QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated Filer | ☐ | Accelerated Filer | ☐ | |||||||||||
☒ | Smaller reporting company | |||||||||||||
Emerging growth company |
Page | ||||||||
PART I | FINANCIAL 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 |
September 30, 2020 | December 31, 2019 | ||||||||||
(unaudited) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable (net of allowance of $ | |||||||||||
Bunker inventory | |||||||||||
Advance hire, prepaid expenses and other current assets | |||||||||||
Vessel held for sale | |||||||||||
Total current assets | |||||||||||
Restricted cash | |||||||||||
Fixed assets, net | |||||||||||
Investment in newbuildings in-process | |||||||||||
Finance lease right of use assets, net | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and stockholders' equity | |||||||||||
Current liabilities | |||||||||||
Accounts payable, accrued expenses and other current liabilities | $ | $ | |||||||||
Related party debt | |||||||||||
Deferred revenue | |||||||||||
Current portion of secured long-term debt | |||||||||||
Current portion of finance lease liabilities | |||||||||||
Dividend payable | |||||||||||
Total current liabilities | |||||||||||
Secured long-term debt, net | |||||||||||
Finance lease liabilities, net | |||||||||||
Long-term liabilities - other - Note 8 | |||||||||||
Commitments and contingencies - Note 7 | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Total Pangaea Logistics Solutions Ltd. equity | |||||||||||
Non-controlling interests | |||||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Voyage revenue | $ | $ | $ | $ | |||||||||||||||||||
Charter revenue | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Voyage expense | |||||||||||||||||||||||
Charter hire expense | |||||||||||||||||||||||
Vessel operating expense | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Loss on impairment of vessels | |||||||||||||||||||||||
Loss on sale of vessels | |||||||||||||||||||||||
Total expenses | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other (expense) income: | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Interest expense on related party debt | ( | ( | |||||||||||||||||||||
Unrealized gain (loss) on derivative instruments, net | ( | ( | ( | ||||||||||||||||||||
Other income | |||||||||||||||||||||||
Total other (expense), net | ( | ( | ( | ( | |||||||||||||||||||
Net income | |||||||||||||||||||||||
Income attributable to non-controlling interests | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to Pangaea Logistics Solutions Ltd. | $ | $ | $ | $ | |||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares used to compute earnings per common share: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted |
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Pangaea Logistics Solutions Ltd. Equity | Non-Controlling Interest | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Acquisition of Non-Controlling Interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Acquisition of Non-Controlling Interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net of forfeitures | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
Net Income | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Pangaea Logistics Solutions Ltd. Equity | Non-Controlling Interest | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Common Stock Dividend | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of restricted shares, net of forfeitures | ( | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
Distribution to Non-Controlling Interests | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Common Stock Dividend | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||
Net Income | — | — | — | ||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
Depreciation and amortization expense | |||||||||||
Amortization of deferred financing costs | |||||||||||
Amortization of prepaid rent | |||||||||||
Unrealized loss (gain) on derivative instruments | ( | ||||||||||
Income from equity method investee | ( | ( | |||||||||
Earnings attributable to non-controlling interest recorded as interest expense | |||||||||||
Recovery for doubtful accounts | ( | ( | |||||||||
Loss on impairment of vessels | |||||||||||
Loss on sale of vessel | |||||||||||
Drydocking costs | ( | ( | |||||||||
Share-based compensation | |||||||||||
Change in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Bunker inventory | |||||||||||
Advance hire, prepaid expenses and other current assets | ( | ( | |||||||||
Accounts payable, accrued expenses and other current liabilities | ( | ||||||||||
Deferred revenue | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Investing activities | |||||||||||
Purchase of vessels and vessel improvements | ( | ( | |||||||||
Investment in newbuildings in-process | ( | ( | |||||||||
Purchase of fixed assets and equipment | ( | ||||||||||
Acquisition of non-controlling interest | ( | ||||||||||
Proceeds from sale of vessels | |||||||||||
Purchase of derivative instrument | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Proceeds from long-term debt | |||||||||||
Payments of related party debt | ( | ||||||||||
Payments of financing fees and debt issuance costs | ( | ( | |||||||||
Payments of long-term debt | ( | ( | |||||||||
Proceeds from finance leases | |||||||||||
Dividends paid to non-controlling interests | ( | ||||||||||
Payments of finance lease obligations | ( | ( | |||||||||
Accrued common stock dividends paid | ( | ( | |||||||||
Cash paid for incentive compensation shares relinquished | ( | ||||||||||
Contributions from non-controlling interest recorded as long-term liability | |||||||||||
Payments to non-controlling interest recorded as long-term liability | ( | ||||||||||
Net cash (used in) provided by financing activities | ( | ||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
Supplemental cash flow information | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
$ | $ | ||||||||||
Supplemental non-cash investing and financing Information: | |||||||||||
Deferred consideration related to acquisition of non-controlling interest | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(unaudited) | |||||||||||
Money market accounts – cash equivalents | $ | $ | |||||||||
Cash (1) | |||||||||||
Total cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
September 30, 2020 | December 31, 2019 | |||||||||||||
(unaudited) | ||||||||||||||
Advance hire | $ | $ | ||||||||||||
Prepaid expenses | ||||||||||||||
Accrued receivables | ||||||||||||||
Margin deposit | ||||||||||||||
Other current assets | ||||||||||||||
$ | $ |
September 30, 2020 | December 31, 2019 | |||||||||||||
(unaudited) | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Derivative liabilities | ||||||||||||||
Deferred consideration - Note 8 | ||||||||||||||
Other accrued liabilities | ||||||||||||||
$ | $ |
September 30, | December 31, | ||||||||||
2020 | 2019 | ||||||||||
Owned vessels | (unaudited) | ||||||||||
m/v BULK PANGAEA | $ | $ | |||||||||
m/v BULK NEWPORT | |||||||||||
m/v NORDIC ODYSSEY (1) | |||||||||||
m/v NORDIC ORION (1) | |||||||||||
m/v NORDIC OSHIMA (1) | |||||||||||
m/v NORDIC ODIN (1) | |||||||||||
m/v NORDIC OLYMPIC (1) | |||||||||||
m/v NORDIC OASIS (1) | |||||||||||
m/v BULK ENDURANCE | |||||||||||
m/v BULK FREEDOM | |||||||||||
m/v BULK PRIDE | |||||||||||
m/v BULK SPIRIT | |||||||||||
m/v BULK INDEPENDENCE | |||||||||||
m/v BULK FRIENDSHIP | |||||||||||
MISS NORA G PEARL (2) | |||||||||||
Other fixed assets, net | |||||||||||
Total fixed assets, net | $ | $ | |||||||||
Right of Use Assets | |||||||||||
m/v BULK DESTINY | $ | $ | |||||||||
m/v BULK BEOTHUK (3) | |||||||||||
m/v BULK TRIDENT | |||||||||||
m/v BULK PODS | $ | ||||||||||
$ | $ |
September 30, 2020 | December 31, 2019 | Interest Rate (%) (1) | Maturity Date | |||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||
Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd. Loan Agreement (2) | % | January 2022 | ||||||||||||||||||||||||
Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd. Loan Agreement (2) (3) | % | December 2020 | ||||||||||||||||||||||||
Bulk Nordic Oshima Ltd. Amended and Restated Loan Agreement (2) (4) | % | September 2021 | ||||||||||||||||||||||||
Bulk Nordic Oasis Ltd. Loan Agreement | % | December 2021 | ||||||||||||||||||||||||
The Amended Senior Facility - Dated May 13, 2019 (formerly The Amended Senior Facility - Dated December 21, 2017) (5) | ||||||||||||||||||||||||||
Bulk Nordic Six Ltd. - Tranche A | % | May 2024 | ||||||||||||||||||||||||
Bulk Nordic Six Ltd. - Tranche B | % | May 2024 | ||||||||||||||||||||||||
Bulk Pride - Tranche C | % | May 2024 | ||||||||||||||||||||||||
Bulk Independence - Tranche E | % | May 2024 | ||||||||||||||||||||||||
Bulk Freedom Loan Agreement | % | June 2022 | ||||||||||||||||||||||||
109 Long Wharf Commercial Term Loan | % | April 2026 | ||||||||||||||||||||||||
Total | $ | $ | ||||||||||||||||||||||||
Less: unamortized bank fees | ( | ( | ||||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||
Less: current portion | ( | ( | ||||||||||||||||||||||||
Secured long-term debt, net | $ | $ |
Years ending December 31, | ||||||||
(unaudited) | ||||||||
2020 (remainder of the year) | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
$ |
Asset Derivative | Liability Derivative | |||||||||||||||||||||||||||||||||||||
Derivative instruments | Balance Sheet Location | 09/30/2020 | 12/31/2019 | Balance Sheet Location | 9/30/2020 | 12/31/2019 | ||||||||||||||||||||||||||||||||
Margin accounts (1) | Other current assets | $ | $ | Other current liabilities | $ | $ | ||||||||||||||||||||||||||||||||
Forward freight agreements (2) | Other current assets | $ | $ | Other current liabilities | $ | $ | ||||||||||||||||||||||||||||||||
Fuel swap contracts (2) | Other current assets | $ | $ | Other current liabilities | $ | $ | ||||||||||||||||||||||||||||||||
Interest rate cap (2) | Other current assets | $ | $ | Other current liabilities | $ | $ |
Unrealized gain (loss) on derivative instruments | ||||||||||||||||||||||||||
For the three months ended | For the nine months ended | |||||||||||||||||||||||||
Derivative instruments | 9/30/2020 | 9/30/2019 | 9/30/2020 | 9/30/2019 | ||||||||||||||||||||||
Forward freight agreements | $ | ( | $ | $ | $ | |||||||||||||||||||||
Fuel Swap Contracts | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
Interest rate cap | $ | $ | $ | ( | $ |
December 31, 2019 | Activity | September 30, 2020 | |||||||||||||||
(unaudited) | |||||||||||||||||
Included in trade accounts receivable and voyage revenue on the consolidated balance sheets and statements of income, respectively: | |||||||||||||||||
Trade receivables due from King George Slag (i) | $ | $ | ( | $ | |||||||||||||
Included in accounts payable, accrued expenses and other current liabilities on the consolidated balance sheets: | |||||||||||||||||
Affiliated companies (trade payables) (ii) | ( | ||||||||||||||||
Included in current related party debt on the consolidated balance sheets: | |||||||||||||||||
Interest payable - 2011 Founders Note | ( | ||||||||||||||||
Total current related party debt | $ | $ | ( | $ |
Year ending December 31, | |||||
2020 (remainder of the year) | $ | ||||
2021 | |||||
2022 | |||||
2023 | |||||
2024 | |||||
Thereafter | |||||
Total minimum lease payments | $ | ||||
Less imputed interest | |||||
Present value of minimum lease payments | |||||
Less current portion | |||||
Long-term portion | $ |
(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, | ||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Selected Financial Data | ||||||||||||||||||||||||||
Voyage revenue | $ | 98,120 | $ | 103,806 | $ | 251,501 | $ | 247,088 | ||||||||||||||||||
Charter revenue | 5,646 | 15,079 | 18,541 | 34,632 | ||||||||||||||||||||||
Total revenue | 103,767 | 118,885 | 270,042 | 281,720 | ||||||||||||||||||||||
Voyage expense | 40,729 | 45,103 | 120,283 | 114,501 | ||||||||||||||||||||||
Charter hire expense | 34,970 | 41,980 | 82,499 | 85,245 | ||||||||||||||||||||||
Vessel operating expenses | 9,700 | 11,332 | 28,959 | 32,161 | ||||||||||||||||||||||
Total cost of transportation and service revenue | 85,399 | 98,414 | 231,741 | 231,907 | ||||||||||||||||||||||
Vessel depreciation and amortization | 4,185 | 4,621 | 12,681 | 13,418 | ||||||||||||||||||||||
Gross Profit | 14,183 | 15,850 | 25,621 | 36,396 | ||||||||||||||||||||||
Other operating expenses | 3,738 | 2,800 | 11,695 | 12,264 | ||||||||||||||||||||||
Loss on impairment of vessels | — | — | 1,801 | — | ||||||||||||||||||||||
Loss on sale of vessels | 486 | — | 705 | — | ||||||||||||||||||||||
Income from operations | 9,960 | 13,050 | 11,420 | 24,132 | ||||||||||||||||||||||
Total other expense, net | (1,673) | (2,631) | (6,608) | (4,073) | ||||||||||||||||||||||
Net income | 8,287 | 10,419 | 4,812 | 20,059 | ||||||||||||||||||||||
Income attributable to non-controlling interests | (734) | (2,097) | (1,050) | (4,002) | ||||||||||||||||||||||
Net income attributable to Pangaea Logistics Solutions Ltd. | $ | 7,552 | $ | 8,322 | $ | 3,762 | $ | 16,057 | ||||||||||||||||||
Net income from continuing operations per common share information | ||||||||||||||||||||||||||
Basic net income per share | $ | 0.17 | $ | 0.19 | $ | 0.09 | $ | 0.38 | ||||||||||||||||||
Diluted net income per share | $ | 0.17 | $ | 0.19 | $ | 0.09 | $ | 0.37 | ||||||||||||||||||
Weighted-average common shares Outstanding - basic | 43,488 | 42,818 | 43,394 | 42,730 | ||||||||||||||||||||||
Weighted-average common shares Outstanding - diluted | 43,511 | 43,355 | 43,398 | 43,247 | ||||||||||||||||||||||
Adjusted EBITDA (1) | $ | 15,068 | $ | 18,023 | $ | 28,659 | $ | 39,019 | ||||||||||||||||||
Shipping Days (2) | ||||||||||||||||||||||||||
Voyage days | 4,133 | 3,712 | 10,933 | 9,670 | ||||||||||||||||||||||
Time charter days | 601 | 924 | 1,977 | 2,466 | ||||||||||||||||||||||
Total shipping days | 4,734 | 4,636 | 12,910 | 12,136 | ||||||||||||||||||||||
TCE Rates ($/day) | 13,316 | 15,915 | 11,600 | 13,779 |
September 30, 2020 | December 31, 2019 | |||||||||||||
Selected Data from the Consolidated Balance Sheets | ||||||||||||||
Cash, restricted cash and cash equivalents | $ | 48,059 | $ | 53,055 | ||||||||||
Total assets | $ | 443,393 | $ | 479,903 | ||||||||||
Total secured debt, including finance leases liabilities | $ | 156,364 | $ | 176,688 | ||||||||||
Total shareholders' equity | $ | 227,145 | $ | 243,072 | ||||||||||
For the nine months ended September 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
Selected Data from the Consolidated Statements of Cash Flows | ||||||||||||||
Net cash provided by operating activities | $ | 22,441 | $ | 23,402 | ||||||||||
Net cash used in investing activities | $ | (6,042) | $ | (48,186) | ||||||||||
Net cash (used in) provided by financing activities | $ | (21,395) | $ | 5,341 |
(in thousands, figures may not foot due to rounding) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net Transportation and Service Revenue (3) | |||||||||||||||||||||||
Gross Profit (4) | $ | 14,183 | $ | 15,850 | $ | 25,621 | $ | 36,396 | |||||||||||||||
Add: | |||||||||||||||||||||||
Vessel Depreciation and Amortization | 4,185 | 4,621 | 12,681 | 13,418 | |||||||||||||||||||
Net transportation and service revenue | $ | 18,368 | $ | 20,471 | $ | 38,302 | $ | 49,814 | |||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||
Income from operations | $ | 9,960 | $ | 13,050 | $ | 11,420 | $ | 24,132 | |||||||||||||||
Depreciation and amortization | 4,230 | 4,653 | 12,818 | 13,521 | |||||||||||||||||||
Loss on impairment of vessels | — | — | 1,801 | — | |||||||||||||||||||
Loss on sale of vessels | 486 | — | 705 | — | |||||||||||||||||||
Share-based compensation | 392 | 320 | 1,915 | 1,366 | |||||||||||||||||||
Adjusted EBITDA | $ | 15,068 | $ | 18,023 | $ | 28,659 | $ | 39,019 | |||||||||||||||
Exhibit No. | Description | ||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
EX-101.INS | XBRL Instance Document | ||||
EX-101.SCH | XBRL Taxonomy Extension Schema | ||||
EX-101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ||||
EX-101.DEF | XBRL Taxonomy Extension Definition Linkbase | ||||
EX-101.LAB | XBRL Taxonomy Extension Label Linkbase | ||||
EX-101.PRE | XBRL Taxonomy Extension Presentation Linkbase | ||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
PANGAEA LOGISTICS SOLUTIONS LTD. | ||||||||
By: | /s/ Edward Coll | |||||||
Edward Coll | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
By: | /s/ Gianni Del Signore | |||||||
Gianni Del Signore | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
1 | I have reviewed this quarterly report on Form 10-Q of Pangaea Logistics Solutions Ltd.; |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 12, 2020 | /s/ Edward Coll | ||||||
Edward Coll | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
1 | I have reviewed this quarterly report on Form 10-Q of Pangaea Logistics Solutions Ltd.; |
2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | 11/12/2020 | /s/ Gianni Del Signore | ||||||
Gianni Del Signore | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
1 | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2 | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | 11/12/2020 | /s/ Edward Coll | ||||||
Edward Coll | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
1 | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2 | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 12, 2020 | /s/ Gianni Del Signore | ||||||
Gianni Del Signore | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Consolidated Balance Sheets (Parenthetical) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 1,697,961 | $ 1,908,841 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares Issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 45,065,662 | 44,886,122 |
Common stock, shares outstanding (in shares) | 45,065,662 | 44,886,122 |
Consolidated Statements of Income - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Revenues: | ||||
Revenue | $ 103,766,558 | $ 118,885,396 | $ 270,042,665 | $ 281,720,196 |
Expenses: | ||||
Voyage expense | 40,729,271 | 45,102,602 | 120,283,093 | 114,501,121 |
Charter hire expense | 34,969,551 | 41,980,065 | 82,498,729 | 85,244,779 |
Vessel operating expense | 9,699,890 | 11,331,770 | 28,958,812 | 32,160,692 |
General and administrative | 3,691,963 | 2,768,253 | 11,557,594 | 12,160,924 |
Depreciation and amortization | 4,230,302 | 4,652,563 | 12,818,260 | 13,521,078 |
Loss on impairment of vessels | 0 | 0 | 1,801,039 | 0 |
Loss on sale of vessels | 485,580 | 0 | 705,065 | 0 |
Total expenses | 93,806,557 | 105,835,253 | 258,622,592 | 257,588,594 |
Income from operations | 9,960,001 | 13,050,143 | 11,420,073 | 24,131,602 |
Other (expense) income: | ||||
Interest expense, net | (1,956,729) | (2,499,617) | (6,073,599) | (6,807,837) |
Interest expense on related party debt | 0 | (10,902) | 0 | (48,938) |
Unrealized gain (loss) on derivative instruments, net | (18,098) | (301,058) | (1,530,875) | 2,203,899 |
Other income | 301,543 | 180,194 | 996,734 | 580,106 |
Total other (expense), net | (1,673,284) | (2,631,383) | (6,607,740) | (4,072,770) |
Net income | 8,286,717 | 10,418,760 | 4,812,333 | 20,058,832 |
Income attributable to non-controlling interests | (734,472) | (2,097,200) | (1,050,287) | (4,002,217) |
Net income attributable to Pangaea Logistics Solutions Ltd. | $ 7,552,245 | $ 8,321,560 | $ 3,762,046 | $ 16,056,615 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.17 | $ 0.19 | $ 0.09 | $ 0.38 |
Diluted (in dollars per share) | $ 0.17 | $ 0.19 | $ 0.09 | $ 0.37 |
Weighted average shares used to compute earnings per common share: | ||||
Basic (in shares) | 43,488,241 | 42,817,933 | 43,393,764 | 42,729,775 |
Diluted (in shares) | 43,510,961 | 43,354,742 | 43,398,472 | 43,247,417 |
Voyage revenue | ||||
Revenues: | ||||
Revenue | $ 98,120,344 | $ 103,806,391 | $ 251,501,401 | $ 247,087,805 |
Charter revenue | ||||
Revenues: | ||||
Revenue | $ 5,646,214 | $ 15,079,005 | $ 18,541,264 | $ 34,632,391 |
Consolidated Statements of Stockholders' Equity - USD ($) |
Total |
Total Pangaea Logistics Solutions Ltd. Equity |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Non-Controlling Interest |
---|---|---|---|---|---|---|
Beginning Balance (in shares) at Dec. 31, 2018 | 43,998,560 | |||||
Beginning Balance at Dec. 31, 2018 | $ 233,366,997 | $ 161,688,051 | $ 4,400 | $ 155,946,452 | $ 5,737,199 | $ 71,678,946 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 1,365,969 | 1,365,969 | 1,365,969 | |||
Issuance of restricted shares, net of forfeitures (in shares) | 453,380 | |||||
Acquisition of Non-Controlling Interest | (136,153) | (136,153) | $ 45 | (136,198) | ||
Distribution to Non-Controlling Interests | (4,666,665) | (4,666,665) | ||||
Common Stock Dividend | (3,100,637) | (3,100,637) | (3,100,637) | |||
Net Income | 20,058,832 | 16,056,615 | 16,056,615 | 4,002,217 | ||
Ending Balance (in shares) at Sep. 30, 2019 | 44,451,940 | |||||
Ending Balance at Sep. 30, 2019 | 246,888,343 | 175,873,845 | $ 4,445 | 157,176,223 | 18,693,177 | 71,014,498 |
Beginning Balance (in shares) at Jun. 30, 2019 | 44,451,940 | |||||
Beginning Balance at Jun. 30, 2019 | 237,693,940 | 168,776,642 | $ 4,445 | 156,855,761 | 11,916,436 | 68,917,298 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 320,462 | 320,462 | 320,462 | |||
Common Stock Dividend | (1,544,819) | (1,544,819) | (1,544,819) | |||
Net Income | 10,418,760 | 8,321,560 | 8,321,560 | 2,097,200 | ||
Ending Balance (in shares) at Sep. 30, 2019 | 44,451,940 | |||||
Ending Balance at Sep. 30, 2019 | 246,888,343 | 175,873,845 | $ 4,445 | 157,176,223 | 18,693,177 | 71,014,498 |
Beginning Balance (in shares) at Dec. 31, 2019 | 44,886,122 | |||||
Beginning Balance at Dec. 31, 2019 | 243,071,674 | 170,245,964 | $ 4,489 | 157,504,895 | 12,736,580 | 72,825,710 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 1,915,188 | 1,915,188 | 1,915,188 | |||
Acquisition of Non-Controlling Interest | (22,500,000) | (22,500,000) | ||||
Issuance of restricted shares, net of forfeitures (in shares) | 179,540 | |||||
Acquisition of Non-Controlling Interest | (154,126) | (154,126) | $ 18 | (154,144) | ||
Net Income | 4,812,333 | 3,762,046 | 3,762,046 | 1,050,287 | ||
Ending Balance (in shares) at Sep. 30, 2020 | 45,065,662 | |||||
Ending Balance at Sep. 30, 2020 | 227,145,069 | 175,769,072 | $ 4,507 | 159,265,939 | 16,498,626 | 51,375,997 |
Beginning Balance (in shares) at Jun. 30, 2020 | 45,065,662 | |||||
Beginning Balance at Jun. 30, 2020 | 240,966,650 | 167,825,125 | $ 4,507 | 158,874,237 | 8,946,381 | 73,141,525 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 391,702 | 391,702 | 391,702 | |||
Acquisition of Non-Controlling Interest | (22,500,000) | (22,500,000) | ||||
Net Income | 8,286,717 | 7,552,245 | 7,552,245 | 734,472 | ||
Ending Balance (in shares) at Sep. 30, 2020 | 45,065,662 | |||||
Ending Balance at Sep. 30, 2020 | $ 227,145,069 | $ 175,769,072 | $ 4,507 | $ 159,265,939 | $ 16,498,626 | $ 51,375,997 |
General Information and Recent Events |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General Information and Recent Events | 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. On September 28, 2020, the Company acquired an additional one-third equity interest in its partially-owned consolidated subsidiary Nordic Bulk Holding Company Ltd. (“NBHC”) from one of NBHC’s shareholders. At September 30, 2020, the Company owns two Panamax, two Ultramax Ice Class 1C, and seven Supramax drybulk vessels. The Company owns two-thirds of NBHC after the acquisition. NBHC owns a fleet of six Panamax Ice Class 1A drybulk vessels. The Company also has a 50% interest in the owner of a deck barge. Recent Events In March 2020, the World Health Organization declared the outbreak of a novel coronavirus strain, or COVID-19, to be a pandemic. The COVID-19 pandemic (“COVID-19”) is having widespread, rapidly evolving, and unpredictable impacts on global society, economies, financial markets, and business practices. Management continues to evaluate the impact of COVID-19 on the industry and its business. At present, the surge in cases has slowed, or is under control, in many countries around the world, especially those that are core to the dry bulk industry. However it is not possible to forecast the virus spread in the future or ascertain the overall impact of COVID-19 on the Company’s financial position and results of its operations. An increase in the severity or duration or a resurgence of COVID-19 could have a material adverse effect on the Company’s business, results of operations, cash flows and financial condition. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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Basis of Presentation and Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | 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, 2019. Certain reclassifications have been made to prior periods to conform to current period presentation. There was no impact on total operating expenses or net income (loss) resulting from these reclassifications. 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 and the allowances for doubtful accounts. Voyage revenues represent revenues earned by the Company, principally from providing transportation services under voyage charters. A voyage charter involves the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to various cargo handling terms. Under a voyage charter, the service revenues are earned and recognized ratably over the duration of the voyage. A contract is accounted for when it has approval and commitment from both parties, the rights and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Estimated losses under a voyage charter are provided for in full at the time such losses become probable. Demurrage, which is included in voyage revenues, represents payments by the charterer to the vessel owner when loading and discharging time exceed the stipulated time in the voyage charter. Demurrage is measured in accordance with the provisions of the respective charter agreements and the circumstances under which demurrage revenues arise. At the time demurrage revenue can be estimated, it is included in the calculation of voyage revenue and recognized ratably over the duration of the voyage to which it pertains. Voyage revenue recognized is presented net of address commissions. Charter revenues relate to a time charter arrangement under which the Company is paid to provide transportation services on a per day basis for a specified period of time. Revenues from time charters are earned and recognized on a straight-line basis over the term of the charter, as the vessel operates under the charter. Revenue is not earned when vessels are offhire. 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, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows:
(1) Consists of cash deposits at various major banks. Restricted cash at September 30, 2020 and December 31, 2019 consists of $2.5 million held by the facility agent as required by the Bulk Nordic Odin Ltd., Bulk Nordic Olympic Ltd., Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd., and Bulk Nordic Oshima Ltd. – Dated September 28, 2015 - Amended and Restated Loan Agreement. $1,500,000 restricted cash was reclassified to current assets due to the balloon payments related to the Bulk Nordic Odyssey Ltd., Bulk Nordic Orion Ltd. tranches due in December of 2020 and Bulk Oshima tranche due in September of 2021. Advance hire, prepaid expenses and other current assets were comprised of the following:
Accounts payable, accrued expenses and other current liabilities were comprised of the following:
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. 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, 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, 2020, 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. Leases under ASC 842 At September 30, 2020, the Company had nine vessels chartered to customers under time charters that contain leases. These nine leases varied in original length from 26 days to 60 days. At September 30, 2020, lease payments due under these arrangements totaled approximately $3,381,000 and each of the time charters were due to be completed in 56 days or less. The Company does not have any sales-type or direct financing leases. The Company has two non-cancelable office leases and non-cancelable office equipment leases and the lease assets and liabilities are not material. Revenue Recognition Voyage revenues represent revenues earned by the Company, principally from providing transportation services under voyage charters. A voyage charter involves the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to various cargo handling terms. Under a voyage charter, the service revenues are earned and recognized ratably over the duration of the voyage. Estimated losses under a voyage charter are provided for in full at the time such losses become probable. Demurrage, which is included in voyage revenues, represents payments by the charterer to the vessel owner when loading and discharging time exceed the stipulated time in the voyage charter. Demurrage is measured in accordance with the provisions of the respective charter agreements and the circumstances under which demurrage revenues arise. Demurrage revenue is included in the calculation of voyage revenue and recognized ratably over the duration of the voyage to which it pertains. Voyage revenue recognized is presented net of address commissions. Charter revenues relate to a time charter arrangement under which the Company is paid to provide transportation services on a per day basis for a specified period of time. Revenues from time charters are earned and recognized on a straight-line basis over the term of the charter, as the vessel operates under the charter and do not fall under the scope of ASC 606, as defined below, revenue is not earned when vessels are offhire. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. Companies can apply the ASU immediately, however the guidance will only be available until December 31, 2022. The Company is currently evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses. For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to a forward-looking expected credit loss model, which generally will result in the earlier recognition of allowances for losses. The new standard is effective for the Company at the beginning of 2023. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently assessing the new guidance and its impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of 2023.
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Assets | FIXED ASSETS At September 30, 2020, the Company owned seventeen dry bulk vessels including three financed under finance leases; and one barge. The carrying amounts of these vessels, including unamortized drydocking costs, are as follows:
(1) Vessels are owned by Nordic Bulk Holding Company Ltd. (“NBHC”), a consolidated joint venture which the Company has a two-third of ownership. (2) Barge is owned by a 50% owned consolidated subsidiary. (3) In January 2020 the Company completed an early buy-out of the lease for a purchase price of $5.5 million, on August 4, 2020, the Company sold the m/v Bulk Beothuk to an unrelated third party for a net sale price of $4.6 million. 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 first and third of 2020 which would require impairment testing. During the second quarter of 2020, the Company determined that a triggering event occurred related to a sale of a vessel, as the carrying value exceeded its fair value. The Company performed an impairment analysis on each asset group and concluded the estimated undiscounted future cash flows were higher than their carrying amount and as such, no additional loss on impairment was recognized.
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Long-term debt consists of the following:
(1)As of September 30, 2020. (2)The borrower under this facility is NBHC. The Company has two-third's ownership interest and STST 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. (3)Interest on 50% of the advances to Bulk Nordic Odyssey and Bulk Nordic Orion was fixed at 4.24% in March 2017 and Interest on the remaining advances is floating at LIBOR plus 2.40%. In September 2020, the lender agreed to an extension of maturity date to December 31, 2020. The Company made its regularly scheduled quarterly principal of $750,000 and accrued interest payment on September 25, 2020. The remaining $10.6 million balloon payment is due on December 31, 2020. (4)Interest on 50% of the advance to Bulk Nordic Oshima was fixed at 4.16% in January 2017 and Interest on the remaining advance is floating at LIBOR plus 2.25%. (5)This facility is cross-collateralized by the vessels m/v Bulk Endurance, m/v Bulk Pride, and m/v Bulk Independence and is guaranteed by the Company. The future minimum annual payments under the debt agreements are as follows:
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, 2020 and December 31, 2019.
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Derivative Instruments and Fair Value Measurements |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives Instruments and Fair Value Measurements | 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. In January 2020, the Company entered into four interest rate cap contracts with total notional amount of $22.8 million at a cost of $628,000 to mitigate the risk associated with increases in interest rates on our sale and lease back financing arrangements of the four new-building vessels. In the event that the three-month LIBOR rate rises above the applicable strike rate of 3.25%, the Company would receive quarterly payments related to the spread difference. These interest rate cap agreements do not qualify for hedge accounting treatment. 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, 2020 and December 31, 2019:
(1) The fair value measurements were all categorized within Level 1 of the fair value hierarchy. (2) These fair value measurements were all categorized within Level 2 of the fair value hierarchy. The three levels of the fair value hierarchy established by ASC 820, Fair Value Measurements and Disclosures, in order of priority are as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 fair value measurements include cash, money-market accounts and restricted cash accounts. Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3 – Inputs that are unobservable (for example cash flow modeling inputs based on assumptions). The following table presents the effect of our derivative financial instruments on the consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019:
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Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | RELATED PARTY TRANSACTIONS Amounts and notes payable to related parties consist of the following:
i.King George Slag LLC is a joint venture of which the Company owns 25% ii.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, 2020 and 2019, the Company incurred technical management fees of approximately $627,600 and $832,000, respectively, under this arrangement. During the nine months ended September 30, 2020 and 2019, the Company incurred technical management fees of approximately $1,990,000 and $2,342,000, respectively, under this arrangement. The total amounts payable to Seamar at September 30, 2020 and December 31, 2019 were approximately $4,291,000 and $5,680,000, respectively.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company's leases are secured by the assignment of earnings and insurances and by guarantees of the Company. Vessel Acquisition Accounted for as a Finance Lease (in accordance with previous accounting guidance - ASC 840) The selling price of the m/v Bulk Destiny to the new owner (lessor) was $21.0 million and the fair value of the vessel at the inception of the lease was $24.0 million. The difference between the selling price and the fair value of the vessel was recorded as prepaid rent and is being amortized over the 25 year estimated useful life of the vessel. Prepaid rent is included in finance lease right of use assets (previously "vessels under capital lease") on the consolidated balance sheet at September 30, 2020. Minimum lease payments fluctuate based on three-month LIBOR and are payable quarterly over the seven year lease term, with a purchase obligation of $11.2 million due with the final lease payment in January 2024. Interest is floating at LIBOR plus 2.75% (2.98% including the margin, at inception of the lease). The Company will own this vessel at the end of the lease term. The selling price of the m/v Bulk Beothuk was $7.0 million and the fair value was estimated to be the same. The lease is payable at $3,500 per day every fifteen days over the five year lease term, and a balloon payment of $4.0 million is due with the final lease payment in June 2022. The implied interest rate at inception was 11.83%. In January 2020 the Company completed an early buy-out of the lease for a purchase price of $5.5 million and the vessel was sold to an unrelated third party for a net sale price of $4.6 million on August 4, 2020. The selling price of the m/v Bulk Trident was $13.0 million and the fair value was estimated to be the same. The Company simultaneously leased the vessel back from the buyer. The minimum lease payments fluctuate based on three-month LIBOR and are payable monthly over the eight-year lease term. The Company has the option to purchase the vessel at the end of the third year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. Interest is floating at LIBOR plus 1.7% (1.94% including the margin, at inception of the lease). The Company will own this vessel at the end of the lease term. The selling price of the m/v Bulk PODS was $14.8 million and the fair value was estimated to be the same. The Company simultaneously leased the vessel back from the buyer. The minimum lease payments fluctuate based on three-month LIBOR and are payable monthly over the eight-year lease term. The Company has the option to purchase the vessel at the end of the third year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. Interest is floating at LIBOR plus 1.7% (1.93% including the margin, at inception of the lease). The Company will own this vessel at the end of the lease term. Vessel Acquisition Accounted for as a Finance Lease (in accordance with new accounting guidance - ASC 842) In February 2019, the Company acquired the m/v Bulk Spirit for $13.0 million, which is the estimated fair value and simultaneously entered into a failed sale and leaseback of the vessel. The Company determined that the transfer of the vessel to the lessor was not a sale in accordance with ASC 606, because control of the vessel was not transferred to the lessor. The lease is classified as finance lease in accordance with ASC 842, because the lease transfers ownership of the vessel to the Company by the end of the lease term. The minimum lease payments include interest at 5.10% for the first five years. Interest fluctuates based on the three-month LIBOR for the remaining three years of the eight-year lease term. The Company has the option to purchase the vessel at the end of the second year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. The Company is obligated to repurchase the vessel at the end of the lease term. A balloon payment of $3.9 million is due with the final lease payment in March 2027. This lease is secured by the assignment of earnings and insurances and by a guarantee of the Company. In September 2019, the Company acquired the m/v Bulk Friendship for $14.1 million, which is the estimated fair value and simultaneously entered into a failed sale and leaseback of the vessel. The Company determined that the transfer of the vessel to the lessor was not a sale in accordance with ASC 606, because control of the vessel was not transferred to the lessor. The lease is classified as finance lease in accordance with ASC 842, because the lease includes a fixed price purchase option, which the Company expects to exercise at the end of the lease term. The minimum lease payments include imputed interest at 5.29%. The Company has the option to purchase the vessel at the end of the third year of the lease or thereafter, or in the case of default by the lessor, at any time during the lease term. In the event the Company has not exercised any of the purchase options during the term of the charter then the Company shall have a final purchase option to purchase the vessel at the end of the fifth year at a fixed price of $7.8 million. This lease is secured by the assignment of earnings and insurances and by a guarantee of the Company. Vessel Newbuildings During the second and third quarter of 2019, the Company entered into two vessel newbuilding contracts to build four new high ice class post-panamax 95,000 dwt dry bulk vessels. The new vessels, with a building cost of between approximately $37.7 million to $38.3 million each, are expected to be delivered in 2021. As of September 30, 2020, the Company has made deposits of $15.4 million for the four new vessels. The second installments of 20% are due and payable upon launching of the vessels and the final payments are due upon delivery of the vessels. The Company entered into a series of transactions to finance its four new post-panamax dry bulk vessels, to be delivered in 2021, under sale and leaseback transactions. The agreements obligate the Company to sell the vessels upon completion of construction at the lesser of approximately $32 million or 85% of fair market value at closing. Following the sale, the Company is obligated to charter the vessels from the buyer under a bareboat charter for a period of 15 years with a purchase obligation of $2.5 million at the end of year 15. The Company has options to purchase the vessels at designated prices starting the sixth year after delivery of each vessel. The Company expects to account for these transactions as failed sale and leaseback transactions and classify the leases as finance leases. The Company has also entered into a LLC agreement with the non-controlling interest holder of NBP which includes certain obligations as described in Note 8. Long-term Contracts Accounted for as Operating Leases The Company leases office space for its Copenhagen operations. Since December 31, 2018, this lease continues on a month to month basis. The non-cancelable period is six months. The Company leases office space for its Singapore operations. At September 30, 2020, the remaining lease term is fourteen months. For the three and nine months ended September 30, 2020 and 2019, the Company recognized approximately $52,000 and $155,000, respectively, as lease expense for office leases in General and Administrative Expenses. Future minimum lease payments under finance leases with initial or remaining terms in excess of one year at September 30, 2020 were:
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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Other Long-Term Liabilities |
9 Months Ended |
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Sep. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | OTHER LONG-TERM LIABILITIES In September 2019, the Company entered into an LLC agreement for the formation of Nordic Bulk Partners LLC (“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. During the construction phase of the vessel, the third party has committed to contribute additional funding and ultimately own 50% of NBP 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 pursuant to the call option, to purchase the third party's interest in NBP beginning any time 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 of $5.1 million in Long term liabilities - Other at September 30, 2020. Earnings attributable to the third party’s interest in NBP are recorded in Interest expense, net, which resulted in additional interest expenses of $76,496 and $104,662, respectively, for the three and nine months ended September 30, 2020. On September 28, 2020, the Company acquired an additional one-third equity interest in its partially-owned consolidated subsidiary NBHC from its shareholders. The Company owned a one-third of equity interest of NBHC, a joint-venture formed in October 2012 for the purpose of owning Bulk Nordic Odyssey Ltd. (“Bulk Odyssey”) and Bulk Nordic Orion Ltd. (“Bulk Orion”) and to invest in additional vessels through its wholly-owned subsidiaries. The acquisition increases the Company’s equity interest in NBHC to 66.7%. The purchase price of the equity interest was $22.5 million, including a $15.0 million cash payment upon closing and $7.5 million of deferred consideration, at a three-month LIBOR plus 3.5%, in three equal installments of $2.5 million due on the first, second, and third anniversaries of September 28, 2020. The deferred consideration is recorded in "Other current liabilities" and "Long-term liabilities - other" on the Company's Consolidated Balance Sheet as of September 30, 2020. NBHC will continue to be a consolidated entity in the Company’s consolidated financial statements pursuant to ASC 810-10. The portion of NBHC not owned by the Company will continue to be recognized as non-controlling interest in the Company’s consolidated financial statements.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS NBHC Loan Refinancing On November 2, 2020, NBHC signed a nonbinding term sheet with a new lender pursuant to which the new lender has proposed to provide NBHC a loan for up to $18.0 million with a term of 84 months at an interest rate of 2.95% per annum. The borrower will make 28 quarterly payments in arrears followed by one final installment of $4.4 million payable on the 7th anniversary of the drawdown date, no later than December 31, 2020. The Loan would be secured by a first lien on m/v Nordic Odyssey and m/v Nordic Orion. The Company intends to use a portion of the proceeds of the loan to repay the outstanding balance of $10.6 million for the Nordic Odyssey and Nordic Orion loan facilities which matures on December 31, 2020.
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Basis of Presentation and Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued Accounting Pronouncements | 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. 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, 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, 2020, 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. Leases under ASC 842 At September 30, 2020, the Company had nine vessels chartered to customers under time charters that contain leases. These nine leases varied in original length from 26 days to 60 days. At September 30, 2020, lease payments due under these arrangements totaled approximately $3,381,000 and each of the time charters were due to be completed in 56 days or less. The Company does not have any sales-type or direct financing leases. The Company has two non-cancelable office leases and non-cancelable office equipment leases and the lease assets and liabilities are not material. Revenue Recognition Voyage revenues represent revenues earned by the Company, principally from providing transportation services under voyage charters. A voyage charter involves the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to various cargo handling terms. Under a voyage charter, the service revenues are earned and recognized ratably over the duration of the voyage. Estimated losses under a voyage charter are provided for in full at the time such losses become probable. Demurrage, which is included in voyage revenues, represents payments by the charterer to the vessel owner when loading and discharging time exceed the stipulated time in the voyage charter. Demurrage is measured in accordance with the provisions of the respective charter agreements and the circumstances under which demurrage revenues arise. Demurrage revenue is included in the calculation of voyage revenue and recognized ratably over the duration of the voyage to which it pertains. Voyage revenue recognized is presented net of address commissions. Charter revenues relate to a time charter arrangement under which the Company is paid to provide transportation services on a per day basis for a specified period of time. Revenues from time charters are earned and recognized on a straight-line basis over the term of the charter, as the vessel operates under the charter and do not fall under the scope of ASC 606, as defined below, revenue is not earned when vessels are offhire. Recently Issued Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. Companies can apply the ASU immediately, however the guidance will only be available until December 31, 2022. The Company is currently evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses. For most financial assets, such as trade and other receivables, loans and other instruments, this standard changes the current incurred loss model to a forward-looking expected credit loss model, which generally will result in the earlier recognition of allowances for losses. The new standard is effective for the Company at the beginning of 2023. Entities are required to apply the provisions of the standard through a cumulative-effect adjustment to retained earnings as of the effective date. The Company is currently assessing the new guidance and its impact on its consolidated financial statements, and it intends to adopt the guidance when it becomes effective in the first quarter of 2023.
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Basis of Presentation and Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restrictions on Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows:
(1) Consists of cash deposits at various major banks.
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Advance hire, prepaid expenses and other current assets were comprised of the following:
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Schedule of Accounts Payable and Accrued Liabilities | Accounts payable, accrued expenses and other current liabilities were comprised of the following:
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Fixed Assets (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property Plant and Equipment Schedule of Significant Acquisitions | The carrying amounts of these vessels, including unamortized drydocking costs, are as follows:
(1) Vessels are owned by Nordic Bulk Holding Company Ltd. (“NBHC”), a consolidated joint venture which the Company has a two-third of ownership. (2) Barge is owned by a 50% owned consolidated subsidiary. (3) In January 2020 the Company completed an early buy-out of the lease for a purchase price of $5.5 million, on August 4, 2020, the Company sold the m/v Bulk Beothuk to an unrelated third party for a net sale price of $4.6 million.
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Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term debt consists of the following:
(1)As of September 30, 2020. (2)The borrower under this facility is NBHC. The Company has two-third's ownership interest and STST 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. (3)Interest on 50% of the advances to Bulk Nordic Odyssey and Bulk Nordic Orion was fixed at 4.24% in March 2017 and Interest on the remaining advances is floating at LIBOR plus 2.40%. In September 2020, the lender agreed to an extension of maturity date to December 31, 2020. The Company made its regularly scheduled quarterly principal of $750,000 and accrued interest payment on September 25, 2020. The remaining $10.6 million balloon payment is due on December 31, 2020. (4)Interest on 50% of the advance to Bulk Nordic Oshima was fixed at 4.16% in January 2017 and Interest on the remaining advance is floating at LIBOR plus 2.25%. (5)This facility is cross-collateralized by the vessels m/v Bulk Endurance, m/v Bulk Pride, and m/v Bulk Independence and is guaranteed by the Company.
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Schedule of Maturities of Long-term Debt | The future minimum annual payments under the debt agreements are as follows:
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Derivative Instruments and Fair Value Measurements (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following table summarizes assets and liabilities measured at fair value on a recurring basis at September 30, 2020 and December 31, 2019:
(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.
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Derivative Instruments, Gain (Loss) | The following table presents the effect of our derivative financial instruments on the consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019:
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Related Party Transactions (Tables) |
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Schedule of Related Party Transactions | Amounts and notes payable to related parties consist of the following:
i.King George Slag LLC is a joint venture of which the Company owns 25% ii.Seamar Management S.A. ("Seamar")
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Leases | Future minimum lease payments under finance leases with initial or remaining terms in excess of one year at September 30, 2020 were:
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General Information and Recent Events (Details) |
Sep. 30, 2020
numberOfVessel
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NBHC | |
Property, Plant and Equipment [Line Items] | |
Ownership percentage | 66.67% |
NBHC | Owner of a deck barge | |
Property, Plant and Equipment [Line Items] | |
Ownership percentage | 50.00% |
Panamax | |
Property, Plant and Equipment [Line Items] | |
Number of vessels | 2 |
Ultramax Ice Class 1C | |
Property, Plant and Equipment [Line Items] | |
Number of vessels | 2 |
Supramax | |
Property, Plant and Equipment [Line Items] | |
Number of vessels | 7 |
Panamax Ice Class 1A | |
Property, Plant and Equipment [Line Items] | |
Number of vessels | 6 |
Basis of Presentation and Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash Reported (Details) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Money market accounts – cash equivalents | $ 26,518,566 | $ 32,150,342 | ||
Cash | 19,040,385 | 18,404,749 | ||
Total cash and cash equivalents | 45,558,951 | 50,555,091 | $ 34,171,062 | |
Restricted cash | 2,500,000 | 2,500,000 | 2,500,000 | |
Total cash, cash equivalents and restricted cash | $ 48,058,951 | $ 53,055,091 | $ 36,671,062 | $ 56,114,735 |
Basis of Presentation and Significant Accounting Policies - Additional Information (Details) |
6 Months Ended | 9 Months Ended | |
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Sep. 30, 2019
USD ($)
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Sep. 30, 2020
USD ($)
lease
numberOfVessel
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Dec. 31, 2019
USD ($)
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Property, Plant and Equipment [Line Items] | |||
Restricted cash | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 |
Restricted cash | $ 1,500,000 | 1,000,000 | |
Number of vessels chartered to customers | numberOfVessel | 9 | ||
Lease payments | $ 3,381,000 | ||
Time charter, term to completion | 15 years | 56 days | |
Number of noncancelable office leases | lease | 2 | ||
Bulk Nordic Odin, Bulk Nordic Olympic, Bulk Nordic Odyssey, Bulk Nordic Orion and Bulk Nordic Oshima Loan Agreement | |||
Property, Plant and Equipment [Line Items] | |||
Restricted cash | $ 2,500,000 | $ 2,500,000 | |
Restricted cash | $ 1,500,000 | ||
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Vessel lease term | 26 days | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Vessel lease term | 60 days |
Basis of Presentation and Significant Accounting Policies - Advance Hire, Prepaid Expenses and Other Current Assets (Details) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Advance hire | $ 5,531,783 | $ 3,985,826 |
Prepaid expenses | 3,287,976 | 4,924,557 |
Accrued receivables | 8,370,234 | 6,466,068 |
Margin deposit | 2,053,309 | 269,379 |
Other current assets | 3,178,833 | 3,124,995 |
Advance hire, prepaid expenses and other current assets | $ 22,422,135 | $ 18,770,825 |
Basis of Presentation and Significant Accounting Policies - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
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Sep. 30, 2020 |
Dec. 31, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable | $ 23,587,531 | $ 24,173,291 |
Accrued expenses | 10,586,481 | 14,883,555 |
Derivative liabilities | 1,374,948 | 472,073 |
Deferred consideration | 2,500,000 | 0 |
Other accrued liabilities | 1,043,674 | 444,716 |
Accounts payable accrued expenses and other current liabilities | $ 39,092,634 | $ 39,973,635 |
Debt - Future Minimum Annual Payments (Details) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
2020 (remainder of the year) | $ 13,138,473 | |
2021 | 33,140,563 | |
2022 | 28,602,568 | |
2023 | 3,536,268 | |
2024 | 22,352,925 | |
Thereafter | 155,266 | |
Long-term Debt | $ 100,926,063 | $ 110,778,263 |
Derivative Instruments and Fair Value Measurements - Additional Information (Details) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Jan. 31, 2020
USD ($)
numberOfVessel
numberOfContract
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Purchase of derivative instrument | $ 628,000 | $ 0 | |||
Unrealized loss (gain) on derivative instruments | $ 18,098 | $ 301,058 | $ 1,530,875 | (2,203,899) | |
London Interbank Offered Rate (LIBOR) Swap Rate [Member] | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Variable rate | 3.25% | 3.25% | |||
Interest rate cap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Number of interest rate cap contracts | numberOfContract | 4 | ||||
Purchase of derivative instrument | $ 628,000 | ||||
Unrealized loss (gain) on derivative instruments | $ (19,743) | $ 0 | $ 424,088 | $ 0 | |
Derivative, notional amount | $ 22,800,000 | ||||
Number of new building vessels | numberOfVessel | 4 |
Derivative Instruments and Fair Value Measurements - Schedule of Derivative Instruments (Details) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Margin accounts | Fair Value, Inputs, Level 1 | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivative | $ 2,053,309 | $ 269,379 |
Liability Derivative | 0 | 0 |
Forward freight agreements | Fair Value, Inputs, Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivative | 0 | 0 |
Liability Derivative | 89,355 | 149,760 |
Fuel swap contracts | Fair Value, Inputs, Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivative | 0 | 0 |
Liability Derivative | 1,489,505 | 322,313 |
Interest rate cap | Fair Value, Inputs, Level 2 | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivative | 203,912 | 0 |
Liability Derivative | $ 0 | $ 0 |
Related Party Transactions - Additional Information (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Related Party Transaction [Line Items] | |||||
Technical management fees | $ 627,600 | $ 832,000 | $ 1,990,000 | $ 2,342,000 | |
Due to related parties, current | 242,852 | 242,852 | $ 332,987 | ||
Accounts payable and accrued liabilities | Affiliated Companies | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties, current | $ 4,290,863 | $ 4,290,863 | $ 5,679,768 |
Commitments and Contingencies - Future Minimum Lease Payments Under Finance Leases (Details) - USD ($) |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
2020 (remainder of the year) | $ 2,449,459 | |
2021 | 9,379,592 | |
2022 | 9,263,796 | |
2023 | 9,148,314 | |
2024 | 26,062,508 | |
Thereafter | 13,020,221 | |
Total minimum lease payments | 69,323,890 | |
Less imputed interest | 10,093,601 | |
Present value of minimum lease payments | 59,230,289 | |
Less current portion | 6,952,635 | $ 12,549,208 |
Long-term portion | $ 52,277,654 | $ 57,498,217 |
Subsequent Events (Details) |
Nov. 02, 2020
USD ($)
payment
|
Dec. 31, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
---|---|---|---|---|
Subsequent Event [Line Items] | ||||
Long-term debt, gross | $ 100,926,063 | $ 110,778,263 | ||
Bulk Nordic Odyssey Ltd, Bulk Nordic Orion Ltd, Loan Agreement | ||||
Subsequent Event [Line Items] | ||||
Interest rate, stated percentage | 2.63% | |||
Long-term debt, gross | $ 10,604,406 | $ 12,854,405 | ||
Subsequent Event | Bulk Nordic Odyssey Ltd, Bulk Nordic Orion Ltd, Loan Agreement | ||||
Subsequent Event [Line Items] | ||||
Long-term debt, gross | $ 10,600,000 | $ 10,600,000 | ||
Subsequent Event | Nonbinding Term Sheet | ||||
Subsequent Event [Line Items] | ||||
Face amount | $ 18,000,000.0 | |||
Debt instrument, term | 84 months | |||
Interest rate, stated percentage | 2.95% | |||
Number of quarterly payments | payment | 28 | |||
Periodic payment terms, balloon payment to be paid | $ 4,400,000 |
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