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 June 30, ~~2022~~2023


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

For the transition period from __________________ to __________________

Commission File Number 001-33831

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~~ (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~~New York Stock ~~Market LLC~~Exchange
Preferred Stock Purchase Rights	N/A	New York Stock Exchange

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 August ~~3, 2022: 13,691,287~~4, 2023: 9,938,990

TABLE OF CONTENTS


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

	Condensed Consolidated Balance Sheets as of June 30 , ~~2022~~2023 and December 31, ~~2021~~2022	F-1

	Condensed Consolidated Statements of Operations for the three and six months ended June 30 , ~~2022~~2023 and ~~2021~~2022	F-2

	Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30 , ~~2022~~2023 and ~~2021~~2022	F-3

	Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30 , ~~2022~~2023 and ~~2021~~2022	F-4

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , ~~2022~~2023 and ~~2021~~2022	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	1112

ITEM 4.	CONTROLS AND PROCEDURES	1112

PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	1213
ITEM 1A.	RISK FACTORS	1213
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	1213
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	1214
ITEM 4.	MINE SAFETY DISCLOSURES	1214
ITEM 5.	OTHER INFORMATION	1214
ITEM 6.	EXHIBITS	1315
SIGNATURES		1417

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 freight rates, which ~~could decline from historic highs,~~fluctuate based on various economic and market conditions, 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~~purchase price of our vessels ~~significant vessel improvement costs~~ and our ~~vessels'~~vessels’ estimated useful lives and scrap value, general and administrative expenses, and financing costs related to our indebtedness. ~~Our~~The accuracy of the Company’s assumptions, expectations, beliefs and projections depends on events or conditions that change over time and are thus susceptible to change based on actual ~~results may differ materially from those anticipated in these~~experience, new developments and known and unknown risks. The Company gives no assurance that the 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, 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 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”) 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 believewill prove to be ~~reliable sources. We have~~correct, does not ~~independently verified this data nor sought the consent of~~undertake any ~~organizations~~duty to ~~refer to their reports in this Quarterly Report on Form 10-Q. We disclaim~~update them and disclaims 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. 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) volatility of freight rates driven by changes in demand for seaborne transportation of drybulk commodities and in supply of drybulk shipping capacity; (ii) changes in drybulk carrier capacity driven by levels of newbuilding orders, scrapping rates or fleet utilization; (iii) changes in rules and regulations applicable to the drybulk industry, including, without limitation, regulations of the International Maritime Organization and the European Union (the “EU”), requirements of the Environmental Protection Agency and other governmental and quasi-governmental agencies; (iv) changes in U.S., United Kingdom, United Nations and EU economic sanctions and trade embargo laws and regulations as well as equivalent economic sanctions laws of other relevant jurisdictions; (v) actions taken by regulatory authorities including, without limitation, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”); (vi) changes in the typical seasonal variations in drybulk freight rates; (vii) changes in national and international economic and political conditions including, without limitation, the current conflict between Russia and Ukraine, the current economic and political environment in China and the environment in historically high-risk geographic areas such as the South China Sea, the Indian Ocean, the Gulf of Guinea and the Gulf of Aden; (viii) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking costs); (ix) the duration and impact of the novel coronavirus (“COVID-19”) pandemic and measures implemented by governments of various countries in response to the COVID-19 pandemic; (x) volatility of the cost of fuel; (xi) volatility of costs of labor and materials needed to operate our business due to inflation; (xii) any legal proceedings which we may be involved from time to time; and (xiii) other factors listed from time to time in our filings with the Securities and Exchange Commission (the “SEC”).

We have based these statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. The Company’s future results may be impacted by adverse economic conditions, such as inflation, deflation, or lack of liquidity in the capital markets, that may negatively affect it or parties with whom it does business. Should one or more of the foregoing risks or uncertainties materialize in a way that negatively impacts the Company, or should the Company’s underlying assumptions prove incorrect, the Company’s actual results may vary materially from those anticipated in its forward-looking statements, and its business, financial condition and results of operations could be materially and adversely affected. Risks and uncertainties are further described in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 10, 2023 (the “Annual Report”).

PART I: FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

June 30, ~~2022~~2023 and December 31, ~~2021~~2022

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


		June 30, 2022		December 31, 2021
		(Unaudited)					June 30, 2023		December 31, 2022
ASSETS:	ASSETS:					ASSETS:
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	138,955	$	86,147	Cash and cash equivalents	$	115,703	$	187,155
Accounts receivable, net of a reserve of $1,921 and $1,818, respectively		43,948		28,456
Accounts receivable, net of a reserve of $2,965 and $3,169, respectively						Accounts receivable, net of a reserve of $2,965 and $3,169, respectively	28,396		32,311
Prepaid expenses	Prepaid expenses	4,524		3,362		Prepaid expenses	6,533		4,531
Inventories	Inventories	25,193		17,651		Inventories	21,695		28,081
Collateral on derivatives						Collateral on derivatives	676		909
Fair value of derivative assets – current						Fair value of derivative assets – current	9,814		8,479
Vessel held for sale	Vessel held for sale	5,592		—		Vessel held for sale	11,052		—
Collateral on derivatives		16,770		15,081
Fair value of derivative assets - current		8,459		4,669
Other current assets	Other current assets	929		667		Other current assets	440		558
Total current assets	Total current assets	244,370		156,033		Total current assets	194,309		262,024
Noncurrent assets:	Noncurrent assets:					Noncurrent assets:
Vessels and vessel improvements, at cost, net of accumulated depreciation of $237,490 and $218,670, respectively		885,255		908,076
Vessels and vessel improvements, at cost, net of accumulated depreciation of $277,924 and $261,725, respectively						Vessels and vessel improvements, at cost, net of accumulated depreciation of $277,924 and $261,725, respectively	925,632		891,877
Advances for vessel purchases						Advances for vessel purchases	—		3,638
Advances for BWTS and other assets						Advances for BWTS and other assets	1,622		2,722
Deferred drydock costs, net						Deferred drydock costs, net	40,469		42,849
Other fixed assets, net of accumulated depreciation of $1,706 and $1,623, respectively						Other fixed assets, net of accumulated depreciation of $1,706 and $1,623, respectively	291		310
Operating lease right-of-use assets	Operating lease right-of-use assets	35,370		17,017		Operating lease right-of-use assets	15,472		23,006
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
Restricted cash – noncurrent						Restricted cash – noncurrent	2,575		2,599
Fair value of derivative assets – noncurrent						Fair value of derivative assets – noncurrent	6,331		8,184
Total noncurrent assets	Total noncurrent assets	982,239		970,625		Total noncurrent assets	992,392		975,185
Total assets	Total assets	$	1,226,609	$	1,126,658	Total assets	$	1,186,701	$	1,237,209
LIABILITIES & STOCKHOLDERS' EQUITY:	LIABILITIES & STOCKHOLDERS' EQUITY:					LIABILITIES & STOCKHOLDERS' EQUITY:
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	22,189	$	20,781	Accounts payable	$	22,520	$	20,129
Accrued interest	Accrued interest	3,008		2,957		Accrued interest	3,567		3,061
Other accrued liabilities	Other accrued liabilities	17,766		17,994		Other accrued liabilities	20,920		24,097
Fair value of derivative liabilities - current		269		4,253
Fair value of derivative liabilities – current						Fair value of derivative liabilities – current	8		163
Current portion of operating lease liabilities	Current portion of operating lease liabilities	29,908		15,728		Current portion of operating lease liabilities	14,274		22,045
Unearned charter hire revenue	Unearned charter hire revenue	13,609		12,088		Unearned charter hire revenue	6,002		9,670
Current portion of long-term debt	Current portion of long-term debt	49,800		49,800		Current portion of long-term debt	49,800		49,800
Total current liabilities	Total current liabilities	136,549		123,601		Total current liabilities	117,091		128,965
Noncurrent liabilities:	Noncurrent liabilities:					Noncurrent liabilities:
Global Ultraco Debt Facility, net of debt issuance costs		205,221		229,290
Long-term debt – Global Ultraco Debt Facility, net of debt discount and debt issuance costs						Long-term debt – Global Ultraco Debt Facility, net of debt discount and debt issuance costs	353,618		181,183
Convertible Bond Debt, net of debt discount and debt issuance costs	Convertible Bond Debt, net of debt discount and debt issuance costs	113,253		100,954		Convertible Bond Debt, net of debt discount and debt issuance costs	103,693		103,499
Noncurrent portion of operating lease liabilities	Noncurrent portion of operating lease liabilities	5,455		1,282		Noncurrent portion of operating lease liabilities	2,847		3,173
Other noncurrent accrued liabilities	Other noncurrent accrued liabilities	636		265		Other noncurrent accrued liabilities	695		1,208
Total noncurrent liabilities	Total noncurrent liabilities	324,565		331,791		Total noncurrent liabilities	460,853		289,063
Total liabilities	Total liabilities	461,114		455,392		Total liabilities	577,944		418,028
Commitments and contingencies		0		0

Commitments and contingencies (Note 8)						Commitments and contingencies (Note 8)

Stockholders' equity:	Stockholders' equity:					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
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued as of June 30, 2023 and December 31, 2022						Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued as of June 30, 2023 and December 31, 2022	—		—
Common stock, $0.01 par value, 700,000,000 shares authorized, 9,310,443 and 13,003,702 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively						Common stock, $0.01 par value, 700,000,000 shares authorized, 9,310,443 and 13,003,702 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively	93		130
Additional paid-in capital	Additional paid-in capital	963,482		982,746		Additional paid-in capital	745,636		966,058
Accumulated deficit	Accumulated deficit	(210,854)		(313,495)		Accumulated deficit	(151,697)		(163,556)
Accumulated other comprehensive income	Accumulated other comprehensive income	12,737		1,886		Accumulated other comprehensive income	14,725		16,549
Total stockholders' equity	Total stockholders' equity	765,495		671,266		Total stockholders' equity	608,757		819,181
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	1,226,609	$	1,126,658	Total liabilities and stockholders' equity	$	1,186,701	$	1,237,209

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~~2023 and ~~2021~~2022

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


		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
		June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021			June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Revenues, net	Revenues, net	$	198,695	$	129,851	$	383,093	$	226,423	Revenues, net	$	101,406	$	198,695	$	206,604	$	383,093

Voyage expenses	Voyage expenses	36,290		24,523		79,917		51,138		Voyage expenses	25,471		36,290		58,946		79,917
Vessel operating expenses	Vessel operating expenses	27,207		23,679		55,122		45,198		Vessel operating expenses	30,998		27,207		62,255		55,122
Charter hire expenses	Charter hire expenses	21,285		6,170		43,996		14,650		Charter hire expenses	11,726		21,285		24,146		43,996
Depreciation and amortization	Depreciation and amortization	15,254		13,111		29,834		25,617		Depreciation and amortization	14,831		15,254		29,563		29,834
General and administrative expenses	General and administrative expenses	9,891		7,913		19,945		15,611		General and administrative expenses	11,269		9,891		22,219		19,945
Impairment of operating lease right-of-use assets										Impairment of operating lease right-of-use assets	722		—		722		—
Other operating expense	Other operating expense	41		559		174		1,520		Other operating expense	93		41		183		174
Total operating expenses		109,968		75,955		228,988		153,734
Gain on sale of vessels										Gain on sale of vessels	(11,558)		—		(14,876)		—
Total operating expenses, net										Total operating expenses, net	83,552		109,968		183,158		228,988

Operating income	Operating income	88,727		53,896		154,105		72,689		Operating income	17,854		88,727		23,446		154,105

Interest expense	Interest expense	4,338		8,799		8,785		17,050		Interest expense	4,434		4,338		8,291		8,785
Interest income	Interest income	(174)		(15)		(219)		(32)		Interest income	(1,815)		(174)		(3,651)		(219)
Realized and unrealized (gain)/loss on derivative instruments, net		(9,890)		35,887		(1,988)		36,597
Total other expense, net		(5,726)		44,671		6,578		53,615
Realized and unrealized gain on derivative instruments, net										Realized and unrealized gain on derivative instruments, net	(2,791)		(9,890)		(2,422)		(1,988)

Total other (income)/expense, net										Total other (income)/expense, net	(172)		(5,726)		2,218		6,578
Net income	Net income	$	94,453	$	9,225	$	147,527	$	19,074	Net income	$	18,026	$	94,453	$	21,228	$	147,527

Weighted average shares outstanding:	Weighted average shares outstanding:									Weighted average shares outstanding:
Basic	Basic	12,988,200		12,168,180		12,981,202		11,950,048		Basic	12,734,230		12,988,200		12,892,793		12,981,202
Diluted	Diluted	16,376,517		12,397,156		16,373,458		12,081,772		Diluted	16,058,606		16,376,517		16,223,841		16,373,458

Per share amounts:	Per share amounts:									Per share amounts:
Basic net income	Basic net income	$	7.27	$	0.76	$	11.36	$	1.60	Basic net income	$	1.42	$	7.27	$	1.65	$	11.36
Diluted net income	Diluted net income	$	5.77	$	0.74	$	9.01	$	1.58	Diluted net income	$	1.21	$	5.77	$	1.48	$	9.01

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 (Unaudited)

For the Three and Six Months Ended June 30, ~~2022~~2023 and ~~2021~~2022

(U.S. Dollars in thousands)


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income	$	18,026	$	94,453	$	21,228	$	147,527
Other comprehensive income/(loss):
Effect of cash flow hedges	1,035		2,170		(1,824)		10,851
Comprehensive income	$	19,061	$	96,623	$	19,404	$	158,378

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'~~Stockholders’ Equity (Unaudited)

For the Three and Six Months Ended June 30, ~~2022~~2023 and ~~2021~~2022

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

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


	Shares of Common Stock	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders' Equity
Balance at December 31, 2022	13,003,702	$	130	$	966,058	$	(163,556)	$	16,549	$	819,181
Net income	—	—		—		3,202		—		3,202
Dividends declared ($0.60 per share)	—	—		—		(8,019)		—		(8,019)

Issuance of shares due to vesting of equity awards	61,358	1		(1)		—		—		—

Effect of cash flow hedges	—	—		—		—		(2,859)		(2,859)

Cash used to settle net share equity awards	—	—		(1,651)		—		—		(1,651)
Stock-based compensation	—	—		1,855		—		—		1,855
Balance at March 31, 2023	13,065,060	$	131	$	966,261	$	(168,373)	$	13,690	$	811,709
Net income	—	—		—		18,026		—		18,026
Dividends declared ($0.10 per share)	—	—		—		(1,350)		—		(1,350)
Issuance of shares due to vesting of equity awards	26,944	—		—		—		—		—
Repurchase of common stock – related party (Note 6)	(3,781,561)	(38)		(222,780)		—		—		(222,818)
Effect of cash flow hedges	—	—		—		—		1,035		1,035


Stock-based compensation	—	—		2,155		—		—		2,155
Balance at June 30, 2023	9,310,443	$	93	$	745,636	$	(151,697)	$	14,725	$	608,757

F-4


		Common stock	Common stock amount		Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive (loss)/income		Total stockholders’ equity			Shares of Common Stock	Common Stock		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders' Equity
Balance at December 31, 2020		11,661,797	$	116	$	943,572	$	(472,138)	$	(1,132)	$	470,418
Balance at December 31, 2021													Balance at December 31, 2021	12,917,027	$	129	$	982,746	$	(313,495)	$	1,886	$	671,266
Net income	Net income	—	—		—		9,849		—		9,849		Net income	—	—		—		53,073		—		53,073
Dividends declared ($2.05 per share)													Dividends declared ($2.05 per share)	—	—		—		(27,112)		—		(27,112)
Cumulative effect of adoption of ASU 2020-06													Cumulative effect of adoption of ASU 2020-06	—	—		(20,726)		8,676		—		(12,050)
Issuance of shares due to vesting of restricted shares	Issuance of shares due to vesting of restricted shares	71,146	1		(1)		—		—		—		Issuance of shares due to vesting of restricted shares	60,890	1		(1)		—		—		—
Unrealized gain on cash flow hedges		—	—		—		—		600		600
Issuance of shares upon exercise of stock options													Issuance of shares upon exercise of stock options	8,077	—		85		—		—		85
Effect of cash flow hedges													Effect of cash flow hedges	—	—		—		—		8,681		8,681
Fees for equity offerings	Fees for equity offerings	—	—		(32)		—		—		(32)		Fees for equity offerings	—	—		201		—		—		201
Cash used to settle net share equity awards	Cash used to settle net share equity awards	—	—		(811)		—		—		(811)		Cash used to settle net share equity awards	—	—		(1,862)		—		—		(1,862)
Stock-based compensation	Stock-based compensation	—	—		872		—		—		872		Stock-based compensation	—	—		1,487		—		—		1,487
Balance at March 31, 2021		11,732,943	117		943,600		(462,289)		(532)		480,896
Balance at March 31, 2022													Balance at March 31, 2022	12,985,994	$	130	$	961,930	$	(278,858)	$	10,567	$	693,769
Net income	Net income	—	—		—		9,225		—		9,225		Net income	—	—		—		94,453		—		94,453
Dividends declared ($2.00 per share)													Dividends declared ($2.00 per share)	—	—		—		(26,449)		—		(26,449)
Issuance of shares due to vesting of restricted shares	Issuance of shares due to vesting of restricted shares	2,773	—		—		—		—		—		Issuance of shares due to vesting of restricted shares	3,187	—		—		—		—		—
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
Effect of cash flow hedges													Effect of cash flow hedges	—	—		—		—		2,170		2,170
Cash used to settle net share equity awards	Cash used to settle net share equity awards	—	—		(174)		—		—		(174)		Cash used to settle net share equity awards	—	—		(53)		—		—		(53)
Stock-based compensation	Stock-based compensation	—	—		586		—		—		586		Stock-based compensation	—	—		1,605		—		—		1,605
Balance at June 30, 2021		12,753,255	$	127	$	979,683	$	(453,064)	$	(488)	$	526,258
Balance at June 30, 2022													Balance at June 30, 2022	12,989,181	$	130	$	963,482	$	(210,854)	$	12,737	$	765,495

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)

For the Six Months Ended June 30, ~~2022~~2023 and ~~2021~~2022

(U.S. Dollars in thousands)


		Six Months Ended					Six Months Ended
		June 30, 2022		June 30, 2021			June 30, 2023		June 30, 2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	147,527	$	19,074	Net income	$	21,228	$	147,527
Adjustments to reconcile net income to net cash provided by operating activities:	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	23,573		21,538		Depreciation	22,633		23,573
Amortization of operating lease right-of-use assets		12,664		6,201
Noncash operating lease expense						Noncash operating lease expense	13,322		12,664
Amortization of deferred drydocking costs	Amortization of deferred drydocking costs	6,261		4,079		Amortization of deferred drydocking costs	6,930		6,261
Amortization of debt discount and debt issuance costs	Amortization of debt discount and debt issuance costs	1,092		3,467		Amortization of debt discount and debt issuance costs	1,146		1,092
Net unrealized (gain)/loss on fair value of derivatives		(1,393)		30,541

Impairment of operating lease right-of-use assets						Impairment of operating lease right-of-use assets	722		—
Gain on sale of vessels						Gain on sale of vessels	(14,876)		—
Unrealized gain on derivative instruments, net						Unrealized gain on derivative instruments, net	(1,785)		(1,393)
Stock-based compensation expense	Stock-based compensation expense	3,092		1,458		Stock-based compensation expense	4,010		3,092
Drydocking expenditures	Drydocking expenditures	(16,098)		(6,429)		Drydocking expenditures	(8,259)		(16,098)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts payable	Accounts payable	1,793		8,216		Accounts payable	2,172		1,793
Accounts receivable	Accounts receivable	(15,492)		(10,390)		Accounts receivable	3,741		(15,492)
Accrued interest	Accrued interest	51		(131)		Accrued interest	506		51
Inventories	Inventories	(7,542)		(4,274)		Inventories	6,385		(7,542)
Operating lease liabilities current and noncurrent	Operating lease liabilities current and noncurrent	(12,664)		(6,664)		Operating lease liabilities current and noncurrent	(14,607)		(12,664)
Collateral on derivatives	Collateral on derivatives	(1,689)		(33,499)		Collateral on derivatives	233		(1,689)
Fair value of derivatives, other current and noncurrent assets	Fair value of derivatives, other current and noncurrent assets	(453)		(41)		Fair value of derivatives, other current and noncurrent assets	434		(453)
Other accrued liabilities	Other accrued liabilities	(868)		(1,779)		Other accrued liabilities	(6,105)		(868)
Prepaid expenses	Prepaid expenses	(1,162)		(1,112)		Prepaid expenses	(2,002)		(1,162)
Unearned charter hire revenue	Unearned charter hire revenue	1,522		330		Unearned charter hire revenue	(3,670)		1,522
Net cash provided by operating activities	Net cash provided by operating activities	140,214		30,585		Net cash provided by operating activities	32,158		140,214

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	(495)		(79,002)		Purchase of vessels and vessel improvements	(81,708)		(495)
Advances for vessel purchases		—		(5,340)
Purchase of scrubbers and ballast water systems		(4,807)		(2,385)

Purchase of BWTS						Purchase of BWTS	(1,391)		(4,807)
Proceeds from hull and machinery insurance claims	Proceeds from hull and machinery insurance claims	—		238		Proceeds from hull and machinery insurance claims	174		—
Net proceeds from sale of vessels						Net proceeds from sale of vessels	40,698		—
Purchase of other fixed assets	Purchase of other fixed assets	(241)		(14)		Purchase of other fixed assets	(63)		(241)
Net cash used in investing activities	Net cash used in investing activities	(5,543)		(86,503)		Net cash used in investing activities	(42,290)		(5,543)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from New Ultraco Debt Facility		—		11,000
Repayment of Norwegian Bond Debt		—		(4,000)
Repayment of term loan under New Ultraco Debt Facility		—		(15,897)
Repayment of revolver loan under New Ultraco Debt Facility		—		(30,000)
Repayment of revolver loan under Super Senior Facility		—		(15,000)
Proceeds from revolver loan under New Ultraco Debt Facility		—		55,000
Proceeds from Holdco Revolving Credit Facility		—		24,000
Proceeds from issuance of shares under ATM Offering, net of commissions		—		27,372
Repayment of term loan under Global Ultraco Debt Facility		(24,900)		—
Proceeds from Revolving Facility, net of debt issuance costs – Global Ultraco Debt Facility						Proceeds from Revolving Facility, net of debt issuance costs – Global Ultraco Debt Facility	123,361		—
Proceeds from Term Facility, net of debt issuance costs – Global Ultraco Debt Facility						Proceeds from Term Facility, net of debt issuance costs – Global Ultraco Debt Facility	73,125		—
Repayment of Term Facility – Global Ultraco Debt Facility						Repayment of Term Facility – Global Ultraco Debt Facility	(24,900)		(24,900)
Repurchase of Common Stock and associated fees – related party (Note 6)						Repurchase of Common Stock and associated fees – related party (Note 6)	(221,196)		—

Dividends paid						Dividends paid	(9,979)		(52,816)
Debt issuance costs paid to lenders – Original Global Ultraco Debt Facility						Debt issuance costs paid to lenders – Original Global Ultraco Debt Facility	—		(18)
Cash paid for taxes related to net share settlement of equity awards						Cash paid for taxes related to net share settlement of equity awards	(1,652)		(1,915)
Other financing costs paid						Other financing costs paid	(103)		—
Cash received from exercise of stock options	Cash received from exercise of stock options	85		22		Cash received from exercise of stock options	—		85
Cash used to settle net share equity awards		(1,915)		(986)
Equity offerings issuance costs		201		(292)
Financing costs paid to lenders		(18)		(351)
Dividends paid		(52,816)		—
Net cash (used in)/provided by financing activities		(79,363)		50,868
Net increase/(decrease) in cash, cash equivalents and restricted cash		55,308		(5,050)
Proceeds from equity offerings, net of issuance costs						Proceeds from equity offerings, net of issuance costs	—		201
Net cash used in financing activities						Net cash used in financing activities	(61,344)		(79,363)
Net (decrease)/increase in cash, cash equivalents and restricted cash						Net (decrease)/increase in cash, cash equivalents and restricted cash	(71,476)		55,308
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	86,222		88,849		Cash, cash equivalents and restricted cash at beginning of period	189,754		86,222
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	141,530	$	83,799	Cash, cash equivalents and restricted cash at end of period	$	118,278	$	141,530
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest		$	7,123	$	13,420
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		$	3,010	$	3,346
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		$	—	$	89
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). All dollar amounts are stated in U.S. dollars and are presented in thousands, on a rounded basis, using actual amounts, except for per share amounts and unless otherwise noted. Minor differences in totals or percentages may exist due to rounding.

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 1one business segment.

As of June 30, ~~2022,~~2023, the Company owned and operated a modern fleet of 53 ~~oceangoing~~ocean-going vessels (one of which, the Sankaty Eagle, is classified as held for sale), including 2723 Supramax and 2630 Ultramax vessels with a combined carrying capacity of ~~3.19~~3.22 million deadweight tons (“dwt”) and an average age of approximately ~~9.8~~10.1 years. ~~Additionally,~~

In addition to its owned fleet, the Company charters-in 5third-party vessels on both a short-term and long-term basis. As of June 30, 2023, the Company had five Ultramax vessels on a ~~long term~~long-term charter-in basis, with remaining lease terms ~~of approximately one year~~ranging from two months to ten months.

For each ~~and also charters-in vessels on a short term basis for a period less than one year.~~

~~For~~of the three and six months ended June 30, 2023 and 2022, ~~and 2021,~~ the ~~Company’s~~Company had no charterers ~~did not~~which individually ~~account~~accounted for more than 10% of the Company’s gross charter ~~revenue during those periods.~~revenue.

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 Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and ~~footnotes~~notes 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 ~~2021~~2022 Annual Report on Form 10-K, filed with the SEC on March ~~14, 2022~~10, 2023 (the ~~“Form 10-K”~~“Annual Report”).

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 presented 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 sales price of $47.97 per share under the ATM Offering for aggregate net proceeds of $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~~Significant estimates include fair values of long-lived assets (primarily vessels and ~~assumptions~~operating lease right-of-use assets), impairment of ~~the Company are residual value of~~long-lived assets (primarily vessels ~~the useful lives of vessels, the value of~~and operating lease right-of-use assets), stock-based compensation ~~estimated losses on our trade receivables, fair value of~~and financial instruments (primarily derivative instruments and Convertible Bond Debt (as defined ~~below)~~herein)), residual values of vessels, useful lives of vessels and ~~its equity component, fair value of operating lease right-of-use assets and operating lease liabilities and the fair value of derivatives.~~estimated losses on accounts receivable. Actual results could differ from those estimates.

Note 2. ~~Recent Accounting Pronouncements~~

Significant Accounting Policies

and Pronouncements

The Company's significant accounting policies are described in Note 2,2. Significant Accounting Policies, in the ~~Notes~~notes to the ~~Consolidated Financial Statements~~consolidated financial statements included in the ~~Form 10-K.~~Annual Report. Included herein are certain updates to those policies.

F-7

Vessels and Vessel Improvements, At Cost

Vessels are stated at cost, which consists of the contract price, and other direct costs relating to acquiring and placing the vessels in service. Major vessel improvements, such as scrubbers and ballast water treatment systems (“BWTS”), are capitalized and depreciated over the remaining useful lives of the vessels. Depreciation is calculated on a straight-line basis over the estimated useful lives of the vessels based on the cost of the vessels reduced by the estimated scrap value of the vessels as discussed below. The Company estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard to the original owner.

Effective January 1, 2023, we increased our estimated vessel scrap value from $300 per light weight ton (“lwt”) to $400 per lwt. This change was driven by increases in 15-year average scrap price trends sourced from a third-party data provider as well as similar increases by certain of our industry peer companies. The change in the estimated scrap value will result in a decrease in depreciation expense over the remaining life of our vessel assets. We expect depreciation to decrease by approximately $4.0 million for the year ended December 31, 2023 solely as a result of the prospective change in this estimate. The impact of this change on Net income and basic and diluted net income per share for the three and six months ended June 30, 2023 is as follows:


	Three Months Ended		Six Months Ended
	June 30, 2023
Increase to Net income	$	999	$	1,997
Increase to Basic net income per share	$	0.08	$	0.15
Increase to Diluted net income per share	$	0.06	$	0.12

Recently Adopted Accounting Pronouncements

In ~~August~~March 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 financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU's guidance, entities will not separately present in equity an embedded conversion feature in such debt. Instead, the entity will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815, ~~Derivatives and Hedging~~, or (2) a convertible debt instrument was issued at a substantial premium. The Company adopted ASU 2020-06 as of January 1, 2022 under the modified retrospective approach. The Convertible Bond Debt (defined below) will no longer require bifurcation and separate accounting of the equity component. The resulting debt discount will no longer be amortized to interest expense over the life of the bond and thus an adjustment to beginning retained earnings of $8.7 million was recorded within Accumulated deficit reflecting the cumulative impact of adoption. Additionally, a $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 reversal of the debt discount.

~~Recently Issued Accounting Pronouncements Not Yet Effective~~

The FASB has issued accounting standards that had not yet become effective as of June 30, 2022 and may impact the Company's consolidated financial statements or related disclosures in future periods. Those standards and their potential impact are discussed below:

~~In March 2020, the FASB issued ASU~~ 2020-04, ~~Reference Rate Reform (Topic 848):~~ Facilitation of the Effects of Reference Rate Reform on Financial Reporting, (“ASU 2020-04”). ASU 2020-04 ~~addresses concerns about certain accounting consequences that could result from the anticipated transition away from the use of LIBOR~~provides optional expedients and ~~other interbank offered rates~~exceptions for applying U.S. GAAP to ~~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 reference rate expected to be 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.~~2024 (as extended by ASU 2022-06, Deferral of the Sunset Date of Topic 848). In ~~January 2021,~~June 2023, the ~~FASB issued ASU 2021-01,~~ ~~Reference Rate Reform (Topic 848): Scope, (“ASU 2021-01”), which clarifies~~Company modified 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~~swap agreements to coincide with the Global Ultraco ~~Debt Facility~~Refinancing (as defined below). The Company utilized certain expedients under ASU 2020-04 to conclude that the modifications should be accounted for as ~~it bears interest~~continuations of the existing swap agreements, which had no impact on ~~outstanding borrowings at LIBOR plus a margin rate. Additionally, the Company is also evaluating the adoption of ASU 2021-01~~our condensed consolidated financial statements. See Note 4. Debt and Note 5. Derivative Instruments, for additional information on ~~its interest rate swaps related to~~ the Global Ultraco ~~Debt Facility.~~

Refinancing and the Company’s outstanding interest rate swap agreements, respectively.

Note 3. Vessels

~~Vessel~~Vessels and Vessel Improvements

As of June 30, ~~2022,~~2023, the Company’s owned ~~operating~~ fleet consisted of 53 drybulk ~~vessels.~~vessels, one of which (Sankaty Eagle) is classified as held for sale.

~~During the third quarter of 2018,~~In December 2022, the Company entered into a ~~contract~~memorandum of agreement to acquire a high-specification 2015-built Ultramax bulkcarrier for ~~the installation~~total consideration of ~~ballast water treatment systems (“BWTS”) on 39 of our owned vessels. The projected cost, including installation, is approximately $0.5 million per BWTS.~~$24.3 million. The Company ~~intends to complete the installations during scheduled drydockings. The Company completed installation~~paid a deposit of ~~BWTS~~$3.6 million on ~~29 vessels and recorded $17.3 million in Vessels and~~this vessel ~~improvements in the Condensed Consolidated Balance Sheets~~ as of ~~June 30,~~December 31, 2022. ~~Additionally,~~The vessel was delivered to the Company ~~recorded $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 June 30, 2022.~~February 2023.

~~On June 8, 2022,~~In January 2023, the Company ~~signed~~entered into a memorandum of agreement to acquire a high-specification 2020-built scrubber-fitted Ultramax bulkcarrier for total consideration of $30.1 million. The vessel was delivered to the Company in May 2023.

In February 2023, the Company entered into a memorandum of agreement to acquire a high-specification 2020-built scrubber-fitted Ultramax bulkcarrier for total consideration of $30.1 million. The vessel was delivered to the Company in May 2023.

In February 2023, the Company entered into a memorandum of agreement to sell the vessel ~~Cardinal~~Jaeger (a 2004-built Supramax) for a total consideration of ~~$15.8~~$9.0 million. The vessel ~~will be~~was 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.~~

March 2023.

F-8

In April 2023, the Company entered into memorandums of agreement to sell the vessels Montauk Eagle, Newport Eagle and Sankaty Eagle (each, a 2011-built Supramax) for total consideration of $49.8 million. The Montauk Eagle and Newport Eagle were delivered to the buyer in May 2023. The Sankaty Eagle was delivered to the buyer in July 2023.

Activity in Vessels and vessel improvements ~~activity~~ for the six months ended June 30, ~~2022~~2023 is ~~below:~~as follows:


~~(In thousands)~~
	June 30, 2023
~~Vessels and vessel improvements, at December 31, 2021~~Beginning balance	$	~~908,076~~891,877
Purchase of vessels and vessel improvements	~~466~~ 85,402
Sale of vessels	(22,160)
Vessel held for sale	~~(5,592)~~(9,477)
~~Scrubbers and~~Purchase of BWTS	~~5,760~~2,541
Depreciation expense	~~(23,455)~~(22,551)
~~Vessels and vessel improvements, at June 30, 2022~~Ending balance	$	~~885,255~~925,632

As of June 30, 2023, Vessel held for sale is comprised of $9.5 million of vessel and vessel improvements and $1.6 million of unamortized deferred drydock costs.

Note 4. Debt

(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
Long-term debt consists of the following:


	June 30, 2023						December 31, 2022
	Principal Amount Outstanding		Debt Discounts and Debt Issuance Costs		Carrying Value		Principal Amount Outstanding		Debt Discounts and Debt Issuance Costs		Carrying Value
Convertible Bond Debt	$	104,119	$	(426)	$	103,693	$	104,119	$	(620)	$	103,499
Global Ultraco Debt Facility – Term Facility	287,850		(6,273)		281,577		237,750		(6,767)		230,983
Global Ultraco Debt Facility – Revolving Facility	125,000		(3,159)		121,841		—		—		—
Total debt	516,969		(9,858)		507,111		341,869		(7,387)		334,482
Less: Current portion – Global Ultraco Debt Facility	(49,800)		—		(49,800)		(49,800)		—		(49,800)
Total long-term debt	$	467,169	$	(9,858)	$	457,311	$	292,069	$	(7,387)	$	284,682

Global Ultraco Debt Facility

On May 11, 2023, Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary of the Company, along with certain of its wholly-owned, vessel-owning subsidiaries as guarantors, amended and restated its Credit Agreement originally dated October 1, 2021 (the “Original Global Ultraco Debt Facility”) pursuant to an Amended and Restated Credit Agreement dated as of May 11, 2023 (the “Global Ultraco Refinancing” and, as amended, the “Global Ultraco Debt Facility”) with the lenders party thereto and Crédit Agricole Corporate and Investment Bank (“Credit Agricole”) as security trustee, structurer, sustainability coordinator and facility agent (collectively, the “Lenders”). The Company paid fees of $3.5 million to the Lenders in connection with the Global Ultraco Refinancing.

F-9

The Global Ultraco Refinancing provided for additional loan capacity of up to $175.0 million, thereby increasing the aggregate principal amount of senior secured credit facilities under the Global Ultraco Debt Facility to $485.3 million (from $310.3 million under the Original Global Ultraco Debt Facility). Additional amounts provided under the Global Ultraco Refinancing included (i) an additional term loan of up to $75.0 million, thereby increasing the aggregate principal amount of term loans under the Global Ultraco Debt Facility to $300.3 million (the “Term Facility”) and (ii) an additional revolving credit facility in an aggregate principal amount of $100.0 million, thereby increasing the aggregate principal amount of revolving credit facilities available under the Global Ultraco Debt Facility to $185.0 million which shall be reduced beginning on September 15, 2023 and every three months thereafter, by twenty-one consecutive reductions of $5.445 million (the “Revolving Facility”). Proceeds from the Global Ultraco Refinancing are to be used for general corporate and working capital purposes, including, but not limited to vessel purchases, capital improvements, stock buybacks or equity repurchases, retirement of debt and other strategic initiatives.

During the six months ended June 30, 2023, the Company borrowed $75.0 million under the Term Facility and $125.0 million under the Revolving Facility.

Pursuant to the Global Ultraco Debt Facility, the Term Facility and the Revolving Facility mature and are repayable in full on September 28, 2028 (the “Loan Maturity Date”). The Term Facility will be repaid in twenty-two quarterly installments of $12.45 million beginning on June 15, 2023, with a final balloon payment due on the Loan Maturity Date. Outstanding borrowings under the Global Ultraco Debt Facility bear interest at a rate equal to the sum of (i) Term SOFR (as defined in the Global Ultraco Debt Facility) for the relevant interest period, (ii) a credit spread adjustment of 26.161 basis points per annum to achieve parity between the SOFR-based benchmark rate on the Global Ultraco Debt Facility and the LIBOR-based benchmark rate on the Original Global Ultraco Debt Facility and (iii) the applicable margin, which ranges between 2.05% and 2.75% based on the consolidated net leverage ratio of the Company and certain sustainability-linked criteria.

The Global Ultraco Debt Facility is secured by, among other items, a first priority mortgage on 52 of the Company’s owned vessels, as identified in the Global Ultraco Debt Facility, and such other vessels that the Company may, from time to time, include with the approval of the Lenders (collectively, the “Eagle Vessels”). The Global Ultraco Debt Facility contains standard affirmative and negative covenants as well as certain financial covenants. The financial covenants require the Company, on a consolidated basis, to maintain at all times (a) (i) cash and cash equivalents or (ii) undrawn Revolving Facility commitments up to seven months prior to the Loan Maturity Date not less than the greater of (i) $0.6 million per vessel owned directly or indirectly by the Company and its subsidiaries or (ii) 7.5% of consolidated total debt; (b) a debt to capitalization ratio of not greater than 0.60:1.00; and (c) positive working capital (excluding the current portions of operating lease liabilities and long-term debt). Additionally, the Company has to ensure that the aggregate fair market value of the Eagle Vessels is not less than 140% of the aggregate principal amounts outstanding under the Global Ultraco Debt Facility. As of June 30, 2023, the Company was in compliance with all applicable financial covenants under the Global Ultraco Debt Facility.

Prior to the Global Ultraco Refinancing, on October 1, 2021, Eagle Ultraco, along with certain of its vessel-owning subsidiaries as guarantors, entered into the Original Global Ultraco Debt Facility with the lenders party thereto. The Original Global Ultraco Debt Facility provided for an aggregate principal amount of $400.0 million, which consisted 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.

The Original Global Ultraco Debt Facility had a maturity date of October 1, 2026. Outstanding borrowings bore interest at a rate of LIBOR plus 2.10% to 2.80% per annum, depending on certain metrics such as the Company's financial leverage ratio and meeting sustainability linked criteria. Repayments of $12.45 million were due quarterly and began on December 15, 2021, with a final balloon payment of all outstanding principal and accrued interest due upon maturity. As a result of the sale of the vessels Newport Eagle, Montauk Eagle and Sankaty Eagle, the aggregate principal amount available under the revolving credit facility was reduced from $100.0 million to $85.0 million.

The Original Global Ultraco Debt Facility was secured by 49 of the Company's vessels. The Original Global Ultraco Debt Facility contained certain standard affirmative and negative covenants along with financial covenants. Through the date of the Global Ultraco Refinancing, the Company was in compliance with all applicable covenants under the Original Global Ultraco Debt Facility.

F-10

The Global Ultraco Refinancing was accounted for as a modification under Accounting Standards Codification (“ASC”) 470, Debt. As such, a new effective interest rate was determined based on the carrying value of the term facility just prior to the Global Ultraco Refinancing, including unamortized discount and debt issuance costs, as well as fees paid to the Lenders attributable to the Term Facility in connection with the Global Ultraco Refinancing. In addition, an amount of previously unamortized debt issuance costs and fees paid to lenders attributable to the revolving credit facility under the Original Global Ultraco Debt Facility as well as fees paid to the Lenders and third party costs attributable to the Revolving Facility in connection with the Global Ultraco Refinancing shall be deferred and amortized over the term of the Revolving Facility in a manner consistent with the Revolving Facility’s contractual reduction in capacity.

Prior to the Global Ultraco Refinancing, in October 2021, the Company entered into four interest rate swaps for the notional amount of $300.0 million of the term facility under the Original Global Ultraco Debt Facility to hedge the Original Global Ultraco Debt Facility’s LIBOR-based floating interest rate. In June 2023, the Company modified its then outstanding interest rate swap agreements to replace the underlying benchmark interest rate from LIBOR to SOFR with all other material terms remaining unchanged. See Note 5. Derivative Instruments, for additional details.

Convertible Bond Debt

On July 29, 2019, the Company issued $114.1 million in aggregate principal amount of ~~5.00%~~5.0% 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 6six Ultramax vessels and for general corporate purposes, including working capital.

The Convertible Bond Debt bears interest at a rate of ~~5.00%~~5.0% per annum on the outstanding principal amount thereof, payable semi-annually in arrears on February 1 and August 1 of each year, 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”).

The Convertible Bond Debt will mature on August 1, 2024 (the “Maturity Date”), unless earlier repurchased, redeemed or converted pursuant to its terms. From time to time, the Company may, subject to market conditions and other factors and to the extent permitted by law, opportunistically repurchase the Convertible Bond Debt in the open market or through privately negotiated transactions. 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 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)declared through June 30, 2023 is ~~28.523~~31.1402 shares of the Company's common stock per $1,000 principal amount of Convertible Bond Debt, which is equivalent to a conversion price of approximately ~~$35.06~~$32.11 per share of ~~its~~ common stock (subject to further adjustments for 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 to shareholder approval requirements in accordance with the listing standards of the ~~Nasdaq Global Select Market)~~New York Stock Exchange).

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-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~~a general, unsecured senior ~~obligations~~obligation 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.

F-11

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.

InAs of January 1, 2022, 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~~under 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 formodified retrospective approach, the Convertible Bond Debt ~~based on the above guidance~~no longer required bifurcation and ~~attributed~~separate accounting of its conversion feature that was previously separately accounted for as an equity component. As such, an adjustment to beginning retained earnings of $8.7 million was recorded within Accumulated deficit and a ~~portion of the proceeds~~$20.7 million reduction to Additional paid-in capital was recorded to reverse the equity ~~component. The resulting debt discount~~component and an offsetting $12.0 million was ~~amortized using the effective interest method over the expected life of the~~recorded within Convertible Bond Debt, ~~as interest expense. Additionally, the~~net of debt discount and debt issuance costs ~~were allocated based on~~as a reversal of the ~~total amount incurred~~debt discount. See Note 2. Significant Accounting Policies, in the notes to the ~~liability and equity components using~~consolidated financial statements included in 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~~Annual Report for ~~the cumulative impact of the adoption. See Note 2, Recent Accounting Pronouncements, for~~additional discussion of the impact of ASU 2020-06 on the accounting for the Convertible Bond Debt and the condensed consolidated financial statements upon adoption on January 1, 2022.

Share Lending Agreement

In connection with the issuance of the Convertible Bond Debt, certain persons entered into an arrangement (the “Share Lending Agreement”) to borrow up to 511,840 shares of the Company’s common stock through share lending arrangements from Jefferies LLC (“JCS”), an initial purchaser of the Convertible Bond ~~Debt, which in turn~~Debt. In connection with the foregoing, the Company entered into an ~~arrangement~~agreement with an affiliate of JCS to ~~borrow the~~lend up to 511,840 newly issued shares ~~from an entity affiliated with Oaktree Capital Management, LP, one~~ of the Company’s ~~shareholders.~~common stock. The number of shares loaned under the Share Lending Agreement have been adjusted for the Reverse Stock Split. As of June 30, ~~2022,~~2023, the fair value of the 511,840 outstanding loaned shares was ~~$26.6~~$24.6 million based on the closing price of the common stock on June 30, ~~2022.~~2023. 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,~~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~~net income per share. If JCS were to file bankruptcy or commence similar administrative, liquidating or restructuring proceedings, the Company will have to consider 511,840 shares lent to JCS as issued and outstanding for the purposes of calculating ~~earnings~~net income per share.

Interest Expense

~~Global Ultraco Debt Facility~~

~~On October 1, 2021, Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary~~A summary of the Company, along with certain of its vessel-owning subsidiaries as guarantors, entered into a new senior secured credit facility (the “Global Ultraco Debt Facility”) with the lenders party thereto (the “Lenders”) Credit Agricole Corporate and Investment Bank (“Credit Agricole”), 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 providesinterest expense 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~~

~~F-10~~

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 Holdco Revolving Credit Facility, New Ultraco Debt Facility and Norwegian Bond Debt (each as defined in Note 6, Debt, in the Notes to the Consolidated Financial Statements in the Form 10-K) and for general corporate purposes. The Company paid fees of $5.8 million to the Lenders in connection with the transaction.

The Global Ultraco Debt Facility has a maturity date of five years from the date of borrowing on the Term Facility, which is October 1, 2026. Outstanding borrowings bear interest at a rate of LIBOR plus 2.10% to 2.80% per annum, depending on certain metrics such as the 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 due upon maturity. The loan is repayable in whole or in part without premium or penalty prior to the maturity date subject to certain requirements stipulated in the Global Ultraco Debt Facility.

The Global Ultraco Debt Facility is secured by 49 of the Company's vessels. The Global Ultraco Debt Facility contains certain standard affirmative and negative covenants along with financial covenants. The financial covenants include: (i) minimum consolidated liquidity based on the greater of (a) $0.6 million per vessel owned directly or indirectly by the Company or (b) 7.5% of the Company's total debt; (ii) debt to capitalization ratio not greater than 0.60:1.00; and (iii) maintaining positive working capital.

Pursuant to the Global Ultraco Debt Facility, the Company borrowed $350.0 million and together with cash on hand repaid the outstanding debt, accrued interest and commitment fees under the Holdco Revolving Credit Facility and 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 $300.0 million of the Term Facility 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 5, Derivative Instruments, for additional details).

~~Interest Rates~~

~~2022~~

~~For~~ the three and six months ended June 30, 2023 and 2022 is as follows:


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Convertible Bond Debt	$	1,302	$	1,426	$	2,603	$	2,853
Global Ultraco Debt Facility – Term Facility (1)	1,937		2,134		3,730		4,347
Global Ultraco Debt Facility – Revolving Facility	236		—		236		—
Commitment fees on Revolving Facility	331		248		576		493
Amortization of debt discount and debt issuance costs	628		530		1,146		1,092
Total interest expense	$	4,434	$	4,338	$	8,291	$	8,785


(1)			Interest expense on the Term Facility under the Global Ultraco Debt Facility includes a reduction of $2.2 million and $0.1 million of interest from interest rate derivatives designated as hedging instruments for the three months ended June 30, 2023 and 2022, respectively and a reduction of $4.5 million of interest and $0.4 million of interest from interest rate derivatives designated as hedging instruments for the six months ended June 30, 2023 and 2022. See Note 5. Derivative Instruments, for additional information.

F-12

The following table presents the ~~interest rate on the Convertible Bond Debt was 5.00%. The~~ weighted average effective interest rate on the Company’s debt obligations, including the amortization of debt ~~discount~~discounts 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 andcosts associated with 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~~facilities 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 six months ended June 30, ~~2021,~~2023 and 2022, but excludes the impact on interest from interest rate derivatives designated as hedging instruments. In addition, the following table presents the range of contractual interest rates on the ~~Convertible Bond Debt was 5.00%. The weighted average effective interest rate including~~Company’s debt obligations, excluding the ~~amortization~~impact of ~~debt discount and debt issuance~~ costs ~~for these periods was 10.14%.~~

For the three months ended 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 andassociated with commitment fees ~~of 40% of the margin~~ on ~~the undrawn portion of the~~ 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~~facilities for ~~this period was 3.25%.~~

For the six months ended 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 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 3.23%.

~~F-11~~

~~For~~ the three and six months ended June 30, ~~2021,~~2023 and 2022.


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Weighted average effective interest rate	7.65	%	4.52	%	7.48	%	4.28	%
Range of interest rates	5.00% to 7.57%		2.98% to 5.00%		5.00% to 7.57%		2.35% to 5.00%

The following table presents the ~~interest rate on the Norwegian Bond Debt was 8.25%. The~~ weighted average effective interest rate on the Company’s debt obligations, including the impact on interest from interest rate derivatives designated as hedging instruments as well as amortization of debt ~~discount~~discounts and debt issuance costs ~~for these periods was 9.13%~~ and ~~9.00%, respectively.~~

~~For~~costs associated with commitment fees on revolving facilities for the three and six months ended June 30, 2021, the interest rate on our outstanding debt under the Super Senior Facility (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 2.58%. Additionally, we paid commitment fees of 40% of the margin on the undrawn portion of the Super Senior Revolver Facility.2023 and 2022.

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:~~

Three Months Ended Six Months Ended
(In thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Convertible Bond Debt interest $ 1,426 $ 1,427 $ 2,853 $ 2,853
Global Ultraco Debt Facility interest 2,134 — 4,347 —
Holdco Revolving Credit Facility interest — 158 — 158
New Ultraco Debt Facility interest — 1,540 — 3,005
Norwegian Bond Debt interest — 3,724 — 7,354
Super Senior Facility interest — — — 30
Amortization of debt discount and debt issuance costs 530 1,838 1,092 3,467
Commitment fees on revolving credit facilities 248 112 493 183
Total Interest expense $ 4,338 $ 8,799 $ 8,785 $ 17,050


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Weighted average effective interest rate, including hedging instruments	5.05	%	4.49	%	4.83	%	4.50	%

Scheduled Debt Maturities

The following table presents the scheduled maturities of principal amounts of our debt obligations as of June 30, ~~2022:~~2023:


(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
									Convertible Bond Debt(1)		Global Ultraco Debt Facility – Revolving Facility(2)		Global Ultraco Debt Facility – Term Facility		Total
Six months ending December 31, 2023								Six months ending December 31, 2023	$	—	$	—	$	24,900	$	24,900
2024	2024	114,119		49,800		163,919		2024	104,119		—		49,800		153,919
2025	2025	—		49,800		49,800		2025	—		—		49,800		49,800
2026	2026	—		88,350		88,350		2026	—		16,230		49,800		66,030
2027								2027	—		21,780		49,800		71,580
2028								2028	—		86,990		63,750		150,740
		$	114,119	$	262,650	$	376,769		$	104,119	$	125,000	$	287,850	$	516,969

~~F-12~~


(1)			This amount represents the aggregate principal amount of the Convertible Bond Debt outstanding that would be repaid, in cash, at the election of the Company, upon maturity.
(2)			Represents amounts payable based on the amount outstanding under the Revolving Facility as of June 30, 2023 and the timing of contractual reductions in capacity of the Revolving Facility. The amount and timing of actual repayments may change as a result of additional future borrowings or repayments under the Revolving Facility.

Note 5. Derivative Instruments

~~Interest rate swaps~~

~~During October 2021, the~~The Company ~~entered into 4~~uses 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~~to manage its exposure to interest rate ~~ranging between 0.83% and 1.06% to hedge the LIBOR-based floating interest rate.~~

~~During 2020,~~risk on its debt. Generally, the Company ~~entered~~enters into ~~a series of~~ interest rate ~~swap agreements to~~swaps with the objective of effectively ~~convert a portion of its~~converting 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~~floating-rate to a fixed-rate ~~basis. In August 2021,~~obligation. As of June 30, 2023, 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~~Company’s outstanding interest rate swaps were designated as hedging instruments and qualified as cash flow hedges.

The Company uses ~~interest rate~~forward freight agreements (“FFAs”) and bunker swaps ~~for the management of interest rate risk~~to manage its exposure ~~as an interest rate swap effectively converts a portion of the Company’s debt from a floating~~ to ~~a fixed rate. The interest rate swap is an agreement between~~changes in charter hire rates and market bunker prices, respectively. Generally, the Company ~~and counterparties to pay, in~~enters into FFAs with the objective of effectively fixing charter hire rates for future ~~a fixed-rate payment in exchange for the counterparties paying~~charter transactions and the Company ~~a variable payment. The amount~~enters into bunker swaps with the objective of ~~the net payment obligation is based on the notional amount of the interest rate swap and the prevailing market interest rates.~~effectively fixing forecasted bunker transactions. The Company may terminate the 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 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 against the rate fixed for each swap.

~~Tabular disclosure of derivatives location~~

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

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 income. The estimated income that is currently recorded in Accumulated other comprehensive income as of June 30, 2022 that is expected to be reclassified into the earnings within the next twelve months is $5.2 million. No portion of the cash flow hedges were ineffective during the three and six months ended June 30, 2022.

~~The effect of~~utilizes these derivative instruments ~~on the Condensed Consolidated Statements of Operations for the three~~to economically hedge these risks and ~~six months ended June 30, 2022 and 2021 is below:~~

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 Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Interest rate swaps Interest expense $ (82) $ 151 $ 315 $ 296

does not designate them as hedging instruments.

F-13

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

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~~For derivative instruments that ~~reduce the risk of specific vessels to~~are not designated as hedging instruments, changes in the ~~freight market. The Company’s FFAs~~fair value of the instruments and ~~bunker swaps have not qualified for hedge accounting treatment. As such,~~the gain or loss ultimately realized upon settlement of the derivative are reported in Realized and unrealized ~~and realized gains are recognized as a component of Other expense,~~gain on derivative instruments, net in the Condensed Consolidated Statements of 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.

Operations.

As of June 30, ~~2022,~~2023, the Company ~~had~~has International Swaps and Derivatives Association ~~(“ISDA”)~~ agreements with ~~5 applicable banks and~~five 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 ~~two counterparties~~the one counterparty 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~~

Interest rate swaps

In June 2023, the Company ~~does not anticipate non-performance by any~~modified its then outstanding interest rate swap agreements to replace the underlying benchmark interest rate from LIBOR to SOFR with all other material terms remaining unchanged. As discussed in Note 2. Significant Accounting Policies and Pronouncements, the Company utilized certain expedients under ASU 2020-04 to account for these modifications as continuations of ~~the counterparties.~~

existing agreements which had no impact on our condensed consolidated financial statements.

As of June 30, ~~2022,~~2023, the Company had the following outstanding ~~bunker swap agreements to purchase 18,200 metric tons of high~~interest rate swaps that were designated and ~~low sulfur fuel oil with prices ranging between $486 and $841 that are expiring at March 31, 2023. The volume represents less than 10% of our estimated consumption on our fleet for the year.~~qualified as cash flow hedges.


Range of Fixed Rates	Weighted Average Fixed Rate	Notional Amount Outstanding
0.62% to 0.85%	0.66%	$	212,850

The ~~following table shows our open positions~~effect of these derivative instruments on ~~FFAs~~the Condensed Consolidated Balance Sheets as of June 30, ~~2022:~~2023 and December 31, 2022 is as follows:

FFA Period Number of Days Hedged Average FFA Contract Price
Quarter ending September 30, 2022 1305 $ 23,653
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 Baltic Supramax Index (“BSI”) rate and the FFA contract price. The gains or losses are recorded in Realized and unrealized (gain)/loss on derivative instruments, net in the Condensed Consolidated Statements of Operations.


	Fair Value of Derivative Assets/(Liabilities)
	Balance Sheet Location	June 30, 2023		December 31, 2022
Derivatives designated as hedging instruments
Interest rate contracts - interest rate swaps
	Fair value of derivative assets - current	$	8,434	$	8,479
	Fair value of derivative assets - noncurrent	6,331		8,184
		$	14,765	$	16,663

F-14

The effect of ~~non-designated derivative~~these instruments on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022 is as follows:


Derivatives in Cash Flow Hedging Relationships	Gain/(Loss) Recognized in Other Comprehensive Income/(Loss)								Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings	Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings
	Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022			June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Interest rate contracts
Interest rate swaps	$	3,319	$	2,252	$	2,721	$	10,536	Interest expense	$	2,284	$	82	$	4,545	$	(315)

Further information on the effect of these instruments on the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2023 and 2022 is as follows:


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Accumulated other comprehensive income, beginning balance	$	13,690	$	10,567	$	16,549	$	1,886
Gain recognized in Other Comprehensive Income/(Loss)	3,319		2,252		2,721		10,536
(Gain)/loss reclassified from Other Comprehensive Income/(Loss) into earnings	(2,284)		(82)		(4,545)		315
Accumulated other comprehensive income, ending balance	$	14,725	$	12,737	$	14,725	$	12,737

Of the amount recorded in Accumulated other comprehensive income as of June 30, 2023, $8.6 million is expected to be reclassified into earnings within the next twelve months.

Forward freight agreements and bunker swaps

A summary of outstanding FFAs as of June 30, 2023 is as follows:


FFA Period	Average FFA Contract Price(1)		Number of Days Hedged


Quarter ending September 30, 2023 - Buy Positions	$	14,289	(720)
Quarter ending September 30, 2023 - Sell Positions	$	14,976	765
Quarter ending December 31, 2023 - Buy Positions	$	13,896	(705)
Quarter ending December 31, 2023 - Sell Positions	$	14,855	795


(1)			Presented in whole dollars.

As of June 30, 2023, the Company had outstanding bunker swap agreements to purchase 7,350 metric tons of low sulphur fuel oil with prices ranging between $469 and $544 with contracts expiring between July and December 2023. The Company does not expect non-performance by any of the counterparties to the Company’s bunker swap transactions.

F-15

The effect of these derivative instruments on the Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 is as follows:

(In thousands) Three Months Ended Six Months Ended
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 Realized and unrealized (gain)/loss on derivative instruments, net $ 5,572 $ 5,388 $ 3,799 $ 7,354
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 Realized and unrealized (gain)/loss on derivative instruments, net (2,620) (545) (4,394) (1,298)
Bunker swaps - unrealized loss/(gain) Realized and unrealized (gain)/loss on derivative instruments, net 291 (624) (2,512) (628)
Total $ (9,890) $ 35,887 $ (1,988) $ 36,597


	Fair Value of Derivative Assets/(Liabilities)
	Balance Sheet Location	June 30, 2023		December 31, 2022
Derivatives not designated as hedging instruments
Commodity contracts - FFAs
	Fair value of derivative assets - current	$	1,380	$	—

		$	1,380	$	—

	Fair value of derivative liabilities - current	$	(8)	$	(70)

		$	(8)	$	(70)

Commodity contracts - bunker swaps




	Fair value of derivative liabilities - current	$	—	$	(93)

		$	—	$	(93)

The effect of these instruments on the Condensed Consolidated Statements of Operations, which is presented in Realized and unrealized gain on derivative instruments, net for the three and six months ended June 30, 2023 and 2022 is as follows:


	(Gain)/Loss Recognized in Earnings
	Three Months Ended				Six Months Ended
Derivatives not designated as hedging instruments	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Commodity contracts
FFAs - realized (gain)/loss	$	(900)	$	5,572	$	(757)	$	3,799
Bunker swaps - realized loss/(gain)	130		(2,620)		120		(4,394)
	(770)		2,952		(637)		(595)
FFAs - unrealized (gain)/loss	(1,933)		(13,133)		(1,700)		1,119
Bunker swaps - unrealized (gain)/loss	(88)		291		(85)		(2,512)
	(2,021)		(12,842)		(1,785)		(1,393)
Realized and unrealized gain on derivative instruments, net	$	(2,791)	$	(9,890)	$	(2,422)	$	(1,988)

Derivatives not designated as hedging instruments (in thousands) Balance Sheet location June 30, 2022 December 31, 2021
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 10 —
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 June 30, ~~2022~~2023, $0.4 million and ~~December 31,~~$0.3 million of collateral was pledged related to outstanding FFAs and bunker swaps, respectively.

F-16

Note 6. Stockholders’ Equity

Shareholder Rights Agreement

On June 22, 2023, the Company entered into a Rights Agreement (the “Rights Agreement”) with Computershare Trust Company, N.A., a national banking corporation, as rights agent. In connection therewith, the Company’s Board of Directors (the “Board”) declared a dividend of one preferred share purchase right (“Right”) for each outstanding share of the Company’s Common Stock, $0.01 par value. The dividend was payable on July 3, 2023 to shareholders of record as of the close of business on such date (the “Right Record Date”). In addition, one Right will automatically attach to each share of Common Stock issued between the Right Record Date and the date when the Rights become exercisable. The Rights will expire at the earlier of (i) 5:00 P.M., New York City time, on the third anniversary of the date of the declaration of the dividend of Rights and (ii) 5:00 P.M., New York City time, on the first anniversary of the date of the declaration of the dividend of Rights if Shareholder Approval (as defined in the Rights Agreement) has not been received prior to such time, unless such date is advanced or extended or unless the Rights are earlier redeemed or exchanged by the Board.

Each Right will allow its holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, $0.01 par value (“Preferred Shares”), for $180.00, subject to adjustment under certain conditions, once the Rights become exercisable.

Each one one-thousandth of a Preferred Share, if issued:

•will not be redeemable;

•will entitle the holder to quarterly dividend payments equal to the dividend paid on one share of Common Stock;

•will entitle the holder upon liquidation to receive either $1.00 or an amount equal to the payment made on one share of Common Stock;

•will have one vote and vote together with the Common Stock, except as required by law; and

•if shares of Common Stock are exchanged via merger, consolidation or a similar transaction, will entitle the holder to a payment equal to the payment made on one share of Common Stock.

The Rights will not be exercisable until:

•10 business days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 15% or more of the outstanding Common Stock, or, if earlier;

•10 business days (or a later date determined by the Board before any person or group becomes an Acquiring Person) after a person or group Commences (as defined in the Rights Agreement) a tender or exchange offer which, if completed, would result in that person or group becoming an Acquiring Person.

Common Stock Repurchase – Related Party

On June 22, 2023, the Company entered into an agreement to purchase 3,781,561 shares of Common Stock from OCM Opps EB Holdings Ltd. (the “Seller”), a related party, for $58.00 per share, or an aggregate purchase price of $219.3 million (the “Share Repurchase”). The Share Repurchase closed on June 23, 2023. The shares purchased, which comprised the Seller’s entire ownership position of Common Stock as of the date of the Share Repurchase, represented 28% of the outstanding Common Stock as of that date and were immediately retired. The Company incurred $3.5 million of fees and transaction costs with third parties in direct connection with the Share Repurchase.

Common Stock Repurchase Program

On October 4, 2021, the Company ~~posted cash collateral related~~announced a share repurchase program under which the Company may purchase up to ~~derivative instruments~~$50.0 million of the Company’s Common Stock. The timing, volume and nature of transactions under ~~its collateral security arrangements~~this program will be at the Board’s discretion and may be made through open market transactions or privately negotiated transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. This program has no expiration date and may be suspended or terminated by the Company at any time without prior notice. As of ~~$16.8 million and $15.1 million, respectively, which is recorded within Current assets in the Condensed Consolidated Balance Sheets.~~June 30, 2023, no shares have been repurchased under this program.

F-17

Dividends

On March 2, 2023, the Board declared a cash dividend of $0.60 per share to be paid on March 23, 2023 to shareholders of record at the close of business on March 15, 2023.

On May 4, 2023, the Board declared a cash dividend of $0.10 per share to be paid on May 25, 2023 to shareholders of record at the close of business on May 17, 2023.

For the six months ended June 30, 2023, the Company paid $10.0 million in dividends.

6.Note 7. 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~~Carrying values reported in the Condensed Consolidated Balance Sheets ~~for interest-bearing deposits~~ approximate ~~their~~ fair value due to ~~the~~their highly liquid and short-term ~~nature thereof.~~nature.

Collateral on derivatives—Carrying values reported in the Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature.

Derivative assets and liabilities—The fair values of derivative assets and liabilities, which include interest rate swaps, FFAs and bunker swaps, are estimated using observable inputs for similar instruments as of the 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.

Long-term Debt—~~the carrying values approximates~~The fair ~~values for bonds issued under the~~value of Convertible Bond Debt, which is traded in the over-the-counter market, is estimated based on ~~NASDAQ.~~quoted prices in markets that are not active on identical instruments. The carrying amount of ~~our term loan borrowing~~the Term Facility under the Global Ultraco Debt Facility approximates its fair value, due to its variable interest rates.

~~F-15~~

The carrying values of other financial assets and liabilities (primarily accounts receivable, accounts payable and other accrued expenses) approximate their fair value due to their relative short-term nature.

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:

•Level 1 – Quoted prices in active markets for identical assets or liabilities. ~~Our Level 1 non-derivatives include cash, money-market accounts, restricted cash accounts and collateral on derivatives.~~

•

Level 2 – Quoted prices for similar assets and liabilities in active markets, ~~or inputs~~quoted prices for identical assets and liabilities in markets that are observable. Our Level 2 non-derivatives include our debt balances under the Convertible Bond Debt and the 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, usesnot active or other 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.inputs.

•

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

unobservable.

~~June 30, 2022~~
Fair Value
(In thousands)
Carrying Value (7)
Level 1 Level 2
Assets
Cash and cash equivalents (1)
$ 141,530 $ 141,530 $ —
Collateral on derivatives 16,770 16,770 —
Fair value of derivative assets - current (2)
8,459 — 8,459
Fair value of derivative assets - noncurrent (3)
7,746 — 7,746
Liabilities
Global Ultraco Debt Facility (4)
262,650 — 262,650
Convertible Bond Debt (5)
114,119 — 199,698
Fair value of derivative liabilities - current (6)
269 — 269

~~December 31, 2021~~

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 (noncurrent) of $2.6 million at June 30, 2022 and $0.1 million at December 31, 2021.~~

~~(2)~~ 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 June 30, 2022 and $4.7 million of unrealized mark-to-market gains on FFAs and bunker swaps as of December 31, 2021.

~~(3)~~ ~~Includes $7.7 million and $3.1 million of unrealized gains on our interest rate swaps as of June 30, 2022 and December 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 June 30, 2022 and December 31, 2021.~~

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

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


			Fair Value
June 30, 2023	Carrying Value		Level 1		Level 2
Assets
Cash, cash equivalents and restricted cash	$	118,278	$	118,278	$	—
Collateral on derivatives	676		676		—
Fair value of derivative assets – current	9,814		—		9,814
Fair value of derivative assets – noncurrent	6,331		—		6,331
Liabilities
Global Ultraco Debt Facility (1)(2)	287,850		—		287,850
Convertible Bond Debt (1)(3)	104,119		—		160,489
Fair value of derivative liabilities – current	8		—		8

~~F-16~~F-18

~~losses on bunker swaps as of June 30, 2022 and $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, 2021.~~

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


			Fair Value
December 31, 2022	Carrying Value		Level 1		Level 2
Assets
Cash, cash equivalents and restricted cash	$	189,754	$	189,754	$	—
Collateral on derivatives	909		909		—
Fair value of derivative assets – current	8,479		—		8,479
Fair value of derivative assets – noncurrent	8,184		—		8,184
Liabilities
Global Ultraco Debt Facility (1)(2)	237,750		—		237,750
Convertible Bond Debt (1)(3)	104,119		—		172,661
Fair value of derivative liabilities – current	163		—		163


(1)			Carrying value represents outstanding principal amount and excludes debt discounts and debt issuance costs.
(2)			Fair value is based on the required repayment to the lenders if the debt was discharged in full on June 30, 2023 and December 31, 2022, as applicable.
(3)			Fair value is based on pricing data (including observable trade information) sourced from Bloomberg.com.

Note 7.8. 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.~~business, principally personal injury and property casualty claims. Generally, we expect that such claims would be covered by insurance, subject to customary deductibles. 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.

Certain routine commercial claims have been asserted against the Company that relate to contractual disputes with certain of our charterers. The nature of these disputes involve disagreements over losses claimed by charterers during or as a result of the performance of certain voyage charters, including but not limited to delays in the performance of the charters and off-hire during the charters. The related legal proceedings are at various stages of resolution.

In March 2021, the U.S. government began investigating an allegation that one of the ~~Company's~~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 ongoing, and although at this time we do not believe that this matter will have a material impact on 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 potential fines, penalties or associated costs that may be ~~issued,~~incurred, and the Company is cooperating fully with the U.S. government in its investigation of this matter. ~~For~~

We have not been involved in any legal proceedings, other than as disclosed above, which we believe may have, or have had, a significant effect on our business, financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened, other than as described above, which we believe may have a significant effect on our business, financial position and results of operations or liquidity. However, these proceedings, even if lacking merit, could result in the expenditure of significant financial and managerial resources.

In accordance with U.S. GAAP, the Company accrues for contingent liabilities when it is probable that such a liability has been incurred and the amount of loss can be reasonably estimated. The Company evaluates its outstanding legal proceedings each quarter to assess its contingent liabilities and adjusts such liabilities, as appropriate, based on management’s best judgment after consultation with counsel. The Company incurred no costs associated with contingent liabilities for the three and six months ended June 30, 2023 and incurred no costs and $0.1 million in costs associated with contingent liabilities for the three and six months ended June 30, 2022, respectively. There is no assurance that the Company’s contingent liabilities will not need to be adjusted in the future.

F-19

Note 9. Leases

Time charter-out contracts

Time charter-out contracts are accounted for as operating leases. The Company records revenue generated from time charter-out contracts on a straight-line basis over the term of the respective time charter agreements as Revenues, net in the Condensed Consolidated Statements of Operations. See Note 10. Revenue, for additional details.

A summary of lease payments expected to be received on fixed time charter-out contracts, net of commission, assuming no off-hire days, other than those related to scheduled interim or special surveys of the related vessel and excluding any voyage expenses associated with such contracts, as of June 30, 2023 is as follows:


Year:	Time Charter-Out Contracts
Remainder of 2023	$	19,673
2024	—
2025	—
2026	—
2027	—
Thereafter	—
	$	19,673

Time charter-in contracts

Time charter-in contracts are accounted for as operating leases. The Company records operating lease cost for time charter-in contracts as Charter hire expenses in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term. Due to the volatility of freight rates, the Company generally concludes that it is not reasonably certain to exercise any options to extend the lease term at lease commencement.

As of June 30, 2023, the Company chartered-in, on a long-term basis, five Ultramax vessels. Details of modifications of or new long-term time charter-in contracts for the six months ended June 30, ~~2022 and 2021, the Company incurred and recorded $0.2 million and $1.5 million, respectively,~~2023 are as Other operating expense in its Condensed Consolidated Statements of Operations relating to this incident, which include legal fees, surety bond expenses, vessel off-hire, crew changes and travel costs.follows:

~~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%.

(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,~~17, 2018, the Company entered into an agreement to charter-in a 62,487 dwt, ~~2016 built~~2016-built Ultramax vessel for two years. The hire rate for the ~~vessel until March 2020~~first year was $14,250 per day and ~~$15,250 per day thereafter.~~the hire rate for the second year was $15,250. The Company took delivery of the vessel in ~~the fourth quarter of~~December 2018. OnIn December ~~25,~~ 2019, the Company ~~renegotiated~~entered into a lease addendum which replaced the ~~lease~~

~~F-17~~

~~terms for another year at~~original lease’s second year’s hire rate with a new hire rate of $11,600 per ~~day. The Company accounted for this as a lease modification on December 25, 2019~~day from March 1, 2020 through July 31, 2021 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~~added an option 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~~an additional 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 ofday from August 1, 2021 through July 31, 2022. In May 4, 2021, ~~was 1.38%. On March 17, 2022,~~ the Company ~~has further extended~~exercised its option for 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 ofadditional year. In 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~~lease addendum that extended the lease term at a hire rate of ~~$5,900~~$23,888 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~~from August 1, 2022 through June 1, 2023 and added 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~~lease term at a hire rate of ~~$6,500~~$25,888 per day ~~plus 57% of~~from June 2, 2023 through July 1, 2024. In March 2023, the ~~BSI 58 average of 10 time charter routes as published by~~Company entered into a lease addendum that replaced the ~~Baltic Exchange each business day. The Company has increased~~hire rate from June 1, 2023 to May 1, 2024 from $25,888 per day to $17,500 per day and added an option to extend the lease ~~liability and the corresponding right-of-use asset by $7.5 million~~term at a hire rate of $19,500 per day from May 1, 2024 to ~~reflect the extended~~April 1, 2025. The lease ~~term~~is expected to terminate 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%.April 2025.

~~(v)~~ On September 6, 2021, the Company entered into an agreement to charter-in a ~~2021 built~~64,539 dwt, 2022-built Ultramax vessel for ~~a period of a minimum of~~ twelve months ~~and a maximum of fifteen~~with an option to extend for an additional three months at a hire rate of $11,250 per day plus 57.5% of the BSI ~~58 average~~and an option to extend for an additional year at a hire rate of ~~10 time charter routes published by~~$10,750 per day plus 57.5% of the ~~Baltic Exchange each business day.~~BSI. The Company ~~has~~took delivery of the vessel in May 2022. In March 2023, the Company entered into a lease addendum that extended the lease term for twelve months at a hire rate of $8,500 plus 57.5% of the BSI and added an option to extend the lease term for ~~another year, during which time the fixed~~an additional twelve months at a hire rate ~~decreases to $10,750 per day with no change to the remaining terms. On May 17, 2022, the Company took delivery~~of $9,500 plus 57.5% of the ~~vessel and recorded $9.7 million as a~~BSI. The lease ~~liability and corresponding right-of-use asset~~is expected to terminate 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%.~~2025.

Office leases

~~On October 15, 2015, the~~Office leases are accounted for as operating leases. The Company ~~entered into a commercial~~records operating lease ~~agreement as a sublessee~~cost 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 recordedleases as ~~Restricted cash - noncurrent in the accompanying Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021.~~

In November 2018, the Company entered into an office lease agreement in Singapore, which was initially set to expire in October 2021, with an average annual rent of $0.3 million. On August 17, 2021, the Company renewed the lease on the existing office space for an additional 5 years with an average annual rent of $0.4 million. The Company increased the lease liability and the corresponding right-of-use asset by $1.3 million in its Condensed Consolidated Balance Sheet as of December 31, 2021. The discount rate utilized in the measurement of lease liability and the corresponding right-of-use asset based on the Company's implied credit rating as of August 17, 2021 was 3.09%. Additionally, the Company entered into a new lease agreement for an additional office space in Singapore for 4.9 years beginning in the second quarter of 2022 with an average annual rent of $0.2 million. On February 15, 2022, the Company took possession of the additional office space. The Company has recognized $0.5 million of lease liability and corresponding right-of-use asset in its Condensed Consolidated Balance Sheet as of 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~~Operations.

F-20

A summary of Operating lease right-of-use assets and operating lease liabilities balances, by asset type, and certain additional quantitative information related to the Company’s operating leases as of June 30, 2023 and December 31, 2022 is as follows:


	June 30, 2023			December 31, 2022
Operating lease right-of-use assets
Time charter-in contracts greater than 12 months	$	11,980		$	19,116
Office leases	3,492			3,890
	$	15,472		$	23,006
Current portion of operating lease liabilities
Time charter-in contracts greater than 12 months	$	13,629		$	21,328
Office leases	645			717
	$	14,274		$	22,045
Noncurrent portion of operating lease liabilities
Time charter-in contracts greater than 12 months	$	—		$	—
Office leases	2,847			3,173
	$	2,847		$	3,173
Weighted average remaining lease term (in years)
Time charter-in contracts greater than 12 months	0.6			0.6
Office leases	4.9			4.7
Weighted average discount rate
Time charter-in contracts greater than 12 months	6.5		%	6.0		%
Office leases	7.1		%	6.9		%

A summary of the components of the Company’s lease expenses and sub-lease income for the three and six months ended June 30, 2023 and 2022 ~~and 2021.~~

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


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Operating lease cost
Time charter-in contracts greater than 12 months	$	6,708	$	6,866	$	12,820	$	12,438
Office leases	216		212		430		409
Short-term lease cost
Time charter-in contracts less than 12 months	5,019		14,419		11,326		31,558
Total lease cost	$	11,943	$	21,497	$	24,576	$	44,405

Sublease income, gross
Time charter-in contracts greater than 12 months(1)	$	6,744	$	8,344	$	13,160	$	16,670

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%.			Sublease income on time charter-in contracts is recorded in Revenues, net on the Condensed Consolidated Statements of Operations.

~~F-19~~F-21

~~The table below presents the components~~A summary of cash flow information related to the Company’s ~~lease expenses and sublease income on a gross basis earned from chartered-in contracts greater than 12 months~~leases for the ~~three and~~ six months ended June 30, 2023 and 2022 ~~and 2021:~~is as follows:


	Six Months Ended
	June 30, 2023		June 30, 2022
Cash paid for operating leases with lease terms greater than 12 months	$	14,607	$	12,847

Non-cash activities
Operating lease right-of-use assets obtained in exchange for lease liabilities	$	9,187	$	29,942

(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 StatementsA summary 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~~for operating lease liabilities, by asset type, as of June 30, ~~2022:~~2023 is as follows:

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


	Time charter-in contracts greater than 12 months		Office leases		Total Operating leases
Year:
Remainder of 2023	$	10,065	$	439	$	10,504
2024	3,745		874		4,619
2025	—		871		871
2026	—		871		871
2027	—		574		574
Thereafter	—		500		500
	13,810		4,129		17,939
Implied interest	(181)		(637)		(818)
Total operating lease liabilities	$	13,629	$	3,492	$	17,121

Note 9.10. 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 potential delays ~~that exceed~~exceeding the ~~agreed to~~allowed laytime at the ports visited ~~with the amounts~~which is 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~~resulting in a reduction ofin revenue. In a voyage charter contract, the performance obligations begin to be satisfied once the vessel begins loading the cargo. The Company determined that its voyage charter contracts consist of a single performance obligation of transporting the cargo within a specified time period. Therefore, the performance obligation is met evenly as the voyage progresses, and the revenue is recognized on a straight-line basis over the voyage days from the commencement of the loading of cargo to completion of discharge.

The voyage contracts are considered service contracts which fall under the provisions of ASC 606, Revenue Recognition, because the Company, as the shipowner, retains the 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, ornet of despatch ~~paid by~~incurred, for the ~~Company~~three and six months ended June 30, 2023 was $1.0 million and $2.6 million, respectively. The amount of revenue earned as demurrage, net of despatch incurred, 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~~F-22

The following table shows the revenues earned from time charters and voyage charters for the three and six months ended June 30, ~~2022~~2023 and ~~2021:~~2022:


		Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
(In thousands)		June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
											June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Time charters(1)	Time charters(1)	$	101,649	$	59,492	$	179,623	$	88,733	Time charters(1)	$	56,678	$	101,649	$	106,772	$	179,623
Voyage charters	Voyage charters	97,046		70,359		203,470		137,690		Voyage charters	44,728		97,046		99,832		203,470
		$	198,695	$	129,851	$	383,093	$	226,423		$	101,406	$	198,695	$	206,604	$	383,093


(1)			See Note 9. Leases, for a description of revenues earned from time charters.

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~~Costs directly related to ~~the performance of the~~a contract ~~and~~that are ~~expected to be recovered. The costs~~ incurred ~~during the period~~ prior to commencement of loading ~~the~~ cargo, primarily bunkers, are ~~deferred~~recognized as ~~they represent setup costs and recorded as a Current~~an asset and are ~~amortized~~expensed on a straight-line basis as the related performance ~~obligations are~~obligation is satisfied. As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company ~~recognized $0.9~~recorded $0.4 million and $0.5 million, respectively, of ~~deferred~~contract fulfillment costs ~~which represents bunker expenses and charter-hire expenses incurred prior to commencement of loading. These costs are recorded~~ in Other current assets onin the Condensed Consolidated Balance Sheets.

Note ~~10.~~11. Net ~~income~~Income per Common Share

~~The computation of basic net income per share is based on the weighted average number of common stock outstanding for~~For the three and six months ended June 30, 2023 and 2022, Net income is equal to Net income available to common shareholders.

For the three and ~~2021. Diluted net income per share gives effect to restricted stock awards, restricted stock units~~six months ended June 30, 2023 and ~~stock options using the treasury stock method, unless the impact is anti-dilutive. Additionally,~~2022, the Convertible Bond Debt is not considered a participating security and is therefore not included in the computation of ~~the~~ Basic net income per ~~share for~~share. Additionally, the ~~three and six months ended June 30, 2022 and 2021. The~~ Company determined that as it relates to the Convertible Bond Debt, 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 net income per share, ~~for~~unless the ~~three~~impact of such potential shares is anti-dilutive.

The following table presents Basic and ~~six months ended June 30, 2022 as their effect was dilutive.~~ Diluted net income per share for the three and six months ended June 30, ~~2022 excluded 17,661 Restricted Stock Units (“RSUs”) related to EPS performance (defined below) as their effect was anti-dilutive.~~2023 and 2022:


	Three Months Ended				Six Months Ended
(In thousands, except share and per share data)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income	$	18,026	$	94,453	$	21,228	$	147,527

Weighted Average Shares - Basic	12,734,230		12,988,200		12,892,793		12,981,202
Effect of dilutive securities:
Convertible Bond Debt	3,242,286		3,254,971		3,242,286		3,254,971
Stock awards and options	82,090		133,346		88,762		137,285
Dilutive potential common shares	3,324,376		3,388,317		3,331,048		3,392,256

Weighted Average Shares - Diluted	16,058,606		16,376,517		16,223,841		16,373,458

Basic net income per share	$	1.42	$	7.27	$	1.65	$	11.36
Diluted net income per share	$	1.21	$	5.77	$	1.48	$	9.01

F-23

The following table presents a summary of potentially dilutive securities that were not included in the computation of Diluted net income per share for the three ~~months ended June 30, 2021 does not include 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~~2023 and ~~the potential shares~~2022 because to ~~be issued upon conversion of Convertible Bond Debt as their effect was anti-dilutive.~~do so would have been anti-dilutive:

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

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~~

Three Months Ended

Six Months Ended

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Stock awards and options

94,942

17,661

55,572

17,661

Note ~~11.~~12. Stock Incentive Plans

On December 15, 2016, the Company’s shareholders approved the Eagle Bulk Shipping Inc. 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~~potential issuance under the 2016 Plan. On June 7, 2019, the ~~Company's~~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~~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~~The 2016 Plan permits the granting 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, unrestricted stock, restricted stock units (“RSUs”), performance condition awards, ~~that vested in 2022 at the fair market value equivalent to the maximum statutory tax withholding obligation~~incentive stock options, non-qualified stock options, stock appreciation rights, dividend equivalents and ~~remitted that amount in cash to the appropriate taxation authorities.~~other equity-based or equity-related awards (collectively, “Awards”).

~~On February 11, 2022, the Company granted 31,781~~A summary of restricted shares as a 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 11, 2022. The shares will vest in equal installments on January 2, 2023, January 2, 2024stock and January 2, 2025. Additionally, on March 11, 2022, the Company granted 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 $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 $1.0 million for the three and six months ended June 30, 2022, respectively, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations.

~~On March 11, 2022, the Company granted 17,661 shares of time-based RSUs to certain members of its senior management team under the 2016 Plan. The units vest in~~ ~~three~~ equal installments on January 2, 2023, January 2, 2024 and January 2, 2025. The aggregate fair value of these units is $1.2 million based on the closing share price of $65.88 on March 11, 2022. The amortization of the above grant is $0.2 million and $0.3 million for the three and six months ended June 30, 2022, respectively, which is included in General and administrative expenses in the Condensed Consolidated Statements of Operations.

~~As discussed further below, on March 11, 2022, the Company granted performance-based RSUs to certain members of its senior management team~~RSU activity under the 2016 Plan ~~which are contingent on certain performance criteria. The maximum number of performance-based RSUs that can be earned is 52,982.~~

~~17,661 target performance-based RSUs were granted based on earnings per share (“EPS performance”)~~ for ~~the performance period beginning January 1, 2022 and ending December 31, 2022 (with targets set forth during the three months ended June 30, 2022). The 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 January 2, 2024 and 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 RSUs is $1.2 million based on the closing share price of $65.88 on 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 based payment awards,~~ and therefore, the stock-based compensation expense is initially recorded based on the probable outcome that the performance condition will be 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 June 30, 2022, the Company estimated that the target (100%) will be met and recorded $0.2 million 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 six months ended June 30, 2022.

8,830 performance-based RSUs were granted based on relative total shareholder return (“TSR performance”) for the performance period beginning January 1, 2022 and ending December 31, 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 January 2, 2024 and 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 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. The TSR performance is calculated based on average daily closing stock price over a 20-trading-day period at each of the beginning and end of the performance 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 $0.7 million. The assumptions used in the model were risk-free rate of return of 1.05% based on continuously compounded yield on zero-coupon treasury rates as of March 11, 2022; expected volatility of 54.74% based on 1-year historical daily volatility of the closing share prices for the Company; a dividend yield of 12.45%; and 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 $0.1 million 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 six months ended June 30, 2022.

As of June 30, 2022 and December 31, 2021, stock awards, including RSUs, covering a total of 234,418 and 246,962 shares of the Company’s common stock, respectively, are outstanding under the 2016 Plan. The vesting terms are generally three years from the grant 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.

~~As of December 31, 2021, 47,568 vested stock options were outstanding with exercise prices ranging from $32.97 to $38.92 per share. During~~ the six months ended June 30, ~~2022, all 47,568~~2023 is as follows:


	Number of Restricted Shares and RSUs	Weighted Average Grant Date Fair Value		Aggregate Fair Value (in millions)
Unvested awards as of December 31, 2022	323,128	$	45.10
Granted	95,392	$	55.90
Vested	(117,880)	$	41.26
Forfeited	(184)	$	46.24
Unvested awards as of June 30, 2023	300,456	$	50.03	$	14.4

The fair value as of the respective vesting dates of restricted stock ~~options were exercised. In connection with the exercise, 8,077 shares of common stock were issued~~ and ~~39,491 stock options were cancelled as a settlement~~RSUs for the ~~liability relating~~six months ended June 30, 2023 was $5.9 million. The majority of restricted stock and RSUs that vested during the six months ended June 30, 2023 were net share settled. For the six months ended June 30, 2023, 30 thousand shares were withheld by the Company and $1.7 million was paid to taxing authorities for employee tax ~~withholding as well as the exercise price owed to the Company.~~obligations.

As of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, there were no vested or unvested options ~~outstanding.~~outstanding under the 2016 Plan.

Stock-based compensation expense for all stock awards, units and options included in General and administrative ~~expenses:~~expenses is as follows:

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


	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Stock-based compensation expense	$	2,155	$	1,605	$	4,010	$	3,092

~~The future~~Stock-based compensation expense related to unvested awards yet to be recognized as of June 30, 2023 totaled $9.3 million and is expected to be recognized, on a weighted average basis, over 2.2 years.

Note 13. Supplemental Cash Flow Information

Cash paid for ~~all the grants~~interest for the six months ~~ending December 31, 2022, and the years ending December 31,~~ended June 30, 2023 and ~~2024 will be $2.7 million, $2.7~~2022 totaled $11.2 million and ~~$0.8~~$7.1 million, respectively.

Cash paid/(received) from interest rate swap agreements for the six months ended June 30, 2023 and 2022 totaled $(4.6) million and $0.5 million, respectively.

F-24

~~Note 12. Cash, cash equivalents,~~A summary of non-cash investing and ~~restricted cash~~

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

(In thousands) June 30, 2022 December 31, 2021 June 30, 2021 December 31, 2020
Cash and cash equivalents $ 138,955 $ 86,147 $ 79,278 $ 69,928
Restricted cash - current * — — 4,446 18,846
Restricted cash - noncurrent * 2,575 75 75 75
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 required to be set aside by the Norwegian Bond Debt, which was repaid on October 18, 2021. Additionally, as ofsix months ended June 30, 2023 and 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.~~is as follows:


	Six Months Ended
	June 30, 2023		June 30, 2022
Accruals and accounts payable for the purchase of BWTS	$	435	$	3,010
Accruals and accounts payable for transaction costs in connection with repurchase of Common Stock	1,622		—
Accruals for dividends payable	221		1,237
Accruals and accounts payable for the purchase of vessels and vessel improvements	55		6

Note ~~13.~~14. Subsequent Events

On ~~July 28, 2022,~~August 3, 2023, the Company's Board of Directors declared a cash dividend of ~~$2.20~~$0.58 per share to be paid on or about August ~~26, 2022~~24, 2023 to shareholders of record at the close of business on August 16, ~~2022.~~2023. The aggregate amount of the dividend is

~~F-24~~

expected to be approximately ~~$30.1~~$5.6 million, which the Company anticipates will be funded from cash on hand at the time the payment is to be made.

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 six months ended June 30, ~~2022~~2023 and ~~2021.~~2022. 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, ~~2021,~~2022, which were included in our Annual Report on Form 10-K, filed with the SEC on March ~~14, 2022~~10, 2023 (the ~~“Form 10-K”~~“Annual Report”). For further discussion regarding our results of operations for the three and six months ended June 30, ~~2021~~2022 as compared to the three and six months ended June 30, ~~2020~~2021, 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 six months ended June 30, ~~2021.~~2022. 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.”

This discussion may also include statistical data regarding the global drybulk industry, including fleet size, fleet age and order book. We generated some of this data internally, and other data was 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.

All dollar amounts are stated in United States (“U.S.”) dollars unless otherwise noted. Certain numerical information in this report is presented on a rounded basis using actual amounts. Minor differences in totals or percentages may exist due to rounding.

Business Overview

Eagle Bulk Shipping Inc. (“Eagle” or the “Company”) is a ~~U.S. based~~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~~the Company focuses exclusively on the versatile ~~mid-size~~midsize 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,~~(strategic, commercial, operational, technical, and ~~administrative services,~~administrative) 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 June 30, ~~2022,~~2023, we owned and operated a modern fleet of 53 Supramax/Ultramax dry bulk ~~vessels. We chartered-in five Ultramax~~ vessels (one of 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 53 vessels,~~Sankaty Eagle, is classified as held for sale), with an aggregate carrying capacity of ~~3.19~~3.22 million dwt and an average age of ~~9.8 years as~~10.1 years.

In addition to its owned fleet, the Company charters-in third-party vessels on both a short-term and long-term basis. As of June 30, ~~2022.~~

2023, the Company had five Ultramax vessels on a long-term charter-in basis, with remaining lease terms ranging from two months to ten months.

We carry out the commercial, technical and strategic management of our fleet through our ~~indirectly~~ wholly-owned subsidiary, Eagle Bulk Management LLC, a Marshall Islands limited liability company which maintains its principal executive offices in Stamford, Connecticut. ~~We own each of our vessels through a separate wholly-owned Marshall Islands limited liability company.~~

Corporate Information

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

Business Strategy

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

~~(1)Concentration in one~~most versatile drybulk 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.~~segment

We ~~continuously evaluate potential transactions that we~~focus on owning and operating vessels within the midsize Supramax/Ultramax segment. We consider this vessel segment to be the most versatile amongst the various drybulk asset classes due to the optimal size and specifications of Supramax/Ultramax ships, which allows us to carry the most diversified cargo mix when compared to other sizes of drybulk carriers. With a size ranging from 50,000 to 65,000 dwt and a length of approximately 200 meters, Supramax/Ultramax vessels are able to accommodate large cargo quantities and call on the majority of ports around the globe. In addition, these vessels are equipped with onboard cranes and grabs, giving them the ability to load and discharge cargoes without the need for shore-based port equipment/infrastructure. We believe ~~will be accretive to~~the versatility and flexibility of Supramax/Ultramax vessels provide for improved risk-adjusted returns throughout the cycles.

•Employ an active management strategy for fleet trading

We employ an active management strategy for fleet employment with the objective of optimizing revenue performance and maximizing earnings ~~enhance shareholder value or are~~on a risk-managed basis. Through the execution of various commercial strategies employed across our global trading desks in the ~~best interests of~~United States, Europe and Asia, the Company has been able to achieve optimal TCE (as defined herein) results and outperform the relevant market index on a consistent basis.

•Execute on fleet renewal and growth

Since 2016, and through the date of this Quarterly Report, we have executed on a comprehensive fleet renewal program totaling 58 vessel transactions. We have acquired 33 modern vessels and sold 25 of our oldest and least-efficient vessels. We believe these transactions have vastly improved our fleet makeup, enabling us to generate incremental revenue on a per ship basis; we have been able to maintain our fleet age profile at an optimized level, increase our cargo-carrying capacity per ship and improve our fleet emissions profile (as measured by fuel consumption per dwt).

•Perform technical management in-house

We perform all technical management services relating to vessel maintenance, vessel repairs and crewing.

•Implement a prudent approach to balance sheet management

We believe the long-term success of our Company is contingent on maintaining a prudent approach to balance sheet management, including ~~without limitation, business combinations,~~working capital optimization, diversifying capital sources, lowering cost of capital, limiting interest rate exposure and optimizing the ~~acquisition of vessels or related businesses, repayment or refinancing of existing~~ debt profile.

•Emphasize Environmental, Social and Governance (“ESG”) factors

We published our first comprehensive ESG Sustainability Report in 2020. The document was prepared in accordance with the ~~issuance of new securities, share repurchases or other transactions.~~Marine Transportation Framework, established by the Sustainability Accounting Standards Board. Our reports are available for download on our company website.

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 second quarter of 2022 and averaged $28,901/day, up 13% as compared to the 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, 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 at $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~~As a result of the ~~invasion of~~conflict between Russia and Ukraine, ~~by Russia, economic sanctions were imposed by~~ the ~~United States, the European Union, the~~U.S., EU and United Kingdom, ~~and a number of~~together with numerous other countries, have imposed significant sanctions on ~~Russian financial institutions, businesses~~persons and ~~individuals,~~entities associated with Russia and Belarus, as well as comprehensive sanctions on certain ~~regions~~areas within the Donbas region of ~~Ukraine.~~Ukraine, and such sanctions apply to entities owned or controlled by such designated persons or entities. This conflict has become a multi-year war and humanitarian crisis. While it is difficult to estimate the impact of this conflict and current or future sanctions on the Company’s business and financial position, these events and related sanctions could adversely impact the Company’s operations. In the near term, we have seen, and expect to continue to see, increased volatility in both Russian and Ukrainian exports in the Black Sea region, as well as Russian exports in the Baltic and Far East regions due to these geopolitical events. ~~The Black Sea region is a major export~~In addition, the volatility of market prices 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 Russiafuel 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 sanctionsincreased as a result of ~~Russia’s invasion of Ukraine as well as the~~related supply disruptions from this conflict. Continued volatility in fuel prices could have an unpredictable impact on ~~retaining~~the Company’s operations and ~~sourcing our crew, see Part I, Item 1A, “Risk Factors” of our Form 10-K.~~

liquidity.

~~Fleet Management~~

The ~~management~~conflict between Russia and Ukraine may also impact our ability to continue to source and retain crew from these countries. In response to this risk, we have established and may expand relationships with manning agencies outside of ~~our fleet includes the following functions:~~

•~~Strategic management~~.Russia and Ukraine, including in Asia. We ~~locate~~have incurred and ~~obtain financing~~expect to continue to incur increased operating expenses related to Russian and ~~insurance for the purchase~~Ukrainian crew procurement, travel costs to repatriate Russian and ~~sale of vessels.~~

•~~Commercial management. We obtain employment for~~Ukrainian crew members on board our vessels and ~~manage~~to expatriate crew members sourced from other regions. In response to this risk, the Company recruited one new third-party manning agency during 2022 and another during 2023 in order to diversify our ~~relationships with charterers.~~crew nationality exposure and increase our sourcing from the Philippines.

•~~Technical management. We have established an in-house technical management function~~For more information regarding the risks relating to ~~perform day-to-day operations~~the conflict between Russia and ~~maintenance~~Ukraine, including economic sanctions levied as a result of it, see Part I, Item 1A, “Risk Factors” of the Annual Report. The conflict between Russia and Ukraine may impact our ~~vessels.~~ability to retain and source crew, and in turn, could materially and adversely affect our operating results.

~~Commercial and Strategic Management~~Operations

We carry out the commercial, technical 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~~maintain offices in ~~Singapore~~Copenhagen (Denmark) and ~~Copenhagen, Denmark,~~Singapore.

The two central aspects to the operation of our fleet include:

•Commercial operations, which involve chartering and operating a vessel; and

•Technical operations, which involve maintaining, crewing and repairing a vessel.

Each of the Company’s vessels serve the same type of customer, have similar operation and maintenance requirements, operate in the same regulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportable segment which is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership and operation of drybulk vessels.

Commercial Management

We perform the commercial management of our fleet, including obtaining employment for our vessels and maintaining relationships with the charterers of our vessels. We have three offices across the globe located in the U.S., Europe and Asia, which allows for 24-hour market coverage. We believe that due to our management team’s experience in operating drybulk vessels, we have access to a broad range of charterers and can employ our fleet efficiently in diverse market conditions allowing us to achieve high utilization rates.

Being an active owner-operator means effectively seeking to operate our own vessels when possible, as compared with time chartering them to other operators, all with a view toward achieving higher-than-market net charter hire income. In doing so, we believe we can take advantage of rapidly changing market conditions and obtain better operational efficiencies from our fleet.

Technical Management

We have established in-house technical management capabilities, through which we provide ~~round the clock~~technical management services to all vessels in our ~~owned and chartered-in~~ fleet. ~~We currently have 93 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 operation of the vessel ~~operations,~~and machinery; performing general ~~vessel maintenance,~~maintenance; ensuring regulatory and classification society ~~compliance,~~compliance; supervising the ~~maintenance and~~ general efficiency of ~~vessels,~~the vessel; arranging ~~our~~the hire of qualified officers and ~~crew,~~crew; planning, arranging and supervising drydocking and ~~repairs,~~repairs; purchasing supplies, spare parts, lubes and new ~~equipment for vessels,~~equipment; and appointing supervisors and technical ~~consultants, and providing technical support.~~consultants.

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~~In common with ~~industry practice,~~other shipowners, 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 and Estimates

The discussion and analysis of our financial condition and results of operations is based upon our unaudited interim ~~unaudited~~ condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. ~~GAAP and the rules and regulations of the SEC, which apply to interim financial statements.~~GAAP” or “GAAP”). The preparation of ~~those~~the financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues ~~expenses~~ and ~~warrants~~expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Significant estimates include fair values of long-lived assets (primarily vessels and operating lease right-of-use assets), impairment of long-lived assets (primarily vessels and operating lease right-of-use assets), stock-based compensation and financial instruments (primarily derivative instruments and Convertible Bond Debt (as defined herein)), residual values of vessels, useful lives of vessels and estimated losses on accounts receivable. Actual results ~~may~~could differ from ~~these estimates under different assumptions and conditions.~~those estimates.

Critical accounting policies are those that ~~reflect significant judgments~~are most important to the portrayal of ~~uncertainties and potentially result in materially different results under different assumptions and conditions. As~~ the ~~discussion and analysis of our~~Company’s financial condition and results of operations ~~are based upon our~~and require subjective or complex judgments. Our unaudited interim ~~unaudited~~ condensed consolidated financial statements ~~they~~ do not include all of the information on critical accounting policies normally included in consolidated financial ~~statements.~~statements prepared in accordance with U.S. GAAP. Accordingly, a ~~detailed~~ description of ~~these~~our critical accounting policies, which can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Annual Report, should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in the Company’s ~~Annual Report~~Quarterly Reports on Form ~~10-K for the year ended December 31, 2021, filed with the SEC on March 14, 2022.~~10-Q. There have been no material changes from the “Critical Accounting Policies” ~~previously~~ disclosed in ~~our~~the Annual Report, ~~on Form 10-K~~except as follows.

Effective January 1, 2023, we increased our estimated vessel scrap value from $300 per lwt to $400 per lwt. This change was driven by increases in 15-year average scrap price trends sourced from a third-party data provider. The change in the estimated scrap value will result in a decrease in depreciation expense over the remaining life of our vessel assets. We expect depreciation to decrease by approximately $4.0 million for the year ended December 31, ~~2021.~~

~~Use of Estimates~~

~~The preparation~~2023 solely as a result of the ~~condensed consolidated financial statements~~prospective change 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 operating lease right-of-use assets, and the fair value of derivatives. Actual results could differ from those estimates.

this estimate.

Results of Operations for the three and six months ended June 30, 2023 compared to the three and six months ended June 30, 2022:

Fleet ~~Data~~Utilization

We ~~believe that~~consider the following fleet utilization measures ~~for~~important to understanding and analyzing ~~future trends in~~ our results of ~~operations consist of the following:~~operations:

Three Months Ended Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Ownership Days 4,823 4,511 9,593 8,710
Chartered-in Days 1,142 497 2,102 1,155
Available Days 5,716 4,824 11,113 9,472
Operating Days 5,707 4,778 11,088 9,400
Fleet Utilization (%) 99.8 % 99.0 % 99.8 % 99.2 %


	Three Months Ended		Six Months Ended
	June 30, 2023	June 30, 2022	June 30, 2023	June 30, 2022
Ownership Days	4,805	4,823	9,616	9,593
Owned Available Days	4,502	4,574	9,083	9,011

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

TCE (Non-GAAP Measure)

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 available or 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~~due to 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~~time charter ~~hire income. Net charter hire income comprises revenue from~~equivalent (“TCE”), which is a non-GAAP measure.

TCE is commonly used in the shipping industry primarily to compare daily earnings generated by vessels ~~operating~~ on time charters ~~and~~with daily earnings generated by vessels on voyage ~~revenue~~charters because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts. The Company defines TCE as revenues, net less voyage expenses ~~from vessels operating on voyage charters in the spot market~~ and charter hire ~~expenses. Net charter hire income serves as a~~expenses, adjusted for realized gains/(losses) on FFAs and bunker swaps, the subtotal of which is divided by the number of owned available days. TCE provides additional meaningful information in conjunction with Revenues, net, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their performance. The Company’s TCE should not be considered an alternative to net income/(loss), operating income/(loss), cash flows provided by/(used in) operating activities or any other measure of ~~analyzing fluctuations between~~ financial ~~periods and as a method~~performance or liquidity presented in accordance with U.S. GAAP. The Company’s calculation of ~~equating revenue generated from a voyage charter~~TCE may not be comparable to ~~time charter revenue.~~

those reported by other companies.

The following table represents ~~Net charter hire income (a~~the reconciliation of TCE, a non-GAAP ~~measure)~~measure, from Revenues, net as recorded in the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, ~~2022~~2023 and ~~2021.~~2022.

For the Three Months Ended For the Six Months Ended
(In thousands) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Revenues, net $ 198,695 $ 129,851 $ 383,093 $ 226,423
Less: Voyage expenses 36,290 24,523 79,917 51,138
Less: Charter hire expenses 21,285 6,170 43,996 14,650
Net charter hire income $ 141,120 $ 99,158 $ 259,180 $ 160,635
% Net charter hire income from
Time charters 66 % 55 % 60 % 51 %
Voyage charters 34 % 45 % 40 % 49 %


(in thousands, except for Owned available days and TCE data)	Three Months Ended				Six Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Revenues, net	$	101,406	$	198,695	$	206,604	$	383,093
Less:
Voyage expenses	(25,471)		(36,290)		(58,946)		(79,917)
Charter hire expenses	(11,726)		(21,285)		(24,146)		(43,996)
Realized gain/(loss) on FFAs and bunker swaps, net	770		(2,952)		637		596
	$	64,979	$	138,168	$	124,149	$	259,776

Owned available days	4,502		4,574		9,083		9,011
TCE	$	14,434	$	30,207	$	13,669	$	28,829

Net income

For the three months ended June 30, 2023, the Company reported net income of $18.0 million, or basic and diluted net income per share of $1.42 and $1.21, respectively. For the comparable quarter of 2022, the Company reported net income of $94.5 million, or basic and diluted net income per share of $7.27 ~~per share~~ and $5.77, ~~per share,~~ respectively. In

For the ~~comparable quarter of 2021,~~six months ended June 30, 2023, the Company reported net income of ~~$9.2~~$21.2 million, or basic and diluted net income ~~of $0.76~~ per share of $1.65 and ~~$0.74 per share,~~$1.48, respectively.

For the six months ended June 30, 2022, the Company reported net income of $147.5 million, or basic and diluted net income per share of $11.36 ~~per share~~ and $9.01, ~~per share, respectively. In the 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~~charters and our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels operate and the net charter hire that our vessels earn under charters, which, in turn, are affected by a number of factors, including:

•the duration of our charters;

•our decisions relating to vessel acquisitions and disposals;

•the amount of time that we spend positioning our vessels;

•the amount of time that our vessels spend in drydock undergoing repairs;

•maintenance and ~~voyage charter revenues~~upgrade work;

•the age, condition and specifications of our vessels;

•levels of supply and demand in the drybulk shipping industry; and

•other factors affecting spot freight rates for drybulk carriers.

Revenues, net for the three months ended June 30, ~~2022~~2023 were $101.4 million compared to $198.7 million ~~compared with $129.9 million recorded in~~for the comparable quarter ~~in 2021. The increase in revenues was~~of 2022. Revenues, net decreased $97.3 million primarily ~~attributable to higher charter rates as a result of the market recovery with increase in demand for drybulk products and an increase in available days~~ due to ~~an increase in owned days and chartered-in days.~~

~~Net~~lower rates on both time and voyage ~~charter revenues~~charters, driven by a decline in the drybulk market.

Revenues, net for the six months ended June 30, ~~2022 and 2021~~2023 were $206.6 million compared to $383.1 million ~~and $226.4~~for the six months ended June 30, 2022. Revenues, net decreased $176.5 million ~~respectively. The increase in revenues was~~ primarily due to ~~higher charter~~lower rates on both time and ~~an increase~~voyage charters, driven by a decline in ~~available days due to an increase in owned days and chartered-in days.~~the drybulk market.

Voyage expenses

To the extent that we employ our vessels on voyage charters, we ~~will~~ incur expenses that include but are not limited to 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%~~5.00% of the total daily charter hire rate of each charter to unaffiliated ship brokers and in-house 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~~We record such broker commissions as voyage ~~charters because these expenses are for the vessel owner's account.~~ expenses.

Voyage expenses for the three months ended June 30, ~~2022 and 2021~~2023 were $25.5 million compared to $36.3 million ~~and $24.5~~for the comparable quarter of 2022. Voyage expenses decreased $10.8 million ~~respectively. The increase in voyage expenses was~~ primarily due to ~~an increase~~a $7.4 million reduction in bunker consumption ~~expense as~~expenses due to a decrease in bunker ~~fuel~~ prices, ~~increased in the second quarter, an increase~~a $2.3 million reduction in port expenses due to a decrease in voyage charters and ~~an increase~~a $1.1 million decrease in broker ~~commission expense.~~commissions due to lower revenues.

Voyage expenses for the six months ended June 30, ~~2022 and 2021~~2023 were ~~$79.9 million and $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.~~

~~Vessel operating expenses~~

~~Vessel operating expenses for the three months ended June 30, 2022 were $27.2~~$58.9 million compared to ~~$23.7~~$79.9 million in the comparable quarter in 2021. The increase in vessel operating expenses was primarily attributable to higher owned days as well as an increase in crew expenses due to an increase in crewing costs, crew changes and expenses related to COVID-19 and the war in Ukraine. The Company also continues to face general inflationary pressures particularly impacting the cost of lubes, stores and spares. The ownership days for the three months ended June 30, 2022 and 2021 were 4,823 and 4,511, respectively.

~~Vessel operating expenses~~ for the six months ended June 30, ~~2022 and 2021 were $55.1~~2022. Voyage expenses decreased $21.0 million ~~and $45.2~~primarily due to a $10.5 million ~~respectively. The increase~~reduction in ~~vessel operating expenses was primarily attributable to higher owned days as well as an increase in crew~~bunker consumption expenses due to ~~an increase~~a decrease in ~~crewing costs, crew changes~~bunker prices, a $8.3 million reduction in port expenses due to a decrease in voyage charters and ~~expenses related~~a $2.2 million decrease in broker commissions due to COVID-19 and the war in Ukraine. The Company also continues to face general inflationary pressures particularly impacting the cost of lubes, stores and spares. The ownership days for the six months ended June 30, 2022 and 2021 were 9,593 and 8,710, respectively.lower revenues.

Vessel operating expenses

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, discretionary spending associated with hold and hull upgrades and other miscellaneous expenses.

~~Other factors beyond our control, some of which may affect the shipping industry in general, may cause the~~Vessel 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 June 30, ~~2022~~2023 were ~~$21.3~~$31.0 million compared to ~~$6.2~~$27.2 million in the comparable quarter in 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. The total chartered-in days for the three months ended June 30, 2022 were 1,142 compared to 497 for the comparable quarter of 2022. Vessel operating expenses increased $3.8 million due to a $3.8 million increase in ~~the prior year. Between 2017~~costs primarily driven by certain repairs and ~~2021, the Company entered into~~discretionary spending on upgrades to six vessels, including newly acquired ships and a ~~series~~$0.9 million increase in crewing costs driven by higher compensation and increased crew changes as a result of ~~agreements to charter five Ultramax vessels on~~crewing manager transitions, partially offset by a long term basis. The minimum chartered-in periods ranged between one and four years with an option to extend the duration between three and 24 months. All five vessels were chartered-in as of June 30, 2022.$0.5 million decrease in lube costs driven by lower purchase volume.

~~The charter hire~~Vessel operating expenses for the six months ended June 30, ~~2022 and 2021~~2023 were ~~$44.0~~$62.3 million ~~and $14.6~~compared to $55.1 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 six months ended June 30, ~~2022~~2022. Vessel operating expenses increased $7.1 million as a result of higher ownership days and ~~2021 were 2,102 and 1,155, respectively.~~

~~Depreciation and amortization~~

~~For the three months ended June 30, 2022 and 2021, total depreciation and amortization expense was $15.3~~due to a $4.5 million and $13.1 million, respectively. Total depreciation and amortization expense for the three months ended June 30, 2022 includes $11.9 million of vessel and other fixed assets depreciation and $3.4 million relating to the amortization of deferred drydocking costs. Comparable amounts for the three months ended June 30, 2021 were $11.0 million of vessel and other fixed assets depreciation and $2.1 million of amortization of deferred drydocking costs. The increase in ~~depreciation expense is due~~costs driven by certain repairs and discretionary spending on upgrades to ~~the acquisition~~six vessels, including newly acquired ships and a $3.3 million increase in crewing costs driven by higher compensation and increased crew changes as a result of ~~nine vessels in 2021,~~crewing manager transitions, partially offset by ~~the sale of one vessel~~a $0.5 million decrease in ~~the third quarter of 2021. The increase in amortization of deferred drydock~~lube costs ~~is related to completing fourteen drydocks since the second quarter of 2021.~~

For the six months ended June 30, 2022 and 2021, total depreciation and amortization expense was $29.8 million and $25.6 million, respectively. Total depreciation and amortization expense for the six months ended June 30, 2022 includes $23.6 million of vessel and other fixed asset depreciation and $6.3 million relating to the amortization of deferred drydocking costs. Comparable amounts for the six months ended June 30, 2021 were $21.5 million of vessel and other fixed asset depreciation and $4.1 million of amortization of deferred drydocking costs. The increase in depreciation expense is due to the acquisition of nine vessels in 2021, offsetdriven by ~~the sale of one vessel in the third quarter of 2021. The increase in amortization of deferred drydock costs is related to completing fourteen drydocks since the second quarter of 2021.~~lower purchase volume.

Charter hire expenses

Charter hire expenses for the three months ended June 30, 2023 were $11.7 million compared to $21.3 million for the comparable quarter of 2022. Charter hire expenses decreased $9.6 million primarily due to decreases in both charter hire rates and chartered-in days related to a decline in the drybulk market.

Charter hire expenses for the six months ended June 30, 2023 were $24.1 million compared to $44.0 million for the six months ended June 30, 2022. Charter hire expenses decreased $19.9 million primarily due to decreases in both charter hire rates and chartered-in days related to a decline in the drybulk market.

Chartered-in days, which is the aggregate number of days in a period during which the Company chartered-in vessels, for the three months ended June 30, 2023 and 2022 were 782 and 1,142 days, respectively. Chartered-in days for the six months ended June 30, 2023 and 2022 were 1,726 and 2,102, respectively.

Depreciation and amortization

We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard to the original owner. ~~Furthermore, we~~We estimate the ~~residual values of our vessels~~scrap rate to be ~~$300~~$400 per ~~lightweight ton, which we believe~~lwt to compute each vessel’s residual value.

We amortize drydocking costs on a straight-line basis over the period through the date the next drydocking is ~~common in the drybulk shipping industry. Drydocking relates~~required 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 yearsbecome due, generally 30 months for vessels ~~older~~that are 15 years old or more and 60 months for vessels that are less than 15 years old.

Depreciation and ~~every five years~~amortization for the three months ended June 30, 2023 was $14.8 million compared to $15.3 million for the comparable quarter of 2022. Depreciation and amortization decreased $0.4 million primarily due to a $1.0 million decrease in depreciation due to a change in our estimated vessel scrap value from $300 per lwt to $400 per lwt, effective January 1, 2023, partially offset by a $0.4 million increase in depreciation from the net impact of vessels ~~younger than 15 years, accordingly, these expenses are deferred~~acquired and ~~amortized over these~~sold during the respective periods.

Depreciation and amortization for the six months ended June 30, 2023 was $29.6 million compared to $29.8 million for the six months ended June 30, 2022. Depreciation and amortization decreased $0.3 million primarily due to a $2.0 million decrease in depreciation due to a change in our estimated vessel scrap value from $300 per lwt to $400 per lwt, effective January 1, 2023, partially offset by a $0.7 million increase in depreciation from the net impact of vessels acquired and sold during the respective periods and a $0.7 million increase in deferred drydocking cost amortization due to higher drydocking expenditures and a $0.2 million increase in depreciation driven by an increase in installed vessel improvements.

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’~~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 June 30, ~~2022 and 2021~~2023 were $11.3 million compared to $9.9 million ~~and $7.9 million, respectively. General and administrative expenses include~~for the comparable quarter of 2022. Excluding stock-based compensation expense of ~~$1.6~~$2.2 million and ~~$0.6~~$1.6 million for the three months ended June 30, 2023 and 2022, ~~and 2021, respectively. The increase in~~respectively, general and administrative expenses ~~was mainly attributable~~for the three months ended June 30, 2023 were $9.1 million compared to an$8.3 million for the comparable quarter of 2022. General and administrative expenses increased $1.4 million primarily due to a $0.9 million increase in ~~consulting expenses, compensation~~employee-related costs and ~~benefits, and~~a $0.6 million increase in stock-based compensation expense.

General and administrative expenses for the six months ended June 30, ~~2022 and 2021~~2023 were ~~$19.9~~$22.2 million ~~and $15.6 million, respectively. These general and administrative expenses include stock-based compensation of $3.1 million and $1.5~~compared to $19.9 million for the six months ended June 30, 2022. Excluding stock-based compensation expense of $4.0 million and $3.1 million for the six months ended June 30, 2023 and 2022, ~~and 2021, respectively. The increase in~~respectively, general and administrative expenses ~~was~~for the six months ended June 30, 2023 were $18.2 million compared to $16.9 million for the six months ended June 30, 2022. General and administrative expenses increased $2.3 million primarily ~~attributable~~due to ana $0.9 million increase in ~~consulting expenses, compensation and benefits, and~~ stock-based compensation ~~expense.~~expense, a $0.9 million increase in employee-related costs and other small increases across professional fees, corporate travel and office expenses.

Other operating expense

Other operating expense for the three months ended June 30, 2023 and 2022 ~~and 2021~~ was ~~$0.04~~$0.1 million and ~~$0.6~~less than $0.1 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 each of the six months ended June 30, ~~2022~~2023 and ~~2021~~2022 was $0.2 ~~million~~million.

Gain on sale of vessels

For the three months ended June 30, 2023, the Company recorded a gain on the sale of the vessels Montauk Eagle and ~~$1.5 million, respectively.~~Newport Eagle of $11.6 million.

For the six months ended June 30, 2023, the Company recorded a gain on the sale of the vessels Jaeger, Montauk Eagle and Newport Eagle of $14.9 million.

Interest expense

~~Our interest~~Interest expense for the three months ended June 30, 2023 and 2022 was $4.4 million and ~~2021 was~~ $4.3 million, ~~and $8.8~~respectively. Interest expense increased $0.1 million ~~respectively. The decrease in interest expense is primarily~~ due to ~~a decrease in outstanding debt and lower~~higher interest rates ~~due to~~on amounts outstanding under the ~~refinancing~~Global Ultraco Debt Facility, partially offset by the impact of ~~the Company's debt in the fourth quarter of 2021.~~interest rate hedging instruments.

Interest expense for the six months ended June 30, 2023 and 2022 was $8.3 million and ~~2021 was~~ $8.8 million, ~~and $17.1~~respectively. Interest expense decreased $0.5 million ~~respectively. The decrease in interest expense was primarily~~ due to ~~a decrease in~~lower average outstanding ~~debt~~principal balances driven by principal repayments and ~~lower~~the impact of interest rate hedging instruments, partially offset by the impact of higher interest rates ~~due to~~on amounts outstanding under the ~~refinancing of the Company's debt in the fourth quarter of 2021.~~

Global Ultraco Debt Facility.

The Company entered into certain interest rate ~~swaps~~swap agreements in October 2021 to fix the interest rate exposure on then-outstanding term loans under the Global Ultraco Debt Facility. As of June 30, 2023, $212.9 million of the $287.9 million of aggregate principal amount of term loans outstanding under the Global Ultraco Debt Facility ~~term loan. As a result of~~are hedged through these swaps, which average 8766 basis points ~~the Company’s interest rate exposure is fully fixed insulating~~and which largely insulate the Company from the effect of a rising interest rate environment.

Interest income

~~Amortization of debt issuance costs is included in interest expense. These financing costs relate to costs associated with our various outstanding debt facilities. For~~Interest income for the three months ended June 30, 2023 and 2022 ~~and 2021, the amortization of debt issuance costs~~ was ~~$0.5~~$1.8 million and ~~$1.8~~$0.2 million, respectively. ~~For~~Interest income increased primarily due to higher interest rates on the Company’s cash balances.

Interest income for the six months ended June 30, 2023 and 2022 ~~and 2021, the amortization of debt issuance costs~~ was ~~$1.1~~$3.7 million and ~~$3.5~~$0.2 million, respectively. ~~The~~Interest income increased primarily due to higher interest ~~expense for~~rates on the three and six months ended June 30, 2021 includes $1.1 million and $2.1 million, respectively, of interest expense representing the amortization of the equity component of the Convertible Bond Debt. The Company adopted ASU 2020-06 as of January 1, 2022 under the modified retrospective approach. The Convertible Bond Debt will no longer require bifurcation and separate accounting of the equity component. Refer to Note 2, Recent Accounting Pronouncements, to the condensed consolidated financial statements for further information.

Company’s cash balances.

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

Realized and unrealized gain on derivative instruments, net for the three months ended June 30, ~~2022~~2023 was ~~$9.9~~$2.8 million compared to a$9.9 million for the comparable quarter of 2022. The realized and unrealized ~~loss~~gain on derivative instruments, net ~~of $35.9~~decreased $7.1 million ~~for the three months ended June 30, 2021. The $9.9 million gain is primarily related~~due to ~~$7.6 million in gains earned on our freight forward agreements~~market movements as ~~a result of the decrease in charter hire rates during the second quarter~~well as lower FFA and ~~$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 our freight forward agreements due to the sharp increase in charter hire rates during the second quarter of 2021, and $1.3 million in bunker swap gains.activity.

Realized and unrealized gain on derivative instruments, net for the six months ended June 30, ~~2022~~2023 was ~~$2.0~~$2.4 million compared to ~~a realized and unrealized loss on derivative instruments, net of $36.6~~$2.0 million for the six months ended June 30, ~~2021.~~2022. The ~~$2.0~~realized and unrealized gain on derivative instruments, net increased $0.4 million ~~gain is primarily attributable~~due to ~~$6.9 million in~~market movements as well as lower FFA and 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.activity. Refer to Note 5,5. Derivative Instruments, to the condensed consolidated financial statements for further information.

Effects of Inflation

The Company believes that its business benefits during periods of elevated inflation and positive demand growth, as higher charter rates and net revenues more than offset increases in costs relating to vessel operating expenses, drydocking, and general and ~~administrative.~~administrative expenses.

Liquidity and Capital Resources

Six Months Ended
(In thousands) June 30, 2022 June 30, 2021
Net cash provided by operating activities $ 140,214 $ 30,585
Net cash used in investing activities (5,543) (86,503)
Net cash (used in)/provided by financing activities (79,363) 50,868
Net increase/(decrease) in cash, cash equivalents and restricted cash 55,308 (5,050)
Cash, cash equivalents and restricted cash at beginning of period 86,222 88,849
Cash, cash equivalents and restricted cash at end of period $ 141,530 $ 83,799

Net cash provided by operating activities during the six months ended June 30, 2022 and 2021 was $140.2 million and $30.6 million, respectively. The increase in cash flows provided by operating activities resulted primarily from the increase in revenues due to higher charter hire rates.

Net cash used in investing activities during the six months ended June 30, 2022 and 2021 was $5.5 million and $86.5 million, respectively. During the six months ended June 30, 2022, the Company paid $4.8 million for the purchase of ballast water treatment systems on our fleet. Additionally, the Company paid $0.5 million for vessel improvements and $0.2 million for 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 of $50.9 million for the six months ended June 30, 2021. During the six months ended June 30, 2022, the Company repaid $24.9 million of the Global Ultraco Debt Facility. The Company also paid $52.8 million in dividends and $1.9 million to settle net share equity awards.

Our principal sources of funds ~~are~~include operating cash flows ~~long-term bank borrowings~~ and borrowings under ~~our~~long-term debt and revolving credit ~~facility.~~facilities. Our principal ~~use~~uses of funds isinclude (i) capital expenditures to establish and grow our fleet, maintain the quality and efficiency of our vessels and comply with international shipping standards and environmental laws and regulations, ~~fund~~(ii) funding working capital requirements and ~~repay~~(iii) making principal and interest ~~and principal~~payments on our ~~outstanding loan facilities.~~debt.

~~Summary~~Our ability to generate sufficient cash depends on many factors, some of ~~Liquidity and Capital Resources~~

Aswhich are outside of ~~June 30, 2022,~~our control. For additional discussion regarding risks that may negatively impact our cash and cash equivalents including restricted cash was $141.5 million, compared to $86.2 million at December 31, 2021. The Company had restricted cash of $2.6 million and $0.1 million as of June 30, 2022 and December 31, 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 June 30, 2022, the Company’s debt consisted of the Global Ultraco Debt Facility of $262.7 million, net of $7.6 million of debt issuance costs, and the Convertible Bond Debt of $114.1 million, net of $0.9 million of debt discount and issuance costs.flows, see “Item 1A. Risk Factors.”

We believe that our current financial resources, ~~improved charter hire rates for~~together with the ~~balance of~~undrawn revolving facility available under the ~~year~~Global Ultraco Debt Facility and cash generated from operations, will be sufficient to meet our ongoing business needs and other obligations over the next twelve ~~months. However,~~months and for the foreseeable future thereafter.

Summary of Liquidity and Capital Resources

As of June 30, 2023, our ~~ability~~cash and cash equivalents including noncurrent restricted cash was $118.3 million compared to ~~generate sufficient~~$189.8 million as of December 31, 2022.

The following table presents summarized cash ~~depends on many factors beyond~~flow information for the six months ended June 30, 2023 and 2022:


	Six Months Ended
	June 30, 2023		June 30, 2022
Net cash provided by operating activities	$	32,158	$	140,214
Net cash used in investing activities	(42,290)		(5,543)
Net cash used in financing activities	(61,344)		(79,363)
Net (decrease)/increase in cash, cash equivalents and restricted cash	(71,476)		55,308
Cash, cash equivalents and restricted cash at beginning of period	189,754		86,222
Cash, cash equivalents and restricted cash at end of period	$	118,278	$	141,530

Net cash provided by operating activities for the six months ended June 30, 2023 was $32.2 million, compared to $140.2 million for the six months ended June 30, 2022. The decrease is primarily due to a decrease in net income driven by lower freight rates, partially offset by changes in operating assets and liabilities primarily driven by decreases in accounts receivable and inventories for the six months ended June 30, 2023 compared to increases for the comparable period in 2022.

Net cash used in investing activities for the six months ended June 30, 2023 was $42.3 million, compared to $5.5 million for the six months ended June 30, 2022. During the six months ended June 30, 2023, the Company (i) paid $81.7 million to purchase three vessels and other vessel improvements and (ii) paid $1.4 million to purchase BWTS. These uses of cash were partially offset by $40.7 million in net proceeds from the sale of three vessels. During the six months ended June 30, 2022, the Company (i) paid $4.8 million to purchase BWTS, (ii) paid $0.5 million to purchase vessel improvements and (iii) paid $0.2 million to purchase other fixed assets.

Net cash used in financing activities for the six months ended June 30, 2023 was $61.3 million, compared to $79.4 million for the six months ended June 30, 2022. During the six months ended June 30, 2023, the Company (i) paid $221.2 million to repurchase Common Stock, inclusive of fees, (ii) repaid $24.9 million of term loan under the Global Ultraco Debt Facility, (iii) paid $10.0 million in dividends and (iv) paid $1.7 million for taxes related to net share settlement of equity awards. These uses of cash were partially offset by (i) $123.4 million of proceeds, net of debt issuance costs, from the Revolving Facility under the Global Ultraco Debt Facility and (ii) $73.1 million of proceeds, net of debt issuance costs, from the Term Facility under the Global Ultraco Debt Facility. During the six months ended June 30, 2022, the Company (i) paid $52.8 million in dividends, (ii) repaid $24.9 million of term loan under the Global Ultraco Debt Facility and (iii) paid $1.9 million for taxes related to net share settlement of equity awards. As it relates to amounts paid for taxes related to net share settlement of equity awards, the Company withholds a number of shares earned by employees with a value equal to amounts paid.

A summary of the Company’s debt as of June 30, 2023 and December 31, 2022 is as follows:


	June 30, 2023				December 31, 2022
	Principal Amount Outstanding		Carrying Value		Principal Amount Outstanding		Carrying Value
Convertible Bond Debt	$	104,119	$	103,693	$	104,119	$	103,499
Global Ultraco Debt Facility - Term Facility (1)	287,850		281,577		237,750		230,983
Global Ultraco Debt Facility - Revolving Facility (2)	125,000		121,841		—		—
	$	516,969	$	507,111	$	341,869	$	334,482


(1)			$49.8 million of principal amount outstanding under the Global Ultraco Debt Facility is classified as current as of June 30, 2023 and December 31, 2022.
(2)			As of June 30, 2023 and December 31, 2022, the undrawn revolving facility under the Global Ultraco Debt Facility was $60.0 million and $100.0 million, respectively.

See Note 4. Debt, to the condensed consolidated financial statements included herein for a summary of our ~~control including, among other things, the general charter rate environment.~~credit agreements.

Capital Expenditures

Our capital expenditures primarily relate to the purchase of vessels as well as regularly scheduled drydocking and ~~capital~~other vessel improvements, ~~to our vessels,~~ which are expected to enhance ~~the~~their revenue earning capabilities, efficiency and/or safety and ~~safety of the vessels.~~

~~In addition~~ to ~~acquisitions that we may undertake~~comply with international shipping standards and environmental laws and regulations. Certain vessel improvement costs and costs incurred in ~~future periods, the other major capital expenditures include funding the Company’s program of regularly scheduled~~connection with drydocking ~~which is~~are necessary to comply with international shipping standards and environmental laws and ~~regulations.~~ regulations, while others are discretionary in nature and evaluated on a business case-by-case basis.

During the fourth quarter of 2022, the Company entered into a memorandum of agreement to acquire a high-specification 2015-built Ultramax bulkcarrier for total consideration of $24.3 million. The vessel was delivered to the Company during the first quarter of 2023.

On January 30, 2023, the Company entered into a memorandum of agreement to acquire a high-specification 2020-built scrubber-fitted Ultramax bulkcarrier for total consideration of $30.1 million. The vessel was delivered to the Company during the second quarter of 2023.

On February 28, 2023, the Company entered into a memorandum of agreement to acquire a high-specification 2020-built scrubber-fitted Ultramax bulkcarrier for total consideration of $30.1 million. The vessel was delivered to the Company during the second quarter of 2023.

Although the Company has some flexibility regarding the timing of ~~its drydocking,~~vessel drydockings, the timing of costs are relatively predictable. ~~The Company anticipates that~~In accordance with statutory requirements, we expect vessels ~~will~~less than 15 years old to be drydocked every ~~five years for vessels younger than 15 years~~60 months and ~~every two and a half years for~~ vessels older than 15 ~~years.~~years to be drydocked every 30 months. We ~~anticipate that we will~~intend to fund ~~these~~drydocking costs with cash from operations, ~~and that these drydocks will require~~cash on hand or with amounts available under the Global Ultraco Debt Facility. In addition, drydocking typically requires us to reposition ~~these~~ vessels from a discharge port to shipyard facilities, which will reduce our owned available days and ~~operating days~~revenues during that period.

Drydocking costs incurred are deferred and amortized ~~to expense~~through depreciation and amortization on the condensed consolidated statements of operations on a straight-line basis over the period through the date of the next ~~scheduled~~ drydocking is required to become due. During the six months ended June 30, 2023, five of our vessels completed drydock and we incurred $8.3 million for ~~those vessels.~~drydocking costs. During the six months ended June 30, 2022, seven of our vessels completed drydock and we incurred $16.1 million for drydocking ~~expenditures~~costs.

Vessel improvements generally include systems and equipment intended to enhance a vessel’s efficiency and revenue earning capability. We intend to fund these costs through cash from operations, cash on hand or amounts available under the Global Ultraco Debt Facility.

Vessel improvements are capitalized and depreciated over the remaining useful life of ~~$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.~~vessel.

The following table represents certain information about the estimated costs for anticipated vessel drydockings ~~ballast water treatment systems,~~ and ~~scrubber installations~~vessel improvements 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)
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


	Projected Costs (1) ($ in millions)
Quarters Ending	Off-hire Days(2)	Drydocks		Vessel Improvements(3)
September 30, 2023	201	$	3.2	$	1.2
December 31, 2023	241	$	3.9	$	0.8
March 31, 2024	218	$	6.9	$	—
June 30, 2024	143	$	0.1	$	—


~~(1)~~ ~~Actual costs will vary based on various factors, including where the drydockings are performed.~~
(1)			We intend to fund these costs with cash from operations, cash on hand or with amounts available under the Global Ultraco Debt Facility.
(2)			Actual duration of off-hire days will vary based on the age and condition of the vessel, yard schedules and other factors. Projected off-hire days includes an allowance for unforeseen events.
(3)			~~Vessel upgrades represents capex relating to items such as high-spec low friction hull paint which improves fuel efficiency and reduces fuel~~Projected 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~~for vessel improvements are ~~discretionary in nature and evaluated on a business case-by-case basis.~~primarily comprised of costs for ballast water treatment systems.

Off-balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Other Contingencies

~~We refer you to~~ See Note 7,8. Commitments and Contingencies, to our condensed consolidated financial statements for a discussion of our ~~contingencies. If an unfavorable ruling were~~contingencies related 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.legal proceedings. The potential impact from legal proceedings on our business, liquidity, results of operations, financial position and cash flows could be material and adverse and could change in the future.

1011

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, 2021, filed with the SEC on March 14, 2022.~~Report. For additional information regarding our use of ~~certain~~ derivative financial instruments, including interest rate swaps, forward freight agreements and bunker swaps, see Note ~~5, Derivatives~~5. Derivative Instruments, to ~~the~~our 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 June 30, ~~2022,~~2023, 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 June 30, ~~2022.~~2023.

Changes in Internal ~~Controls.~~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 June 30, ~~2022~~2023 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.~~

1112

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 7,8. Commitments and Contingencies, to ~~the~~our condensed consolidated financial statements and is incorporated by reference herein.

ITEM 1A – RISK FACTORS

~~There~~Other than as described below, 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, 2021, filed with the SEC on March 14, 2022. The risks described~~ in the Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022, filed with the SEC on March 10, 2023 (the “Annual Report”). The risks described in the Annual Report 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 and adversely affect our business, results of operations, earnings, financial condition, cash flows and stock price.

Provisions of our Rights Agreement, which the Board adopted to protect the Company and its shareholders from coercive or ~~future results.~~otherwise unfair takeover tactics, could also discourage, delay or prevent the acquisition of the Company that an individual shareholder may deem to be advantageous.

In June 2023, the Company entered into a Rights Agreement (the “Rights Agreement”) with Computershare Trust Company, N.A., a national banking corporation, as rights agent. The Board adopted the Rights Agreement to protect the Company and its shareholders from coercive or otherwise unfair takeover tactics. In general terms, the Rights Agreement works by imposing a significant penalty upon any person or group (including a group of persons that are acting in concert with each other) that acquires 15% or more of the outstanding common stock, including through derivatives agreements, without the approval of the Board (an “Acquiring Person”). Although the Rights Agreement will not prevent a takeover, it is intended to encourage anyone seeking to acquire our Company to negotiate with our Board prior to attempting a takeover. As the Rights Agreement generally allows shareholders, except for the Acquiring Person who triggers the exercise of rights, to purchase additional shares at significantly discounted market price, the potential dilution effect is dependent on the number of shares purchased by the Acquiring Person and other factors related to the acquisition and may not be estimated at this time. In addition, the existence of the Rights Agreement may also discourage transactions that an individual shareholder may otherwise deem to be advantageous.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Common stock repurchase activity during the three months ended June 30, 2023 was as follows ($ in thousands, except for per share amounts):


Periods	Total Number of Shares Purchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
April 1, 2023 to April 30, 2023	—	$	—	—
May 1, 2023 to May 31, 2023	—	$	—	—
June 1, 2023 to June 30, 2023	3,781,561	$	58.00	—
Total	3,781,561				$	50,000


(1)			3,781,561 shares were purchased pursuant to a privately negotiated transaction.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 – MINE SAFETY DISCLOSURES

None.

ITEM 5 – OTHER INFORMATION

~~None.~~During the quarterly period ended June 30, 2023, no director or officer of the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any “non-Rule 10b5-1 trading arrangement” (as defined in the Exchange Act).

1214

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~~ (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K ~~of Eagle Bulk Shipping Inc.,~~(File No. 001-33831) filed with the SEC on October 16, ~~2014; File No. 001-33831~~)2014).
3.2			Third Amended and Restated Articles of Incorporation of Eagle Bulk Shipping Inc.~~, dated as of August 4, 2016~~(~~incorporated~~ (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K ~~of Eagle Bulk Shipping Inc.,~~(File No. 001-33831) filed with the SEC on August 4, ~~2016; File No. 001-33831~~)2016).
3.3			~~Article~~Articles of Amendment toof the Third Amended and Restated Articles of Incorporation of Eagle Bulk Shipping Inc.(~~incorporated~~ (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~~ (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K ~~of Eagle Bulk Shipping Inc.,~~(File No. 001-33831) filed with the ~~SEC~~Commission on October 16, ~~2014; File No. 001-33831~~)2014).
4.2			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~~ (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).
4.3			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~~Company’s Current Report on Form 8-K (File No. 001-33831) filed with the ~~SEC~~Commission on August 2, 2019).
4.4			Form of Note representing the ~~Company's~~Company’s 5.00% Convertible Senior Notes due 2024 ~~(included~~(incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (File No. 001-33831) filed with the Commission on August 2, 2019).
4.5			Rights Agreement dated as of June 22, 2023 between Eagle Bulk Shipping Inc. and Computershare Trust Company, N.A., a national banking corporation, as Rights Agent (including the form of Certificate of Designations of Series A Junior Participating Preferred Stock attached thereto as Exhibit A, to the ~~Indenture filed~~form of Right Certificate attached thereto as Exhibit ~~4.1)~~B and the Summary of Rights to Purchase Preferred Shares attached thereto as Exhibit C) (incorporated by reference to Exhibit 4.1 to the ~~Company's~~Company’s Current Report on Form 8-K (File No. 001-33831) filed with the ~~SEC~~Commission on ~~August 2, 2019)~~June 23, 2023).
10.1*10.1			Employment Agreement, dated ~~June 16, 2022,~~March 29, 2023, among Eagle Bulk Shipping Inc., Eagle Shipping International (USA) LLC and ~~Frank De Costanzo.~~Constantine Tsoutsoplides (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-33831) filed with the SEC on March 31, 2023).
10.2			Restricted Stock Award Agreement under the Eagle Bulk Shipping Inc. 2016 Equity Incentive Plan, dated November 15, 2022, between Gary Vogel and Eagle Bulk Shipping Inc. (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q (File No. 001-33831) filed with the SEC on May 5, 2023).
10.3*			Amended and Restated Credit Agreement originally dated as of October 1, 2021 as amended and restated on May 11, 2023 by and among Eagle Bulk Shipping Inc. and certain vessel-owning subsidiaries, as guarantors, the lenders party thereto, the swap banks party thereto, Crédit Agricole Corporate and Investment Bank, Danish Ship Finance A/S, DNB Markets, Inc., Nordea Bank ABP, Filial I Norge and Skandinaviska Enskilda Banken AB (PUBL) as mandated lead arrangers and bookrunners and Crédit Agricole Corporate and Investment Bank, as facility agent, security trustee, structurer and sustainability coordinator.
10.4*			Form of Restricted Stock Unit Award Agreement under the Eagle Bulk Shipping Inc. Second Amended and Restated 2016 Equity Incentive Plan.
10.5			Securities Purchase Agreement, dated June 22, 2023, between Eagle Bulk Shipping Inc. and the Seller listed therein (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-33831) filed with the SEC on June 23, 2023).
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 June 30, ~~2022,~~2023, formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets (unaudited) as of June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, (ii) Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, (iii) Condensed Consolidated Statements of Comprehensive ~~income~~Income (unaudited) for the three and six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, (iv) Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three and six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, (v) Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, ~~2022~~2023 and ~~2021,~~2022, and (vi) Notes to Condensed Consolidated Financial Statements (unaudited).

* Filed herewith.

** Furnished herewith.

1316

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: August ~~8, 2022~~4, 2023

By: /s/ ~~Frank De Costanzo~~Constantine Tsoutsoplides

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

~~Frank De Costanzo~~Constantine Tsoutsoplides

Chief Financial Officer

(Principal financial officer of the registrant)

Date: August ~~8, 2022~~4, 2023

1417


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


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				Six Months Ended
		June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Interest rate swaps	Interest expense	$	(82)	$	151	$	315	$	296


FFA Period	Number of Days Hedged	Average FFA Contract Price
Quarter ending September 30, 2022	1305	$	23,653
Quarter ending December 31, 2022	1740	$	22,322


			Fair Value
(In thousands)	Carrying Value (7)		Level 1		Level 2
Assets
Cash and cash equivalents (1)	$	141,530	$	141,530	$	—
Collateral on derivatives	16,770		16,770		—
Fair value of derivative assets - current (2)	8,459		—		8,459
Fair value of derivative assets - noncurrent (3)	7,746		—		7,746
Liabilities
Global Ultraco Debt Facility (4)	262,650		—		262,650
Convertible Bond Debt (5)	114,119		—		199,698
Fair value of derivative liabilities - current (6)	269		—		269


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


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


	For the Three Months Ended						For the Six Months Ended
(In thousands)	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Revenues, net	$	198,695		$	129,851		$	383,093		$	226,423
Less: Voyage expenses	36,290			24,523			79,917			51,138
Less: Charter hire expenses	21,285			6,170			43,996			14,650
Net charter hire income	$	141,120		$	99,158		$	259,180		$	160,635

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


		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