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 September 30, ~~2020~~2021


☐			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 001-33831

EAGLE BULK SHIPPING INC.

(Exact name of Registrant as specified in its charter)


Republic of the Marshall Islands						98-0453513
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

300 First Stamford Place, 5th floor

Stamford, Connecticut 06902

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (203) 276-8100

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, par value $0.01 per share	EGLE	The 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

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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

☐

☒

Number of shares of registrant’s common stock outstanding as of November 5, ~~2020: 11,014,313~~

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒~~No ☐~~2021: 13,590,961

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)

	Condensed Consolidated Balance Sheets as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020	F-1

	Condensed Consolidated Statements of Operations for the t ~~hree~~three and n ~~ine~~nine m ~~onths~~ e ~~nded~~months ended September 30, ~~2020~~2021 and ~~2019~~2020	F-2

	Condensed Consolidated Statements of Comprehensive income/(loss) for the three and nine months ended September 30, 2021 and 2020	F-3

	Condensed Consolidated Statements of ~~Comprehensive~~ l ~~oss~~Stockholders' Equity for the t ~~hree and~~ n ~~ine~~ mnine ~~onths~~ e ~~nded~~ months ended September 30, ~~2020~~2021 and ~~2019~~2020	F-4

	Condensed Consolidated Statements of ~~Stockholders' Equity~~Cash Flows for the t ~~hree and~~ n ~~ine~~nine months ended m ~~onths~~ e ~~nded~~ ~~September~~September 30, ~~2020~~2021 and ~~2019~~2020	F-5

	~~Condensed Consolidated Statements of Cash Flows for the~~ n ~~ine~~m ~~onths~~ e ~~nded~~ ~~September~~ ~~30, 2020 and 2019~~	F-76

	Notes to Condensed Consolidated Financial Statements	F-97

ITEM 2.	MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12

ITEM 4.	CONTROLS AND PROCEDURES	12

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	14
ITEM 1A.	RISK FACTORS	14
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	1514
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	1514
ITEM 4.	MINE SAFETY DISCLOSURES	1514
ITEM 5.	OTHER INFORMATION	1514
ITEM 6.	EXHIBITS	15
SIGNATURES		16

Effective as of September 15, 2020, the Company completed a 1-for-7 reverse stock split (the “Reverse Stock Split”) of the Company's issued and outstanding shares of common stock, par value $0.01 per share, as previously approved by our Board of Directors (the "Board of Directors") and our shareholders. Proportional adjustments were made to the Company’s issued and outstanding common stock and to the exercise price and the number of shares issuable upon exercise of all of the Company’s outstanding warrants, the exercise price and number of shares issuable upon exercise of the options outstanding under the Company’s equity incentive plans, and the number of shares subject to restricted stock awards under the Company’s equity incentive plans. Furthermore, the conversion rate set forth in the indenture governing the Company’s Convertible Bond Debt was adjusted to reflect the Reverse Stock Split. No fractional shares of common stock were issued in connection with the Reverse Stock Split. Furthermore, if a shareholder held less than seven shares prior to the Reverse Stock Split, then such shareholder received cash in lieu of the fractional share. All references to common stock and all per share data relating to periods prior to the Reverse Stock Split that are contained in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, ~~2020~~2021 (the "Quarterly Report on Form 10-Q") have been retrospectively adjusted to reflect the Reverse Stock Split unless explicitly stated otherwise.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as “believe,” “estimate,” “project,” “intend,” “expect,” “plan,” “anticipate,” and similar expressions in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements reflect management’s current expectations and observations with respect to future events and financial performance.

Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. The principal factors that affect our financial position, results of operations and cash flows include, charter market rates, which ~~have declined significantly~~could decline from historic highs, periods of charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S. dollars, depreciation expenses, which are a function of the cost of our vessels, significant vessel improvement costs and our vessels' estimated useful lives, and financing costs related to our indebtedness. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors which could include the following: (i) changes in demand in the drybulk market, including, without limitation, changes in production of, or demand for, commodities and bulk cargoes, generally or in particular regions; (ii) greater than anticipated levels of drybulk vessel newbuilding orders or lower than anticipated rates of drybulk vessel scrapping; (iii) changes in rules and regulations applicable to the drybulk industry, including, without limitation, legislation adopted by international bodies or organizations such as the International Maritime Organization and the European Union (the “EU”) or by individual countries; (iv) actions taken by regulatory authorities including without limitation the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”); (v) changes in trading patterns significantly impacting overall drybulk tonnage requirements; (vi) changes in the typical seasonal variations in drybulk charter rates; (vii) changes in the cost of other modes of bulk commodity transportation; (viii) changes in general domestic and international political conditions; (ix) changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated dry docking costs); (x) significant deterioration in charter hire rates from current levels or the inability of the Company to achieve its cost-cutting measures; (xi) the duration and impact of the novel coronavirus ("COVID-19") ~~pandemic;~~pandemic, including the availability and effectiveness of vaccines on a widespread basis and the impact of any mutations of the virus; (xii) the relative cost and availability of low and high sulfur fuel oil; (xiii) our ability to realize the economic benefits or recover the cost of the scrubbers we have installed; (xiv) any legal proceedings which we may be involved from time to time; and other factors listed from time to time in our filings with the Securities and Exchange Commission (the “SEC”). This discussion also includes statistical data regarding world drybulk fleet and order book and fleet age. We generated some of this data internally, and some were obtained from independent industry publications and reports that we believe to be reliable sources. We have not independently verified this data nor sought the consent of any organizations to refer to their reports in this Quarterly Report on Form 10-Q. We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

PART I: FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets ~~as of September 30, 2020 and December 31, 2019~~

~~(Unaudited)~~

(in U.S. dollars except share and per share data)


							September 30, 2021		December 31, 2020
		September 30, 2020		December 31, 2019			(Unaudited)
ASSETS:	ASSETS:					ASSETS:
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	83,408,816	$	53,583,898	Cash and cash equivalents	$	100,011,694	$	69,927,594
Restricted cash - current	Restricted cash - current	1,872,244		5,471,470		Restricted cash - current	25,557,674		18,846,177
Accounts receivable, net of a reserve of $2,325,589 and $2,472,345, respectively		12,998,480		19,982,871
Accounts receivable, net of a reserve of $2,169,958 and $2,357,191, respectively						Accounts receivable, net of a reserve of $2,169,958 and $2,357,191, respectively	24,243,815		13,843,480
Prepaid expenses	Prepaid expenses	2,724,668		4,631,416		Prepaid expenses	4,638,401		3,182,815
Inventories	Inventories	11,693,931		15,824,278		Inventories	17,091,901		11,624,833
Vessel held for sale		5,168,600		0
Derivative asset and other current assets		6,811,942		1,039,430
Collateral on derivatives						Collateral on derivatives	31,369,664		—
Other current assets						Other current assets	1,689,972		839,881
Total current assets	Total current assets	124,678,681		100,533,363		Total current assets	204,603,121		118,264,780
Noncurrent assets:	Noncurrent assets:					Noncurrent assets:
Vessels and vessel improvements, at cost, net of accumulated depreciation of $177,765,956 and $153,029,544, respectively		833,570,710		835,959,084
Vessels and vessel improvements, at cost, net of accumulated depreciation of $206,815,553 and $177,771,755, respectively						Vessels and vessel improvements, at cost, net of accumulated depreciation of $206,815,553 and $177,771,755, respectively	898,405,068		810,713,959
Advance for vessel purchase						Advance for vessel purchase	2,200,000		3,250,000
Operating lease right-of-use assets	Operating lease right-of-use assets	10,669,431		20,410,037		Operating lease right-of-use assets	22,845,697		7,540,871
Other fixed assets, net of accumulated depreciation of $1,067,000 and $832,541, respectively		549,855		740,654
Other fixed assets, net of accumulated depreciation of $1,346,243 and $1,137,562, respectively						Other fixed assets, net of accumulated depreciation of $1,346,243 and $1,137,562, respectively	309,625		489,179
Restricted cash - noncurrent	Restricted cash - noncurrent	0		74,917		Restricted cash - noncurrent	75,000		75,000
Deferred drydock costs, net	Deferred drydock costs, net	22,699,341		17,495,270		Deferred drydock costs, net	28,343,436		24,153,776
Deferred financing costs - Super Senior Facility		0		166,111
Advance for scrubbers, ballast water systems and other assets		2,860,736		26,707,700
Advances for ballast water systems and other assets						Advances for ballast water systems and other assets	5,875,314		2,639,491
Total noncurrent assets	Total noncurrent assets	870,350,073		901,553,773		Total noncurrent assets	958,054,140		848,862,276
Total assets	Total assets	$	995,028,754	$	1,002,087,136	Total assets	$	1,162,657,261	$	967,127,056
LIABILITIES & STOCKHOLDERS' EQUITY	LIABILITIES & STOCKHOLDERS' EQUITY					LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	13,312,496	$	13,483,397	Accounts payable	$	15,169,624	$	10,589,970
Accrued interest	Accrued interest	7,171,472		5,321,089		Accrued interest	7,075,532		4,690,135
Other accrued liabilities	Other accrued liabilities	8,549,199		28,996,836		Other accrued liabilities	14,660,495		11,747,064
Fair value of derivative instruments - current		4,090,188		756,229
Fair value of derivatives - current						Fair value of derivatives - current	24,381,090		481,791
Current portion of operating lease liabilities	Current portion of operating lease liabilities	10,848,313		13,255,978		Current portion of operating lease liabilities	21,094,309		7,615,371
Unearned charter hire revenue	Unearned charter hire revenue	5,989,235		4,692,259		Unearned charter hire revenue	17,045,647		8,072,295
Holdco Revolving Credit Facility, net of debt issuance costs						Holdco Revolving Credit Facility, net of debt issuance costs	23,821,677		—
Current portion of long-term debt	Current portion of long-term debt	39,244,297		35,709,394		Current portion of long-term debt	42,666,521		39,244,297
Total current liabilities	Total current liabilities	89,205,200		102,215,182		Total current liabilities	165,914,895		82,440,923
Noncurrent liabilities:	Noncurrent liabilities:					Noncurrent liabilities:
Norwegian Bond Debt, net of debt discount and debt issuance costs	Norwegian Bond Debt, net of debt discount and debt issuance costs	172,932,556		175,867,310		Norwegian Bond Debt, net of debt discount and debt issuance costs	166,351,589		169,290,230
Super Senior Facility, net of debt issuance costs	Super Senior Facility, net of debt issuance costs	14,882,677		0		Super Senior Facility, net of debt issuance costs	—		14,896,357
New Ultraco Debt Facility, net of debt issuance costs	New Ultraco Debt Facility, net of debt issuance costs	139,546,175		141,396,770		New Ultraco Debt Facility, net of debt issuance costs	121,182,097		132,083,949
Revolver loan under New Ultraco Debt Facility		35,000,000		0
Convertible Bond Debt, net of debt discount and debt issuance costs	Convertible Bond Debt, net of debt discount and debt issuance costs	95,660,779		92,803,144		Convertible Bond Debt, net of debt discount and debt issuance costs	99,813,315		96,660,485
Fair value of derivative instruments - non current		681,000		0
Operating lease liabilities		793,917		8,301,793
Fair value of derivatives - noncurrent						Fair value of derivatives - noncurrent	—		650,607
Noncurrent portion of operating lease liabilities						Noncurrent portion of operating lease liabilities	1,744,619		686,422
Total noncurrent liabilities	Total noncurrent liabilities	459,497,104		418,369,017		Total noncurrent liabilities	389,091,620		414,268,050
Total liabilities	Total liabilities	548,702,304		520,584,199		Total liabilities	555,006,515		496,708,973
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies	0		0
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Preferred stock, $.01 par value, 25,000,000 shares authorized, NaN issued as of September 30, 2020 and December 31, 2019		0		0
Common stock, $0.01 par value, 700,000,000 shares authorized, 10,279,698 and 10,214,600 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively *		102,797		102,146
Additional paid-in capital *		919,601,124		918,475,145
Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued as of September 30, 2021 and December 31, 2020						Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued as of September 30, 2021 and December 31, 2020	—		—
Common stock, $0.01 par value, 700,000,000 shares authorized, 12,863,998 and 11,661,797 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively						Common stock, $0.01 par value, 700,000,000 shares authorized, 12,863,998 and 11,661,797 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively	128,640		116,618
Additional paid-in capital						Additional paid-in capital	982,652,311		943,571,685
Accumulated deficit	Accumulated deficit	(472,252,726)		(437,074,354)		Accumulated deficit	(374,722,217)		(472,137,822)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,124,745)		0		Accumulated other comprehensive loss	(407,988)		(1,132,398)
Total stockholders' equity	Total stockholders' equity	446,326,450		481,502,937		Total stockholders' equity	607,650,746		470,418,083
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	995,028,754	$	1,002,087,136	Total liabilities and stockholders' equity	$	1,162,657,261	$	967,127,056

*~~Adjusted to give effect for the 1-for-7 Reverse Stock Split that became effective as of September 15, 2020, see Note 1.~~

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

F-1

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations ~~for the Three and Nine Months Ended September 30, 2020 and 2019~~

(Unaudited)

(in U.S. dollars except share and per share data)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019			September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Revenues, net	Revenues, net	$	68,182,301	$	74,110,376	$	199,952,404	$	220,891,288	Revenues, net	$	183,392,700	$	68,182,301	$	409,815,454	$	199,952,404

Voyage expenses	Voyage expenses	19,627,919		19,446,294		69,960,025		66,259,590		Voyage expenses	30,272,949		19,627,919		81,410,602		69,960,025
Vessel expenses		21,748,531		19,953,680		65,680,913		60,005,794
Vessel operating expenses										Vessel operating expenses	28,125,682		21,748,531		73,323,785		65,680,913
Charter hire expenses	Charter hire expenses	5,060,503		11,345,615		15,820,809		34,017,002		Charter hire expenses	10,723,737		5,060,503		25,373,501		15,820,809
Depreciation and amortization	Depreciation and amortization	12,617,803		10,055,938		37,587,477		29,224,368		Depreciation and amortization	13,570,361		12,617,803		39,187,344		37,587,477
General and administrative expenses	General and administrative expenses	7,995,715		8,450,831		22,724,190		24,901,561		General and administrative expenses	7,948,037		7,995,715		23,559,217		22,724,190
Other operating expense										Other operating expense	791,572		—		2,311,816		—
Operating lease impairment	Operating lease impairment	0		0		352,368		0		Operating lease impairment	—		—		—		352,368
Loss/(gain) on sale of vessels		389,207		(971,129)		389,207		(6,044,479)
(Gain)/loss on sale of vessel										(Gain)/loss on sale of vessel	(3,962,093)		389,207		(3,962,093)		389,207
Total operating expenses	Total operating expenses	67,439,678		68,281,229		212,514,989		208,363,836		Total operating expenses	87,470,245		67,439,678		241,204,172		212,514,989
Operating income/(loss)	Operating income/(loss)	742,623		5,829,147		(12,562,585)		12,527,452		Operating income/(loss)	95,922,455		742,623		168,611,282		(12,562,585)
Interest expense	Interest expense	8,954,200		8,117,293		26,883,094		21,612,451		Interest expense	8,511,117		8,954,200		25,561,676		26,883,094
Interest income	Interest income	(23,644)		(640,220)		(236,633)		(1,467,702)		Interest income	(19,533)		(23,644)		(52,831)		(236,633)
Loss on debt extinguishment	Loss on debt extinguishment	0		0		0		2,268,452		Loss on debt extinguishment	99,033		—		99,033		—
Realized and unrealized loss/(gain) on derivative instruments, net	Realized and unrealized loss/(gain) on derivative instruments, net	2,971,353		2,915,063		(4,030,674)		639,913		Realized and unrealized loss/(gain) on derivative instruments, net	8,990,568		2,971,353		45,587,799		(4,030,674)
Total other expense, net	Total other expense, net	11,901,909		10,392,136		22,615,787		23,053,114		Total other expense, net	17,581,185		11,901,909		71,195,677		22,615,787
Net loss		$	(11,159,286)	$	(4,562,989)	$	(35,178,372)	$	(10,525,662)
Net income/(loss)										Net income/(loss)	$	78,341,270	$	(11,159,286)	$	97,415,605	$	(35,178,372)

Weighted average shares outstanding*:
Weighted average shares outstanding:										Weighted average shares outstanding:
Basic	Basic	10,279,698		10,192,842		10,274,906		10,189,636		Basic	12,802,401		10,279,698		12,237,288		10,274,906
Diluted	Diluted	10,279,698		10,192,842		10,274,906		10,189,636		Diluted	15,936,374		10,279,698		15,354,481		10,274,906

Per share amounts*:
Basic net loss		$	(1.09)	$	(0.45)	$	(3.42)	$	(1.03)
Diluted net loss		$	(1.09)	$	(0.45)	$	(3.42)	$	(1.03)
Per share amounts										Per share amounts
Basic income/(loss)										Basic income/(loss)	$	6.12	$	(1.09)	$	7.96	$	(3.42)
Diluted income/(loss)										Diluted income/(loss)	$	4.92	$	(1.09)	$	6.34	$	(3.42)

*~~Adjusted to give effect for the 1-for-7 Reverse Stock Split that became effective as of September 15, 2020, see Note 1.~~

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

F-2

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive ~~loss~~

~~For the Three and Nine Months Ended September 30, 2020 and 2019~~income/(loss)

(Unaudited)

Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Net loss $ (11,159,286) $ (4,562,989) $ (35,178,372) $ (10,525,662)
Other comprehensive loss
Net unrealized loss on cash flow hedges (203,590) 0 (1,124,745) 0
Comprehensive loss $ (11,362,876) $ (4,562,989) $ (36,303,117) $ (10,525,662)


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Net income/(loss)	$	78,341,270	$	(11,159,286)	$	97,415,605	$	(35,178,372)

Other comprehensive income/(loss):
Net unrealized gain/(loss) on cash flow hedges	80,206		(203,590)		724,410		(1,124,745)

Comprehensive income/(loss)	$	78,421,476	$	(11,362,876)	$	98,140,015	$	(36,303,117)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

F-3

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders' Equity

~~For the Three and Nine Months Ended September 30, 2020 and 2019~~

(Unaudited)

(in U.S. dollars except share and per share data)

Common
Stock* Common
Stock
Amount* Additional
Paid-in
Capital* Accumulated Deficit Accumulated other comprehensive loss Total Stockholders’
Equity
Balance at December 31, 2019 10,214,600 $ 102,146 $ 918,475,145 $ (437,074,354) $ 0 $ 481,502,937
Net loss — — (3,527,759) — (3,527,759)
Issuance of shares due to vesting of restricted shares 62,526 625 (625) — — —
Unrealized loss on cash flow hedges — — — — (271,868) (271,868)
Cash used to settle net share equity awards — — (1,161,301) — — (1,161,301)
Stock-based compensation — — 836,200 — — 836,200
Balance at March 31, 2020 10,277,126 $ 102,771 $ 918,149,419 $ (440,602,113) $ (271,868) $ 477,378,209
Net loss — — — (20,491,327) — (20,491,327)
Issuance of shares due to vesting of restricted shares 2,572 26 (26) — — —
Unrealized loss on cash flow hedges — — — — (649,287) (649,287)
Stock-based compensation — — 723,223 — — 723,223
Balance at June 30, 2020 10,279,698 $ 102,797 $ 918,872,616 $ (461,093,440) $ (921,155) $ 456,960,818
Net loss — — — (11,159,286) — (11,159,286)
Cash used to settle fractional shares in the Reverse Stock Split — — (12,513) — — (12,513)
Unrealized loss on cash flow hedges — — — — (203,590) (203,590)
Stock-based compensation — — 741,021 — — 741,021
Balance at September 30, 2020 10,279,698 $ 102,797 $ 919,601,124 $ (472,252,726) $ (1,124,745) $ 446,326,450


	Common Stock	Common Stock Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated other comprehensive loss		Total Stockholders’ Equity
Balance at December 31, 2020	11,661,797	$	116,618	$	943,571,685	$	(472,137,822)	$	(1,132,398)	$	470,418,083
Net income		—		—		9,849,310		—		9,849,310
Issuance of shares due to vesting of restricted shares	71,146	711		(711)		—		—		—
Unrealized gain on cash flow hedges	—	—		—		—		599,884		599,884
Fees for equity offerings	—	—		(31,830)		—		—		(31,830)
Cash used to settle net share equity awards	—	—		(811,456)		—		—		(811,456)
Stock-based compensation	—	—		871,943		—		—		871,943
Balance at March 31, 2021	11,732,943	$	117,329	$	943,599,631	$	(462,288,512)	$	(532,514)	$	480,895,934
Net income	—	—		—		9,225,025		—		9,225,025
Issuance of shares due to vesting of restricted shares	2,773	27		(27)		—		—		—
Issuance of shares upon conversion of warrants (1)	432,037	4,322		8,370,976		—		—		8,375,298
Issuance of shares from ATM Offering, net of commissions and issuance costs	581,385	5,814		27,278,103		—		—		27,283,917
Issuance of shares upon exercise of stock options	4,117	41		22,183		—		—		22,224
Unrealized gain on cash flow hedges	—	—		—		—		44,320		44,320
Cash used to settle net share equity awards	—	—		(174,230)		—		—		(174,230)
Stock-based compensation	—	—		585,868		—		—		585,868
Balance at June 30, 2021	12,753,255	$	127,533	$	979,682,504	$	(453,063,487)	$	(488,194)	$	526,258,356
Net income	—	—		—		78,341,270		—		78,341,270
Issuance of shares upon conversion of Convertible Bond Debt	25	—		982		—		—		982
Issuance of shares upon conversion of warrants (1)	109,861	1,099		2,303,591		—		—		2,304,690
Issuance of shares upon exercise of stock options	857	8		33,346		—		—		33,354
Unrealized gain on cash flow hedges	—	—		—		—		80,206		80,206
Issuance costs for ATM Offering	—	—		(145,580)						(145,580)
Stock-based compensation	—	—		777,468		—		—		777,468
Balance at September 30, 2021	12,863,998	$	128,640	$	982,652,311	$	(374,722,217)	$	(407,988)	$	607,650,746

*(1)~~Adjusted to give effect for the 1-for-7 Reverse Stock Split that became effective as of September 15, 2020,~~ Please see Note 1.3 Vessels for additional information.

F-4


		Common Stock*	Common Stock Amount*		Additional Paid-in Capital*		Accumulated Deficit		Total Stockholders’ Equity			Common Stock*	Common Stock Amount*		Additional Paid-in Capital*		Accumulated Deficit		Accumulated other comprehensive loss		Total Stockholders’ Equity
Balance at December 31, 2018		10,150,771	$	101,508	$	894,881,580	$	(415,377,239)	$	479,605,849
Net income		—	—		—		29,483		29,483
Balance at December 31, 2019											Balance at December 31, 2019	10,214,600	$	102,146	$	918,475,145	$	(437,074,354)	$	—	$	481,502,937
Net loss											Net loss	—	—		—		(3,527,759)		—		(3,527,759)
Issuance of shares due to vesting of restricted shares	Issuance of shares due to vesting of restricted shares	41,859	419		(419)		—		—		Issuance of shares due to vesting of restricted shares	62,526	626		(626)		—		—		—
Unrealized loss on cash flow hedges											Unrealized loss on cash flow hedges	—	—		—		—		(271,868)		(271,868)
Cash used to settle net share equity awards	Cash used to settle net share equity awards	—	—		(877,161)		—		(877,161)		Cash used to settle net share equity awards	—	—		(1,161,301)		—		—		(1,161,301)
Stock-based compensation	Stock-based compensation	—	—		1,445,469		—		1,445,469		Stock-based compensation	—	—		836,200		—		—		836,200
Balance at March 31, 2019		10,192,630	$	101,927	$	895,449,469	$	(415,347,756)	$	480,203,640
Balance at March 31, 2020											Balance at March 31, 2020	10,277,126	$	102,772	$	918,149,418	$	(440,602,113)	$	(271,868)	$	477,378,209
Net loss	Net loss	—	—		—		(5,992,156)		(5,992,156)		Net loss	—	—		—		(20,491,327)		—		(20,491,327)
Issuance of shares due to vesting of restricted shares	Issuance of shares due to vesting of restricted shares	16	0		0		—		—		Issuance of shares due to vesting of restricted shares	2,572	26		(26)		—		—		—
Cash used to settle net share equity awards		—	—		(536)		—		(536)
Unrealized loss on cash flow hedges											Unrealized loss on cash flow hedges	—	—		—		—		(649,287)		(649,287)
Stock-based compensation	Stock-based compensation	—	—		1,227,210		—		1,227,210		Stock-based compensation	—	—		723,223		—		—		723,223
Balance at June 30, 2019		10,192,646	$	101,927	$	896,676,143	$	(421,339,912)	$	475,438,158
Net income		—	—		—		(4,562,989)		$	(4,562,989)
Proceeds received as per the Share Lending Agreement		—	—		35,829		—		35,829
Issuance of shares due to vesting of restricted shares and exercise of options		18,022	180		(180)		—		0
Equity component of Convertible Bond Debt, net of equity issuance costs		—	—		20,181,907		—		20,181,907
Cash used to settle net share equity awards		—	—		(471,236)		—		(471,236)
Balance at June 30, 2020											Balance at June 30, 2020	10,279,698	$	102,798	$	918,872,615	$	(461,093,440)	$	(921,155)	$	456,960,818
Net loss											Net loss	—	—		—		(11,159,286)		—		(11,159,286)
Cash used to settle fractional shares in the Reverse Stock Split											Cash used to settle fractional shares in the Reverse Stock Split	—	—		(12,513)		—		—		(12,513)
Unrealized loss on cash flow hedges											Unrealized loss on cash flow hedges	—	—		—		—		(203,590)		(203,590)
Stock-based compensation	Stock-based compensation	—	—		1,155,223		—		1,155,223		Stock-based compensation	—	—		741,021		—		—		741,021
Balance at September 30, 2019		10,210,668	$	102,107	$	917,577,686	$	(425,902,901)	$	491,776,892
Balance at September 30, 2020											Balance at September 30, 2020	10,279,698	$	102,798	$	919,601,123	$	(472,252,726)	$	(1,124,745)	$	446,326,450

*Adjusted to give effect for the 1-for-7 ~~Reverse Stock Split~~reverse stock split that became effective as of September 15, ~~2020, see Note 1.~~2020.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

F-5

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows ~~for the Nine Months Ended September 30, 2020 and 2019~~

(Unaudited)

Nine Months Ended
September 30, 2020 September 30, 2019
Cash flows from operating activities:
Net loss $ (35,178,372) $ (10,525,662)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Depreciation 32,085,266 24,845,206
Amortization of operating lease right-of-use assets 9,388,238 9,480,487
Amortization of deferred drydocking costs 5,502,211 4,379,162
Amortization of debt discount and debt issuance costs 4,654,871 2,265,374
Loss on debt extinguishment 0 2,268,452
Loss/(gain) on sale of vessels 389,207 (6,044,479)
Operating lease impairment 352,368 0
Net unrealized loss on fair value of derivatives 2,677,003 138,354
Stock-based compensation expense 2,300,444 3,827,902
Drydocking expenditures (10,830,172) (6,062,439)
Changes in operating assets and liabilities:
Accounts payable (4,135,537) (1,799,292)
Accounts receivable 2,956,653 1,889,818
Accrued interest 1,850,383 5,927,043
Inventories 4,130,347 1,853,870
Operating lease liabilities current and non-current (9,915,541) (10,024,158)
Derivative asset, other current and non-current assets (5,905,400) (1,010,905)
Other accrued liabilities (5,872,683) 144,279
Prepaid expenses 1,906,748 1,171,960
Unearned charter hire revenue 1,296,976 (3,770,762)
Net cash (used in)/provided by operating activities (2,346,990) 18,954,210
Cash flows from investing activities:
Purchase of vessels and vessel improvements (605,660) (81,365,090)
Advance paid for purchase of vessels, scrubbers and ballast water systems (25,224,068) (50,537,160)
Proceeds from hull and machinery insurance claims 3,749,779 2,112,426
Proceeds from sale of vessels 4,594,081 29,626,659
Purchase of other fixed assets (43,659) (228,122)
Net cash used in investing activities (17,529,527) (100,391,287)
Cash flows from financing activities:
Repayment of revolver loan under New First Lien Facility 0 (5,000,000)
Proceeds from the revolver loan under New First Lien Facility 0 5,000,000
Repayment of Original Ultraco Debt Facility 0 (82,600,000)
Proceeds from New Ultraco Debt Facility 22,550,000 153,440,000
Proceeds from Convertible Bond Debt, net of debt discount 0 112,482,586
Proceeds from Share Lending Agreement 0 35,829
Repayment of Norwegian Bond Debt (4,000,000) (4,000,000)
Repayment of term loan under New Ultraco Debt Facility (20,923,319) (10,097,342)
Proceeds from revolver facility under New Ultraco Debt Facility 55,000,000 0

~~F-6~~


Proceeds from Super Senior Facility		15,000,000		0
							Nine Months Ended
							September 30, 2021		September 30, 2020
Cash flows from operating activities:						Cash flows from operating activities:
Net income/(loss)						Net income/(loss)	$	97,415,605	$	(35,178,372)
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:						Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Depreciation						Depreciation	32,951,082		32,085,266
Amortization of operating lease right-of-use assets						Amortization of operating lease right-of-use assets	10,535,980		9,388,238
Amortization of deferred drydocking costs						Amortization of deferred drydocking costs	6,236,262		5,502,211
Amortization of debt discount and debt issuance costs						Amortization of debt discount and debt issuance costs	5,442,978		4,654,871
Loss on debt extinguishment						Loss on debt extinguishment	99,033		—
(Gain)/loss on sale of vessel						(Gain)/loss on sale of vessel	(3,962,093)		389,207
Operating lease impairment						Operating lease impairment	—		352,368
Net unrealized loss on fair value of derivatives						Net unrealized loss on fair value of derivatives	24,193,472		2,677,003
Stock-based compensation expense						Stock-based compensation expense	2,235,279		2,300,444
Drydocking expenditures						Drydocking expenditures	(10,736,908)		(10,830,172)
Changes in operating assets and liabilities:						Changes in operating assets and liabilities:
Accounts payable						Accounts payable	4,638,944		(4,135,537)
Accounts receivable						Accounts receivable	(10,645,335)		2,956,653
Accrued interest						Accrued interest	2,385,397		1,850,383
Inventories						Inventories	(5,467,068)		4,130,347
Operating lease liabilities current and noncurrent						Operating lease liabilities current and noncurrent	(11,303,671)		(9,915,541)
Collateral on derivatives						Collateral on derivatives	(31,369,664)		—
Fair value of derivatives, other current and noncurrent assets						Fair value of derivatives, other current and noncurrent assets	(1,149,973)		(5,905,400)
Other accrued liabilities						Other accrued liabilities	1,897,863		(5,872,683)
Prepaid expenses						Prepaid expenses	(1,455,586)		1,906,748
Unearned charter hire revenue						Unearned charter hire revenue	8,973,352		1,296,976
Net cash provided by/(used in) operating activities						Net cash provided by/(used in) operating activities	120,914,949		(2,346,990)

Cash flows from investing activities:						Cash flows from investing activities:
Purchase of vessels and vessel improvements						Purchase of vessels and vessel improvements	(109,384,938)		(605,660)
Advance for vessel purchase						Advance for vessel purchase	(2,200,000)		—
Purchase of scrubbers and ballast water systems						Purchase of scrubbers and ballast water systems	(4,557,463)		(25,224,068)
Proceeds from hull and machinery insurance claims						Proceeds from hull and machinery insurance claims	245,000		3,749,779
Proceeds from sale of vessel						Proceeds from sale of vessel	9,159,077		4,594,081
Purchase of other fixed assets						Purchase of other fixed assets	(29,127)		(43,659)
Net cash used in investing activities						Net cash used in investing activities	(106,767,451)		(17,529,527)

Cash flows from financing activities:						Cash flows from financing activities:
Proceeds from New Ultraco Debt Facility						Proceeds from New Ultraco Debt Facility	16,500,000		22,550,000
Repayment of Norwegian Bond Debt						Repayment of Norwegian Bond Debt	(4,000,000)		(4,000,000)
Repayment of term loan under New Ultraco Debt Facility						Repayment of term loan under New Ultraco Debt Facility	(24,258,223)		(20,923,319)
Repayment of revolver loan under New Ultraco Debt Facility	Repayment of revolver loan under New Ultraco Debt Facility	(20,000,000)		0		Repayment of revolver loan under New Ultraco Debt Facility	(55,000,000)		(20,000,000)
Repayment of New First Lien Facility - term loan		0		(60,000,000)
Repayment of revolver loan under Super Senior Facility						Repayment of revolver loan under Super Senior Facility	(15,000,000)		—
Proceeds from revolver loan under New Ultraco Debt Facility						Proceeds from revolver loan under New Ultraco Debt Facility	55,000,000		55,000,000
Proceeds from revolver loan under Super Senior Facility						Proceeds from revolver loan under Super Senior Facility	—		15,000,000
Proceeds from Holdco Revolving Credit Facility						Proceeds from Holdco Revolving Credit Facility	24,000,000		—
Proceeds from issuance of shares under ATM Offering, net of commissions						Proceeds from issuance of shares under ATM Offering, net of commissions	27,242,417		—
Cash received from exercise of stock options						Cash received from exercise of stock options	55,578		—
Cash used to settle net share equity awards						Cash used to settle net share equity awards	(985,686)		(1,161,301)
Equity offerings issuance costs						Equity offerings issuance costs	(291,830)		—
Debt issuance costs paid to lenders on New Ultraco Debt Facility	Debt issuance costs paid to lenders on New Ultraco Debt Facility	(381,471)		(3,156,250)		Debt issuance costs paid to lenders on New Ultraco Debt Facility	(328,241)		(381,471)
Cash used to settle net share equity awards		(1,161,301)		(877,697)
Cash used to settle fractional shares in the Reverse Stock Split		(12,513)		0
Debt issuance costs paid to lenders of Holdco Revolving Credit Facility						Debt issuance costs paid to lenders of Holdco Revolving Credit Facility	(285,893)		—
Cash used to settle fractional shares						Cash used to settle fractional shares	—		(12,513)
Cash paid to bondholder upon conversion of Convertible Bond Debt						Cash paid to bondholder upon conversion of Convertible Bond Debt	(23)		—
Other financing costs	Other financing costs	(44,104)		(830,237)		Other financing costs	—		(44,104)
Net cash provided by financing activities	Net cash provided by financing activities	46,027,292		104,396,889		Net cash provided by financing activities	22,648,099		46,027,292
Net increase in cash, cash equivalents and Restricted cash		26,150,775		22,959,812
Cash, cash equivalents and Restricted cash at beginning of period		59,130,285		78,163,638
Cash, cash equivalents and Restricted cash at end of period		$	85,281,060	$	101,123,450
Net increase in cash, cash equivalents and restricted cash						Net increase in cash, cash equivalents and restricted cash	36,795,597		26,150,775
Cash, cash equivalents and restricted cash at beginning of period						Cash, cash equivalents and restricted cash at beginning of period	88,848,771		59,130,285
Cash, cash equivalents and restricted cash at end of period						Cash, cash equivalents and restricted cash at end of period	$	125,644,368	$	85,281,060
SUPPLEMENTAL CASH FLOW INFORMATION	SUPPLEMENTAL CASH FLOW INFORMATION					SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest	Cash paid during the period for interest	$	20,377,697	$	13,106,139	Cash paid during the period for interest	$	17,462,440	$	20,377,697
Accruals for vessel purchases and vessel improvements included in Other accrued liabilities						Accruals for vessel purchases and vessel improvements included in Other accrued liabilities	$	499,578	$	—
Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities	Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities	$	5,915,948	$	8,867,952	Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities	$	3,258,545	$	5,915,948
Accruals for debt issuance costs included in Other accrued liabilities		$	200,000	$	418,224
Accrual for liability relating to taxes on net share equity awards included in Other accrued liabilities		$	0	$	471,236
Accrual for issuance costs for ATM Offering included in Other accrued liabilities						Accrual for issuance costs for ATM Offering included in Other accrued liabilities	$	104,080	$	—
Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities						Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities	$	508,768	$	200,000

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

~~F-7~~F-6

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Basis of Presentation and General Information

The accompanying condensed consolidated financial statements include the accounts of Eagle Bulk Shipping Inc. and its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our” or similar terms). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership, charter and operation of drybulk vessels. The Company’s fleet is comprised of Supramax and Ultramax drybulk carriers and the Company operates its business in 1 business segment.

As of September 30, ~~2020,~~2021, the Company owned and operated a modern fleet of 4952 oceangoing vessels, including 2927 Supramax and 2025 Ultramax vessels with a combined carrying capacity of ~~2,893,767~~3,128,107 deadweight tonnage ("dwt") and an average age of approximately ~~9.3~~9.1 years. Additionally, the Company charters-in 34 Ultramax vessels on a long term basis with remaining lease term of approximately one year each and also charters-in vessels on a short term basis for a period less than one year.

For the three and nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the Company’s charterers did not individually account for more than 10% of the Company’s gross charter revenue during those periods.

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and the rules and regulations of the SEC that apply to interim financial statements and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes normally included in consolidated financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s ~~2019~~2020 Annual Report on Form 10-K, filed with the SEC on March 12, ~~2020.~~2021.

The accompanying condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of its condensed consolidated financial position and results of operations for the interim periods presented.

The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the entire year.

~~Effective as of September 15, 2020,~~In March 2021, the Company ~~completed~~entered into an at market issuance sales agreement with B. Riley Securities, Inc., BTIG, LLC and Fearnley Securities, Inc., as sales agents (each, a ~~1-for-7 reverse stock split (the “Reverse Stock Split”) of~~“Sales Agent” and collectively, the ~~Company's issued and outstanding~~“Sales Agents”), to sell shares of common stock, par value $0.01 per share, as previously approved by our Board of Directors ( the "Board of Directors") and our shareholders. Proportional adjustments were made to the Company’s issued and outstanding common stock and to the exercise price and the number of shares issuable upon exercise of all of the ~~Company’s outstanding warrants,~~Company with aggregate gross sales proceeds of up to $50.0 million, from time to time through an “at-the-market” offering program (the “ATM Offering”). During the ~~exercise~~second quarter of 2021, the Company sold and issued an aggregate of 581,385 shares at a weighted-average sales price ~~and number~~ of ~~shares issuable upon exercise of the options outstanding~~$47.97 per share under the ~~Company’s equity incentive plans,~~ATM Offering for aggregate net proceeds of $27.2 million after deducting sales agent commissions and ~~the number~~other offering costs. The proceeds were used for partial financing of shares subject to restricted stock awards under the Company’s equity incentive plans. Furthermore, the conversion rate set forth in the indenture governing the Company’s Convertible Bond Debt was adjusted to reflect the Reverse Stock Split. No fractional shares of common stock were issued in connection with the Reverse Stock Split. Furthermore, if a shareholder held less than seven shares prior to the Reverse Stock Split, then such shareholder received cash in lieu of the fractional share. All references herein to common stockvessel acquisitions and ~~per share data for all periods presented in these condensed consolidated financial statements and notes thereto, have been retrospectively adjusted to reflect the Reverse Stock Split.~~

On March 11, 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a pandemic. In response to the pandemic, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the pandemic, such as quarantines and travel restrictions. Such measures have caused and will likely continue to cause severe trade disruptions. The extent to which COVID-19 will impact the Company's results of operations and financial condition, including possible vessel impairments, will depend on future developments including new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time.

As of January 1, 2020, we adopted ASU No. 2016-13, "Financial Instruments—Credit Losses" ("ASU 2016-13"). ASU 2016-13 amended 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 condensed consolidated financial statements.

~~F-8~~

other corporate purposes.

The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed 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 residual value of vessels, the useful lives of vessels, the value of stock-based compensation, estimated losses on our trade receivables, fair value of Convertible Bond Debt (as defined below) and its equity component, fair value of operating lease right-of-use assets and operating lease liabilities and the fair value of derivatives. Actual results could differ from those estimates.

Note 2. Recent Accounting Pronouncements

Leases

On January 1, 2019, the Company adopted Accounting Standards Update 2016-02, "Leases", ("ASC 842"). ASC 842 revises the accounting for leases. Under the new lease standard, lessees are required to recognize an operating lease right-of-use assets and a lease liabilities for substantially all leases. The new lease standard will continue to classify leases as either financing or operating, with classification affecting the pattern of expense recognition. The accounting applied by a lessor under the new guidance will be substantially equivalent to current lease accounting guidance.

The following are the type of contracts that fall under ASC 842:

F-7

Time ~~charter out~~charter-out contracts

In a time charter contract, the vessel is hired by the charterer for a specified period of time in exchange for consideration which is based on a daily hire rate. The charterer has the full discretion over the ports visited, shipping routes and vessel speed. The contract/charter party generally provides typical warranties regarding the speed and performance of the vessel. The charter party generally has some owner protective restrictions such that the vessel is sent only to safe ports by the charterer, subject always to compliance with applicable sanction laws, and carry only lawful or non-hazardous cargo. In a time charter contract, the Company is responsible for all the costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubes. The charterer bears the voyage related costs such as bunker expenses, port charges and canal tolls during the hire period. The performance obligations in a time charter contract are satisfied over the term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to the Company. The charterer generally pays the charter hire in advance of the upcoming contract period. 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.

The transition guidance associated with ASC 842 allows for certain practical expedients to the lessors. The Company elected not to separate the lease and non-lease components included in the time charter revenue because the pattern of revenue recognition for the lease and non-lease components (included in the daily hire rate) is the same. The daily hire rate represents the hire rate for a bare boat charter as well as the compensation for expenses incurred running the vessel such as crewing expense, repairs, insurance, maintenance and lubes. Both the lease and non-lease components are earned by passage of time.

The adoption of ASC 842 did not materially impact our accounting for time ~~charter out~~charter-out contracts. The revenue generated from time charter out contracts is recognized on a straight-line basis over the term of the respective time charter agreements, which are recorded as part of ~~revenues,~~Revenues, net in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020.

Time charter-in contracts

The Company charters in vessels to supplement our own fleet and employs them both on time charters and voyage charters. The time charter-in contracts range in lease terms from 30 days to ~~2 years.~~1 year. The Company elected the practical expedient of ASC 842 that allows for time charter-in contracts with an initial lease term of less than 12 months to be excluded from the operating lease right-of-use assets and lease liabilities recognized on our Condensed Consolidated Balance Sheet as of January 1, 2019. The Company recognized the operating lease right-of-use assets and the corresponding lease liabilities on the Condensed Consolidated Balance ~~sheet~~Sheet for time charter-in contracts greater than 12 months on the date of adoption of ASC 842. The Company will continue to recognize the lease payments for all operating leases as charter hire expenses on the condensed consolidated statements of operations on a straight-line basis over the lease term.

~~F-9~~

Under ASC 842, leases are classified as either finance or operating arrangements, with such classification affecting the pattern and classification of expense recognition in an entity's income statement. For operating leases, ASC 842 requires recognition in an entity’s income statement of a single lease expense, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Right-of-use assets represent a right to use an underlying asset for the lease term and the related lease liability represents an obligation to make lease payments pursuant to the contractual terms of the lease agreement.

At lease commencement, a lessee must develop a discount rate to calculate the present value of the lease payments so that it can determine lease classification and measure the lease liability. When determining the discount rate to be used at lease commencement, a lessee must use the rate implicit in the lease unless that rate cannot be readily determined. When the rate implicit in the lease cannot be readily determined, the lessee should use its incremental borrowing rate. The incremental borrowing rate is the rate that reflects the interest a lessee would have to pay to borrow funds on a collateralized basis over a similar term and in a similar economic environment. The Company determined that the time charter-in contracts do not contain an implicit borrowing rate. Therefore, the Company arrived at the incremental borrowing rate by determining the Company's implied credit rating and the yield curve for debt as of January 1, 2019. The Company then interpolated the yield curve to determine the incremental borrowing rate for each lease based on the remaining lease term on the specific lease. Based on the above methodology, the Company's incremental borrowing rates ranged from 5.05% to 6.08% for the 5 lease contracts for which the Company recorded operating lease right-of-use assets and corresponding lease liabilities.

~~The~~As of September 30, 2021, the Company ~~has~~had time charter-in contracts for 34 Ultramax vessels which are greater than 12 ~~months as of the date of adoption of ASC 842.~~months. A brief description of each of these contracts is below:

F-8

(i) The Company entered into an agreement effective April 28, 2017, to charter-in a 61,400 dwt, 2013 built Japanese vessel for approximately four years with options for two additional years. The hire rate for the first four years is $12,800 per day and the hire rate for the first optional year is $13,800 per day and $14,300 per day for the second optional year. ~~The Company determined that it will not exercise the existing options under this contract and therefore the options are not included in the calculation of the operating lease right-of-use asset.~~ In addition, the Company’s fair value below contract value of time charters acquired of $1.8 million as of December 31, 2018, which related to the unamortized value of a prior charter with the same counterparty that had been recorded at the time of the Company’s emergence from bankruptcy, was offset against the corresponding right of use asset on this lease as of January 1, 2019. On July 8, 2021, the Company exercised its option to extend the charter for another year at a hire rate of $13,800 per day. The Company has increased the lease liability and the corresponding right-of-use asset by $5.0 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of July 8, 2021 was 1.36%.

(ii) On May 4, 2018, the Company entered into an agreement to charter-in a 61,425 dwt 2013 built Ultramax vessel for three years with an option for an additional two years. The hire rate for the first three years is $12,700 per day and $13,750 per day for the first year option and $14,750 per day for the second year option. The Company took delivery of the vessel in the third quarter of 2018. During the second quarter of 2021, the Company decided to extend the lease term to its maximum redelivery date allowed under the charter party. Additionally, on June 28, 2021, the Company exercised its option to extend the charter for another year until October 19, 2022 at a hire rate of $13,750 per day. The Company ~~determined that it will not exercise~~has increased the ~~existing options under this contract~~lease liability and ~~therefore~~ the ~~options are not included~~corresponding right-of-use asset by $5.8 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the ~~calculation~~measurement of lease liability and the ~~operating lease~~corresponding right-of-use ~~asset.~~asset based on the Company's implied credit rating and the yield curve for debt as of June 28, 2021 was 1.34%.

(iii) On December 9, 2018, the Company entered into an agreement to charter-in a 62,487 dwt 2016 built Ultramax vessel for two years. The hire rate for the vessel until March 2020 iswas $14,250 per day and $15,250 per day thereafter. The Company took delivery of the vessel in the fourth quarter of 2018. ~~The Company elected not to exercise the existing options under this contract and therefore the options are not included in the calculation of the operating lease right-of-use asset.~~ On December 25, 2019, the Company renegotiated the lease terms for another year at a hire rate of $11,600 per day. The Company accounted for this as a lease modification on December 25, 2019 and increased its lease liability and right-of-use asset on its consolidated balance sheet as of December 31, 2019 by $4.5 million. During the first quarter of 2021, the Company decided to extend the lease term to its maximum redelivery date allowed under the charter party. Therefore, the lease liability and the corresponding right-of-use asset as of March 31, 2021 have been increased by $1.0 million to reflect the change in lease term from minimum redelivery date to maximum redelivery date allowed under the charter party. On May 4, 2021, the Company exercised its option to extend the charter for another year until July 31, 2022 at a hire rate of $12,600 per day. The Company has increased the lease liability and the corresponding right-of-use asset by $4.3 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of May 4, 2021 was 1.38%.

(iv) On December 22, 2020, the Company entered into an agreement to charter-in a 63,634 dwt 2021 built Ultramax vessel for twelve months with an option for an additional three months at a hire rate of $5,900 per day plus 57% of the Baltic Supramax Index ("BSI") 58 average of 10 time charter routes as published by the Baltic Exchange each business day. Additionally, following the initial fifteen month period the Company has an additional option to extend for a period of eleven to thirteen months at an increased rate of $6,500 per day with no change in the rest of the terms. Also, the Company shall share the scrubber benefit with the owners 50% calculated as the price differential between the high sulfur and low sulfur fuel oil based on actual bunker consumption during the lease period. On July 7, 2021, the Company took delivery of the vessel and recorded $9.1 million as lease liability and corresponding right-of-use asset in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of July 7, 2021 was 1.33%.

Office leases

On October 15, 2015, the Company entered into a commercial lease agreement as a sublessee for office space in Stamford, Connecticut. The lease is effective from January 2016 through June 2023, with an average annual rent of $0.4 million. The lease is secured by cash collateral of ~~$74,917~~$0.1 million which is recorded as Restricted cash - noncurrent in the accompanying ~~condensed consolidated balance sheet~~Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, ~~2019.~~ 2020.

In November 2018, the Company entered into an office lease agreement in Singapore, which ~~expires~~was initially set to expire in October 2021, with an average annual rent of $0.3 million. On August 17, 2021, the Company renewed the lease on the existing office space for an additional 5 years with an average annual rent of $0.4 million. The Company increased the lease liability and

F-9

the corresponding right-of-use asset by $1.3 million in its Condensed Consolidated Balance Sheet as of September 30, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating as of August 17, 2021 was 3.09%.

Additionally, the Company entered into a new lease agreement for an additional office space in Singapore for 4.9 years beginning in the second quarter of 2022 with an average annual rent of $0.2 million. The Company is expected to take possession in the second quarter of 2022. No right-of-use asset or corresponding liability has been recognized in the Consolidated Balance Sheet as of September 30, 2021 since the Company did not take the possession of the office space and the lease term has not begun yet.

The Company determined the 2 office leases which terms have begun to be operating leases and recorded the lease expense as part of General and administrative expenses in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~

On July 27, 2020, the lessor on our office sublease in Stamford, Connecticut filed for Chapter 11 reorganization in the U.S. Bankruptcy Court in Birmingham, Alabama. The lessor also filed a motion to reject the prime lease with the landlord as well as the sublease with the Company. Subsequently, the bankruptcy court granted the motion and the prime lease and the sublease

~~F-10~~

were cancelled as of the date of the petition. As a result, the letter of credit of $74,917 associated with the sublease was cancelled and it is included in the Cash and cash equivalents as of September 30, 2020. ~~On September 21, 2020, the primary landlord assumed the sublease with the existing lease terms.~~

Lease Disclosures Under ASC 842

The objective of the disclosure requirements under ASC 842 is to enable users of an entity’s financial statements to assess the amount, timing, and uncertainty of cash flows arising from lease arrangements. In addition to the supplemental qualitative leasing disclosures included above, below are quantitative disclosures that are intended to meet the stated objective of ASC 842.

Operating lease right-of-use assets and lease liabilities as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020 are as follows:


Description	Description	Location in Balance Sheet	September 30, 2020 (1)		December 31, 2019 (1)		Description	Location in Balance Sheet	September 30, 2021 (1)		December 31, 2020 (1)
Assets:
Noncurrent assets:							Noncurrent assets:
Chartered-in contracts greater than 12 months ~~(2)~~	Chartered-in contracts greater than 12 months ~~(2)~~	Operating lease right-of-use assets	$	9,171,817	$	18,442,965	Chartered-in contracts greater than 12 months ~~(2)~~	Operating lease right-of-use assets	$	20,712,287	$	6,207,253
Office leases	Office leases	Operating lease right-of-use assets	1,497,614		1,967,072		Office leases	Operating lease right-of-use assets	2,133,410		1,333,618
Operating lease right-of-use assets	Operating lease right-of-use assets		$	10,669,431	$	20,410,037	Operating lease right-of-use assets		$	22,845,697	$	7,540,871

Liabilities:	Liabilities:						Liabilities:
Chartered-in contracts greater than 12 months	Chartered-in contracts greater than 12 months	Current portion of operating lease liabilities	$	10,151,384	$	12,622,524	Chartered-in contracts greater than 12 months	Current portion of operating lease liabilities	$	20,451,549	$	6,974,943
Office leases	Office leases	Current portion of operating lease liabilities	696,929		633,454		Office leases	Current portion of operating lease liabilities	642,760		640,428
Lease liabilities - current portion	Lease liabilities - current portion		$	10,848,313	$	13,255,978	Lease liabilities - current portion		$	21,094,309	$	7,615,371

Chartered-in contracts greater than 12 months	Chartered-in contracts greater than 12 months	Operating lease liabilities	$	0	$	6,974,943	Chartered-in contracts greater than 12 months	Noncurrent portion of operating lease liabilities	$	253,970	$	—
Office leases	Office leases	Operating lease liabilities	793,917		1,326,850		Office leases	Noncurrent portion of operating lease liabilities	$	1,490,649	$	686,422
Lease liabilities - noncurrent portion	Lease liabilities - noncurrent portion		$	793,917	$	8,301,793	Lease liabilities - noncurrent portion		$	1,744,619	$	686,422

(1) The Operating lease right-of-use assets and Operating lease liabilities represent the present value of lease payments for the remaining term of the lease. The discount rate used ranged from ~~5.05%~~1.33% to 6.08%. The weighted average discount rate used to calculate the lease liability was ~~5.50%~~1.67%.

~~(2)~~ During the second quarter of 2020, the Company determined that there were impairment indicators present for one of our chartered-in vessel contracts and, as a result, we recorded an operating lease impairment of $0.4 million. The operating lease impairment was included as a component of Operating (loss)/income in our Condensed Consolidated Statements of Operations for the nine months ended September 30, 2020.

The table below presents the components of the Company’s lease expenses and sublease income on a gross basis earned from chartered-in contracts greater than 12 months for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~

2020.

~~F-11~~F-10


			Three Months Ended				Nine Months Ended						Three Months Ended				Nine Months Ended
Description	Description	Location in Statement of Operations	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019		Description	Location in Statement of Operations	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Lease expense for chartered-in contracts less than 12 months	Lease expense for chartered-in contracts less than 12 months	Charter hire expenses	$	2,560,224	$	7,977,490	$	6,348,081	$	24,022,456	Lease expense for chartered-in contracts less than 12 months	Charter hire expenses	$	5,856,694	$	2,560,224	$	13,511,509	$	6,348,081
Lease expense for chartered-in contracts greater than 12 months	Lease expense for chartered-in contracts greater than 12 months	Charter hire expenses	2,500,279		3,368,125		9,472,728		9,994,546		Lease expense for chartered-in contracts greater than 12 months	Charter hire expenses	4,867,043		2,500,279		11,861,992		9,472,728
			$	5,060,503	$	11,345,615	$	15,820,809	$	34,017,002		Total charter hire expenses	$	10,723,737	$	5,060,503	$	25,373,501	$	15,820,809

Lease expense for office leases	Lease expense for office leases	General and administrative expenses	185,525		182,171		548,349		537,527		Lease expense for office leases	General and administrative expenses	188,880		185,525		465,269		548,349

Sublease income from chartered-in contracts greater than 12 months *	Sublease income from chartered-in contracts greater than 12 months *	Revenues, net	$	1,308,833	$	1,353,020	$	6,598,871	$	7,194,837	Sublease income from chartered-in contracts greater than 12 months *	Revenues, net	$	7,550,105	$	1,308,833	$	14,303,242	$	6,598,871

* The sublease income represents only time charter revenue earned on the chartered-in contracts with terms more than 12 months. There is additional revenue earned from voyage charters on the same chartered-in contracts which is recorded in Revenues, net in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020.

The cash paid for operating leases with terms greater than 12 months is $5.4 million and $12.2 million for the three and nine months ended September 30, 2021, respectively.

The cash paid for operating leases with terms greater than 12 months is $2.9 million and $9.9 million for the three and nine months ended September 30, 2020, respectively.

~~The cash paid~~On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for ~~operating leases with terms greater than 12~~a period of a minimum of twelve months ~~is $3.7 million~~ and ~~$11.2 million for~~a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5% of the ~~three and nine months ended September 30, 2019, respectively.~~

BSI 58 average of 10 time charter routes published by the Baltic Exchange each business day. The Company ~~did not enter into any operating leases greater than 12 months~~has the option to extend the lease term for another year, during which time the ~~three and nine months ended September 30, 2020.~~fixed hire rate decreases to $10,750 per day with no change to the remaining terms. The vessel is expected to be delivered to the Company in the second quarter of 2022.

The weighted average remaining lease term on our ~~chartered-in~~operating lease contracts greater than 12 months is ~~12.6~~14.84 months.

The table below provides the total amount of remaining lease payments on an undiscounted basis on our chartered-in contracts and office leases greater than 12 months as of September 30, ~~2020:~~

Year Chartered-in contracts greater than 12 months Office leases Total Operating leases
Discount rate upon adoption 5.37 % 5.80 % 5.48 %
Three months ending December 31, 2020 $ 3,287,395 $ 185,525 $ 3,472,920
2021 6,982,810 700,257 7,683,067
2022 483,048 483,048
2023 244,878 244,878
$ 10,270,205 $ 1,613,708 $ 11,883,913
Present value of lease liability $ 10,151,384 $ 1,490,846 $ 11,642,230
Lease liabilities - short term $ 10,151,384 $ 696,929 $ 10,848,313
Lease liabilities - long term 0 793,917 793,917
Total lease liabilities $ 10,151,384 $ 1,490,846 $ 11,642,230
Discount based on incremental borrowing rate $ 118,821 $ 122,862 $ 241,683
2021:

~~F-12~~F-11


Year	Chartered-in contracts greater than 12 months			Office leases			Total Operating leases

Discount rate upon adoption	5.37		%	5.80		%	5.48		%

Three months ending December 31, 2021	$	5,675,982		$	176,751		$	5,852,733
2022	15,096,117			748,243			15,844,360
2023	—			510,074			510,074
2024	—			265,922			265,922
2025	—			265,195			265,195
2026	—			265,195			265,195
2027	—			53,766			53,766
	$	20,772,099		$	2,285,146		$	23,057,245

Present value of lease liability

Lease liabilities - short term	$	20,451,549		$	642,760		$	21,094,309
Lease liabilities - long term	253,970			1,490,649			1,744,619
Total lease liabilities	$	20,705,519		$	2,133,409		$	22,838,928

Discount based on incremental borrowing rate	$	66,580		$	151,737		$	218,317

Revenue recognition

Voyage charters

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 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. The amount of revenue earned as demurrage or despatch paid by the Company for the three and nine months ended September 30, ~~2020~~2021 was ~~$0.6~~$8.6 million and ~~$4.6~~$16.8 million, respectively. The amount of revenue earned as demurrage or despatch paid by the Company for the three and nine months ended September 30, ~~2019~~2020 was ~~$1.8~~$0.6 million and ~~$7.8~~$4.6 million, respectively.

The following table shows the revenues earned from time charters and voyage charters for the three and nine months ended September 30, ~~2020~~2021 and ~~2019:~~2020:

Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Time charters $ 25,279,434 $ 37,086,461 $ 73,798,878 $ 96,728,727
Voyage charters 42,902,867 37,023,915 126,153,526 124,162,561
$ 68,182,301 $ 74,110,376 $ 199,952,404 $ 220,891,288


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020

Time charters	$	91,652,577	$	25,279,434	$	180,385,272	$	73,798,878
Voyage charters	91,740,123		42,902,867		229,430,182		126,153,526
	$	183,392,700	$	68,182,301	$	409,815,454	$	199,952,404

Contract costs

In a voyage charter contract, the Company bears all voyage related costs such as fuel costs, port charges and canal tolls. These costs are considered contract fulfillment costs because the costs are direct costs related to the performance of the contract and are expected to be recovered. The costs incurred during the period prior to commencement of loading the cargo, primarily bunkers, are deferred as they represent setup costs and recorded as a ~~current~~Current asset and are amortized on a straight-line basis as the related performance obligations are satisfied. As of September 30, 2021 and December 31, 2020, the Company recognized ~~$0.3~~$0.5 million of deferred costs which represents bunker expenses and charter-hire expenses incurred prior to commencement of loading. These costs are recorded in Other current assets on the Condensed Consolidated Balance ~~Sheet.~~Sheets.

Financial Instruments - Credit Losses

On January 1, 2020, the Company adopted ASC 2016-13, "Financial Instruments - Credit Losses" ("ASC 326"). The accounting standard amended 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. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses which will result in more timely recognition of such losses. The Company adopted the accounting standard using the prospective transition approach as of January 1, 2020. The cumulative effect upon adoption was not material to our condensed consolidated financial statements.

~~The~~ adoption of ASC 326 primarily impacted our trade receivables recorded on our Condensed Consolidated Balance ~~Sheet~~Sheets as of September 30, 2021 and December 31, 2020. The Company maintains an allowance for credit losses for expected uncollectible accounts

~~F-13~~

receivable, which is recorded as an offset to accounts receivable and changes in such are classified as voyage expense in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020. Upon adoption of ASC 326, the Company assessed collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considered historical collectability based on past due status and made judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considered customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. For the three and nine months ended September 30, ~~2020,~~2021, our assessment considered ~~business and market disruptions caused by COVID-19 and~~ estimates of expected emerging credit and collectability trends. The continued volatility in market conditions and evolving shifts in credit trends are difficult to predict causing variability and volatility that may have a material impact on our allowance for credit losses in future periods. The allowance for credit losses on accounts receivable was ~~$2.3~~$2.2 million as of September 30, ~~2020~~2021 and ~~$2.5~~$2.4 million as of December 31, ~~2019.~~

~~Accounting Standards issued but not yet adopted~~

The FASB has issued accounting standards that had not yet become effective as of September 30, 2020 and may impact the Company’s consolidated financial statements or related disclosures in future periods. Those standards and their potential impact are discussed below.

~~Accounting standards effective in 2021~~

In August 2020, the FASB issued ASC No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU's guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, the entity will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (2) a convertible debt instrument was issued at a substantial premium. ASU 2020-06 is effective for all public entities for fiscal years beginning after December 15, 2021, with early adoption permitted for fiscal years beginning after December 15, 2020. ~~The Company is currently evaluating the adoption of ASU 2020-06 on its Convertible Bond Debt.~~

Note 3. Vessels

Vessel and Vessel Improvements

As of September 30, ~~2020,~~2021, the Company’s owned operating fleet consisted of 4952 drybulk vessels.

During the fourth quarter of 2020, the Company entered into a series of memorandum of agreements to purchase 3 high specification scrubber-fitted Ultramax bulkcarriers for a total purchase price of $51.5 million including direct expenses of acquisition. The Company took delivery of the vessels during the first quarter of 2021.

During the first quarter of 2021, the Company entered into another series of memorandum of agreements to purchase 4 vessels. The first vessel is a high-specification scrubber-fitted Ultramax bulkcarrier for a total purchase price of $15.3 million and warrant for 212,315 common shares of the Company. The remaining 3 vessels are 2011-built Crown-58 Supramax bulkcarriers that were purchased for a total purchase price of $22.4 million and warrants for 329,583 common shares of the Company. The above mentioned prices include direct expenses of acquisition. Common shares were issuable upon exercise of warrants on a pro-rata basis in connection with each vessel delivery. The warrants were measured at fair value on the date of the memorandum of agreement and recorded as Vessel and vessel improvements on the Condensed Consolidated Balance Sheets when the Company took delivery of the vessels. The fair value of the warrants for the total of 541,898 common shares was approximately $10.7 million as of the date of the memorandum of agreements for each vessel. The Company took delivery of the

F-12

4 vessels during the second and third quarters of 2021 and issued 541,898 shares of common stock upon conversion of outstanding warrants.

During the second quarter of 2021, the Company entered into memorandum of agreements to acquire 2 high-specification 2015-built scrubber-fitted Ultramax bulkcarriers for a total consideration of $44.0 million. This acquisition was partially financed with cash on hand, which included proceeds raised from equity issued under the Company's ATM Offering. The Company took delivery of 1 vessel in the third quarter of 2021 for a total purchase price of $22.2 million including direct expenses of acquisition. The remaining vessel was delivered in October 2021.

On ~~July 9, 2020,~~June 1, 2021, the Company signed a memorandum of agreement to sell the vessel ~~Goldeneye~~Tern for a total net ~~proceeds~~consideration of ~~$4.6~~$9.2 million after ~~brokerage commission~~commissions and associated selling expenses. The vessel was delivered to the ~~buyers on August 7, 2020.~~buyer during the third quarter of 2021. The Company recorded a ~~loss~~gain of approximately $0.1 million in the third quarter of 2020 in connection with the sale of this vessel. The proceeds were recorded as Restricted cash - current in the Condensed Consolidated Balance Sheet as of September 30, 2020. A portion of the proceeds was used towards partial financing of scrubbers.

On September 2, 2020, the Company signed a memorandum of agreement to sell the vessel Skua for net proceeds of $5.1 million after brokerage commissions and associated selling expenses. The vessel is expected to be delivered to the buyer in the fourth quarter of 2020. The Company recorded a loss of $0.3$4.0 million in its Condensed Consolidated Statements of Operations for the three and nine months ended September 30, ~~2020 in connection with~~2021. Additionally, the Company wrote off $0.3 million of unamortized drydock costs upon sale of ~~this~~the vessel. ~~The Company recorded the carrying amount of the vessel as Vessel held for sale in its Condensed Consolidated Balance Sheet as of September 30, 2020.~~

During the third quarter of 2018, the Company entered into a series of agreements to purchase up to 37 scrubbers, which were fitted on the Company's vessels. The actual costs, including installation, were approximately $2.4 million per scrubber. During the second quarter of 2020, the Company completed and commissioned all 37 scrubbers and recorded $88.4 million in Vessels and vessel improvements in the Condensed Consolidated Balance Sheet as of September 30, 2020.

~~F-14~~

During the third quarter of 2018, the Company entered into a contract for the installation of ballast water treatment systems ("BWTS") on 39 of our owned vessels. The projected ~~costs,~~cost, including installation, ~~are~~is approximately $0.5 million per BWTS. The Company intends to complete the installations during scheduled drydockings. The Company completed installation of BWTS on 1517 vessels and recorded ~~$6.8~~$8.5 million in Vessels and vessel improvements in the Condensed Consolidated Balance ~~Sheet~~Sheets as of September 30, ~~2020.~~2021. Additionally, the Company recorded ~~$2.8~~$5.3 million as advances paid towards installation of BWTS on the remaining vessels as a ~~noncurrent~~Noncurrent asset in its Condensed Consolidated Balance ~~Sheet~~Sheets as of September 30, 2020. During the second quarter of 2020, the Company applied for and received extensions from the United States Coast Guard of up to one year for BWTS installation on 18 of our vessels. Additionally, the Company cancelled the BWTS installation orders on three of its vessels.2021.

The Vessels and vessel improvements activity for the nine months ended September 30, ~~2020~~2021 is below:


Vessels and vessel improvements, at December 31, ~~2019~~2020	$	~~835,959,084~~810,713,959
Purchase of vessels and vessel improvements	~~605,660~~109,884,516
Advances paid for vessel purchases as of December 31, 2020	3,250,000
Fair value of warrants issued as consideration for vessel purchases	10,679,988
Sale of vessel	~~(4,552,628)~~
~~Vessel held for sale~~	~~(5,475,370)~~(4,885,998)
Scrubbers and BWTS	~~38,884,772~~1,505,004
Depreciation expense	~~(31,850,808)~~(32,742,401)
Vessels and vessel improvements, at September 30, ~~2020~~2021	$	~~833,570,710~~898,405,068

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Note 4. Debt

September 30, 2020 December 31, 2019
Convertible Bond Debt $ 114,120,000 $ 114,120,000
Debt discount and debt issuance costs - Convertible Bond Debt (18,459,221) (21,316,856)
Convertible Bond Debt, net of debt discount and debt issuance costs 95,660,779 92,803,144
Norwegian Bond Debt 184,000,000 188,000,000
Debt discount and debt issuance costs - Norwegian Bond Debt (3,067,444) (4,132,690)
Less: Current portion - Norwegian Bond Debt (8,000,000) (8,000,000)
Norwegian Bond Debt, net of debt discount and debt issuance costs 172,932,556 175,867,310
New Ultraco Debt Facility 174,240,668 172,613,988
Revolver loan under New Ultraco Debt Facility 35,000,000 0
Debt discount and Debt issuance costs - New Ultraco Debt Facility (3,450,196) (3,507,824)
Less: Current portion - New Ultraco Debt Facility (31,244,297) (27,709,394)
New Ultraco Debt Facility, net of debt discount and debt issuance costs 174,546,175 141,396,770
Super Senior Facility 15,000,000 0
Debt issuance costs - Super Senior Facility (117,323) 0
Super Senior Facility, net of debt discount and debt issuance costs 14,882,677 0
Total long-term debt $ 458,022,187 $ 410,067,224


	September 30, 2021		December 31, 2020
Convertible Bond Debt	$	114,119,000	$	114,120,000
Debt discount and debt issuance costs - Convertible Bond Debt	(14,305,685)		(17,459,515)
Convertible Bond Debt, net of debt discount and debt issuance costs	99,813,315		96,660,485
Norwegian Bond Debt	176,000,000		180,000,000
Debt discount and debt issuance costs - Norwegian Bond Debt	(1,648,411)		(2,709,770)
Less: Current portion - Norwegian Bond Debt	(8,000,000)		(8,000,000)
Norwegian Bond Debt, net of debt discount and debt issuance costs	166,351,589		169,290,230
New Ultraco Debt Facility	158,671,371		166,429,594
Debt discount and Debt issuance costs - New Ultraco Debt Facility	(2,822,753)		(3,101,348)
Less: Current portion - New Ultraco Debt Facility	(34,666,521)		(31,244,297)
New Ultraco Debt Facility, net of debt discount and debt issuance costs	121,182,097		132,083,949
Holdco Revolving Credit Facility	24,000,000		—
Debt issuance costs - Holdco Revolving Credit Facility	(178,323)		—
Less: Current portion - Holdco Revolving Credit Facility	(23,821,677)		—
Holdco Revolving Credit Facility, net of debt issuance costs	—		—
Super Senior Facility	—		15,000,000
Debt issuance costs - Super Senior Facility	—		(103,643)
Super Senior Facility, net of debt issuance costs	—		14,896,357
Total long-term debt	$	387,347,001	$	412,931,021

Convertible Bond Debt

On July 29, 2019, the Company issued ~~$114.12~~$114.1 million in aggregate principal amount of 5.00% Convertible Senior Notes due 2024 (the “Convertible Bond Debt”). After deducting debt discount of $1.6 million, the Company received net proceeds of approximately $112.5 million. Additionally, the Company incurred $1.0 million of debt issuance costs relating to this transaction. The Company used the proceeds to partially finance the purchase of 6 Ultramax vessels and for general corporate purposes, including working capital. ~~The Company took delivery of the vessels in the third and fourth quarters of 2019.~~

The Convertible Bond Debt bears interest at a rate of 5.00% per annum on the outstanding principal amount thereof, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2020. The Convertible

~~F-15~~

Bond Debt may bear additional interest upon certain events, as set forth in the indenture governing the Convertible Bond Debt (the "Indenture").

The Convertible Bond Debt will mature on August 1, 2024 (the “Maturity Date”), unless earlier repurchased, redeemed or converted pursuant to its terms. The Company may not otherwise redeem the Convertible Bond Debt prior to the Maturity Date.

Each holder has the right to convert any portion of the Convertible Bond Debt, provided such portion is of $1,000 or a multiple thereof, at any time prior to the close of business on the business day immediately preceding the Maturity Date. The conversion rate of the Convertible Bond Debt after adjusting for the Reverse Stock Split effected on September 15, 2020 is 25.453 shares of the Company's common stock per $1,000 principal amount of Convertible Bond Debt (which is equivalent to a conversion price of approximately $39.29 per share of its common stock). During the three months ended September 30, 2021, the Company received a request for conversion of 1 $1,000 bond and elected to settle by issuance of 25 shares of common stock and $23 cash to the bondholder.

Upon conversion of the remaining bonds, the Company will pay or deliver, as the case may be, either cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election, to the holder, subject to shareholder approval requirements in accordance with the listing standards of the Nasdaq Global Select Market.

If the Company undergoes a fundamental change, as set forth in the Indenture, each holder may require the Company to repurchase all or part of their Convertible Bond Debt for cash in principal amounts of $1,000 or a multiple thereof. The

F-14

fundamental change repurchase price will be equal to 100% of the principal amount of the Convertible Bond Debt to be repurchased, plus accrued and unpaid interest. If, however, the holders instead elect to convert their Convertible Bond Debt in connection with the fundamental change, the Company will be required to increase the conversion rate of the Convertible Bond Debt at a rate determined by a combination of the date the fundamental change occurs and the stock price of the Company's common stock on such date.

The Convertible Bond Debt is the general, unsecured senior obligations of the Company. It ranks: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Convertible Bond Debt; (ii) equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; (iii) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all indebtedness and other liabilities of current or future subsidiaries of the Company.

The Indenture also provides for customary events of default. Generally, if an event of default occurs and is continuing, then the trustee or the holders of at least 25% in aggregate principal amount of the Convertible Bond Debt then outstanding may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Bond Debt then outstanding to be due and payable.

In accordance with ASC 470-Debt, the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) is to be separately accounted for in a manner that reflects the issuer's non-convertible debt borrowing rate. The guidance requires the initial proceeds received from the sale of convertible debt instruments to be allocated between a liability component and equity component in a manner that reflects the interest expense at the interest rate of similar non-convertible debt that could have been issued by the Company at the time of issuance. The Company accounted for the Convertible based on the above guidance and attributed a portion of the proceeds to the equity component. The resulting debt discount is amortized using effective interest method over the expected life of the Convertible Bond Debt as interest expense. Additionally, the debt discount and issuance costs were allocated based on the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Convertible Bond Debt.

Share Lending Agreement

In connection with the issuance of the Convertible Bond Debt, certain persons entered into an arrangement (the "Share Lending Agreement") to borrow up to 511,840 shares of the Company’s common stock through share lending arrangements from Jefferies LLC (“JCS”), an initial purchaser of the Convertible Bond Debt, which in turn entered into an arrangement to borrow the shares from an entity affiliated with Oaktree Capital Management, LP, one of the Company’s shareholders. The number of shares under the Share Lending Agreement have been adjusted for the Reverse Stock Split. As of September 30, ~~2020,~~2021, the fair value of the 0.5 million outstanding loaned shares was ~~$8.4~~$25.8 million based on the closing price of the common stock on September 30, ~~2020.~~2021. In connection with the Share Lending Agreement, JCS paid $0.03 million representing a nominal fee per borrowed share, equal to the par value of the Company’s common stock.

~~F-16~~

While the Share Lending Agreement does not require cash payment upon return of the shares, physical settlement is required (i.e., the loaned shares must be returned at the end of the arrangement). In view of this share return provision and other contractual undertakings of JCS in the share lending agreement, which have the effect of substantially eliminating the economic dilution that otherwise would result from the issuance of borrowed shares, the loaned shares are not considered issued and outstanding for the purpose of computing and reporting the Company's basic and diluted weighted average shares or earnings per share. If JCS were to file bankruptcy or commence similar administrative, liquidating or restructuring proceedings, the Company will have to consider 0.5 million shares lent to JCS as issued and outstanding for the purposes of calculating earnings per share.

New Ultraco Debt Facility

On January 25, 2019, Ultraco Shipping LLC ("Ultraco"), a wholly-owned subsidiary of the Company, entered into a senior secured credit facility, (the "New Ultraco Debt Facility"), which provides for an aggregate principal amount of $208.4 million, which consists of (i) a term loan facility of $153.4 million (the "Term Facility Loan") and (ii) a revolving credit facility of $55.0 million, of which ~~$20.0~~$55.0 million was available as of September 30, 2020. The proceeds from the New Ultraco Debt Facility were used to repay the outstanding debt including accrued interest under the Original Ultraco Debt Facility (as defined below) and the New First Lien Facility (as defined below) in full and for general corporate purposes.2021. Subject to certain conditions set forth in the New Ultraco Debt Facility, Ultraco may request an increase of up to $60.0 million in the aggregate principal amount of the Term Facility Loan. Outstanding borrowings under the New Ultraco Debt Facility bear interest at LIBOR plus 2.50% per annum. The Company paid $3.1 million as debt issuance costs to the lenders.

On October 1, 2019, Ultraco, the Company, and certain initial and additional guarantors entered into a first amendment to the New Ultraco Debt Facility (the "First Amendment") to provide for incremental commitments and pursuant to which on October 4, 2019, Ultraco borrowed $34.3 million for general corporate purposes, including capital expenditures relating to the installation of scrubbers. The Company paid $0.4 million as debt issuance costs to the lenders.

On April 20, 2020, Ultraco, the Company, and certain initial and additional guarantors entered into a second amendment to the New Ultraco Debt Facility (the "Second Amendment") to provide for certain amendments to definitions of consolidated interest coverage ratio and consolidated earnings before interest, taxes and depreciation and amortization ("EBITDA"). The amendment provides that the calculation interest coverage ratio does not include amortization of debt discount, debt issuance costs and non-cash interest income. The definition of EBITDA has been updated to exclude ~~stock based~~stock-based compensation from net ~~loss.~~income/(loss).

F-15

On June 9, 2020, Ultraco, the Company, and certain initial and additional guarantors entered into the Third Amendment (the "Third Amendment") to the New Ultraco Debt Facility to provide for incremental commitments and pursuant to which on June 12, 2020, Ultraco borrowed $22.6 million for general corporate purposes which was secured by 2 Ultramaxes already owned by the Company, the M/V Hong Kong Eagle and M/V Santos Eagle. The Company paid $0.4 million as debt issuance costs to the lenders. The Company incurred an additional ~~$0.3~~$0.2 million as deferred financing costs in relation to the transaction.

~~During the third quarter of 2020, the Company repaid $20.0 million of the outstanding revolver debt~~On April 5, 2021, Ultraco entered into an Agency Resignation and Appointment Agreement pursuant to which Crédit Agricole Corporate and Investment Bank was appointed as facility agent and security trustee under the New Ultraco Debt ~~Facility. As of September 30, 2020,~~Facility and ABN AMRO Capital USA LLC resigned its role as facility agent and security trustee. Additionally, the ~~availability~~facility was amended in order to increase the commitments under the ~~revolver~~existing term loan facility ~~is $20.0 million.~~by an amount equal to the lesser of (i) $16,500,000 and (ii) 50% of the aggregate fair market value of any Additional Vessel (as defined under the New Ultraco Debt Facility) and in any case in a maximum borrowed amount of $5,500,000 per Additional Vessel (the “Amendment”). The incremental commitments were secured by acquisitions of M/V Sankaty Eagle, M/V Newport Eagle and M/V Montauk Eagle. In connection with the Amendment, a fee of $0.2 million was paid to the lenders of the New Ultraco Debt Facility. The Company borrowed $16.5 million under the New Ultraco Debt Facility during the second and third quarters of 2021 upon delivery of Sankaty Eagle, Montauk Eagle and Newport Eagle.

The New Ultraco Debt Facility, ~~matures~~which was refinanced on October 1, 2021, would have matured on January 25, 2024 (the “New Ultraco Maturity Date”). Pursuant to the terms of the facility, Ultraco ~~must~~was required to repay the aggregate principal amount of $5.1 million in quarterly installments for the first year and ~~$7.8~~$8.7 million in quarterly installments from the second year until the New Ultraco Maturity Date. Additionally, there ~~are~~were semi-annual catch up amortization payments from excess cash flow with a maximum cumulative payable of $4.6 million, with a final balloon payment of all remaining outstanding debt to be made on the New Ultraco Maturity Date.

Ultraco’s obligations under the New Ultraco Debt Facility ~~are~~were secured by, among other items, a first priority mortgage on 2629 vessels owned by the Guarantors as identified in the New Ultraco Debt Facility and such other vessels that it may from time to time include with the approval of the Lenders (the “Ultraco Vessels”).

The New Ultraco Debt Facility ~~contains~~contained financial covenants requiring the Company, on a consolidated basis excluding Shipco (as defined below) and any of ~~Shipco��s~~Shipco’s subsidiaries (each, a “Restricted Subsidiary”) and any of the vessels owned by any Restricted Subsidiary, to maintain a minimum amount of free cash or cash equivalents in an amount not less than the greater of (i) $0.6 million per owned vessel and (ii) 7.5% of the total consolidated debt of the Company and its subsidiaries, excluding any Restricted Subsidiary, which currently consists of amounts outstanding under the New Ultraco Debt Facility. The New Ultraco Debt Facility also ~~requires~~required the Company to maintain a liquidity reserve of $0.6 million per Ultraco Vessel in an unblocked account. Additionally, the New Ultraco Debt Facility ~~requires~~required the Company, on a consolidated basis, excluding any Restricted

~~F-17~~

Subsidiary and the vessels owned by any Restricted Subsidiary, to maintain (i) a ratio of minimum value adjusted tangible equity to total assets ratio of not less than 0.30:1, (ii) a consolidated interest coverage ratio of not less than a range varying from 1.50 to 1.00 to 2.50 to 1.00, and (iii) a positive working capital. The New Ultraco Debt Facility also ~~imposes~~imposed operating restrictions on Ultraco and the Guarantors. The Company iswas in compliance with its financial covenants under the New Ultraco Debt Facility as of September 30, ~~2020.~~2021.

As noted above, the New Ultraco Debt Facility was refinanced on October 1, 2021. Please see Note 11 Subsequent Events for additional information.

Norwegian Bond Debt

On November 28, 2017, Eagle Bulk Shipco LLC, a wholly-owned subsidiary of the Company ("Shipco" or "Issuer") issued $200,000,000 in aggregate principal amount of 8.25% Senior Secured Bonds (the "Bonds" or the "Norwegian Bond Debt"). After giving effect to an original issue discount of approximately 1% and deducting offering expenses of $3.1 million, the net proceeds from the issuance of the Bonds were approximately $195.0 million. These net proceeds from the Bonds, together with the proceeds from the New First Lien Facility and cash on hand, were used to repay all amounts outstanding, including accrued interest under various debt facilities outstanding at that time and to pay expenses associated with the refinancing transactions. Shipco incurred $1.3 million in other financing costs in connection with the transaction. ~~Interest~~The Norwegian Bond Debt was repaid in full on October 18, 2021. Prior to being repaid, interest on the Bonds ~~accrues~~accrued at a rate of 8.25% per annum and the Bonds ~~will~~were set to mature on November 28, 2022. The Norwegian Bond Debt iswas guaranteed by the Issuer's subsidiaries and secured by mortgages over 2319 vessels (the "Shipco Vessels"), pledges of the equity of the Issuer and its subsidiaries and certain assignments.

F-16

The Issuer ~~may~~was permitted to redeem some or all of the outstanding Bonds on the terms and conditions and prices set forth in the bond terms. Upon a change of control of the Company, each holder of the Bonds ~~has~~had the right to require that the Issuer purchase all or some of the Bonds held by such holder at a price equal to 101% of the nominal amount, plus accrued interest.

The bond terms ~~contain~~contained certain financial covenants that the Issuer’s leverage ratio, defined as the ratio of outstanding bond amount and any drawn amounts under the Super Senior Facility less consolidated cash balance to the aggregate book value of the Shipco Vessels, must not ~~exceed~~have exceeded 75%, and its subsidiaries’ free liquidity must at all times behave been at least $12.5 million. Shipco iswas in compliance with its financial covenants under the bond terms as of September 30, ~~2020.~~2021.

The bond terms also contained certain customary events of default and negative covenants that restricted the Company's and the Issuer's ability to take certain actions.

InDuring the ~~third quarter of~~year ended December 31, 2020, the Company sold ~~one vessel,~~5 vessels, Goldeneye, ~~for net proceeds of $4.6 million. During 2019, the Company sold 4 vessels, Kestrel, Thrasher, Condor~~Skua, Osprey, Hawk and ~~Merlin,~~Shrike for combined net proceeds of ~~$29.6~~$23.2 million. ~~Additionally,~~During the years ended December 31, 2019 and 2018, the Company sold 5 vessels, Kestrel, Thrasher, Condor, Merlin and Thrush for combined net proceeds of $40.4 million. During 2021, the Company sold 1 vessel ~~Thrush, in 2018~~ for net proceeds of ~~$10.8~~$9.2 million. Pursuant to the bond terms governing the Norwegian Bond Debt, the proceeds from the sale of vessels are to be held in a restricted account to be used for the financing of the acquisition of additional vessels by Shipco and for partial funding of scrubbers. ~~As a result,~~The proceeds were used to purchase 2 Ultramax vessels for $36.1 million and partial financing of scrubbers for $23.6 million. During the third quarter of 2021, the Company ~~recorded~~transferred the remaining proceeds from ~~the~~ sale of ~~these~~ vessels of $13.8 million along with cash on hand of $11.8 million into a Shipco defeasance account to be used towards redemption of the bonds in October 2021. The aggregate amount of $25.6 million was recorded as ~~restricted~~Restricted cash - current ~~in the~~on its Condensed Consolidated Balance ~~Sheets~~Sheet as of September 30, 2020 and December 31, 2019. During the fourth quarter of 2019, Shipco acquired 1 modern Ultramax vessel for $20.1 million which was paid from the restricted cash - current. As of September 30, 2020, the Company used $23.4 million of proceeds received from the sale of Shipco Vessels for the purchase of scrubbers.2021.

~~The bond terms also contain certain customary events~~As noted above, the Norwegian Bond Debt was repaid in full on October 18, 2021 after the expiry of ~~default. The bond terms also contain certain customary negative covenants that may restrict~~ the ~~Company's and the Issuer's ability to take certain actions.~~requisite notice period. Please see Note 11 Subsequent Events for additional information.

Super Senior Facility

On December 8, 2017, Shipco entered into the Super Senior Revolving Facility Agreement (the "Super Senior Facility"), which provides for a revolving credit facility in an aggregate amount of up to $15.0 million. The proceeds of the Super Senior Facility are expected to be used (i) to acquire additional vessels or vessel owners and (ii) for general corporate and working capital purposes of Shipco and its subsidiaries. The Super Senior Facility matures on August 28, 2022. Shipco incurred $0.3 million as other financing costs in connection with the transaction.

~~As of September 30, 2020, $15.0 million was drawn down to be used for general corporate purposes.~~

~~The outstanding borrowings under~~During the third quarter, the Company cancelled the Super Senior ~~Facility bear interest at LIBOR plus 2.00% per annum and commitment fees of 40% of the applicable margin on the undrawn portion of the facility. For each loan that is requested~~Revolving Facility. There were no outstanding amounts under the ~~Super Senior Facility, Shipco must repay such loan along with accrued interest on the last day of each interest period relating to the loan.~~

~~Shipco’s obligations under the Super Senior Facility are guaranteed by the limited liability companies that are subsidiaries of Shipco~~facility and the ~~legal and beneficial owners of 23 vessels in the Company’s fleet (the “Eagle Shipco Vessel~~

~~F-18~~

Owners”), and are secured by, among other things, mortgages over such vessels. The Super Senior Facility ranks super senior to the Bonds with respect to any proceeds from any enforcement action relating to security or guarantees for both the Super Senior Facility and the Bonds.

The Super Senior Facility contains certain covenants that, subject to certain exceptions and qualifications, limit Shipco’s and its subsidiaries’ ability to, among other things, do the following: make distributions; carry out any merger, other business combination, or corporate reorganization; make substantial changes to the general nature of their respective businesses; incur certain indebtedness; incur liens; make loans or guarantees; make certain investments; transact other than on arm’s-length terms; enter into sale and leaseback transactions; engage in certain chartering-in of vessels; or dispose of shares of Eagle Shipco Vessel Owners. Additionally, Shipco’s leverage ratio must not exceed 75% and its subsidiaries’ free liquidity must at all times be at least $12.5 million. Also, the total commitments under the Super Senior Facility will be cancelled if (i) at any time the aggregate market value of the security vessels for the Super Senior Facility is less than 300% of the total commitments under the Super Senior Facility or (ii) if Shipco or any of its subsidiaries redeems or otherwise repays the Bonds so that less than $100.0Company recorded $0.1 million ~~is outstanding under the Bond Terms. Shipco is in compliance with its financial covenants under the Super Senior Facility as of September 30, 2020.~~

~~The Super Senior Facility also contains certain customary events of default customary to the transactions of this type.~~

~~New First Lien Facility~~

On December 8, 2017, Eagle Shipping LLC, a wholly-owned subsidiary of the Company ("Eagle Shipping") entered into a credit agreement (the "New First Lien Facility"), which provided for (i) a term loan facility in an aggregate principal amount of up to $60.0 million (the “Term Loan”) and (ii) a revolving credit facility in an aggregate principal amount of up to $5.0 million (the “Revolving Loan”).

On January 25, 2019, the Company repaid the outstanding balances of the Term Loan and the Revolving Loan together with accrued interest as of that date and discharged the debt under the New First Lien Facility in full from the proceeds of the New Ultraco Debt Facility. The Company accounted for the above transaction as a ~~debt extinguishment. As a result, the Company recognized $1.1 million, representing the outstanding balance of debt issuance costs, as a loss~~Loss on debt extinguishment in ~~the~~its Condensed Consolidated ~~Statement~~Statements of Operations for the three and nine months ended September 30, ~~2019.~~2021.

~~Original Ultraco Debt~~Holdco Revolving Credit Facility

On ~~June 28, 2017, Ultraco,~~March 26, 2021, Eagle Bulk Holdco LLC (“Holdco”), a wholly-owned subsidiary of the Company entered into a ~~credit agreement (the “Original Ultraco Debt~~Credit Agreement (Holdco Revolving Credit Facility”), made by and among ~~Ultraco,~~(i) Holdco, as borrower, (ii) the Company and certain wholly-owned vessel-owning subsidiaries of ~~Ultraco,~~Holdco, as joint and several guarantors, ~~(the “Ultraco Guarantors”~~(iii) the banks and financial institutions named therein as lenders (together with their successors and assigns, the “RCF Lenders”), (iv) Crédit Agricole Corporate and ~~certain~~Investment Bank and Nordea Bank ABP, New York Branch, as mandated lead arrangers, (v) Crédit Agricole Corporate and Investment Bank, as arranger, facility agent and security trustee for the RCF Lenders. Pursuant to the Holdco Revolving Credit Facility, the RCF lenders ~~thereto.~~agreed to make available an aggregate principal amount of up to the lesser of (a) $35,000,000 and (b) 65% of the Fair Market Value of the Initial Vessels (as defined below). Borrowings under the Holdco Revolving Credit Facility, which were repaid in full on October 1, 2021, bore interest at a rate of 2.4% plus LIBOR for the relevant interest period.

~~On January 25, 2019,~~Borrowings under the Holdco Revolving Credit Facility were secured by 3 Ultramaxes - the M/V Helsinki Eagle and the M/V Stockholm Eagle and the M/V Rotterdam Eagle (collectively, the “Initial Vessels”). A fee of $0.2 million was paid to the RCF Lenders.

The maturity date for the Holdco Revolving Credit Facility was December 31, 2021 on which day the aggregate principal outstanding amount of all loans outstanding would have been required to be paid in full.

F-17

The Holdco Revolving Credit Facility included affirmative and negative covenants and events of default that are customary for transactions of this kind. Additionally, the Holdco Revolving Credit Facility included a minimum consolidated liquidity covenant that requires the Company ~~repaid~~on a consolidated basis (but excluding Shipco and its subsidiaries (the “Restricted Subsidiaries”)) to maintain cash equivalents in an amount not less than the ~~outstanding balance~~greater of (i) $600,000 per vessel owned directly or indirectly by the Company and its subsidiaries and (ii) 7.5% of the ~~Original Ultraco Debt facility and discharged the~~consolidated total debt ~~in full from the proceeds~~ of the ~~New Ultraco Debt Facility.~~Company. The Holdco Revolving Credit Facility also required the Company, on a consolidated basis (but excluding the Restricted Subsidiaries) to maintain, at all times, the ratio of its minimum value adjusted tangible equity of total assets of not less than 0.30 to 1. Finally, the Holdco Revolving Credit Facility required the Company, on a consolidated basis (but excluding the Restricted Subsidiaries) to maintain, at all times, positive working capital. The Company ~~accounted for~~was in compliance with its financial covenants under the ~~above transaction~~Holdco Revolving Credit Facility as ~~a debt extinguishment. As a result, the Company recognized $1.2 million, representing the outstanding balance~~ of ~~debt issuance costs, as a loss on debt extinguishment in the Condensed Consolidated Statement of Operations for the nine months ended~~ September 30, ~~2019.~~2021.

As noted above, the Holdco Revolving Credit Facility was refinanced on October 1, 2021. Please see Note 11 Subsequent Events for additional information.

Interest Rates

~~2020~~2021

For the three and nine months ended September 30, ~~2020,~~2021, the interest rate on the Convertible Bond Debt was ~~5.0%~~5.00%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 10.14%.

For the three months ended September 30, ~~2020,~~2021, the interest rate on the New Ultraco Debt Facility ranged from ~~2.73%~~2.61% to ~~4.28%~~2.68%, including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolver credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 3.39%.

For the nine months ended September 30, 2021, the interest rate on the New Ultraco Debt Facility ranged from 2.60% to 2.72%, including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolver credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 3.28%.

For the three and nine months ended September 30, 2021, the interest rate on our outstanding debt under the Norwegian Bond Debt was 8.25%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 9.05% and 9.02%, respectively.

For the nine months ended September 30, 2021, the interest rate on our outstanding debt under the Super Senior Facility was 2.24%. The weighted average effective interest rate including the amortization of debt issuance costs for this period was 2.58%. The outstanding revolver loan under the Super Senior Facility was repaid in the first quarter of 2021. The facility was cancelled during the third quarter of 2021.

For the three months ended September 30, 2021, the interest rate on our outstanding debt under the Holdco Revolving Credit Facility was 2.55%. The weighted average effective interest rate including the amortization of debt issuance costs for this period was 6.15%. Additionally, we pay commitment fees of 40% of the margin on the undrawn portion of the Holdco Revolving Credit Facility.

For the nine months ended September 30, 2021, the interest rate on our outstanding debt under the Holdco Revolving Credit Facility ranged from 2.55% to 2.60%. The weighted average effective interest rate including the amortization of debt issuance costs for this period was 5.61%. Additionally, we pay commitment fees of 40% of the margin on the undrawn portion of the Holdco Revolving Credit Facility.

2020

For the three and nine months ended September 30, 2020, the interest rate on the Convertible Bond Debt was 5.00%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 10.14%.

F-18

For the three months ended September 30, 2020, the interest rate on the New Ultraco Debt Facility ranged from 2.73% to 4.28% including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolver credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount for this period was 3.56%.

For the nine months ended September 30, 2020, the interest rate on the New Ultraco Debt Facility ranged from 2.73% to 4.68%, including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40%

~~F-19~~

of the margin on the undrawn portion of the revolver credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 4.23%.

For the three and nine months ended September 30, 2020, the interest rate on ~~our outstanding debt under~~ the Norwegian Bond Debt was 8.25%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 9.01% and 8.96%, respectively.

For the three and nine months ended September 30, 2020, the interest rate on our outstanding debt under the Super Senior Facility ranged between 2.43% and 2.89%. The weighted average effective interest rate including the amortization of debt issuance costs for these periods was 2.79% and 3.19%, respectively. Additionally, we pay commitment fees of 40% of the margin on the undrawn portion of the Super Senior Revolver Facility.

~~2019~~

For the three and nine months ended September 30, 2019, the interest rate on the New First Lien Facility, which was repaid on January 25, 2019 ranged between 5.89% and 6.01%, including a margin over LIBOR applicable under the terms of the New First Lien Facility and commitment fees of 40% of the margin on the undrawn portion of the revolver credit facility of the New First Lien Facility. The weighted average effective interest rate including the amortization of debt discount for this period was 6.45%.

For the three and nine months ended September 30, 2019, the interest rate on the Convertible Bond Debt was 5.0%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 10.14%.

For the three months ended September 30, 2019, the interest rate on the New Ultraco Debt Facility ranged between 4.68% to 4.76% including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolver credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount for this period was 5.27%.

For the nine months ended September 30, 2019, the interest rate on the New Ultraco Debt Facility ranged from 4.15% to 5.26% including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolver credit facility of the New Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 4.93%.

For the three and nine months ended September 30, 2019, the interest rate on the Norwegian Bond Debt was 8.25%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 9.07% and 8.97%, respectively.

For the three and nine months ended September 30, 2019, the interest rate on the Original Ultraco Debt Facility, which was repaid on January 25, 2019, was 5.28% including a margin over LIBOR and commitment fees of 40% of the margin on the undrawn portion of the facility. The weighted average effective interest rate for this period was 6.80%.

The following table summarizes the Company’s total interest expense for:

~~F-20~~


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019			September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
New First Lien Facility interest		$	0	$	0	$	0	$	293,544
Convertible Bond Debt interest	Convertible Bond Debt interest	1,426,500		951,050		4,279,450		951,050		Convertible Bond Debt interest	$	1,426,467	$	1,426,500	$	4,279,467	$	4,279,450
Holdco Revolving Credit Facility interest										Holdco Revolving Credit Facility interest	156,086		—		313,918		—
New Ultraco Debt Facility interest	New Ultraco Debt Facility interest	1,946,446		1,781,577		6,052,556		5,122,441		New Ultraco Debt Facility interest	1,063,230		1,946,446		4,068,481		6,052,556
Norwegian Bond Debt interest	Norwegian Bond Debt interest	3,879,333		4,077,332		11,575,667		12,133,000		Norwegian Bond Debt interest	3,710,667		3,879,333		11,065,084		11,575,667
Original Ultraco Debt Facility interest		0		0		0		362,257
Super Senior Facility interest	Super Senior Facility interest	93,121		0		123,727		0		Super Senior Facility interest	—		93,121		29,818		123,727
Amortization of debt discount and debt issuance costs	Amortization of debt discount and debt issuance costs	1,608,800		1,136,445		4,654,871		2,265,374		Amortization of debt discount and debt issuance costs	1,975,792		1,608,800		5,442,978		4,654,871
Commitment fees on revolving credit facilities	Commitment fees on revolving credit facilities	0		170,889		196,823		484,785		Commitment fees on revolving credit facilities	178,875		—		361,930		196,823
Total Interest expense	Total Interest expense	$	8,954,200	$	8,117,293	$	26,883,094	$	21,612,451	Total Interest expense	$	8,511,117	$	8,954,200	$	25,561,676	$	26,883,094

Scheduled Debt Maturities

The following table presents the scheduled maturities of principal amounts of our debt ~~obligations:~~obligations as of September 30, 2021, which does not give effect to the debt refinancing concluded subsequent to September 30, 2021 (see Note 11 Subsequent Events for additional information):


		Norwegian Bond Debt		Super Senior Facility		New Ultraco Debt Facility		Convertible Bond Debt		Total			Norwegian Bond Debt		New Ultraco Debt Facility		Convertible Bond Debt		Holdco Revolving Credit Facility		Total
Three months ending December 31, 2020		$	4,000,000	$	0	$	7,811,074	$	0	$	11,811,074
2021		8,000,000		0		31,244,297		0		39,244,297
Three months ending December 31, 2021												Three months ending December 31, 2021	$	4,000,000	$	8,666,630	$	—	$	24,000,000	$	36,666,630
2022	2022	172,000,000		15,000,000		31,244,297		0		218,244,297		2022	172,000,000		34,666,521		—		—		206,666,521
2023	2023	0		0		31,244,297		0		31,244,297		2023	—		34,666,521		—		—		34,666,521
2024	2024	0		0		107,696,703		114,120,000		221,816,703		2024	—		80,671,699		114,119,000		—		194,790,699
		$	184,000,000	$	15,000,000	$	209,240,668	$	114,120,000	$	522,360,668		$	176,000,000	$	158,671,371	$	114,119,000	$	24,000,000	$	472,790,371

F-19

Note 5. Derivative Instruments

Interest rate swaps

~~On March 31,~~During 2020, the Company entered into ana series of interest rate swap ~~agreement~~agreements ("IRS") to effectively convert a portion of its debt under the New Ultraco Debt Facility excluding any amounts outstanding under the revolving credit facility as well as any new term loan borrowings from a floating to a fixed-rate basis. The Company entered into two additional IRS agreements during the second quarter of 2020 to convert the remaining portion of its outstanding debt under the New Ultraco Debt Facility excluding the revolver facility. The IRS was designated and qualified as a cash flow hedge. The Company uses the IRS for the management of interest rate risk exposure, as the IRS effectively converts a portion of the Company’s debt from a floating to a fixed rate. The IRS is an agreement between the Company and counterparties to pay, in the future, a fixed-rate payment in exchange for the counterparties paying the Company a variable payment. The amount of the net payment obligation is based on the notional amount of the IRS and the prevailing market interest rates. The Company may terminate the IRS prior to their expiration dates, at which point a realized gain or loss ~~would~~ may be ~~recognized.~~recognized, or may be amortized over the original life of the IRS if the hedged debt remains outstanding. The value of the Company’s commitment would increase or decrease based primarily on the extent to which interest rates move ~~against~~away from the rate fixed for each swap.

Tabular disclosure of derivatives location

The following table summarizes the interest rate swaps in place as of September 30, ~~2020~~2021 and December 31, ~~2019.~~2020.


Interest Rate Swap detail					Notional Amount outstanding
Trade date	Fixed rate		Start date	End date	September 30, 2021 (1)		December 31, 2020

March 31, 2020	0.64	%	July 27, 2020	January 26, 2024	$	—	$	72,452,297
April 15, 2020	0.58	%	July 27, 2020	January 26, 2024	—		36,226,149
June 25, 2020	0.50	%	July 27, 2020	January 26, 2024	—		57,751,148
					$	—	$	166,429,594

~~F-21~~(1) In August 2021, the Company cancelled the interest rate swaps with a notional amount of $150.8 million and incurred $0.2 million loss which will be amortized as interest expense over the original life of the cancelled swaps. Concurrent with the cancellation, the Company entered into an interest rate swap with a notional amount of $143.0 million which was subsequently cancelled on September 30, 2021. The Company incurred an additional $0.2 million loss which will be amortized as interest expense over the original life of the cancelled swaps.

Interest Rate Swap detail Notional Amount outstanding
Trade date Fixed rate Start date End date September 30, 2020 December 31, 2019
March 31, 2020 0.64 % July 27, 2020 January 26, 2024 $ 76,101,584 $ 0
April 15, 2020 0.58 % July 27, 2020 January 26, 2024 38,050,792 0
June 25, 2020 0.50 % July 27, 2020 January 26, 2024 60,088,292 0
$ 174,240,668 $ 0

~~Under these swap contracts, exclusive of applicable margins, the Company will pay fixed rate interest and receive floating-rate interest amounts based on three-month LIBOR settings.~~

The Company records the fair value of the interest rate swap as an asset or liability on its balance sheet. The effective portion of the swap is recorded in Accumulated other comprehensive loss. The estimated loss that is currently recorded in Accumulated other comprehensive loss as of September 30, ~~2020~~2021 that is expected to be reclassified into the earnings within the next twelve months is ~~$0.5~~$0.2 million. No portion of the cash flow hedges was ineffective during the three and nine months ended September 30, ~~2020.~~2021.

The effect of derivative instruments on the Statement of Operations for the three and nine months ended September 30, 2021 and 2020 is below:


Derivatives designated as hedging instruments	Location of loss in Statements of Operations	Effective portion of loss reclassified from Accumulated other comprehensive income/(loss)
		Three Months Ended				Nine Months Ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020

Interest rate swaps	Interest expense	$	(150,585)	$	105,114	$	(446,549)	$	105,114

Derivatives designated as hedging instruments Location of loss in Statements of Operations Effective portion of loss reclassified from Accumulated other Comprehensive loss
Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Interest rate swaps Interest expense $ 105,114 $ 0 $ 105,114 $ 0

F-20

The following table shows the interest rate swap asset and liabilities as of September 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

Derivatives designated as hedging instruments Balance Sheet location September 30, 2020 December 31, 2019
Interest rate swap Fair value of derivative instruments - current $ 443,745 $ 0
Interest rate swap Fair value of derivative instruments - noncurrent $ 681,000 $ 0


Derivatives designated as hedging instruments	Balance Sheet location	September 30, 2021		December 31, 2020

Interest rate swap	Fair value of derivatives - current/Current liabilities	$	—	$	481,791

Interest rate swap	Fair value of derivatives - noncurrent/Noncurrent liabilities	$	—	$	650,607

Forward freight agreements and bunker swaps

The Company trades in forward freight agreements (“FFAs”) and bunker swaps, with the objective of utilizing this market as economic hedging instruments that reduce the risk of specific vessels to changes in the freight market. The Company’s FFAs and bunker swaps have not qualified for hedge accounting treatment. As such, unrealized and realized gains are recognized as a component of Other expense, net in the ~~Condensed Consolidated Statement~~condensed consolidated statement of ~~Operations~~operations and ~~Derivative asset~~Other current assets and Fair value of derivatives in the Condensed Consolidated Balance Sheets. Derivatives are considered to be Level 2 instruments in the fair value hierarchy.

For our bunker swaps, the Company may enter into master netting, collateral and offset agreements with counterparties.

As of September 30, ~~2020,~~2021, the Company has International Swaps and Derivatives Association ("ISDA") agreements with ~~two~~2 applicable banks and financial institutions, which contain netting provisions. In addition to a master agreement with the Company

~~F-22~~

supported by a primary parent guarantee on either side, the Company also has associated credit support agreements in place with the two counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral, when the market value of transactions covered by these agreements exceeds specified thresholds. The Company does not anticipate non-performance by any of the counterparties. ~~As of September 30, 2020, no collateral had been received or pledged related to these derivative instruments.~~

As of September 30, ~~2020,~~2021, the Company had outstanding bunker swap agreements to purchase ~~3,000~~10,750 metric tons of high ~~sulfur fuel oil with prices ranging between $266~~ and ~~$290 and sell 3,000 metric tons of~~ low sulfur fuel oil with prices ranging between ~~$446~~$272 and ~~$467 per metric ton,~~$453 that are expiring at December 31, ~~2020.~~2021. The volume represents less than 10% of our estimated consumption on our fleet for the year. The Company had outstanding bunker swap agreements to purchase 10,350 metric tons of low sulfur fuel oil with prices ranging between $186 and $524 per metric ton, that are expiring at December 31, 2020. In addition, the Company had outstanding bunker swap agreements to purchase 2,700 metric tons of low sulfur fuel oil with prices ranging between $282 and $332 per metric ton, that are expiring at December 31, 2021. For the bunker swaps that expired on September 30, 2020, a payable of $0.3 million for realized losses was recorded within Fair value of derivative instruments - current in the Condensed Consolidated Balance Sheet.

AsThe following table shows our open positions on FFAs as of September 30, 2020, the Company entered into FFAs for 2,025 days covering the time period of October to December 2020 (between 15 and 30 days per month), expiring at the end of each calendar month during 2020. The FFA contract prices range from $7,700 to $11,650 per day. 2021:


FFA Period	Average FFA Contract Price		Number of Days Hedged
Quarter ending December 31, 2021	$	18,689	1260
Quarter ending March 31, 2022	22,407		315
Quarter ending June 30, 2022	22,086		315
Quarter ending September 30, 2022	21,735		315
Quarter ending December 31, 2022	21,486		315

The Company will realize a gain or loss on these FFAs based on the price differential between the average daily BSI rate and the FFA contract price. The gains or losses are recorded in Other expense, net in the ~~Condensed Consolidated Statement~~condensed consolidated statements of ~~Operations.~~operations.

The effect of non-designated derivative instruments on the Condensed Consolidated Statements of Operations and Balance Sheets is as ~~follows~~

For the Three Months Ended For the Nine Months Ended
Derivatives not designated as hedging instruments Location of (gain)/loss in Statements of Operations September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
FFAs - realized loss Realized and unrealized loss/(gain) on derivative instruments, net $ 2,088,537 $ 657,288 $ 1,404,060 $ 341,019
FFAs - unrealized loss Realized and unrealized loss/(gain) on derivative instruments, net 1,230,727 1,412,731 3,327,509 598,007
Bunker swaps - realized (gain)/loss Realized and unrealized loss/(gain) on derivative instruments, net (1,059,570) 148,606 (8,295,136) 79,269
Bunker swaps - unrealized loss/(gain) Realized and unrealized loss/(gain) on derivative instruments, net 711,659 696,438 (467,107) (378,382)
Total $ 2,971,353 $ 2,915,063 $ (4,030,674) $ 639,913
follows:

Derivatives not designated as hedging instruments Balance Sheet location September 30, 2020 December 31, 2019
FFAs - Unrealized gain Derivative asset and other current assets $ 62,310 $ 475,650
FFAs - Unrealized loss Fair value of derivatives - current 2,730,770 0
Bunker swaps - Unrealized gain Derivative asset and other current assets 370,360 96,043
Bunker swaps - Unrealized loss Fair value of derivatives - current 548,754 756,229

F-21


		For the Three Months Ended				For the Nine Months Ended
Derivatives not designated as hedging instruments	Location of loss/(gain) in Statements of Operations	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
FFAs - realized loss	Realized and unrealized loss/(gain) on derivative instruments, net	$	16,138,822	$	2,088,537	$	23,493,503	$	1,404,060
FFAs - unrealized (gain)/loss	Realized and unrealized loss/(gain) on derivative instruments, net	(6,787,069)		1,230,727		24,381,810		3,327,509
Bunker swaps - realized gain	Realized and unrealized loss/(gain) on derivative instruments, net	(800,807)		(1,059,570)		(2,099,177)		(8,295,136)
Bunker swaps - unrealized loss/(gain)	Realized and unrealized loss/(gain) on derivative instruments, net	439,622		711,659		(188,337)		(467,107)
Total		$	8,990,568	$	2,971,353	$	45,587,799	$	(4,030,674)

Derivatives not designated as hedging instruments

Balance Sheet location

September 30, 2021

December 31, 2020

FFAs - Unrealized loss

Fair value of derivatives - current/Current liabilities

24,381,091

—

Bunker swaps - Unrealized gain

Other current assets

1,097,484

352,399

Cash Collateral Disclosures

The Company does not offset fair value amounts recognized for derivatives by the right to reclaim cash collateral or the obligation to return cash collateral. The amount of collateral to be posted is defined in the terms of respective master agreements executed with counterparties or exchanges and is required when agreed upon threshold limits are exceeded. As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company posted cash collateral related to derivative instruments under its collateral security

~~F-23~~

arrangements of ~~$2.5~~$31.4 million and ~~$0.6~~$0.1 million, respectively, which is recorded ~~within Derivative~~as a Current asset ~~and other current assets~~ in the Condensed Consolidated Balance Sheets.

6. Fair Value Measurements

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash, cash equivalents and restricted cash—the carrying amounts reported in the Condensed Consolidated Balance Sheets for interest-bearing deposits approximate their fair value due to the short-term nature thereof.

Debt—the carrying ~~amounts of borrowings~~values approximates fair values for bonds issued under the Norwegian Bond Debt and the Convertible Bond Debt, ~~Super Senior Facility,~~which are traded on the Oslo Stock Exchange and NASDAQ, respectively. The carrying amounts of our term loan and revolver loan under the New Ultraco Debt Facility ~~(prior to application of the discount~~ and ~~debt issuance costs) including the~~revolver loan under Holdco Revolving ~~Loan,~~Credit Facility approximate their fair value, due to ~~the~~their variable interest ~~rate nature thereof.~~rates. All the credit facilities except the Convertible Bond Debt were refinanced on October 1, 2021 at their carrying values.

The Company defines fair value, establishes a framework for measuring fair value and provides disclosures about fair value measurements. The fair value hierarchy for disclosure of fair value measurements is as follows:

F-22

Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 non-derivatives 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. Our Level 2 non-derivatives include our ~~short-term investments and~~ debt balances under the Convertible Bond Debt, Holdco Revolving Credit Facility, Norwegian Bond Debt ~~Super Senior Facility,~~ and the New Ultraco Debt Facility. Freight forward agreements, bunker swaps and interest rate swaps are considered to be a Level 2 item as the Company, using the income approach to value the derivatives, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. See Note 5 Derivative Instruments.

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

During the second quarter of 2020, the Company determined there were impairment indicators present for one of our chartered-in vessel contracts and, as a result, we recorded an operating lease impairment of $0.4 million in the second quarter of 2020. The operating lease impairment was included as a component of Operating income/(loss) in our Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020.

September 30, ~~2020~~2021

Fair Value
Carrying Value (5)
Level 1 Level 2
Assets
Cash and cash equivalents (1)
$ 85,281,060 $ 85,281,060 $ 0
Liabilities
Norwegian Bond Debt (2)
184,000,000 0 174,110,000
New Ultraco Debt Facility (3)
209,240,668 0 209,240,668
Super Senior Facility (3)
15,000,000 0 15,000,000
Convertible Bond Debt (4)
114,120,000 0 87,159,150

~~F-24~~


			Fair Value
	Carrying Value (7)		Level 1		Level 2
Assets
Cash and cash equivalents (1)	$	125,644,368	$	125,644,368	$	—
Collateral on derivatives	31,369,664		31,369,664		—
Other current assets (2)	1,097,484		—		1,097,484
Liabilities
Norwegian Bond Debt (3)	176,000,000		—		179,960,000
New Ultraco Debt Facility (4)	158,671,371		—		158,671,371
Holdco Revolving Credit Facility (4)	24,000,000		—		24,000,000
Convertible Bond Debt (5)	114,119,000		—		171,178,500
Fair value of Derivatives - current (6)	24,381,091		—		24,381,091

December 31, ~~2019~~2020


				Fair Value							Fair Value
		Carrying Value (5)		Level 1		Level 2			Carrying Value (7)		Level 1		Level 2
Assets	Assets							Assets
Cash and cash equivalents (1)	Cash and cash equivalents (1)	$	59,130,285	$	59,130,285	$	0	Cash and cash equivalents (1)	$	88,848,771	$	88,848,771	$	—
Other current assets (2)								Other current assets (2)	483,739		131,340		352,399
Liabilities	Liabilities							Liabilities
Norwegian Bond Debt (2)		188,000,000		0		192,626,680
New Ultraco Debt Facility (3)		172,613,988		0		172,613,988
Convertible Bond Debt (4)		114,120,000		0		118,844,868
Norwegian Bond Debt (3)								Norwegian Bond Debt (3)	180,000,000		—		173,250,000
New Ultraco Debt Facility (4)								New Ultraco Debt Facility (4)	166,429,594		—		166,429,594
Super Senior Facility (4)								Super Senior Facility (4)	15,000,000		—		15,000,000
Convertible Bond Debt (5)								Convertible Bond Debt (5)	114,120,000		—		92,748,748
Fair value of Derivatives - current and noncurrent (6)								Fair value of Derivatives - current and noncurrent (6)	1,132,398		—		1,132,398

(1) Includes restricted cash (current and ~~non-current)~~noncurrent) of ~~$1.9~~$25.6 million at September 30, ~~2020~~2021 and ~~$5.5~~$18.9 million at December 31, ~~2019.~~2020.

(2)Relates to unrealized mark-to-market gains on bunker swaps as of September 30, 2021 and December 31, 2020. Includes $0.1 million of collateral on derivatives as of December 31, 2020.

(3) The fair value of the ~~Norwegian Bond Debt~~bond is based on the last trades on September ~~15, 2020~~20, 2021 and December ~~31, 2019~~14, 2020 on Bloomberg.com.

~~(3)~~(4) The fair value of the liabilities is based on the required repayment to the lenders if the debt was discharged in full on September 30, ~~2020.~~2021.

~~(4)~~(5) The fair value of the Convertible Bond Debt is based on the last trade on ~~October 6,~~September 28, 2021 and December 21, 2020 ~~and November 21, 2019~~ on Bloomberg.com.

~~(5)~~(6) Includes $24.4 million of unrealized mark-to-market losses on FFAs as of September 30, 2021 and $1.1 million of unrealized losses on our interest swaps as of December 31, 2020.

(7) The outstanding debt balances represent the face value of the debt excluding debt discount and debt issuance costs.

F-23

Note 7. Commitments and Contingencies

Legal Proceedings

The Company is involved in legal proceedings and may become involved in other legal matters arising in the ordinary course of its business. The Company evaluates these legal matters on a case-by-case basis to make a determination as to the impact, if any, on its business, liquidity, results of operations, financial condition or cash flows.

In March 2021, the U.S. government began investigating an allegation that one of our vessels may have improperly disposed of ballast water that entered the engine room bilges during a repair. The investigation of this alleged violation of environmental laws is in its early stages and is ongoing, and, although at this time we do not believe that this matter will have a material impact on our company, our financial condition or results of operations, we cannot determine what penalties, if any, will be imposed. We have posted a surety bond as security for any fines or penalties that may be issued, and the Company is cooperating fully with the U.S. government in its investigation of this matter. For the three and nine months ended September 30, 2021, the Company incurred and recorded $0.8 million and $2.3 million, respectively, as Other operating expense relating to this incident, which include legal fees, surety bond expenses, vessel offhire, crew changes and travel costs.

Note 8. Net ~~loss~~income/(loss) per Common Share

The computation of basic net ~~loss~~income/(loss) per share is based on the weighted average number of common stock outstanding for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020. Diluted net ~~loss~~income/(loss) per share gives effect to restricted stock awards and stock options using the treasury stock method, unless the impact is anti-dilutive. Diluted net ~~loss~~income per share ~~as of~~for three and nine months ended September 30, ~~2020~~2021 does not include ~~222,775~~21,718 warrants and 28,046 restricted ~~stock awards, 326,024 stock options and 21,752 warrants,~~shares, as their effect was anti-dilutive. Additionally, the Convertible Bond Debt is not considered a participating security and therefore not included in the computation of the Basic ~~loss~~net income per share for the three and nine months ended September 30, ~~2020.~~2021. The Company determined that it does not overcome the presumption of share settlement of outstanding debt and therefore the Company applied the if-converted method and ~~did not include~~included the potential shares to be issued upon conversion of Convertible Bond Debt in the calculation of Diluted income per share for the three and nine months ended September 30, 2021 as their effect was Dilutive. Diluted net loss per share for the three and nine months ended September 30, 2020 ~~as their effect was anti-dilutive. Diluted net loss per share as of September 30, 2019~~ does not include ~~219,576~~222,775 stock awards, ~~326,399~~326,024 stock options and 21,752 warrants, as their effect was anti-dilutive.

The following table summarizes the calculation of basic and diluted ~~loss~~income/(loss) per share:

~~F-25~~

Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Net loss $ (11,159,286) $ (4,562,989) $ (35,178,372) $ (10,525,662)
Weighted Average Shares - Basic * 10,279,698 10,192,842 10,274,906 10,189,636
Dilutive effect of stock options and restricted stock units 0 0 0 0
Weighted Average Shares - Diluted * 10,279,698 10,192,842 10,274,906 10,189,636
Basic loss per share * $ (1.09) $ (0.45) $ (3.42) $ (1.03)
Diluted loss per share * $ (1.09) $ (0.45) $ (3.42) $ (1.03)

*~~Adjusted to give effect for the 1-for-7 Reverse Stock Split that became effective as of September 15, 2020. See Note 1.~~


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Net income/(loss)	$	78,341,270	$	(11,159,286)	$	97,415,605	$	(35,178,372)
Weighted Average Shares - Basic	12,802,401		10,279,698		12,237,288		10,274,906
Dilutive effect of stock options, shares issuable under Convertible Bond Debt and restricted stock awards	3,133,973		—		3,117,193		—
Weighted Average Shares - Diluted	15,936,374		10,279,698		15,354,481		10,274,906
Basic income/(loss) per share	$	6.12	$	(1.09)	$	7.96	$	(3.42)
Diluted income/(loss) per share	$	4.92	$	(1.09)	$	6.34	$	(3.42)

Note 9. Stock Incentive Plans

As a result of the Reverse Stock Split, proportional adjustments were made to the Company's issued and outstanding common stock and to its common stock underlying stock options and other common stock-based equity grants outstanding immediately prior to the effectiveness of the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split. All references herein to common stock and per share data presented in this footnote have been retrospectively adjusted to reflect the Reverse Stock Split.

On December 15, 2016, the Company’s shareholders approved the 2016 Equity Compensation Plan (the “2016 Plan”) and the Company registered 764,087 shares of common stock adjusted for the Reverse Stock Split, which may be issued under the 2016 Plan. On June 7, 2019, the Company's shareholders approved an amendment and restatement of the 2016 Plan, which increased the number of shares reserved under the 2016 Plan by an additional 357,142 shares to a maximum of 1,121,229 shares of common stock. Any director, officer, employee or consultant of the Company or any of its subsidiaries (including any prospective officer or employee) is eligible to be designated to participate in the 2016 Plan. The Company withheld shares related to restricted stock awards that vested in ~~2020~~2021 at the fair market value equivalent to the maximum statutory withholding obligation and remitted that amount in cash to the appropriate taxation authorities.

F-24

On June 7, 2019, the Company's shareholders approved an amendment and restatement of the 2016 Plan, which increased the number of shares reserved under the 2016 Plan by an additional 357,142 shares to a maximum of 1,121,229 shares of common stock.

~~On January 2, 2020,~~February 19, 2021, the Company granted ~~53,178~~92,327 restricted shares as a company-wide grant under the 2016 Plan. The fair value of the grant based on the closing share price on ~~January 2, 2020~~February 19, 2021 was ~~$1.7~~$2.8 million. The shares will vest in equal installments over a ~~three-year~~three-year term. Additionally, the Company granted ~~4,037~~4,341 shares of fully vested common stock to its board of directors. The fair value of the director grant based on the closing share price of ~~January 2, 2020~~February 19, 2021 was $0.1 million. ~~The shares vested immediately.~~ The amortization of the above grants is ~~$0.3~~$0.4 million and ~~$0.9~~$1.3 million ~~respectively~~ for the three and nine months ended September 30, ~~2020,~~2021, which is included in General and administrative expenses in the ~~general~~Condensed Consolidated Statements of Operations.

On September 3, 2021, the Company granted 17,727 shares of time-based awards to certain members of its senior management team under the 2016 Plan. The awards vest in three equal installments on September 3, 2022, September 3, 2023 and September 3, 2024. The aggregate fair value of these awards based on the closing share price on September 3, 2021 was $0.9 million. The amortization of the above grant is $0.05 million for the three and nine months ended September 30, 2021, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations.

~~During the second quarter of 2020,~~Also on September 3, 2021, the Company granted ~~50,713~~performance based restricted ~~shares~~stock grants to certain members of its ~~employees~~senior management team under the 2016 ~~Plan.~~Plan which are contingent on certain performance criteria. The maximum number of performance-based stock awards that can be issued are 53,182.

Of the maximum 53,182 performance-based stock awards granted, 35,454 shares at maximum were granted based on earnings per share ("EPS performance") for the year ending December 31, 2021 (with targets set forth earlier in the year). Restricted shares which will vest in three equal installments (subject to achievement of performance criteria) on September 3, 2022, September 3, 2023 and September 3, 2024. The aggregate fair value of ~~the grant~~these awards based on the closing share price on ~~grant date~~September 3, 2021 was ~~$0.6~~$1.8 million. The ~~shares~~EPS performance is considered to be a performance condition under ASC 718 "Share based payment awards" and therefore the stock based compensation expense is recorded based on the probable outcome that the performance condition will ~~vest in equal installments over a~~ ~~three-year term beginning January 2, 2020. The amortization~~be achieved. As of September 30, 2021, the ~~above grants~~Company estimated that the performance condition will be met and recorded $0.1 million as stock based compensation expense which is included in ~~the general~~General and administrative expenses in its Condensed Consolidated Statement of Operations for the three and nine months ended September 30, ~~2020~~2021.

Of the maximum 53,182 performance-based stock awards granted, 17,728 shares at maximum were granted based on relative total shareholder return ("TSR performance") for the year ending December 31, 2021. Restricted shares which will vest in three equal installments on September 3, 2022, September 3, 2023 and September 3, 2024. All the vested TSR performance shares are subject to a 1-year holding period after vesting. The TSR performance is based on the Company's total shareholder return compared to 7 peer companies over the performance period which ranges between January 1, 2021 and December 31, 2021. The TSR performance is calculated based average daily closing stock price over a 20-trading-day period at the beginning and ending of the performance period. The aggregate fair value of the TSR performance awards, which was ~~$0.1~~calculated using a Monte Carlo simulation model, was $0.5 million. The assumptions used in the model were risk-free rate of return of 0.05% based on 4-month treasury rates as of September 3, 2021; expected volatility of 55.66% based on 1-year historical daily volatility of the closing share prices for the Company; and 8.1% discount applied for the 1-year holding period using the Finnerty model. The Company recorded $0.02 million as stock-based compensation expense which is included in General and ~~$0.2 million, respectively.~~administrative expenses in its Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021.

As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, stock awards covering a total of ~~222,775~~209,772 and ~~222,786~~218,013 shares of the Company’s common stock, respectively, are outstanding under the 2016 Plan. The vesting terms range between one to three years from the grant date. The Company is amortizing to stock-based compensation expense included in ~~general~~General and administrative expenses the fair value of non-vested stock awards at the grant date.

As of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, vested options covering ~~316,024~~309,163 and ~~289,845~~312,591 shares of the Company’s common stock, respectively, are outstanding with exercise prices ranging from $29.96 to $38.92 per share. In the nine months ended September 30, 2021, 16,428 stock options were exercised. In connection with the exercise, 4,974 shares of common stock were issued and 11,454 stock options were cancelled as a settlement for the liability relating to tax withholding as well as the exercise price owed to the Company.

As of September 30, ~~2020 and~~2021 there were no unvested options outstanding. As of December 31, ~~2019,~~2020, there were 13,000 unvested options ~~covering 10,000 and 36,553 of the Company's common stock, respectively, are outstanding with exercise prices ranging from $29.96 to $38.92 per share. The options vest and~~

~~F-26~~

~~become exercisable in four equal installments beginning on the grant date.~~outstanding. All options expire within 5five years from the effective date.

Stock-based compensation expense for all stock awards and options included in General and administrative expenses:

Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Stock awards /Stock Option Plans $ 741,020 $ 1,155,223 $ 2,300,444 $ 3,827,902

F-25


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Stock awards/Stock Option Plans	$	777,468	$	741,021	$	2,235,279	$	2,300,444

The future compensation to be recognized for all the grants ~~issued including the grants issued on January 2, 2020,~~ for the three months ending December 31, ~~2020,~~2021, and the years ending December 31, ~~2021~~2022 and ~~2022~~2023 will be ~~$0.7 million,~~ $1.1 million, $2.6 million and ~~$0.3~~$1.0 million, respectively.

Note 10. Cash, cash equivalents, and ~~Restricted~~restricted cash

The following table provides a reconciliation of Cash and cash equivalents and ~~Restricted~~restricted cash reported within the ~~consolidated balance sheets~~Condensed Consolidated Balance Sheets that sum to the total of the amounts shown in the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~cash flows:~~Cash Flows:


		September 30, 2020		December 31, 2019		September 30, 2019		December 31, 2018			September 30, 2021		December 31, 2020		September 30, 2020		December 31, 2019

Cash and cash equivalents	Cash and cash equivalents	$	83,408,816	$	53,583,898	$	71,537,108	$	67,209,753	Cash and cash equivalents	$	100,011,694	$	69,927,594	$	83,408,816	$	53,583,898

Restricted cash - current		1,872,244		5,471,470		0		0
Restricted cash - noncurrent		0		74,917		29,586,342		10,953,885
Restricted cash - current *										Restricted cash - current *	25,557,674		18,846,177		1,872,244		5,471,470
Restricted cash - noncurrent *										Restricted cash - noncurrent *	75,000		75,000		—		74,917
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	85,281,060	$	59,130,285	$	101,123,450	$	78,163,638	Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	125,644,368	$	88,848,771	$	85,281,060	$	59,130,285

*Amounts included in restricted cash ~~represent~~posted to secure the letter of credit on our office leases and the cash ~~required~~posted to a defeasance account as of September 30, 2021 to be ~~set aside by~~utilized for redemption of the Norwegian Bond Debt. The cash was used in redemption of the Norwegian Bond Debt ~~as defined in Note 4 above. The restriction lapsed when the funds were used for the purchase of one Ultramax vessel or the installation of scrubbers.~~which was repaid on October 18, 2021.

F-26

Note 11. Subsequent Events

On October ~~23, 2020,~~1, 2021, Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary of the Company, ~~signed memorandums~~along with certain of ~~agreement~~its vessel-owning subsidiaries, as guarantors, entered into a new senior secured credit facility (the “Credit Agreement”) with the lenders party thereto (the “Lenders”), the swap banks party thereto, Credit Agricole Corporate and Investment Bank (“Credit Agricole”), Skandinaviska Enskilda Banken AB (PUBL), Danish Ship Finance A/S, Nordea Bank ABP, Filial I Norge and DNB Markets Inc. The Credit Agreement provides for an aggregate principal amount of $400.0 million, which consists of (i) a term loan facility in an aggregate principal amount of $300.0 million (the “Term Facility”) and (ii) a revolving credit facility in an aggregate principal amount of $100.0 million (the “Revolving Facility”) to ~~sell~~be used for refinancing the ~~vessels Osprey~~outstanding debt including accrued interest and ~~Shrike~~commitment fees under the Norwegian Bond Debt, New Ultraco Debt Facility and Holdco Revolving Credit Facility ("Existing Facilities") and for ~~$4.7~~general corporate purposes. The Company paid fees of $5.8 million to the lenders in connection with the transaction.

Pursuant to the Credit Agreement, the Company borrowed $350.0 million and ~~$5.3~~together with cash on hand repaid the outstanding debt, accrued interest and commitment fees under the Existing Facilities. Concurrently, the Company issued a ten day call notice to redeem the outstanding bonds under the Norwegian Bond Debt at a redemption price of 102.475% of the nominal amount of each bond. Pursuant to the bond terms, the Company paid $185.6 million ~~respectively before brokerage commissions~~consisting of $176.0 million par value of the outstanding bonds, accrued interest of $5.2 million and ~~associated selling expenses. Both vessels are~~$4.4 million of call premium into a defeasance account to be further credited to the bondholders upon expiry of notice period. Out of the $185.6 million, the Company funded $25.6 million to the defeasance account as of September 30, 2021. The remaining $160.0 million was funded on October 1, 2021. The bonds outstanding under the Norwegian Bond Debt were repaid in full on October 18, 2021 after the expiry of the requisite notice period. Additionally, the Company entered into 4 interest rate swaps for the notional amount of $300.0 million of the term loan under the Credit Agreement at a fixed interest rate ranging between 0.83% and 0.94% to hedge the LIBOR based floating interest rate.

On October 28, 2021, the Company's Board of Directors declared a cash dividend of $2.00 per share to be paid on or about November 24, 2021 to shareholders of record at the close of business on November 15, 2021. The aggregate amount of the dividend is expected to be ~~delivered to their respective buyers in the fourth quarter of 2020. In connection with the sale of these vessels,~~approximately $27.2 million, which the Company ~~expects to record a loss of approximately $0.4 million after associated selling costs and related drydock costs in the fourth quarter of 2020. The proceeds~~anticipates will be ~~recorded as Restricted~~funded from cash ~~- current in~~on hand at the ~~Condensed Consolidated Balance Sheet as of December 31, 2020.~~time the payment is to be made.

F-27

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the Company’s financial condition and results of operations for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020. This section should be read in conjunction with the condensed consolidated financial statements included elsewhere in this report and the notes to those financial statements and the audited consolidated financial statements and the notes to those financial statements for the fiscal year ended December 31, ~~2019,~~2020, which were included in our Form 10-K, filed with the SEC on March 12, ~~2020.~~2021. For further discussion regarding our results of operations for the three and nine months ended September 30, ~~2019~~2020 as compared to the three and nine months ended September 30, ~~2018~~2019 please refer to Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Quarterly Report on Form 10-Q for the three and nine months ended September 30, ~~2019.~~2020. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Statement Regarding Forward-Looking Statements.”

Business Overview

Eagle Bulk Shipping Inc. (“Eagle” or the “Company”) is a U.S. based fully integrated shipowner-operator providing global transportation solutions to a diverse group of customers including miners, producers, traders, and end users. Headquartered in Stamford, Connecticut, with offices in Singapore and Copenhagen, Eagle focuses exclusively on the versatile mid-size drybulk vessel segment and owns one of the largest fleets of Supramax/Ultramax vessels in the world. The Company performs all management services in-house such as strategic, commercial, operational, technical, and administrative services, and employs an active management approach to fleet trading with the objective of optimizing revenue performance and maximizing earnings on a risk-managed basis. Typical cargoes we transport include both major bulk cargoes, such as iron ore, coal and grain, and minor bulk cargoes such as fertilizer, steel products, petcoke, cement, and forest products. As of September 30, ~~2020,~~2021, we owned and operated a modern fleet of 4952 Supramax/Ultramax dry bulk vessels. We chartered-in ~~three~~four Ultramax vessels which have a remaining lease term of approximately one ~~year.~~year each. In addition, the Company charters in third-party vessels on a short to medium term basis.

Our owned fleet totals 4952 vessels, with an aggregate carrying capacity of ~~2,893,767~~3,128,107 dwt and an average age of ~~9.3~~9.1 years as of September 30, ~~2020.~~2021.

Corporate Information

We maintain our principal executive offices at 300 First Stamford Place, 5th Floor, Stamford, Connecticut 06902. Our telephone number at that address is (203) 276-8100. Our website address is www.eagleships.com. Information contained on or accessible through our website does not constitute part of this Quarterly Report on Form 10-Q.

Business Strategy

We believe our balance sheet allows us the flexibility to opportunistically make investments in the drybulk segment that will drive shareholder growth. In order to accomplish this, we intend to:

•Maintain a highly efficient and quality fleet in the drybulk segment.

•Maintain a revenue strategy that takes advantage of a rising rate environment and at the same time mitigate risk in a declining rate environment.

•Maintain a cost structure that allows us to be competitive in all economic cycles without sacrificing safety or maintenance.

•Continue to grow our relationships with our charterers and vendors.

•Continue to invest in our on-shore operations and development of processes.

1F-1

Our financial performance is based on the following key elements of our business strategy:

(1)Concentration in one vessel category: Supramax/Ultramax drybulk vessels, which we believe offer certain size, operational and geographical advantages relative to other classes of drybulk vessels, such as Handysize, Panamax and Capesize vessels.

(2)An active owner-operator model where we seek to operate our own fleet and develop contractual relationships directly with cargo interests. These relationships and the related cargo contracts have the dual benefit of providing greater operational efficiencies and act as a balance to the Company’s naturally long position to the market. Notwithstanding the focus on voyage chartering, we consistently monitor the drybulk shipping market and, based on market conditions, will consider taking advantage of long-term time charters at higher rates when appropriate.

(3)Maintain high quality vessels and improve standards of operation through improved standards and procedures, crew training and repair and maintenance procedures.

We have employed all of our vessels in our operating fleet on time and voyage charters. The following table represents certain information about our revenue earning charters with respect to our operating fleet as of September 30, ~~2020:~~2021:

Vessel Year
Built Dwt Charter
Expiration Daily Charter
Hire Rate
Bittern 2009 57,809 Oct 2020 Voyage
Canary 2009 57,809 Nov 2020 Voyage
Cape Town Eagle 2015 63,707 Nov 2020 $ 11,000
Cardinal 2004 55,362 Nov 2020 Voyage
Copenhagen Eagle 2015 63,495 Nov 2020 $ 21,500
Crane 2010 57,809 Dec 2020 $ 1,666 (1)
Crested Eagle 2009 55,989 Nov 2020 Voyage
Crowned Eagle 2008 55,940 Oct 2020 $ 7,000
Dublin Eagle 2015 63,550 Oct 2020 $ 15,000
Egret Bulker 2010 57,809 Oct 2020 $ 15,900
Fairfield Eagle 2013 63,301 Dec 2020 $ 12,000
Gannet Bulker 2010 57,809 Oct 2020 $ 9,500
Golden Eagle 2010 55,989 Nov 2020 Voyage
Grebe Bulker 2010 57,809 Nov 2020 $ 16,300
Greenwich Eagle 2013 63,301 Jan 2021 $ 15,000


Vessel	Year Built	Dwt	Charter Expiration	Daily Charter Hire Rate
Antwerp Eagle	2015	63,530	Nov 2021	$	32,500

Bittern	2009	57,809	Oct 2021	Voyage

Canary	2009	57,809	Oct 2021	$	36,250

Cape Town Eagle	2015	63,707	Nov 2021	Voyage

Cardinal	2004	55,362	Nov 2021	$	47,000

Copenhagen Eagle	2015	63,495	Oct 2021	Voyage

Crane	2010	57,809	Oct 2021	$	29,200

Crested Eagle	2009	55,989	Oct 2021	Voyage

Crowned Eagle	2008	55,940	Oct 2021	Voyage

Dublin Eagle	2015	63,549	Nov 2021	Voyage

Egret Bulker	2010	57,809	Oct 2021	Voyage

Fairfield Eagle	2013	63,301	Nov 2021	$	41,200	(1)

Gannet Bulker	2010	57,809	Oct 2021	Voyage

Golden Eagle	2010	55,989	Oct 2021	$	47,500

Grebe Bulker	2010	57,809	Nov 2021	$	29,950


Greenwich Eagle								Greenwich Eagle	2013	63,301	Nov 2021	$	36,000	(2)

Groton Eagle	Groton Eagle	2013	63,301	Oct 2020	Voyage			Groton Eagle	2013	63,301	Oct 2022	$	35,000

Hamburg Eagle	Hamburg Eagle	2014	63,334	Dec 2020	$	10,000		Hamburg Eagle	2014	63,334	Oct 2021	Voyage

Hawk I		2001	50,296	Nov 2020	$	10,750
Helsinki Eagle								Helsinki Eagle	2015	63,605	Oct 2021	Voyage

Hong Kong Eagle	Hong Kong Eagle	2016	63,472	Oct 2020	Voyage			Hong Kong Eagle	2016	63,472	Oct 2021	$	35,000

Ibis Bulker	Ibis Bulker	2010	57,809	Oct 2020	$	7,500	(2)	Ibis Bulker	2010	57,809	Nov 2021	$	53,850

Imperial Eagle	Imperial Eagle	2010	55,989	Oct 2020	$	2,300	(3)	Imperial Eagle	2010	55,989	Oct 2021	$	46,000

Jaeger	Jaeger	2004	52,483	Oct 2020	Voyage			Jaeger	2004	52,483	Oct 2021	Voyage

Jay	Jay	2010	57,809	Oct 2020	Voyage			Jay	2010	57,809	Oct 2021	Voyage

Kingfisher	Kingfisher	2010	57,809	Nov 2020	$	3,500	(4)	Kingfisher	2010	57,809	Jan 2022	$	44,500

Madison Eagle	Madison Eagle	2013	63,301	Oct 2020	Voyage			Madison Eagle	2013	63,301	Oct 2021	Voyage

Martin	Martin	2010	57,809	Oct 2020	Drydock		(5)	Martin	2010	57,809	Oct 2021	$	45,000

Montauk Eagle								Montauk Eagle	2011	58,018	Oct 2021	Voyage

Mystic Eagle	Mystic Eagle	2013	63,301	Oct 2020	Voyage			Mystic Eagle	2013	63,301	Oct 2021	Voyage

New London Eagle	New London Eagle	2015	63,140	Oct 2020	$	8,170		New London Eagle	2015	63,140	Nov 2021	$	42,000

Newport Eagle								Newport Eagle	2011	58,018	Oct 2021	$	31,000

Nighthawk	Nighthawk	2011	57,809	Oct 2020	$	12,750		Nighthawk	2011	57,809	Feb 2022	$	16,250

Oriole	Oriole	2011	57,809	Oct 2020	Voyage			Oriole	2011	57,809	Oct 2021	Drydock		(3)

Osprey I		2002	50,206	Oct 2020	Voyage		(6)
Oslo Eagle								Oslo Eagle	2015	63,655	Oct 2021	$	37,000

Owl	Owl	2011	57,809	Oct 2020	$	15,000		Owl	2011	57,809	Nov 2021	$	35,000

Petrel Bulker	Petrel Bulker	2011	57,809	Oct 2020	Voyage			Petrel Bulker	2011	57,809	Oct 2021	$	26,000

Puffin Bulker	Puffin Bulker	2011	57,809	Oct 2020	Voyage			Puffin Bulker	2011	57,809	Nov 2021	$	36,000

Roadrunner Bulker	Roadrunner Bulker	2011	57,809	Nov 2020	$	9,400		Roadrunner Bulker	2011	57,809	Nov 2021	Voyage

Rowayton Eagle		2013	63,301	Oct 2020	$	17,500

Sandpiper Bulker		2011	57,809	Oct 2020	$	9,000

Santos Eagle		2015	63,537	Nov 2020	$	22,000

Rotterdam Eagle								Rotterdam Eagle	2017	63,629	Oct 2021	Voyage


Rowayton Eagle								Rowayton Eagle	2013	63,301	Oct 2021	Voyage

Sandpiper Bulker								Sandpiper Bulker	2011	57,809	Oct 2021	Voyage

Sankaty Eagle								Sankaty Eagle	2011	58,018	Oct 2021	Drydock		(3)

Santos Eagle								Santos Eagle	2015	63,537	Nov 2021	$	42,000

Shanghai Eagle	Shanghai Eagle	2016	63,438	Nov 2020	Voyage			Shanghai Eagle	2016	63,438	Oct 2021	$	45,000

Shrike		2003	53,343	Oct 2020	$	10,300	(6)

Singapore Eagle	Singapore Eagle	2017	63,386	Oct 2020	Voyage			Singapore Eagle	2017	63,386	Jan 2022	$	24,000

Skua		2003	53,350	Oct 2020	$	15,000	(7)

Southport Eagle	Southport Eagle	2013	63,301	Dec 2020	$	21,000		Southport Eagle	2013	63,301	Nov 2021	$	52,000

Stamford Eagle	Stamford Eagle	2016	61,530	Oct 2020	$	8,500		Stamford Eagle	2016	61,530	Nov 2021	$	37,500

Stellar Eagle	Stellar Eagle	2009	55,989	Oct 2020	Voyage			Stellar Eagle	2009	55,989	Nov 2021	Voyage

Stockholm Eagle								Stockholm Eagle	2016	63,275	Nov 2021	$	40,000	(4)

Stonington Eagle	Stonington Eagle	2012	63,301	Oct 2020	Voyage			Stonington Eagle	2012	63,301	Oct 2022	$	37,500

Sydney Eagle	Sydney Eagle	2015	63,523	Oct 2020	$	11,000		Sydney Eagle	2015	63,529	Oct 2021	Voyage

Tern		2003	50,209	Oct 2020	Voyage

Westport Eagle	Westport Eagle	2015	63,344	Oct 2020	$	23,000		Westport Eagle	2015	63,344	Oct 2021	$	29,000

(1)The vessel is contracted to continue the existing time charter at an increased daily rate of ~~$10,000~~$45,200 after November ~~20, 2020.~~10, 2021.

(2)The vessel is contracted to continue the existing time charter at an increased daily rate of ~~$12,750~~$40,000 after October ~~27, 2020.~~31, 2021.

(3)The vessel is ~~contracted to continue the existing time charter~~ at ~~an increased daily rate~~a shipyard undergoing drydock repairs as of ~~$10,750 after October 16, 2020.~~September 30, 2021.

(4)The vessel is contracted to continue the existing time charter at an increased daily rate of ~~$10,750~~$44,000 after November ~~14, 2020.~~

~~(5)The vessel is at a shipyard undergoing drydock repairs as of September 30, 2020.~~

~~(6)~~The Company signed memorandums of agreement to sell the vessels Osprey and Shrike on October 23, 2020. The vessels are expected to be delivered to their respective buyers in the fourth quarter of 2020.

~~(7)~~The Company signed a memorandum of agreement to sell the vessel Skua on September 2, 2020. The vessel is expected to be delivered to the buyer in the fourth quarter of 2020. The Company recorded the carrying amount of the vessel as Vessel held for sale in its Consolidated Balance Sheet as of September 30, 2020.5, 2021.

Business Outlook

~~In the first half of 2020, the charter hire rates have been significantly impacted by various factors, including the outbreak of~~ COVID-19 which has caused restrictions and/or closures of mines, factories, ports around the world. We believe the outbreak of COVID-19, and its impact to the global economy, is the primary reason why charter hire rates have been weak during the first half of 2020.

In March 2020, the World Health Organization (the “WHO”) declared COVID-19, to be a pandemic. The COVID-19 pandemic continues to have widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Governments have implemented measures such as social distancing, mask mandates, travel restrictions, COVID testing guidelines and quarantine regulations.

~~During~~

The gross BSI continued to increase in the third quarter of ~~2020, freight markets saw a strong rebound from~~2021 and averaged $34,278/day, up 109% as compared to the ~~low point in the second quarter as demand for the major bulk commodities recovered, especially for imports into China. The gross BSI averaged $9,931/day during the third~~first quarter of ~~2020, up 81% quarter-on-quarter but down 21% year-on-year. Currently, the market outlook is stronger with the forward BSI curve indicating~~2021. Although rates were higher resulting in an improvement in profitability, some of ~~approximately $10,000/day~~our vessels experienced delays in drydocking as well as an increase in related drydocking costs as a result of protocols regarding COVID 19, as well as limitations in labor. We also experienced loss of revenues due to a number of off-hire days relating to crew changes and quarantine restrictions as a number of our crew members tested positive for ~~the fourth quarter.~~COVID-19. Our vessel operating expenses specifically crew change costs, COVID testing and quarantine related costs continue to be negatively impacted by COVID-19.

~~In addition,~~While the ~~spread of COVID-19 has~~BSI is currently at $39,000 per day, the economic activity levels as well as the demand for dry bulk cargoes may be negatively impacted our business and may continue to do so. As a result of the spread of COVID-19, the Company has incurred some additional crewing expenses relating to procurement of personal protective equipment, COVID-19 testing, and crew travel, which is included in our vessel expenses for the three months and nine months ended September 30, 2020 in our Condensed Consolidated Statement of Operations. Additionally, the Company experienced some delays in drydocking and BWTS installations, operations and crew changes due to quarantine regulations and COVID-19 testing and resulting offhire days. For additional discussion regarding the impact of COVID-19, see “—Liquidity and Capital Resources—Summary of Liquidity and Capital Resources” and “Item 1A Risk Factors.”

by COVID-19. We have instituted measures to reduce the risk of spread of COVID-19 for our crew members on our vessels as well as our onshore offices in Stamford, Connecticut, Singapore, and Copenhagen. However, if the COVID-19 pandemic continues to

impact the global economy on a prolonged basis, or ~~becomes more severe,~~if the vaccine is not available on a

widespread basis, the rate environment in the drybulk market and our vessel values may deteriorate ~~further~~ and our operations and cash flows may ~~continue to~~ be negatively ~~impacted as well as our ability to meet the debt covenants under our existing debt facilities.~~

impacted.

Fleet Management

The management of our fleet includes the following functions:

•Strategic management. We locate and obtain financing and insurance for the purchase and sale of vessels.

•Commercial management. We obtain employment for our vessels and manage our relationships with charterers.

•Technical management. We have established an in-house technical management function to perform day-to-day operations and maintenance of our vessels.

Commercial and Strategic Management

We carry out the commercial and strategic management of our fleet through our indirectly wholly-owned subsidiary, Eagle Bulk Management LLC, a Marshall Islands limited liability company, which maintains its principal executive offices in Stamford, Connecticut. We also have offices in Singapore and Copenhagen, Denmark, through which we provide round the clock management services to our owned and chartered-in fleet. We currently have 91 shore-based personnel, including our senior management team and our office staff, who either directly or through these subsidiaries, provide the following services:

•commercial operations and technical supervision;

•safety monitoring;

•vessel acquisition; and

•financial, accounting and information technology services.

Technical Management

Technical management includes managing day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory and classification society compliance, supervising the maintenance and general efficiency of vessels, arranging our hire of qualified officers and crew, arranging and supervising drydocking and repairs, purchasing supplies, spare parts and new equipment for vessels, appointing supervisors and technical consultants, and providing technical support.

Value of Assets and Cash Requirements

The replacement costs of comparable new vessels may be above or below the book value of our fleet. The market value of our fleet may be below book value when market conditions are weak and exceed book value when markets conditions are strong. Customary with industry practice, we may consider asset redeployment, which at times may include the sale of vessels at less than their book value. The Company’s results of operations and cash flow may be significantly affected by future charter markets.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our interim unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC, which apply to interim financial statements. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues, expenses and warrants and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions.

Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. As the discussion and analysis of our financial condition and results of operations are based upon our interim unaudited condensed consolidated financial statements, they do not include all of the information on critical accounting policies normally included in consolidated financial statements. Accordingly, a detailed description of these critical accounting policies should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, filed with the SEC on March 12, ~~2020.~~2021. There have been no material changes from the “Critical Accounting Policies” previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019 except for the new accounting pronouncement adopted as of~~2020.

~~January 1, 2020 relating to the adoption of ASC 326. Please refer to Note 2 Recent Accounting Pronouncements to the condensed consolidated financial statements for further discussion.~~

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed 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 residual value of vessels, the useful lives of vessels, the value of stock-based compensation, the fair value of the debt component of the Convertible Bond Debt, the fair value of operating lease right-of-use assets, and the fair value of derivatives. Actual results could differ from those estimates.

Results of Operations for the three and nine months ended September 30, ~~2020:~~2021:

Fleet Data

We believe that the measures for analyzing future trends in our results of operations consist of the following:

Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Ownership Days 4,546 4,156 13,646 12,485
Chartered-in Days 535 931 1,664 2,937
Available Days 4,940 4,780 14,818 14,856
Operating Days 4,905 4,738 14,698 14,742
Fleet Utilization (%) 99.3 % 99.1 % 99.2 % 99.2 %


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Ownership Days	4,697		4,546		13,407		13,646
Chartered-in Days	563		535		1,718		1,664
Available Days	4,931		4,940		14,403		14,818
Operating Days	4,908		4,905		14,308		14,698
Fleet Utilization (%)	99.5	%	99.3	%	99.3	%	99.2	%

In order to understand our discussion of our results of operations, it is important to understand the meaning of the following terms used in our analysis and the factors that influence our results of operations.

•Ownership days: We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.

•Chartered-in days: We define chartered-in days as the aggregate number of days in a period during which the Company chartered-in vessels.

•Available days: We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to vessel familiarization upon acquisition, repairs, vessel upgrades or special ~~surveys.~~surveys and other reasons which prevent the vessel from performing under the relevant charter party such as surveys, medical events, stowaway disembarkation, etc. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. During the nine months ended September 30, ~~2020,~~2021, the Company completed drydock for ~~eight~~six vessels and ~~one vessel was~~two vessels were in drydock as of September 30, ~~2020.~~2021.

•Operating days: We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.

•Fleet utilization: We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning. Our fleet continues to perform at very high utilization rates.

~~Time Charter and Voyage Revenue~~

Time Charter and Voyage Revenue

Shipping revenues are highly sensitive to patterns of supply and demand for vessels of the size and design configurations owned and operated by a company and the trades in which those vessels operate. In the drybulk sector of the shipping industry, rates for the transportation of drybulk cargoes such as ores, grains, steel, fertilizers, and similar commodities, are determined by market forces such as the supply and demand for such commodities, the distance that cargoes must be transported, and the number of vessels expected to be available at the time such cargoes need to be transported. The demand for shipments is significantly affected by the state of the global economy and the conditions of certain geographical areas. The number of vessels is affected by newbuilding deliveries and by the removal of existing vessels from service, principally because of scrapping.

The mix of charters between spot or voyage charters and mid-term time charters also affects revenues. Because the mix between voyage charters and time charters significantly affects shipping revenues and voyage expenses, vessel revenues are benchmarked based on net charter hire income. Net charter hire income comprises revenue from vessels operating on time charters, and voyage revenue less voyage expenses from vessels operating on voyage charters in the spot market and charter hire expenses. Net charter hire income serves as a measure of analyzing fluctuations between financial periods and as a method of equating revenue generated from a voyage charter to time charter revenue.

The following table represents Net charter hire income (a non-GAAP measure) for the three and nine months ended September 30, ~~2020~~2021 and ~~2019.~~2020.


		For the Three Months Ended						For the Nine Months Ended							For the Three Months Ended						For the Nine Months Ended
		September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019				September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
Revenues, net	Revenues, net	68,182,301			74,110,376			$	199,952,404		$	220,891,288		Revenues, net	$	183,392,700		$	68,182,301		$	409,815,454		$	199,952,404
Less: Voyage expenses	Less: Voyage expenses	19,627,919			19,446,294			69,960,025			66,259,590			Less: Voyage expenses	$	30,272,949		$	19,627,919		$	81,410,602		$	69,960,025
Less: Charter hire expenses	Less: Charter hire expenses	5,060,503			11,345,615			15,820,809			34,017,002			Less: Charter hire expenses	$	10,723,737		$	5,060,503		$	25,373,501		$	15,820,809
Net charter hire income	Net charter hire income	$	43,493,879		$	43,318,467		$	114,171,570		$	120,614,696		Net charter hire income	$	142,396,014		$	43,493,879		$	303,031,351		$	114,171,570

% Net charter hire income from	% Net charter hire income from													% Net charter hire income from
Time charters	Time charters	51		%	69		%	52		%	62		%	Time charters	55		%	51		%	55		%	52		%
Voyage charters	Voyage charters	49		%	31		%	48		%	38		%	Voyage charters	45		%	49		%	45		%	48		%

Net income/(loss)

For the three months ended September 30, 2021, the Company reported net income of $78.3 million, or basic and diluted income of $6.12 per share and $4.92 per share, respectively. In the comparable quarter of 2020, the Company reported a net loss of $11.2 million, or basic and diluted loss of $1.09 per share.

For the nine months ended September 30, 2021, the Company reported net income of $97.4 million, or basic and diluted income of $7.96 per share and $6.34 per share, respectively, compared to a net loss of $35.2 million, or basic and diluted loss of $3.42 per share for the nine months ended September 30, 2020.

Revenues

Our revenues are derived from time and voyage charters. Net time and voyage charter revenues for the three months ended September 30, ~~2020~~2021 were ~~$68.2~~$183.4 million compared with ~~$74.1~~$68.2 million recorded in the comparable quarter in ~~2019.~~2020. The ~~decrease~~increase in revenues was primarily attributable to ~~lower~~higher charter rates as a result of ~~COVID-19 and lower chartered-in days offset by an~~the market recovery with increase in ~~owned days due to the acquisition of six Ultramax vessels in the second half of 2019. The available days~~demand for ~~the three months ended September 30, 2020 were impacted by offhire days relating to delays in crew changes as a result of COVID-19.~~drybulk products.

Net time and voyage charter revenues for the nine months ended September 30, 2021 and 2020 ~~and 2019~~ were ~~$200.0~~$409.8 million and ~~$220.9~~$200.0 million, respectively. The ~~decrease~~increase in revenues was primarily due to ~~lower~~higher charter rates offset by a ~~higher number of freight voyages performed, which gross up both revenue and voyage expenses. The~~decrease in available days ~~remained flat year over year.~~due to fewer owned days.

Voyage expenses

To the extent that we employ our vessels on voyage charters, we will incur expenses that include bunkers, port charges, canal tolls and cargo handling operations, as these expenses are borne by the vessel owner on voyage charters. As is common in the shipping industry, we pay commissions ranging from 1.25% to 5.50% to unaffiliated ship brokers associated with the charterers, depending on the number of brokers involved with arranging the charter. Bunkers, port charges, and canal tolls primarily increase in periods during which vessels are employed on voyage charters because these expenses are for the ~~vessel's~~vessel owner's account. Voyage expenses for the three months ended September 30, 2021 and 2020 were $30.3 million and $19.6 million, ~~compared to $19.4 million in the comparable quarter in 2019.~~respectively. The increase in voyage expenses was ~~mainly attributable~~primarily due to an increase in ~~the number of voyage charters performed offset by a decrease in~~ bunker consumption expense ~~due to lower~~as bunker fuel prices increased in the current year as well as an increase in voyage charter business and an increase in broker commission expense as a result of ~~COVID-19.~~

the increase in revenues.

Voyage expenses for the nine months ended September 30, 2021 and 2020 ~~and 2019~~ were ~~$70.0~~$81.4 million and ~~$66.3~~$70.0 million, respectively. The increase in voyage expenses was primarily due to an increase in ~~the number of voyage charters performed offset by a decrease in~~ bunker consumption expense ~~due to lower bunker prices~~and an increase in broker commission expense as a result of ~~COVID-19.~~

the increase in revenues.

Vessel operating expenses

Vessel operating expenses for the three months ended September 30, ~~2020~~2021 were ~~$21.7~~$28.1 million compared to ~~$20.0~~$21.7 million in the comparable quarter in ~~2019.~~2020. The increase in vessel operating expenses was primarily attributable to increases in lubes expense as a result of an increase in ~~ownership days after~~prices as well as higher inventory levels and vessel start-up expenses as the ~~purchase of six Ultramax~~Company purchased two vessels ~~in the second half of 2019, offset by the sale of the vessel Goldeneye~~ in the third quarter of ~~2020.~~2021. The Company continues to incur higher costs related to the delivery of stores and spares, as well as crew changes as a result of the ongoing COVID-19 pandemic. The ownership days for the three months ended September 30, 2021 and 2020 were 4,697 and ~~2019 were~~ 4,546, ~~and 4,156,~~ respectively.

Vessel expenses for the nine months ended September 30, 2021 and 2020 ~~and 2019~~ were ~~$65.7~~$73.3 million and ~~$60.0~~$65.7 million, respectively. The increase in vessel expenses was primarily attributable to an increase in ~~ownership days after the purchase~~lubes expense as a result of ~~six Ultramax vessels offset by the sale of the~~an increase in prices, consumption due to increase in vessel ~~Thrasher~~speeds as well as higher inventory levels, increase in ~~the second quarter of 2019, the sale of the Kestrel in the third quarter of 2019,~~stores and ~~the sale of the~~spares delivery costs, crew wages, crew changes due to ongoing COVID-19 pandemic, and vessel ~~Goldeneye in the third quarter of 2020. Additionally,~~start-up expenses as the Company ~~incurred $0.7 million in additional costs relating to COVID-19 for procurement~~purchased and took delivery of ~~personal protective equipment, test kits and crew changes.~~eight vessels during 2021. The ownership days for the nine months ended September 30, 2021 and 2020 were 13,407 and ~~2019 were~~ 13,646, ~~and 12,485,~~ respectively.

We believe daily vessel operating expenses are a good measure for comparative purposes in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation.

~~Average daily vessel operating expenses for our fleet for the three months ended September 30, 2020 and 2019 were $4,784 and $4,801, respectively.~~

~~Average daily vessel operating expenses for our fleet for the nine months ended September 30, 2020 and 2019 were $4,813 and $4,806, respectively.~~

Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores and related inventory, tonnage taxes, pre-operating costs associated with the delivery of acquired vessels, including providing the newly acquired vessels with initial provisions and stores, and other miscellaneous expenses.

Other factors beyond our control, some of which may affect the shipping industry in general, may cause the operating expenses of our vessels to increase, including, for instance, developments relating to market prices for crew, insurance and petroleum-based lubricants and supplies.

Charter hire expenses

The charter hire expenses for the three months ended September 30, ~~2020~~2021 were ~~$5.1~~$10.7 million compared to ~~$11.3~~$5.1 million in the comparable quarter in ~~2019.~~2020. The ~~decrease~~increase in charter hire expenses was principally due to ~~a decrease~~an increase in ~~chartered-in days as well as~~ charter hire rates due to ~~COVID-19.~~improvement in the charter hire market and a marginal increase in chartered-in days. The total chartered-in days for the three months ended September 30, ~~2020~~2021 were ~~535~~563 compared to ~~931~~535 for the comparable quarter in the prior year. The Company currently charters in ~~three~~four Ultramax vessels on a long term basis with remaining lease ~~term~~terms of approximately one year.

The charter hire expenses for the nine months ended September 30, 2021 and 2020 ~~and 2019~~ were ~~$15.8~~$25.4 million and ~~$34.0~~$15.8 million, respectively. The ~~decrease~~increase in charter hire expenses was primarily due to ~~a decrease~~an increase in charter hire rates due to improvement in the charter hire market and an increase in the number of chartered-in ~~days as well as charter hire rates.~~days. The total chartered-in days for the nine months ended September 30, 2021 and 2020 were 1,718 and ~~2019 were~~ 1,664, ~~and 2,937,~~ respectively.

Depreciation and amortization

For the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, total depreciation and amortization expense was ~~$12.6~~ $13.6

million and ~~$10.1~~$12.6 million, respectively. Total depreciation and amortization expense for the three months ended September 30, ~~2020~~2021 includes ~~$10.8~~$11.4 million of vessel and other fixed ~~asset~~assets depreciation and ~~$1.8~~$2.2 million relating to the amortization of deferred drydocking costs. Comparable amounts for the three months ended September 30, ~~2019~~2020 were ~~$8.4~~$10.8 million of vessel and other fixed ~~asset~~assets depreciation and ~~$1.7~~$1.8 million of amortization of deferred drydocking costs. The increase in depreciation expense is due to anthe acquisition of eight Ultramax vessels during the year. The increase in ~~the cost base of our owned fleet due~~drydock expense is related to ~~the capitalization of scrubbers and BWTS on our vessels, and the purchase of six Ultramax vessels in the second half of 2019, marginally offset by the sale of three vessels. The increase in~~

~~drydock amortization was due to the completion of fourteen~~nine additional drydocks completed since the third quarter of ~~2019.~~2020.

For the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, total depreciation and amortization expense was ~~$37.6~~$39.2 million and ~~$29.2~~$37.6 million, respectively. Total depreciation and amortization expense for the nine months ended September 30, ~~2020~~2021 includes ~~$32.1~~$33.0 million of vessel and other fixed asset depreciation and ~~$5.5~~$6.2 million relating to the amortization of deferred drydocking costs. Comparable amounts for the nine months ended September 30, ~~2019~~2020 were ~~$24.8~~$32.1 million of vessel and other fixed asset depreciation and ~~$4.4~~$5.5 million of amortization of deferred drydocking costs. The increase in depreciation expense is due to the acquisition of eight Ultramax vessels during the year. The increase in drydock expense is related to nine additional drydocks completed since the third quarter of 2020.

~~The cost of all vessels is depreciated on a straight-line basis over the expected useful life of each vessel.~~ Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard to the original owner. Furthermore, we estimate the residual values of our vessels to be $300 per lightweight ton, which we believe is common in the drybulk shipping industry. Drydocking relates to our regularly scheduled maintenance program necessary to preserve the quality of our vessels as well as to comply with international shipping standards and environmental laws and regulations. Management anticipates that vessels are to be drydocked every two and a half years for vessels older than 15 years and every five years for vessels younger than 15 years, accordingly, these expenses are deferred and amortized over ~~that period.~~these respective periods.

General and administrative expenses

Our general and administrative expenses include onshore vessel administration related expenses, such as legal and professional expenses, administrative and other expenses including payroll and expenses relating to our executive officers and office staff, office rent and expenses, directors’ fees, and directors and officers insurance. General and administrative expenses also include stock-based compensation expenses.

General and administrative expenses for the three months ended September 30, 2021 and 2020 were $7.9 million and ~~2019 were~~ $8.0 million, respectively. General and ~~$8.5~~administrative expenses include a stock-based compensation component of $0.8 million and $0.7 million for the three months ended September 30, 2021 and 2020, respectively.

General and administrative expenses for the nine months ended September 30, 2021 and 2020 were $23.6 million and $22.7 million, respectively. These general and administrative expenses include a stock-based compensation component of ~~$0.7~~$2.2 million and ~~$1.2~~$2.3 million for ~~the three months ended September 30,~~2021 and 2020, ~~and 2019,~~ respectively. The ~~decrease~~increase in general and administrative expenses ~~was mainly attributable~~relates to ~~decreases~~an increase in ~~stock-based~~office expenses as our employees returned to our offices, compensation ~~expense.~~expenses and fees for legal and professional services.

~~General and administrative expenses~~Other operating expense

Other operating expense for the three and nine months ended September 30, ~~2020 and 2019 were $22.7~~2021 was $0.8 million and ~~$24.9~~$2.3 million, respectively. These general and administrative expenses include a stock-based compensation component of $2.3 million and $3.8 million for 2020 and 2019, respectively. The decrease in general and administrative expenses was mainly attributable to decreases in stock-based compensation expense, corporate travel and office expenses due to COVID-19.

~~Operating lease impairment~~

~~During~~In March 2021, the ~~second quarter of 2020, the Company determined~~U.S. government began investigating an allegation that ~~there were impairment indicators present for~~ one of our ~~chartered-in~~vessels may have improperly disposed of ballast water that entered the engine room bilges during a repair. The Company posted a surety bond as security for any fines and penalties. Other operating expense consists of expenses incurred relating to this incident, which include legal fees, surety bond expenses, vessel ~~contracts~~offhire, crew changes and as a result, we recorded an operating lease impairment of $0.4 million in the second quarter of 2020. The operating lease impairment was included as a component of Operating income/(loss) in our Condensed Consolidated Statement of Operations for the nine months ended September 30, 2020.

~~Loss/(gain) on sale of vessels~~

For the three months ended September 30, 2020 and 2019, the Company recorded a loss of $0.4 million and a gain of $1.0 million, respectively. The loss for the three months ended September 30, 2020 includes a loss of approximately $0.1 million in connection with the sale of the vessel Goldeneye and a loss of $0.3 million in connection with the pending sale of the vessel Skua, which was classified as a vessel held for sale as of September 30, 2020. The vessel is expected to be delivered to its buyers in the fourth quarter of 2020. The gain for the three months ended September 30, 2019 includes a gain of $1.0 million in connection with the sale of the vessel Kestrel.

For the nine months ended September 30, 2020 and 2019, the Company recorded a loss of $0.4 million and a gain of $6.0 million, respectively. The loss for the nine months ended September 30, 2020 includes a loss of approximately $0.1 million in connection with the sale of the vessel Goldeneye and a loss of $0.3 million in connection with the pending sale of the vessel Skua, which was classified as a vessel held for sale as of September 30, 2020. The gain for the nine months ended September 30, 2019 includes a gain of $6.0 million, in connection with the sales of the vessels Condor, Merlin, Thrasher, and Kestrel.travel costs.

Interest expense

Our interest expense for the three months ended September 30, 2021 and 2020 ~~and 2019~~ was ~~$9.0~~$8.5 million and ~~$8.1~~$9.0 million, respectively. The ~~increase~~decrease in interest expense is ~~primarily~~mainly due to ~~an increase in our~~lower outstanding debt under the ~~Convertible~~Norwegian Bond ~~Debt~~ and the New Ultraco Debt Facility ~~offset by a decrease~~as we repaid the $55.0 million revolver loan under the New Ultraco Debt Facility as well as quarterly debt amortization of the term loan. In addition, we repaid $15.0 million under the Super Senior Facility in ~~interest rates. Please refer to Note 4 Debt to~~ the ~~condensed consolidated financial statements.~~first quarter of 2021.

The interest expense for the nine months ended September 30, 2021 and 2020 ~~and 2019~~ was ~~$26.9~~$25.6 million and ~~$21.6~~$26.9 million, respectively. The ~~increase~~decrease in interest expense iswas primarily due to ~~an increase~~a decrease in ~~our~~ outstanding debt under the ~~Convertible~~Norwegian Bond Debt and a decrease in interest rates as well as the outstanding debt under the New Ultraco Debt ~~Facility offset by a decrease in interest rates.~~Facility.

Amortization of debt issuance costs is included in interest expense. These financing costs relate to costs associated with our various outstanding debt facilities. For the three months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the amortization of debt issuance costs was ~~$1.6~~$2.0 million and ~~$1.1~~$1.6 million, respectively. For the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, the amortization of debt issuance costs was ~~$4.7~~$5.4 million and ~~$2.3~~$4.7 million, respectively. The interest expense for the three ~~months ended September 30, 2020~~ and ~~2019 includes $1.0 million and $0.6 million, respectively of interest expense representing the amortization of the equity component of the Convertible Bond Debt. The interest expense for the~~ nine months ended September 30, ~~2020 and 2019~~2021 includes ~~$2.9~~$1.1 million and ~~$0.6~~$3.2 million, respectively of interest expense representing the amortization of the equity component of the Convertible Bond Debt. Please refer to Note 4 Debt to the condensed consolidated financial statements for further information.

Realized and unrealized loss/(gain) on derivative instruments, net

Realized and unrealized loss on derivative instruments, net for the three months ended September 30, 2021 and 2020 was $9.0 million and $3.0 million, respectively. The increase in realized and unrealized losses is primarily related to losses incurred on our frieght forward agreements as a result of tthe sharp increase in charter hire rates.

Realized and unrealized loss on derivative instruments, net for the nine months ended September 30, 2021 was $45.6 million compared to a realized and unrealized gain on derivatives instruments, net of $4.0 million for the nine months ended September 30, 2020. The increase in realized and unrealized losses on derivative instruments was primarily due to the sharp increase in charter hire rates. Please refer to Note 5 Derivative Instruments to the condensed consolidated financial statements for further information.

Loss on debt extinguishment

During the third quarter of 2021, the Company cancelled the Super Senior Facility. There was no outstanding debt under the Super Senior Facility. The Company recorded $0.1 million as loss on debt extinguishment in its Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021.

Effects of Inflation

We do not believe that inflation has had or is likely, in the foreseeable future, to have a significant impact on vessel operating expenses, drydocking expenses or general and administrative expenses.

Liquidity and Capital Resources

Nine Months Ended
September 30, 2020 September 30, 2019
Net cash (used in)/provided by operating activities $ (2,346,990) $ 18,954,210
Net cash used in investing activities (17,529,527) (100,391,287)
Net cash provided by financing activities 46,027,292 104,396,889
Net increase in cash, cash equivalents and restricted cash 26,150,775 22,959,812
Cash, cash equivalents and restricted cash at beginning of period 59,130,285 78,163,638
Cash, cash equivalents and restricted cash at end of period $ 85,281,060 $ 101,123,450


	Nine Months Ended
	September 30, 2021		September 30, 2020
Net cash provided by/(used in) operating activities	$	120,914,949	$	(2,346,990)
Net cash used in investing activities	(106,767,451)		(17,529,527)
Net cash provided by financing activities	22,648,099		46,027,292
Net increase in cash, cash equivalents and restricted cash	36,795,597		26,150,775
Cash, cash equivalents and restricted cash at beginning of period	88,848,771		59,130,285
Cash, cash equivalents and restricted cash at end of period	$	125,644,368	$	85,281,060

Net cash ~~used in~~provided by operating activities during the nine months ended September 30, ~~2020~~2021 was ~~$2.3~~$120.9 million compared to net cash ~~provided by~~used in operating activities of ~~$19.0~~$2.3 million for the nine months ended September 30, ~~2019.~~2020. The cash flows from operating activities ~~decreased~~increased as compared to the same period in the prior year primarily due to the ~~decrease~~increase in charter hire ~~rates due to COVID-19 and the increase in drydock expenditures.~~rates.

Net cash used in investing activities during the nine months ended September 30, 2021 and 2020 ~~and 2019~~ was ~~$17.5~~$106.8 million and ~~$100.4~~$17.5 million, respectively. During the nine months ended September 30, ~~2020,~~2021, the Company purchased eight vessels for $107.8 million and paid ~~$25.2~~$2.2 million as an advance for the purchase of one vessel delivered in the fourth quarter of 2021. The Company paid $4.6 million for the purchase ~~and installation~~ of ~~scrubbers and~~ ballast water treatment systems on our fleet. ~~The Company also received insurance proceeds of $3.7 million for hull and machinery claims.~~ Additionally, the Company paid ~~$0.6~~$1.6 million ~~towards~~for vessel improvements. This use of cash was partially offset by the proceeds from the sale of one vessel for net proceeds of $4.6 million. During the nine months ended September 30, 2019, the Company purchased four Ultramax vessels for $81.4 million, of which $2.0 million was paid as an advance as of December 31, 2018 and $6.0 million was paid as an advance for the purchase of three additional vessels which were delivered in the fourth quarter of 2019. The proceeds from the sale of four vessels were $29.6$9.2 million. The Company also received ~~$2.1~~insurance proceeds of $0.2 million for hull and machinery claims. ~~Additionally, during the nine months ended September 30, 2019, the Company paid $44.5 million for the purchase and installation of scrubbers and ballast water treatment systems on our fleet.~~ Please refer to Note 3 Vessels to the condensed consolidated financial statements for further information.

Net cash provided by financing activities during the nine months ended September 30, 2021 and 2020 ~~and 2019~~ was ~~$46.0~~$22.6 million and ~~$104.4~~$46.0 million, respectively. During the nine months ended September 30, ~~2020,~~2021, the Company received $55.0 million in proceeds from the revolver loan under the New Ultraco Debt Facility, ~~$22.6~~$16.5 million in proceeds from the New Ultraco Debt Facility, ~~and $15.0~~$24.0 million in proceeds from the ~~Super Senior Facility.~~Holdco Revolving Credit Facility and $27.2 million in net proceeds from the ATM Offering. The Company repaid ~~$20.9~~$24.3 million of the New Ultraco Debt Facility, ~~$20.0~~$4.0 million of the Norwegian Bond Debt, $55.0 million of the revolver loan under the New Ultraco Debt Facility and ~~$4.0~~$15.0 million of the ~~Norwegian Bond Debt. Additionally,~~revolver loan under the Super Senior Facility. The Company also paid ~~$1.2~~$1.0 million to settle net share equity ~~awards, and $0.4~~awards. Additionally, the Company paid $0.3 million ~~as debt issuance costs~~to the lenders of the Holdco Revolving Credit Facility, $0.3 million to the lenders of the New Ultraco Debt Facility. During the nine months ended September 30, 2019, the Company completed a debt refinancing transaction and received net proceeds of $153.4 million by entering into new term and revolver loan facilities under the New Ultraco Debt Facility and ~~repaid all outstanding debt under the Original Ultraco Debt Facility and New First Lien Facility~~$0.3 million of ~~$82.6 million and $65.0 million, respectively. The Company received $112.5 million in proceeds from the Convertible Bond Debt, net of debt discount. The Company paid $3.2 million as debt issuance~~financing costs related to the ~~lenders under the New Ultraco Debt Facility. Additionally, the Company paid $0.9 million to settle net share~~ equity ~~awards.~~offerings in December 2020.

Our principal sources of funds are operating cash flows, long-term bank borrowings and borrowings under our revolving credit facility. Our principal use of funds is capital expenditures to establish and grow our fleet, maintain the quality of our vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and repay interest and principal on our outstanding loan facilities.

Summary of Liquidity and Capital Resources

As of September 30, ~~2020,~~2021, our cash and cash equivalents including restricted cash was ~~$85.3~~$125.6 million, compared to ~~$59.1~~$88.8 million at December 31, ~~2019.~~2020. The Company had restricted cash of ~~$1.9~~$25.6 million and ~~$5.5~~$18.9 million as of September 30, ~~2020~~2021 and December 31, ~~2019~~2020, respectively.

As of September 30, ~~2020,~~2021, the Company’s debt consisted of ~~$184.0~~$176.0 million in outstanding bonds under the Norwegian Bond Debt, net of ~~$3.1 million of debt discount and debt issuance costs, the revolver loan under the Super Senior Facility of $15.0 million, net of $0.1~~$1.6 million of debt discount and debt issuance costs, the New Ultraco Debt Facility of ~~$174.2~~$158.7 million, net of ~~$3.5~~$2.8 million of debt discount and debt issuance costs, the ~~revolver loan under the New Ultraco Debt Facility of $35.0 million, and the~~ Convertible Bond Debt of $114.1 million, net of ~~$18.5~~$14.3 million of debt discount and issuance ~~costs.~~

The ongoing COVID-19 pandemic resulted in the decline in charter hire rates, which impacted our revenues and cash flow from operations. As mentioned above, the total cash used in operations for the nine months ended September 30, 2020 was $2.3 million. Although the cash used in operations for the first six months of 2020 was $15.2 million, the charter hire rates have rebounded during the third quartercosts, and the ~~Company generated positive operating cash flows~~Holdco Revolving Credit Facility of ~~$12.9 million. Looking forward~~$24.0 million, net of $0.2 million of debt issuance costs.

On October 1, 2021, we entered into ~~the fourth quarter, the charter hire rates are expected~~a new credit agreement that provides for an aggregate principal amount of $400.0 million, which consists of (i) a term loan facility in an aggregate principal amount of $300.0 million and (ii) a revolving credit facility in an aggregate principal amount of $100.0 million to be ~~higher than~~used for refinancing the ~~first half of~~outstanding debt including accrued interest and commitment fees under the ~~year. The Company has adopted certain cost saving measures such as lower~~existing facilities and for general corporate ~~travel and a freeze on onshore hiring for one year. The~~purposes. Pursuant to the credit agreement, the Company borrowed ~~additional~~$350.0 million and together with cash on hand repaid the outstanding debt, ~~of $22.6 million~~accrued interest and commitment fees under the ~~New Ultraco Debt Facility by adding two vessels to the debt collateral package, which were previously unlevered. The Company also borrowed $70.0 million by fully drawing on its~~ existing ~~revolving credit facilities under the New Ultraco Debt Facility and Super Senior Facility. The Company applied and received extensions~~facilities. Please see Note 11 Subsequent Events for BWTS installation on 18 of our vessels, which allowed us to postpone our capital expenditure outlays for up to one year or more. Additionally, the Company cancelled the BWTS installation orders of three of its vessels.additional information.

We believe that our current financial resources, improved charter hire rates for the ~~second half~~balance of the year and cash generated from operations will be sufficient to meet our ongoing business needs and other obligations over the next twelve months. However, our ability to generate sufficient cash depends on many factors beyond our control including, among other things, the ~~impact and duration of the COVID-19 pandemic and an improvement in~~general charter ~~rates.~~

rate environment.

Capital Expenditures

Our capital expenditures relate to the purchase of vessels and capital improvements to our vessels, which are expected to enhance the revenue earning capabilities and safety of the vessels.

In addition to acquisitions that we may undertake in future periods, the other major capital expenditures include funding the Company’s program of regularly scheduled drydocking, which is necessary to comply with international shipping standards and environmental laws and regulations. Although the Company has some flexibility regarding the timing of its drydocking, the costs are relatively predictable. The Company anticipates that vessels will be drydocked every five years for vessels younger than 15 years and every two and a half years for vessels older than 15 years. We anticipate that we will fund these costs with cash from

operations and that these drydocks will require us to reposition these vessels from a discharge port to shipyard facilities, which will reduce our available days and operating days during that period.

Drydocking costs incurred are deferred and amortized to expense on a straight-line basis over the period through the date of the next scheduled drydocking for those vessels. During the nine months ended September 30, 2021, six of our vessels completed drydock and two vessels were in drydock as of September 30, 2021, and we incurred drydocking expenditures of $10.7 million. In the nine months ended September 30, 2020, eight of our vessels completed drydock and ~~one of our vessels was still in drydock as of September 30, 2020, and~~ we incurred drydocking expenditures of $10.8 million. In the nine months ended September 30, 2019, five of our vessels completed drydock and three vessels were still in drydock as of September 30, 2019, and we incurred drydocking expenditures of $6.1 million.

The following table represents certain information about the estimated costs for anticipated vessel drydockings, ballast water treatment systems, and scrubber installations in the next four quarters, along with the anticipated off-hire days:

Projected Costs (2) (in millions)
Quarter Ending
Off-hire Days(1)
BWTS
Scrubbers (3)
Drydocks
December 31, 2020 160 $ 0.4 $ 2.6 $ 2.3
March 31, 2021 104 0.8 — 4.6
June 30, 2021 144 1.5 — 2.4
September 30, 2021 155 3.1 — 2.3


		Projected Costs (1) (in millions)
Quarter Ending	Off-hire Days(2)	BWTS		Drydocks		Vessel Upgrades(3)
December 31, 2021	319	$	3.3	$	5.5	$	1.2
March 31, 2022	252	2.4		4.6		0.8
June 30, 2022	189	0.4		1.2		0.4
September 30, 2022	76	—		0.2		—


(1) Actual duration of off-hire days will vary based on a number of factors including but not limited to the positioning of the vessels, condition of the vessels, yard schedules. Our offhire days are also impacted by unforeseen circumstances.
~~(2)~~ Actual costs will vary based on various factors, including where the drydockings are actually performed.
(2) Actual duration of off-hire days will vary based on the age and condition of the vessel, yard schedules and other factors.
(3) ~~The projected scrubber payments relate~~Vessel upgrades represents capex relating to items such as high-spec low friction hull paint which improves fuel efficiency and reduces fuel costs, NeoPanama Canal chock fittings enabling vessels to carry additional cargo through the ~~remaining amounts owed to the vendors which~~new Panama Canal locks, as well as other retrofitted fuel-saving devices. Vessel upgrades are ~~accrued as of September 30, 2020 as part of Vessels~~discretionary in nature and ~~vessel improvements.~~evaluated on a business case-by-case basis.

Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Other Contingencies

We refer you to Note 7 Commitments and Contingencies to our condensed consolidated financial statements for a discussion of our ~~contingencies related to claim litigation.~~contingencies. If an unfavorable ruling were to occur in these matters, there exists the possibility of a material adverse impact on our business, liquidity, results of operations, financial position and cash flows in the period in which the ruling occurs. The potential impact from legal proceedings on our business, liquidity, results of operations, financial position and cash flows could change in the future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes from the market risk disclosure set forth in the section entitled “Quantitative and Qualitative Disclosures about Market Risk” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, filed with the SEC on March 12, ~~2020.~~2021. For information regarding our use of certain derivative instruments, including interest rate swaps, forward freight agreements and bunker swaps, see Note 5 Derivatives Instruments to the condensed consolidated financial statements.

ITEM 4. CONTROLS AND PROCEDURES

Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as

appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of September 30, ~~2020,~~2021, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, ~~2020.~~2021.

Changes in Internal Controls.

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-(f) under the Exchange Act) occurred during the quarter ended September 30, ~~2020~~2021 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. We have not experienced any material impact to our internal controls over financial reporting and all of our onshore employees have returned to our offices and are now working in our offices at least on a partial basis. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

PART II: OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

From time to time, we are involved in various disputes and litigation matters that arise in the ordinary course of our business, principally personal injury and property casualty claims. Those claims, even if lacking merit, could result in the expenditure by us of significant financial and managerial resources. Information about legal proceedings is set forth in Note 7 Commitments and Contingencies to the condensed consolidated financial statements and is incorporated by reference herein.

ITEM 1A – RISK FACTORS

AsThere have been no material changes from the “Risk Factors” previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 under “The COVID-19 or other pandemics, could have a material adverse impact on our business, results of operations, or financial condition,” we believe the COVID-19 outbreak has negatively affected our business and could continue to do so. However, the extent to which the COVID-19 outbreak will adversely impact our business, financial condition and results of operations is highly uncertain and cannot be predicted. The global spread of COVID-19 has created significant worldwide operational volatility, uncertainty and disruption.

The ongoing pandemic resulted in the decline in charter hire rates which impacted our revenues and cash flow from operations. The Company experienced some delays in cargo operations due to port restrictions and additional protocols and cancellation of a few cargo contracts. However, the Company was able to secure alternative business for its vessels upon cancellation at the prevailing charter rates. As a result of the spread of COVID-19, the Company has incurred some additional crewing expenses relating to procurement of personal protective equipment, COVID-19 testing, and crew travel, which is included in our vessel expenses for the three months and nine months ended September 30, 2020, in our Condensed Consolidated Statement of Operations. Additionally, the Company experienced some delays in drydocking and BWTS installations, operations and crew changes due to quarantine regulations and COVID-19 testing and resulting offhire days.

The extent to which COVID-19 will adversely impact our business, financial condition and results of operations will depend on numerous evolving factors, which are highly uncertain, rapidly changing and cannot be predicted, including:

•~~the duration and scope of the outbreak;~~

•governmental, business and individual actions that have been and continue to be taken in response to the outbreak, including travel restrictions, quarantines, social distancing, work-at-home, stay-at-home and shelter-in-place orders and shut-downs;

•~~the impact of the outbreak on the financial markets and economic activity generally;~~

•~~the effect of the outbreak on our charterers and other business partners;~~

•~~our ability to access the capital markets and our usual sources of liquidity on reasonable terms;~~

•~~our ability to comply~~filed with the ~~financial covenants in our debt agreements if a material economic downturn results in increased indebtedness or substantially lower operating results;~~

•~~potential vessel impairment charges;~~

•~~increased cybersecurity risks as a result of remote working conditions;~~

•~~our ability during the outbreak to provide our services, including the health and well being of our employees; and~~

•~~the ability of our charterers to pay for our services during and following the outbreak.~~

The COVID-19 outbreak has significantly increased financial and economic volatility and uncertainty. A continued slowdown or downturn in the economy has had, and we expect will continue to have, a negative impactSEC on demand for transportation of dry bulk products. All of the foregoing has and will continue to impact our business, financial condition, results of operations and forward-looking expectations. Furthermore, modified processes, procedures and controls could be required to respond to changes in our business environment, as our employees are required to work from home.March 12, 2021. The ~~significant increase in~~

remote working of our employees may exacerbate certain risks to our business, including an increased demand for information technology resources, increased risk of malicious technology-related events, such as cyberattacks and phishing attacks, and increased risk of improper dissemination of personal, proprietary or confidential information.

The potential effects of COVID-19 could also heighten the risks disclosed in many of our risk factors that are included in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2019, including as a result of, but not limited to, the factors described above. Furthermore, the risks described in the Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 are not the only risks ~~we face.~~facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our 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.

ITEM 6 – Exhibits

EXHIBIT INDEX


3.1			Second Amended and Restated By-Laws of Eagle Bulk Shipping Inc., dated as of October 15, 2014, incorporated by reference to Exhibit 3.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831.
3.2			Third Amended and Restated Articles of Incorporation of Eagle Bulk Shipping Inc., dated as of August 4, 2016, incorporated by reference to Exhibit 3.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on August 4, 2016; File No. 001-33831.
3.3			Article of Amendment to Third Amended and Restated Articles of Incorporation of Eagle Bulk Shipping Inc., incorporated by reference to Exhibit 3.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on September 14, 2020; File No. 001-33831.
4.1			Form of Specimen Stock Certificate of Eagle Bulk Shipping Inc., incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831.
4.2			Form of Specimen Warrant Certificate of Eagle Bulk Shipping Inc., incorporated by reference to Exhibit 4.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831.
4.3			Amended and Restated Registration Rights Agreement, dated as of May 13, 2016, by and between Eagle Bulk Shipping Inc. and the Holders party thereto, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on May 17, 2016; File No. 001-33831.
4.4			Indenture, dated July 29, 2019, by and between Eagle Bulk Shipping Inc. and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on August 2, 2019).
4.5			Form of Note representing the Company's 5.00% Convertible Senior Notes due 2024 (included as Exhibit A to the Indenture filed as Exhibit 4.1) (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on August 2, 2019).
31.1*			Sarbanes-Oxley Section 302 Certification of Principal Executive Officer.
31.2*			Sarbanes-Oxley Section 302 Certification of Principal Financial Officer.
32.1**			Section 1350 Certification of Principal Executive Officer.
32.2**			Section 1350 Certification of Principal Financial Officer.
101*			The following materials from Eagle Bulk Shipping Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2020,~~2021, formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets (unaudited) as of September 30, ~~2020~~2021 and December 31, ~~2019,~~2020, (ii) Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, (iii) Condensed Consolidated Statements of Comprehensive ~~loss~~income/(loss) (unaudited) for the three and nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, (iv) Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the ~~three and~~ nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, (v) Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, ~~2020~~2021 and ~~2019,~~2020, and (vi) Notes to Condensed Consolidated Financial Statements (unaudited).

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements 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.

EAGLE BULK SHIPPING INC.

By: /s/ Gary Vogel

--------------------------------------------------------------------------------

Gary Vogel

Chief Executive Officer

(Principal executive officer of the registrant)

Date: November ~~6, 2020~~8, 2021

By: /s/ Frank De Costanzo

--------------------------------------------------------------------------------

Frank De Costanzo

Chief Financial Officer

(Principal financial officer of the registrant)

Date: November ~~6, 2020~~8, 2021


		Projected Costs (2) (in millions)
Quarter Ending	Off-hire Days(1)	BWTS		Scrubbers (3)		Drydocks
December 31, 2020	160	$	0.4	$	2.6	$	2.3
March 31, 2021	104	0.8		—		4.6
June 30, 2021	144	1.5		—		2.4
September 30, 2021	155	3.1		—		2.3