Eagle Bulk Shipping
Annual Report 2017

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K ☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2017 OR ☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHESECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33831 EAGLE BULK SHIPPING INC.(Exact name of Registrant as specified in its charter) Republic of the Marshall Islands98–0453513(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.) 300 First Stamford Place, 5th Floor Stamford, Connecticut06902(Address of principal executive offices)(Zip Code) Registrant’s telephone number, including area code: (203) 276–8100 Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $0.01 per share(Title of Class) The Common Stock is registered on the Nasdaq Stock Market LLC(Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes☐ No☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes☐ No☒1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 1934during 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 filingrequirements for the past 90 days. Yes☒ No☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe 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 tosubmit and post such files). Yes☒ No☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K.☒ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “large accelerated filer”, “accelerated filer” , “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the ExchangeAct. (Check one):Large accelerated filer☐ Accelerated filer☒Non-Accelerated filer☐ Smaller reporting company☐(Do not check if a 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 orrevised financial accounting standards provide 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 Act). Yes☐ No☒ The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on June 30, 2017, the last business day of the registrant’smost recently completed second quarter, was approximately $178,082,636 based on the closing price of $4.73 per share on The Nasdaq Global Select Marketon that date. (For this purpose, all outstanding shares of common stock have been considered held by non-affiliates, other than the shares beneficially ownedby directors, officers and certain shareholders of the registrant holding above 10% of the outstanding shares of common stock; without conceding that any ofthe excluded parties are "affiliates" of the registrant for purposes of the federal securities laws.) As of March 9, 2018, 73,090,233 shares of the registrant’s common stock were outstanding. Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities ExchangeAct of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes☒ No☐ DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for its 2018 annual meeting of shareholders, which will be filed with the Securities and ExchangeCommission within 120 days of December 31, 2017, are incorporated by reference into Part III of this Annual Report on Form 10-K for the registrant's fiscalfor the year ended December 31, 2017.2TABLE OF CONTENTS PagePART I 5Item 1.Business5Item 1A.Risk Factors34Item 1B.Unresolved Staff Comments52Item 2.Properties52Item 3.Legal Proceedings52Item 4.Mine Safety Disclosure52PART II 53Item 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities53Item 6.Selected Financial Data55Item 7.Management's Discussion and Analysis of Financial Condition and Results of Operations58Item 7A.Quantitative and Qualitative Disclosures about Market Risk79Item 8.Financial Statements and Supplementary Data80Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure80Item 9A.Controls and Procedures80Item 9B.Other Information81PART III 82Item 10.Directors, Executive Officers and Corporate Governance82Item 11.Executive Compensation82Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters82Item 13.Certain Relationships and Related Transactions, and Director Independence82Item 14.Principal Accountant Fees and Services82PART IV 83Item 15.Exhibits, Financial Statement Schedules83 Signatures873References in this Annual Report on Form 10-K (this “Form 10-K” or “Annual Report”) to “we,” “us,” “our,” “Eagle Bulk,” the “Company” andsimilar terms all refer to Eagle Bulk Shipping Inc. and its subsidiaries, unless otherwise stated or the context otherwise requires. References to "Predecessor"refer to the Company between period January 1, 2014 and October 15, 2014 and prior. References to "Successor" refer to the Company on or after October 16,2014,A glossary of shipping terms (the “Glossary”) that should be used as a reference when reading this Annual Report can be found immediately priorto Item 1A. Capitalized terms that are used in this Annual Report are either defined when they are first used or in the Glossary. All dollar amounts are stated in U.S. dollars unless otherwise stated. Effective as of the opening of trading on August 5, 2016, the Company completed a 1 for 20 reverse stock split (the “Reverse Stock Split”) of itsissued and outstanding shares of common stock, par value $0.01 per share, as previously approved by the Board of Directors and shareholders. Proportionaladjustments were made to the Company’s issued and outstanding common stock and to its common stock underlying stock options and other common stock-based equity grants outstanding immediately prior to the effectiveness of the Reverse Stock Split as well as the applicable exercise price. In addition,proportional adjustments were made to the number of shares of common stock issuable upon exercise of outstanding warrants and to the exercise price ofsuch warrants, pursuant to the terms thereof. No fractional shares were issued in connection with the Reverse Stock Split, and shareholders who would havereceived a fractional share of common stock in connection with the Reverse Stock Split instead received a cash payment in lieu of such fractional share. Allreferences to common stock and all per share data for the Successor contained in this 10-K have been retrospectively adjusted to reflect the Reverse StockSplit unless explicitly stated otherwise. Please see “Note 1 to the consolidated financial statements”. Forward-Looking Statements This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the“Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of1995, and are intended to be covered by the safe harbor provided for under these sections. These statements may include words such as “believe,” “estimate,”“project,” “intend,” “expect,” “plan,” “anticipate,” and similar expressions in connection with any discussion of the timing or nature of future operating orfinancial performance or other events. Forward-looking statements reflect management's current expectations and observations with respect to future eventsand financial performance. Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have areasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differmaterially from future results expressed, projected, or implied by those forward-looking statements. The principal factors that affect our financial position,results of operations and cash flows include, charter market rates, which have declined significantly from historic highs, periods of charter hire, vesseloperating expenses and voyage costs, which are incurred primarily in U.S. dollars, depreciation expenses, which are a function of the cost of our vessels,significant vessel improvement costs and our vessels' estimated useful lives, and financing costs related to our indebtedness. Our actual results may differmaterially from those anticipated in these forward-looking statements as a result of certain factors which could include the following: (i) changes in demandin the dry bulk market, including, without limitation, changes in production of, or demand for, commodities and bulk cargoes, generally or in particularregions; (ii) greater than anticipated levels of dry bulk vessel newbuilding orders or lower than anticipated rates of dry bulk vessel scrapping; (iii) changes inrules and regulations applicable to the dry bulk industry, including, without limitation, legislation adopted by international bodies or organizations such asthe International Maritime Organization and the European Union (the “EU”) or by individual countries; (iv) actions taken by regulatory authorities includingwithout limitation the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”); (v) changes in trading patterns significantly impacting overalldry bulk tonnage requirements; (vi) changes in the typical seasonal variations in dry bulk charter rates; (vii) changes in the cost of other modes of bulkcommodity transportation; (viii) changes in general domestic and international political conditions; (ix) changes in the condition of the Company's vesselsor applicable maintenance or regulatory standards (which may affect, among other things, our anticipated dry docking costs); (x) significant deteriorations incharter hire rates from current levels or the inability of the Company to achieve its cost-cutting measures; and (xi) the outcome of legal proceeding in whichwe are involved; and other factors listed from time to time in our filings with the Securities and Exchange Commission (the “SEC”). This discussion alsoincludes statistical data regarding world dry bulk fleet and orderbook and fleet age. We generated some of this data internally, and some were obtained fromindependent industry publications and reports that we believe to be reliable sources. We have not independently verified this data nor sought the consent ofany organizations to refer to their reports in this Annual Report. We disclaim any intent or obligation to update publicly any forward-looking statements,whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.4PART IITEM 1. BUSINESS Overview and Recent DevelopmentsWe are Eagle Bulk Shipping Inc., a Marshall Islands corporation incorporated on March 23, 2005 and headquartered in Stamford, Connecticut. Weown one of the largest fleets of Supramax/Ultramax dry bulk vessels in the world. Supramax/Ultramax dry bulk vessels are equipped with cargo-handlingcranes and grabs and range in size from approximately 50,000 to 65,000 dwt. Supramax/Ultramax ships are considered a sub-category of the Handymaxcarriers; typically defined vessels between 40,000 and 65,000 dwt in size. We transport a broad range of major and minor bulk cargoes, including but notlimited to coal, grain, ore, petcoke, cement and fertilizer, along worldwide shipping routes. As of December 31, 2017, we owned a modern fleet of 47Supramax/Ultramax dry bulk vessels and had one vessel on long term time charter with approximately four years remaining. In addition, the Companycharters-in third-party vessels on a short to medium term basis.We are focused on maintaining a high quality fleet that is concentrated primarily in Supramax/Ultramax dry bulk vessels. These vessels have thecargo loading and unloading flexibility of on-board cranes while offering cargo carrying capacities approaching that of Panamax dry bulk vessels, whichrange in size from 72,000 to 83,000 dwt and rely on port facilities to load and discharge their cargoes. We believe that the cargo handling flexibility andcargo carrying capacity of the Supramax/Ultramax class vessels make them attractive to cargo interests and vessel charterers. The 47 vessels in our operatingfleet, with an aggregate carrying capacity of 2,683,751 dwt, have an average age of 8.2 years as of December 31, 2017.RefinancingOn December 8, 2017, the Company, through certain of its wholly-owned subsidiaries, completed a refinancing of approximately $265,000,000under (i) that certain Amended and Restated First Lien Loan Agreement, dated as of March 30, 2016, made by, among others, Eagle Shipping LLC (“EagleShipping”), a wholly-owned subsidiary of the Company, as borrower, the banks and financial institutions party thereto and ABN AMRO Capital USA LLC, assecurity trustee and facility agent (the “First Lien Facility”) and (ii) that certain Second Lien Credit Agreement, dated as of March 30, 2016, made by, amongothers, Eagle Shipping, as borrower, the individuals and financial institutions party thereto and Wilmington Savings Fund Society, FSB as second lien agent(the “Second Lien Facility”), through (a) a new credit facility of $65,000,000 (the “New First Lien Facility”), by and among Eagle Shipping, as borrower,certain wholly-owned vessel-owning subsidiaries of Eagle Shipping, as guarantors (the “Guarantors”), the lenders thereunder (the “Lenders”), the swap banksparty thereto, ABN AMRO Capital USA LLC, as facility agent and security trustee for the Lenders, ABN AMRO Capital USA LLC, Credit Agricole Corporateand Investment Bank and Skandinaviska Enskilda Banken AB (publ), as mandated lead arrangers, and ABN AMRO Capital USA LLC, as arranger andbookrunner, and (b) the issuance by Eagle Bulk Shipco LLC (“Shipco”), a company existing under the laws of the Republic of the Marshall Islands and awholly-owned subsidiary of the Company, of $200,000,000 in aggregate principal amount of 8.250% Senior Secured Bonds 2017/2022 (the “NorwegianBond Debt”), pursuant to those certain Bond Terms, dated as of November 22, 2017, by and between Shipco, as issuer, and Nordic Trustee AS, a companyexisting under the laws of Norway (the “Bond Trustee”). In addition, Shipco entered into a $15,000,000 Super Senior Revolving Facility Agreement (the“Super Senior Facility”), by and among Shipco, as borrower, and ABN AMRO Capital USA LLC, as original lender, mandated lead arranger and agent.Corporate ReorganizationIn connection with the refinancing transactions, the Company consummated an internal reorganization. As part of the internal reorganization, EagleShipping transferred ownership of certain wholly-owned vessel-owning subsidiaries to Shipco, such that Shipco became the parent to twenty eight vessel-owning subsidiaries and Eagle Shipping became the parent to nine vessel-owning subsidiaries. The Norwegian Bond Debt is secured by twenty eight ShipcoVessels and the New First Lien Facility is secured by nine Eagle Shipping Vessels. Additionally, as a result of the internal reorganization, all managementand technical services are now conducted by Eagle Bulk Management LLC, a limited liability company existing under the laws of the Republic of theMarshall Islands and a direct, wholly-owned subsidiary of the Company, and its subsidiaries, which maintains its principal executive office in Stamford,Connecticut.Vessel AcquisitionsOn February 28, 2017, Eagle Bulk Ultraco LLC (“Ultraco”), a wholly-owned subsidiary of the Company, entered into a framework agreement withGreenship Bulk Manager Pte. Ltd., as Trustee-Manager of Greenship Bulk Trust, a Norwegian OTC-listed entity (the "Greenship Sellers"), for the purchase ofnine modern sister vessels (the "Greenship Vessels") built5between 2012 and 2015(the "Greenship Purchase Agreement"). The aggregate purchase price for the nine Greenship Vessels was $153.0 million. Theallocated purchase price for each Greenship Vessel was $17.0 million. The Company took delivery of all nine Greenship Vessels prior to December 31, 2017.On December 19, 2017, the Company signed a memorandum of agreement to purchase a 2015 built Ultramax vessel for $21.275 million. As ofDecember 31, 2017, the Company paid a deposit of $2.2 million for that vessel which was delivered in the first quarter of 2018.Ultraco Debt FacilityOn June 28, 2017, Ultraco entered into a credit agreement (the “Ultraco Debt Facility”), by and among Ultraco, as borrower, certain wholly-ownedvessel-owning subsidiaries of Ultraco, as guarantors (the “Ultraco Guarantors”), the lenders thereunder (the “Ultraco Lenders”), the swap banks party thereto,ABN AMRO Capital USA LLC, as facility agent and security trustee for the Ultraco Lenders, ABN AMRO Capital USA LLC, DVB Bank SE andSkandinaviska Enskilda Banken AB (publ), as mandated lead arrangers, and ABN AMRO Capital USA LLC, as arranger and bookrunner. The Ultraco DebtFacility provides for a multi-draw senior secured term loan facility in an aggregate principal amount of up to the lesser of (i) $61,200,000 and (ii) 40% of thelesser of (1) the purchase price of the nine Greenship Vessels to be acquired by Ultraco and the Ultraco Guarantors pursuant to a previously disclosedframework agreement, dated as of February 28, 2017, with Greenship Bulk Manager Pte. Ltd., as Trustee-Manager of Greenship Bulk Trust, and (2) the fairmarket value of the Greenship Vessels. The proceeds of the Ultraco Debt Facility were used for the purpose of financing, refinancing or reimbursing a part ofthe acquisition cost of the Greenship Vessels.On December 29, 2017, Ultraco, a wholly-owned subsidiary of the Company entered into a First Amendment (the “First Amendment”) to the UltracoDebt Facility to increase the commitments for the purpose of financing the acquisition of an additional vessel by New London Eagle LLC, a wholly-ownedsubsidiary of Ultraco and additional guarantor under the Ultraco Debt Facility. The increase in the commitments was $8,600,000. Ultraco took delivery of thevessel in January 2018 and drew down $8.6 million.As of December 31, 2017, the Company has drawn $61.2 million under the Ultraco Debt Facility. Equity OfferingOn December 13, 2016, the Company entered into a Stock Purchase Agreement with certain investors (the “Investors”), pursuant to which theCompany agreed to issue to the Investors in a private placement exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506 ofRegulation D promulgated under the Securities Act (the “December Private Placement”) approximately 22.2 million shares of the Company’s common stock,par value $0.01 per share, at a purchase price of $4.50 per share, for aggregate gross proceeds of $100.0 million. On January 20, 2017, the Company closedthe December Private Placement for aggregate net proceeds of $96.0 million. The Company principally used the proceeds to acquire eleven Ultramax vesselsduring 2017.Management of Our Fleet Eagle Bulk, through wholly-owned subsidiaries performs commercial, technical, operational and strategic management of our fleet in-house. Our Competitive Strengths and our Business Strategy We believe that we have a number of strengths that provide us with a competitive advantage in the dry bulk shipping industry, including:•A large and homogeneous fleet of Supramax/Ultramax dry bulk vessels. We own and operate one of the largest Supramax/Ultramax fleets inthe world. As of December 31, 2017, our owned-fleet totaled 47 vessels, supplemented by chartered-in vessels. We view theSupramax/Ultramax segment, as being the most attractive within the dry bulk shipping industry due to their:◦Increased operating flexibility;◦Optimal size and hence ability to access more ports; and◦Ability to carry a more diverse range of cargoes.◦Low order book.6•A modern, high quality fleet. The 47 Supramax/Ultramax vessels in our operating fleet as of December 31, 2017 had an average age ofapproximately 8.2 years. We believe that owning a modern, high quality fleet reduces operating costs, improves safety and provides us with acompetitive advantage in securing employment for our vessels. Our fleet was built to high standards at leading Japanese and Chineseshipyards.•A fleet of sister and similar ships allows us to maintain low cost and highly efficient operations. Our current owned fleet of 47 vesselsincludes five identical sister ships built at the Mitsui shipyard based on the same design specifications, two sets of three and 17 identicalsister ships built at Dayang shipyard, five identical sister ships built at IHI Marine United shipyard, and three similar ships built at the Oshimashipyard that use many of the same parts and equipment. Furthermore, the nine vessels we purchased from Greenship and the New LondonEagle which we purchased in December, 2017 are all of the Crown-63 design with similar or identical specification, all built by SinopacificShipbuilding Group at the Dayang Shipyard, and Zhejiang Shipyards. Operating sister and similar ships provides us with economies of scale,operational and scheduling flexibility, efficiencies in employee retention and training and lower inventory and maintenance expenses. Webelieve that this should allow us to increase revenue and lower operating costs. We intend to actively monitor and control vessel operatingexpenses while maintaining the high quality of our fleet through regular inspection and maintenance programs.•Balanced charter program. Under the new management team, the Company transitioned to an active operating model where it strategicallyenters into a higher percentage of voyage charters and developing contractual relationships directly with cargo interests. In 2017, 39% of thecharters were on a voyage basis, as compared to 35% in 2016 and 6% in 2015. Voyage charters and contracts of affreightment and therelationships with actual users (shippers, receivers and traders) have what we believe to be the dual benefit of providing greater operationalefficiencies and can act as a balance to the Company’s naturally long position to the market. Notwithstanding the focus on voyage chartering,the Company consistently monitors the dry bulk shipping market and, based on market conditions, will consider entering into long-term timecharters at when appropriate.•Expand our fleet through selective acquisitions of dry bulk vessels. Depending on market conditions, we intend to acquire additional modern,high quality vessels through timely and selective acquisitions in a manner that is accretive to our cash flows. We expect to focus primarily inthe Supramax and Ultramax segment. While not a priority, we may also consider acquisitions of other sizes of dry bulk vessels. 7Our Fleet Our operating fleet of 47 vessels is fitted with cargo cranes and cargo grabs that permit our vessels to load and unload cargo in ports that do not haveshore-side cargo handling infrastructure in place. Our vessels are flagged in the Marshall Islands. Our vessels are all employed on time and voyage charters.Our operating fleet as of December 31, 2017 included the following vessels:8Vessel Class Dwt YearBuilt Avocet Supramax 53,462 2010 Bittern Supramax 57,809 2009 Canary Supramax 57,809 2009 Cardinal Supramax 55,362 2004 Condor Supramax 50,296 2001 Crane Supramax 57,809 2010 Crested Eagle Supramax 55,989 2009 Crowned Eagle Supramax 55,940 2008 Egret Bulker Supramax 57,809 2010 Fairfield Eagle Ultramax 63,301 2013 Gannet Bulker Supramax 57,809 2010 Greenwich Eagle Ultramax 63,301 2013 Golden Eagle Supramax 55,989 2010 Goldeneye Supramax 52,421 2002 Grebe Bulker Supramax 57,809 2010 Groton Eagle Ultramax 63,200 2013 Hawk I Supramax 50,296 2001 Ibis Bulker Supramax 57,775 2010 Imperial Eagle Supramax 55,989 2010 Jaeger Supramax 52,248 2004 Jay Supramax 57,802 2010 Kestrel I Supramax 50,326 2004 Kingfisher Supramax 57,776 20109Madison Eagle Ultramax 63,303 2013 Martin Supramax 57,809 2010 Merlin Supramax 50,296 2001 Mystic Eagle Ultramax 63,301 2013 Nighthawk Supramax 57,809 2011 Oriole Supramax 57,809 2011 Osprey I Supramax 50,206 2002 Owl Supramax 57,809 2011 Petrel Bulker Supramax 57,809 2011 Puffin Bulker Supramax 57,809 2011 Roadrunner Bulker Supramax 57,809 2011 Rowayton Eagle Ultramax 63,301 2013 Sandpiper Bulker Supramax 57,809 2011 Singapore Eagle Ultramax 61,530 2017 Shrike Supramax 53,343 2003 Skua Supramax 53,350 2003 Southport Eagle Ultramax 63,301 2013 Stamford Eagle Ultramax 61,530 2016 Stellar Eagle Supramax 55,989 2009 Stonington Eagle Ultramax 63,301 2012 Tern Supramax 50,200 2003 Thrasher Supramax 53,360 2010 Thrush Supramax 53,297 2011 Westport Eagle Ultramax 63,344 2015 10Nature of Business The following table represents various potential employment arrangements for our vessels. VoyageCharter TimeCharter IndexCharter CommercialPoolTypical contract lengthSinglevoyage One ormultiplevoyages Sixmonthsor more VariesHire rate basis (1)Per MTof cargoloaded Daily Linked toBSI VariesVoyage expenses (2)We pay Customerpays Customerpays Pool paysVessel expenses for owned vessels(3)We pay We pay We pay We payCharter hire expense for vesselschartered-inWe pay We pay We pay We payOff-hire (4)Customerdoes notpay Customerdoes notpay Customerdoes notpay Pool doesnot pay (1)“Hire rate” refers to a sum of money paid to the vessel owner by a charterer under a time charter party for the use of a vessel. "Freight rate basis"means the sum of money paid to the vessel owner under a voyage charter or contract of affreightment based on the unit measurement of cargoloaded. “BSI” refers to “Baltic Supramax Index” and the daily hire rate varies based on the Index. The BSI is an index published by the BalticExchange which tracks the gross time charter value for a specific 52,000 dwt vessel.(2)“Voyage expenses” include fuel, port charges, canal tolls, and brokerage commissions paid by the Company.(3)“Vessel expenses” include crewing, repairs and maintenance, insurance, stores, lubes and communication expenses.(4)“Off-hire” refers to the time a vessel is unavailable to perform the service either due to scheduled or unscheduled repairs.The Company employs its fleet opportunistically in an effort to attain maximum cash flows. The Company is entering into a higher percentage ofvoyage charters than in previous years and developing contractual relationships directly with cargo interests. These relationships and the related cargocontracts have the dual benefit of providing greater operational efficiencies and act as a balance to the Company’s naturally long position to the market.Notwithstanding the focus on voyage chartering, the Company consistently monitors the dry bulk shipping market and, based on market conditions, willconsider entering into long-term time charters when appropriate.The following summary represents the number of our vessels performing the various types of employments as of December 31, 2017, 2016 and 2015. December 31, 2017 December 31, 2016 December 31, 2015Time Charter 27 23 32Voyage Charter 18 17 9Index Charter — — —Commercial Pool — 1 1Unemployed/ Drydock 2 1 3 Total 47 42 45 We have established our own in-house technical management capability, through which we provide technical management services to all of ourvessels.11 In connection with the charters of each of our vessels, unaffiliated third-party ship brokers earn commissions ranging from 1.25% to 5.00% of thetotal daily charter hire rate of each charter with the commission rate depending on the number of brokers involved with arranging the relevant charter. Our vessels operate worldwide within the trading limits imposed by governmental economic sanctions regimes and insurance terms and do notoperate in countries or territories that are subject to United States, EU, UK or United Nations (the “UN”) comprehensive country-wide or territory-widesanctions.Our Customers Our customers include the world's leading agricultural, mining, manufacturing and trading companies. Our assessment of customers’ financialcondition and reliability is an important factor in negotiating employment for our vessels. We aim to charter our vessels to major trading houses (includingcommodities traders), publicly traded companies, reputable vessel owners and operators, major producers and government-owned entities rather than to morespeculative or undercapitalized entities. We evaluate the counterparty risk of potential customers based on our management's experience in the shippingindustry combined with the additional input of two independent credit risk consultants. In 2017 and 2016, we did not have any customer who accounted formore than 10% of our time and voyage charter revenue. In 2015, the Navig8 pool (the “Navig8 Pool”) accounted for approximately 17.2% of our time andvoyage charter revenue. Operations There are two central aspects to the operation of our fleet: •Commercial operations, which involve chartering and operating a vessel; and•Technical operations, which involve maintaining, crewing and repairing a vesselWe carry out the commercial, technical and strategic management of our fleet through our indirectly wholly-owned subsidiaries, Eagle BulkManagement LLC, a Marshall Islands limited liability company which maintains its principal executive offices in Stamford, Connecticut. We also have twooffices in Singapore and Hamburg, Germany which provide commercial and technical management services for our vessels. Our office staff, either directly orthrough these subsidiaries, provides the following services:•Commercial operations and technical supervision;•Vessel maintenance and repair;•Vessel acquisition;•Legal, compliance and insurance services and•Financial accounting and information technology services. We currently have an aggregate of approximately 83 shore-based personnel in our principal executive office in Stamford, Connecticut, as well asour offices in Hamburg and Singapore. Each of the Company’s vessels serve the same type of customer, have similar operation and maintenance requirements, operate in the sameregulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportablesegment which is engaged in the ocean transportation of dry bulk cargoes worldwide through the ownership and operation of dry bulk carrier vessels. TheCompany’s vessels regularly navigate in international waters, over hundreds of trade routes, to hundreds of ports and, as a result, the disclosure of geographicinformation is impracticable. Commercial and Strategic Management We perform the commercial and strategic management of our fleet including obtaining employment for our vessels and maintaining relationshipswith the charterers of our vessels. We have three offices across the globe including Hamburg, Singapore and Stamford and we effectively have twenty-fourhour global market coverage. We believe that due to our management team’s experience in operating dry bulk vessels, we have access to a broad range ofcharterers and can employ our fleet efficiently in a diverse market conditions and achieve high utilization rates. Being an active owner-operator means effectively seeking to operate our own vessels when possible, as compared with time chartering them to otheroperators, all with a view toward achieving higher-than-market net charter hire income.12In doing so, we believe we can take advantage of rapidly changing market conditions and obtain better operational efficiencies from our fleet. In addition, weconstantly look to arbitrage cargo and vessels positions by taking in additional vessels on time charter, and/or reletting cargo commitments on a voyagebasis. We also constantly monitor the dry bulk shipping market, and opportunistically time-charter vessels in for a period of time, where we typically obtainsome optionality on the duration of the period. We also buy and sell freight forward agreements (“FFAs”) contracts and bunker swaps to hedge exposure ofphysical commitments in order to mitigate market risk.Under a voyage charter, the owner of a vessel provides the vessel for the transport of goods between specific ports in return for the payment of anagreed-upon freight per ton of cargo or, alternatively, a specified total amount. All operating costs, including fuel costs and port charges are borne by theowner of the vessel. A single voyage charter is often referred to as a “spot charter,” which generally lasts from two to ten weeks. Operating vessels in the spotmarket may afford greater opportunity to capitalize on fluctuations in the spot market; when vessel demand is high we earn higher rates, but when demand islow our rates are lower and potentially insufficient to cover costs. Spot market rates are volatile and are affected by world economics, international events,weather conditions, strikes, governmental policies, supply and demand, and other factors beyond our control. If the markets are especially weak for protractedperiods, there is a risk that vessels in the spot market may spend idle time waiting for business, or in extreme cases may temporarily be "laid up".•Identifying, purchasing, and selling vessels. We believe that our commercial management team's longstanding relationships in the dry bulkindustry, provides us access to an extensive network of ship brokers and vessel owners that we believe will provide us with an advantage in futuretransactions.•Obtaining insurance coverage for our vessels. We have established in-house legal, compliance and marine insurance capabilities with long standingrelationships with highly rated marine insurance underwriters in all of the major marine insurance markets around the world and we believe theserelationships allow us to access marine insurance at competitive rates. Technical Management We have established in-house technical management capabilities, through which we provide technical management services to all of our vessels. OnAugust 24, 2015, we provided three months’ notice to V. Ships Limited to terminate the technical management contract, and, during the first quarter of 2016,we completed the transfer of all the vessels to in-house technical management. Technical management includes managing day-to-day vessel operations, performing general vessel maintenance, ensuring regulatory andclassification society compliance, supervising the maintenance and general efficiency of vessels, arranging the hire of qualified officers and crew, arrangingand supervising drydocking and repairs, purchasing supplies, spare parts, lubricants, and new equipment for vessels, appointing supervisors and technicalconsultants and providing technical support. We currently crew our vessels primarily with officers and seamen from Ukraine, Russia, and Eastern European countries who are hired through ourthird-party crew managers. As of December 31, 2017, we employed approximately 941 officers and seamen on the 47 vessels in our operating fleet. Wecurrently use three external crew managers. The crew manager recruits seamen with the appropriate training, licenses and experience for our vessels. On boardour ships, our seafaring employees perform most operational and maintenance work and assist in supervising work during cargo operations and at drydockfacilities. We often man our vessels with more crew members than are required by the vessel's flag safe manning requirement in order to allow for theperformance of routine maintenance duties. All of our crew members are subject to and are paid commensurate with international collective bargainingagreements and, therefore, we do not anticipate any labor disruptions. The international collective bargaining agreements, to which we are a party, aretypically renewed for a two year term. Permits, Authorizations and Regulations We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to ourvessels. The kinds of permits, licenses and certificates required depend upon several factors, including the commodity transported, the waters in which thevessel operates, the nationality of the vessel's crew and the age of a vessel. We expect to be able to obtain all permits, licenses and certificates currentlyrequired to permit our vessels to operate. Additional laws and regulations, environmental or otherwise, may be adopted which increase the cost of us doingbusiness. 13Our vessels operate worldwide within the trading limits imposed by our insurance terms and do not operate in countries or territories that aresubject to United States, EU, UK or UN comprehensive country-wide or territory wide sanctions. Environmental and Other Regulations Government regulation significantly affects the ownership and operation of our vessels. We are subject to international conventions and treaties,national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health andenvironmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and theremediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significantexpense, including vessel modifications and implementation of certain operating procedures. A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the localport authorities (United States Coast Guard (the “USCG”), harbor master or port state control authorities), classification societies; flag state administrations(country of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses and certificates for theoperation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or obtain said permits includingpotential delays. We believe that the heightened level of environmental and quality concerns among regulators, charterers and the insurance industry is leading togreater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the dry bulk shipping industry.Increasing environmental concerns have created a demand for vessels that conform to the most up-to-date environmental standards. We are required tomaintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews andcompliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicableenvironmental laws and regulations and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct ofour operations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, we cannot predict theultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. International Maritime Organization The UN’s International Maritime Organization (the “IMO”) has adopted several international conventions, including the International Conventionfor the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto (collectively referred to as MARPOL 73/78 and hereinas “MARPOL”). MARPOL entered into force on October 2, 1983. It has been adopted by over 150 nations, including many of the jurisdictions in which ourvessels operate. MARPOL sets forth pollution-prevention requirements applicable to dry bulk carriers, among other vessels, and is broken into six Annexes,each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried inbulk, in liquid or packaged form, respectively; and Annexes IV and V relate to sewage and garbage management, respectively. Annex VI was separatelyadopted by the IMO in September of 1997, and relates to air emissions. In 2012, the IMO’s Marine Environmental Protection Committee (“MEPC”) adopted by resolution amendments to the International Code for theConstruction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (the “IBC Code”). The provisions of the IBC Code are mandatory underMARPOL and the International Convention for the Safety of Life at Sea, (“SOLAS”). These amendments, which entered into force in June 2014, pertain torevised international certificates of fitness for the carriage of dangerous chemicals in bulk and identifying new commodities that fall under the IBC Code. Wemay need to make certain financial expenditures to comply with these amendments. In 2013, the MEPC adopted by resolution amendments to MARPOL Annex I Conditional Assessment Scheme, or CAS. The amendments, whichbecame effective on October 1, 2014, pertain to the inspections of bulk carriers and tankers after the 2011 ESP Code, which enhances the programs ofinspections, became mandatory. We may need to make certain financial expenditures to comply with these amendments.14Air Emissions In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution (“Annex VI”). Effective May 2005, Annex VI sets limits onnitrogen oxide emissions from ships whose diesel engines were constructed (or underwent major conversions) on or after January 1, 2000. It also prohibits“deliberate emissions” of “ozone depleting substances,” defined to include certain halons and chlorofluorocarbons. “Deliberate emissions” can for exampleinclude discharges occurring in the course of the ship’s repair and maintenance. Emissions of “volatile organic compounds” from certain tankers, and theshipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls (PCBs)) are alsoprohibited. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls ofsulfur emissions known as “Emission Control Areas” (“ECAs”) (see below). MEPC adopted amendments to Annex VI on October 10, 2008, which entered into force on July 1, 2010. The amended Annex VI seeks to furtherreduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. Asof January 1, 2012, the amended Annex VI requires that fuel oil contain no more than 3.50% sulfur. By January 1, 2020, sulfur content must not exceed0.50%, subject to a feasibility review to be completed no later than 2018. On October 27, 2016, following a feasibility review, the IMO announced it willimplement the global sulfur cap. By January 1, 2020, the sulfur content of fuel must not exceed 0.50%. Sulfur content standards are stricter within certain ECAs. As of July 1, 2010, ships operating within an ECA may not use fuel with sulfur content inexcess of 1.0% which was further reduced to 0.10% on January 1, 2015. Amended Annex VI establishes procedures for designating new ECAs. Currently, theBaltic Sea, the North Sea and certain coastal areas of North America have been designated as ECAs. Furthermore as of January 1, 2014 the applicable areas ofthe United States and the Caribbean Sea were designated as ECAs. Ocean-going vessels in these areas will be subject to stringent emissions controls whichmay cause us to incur additional costs to procure compliant fuel and/or install specific equipment . If other ECAs are approved by the IMO or other new ormore stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental ProtectionAgency (the “EPA”), or the states where we operate, compliance with these regulations could entail significant capital expenditures, operational changes, orotherwise increase the costs of our operations. Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date ofinstallation. The EPA promulgated equivalent (and in some senses stricter) emissions standards in late 2009.The IMO continues to review and introduce new regulations. For example, in July 2011, MARPOL adopted amendments for the prevention of airpollution, which designate certain waters near the coasts of Puerto Rico and the U.S. Virgin Islands ECAs for emissions of nitrogen oxides, sulfur oxides, andparticulate matter. The new ECA designation entered into force on January 1, 2014. It is impossible to predict what additional regulations, if any, may bepassed by the IMO and what effect, if any, such regulations might have on our operations. As of January 1, 2010, the Directive 2005/33/EC of the European Parliament and of the Council of July 6, 2005, amending Directive 1999/32/EC, cameinto force. The objective of the directive is to reduce emission of sulfur dioxide and particulate matter caused by the combustion of certain petroleum-derivedfuels. The directive imposes limits on the sulfur content of such fuels as a condition of their use within a Member State territory. The maximum sulfur contentfor marine fuels used by inland waterway vessels and ships at berth in ports in EU countries after January 1, 2010, is 0.10% by mass. As of January 1, 2015, allvessels operating within ECAs worldwide must comply with 0.1% sulfur requirements. Currently, the only grade of fuel meeting 0.1% sulfur contentrequirements is low Sulfur marine gas oil. On July 15, 2011, the European Commission also adopted a proposal for an amendment of Directive 1999/32/ECwhich would align requirements with those imposed by the revised MARPOL Annex VI which introduced stricter sulfur limits. Safety Management System Requirements The IMO also adopted SOLAS, and the International Convention on Load Lines, (the “LL Convention”), which impose a variety of standards thatregulate the design and operational features of ships. The IMO periodically revises the SOLAS and LL Convention standards. May 2012 SOLASamendments entered into force on January 1, 2014. The Convention on Limitation of Liability for Maritime Claims was recently amended and theamendments are expected to go into effect on June 8, 2015. The amendments alter the limits of liability for loss of life or personal injury claim and propertyclaims against ship-owners.15 The operation of our ships is also affected by Chapter IX of SOLAS, which sets forth the IMO's International Management Code for the SafeOperation of Ships and Pollution Prevention, (the “ISM Code”). The ISM Code requires ship owners and bare boat charterers to develop and maintain anextensive Safety Management System (“SMS”) that includes among other things the adoption of a safety and environmental protection policy setting forthinstructions and procedures for safe operation and describing procedures for emergency response. We rely upon the safety management system that we andour technical manager have developed for compliance with the ISM Code. The failure of a ship owner or bareboat charterer to comply with the ISM Codemay subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, ordetention in, certain ports. As of the date of this filing, all of the vessels in our operating fleet are ISM code-certified. The ISM Code requires that vessel operators obtain a safety management certificate, or SMC, for each vessel they operate. This certificate evidencescompliance by a vessel’s operators with the ISM Code requirements for a safety management system, or SMS. No vessel can obtain an SMC under the ISMCode unless its manager has been awarded a document of compliance, or DOC, issued in most instances by the vessel's flag state. Our in-house technicalmanagers have obtained documents of compliance with their offices and safety management certificates for all of our vessels for which the certificates arerequired by the IMO, which certificates are renewed as needed.Pollution Control and Liability Requirements The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of thesignatories to such conventions. For example, the IMO adopted the International Convention for the Control and Management of Ships' Ballast Water andSediments in February 2004 (the “BWM Convention”). The BWM Convention’s implementing regulations called for a phased introduction of mandatoryballast water exchange requirements, to be replaced in time with mandatory concentration limits. On September 8, 2016, the BWM Convention met therequirement to be adopted by 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world's merchantshipping, becoming effective 12 months later on September 8, 2017. Many of the implementation dates originally written in the BWM Convention havealready passed, so that once the BWM Convention enters into force, the period for installation of mandatory ballast water exchange requirements would beextremely short, with several thousand ships a year needing to install ballast water management systems (“BWMS”). For this reason, on December 4, 2013,the IMO Assembly passed a resolution revising the implementation dates of the BWM Convention so that they are triggered by the entry into force date andnot the dates originally in the BWM Convention. This in effect makes all vessels constructed before the entry into force date “existing’ vessels and allows forthe installation of a BWMS on such vessels at the first renewal survey following entry into force. The mid-ocean ballast exchange or ballast water treatmentrequirements became mandatory. The cost of compliance could increase for ocean carriers. Although we do not believe that the costs of such compliancewould be material, it is difficult to predict the overall impact of such a requirement on our operations. On March 23, 2012, the USCG issued amendedregulations relating to ballast water management for vessels operating in U.S. waters.Under relevant U.S. federal laws (the "BWMS Law"), USCG approved BWMS will be required to be installed in all vessels at the first out of waterdrydocking after January 1, 2016 if these vessels are to discharge ballast water inside 12 nautical miles of the coast of the United States. An AlternativeManagement System (“AMS”) may be installed in lieu of a USCG approved BWMS. An AMS is valid for five years from the date of required compliance withballast water discharge standards, by which time it must be replaced by an approved system unless the AMS itself achieves approval.The BWMS Law allows the USCG to grant compliance date extensions to an owner/operator who has documented, despite all efforts, that timelycompliance with one of the approved BWMS is not possible. The Company has requested and the USCG has granted extensions for our vessels with 2016,2017, and 2018 drydocking deadlines, including the relevant Greenship Vessels. The USCG extensions enable us to defer installation on all of our vesselsbetween 2019 and through 2022. The Company estimates the average cost of the systems including installation expenses to be $0.8 million for eachSupramax/Ultramax vessel. The IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”) to impose strictliability on ship owners for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requiresregistered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicablenational or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability forMaritime Claims of 1976, as amended). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in ship’s bunkers typically isdetermined by the national or other domestic laws in the jurisdiction where the events or damages occur. Our ships carry insurance in excess of the statutoryrequirements.16 In March 2006, the IMO amended Annex I to MARPOL, including a regulation relating to oil fuel tank protection, which became effective August 1,2007. The regulation applies to various ships delivered on or after August 1, 2010. The requirements it contains address issues such as fuel tanks, protectedlocation accidental oil fuel outflow performance standards, a tank capacity limit and certain other maintenance, inspection and engineering standards. IMO regulations also require owners and operators of certain vessels to adopt Ship Oil Pollution Emergency Plans. Periodic training and drills forresponse personnel and for vessels and their crews are required. Anti-Fouling Requirements In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-fouling Systems on Ships, (the "Anti-FoulingConvention"). The Anti-Fouling Convention prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life tothe hulls of vessels. Vessels of over 400 gross tons engaged in international voyages are required to undergo an initial survey before the vessel is put intoservice or before an International Anti-Fouling System Certificate is issued for the first time; and subsequent surveys when the anti-fouling systems arealtered or replaced. We have obtained Anti-Fouling System Certificates for all of our vessels that are subject to the Anti-Fouling Convention. Compliance Enforcement The flag state, as defined by the UN Convention on the Law of the Sea, is responsible for implementing and enforcing a broad range of internationalmaritime regulations with respect to all ships granted the right to fly its flag. The “Shipping Industry Guidelines on Flag State Performance” evaluates andreports on flag states based on factors such as sufficiency of infrastructure, ratification, implementation, and enforcement of principal international maritimetreaties, supervision of statutory ship surveys, casualty investigations, and participation at IMO and International Labor Organization (“ILO”) meetings. Ourvessels are flagged in the Marshall Islands. Marshall Islands-flagged vessels have historically received a good assessment in the shipping industry. Werecognize the importance of a credible flag state and do not intend to use flags of convenience or flag states with poor performance indicators.Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, lead todecreases in available insurance coverage for affected vessels or result in the denial of access to, or detention in, some ports. As of the date of this report, eachof our vessels is ISM Code certified and it is our intent to maintain ISM code certification. However, there can be no assurance that such certificates will bemaintained in the future. The IMO continues to introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and whateffect, if any, such regulations may have on our operations. The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act The U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of theenvironment from oil spills. OPA affects all “owners and operators” whose vessels trade with the United States, its territories and possessions or whose vesselsoperate in United States waters, which includes the United States’ territorial sea and its 200 nautical mile exclusive economic zone around the UnitedStates. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which applies to thedischarge of hazardous substances other than oil, except in limited circumstances whether on land or at sea. OPA and CERCLA both define “owner andoperator” “in the case of a vessel, as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations. Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from theact or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threateneddischarges of oil from their vessels. OPA defines these other damages broadly to include: •Injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;•Injury to, or economic losses resulting from, the destruction of real and personal property;•Net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;•Loss of subsistence use of natural resources that are injured, destroyed, or lost;17•Lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and•Net cost of increased of additional public services necessitated by removal activities following a discharge of oil such as protection from fire, safetyor health hazards, and loss of subsistence use of natural resources.OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective July 31, 2009, the USCG adjustedthe limits of OPA liability for non-tank vessels (e.g. dry bulk) to the greater of $1,000 per gross ton or $854,400 (subject to periodic adjustment forinflation). These limits of liability may not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction oroperating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party’s grossnegligence or willful misconduct. The limitation on liability similarly may not apply if the responsible party fails or refuses to (i) report the incident wherethe responsibility party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removalactivities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on theHigh Seas Act. CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well asdamage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments orhealth effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or anact of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo orresidue and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the totalcost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or gross negligence, or the primarycause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply ifthe responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where thevessel is subject to OPA. OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law.OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibilitysufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy theirfinancial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We have complied with theregulations by providing a certificate of responsibility from third party entities that are acceptable to the USCG. We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from acatastrophic spill were to exceed our insurance coverages, it could have an adverse effect on our business and results of operation. OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within theirboundaries, provided they accept, at a minimum, the levels of liability established under OPA and some states have enacted legislation providing forunlimited liability for oil spills. In some cases, states which have enacted such legislation have not yet issued implementing regulations defining vesselowners’ responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call. We believe that we arein substantial compliance with all applicable existing state requirements. In addition, we intend to comply with all future applicable state regulations in theports where our vessels call. Other Environmental Initiatives The U.S. Clean Water Act (the “CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unlessauthorized by a duly-issued permit or exemption and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposessubstantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. Furthermore, manyU.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damagesresulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law. The EPA has enacted rules requiring a permit regulating ballast water discharges and other discharges incidental to the normal operation of certainvessels within United States waters under the Vessel General Permit for Discharges Incidental18to the Normal Operation of Vessels (“the VGP”). For a new vessel delivered to an owner or operator after September 19, 2009 to be covered by the VGP, theowner must submit a Notice of Intent (“NOI”) at least 30 days before the vessel operates in United States waters. On March 28, 2013, the EPA re-issued theVGP for another five years; this 2013 VGP took effect December 19, 2013. The 2013 VGP contains numeric ballast water discharge limits for most vessels toreduce the risk of invasive species in US waters, more stringent requirements for exhaust gas scrubbers and the use of environmentally acceptable lubricants.We have submitted NOIs for our vessels where required and do not believe that the costs associated with obtaining and complying with the VGP may have amaterial impact on our operations. In addition, under Section 401 of the CWA, the VGP must be certified by the state where the discharge is to take place. Certain states have enactedadditional discharge standards as conditions to their certification of the VGP. These local standards bring the VGP into compliance with more stringent staterequirements, such as those further restricting ballast water discharges and preventing the introduction of non-indigenous species considered to be invasive.The VGP and its state-specific regulations and any similar restrictions enacted in the future may increase the costs of operating in the relevant waters. The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (the “CAA”) requires the EPA to promulgate standards applicable toemissions of volatile organic compounds and other air contaminants. The CAA also requires states to draft State Implementation Plans (“SIPs”) designed toattain national health-based air quality standards in each state. Although state-specific, SIPs may include regulations concerning emissions resulting fromvessel loading and unloading operations by requiring the installation of vapor control equipment. As referenced above, the amended Annex VI to the IMO's MARPOL Convention, which addresses air pollution from ships, was ratified by the UnitedStates on October 8, 2008 and entered into force on January 1, 2010. The EPA and the state of California, however, have each proposed more stringentregulations of air emissions from ocean-going vessels. On July 24, 2008, the California Air Resources Board of the State of California (“CARB”), approvedclean-fuel regulations applicable to all vessels sailing within 24 miles of the California coastline. The new CARB regulations require such vessels to use lowsulfur marine fuels rather than bunker fuel. As of July 1, 2009, such vessels were required to switch either to marine gas oil with a sulfur content of no morethan 1.5% or marine diesel oil with a sulfur content of no more than 0.5%. As of August 1, 2012, only marine gas oil with a sulfur content of no more than 1%or marine diesel oil with a sulfur content of no more than 0.5% is allowed. As of January 1, 2014, only marine gas oil and marine diesel oil fuels with 0.1%sulfur is allowed. These new regulations may increase our operating costs for port calls in California. Our operations occasionally generate and require the transportation, treatment and disposal of both hazardous and non-hazardous solid wastes thatare subject to the requirements of the U.S. Resource Conservation and Recovery Act (“RCRA,”) or comparable state, local or foreign requirements. TheRCRA imposes significant record keeping and reporting requirements on transporters of hazardous waste. In addition, from time to time we arrange for thedisposal of hazardous waste or hazardous substances at off-site disposal facilities. If such materials are improperly disposed of by third parties, we may still beheld liable for cleanup costs under applicable laws. In October 2009, the EU amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minordischarges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of thequality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. Member States were required to enact lawsor regulations to comply with the directive by the end of 2010. Criminal liability for pollution may result in substantial penalties or fines and increased civilliability claims. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or thesafety of the ship is in danger. Greenhouse Gas Regulation Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the UN Framework Convention onClimate Change, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reducegreenhouse gas emissions. As of January 1, 2013, all new ships must comply with two new sets of mandatory requirements, which were adopted by MEPC inJuly 2011, to address greenhouse gas emissions from ships. Currently operating ships will be required to develop Ship Energy Efficient Management Plans,and minimum energy efficiency levels per capacity mile will apply to new ships, as defined by the Energy Efficiency Design Index .These requirements couldcause us to incur additional compliance costs. The IMO is also planning to implement market-based mechanisms to reduce greenhouse gas emissions fromships at an upcoming MEPC session. The European Parliament and Council of Ministers are expected to endorse regulations that would require monitoringand reporting of greenhouse gas emissions from marine vessels in 2015. In the United States, the EPA adopted regulations to limit greenhouse gas emissionsfrom certain mobile sources and large stationary sources. The EPA enforces both the CAA and the international standards19found in Annex VI of MARPOL concerning marine diesel emissions, and the sulfur content found in marine fuel. Any passage of climate control legislationor other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed theKyoto Protocol, that restrict emissions of greenhouse gases could require us to make significant financial expenditures, including capital expenditures toupgrade our vessels, the cost of which we cannot predict with certainty at this time. International Labor Organization The International Labor Organization ("ILO") is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO has adopted theMaritime Labor Convention 2006 (the “MLC 2006”). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance will be required toensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. All of our vessels are compliant with the MLC 2006 and weintend to maintain them accordingly.Vessel Security Regulations Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel securitysuch as the Maritime Transportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, in July 2003, the USCG issued regulationsrequiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Theregulations also impose requirements on certain ports and facilities, some of which are regulated by the EPA. We have implemented measures to comply withthe requirements when calling at U.S. ports. Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The newChapter V became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, and mandates compliance withthe International Ship and Port Facilities Security Code (“ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships againstterrorism. Amendments to SOLAS Chapter VII, made mandatory in 2004, apply to vessels transporting dangerous goods and require those vessels be incompliance with the International Maritime Dangerous Goods Code. To trade internationally, a vessel must attain an International Ship Security Certificate(“ISSC”) from a recognized security organization approved by the vessel’s flag state. Among the various requirements are:•On-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information fromamong similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status;•On board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development ofvessel security plans;•Ship identification number to be permanently marked on a vessel’s hull;•A continuous synopsis record kept onboard showing a vessel’s history including the name of the ship, the state whose flag the ship is entitled to fly,the date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of theregistered owner(s) and their registered address; and•Compliance with flag state security certification requirements. Ships operating without a valid certificate may be detained at port until it obtains an ISSC, or it may be expelled from port, or refused entry at port. Furthermore, additional security measures could be required in the future which could have a significant financial impact on us. The USCGregulations, intended to be aligned with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, providedsuch vessels have on board a valid ISSC that attests to the vessel's compliance with SOLAS security requirements and the ISPS Code. Our vessels have validISSC and it is our intent to maintain such certificates. We have implemented the various security measures addressed by the MTSA, SOLAS and the ISPSCode. Financial Regulations Our business operations in countries outside the U.S. are subject to a number of laws and regulations, including restrictions imposed by the U.S.Foreign Corrupt Practices Act (“FCPA”), as well as economic sanctions and trade embargoes administered by OFAC. The FCPA prohibits bribery of foreignofficials and requires us to keep books and records that accurately20and fairly reflect our transactions. OFAC administers and enforces economic sanctions and trade embargoes based on U.S. foreign policy and nationalsecurity goals against targeted foreign states, organizations and individuals. In November 2015, the Company filed a voluntary self-disclosure report with OFAC regarding certain apparent violations of U.S. sanctionsregulations in the provision of shipping services for third party charterers with respect to the transportation of cargo to or from Myanmar (formerly Burma). Atthe time of such apparent violations, the Company had a different senior operational management team. Notwithstanding the fact that the apparent violationstook place under a different senior operational management team and although the Company’s new board and management have implemented robustremedial measures and significantly enhanced its compliance safeguards there can be no assurance that OFAC will not conclude that these past actionswarrant the imposition of civil penalties and/or referral for further investigation by the U.S. Department of Justice. The report was provided to OFAC for theagency’s review, consideration and determination regarding what action, if any, may be taken in resolution of this matter. The Company will continue tocooperate with the agency regarding this matter and cannot estimate when such review will be concluded. While the ultimate impact of these matters cannotbe determined, there can be no assurance that the impact will not be material to the Company’s financial condition or results of operations. See “Note 10.Commitments and Contingencies – Legal Proceedings” to the consolidated financial statements. Inspection by Classification Societies Every oceangoing vessel must be inspected and certified by a classification society. The classification society certifies that the vessel is "in class,"signifying that the vessel has been built and maintained in accordance with the rules of the classification society and complies with applicable rules andregulations of the vessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required byinternational conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by officialorder, acting on behalf of the authorities concerned.The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state.These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned. For maintenance of the class certification, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any specialequipment classed are required to be performed as follows: Annual Surveys. For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and whereapplicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicatedin the certificate. Intermediate Surveys. Extended annual surveys are referred to as intermediate surveys and typically are conducted two and one-half years aftercommissioning and each class renewal. Intermediate surveys are to be carried out at or between the second or third annual survey. Class Renewal Surveys. Class renewal surveys, also known as special surveys, are carried out for the ship’s hull, machinery, including the electricalplant and for any special equipment classed, at the intervals indicated by the character of classification for the hull. At the special survey the vessel isthoroughly examined, including audio-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than classrequirements, the classification society would prescribe steel renewals. The classification society may grant a one year grace period for completion of thespecial survey. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear andtear. In lieu of the special survey approximately every five years, depending on whether a grace period was granted, a ship owner has the option of arrangingwith the classification society for the vessel’s hull or machinery to be on a continuous survey cycle, in which every part of the vessel would be surveyedwithin a five year cycle. At an owner’s application, the surveys required for class renewal may be split according to an agreed schedule to extend over theentire period of class. This process is referred to as continuous class renewal. All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervalsbetween surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years. Most vessels are also drydocked every 30 to 60 months for inspection of the underwater parts and for repairs related to inspections. If any defects arefound, the classification surveyor will issue a "recommendation" which must be rectified by the ship owner within prescribed time limits.21 Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as “in class” by a classification society which is amember of the International Association of Classification Societies (the “IACS”). In December 2013, the IACS adopted new harmonized Common StructureRules, which apply to bulk carriers constructed on or after July 1, 2015. All our vessels that we have purchased and may agree to purchase in the future mustbe certified as being “in class” prior to their delivery under our standard purchase contracts and memorandum of agreement. If the vessel is not class certifiedon the date of closing, we have no obligation to take delivery of the vessel. We have all of our vessels and intend to have all vessels that we acquire in thefuture, classed by IACS members. Risk of Loss and Liability Insurance General The operation of any dry bulk vessel includes risks such as mechanical failure, collision, property loss, cargo loss or damage and businessinterruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of a marinecasualty, including oil spills (e.g. fuel oil) and other environmental mishaps, and the liabilities arising from owning and operating vessels in internationaltrade. OPA, which imposes liability upon owners, operators and demise charterers of vessels trading in the United States exclusive economic zone for certainoil pollution accidents in the United States, has made liability insurance more expensive for ship owners and operators trading in the U.S. market. While we maintain hull and machinery insurance, war risks insurance, protection and indemnity cover and freight, demurrage and defense cover forour operating fleet in amounts that we believe to be prudent to cover normal risks in our operations, we may not be able to achieve or maintain this level ofcoverage throughout a vessel's useful life. Furthermore, while we believe that our current insurance coverage is adequate, not all risks can be insured, andthere can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.Hull & Machinery and War Risks Insurance We maintain marine hull and machinery, war risks insurances, which cover the risk of damage or actual or constructive total loss for all of ourvessels. Our vessels are each covered up to at least their fair market value with a deductible of $100,000 per vessel per incident. Protection and Indemnity Insurance Coverage Protection and indemnity coverage is a form of mutual indemnity insurance provided by protection and indemnity associations (“P&IAssociations”), which insure our third-party liabilities in connection with our shipping activities. This includes third-party liability and other relatedexpenses resulting from the injury, illness or death of crew, passengers and other third parties, the loss or damage to cargo, claims arising from collisions withother vessels, damage to other third-party property, pollution, and towing and other related costs, including wreck removal. The coverage " Subject to the"capping" discussed below, our coverage, except for pollution, is unlimited. Our current protection and indemnity insurance coverage for pollution is $1billion per vessel per incident. The 13 P&I Associations that comprisethe International Group of P & I Association, insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement toreinsure each association’s liabilities. As a member of a P&I Association which is a member of the International Group, we are subject to calls payable to theassociations based on the Company's claim records as well as the claim records of all other members of the individual associations and members of the pool ofP&I Associations comprising the International Group. Competition We compete with a large number of international dry bulk owners. The international shipping industry is highly competitive and fragmented withmany market participants with no single ship owner accounting for more than 5% of tonnage shipped in 2017. As of December 31, 2017, there wereapproximately 11,116 dry bulk carriers aggregating approximately 817 million dwt. We compete with other (primarily private) owners of dry bulk vessels inthe Supramax/Ultramax as well as Handy, Handymax and Panamax asset classes. Competition in the shipping industry varies according to the nature of the contractual relationship as well as the kind of commodity being shipped.Our business will fluctuate in line with the main patterns of trade of dry bulk cargoes and varies22according to changes in the supply and demand for these items. Competition in virtually all bulk trades is intense and based primarily on supply of ships anddemand for our ocean transportation services. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well ason our reputation as an owner and operator. Increasingly, major customers are demonstrating a preference for modern vessels based on concerns about theenvironmental and operational risks associated with older vessels. Consequently, owners of large modern fleets have gained a competitive advantage overowners of older fleets. Seasonality Demand for vessel capacity has historically exhibited seasonal variations and, as a result, fluctuations in charter rates. This seasonality may resultin quarter-to-quarter volatility in our operating results for our vessels trading in the spot market. The dry bulk market is typically stronger in the fall (due toboth increased North American grain shipments and higher coal purchases for heating fuel ahead of the cold winter months) and spring (due to increasedSouth American grain shipments). In addition, unpredictable weather patterns may disrupt vessel scheduling and supplies of certain commodities. To theextent that we must enter into a new charter or renew an existing charter for a vessel in our fleet during a time when seasonal variations have reducedprevailing charter rates, our operating results may be adversely affected. Value of Assets and Cash Requirements The replacement costs of comparable new vessels may be above or below the book value of our fleet. The market value of our fleet may be belowbook value when market conditions are weak and exceed book value when markets are strong. In common with other ship owners, we may consider assetredeployment which at times may include the sale of vessels at less than their book value.The Company's results of operations and cash flows may be significantly affected by future charter and COA markets. Exchange Controls Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictionsthat affect the remittance of dividends, interest or other payments to non-resident holders of our common stock. Tax Considerations The following is a discussion of the material Marshall Islands and United States federal income tax considerations relevant to owning common stockby a United States Holder or a Non-United States Holder, each as defined below. This discussion does not purport to deal with the tax consequences ofowning the common stock to all categories of investors, some of which (such as financial institutions, regulated investment companies, real estate investmenttrusts, tax-exempt organizations, insurance companies, persons holding our common stock as part of a hedging, integrated, conversion or constructive saletransaction or a straddle, traders in securities that have elected the mark-to-market method of accounting for their securities, persons liable for alternativeminimum tax, persons who are investors in pass-through entities, dealers in securities or currencies, persons who own 10% or more of our common stock andinvestors whose functional currency is not the United States dollar) may be subject to special rules. This discussion deals only with holders who own thecommon stock as a capital asset. Shareholders are encouraged to consult their own tax advisors concerning the overall tax consequences arising in their ownparticular situation under United States federal, state, local or foreign law of the ownership of our common stock. Marshall Islands Tax Considerations In the opinion of Seward & Kissel LLP, the following are the material Marshall Islands tax consequences of our activities to us and shareholders ofour common stock. We are incorporated in the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, andno Marshall Islands withholding tax will be imposed upon payments of dividends by us to our shareholders. United States Federal Income Tax Considerations In the opinion of Seward & Kissel LLP, our United States tax counsel, the following are the material United States federal income tax consequencesto us of our activities and to United States Holders and to Non-United States Holders of our23common stock. The following discussion of United States federal income tax matters is based on the Internal Revenue Code of 1986, as amended, or theCode, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the United States Department of the Treasury, allof which are subject to change, possibly with retroactive effect. In addition, the discussion below is based, in part, on the description of our business asdescribed in “Item 1. Business” in this Annual Report and assumes that we conduct our business as described in that section. We have made, or will make, special United States federal income tax elections in respect of each of our ship owning or operating subsidiaries that ispotentially subject to tax as a result of deriving income attributable to the transportation of cargoes to or from the United States. The effect of the special U.S.tax elections is to ignore or disregard the subsidiaries for which elections have been made as separate taxable entities and to treat them as part of their parent,the ''Company.'' Therefore, for purposes of the following discussion, the Company, and not the subsidiaries subject to this special election, will be treated asthe owner and operator of the vessels and as receiving the income therefrom. United States Federal Income Taxation of Our Company Taxation of Operating Income: In General The Company currently earns, and anticipates that it will continue to earn, substantially all its income from the hiring or leasing of vessels for use ona time or voyage charter basis or from the performance of services directly related to those uses, all of which we refer to as ''shipping income.''Unless exempt from United States federal income taxation under the rules of Section 883 of the Code (“Section 883”), as discussed below, a foreigncorporation such as ourselves will be subject to United States federal income taxation on its ''shipping income'' that is treated as derived from sources withinthe United States, to which we refer as ''United States source shipping income.'' For tax purposes, ''United States source shipping income'' includes 50% ofshipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States. Shipping income attributable to transportation exclusively between non-United States ports will be considered to be 100% derived from sourcesoutside the United States. Shipping income derived from sources outside the United States will not be subject to any United States federal income tax. Shipping income attributable to transportation exclusively between United States ports is considered to be 100% derived from United Statessources. However, the Company is not permitted by United States law to engage in the transportation of cargoes that produces 100% United States sourceincome. Unless exempt from tax under Section 883, the Company's gross United States source shipping income would be subject to a 4% tax imposedwithout allowance for deductions as described below. Exemption of Operating Income from United States Federal Income Taxation Under Section 883 and the regulations thereunder, a foreign corporation will be exempt from United States federal income taxation on its UnitedStates source shipping income if:•it is organized in a qualified foreign country, which is one that grants an ''equivalent exemption'' from tax to corporations organized in the UnitedStates in respect of each category of shipping income for which exemption is being claimed under Section 883 and to which we refer as the ''Countryof Organization Test''; and•one of the following tests is met:◦more than 50% of the value of its shares is beneficially owned, directly or indirectly, by qualified shareholders, which as defined includesindividuals who are ''residents'' of a qualified foreign country, to which we refer as the ''50% Ownership Test'';◦subject to an exception for closely-held corporations, its shares are ''primarily and regularly traded on an established securities market'' in aqualified foreign country or in the United States, to which we refer as the "Publicly-Traded Test"; or◦it is a ''controlled foreign corporation'' and satisfies an ownership test, to which, collectively, we refer to as the ''CFC Test.''24The Republic of the Marshall Islands, the jurisdiction where the Company is incorporated, has been officially recognized by the United StatesInternal Revenue Service (the “IRS”) as a qualified foreign country that grants the requisite ''equivalent exemption'' from tax in respect of each category ofshipping income the Company earns and currently expects to earn in the future. Therefore, the Company will be exempt from United States federal incometaxation with respect to its United States source shipping income if it satisfies any one of the 50% Ownership Test, the Publicly-Traded Test, or the CFC Test. For its 2017 taxable year, we believe that we satisfy the Publicly-Traded Test, as discussed in more detail below. The Company does not currentlyanticipate a circumstance under which it would be able to satisfy the 50% Ownership Test or the CFC Test.Publicly-Traded Test The regulations under Section 883 provide, in pertinent part, that shares of a foreign corporation will be considered to be ''primarily traded'' on anestablished securities market in a country if the number of shares of each class of shares that are traded during any taxable year on all established securitiesmarkets in that country exceeds the number of shares in each such class that are traded during that year on established securities markets in any other singlecountry. The Company's common stock, which is its sole class of issued and outstanding shares, are ''primarily traded'' on the Nasdaq Global Select Market. Under the regulations, the Company's common stock will be considered to be ''regularly traded'' on an established securities market if one or moreclasses of its shares representing more than 50% of its outstanding shares, by both total combined voting power of all classes of shares entitled to vote andtotal value, are listed on such market, to which we refer as the ''listing threshold.'' Since our common stock, which is our sole class of issued and outstandingshares, is listed on the Nasdaq Global Select Market, we believe that we satisfy the listing threshold. It is further required that with respect to each class of shares relied upon to meet the listing threshold, (i) such class of shares is traded on the market,other than in minimal quantities, on at least 60 days during the taxable year or one-sixth of the days in a short taxable year; and (ii) the aggregate number ofshares of such class of shares traded on such market during the taxable year is at least 10% of the average number of shares of such class of shares outstandingduring such year or as appropriately adjusted in the case of a short taxable year. We believe the Company will satisfy the trading frequency and tradingvolume tests. Even if this were not the case, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied if, as is thecase with the Company's common stock, such class of shares is traded on an established market in the United States and such shares are regularly quoted bydealers making a market in such shares. Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of shares will not be considered to be ''regularly traded'' on anestablished securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually orconstructively under specified share attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the voteand value of such class of outstanding shares, to which we refer as the ''5 Percent Override Rule.'' For purposes of being able to determine the persons who actually or constructively own 5% or more of the vote and value of the Company'scommon stock, or 5% Shareholders, the regulations permit the Company to rely on those persons that are identified on Schedule 13G and Schedule 13Dfilings with the SEC, as owning 5% or more of the Company's common stock. The regulations further provide that an investment company which is registeredunder the Investment Company Act of 1940, as amended, will not be treated as a 5% Shareholder for such purposes. In the event the 5 Percent Override Rule is triggered, the regulations provide that the 5 Percent Override Rule will nevertheless not apply if theCompany can establish that within the group of 5% Shareholders, there are sufficient qualified shareholders for purposes of Section 883 to preclude non-qualified shareholders in such group from owning 50% or more of the Company's common stock for more than half the number of days during the taxableyear, which we refer to as the ''5 Percent Override Exception.'' Based on the ownership and trading of our stock in 2017, we believe that we satisfied the publicly traded test and qualified for the Section 883exemption in 2017. Even if we do qualify for the Section 883 exemption in 2017, there can be no assurance that changes and shifts in the ownership of ourstock by 5% shareholders will not preclude us from qualifying for the Section 883 exemption in future taxable years. 25Taxation in Absence of Section 883 ExemptionIf the benefits of Section 883 are unavailable, the Company's United States source shipping income would be subject to a 4% tax imposed bySection 887 of the Code on a gross basis, without the benefit of deductions, to the extent that such income is not considered to be ''effectively connected''with the conduct of a United States trade or business, as described below. Since under the sourcing rules described above, no more than 50% of theCompany's shipping income would be treated as being United States source shipping income, the maximum effective rate of United States federal income taxon our shipping income would never exceed 2% under the 4% gross basis tax regime. Based on the current operation of our vessels, if we were subject to 4%gross basis tax, our United States federal income tax liability would be approximately $1,681,605 and $648,000 for the years ended December 31, 2017 and2016 respectively. The Company did not qualify for the benefits of Section 883 for the year ended December 31, 2015 and consequently paid $256,185.However, we can give no assurance that the operation of our vessels, which are under the control of third party charterers, will not change such that ourUnited States federal income tax liability would be substantially higher. To the extent the Company's United States source shipping income is considered to be ''effectively connected'' with the conduct of a United Statestrade or business, as described below, any such ''effectively connected'' United States source shipping income, net of applicable deductions, would be subjectto United States federal income tax, currently imposed at rates of up to 35%. In addition, the Company may be subject to the 30% ''branch profits'' tax onearnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paidor deemed paid attributable to the conduct of the Company's United States trade or business. The Company's United States source shipping income would be considered ''effectively connected'' with the conduct of a United States trade orbusiness only if:•the Company has, or is considered to have, a fixed place of business in the United States involved in the earning of United States source shippingincome; and•substantially all of the Company's United States source shipping income is attributable to regularly scheduled transportation, such as the operationof a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in theUnited States. The Company did not have any vessel sailing to or from the United States on a regularly scheduled basis during its 2016 taxable year. The Companydoes not intend to have, or permit circumstances that would result in having, any such vessels in future taxable years, but there can be no assurances that thiswill be the case. Based on the foregoing and on the expected mode of the Company's shipping operations and other activities, the Company believes thatnone of its United States source shipping income will be ''effectively connected'' with the conduct of a United States trade or business for its 2017 taxableyear or any future taxable year. United States Taxation of Gain on Sale of Vessels Assuming that any decision on a vessel sale is made from and attributable to the United States office of the Company, as we believe likely to be thecase as the Company is currently structured, then any gain derived from the sale of any such vessel will be treated as derived from United States sources andsubject to United States federal income tax as ''effectively connected'' income (determined under rules different from those discussed above) under the abovedescribed net income tax regime. If the Company were to qualify for exemption from tax under Section 883 in respect of the shipping income derived fromthe international operation of its vessels, then gain from the sale of any such vessel should likewise be exempt from tax under Section 883. United States Federal Income Taxation of United States Holders As used herein, the term ''United States Holder'' means a beneficial owner of our common stock that is an individual United States citizen or resident,a United States corporation or other United States entity taxable as a corporation, an estate the income of which is subject to United States federal incometaxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust andone or more United States persons have the authority to control all substantial decisions of the trust. If a partnership holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities ofthe partnership. If you are a partner in a partnership holding our common stock, you are encouraged to consult your tax advisor.26 Distributions Subject to the discussion of passive foreign investment companies below, any distributions made by the Company with respect to its common stockto a United States Holder will generally constitute dividends to the extent of the Company's current or accumulated earnings and profits, as determined underUnited States federal income tax principles. Distributions in excess of such earnings and profits will be treated first as a nontaxable return of capital to theextent of the United States Holder's tax basis in his common stock on a dollar-for-dollar basis and thereafter as capital gain. Because the Company is not aUnited States corporation, United States Holders that are corporations will not be entitled to claim a dividend received deduction with respect to anydistributions they receive from us. Dividends paid with respect to the Company's common stock will generally be treated as ''passive category income'' forpurposes of computing allowable foreign tax credits for United States foreign tax credit purposes.Dividends paid on the Company's common stock to a United States Holder who is an individual, trust or estate (a ''United States Non-CorporateHolder'') will generally be treated as ''qualified dividend income'' that is taxable to such United States Non-Corporate Holder at preferential tax rates providedthat (1) the common stock is readily tradable on an established securities market in the United States (such as the Nasdaq Global Select Market on which theCompany's common stock is traded); (2) the Company is not a passive foreign investment company for the taxable year during which the dividend is paid orthe immediately preceding taxable year (which we do not believe we have been, are or will be); (3) the United States Non-Corporate Holder has owned thecommon stock for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock becomes ex-dividend; and (4) theUnited States Non-Corporate Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property. There is no assurance that any dividends paid on the Company's common stock will be eligible for these preferential rates in the hands of a UnitedStates Non-Corporate Holder, although we believe that they will be so eligible. Any dividends out of earnings, and profits the Company pays, which are noteligible for these preferential rates will be taxed as ordinary income to a United States Non-Corporate Holder. Special rules may apply to any ''extraordinary dividend''—generally, a dividend in an amount which is equal to or in excess of 10% of ashareholder's adjusted basis in a common share—paid by the Company. If the Company pays an ''extraordinary dividend'' on its common stock that is treatedas ''qualified dividend income,'' then any loss derived by a United States Non-Corporate Holder from the sale or exchange of such common stock will betreated as a long-term capital loss to the extent of such dividend. Sale, Exchange or Other Disposition of Common Stock Assuming the Company does not constitute a passive foreign investment company for any taxable year, a United States Holder generally willrecognize taxable gain or loss upon a sale, exchange or other disposition of the Company's common stock in an amount equal to the difference between theamount realized by the United States Holder from such sale, exchange or other disposition and the United States Holder's tax basis in such stock. Such gain orloss will be treated as long-term capital gain or loss if the United States Holder's holding period is greater than one year at the time of the sale, exchange orother disposition. Such capital gain or loss will generally be treated as United States source income or loss, as applicable, for United States foreign tax creditpurposes. Long-term capital gains of United States Non-Corporate Holders are currently eligible for reduced rates of taxation. A United States Holder's abilityto deduct capital losses is subject to certain limitations. Passive Foreign Investment Company Status and Significant Tax Consequences Special United States federal income tax rules apply to a United States Holder that holds shares in a foreign corporation classified as a ''passiveforeign investment company'' for United States federal income tax purposes. In general, the Company will be treated as a passive foreign investment companywith respect to a United States Holder if, for any taxable year in which such holder holds the Company's common stock, either:•at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other thanin the active conduct of a rental business); or•at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income. 27Income earned, or deemed earned, by the Company in connection with the performance of services would not constitute passive income. Bycontrast, rental income would generally constitute ''passive income'' unless the Company was treated under specific rules as deriving its rental income in theactive conduct of a trade or business. Based on the Company's current operations and future projections, we do not believe that the Company has been or is, nor do we expect theCompany to become, a passive foreign investment company with respect to any taxable year. Although there is no legal authority directly on point, ourbelief is based principally on the position that, for purposes of determining whether the Company is a passive foreign investment company, the gross incomeit derives from its time chartering and voyage chartering activities should constitute services income, rather than rental income. Accordingly, such incomeshould not constitute passive income, and the assets that the Company owns and operates in connection with the production of such income, in particular,the vessels, should not constitute passive assets for purposes of determining whether the Company is a passive foreign investment company. We believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning thecharacterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority whichcharacterizes time charter income as rental income rather than services income for other tax purposes. In addition, we have obtained an opinion from ourcounsel, Seward & Kissel LLP, that, based upon the Company's operations as described herein, its income from time charters and voyage charters should notbe treated as passive income for purposes of determining whether it is a passive foreign investment company. However, in the absence of any legal authorityspecifically relating to the statutory provisions governing passive foreign investment companies, the United States Internal Revenue Service, or the IRS or acourt could disagree with our position. In addition, although the Company intends to conduct its affairs in a manner to avoid being classified as a passiveforeign investment company with respect to any taxable year, we cannot assure you that the nature of its operations will not change in the future.As discussed more fully below, if the Company were to be treated as a passive foreign investment company for any taxable year, a United StatesHolder would be subject to different taxation rules depending on whether the United States Holder makes an election to treat the Company as a ''QualifiedElecting Fund,'' which election we refer to as a ''QEF election.'' As an alternative to making a QEF election, a United States Holder should be able to make a''mark-to-market'' election with respect to the Company's common stock, as discussed below. In addition, if we were to be treated as a passive foreigninvestment company, a United States holder would be required to file an annual report with the IRS for that year with respect to such holder’s common stock. Taxation of United States Holders Making a Timely QEF Election If a United States Holder makes a timely QEF election, which United States Holder we refer to as an ''Electing Holder,'' the Electing Holder mustreport for United States federal income tax purposes its pro rata share of the Company's ordinary earnings and net capital gain, if any, for each taxable year ofthe Company for which it is a passive foreign investment company that ends with or within the taxable year of the Electing Holder, regardless of whether ornot distributions were received from the Company by the Electing Holder. No portion of any such inclusions of ordinary earnings will be treated as ''qualifieddividend income.'' Net capital gain inclusions of United States Non-Corporate Holders would be eligible for preferential capital gains tax rates. The ElectingHolder's adjusted tax basis in the common stock will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profitsthat had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common stock and will not be taxed again oncedistributed. An Electing Holder would not, however, be entitled to a deduction for its pro rata share of any losses that the Company incurs with respect to anyyear. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of the Company's common stock. A UnitedStates Holder would make a timely QEF election for shares of the Company by filing one copy of IRS Form 8621 with his United States federal income taxreturn for the first year in which he held such shares when the Company was a passive foreign investment company. If the Company were to be treated as apassive foreign investment company for any taxable year, the Company would provide each United States Holder with all necessary information in order tomake the QEF election described above. Taxation of United States Holders Making a ''Mark-to-Market'' Election Alternatively, if the Company were to be treated as a passive foreign investment company for any taxable year and, as we anticipate, its shares aretreated as "marketable stock", a United States Holder would be allowed to make a ''mark-to-market'' election with respect to the Company's common stock,provided the United States Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury regulations. If thatelection is made, the United States Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of thecommon stock at the end of the taxable year over such holder's adjusted tax basis in the common stock. The United States28Holder would also be permitted an ordinary loss in respect of the excess, if any, of the United States Holder's adjusted tax basis in the common stock over itsfair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-marketelection. A United States Holder's tax basis in his common stock would be adjusted to reflect any such income or loss amount. Gain realized on the sale,exchange or other disposition of the Company's common stock would be treated as ordinary income, and any loss realized on the sale, exchange or otherdisposition of the Company’s common stock would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gainspreviously included by the United States Holder. No income inclusions under this election will be treated as "qualified dividend income." Taxation of United States Holders Not Making a Timely QEF or Mark-to-Market Election Finally, if the Company were to be treated as a passive foreign investment company for any taxable year, a United States Holder who does not makeeither a QEF election or a ''mark-to-market'' election for that year, whom we refer to as a ''Non-Electing Holder,'' would be subject to special rules with respectto (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on the common stock in a taxable year in excess of125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder'sholding period for the common stock), and (2) any gain realized on the sale, exchange or other disposition of the Company's common stock. Under thesespecial rules:•the excess distribution or gain would be allocated ratably over the Non-Electing Holder's aggregate holding period for the common stock;•the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which the Company was a passive foreigninvestment company, would be taxed as ordinary income and would not be ''qualified dividend income''; and•the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayerfor that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such othertaxable year. These special rules would not apply to a qualified pension, profit sharing or other retirement trust or other tax-exempt organization that did notborrow money or otherwise utilize leverage in connection with its acquisition of the Company's common stock. If the Company is a passive foreigninvestment company and a Non-Electing Holder who is an individual dies while owning the Company's common stock, such holder's successor generallywould not receive a step-up in tax basis with respect to such shares. United States Federal Income Taxation of ''Non-United States Holders'' A beneficial owner of common stock (other than a partnership) that is not a United States Holder is referred to herein as a "Non-United StatesHolder". If a partnership holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities ofthe partnership. If you are a partner in a partnership holding our common stock, you are encouraged to consult your tax advisor. Dividends on Common Stock Non-United States Holders generally will not be subject to United States federal income tax or withholding tax on dividends received from theCompany with respect to its common stock, unless that income is effectively connected with the Non-United States Holder's conduct of a trade or business inthe United States. If the Non-United States Holder is entitled to the benefits of a United States income tax treaty with respect to those dividends, that incomeis taxable only if it is attributable to a permanent establishment maintained by the Non-United States Holder in the United States. Sale, Exchange or Other Disposition of Common Stock Non-United States Holders generally will not be subject to United States federal income tax or withholding tax on any gain realized upon the sale,exchange or other disposition of the Company's common stock, unless: 29•The gain is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States (and, if the Non-UnitedStates holder is entitled to the benefits of an income tax treaty with respect to that gain, that gain is attributable to a permanent establishmentmaintained by the Non-United States holder in the United States); or•The Non-United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition andother conditions are met. If the Non-United States Holder is engaged in a United States trade or business for United States federal income tax purposes, the income from thecommon stock, including dividends and the gain from the sale, exchange or other disposition of the shares, that is effectively connected with the conduct ofthat trade or business will generally be subject to regular United States federal income tax in the same manner as discussed in the previous section relating tothe taxation of United States Holders. In addition, if you are a corporate Non-United States Holder, your earnings and profits that are attributable to theeffectively connected income, which are subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rateas may be specified by an applicable income tax treaty. Backup Withholding and Information Reporting In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reportingrequirements if you are a non-corporate United States Holder. Such payments or distributions may also be subject to backup withholding tax if you are a non-corporate United States Holder and you: •Fail to provide an accurate taxpayer identification number;•Are notified by the IRS that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or•In certain circumstances, fail to comply with applicable certification requirements. Non-United States Holders may be required to establish their exemption from information reporting and backup withholding by certifying theirstatus on an appropriate IRS Form W-8. If you are a Non-United States Holder and you sell your common stock to or through a United States office of a broker, the payment of the proceedsis subject to both United States backup withholding and information reporting unless you certify that you are a non-United States person, under penalties ofperjury, or you otherwise establish an exemption. If you sell your common stock through a non-United States office of a non-United States broker and thesales proceeds are paid to you outside the United States, then information reporting and backup withholding generally will not apply to that payment.However, United States information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment ismade to you outside the United States, if you sell your common stock through a non-United States office of a broker that is a United States person or has someother contacts with the United States. Such information reporting requirements will not apply, however, if the broker has documentary evidence in its recordsthat you are a non-United States person and certain other conditions are met, or you otherwise establish an exemption. Backup withholding tax is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholdingrules that exceed your income tax liability by filing a refund claim with the IRS. Individuals who are United States Holders (and to the extent specified in applicable Treasury regulations, certain United States entities and Non-United States Holders) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 withinformation relating to the asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or$50,000 on the last day of the taxable year (or such higher dollar amount as prescribed by applicable Treasury regulations). Specified foreign financial assetswould include, among other assets, our common shares, unless the shares are held through an account maintained with a United States financial institution.Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willfulneglect. Additionally, in the event an individual United States Holder (and to the extent specified in applicable Treasury regulations, a United States entityand Non-United States Holders) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection ofUnited States federal income taxes of such holder for the related tax year may not close until three years after the date that the required information isfiled. United States Holders (including United States entities) and Non-United States Holders are encouraged to consult their own tax advisors regarding theirreporting obligations under this legislation. Glossary of Shipping Terms 30The following are definitions of shipping terms used in this Form 10-K. Annual Survey— The inspection of a vessel by a classification society, on behalf of a flag state, that takes place every year. Baltic Dry Index or BDI —The BDI is an index published by the Baltic Exchange which tracks worldwide international shipping prices of various dry bulkcargoes. The index provides an assessment of the price for moving major raw materials by sea and is composed of 20 key shipping routes. Baltic Exchange—Based in London, the Baltic Exchange is a market for the trading and settlement of shipping and freight contracts. The exchangepublishes daily freight market prices and maritime shipping cost indices, including: Baltic Dry Index (BDI), Baltic Supramax Index (BSI), Baltic PanamaxIndex (BPI), Baltic Capesize Index (BCI), Baltic Tanker Dirty Index (BDTI), and Baltic Tanker Clean Index (BCTI). Baltic Supramax Index or BSI —The BSI is an index published by the Baltic Exchange which tracks gross time charter value for a specific 52,000 dwt.vessel. Bareboat Charter—Also known as "demise charter." Contract or hire of a ship under which the ship owner is usually paid a fixed amount of charter hire ratefor a certain period of time during which the charterer is responsible for the operating costs and voyage costs of the vessel as well as arranging for crewing. Bulk Vessels/Carriers—Vessels which are specially designed and built to carry large volumes of cargo in bulk cargo form. Bunkers—Heavy fuel oil used to power a vessel's engines. Capesize—A dry bulk carrier in excess of 100,000 dwt.Charter— The hire of a vessel for a specified period of time or to carry a cargo for a fixed fee from a loading port to a discharging port. The contract for acharter is called a charter party. Charterer— The individual or company hiring a vessel. Charter Hire Rate— A sum of money paid to the vessel owner by a charterer under a time charter party for the use of a vessel. Classification Society—An independent organization which certifies that a vessel has been built and maintained in accordance with the rules of suchorganization and complies with the applicable rules and regulations of the country of such vessel and the international conventions of which that country is amember. Contract of Affreightment or “COA”—An agreement providing for the transportation between specified points for a specific quantity of cargo over aspecific time period but without designating specific vessels or voyage schedules, thereby allowing flexibility in scheduling since no vessel designation isrequired. COAs can either have a fixed rate or a market-related rate. Deadweight Ton or "dwt"—A unit of a vessel's capacity for cargo, fuel oil, stores and crew, measured in metric tons of 1,000 kilograms. A vessel's DWT ortotal deadweight is the total weight the vessel can carry when loaded to a particular load line. Demise Charter—See bareboat charter. Demurrage—Additional revenue paid to the ship owner on its Voyage Charters for delays experienced in loading and/or unloading cargo that are notdeemed to be the responsibility of the ship owner, calculated in accordance with specific Charter terms. Despatch —The amount payable by the ship owner if the vessel completes loading or discharging before the laytime has expired, calculated in accordancewith specific charter terms. Draft—Vertical Distance between the waterline and the bottom of the vessel's keel. Dry Bulk—Non-liquid cargoes of commodities shipped in an unpackaged state. Drydocking—The removal of a vessel from the water for inspection and/or repair of submerged parts.31 Gross Ton—Unit of 100 cubic feet or 2.831 cubic meters used in arriving at the calculation of gross tonnage. Handymax—A dry bulk carrier of approximately 40,000 to 65,000 dwt. Handysize—A dry bulk carrier having a carrying capacity of up to approximately 39,000 dwt. Hull—The shell or body of a vessel. International Maritime Organization or "IMO"—A UN agency that issues international trade standards for shipping. Intermediate Survey—The inspection of a vessel by a classification society surveyor which takes place between two and three years before and after eachSpecial Survey for such vessel pursuant to the rules of international conventions and classification societies. ISM Code—The International Management Code for the Safe Operation of Ships and for Pollution Prevention, as adopted by the IMO. Metric Ton—A unit of measurement equal to 1,000 kilograms.Light Weight Ton ("lwt") - The actual weight of the ship with no fuel, passengers, cargo, water or stores on board. Newbuilding—A newly constructed vessel. OPA—The United States Oil Pollution Act of 1990 (as amended). Orderbook—A reference to currently placed orders for the construction of vessels (e.g., the Panamax orderbook). Panamax—A dry bulk carrier of approximately 60,000 to 100,000 dwt of maximum length, depth and draft capable of passing fully loaded through thePanama Canal.Protection & Indemnity Insurance—Insurance obtained through a mutual association formed by ship owners to provide liability insurance protection fromlarge financial loss to one member through contributions towards that loss by all members. Scrapping—The disposal of old or damaged vessel tonnage by way of sale as scrap metal. Short-Term Time Charter—A time charter which lasts less than approximately 12 months. Sister Ships—Vessels of the same class and specification which were built by the same shipyard. SOLAS—The International Convention for the Safety of Life at Sea 1974, as amended, adopted under the auspices of the IMO. Special Survey—The inspection of a vessel by a classification society surveyor which takes place a minimum of every four years and a maximum of everyfive years. Spot Market—The market for immediate chartering of a vessel usually for single voyages. Strict Liability—Liability that is imposed without regard to fault. Supramax—A Handymax dry bulk carrier ranging in size from approximately 50,000 to 59,000 dwt. Technical Management—The management of the operation of a vessel, including physically maintaining the vessel, maintaining necessary certifications,and supplying necessary stores, spares, and lubricating oils. Responsibilities also generally include selecting, engaging and training crew, and arrangingnecessary insurance coverage. Time Charter—Contract for hire of a ship. A charter under which the ship-owner is paid charter hire rate on a per day basis for a certain period of time, theship owner being responsible for providing the crew and paying operating costs while the32charterer is responsible for paying the voyage costs. Any delays at port or during the voyages are the responsibility of the charterer, save for certain specificexceptions such as loss of time arising from vessel breakdown and routine maintenance. Ton —A metric ton. Ultramax- A Handymax dry bulk carrier ranging in size from approximately 60,000 to 65,000 dwt. Voyage Charter—Contract for hire of a vessel under which a ship owner is paid freight on the basis of moving cargo from a loading port to a discharge port.The ship owner is responsible for paying both operating costs and voyage costs. The charterer is typically responsible for any delay at the loading ordischarging ports. Voyage Expenses—Includes fuel, port charges, canal tolls, cargo handling operations and brokerage commissions paid by the Company under VoyageCharters. These expenses are subtracted from shipping revenues to calculate Time Charter Equivalent revenues for Voyage Charters. Vessel expenses – Includes crewing, repairs and maintenance, insurance, stores, lubes, communication expenses. Available Information The Company makes available free of charge through its internet website, www.eagleships.com, its annual reports on Form 10-K, quarterly reports onForm 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon asreasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. You may read and copy any document we filewith the SEC at the SEC's public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at1-800-SEC-0330 for further information on the public reference facilities. Our SEC filings are also available to the public at the SEC's web site athttp://www.sec.gov. The information on our website is not incorporated by reference into this Annual Report. We maintain our principal executive offices at 300 First Stamford Place 5th Floor, Stamford, Connecticut. Our telephone number at that address is(203) 276-8100. Our website address is www.eagleships.com. Information contained on our website does not constitute part of this Annual Report.33 ITEM 1A. RISK FACTORS We operate in an intensely competitive industry. Some of the following risks relate principally to the industry in which we operate and our businessin general. Other risks relate principally to the securities market, national and global economic conditions and the ownership of our common stock. Theoccurrence of specific factors, including the risks described below could cause our results to differ materially from those contained in the forward-lookingstatements made in this report, and could significantly and negatively affect our business, financial condition or operating results. Industry Specific Risk Factors Charter hire rates for dry bulk vessels are volatile and have declined since their historic highs and may continue to decrease in the future, which mayadversely affect our earnings, revenue and profitability and our ability to comply with our loan covenants. The dry bulk shipping industry is cyclical with high volatility in charter hire rates and profitability. The degree of charter hire rate volatility amongdifferent types of dry bulk vessels has varied widely; however, the downturn in the dry bulk charter market has severely affected the entire dry bulk shippingindustry and charter hire rates for dry bulk vessels have declined significantly from historically high levels. The Baltic Dry Index (the “BDI”), a daily averageof charter rates for key dry bulk routes published by The Baltic Exchange, which has long been viewed as the main benchmark to monitor the movements ofthe dry bulk vessel charter market and the performance of the entire dry bulk shipping market, declined 94% in 2008 from a peak of 11,793 in May 2008 to alow of 663 in December 2008. Since 2008, the BDI recorded a high of 4,661 in November 2009 and posted an all-time low of 290 in February 2016. Since2016, the dry bulk market has been steadily recovering with the BDI recording a high of 1,619 in December 2017. There can be no assurance that the drybulk charter market will increase further, and the market could decline. Fluctuations in charter rates result from changes in the supply of and demand for vessel capacity and changes in the supply of and demand for themajor commodities carried by vessels internationally. Because the factors affecting the supply of and demand for vessels are outside of our control and areunpredictable, the nature, timing, direction and degree of changes in industry conditions are also unpredictable. If charter rates in the dry bulk market declinesignificantly for any significant period in 2018, this will have an adverse effect on our revenues, profitability, cash flows and our ability to comply with thefinancial covenants in our loan agreements. Factors that influence demand for dry bulk vessel capacity include:•supply of and demand for energy resources, commodities and industrial products;•changes in the exploration or production of energy resources, commodities, consumer and industrial products;•the location of regional and global exploration, production and manufacturing facilities;•the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;•the globalization of production and manufacturing;•global and regional economic and political conditions, including armed conflicts and terrorist activities; embargoes and strikes;•developments in international trade;•changes in seaborne and other transportation patterns, including the distance cargo is transported by sea;•environmental and other regulatory developments;•currency exchange rates; and•weather. Factors that influence the supply of vessel capacity include:•the number of newbuilding deliveries;•port and canal congestion;•the scrapping of older vessels;•vessel casualties;•weather;•price of fuel oil•slow steaming; and•the number of vessels that are out of service, namely those that are laid-up, drydocked awaiting repairs or otherwise not available for hire.34In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuildingprices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys,normal maintenance and insurance coverage, the efficiency and age profile of the existing dry bulk fleet in the market and government and industryregulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of anddemand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industryconditions. We anticipate that the future demand for our dry bulk vessels will be dependent upon economic growth in the world's economies, including Chinaand India, seasonal and regional changes in demand, changes in the capacity of the global dry bulk fleet and the sources and supply of dry bulk cargo to betransported by sea. Although the current newbuilding orderbook (as a percentage of the on-the-water fleet) is at a low level, a pickup in new ordering couldincrease global capacity and there can be no assurance that economic growth will continue in order to absorb this higher supply. Adverse economic, political,social or other developments could have a material adverse effect on our business and operating results. Because we employ most of our vessels on short-term time and voyage charters, we are exposed to changes in the spot market and short-term charterrates for dry bulk carriers and such changes may affect our earnings and the value of our vessels at any given time. We cannot assure you that we will be ableto successfully renew the charters for these vessels at rates sufficient to allow us to meet our obligations. If the charter rates drop in the future, it may have anadverse effect on our revenues, profitability, cash flows and our ability to comply with the financial covenants in our loan agreements In addition, because the market value of our vessels may fluctuate significantly, we may incur losses when we sell vessels, which may adverselyaffect our earnings. If we sell vessels at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financialstatements, the sale may be at less than the vessel's carrying amount on our financial statements, resulting in a loss and a reduction in earnings. The global economic environment may negatively impact our business. While global GDP growth has been increasing in recent years, driven by an improvement in both advanced and developing economies, anydeterioration in this positive trend could impact dry bulk demand. China is a major source of demand for dry bulk; a deterioration in the economicfundamentals for this nation, may impact dry bulk demand, especially for cargoes like iron ore and coal. If the current global economic environment worsens,we may be negatively affected in the following ways: •We may not be able to employ our vessels at charter rates as favorable to us as historical rates or operate our vessels profitably.•Our earnings and cash flows could remain at depressed levels or decline, which may leave us with insufficient cash resources to make requiredamortization payments under our credit facilities or cause us to breach one or more of the covenants in our credit facilities, thereby potentiallyaccelerating the repayment of outstanding indebtedness. •The market values of our vessels could further decrease, which may cause us to recognize losses if any of our vessels are sold or if their values areimpaired. A further decline in the market value of our vessels could trigger defaults under our credit facilities’ covenants. •Our charterers may fail to meet their obligations under our time charter or voyage charter agreements.•The occurrence of one or more of these events could have a material adverse effect on our business, results of operations, cash flows and financialcondition.The state of global financial markets and current economic conditions may adversely impact our ability to obtain additional financing or refinance ourexisting credit facilities on acceptable terms, which may hinder or prevent us from operating or expanding our business. Global financial markets and economic conditions are volatile. Although capital markets have improved recently, they still remain volatile. Thestate of global financial markets and economic conditions might adversely impact our ability to issue additional equity. Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtainingmoney from the credit markets has increased as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existingdebt at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Due to these factors, we cannot becertain that additional financing will be available if needed and to the extent required, or that we will be able to refinance our existing credit facilities, onacceptable terms or at all. If additional financing or refinancing is not available when needed, or is available only on unfavorable terms, we may35be unable to meet our obligations as they come due or we may be unable to enhance our existing business, complete additional acquisitions or otherwise takeadvantage of business opportunities as they arise. For more information on our debt facilities, see “Item 7 Management’s Discussion and Analysis ofFinancial Condition and Results of Operation—Liquidity and Capital Resources” and “Note 8. Debt” of the consolidated financial statements.The instability of the euro or the inability of countries to refinance their debts could have a material adverse effect on our revenue, profitability andfinancial position. As a result of the credit crisis in Europe, the European Commission created the European Financial Stability Facility (the “EFSF”) and the EuropeanFinancial Stability Mechanism (the “EFSM”) to provide funding to Eurozone countries in financial difficulties that seek such support. In September 2012,the European Council established a permanent stability mechanism, the European Stability Mechanism, or the ESM, to assume the role of the EFSF and theEFSM in providing external financial assistance to Eurozone countries. Despite these measures, concerns persist regarding the debt burden of some Eurozonecountries, such as Greece, and their ability to meet future financial obligations and the overall stability of the euro. An extended period of adversedevelopment in the outlook for European countries could reduce the overall demand for dry bulk goods. These potential developments, or negative marketperceptions, could affect our financial position, results of operations and cash flow. Changes in the economic and political environment in China and policies adopted by the government to regulate its economy may have a material adverseeffect on our business, financial condition and results of operations. The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development, orOECD, in such respects as structure, government involvement, level of development, growth rate, capital reinvestment, allocation of resources, rate ofinflation and balance of payments position. Prior to 1978, the Chinese economy was a planned economy. Since 1978, increasing emphasis has been placedon the utilization of market forces in the development of the Chinese economy. Annual and five year State Plans are adopted by the Chinese government inconnection with the development of the economy. Although state-owned enterprises still account for a substantial portion of the Chinese industrial output, ingeneral, the Chinese government is reducing the level of direct control that it exercises over the economy through State Plans and other measures. There is anincreasing level of freedom and autonomy in areas such as allocation of resources, production, pricing and management and a gradual shift in emphasis to a"market economy" and enterprise reform. Limited price reforms were undertaken with the result that prices for certain commodities are principally determinedby market forces. Many of the reforms are unprecedented or experimental and may be subject to revision, change or abolition based upon the outcome of suchexperiments. If the Chinese government does not continue to pursue a policy of economic reform, the level of imports to and exports from China could beadversely affected by changes to these economic reforms by the Chinese government, as well as by changes in political, economic and social conditions orother relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions, all of which could, adversely affectour business, operating results and financial condition. The market values of our vessels are volatile and may decline, which could limit the amount of funds that we can borrow or cause us to breach certainfinancial covenants in our current or future credit facilities and we may incur a loss if we sell vessels following a decline in their market value. The fair market values of our vessels have generally experienced high volatility. Although the market prices for secondhand Supramax/Ultramax drybulk carriers recovered in 2017, they are below their historically high levels. The fair market value of our vessels may continue to fluctuate depending on anumber of factors, including:•prevailing level of charter rates;•general economic and market conditions affecting the shipping industry;•types, sizes and ages of vessels;•supply of and demand for vessels;•other modes of transportation;•cost of new buildings;•governmental or other regulations;•the need to upgrade secondhand and previously owned vessels as a result of charterer requirements, technological advances in vessel design orequipment or otherwise; and•technological advances. 36Conversely, if vessel values are elevated at a time when we wish to acquire additional vessels, the cost of acquisition may increase and this couldadversely affect our business, results of operations, cash flow and financial condition. Fuel cost, or bunker prices, may adversely affect profits. While we generally do not bear the cost of fuel, or bunkers, for vessels operating on time charters, fuel is a significant factor in negotiating charterrates. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation. Fuel is alsoa significant, if not the largest, expense in our shipping operations when vessels are under voyage charter. The price and supply of fuel is unpredictable andfluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization ofPetroleum Exporting Countries (“OPEC”) and other oil and gas producers, war and unrest in oil producing countries and regions, regional productionpatterns and environmental concerns. Further, fuel may become much more expensive in the future, which may reduce the profitability and competitivenessof our business versus other forms of transportation, such as truck or rail. Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect our business. The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. Theclassification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of thevessel and the Safety of Life at Sea Convention. A vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel’s machinery may be on acontinuous survey cycle under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydockedevery two and a half to five years for inspection of its underwater parts. Compliance with the above requirements may result in significant expense. If any vessel does not maintain its class or fails any annual, intermediateor special survey, the vessel will be unable to trade between ports and will be unemployable and uninsurable, which could negatively impact our results ofoperations and financial condition. We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doingbusiness. Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws andnational and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownershipand operation of our vessels. These regulations include, but are not limited to, OPA, CERCLA, the CAA, the CWA, the MTSA, requirements of the USCG andthe EPA, and regulations of the IMO, including MARPOL, as from time to time amended including designation of ECAs thereunder, SOLAS, as from time totime amended, the ISM Code, the International Convention on Load Lines of 1966, as from time to time amended, the IMO International Convention onCivil Liability for Oil Pollution Damage of 1969, as from time to time amended and replaced by the 1992 protocol, and generally referred to as CLC, the IMOInternational Convention on Civil Liability for Bunker Oil Pollution Damage of 2001, or the Bunker Convention, and EU regulations. Compliance with suchlaws, regulations and standards, where applicable, may require installation of costly equipment or operational changes and may affect the resale value oruseful lives of our vessels. We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but notlimited to, costs relating to air emissions, the management of ballast and bilge waters, elimination of tin-based paint, maintenance and inspection,development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents.These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition. A failure to comply with applicablelaws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Environmentallaws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard towhether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for thedischarge of oil within the 200-mile exclusive economic zone around the United States. An oil spill could result in significant liability, including fines,penalties and criminal liability and remediation costs for natural resource damages under other federal, state and local laws, as well as third-party damages.We are required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents.Although we have arranged insurance to cover certain environmental risks, there can be no assurance that such insurance will be sufficient to cover all suchrisks or that any claims will not have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to paydividends, if any, in the future. Further declines in charter rates and vessel values could cause us to incur impairment charges.37 We evaluate the carrying amounts of our vessels to determine if events have occurred that would require an impairment of their carrying amounts.The recoverable amount of vessels is reviewed based on events and changes in circumstances that would indicate that the carrying amount of the assets mightnot be recovered. The review for potential impairment indicators and projection of future cash flows related to the vessels is complex and requires us to makevarious estimates including future freight rates, earnings from the vessels and discount rates. All of these items have been historically volatile.We evaluate the recoverable amount as the higher of fair value less costs to sell and value in use. If the recoverable amount is less than the carryingamount of the vessel, the vessel is deemed impaired. The carrying values of our vessels may not represent their fair market value in the future because the newmarket prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of new buildings. Any impairment charges incurred as aresult of declines in charter rates could have a material adverse effect on our business, results of operations, cash flows and financial condition. An over-supply of dry bulk carrier capacity may prolong or further depress the current low charter rates, which may limit our ability to operate our drybulk carriers profitably. The market supply of dry bulk carriers has been increasing as a result of the delivery of numerous newbuilding orders over the last few years. Newbuildings have been delivered in significant numbers since the beginning of 2006. The oversupply of dry bulk carrier capacity has contributed to a reductionof charter hire rates, as evidenced by the low rates we have experienced during 2016. The net fleet growth in 2017 amounted to 2.9% as compared to 2.3% in2016. Although 2017 newbuilding deliveries decreased by 108 vessels, or 20%, from the year prior (to 456 total), scrapping decreased by a greater amountcausing net fleet growth to increase slightly year-on-year. Scrapping totaled 214 ships in 2017, as compared to 408 in 2016, representing a drop of 48%. Themarket is historically volatile. Although the current year charter rates are higher, we do not know if it will last and whether we can recharter our vessels atcompetitive rates or we may not be able to charter these vessels at all. The occurrence of these events could have a material adverse effect on our business,results of operations, cash flows, financial condition. A decrease in the level of China’s export of goods or an increase in trade protectionism could have a material adverse impact on our charterers’ businessand, in turn, could cause a material adverse impact on our results of operations, financial condition and cash flows. China exports considerably more goods than it imports. Our vessels may be deployed on routes involving trade in and out of emerging markets, andour charterers’ shipping and business revenue may be derived from the shipment of goods from the Asia Pacific region to various overseas export marketsincluding the United States and Europe. Any reduction in or hindrance to the output of China-based exporters could have a material adverse effect on thegrowth rate of China’s exports and on our charterers’ business. For instance, the government of China has recently implemented economic policies aimed atincreasing domestic consumption of Chinese-made goods. This may have the effect of reducing the supply of goods available for export and may, in turn,result in a decrease of demand. Additionally, though in China there is an increasing level of autonomy and a gradual shift in emphasis to a “market economy”and enterprise reform, many of the reforms, particularly some limited price reforms that result in the prices for certain commodities being principallydetermined by market forces, are unprecedented or experimental and may be subject to revision, change or abolition. The level of imports to and exports fromChina could be adversely affected by changes to these economic reforms by the Chinese government, as well as by changes in political, economic and socialconditions or other relevant policies of the Chinese government. Our operations expose us to the risk that increased trade protectionism will adversely affect our business. If the incipient global recovery isundermined by downside risks and the recent economic downturn is prolonged, governments may turn to trade barriers to protect their domestic industriesagainst foreign imports, thereby depressing the demand for shipping. Specifically, increasing trade protectionism in the markets that our charterers serve hascaused and may continue to cause an increase in: (i) the cost of goods exported from China, (ii) the length of time required to deliver goods from China and(iii) the risks associated with exporting goods from China, as well as a decrease in the quantity of goods to be shipped. Any increased trade barriers or restrictions on trade, especially trade with China, would have an adverse impact on our charterers’ business, operatingresults and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of theirtime charters with us. This could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividendsto our shareholders. 38World events, including terrorist attacks and international hostilities could affect our results of operations and financial condition. Terrorist attacks, the outbreak of war and the existence of international hostilities continue to cause uncertainty in the world’s financial markets andmay affect our business, operating results and financial condition. Continuing conflicts and recent developments in the Middle East, including Egypt andNorth Africa, and the presence of U.S. or other armed forces in the Middle East, may lead to additional acts of terrorism and armed conflict around the world,which may contribute to further economic instability in the global financial markets. These uncertainties could also adversely affect our ability to obtainadditional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted in attacks on vessels. Mining of waterways and otherefforts to disrupt international shipping, particularly in the Arabian Gulf region could also affect our business, operating results and financial condition. Actsof terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of theseoccurrences could have a material adverse impact on our operating results, revenues and costs.Acts of piracy on ocean-going vessels have had and may continue to have an adverse effect on our business. Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and inthe Gulf of Aden off the coast of Somalia. Although the frequency of sea piracy worldwide has decreased from 2014 to 2017, sea piracy incidents continue tooccur, particularly in the Gulf of Aden and increasingly in the Gulf of Guinea and the West Coast of Africa, with dry bulk vessels and tankers particularlyvulnerable to such attacks. If these piracy attacks occur in regions that are characterized as “war risk” zones, or Joint War Committee “war and strikes” listedareas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costsand costs in relation to the employment of onboard security guards, could increase in such circumstances. Furthermore, while we believe the charterer remainsliable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterermay also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and is therefore entitled to cancel the charter party, a claim thatwe would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, anydetention or hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance for our vessels, could have amaterial adverse impact on our business, financial condition and results of operations. If our vessels call on ports located in countries or territories that are subject to sanctions imposed by the UN, the United States, the EU or other relevantauthorities, or if we otherwise are found to be in violation of sanctions, there could be an adverse effect on our reputation, business position, financialcondition or results of operations, or the market for our common shares As a company operating in the United States, and with an office in Germany, we are subject to U.S. and EU economic sanctions and trade embargolaws and regulations as well as equivalent economic sanctions laws of other relevant jurisdictions in connection with our activities. The laws and regulationsof these different jurisdictions vary in their application and do not all apply to the same covered persons or proscribe the same activities. In addition, thesanctions and embargo laws and regulations of each jurisdiction may be amended to increase or reduce the restrictions they impose over time, and the lists ofpersons and entities designated under these laws and regulations are amended frequently. For example, on October 7, 2016, President Obama issuedExecutive Order 13742, which effectively eliminated sanctions against Myanmar and removed sanctions designations of formerly restricted parties under theBurma sanctions program. However, the termination of U.S. sanctions on Myanmar does not affect any potential violations that occurred prior to October 7,2016. Additionally, new sanctions programs have been enacted in recent years, including the U.S. and EU, Ukraine/Russia-related sanctions programs as wellas the comprehensive sanctions imposed by the United States with respect to the territory of Crimea. In recent years, multilateral international sanctions targeting Iran have restricted and/or prohibited us and our charterers from engaging in Iran-related activities, including calling on ports in Iran. On January 16, 2016, the International Atomic Energy Agency verified that Iran implemented its keynuclear-related commitments described in the Joint Comprehensive Plan of Action (JCPOA), triggering the suspension and/or easing of certain U.S., EU, andUN nuclear-related sanctions. The United States lifted most, though not all, of its sanctions on Iran that target non-U.S. companies for engaging in activitieswith Iran, including those related to Iran’s energy, shipping, shipbuilding, and insurance sectors and provided a general authorization under OFAC’s IranianTransactions and Sanctions Regulations for foreign entities owned or controlled by U.S. persons to engage in certain activities involving the Government ofIran and persons subject to the jurisdiction of Iran, subject to certain conditions. Nevertheless, the United States continues to maintain sanctions on Iran,prohibiting persons and companies in the United States and U.S. persons, wherever located, from engaging in nearly all Iran-related activity. Further, there isalso a potential risk that the United States could re-impose wider sanctions on Iran affecting non-U.S. companies that it lifted in connection withimplementation of the JCPOA if Iran violates the agreement at some point in the future, and more recently, a risk that the U.S. could withdraw from theJCPOA even if Iran does not violate the terms of the current agreement. On January 12, 2018, President Donald Trump waived39again the application of certain nuclear-related secondary sanctions but stated that the U.S. will refuse to renew the waivers and will withdraw from theJCPOA, by mid-May 2018, unless the U.S. and its European allies reach a supplemental agreement to fix certain deficiencies in the JCPOA identified byPresident Trump. If President Trump does not waive the sanctions in May 2018, U.S. secondary sanctions on Iran related to Iran’s energy, shipping,shipbuilding, and insurance sectors could come back into effect; as a result, we and our charterers could be further restricted from engaging in Iran-relatedactivities. The EU lifted nearly all of its sanctions targeting Iran, except for targeted asset freezes and travel bans against certain Iranian individuals andentities and restrictions on activities related to weapons proliferation and human rights abuses. Accordingly, residual U.S. secondary sanctions designationsand residual EU sanctions listings remain in effect against certain Iranian individuals and entities. While UN, U.S. and EU sanctions relief creates potentialopportunities for businesses, risks that existed prior to January 16, 2016 continue to persist, and new risks have arisen, including in particular the divergencebetween U.S. and EU sanctions and evolving interpretation of the sanctions relief.Although we intend to maintain compliance with all applicable economic sanctions and trade embargo laws and regulations, there can be noassurance that, notwithstanding our compliance safeguards, we will not be found in the future to have been in violation, particularly as the sanctions andembargo laws and regulations are amended, the scope of certain laws and regulations may be unclear, and laws and regulations are subject to strict liabilityand are subject to discretionary interpretations by regulators which may change over time. Any such violation could result in fines or other penalties andcould severely impact our ability to access U.S. capital markets and conduct our business and could result in some investors and/or lenders deciding, or beingrequired, to divest their interest, or not to invest, in us or lend to us. In addition, certain institutional investors may have investment policies or restrictionsthat prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism.The determination by these investors not to invest in, or to divest from, our common shares may adversely affect the price at which our common shares trade. Although no vessels owned or operated by us have called on ports located in countries or territories subject to comprehensive country-wide orterritory-wide economic sanctions and trade embargoes imposed by the U.S., UN. or EU (Crimea, North Korea, Cuba, Iran, Sudan and Syria), in the future, ourvessels may call on ports in countries or territories subject to such comprehensive sanctions from time to time, whether as a result of the easing of suchsanctions, on charterers’ instructions notwithstanding contractual provisions that prohibit them from doing so, or otherwise. Moreover, our charterers or othercontractual counter-parties may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, andthose violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if weengage in certain other activities with individuals or entities designated under or in countries or territories subject to sanctions and embargo laws even if thespecific activities are lawful. Investor perception of the value of our common shares may be adversely affected by the consequences of war, the effects of terrorism, civil unrestand governmental actions in these and surrounding countries. In November 2015, the Company filed a voluntary self-disclosure report regarding certain apparent violations of U.S. sanctions regulations in theprovision of shipping services for third party charterers with respect to the transportation of cargo to or from Myanmar (formerly Burma). At the time of suchapparent violations, the Company had a different senior operational management team. Notwithstanding the fact that the apparent violations took place under a different senior operational management team and although the Company’snew board and management have implemented robust remedial measures and significantly enhanced its compliance safeguards there can be no assurance thatOFAC will not conclude that these past actions warrant the imposition of civil penalties and/or referral for further investigation by the U.S. Department ofJustice. The self-disclosure report was provided to OFAC for the agency’s review, consideration and determination regarding what action, if any, may betaken in resolution of this matter. The Company will continue to cooperate with the agency regarding this matter and cannot estimate when such review willbe concluded. While the ultimate impact of these matters cannot be determined, there can be no assurance that the impact will not be material to theCompany’s financial condition or results of operations. If economic conditions throughout the world deteriorate, it will impede our results of operations, financial condition and cash flows, and could cause themarket price of our common shares to decline. If the economic conditions in the world deteriorate, it could have a material adverse effect on our ability to implement our business strategy. TheUnited States, the EU and other parts of the world have recently been or are currently in a recession and continue to exhibit weak economic trends. The creditmarkets in the United States and Europe have experienced significant contraction, deleveraging and reduced liquidity, and the U.S. federal and stategovernments and European authorities have implemented a broad variety of governmental action and/or new regulation of the financial markets and mayimplement additional regulations in the future. Securities and futures markets and the credit markets are subject to comprehensive statutes, regulations40and other requirements. The SEC, other regulators, self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event ofmarket emergencies and may effect changes in law or interpretations of existing laws. Global financial markets and economic conditions have been, andcontinue to be, severely disrupted and volatile. Credit markets and the debt and equity capital markets have been exceedingly distressed and the uncertaintysurrounding the future of the credit markets in the United States and the rest of the world has resulted in reduced access to credit worldwide. We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking and securities markets aroundthe world, among other factors. Major market disruptions and the current adverse changes in market conditions and regulatory climate in the United Statesand worldwide may adversely affect our business or impair our ability to borrow amounts under our credit facilities or any future financial arrangements. Wecannot predict how long the current market conditions will last. However, these recent and developing economic and governmental factors, together with theconcurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operations, financial condition or cash flows, havecaused the trading price of our common shares on the Nasdaq Global Select Market to decline and could cause the price of our common shares to continue todecline.. A significant number of the port calls made by our vessels involve the loading or discharging of raw materials and semi-finished products in ports inthe Asia Pacific region. As a result, a negative change in economic conditions in any Asia Pacific country, and particularly in China, India or Japan, couldhave an adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends. In particular, in recent years, Chinahas been one of the world’s fastest growing economies in terms of gross domestic product. China’s gross domestic product grew by 6.9%, 6.7% and 6.9% in2017, 2016 and 2015, respectively. We cannot assure you that the Chinese economy will not experience a significant contraction in the future. If the Chinesegovernment does not continue to pursue a policy of economic growth and urbanization, the level of imports to and exports from China could be adverselyaffected by changes to these initiatives by the Chinese government, as well as by changes in political, economic and social conditions or other relevantpolicies of the Chinese government, such as changes in laws, regulations or export and import restrictions. Notwithstanding economic reform, the Chinesegovernment may adopt policies that favor domestic dry bulk shipping companies and may hinder our ability to compete with them effectively. Moreover, asignificant or protracted slowdown in the economies of the United States, the EU or various Asian countries may adversely affect economic growth in Chinaand elsewhere. Our business, results of operations, cash flows, financial condition and ability to pay dividends will likely be materially and adverselyaffected by an economic downturn in any of these countries.Our operating results will be subject to seasonal fluctuations, which could affect our operating results. We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. Thisseasonality may result in volatility in our operating results to the extent that we enter into new charter agreements or renew existing agreements during a timewhen charter rates are weaker or we operate our vessels on the spot market or index based time charters, which may result in quarter-to-quarter volatility in ouroperating results. The dry bulk sector is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other rawmaterials in the northern hemisphere. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certaincommodities. As a result, our revenues from our dry bulk carriers may be weaker during the fiscal quarters ended June 30 and September 30, and, conversely,our revenues from our dry bulk carriers may be stronger in fiscal quarters ended December 31 and March 31. We are subject to international safety regulations and the failure to comply with these regulations may subject us to increased liability, may adverselyaffect our insurance coverage and may result in a denial of access to, or detention in, certain ports. The operation of our vessels is affected by the requirements set forth in the ISM Code. The ISM Code requires ship owners, ship managers andbareboat charterers to develop and maintain an extensive “Safety Management System” that includes the adoption of a safety and environmental protectionpolicy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. The failure of a ship owner orbareboat charterer to comply with the ISM Code may subject it to increased liability, may invalidate existing insurance or decrease available insurancecoverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. Each of the vessels that has been delivered to us is ISMCode-certified and we expect that each other vessel that we have agreed to purchase will be ISM Code-certified when delivered to us. However, if we aresubject to increased liability for non-compliance or if our insurance coverage is adversely impacted as a result of non-compliance, it may negatively affectour ability to pay dividends, if any, in the future. If any of our vessels are denied access to, or are detained in, certain ports, our revenues may be adverselyimpacted. In addition, vessel classification societies also impose significant safety and other requirements on our vessels. In complying with current and futureenvironmental requirements, vessel-owners and operators may also incur significant additional costs in meeting new maintenance and inspectionrequirements, in developing contingency arrangements for potential spills and41in obtaining insurance coverage. Government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected tobecome stricter in the future and require us to incur significant capital expenditures on our vessels to keep them in compliance. The operation of our vessels is also affected by other government regulation in the form of international conventions, national, state and local lawsand regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration. Because such conventions,laws, and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereofon the resale prices or useful lives of our vessels. Additional conventions, laws and regulations may be adopted which could limit our ability to do businessor increase the cost of our doing business and which may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates, and financial assurances with respect to our operations. Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business. International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination and trans-shipment points. Inspection procedures may result in the seizure of contents of our vessels, delays in the loading, offloading, trans-shipment or delivery andthe levying of customs duties, fines or other penalties against us. It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Changes to inspection procedurescould also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical orimpractical. Any such changes or developments may have a material adverse effect on our business, financial condition and results of operations. Arrests of our vessels by maritime claimants could cause a significant loss of earnings for the related off-hire period. Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel forunsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by “arresting” or “attaching” a vessel throughforeclosure proceedings. The arrest or attachment of one or more of our vessels could result in a significant loss of earnings for the related off-hire period. Inaddition, in jurisdictions where the “sister ship” theory of liability applies, a claimant may arrest the vessel which is subject to the claimant’s maritime lienand any “associated” vessel, which is any vessel owned or controlled by the same owner. In countries with “sister ship” liability laws, claims might beasserted against us or any of our vessels for liabilities of other vessels that we own.Risks associated with operating ocean going vessels could affect our business and reputation, which could adversely affect our revenues and stock price. The operation of ocean going vessels carries inherent risks. These risks include the possibility of:•marines disaster;•environmental accidents;•cargo and property losses or damage;•business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverseweather conditions; and•piracy. These hazards may result in death or injury to persons, loss of revenues or property, environmental damage, higher insurance rates, damage to ourcustomer relationships, delay or rerouting. If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs areunpredictable and may be substantial. We may not have insurance that is sufficient to cover these costs or losses and may have to pay drydocking costs notcovered by our insurance. The loss of earnings while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, woulddecrease our earnings and reduce the amount of cash that we have available for dividends. In addition, space at drydocking facilities is sometimes limited andnot all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility or our vessels may be forced to travelto a drydocking facility that is not conveniently located to our vessels’ positions. Any of these circumstances or events could increase our costs or lower ourrevenues. The involvement of our vessels in an environmental disaster may harm our reputation as a safe and reliable vessel owner and operator. Our business has inherent operational risks, which may not be adequately covered by insurance. 42The operation of our company has certain unique risks. With a dry bulk carrier, the cargo itself and its interaction with the vessel can be anoperational risk. By their nature, dry bulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, dry bulk carriers areoften subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers.This treatment may cause damage to the vessel. Vessels damaged due to treatment during unloading procedures may be more susceptible to breach to the sea.Hull breaches in dry bulk carriers may lead to the flooding of the vessels’ holds. If a dry bulk carrier suffers flooding in its forward holds, the bulk cargo maybecome so dense and waterlogged that its pressure may buckle the vessel’s bulkheads leading to the loss of a vessel. If we are unable to adequately maintainour vessels we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition, resultsof operations and ability to pay dividends, if any, in the future. In addition, the loss of any of our vessels could harm our reputation as a safe and reliablevessel owner and operator. Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, bad weather, mechanical failures, humanerror, environmental accidents, war, terrorism, piracy and other circumstances or events. In addition, transporting cargoes across a wide variety ofinternational jurisdictions creates a risk of business interruptions due to political circumstances in foreign countries, hostilities, labor strikes and boycotts,the potential for changes in tax rates or policies, and the potential for government expropriation of our vessels. Any of these events may result in loss ofrevenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters. In the event of a casualty to a vessel or other catastrophic event, we will rely on our insurance to pay the insured value of the vessel or the damagesincurred. Through our management agreements with our technical managers, we procure insurance for the vessels in our fleet employed under time chartersagainst those risks that we believe the shipping industry commonly insures against. These insurances include marine hull and machinery insurance,protection and indemnity insurance, which include pollution risks and crew insurances, and war risk insurance. Currently, the amount of coverage forliability for pollution, spillage and leakage available to us on commercially reasonable terms through protection and indemnity associations and providers ofexcess coverage is $1 billion per vessel per occurrence. We have procured hull and machinery insurance, protection and indemnity insurance, which include environmental damage, pollution insurancecoverage, and war risk insurance for our fleet. We do not maintain, for our vessels, insurance against loss of hire, which covers business interruptions thatresult from the loss of use of a vessel. We may not be adequately insured against all risks. We may not be able to obtain adequate insurance coverage for ourfleet in the future, and we may not be able to obtain certain insurance coverage, including insurance against charter party defaults, that we have obtained inthe past on terms that are acceptable to us or at all. The insurers may not pay particular claims. Our insurance policies may contain deductibles for which wewill be responsible and limitations and exclusions which may increase our costs or lower our revenue. Moreover, insurers may default on claims they arerequired to pay.We cannot assure you that we will be adequately insured against all risks or that we will be able to obtain adequate insurance coverage at reasonablerates for our vessels in the future. For example, in the past more stringent environmental regulations have led to increased costs for, and in the future mayresult in the lack of availability of, insurance against risks of environmental damage or pollution. Additionally, our insurers may refuse to pay particularclaims. Any significant loss or liability for which we are not insured could have a material adverse effect on our financial condition. Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings. A government could requisition one or more of our vessels for title or for hire. Requisition for title occurs when a government takes control of avessel and becomes her owner, while requisition for hire occurs when a government takes control of a vessel and effectively becomes her charterer at dictatedcharter rates. Generally, requisitions occur during periods of war or emergency, although governments may elect to requisition vessels in other circumstances.Although we would be entitled to compensation in the event of a requisition of one or more of our vessels, the amount and timing of payment would beuncertain. Government requisition of one or more of our vessels may negatively impact our revenues. 43Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties, and an adverse effect on our business. We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed todoing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in fullcompliance with the FCPA. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees andagents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines,sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations orfinancial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating,and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management. Company Specific Risk Factors We have significantly increased our indebtedness, and if we default under our loan agreements, our lenders may act to accelerate our outstandingindebtedness under our credit facilities, which would impact our ability to continue to conduct our business. At December 31, 2017, our outstanding debt consists of the Norwegian Bond Debt of $200 million, the New First Lien Facility of $65 million andthe Ultraco Debt Facility of $61.2 million. The Norwegian Bond Debt matures on November 28, 2022, the New First Lien Facility matures on December 8,2022 and the Ultraco Debt Facility matures on October 31, 2022. Our Norwegian Bonds have a coupon rate of 8.25% per annum. Furthermore, if we fail tohave the Norwegian Bonds listed for trading within twelve months of the issue date, the rate on the Norwegian Bonds will increase by 0.50%.The term loan under the New First Lien Facility carries an interest rate of LIBOR plus 3.50% per annum. The term loan under the Ultraco DebtFacility carries an interest rate of LIBOR plus 2.95% per annum. We currently have an undrawn Super Senior Facility of $15 million which carries an interestrate of LIBOR plus 2.0% per annum and is subject to an annual commitment fee of 40% of the margin on the undrawn portion of the facility. As described under “Note 8. Debt” to the consolidated financial statements, the obligations under these agreements are secured by collateral, containa number of operating restrictions, covenants and events of default, and a breach of any of the covenants could result in an event of default under one or moreof these agreements, including as a result of cross default provisions, and subject to the terms of the inter creditor agreement and the loan agreements, theagents could proceed against the collateral granted to them to secure that indebtedness. The failure of our charterers to meet their obligations under our charter agreements, on which we depend for substantially all of our revenues, could causeus to suffer losses or otherwise adversely affect our business and ability to comply with covenants in our credit facilities. The ability and willingness of each of our counterparties to perform its obligations under a time charter agreement with us will depend on a numberof factors that are beyond our control and may include, among other things, general economic conditions, the condition of the dry bulk shipping industryand the overall financial condition of the counterparties. Charterers are sensitive to the commodity markets and may be impacted by market forces affectingcommodities, such as iron ore, coal, grain, and other minor bulks. In addition, in depressed market conditions, there have been reports of charterers, includingsome of our charter counterparties, defaulting on their obligations under charters, and our customers may fail to pay charter hire.Consistent with dry bulk shipping industry practice, we have not independently analyzed the creditworthiness of the charterers. Should acounterparty fail to honor its obligations under its charter with us, it may be difficult to secure substitute employment for such vessel at a similar charter rate.If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have amaterial adverse effect on our business, financial condition, results of operations and cash flows, if any, in the future, and compliance with covenants in ourcredit facilities.We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings, our ability to pay dividends ormeet our financial covenants on our indebtedness. We currently own a fleet of 47 vessels, of which all but one are employed for less than one year as of December 31, 2017, exposing us to fluctuationsin spot market charter rates. Historically, the dry bulk market has been volatile as a result of the many conditions and factors that can affect the price, supplyand demand for dry bulk capacity. The continuing global economic crisis may further reduce demand for transportation of dry bulk cargoes over longerdistances and supply of dry bulk vessels to carry44such dry bulk cargoes, which may materially affect our revenues, profitability and cash flows. The spot charter market may fluctuate significantly based uponsupply of and demand for vessels and cargoes. The successful operation of our vessels in the competitive spot charter market depends upon, among otherthings, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick upcargo. The spot market is very volatile, and, in the past, there have been periods when spot rates have declined below the operating cost of vessels. If futurespot charter rates decline, then we may be unable to operate our vessels trading in the spot market profitably, meet our obligations, including payments onindebtedness, or to pay dividends, if any, in the future. Furthermore, as charter rates for spot charters are fixed for a single voyage, which may last up toseveral weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits from such increases. Our ability to renew the charters on all of our 47 owned vessels, and the charter rates payable under any such replacement charters, will depend upon,among other things, economic conditions in the sectors in which our vessels operate at that time, changes in the supply of and demand for vessel capacityand changes in the supply of and demand for the seaborne transportation of energy resources. The laws of the Marshall Islands generally prohibit the payment of dividends other than from surplus (retained earnings and the excess ofconsideration received for the sale of shares above the par value of the shares) or while a company is insolvent or would be rendered insolvent by thepayment of such a dividend. We may not have sufficient surplus in the future to pay dividends and our subsidiaries may not have sufficient funds or surplusto make distributions to us. We can give no assurance that dividends will be paid at all. In addition, the declaration and payment of dividends, if any, will always be subject to the discretion of the board of directors, restrictions containedin our existing debt agreements and the requirements of Marshall Islands law. The timing and amount of any dividends declared will depend on, among otherthings, the Company's earnings, financial condition and cash requirements and availability, the ability to obtain debt and equity financing on acceptableterms as contemplated by the Company's growth strategy, the terms of its outstanding indebtedness and the ability of the Company's subsidiaries to distributefunds to it. The Company does not currently expect to pay dividends in the near term. Please see "Item 7. Management's Discussion and Analysis of FinancialCondition and Results of Operations—Dividends." We may have difficulty managing our planned growth properly and integrating our newly acquired vessels. The acquisition and management of the 47 vessels in our operating fleet have imposed, and additional dry bulk vessels that we may acquire in thefuture will impose, significant responsibilities on our management and staff. The addition of vessels to our fleet may require us to increase the number of ourpersonnel. Further, we are providing technical management services to all of our vessels in our fleet. We will also have to manage our customer base so thatwe can provide continued employment for our vessels upon the expiration of our existing time charters. We intend to continue to grow our business. Our future growth will primarily depend on:•locating and acquiring suitable vessels;•obtaining required financing on acceptable terms;•identifying and consummating acquisitions or joint ventures;•enhancing our customer base; and•managing our expansion.Growing any business by acquisition presents numerous risks, such as undisclosed liabilities and obligations, the possibility that indemnificationagreements will be unenforceable or insufficient to cover potential losses and difficulties associated with imposing common standards, controls, proceduresand policies, obtaining additional qualified personnel, managing relationships with customers and integrating newly acquired assets and operations intoexisting infrastructure. We cannot give any assurance that we will be successful in executing our growth plans or that we will not incur significant expensesand losses in connection with our future growth. Purchasing and operating secondhand vessels may result in increased operating costs and reduced fleet utilization. While we have the right to inspect previously owned vessels prior to purchase, such an inspection does not provide us with the same knowledgeabout their condition that we would have if these vessels had been built for and operated exclusively by us. A secondhand vessel may have conditions ordefects that we were not aware of when we bought the vessel and which may require us to incur costly repairs to the vessel. These repairs may require us to puta vessel into dry dock, which would reduce our fleet utilization. Furthermore, we usually do not receive the benefit of warranties on secondhand vessels.45 We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause usto suffer losses or otherwise adversely affect our business. We have entered into and may enter into in the future, among other things, charter agreements with our customers, credit facilities with banks andinterest rate swap agreements. Such agreements subject us to counter party risks. The ability of each of our counterparties to perform its obligations under acontract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, thecondition of the maritime industry, the overall financial condition of the counterparty, charter rates received for specific types of vessels, the supply anddemand for commodities such as iron ore, coal, grain, and other minor bulks and various expenses. Should a counter party fail to honor its obligations underagreements with us, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operationsand cash flows. The loss of one or more of our significant customers can affect our financial performance. We derive a significant part of our revenues from a small number of charterers. In 2017 and 2016, we did not have any customers who accounted forgreater than 10% of our revenue. However, in 2015, the Navig8 Pool accounted for approximately 17.2% of our revenue. Some of our charterers are privatelyowned companies for which limited credit and financial information was available to us in making our assessment of counter party risk when we entered intoour charter. In addition, the ability of each of our charterers to perform its obligations under a charter will depend on a number of factors that are beyond ourcontrol. These factors may include general economic conditions, the condition of the dry bulk shipping industry, the charter rates received for specific typesof vessels and various operating expenses. If one or more of these charterers terminates its charter or chooses not to re-charter our vessel or is unable toperform under its charter with us and we are not able to find a replacement charter, we could suffer a loss of revenues that could adversely affect our financialcondition, results of operations and cash available for distribution as dividends to our shareholders. In addition, we may be required to change the flagging orregistration of the related vessel and may incur additional costs, including maintenance and crew costs if a charterer were to default on its obligations. Ourshareholders do not have any recourse against our charterers. In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies withgreater resources, and as a result, we may be unable to employ our vessels profitably. Our vessels are employed in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from othervessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of dry bulk cargo by sea is intense anddepends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Due in part to the highly fragmentedmarket, competitors with greater resources could enter the dry bulk shipping industry and operate larger fleets through consolidations or acquisitions andmay be able to offer lower charter rates and higher quality vessels than we are able to offer. If we are unable to successfully compete with other dry bulkshipping companies, our results of operations would be adversely impacted. We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact theeffectiveness of our management and results of operations. Our success depends to a significant extent upon the abilities and efforts of our management team. Our success will depend upon our ability to retainkey members of our management team and to hire new members as may be necessary. The loss of any of these individuals could adversely affect our businessprospects and financial condition. Difficulty in hiring and retaining replacement personnel could have a similar effect. We do not maintain "key man" lifeinsurance on any of our officers.The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings. In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. Although the weighted average age ofthe 47 dry bulk vessels in our operating fleet as of December 31, 2017 was approximately 8.2 years, as our fleet ages, we will incur increased costs. Oldervessels are typically less fuel efficient and more expensive to maintain than more recently constructed vessels due to improvements in engine technology.Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or otherequipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment, to our vessels and mayrestrict the type of activities in which our vessels may engage. We cannot assure you that, as our vessels age, market conditions will justify thoseexpenditures or enable us to operate our vessels profitably during the remainder of their useful lives. Technological innovation could reduce our charter hire income and the value of our vessels.46 The charter hire rates and the value and operational life of a vessel are determined by a number of factors including the vessel's efficiency,operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includesthe ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel's physical life is related to its originaldesign and construction, its maintenance and the impact of the stress of operations. If new dry bulk carriers are built that are more efficient or more flexible orhave longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter hirepayments we receive for our vessels once their initial charters expire and the resale value of our vessels could significantly decrease. As a result, our business,results of operations, cash flows and financial condition could be adversely affected. We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us. We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personalinjury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, andother litigation that arises in the ordinary course of our business. Although we intend to defend these matters vigorously, we cannot predict with certainty theoutcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may have a materialadverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent which may have a material adverseeffect on our financial condition. We may have to pay tax on United States source income, which will reduce our earnings. Under the United States Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of a vessel owning orchartering corporation, such as ourselves and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end,in the United States is characterized as United States source shipping income and such income is subject to a 4% United States federal income tax withoutallowance for any deductions, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the Treasury regulationspromulgated thereunder. We believe that we qualify for this statutory tax exemption for our 2017 taxable year. It should be noted that with respect to any future taxable year,we can give no assurance that the operation of our vessels, which are under the control of third party charterers, will not change such that our United Statesfederal income tax liability would be substantially higher. However, since no more that 50% of our shipping income would be treated as derived from U.S.sources, our maximum tax liability under the 4% tax regime would never exceed 2% of our shipping income. We recorded a gain of $2.1 million on sale of our vessels which may have been subject to United States federal income tax, currently imposed atrates of up to 35% if we did not qualify for exemption from tax under Section 883. In addition, we may be subject to the 30% ''branch profits'' tax on suchgain, as determined after allowance for certain adjustments. For more information, see “Item 1. Business-United States Federal Income Taxation of OurCompany.”United States tax authorities could treat us as a "passive foreign investment company," which could have adverse United States federal income taxconsequences to United States holders. A foreign corporation will be treated as a "passive foreign investment company," or PFIC, for United States federal income tax purposes if either (1)at least 75% of its gross income for any taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of the corporation'sassets produce or are held for the production of those types of "passive income." For purposes of these tests, "passive income" includes dividends, interest,and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties inconnection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute"passive income." United States shareholders of a PFIC are subject to a disadvantageous United States federal income tax regime with respect to the incomederived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC. Based on our current method of operation, we do not believe that we have been, are or will be a PFIC with respect to any taxable year. In this regard,we intend to treat the gross income we derive or are deemed to derive from our time and voyage chartering activities as services income, rather than rentalincome. Accordingly, we believe that our income from our time and voyage chartering activities does not constitute "passive income," and the assets that weown and operate in connection with the production of that income do not constitute passive assets. 47There is, however, no direct legal authority under the PFIC rules addressing our method of operation and there is authority which characterizes timecharter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law willaccept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we wouldnot constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of our operations. If the IRS were to find that we are or have been a PFIC for any taxable year, our United States shareholders may face adverse United States taxconsequences and information reporting obligations. Under the PFIC rules, unless those shareholders made an election available under the Code (whichelection could itself have adverse consequences for such shareholders), such shareholders would be liable to pay United States federal income tax uponexcess distributions and upon any gain from the disposition of our common stock at the then prevailing income tax rates applicable to ordinary income plusinterest as if the excess distribution or gain had been recognized ratably over the shareholder’s holding period of our common stock. We may be subject to additional taxes, including as a result of challenges by tax authorities or changes in applicable law, which could adversely impactour business and financial results. We are subject to tax in certain jurisdictions in which we are organized, own assets or have operations. In computing our tax obligations in thesejurisdictions, we are required to take various tax accounting and reporting positions on matters that are not entirely free from doubt and for which we havenot received rulings from the governing authorities. We cannot assure you that, upon review of these positions, the applicable authorities will agree with ourpositions. A successful challenge by a tax authority, or a change in applicable law, could result in additional tax imposed on us, which could adverselyimpact our business and financial results. We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and tomake dividend payments. We are a holding company and our subsidiaries conduct all of our operations and own all of our operating assets. We have no significant assets otherthan the equity interests in our subsidiaries. As a result, our ability to satisfy our financial obligations and to make dividend payments in the future dependson our subsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our subsidiaries, our board of directors may exercise itsdiscretion not to declare or pay dividends. We do not intend to obtain funds from other sources to pay dividends. We do not currently expect to paydividends in the near term. As we expand our business, we may need to improve our operating and financial systems and will need to recruit suitable employees and crew for ourvessels. Our current operating and financial systems may not be adequate if we continue to expand the size of our fleet in the future, as we recently did in thesecond half of 2017 in connection with the Greenship Agreement and our attempts to improve those systems may be ineffective. In addition, if we furtherexpand our fleet, we will need to recruit suitable additional seafarers and shore side administrative and management personnel. We cannot guarantee that wewill be able to hire suitable employees as we expand our fleet. If we or our crewing agent encounters business or financial difficulties, we may not be able toadequately staff our vessels. If we are unable to grow our financial and operating systems or to recruit suitable employees as we expand our fleet, our financialperformance may be adversely affected and, among other things, the amount of cash available for distribution as dividends to our shareholders may bereduced. Investment in derivative instruments, such as forward freight and swap agreements, could result in losses. From time to time, we may take positions in derivative instruments, including FFAs and bunker swaps. FFAs and other derivative instruments maybe used to hedge a vessel owner's exposure to the charter market by providing for the sale of a contracted charter rate along a specified route and period oftime. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by an identified index, for the specified route and period,the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate, multiplied by thenumber of days in the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller thesettlement sum. If we take positions in FFAs or other derivative instruments and do not correctly anticipate charter rate movements over the specified routeand time period, we could suffer losses in the settling or termination of the FFA. This could adversely affect our results of operations and cash flows. During2017, we incurred a gain of $37,905 on FFAs and bunker swaps which was recorded in other expense in the consolidated statement of operations for the yearended December 31, 2017. In addition, we may enter into interest rate swaps to effectively convert a portion of our debt from a floating to a fixed-rate basis. Under these swapcontracts, exclusive of applicable margins, we pay fixed rate interest and receive floating-rate interest48amounts based on three-month LIBOR settings. Our hedging strategies, however, may not be effective and we may incur substantial losses if interest ratesmove materially differently from our expectations. In addition, our financial condition could be materially adversely affected to the extent we do not hedgeour exposure to interest rate fluctuations under our financing arrangements. Any hedging activities we engage in may not effectively manage our interest rateexposure or have the desired impact on our financial conditions or results of operations. At December 31, 2017, we had not entered into interest rate swaps. If the increase in LIBOR continues, it could affect our profitability, earnings and cash flow. If the spread between LIBOR and the prime lending rate widening it would affect the amount of interest payable on our debt, which in turn, couldhave an adverse effect on our profitability, earnings and cash flow. Furthermore, interest in most loan agreements in our industry has been based on published LIBOR rates. Recently, however, lenders have insisted onprovisions that entitle the lenders, in their discretion, to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we arerequired to agree to such a provision in future loan agreements, our lending costs could increase. We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections availableto us. Some of our vessels may be chartered to Chinese customers or from time to time on our charterers’ instructions, our vessels may call on Chineseports. Such charters and any additional charters that we enter into may be subject to new regulations in China that may require us to incur new or additionalcompliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees. Changes in laws and regulations,including with regards to tax matters, and their implementation by local authorities could affect our vessels chartered to Chinese customers as well as ourvessels calling to Chinese ports and could have a material adverse impact on our business, financial condition and results of operations.Risks Relating to Our Common Stock We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate law. Our corporate affairs are governed by our Third Amended and Restated Articles of Incorporation (the “Charter”) and Second Amended and RestatedBy-laws (the “Bylaws”) and by the Marshall Islands Business Corporations Act (the “BCA”). The provisions of the BCA resemble provisions of thecorporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. Therights and fiduciary responsibilities of directors under the laws of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilitiesof directors under statutes or judicial precedent in existence in the United States. The rights of shareholders of companies incorporated in the Marshall Islandsmay differ from the rights of shareholders of companies incorporated in the United States. While the BCA provides that it is to be interpreted according to thelaws of the State of Delaware and other states with substantially similar legislative provisions, there have been few, if any, court cases interpreting the BCA inthe Marshall Islands and we cannot predict whether Marshall Islands courts would reach the same conclusions as United States courts. Thus, you may havemore difficulty in protecting your interests in the face of actions by the management, directors or controlling shareholders than would shareholders of acorporation incorporated in a United States jurisdiction which has developed a relatively more substantial body of case law. The market price of our common shares has fluctuated widely and may continue to fluctuate in the future. The market price of our common shares has fluctuated widely since we became a public company in June 2005 and may continue to do so as a resultof many factors, including our actual results of operations and perceived prospects, the prospects of our competition and of the shipping industry in generaland in particular the dry bulk sector, differences between our actual financial and operating results and those expected by investors and analysts, changes inanalysts’ recommendations or projections, changes in general valuations for companies in the shipping industry, particularly the dry bulk sector, changes ingeneral economic or market conditions and broad market fluctuations. The public market for our common shares may not be active and liquid enough for you to resell our common shares in the future. We maintained our Nasdaq listing throughout our Chapter 11 proceeding. Since 2008, the stock market has experienced extreme price and volumefluctuations. If the volatility in the market continues or worsens, it could continue to have an adverse effect on the market price of our common shares andcould impact a potential sale price if holders of our common stock decide to sell their shares. 49 The seaborne transportation industry has been highly unpredictable and volatile. The market for common shares in this industry may be equallyvolatile. The market price of our common shares may be influenced by many factors, many of which are beyond our control, including:•actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;•announcements by us or our competitors of significant contracts, acquisitions or capital commitments;•mergers and strategic alliances in the shipping industry;•terrorist acts;•future sales of our common shares or other securities;•market conditions in the shipping industry;•economic and regulatory trends;•shortfalls in our operating results from levels forecast by securities analysts;•announcements concerning us or our competitors;•the general state of the securities market; and•investors’ perception of us and the dry bulk shipping industry. As a result of these and other factors, investors in our common stock may not be able to resell their shares at or above the price they paid for suchshares. These broad market and industry factors may materially reduce the market price of our common shares, regardless of our operating performance. Certain shareholders own large portions of our outstanding common stock, which may limit your ability to influence our actions. Certain shareholders currently hold significant percentages of our common stock. As of December 31, 2017, funds and/or managed accountsaffiliated with Oaktree Capital Management LP owned approximately 31%, funds and/or managed accounts affiliated with GoldenTree Asset ManagementLP owned approximately 18% of our common stock. To the extent a significant percentage of the ownership of our common stock is concentrated in a small number of holders, such holders will be ableto influence the outcome of any shareholder vote, including the election of directors, the adoption or amendment of provisions in our articles ofincorporation or by-laws and possible mergers, corporate control contests and other significant corporate transactions. This concentration of ownership mayhave the effect of delaying, deferring or preventing a change in control, merger, consolidation, takeover or other business combination involving us. Thisconcentration of ownership could also discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which couldin turn have an adverse effect on the market price of our common stock. Future sales of our common stock could cause the market price of our common stock to decline and could dilute our shareholders’ interests in theCompany. Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales could occur, may depress themarket price for our common stock. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future.Our Charter authorizes us to issue 700,000,000 shares of common stock, of which 70,394,307 and 73,090,233 shares were issued and outstanding as ofDecember 31, 2017 and March 9, 2018, respectively. As we did in 2016 and the first quarter of 2017, we may issue additional shares of our common stock inthe future. Our shareholders may incur dilution from any future equity offering and upon the issuance of additional shares of our common stock upon theexercise of options we have granted to certain of our executive officers or upon the issuance of additional shares of common stock pursuant to our equityincentive plan. In addition, we have a registration rights agreement in favor of certain of our shareholders. Sales of our common stock by one or more of thoseholders could lower the trading price of our shares.Our shareholders are limited in their ability to elect or remove directors. The Charter prohibits cumulative voting in the election of directors. The Bylaws require parties other than the board of directors to give advancewritten notice of nominations for the election of directors. The Charter also provides that directors may only be removed for cause upon the affirmative voteof a majority of the outstanding shares of capital stock entitled to vote for the election of directors. Newly created directorships resulting from an increase inthe number of directors and vacancies occurring in the board of directors for any reason may only be filled by a majority of the directors then in office, even ifless than a quorum exists. Our shareholders may take action only at Annual or Special Meetings.50 The Charter and the Bylaws provide that any action required or permitted to be taken by shareholders must be effected at a duly called annual orspecial meeting of shareholders. Except as otherwise mandated by law, shareholders may not act by written consent. Under the Bylaws, annual shareholder meetings will be held at a time and place selected by the board of directors. The meetings may be held in oroutside of the Marshall Islands. These provisions may impede shareholders’ ability to take actions with respect to the Company that they deem appropriate oradvisable. The Charter and the Bylaws provide that, except as otherwise required by law, special meetings of shareholders may be called at any time only by (i)the lead director (if any), (ii) the chairman of the board of directors, (iii) the board of directors pursuant to a resolution duly adopted by a majority of the boardstating the purpose or purposes thereof, or (iv) any one or more shareholders who beneficially owns, in the aggregate, 15% or more of the aggregate votingpower of all then-outstanding shares of Voting Stock. The notice of any such special meeting is to include the purpose or purposes thereof, and the businesstransacted at the special meeting is limited to the purpose or purposes stated in the notice (or any supplement thereto). These provisions may impede theability of shareholders to bring matters before a special meeting of shareholders. The board of directors may set a record date between 15 and 60 days before the date of any meeting to determine the shareholders that will beeligible to receive notice and vote at the meeting. Our shareholders are subject to advance notice requirements for shareholder proposals and director nominations The Bylaws provide that shareholders seeking to nominate candidates for election as directors or to bring business before an annual meeting ofshareholders must provide timely notice of their proposal in writing to the corporate secretary. To be timely, a shareholder's notice will have to be received atthe Company’s principal executive offices not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annualmeeting of shareholders; provided, however, that in the event that the annual meeting is called for a date that is not within 30 days before or after suchanniversary date, such as is the case for the 2018 annual meeting, notice by the shareholder must be received not later than the close of business on the tenthday following the day on which such notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made,whichever occurs first, in order for such notice by a shareholder to be timely. The Bylaws also specify requirements as to the form and content of ashareholder's notice. These advance notice requirements, particularly the 60 to 90 day requirement, may impede shareholders' ability to bring matters beforean annual meeting of shareholders or make nominations for directors at an annual meeting of shareholders. Certain super majority provisions in our organizational documents may discourage, delay or prevent changes to such documents. The Charter provides that a two-thirds vote is required to amend or repeal certain provisions of the Charter and Bylaws, including those provisionsrelating to: the number and election of directors; filling of board vacancies; resignations and removals of directors; director liability and indemnification ofdirectors; the power of shareholders to call special meetings; advance notice of director nominations and shareholders proposals; and amendments to theCharter and Bylaws. These super majority provisions may discourage, delay or prevent changes to the Charter or Bylaws.51ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES We do not own any real property. We lease office space at 300 First Stamford Place, Stamford CT 06902. In addition, we lease offices in Singaporeand Hamburg, Germany. Our interests in our dry bulk vessels are our only material properties. See “Item 1. Business—Our Fleet.” ITEM 3. LEGAL PROCEEDINGS See Note 10, “Commitments and Contingencies” to the Company’s consolidated financial statements set forth in Item 8, “Financial Statements andSupplementary Data” of this Form 10-K, for information regarding legal proceedings in which we are involved. ITEM 4. MINE SAFETY DISCLOSURE Not applicable.52PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES Common Stock The trading market for shares of our common stock is the Nasdaq Global Select Market, on which our shares are quoted under the symbol "EGLE.”The following table summarizes the quarter high and low sales prices per share of our common stock as reported on the Nasdaq Global Select Market for thetwo most recent fiscal years. For the period: High* Low*January 1, 2016 to March 31, 2016* $65.00 $7.20April 1, 2016 to June 30, 2016* $18.20 $6.40July 1, 2016 to September 30, 2016 $10.40 $5.49October 1, 2016 to December 31, 2016 $9.18 $4.12January 1, 2017 to March 31, 2017 $7.61 $4.91April 1, 2017 to June 30, 2017 $5.72 $4.24July 1, 2017 to September 30, 2017 $5.05 $4.25October 1, 2017 to December 31, 2017 $4.77 $4.18 * Adjusted for stock split on August 5, 2016. On March 9, 2018, the closing sale price of our common stock, as reported on the Nasdaq Global Select Market, was $5.16 per share. Holders. The number of shareholders of record of our common stock was approximately 150 on March 9, 2018, which does not include beneficial ownerswhose shares are held by a clearing agency, such as a broker or a bank. Payment of Dividends to Shareholders The Company did not make any dividend payments in 2017, 2016 and 2015. The declaration and payment of dividends in the future, if any, will besubject to the discretion of the board of directors, restrictions contained in our debt facilities, and the requirements of Marshall Islands law. The timing andamount of any dividends declared will depend on, among other things, the Company's earnings, financial condition and cash requirements and availability,the ability to obtain debt and equity financing on acceptable terms as contemplated by the Company's growth strategy, the terms of its outstandingindebtedness and the ability of the Company's subsidiaries to distribute funds to it. The Company does not currently expect to pay dividends in the nearterm. Please see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Dividends" and Note 8. “Debt” to theconsolidated financial statements. Equity Compensation Plan Information On October 15, 2014, the Company adopted the post-bankruptcy emergence Management Incentive Program, which provided for the distribution ofCompany equity in the form of shares of Company common stock, and options, to the participating senior management and other employees of thereorganized Company (the “2014 Plan”). There are 54,155 shares of common stock to be issued upon exercise of outstanding options and restricted sharesunder the 2014 Plan. Additionally there are 513,863 shares of common stock to be issued upon exercise of outstanding options and vesting of restrictedshares which were not granted under the 2014 Plan, but are subject to the terms of the 2014 Plan. On December 15, 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”) which replaced the 2014 Plan. Outstanding awardsunder the 2014 Plan will continue to be governed by the terms of the 2014 Plan until exercised, expired or otherwise terminated or cancelled. Under the termsof the 2016 Plan, a maximum of 5,348,613 shares may be issued. Any director, officer, employee or consultant of the Company or any of its subsidiaries(including any prospective officer or employee) is eligible to be designated to participate in the 2016 Plan.53The following table sets forth certain information as of December 31, 2017 regarding the 2016 Plan. The 2016 Plan was approved by ourshareholders on December 15, 2016. Number of Securities tobe issued upon exerciseof outstanding options,warrants and rights Weighted-averageexercise price ofoutstanding options,warrants and rights Number of securitiesremaining available forfuture issuance underequity compensationplans(excludingsecurities reflected incolumn (a))Plan Category (a)* (b) (c)*Equity compensation plans approved by security holders 3,439,096 $4.85 1,909,517Equity compensation plans not approved by security holders — — N/ATotal 3,439,096 4.85 1,909,517 * Consists of 5,348,613 shares eligible to be granted under the 2016 Plan.Company Common Stock Performance Graph The following graph illustrates a comparison of the cumulative total shareholder return (change in stock price plus reinvested dividends) of EagleBulk’s common stock with the Standard and Poor’s 500 Index and a peer group “Dry Index” consisting of Scorpio Bulkers Inc., Diana Shipping Inc., StarBulk Carriers Corp., Golden Ocean Group Ltd., Safe Bulkers and Genco Shipping and Trading Limited. The comparison graph assumes a $100 investment ineach of the Company's common stock, the Standard & Poor's 500 Index and the Dry Index peer group on October 16, 2014, the date of the Company'semergence from bankruptcy.54ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected financial data for the Successor for the years ended December 31, 2017, 2016, 2015 and for the period fromOctober 16, 2014 to December 31, 2014 and the Predecessor for the period January 1, 2014 to October 15, 2014 and the years ended December 31, 2013. Income Statement data in the table has been derived from the Company's audited financial statements and notes thereto for the years ended December 31,2017, 2016 and 2015 (Successor), the period from October 16, 2014 to December 31, 2014 (Successor) and for the period January 1, 2014 to October 15,2014 (Predecessor) and as of December 31, 2017 and 2016 (Successor) included herein and for the period from October 16, 2014 to December 31, 2014 andthe Predecessor for the period January 1, 2014 to October 15, 2014 and for the year ended December 31, 2013 and as of December 31, 2014 and 2013 notappearing in this Form 10-K. The data for the years ended December 31, 2017, 2016 and 2015, the period from October 16, 2014 to December 31, 2014 andfor the period January 1, 2014 to October 15, 2014 and as of December 31, 2017 and 2016 should be read in conjunction with the consolidated financialstatements, related notes and other financial information included herein. The period from October 16, 2014 to December 31, 2014 (Successor) and the periodfrom January 1, 2014 to October 15, 2014 (Predecessor) are distinct reporting periods as a result of our emergence from bankruptcy on October 15, 2014 asreported in our consolidated financial statements. (Dollar amounts in thousands except per Share amounts and Fleet Data)55 Successor PredecessorIncome Statement Data (a) 2017 2016 2015 Period from October16, 2014 to December 31,2014 Period from January1,2014 to October 15,2014 2013Revenues, net $236,785 $124,493 $103,857 $31,090 $123,150 $202,440Voyage expenses 62,351 42,094 23,832 6,262 14,704 26,423Vessel expenses 78,607 74,017 86,329 17,331 71,679 78,830Charter hire expenses 31,284 12,845 4,126 1,043 188 —Depreciation and Amortization 33,691 38,884 43,001 8,782 61,239 76,947General and Administrative Expenses 33,126 22,906 25,537 5,933 18,679 21,621Restructuring Charges — 5,869 — — — —Vessel Impairment* — 129,028 50,873 — — —(Gain)/loss on Sale of Vessels (2,135) 102 5,697 — — —Gain on time charter agreementtermination — — — — — (32,525)Total Operating Expenses 236,925 325,745 239,395 39,351 166,489 171,296 Interest expense 29,377 21,799 11,927 2,360 60,737 82,833Interest income (651) (215) (6) (2) (8) —Other (income)/expense (38) 687 838 884 — 18,832Reorganization expense — — — 46 427,735 —Loss on debt extinguishment ** 14,969 Net loss $(43,797) $(223,523) $(148,297) $(11,549) $(531,803) $(70,521) Share and Per Share Data Basic loss per share $(0.63) $(10.87) $(78.88) $(6.16) $(29.78) $(4.15)Diluted loss per share $(0.63) $(10.87) $(78.88) $(6.16) $(29.78) $(4.15)Weighted Average Shares Outstanding –Diluted 69,182 20,566 1,881 1,875 17,857 16,984Cash Dividends Declared per share — — — — — — Consolidated Cash Flow Data Net cash provided by/(used in) operatingactivities $7,389 $(45,434) $(43,787) $(279) $(19,465) $(354)Net cash provided by/(used in) investingactivities (155,250) (9,280) 10,252 4,206 (491) 2,317Net cash provided by /(used in) financingactivities 127,596 106,335 18,456 — (36,322) (400) * As of December 31, 2017, the Company evaluated if any impairment indicators existed as of December 31, 2017. Based on the evaluation, the Companydetermined that there were impairment indicators for 22 vessels in the Company's fleet for which the vessel prices based on vessel valuations received fromthird party brokers were lower than their carrying values. Based on our impairment analysis, we determined that as of December 31, 2017, the future cashflows expected to be earned by the 22 vessels on an undiscounted basis would exceed their carrying value and therefore no impairment charges were recordedin the consolidated financial statements. As of December 31, 2016, the Company intended to divest some of the older as well as less efficient vessels from itsfleet to achieve operating cost savings as well as potentially acquiring newer and more efficient vessels. The anticipated sale of such vessels in the next twoyears reduced our estimated holding period of the vessels resulting in an impairment charge. As a result, we reduced the carrying value of each vessel to itsfair market value as of December 31, 2016 and recorded an impairment charge of $122,860,600. An impairment charge was also recorded in 2015 and thensubsequently in the first quarter of 2016 for six other vessels which were subsequently sold.56** On December 8, 2017, the Company paid the amounts outstanding under the First Lien Facility and the Second Lien Facility by issuance of $200.0million of the Norwegian Bond Debt and $65 million of the New First Lien Facility. As a result, the Company recognized a $15.0 million loss on debtextinguishment in the fourth quarter of 2017. See “Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operation-Liquidityand Capital Resources” and “Note 8. Debt” to the consolidated financial statements. Successor PredecessorConsolidated Balance Sheet Data December 31,2017 December 31,2016 December 31,2015 December 31,2014(a) December 31,2013Current Assets $105,223 $104,265 $41,025 $76,591 $61,931Total Assets 808,350 686,382 786,603 913,877 1,723,414Total Liabilities 347,185 285,899 268,259 249,786 1,192,219Short-term Debt 4,000 — 15,625 15,625 1,174,044Long-term Debt 313,684 255,944 225,577 203,556 —Stockholders' Equity 461,165 400,483 518,344 664,091 531,195Other Data Capital Expenditures: Vessels and vessel improvements $176,603 $21,787 $1,747 $486 $92Drydocking costs incurred $2,579 $3,689 $11,142 $5,764 $3,638Ratio of Total Debt to Total Capitalization (b) 40.8% 39.0% 31.8% 24.8% 68.8%Fleet Data Number of Vessels in operating fleet 47 41 44 45 45Average Age of Fleet (in dwt weighted years) 8.2 8.7 8.4 8.0 7.0Fleet Ownership Days 16,293 15,408 16,186 16,425 16,425Charter-in under operating lease Days 3,353 1,494 382 91 —Fleet Available Days 19,245 16,695 16,151 16,325 16,305Fleet Operating Days 19,140 16,485 15,766 15,988 16,180Fleet Utilization Days 99.5% 98.8% 97.6% 97.9% 99.2% (a)The consolidated and other financial data for the year ended December 31, 2014 presents the results of operations for the period from October 16, 2014to December 31, 2014 (Successor) and the period from January 1, 2014 to October 15, 2014 (Predecessor). The period from October 16, 2014 toDecember 31, 2014 (Successor) and the period from January 1, 2014 to October 15, 2014 (Predecessor) are distinct reporting periods because of ouremergence from bankruptcy on October 15, 2014 as reported in our consolidated financial statements. As result of the bankruptcy, our capital structure,our financial statements and share and per share amounts are not comparable between the Successor and Predecessor. (b)Ratio of Total Debt to Total Capitalization was calculated as debt divided by capitalization (debt plus stockholders' equity).57ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidatedfinancial statements and related notes set forth in “Item 8. Financial Statements and Supplementary Data,” our consolidated financial data set forth in “Item 6.Selected Financial Data” and the risk factors identified in “Item 1A. Risk Factors” of this Annual Report. General Overview We are Eagle Bulk Shipping Inc., a Marshall Islands corporation incorporated on March 23, 2005 and headquartered in Stamford, Connecticut. Weown one of the largest fleets of Supramax/Ultramax dry bulk vessels in the world. Supramax/Ultramax vessels dry bulk are vessels which are constructed withon-board cranes, ranging in size from approximately 50,000 to 59,000 dwt and Ultramax dry bulk vessels range in size from 60,000 to 65,000 dwt. They areconsidered a sub-category of the Handymax segment typically defined as 40,000 to 65,000 dwt. We transport a broad range of major and minor bulk cargoes,including but not limited to coal, grain, ore, petcoke, cement and fertilizer, along worldwide shipping routes. As of December 31, 2017, we owned andoperated a modern fleet of 47 Handymax dry bulk vessels. We chartered-in a 61,400 dwt, 2013 built newbuilding Japanese vessel for approximately fouryears. In addition, the Company charters-in third-party vessels on a short to medium term basis.We are focused on maintaining a high quality fleet that is concentrated primarily in Supramax/ Ultramax dry bulk carriers. These vessels have thecargo loading and unloading flexibility of on-board cranes while offering cargo carrying capacities approaching that of Panamax dry bulk vessels, whichrange in size from 72,000 to 83,000 dwt and rely on port facilities to load and offload their cargoes. We believe that the cargo handling flexibility and cargocarrying capacity of the Supramax class vessels make them attractive to cargo interests and vessel charterers. The 47 vessels in our operating fleet, with anaggregate carrying capacity of 2,683,751 dwt, have an average age of 8.2 years as of December 31, 2017. RefinancingOn December 8, 2017, the Company, through certain of its wholly-owned subsidiaries, completed a refinancing of approximately $265,000,000under (i) the First Lien Facility and (ii) the Second Lien Facility, through (a) the New First Lien Facility of $65,000,000, and (b) the issuance by Shipco, theNorwegian Bond Debt of $200,000,000. In addition, Shipco entered into the Super Senior Facility of $15,000,000. For more information about the terms ofthe New First Lien Facility, the Norwegian Bank Debt and the Super Senior Facility, see “Note 8. Debt” to the consolidated financial statements.Corporate Reorganization In connection with the refinancing transactions, the Company consummated an internal reorganization. As part of the internal reorganization, EagleShipping transferred ownership of certain wholly-owned vessel-owning subsidiaries to Shipco, such that Shipco became the parent to 28 vessel-owningsubsidiaries. Additionally, all management and technical services will now be conducted under Eagle Bulk Management LLC, a newly-formed limitedliability company existing under the laws of the Republic of the Marshall Islands and a direct, wholly-owned subsidiary of the Company. Ultraco Debt Facility On June 28, 2017, Ultraco entered into the Ultraco Debt Facility, which provided for a multi-draw senior secured term loan facility in an aggregateprincipal amount of up to the lesser of (i) $61,200,000 and (ii) 40% of the lesser of (1) the purchase price of the nine Greenship Vessels, and (2) the fair marketvalue of the Greenship Vessels. The proceeds of the Ultraco Debt Facility were used for the purpose of financing a part of the acquisition cost of theGreenship Vessels.On December 29, 2017, Ultraco entered into the First Amendment to the Ultraco Debt Facility to increase the commitments for the purpose offinancing the acquisition of an additional vessel by New London Eagle LLC, a wholly-owned subsidiary of Ultraco and additional guarantor under theUltraco Debt Facility. The increase in the commitments was $8.6 million. Ultraco took delivery of the vessel in January 2018 and drew down $8.6 million.The Company paid a deposit of $2.2 million as of December 31, 2017.As of December 31, 2017, the Company has drawn $61.2 million under the Ultraco Debt Facility.58For more information about the terms of the Ultraco Debt Facility and the First Amendment, see “Note 8. Debt” to the consolidated financialstatements. The following are certain significant events with respect to our vessels that occurred during 2016 and 2017:•On April 26, 2016, the Company sold the vessel Peregrine for $2.6 million, after brokerage commissions and associated selling expenses, andrecorded a net loss of approximately $150,000 in the second quarter of 2016. A portion of the proceeds was used towards repayment of the term loanunder the First Lien Facility.•On June 16, 2016, the Company sold the vessel Falcon for $3.2 million, after brokerage commissions and associated selling expenses, and recordeda net loss of approximately $140,000 in the second quarter of 2016. A portion of the proceeds was used towards repayment of the term loan underthe First Lien Facility.•On July 12, 2016, the Company sold the vessel Harrier for $3.2 million, after brokerage commissions, associated selling expenses, and recorded aloss of $115,000. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility.•On September 6, 2016, the Company sold the vessel Kittiwake for $4.0 million, after brokerage commission, associated selling expenses, andrecorded a net gain of approximately $316,000 in the third quarter of 2016. A portion of the proceeds was used towards repayment of the term loanunder the First Lien Facility.•On September 30, 2016, Eagle Shipco signed a memorandum of agreement to acquire a 2016 NACKS built Ultramax 61,000 dwt. vessel for $18.85million. The Company took the delivery of the vessel, the Stamford Eagle, in the fourth quarter of 2016.•On November 14, 2016, the Company, through its subsidiary Eagle Bulk Shipco LLC, signed a memorandum of agreement to acquire a 2017 built64,000 dwt SDARI-64 Ultramax dry bulk vessel constructed at Chengxi Shipyard Co., Ltd for $17.9 million. The Company took delivery of thevessel, the Singapore Eagle, on January 11, 2017.•On January 6, 2017, the Company sold the vessel Redwing for $5.8 million, after brokerage commissions and associated selling expenses, andrecorded a net gain of approximately $0.1 million. The vessel was classified as an asset held for sale as of December 31, 2016. A portion of theproceeds was used towards repayment of the term loan under the First Lien Facility.•On April 6, 2017, the Company sold the vessel Sparrow for $4.8 million after brokerage commissions and associated selling expenses, and recordeda net gain of approximately $1.8 million. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility.•On July 27, 2017, the Company sold the vessel Woodstar for $7.8 million after brokerage commissions and associated selling expenses and recordeda gain for $0.2 million. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility.•On November 28, 2017, the Company sold the vessel Wren for $7.6 million after brokerage commissions and associated selling expenses andrecorded a gain of $0.03. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility.•On August 30, 2017, the Company signed a memorandum of agreement to sell the vessel Avocet for $9.6 million after brokerage commissions andassociated selling expenses. The vessel is expected to be delivered to the buyers in the second quarter of 2018. The Company expects to recognize again of $0.3 million. As of December 31, 2017, the Company reported the carrying amount of the vessel as vessel held for sale in its consolidatedbalance sheet.•On December 19. 2017, the Company, through Ultraco, signed a memorandum of agreement to acquire a 2015 built 64,000 dwt CROWN-83Ultramax dry bulk vessel constructed at Chengxi Shipyard Co., Ltd for $21.2 million. The Company took delivery of the vessel, the New LondonEagle, on January 9, 2018. As of December 31, 2017, the Company paid a deposit of $2.2 million for the purchase of the vessel.59 The following are certain significant events with respect to our vessels that occurred during 2015: •In April 2015, the Company decided to sell the Kite, a 1997-built Handymax, and reached an agreement to sell the vessel for $4.3 million afterbrokerage commissions payable to a third party. On May 7, 2015, the Company sold the vessel and realized a net loss of approximately $5.7 millionin the second quarter of 2015.•On May 20, 2015, the Company delivered a 90 day termination notice to Navig8 Pool to terminate the pool arrangements for all of its vessels in theNavig8 Pool. The notice of termination was given pursuant to the terms of the Company’s pool agreement.•On August 24, 2015, the Company provided three months’ notice to V. Ships Limited to terminate the technical management contract. TheCompany completed the transfer of all vessels to in-house technical management during the first quarter of 2016. Business Strategy and Outlook: We believe our strong balance sheet allows us the flexibility to opportunistically make investments in the dry bulk segment that will driveshareholder growth. In order to accomplish this, we intend to:•Maintain a highly efficient and the high quality fleet in the dry bulk segment.•Maintain a revenue strategy that takes advantage of a rising rate environment and at the same time mitigate risk in a declining rate environment.•Maintain a cost structure that allow us to be competitive in all economic cycles without sacrificing safety and maintenance.•Continue to grow our relationships with our charterers and vendors•Continue to invest in our on-shore operations and development of processes. Our financial performance is based on the following key elements of our business strategy: (1)concentration in one vessel category: Supramax/Ultramax dry bulk vessels, which we believe offer certain size, operational and geographicaladvantages relative to other classes of dry bulk vessels, such as Handymax, Panamax and Capesize vessels,(2)An active owner-operator model where we seek to operate our own fleet and develop contractual relationships directly with cargo interests. Theserelationships and the related cargo contracts have the dual benefit of providing greater operational efficiencies and act as a balance to the Company’snaturally long position to the market. Notwithstanding the focus on voyage chartering, we consistently monitor the dry bulk shipping market and, basedon market conditions, will consider taking advantage of long-term time charters at higher rates when appropriate.(3)Maintain high quality vessels and improve standards of operation through improved standards and procedures, crew training and repair and maintenanceprocedures.We have employed all of our vessels on time and voyage charters. The following table represents certain information about our revenue earningcharters on our operating fleet as of December 31, 2017: Vessel YearBuilt Dwt CharterExpiration Daily CharterHire Rate Avocet 2010 53,462 Drydock (1) Bittern 2009 57,809 Jan 2018 Voyage Canary 2009 57,809 Feb 2018 $8,000 Cardinal 2004 55,362 Mar 2018 $14,000 60Condor 2001 50,296 Jan 2018 $13,000 Crane 2010 57,809 Feb 2018 $9,500 (2) Crested Eagle 2009 55,989 Jan 2018 Voyage Crowned Eagle 2008 55,940 Feb 2018 $12,000 Egret Bulker 2010 57,809 Feb 2018 $17,500 Fairfield Eagle 2013 63,301 Jan 2018 $12,500 Gannet Bulker 2010 57,809 Jan 2018 Voyage Greenwich Eagle 2013 63,301 Jan 2018 $21,500 Golden Eagle 2010 55,989 Feb 2018 $2,610 (3) Goldeneye 2002 52,421 Jan 2018 $18,750 Grebe Bulker 2010 57,809 Jan 2018 $11,100 Groton Eagle 2013 63,200 Nov 2018 $10,250 Hawk I 2001 50,296 Mar 2018 Voyage Ibis Bulker 2010 57,775 Jan 2018 Voyage Imperial Eagle 2010 55,989 Feb 2018 Voyage Jaeger 2004 52,248 Jan 2018 Voyage Jay 2010 57,802 Jan 2018 $21,750 Kestrel I 2004 50,326 Jan 2018 $6,325 Kingfisher 2010 57,776 Feb 2018 Voyage Madison Eagle 2013 63,303 Feb 2018 Voyage Martin 2010 57,809 Jan 2018 $13,250 Merlin 2001 50,296 Jan 2018 Voyage Mystic Eagle 2013 63,301 Feb 2018 $2,180 (4) Nighthawk 2011 57,809 Apr 2018 $2,350 (5)61 Oriole 2011 57,809 Mar 2018 $2,450 (6) Osprey I 2002 50,206 Jan 2018 $11,000 Owl 2011 57,809 Jan 2018 Voyage Petrel Bulker 2011 57,809 Jan 2018 Voyage Puffin Bulker 2011 57,809 Mar 2018 $2,411 (7) Roadrunner Bulker 2011 57,809 Feb 2018 $12,750 Rowayton Eagle 2013 63,301 Jan 2018 $19,200 Sandpiper Bulker 2011 57,809 Feb 2018 $4,350 (8) Singapore Eagle 2017 61,530 Jan 2018 Voyage Shrike 2003 53,343 Jan 2018 $4,500 Skua 2003 53,350 Mar 2018 $11,250 Southport Eagle 2013 63,301 Jan 2018 Voyage Stamford Eagle 2016 61,530 Jan 2018 $5,650 Stellar Eagle 2009 55,989 Jan 2018 Voyage Stonington Eagle 2012 63,301 Oct 2019 $11,650 Tern 2003 50,200 Feb 2018 Voyage Thrasher 2010 53,360 Jan 2018 Voyage Thrush 2011 53,297 Jan 2018 $10,000 Westport Eagle 2015 63,344 Feb 2018 Voyage (1)The vessel is contracted to perform a time charter after the drydock at a rate of $11,400.(2)The vessel is contracted to continue the existing time charter at an increased charter rate of $11,000 after January 14, 2018.(3)The vessel is contracted to continue the existing time charter at an increased charter rate of $11,000 after January 23, 2018.(4)The vessel is contracted to continue the existing time charter at an increased charter rate of $12,000 after January 16, 2018.62(5)The vessel is contracted to continue the existing time charter at an increased charter rate of $10,000 after March 10, 2018.(6)The vessel is contracted to continue the existing time charter at an increased charter rate of $10,500 after March 10, 2018.(7)The vessel is contracted to continue the existing time charter at an increased charter rate of $10,500 after February 18, 2018.(8)The vessel is contracted to continue the existing time charter at an increased charter rate of $9,500 after February 28, 2018.Market Overview The international shipping industry is highly competitive and fragmented with no single owner accounting for more than 5% of the on-the-waterfleet. As of December 31, 2017, there are approximately 11,116 dry bulk carriers (over 10,000 dwt) totaling 817 million dwt. We compete with other(primarily private) owners of dry bulk vessels in the Handysize, Supramax, and Panamax asset classes. Competition in the dry bulk trade is robust. Demand is a function of world economic conditions and the consequent requirement for commodities,production and consumption patterns, as well as events, which interrupt production, trade routes, and consumption. We compete for charters based on price,vessel location, size, age, and condition, as well as on our reputation as an owner and operator. Customers, or charterers, tend to prefer modern vessels (overolder ships) due to their greater operational reliability, lower fuel consumption, and improved built-designs complying with more recent regulationstandards. Consequently, owners of large modern fleets tend to have a competitive advantage over owners operating older ships. Our strategy is to focus on the Supramax/Ultramax asset class, which is part of the broader Handymax segment, defined as dry bulk vessels between40,000 to 65,000 dwt. Supramax/Ultramax vessels range in size from approximately 50,000 to 65,000 dwt. These vessels have the cargo loading andunloading flexibility offered by their on-board cranes, while the cargo carrying capacity approaches that of Panamax, which ranges in size between 72,000and 83,000 dwt and which require onshore facilities to load and offload their cargoes. We believe that the cargo handling flexibility and cargo carryingcapacity of the Supramax/Ultramax class makes it the preferred type of ship attractive to potential charterers. All 47 of our owned vessels, as of December 31,2017, range in size between 50,000 and 64,000 dwt. The supply of dry bulk vessels depends primarily on the level of the orderbook, the fleet age profile, and the operating efficiency of the existingfleet. As of December 2017, 8% of the world Handymax fleet was 20 years or older, while the newbuilding orderbook stood at 6.5% of the (Handymax) on-the-water fleet. The 47 vessels in our operating fleet have an average age of approximately 8.2 years as of December 31, 2017. The typical trading life of aHandymax vessel is approximately 25 years.The Handymax Market In 2017, drybulk global market continued to recover from a historic market low from early 2016. Trade demand grew by 4% in 2017, as compared toan increase of 1.2% in 2016. The improvement in demand was primarily driven by an increase in trades relating to iron ore, coal and grain as well as theminor bulks. On the supply side, net fleet growth (newbuilding deliveries less scrapping) amounted to 2.9% for 2017, as compared to 2.3% for the year prior.Although 2017 newbuilding deliveries decreased by 108 vessels, or 20% from the prior year, scrapping decreased by a greater amount causing net fleetgrowth to increase slightly year-on-year. Scrapping totaled 214 vessels in 2017, as compared to 408 in 2016, representing a drop of 48%. The BalticSupramax Index (“BSI”), a dry bulk index based on 52,000 dwt vessels, averaged $9,185 for 2017. The improvement in rates during the year was driven byincreased demolition (of older vessels), lower supply growth, and higher iron ore and coal flows into China. Looking ahead, newbuilding deliveries for 2018 (and beyond) are expected to continue their downward trend, with the orderbook currently standingat approximately 10% of the existing fleet. Drybulk trade, which tends to be correlated to global GDP, is expected to improve by approximately 2% in 2018,driven by increased flows in iron ore, coal, grains, and minor bulks.63Critical Accounting Policies and Estimates The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which havebeen prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”). The preparation of those financialstatements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosureof contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions andconditions. Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results underdifferent assumptions and conditions. We have described below what we believe are our most critical accounting policies, because they generally involve acomparatively higher degree of judgment in their application. For a description of all our accounting policies, see Note 3. “Significant Accounting Policies”to our consolidated financial statements included herein. Revenue Recognition Revenues are generated from time charters, voyage charters and commercial pool arrangements. Time charter revenues are recognized on a straight-line basis over the term of the respective time charter agreements as service is provided. Voyage revenues for cargo transportation are recognized ratably overthe estimated relative transit time of each voyage. Voyage revenue is deemed to commence upon the completion of discharge of the previous charterer’scargo and is deemed to end upon the completion of discharge of the current cargo, provided an agreed non-cancellable charter between the Company and thecharterer is in existence, the charter rate is fixed and determinable, and collectability is reasonably assured. Revenue under voyage charters will not berecognized until a charter has been agreed even if the vessel has discharged its previous cargo and is proceeding to an anticipated port of loading. Revenues generated from time charters linked to the Baltic Supramax index and/or revenues generated from profit sharing arrangements arerecognized over the term of the respective time charter agreements as service is provided and the profit sharing is fixed and determinable. For the Company’s vessel operating in a Commercial Pool, revenues and voyage expenses are pooled and allocated to each pool participant under atime charter agreement basis in accordance with an agreed-upon formula. The formula in the pool agreement for allocating gross shipping revenues net ofvoyage expenses is based on points allocated to participants’ vessels based on cargo carrying capacity and other technical characteristics, such as speed andfuel consumption. We had one vessel operating in a commercial pool until April 2017. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”),which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue whenpromised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goodsor services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within therevenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, andinterim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. InMay 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers. This update provides further guidance onapplying collectability criterion to assess whether the contract is valid and represents a substantive transaction on the basis whether a customer has the abilityand intention to pay the promised consideration. The requirements of this standard include an increase in required disclosures. Management has not yetselected a transition method and is currently analyzing the impact of the adoption of this guidance on the Company’s consolidated financial statements,including assessing changes that might be necessary to information technology systems, processes and internal controls to capture new data and addresschanges in financial reporting. The Company believes that the adoption of the standard will impact the timing of recognition of revenue. Management willapply the modified retrospective transition method and will recognize the cumulative effect of adopting this standard as an adjustment to the openingbalance of retained earnings as of January 1, 2018. Prior periods will not be retrospectively adjusted. The Company continues to make progress in itsimplementation and assessment of the new revenue standard. While the assessment is still ongoing, based on the progress made to date, the Company expectsthat the timing of recognition of revenue for certain ongoing charter contracts will be impacted as well as the timing of recognition of certain voyage relatedcosts. While the assessment of certain effects of the adoption of ASU 2014-09 are ongoing, the timing of recognition will primarily impact spot voyagecharters. Under ASU 2014-09, revenue will be recognized from when the vessel arrives at the load port64until the completion of discharge at the discharge port instead of recognizing revenue from the discharge of the previous voyage provided an agreed non-cancellable charter between the Company and the charterer is in existence, the charter rate is fixed and determinable, and collectability is reasonably assured.The financial impact of adoption will depend on the number of spot voyages and time charter arrangements as well as their percentage of completion atJanuary 1, 2018. The Company expects that the adoption of ASU 2014-09 will result in an increase in the opening Accumulated Deficit balance as of January1, 2018 in the Consolidated Balance Sheet of approximately $0.5 million to $1.3 million as a result of the adjustment of Revenue and Voyage expenses. Theabove estimate could potentially change upon further evaluation. Additionally, the Company is currently evaluating the adjustment, if any, to otherexpenses such as Vessel expenses in the Consolidated Statement of Operations and the additional presentation and disclosure requirements of ASU 2014-09on our consolidated financial statements. Revenue is based on contracted charter parties, including spot-market related time charters for which rates fluctuate based on changes in the spotmarket. However, there is always the possibility of dispute over terms and payment of hires and freights. In particular, disagreements may arise as to theresponsibility for third party costs incurred by the customer and revenue due to us as a result. Additionally, there are certain performance parameters includedin contracted charter parties, which if not met, can result in customer claims. Accordingly, we periodically assess the recoverability of amounts outstandingand estimate a provision if there is a possibility of non-recoverability. At each balance sheet date, we provide a provision based on a review of all outstandingcharter receivables. Although we believe our provisions to be reasonable at the time they are made, it is possible that an amount under dispute is notultimately recovered and the estimated provision for doubtful accounts is inadequate. Vessel Lives and Impairment The Company estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard to the originalowner. In addition, the Company estimates the scrap rate to be $300 per lwt, to compute each vessel's salvage value, which is based on the 15-year averagescrap value of steel. The carrying values of the Company's vessels may not represent their fair market value at any point in time since the market prices of second-handvessels tend to fluctuate with changes in charter rates and the cost of new buildings. Historically, both charter rates and vessel values tend to be cyclical. Weevaluate the carrying amounts and periods over which long-lived assets are depreciated to determine if events have occurred which would requiremodification to their carrying values or useful lives. In evaluating useful lives and carrying values of long-lived assets, we review certain indicators ofpotential impairment, such as vessel sales and purchases, business plans and overall market conditions. If indicators of impairment are present, we perform an analysis of the undiscounted projected net operating cash flows for each vessel and compare itto the vessel’s carrying value. This assessment is made at the individual vessel level since separately identifiable cash flow information for each vessel isavailable. In developing estimates of future cash flows, the Company must make assumptions about future charter rates, ship-operating expenses, and theestimated remaining useful lives of the vessels. These assumptions are based on historical trends as well as future expectations. Specifically, we utilize therates currently in effect for the duration of their current time charters, without assuming additional profit sharing. For periods of time where our vessels are notfixed on time charters, we utilize an estimated daily time charter equivalent for our vessels’ unfixed days based on a historical average of the last twenty fiveyears of one to three years’ time charters, though we consider whether using a ten or fifteen year average would result in a materially different conclusion.Actual equivalent dry bulk shipping rates are currently lower than the estimated rate. We believe current rates have been driven by short-term disruptions indemand and a slowdown in the availability of global credit. The projected net operating cash flows are determined by considering the future charter revenuesfrom existing time charters for the fixed fleet days and for the unfixed days, projected FFA rates up to 2019 and an estimated daily time charter equivalentover the estimated remaining life of the vessel, assumed to be 25 years from the delivery of the vessel from the shipyard, reduced by brokerage commissions,expected outflows for vessels’ maintenance and vessel operating expenses (including planned drydocking and special survey expenditures) and capitalexpenditures adjusted annually for inflation.As of December 31, 2017, the Company evaluated if any impairment indicators existed as of December 31, 2017. Based on the evaluation, theCompany determined that there were impairment indicators for 22 vessels in the Company's fleet for which the vessel prices based on vessel valuationsreceived from third party brokers were lower than their carrying values. The Company considered this to be an impairment indicator and performed animpairment test on the 22 vessels.Of the inputs that the Company uses for its impairment analysis, future time charter rates are the most significant and most volatile. We utilizehistorical averages as discussed above in our impairment tests due to the highly cyclical nature of the drybulk shipping industry. Our vessels range from verynew to fifteen years old, and we believe that utilizing rates65over a long period of time incorporates numerous shipping cycles and reflects our strategy of operating our vessels over a long time period, and in line withthe overall useful economic life of our vessels. As disclosed elsewhere herein, we also consider whether utilizing ten or fifteen year averages would impactour impairment assessment. Then ten and fifteen year averages are higher than our estimate and therefore will impact our impairment test positively. Ourvessels remain fully utilized and have a relatively long average remaining useful life of approximately 16.8 years in which to provide sufficient cash flows onan undiscounted basis to recover their carrying values as of December 31, 2017. Management will continue to monitor developments in charter rates in ourparticipatory markets with respect to the expectation of future rates over an extended period. A comparison of the average estimated daily time charter equivalent rate used in our impairment analysis with the average break even rate at whichthe undiscounted cash flows for all of our vessels will be lower than their carrying value as of December 31, 2017 (“average break even rate”) for our vesselsis presented below:Vessel Class Average estimated daily timecharter rate used Percentage decline fromaverage estimated dailytime charter rate used in impairmenttest at whichpoint impairment wouldbe recordedSupramax $11,209 (28.6)%For the purpose of presenting our investors with additional information to determine how the Company’s future results of operations may beimpacted in the event that daily time charter rates do not improve from their current levels in future periods, we set forth in the table below analysis thatshows the 1 year, 3 year, 5 year and 10 year averages blended rates and the effect of the use of each of these rates would have on the Company’s impairmentanalysis: Incrementalnumber of vessels Potential IncrementalImpairment $ (in millions)1 year historical average — —3 year historical average 22 122.05 year historical average 8 43.010 year historical average — —15 year historical average — — Management does not believe that one year, three year, and five year historical average is reflective of the cyclical nature of shipping business,which tends to have cycles much longer than one, three or five years.Based on our impairment analysis, we determined that as of December 31, 2017, the future cash flows expected to be earned by the 22 vessels on anundiscounted basis would exceed their carrying value and therefore no impairment charges were recorded in the consolidated financial statements. As of December 31, 2016, as part of our fleet renewal program, management considered it probable that we would divest some of our older vesselsas well as certain less efficient vessels from its fleet to achieve operating cost savings. The Company identified two groups of vessels. Group 1 vessels wereselected based on the shipyard they were built and their technical specifications. The group consists of five sister ships constructed in the Dayang shipyardwith 53,000 dwt. These vessels were identified by management as having poorer fuel efficiency, among other reasons, compared to their peers. The secondgroup of 11 vessels are older than 13 years and less than 53,000 dwt. Based on our projected undiscounted cash flows prior to sale, factoring the probabilityof sale, such vessels were determined to be impaired, and written down to their current fair value as of December 31, 2016, which was determined byobtaining broker quotes from two unaffiliated shipbrokers. As a result, we recorded an impairment charge of $122,860,600 in the fourth quarter of 2016. Thecarrying value of these vessels prior to impairment was $234,860,600. In addition to the above, in 2015, we identified six vessels as probable sales, andrecognized an impairment charge in 2015 of $50,872,734. As the value of such vessels further declined in the first quarter of 2016, we recorded an additionalimpairment charge of $6,167,262 in that quarter. Out of the six vessels initially identified in 2015, all vessels have been sold as of December 31, 2017. Out ofthe sixteen vessels impaired in 2016, two vessels were sold during 2017 and a memorandum of sale agreement was signed on the third one. The Companyexpects to deliver the vessel to the buyers in the second quarter of 2018.66 Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions arehighly subjective. Charter rates may remain at depressed levels for some time, which could adversely affect our revenue and profitability, and futureassessments of vessel impairment. In the event that any future impairment were to occur, we would determine the fair value of the related asset and record acharge to operations calculated by comparing the asset's carrying value to its estimated fair value. We estimate fair value primarily through the use of thirdparty valuations performed on an individual vessel basis. Such valuations are not necessarily the same as the amount any vessel may bring upon sale, whichmay be more or less, and should not be relied upon as such.The table set forth below indicates the carrying value of each of our vessels as of December 31, 2017 and 2016, which we believe, based on brokerquotes recently obtained, have a basic charter free market value below its carrying value. Noted below the table is the aggregate difference between thecarrying value and the basic market value, which represents the approximate amount by which we believe we would have to reduce our net income if we soldall of such vessels, excluding commissions, as of December 31, 2017, on industry standard terms, in cash transactions, and to a willing buyer where we are notunder any compulsion to sell, and where the buyer is not under any compulsion to buy. Additionally, given the current dynamic in the dry bulk market, werewe to sell a vessel, we might not be able to realize proceeds consistent with the amounts disclosed below. 67 Dwt YearPurchased Carrying Value*as of December 31, 2017 Carrying Value*as of December 31, 2016Dry bulk Vessels BITTERN 57,809 2009 $17.2 million * $17.9 million*CANARY 57,809 2009 $17.2 million * $18.0 million*CARDINAL 55,362 2005 $7.1 million $7.5 million*CONDOR 50,296 2005 $4.6 million $4.7 million*CRANE 57,809 2010 $18.2 million * $19.1 million*CRESTED EAGLE 55,989 2009 $20.5 million * $21.6 million*CROWNED EAGLE 55,940 2008 $19.2 million * $20.3 million*EGRET BULKER 57,809 2010 $18.3 million * $19.1 million*FAIRFIELD EAGLE 63,301 2013 $17.1 million —GANNET BULKER 57,809 2010 $18.1 million * $18.9 million*GOLDEN EAGLE 55,989 2010 $21.8 million * $22.9 million*GOLDENEYE 52,421 2008 $5.3 million $5.6 million*GREBE BULKER 57,809 2010 $18.1 million * $18.9 million*GREENWICH EAGLE 63,301 2013 $16.9 million —GROTON EAGLE 63,200 2013 $16.9 million —HAWK I 50,296 2005 $4.4 million $4.7 million*IBIS BULKER 57,775 2010 $18.1 million * $18.9 million*IMPERIAL EAGLE 55,989 2010 $21.8 million * $22.9 million*JAEGER 52,248 2006 $6.3 million $6.7 million*JAY 57,802 2010 $18.1 million * $18.9 million*KESTREL 50,326 2006 $6.7 million $6.9 million*KINGFISHER 57,776 2010 $18.1 million * $18.9 million*MADISON EAGLE 63,303 2013 $17.2 million —MARTIN 57,809 2010 $18.1 million * $18.9 million*MERLIN 50,296 2005 $4.5 million $4.7 million*MYSTIC EAGLE 63,301 2013 $17.0 million —NIGHTHAWK 57,809 2012 $19.0 million * $19.9 million*ORIOLE 57,809 2012 $19.1 million * $19.9 million*OSPREY I 50,206 2005 $5.3 million $5.5 million*OWL 57,809 2012 $19.1 million * $19.9 million*PETREL BULKER 57,809 2012 $19.1 million * $19.9 million*PUFFIN BULKER 57,809 2012 $19.1 million * $19.9 million*ROADRUNNER BULKER 57,809 2012 $19.1 million * $19.9 million*ROWAYTON EAGLE 63,301 2013 $17.0 million —SANDPIPER BULKER 57,809 2012 $19.1 million * $19.9 million*SHRIKE 53,343 2007 $6.5 million $6.8 million*SINGAPORE EAGLE 61,530 2017 $18.5 million —SKUA 53,350 2007 $6.5 million $6.8 million*SOUTHPORT EAGLE 63,301 2013 $16.9 million —STELLAR EAGLE 55,989 2009 $20.6 million * $21.6 million*STONINGTON EAGLE 63,301 2012 $16.9 million —STAMFORD EAGLE 61,530 2016 $18.3 million $18.9 millionTERN 50,200 2006 $6.0 million $6.4 million*THRASHER 53,360 2010 $9.2 million $9.6 million*THRUSH 53,297 2012 $10.4 million $10.8 million*WESTPORT EAGLE 63,344 2008 $17.0 million $15.6 million*Total DWT 2,630,289 *Indicates dry bulk carriers for which we believe, as of December 31, 2017 and 2016, the basic charter-free market value is lower than the vessel’s carryingvalue. We believe that the aggregate carrying value of these vessels exceed their December 31, 2017 and 2016 aggregate basic charter-free market value byapproximately $122 million and $180 million, respectively. 68Deferred Drydock Cost There are two methods that are used by the shipping industry to account for drydockings: (a) the deferral method where drydock costs are capitalizedwhen incurred and amortized over the period to the next scheduled drydock; and (b) expensing drydocking costs in the period it is incurred. We use thedeferral method of accounting for drydock expenses. Under the deferral method, drydock expenses are capitalized and amortized on a straight-line basis untilthe next drydock, which we estimate to be a period of two to five years. We believe the deferral method better matches costs with revenue than expensing thecosts as incurred. We use judgment when estimating the period between drydock performed, which can result in adjustments to the estimated amortization ofdrydock expense. If the vessel is disposed of before the next drydock, the remaining balance in deferred drydock is written-off to the gain or loss upondisposal of vessels in the period when contracted. We expect that our vessels will be required to be drydocked approximately every 30 months for vesselsolder than 15 years and 60 months for vessels younger than 15 years. Costs deferred as part of the drydocking include direct costs that are incurred as part of the drydocking to meet regulatory requirements. Duringdrydocking, we capitalize into the cost basis of the vessel any expenditures that add economic life to the vessel, increase the vessel’s earnings capacity orimprove the vessel’s efficiency. Expenditures for normal maintenance and repairs, whether incurred as part of the drydocking or not, are expensed as incurred.Unamortized drydocking costs are written off as drydocking expense if the vessels are drydocked earlier than the applicable amortization period. Vessel Acquisitions Where we identify any intangible assets or liabilities associated with the acquisition of a vessel, we record all identified tangible and intangibleassets or liabilities at fair value. Fair value is determined by reference to market data and the amount of expected future cash flows. We value any asset orliability arising from the market value of the time charters assumed when an acquired vessel is delivered to us. Where we have assumed an existing charter obligation or enter into a time charter with the existing charterer in connection with the purchase of avessel at charter rates that are less than market charter rates, we record a liability in fair value below contract value of time charters acquired based on thedifference between the assumed charter rate and the market charter rate for an equivalent vessel. Conversely, where we assume an existing charter obligationor enter into a time charter with the existing charterer in connection with the purchase of a vessel at charter rates that are above market charter rates, we recordan asset in fair value above contract value of time charters acquired, based on the difference between the market charter rate and the contracted charter rate foran equivalent vessel. This determination is made at the time the vessel is delivered to us, and such assets and liabilities are amortized to revenue over theremaining period of the charter. The determination of the fair value of acquired assets and assumed liabilities requires us to make significant assumptions andestimates of many variables including market charter rates, expected future charter rates, future vessel operation expenses, the level of utilization of ourvessels and our weighted average cost of capital. The use of different assumptions could result in a material change in the fair value of these items, whichcould have a material impact on our financial position and results of operations. In the event that the market charter rates relating to the acquired vessels arelower than the contracted charter rates at the time of their respective deliveries to us, our net earnings for the remainder of the terms of the charters may beadversely affected although our cash flows will not be so affected. Results of Operations for years ended December 31, 2017, 2016 and 2015 Factors Affecting our Results of Operations The following tables represent the operating data and certain financial statement data for the years ended December 31, 2017, 2016 and 2015 on aconsolidated basis.We believe that the important measures for analyzing future trends in our results of operations consist of the following: 69 For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Ownership Days 16,293 15,408 16,186Chartered-in Days 3,353 1,494 382Total 19,646 16,902 16,568Available Days 19,245 16,695 16,151Operating Days 19,140 16,485 15,766Fleet Utilization 99.5% 98.7% 97.6% •Ownership days: We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us.Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that werecord during a period.•Chartered-in Days: The Company defines chartered-in days as the aggregate number of days in a period during which the Company chartered-invessels.•Available days: We define available days, which the Company has recently updated and is reflected in the above table to better reflect the waymanagement views the business, as the number of our ownership days and chartered-in days less the aggregate number of days that ourvessels are off-hire due to vessel familiarization upon acquisition, repairs, vessel upgrades or special surveys. The shipping industry usesavailable days to measure the number of days in a period during which vessels should be capable of generating revenues. Wedrydocked three vessels in 2017, nine vessels in 2016 and nineteen vessels in 2015.•Operating days: We define operating days as the number of our available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in aperiod during which vessels actually generate revenues.•Fleet utilization: We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available daysduring the period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels andminimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades,special surveys or vessel positioning. Our fleet continues to perform at very high utilization rates. Time Charter and Voyage Revenue Shipping revenues are highly sensitive to patterns of supply and demand for vessels of the size and design configurations owned and operated by acompany and the trades in which those vessels operate. In the dry bulk sector of the shipping industry, rates for the transportation of dry bulk cargoes such asores, grains, steel, fertilizers, and similar commodities, are determined by market forces such as the supply and demand for such commodities, the distancethat cargoes must be transported, and the number of vessels expected to be available at the time such cargoes need to be transported. The demand forshipments is significantly affected by the state of the global economy and in discrete geographical areas. The number of vessels is affected by newbuildingdeliveries and by the removal of existing vessels from service, principally because of scrapping. The mix of charters between spot or voyage charters and mid-term time charters also affects revenues. Because the mix between voyage charters andtime charters significantly affects shipping revenues and voyage expenses, vessel revenues are benchmarked based on net charter hire income. Net charterhire income comprises revenue from vessels operating on time charters, and voyage revenue less voyage expenses from vessels operating on voyage chartersin the spot market and charter hire expenses. Net charter hire serves as a measure of analyzing fluctuations between financial periods and as a method ofequating revenue generated from a voyage charter to time charter revenue.The following table represents the reconciliation of Net charter hire income for the years ended December 31, 2017, 2016, and 2015. 70 For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Revenue, Net $236,784,625 $124,492,844 $103,856,876Voyage Expenses 62,351,252 42,093,714 23,832,457Charter hire expenses 31,283,956 12,845,468 4,125,766Net charter hire revenue $143,149,417 $69,553,662 $75,898,653 % of Net charter hire from Time charter 60% 64% 76%Voyage charter 39% 35% 6%Commercial pool 1% 1% 18% Our economic decisions are based on anticipated Net charter hire rates and we evaluate financial performance based on Net charter rates achieved.Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels operate and the net charter hire that ourvessels earn under charters, which, in turn, are affected by a number of factors, including: •the duration of our charters;•our decisions relating to vessel acquisitions and disposals;•the amount of time that we spend positioning our vessels;•the amount of time that our vessels spend in drydock undergoing repairs;•maintenance and upgrade work;•the age, condition and specifications of our vessels;•levels of supply and demand in the dry bulk shipping industry; and•other factors affecting spot market charter rates for dry bulk carriers.Our revenues for the years ended December 31, 2017, 2016 and 2015 were earned from time charters, voyage charters and vessel pools. As iscommon in the shipping industry, we pay commissions ranging from 1.25% to 5% of the total daily charter hire rate of each charter to unaffiliated shipbrokers and in-house brokers associated with the charterers, depending on the number of brokers involved with arranging the charter. Net revenues for the year ended December 31, 2017 were $236,784,625, an increase of 90% compared to the prior year ended December 31, 2016primarily due to an increase in charter hire rates attributable to an improvement in the dry bulk market and increase in available days. The increase inavailable days was due to the acquisition of 10 Ultramax vessels and an increase in chartered-in days offset by the sale of four vessels during 2017. Thechartered-in days for the year ended December 31, 2017 were 3,353 compared to 1,494 in the prior year.Net revenues for the years ended December 31, 2016 and 2015 were $124,492,844 and $103,856,876, respectively. Net revenues for the year endedDecember 31, 2016 were 20% higher than net revenues for the year ended December 31, 2015, primarily due to the increase in the number of freight voyagesperformed and increase in available days. The charter rates year over year have remained flat. The increase in available days was due to the charter-in ofvessels and the delivery of a 2016 built Ultramax 61,530 dwt vessel in the fourth quarter of 2016 offset by the sale of four vessels during 2016. Our fleetutilization increased from 97.6% during 2015 to 98.7% during 2016. Voyage Expenses To the extent that we employ our vessels on voyage charters, we incur expenses that include bunkers, port charges, canal tolls, cargo handlingoperations and brokerage commissions, as these expenses are borne by the vessel owner on voyage charters. Bunkers, port charges, and canal toll expensesprimarily increase in periods during which vessels are employed on voyage charters. 71Voyage expenses for the year ended December 31, 2017 were $62,351,252, compared with $42,093,714 for the year ended December 31, 2016.Voyage expenses have primarily increased due to an increase in bunker prices as well as an increased number of freight voyages performed in the current yearcompared to the prior year.Voyage expenses for the year ended December 31, 2016 were $42,093,714, compared with $23,832,457 for the year ended December 31, 2015.Voyage expenses have primarily increased due to an increase in bunker prices as well as an increased number of freight voyages performed in 2016 comparedto 2015. Vessel Operating Expenses Vessel operating expenses include expenses relating to crewing costs, vessel operations, general vessel maintenance, regulatory and classificationsociety compliance, repairs, stores, supplies, spare parts and technical consultants. Vessel operating expenses for the year ended December 31, 2017 were $78,607,244, which represents an increase of $4,590,481, compared with$74,016,763 for the year ended December 31, 2016. The increase in vessel expenses is attributable to the increase in the owned fleet due to the purchase of10 Ultramax vessels offset by the sale of four vessels during 2017 and four vessels during 2016. The ownership days for the year ended December 31, 2017were 16,293 compared to 15,408 for the prior year ended December 31, 2016.Vessel operating expenses for the year ended December 31, 2016 were $74,016,763, which represents a decrease of $12,312,297 compared with$86,329,060 for the year ended December 31, 2015. The lower vessel expenses are attributable to the efficiencies achieved through in-house technicalmanagement of vessels as well as sale of the Falcon, Harrier, Peregrine and Kittiwake during 2016, and the sale of the Kite during 2015 offset by the purchaseof a 2016 built Ultramax 61,530 dwt vessel in the fourth quarter of 2016. We believe daily vessel operating expenses are a good measure for comparative purposes over a 12-month period in order to take into account all ofthe expenses that each vessel in our fleet will incur over a full year of operation. Average daily vessel operating expenses for our fleet for the year ended December 31, 2017 were $4,825 compared to $4,803 for the year endedDecember 31, 2016. Average daily vessel operating expenses for our fleet decreased by $530 per day to $4,803 during 2016 as compared to $5,334 in 2015. Thedecrease in daily vessel operating expenses was primarily due to lower vessel insurance and cost of lubes. Insurance expense varies with overall insurance market conditions as well as the insured's loss record, level of insurance and desired coverage. Themain insurance expenses include hull and machinery insurance (i.e. asset insurance) costs, Protection, and Indemnity ("P & I") insurance (i.e. liabilityinsurance) costs. Certain other insurances, such as basic war risk premiums based on voyages into designated war risk areas are often for the account of thecharterers for time charter voyages and on owners’ account for voyage charters. Our vessel expenses, which generally represent costs under the vessel operating budgets, cost of insurance and vessel registry and other regulatoryfees, will increase with the enlargement of our fleet. Other factors beyond our control, some of which may affect the shipping industry in general, may alsocause these expenses to increase, including, for instance, developments relating to market prices for crew, insurance and petroleum-based lubricants andsupplies. Charter Hire Expense The charter hire expenses for the year ended December 31, 2017 were $31,283,956 compared to $12,845,468 for the year ended December 31, 2016.The increase in charter hire expenses in 2017 compared with 2016 was mainly due to an increase in short term chartered-in vessels resulting from successfulimplementation of our business strategy. The chartered-in operating days for 2017 were 3,353 compared to 1,494 in 2016. The Company currently charters inone vessel on a long term basis. 72The charter hire expenses for the year ended December 31, 2016 were $12,845,468 compared to $4,125,766 for the year ended December 31, 2015.The increase in charter hire expense in 2016 compared with 2015 was principally the result of the delivery of a 63,000 dwt new building vessel in May 2016for a period of nine to fourteen months and a 61,000 dwt new building vessel that was delivered in July 2016 for a period of eleven to thirteen months. Inaddition, the Company chartered in vessels on a short-term basis as needed. The total charter in days for the year ended December 31, 2016 were 1,494,compared to 382, for the year ended December 31, 2015. Depreciation and Amortization We depreciate the cost of our vessels on a straight-line basis over the expected useful life of each vessel. Depreciation is based on the cost of thevessel less its estimated residual value. We estimate the useful life of our vessels to be 25 years from the date of initial delivery from the shipyard to theoriginal owner. On October 15, 2014, as part of fresh-start reporting, we revalued our vessels, which resulted in a decrease in vessel assets and drydockingassets. We estimate the scrap rate to be $300/lwt to compute each vessel's salvage value.Depreciation and amortization expenses for the years ended December 31, 2017 and 2016 were $33,690,686 and $38,884,322, respectively. Thedecrease was primarily due to a lower depreciation base after the impairment write down of $122.0 million in the fourth quarter of 2016 and $6.1 million inthe first quarter of 2016 and the sale of four vessels during 2017 and five vessels during 2016 offset by the purchase of ten Ultramax vessels during 2017 andone Ultramax vessel during the fourth quarter of 2016. Total depreciation and amortization expenses for the year ended December 31, 2017 includes$29,354,017 of depreciation and $4,336,669 of deferred drydocking amortization. Total depreciation and amortization expenses for the year endedDecember 31, 2016 includes $35,556,911 of depreciation and $3,327,411 of amortization of deferred drydocking costs. Depreciation and amortization expenses for the year ended December 31, 2016 were $38,884,322, which represents a decrease of $4,116,419compared with $43,000,741 for the year ended December 31, 2015. The decrease was substantially due to the operation of a smaller fleet resulting from thesale of four vessels in 2016, impairment of six vessels in 2015 reducing the depreciation base and sale of one vessel in 2015 offset by an increase in drydockamortization and the addition of a 2016 built Ultramax 62,350 dwt vessel in the fourth quarter of 2016. Total depreciation and amortization expenses for theyear ended December 31, 2016 includes $35,556,911 of depreciation and $3,327,411 of amortization of deferred drydocking costs. Total depreciation andamortization expense for the year ended December 31, 2015 includes $41,044,397 of depreciation and $1,956,344 of amortization of deferred drydockingcosts. Drydocking relates to our regularly scheduled maintenance program necessary to preserve the quality of our vessels as well as to comply withinternational shipping standards and environmental laws and regulations. Management anticipates that vessels are to be drydocked every two and a halfyears for vessels older than 15 years and every five years for vessels younger than 15 years, accordingly, these expenses are deferred and amortized over thatperiod. General and Administrative Expenses Our general and administrative expenses include onshore vessel administration related expenses such as technical management, legal andprofessional expenses and recurring administrative and other expenses including payroll and expenses relating to our executive officers and office staff,office rent and expenses, directors fees, and directors and officers insurance. General and administrative expenses also include stock-based compensationexpenses. We historically entered into technical management agreements for some of our vessels with independent technical managers. On August 24, 2015,the Company provided three months’ notice to V. Ships Limited to terminate the technical management contract. The Company completed the transfer of allvessels to in-house technical management during the first quarter of 2016. The technical management fees of $229,062 for the year ended December 31, 2016and $6,110,489 for the year ended December 31, 2015 are recorded as a component of general and administrative expenses. General and administrative expenses for the years ended December 31, 2017 and 2016 were $33,126,310 and $22,905,802, respectively. Theincrease in general and administrative expenses in 2017 was primarily due to an increase in stock-based compensation expenses due to additional stockgrants in the fourth quarter of 2016 and first quarter of 2017 and compensation expense due to increased head count. The higher General and administrativeexpenses are reflective of the expansion of our operating platform. General and administrative expenses for the years ended December 31, 2016 and 2015 were $22,905,802 and $25,537,007, respectively. Thedecrease in General and administrative expenses in 2016 was primarily attributable to lower73office lease expense, advisors' fees, stock-based compensation expenses and third party technical manager fees offset by lower third party management feesreceived due to the cancellation of the management agreement with Delphin Shipping LLC. General and administrative expenses include stock-based compensation charges of $8,738,615 and $2,206,690, respectively, for the years endedDecember 31, 2017 and 2016. These stock-based compensation charges relate to the stock options and restricted stock units granted to members ofmanagement and certain directors of the Company under the 2014 Plan and the 2016 Plan (see Note 13 “Stock Incentive Plans” in the consolidated financialstatements).Interest and Finance Costs Interest Expense consisted of: For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015First Lien Facility / Exit Financing Facility Interest * $10,305,275 $9,938,822 $9,781,106Amortization of debt discount and debt issuance costs 5,927,984 4,532,481 2,146,316Payment-in-Kind interest on Second Lien Facility 10,098,401 7,327,843 —Ultraco Debt Facility Interest 1,269,581 — —Norwegian Bond Debt interest 1,558,333 — —New First Lien Facility 209,420 — —Super Senior Revolving Credit Facility - commitment fees 8,000 — —Total Interest Expense $29,376,994 $21,799,146 $11,927,422 * The Exit Financing Facility was amended and restated on March 30, 2016 as a result of entering into the First Lien Facility. For the year ended December 31, 2017, interest rates on our outstanding debt under First Lien Facility ranged from 4.77% to 5.35%, including amargin over LIBOR and commitment fees of 40% of the margin on the undrawn portion of the facility. The weighted average effective interest rate was6.18%. The interest rates on our outstanding debt under Ultraco Debt Facility ranged from 4.19% to 4.28%, including a margin over LIBOR applicable underthe terms of the Ultraco Debt Facility which was entered into on June 28, 2017. The weighted average effective interest rate was 4.71%. The Norwegian Bonddebt carries an interest rate of 8.25%. The weighted average effective interest rate on the same was 8.84%. The interest rate on our outstanding debt underNew First Lien Facility was 4.83% including a margin over LIBOR applicable under the terms of the New First Lien Facility which was entered into onDecember 8, 2017. The weighted average effective interest rate was 5.21%. For 2016, interest rates on our outstanding debt ranged from 3.86% to 4.99%, including a margin over LIBOR applicable under the terms of the FirstLien Facility. The weighted average effective interest rate, including the amortization of debt discount and debt issuance costs for this period was 6.83%. For 2015, interest rates on our outstanding debt ranged from 3.696% to 4.08%, including a margin over LIBOR applicable under the terms of theFirst Lien Facility. The weighted average effective interest rate including the amortization of debt discount and debt issuance costs for this period was 5.06%.Forward freight agreements The Company trades in FFAs and bunkers swaps, with the objective of utilizing this market as economic hedging instruments that reduce the risk ofspecific vessels to changes in the freight market. The Company’s FFAs and bunker swaps have not qualified for hedge accounting treatment. As such,unrealized and realized gains are recognized as a component of other expense in the Consolidated Statements of Operations. 74The effect of non-designated derivative instruments on the Consolidated Statements of Operations is as follows: For the Years EndedDerivatives notdesignated as hedginginstruments Location of gain/(loss)recognized December 31, 2017 December 31, 2016 December 31, 2015 FFAs Other income/(expense) $(284,097) $(541,677) $—Bunker Swaps Other income/(expense) 413,577 — —Commissions Other income/(expense) (91,575) (19,818) —Total $37,905 $(561,495) $—Derivatives not designated as hedginginstrumentsBalance Sheet location Fair value of Derivatives December 31, 2017 December 31, 2016FFAs - Unrealized lossFair value of Derivatives $(73,170) $—Bunker Swaps - Unrealized gainOther current assets 128,845 —Total $55,675 $—Cash Collateral DisclosuresThe Company does not offset fair value amounts recognized for derivatives by the right to reclaim cash collateral or the obligation to return cashcollateral. The amount of collateral to be posted is defined in the terms of respective master agreement executed with counterparties or exchanges and isrequired when agreed upon threshold limits are exceeded. As of December 31, 2017 and December 31, 2016, the Company posted cash collateral related toderivative instruments under its collateral security arrangements of $178,836 and zero, respectively, which is recorded within other current assets in theconsolidated balance sheets.Loss on extinguishment On December 8, 2017, the Company paid outstanding debt of approximately $265.0 million under the First Lien Facility and the Second Lien Facilitythrough the New First Lien Facility of $65.0 million and issuance of $200.0 million Senior Secured Bonds. As a result, the Company recognized a $15.0million loss on debt extinguishment in the fourth quarter of 2017. Please see "Note 8. Debt" to the consolidated financial statements. Effects of Inflation The Company does not believe that inflation has had or is likely, in the near future, to have a significant impact on vessel operating expenses,drydocking expenses and general and administrative expenses. Liquidity and Capital Resources The following table presents the cash flow information for the years ended December 31, 2017, 2016 and 2015: 75 For the Years Ended(in thousands of U.S. dollars) December 31, 2017 December 31, 2016 December 31, 2015Net cash provided by / (used in) operating activities $7,389 $(45,434) $(43,787)Net cash (used in) / provided by investing activities (155,250) (9,280) 10,252Net cash provided by financing activities 127,596 106,335 18,456 (Decrease) / increase in cash and cash equivalents (20,265) 51,620 (15,079)Cash and cash equivalents, beginning of year 76,516 24,896 39,975 Cash and cash equivalents, end of year $56,251 $76,516 $24,896 Net cash provided by operating activities for the year ended December 31, 2017 was $7,388,971, compared with net cash used in operating activitiesof $45,434,310 in 2016. The increase in cash flow provided by operations resulted from an increase in the charter hire rates achieved by the Companycoupled with an improving dry bulk market offset by negative working capital changes as an increasing percentage of our revenue is earned on voyagecharters as opposed to time charters. Net cash used in operating activities for the year ended December 31, 2016 was $45,434,310, compared with net cash used in operating activities of$43,786,769 in 2015. The increase in cash flow used in operations resulted from negative working capital changes offset by lower drydock expenditures.Net cash used in investing activities for the year ended December 31, 2017 was $155,249,639, compared to $9,280,391 in the prior year. During2017, the Company purchased ten Ultramax vessels for $174.4 million and advance on purchase of one Ultramax vessel of $2.2 million partially offset by theproceeds from sale of four vessels for $26.0 million. Please refer to "Note 4.Vessels" to the consolidated financial statements. During 2017, the Companypurchased a certificate of deposit maturing in one year of $4.5 million. During 2016, the Company purchased a 2016 built Ultramax for $18.9 million. Inaddition, the Company paid $1.9 million as an advance payment for the acquisition of a 2017 built Ultramax. The Company sold four vessels during 2016for net proceeds of $13.0 million during the year. In 2015, the Company received $7.8 million from the sale of its investment in Korea Line Corporation and$4.2 million from sale of one vessel (the Kite). Net cash provided by financing activities for the year ended December 31, 2017 was $127,595,602, compared to $106,334,650 in the prior yearended December 31, 2016. The Company received net proceeds of $96.0 million in the December Private Placement, which closed on January 20, 2017 andrepaid $13.0 million of its term loan under the First Lien Facility from the proceeds of the sale of the vessels Redwing, Sparrow, Woodstar and Wren.Additionally, the Company completed a refinancing of approximately $191.0 million under the First Lien Facility and $77.4 million under the Second LienFacility through the New First Lien Facility of $65.0 million and issuance of $200.0 million Senior Secured Bonds issued at a discount of $1.9 million. TheCompany received $61.2 million from the Ultraco Debt Facility in the second quarter of 2017 and paid $0.9 million to the lender. The Company paid $0.9million to the lenders of the New First Lien Facility as part of the debt refinancing transaction. The Company also paid $5.2 million in other financing costsin connection with the refinancing transaction. Please see "Note 8. Debt" to the consolidated financial statements.In 2016, the Company received net proceeds of $85.7 million from a private common stock placement, which closed on August 10, 2016, $60.0million received from our Second Lien Loan Facility and $15.2 million from the revolver under the First Lien Facility offset by repayment of $21.3 million ofour term loan and $30.2 million of our revolver each under the First Lien Facility. The Company also paid $3.1 million in deferred financing costs. During 2015, we borrowed $40,000,000 from our revolving credit facility under the Exit Financing Facility and repaid $19,625,000 toward the termloan facility under the Exit Financing Facility. In August 2015, we also paid $500,000 to our lenders to amend our Exit Financing Facility and $1,419,228 tosettle taxes on net share equity awards. As of December 31, 2017, our cash and cash equivalents balance was $56,251,044 compared to a cash and cash equivalents balance of $76,516,110at December 31, 2016. In addition, our restricted cash balance includes $74,917 for collateralizing letters of credit relating to our office leases as of December31, 2017 and 2016.76 At December 31, 2017, the Company’s debt consisted of $200,000,000 in senior secured bonds, net of $6,049,671 debt discount and debt issuancecosts under the Norwegian Bond Debt, $65,000,000 in term loan and revolver, net of $1,241,815 debt discount and debt issuance costs under the New FirstLien Facility and $61,200,000, net of $1,224,838 debt discount and debt issuance costs under the Ultraco Debt Facility. In addition, we have $15 million inundrawn revolver available under the Super Senior Facility. Our principal sources of funds are operating cash flows, long-term bank borrowings and borrowings under our revolving credit facility. Our principaluse of funds is capital expenditures to establish and grow our fleet, maintain the quality of our vessels, comply with international shipping standards andenvironmental laws and regulations, fund working capital requirements and repayments of interest on our outstanding loan facilities. See “–Overview—Norwegian Bond Debt” and “–Overview—New First Lien Facility and "–Overview—Ultraco Debt Facility" for additional information concerning our loanfacilities and other debt. We believe that our current financial resources, together with the undrawn revolver under the Super Senior Facility and cash generated fromoperations will be sufficient to meet our ongoing business needs and other obligations over the next twelve months. Our ability to generate sufficient cashdepends on many factors beyond our control including, among other things, continuing to improve the profitability of its operations and future cash flows,which contemplates an improvement in charter rates. Dividends The Company did not make any dividend payments in 2017, 2016 and 2015. In the future, the declaration and payment of dividends, if any, willalways be subject to the discretion of the board of directors, restrictions contained in the Norwegian Bond Debt terms, the New First Lien Facility and theUltraco Debt Facility, and the requirements of Marshall Islands law. The timing and amount of any dividends declared will depend on, among other things,the Company's earnings, financial condition and cash requirements and availability, the ability to obtain debt and equity financing on acceptable terms ascontemplated by the Company's growth strategy, the terms of its outstanding indebtedness and the ability of the Company's subsidiaries to distribute funds toit. The Company does not currently expect to pay dividends in the near term.Debt Agreements Refer to Note 8 “Debt” to our consolidated financial statements above for a summary of our credit agreements. Contractual Obligations The following table sets forth our expected contractual obligations and their maturity dates as of December 31, 2017: (in thousands of dollars) WithinOneYear One toThreeYears Three toFiveYears More thanFiveYears TotalBank Loans(1) $— $33,770 $92,430 $— $126,200Interest and borrowing fees(1) 23,262 42,761 33,347 — 99,370Norwegian Bond Debt 4,000 16,000 180,000 — 200,000Chartering agreement (2,3) 4,672 9,344 1,190 — 15,206Office lease 576 1,260 629 — 2,465Vessel acquisition (4) 19,073 — — — 19,073Total $51,583 $103,135 $307,596 $——$462,314 (1)See Note 8. "Debt" to our consolidated financial statements. Interest is based on LIBOR assumption of 1.85%. The Company increased its draw downunder the Ultraco Debt Facility by $8.6 million in January 2018 in connection with the acquisition of an UItramax vessel.(2)Does not include obligations of chartered-in vessels less than one year.(3)On May 10, 2017, we signed an agreement to charter-in a 61,400 dwt, 2013 built Japanese vessel for approximately four years with options for twoadditional years. The hire rate for the first four years is $12,800 per day.(4)On December 19, 2017, the Company, through Ultraco, signed a memorandum of agreement to acquire a 2015 built 64,000 dwt CROWN-63 Ultramax drybulk vessel constructed at Chengxi Shipyard Co., Ltd for $21.2 million. The Company77took delivery of the vessel, the New London Eagle, on January 9, 2018. As of December 31, 2017, the Company paid a deposit of $2.2 million for thepurchase of the vessel. The Company increased its draw down under the Ultraco Debt Facility by $8.6 million in connection with the acquisition.Capital Expenditures Our capital expenditures relate to the purchase of vessels and capital improvements to our vessels, which are expected to enhance the revenueearning capabilities and safety of these vessels. In addition to acquisitions that we may undertake in future periods, the Company's other major capital expenditures include funding the Company'sprogram of regularly scheduled drydocking necessary to comply with international shipping standards and environmental laws and regulations. Although theCompany has some flexibility regarding the timing of its drydocking, the costs are relatively predictable. Management anticipates that vessels are to bedrydocked every two and a half years for vessels older than 15 years and five years for vessels younger than 15 years. Funding of these requirements isanticipated to be met with cash from operations. We anticipate that this process of recertification will require us to reposition these vessels from a dischargeport to shipyard facilities, which will reduce our available days and operating days during that period. Drydocking costs incurred are deferred and amortized to expense on a straight-line basis over the period through the date of the next scheduleddrydocking for those vessels. In 2017, three of our vessels were drydocked and we incurred $2,579,111 in drydocking related costs. In 2016, nine of ourvessels were drydocked and we incurred $3,688,711 in drydocking related costs. In 2015, nineteen of our vessels were drydocked and we incurred$11,141,561 in drydocking related costs.The following table represents certain information about the estimated costs for anticipated vessel drydockings in the next four quarters, along withthe anticipated off-hire days: Quarter Ending Off-hire Days(1) Projected Costs(2)March 31, 2018 66 $1.95 millionJune 30, 2018 66 $1.95 millionSeptember 30, 2018 88 $2.60 millionDecember 31, 2018 44 $1.30 million(1) Actual duration of drydocking will vary based on the condition of the vessel, yard schedules and other factors. (2) Actual costs will vary based on various factors, including where the drydockings are actually performed.Contracted Time Charter Revenue We have time charter contracts currently for all our vessels in the operating fleet. The contracted time charter revenue schedule, included inManagement's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the off-hire days in the drydockschedule above. Off-balance Sheet Arrangements We do not have any off-balance sheet arrangements. Other Contingencies We refer you to Note 10. “Commitment and Contingencies” to our consolidated financial statements included in this Annual Report for a discussionof our contingencies related to claim litigation. The potential impact from legal proceedings on our business, liquidity, results of operations, financialposition and cash flows, could change in the future. 78Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk The Company is exposed to market risk from changes in interest rates, which could impact its results of operations and financial condition. TheCompany's objective is to manage the impact of interest rate changes on earnings and cash flows of its borrowings. The Company expects to manage thisexposure to market risk through its regular operating and financing activities and, when deemed appropriate, using derivative financial instruments. TheCompany may use interest rate swaps to manage net exposure to interest rate changes related to its borrowings and to lower its overall borrowing costs. At December 31, 2017, the Company’s debt consisted of $200,000,000 in senior secured bonds, net of $6,049,670 debt discount, debt issuance costsunder the Norwegian Bond Debt, $65,000,000 in term loans, net of $1,241,816 debt discount and debt issuance costs under the New First Facility and$61,200,000, net of $1,224,838 debt discount and debt issuance costs under the Ultraco Debt Facility. In addition, we have $15 million in undrawn revolveravailability under the Super Senior Facility. The Norwegian Bond Debt carries a fixed interest rate of 8.25% and therefore does not carry any exposure tointerest rate increases. Our outstanding debt under the New First Lien Facility and the Ultraco Debt Facility carries an interest of margin plus LIBOR andtherefore exposed to interest rate fluctuations. Our total cash interest expense on our outstanding debt facilities excluding the Norwegian Bond Debt was$11,792,276 compared to $9,938,824 for the year ended December 31, 2016. The table below provides sensitivity analysis of changes in interest rates for anincrease or decrease of 100 basis points and an increase of 200 basis points and the increase in annual interest expense under each scenario. The belowanalysis excluded our Norwegian Bond Debt which is not subject to variable LIBOR. Incremental interest expense For the year endedDecember 31, 2017 For the year endedDecember 31, 2016+200 basis points $2,524,000 $4,181,980+100 basis points 1,262,000 2,090,990-100 basis points* (1,262,000) (2,030,121) *LIBOR was 97 basis points as of December 31, 2016. The LIBOR floor is 0%, therefore the interest rates decrease by 97 basis points. For the period from January 1, 2017 to December 31, 2017, interest on the outstanding debt ranged from 4.19% including a margin over LIBOR to8.25%. The weighted average effective interest rate was 6.23%.For the period from January 1, 2016 to December 31, 2016, interest on the outstanding debt ranged from 3.86% to 4.99%, including a margin overLIBOR. The weighted average effective interest rate was 6.83%. For the period from January 1, 2015 to December 31, 2015, interest on the outstanding debt ranged from 3.696% to 4.08%, including a margin overLIBOR. The weighted average effective interest rate was 5.06%. Foreign Currency and Exchange Rate Risk The shipping industry in which the Company operates substantially transacts using the U.S. dollar. The Company generates all of its revenues in U.S. dollarsand the Company’s current exposure to currency fluctuations is not material. The majority of the Company's operating expenses and the entirety of itsmanagement expenses are in U.S. dollars. However, we incur some of our voyage expenses and vessel expenses in other currencies. The amount andfrequency of some of these expenses may fluctuate from period to period. Depreciation in the value of the U.S. dollar relative to other currencies will increasethe U.S. dollar cost to us of paying such expenses. There is currently no expectation that that there would be an increase in the business conducted in foreigncurrencies. In the future if there is a substantial increase in our foreign currency transactions, our exposure could increase and we may seek to hedge againstany currency fluctuation. 79Item 8. Financial Statements and Supplementary Data The information required by this item is contained in the financial statements set forth in Item 15(a) under the caption "Consolidated FinancialStatements" as part of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Disclosure Controls and Procedures Our management, including our Chief Executive Officer and our Chief Financial Officer, has conducted an evaluation of the effectiveness of ourdisclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act as of the end of the period covered by thisAnnual Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls andprocedures were effective as of December 31, 2017. The Company’s disclosure controls and procedures are designed to provide reasonable assurance thatinformation required to be disclosed by the Company in the reports that it files or submits to the SEC under the Exchange Act is recorded, processed,summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to ourmanagement, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management's Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act. The Company's internal control over financial reporting is a process designed by, or under the supervision of, theCompany's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of the Company's financial statements for external reporting purposes in accordance with generally accepted accounting principles.Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2017. In making thisassessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on management’s assessment and those criteria, management has concluded that the Company maintained effectiveinternal control over financial reporting as of December 31, 2017. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect transactions and dispositions of the Company's assets; provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company's receipts and expenditures arebeing made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financialstatements. The effectiveness of the Company's internal control over financial reporting as of December 31, 2017 has been audited by Deloitte & Touche LLP, anindependent registered public accounting firm, as stated in their report which is included in Part IV. Item 15. Exhibits, Financial Statement Schedules underthe heading, "Report of Independent Registered Public Accounting Firm". Changes in Internal Control Over Financial Reporting In addition, we evaluated our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act and therehave been no changes in our internal control over financial reporting that occurred during the fourth quarter of 2017 that materially affected, or arereasonably likely to materially affect, our internal control over financial reporting.80Item 9B. Other Information None81PART III Item 10. Directors, Executive Officers and Corporate Governance Information regarding our directors, executive officers and certain corporate governance items will be included in the proxy statement for the 2018 annualmeeting of shareholders, to be filed within 120 days after December 31, 2017, and is incorporated by reference to this report. Item 11. Executive Compensation Information regarding executive compensation will be included in the proxy statement for the 2018 annual meeting of shareholders, to be filed within 120days after December 31, 2017, and is incorporated by reference to this report. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding beneficial ownership and management and related stockholder matters will be included in the proxy statement for the 2018 annualmeeting of shareholders, to be filed within 120 days after December 31, 2017, and is incorporated by reference to this report. Item 13. Certain Relationships and Related Transactions, and Director Independence Information regarding certain relationships and related transactions and director independence will be included in the proxy statement for the 2018 annualmeeting of shareholders, to be filed within 120 days after December 31, 2017, and is incorporated by reference to this report. Item 14. Principal Accountant Fees and Services Information regarding principal accounting fees and services will be included in the proxy statement for the 2018 annual meeting of shareholders, to be filedwithin 120 days after December 31, 2017, and is incorporated by reference to this report.82PART IVItem 15. Exhibits, Financial Statement Schedules (a) Documents filed as part of this Annual Report on Form 10-K 1.Consolidated Financial Statements: See accompanying Index to Consolidated Financial Statements. 2.Consolidated Financial Statement Schedule: Financial statement schedules are omitted either due to the absence of conditions under whichthey are required or because the information required is included in the notes to the Company’s consolidated financial statements. (b) ExhibitsExhibit Index NumberExhibit Title 3.1Second Amended and Restated By-Laws of Eagle Bulk Shipping Inc., dated as of October 15, 2014, incorporated by reference to Exhibit3.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831. 3.2Third Amended and Restated Articles of Incorporation of Eagle Bulk Shipping Inc., dated as of August 4, 2016, incorporated by referenceto Exhibit 3.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on August 4, 2016; File No. 001-33831. 4.1Form of Specimen Stock Certificate of Eagle Bulk Shipping Inc., incorporated by reference to Exhibit 4.1 to the Report on Form 8-K ofEagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831. 4.2Form of Specimen Warrant Certificate of Eagle Bulk Shipping Inc., incorporated by reference to Exhibit 4.2 to the Report on Form 8-K ofEagle Bulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831. 4.3Amended and Restated Registration Rights Agreement, dated as of May 13, 2016, by and between Eagle Bulk Shipping Inc. and theHolders party thereto, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with theSEC on May 17, 2016; File No. 001-33831. 10.1Delphin Management Agreement, dated August 4, 2009, by and between Delphin Shipping LLC and Eagle Bulk Shipping Inc.,incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K of Eagle Bulk Shipping Inc., filed with the SEC on March5, 2010; File No. 001-33831. 10.2Loan Agreement, dated as of October 9, 2014, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle BulkShipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831. 10.3Amendatory Agreement to the Loan Agreement, dated as of August 14, 2015, incorporated by reference to Exhibit 10.3 to the QuarterlyReport on Form 10-Q of Eagle Bulk Shipping Inc., filed with the SEC on November 16, 2015; File No. 001-33831. 10.4Warrant Agreement, dated as of October 15, 2014, by and among Eagle Bulk Shipping Inc., Computershare Inc., as Warrant Agent, andComputershare Trust Company N.A., as Warrant Agent, incorporated by reference to Exhibit 10.3 to the Report on Form 8-K of EagleBulk Shipping Inc., filed with the SEC on October 16, 2014; File No. 001-33831. 10.5Amended and Restated Management Agreement, dated as of August 15, 2014, between Eagle Bulk Shipping Inc., as Manager, andDelphin Shipping LLC, incorporated by reference to Exhibit 10.4 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with theSEC on October 16, 2014; File No. 001-33831. 10.7#Employment Agreement, dated July 6, 2015, among Eagle Bulk Shipping Inc., Eagle Shipping International (USA) LLC and Gary Vogel,incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of Eagle Bulk Shipping Inc., filed with the SEC onAugust 14, 2015; File No. 001-33831. 10.8#Restricted Stock Award Agreement under the Eagle Bulk Shipping Inc. 2014 Equity Incentive Plan, by and between Eagle Bulk ShippingInc. and Gary Vogel, dated as of September 29, 2015, incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q ofEagle Bulk Shipping Inc., filed with the SEC on November 16, 2015; File No. 001-33831. 10.9#Option Award Agreement under the Eagle Bulk Shipping Inc. 2014 Equity Incentive Plan, by and between Eagle Bulk Shipping Inc. andGary Vogel, dated as of September 29, 2015, incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q of EagleBulk Shipping Inc., filed with the SEC on November 16, 2015; File No. 001-33831.83 10.10Forbearance and Standstill Agreement, dated as of January 15, 2016, incorporated by reference to Exhibit 10.1 to the Report on Form 8-Kof Eagle Bulk Shipping Inc., filed with the SEC on January 19, 2016; File No. 001-33831. 10.11Amendment No. 1 to Forbearance and Standstill Agreement, dated as of February 1, 2016, incorporated by reference to Exhibit 10.1 to theReport on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on February 2, 2016; File No. 001-33831. 10.12Limited Waiver to the Loan Agreement and Amendment No. 2 to Forbearance and Standstill Agreement, dated as of February 9, 2016,incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on February 9, 2016;File No. 001-33831. 10.13Limited Waiver to the Loan Agreement and Amendment No. 3 to Forbearance and Standstill Agreement, dated as of February 22, 2016,incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on February 22,2016; File No. 001-33831. 10.14Second Limited Waiver to the Loan Agreement and Amendment No. 4 to Forbearance and Standstill Agreement, dated as of February 29,2016, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 1,2016; File No. 001-33831. 10.15Amendment No. 5 to Forbearance and Standstill Agreement, dated as of March 6, 2016, incorporated by reference to Exhibit 10.1 to theReport on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 7, 2016; File No. 001-33831. 10.16Third Limited Waiver to the Loan Agreement and Amendment No. 6 to Forbearance and Standstill Agreement, dated as of March 8, 2016,incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 9, 2016;File No. 001-33831. 10.17Fourth Limited Waiver to the Loan Agreement, dated as of March 18, incorporated by reference to Exhibit 10.1 to the Report on Form 8-Kof Eagle Bulk Shipping Inc., filed with the SEC on March 22, 2016; File No. 001-33831. 10.18Amendment No. 7 to Forbearance and Standstill Agreement, dated as of March 22, 2016, incorporated by reference to Exhibit 10.2 to theReport on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 22, 2016; File No. 001-33831. 10.19Amended and Restated First Lien Loan Agreement, dated as of March 30, 2016, incorporated by reference to Exhibit 10.1 to the Reporton Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 30, 2016; File No. 001-33831. 10.20Second Lien Loan Agreement, among Eagle Shipping LLC, as borrower, the guarantor subsidiaries party thereto, the lenders thereto fromtime to time, and Wilmington Savings Fund Society, FSB, as Second Lien Agent, dated as of March 30, 2016, incorporated by referenceto Exhibit 10.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 30, 2016; File No. 001-33831. 10.21Nominating Agreement, dated as of March 30, 2016, by and between Eagle Bulk Shipping Inc. and GoldenTree Asset Management LP,incorporated by reference to Exhibit 10.3 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 30, 2016;File No. 001-33831. 10.22First Amendment to Nominating Agreement, dated as of April 18, 2016, by and between Eagle Bulk Shipping Inc. and GoldenTree AssetManagement LP, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC onApril 19, 2016; File No. 001-33831. 10.23Preferred Stock Purchase Agreement, dated as of May 26, 2016, by and among Eagle Bulk Shipping Inc. and the Purchasers party thereto,incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on May 27, 2016;File No. 001-33831. 10.24Stock Purchase Agreement, dated as of July 1, 2016, by and among Eagle Bulk Shipping Inc. and the Investors party thereto, incorporatedby reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on July 5, 2016; File No. 001-33831. 10.25Stock Purchase Agreement, dated as of July 10, 2016, by and among Eagle Bulk Shipping Inc. and the Investors party thereto,incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on July 11, 2016;File No. 001-33831. 10.26First Amendment to the Preferred Stock Purchase Agreement, dated as of July 19, 2016, by and between Eagle Bulk Shipping Inc. and thePurchasers party thereto, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with theSEC on July 20, 2016; File No. 001-33831. 10.27Termination Agreement of the Preferred Stock Purchase Agreement, dated September 7, 2016, by and among Eagle Bulk Shipping Inc.and the Investors party thereto, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filedwith the SEC on September 7, 2016; File No. 001-33831. 10.28#Separation Agreement and General Release, dated September 29, 2016, between Eagle Bulk Shipping Inc. and Adir Katzav, incorporatedby reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q of Eagle Bulk Shipping Inc., filed with the SEC on November 9, 2016;File No. 001-33831.84 10.29#Employment Agreement, dated September 3, 2016, among Eagle Bulk Shipping Inc., Eagle Shipping International (USA) LLC and FrankDe Costanzo, incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q of Eagle Bulk Shipping Inc., filed with theSEC on November 9, 2016; File No. 001-33831. 10.30#Option Award Agreement, dated November 7, 2016, between Frank De Costanzo and Eagle Bulk Shipping Inc., incorporated by referenceto Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on November 9, 2016; File No. 001-33831. 10.31#Restricted Stock Award Agreement, dated November 7, 2016, between Frank De Costanzo and Eagle Bulk Shipping Inc., incorporated byreference to Exhibit 10.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on November 9, 2016; File No. 001-33831. 10.32Stock Purchase Agreement, dated as of December 13, 2016, by and among Eagle Bulk Shipping Inc. and the Investors party thereto,incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on December 13,2016; File No. 001-33831. 10.33#Eagle Bulk Shipping Inc. 2016 Equity Incentive Plan, incorporated by reference to Appendix A to the definitive proxy statement onSchedule 14A of Eagle Bulk Shipping Inc., filed with the SEC on November 4, 2016; File No. 001-33831. 10.34#Restricted Stock Award Agreement, dated December 15, 2016, between Gary Vogel and Eagle Bulk Shipping Inc., incorporated byreference to Exhibit 10.37 to the Annual Report on Form 10-K of Eagle Bulk Shipping Inc., filed with the SEC on March 31, 2017; FileNo. 001-33831. 10.35#Option Award Agreement, dated December 15, 2016, between Gary Vogel and Eagle Bulk Shipping Inc., incorporated by reference toExhibit 10.38 to the Annual Report on Form 10-K of Eagle Bulk Shipping Inc., filed with the SEC on March 31, 2017; File No. 001-33831. 10.36#Form of Restricted Stock Award Agreement under the Eagle Bulk Shipping Inc. 2016 Equity Incentive Plan, incorporated by reference toExhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 7, 2017; File No. 001-33831. 10.37#Form of Option Award Agreement under the Eagle Bulk Shipping Inc. 2016 Equity Incentive Plan, incorporated by reference to Exhibit10.2 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on March 7, 2017; File No. 001-33831. 10.38Framework Agreement, dated as of February 28, 2017, by and between Eagle Bulk Ultraco LLC and Greenship Bulk Manager Pte. Ltd., asTrustee-Manager of Greenship Bulk Trust, incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Eagle BulkShipping Inc., filed with the SEC on May 9, 2017; File No. 001-33831. 10.39Credit Agreement, dated as of June 28, 2017, by and among Eagle Bulk Ultraco LLC, the initial guarantors party thereto, the lenders partythereto, the swap banks party thereto, and ABN AMRO Capital USA LLC, as security trustee and facility agent, together with ABNAMRO Capital USA LLC, DVB Bank SE and Skandinaviska Enskilda Banken AB (publ), as mandated lead arrangers, and ABN AMROCapital USA LLC, as arranger and bookrunner, incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle BulkShipping Inc., filed with the SEC on July 5, 2017; File No. 001-33831. 10.40Bond Terms, dated as of November 22, 2017, by and between Eagle Bulk Shipco LLC, a company existing under the laws of the Republicof the Marshall Islands, and Nordic Trustee AS, a company existing under the laws of Norway, incorporated by reference to Exhibit 10.1to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on December 4, 2017; File No. 001-33831. 10.41Credit Agreement, dated as of December 8, 2017, by and among Eagle Shipping LLC, as borrower, certain wholly-owned vessel-owningsubsidiaries of Eagle Shipping LLC, as guarantors, the lenders thereunder, the swap banks party thereto, ABN AMRO Capital USA LLC,as facility agent and security trustee for the Lenders, ABN AMRO Capital USA LLC, Credit Agricole Corporate and Investment Bank andSkandinaviska Enskilda Banken AB (publ), as mandated lead arrangers, and ABN AMRO Capital USA LLC, as arranger and bookrunner,incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on December 12,2017; File No. 001-33831.85 10.42Super Senior Revolving Facility Agreement, dated as of December 8, 2017, by and among Eagle Bulk Shipco LLC, as borrower, and ABNAMRO Capital USA LLC, as original lender, mandated lead arranger and agent, incorporated by reference to Exhibit 10.2 to the Reporton Form 8-K of Eagle Bulk Shipping Inc., filed with the SEC on December 12, 2017; File No. 001-33831. 10.43*First Amendment to certain Credit Agreement, by and among Ultraco, as borrower, certain wholly-owned vessel-owning subsidiaries ofUltraco, as guarantors, the lenders thereunder (the “Lenders”), the swap banks party thereto, ABN AMRO Capital USA LLC, as facilityagent and security trustee for the Lenders, ABN AMRO Capital USA LLC, DVB Bank SE and Skandinaviska Enskilda Banken AB (publ),as mandated lead arrangers, and ABN AMRO Capital USA LLC, as arranger and bookrunner. 21.1*Subsidiaries of the Registrant. 23.1*Consent of Independent Registered Public Accounting Firm - Deloitte & Touche LLP. 23.2*Consent of Seward & Kissel LLP. 31.1*Rule 13a-14(d) / 15d-14(a) Certification of Principal Executive Officer. 31.2*Rule 13a-14(d) / 15d-14(a) Certification of Principal Financial Officer. 32.1**Section 1350 Certification of Principal Executive Officer. 32.2**Section 1350 Certification of Principal Financial Officer. 101.INS*XBRL Instance Document. 101.CAL*XBRL Schema Document. 101.SCH*XBRL Calculation Linkbase Document. 101.DEF*XBRL Definition Linkbase Document. 101.LAB*XBRL Labels Linkbase Document. 101.PRE*XBRL Presentation Linkbase Document. * Filed herewith.** Furnished herewith.# Management contract or compensatory plan or arrangement.86SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange of 1934, the Registrant has duly caused this report to be signed on its behalfby the undersigned thereunto duly authorized. EAGLE BULK SHIPPING INC. By:/s/ Gary Vogel Name:Gary Vogel Title:Chief Executive Officer March 12, 2018 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrantand in the capacities indicated on March 12, 2018. Name Title /s/ Gary Vogel Chief Executive Officer and Director(Principal Executive Officer)Gary Vogel /s/ Frank De Costanzo Chief Financial Officer(Principal Financial and Accounting Officer)Frank De Costanzo /s/ Paul M. Leand, Jr. Chairman of the Board of DirectorsPaul M. Leand, Jr. /s/ Randee E. Day DirectorRandee E. Day /s/ Justin A. Knowles DirectorJustin A. Knowles /s/ Bart Veldhuizen DirectorBart Veldhuizen /s/ Gary Weston DirectorGary Weston 87INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2017 and December 31, 2016 F-5 Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015 F-6 Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015 F-7 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2017, 2016 and 2015 F-8 Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015 F-9 Notes to Consolidated Financial Statements F-10Report of Independent Registered Public Accounting Firm To the shareholders and the Board of Directors of Eagle Bulk Shipping Inc.Opinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of Eagle Bulk Shipping Inc. and subsidiaries (the "Company") as ofDecember 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equityand cash flows, for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the"financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2017, basedon criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company asof December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period endedDecember 31, 2017, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion,the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based oncriteria established in Internal Control - Integrated Framework (2013) issued by COSO.Basis for OpinionsThe Company’s management is responsible for these financial statements, for maintaining effective internal control over financialreporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanyingManagement’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financialstatements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accountingfirm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent withrespect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities andExchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditsto obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud,and whether effective internal control over financial reporting was maintained in all material respects.Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financialstatements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining,on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating theaccounting principles used and significant estimates made by management, as well as evaluating the overall presentation of thefinancial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectivenessof internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary inthe circumstances. We believe that our audits provide a reasonable basis for our opinions.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regardingprevention or timelyF- 2detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financialstatements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projectionsof any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate./s/ DELOITTE & TOUCHE LLPNew York, New YorkMarch 12, 2018We have served as the Company's auditor since 2015.F- 3EAGLE BULK SHIPPING INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS December 31, 2017 December 31, 2016ASSETS: Current assets: Cash and cash equivalents $56,251,044 $76,516,110Accounts receivable 17,246,540 5,089,708Prepaid expenses 3,010,766 3,093,962Short-term investment 4,500,000 —Inventories 14,113,079 10,876,713Vessel held for sale 9,316,095 8,688,601Other current assets 785,027 22Total current assets 105,222,551 104,265,116Noncurrent assets: Vessels and vessel improvements, at cost, net of accumulated depreciation of $99,910,416 and $76,463,743,respectively 690,236,419 567,592,950Advance for vessel purchase 2,201,773 1,926,886Other fixed assets, net of accumulated amortization of $343,799 and $307,880, respectively 617,343 632,805Restricted cash 74,917 74,917Deferred financing costs - Super Senior Revolver Facility 190,000 —Deferred drydock costs, net 9,749,751 11,507,309Other assets 57,181 381,634Total noncurrent assets 703,127,384 582,116,501Total assets $808,349,935 $686,381,617LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $7,470,844 $7,135,156Accrued interest 1,790,315 28,872Other accrued liabilities 11,810,366 11,545,447Fair value of derivatives 73,170 —Fair value below contract value of time charters acquired — 820,313Unearned charter hire revenue 5,678,673 6,046,032Current portion of long-term debt - Norwegian Bond Debt 4,000,000 —Total current liabilities 30,823,368 25,575,820Noncurrent liabilities: First Lien Facility, net of debt discount and debt issuance costs — 204,352,318Second Lien Facility, inclusive of payment-in-kind interest, net of debt discount and debt issuance costs — 51,591,226Norwegian Bond Debt, net of debt discount and debt issuance costs 189,950,329 —New First Lien Facility, net of debt discount and debt issuance costs 63,758,185 —Ultraco Debt Facility, net of debt discount and debt issuance costs 59,975,162 —Other liabilities 177,846 483,132Fair value below contract value of time charters acquired 2,500,012 3,896,482Total noncurrent liabilities 316,361,534 260,323,158Total liabilities 347,184,902 285,898,978Commitment and contingencies Stockholders' equity: Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued as of December 31, 2017 and 2016 — —Common stock, $.01 par value, 700,000,000 shares authorized, 70,394,307 and 48,106,827 shares issued andoutstanding as of December 31, 2017 and 2016, respectively 703,944 481,069Additional paid-in capital 887,625,902 783,369,698Accumulated deficit (427,164,813) (383,368,128)Total stockholders' equity 461,165,033 400,482,639Total liabilities and stockholders' equity $808,349,935 $686,381,617F- 4The accompanying notes are an integral part of these Consolidated Financial Statements.F- 5EAGLE BULK SHIPPING INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Revenues, net $236,784,625 $124,492,844 $103,856,876 Voyage expenses 62,351,252 42,093,714 23,832,457Vessel expenses 78,607,244 74,016,763 86,329,060Charter hire expenses 31,283,956 12,845,468 4,125,766Depreciation and amortization 33,690,686 38,884,322 43,000,741General and administrative expenses 33,126,310 22,905,802 25,537,007Restructuring charges — 5,869,025 —(Gain)/loss on sale of vessels (2,134,767) 101,860 5,696,675Vessel impairment — 129,027,862 50,872,734Total operating expenses 236,924,681 325,744,816 239,394,440 Operating loss (140,056) (201,251,972) (135,537,564) Interest expense 29,376,994 21,799,146 11,927,422Interest income (651,069) (215,433) (6,222)Other (income)/expense (37,905) 686,750 838,201Loss on debt extinguishment 14,968,609 — —Total other expense (income), net 43,656,629 22,270,463 12,759,401Net loss $(43,796,685) $(223,522,435) $(148,296,965) Weighted average shares outstanding: Basic 69,182,302 20,565,652 1,880,116Diluted 69,182,302 20,565,652 1,880,116 Per share amounts: Basic net loss $(0.63) $(10.87) $(78.88)Diluted net loss $(0.63) $(10.87) $(78.88) The accompanying notes are an integral part of these Consolidated Financial Statements.F- 6EAGLE BULK SHIPPING INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Net loss $(43,796,685) $(223,522,435) $(148,296,965) Total other comprehensive income/(loss) — — — Comprehensive loss $(43,796,685) $(223,522,435) $(148,296,965) The accompanying notes are an integral part of these Consolidated Financial Statements.F- 7EAGLE BULK SHIPPING INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY Common Stock Common StockAmount Additional paid-in Capital AccumulatedDeficit TotalStockholders’EquityBalance at January 1, 2015 1,875,227 $18,752 $675,620,642 $(11,548,728) $664,090,666Net loss — — — (148,296,965) (148,296,965)Balance at Vesting of restricted shares withheld foremployee tax 8,076 81 (1,419,309) — (1,419,228)Stock-based compensation — — 3,969,989 — 3,969,989Balance at December 31, 2015 1,883,303 18,833 678,171,322 (159,845,693) 518,344,462Net loss — — — (223,522,435) (223,522,435)Issuance of shares in connection with Second LienLoan Agreement 16,889,828 168,899 17,587,426 — 17,756,325Issuance of shares for private placement, net ofissuance costs 29,333,318 293,333 85,407,202 — 85,700,535Reverse stock split adjustment (32) — — — —Vesting of restricted shares withheld for employeetax 410 4 (2,942) — (2,938)Stock-based compensation — — 2,206,690 — 2,206,690Balance at December 31, 2016 48,106,827 481,069 783,369,698 (383,368,128) 400,482,639Net loss — — — (43,796,685) (43,796,685)Issuance of shares for private placement, net ofissuance costs 22,222,223 222,222 95,807,781 — 96,030,003Vesting of restricted shares withheld for employeetax 65,257 653 (290,192) — (289,539)Stock-based compensation — — 8,738,615 — 8,738,615Balance at December 31, 2017 70,394,307 $703,944 $887,625,902 $(427,164,813) $461,165,033 The accompanying notes are an integral part of these Consolidated Financial Statements.F- 8EAGLE BULK SHIPPING INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31,2017 December 31,2016 December 31, 2015Cash flows from operating activities: Net loss $(43,796,685) $(223,522,435) $(148,296,965)Adjustments to reconcile net loss to net cash provided by/(used in) operatingactivities: Depreciation 29,354,017 35,556,911 41,044,397Amortization of deferred drydocking costs 4,336,669 3,327,411 1,956,344Amortization of debt discount and debt issuance costs 5,927,984 4,532,481 2,146,316Loss on debt extinguishment 14,968,609 — —Amortization of fair value below contract value of time charter acquired (716,783) (661,253) (948,741)Payment-in-kind interest on debt 10,098,401 7,327,843 —(Gain)/loss on sale of vessels, net (2,134,767) 101,860 5,696,675Vessel impairment — 129,027,862 50,872,734Realized loss from sale of investment — — 462,394Net unrealized loss on fair value of derivatives (55,675) — —Fess paid on termination of time charter contract (1,500,000) — —Stock-based compensation expense 8,738,615 2,206,690 3,969,989Drydocking expenditures (2,579,111) (3,688,711) (11,141,561)Changes in operating assets and liabilities: Accounts receivable (12,156,832) 1,986,820 7,654,773Other current and non-current assets (331,707) (26,799) 4,691,158Prepaid expenses 83,196 138,801 (19,833)Inventories (3,236,366) (5,302,307) 174,867Accounts payable 335,688 (1,081,317) (3,447,224)Accrued interest 1,761,443 (372,360) (130,686)Other accrued and non-current liabilities (1,340,366) 528,563 2,357,787Unearned revenue (367,359) 4,485,630 (829,193)Net cash provided by/(used in) operating activities 7,388,971 (45,434,310) (43,786,769) Cash flows from investing activities: Vessel purchases and improvements (174,400,746) (19,860,401) (1,747,099)Advance for vessel purchase (2,201,773) (1,926,886) —Proceeds from sale of investment — — 7,838,346Purchase of short-term investment (4,500,000) — —Proceeds from sale of vessels 26,042,000 13,001,000 4,235,542Purchase of other fixed assets (189,120) (560,348) —Changes in restricted cash — 66,244 (74,918)Net cash provided by/(used in) investing activities (155,249,639) (9,280,391) 10,251,871 Cash flows from financing activities: Repayment of First Lien Facility (184,099,000) (21,276,000) (19,625,000)Repayment of revolver under the First Lien Facility (25,000,000) (30,158,500) —Repayment of Second Lien Facility (77,426,244) — —Proceeds from Revolver Loan facility — 15,158,500 40,000,000Proceeds from Second Lien Facility — 60,000,000 —Proceeds from common stock placement, net of issuance costs 96,030,003 85,700,535 —Proceeds from the Norwegian Bond Debt, net of discount 198,092,000 — —Proceeds from the New First Lien Facility 65,000,000 — —Proceeds from the Ultraco Debt Facility 61,200,000 — —Financing costs paid to lenders (2,025,514) — (500,000)Other financing costs (3,886,104) (3,086,947) —Cash used to settle net share equity awards (289,539) (2,938) (1,419,228)Net cash provided by financing activities 127,595,602 106,334,650 18,455,772Net increase/(decrease) in cash and cash equivalents (20,265,066) 51,619,949 (15,079,126)Cash and cash equivalents at beginning of period 76,516,110 24,896,161 39,975,287Cash and cash equivalents at end of period $56,251,044 $76,516,110 $24,896,161F- 9 Supplemental cash flow information: Cash paid during the period for interest excluding payment of accumulated payment-in-kind interest on the Second Lien Facility paid on December 8, 2017 of $17.7million. $11,589,192 $10,257,766 $9,911,793The accompanying notes are an integral part of these Consolidated Financial Statements.F- 10EAGLE BULK SHIPPING INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. General Information: The accompanying consolidated financial statements include the accounts of Eagle Bulk Shipping Inc. and its wholly-owned subsidiaries(collectively, the "Company,” “we” or “our” or similar terms). The Company is engaged in the ocean transportation of dry bulk cargoes worldwide throughthe ownership, charter and operation of dry bulk vessels. The Company's fleet is comprised of Supramax and Ultramax bulk carriers which are considered tobe Handymax class of vessels and the Company operates its business in one business segment. Each of the Company’s vessels serve the same type of customer, have similar operation and maintenance requirements, operate in the sameregulatory environment, and are subject to similar economic characteristics. Based on this, the Company has determined that it operates in one reportablesegment, which is engaged in the ocean transportation of dry bulk cargoes worldwide through the ownership and operation of dry bulk carrier vessels. The Company is a holding company incorporated in 2005, under the laws of the Republic of the Marshall Islands and is the sole owner of all of theoutstanding shares of its wholly-owned subsidiaries formed in the Republic of the Marshall Islands. The primary activity of each of the subsidiaries is theownership of a vessel. The operations of the vessels are managed by an indirectly wholly-owned subsidiary of the Company, Eagle Bulk Management LLC, aRepublic of the Marshall Islands limited liability company. As of December 31, 2017, the Company owned and operated a modern fleet of 47 oceangoing vessels, 36 Supramax and 11 Ultramax with acombined carrying capacity of 2,683,751 dwt and an average age of approximately 8.2 years. Additionally, the Company chartered in a 61,400 dwt, 2013built Japanese vessel for approximately four years with an option for an additional two years. The following table represents certain information about the Company's charterers, which individually accounted for more than 10% of theCompany's gross charter revenue during the periods indicated: Percentage of Consolidated Charter Revenue For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Charterer Charterer A* — — 17.2% *Relates to charter revenue from a pool in which the Company participated. Note 2. Equity Offerings On December 13, 2016, the Company entered into a Stock Purchase Agreement with certain investors (the “Investors”), pursuant to which theCompany agreed to issue to the Investors in a private placement (the “December Private Placement”) approximately 22.2 million shares of the Company’scommon stock, par value $0.01 per share, at an initial purchase price of $4.50 per share, for aggregate gross proceeds of $100.0 million. On January 20, 2017,the Company closed its previously announced December Private Placement for aggregate net proceeds of $96 million. The Company principally used theproceeds to acquire two Ultramax vessels and for a portion of the payments required to acquire the Greenship Vessels (as defined in "Note 4. Vessels andvessel improvements" to the consolidated financial statements).On July 1, 2016 and July 10, 2016, respectively, the Company entered into Common Stock Purchase Agreements (collectively, the “CommonStock Purchase Agreements”), with certain purchasers (the “Common Stock Purchasers”). The Common Stock Purchasers include certain of our existingshareholders, who held approximately 70% of our outstanding equity prior to entry into the Common Stock Purchase Agreements and prior to giving effectto the delivery of all of the shares of commonF- 11stock issued in connection with the Second Lien Loan Agreement, as well as our Chairman and Chief Executive Officer. The Common Stock PurchaseAgreements provided for the issuance and sale by the Company to the Common Stock Purchasers of an aggregate amount of $88 million of common stock, atan initial price per share of $3.00. On August 10, 2016, the Company closed the transactions contemplated by the Common Stock Purchase Agreements for aggregate proceeds of$85.7 million net of fees and legal expenses. After giving effect to the Company’s previously announced reverse stock split of its issued and outstandingshares of common stock, including the rounding down of fractional shares pursuant to such split, the private placement included the issuance of 29,333,318shares of the Company’s common stock. The Company used the proceeds of the private placement for the acquisition of dry bulk vessels and generalcorporate purposes.In 2016, the Company issued 16,889,828 shares of common stock to the lenders of the Second Lien Facility (defined herein) pro rata based on theirparticipation in the Second Lien Facility. The Company has proportionately allocated the proceeds from the Second Lien Loan Agreement based on therelative fair values of the Second Lien Facility and the common stock issued to the Second Lien Lenders. The difference between the $60 million principalvalue of the Second Lien Facility and its relative fair value, amounting to approximately $17.8 million, was allocated to the issued shares. Note 3. Significant Accounting Policies: (a)Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally acceptedaccounting principles and include the accounts of Eagle Bulk Shipping Inc. and its wholly-owned subsidiaries. All intercompany balances andtransactions were eliminated upon consolidation. (b)Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requiresmanagement to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.Significant estimates include vessel valuations, residual value of vessels, the useful lives of vessels, the value of stock-based compensation and thefair value of derivatives. Actual results could differ from those estimates.(c)Other Comprehensive loss: The Company records the fair value of interest rate swaps and foreign currency swaps designated as hedges as an assetor liability on the balance sheet. The effective portion of the swap is recorded in accumulated other comprehensive loss. Historically, the Companyalso recorded the unrealized gains and losses on its available for sale investments in accumulated other comprehensive loss. The Company did nothave any swaps or available for sale investments as of December 31, 2017 and 2016.(d)Cash, Cash Equivalents and Restricted Cash: The Company considers liquid investments such as time deposits and certificates of deposit with anoriginal maturity of three months or less at the time of purchase to be cash equivalents. Restricted Cash amounting to $74,917 is collateralizing aletter of credit as of December 31, 2017 and December 31, 2016, respectively.(e)Accounts Receivable: Accounts receivable includes receivables from charterers for hire and voyage charterers. At each balance sheet date, allpotentially uncollectible accounts are assessed for purposes of determining the appropriate provision for doubtful accounts.(f)Insurance Claims: Insurance claims are recorded as incurred and represent the claimable expenses, net of deductibles, incurred through eachbalance sheet date, which are expected to be recovered from insurance companies.(g)Inventories: Inventories, which consist of bunkers, are stated at the lower of cost and net realizable value. Cost is determined on a first-in, first-outmethod. Lubes and spares are expensed as incurred. We adopted Accounting Standard Update No. 2015-11, “Simplifying the Measurement ofInventory” prospectively effective January 1, 2017 that requires the inventory to be measured at the lower of cost and net realizable value. Therewas no impact on the consolidated financial statements as a result of the adoption of the new accounting standard.(h)Short-term Investments: The Company considers liquid investments such as certificate of deposits with an original maturity of greater than threemonths as investments. As of December 31, 2017, the Company had $4.5 million in a certificate of deposit with an original maturity of one year.Prior to December 2016, the Company held an investment in the capital stock of Korea Line Corporation (“KLC”). This investment was designatedas Available For Sale (“AFS”)F- 12and reported at fair value, with unrealized gains and losses recorded in stockholders’ equity as a component of accumulated other comprehensiveloss.(i)Vessels and vessel improvements, at cost: Vessels are stated at cost, which consists of the contract price, and other direct costs relating to acquiringand placing the vessels in service. Major vessel improvements are capitalized and depreciated over the remaining useful lives of the vessels.Depreciation is calculated on a straight-line basis over the estimated useful lives of the vessels based on the cost of the vessels reduced by theestimated scrap value of the vessels as discussed below.(j)Vessel lives and Impairment of Long-Lived Assets: The Company estimates the useful life of the Company's vessels to be 25 years from the date ofinitial delivery from the shipyard to the original owner. The useful lives of the Company's vessels are evaluated to determine if events haveoccurred which would require modification to their useful lives. In addition, the Company estimates the scrap value of the vessels to be $300 perlight weight ton ("lwt") based on the 15-year average scrap value of steel. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of theassets may not be recoverable. When the estimate of undiscounted cash flows, excluding interest charges, expected to be generated by the use ofthe asset is less than its carrying amount, the Company will evaluate the asset for an impairment loss. Measurement of the impairment loss is basedon the fair value of the asset as provided by third parties or discounted cash flow analysis. In this respect, management regularly reviews thecarrying amount of the vessels in connection with the estimated recoverable amount for each of the Company's vessels. We did not recognize avessel impairment charge for the year ended December 31, 2017. For the years ended December 31, 2016 and 2015, we recognized impairmentcharges of $129.0 million and $50.9 million, respectively. Refer to Note 4 - Vessels and vessel improvements for further discussion.(k)Accounting for Drydocking Costs: The Company follows the deferral method of accounting for drydocking costs whereby actual costs incurred aredeferred and are amortized on a straight-line basis over the period through the date the next drydocking is required to become due, generally 30months if the vessels are 15 years old or more and 60 months for the vessels younger than 15 years. Costs deferred as part of the drydockinginclude direct costs that are incurred as part of the drydocking to meet regulatory requirements. Certain costs are capitalized during drydocking ifthey are expenditures that add economic life to the vessel, increase the vessel’s earnings capacity or improve the vessel’s efficiency. Direct coststhat are deferred include the shipyard costs, parts, inspection fees, steel, blasting and painting. Expenditures for normal maintenance and repairs,whether incurred as part of the drydocking or not, are expensed as incurred. Unamortized drydocking costs of vessels that are sold are written offand included in the calculation of the resulting gain or loss in the year of the vessels’ sale. Unamortized drydocking costs are written off asdrydocking expense if the vessels are drydocked before the expiration of the applicable amortization period.(l)Deferred Financing Costs: Fees incurred for obtaining new loans or refinancing existing ones are deferred and amortized to interest expense overthe life of the related debt using the effective interest method. Unamortized deferred financing costs are written off when the related debt is repaidor refinanced and such amounts are expensed in the period the repayment or refinancing is made. Such amounts are classified as a reductionof the long-term debt balance on the consolidated balance sheets. For our Super Senior Revolver Facility, as no amounts have been drawn, deferredfinancing fees of $190,000 have been classified as a non-current asset on the Consolidated Balance Sheet.(m)Other fixed assets: Other fixed assets are stated at cost less accumulated depreciation. Depreciation is based on a straight-line basis over theestimated useful life of the asset. Other fixed assets consist principally of leasehold improvements, computers and software and are depreciatedover 3-10 years.(n)Accounting for Revenues and Expenses: Revenues generated from time charters and/or revenues generated from profit sharing arrangements arerecognized on a straight-line basis over the term of the respective time charter agreements as service is provided and the profit sharing is fixed anddeterminable. Revenues generated from time charters linked to the Baltic Supramax index and/or revenues generated from profit sharingarrangements are recognized over the term of the respective time charter agreements as service is provided and the profit sharing is fixed anddeterminable.Under voyage charters, voyage revenues for cargo transportation are recognized ratably over the estimated relative transit time of eachvoyage. Voyage revenue is deemed to commence upon the completion of discharge of the previous charterer’s cargo and is deemed to end uponthe completion of discharge of the current cargo, provided an agreed non-cancellable charter between the Company and the charterer is inexistence, the charter rate is fixed and determinable,F- 13and collectability is reasonably assured. Revenue under voyage charters will not be recognized until a charter has been agreed even if the vesselhas discharged its previous cargo and is proceeding to an anticipated port of loading.Under voyage charters, voyage expenses such as bunkers, port charges, canal tolls, cargo handling operations and brokerage commissions are paidby the Company whereas, under time charters, such voyage costs are paid by the Company's customers. Vessel operating costs include crewing,vessel maintenance and vessel insurance. All voyage and vessel operating expenses are expensed as incurred on an accrual basis, except forcommissions. Commissions are recognized over the related time or voyage charter period since commissions are earned as the Company's revenuesare earned. Probable losses on voyages are provided for in full at the time such loss can be estimated.For the Company’s vessels operating in a pool, revenues and voyage expenses are pooled and allocated to each pool participant under a timecharter agreement basis in accordance with an agreed-upon formula. The formula in the pool agreement for allocating gross shipping revenues netof voyage expenses is based on points allocated to participants’ vessels based on cargo carrying capacity and other technical characteristics, suchas speed and fuel consumption. The selection of charterers, negotiation of rates and collection of related receivables and the payment of voyageexpenses, which include the cost of bunkers and port expenses, are the responsibility of the pool. The operating costs including crews,maintenance and insurance are typically paid by the owner of the vessel. The pool may enter into contracts that earn either voyage charter revenueor time charter revenue. Since the members of the pool share in the revenue less voyage expenses generated by the entire group of vessels in thepool, and the pool operates in the spot market, the revenue earned by these vessels is subject to the fluctuations of the spot market. The Companyrecognizes revenue from this pool arrangement based on its portion of the net distributions reported by the pool, which represents the net voyagerevenue of the pool after voyage expenses and pool manager fees. The Company had one vessel operating in a pool in 2017 until April 2017. TheCompany had one vessel operating in a pool in 2016 and thirteen vessels in 2015.(o)Unearned Charter Hire Revenue: Unearned charter hire revenue represents cash received from charterers prior to the time such amounts are earned.These amounts are recognized as revenue as services are provided in future periods.(p)Repairs and Maintenance: All repair and maintenance expenses are expensed as incurred and are recorded in Vessel Expenses.(q)Protection and Indemnity Insurance: The Company’s Protection and Indemnity Insurance is subject to additional premiums referred to as "backcalls" or "supplemental calls" which are accounted for on an accrual basis and are recorded in Vessel Expenses.(r)Earnings Per Share: Basic earnings per share is computed by dividing the net income or loss by the weighted average number of common sharesoutstanding during the period. Diluted earnings per share reflects the impact of stock options, warrants and restricted stock under the treasury stockmethod unless their impact is anti-dilutive.(s)Interest Rate Risk Management: The Company is exposed to the impact of interest rate changes for outstanding debt under the New First LienFacility and the Ultraco Debt Facility. The Company's objective is to manage the impact of interest rate changes on earnings and cash flows of itsborrowings. The Company may use interest rate swaps to manage net exposure to interest rate changes related to its borrowings.(t)Federal Taxes: The Company is a Republic of the Marshall Islands Corporation. For the years ended December 31, 2017 and 2016, the Companybelieves that its operations qualify for Internal Revenue Code Section 883 exemption and therefore are not subject to United States federal taxeson United States source shipping income. The Company recorded $0.6 million in such taxes as component of voyage expenses for the year endedDecember 31, 2016 which were reversed in second quarter of 2017 upon the determination that the Company qualified for Internal Revenue CodeSection 883 exemption. For the year ended December 31, 2015, the Company did not qualify for the Section 883 exemption and therefore incurredtaxes of $0.3 million on United States source shipping income which was included in voyage expenses in the consolidated statements ofoperations.(u)Restructuring charges: Restructuring charges consist of professional fees for advisors and attorneys who assisted the Company in the debtrestructuring relative to the First Lien Facility in 2016.(v)Stock-based compensation: The Company issues stock-based compensation utilizing both stock options and stock grants. Stock-basedcompensation is recognized using the fair value of the award at the date of grant over the period of vesting on a straight-line basis using the gradedvesting method. Forfeitures are recognized as they occur.F- 14Impact of Recently Issued Accounting Standards In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging ("ASU-2017-12"), which is intended to align the results of the cashflow and fair value hedge accounting with the risk management activities of an entity. The amendments expand the hedge accounting for both financial andnon-financial risk components and they reduce the operational burden of applying hedge accounting. The amendment enables the financial statements toreflect accurately the intent and outcome of its hedging strategies. ASU 2017-12 requires a modified retrospective transition method in which the Companywill recognize the cumulative effect of the change on the opening balance of each affected component of equity in the consolidated balance sheet as of thedate of adoption. The Standard is effective for fiscal years beginning after December 15, 2018, and interim periods with those fiscal years. The Company isevaluating the potential impact of the adoption of this standard on its consolidated financial statements.In July 2017, the FASB issued ASU No. 2017-11, Earnings per share ("ASU 2017-11), which changes the classification of certain equity-linkedfinancial instruments with down round features. As a result, a free standing equity-linked financial instrument or an embedded conversion option would notbe accounted for as a derivative liability at fair value as a result of existence of down round feature. For freestanding equity classified financial instruments,the amendment requires the entities to recognize the effect of the downround feature when triggered in its earnings per share calculations. The standard iseffective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. The Company currently is not expecting anyimpact as a result of adoption of this accounting standard on its consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation-Stock Compensation ("ASU 2017-09"), which provides guidance about whatchanges to the terms and conditions of a stock award require an entity to apply modification accounting as per ASC 718. An entity should account for effectsof modification unless (i) the fair value of the modified award is the same as the fair value of the original award (ii) the vesting conditions of the modifiedaward are the same as the vesting conditions of the original award (iii) the classification of the modified award as an equity instrument or a liabilityinstrument is the same as the classification of the original award. The standard is effective for fiscal years and interim periods within those fiscal years,beginning after December 15, 2017. The Company is currently not expecting any impact as a result of adoption of this accounting standard on itsconsolidated financial statements.In January 2017, the FASB issued Accounting Standards Update No. 2017-1, “Business Combinations (Topic 805).” The amendments in this updateare intended to clarify the definition of business. The current guidance specifies three elements of a business – inputs, processes, and outputs. The newguidance provides a screen to determine when a set (defined as an integrated set of assets and activities) is not a business. The ASU requires that, to be abusiness, the set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Thescreen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similaridentifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. The standard is effective toannual periods beginning after December 15, 2017, including interim periods within those periods. The Company is evaluating the potential impact of theadoption of this standard on its consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes nearly all existingrevenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services aretransferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognitionprocess than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2017, and interim periodstherein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. In May 2016, theFASB issued ASU No. 2016-12, Revenue from Contracts with Customers. This update provides further guidance on applying collectability criterion to assesswhether the contract is valid and represents a substantive transaction on the basis whether a customer has the ability and intention to pay the promisedconsideration. The requirements of this standard include an increase in required disclosures. Management has assembled an internal project team and iscurrently analyzing contracts with our customers covering the significant streams of the Company's annual revenues under the provisions of the new standardas well as changes necessary to information technology systems, processes and internal controls to capture new data and address changes in financialreporting. Management will apply the modified retrospective transition method and will recognize the cumulative effect of adopting this standard as anadjustment to the opening balance of retained earnings as of January 1, 2018. Prior periods will not be retrospectively adjusted. The Company continues tomake progress in its implementation and assessment of the new revenue standard. While the assessment is still ongoing, based on the progress made to date,the Company expects that the timingF- 15of recognition of revenue for certain ongoing charter contracts will be impacted as well as the timing of recognition of certain voyage related costs. While theassessment of certain effects of the adoption of the ASU 2014-09 are ongoing, the timing of recognition will primarily impact spot voyage charters. UnderASU 2014-09, revenue will be recognized from when the vessel arrives at the load port until the completion of discharge at the discharge port instead ofrecognizing revenue from the discharge of the previous voyage provided an agreed non-cancellable charter between the Company and the charterer is inexistence, the charter rate is fixed and determinable, and collectability is reasonably assured. The financial impact of adoption will depend on the number ofspot voyages and time charter arrangements as well as their percentage of completion at January 1, 2018. The Company expects that the adoption of ASU2014-09 will result in an increase in the opening Accumulated Deficit balance as of January 1, 2018 in the Consolidated Balance Sheet of approximately$0.5 million to $1.3 million as a result of the adjustment of Revenue and Voyage expenses. The above estimate could potentially change upon furtherevaluation. Additionally, the Company is currently evaluating the adjustment, if any, to other expenses such as Vessel expenses in the ConsolidatedStatement of Operations and the additional presentation and disclosure requirements of ASU 2014-09 on our consolidated financial statements.In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 is intended to increase the transparency andcomparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasingarrangements. In order to meet that objective, the new standard requires recognition of the assets and liabilities that arise from leases. A lessee will be requiredto recognize on the balance sheet the assets and liabilities for leases with lease terms of more than 12 months. Accounting by lessors will remain largelyunchanged from current U.S. GAAP. The requirements of this standard include an increase in required disclosures. The new standard is effective for publiccompanies for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Lessees and lessors willbe required to apply the new standard at the beginning of the earliest period presented in the financial statements in which they first apply the new guidance,using a modified retrospective transition method. The Company is currently evaluating the effect that adopting this standard will have on our financialstatements and related disclosures. Management expects that the Company will recognize increases in reported amounts for vessel and other fixed assets andrelated lease liabilities upon adoption of the new standard. The impact to the Company’s financial statements will depend upon the amount of vessels theCompany has chartered in, as well as the length and nature of such charters. Refer to “Note 10. Commitments and Contingencies” to the consolidatedfinancial statements for disclosure about the Company’s time charter and lease commitments as of December 31, 2017. In August 2016, the FASB issued Accounting Standards Update No. 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain CashReceipts and Cash Payments.” The new guidance is intended to provide specific guidance on cash flow classification issues such as debt prepayment or debtextinguishment costs, settlement of zero coupon debt instruments or cases where the coupon interest rate is insignificant compared to the effective interestrate of the borrowing, contingent consideration payments in a business combination, proceeds from insurance claim settlements and distributions received byequity method investees. The standard is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods.The amendments should be applied using a retrospective transition method to each period presented. At this time, the Company expects to reclassify $17.7million of accumulated payment-in-kind interest paid upon the discharge of the Second Lien Facility (defined herein) currently recorded as a use of cash fromfinancing activities, as a use of cash from operating activities in the fourth quarter of 2018 upon adoption of this accounting standard.In November 2016, the FASB issued Accounting Standards Update No. 2016-18, “Statement of Cash Flows- Restricted Cash”. The amendments inthis Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts described asrestricted cash and restricted cash equivalents. Therefore, the restricted cash and restricted cash equivalents should be included with cash and cashequivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this updateare effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company will include $74,917 of restrictedcash within cash and cash equivalents when reconciling the beginning-of-period and end-of-period totals shown on the consolidated statement of cash flowsupon adoption of this standard. Note 4. Vessels and vessel improvements As of December 31, 2017, the Company’s operating fleet consisted of 47 dry bulk vessels.As of December 31, 2015, the Company identified six vessels which it was probable that the Company was going to sell, and recognized animpairment charge in 2015 of $50,872,734. The carrying value of these vessels prior to impairment in 2015 was $76,332,734. As the value of such vesselsfurther declined in the first quarter of 2016, the Company recorded an additionalF- 16impairment charge of $6,167,262 in that quarter. Out of the six vessels initially identified in 2015, all vessels have been sold as of December 31, 2017.As of December 31, 2016, as part of our fleet renewal program, management considered it probable that we would divest some of our older vessels aswell as certain less efficient vessels from its fleet to achieve operating cost savings. The Company identified two groups of vessels. Group 1 vessels wereselected based on the shipyard they were built and their technical specifications. The group consisted of five sister ships constructed in Dayang shipyard with53,000 dwt. These vessels were identified by management as having poorer fuel efficiency, among other reasons, compared to their peers. The second groupof 11 vessels were older than 13 years and less than 53,000 dwt. As vessels get older, they become more expensive to maintain and drydock. Additionally,management’s strategy entails moving to larger Ultramax vessels as the Company renews its fleet. For those sixteen vessels, management believed that it isprobable that such vessels will be sold within the next two years. Based on management’s projected undiscounted cash flows prior to sale, factoring theprobability of sale, such vessels were determined to be impaired, and written down to their current fair value as of December 31, 2016, which was determinedby obtaining broker quotes from two unaffiliated shipbrokers. As a result, the Company recorded an impairment charge of $122,860,600 in the fourth quarterof 2016. The carrying value of these vessels prior to impairment was $234,860,600. Out of the vessels impaired as of December 31, 2016, the Company soldtwo vessels during 2017 and signed a memorandum of sale on the third vessel. For non recurring fair value disclosure, please refer to "Note. 9 Derivativeinstruments and Fair value measurements" to the consolidated financial statements. On November 14, 2016, the Company, through its subsidiary Eagle Bulk Shipco LLC, signed a memorandum of agreement to acquire a 2017 built64,000 dwt SDARI-64 Ultramax dry bulk vessel constructed at Chengxi Shipyard Co., Ltd for $17.9 million. The Company took delivery of the vessel, theSingapore Eagle, on January 11, 2017.On February 28, 2017, Ultraco, a wholly-owned subsidiary of the Company, entered into a framework agreement with Greenship Bulk Manager Pte.Ltd., as Trustee-Manager of Greenship Bulk Trust, a Norwegian OTC-listed entity (the "Greenship Sellers"), for the purchase of nine modern sister vessels (the"Greenship Vessels") built between 2012 and 2015, (the "Greenship Purchase Agreement"). The aggregate purchase price for the nine Greenship Vessels is$153.0 million. The allocated purchase price for each Greenship Vessel is $17.0 million. The Company took delivery of all nine Greenship Vessels prior toDecember 31, 2017.For the year ended December 31, 2017, the Company sold four vessels (Redwing, Sparrow, Woodstar and Wren) for total net proceeds of $26.0million after brokerage commissions and associated selling expenses and recorded a net gain of $2.1 million. A portion of the proceeds was used towardrepayment of the term loan under the First Lien Facility. Please refer to "Note 8 Debt - First Lien Facility" to the consolidated financial statements.On August 30, 2017, the Company signed a memorandum of agreement to sell the vessel Avocet for $9.6 million after brokerage commissions andassociated selling expenses. The vessel is expected to be delivered to the buyers in the second quarter of 2018. The Company expects to recognize a gain of$0.3 million. As of December 31, 2017, the Company reported the carrying amount of the vessel as a vessel held for sale in its Consolidated Balance Sheet. On December 19, 2017, the Company signed a memorandum of agreement to purchase a 2015 built Ultramax vessel for $21.275 million. As ofDecember 31, 2017, the Company paid a deposit of $2.2 million. The Company took delivery of the vessel in the first quarter of 2018. December 31, 2017 December 31, 2016 Vessel and vessel improvements at the beginning of the year$567,592,950 $733,960,731Advance paid for purchase of Singapore Eagle at December 31, 20161,926,886 —Purchase of Vessels and vessel improvements174,400,746 19,860,401Disposal of Vessels(15,218,633) (13,102,860)Reclassification to vessels held for sale(9,316,095) (8,688,601)Depreciation Expense(29,149,435) (35,408,859)Vessel impairment charge$— $(129,027,862)Vessels and Vessel Improvements, at December 31, 2017$690,236,419 $567,592,950 F- 17Note 5. Short-term investment As of December 31, 2017, the Company held a certificate of deposit of $4,500,000, with an original maturity at the date of purchase of one year. It isclassified as Level 2 security in the fair value hierarchy.Note 6. Deferred Drydock Costs Drydocking activity is summarized as follows: December 31, 2017 December 31, 2016 December 31, 2015Beginning Balance $11,507,309 $11,146,009 $1,960,792Drydocking costs 2,579,111 3,688,711 11,141,561Drydock amortization (4,336,669) (3,327,411) (1,956,344)Ending Balance $9,749,751 $11,507,309 $11,146,009Note 7. Other Accrued Liabilities Other accrued liabilities consist of: December 31, 2017 December 31, 2016Vessel and voyage expenses $5,373,389 $6,986,486General and administrative expenses 6,050,078 3,446,113Other expenses 386,899 1,112,848Balance $11,810,366 $11,545,447 Note 8. Debt Long-term debt consists of the following: F- 18 December 31, 2017 December 31, 2016First Lien Facility / Exit Financing Facility* $— $209,099,000Debt issuance costs - First Lien / Exit Financing Facility — (4,746,682)First Lien Facility / Exit Financing Facility net of debt issuance costs — 204,352,318Second Lien Facility — 67,327,843Debt discount and Debt issuance costs - Second Lien Facility — (15,736,617)Second Lien Facility, net of debt discount and debt issuance costs — 51,591,226Norwegian Bond Debt 200,000,000 —Debt discount and debt issuance costs - Norwegian Bond Debt (6,049,671) —Norwegian Bond Debt, net of debt discount and debt issuance costs 193,950,329 —New First Lien Facility * 65,000,000 —Debt discount and debt issuance costs - New First Lien Facility (1,241,815) —New First Lien Facility, net of debt discount and debt issuance costs 63,758,185 —Ultraco Debt Facility 61,200,000 —Debt discount and debt issuance costs - Ultraco Debt Facility (1,224,838) —Ultraco Debt Facility, net of debt discount and debt issuance costs 59,975,162 —Less: Current Portion - Norwegian Bond Debt (4,000,000) —Total long-term debt $313,683,676 $255,943,544 *Includes loan balances on term loan and revolver loan facility under the New First Lien Facility and First Lien Facility as of December 31, 2017and December 31, 2016. On December 8, 2017, the Company, through certain of its wholly-owned subsidiaries, completed a refinancing of approximately $265,000,000 thatpaid off the Company's First Lien Facility and Second Lien Facility (both described elsewhere herein) through (a) a new credit facility comprised of a termloan and revolver of $65,000,000 (the “New First Lien Facility”), by and among Eagle Shipping, as borrower, certain wholly-owned vessel-owningsubsidiaries of Eagle Shipping, as guarantors (the “Guarantors”), the lenders thereunder (the “Lenders”), the swap banks party thereto, and ABN AMROCapital USA LLC, as facility agent and security trustee for the Lenders and (b) the issuance by Eagle Bulk Shipco LLC (“Shipco”), a wholly-ownedsubsidiary of the Company, of $200,000,000 in aggregate principal amount of 8.25% Senior Secured Bonds (the “Norwegian Bond Debt”), as describedbelow. In addition, Shipco entered into a $15,000,000 Super Senior Revolving Facility Agreement (the “Super Senior Facility”), by and among Shipco, asborrower, and ABN AMRO Capital USA LLC, as original lender, mandated lead arranger and agent.The Company incurred $5.1 million in other financing costs in connection with the transaction out of which $1.3 million is accrued and outstandingas of December 31, 2017. Norwegian Bond Debt On November 28, 2017, Shipco issued into escrow $200,000,000 in aggregate principal amount of 8.250% Senior Secured Bonds, pursuant to theBond Terms, dated as of November 22, 2017, by and between the Issuer and Nordic Trustee AS, as the Bond Trustee. After giving effect to an original issuediscount of approximately 1% and deducting offering expenses of $3.1 million, the net proceeds from the issuance of the Bonds are approximately $195.0million. These net proceeds from the Bonds, together with the proceeds from the New First Lien Facility and cash on hand, were used to repay all amountsoutstanding including accrued interest under the First Lien Facility, which was approximately $193.0 million, and the Second Lien Facility, which wasapproximately $77.4 million, and to pay expenses associated with the refinancing transactions. Shipco incurred $1.2 million in other financing costs inconnection with the transaction.The Norwegian Bond Debt is guaranteed by the limited liability companies that are subsidiaries of the Issuer and the legal and beneficial owners of28 security vessels (the "Shipco Vessels) in the Company’s fleet, and will be secured by mortgages over such security vessels, a pledge granted by theCompany over all of the shares of the Issuer, a pledge granted by the Issuer over all the shares in the Vessel Owners, certain charter contract assignments,certain assignments of earnings, a pledge over certainF- 19accounts, an assignment of insurances covering security vessels, and assignments of intra-group debt between the Company and the Issuer or its subsidiaries.Pursuant to the Bond Terms, interest on the Bonds will accrue at a rate of 8.250% per annum on the nominal amount of each of the Bonds fromNovember 28, 2017, payable semi-annually on May 29 and November 29 of each year (each, an “Interest Payment Date”), commencing May 29, 2018.Furthermore, if Shipco fails to have the Norwegian Bonds listed for trading within twelve months of the issue date, the rate on the Norwegian Bonds willincrease by 0.5%. The Bonds will mature on November 28, 2022. On each Interest Payment Date from and including November 29, 2018, the Issuer mustrepay an amount of $4,000,000, plus accrued interest thereon. Any outstanding Bonds must be repaid in full on the Maturity Date at a price equal to 100% ofthe nominal amount, plus accrued interest thereon.The Issuer may redeem some or all of the outstanding Bonds at any time on or after the Interest Payment Date in May 2020 (the “First Call Date”), atthe following redemption prices (expressed as a percentage of the nominal amount), plus accrued interest on the redeemed amount, on any business day fromand including: Period Redemption PriceFirst Call Date to, but not including, the Interest Payment Date in November 2020 104.125%Interest Payment Date in November 2020 to but not including, the InterestPayment Date in May 2021 103.3%Interest Payment Date in May 2021 to, but not including, the Interest PaymentDate in November 2021 102.475%Interest Payment Date in November 2021 to, but not including, the InterestPayment Date in May 2022 101.65%Interest Payment Date in May 2022 to, but not including, the Maturity Date 100%Prior to the First Call Date, the Issuer may redeem some or all of the outstanding Bonds at a price equal to 100% of the nominal amount of the Bondsplus a “make-whole” premium and accrued and unpaid interest to the redemption date. If the Company experiences a change of control, each holder of the Bonds will have the right to require that the Issuer purchase all or some of theBonds held by such holder at a price equal to 101% of the nominal amount, plus accrued interest.The Bond Terms contain certain financial covenants that the Issuer’s leverage ratio defined as the ratio of outstanding bond amount and any drawnamounts under the Super Senior Facility less consolidated cash balance to the aggregate book value of the Shipco Vessels must not exceed 75% and its andits subsidiaries’ free liquidity must at all times be at least $12,500,000. The Company is in compliance with its financial covenants as of December 31, 2017.The Bond Terms also contain certain events of default customary for transactions of this type, including, but not limited to, those relating to: afailure to pay principal or interest; a breach of covenants, representation or warranty; a cross default to other indebtedness; the occurrence of certainbankruptcy and insolvency events; and the impossibility or unlawfulness of performance of the finance documents.The Bond terms also contain certain exceptions and qualifications, among other things, limit the Company’s and the Issuer’s ability and the abilityof the Issuer’s subsidiaries to do the following: make distributions; carry out any merger, other business combination, demerger or corporate reorganization;make substantial changes to the general nature of their respective businesses; incur certain indebtedness; incur liens; make loans or guarantees; make certaininvestments; transact with affiliates; enter into sale and leaseback transactions; engage in certain chartering-in of vessels; dispose of shares of Vessel Owners;or acquire the Bonds.New First Lien Facility On December 8, 2017, Eagle Shipping entered into the New First Lien Facility, which provides for (i) a term loan facility in an aggregate principalamount of up to $60,000,000 (the “Term Loan”) and (ii) a revolving credit facility in an aggregate principal amount of up to $5,000,000 (the “RevolvingLoan”). Outstanding borrowings under the New First Lien Facility bear interest at LIBOR plus 3.50% per annum. Eagle Shipping paid $975,000 to thelenders and incurred $283,355 of other financing costs in connection with the transaction.F- 20 The New First Lien Facility matures on the earlier of (i) five years from the initial borrowing date under the Credit Agreement and (ii) December 8,2022. With respect to the Term Loan, Eagle Shipping is required to make quarterly repayments of principal of $2.15 million beginning January 15, 2019,with a final balloon payment to be made at maturity. With respect to the Revolving Loan, Eagle Shipping must repay the aggregate principal amount of allborrowings outstanding on the maturity date. Accrued interest on amounts outstanding under the Term Loan and the Revolving Loan must be paid on thelast day of each applicable interest period. Interest periods are for three months, six months or any other period agreed between Eagle Shipping and theLenders. Finally, Eagle Shipping must prepay certain specified amounts outstanding under the New First Lien Facility if an Eagle Shipping Vessel (asdefined below) is sold or becomes a total loss or if there is a change of control with respect to the Company, Eagle Shipping or any Guarantor.Eagle Shipping’s obligations under the New First Lien Facility are secured by, among other items, a first priority mortgage on the nine vessels inEagle Shipping’s fleet as identified in the Credit Agreement and such other vessels that it may from time to time include with the approval of the Lenders (the“Eagle Shipping Vessels”), an assignment of certain accounts, an assignment of certain charters with terms that may exceed 12 months, an assignment ofinsurances, an assignment of certain master agreements, and a pledge of the membership interests of each of Eagle Shipping’s vessel-owning subsidiaries. Inthe future, Eagle Shipping may grant additional security to the Lenders from time to time. The New First Lien Facility contains financial covenants requiring Eagle Shipping to maintain minimum liquidity of $500,000 in respect of eachEagle Shipping Vessel and to maintain a consolidated interest coverage ratio beginning for the fiscal quarter ending on June 30, 2019, of not less than arange varying from 1.50 to 1.00 to 2.50 to 1.00. In addition, the New First Lien Facility also imposes operating restrictions on Eagle Shipping and theGuarantors, including limiting Eagle Shipping’s and the Guarantors’ ability to, among other things: pay dividends; incur additional indebtedness; createliens on assets; sell assets; dissolve or liquidate; merge or consolidate with another person; make investments; engage in transactions with affiliates; andallow certain changes of control to occur. The Company is in compliance with its financial covenants as of December 31, 2017. The New First Lien Facility also includes customary events of default, including those relating to: a failure to pay principal or interest; a breach ofcovenant, representation or warranty; a cross-default to other indebtedness; the occurrence of certain bankruptcy and insolvency events; the occurrence ofcertain ERISA events; a judgment default; the cessation of business; the impossibility or unlawfulness of performance of the loan documents; theineffectiveness of any material provision of any loan document; the occurrence of a material adverse effect; and the occurrence of certain swap terminations. Super Senior Facility On December 8, 2017, Shipco entered into the Super Senior Facility, which provides for a revolving credit facility in an aggregate amount of up to$15,000,000. The proceeds of the Super Senior Facility, which are currently undrawn, are expected, pursuant to the terms of the Super Senior Facility, to beused (i) to acquire additional vessels or vessel owners and (ii) for general corporate and working capital purposes of Shipco and its subsidiaries. The SuperSenior Facility matures on August 28, 2022. Shipco paid $190,000 as other financing costs in connection with the transaction.As of December 31, 2017, the availability under the Super Senior Facility is $15,000,000. As of December 31, 2017, Shipco is utilizing $4.8 millionof the undrawn Super Senior Facility towards its minimum liquidity covenant under the Norwegian Bond Debt.The outstanding borrowings under the Super Senior Facility will bear interest at LIBOR plus 2.00% per annum and commitment fees of 40% of theapplicable margin on the undrawn portion of the facility. For each loan that is requested under the Super Senior Facility, Eagle Shipco must repay such loanalong with accrued interest on the last day of each interest period relating to the loan. Interest periods are for three months, six months or any other periodagreed between Shipco and the Super Senior Facility Agent. Additionally, subject to the other terms of the Super Senior Facility, amounts repaid on the lastday of each interest period may be re-borrowed.Shipco’s obligations under the Super Senior Facility are guaranteed by the limited liability companies that are subsidiaries of Shipco and the legaland beneficial owners of 28 vessels in the Company’s fleet (the “Eagle Shipco Vessel Owners”), and will be secured by mortgages over such vessels, a pledgegranted by the Company over all of the shares of Eagle Shipco, a pledge granted by Eagle Shipco over all the shares in the Eagle Shipco Vessel Owners,certain charter contract assignments, certain assignments of earnings, a pledge over certain accounts, an assignment of insurances covering security vessels,and assignments of intra-group debt between the Company and Shipco or its subsidiaries. The Super Senior Facility ranks super senior to the Bonds withrespect to any proceeds from any enforcement action relating to security or guarantees for both the Super Senior Facility and the Bonds.F- 21The Super Senior Facility contains certain covenants that, subject to certain exceptions and qualifications, among other things, limit Eagle Shipco’sand its subsidiaries’ ability to do the following: make distributions; carry out any merger, other business combination, or corporate reorganization; makesubstantial changes to the general nature of their respective businesses; incur certain indebtedness; incur liens; make loans or guarantees; make certaininvestments; transact other than on arm’s-length terms; enter into sale and leaseback transactions; engage in certain chartering-in of vessels; or dispose ofshares of Eagle Shipco Vessel Owners. Additionally, Shipco’s leverage ratio must not exceed 75% and its and its subsidiaries’ free liquidity must at all timesbe at least $12,500,000. Also, the total commitments under the Super Senior Facility will be cancelled if (i) at any time the aggregate market value of thesecurity vessels for the Super Senior Facility is less than 300% of the total commitments under the Super Senior Facility or (ii) if Shipco or any of itssubsidiaries redeems or otherwise repays the Bonds so that less than $100,000,000 is outstanding under the Bond Terms. The Company is in compliance withits financial covenants as of December 31, 2017.The Super Senior Facility also contains certain events of default customary for transactions of this type, including, but not limited to, those relatingto: a failure to pay principal or interest; a breach of covenants, representation or warranty; a cross default to other indebtedness; the occurrence of certainbankruptcy and insolvency events; the cessation of business; the impossibility or unlawfulness of performance of the finance documents for the Super SeniorFacility; and the occurrence of a material adverse effect. Ultraco Debt Facility On June 28, 2017, Ultraco, a wholly-owned subsidiary of the Company, entered into a credit agreement (the “Ultraco Debt Facility”), by andamong Ultraco, as borrower, certain wholly-owned vessel-owning subsidiaries of Ultraco, as guarantors (the “Ultraco Guarantors”), the lenders thereunder (the“Ultraco Lenders”), the swap banks party thereto, ABN AMRO Capital USA LLC, as facility agent and security trustee for the Ultraco Lenders, ABN AMROCapital USA LLC, DVB Bank SE and Skandinaviska Enskilda Banken AB (publ), as mandated lead arrangers, and ABN AMRO Capital USA LLC, as arrangerand bookrunner. The Ultraco Debt Facility provides for a multi-draw senior secured term loan facility in an aggregate principal amount of up to the lesser of(i) $61,200,000 and (ii) 40% of the lesser of (1) the purchase price of the nine Greenship Vessels to be acquired by Ultraco and the Ultraco Guarantorspursuant to a previously disclosed framework agreement, dated as of February 28, 2017, with Greenship Bulk Manager Pte. Ltd., as Trustee-Manager ofGreenship Bulk Trust, and (2) the fair market value of the Greenship Vessels. The proceeds of the Ultraco Debt Facility were used for the purpose of financing,refinancing or reimbursing a part of the acquisition cost of the Greenship Vessels. The outstanding borrowings under the Ultraco Debt Facility bear interest atLIBOR plus 2.95% per annum. The Ultraco Debt Facility also provides for the payment of certain other fees and expenses by Ultraco. Ultraco paid $918,000to the lenders and $459,735 as deferred financing costs in connection with the transaction.As of December 31, 2017, the Company has drawn $61,200,000 of the credit facility relating to the acquisition of the nine Greenship Vessels. The Ultraco Debt Facility matures on the earlier of (i) five years after the delivery of the last remaining Greenship Vessel to occur and (ii) October31, 2022. There are no fixed repayments until January 2019 (the "First Repayment Date"). Ultraco is required to make quarterly repayments of principal in anamount of $1,602,270 beginning in the first quarter of 2019 with a final balloon payment to be made at maturity. The Ultraco Debt Facility allows forincreased commitments, subject to the satisfaction of certain conditions and the obtaining of certain approvals, in an aggregate principal amount of up to thelesser of (i) $38,800,000 and (ii) 40% of the aggregate fair market value of any additional vessels to be financed with such incremental commitment. Ultraco’s obligations under the Ultraco Debt Facility are secured by, among other items, a first priority mortgage on each of the Greenship Vesselsand such other vessels that it may from time to time include with the approval of the Ultraco Lenders, an assignment of earnings of the Greenship Vessels, anassignment of all charters with terms that may exceed 12 months, an assignment of insurances, an assignment of certain master agreements, and a pledge ofthe membership interests of each of Ultraco’s vessel-owning subsidiaries. In the future, Ultraco may grant additional security to the Ultraco Lenders from timeto time. The Ultraco Debt Facility contains financial covenants requiring Ultraco, among other things: (1) to ensure that the aggregate market value of theGreenship Vessels (plus the value of certain additional collateral) is at all times not less than 150% of the aggregate principal amount of debt outstanding(subject to certain adjustments); (2) to maintain cash or cash equivalents not less than (a) a liquidity reserve of $600,000 in respect of each Greenship Vesseland (b) a debt service reserve of $600,000 in respect of each Greenship Vessel, a portion of which may be utilized to satisfy the obligations under the UltracoDebt Facility upon satisfaction of certain conditions; however, taking into account the requirements of 2(a) and 2(b), the cash or cash equivalents cannot beless than the greater of (i) $7.5 million or (ii) 12% of the consolidated total debt of Ultraco and its subsidiaries; (3) to maintain at all times a ratio ofconsolidated tangible net worth to consolidated total assets of not less than 0.35 to 1.00; (4) to maintain a consolidated interest coverage ratio beginningafter the second anniversary of June 28, 2017, of not less than a rangeF- 22varying from 2.00 to 1.00 to 2.50 to 1.00; and (5) to maintain a ballast water treatment systems reserve of $4,550,000, which may be released upon thesatisfaction of certain conditions. In addition, the Ultraco Debt Facility also imposes operating restrictions on Ultraco and the Ultraco Guarantors, includinglimiting Ultraco’s and the Ultraco Guarantors’ ability to, among other things: pay dividends; incur additional indebtedness; create liens on assets; sell assets;dissolve or liquidate; merge or consolidate with another person; make investments; engage in transactions with affiliates; and allow certain changes ofcontrol to occur.As a result of the receipt of extensions from the United States Coast Guard (the "USCG") regarding compliance with a USCG approved ballast watertreatment systems ("BWMS"), the funds held in the ballast water treatment system reserve account have been released for Ultraco's use in the third quarter of2017. The Ultraco Debt Facility also includes customary events of default, including those relating to: a failure to pay principal or interest; a breach ofcovenant, representation or warranty; a cross-default to other indebtedness; the occurrence of certain bankruptcy and insolvency events; the occurrence ofcertain ERISA events; a judgment default; the cessation of business; the impossibility or unlawfulness of performance of the loan documents; theineffectiveness of any material provision of any loan document; the occurrence of a material adverse effect; and the occurrence of certain swap terminations.On December 29, 2017, Ultraco, a wholly-owned subsidiary of the Company entered into a First Amendment (the “First Amendment”) to the UltracoDebt Facility to increase the commitments for the purpose of financing the acquisition of an additional vessel by New London Eagle LLC, a wholly ownedsubsidiary of Ultraco and additional guarantor under the Ultraco Debt Facility. The increase in the commitments was $8,600,000. Ultraco took delivery of thevessel in January 2018 and drew down $8.6 million. The Company paid a deposit of $2.2 million for the purchase of the vessel as of December 31, 2017.Interest rates For the year ended December 31, 2017, interest rates on our outstanding debt under the First Lien Facility ranged from 4.77% to 5.35%, including amargin over LIBOR and commitment fees of 40% of the margin on the undrawn portion of the facility. The weighted average effective interest rate was6.18%. The interest rates on our outstanding debt under the Ultraco Debt Facility ranged from 4.19% to 4.28%, including a margin over LIBOR applicableunder the terms of the Ultraco Debt Facility which was entered into on June 28, 2017. The weighted average effective interest rate was 4.71%. The NorwegianBond debt carries an interest rate of 8.25%. The weighted average effective interest rate on the same was 8.84%. The interest rate on our outstanding debtunder the New First Lien Facility was 4.83% including a margin over LIBOR applicable under the terms of the New First Lien Facility which was entered intoon December 8, 2017. The weighted average effective interest rate was 5.21%. For 2016, interest rates on our outstanding debt ranged from 3.86% to 4.99%, including a margin over LIBOR applicable under the terms of the FirstLien Facility/Exit Financing Facility. The weighted average effective interest rate including the amortization of debt discount for this period was 6.83%.For 2015, interest rates on our outstanding debt ranged from 3.696% to 4.08%, including a margin over LIBOR applicable under the terms of theExit Financing Facility. The weighted average effective interest rate including the amortization of debt discount for this period was 5.06%.For 2017 and 2016, the payment-in-kind interest rate on our Second Lien Facility was 15% including a margin over LIBOR. The weighted averageeffective interest rate on our Second Lien Facility including the amortization of debt discount was 17.05%. F- 23Interest Expense consisted of: For the Years Ended December 31,2017 December 31,2016 December 31,2015First Lien Facility / Exit Financing Facility interest $10,305,275 $9,938,822 $9,781,106Amortization of debt discount and debt issuance costs 5,927,984 4,532,481 2,146,316Payment in kind interest on Second Lien Facility 10,098,401 7,327,843 —Ultraco Debt Facility interest 1,269,581 — —Norwegian Bond Debt interest 1,558,333 — —New First Lien Facility interest 209,420 — —Commitment fees - Super Senior Revolver Facility 8,000 — —Total Interest Expense $29,376,994 $21,799,146 $11,927,422 First Lien FacilityOn March 30, 2016, Eagle Shipping as borrower, and certain of its subsidiaries that were guarantors of the Company’s obligations under theCompany’s senior secured credit facility (the “Exit Financing Facility”), as guarantors, entered into the “First Lien Facility with the lenders thereunder (the“First Lien Lenders”) and ABN AMRO Capital USA LLC, as agent and security trustee for the lenders. The First Lien Facility amended and restated the ExitFinancing Facility in its entirety, provided for Eagle Shipping to be the borrower in the place of the Company, and further provided for a waiver of any andall events of default occurring as a result of the voluntary OFAC Disclosure (as defined in “Note 10. Commitments and Contingencies - Legal Proceedings” tothe consolidated financial statements). The First Lien Facility provided for a term loan in the amount of $201,468,750 after giving effect to the entry into theFirst Lien Facility and the Second Lien Facility as well as a $50,000,000 revolving credit facility (the "First Lien Facility"). The outstanding borrowingsunder the First Lien Facility bore interest at LIBOR plus 4.0% per annum.Eagle Shipping prepaid $5,651,000 of the term loan during the year ended December 31, 2016 and $13,021,000 of the term loan for the year endedDecember 31, 2017 pursuant to the terms of the First Lien Facility relating to mandatory prepayments upon sales of vessels. Additionally, Eagle Shippingalso repaid $5,000,000 of the revolving credit facility in the third quarter of 2017. On December 8, 2017, Eagle Shipping repaid the outstanding balance ofthe term loan of $171,078,000 and the outstanding balance of the revolver loan of $20,000,000 and discharged the debt under the First Lien Facility in full.As a result, Eagle Shipping recorded a loss, representing the difference between settlement price and the net carrying value of the debt amounting to $3.2million which is included in loss on debt extinguishment in the Consolidated Statement of Operations. Second Lien FacilityOn March 30, 2016, Eagle Shipping, as borrower, and certain of its subsidiaries that were guarantors of the Company’s obligations under the ExitFinancing Facility, as guarantors, entered into a Second Lien Facility with certain lenders (the “Second Lien Lenders”) and Wilmington Savings FundSociety, FSB as agent for the Second Lien Lenders (the “Second Lien Agent”). The Second Lien Facility provided for a term loan in the amount of$60,000,000 (the “Second Lien Facility”), and scheduled to mature on January 14, 2020. The term loan under the Second Lien Facility bore interest at a rateof LIBOR plus 14.00% per annum with a 1.0% LIBOR floor paid in kind quarterly in arrears. The payment-in-kind interest represents a non-cash operatingand financing activity on the consolidated statements of cash flows for the years ended December 31, 2017 and 2016.On December 8, 2017, in connection with the refinancing defined above, Eagle Shipping repaid the outstanding debt and accumulated payment-in-kind interest aggregating $77.4 million, and discharged the debt under the Second Lien Facility in full. Eagle Shipping recorded the difference between thesettlement price and the net carrying value of the debt amounting to $11.8 million, as loss on debt extinguishment in the Consolidated Statement ofOperations.Exit Financing Facility F- 24On October 9, 2014, the Company entered into the Exit Financing Facility with the Exit Lenders. The Exit Financing Facility was in the amount of$275 million, including a $50 million revolving credit facility out of which $40 million was drawn as of December 31, 2015, and had a maturity date of onOctober 15, 2019. Amounts drawn under the Exit Financing Facility bore interest at a rate of LIBOR plus margin ranging between 3.50% and 4.00% perannum. The revolving credit facility was subject to an annual commitment fee of 40% of the margin. The Exit Financing Facility was amended and restated in its entirety by Eagle Shipping on March 30, 2016 and succeeded by the First Lien Facilitydescribed above. Scheduled Debt MaturitiesThe following table presents the scheduled maturities of principal amounts of our debt obligations for the next five years. Norwegian Bond Debt New First Lien Facility Ultraco Debt Facility Total 2018 $4,000,000 $— $— $4,000,0002019 8,000,000 10,750,000 8,011,350 26,761,3502020 8,000,000 8,600,000 6,409,080 23,009,0802021 8,000,000 8,600,000 6,409,080 23,009,0802022 172,000,000 37,050,000 40,370,490 249,420,490 $200,000,000 $65,000,000 $61,200,000 $326,200,000` Note 9. Derivative Instruments and Fair Value Measurements Forward freight agreements, bunker swaps and freight derivatives The Company trades in forward freight agreements (“FFAs”) and bunker swaps, with the objective of utilizing this market as economic hedginginstruments that reduce the risk of specific vessels to changes in the freight market. The Company’s FFAs and bunker swaps have not qualified for hedgeaccounting treatment. As such, unrealized and realized gains are recognized as a component of other expense in the Consolidated Statement of Operationsand Other current assets and Fair value of derivatives in the Consolidated Balance Sheets. Derivatives are considered to be Level 2 instruments in the fairvalue hierarchy. The effect of non-designated derivative instruments on the consolidated statements of operations: Amount of gain/(loss) For the Years EndedDerivatives not designated ashedging instruments Location of gain/(loss) recognized December 31,2017 December 31,2016 December 31,2015FFAs Other income/(expense) $(284,097) $(541,677) $—Bunker swaps Other income/(expense) 413,577 — —Commissions Other income/(expense) (91,575) (19,818) —Total $37,905 $(561,495) $— F- 25Derivatives not designated as hedginginstrumentsBalance Sheet LocationFair value of derivatives December 31, 2017 December 31, 2016 FFAs - Unrealized lossFair value of Derivatives$(73,170) $—Bunker Swaps - Unrealized gainOther current assets128,845 — $55,675 $—Cash Collateral Disclosures The Company does not offset fair value amounts recognized for derivatives by the right to reclaim cash collateral or the obligation to return cashcollateral. The amount of collateral to be posted is defined in the terms of respective master agreement executed with counterparties or exchanges and isrequired when agreed upon threshold limits are exceeded. As of December 31, 2017 and December 31, 2016, the Company posted cash collateral related toderivative instruments under its collateral security arrangements of $178,836 and zero, respectively, which is recorded within other current assets in theconsolidated balance sheets.Fair Value Measurements The following methods and assumptions were used to estimate the fair value of each class of financial instrument: Cash, cash equivalents and restricted cash—the carrying amounts reported in the consolidated balance sheets for interest-bearing deposits approximate theirfair value due to their short-term nature thereof. Debt—the carrying amounts of borrowings under the Norwegian Bond Debt, New First Lien Facility and Ultraco Debt Facility (prior to application of thediscount and debt issuance costs) including the revolving credit agreement approximate their fair value, due to the variable interest rate nature thereof. The Company defines fair value, establishes a framework for measuring fair value and provides disclosures about fair value measurements. The fair valuehierarchy for disclosure of fair value measurements is as follows: Level 1 – Quoted prices in active markets for identical assets or liabilities. Our Level 1 non-derivatives include cash, money-market accounts, certain short-term investments and restricted cash accounts. Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Our Level 2 non-derivatives include our short-terminvestments and debt balances under the Norwegian Bond Debt, New First Lien Facility and Ultraco Debt Facility.Non recurring fair value measurements include vessel impairment assessments which is determined based on the average of two independent third partyquotes which are Level 2 inputs. As of December 31, 2017, the Company performed an impairment test on 22 vessels for whom the vessel prices based onvaluations received from third party brokers were lower than their carrying values. Based on our impairment analysis, we determined that as of December 31,2017, the future cash flows expected to be earned by the 22 vessels on an undiscounted basis would exceed their carrying value and therefore no impairmentcharges were recorded in the consolidated financial statements. As of December 31, 2016, the Company determined that it intended to divest some of theolder and less efficient vessels. As a result, the Company recorded an impairment charge of $122,860,600 in the fourth quarter of 2016. The carrying value ofthese vessels prior to impairment was $234,860,600. Additionally, the Company recorded an impairment charge of $6.2 million in the first quarter of 2016 ona group of six vessels which have all been sold subsequently. Level 3 – Inputs that are unobservable (for example cash flow modeling inputs based on assumptions).Assets and liabilities measured at fair value: F- 26 Fair Value Carrying Value Level 1 Level 2December 31, 2017 Assets Cash and cash equivalents (1)$56,325,961 $56,325,961 —Short-term investment$4,500,000 — $4,500,000Liabilities Norwegian Bond Debt *$189,950,329 — $200,990,000New First Lien Facility **$63,758,185 — $65,000,000Ultraco Debt Facility **$59,975,162 — $61,200,000* The fair value of the bonds is based on the last trade on December 21, 2017 on Bloomberg.com.** The fair value of the New First Lien Facility and the Ultraco Debt Facility is based on the required repayment to the lenders if the debtwas discharged in full on December 31, 2017. Fair Value Carrying Value Level 1 Level 2December 31, 2016 Assets Cash and cash equivalents (1)$76,591,027 76,591,027 —Liabilities First Lien Facility$204,352,318 — $209,099,000Second Lien Facility$51,591,226 — $67,327,843(1) Includes non-current restricted cash of 74,917 at December 31, 2017 and December 31, 2016. Note 10. Commitments and Contingencies Operating Lease On October 15, 2015, the Company entered into a new commercial lease agreement as a subtenant for office space in Stamford, Connecticut. Thelease is effective from January 1, 2016 through June 29, 2023, with an average annual rent of $419,536. The lease is secured by a letter of credit backed bycash collateral of $74,917 which amount is recorded as restricted cash in the accompanying consolidated balance sheets. Rent expense for all of our globallocations recorded for the years ended December 31, 2017, 2016, and 2015 was $666,320, $840,303 and $2,591,489, respectively. The rent expense for 2015includes lease termination fees of $1,334,301 on its prior office space in New York, New York. In November 2017, the Company entered into a lease officeagreement in Singapore which expires in October 2018. The future minimum commitments under the leases for office space as of December 31, 2017 are as follows: (In thousands of U.S. dollars) 2018$5762019420202042020214202022420Thereafter209Total$2,465F- 27Legal Proceedings The Company is involved in legal proceedings and may become involved in other legal matters arising in the ordinary course of its business. TheCompany evaluates these legal matters on a case-by-case basis to make a determination as to the impact, if any, on its business, liquidity, results ofoperations, financial condition or cash flows. In November 2015, the Company filed a voluntary self-disclosure report regarding certain apparent violations of U.S. sanctions regulations in theprovision of shipping services for third party charterers with respect to the transportation of cargo to or from Myanmar. At the time of such apparentviolations, the Company had a different senior operational management team. There can be no assurance that Office of Foreign Assets Control (“OFAC”) willnot conclude that these past actions warrant the imposition of civil penalties and/or referral for further investigation by the U.S. Department of Justice. Thereport was provided to OFAC for the agency’s review, consideration and determination regarding what action, if any, may be taken in resolution of thismatter. The Company will continue to cooperate with the agency regarding this matter and cannot estimate when such review will be concluded. While theultimate impact of these matters cannot be determined, there can be no assurance that the impact will not be material to the Company’s financial condition orresults of operations. Other CommitmentsOn July 28, 2011, the Company entered into an agreement to charter in a 37,000 dwt newbuilding Japanese vessel that was delivered in October2014 for seven years with an option for an additional one year. The hire rate for the first to seventh year is $13,500 per day and $13,750 per day for the eighthyear option. On May 10, 2017, the Company signed an agreement to cancel this existing time charter contract. The Company agreed to pay a lump sumtermination fee of $1.5 million relating to the cancellation. At the same time, the Company entered into an agreement with the same lessor, effective April 28,2017 to charter in a 61,400 dwt, 2013 built Japanese vessel for approximately four years (having the same redelivery dates as the aforementioned cancelledcharter) with options for two additional years. The hire rate for the first four years is $12,800 per day and the hire rate for the first optional year is $13,800 perday and $14,300 per day for the second optional year.On December 19, 2017, the Company signed a memorandum of agreement to purchase a 2015 built Ultramax vessel for $21.275 million. As ofDecember 31, 2017, the Company paid a deposit of $2.2 million. The Company took delivery of the vessel in the first quarter of 2018. On December 29,2017, Ultraco, a wholly-owned subsidiary of the Company entered into a First Amendment (the “First Amendment”) to the Ultraco Debt Facility to increasethe commitments for the purpose of financing the acquisition of the vessel. The increase in the commitments was $8,600,000. Ultraco took delivery of thevessel in January 2018 and drew down $8.6 million. Note 11. Transactions with related party On October 15, 2014, the Company entered into a Management Agreement (the “Management Agreement”) with Delphin Shipping LLC(“Delphin”). As per the Management Agreement, the technical management fee was $700 per vessel per day. The commercial management fee was 1.25% ofcharter hire; provided, however, that no commercial management fee shall be payable with respect to a charter hire that is earned while a vessel is a member ofa pool and with respect to which a fee is paid to the pool manager. The former Chief Executive Officer of the Company was one of the investors in Delphin.On May 22, 2015, the Company received a termination notice to the Amended Management Agreement from Delphin. The notice of termination wasgiven pursuant to the terms of the Amended Management Agreement and became effective as of August 22, 2015. Total management fees for the year ended December 31, 2015 amounted to $2,379,787. The total reimbursable expenses amounted to $227,105. Note 12. Loss per Common Share The computation of basic net loss per share is based on the weighted average number of common shares outstanding for the years endedDecember 31, 2017, 2016 and 2015. The Company also had 3,040,540 outstanding warrants convertible to 152,027 shares of the Company's common stockwith an exercise price of $556.40 per share. The warrants have a 7 year term and willF- 28expire on October 15, 2021. Diluted net loss per share gives effect to stock awards, stock options and restricted stock units using the treasury stock method,unless the impact is anti-dilutive. Diluted net loss per share for the year ended December 31, 2017 does not include 1,716,928 unvested stock awards,2,301,046 stock options and outstanding warrants convertible to 152,027 shares of common stock as their effect was anti-dilutive. Diluted net loss per sharefor the year ended December 31, 2016 does not include 1,413,461 unvested stock awards, 1,942,909 stock options and outstanding warrants convertible into152,027 shares of common stock as their effect was anti-dilutive. Diluted net loss per share for the year ended December 31, 2015 does not include 39,231stock awards, 68,867 stock options and outstanding warrants convertible into 152,027 shares of common stock, as their effect was anti-dilutive. For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Net loss $(43,796,685) $(223,522,435) $(148,296,965)Weighted Average Shares-Basic 69,182,302 20,565,652 1,880,116Dilutive effect of stock options, warrants and restricted stock units — — —Weighted Average Shares - Diluted 69,182,302 20,565,652 1,880,116Basic loss per share $(0.63) $(10.87) $(78.88)Diluted loss per share $(0.63) $(10.87) $(78.88) Note 13. Stock Incentive Plans2014 Management Incentive Plan On October 15, 2014, in accordance with the Plan, the Company adopted the post-emergence Management Incentive Program (the “2014 Plan”),which provided for the distribution of New Eagle MIP Primary Equity in the form of shares of New Eagle Common Stock, and New Eagle MIP Options, to theparticipating senior management and other employees of the reorganized Company with 2% of the New Eagle Common Stock (on a fully diluted basis) onthe Effective Date, and two tiers of options to acquire 5.5% of the New Eagle Common Stock (on a fully diluted basis) with different strike prices based on theequity value for the reorganized Company and a premium to the equity value, each of the foregoing to vest generally over a four year schedule through 25%annual installments commencing on the first anniversary of the Effective Date. The New Eagle MIP Primary Equity is subject to vesting, but the holderthereof is entitled to receive all dividends paid with respect to such shares as if such New Eagle MIP Primary Equity had vested on the grant date (subject toforfeiture by the holder in the event that such grant is terminated prior to vesting unless the administrator of the 2014 Plan determines otherwise). The NewEagle MIP Options contain adjustment provisions to reflect any transaction involving shares of New Eagle Common Stock, including as a result of anydividend, recapitalization, or stock split, to prevent any diminution or enlargement of the holder’s rights under the award.F- 29The following schedule shows the stock awards granted under the 2014 Plan: Restrictedshares 1 Price ongrant date Aggregatefair value(in millions) Vesting TermsBalance outstanding as of January 1, 2015 45,045 $308.58 $13.9 25% annually over four year termGranted on June 12, 2015 2,750 $179.60 $0.5 25% annually over four year termGranted on June 12, 2015 16,250 $117.40 $1.9 100% on third anniversary dateGranted on November 13, 2015 5,000 $78.40 $0.4 100% on third anniversary dateVested during 2015 (2,433) Forfeited during 2015 (35,457) $(11.2) Balance outstanding as of December 31,2015 31,155 $174.48 $5.5 Granted on November 7, 2016 2 131,197 $4.24 $0.6 100% on first anniversary dateGranted on December 15, 2016 2 50,000 $5.90 $0.3 100% on third anniversary dateIssued on June 12, 2016 (688) Cancelled on December 15, 2016 3 (21,250) $(1.4) Forfeited during 2016 (4,741) $(1.4) Balance outstanding as of December 31,2016 185,673 $19.58 $3.6 Vested during 2017 (133,452) Forfeitures during 2017 (81) Balance outstanding as of December 31,2017 52,140 $42.19 $2.2 1. Amortization of all restricted shares unless otherwise stated were calculated using the graded method vesting and included in General andadministrative expenses.2. Amortization of above stock awards were calculated using the cliff method of vesting and included in General and administrative expenses.3. The above stock awards were cancelled and concurrently new grants under the 2016 Plan (as defined herein) were issued. Therefore, thetransaction was accounted for as a modification as per ASC 718 “Compensation-Stock Compensation.” The incremental compensation cost was calculated asthe excess of the fair value of the replacement award over the fair value of the cancelled award at the cancellation date.F- 30 Options WeightedAverageExercisePrice Expiration Risk freeinterestrate Volatility Dividend % Fair ValueofOptions ongrant date Aggregatefair value (inmillions) Expected Term andvesting conditionsBalance outstanding asof January 1, 2015 123,874 $439.09 5 1.4% 44% —% $87.02 $10.78 4.75 years and 25%vesting annually overfour year termGranted on September29, 2015** 16,250 $117.40 5 1.09% 42% 0% $38.38 $0.63 3.75 years and 25%vesting annually overfour year termGranted on September29, 2015** 16,250 $260.00 5 1.09% 42% 0% $12.32 $0.20 3.75 years and 25%vesting annually overfour year termGranted on November15, 2015** 5,000 $78.40 5 1.37% 43% 0% $26.49 $0.10 3.75 years and 25%vesting annually overfour year termGranted on November15, 2015** 5,000 $260.00 5 1.37% 43% 0% $4.05 $0.02 3.75 years and 25%vesting annually overfour year termForfeited during 2015 (97,507) $(8.89) Vested during 2015 (6,591) $(0.47) Balance outstanding asof December 31, 2015 62,276 $2.37 3.75 years and 25%vesting annually overfour year termForfeited during 2016 (13,038) $(0.92) Cancelled onDecember 15, 2016** (42,500) $(0.67) Balance outstanding asof December 31, 2016 6,738 $0.78 Vested during 2017 (3,369) $(0.39) Forfeited during 2017 (454) $(0.05) Balance outstanding asof December 31, 2017 2,915 $116.64 $0.34 * For the purposes of determining the stock-based compensation cost for the Company's stock option plan using the fair value method of ASC 718"Compensation-Stock Compensation,” the fair value of the New Eagle MIP Options was estimated on the date of grant using the Black-Scholes optionpricing model. The volatility was calculated by comparing the Company’s share price movement since emergence from bankruptcy on October 14, 2014 andits peers’ share price movement for the past five years. Amortization of above stock options for the 2014 Plan was calculated using the graded method ofvesting and included in General and administrative expenses ** The above stock options were cancelled and concurrently new grants under the 2017 Plan was issued. Therefore, the transaction was accounted for as amodification as per ASC 718 “Compensation-Stock Compensation”. The incremental compensation cost was calculated as the excess of the fair value of thereplacement award over the fair value of the cancelled award at the cancellation date. There are 9,960 options vested but not exercised as of December 31, 2017 and 2,915 options that are not vested but are expected to vest. The fairvalue of vested options is insignificant. On November 7, 2016, the Company granted 233,863 shares of restricted common stock and options to purchase 280,000 shares of the Company’scommon stock in connection with the appointment of a new member to the senior management team. The restricted stock and option were not granted under,but are subject to, the terms of the Company’s 2014 Plan. The details of the grant are below:F- 31 Restrictedshares * Fair value on grant date Aggregate fair value (in millions) Vesting TermsGranted on November 7, 2016 233,863 $4.24 $1.0 100% vesting on third anniversary dateBalance outstanding as of December 31,2017 (Successor)* 233,863 $4.24 $1.0 * Amortization of the above stock awards was calculated using the cliff method of vesting and included in general and administrative expenses. Options** WeightedAverageExercisePrice ** Expiration Risk freeinterestrate Volatility Dividend % Fair Value of Options on grant date Aggregate fair value (in millions) Expected Term andvesting conditionsGranted onNovember 7, 2016 280,000 $4.28 5 1.10% 61% —% $1.91 $0.53 3.75 years and 25%vesting annually overfour year termVested during 2017 (70,000) $(0.13) Balance outstandingas of December 31,2017 210,000 $4.28 $1.91 $0.40 * For the purposes of determining the stock-based compensation cost for the Company's stock option plan using the fair value method of ASC 718"Compensation-Stock Compensation,” the fair value of the New Eagle MIP Options was estimated on the date of grant using the Black-Scholes optionpricing model. The volatility was calculated by comparing the Company’s share price movement since emergence from bankruptcy on October 14, 2014 andits peers’ share price movement for the past five years. The amortization of the above stock options was calculated using the graded method of vesting andincluded in general and administrative expenses. There are 70,000 options vested but not exercised as of December 31, 2017 and 210,000 options expected to vest. 2016 Equity Compensation Plan On December 15, 2016, the Company’s shareholders approved the 2016 Equity Compensation Plan (the “2016 Plan”) and the Company registered5,348,613 shares of common stock which may be issued under the 2016 Plan. The 2016 Plan replaced the 2014 Plan and no other awards will be grantedunder the 2014 Plan. Outstanding awards under the 2014 Plan will continue to be governed by the terms of the 2014 Plan until exercised, expired, otherwiseterminated, or canceled. As of December 31, 2017, 24,644 shares of common stock were subject to outstanding awards under the 2014 Plan. Under the termsof the 2016 Plan, awards for up to a maximum of 3,000,000 shares may be granted under the 2016 Plan to any one employee of the Company and itssubsidiaries during any one calendar year, and awards in the form of options and stock appreciation rights for up to a maximum of 3,000,000 shares may begranted under the 2016 Plan. The total number of shares of common stock with respect to which awards may be granted under the 2016 Plan to any non-employee director during any one calendar year shall not exceed 500,000, subject to adjustment as provided in the 2016 Plan. Any Director, officer,employee or consultant of the Company or any of its subsidiaries (including any prospective officer or employee) is eligible to be designated to participate inthe 2016 Plan.The following schedule represents outstanding stock awards and options granted under the 2016 Plan.F- 32 Restricted shares * Weighted AverageFair value ongrant date Aggregate fair value(in millions) Vesting TermsGranted on December 15, 2016 760,056 $5.90 $4.40 100% on September 1, 2018Granted on December 15, 2016 233,869 5.90 1.38 100% on October 14, 2018Balance outstanding as of December 31, 2016 993,925 5.78 Issued on March 1, 2017 429,750 5.47 2.35 33% vesting annually over threeyear termIssued on June 1, 2017 18,000 4.64 0.08 100% vesting on third anniversarydateForfeited during 2017 (10,750) Balance outstanding as of December 31, 2017 1,430,925 5.73 $8.20 *The above stock awards were issued concurrently with the cancellation of outstanding stock awards and options under the 2014 Plan. Therefore, theissuance was accounted for as a modification as per ASC 718 “Compensation-Stock Compensation.” The fair value is the incremental compensation cost,which was calculated as the excess of the fair value of the replacement award over the fair value of the cancelled award at the cancellation date. Theamortization of the above stock awards was calculated using the graded method of vesting and included in general and administrative expenses. Options* WeightedAverageExercisePrice Expiration Risk freeinterestrate Volatility Dividend % FairValue ofOptionson grantdate Aggregatefair value(in millions) Expected Termand VestingconditionsGranted on December15, 2016 ** 1,266,476 $4.28 5 1.79% 62% —% $3.12 $3.96 3.15 years and25% vestingannuallyGranted on December15, 2016 ** 389,695 $4.28 5 1.79% 62% —% $3.14 $1.21 3.15 years and25% vestingannuallyBalance outstandingas of December 31,2016 1,656,171 $4.28 $5.17 Issued on March 1,2017 337,000 $5.56 5 1.72% 63.5% —% $2.60 $0.90 3.75 years and25% vestingannually over fouryear termIssued on June 1,2017 18,000 $4.71 5 1.56% 64.7% —% $2.23 $0.04 3.75 years and25% vestingannually over fouryear termVested during 2017 (828,085) $4.28 $3.12 $(2.60) Forfeitures during2017 (3,000) $5.56 $2.60 $(0.08) Balance outstandingas of December 31,2017 1,180,086 $4.65 $2.91 $3.43 *For the purposes of determining the stock-based compensation cost for the Company's stock option plan using the fair value method of ASC 718"Compensation-Stock Compensation,” the fair value of the New Eagle MIP Options was estimated on the date of grant using the Black-Scholes optionpricing model. The volatility was calculated by comparing the Company’s share price movement since emergence from bankruptcy on October 14, 2014 andits peers’ share price movement for the past five years.**The above stock options were issued concurrently with cancellation of outstanding stock awards and options under the 2014 Equity Incentive Plan.Therefore, the transaction was accounted for as a modification as per ASC 718 “Compensation-Stock Compensation.” The fair value is the incrementalcompensation cost, which was calculated as the excess of the fair value of the replacement award over the fair value of the cancelled award at the cancellationdate. The amortization of the above stock options was calculated using the graded method of vesting and included in general and administrative expenses. There are 828,085 options vested but not exercised as of December 31, 2017 and 1,180,086 options expected to vest.F- 33 The stock-based compensation expense for the above stock awards and options under the 2016 Plan and 2014 Plan included in General andadministrative expenses: For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Stock awards /stock option plans $8,738,615 $2,206,690 $3,969,989 Total stock-based compensation expense $8,738,615 $2,206,690 $3,969,989 The future compensation to be recognized for all the grants issued for the years ending December 31, 2018, 2019 and 2020 will be $6,194,924,$1,481,876 and $152,621, respectively.Note 14. Employee Benefit Plan In October 2010, the Company established a safe harbor 401(k) plan, which is available to full-time office employees who meet the plan’s eligibilityrequirements. The plan allows participants to contribute to the plan a percentage of pre-tax compensation, but not in excess of the maximum allowed underthe Internal Revenue Code. The Company is matching contributions amounting to 100% of the first 3% and 50% of the next 2% of each employee’ssalary. The matching contribution vests immediately. The total matching contribution incurred by the Company and included in general and administrativeexpenses for the years ended December 31, 2017, 2016 and 2015 was $240,888, $167,778 and $212,223, respectively. The Company has a discretionary profit sharing contribution program under which employees may receive profit sharing contributions based on theCompany’s annual operating performance. For the years ended December 31, 2017, 2016 and 2015, the Company did not make a profit sharingcontribution. Note 15. 2017 and 2016 Quarterly Results of Operations (Unaudited) We have presented the unaudited quarterly results of operations for the fiscal years ended December 31, 2017 and December 31, 2016. Consolidated Statement of Operations (Unaudited) 2017 Three MonthsendedMarch 31 Three MonthsendedJune 30 Three MonthsendedSeptember 30 Three Monthsended December31,Revenues $45,855,057 $53,631,224 $62,710,903 $74,587,441Total Operating expenses 50,361,713 53,938,837 64,624,733 67,999,398Operating (loss) income (4,506,656) (307,613) (1,913,830) 6,588,043Net loss * (11,068,448) (5,888,466) (10,255,346) (16,584,425) Basic Loss Per Share $(0.17) $(0.08) $(0.15) $(0.24)Diluted Loss Per Share $(0.17) $(0.08) $(0.15) $(0.24)* Net loss for the three months ended December 31, 2017 includes $15.0 million of loss on debt extinguishment.(Unaudited)F- 34 2016 Three MonthsendedMarch 31 Three MonthsendedJune 30 Three MonthsendedSeptember 30 Three Months endedDecember 31, Revenues $21,278,288 $25,590,434 $35,788,181 $41,835,941 Total Operating Expenses 57,742,766(a) 42,882,423 47,512,409 177,607,218(b)Operating Loss (36,464,478) (17,291,989) (11,724,228) (135,771,277) Net Loss (39,278,670) (22,495,573) (19,359,044) (142,389,148) Basic Loss Per Share $(20.77) $(9.98) $(0.65) $(2.96) Diluted Loss Per Share $(20.77) $(9.98) $(0.65) $(2.96) a.Includes impairment charge of $6,167,262.b.Includes impairment charge of $122,860,600. Note 16. Condensed Financial Information for Eagle Bulk Shipping Inc. (Parent Company Only)There are significant restrictions over the Company’s ability to obtain funds from its subsidiaries through dividends, loans or advances as contained in ourdebt facilities. For a discussion of some of these restrictions, see “Note 8 - Debt.” These condensed parent company financial statements have been preparedin accordance with Rule 12-04 of Regulation S-X, as the restricted net assets of the Company’s subsidiaries under each of the debt arrangements previouslynoted exceeds 25 percent of the consolidated net assets of the Company.Condensed Balance Sheets (Parent Company Only) F- 35 December 31, 2017 December 31, 2016ASSETS: Current assets: Cash and cash equivalents $17,583,085 $62,326,786Prepaid expenses 13,758 376,215Total current assets 17,596,843 62,703,001Noncurrent assets: Investment in subsidiaries* 444,908,264 338,340,211Other assets — 310,000Total noncurrent assets 444,908,264 338,650,211Total assets $462,505,107 $401,353,212LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $50,894 $189,039Other accrued liabilities 1,289,180 681,534Total current liabilities 1,340,074 870,573Noncurrent liabilities : Total liabilities 1,340,074 870,573Commitment and contingencies Stockholders' equity: Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued as of December 31, 2017 and 2016 — —Common stock, $.01 par value, 700,000,000 shares authorized, 70,394,307 and 48,106,827 shares issued andoutstanding as of December 31, 2017 and 2016, respectively 703,944 481,069Additional paid-in capital 887,625,902 783,369,698Accumulated deficit (427,164,813) (383,368,128)Total stockholders' equity 461,165,033 400,482,639Total liabilities and stockholders' equity $462,505,107 $401,353,212 * Eliminated in the consolidated financial statements.F- 36Condensed Statements of Operations (Parent Company Only) For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015General and administrative expenses $2,693,520 $2,101,094 $2,554,795Total operating expenses 2,693,520 2,101,094 2,554,795Operating loss (2,693,520) (2,101,094) (2,554,795) Interest expense — 2,817,646 11,927,422Interest income (379,374) (215,433) (6,222)Other expense — 125,255 —Total other expense (income), net (379,374) 2,727,468 11,921,200 Equity in net loss of subsidiaries* (41,482,539) (218,693,873) (133,820,970)Net loss $(43,796,685) $(223,522,435) $(148,296,965) Weighted average shares outstanding: Basic 69,182,302 20,565,652 1,880,116Diluted 69,182,302 20,565,652 1,880,116 Per share amounts: Basic net loss $(0.63) $(10.87) $(78.88)Diluted net loss $(0.63) $(10.87) $(78.88) *Eliminated in the consolidated financial statements.F- 37Condensed Statements of Cash Flows (Parent Company Only) For the Years Ended December 31, 2017 December 31, 2016 December 31, 2015Net cash used in operating activities $(2,245,856) (4,715,072) $(18,496,422)Cash flows from investing activities: Cash distributed to wholly-owned subsidiaries (138,238,309) (36,853,951) (4,762,134)Net cash used in investing activities (138,238,309) (36,853,951) (4,762,134) Cash flows from financing activities: Repayment of Term Loan — (3,906,250) (19,625,000)Proceeds from Revolver Loan facility under Exit Financing Facility — 40,000,000Proceeds from common stock placement, net of issuance costs 96,030,003 85,700,535 —Financing costs paid to lenders — — (500,000)Cash used to settle net share equity awards (289,539) (2,938) (1,419,229) Net cash provided by financing activities 95,740,464 81,791,347 18,455,771Net increase/(decrease) in cash and cash equivalents (44,743,701) 40,222,324 (4,802,785)Cash and cash equivalents at beginning of year 62,326,786 22,104,462 26,907,247Cash and cash equivalents at end of year $17,583,085 $62,326,786 $22,104,462 Supplemental cash flow information: Cash paid during the period for interest $— $2,529,674 $9,911,793 Notes to the Condensed Financial StatementsBasis of Presentation In the parent-company-only condensed financial statements, Eagle Bulk Shipping Inc. (the “Parent Company”) investment in subsidiaries isaccounted for under the equity method of accounting. The Parent Company did not receive cash dividends from its subsidiaries for the years endedDecember 31, 2017, 2016 and 2015.The parent-company-only condensed financial statements should be read in conjunction with the Company's consolidated financial statements.There are legal or regulatory restrictions on the Parent Company's ability to obtain funds from its subsidiaries through dividends, loans or advancessufficient to satisfy the obligations that may come due.Equity Offerings On December 13, 2016, the Parent Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with certain investors (the“Investors”), pursuant to which the Parent Company agreed to issue to the Investors in a private placement (the “December Private Placement”)approximately 22.2 million shares of the Parent Company’s common stock, par value $0.01 per share, at an initial purchase price of $4.50 per share, foraggregate gross proceeds of $100.0 million. On January 20, 2017, the Parent Company closed its previously announced December Private Placement foraggregate net proceeds of $96 million. The Parent Company used the proceeds from the December Private Placement for the acquisition of Greenship Vesselsby Ultraco. F- 38Non Cash Investing and Financing Activities The Parent Company issued equity instruments to the employees of the subsidiary companies increasing its investment in subsidiaries byapproximately $8.7 million. For the year ended December 31, 2016, there was approximately $2 million of equity issued by the Parent Company granted toemployees of the wholly-owned subsidiaries of the Parent Company, which increased the Parent Company’s investment in subsidiaries. Note 17. Subsequent EventsUltraco took delivery of an additional vessel acquired by New London Eagle LLC, a wholly owned subsidiary of Ultraco, in January 2018 and drewdown $8.6 million under the Ultraco Debt Facility.On January 4, 2018, the Company granted 948,500 restricted shares as a company wide grant under the 2016 Plan. The fair value of the grant basedon the closing share price on January 4, 2017 was $4.5 million. The shares will vest in equal installments over a three year term.F- 39Execution VersionFIRST AMENDMENT TO CREDIT AGREEMENTThis FIRST AMENDMENT to the Credit Agreement referred to below, dated as of December 29, 2017 (this “FirstAmendment”), by and among EAGLE BULK ULTRACO LLC, a Marshall Islands limited liability company as Borrower (the“Borrower”), the INITIAL GUARANTORS, NEW LONDON EAGLE LLC, a Marshall Islands limited liability company as anAdditional Guarantor, the Lenders party hereto, ABN AMRO Capital USA LLC, as Facility Agent (in such capacity, the “FacilityAgent”) and ABN AMRO Capital USA LLC as Security Trustee (in such capacity, the “Security Trustee”). Capitalized terms usedherein but not otherwise defined in this First Amendment have the same meanings as specified in the Credit Agreement referencedbelow, as amended by this First Amendment.RECITALSWHEREAS, the Borrower, the Guarantors from time to time party thereto, the Lenders from time to time party thereto, theSwap Banks from time to time party thereto, the Facility Agent, the Security Agent and the other parties thereto have entered into thatcertain Credit Agreement, dated as of June 28, 2017 (as amended, restated, amended and restated, supplemented or otherwisemodified prior to the date hereof, the “Credit Agreement”);WHEREAS, pursuant to Section 2.21 of the Credit Agreement, the Borrower hereby requests (and this First Amendmenthereby constitutes a written notice to the Facility Agent pursuant to such Section2.21 requesting) the Incremental Lenders to make available Incremental Commitments to finance the acquisition by the AdditionalGuarantor of the M/V ESSENCE OF SEATREK (tbr M/V NEW LONDON EAGLE) (the “Additional Vessel”), and to make Loans tothe Borrower on the First Amendment Effective Date (as defined below) in an aggregate principal amount equal to the lesser of (a)$8,600,000 and (b) 40% of the Fair Market Value of the Additional Vessel, and the Facility Agent, the Security Trustee, the Borrower,the Guarantors, the Lenders and each Incremental Lender have agreed, subject to the terms and conditions hereinafter set forth, toprovide for such Incremental Commitments, which will be added to, and constitute part of, the Commitments and the TotalCommitments; andWHEREAS, the Borrower, the Guarantors, the Lenders, the Incremental Lenders, the Facility Agent and the Security Trusteehave agreed to amend the Credit Agreement as hereinafter set forth to provide for such Incremental Commitments;NOW, THEREFORE, in consideration of the covenants and agreements contained herein, as well as other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:SECTION 1. Amendments to Credit Agreement. The Credit Agreement is, effective as of the First Amendment Effective Date,and subject to the satisfaction of the conditions precedent set forth in Section 4 below, hereby amended as follows:(a) Definitions. Section 1.01 of the Credit Agreement is hereby amended by:(i)adding the following new definition thereto in the proper alphabetical order:“First Amendment” shall mean that certain First Amendment to Credit Agreement, dated as of December 29, 2017,among the Borrower, the Guarantors, the Facility Agent, the Security Trustee and the Lenders party thereto.80543854v6(ii)amending the following definition thereto:“Commitment Termination Date” means January 26, 2018 or such later date as may be agreed between theBorrower and the Facility Agent (except that, if such date is not a Business Day, the Commitment Termination Date shall bethe next preceding Business Day).(b) Section 5.33 of the Credit Agreement is hereby amended by adding the words “or Venezuela” after the word “Russia” inparagraphs (a)(iii), (c), (d)(i) and (e)(i) thereof.(c) Section 6.17 of the Credit Agreement is hereby amended by adding the words “or Venezuela” after the word “Russia” inparagraphs (b) and (c) thereof.(d) Schedule IV of the Credit Agreement is amended and restated in the form set out in Annex II attached hereto.SECTION 2. Incremental Commitments.(a)Each Incremental Lender on, and subject to the occurrence of, the First Amendment Effective Date hereby severallyagrees to make Loans to the Borrower in a single Borrowing in an aggregate principal amount not to exceed such IncrementalLender’s Incremental Commitments as set forth opposite its name on Annex I attached hereto.(b)The Incremental Lenders, the Lenders, the Facility Agent, the Security Trustee, the Borrower and the Guarantorsagree that this First Amendment effects the provisions of Section 2.21 of the Credit Agreement with respect to such IncrementalCommitments and shall constitute a Joinder Agreement pursuant to and in accordance with Section 2.21 of the Credit Agreement.(c)Upon the incurrence of a Loan pursuant to this First Amendment, such Loan shall be subject to the interest rates(including the Margin) and terms, repayment, voluntary prepayment terms and mandatory prepayment terms applicable to the Loansas set forth in the Credit Agreement.(d)On (and subject to the occurrence of) the First Amendment Effective Date, each Incremental Lender party hereto tothe extent provided in this First Amendment and the Credit Agreement, shall have the rights and obligations of a Lender thereunderand under the other applicable Loan Documents.(e)The Borrower and each Guarantor acknowledges and agrees that (i) the Borrower shall be liable for all Obligationswith respect to all Loans made to the Borrower pursuant to this First Amendment and (ii) all such Obligations (including all suchLoans pursuant to this First Amendment) shall constitute Guaranteed Obligations and shall be entitled to the benefits of the SecurityDocuments and the Guarantees.(f)The Incremental Commitment of each Incremental Lender shall automatically terminate upon the making of theLoans pursuant to this First Amendment on the First Amendment Effective Date.(g)The proceeds of the Loans pursuant to this First Amendment shall be used by the Borrower solely for the purposesset forth in the second recital of this First Amendment and any amounts repaid, prepaid or cancelled may not be reborrowed.SECTION 3. Representations and Warranties. In order to induce the Incremental Lenders party hereto to enter into this FirstAmendment, to make the Loans pursuant hereto and to amend the Credit Agreement in the manner provided herein, each SecurityParty hereby represents and warrants that:(a)the representations and warranties set forth in Article III of the Credit Agreement and in each other Loan Documentshall be true and correct in all material respects (or true and correct in all respects in the case of representations and warrantiesqualified by materiality or Material Adverse Effect)f on and as of the First Amendment Effective Date with the same effect as thoughmade on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date (in which casesuch representations and warranties shall be true and correct in all material respects (or true and correct in all respects in the case ofrepresentations and warranties qualified by materiality or Material Adverse Effect) on and as of such earlier date).(b)both before and after giving effect to this First Amendment, no Default or Event of Default shall have occurred andbe continuing; and(c)this First Amendment has been duly authorized, executed and delivered by each Security Party party hereto andeach of this First Amendment and the Credit Agreement, as amended hereby, constitutes a legal, valid and binding obligation,enforceable against each Security Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization,moratorium or other similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whetherconsidered in a proceeding in equity or at law.SECTION 4. Conditions of Effectiveness. The effectiveness of this First Amendment (including the amendments contained inSection 1 hereof and agreements contained in Section 2 hereof) are subject to the satisfaction of the following conditions (the date ofsatisfaction of such conditions being referred to herein as the “First Amendment Effective Date”):(a)this First Amendment shall have been duly executed by the Borrower, each Guarantor, the Lenders, the IncrementalLenders, the Facility Agent and the Security Trustee (which may include a copy transmitted by facsimile or PDF or other electronicmethod), and delivered to the Facility Agent;(b)the Facility Agent shall have received a Borrowing Request in respect of the Loans under this First Amendment byno later than the applicable time required pursuant to Section 2.3 of the Credit Agreement (or such shorter period as may be agreed bythe Facility Agent);(c)the Facility Agent shall have received (i) a certificate of an officer or an officer of the sole member, as the case maybe, of each Security Party dated the First Amendment Effective Date, certifying(A) either (i) that attached thereto is a true and complete copy of each Organizational Document of such Security Party, or (ii) that thecopies of such Security Party’s Organizational Documents as previously certified and delivered to the Facility Agent on the ClosingDate (or, if later, the date of joinder of such Security Party as a Guarantor under the Loan Documents) remain in full force and effecton the First Amendment Effective Date, without modification or amendment since such prior date of certification and delivery, (B) thatattached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors or sole member of such SecurityParty authorizing the execution, delivery and performance of this First Amendment and the other Loan Documents (including, ifapplicable, as amended by this First Amendment) to which such Security Party is a party and, in the case of the Borrower, theborrowing of the Loans hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force andeffect and (C) as to the incumbency and specimen signature of each officer executing this First Amendment and any Loan Documentor any other document delivered in connection herewith or therewithon behalf of such Security Party, (ii) a certificate as to the goodstanding of each Security Party as of a date reasonably near to the FirstAmendment Effective Date certifying that each Security Party is duly formed and in goodstanding under the laws of its jurisdiction ofincorporation and (iii) an original or certified copy power of attorney under which any Loan Document is executed on behalf of aSecurity Party;(d)the Facility Agent shall have received, on behalf of itself and the other Finance Parties, a favorable written opinionof (i) Watson Farley & Williams LLP, counsel for the Facility Agent and the other Finance Parties and (ii) Reed Smith LLP, counsel forthe Security Parties, in each case (A) dated the First Amendment Effective Date (or such other date agreed by the Facility Agent), (B)addressed to the Facility Agent and the other Finance Parties and (C) covering customary matters for incremental loan facilities relatingto this First Amendment and the other Loan Documents delivered in connection with this First Amendment as the Facility Agent shallreasonably request;(e)at least one Business Day (solely for purposes of this Section 4, to be defined as any day other than a Saturday, aSunday or a day on which the Federal Reserve Bank of New York is closed) prior to the First Amendment Effective Date, eachSecurity Party shall have provided to the Facility Agent the documentation and other information required by bank regulatoryauthorities under or in respect of applicable “know-your-customer” requirements, including the PATRIOT Act;(f)on or prior to the First Amendment Effective Date, the Borrower shall have paid to the Facility Agent for the accountof each Incremental Lender with Incremental Commitments a fee equal to 1.25% of the aggregate amount of such IncrementalLender’s Commitments in effect on the First Amendment Effective Date;(g)the Borrower shall have paid all other costs, fees, expenses and other amounts due and payable pursuant to the LoanDocuments and in connection with this First Amendment;(h)a copy of the memorandum of agreement (together with all amendments and addenda thereto) for the AdditionalVessel duly executed by the Additional Guarantor who will be the owner thereof, and the relevant seller, together with evidence ofany address or similar commission arrangements, all of which shall be of terms acceptable to the Facility Agent (certified by an officerof the Borrower or such Additional Guarantor to be a true, correct and complete copy thereof);(i)two valuations dated respectively October 23, 2017 and October 25, 2017 (at the expense of the Borrower) by anApproved Broker indicating the Fair Market Value of each of the Delivered Vessels and the Remaining Vessels, and serving as anindicator (on the basis of the Fair Market Value of a Remaining Vessel) to determine the Fair Market Value of the Additional Vessel tobe financed by the Incremental Commitments provided herein, as agreed between the Borrower and the Facility Agent;(j)a duly executed original of (i) an amendment to the Membership Interest Pledge and (ii) an Account Pledge withrespect to the Additional Guarantor who will be the owner of the Additional Vessel, and of any documents required to be deliveredthereunder;(k)upon the request of any Incremental Lender made through the Facility Agent, a promissory note executed anddelivered to the order of such Incremental Lender in the form of Exhibit L attached to the Credit Agreement, or any other formapproved by the Facility Agent;(l)the conditions precedent set forth in Section 4.03 and Section 4.04 of the Credit Agreement in relation to theAdditional Vessel and the Additional Guarantor who will be the owner thereof shall have been satisfied (or waived in writing by theFacility Agent with the consent of the Incremental Lenders);(m)the Facility Agent shall have received in form approved by the Facility Agent an amendment to each VesselMortgage duly executed by the owner of the relevant Vessel reflecting this First Amendment, and evidence that such amendment hasbeen duly recorded in accordance with the Laws of the Approved Flag;(n)evidence that the Additional Guarantor who will be the owner of the Additional Vessel has duly opened anOperating Account and has delivered to the Facility Agent all resolutions, signature cards and other documents or evidence required inconnection with the opening, maintenance and operation of such accounts with the Account Bank;(o)evidence that, if the tests set out in Article VII or Section 5.04 of the Credit Agreement were applied immediatelyfollowing the making of the relevant Borrowing, the Borrower would not be obliged to provide additional security or repay part of theBorrowings as therein provided (determined on the basis of the most recent valuation for each Vessel delivered pursuant to Section5.03 of the Credit Agreement); and(p)(i) all representations and warranties set forth in Section 3 of this First Amendment shall be true and correct in allmaterial respects (or true and correct in all respects in the case of representations and warranties qualified by materiality or MaterialAdverse Effect) on and as of the First Amendment Effective Date with the same effect as though made on and as of such date, exceptto the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warrantiesshall be true and correct in all material respects (or true and correct in all respects in the case of representations and warrantiesqualified by materiality or Material Adverse Effect) on and as of such earlier date) and (ii) no Default shall have occurred and becontinuing or would occur after giving effect to the incurrence of the Loans pursuant to this First Amendment and the application ofthe proceeds therefrom.SECTION 5. Effects on Loan Documents.(a)Except as specifically amended herein or contemplated hereby, all Loan Documents shall continue to be in full forceand effect and are hereby in all respects ratified and confirmed.(b)The execution, delivery and effectiveness of this First Amendment shall not operate as a waiver of any right, poweror remedy of any Lender or the Facility Agent or the Security Trustee under any of the Loan Documents, nor constitute a waiver ofany provision of the Loan Documents or in any way limit, impair or otherwise affect the rights and remedies of the Lenders or theFacility Agent or the Security Trustee under the Loan Documents.(c)(i) Each Security Party acknowledges and agrees that, on and after the First Amendment Effective Date, this FirstAmendment shall constitute a Loan Document for all purposes of the Credit Agreement (as amended by this First Amendment) and (ii)each Security Party hereby (A) agrees that all Obligations shall be guaranteed pursuant to the Guarantees set forth in Article VIII of theCredit Agreement in accordance with the terms and provisions thereof and shall be secured pursuant to the Security Documents inaccordance with the terms and provisions thereof, and that, notwithstanding the effectiveness of this First Amendment, on and after theFirst Amendment Effective Date, the Guarantees and the Liens created pursuant to the Security Documents for the benefit of theSecured Parties continue to be in full force and effect on a continuous basis and (B) affirms, acknowledges and confirms all of itsobligations and liabilities under the Credit Agreement and each other Loan Document to which it is a party, in each case after givingeffect to this First Amendment, all as provided in such Loan Documents, and acknowledges and agrees that such obligations andliabilities continue in full force and effect on a continuous basis inrespect of, and to secure, the Obligations under the Credit Agreement and the other Loan Documents, in each case after giving effectto this First Amendment.(d)On and after the First Amendment Effective Date, (i) each reference in the Credit Agreement (as amended by thisFirst Amendment) to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import referring to the Credit Agreement, andeach reference in the other Loan Documents to “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to theCredit Agreement shall mean and be a reference to the Credit Agreement as amended by this First Amendment, and this FirstAmendment and the Credit Agreement as amended by this First Amendment shall be read together and construed as a singleinstrument, and (ii) the Incremental Commitments shall constitute part of the “Commitments” and “Total Commitments”.(e)Nothing herein shall be deemed to entitle the Borrower, nor the Guarantors to a further consent to, or a furtherwaiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained inthe Credit Agreement as amended by this First Amendment or any other Loan Document in similar or different circumstances.SECTION 6. Expense Reimbursement and Indemnification. The Borrower hereby confirms that the expense reimbursementand indemnification provisions set forth in Section 11.03 of the Credit Agreement as amended by this First Amendment shall apply tothis First Amendment and the transactions contemplated hereby.SECTION 7. Amendments; Severability.(a)This First Amendment, (i) prior to the First Amendment Effective Date, may not be amended except by aninstrument in writing signed by the Security Parties, the Facility Agent and the Lenders and (ii) after the First Amendment EffectiveDate, may not be amended nor may any provision hereof be waived except in accordance with the provisions of Section 11.02(b) ofthe Credit Agreement.(b)To the extent any provision of this First Amendment is prohibited by or invalid under the applicable law of anyjurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity and only in such jurisdiction,without prohibiting or invalidating such provision in any other jurisdiction or the remaining provisions of this First Amendment in anyjurisdiction.SECTION 8. Governing Law; Waiver of Jury Trial; Jurisdiction. THIS FIRST AMENDMENT AND ANY CLAIMS,CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) BASEDUPON, ARISING OUT OF OR RELATING TO THIS FIRST AMENDMENT AND THE TRANSACTIONS CONTEMPLATEDHEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWOF THE STATE OF NEW YORK (including Sections 5-1401 and 5-1402 of the General Obligations Law but otherwise excluding thelaws applicable to conflicts or choice of law). The provisions of Sections 11.09(b), 11.09(c), 11.09(d) and 11.10 of the CreditAgreement as amended by this First Amendment are incorporated herein by reference, mutatis mutandis.SECTION 9. Headings. Section headings in this First Amendment are included herein for convenience of reference only, arenot part of this First Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this FirstAmendment.SECTION 10. Counterparts. This First Amendment may be executed in counterparts (and by different parties hereto indifferent counterparts), each of which shall constitute an original, but all of whichwhen taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement byfacsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of thisAgreement.[Remainder of page intentionally left blank.]IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered by their respective properand duly authorized officers or attorneys-in-fact, as the case may be, as of the day and year first above written.BORROWER:INITIAL GUARANTORS:FAIRFIELD EAG LE LLC GREENW ICH EAGLE LLC GROTON EAGLE LLC MADISON EAGLE LLCMYSTIC EAGLE LLCROWAYTON EAGLE LLC SOUTHPORT EAGLE LLC STONINGTON EAGLE LLCWESTPORT EAGLE LLC ADDITIONAL GUARANTORNEW LONDON EAGLE LLC By: Name: /s/ Frank De CostanzoTitle: Attorney-in-FactABN AMRO CAPITAL USA LLC, as Facility Agent, Security Trustee and Lender By: /s/ Maria Chrysaila KarpidaTitle: Attorney-in-fact DVB BANK SE, AMSTERDAM BRANCH, as Lender SKANDINAVISKA ENSKILDA BANK.EN AB (PUBL),as LenderBy: /s/ Maria Chrysaila KarpidaTitle: Attorney-in-fact ANNEX I INCREMENTAL COMMITMENTSIncremental LendersIncremental CommitmentsABN AMRO CAPITAL USA LLC$2,866,666.67DVB BANK SE, AMSTERDAM BRANCH$2,866,666.67SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)$2,866,666.66ANNEX IIVesselsPART ADelivered VesselsVesselIMO NumberBuild YearMaximum Vessel BorrowingAmountQuarterly InstallmentAmount M/V Mystic Eagle95752042013$6,800,000$185,611.73M/V Southport Eagle95752282013$6,800,000$180,640.47M/V Stonington Eagle95751512012$6,000,000$178,338.76M/V Greenwich Eagle95752662013$6,800,000$174,444.76M/V Fairfield Eagle95752302013$6,800,000$179,076.48M/V Groton Eagle95752422013$6,800,000$177,488.56PART BVesselIMO NumberBuild YearMaximum Vessel BorrowingAmountQuarterly InstallmentAmountM/V Westport Eagle97059882015$7,600,000$171,446.23M/V Madison Eagle95752782013$6,800,000$172,937.57M/V Rowayton Eagle95752162013$6,800,000$182,285.55PART CVesselIMO NumberBuild YearMaximum Vessel BorrowingAmountQuarterly InstallmentAmountM/V New London Eagle97549912015$8,600,000$185,301.06EXHIBIT 21.1 The following is a list of the subsidiaries of Eagle Bulk Shipping Inc. as of March 8, 2018. Name of Significant SubsidiaryJurisdiction of IncorporationEagle Shipping LLCMarshall IslandsEagle Bulk Management LLCMarshall IslandsEagle Shipping International (USA) LLCMarshall IslandsEagle Ship Management LLCDelawareEagle Management Consultants LLCDelawareEagle Bulk Pte. Ltd.SingaporeEagle Bulk Holdco LLCMarshall IslandsEagle Bulk Shipco LLCMarshall IslandsEagle Bulk Ultraco LLCMarshall IslandsEagle Bulk (Delaware) LLCDelawareEagle Bulk Europe GmbHGermanyAvocet Shipping LLCMarshall IslandsBittern Shipping LLCMarshall IslandsCanary Shipping LLCMarshall IslandsCardinal Shipping LLCMarshall IslandsCondor Shipping LLCMarshall IslandsCrane Shipping LLCMarshall IslandsCrested Eagle Shipping LLCMarshall IslandsCrowned Eagle Shipping LLCMarshall IslandsEgret Shipping LLCMarshall IslandsFairfield Eagle LLCMarshall IslandsGannet Shipping LLCMarshall IslandsGreenwich Eagle LLCMarshall IslandsGolden Eagle Shipping LLCMarshall IslandsGoldeneye Shipping LLCMarshall IslandsGrebe Shipping LLCMarshall IslandsGroton Eagle LLCMarshall IslandsHawk Shipping LLCMarshall IslandsIbis Shipping LLCMarshall IslandsImperial Eagle Shipping LLCMarshall IslandsJaeger Shipping LLCMarshall IslandsJay Shipping LLCMarshall IslandsKestrel Shipping LLCMarshall IslandsKingfisher Shipping LLCMarshall IslandsMadison Eagle LLCMarshall IslandsKittiwake Shipping LLCMarshall IslandsMartin Shipping LLCMarshall IslandsMerlin Shipping LLCMarshall IslandsMystic Eagle LLCMarshall IslandsNew London Eagle LLCMarshall IslandsNighthawk Shipping LLCMarshall IslandsOriole Shipping LLCMarshall IslandsOsprey Shipping LLCMarshall IslandsOwl Shipping LLCMarshall IslandsEXHIBIT 21.1 Peregrine Shipping LLCMarshall IslandsPetrel Shipping LLCMarshall IslandsPuffin Shipping LLCMarshall IslandsRedwing Shipping LLCMarshall IslandsRoadrunner Shipping LLCMarshall IslandsRowayton Eagle LLCMarshall IslandsSandpiper Shipping LLCMarshall IslandsSingapore Eagle LLCMarshall IslandsShrike Shipping LLCMarshall IslandsSkua Shipping LLCMarshall IslandsSouthport Eagle LLCMarshall IslandsSparrow Shipping LLCMarshall IslandsStamford Eagle LLCMarshall IslandsStellar Eagle Shipping LLCMarshall IslandsStonington Eagle LLCMarshall IslandsTern Shipping LLCMarshall IslandsThrasher Shipping LLCMarshall IslandsThrush Shipping LLCMarshall IslandsWoodstar Shipping LLCMarshall IslandsWren Shipping LLCMarshall IslandsWestport Eagle LLCMarshall IslandsExhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statement No. 333-217180 on Form S-3 and Registration Statement No. 333-215118 on Form S-8 of our report dated March 12, 2018, relating to the consolidated financial statements of Eagle Bulk Shipping Inc. and subsidiaries and the effectiveness ofEagle Bulk Shipping Inc.'s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Eagle Bulk Shipping Inc. for the yearended December 31, 2017./s/ DELOITTE & TOUCHE LLPNew York, New YorkMarch 12, 2018Exhibit 23.2 Consent of Counsel Reference is made to the annual report on Form 10-K of Eagle Bulk Shipping Inc. (the “Company”) for the year ended December 31, 2017 (the“Annual Report”) and the registration statements on Form S-8 (Registration No. 333-215118) and Form S-3 (Registration No. 333-217180) of the Company,including the prospectuses contained therein (the “Registration Statements”). We hereby consent to (i) the filing of this letter as an exhibit to the AnnualReport, which is incorporated by reference into the Registration Statements and (ii) each reference to us and the discussions of advice provided by us in theAnnual Report under the section “Item 1. Business-Tax Considerations” and to the incorporation by reference of the same in the Registration Statements, ineach case, without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the U.S. Securitiesand Exchange Commission promulgated thereunder with respect to any part of the Registration Statements. /s/ Seward & Kissel LLP New York, New YorkMarch 12, 2018Exhibit 31.1 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER I, Gary Vogel, certify that: 1. I have reviewed this annual report on Form 10-K of Eagle Bulk Shipping Inc.; 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 thestatements 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 thefinancial 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 ExchangeAct 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 registrantand have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes 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 theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourthfiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company'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 theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting. Date: March 12, 2018 /s/ Gary VogelGary VogelChief Executive Officer(Principal executive officer of the registrant)Exhibit 31.2 CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER I, Frank De Costanzo, certify that: 1. I have reviewed this annual report on Form 10-K of Eagle Bulk Shipping Inc.; 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 thestatements 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 thefinancial 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 ExchangeAct 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 registrantand have: a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes 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 theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourthfiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company'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 theregistrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internalcontrol over financial reporting. Date: March 12, 2018 /s/ Frank De Costanzo Frank De CostanzoChief Financial Officer (Principal financial officer of the registrant)Exhibit 32.1 PRINCIPAL EXECUTIVE OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350 In connection with the annual report of Eagle Bulk Shipping Inc. (the "Company") on Form 10-K for the year ending December 31, 2017, as filed with theSecurities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Gary Vogel, Principal Executive Officer of the Company,certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (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.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staffupon request. Date: March 12, 2018 /s/ Gary Vogel Gary VogelChief Executive Officer(Principal executive officer of the registrant)Exhibit 32.2 PRINCIPAL FINANCIAL OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350 In connection with the annual report of Eagle Bulk Shipping Inc. (the "Company") on Form 10-K for the year ending December 31, 2017, as filed with theSecurities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Frank De Costanzo, Principal Financial Officer of theCompany, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (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.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staffupon request. Date: March 12, 2018 /s/ Frank De CostanzoFrank De CostanzoChief Financial Officer (Principal financial officer of the registrant)

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