What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2022-03-16 compared with 2021-03-15 · 151 added, 125 removed, 286 unchanged (49% of the section changed)

14 unchanged sentences

Revenue Recognition:

Revenues are generated from time charters and voyage charters.

Time charter revenues are recognized on a straight-line basis over the term of the respective time charter agreements as service is provided.

Voyage revenues represent revenues earned by the Company, principally from providing transportation services under voyage charters.

8 unchanged sentences

Charter revenues relate to a time charter arrangement under which the Company is paid to provide transportation services on a per day basis for a specified period of time.

Revenues from time charters are earned and recognized on a straight-line basis over the term of the charter, as the vessel operates under the charter.

Revenues from time charters are earned and recognized on a straight-line basis over the term of the charter, as the charters do not fall under the scope of ASC 606.

Revenue is not earned when vessels are offhire.

3 unchanged sentences

In such instances, an impairment charge would be recognized if the estimate of the undiscounted future cash flows expected to result from the use of the group and its eventual disposition is less than its carrying value.

This assessment is made at the assets group level, which represents the lowest level for which identifiable cash flows are largely independent of other groups of assets.

This assessment is made at the assets group level, which

represents the lowest level for which identifiable cash flows are largely independent of other groups of assets.

The asset groups established by the Company are defined by vessel size and major characteristic or trade.

9 unchanged sentences

Measurement of the impairment loss is based on the fair value of the asset as provided by third parties.

The Company concluded that no triggering event had occurred during the twelve months ended December 31, 2021 which would require impairment testing.

The Company concluded that no triggering event had occurred during the first, third and fourth quarter of 2020 which would require impairment testing.

During the second quarter of 2020, the Company determined that a triggering event occurred related to a sale of a vessel, as the carrying value exceeded its fair value.

During the second quarter of 2020, the Company determined that a triggering event occurred related to the sale of a vessel, as the carrying value exceeded its fair value.

A loss on impairment of $1.8 million was recorded in the second quarter of 2020 when the Memorandum of Agreement was signed.

The Company performed an impairment analysis on each asset group and concluded the estimated undiscounted future cash flows were higher than their carrying amount and as such, no additional loss on impairment was recognized.

At December 31, 2019, the Company had accepted an offer to sell the m/v Bulk Patriot below the carrying amount of the vessel, to be delivered in the first quarter of 2020.

As a result, a loss on impairment of the vessel for an amount totaling $4.8 million, which was equal to the excess of the carrying amount of the asset over the agreed upon sale value less estimated costs to sell, was included in the consolidated statements of operations.

The vessel has been classified as held for sale as of December 31, 2019.

The Company identified additional potential triggering events that resulted from the loss recognized on the sale of other vessels in the fourth quarter of 2019 of $4.6 million.

As a result, the Company evaluated each asset group for impairment by estimating the total undiscounted cash flows expected to result from the use of the asset group and its eventual disposal.

The estimated undiscounted future cash flows were higher than the carrying amount of each asset group in the Company's fleet and as such, no other loss on impairment was recognized.

No impairment indicator existed during the nine months ended September 30, 2019.

The table set forth below indicates the purchase price of the Company’s vessels and the net carrying amount of each vessel as of December 31, 2021.

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m/v Bulk Destiny January 2017 UMX - 1C 2017 24,000 20,075

m/v Bulk Courageous April 2021 UMX 2013 16,798 16,357

m/v Nordic Oasis January 2016 PMX-1A 2016 32,600 27,650

4 unchanged sentences

m/v Nordic Odyssey April 2012 PMX-1A 2010 32,691 22,456

m/v Bulk Valor June 2021 SMX 2013 18,182 17,797

m/v Bulk Friendship September 2019 SMX 2011 14,447 14,526

6 unchanged sentences

m/v Bulk Pangaea December 2009 PMX 1996 26,500 11,802

m/v Bulk PODS August 2018 PMX 2006 14,010 13,095

m/v Bulk Xaymaca (1)

August 2018 PMX 2006 14,010 12,662

m/v Bulk Promise July 2021 PMX 2013 18,633 18,307

m/v Nordic Nuluujaak May 2021 Post Panamax 1A 2021 38,424 38,949

m/v Nordic Qinngua June 2021 Post Panamax 1A 2021 38,471 38,838

m/v Nordic Sanngijuq September 2021 Post Panamax 1A 2021 37,920 38,377

m/v Nordic Siku November 2021 Post Panamax 1A 2021 37,935 38,776

Pearl November 2017 Deck Barge 1979 3,833 2,715

Total $ 596,728 $ 514,908

(1) Formerly known as m/v Bulk PODS.

Recent Accounting Pronouncements

18 unchanged sentences

The Company hires vessels under time charters with third party vessel owners, and recognizes the charter hire payments as an expense on a straight-line basis over the term of the charter.

Charter hire payments are typically made in advance, and the

unrecognized portion is reflected as advance hire in the accompanying consolidated balance sheets.

Charter hire payments are typically made in advance, and the unrecognized portion is reflected as advance hire in the accompanying consolidated balance sheets.

Under the time charters, the vessel owner is responsible for the vessel operating costs such as crews, maintenance and repairs, insurance, and stores.

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The seaborne drybulk transportation industry is cyclical and can be volatile.

Overall the Baltic Dry Index (“BDI”), a measure of dry bulk market performance, averaged 1,085 for 2020, down from an average of 1,329 for 2019.

Seasonal volatility within the year resulted in an intra-year low of 487 in January and a high of 1,799 in June.

More specifically, and reflecting the composition of the Company's fleet, the average published market rates for Supramax and Panamax vessels decreased approximately 21% from an average of $10,093 in 2019 to $8,020 in 2020.

In 2021 drybulk freight markets reached levels not seen in a decade driven by strong global demand in major and minor bulks, and supply constraints driven by lack of supply and port congestion.

The Baltic Dry Index (“BDI”), a measure of dry bulk market performance, averaged 2,956 for 2021, up from an average of 1,085 for 2020.

Seasonal volatility within the year resulted in an intra-year low of 1,452 BDI in January and a high of 5,167 in September, which was this highest level since 2008.

More specifically, and reflecting the composition of the Company's fleet, the average published market index rates for Supramax and Panamax vessels increased approximately 214% from an average of $8,020 in 2020 to $25,146 in 2021.

We have historically experienced fluctuations in our results of operations on a quarterly and annual basis.

We expect to experience continued fluctuations in our operating results in the foreseeable future due to a variety of factors, including dislocation in supply of vessels, demand for commodities carried on our vessels, competition, and seasonality.

Although our trades are not heavily focused on China, the dry bulk sector of the shipping industry is closely correlated to economic activity in China, which was the first country to be impacted by COVID-19.

This resulted in closures and an overall contraction in China's economic output in January and February 2020.

By March 2020, China began to loosen restrictions and show some signs of economic recovery which resulted in a slight rebound in the BDI.

However, also in early March, the global spread of the virus accelerated, especially in parts of Europe and the United States resulting in various forms of nationwide shut downs.

Global economic output continues to be impacted by the COVID-19 pandemic.

The continued implications of these shutdowns on the demand for dry bulk goods will be highly dependent on the duration and how quickly various countries can return to normal levels of industrial activity, which is uncertain.

Given the uncertainties of the COVID-19 pandemic, we have taken steps to manage and reduce operating costs, further enhance our financial flexibility, and protect the health and safety of our crew and shore based employees.

Consistent with our chartering strategy we have redelivered chartered-in vessels when possible and continue to charter in new vessels, when needed, for short term periods to limit our exposure to further volatility in the market and to manage our time charter expenses in future periods.

Further, in March 2020 we temporarily suspended our dividend to maintain a strong liquidity position and only recently in December 2020 reinstated a $0.02 per common share quarterly dividend.

We have implemented stricter protocols around crew changes, and required quarantine periods, and shore based employees in our Newport, Copenhagen, Singapore and Athens offices continue to comply with local and international guidelines as we begin to return to our office locations.

Given the possibilities of wave surges of COVID-19 globally and the uncertainty where they may impact in the future, we have taken steps to manage operating costs, further enhance our financial flexibility, selectively deploy our capital, and protect the health and safety of our crew and shore based employees.

Consistent with our chartering strategy we have redelivered chartered-

in vessels when possible and continue to charter in new vessels, when needed, for short term periods dependent on market conditions at the time.

TCE Performance

The Company's TCE rates were down 12% from $14,199 for year ended December 31, 2019 to $12,433 for the year ended December 31, 2020.

However the Company's achieved TCE rates continued to outperform against the average of the Baltic panamax and supramax market indexes and exceeded the average market rates by approximately 55% due to its cargo-focused strategy and specialized fleet.

The Company's TCE rates increased 102% from $12,433 for year ended December 31, 2020 to $25,056 for the year ended December 31, 2021.

The average supramax and panamax market index rates for 2021 were $25,146 per day.

Pangaea’s earned TCE rates were on par with or below the market index during the first three quarters due to the impact of timing of pricing and duration of performing voyages in a rapidly rising market as well as the impact of performance of voyages on fixed freight rates from our long term contracts of affreightment that are less than spot market rates.

However, in the fourth quarter of 2021, the Company's achieved TCE rates outperformed the average of the Baltic panamax and supramax market indexes and exceeded the average market rates by approximately 16%.

This was the result of the factors noted above, specifically, the pricing and performing of voyages on fixed freight rates as the prevailing market declined as part of the Company's strategy of protecting downside exposure to declining markets.

2021 Highlights

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of $67.2 million as compared to $11.4 million for the year ended December 31, 2020.

• Income from operations of $19.7 million, down from $23.3 million for 2019.

• Income from operations of $78.9 million, up from $19.7 million for 2020.

• Earnings per share were $1.50 as compared to $0.26 for the year ended December 31, 2020.

• Cash flow from operations of $61.7 million, compared to $20.8 million for the prior year.

• Pangaea's TCE rates decreased 12% to $12,433 from $14,199 in 2019 while the market average for the year was approximately $8,020 per day.

• At December 31, 2020, Pangaea had $48.4 million in cash, restricted cash and cash equivalents.

• The Company acquired an additional one-third equity interest in its partially-owned consolidated subsidiary Nordic Bulk Holding Company Ltd., which owns six modern 1-A ice-class panamax bulk vessels, increasing its equity interest to 66.7%.

• Pangaea's TCE rates increased 102% to $25,056 from $12,433 in 2020.

• At December 31, 2021, Pangaea had $56.2 million in cash and cash equivalents.

Results of Operations

3 unchanged sentences

The number of shipping days increased 12% to 19,895 in the fiscal year ended December 31, 2021, from 17,777 for the same period in 2020.

The revenue decrease was due to a 12% decrease in the average TCE rate, which was $12,433 per day for the twelve months ended December 31, 2020, compared to $14,199 per day for the same period in 2019.

The revenue increase was due to a 102% increase in the average TCE rate, which was $25,056 per day for the twelve months ended December 31, 2021, compared to $12,433 per day for the same period in 2020.

Components of revenue are as follows:

Voyage revenues for the fiscal year ended December 31, 2020, decreased 4% to $349.7 million from $365.7 million for the same period in 2019.

The decrease in voyage revenues was primarily due to lower average TCE rates as noted above.

This was offset by an increase in voyage days of 4% to 14,756 for the twelve months ended December 31, 2020 compared to 14,199 for the same period in 2019.

Charter revenues decreased 29%, to $33.2 million for the year ended December 31, 2020 from $46.5 million for the year ended December 31, 2019.

The decrease in charter revenues was due to a decline in time charter days and a decrease in drybulk market rates as discussed above.

Time charter days were down 5% to 3,021 in 2020 from 3,177 in 2019.

Voyage revenues for the fiscal year ended December 31, 2021, increased 76% to $614.5 million from $349.7 million for the same period in 2020.

The increase in voyage revenues was primarily due to higher average TCE rates as noted above.

The number of voyage days of increased 8% to 15,932 for the twelve months ended December 31, 2021 from 14,756 for the same period in 2020.

Charter revenues increased 213% to $103.6 million for the year ended December 31, 2021 from $33.2 million for the year ended December 31, 2020.

The increase in charter revenues was due to an increase in drybulk market rates and an increase in time charter days, which were up 31% to 3,963 in 2021 from 3,021 in 2020.

The optionality of our chartering strategy allows the Company to selectively release excess ship days, if any, into the market under time charters arrangements.

Voyage Expenses

Voyage expenses for the fiscal year ended December 31, 2020 were $161.9 million compared to $165.5 million for the year ended 2019, a decrease of approximately 2%.

The decrease in voyage expenses was primarily due t o total cost of bunkers consumed in the year ended December 31, 2020 decreasing approximately 11% from the same period of 2019.

The benchmark, Brent crude oil, averaged $42 per barrel in 2020 compared to $64 per barrel in 2019, a decline of approximately 34%.

This was offset by an increase in voyage days of 4% for the twelve months ended December 31, 2020 compared to the same period in 2019.

Voyage expenses for the fiscal year ended December 31, 2021 were $219.6 million compared to $161.9 million for the year ended 2020, an increase of approximately 36%.

The increase was primarily attributable t o an increase in bunker costs, port expenses and canal fees.

Further voyage days increased by 8% to 15,932 days in the twelve months ended December 31, 2021 from 14,756 days for the same period in 2020 .

Total costs of bunkers consumed increased by 45% for the twelve months ended December 31, 2021 compared to the same period in 2020 due to the increasing market price for bunkers.

Port expenses increased by 22% compared to prior year as a result of increased canal fees incurred in the current year.

Charter Hire Expenses

The Company charters in vessels, typically on short term basis, from other shipowners to supplement its owned fleet.

Charter expenses paid to third party shipowners decreased to $127.8 million for the year ended December 31, 2020 from $133.0 million for the year ended December 31, 2019.

The 4% decrease in charter expenses was due to the 16% decrease in chartered in rates, which were $11,058 per day in 2020 as compared to $13,170 per day in 2019.

This was offset by an increase in chartered in days of 14%, which were 11,554 in 2020 compared to 10,095 in 2019.

This reflects the Company's ability to adapt to changing market conditions by adjusting the chartered-in profile to meet its client's cargo commitments.

Charter hire expenses paid to third party shipowners were $335.0 million for the year ended December 31, 2021, compared to $127.8 million for the year ended December 31, 2020, a 162% increase.

The increase in charter hire expenses was primarily due to an increase in market rates to charter-in vessels.

The average published market rates for Supramax and Panamax vessels increased approximately 214% from an average of $8,020 in 2020 to $25,146 in the same period of 2021.

Additionally, the number of chartered-in days increased 11% from 11,554 days in the twelve months ended December 31, 2020 to 12,859 days for the twelve months ended December 31, 2021 as the Company limited its exposure to the prevailing market in 2020 due to the impacts of COVID-19 and subsequently increased the chartered-in fleet to meet increasing demand in 2021.

The Company's flexible charter-in strategy allows it to supplement its owned fleet with short term chartered-in tonnage at prevailing market prices, when needed, to meet cargo demand.

Vessel Operating Expenses

Vessel operating expenses decreased 16%, from $45.3 million for the year ended December 31, 2019 to $38.0 million for the year ended December 31, 2020.

The decrease in vessel operating expenses was primarily due to the sale of vessels in the fourth quarter of 2019 and 2020, which decreased the total number of owned days from 7,521 in 2019, to 6,343 in 2020, a 16% decrease year over year.

Vessel operating expenses increased 12%, from $38.0 million for the year ended December 31, 2020 to $42.7 million for the year ended December 31, 2021.

The increase in vessel operating expenses was predominantly due to an increase in owned days resulting from the acquisition of vessels in 2021.

Excluding technical management fees, vessel operating expenses on a per day basis were $5,260 for the twelve months ended December 31, 2021 and $5,432 for the twelve months ended December 31, 2020.

Technical management fees were approximately $3.6 million and $4.2 million during the twelve months ended December 31, 2020 and 2019, respectively.

Technical management fees were approximately $3.9 million and $3.6 million, respectively, for the twelve months ended December 31, 2021 and 2020, respectively.

General and Administrative Expenses

General and administrative expenses decreased from $17.4 million for the year ended December 31, 2019 to $15.9 million for the year ended December 31, 2020.

The decrease was due to reduction in travel expenses as a result of the COVID-19 pandemic as well as the reduction of incentive compensation.

General and administrative expenses increased from $15.9 million for the year ended December 31, 2020 to $19.0 million for the year ended December 31, 2021.

The increase was primarily due to an increase in incentive compensation.

Depreciation and Amortization

Depreciation and amortization expense decreased $1.5 million or 8.0% due to the 16% decrease in ownership days to 6,343 days in 2020 from 7,521 days in 2019, offset by an increased in the amortization of deferred drydocking costs.

The decrease in ownership days is due to the sale of vessels, as noted above, which were sold as part of a fleet renewal plan.

Depreciation and amortization expense increased $5.9 million or 35%.

The increase was primarily due to the 16% increase in ownership days to 7,383 days in 2021 from 6,343 days in 2020.

The increase in ownership days is due to the acquisition of vessels, as noted above, which was part of a fleet renewal plan.

The increase in depreciation and amortization expense is also due to an increase in the cost base of our owned fleet due to the capitalization of ballast water treatment systems ("BWTS") on our vessels.

Loss on sale of vessels

The Company recorded a loss of $0.7 million on the sale of the m/v Bulk Beothuk, and m/v Bulk Patriot, offset by a small gain on the sale of the m/v Bulk Barents in the year ended December 31, 2020.

The Company recorded a loss of $4.6 million on the sales of m/v Bulk Juliana and m/v Bulk Bothnia in the year ended December 31, 2019.

The Company recorded a loss of $0.7 million on the sale of the m/v Bulk Beothuk, and m/v Bulk Patriot, offset by a small gain on the sale of the m/v Nordic Barents in the year ended December 31, 2020.

No loss on sales of vessels were recorded in the year ended December 31, 2021.

Impairment of vessels

During the twelve months ended December 31, 2020 and 2019, the Company recorded $1.8 million and $4.8 million of impairment of vessel assets, respectively.

During the twelve months ended December 31, 2020, the Company recorded $1.8 million of impairment of vessel assets.

On June 29, 2020 the Company entered into an agreement to sell the Bulk Beothuk for $4.6 million, the sale was finalized and the vessel delivered to its new owner on August 4, 2020.

A loss on impairment of $1.8 million was recorded in the second quarter of 2020 when the Memorandum of Agreement was signed as the carrying value of the assets exceeded the fair value.

On October 28, 2019, the Company entered into a memorandum of agreement for the sale of m/v Bulk Patriot below the carrying amount of the vessel, the vessel was delivered in the first quarter of 2020.

As a result, the Company recorded a loss on impairment of the vessel totaling $4.8 million, which is equal to the excess of the carrying amount of the asset over the agreed upon sale value.

No loss on impairment of vessels were recorded in the year ended December 31, 2021.

Unrealized (Loss) Gain on Derivative Instruments

1 unchanged sentence

The usage of such derivatives can lead to fluctuations in the Company’s reported results from operations on a period-to-period basis.

The Company recorded an unrealized loss on derivative instruments of $0.2 million in the year ended December 31, 2020 and recorded an unrealized gain of $2.8 million in the year ended December 31, 2019.

The Company recorded an unrealized gain on derivative instruments of $3.9 million in the year ended December 31, 2021 and recorded an unrealized loss of $0.2 million in the year ended December 31, 2020.

Refer to Note 6 Margin Account, Derivative and Fair Value Measures to the consolidated financial statements for further information.

1 unchanged sentence

Liquidity and Cash Needs

The Company has historically financed its capital requirements with cash flow from operations, the issuance of common stock, proceeds from related party debt, proceeds from non controlling interests, and proceeds from long-term debt and finance lease financing arrangements.

The Company has historically financed its capital requirements with cash flow from operations, the issuance of common stock, proceeds from non-controlling interests, and proceeds from long-term debt and finance lease financing arrangements.

The Company has used its capital primarily to fund operations, vessel acquisitions, and the repayment of debt and the associated interest expense.

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As a result, the Company may be unable to pursue opportunities to expand its business.

At December 31, 2020 and 2019, the Company had working capital of $2.2 million and $37.1 million, respectively.

The significant reduction in working capital is the result of balloon payments on the Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd., Bulk Nordic Oshima Ltd., and Bulk Nordic Oasis Ltd.

Loan Agreements that are due and payable in October 2021.

On March 8, 2021, the Company obtained a commitment letter from its lenders for a principal amount of $53 million.

The proceeds from the new senior secured loan will be used to repay in full of the outstanding debt under:

(i) the Amended and Restated Loan Agreement of Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd.

Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd.

And Bulk Nordic Oshima Ltd.

dated September 28, 2015., (ii) the Bulk Nordic Oasis Ltd.

Loan Agreement dated December 11, 2015, and (iii) for general corporate purposes.

The refinance is expected to be completed within March of 2021.

At December 31, 2021 and 2020, the Company had working capital of $72.2 million and $0.5 million, respectively, an increase primarily due to the refinancing of Bulk Nordic Odin, Bulk Nordic Olympic, Bulk Nordic Oshima, and Bulk Nordic Oasis Loan Agreements in 2021.

The increase in working capital is also due to an increase in accounts receivable due to increased revenue in 2021.

Considerations made by management in assessing the Company’s ability to continue as a going concern are its ability to consistently generate positive cash flows from operations, which were approximately $61.7 million in 2021, and $20.8 million in 2020;

its excess of cash and cash restricted by facility agents over the current portion of secured long-term debt and finance lease obligations, and its focus on contract employment (COAs).

In addition, the Company has demonstrated its ability to adapt to changing market conditions by changing the chartered-in profile to meet its cargo commitments.

In addition, the Company has demonstrated its ability to adapt to changing market conditions by changing the chartered-in profile to meet its cargo commitments and react to volatile market rates.

The Company believes that future operating cash flows together with cash on hand, availability of borrowings, and contributions from non-controlling interests will be sufficient to meet our future operating and capital expenditure cash requirements for the next 12 months and the foreseeable future.

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The Company’s capital expenditures relate to the purchase of vessels and interests in vessels, and to capital improvements to its vessels which are expected to enhance the revenue earning capabilities and safety of these vessels.

The Company’s owned and controlled fleet at December 31, 2020 includes:

eight Panamax drybulk carriers (six of which are Ice-Class 1A);

seven Supramax drybulk carriers, and two Ultramax drybulk carriers (both of which are Ice-Class IC).

The Company’s owned or partially owned and controlled fleet at December 31, 2021 includes:

nine Panamax drybulk carriers (six of which are Ice-Class 1A);

eight Supramax drybulk carriers, three Ultramax drybulk carriers (Two of which are Ice-Class IC), and four Post Panamax Ice Class 1A drybulk vessels.

In addition to vessel acquisitions that the Company may undertake in future periods, its other major capital expenditures include funding its program of regularly scheduled drydockings necessary to make improvements to its vessels, as well as to comply with international shipping standards and environmental laws and regulations.

This includes installation of ballast water treatment systems required under new regulations, the cost of which will be $0.5 million to $0.7 million per vessel.

This includes installation of BWTS required under new regulations, the cost of which will be $0.5 million to $0.7 million per vessel.

The Company has some flexibility regarding the timing of drydocking, but the total cost is unpredictable.

The Company expects to perform two special surveys in 2022 at an aggregate total cost of approximately $3.0 million.

The Company expects to perform three intermediate surveys in 2022 at an aggregate total cost of approximately $1.5 million.

The Company estimates that offhire related to the surveys and related repair work is ten to twenty days per vessel, depending on the size and condition of the vessel.

Funding of these requirements is anticipated to be met with cash from operations.

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Net cash used in investing activities $ (197.8) $ (6.9)

Net cash used in financing activities $ (18.6) $ (0.9)

Net cash provided by (used in) financing activities $ 143.9 $ (18.6)

Operating Activities

Net cash provided by operating activities during the year ended December 31, 2021 was $61.7 million, compared to net cash provided by operating activities of $20.8 million during the year ended December 31, 2020.

The decrease is predominantly due to the decrease in net income after adjusting for non-cash losses attributable to impairment of vessels and loss on sale of vessels,

and to changes in operating assets and liabilities.

Fluctuations in these accounts stem from changes in market rates and to the timing of voyages that are in progress at the balance sheet date.

The cash flows from operating activities increased primarily due to the increase in income from operations, partially offset by the impact of changes in working capital.

Investing Activities

Net cash used in investing activities was $6.9 million for 2020, which consists primarily $15.0 million paid to acquire an additional one-third interest in NBHC.

Net cash used in investing activities was $197.8 million for 2021, which consists primarily $196.6 million for vessel acquisitions and investments in non-consolidated subsidiaries for $1.1 million.

Net cash used in investing activities was $6.9 million for 2020, which consists primarily of $15.0 million paid to acquire an additional one-third interest in NBHC.

Refer to Note11 Other Long-Term Liabilities for further information.

This use of cash was offset by proceeds from the sale of three vessels of $11.7 million.

Net cash used in investing activities was $46.6 million for 2019, which consists primarily of $41.4 million paid to acquire vessels, offset by proceeds from the sale of two vessels for $10.4 million.

In addition, the Company paid $15.4 million in deposits for the four newbuild vessels under construction.

Financing Activities

Net cash provided by financing activities in 2021 was $143.9 million compared to net cash used in financing activities of $18.6 million for the same period of 2020.

During the twelve months ended December 31, 2021, the Company received $220.3 million in proceeds from long-term debt and finance leases and $9.2 million in proceeds from non-controlling interest recorded as a long-term liability.

The Company repaid $62.0 million of long term debt, $9.9 million of finance leases and $2.5 million of other long term liabilities.

The Company also paid $5.5 million of common stock cash dividends and $3.3 million cash dividends to non-controlling interests.

Net cash used in financing activities was $18.6 million for 2020, which consists of $18.0 million of proceeds from secured credit facilities;

repayments of $23.0 million on credit facilities and repayments of $12.5 million on financing arrangements.

Net cash used in financing activities was $0.9 million for 2019, which consists of $14.0 million of proceeds from secured credit facilities and $25.6 million of proceeds from financing arrangements;

$3.0 million payments of financing fees;

$2.6 million of repayments of related party debt;

$20.6 million repayments of credit facilities and repayments of $6.6 million on financing arrangements;

$8.1 million of dividends paid on common stock and $4.7 million of dividends paid on non-controlling interests;

the Company received $5.2 million from the non-controlling interest contribution.

Borrowing Activities

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Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd.

Loan Agreement (2)

$ 25,466,300 $ 28,466,300 4.01 % October 2021

Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd.

Loan Agreement (2) (3)

— 12,854,405 N/A December 2020

Bulk Nordic Oshima Ltd.

Amended and Restated Loan Agreement (2)

12,004,295 13,504,295 2.48 % October 2021

Loan Agreement $ — $ 25,466,300 Not applicable

Bulk Nordic Oasis Ltd.

Loan Agreement 14,000,000 15,500,000 4.30 % October 2021

Loan Agreement — 14,000,000 Not applicable

Bulk Nordic Oshima Ltd.

Amended and Restated Loan Agreement — 12,004,295 Not applicable

Bulk Nordic Odyssey (MI) Corp., Bulk Nordic Orion (MI) Corp.

Senior Secured Term Loan Facility 18,000,000 — 2.95 % December 2027

Senior Secured Term Loan Facility (2) (3)

16,224,189 18,000,000 2.95 % December 2027

Bulk Nordic Oshima (MI) Corp., Bulk Nordic Odin (MI) Corp., Bulk Nordic Olympic (MI) Corp., Bulk Nordic Oasis (MI) Corp.

Secured Term Loan Facility (2) (3) (4)

49,400,000 — 3.38 % June 2027

The Amended Senior Facility - Dated May 13, 2019 (formerly The Amended Senior Facility - Dated December 21, 2017) (5)

Bulk Nordic Six Ltd.

- Tranche A 12,233,329 13,299,997 3.69 % May 2024

- Tranche A (2)

11,166,661 12,233,329 4.39 % May 2024

Bulk Nordic Six Ltd.

- Tranche B 2,330,000 2,590,000 2.53 % May 2024

Bulk Pride - Tranche C 5,200,000 6,300,000 4.69 % May 2024

Bulk Independence - Tranche E 12,500,000 13,500,000 2.84 % May 2024

Bulk Pride - Tranche C (2)

4,100,000 5,200,000 5.39 % May 2024

Bulk Independence - Tranche E (2)

11,500,000 12,500,000 3.54 % May 2024

Bulk Freedom Loan Agreement 2,600,000 3,200,000 3.95 % June 2022

Bulk Valor Corp.

Loan and Security Agreement (2)

12,718,279 — 3.29 % June 2028

Bulk Promise Corp.

12,453,926 — 2.43 % October 2027

109 Long Wharf Commercial Term Loan 484,066 593,666 2.09 % April 2026

2 unchanged sentences

(1,697,209) (643,018)

$ 121,279,912 $ 105,144,572

current portion (15,443,115) (57,382,674)

1 unchanged sentence

(1) As of December 31, 2021.

(2) Interest rates on the loan facilities are fixed.

(3) The borrowers under this facility are owned by NBHC.

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NBHC is consolidated in accordance with ASC 810-10 and as such, amounts pertaining to the non-controlling ownership held by the third parties in the financial position of NBHC are reported as non-controlling interest in the accompanying balance sheets.

(4) On April 26, 2021, NBHC entered into a new Senior Secured Term Loan Facility with two new lenders.

The agreement advanced $53.0 million in respect of the m/v Nordic Oshima, m/v Nordic Olympic, m/v Nordic Odin and m/v Nordic Oasis.

The agreement requires repayment of the advance in 24 equal quarterly principal installments of $1.2 million beginning on June 15, 2021 and a balloon payment of $24.2 million due in June 2027.

(5) This facility is cross-collateralized by the vessels m/v Bulk Endurance, m/v Bulk Pride, and m/v Bulk Independence and is guaranteed by the Company.

(6) A portion of unamortized debt issuance costs were reclassified as a reduction of the finance leases liabilities.

Refer to Note 10 "Commitments and Contingencies" for additional information.

Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd.

5 unchanged sentences

The agreement requires repayment of the advances as follows:

In respect of the Odin and Olympic advances, repayment to be made in 28 equal quarterly installments of $375,000 per borrower (one of which was paid prior to the amendment by each borrower) and balloon payments of $11,233,150 due with each of the final installments in October 2021.

In respect of the Odyssey and Orion advances, repayment to be made in 20 quarterly installments of $375,000 per borrower and balloon payments of $5,677,203 due with each of the final installments in September 2020.

In September 2020 the Company amended the facility to make an additional quarterly installment of $375,000 per borrower and extend the balloon payments to December 2020 which were paid in full on December 23, 2020.

In respect of the Oshima advance, repayment to be made in 28 equal quarterly installments of $375,000 and a balloon payment of $11,254,295 due with the final installment in October 2021.

Interest on 50% of the advances to Odin and Olympic was fixed at 3.95% in January 2017.

Interest on the remaining advances to Odin and Olympic was floating at LIBOR plus 2.0% and was fixed at 4.07% on April 27, 2017.

Interest on 50% of the advance to Oshima was fixed at 4.16% in January 2017.

Interest on the remaining advance to Oshima is floating at LIBOR plus 2.25% (2.48% at December 31, 2020).

The amended loan is secured by first preferred mortgages on the m/v Nordic Odin, m/v Nordic Olympic and m/v Nordic Oshima, the assignment of earnings, insurances and requisite compensation of the three entities, and by guarantees of their shareholders.

The amended agreement contains one financial covenant that requires the Company to maintain minimum liquidity and a collateral maintenance ratio clause, which requires the aggregate fair market value of the vessels plus the net realizable value of any additional collateral provided, to remain above defined ratios.

At December 31, 2020 and December 31, 2019, the Company was in compliance with this clause.

In respect of the Oshima advance, repayment to be made in 28 equal quarterly installments of $375,000 and the loan was repaid in full on April 26, 2021.

The Bulk Nordic Oasis Ltd.

1 unchanged sentence

The agreement advanced $21,500,000 in respect of the m/v Nordic Oasis.

The agreement requires repayment of the advance in 24 equal quarterly installments of $375,000 beginning on March 28, 2016 and a balloon payment of $12,500,000 due with the final installment in October 2021.

Interest on this advance is fixed at 4.30%.

The loan is secured by a first preferred mortgage on the m/v Nordic Oasis, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders.

Additionally, the agreement contains a collateral maintenance ratio clause which requires the fair market value of the vessel plus the net realizable value of any additional collateral previously provided, to remain above defined ratios.

As of December 31, 2020 and December 31, 2019, the Company was in compliance with this covenant.

The agreement requires repayment of the advance in 24 equal quarterly installments of $375,000 beginning on March 28, 2016 and the loan was repaid in full on April 26, 2021.

The Bulk Nordic Odyssey (MI) Corp., Bulk Nordic Orion (MI) Corp.

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As of December 31, 2020 the Company was in compliance with this covenant.

As of December 31, 2021 the Company was in compliance with its financial covenants.

Bulk Nordic Oshima (MI) Corp., Bulk Nordic Odin (MI) Corp., Bulk Nordic Olympic (MI) Corp., and Bulk Nordic Oasis (MI) Corp.

Facility Agreement dated April 26, 2021

On April 26, 2021, NBHC entered into a new Senior Secured Term Loan Facility with two new lenders.

The agreement advanced $53.0 million in respect of the m/v Nordic Oshima, m/v Nordic Olympic, m/v Nordic Odin and m/v Nordic Oasis.

The agreement requires repayment of the advance in 24 equal quarterly principal installments of $1,200,000 beginning on June 15, 2021 and a balloon payment of $24,200,000 due in March 2027.

Interest on this advance is fixed at 3.38% effective May 5, 2021.

The Loan is secured by a first lien on m/v Nordic Bulk Oshima, m/v Nordic Bulk Odin, m/v Nordic Bulk Olympic and m/v Nordic Bulk Oasis.

The Company used a portion of the proceeds of the loan to repay the outstanding balance of $51.5 million for the Nordic Oshima, Nordic Odin, Nordic Olympic and Nordic Oasis loan facilities which was set to mature on October 1, 2021.

As of December 31, 2021 the Company was in compliance with its financial covenants.

The Amended Senior Facility - Dated May 13, 2019 (previously identified as The Amended Senior Facility - Dated December 21, 2017)

6 unchanged sentences

Interest on this advance was fixed at 3.69% through March 2021, fixed at 4.39% through December 2021, and fixed at 3.46% thereafter.

The agreement also advanced $3,500,000 under Tranche B, which is payable in 28 equal quarterly installments of $65,000 beginning on September 27, 2017, and a balloon payment of $1,745,000 due with the final

installment in May 2024.

Interest on this advance is floating at LIBOR plus 1.70% (2.55% at December 31, 2021) through March 2021, and thereafter at LIBOR plus 2.4%.

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At December 31, 2021 and December 31, 2020, the Company was in compliance with these covenants.

The Bulk Valor Corp.

Loan Agreement -- Dated June 17, 2021

The agreement advanced $13,350,000 in respect of the m/v Bulk Valor on June 17, 2021.

The agreement requires repayment of the loan in 28 quarterly installments commencing on September 17, 2021.

A balloon payment is due on June 17, 2028.

Interest on this advance is fixed at 3.29%.

The loan is secured by a first preferred mortgage on the m/v

Bulk Valor, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders.

As of December 31, 2021 the Company was in compliance with its financial covenants.

The Bulk Promise Corp.

Loan Agreement -- Dated July 12, 2021

The agreement advanced $12,800,000 in respect of the m/v Bulk Promise on July 7, 2021.

The agreement requires repayment of the loan in 24 quarterly installments of $346,074 commencing on October 15, 2021.

A balloon payment of $4,494,224 is due on October 15, 2027.

Interest on this advance is floating at three-month LIBOR plus 2.30%.

The loan is secured by a first preferred mortgage on the m/v Bulk Promise, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders.

As of December 31, 2021 the Company was in compliance with its financial covenants.

The future minimum annual payments under the debt agreements are as follows:

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$ 4,151,192 $ (1,303,282) $ 2,847,910

Commissions payable (trade payables) (iii)

— 38,896 38,896

Included in current related party notes payable on the consolidated balance sheets:

1 unchanged sentence

Total current related party notes payable $ 242,852 $ — $ 242,852

King George Slag LLC is a joint venture of which the Company owns 25%.

King George Slag LLC is a joint venture of which the Company owns 25% at December 31, 2021 and 2020 .

Seamar Management S.A.

("Seamar") is a joint venture of which the Company owns 51% at December 31, 2021 and 2020 .

Phoenix Bulk Carriers (Brasil) Intermediacoes Maritimas Ltda.

- a wholly-owned Company of a member of the Board of Directors

Under the terms of a technical management agreement between the Company and Seamar Management S.A.

1 unchanged sentence

During the years ended December 31, 2021 and 2020, the Company incurred technical management fees of $2,847,120 and $2,761,800 under this arrangement, which is included in vessel operating expenses in the consolidated statements of income.

The total amounts payable to Seamar at December 31, 2020 and 2019, (including amounts due for vessel operating expenses), were $4,151,192 and $5,679,768, respectively.

The total amounts payable

to Seamar at December 31, 2021 and 2020, (including amounts due for vessel operating expenses), were $2,847,910 and $4,151,192, respectively.

Accrued dividends consist of the following:

8 unchanged sentences

Balance at December 31, 2021 $ — $ 213,765 $ 213,765

(1) Accrued dividends on unvested restricted shares under the Company's incentive compensation plan, plus accrued dividends declared on December 16, 2020 to all shareholders of record as of March 1, 2021.

(2) Payable to related parties.

(1) Accrued dividends on unvested restricted shares under the Company's incentive compensation plan.

Effect of Inflation

We do not believe that inflation has had a material effect on our business, results of operations or financial condition in the past two years.

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

Off-Balance Sheet Arrangements

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis