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, 2021March 31, 2022
OR
☐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 Islands98-0453513
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareEGLEThe 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☒No☐
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☒No☐
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☐No ☒
Number of shares of registrant’s common stock outstanding as of November 5, 2021: 13,590,961May 4, 2022: 13,692,906



TABLE OF CONTENTS
Page
PART IFINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS (Unaudited)
F-1
F-2
F-3
F-4
F-65
F-76
ITEM 2.
1
ITEM 3.
1210
ITEM 4.
1210
PART IIOTHER INFORMATION
ITEM 1.
1411
ITEM 1A.
1411
ITEM 2.
1411
ITEM 3.
1411
ITEM 4.
1411
ITEM 5.
1411
ITEM 6.
1512
1613



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, 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 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;conditions, including the current conflict between Russia and Ukraine, which may impact our ability to retain and source crew, and in turn, could adversely affect our revenue, expenses, and profitability; (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 dockingdrydocking 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, 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
March 31, 2022 and December 31, 2021
(in U.S. dollarsIn thousands, except share data and per share data)par values)
September 30, 2021December 31, 2020
(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents$100,011,694 $69,927,594 
Restricted cash - current25,557,674 18,846,177 
Accounts receivable, net of a reserve of $2,169,958 and $2,357,191, respectively24,243,815 13,843,480 
Prepaid expenses4,638,401 3,182,815 
Inventories17,091,901 11,624,833 
Collateral on derivatives31,369,664 — 
Other current assets1,689,972 839,881 
Total current assets204,603,121 118,264,780 
Noncurrent assets: 
Vessels and vessel improvements, at cost, net of accumulated depreciation of $206,815,553 and $177,771,755, respectively898,405,068 810,713,959 
Advance for vessel purchase2,200,000 3,250,000 
Operating lease right-of-use assets22,845,697 7,540,871 
Other fixed assets, net of accumulated depreciation of $1,346,243 and $1,137,562, respectively309,625 489,179 
Restricted cash - noncurrent75,000 75,000 
Deferred drydock costs, net28,343,436 24,153,776 
Advances for ballast water systems and other assets5,875,314 2,639,491 
Total noncurrent assets958,054,140 848,862,276 
Total assets$1,162,657,261 $967,127,056 
LIABILITIES & STOCKHOLDERS' EQUITY 
Current liabilities: 
Accounts payable$15,169,624 $10,589,970 
Accrued interest7,075,532 4,690,135 
Other accrued liabilities14,660,495 11,747,064 
Fair value of derivatives - current24,381,090 481,791 
Current portion of operating lease liabilities21,094,309 7,615,371 
Unearned charter hire revenue17,045,647 8,072,295 
Holdco Revolving Credit Facility, net of debt issuance costs23,821,677 — 
Current portion of long-term debt42,666,521 39,244,297 
Total current liabilities165,914,895 82,440,923 
Noncurrent liabilities:
Norwegian Bond Debt, net of debt discount and debt issuance costs166,351,589 169,290,230 
Super Senior Facility, net of debt issuance costs— 14,896,357 
New Ultraco Debt Facility, net of debt issuance costs121,182,097 132,083,949 
Convertible Bond Debt, net of debt discount and debt issuance costs99,813,315 96,660,485 
Fair value of derivatives - noncurrent— 650,607 
Noncurrent portion of operating lease liabilities1,744,619 686,422 
Total noncurrent liabilities389,091,620 414,268,050 
Total liabilities555,006,515 496,708,973 
Commitments and contingencies00
Stockholders' equity: 
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, respectively128,640 116,618 
Additional paid-in capital982,652,311 943,571,685 
Accumulated deficit(374,722,217)(472,137,822)
Accumulated other comprehensive loss(407,988)(1,132,398)
Total stockholders' equity607,650,746 470,418,083 
Total liabilities and stockholders' equity$1,162,657,261 $967,127,056 

March 31, 2022December 31, 2021
(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents$83,602 $86,147 
Accounts receivable, net of a reserve of $1,837 and $1,818, respectively40,918 28,456 
Prepaid expenses5,278 3,362 
Inventories27,771 17,651 
Collateral on derivatives21,307 15,081 
Fair value of derivative assets - current5,516 4,669 
Other current assets797 667 
Total current assets185,189 156,033 
Noncurrent assets: 
Vessels and vessel improvements, at cost, net of accumulated depreciation of $230,318 and $218,670, respectively900,920 908,076 
Operating lease right-of-use assets18,654 17,017 
Other fixed assets, net of accumulated depreciation of $1,452 and $1,403, respectively368 257 
Restricted cash - noncurrent75 75 
Deferred drydock costs, net44,985 37,093 
Fair value of derivative assets - noncurrent8,476 3,112 
Advances for ballast water systems and other assets3,920 4,995 
Total noncurrent assets977,398 970,625 
Total assets$1,162,587 $1,126,658 
LIABILITIES & STOCKHOLDERS' EQUITY 
Current liabilities: 
Accounts payable$23,396 $20,781 
Accrued interest1,512 2,957 
Other accrued liabilities18,815 17,994 
Fair value of derivative liabilities - current13,111 4,253 
Current portion of operating lease liabilities15,749 15,728 
Unearned charter hire revenue12,746 12,088 
Current portion of long-term debt49,800 49,800 
Total current liabilities135,129 123,601 
Noncurrent liabilities:
Global Ultraco Debt Facility, net of debt issuance costs217,245 229,290 
Convertible Bond Debt, net of debt discount and debt issuance costs113,150 100,954 
Noncurrent portion of operating lease liabilities2,899 1,282 
Other noncurrent accrued liabilities395 265 
Total noncurrent liabilities333,689 331,791 
Total liabilities468,818 455,392 
Commitments and contingencies00
Stockholders' equity: 
Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued as of March 31, 2022 and December 31, 2021— — 
Common stock, $0.01 par value, 700,000,000 shares authorized, 12,985,994 and 12,917,027 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively130 129 
Additional paid-in capital961,930 982,746 
Accumulated deficit(278,858)(313,495)
Accumulated other comprehensive income10,567 1,886 
Total stockholders' equity693,769 671,266 
Total liabilities and stockholders' equity$1,162,587 $1,126,658 


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
(Unaudited)
For the Three Months Ended March 31, 2022 and 2021
(in U.S. dollarsIn thousands, except share and per share data)

Three Months EndedNine Months EndedThree Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020March 31, 2022March 31, 2021
Revenues, netRevenues, net$183,392,700 $68,182,301 $409,815,454 $199,952,404 Revenues, net$184,398 $96,572 
Voyage expensesVoyage expenses30,272,949 19,627,919 81,410,602 69,960,025 Voyage expenses43,627 26,615 
Vessel operating expensesVessel operating expenses28,125,682 21,748,531 73,323,785 65,680,913 Vessel operating expenses27,915 21,519 
Charter hire expensesCharter hire expenses10,723,737 5,060,503 25,373,501 15,820,809 Charter hire expenses22,711 8,480 
Depreciation and amortizationDepreciation and amortization13,570,361 12,617,803 39,187,344 37,587,477 Depreciation and amortization14,580 12,506 
General and administrative expensesGeneral and administrative expenses7,948,037 7,995,715 23,559,217 22,724,190 General and administrative expenses10,054 7,698 
Other operating expenseOther operating expense791,572 — 2,311,816 — Other operating expense133 961 
Operating lease impairment— — — 352,368 
(Gain)/loss on sale of vessel(3,962,093)389,207 (3,962,093)389,207 
Total operating expensesTotal operating expenses87,470,245 67,439,678 241,204,172 212,514,989 Total operating expenses119,020 77,779 
Operating income/(loss)95,922,455 742,623 168,611,282 (12,562,585)
Operating incomeOperating income65,378 18,793 
Interest expenseInterest expense8,511,117 8,954,200 25,561,676 26,883,094 Interest expense4,447 8,251 
Interest incomeInterest income(19,533)(23,644)(52,831)(236,633)Interest income(45)(17)
Loss on debt extinguishment99,033 — 99,033 — 
Realized and unrealized loss/(gain) on derivative instruments, net8,990,568 2,971,353 45,587,799 (4,030,674)
Realized and unrealized loss on derivative instruments, netRealized and unrealized loss on derivative instruments, net7,903 710 
Total other expense, netTotal other expense, net17,581,185 11,901,909 71,195,677 22,615,787 Total other expense, net12,305 8,944 
Net income/(loss)$78,341,270 $(11,159,286)$97,415,605 $(35,178,372)
Net incomeNet income$53,073 $9,849 
Weighted average shares outstanding:Weighted average shares outstanding:Weighted average shares outstanding:
BasicBasic12,802,401 10,279,698 12,237,288 10,274,906 Basic12,974,125 11,729,492 
DilutedDiluted15,936,374 10,279,698 15,354,481 10,274,906 Diluted16,254,898 11,744,568 
Per share amounts
Basic income/(loss)$6.12 $(1.09)$7.96 $(3.42)
Diluted income/(loss)$4.92 $(1.09)$6.34 $(3.42)
Per share amounts:Per share amounts:
Basic net incomeBasic net income$4.09 $0.84 
Diluted net incomeDiluted net income$3.27 $0.84 


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 income/(loss)Income (Unaudited)
(Unaudited)For the Three Months Ended March 31, 2022 and 2021
(In thousands)

Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 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 hedges80,206 (203,590)724,410 (1,124,745)
Comprehensive income/(loss)$78,421,476 $(11,362,876)$98,140,015 $(36,303,117)

Three Months Ended
March 31, 2022March 31, 2021
Net income$53,073 $9,849 
Other comprehensive income:
Net unrealized gain on cash flow hedges8,681 600 
Comprehensive income$61,754 $10,449 

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 (Unaudited)
(Unaudited)For the Three Months Ended March 31, 2022 and 2021
(in U.S. dollarsIn thousands, except share and per share data)
Common
Stock		Common
Stock
Amount		Additional
Paid-in
Capital		Accumulated DeficitAccumulated other comprehensive lossTotal Stockholders’
Equity
Balance at December 31, 202011,661,797 $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 shares71,146 711 (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, 202111,732,943 $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 shares2,773 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 costs581,385 5,814 27,278,103 — — 27,283,917 
Issuance of shares upon exercise of stock options4,117 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, 202112,753,255 $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 Debt25 — 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 options857 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, 202112,863,998 $128,640 $982,652,311 $(374,722,217)$(407,988)$607,650,746 

Common
stock		Common
stock
amount		Additional
paid-in
capital		Accumulated deficitAccumulated other comprehensive incomeTotal stockholders’
equity
Balance at December 31, 202112,917,027 $129 $982,746 $(313,495)$1,886 $671,266 
Net income— — 53,073 — 53,073 
Dividends declared— — — (27,112)— (27,112)
Cumulative effect of adoption of ASU 2020-06— — (20,726)8,676 — (12,050)
Issuance of shares due to vesting of restricted shares60,890 1 (1)— — — 
Issuance of shares upon exercise of stock options8,077 — 85 — — 85 
Unrealized gain on cash flow hedges— — — — 8,681 8,681 
Fees for equity offerings— — 201 — — 201 
Cash used to settle net share equity awards— — (1,862)— — (1,862)
Stock-based compensation— — 1,487 — — 1,487 
Balance at March 31, 202212,985,994 $130 $961,930 $(278,858)$10,567 $693,769 
(1)
 Please see Note 3 Vessels for additional information.
Common
stock		Common
stock
amount		Additional
paid-in
capital		Accumulated deficitAccumulated other comprehensive (loss)/incomeTotal stockholders’
equity
Balance at December 31, 202011,661,797 $116 $943,572 $(472,138)$(1,132)$470,418 
Net income— — — 9,849 — 9,849 
Issuance of shares due to vesting of restricted shares71,146 1 (1)— — — 
Unrealized gain on cash flow hedges— — — — 600 600 
Fees for equity offerings— — (32)— — (32)
Cash used to settle net share equity awards— — (811)— — (811)
Stock-based compensation— — 872 — — 872 
Balance at March 31, 202111,732,943 $117 $943,600 $(462,289)$(532)$480,896 


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
F-4

Common
Stock*		Common
Stock
Amount*		Additional
Paid-in
Capital*		Accumulated DeficitAccumulated other comprehensive lossTotal Stockholders’
Equity
Balance at December 31, 201910,214,600 $102,146 $918,475,145 $(437,074,354)$— $481,502,937 
Net loss— — — (3,527,759)— (3,527,759)
Issuance of shares due to vesting of restricted shares62,526 626 (626)— — — 
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, 202010,277,126 $102,772 $918,149,418 $(440,602,113)$(271,868)$477,378,209 
Net loss— — — (20,491,327)— (20,491,327)
Issuance of shares due to vesting of restricted shares2,572 26 (26)— — — 
Unrealized loss on cash flow hedges— — — — (649,287)(649,287)
Stock-based compensation— — 723,223 — — 723,223 
Balance at June 30, 202010,279,698 $102,798 $918,872,615 $(461,093,440)$(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, 202010,279,698 $102,798 $919,601,123 $(472,252,726)$(1,124,745)$446,326,450 
EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2022 and 2021
(In thousands)

*Adjusted to give effect for the 1-for-7 reverse stock split that became effective as of September 15, 2020.

Three Months Ended
March 31, 2022March 31, 2021
Cash flows from operating activities:
Net income$53,073 $9,849 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation11,697 10,507 
Amortization of operating lease right-of-use assets5,706 3,080 
Amortization of deferred drydocking costs2,883 1,999 
Amortization of debt discount and debt issuance costs562 1,629 
Net unrealized loss/(gain) on fair value of derivatives11,450 (503)
Stock-based compensation expense1,487 872 
Drydocking expenditures(10,774)(4,821)
Changes in operating assets and liabilities:
Accounts payable3,010 6,488 
Accounts receivable(12,462)(6,697)
Accrued interest(1,445)2,150 
Inventories(10,120)(3,096)
Operating lease liabilities current and noncurrent(5,706)(3,302)
Collateral on derivatives(6,226)— 
Fair value of derivatives, other current and noncurrent assets(252)(5,743)
Other accrued liabilities628 159 
Prepaid expenses(1,916)(308)
Unearned charter hire revenue659 2,070 
Net cash provided by operating activities42,254 14,333 
Cash flows from investing activities:
Purchase of vessels and vessel improvements(283)(47,977)
Advances for vessel purchases— (4,720)
Purchase of scrubbers and ballast water systems(3,494)(755)
Proceeds from hull and machinery insurance claims— 75 
Purchase of other fixed assets(160)(8)
Net cash used in investing activities(3,937)(53,385)
Cash flows from financing activities:
Repayment of term loan under New Ultraco Debt Facility— (7,811)
Repayment of revolver loan under Super Senior Facility— (15,000)
Proceeds from revolver loan under New Ultraco Debt Facility— 55,000 
Repayment of term loan under Global Ultraco Debt Facility(12,450)— 
Cash received from exercise of stock options85 — 
Cash used to settle net share equity awards(1,862)(811)
Equity offerings issuance costs201 (292)
Financing costs paid to lenders(18)(170)
Dividends paid(26,818)— 
Net cash (used in)/provided by financing activities(40,862)30,916 
Net decrease in cash, cash equivalents and restricted cash(2,545)(8,136)
Cash, cash equivalents and restricted cash at beginning of period86,222 88,849 
Cash, cash equivalents and restricted cash at end of period$83,677 $80,713 
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest$4,791 $4,320 
Accruals for vessel purchases and vessel improvements included in Other accrued liabilities$70 $244 
Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities$2,943 $3,153 
Accruals for dividends payable included in Other accrued liabilities and Other noncurrent accrued liabilities$785 $— 
Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities$— $250 

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
(Unaudited)

Nine Months Ended
September 30, 2021September 30, 2020
Cash flows from operating activities:
Net income/(loss)$97,415,605 $(35,178,372)
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities:
Depreciation32,951,082 32,085,266 
Amortization of operating lease right-of-use assets10,535,980 9,388,238 
Amortization of deferred drydocking costs6,236,262 5,502,211 
Amortization of debt discount and debt issuance costs5,442,978 4,654,871 
Loss on debt extinguishment99,033 — 
(Gain)/loss on sale of vessel(3,962,093)389,207 
Operating lease impairment— 352,368 
Net unrealized loss on fair value of derivatives24,193,472 2,677,003 
Stock-based compensation expense2,235,279 2,300,444 
Drydocking expenditures(10,736,908)(10,830,172)
Changes in operating assets and liabilities:
Accounts payable4,638,944 (4,135,537)
Accounts receivable(10,645,335)2,956,653 
Accrued interest2,385,397 1,850,383 
Inventories(5,467,068)4,130,347 
Operating lease liabilities current and noncurrent(11,303,671)(9,915,541)
Collateral on derivatives(31,369,664)— 
Fair value of derivatives, other current and noncurrent assets(1,149,973)(5,905,400)
Other accrued liabilities1,897,863 (5,872,683)
Prepaid expenses(1,455,586)1,906,748 
Unearned charter hire revenue8,973,352 1,296,976 
Net cash provided by/(used in) operating activities120,914,949 (2,346,990)
Cash flows from investing activities:
Purchase of vessels and vessel improvements(109,384,938)(605,660)
Advance for vessel purchase(2,200,000)— 
Purchase of scrubbers and ballast water systems(4,557,463)(25,224,068)
Proceeds from hull and machinery insurance claims245,000 3,749,779 
Proceeds from sale of vessel9,159,077 4,594,081 
Purchase of other fixed assets(29,127)(43,659)
Net cash used in investing activities(106,767,451)(17,529,527)
Cash flows from financing activities:
Proceeds from New Ultraco Debt Facility16,500,000 22,550,000 
Repayment of Norwegian Bond Debt(4,000,000)(4,000,000)
Repayment of term loan under New Ultraco Debt Facility(24,258,223)(20,923,319)
Repayment of revolver loan under New Ultraco Debt Facility(55,000,000)(20,000,000)
Repayment of revolver loan under Super Senior Facility(15,000,000)— 
Proceeds from revolver loan under New Ultraco Debt Facility55,000,000 55,000,000 
Proceeds from revolver loan under Super Senior Facility— 15,000,000 
Proceeds from Holdco Revolving Credit Facility24,000,000 — 
Proceeds from issuance of shares under ATM Offering, net of commissions27,242,417 — 
Cash received from exercise of stock options55,578 — 
Cash used to settle net share equity awards(985,686)(1,161,301)
Equity offerings issuance costs(291,830)— 
Debt issuance costs paid to lenders on New Ultraco Debt Facility(328,241)(381,471)
Debt issuance costs paid to lenders of Holdco Revolving Credit Facility(285,893)— 
Cash used to settle fractional shares— (12,513)
Cash paid to bondholder upon conversion of Convertible Bond Debt(23)— 
Other financing costs— (44,104)
Net cash provided by financing activities22,648,099 46,027,292 
Net increase in cash, cash equivalents and restricted cash36,795,597 26,150,775 
Cash, cash equivalents and restricted cash at beginning of period88,848,771 59,130,285 
Cash, cash equivalents and restricted cash at end of period$125,644,368 $85,281,060 
SUPPLEMENTAL CASH FLOW INFORMATION
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$499,578 $— 
Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities$3,258,545 $5,915,948 
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$508,768 $200,000 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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, 2021,March 31, 2022, the Company owned and operated a modern fleet of 5253 oceangoing vessels, including 27 Supramax and 2526 Ultramax vessels with a combined carrying capacity of 3,128,1073.19 million deadweight tonnagetons ("dwt") and an average age of approximately 9.19.5 years. Additionally, the Company charters-in 4 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,March 31, 2022 and 2021, and 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 8Rule 10-01 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 20202021 Annual Report on Form 10-K, filed with the SEC on March 12, 2021.14, 2022 (the "Form 10-K").
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.
In March 2021, the Company entered into an at market issuance sales agreement with B. Riley Securities, Inc., BTIG, LLC and Fearnley Securities, Inc., as sales agents (each, a “Sales Agent” and collectively, the “Sales Agents”), to sell shares of common stock, par value $0.01 per share, of the 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 second quarter of 2021, the Company sold and issued an aggregate of 581,385 shares at a weighted-averageweighted average sales price of $47.97 per share under the ATM Offering for aggregate net proceeds of $27.2$27.1 million after deducting sales agent commissions and other offering costs. The proceeds were used for partial financing of vessel acquisitions and 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

LeasesSignificant Accounting Policies

The followingCompany's significant accounting policies are described in Note 2, Significant Accounting Policies, in the type of contracts that fall under ASC 842:

Notes to the Consolidated Financial Statements in the Form 10-K. Included herein are certain updates to those policies.



F-7F-6

Time 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.Recently Adopted Accounting Pronouncements

    The transition guidance associated with ASC 842 allowsIn August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 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 practical expedients tofinancial 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 lessors.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, Derivatives and Hedging, or (2) a convertible debt instrument was issued at a substantial premium. 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 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, net in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 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 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 Sheetadopted ASU 2020-06 as of January 1, 2019.2022 under the modified retrospective approach. The Company recognizedConvertible Bond Debt (defined below) will no longer require bifurcation and separate accounting of the operating lease right-of-use assets and the corresponding lease liabilities on the Condensed Consolidated Balance Sheet for time charter-in contracts greater than 12 months on the date of adoption of ASC 842.equity component. The Companyresulting debt discount will continueno longer be amortized to recognize the lease payments for all operating leases as charter hire expenses on the condensed consolidated statements of operations on a straight-line basisinterest expense over the lease term.

    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 costlife of the lease is allocated overbond and thus an adjustment to beginning retained earnings of $8.7 million was recorded within Accumulated deficit reflecting the lease term, generally oncumulative impact of adoption. Additionally, a straight-line basis. Right-of-use assets represent$20.7 million reduction to Additional paid-in capital was recorded to reverse the equity component and an offsetting $12.0 million was recorded within Long-term debt as 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 termsreversal 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.

    As of September 30, 2021, the Company had time charter-in contracts for 4 Ultramax vessels which are greater than 12 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. 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 has increased the lease liability and the 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 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 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 was $14,250 per day and $15,250 per day thereafter. The Company took delivery of the vessel in the fourth quarter of 2018. 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 $0.1 million which is recorded as Restricted cash - noncurrent in the accompanying Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020.
In November 2018, the Company entered into an office lease agreement in Singapore, which 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, 2021 and 2020.
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, 2021 and December 31, 2020 are as follows:

DescriptionLocation in Balance Sheet
September 30, 2021 (1)
December 31, 2020 (1)
Noncurrent assets:
Chartered-in contracts greater than 12 monthsOperating lease right-of-use assets$20,712,287 $6,207,253 
Office leasesOperating lease right-of-use assets2,133,410 1,333,618 
Operating lease right-of-use assets$22,845,697 $7,540,871 
Liabilities:
Chartered-in contracts greater than 12 monthsCurrent portion of operating lease liabilities$20,451,549 $6,974,943 
Office leasesCurrent portion of operating lease liabilities642,760 640,428 
Lease liabilities - current portion$21,094,309 $7,615,371 
Chartered-in contracts greater than 12 monthsNoncurrent portion of operating lease liabilities$253,970 $— 
Office leasesNoncurrent portion of operating lease liabilities$1,490,649 $686,422 
Lease liabilities - noncurrent portion$1,744,619 $686,422 

discount.

(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 1.33% to 6.08%. The weighted average discount rate used to calculate the lease liability was 1.67%.Recently Issued Accounting Pronouncements Not Yet Effective

The table below presentsFASB has issued accounting standards that had not yet become effective as of March 31, 2022 and may impact the components of the Company’s lease expensesCompany's consolidated financial statements or related disclosures in future periods. Those standards 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, 2021 and 2020.
F-10

Three Months EndedNine Months Ended
DescriptionLocation in Statement of OperationsSeptember 30, 2021September 30, 2020September 30, 2021September 30, 2020
Lease expense for chartered-in contracts less than 12 monthsCharter hire expenses$5,856,694 $2,560,224 $13,511,509 $6,348,081 
Lease expense for chartered-in contracts greater than 12 monthsCharter hire expenses4,867,043 2,500,279 11,861,992 9,472,728 
Total charter hire expenses$10,723,737 $5,060,503 $25,373,501 $15,820,809 
Lease expense for office leasesGeneral and administrative expenses188,880 185,525 465,269 548,349 
Sublease income from chartered-in contracts greater than 12 months *Revenues, net$7,550,105 $1,308,833 $14,303,242 $6,598,871 
their potential impact are discussed below:

* The sublease income represents only time charter revenue earned onIn March 2020, 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, 2021 and 2020.
FASB issued ASU 2020-04,
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.

On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for a period of a minimum of twelve months and a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5%Reference Rate Reform (Topic 848): Facilitation of the BSI 58 averageEffects of 10 time charter routes published byReference Rate Reform on Financial Reporting, (“ASU 2020-04”). ASU 2020-04 addresses concerns about certain accounting consequences that could result from the Baltic Exchange each business day. The Company hasanticipated transition away from the optionuse of LIBOR and other interbank offered rates to extend the lease term foralternative reference rates. ASU 2020-04 is elective and applies “to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another year, during which time the fixed hirereference rate decreases to $10,750 per day with no change to the remaining terms. The vessel is expected to be delivereddiscontinued because of reference rate reform.” ASU 2020-04 establishes (1) a general contract modification principle that entities can apply in other areas that may be affected by reference rate reform and (2) certain elective hedge accounting expedients. ASU 2020-04 is optional and effective for all entities as of March 12, 2020 and may be applied prospectively to contract modifications made on or before December 31, 2022. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, ("ASU 2021-01"), which clarifies certain provisions in Topic 848, if elected by an entity, to apply to derivative instruments that use interest rate for margining, discounting, or contract price alignment that is modified as a result of rate reference reform The Company is currently evaluating the adoption of ASU 2020-04 on its debt under the Global Ultraco Debt Facility (as defined below) as it bears interest on outstanding borrowings at LIBOR plus a margin rate. Additionally, the Company inis also evaluating the second quarteradoption of 2022.

The weighted average remaining lease termASU 2021-01 on our operating lease contracts greater than 12 months is 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, 2021:
F-11

YearChartered-in contracts greater than 12 monthsOffice leasesTotal Operating leases
Discount rate upon adoption5.37 %5.80 %5.48 %
Three months ending December 31, 2021$5,675,982 $176,751 $5,852,733 
202215,096,117 748,243 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 term253,970 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 freightits interest 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, 2021 was $8.6 million and $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, 2020 was $0.6 million and $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, 2021 and 2020:
Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Time charters$91,652,577 $25,279,434 $180,385,272 $73,798,878 
Voyage charters91,740,123 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 costsswaps 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 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 $0.5 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 Sheets.
Financial Instruments - Credit Losses
On January 1, 2020, the Company adopted ASC 2016-13, "Financial Instruments - Credit Losses" ("ASC 326"). The adoption of ASC 326 primarily impacted our trade receivables recorded on our Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020. The Company maintains an allowance for credit losses for expected uncollectible accounts 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, 2021 and 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, 2021, our assessment considered 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 $2.2 million as of September 30, 2021 and $2.4 million as of December 31, 2020.Global Ultraco Debt Facility.

Note 3. Vessels
Vessel and Vessel Improvements
As of September 30, 2021,March 31, 2022, the Company’s owned operating fleet consisted of 5253 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
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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 June 1, 2021, the Company signed a memorandum of agreement to sell the vessel Tern for a total net consideration of $9.2 million after commissions and associated selling expenses. The vessel was delivered to the buyer during the third quarter of 2021. The Company recorded a gain of $4.0 million in its Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021. Additionally, the Company wrote off $0.3 million of unamortized drydock costs upon sale of the vessel.
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 cost, including installation, is approximately $0.5 million per BWTS. The Company intends to complete the installations during scheduled drydockings. The Company completed installation of BWTS on 1728 vessels and recorded $8.5$15.7 million in Vessels and vessel improvements in the Condensed Consolidated Balance Sheets as of September 30, 2021.March 31, 2022. Additionally, the Company recorded $5.3$3.4 million as advances paid towards installation of BWTS on the remaining vessels as a Noncurrent asset in its Condensed Consolidated Balance Sheets as of September 30, 2021.March 31, 2022.



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The Vessels and vessel improvements activity for the ninethree months ended September 30, 2021March 31, 2022 is below:
(In thousands)
Vessels and vessel improvements, at December 31, 20202021$810,713,959908,076 
Purchase of vessels and vessel improvements109,884,516 
Advances paid for vessel purchases as of December 31, 20203,250,000 
Fair value of warrants issued as consideration for vessel purchases10,679,988 
Sale of vessel(4,885,998)247 
Scrubbers and BWTS1,505,0044,245 
Depreciation expense(32,742,401)(11,648)
Vessels and vessel improvements, at September 30, 2021March 31, 2022$898,405,068900,920 


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Note 4. Debt
September 30, 2021December 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 costs99,813,315 96,660,485 
Norwegian Bond Debt176,000,000 180,000,000 
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 costs166,351,589 169,290,230 
New Ultraco Debt Facility158,671,371 166,429,594 
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 costs121,182,097 132,083,949 
Holdco Revolving Credit Facility24,000,000 — 
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 
(In thousands)March 31, 2022December 31, 2021
Convertible Bond Debt$114,119 $114,119 
Debt discount and debt issuance costs - Convertible Bond Debt(969)(13,165)
Convertible Bond Debt, net of debt discount and debt issuance costs113,150 100,954 
Global Ultraco Debt Facility275,100 287,550 
Debt discount and Debt issuance costs - Global Ultraco Debt Facility(8,055)(8,460)
Less: Current portion - Global Ultraco Debt Facility(49,800)(49,800)
Global Ultraco Debt Facility, net of debt issuance costs217,245 229,290 
Total long-term debt$330,395 $330,244 
Convertible Bond Debt

On July 29, 2019, the Company issued $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 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 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 Splita 1-for-7 reverse stock split effected on September 15, 2020 (the "Reverse Stock Split") and the Company's payments of cash dividends of $2.00 per share and $2.05 per share on November 24, 2021 (to shareholders of record as of November 15, 2021) and on March 25, 2022 (to shareholders of record as of March 15, 2022), respectively, is 25.45327.606 shares of the Company's common stock per $1,000 principal amount of Convertible Bond Debt, (whichwhich is equivalent to a conversion price of approximately $39.29$36.22 per share of its common stock). During the three months ended September 30, 2021, the Company received a requeststock (subject to further adjustments 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.future dividends).

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(subject to shareholder approval requirements in accordance with the listing standards of the Nasdaq Global Select Market.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
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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
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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, ("ASC 470") the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) prior to the adoption of ASU 2020-06 were to be separately accounted for in a manner that reflected the issuer's non-convertible debt borrowing rate. The guidance required 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 reflected 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. Prior to the adoption of ASU 2020-06, the Company accounted for the Convertible Bond Debt based on the above guidance and attributed a portion of the proceeds to the equity component. The resulting debt discount was amortized using the 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. The Company adopted ASU 2020-06 as of January 1, 2022 and made adjustments to account for the cumulative impact of the adoption. See Note 2, Recent Accounting Pronouncements, for discussion of the impact of ASU 2020-06 on the accounting for the Convertible Bond Debt and the condensed consolidated financial statements upon adoption on January 1, 2022.

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, 2021,March 31, 2022, the fair value of the 0.5 million511,840 outstanding loaned shares was $25.8$34.9 million based on the closing price of the common stock on September 30, 2021.March 31, 2022. 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.

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 million511,840 shares lent to JCS as issued and outstanding for the purposes of calculating earnings per share.

NewGlobal Ultraco Debt Facility

On January 25, 2019,October 1, 2021, Eagle Bulk Ultraco Shipping LLC ("Ultraco"(“Eagle Ultraco”), a wholly-owned subsidiary of the Company, along with certain of its vessel-owning subsidiaries as guarantors, entered into a new senior secured credit facility (the "New"Global Ultraco Debt Facility") with the lenders party thereto (the “Lenders”) Credit Agricole Corporate and Investment Bank (“Credit Agricole”), whichSkandinaviska Enskilda Banken AB (PUBL), Danish Ship Finance A/S, Nordea Bank ABP, Filial I Norge, DNB Markets Inc., Deutsche Bank AG, and ING Bank N.V., London Branch. The Global Ultraco Debt Facility provides for an aggregate principal amount of $208.4$400.0 million, which consists of (i) a term loan facility in an aggregate principal amount of$153.4 $300.0 million (the "Term Facility Loan"“Term Facility”) and (ii) a revolving credit facility of $55.0 million, of which $55.0 million was available as of September 30, 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 $100.0 million (the “Revolving Facility”) to be used for refinancing the Term Facility Loan. Outstanding borrowingsoutstanding debt, including accrued interest and commitment fees 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 compensation from net income/(loss).

Holdco Revolving Credit
F-15F-9

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 $0.2 million as deferred financing costs in relation to the transaction.

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 and ABN AMRO Capital USA LLC resigned its role as facility agent and security trustee. Additionally, the facility was amended in order to increase the commitments under the existing term loan facility 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, 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 was required to repay the aggregate principal amount of $5.1 million in quarterly installments for the first year and $8.7 million in quarterly installments from the second year until the New Ultraco Maturity Date. Additionally, there 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 were secured by, among other items, a first priority mortgage on 29 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 contained financial covenants requiring the Company, on a consolidated basis excluding Shipco (as defined below) and any of 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 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 required the Company, on a consolidated basis, excluding any Restricted 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 imposed operating restrictions on Ultraco and the Guarantors. The Company was in compliance with its financial covenants under the New Ultraco Debt Facility as of September 30, 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. The Norwegian Bond Debt was repaid(each as defined in full on October 18, 2021. Prior to being repaid, interest on the Bonds accrued at a rate of 8.25% per annum and the Bonds were set to mature on November 28, 2022. The Norwegian BondNote 6, Debt, was guaranteed by the Issuer's subsidiaries and secured by mortgages over 19 vessels (the "Shipco Vessels"), pledges of the equity of the Issuer and its subsidiaries and certain assignments.


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The Issuer 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 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 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 balanceNotes to the aggregate book value ofConsolidated Financial Statements in the Shipco Vessels, must not have exceeded 75%,Form 10-K) and its subsidiaries’ free liquidity must at all times have been at least $12.5 million. Shipco was in compliance with its financial covenants under the bond terms as of September 30, 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.

    During the year ended December 31, 2020, the Company sold 5 vessels, Goldeneye, Skua, Osprey, Hawk and Shrike for combined net proceeds of $23.2 million. 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 for net proceeds of $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. 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 transferred the remaining proceeds from sale of 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 cash - current on its Condensed Consolidated Balance Sheet as of September 30, 2021.

    As noted above, the Norwegian Bond Debt was repaid in full on October 18, 2021 after the expiry of the 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 purposespurposes. The Company paid fees of Shipco and its subsidiaries. The Super Senior Facility matures on August 28, 2022. Shipco incurred $0.3$5.8 million as other financing coststo the Lenders in connection with the transaction.

DuringThe Global Ultraco Debt Facility has a maturity date of five years from the third quarter,date of borrowing on the Company cancelled the Super Senior Revolving Facility. There were no outstanding amounts under the facility and the Company recorded $0.1 million as a Loss on debt extinguishment in its Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021.

Holdco Revolving Credit Facility

On March 26, 2021, Eagle Bulk Holdco LLC (“Holdco”), a wholly-owned subsidiary of the Company entered into a Credit Agreement (Holdco Revolving Credit Facility”) made by and among (i) Holdco, as borrower, (ii) the Company and certain wholly-owned vessel-owning subsidiaries of Holdco, as joint and several 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 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 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 CreditTerm Facility, which were repaid in full onis October 1, 2021, bore2026. Outstanding borrowings bear interest at a rate of 2.4%LIBOR plus LIBOR for2.10% to 2.80% per annum, depending on certain metrics such as the relevantCompany's financial leverage ratio and meeting sustainability linked criteria. Repayments of $12.45 million are due quarterly beginning on December 15, 2021, with a final balloon payment of all outstanding principal and accrued interest period.

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 paiddue upon maturity. The loan is repayable in whole or in part without premium or penalty prior to the RCF Lenders.maturity date subject to certain requirements stipulated in the Global Ultraco Debt Facility.

The maturity date forGlobal Ultraco Debt Facility is secured by 49 of the Holdco Revolving CreditCompany's vessels. The Global Ultraco Debt 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.

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The Holdco Revolving Credit Facility includedcontains certain standard affirmative and negative covenants and events of default that are customary for transactions of this kind. Additionally, the Holdco Revolving Credit Facility included aalong with financial covenants. The financial covenants include: (i) minimum consolidated liquidity covenant that requires the Companybased on a consolidated basis (but excluding Shipco and its subsidiaries (the “Restricted Subsidiaries”)) to maintain cash equivalents in an amount not less than the greater of (i) $600,000(a) $0.6 million per vessel owned directly or indirectly by the Company and its subsidiaries and (ii)or (b) 7.5% of the consolidatedCompany's total debt; (ii) debt ofto capitalization ratio not greater than 0.60:1.00; and (iii) maintaining positive working capital.

Pursuant to the Company. The Holdco Revolving CreditGlobal Ultraco Debt Facility, also required the Company borrowed $350.0 million and together with cash on a consolidated basis (but excludinghand repaid 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 was in compliance with its financial covenantsoutstanding debt, accrued interest and commitment fees under the Holdco Revolving Credit Facility asand New Ultraco Debt Facility. Concurrently, the Company issued a 10-day call notice to redeem the outstanding bonds under the Norwegian Bond Debt. Additionally, in October 2021, the Company entered into 4 interest rate swaps for the notional amount of September 30, 2021.

As noted above,$300.0 million of the Holdco Revolving CreditTerm Facility was refinanced on October 1, 2021. Please seeunder the Global Ultraco Debt Facility at a fixed interest rate ranging between 0.83% and 1.06% to hedge the LIBOR-based floating interest rate (see Note 11 Subsequent Events5, Derivative Instruments, for additional information.details).

Interest Rates

2022

For the three months ended March 31, 2022, 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 this period was 5.49%.

For the three months ended March 31, 2022, the interest rate on the Global Ultraco Debt Facility ranged from 2.35% to 2.98%, including a margin over LIBOR applicable under the terms of the Global Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the revolver credit facility of the Global Ultraco Debt Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 3.05%.

2021

For the three and nine months ended September 30,March 31, 2021, 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 periodsthis period was 10.14%.

For the three months ended September 30,March 31, 2021, the interest rate on the New Ultraco Debt Facility ranged from 2.61% to 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%2.62% 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%3.22%.

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,March 31, 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% 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 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 periodsthis period was 9.01% and 8.96%, respectively.8.84%.

For the three and nine months ended September 30, 2020,March 31, 2021, the interest rate on our outstanding debt under the Super Senior Facility ranged between 2.43% and 2.89%(as defined in Note 6, Debt, in the Notes to the Consolidated Financial Statements in the Form 10-K) was 2.24%. The weighted average effective interest rate including the amortization of debt issuance costs for these periods was 2.79% and 3.19%, respectively.2.58%. Additionally, we paypaid commitment fees of 40% of the margin on the undrawn portion of the Super Senior Revolver Facility.





F-10

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

Three Months EndedNine Months EndedThree Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
(In thousands)(In thousands)March 31, 2022March 31, 2021
Convertible Bond Debt interestConvertible Bond Debt interest$1,426,467 $1,426,500 $4,279,467 $4,279,450 Convertible Bond Debt interest$1,427 $1,426 
Holdco Revolving Credit Facility interest156,086 — 313,918 — 
Global Ultraco Debt Facility interestGlobal Ultraco Debt Facility interest2,213 — 
New Ultraco Debt Facility interestNew Ultraco Debt Facility interest1,063,230 1,946,446 4,068,481 6,052,556 New Ultraco Debt Facility interest— 1,465 
Norwegian Bond Debt interestNorwegian Bond Debt interest3,710,667 3,879,333 11,065,084 11,575,667 Norwegian Bond Debt interest— 3,630 
Super Senior Facility interestSuper Senior Facility interest— 93,121 29,818 123,727 Super Senior Facility interest— 30 
Amortization of debt discount and debt issuance costsAmortization of debt discount and debt issuance costs1,975,792 1,608,800 5,442,978 4,654,871 Amortization of debt discount and debt issuance costs562 1,629 
Commitment fees on revolving credit facilitiesCommitment fees on revolving credit facilities178,875 — 361,930 196,823 Commitment fees on revolving credit facilities245 71 
Total Interest expenseTotal Interest expense$8,511,117 $8,954,200 $25,561,676 $26,883,094 Total Interest expense$4,447 $8,251 

Scheduled Debt Maturities
The following table presents the scheduled maturities of principal amounts of our debt 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):March 31, 2022:
Norwegian Bond DebtNew Ultraco Debt FacilityConvertible Bond DebtHoldco Revolving Credit FacilityTotal
Three months ending December 31, 2021$4,000,000 $8,666,630 $— $24,000,000 $36,666,630 
2022172,000,000 34,666,521 — — 206,666,521 
(In thousands)(In thousands)Convertible Bond DebtGlobal Ultraco Debt FacilityTotal
Nine months ending December 31, 2022Nine months ending December 31, 2022$— $37,350 $37,350 
20232023— 34,666,521 — — 34,666,521 2023— 49,800 49,800 
20242024— 80,671,699 114,119,000 — 194,790,699 2024114,119 49,800 163,919 
20252025— 49,800 49,800 
20262026— 88,350 88,350 
$176,000,000 $158,671,371 $114,119,000 $24,000,000 $472,790,371 $114,119 $275,100 $389,219 


F-19

Note 5. Derivative Instruments
Interest rate swaps
During October 2021, the Company entered into 4 interest rate swaps for the notional amount of $300.0 million of the Term Facility under the Credit Agreement for the Global Ultraco Debt Facility at a fixed interest rate ranging between 0.83% and 1.06% to hedge the LIBOR-based floating interest rate.
During 2020, the Company entered into a series of interest rate swap 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. In August 2021, the Company cancelled the New Ultraco Debt Facility interest rate swaps. Concurrent with the cancellation, the Company entered into another interest rate swap which was subsequently cancelled on October 1, 2021 upon repayment of the New Ultraco Debt Facility.

The IRS wasinterest rate swaps were designated and qualified as a cash flow hedge.hedges. The Company uses the IRSinterest rate swaps for the management of interest rate risk exposure, as the IRSan interest rate swap effectively converts a portion of the Company’s debt from a floating to a fixed rate. The IRSinterest rate swap 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 IRSinterest rate swap and the prevailing market interest rates. The Company may terminate the IRSinterest rate swaps prior to their expiration dates, at which point a realized gain or loss may be recognized, or may be amortized over the original life of the IRSinterest rate swap 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 away fromagainst the rate fixed for each swap.
F-11


Tabular disclosure of derivatives location
The following table summarizes the interest rate swaps in place as of September 30, 2021March 31, 2022 and December 31, 2020.2021:
Interest Rate Swap detailNotional Amount outstanding
Trade dateFixed rateStart dateEnd date
September 30, 2021 (1)
December 31, 2020
March 31, 20200.64 %July 27, 2020January 26, 2024$— $72,452,297 
April 15, 20200.58 %July 27, 2020January 26, 2024— 36,226,149 
June 25, 20200.50 %July 27, 2020January 26, 2024— 57,751,148 
$— $166,429,594 
(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 detailNotional Amount outstanding (in thousands)
Trade dateFixed rateStart dateEnd dateMarch 31, 2022December 31, 2021
October 07, 20210.83 %October 12, 2021December 15, 2025$206,325 $215,663 
October 13, 20210.94 %October 15, 2021December 15, 202522,925 23,963 
October 14, 20210.93 %October 18, 2021December 15, 202522,925 23,963 
October 22, 20211.06 %October 26, 2021December 15, 202522,925 23,963 
$275,100 $287,552 
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.income. The estimated lossincome that is currently recorded in Accumulated other comprehensive lossincome as of September 30, 2021March 31, 2022 that is expected to be reclassified into the earnings within the next twelve months is $0.2$2.4 million. No portion of the cash flow hedges waswere ineffective during the three and nine months ended September 30, 2021.March 31, 2022.

The effect of derivative instruments on the StatementCondensed Consolidated Statements of Operations for the three and nine months ended September 30,March 31, 2022 and 2021 and 2020 is below:
Derivatives designated as hedging instrumentsLocation of loss in Statements of OperationsEffective portion of loss reclassified from Accumulated other comprehensive income/(loss)
Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Interest rate swapsInterest expense$(150,585)$105,114 $(446,549)$105,114 

F-20

Derivatives designated as hedging instrumentsLocation of loss in Statements of OperationsEffective portion of loss reclassified from Accumulated other comprehensive income (in thousands)
Three Months Ended
March 31, 2022March 31, 2021
Interest rate swapsInterest expense$397 $145 
The following table shows the interest rate swap assetassets and liabilities as of September 30, 2021March 31, 2022 and December 31, 2020:2021:
Derivatives designated as hedging instrumentsBalance Sheet locationSeptember 30, 2021December 31, 2020
Interest rate swapFair value of derivatives - current/Current liabilities$— $481,791 
Interest rate swapFair value of derivatives - noncurrent/Noncurrent liabilities$— $650,607 
Derivatives designated as hedging instruments (in thousands)Balance Sheet locationMarch 31, 2022December 31, 2021
Interest rate swapFair value of derivative assets - current$2,371 $— 
Interest rate swapFair value of derivative assets - noncurrent$8,476 $3,112 
Interest rate swapFair value of derivative liabilities - current$— $885 
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 statementCondensed Consolidated Statements of operationsOperations and 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, 2021,March 31, 2022, the Company hashad International Swaps and Derivatives Association ("ISDA") agreements with 25 applicable banks and financial institutions, which contain netting provisions. In addition to a master agreement with the Company 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
F-12

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, 2021,March 31, 2022, the Company had outstanding bunker swap agreements to purchase 10,75025,250 metric tons of high and low sulfur fuel oil with prices ranging between $272$486 and $453$798 that are expiring at DecemberMarch 31, 2021.2023. The volume represents less than 10% of our estimated consumption on our fleet for the year.

The following table shows our open positions on FFAs as of September 30, 2021:March 31, 2022:

FFA PeriodFFA PeriodAverage FFA Contract PriceNumber of Days HedgedFFA PeriodNumber of Days HedgedAverage FFA Contract Price
Quarter ending December 31, 2021$18,689 1260
Quarter ending March 31, 202222,407 315
Quarter ending June 30, 2022Quarter ending June 30, 202222,086 315Quarter ending June 30, 2022405$16,672 
Quarter ending September 30, 2022Quarter ending September 30, 202221,735 315Quarter ending September 30, 20221125$22,503 
Quarter ending December 31, 2022Quarter ending December 31, 202221,486 315Quarter ending December 31, 2022990$20,914 

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 statementsCondensed 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:

F-21

For the Three Months EndedFor the Nine Months Ended
(In thousands)(In thousands)For the Three Months Ended
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instrumentsLocation of loss/(gain) in Statements of OperationsSeptember 30, 2021September 30, 2020September 30, 2021September 30, 2020Derivatives not designated as hedging instrumentsLocation of loss/(gain) in Statements of OperationsMarch 31, 2022March 31, 2021
FFAs - realized lossRealized and unrealized loss/(gain) on derivative instruments, net$16,138,822 $2,088,537 $23,493,503 $1,404,060 
FFAs - unrealized (gain)/lossRealized and unrealized loss/(gain) on derivative instruments, net(6,787,069)1,230,727 24,381,810 3,327,509 
FFAs - realized (gain)/lossFFAs - realized (gain)/lossRealized and unrealized loss on derivative instruments, net$(1,772)$1,966 
FFAs - unrealized loss/(gain)FFAs - unrealized loss/(gain)Realized and unrealized loss on derivative instruments, net14,252 (277)
Bunker swaps - realized gainBunker swaps - realized gainRealized and unrealized loss/(gain) on derivative instruments, net(800,807)(1,059,570)(2,099,177)(8,295,136)Bunker swaps - realized gainRealized and unrealized loss on derivative instruments, net(1,774)(753)
Bunker swaps - unrealized loss/(gain)Realized and unrealized loss/(gain) on derivative instruments, net439,622 711,659 (188,337)(467,107)
Bunker swaps - unrealized gainBunker swaps - unrealized gainRealized and unrealized loss on derivative instruments, net(2,803)(226)
TotalTotal$8,990,568 $2,971,353 $45,587,799 $(4,030,674)Total$7,903 $710 


Derivatives not designated as hedging instrumentsBalance Sheet locationSeptember 30, 2021December 31, 2020
Derivatives not designated as hedging instruments (in thousands)Derivatives not designated as hedging instruments (in thousands)Balance Sheet locationMarch 31, 2022December 31, 2021
FFAs - Unrealized lossFFAs - Unrealized lossFair value of derivatives - current/Current liabilities24,381,091 — FFAs - Unrealized lossFair value of derivative liabilities - current$13,111 $3,368 
FFAs - Unrealized gainFFAs - Unrealized gainFair value of derivative assets - current— 4,326 
Bunker swaps - Unrealized gainBunker swaps - Unrealized gainOther current assets1,097,484 352,399 Bunker swaps - Unrealized gainFair value of derivative assets - current3,145 343 
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, 2021March 31, 2022 and December 31, 2020,2021, the Company posted cash collateral related to derivative instruments under its collateral security arrangements of $31.4$21.3 million and $0.1$15.1 million, respectively, which is recorded as a Current asset in the Condensed Consolidated Balance Sheets.


F-13

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 values approximates fair values for bonds issued under the Norwegian Bond Debt and the Convertible Bond Debt, which areis traded on the Oslo Stock Exchange and NASDAQ, respectively.NASDAQ. The carrying amountsamount of our term loan and revolver loanborrowing under the NewGlobal Ultraco Debt Facility and revolver loan under Holdco Revolving Credit Facility approximate theirapproximates its fair value, due to theirits variable interest 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.accounts and collateral on derivatives.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Our Level 2 non-derivatives include our debt balances under the Convertible Bond Debt Holdco Revolving Credit Facility, Norwegian Bond Debt and the NewGlobal 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)

September 30, 2021March 31, 2022
Fair ValueFair Value
Carrying Value (7)
Level 1Level 2
(In thousands)(In thousands)
Carrying Value (7)
Level 1Level 2
AssetsAssetsAssets
Cash and cash equivalents (1)
Cash and cash equivalents (1)
$125,644,368 $125,644,368 $— 
Cash and cash equivalents (1)
$83,677 $83,677 $— 
Collateral on derivativesCollateral on derivatives31,369,664 31,369,664 — Collateral on derivatives21,307 21,307 — 
Other current assets (2)
1,097,484 — 1,097,484 
Fair value of derivative assets - current (2)
Fair value of derivative assets - current (2)
5,516 — 5,516 
Fair value of derivative assets - noncurrent (3)
Fair value of derivative assets - noncurrent (3)
8,476 — 8,476 
LiabilitiesLiabilitiesLiabilities
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 
Global Ultraco Debt Facility (4)
Global Ultraco Debt Facility (4)
275,100 — 275,100 
Convertible Bond Debt (5)
Convertible Bond Debt (5)
114,119,000 — 171,178,500 
Convertible Bond Debt (5)
114,119 — 195,751 
Fair value of Derivatives - current (6)
24,381,091 — 24,381,091 
Fair value of derivative liabilities - current (6)
Fair value of derivative liabilities - current (6)
13,111 — 13,111 
December 31, 20202021
Fair Value
Carrying Value (7)
Level 1Level 2
Assets
Cash and cash equivalents (1)
$88,848,771 $88,848,771 $— 
Other current assets (2)
483,739 131,340 352,399 
Liabilities
Norwegian Bond Debt (3)
180,000,000 — 173,250,000 
New Ultraco Debt Facility (4)
166,429,594 — 166,429,594 
Super Senior Facility (4)
15,000,000 — 15,000,000 
Convertible Bond Debt (5)
114,120,000 — 92,748,748 
Fair value of Derivatives - current and noncurrent (6)
1,132,398 — 1,132,398 
Fair Value
(In thousands)
Carrying Value (7)
Level 1Level 2
Assets
Cash and cash equivalents (1)
$86,222 $86,222 $— 
Collateral on derivatives15,081 15,081 — 
Fair value of derivative assets - current (2)
4,669 — 4,669 
Fair value of derivative assets - noncurrent (3)
3,112 — 3,112 
Liabilities
Global Ultraco Debt Facility (4)
287,550 — 287,550 
Convertible Bond Debt (5)
114,119 — 147,499 
Fair value of derivative liabilities - current (6)
4,253 — 4,253 

F-14

(1) Includes restricted cash (current and noncurrent)(noncurrent) of $25.6$0.1 million at September 30, 2021March 31, 2022 and $18.9$0.1 million at December 31, 2020.2021.
(2) Relates toIncludes $3.1 million of unrealized mark-to-market gains on bunker swaps and $2.4 million of unrealized gains on our interest rate swaps as of September 30, 2021March 31, 2022 and December 31, 2020. Includes $0.1$4.7 million of collateralunrealized mark-to-market gains on derivativesFFAs and bunker swaps as of December 31, 2020.2021.
(3) The fair valueIncludes $8.5 million and $3.1 million of the bond is basedunrealized gains on the last trades on September 20, 2021our interest rate swaps as of March 31, 2022 and December 14, 2020 on Bloomberg.com.31, 2021, respectively.
(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,March 31, 2022 and December 31, 2021.
(5) The fair value of the Convertible Bond Debt is based on the last trade on September 28, 2021March 16, 2022 and December 21, 202016, 2021 on Bloomberg.com.
(6) Includes $24.4$13.1 million of unrealized mark-to-market losses on FFAs as of September 30, 2021March 31, 2022 and $1.1$3.4 million of unrealized mark-to-market losses on FFAs and $0.9 million of unrealized losses on our interest rate swaps as of December 31, 2020.2021.
(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 ourthe Company's 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,the 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, penalties or penaltiesassociated costs 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,March 31, 2022 and 2021, the Company incurred and recorded $0.8$0.1 million and $2.3$1.0 million, respectively, as Other operating expense in its Condensed Consolidated Statements of Operations relating to this incident, which include legal fees, surety bond expenses, vessel offhire,off-hire, crew changes and travel costs.

Note 8. Leases

Time charter-in contracts

The Company has time charter-in contracts for Ultramax vessels which are greater than 12 months as of the lease commencement date. A description of each of these contracts is below:

(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. 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 has increased the lease liability and the corresponding right-of-use asset by $5.8 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as
F-15

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 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 was $14,250 per day and $15,250 per day thereafter. The Company took delivery of the vessel in the fourth quarter of 2018. 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%. On March 17, 2022, the Company has further extended the lease to a minimum period of ten months and maximum period of twelve months with an option to further extension of minimum ten months and twelve months period. The Company has increased the lease liability and the corresponding right-of-use asset by $6.9 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of March 31, 2022. 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 March 17, 2022 was 4.48%.
(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%.
(v) On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for a period of a minimum of twelve months and a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5% of the BSI 58 average of 10 time charter routes published by the Baltic Exchange each business day. The Company has the option to extend the lease term for another year, during which time the 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. No right-of-use asset or corresponding liability has been recognized in the Condensed Consolidated Balance Sheet as of March 31, 2022 since the Company did not take delivery of the vessel and as such lease term has not begun yet.
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 $0.1 million which is recorded as Restricted cash - noncurrent in the accompanying Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021.

In November 2018, the Company entered into an office lease agreement in Singapore, which 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 the corresponding right-of-use asset by $1.3 million in its Condensed Consolidated Balance Sheet as of December 31, 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. On February 15, 2022, the Company took possession of the additional office space. The Company has recognized $0.5 million of lease liability and corresponding right-of-use asset in its Condensed Consolidated Balance Sheet as of March 31, 2022. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the
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Company's implied credit rating and the yield curve for debt as of February 15, 2022 was 5.7%.
The Company determined the 3 office leases 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 months ended March 31, 2022 and 2021.
Operating lease right-of-use assets and lease liabilities as of March 31, 2022 and December 31, 2021 are as follows:


DescriptionLocation in Balance Sheet
March 31, 2022 (1)
December 31, 2021 (1)
Noncurrent assets:(In thousands)
Chartered-in contracts greater than 12 monthsOperating lease right-of-use assets$16,377 $15,039 
Office leasesOperating lease right-of-use assets2,277 1,978 
Operating lease right-of-use assets$18,654 $17,017 
Liabilities:
Chartered-in contracts greater than 12 monthsCurrent portion of operating lease liabilities$14,966 $15,039 
Office leasesCurrent portion of operating lease liabilities783 689 
Lease liabilities - current portion$15,749 $15,728 
Chartered-in contracts greater than 12 monthsNoncurrent portion of operating lease liabilities$1,412 $— 
Office leasesNoncurrent portion of operating lease liabilities$1,487 $1,282 
Lease liabilities - noncurrent portion$2,899 $1,282 

(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 1.33% to 6.08%. The weighted average discount rate used to calculate the lease liability was 2.88%.


F-17

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 months ended March 31, 2022 and 2021:

(In thousands)Three Months Ended
DescriptionLocation in Statement of OperationsMarch 31, 2022March 31, 2021
Lease expense for chartered-in contracts less than 12 monthsCharter hire expenses$17,139 $5,487 
Lease expense for chartered-in contracts greater than 12 monthsCharter hire expenses5,572 2,993 
Total charter hire expenses$22,711 $8,480 
Lease expense for office leasesGeneral and administrative expenses$197 $184 
Sublease income from chartered-in contracts greater than 12 months *Revenues, net$8,327 $1,146 

* 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 months ended March 31, 2022 and 2021.

The cash paid for operating leases with terms greater than 12 months is $5.8 million and $3.4 million for the three months ended March 31, 2022 and 2021, respectively.

On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for a period of a minimum of twelve months and a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5% of the BSI 58 average of 10 time charter routes published by the Baltic Exchange each business day. The Company has the option to extend the lease term for another year, during which time the 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 operating lease contracts greater than 12 months is 12.40 months.


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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 March 31, 2022:

Supplemental Disclosure InformationChartered-in contracts greater than 12 monthsOffice leasesTotal Operating leases
(In thousands, except percentages)
Year:
Nine months ending December 31, 2022$13,042 $645 $13,687 
20233,472 617 4,089 
2024— 373 373 
2025— 372 372 
2026— 372 372 
2027— 74 74 
$16,514 $2,453 $18,967 
Present value of lease liability:
Lease liabilities - short term$14,966 $783 $15,749 
Lease liabilities - long term1,412 1,487 2,899 
Total lease liabilities$16,378 $2,270 $18,648 
Discount based on incremental borrowing rate$136 $183 $319 

Note 9. Revenue

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 months ended March 31, 2022 and 2021 was $11.7 million and $3.9 million, respectively.

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The following table shows the revenues earned from time charters and voyage charters for the three months ended March 31, 2022 and 2021:
Three Months Ended
(In thousands)March 31, 2022March 31, 2021
Time charters$77,974 $29,240 
Voyage charters106,424 67,332 
$184,398 $96,572 
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 asset and are amortized on a straight-line basis as the related performance obligations are satisfied. As of March 31, 2022 and December 31, 2021, the Company recognized $0.8 million and $0.5 million, respectively, 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 Sheets.


Note 10. Net income/(loss)income per Common Share
The computation of basic net income/(loss)income per share is based on the weighted average number of common stock outstanding for the three and nine months ended September 30, 2021March 31, 2022 and 2020.2021. Diluted net income/(loss)income per share gives effect to restricted stock awards, restricted stock units and stock options using the treasury stock method, unless the impact is anti-dilutive. Diluted net income per share for three and nine months ended September 30, 2021 does not include 21,718 warrants and 28,046 restricted 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 net income per share for the three and nine months ended September 30, 2021.March 31, 2022. 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 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, 2021March 31, 2022 as their effect was Dilutive.dilutive. Diluted net lossincome per share for the three and nine months ended September 30, 2020March 31, 2021 does not include 222,775 stock awards, 326,024325,591 stock options, 21,718 warrants, and 21,752 warrants,the potential shares to be issued upon conversion of Convertible Bond Debt as their effect was anti-dilutive.
The following table summarizes the calculation of basic and diluted income/(loss)income per share:
Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Net income/(loss)$78,341,270 $(11,159,286)$97,415,605 $(35,178,372)
Weighted Average Shares - Basic12,802,401 10,279,698 12,237,288 10,274,906 
Dilutive effect of stock options, shares issuable under Convertible Bond Debt and restricted stock awards3,133,973 — 3,117,193 — 
Weighted Average Shares - Diluted15,936,374 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)
Three Months Ended
(In thousands, except share and per share data)
March 31, 2022March 31, 2021
Net income$53,073 $9,849 
Weighted Average Shares - Basic12,974,125 11,729,492 
Dilutive effect of stock options, shares issuable under Convertible Bond Debt, restricted stock awards and restricted stock units3,280,773 15,076 
Weighted Average Shares - Diluted16,254,898 11,744,568 
Basic net income per share$4.09 $0.84 
Diluted net income per share$3.27 $0.84 

Note 9.11. Stock Incentive Plans
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
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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 20212022 at the fair market value equivalent to the maximum statutory tax withholding obligation and remitted that amount in cash to the appropriate taxation authorities.
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On February 19, 2021,11, 2022, the Company granted 92,32731,781 restricted shares as a company-wideCompany-wide grant under the 2016 Plan. The aggregate fair value of the grant is $1.7 million based on the closing share price of $52.32 on February 19, 2021 was $2.8 million.11, 2022. The shares will vest in equal installments over a three-year term.on January 2, 2023, January 2, 2024 and January 2, 2025. Additionally, on March 11, 2022, the Company granted 4,3417,451 shares of fully vested common stock to its board of directors. The aggregate fair value of the director grant is $0.5 million based on the closing share price of February 19, 2021 was $0.1 million.$65.88 on March 11, 2022. The amortization of the above grants is $0.4 million and $1.3$0.6 million for the three and nine months ended September 30, 2021,March 31, 2022, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations.
On September 3, 2021,March 11, 2022, the Company granted 17,72717,661 shares of time-based awardsrestricted stock units ("RSUs") to certain members of its senior management team under the 2016 Plan. The awardsunits vest in three equal installments on September 3, 2022, September 3,January 2, 2023, January 2, 2024 and September 3, 2024.January 2, 2025. The aggregate fair value of these awardsunits is $1.2 million based on the closing share price of $65.88 on September 3, 2021 was $0.9 million.March 11, 2022. The amortization of the above grant is $0.05 million for the three and nine months ended September 30, 2021,March 31, 2022, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations.
AlsoAs discussed further below, on September 3, 2021,March 11, 2022, the Company granted performance based restricted stock grantsperformance-based RSUs to certain members of its senior management team under the 2016 Plan, which are contingent on certain performance criteria. The maximum number of performance-based stock awardsRSUs that can be issued are 53,182.earned is 52,982.
Of the maximum 53,18217,661 target performance-based stock awards granted, 35,454 shares at maximumRSUs were granted based on earnings per share ("EPS performance") for the yearperformance period beginning January 1, 2022 and ending December 31, 20212022 (with targets set forth earlier induring the year)three months ended March 31, 2022). Restricted shares whichThe RSUs will vest in three substantially equal installments (subject to achievement of performance criteria)criteria as of December 31, 2022) with the first installment vesting upon certification by the Compensation Committee and the second and third installments on September 3, 2022, September 3, 2023January 2, 2024 and September 3, 2024.January 2, 2025, respectively. The total RSUs eligible to vest ranges from zero to 200% of the target number granted based on the EPS performance. The aggregate grant-date fair value of these awardsRSUs is $1.2 million based on the closing share price of $65.88 on September 3, 2021 was $1.8 million.March 11, 2022 and assuming the target number is probable of vesting. The EPS performance is considered to be a performance condition under ASC 718, "ShareShare based payment awards"awards, and therefore, the stock basedstock-based compensation expense is initially recorded based on the probable outcome that the performance condition will be achieved.achieved as of the grant date with subsequent adjustments to the probable outcome over time. The ultimate expense recognized is based on the actual performance outcome at the end of the performance period. As of September 30, 2021,March 31, 2022, the Company estimated that the performance conditiontarget (100%) will be met and recorded $0.1 million as stock baseda de minimus amount of stock-based compensation expense, which is included in General and administrative expenses in its Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021.March 31, 2022.
Of the maximum 53,1828,830 performance-based stock awards granted, 17,728 shares at maximumRSUs were granted based on relative total shareholder return ("TSR performance") for the yearperformance period beginning January 1, 2022 and ending December 31, 2021. Restricted shares which2022 (with targets set forth during the three months ended March 31, 2022). These market-based RSUs will vest in three substantially equal installments (subject to achievement of performance criteria as of December 31, 2022) with the first installment vesting upon certification by the Compensation Committee and the second and third installments on September 3, 2022, September 3, 2023January 2, 2024 and September 3, 2024.January 2, 2025, respectively. The total RSUs eligible to vest ranges from 0 to 200% of the target number granted based on the TSR performance. All the vested TSR performance sharesunits 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.period. The TSR performance is calculated based on average daily closing stock price over a 20-trading-day period at each of the beginning and endingend of the performance period.period and is adjusted to reflect dividend payments by assuming additional shares are purchased with the dividend payments. The aggregate fair value of the TSR performance awards, which was calculated using a Monte Carlo simulation model, was $0.5$0.7 million. The assumptions used in the model were risk-free rate of return of 0.05%1.05% based on 4-monthcontinuously compounded yield on zero-coupon treasury rates as of September 3, 2021;March 11, 2022; expected volatility of 55.66%54.74% based on 1-year historical daily volatility of the closing share prices for the Company; a dividend yield of 12.45%; and 8.1%11.41% discount applied for the 1-year holding period using the Finnerty model. Volatility for each of the peer companies as well as the correlation of returns between each of the companies was also determined as inputs into the Monte Carlo model. The Company recorded $0.02 million asa de minimus amount of stock-based compensation expense, which is included in General and administrative expenses in its Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021.March 31, 2022.
As of September 30, 2021March 31, 2022 and December 31, 2020,2021, stock awards, including RSUs, covering a total of 209,772231,894 and 218,013246,962 shares of the Company’s common stock, respectively, are outstanding under the 2016 Plan. The vesting terms range between one toare generally three years from the grant date.date, or as described above in the March 11, 2022 RSU grants. The Company is amortizing the grant date fair value of non-vested stock awards to stock-based compensation expense included in General and administrative expenses the fair value of non-vested stock awards at the grant date.expenses.
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As of September 30, 2021 and December 31, 2020,2021, 47,568 vested stock options covering 309,163 and 312,591 shares of the Company’s common stock, respectively, arewere outstanding with exercise prices ranging from $29.96$32.97 to $38.92 per share. InDuring the ninethree months ended September 30, 2021, 16,428March 31, 2022, all 47,568 stock options were exercised. In connection with the exercise, 4,9748,077 shares of common stock were issued and 11,45439,491 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,March 31, 2022 and December 31, 2021, there were no unvested options outstanding. As of December 31, 2020, there were 13,000 unvested options outstanding. All options expire within five years from the effective date.
Stock-based compensation expense for all stock awards, units and options included in General and administrative expenses:
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Three Months EndedNine Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
Stock awards/Stock Option Plans$777,468 $741,021 $2,235,279 $2,300,444 
Three Months Ended
(In thousands)March 31, 2022March 31, 2021
Stock awards/Stock Option Plans$1,487 $872 
The future compensation to be recognized for all the grants for the threenine months ending December 31, 2021,2022, and the years ending December 31, 20222023 and 20232024 will be $1.1$4.5 million, $2.6 million and $1.0$0.8 million, respectively.

Note 10.12. Cash, cash equivalents, and restricted cash

The following table provides a reconciliation of Cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the amounts shown in the Condensed Consolidated Statements of Cash Flows:

September 30, 2021December 31, 2020September 30, 2020December 31, 2019
(In thousands)(In thousands)March 31, 2022December 31, 2021March 31, 2021December 31, 2020
Cash and cash equivalentsCash and cash equivalents$100,011,694 $69,927,594 $83,408,816 $53,583,898 Cash and cash equivalents$83,602 $86,147 $76,192 $69,928 
Restricted cash - current *Restricted cash - current *25,557,674 18,846,177 1,872,244 5,471,470 Restricted cash - current *— — 4,446 18,846 
Restricted cash - noncurrent *Restricted cash - noncurrent *75,000 75,000 — 74,917 Restricted cash - noncurrent *75 75 75 75 
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flowsTotal 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 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows$83,677 $86,222 $80,713 $88,849 

*Amounts included in restricted cash posted to secure the letter of credit on our office leases and the cash posted to a defeasance account as of September 30, 2021required to be utilized for redemption of the Norwegian Bond Debt. The cash was used in redemption ofset aside by the Norwegian Bond Debt, which was repaid on October 18, 2021.
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Note 11.13. Subsequent Events

On October 1, 2021, Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary of the Company, along with certain of 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 be used for refinancing the outstanding debt including accrued interest and commitment fees under the Norwegian Bond Debt, New Ultraco Debt Facility and Holdco Revolving Credit Facility ("Existing Facilities") and for 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 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 consisting of $176.0 million par value of the outstanding bonds, accrued interest of $5.2 million and $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,May 3, 2022, the Company's Board of Directors declared a cash dividend of $2.00 per share to be paid on or about November 24, 2021May 25, 2022 to shareholders of record at the close of business on November 15, 2021.May 16, 2022. The aggregate amount of the dividend is expected to be approximately $27.2$27.4 million, which the Company anticipates will be funded from cash on hand at the time the payment is to be made.


F-27F-22


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, 2021March 31, 2022 and 2020.2021. 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, 2020,2021, which were included in our Form 10-K, filed with the SEC on March 12, 2021.14, 2022 (the "Form 10-K"). For further discussion regarding our results of operations for the three and nine months ended September 30, 2020March 31, 2021 as compared to the three and nine months ended September 30, 2019March 31, 2020 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, 2020.March 31, 2021. 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, 2021,March 31, 2022, we owned and operated a modern fleet of 5253 Supramax/Ultramax dry bulk vessels. We chartered-in four Ultramax vessels which have a remaining lease term of approximately one year each. In addition, the Company charters in third-party vessels on a short to medium term basis.
Our owned fleet totals 5253 vessels, with an aggregate carrying capacity of 3,128,1073.19 million dwt and an average age of 9.19.5 years as of September 30, 2021.March 31, 2022.

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 own each of our vessels through a separate wholly-owned Marshall Islands limited liability company.
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.
 
    

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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 allcontinuously evaluate potential transactions that we believe will be accretive to earnings, enhance shareholder value or are in the best interests of ourthe Company, including without limitation, business combinations, the acquisition of 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 asor related businesses, repayment or refinancing of September 30, 2021:

VesselYear
Built		DwtCharter
Expiration		Daily Charter
Hire Rate		 
Antwerp Eagle201563,530 Nov 2021$32,500 
Bittern200957,809 Oct 2021Voyage
Canary200957,809 Oct 2021$36,250 
Cape Town Eagle201563,707 Nov 2021Voyage
Cardinal200455,362 Nov 2021$47,000 
Copenhagen Eagle201563,495 Oct 2021Voyage
Crane201057,809 Oct 2021$29,200 
Crested Eagle200955,989 Oct 2021Voyage
Crowned Eagle200855,940 Oct 2021Voyage
Dublin Eagle201563,549 Nov 2021Voyage
Egret Bulker201057,809 Oct 2021Voyage
Fairfield Eagle201363,301 Nov 2021$41,200 (1)
Gannet Bulker201057,809 Oct 2021Voyage
Golden Eagle201055,989 Oct 2021$47,500 
Grebe Bulker201057,809 Nov 2021$29,950 
2


Greenwich Eagle201363,301 Nov 2021$36,000 (2)
Groton Eagle201363,301 Oct 2022$35,000 
Hamburg Eagle201463,334 Oct 2021Voyage
Helsinki Eagle201563,605 Oct 2021Voyage
Hong Kong Eagle201663,472 Oct 2021$35,000 
Ibis Bulker201057,809 Nov 2021$53,850 
Imperial Eagle201055,989 Oct 2021$46,000 
Jaeger200452,483 Oct 2021Voyage
Jay201057,809 Oct 2021Voyage
Kingfisher201057,809 Jan 2022$44,500 
Madison Eagle201363,301 Oct 2021Voyage
Martin201057,809 Oct 2021$45,000 
Montauk Eagle201158,018 Oct 2021Voyage
Mystic Eagle201363,301 Oct 2021Voyage
New London Eagle201563,140 Nov 2021$42,000 
Newport Eagle201158,018 Oct 2021$31,000 
Nighthawk201157,809 Feb 2022$16,250 
Oriole201157,809 Oct 2021Drydock(3)
Oslo Eagle201563,655 Oct 2021$37,000 
Owl201157,809 Nov 2021$35,000 
Petrel Bulker201157,809 Oct 2021$26,000 
Puffin Bulker201157,809 Nov 2021$36,000 
Roadrunner Bulker201157,809 Nov 2021Voyage
Rotterdam Eagle201763,629 Oct 2021Voyage
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Rowayton Eagle201363,301 Oct 2021Voyage
Sandpiper Bulker201157,809 Oct 2021Voyage
Sankaty Eagle201158,018 Oct 2021Drydock(3)
Santos Eagle201563,537 Nov 2021$42,000 
Shanghai Eagle201663,438 Oct 2021$45,000 
Singapore Eagle201763,386 Jan 2022$24,000 
Southport Eagle201363,301 Nov 2021$52,000 
Stamford Eagle201661,530 Nov 2021$37,500 
Stellar Eagle200955,989 Nov 2021Voyage
Stockholm Eagle201663,275 Nov 2021$40,000 (4)
Stonington Eagle201263,301 Oct 2022$37,500 
Sydney Eagle201563,529 Oct 2021Voyage
Westport Eagle201563,344 Oct 2021$29,000 
(1)The vessel is contracted to continueexisting debt, the existing time charter at an increased daily rateissuance of $45,200 after November 10, 2021.
(2)The vessel is contracted to continue the existing time charter at an increased daily rate of $40,000 after October 31, 2021.
(3)The vessel is at a shipyard undergoing drydock repairs as of September 30, 2021.
(4)The vessel is contracted to continue the existing time charter at an increased daily rate of $44,000 after November 5, 2021.new securities, share repurchases or other transactions.

Business Outlook

COVID-19

In March 2020, the World Health Organization (the “WHO”) declared COVID-19, to be a pandemic. The COVID-19 pandemic has had, and 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 and vaccine mandates, travel restrictions, COVID testing guidelines and quarantine regulations.

The gross BSI continued to increase in the thirdfirst quarter of 20212022 and averaged $34,278/$25,156/day, up 109%51% as compared to the first quarter of 2021. Although rates were higher resulting in an improvement in profitability, some of 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 COVID-19. Our vessel operating expenses specifically crew change costs, COVID testing and quarantine related costs continue to be negatively impacted by COVID-19.

While the BSI is currently at $39,000$30,054 per day as of May 4, 2022, the economic activity levels as well as the demand for dry bulk cargoes may be negatively impacted 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 if the vaccine is not available on a
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widespread basis, the rate environment in the drybulk market and our vessel values may deteriorate and our operations and cash flows may be negatively impacted.

The impact of recent developments in Ukraine

In February 2022, as a result of the invasion of Ukraine by Russia, economic sanctions were imposed by the United States, the European Union, the United Kingdom and a number of other countries on Russian financial institutions, businesses and individuals, as well as certain regions within the Donbas region of Ukraine. While it is difficult to estimate the impact of current or future sanctions on the Company’s business and financial position, these sanctions could adversely impact the Company’s operations. In the near term, we have seen, and expect to continue to see, increased volatility in the region due to these geopolitical events. The Black Sea region is a major export market for grains with the Ukraine and Russia exporting a combined 15% of the global seaborne grain trade. While uncertainty remains with respect to the ultimate impact of the invasion of Ukraine by Russia, we have seen, and anticipate continuing to see, significant changes in trade flows. A reduction or stoppage of grain out of the Black Sea or cargoes from Russia has, and will continue to, negatively impact the markets in those areas. At the same time, it is possible for us to see an increase in ton miles as end users find alternative sources for cargo. For more information regarding the risks relating to economic sanctions as a result of Russia’s invasion of Ukraine as well as the impact on retaining and sourcing our crew, see Part I, Item 1A, "Risk Factors" of our Form 10-K.



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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, 2020,2021, filed with the SEC on March 12, 2021.14, 2022. 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, 2020.

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2021.
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
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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, 2021:March 31, 2022:
Fleet Data
We believe that the measures for analyzing future trends in our results of operations consist of the following:
    
Three Months EndedNine Months EndedThree Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020March 31, 2022March 31, 2021
Ownership DaysOwnership Days4,697 4,546 13,407 13,646 Ownership Days4,770 4,199 
Chartered-in DaysChartered-in Days563 535 1,718 1,664 Chartered-in Days960 658 
Available DaysAvailable Days4,931 4,940 14,403 14,818 Available Days5,397 4,648 
Operating DaysOperating Days4,908 4,905 14,308 14,698 Operating Days5,381 4,622 
Fleet Utilization (%)Fleet Utilization (%)99.5 %99.3 %99.3 %99.2 %Fleet Utilization (%)99.7 %99.4 %
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 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 ninethree months ended September 30, 2021,March 31, 2022, the Company completed drydock for sixfour vessels and two vessels wereone vessel was in drydock as of September 30, 2021.March 31, 2022.
•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.

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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. 
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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, 2021March 31, 2022 and 2020.2021.

For the Three Months EndedFor the Nine Months EndedFor the Three Months Ended
September 30, 2021September 30, 2020September 30, 2021September 30, 2020
(In thousands)(In thousands)March 31, 2022March 31, 2021
Revenues, netRevenues, net$183,392,700 $68,182,301 $409,815,454 $199,952,404 Revenues, net$184,398 $96,572 
Less: Voyage expensesLess: Voyage expenses$30,272,949 $19,627,919 $81,410,602 $69,960,025 Less: Voyage expenses$43,627 $26,615 
Less: Charter hire expensesLess: Charter hire expenses$10,723,737 $5,060,503 $25,373,501 $15,820,809 Less: Charter hire expenses$22,711 $8,480 
Net charter hire incomeNet charter hire income$142,396,014 $43,493,879 $303,031,351 $114,171,570 Net charter hire income$118,060 $61,477 
% Net charter hire income from% Net charter hire income from% Net charter hire income from
Time chartersTime charters55 %51 %55 %52 %Time charters53 %46 %
Voyage chartersVoyage charters45 %49 %45 %48 %Voyage charters47 %54 %

Net income/(loss)income
For the three months ended September 30, 2021,March 31, 2022, the Company reported net income of $78.3$53.1 million, or basic and diluted income of $6.12$4.09 per share and $4.92$3.27 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$9.8 million, or basic and diluted income of $7.96$0.84 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.share.
Revenues
Our revenues are derived from time and voyage charters. Net time and voyage charter revenues for the three months ended September 30, 2021March 31, 2022 were $183.4$184.4 million compared with $68.2$96.6 million recorded in the comparable quarter in 2020.2021. The increase in revenues was primarily attributable to higher charter rates as a result of the market recovery with increase in demand for drybulk products.
Net time and voyage charter revenues for the nine months ended September 30, 2021 and 2020 were $409.8 million and $200.0 million, respectively. The increase in revenues was primarily due to higher charter rates offset by a decrease in available days due to fewer owned days.
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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 owner's account. Voyage expenses for the three months ended September 30,March 31, 2022 and 2021 and 2020 were $30.3$43.6 million and $19.6$26.6 million, respectively. The increase in voyage expenses was primarily due to an increase in bunker consumption expense as bunker fuel prices increased in the current yearfirst quarter, as well as an increase in voyage charter business and an increase in broker commission expense as a result of the increase in revenues.
Voyage expenses for the nine months ended September 30, 2021 and 2020 were $81.4 million and $70.0 million, respectively. The increase in voyage expenses was primarily due to an increase in bunker consumption expense and an increase in broker commission expense as a result of the increase in revenues.
Vessel operating expenses
Vessel operating expenses for the three months ended September 30, 2021March 31, 2022 were $28.1$27.9 million compared to $21.7$21.5 million in the comparable quarter in 2020.2021. The increase in vessel operating expenses was primarily attributable to increaseshigher owned days and an increase in lubes expensevessel upgrades as a result of an increase in prices as well as higher inventory levelsrepairs and vessel start-up expenses as the Company purchased twoupgrades performed while vessels were in the third quarter of 2021.drydock. 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,March 31, 2022 and 2021 were 4,770 and 2020 were 4,697 and 4,546,4,199, respectively.
Vessel expenses for the nine months ended September 30, 2021 and 2020 were $73.3 million and $65.7 million, respectively. The increase in vessel expenses was primarily attributable to an increase in lubes expense as a result of an increase in prices, consumption due to increase in vessel speeds as well as higher inventory levels, increase in stores and spares delivery costs, crew wages, crew changes due to ongoing COVID-19 pandemic, and vessel start-up expenses as the Company purchased and took delivery of eight vessels during 2021. The ownership days for the nine months ended September 30, 2021 and 2020 were 13,407 and 13,646, respectively.
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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, 2021March 31, 2022 were $10.7$22.7 million compared to $5.1$8.5 million in the comparable quarter in 2020.2021. The increase in charter hire expenses was principally due to an increase in charter hire rates due to 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, 2021 were 563 compared to 535 for the comparable quarter in the prior year. The Company currently charters in four Ultramax vessels on a long term basis with remaining lease terms of approximately one year.
The charter hire expenses for the nine months ended September 30, 2021 and 2020 were $25.4 million and $15.8 million, respectively. The increase in charter hire expenses was primarily due to an increase in charter hire rates due to improvement in the charter hire market and an increase in the number of chartered-in days.market. The total chartered-in days for the ninethree months ended September 30,March 31, 2022 were 960 compared to 658 for the comparable quarter in the prior year. Between 2017 and 2021, the Company entered into a series of agreements to charter five Ultramax vessels on a long term basis. The minimum chartered-in periods ranged between one and 2020four years with an option to extend the duration between three and 24 months. Four of those five vessels were 1,718 and 1,664, respectively.chartered-in as of March 31, 2022. The remaining vessel will be delivered during the second quarter of 2022.
Depreciation and amortization

For the three months ended September 30,March 31, 2022 and 2021, and 2020, total depreciation and amortization expense was $13.6
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$14.6 million and $12.6$12.5 million, respectively. Total depreciation and amortization expense for the three months ended September 30, 2021March 31, 2022 includes $11.4$11.7 million of vessel and other fixed assets depreciation and $2.2$2.9 million relating to the amortization of deferred drydocking costs. Comparable amounts for the three months ended September 30, 2020March 31, 2021 were $10.8$10.5 million of vessel and other fixed assets depreciation and $1.8$2.0 million of amortization of deferred drydocking costs. The increase in depreciation expense is due to the acquisition of eightnine Ultramax vessels duringin 2021, offset by the year. The increasesale of one vessel in drydock expense is related to nine additional drydocks completed since the third quarter of 2020.
For the nine months ended September 30, 2021 and 2020, total depreciation and amortization expense was $39.2 million and $37.6 million, respectively. Total depreciation and amortization expense for the nine months ended September 30, 2021 includes $33.0 million of vessel and other fixed asset depreciation and $6.2 million relating to the2021. The increase in amortization of deferred drydocking costs. Comparable amounts for the nine months ended September 30, 2020 were $32.1 million of vessel and other fixed asset depreciation and $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 expensecosts is related to nine additionalcompleting eleven drydocks completed since the thirdfirst quarter of 2020.2021.
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 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,March 31, 2022 and 2021 and 2020 were $7.9$10.1 million and $8.0$7.7 million, respectively. General and administrative expenses include a stock-based compensation component of $0.8$1.5 million and $0.7$0.9 million for the three months ended September 30,March 31, 2022 and 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 $2.2 million and $2.3 million for 2021 and 2020, respectively. The increase in general and administrative expenses relateswas mainly attributable to an increase in office expenses as our employees returned to our offices, compensation expenses and fees for legal and professional services.consulting expenses, compensation and benefits, and stock-based compensation expense.
Other operating expense
Other operating expense for the three and nine months ended September 30,March 31, 2022 and 2021 was $0.8$0.1 million and $2.3$1.0 million, respectively. 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 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 offhire, crew changes and travel costs.
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Interest expense
Our interest expense for the three months ended September 30,March 31, 2022 and 2021 and 2020 was $8.5$4.4 million and $9.0$8.3 million, respectively. The decrease in interest expense is mainly due to lower outstanding debt under the Norwegian Bond and the New Ultraco Debt Facility 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 the first quarter of 2021.
The interest expense for the nine months ended September 30, 2021 and 2020 was $25.6 million and $26.9 million, respectively. The decrease in interest expense was primarily due to a decrease in outstanding debt under the Norwegian Bond Debt and a decrease inlower interest rates as well asdue to the outstandingrefinancing of the Company's debt underin the New Ultraco Debt Facility.
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fourth quarter of 2021.
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,March 31, 2022 and 2021, and 2020, the amortization of debt issuance costs was $2.0$0.6 million and $1.6 million, respectively. For the nine months ended September 30, 2021 and 2020, the amortization of debt issuance costs was $5.4 million and $4.7 million, respectively. The interest expense for the three and nine months ended September 30,March 31, 2021 includes $1.1$1.0 million and $3.2 million, respectively of interest expense representing the amortization of the equity component of the Convertible Bond Debt. The Company adopted ASU 2020-06 as of January 1, 2022 under the modified retrospective approach. The Convertible Bond Debt will no longer require bifurcation and separate accounting of the equity component. Please refer to Note 4 Debt2, Recent Accounting Pronouncements, to the condensed consolidated financial statements for further information.

Realized and unrealized loss/(gain)loss on derivative instruments, net
Realized and unrealized loss on derivative instruments, net for the three months ended September 30,March 31, 2022 and 2021 and 2020 was $9.0$7.9 million and $3.0$0.7 million, respectively. The increase in realized and unrealized losses is primarily related to $12.5 million in losses incurred on our frieghtfreight forward agreements as a result of tthe sharpthe increase in charter hire rates.
Realized and unrealized loss on derivative instruments, net for the nine months ended September 30, 2021 was $45.6rates, partially offset by $4.6 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.bunker swap gains. 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 EndedThree Months Ended
September 30, 2021September 30, 2020
Net cash provided by/(used in) operating activities$120,914,949 $(2,346,990)
(In thousands)(In thousands)March 31, 2022March 31, 2021
Net cash provided by operating activitiesNet cash provided by operating activities$42,254 $14,333 
Net cash used in investing activitiesNet cash used in investing activities(106,767,451)(17,529,527)Net cash used in investing activities(3,937)(53,385)
Net cash provided by financing activities22,648,099 46,027,292 
Net increase in cash, cash equivalents and restricted cash36,795,597 26,150,775 
Net cash (used in)/provided by financing activitiesNet cash (used in)/provided by financing activities(40,862)30,916 
Net decrease in cash, cash equivalents and restricted cashNet decrease in cash, cash equivalents and restricted cash(2,545)(8,136)
Cash, cash equivalents and restricted cash at beginning of periodCash, cash equivalents and restricted cash at beginning of period88,848,771 59,130,285 Cash, cash equivalents and restricted cash at beginning of period86,222 88,849 
Cash, cash equivalents and restricted cash at end of periodCash, cash equivalents and restricted cash at end of period$125,644,368 $85,281,060 Cash, cash equivalents and restricted cash at end of period$83,677 $80,713 
Net cash provided by operating activities during the ninethree months ended September 30,March 31, 2022 and 2021 was $120.9$42.3 million compared to netand $14.3 million, respectively. The increase in cash used inflows provided by operating activities of $2.3 million forresulted primarily from the nine months ended September 30, 2020. The cash flows from operating activities increased as compared to the same periodincrease in the prior year primarilyrevenues due to the increase inhigher charter hire rates.
Net cash used in investing activities during the ninethree months ended September 30,March 31, 2022 and 2021 and 2020 was $106.8$3.9 million and $17.5$53.4 million, respectively. During the ninethree months ended September 30, 2021,March 31, 2022, the Company purchased eight vessels for $107.8 million and paid $2.2 million as an advance for the purchase of one vessel delivered in the fourth quarter of 2021. The Company paid $4.6$3.5 million for the purchase of ballast water treatment systems on our fleet. Additionally, the Company paid $1.6$0.3 million for vessel improvements. This use of cash was partially offset by the proceeds from the sale of one vessel for net proceeds of $9.2 million. The Company also received insurance proceeds ofimprovements and $0.2 million for hull and machinery claims.other fixed assets. Please refer to Note 3, Vessels, to the condensed consolidated financial statements for further information.
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Net cash used in financing activities during the three months ended March 31, 2022 was $40.9 million compared to net cash provided by financing activities duringof $30.9 million for the ninethree months ended September 30, 2021 and 2020 was $22.6 million and $46.0 million, respectively.March 31, 2021. During the ninethree months ended September 30, 2021,March 31, 2022, the Company received $55.0 million in proceeds from the revolver loan under the New Ultraco Debt Facility, $16.5 million in proceeds from the New Ultraco Debt Facility, $24.0 million in proceeds from the Holdco Revolving Credit Facility and $27.2 million in net proceeds from the ATM Offering. The Company repaid $24.3$12.5 million of the NewGlobal Ultraco Debt Facility, $4.0 million of the Norwegian Bond Debt, $55.0 million of the revolver loan under the New Ultraco Debt Facility and $15.0 million of the revolver loan under the Super Senior Facility. The Company also paid $1.0$26.8 million in dividends and $1.9 million to settle net share equity awards. Additionally, the Company paid $0.3 million to the lenders of the Holdco Revolving Credit Facility, $0.3 million to the lenders of the New Ultraco Debt Facility and $0.3 million of financing costs related to the equity 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,
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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, 2021,March 31, 2022, our cash and cash equivalents including restricted cash was $125.6$83.7 million, compared to $88.8$86.2 million at December 31, 2020.2021. The Company had restricted cash of $25.6$0.1 million and $18.9$0.1 million as of September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
In addition, as of March 31, 2022, we had $100.0 million in an undrawn revolver facility available under the Global Ultraco Debt Facility.
As of September 30, 2021,March 31, 2022, the Company’s debt consisted of $176.0 million in outstanding bonds under the Norwegian Bond Debt, net of $1.6 million of debt discount and debt issuance costs, the NewGlobal Ultraco Debt Facility of $158.7$275.1 million, net of $2.8$8.1 million of debt discount and debt issuance costs, and the Convertible Bond Debt of $114.1 million, net of $14.3$1.0 million of debt discount and issuance costs, and the Holdco Revolving Credit Facility of $24.0 million, net of $0.2 million of debt issuance costs.
On October 1, 2021, we entered into 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 used for refinancing the outstanding debt including accrued interest and commitment fees under the existing facilities and for general corporate purposes. Pursuant to the credit agreement, the Company borrowed $350.0 million and together with cash on hand repaid the outstanding debt, accrued interest and commitment fees under the existing facilities. Please see Note 11 Subsequent Events for additional information.

We believe that our current financial resources, improved charter hire rates for the 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 general charter 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 ninethree months ended September 30, 2021, sixMarch 31, 2022, four of our vessels completed drydock and two vessels wereone vessel was in drydock as of September 30, 2021,March 31, 2022, and we incurred drydocking expenditures of $10.7$10.8 million. In the ninethree months ended September 30, 2020, eightMarch 31, 2021, four of our vessels completed drydock and we incurred drydocking expenditures of $10.8$4.8 million.
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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 (1) (in millions)
Projected Costs (1) (in millions)
Quarter EndingQuarter Ending
Off-hire Days(2)
BWTSDrydocks
Vessel Upgrades(3)
Quarter Ending
Off-hire Days(2)
BWTSDrydocks
Vessel Upgrades(3)
December 31, 2021319 $3.3 $5.5 $1.2 
March 31, 2022252 2.4 4.6 0.8 
June 30, 2022June 30, 2022189 0.4 1.2 0.4 June 30, 2022213 $0.5 $3.1 $0.6 
September 30, 2022September 30, 202276 — 0.2 — September 30, 2022139 $0.3 $2.7 $0.2 
December 31, 2022December 31, 2022118 $0.6 $2.1 $0.2 
March 31, 2023March 31, 2023120 $0.1 $2.6 $0.4 
(1) 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) 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 new Panama Canal locks, as well as other retrofitted fuel-saving devices. Vessel upgrades are discretionary in nature and evaluated on a business case-by-case basis.

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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. 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.
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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, 2020,2021, filed with the SEC on March 12, 2021.14, 2022. 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, 2021,March 31, 2022, 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, 2021.March 31, 2022.
Changes in Internal Controls.
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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, 2021March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

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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
There 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, 2020,2021, filed with the SEC on March 12, 2021.14, 2022. The risks described in the Annual Report on Form 10-K for the year ended December 31, 20202021 are not the only risks 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.
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ITEM 6 – Exhibits
EXHIBIT INDEX

101*The following materials from Eagle Bulk Shipping Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021,March 31, 2022, formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2021March 31, 2022 and December 31, 2020,2021, (ii) Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30,March 31, 2022 and 2021, and 2020, (iii) Condensed Consolidated Statements of Comprehensive income/(loss)income (unaudited) for the three and nine months ended September 30,March 31, 2022 and 2021, and 2020, (iv) Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, (v) Condensed Consolidated Statements of Cash Flows (unaudited) for the ninethree months ended September 30,March 31, 2022 and 2021, and 2020, and (vi) Notes to Condensed Consolidated Financial Statements (unaudited).
* Filed herewith.
** Furnished herewith.

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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 8, 2021May 9, 2022
By: /s/ Frank De Costanzo
--------------------------------------------------------------------------------
Frank De Costanzo
Chief Financial Officer
(Principal financial officer of the registrant)
Date: November 8, 2021May 9, 2022
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