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~~June 30, ~~2021~~2022


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

For the transition period from __________________ to __________________

Commission File Number 001-33831

EAGLE BULK SHIPPING INC.

(Exact name of Registrant as specified in its charter)


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

300 First Stamford Place, 5th floor

Stamford, Connecticut 06902

(Address of principal executive offices)(Zip Code)

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

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	EGLE	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

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

Yes

☒

☐

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

Large accelerated filer

☐

Accelerated filer

☒

Non-Accelerated filer

☐

Smaller reporting company

☒☐

Emerging growth company

☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

Number of shares of registrant’s common stock outstanding as of ~~November 5, 2021: 13,590,961~~August 3, 2022: 13,691,287

TABLE OF CONTENTS


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

	Condensed Consolidated Balance Sheets as of ~~September~~June 30 ~~30, 2021~~, 2022 and December 31, ~~2020~~2021	F-1

	Condensed Consolidated Statements of Operations for the three and six ~~nine~~months ended ~~September~~June 30 ~~30,~~, 2022 and 2021 ~~and 2020~~	F-2

	Condensed Consolidated Statements of Comprehensive ~~income/(loss)~~Income for the three and six ~~nine~~months ended ~~September~~June 30 ~~30,~~, 2022 and 2021 ~~and 2020~~	F-3

	Condensed Consolidated Statements of Stockholders' Equity for the ~~nine~~six months ended ~~September~~June 30 ~~30,~~, 2022 and 2021 ~~and 2020~~	F-4

	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30 ~~30,~~, 2022 and 2021 ~~and 2020~~	F-6

	Notes to Condensed Consolidated Financial Statements	F-7

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

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	1211

ITEM 4.	CONTROLS AND PROCEDURES	1211

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	1412
ITEM 1A.	RISK FACTORS	1412
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	1412
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	1412
ITEM 4.	MINE SAFETY DISCLOSURES	1412
ITEM 5.	OTHER INFORMATION	1412
ITEM 6.	EXHIBITS	1513
SIGNATURES		1614

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 docking~~drydocking 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"~~(“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

June 30, 2022 and December 31, 2021

(U.S. Dollars in ~~U.S. dollars~~thousands, except share data and ~~per share data)~~par values)

September 30, 2021 December 31, 2020
(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 100,011,694 $ 69,927,594
Restricted cash - current 25,557,674 18,846,177
Accounts receivable, net of a reserve of $2,169,958 and $2,357,191, respectively 24,243,815 13,843,480
Prepaid expenses 4,638,401 3,182,815
Inventories 17,091,901 11,624,833
Collateral on derivatives 31,369,664 —
Other current assets 1,689,972 839,881
Total current assets 204,603,121 118,264,780
Noncurrent assets:
Vessels and vessel improvements, at cost, net of accumulated depreciation of $206,815,553 and $177,771,755, respectively 898,405,068 810,713,959
Advance for vessel purchase 2,200,000 3,250,000
Operating lease right-of-use assets 22,845,697 7,540,871
Other fixed assets, net of accumulated depreciation of $1,346,243 and $1,137,562, respectively 309,625 489,179
Restricted cash - noncurrent 75,000 75,000
Deferred drydock costs, net 28,343,436 24,153,776
Advances for ballast water systems and other assets 5,875,314 2,639,491
Total noncurrent assets 958,054,140 848,862,276
Total assets $ 1,162,657,261 $ 967,127,056
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,169,624 $ 10,589,970
Accrued interest 7,075,532 4,690,135
Other accrued liabilities 14,660,495 11,747,064
Fair value of derivatives - current 24,381,090 481,791
Current portion of operating lease liabilities 21,094,309 7,615,371
Unearned charter hire revenue 17,045,647 8,072,295
Holdco Revolving Credit Facility, net of debt issuance costs 23,821,677 —
Current portion of long-term debt 42,666,521 39,244,297
Total current liabilities 165,914,895 82,440,923
Noncurrent liabilities:
Norwegian Bond Debt, net of debt discount and debt issuance costs 166,351,589 169,290,230
Super Senior Facility, net of debt issuance costs — 14,896,357
New Ultraco Debt Facility, net of debt issuance costs 121,182,097 132,083,949
Convertible Bond Debt, net of debt discount and debt issuance costs 99,813,315 96,660,485
Fair value of derivatives - noncurrent — 650,607
Noncurrent portion of operating lease liabilities 1,744,619 686,422
Total noncurrent liabilities 389,091,620 414,268,050
Total liabilities 555,006,515 496,708,973
Commitments and contingencies 0 0
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, respectively 128,640 116,618
Additional paid-in capital 982,652,311 943,571,685
Accumulated deficit (374,722,217) (472,137,822)
Accumulated other comprehensive loss (407,988) (1,132,398)
Total stockholders' equity 607,650,746 470,418,083
Total liabilities and stockholders' equity $ 1,162,657,261 $ 967,127,056


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS:
Current assets:
Cash and cash equivalents	$	138,955	$	86,147
Accounts receivable, net of a reserve of $1,921 and $1,818, respectively	43,948		28,456
Prepaid expenses	4,524		3,362
Inventories	25,193		17,651
Vessel held for sale	5,592		—
Collateral on derivatives	16,770		15,081
Fair value of derivative assets - current	8,459		4,669
Other current assets	929		667
Total current assets	244,370		156,033
Noncurrent assets:
Vessels and vessel improvements, at cost, net of accumulated depreciation of $237,490 and $218,670, respectively	885,255		908,076
Operating lease right-of-use assets	35,370		17,017
Other fixed assets, net of accumulated depreciation of $1,521 and $1,403, respectively	380		257
Restricted cash - noncurrent	2,575		75
Deferred drydock costs, net	46,930		37,093
Fair value of derivative assets - noncurrent	7,746		3,112
Advances for ballast water systems and other assets	3,983		4,995
Total noncurrent assets	982,239		970,625
Total assets	$	1,226,609	$	1,126,658
LIABILITIES & STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable	$	22,189	$	20,781
Accrued interest	3,008		2,957
Other accrued liabilities	17,766		17,994
Fair value of derivative liabilities - current	269		4,253
Current portion of operating lease liabilities	29,908		15,728
Unearned charter hire revenue	13,609		12,088
Current portion of long-term debt	49,800		49,800
Total current liabilities	136,549		123,601
Noncurrent liabilities:
Global Ultraco Debt Facility, net of debt issuance costs	205,221		229,290
Convertible Bond Debt, net of debt discount and debt issuance costs	113,253		100,954
Noncurrent portion of operating lease liabilities	5,455		1,282
Other noncurrent accrued liabilities	636		265
Total noncurrent liabilities	324,565		331,791
Total liabilities	461,114		455,392
Commitments and contingencies	0		0
Stockholders' equity:
Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued as of June 30, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value, 700,000,000 shares authorized, 12,989,181 and 12,917,027 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	130		129
Additional paid-in capital	963,482		982,746
Accumulated deficit	(210,854)		(313,495)
Accumulated other comprehensive income	12,737		1,886
Total stockholders' equity	765,495		671,266
Total liabilities and stockholders' equity	$	1,226,609	$	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 and Six Months Ended June 30, 2022 and 2021

(U.S. Dollars in ~~U.S. dollars~~thousands, except share and per share data)


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenues, net	Revenues, net	$	183,392,700	$	68,182,301	$	409,815,454	$	199,952,404	Revenues, net	$	198,695	$	129,851	$	383,093	$	226,423

Voyage expenses	Voyage expenses	30,272,949		19,627,919		81,410,602		69,960,025		Voyage expenses	36,290		24,523		79,917		51,138
Vessel operating expenses	Vessel operating expenses	28,125,682		21,748,531		73,323,785		65,680,913		Vessel operating expenses	27,207		23,679		55,122		45,198
Charter hire expenses	Charter hire expenses	10,723,737		5,060,503		25,373,501		15,820,809		Charter hire expenses	21,285		6,170		43,996		14,650
Depreciation and amortization	Depreciation and amortization	13,570,361		12,617,803		39,187,344		37,587,477		Depreciation and amortization	15,254		13,111		29,834		25,617
General and administrative expenses	General and administrative expenses	7,948,037		7,995,715		23,559,217		22,724,190		General and administrative expenses	9,891		7,913		19,945		15,611
Other operating expense	Other operating expense	791,572		—		2,311,816		—		Other operating expense	41		559		174		1,520
Operating lease impairment		—		—		—		352,368
(Gain)/loss on sale of vessel		(3,962,093)		389,207		(3,962,093)		389,207
Total operating expenses	Total operating expenses	87,470,245		67,439,678		241,204,172		212,514,989		Total operating expenses	109,968		75,955		228,988		153,734
Operating income/(loss)		95,922,455		742,623		168,611,282		(12,562,585)
Operating income										Operating income	88,727		53,896		154,105		72,689
Interest expense	Interest expense	8,511,117		8,954,200		25,561,676		26,883,094		Interest expense	4,338		8,799		8,785		17,050
Interest income	Interest income	(19,533)		(23,644)		(52,831)		(236,633)		Interest income	(174)		(15)		(219)		(32)
Loss on debt extinguishment		99,033		—		99,033		—
Realized and unrealized loss/(gain) on derivative instruments, net		8,990,568		2,971,353		45,587,799		(4,030,674)
Realized and unrealized (gain)/loss on derivative instruments, net										Realized and unrealized (gain)/loss on derivative instruments, net	(9,890)		35,887		(1,988)		36,597
Total other expense, net	Total other expense, net	17,581,185		11,901,909		71,195,677		22,615,787		Total other expense, net	(5,726)		44,671		6,578		53,615
Net income/(loss)		$	78,341,270	$	(11,159,286)	$	97,415,605	$	(35,178,372)
Net income										Net income	$	94,453	$	9,225	$	147,527	$	19,074

Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	12,802,401		10,279,698		12,237,288		10,274,906		Basic	12,988,200		12,168,180		12,981,202		11,950,048
Diluted	Diluted	15,936,374		10,279,698		15,354,481		10,274,906		Diluted	16,376,517		12,397,156		16,373,458		12,081,772

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 income										Basic net income	$	7.27	$	0.76	$	11.36	$	1.60
Diluted net income										Diluted net income	$	5.77	$	0.74	$	9.01	$	1.58

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 and Six Months Ended June 30, 2022 and 2021

(U.S. Dollars in thousands)

Three Months Ended Nine Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Net income/(loss) $ 78,341,270 $ (11,159,286) $ 97,415,605 $ (35,178,372)
Other comprehensive income/(loss):
Net unrealized gain/(loss) on cash flow hedges 80,206 (203,590) 724,410 (1,124,745)
Comprehensive income/(loss) $ 78,421,476 $ (11,362,876) $ 98,140,015 $ (36,303,117)


	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net income	$	94,453	$	9,225	$	147,527	$	19,074
Other comprehensive income:
Net unrealized gain on cash flow hedges	2,170		44		10,851		644
Comprehensive income	$	96,623	$	9,269	$	158,378	$	19,718

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 Six Months Ended June 30, 2022 and 2021

(U.S. Dollars in ~~U.S. dollars~~thousands, except ~~share and per~~ share data)

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

~~(1)~~ ~~Please see Note 3 Vessels for additional information.~~


	Common stock	Common stock amount		Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive income		Total stockholders’ equity
Balance at December 31, 2021	12,917,027	$	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 shares	60,890	1		(1)		—		—		—
Issuance of shares upon exercise of stock options	8,077	—		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, 2022	12,985,994	130		961,930		(278,858)		10,567		693,769
Net income	—	—		—		94,453		—		94,453
Dividends declared	—	—		—		(26,449)		—		(26,449)
Issuance of shares due to vesting of restricted shares	3,187	—		—		—		—		—
Unrealized gain on cash flow hedges	—	—		—		—		2,170		2,170
Cash used to settle net share equity awards	—	—		(53)		—		—		(53)
Stock-based compensation	—	—		1,605		—		—		1,605
Balance at June 30, 2022	12,989,181	$	130	$	963,482	$	(210,854)	$	12,737	$	765,495

F-4

Common
Stock* Common
Stock
Amount* Additional
Paid-in
Capital* Accumulated Deficit Accumulated other comprehensive loss Total Stockholders’
Equity
Balance at December 31, 2019 10,214,600 $ 102,146 $ 918,475,145 $ (437,074,354) $ — $ 481,502,937
Net loss — — — (3,527,759) — (3,527,759)
Issuance of shares due to vesting of restricted shares 62,526 626 (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, 2020 10,277,126 $ 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 shares 2,572 26 (26) — — —
Unrealized loss on cash flow hedges — — — — (649,287) (649,287)
Stock-based compensation — — 723,223 — — 723,223
Balance at June 30, 2020 10,279,698 $ 102,798 $ 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, 2020 10,279,698 $ 102,798 $ 919,601,123 $ (472,252,726) $ (1,124,745) $ 446,326,450

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


	Common stock	Common stock amount		Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive (loss)/income		Total stockholders’ equity
Balance at December 31, 2020	11,661,797	$	116	$	943,572	$	(472,138)	$	(1,132)	$	470,418
Net income	—	—		—		9,849		—		9,849
Issuance of shares due to vesting of restricted shares	71,146	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, 2021	11,732,943	117		943,600		(462,289)		(532)		480,896
Net income	—	—		—		9,225		—		9,225
Issuance of shares due to vesting of restricted shares	2,773	—		—		—		—		—
Issuance of shares upon conversion of warrants	432,037	4		8,371		—		—		8,375
Issuance of shares from ATM Offering, net of commissions and issuance costs	581,385	6		27,278		—		—		27,284
Issuance of shares upon exercise of stock options	4,117	—		22		—		—		22
Unrealized gain on cash flow hedges	—	—		—		—		44		44
Cash used to settle net share equity awards	—	—		(174)		—		—		(174)
Stock-based compensation	—	—		586		—		—		586
Balance at June 30, 2021	12,753,255	$	127	$	979,683	$	(453,064)	$	(488)	$	526,258

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)

~~(Unaudited)~~For the Six Months Ended June 30, 2022 and 2021

(U.S. Dollars in thousands)


		Nine Months Ended					Six Months Ended
		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021
Cash flows from operating activities:	Cash flows from operating activities:					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:
Net income						Net income	$	147,527	$	19,074
Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	Depreciation	32,951,082		32,085,266		Depreciation	23,573		21,538
Amortization of operating lease right-of-use assets	Amortization of operating lease right-of-use assets	10,535,980		9,388,238		Amortization of operating lease right-of-use assets	12,664		6,201
Amortization of deferred drydocking costs	Amortization of deferred drydocking costs	6,236,262		5,502,211		Amortization of deferred drydocking costs	6,261		4,079
Amortization of debt discount and debt issuance costs	Amortization of debt discount and debt issuance costs	5,442,978		4,654,871		Amortization of debt discount and debt issuance costs	1,092		3,467
Loss on debt extinguishment		99,033		—
(Gain)/loss on sale of vessel		(3,962,093)		389,207
Operating lease impairment		—		352,368
Net unrealized loss on fair value of derivatives		24,193,472		2,677,003
Net unrealized (gain)/loss on fair value of derivatives						Net unrealized (gain)/loss on fair value of derivatives	(1,393)		30,541
Stock-based compensation expense	Stock-based compensation expense	2,235,279		2,300,444		Stock-based compensation expense	3,092		1,458
Drydocking expenditures	Drydocking expenditures	(10,736,908)		(10,830,172)		Drydocking expenditures	(16,098)		(6,429)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts payable	Accounts payable	4,638,944		(4,135,537)		Accounts payable	1,793		8,216
Accounts receivable	Accounts receivable	(10,645,335)		2,956,653		Accounts receivable	(15,492)		(10,390)
Accrued interest	Accrued interest	2,385,397		1,850,383		Accrued interest	51		(131)
Inventories	Inventories	(5,467,068)		4,130,347		Inventories	(7,542)		(4,274)
Operating lease liabilities current and noncurrent	Operating lease liabilities current and noncurrent	(11,303,671)		(9,915,541)		Operating lease liabilities current and noncurrent	(12,664)		(6,664)
Collateral on derivatives	Collateral on derivatives	(31,369,664)		—		Collateral on derivatives	(1,689)		(33,499)
Fair value of derivatives, other current and noncurrent assets	Fair value of derivatives, other current and noncurrent assets	(1,149,973)		(5,905,400)		Fair value of derivatives, other current and noncurrent assets	(453)		(41)
Other accrued liabilities	Other accrued liabilities	1,897,863		(5,872,683)		Other accrued liabilities	(868)		(1,779)
Prepaid expenses	Prepaid expenses	(1,455,586)		1,906,748		Prepaid expenses	(1,162)		(1,112)
Unearned charter hire revenue	Unearned charter hire revenue	8,973,352		1,296,976		Unearned charter hire revenue	1,522		330
Net cash provided by/(used in) operating activities		120,914,949		(2,346,990)
Net cash provided by operating activities						Net cash provided by operating activities	140,214		30,585

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchase of vessels and vessel improvements	Purchase of vessels and vessel improvements	(109,384,938)		(605,660)		Purchase of vessels and vessel improvements	(495)		(79,002)
Advance for vessel purchase		(2,200,000)		—
Advances for vessel purchases						Advances for vessel purchases	—		(5,340)
Purchase of scrubbers and ballast water systems	Purchase of scrubbers and ballast water systems	(4,557,463)		(25,224,068)		Purchase of scrubbers and ballast water systems	(4,807)		(2,385)
Proceeds from hull and machinery insurance claims	Proceeds from hull and machinery insurance claims	245,000		3,749,779		Proceeds from hull and machinery insurance claims	—		238
Proceeds from sale of vessel		9,159,077		4,594,081
Purchase of other fixed assets	Purchase of other fixed assets	(29,127)		(43,659)		Purchase of other fixed assets	(241)		(14)
Net cash used in investing activities	Net cash used in investing activities	(106,767,451)		(17,529,527)		Net cash used in investing activities	(5,543)		(86,503)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from New Ultraco Debt Facility	Proceeds from New Ultraco Debt Facility	16,500,000		22,550,000		Proceeds from New Ultraco Debt Facility	—		11,000
Repayment of Norwegian Bond Debt	Repayment of Norwegian Bond Debt	(4,000,000)		(4,000,000)		Repayment of Norwegian Bond Debt	—		(4,000)
Repayment of term loan under New Ultraco Debt Facility	Repayment of term loan under New Ultraco Debt Facility	(24,258,223)		(20,923,319)		Repayment of term loan under New Ultraco Debt Facility	—		(15,897)
Repayment of revolver loan under New Ultraco Debt Facility	Repayment of revolver loan under New Ultraco Debt Facility	(55,000,000)		(20,000,000)		Repayment of revolver loan under New Ultraco Debt Facility	—		(30,000)
Repayment of revolver loan under Super Senior Facility	Repayment of revolver loan under Super Senior Facility	(15,000,000)		—		Repayment of revolver loan under Super Senior Facility	—		(15,000)
Proceeds from revolver loan under New Ultraco Debt Facility	Proceeds from revolver loan under New Ultraco Debt Facility	55,000,000		55,000,000		Proceeds from revolver loan under New Ultraco Debt Facility	—		55,000
Proceeds from revolver loan under Super Senior Facility		—		15,000,000
Proceeds from Holdco Revolving Credit Facility	Proceeds from Holdco Revolving Credit Facility	24,000,000		—		Proceeds from Holdco Revolving Credit Facility	—		24,000
Proceeds from issuance of shares under ATM Offering, net of commissions	Proceeds from issuance of shares under ATM Offering, net of commissions	27,242,417		—		Proceeds from issuance of shares under ATM Offering, net of commissions	—		27,372
Repayment of term loan under Global Ultraco Debt Facility						Repayment of term loan under Global Ultraco Debt Facility	(24,900)		—
Cash received from exercise of stock options	Cash received from exercise of stock options	55,578		—		Cash received from exercise of stock options	85		22
Cash used to settle net share equity awards	Cash used to settle net share equity awards	(985,686)		(1,161,301)		Cash used to settle net share equity awards	(1,915)		(986)
Equity offerings issuance costs	Equity offerings issuance costs	(291,830)		—		Equity offerings issuance costs	201		(292)
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 activities		22,648,099		46,027,292
Net increase in cash, cash equivalents and restricted cash		36,795,597		26,150,775
Financing costs paid to lenders						Financing costs paid to lenders	(18)		(351)
Dividends paid						Dividends paid	(52,816)		—
Net cash (used in)/provided by financing activities						Net cash (used in)/provided by financing activities	(79,363)		50,868
Net increase/(decrease) in cash, cash equivalents and restricted cash						Net increase/(decrease) in cash, cash equivalents and restricted cash	55,308		(5,050)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	88,848,771		59,130,285		Cash, cash equivalents and restricted cash at beginning of period	86,222		88,849
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	125,644,368	$	85,281,060	Cash, cash equivalents and restricted cash at end of period	$	141,530	$	83,799
SUPPLEMENTAL CASH FLOW INFORMATION	SUPPLEMENTAL CASH FLOW INFORMATION					SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest	Cash paid during the period for interest	$	17,462,440	$	20,377,697	Cash paid during the period for interest	$	7,123	$	13,420
Accruals for vessel purchases and vessel improvements included in Other accrued liabilities	Accruals for vessel purchases and vessel improvements included in Other accrued liabilities	$	499,578	$	—	Accruals for vessel purchases and vessel improvements included in Other accrued liabilities	$	6	$	229
Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities	Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities	$	3,258,545	$	5,915,948	Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities	$	3,010	$	3,346
Accruals for dividends payable included in Other accrued liabilities and Other noncurrent accrued liabilities						Accruals for dividends payable included in Other accrued liabilities and Other noncurrent accrued liabilities	$	1,237	$	—
Accrual for issuance costs for ATM Offering included in Other accrued liabilities	Accrual for issuance costs for ATM Offering included in Other accrued liabilities	$	104,080	$	—	Accrual for issuance costs for ATM Offering included in Other accrued liabilities	$	—	$	89
Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities	Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities	$	508,768	$	200,000	Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities	$	—	$	500

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~~June 30, ~~2021,~~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 ~~3,128,107~~3.19 million deadweight ~~tonnage ("dwt"~~tons (“dwt”) and an average age of approximately ~~9.1~~9.8 years. Additionally, the Company charters-in 45 Ultramax vessels on a long term basis with remaining lease ~~term~~terms 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~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the Company’s charterers did not individually account for more than 10% of the Company’s gross charter revenue during those periods.

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and the rules and regulations of the SEC that apply to interim financial statements and with the instructions to Form 10-Q and ~~Article 8~~Rule 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 ~~2020~~2021 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-average~~weighted 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

~~Leases~~Significant Accounting Policies

The ~~following~~Company'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-7

~~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 allows~~In 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 to~~financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 removes from U.S. GAAP the ~~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 recognized~~Convertible 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 ~~Company~~resulting debt discount will ~~continue~~no 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 basis~~interest 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 over~~bond and thus an adjustment to beginning retained earnings of $8.7 million was recorded within Accumulated deficit reflecting the ~~lease term, generally on~~cumulative 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 terms~~reversal 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%.

~~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.

~~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:~~

Description Location in Balance Sheet
September 30, 2021 (1)
December 31, 2020 (1)
Noncurrent assets:
Chartered-in contracts greater than 12 months Operating lease right-of-use assets $ 20,712,287 $ 6,207,253
Office leases Operating lease right-of-use assets 2,133,410 1,333,618
Operating lease right-of-use assets $ 22,845,697 $ 7,540,871
Liabilities:
Chartered-in contracts greater than 12 months Current portion of operating lease liabilities $ 20,451,549 $ 6,974,943
Office leases Current portion of operating lease liabilities 642,760 640,428
Lease liabilities - current portion $ 21,094,309 $ 7,615,371
Chartered-in contracts greater than 12 months Noncurrent portion of operating lease liabilities $ 253,970 $ —
Office leases Noncurrent 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 presents~~FASB has issued accounting standards that had not yet become effective as of June 30, 2022 and may impact the ~~components of the Company’s lease expenses~~Company'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 Ended Nine Months Ended
Description Location in Statement of Operations September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Lease expense for chartered-in contracts less than 12 months Charter hire expenses $ 5,856,694 $ 2,560,224 $ 13,511,509 $ 6,348,081
Lease expense for chartered-in contracts greater than 12 months Charter hire expenses 4,867,043 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 leases General and administrative expenses 188,880 185,525 465,269 548,349
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 average~~Effects of ~~10 time charter routes published by~~Reference 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 has~~anticipated transition away from the ~~option~~use of LIBOR and other interbank offered rates to ~~extend the lease term for~~alternative 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 hire~~reference rate ~~decreases to $10,750 per day with no change to the remaining terms. The vessel is~~ expected to be ~~delivered~~discontinued 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 quarter~~adoption of ~~2022.~~

~~The weighted average remaining lease term~~ASU 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~~

Year Chartered-in contracts greater than 12 months Office leases Total Operating leases
Discount rate upon adoption 5.37 % 5.80 % 5.48 %
Three months ending December 31, 2021 $ 5,675,982 $ 176,751 $ 5,852,733
2022 15,096,117 748,243 15,844,360
2023 — 510,074 510,074
2024 — 265,922 265,922
2025 — 265,195 265,195
2026 — 265,195 265,195
2027 — 53,766 53,766
$ 20,772,099 $ 2,285,146 $ 23,057,245
Present value of lease liability
Lease liabilities - short term $ 20,451,549 $ 642,760 $ 21,094,309
Lease liabilities - long term 253,970 1,490,649 1,744,619
Total lease liabilities $ 20,705,519 $ 2,133,409 $ 22,838,928
Discount based on incremental borrowing rate $ 66,580 $ 151,737 $ 218,317

~~Revenue recognition~~

~~Voyage charters~~

In a voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a 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 Ended Nine Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Time charters $ 91,652,577 $ 25,279,434 $ 180,385,272 $ 73,798,878
Voyage charters 91,740,123 42,902,867 229,430,182 126,153,526
$ 183,392,700 $ 68,182,301 $ 409,815,454 $ 199,952,404

~~Contract costs~~

In a voyage charter contract, the Company bears all voyage related costs such as fuel costs, port charges and canal tolls. These costs are considered contract fulfillment costs because the costs are direct 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~~June 30, ~~2021,~~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

~~F-12~~

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

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

On 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"~~(“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 1729 vessels and recorded ~~$8.5~~$17.3 million in Vessels and vessel improvements in the Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2021.~~2022. Additionally, the Company recorded ~~$5.3~~$3.2 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~~June 30, ~~2021.~~2022.

On June 8, 2022, the Company signed a memorandum of agreement to sell the vessel Cardinal for a total consideration of $15.8 million. The vessel will be delivered to the buyer during the third quarter of 2022. The Company recorded the carrying amount of the vessel of $5.6 million as Vessel held for sale in its Condensed Consolidated Balance Sheets as of June 30, 2022.

F-8

The Vessels and vessel improvements activity for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 is below:


(In thousands)
Vessels and vessel improvements, at December 31, ~~2020~~2021	$	~~810,713,959~~908,076
Purchase of vessels and vessel improvements	~~109,884,516~~466
~~Advances paid~~Vessel held for ~~vessel purchases as of December 31, 2020~~sale	~~3,250,000~~
~~Fair value of warrants issued as consideration for vessel purchases~~	~~10,679,988~~
~~Sale of vessel~~	~~(4,885,998)~~(5,592)
Scrubbers and BWTS	~~1,505,004~~5,760
Depreciation expense	~~(32,742,401)~~(23,455)
Vessels and vessel improvements, at ~~September~~June 30, ~~2021~~2022	$	~~898,405,068~~885,255

~~F-13~~

Note 4. Debt

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


(In thousands)	June 30, 2022		December 31, 2021
Convertible Bond Debt	$	114,119	$	114,119
Debt discount and debt issuance costs - Convertible Bond Debt	(866)		(13,165)
Convertible Bond Debt, net of debt discount and debt issuance costs	113,253		100,954
Global Ultraco Debt Facility	262,650		287,550
Debt discount and Debt issuance costs - Global Ultraco Debt Facility	(7,629)		(8,460)
Less: Current portion - Global Ultraco Debt Facility	(49,800)		(49,800)
Global Ultraco Debt Facility, net of debt issuance costs	205,221		229,290
Total long-term debt	$	318,474	$	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~~which commenced 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"~~“Indenture”).

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

Each holder has the right to convert any portion of the Convertible Bond Debt, provided such portion is of $1,000 or a multiple thereof, at any time prior to the close of business on the business day immediately preceding the Maturity Date. The conversion rate of the Convertible Bond Debt after adjusting for ~~the Reverse Stock Split~~a 1-for-7 reverse stock split effected on September 15, 2020 (the “Reverse Stock Split”) and the Company's payments of cash dividends of (i) $2.00 per share on November 24, 2021 (to shareholders of record as of November 15, 2021), (ii) $2.05 per share on March 25, 2022 (to shareholders of record as of March 15, 2022), and (iii) $2.00 per share on May 25, 2022 (to shareholders of record as of May 16, 2022) is ~~25.453~~28.523 shares of the Company's common stock per $1,000 principal amount of Convertible Bond Debt, ~~(which~~which is equivalent to a conversion price of approximately ~~$39.29~~$35.06 per share of its common ~~stock). During the three months ended September 30, 2021, the Company received a request~~stock (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

~~F-14~~F-9

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

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

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

In accordance with ASC 470, Debt, (“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~~“Share Lending ~~Agreement"~~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~~June 30, ~~2021,~~2022, the fair value of the ~~0.5 million~~511,840 outstanding loaned shares was ~~$25.8~~$26.6 million based on the closing price of the common stock on ~~September~~June 30, ~~2021.~~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 million~~511,840 shares lent to JCS as issued and outstanding for the purposes of calculating earnings per share.

~~New~~Global 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"~~Facility”) with the lenders party thereto (the “Lenders”) Credit Agricole Corporate and Investment Bank (“Credit Agricole”), ~~which~~Skandinaviska 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

F-10

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 borrowings~~outstanding debt, including accrued interest and commitment fees under the ~~New Ultraco Debt~~Holdco Revolving Credit 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).

~~F-15~~

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

~~F-16~~

~~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 of~~Consolidated 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 purposes~~purposes. 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 costs~~to the Lenders in connection with the transaction.

~~During~~The 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 on~~is October 1, ~~2021, bore~~2026. Outstanding borrowings bear interest at a rate of ~~2.4%~~LIBOR plus ~~LIBOR for~~2.10% to 2.80% per annum, depending on certain metrics such as the ~~relevant~~Company's financial leverage ratio and meeting sustainability linked criteria. Repayments of $12.45 million are due quarterly and began 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 for~~Global Ultraco Debt Facility is secured by 49 of the ~~Holdco Revolving Credit~~Company'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.~~

~~F-17~~

~~The Holdco Revolving Credit Facility included~~contains 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 a~~along with financial covenants. The financial covenants include: (i) minimum consolidated liquidity ~~covenant that requires the Company~~based 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 ~~consolidated~~Company'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 Credit~~Global Ultraco Debt Facility, ~~also required~~ the Company borrowed $350.0 million and together with cash on ~~a consolidated basis (but excluding~~hand 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 Credit~~Term Facility ~~was refinanced on October 1, 2021. Please see~~under 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 Events~~5, Derivative Instruments, for additional ~~information.~~details).

Interest Rates

2022

For the three and six months ended June 30, 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 these periods was 5.30% and 5.39%, respectively.

For the three months ended June 30, 2022, the interest rate on the Global Ultraco Debt Facility ranged from 2.98% to 3.93%, 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 revolving 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 3.74%.

For the six months ended June 30, 2022, the interest rate on the Global Ultraco Debt Facility ranged from 2.35% to 3.93%, 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 revolving 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 3.39%.

2021

For the three and ~~nine~~six months ended ~~September~~June 30, 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 periods was 10.14%.

For the three months ended September 30, 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~~June 30, 2021, the interest rate on the New Ultraco Debt Facility ranged from 2.60% to 2.72%, including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the ~~revolver~~revolving 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%~~3.25%.

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

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

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

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

~~2020~~

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

~~F-18~~

~~For the three months ended September 30, 2020,~~ the interest rate on the New Ultraco Debt Facility ranged from ~~2.73%~~2.60% 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%~~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~~revolving 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%~~3.23%.

F-11

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the interest rate on the Norwegian Bond Debt was 8.25%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was ~~9.01%~~9.13% and ~~8.96%~~9.00%, respectively.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020,~~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 ~~pay~~paid commitment fees of 40% of the margin on the undrawn portion of the Super Senior Revolver Facility.

For the three and six months ended June 30, 2021, the interest rate on our outstanding debt under the Holdco Revolving Credit Facility was 2.60%. The weighted average effective interest rate including the amortization of debt issuance costs for these periods was 5.05%. Additionally, we paid commitment fees of 40% of the margin on the undrawn portion of the Holdco Revolving Credit Facility.

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


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
(In thousands)										(In thousands)	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Convertible Bond Debt interest	Convertible Bond Debt interest	$	1,426,467	$	1,426,500	$	4,279,467	$	4,279,450	Convertible Bond Debt interest	$	1,426	$	1,427	$	2,853	$	2,853
Global Ultraco Debt Facility interest										Global Ultraco Debt Facility interest	2,134		—		4,347		—
Holdco Revolving Credit Facility interest	Holdco Revolving Credit Facility interest	156,086		—		313,918		—		Holdco Revolving Credit Facility interest	—		158		—		158
New Ultraco Debt Facility interest	New Ultraco Debt Facility interest	1,063,230		1,946,446		4,068,481		6,052,556		New Ultraco Debt Facility interest	—		1,540		—		3,005
Norwegian Bond Debt interest	Norwegian Bond Debt interest	3,710,667		3,879,333		11,065,084		11,575,667		Norwegian Bond Debt interest	—		3,724		—		7,354
Super Senior Facility interest	Super Senior Facility interest	—		93,121		29,818		123,727		Super Senior Facility interest	—		—		—		30
Amortization of debt discount and debt issuance costs	Amortization of debt discount and debt issuance costs	1,975,792		1,608,800		5,442,978		4,654,871		Amortization of debt discount and debt issuance costs	530		1,838		1,092		3,467
Commitment fees on revolving credit facilities	Commitment fees on revolving credit facilities	178,875		—		361,930		196,823		Commitment fees on revolving credit facilities	248		112		493		183
Total Interest expense	Total Interest expense	$	8,511,117	$	8,954,200	$	25,561,676	$	26,883,094	Total Interest expense	$	4,338	$	8,799	$	8,785	$	17,050

Scheduled Debt Maturities

The following table presents the scheduled maturities of principal amounts of our debt obligations as of ~~September~~June 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):~~2022:

Norwegian Bond Debt New Ultraco Debt Facility Convertible Bond Debt Holdco Revolving Credit Facility Total
Three months ending December 31, 2021 $ 4,000,000 $ 8,666,630 $ — $ 24,000,000 $ 36,666,630
2022 172,000,000 34,666,521 — — 206,666,521
2023 — 34,666,521 — — 34,666,521
2024 — 80,671,699 114,119,000 — 194,790,699
$ 176,000,000 $ 158,671,371 $ 114,119,000 $ 24,000,000 $ 472,790,371


(In thousands)	Convertible Bond Debt		Global Ultraco Debt Facility		Total
Six months ending December 31, 2022	$	—	$	24,900	$	24,900
2023	—		49,800		49,800
2024	114,119		49,800		163,919
2025	—		49,800		49,800
2026	—		88,350		88,350
	$	114,119	$	262,650	$	376,769

~~F-19~~F-12

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 was~~interest rate swaps were designated and qualified as a cash flow ~~hedge.~~hedges. The Company uses ~~the IRS~~interest rate swaps for the management of interest rate risk exposure, as ~~the IRS~~an interest rate swap effectively converts a portion of the Company’s debt from a floating to a fixed rate. The ~~IRS~~interest 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 ~~IRS~~interest rate swap and the prevailing market interest rates. The Company may terminate the ~~IRS~~interest 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 ~~IRS~~interest 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 from~~against the rate fixed for each swap.

Tabular disclosure of derivatives location

The following table summarizes the interest rate swaps in place as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021:

Interest Rate Swap detail Notional Amount outstanding
Trade date Fixed rate Start date End date
September 30, 2021 (1)
December 31, 2020
March 31, 2020 0.64 % July 27, 2020 January 26, 2024 $ — $ 72,452,297
April 15, 2020 0.58 % July 27, 2020 January 26, 2024 — 36,226,149
June 25, 2020 0.50 % July 27, 2020 January 26, 2024 — 57,751,148
$ — $ 166,429,594

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


Interest Rate Swap detail					Notional Amount outstanding (in thousands)
Trade date	Fixed rate		Start date	End date	June 30, 2022		December 31, 2021

October 07, 2021	0.83	%	October 12, 2021	December 15, 2025	$	196,988	$	215,663
October 13, 2021	0.94	%	October 15, 2021	December 15, 2025	21,888		23,963
October 14, 2021	0.93	%	October 18, 2021	December 15, 2025	21,887		23,963
October 22, 2021	1.06	%	October 26, 2021	December 15, 2025	21,887		23,963
					$	262,650	$	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 ~~loss~~income that is currently recorded in Accumulated other comprehensive ~~loss~~income as of ~~September~~June 30, ~~2021~~2022 that is expected to be reclassified into the earnings within the next twelve months is ~~$0.2~~$5.2 million. No portion of the cash flow hedges ~~was~~were ineffective during the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

The effect of derivative instruments on the ~~Statement~~Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 is below:


Derivatives designated as hedging instruments	Derivatives designated as hedging instruments	Location of loss in Statements of Operations	Effective portion of loss reclassified from Accumulated other comprehensive income/(loss)								Derivatives designated as hedging instruments	Location of (gain)/loss in Statements of Operations	Effective portion of (gain)/loss reclassified from Accumulated other comprehensive income (in thousands)
			Three Months Ended				Nine Months Ended						Three Months Ended				Six Months Ended
			September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020				June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021

Interest rate swaps	Interest rate swaps	Interest expense	$	(150,585)	$	105,114	$	(446,549)	$	105,114	Interest rate swaps	Interest expense	$	(82)	$	151	$	315	$	296

~~F-20~~F-13

The following table shows the interest rate swap ~~asset~~assets and liabilities as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020:~~2021:

~~Derivatives designated as hedging instruments~~

~~Balance Sheet location~~

~~September 30, 2021~~

~~December 31, 2020~~

~~Interest rate swap~~

~~Fair value of derivatives - current/Current liabilities~~

—

~~481,791~~

~~Interest rate swap~~

~~Fair value of derivatives - noncurrent/Noncurrent liabilities~~

—

~~650,607~~


Derivatives designated as hedging instruments (in thousands)	Balance Sheet location	June 30, 2022		December 31, 2021
Interest rate swap	Fair value of derivative assets - current	$	5,212	$	—
Interest rate swap	Fair value of derivative assets - noncurrent	$	7,746	$	3,112
Interest rate swap	Fair 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 statement~~Condensed Consolidated Statements of ~~operations~~Operations 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~~June 30, ~~2021,~~2022, the Company ~~has~~had International Swaps and Derivatives Association ~~("ISDA"~~(“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 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~~June 30, ~~2021,~~2022, the Company had outstanding bunker swap agreements to purchase ~~10,750~~18,200 metric tons of high and low sulfur fuel oil with prices ranging between ~~$272~~$486 and ~~$453~~$841 that are expiring at ~~December~~March 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~~June 30, ~~2021:~~2022:


FFA Period	FFA Period	Average FFA Contract Price		Number of Days Hedged	FFA Period	Number of Days Hedged	Average FFA Contract Price
Quarter ending December 31, 2021		$	18,689	1260
Quarter ending March 31, 2022		22,407		315
Quarter ending June 30, 2022		22,086		315
Quarter ending September 30, 2022	Quarter ending September 30, 2022	21,735		315	Quarter ending September 30, 2022	1305	$	23,653
Quarter ending December 31, 2022	Quarter ending December 31, 2022	21,486		315	Quarter ending December 31, 2022	1740	$	22,322

The Company will realize a gain or loss on these FFAs based on the price differential between the average daily ~~BSI~~Baltic Supramax Index (“BSI”) rate and the FFA contract price. The gains or losses are recorded in ~~Other expense,~~Realized and unrealized (gain)/loss on derivative instruments, net in the ~~condensed consolidated statements~~Condensed Consolidated Statements of ~~operations.~~Operations.

F-14

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 Ended				For the Nine Months Ended
(In thousands)											(In thousands)		Three Months Ended				Six Months Ended
Derivatives not designated as hedging instruments	Derivatives not designated as hedging instruments	Location of loss/(gain) in Statements of Operations	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020		Derivatives not designated as hedging instruments	Location of loss/(gain) in Statements of Operations	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
FFAs - realized loss	FFAs - realized loss	Realized and unrealized loss/(gain) on derivative instruments, net	$	16,138,822	$	2,088,537	$	23,493,503	$	1,404,060	FFAs - realized loss	Realized and unrealized (gain)/loss on derivative instruments, net	$	5,572	$	5,388	$	3,799	$	7,354
FFAs - unrealized (gain)/loss	FFAs - unrealized (gain)/loss	Realized and unrealized loss/(gain) on derivative instruments, net	(6,787,069)		1,230,727		24,381,810		3,327,509		FFAs - unrealized (gain)/loss	Realized and unrealized (gain)/loss on derivative instruments, net	(13,133)		31,668		1,119		31,169
Bunker swaps - realized gain	Bunker swaps - realized gain	Realized and unrealized loss/(gain) on derivative instruments, net	(800,807)		(1,059,570)		(2,099,177)		(8,295,136)		Bunker swaps - realized gain	Realized and unrealized (gain)/loss on derivative instruments, net	(2,620)		(545)		(4,394)		(1,298)
Bunker swaps - unrealized loss/(gain)	Bunker swaps - unrealized loss/(gain)	Realized and unrealized loss/(gain) on derivative instruments, net	439,622		711,659		(188,337)		(467,107)		Bunker swaps - unrealized loss/(gain)	Realized and unrealized (gain)/loss on derivative instruments, net	291		(624)		(2,512)		(628)
Total	Total		$	8,990,568	$	2,971,353	$	45,587,799	$	(4,030,674)	Total		$	(9,890)	$	35,887	$	(1,988)	$	36,597

Derivatives not designated as hedging instruments

Balance Sheet location

September 30, 2021

December 31, 2020

Derivatives not designated as hedging instruments (in thousands)

Balance Sheet location

June 30, 2022

December 31, 2021

FFAs - Unrealized loss

Fair value of derivatives - current/Current liabilities

24,381,091

—

FFAs - Unrealized loss

Fair value of derivative liabilities - current

259

3,368

FFAs - Unrealized gain

Fair value of derivative assets - current

383

4,326

Bunker swaps - Unrealized loss

Fair value of derivative liabilities - current

—

Bunker swaps - Unrealized gain

Other current assets

1,097,484

352,399

Bunker swaps - Unrealized gain

Fair value of derivative assets - current

2,864

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~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company posted cash collateral related to derivative instruments under its collateral security arrangements of ~~$31.4~~$16.8 million and ~~$0.1~~$15.1 million, respectively, which is recorded ~~as a~~within Current ~~asset~~assets in the Condensed Consolidated Balance Sheets.

6. Fair Value Measurements

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

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

Debt—the carrying values approximates fair values for bonds issued under the ~~Norwegian Bond Debt and the~~ Convertible Bond Debt, which ~~are~~is traded on ~~the Oslo Stock Exchange and NASDAQ, respectively.~~NASDAQ. The carrying ~~amounts~~amount of our term loan ~~and revolver loan~~borrowing under the ~~New~~Global Ultraco Debt Facility ~~and revolver loan under Holdco Revolving Credit Facility approximate their~~approximates its fair value, due to ~~their~~its variable interest rates. ~~All the credit facilities except the Convertible Bond Debt were refinanced on October 1, 2021 at their carrying values.~~

F-15

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 ~~New~~Global 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~~June 30, ~~2021~~2022


				Fair Value							Fair Value
		Carrying Value (7)		Level 1		Level 2
(In thousands)								(In thousands)	Carrying Value (7)		Level 1		Level 2
Assets	Assets							Assets
Cash and cash equivalents (1)	Cash and cash equivalents (1)	$	125,644,368	$	125,644,368	$	—	Cash and cash equivalents (1)	$	141,530	$	141,530	$	—
Collateral on derivatives	Collateral on derivatives	31,369,664		31,369,664		—		Collateral on derivatives	16,770		16,770		—
Other current assets (2)		1,097,484		—		1,097,484
Fair value of derivative assets - current (2)								Fair value of derivative assets - current (2)	8,459		—		8,459
Fair value of derivative assets - noncurrent (3)								Fair value of derivative assets - noncurrent (3)	7,746		—		7,746
Liabilities	Liabilities							Liabilities
Norwegian Bond Debt (3)		176,000,000		—		179,960,000
New Ultraco Debt Facility (4)		158,671,371		—		158,671,371
Holdco Revolving Credit Facility (4)		24,000,000		—		24,000,000
Global Ultraco Debt Facility (4)								Global Ultraco Debt Facility (4)	262,650		—		262,650
Convertible Bond Debt (5)	Convertible Bond Debt (5)	114,119,000		—		171,178,500		Convertible Bond Debt (5)	114,119		—		199,698
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)	269		—		269

December 31, ~~2020~~2021

Fair Value
Carrying Value (7)
Level 1 Level 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 1		Level 2
Assets
Cash and cash equivalents (1)	$	86,222	$	86,222	$	—
Collateral on derivatives	15,081		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

(1) Includes restricted cash ~~(current and noncurrent)~~(noncurrent) of ~~$25.6~~$2.6 million at ~~September~~June 30, ~~2021~~2022 and ~~$18.9~~$0.1 million at December 31, ~~2020.~~2021.

(2) ~~Relates to~~Includes $2.9 million of unrealized mark-to-market gains on bunker swaps, $0.4 million of unrealized mark-to-market gains on FFAs and $5.2 million of unrealized gains on our interest rate swaps as of ~~September~~June 30, ~~2021~~2022 and ~~December 31, 2020. Includes $0.1~~$4.7 million of ~~collateral~~unrealized mark-to-market gains on ~~derivatives~~FFAs and bunker swaps as of December 31, ~~2020.~~2021.

(3) ~~The fair value~~Includes $7.7 million and $3.1 million of ~~the bond is based~~unrealized gains on ~~the last trades on September 20, 2021~~our interest rate swaps as of June 30, 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~~June 30, 2022 and December 31, 2021.

(5) The fair value of the Convertible Bond Debt is based on the last trade on ~~September 28, 2021~~May 9, 2022 and December ~~21, 2020~~16, 2021 on Bloomberg.com.

(6) Includes ~~$24.4~~$0.3 million of unrealized mark-to-market losses on FFAs and a de minimus amount of unrealized mark-to-market

F-16

losses on bunker swaps as of ~~September~~June 30, ~~2021~~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 ~~our~~the 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 ~~penalties~~associated 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~~six months ended ~~September~~June 30, 2022 and 2021, the Company incurred and recorded ~~$0.8~~$0.2 million and ~~$2.3~~$1.5 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%. On June 16, 2022, the Company exercised its option to extend the charter for another year at a hire rate of $14,300 per day. The Company has increased the lease liability and the corresponding right-of-use asset by $5.1 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of June 30, 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 June 16, 2022 was 7.15%.

F-17

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 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%. On May 17, 2022, the Company exercised its option to extend the charter for 11 months at a hire rate of $6,500 per day plus 57% of the BSI 58 average of 10 time charter routes as published by the Baltic Exchange each business day. The Company has increased the lease liability and the corresponding right-of-use asset by $7.5 million to reflect the extended lease term in its Condensed Consolidated Balance Sheet as of June 30, 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 May 17, 2022 was 5.825%.

(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. On May 17, 2022, the Company took delivery of the vessel and recorded $9.7 million as a lease liability and corresponding right-of-use asset in its Condensed Consolidated Balance Sheet as of June 30, 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 May 17, 2022 was 5.825%.

Office leases

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 June 30, 2022. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the

F-18

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 and six months ended June 30, 2022 and 2021.

Operating lease right-of-use assets and lease liabilities as of June 30, 2022 and December 31, 2021 are as follows:


Description	Location in Balance Sheet	June 30, 2022 (1)		December 31, 2021 (1)
Noncurrent assets:		(In thousands)
Chartered-in contracts greater than 12 months	Operating lease right-of-use assets	$	33,281	$	15,039
Office leases	Operating lease right-of-use assets	2,089		1,978
Operating lease right-of-use assets		$	35,370	$	17,017

Liabilities:
Chartered-in contracts greater than 12 months	Current portion of operating lease liabilities	$	29,112	$	15,039
Office leases	Current portion of operating lease liabilities	796		689
Lease liabilities - current portion		$	29,908	$	15,728

Chartered-in contracts greater than 12 months	Noncurrent portion of operating lease liabilities	$	4,169	$	—
Office leases	Noncurrent portion of operating lease liabilities	1,286		1,282
Lease liabilities - noncurrent portion		$	5,455	$	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 7.15%. The weighted average discount rate used to calculate the lease liability was 4.99%.

F-19

The table below presents the components of the Company’s lease expenses and sublease income on a gross basis earned from chartered-in contracts greater than 12 months for the three and six months ended June 30, 2022 and 2021:


(In thousands)		Three Months Ended				Six Months Ended
Description	Location in Statement of Operations	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Lease expense for chartered-in contracts less than 12 months	Charter hire expenses	$	14,419	$	3,158	$	31,558	$	8,645
Lease expense for chartered-in contracts greater than 12 months	Charter hire expenses	6,866		3,012		12,438		6,005
	Total charter hire expenses	$	21,285	$	6,170	$	43,996	$	14,650

Lease expense for office leases	General and administrative expenses	$	212	$	92	$	409	$	276

Sublease income from chartered-in contracts greater than 12 months *	Revenues, net	$	8,344	$	5,607	$	16,670	$	6,753

* The sublease income represents only time charter revenue earned on the chartered-in contracts with terms more than 12 months. There is additional revenue earned from voyage charters on the same chartered-in contracts which is recorded in Revenues, net in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021.

The cash paid for operating leases with terms greater than 12 months is $7.1 million and $12.8 million for the three and six months ended June 30, 2022, respectively.

The cash paid for operating leases with terms greater than 12 months is $3.4 million and $6.8 million for the three and six months ended June 30, 2021, respectively.

The weighted average remaining lease term on our operating lease contracts greater than 12 months is 11.91 months.

F-20

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 June 30, 2022:


Supplemental Disclosure Information	Chartered-in contracts greater than 12 months		Office leases		Total Operating leases
(In thousands)

Year:
Six months ending December 31, 2022	$	17,174	$	433	$	17,607
2023	16,777		617		17,394
2024	—		373		373
2025	—		372		372
2026	—		372		372
2027	—		74		74
	$	33,951	$	2,241	$	36,192

Present value of lease liability:
Lease liabilities - short term	$	29,112	$	796	$	29,908
Lease liabilities - long term	4,169		1,286		5,455
Total lease liabilities	$	33,281	$	2,082	$	35,363

Discount based on incremental borrowing rate	$	670	$	159	$	829

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 and six months ended June 30, 2022 was $7.0 million and $18.7 million, respectively. The amount of revenue earned as demurrage or despatch paid by the Company for the three and six months ended June 30, 2021 was $4.3 million and $8.2 million, respectively.

F-21

The following table shows the revenues earned from time charters and voyage charters for the three and six months ended June 30, 2022 and 2021:


	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Time charters	$	101,649	$	59,492	$	179,623	$	88,733
Voyage charters	97,046		70,359		203,470		137,690
	$	198,695	$	129,851	$	383,093	$	226,423

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 June 30, 2022 and December 31, 2021, the Company recognized $0.9 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~~six months ended ~~September~~June 30, ~~2021~~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~~six months ended ~~September~~June 30, 2022 and 2021. The Company determined that it does not overcome the presumption of share settlement of outstanding debt and therefore the Company applied the if-converted method and 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~~six months ended ~~September~~June 30, ~~2021~~2022 as their effect was ~~Dilutive.~~dilutive. Diluted net ~~loss~~income per share for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2022 excluded 17,661 Restricted Stock Units (“RSUs”) related to EPS performance (defined below) as their effect was anti-dilutive. Diluted net income per share for the three months ended June 30, 2021 does not include ~~222,775 stock awards, 326,024~~21,718 warrants and the potential shares to be issued upon conversion of Convertible Bond Debt as their effect was anti-dilutive. Diluted net income per share for six months ended June 30, 2021 does not include 45,854 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 Ended Nine Months Ended
September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
Net income/(loss) $ 78,341,270 $ (11,159,286) $ 97,415,605 $ (35,178,372)
Weighted Average Shares - Basic 12,802,401 10,279,698 12,237,288 10,274,906
Dilutive effect of stock options, shares issuable under Convertible Bond Debt and restricted stock awards 3,133,973 — 3,117,193 —
Weighted Average Shares - Diluted 15,936,374 10,279,698 15,354,481 10,274,906
Basic income/(loss) per share $ 6.12 $ (1.09) $ 7.96 $ (3.42)
Diluted income/(loss) per share $ 4.92 $ (1.09) $ 6.34 $ (3.42)


	Three Months Ended				Six Months Ended
(In thousands, except share and per share data)	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Net income	$	94,453	$	9,225	$	147,527	$	19,074
Weighted Average Shares - Basic	12,988,200		12,168,180		12,981,202		11,950,048
Dilutive effect of stock options, shares issuable under Convertible Bond Debt, restricted stock awards and restricted stock units	3,388,317		228,976		3,392,256		131,724
Weighted Average Shares - Diluted	16,376,517		12,397,156		16,373,458		12,081,772
Basic net income per share	$	7.27	$	0.76	$	11.36	$	1.60
Diluted net income per share	$	5.77	$	0.74	$	9.01	$	1.58

F-22

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. On June 14, 2022, the Company's shareholders approved a second amendment and restatement of the 2016 Plan, which increased the number of shares reserved under the 2016 Plan by an additional 300,000 shares to a maximum of 1,421,229 shares of common stock. Any director, officer, employee or consultant of the Company or any of its subsidiaries (including any prospective officer or employee) is eligible to be designated to participate in the 2016 Plan. The Company withheld shares related to restricted stock awards that vested in ~~2021~~2022 at the fair market value equivalent to the maximum statutory tax withholding obligation and remitted that amount in cash to the appropriate taxation authorities.

~~F-24~~

On February ~~19, 2021,~~11, 2022, the Company granted ~~92,327~~31,781 restricted shares as a ~~company-wide~~Company-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 ~~4,341~~7,451 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. On April 5, 2022, the Company granted 7,468 restricted shares with 2-year cliff vesting. The aggregate fair value of $0.5 million based on the closing share price of $63.24 on April 5, 2022. The amortization of the above grants is $0.4 million and ~~$1.3~~$1.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, 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 ~~17,727~~17,661 shares of time-based ~~awards~~RSUs to certain members of its senior management team under the 2016 Plan. The ~~awards~~units 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 ~~awards~~units 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~~$0.2 million and $0.3 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations.

~~Also~~As discussed further below, on ~~September 3, 2021,~~March 11, 2022, the Company granted ~~performance based restricted stock grants~~performance-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 awards~~RSUs that can be ~~issued are 53,182.~~earned is 52,982.

~~Of the maximum 53,182~~17,661 target performance-based ~~stock awards granted, 35,454 shares at maximum~~RSUs were granted based on earnings per share ("(“EPS ~~performance"~~performance”) for the ~~year~~performance period beginning January 1, 2022 and ending December 31, ~~2021~~2022 (with targets set forth ~~earlier in~~during the ~~year)~~three months ended June 30, 2022). ~~Restricted shares which~~The 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, 2023~~January 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 ~~awards~~RSUs 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, ~~"Share~~Share based payment ~~awards"~~awards, and therefore, the ~~stock based~~stock-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~~June 30, ~~2021,~~2022, the Company estimated that the ~~performance condition~~target (100%) will be met and recorded ~~$0.1~~$0.2 million ~~as stock based~~of stock-based compensation expense, which is included in General and administrative expenses in its Condensed Consolidated Statement of Operations for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

~~Of the maximum 53,182~~8,830 performance-based ~~stock awards granted, 17,728 shares at maximum~~RSUs were granted based on relative total shareholder return ("(“TSR ~~performance"~~performance”) for the ~~year~~performance period beginning January 1, 2022 and ending December 31, ~~2021. Restricted shares which~~2022 (with targets set forth during the three months ended June 30, 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, 2023~~January 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 ~~shares~~units 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 ~~ending~~end 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

F-23

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-month~~continuously 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~~$0.1 million asof stock-based compensation expense, which is included in General and administrative expenses in its Condensed Consolidated Statement of Operations for both the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, stock awards, including RSUs, covering a total of ~~209,772~~234,418 and ~~218,013~~246,962 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 or the April 5, 2022 stock grant. 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.

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, are~~were outstanding with exercise prices ranging from ~~$29.96~~$32.97 to $38.92 per share. InDuring the ~~nine~~six months ended ~~September~~June 30, ~~2021, 16,428~~2022, all 47,568 stock options were exercised. In connection with the exercise, ~~4,974~~8,077 shares of common stock were issued and ~~11,454~~39,491 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~~June 30, 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:

~~F-25~~

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


	Three Months Ended				Six Months Ended
(In thousands)	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Stock awards/Stock Option Plans	$	1,605	$	586	$	3,092	$	1,458

The future compensation to be recognized for all the grants for the ~~three~~six months ending December 31, ~~2021,~~2022, and the years ending December 31, ~~2022~~2023 and ~~2023~~2024 will be ~~$1.1~~$2.7 million, ~~$2.6~~$2.7 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, 2021		December 31, 2020		September 30, 2020		December 31, 2019

(In thousands)										(In thousands)	June 30, 2022		December 31, 2021		June 30, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	100,011,694	$	69,927,594	$	83,408,816	$	53,583,898	Cash and cash equivalents	$	138,955	$	86,147	$	79,278	$	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 *	2,575		75		75		75
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows	$	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	$	141,530	$	86,222	$	83,799	$	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, 2021~~required to be ~~utilized for redemption of the Norwegian Bond Debt. The cash was used in redemption of~~set aside by the Norwegian Bond Debt, which was repaid on October 18, 2021. Additionally, as of June 30, 2022, there was an amount paid to secure a bank guarantee related to a dispute with a vendor in the normal course of business included with the Restricted cash - noncurrent balance.

~~F-26~~

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~~July 28, ~~2021,~~2022, the Company's Board of Directors declared a cash dividend of ~~$2.00~~$2.20 per share to be paid on or about ~~November 24, 2021~~August 26, 2022 to shareholders of record at the close of business on ~~November 15, 2021.~~August 16, 2022. The aggregate amount of the dividend is

F-24

expected to be approximately ~~$27.2~~$30.1 million, which the Company anticipates will be funded from cash on hand at the time the payment is to be made.

~~F-27~~F-25

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~~six months ended ~~September~~June 30, ~~2021~~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~~six months ended ~~September~~June 30, ~~2020~~2021 as compared to the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~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~~six months ended ~~September~~June 30, ~~2020.~~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~~June 30, ~~2021,~~2022, we owned and operated a modern fleet of 5253 Supramax/Ultramax dry bulk vessels. We chartered-in ~~four~~five 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 ~~3,128,107~~3.19 million dwt and an average age of ~~9.1~~9.8 years as of ~~September~~June 30, ~~2021.~~2022.

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.

~~F-1~~1

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

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

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

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

We ~~have employed all~~continuously evaluate potential transactions that we believe will be accretive to earnings, enhance shareholder value or are in the best interests of ~~our~~the 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 as~~or related businesses, repayment or refinancing of ~~September 30, 2021:~~

Vessel Year
Built Dwt Charter
Expiration Daily Charter
Hire Rate
Antwerp Eagle 2015 63,530 Nov 2021 $ 32,500
Bittern 2009 57,809 Oct 2021 Voyage
Canary 2009 57,809 Oct 2021 $ 36,250
Cape Town Eagle 2015 63,707 Nov 2021 Voyage
Cardinal 2004 55,362 Nov 2021 $ 47,000
Copenhagen Eagle 2015 63,495 Oct 2021 Voyage
Crane 2010 57,809 Oct 2021 $ 29,200
Crested Eagle 2009 55,989 Oct 2021 Voyage
Crowned Eagle 2008 55,940 Oct 2021 Voyage
Dublin Eagle 2015 63,549 Nov 2021 Voyage
Egret Bulker 2010 57,809 Oct 2021 Voyage
Fairfield Eagle 2013 63,301 Nov 2021 $ 41,200 (1)
Gannet Bulker 2010 57,809 Oct 2021 Voyage
Golden Eagle 2010 55,989 Oct 2021 $ 47,500
Grebe Bulker 2010 57,809 Nov 2021 $ 29,950

Greenwich Eagle 2013 63,301 Nov 2021 $ 36,000 (2)
Groton Eagle 2013 63,301 Oct 2022 $ 35,000
Hamburg Eagle 2014 63,334 Oct 2021 Voyage
Helsinki Eagle 2015 63,605 Oct 2021 Voyage
Hong Kong Eagle 2016 63,472 Oct 2021 $ 35,000
Ibis Bulker 2010 57,809 Nov 2021 $ 53,850
Imperial Eagle 2010 55,989 Oct 2021 $ 46,000
Jaeger 2004 52,483 Oct 2021 Voyage
Jay 2010 57,809 Oct 2021 Voyage
Kingfisher 2010 57,809 Jan 2022 $ 44,500
Madison Eagle 2013 63,301 Oct 2021 Voyage
Martin 2010 57,809 Oct 2021 $ 45,000
Montauk Eagle 2011 58,018 Oct 2021 Voyage
Mystic Eagle 2013 63,301 Oct 2021 Voyage
New London Eagle 2015 63,140 Nov 2021 $ 42,000
Newport Eagle 2011 58,018 Oct 2021 $ 31,000
Nighthawk 2011 57,809 Feb 2022 $ 16,250
Oriole 2011 57,809 Oct 2021 Drydock (3)
Oslo Eagle 2015 63,655 Oct 2021 $ 37,000
Owl 2011 57,809 Nov 2021 $ 35,000
Petrel Bulker 2011 57,809 Oct 2021 $ 26,000
Puffin Bulker 2011 57,809 Nov 2021 $ 36,000
Roadrunner Bulker 2011 57,809 Nov 2021 Voyage
Rotterdam Eagle 2017 63,629 Oct 2021 Voyage

Rowayton Eagle 2013 63,301 Oct 2021 Voyage
Sandpiper Bulker 2011 57,809 Oct 2021 Voyage
Sankaty Eagle 2011 58,018 Oct 2021 Drydock (3)
Santos Eagle 2015 63,537 Nov 2021 $ 42,000
Shanghai Eagle 2016 63,438 Oct 2021 $ 45,000
Singapore Eagle 2017 63,386 Jan 2022 $ 24,000
Southport Eagle 2013 63,301 Nov 2021 $ 52,000
Stamford Eagle 2016 61,530 Nov 2021 $ 37,500
Stellar Eagle 2009 55,989 Nov 2021 Voyage
Stockholm Eagle 2016 63,275 Nov 2021 $ 40,000 (4)
Stonington Eagle 2012 63,301 Oct 2022 $ 37,500
Sydney Eagle 2015 63,529 Oct 2021 Voyage
Westport Eagle 2015 63,344 Oct 2021 $ 29,000

~~(1)The vessel is contracted to continue~~existing debt, the ~~existing time charter at an increased daily rate~~issuance 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 ~~third~~second quarter of ~~2021~~2022 and averaged ~~$34,278/~~$28,901/day, up ~~109%~~13% as compared to the ~~first~~second 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,~~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~~$19,213 per day as of August 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

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.

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 9193 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.~~

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

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~~ sixmonths ended ~~September~~June 30, ~~2021:~~2022:

Fleet Data

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


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
		September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020			June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Ownership Days	Ownership Days	4,697		4,546		13,407		13,646		Ownership Days	4,823		4,511		9,593		8,710
Chartered-in Days	Chartered-in Days	563		535		1,718		1,664		Chartered-in Days	1,142		497		2,102		1,155
Available Days	Available Days	4,931		4,940		14,403		14,818		Available Days	5,716		4,824		11,113		9,472
Operating Days	Operating Days	4,908		4,905		14,308		14,698		Operating Days	5,707		4,778		11,088		9,400
Fleet Utilization (%)	Fleet Utilization (%)	99.5	%	99.3	%	99.3	%	99.2	%	Fleet Utilization (%)	99.8	%	99.0	%	99.8	%	99.2	%

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

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

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

•Available days: We define available days as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys and other reasons which prevent the vessel from performing under the relevant charter party such as surveys, medical events, stowaway disembarkation, etc. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company completed drydock for ~~six vessels and two vessels were in drydock as of September 30, 2021.~~seven vessels.

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

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

Time Charter and Voyage Revenue

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

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

The following table represents Net charter hire income (a non-GAAP measure) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.


		For the Three Months Ended						For the Nine Months Ended							For the Three Months Ended						For the Six Months Ended
		September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
(In thousands)														(In thousands)	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Revenues, net	Revenues, net	$	183,392,700		$	68,182,301		$	409,815,454		$	199,952,404		Revenues, net	$	198,695		$	129,851		$	383,093		$	226,423
Less: Voyage expenses	Less: Voyage expenses	$	30,272,949		$	19,627,919		$	81,410,602		$	69,960,025		Less: Voyage expenses	36,290			24,523			79,917			51,138
Less: Charter hire expenses	Less: Charter hire expenses	$	10,723,737		$	5,060,503		$	25,373,501		$	15,820,809		Less: Charter hire expenses	21,285			6,170			43,996			14,650
Net charter hire income	Net charter hire income	$	142,396,014		$	43,493,879		$	303,031,351		$	114,171,570		Net charter hire income	$	141,120		$	99,158		$	259,180		$	160,635

% Net charter hire income from	% Net charter hire income from													% Net charter hire income from
Time charters	Time charters	55		%	51		%	55		%	52		%	Time charters	66		%	55		%	60		%	51		%
Voyage charters	Voyage charters	45		%	49		%	45		%	48		%	Voyage charters	34		%	45		%	40		%	49		%

Net ~~income/(loss)~~income

For the three months ended ~~September~~June 30, ~~2021,~~2022, the Company reported net income of ~~$78.3~~$94.5 million, or basic and diluted income of ~~$6.12~~$7.27 per share and ~~$4.92~~$5.77 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~~$9.2 million, or basic and diluted income of ~~$7.96~~$0.76 per share and ~~$6.34~~$0.74 per share, ~~respectively, compared to a~~respectively.

For the six months ended June 30, 2022, the Company reported net ~~loss~~income of ~~$35.2~~$147.5 million, or basic and diluted ~~loss~~income of ~~$3.42~~$11.36 per share ~~for~~and $9.01 per share, respectively. In the ~~nine months ended September 30, 2020.~~comparable period of 2021, the Company reported net income of $19.1 million, or basic and diluted income of $1.60 per share and $1.58 per share, respectively.

Revenues

Our revenues are derived from time and voyage charters. Net time and voyage charter revenues for the three months ended ~~September~~June 30, ~~2021~~2022 were ~~$183.4~~$198.7 million compared with ~~$68.2~~$129.9 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.~~products and an increase in available days due to an increase in owned days and chartered-in days.

Net time and voyage charter revenues for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$409.8~~$383.1 million and ~~$200.0~~$226.4 million, respectively. The increase in revenues was primarily due to higher charter rates ~~offset by a decrease~~and an increase in available days due to ~~fewer~~an increase in owned days and chartered-in days.

Voyage expenses

To the extent that we employ our vessels on voyage charters, we will incur expenses that include bunkers, port charges, canal tolls and cargo handling operations, as these expenses are borne by the vessel owner on voyage charters. As is common in the shipping industry, we pay commissions ranging from 1.25% to 5.50% to unaffiliated ship brokers associated with the charterers, depending on the number of brokers involved with arranging the charter. Bunkers, port charges, and canal tolls primarily increase in periods during which vessels are employed on voyage charters because these expenses are for the vessel owner's account. Voyage expenses for the three months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$30.3~~$36.3 million and ~~$19.6~~$24.5 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 year as well as~~second quarter, an increase in ~~voyage charter business~~port expenses and an increase in broker commission ~~expense as a result of the increase in revenues.~~expense.

Voyage expenses for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$81.4~~$79.9 million and ~~$70.0~~$51.1 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 year compared to prior year, an increase in port expenses and an increase in broker commission ~~expense as a result of the increase in revenues.~~expense.

Vessel operating expenses

Vessel operating expenses for the three months ended ~~September~~June 30, ~~2021~~2022 were ~~$28.1~~$27.2 million compared to ~~$21.7~~$23.7 million in the comparable quarter in ~~2020.~~2021. The increase in vessel operating expenses was primarily attributable to ~~increases in lubes expense~~higher owned days as ~~a result of~~well as an increase in ~~prices as well as higher inventory levels~~crew expenses due to an increase in crewing costs, crew changes and ~~vessel start-up~~ expenses asrelated to COVID-19 and the ~~Company purchased two vessels~~war in ~~the third quarter of 2021.~~Ukraine. The Company also continues to ~~incur higher costs related to~~face general inflationary pressures particularly impacting the ~~delivery~~cost of lubes, stores and ~~spares, as well as crew changes as a result of the ongoing COVID-19 pandemic.~~spares. The ownership days for the three months ended ~~September~~June 30, 2022 and 2021 were 4,823 and ~~2020 were 4,697 and 4,546,~~4,511, respectively.

Vessel operating expenses for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$73.3~~$55.1 million and ~~$65.7~~$45.2 million, respectively. The increase in vessel operating expenses was primarily attributable to higher owned days as well as an increase in ~~lubes expense as a result of~~crew expenses due to an increase in ~~prices, consumption due~~crewing costs, crew changes and expenses related to ~~increase~~COVID-19 and the war in ~~vessel speeds as well as higher inventory levels, increase in~~Ukraine. The Company also continues to face general inflationary pressures particularly impacting the cost of lubes, 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.~~spares. The ownership days for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 were 9,593 and ~~2020 were 13,407 and 13,646,~~8,710, respectively.

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

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

Charter hire expenses

The charter hire expenses for the three months ended ~~September~~June 30, ~~2021~~2022 were ~~$10.7~~$21.3 million compared to ~~$5.1~~$6.2 million in the comparable quarter in ~~2020.~~2021. The increase in charter hire expenses was principally due to an increase in chartered-in days as the Company took delivery of its fifth long term chartered-in vessel during the second quarter, and an increase in charter hire rates due to improvement in the charter hire ~~market and a marginal increase in chartered-in days.~~market. The total chartered-in days for the three months ended ~~September~~June 30, ~~2021~~2022 were ~~563~~1,142 compared to ~~535~~497 for the comparable quarter in the prior year. ~~The~~Between 2017 and 2021, the Company ~~currently charters in four~~entered into a series of agreements to charter five Ultramax vessels on a long term ~~basis~~basis. The minimum chartered-in periods ranged between one and four years with ~~remaining lease terms~~an option to extend the duration between three and 24 months. All five vessels were chartered-in as of ~~approximately one year.~~June 30, 2022.

The charter hire expenses for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$25.4~~$44.0 million and ~~$15.8~~$14.6 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. The total chartered-in days for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 were 2,102 and ~~2020 were 1,718 and 1,664,~~1,155, respectively.

Depreciation and amortization

For the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, total depreciation and amortization expense was ~~$13.6~~

$15.3 million and ~~$12.6~~$13.1 million, respectively. Total depreciation and amortization expense for the three months ended ~~September~~June 30, ~~2021~~2022 includes ~~$11.4~~$11.9 million of vessel and other fixed assets depreciation and ~~$2.2~~$3.4 million relating to the amortization of deferred drydocking costs. Comparable amounts for the three months ended ~~September~~June 30, ~~2020~~2021 were ~~$10.8~~$11.0 million of vessel and other fixed assets depreciation and ~~$1.8~~$2.1 million of amortization of deferred drydocking costs. The increase in depreciation expense is due to the acquisition of ~~eight Ultramax~~nine vessels ~~during~~in 2021, offset by the ~~year. The increase~~sale of one vessel in ~~drydock expense is related to nine additional drydocks completed since~~ the third quarter of ~~2020.~~2021. The increase in amortization of deferred drydock costs is related to completing fourteen drydocks since the second quarter of 2021.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, total depreciation and amortization expense was ~~$39.2~~$29.8 million and ~~$37.6~~$25.6 million, respectively. Total depreciation and amortization expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 includes ~~$33.0~~$23.6 million of vessel and other fixed asset depreciation and ~~$6.2~~$6.3 million relating to the amortization of deferred drydocking costs. Comparable amounts for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$32.1~~$21.5 million of vessel and other fixed asset depreciation and ~~$5.5~~$4.1 million of amortization of deferred drydocking costs. The increase in depreciation expense is due to the acquisition of ~~eight Ultramax~~nine vessels ~~during~~in 2021, offset by the ~~year. The increase~~sale of one vessel in ~~drydock expense is related to nine additional drydocks completed since~~ the third quarter of ~~2020.~~2021. The increase in amortization of deferred drydock costs is related to completing fourteen drydocks since the second quarter of 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~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$7.9~~$9.9 million and ~~$8.0~~$7.9 million, respectively. General and administrative expenses include a stock-based compensation ~~component~~ of ~~$0.8~~$1.6 million and ~~$0.7~~$0.6 million for the three months ended ~~September~~June 30, 2022 and 2021, respectively. The increase in general and ~~2020, respectively.~~administrative expenses was mainly attributable to an increase in consulting expenses, compensation and benefits, and stock-based compensation expense.

General and administrative expenses for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$23.6~~$19.9 million and ~~$22.7~~$15.6 million, respectively. These general and administrative expenses include a stock-based compensation ~~component~~ of ~~$2.2~~$3.1 million and ~~$2.3~~$1.5 million for ~~2021~~the six months ended June 30, 2022 and ~~2020,~~2021, respectively. The increase in general and administrative expenses ~~relates~~was primarily attributable to an increase in ~~office~~consulting expenses, ~~as our employees returned to our offices,~~ compensation ~~expenses~~ and ~~fees for legal~~benefits, and ~~professional services.~~stock-based compensation expense.

Other operating expense

Other operating expense for the three ~~and nine~~ months ended ~~September~~June 30, 2022 and 2021 was ~~$0.8~~$0.04 million and ~~$2.3~~$0.6 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.

Other operating expense for the six months ended June 30, 2022 and 2021 was $0.2 million and $1.5 million, respectively.

Interest expense

Our interest expense for the three months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$8.5~~$4.3 million and ~~$9.0~~$8.8 million, respectively. The decrease in interest expense is ~~mainly~~primarily due to ~~lower~~a decrease in outstanding debt ~~under~~and lower interest rates due to 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~~refinancing of the ~~term loan. In addition, we repaid $15.0 million under the Super Senior Facility~~Company's debt in the ~~first~~fourth quarter of 2021.

~~The interest~~Interest expense for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$25.6~~$8.8 million and ~~$26.9~~$17.1 million, respectively. The decrease in interest expense was primarily due to a decrease in outstanding debt ~~under the Norwegian Bond Debt~~ and ~~a decrease in~~lower interest rates ~~as well as~~due to the ~~outstanding~~refinancing of the Company's debt ~~under~~in the ~~New Ultraco Debt Facility.~~

9fourth quarter of 2021.

The Company entered into interest rate swaps in October 2021 to fix the interest rate exposure on the Global Ultraco Debt Facility term loan. As a result of these swaps, which average 87 basis points, the Company’s interest rate exposure is fully fixed insulating the Company from the rising interest rate environment.

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~~June 30, ~~2021~~2022 and ~~2020,~~2021, the amortization of debt issuance costs was ~~$2.0~~$0.5 million and ~~$1.6~~$1.8 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, the amortization of debt issuance costs was ~~$5.4~~$1.1 million and ~~$4.7~~$3.5 million, respectively. The interest expense for the three and ~~nine~~six months ended ~~September~~June 30, 2021 includes $1.1 million and ~~$3.2~~$2.1 million, respectively, of interest expense representing the amortization of the equity component of the Convertible Bond Debt. ~~Please refer~~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. Refer to Note ~~4 Debt~~2, 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~~gain on derivative instruments, net for the three months ended ~~September~~June 30, ~~2021 and 2020~~2022 was ~~$9.0~~$9.9 million ~~and $3.0 million, respectively. The increase in~~compared to a realized ~~and unrealized losses is primarily related to losses incurred on our frieght forward agreements as a result of tthe sharp increase in charter hire rates.~~

~~Realized~~ and unrealized loss on derivative instruments, net ~~for the nine months ended September 30, 2021 was $45.6 million compared to a realized and unrealized gain on derivatives instruments, net~~ of ~~$4.0~~$35.9 million for the ~~nine~~three months ended ~~September~~June 30, ~~2020.~~2021. The ~~increase~~$9.9 million gain is primarily related to $7.6 million in ~~realized~~gains earned on our freight forward agreements as a result of the decrease in charter hire rates during the second quarter and ~~unrealized~~$2.3 million in bunker swap gains for the three months ended June 30, 2022. For the three months ended June 30, 2021, the Company had $37.2 million in losses on ~~derivative instruments was primarily~~our freight forward agreements due to the sharp increase in charter hire ~~rates. Please refer~~rates during the second quarter of 2021, and $1.3 million in bunker swap gains.

Realized and unrealized gain on derivative instruments, net for the six months ended June 30, 2022 was $2.0 million compared to a realized and unrealized loss on derivative instruments, net of $36.6 million for the six months ended June 30, 2021. The $2.0 million gain is primarily attributable to $6.9 million in bunker swap gains, offset by $4.9 million in losses incurred on our freight forward agreements as a result of the increase in charter hire rates in the current year. For the comparable period in the prior year, the Company had $38.9 million in losses on our freight forward agreements due to the sharp increase in charter hire rates in 2021, and $2.3 million in bunker swap gains. 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~~The Company believes that its business benefits during periods of elevated inflation ~~has had or is likely,~~and positive demand growth, as higher charter rates, and net revenues, more than offset increases in ~~the foreseeable future,~~costs relating to ~~have a significant impact on~~ vessel operating expenses, drydocking, ~~expenses or~~and general and ~~administrative expenses.~~administrative.

Liquidity and Capital Resources


		Nine Months Ended					Six Months Ended
		September 30, 2021		September 30, 2020
Net cash provided by/(used in) operating activities		$	120,914,949	$	(2,346,990)
(In thousands)						(In thousands)	June 30, 2022		June 30, 2021
Net cash provided by operating activities						Net cash provided by operating activities	$	140,214	$	30,585
Net cash used in investing activities	Net cash used in investing activities	(106,767,451)		(17,529,527)		Net cash used in investing activities	(5,543)		(86,503)
Net cash provided by financing activities		22,648,099		46,027,292
Net increase in cash, cash equivalents and restricted cash		36,795,597		26,150,775
Net cash (used in)/provided by financing activities						Net cash (used in)/provided by financing activities	(79,363)		50,868
Net increase/(decrease) in cash, cash equivalents and restricted cash						Net increase/(decrease) in cash, cash equivalents and restricted cash	55,308		(5,050)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	88,848,771		59,130,285		Cash, cash equivalents and restricted cash at beginning of period	86,222		88,849
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	125,644,368	$	85,281,060	Cash, cash equivalents and restricted cash at end of period	$	141,530	$	83,799

Net cash provided by operating activities during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 was ~~$120.9~~$140.2 million ~~compared to net~~and $30.6 million, respectively. The increase in cash ~~used in~~flows provided by operating activities ~~of $2.3 million for~~resulted primarily from the ~~nine months ended September 30, 2020. The cash flows from operating activities increased as compared to the same period~~increase in ~~the prior year primarily~~revenues due to ~~the increase in~~higher charter hire rates.

Net cash used in investing activities during the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$106.8~~$5.5 million and ~~$17.5~~$86.5 million, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~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~~$4.8 million for the purchase of ballast water treatment systems on our fleet. Additionally, the Company paid ~~$1.6~~$0.5 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 of~~improvements and $0.2 million for ~~hull and machinery claims. Please refer~~other fixed assets. Refer to Note 3, Vessels, to the condensed consolidated financial statements for further information.

Net cash used in financing activities during the six months ended June 30, 2022 was $79.4 million compared to net cash provided by financing activities ~~during~~of $50.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021 and 2020 was $22.6 million and $46.0 million, respectively.~~2021. During the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~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~~$24.9 million of the ~~New~~Global 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~~$52.8 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, 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~~June 30, ~~2021,~~2022, our cash and cash equivalents including restricted cash was ~~$125.6~~$141.5 million, compared to ~~$88.8~~$86.2 million at December 31, ~~2020.~~2021. The Company had restricted cash of ~~$25.6~~$2.6 million and ~~$18.9~~$0.1 million as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

In addition, as of June 30, 2022, we had $100.0 million in an undrawn revolver facility available under the Global Ultraco Debt Facility.

As of ~~September~~June 30, ~~2021,~~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 New~~Global Ultraco Debt Facility of ~~$158.7~~$262.7 million, net of ~~$2.8~~$7.6 million of debt ~~discount and debt~~ issuance costs, and the Convertible Bond Debt of $114.1 million, net of ~~$14.3~~$0.9 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 ~~nine~~six months ended ~~September~~June 30, 2021, six of our vessels completed drydock and two vessels were in drydock as of September 30, 2021, and we incurred drydocking expenditures of $10.7 million. In the nine months ended September 30, 2020, eight2022, seven of our vessels completed drydock and we incurred drydocking expenditures of ~~$10.8~~$16.1 million.

In the six months ended June 30, 2021, four of our vessels completed drydock and we incurred drydocking expenditures of $6.4 million.

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

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


		Projected Costs (1) (in millions)
Quarter Ending	Off-hire Days(2)	BWTS		Drydocks		Vessel Upgrades(3)
September 30, 2022	232	$	0.6	$	1.4	$	0.2
December 31, 2022	169	$	0.3	$	1.0	$	—
March 31, 2023	158	$	0.7	$	4.4	$	0.6
June 30, 2023	113	$	—	$	3.8	$	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.

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.

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~~June 30, ~~2021,~~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~~June 30, ~~2021.~~2022.

Changes in Internal Controls.

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-(f) under the Exchange Act) occurred during the quarter ended ~~September~~June 30, ~~2021~~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.

1311

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, ~~2020~~2021 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.

1412

ITEM 6 – Exhibits

EXHIBIT INDEX


3.1			Second Amended and Restated By-Laws of Eagle Bulk Shipping Inc., dated as of October 15, 2014 (incorporated by reference to Exhibit 3.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. ~~001-33831.~~001-33831 ).
3.2			Third Amended and Restated Articles of Incorporation of Eagle Bulk Shipping Inc., dated as of August 4, 2016 (incorporated by reference to Exhibit 3.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on August 4, 2016; File No. ~~001-33831.~~001-33831 ).
3.3			Article of Amendment to Third Amended and Restated Articles of Incorporation of Eagle Bulk Shipping Inc., (incorporated by reference to Exhibit 3.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on September 14, 2020; File No. ~~001-33831.~~001-33831 ).
4.1			Form of Specimen Stock Certificate of Eagle Bulk Shipping Inc., (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. ~~001-33831.~~001-33831 ).
4.2			Form of Specimen Warrant Certificate of Eagle Bulk Shipping Inc., incorporated by reference to Exhibit 4.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831.
~~4.3~~			Amended and Restated Registration Rights Agreement, dated as of May 13, 2016, by and between Eagle Bulk Shipping Inc. and the Holders party thereto (incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on May 17, 2016; File No. ~~001-33831.~~001-33831 ).
~~4.4~~4.3			Indenture, dated July 29, 2019, by and between Eagle Bulk Shipping Inc. and Deutsche Bank Trust Company Americas, as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on August 2, 2019).
~~4.5~~4.4			Form of Note representing the Company's 5.00% Convertible Senior Notes due 2024 (included as Exhibit A to the Indenture filed as Exhibit 4.1) (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the SEC on August 2, 2019).
10.1*			Employment Agreement, dated June 16, 2022, among Eagle Bulk Shipping Inc., Eagle Shipping International (USA) LLC and Frank De Costanzo.
31.1*			Sarbanes-Oxley Section 302 Certification of Principal Executive Officer.
31.2*			Sarbanes-Oxley Section 302 Certification of Principal Financial Officer.
32.1**			Section 1350 Certification of Principal Executive Officer.
32.2**			Section 1350 Certification of Principal Financial Officer.
101*			The following materials from Eagle Bulk Shipping Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~September~~June 30, ~~2021,~~2022, formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets (unaudited) as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, (ii) Condensed Consolidated Statements of Operations (unaudited) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, (iii) Condensed Consolidated Statements of Comprehensive ~~income/(loss)~~income (unaudited) for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, (iv) Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the ~~nine~~three and six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, (v) Condensed Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, and (vi) Notes to Condensed Consolidated Financial Statements (unaudited).

* Filed herewith.

** Furnished herewith.

1513

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~~August 8, ~~2021~~2022

By: /s/ Frank De Costanzo

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

Frank De Costanzo

Chief Financial Officer

(Principal financial officer of the registrant)

Date: ~~November~~August 8, ~~2021~~2022

1614


	Common Stock*	Common Stock Amount*		Additional Paid-in Capital*		Accumulated Deficit		Accumulated other comprehensive loss		Total Stockholders’ Equity
Balance at December 31, 2019	10,214,600	$	102,146	$	918,475,145	$	(437,074,354)	$	—	$	481,502,937
Net loss	—	—		—		(3,527,759)		—		(3,527,759)
Issuance of shares due to vesting of restricted shares	62,526	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, 2020	10,277,126	$	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 shares	2,572	26		(26)		—		—		—
Unrealized loss on cash flow hedges	—	—		—		—		(649,287)		(649,287)
Stock-based compensation	—	—		723,223		—		—		723,223
Balance at June 30, 2020	10,279,698	$	102,798	$	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, 2020	10,279,698	$	102,798	$	919,601,123	$	(472,252,726)	$	(1,124,745)	$	446,326,450


Description	Location in Balance Sheet	September 30, 2021 (1)		December 31, 2020 (1)
Noncurrent assets:
Chartered-in contracts greater than 12 months	Operating lease right-of-use assets	$	20,712,287	$	6,207,253
Office leases	Operating lease right-of-use assets	2,133,410		1,333,618
Operating lease right-of-use assets		$	22,845,697	$	7,540,871

Liabilities:
Chartered-in contracts greater than 12 months	Current portion of operating lease liabilities	$	20,451,549	$	6,974,943
Office leases	Current portion of operating lease liabilities	642,760		640,428
Lease liabilities - current portion		$	21,094,309	$	7,615,371

Chartered-in contracts greater than 12 months	Noncurrent portion of operating lease liabilities	$	253,970	$	—
Office leases	Noncurrent portion of operating lease liabilities	$	1,490,649	$	686,422
Lease liabilities - noncurrent portion		$	1,744,619	$	686,422


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

Discount rate upon adoption	5.37		%	5.80		%	5.48		%

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

Present value of lease liability

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

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


	Norwegian Bond Debt		New Ultraco Debt Facility		Convertible Bond Debt		Holdco Revolving Credit Facility		Total
Three months ending December 31, 2021	$	4,000,000	$	8,666,630	$	—	$	24,000,000	$	36,666,630
2022	172,000,000		34,666,521		—		—		206,666,521
2023	—		34,666,521		—		—		34,666,521
2024	—		80,671,699		114,119,000		—		194,790,699
	$	176,000,000	$	158,671,371	$	114,119,000	$	24,000,000	$	472,790,371


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

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


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

Bittern	2009	57,809	Oct 2021	Voyage

Canary	2009	57,809	Oct 2021	$	36,250

Cape Town Eagle	2015	63,707	Nov 2021	Voyage

Cardinal	2004	55,362	Nov 2021	$	47,000

Copenhagen Eagle	2015	63,495	Oct 2021	Voyage

Crane	2010	57,809	Oct 2021	$	29,200

Crested Eagle	2009	55,989	Oct 2021	Voyage

Crowned Eagle	2008	55,940	Oct 2021	Voyage

Dublin Eagle	2015	63,549	Nov 2021	Voyage

Egret Bulker	2010	57,809	Oct 2021	Voyage

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

Gannet Bulker	2010	57,809	Oct 2021	Voyage

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

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


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

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

Hamburg Eagle	2014	63,334	Oct 2021	Voyage

Helsinki Eagle	2015	63,605	Oct 2021	Voyage

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

Ibis Bulker	2010	57,809	Nov 2021	$	53,850

Imperial Eagle	2010	55,989	Oct 2021	$	46,000

Jaeger	2004	52,483	Oct 2021	Voyage

Jay	2010	57,809	Oct 2021	Voyage

Kingfisher	2010	57,809	Jan 2022	$	44,500

Madison Eagle	2013	63,301	Oct 2021	Voyage

Martin	2010	57,809	Oct 2021	$	45,000

Montauk Eagle	2011	58,018	Oct 2021	Voyage

Mystic Eagle	2013	63,301	Oct 2021	Voyage

New London Eagle	2015	63,140	Nov 2021	$	42,000

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

Nighthawk	2011	57,809	Feb 2022	$	16,250

Oriole	2011	57,809	Oct 2021	Drydock		(3)

Oslo Eagle	2015	63,655	Oct 2021	$	37,000

Owl	2011	57,809	Nov 2021	$	35,000

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

Puffin Bulker	2011	57,809	Nov 2021	$	36,000

Roadrunner Bulker	2011	57,809	Nov 2021	Voyage

Rotterdam Eagle	2017	63,629	Oct 2021	Voyage



Rowayton Eagle	2013	63,301	Oct 2021	Voyage

Sandpiper Bulker	2011	57,809	Oct 2021	Voyage

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

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

Shanghai Eagle	2016	63,438	Oct 2021	$	45,000

Singapore Eagle	2017	63,386	Jan 2022	$	24,000

Southport Eagle	2013	63,301	Nov 2021	$	52,000

Stamford Eagle	2016	61,530	Nov 2021	$	37,500

Stellar Eagle	2009	55,989	Nov 2021	Voyage

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

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

Sydney Eagle	2015	63,529	Oct 2021	Voyage

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