UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-Q
(Mark One)
[X]☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20172022
OR
[  ]☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to
________________ __________________
Commission File Number 001–33831001-33831

EAGLE BULK SHIPPING INC.
(Exact name of Registrant as specified in its charter)
Republic of the Marshall Islands98–045351398-0453513
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
300 First Stamford Place, 5thfloor
Stamford, Connecticut 06902
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (203) 276–8100276-8100

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

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareEGLEThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES     X
Yes		NO☒No☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, 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 and post such files).
YES     X
Yes		NO☒No☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☐filer ☐Accelerated filer☐filer☒Non-Accelerated filer☐
Smaller reporting company☐Emerging growth company ☐
Non-Accelerated filer☐Smaller reporting company☒☐
(Do not check if a smaller reporting 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
Yes
NO     X
☐		No ☒
Number of shares of registrant’s common stock outstanding as of November 3, 2017: 74,123,050.2, 2022: 13,680,968
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes☒ No☐





TABLE OF CONTENTS

Page
PART IFINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS (Unaudited)
Page
PART IFINANCIAL INFORMATION
Item 1.
Condensed Consolidated Balance Sheets as of SeptemberSeptember 30, 20172022 and December 31, 20162021
F-1F-1
F-3F-2
F-4F-3
F-5F-4
F-6F-6
F-8F-7
ItemITEM 2.
1
ItemITEM 3.
12
ItemITEM 4.
12
PART IIOTHER INFORMATION
ItemITEM 1.
1413
ItemITEM 1A.
1413
ItemITEM 2.
1413
ItemITEM 3.
1413
ItemITEM 4.
1413
ItemITEM 5.
1413
ItemITEM 6.
14
1615







CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for the period ended September 30, 2017 (the "Quarterly Report on Form 10Q") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as “believe,” “estimate,” “project,” “intend,” “expect,” “plan,” “anticipate,” and similar expressions in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements reflect management’s current expectations and observations with respect to future events and financial performance.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. The principal factors that affect our financial position, results of operations and cash flows include, charter market rates, which have declined significantlycould decline from historic highs, periods of charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S. dollars, depreciation expenses, which are a function of the cost of our vessels, significant vessel improvement costs and our vessels' estimated useful lives, and financing costs related to our indebtedness. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors which could include the following: (i) changes in demand in the dry bulkdrybulk 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 dry bulkdrybulk vessel newbuilding orders or lower than anticipated rates of dry bulkdrybulk vessel scrapping; (iii) changes in rules and regulations applicable to the dry bulkdrybulk 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 dry bulkdrybulk tonnage requirements; (vi) changes in the typical seasonal variations in dry bulkdrybulk charter rates; (vii) changes in the cost of other modes of bulk commodity transportation; (viii) changes in general domestic and international political conditions;conditions, including the current conflict between Russia and Ukraine, which may impact our ability to retain and source crew, and in turn, could adversely affect our revenue, expenses, and profitability; (ix) changes in the condition of the Company’sCompany's vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking costs); (x) significant deteriorationsdeterioration in charter hire rates from current levels or the inability of the Company to achieve its cost-cutting measures; and (xi) the outcomeduration 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 proceeding inproceedings which we are involved;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 dry bulkdrybulk fleet and orderbookorder book and fleet age. We generated some of this data internally, and some were obtained from independent industry publications and reports that we believe to be reliable sources. We have not independently verified this data nor sought the consent of any organizations to refer to their reports in this Quarterly Report on Form 10-Q. We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.




PART I: FINANCIAL INFORMATION

Item 1. Financial Statements
ITEM I. FINANCIAL STATEMENTS
EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets as of
September 30, 20172022 and December 31, 20162021
(Unaudited)(U.S. Dollars in thousands, except share data and par values)

September 30, 2022December 31, 2021
September 30, 2017 December 31, 2016(Unaudited)
ASSETS:   ASSETS:
Current assets:   Current assets:
Cash and cash equivalents$64,323,168
 $76,516,110
Cash and cash equivalents$195,030 $86,147 
Accounts receivable10,158,386
 5,089,708
Accounts receivable, net of a reserve of $2,192 and $1,818, respectivelyAccounts receivable, net of a reserve of $2,192 and $1,818, respectively33,554 28,456 
Prepaid expenses2,121,327
 3,093,962
Prepaid expenses4,585 3,362 
Inventories12,602,371
 10,876,713
Inventories26,274 17,651 
Vessels held for sale16,915,287
 8,688,601
Collateral on derivativesCollateral on derivatives1,200 15,081 
Fair value of derivative assets - currentFair value of derivative assets - current18,353 4,669 
Other current assets1,376,331
 22
Other current assets703 667 
Total current assets107,496,870
 104,265,116
Total current assets279,699 156,033 
Noncurrent assets:   Noncurrent assets: 
Vessels and vessel improvements, at cost, net of accumulated depreciation of $92,052,541 and $76,463,743, respectively697,713,444
 567,592,950
Advances for vessels purchase—
 1,926,886
Other fixed assets, net of accumulated amortization of $457,748 and $307,880, respectively664,476
 632,805
Restricted cash74,917
 74,917
Vessels and vessel improvements, at cost, net of accumulated depreciation of $249,384 and $218,670, respectivelyVessels and vessel improvements, at cost, net of accumulated depreciation of $249,384 and $218,670, respectively876,547 908,076 
Advance for vessel purchaseAdvance for vessel purchase4,125 — 
Operating lease right-of-use assetsOperating lease right-of-use assets34,368 17,017 
Other fixed assets, net of accumulated depreciation of $1,566 and $1,403, respectivelyOther fixed assets, net of accumulated depreciation of $1,566 and $1,403, respectively346 257 
Restricted cash - noncurrentRestricted cash - noncurrent2,575 75 
Deferred drydock costs, net11,221,641
 11,507,309
Deferred drydock costs, net45,881 37,093 
Other assets1,077,386
 381,634
Fair value of derivative assets - noncurrentFair value of derivative assets - noncurrent9,873 3,112 
Advances for ballast water systems and other assetsAdvances for ballast water systems and other assets2,577 4,995 
Total noncurrent assets710,751,864
 582,116,501
Total noncurrent assets976,292 970,625 
Total assets$818,248,734
 $686,381,617
Total assets$1,255,991 $1,126,658 
LIABILITIES & STOCKHOLDERS' EQUITY   
LIABILITIES & STOCKHOLDERS' EQUITY:LIABILITIES & STOCKHOLDERS' EQUITY: 
Current liabilities:   Current liabilities: 
Accounts payable$7,233,012
 $7,135,156
Accounts payable$21,058 $20,781 
Accrued interest40,450
 28,872
Accrued interest1,635 2,957 
Other accrued liabilities10,162,883
 11,545,447
Other accrued liabilities17,012 17,994 
Fair value of derivatives281,266
 —
Fair value below contract value of time charters acquired—
 820,313
Fair value of derivative liabilities - currentFair value of derivative liabilities - current611 4,253 
Current portion of operating lease liabilitiesCurrent portion of operating lease liabilities30,742 15,728 
Unearned charter hire revenue7,573,856
 6,046,032
Unearned charter hire revenue14,794 12,088 
Current portion of long-term debtCurrent portion of long-term debt49,800 49,800 
Total current liabilities25,291,467
 25,575,820
Total current liabilities135,652 123,601 
Noncurrent liabilities:   Noncurrent liabilities:
First Lien Facility, net of debt discount and debt issuance costs191,433,141
 204,352,318
Second Lien Facility, inclusive of payment-in-kind interest, net of debt discount and debt issuance costs62,540,745
 51,591,226
Ultraco Debt Facility, net of debt discount and debt issuance costs59,784,675
 —
Other liabilities228,877
 483,132
Fair value below contract value of time charters acquired2,670,487
 3,896,482
Global Ultraco Debt Facility, net of debt issuance costsGlobal Ultraco Debt Facility, net of debt issuance costs193,202 229,290 
Convertible Bond Debt, net of debt discount and debt issuance costsConvertible Bond Debt, net of debt discount and debt issuance costs103,425 100,954 
Noncurrent portion of operating lease liabilitiesNoncurrent portion of operating lease liabilities3,626 1,282 
Other noncurrent accrued liabilitiesOther noncurrent accrued liabilities883 265 
Total noncurrent liabilities316,657,925
 260,323,158
Total noncurrent liabilities301,136 331,791 
Total liabilities341,949,392
 285,898,978
Total liabilities436,788 455,392 
Commitments and contingencies

 

Commitments and contingencies
Stockholders' equity:   Stockholders' equity: 
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued as of September 30, 2017 and December 31, 2016, respectively—
 —
Common stock, $0.01 par value, 700,000,000 shares authorized, 70,330,144 and 48,106,827 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively703,302
 481,069
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued as of September 30, 2022 and December 31, 2021Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued as of September 30, 2022 and December 31, 2021— — 
Common stock, $0.01 par value, 700,000,000 shares authorized, 13,003,516 and 12,917,027 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectivelyCommon stock, $0.01 par value, 700,000,000 shares authorized, 13,003,516 and 12,917,027 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively130 129 
Additional paid-in capital886,176,428
 783,369,698
Additional paid-in capital964,494 982,746 
Accumulated deficit(410,580,388) (383,368,128)Accumulated deficit(162,712)(313,495)
Total stockholders’ equity476,299,342
 400,482,639
Total liabilities and stockholders’ equity$818,248,734
 $686,381,617
Accumulated other comprehensive incomeAccumulated other comprehensive income17,291 1,886 
Total stockholders' equityTotal stockholders' equity819,203 671,266 
Total liabilities and stockholders' equityTotal liabilities and stockholders' equity$1,255,991 $1,126,658 




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


EAGLE BULK SHIPPING INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 and 2016
(Unaudited)
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Revenues, net$62,710,903
 $35,788,181
 $162,197,184
 $82,656,903
        
Voyage expenses17,462,699
 11,207,959
 44,195,710
 27,902,155
Vessel expenses20,110,123
 17,707,959
 57,374,444
 56,783,181
Charter hire expenses9,652,468
 3,822,456
 19,971,380
 6,979,213
Depreciation and amortization8,980,992
 9,854,228
 24,494,397
 28,905,058
General and administrative expenses8,620,938
 5,223,782
 24,989,738
 15,429,844
Refinancing expenses—
 (4,625) —
 5,869,025
Loss / (gain) on sale of vessels(202,487) (299,350) (2,100,386) 101,860
Vessel impairment—
 —
 —
 6,167,262
Total operating expenses64,624,733
 47,512,409
 168,925,283
 148,137,598
Operating loss(1,913,830) (11,724,228) (6,728,099) (65,480,695)
        
Interest expense7,836,999
 7,434,156
 21,140,746
 15,154,659
Interest income(142,940) (88,094) (518,379) (91,606)
Other (income) / expense647,457
 288,754
 (138,206) 589,539
Total other expense, net8,341,516
 7,634,816
 20,484,161
 15,652,592
Net loss$(10,255,346) $(19,359,044) $(27,212,260) $(81,133,287)
        
Weighted average shares outstanding:       
Basic70,329,252
 29,607,639
 68,782,517
 11,318,249
Diluted70,329,252
 29,607,639
 68,782,517
 11,318,249
        
Per share amounts:       
Basic net loss$(0.15) $(0.65) $(0.40) $(7.17)
Diluted net loss$(0.15) $(0.65) $(0.40) $(7.17)


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 Comprehensive LossOperations (Unaudited)
forFor the Three and Nine Months Ended September 30, 20172022 and 20162021
(Unaudited)(U.S. Dollars in thousands, except share and per share data)

 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net loss$(10,255,346) $(19,359,044) $(27,212,260) $(81,133,287)
        
Comprehensive loss$(10,255,346) $(19,359,044) $(27,212,260) $(81,133,287)
Three Months EndedNine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Revenues, net$185,313 $183,393 $568,406 $409,816 
Voyage expenses40,792 30,273 120,710 81,411 
Vessel operating expenses33,091 28,125 88,213 73,323 
Charter hire expenses19,772 10,724 63,768 25,374 
Depreciation and amortization15,407 13,570 45,241 39,187 
General and administrative expenses9,666 7,948 29,611 23,559 
Other operating expense2,469 792 2,643 2,312 
Gain on sale of vessel(9,336)(3,962)(9,336)(3,962)
Total operating expenses111,861 87,470 340,850 241,204 
Operating income73,452 95,923 227,556 168,612 
Interest expense4,236 8,511 13,021 25,561 
Interest income(881)(19)(1,100)(52)
Realized and unrealized (gain)/loss on derivative instruments, net(11,293)8,991 (13,281)45,588 
Loss on debt extinguishment4,173 99 4,173 99 
Total other (income)/expense, net(3,765)17,582 2,813 71,196 
Net income$77,217 $78,341 $224,743 $97,416 
Weighted average shares outstanding:
Basic12,993,450 12,802,401 12,985,329 12,237,288 
Diluted16,201,852 15,936,374 16,219,264 15,354,481 
Per share amounts:
Basic net income$5.94 $6.12 $17.31 $7.96 
Diluted net income$4.77 $4.92 $13.86 $6.34 



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 Stockholders' EquityComprehensive Income (Unaudited)
For the Three and Nine Months Ended September 30, 20172022 and 20162021
(Unaudited)(U.S. Dollars in thousands)

 
Common
Stock
 
Common
Stock
Amount
 
Additional
paid-in
Capital
 Accumulated Deficit 
Total Stockholders’
Equity
Balance at January 1, 201748,106,827
 $481,069
 $783,369,698
 $(383,368,128) $400,482,639
          
Net loss—
 —
 —
 (27,212,260) (27,212,260)
Issuance of shares in connection with private placement, net of issuance costs22,222,223
 222,222
 95,807,781
 —
 96,030,003
Vesting of restricted shares, net of shares withheld for employee tax1,094
 11
 (11) —
 —
Stock-based compensation—
 —
 6,998,960
 —
 6,998,960
Balance at September 30, 201770,330,144
 $703,302
 $886,176,428
 $(410,580,388) $476,299,342


Three Months EndedNine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Net income$77,217 $78,341 $224,743 $97,416 
Other comprehensive income:
Net unrealized gain on cash flow hedges4,554 80 15,405 724 
Comprehensive income$81,771 $78,421 $240,148 $98,140 
 
Common
Stock
 
Common
Stock
Amount
 
Additional
paid-in
Capital
 Accumulated Deficit 
Total Stockholders’
Equity
Balance at January 1, 20161,883,303
 $18,833
 $678,171,322
 $(159,845,693) $518,344,462
          
Net loss—
 —
 —
 (81,133,287) (81,133,287)
Issuance of shares in connection with the entry into the Second Lien Loan Agreement16,889,828
 168,899
 17,587,426
 —
 17,756,325
Issuance of shares for private placement29,333,318
 293,333
 85,407,202
 —
 85,700,535
Reverse stock split adjustment(32) —
 —
 —
 —
Vesting of restricted shares withheld for employee tax410
 4
 (2,942) —
 (2,938)
Stock-based compensation—
 —
 933,550
 —
 933,550
Balance at September 30, 201648,106,827

$481,069

$782,096,558

$(240,978,980)
$541,598,647



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 Cash Flows forStockholders' Equity (Unaudited)
For the Three and Nine Months Ended September 30, 20172022 and 20162021
(Unaudited)(U.S. Dollars in thousands, except share data)

Common
stock		Common
stock
amount		Additional
paid-in
capital		Accumulated deficitAccumulated other comprehensive incomeTotal stockholders’
equity
Balance at December 31, 202112,917,027 $129 $982,746 $(313,495)$1,886 $671,266 
Net income— — — 53,073 — 53,073 
Dividends declared ($2.05 per share)— — — (27,112)— (27,112)
Cumulative effect of adoption of ASU 2020-06— — (20,726)8,676 — (12,050)
Issuance of shares due to vesting of restricted shares60,890 1 (1)— — — 
Issuance of shares upon exercise of stock options8,077 — 85 — — 85 
Unrealized gain on cash flow hedges— — — — 8,681 8,681 
Fees for equity offerings— — 201 — — 201 
Cash used to settle net share equity awards— — (1,862)— — (1,862)
Stock-based compensation— — 1,487 — — 1,487 
Balance at March 31, 202212,985,994 130 961,930 (278,858)10,567 693,769 
Net income— — — 94,453 — 94,453 
Dividends declared ($2.00 per share)— — — (26,449)— (26,449)
Issuance of shares due to vesting of restricted shares3,187 — — — — — 
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, 202212,989,181 130 963,482 (210,854)12,737 765,495 
Net income— — — 77,217 — 77,217 
Dividends declared ($2.20 per share)— — — (29,075)— (29,075)
Issuance of shares due to vesting of restricted shares14,335 — — — — — 
Unrealized gain on cash flow hedges— — — — 4,554 4,554 
Cash used to settle net share equity awards— — (437)— — (437)
Stock-based compensation— — 1,449 — — 1,449 
Balance at September 30, 202213,003,516 $130 $964,494 $(162,712)$17,291 $819,203 

F-4

 Nine Months Ended
 September 30, 2017 September 30, 2016
Cash flows from operating activities:   
Net loss$(27,212,260) $(81,133,287)
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:   
Depreciation21,436,051
 26,573,461
Amortization of deferred drydocking costs3,058,346
 2,331,597
Amortization of debt issuance costs4,558,145
 3,092,193
Amortization of fair value below contract value of time charter acquired(546,308) (456,175)
Payment-in-kind interest on debt7,749,872
 4,782,863
Impairment of vessels—
 6,167,262
Net unrealized loss on fair value of derivative instruments126,651
 15,150
Stock-based compensation expense6,998,960
 933,550
Fees paid on termination of time charter agreement(1,500,000) —
Drydocking expenditures(2,772,678) (3,715,179)
Loss / (gain) on sale of vessels(2,100,386) 101,860
Changes in operating assets and liabilities:   
Accounts receivable(5,068,678) 622,722
Other current and non-current assets(1,917,446) 148,227
Prepaid expenses972,635
 594,856
Inventories(1,725,658) (1,421,413)
Accounts payable97,856
 (1,757,451)
Accrued interest11,578
 (401,232)
Other accrued and other non-current liabilities(2,211,819) 160,755
Unearned revenue1,527,824
 3,267,481
Net cash provided by/(used in) operating activities1,482,685
 (40,092,760)
    
Cash flows from investing activities:   
Vessel Improvements(676,405) (199,675)
Purchase of vessels(173,327,881) —
Proceeds from sale of vessels18,400,000
 13,001,000
Changes in restricted cash—
 66,244
Purchase of other fixed assets(183,344) (456,125)
Net cash (used in)/provided by investing activities(155,787,630) 12,411,444
    
Cash flows from financing activities:   
Proceeds from Second Lien Facility—
 60,000,000
Proceeds from Revolver Loan Facility under First Lien Facility—
 10,158,500
Repayment of Term Loan(9,200,000) (21,276,000)
Repayment of Revolver Loan(5,000,000) (30,158,500)
Proceeds from Ultraco Debt Facility61,200,000
 —
Proceeds from the common stock private placement, net of issuance costs96,030,003
 85,700,535
Cash used to settle net share equity awards—
 (2,938)
Financing costs paid to lender(918,000) (600,000)
Other financing costs—
 (2,467,647)
Common
stock		Common
stock
amount		Additional
paid-in
capital		Accumulated deficitAccumulated other comprehensive lossTotal stockholders’
equity
Balance at December 31, 202011,661,797 $116 $943,572 $(472,138)$(1,132)$470,418 
Net income— — — 9,849 — 9,849 
Issuance of shares due to vesting of restricted shares71,146 1 (1)— — — 
Unrealized gain on cash flow hedges— — — — 600 600 
Fees for equity offerings— — (32)— — (32)
Cash used to settle net share equity awards— — (811)— — (811)
Stock-based compensation— — 872 — — 872 
Balance at March 31, 202111,732,943 117 943,600 (462,289)(532)480,896 
Net income— — — 9,225 — 9,225 
Issuance of shares due to vesting of restricted shares2,773 — — — — — 
Issuance of shares upon conversion of warrants432,037 4 8,371 — — 8,375 
Issuance of shares from ATM Offering, net of commissions and issuance costs581,385 6 27,278 — — 27,284 
Issuance of shares upon exercise of stock options4,117 — 22 — — 22 
Unrealized gain on cash flow hedges— — — — 44 44 
Cash used to settle net share equity awards— — (174)— — (174)
Stock-based compensation— — 586 — — 586 
Balance at June 30, 202112,753,255 $127 $979,683 $(453,064)$(488)$526,258 
Net income— — — 78,341 — 78,341 
Issuance of shares upon conversion of Convertible Bond Debt25 — 1 — — 1 
Issuance of shares upon conversion of warrants109,861 1 2,304 — — 2,305 
Issuance of shares upon exercise of stock options857 — 33 — — 33 
Unrealized gain on cash flow hedges— — — — 80 80 
Issuance costs for ATM Offering— — (146)(146)
Stock-based compensation— — 777 — — 777 
Balance at September 30, 202112,863,998 $128 $982,652 $(374,723)$(408)$607,649 



Net cash provided by financing activities142,112,003
 101,353,950
    
Net (decrease)/increase in cash and cash equivalents(12,192,942) 73,672,634
Cash and cash equivalents at beginning of period76,516,110
 24,896,161
 Cash and cash equivalents at end of period$64,323,168
 $98,568,795
SUPPLEMENTAL CASH FLOW INFORMATION   
Cash paid during the year for interest$8,821,178
 $7,627,417
Non-cash deferred financing costs included in other accrued liabilities$575,000
 $—


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 Nine Months Ended September 30, 2022 and 2021
(U.S. Dollars in thousands)

Nine Months Ended
September 30, 2022September 30, 2021
Cash flows from operating activities:
Net income$224,743 $97,416 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation35,513 32,951 
Amortization of operating lease right-of-use assets21,083 10,536 
Amortization of deferred drydocking costs9,728 6,236 
Amortization of debt discount and debt issuance costs1,627 5,443 
Loss on debt extinguishment4,173 99 
Gain on sale of vessel(9,336)(3,962)
Net unrealized (gain)/loss on fair value of derivatives(8,517)24,193 
Stock-based compensation expense4,542 2,235 
Drydocking expenditures(18,527)(10,737)
Changes in operating assets and liabilities:
Accounts payable650 4,639 
Accounts receivable(5,098)(10,645)
Accrued interest(1,241)2,385 
Inventories(8,622)(5,467)
Operating lease liabilities current and noncurrent(21,076)(11,304)
Collateral on derivatives13,881 (31,370)
Fair value of derivatives, other current and noncurrent assets(183)(1,150)
Other accrued liabilities(2,332)1,898 
Prepaid expenses(1,223)(1,455)
Unearned charter hire revenue2,706 8,974 
Net cash provided by operating activities242,491 120,915 
Cash flows from investing activities:
Purchase of vessels and vessel improvements(781)(109,385)
Advances for vessel purchases(4,125)(2,200)
Purchase of scrubbers and ballast water systems(5,695)(4,557)
Proceeds from hull and machinery insurance claims— 245 
Proceeds from sale of vessel14,944 9,159 
Purchase of other fixed assets(253)(29)
Net cash provided by/(used in) investing activities4,090 (106,767)
Cash flows from financing activities:
Proceeds from New Ultraco Debt Facility— 16,500 
Repayment of Norwegian Bond Debt— (4,000)
Repayment of term loan under New Ultraco Debt Facility— (24,258)
Repayment of revolver loan under New Ultraco Debt Facility— (55,000)
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— 27,242 
Repayment of term loan under Global Ultraco Debt Facility(37,350)— 
Repurchase of Convertible Bond Debt(14,188)— 
Cash received from exercise of stock options85 56 
Cash used to settle net share equity awards(2,351)(986)
Equity offerings issuance costs201 (292)
Financing costs paid to lenders(18)(614)
Dividends paid(81,577)— 
Net cash (used in)/provided by financing activities(135,198)22,648 
Net increase in cash, cash equivalents and restricted cash111,383 36,796 
Cash, cash equivalents and restricted cash at beginning of period86,222 88,849 
Cash, cash equivalents and restricted cash at end of period$197,605 $125,645 
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for interest$12,861 $17,462 
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$38,956 $22,499 
Accruals for vessel purchases and vessel improvements included in Other accrued liabilities$— $500 
Accruals for scrubbers and ballast water treatment systems included in Accounts payable and Other accrued liabilities$3,916 $3,259 
Accruals for dividends payable included in Other accrued liabilities and Other noncurrent accrued liabilities$1,551 $— 
Accrual for issuance costs for ATM Offering included in Other accrued liabilities$— $104 
Accruals for debt issuance costs included in Accounts payable and Other accrued liabilities$— $509 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
F-6

EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Basis of Presentation and General Information
The accompanying condensed consolidated financial statements include the accounts of Eagle Bulk Shipping Inc. and its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our” or similar terms). The Company is engaged in the ocean transportation of dry bulkdrybulk cargoes worldwide through the ownership, charter and operation of dry bulkdrybulk vessels. The Company’s fleet is comprised of Supramax and Ultramax dry bulkdrybulk carriers, and the Company operates its business in one business segment.
As of September 30, 2017,2022, the Company owned and operated a modern fleet of 4852 oceangoing vessels, 37including 26 Supramax and 1126 Ultramax vessels with a combined carrying capacity of 2,737,1003.14 million deadweight tonnage ("dwt"tons (“dwt”) and an average age of approximately 8.09.9 years.
Additionally, the Company chartered-incharters-in five Ultramax vessels on a 37,000 dwt newbuilding Japanese vessel that was delivered in October 2014long term basis with remaining lease terms of approximately one year each and also charters-in vessels on a short term basis for seven years with an option fora period of less than one additional year. On May 10, 2017, the Company signed an agreement to cancel this existing time charter contract. The Company agreed to pay a lump sum termination fee of $1.5 million relating to the cancellation. At the same time, the Company entered into an agreement with the same lessor, effective April 28, 2017, to charter-in a 61,400 dwt, 2013 built Japanese vessel for approximately four years (having the same redelivery dates as the aforementioned canceled charter) with options for two additional years. The hire rate for the first four years is $12,800 per day and the hire rate for the first optional year is $13,800 per day and $14,300 per day for the second optional year. The $1.5 million early termination fee was accounted for as a reduction of fair value below time charters acquired in the condensed consolidated balance sheet as of September 30, 2017.
For the three and nine-month periodsnine months ended September 30, 20172022 and 2016,2021, the Company’s charterers did not individually account for more than 10% of the Company’s gross charter revenue during those periods.
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and the rules and regulations of the SEC whichthat apply to interim financial statements and with the instructions to Form 10-Q and Article 10Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes normally included in consolidated financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 20162021 Annual Report on Form 10-K, filed with the SEC on March 31, 2017.14, 2022 (the “Form 10-K”).
The accompanying condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of its condensed consolidated financial position and results of operations for the interim periods presented.
Additionally, as previously disclosed, the weighted average basic and diluted shares outstanding for the three months ended September 30, 2016 have been restated from 37,031,096 to 29,607,639 and the weighted average basic and diluted shares outstanding for the nine months ended September 30, 2016 have been restated from 20,588,612 to 11,318,249 to correct a clerical error. Accordingly, the basic and diluted loss per share for the three months ended September 30, 2016 has been restated from $0.52 to $0.65, and the basic and diluted loss per share for the nine months ended September 30, 2016 has been restated from $3.94 to $7.17.
The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the entire year.
We adoptedIn March 2021, the provisionsCompany 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 Accounting Standard Update (“ASU”) 2015-11 “Simplifying the Measurement of Inventory”, issued by the Financial Accounting Standards Board (“FASB”) as of January 1, 2017. Accordingly, we report our bunker inventory at lower of cost and net realizable value. There is no impact on the condensed consolidated financial statements becausecommon stock, par value $0.01 per share, of the adoptionCompany 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 new accounting standard.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 estimates and assumptions of the Company are residual value of vessels, the useful lives of fixedvessels, the value of stock-based compensation, estimated losses on our trade receivables, fair value of Convertible Bond Debt (as defined below) and its equity component, fair value of operating lease right-of-use assets and operating lease liabilities and the periodfair value of amortization, asset impairment, and stock-based compensation.derivatives. Actual results could differ from those estimates.

Note 2. Equity OfferingsRecent Accounting Pronouncements



Significant Accounting Policies
On December 13, 2016,
The Company's significant accounting policies are described in Note 2, Significant Accounting Policies, in the Company entered into a Stock Purchase Agreement with certain investors (the “Investors”), pursuant to which the Company agreed to issueNotes to the InvestorsConsolidated Financial Statements in the Form 10-K. Included herein are certain updates to those policies.



F-7

Recently Adopted Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity, (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain 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 private placement exemption from registrationcash 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 Section 4(a)Accounting Standards Codification (“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 Securities Act and Rule 506 of Regulation D promulgated underequity component. The resulting debt discount will no longer be amortized to interest expense over the Securities Act (the “December Private Placement”) approximately 22.2 million shareslife of the Company’s common stock, par value $0.01 per share, atbond 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 purchase price$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 Convertible Bond Debt, net of $4.50 per share, for aggregate gross proceeds of $100.0 million. On January 20, 2017, the Company closed the previously announced December Private Placement for aggregate net proceeds of $96.0 million. The Company principally used the proceeds to acquire two Ultramax vesselsdebt discount and fordebt issuance costs as a portionreversal of the payments required to acquiredebt discount.

Recently Issued Accounting Pronouncements Not Yet Effective

The FASB has issued accounting standards that had not yet become effective as of September 30, 2022 and may impact the Greenship Vessels (as defined in "Note 4. Vessels" to theCompany's condensed consolidated financial statements).statements or related disclosures in future periods. Those standards and their potential impact are discussed below:

Note 3. New Accounting Pronouncements
In May 2014,March 2020, the FASB issued ASU No. 2014-09, Revenue2020-04, 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 Contracts with Customers (“the anticipated transition away from the use of LIBOR and other interbank offered rates to alternative reference rates. ASU 2014-09”), which supersedes nearly2020-04 is elective and applies “to all existing revenue recognition guidance under U.S. GAAP. The core principle isentities, subject to meeting certain criteria, that a company should recognize revenue when promised goodshave contracts, hedging relationships, and other transactions that reference LIBOR or services are transferred to customers in an amount that reflects the consideration to which an entity expectsanother reference rate expected to be entitled for those goods or services.discontinued because of reference rate reform.” ASU 2014-09 defines2020-04 establishes (1) a five-step process to achieve this coregeneral contract modification principle and,that entities can apply in doing so, more judgment and estimatesother areas that may be required within the revenue recognition process than are required under existing U.S. GAAP. The standardaffected by reference rate reform and (2) certain elective hedge accounting expedients. ASU 2020-04 is optional and effective for annual periods beginning after December 15, 2017,all entities as of March 12, 2020 and interim periods therein, and shallmay be applied either retrospectivelyprospectively to each period presentedcontract modifications made on or as a cumulative-effect adjustment as of the date of adoption.before December 31, 2022. In May 2016,January 2021, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers. This update provides further guidance on applying collectability criterion to assess whether the contract is valid and represents a substantive transaction on the basis whether a customer has the ability and intention to pay the promised consideration. The requirements of this standard include2021-01, Reference Rate Reform (Topic 848): Scope, (“ASU 2021-01”), which clarifies certain provisions in Topic 848, if elected by an increase in required disclosures. Management has assembled an internal project team and is currently analyzing contracts with our customers covering the significant streams of the Company's annual revenues under the provisions of the new standard as well as changes necessary to information technology systems, processes and internal controls to capture new data and address changes in financial reporting. Management will apply the modified retrospective transition method and will recognize the cumulative effect of adopting this standard as an adjustment to the opening balance of retained earnings as of January 1, 2018. Prior periods will not be retrospectively adjusted. The Company continues to make progress in its implementation and assessment of the new revenue standard. While the assessment is still ongoing, based on the progress made to date, the Company expects that the timing of recognition of revenue for certain ongoing charter contracts will be impacted as well as the timing of recognition of certain voyage related costs. The financial impact of adoption will depend on the number of spot voyages and time charter arrangements as well as their percentage of completion at January 1, 2018. The Company is also evaluating the presentation of revenue in its condensed consolidated statement of operations after the adoption of ASU 2014-09.
In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In order to meet that objective, the new standard requires recognition of the assets and liabilities that arise from leases. A lessee will be required to recognize on the balance sheet the assets and liabilities for leases with lease terms of more than 12 months. Accounting by lessors will remain largely unchanged from current U.S. GAAP. The requirements of this standard include an increase in required disclosures. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Lessees and lessors will be requiredentity, to apply the new standard at the beginningto derivative instruments that use interest rate for margining, discounting, or contract price alignment that is modified as a result of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method.rate reference reform. The Company is currently evaluating the effect that adopting this standard will haveadoption of ASU 2020-04 on our financial statements and related disclosures. Management expects thatits debt under the Global Ultraco Debt Facility (as defined below) as it bears interest on outstanding borrowings at LIBOR plus a margin rate. Additionally, the Company will recognize increases in reported amounts for vessel and other fixed assets and related lease liabilities uponis also evaluating the adoption of the new standard. The impactASU 2021-01 on its interest rate swaps related to the Company’s financial statements will depend upon the amount of vessels the Company has chartered in, as well as the length and nature of such charters. Refer to “Note 7. Commitments and Contingencies” to the condensed consolidated financial statements for disclosure about the Company’s time charter and lease commitments as of September 30, 2017.Global Ultraco Debt Facility.




Note 4.3. Vessels
VesselVessels and Vessel Improvements


As of September 30, 2017,2022, the Company’s owned operating fleet consisted of 48 dry bulk52 drybulk vessels.
On November 14, 2016,During the Company, through its subsidiary Eagle Bulk Shipco LLC, signed a memorandumthird quarter of agreement to acquire a 2017 built 64,000 dwt SDARI-64 Ultramax dry bulk vessel constructed at Chengxi Shipyard Co., Ltd for $17.9 million. The Company took delivery of the vessel, the Singapore Eagle, on January 11, 2017.
On January 6, 2017, the Company sold the vessel Redwing for $5.8 million, after brokerage commissions and associated selling expenses, and recorded a net gain of approximately $0.1 million. The vessel was classified as an asset held for sale as of December 31, 2016. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility. Please refer to "Note 5. Debt - First Lien Facility" to the condensed consolidated financial statements.
On February 28, 2017, Ultraco, a wholly-owned subsidiary of2018, the Company entered into a framework agreement with Greenship Bulk Manager Pte. Ltd., as Trustee-Manager of Greenship Bulk Trust, a Norwegian OTC-listed entity (the "Greenship Sellers"),contract for the purchaseinstallation of nine modern sister vessels (the "Greenship Vessels"ballast water treatment systems (“BWTS”) built between 2012 and 2015, (the "Greenship Purchase Agreement").on 39 of our owned vessels. The aggregate purchase price for the nine Greenship Vesselsprojected cost, including installation, is $153.0 million. The allocated purchase price for each Greenship Vessel is $17.0 million.approximately $0.5 million per BWTS. The Company took deliveryintends to complete the installations during scheduled drydockings. The Company completed installation of all nine GreenshipBWTS on 32 vessels and recorded $19.8 million in Vessels and vessel improvements in the Condensed Consolidated Balance Sheets as of September 30, 2017.
On April 6, 2017,2022. Additionally, the Company soldrecorded $1.9 million as advances paid toward installation of BWTS on the vessel Sparrowremaining vessels recorded in Advances for $4.8 million after brokerage commissionsballast water systems and associated selling expenses, and recorded a net gain of approximately $1.8 million. The vessel was classified as an asset held for saleother assets in the Condensed Consolidated Balance Sheets as of March 31, 2017. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility. Please refer to "Note 5. Debt - First Lien Facility" to the condensed consolidated financial statements.
On July 27, 2017, the Company sold the vessel Woodstar for $7.8 million after brokerage commissions and associated selling expenses and recorded a gain for $0.2 million. The vessel was classified as an asset held for sale as of JuneSeptember 30, 2017. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility. Please refer to "Note 5. Debt- First Lien Facility" to the condensed consolidated financial statements).2022.
On June 15, 2017,8, 2022, the Company signed a memorandum of agreement to sell the vessel WrenCardinal for $7.6a total consideration of $15.8 million. The vessel was delivered to the buyer during the third quarter of 2022. The Company recorded a gain of $9.3 million after brokerage commissionsin the Condensed Consolidated Statements of Operations for the three and associated selling expenses.nine months ended September 30, 2022.
F-8


During the third quarter of 2022, the Company entered into a memorandum of agreement to acquire a high-specification 2015-built scrubber-fitted Ultramax bulkcarrier for a total consideration of $27.5 million. The vessel is expected to be delivered to the buyersCompany in the fourth quarter of 2017. The Company expects to recognize a gain of $0.05 million. A portion of the proceeds will be used towards repayment of the term loan under the First Lien Facility. Please refer to “Note 5. Debt—First Lien Facility” to the condensed consolidated financial statements. As of September 30, 2017, the Company reported the carrying amount of the vessel as a current assetNovember 2022.
Activity in its condensed consolidated balance sheet.
On August 30, 2017, the Company signed a memorandum of agreement to sell the vessel Avocet for $9.6 million after brokerage commissions and associated selling expenses. The vessel is expected to be delivered to the buyers in the first quarter of 2018. The Company expects to recognize a gain of $0.3 million. A portion of the proceeds will be used towards repayment of the term loan under the First Lien Facility. Please refer to “Note 5. Debt First Lien Facility” to the condensed consolidated financial statements. As of September 30, 2017, the Company reported the carrying amount of the vessel as a current asset in its condensed consolidated balance sheet.
VesselVessels and vessel improvements consist of the following:
Vessels and Vessel Improvements, at December 31, 2016$567,592,950
Advance paid for purchase of Singapore Eagle at December 31, 20161,926,886
Purchase of Vessels and Vessel Improvements174,004,286
Sale of vessel(7,611,013)
Transfer to Vessels held for sale(16,915,287)
Vessel depreciation expense(21,284,378)
Vessels and Vessel Improvements, at September 30, 2017$697,713,444





Note 5. Debt
 September 30, 2017 December 31, 2016
First Lien Facility$194,899,000
 $209,099,000
Debt issuance costs - First Lien(3,465,859) (4,746,682)
First Lien Facility, net of debt issuance costs191,433,141
 204,352,318
Second Lien Facility75,077,715
 67,327,843
Debt discount and debt issuance costs - Second Lien Facility(12,536,970) (15,736,617)
Second Lien Facility, net of debt issuance costs and debt discount62,540,745
 51,591,226
Ultraco Debt Facility61,200,000
 —
Debt discount and debt issuance costs - Ultraco Debt Facility(1,415,325) —
Ultraco Debt Facility, net of debt issuance costs and debt discount59,784,675
 —
Total debt$313,758,561
 $255,943,544
First Lien Facility
On March 30, 2016, Eagle Shipping LLC, a limited liability company organized under the laws of the Marshall Islands (“Eagle Shipping”), as borrower, and certain of its subsidiaries that were guarantors of the Company’s obligations under the Company’s senior secured credit facility (the “Exit Financing Facility”), as guarantors, entered into an Amended and Restated First Lien Loan Agreement (the “A&R First Lien Loan Agreement”) with the lenders thereunder (the “First Lien Lenders”) and ABN AMRO Capital USA LLC, as agent and security trustee for the lenders. The A&R First Lien Loan Agreement amends and restates the Exit Financing Facility in its entirety, provides for Eagle Shipping to be the borrower in the place of the Company, and further provides for a waiver of any and all events of default occurring as a result of the voluntary OFAC Disclosure (as defined in “Note 7. Commitments and Contingencies - Legal Proceedings” to the condensed consolidated financial statements). The A&R First Lien Loan Agreement provides for a term loan in the amount of $201,468,750 after giving effect to the entry into the A&R First Lien Loan Agreement and the Second Lien Loan Agreement (as defined below) as well as a $50,000,000 revolving credit facility, of which $10,000,000 was undrawn as of March 30, 2016 (the term loan, together with the revolving credit facility, the “First Lien Facility”). The First Lien Facility matures on October 15, 2019. An aggregate fee of $600,000 was paid to the agent and First Lien Lenders in connection with the First Lien Facility on March 30, 2016.
As of September 30, 2017, Eagle Shipping’s total availability in the revolving credit facility under the First Lien Facility was $30,000,000.
The A&R First Lien Loan Agreement contains financial covenants requiring Eagle Shipping, among other things, to ensure that the aggregate market value of the vessels in Eagle Shipping’s fleet plus the value of certain additional collateral ("minimum security covenant") at all times on or after July 1, 2017 does not fall below 100% in the third and fourth quarters of 2017, 110% in 2018 and 120% in 2019 of the aggregate principal amount of debt outstanding (subject to certain adjustments) under the First Lien Facility and maintain minimum liquidity of not less than the greater of (i) $8,140,000 and (ii) $185,000 per vessel in Eagle Shipping’s fleet. In addition, the A&R First Lien Loan Agreement imposes operating restrictions on Eagle Shipping including limiting Eagle Shipping’s ability to, among other things: incur additional indebtedness; create liens on assets; acquire and sell capital assets (including vessels); and merge or consolidate with, or transfer all or substantially all of Eagle Shipping’s assets to, another person. The A&R First Lien Loan Agreement also includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation or warranty, a cross-default to other indebtedness and non-compliance with security documents. Further, there would be a default if any event occurs or circumstances arise in light of which, in the First Lien Lenders’ judgment, there is significant risk that Eagle Shipping is or would become insolvent. Eagle Shipping is not permitted to pay dividends. Indebtedness under the First Lien Facility may also be accelerated if Eagle Shipping experiences a change of control.
Upon entering into the A&R First Lien Loan Agreement on March 30, 2016, Eagle Shipping paid three quarters of amortization payments with respect to the term loan under the First Lien Facility in the aggregate amount of $11,718,750, paid down $30,158,500, a portion of the amount outstanding in respect of the revolving credit facility under the First Lien Facility, maintained a minimum liquidity of $8,140,000 and added cash to the balance sheet. In addition, Eagle Shipping paid the first quarter amortization of $3,906,250 under the previously outstanding Exit Financing Facility. On June 30, 2017, December 31, 2017, June 30, 2018 and December 31, 2018 (each, a “Semi-Annual Determination Date”), Eagle Shipping is obligated to repay the term loan under the First Lien Facility in an amount equal to 75% of Eagle Shipping’s excess cash flow for the two fiscal quarters ended as of such Semi-Annual Determination Date, subject to a cap of such mandatory prepayments of $15,625,000 in any fiscal year. For the two fiscal quarters ended June 30, 2017, there was no excess cash flow and therefore no repayment of the term loan was made under the First


Lien Facility. Thereafter, Eagle Shipping will make payments of $3,906,250 on January 15, 2019, April 15, 2019, and July 15, 2019, and a final balloon payment equal to the remaining amount outstanding under the term loan under the First Lien Facility on October 15, 2019.
Additionally, Eagle Shipping has prepaid $5,651,000 of the term loan during the year ended December 31, 2016 and $9,200,000 of the term loan for the nine months ended September 30, 2017 pursuant to2022 is below:
(In thousands)
Vessels and vessel improvements, at December 31, 2021$908,076 
Purchase of vessels and vessel improvements703 
Sale of vessel(5,592)
Scrubbers and BWTS8,709 
Depreciation expense(35,349)
Vessels and vessel improvements, at September 30, 2022$876,547 

Note 4. Debt
(In thousands)September 30, 2022December 31, 2021
Convertible Bond Debt$104,119 $114,119 
Debt discount and debt issuance costs - Convertible Bond Debt(694)(13,165)
Convertible Bond Debt, net of debt discount and debt issuance costs103,425 100,954 
Global Ultraco Debt Facility250,200 287,550 
Debt discount and Debt issuance costs - Global Ultraco Debt Facility(7,198)(8,460)
Less: Current portion - Global Ultraco Debt Facility(49,800)(49,800)
Global Ultraco Debt Facility, net of debt issuance costs193,202 229,290 
Total long-term debt$296,627 $330,244 
Convertible Bond Debt

On July 29, 2019, the termsCompany issued $114.1 million in aggregate principal amount of 5.00% Convertible Senior Notes due 2024 (the “Convertible Bond Debt”). After deducting debt discount of $1.6 million, the A&R First Lien Loan AgreementCompany received net proceeds of approximately $112.5 million. Additionally, the Company incurred $1.0 million of debt issuance costs relating to mandatory prepayments upon salesthis transaction. The Company used the proceeds to partially finance the purchase of vessels. Additionally, Eagle Shipping also repaid $5,000,000six Ultramax vessels and for general corporate purposes, including working capital.

During the three months ended September 30, 2022, the Company repurchased $10.0 million in aggregate principal amount of Convertible Bond Debt for $14.2 million in cash and cancelled the revolving credit facilityrepurchased debt. Accordingly, a $4.2 million loss on debt extinguishment was recorded in the third quarterCondensed Consolidated Statement of 2017. The repayment schedule above has therefore been adjusted to accountOperations for such prepayments made throughthe three and nine months ended September 30, 2017, such that Eagle Shipping is required to make payments of $3,600,513 on January 15, 2019, April 15, 2019, and July 15, 2019, and a final balloon payment equal to the remaining amount outstanding under the First Lien Facility on October 15, 2019.2022. As a result of these repurchases, the mandatory prepayments made throughCompany’s weighted average diluted shares for the three and nine months ended September 30, 2017, Eagle Shipping is not required to comply with the minimum security covenant until the second quarter of 2018 pursuant to the terms of the A&R First Lien Loan Agreement.2022 decreased by 296,990 shares.
Second Lien Facility
On March 30, 2016, Eagle Shipping, as borrower, and certain of its subsidiaries that were guarantors of the Company’s obligations under the Exit Financing Facility, as guarantors, entered into a Second Lien Loan Agreement (the “Second Lien Loan Agreement”) with certain lenders (the “Second Lien Lenders”) and Wilmington Savings Fund Society, FSB as agent for the Second Lien Lenders (the “Second Lien Agent”). The Second Lien Lenders include certain of the Company’s existing shareholders as well as other investors. The Second Lien Loan Agreement provides for a term loan in the amount of $60,000,000 (the “Second Lien Facility”), and matures on January 14, 2020 (91 days after the original stated maturity of the First Lien Facility). The term loan under the Second Lien FacilityConvertible Bond Debt bears interest at a rate of LIBOR plus 14.00%5.00% per annum (withon 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.

F-9

Each holder has the right to convert any portion of the Convertible Bond Debt, provided such portion is of $1,000 or a 1.0% LIBOR floor)multiple thereof, at any time prior to the close of business on the business day immediately preceding the Maturity Date. As of September 30, 2022, 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 cash dividends declared through September 30, 2022 is 29.699 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 $33.67 per share of 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).

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

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

The Indenture also provides for customary events of default. Generally, if an event of default occurs and is continuing, then the trustee or the Base Rate (as definedholders of at least 25% in aggregate principal amount of the Second Lien Loan Agreement) plus 13.00% per annum, paidConvertible Bond Debt then outstanding may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Bond Debt then outstanding to be due and payable.

In accordance with ASC 470, Debt, (“ASC 470”) the liability and equity components of convertible debt instruments that may be settled in kind quarterlycash upon conversion (including partial cash settlement) prior to the adoption of ASU 2020-06 were to be separately accounted for in arrears.a manner that reflected the issuer's non-convertible debt borrowing rate. The payment-in-kindguidance 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 represents a non-cash operating and financing activityexpense at the interest rate of similar non-convertible debt that could have been issued by the Company at the time of issuance. Prior to the adoption of ASU 2020-06, the Company accounted for the Convertible Bond Debt based on the condensed consolidated statementabove guidance and attributed a portion of cash flows for the nine month periods ended September 30, 2017proceeds to the equity component. The resulting debt discount was amortized using the effective interest method over the expected life of the Convertible Bond Debt as interest expense. Additionally, the debt discount and 2016. On March 30, 2016, Eagle Shipping usedissuance costs were allocated based on the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Second Lien FacilityConvertible Bond Debt. The Company adopted ASU 2020-06 as of January 1, 2022 and made adjustments to pay down $30,158,500, a portionaccount for the cumulative impact of the amount outstanding in respectadoption. See Note 2, Recent Accounting Pronouncements, for discussion of the revolving credit facility underimpact of ASU 2020-06 on the First Lien Facility, pay three quarters of amortization payments underaccounting for the First Lien Facility, pay transaction fees inConvertible Bond Debt and the condensed consolidated financial statements upon adoption on January 1, 2022.

Share Lending Agreement

In connection with the entryissuance of the Convertible Bond Debt, certain persons entered into an arrangement (the “Share Lending Agreement”) to borrow up to 511,840 shares of the A&R First Lien LoanCompany’s common stock through share lending arrangements from Jefferies LLC (“JCS”), an initial purchaser of the Convertible Bond Debt, which in turn entered into an arrangement to borrow the shares from an entity affiliated with Oaktree Capital Management, LP, one of the Company’s shareholders. The number of shares under the Share Lending Agreement andhave been adjusted for the Second Lien Loan Agreement, maintain a minimum liquidityReverse Stock Split. As of $8,140,000 and add cash to its balance sheet.
The Second Lien Loan Agreement contains financial covenants substantially similar to those inSeptember 30, 2022, the A&R First Lien Loan Agreement, subject to standard cushions, requiring Eagle Shipping, among other things, to ensure that the aggregate marketfair value of the vessels in Eagle Shipping’s fleet (plus511,840 outstanding loaned shares was $22.1 million based on the closing price of the common stock on September 30, 2022. In connection with the Share Lending Agreement, JCS paid $0.03 million representing a nominal fee per borrowed share, equal to the par value of certain additional collateral) at all times on or after July 1, 2017the Company’s common stock.

While the Share Lending Agreement does not fall below 100%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 thirdShare Lending Agreement, which have the effect of substantially eliminating the economic dilution
F-10

that otherwise would result from the issuance of borrowed shares, the loaned shares are not considered issued and fourth quartersoutstanding for the purpose of 2017, 110% in 2018computing and 120% in 2019reporting the Company's basic and diluted weighted average shares or 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 the aggregate principal amount of debt outstanding (subject to certain adjustments) under the Second Lien Facility (provided that Eagle Shipping will not be required to comply with such covenant until the discharge of its obligations under the A&R First Lien Loan Agreement) and to maintain a minimum liquidity of not less than the greater of (i) $6,512,000 and (ii) $148,000calculating net income per vessel in Eagle Shipping’s fleet. In addition, the Second Lien Loan Agreement also imposes operating restrictions on Eagle Shipping including limiting Eagle Shipping’s ability to, among other things: incur additional indebtedness; create liens on assets; acquire and sell capital assets (including vessels); and merge or consolidate with, or transfer all or substantially all of Eagle Shipping’s assets to, another person. Eagle Shipping may not prepay the Second Lien Facility while amounts or commitments under the First Lien Facility remain outstanding.share.
The Second Lien Loan Agreement also includes customary events of default, including those relating to a failure to pay principal or interest, a breach of covenant, representation or warranty, a cross-default to other indebtedness and non-compliance with security documents. Further, there would be a default if any event occurs or circumstances arise in light of which, in the Second Lien Lenders’ judgment, there is significant risk that Eagle Shipping is or would become insolvent. Eagle Shipping is not permitted to pay dividends. Indebtedness under the Second Lien Facility may also be accelerated if Eagle Shipping experiences a change of control.
Global Ultraco Debt Facility

On June 28, 2017,October 1, 2021, Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary of the Company, along with certain of its vessel-owning subsidiaries as guarantors, entered into a new senior secured credit agreementfacility (the “Ultraco“Global Ultraco Debt Facility”), by and among Ultraco, as borrower, certain wholly-owned vessel-owning subsidiaries of Ultraco, as guarantors (the “UltracoGuarantors”), with the lenders thereunder (the “UltracoLenders”), the swap banks party thereto ABN AMRO Capital USA LLC, as facility agent(the “Lenders”) Credit Agricole Corporate and security trustee for the Ultraco Lenders, ABN AMRO Capital USA LLC, DVBInvestment Bank SE and(“Credit Agricole”), Skandinaviska Enskilda Banken AB (publ)(PUBL), as mandated lead arrangers,Danish Ship Finance A/S, Nordea Bank ABP, Filial I Norge, DNB Markets Inc., Deutsche Bank AG, and ABN AMRO Capital USA LLC, as arranger and bookrunner.ING Bank N.V., London Branch. The Global Ultraco Debt Facility provides for an aggregate principal amount of $400.0 million, which consists of (i) a multi-draw senior secured term loan facility in an aggregate principal


amount of up to the lesser of (i) $61,200,000$300.0 million (the “Term Facility”) and (ii) 40% of the lesser of (1) the purchase price of the nine Greenship Vessels to be acquired by Ultraco and the Ultraco Guarantors pursuant to a previously disclosed framework agreement, dated as of February 28, 2017, with Greenship Bulk Manager Pte. Ltd., as Trustee-Manager of Greenship Bulk Trust, and (2) the fair market value of the Greenship Vessels. The proceeds of the Ultraco Debt Facility were used for the purpose of financing, refinancing or reimbursing a part of the acquisition cost of the Greenship Vessels. The outstanding borrowings under the Ultraco Debt Facility bear interest at LIBOR plus 2.95% per annum. The Ultraco Debt Facility also provides for the payment of certain other fees and expenses by Ultraco.

Mr. Bart Veldhuizen, a member of the Board of Directors of the Company, is on the board of managing directors of DVB Bank SE, where he is responsible for the bank’s shipping and offshore franchises. Mr. Veldhuizen did not participate in discussions of the Board of Directors of the Company concerning the Ultraco Debt Facility.

As of September 30, 2017, the Company has drawn $61,200,000 of therevolving credit facility relating to the acquisition of the nine Greenship Vessels.
The Ultraco Debt Facility matures on the earlier of (i) five years after the delivery of the last remaining Greenship Vessel to occur and (ii) October 31, 2022. There are no fixed repayments until January 2019 (the "First Repayment Date"). Ultraco is required to make quarterly repayments of principal in an amount of $1,602,270 beginning in the first quarter of 2019 with a final balloon payment to be made at maturity. The Ultraco Debt Facility allows for increased commitments, subject to the satisfaction of certain conditions and the obtaining of certain approvals, in an aggregate principal amount of up to the lesser of (i) $38,800,000 and (ii) 40% of the aggregate fair market value of any additional vessels$100.0 million (the “Revolving Facility”) to be financed with such incremental commitment.
Ultraco’s obligationsused 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 among other items, a first priority mortgage on each49 of the Greenship Vessels and such other vessels that it may from time to time include with the approval of the Ultraco Lenders, an assignment of earnings of the Greenship Vessels, an assignment of all charters with terms that may exceed 12 months, an assignment of insurances, an assignment of certain master agreements, and a pledge of the membership interests of each of Ultraco’s vessel-owning subsidiaries. In the future, Ultraco may grant additional security to the Ultraco Lenders from time to time.

Company's vessels. The Global Ultraco Debt Facility contains certain standard affirmative and negative covenants along with financial covenants. The financial covenants requiring Ultraco, among other things: (1) to ensure thatinclude: (i) minimum consolidated liquidity based on the aggregate market valuegreater of (a) $0.6 million per vessel owned directly or indirectly by the Company or (b) 7.5% of the Greenship Vessels (plusCompany's total debt; (ii) debt to capitalization ratio not greater than 0.60:1.00; and (iii) maintaining positive working capital. As of September 30, 2022, the value of certain additional collateral) is atCompany was in compliance with all times not less than 150% ofapplicable financial covenants under the aggregate principal amount of debt outstanding (subjectGlobal Ultraco Debt Facility.

Pursuant to certain adjustments); (2) to maintain cash or cash equivalents not less than (a) a liquidity reserve of $600,000 in respect of each Greenship Vessel and (b) a debt service reserve of $600,000 in respect of each Greenship Vessel, a portion of which may be utilized to satisfy the obligations under theGlobal Ultraco Debt Facility, upon satisfactionthe 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 four interest rate swaps for the notional amount of certain conditions; however, taking into account the requirements of 2(a) and 2(b), the cash or cash equivalents cannot be less than the greater of (i) $7.5$300.0 million or (ii) 12% of the consolidated total debt of Ultraco and its subsidiaries; (3) to maintain at all times a ratio of consolidated tangible net worth to consolidated total assets of not less than 0.35 to 1.00; (4) to maintain a consolidated interest coverage ratio beginning afterTerm Facility under the second anniversary of June 28, 2017, of not less than a range varying from 2.00 to 1.00 to 2.50 to 1.00; and (5) to maintain a ballast water treatment systems reserve of $4,550,000, which may be released upon the satisfaction of certain conditions. In addition, theGlobal Ultraco Debt Facility also imposes operating restrictionsat 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 nine months ended September 30, 2022, the interest rate on Ultracothe Convertible Bond Debt was 5.00%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 5.25% and 5.35%, respectively.

For the Ultraco Guarantors, including limiting Ultraco’s andthree months ended September 30, 2022, the Ultraco Guarantors’ ability to, among other things: pay dividends; incur additional indebtedness; create liensinterest rate on assets; sell assets; dissolve or liquidate; merge or consolidate with another person; make investments; engage in transactions with affiliates; and allow certain changes of control to occur.

As a result of the receipt of extensions from the United States Coast Guard (the "USCG") regarding compliance with a USCG approved ballast water treatment systems ("BWMS"), the funds held in the ballast water treatment system reserve account have been released for Ultraco's use in the third quarter of 2017.
TheGlobal Ultraco Debt Facility also includes customary events of default, including those relating to: a failure to pay principal or interest; a breach of covenant, representation or warranty; a cross-default to other indebtedness; the occurrence of certain bankruptcy and insolvency events; the occurrence of certain ERISA events; a judgment default; the cessation of business; the impossibility or unlawfulness of performance of the loan documents; the ineffectiveness of any material provision of any loan document; the occurrence of a material adverse effect; and the occurrence of certain swap terminations.

Interest Rates

For the three-month period ended September 30, 2017, interest rates on the First Lien Facility ranged from 5.23%3.93% to 5.30%5.39%, including a margin over LIBOR applicable under the terms of the First LienGlobal Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the First Lienrevolving 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 6.47%4.80%.




For the three-month periodnine months ended September 30, 2016,2022, the interest ratesrate on the First LienGlobal Ultraco Debt Facility ranged from 4.46%2.35% to 4.52%5.39%, including a margin over LIBOR applicable under the terms of the First LienGlobal Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the First Lienrevolving 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 5.65%3.85%.


F-11



2021

For the nine-month periodthree and nine months ended September 30, 2017,2021, the interest rates on our outstanding debt under the First Lien Facility ranged from 4.77% to 5.30%, including a margin over LIBOR and commitment fees of 40% of the marginrate on the undrawn portion of the facility.Convertible Bond Debt was 5.00%. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for these periods was 6.13%10.14%.

For the nine-month periodthree months ended September 30, 2016,2021, the interest ratesrate on the First LienNew Ultraco Debt Facility ranged from 3.86%2.61% to 4.53%2.68%, including a margin over LIBOR applicable under the terms of the First LienNew Ultraco Debt Facility and commitment fees of 40% of the margin on the undrawn portion of the First Lienrevolving 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 5.49%3.39%.


For the three and nine-month periodsnine months ended September 30, 2017,2021, the interest rate on the New Ultraco Debt Facility ranged from 4.19%2.60% to 4.25%2.72%, including a margin over LIBOR applicable under the terms of the New Ultraco Debt Facility which was entered intoand commitment fees of 40% of the margin on June 28, 2017.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 4.55%3.28%.


For the three and nine-month periodsnine months ended September 30, 2017 and 2016,2021, the payment-in-kind interest rate on our Second Lien Facilitythe Norwegian Bond Debt was 15% including a margin over LIBOR.8.25%. The weighted average effective interest rate on our Second Lien Facility including the amortization of debt discount and debt issuance costs for this periodthese periods was 17.05%. The payment-in-kind interest is due January 19, 2020. 9.05% and 9.02%, respectively.
Interest Expense consisted of:
 Three Months Ended Nine Months Ended
 September 30, 2017September 30, 2016 September 30, 2017September 30, 2016
First Lien Facility/Exit Financing Facility$2,822,208
$2,482,080
 $8,233,130
$7,279,603
Amortization of Debt issuance costs1,656,197
2,292,545
 4,558,145
3,092,193
Payment in kind interest on Second Lien Facility2,772,652
2,659,531
 7,749,872
4,782,863
Ultraco Debt Facility585,942
—
 599,599
—
Total Interest Expense$7,836,999
$7,434,156
 $21,140,746
$15,154,659
Interest paid amounted to $8,821,178For the three and $7,627,417 for the nine months ended September 30, 20172021, 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.

For the three and 2016,nine months ended September 30, 2021, the interest rate on our outstanding debt under the Holdco Revolving Credit Facility ranged from 2.55% to 2.60%. The weighted average effective interest rate including the amortization of debt issuance costs for these periods was 6.15% and 5.61%, respectively. 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 EndedNine Months Ended
(In thousands)September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Convertible Bond Debt interest$1,426 $1,426 $4,279 $4,279 
Global Ultraco Debt Facility interest2,024 — 6,372 — 
Holdco Revolving Credit Facility interest— 156 — 314 
New Ultraco Debt Facility interest— 1,063 — 4,068 
Norwegian Bond Debt interest— 3,711 — 11,065 
Super Senior Facility interest— — — 30 
Amortization of debt discount and debt issuance costs535 1,976 1,627 5,443 
Commitment fees on revolving credit facilities251 179 743 362 
Total Interest expense$4,236 $8,511 $13,021 $25,561 




F-12


Scheduled Debt Maturities
The following table presents the scheduled maturities of principal amounts of our debt obligations excludingas of September 30, 2022:
(In thousands)Convertible Bond DebtGlobal Ultraco Debt FacilityTotal
Three months ending December 31, 2022$— $12,450 $12,450 
2023— 49,800 49,800 
2024104,119 49,800 153,919 
2025— 49,800 49,800 
2026— 88,350 88,350 
$104,119 $250,200 $354,319 

Note 5. Derivative Instruments
Interest rate swaps
During October 2021, the impact of any future vessel sales,Company entered into four interest rate swaps for the next five yearsnotional amount of $300.0 million of the Term Facility under the Credit Agreement for the Global Ultraco Debt Facility at a fixed interest rate ranging between 0.83% and 1.06% to hedge the LIBOR-based floating interest rate.
During 2020, the Company entered into a series of interest rate swap agreements to effectively convert a portion of its debt under the New Ultraco Debt Facility, excluding any amounts outstanding under the revolving credit facility as well as any new term loan borrowings from a floating to a fixed-rate basis. In August 2021, the Company cancelled the New Ultraco Debt Facility interest rate swaps. Concurrent with the cancellation, the Company entered into another interest rate swap which was subsequently cancelled on October 1, 2021 upon repayment of the New Ultraco Debt Facility.

The interest rate swaps were designated and qualified as cash flow hedges. The Company uses interest rate swaps for the management of interest rate risk 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 the Company and counterparties to pay, in total thereafter.the future, a fixed-rate payment in exchange for the counterparties paying the Company a variable payment. The amount of the net payment obligation is based on the notional amount of the interest rate swap and the prevailing market interest rates. 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 September 30, 2022 and December 31, 2021:
Interest Rate Swap detailNotional Amount outstanding (in thousands)
Trade dateFixed rateStart dateEnd dateSeptember 30, 2022December 31, 2021
October 07, 20210.83 %October 12, 2021December 15, 2025$187,650 $215,663 
October 13, 20210.94 %October 15, 2021December 15, 202520,850 23,963 
October 14, 20210.93 %October 18, 2021December 15, 202520,850 23,963 
October 22, 20211.06 %October 26, 2021December 15, 202520,850 23,963 
$250,200 $287,552 
F-13

 First Lien FacilitySecond Lien FacilityUltraco Debt FacilityTotal
2017$—
$—
$—
$—
2018—
—
—
—
2019194,899,000
—
6,409,080
201,308,080
2020—
75,077,715
6,409,080
81,486,795
2021—
—
6,409,080
6,409,080
Thereafter—
—
41,972,760
41,972,760
 $194,899,000
$75,077,715
$61,200,000
$331,176,715
The Company records the fair value of each 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 in the Condensed Consolidated Balance Sheets. The estimated income that is currently recorded in Accumulated other comprehensive income as of September 30, 2022 that is expected to be reclassified into the earnings within the next twelve months is $7.7 million. No portion of the cash flow hedges were ineffective during the three and nine months ended September 30, 2022.



The effect of the interest rate swaps on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 is below:

Derivatives designated as hedging instrumentsLocation of (gain)/loss in Statements of OperationsEffective portion of (gain)/loss reclassified from Accumulated other comprehensive income (in thousands)
Three Months EndedNine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Interest rate swapsInterest expense$(619)$151 $(304)$447 

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

Note 6. Derivative Instruments and Fair Value Measurements
Derivatives designated as hedging instruments (in thousands)Balance Sheet locationSeptember 30, 2022December 31, 2021
Interest rate swapFair value of derivative assets - current$7,583 $— 
Interest rate swapFair value of derivative assets - noncurrent$9,873 $3,112 
Interest rate swapFair value of derivative liabilities - current$— $885 
Forward freight agreements and bunker swaps
The Company trades in forward freight agreements (“FFAs”) and bunker swaps, with the objective of utilizing this market as economic hedging instruments that reduce the risk of specific vessels to changes in the freight market. The Company’s FFAs and bunker swaps have not qualified for hedge accounting treatment. As such, unrealized and realized gains are recorded in Other expense, net in the Condensed Consolidated Statements of Operations. The Company records the fair value of FFAs and bunker swaps as an asset or liability on its balance sheet. 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. Cash collateral related to derivative instruments under its collateral security arrangements is recorded in Collateral on derivatives in the Condensed Consolidated Balance Sheets.

As of September 30, 2022, the Company had International Swaps and Derivatives Association (“ISDA”) agreements with five applicable banks and financial institutions, which contain netting provisions. In addition to a master agreement with the Company supported by a primary parent guarantee on either side, the Company also has associated credit support agreements in place with two counterparties which, among other things, provide the circumstances under which either party is required to post eligible collateral, when the market value of transactions covered by these agreements exceeds specified thresholds. The Company does not anticipate non-performance by any of the counterparties.

As of September 30, 2022, the Company had outstanding bunker swap agreements to purchase 15,800 metric tons of high and low sulfur fuel oil with prices ranging between $486 and $719 that expire on March 31, 2023. The volume represents less than 10% of our estimated consumption on our fleet for the year.









F-14



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

FFA PeriodNumber of Days HedgedAverage FFA Contract Price
Quarter ending December 31, 2022 - Sell Positions2,010$21,981 
Quarter ending December 31, 2022 - Buy Positions(1,335)$16,461 
Year ending December 31, 2023 - Sell Positions720$14,525 
Year ending December 31, 2023 - Buy Positions(855)$14,308 

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 recognized as a component of other expenserecorded in Realized and unrealized (gain)/loss on derivative instruments, net in the condensed consolidated statementCondensed Consolidated Statements of operations.Operations.

The effect of non-designated derivative instruments on the condensed consolidated statementsCondensed Consolidated Statements of operationsOperations and Balance Sheets is as follows:

(In thousands)(In thousands)Three Months EndedNine Months Ended
Derivatives not designated as hedging instrumentsLocation of (gain)/loss recognized Amount of (gain)/lossDerivatives not designated as hedging instrumentsLocation of loss/(gain) in Statements of OperationsSeptember 30, 2022September 30, 2021September 30, 2022September 30, 2021
  For the
Three Months Ended		 For the
Nine Months Ended
  September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
FFAsOther expense $862,224
 $163,499
 $73,509
 $464,284
Bunker SwapsOther expense (214,767) —
 (211,715) —
FFAs - realized (gain)/lossFFAs - realized (gain)/lossRealized and unrealized (gain)/loss on derivative instruments, net$(3,800)$16,139 $(1)$23,493 
FFAs - unrealized (gain)/lossFFAs - unrealized (gain)/lossRealized and unrealized (gain)/loss on derivative instruments, net(10,478)(6,787)(9,359)24,382 
Bunker swaps - realized gainBunker swaps - realized gainRealized and unrealized (gain)/loss on derivative instruments, net(369)(801)(4,763)(2,099)
Bunker swaps - unrealized loss/(gain)Bunker swaps - unrealized loss/(gain)Realized and unrealized (gain)/loss on derivative instruments, net3,354 440 842 (188)
TotalTotal $647,457
 $163,499
 $(138,206) $464,284
Total$(11,293)$8,991 $(13,281)$45,588 



Derivatives not designated as hedging instrumentsBalance Sheet location Fair value of Derivatives
   September 30, 2017 December 31, 2016
FFAsFair value of derivatives $(281,266) $—
Bunker SwapsOther current assets 154,615
 —
Total  $(126,651) $—
Derivatives not designated as hedging instruments (in thousands)Balance Sheet locationSeptember 30, 2022December 31, 2021
FFAs - Unrealized lossFair value of derivative liabilities - current$— $3,368 
FFAs - Unrealized gainFair value of derivative assets - current10,770 4,326 
Bunker swaps - Unrealized lossFair value of derivative liabilities - current611 — 
Bunker swaps - Unrealized gainFair value of derivative assets - current— 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 agreementagreements executed
F-15

with counterparties or exchanges and is required when agreed upon threshold limits are exceeded. As of September 30, 20172022 and December 31, 2016,2021, the Company posted cash collateral related to derivative instruments under its collateral security arrangements of $1,154,331$1.2 million and zero,$15.1 million, respectively, which is recorded within other current assetsin Collateral on derivatives in the condensed consolidated balance sheets.Condensed Consolidated Balance Sheets.

6. Fair Value Measurements
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash, cash equivalents and restricted cash—the carrying amounts reported in the consolidated balance sheetsCondensed Consolidated Balance Sheets for interest-bearing deposits approximate their fair value due to theirthe short-term nature thereof.


Debt—the carrying amountsvalues approximate fair value for bonds issued under the Convertible Bond Debt, which is traded in the over-the-counter market. The carrying amount of borrowingsour term loan borrowing under our debt agreements, excluding the impact of debt discount and debt issuance costs, approximate theirGlobal Ultraco Debt Facility approximates its fair values,value, due to theits variable interest rate thereof.rates.
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, and restricted cash accounts.accounts and collateral on derivatives.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Our Level 2 non-derivatives include our debt balances under the First Lien Facility, Second Lien FacilityConvertible 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, uses observable Level 2 market inputs at measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact. See Note 5, Derivative Instruments.

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

September 30, 2022
Fair Value
(In thousands)
Carrying Value (7)
Level 1Level 2
Assets
Cash and cash equivalents (1)
$197,605 $197,605 $— 
Collateral on derivatives1,200 1,200 — 
Fair value of derivative assets - current (2)
18,353 — 18,353 
Fair value of derivative assets - noncurrent (3)
9,873 — 9,873 
Liabilities
Global Ultraco Debt Facility (4)
250,200 — 250,200 
Convertible Bond Debt (5)
104,119 — 146,027 
Fair value of derivative liabilities - current (6)
611 — 611 











F-16

   Fair Value
 Carrying Value Level 1 Level 2
September 30, 2017     
Assets     
Cash and cash equivalents (1)
$64,398,085
 $64,398,085
 $—
Liabilities     
First Lien Facility191,433,141
 —
 194,899,000
Second Lien Facility62,540,745
 —
 75,077,715
Ultraco Debt Facility59,784,675
 —
 61,200,000
December 31, 2021
Fair Value
(In thousands)
Carrying Value (7)
Level 1Level 2
Assets
Cash and cash equivalents (1)
$86,222 $86,222 $— 
Collateral on derivatives15,081 15,081 — 
Fair value of derivative assets - current (2)
4,669 — 4,669 
Fair value of derivative assets - noncurrent (3)
3,112 — 3,112 
Liabilities
Global Ultraco Debt Facility (4)
287,550 — 287,550 
Convertible Bond Debt (5)
114,119 — 147,499 
Fair value of derivative liabilities - current (6)
4,253 — 4,253 
   Fair Value
 Carrying Value Level 1 Level 2
December 31, 2016     
Assets     
Cash and cash equivalents  (1)
$76,591,027
 $76,591,027
 $—
Liabilities     
First Lien Facility204,352,318
 —
 209,099,000
Second Lien Facility51,591,226
 —
 67,327,843

(1) Includes non-current restricted cash aggregating $74,917(noncurrent) of $2.6 million at September 30, 20172022 and $0.1 million at December 31, 2021.
(2) Includes $10.8 million of unrealized mark-to-market gains on FFAs and $7.6 million of unrealized gains on our interest rate swaps as of September 30, 2022 and $4.7 million of unrealized mark-to-market gains on FFAs and bunker swaps as of December 31, 2021.
(3) Includes $9.9 million and $3.1 million of unrealized gains on our interest rate swaps as of September 30, 2022 and December 31, 2016.2021, respectively.

(4) The fair value of the liabilities is based on the required repayment to the lenders if the debt was discharged in full on September 30, 2022 and December 31, 2021.
(5) The fair value of the Convertible Bond Debt is based on the last trade on September 29, 2022 and December 16, 2021 on Bloomberg.com.
(6) Includes $0.6 million of unrealized mark-to-market losses on bunker swaps as of September 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.

Note 7. Commitments and Contingencies
Legal Proceedings
The Company is involved in legal proceedings and may become involved in other legal matters arising in the ordinary course of its business. The Company evaluates these legal matters on a case-by-case basis to make a determination as to the impact, if any, on its business, liquidity, results of operations, financial condition or cash flows.
In November 2015,March 2021, the U.S. government began investigating an allegation that one of the Company's vessels may have improperly disposed of ballast water that entered the engine room bilges during a repair. The investigation of this alleged violation of environmental laws is ongoing, and, although at this time we do not believe that this matter will have a material impact on the Company, filed a voluntary self-disclosure report with OFAC regarding certain apparent violations of U.S. sanctions regulations in the provision of shipping services for third party charterers with respect to the transportation of cargo to or from Myanmar (formerly Burma) (the “OFAC Disclosure”). At the time of such apparent violations, the Company had a different senior operational management team. Notwithstanding the fact that the apparent violations took place under a different senior operational management team and although the Company’s new Board of Directors and management have implemented robust remedial measures and significantly enhanced its compliance safeguards, there can be no assurance that OFAC will not conclude that these past actions warrant the imposition of civil penalties and/or referral for further investigation by the U.S. Department of


Justice. The report was provided to OFAC for the agency’s review, consideration and determination regarding what action, if any, may be taken in resolution of this matter. The Company will continue to cooperate with the agency regarding this matter and cannot estimate when such review will be concluded. While the ultimate impact of these matters cannot be determined, there can be no assurance that the impact will not be material to the Company’sour financial condition or results of operations, we cannot determine what penalties, if any, will be imposed. We have posted a surety bond as security for any fines, penalties or associated costs that may be issued, and the Company is cooperating fully with the U.S. government in its investigation of this matter. For the nine months ended September 30, 2022 and 2021, the Company incurred and recorded $0.3 million and $2.3 million, respectively, as Other operating expense in the Condensed Consolidated Statements of Operations relating to this incident, which include legal fees, surety bond expenses, vessel off-hire, crew changes and travel costs.
Other Commitments
On July 28, 2011,
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 to charter in a 37,000 dwt newbuilding Japanese vessel that was delivered in October 2014 for seven years with an option for an additional one year. The hire rate for the first to seventh year is $13,500 per day and $13,750 per day for the eighth year option. On May 10, 2017, the Company signed an agreement to cancel this existing time charter contract. The Company agreed to pay a lump sum termination fee of $1.5 million relating to the cancellation. At the same time, the Company entered into an agreement with the same lessor, effective April 28, 2017, to charter incharter-in a 61,400 dwt, 2013 built Japanese vessel for approximately four years (having the same redelivery dates as the aforementioned cancelled charter) with options for two additional years. The hire rate for the first four years is $12,800 per day
F-17

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 and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $5.0 million to reflect the extended lease term. The discount rate utilized in the measurement of the 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 and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $5.1 million to reflect the extended lease term. The discount rate utilized in the measurement of the 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 and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $5.8 million to reflect the extended lease term. The discount rate utilized in the measurement of the 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%. On September 15, 2022, the Company exercised its option to further extend the charter for eleven months at a hire rate of $14,750 per day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $4.5 million to reflect the extended lease term. The discount rate utilized in the measurement of the 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 September 15, 2022 was 6.54%.
(iii) On December 9, 2018, the Company entered into an agreement to charter-in a 62,487 dwt 2016 built Ultramax vessel for two years. The hire rate for the vessel until March 2020 was $14,250 per day and $15,250 per day thereafter. The Company took delivery of the vessel in the fourth quarter of 2018. On December 25, 2019, the Company renegotiated the lease terms for another year at a hire rate of $11,600 per day and accordingly, the Company increased its lease liability and the corresponding right-of-use asset by $4.5 million. During the first quarter of 2021, the Company decided to extend the lease term to its maximum redelivery date allowed under the charter party and accordingly, the Company increased its lease liability and the corresponding right-of-use asset by $1.0 million to reflect the change in lease term from minimum redelivery date to maximum redelivery date allowed under the charter party. On May 4, 2021, the Company exercised its option to extend the charter for another year until July 31, 2022 at a hire rate of $12,600 per day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $4.3 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of May 4, 2021 was 1.38%. On March 17, 2022, the Company further extended the lease to a minimum period of ten months and maximum period of twelve months with an option to further extend the lease for an additional minimum period of ten months and maximum period of twelve months and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $6.9 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of March 17, 2022 was 4.48%.
(iv) On December 22, 2020, the Company entered into an agreement to charter-in a 63,634 dwt 2021 built Ultramax vessel for twelve months with an option for an additional three months at a hire rate of $5,900 per day plus 57% of the BSI 58 average of 10 time charter routes as published by the Baltic Exchange each business day. Additionally, following the initial fifteen month period the Company has an additional option to extend for a period of eleven to thirteen months at an increased rate of $6,500 per day with no change in the rest of the terms. Also, the Company shall share the scrubber benefit with the owners 50% calculated as the price differential between the high sulfur and low sulfur fuel oil based on actual bunker consumption during the lease period. On July 7, 2021, the Company took delivery of the vessel and recorded $9.1 million as lease liability and corresponding right-of-use asset. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of July 7, 2021 was 1.33%. On May 17, 2022, the Company exercised its option to extend the charter for 11 months at a hire rate of $6,500 per day plus 57% of the BSI 58 average of 10 time charter routes as published by the Baltic Exchange each business day and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $7.5 million to reflect the extended lease term. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's
F-18

implied credit rating and the yield curve for debt as of May 17, 2022 was 5.825%.
(v) On September 6, 2021, the Company entered into an agreement to charter-in a 2021 built Ultramax vessel for a period of a minimum of twelve months and a maximum of fifteen months at a hire rate of $11,250 per day plus 57.5% of the BSI 58 average of 10 time charter routes published by the Baltic Exchange each business day. The Company has the option to extend the lease term for another year, during which time the fixed hire rate decreases to $10,750 per day with no change to the remaining terms. On May 17, 2022, the Company took delivery of the vessel and recorded $9.7 million as a lease liability and corresponding right-of-use asset. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating and the yield curve for debt as of May 17, 2022 was 5.825%.
Office leases
On October 15, 2015, the Company entered into a commercial lease agreement as a sublessee for office space in Stamford, Connecticut. The lease is effective from January 2016 through June 2023, with an average annual rent of $0.4 million. The lease is secured by cash collateral of $0.1 million which is recorded as Restricted cash - noncurrent in the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. On September 30, 2022, the Company entered into a lease agreement as the principal tenant to lease the existing office space. The lease is effective from July 1, 2023 through December 31, 2028, with an average annual rent of $0.5 million. The Company recognized a lease liability and corresponding right-of-use asset of $2.2 million. The discount rate utilized in the measurement of the lease liability and the corresponding right-of-use asset based on the Company's implied credit rating as of September 30, 2022 was 8.97%.

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 and accordingly, the Company increased the lease liability and the corresponding right-of-use asset by $1.3 million to reflect the extended lease term. The discount rate utilized in the measurement of the 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 and accordingly, the Company recognized a lease liability and corresponding right-of-use asset of $0.5 million. 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 February 15, 2022 was 5.7%.
The Company determined the three office leases to be operating leases and recorded the lease expense as part of General and administrative expenses in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021.




















F-19

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


DescriptionLocation in Balance Sheet
September 30, 2022 (1)
December 31, 2021 (1)
Noncurrent assets:(In thousands)
Chartered-in contracts greater than 12 monthsOperating lease right-of-use assets$30,281 $15,039 
Office leasesOperating lease right-of-use assets4,087 1,978 
Operating lease right-of-use assets$34,368 $17,017 
Liabilities:
Chartered-in contracts greater than 12 monthsCurrent portion of operating lease liabilities$29,989 $15,039 
Office leasesCurrent portion of operating lease liabilities753 689 
Lease liabilities - current portion$30,742 $15,728 
Chartered-in contracts greater than 12 monthsNoncurrent portion of operating lease liabilities$293 $— 
Office leasesNoncurrent portion of operating lease liabilities3,333 1,282 
Lease liabilities - noncurrent portion$3,626 $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 rates used ranged from 1.33% to 8.97%. The weighted average discount rate used to calculate the lease liability as of September 30, 2022 and December 31, 2021 was 5.9% and 1.7%, respectively.


F-20

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

(In thousands)Three Months EndedNine Months Ended
DescriptionLocation in Statement of OperationsSeptember 30, 2022September 30, 2021September 30, 2022September 30, 2021
Lease expense for chartered-in contracts less than 12 monthsCharter hire expenses$11,759 $5,857 $43,317 $13,512 
Lease expense for chartered-in contracts greater than 12 monthsCharter hire expenses8,013 4,867 20,451 11,862 
Total charter hire expenses$19,772 $10,724 $63,768 $25,374 
Lease expense for office leasesGeneral and administrative expenses$216 $189 $625 $465 
Sublease income from chartered-in contracts greater than 12 months *Revenues, net$8,402 $7,550 $25,072 $14,303 

* The sublease income represents only time charter revenue earned on time charter-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 the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021.

The cash paid for operating leases with terms greater than 12 months was $8.2 million and $21.1 million for the three and nine months ended September 30, 2022, respectively.

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

During the nine months ended September 30, 2022 and 2021, the Company obtained operating lease right-of-use assets of $39.0 million and $22.5 million, respectively, in exchange for operating lease liabilities.

The weighted average remaining lease term on our operating lease contracts greater than 12 months as of September 30, 2022 was 14.8 months.


F-21

The table below provides the total amount of remaining lease payments on an undiscounted basis on our chartered-in contracts and office leases greater than 12 months as of September 30, 2022:

Supplemental Disclosure InformationChartered-in contracts greater than 12 monthsOffice leasesTotal Operating leases
(In thousands)
Year:
Three months ending December 31, 2022$9,306 $216 $9,522 
202321,651 869 22,520 
2024— 874 874 
2025— 871 871 
2026— 871 871 
2027— 574 574 
2028— 500 500 
$30,957 $4,775 $35,732 
Present value of lease liability:
Lease liabilities - short term$29,989 $753 $30,742 
Lease liabilities - long term293 3,333 3,626 
Total lease liabilities$30,282 $4,086 $34,368 
Discount based on incremental borrowing rate$675 $689 $1,364 

Note 8. Loss Per9. Revenue

Voyage charters

In a voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or “dead” freight. The voyage contract generally has standard payment terms of 95% freight paid within three days after completion of loading. The voyage charter party generally has a “demurrage” or “despatch” clause. As per this clause, the charterer reimburses the Company for any delays that exceed the agreed to laytime at the ports visited, with the amounts recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities happen within the allowed laytime which is known as despatch and results in a reduction of revenue. In a voyage charter contract, the performance obligations begin to be satisfied once the vessel begins loading the cargo. The Company determined that its voyage charter contracts consist of a single performance obligation of transporting the cargo within a specified time period. Therefore, the performance obligation is met evenly as the voyage progresses, and the revenue is recognized on a straight-line basis over the voyage days from the commencement of the loading of cargo to completion of discharge.
Voyage charter contracts are considered service contracts which fall under the provisions of ASC 606 because the Company, as the shipowner, retains control over the operations of the vessel such as directing the routes taken or the vessel speed. These contracts generally have variable consideration in the form of demurrage or despatch. The amount of revenue earned as demurrage, net of despatch incurred by the Company for the three and nine months ended September 30, 2022 was $7.8 million and $26.5 million respectively. The amount of revenue earned as demurrage, net of despatch incurred by the Company for the three and nine months ended September 30, 2021 was $8.6 million and $16.8 million, respectively.

F-22

The following table shows the revenues earned from time charters and voyage charters for the three and nine months ended September 30, 2022 and 2021:
Three Months EndedNine Months Ended
(In thousands)September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Time charters$95,132 $91,653 $274,755 $180,386 
Voyage charters90,181 91,740 293,651 229,430 
$185,313 $183,393 $568,406 $409,816 
Contract costs
In a voyage charter contract, the Company bears all voyage related costs such as fuel costs, port charges and canal tolls. These costs are considered contract fulfillment costs because the costs are direct costs related to the performance of the contract and are expected to be recovered. The costs incurred during the period prior to commencement of loading the cargo, primarily bunkers, are deferred as they represent setup costs and are recorded in Other current assets in the Condensed Consolidated Balance Sheets and are amortized on a straight-line basis as the related performance obligations are satisfied. As of September 30, 2022 and December 31, 2021, the Company recognized $0.7 million and $0.5 million, respectively, of deferred costs which represents bunker expenses and charter-hire expenses incurred prior to commencement of loading.


Note 10. Net Income per Common Share
The computation of basic net lossincome per share is based on the weighted average number of common sharesstock outstanding for the three and nine-month periodsnine months ended September 30, 20172022 and September 30, 2016.2021. Diluted net lossincome per share gives effect to restricted stock awards, stock options and restricted stock units and stock options using the treasury stock method, unless the impact is anti-dilutive. DilutedAdditionally, the Convertible Bond Debt is not considered a participating security and therefore not included in the computation of Basic net loss per share as of September 30, 2017 does not include 1,853,637 unvested stock awards, 1,565,906 stock options and 152,266 warrants, as their effect was anti-dilutive. Diluted net loss per share as of September 30, 2016 does not include 26,147 stock awards, 56,987 stock options and 152,266 warrants, as their effect was anti-dilutive.
 Three Months Ended Nine Months Ended
 September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Net loss$(10,255,346) $(19,359,044) $(27,212,260) $(81,133,287)
Weighted Average Shares - Basic70,329,252
 29,607,639
 68,782,517
 11,318,249
Dilutive effect of stock options and restricted stock units—
 —
 —
 —
Weighted Average Shares - Diluted70,329,252
 29,607,639
 68,782,517
 11,318,249
Basic loss per share *$(0.15) $(0.65) $(0.40) $(7.17)
Diluted loss per share *$(0.15) $(0.65) $(0.40) $(7.17)
* As disclosed in "Note.1- Basis of presentation and general information" to the condensed consolidated financial statements, weighted average shares and lossincome per share for the three and nine months ended September 30, 2016 have been restated.2022 and 2021. The Company determined that it does not overcome the presumption of share settlement of outstanding debt and therefore the Company applied the if-converted method and included the potential shares to be issued upon conversion of Convertible Bond Debt in the calculation of Diluted net income per share for the three and nine months ended September 30, 2022 and 2021 as their effect was dilutive. Diluted net income per share for the three and nine months ended September 30, 2022 excluded 17,661 and 8,830 Restricted Stock Units (“RSUs”) related to EPS performance and TSR performance (defined below), respectively, as their effect was anti-dilutive. Additionally, diluted net income per share excluded 7,648 restricted shares for the three and nine months ended September 30, 2022 as their effect was anti-dilutive. Diluted net income per share for the three and nine months ended September 30, 2021 excluded 21,718 warrants and 28,046 restricted shares as their effect was anti-dilutive.
The following table summarizes the calculation of basic and diluted net income per share:
Three Months EndedNine Months Ended
(In thousands, except share and per share data)
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Net income$77,217 $78,341 $224,743 $97,416 
Weighted Average Shares - Basic12,993,450 12,802,401 12,985,329 12,237,288 
Dilutive effect of stock options, shares issuable under Convertible Bond Debt, restricted stock awards and restricted stock units3,208,402 3,133,973 3,233,935 3,117,193 
Weighted Average Shares - Diluted16,201,852 15,936,374 16,219,264 15,354,481 
Basic net income per share$5.94 $6.12 $17.31 $7.96 
Diluted net income per share$4.77 $4.92 $13.86 $6.34 

F-23

Note 9.11. Stock Incentive Plans
On December 15, 2016, the Company’s shareholders approved the 2016 Equity Compensation Plan (the “2016 Plan”) and the Company registered 5,348,613764,087 shares of common stock adjusted for the Reverse Stock Split, which may be issued under the 2016 Plan. The 2016 Plan replacedOn June 7, 2019, the post-emergence Management Incentive Program (the “2014 Plan”)Company's shareholders approved an amendment and no other awards will be granted under the 2014 Plan. Outstanding awards under the 2014 Plan will continue to be governed by the terms of the 2014 Plan until exercised, expired, otherwise terminated, or canceled. As of December 31, 2016, 24,644 shares of common stock were subject to outstanding awards under the 2014 Plan. Under the termsrestatement of the 2016 Plan, awards for upwhich increased the number of shares reserved under the 2016 Plan by an additional 357,142 shares to a maximum of 3,000,0001,121,229 shares may be grantedof common stock. On June 14, 2022, the Company's shareholders approved a second amendment and restatement of the 2016 Plan, which increased the number of shares reserved under the 2016 Plan to any one employee of the Company and its subsidiaries during any one calendar year, and awards in the form of options and stock appreciation rights for upby an additional 300,000 shares to a maximum of 3,000,000 shares may be granted under the 2016 Plan. The total number of1,421,229 shares of common stock with respect to which awards may be granted under the 2016 Plan to any non-employee director during any one calendar year shall not exceed 500,000, subject to adjustment as provided in the 2016 Plan.stock. Any director, officer, employee or consultant of the Company or any of its subsidiaries (including any prospective officer or employee) is eligible to be designated to participate in the 2016 Plan.


The Company withheld shares related to restricted stock awards that vested in 2022 at the fair market value equivalent to the maximum statutory tax withholding obligation and remitted that amount in cash to the appropriate taxation authorities.
On March 1, 2017,February 11, 2022, the Company granted 429,75031,781 restricted shares and 337,000 options as a company wideCompany-wide grant to all employees.under the 2016 Plan. The aggregate fair value of the grant was $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, 2024 and January 2, 2025. Additionally, on March 11, 2022, the Company granted 7,451 shares of fully vested common stock to the non-employee members of the Board of Directors. The aggregate fair value of the director grant was $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 atwith 2-year cliff vesting to a member of its senior management team. The aggregate fair value of the date of grant was $2.3 million. Amortization$0.5 million based on the closing share price of this charge,$63.24 on April 5, 2022. The amortization of the above grants was $0.3 million and $1.3 million for the three and nine months ended September 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 was $1.2 million based on the closing share price of $65.88 on March 11, 2022. The amortization of the above grant was $0.2 million and $0.5 million for the three months and nine months ended September 30, 2017, was $0.3 million and $0.8 million, respectively. For the purposes of determining the stock-based compensation cost for the Company's stock option plan using the fair value method of ASC 718 "Compensation-Stock Compensation", the fair value of the options was estimated on the date of grant using the Black-Scholes option pricing model. The weighted average assumptions used included a risk free interest rate of 1.72%, an expected stock price volatility factor of 63.5% and a dividend rate of 0%. The aggregate fair value of these stock options awards on the date of grant was $0.9 million. Amortization of this charge,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 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 March 31, 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 was $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 September 30, 2022, the Company estimated that the target (100%) will be met and recorded $0.2 million and $0.4 million of stock-based compensation expense, which is included in General and administrative expenses in the Condensed Consolidated Statement of Operations for the three months and nine months ended September 30, 2017,2022, respectively.
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 March 31, 2022). These market-based RSUs will vest in three substantially equal installments (subject to achievement of performance criteria as of December 31, 2022) with the first installment vesting upon certification by the Compensation Committee and the second and third installments on 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 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 seven 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-24

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 and $0.3$0.2 million respectively.of stock-based compensation expense, which is included in General and administrative expenses in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022.


As of September 30, 20172022 and December 31, 2016,2021, stock awards, including RSUs, covering a total of 1,853,637210,049 and 1,413,461246,962 shares of the Company’s common shares,stock, respectively, arewere outstanding under the 2014 Plan and 2016 Plan. The vesting terms range between one toare generally three years from the grant date.date, or as described above in the March 11, 2022 RSU and director stock grants or the April 5, 2022 stock grant. During the three months ended September 30, 2022, 24,369 restricted stock awards vested of which 10,034 were cancelled as a settlement for the liability relating to tax withholding. The Company is amortizing the grant date fair value of non-vested stock awards to stock-based compensation expense included in generalGeneral and administrative expenses the fair value of non-vested stock awards at the grant date.expenses.
As of September 30, 2017 and December 31, 2016,2021, 47,568 vested stock options covering 1,565,906 and 1,942,909 of the Company’s common shares, respectively, arewere outstanding with exercise prices ranging from $4.28$32.97 to $505.00$38.92 per share. TheDuring the nine months ended September 30, 2022, all 47,568 stock options vestwere exercised. In connection with the exercise, 8,077 shares of common stock were issued and become exercisable in four equal installments beginning on39,491 stock options were cancelled as a settlement for the grant date. Allliability relating to tax withholding as well as the exercise price owed to the Company.
As of September 30, 2022 and December 31, 2021, there were no unvested options expire within seven years from the effective date.outstanding.
Stock-based compensation expense for all stock awards, units and options included in General and administrative expenses:
 For the
Three Months Ended
September 30, 2017		For the
Three Months Ended
September 30, 2016		 For the
Nine Months Ended September 30, 2017		For the
Nine Months Ended September 30, 2016
Stock awards /Stock Option Plans$2,350,209
$(734,996) $6,998,960
$933,550
Three Months EndedNine Months Ended
(In thousands)September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Stock awards/Stock Option Plans$1,449 $777 $4,542 $2,235 
The future compensation cost to be recognized for all the grants issued for the three-month periodthree months ending December 31, 2017,2022, and the years ending December 31, 20182023 and 20192024 is expected to be $1.3 million, $2.7 million and $0.8 million, respectively.

Note 12. Cash, Cash Equivalents, and Restricted Cash

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

(In thousands)September 30, 2022December 31, 2021September 30, 2021December 31, 2020
Cash and cash equivalents$195,030 $86,147 $100,012 $69,928 
Restricted cash - current *— — 25,558 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$197,605 $86,222 $125,645 $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 of September 30, 2022, there was an amount paid to secure a bank guarantee related to a dispute with a vendor in the normal course of business included with the Restricted cash - noncurrent balance.
F-25

Note 13. Subsequent Events

On October 27, 2022, the Company's Board of Directors declared a cash dividend of $1.80 per share to be paid on or about November 23, 2022 to shareholders of record at the close of business on November 15, 2022. The aggregate amount of the dividend is expected to be approximately $23.7 million, which the Company anticipates will be $1,907,849, $6,891,228 and $1,258,777, respectively.

funded from cash on hand at the time the payment is to be made.



F-26


ItemITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the Company’s financial condition and results of operations for the three and nine-month periodsnine months ended September 30, 20172022 and 2016.2021. This section should be read in conjunction with the condensed consolidated financial statements included elsewhere in this report and the notes to those financial statements and the audited consolidated financial statements and the notes to those financial statements for the fiscal year ended December 31, 2016,2021, which were included in our Form 10-K, filed with the SEC on March 31, 2017.14, 2022 (the “Form 10-K”). For further discussion regarding our results of operations for the three and nine months ended September 30, 2021 as compared to the three and nine months ended September 30, 2020 please refer to Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2021. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Statement Regarding Forward-Looking Statements.”
Business Overview
We are Eagle Bulk Shipping Inc., (“Eagle” or the “Company”) is a Marshall Islands corporation incorporated on March 23, 2005U.S. based fully integrated shipowner-operator providing global transportation solutions to a diverse group of customers including miners, producers, traders, and headquarteredend users. Headquartered in Stamford, Connecticut. We ownConnecticut, with offices in Singapore and Copenhagen, Eagle focuses exclusively on the versatile mid-size drybulk vessel segment and owns one of the largest fleets of Supramax/Ultramax dry bulk vessels in the world. Supramax dryThe Company performs all management services in-house such as strategic, commercial, operational, technical, and administrative services, and employs an active management approach to fleet trading with the objective of optimizing revenue performance and maximizing earnings on a risk-managed basis. Typical cargoes we transport include both major bulk are vessels which are constructed with on-board cranes, ranging in size from approximately 50,000 to 59,000 dwtcargoes, such as iron ore, coal and Ultramax dry bulk vessels range in size from 60,000 to 65,000 dwt. They are considered a sub-category of the Handymax segment typically defined as 40,000 to 65,000 dwt. We transport a broad range of majorgrain, and minor bulk cargoes including but not limited to coal, grain, ore,such as fertilizer, steel products, petcoke, cement, and fertilizer, along worldwide shipping routes.forest products. As of September 30, 2017,2022, we owned and operated a modern fleet of 4852 Supramax/Ultramax dry bulk vessels. We chartered-in a 37,000 dwt newbuilding Japanese vessel that was delivered in October 2014 for seven years with an option for one additional year. On April 3, 2017, we signed an agreement to cancel this existing time chartered-in contract, and, at the same time, we entered into an agreement to charter-in a 61,400 dwt, 2013 built Japanese vessel for approximately four years (having the same redelivery dates as the aforementioned canceled charter) with options for two additional years.
We are focused on maintaining a high quality fleet that is concentrated primarily in Supramax/five Ultramax dry bulk carriers. These vessels have the cargo loading and unloading flexibility of on-board cranes while offering cargo carrying capacities approaching that of Panamax dry bulk vessels which rangehave a remaining lease term of approximately one year each. In addition, the Company charters in size from 72,000third-party vessels on a short to 83,000 dwt and rely on port facilities to load and offload their cargoes. We believe that the cargo handling flexibility and cargo carrying capacity of the Supramax class vessels make them attractive to cargo interests and vessel charterers. The Company’smedium term basis.
Our owned operating fleet consisted of 48 dry bulktotals 52 vessels, with an aggregate carrying capacity of 2,737,1003.14 million dwt withand an average age of approximately 8.09.9 years as of September 30, 2017.2022.

We carry out the commercial and strategic management of our fleet through our indirectly wholly-owned subsidiary, Eagle Shipping International (USA)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.
On February 28, 2017, Ultraco, a wholly-owned subsidiary of the Company, entered into the Greenship Purchase Agreement with the Greenship Sellers for the purchase of nine Greenship Vessels. The aggregate purchase price for the nine Greenship Vessels is $153.0 million. The allocated purchase price for each Greenship Vessel is $17.0 million. The Company took delivery of all nine of the Greenship Vessels as of September 30, 2017 and consequently completed the acquisition of all vessels as contemplated by the Greenship Purchase Agreement.
On June 28, 2017, Ultraco, a wholly-owned subsidiary of the Company, entered into the Ultraco Debt Facility, by and among Ultraco, as borrower, the Ultraco Guarantors, the Ultraco Lenders, the swap banks party thereto, ABN AMRO Capital USA LLC, as facility agent and security trustee for the Ultraco Lenders, ABN AMRO Capital USA LLC, DVB Bank SE and Skandinaviska Enskilda Banken AB (publ), as mandated lead arrangers, and ABN AMRO Capital USA LLC, as arranger and bookrunner. The Ultraco Debt Facility provides for a multi-draw senior secured term loan facility in an aggregate principal amount of up to the lesser of (i) $61,200,000 and (ii) 40% of the lesser of (1) the purchase price of the Greenship Vessels to be acquired by Ultraco and the Ultraco Guarantors pursuant to a previously disclosed framework agreement, dated as of February 28, 2017, with Greenship Sellers, and (2) the fair market value of the Greenship Vessels. The proceeds of the Ultraco Debt Facility may be used for the purpose of financing, refinancing or reimbursing a part of the acquisition cost of the Greenship Vessels. The outstanding borrowings under the Ultraco Debt Facility bear interest at LIBOR plus 2.95% per annum. The Ultraco Debt Facility also provides for the payment of certain other fees and expenses by Ultraco. Please refer to "Note 5. Debt" to the condensed consolidated financial statements.





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

Business Strategy

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

•Maintain a highly efficient and quality fleet in the drybulk segment.
•Maintain a revenue strategy that takes advantage of a rising rate environment and at the same time mitigate risk in a declining rate environment.
•Maintain a cost structure that allows us to be competitive in all economic cycles without sacrificing safety or maintenance.
•Continue to grow our relationships with our charterers and vendors.
•Continue to invest in our on-shore operations and development of processes.

1



Our financial performance is based on the following key elements of our business strategy:
(1)concentration in one vessel category: Supramax/Ultramax dry bulk vessels, which we believe offer certain size, operational and geographical advantages relative to other classes of dry bulk vessels, such as Handy, Panamax and Capesize vessels,
(2)an
(1)Concentration in one vessel category: Supramax/Ultramax drybulk vessels, which we believe offer certain size, operational and geographical advantages relative to other classes of drybulk vessels, such as Handysize, Panamax and Capesize vessels.

(2)An active owner-operator model where we seek to operate our own fleet and develop contractual relationships directly with cargo interests. These relationships and the related cargo contracts have the dual benefit of providing greater operational efficiencies and act as a balance to the Company’s naturally long position to the market. Notwithstanding the focus on voyage chartering, we consistently monitor the dry bulk shipping market and, based on market conditions, will consider taking advantage of long-term time charters at higher rates when appropriate, and 
(3)maintain high quality vessels and improve standards of operation through improved standards and procedures, crew training and repair and maintenance procedures.
We believe that this structure provides significant visibility to our future financial results and allows us to take advantage of the relatively stable cash flows and high utilization rates that are associated with medium-term time charters, while at the same time providing us with the revenue upside potential from the index-linked or short-term time charters or voyage charters or pool charters. We regularly monitor the dry bulkdrybulk shipping market and, based on market conditions, we maywill consider taking advantage of long-term charter rates.time charters at higher rates when appropriate.

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

We continuously evaluate potential transactions that we believe will be accretive to earnings, enhance shareholder value or are in the best interests of the Company, including without limitation, business combinations, the acquisition of vessels or related businesses, repayment or refinancing of existing debt, the issuance of new securities, share and debt repurchases or other transactions.

Business Outlook

COVID-19

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

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 fleetexpenses, specifically crew change costs, COVID testing and quarantine related costs, continue to be negatively impacted by COVID-19.

Global 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 timeour vessels as well as our onshore offices in Stamford, Connecticut, Singapore, and voyage charters. Copenhagen. However, if the COVID-19 pandemic continues to impact the global economy on a prolonged basis, or if related vaccine availability or efficacy materially decreases, the drybulk market rate environment and our vessel values may deteriorate and our operations and cash flows may be negatively impacted.

The following table representsimpact of recent developments in Ukraine

In February 2022, as a result of the invasion of Ukraine by Russia, economic sanctions were imposed by the United States, the European Union, the United Kingdom and a number of other countries on Russian financial institutions, businesses and individuals, as well as certain information about our revenue earning chartersregions within the Donbas region of Ukraine. This conflict has become a multi-month war and humanitarian crisis. While it is difficult to estimate the impact of the war 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 the region due to these geopolitical events. The Black Sea region is a major export market for grains with the Ukraine and Russia exporting a combined 15% of the global seaborne grain trade. In addition, the volatility of market prices for fuel have increased as a result of related supply disruptions from the war in Ukraine. While uncertainty remains with respect to the ultimate impact of the war, we have seen, and anticipate continuing to see, significant changes in trade flows. A reduction or stoppage of grain out of the Black Sea or cargoes from Russia has, and will continue to, negatively impact the markets in those areas. In addition, increased volatility in fuel prices may increase or decrease the Company’s operations and liquidity. At the same time, we have seen an increase in ton miles as end users find alternative sources for cargo. For more information regarding the risks relating to economic sanctions as a result of Russia’s invasion of Ukraine as well as the impact on retaining and sourcing our operating fleet ascrew, see Part I, Item 1A, “Risk Factors” of September 30, 2017:our Form 10-K.


2

Vessel 
Year
Built
 Dwt 
Charter
Expiration
 
Daily Charter
Hire Rate
 
          
Avocet 2010 53,462
 Nov 2017 Voyage
(1)
          
Bittern 2009 57,809
 Oct 2017 $14,000
 
          
Canary 2009 57,809
 Oct 2017 $16,000
 
          
Cardinal 2004 55,362
 Oct 2017 $8,250
 
          
Condor 2001 50,296
 Nov 2017 $15,000
 
          
Crane 2010 57,809
 Dec 2017 $8,500
(2)
          
Crested Eagle 2009 55,989
 Nov 2017 $12,000
 
          
Crowned Eagle 2008 55,940
 Nov 2017 $2,663
(3)
          
Egret Bulker 2010 57,809
 Oct 2017 Voyage
 



          
Fairfield Eagle 2013 63,301
 Oct 2017 Voyage
 
          
Gannet Bulker 2010 57,809
 Oct 2017 Voyage
 
          
Greenwich Eagle 2013 63,301
 Dec 2017 $2,208
(4)
          
Golden Eagle 2010 55,989
 Nov 2017 $11,750
 
          
Goldeneye 2002 52,421
 Oct 2017 $13,250
 
          
Grebe Bulker 2010 57,809
 Oct 2017 $12,000
 
          
Groton Eagle 2013 63,200
 Nov 2018 $10,250
 
          
Hawk I 2001 50,296
 Nov 2017 Voyage
 
          
Ibis Bulker 2010 57,775
 Nov 2017 $2,114
(5)
          
Imperial Eagle 2010 55,989
 Oct 2017 Voyage
 
          
Jaeger 2004 52,248
 Nov 2017 $13,000
 
          
Jay 2010 57,802
 Oct 2017 Voyage
 
          
Kestrel I 2004 50,326
 Dec 2017 $6,325
 
          
Kingfisher 2010 57,776
 Oct 2017 $9,500
 
          
Madison Eagle 2013 63,303
 Nov 2017 $11,450
 
          
Martin 2010 57,809
 Jan 2018 $13,250
 
          
Merlin 2001 50,296
 Oct 2017 Voyage
 
          
Mystic Eagle 2013 63,301
 Oct 2017 Voyage
 
          
Nighthawk 2011 57,809
 Oct 2017 Voyage
 
          
Oriole 2011 57,809
 Dec 2017 $12,000
 
          
Osprey I 2002 50,206
 Oct 2017 $14,000
 
          
Owl 2011 57,809
 Dec 2017 $10,000
 
          
Petrel Bulker 2011 57,809
 Oct 2017 Voyage
 
          
Puffin Bulker 2011 57,809
 Nov 2017 Voyage
 


          
Roadrunner Bulker 2011 57,809
 Nov 2017 Voyage
 
          
Rowayton Eagle 2013 63,301
 Nov 2017 $16,050
 
          
Sandpiper Bulker 2011 57,809
 Dec 2017 $14,250
 
          
Singapore Eagle 2017 61,530
 Nov 2017 Voyage
 
          
Shrike 2003 53,343
 Nov 2017 $11,000
 
          
Skua 2003 53,350
 Jan 2018 $11,250
 
          
Southport Eagle 2013 63,301
 Nov 2017 $9,750
 
          
Stamford Eagle 2016 61,530
 Nov 2017 $9,850
 
          
Stellar Eagle 2009 55,989
 Nov 2017 $10,250
 
          
Stonington Eagle 2012 63,301
 Nov 2017 $9,500
 
          
Tern 2003 50,200
 Nov 2017 $14,750
 
          
Thrasher 2010 53,360
 Nov2017 Voyage
 
          
Thrush 2011 53,297
 Oct 2017 $7,750
 
          
Westport Eagle 2015 63,344
 Oct 2017 Voyage
 
          
Wren 2008 53,349
 Nov 2017 $12,000
(6)
(1)On August 30, 2017, the Company signed a memorandum of agreement to sell the vessel Avocet for $9.6 million after brokerage commissions and associated selling expenses. The vessel is expected to be delivered to the buyers in the first quarter of 2018.
(2)The vessel is contracted to continue the existing time charter at an increased charter rate of $9,500 after November 12, 2017.
(3)The vessel is contracted to continue the existing time charter at an increased charter rate of $9,250 after November 12, 2017.
(4)The vessel is contracted to continue the existing time charter at an increased charter rate of $12,000 after December 8 , 2017.
(5)The vessel is contracted to continue the existing time charter at an increased charter rate of $8,600 after November 1, 2017.
(6)On June 15, 2017, the Company signed a memorandum of agreement to sell the vessel Wren for $7.6 million after brokerage commissions and associated selling expenses. The vessel is expected to be delivered to the buyers in the fourth quarter of 2017. The Company expects to recognize a gain of $0.05 million.

Fleet Management

The management of our fleet includes the following functions:
•Strategic management. We locate and obtain financing and insurance for the purchase and sale of vessels.
•Commercial management. We obtain employment for our vessels and manage our relationships with charterers.


•Technical management. We have established an in-house technical management function to perform day-to-day operations and maintenance of our vessels.
Commercial and Strategic Management
We carry out the commercial and strategic management of our fleet through our indirectly wholly-owned subsidiaries ofsubsidiary, Eagle Shipping, Eagle Shipping International (USA)Bulk Management LLC, a Marshall Islands limited liability company, Eagle Bulk Pte. Ltd, awhich maintains its principal executive offices in Stamford, Connecticut. We also have offices in Singapore company and Eagle Bulk Europe GmbH, a German Company.Copenhagen, Denmark, through which we provide round the clock management services to our owned and chartered-in fleet. We currently have eighty-four shore based95 shore-based personnel, including our senior management team and our office staff, who either directly or through these subsidiaries, provide the following services:
•commercial operations and technical supervision;
•safety monitoring;
•vessel acquisition; and
•financial, accounting and information technology services.
Technical Management
Technical management includes managing day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory and classification society compliance, supervising the maintenance and general efficiency of vessels, arranging our hire of qualified officers and crew, arranging and supervising drydocking and repairs, purchasing supplies, spare parts and new equipment for vessels, appointing supervisors and technical consultants, and providing technical support.
Value of Assets and Cash Requirements
The replacement costs of comparable new vessels may be above or below the book value of our fleet. The market value of our fleet may be below book value when market conditions are weak and exceed book value when markets conditions are strong. Customary with industry practice, we may consider asset redeployment, which at times may include the sale of vessels at less than their book value. The Company’s results of operations and cash flow may be significantly affected by future charter markets.
Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations is based upon our interim unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC, which apply to interim financial statements. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues, expenses and warrants and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions.
Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. As the discussion and analysis of our financial condition and results of operations are based upon our interim unaudited condensed consolidated financial statements, they do not include all of the information on critical accounting policies normally included in consolidated financial statements. Accordingly, a detailed description of these critical accounting policies should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016,2021, filed with the SEC on March 31, 2017.14, 2022. There have been no material changes from the “Critical Accounting Policies” previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 31, 2017.2021.
Use of Estimates:Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at
3


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 fixedvessels, the value of stock-based compensation, the fair value of operating lease right-of-use assets, and the periodfair value of amortization, asset impairment, and stock-based compensation.derivatives. Actual results could differ from those estimates.

Results of Operations for the three and nine-month periodsninemonths ended September 30, 2017 and 2016:2022:
Fleet Data
We believe that the measures for analyzing future trends in our results of operations consist of the following:


 
Three Months
Ended
 Nine Months Ended
 September 30, 2017September 30, 2016 September 30, 2017September 30, 2016
Ownership Days4,346
3,760
 11,910
11,688
Chartered in Days1,046
394
 2,304
745
Available Days5,223
4,094
 13,872
12,292
Operating Days5,201
4,048
 13,804
12,142
Fleet Utilization (%)99.6%98.9% 99.5%98.8%
Three Months EndedNine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Ownership Days4,831 4,697 14,424 13,407 
Chartered-in Days1,000 563 3,102 1,718 
Available Days5,588 4,931 16,701 14,403 
Operating Days5,574 4,908 16,662 14,308 
Fleet Utilization (%)99.7 %99.5 %99.8 %99.3 %
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 under operating lease days: We define chartered-in under operating lease days as the aggregate number of days in a period during which wethe Company chartered-in vessels. Periodically, the Company charters in vessels on a single trip basis.
•Available days: We define available days which the Company has recently updated and is reflected in the above table to better reflect the way management views the business, as the number of our ownership days and chartered-in days less the aggregate number of days that our vessels are off-hire due to vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys.surveys and other reasons which prevent the vessel from performing under the relevant charter party such as surveys, medical events, stowaway disembarkation, etc. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. During the nine-month periodnine months ended September 30, 2017, the Company drydocked three vessels. During the nine-month period ended September 30, 2016,2022, the Company completed drydocking ofdrydock for eight vessels and one vessel was still in drydocking as of September 30, 2016.
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’scompany'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 RevenueTCE (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 dry bulkdrybulk sector of the shipping industry, rates for the transportation of dry bulkdrybulk cargoes such as ores, grains, steel, fertilizers, and similar commodities, are determined by market forces such as the supply and demand for such commodities, the distance that cargoes must be transported, and the number of vessels expected to be available at the time such cargoes need to be transported. The demand for shipments is significantly affected by the state of the global economy and in discretethe conditions of certain geographical areas. The number of vessels is affected by newbuilding deliveries and by the removal of existing vessels from service, principally because of scrapping. 
4


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 time charter equivalent (“TCE”), which is a non-GAAP measure.

TCE is a non-GAAP financial measure that is commonly used in the shipping industry primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage 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 and charter hire expenses, adjusted for realized gains(losses) on FFAs and bunker swaps, the subtotal of which is divided by the number of owned available days. Owned available days is the number of our ownership days less the aggregate number of days that our vessels are off-hire due to vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues. 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 calculation of TCE may not be comparable to those reported by other companies. The Company calculates relative performance by comparing TCE against the Baltic Supramax Index (“BSI”) adjusted for commissions and fleet makeup.

The following table represents the reconciliation of TCE, a non-GAAP measure, from Revenues, net as recorded in the accompanying Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021.

(In thousands, except owned available days and TCE)For the Three Months EndedFor the Nine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Revenues, net$185,313 $183,393 $568,406 $409,816 
Less:
Voyage expenses(40,792)(30,273)(120,710)(81,411)
Charter hire expenses(19,772)(10,724)(63,768)(25,374)
Reversal of one legacy time charter (1)
— — — (854)
Realized gain/(loss) on FFAs and bunker swaps4,169 (15,338)4,764 (21,395)
$128,918 $127,058 $388,692 $280,782 
Owned available days4,588 4,368 13,599 12,685 
TCE$28,099 $29,088 $28,582 $22,135 
(1) Represents revenues, net of voyage and charter hire expenses associated with a 2014 charter-in vessel that is not representative of the Company’s current performance.

Net income
For the three months ended September 30, 2022, the Company reported net income of $77.2 million, or basic and diluted income of $5.94 per share and $4.77 per share, respectively. In the comparable quarter of 2021, the Company reported net income of $78.3 million, or basic and diluted income of $6.12 per share and $4.92 per share, respectively.
For the nine months ended September 30, 2022, the Company reported net income of $224.7 million, or basic and diluted income of $17.31 per share and $13.86 per share, respectively. In the comparable period of 2021, the Company reported net income of $97.4 million, or basic and diluted income of $7.96 per share and $6.34 per share, respectively.
Revenues
Our revenues are derived from time and voyage charters. As is commonNet time and voyage charter revenues for the three months ended September 30, 2022 were $185.3 million compared with $183.4 million recorded in the shipping industry, we pay commissions ranging from 1.25%comparable quarter in 2021. Net time and
5


voyage charter revenues increased $21.8 million due to 5.50%an increase in available days driven by an increase in owned days and chartered-in days, partially offset by a decrease of the total daily$19.9 million due to lower charter hire rate of each charter to unaffiliated ship brokers associated with the charterers, depending on the number of brokers involved with arranging the charter.rates.
Net time and voyage charter revenues in the quarter ended September 30, 2017 were $62,710,903 compared with $35,788,181 recorded in the comparable quarter in 2016. The increase in revenue was attributable to the improving dry bulk market resulting in


higher charter rates and greater number of freight voyages performed as well as an increase in available days due to an increase in owned fleet and chartered in vessels. Our fleet utilization increased from 98.9% to 99.6% for the three months ended September 30, 2017 as compared to the three months ended September 30, 2016, due to better vessel performance and lower off hire days.
Net revenues during the nine-month periods ended September 30, 2017 and 2016 were $162,197,184 and $82,656,903, respectively. The increase in revenue was attributable to a higher number of freight voyages performed and higher time charter rates as well as an increase in the available days due to an increase in our owned fleet as well as chartered in vessels. Our fleet utilization increased from 98.8% to 99.5% for the nine months ended September 30, 2017 as compared2022 and 2021 were $568.4 million and $409.8 million, respectively. Net time and voyage charter revenues increased $80.4 million due to the nine months ended September 30, 2016. higher charter rates and increased $78.2 million due to an increase in available days driven by increases in owned days and chartered-in days.
Voyage Expensesexpenses
To the extent that we employ our vessels on voyage charters, we will incur expenses that include bunkers, port charges, canal tolls and cargo handling operations, as these expenses are borne by the vessel owner on voyage charters. As is common in the shipping industry, we pay commissions ranging from 1.25% to 5.50% to unaffiliated ship brokers associated with the charterers, depending on the number of brokers involved with arranging the charter. Bunkers, port charges, and canal toll expensestolls primarily increase in periods during which vessels are employed on voyage charters because these expenses are for the vessel'svessel owner's account.
Voyage expenses for the three-month periodthree months ended September 30, 20172022 and 2021 were $17,462,699,$40.8 million and $30.3 million, respectively. Voyage expenses increased primarily due to an increase in bunker consumption expense of $10.1 million driven by an increase in bunker fuel prices.
Voyage expenses for the nine months ended September 30, 2022 and 2021 were $120.7 million and $81.4 million, respectively. Voyage expenses increased primarily due to an increase in bunker consumption expense of $29.1 million driven by an increase in bunker fuel prices, an increase in port expenses of $8.5 million driven by an increase in fuel surcharges and cost inflation and an increase in broker commissions of $1.7 million driven by an increase in related revenues.
Vessel operating expenses
Vessel operating expenses for the three months ended September 30, 2022 were $33.1 million compared to $11,207,959$28.1 million in the comparable quarter in 2016. The increase was mainly attributable2021. Vessel operating expenses increased primarily due to an increase in the numberrepair costs of freight voyages in the current quarter compared to the comparable quarter in the prior year as reflected in the table above as well as increased bunker prices year over year.
Voyage expenses for the nine-month periods ended September 30, 2017$3.1 million driven by discretionary upgrades and 2016 were $44,195,710certain unscheduled necessary repairs, and $27,902,155, respectively. The increase in voyage expenses was mainly attributable to an increase in the numbercrewing costs of freight voyages performed in the current year compared$2.1 million driven by crew changes and expenses related to the prior year as well as increased bunker prices year over year.
Vessel Expenses
Vessel expenses for the three-month period ended September 30, 2017 were $20,110,123 compared to $17,707,959 in the comparable quarter in 2016. The increase in vessel expenses is attributable to the increase in the owned fleet after the acquisition of eleven Ultramax vessels including the Greenship Vessels which was partially offset by vessel sales in the years 2016 and 2017. The Company sold the vessels Harrier and Kittiwake in 2016, the Redwing in the first quarter of 2017, the Sparrow in the second quarter of 2017COVID-19 and the Woodstarwar in the third quarter of 2017.Ukraine. The ownership days for the three-month periodsthree months ended September 30, 20172022 and September 30, 20162021 were 4,3464,831 and 3,760,4,697, respectively.
Vessel operating expenses for the nine-month periodsnine months ended September 30, 20172022 and September 30, 20162021 were $57,374,444$88.2 million and $56,783,181,$73.3 million, respectively. The increase in vesselVessel operating expenses is attributableincreased primarily due to an increase in ownership dayscrewing costs of $7.8 million driven by crew changes and expenses related to COVID-19 and the acquisition of ten Ultramax vesselswar in Ukraine, an increase in the current yearcost of lubes, stores and one Ultramax vesselspares of $3.1 million driven by cost inflation and an increase in the fourth quarterrepair costs of 2016, offset$2.4 million driven by vessel sales.discretionary upgrades and certain unscheduled necessary repairs. The ownership days for the nine months ended September 30, 20172022 and 2021 were 11,910 compared to 11,688 in the comparable period in the prior year.
We believe daily vessel operating expenses are a good measure for comparative purposes over a 12-month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. 
Average daily vessel operating expenses for our fleet for the three-month periods ended September 30, 201714,424 and September 30, 2016 were $4,627 and $4,710, respectively.
Average daily vessel operating expenses for our fleet for the nine-month periods ended September 30, 2017 and September 30, 2016 were $4,817 and $4,858,13,407, respectively.
Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores and related inventory, tonnage taxes, pre-operating costs associated with the delivery of acquired vessels, including providing the newly acquired vessels with initial provisions and stores, and other miscellaneous expenses.
Under United States Federal law and 33 CFR, Part 151, Subpart D (the "BWMS Law"), United States approved BWMS will be required to be installed in all vessels at the first out of water drydocking after January 1, 2016 if these vessels are to discharge ballast water inside 12 nautical miles of the coast of the United States. An Alternative Management System (“AMS”) may be installed in lieu of a USCG approved BWMS. An AMS is valid for five years from the date of required compliance with ballast water discharge standards, by which time it must be replaced by an approved system unless the AMS itself achieves approval.



The BWMS Law allows the USCG to grant compliance date extensions to an owner/operator who has documented, despite all efforts, that compliance with one of the approved BWMS is not possible. The Company has requested and the USCG has granted extensions for our vessels with 2016, 2017, and 2018 drydocking deadlines, including the relevant Greenship Vessels. The USCG extensions enable us to defer installation on all of our vessels to early 2019 and through 2022. The Company estimates the cost of the systems to be $0.8 million for each Supramax/Ultramax vessel.

Other factors beyond our control, some of which may affect the shipping industry in general, may cause vesselthe 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-month periodthree months ended September 30, 20172022 were $9,652,468$19.8 million compared to $3,822,456$10.7 million in the comparable quarter in 2016. The increase in charter2021. Charter hire expense was principallyexpenses increased $8.3 million primarily due to an increase in chartered-in days and increased $0.7 million due to an increase in charter hire rates due to improvement in the number of chartered in vessels as we expand on our owner-operator platform. The Company chartered in a 63,000 dwt Ultramax vessel in March 2017 for a period of nine to fourteen months. In addition, the Company chartered in vessels on a short-term basis as needed.charter hire market. The total chartered inchartered-in days for the three-month periodthree months ended September 30, 20172022 were 1,0461,000 compared to 394563 for the comparable quarter in the prior year. Between 2017 and 2021, the Company entered into a series of agreements to charter five Ultramax vessels on a long term basis. The minimum chartered-in periods ranged between one and four years with an option to extend the duration between three and 24 months. All five vessels were chartered-in as of September 30, 2022.
6


The charter hire expenses for the nine-month periodnine months ended September 30, 20172022 and 2021 were $19,971,380 compared to $6,979,213 in the comparable period in the prior year. The increase in charter$63.8 million and $25.4 million, respectively. Charter hire expenses is mainlyincreased $20.4 million primarily due to an increase in charteredchartered-in days and increased $18.0 million due to an increase in vessels.charter hire rates due to improvement in the charter hire market. The total chartered inchartered-in days for the nine-month periodnine months ended September 30, 20172022 and 2021 were 2,304 compared to 745 in the prior year comparable period.3,102 and 1,718, respectively.
Depreciation and Amortizationamortization
For
Depreciation and amortization for the three-month periodsthree months ended September 30, 20172022 and 2016, total depreciation2021 was $15.4 million and $13.6 million, respectively. Depreciation and amortization expense was $8,980,992 and $9,854,228, respectively. Total depreciation and amortization expense for the three-month periodthree months ended September 30, 20172022 includes $7,897,785$11.9 million of vessel and other fixed assets depreciation and $3.5 million of deferred drydock costs amortization. Comparable amounts for the three months ended September 30, 2021 were $11.4 million of vessel and other fixed assets depreciation and $2.2 million of deferred drydock costs amortization. Depreciation and amortization increased $1.3 million due to the impact of thirteen drydocks completed since the third quarter of 2021 and increased $0.5 million due to an increase in the cost base of our owned fleet due to the capitalization of BWTS on our vessels and the acquisition of three vessels in the second half of 2021, offset in part by the sale of one vessel in the third quarter of 2022.
Depreciation and amortization for the nine months ended September 30, 2022 and 2021 was $45.2 million and $39.2 million, respectively. Depreciation and amortization for the nine months ended September 30, 2022 includes $35.5 million of vessel and other fixed asset depreciation and $1,083,207 relating to the amortization$9.7 million of deferred drydocking costs.drydock costs amortization. Comparable amounts for the three-month periodnine months ended September 30, 20162021 were $8,912,311$33.0 million of vessel and other fixed asset depreciation and $941,917 of amortization$6.2 million of deferred drydocking costs. The decreasedrydock costs amortization. Depreciation and amortization increased $3.5 million due to the impact of 13 drydocks completed since the third quarter of 2021 and increased $2.6 million due to an increase in depreciation expense is attributablethe cost base of our owned fleet due to the acquisition of nine vessels in 2021 and the capitalization of BWTS on our vessels, offset in part by the sale of five vessels during 2016 and 2017 and lower book value of vessels subsequent to the impairment charges aggregating $129,027,862 recordedone vessel in the first and fourth quarters of 2016 offset by the purchase of eleven new Ultramax vessels between fourththird quarter of 20162021 and 2017. The amortization of drydock expense remained flat in the current quarter compared to the comparable quarter in the prior year.
For the nine-month periods ended September 30, 2017 and 2016, total depreciation and amortization expense was $24,494,397 and $28,905,058, respectively. Total depreciation and amortization expense for the nine-month period ended September 30, 2017 includes $21,436,051 of vessel and other fixed assets depreciation and $3,058,346 relating to the amortization of deferred drydocking costs. Comparable amounts for the nine-month period ended September 30, 2016 were $26,573,461 of vessel and other fixed asset depreciation and $2,331,597 of amortization of deferred drydocking costs. The decrease in depreciation expense is attributable to the sale of seven vessels during 2016 and 2017 and lower book value of vessels subsequent to the impairment charges amounting to $129,027,862, which were recordedone vessel in the first and fourth quarters of 2016, partially offset by the purchase of eleven new Ultramax vessels between fourththird quarter of 2016 and 2017.2022.
The cost of all vessels is depreciated on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of the vessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard to the original owner. Furthermore, we estimate the residual values of our vessels to be $300 per lightweight ton, which we believe is common in the dry bulkdrybulk shipping industry. Drydocking relates to our regularly scheduled maintenance program necessary to preserve the quality of our vessels as well as to comply with international shipping standards and environmental laws and regulations. Management anticipates that vessels are to be drydocked every two and a half years for vessels older than 15 years and every five years for vessels younger than 15 years, accordingly, these expenses are deferred and amortized over that period.




these respective periods.
General and Administrative Expensesadministrative expenses
Our general and administrative expenses include onshore vessel administration related expenses, such as legal and professional expenses, and administrative and other expenses including payroll and expenses relating to our executive officers and office staff, office rent and expenses, directors’ fees, and directors and officers insurance. General and administrative expenses also include non-cashstock-based compensation expenses. 
General and administrative expenses for the three-month periodsthree months ended September 30, 20172022 and 20162021 were $8,620,938$9.7 million and $5,223,782,$7.9 million, respectively. General and administrative expenses include stock-based compensation of $1.4 million and $0.8 million for the three months ended September 30, 2022 and 2021, respectively. General and administrative expenses increased $0.7 million due to higher stock-based compensation expense and increased $0.5 million due to an increase in compensation and benefits.
General and administrative expenses for the nine months ended September 30, 2022 and 2021 were $29.6 million and $23.6 million, respectively. These general and administrative expenses include a non-cash compensation component of $2,350,209 and a credit of $734,996 for 2017 and 2016, respectively. The increase in general and administrative expenses was mainly attributable to increases in compensation expense, and stock-based compensation expense. The generalof $4.5 million and administrative expenses$2.2 million for the three-month periodnine months ended September 30, 2016 included the reversal of approximately $1.4 million of stock-based compensation expense relating to the forfeited stock awards granted to the former Chief Financial Officer. The increases are reflective of the expansion of our owner-operator platform2022 and the opening of Eagle Bulk Europe GmbH in the third quarter of 2016.
2021, respectively. General and administrative expenses for the nine-month periods ended September 30, 2017 and 2016 were $24,989,738 and $15,429,844, respectively. These general and administrative expenses include aincreased $2.3 million due to higher stock-based compensation component of $6,998,960 and $933,550 for 2017 and 2016, respectively. The increase in general and administrative expenses was primarilyexpense, increased $1.7 million due to an increase in compensation and benefits, and increased $1.0 million due to higher professional fees.
Other operating expense
Other operating expense advisers'for the three months ended September 30, 2022 and 2021 was $2.5 million and $0.8 million, respectively. Other operating expense for the three months ended September 30, 2022 was primarily comprised of costs associated with a corporate transaction that did not materialize. Other operating expense for the three months ended September 30, 2021 was primarily comprised of costs incurred relating to a 2021 U.S. government investigation into 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
7


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 stock-based compensation expense. As discussed above, the general and administrative expensestravel costs.
Other operating expense for the nine month periodmonths ended September 30, 2016 included the reversal of approximately $1.42022 and 2021 was $2.6 million of stock-based compensation expense relating to the forfeited stock awards granted to the former Chief Financial Officer.
Interest Expense
Our interestand $2.3 million, respectively. Other operating expense for the three-month periods endingnine months ended September 30, 2017 and 20162022 was $7,836,999 and $7,434,156, respectively. The increase in interest expense is primarily due to interest expense on the Ultraco Debt Facility,
Our interestcomprised of costs associated with a corporate transaction that did not materialize. Other operating expense for the nine-month periods endingnine months ended September 30, 20172021 was primarily comprised of costs incurred relating to a 2021 U.S. government investigation into 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 2016penalties. 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.
Interest expense
Interest expense for the three months ended September 30, 2022 and 2021 was $21,140,746$4.2 million and $15,154,659,$8.5 million, respectively. The increase in interestInterest expense is primarilydecreased $1.4 million due to lower effective interest rates and decreased $1.4 million due to lower outstanding principal balances, each as a result of the refinancing of the Company’s debt in the fourth quarter of 2021 and decreased $1.4 million due to lower amortization of debt discounts and deferred financing costs primarily as a result of the Company’s adoption of ASU 2020-06.
Interest expense for the nine months ended September 30, 2022 and 2021 was $13.0 million and $25.6 million, respectively. Interest expense decreased $4.6 million due to lower outstanding principal balances and decreased $4.4 million due to lower effective interest rates, each as a result of the refinancing of the Company’s debt in the fourth quarter of 2021 and decreased $3.8 million due to lower amortization of debt discounts and deferred financing costs primarily as a result of the Company’s adoption of ASU 2020-06.

The Company entered into interest rate swaps in October 2021 to fix the interest expenserate exposure on the Global Ultraco Debt Facility payment-in-kindterm loan. As a result of these swaps, which average 87 basis points, the Company’s interest on our Second Lien Facility and higher amortization of deferred financing costs and debt discount.Therate exposure is fully fixed insulating the Company from the rising interest expense for the nine-month period ending September 30, 2016 included only six months of payment-in-kind interest expense and amortization of deferred financing costs because the Second Lien Facility was closed on March 30, 2016. rate environment.

Amortization of debt issuance costs is included in interest expense. These financing costs relate to costs associated with the First Lien Facility, the Second Lien Facility, Ultraco Debt Facility and Exit Financing Facility. The Company paid $3,067,647 during 2016 in connection with the First Lien Facility and the Second Lien Facility and $6,575,000 during 2014 for the Exit Financing Facility, which is recorded asour various outstanding debt issuance costs that amortize over the term of the related loan. The Company incurred $1,493,000 of debt issuance costs in connection with the Ultraco Debt Facility out of which $575,000 is included in other accrued liabilities. In addition, in the first quarter of 2016, the Company issued shares of common stock to the Second Lien Lenders, the fair value of which was determined to be $17.8 million which was also recorded as debt discount and amortized over the term of the Second Lien Facility.facilities. For the three-month periodsthree months ended September 30, 20172022 and 2016,2021, the amortization of debt issuance costs was $1,656,197$0.5 million and $2,292,545,$2.0 million, respectively. For the nine-month periodsnine months ended September 30, 20172022 and 2016,2021, the amortization of debt issuance costs was $4,558,145$1.6 million and $3,092,193,$5.4 million, respectively.
Refinancing Expenses
Refinancing charges Interest expense for the nine-month periodsthree and nine months ended September 30, 20172021 includes $1.1 million and 2016 were none$3.2 million, respectively, of 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 and $5,869,025, respectively. These costs primarily relatetherefore, as of January 1, 2022, the Convertible Bond Debt no longer requires bifurcation and separate accounting of an equity component. Refer to Note 2, Recent Accounting Pronouncements, to the professional fees incurredcondensed consolidated financial statements for further information.

Realized and unrealized (gain)/loss on derivative instruments, net
Realized and unrealized gain on derivative instruments, net for the three months ended September 30, 2022 was $11.3 million compared to a realized and unrealized loss on derivative instruments, net of $9.0 million for the three months ended September 30, 2021. The $11.3 million gain is primarily related to $14.3 million in connection withgains earned on our freight forward agreements as a result of the refinancing transaction, whichdecrease in charter hire rates during the third quarter, offset by $3.0 million in bunker swap losses for the three months ended September 30, 2022. For the three months ended September 30, 2021, the Company had $9.4 million in losses on our freight forward agreements due to the sharp increase in charter hire rates during the third quarter of 2021, offset by $0.4 million in bunker swap gains.
Realized and unrealized gain on derivative instruments, net for the nine months ended September 30, 2022 was closed$13.3 million compared to a realized and unrealized loss on Marchderivative instruments, net of $45.6 million for the nine months ended September 30, 2016.2021. The $13.3 million gain is primarily attributable to $9.4 million in gains earned on our freight forward agreements as a result of the decrease in charter hire rates during 2022 and $3.9 million in bunker swap gains for the nine months ended September 30, 2022. For the comparable period in the prior year, the Company had $47.9 million in losses on our freight forward agreements due to the sharp increase in charter hire rates in 2021, offset by $2.3 million in bunker swap gains. Refer to Note 5, Derivative Instruments, to the condensed consolidated financial statements for further information.

8


Loss on debt extinguishment
Loss on debt extinguishment for the three and nine months ended September 30, 2022 and 2021 was $4.2 million and $0.1 million, respectively. During the three months ended September 30, 2022, the Company repurchased $10.0 million in aggregate principal amount of Convertible Bond Debt for $14.2 million in cash and cancelled the repurchased debt. Accordingly, a $4.2 million loss on debt extinguishment was recorded in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2022.
Effects of Inflation
We do not believeThe Company believes that its business benefits during periods of elevated inflation has had or is likely,and positive demand growth, as higher charter rates, and net revenues, more than offset increases in the foreseeable future,costs relating to have a significant impact on vessel operating expenses, drydocking, expenses orand general and administrative expenses.

administrative.


Liquidity and Capital Resources
 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
Net cash provided by/(used in) operating activities$1,482,685
 $(40,092,760)
Net cash (used in)/provided by investing activities(155,787,630) 12,411,444
Net cash provided by financing activities142,112,003
 101,353,950
    
(Decrease)/increase in cash and cash equivalents(12,192,942) 73,672,634
Cash and cash equivalents, beginning of period76,516,110
 24,896,161
    
Cash and cash equivalents, end of period$64,323,168
 $98,568,795
Nine Months Ended
(In thousands)September 30, 2022September 30, 2021
Net cash provided by operating activities$242,491 $120,915 
Net cash provided by/(used in) investing activities4,090 (106,767)
Net cash (used in)/provided by financing activities(135,198)22,648 
Net increase in cash, cash equivalents and restricted cash111,383 36,796 
Cash, cash equivalents and restricted cash at beginning of period86,222 88,849 
Cash, cash equivalents and restricted cash at end of period$197,605 $125,645 
Net cash provided by operating activities during the nine-month periodnine months ended September 30, 20172022 and 2021 was $1,482,685$242.5 million and $120.9 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 provided by investing activities during the nine months ended September 30, 2022 was $4.1 million compared to net cash used in operatinginvesting activities duringof $106.8 million for the nine-month periodnine months ended September 30, 2016,2021. During the nine months ended September 30, 2022, the Company received proceeds from the sale of $40,092,760.one vessel for net proceeds of $14.9 million. The proceeds were offset by cash flows from operating activities improved overpaid totaling $5.7 million for the prior year primarily duepurchase of ballast water treatment systems on our fleet and the Company paid $4.1 million as an advance for the purchase of one vessel to an increase in charter hire rates because of an improvementbe delivered in the dry bulk market, partially offset byfourth quarter of 2022. Additionally, the higher working capital requirement dueCompany paid $0.8 million for vessel improvements and $0.3 million for other fixed assets. Refer to Note 3, Vessels, to the change in the Company's business strategy to become an active owner-operator as well as due to an increase in the Company's owned fleet.condensed consolidated financial statements for further information.
Net cash used in investingfinancing activities during the nine-month periodnine months ended September 30, 20172022 was $155,787,630,$135.2 million compared withto net cash provided by investing activities of $12,411,444 during the corresponding nine-month period ended September 30, 2016. The increase in cash used by investing activities relates to the purchase of ten Ultramax vessels for $174 million partially offset by proceeds from sale of vessels of $18.4 million. Please refer to "Note 4. Vessels" to the condensed consolidated financial statements. The net cash provided by investing activities in the comparable period in the prior year primarily relates to proceeds from sale of vessels.
Net cash provided by financing activities duringof $22.6 million for the nine-month periodnine months ended September 30, 2017 was $142,112,003 compared with $101,353,950 during2021. During the corresponding nine-month periodnine months ended September 30, 2016. The2022, the Company received net proceeds of $96.0repaid $37.4 million in the December Private Placement, which closed on January 20, 2017 and repaid $9,200,000 of its term loan under the First Lien Facility from the proceeds of the sale of the vessels Redwing, Sparrow and Woodstar. Additionally, the Company also repaid $5,000,000 of the revolving credit facility under the First Lien Facility from cash generated from operations during the third quarter of 2017. The Company received $40.0 million from theGlobal Ultraco Debt Facility in the second quarter of 2017 and an additional $21.2 million in the third quarter of 2017 and paid $0.9 million of financing costs. In the first quarter of 2016, the Company received proceeds of $60.0 million from the Second Lien Facility and repaid $15.6 million of its term loan and $30.2 million of its revolver loan under the Exit Financing Facility as part of the debt restructuring transaction, which closed on March 30, 2016. The Company paid $2.9 million as deferred financing costs relating to the restructuring transaction.Facility. The Company also receivedpaid $81.6 million in dividends, $14.2 million to repurchase a portion of our Convertible Bond Debt, and $2.4 million to settle net proceeds of $85.7 million from the private placement of common stock in the third quarter of 2016. share equity awards.
Our principal sources of funds are operating cash flows, long-term bank borrowings and borrowings under our revolving credit facility. Our principal use of funds is capital expenditures to establish and grow our fleet, maintain the quality of our vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and repayments ofrepay interest and principal on our outstanding loan facilities.
Summary of Liquidity and Capital Resources
First Lien Facility
On MarchAs of September 30, 2016, Eagle Shipping,2022, our cash and cash equivalents including restricted cash was $197.6 million, compared to $86.2 million at December 31, 2021. The Company had restricted cash of $2.6 million and $0.1 million as borrower,of September 30, 2022 and certainDecember 31, 2021, respectively.
9


In addition, as of its subsidiaries that were guarantorsSeptember 30, 2022, we had $100.0 million in an undrawn revolver facility available under the Global Ultraco Debt Facility.
As of September 30, 2022, the Company’s debt consisted of the Exit FinancingGlobal Ultraco Debt Facility as guarantors, entered intoof $250.2 million, net of $7.2 million of debt issuance costs, and the A&R First Lien Loan Agreement with the First Lien LendersConvertible Bond Debt of $104.1 million, net of $0.7 million of debt discount and ABN AMRO Capital USA LLC, as agent and security trustee for the lenders. The A&R First Lien Loan Agreement amended and restated the Exit Financing Facility in its entirety, provided for Eagle Shipping to be the borrower in the placeissuance costs. As of September 30, 2022, the Company was in compliance with all applicable financial covenants under the Global Ultraco Debt Facility.
During September 2022, the Company repurchased $10.0 million in aggregate principal amount of Convertible Bond Debt for $14.2 million in cash and further provided for a waivercancelled the repurchased debt. The related amount of anyConvertible Bond Debt was not converted by the holders and all events of default occurringno common shares were issued as a result of the voluntary OFAC Disclosure.repurchase transactions. The A&R First Lien Loan Agreement provides for a term loan which was outstanding as of March 30, 2016, in therelated amount of $201,468,750 after giving effect toConvertible Bond Debt would have converted into 296,990 common shares (assuming the entry into the A&R First Lien Loan Agreement and the Second Lien Loan Agreementconversion occurred as well as a $50,000,000 revolving credit facility, of which $10,000,000 was undrawn as of March 30, 2016. The First Lien Facility matures on October 15, 2019. An aggregate fee of $600,000 was paid to the agent and First Lien Lenders in connection with the First Lien Facility.


As of September 30, 2017, Eagle Shipping’s total availability2022). From time to time, the Company may, subject to market condition and other factors and to the extent permitted by law, opportunistically repurchase the Convertible Bond Debt in the revolving credit facility under the First Lien Facility was $30,000,000.
Please refer to "Note 5. Debt" to the condensed consolidated financial statements.
Second Lien Facility
On March 30, 2016, Eagle Shipping, as borrower, and certain of its subsidiaries that were guarantors of the Company’s obligations under the Exit Financing Facility, as guarantors, entered into the Second Lien Loan Agreement with the Second Lien Lenders and the Second Lien Agent. The Second Lien Lenders include certain of the Company’s existing shareholders as well as other investors. The Second Lien Loan Agreement provides for a term loan in the amount of $60,000,000 and matures on January 14, 2020 (91 days after the original stated maturity of the First Lien Facility). The term loan under the Second Lien Facility bears interest at a rate of LIBOR plus 14.00% per annum (with a 1.0% LIBOR floor)open market or the Base Rate (as defined in the Second Lien Loan Agreement) plus 13.00% per annum, paid in kind quarterly in arrears. Eagle Shipping used the proceeds from the Second Lien Facility to pay down $30,158,500, a portion of the amount outstanding in respect of the revolving credit facility under the First Lien Facility, pay three quarters of amortization payments under the First Lien Facility, pay transaction fees in connection with the entry into the A&R First Lien Loan Agreement and the Second Lien Loan Agreement, maintain a minimum liquidity of $8,140,000 and add cash to its balance sheet.
Please refer to "Note 5. Debt" to the condensed consolidated financial statements.
Ultraco Debt Facility
On June 28, 2017, Ultraco, a wholly-owned subsidiary of the Company, entered into the Ultraco Debt Facility, by and among Ultraco, as borrower, the UltracoGuarantors, the UltracoLenders, the swap banks party thereto, ABN AMRO Capital USA LLC, as facility agent and security trustee for the Ultraco Lenders, ABN AMRO Capital USA LLC, DVB Bank SE and Skandinaviska Enskilda Banken AB (publ), as mandated lead arrangers, and ABN AMRO Capital USA LLC, as arranger and bookrunner. The Ultraco Debt Facility provides for a multi-draw senior secured term loan facility in an aggregate principal amount of up to the lesser of (i) $61,200,000 and (ii) 40% of the lesser of (1) the purchase price of nine Greenship Vessels to be acquired by Ultraco and the Ultraco Guarantors pursuant to a previously disclosed framework agreement, dated as of February 28, 2017, with the Greenship Sellers, and (2) the fair market value of the Greenship Vessels. The proceeds of the Ultraco Debt Facility may be used for the purpose of financing, refinancing or reimbursing a part of the acquisition cost of the Greenship Vessels. The outstanding borrowings under the Ultraco Debt Facility bear interest at LIBOR plus 2.95% per annum. The Ultraco Debt Facility also provides for the payment of certain other fees and expenses by Ultraco.

Please refer to “Note 5. Debt” to the condensed consolidated financial statements.through privately negotiated transactions.
We believe that our current financial resources, together withimproved charter hire rates for the undrawn revolving credit facilitybalance of the year and cash generated from operations will be sufficient to meet our ongoing business needs and other obligations over the next twelve months. OurHowever, our ability to generate sufficient cash depends on many factors beyond our control including, among other things, continuing to improve the profitability of its operations and future cash flows, which contemplates an improvement ingeneral charter rates. 
As of September 30, 2017, our cash and cash equivalents balance was $64,323,168, compared to a cash and cash equivalents balance of $76,516,110 at December 31, 2016. Also recorded as restricted cash is an amount of $74,917, which collateralizes letters of credit relating to our office leases. 
As of September 30, 2017, the Company’s debt consisted of $194,899,000 in term loans under the First Lien Facility, net of $3,465,859 of debt discount and deferred financing costs, the Second Lien Facility of $75,077,715, net of $12,536,970 of debt discount and deferred financing costs and the Ultraco Debt Facility of $61,200,000, net of $1,415,325 of debt discount and deferred financing costs.rate environment.
Capital Expenditures
Our capital expenditures relate to the purchase of vessels and capital improvements to our vessels, which are expected to enhance the revenue earning capabilities and safety of thesethe vessels.
In addition to acquisitions that we may undertake in future periods, the other major capital expenditures include funding the Company’s program of regularly scheduled drydocking, which is necessary to comply with international shipping standards and


environmental laws and regulations. Although the Company has some flexibility regarding the timing of its drydocking, the costs are relatively predictable. The Company anticipates that vessels are towill be drydocked every five years for vessels younger than 15 years and every two and a half years for vessels older than 15 years, accordingly,years. We anticipate that we will fund these expenses will be deferred and amortized over that period. Funding of these requirements is anticipated to be metcosts with cash from operations. We anticipateoperations and that this process of recertificationthese drydocks will require us to reposition these vessels from a discharge port to shipyard facilities, which will reduce our available days and operating days during that period.
Drydocking costs incurred are deferred and amortized to expense on a straight-line basis over the period through the date of the next scheduled drydocking for those vessels. InDuring the nine-month periodnine months ended September 30, 2017, three2022, eight of our vessels completed drydock and we incurred drydocking expenditures of $2,772,678.$18.5 million. In the nine-month periodnine months ended September 30, 2016, eight2021, six of our vessels were drydocked,completed drydock and we incurred drydocking expenditures of $3,715,179 in drydocking related costs. $10.7 million.
The following table represents certain information about the estimated costs for anticipated vessel drydockings, ballast water treatment systems, and scrubber installations in the next four quarters, along with the anticipated off-hire days:
Projected Costs (1) (in millions)
Quarter Ending
Off-hire Days(2)
BWTSDrydocks
Vessel Upgrades(3)
December 31, 2022177 $0.3 $1.5 $— 
March 31, 2023233 $0.1 $5.4 $0.4 
June 30, 2023186 $0.7 $3.8 $0.4 
September 30, 2023193 $0.7 $4.0 $0.4 
Quarter Ending
Off-hire Days(1)
Projected Costs(2)
December 31, 2017—
—
March 31, 201844
$1.3 million
June 30, 201866
$1.9 million
September 30, 201888
$2.6 million
(1) Actual duration of drydocking will vary based on the condition of the vessel, yard schedules and other factors.
(2) Actual costs will vary based on various factors, including where the drydockings are actually performed.
(2) Actual duration of off-hire days will vary based on the age and condition of the vessel, yard schedules and other factors.
(3) Vessel upgrades represents capex relating to items such as high-spec low friction hull paint which improves fuel efficiency and reduces fuel costs, NeoPanama Canal chock fittings enabling vessels to carry additional cargo through the new Panama Canal locks, as well as other retrofitted fuel-saving devices. Vessel upgrades are discretionary in nature and evaluated on a business case-by-case basis.
Off-balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
10


Other Contingencies
We refer you to “Note 7.Note 7, Commitments and Contingencies, - Legal Proceedings” to ourthe condensed consolidated financial statements for a discussion of our contingencies related to claim litigation.contingencies. If an unfavorable ruling were to occur in these matters, there exists the possibility of a material adverse impact on our business, liquidity, results of operations, financial position and cash flows in the period in which the ruling occurs. The potential impact from legal proceedings on our business, liquidity, results of operations, financial position and cash flows could change in the future.
11


ItemITEM 3.Quantitative and Qualitative Disclosures about Market Risk 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, 2016,2021, filed with the SEC on March 31, 2017.14, 2022. For information regarding our use of certain derivative instruments, including interest rate swaps, forward freight agreements and bunker swaps, see Note 5, Derivatives Instruments, to the condensed consolidated financial statements.

ItemITEM 4.Controls and Procedures CONTROLS AND PROCEDURES
Effectiveness of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.


As of September 30, 2017,2022, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2017.2022.
Changes in Internal Control Over Financial ReportingControls.
There have been no changesNo 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 period covered by this reportquarter ended September 30, 2022 that havehas materially affected, or areis reasonably likely to materially affect, our internal controlcontrols 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.


12


PART II: OTHER INFORMATION

ItemITEM 1 - Legal Proceedings– 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.Note 7, Commitments and Contingencies, – Legal Proceedings” to the condensed consolidated financial statements and is incorporated by reference herein.

ItemITEM 1A – Risk FactorsRISK FACTORS
There have been no material changes from the “Risk Factors” previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016,2021, filed with the SEC on March 31, 2017.14, 2022. The risks described in the Annual Report on Form 10-K for the year ended December 31, 20162021 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.


ItemITEM 2 – Unregistered Sales of Equity Securities and Use of ProceedsUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.

ItemITEM 3 - Defaults Upon Senior Securities– DEFAULTS UPON SENIOR SECURITIES
None.

ItemITEM 4 – Mine Safety DisclosuresMINE SAFETY DISCLOSURES
None.

ItemITEM 5 - Other Information– OTHER INFORMATION
NoneNone.
13


















ItemITEM 6 – Exhibits
EXHIBIT INDEX

31.1*
101*
The following materials from Eagle Bulk Shipping Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017,2022, formatted in eXtensible Business Reporting Language (XBRL): (i)Condensed Consolidated Balance Sheets (unaudited) as of September 30, 20172022 and December 31, 2016,2021, (ii) Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 20172022 and 2016,2021, (iii) Condensed Consolidated Statements of Comprehensive Lossincome (unaudited) for the three and nine months ended September 30, 20172022 and 2016,2021, (iv) Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the three and nine months ended September 30, 20172022 and 2016,2021, (v) Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 20172022 and 2016,2021, and (vi) Notes to Condensed Consolidated Financial Statements (unaudited).
* Filed herewith.
** Furnished herewith.



14


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
EAGLE BULK SHIPPING INC.
By: /s/ Gary Vogel
--------------------------------------------------------------------------------
Gary Vogel
Chief Executive Officer
(Principal executive officer of the registrant)
Date: November 3, 20177, 2022
By: /s/ Frank De Costanzo
--------------------------------------------------------------------------------
Frank De Costanzo
Chief Financial Officer
(Principal financial officer of the registrant)
Date: November 3, 2017

7, 2022
16
15