Pangaea Logistics Solutions Ltd. [PANL] Filings

10-Q 1 panl-20240930.htm 10-Q panl-20240930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36798

PANGAEA LOGISTICS SOLUTIONS LTD.

(Exact name of Registrant as specified in its charter)


Bermuda						98-1205464
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

c/o Phoenix Bulk Carriers (US) LLC

109 Long Wharf

Newport, RI 02840

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (401) 846-7790

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	PANL	Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated Filer

☐

Accelerated Filer

☒

Non-accelerated Filer

☐

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, par value $0.0001 per share, 46,902,091 shares outstanding as of November 8, 2024.

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	3

	Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2024 and 2023	4

	Consolidated Statements of Stockholders' Equity (unaudited) for the three and nine months ended Sept ember 30, 2024 and 2023	5

	Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2024 and 2023	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risks	35

Item 4.	Controls and Procedures	35

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures		38

Pangaea Logistics Solutions Ltd.

Consolidated Balance Sheets


	September 30, 2024		December 31, 2023
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	93,119,521	$	99,037,866

Accounts receivable (net of allowance of $5,329,034 and $5,657,837 at September 30, 2024 and December 31, 2023, respectively)	44,157,144		47,891,501
Inventories	26,742,783		16,556,266
Advance hire, prepaid expenses and other current assets	32,219,650		28,340,246

Total current assets	196,239,098		191,825,879


Fixed assets, net	514,581,091		474,265,171

Right of use assets, net	29,134,488		30,393,823
Goodwill	3,104,800		3,104,800
Other non-current assets	6,107,198		5,590,295
Total assets	$	749,166,675	$	705,179,968

Liabilities and stockholders' equity
Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	47,778,007	$	35,836,262

Deferred revenue	16,080,451		15,629,886
Current portion of secured long-term debt	16,536,650		30,751,726
Current portion of lease liabilities	14,238,935		21,970,124
Dividend payable	1,279,494		1,146,321
Total current liabilities	95,913,537		105,334,319

Secured long-term debt, net	117,014,342		68,446,309
Lease liabilities, net	141,066,827		143,266,867
Long-term liabilities - other - Note 10	16,357,366		17,936,540

Commitments and contingencies - Note 9

Stockholders' equity:
Preferred stock, $0.0001 par value, 1,000,000 shares authorized and no shares issued or outstanding	—		—
Common stock, $0.0001 par value, 100,000,000 shares authorized; 46,902,091 shares issued and outstanding at September 30, 2024; 46,466,622 shares issued and outstanding at December 31, 2023	4,692		4,648
Additional paid-in capital	167,167,687		164,854,546
Retained earnings	165,417,353		159,026,799
Total Pangaea Logistics Solutions Ltd. equity	332,589,732		323,885,993
Non-controlling interests	46,224,871		46,309,940
Total stockholders' equity	378,814,603		370,195,933
Total liabilities and stockholders' equity	$	749,166,675	$	705,179,968

The accompanying notes are an integral part of these consolidated financial statements.

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Operations

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Revenues:
Voyage revenue	$	145,119,752	$	127,884,506	$	356,506,043	$	346,300,186
Charter revenue	4,860,376		3,797,528		23,738,200		16,636,920
Terminal & Stevedore Revenue	3,134,936		3,934,154		9,117,226		4,453,811
Total revenue	153,115,064		135,616,188		389,361,469		367,390,917
Expenses:
Voyage expense	71,539,649		59,075,208		169,805,168		170,349,472
Charter hire expense	36,511,251		25,466,886		96,339,176		77,183,388
Vessel operating expense	13,884,629		14,252,533		41,289,813		41,070,199
Terminal & Stevedore Expenses	2,417,374		3,517,736		7,324,959		3,892,318
General and administrative	6,041,857		5,500,121		18,349,556		17,115,013
Depreciation and amortization	7,719,083		8,092,495		22,609,231		22,546,350

Loss on sale of vessel	—		—		—		1,172,196
Total expenses	138,113,843		115,904,979		355,717,903		333,328,936

Income from operations	15,001,221		19,711,209		33,643,566		34,061,981

Other income (expense):
Interest expense	(4,702,101)		(4,348,686)		(12,365,614)		(12,724,920)
Interest income	893,879		775,504		2,434,325		2,867,914
Income (loss) attributable to Non-controlling interest recorded as long-term liability interest expense	274,326		(267,198)		(420,826)		(1,027,798)
Unrealized (loss) gain on derivative instruments, net	(5,961,224)		4,531,912		(1,804,388)		2,760,059
Other income	551,021		(212,639)		1,229,193		422,636
Total other expense, net	(8,944,099)		478,893		(10,927,310)		(7,702,109)

Net income	6,057,122		20,190,102		22,716,256		26,359,872
Income attributable to non-controlling interests	(946,082)		(1,321,811)		(2,248,265)		(1,172,774)
Net income attributable to Pangaea Logistics Solutions Ltd.	$	5,111,040	$	18,868,291	$	20,467,991	$	25,187,098

Earnings per common share:
Basic	$	0.11	$	0.42	$	0.45	$	0.56
Diluted	$	0.11	$	0.42	$	0.45	$	0.56

Weighted average shares used to compute earnings per common share:
Basic	45,279,813		44,775,438		45,257,462		44,754,620
Diluted	46,011,402		45,081,668		45,947,548		45,108,039

The accompanying notes are an integral part of these consolidated financial statements.

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Stockholders' Equity

(unaudited)


	Common Stock		Additional Paid-in Capital		Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest		Total Stockholders' Equity
		Shares											Amount
Balance at June 30, 2024		46,902,091	$	4,692	$	166,521,852	$	165,003,909	$	331,530,453	$	45,278,789		$	376,809,242
Share-based compensation		—	—		645,835		—		645,835		—			645,835



Common Stock Dividend		—	—		—		(4,697,596)		(4,697,596)		—			(4,697,596)
Net Income		—	—		—		5,111,040		5,111,040		946,082			6,057,122
Balance at September 30, 2024		46,902,091	$	4,692	$	167,167,687	$	165,417,353	$	332,589,732	$	46,224,871		$	378,814,603

Balance at December 31, 2023		46,466,622	$	4,648	$	164,854,546	$	159,026,799	$	323,885,993	$	46,309,940		$	370,195,933
Share-based compensation		—	—		2,313,185		—		2,313,185		—			2,313,185
Distribution to Non-Controlling Interests		—	—		—		—		—		(2,333,334)			(2,333,334)
Issuance of restricted shares, net of forfeitures		435,469	44		(44)		—		—		—			—
Common Stock Dividend		—	—		—		(14,077,437)		(14,077,437)		—			(14,077,437)
Net Income		—	—		—		20,467,991		20,467,991		2,248,265			22,716,256
Balance at September 30, 2024		46,902,091	$	4,692	$	167,167,687	$	165,417,353	$	332,589,732	$	46,224,871		$	378,814,603

	Common Stock		Additional Paid-in Capital		Retained Earnings		Total Pangaea Logistics Solutions Ltd. Equity		Non-Controlling Interest		Total Stockholders' Equity
		Shares											Amount
Balance at June 30, 2023		46,466,622	4,648		163,890,246		148,330,406		312,225,300		49,346,431			361,571,731
Share-based compensation		—	—		270,007		—		270,007		—			270,007



Common Stock Dividend		—	—		—		(4,654,045)		(4,654,045)		—			(4,654,045)
Net Income		—	—		—		18,868,291		18,868,291		1,321,811			20,190,102
Balance at September 30, 2023		46,466,622	$	4,648	$	164,160,253	$	162,544,652	$	326,709,553	$	50,668,242		$	377,377,795

Balance at December 31, 2022		45,898,395	4,590		162,894,080		151,327,392		314,226,062		54,495,468			368,721,530
Share-based compensation		—	—		1,393,514		—		1,393,514		—			1,393,514
Distribution to Non-Controlling Interests		—	—		—		—		—		(5,000,000)			(5,000,000)
Issuance of restricted shares, net of forfeitures		568,227	58		(127,341)		—		(127,283)					(127,283)
Common Stock Dividend		—	—		—		(13,969,838)		(13,969,838)		—			(13,969,838)
Net Income		—	—		—		25,187,098		25,187,098		1,172,774			26,359,872
Balance at September 30, 2023		46,466,622	$	4,648	$	164,160,253	$	162,544,652	$	326,709,553	$	50,668,242		$	377,377,795

The accompanying notes are an integral part of these consolidated financial statements.

Pangaea Logistics Solutions, Ltd.

Consolidated Statements of Cash Flows

(unaudited)


	Nine Months Ended September 30,
	2024		2023
Operating activities
Net income	$	22,716,256	$	26,359,872
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense	22,609,231		22,546,350
Amortization of deferred financing costs	739,522		701,275
Amortization of prepaid rent	91,399		91,048
Unrealized loss (gain) on derivative instruments	1,804,388		(2,760,059)
Income from equity method investee	(1,445,750)		(417,636)
Earnings attributable to non-controlling interest recorded as other long term liability	420,826		1,027,798
Provision for doubtful accounts	1,671,197		933,449

Loss on sale of vessel	—		1,172,196
Drydocking costs	(2,999,998)		(3,368,800)
Share-based compensation	2,313,185		1,393,514
Change in operating assets and liabilities:
Accounts receivable	2,563,160		(17,676,862)
Inventories	(10,186,517)		2,757,206
Advance hire, prepaid expenses and other current assets	(5,637,302)		885,264
Accounts payable, accrued expenses and other current liabilities	11,297,723		3,324,586
Deferred revenue	450,565		(7,086,632)
Net cash provided by operating activities	46,407,885		29,882,569

Investing activities
Purchase of vessels and vessel improvements	(57,530,543)		(27,217,355)

Purchase of fixed assets and equipment	(160,231)		—

Proceeds from sale of vessel	—		8,037,804
Acquisitions, net of cash acquired	—		(7,200,000)
Dividends received from equity method investments	510,000		1,637,500
Contributions to non-consolidated subsidiaries and other investments	(171,699)		(275,000)
Net cash used in investing activities	(57,352,473)		(25,017,051)

Financing activities
Proceeds from long-term debt	64,150,000		—
Payments of financing fees and debt issuance costs	(1,228,714)		—
Payments of long-term debt	(28,963,663)		(12,435,039)
Proceeds from finance leases	8,000,000		—
Payments of finance lease obligations	(18,653,782)		(12,211,158)

Dividends paid to non-controlling interests	(2,333,334)		(5,000,000)
Cash dividends paid	(13,944,264)		(13,618,424)
Cash paid for incentive compensation shares relinquished	—		(127,283)

Payments to non-controlling interest recorded as long-term liability	(2,000,000)		(2,500,000)
Net cash provided by (used in) financing activities	5,026,243		(45,891,904)

Net change in cash and cash equivalents	(5,918,345)		(41,026,386)
Cash and cash equivalents, beginning of year	99,037,866		128,384,606
Cash and cash equivalents, end of period	$	93,119,521	$	87,358,220

The accompanying notes are an integral part of these consolidated financial statements.

NOTE 1 - GENERAL INFORMATION AND RECENT EVENTS

Organization and General

The accompanying consolidated financial statements include the accounts of Pangaea Logistics Solutions Ltd. and its consolidated subsidiaries (collectively, the “Company”, “Pangaea” “we” or “our”). The Company is engaged in the ocean transportation of drybulk cargoes worldwide through the ownership, chartering and operation of drybulk vessels. The Company is a holding company incorporated under the laws of Bermuda as an exempted company on April 29, 2014.

At September 30, 2024, the Company owns three Panamax, two Ultramax Ice Class 1C, two Ultramax and nine Supramax drybulk vessels. The Company owns two-thirds of Nordic Bulk Holding Company Ltd. ("NBHC") which owns a fleet of six Panamax Ice Class 1A drybulk vessels. The Company owns 50% of Nordic Bulk Partners LLC. ("NBP") which owns a fleet of four Post Panamax Ice Class 1A drybulk vessels. The Company has a 50% interest in the owner of a deck barge. Additionally, the Company owns port and terminal operations located in Fort Lauderdale, Florida, and Baltimore, Maryland.

On November 6, 2024, the Company acquired the remaining 50% interest in NBP from a non-affiliate, resulting in full ownership of NBP's fleet of four Post Panamax Ice Class 1A dry bulk vessels.

NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q. Accordingly, these interim financial statements do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements. The accompanying financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the interim period results. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023.

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the percentage completion of voyages in process, the establishment of the allowance for credit losses and the estimate of salvage value used in determining vessel depreciation expense. Actual results could differ from those estimates.

Concentration of credit risk

The Company’s accounts receivable balance includes outstanding receivables from two significant customers. These balances comprise 28% and 14% of accounts receivable, respectively, as of September 30, 2024.

Advance hire, prepaid expenses and other current assets

Advance hire, prepaid expenses and other current assets were comprised of the following:


	September 30, 2024		December 31, 2023
	(unaudited)
Advance hire	$	3,947,918	$	2,509,313
Prepaid expenses	6,987,445		7,072,634
Accrued receivables	10,607,731		5,777,596
Cash margin on deposit	4,226,396		3,751,257
Derivative assets	1,626,239		3,384,137
Other current assets	4,823,921		5,845,309
	$	32,219,650	$	28,340,246

Goodwill

We conducted our annual qualitative assessment of goodwill as of June 1, 2024, which indicated that it was more likely than not that the fair value of the Company’s goodwill exceeded its carrying amount, thus no impairment was indicated. As of September 30, 2024, no events or changes in circumstances occurred that would necessitate a further impairment review.

Other non-current Assets

Other non-current assets were comprised of the following:


	September 30, 2024		December 31, 2023
	(unaudited)
Intangible Assets, net of accumulated amortization of $1,114,571 and $474,038 as of September 30, 2024 and December 31, 2023, respectively	$	1,136,530	$	1,777,063
Investment in Seamar Management	479,999		706,655
Investment in Bay Stevedoring LLC	2,856,271		1,667,093
Investment in Narragansett Bulk Carriers (US) Corp	519,975		519,975
Other investments	1,114,423		919,509
	$	6,107,198	$	5,590,295

Accounts payable, accrued expenses and other current liabilities

Accounts payable, accrued expenses and other current liabilities were comprised of the following:


	September 30, 2024		December 31, 2023
	(unaudited)
Accounts payable	$	11,961,040	$	6,277,693
Accrued expenses	13,991,724		14,038,418
Bunkers suppliers	7,672,260		4,393,533
Charter hire payable	10,838,685		8,112,701

Other accrued liabilities	3,314,298		3,013,917
	$	47,778,007	$	35,836,262

Leases

Time charter in contracts

The Company charters in vessels to supplement its owned fleet to support its voyage charter operations. The Company hires vessels under time charters with third party vessel owners, and recognizes the charter hire payments as an expense on a straight-line basis over the term of the charter. Charter hire payments are typically made in advance, and the unrecognized portion is reflected as advance hire in the accompanying consolidated balance sheets. Under the time charters, the vessel owner is responsible for the vessel operating costs such as crews, maintenance and repairs, insurance, and stores. As allowed by a practical expedient under ASC 842, Leases ("ASC 842"), the Company made an accounting policy election by class of underlying asset for leases with a term of 12 months or less, to forego recognizing a right-of-use asset and lease liability on its balance sheet. For the quarter ending September 30, 2024, the Company did not have any time charter in contracts with terms greater than 12 months, as such charter hire expense presented on the consolidated statements of income are lease expenses for chartered in contracts less than 12 months.

Time charter out contracts

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. The charterer has the power to direct the use and receives substantially all of the economic benefits from the use of the vessel. The Company determined that all time charter contracts are considered operating leases and therefore fall under the scope of ASC 842 because: (i) the vessel is an identifiable asset; (ii) the Company does not have substantive substitution rights; and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benefits from such use.

At September 30, 2024, the Company had four vessels chartered to customers under time charters that contained a lease. These four leases varied in original length from 35 days to 123 days. The lease payments due under these arrangements totaled approximately $1,302,000 and each of the time charters were due to be completed in 35 days or less.

At September 30, 2023, the Company had two vessels chartered to customers under time charters that included a lease. These two leases varied in original length from 30 days to 32 days. The lease payments due under this arrangement totaled approximately $247,000 and each time charter was due to be completed in 10 days or less.

The Company does not have any sales-type or direct financing leases.

Office leases

The Company has four non-cancelable office and office equipment leases. The resulting lease assets and liabilities are not material.

Ground Lease

The company entered into a 10-year ground lease agreement with the Tampa Port Authority, commencing on April 22, 2024. According to ASC 842, this lease will be accounted for as a right-of-use (ROU) asset and a lease liability on the balance sheet. The initial measurement of the ROU asset and lease liability will be based on the present value of the lease payments over the lease term.

Revenue Recognition

In a voyage charter contract, the charterer hires the vessel to transport a specific agreed-upon cargo for a single voyage, which may contain multiple load ports and discharge ports. The consideration in such a contract is determined on the basis of a freight rate per metric ton of cargo carried or occasionally on a lump sum basis. The charter party generally has a minimum amount of cargo. The charterer is liable for any short loading of cargo or "dead" freight. The voyage contract generally has standard payment terms of 95% freight paid within three days after completion of loading. The voyage charter party generally has a "demurrage" or "despatch" clause. As per this clause, the charterer reimburses the Company for any delays that exceed the agreed to laytime at the ports visited, with the amounts recorded as demurrage revenue. Conversely, the charterer is given credit if the loading/discharging activities happen within the allowed laytime which is known as despatch and results in a reduction of revenue. In a voyage charter contract, the performance obligations begin to be satisfied once the vessel begins loading the cargo. The Company determined that its voyage charter contracts consist of a single performance obligation of transporting the cargo within a specified time period. Therefore, the performance obligation is met evenly as the voyage progresses, and the revenue is recognized on a straight-line basis over the voyage days from the commencement of the loading of cargo to completion of discharge.

The voyage contracts are considered service contracts which fall under the provisions of ASC 606, Revenue from Contracts with Customers because the Company, as the shipowner, retains control over the operations of the vessel such as directing the routes taken or the vessel speed. The voyage contracts generally have variable consideration in the form of demurrage or despatch.

During time charter agreements, 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, the charterers have substantive decision-making rights to direct how and for what purpose the vessel is used. As such, the Company has identified that time charter agreements contain a lease in accordance with ASC 842. Revenue is not earned when vessels are offhire.

In a stevedore service contract, the Company is paid to provide cargo handling services on a per unit basis for a specified quantity of cargo. The consideration in such a contract is determined on the basis of a rate per unit of cargo handled. The contract

may contain minimum quantities. Revenues from stevedore service contracts are earned and recognized on a per unit basis as completed over the performance period.

Deferred Revenue

All deferred revenue recorded on the consolidated balance sheets as of December 31, 2023, was recognized during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements Not Yet Adopted

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. As of September 30, 2024, the Company no longer holds any LIBOR-based contracts or financial instruments; therefore, the relief provisions under Topic 848 have no impact on our consolidated financial statements. The Company will continue to monitor any future guidance from the FASB related to reference rate reform.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends the existing segment reporting guidance (ASC Topic 280 — Segment Reporting (“ASC 280”)) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment and a description of its composition, the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. In addition, companies with a single reporting segment will have to provide all of the disclosures required by ASC 280, including the significant segment expense disclosures.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of our pending adoption of this standard on its financial statement disclosures.

NOTE 3 - CASH AND CASH EQUIVALENTS

Cash and cash equivalents include short-term deposits with an original maturity of less than three months. The following table provides a reconciliation of cash and cash equivalents reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows:


	September 30, 2024		December 31, 2023
	(unaudited)
Money market accounts – cash equivalents	$	32,166,579	$	38,556,005
Time deposit accounts - cash equivalents	15,029,874		10,206,500
Cash (1)	45,923,068		50,275,361
Total cash and cash equivalents	$	93,119,521	$	99,037,866

(1) It consists of cash deposits at various major banks.

As of September 30, 2024 and December 31, 2023, the Company held cash and cash equivalents in the following subsidiaries:


Cash and cash equivalents	September 30, 2024		December 31, 2023
	(unaudited)
Pangaea (1)	$	78,562,316	$	81,652,679
NBHC (2)	8,996,753		11,948,547
NBP and Deck Barge (3)	5,560,452		5,436,640
Total cash and cash equivalents	$	93,119,521	$	99,037,866

(1) Held by 100% owned Pangaea consolidated subsidiaries

(2) Held by a 67% owned Pangaea consolidated subsidiary

(3) Held by a 50% owned Pangaea consolidated subsidiary. On November 6, 2024, the Company acquired the remaining 50% interest in NBP.

NOTE 4 - FIXED ASSETS

At September 30, 2024, the Company owned twenty-six dry bulk vessels including ten financed under finance leases; and one barge. The carrying amounts of these vessels, including unamortized drydocking costs, are as follows:


	September 30,		December 31,
	2024		2023
	(unaudited)
m/v NORDIC ODYSSEY (1)	$	17,617,399	$	18,949,524
m/v NORDIC ORION (1)	18,549,448		19,789,942
m/v NORDIC OSHIMA (1)	23,374,719		22,938,264
m/v NORDIC OLYMPIC (1)	22,293,283		23,306,330
m/v NORDIC ODIN (1)	22,401,646		23,411,836
m/v NORDIC OASIS (1)	23,787,801		24,853,935
m/v NORDIC NULUUJAAK (2) (4)	35,019,093		36,088,312
m/v NORDIC QINNGUA (2) (4)	34,992,440		36,018,502
m/v NORDIC SANNGIJUQ (2) (4)	34,620,640		35,623,004
m/v NORDIC SIKU(2) (4)	35,003,265		36,009,984
m/v BULK ENDURANCE	20,923,447		21,859,034
m/v BULK PRUDENCE	25,751,987		26,533,530
m/v BULK COURAGEOUS (4)	14,799,839		15,145,246
m/v BULK CONCORD (4)	18,941,934		18,965,726
m/v BULK FREEDOM	7,554,843		8,150,075
m/v BULK PRIDE	10,813,297		11,194,335
m/v BULK SPIRIT (4)	12,212,972		12,970,111
m/v BULK SACHUEST	15,880,154		16,487,253
m/v BULK INDEPENDENCE	12,904,828		13,752,517
m/v BULK FRIENDSHIP (4)	12,167,309		12,810,712
m/v BULK VALOR	15,900,269		16,434,083
m/v BULK PROMISE	16,454,062		16,970,026
m/v BULK BRENTON	28,529,665		—
m/v BULK PATIENCE	28,509,394		—
MISS NORA G PEARL (3)	1,597,201		1,821,235
	510,600,935		470,083,516
Other fixed assets, net	3,980,156		4,181,655
Total fixed assets, net	$	514,581,091	$	474,265,171

Right of Use Assets
Finance lease right of use assets:
m/v BULK XAYMACA	$	10,796,853	$	11,623,719
m/v BULK DESTINY	17,986,271		18,770,104
Operating lease right of use assets:
Other Right of Use Assets, net (4)	351,364		—
Total right of use assets	$	29,134,488	$	30,393,823

(1) Vessels are owned by NBHC, a consolidated entity in which the Company has a two-third ownership interest at September 30, 2024 and December 31, 2023, respectively.

(2) Vessels are owned by NBP, a consolidated joint venture in which the Company has a 50% ownership interest at September 30, 2024 and December 31, 2023. On November 6, 2024, the Company acquired the remaining 50% interest in NBP from a non-affiliate, resulting in full ownership of NBP's fleet of four Post Panamax Ice Class 1A dry bulk vessels.

(3) Barge is owned by a 50% owned consolidated subsidiary.

(4) Refer to Note 6, "Leases" of our Financial Statements for additional information related to the Assets under finance lease and operating lease.

Long-lived Assets Impairment Considerations

The Company evaluates the recoverability of its fixed assets and other assets in accordance with ASC 360-10-15, Impairment or Disposal of Long-Lived Assets, which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, we perform an analysis of the anticipated undiscounted future net cash flows to be derived from the related long-lived assets. Our assessment is made at the asset 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 Company concluded that no triggering event had occurred during the nine months ended September 30, 2024, which would require impairment testing.

The Company concluded that no triggering event had occurred during the third quarter of 2023, which would require impairment testing. However, during the first quarter of 2023, the Company determined that a triggering event had occurred related to the sale of a vessel, as its carrying value exceeded its fair value. On January 18, 2023, the Company signed a memorandum of agreement to sell the m/v Bulk Newport for $8.9 million in net consideration after brokerage commissions. As a result, the Company recorded a loss on sale of $1.2 million in the first quarter of 2023. The Company performed an impairment analysis on each asset group and concluded the estimated undiscounted future cash flows were higher than their carrying amounts and as such, no additional loss on impairment was recognized.

NOTE 5 - DEBT

Long-term debt consists of the following:


	September 30, 2024		December 31, 2023		Interest Rate (%) (1)		Maturity Date
	(unaudited)



Bulk Nordic Odyssey (MI) Corp., Bulk Nordic Orion (MI) Corp. Senior Secured Term Loan Facility (2) (3)	11,062,809		12,512,080		2.95	%	December 2027
Bulk Nordic Oshima (MI) Corp., Bulk Nordic Odin (MI) Corp., Bulk Nordic Olympic (MI) Corp., Bulk Nordic Oasis (MI) Corp. Secured Term Loan Facility (2) (3)	36,200,000		39,800,000		3.38	%	June 2027
The Amended Senior Facility - Dated May 13, 2019 (formerly The Amended Senior Facility - Dated December 21, 2017)
Bulk Nordic Six Ltd. - Tranche A	—		9,033,325				May 2024

Bulk Pride - Tranche C	—		1,900,000				May 2024
Bulk Independence - Tranche E	—		9,500,000				May 2024
$50 Million Senior Secured Term Loan Facility - Dated May 16, 2024 (4)	48,144,309		—		7.60	%	May 2029
Bulk Valor Corp. Loan and Security Agreement (2)	9,056,964		10,087,642		3.29	%	June 2028
Bulk Promise Corp. (2)	8,647,112		9,685,334		5.45	%	October 2027
Bulk Sachuest (2)	7,126,618		7,733,094		6.19	%	October 2029
Bulk Prudence	15,200,000		—		7.18	%	July 2029
Total	$	135,437,812	$	100,251,475
Less: unamortized issuance costs, net	(1,886,820)		(1,053,440)
	$	133,550,992	$	99,198,035
Less: current portion	(16,536,650)		(30,751,726)
Secured long-term debt, net	$	117,014,342	$	68,446,309

(1)As of September 30, 2024.

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

(3)The borrower under this facility is NBHC. The Company has two-third's ownership interest and an independent third party has one-third ownership interest in NBHC. NBHC is consolidated in accordance with ASC 810-10 and as such, amounts pertaining to the non-controlling ownership held by the third parties in the financial position of NBHC are reported as non-controlling interest in the accompanying balance sheets.

(4)This facility is secured by the vessels m/v Bulk Endurance, m/v Bulk Brenton, and Bulk Patience, and is guaranteed by the Company.

$50 Million Senior Secured Term Loan Facility

On May 16, 2024, the Company entered into a $50 million Senior Secured Term Loan facility with a lender, providing committed funding for vessel acquisitions. The following drawdowns have been made under this facility, each with a maturity date of May 2029:

Initial Drawdown: On May 17, 2024, Bulk Endurance (MI) Corp., as the initial borrower, drew $17.6 million against the MV Bulk Endurance. The loan is repayable in quarterly installments of $413,145, with a balloon payment of $9,337,089 due at maturity in May 2029. Interest is floating at the Secured Overnight Financing Rate (SOFR) plus 2.5%.

Second Drawdown: On July 19, 2024, Bulk Brenton (MI) Corp. drew $15.7 million to finance the MV Bulk Brenton, which was delivered on July 26, 2024. Repayment is structured in quarterly installments of $392,545, with a final balloon payment of $8,216,654 due in May 2029. The interest rate is SOFR plus 2.5%, consistent with the initial drawdown.

Third Drawdown: On August 14, 2024, Bulk Patience (MI) Corp. drew $15.7 million for the MV Bulk Patience, delivered on August 20, 2024. This tranche is repayable in quarterly installments of $372,354, with a balloon payment of $8,972,626, also due in May 2029. The interest rate aligns with the prior tranches at SOFR plus 2.5%.

Following the third drawdown, the Company canceled the remaining undrawn amount under the facility.

$15.2 Million Senior Secured Term Loan Facility

On July 17, 2024, the Company entered into a $15.2 million Senior Secured Term Loan facility to finance the MV Bulk Prudence, an Ultramax Bulk Carrier. The loan is structured with quarterly installments of $347,000 and a final balloon payment of $8,607,000 due in July 2029. Interest on the loan is based on a floating rate at SOFR plus 1.90%. Bulk Prudence Corp., a wholly-owned subsidiary of Pangaea Logistics Solutions Ltd., is the borrower, with Pangaea and affiliated entities acting as guarantors.

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


	Years ending December 31,
	(unaudited)
2024 (remainder of the year)	$	4,118,797
2025	16,576,196
2026	16,738,201
2027	46,055,191
2028	11,422,630
Thereafter	40,526,797
	$	135,437,812

Financial Covenants

Under the Company's respective debt agreements, the Company is required to comply with certain financial covenants, including to maintain minimum liquidity and a collateral maintenance ratio clause, which requires the aggregate fair market value of the vessels plus the net realizable value of any additional collateral provided, to remain above defined ratios and to maintain positive working capital. The Company was in compliance with all applicable financial covenants as of September 30, 2024 and December 31, 2023.

NOTE 6 - LEASES

The Bulk Destiny, Bulk Xaymaca, Bulk Spirit, Bulk Friendship, Bulk Courageous, Nordic Nuluujaak, Nordic Qinngua, Nordic Sanngijuq, Nordic Siku and Bulk Concord are classified as finance leases and the leases are secured by the assignment of earnings and insurances and by guarantees of the Company. Minimum lease payments under finance leases are recognized on a straight‑line basis over the term of the lease and the Company will own these vessels at the end of lease term. Refer to the Company's annual report Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on March 14, 2024 for additional information on these finance leases.

Finance and operating leases consists of the following as of September 30, 2024:


	September 30, 2024		December 31, 2023		Interest Rate (%) (1)		Maturity Date
	(unaudited)
Finance Leases:
Bulk PODS Ltd.	$	3,380,207	$	4,763,020	6.71	%	December 2027

Bulk Spirit Ltd.	6,631,510		7,486,979		6.98	%	February 2027
Bulk Nordic Five Ltd. (2)	10,700,000		11,595,861		3.97	%	April 2028
Bulk Friendship Corp. (2)	7,950,000		8,471,002		6.75	%	September 2029
Bulk Nordic Seven LLC (3)	27,241,202		28,482,063		7.06	%	May 2036
Bulk Nordic Eight LLC(3)	27,232,892		28,473,392		7.06	%	June 2036
Bulk Nordic Nine LLC(3)	27,386,548		28,591,644		7.06	%	September 2036
Bulk Nordic Ten LLC(3)	27,511,829		28,712,632		7.06	%	November 2036
Bulk Courageous Corp. (2)	8,100,000		9,000,000		3.93	%	April 2028
Phoenix Bulk 25 Corp. (2)	10,886,035		12,097,410		4.67	%	February 2029
Operating Leases:
Other (4)	378,364		—		7.89	%	March 2034
Total	$	157,398,587	$	167,674,003
Less: unamortized issuance costs, net	(2,092,825)		(2,437,102)
	$	155,305,762	$	165,236,901
Less: current portion	(14,238,935)		(21,970,124)
Long-term lease liabilities, net	$	141,066,827	$	143,266,777

(1)As of September 30, 2024 including the effect of interest rate cap if any.

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

(3)The Company entered into an interest rate cap effective from Q2 2026 through Q4 2026, which caps the SOFR at 3.51%.

(4)The company entered into a 10-year ground lease agreement with the Tampa Port Authority, commencing on April 22, 2024.

Bulk Friendship Corp. Bareboat Charter Party

In September 2024, Bulk Friendship Corp. entered into a sale and leaseback arrangement for $8.0 million. Under ASC 606, the transaction did not qualify as a sale, as control of the vessel was not transferred to the lessor. Consequently, the lease is classified as a finance lease in accordance with ASC 842, due to the inclusion of a fixed-price purchase option, which the Company expects to exercise. The minimum lease payments consist of a fixed component of $50,000 per month and a floating component based on one-month SOFR plus a margin of 1.9%. The Company has the option to purchase the vessel after the 18th month or at any point upon lessor default. If not exercised earlier, a final purchase option allows the Company to acquire the vessel at the end of the five-year term for $5 million.

The following table provides details of the Company's future minimum lease payments under finance and operating lease liabilities recorded on the Company's consolidated balance sheets as of September 30, 2024.


Year ending December 31,	Amount
	(unaudited)
2024 (remainder of the year)	$	6,580,334
2025	25,819,766
2026	24,349,214
2027	25,225,485
2028	29,867,261
Thereafter	118,335,906
Total minimum lease payments	$	230,177,966
Less imputed interest	72,779,379
Present value of minimum lease payments	157,398,587
Less current portion	(14,238,935)
Less issuance costs	(2,092,825)
Long-term portion	$	141,066,827

NOTE 7 - DERIVATIVE INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Forward freight agreements

The Company assesses risk associated with fluctuating future freight rates and, when appropriate, hedges identified economic risk with appropriate derivative instruments, specifically forward freight agreements (FFAs). These economic hedges do not usually qualify for hedge accounting under ASC 815 and as such, the usage of such derivatives can lead to fluctuations in the Company’s reported results from operations on a period-to-period basis.

Fuel swap contracts

The Company continuously monitors the market volatility associated with bunker prices and seeks to reduce the risk of such volatility through a bunker hedging program. The Company enters into fuel swap contracts that are not designated for hedge accounting under ASC 815 and as such, the usage of such derivatives can lead to fluctuations in the Company’s reported results from operations on a period-to-period basis.

Interest rate cap

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and interest rate caps as part of its interest rate risk management strategy. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract.

The estimated fair values of the Company’s forward freight agreements and fuel swap contracts are based on market prices obtained from an independent third-party valuation specialist based on published indices. Such quotes represent the estimated amounts the Company would receive or pay to terminate the contracts. The interest rate caps contracts are valued using analysis obtained from independent third party valuation specialists based on market observable inputs, representing Level 2 assets.

The following table summarizes assets and liabilities measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023:


	Asset Derivative					Liability Derivative
Derivative instruments	Balance Sheet Location	09/30/2024		12/31/2023		Balance Sheet Location	9/30/2024		12/31/2023
		(unaudited)					(unaudited)
Margin accounts (1)	Other current assets	$	4,226,396	$	3,751,257	Other current liabilities	$	—	$	—
Forward freight agreements (2)	Other current assets	$	—	$	—	Other current liabilities	$	121,884	$	1,217,820
Fuel swap contracts (2)	Other current assets	$	—	$	—	Other current liabilities	$	1,665,659	$	523,233
Interest rate cap (2)	Other current assets	$	1,626,239	$	3,384,137	Other current liabilities	$	—	$	—

(1) The fair value measurements were all categorized within Level 1 of the fair value hierarchy.

(2) These fair value measurements were all categorized within Level 2 of the fair value hierarchy.

The three levels of the fair value hierarchy established by ASC 820, Fair Value Measurements and Disclosures, in order of priority are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 fair value measurements include cash, money-market accounts and restricted cash accounts.

Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable.

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

The following table presents the effect of our derivative financial instruments on the consolidated statements of operations for the nine months ended September 30, 2024 and 2023:


	Unrealized gain (loss) on derivative instruments
	Three Months Ended				Nine Months Ended
Derivative instruments	09/30/2024		9/30/2023		09/30/2024		9/30/2023
	(unaudited)				(unaudited)
Forward freight agreements	$	(712,929)	$	941,518	$	1,095,937	$	(736,983)
Fuel Swap Contracts	(3,253,659)		3,430,759		$	(1,142,426)	$	2,941,250
Interest rate cap	(1,994,636)		159,635		$	(1,757,898)	$	555,792
Total (loss) gain	$	(5,961,224)	$	4,531,912	$	(1,804,388)	$	2,760,059

NOTE 8 - RELATED PARTY TRANSACTIONS

Amounts and notes payable or notes receivable to related parties consist of the following:


	December 31, 2023		Activity	September 30, 2024
			(unaudited)



Included in prepaid expenses, accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets:
Affiliated companies payable / (prepaid expenses) (i)	$	1,490,060	(2,529,546)	$	(1,039,486)

i.Seamar Management S.A. ("Seamar")

Under the terms of a technical management agreement between the Company and Seamar Management S.A. (“Seamar”), an equity method investee, Seamar is responsible for the day-to-day operations for certain of the Company’s owned vessels. During the three months ended September 30, 2024 and 2023, the Company incurred technical management fees of approximately $829,800 and $828,000, respectively, under this arrangement. During the nine months ended September 30, 2024 and 2023, the Company incurred technical management fees of approximately $2,359,000 and $2,394,990, respectively, under this arrangement.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

Long-term Contracts Accounted for as Operating Leases

The Company leases office space for its Copenhagen operations. The lease expires in December 2025, at which time the lease continues on a month to month basis with a non-cancelable period of six months.

The Company leases office space for its Singapore operations. In July 2023, the Company renewed its lease for a two year period. At September 30, 2024, the remaining lease term is eleven months.

For the three months ended September 30, 2024 and 2023, the Company recognized approximately $50,000 and $46,000, respectively, as lease expense for office leases in General and Administrative Expenses.

For the nine months ended September 30, 2024 and 2023, the Company recognized approximately $148,000 as lease expense for office leases in General and Administrative Expenses.

Legal Proceedings and Claims

The Company is subject to certain asserted claims arising in the ordinary course of business. The Company intends to vigorously assert its rights and defend itself in any litigation that may arise from such claims. While the ultimate outcome of these matters could affect the results of operations of any one year, and while there can be no assurance with respect thereto, management believes that after final disposition, any financial impact to the Company would not be material to its consolidated financial position, results of operations, or cash flows.

NOTE 10 - OTHER LONG-TERM LIABILITIES

In September 2019, the Company entered into an LLC agreement for the formation of NBP, that, at inception is owned 75% by the Company and 25% by an independent third party. NBP was established for the purpose of constructing and owning four new-build ice class post panamax vessels. The third party contributed additional funding which increased their ownership of NBP to 50% at the time of delivery of the new-build ice class post panamax vessels. The agreement contains both put and call option provisions. Accordingly, the Company may be obligated, pursuant to the put option, or entitled to, pursuant to the call option, to purchase the third party's interest in NBP beginning anytime after September 2026. The put option and call option are at fixed prices which are not significantly different from each other, starting at $4.0 million per vessel on the fourth anniversary from completion and delivery of each vessel and declining to $3.7 million per vessel on or after the seventh anniversary from completion and delivery of each vessel. If neither put nor call option is exercised, the Company is obligated to purchase the vessels from NBP at a fixed price. Pursuant to ASC 480, Distinguishing Liabilities from Equity, the Company has recorded the third party's interest in NBP as a Long term liabilities - Other. The Company took delivery of Nordic Nuluujaak, Nordic Qinngua, Nordic Sanngijuq and Nordic Siku in 2021. Earnings attributable to the third party’s interest in NBP are recorded in Income attributable to Non-controlling interest recorded as long-term liability. On November 6, 2024, the Company acquired the remaining 50% interest in NBP from the third party, resulting in full ownership of NBP.

The roll-forward of Other Long-term Liabilities are as follows:


	09/30/2024		12/31/2023
	(unaudited)		(audited)
Beginning Balance	$	17,936,540	$	19,974,390
Payments to non-controlling interest recorded as long-term liability	(2,000,000)		(2,500,000)

Earnings attributable to non-controlling interest recorded as other long term liability	420,826		462,150


Ending balance	$	16,357,366	$	17,936,540

NOTE 11 - NET INCOME PER COMMON SHARE

The computation of basic net income per share is based on the weighted average number of common shares outstanding for the nine months ended September 30, 2024 and 2023. Diluted net income per share gives effect to restricted stock awards.

The following table summarizes the calculation of basic and diluted income per share:


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(unaudited)				(unaudited)
Net income	$	5,111,040	$	18,868,291	$	20,467,991	$	25,187,098
Weighted Average Shares - Basic	45,279,813		44,775,438		45,257,462		44,754,620
Dilutive effect of restricted stock awards	731,589		306,230		690,086		353,419
Weighted Average Shares - Diluted	46,011,402		45,081,668		45,947,548		45,108,039
Basic net income per share	$	0.11	$	0.42	$	0.45	$	0.56
Diluted net income per share	$	0.11	$	0.42	$	0.45	$	0.56

NOTE 12 - ACQUISITIONS

On March 24, 2023, the Company signed a Members Interest Purchase Agreement for the acquisition of marine port terminal operations for a purchase price of $7.2 million. On June 1, 2023, the Company completed the acquisition for a total purchase price of $9.3 million including acquired net working capital. Under the terms of the agreement, Pangaea acquired all onshore assets, licenses and business operations related to the sellers terminal operation.

The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed:


Net working capital, excluding cash	$	1,772,889
Property, plant and equipment	1,844,100
Goodwill	3,104,800
Other intangible assets	2,251,100
Fair value of net assets acquired, excluding cash and cash equivalents	8,972,889
Cash and cash equivalents	326,888
Fair value of net assets acquired	$	9,299,777

NOTE 13 - SUBSEQUENT EVENTS

On October 3, 2024, Pangaea Logistics Solutions Ltd. entered into a definitive agreement to purchase the remaining 50% equity ownership of Nordic Bulk Partners LLC from HS Nordic LLC for $18.9 million in cash. The transaction was completed on November 6, 2024, resulting in Pangaea owning 100% of Nordic Bulk Partners. As of September 30, 2024, HS Nordic LLC's 50% interest was recorded as a $16.4 million long-term liability. Upon completion of the transaction on November 6, 2024, this liability was extinguished, with an additional $2.5 million payment over the recorded liability amount.

On November 8, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, to be paid on December 13, 2024, to all shareholders of record as of November 29, 2024.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our consolidated financial statements and footnotes thereto contained in this report.

Forward Looking Statements

All statements other than statements of historical fact included in this Form 10-Q including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward looking statements. When used in this Form 10-Q, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or our management, identify forward looking statements. Such forward looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward looking statements as a result of the risk factors and other factors detailed in our filings with the Securities and Exchange Commission. All subsequent written or oral forward looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph.

Important Financial and Operational Terms and Concepts

The Company uses a variety of financial and operational terms and concepts when analyzing its performance.

These include revenue recognition, deferred revenue, allowance for doubtful accounts, 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. The Company incurs expenses for voyage charters, including bunkers (fuel), port charges, canal tolls, brokerage commissions and cargo handling operations, which are expensed as incurred.

Charter Expenses. The Company charters in vessels to supplement its owned fleet to support its voyage charter operations. The Company hires vessels under time charters with third party vessel owners, and recognizes the charter hire payments as an expense on a straight-line basis over the term of the charter. Charter hire payments are typically made in advance, and the unrecognized portion is reflected as advance hire in the accompanying consolidated balance sheets. Under the time charters, the vessel owner is responsible for the vessel operating costs such as crews, maintenance and repairs, insurance, and stores. The Company does not record a right-of-use asset or lease liability for any arrangement less than one year.

Vessel Operating Expenses. Vessel operating expenses represent the cost to operate the Company’s owned vessels. Vessel operating expenses include crew hire and related costs, the cost of insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores, tonnage taxes, other miscellaneous expenses, and technical management fees. These expenses are recognized as incurred. Technical management services include day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory and classification society compliance, arranging the hire of crew, and purchasing stores, supplies, and spare parts.

Terminal & Stevedore Expenses. Terminal & Stevedore expenses represent the cost to provide the Company's cargo handling services. Terminal & Stevedore expenses include direct labor and related costs, the cost of insurance, expenses relating to repairs and maintenance of shore based equipment, trucking, and other direct miscellaneous expenses.

Fleet Data. The Company believes that the measures for analyzing future trends in its results of operations consist of the following:

Shipping days. The Company defines shipping days 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 a time charter (time charter days).

Daily vessel operating expenses. The Company defines daily vessel operating expenses as vessel operating expenses divided by ownership days for the period. Vessel operating expenses include crew hire and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes, other miscellaneous expenses, and technical management fees.

Chartered in days. The Company defines chartered in days as the aggregate number of days in a period during which it chartered in vessels from third party vessel owners.

Time Charter Equivalent ‘‘TCE’’ rates. The Company defines TCE rates as total revenues less voyage expenses divided by the length of the voyage, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because rates for vessels on voyage charters are generally not expressed in per-day amounts while rates for vessels on time charters generally are expressed in per-day amounts.

Selected Financial Information


(in thousands, except for shipping days data and per share data) (figures may not foot due to rounding)	For the three months ended September 30,				For the nine months ended September 30,
	2024		2023		2024		2023
Selected Financial Data	(unaudited)				(unaudited)
Voyage revenue	$	145,120	$	127,885	$	356,506	$	346,300
Charter revenue	4,860		3,798		23,738		16,637
Terminal & Stevedore Revenue	3,135		3,934		9,117		4,454
Total revenue	153,115		135,616		389,361		367,391
Voyage expense	71,540		59,075		169,805		170,349
Charter hire expense	36,511		25,467		96,339		77,183
Vessel operating expenses	13,885		14,253		41,290		41,070
Terminal Expenses	2,417		3,518		7,325		3,892
Total cost of transportation and service revenue	124,353		102,312		314,759		292,495
Vessel and Terminal Equipment depreciation and amortization	7,678		8,063		22,527		22,462
Gross Profit	21,084		25,241		52,076		52,433
Other operating expenses	6,083		5,529		18,432		17,199
Loss on impairment of vessels	—		—		—		—
Loss on sale of vessel	—		—		—		1,172
Income from operations	15,001		19,711		33,644		34,062
Total other expense, net	(8,944)		479		(10,927)		(7,702)
Net income	6,057		20,190		22,716		26,360
(Income) loss attributable to non-controlling interests	(946)		(1,322)		(2,248)		(1,173)
Net income attributable to Pangaea Logistics Solutions Ltd.	$	5,111	$	18,868	$	20,468	$	25,187

Net income from continuing operations per common share information
Basic net income per share	$	0.11	$	0.42	$	0.45	$	0.56
Diluted net income per share	$	0.11	$	0.42	$	0.45	$	0.56
Weighted-average common shares Outstanding - basic	45,279,813		44,775,438		45,257,462		44,754,620
Weighted-average common shares Outstanding - diluted	46,011,402		45,081,668		45,947,548		45,108,039

Adjusted EBITDA (1)	$	23,917	$	27,881	$	59,795	$	60,042

Shipping Days (2)
Voyage days	4,549		4,314		11,289		11,283
Time charter days	256		296		1,318		1,341
Total shipping days	4,805		4,610		12,607		12,624

TCE Rates ($/day)	$	16,324	$	15,748	$	16,692	$	15,256


	September 30, 2024		December 31, 2023
Selected Data from the Consolidated Balance Sheets	(unaudited)		(audited)
Cash and cash equivalents	$	93,120	$	99,038
Total assets	$	749,167	$	705,180
Total secured debt, including leases liabilities	$	288,857	$	264,435
Total shareholders' equity	$	378,815	$	370,196

	For the nine months ended September 30,
	2024		2023
	(unaudited)
Selected Data from the Consolidated Statements of Cash Flows
Net cash provided by operating activities	$	46,408	$	29,883
Net cash used in investing activities	$	(57,352)	$	(25,017)
Net cash provided by (used in) financing activities	$	5,026	$	(45,892)

(1)Adjusted EBITDA represents net income (or loss), determined in accordance with U.S. GAAP, excluding interest expense, interest income, income taxes, depreciation and amortization, loss on impairment, loss on sale and leaseback of vessels, share-based compensation, 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. GAAP. 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 net income in accordance with U.S. GAAP to Adjusted EBITDA is as follows:


(in thousands, figures may not foot due to rounding)	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Transportation and Service Revenue (3)	(unaudited)				(unaudited)
Gross Profit (4)	$	21,085	$	25,241	$	52,076	$	52,433
Add:
Vessel and Terminal Equipment Depreciation and Amortization	7,678		8,063		22,527		22,462
Net transportation and service revenue	$	28,762	$	33,304	$	74,602	$	74,896

Adjusted EBITDA
Net Income	$	6,057	$	20,190	$	22,716	$	26,360
Interest expense, net	3,808		3,573		9,931		9,857
(Income) loss attributable to Non-controlling interest recorded as long-term liability interest expense	(274)		267		421		1,028
Depreciation and amortization	7,719		8,092		22,609		22,546
EBITDA	$	17,310	$	32,123	$	55,678	$	59,791
Non-GAAP Adjustments

Loss on sale of vessels	$	—	$	—	$	—	$	1,172
Share-based compensation	646		270		2,313		1,394
Unrealized loss (gain) on derivative instruments, net	5,961		(4,532)		1,804		(2,760)
Other non-recurring items	—		19		—		445
Adjusted EBITDA	$	23,917	$	27,881

Pangaea Logistics Solutions Ltd. [PANL] Filings
10-Q	[2024-11-12]
10-Q	[2024-08-08]
10-Q	[2024-05-09]
10-K	[2024-03-14]
10-Q	[2023-11-08]
10-Q	[2023-08-09]
10-Q	[2023-05-10]
10-K	[2023-03-15]
10-Q	[2022-11-09]
10-Q	[2022-08-09]
10-Q	[2022-05-10]
10-K	[2022-03-16]
10-Q	[2021-11-09]
10-Q	[2021-08-10]
10-Q	[2021-05-11]
10-K	[2021-03-15]
10-Q	[2020-11-12]
10-Q	[2020-08-12]
10-Q	[2020-05-13]
10-K	[2020-03-23]
10-Q	[2019-11-07]
10-Q	[2019-08-12]
10-Q	[2019-05-15]
10-K	[2019-03-20]
10-Q	[2018-11-08]
10-Q	[2018-08-07]
10-Q	[2018-05-10]
10-K	[2018-03-21]
10-Q	[2017-11-09]
10-Q	[2017-08-14]
10-Q	[2017-05-10]
10-K	[2017-03-23]
10-Q	[2016-11-10]
10-Q	[2016-08-15]
10-Q	[2016-05-11]
10-K	[2016-03-23]
10-Q	[2015-11-12]
10-Q	[2015-08-13]
10-Q	[2015-05-15]
10-K	[2015-03-31]
S-1	[2015-02-04]
10-Q	[2014-11-14]