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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission File Number 001-33831

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

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

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareEGLENew York Stock Exchange
Preferred Stock Purchase RightsN/ANew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☐Accelerated filerNon-Accelerated filer
Smaller reporting companyEmerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
No
 ☒
Number of shares of registrant’s common stock outstanding as of November 3, 2023: 9,932,094




TABLE OF CONTENTS
Page
PART IFINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS (Unaudited)
ITEM 2.
ITEM 3.
ITEM 4.
PART IIOTHER INFORMATION
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.




CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as “believe,” “estimate,” “project,” “intend,” “expect,” “plan,” “anticipate,” and similar expressions in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements reflect management’s current expectations and observations with respect to future events and financial performance.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. The principal factors that affect our financial position, results of operations and cash flows include market freight rates, which fluctuate based on various economic and market conditions, periods of charter hire, vessel operating expenses and voyage costs, which are incurred primarily in U.S. dollars, depreciation expenses, which are a function of the purchase price of our vessels and our vessels’ estimated useful lives and scrap value, general and administrative expenses, and financing costs related to our indebtedness. The accuracy of the Company’s assumptions, expectations, beliefs and projections depends on events or conditions that change over time and are thus susceptible to change based on actual experience, new developments and known and unknown risks. The Company gives no assurance that the forward-looking statements will prove to be correct, does not undertake any duty to update them and disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors which could include the following: (i) volatility of freight rates driven by changes in demand for seaborne transportation of drybulk commodities and in supply of drybulk shipping capacity; (ii) changes in drybulk carrier capacity driven by levels of newbuilding orders, scrapping rates or fleet utilization; (iii) changes in rules and regulations applicable to the drybulk industry, including, without limitation, regulations of the International Maritime Organization and the European Union (the “EU”), requirements of the Environmental Protection Agency and other governmental and quasi-governmental agencies; (iv) changes in U.S., United Kingdom, United Nations and EU economic sanctions and trade embargo laws and regulations as well as equivalent economic sanctions laws of other relevant jurisdictions; (v) actions taken by regulatory authorities including, without limitation, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”); (vi) changes in the typical seasonal variations in drybulk freight rates; (vii) changes in national and international economic and political conditions including, without limitation, the current conflicts between Russia and Ukraine and Israel and Hamas, the current economic and political environment in China and the environment in historically high-risk geographic areas such as the South China Sea, the Indian Ocean, the Gulf of Guinea and the Gulf of Aden; (viii) changes in the condition of the Company’s vessels or applicable maintenance or regulatory standards (which may affect, among other things, our anticipated drydocking costs); (ix) the duration and impact of the novel coronavirus (“COVID-19”) pandemic and measures implemented by governments of various countries in response to the COVID-19 pandemic; (x) volatility of the cost of fuel; (xi) volatility of costs of labor and materials needed to operate our business due to inflation; (xii) any legal proceedings which we may be involved from time to time; and (xiii) other factors listed from time to time in our filings with the Securities and Exchange Commission (the “SEC”).
We have based these statements on assumptions and analyses formed by applying our experience and perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. The Company’s future results may be impacted by adverse economic conditions, such as inflation, deflation, or lack of liquidity in the capital markets, that may negatively affect it or parties with whom it does business. Should one or more of the foregoing risks or uncertainties materialize in a way that negatively impacts the Company, or should the Company’s underlying assumptions prove incorrect, the Company’s actual results may vary materially from those anticipated in its forward-looking statements, and its business, financial condition and results of operations could be materially and adversely affected. Risks and uncertainties are further described in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 10, 2023 (the “Annual Report”), as updated by those risks described in Part II, Item 1A of our Quarterly Report on Form 10-Q for the three months ended June 30, 2023, filed with the SEC on August 4, 2023.



PART I: FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
September 30, 2023 and December 31, 2022
(U.S. Dollars in thousands, except share data and par values)

September 30, 2023December 31, 2022
ASSETS:
Current assets:
Cash and cash equivalents$113,879 $187,155 
Accounts receivable, net of a reserve of $2,933 and $3,169, respectively
24,594 32,311 
Prepaid expenses5,832 4,531 
Inventories26,881 28,081 
Collateral on derivatives4,380 909 
Fair value of derivative assets – current8,653 8,479 
Other current assets652 558 
Total current assets184,871 262,024 
Noncurrent assets: 
Vessels and vessel improvements, at cost, net of accumulated depreciation of $289,819 and $261,725, respectively
914,108 891,877 
Advances for vessel purchases 3,638 
Advances for BWTS and other assets1,984 2,722 
Deferred drydock costs, net37,756 42,849 
Other fixed assets, net of accumulated depreciation of $1,324 and $1,623, respectively
952 310 
Operating lease right-of-use assets10,892 23,006 
Restricted cash – noncurrent2,575 2,599 
Fair value of derivative assets – noncurrent5,435 8,184 
Total noncurrent assets973,702 975,185 
Total assets$1,158,573 $1,237,209 
LIABILITIES & STOCKHOLDERS' EQUITY: 
Current liabilities: 
Accounts payable$20,938 $20,129 
Accrued interest2,092 3,061 
Other accrued liabilities19,198 24,097 
Fair value of derivative liabilities – current585 163 
Current portion of operating lease liabilities10,109 22,045 
Unearned charter hire revenue8,201 9,670 
Current portion of long-term debt – Global Ultraco Debt Facility49,800 49,800 
Current portion of long-term debt – Convertible Bond Debt, net of debt discount and debt issuance costs103,791  
Total current liabilities214,714 128,965 
Noncurrent liabilities:
Long-term debt – Global Ultraco Debt Facility, net of debt discount and debt issuance costs341,881 181,183 
Convertible Bond Debt, net of debt discount and debt issuance costs 103,499 
Fair value of derivative liabilities – noncurrent444  
Noncurrent portion of operating lease liabilities2,766 3,173 
Other noncurrent accrued liabilities696 1,208 
Total noncurrent liabilities345,787 289,063 
Total liabilities560,501 418,028 
Commitments and contingencies (Note 8)
Stockholders' equity: 
Preferred stock, $0.01 par value, 25,000,000 shares authorized, none issued as of September 30, 2023 and December 31, 2022
  
Common stock, $0.01 par value, 700,000,000 shares authorized, 9,319,177 and 13,003,702 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
93 130 
Additional paid-in capital746,898 966,058 
Accumulated deficit(162,418)(163,556)
Accumulated other comprehensive income13,499 16,549 
Total stockholders' equity598,072 819,181 
Total liabilities and stockholders' equity$1,158,573 $1,237,209 


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
F-1


EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
For the Three and Nine Months Ended September 30, 2023 and 2022
(U.S. Dollars in thousands, except share and per share data)

Three Months EndedNine Months Ended
September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Revenues, net $82,606 $185,313 $289,210 $568,406 
Voyage expenses23,791 40,792 82,737 120,710 
Vessel operating expenses28,822 33,091 91,077 88,213 
Charter hire expenses6,868 19,772 31,014 63,768 
Depreciation and amortization15,472 15,407 45,035 45,241 
General and administrative expenses10,652 9,666 32,871 29,611 
Impairment of operating lease right-of-use assets  722  
Other operating expense677 2,469 860 2,643 
Gain on sale of vessels(4,855)(9,336)(19,731)(9,336)
Total operating expenses, net81,427 111,861 264,585 340,850 
Operating income1,179 73,452 24,625 227,556 
Interest expense7,714 4,236 16,005 13,021 
Interest income(1,488)(881)(5,139)(1,100)
Realized and unrealized loss/(gain) on derivative instruments, net104 (11,293)(2,318)(13,281)
Loss on debt extinguishment 4,173  4,173 
Total other expense/(income), net6,330 (3,765)8,548 2,813 
Net (loss)/income$(5,151)$77,217 $16,077 $224,743 
Weighted average shares outstanding:
Basic9,313,051 12,993,450 11,686,433 12,985,329 
Diluted9,313,051 16,201,852 15,057,652 16,219,264 
Per share amounts:
Basic net (loss)/income$(0.55)$5.94 $1.38 $17.31 
Diluted net (loss)/income$(0.55)$4.77 $1.36 $13.86 


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

F-2


EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income/(Loss) (Unaudited)
For the Three and Nine Months Ended September 30, 2023 and 2022
(U.S. Dollars in thousands)

Three Months EndedNine Months Ended
September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Net (loss)/income$(5,151)$77,217 $16,077 $224,743 
Other comprehensive (loss)/income
Effect of cash flow hedges(1,226)4,554 (3,050)15,405 
Comprehensive (loss)/income$(6,377)$81,771 $13,027 $240,148 


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
F-3


EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)
For the Three and Nine Months Ended September 30, 2023 and 2022
(U.S. Dollars in thousands, except share and per share data)

Shares of Common StockCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive IncomeTotal Stockholders' Equity
Balance at December 31, 202213,003,702 $130 $966,058 $(163,556)$16,549 $819,181 
Net income— — — 3,202 — 3,202 
Dividends declared ($0.60 per share)
— — — (8,019)— (8,019)
Issuance of shares due to vesting of equity awards61,358 1 (1)— —  
Effect of cash flow hedges— — — — (2,859)(2,859)
Cash used to settle net share equity awards— — (1,651)— — (1,651)
Stock-based compensation — — 1,855 — — 1,855 
Balance at March 31, 202313,065,060 $131 $966,261 $(168,373)$13,690 $811,709 
Net income— — — 18,026 — 18,026 
Dividends declared ($0.10 per share)
— — — (1,350)— (1,350)
Issuance of shares due to vesting of equity awards26,944 — — — — — 
Repurchase of common stock – related party (Note 6)(3,781,561)(38)(222,780)— — (222,818)
Effect of cash flow hedges— — — — 1,035 1,035 
Stock-based compensation — — 2,155 — — 2,155 
Balance at June 30, 20239,310,443 $93 $745,636 $(151,697)$14,725 $608,757 
Net loss— — — (5,151)— (5,151)
Dividends declared ($0.58 per share)
— — — (5,570)— (5,570)
Issuance of shares due to vesting of equity awards8,734 — — — — — 
Repurchase of common stock – related party (Note 6)— — (71)— — (71)
Effect of cash flow hedges— — — — (1,226)(1,226)
Cash used to settle net share equity awards— — (337)— — (337)
Stock-based compensation— — 1,670 — — 1,670 
Balance at September 30, 20239,319,177 $93 $746,898 $(162,418)$13,499 $598,072 
F-4



Shares of Common StockCommon StockAdditional Paid-in CapitalAccumulated 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 equity awards60,890 1 (1)— —  
Issuance of shares upon exercise of stock options8,077 — 85 — — 85 
Effect of 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 equity awards3,187 — — — — — 
Effect of 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 equity awards14,335 — — — — — 
Effect of 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-5




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


EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Months Ended September 30, 2023 and 2022
(U.S. Dollars in thousands)

Nine Months Ended
September 30, 2023September 30, 2022
Cash flows from operating activities:
Net income$16,077 $224,743 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation34,577 35,513 
Noncash operating lease expense17,890 21,083 
Amortization of deferred drydocking costs10,458 9,728 
Amortization of debt discount and debt issuance costs1,958 1,627 
Loss on debt extinguishment 4,173 
Impairment of operating lease right-of-use assets722  
Gain on sale of vessels(19,731)(9,336)
Unrealized loss/(gain) on derivative instruments, net437 (8,517)
Stock-based compensation expense5,680 4,542 
Drydocking expenditures(10,562)(18,527)
Changes in operating assets and liabilities:
Accounts payable1,381 650 
Accounts receivable 7,707 (5,098)
Accrued interest(969)(1,241)
Inventories1,199 (8,622)
Operating lease liabilities current and noncurrent(19,570)(21,076)
Collateral on derivatives(3,471)13,881 
Fair value of derivatives, other current and noncurrent assets(141)(183)
Other accrued liabilities (4,907)(2,332)
Prepaid expenses(1,301)(1,223)
Unearned charter hire revenue(1,469)2,706 
Net cash provided by operating activities35,965 242,491 
Cash flows from investing activities:
Purchase of vessels and vessel improvements(81,802)(781)
Advances for vessel purchases (4,125)
Purchase of BWTS(2,142)(5,695)
Proceeds from hull and machinery insurance claims174  
Net proceeds from sale of vessels56,609 14,944 
Purchase of other fixed assets(670)(253)
Net cash (used in)/provided by investing activities(27,831)4,090 
Cash flows from financing activities:
Proceeds from Revolving Facility, net of debt issuance costs – Global Ultraco Debt Facility123,361  
Proceeds from Term Facility, net of debt issuance costs – Global Ultraco Debt Facility73,125  
Repayment of Term Facility – Global Ultraco Debt Facility(37,350)(37,350)
Repurchase of Common Stock and associated fees – related party (Note 6)(222,688) 
Repurchase of Convertible Bond Debt (14,188)
Dividends paid(15,790)(81,577)
Debt issuance costs paid to lenders – Original Global Ultraco Debt Facility (18)
Cash paid for taxes related to net share settlement of equity awards(1,989)(2,351)
Other financing costs paid(103) 
Cash received from exercise of stock options 85 
Proceeds from equity offerings, net of issuance costs 201 
Net cash used in financing activities(81,434)(135,198)
Net (decrease)/increase in cash, cash equivalents and restricted cash(73,300)111,383 
Cash, cash equivalents and restricted cash at beginning of period189,754 86,222 
Cash, cash equivalents and restricted cash at end of period$116,454 $197,605 


The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
F-7


EAGLE BULK SHIPPING INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. Basis of Presentation and General Information
The accompanying condensed consolidated financial statements include the accounts of Eagle Bulk Shipping Inc. and its wholly-owned subsidiaries (collectively, the “Company,” “we,” “our” or similar terms). All dollar amounts are stated in U.S. dollars and are presented in thousands, on a rounded basis, using actual amounts, except for per share amounts and unless otherwise noted. Minor differences in totals or percentages may exist due to rounding.
The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership, charter and operation of drybulk vessels. The Company’s fleet is comprised of Supramax and Ultramax drybulk carriers, and the Company operates its business in one business segment.
As of September 30, 2023, the Company owned and operated a modern fleet of 52 ocean-going vessels, including 22 Supramax and 30 Ultramax vessels with a combined carrying capacity of 3.16 million deadweight tons (“dwt”) and an average age of approximately 10 years.
In addition to its owned fleet, the Company charters-in third-party vessels on both a short-term and long-term basis. As of September 30, 2023, the Company had four Ultramax vessels on a long-term charter-in basis, with remaining lease terms ranging from one month to nine months.
For each of the three and nine months ended September 30, 2023 and 2022, the Company had no charterers which individually accounted for more than 10% of the Company’s gross charter revenue.
The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and the rules and regulations of the SEC that apply to interim financial statements and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and notes normally included in consolidated financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K, filed with the SEC on March 10, 2023 (the “Annual Report”).
The accompanying condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of its condensed consolidated financial position and results of operations for the interim periods presented.
The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.
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. Significant estimates include fair values of long-lived assets (primarily vessels and operating lease right-of-use assets), impairment of long-lived assets (primarily vessels and operating lease right-of-use assets), stock-based compensation and financial instruments (primarily derivative instruments and Convertible Bond Debt (as defined herein)), residual values of vessels, useful lives of vessels and estimated losses on accounts receivable. Actual results could differ from those estimates.
Note 2. Significant Accounting Policies and Pronouncements
The Company's significant accounting policies are described in Note 2. Significant Accounting Policies, in the notes to the consolidated financial statements included in the Annual Report. Included herein are certain updates to those policies.
F-8


Vessels and Vessel Improvements, At Cost
Vessels are stated at cost, which consists of the contract price, and other direct costs relating to acquiring and placing the vessels in service. Major vessel improvements, such as scrubbers and ballast water treatment systems (“BWTS”), are capitalized and depreciated over the remaining useful lives of the vessels. Depreciation is calculated on a straight-line basis over the estimated useful lives of the vessels based on the cost of the vessels reduced by the estimated scrap value of the vessels as discussed below. The Company estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard to the original owner.
Effective January 1, 2023, we increased our estimated vessel scrap value from $300 per light weight ton (“lwt”) to $400 per lwt. This change was driven by increases in 15-year average scrap price trends sourced from a third-party data provider as well as similar increases by certain of our industry peer companies. The change in the estimated scrap value will result in a decrease in depreciation expense over the remaining life of our vessel assets. We expect depreciation to decrease by approximately $4.0 million for the year ended December 31, 2023 solely as a result of the prospective change in this estimate. The impact of this change on Net (loss)/income and basic and diluted net (loss)/income per share for the three and nine months ended September 30, 2023 is as follows:
Three Months EndedNine Months Ended
September 30, 2023
Increase to Net income$992 $2,988 
Increase to Basic net income per share$0.11 $0.26 
Increase to Diluted net income per share$0.11 $0.20 
Recently Adopted Accounting Pronouncements
In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 establishes (1) a general contract modification principle that entities can apply in other areas that may be affected by reference rate reform and (2) certain elective hedge accounting expedients. ASU 2020-04 is optional and effective for all entities as of March 12, 2020 and may be applied prospectively to contract modifications made on or before December 31, 2024 (as extended by ASU 2022-06, Deferral of the Sunset Date of Topic 848). In June 2023, the Company modified certain interest rate swap agreements to coincide with the Global Ultraco Refinancing (as defined below). The Company utilized certain expedients under ASU 2020-04 to conclude that the modifications should be accounted for as continuations of the existing swap agreements, which had no impact on our condensed consolidated financial statements. See Note 4. Debt and Note 5. Derivative Instruments, for additional information on the Global Ultraco Refinancing and the Company’s outstanding interest rate swap agreements, respectively.
Note 3. Vessels
Vessels and Vessel Improvements
As of September 30, 2023, the Company’s owned fleet consisted of 52 drybulk vessels.
In December 2022, the Company entered into a memorandum of agreement to acquire a high-specification 2015-built Ultramax bulkcarrier for total consideration of $24.3 million. The Company paid a deposit of $3.6 million on this vessel as of December 31, 2022. The vessel was delivered to the Company in February 2023.
In January 2023, the Company entered into a memorandum of agreement to acquire a high-specification 2020-built scrubber-fitted Ultramax bulkcarrier for total consideration of $30.1 million. The vessel was delivered to the Company in May 2023.
In February 2023, the Company entered into a memorandum of agreement to acquire a high-specification 2020-built scrubber-fitted Ultramax bulkcarrier for total consideration of $30.1 million. The vessel was delivered to the Company in May 2023.
In February 2023, the Company entered into a memorandum of agreement to sell the vessel Jaeger (a 2004-built Supramax) for total consideration of $9.0 million. The vessel was delivered to the buyer in March 2023.
F-9


In April 2023, the Company entered into memorandums of agreement to sell the vessels Montauk Eagle, Newport Eagle and Sankaty Eagle (each, a 2011-built Supramax) for total consideration of $49.8 million. The Montauk Eagle and Newport Eagle were delivered to the buyer in May 2023. The Sankaty Eagle was delivered to the buyer in July 2023.
Activity in Vessels and vessel improvements for the nine months ended September 30, 2023 is as follows:
September 30, 2023
Beginning balance$891,877 
Purchase of vessels and vessel improvements85,572 
Sale of vessels(31,641)
Purchase of BWTS2,746 
Depreciation expense(34,446)
Ending balance$914,108 
Note 4. Debt
Long-term debt consists of the following:
September 30, 2023December 31, 2022
Principal Amount OutstandingDebt Discounts and Debt Issuance CostsCarrying ValuePrincipal Amount OutstandingDebt Discounts and Debt Issuance CostsCarrying Value
Convertible Bond Debt$104,119 $(328)$103,791 $104,119 $(620)$103,499 
Global Ultraco Debt Facility – Term Facility275,400 (5,778)269,622 237,750 (6,767)230,983 
Global Ultraco Debt Facility – Revolving Facility125,000 (2,941)122,059    
Total debt504,519 (9,047)495,472 341,869 (7,387)334,482 
Less: Current portion – Convertible Bond Debt(104,119)328 (103,791) —  
Less: Current portion – Global Ultraco Debt Facility(49,800)— (49,800)(49,800)— (49,800)
Total long-term debt $350,600 $(8,719)$341,881 $292,069 $(7,387)$284,682 
Global Ultraco Debt Facility
On May 11, 2023, Eagle Bulk Ultraco LLC (“Eagle Ultraco”), a wholly-owned subsidiary of the Company, along with certain of its wholly-owned, vessel-owning subsidiaries as guarantors, amended and restated its Credit Agreement originally dated October 1, 2021 (the “Original Global Ultraco Debt Facility”) pursuant to an Amended and Restated Credit Agreement dated as of May 11, 2023 (the “Global Ultraco Refinancing” and, as amended, the “Global Ultraco Debt Facility”) with the lenders party thereto and Crédit Agricole Corporate and Investment Bank (“Credit Agricole”) as security trustee, structurer, sustainability coordinator and facility agent (collectively, the “Lenders”). The Company paid fees of $3.5 million to the Lenders in connection with the Global Ultraco Refinancing.
F-10


The Global Ultraco Refinancing provided for additional loan capacity of up to $175.0 million, thereby increasing the aggregate principal amount of senior secured credit facilities under the Global Ultraco Debt Facility to $485.3 million (from $310.3 million under the Original Global Ultraco Debt Facility). Additional amounts provided under the Global Ultraco Refinancing included (i) an additional term loan of up to $75.0 million, thereby increasing the aggregate principal amount of term loans under the Global Ultraco Debt Facility to $300.3 million (the “Term Facility”) and (ii) an additional revolving credit facility in an aggregate principal amount of $100.0 million, thereby increasing the aggregate principal amount of revolving credit facilities available under the Global Ultraco Debt Facility to $185.0 million which shall be reduced beginning on September 15, 2023 and every three months thereafter, by twenty-one consecutive reductions of $5.445 million (the “Revolving Facility”). Proceeds from the Global Ultraco Refinancing are to be used for general corporate and working capital purposes, including, but not limited to vessel purchases, capital improvements, stock buybacks or equity repurchases, retirement of debt and other strategic initiatives.
During the nine months ended September 30, 2023, the Company borrowed $75.0 million under the Term Facility and $125.0 million under the Revolving Facility and repaid $37.4 million under the Term Facility.
As of September 30, 2023 and December 31, 2022, the undrawn portion of the Revolving Facility was $54.6 million and $100.0 million, respectively.
In August 2023, the Company entered into three interest rate swaps for a total notional amount of $75.0 million to fully hedge the SOFR-based floating interest rate exposure on amounts borrowed under the Term Facility. See Note 5. Derivative Instruments, for additional details.
Pursuant to the Global Ultraco Debt Facility, the Term Facility and the Revolving Facility mature and are repayable in full on September 28, 2028 (the “Loan Maturity Date”). The Term Facility will be repaid in twenty-two quarterly installments of $12.45 million beginning on June 15, 2023, with a final balloon payment due on the Loan Maturity Date. Outstanding borrowings under the Global Ultraco Debt Facility bear interest at a rate equal to the sum of (i) Term SOFR (as defined in the Global Ultraco Debt Facility) for the relevant interest period, (ii) a credit spread adjustment of 26.161 basis points per annum to achieve parity between the SOFR-based benchmark rate on the Global Ultraco Debt Facility and the LIBOR-based benchmark rate on the Original Global Ultraco Debt Facility and (iii) the applicable margin, which ranges between 2.05% and 2.75% based on the consolidated net leverage ratio of the Company and certain sustainability-linked criteria.

The Global Ultraco Debt Facility is secured by, among other items, a first priority mortgage on 52 of the Company’s owned vessels, as identified in the Global Ultraco Debt Facility, and such other vessels that the Company may, from time to time, include with the approval of the Lenders (collectively, the “Eagle Vessels”). The Global Ultraco Debt Facility contains standard affirmative and negative covenants as well as certain financial covenants. The financial covenants require the Company, on a consolidated basis, to maintain at all times (a) (i) cash and cash equivalents or (ii) undrawn Revolving Facility commitments up to seven months prior to the Loan Maturity Date not less than the greater of (i) $0.6 million per vessel owned directly or indirectly by the Company and its subsidiaries or (ii) 7.5% of consolidated total debt; (b) a debt to capitalization ratio of not greater than 0.60:1.00; and (c) positive working capital (excluding the current portions of operating lease liabilities and long-term debt). Additionally, the Company has to ensure that the aggregate fair market value of the Eagle Vessels is not less than 140% of the aggregate principal amounts outstanding under the Global Ultraco Debt Facility. As of September 30, 2023, the Company was in compliance with all applicable financial covenants under the Global Ultraco Debt Facility.
Prior to the Global Ultraco Refinancing, on October 1, 2021, Eagle Ultraco, along with certain of its vessel-owning subsidiaries as guarantors, entered into the Original Global Ultraco Debt Facility with the lenders party thereto. The Original Global Ultraco Debt Facility provided for an aggregate principal amount of $400.0 million, which consisted of (i) a term loan facility in an aggregate principal amount of $300.0 million and (ii) a revolving credit facility in an aggregate principal amount of $100.0 million.
The Original Global Ultraco Debt Facility had a maturity date of October 1, 2026. Outstanding borrowings bore interest at a rate of LIBOR plus 2.10% to 2.80% per annum, depending on certain metrics such as the Company's financial leverage ratio and meeting sustainability linked criteria. Repayments of $12.45 million were due quarterly and began on December 15, 2021, with a final balloon payment of all outstanding principal and accrued interest due upon maturity. As a result of the sale of the vessels Newport Eagle, Montauk Eagle and Sankaty Eagle, the aggregate principal amount available under the revolving credit facility was reduced from $100.0 million to $85.0 million.
F-11


The Original Global Ultraco Debt Facility was secured by 49 of the Company's vessels. The Original Global Ultraco Debt Facility contained certain standard affirmative and negative covenants along with financial covenants. Through the date of the Global Ultraco Refinancing, the Company was in compliance with all applicable covenants under the Original Global Ultraco Debt Facility.
The Global Ultraco Refinancing was accounted for as a modification under Accounting Standards Codification (“ASC”) 470, Debt. As such, a new effective interest rate was determined based on the carrying value of the term facility just prior to the Global Ultraco Refinancing, including unamortized discount and debt issuance costs, as well as fees paid to the Lenders attributable to the Term Facility in connection with the Global Ultraco Refinancing. In addition, an amount of previously unamortized debt issuance costs and fees paid to lenders attributable to the revolving credit facility under the Original Global Ultraco Debt Facility as well as fees paid to the Lenders and third party costs attributable to the Revolving Facility in connection with the Global Ultraco Refinancing shall be deferred and amortized over the term of the Revolving Facility in a manner consistent with the Revolving Facility’s contractual reduction in capacity.
Prior to the Global Ultraco Refinancing, in October 2021, the Company entered into four interest rate swaps for the notional amount of $300.0 million of the term facility under the Original Global Ultraco Debt Facility to hedge the Original Global Ultraco Debt Facility’s LIBOR-based floating interest rate. In June 2023, the Company modified its then outstanding interest rate swap agreements to replace the underlying benchmark interest rate from LIBOR to SOFR with all other material terms remaining unchanged. See Note 5. Derivative Instruments, for additional details.
Convertible Bond Debt
On July 29, 2019, the Company issued $114.1 million in aggregate principal amount of 5.0% Convertible Senior Notes due 2024 (the “Convertible Bond Debt”). After deducting debt discount of $1.6 million, the Company received net proceeds of approximately $112.5 million. Additionally, the Company incurred $1.0 million of debt issuance costs relating to this transaction. The Company used the proceeds to partially finance the purchase of six Ultramax vessels and for general corporate purposes, including working capital.
The Convertible Bond Debt bears interest at a rate of 5.0% per annum on the outstanding principal amount thereof, payable semi-annually in arrears on February 1 and August 1 of each year, which commenced on February 1, 2020. The Convertible Bond Debt may bear additional interest upon certain events, as set forth in the indenture governing the Convertible Bond Debt (the “Indenture”).
The Convertible Bond Debt will mature on August 1, 2024 (the “Maturity Date”), unless earlier repurchased, redeemed or converted pursuant to its terms. From time to time, the Company may, subject to market conditions and other factors and to the extent permitted by law, opportunistically repurchase the Convertible Bond Debt in the open market or through privately negotiated transactions. The Company may not otherwise redeem the Convertible Bond Debt prior to the Maturity Date.
Each holder has the right to convert any portion of the Convertible Bond Debt, provided such portion is of $1,000 or a multiple thereof, at any time prior to the close of business on the business day immediately preceding the Maturity Date. The conversion rate of the Convertible Bond Debt after adjusting for a 1-for-7 reverse stock split effected on September 15, 2020 (the “Reverse Stock Split”) and the Company's cash dividends declared through September 30, 2023 is 31.5446 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 $31.70 per share of common stock (subject to further adjustment for any 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 Indenture).
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.
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The Convertible Bond Debt is a general, unsecured senior obligation of the Company. It ranks: (i) senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Convertible Bond Debt; (ii) equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; (iii) effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all indebtedness and other liabilities of current or future subsidiaries of the Company.
The Indenture also provides for customary events of default. Generally, if an event of default occurs and is continuing, then the trustee or the holders of at least 25% in aggregate principal amount of the Convertible Bond Debt then outstanding may declare 100% of the principal of and accrued and unpaid interest, if any, on all the Convertible Bond Debt then outstanding to be due and payable.
As of January 1, 2022, in accordance with the adoption of ASU 2020-06 under the modified retrospective approach, the Convertible Bond Debt no longer required bifurcation and separate accounting of its conversion feature that was previously separately accounted for as an equity component. As such, an adjustment to beginning retained earnings of $8.7 million was recorded within Accumulated deficit and a $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 debt discount and debt issuance costs as a reversal of the debt discount. See Note 2. Significant Accounting Policies, in the notes to the consolidated financial statements included in the Annual Report for additional discussion of the impact of ASU 2020-06 on the accounting for the Convertible Bond Debt and the condensed consolidated financial statements upon adoption on January 1, 2022.
Share Lending Agreement
In connection with the issuance of the Convertible Bond Debt, certain persons entered into an arrangement (the “Share Lending Agreement”) to borrow up to 511,840 shares of the Company’s common stock through share lending arrangements from Jefferies LLC (“JCS”), an initial purchaser of the Convertible Bond Debt. In connection with the foregoing, the Company entered into an agreement with an affiliate of JCS to lend up to 511,840 newly issued shares of the Company’s common stock. The number of shares loaned under the Share Lending Agreement have been adjusted for the Reverse Stock Split. As of September 30, 2023, the fair value of the 511,840 outstanding loaned shares was $21.5 million based on the closing price of the common stock on September 30, 2023. In connection with the Share Lending Agreement, JCS paid $0.03 million representing a nominal fee per borrowed share, equal to the par value of the Company’s common stock.
While the Share Lending Agreement does not require cash payment upon return of the shares, physical settlement is required (i.e., the loaned shares must be returned at the end of the arrangement). In view of this share return provision and other contractual undertakings of JCS in the Share Lending Agreement, which have the effect of substantially eliminating the economic dilution that otherwise would result from the issuance of borrowed shares, the loaned shares are not considered issued and outstanding for the purpose of computing and reporting the Company's basic and diluted weighted average shares or net income per share. If JCS were to file bankruptcy or commence similar administrative, liquidating or restructuring proceedings, the Company will have to consider 511,840 shares lent to JCS as issued and outstanding for the purposes of calculating net income per share.
Interest Expense
A summary of interest expense for the three and nine months ended September 30, 2023 and 2022 is as follows:
Three Months EndedNine Months Ended
September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Convertible Bond Debt$1,301 $1,426 $3,904 $4,279 
Global Ultraco Debt Facility – Term Facility (1)
3,042 2,024 6,772 6,372 
Global Ultraco Debt Facility – Revolving Facility2,411  2,647  
Commitment fees on Revolving Facility148 251 724 743 
Amortization of debt discount and debt issuance costs812 535 1,958 1,627 
Total interest expense$7,714 $4,236 $16,005 $13,021 
(1)Interest expense on the Term Facility under the Global Ultraco Debt Facility includes a reduction of $2.5 million and $0.7 million of interest from interest rate derivatives designated as hedging instruments for the three months ended September 30, 2023 and 2022, respectively and a reduction of $7.0 million and $0.3 million of interest from interest rate
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derivatives designated as hedging instruments for the nine months ended September 30, 2023 and 2022, respectively. See Note 5. Derivative Instruments, for additional information.
The following table presents the weighted average effective interest rate on the Company’s debt obligations, including the amortization of debt discounts and debt issuance costs and costs associated with commitment fees on revolving facilities for the three and nine months ended September 30, 2023 and 2022, but excludes the impact on interest from interest rate derivatives designated as hedging instruments. In addition, the following table presents the range of contractual interest rates on the Company’s debt obligations, excluding the impact of costs associated with commitment fees on revolving facilities for the three and nine months ended September 30, 2023 and 2022.
 Three Months EndedNine Months Ended
 September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Weighted average effective interest rate7.87 %5.27 %7.65 %4.60 %
Range of interest rates
5.00% to 7.72%
3.93% to 5.39%
5.00% to 7.72%
2.35% to 5.39%
The following table presents the weighted average effective interest rate on the Company’s debt obligations, including the impact on interest from interest rate derivatives designated as hedging instruments as well as amortization of debt discounts and debt issuance costs and costs associated with commitment fees on revolving facilities for the three and nine months ended September 30, 2023 and 2022.
 Three Months EndedNine Months Ended
 September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Weighted average effective interest rate, including hedging instruments5.94 %4.49 %5.31 %4.50 %
Scheduled Debt Maturities
The following table presents the scheduled maturities of principal amounts of our debt obligations as of September 30, 2023:
Convertible Bond Debt(1)
Global Ultraco Debt Facility – Revolving Facility(2)
Global Ultraco Debt Facility – Term FacilityTotal
Three months ending December 31, 2023$ $ $12,450 $12,450 
2024104,119  49,800 153,919 
2025  49,800 49,800 
2026 16,230 49,800 66,030 
2027 21,780 49,800 71,580 
2028 86,990 63,750 150,740 
$104,119 $125,000 $275,400 $504,519 
(1)This amount represents the aggregate principal amount of the Convertible Bond Debt outstanding that would be payable in cash upon maturity if no holder of the Convertible Bond Debt elects conversion pursuant to the Indenture.
(2)Represents amounts payable based on the amount outstanding under the Revolving Facility as of September 30, 2023 and the timing of contractual reductions in capacity of the Revolving Facility. The amount and timing of actual repayments may change as a result of additional future borrowings or repayments under the Revolving Facility.
Note 5. Derivative Instruments
The Company uses interest rate swaps to manage its exposure to interest rate risk on its debt. Generally, the Company enters into interest rate swaps with the objective of effectively converting debt from a floating-rate to a fixed-rate obligation. As of September 30, 2023, the Company’s outstanding interest rate swaps were designated as hedging instruments and qualified as cash flow hedges.
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The Company uses forward freight agreements (“FFAs”) and bunker swaps to manage its exposure to changes in charter hire rates and market bunker prices, respectively. Generally, the Company enters into FFAs with the objective of effectively fixing charter hire rates for future charter transactions and the Company enters into bunker swaps with the objective of effectively fixing forecasted bunker transactions. The Company utilizes these derivative instruments to economically hedge these risks and does not designate them as hedging instruments.
For derivative instruments that are not designated as hedging instruments, changes in the fair value of the instruments and the gain or loss ultimately realized upon settlement of the derivative are reported in Realized and unrealized loss/(gain) on derivative instruments, net in the Condensed Consolidated Statements of Operations.
As of September 30, 2023, the Company has International Swaps and Derivatives Association agreements with five financial institutions which contain netting provisions. In addition to a master agreement with the Company supported by a primary parent guarantee on either side, the Company also has associated credit support agreements in place with the one counterparty which, among other things, provide the circumstances under which either party is required to post eligible collateral when the market value of transactions covered by these agreements exceeds specified thresholds.
Interest rate swaps
In June 2023, the Company modified its then outstanding interest rate swap agreements to replace the underlying benchmark interest rate from LIBOR to SOFR with all other material terms remaining unchanged. As discussed in Note 2. Significant Accounting Policies and Pronouncements, the Company utilized certain expedients under ASU 2020-04 to account for these modifications as continuations of existing agreements which had no impact on our condensed consolidated financial statements.
As of September 30, 2023, the Company had the following outstanding interest rate swaps that were designated and qualified as cash flow hedges.
Range of Fixed RatesWeighted Average Fixed RateNotional Amount Outstanding
0.62% to 4.47%
1.69%$275,400 
The effect of these derivative instruments on the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 is as follows:
Fair Value of Derivative Assets/(Liabilities)
Balance Sheet LocationSeptember 30, 2023December 31, 2022
Derivatives designated as hedging instruments
Interest rate contracts – interest rate swaps
Fair value of derivative assets – current$8,529 $8,479 
Fair value of derivative assets – noncurrent5,435 8,184 
$13,964 $16,663 
Fair value of derivative liabilities – noncurrent$(444)$ 
$(444)$ 



F-15


The effect of these instruments on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2023 and 2022 is as follows:
Derivatives in Cash Flow Hedging RelationshipsGain/(Loss) Recognized in Other Comprehensive Income/(Loss)Location of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income into EarningsGain/(Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
September 30, 2023September 30, 2022September 30, 2023September 30, 2022September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Interest rate contracts
Interest rate swaps$1,276 $5,173 $3,997 $15,709 Interest expense$2,502 $619 $7,047 $304 
Further information on the effect of these instruments on the Condensed Consolidated Statements of Comprehensive Income/(Loss) for the three and nine months ended September 30, 2023 and 2022 is as follows:
Three Months EndedNine Months Ended
September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Accumulated other comprehensive income, beginning balance$14,725 $12,737 $16,549 $1,886 
Gain recognized in Other Comprehensive Income/(Loss)1,276 5,173 3,997 15,709 
Gain reclassified from Other Comprehensive Income/(Loss) into earnings(2,502)(619)(7,047)(304)
Accumulated other comprehensive income, ending balance$13,499 $17,291 $13,499 $17,291 
Of the amount recorded in Accumulated other comprehensive income as of September 30, 2023, $8.7 million is expected to be reclassified into earnings within the next twelve months.
Forward freight agreements and bunker swaps
A summary of outstanding FFAs as of September 30, 2023 is as follows:
FFA Period
Average FFA Contract Price(1)
Number of Days Hedged
Quarter ending December 31, 2023 – Buy Positions$14,196 (345)
Quarter ending December 31, 2023 – Sell Positions$12,922 1,380 
(1)Presented in whole dollars.
As of September 30, 2023, the Company had outstanding bunker swap agreements to purchase 3,550 metric tons of low sulphur fuel oil with prices ranging between $469 and $634 with contracts expiring between October and December 2023. The Company does not expect non-performance by any of the counterparties to the Company’s bunker swap transactions.
F-16


The effect of these derivative instruments on the Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 is as follows:
Fair Value of Derivative Assets/(Liabilities)
Balance Sheet LocationSeptember 30, 2023December 31, 2022
Derivatives not designated as hedging instruments
Commodity contracts – FFAs
Fair value of derivative liabilities – current$(585)$(70)
$(585)$(70)
Commodity contracts – bunker swaps
Fair value of derivative assets – current$124 $ 
$124 $ 
Fair value of derivative liabilities – current$ $(93)
$ $(93)
The effect of these instruments on the Condensed Consolidated Statements of Operations, which is presented in Realized and unrealized loss/(gain) on derivative instruments, net for the three and nine months ended September 30, 2023 and 2022 is as follows:
 (Gain)/Loss Recognized in Earnings
Three Months EndedNine Months Ended
Derivatives not designated as hedging instrumentsSeptember 30, 2023September 30, 2022September 30, 2023September 30, 2022
Commodity contracts
FFAs – realized gain$(1,577)$(3,800)$(2,335)$(1)
Bunker swaps – realized gain(541)(369)(420)(4,763)
(2,118)(4,169)(2,755)(4,764)
FFAs – unrealized loss/(gain)2,354 (10,478)654 (9,359)
Bunker swaps – unrealized (gain)/loss(132)3,354 (217)842 
2,222 (7,124)437 (8,517)
Realized and unrealized loss/(gain) on derivative instruments, net$104 $(11,293)$(2,318)$(13,281)
As of September 30, 2023, $4.4 million of collateral was pledged related to outstanding FFAs.
F-17


Note 6. Stockholders’ Equity
Shareholder Rights Agreement
On June 22, 2023, the Company entered into a Rights Agreement (the “Rights Agreement”) with Computershare Trust Company, N.A., a national banking corporation, as rights agent. In connection therewith, the Company’s Board of Directors (the “Board”) declared a dividend of one preferred share purchase right (“Right”) for each outstanding share of the Company’s Common Stock, $0.01 par value. The dividend was payable on July 3, 2023 to shareholders of record as of the close of business on such date (the “Right Record Date”). In addition, one Right will automatically attach to each share of Common Stock issued between the Right Record Date and the date when the Rights become exercisable. The Rights will expire at the earlier of (i) 5:00 P.M., New York City time, on the third anniversary of the date of the declaration of the dividend of Rights and (ii) 5:00 P.M., New York City time, on the first anniversary of the date of the declaration of the dividend of Rights if Shareholder Approval (as defined in the Rights Agreement) has not been received prior to such time, unless such date is advanced or extended or unless the Rights are earlier redeemed or exchanged by the Board.
Each Right will allow its holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, $0.01 par value (“Preferred Shares”), for $180.00, subject to adjustment under certain conditions, once the Rights become exercisable.
Each one one-thousandth of a Preferred Share, if issued:
will not be redeemable;
will entitle the holder to quarterly dividend payments equal to the dividend paid on one share of Common Stock;
will entitle the holder upon liquidation to receive either $1.00 or an amount equal to the payment made on one share of Common Stock;
will have one vote and vote together with the Common Stock, except as required by law; and
if shares of Common Stock are exchanged via merger, consolidation or a similar transaction, will entitle the holder to a payment equal to the payment made on one share of Common Stock.
The Rights will not be exercisable until:
10 business days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 15% or more of the outstanding Common Stock, or, if earlier;
10 business days (or a later date determined by the Board before any person or group becomes an Acquiring Person) after a person or group Commences (as defined in the Rights Agreement) a tender or exchange offer which, if completed, would result in that person or group becoming an Acquiring Person.
Common Stock Repurchase – Related Party
On June 22, 2023, the Company entered into an agreement to purchase 3,781,561 shares of Common Stock from OCM Opps EB Holdings Ltd. (the “Seller”), a related party, for $58.00 per share, or an aggregate purchase price of $219.3 million (the “Share Repurchase”). The Share Repurchase closed on June 23, 2023. The shares purchased, which comprised the Seller’s entire ownership position of Common Stock as of the date of the Share Repurchase, represented 28% of the outstanding Common Stock as of that date and were immediately retired. The Company incurred $3.6 million of fees and transaction costs with third parties in direct connection with the Share Repurchase.
Common Stock Repurchase Program
On October 4, 2021, the Company announced a share repurchase program under which the Company may purchase up to $50.0 million of the Company’s Common Stock. The timing, volume and nature of transactions under this program will be at the Board’s discretion and may be made through open market transactions or privately negotiated transactions, including under plans complying with Rule 10b5-1 under the Exchange Act. This program has no expiration date and may be suspended or terminated by the Company at any time without prior notice. As of September 30, 2023, no shares have been repurchased under this program.
F-18


Dividends
On March 2, 2023, the Board declared a cash dividend of $0.60 per share to be paid on March 23, 2023 to shareholders of record at the close of business on March 15, 2023.
On May 4, 2023, the Board declared a cash dividend of $0.10 per share to be paid on May 25, 2023 to shareholders of record at the close of business on May 17, 2023.
On August 3, 2023, the Board declared a cash dividend of $0.58 per share to be paid on August 24, 2023 to shareholders of record at the close of business on August 16, 2023.
For the nine months ended September 30, 2023, the Company paid $15.8 million in dividends.
Note 7. Fair Value Measurements
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash, cash equivalents and restricted cash—Carrying values reported in the Condensed Consolidated Balance Sheets approximate fair value due to their highly liquid and short-term nature.
Collateral on derivatives—Carrying values reported in the Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature.
Derivative assets and liabilities—The fair values of derivative assets and liabilities, which include interest rate swaps, FFAs and bunker swaps, are estimated using observable inputs for similar instruments as of the measurement date and standard valuation techniques to convert future amounts to a single present amount assuming that participants are motivated, but not compelled to transact.
Long-term Debt—The fair value of Convertible Bond Debt, which is traded in the over-the-counter market, is estimated based on quoted prices in markets that are not active on identical instruments. The carrying amount of the Term Facility under the Global Ultraco Debt Facility approximates its fair value, due to its variable interest rates.
The carrying values of other financial assets and liabilities (primarily accounts receivable, accounts payable and other accrued expenses) approximate their fair value due to their relative short-term nature.
The Company defines fair value, establishes a framework for measuring fair value and provides disclosures about fair value measurements. The fair value hierarchy for disclosure of fair value measurements is as follows:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active or other observable inputs.
Level 3 – Inputs that are unobservable.
Fair Value
September 30, 2023
Carrying ValueLevel 1Level 2
Assets
Cash, cash equivalents and restricted cash$116,454 $116,454 $ 
Collateral on derivatives4,380 4,380  
Fair value of derivative assets – current8,653  8,653 
Fair value of derivative assets – noncurrent5,435  5,435 
Liabilities
Global Ultraco Debt Facility (1)(2)
275,400  275,400 
Convertible Bond Debt (1)(3)
104,119  146,839 
Fair value of derivative liabilities – current585  585 
F-19


Fair Value
December 31, 2022
Carrying ValueLevel 1Level 2
Assets
Cash, cash equivalents and restricted cash$189,754 $189,754 $ 
Collateral on derivatives909 909  
Fair value of derivative assets – current8,479  8,479 
Fair value of derivative assets – noncurrent8,184  8,184 
Liabilities
Global Ultraco Debt Facility (1)(2)
237,750  237,750 
Convertible Bond Debt (1)(3)
104,119  172,661 
Fair value of derivative liabilities – current163  163 
(1)Carrying value represents outstanding principal amount and excludes debt discounts and debt issuance costs.
(2)Fair value is based on the required repayment to the lenders if the debt was discharged in full on September 30, 2023 and December 31, 2022, as applicable.
(3)Fair value is based on pricing data (including observable trade information) sourced from Bloomberg.com.
Note 8. Commitments and Contingencies
Legal Proceedings
The Company is involved in legal proceedings and may become involved in other legal matters arising in the ordinary course of its business, principally personal injury and property casualty claims. Generally, we expect that such claims would be covered by insurance, subject to customary deductibles. The Company evaluates these legal matters on a case-by-case basis to make a determination as to the impact, if any, on its business, liquidity, results of operations, financial condition or cash flows.
Certain routine commercial claims have been asserted against the Company that relate to contractual disputes with certain of our charterers. The nature of these disputes involve disagreements over losses claimed by charterers during or as a result of the performance of certain voyage charters, including but not limited to delays in the performance of the charters and off-hire during the charters. The related legal proceedings are at various stages of resolution.
In March 2021, the U.S. government began investigating an allegation that one of the Company’s 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, but at this time we do not believe that this matter will have a material impact on the Company, our financial condition or results of operations. We have posted a surety bond as security for any potential fines, penalties or associated costs that may be incurred, and the Company is cooperating fully with the U.S. government in its investigation of this matter.
We have not been involved in any legal proceedings, other than as disclosed above, which we believe may have, or have had, a significant effect on our business, financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened, other than as described above, which we believe may have a significant effect on our business, financial position and results of operations or liquidity. However, these proceedings, even if lacking merit, could result in the expenditure of significant financial and managerial resources.
In accordance with U.S. GAAP, the Company accrues for contingent liabilities when it is probable that such a liability has been incurred and the amount of loss can be reasonably estimated. The Company evaluates its outstanding legal proceedings each quarter to assess its contingent liabilities and adjusts such liabilities, as appropriate, based on management’s best judgment after consultation with counsel. The Company reversed $0.8 million in costs associated with contingent liabilities for the three and nine months ended September 30, 2023 and incurred $0.3 million in costs associated with contingent liabilities for the three and nine months ended September 30, 2022, respectively. There is no assurance that the Company’s contingent liabilities will not need to be adjusted in the future.
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Note 9. Leases
Time charter-out contracts
Time charter-out contracts are accounted for as operating leases. The Company records revenue generated from time charter-out contracts on a straight-line basis over the term of the respective time charter agreements as Revenues, net in the Condensed Consolidated Statements of Operations. See Note 10. Revenue, for additional details.
A summary of lease payments expected to be received on fixed time charter-out contracts, net of commission, assuming no off-hire days, other than those related to scheduled interim or special surveys of the related vessel and excluding any voyage expenses associated with such contracts, as of September 30, 2023 is as follows:
Year:Time Charter-Out Contracts
Remainder of 2023$12,006 
2024 
2025 
2026 
2027 
Thereafter 
$12,006 
Time charter-in contracts
Time charter-in contracts are accounted for as operating leases. The Company records operating lease cost for time charter-in contracts as Charter hire expenses in the Condensed Consolidated Statements of Operations on a straight-line basis over the lease term. Due to the volatility of freight rates, the Company generally concludes that it is not reasonably certain to exercise any options to extend the lease term at lease commencement.
As of September 30, 2023, the Company chartered-in, on a long-term basis, four Ultramax vessels. Details of modifications of or new long-term time charter-in contracts for the nine months ended September 30, 2023 are as follows:
In October 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 first year was $14,250 per day and the hire rate for the second year was $15,250. The Company took delivery of the vessel in December 2018. In December 2019, the Company entered into a lease addendum which replaced the original lease’s second year’s hire rate with a new hire rate of $11,600