What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-15 compared with 2022-03-16 · 137 added, 121 removed, 316 unchanged (45% of the section changed)

45 unchanged sentences

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

During the first quarter of 2022, the Company determined that a triggering event occurred related to the sale of a vessel, as the carrying value exceeded its fair value.

On April 20, 2022, the Company signed a memorandum of agreement to sell the m/v Bulk Pangaea for a total net consideration of $8.6 million after brokerage commissions.

As a result, we recorded an impairment charge of $3.0 million in the first quarter of 2022.

The impairment analysis did not indicate any impairment on the remaining fleet.

Also the Company concluded that no triggering event had occurred during the remaining period of the 2022 which would require impairment testing.

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 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.

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, 2022.

12 unchanged sentences

m/v Bulk Friendship September 2019 SMX 2011 14,447 13,681

m/v Bulk Sachuest October 13 2022 SMX 2010 17,364 17,188

m/v Bulk Independence May 2019 SMX 2008 14,393 14,880

2 unchanged sentences

m/v Bulk Freedom June 2017 SMX 2005 9,016 7,464

m/v Bulk Newport September 2013 SMX 2003 15,546 11,567

m/v Bulk Newport (2)

September 2013 SMX 2003 15,546 10,212

m/v Bulk Spirit February 2019 SMX 2009 13,000 11,703

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

m/v Bulk Xaymaca (1)

August 2018 PMX 2006 14,010 13,083

m/v Bulk Concord February 2022 PMX 2009 19,900 19,395

m/v Bulk Promise July 2021 PMX 2013 18,633 17,619

6 unchanged sentences

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

(2) Vessel was sold on March 3, 2023

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting.

Companies can apply the ASU immediately, however the guidance will only be available until December 31, 2022.

In March 2020, the FASB issued ASU No.

2020-04, “Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

In January 2021, the FASB issued ASU No.

2021-01, “Reference Rate Reform (Topic 848):

Scope,” which clarified that certain optional expedients and exceptions in Topic 848 apply to derivatives that are affected by the discounting transition due to reference rate reform.

In December 2022, the FASB issued ASU No.

2022-06, "Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848," which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief under Topic 848.

The Company is currently evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures.

1 unchanged sentence

2016-13, Financial Instruments – Credit Losses.

For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to a forward-looking expected credit loss model, which generally will result in the earlier recognition of allowances for losses.

For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to a forward-looking

expected credit loss model, which generally will result in the earlier recognition of allowances for losses.

The new standard is effective for the Company at the beginning of 2023.

1 unchanged sentence

The Company is currently assessing the new guidance and its impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of 2023.

The adoption of ASU 2016-13 is currently not expected to have a material impact on the Company's consolidated financial statements.

Important Financial and Operational Terms and Concepts

25 unchanged sentences

Business Overview

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

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.

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.

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.

The dry bulk sector of the transportation and logistics industry is cyclical and can be volatile due to changes in supply of vessels and demand for transportation of dry bulk commodities.

After reaching levels not seen in over a decade in 2021, the dry bulk freight market remained strong in historical terms in the first half of 2022 before slowing down in the second half of the year due to decreased freight demand.

The Baltic Dry Index (“BDI”), a measure of dry bulk market performance, averaged 1,832 for 2022, compared to an average of 2,956 for 2021, down approximately 38%.

More specifically, and reflecting the composition of the Company's fleet, the average published market rates for Supramax and Panamax vessels decreased approximately 20% from an average of $25,146 in 2021 to $20,012 in 2022.

We have historically experienced fluctuations in our results of operations on a

quarterly and annual basis due to the volatility of the dry bulk sector.

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

Effect of Inflation

High inflation in the United States and in many of the global economies where the Company operates is beginning to impact vessel operating costs, including crew travel, transportation of equipment and spares, and drydocking costs.

We expect crew payroll expenses to continue to increase over the near and medium future, and other inflated cost changes may make our vessel daily operating costs higher.

Increases in the cost of fuel consumed on voyages are usually absorbed by cargo market rates passed on to customers or covered by fuel cost pass through under the terms of long-term contracts.

Because interest rates on a large portion of the Company’s long-term debt, and finance leases is fixed or capped, the impact of higher interest rates on the Company’s earnings is limited.

TCE Performance

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.

For the year ended December 31, 2022, the Company's TCE rates were down only 2% to $24,434 from $25,056 for the year ended December 31, 2021, while the overall dry bulk market rates declined by approximately 20% for the year ended December 31, 2022.

The Company's achieved TCE rate for the year ended December 31, 2022 outperformed the average of the Baltic Panamax and Supramax market indexes and exceeded the average market rates by approximately 22% due to its long-term contracts of affreightment, ("COAs"), its specialized fleet and its cargo-focused strategy.

2022 Highlights

• Net income attributable to Pangaea Logistics Solutions Ltd.

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

• 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 increased 102% to $25,056 from $12,433 in 2020.

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

was $79.5 million for twelve months ended December 31, 2022 as compared to $67.2 million for the same period of 2021.

• Diluted net income per share was $1.76 for twelve months ended December 31, 2022, as compared to $1.50 for the same period of 2021.

• Time Charter Equivalent ("TCE") rates earned by Pangaea was $24,434 per day for twelve months ended December 31, 2022 and $25,056 per day for the same period of 2021.

• Adjusted EBITDA was $140.9 million for twelve months ended December 31, 2022, as compared to $105.1 million for the same period of 2021.

• At the end of the year, Pangaea had $128.4 million in cash, and cash equivalents.

Results of Operations

1 unchanged sentence

Pangaea’s revenues are derived predominantly from voyage charters and time charters.

Total revenue for the fiscal year ended December 31, 2021, was $718.1 million compared to $382.9 million, for the same period in 2020.

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 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.

Total revenue for the fiscal year ended December 31, 2022, was $699.7 million compared to $718.1 million, for the same period in 2021, a 3% decrease.

The number of shipping days decreased 11% to 17,715 in the fiscal year ended December 31, 2022, from 19,895 for the same period in 2021.

The revenue decrease was due to a 2% decrease in the average TCE rate, which was $24,434 per day for the twelve months ended December 31, 2022, compared to $25,056 per day for the same period in 2021.

Components of revenue are as follows:

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 revenues increased by 4% for the fiscal year ended December 31, 2022 to $640.0 million from $614.5 million for the same period in 2021.

The increase in voyage revenues was primarily due to higher average TCE rates earned throughout the first half of 2022 and partially offset by declined market rates in the second half of the 2022.

The number of voyage days decreased 4% to 15,237 for the twelve months ended December 31, 2022 from 15,932 for the same period in 2021.

Charter revenues decreased to $59.7 million from $103.6 million, or 42%, for the year ended December 31, 2022 compared to the same period in 2021.

The decrease in charter revenues was due to a decrease in time charter days as well as a decrease in charter hire rates evidenced by the decrease in index rates for Panamax and Supramax vessels of approximately 20% compared to the same period of 2021.

The time charter days were down 37% to 2,478 in the twelve months ended December 31, 2022 from 3,963 in the twelve months ended December 31, 2021.

The time charter revenue per day was $24,078 for the twelve months ended December 31, 2022 compared to $26,147 for the same period of 2021.

The optionality

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

Voyage Expenses

Voyage expenses for the fiscal year ended December 31, 2022 were $262.1 million compared to $219.6 million for the year ended 2021, an increase of approximately 19%.

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.

The increase is primarily due to an increase in bunker consumption expense of $48.5 million driven by an increase in bunker fuel prices, partially offset by a decrease in port charges and canal tolls of $3.6 million.

Total costs of bunkers consumed increased by 42% for the twelve months ended December 31, 2022 compared to the same period in 2021.

The port charges and canal tolls decreased primarily due to a decrease in voyage days of 4% to 15,237 days in the twelve months ended December 31, 2022 from 15,932 days for the same period in 2021 .

Charter Hire Expenses

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

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.

Charter hire expenses paid to third party shipowners were $222.3 million for the year ended December 31, 2022, compared to $335.0 million for the year ended December 31, 2021, a 34% decrease.

The decrease in charter hire expenses was primarily due to a decrease in market rates to charter-in vessels and a decrease in the number of chartered-in days from 12,859 days in the twelve months ended December 31, 2021 to 8,971 days for the twelve months ended December 31, 2022.

The average published market rates for Supramax and Panamax vessels decreased approximately 20% from an average of $25,146 in 2021 to $20,012 in the same period of 2022.

The Company benefited for the full year in 2022 from the acquisition of vessels over 2021 and 2022.

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 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 $3.9 million and $3.6 million, respectively, for the twelve months ended December 31, 2021 and 2020, respectively.

Vessel operating expenses for the year ended December 31, 2022 were $56.9 million, compared to $42.7 million for the same period in 2021, an increase of approximately 33%.

The increase in vessel operating expenses was primarily due to an increase in owned days resulting from the acquisition of vessels over the period.

The ownership days for the twelve months ended December 31, 2022 and 2021 were 8,962 and 7,382, respectively.

Excluding technical management fees, vessel operating expenses on a per day basis were $5,805 for the twelve months ended December 31, 2022 and $5,260 for the same period in 2021.

Technical management fees were approximately $4.8 million and $3.9 million for the twelve months ended December 31, 2022 and 2021, respectively.

The increase in vessel operating expenses was also attributable an increase in crew expenses due to an increase in crewing costs, crew changes and expenses related to COVID-19 and the war in Ukraine.

The Company also continues to face general inflationary pressures particularly impacting the cost of lubes, stores and spares.

General and Administrative Expenses

General and administrative expenses increased from $19.0 million for the year ended December 31, 2021 to $20.1 million for the year ended December 31, 2022.

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

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

Depreciation and Amortization

We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel.

Depreciation is based on the cost of the vessel less its estimated residual value.

We estimate the useful life of our vessels ranging between 25 years to 30 year from the date of initial delivery from the shipyard to the original owner.

We estimate the scrap rate to be $300/lwt to compute each vessel's residual value.

Depreciation and amortization expense increased $6.5 million or 28%.

1 unchanged sentence

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.

The increase in depreciation and amortization expense was due to an increase in drydocking amortization.

Five drydockings were completed in 2021 and four drydockings were completed in 2022.

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 Nordic Barents in the year ended December 31, 2020.

The Company recorded a loss of $0.3 million on the sale of the m/v Bulk Pangaea in the year ended December 31, 2022.

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

1 unchanged sentence

During the twelve months ended December 31, 2022, the Company recorded $3.0 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 April 20, 2022 the Company entered into an agreement to sell the Bulk Pangaea for $8.8 million, the sale was finalized and the vessel delivered to its new owner on June 23, 2022.

A loss on impairment of $3.0 million was recorded in the first quarter of 2022 as the carrying value of the assets exceeded the fair value.

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

2 unchanged sentences

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 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.

The Company recorded an unrealized gain on derivative instruments of $0.7 million and $3.9 million in the year ended December 31, 2022 and 2021, respectively.

Refer to Note 7 Margin Account, Derivative and Fair Value Measures to the consolidated financial statements for further information.

6 unchanged sentences

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

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.

At December 31, 2022 and 2021, the Company had working capital of $130.3 million and $72.2 million, respectively.

The increase in working capital was primarily driven by an increase in cash and cash equivalents generated from operating activities during the year and timing of the accounts receivable and advance charter hire.

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 $134.8 million in 2022, and $61.7 million in 2021;

4 unchanged sentences

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Results of Operations.

The table below summarizes our primary sources and uses of cash for the fiscal years ended December 31, 2022 and 2021.

We have derived these summarized statements of cash flows from the consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Amounts in the table below have been calculated based on unrounded numbers.

Accordingly, certain amounts may not appear to recalculate due to the effect of rounding.

(in millions) 2022 2021

Net cash provided by/(used in):

Operating activities:

Net income adjusted for non-cash items $ 127.1 $ 94.1

Changes in operating assets and liabilities, net 7.7 (32.4)

Operating activities 134.8 61.7

Investing activities (28.5) (197.8)

Financing activities (34.1) 143.9

Net change $ 72.2 $ 7.8

Operating Activities

Net cash provided by operating activities during the year ended December 31, 2022 was $134.8 million, compared to net cash provided by operating activities of $61.7 million during the year ended December 31, 2021.

The cash flows from operating activities increased compared to the same period in the prior year primarily due to the increase in income from operations, and timing of customer receipts and supplier payments.

Investing Activities

Net cash used in investing activities during the twelve months ended December 31, 2022 was $28.5 million compared to net cash used in investing activities of was $197.8 million for the same period in 2021.

The Company purchased two vessels for $35.7 million in 2022.

This use of cash was partially offset by the proceeds from the sale of one vessel for $8.4 million.

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

Financing Activities

Net cash used in financing activities in 2022 was $34.1 million compared to net cash provided by financing activities of $143.9 million for the same period of 2021.

During the twelve months ended December 31, 2022, the Company received $8.5 million in proceeds from long-term debt and $15.0 million in finance leases.

The Company repaid $15.4 million of long term debt, $15.8 million of finance leases and $5.0 million of other long term liabilities.

The Company also paid $13.4 million of common stock cash dividends and $5.0 million cash dividends to non-controlling interests.

Net cash provided by financing activities was $143.9 million for 2021.

During the twelve months ended December 31, 2021, the Company received $79.2 million in proceeds from long-term debt, $141.17 million in proceeds from 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.

Capital Expenditures

2 unchanged sentences

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.

nine Supramax drybulk carriers, two Ultramax Ice-Class IC, one Ultramax 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 BWTS 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 2023 at an aggregate total cost of approximately $2.7 million.

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

The Company expects to perform five intermediate surveys in 2023 at an aggregate total cost of approximately $0.4 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.

1 unchanged sentence

The Company anticipates that this process of recertification will require it to reposition these vessels from a discharge port to shipyard facilities, which will reduce the Company’s available days and operating days during that period.

The following table summarizes Pangaea’s net cash flows from operating, investing and financing activities for the fiscal years ended December 31, 2021 and 2020:

(in millions) 2021 2020

Net cash provided by operating activities $ 61.7 $ 20.8

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

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 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 $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.

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.

Borrowing Activities

2 unchanged sentences

Maturity Date

Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd.

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

Bulk Nordic Oasis Ltd.

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.

9 unchanged sentences

– Bulk Nordic Six Ltd.

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

2,070,000 2,330,000 6.03 % May 2024

– Bulk Pride - Tranche C (2)

8 unchanged sentences

11,069,630 12,453,926 5.45 % October 2027

Bulk Sachuest (2)

$ 8,500,000 $ — 6.19 % October 2029

109 Long Wharf Commercial Term Loan 374,466 484,066 6.39 % April 2026

38 unchanged sentences

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, 2021 the Company was in compliance with its financial covenants.

As of December 31, 2022 and 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.

6 unchanged sentences

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.

As of December 31, 2022 and 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)

8 unchanged sentences

Interest on this advance is floating at LIBOR plus 1.70% (3.63% at December 31, 2022) through March 2021, and thereafter at LIBOR plus 2.4%.

The loan was repaid in full on January 10, 2023.

Bulk Pride Tranche C and D

9 unchanged sentences

Additionally, the agreement contains a minimum liquidity requirement, positive working capital of the borrower and 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.

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

At December 31, 2022 and 2021, the Company was in compliance with these covenants.

The Bulk Freedom Corp.

3 unchanged sentences

A balloon payment of $2,300,000 is due on June 14, 2022 with the final installment.

The facility bears interest at LIBOR plus a margin of 3.75% (3.95% at December 31, 2021).

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

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

The loan was repaid in full on June 13, 2022.

109 Long Wharf Commercial Term Loan

5 unchanged sentences

The loan contains a maximum loan to value covenant and a debt service coverage ratio.

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

The loan was repaid in full on January 25, 2023.

At December 31, 2022 and 2021, the Company was in compliance with these covenants.

The Bulk Valor Corp.

6 unchanged sentences

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.

As of December 31, 2022 and 2021 the Company was in compliance with its financial covenants.

The Bulk Promise Corp.

3 unchanged sentences

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%.

Interest on this advance was fixed at 5.45% on July 15, 2022 through maturity.

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, 2022 and 2021 the Company was in compliance with its financial covenants.

The Bulk Sachuest Corp.

Loan Agreement -- Dated October 13, 2022

The agreement advanced $8,500,000 in respect of the m/v Bulk Sachuest on October 13, 2022.

The agreement requires repayment of the loan in 27 quarterly installments commencing on January 13, 2023.

A balloon payment is due on October 13, 2029.

Interest on this advance is fixed at 6.19%.

The loan is secured by a first preferred mortgage on the

m/v Bulk Sachuest, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders.

As of December 31, 2022 the Company was in compliance with its financial covenants.

11 unchanged sentences

December 31, 2021 Activity December 31, 2022

Included in trade accounts receivable and voyage revenue on the consolidated balance sheets and statements of income, respectively:

Trade receivables due from King George Slag (i)

$ 106,959 $ (106,959) $ —

Included in accounts payable and accrued expenses on the consolidated balance sheets:

Trade payables due to Seamar (ii)

Trade payables due to Seamar (i)

$ 2,847,910 $ (1,204,104) $ 1,643,806

Commissions payable (trade payables) (iii)

Commissions payable (trade payables) (ii)

38,896 (38,896) —

2 unchanged sentences

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

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

Seamar Management S.A.

7 unchanged sentences

to Seamar at December 31, 2022 and 2021, (including amounts due for vessel operating expenses), were $1,643,806 and $2,847,910, respectively.

Accrued dividends consist of the following:

2013 common stock dividend (2)

Dividends payable on issued and outstanding common stock (1)

Balance at December 31, 2019 $ 478,359 $ 153,602 $ 631,961

Accrued dividend — 908,955 908,955

Paid in cash (478,359) (56,794) (535,153)

Balance at December 31, 2020 — 1,005,763 1,005,763

Accrued dividend — 4,743,263 4,743,263

Paid in cash — (5,535,261) (5,535,261)

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

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

Effect of Inflation

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

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