeitures	Issuance of restricted shares, net of forfeitures		374,137	37			(287,667)		—		(287,630)		—			(287,630)		Issuance of restricted shares, net of forfeitures			304,852	30		(287,659)		—		(287,629)		—			(287,629)
Distribution to Non-Controlling Interests	Distribution to Non-Controlling Interests		—	—									(5,000,000)			(5,000,000)		Distribution to Non-Controlling Interests			—	—		—		—		—		(5,000,000)			(5,000,000)
Common Stock Dividend	Common Stock Dividend		—	—					(2,276,596)		(2,276,596)					(2,276,596)		Common Stock Dividend			—	—		—		(8,950,016)		(8,950,016)		—			(8,950,016)
Net Income	Net Income		—	—			—		20,167,965		20,167,965		2,279,930			22,447,895		Net Income			—	—		—		63,988,812		63,988,812		5,706,848			69,695,660
Balance at March 31, 2022			45,991,977	$	4,599		$	162,074,419	$	103,554,744	$	265,633,762	$	50,759,107		$	316,392,869

Balance at September 30, 2022																		Balance at September 30, 2022			45,922,692	$	4,592	$	162,704,593	$	140,702,171	$	303,411,356	$	54,186,025		$	357,597,381

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

Pangaea Logistics Solutions, Ltd.

Consolidated Statements of Cash Flows

(unaudited)

Three Months Ended March 31,
2023 2022
Operating activities
Net income $ 3,402,912 $ 22,447,895
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense 7,326,860 7,301,419
Amortization of deferred financing costs 239,207 256,830
Amortization of prepaid rent 30,484 30,484
Unrealized loss (gain) on derivative instruments 423,569 (7,500,314)
Income from equity method investee (386,413) (137,207)
(Loss) earnings attributable to non-controlling interest recorded as other long term liability (144,736) 1,840,333
(Recovery) provision for doubtful accounts (170,525) 696,869
Loss on impairment of vessel — 3,007,809
Loss on sale of vessel 1,172,196 —
Drydocking costs (1,347,899) (1,638,364)
Share-based compensation 856,434 827,806
Change in operating assets and liabilities:
Accounts receivable 3,485,973 12,196,570
Bunker inventory 2,370,157 (12,061,014)
Advance hire, prepaid expenses and other current assets (2,917,384) 6,255,996
Accounts payable, accrued expenses and other current liabilities 1,695,595 4,843,359
Deferred revenue (4,464,780) (6,306,463)
Net cash provided by operating activities 11,571,650 32,062,008
Investing activities
Purchase of vessels and vessel improvements (75,291) (18,261,685)
Purchase of fixed assets and equipment — (67,178)
Proceeds from sale of vessel 8,933,700 —
(Contributions to) payment from non-consolidated subsidiaries (63,917) 81,495
Net cash provided by (used in) investing activities 8,794,492 (18,247,368)
Financing activities
Payments of financing fees and debt issuance costs — (331,317)
Payments of long-term debt (5,765,505) (3,353,207)
Proceeds from finance leases — 15,000,000
Payments of finance lease obligations (4,060,499) (3,837,280)
Dividends paid to non-controlling interests (5,000,000) (5,000,000)
Accrued common stock dividends paid (4,647,788) (2,292,620)
Cash paid for incentive compensation shares relinquished (127,283) (287,630)
Net cash used in financing activities (19,601,075) (102,054)
Net increase in cash and cash equivalents 765,067 13,712,586
Cash and cash equivalents at beginning of period 128,384,606 56,208,902
Cash and cash equivalents at end of period $ 129,149,673 $ 69,921,488


	Nine Months Ended September 30,
	2023		2022
Operating activities
Net income	$	26,359,872	$	69,695,660
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense	22,546,350		21,960,413
Amortization of deferred financing costs	701,275		764,897
Amortization of prepaid rent	91,048		91,453
Unrealized (gain) loss on derivative instruments	(2,760,059)		510,093
Income from equity method investee	(417,636)		(517,117)
Earnings attributable to non-controlling interest recorded as other long term liability	1,027,798		5,961,851
Provision for doubtful accounts	933,449		1,282,624
Loss on impairment of vessel	—		3,007,809
Loss on sale of vessel	1,172,196		318,032
Drydocking costs	(3,368,800)		(5,972,024)
Share-based compensation	1,393,514		1,457,972
Change in operating assets and liabilities:
Accounts receivable	(17,676,862)		10,633,346
Bunker inventory	2,757,206		(3,504,215)
Advance hire, prepaid expenses and other current assets	885,264		14,095,660
Accounts payable, accrued expenses and other current liabilities	3,324,586		(2,946,749)
Deferred revenue	(7,086,632)		(14,971,451)
Net cash provided by operating activities	29,882,569		101,868,254

Investing activities
Purchase of vessels and vessel improvements	(27,217,355)		(18,370,977)
Advances for vessel purchases	—		(1,710,000)
Purchase of fixed assets and equipment	—		187,638

Proceeds from sale of vessel	8,037,804		8,400,000
Acquisitions, net of cash acquired	(7,200,000)		—
Dividends received from equity method investments	1,637,500		—
Contributions to non-consolidated subsidiaries	(275,000)		(18,505)
Net cash used in investing activities	(25,017,051)		(11,511,844)

Financing activities

Payments of financing fees and debt issuance costs	—		(331,317)
Payments of long-term debt	(12,435,039)		(12,223,052)
Proceeds from finance leases	—		15,000,000
Payments of finance lease obligations	(12,211,158)		(11,808,661)
Payments of other long-term liabilities	—		(5,000,000)
Dividends paid to non-controlling interests	(5,000,000)		(5,000,000)
Accrued common stock dividends paid	(13,618,424)		(8,966,039)
Cash paid for incentive compensation shares relinquished	(127,283)		(287,629)

Payments to non-controlling interest recorded as long-term liability	(2,500,000)		—
Net cash used in financing activities	(45,891,904)		(28,616,698)

Net (decrease) increase in cash and cash equivalents	(41,026,386)		61,739,712
Cash and cash equivalents at beginning of period	128,384,606		56,208,902
Cash and cash equivalents at end of period	$	87,358,220	$	117,948,614

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

NOTE 1 - GENERAL INFORMATION AND RECENT EVENTS

Organization and General

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.

At ~~March 31,~~September 30, 2023, the Company owns three Panamax, two Ultramax Ice Class 1C, one Ultramax and ~~eight~~nine Supramax drybulk vessels. The Company owns two-thirds of Nordic Bulk Holding Company Ltd. ("NBHC") which owns a fleet of six Panamax Ice Class 1A drybulk vessels. The Company owns 50% of Nordic Bulk Partners LLC. ("NBP") which owns a fleet of four Post Panamax Ice Class 1A drybulk vessels. The Company also has a 50% interest in the owner of a deck barge. On June 1, 2023, the Company completed the acquisition of port and terminal operations in Fort Lauderdale, Florida and Baltimore, Maryland.

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and the 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, necessary for a fair presentation of the interim period results. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022.

As of January 1, 2023, we adopted ASU No. 2016-13, "Financial Instruments—Credit Losses" ("ASU 2016-13"). ASU 2016-13 amends the current financial instrument impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. The adoption of the accounting standard did not have any material impact on our consolidated financial statements.

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. Significant estimates include the percentage completion of spot voyages, the establishment of the allowance for credit losses and the estimate of salvage value used in determining vessel depreciation expense. Actual results could differ from those estimates.

Concentration of credit risk

The Company’s accounts receivable balance includes outstanding receivables from two significant customers. These balances comprise 32% and 31% of accounts receivable, respectively, as of September 30, 2023.

Advance hire, prepaid expenses and other current assets

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


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Advance hire	Advance hire	$	4,764,318	$	3,491,835	Advance hire	$	3,283,793	$	3,491,835
Prepaid expenses	Prepaid expenses	5,577,989		4,777,648		Prepaid expenses	6,766,441		4,777,648
Accrued receivables	Accrued receivables	6,243,358		7,721,500		Accrued receivables	8,325,946		7,721,500
Cash margin on deposit	Cash margin on deposit	5,352,763		3,239,947		Cash margin on deposit	1,154,720		3,239,947
Derivative assets ~~(1)~~	Derivative assets ~~(1)~~	4,147,085		4,892,144		Derivative assets ~~(1)~~	8,230,260		4,892,144
Other current assets	Other current assets	4,353,643		4,143,757		Other current assets	3,519,265		4,143,757
		$	30,439,156	$	28,266,831		$	31,280,425	$	28,266,831

~~(1)The Derivative assets were included in Other current assets at December 31, 2022.~~

Other non-current Assets

Other non-current assets were comprised of the following:


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Name	Name	(unaudited)				Name	(unaudited)
Intangible Assets - Note 12: Acquisitions						Intangible Assets - Note 12: Acquisitions	$	2,012,240	$	—
Investment in Seamar Management	Investment in Seamar Management	$	699,302	$	598,725	Investment in Seamar Management	803,027		598,725
Investment in Pangaea Logistics Solutions (US) LLC		4,018,523		3,954,605
Investment in unconsolidated joint ventures						Investment in unconsolidated joint ventures	1,823,898		3,954,605
Investment in Narragansett Bulk Carriers (US) Corp	Investment in Narragansett Bulk Carriers (US) Corp	519,975		234,141		Investment in Narragansett Bulk Carriers (US) Corp	519,975		234,141
Other investments	Other investments	496,656		496,656		Other investments	913,862		496,656
		$	5,734,456	$	5,284,127		$	6,073,002	$	5,284,127

Accounts payable, accrued expenses and other current liabilities

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


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Accounts payable	Accounts payable	$	9,812,970	$	9,979,451	Accounts payable	$	9,321,153	$	9,979,451
Accrued expenses	Accrued expenses	9,005,625		11,795,973		Accrued expenses	12,649,770		11,795,973
Bunkers suppliers	Bunkers suppliers	9,753,506		6,526,725		Bunkers suppliers	4,788,647		6,526,725
Charter hire payable	Charter hire payable	11,094,845		9,337,941		Charter hire payable	12,583,093		9,337,941

Other accrued liabilities	Other accrued liabilities	557,819		914,041		Other accrued liabilities	3,032,176		914,041
		$	40,224,765	$	38,554,131		$	42,374,839	$	38,554,131

Leases

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 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, Leases ("ASC 842"), the Company made an accounting policy election by class of underlying asset for leases with a term of 12 months or less, to forego recognizing a right-of-use asset and lease liability on its balance sheet. For the quarter ending ~~March 31,~~September 30, 2023, 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.

Time charter out contracts

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 agreed rate per day. The charterer has the power to direct the use and 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.

At ~~March 31,~~September 30, 2023, the Company had ~~six~~two vessel chartered to customers under time charters that contained a lease. These ~~six~~two leases varied in original length from 3730 days to ~~174~~32 days. The lease payments due under these arrangements totaled approximately ~~$2,833,000~~$247,000 and each of the time charters were due to be completed in 4410 days or less.

At ~~March 31,~~September 30, 2022, the Company had ~~four~~seven vessels chartered to customers under time charters that ~~contain leases.~~included a lease. These ~~four~~seven leases varied in original length from 3327 days to ~~138~~66 days. ~~At March 31, 2022,~~The lease payments due under ~~these arrangements~~this arrangement totaled approximately ~~$1,991,000~~$2,481,000 and each ~~of the~~ time ~~charters were~~charter was due to be completed in 2144 days or less.

The Company does not have any sales-type or direct financing leases.

Office leases

The Company has ~~two~~four non-cancelable office and office equipment leases. The resulting lease assets and liabilities are not material.

Revenue Recognition

In a voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or "dead" freight. The voyage contract generally has standard payment terms of 95% freight paid within three days after completion of loading. The voyage charter party generally has a "demurrage" or "despatch" clause. As per this clause, the charterer reimburses the Company for any delays that exceed the agreed to laytime at the ports visited, with the amounts recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities happen within the allowed laytime which is known as despatch and results in a reduction of revenue. In a voyage charter contract, the performance obligations begin to be satisfied once the vessel begins loading the cargo. The Company determined that its voyage charter contracts consist of a single performance obligation of transporting the cargo within a specified time period. Therefore, the performance obligation is met evenly as the voyage progresses, and the revenue is recognized on a straight-line basis over the voyage days from the commencement of the loading of cargo to completion of discharge.

The voyage contracts are considered service contracts which fall under the provisions of ASC 606, Revenue from Contracts with Customers because the Company, as the shipowner, retains control over the operations of the vessel such as directing the routes taken or the vessel speed. The voyage contracts generally have variable consideration in the form of demurrage or despatch.

During time charter agreements, 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, the charterers have substantive decision-making rights to direct how and for what purpose the vessel is used. As such, the Company has identified that time charter agreements contain a lease in accordance with ASC 842. Revenue is not earned when vessels are offhire.

In a stevedore service contract, the Company is paid to provide cargo handling services on a per unit basis for a specified quantity of cargo. The consideration in such a contract is determined on the basis of a rate per unit of cargo handled. The contract may contain minimum quantities. Revenues from stevedore service contracts are earned and recognized on a per unit basis as completed over the performance period.

Recently Issued Accounting Pronouncements Not Yet Adopted

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope,” which clarified that certain optional expedients and exceptions in Topic 848 apply to derivatives that are affected by the discounting transition due to reference rate reform. In December 2022, the FASB issued ASU No. 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848," which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief under Topic 848. The Company is currently evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures.

NOTE 3 - CASH AND CASH EQUIVALENTS

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 and cash equivalents reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows:


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Money market accounts – cash equivalents	Money market accounts – cash equivalents	$	38,349,871	$	33,689,361	Money market accounts – cash equivalents	$	35,600,618	$	33,689,361
Time deposit accounts - cash equivalents(1)	Time deposit accounts - cash equivalents(1)	60,085,551		46,000,000		Time deposit accounts - cash equivalents(1)	17,522,503		46,000,000
Cash ~~(1)~~(2)	Cash ~~(1)~~(2)	30,714,251		48,695,245		Cash ~~(1)~~(2)	34,235,099		48,695,245
Total cash and cash equivalents	Total cash and cash equivalents	$	129,149,673	$	128,384,606	Total cash and cash equivalents	$	87,358,220	$	128,384,606

(1) ~~Consists~~It consists of cash deposits at various major banks with interest rates ranging from 5.53% to 5.71%.

(2) It consists of cash deposits at various major banks.

As of ~~March 31,~~September 30, 2023 and December 31, 2022, wethe Company held cash and cash equivalents in the following subsidiaries:


Cash and cash equivalents	Cash and cash equivalents	March 31, 2023		December 31, 2022		Cash and cash equivalents	September 30, 2023		December 31, 2022
		(unaudited)					(unaudited)
Pangaea (1)	Pangaea (1)	$	100,198,822	$	85,398,332	Pangaea (1)	$	60,133,750	$	85,398,332
NBHC (2)	NBHC (2)	20,176,912		34,718,529		NBHC (2)	22,119,043		34,718,529
NBP and Deck Barge (3)	NBP and Deck Barge (3)	8,773,939		8,267,745		NBP and Deck Barge (3)	5,105,427		8,267,745
Total cash and cash equivalents	Total cash and cash equivalents	$	129,149,673	$	128,384,606	Total cash and cash equivalents	$	87,358,220	$	128,384,606

(1) Held by 100% owned Pangaea consolidated subsidiaries

(2) Held by a 67% owned Pangaea consolidated subsidiary

(3) Held by a 50% owned Pangaea consolidated subsidiary

NOTE 4 - FIXED ASSETS

At ~~March 31,~~September 30, 2023, the Company owned ~~twenty-four~~twenty-five dry bulk vessels including eight financed under finance leases; and one barge. The carrying amounts of these vessels, including unamortized drydocking costs, are as follows:

March 31, December 31,
2023 2022
(unaudited)
m/v NORDIC ODYSSEY (1)
$ 20,251,200 $ 20,685,092
m/v NORDIC ORION (1)
21,002,307 21,406,429
m/v NORDIC OSHIMA (1)
23,953,647 24,292,108
m/v NORDIC OLYMPIC (1)
24,297,475 24,627,857
m/v NORDIC ODIN (1)
24,397,484 24,726,033
m/v NORDIC OASIS (1)
25,888,026 26,232,723
m/v NORDIC NULUUJAAK (2) (4)
37,161,221 37,518,857
m/v NORDIC QINNGUA (2) (4)
37,075,867 37,428,322
m/v NORDIC SANNGIJUQ (2) (4)
36,655,924 37,000,230
m/v NORDIC SIKU(2) (4)
37,047,374 37,393,171
m/v BULK ENDURANCE 22,794,587 23,106,438
m/v BULK COURAGEOUS (4)
15,627,805 15,755,839
m/v BULK CONCORD (4)
19,136,437 19,394,966
m/v BULK NEWPORT — 10,211,578
m/v BULK FREEDOM 8,513,607 7,464,118
m/v BULK PRIDE 11,929,790 12,174,942
m/v BULK SPIRIT (4)
11,732,489 11,703,170
m/v BULK SACHUEST 17,055,812 17,188,278
m/v BULK INDEPENDENCE 14,597,890 14,879,681
m/v BULK FRIENDSHIP (4)
13,463,111 13,680,578
m/v BULK VALOR 16,938,354 17,106,444
m/v BULK PROMISE 17,457,107 17,619,467
MISS NORA G PEARL (3)
2,156,372 2,268,086
459,133,886 473,864,407
Other fixed assets, net 2,610,960 2,660,345
Total fixed assets, net $ 461,744,846 $ 476,524,752
Right of Use Assets
m/v BULK XAYMACA $ 12,717,876 $ 13,082,596
m/v BULK DESTINY 19,553,509 19,814,777
m/v BULK TRIDENT 10,714,378 11,024,196
$ 42,985,763 $ 43,921,569


	September 30,		December 31,
	2023		2022
	(unaudited)
m/v NORDIC ODYSSEY (1)	$	19,383,416	$	20,685,092
m/v NORDIC ORION (1)	20,194,064		21,406,429
m/v NORDIC OSHIMA (1)	23,276,725		24,292,108
m/v NORDIC OLYMPIC (1)	23,636,712		24,627,857
m/v NORDIC ODIN (1)	23,740,385		24,726,033
m/v NORDIC OASIS (1)	25,198,632		26,232,723
m/v NORDIC NULUUJAAK (2) (4)	36,445,948		37,518,857
m/v NORDIC QINNGUA (2) (4)	36,370,957		37,428,322
m/v NORDIC SANNGIJUQ (2) (4)	35,967,310		37,000,230
m/v NORDIC SIKU(2) (4)	36,355,781		37,393,171
m/v BULK ENDURANCE	22,170,885		23,106,438
m/v BULK PRUDENCE	26,774,202		—
m/v BULK COURAGEOUS (4)	15,293,704		15,755,839
m/v BULK CONCORD (4)	18,707,368		19,394,966
m/v BULK NEWPORT	—		10,211,578
m/v BULK FREEDOM	8,091,239		7,464,118
m/v BULK PRIDE	11,439,487		12,174,942
m/v BULK SPIRIT (4)	13,231,805		11,703,170
m/v BULK SACHUEST	16,689,066		17,188,278
m/v BULK INDEPENDENCE	14,034,308		14,879,681
m/v BULK FRIENDSHIP (4)	13,028,179		13,680,578
m/v BULK VALOR	16,602,173		17,106,444
m/v BULK PROMISE	17,132,386		17,619,467

MISS NORA G PEARL (3)	1,932,948		2,268,086
	475,697,680		473,864,407
Other fixed assets, net	4,282,536		2,660,345
Total fixed assets, net	$	479,980,216	$	476,524,752

Right of Use Assets
m/v BULK XAYMACA	$	11,988,438	$	13,082,596
m/v BULK DESTINY	19,031,374		19,814,777
m/v BULK TRIDENT (5)	9,931,643		11,024,196
	$	40,951,455	$	43,921,569

(1) Vessels are owned by NBHC, a consolidated joint venture in which the Company has a two-third ownership interest at ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

(2) Vessels are owned by NBP, a consolidated joint venture in which the Company has a 50% ownership interest at ~~March 31,~~September 30, 2023 and December 31, 2022.

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

(4) Refer to Note 6, "Finance Leases" of our Financial Statements for additional information related to the vessels under finance lease.

(5) On October 17, 2023, the Company entered into a memorandum of agreement to sell the vessel Bulk Trident (a 2006-built Supramax) for total consideration of $9.8 million. The vessel is expected to deliver to the buyer in December 2023.

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 amounts. If indicators of impairment are present, we perform an analysis of the anticipated undiscounted future net cash flows to be derived from the 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.

~~During~~The Company concluded that no triggering event had occurred during the third quarter of 2023, which would require impairment testing. However, during the first quarter of 2023, the Company determined that a triggering event had occurred related to the sale of a vessel, as ~~the~~its carrying value exceeded its fair value. On January 18, 2023, the Company signed a memorandum of agreement to sell the m/v Bulk Newport for $8.9 million in net consideration after brokerage commissions. As a result, we recorded a loss on sale of $1.2 million in the first quarter of 2023. The Company performed an impairment analysis on each asset group and concluded the estimated undiscounted future cash flows were higher than their carrying amounts and as such, no additional loss on impairment was recognized.

~~During~~The Company concluded that no triggering event had occurred during the third quarter of 2022, which would require impairment testing. However, during the first quarter of 2022, the Company determined that a triggering event occurred related to the sale of a vessel, as the carrying value exceeded its fair value. On April 20, 2022, the Company signed a memorandum of agreement to sell the m/v Bulk Pangaea for $8.6 million in net consideration after brokerage commissions. As a result, we recorded an impairment charge of $3.0 million in the first quarter of 2022. The Company performed an impairment analysis on each asset group and concluded the estimated undiscounted future cash flows were higher than their carrying amounts and as such, no additional loss on impairment was recognized.

NOTE 5 - DEBT

Long-term debt consists of the following:


		March 31, 2023		December 31, 2022		Interest Rate (%) (1)		Maturity Date		September 30, 2023		December 31, 2022		Interest Rate (%) (1)		Maturity Date
		(unaudited)								(unaudited)

Bulk Nordic Odyssey (MI) Corp., Bulk Nordic Orion (MI) Corp. Senior Secured Term Loan Facility (2) (3)	Bulk Nordic Odyssey (MI) Corp., Bulk Nordic Orion (MI) Corp. Senior Secured Term Loan Facility (2) (3)	13,929,754		14,395,409		2.95	%	December 2027	Bulk Nordic Odyssey (MI) Corp., Bulk Nordic Orion (MI) Corp. Senior Secured Term Loan Facility (2) (3)	12,988,115		14,395,409		2.95	%	December 2027
Bulk Nordic Oshima (MI) Corp., Bulk Nordic Odin (MI) Corp., Bulk Nordic Olympic (MI) Corp., Bulk Nordic Oasis (MI) Corp. Secured Term Loan Facility (2) (3)	Bulk Nordic Oshima (MI) Corp., Bulk Nordic Odin (MI) Corp., Bulk Nordic Olympic (MI) Corp., Bulk Nordic Oasis (MI) Corp. Secured Term Loan Facility (2) (3)	43,400,000		44,600,000		3.38	%	June 2027	Bulk Nordic Oshima (MI) Corp., Bulk Nordic Odin (MI) Corp., Bulk Nordic Olympic (MI) Corp., Bulk Nordic Oasis (MI) Corp. Secured Term Loan Facility (2) (3)	41,000,000		44,600,000		3.38	%	June 2027
The Amended Senior Facility - Dated May 13, 2019 (formerly The Amended Senior Facility - Dated December 21, 2017) (4)	The Amended Senior Facility - Dated May 13, 2019 (formerly The Amended Senior Facility - Dated December 21, 2017) (4)								The Amended Senior Facility - Dated May 13, 2019 (formerly The Amended Senior Facility - Dated December 21, 2017) (4)
Bulk Nordic Six Ltd. - Tranche A (2)	Bulk Nordic Six Ltd. - Tranche A (2)	9,833,326		10,099,993		4.39	%	May 2024	Bulk Nordic Six Ltd. - Tranche A (2)	9,299,992		10,099,993		4.39	%	May 2024
Bulk Nordic Six Ltd. - Tranche B	Bulk Nordic Six Ltd. - Tranche B	—		2,070,000				Paid in full in January 10, 2023	Bulk Nordic Six Ltd. - Tranche B	—		2,070,000				Paid in full in January 10, 2023
Bulk Pride - Tranche C (2)	Bulk Pride - Tranche C (2)	2,725,000		3,000,000		5.39	%	May 2024	Bulk Pride - Tranche C (2)	2,175,000		3,000,000		5.39	%	May 2024
Bulk Independence - Tranche E (2)	Bulk Independence - Tranche E (2)	10,250,000		10,500,000		3.54	%	May 2024	Bulk Independence - Tranche E (2)	9,750,000		10,500,000		3.54	%	May 2024

Bulk Valor Corp. Loan and Security Agreement (2)	Bulk Valor Corp. Loan and Security Agreement (2)	11,093,113		11,424,507		3.29	%	June 2028	Bulk Valor Corp. Loan and Security Agreement (2)	10,426,195		11,424,507		3.29	%	June 2028
Bulk Promise Corp. (2)	Bulk Promise Corp. (2)	10,723,556		11,069,630		5.45	%	October 2027	Bulk Promise Corp. (2)	10,031,408		11,069,630		5.45	%	October 2027
Bulk Sachuest (2)	Bulk Sachuest (2)	8,313,751		8,500,000		6.19	%	October 2029	Bulk Sachuest (2)	7,928,258		8,500,000		6.19	%	October 2029
109 Long Wharf Commercial Term Loan	109 Long Wharf Commercial Term Loan	—		374,466				Paid in full in January 24, 2023	109 Long Wharf Commercial Term Loan	—		374,466				Paid in full in January 24, 2023
Total	Total	$	110,268,500	$	116,034,005				Total	$	103,598,968	$	116,034,005
Less: unamortized issuance costs, net	Less: unamortized issuance costs, net	(1,333,040)		(1,697,209)					Less: unamortized issuance costs, net	(1,139,710)		(1,431,736)
		$	108,935,460	$	114,336,796					$	102,459,258	$	114,602,269
Less: current portion	Less: current portion	(13,373,846)		(15,443,115)					Less: current portion	(31,505,463)		(15,782,530)
Secured long-term debt, net	Secured long-term debt, net	$	95,561,614	$	98,893,681				Secured long-term debt, net	$	70,953,795	$	98,819,739

(1)As of ~~March 31,~~September 30, 2023.

(2)Interest rates on the loan facilities are fixed.

(3)The borrower under this facility is NBHC. The Company has two-third's ownership interest and an independent third party has one-third ownership interest in NBHC. NBHC is consolidated in accordance with ASC 810-10 and as such, amounts pertaining to the non-controlling ownership held by the third parties in the financial position of NBHC are reported as non-controlling interest in the accompanying balance sheets.

(4)This facility is cross-collateralized by the vessels m/v Bulk Endurance, m/v Bulk Pride, and m/v Bulk Independence and is guaranteed by the Company.

The future minimum annual payments under the debt agreements are as follows:


		Years ending December 31,			Years ending December 31,
		(unaudited)			(unaudited)
2023 (remainder of the year)	2023 (remainder of the year)	$	10,017,024	2023 (remainder of the year)	$	3,347,491
2024	2024	30,751,725		2024	30,751,725
2025	2025	10,476,019		2025	10,476,019
2026	2026	10,638,024		2026	10,638,024
2027	2027	39,955,014		2027	39,955,014
Thereafter	Thereafter	8,430,694		Thereafter	8,430,695
		$	110,268,500		$	103,598,968

Financial Covenants

Under the Company's respective debt agreements, the Company is required to comply with certain financial 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 and to maintain positive working capital. The Company was in compliance with all applicable financial covenants as of ~~March 31,~~September 30, 2023 and December 31, 2022.

NOTE 6 - FINANCE LEASES

The Bulk Destiny, Bulk Trident, Bulk Xaymaca, Bulk Spirit, Bulk Friendship, Bulk Courageous, Nordic Nuluujaak, Nordic Qinngua, Nordic ~~Sanngiguq,~~Sanngijuq, Nordic Siku and Bulk Concord are classified as finance leases and the leases are secured by the assignment of earnings and insurances and by guarantees of the Company. Minimum lease payments under finance leases are recognized on a straight‑line basis over the term of the lease and the Company will own these vessels at the end of lease term. Refer to the Company's annual report Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 15, 2023 for additional information on these finance leases.

Finance lease consists of the following as of ~~March 31,~~September 30, 2023:


		March 31, 2023		December 31, 2022		Interest Rate (%) (1)		Maturity Date		September 30, 2023		December 31, 2022		Interest Rate (%) (1)		Maturity Date
		(unaudited)								(unaudited)
Bulk PODS Ltd.	Bulk PODS Ltd.	$	6,145,833	$	6,606,770	5.08	%	December 2027	Bulk PODS Ltd.	$	5,223,958	$	6,606,770	5.40	%	December 2027
Bulk Trident Ltd.(4)	Bulk Trident Ltd.(4)	5,145,586		5,551,836		4.97	%	June 2027	Bulk Trident Ltd.(4)	4,333,088		5,551,836		5.41	%	June 2027
Bulk Spirit Ltd.	Bulk Spirit Ltd.	8,342,448		8,627,604		5.10	%	February 2027	Bulk Spirit Ltd.	7,772,135		8,627,604		5.10	%	February 2027
Bulk Nordic Five Ltd. (2)	Bulk Nordic Five Ltd. (2)	12,761,526		13,142,885		3.92	%	April 2028	Bulk Nordic Five Ltd. (2)	11,988,048		13,142,885		3.92	%	April 2028
Bulk Friendship Corp. (2)	Bulk Friendship Corp. (2)	9,258,955		9,507,875		5.29	%	September 2024	Bulk Friendship Corp. (2)	8,738,507		9,507,875		5.29	%	September 2024
Bulk Nordic Seven LLC (3)	Bulk Nordic Seven LLC (3)	29,694,533		30,100,318		6.80	%	May 2036	Bulk Nordic Seven LLC (3)	28,885,732		30,100,318		6.80	%	May 2036
Bulk Nordic Eight LLC(3)	Bulk Nordic Eight LLC(3)	29,679,918		30,088,514		6.80	%	June 2036	Bulk Nordic Eight LLC(3)	28,876,928		30,088,514		6.80	%	June 2036
Bulk Nordic Nine LLC(3)	Bulk Nordic Nine LLC(3)	29,769,339		30,163,750		6.80	%	September 2036	Bulk Nordic Nine LLC(3)	28,983,613		30,163,750		6.80	%	September 2036
Bulk Nordic Ten LLC(3)	Bulk Nordic Ten LLC(3)	29,880,562		30,276,595		6.80	%	November 2036	Bulk Nordic Ten LLC(3)	29,103,174		30,276,595		6.80	%	November 2036
Bulk Courageous Corp. (2)	Bulk Courageous Corp. (2)	9,900,000		10,200,000		3.93	%	April 2028	Bulk Courageous Corp. (2)	9,300,000		10,200,000		3.93	%	April 2028
Phoenix Bulk 25 Corp. (2)	Phoenix Bulk 25 Corp. (2)	13,272,937		13,645,990		4.67	%	February 2029	Phoenix Bulk 25 Corp. (2)	12,495,796		13,645,990		4.67	%	February 2029
Total	Total	$	183,851,637	$	187,912,137				Total	$	175,700,979	$	187,912,137
Less: unamortized issuance costs, net	Less: unamortized issuance costs, net	(2,864,802)		(3,033,123)					Less: unamortized issuance costs, net	(2,596,067)		(3,033,123)
		$	180,986,835	$	184,879,014					$	173,104,912	$	184,879,014
Less: current portion	Less: current portion	(16,467,180)		(16,365,075)					Less: current portion	(26,630,754)		(16,365,075)
Secured long-term debt, net		$	164,519,655	$	168,513,939
Long-term finance lease liabilities, net									Long-term finance lease liabilities, net	$	146,474,158	$	168,513,939

(1)As of ~~March 31,~~September 30, 2023 including the effect of interest rate cap if any.

(2)Interest rates on the loan facilities are fixed.

(3)The Company entered into an interest rate cap through Q2 of 2026 and Q4 2026 which caps the LIBOR rate at ~~3.25%~~3.51%.

(4)On October 6, 2023 the Company declared its purchase option on the m/v Bulk Trident lease for approximately $4.6 million. The transaction is expected to close on November 20, 2023. As a result, the remaining balance of the lease has been reclassified as a current portion of finance lease liabilities.

The following table provides details of the Company's future minimum lease payments under finance lease liabilities recorded on the Company's consolidated balance sheets as of ~~March 31,~~September 30, 2023.


Year ending December 31,	Year ending December 31,	Amount		Year ending December 31,	Amount
		(unaudited)			(unaudited)
2023 (remainder of the year)	2023 (remainder of the year)	$	23,008,493	2023 (remainder of the year)	$	12,302,663
2024	2024	35,973,099		2024	34,974,182
2025	2025	26,642,442		2025	25,360,402
2026	2026	24,048,813		2026	23,876,137
2027	2027	24,249,449		2027	24,796,131
Thereafter	Thereafter	140,990,896		Thereafter	144,419,951
Total minimum lease payments	Total minimum lease payments	$	274,913,192	Total minimum lease payments	$	265,729,466
Less imputed interest	Less imputed interest	91,061,555		Less imputed interest	90,028,487
Present value of minimum lease payments	Present value of minimum lease payments	183,851,637		Present value of minimum lease payments	175,700,979
Less current portion	Less current portion	(16,467,180)		Less current portion	(26,630,754)
Less issuance costs	Less issuance costs	(2,864,802)		Less issuance costs	(2,596,067)
Long-term portion	Long-term portion	$	164,519,655	Long-term portion	$	146,474,158

NOTE 7 - DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS

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). These economic hedges do not 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.

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. The Company enters into fuel swap contracts that are not designated 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.

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.

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 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.

The following table summarizes assets and liabilities measured at fair value on a recurring basis at ~~March 31,~~September 30, 2023 and December 31, 2022:


		Asset Derivative					Liability Derivative						Asset Derivative					Liability Derivative
Derivative instruments	Derivative instruments	Balance Sheet Location	03/31/2023		12/31/2022		Balance Sheet Location	3/31/2023		12/31/2022		Derivative instruments	Balance Sheet Location	09/30/2023		12/31/2022		Balance Sheet Location	9/30/2023		12/31/2022
			(unaudited)					(unaudited)						(unaudited)					(unaudited)
Margin accounts (1)	Margin accounts (1)	Other current assets	$	5,352,763	$	3,239,947	Other current liabilities	$	—	$	—	Margin accounts (1)	Other current assets	$	1,154,720	$	3,239,947	Other current liabilities	$	—	$	—
Forward freight agreements (2)	Forward freight agreements (2)	Other current assets	$	—	$	—	Other current liabilities	$	2,223	$	164,787	Forward freight agreements (2)	Other current assets	$	—	$	—	Other current liabilities	$	901,770	$	164,787
Fuel swap contracts (2)	Fuel swap contracts (2)	Other current assets	$	78,155	$	—	Other current liabilities			$	158,926	Fuel swap contracts (2)	Other current assets	$	2,782,324	$	—	Other current liabilities	$	—	$	158,926
Interest rate cap (2)	Interest rate cap (2)	Other current assets	$	4,068,930	$	4,892,144	Other current liabilities	$	—	$	—	Interest rate cap (2)	Other current assets	$	5,447,936	$	4,892,144	Other current liabilities	$	—	$	—

(1) The fair value measurements were all categorized within Level 1 of the fair value hierarchy.

(2) These fair value measurements were all categorized within Level 2 of the fair value hierarchy.

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 presents the effect of our derivative financial instruments on the consolidated statements of operations for the three and ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022:


		Unrealized (loss) gain on derivative instruments				Unrealized gain (loss) on derivative instruments
		For the three months ended					Three Months Ended				Nine Months Ended
Derivative instruments	Derivative instruments	03/31/2023		3/31/2022				Derivative instruments	09/30/2023		9/30/2022		09/30/2023		9/30/2022
		(unaudited)							(unaudited)				(unaudited)
Forward freight agreements	Forward freight agreements	$	162,564	$	2,759,907			Forward freight agreements	$	941,518	$	(3,811,168)	$	(736,983)	$	(2,749,589)
Fuel Swap Contracts	Fuel Swap Contracts	237,081		3,022,781				Fuel Swap Contracts	3,430,759		(3,195,080)		$	2,941,250	$	(2,305,795)
Interest rate cap	Interest rate cap	(823,214)		1,717,626				Interest rate cap	159,635		2,497,490		$	555,792	$	4,545,291
Total (loss) gain		$	(423,569)	$	7,500,314
Total gain (loss)								Total gain (loss)	$	4,531,912	$	(4,508,758)	$	2,760,059	$	(510,093)

NOTE 8 - RELATED PARTY TRANSACTIONS

Amounts and notes payable to related parties consist of the following:


		December 31, 2022		Activity	March 31, 2023			December 31, 2022		Activity	September 30, 2023
				(unaudited)						(unaudited)

Included in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets:	Included in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets:						Included in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets:
Affiliated companies (trade payables) (i)	Affiliated companies (trade payables) (i)	$	1,643,806	(277,088)	$	1,366,718	Affiliated companies (trade payables) (i)	$	1,643,806	(576,106)	$	1,067,700
Commissions payable (trade payables) (ii)	Commissions payable (trade payables) (ii)	$	—	57,896	$	57,896	Commissions payable (trade payables) (ii)	$	—	13,089	$	13,089

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

ii.Phoenix Bulk Carriers (Brasil) Intermediacoes Maritimas Ltda. - a wholly-owned Company of a member of the Board of Directors

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. During the three months ended ~~March 31,~~September 30, 2023 and 2022, the Company incurred technical management fees of approximately ~~$793,200~~$828,000 and ~~$781,800,~~$772,800, respectively, under this arrangement. During the nine months ended September 30, 2023 and 2022, the Company incurred technical management fees of approximately $2,394,990 and $2,370,000, respectively, under this arrangement.

~~The~~During the nine months ended September 30, 2023, the Company paid cash dividends of $5.0 million to a non-controlling interest holder of ~~NBHC during the three months ended March 31, 2023.~~NBHC. Additionally, a distribution of $2.5 million was made to a non-controlling interest holder of NBP LLC.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

~~Acquisition of Port and Terminal Operation~~

On March 24, 2023, the Company signed a Members Interest Purchase Agreement for the acquisition of marine port terminal operations. Under the terms of the agreement, Pangaea will acquire all onshore assets, licenses and business operations related to the sellers terminal operation for a total purchase price of $7.2 million.

Long-term Contracts Accounted for as Operating Leases

The Company leases office space for its Copenhagen operations. ~~Since~~The lease expires in December ~~31, 2018, this~~2025, at which time the lease continues on a month to month ~~basis. The~~basis with a non-cancelable period isof six months.

The Company leases office space for its Singapore operations. In ~~August 2021,~~July 2023, the Company renewed its lease for a two year period. At ~~March 31,~~September 30, 2023, the remaining lease term is ~~five~~twenty-three months.

For the three months ended ~~March 31,~~September 30, 2023 and 2022, the Company recognized approximately ~~$52,000~~$46,000 as lease expense for office leases in General and Administrative Expenses.

For the nine months ended September 30, 2023 and 2022, the Company recognized approximately $148,000 as lease expense for these office leases in General and Administrative Expenses.

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 10 - OTHER LONG-TERM LIABILITIES

In September 2019, the Company entered into an LLC agreement for the formation of 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 four new-build ice class post panamax vessels. The third party contributed additional funding which increased their ownership of NBP to 50% 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 to, pursuant to the call option, to purchase the third party's interest in NBP beginning anytime 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 as a Long term liabilities - Other. The Company took delivery of Nordic Nuluujaak, Nordic Qinngua, Nordic Sanngijuq and Nordic Siku in 2021. Earnings attributable to the third party’s interest in NBP are recorded in Income attributable to Non-controlling interest recorded as long-term liability.

The Company paid off the $7.5 million note payable in relation to the acquisition of an additional one-third equity interest in NBHC in September of 2022. NBHC continues to be a consolidated entity in the Company’s consolidated financial statements pursuant to ASC 810-10. The portion of NBHC not owned by the Company will continue to be recognized as non-controlling interest in the Company’s consolidated financial statements.

The roll-forward of Other Long-term Liabilities are as follows:


		03/31/2023		12/31/2022			09/30/2023		12/31/2022
		(unaudited)					(unaudited)
Beginning Balance	Beginning Balance	$	19,974,390	$	17,806,976	Beginning Balance	$	19,974,390	$	17,806,976
Payments to non-controlling interest recorded as long-term liability	Payments to non-controlling interest recorded as long-term liability	—		(2,050,000)		Payments to non-controlling interest recorded as long-term liability	(2,500,000)		(2,050,000)

(Loss) earnings attributable to non-controlling interest recorded as other long term liability		(144,736)		6,717,414
Earnings attributable to non-controlling interest recorded as other long term liability						Earnings attributable to non-controlling interest recorded as other long term liability	1,027,798		6,717,414
Reclassification of deferred consideration related to acquisition of non-controlling interest to other current liabilities	Reclassification of deferred consideration related to acquisition of non-controlling interest to other current liabilities	—		2,500,000		Reclassification of deferred consideration related to acquisition of non-controlling interest to other current liabilities	—		2,500,000
Payments on other long-term liability	Payments on other long-term liability	—		(5,000,000)		Payments on other long-term liability	—		(5,000,000)
Ending balance	Ending balance	$	19,829,654	$	19,974,390	Ending balance	$	18,502,188	$	19,974,390

NOTE 11 - NET INCOME PER COMMON SHARE

The computation of basic net income per share is based on the weighted average number of common shares outstanding for the three months ended ~~March 31,~~September 30, 2023 and 2022. Diluted net income per share gives effect to restricted stock awards.

The following table summarizes the calculation of basic and diluted income per share:


		Three Months Ended				Three Months Ended				Nine Months Ended
		March 31, 2023		March 31, 2022				September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
		(unaudited)						(unaudited)				(unaudited)
Net income	Net income	$	3,474,267	$	20,167,965		Net income	$	18,868,291	$	18,788,414	$	25,187,098	$	63,988,812
Weighted Average Shares - Basic	Weighted Average Shares - Basic	44,712,290		44,388,960			Weighted Average Shares - Basic	44,775,438		44,415,575		44,754,620		44,386,628
Dilutive effect of restricted stock awards	Dilutive effect of restricted stock awards	404,429		804,023			Dilutive effect of restricted stock awards	306,230		224,703		353,419		237,600
Weighted Average Shares - Diluted	Weighted Average Shares - Diluted	45,116,719		45,192,983			Weighted Average Shares - Diluted	45,081,668		44,640,278		45,108,039		44,624,228
Basic net income per share	Basic net income per share	$	0.08	$	0.45		Basic net income per share	$	0.42	$	0.42	$	0.56	$	1.44
Diluted net income per share	Diluted net income per share	$	0.08	$	0.45		Diluted net income per share	$	0.42	$	0.42	$	0.56	$	1.43

NOTE 12 - ACQUISITIONS

On March 24, 2023, the Company signed a Members Interest Purchase Agreement for the acquisition of marine port terminal operations for a purchase price of $7.2 million. On June 1, 2023, the Company completed the acquisition for a total purchase price of $9.3 million including acquired net working capital. Under the terms of the agreement, Pangaea acquired all onshore assets, licenses and business operations related to the sellers terminal operation.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:


Net working capital, excluding cash	$	1,772,889
Property, plant and equipment	1,844,100
Goodwill	3,104,800
Other intangible assets, net of accumulated amortization of $238,860 as of September 30, 2023	2,012,240
Fair value of net assets acquired, excluding cash and cash equivalents	8,734,029
Cash and cash equivalents	326,888
Fair value of net assets acquired	$	9,060,917

NOTE 1213 - SUBSEQUENT EVENTS

On October 6, 2023, the Company declared its purchase option on the m/v Bulk Trident lease for approximately $4.6 million. The transaction is expected to close on November 20, 2023. As a result, the remaining balance of the lease has been reclassified as a current portion of finance lease liabilities.

On October 17, 2023, the Company ~~signed~~entered into a memorandum of agreement ~~on April 21, 2023,~~to sell m/v Bulk Trident for ~~the purchase of a 61,000 dwt, 2014 built Ultramax dry bulk vessel, for a total cost of $26.6~~$9.8 million. The ~~Company~~vessel is expected to ~~take delivery of~~deliver to the ~~vessel~~buyer in ~~June~~December 2023.

On ~~May 9,~~October 20, 2023, the Company paid cash dividends of $4.0 million to a non-controlling interest holder of NBHC.

On November 7, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, to be paid on ~~June~~December 15, 2023, to all shareholders of record as of ~~June~~December 1, 2023.

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

The following discussion should be read in conjunction with our 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, 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 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.

Terminal & Stevedore Revenue. Terminal & Stevedore revenue is derived from inbound and outbound cargo handling services at ports which the Company operates in. Gross revenue is earned typically based on a per-unit rate for volumes handled.

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.

Terminal & Stevedore Expenses. Terminal & Stevedore expenses represent the cost to provide the Company's cargo handling services. Terminal & Stevedore expenses include direct labor and related costs, the cost of insurance, expenses relating to repairs and maintenance of shore based equipment, trucking, and other direct miscellaneous expenses.

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. 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.

2223

Selected Financial Information


(in thousands, except for shipping days data and per share data) (figures may not foot due to rounding)	(in thousands, except for shipping days data and per share data) (figures may not foot due to rounding)	For the three months ended March 31,				(in thousands, except for shipping days data and per share data) (figures may not foot due to rounding)	For the three months ended September 30,				For the nine months ended September 30,
		2023		2022					2023		2022		2023		2022
Selected Financial Data	Selected Financial Data	(unaudited)				Selected Financial Data	(unaudited)				(unaudited)
Voyage revenue	Voyage revenue	$	107,950	$	176,337			Voyage revenue	$	127,885	$	173,168	$	346,300	$	522,694
Charter revenue	Charter revenue	5,749		15,426				Charter revenue	3,798		11,309		16,637		49,090
Terminal & Stevedore Revenue								Terminal & Stevedore Revenue	3,934		—		4,454		—
Total revenue	Total revenue	113,699		191,762				Total revenue	135,616		184,477		367,391		571,783
Voyage expense	Voyage expense	56,815		65,250				Voyage expense	59,075		74,716		170,349		207,874
Charter hire expense	Charter hire expense	22,591		77,712				Charter hire expense	25,467		50,751		77,183		194,175
Vessel operating expenses	Vessel operating expenses	13,607		13,188				Vessel operating expenses	14,253		15,362		41,070		41,479
Terminal Expenses								Terminal Expenses	3,518		—		3,892		—
Total cost of transportation and service revenue	Total cost of transportation and service revenue	93,012		156,150				Total cost of transportation and service revenue	102,312		140,829		292,495		443,529
Vessel depreciation and amortization	Vessel depreciation and amortization	7,299		7,283				Vessel depreciation and amortization	8,063		7,347		22,462		21,905
Gross Profit	Gross Profit	13,387		28,329				Gross Profit	25,241		36,301		52,433		106,349
Other operating expenses	Other operating expenses	5,719		5,300				Other operating expenses	5,529		5,795		17,199		16,251
Loss on impairment of vessels	Loss on impairment of vessels	—		3,008				Loss on impairment of vessels	—		—		—		3,008
Loss on sale of vessel	Loss on sale of vessel	1,172		—				Loss on sale of vessel	—		—		1,172		318
Income from operations	Income from operations	6,496		20,022				Income from operations	19,711		30,506		34,062		86,773
Total other (expense) income, net		(3,093)		2,426
Total other income (expense), net								Total other income (expense), net	479		(10,745)		(7,702)		(17,077)
Net income	Net income	3,403		22,448				Net income	20,190		19,761		26,360		69,696
Loss (income) attributable to non-controlling interests		71		(2,280)
Income attributable to non-controlling interests								Income attributable to non-controlling interests	(1,322)		(973)		(1,173)		(5,707)
Net income attributable to Pangaea Logistics Solutions Ltd.	Net income attributable to Pangaea Logistics Solutions Ltd.	$	3,474	$	20,168			Net income attributable to Pangaea Logistics Solutions Ltd.	$	18,868	$	18,788	$	25,187	$	63,989

Net income from continuing operations per common share information	Net income from continuing operations per common share information							Net income from continuing operations per common share information
Basic net income per share	Basic net income per share	$	0.08	$	0.45			Basic net income per share	$	0.42	$	0.42	$	0.56	$	1.44
Diluted net income per share	Diluted net income per share	$	0.08	$	0.45			Diluted net income per share	$	0.42	$	0.42	$	0.56	$	1.43
Weighted-average common shares Outstanding - basic	Weighted-average common shares Outstanding - basic	44,712		44,389				Weighted-average common shares Outstanding - basic	44,775		44,416		44,755		44,387
Weighted-average common shares Outstanding - diluted	Weighted-average common shares Outstanding - diluted	45,117		45,193				Weighted-average common shares Outstanding - diluted	45,082		44,640		45,108		44,624

Adjusted EBITDA (1)	Adjusted EBITDA (1)	$	16,238	$	31,296			Adjusted EBITDA (1)	$	27,881	$	38,490	$	60,042	$	114,034

Shipping Days (2)	Shipping Days (2)							Shipping Days (2)
Voyage days	Voyage days	3,392		4,176				Voyage days	4,314		3,998		11,283		12,137
Time charter days	Time charter days	566		603				Time charter days	296		555		1,341		1,898
Total shipping days	Total shipping days	3,958		4,779				Total shipping days	4,610		4,553		12,624		14,035

TCE Rates ($/day)	TCE Rates ($/day)	$	14,372	$	26,472			TCE Rates ($/day)	$	15,748	24,107		$	15,256	$	25,929

2324


		March 31, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Selected Data from the Consolidated Balance Sheets	Selected Data from the Consolidated Balance Sheets	(unaudited)				Selected Data from the Consolidated Balance Sheets	(unaudited)
Cash and cash equivalents	Cash and cash equivalents	$	129,150	$	128,385	Cash and cash equivalents	$	87,358	$	128,385
Total assets	Total assets	$	730,228	$	748,241	Total assets	$	728,594	$	748,241
Total secured debt, including finance leases liabilities	Total secured debt, including finance leases liabilities	$	289,922	$	299,481	Total secured debt, including finance leases liabilities	$	275,564	$	299,481
Total shareholders' equity	Total shareholders' equity	$	363,192	$	368,722	Total shareholders' equity	$	377,378	$	368,722

		For the three months ended March 31,					For the nine months ended September 30,
		2023		2022			2023		2022
		(unaudited)					(unaudited)
Selected Data from the Consolidated Statements of Cash Flows	Selected Data from the Consolidated Statements of Cash Flows					Selected Data from the Consolidated Statements of Cash Flows
Net cash provided by operating activities	Net cash provided by operating activities	$	11,572	$	32,062	Net cash provided by operating activities	$	29,883	$	101,868
Net cash provided by (used in) investing activities		$	8,794	$	(18,247)
Net cash used in investing activities						Net cash used in investing activities	$	(25,017)	$	(11,512)
Net cash used in financing activities	Net cash used in financing activities	$	(19,601)	$	(102)	Net cash used in financing activities	$	(45,892)	$	(28,617)

(1)Adjusted EBITDA represents net income (or loss), determined in accordance with U.S. GAAP, excluding interest expense, interest income, income taxes, depreciation and amortization, loss on impairment, loss on sale and leaseback of vessels, share-based compensation, ~~and~~ other non-operating income and/or expense, and other non-recurring items, 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 reconciliation of gross profit to net transportation and service revenue and net income in accordance with U.S. GAAP to Adjusted EBITDA is as follows:


(in thousands, figures may not foot due to rounding)	(in thousands, figures may not foot due to rounding)	Three Months Ended March 31,				(in thousands, figures may not foot due to rounding)	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022					2023		2022		2023		2022
Net Transportation and Service Revenue (3)	Net Transportation and Service Revenue (3)	(unaudited)						Net Transportation and Service Revenue (3)	(unaudited)				(unaudited)
Gross Profit (4)	Gross Profit (4)	$	13,387	$	28,329			Gross Profit (4)	$	25,241	$	36,301	$	52,433	$	106,349
Add:	Add:							Add:
Vessel Depreciation and Amortization	Vessel Depreciation and Amortization	7,299		7,283				Vessel Depreciation and Amortization	8,063		7,347		22,462		21,905
Net transportation and service revenue	Net transportation and service revenue	$	20,687	$	35,612			Net transportation and service revenue	$	33,304	$	43,648	$	74,896	$	128,254

Adjusted EBITDA	Adjusted EBITDA							Adjusted EBITDA
Net Income	Net Income	$	3,403	$	22,448			Net Income	$	20,190	$	19,761	$	26,360	$	69,696
Interest expense, net	Interest expense, net	3,201		3,371				Interest expense, net	3,573		4,116		9,857		11,122
(Loss) income attributable to Non-controlling interest recorded as long-term liability interest expense		(145)		1,840
Earnings attributable to non-controlling interest recorded as other long term liability								Earnings attributable to non-controlling interest recorded as other long term liability	267		2,419		1,028		5,962
Depreciation and amortization	Depreciation and amortization	7,327		7,301				Depreciation and amortization	8,092		7,366		22,546		21,960
EBITDA	EBITDA	$	13,786	$	34,961			EBITDA	$	32,123	$	33,662	$	59,791	$	108,740
Non-GAAP Adjustments	Non-GAAP Adjustments							Non-GAAP Adjustments
Loss on impairment of vessels	Loss on impairment of vessels	—		3,008				Loss on impairment of vessels	—		—		—		3,008
Loss on sale of vessels	Loss on sale of vessels	1,172		—				Loss on sale of vessels	—		—		1,172		318
Share-based compensation	Share-based compensation	856		828				Share-based compensation	270		319		1,394		1,458
Unrealized loss (gain) on derivative instruments, net		424		(7,500)
Unrealized (gain) loss on derivative instruments, net								Unrealized (gain) loss on derivative instruments, net	(4,532)		4,509		(2,760)		510
Other non-recurring items								Other non-recurring items	$	19	$	—	$	445	$	—
Adjusted EBITDA	Adjusted EBITDA	$	16,238	$	31,296			Adjusted EBITDA	$	27,881	$	38,490	$	60,042	$	114,034

(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 and terminal & stevedore 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.

(4) Gross profit represents total revenue less cost of transportation and service revenue less vessel depreciation.

2526

Business Overview

The dry bulk transportation and logistics industry is known for its cyclicality and volatility, which can be attributed to fluctuations in vessel supply and demand for the transportation of dry bulk commodities. ~~Despite the dry bulk freight market reaching decade high levels in 2021 and maintaining strong performance in the first half of 2022, there was a decrease in freight demand~~Starting in the third quarter of 2022, ~~leading to~~there was a significant decline in freight demand, and this slowdown ~~that persisted~~continued through the first quarter of 2023, with signs of improvement in the second and third quarters of 2023. The Baltic Dry Index (“BDI”), a measure of dry bulk market performance, averaged ~~1,020~~1,305 for the ~~first~~third quarter of 2023, ~~down~~up approximately ~~47%~~7% from the prior quarter, and compared to an average of ~~1,939~~1,540 for the same quarter of 2022. The average published market rates for Supramax and Panamax vessels, reflecting the composition of the company's fleet, also decreased approximately ~~57%~~38%, from an average of ~~$22,637~~$17,115 in the ~~first~~third quarter of 2022 to ~~$9,702~~$10,548 in the same period of 2023. As a result of the industry's volatility, we have experienced fluctuations in our quarterly and annual operating results in the past, and we expect to continue experiencing such fluctuations in the future due to various factors, including cargo demand, vessel supply, competition, and seasonality.

Effect of Inflation

High inflation in the United States and in many of the global economies where the Company operates is beginning to impact vessel operating costs, including crew travel, transportation of equipment and spares, and drydocking costs. We expect crew payroll expenses to stabilize over the near and medium term, however other inflated cost changes may make our vessel daily operating costs higher. Increases in the cost of fuel consumed on voyages are usually absorbed by cargo market rates passed on to customers or covered by fuel cost pass through under the terms of long-term contracts. Because interest rates on a large portion of the Company’s long-term debt, and finance leases is fixed or capped, the impact of higher interest rates on the Company’s earnings is limited.

Quarterly TCE Performance

For the three months ended ~~March 31,~~September 30, 2023, the Company's TCE rates were down ~~46%~~35% to ~~$14,372~~$15,748 from ~~$26,472~~$24,107 for the three months ended ~~March 31,~~September 30, 2022. The Company's achieved TCE rates ~~declined~~improved from the previous quarter as the overall dry bulk market rates ~~declined~~improved for the three months ended ~~March 31,~~September 30, 2023. The Company's achieved TCE rate for the three months ended ~~March 31,~~September 30, 2023 outperformed the average of the Baltic panamax and supramax market indexes and exceeded the average market rates by approximately ~~48%~~49% due to its long-term contracts of affreightment, ("COAs"), its specialized fleet and its cargo-focused strategy.

~~1st~~3rd Quarter Highlights

•Net income attributable to Pangaea Logistics Solutions Ltd. was approximately ~~$3.5~~$18.9 million for three months ended ~~March 31,~~September 30, 2023 as compared to approximately ~~$20.2~~$18.8 million for the same period of 2022.

•Diluted net income per share was ~~$0.08~~$0.42 for three months ended ~~March 31,~~September 30, 2023, ~~as compared to $0.45~~and for the same period ofin 2022.

•Pangaea's TCE rates were ~~$14,372~~$15,748 for the three months ended ~~March 31,~~September 30, 2023 and ~~$26,472~~$24,107 for the three months ended ~~March 31,~~September 30, 2022.

•Adjusted EBITDA was ~~$16.2~~$27.9 million for the three months ended ~~March 31,~~September 30, 2023, as compared to ~~$31.3~~$38.5 million for the same period of 2022.

•At the end of the quarter, Pangaea had ~~$129.1~~$87.4 million in cash, and cash equivalents.

Three Months Ended ~~March 31,~~September 30, 2023 Compared to Three Months Ended ~~March 31,~~September 30, 2022

Revenues

Pangaea’s revenues are derived predominately from voyage, time charters, and ~~time charters.~~terminal and stevedore revenue. Total revenue for the three months ended ~~March 31,~~September 30, 2023 was ~~$113.7~~$135.6 million, compared to ~~$191.8~~$184.5 million for the same period in 2022, a ~~41%~~26% decrease. The decrease in revenues was primarily ~~due to~~driven by lower average TCE rates earned as discussed ~~above as well as a decrease in~~above. The total shipping ~~days. The total number of shipping~~ days ~~decreased 17%~~went up by 1% to ~~3,958~~4,610 in the three months ended ~~March 31,~~September 30, 2023, ~~compared~~in comparison to ~~4,779~~4,553 for the same period in 2022. However, this decrease was partially offset by an increase in terminal and stevedore revenue resulting from the company's acquisition of port and terminal operations in June 2023.

Components of revenue are as follows:

Voyage revenues decreased by ~~39%~~26% for the three months ended ~~March 31,~~September 30, 2023 to ~~$108.0~~$127.9 million compared to ~~$176.3~~$173.2 million for the same period in 2022. The decrease in voyage revenues was primarily due to lower average TCE rates earned, ~~and a lower~~however, the number of voyage days ~~which decreased 19%~~increased 8% to ~~3,392~~4,314 for the three months ended ~~March 31,~~September 30, 2023 compared to ~~4,176~~3,998 for the same period in 2022.

Charter revenues decreased to ~~$5.7~~$3.8 million from ~~$15.4~~$11.3 million, or ~~63%~~66%, for the three months ended ~~March 31,~~September 30, 2023 compared to the same period in 2022. The decrease in charter revenues was due to a decrease in time charter days which were down 6%47% to ~~566~~296 in the first quarter of 2023 from ~~603~~555 for the same quarter in 2022 and decreased charter hire rates earned. The optionality of our chartering strategy allows the Company to selectively release excess ship days, if any, into the market under time charter arrangements.

Terminal & Stevedore revenues increased to $3.9 million, for the three months ended September 30, 2023, as a result of the company's acquisition of port and terminal operations in June 2023.

Voyage Expenses

Voyage expenses were ~~$56.8~~$59.1 million for the three months ended ~~March 31,~~September 30, 2023, compared to ~~$65.3~~$74.7 million for the same period in 2022, a decrease of approximately ~~13%~~21%. The decrease was attributable to a decrease in bunker ~~consumption and~~costs partially offset by an increase port costs. ~~Total~~The total costs of bunkers consumed decreased by ~~6.6%~~36.8% for the three months ended ~~March 31,~~September 30, 2023 compared to the same period in ~~2022.~~2022 even though the number of voyage days increased. The reduction in bunker expenses was primarily ~~attributable~~a result of a decline in market price. Port expenses increased by 4% compared to the ~~decrease in voyage days offset by a higher market price for bunkers. Port expenses decreased by 19% compared to~~ prior year due to the ~~decrease~~increase in ~~voyage days.~~canal fees.

Charter Hire Expenses

Charter hire expenses for the three months ended ~~March 31,~~September 30, 2023 were ~~$22.6~~$25.5 million, compared to ~~$77.7~~$50.8 million for the same period in 2022, a ~~71%~~50% decrease. The decrease in charter hire expenses was primarily due to ana decrease in market rates to charter-in vessels. The average published market rates for Supramax and Panamax vessels decreased approximately ~~57%~~38% from an average of ~~$22,637~~$17,115 in the ~~first~~third quarter of 2022 to ~~$9,702~~$10,548 in the same period of 2023. Chartered-in days decreased ~~33%~~1% from ~~2,664~~2,391 days in the three months ended ~~March 31,~~September 30, 2022 to ~~1,778~~2,358 days for the three months ended ~~March 31,~~September 30, 2023. The Company's flexible charter-in strategy allows it to supplement its owned fleet with short term chartered-in tonnage at prevailing market prices, when needed, to meet cargo demand.

Vessel Operating Expenses

Vessel operating expenses for the three months ended ~~March 31,~~September 30, 2023 were ~~$13.6~~$14.3 million, compared to ~~$13.2~~$15.4 million for the same period in 2022, ~~an increase~~a decrease of approximately 3%7%. The ownership days for the three months ended ~~March 31,~~September 30, 2023 and 2022 were ~~2,222~~2,300 and ~~2,203,~~2,208, respectively, up 1%4%. Excluding technical management fees, vessel operating expenses on a per day basis were ~~$5,632~~$5,706 for the three months ended ~~March 31,~~September 30, 2023 and ~~$5,345~~$6,471 for the three months ended ~~March 31,~~September 30, 2022. Technical management fees were approximately $1.1 million for the three months ended September 30, 2023 and ~~$1.4~~2022. During the third quarter of 2022, there was a significant increase in vessel operating expenses. This was attributed to the Company's decision to change its technical manager, which was necessitated by the Ukraine conflict starting in February 2022.

Terminal & Stevedore Expenses

Terminal & Stevedore expenses increased to $3.5 million for the three months ended ~~March 31,~~September 30, 2023, as a result of the company's acquisition of port and ~~2022, respectively. The increase~~terminal operations in vessel operating expenses was mainly attributable to an increase in crew expenses due to an increase in crewing costs, crew changes and the ongoing war in Ukraine. The Company also continues to face general inflationary pressures particularly impacting the cost of lubes, stores and spares.June 2023.

General and Administrative Expenses

General and administrative expenses were ~~$5.7~~$5.5 million and ~~$5.3~~$5.8 million for the three months ended ~~March 31,~~September 30, 2023, and 2022, respectively. The ~~increase~~decrease was ~~driven by higher accounting fees and the timing of recognition of those fees~~mainly attributable to a reduction in ~~2023 compared to 2022, along with increased~~incentive compensation ~~costs.~~accruals. However, this decrease was partially offset by ~~a decrease~~an increase in ~~incentive compensation~~general and administrative costs ~~recognized~~resulting from the Company's acquisition of port and terminal operations in ~~the first quarter~~June of ~~2023 compared to the prior year.~~2023.

Unrealized gain (loss) on derivative instruments

The Company assesses risk associated with fluctuating future freight rates and bunker prices, and when appropriate, actively hedges identified economic risk that may impact the operating income of long-term cargo contracts and forward bookings with forward freight agreements and bunkers swaps. The utilization of such derivatives can lead to fluctuations in the Company's reported results from operations on a period-to-period basis as the Company marks these positions to market at the balance sheet date while settlement of the position and execution of the physical transaction may occur at a future date. The Company recognized a mark to market gain on bunker swaps of approximately ~~$0.2~~$3.4 million and on forward freight agreements (FFAs) of approximately ~~$0.2~~$0.9 million in the three months ended ~~March 31,~~September 30, 2023. The fair value ~~loss~~gain on interest rate derivative ~~amounted~~

2728

amounted to approximately ~~$0.8~~$0.2 million for the three months ended ~~March 31,~~September 30, 2023. These gains resulted from changes in the fair value of the derivatives at the respective balance sheet dates.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

Revenues

Pangaea’s revenues are derived predominately from voyage, time charters and terminal and stevedore revenue. Total revenue for the nine months ended September 30, 2023 was $367.4 million, compared to $571.8 million for the same period in 2022, a 36% decrease. The decrease in revenues was primarily due to lower average TCE rates and a 10% reduction in total shipping days, which amounted to 12,624 in the nine months ended September 30, 2023, compared to 14,035 for the same period in 2022.

Components of revenue are as follows:

Voyage revenues decreased by 34% for the nine months ended September 30, 2023 to $346.3 million compared to $522.7 million for the same period in 2022. The decrease in voyage revenues was primarily due to lower average TCE rates and a 7% decrease in the number of voyage days, which amounted to 11,283 for the nine months ended September 30, 2023, compared to 12,137 for the same period in 2022.

Charter revenues decreased to $16.6 million from $49.1 million, or 66%, for the nine months ended September 30, 2023 compared to the same period in 2022. The decrease in charter revenues was due to a decrease in time charter days, which were down 29% to 1,341 in the nine months ended September 30, 2023 from 1,898 in the nine months ended September 30, 2022 and a decline in prevailing market rates. The time charter revenue per day was $12,406 for the nine months ended September 30, 2023 compared to $25,864 for the same period of 2022. The optionality of our chartering strategy allows the Company to selectively release excess ship days, if any, into the market under time charter arrangements.

Terminal & Stevedore revenue increased to $4.5 million for the nine months ended September 30, 2023, as a result of the company's acquisition of port and terminal operations in June 2023.

Voyage Expenses

Voyage expenses were $170.3 million for the nine months ended September 30, 2023, compared to $207.9 million for the same period in 2022, a decrease of 18%. The decrease was mainly attributable to decreased bunker costs, port expenses and canal fees. Bunkers, port charges, and canal fees may fluctuate in line with the number of vessels employed on voyage charters. The number of voyage days decreased by 7% to 11,283 days in the nine months ended September 30, 2023 compared to 12,137 days for the same period in 2022. Total costs of bunkers consumed decreased by 28% for the nine months ended September 30, 2023 compared to the same period in 2022 due to decreasing market prices for bunkers. Port expenses decreased 4% compared to the prior year.

Charter Hire Expenses

Charter hire expenses for the nine months ended September 30, 2023 were $77.2 million, compared to $194.2 million for the same period in 2022, a 60% decrease. The decrease in charter hire expenses was primarily attributed to a substantial, 50% reduction, in market rates for charter-in vessels and a decrease in the number of chartered-in days from 7,556 days in the nine months ended September 30, 2022 to 6,050 days for the nine months ended September 30, 2023. The Company's flexible charter-in strategy allows it to supplement its owned fleet with short term chartered-in tonnage at prevailing market prices, when needed, to meet cargo demand.

Vessel Operating Expenses

Vessel operating expenses for the nine months ended September 30, 2023 were $41.1 million, compared to $41.5 million for the same period in 2022, a decrease of approximately 1%. The ownership days for the nine months ended September 30, 2023 and 2022 were 6,722 and 6,680, respectively. Excluding technical management fees, vessel operating expenses on a per day basis were $5,620 for the nine months ended September 30, 2023 and $5,667 for the same period in 2022. Technical management fees were approximately $3.3 million and $3.6 million for the nine months ended September 30, 2023 and 2022, respectively. The decrease in vessel operating expenses was primarily attributable to a decrease in technical management fees. During the first and second quarter of 2022, the Company changed its technical manager which was necessitated by the Ukraine conflict starting in February 2022.

Terminal & Stevedore Expenses

Terminal expenses increased to $3.9 million for the nine months ended September 30, 2023, as a result of the Company's acquisition of port and terminal operations in June 2023.

General and Administrative Expenses

General and administrative expenses were $17.1 million and $16.2 million for the nine months ended September 30, 2023 and 2022, respectively. The increase was primarily driven by an increase in general and administrative costs resulting from the acquisition of port and terminal operations in June of 2023 of which approximately $0.5 million are non-recurring acquisition costs. However this was partially offset by a decrease in incentive compensation cost recognized for the nine months ended September 30, 2023 compared to the same period of 2022.

Unrealized (loss) gain on derivative instruments

The Company assesses risk associated with fluctuating future freight rates and bunker prices, and when appropriate, actively hedges identified economic risk that may impact the operating income of long-term cargo contracts and forward bookings with forward freight agreements and bunkers swaps. The utilization of such derivatives can lead to fluctuations in the Company's reported results from operations on a period-to-period basis as the Company marks these positions to market at the balance sheet date while settlement of the position and execution of the physical transaction may occur at a future date. The Company recognized mark to market gain on bunker swaps of approximately $2.9 million and loss on forward freight agreements (FFAs) of approximately $0.7 million in the nine months ended September 30, 2023. The fair value gain on interest rate derivatives was approximately $0.6 million for the nine months ended September 30, 2023. These gains and losses resulted from changes in the fair value of the derivatives at the respective balance sheet dates.

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, the estimated on the percentage completion of spot voyages and the allowances for doubtful accounts.

Long-lived Assets Impairment Considerations

During the first quarter of 2023, the Company determined that a triggering event occurred related to the sale of a vessel, as the carrying value exceeded its fair value. On January 18, 2023, the Company signed a memorandum of agreement to sell the m/v Bulk Newport for $8.9 million in net consideration after brokerage commissions. As a result, we recorded a loss on sale of $1.2 million in the first quarter of 2023. The Company performed an impairment analysis on each asset group and concluded the estimated undiscounted future cash flows were higher than their carrying amounts and as such, no additional loss on impairment was recognized.

During the first quarter of 2022, the Company determined that a triggering event occurred related to the sale of a vessel, as the carrying value exceeded its fair value. On April 20, 2022, the Company signed a memorandum of agreement to sell the m/v Bulk Pangaea for $8.6 million in net consideration after brokerage commissions. As a result, we recorded an impairment charge of $3.0 million in the first quarter of 2022. The Company performed an impairment analysis on each asset group and concluded the estimated undiscounted future cash flows were higher than their carrying amounts and as such, no additional loss on impairment was recognized.

Liquidity and Capital Resources

The Company has historically financed its capital requirements with cash flow from operations, the issuance of common stock, proceeds from non-controlling interests, and proceeds from long-term debt and finance lease financing arrangements. The Company has used its capital primarily to fund operations, vessel acquisitions, and the repayment of debt and the associated interest expense. The Company may consider debt or additional equity financing alternatives from time to time. However, if market conditions deteriorate, the Company may be unable to raise additional debt or equity financing on acceptable terms or at all. As a result, the Company may be unable to pursue opportunities to expand its business.

~~At March 31,~~As of September 30, 2023 and December 31, 2022, the Company had working capital of ~~$132.6~~$83.2 million and $130.3 million, respectively. The reduction in working capital was mainly attributed to (i) $34.4 million of cash acquisitions, including the m/v Bulk Prudence and the port and terminal operation in June of 2023, (ii) $22.3 million reclassifications of long-term debt to current portion of long-term debt and (iii) partially offset by operating income generated during the nine months ended September 30, 2023.

Cash Flows:

The table below summarizes our primary sources and uses of cash for the three months ended ~~March 31,~~September 30, 2023 and 2022. We have derived these summarized statements of cash flows from the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.


	For the nine months ended
(In millions)	September 30, 2023		September 30, 2022
Net cash provided by/(used in):
Operating activities:
Net income adjusted for non-cash items	$	47.7	$	98.6
Changes in operating assets and liabilities, net	(17.8)		3.3
Operating activities	29.9		101.9
Investing activities	(25.0)		(11.5)
Financing activities	(45.9)		(28.6)
Net change	$	(41.0)	$	61.7

For the three months ended
(In millions) March 31, 2023 March 31, 2022
Net cash provided by/(used in):
Operating activities:
Net income adjusted for non-cash items $ 11.4 $ 27.1
Changes in operating assets and liabilities, net 0.2 4.9
Operating activities 11.6 32.1
Investing activities 8.8 (18.2)
Financing activities (19.6) (0.1)
Net change $ 0.8 $ 13.7

Operating Activities

Net cash provided by operating activities during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was ~~$11.6~~$29.9 million compared to net cash provided by operating activities of ~~$32.1~~$101.9 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022. The cash flows from operating activities decreased compared to the same period in the prior year primarily due to the decrease in income from operations, and timing of customer receipts and supplier payments.

Investing Activities

Net cash ~~provided by~~used in investing activities during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was ~~$8.8~~$25.0 million compared to net cash used in investing activities of ~~$18.2~~$11.5 million for the same period in 2022. ~~The~~During the nine months ended September 30, 2023, the Company ~~received~~(i) paid $27.2 million for the purchase of one vessel and other vessel improvements and (ii) paid $7.2 million for net, cash acquisition of a port and terminal operation. These uses of cash were partially offset by $8.0 million in net proceeds from the sale of one ~~vessel for net proceeds of $8.9 million during~~vessel. During the ~~three~~nine months ended ~~March 31, 2023. The~~September 30, 2022, the Company ~~purchased~~paid $18.4 million to purchase one vessel ~~for $18.3~~and other vessel improvements and paid $1.7 million ~~during~~as an advance on the ~~first quarter~~purchase of ~~2022.~~one vessel. This use of cash was partially offset by $8.4 million from the sale of one vessel.

Financing Activities

Net cash used in financing activities during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022 was ~~$19.6~~$45.9 million and ~~$0.1~~$28.6 million, respectively. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repaid ~~$5.8~~$12.4 million of ~~long term~~long-term debt and ~~$4.1~~$12.2 million of finance leases. The Company also paid ~~$4.6~~$13.6 million in cash dividends to its shareholders and $7.5 million in cash dividends to non-controlling interest holders. During the nine months ended September 30, 2022, the Company repaid $12.2 million of long term debt and $11.8 million of finance leases. The Company also paid $9.0 million in cash ~~dividends.~~dividends to its shareholders and $5.0 million in cash dividends to non-controlling interest holders. These uses of cash were partially offset by $15.0 million proceeds from finance leases.

The Company has demonstrated its unique ability to adapt to changing market conditions by maintaining a nimble chartered-in profile to meet its cargo commitments. 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 year, are sufficient to fund our operations for at least the next twelve months.

Capital Expenditures

The Company’s capital expenditures relate to the purchase of vessels and interests in vessels, ~~and to~~ capital improvements to its vessels which are expected to enhance the revenue earning capabilities and safety of these ~~vessels.~~vessels, as well as port & terminal operations. The Company’s owned or partially owned and controlled fleet at ~~March 31,~~September 30, 2023 includes: nine Panamax drybulk carriers (six of which are Ice-Class 1A); eight Supramax drybulk carriers, three Ultramax drybulk carriers (Two of which are Ice-Class IC), and four Post Panamax Ice Class 1A drybulk vessels.

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. 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 ~~$1.3~~$3.4 million and ~~$1.6~~$6.0 million in the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively. The Company expensed drydocking costs of approximately ~~$11,000 for each of~~$356,000 and $4,000, respectively, in the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet arrangements at ~~March 31,~~September 30, 2023 or December 31, 2022.

3032

ITEM 3. Quantitative and Qualitative Disclosures about Market Risks

No significant changes to our market risk have occurred since December 31, 2022. For a discussion of market risks affecting us, refer to Part II, Item 7A—"Quantitative and Qualitative Disclosures About Market Risk" included in the Company Annual Report on Form 10-K for the year ended December 31, 2022.

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 ~~three~~nine months ended ~~March 31,~~September 30, 2023.

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.

3133

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

In addition to the other information set forth in this report, the reader should carefully consider the factors discussed in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and the Risk Factor described below, which could materially affect the Company’s business, financial condition or future results.

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

None.

Item 3 - Defaults Upon Senior Securities

None.

Item 4 – Mine Safety Disclosures

None.

Item 5 - Other Information

None.

3234

Item 6 – Exhibits


Exhibit No.			Description


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

31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

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

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

EX-101.INS			XBRL Instance Document

EX-101.SCH			XBRL Taxonomy Extension Schema

EX-101.CAL			XBRL Taxonomy Extension Calculation Linkbase

EX-101.DEF			XBRL Taxonomy Extension Definition Linkbase

EX-101.LAB			XBRL Taxonomy Extension Label Linkbase

EX-101.PRE			XBRL Taxonomy Extension Presentation Linkbase

104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

______________

* Filed herewith

3335

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 ~~May 10,~~November 8, 2023.


			PANGAEA LOGISTICS SOLUTIONS LTD.

			By:			/s/ Mark L. Filanowski
			Mark L. Filanowski
			Chief Executive Officer
			(Principal Executive Officer)

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

3436


	March 31,		December 31,
	2023		2022
	(unaudited)
m/v NORDIC ODYSSEY (1)	$	20,251,200	$	20,685,092
m/v NORDIC ORION (1)	21,002,307		21,406,429
m/v NORDIC OSHIMA (1)	23,953,647		24,292,108
m/v NORDIC OLYMPIC (1)	24,297,475		24,627,857
m/v NORDIC ODIN (1)	24,397,484		24,726,033
m/v NORDIC OASIS (1)	25,888,026		26,232,723
m/v NORDIC NULUUJAAK (2) (4)	37,161,221		37,518,857
m/v NORDIC QINNGUA (2) (4)	37,075,867		37,428,322
m/v NORDIC SANNGIJUQ (2) (4)	36,655,924		37,000,230
m/v NORDIC SIKU(2) (4)	37,047,374		37,393,171
m/v BULK ENDURANCE	22,794,587		23,106,438
m/v BULK COURAGEOUS (4)	15,627,805		15,755,839
m/v BULK CONCORD (4)	19,136,437		19,394,966
m/v BULK NEWPORT	—		10,211,578
m/v BULK FREEDOM	8,513,607		7,464,118
m/v BULK PRIDE	11,929,790		12,174,942
m/v BULK SPIRIT (4)	11,732,489		11,703,170
m/v BULK SACHUEST	17,055,812		17,188,278
m/v BULK INDEPENDENCE	14,597,890		14,879,681
m/v BULK FRIENDSHIP (4)	13,463,111		13,680,578
m/v BULK VALOR	16,938,354		17,106,444
m/v BULK PROMISE	17,457,107		17,619,467

MISS NORA G PEARL (3)	2,156,372		2,268,086
	459,133,886		473,864,407
Other fixed assets, net	2,610,960		2,660,345
Total fixed assets, net	$	461,744,846	$	476,524,752

Right of Use Assets
m/v BULK XAYMACA	$	12,717,876	$	13,082,596
m/v BULK DESTINY	19,553,509		19,814,777
m/v BULK TRIDENT	10,714,378		11,024,196
	$	42,985,763	$	43,921,569