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Published: 2024-11-12 17:00:48 ET
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panl-20240930
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 

FORM 10-Q 
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2024
 
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from to
 
Commission File Number: 001-36798

PANGAEA LOGISTICS SOLUTIONS LTD. 
(Exact name of Registrant as specified in its charter)
Bermuda98-1205464
(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 classTrading Symbol(s)Name of each exchange on which registered
Common StockPANLNasdaq 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 IFINANCIAL INFORMATION 
Item 1. 
   
 
   
 
  
 
  
 
   
Item 2.
   
Item 3.
   
Item 4.
   
PART II 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Signatures

2



Pangaea Logistics Solutions Ltd.
Consolidated Balance Sheets
September 30, 2024December 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 
Inventories26,742,783 16,556,266 
Advance hire, prepaid expenses and other current assets32,219,650 28,340,246 
Total current assets196,239,098 191,825,879 
Fixed assets, net514,581,091 474,265,171 
Right of use assets, net29,134,488 30,393,823 
Goodwill3,104,800 3,104,800 
Other non-current assets6,107,198 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 revenue16,080,451 15,629,886 
Current portion of secured long-term debt16,536,650 30,751,726 
Current portion of lease liabilities14,238,935 21,970,124 
Dividend payable1,279,494 1,146,321 
Total current liabilities95,913,537 105,334,319 
Secured long-term debt, net117,014,342 68,446,309 
Lease liabilities, net141,066,827 143,266,867 
Long-term liabilities - other - Note 1016,357,366 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 capital167,167,687 164,854,546 
Retained earnings165,417,353 159,026,799 
Total Pangaea Logistics Solutions Ltd. equity332,589,732 323,885,993 
Non-controlling interests46,224,871 46,309,940 
Total stockholders' equity378,814,603 370,195,933 
Total liabilities and stockholders' equity$749,166,675 $705,179,968 

 The accompanying notes are an integral part of these consolidated financial statements.
3

Pangaea Logistics Solutions Ltd.
Consolidated Statements of Operations
(unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2024202320242023
 
Revenues:
Voyage revenue$145,119,752 $127,884,506 $356,506,043 $346,300,186 
Charter revenue4,860,376 3,797,528 23,738,200 16,636,920 
Terminal & Stevedore Revenue3,134,936 3,934,154 9,117,226 4,453,811 
Total revenue153,115,064 135,616,188 389,361,469 367,390,917 
Expenses:
Voyage expense71,539,649 59,075,208 169,805,168 170,349,472 
Charter hire expense36,511,251 25,466,886 96,339,176 77,183,388 
Vessel operating expense13,884,629 14,252,533 41,289,813 41,070,199 
   Terminal & Stevedore Expenses2,417,374 3,517,736 7,324,959 3,892,318 
General and administrative6,041,857 5,500,121 18,349,556 17,115,013 
Depreciation and amortization7,719,083 8,092,495 22,609,231 22,546,350 
Loss on sale of vessel— — — 1,172,196 
Total expenses138,113,843 115,904,979 355,717,903 333,328,936 
Income from operations15,001,221 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 income893,879 775,504 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 income551,021 (212,639)1,229,193 422,636 
Total other expense, net(8,944,099)478,893 (10,927,310)(7,702,109)
Net income6,057,122 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:
Basic45,279,813 44,775,438 45,257,462 44,754,620 
Diluted46,011,402 45,081,668 45,947,548 45,108,039 
 
The accompanying notes are an integral part of these consolidated financial statements.

4

Pangaea Logistics Solutions Ltd.
Consolidated Statements of Stockholders' Equity
(unaudited)
Common StockAdditional Paid-in CapitalRetained EarningsTotal Pangaea Logistics  Solutions Ltd. EquityNon-Controlling InterestTotal  Stockholders' Equity
SharesAmount
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, 202346,466,622 $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 forfeitures435,46944(44)————
Common Stock Dividend— — — (14,077,437)(14,077,437)— (14,077,437)
Net Income— — — 20,467,99120,467,9912,248,26522,716,256
Balance at September 30, 202446,902,091 $4,692 $167,167,687 $165,417,353 $332,589,732 $46,224,871 $378,814,603 
Common StockAdditional Paid-in CapitalRetained EarningsTotal Pangaea Logistics  Solutions Ltd. EquityNon-Controlling InterestTotal  Stockholders' Equity
SharesAmount
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, 202245,898,395 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 forfeitures568,227 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, 202346,466,622 $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.

5
Pangaea Logistics Solutions, Ltd.
Consolidated Statements of Cash Flows
(unaudited)


 Nine Months Ended September 30,
 20242023
Operating activities
Net income$22,716,256 $26,359,872 
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense22,609,231 22,546,350 
Amortization of deferred financing costs739,522 701,275 
Amortization of prepaid rent91,399 91,048 
Unrealized loss (gain) on derivative instruments1,804,388 (2,760,059)
Income from equity method investee(1,445,750)(417,636)
Earnings attributable to non-controlling interest recorded as other long term liability420,826 1,027,798 
Provision for doubtful accounts1,671,197 933,449 
Loss on sale of vessel— 1,172,196 
Drydocking costs(2,999,998)(3,368,800)
Share-based compensation2,313,185 1,393,514 
Change in operating assets and liabilities:
Accounts receivable2,563,160 (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 liabilities11,297,723 3,324,586 
Deferred revenue450,565 (7,086,632)
Net cash provided by operating activities46,407,885 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 investments510,000 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 debt64,150,000 — 
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 leases8,000,000 — 
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 activities5,026,243 (45,891,904)
Net change in cash and cash equivalents(5,918,345)(41,026,386)
Cash and cash equivalents, beginning of year99,037,866 128,384,606 
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.
6


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.




7

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, 2024December 31, 2023
 (unaudited) 
Advance hire$3,947,918 $2,509,313 
Prepaid expenses6,987,445 7,072,634 
Accrued receivables10,607,731 5,777,596 
Cash margin on deposit4,226,396 3,751,257 
Derivative assets1,626,239 3,384,137 
Other current assets4,823,921 5,845,309 
 $32,219,650 $28,340,246 

8

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, 2024December 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 Management479,999 706,655 
Investment in Bay Stevedoring LLC2,856,271 1,667,093 
Investment in Narragansett Bulk Carriers (US) Corp519,975 519,975 
Other investments1,114,423 919,509 
 $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, 2024December 31, 2023
 (unaudited) 
Accounts payable$11,961,040 $6,277,693 
Accrued expenses13,991,724 14,038,418 
Bunkers suppliers7,672,260 4,393,533 
Charter hire payable10,838,685 8,112,701 
Other accrued liabilities3,314,298 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.

9

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
10

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.
 

11

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, 2024December 31, 2023
(unaudited)
Money market accounts – cash equivalents$32,166,579 $38,556,005 
Time deposit accounts - cash equivalents15,029,874 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 equivalentsSeptember 30, 2024December 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.


12

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,
20242023
(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 ENDURANCE20,923,447 21,859,034 
m/v BULK PRUDENCE25,751,987 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 FREEDOM7,554,843 8,150,075 
m/v BULK PRIDE10,813,297 11,194,335 
m/v BULK SPIRIT (4)
12,212,972 12,970,111 
m/v BULK SACHUEST15,880,154 16,487,253 
m/v BULK INDEPENDENCE12,904,828 13,752,517 
m/v BULK FRIENDSHIP (4)
12,167,309 12,810,712 
m/v BULK VALOR15,900,269 16,434,083 
m/v BULK PROMISE16,454,062 16,970,026 
m/v BULK BRENTON28,529,665 — 
m/v BULK PATIENCE28,509,394 — 
MISS NORA G PEARL (3)
1,597,201 1,821,235 
510,600,935 470,083,516 
Other fixed assets, net3,980,156 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 DESTINY17,986,271 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.
13

(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.

14

NOTE 5 - DEBT

Long-term debt consists of the following: 
September 30, 2024December 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 Prudence15,200,000 — 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%.
15


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 
202516,576,196 
202616,738,201 
202746,055,191 
202811,422,630 
Thereafter40,526,797 
$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.

16

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

September 30, 2024December 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.

17

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 
202525,819,766 
202624,349,214 
202725,225,485 
202829,867,261 
Thereafter118,335,906 
Total minimum lease payments$230,177,966 
Less imputed interest72,779,379 
Present value of minimum lease payments157,398,587 
Less current portion(14,238,935)
Less issuance costs(2,092,825)
Long-term portion$141,066,827 



18

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 DerivativeLiability Derivative
Derivative instrumentsBalance Sheet Location09/30/202412/31/2023Balance Sheet Location9/30/202412/31/2023
(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). 

19

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 instruments09/30/20249/30/202309/30/20249/30/2023
(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 





 








20

NOTE 8 - RELATED PARTY TRANSACTIONS

Amounts and notes payable or notes receivable to related parties consist of the following:
December 31, 2023ActivitySeptember 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.    

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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:

09/30/202412/31/2023
(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 liability420,826 462,150 
Ending balance$16,357,366 $17,936,540 
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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 EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
(unaudited)(unaudited)
Net income$5,111,040 $18,868,291 $20,467,991 $25,187,098 
Weighted Average Shares - Basic45,279,813 44,775,438 45,257,462 44,754,620 
Dilutive effect of restricted stock awards731,589 306,230 690,086 353,419 
Weighted Average Shares - Diluted46,011,402 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 equipment1,844,100 
Goodwill3,104,800 
Other intangible assets2,251,100 
Fair value of net assets acquired, excluding cash and cash equivalents8,972,889 
Cash and cash equivalents326,888 
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.


        
23



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.
24



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.
25


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,
 2024202320242023
Selected Financial Data(unaudited)(unaudited)
Voyage revenue$145,120 $127,885 $356,506 $346,300 
Charter revenue4,860 3,798 23,738 16,637 
Terminal & Stevedore Revenue3,135 3,934 9,117 4,454 
Total revenue153,115 135,616 389,361 367,391 
Voyage expense71,540 59,075 169,805 170,349 
Charter hire expense36,511 25,467 96,339 77,183 
Vessel operating expenses13,885 14,253 41,290 41,070 
Terminal Expenses2,417 3,518 7,325 3,892 
Total cost of transportation and service revenue124,353 102,312 314,759 292,495 
Vessel and Terminal Equipment depreciation and amortization7,678 8,063 22,527 22,462 
Gross Profit21,084 25,241 52,076 52,433 
Other operating expenses6,083 5,529 18,432 17,199 
Loss on impairment of vessels— — — — 
Loss on sale of vessel— — — 1,172 
Income from operations15,001 19,711 33,644 34,062 
Total other expense, net(8,944)479 (10,927)(7,702)
Net income6,057 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 - basic45,279,813 44,775,438 45,257,462 44,754,620 
Weighted-average common shares Outstanding - diluted46,011,402 45,081,668 45,947,548 45,108,039 
Adjusted EBITDA (1)
$23,917 $27,881 $59,795 $60,042 
Shipping Days (2)
  
Voyage days4,549 4,314 11,289 11,283 
Time charter days256 296 1,318 1,341 
Total shipping days4,805 4,610 12,607 12,624 
TCE Rates ($/day)$16,324 $15,748 $16,692 $15,256 
26


September 30, 2024December 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,
20242023
(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).

27


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,
2024202320242023
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 Amortization7,678 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, net3,808 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 amortization7,719 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 compensation646 270 2,313 1,394 
Unrealized loss (gain) on derivative instruments, net5,961 (4,532)1,804 (2,760)
Other non-recurring items— 19 — 445 
Adjusted EBITDA$23,917 $27,881 $59,795 $60,042 
 
(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. GAAP. 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 cost of transportation and service revenue less vessel and terminal equipment depreciation.

28


Business Overview

Pangaea Logistics Solutions Ltd. and its subsidiaries (collectively, “Pangaea” or the “Company”) provides seaborne drybulk logistics and transportation services as well as terminal and stevedoring services. 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 Handymax, Supramax, Ultramax and Panamax and Post-Panamax segments. At any time, this fleet may be comprised of a total of 45-60 vessels that are owned or chartered-in on a short-term basis. For the nine months ended September 30, 2024, the Company operated a total fleet of 52 vessels, of which 26 were wholly-owned or partially-owned through joint ventures.

Industry Overview

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 1,871 for the third quarter of 2024, up approximately 43%, compared to an average of 1,305 for the same quarter of 2023. The average published market rates for Supramax and Panamax vessels, reflecting the composition of the company's fleet, also increased approximately 30%, from an average of $10,548 in the third quarter of 2023 to $13,707 in the same period of 2024. 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.

Quarterly TCE Performance

For the three months ended September 30, 2024, the Company's TCE rates were up 4% to $16,324 from $15,748 for the three months ended September 30, 2023. The Company's achieved TCE rates improved from the previous quarter as the overall dry bulk market rates improved for the three months ended September 30, 2024. The Company's achieved TCE rate for the three months ended September 30, 2024 outperformed the average of the Baltic panamax and supramax market indexes and exceeded the average market rates by approximately 19% due to its long-term contracts of affreightment, ("COAs"), its specialized fleet and its cargo-focused strategy.

3rd Quarter Highlights

•Net income attributable to Pangaea Logistics Solutions Ltd. was approximately $5.1 million for three months ended September 30, 2024 as compared to approximately $18.9 million for the same period of 2023.
•Diluted net income per share was $0.11 for three months ended September 30, 2024, as compared to $0.42 for the same period in 2023.
•Pangaea's TCE rates were $16,324 for the three months ended September 30, 2024 and $15,748 for the three months ended September 30, 2023.
•Adjusted EBITDA was $23.9 million and $27.9 million for the three months ended September 30, 2024 and September 30, 2023.
•At the end of the quarter, Pangaea had $93.1 million in cash, and cash equivalents.

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Revenues

Pangaea’s revenues are derived predominately from voyage, time charters, and terminal and stevedore revenue. Total revenue for the three months ended September 30, 2024, was $153.1 million, compared to $135.6 million for the same period in 2023, a 13% increase. The increase in revenues was primarily driven by a 5% rise in total shipping days, reaching 4,805 days for the three months ended September 30, 2024, compared to 4,610 days for the same period in 2023. However, this was partially offset by a 20% decrease in terminal and stevedore revenue.

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The Components of our revenue are as follows:

Voyage Revenues: Voyage revenues increased by 13% for the three months ended September 30, 2024 to $145.1 million compared to $127.9 million for the same period in 2023. The increase in voyage revenues was primarily due to a 5% increase in voyage days from 4,314 in the three months ended September 30, 2023 to 4,549 for the three months ended September 30, 2024. The increase is also attributable to higher average TCE rates earned as discussed above.

Charter Revenues: Charter revenues increased to $4.9 million from $3.8 million, or 28%, for the three months ended September 30, 2024 compared to the same period in 2023. The increase in charter revenues was due to higher charter hire rates, with the panamax and supramax vessel index rising 30% from $10,548 per day for three months ended September 30, 2023 to $13,707 per day, over the same period of 2024. However, time charter days decreased by 13% year-over-year, from 296 days to 256 days. Our flexible chartering strategy enables the Company to selectively release excess ship days, if any, into the market under time charter arrangements rather than voyage days.

Terminal & Stevedore Revenues: Terminal & Stevedore revenues decreased by 20% for the three months ended September 30, 2024 to $3.1 million compared to $3.9 million for the same period in 2023. The decrease in revenues was primarily due to the timing of certain significant customer contracts, which did not contribute to revenues in the third quarter of 2024 but are expected to be fulfilled in the fourth quarter of 2024. This timing shift of contracts that contribute materially to port revenues resulted in a decrease for the current period.

Operating and Business Expenses

In recent years, global cost inflation has contributed to higher vessel operation costs, including crew travel, equipment transportation, and drydocking. While we expect crew payroll expenses to stabilize in the near and medium term, other inflated costs may increase our vessels' daily operating expenses. Typically, any fuel cost increases during voyages are managed through bunker hedging or through fuel cost pass-through arrangements in long-term contracts.

The Components of our expenses are as follows:

Voyage Expenses: Voyage expenses were $71.5 million for the three months ended September 30, 2024, compared to $59.1 million for the same period in 2023, an increase of approximately 21%. The increase was driven by a 5% increase in voyage days, leading to corresponding increases in bunkers consumed and port expenses incurred. The total average market price of bunkers consumed increased by 19.7% for the three months ended September 30, 2024, compared to the same period in 2023. Port expenses increased approximately 7% compared to the prior year as a result of the increase in voyage day activity.

Charter Hire Expenses: Charter hire expenses for the three months ended September 30, 2024 were $36.5 million, compared to $25.5 million for the same period in 2023, a 43% increase. The increase in charter hire expenses was predominantly driven by higher market rates for charter-in vessels, as well as an increase in chartered-in days. Specifically, the average published market rates for Supramax and Panamax vessels increased approximately 30% climbing from an average of $10,548 in the third quarter of 2023 to $13,707 in the same period of 2024. Chartered-in days increased 7% from 2,358 days in the three months ended September 30, 2023 to 2,519 days for the three months ended September 30, 2024. Charter hire expenses on a per day basis were $14,494 for the three months ended September 30, 2024 and $10,800 for the same period in 2023. The Company's flexible charter-in strategy allows it to supplement its owned fleet with short term chartered-in tonnage at prevailing market prices, when needed, to meet cargo demand.

Vessel Operating Expenses: Vessel operating expenses for the three months ended September 30, 2024 were $13.9 million, compared to $14.3 million for the same period in 2023, an decrease of approximately 3%. The ownership days remained stable, with 2,293 days for the three months ended September 30, 2024 compared to 2,300 days in 2023, reflecting a decrease of less than 1%. Excluding technical management fees, vessel operating expenses on a per day basis were $5,520 for the three months ended September 30, 2024, down from $5,706 for the three months ended September 30, 2023. Technical management fees amounted to approximately $1.2 million and $1.1 million for the three months ended September 30, 2024 and 2023, respectively.

Terminal & Stevedore Expenses: Terminal & Stevedore expenses decreased by 31% for the three months ended September 30, 2024 to $2.4 million compared to $3.5 million for the same period in 2023. The decrease was in line with decreased terminal revenue.

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General and Administrative Expenses: General and administrative expenses amounted to $6.0 million for the three-month period ended September 30, 2024, compared to $5.5 million for the corresponding period in 2023. The increase is primarily attributable to an increase in non-cash compensation associated with equity awards.

Unrealized gain (loss) on derivative instruments

The Company assesses risk associated with fluctuating future freight rates and bunker prices, and when appropriate, actively hedges identified economic risk that may impact the operating income of long-term cargo contracts and forward bookings with forward freight agreements and bunkers swaps. The utilization of such derivatives can lead to fluctuations in the Company's reported results from operations on a period-to-period basis as the Company marks these positions to market at the balance sheet date while settlement of the position and execution of the physical transaction may occur at a future date. The Company recognized a mark to market loss on bunker swaps of approximately $3.3 million and a mark to market loss on forward freight agreements (FFAs) of approximately $712.9 thousand in the three months ended September 30, 2024. The fair value loss on interest rate derivatives amounted to approximately $2.0 million for the three months ended September 30, 2024. The total loss resulted from changes in the fair value of the derivatives at the respective balance sheet dates.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Revenues

Pangaea’s revenues are derived predominately from voyage and time charters. Total revenue for the nine months ended September 30, 2024 was $389.4 million, compared to $367.4 million for the same period in 2023, a 6% increase. The increase in revenues was primarily due to higher average TCE rates earned. The total shipping days remained stable, totaling 12,607 days for the nine months ended September 30, 2024, compared to 12,624 days for the nine months ended September 30, 2023.
 
Components of revenue are as follows:

Voyage Revenues: Voyage revenues increased by 3% for the nine months ended September 30, 2024 to $356.5 million compared to $346.3 million for the same period in 2023. This increase was primarily due to higher average TCE rates from $15,256 per day to $16,692 per day. Voyage days remained nearly unchanged, totaling 11,289 days for the nine months ended September 30, 2024, compared to 11,283 days in 2023.

Charter Revenues: Charter revenues increased to $23.7 million from $16.6 million, or 43%, for the nine months ended September 30, 2024 compared to the same period in 2023. The increase in charter revenues was due to an increase in charter hire rates earned. The time charter revenue per day was $18,011 for the nine months ended September 30, 2024 compared to $12,406 for the same period of 2023. Time charter days decreased 2% to 1,318 in the nine months ended September 30, 2024 from 1,341 in the nine months ended September 30, 2023. The optionality of our chartering strategy allows the Company to selectively release excess ship days, if any, into the market under time charters arrangements.

Terminal & Stevedore Revenues: Terminal & Stevedore revenues increased by 105% for the nine months ended September 30, 2024 to $9.1 million compared to $4.5 million for the same period in 2023. The increase was primarily attributed to the acquisition of port operations on June 1, 2023, which resulted in a full nine months of revenue being recorded in 2024, compared to merely four months in 2023.


Operating and Business Expenses

The Components of our expenses are as follows:

Voyage Expenses: Voyage expenses were $169.8 million for the nine months ended September 30, 2024, compared to $170.3 million for the same period in 2023, reflecting a decrease of less than 1%.

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Charter Hire Expenses: Charter hire expenses for the nine months ended September 30, 2024 were $96.3 million, compared to $77.2 million for the same period in 2023, a 25% increase. The increase in charter hire expenses was primarily due to an increase in market rates to charter-in vessels. The average published market rates for Supramax and Panamax vessels increased approximately 38% from an average of $10,227 in the nine months ended September 30, 2023 to $14,161 in the same period of 2024. Meanwhile, chartered-in days remained about the same, with a slight decrease from 6,050 days in the nine months ended September 30, 2023 to 6,025 days for the nine months ended September 30, 2024. The Company's flexible charter-in strategy allowing it to supplement its owned fleet with short term chartered-in tonnage at prevailing market prices, when needed, to meet cargo demand.

Vessel Operating Expenses: Vessel operating expenses for the nine months ended September 30, 2024 were $41.3 million, compared to $41.1 million for the same period in 2023, a slight increase of approximately 1%. Excluding technical management fees, vessel operating expenses on a per day basis were $5,686 for the nine months ended September 30, 2024 and $5,620 for the same period in 2023. Technical management fees were approximately $3.4 million and $3.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Terminal & Stevedore Expenses: Terminal & Stevedore expenses increased by 88% to $7.3 million for the nine months ended September 30, 2024, compared to $3.9 million for the same period in 2023. This increase is attributable to the acquisition of port operations in June 2023, resulting in a full three quarters of expenses from these operations in 2024, compared to four months in the prior year.

General and Administrative Expenses: For the nine months ended September 30, 2024, general and administrative expenses were $18.3 million, compared to $17.1 million for the same period in 2023, reflecting a marginal increase year-over-year. The increase is primarily attributable to non-cash compensation associated with equity awards.

Unrealized (loss) gain on derivative instruments

The Company assesses risk associated with fluctuating future freight rates and bunker prices, and when appropriate, actively hedges identified economic risk that may impact the operating income of long-term cargo contracts and forward bookings with forward freight agreements and bunkers swaps. The utilization of such derivatives can lead to fluctuations in the Company's reported results from operations on a period-to-period basis as the Company marks these positions to market at the balance sheet date while settlement of the position and execution of the physical transaction may occur at a future date. The Company recognized mark to market losses on bunker swaps of approximately $1.1 million and gains on forward freight agreements (FFAs) of approximately $1.1 million in the nine months ended September 30, 2024. The fair value loss on interest rate derivatives was approximately $1.8 million for the nine months ended September 30, 2024. These losses resulted from changes in the fair value of the derivatives at the respective balance sheet dates.

Significant accounting estimates

The discussion and analysis of the Company’s financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP. 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. Actual results could differ from those estimates. The significant estimates and assumptions of the Company are the estimated future cash flows used in its impairment analysis, the estimated salvage value used in determining depreciation expense, the estimated on the percentage completion of spot voyages and the allowances for doubtful accounts.

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.

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The Company concluded that no triggering event had occurred for the nine months ended September 30, 2024, which would require impairment testing.

During the first quarter of 2023, the Company determined that a triggering event occurred related to the sale of a vessel, as the 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.
    
Liquidity and Capital Resources

The Company has historically financed its capital needs through cash flow from operations, common stock issuance, non-controlling interest contributions, and long-term debt and finance leases. Capital has primarily been allocated to operations, vessel acquisitions, and debt servicing. While the Company may pursue additional debt or equity financing as needed, adverse market conditions could limit access to favorable terms, potentially restricting business expansion opportunities.

Since a significant portion of our Company's long-term debt and finance leases have fixed or capped interest rates, the impact of rising interest rates on our earnings is limited.

As of September 30, 2024, and December 31, 2023, the Company’s working capital was $100.3 million and $86.5 million, respectively. This increase mainly reflects strategic refinancing of secured debt and finance leases, which extended maturity dates and improved liquidity over the nine months ending September 30, 2024.

Cash Flows:

The table below summarizes our primary sources and uses of cash for the three months ended September 30, 2024 and 2023. We have derived these summarized statements of cash flows from the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. 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.

For the nine months ended
(In millions)September 30, 2024September 30, 2023
Net cash provided by/(used in):
Operating activities:
Net income adjusted for non-cash items$47.9 $47.7 
Changes in operating assets and liabilities, net(1.5)(17.8)
Operating activities46.429.9
Investing activities(57.4)(25.0)
Financing activities5.0(45.9)
Net change$(5.9)$(41.0)
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Operating Activities

Net cash provided by operating activities during the nine months ended September 30, 2024 was $46.4 million compared to net cash provided by operating activities of $29.9 million for the nine months ended September 30, 2023. The increase in cash flows from operating activities compared to the previous year was primarily due to better management of working capital, including improved collections of accounts receivable and efficient timing of accounts payable.

Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2024, was $57.4 million compared to $25.0 million for the same period in 2023. The Company purchased two vessels for $57.5 million in the nine months ended September 30, 2024. In comparison, during the nine months ended September 30, 2023, the Company (i) paid $27.0 million for the purchase of one vessel and other vessel improvements and (ii) paid $7.2 million for the net cash acquisition of a port and terminal operation. These uses of cash were partially offset by $8.0 million in net proceeds from the sale of one vessel and cash dividends of $1.6 million from equity method investments.

Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2024 was $5.0 million and net cash used in financing activities was $45.9 million during the nine months ended September 30, 2023, respectively. During the nine months ended September 30, 2024, the Company (i) received net proceeds of $35.2 million from long-term debt (comprised of $64.2 million in proceeds offset by $29.0 million in repayments) (ii) made a net repayment of $10.7 million in finance leases (comprised of $18.7 million in payments offset by $8.0 million in finance lease proceeds from finance leases), (iii) paid $13.9 million in cash dividends to its shareholders and $2.3 million in cash dividends to non-controlling interest holders and (iv) paid $2.0 million as payment to non-controlling interest recorded as long-term liability. During the nine months ended September 30, 2023, the Company (i) repaid $12.4 million of long term debt and $12.2 million of finance leases, (ii) paid $13.6 million in cash dividends to its shareholders and $5.0 million in cash dividends to non-controlling interest holders and (iii) paid $2.5 million as payment to non-controlling interest recorded as long-term liability.

The Company has demonstrated its unique ability to adapt to changing market conditions by maintaining a nimble chartered-in profile to meet its cargo commitments. We believe, given our current cash holdings, if drybulk shipping rates do not decline significantly from current levels, our capital resources, including cash anticipated to be generated within the year, are sufficient to fund our operations for at least the next twelve months.

Capital Expenditures
 
The Company’s capital expenditures relate to the purchase of vessels and interests in vessels, capital improvements to its vessels which are expected to enhance the revenue earning capabilities and safety of these vessels, as well as port & terminal operations. The Company’s owned or partially owned and controlled fleet at September 30, 2024 includes: nine Panamax drybulk carriers (six of which are Ice-Class 1A); nine Supramax drybulk carriers, two Ultramax Ice Class 1C, two Ultramax drybulk carriers, and four Post Panamax Ice Class 1A drybulk vessels.
 
In addition to vessel acquisitions that the Company may undertake in future periods, its other major capital expenditures include funding its program of regularly scheduled drydockings necessary to make improvements to its vessels, as well as to comply with international shipping standards and environmental laws and regulations. Funding expenses associated with these requirements will 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. The Company capitalized drydocking costs totaling approximately $3.0 million in the nine months ended September 30, 2024 and 2023. The Company expensed drydocking costs of approximately $233,000 and $356,000, respectively, in the nine months ended September 30, 2024 and 2023.

Off-Balance Sheet Arrangements
 
The Company does not have off-balance sheet arrangements at September 30, 2024 or December 31, 2023. 

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risks
 
No significant changes to our market risk have occurred since December 31, 2023. For a discussion of market risks affecting us, refer to Part II, Item 7A—"Quantitative and Qualitative Disclosures About Market Risk" included in the Company Annual Report on Form 10-K for the year ended December 31, 2023.

ITEM 4. Controls and Procedures
 
Management’s Evaluation of Disclosure Controls and Procedures.
 
As of the end of the period covered by this report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as such term is defined in Rule 13a-15(e). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective for the nine months ended September 30, 2024.
 
Changes in Internal Control over Financial Reporting
 
There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
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PART II: OTHER INFORMATION
 
Item 1 - Legal Proceedings
 
From time to time, we are involved in various other disputes and litigation matters that arise in the ordinary course of our business, principally cargo claims. Those claims, even if lacking merit, could result in the expenditure by us of significant financial and managerial resources.
 
Item 1A – Risk Factors
 
In addition to the other information set forth in this report, the reader should carefully consider the factors discussed in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Risk Factor described below, which could materially affect the Company’s business, financial condition or future results.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
 
    None.
Item 3 - Defaults Upon Senior Securities
 
None.
 
Item 4 – Mine Safety Disclosures
 
None.
 
Item 5 - Other Information  
 
None.
 
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Item 6 – Exhibits 
Exhibit No.Description
10.1
10.2
10.3
10.4
10.5
31.1
31.2
32.1
32.2
EX-101.INSXBRL Instance Document
  
EX-101.SCHXBRL Taxonomy Extension Schema
  
EX-101.CALXBRL Taxonomy Extension Calculation Linkbase
  
EX-101.DEFXBRL Taxonomy Extension Definition Linkbase
  
EX-101.LABXBRL Taxonomy Extension Label Linkbase
  
EX-101.PREXBRL Taxonomy Extension Presentation Linkbase
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
______________
*    Filed herewith

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SIGNATURES
 
Pursuant to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 12, 2024.
 
 PANGAEA LOGISTICS SOLUTIONS LTD.
  
 By:/s/ Mark L. Filanowski
 Mark L. Filanowski
 Chief Executive Officer
 (Principal Executive Officer)
  
 By:/s/ Gianni Del Signore
 Gianni Del Signore
 Chief Financial Officer
 (Principal Financial and Accounting Officer)

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