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Item 7. Management’s Discussion and Analysis

2026-03-16 compared with 2025-03-18 · 180 added, 241 removed, 185 unchanged (69% of the section changed)

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Pangaea utilizes its logistics expertise to service a broad base of industrial customers who require the transportation of a wide variety of drybulk cargoes, including grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone.

The Company provides ocean transportation services to clients utilizing an ocean-going fleet of motor vessels ("m/v") in the Handysize, Handymax, Supramax, Ultramax and Panamax and Post-Panamax segments.

The Company provides ocean transportation services to clients utilizing an ocean-going fleet of motor vessels ("m/v") in the Handysize, Handymax, Supramax, Ultramax, Panamax and Post-Panamax segments.

At any time, this fleet may be comprised of a total of 60-75 vessels that are owned or chartered-in on a short-term basis.

For the twelve months ended December 31, 2025 , the Company operated on average a total fleet of 64 vessels.

At December 31, 2024, 41 vessels were wholly-owned or partially-owned through joint ventures, following the acquisition of 15 Handysize vessels on December 30, 2024.

At December 31, 2025 , 39 vessels were wholly-owned or partially-owned through joint ventures.

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, 2025.

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m/v Bulk Pride December 2017 Supramax 2008 14,023 10,698

m/v Bulk Freedom June 2017 Supramax 2005 9,016 7,326

m/v Bulk Spirit February 2019 Supramax 2009 13,000 10,682

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m/v Strategic Tenacity December 2024 Handysize 2012 10,705 10,247

m/v Strategic Endeavor December 2024 Handysize 2010 7,711 7,711

Pearl November 2017 Deck Barge 1979 3,833 1,597

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Recent Accounting Pronouncements

On January 1, 2023, we adopted ASU No.

2016-13, "Financial Instruments—Credit Losses" ("ASU 2016-13").

ASU 2016-13 amends the current financial instrument impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables.

The adoption of the accounting standard did not have any material impact on our consolidated financial statements.

The Company adopted ASU No.

2020-04, ASU No.

2021-01, and ASU No.

2022-06 related to Reference Rate Reform (Topic 848).

The adoption did not have a material impact on the Company’s consolidated financial statements or related disclosures."

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This update expands the disclosure requirements for reportable segments by enhancing disclosures related to significant segment expenses, interim segment profit or loss, and segment assets.

It also clarifies how the Chief Operating Decision Maker ("CODM") uses the reported segment profit or loss information to assess segment performance and allocate resources.

The Company adopted ASU 2023-07 effective December 15, 2024, and determined that the application of this guidance did not have a material impact on its consolidated financial statements.

For additional details on the adoption effects of ASU 2023-07, refer to Note 16.

The Company considers the applicability and impact of all accounting standard updates (“ASU”) issued by the Financial Accounting Standards Board (the “FASB”).

ASUs not listed were assessed by the Company and either determined to be not applicable or expected to have minimal impact on its consolidated financial statements.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires disclosure of incremental income tax information related to the income tax rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.

The update is effective for annual periods beginning after December 15, 2024 on a prospective basis, and retrospective application is permitted.

The Company is currently evaluating the impact of ASU 2023-09 on its disclosures within its consolidated financial statements.

In November 2024, the FASB released ASU 2024-03, which focuses on Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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The Company is currently assessing the impact of ASU 2024-03 on its disclosures in the consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity.

This update provides guidance on identifying the accounting acquirer when a variable interest entity (“VIE”) that meets the definition of a business is acquired primarily through the exchange of equity interests.

The amendments are intended to improve consistency in determining the accounting acquirer in transactions involving VIEs that qualify as businesses.

The standard becomes effective for annual periods beginning after December 15, 2026, and for interim periods within those fiscal years.

Early adoption is permitted.

The guidance is applied prospectively to applicable transactions occurring after the adoption date.

Because the amendments apply to specific transaction structures involving the acquisition of a VIE that meets the definition of a business, the Company expects the impact of this guidance to depend on the nature and structure of future acquisition transactions.

The Company is currently evaluating the potential impact of ASU 2025-03 on its consolidated financial statements and related disclosures.

In May 2025, the FASB also issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606):

Scope Application of Share-Based Payment Arrangements with Customers.

This update clarifies the accounting for share-based payments made to customers, including guidance on performance conditions and forfeitures.

The standard becomes effective for annual periods beginning after December 15, 2026, and for interim periods within those fiscal years, with early adoption permitted.

The Company is currently assessing the impact of ASU 2025-04 on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (Topic 326).

The amendments provide a practical expedient and an accounting policy election for estimating expected credit losses on current accounts receivable and contract assets arising under ASC 606.

The standard is effective for annual periods beginning after December 15, 2025, including interim periods within those annual periods, with early adoption permitted.

The amendments are to be applied prospectively.

The Company is currently evaluating the adoption of this standard and does not expect the adoption of ASU 2025-05 to have a material impact on its consolidated financial statements or related disclosures.

Important Financial and Operational Terms and Concepts

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These include revenue recognition, deferred revenue, allowance for credit losses, vessels and depreciation and long-lived assets impairment considerations, as defined above as well as the following:

Voyage Revenue.

Voyage revenue is derived from voyage charters which involve the carriage of cargo from a load port to a discharge port, which is predetermined in each voyage contract.

Gross revenue is calculated by multiplying the agreed rate per ton of cargo by the number of tons loaded.

The Company directs how and for what purpose the vessel is used and therefore, these voyage contracts do not contain leases.

Charter Revenue.

Charter revenue is earned when the Company lets a vessel it owns or operates to a charterer for a specified period of time.

Charter revenue is based on the agreed rate per day.

These time-charter arrangements contain leases because the lessee has the power to direct the use and receives substantially all of the economic benefits from the use of the vessel.

The operating lease component and the vessel operating expense non-lease component of a time-charter contract are reported as a single component.

Terminal & Stevedore Revenue.

Terminal & Stevedore revenue is derived from inbound and outbound cargo handling services at ports which the Company operates in.

Gross revenue is earned typically based on a per-unit rate for volumes handled.

Voyage Expenses.

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Selected Financial Data

(in thousands, except shipping days data) December 31, 2024 December 31, 2023

The following tables present selected financial and operating data of the Company for the periods indicated.

The selected consolidated financial data has been derived from the Company’s audited consolidated financial statements.

December 31, 2025 December 31, 2024

Selected Data from the Consolidated Statements of Income

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Vessel operating expenses 94,948 55,544

Terminal Expenses 9,299 5,809

Terminal & stevedore expenses 12,189 9,299

Total cost of transportation and service revenue 520,551 433,085

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Other operating expenses 31,210 24,736

Loss on sale of vessels — 1,739

Gain on sale of vessels (3,000) —

Income from operations 40,944 48,449

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$ 19,369 $ 28,903

Net income from continuing operations per common share information

Net income per common share information

Basic income per share $ 0.30 $ 0.64

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Cash dividends declared per share $ 0.25 $ 0.40

Adjusted EBITDA (1)

83,040 79,724

Shipping Days (2)

Voyage days 15,669 14,922

Time charter days 1,738 1,789

Total shipping days 17,407 16,711

TCE Rates ($/day)

$ 16,485 $ 15,849

Selected Data from the Consolidated Balance Sheets

Cash and cash equivalents $ 86,805 $ 99,038

Cash, cash equivalents and restricted cash $ 103,324 $ 86,805

Total assets $ 928,096 $ 936,457

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Net cash provided by operating activities $ 53,726 $ 65,691

Net cash used in investing activities $ (67,694) $ (15,982)

Net cash provided by (used in) investing activities $ 11,411 $ (67,694)

Net cash used in by financing activities $ (48,619) $ (10,230)

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

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

(1) Adjusted EBITDA represents operating earnings before interest expense, interest income, income taxes, depreciation and amortization, loss on sale of vessels, share-based compensation and other non-operating income and/or expense, and other non-recurring items, if any.

Adjusted EBITDA is included because it is used by management and certain investors to measure operating performance and is also reviewed periodically as a measure of financial performance by Pangaea's Board of Directors.

Adjusted EBITDA is not an item recognized by the generally accepted accounting principles in the United States of America, or U.S.

GAAP, and should not be considered as an alternative to net income, operating income, or any other indicator of a company's operating performance required by U.S.

Pangaea’s definition of Adjusted EBITDA used here may not be comparable to the definition of EBITDA used by other companies.

(2) Shipping days are defined as the aggregate number of days in a period during which its owned or chartered-in vessels are performing either a voyage charter (voyage days) or time charter (time charter days).

The reconciliation of gross profit to net transportation and service revenue and income from operations to Adjusted EBITDA is as follows:

(in thousands) Years Ended December 31,

Net Transportation and Service Revenue (3)

Gross Profit (4)

Key Operating Metrics

Voyage days 20,322 15,669

Time charter days 3,007 1,738

Total shipping days (1)

23,329 17,407

TCE Rate ($/day) (2)

$ 14,279 $ 16,485

(1) Shipping days are defined as the aggregate number of days in a period during which its owned or chartered-in vessels are performing either a voyage charter (voyage days) or time charter (time charter days).

(2) Time Charter Equivalent (“TCE”) rate is a non-GAAP measure commonly used in the shipping industry and represents voyage revenue less voyage expenses divided by the number of voyage days.

Non-GAAP Financial Measures

Management uses certain non-GAAP financial measures to evaluate the Company’s operating performance.

These measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with U.S.

The reconciliation of Gross profit to Adjusted Gross Profit and Net income to Adjusted EBITDA is as follows:

December 31, 2025 December 31, 2024

Gross Profit (GAAP) $ 69,154 $ 73,185

Transportation and service depreciation and amortization 42,336 30,266

Net transportation and service revenue $ 103,451 $ 99,207

Adjusted Gross Profit (Non-GAAP) (1)

$ 111,490 $ 103,451

Adjusted EBITDA (2)

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Depreciation and amortization 42,475 30,376

EBITDA $ 79,299 $ 72,524

Loss on sale of vessel — 1,739

Income tax provision (included in Other income) 533 285

Gain on sale of vessel (3,000) —

Share-based compensation 4,111 2,788

Unrealized loss on derivative instruments, net 1,355 953

Other non-recurring items — 448

Adjusted EBITDA $ 83,040 $ 79,724

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

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

(3) Net transportation and service revenue represents total revenue less the total direct costs of transportation and services, which includes charter hire, voyage and vessel operating expenses, and terminal & stevedore expenses.

Net transportation and service revenue is included because it is used by management and certain investors to measure performance by comparison to other logistic service providers.

Net transportation and service revenue is not an item recognized by the generally accepted accounting principles in the United States of America, or U.S.

GAAP, and should not be considered as an alternative to net income, operating income, or any other indicator of a company's operating performance required by U.S.

Pangaea’s definition of net transportation and service revenue used here may not be comparable to an operating measure used by other companies.

(4) Gross profit represents total revenue less total cost of transportation and service revenue and less transportation related depreciation and amortization.

Adjusted EBITDA (Non-GAAP) $ 88,015 $ 83,325

(1) Adjusted gross profit is defined as GAAP gross profit excluding transportation and service depreciation and amortization.

Management believes this measure provides investors with additional insight into the operating performance of the Company’s shipping operations by excluding non-cash depreciation expenses associated with the Company’s vessels.

Adjusted gross profit is not a measure recognized under U.S.

GAAP and should not be considered as an alternative to gross profit, operating income or net income.

The Company’s definition of adjusted gross profit may not be comparable to similarly titled measures used by other companies.

(2) Adjusted EBITDA represents net income before interest expense, interest income, income taxes, depreciation and amortization, gain or loss on sale of vessels, share-based compensation, unrealized gains or losses on derivative instruments and other non-operating or non-recurring items, if any.

Management uses Adjusted EBITDA as a supplemental performance measure and believes it provides investors with useful information to evaluate the Company’s operating performance and its ability to generate cash flows from operations.

Adjusted EBITDA is also reviewed periodically as a measure of financial performance by the Company’s Board of Directors.

Adjusted EBITDA is not a measure recognized under U.S.

GAAP and should not be considered an alternative to net income, operating income or any other indicator of operating performance prepared in accordance with U.S.

Industry Overview

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.

The Baltic Dry Index (“BDI”), a measure of dry bulk market performance, averaged 1,754 for 2024, compared to an average of 1,426 for 2023, up approximately 23%.

More specifically, and reflecting the composition of the Company's fleet, the average published market rates for Supramax and Panamax vessels rose approximately 17% from an average of $11,391 in 2023 to $13,314 in 2024.

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.

We operate in a cyclical industry subject to macroeconomic shifts, geopolitical volatility and other factors.

Our business is also subject to fluctuations in the supply and demand for vessels, together with global demand for drybulk commodities, which impact freight pricing.

The Baltic Dry Index (“BDI”), a broader market measure of the cost to transport drybulk commodities by sea, offers a market view into global supply demand trends and is considered the standard benchmark for drybulk cargo pricing.

The BDI averaged 1,681 for 2025, down approximately 4%, compared to an average of 1,754 for 2024.

The average published market rates for Panamax, Supramax, and Handysize vessels, reflecting the composition of the company's fleet, also decreased approximately 9%, to an average of $12,090 in 2025 from $13,314 in the same period of 2024.

In addition to broader market pressures, our operating results for 2025 also reflect the impact of fleet expansion.

At December 30, 2024, the Company acquired 15 vessels to its owned fleet, representing a 58% increase in total vessel count.

In July 2025, the Company sold one of these vessels.

Overall, available owned shipping days increased by 5,398 days in the current year compared to the same period in 2024, which should be considered when comparing period-over-period performance metrics.

As a result of the industry's volatility, we have experienced fluctuations in our quarterly and annual operating results in the past, and we expect to continue experiencing such fluctuations in the future due to various factors, including cargo demand, vessel supply, competition, and seasonality.

TCE Performance

For the year ended December 31, 2024 , the Company's TCE rate increased by 4% to $16,485 from $15,849 in 2023 , while dry bulk market rates for Panamax and Supramax vessels rose by approximately 17% .

The Company's TCE rate outperformed the average of the Baltic Panamax and Supramax market indexes, exceeding average market rates by approximately 24%.

For the year ended December 31, 2025 , the Company's TCE rate decrease d by 13% to $14,279 from $16,485 in 2024 , while dry bulk market rates for Panamax, Supramax, and Handysize vessels decreased by approximately 9%.

The Company's TCE rate outperformed the average of the Baltic Panamax, Supramax, and Handysize market indexes, exceeding average market rates by approximately 18%.

This outperformance was driven by the Company's long-term contracts of affreightment (COAs), specialized fleet, and cargo-focused strategy.

2024 Highlights

• Net income attributable to Pangaea Logistics Solutions Ltd.

was $28.9 million for twelve months ended December 31, 2024 as compared to $26.3 million for the same period of 2023.

• Diluted net income per share was $0.63 for twelve months ended December 31, 2024, as compared to $0.58 for the same period of 2023.

• Time Charter Equivalent ("TCE") rates earned by Pangaea was $16,485 per day for twelve months ended December 31, 2024 and $15,849 per day for the same period of 2023.

• Adjusted EBITDA was $83.0 million for twelve months ended December 31, 2024, as compared to $79.3 million for the same period of 2023.

• At the end of the year, Pangaea had $86.8 million in cash, and cash equivalents.

Results of Operations

Fiscal Year Ended December 31, 2025 Compared to Fiscal Year Ended December 31, 2024

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

Total revenue for the fiscal year ended December 31, 2024, was $536.5 million compared to $499.3 million, for the same period in 2023, a 7% increase.

The number of shipping days increased 4% to 17,407 in the fiscal year ended December 31, 2024, from 16,711 for the same period in 2023.

The revenue increase was primarily due to a 4% increase in the average TCE rate, which was $16,485 per day for the twelve months ended December 31, 2024, compared to $15,849 per day for the same period in 2023.

Total revenue for the fiscal year ended December 31, 2025 was $632.0 million, compared to $536.5 million for the same period in 2024, representing an increase of $95.5 million, or 18%.

The increase was primarily driven by an increase in total shipping days from 17,407 days in 2024 to 23,329 days in 2025, reflecting the expansion of the Company’s fleet and increased vessel availability during the period.

The increase in shipping days contributed approximately $182.4 million of additional revenue year over year.

This increase was partially offset by lower market charter rates during the period, which reduced revenue by approximately $86.9 million, as evidenced by a 4% decline in the Baltic Dry Index (BDI) and a 9% decline in average rates for Panamax, Supramax and Handysize vessels.

Components of revenue are as follows:

Voyage revenues increased by 5% for the fiscal year ended December 31, 2024 to $494.1 million from $468.6 million for the same period in 2023.

The increase was primarily driven by higher average TCE rates in 2024 due to stronger market conditions.

The number of voyage days increased 5% to 15,669 for the twelve months ended December 31, 2024 from 14,922 for the same period in 2023.

Voyage Revenues:

Voyage revenues increased by 17% to $577.5 million for the fiscal year ended December 31, 2025, compared to $494.1 million for the same period in 2024.

The increase was primarily attributable to a 30% increase in voyage days, from 15,669 days in 2024 to 20,322 days in 2025, resulting from the acquisition of the SSI vessels at the end of 2024.

This increase was partially offset by lower market rates as discussed above.

Charter Revenues:

Charter revenues increased to $39.3 million from $30.3 million, or 29%, for the year ended December 31, 2025 compared to the same period in 2024.

The increase in charter revenues was due to an increase in charter hire rates evidenced by the increase in index rates for Panamax and Supramax vessels of approximately 17% compared to the same period of 2023 and partially offset by a decrease in time charter days.

The time charter days were down 3% to 1,738 in the twelve months ended December 31, 2024 from 1,789 in the twelve months ended December 31, 2023.

The time charter revenue per day was $17,450 for the twelve months ended December 31, 2024 compared to $13,258 for the same period of 2023.

The optionality of our chartering strategy, in which the Company charters vessels in on short term periods with market available days during the charter period, allows the Company to selectively release excess ship days, if any, into the market under time charter arrangements.

Terminal & Stevedore revenues increased by 74% to $12.1 million from $7.0 million for the twelve months ended December 31, 2024 compared to the same period in 2023.

This revenue increase is mainly due to the acquisition of port operations in June 2023, which contributed to a full year of operations in the current year.

The increase was primarily driven by a significant rise in time charter days, which increased 73% to 3,007 days from 1,738 days in the prior-year period.

The average time charter rate declined to $13,056 per day from $17,450 per day due to timing of entering into certain time charter arrangements in early 2025 at lower market rates, however the higher number of charter days more than offset the rate decrease, resulting in overall revenue growth.

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

Terminal & Stevedore Revenues:

Terminal & Stevedore revenues increased by 26% for the twelve months ended December 31, 2025 compared to the same period in 2024 due to the addition of 2 new port operations in the current year.

Operating and Business Expenses

The Components of our expenses are as follows:

Voyage Expenses:

Voyage expenses for the fiscal year ended December 31, 2025, were $283.7 million, a 19% increase from $237.5 million for the year ended December 31, 2024.

This increase was primarily driven by a 5% rise in voyage days.

This increase was primarily driven by a 30% rise in voyage days to 20,322 days from 15,669 days in the prior year, reflecting the Company’s expanded fleet.

Correspondingly, total bunker, port, and canal costs increased in line with the higher level of operating activity.

Charter Hire Expenses:

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

Charter hire expenses paid to third-party shipowners were $130.8 million for the year ended December 31, 2024 , compared to $111.0 million for the year ended December 31, 2023 , an 18% increase .

The increase in charter hire expenses was primarily due to an increase in market rates to charter-in vessels and a rise in the number of chartered-in days from 7,933 in 2023 to 8,523 in 2024 .

Per-day charter hire expenses were $15,342 for the twelve months ended December 31, 2024 , compared to $13,996 for the same period in 2023 .

The average published market rates for Supramax and Panamax vessels increased approximately 17% from an average of $11,391 in 2023 to $13,314 in 2024 .

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.

Charter hire expenses for the fiscal year ended December 31, 2025 were $129.7 million compared to $130.8 million for the same period in 2024, representing a slight decrease year over year.

Chartered-in days increased to 9,046 days for the fiscal year ended December 31, 2025, compared to 8,523 days in the prior year.

This increase in chartered-in activity was largely offset by lower market charter rates for chartered-in vessels during the period.

The average published market rates for Supramax, Panamax and Handysize vessels declined approximately 9% , from an average of $13,314 in 2024 to $12,090 in 2025.

Consistent with the Company's charter-in strategy, the Company supplements its owned fleet with short-term chartered-in tonnage at prevailing market rates when necessary to meet cargo demand.

Per-day charter hire expenses were $14,342 for the fiscal year ended December 31, 2025 , compared to $15,342 for the same period in 2024 .

Vessel Operating Expenses:

Vessel operating expenses for the year ended December 31, 2024 , totaled $55.5 million , slightly lower than the $55.8 million recorded for the same period in 2023 .

Ownership days for the twelve months ended December 31, 2024 , and 2023 were 8,741 and 8,230 , respectively.

Excluding technical management fees, vessel operating expenses per day were $5,820 in 2024 , down from $6,256 in 2023 .

Technical management fees amounted to $4.7 million in 2024 , compared to $4.3 million in 2023 .

Vessel operating expenses for the year ended December 31, 2025, totaled $94.9 million compared to $55.5 million recorded for the same period in 2024.

Ownership days increased to 14,757 days in 2025 compared to 9,107 days in 2024, reflecting the expansion of the Company’s owned fleet following vessel acquisitions during the period.

Vessel operating expenses per ownership day increased to $6,434 in 2025 from $6,099 in 2024.

Technical management fees totaled $7.4 million in 2025 compared to $4.7 million in 2024, reflecting, in part, the transition of technical management for eight vessels from Bernhard Schulte Shipmanagement (“BSM”) to Seamar, the Company’s wholly owned subsidiary.

Terminal & Stevedore Expenses:

Terminal and stevedore expenses increased to $12.2 million for the twelve months ended December 31, 2025, up from $9.3 million for the same period in 2024.

This increase was primarily driven by the acquisition of port operations in June 2023, resulting in a full year of operational contributions in 2024.

This increase was primarily driven by the addition of 2 new port operations in the current year.

General and Administrative Expenses:

The increase in general and administrative expenses from $22.8 million to $24.6 million for the year ending December 31, 2024, was primarily driven by higher compensation related expenses.

For the fiscal year ended December 31, 2025, general and administrative expenses were $31.1 million, compared to $24.6 million for the same period in 2024.

The increase was primarily attributable to (i) higher compensation-related costs, including a $1.3 million increase in stock-based compensation expense primarily due to a higher stock price and the acceleration of vesting schedules as the Company transitioned from five-year to four-year and subsequently three-year vesting periods over the past three years;

and (ii) an approximately $5.1 million increase in payroll-related expenses, driven mainly by overall payroll increases and the acquisition of Strategic on December 30, 2024, which increased headcount and added a new office location in Connecticut.

Depreciation and Amortization:

We depreciate our vessels on a straight-line basis over their expected useful life, which ranges from 25 to 30 years from the date of initial delivery from the shipyard to the original owner.

The Company depreciates its vessels on a straight-line basis over their estimated useful lives, which range from 25 to 30 years from the date of initial delivery from the shipyard to the original owner.

Depreciation is calculated based on the vessel’s cost less its estimated residual value.

The residual value is determined using a scrap rate of $300 per lightweight ton (lwt).

The residual value is determined using an estimated scrap rate per lightweight ton (“lwt”).

Effective January 1, 2026, the Company revised certain depreciation estimates for its dry bulk vessels.

The estimated useful life range was updated from 25–30 years to 25 years, and the estimated scrap rate was increased from $300 per lwt to $400 per lwt, supported by historical demolition prices over the past 15 years.

Depreciation and amortization expense increased by $12.1 million, or 40%, primarily due to an increase in ownership days, which rose to 14,757 days in 2025 from 9,107 days in 2024 as a result of vessel acquisitions.

Additionally, the increase in depreciation and amortization expense was driven by higher drydocking amortization, with four drydockings completed in 2024 compared to three in 2023.

Loss on sale of vessels

In the year ended December 31, 2023, the Company recorded a $1.7 million loss on the sale of the M/V Bulk Trident and M/V Bulk Newport.

No vessel sale gains or losses were recorded in 2024.

Gain on sale of vessels:

In the year ended December 31, 2025, the Company recorded a gain of $3.0 million related to the sale of two vessels.

No gain on sale of vessels were recorded for the year ended December 31, 2024.

Unrealized (Loss) Gain on Derivative Instruments:

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The use of these derivatives may result in period-to-period fluctuations in the Company's reported operating results.

In the year ended December 31, 2024, the Company recorded an unrealized loss on derivative instruments of $1.0 million, compared to an unrealized loss of $2.9 million in the year ended December 31, 2023.

The Company recorded an unrealized loss on derivative instruments of $1.4 million for the year ended December 31, 2025, compared to an unrealized loss of $1.0 million in the year ended December 31, 2024.

For further details, refer to Note 7, Margin Account, Derivatives, and Fair Value Measures , in the consolidated financial statements.

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At December 31, 2025 and 2024, the Company had working capital of $87.7 million and $82.9 million, respectively.

The decrease in working capital was primarily driven by the increase in bunker inventory, partially offset by a rise in accounts payable.

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 $65.7 million in 2024, and $53.8 million in 2024;

its excess of cash and cash restricted by facility agents over the current portion of secured long-term debt, financing obligations and finance leases, 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 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.

For more information on the results of operations, see Part II.

The increase was primarily attributable to higher cash and cash equivalents, partially offset by increases in accounts payable and deferred revenue.

In assessing its ability to continue as a going concern, management considered the Company’s history of generating positive operating cash flows ($53.7 million in 2025, and $65.7 million in 2024), its cash and restricted cash balances relative to current maturities of secured debt, financing obligations and finance leases, and its contract employment strategy through contracts of affreightment (“COAs”).

Management believes that projected operating cash flows, together with cash on hand and available borrowings under existing credit facilities, will be sufficient to meet operating and capital requirements for at least the next twelve months.

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, 2025 and 2024.

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) 2024 2023

Net cash provided by/(used in):

Operating activities 53,726 65,691

Net income adjusted for non-cash items $ 64.1 $ 65.0

Changes in operating assets and liabilities, net 1.6 (11.2)

Operating activities 65.7 53.8

Investing activities 11,411 (67,694)

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Net cash provided by operating activities during the year ended December 31, 2025 was $53.7 million, compared to net cash provided by operating activities of $65.7 million during the year ended December 31, 2024.

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.

The decrease was primarily attributable to lower net income during the period, partially offset by higher non-cash expenses, including depreciation and amortization.

Non-cash adjustments included depreciation and amortization of $42.5 million in 2025 compared to $30.4 million in 2024, reflecting a full year of operations from vessels acquired in connection with the Strategic Shipping Inc.

acquisition completed at the end of 2024.

Drydocking costs also increased during the year as a result of higher drydock activity across the fleet.

Changes in operating assets and liabilities provided $6.2 million of cash in 2025 compared to $1.6 million in 2024.

The increase was primarily driven by changes in inventory balances and deferred revenue during the period, partially offset by an increase in accounts receivable.

Accounts receivable increased primarily due to higher voyage activity and an increase in voyages in process associated with the Company’s higher shipping days.

The increase was also impacted by the timing of customer billings and collections near period end.

Investing Activities

Net cash used in investing activities for the twelve months ended December 31, 2024, was $67.7 million, compared to $16.0 million for the same period in 2023.

In 2024, the Company spent $69.3 million on purchasing two vessels and vessel improvements and $0.0 million as a partial cash allocation for the SSI asset acquisition.

These outflows were partially offset by $1.9 million in dividends received from equity method investments.

In 2023, net cash used in investing activities totaled $16.0 million, primarily due to $27.3 million spent on vessel acquisitions and $7.2 million on port and terminal operations acquisitions, partially offset by the proceeds from the sale of two vessels for $17.3 million.

Net cash provided by investing activities was $11.4 million for the year ended December 31, 2025, compared to net cash used in investing activities of $67.7 million in 2024.

The year-over-year improvement was primarily driven by $17.2 million of proceeds from vessel sales in 2025 and significantly lower capital expenditures, as no new vessels were acquired during the year compared to vessel acquisitions and other capital improvements in 2024.

Dividends received from equity method investments increased to $4.1 million in 2025 from $1.9 million in 2024.

Cash used for the acquisition of a non-controlling interest totaled $2.7 million in 2025, related to the purchase of the remaining ownership interest in Seamar, which became a wholly owned subsidiary during the year.

Financing Activities

Net cash used in financing activities in 2024 was $10.2 million compared to net cash used in financing activities of $67.2 million for the same period of 2023.

During the twelve months ended December 31, 2024, the Company repaid $33.1 million of long term debt, $19.2 million of financing obligations and $3.0 million finance leases.

Additionally, the Company distributed $18.7 million in cash dividends to common stockholders and made payments totaling $21.0 million, including $19.0 million for the acquisition of the remaining 50% equity ownership of Nordic Bulk Partners LLC from HS Nordic LLC and $2.0 million for payments to non-controlling interests recorded as a long-term liability.

The Company also paid $2.3 million in cash dividends to non-controlling interests, offset by new borrowing of 89million.

Net cash used in financing activities for 2023 totaled $67.2 million.

Over the twelve months ended December 31, 2023, the Company repaid $15.8 million in long-term debt, $11.3 million in financing obligations, and $8.9 million in finance leases.

Additionally, the Company distributed $18.1 million in cash dividends to common stockholders and $10.4 million in cash dividends to non-controlling interests.

The Company also made a $2.5 million payment to non-controlling interests, recorded as a long-term liability.

Net cash used in financing activities was $48.6 million for the year ended December 31, 2025, compared to $10.2 million in 2024.

The increase in cash used was primarily driven by significantly lower debt proceeds in 2025, as vessel-related financings completed in 2024 were not repeated in the current year.

The Company continued to make scheduled repayments on long-term debt, financing obligations and finance leases, partially offset by refinancing proceeds received during 2025.

In addition, the Company repurchased $3.0 million of ordinary shares and paid $16.3 million in common stock dividends during 2025, reflecting a lower quarterly dividend rate compared to 2024.

Payments to non-controlling interests recorded as a long-term liability in 2024 did not recur in 2025 following the acquisition of the remaining ownership interest.

Capital Expenditures

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 or partially owned and controlled fleet at December 31, 2024 includes:

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

nine Supramax drybulk carriers, two Ultramax Ice-Class IC, two Ultramax, four Post Panamax Ice Class 1A drybulk vessels, and 15 Handysize vessels acquired through the Strategic Shipping Inc.

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.

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

The Company expects to perform nine special surveys in 2025 at an aggregate total cost of approximately $13.0 million.

The Company expects to perform four intermediate surveys in 2025 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.

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.

Critical Accounting Policies and Estimates

As discussed in Note 3, "Summary of Significant Accounting Policies," of our Financial Statements, which describes our significant accounting policies, the preparation of consolidated financial statements in accordance with U.S.

GAAP requires us to exercise judgment in the process of applying our accounting policies.

It also requires that we make estimates and assumptions about future events that affect the amounts reported in the consolidated financial statements and accompanying notes.

The accounting policies and estimates that we believe are most critical to the portrayal of our financial condition and results of operations are listed below.

We believe these policies require the most difficult, subjective, and complex judgments in estimating the effect of inherent uncertainties.

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.

A voyage charter involves the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to various cargo handling terms.

Under a voyage charter, the service revenues are earned and recognized ratably over the duration of the voyage.

A contract is accounted for when it has approval and commitment from both parties, the rights and payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Demurrage, which is included in voyage revenues, represents payments by the charterer to the vessel owner when loading and discharging time exceed the stipulated time in the voyage charter.

Demurrage is measured in accordance with the provisions of the respective charter agreements and the circumstances under which demurrage revenues arise.

Demurrage revenue is included in the calculation of voyage revenue and recognized ratably over the duration of the voyage to which it pertains.

Voyage revenue recognized is presented net of address commissions.

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 charters do not fall under the scope of ASC 606.

Revenue is not earned when vessels are offhire.

Terminal & Stevedore Revenue:

Terminal & Stevedore revenue is derived from inbound and outbound cargo handling services at ports which the Company operates in.

Gross revenue is earned typically based on a per-unit rate for volumes handled.

Long-lived Assets Impairment Considerations:

The carrying values of the Company’s vessels may not represent their fair market value or the amount that could be obtained by selling the vessel at any point in time because the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the pricing of new vessels, which tend to be cyclical.

The carrying value of each group of vessels classified as held and used are reviewed for potential impairment when events or changes in circumstances indicate that the carrying value of a particular group may not be fully recoverable.

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.

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

The significant factors and assumptions used in the undiscounted projected net operating cash flow analysis include the Company’s estimate of future time charter equivalent "TCE" rates based on current rates under existing charters and contracts.

When existing contracts expire, the Company uses an estimated TCE based on actual results and extends these rates out to the end of the vessel’s useful life.

TCE rates can be highly volatile, may affect the fair value of the Company’s vessels and may have a significant impact on the Company’s ability to recover the carrying amount of its fleet.

Accordingly, the volatility is contemplated in the undiscounted projected net operating cash flow by using a sensitivity analysis based on percent changes in the TCE rates.

The Company prepares a series of scenarios in an attempt to capture the range of possible trends and outcomes.

Projected net operating cash flows are net of brokerage and address commissions and assume no revenue on scheduled offhire days.

The Company uses the current vessel operating expense budget, estimated costs of drydocking and historical general and administrative expenses as the basis for its expected outflows, and applies an inflation factor it considers appropriate.

The net of these inflows and outflows, plus an estimated salvage value, constitutes the projected undiscounted future cash flows.

If these projected cash flows do not exceed the carrying value of the asset group, an impairment charge would be calculated.

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 occurred during the twelve months ended December 31, 2024, which would require impairment testing.

In both the first and fourth quarters of 2023, the Company identified triggering events associated with the sale of vessels, where the carrying value exceeded their fair value.

On January 18, 2023, the Company entered into a memorandum of agreement to sell the m/v Bulk Newport for $8.9 million in net consideration after brokerage commissions, resulting in a recorded loss on sale of $1.2 million in the first quarter of 2023.

Similarly, on October 17, 2023, the Company signed a memorandum of agreement to sell the m/v Bulk Trident for $9.5 million in net consideration after brokerage commissions, resulting in a loss on sale of $0.6 million in the fourth quarter of 2023.

The Company conducted an impairment analysis on each asset group and determined that the estimated undiscounted future cash flows exceeded their carrying amounts.

Therefore, no additional loss on impairment was recognized.

Also the Company concluded that no other triggering event had occurred during the remaining period of the 2023 which would require impairment testing.

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, 2024.

Vessel Name Date Acquired Size Year Build Purchase Price ($000)

Net Carrying Amount ($000)

m/v Bulk Endurance January 2017 Ultramax 1C 2017 $ 28,000 $ 20,616

m/v Bulk Destiny January 2017 Ultramax 1C 2017 24,000 17,729

m/v Bulk Prudence June 2023 Ultramax 2014 26,650 26,744

m/v Bulk Courageous April 2021 Ultramax 2013 16,798 16,028

m/v Nordic Oasis January 2016 Panamax 1A 2016 32,600 23,436

m/v Nordic Olympic February 2015 Panamax 1A 2015 32,600 22,089

m/v Nordic Odin February 2015 Panamax 1A 2015 32,625 21,980

m/v Nordic Oshima September 2014 Panamax 1A 2014 33,709 23,106

m/v Nordic Orion April 2012 Panamax 1A 2011 32,363 18,144

m/v Nordic Odyssey April 2012 Panamax 1A 2010 32,691 17,181

m/v Bulk Valor June 2021 Supramax 2013 18,182 15,726

m/v Bulk Friendship September 2019 Supramax 2011 14,447 11,957

m/v Bulk Sachuest October 2022 Supramax 2010 17,364 15,678

m/v Bulk Brenton July 2024 Supramax 2016 28,762 28,256

m/v Bulk Patience August 2024 Supramax 2016 28,663 28,240

m/v Bulk Independence May 2019 Supramax 2008 14,393 12,622

m/v Bulk Pride December 2017 Supramax 2008 14,023 10,678

m/v Bulk Freedom June 2017 Supramax 2005 9,016 7,326

m/v Bulk Spirit February 2019 Supramax 2009 13,000 11,961

m/v Bulk Xaymaca August 2018 Panamax 2006 14,010 11,042

m/v Bulk Concord February 2022 Panamax 2009 19,900 18,511

m/v Bulk Promise July 2021 Panamax 2013 18,633 16,344

m/v Nordic Nuluujaak May 2021 Post Panamax 1A 2021 38,424 34,667

m/v Nordic Qinngua June 2021 Post Panamax 1A 2021 38,471 34,655

m/v Nordic Sanngijuq September 2021 Post Panamax 1A 2021 37,920 34,291

m/v Nordic Siku November 2021 Post Panamax 1A 2021 37,935 34,672

m/v Strategic Fortitude December 2024 Handysize 2016 16,874 16,874

m/v Strategic Resolve December 2024 Handysize 2015 14,606 14,606

m/v Strategic Explorer December 2024 Handysize 2015 14,606 14,606

m/v Strategic Entity December 2024 Handysize 2015 14,606 14,606

m/v Strategic Synergy December 2024 Handysize 2014 14,062 14,062

m/v Strategic Alliance December 2024 Handysize 2014 14,062 14,062

Vessel Name Date Acquired Size Year Build Purchase Price ($000)

Net Carrying Amount ($000)

m/v Strategic Unity December 2024 Handysize 2014 14,062 14,062

m/v Strategic Harmony December 2024 Handysize 2014 14,062 14,062

m/v Strategic Equity December 2024 Handysize 2014 14,062 14,062

m/v Strategic Venture December 2024 Handysize 2014 14,062 14,062

m/v Strategic Savannah December 2024 Handysize 2013 11,431 11,431

m/v Strategic Spirit December 2024 Handysize 2012 11,068 11,068

m/v Strategic Vision December 2024 Handysize 2012 11,068 11,068

m/v Strategic Tenacity December 2024 Handysize 2012 10,705 10,705

m/v Strategic Endeavor December 2024 Handysize 2010 7,711 7,711

Pearl November 2017 Deck Barge 1979 3,833 1,597

Total $ 856,061 $ 732,325

Capital expenditures primarily relate to vessel acquisitions, ownership interests in vessels and capital improvements that enhance fleet efficiency, safety and regulatory compliance.

As of December 31, 2025, the Company’s consolidated fleet consisted of 39 dry bulk vessels, including nine Panamax vessels (six Ice Class 1A), eight Supramax vessels, four Ultramax vessels (including two Ice Class 1C), four Post-Panamax Ice Class 1A vessels and fourteen Handysize 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 maintain and improve its vessels and to comply with international shipping standards and environmental laws and regulations.

The Company has some flexibility regarding the timing of drydockings;

however, the total cost of these expenditures is unpredictable.

In addition to potential vessel acquisitions, major capital expenditures include regularly scheduled drydockings necessary to maintain and improve vessels and comply with international shipping and environmental regulations.

The Company expects to perform thirteen special surveys in 2026 at an aggregate cost of approximately $15.7 million and two intermediate surveys at an aggregate cost of approximately $3.0 million.

Offhire related to these surveys is expected to range from ten to twenty days per vessel.

These expenditures are expected to be funded from operating cash flows.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures.

Certain estimates involve a higher degree of judgment and complexity because they require management to make assumptions about matters that are inherently uncertain.

We consider an accounting estimate to be critical if the estimate requires significant judgment and if different assumptions could materially affect our financial condition or results of operations.

Management evaluates its estimates on an ongoing basis using historical experience, current market conditions and other factors believed to be reasonable under the circumstances.

Actual results may differ from these estimates.

Vessel Asset Impairment

Vessels represent the most significant component of the Company’s total assets.

The evaluation of vessel impairment requires significant judgment due to the cyclical and volatile nature of the dry bulk shipping industry and fluctuations in vessel market values and charter rates.

The Company reviews its vessels for impairment when events or changes in circumstances indicate that the carrying value of a vessel or vessel group may not be recoverable.

Possible indicators of impairment may include events or changes in circumstances affecting the legal environment, the business climate, market value, extent or manner of use, and physical condition of the vessel asset.

When such events or changes in circumstances exist, the Company evaluates its vessel assets for impairment by comparing undiscounted future cash flows expected to be generated over the life of each vessel asset to the respective carrying amount.

If the Company’s estimate of undiscounted future cash flows for any vessel asset for which indicators of impairment exist is lower than the vessel asset’s carrying value, and the vessel’s carrying value is greater than its fair value, the carrying value is written down, by recording a charge to operations, to the vessel asset’s fair value as provided by third parties.

Estimating future cash flows requires management to make significant assumptions regarding future time charter equivalent (“TCE”) rates, vessel utilization, operating costs, drydocking expenditures and residual values.

Because these assumptions are influenced by global shipping demand, vessel supply and broader economic conditions, they are subject to significant uncertainty.

Future TCE rates represent the most significant assumption in the impairment analysis.

For periods covered by existing charters or contracts, contracted rates are used.

For periods beyond existing contracts, the Company estimates future TCE rates based on historical performance, current market conditions and industry outlook.

For the years ended December 31, 2025 and 2024, the Company concluded that no impairment indicators were identified and therefore no impairment testing or impairment charges were required.

Changes in assumptions, particularly future charter rates or vessel market values, could materially affect the Company’s impairment analysis and could result in impairment charges in future periods.

Revenue Recognition – Voyages in Process

Revenue from voyage charters is recognized over time as the performance obligation is satisfied, generally from the commencement of loading through the completion of discharge.

As of each reporting period, the Company estimates the proportion of voyages in process to determine the amount of revenue to recognize.

Estimating voyage progress requires management to make assumptions regarding the stage of completion of voyages at the reporting date.

These estimates affect the amount of revenue recognized during the reporting period as well as related balances such as accounts receivable and deferred revenue.

Changes in estimates of voyage progress or voyage duration could affect the timing of revenue recognition between reporting periods.

Borrowing Activities

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Item 7. Management’s Discussion and Analysis