UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2020

Commission File Number:  001-34153

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [X]       Form 40-F [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [  ].

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [  ].

INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K

Attached as Exhibit 99.1 to this Report on Form 6-K (this “Report”) is Management’s Discussion and Analysis of Financial Condition and Results of Operations and the unaudited interim consolidated financial statements, and the accompanying notes thereto, for the six months ended June 30, 2020, of the Global Ship Lease, Inc. (the “Company”).

The information contained in Exhibit 99.1 to this Report is hereby incorporated by reference into the Company's registration statements on Form F-3 (File Nos. 333-231509, 333-234343 and 333-235305).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Exhibit 99.1

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management’s discussion and analysis of financial condition and results of operations of Global Ship Lease, Inc. for the six month periods ended June 30, 2020 and 2019.  The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto, included in this report, the discussion and analysis included in our Annual Report on Form 20-F for the year ended December 31, 2019, filed with the U.S. Securities and Exchange Commission, or the SEC, on April 2, 2020 (the “Annual Report”), and other financial information appearing elsewhere in this report.  We prepare our financial statements in accordance with generally accepted accounting principles in the United States, or U.S. GAAP. The following discussion and analysis contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance.  Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, such as those set forth in the section entitled “Risk Factors” included in our Annual Report.

Cautionary Statement Regarding Forward-Looking Statements

This report contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this report include, but are not limited to, statements regarding our disclosure concerning our operations, cash flows, financial position, dividend policy, the anticipated benefits of our strategic transaction with Poseidon Containers, and the likelihood of success in acquiring additional ships to expand our business.

Forward-looking statements appear in a number of places in this report and in our Annual Report, as updated by annual, quarterly and other reports and documents we file with the SEC after the date of this prospectus and that are incorporated by reference herein.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Our actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in “Risk Factors” in this report. The risks described under “Risk Factors” are not exhaustive. Other sections of this report describe additional factors that could adversely affect our results of operations, financial condition, liquidity and the development of the industries in which we operate. New risks can emerge from time to time, and it is not possible for us to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any risks, or combination of risks and other factors, may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, you should not unduly rely on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement to reflect circumstances or events after the date of this report or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this report.

Overview

We are a containership owner, incorporated in the Republic of the Marshall Islands. We commenced operations in December 2007 with a business of owning and chartering out containerships under fixed rate charters to container liner companies.

As of June 30, 2020, we owned 45 containerships, with a total capacity of 249,804 TEU and with an average age, weighted by TEU capacity, of 13.3 years. During July 2020, we sold two 1999 built, 2,200 TEU feeder ships, GSL Matisse and Utrillo, and we currently own 43 containerships, with a total capacity of 245,280 TEU and with an average age, weighted by TEU capacity of 13.2 years.

We are responsible for the operation and technical management of each ship, which includes crewing, providing lubricating oils, maintaining the ship, arranging and supervising periodic drydocking and performing work required by regulations.

All of our vessels are technically managed by Technomar, a company of which George Giouroukos, our Executive Chairman, is the majority beneficial owner, under ship management contracts whereby, for an annual management fee, Technomar provides all day-to-day ship technical management, including crewing, purchasing stores, lubricating oils and spare parts, paying wages, pensions and insurance for the crew, and organizing other vessel operating necessities, including the arrangement and management of drydocking. We pay Technomar a daily management fee of Euro 685 per ship, which has remained unchanged since 2018, payable in U.S. dollars at an agreed rate of exchange, which, in addition to the technical ship management services noted above, includes administrative support services provided to us, including accounting and financial reporting, treasury management services and legal services.

Commercial management services for our vessels includes evaluating market charter rates and durations of future employment, marketing a vessel for such employment, agreeing the detailed terms of a new charter or extension of an existing charter, administering the conduct of the charter including collection of charter-hire where necessary, and negotiating sale and purchase transactions. Following our sale of GSL Matisse and Utrillo, Global Ship Lease Services Limited (“GSLS”), our wholly owned subsidiary, is the commercial manager for 16 of our ships. It has entered into a Commercial Advisory Services and Exclusive Brokerage Services Agreement (“EBSA”) with Conchart, of which our Executive Chairman is the sole beneficial owner, whereby Conchart is appointed to provide commercial advisory and exclusive brokerage services.  GSLS has agreed to pay Conchart a commission of 1.25% on all monies earned under each charter fixture, other than charters with CMA CGM, a commission of 0.75% on new charters with CMA CGM, subject to certain exceptions, and a 1.00% commission on any sale and purchase transaction. Commercial management for all of our other vessels is provided directly by Conchart on similar terms.

For more information regarding management of our ships, please see “Item 4. Information on the Company—B. Business Overview—Management of our Fleet” in our Annual Report.

Our financial results are largely driven by the following factors:

●

the continued performance of our charter agreements;

●

the number of ships in our fleet and their charter rates;

●

the terms under which we recharter our ships once the existing time charters have expired;

●

the number of days that our ships are utilized and not subject to drydocking, special surveys or otherwise are off-hire;

●

our ability to control our costs, including ship operating costs, ship management fees, insurance costs, drydock costs, general, administrative and other expenses and interest and financing costs. Ship operating costs may vary from month to month depending on a number of factors, including the timing of purchases of spares and stores and of crew changes;

●

impairment of our ships and other non-current assets; and

●

access to, and the pricing and other terms of, our debt and other financings.

All of our ships are fixed on charters, with a range of short-term to long-term. Adjusted to include all charters agreed, and ships acquired or divested, up to August 6, 2020, the average remaining term of our charters at June 30, 2020, to the mid-point of redelivery, including options under our control, was 2.3 years on a TEU-weighted basis. The charter rate that we will be able to achieve on renewal will be affected by market conditions at that time. As discussed further below, operational matters such as off-hire days for planned maintenance or improvements or for unexpected accidents and incidents affect the actual amount of revenues we receive. If our charterers are unable to make charter payments to us, our results of operations and financial condition will be materially adversely affected. If our existing charters with our charterers were terminated and we were required to recharter at lower rates or if we were unable to find new charters due to market conditions, our results of operations and financial condition would be materially adversely affected.

CMA CGM is our main customer representing 52.40% of our revenue for the six months ended June 30, 2020.  CMA CGM owns 9.94% of our issued Class A common shares, which represents 11.13% of our voting rights. Charter payments from CMA CGM are a major source of operating cash flow. At any given time in the future, the cash resources of CMA CGM may be diminished or exhausted, and we cannot assure you that CMA CGM will be able to make charter payments to us.

Operating Fleet

The following table presents summary information about our fleet of 43 ships as of August 6, 2020:

Recent and Other Developments

On July 3, 2020, the Company delivered GSL Matisse to its new owners for net proceeds of $3.6 million, and the vessel was released as collateral under the Company’s 2022 Notes and applicable secured term loan.

On July 20, 2020, the Company delivered Utrillo to its new owners for net proceeds of $3.6 million, and the vessel was released as collateral under the Company’s 2022 Notes and applicable secured term loan.

COVID-19 Pandemic: On March 11, 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) outbreak a pandemic.  Since the beginning of calendar year 2020, the outbreak of COVID-19 that originated in China and that has spread to most developed nations of the world has resulted in the implementation of numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus, including, among others, quarantines, travel restrictions, and physical distancing requirements. These measures have resulted in a significant reduction in global economic activity and uncertainty in the global financial markets. When these measures and the resulting economic impact will end and the long-term impact of such measures on the global economy cannot be known at this time. A significant reduction in manufacturing and other economic activities has and will continue to have a material and adverse impact on the global production and supply of goods, such as those that that our customers transport on our vessels, which has and may continue to negatively affect the demand for container shipping services, and therefore charter rates and asset values. In addition, the COVID-19 pandemic has caused, and if it continues on a prolonged basis may continue to cause, delayed or extended drydockings and disruptions in our operations from non-availability of staff and materials. The scale and duration, as well as the impact, of these factors, while currently uncertain, could have a material and adverse impact on our operations, earnings, cash flows and financial condition for 2020. Accordingly, an estimate of the impact cannot be made at this time.

Critical Accounting Policies

The interim unaudited consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates in the application of our accounting policies based on the best assumptions, judgments and opinions of management. Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. All significant accounting policies are as described in our Annual Report.

For a further description of our material accounting policies, please see note 2 to the interim unaudited consolidated financial statements included elsewhere in this report.

The preparation of interim unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates under different assumptions and/or conditions.

Vessels are generally recorded at their historical cost, which consists of the acquisition price and any material expenses incurred upon acquisition. Vessels acquired in a corporate transaction accounted for as an asset acquisition are stated at the acquisition price, which consists of consideration paid, plus transaction costs less any negative goodwill, if applicable. Vessels acquired in a corporate transaction accounted for as a business combination are recorded at fair value. Vessels acquired as part of the Company’s merger with Marathon Acquisition Corp. in 2008 were accounted for under ASC 805, which required that the vessels be recorded at fair value, less the negative goodwill arising as a result of the accounting for the merger.

Subsequent expenditures for major improvements and upgrades are capitalized, provided they appreciably extend the life, increase the earnings capacity or improve the efficiency or safety of the vessels.

Borrowing costs incurred during the construction of vessels or as part of the prefinancing of the acquisition of vessels are capitalized. There was no capitalized interest for the six months ended June 30, 2020 and for the year ended December 31, 2019.

Vessels are stated less accumulated depreciation and impairment, if applicable. Vessels are depreciated to their estimated residual value using the straight-line method over their estimated useful lives which are reviewed on an ongoing basis to ensure they reflect current technology, service potential and vessel structure. The useful lives are estimated to be 30 years from original delivery by the shipyard.

Management estimates the residual values of our container vessels based on a scrap value cost of steel times the weight of the vessel noted in lightweight tons (“LWT”). Residual values are periodically reviewed and revised to recognize changes in conditions, new regulations or other reasons. Revision of residual values affects the depreciable amount of the vessels and affects depreciation expense in the period of the revision and future periods. Management, after considering current market trends for scrap rates and historical scrap rates of the residual values of our vessels, estimates scrap value per LWT at a rate of $400.

For any vessel group which is impaired, the impairment charge is recorded against the cost of the vessel and the accumulated depreciation as at the date of impairment is removed from the accounts. 

The cost and related accumulated depreciation of assets retired or sold are removed from the accounts at the time of sale or retirement and any gain or loss is included in the interim unaudited Consolidated Statements of Operations.

The Company classifies assets and disposal groups as being held for sale when the following criteria are met: management has committed to a plan to sell the asset (disposal group); the asset (disposal group) is available for immediate sale in its present condition; an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated; the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year; the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Tangible fixed assets, such as vessels, are reviewed individually for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. Undiscounted projected operating cash flows are determined for each vessel group, which comprises of the vessel, the unamortized portion of deferred dry-docking related to the vessel and the related carrying value of the intangible asset or liability (if any) with respect to the time charter attached to the vessel at its purchase, if applicable (together the “vessel group”) and compared to the carrying value of the vessel group (step one). Within the shipping industry, vessels can be purchased with a charter attached.

The value of the charter may be favorable or unfavorable when comparing the contracted charter rate to then current market rates. An impairment charge is recognized when the sum of the expected undiscounted future cash flows from the vessel group over its estimated remaining useful life is less than its carrying amount (step one) and is recorded equal to the amount by which the vessel group’s carrying amount exceeds its fair value, including any applicable charter. Fair value is determined with the assistance from valuations obtained from third party independent ship brokers (step two).

The assumptions used involve a considerable degree of estimation. Actual conditions may differ significantly from the assumptions and thus actual cash flows may be significantly different to those estimated with a material effect on the recoverability of each vessel’s carrying amount.

The most significant assumptions made for the determination of expected cash flows are (i) charter rates on expiry of existing charters, which are based on forecast charter rates, where relevant, in the four years from the date of the impairment test and a reversion to the historical mean for each vessel thereafter (ii) off-hire days, which are based on actual off-hire statistics for the Company’s fleet (iii) operating costs, based on current levels escalated over time based on long term trends (iv) dry-docking frequency, duration and cost  (v) estimated useful life, which is assessed as a total of 30 years from original delivery by the shipyard and (vi) scrap values.

The Company charters out its vessels on time charters which involves placing a vessel at a charterer’s disposal for a specified period of time during which the charterer uses the vessel in return for the payment of a specified daily hire rate. Such charters are accounted for as operating leases and therefore revenue is recognized on a straight-line basis as the average revenues over the rental periods of such charter agreements, as service is performed. Cash received in excess of earned revenue is recorded as deferred revenue. If a time charter contains one or more consecutive option periods, then subject to the options being exercisable solely by the Company, the time charter revenue will be recognized on a straight-line basis over the total remaining life of the time charter, including any options which are more likely than not to be exercised. Any difference between the charter rate invoiced and the time charter revenue recognized is classified as, or released from, deferred revenue within the interim unaudited Consolidated Balance Sheets.

Revenues are recorded net of address commissions, which represent a discount provided directly to the charterer based on a fixed percentage of the agreed upon charter rate.

Charter revenue received in advance which relates to the period after a balance sheet date is recorded as deferred revenue within current liabilities until the respective charter services are rendered. 

Financial instruments carried on the balance sheet include cash and cash equivalents, restricted cash, trade receivables and payables, other receivables and other liabilities and long-term debt. The particular recognition methods applicable to each class of financial instrument are disclosed in the applicable significant policy description of each item or included below as applicable.

As of March 31, 2020, two of the Company’s vessel groups with a total aggregate carrying amount of $15.6 million were written down to their fair value of $8.0 million resulting in a non-cash impairment charge of $7.6 million which was allocated to the respective vessels’ carrying values.

As of June 30, 2020, two of the Company’s vessel groups with a total aggregate carrying amount of $8.0 million were written down to their fair value of $7.1 million resulting in a non-cash impairment charge of $0.9 million which was allocated to the respective vessels’ carrying values. 

The estimated fair value, measured on a non-recurring basis, was determined with the assistance of valuations obtained from third party independent ship brokers. Therefore, the Company has categorized the fair value of these vessels as Level 2 in the fair value hierarchy for the periods ended March 31 and June 30, 2020.

Financial instruments that potentially subject the Company to concentrations of credit risk are accounts receivable and cash and cash equivalents. The Company does not believe its exposure to credit risk is likely to have a material adverse effect on its financial position, results of operations or cash flows.

Recent Accounting Pronouncements

Relevant recent accounting pronouncements are included in the notes to the interim unaudited consolidated financial statements included elsewhere in this report.

Results of Operations

Financial Results for the Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019

(Expressed in millions of U.S. dollars except share data)

Revenue and Utilization

For the six months ended June 30, 2020, revenue was $142.3 million, up $14.7 million (or 11.52%) on revenue of $127.6 million in the comparative period. The increase was principally due to an additional 10.04% of operating days from the addition of six vessels since July 1, 2019, and increased revenue from MSC Tianjin, Alexandra, Alexis, Olivia I, Kristina and Katherine as the charters for these ships were renewed at increased rates, offset mainly by the decrease in revenue of Agios Dimitrios and MSC Qingdao due to offhire from scrubber installations during second quarter 2020 and decreases from GSL Matisse and Utrillo (assets held for sale as at June 30, 2020) and La Tour as her charter was renewed at a lower rate. There were 8,111 ownership days in the six months ended June 30, 2020, an increase of 17.35% compared to 6,912 in the six months ended June 30, 2019. The 434 days of offhire for dry-dockings in the six months ended June 30, 2020 were mainly attributable to three dry-dockings in progress as of June 30, 2020, one for regulatory reasons and two for scrubber installations plus three dry-dockings that were completed. With 217 days idle time for GSL Matisse and Utrillo (assets held for sale), 33 idle days for Julie and GSL Christen between charters and 59 days of unplanned offhire days, utilization was 90.84%. The 174 days of offhire for dry-dockings in the six months ended June 30, 2019 were mainly attributable to one completed dry-docking, primarily to upgrade the ship to increase substantially its reefer capacity and four dry-dockings in progress as of June 30, 2019, one for regulatory reasons only and three for the upgrade of their reefer capacity along with the regulatory dry-docking which has been brought forward. With 18 days idle time for Tasman, GSL Valerie and Orca I prior to their delivery to their new charterers and 24 days of unplanned offhire days, utilization was 96.88%.

The table below shows fleet utilization for the six month periods ended June 30, 2020 and 2019.

Vessel Operating Expenses

Vessel operating expenses, which primarily include costs of crew, lubricating oil, repairs, maintenance, insurance and technical management fees, were $49.7 million, or an average of $6,125 per day, compared to $41.8 million in the comparative period, or $6,042 per day, an increase of $83 per ownership day, or 1.37%. The increase was due to 1,199 (17.35%) additional ownership days as a result of the acquisition of six vessels since July 1, 2019, all of which are Post-Panamax with higher daily operating expenses.

Time Charter and Voyage Expenses

For the six months ended June 30, 2020, time charter and voyage expenses were $6.2 million, compared to $3.6 million in the comparative period with the increase being due to the addition of six vessels since July 1, 2019, all of which incur such commission. In addition, a number of our legacy ships have completed their initial charters with CMA CGM or OOCL and were employed on new charters obtained with the assistance of a broker thereby incurring commission. In addition, there was an increase in bunker costs for GSL Matisse and Utrillo (assets held for sale), and for Julie and GSL Christen during idle time.

Depreciation and Amortization

Depreciation for the six months ended June 30, 2020 was $23.1 million, compared to $21.7 million in the comparative period, with the increase being due to the addition of six vessels since July 1, 2019.

Vessel impairment losses

Two 1999 built, 2,200 TEU feeder ships, GSL Matisse and Utrillo, were sold on July 3, 2020 and July 20, 2020 respectively.  As of June 30, 2020, the vessels were immediately available for sale and qualified as assets held for sale. As of March 31, 2020, we had an expectation that the vessels would be sold before the end of their previously estimated useful life, and as a result performed an impairment test of the specific asset group. An impairment loss of $7.6 million was recognized for the three months ended March 31, 2020 and an additional impairment of $0.9 million has been recognized in the second quarter of 2020. No impairment charges were recognized in the prior year period.

General and Administrative Expenses

For the six months ended June 30, 2020, general and administrative expenses were $4.8 million, compared to $5.0 million in the comparative period. The average general and administrative expense per ownership day for the six month period ended June 30, 2020 was $587, compared to $719 in the comparative period, a decrease of $132 or 18.36%.

Adjusted EBITDA

Adjusted EBITDA (a non-GAAP financial measure) for the six months ended June 30, 2020 was $81.4 million, compared to $78.5 million for the comparative period, with the increase being due to the reasons noted above.

Interest Expense and Interest Income

Debt at June 30, 2020 totaled $845.0 million, comprising $267.0 million of indebtedness on our 9.875% First Priority Secured Notes due 2022 (the “2022 Notes”) and $4.7 million of indebtedness under a secured term loan, both cross collateralized by 18 vessels in the GSL Fleet, $59.0 million of indebtedness on our 8.00% Senior Unsecured Notes due 2024 (the “2024 Notes”), and $514.3 million other debt collateralized by our other vessels.  As of June 30, 2020, five of our vessels were unencumbered.

Debt at June 30, 2019 totaled $875.6 million, comprised of $340.0 million of indebtedness under our 2022 Notes and $24.8 million of indebtedness under a secured term loan, both cross collateralized by 18 vessels in the GSL Fleet and $510.8 million of other debt collateralized by our other vessels.

For the six months ended June 30, 2020, interest expense was $35.5 million, compared to $38.1 million for the six months ended June 30, 2019, with the decrease mainly due to principal repayments during second quarter of 2020 offset by the interest paid on our 2024 Notes plus the $2.3 million premium paid on the optional redemption of $46.0 million of our 2022 Notes in the first quarter of 2020.

Interest income for the six months ended June 30, 2020 was $0.8 million, the same as in the comparative period in 2019.

Other (Expenses)/Income, Net

Other expenses, net was $0.4 million in the six months ended June 30, 2020, compared to other income, net of $1.2 million in the prior year period.

Taxation

Taxation for the six months ended June 30, 2020 was a credit of $3,000, compared to $40,000 charge in the comparative period in 2019.

Earnings Allocated to Preferred Shares

Net Income Available to Common Shareholders

Non-U.S. GAAP Financial Measures

To supplement our financial information presented in accordance with U.S. GAAP, management uses certain “non-GAAP financial measures” as such term is defined in Regulation G promulgated by the SEC. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with U.S. GAAP. Management believes the presentation of these measures provides investors with greater transparency and supplemental data relating to our financial condition and results of operations, and therefore a more complete understanding of factors affecting our business than U.S. GAAP measures alone. In addition, management believes the presentation of these matters is useful to investors for period-to-period comparison of results as the items may reflect certain unique and/or non-operating items such as asset sales, write-offs, contract termination costs or items outside of management’s control.

Adjusted EBITDA

Adjusted EBITDA represents net income before interest income and expense, earnings allocated to preferred shares, income taxes, depreciation and amortization of drydocking costs and impairment losses.  Adjusted EBITDA is a non-US GAAP quantitative measure used to assist in the assessment of the Company's ability to generate cash from its operations.  We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is not defined in US GAAP and should not be considered to be an alternative to net income or any other financial metric required by such accounting principles. Our use of Adjusted EBITDA may vary from the use of similarly titled measures by others in our industry.

Adjusted EBITDA is presented herein on a forward-looking basis in certain instances. The Company has not provided a reconciliation of forward looking Adjusted EBITDA to the most directly comparable US GAAP measure because such US GAAP financial measure on a forward-looking basis is not available to the Company without unreasonable effort.

Adjusted EBITDA (Unaudited)

(Expressed in millions of U.S. dollars)

			Six months ended
			June 30,				June 30,
			2020				2019
Net income available to Common Shareholders				13.2				18.0
Adjust:	Depreciation and amortization			23.1				21.7
	Interest income			(0.8	)			(0.8	)
	Interest expense			35.5				38.1
	Income tax			0				0
	Earnings allocated to preferred shares			1.8				1.5
	Impairment charges			8.5				-
Adjusted EBITDA				81.4				78.5

Liquidity and Capital Resources

Our net cash flow from operating activities derives from revenue received under our charter contracts, which varies directly with the number of vessels under charter, days on-hire and charter rates, less vessel operating expenses including crew costs, lubricating oil costs, costs of repairs and maintenance, insurance premiums, general and administrative expenses, interest and other financing costs. In addition, each of our vessels is subject to a drydock approximately every five years.

Three dry-dockings were in progress as of June 30, 2020, one for regulatory reasons and two for the installation of scrubbers.  In the second half of 2020, we anticipate six further dry-dockings, one for the installation of scrubbers and five for regulatory purposes.

The main factors affecting operating cash flow in a period are (i) the timing of the receipt of charterhire, which is due to be paid two weeks or one month in advance, (ii) cashflows from any asset sales and purchases, (iii) payments for costs of drydockings and vessel improvements, (iv) the timing of the payment of interest, which is due to be paid semi-annually on May 15 and November 15 each year on our 2022 Notes, and quarterly on our other debt and (v) amortization of our 2022 Notes and other debt.

Our liquidity requirements are significant, primarily due to drydocking costs and debt service requirements. As indicated in the Tabular Disclosure of Contractual Obligations below, minimum amortization of debt for the 12 months ending June 30, 2021 is $81.4 million and interest is $51.8 million, for the 24 months ending June 30, 2023 is $457.3 million and interest is $71.0 million, and for the 24 months ending June 30, 2025 is $306.3 million and interest is $20.2 million.

In addition, we intend to declare and make quarterly dividend payments amounting to approximately $0.9 million per quarter on our Series B Preferred Shares on a perpetual basis. Finally, we may declare and pay dividends on our common shares in the future.

Other than costs for drydocking and vessel improvements, there are no other current material commitments for capital expenditures or other known and reasonably likely material cash requirements other than in respect of our growth strategy.

All our revenues are denominated in U.S. dollars.  A portion of our expenses is denominated in currencies other than U.S. dollars, principally UK pounds sterling and Euro. As of June 30, 2020, we had $89.7 million in cash and cash equivalents, including restricted cash. Our cash and cash equivalents are mainly held in U.S. dollars, with small amounts of UK pounds sterling, Euros and HK dollars. We regularly review the amount of cash and cash equivalents held in different jurisdictions to determine the amounts necessary to fund our operations and their growth initiatives and amounts needed to service our indebtedness and related obligations. If these amounts are moved out of their original jurisdictions, we may be subject to taxation.

We believe that funds generated by the business and retained will be sufficient to meet our operating needs for the next twelve months following the date of this report, including working capital requirements, drydocking costs, interest and debt repayment obligations.

Due to our charter coverage and nature of our operating and financial costs, our cashflows are predictable and visible, at least in the near to medium term. We have policies in place to control treasury activities within the group. For example, all new funding must be approved by our Board of Directors, and cash deposits can only be made with institutions meeting certain credit metrics and up to predetermined limits by institution.

Our floating rate debt is represented by drawings under a number of secured credit facilities. We have in the past, and may in the future, enter into hedging instruments, including interest rate swap agreements, to hedge our cash flows. We would not enter into derivatives for trading or speculative purposes.

The following table presents cash flow information derived from the unaudited consolidated statements of cash flows of Global Ship Lease for the six month periods ended June 30, 2020 and 2019.

(Expressed in millions of U.S. dollars)

		Six months ended June 30,
		2020				2019
Cash flows from operating activities:
Net income		$	15.0			$	19.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		$	23.1			$	21.7
Vessel impairment losses			8.5				-
Amortization of deferred financing costs			1.9				1.5
Amortization of original issue discount/premium on repurchase of notes			2.3				0.4
Amortization of intangible liability/asset-charter agreements			0.4				0.9
Share based compensation			1.3				0.9
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable and other assets		$	0.2			$	(1.7	)
Increase in inventories			(0.5	)			(0.2	)
(Decrease)/increase in accounts payable and other liabilities			(5.2	)			0.8
Decrease in related parties' balances, net			(3.5	)			(6.4	)
Decrease in deferred revenue			(5.0	)			(0.8	)
Unrealized foreign exchange loss			0.0				0.0
Net cash provided by operating activities		$	38.6			$	36.6
Cash flows from investing activities:
Acquisition of vessels		$	(23.1	)		$	(18.5	)
Cash paid for vessel expenditure			(1.4	)			(6.8	)
Advances for vessel acquisitions and other additions			(1.3	)			-
Cash paid for drydockings			(7.2	)			(0.7	)
Advances from sale of vessels			4.1				-
Net cash used in investing activities		$	(28.8	)		$	(26.0	)
Cash flows from financing activities:
Proceeds from issuance of 2024 Notes		$	19.2			$	-
Repurchase of 2022 Notes, including premium			(57.8	)			-
Proceeds from drawdown of credit facilities			47.0				13.0
Repayment of credit facilities			(33.9	)			(26.5	)
Repayment of refinanced debt			(44.4	)			-
Deferred financing costs paid			(1.0	)			(0.3	)
Proceeds from offering of Class A common shares, net of offering costs			(0.1	)			-
Proceeds from offering of Series B preferred shares, net of offering costs			5.0				-
Series B Preferred Shares-dividends paid			(1.8	)			(1.5	)
Net cash used in financing activities		$	(67.8	)		$	(15.4	)
Decrease in cash and cash equivalents and restricted cash			(57.9	)			(4.8	)
Cash and cash equivalents and restricted cash at beginning of the period			147.6				90.1
Cash and cash equivalents and restricted cash at end of the period		$	89.7			$	85.3
Supplementary Cash Flow Information:
Cash paid for interest			33.1				35.0
Non-cash Investing activities:
Unpaid drydocking expenses			0.5				-
Unpaid vessel additions			2.8				-

Net Cash provided by operating activities for the six months ended June 30, 2020 compared to the six months ended June 30, 2019

Net cash provided by operating activities increased by $2.0 million to $38.6 million for the six months ended June 30, 2020, compared to $36.6 million cash provided by operating activities for the six months ended June 30, 2019. The principal reason for the increase is the addition of six vessels since July 1, 2019.

The adjustments to reconcile net income to net cash provided by operating activities were $23.1 million of depreciation and amortization, $1.9 million of amortization of deferred financing costs, $2.3 million of amortization of original issue discount/premium on repurchase of notes, $0.4 million of amortization of intangible liability/asset-charter agreements, $8.5 million of impairment losses, $1.3 million share based compensation offset by changes in operating assets and liabilities totaling $14.0 million for the six month period ended June 30, 2020 from $0.2 million decrease in accounts receivable and other assets, $0.5 million increase in inventories, $5.2 million decrease in accounts payable and other liabilities, $3.5 million decrease in related parties' balances, and $5.0 million decrease in deferred revenue. 

Cash used in investing activities for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019:

Cash used in investing activities was $28.8 million for the six months ended June 30, 2020, as compared to $26.0 million for the same period in 2019. The principal reason for the increase is additional investment in new ships, additional spending on ship improvements offset by advances from sale of vessels.

Cash used in investing activities for the six months ended June 30, 2020 was the result of (i) $23.1 million for the acquisition of GSL Christen and GSL Nicoletta; (ii) $2.7 million for improvements on all vessels, (iii) $7.2 million for regulatory drydockings and (iv) $4.1 million advances from sale of vessels.

Cash used in financing activities for the six months ended June 30, 2020 as compared to the six months ended June 30, 2019:

Cash used in financing activities was $67.8 million for the six months ended June 30, 2020, compared to $15.4 million used in the same period of 2019.

Cash used in financing activities for the six months ended June 30, 2020 was the result of (i) $78.3 million amortization of debt; (ii) $1.0 million costs incurred in connection with a new credit facility; (iii) $57.8 million of repurchases of our 2022 Notes; and (iv) $1.8 million in dividends related to the Series B Preferred Shares, net of $47.0 million proceeds from drawdown under a new senior secured credit facility in relation to the purchase of GSL Grania, GSL Kalliopi, GSL Vinia and GSL Christel Elisabeth; (ii) $5.0 million of net proceeds from offerings of our Depositary Shares (representing interests in our Series B Preferred Shares); and (iii) $19.2 million net proceeds from issuance of our 2024 Notes.

Indebtedness

Our indebtedness as at June 30, 2020 comprised:

(1) in millions of U.S. dollars.

Notes and Credit Facilities

 On October 31, 2017, the Company issued $360.0 million in aggregate principal amount of our 2022 Notes in a private placement.  The 2022 Notes mature on November 15, 2022. Proceeds after the deduction of the original issue discount, but before expenses, amounted to $356.4 million. 

The Company is required to have a minimum cash balance of $20.0 million on each test date, being March 31, June 30, September 30 and December 31 in each year. The original issue discount is being amortized on an effective interest rate basis over the life of the 2022 Notes. The Company is required to repay $40.0 million each year for the first three years and $35.0 million thereafter, across both the 2022 Notes and the Citi Credit Facility. The Citi Credit Facility has minimum fixed amortization whereas as long as amounts are outstanding under that Facility amortization of the 2022 Notes is at the option of the noteholders, who can accept or reject an annual tender offer the Company is obliged to make. In December 2018, the tender offer was accepted in full and the Company repurchased $20.0 million of the 2022 Notes at a purchase price of 102%. In December 2019, the tender offer of $20.0 million was partially accepted by the noteholders and the Company repurchased $17.3 million principal amount of the 2022 Notes at a purchase price of 102%. The balance of the offer of $2.7 million was applied to repay the Citi Credit Facility at par.

On February 10, 2020, the Company completed an optional redemption of $46.0 million aggregate principal amount of its 2022 Notes at a redemption price of $48.3 million (representing 104.938% of the aggregate principal amount) plus accrued and unpaid interest. During March 2020, the Company purchased $9.1 million of aggregate principal amount of 2022 Notes in the open market at a price of $8.9 million (representing an average price of 98.14% of the aggregate principal amount). Further, in June 2020, the Company purchased $0.7 million of aggregate principal amount of 2022 Notes in the open market at a price of $0.6 million (representing an average price of 92.10% of the aggregate principal amount).

On December 20, 2018, the Company entered into a first supplemental indenture for the 2022 Notes according to which the date beginning on which the Company is permitted to pay dividends to common shareholders in an aggregate amount per year equal to 50% of the consolidated net profit after taxes of the Company for the preceding financial year, was brought forward from January 1, 2021 to January 1, 2020. Also, certain restrictions were agreed in the increase in the permitted transfer basket and the immediate increase in dividend capacity as a result of completing the Poseidon Transaction, and certain other provisions of the Indenture, among other things, the restricted payment covenant, the arm’s length transaction covenant and the reporting covenant were amended.

On November 19, 2019, the Company issued $27.5 million aggregate principal amount of its 2024 Notes which mature on December 31, 2024. On November 27, 2019, the Company sold an additional $4.2 million of 2024 Notes, pursuant the underwriter’s option to purchase such additional 2024 Notes. Interest on the 2024 Notes is payable on the last day of February, May, August and November of each year commencing on February 29, 2020.

The Company has the option to redeem the 2024 Notes for cash, in whole or in part, at any time (i) on or after December 31, 2021 and prior to December 31, 2022, at a price equal to 102% of the principal amount, (ii) on or after December 31, 2022 and prior to December 31, 2023, at a price equal to 101% of the principal amount and (iii) on or after December 31, 2023 and prior to maturity, at a price equal to 100% of the principal amount.

On November 27, 2019, the Company entered into an “At Market Issuance Sales Agreement” with B. Riley FBR, Inc. (the “Agent”) under which and in accordance with the Company’s instructions, the Agent sold an aggregate of $27.3 million principal amount of 2024 Notes, and may offer and sell from time to time newly issued 2024 Notes.

As of June 30, 2020, the outstanding aggregate principal amount of the 2024 Notes was $59.0 million.

On September 19, 2019, the Company entered into a Syndicated Senior Secured Credit Facility in order to refinance existing credit facilities that had a maturity date in December 2020, of an amount $224.3 million.

The Senior Syndicated Secured Credit Facility was agreed to be borrowed in two tranches.

The Company drew down in full Tranche B in the amount of $38.0 million on February 10, 2020, which is scheduled to be repaid in 20 consecutive quarterly instalments of $1.0 million  and a balloon payment of $18.0 million payable in the termination date on the fifth anniversary from the utilization date of Tranche A, which falls in September 24, 2024.

The existing indebtedness that was refinanced comprised of the following credit facilities:

●

$55.7 million Credit Agricole Credit Facility with an outstanding balance of $51.0 million as of September 19, 2019.

●

$24.5 million Blue Ocean Credit Facility with an outstanding balance of $23.7 million as of September 19, 2019.

●

$65.3 million ABN AMRO Credit Facility with an outstanding balance of $61.6 million as of September 19, 2019.

●

$17.1 million Amsterdam Trade Bank (“ATB”) Credit Facility with an outstanding balance of $12.6 million as of September 19, 2019.

●

$80.0 million Credit Agricole Credit Facility with an outstanding balance of $75.5 million as of September 19, 2019.

●

$52.6 million DVB Credit Facility with an outstanding balance of $44.4 million as of February 12, 2020.

As of June 30, 2020, the outstanding balance of this facility amounted to $250.4 million.

On September 19, 2019, the Company entered into a refinancing agreement with Blue Ocean Income Fund LP, Blue Ocean Onshore Fund LP, and Blue Ocean Investments SPC Blue, holders of the outstanding debt of $38.5 million relevant to the previous Blue Ocean Credit Facility in order to refinance that existing facility with the only substantive change being to extend maturity at the same date with the Syndicated Senior Secured Credit Facility.

The Company fully drew down the facility on September 23, 2019 and it is scheduled to be repaid in a single instalment on the termination date which falls on September 24, 2024.

This facility bears interest at 10.00% per annum.

As of June 30, 2020, the outstanding balance on this facility amounted to $38.5 million.

On December 31, 2018, the Company entered into a deed of amendment and restatement with the bank. Based on this restatement there was a re-tranche of the facility such that it was split into a senior facility in an amount of $141.9 million (“Senior Facility”) and a junior facility in an amount of $38.6 million (“Junior Facility”). The Lenders of the Senior Facility are Hamburg Commercial Bank AG (“HCOB”), Deutsche Bank AG and CIT Bank N.A and the Lenders of the Junior Facility are Blue Ocean GP LLC, Blue Ocean Income Fund LP, Blue Ocean Onshore Fund LP, Entrustpermal ICAV, Blue Ocean Investments SPC one and Blue Ocean Investments SPC for three. The final maturity of both Facilities (Senior and Junior) is June 30, 2022. In addition to the repayment schedule a cash sweep mechanism based on a DSCR ratio of 1.10:1 (DSCR ratio is the ratio of Cash Flow to the Cash Flow Debt Service) will apply pro rata against the Senior Facility and the Junior Facility.

The Senior Facility is comprised of three Tranches. Tranche A relates to Al Khor and is repayable in 14 instalments of $0.9 million, and a final instalment of $35.1 million. Tranche B relates to Anthea Y and is repayable in 14 instalments of $0.9 million and a final instalment of $35.2 million. Tranche C relates to Maira XL and is repayable in 14 instalments of $0.9 million and a final instalment of $35.3 million.

The Senior Facility bears interest at LIBOR plus 3.00% payable quarterly in arrears.

As of June 30, 2020, the outstanding balance on the Senior Facility was $123.0 million.

The Junior Facility is comprised of three Tranches. Tranche A relates to Al Khor and is repayable in 14 instalments of $0.2 million and a final instalment of $9.6 million. Tranche B relates to Anthea Y and is repayable in 14 instalments of $0.2 million and a final instalment of $9.6 million. Tranche C relates to Maira XL and is repayable in 14 instalments of $0.2 million and a final instalment of $9.6 million.

The Junior Facility bears interest at LIBOR plus 10.00% payable quarterly in arrears.

As of June 30, 2020, the outstanding balance on the Junior Facility was $33.5 million.

On October 26, 2017, and in connection with the 2022 Notes, the Company entered into a new $54.8 million loan with Citibank N.A. The loan was drawn down in full on October 31, 2017 and matures no later than October 31, 2020. The interest rate is LIBOR plus a margin of 3.25% and is payable at least quarterly.

Amortization, which may be increased as described above, is payable semi-annually and is a minimum of $20.0 million in each of the first and second years with the balance to be repaid in the third year.

 The collateral provided to the 2022 Notes also secures on a first priority basis the Citi Credit Facility. The Company is required to have a minimum cash balance of $20.0 million on each test date, being March 31, June 30, September 30 and December 31 in each year.

As of June 30, 2020, the outstanding balance of this facility was $6.7 million.

An initial tranche of $13.0 million was drawn on May 24, 2019, in connection with the acquisition of the GSL Eleni. The Facility is repayable in 20 equal quarterly instalments of $0.5 million each with a final balloon of $4.0 million payable together with the final instalment.

A second tranche of $12.0 million was drawn on September 4, 2019, in connection with the acquisition of GSL Grania. The Facility is repayable in 20 equal quarterly instalments of $0.4 million each with a final balloon of $4.0 million payable together with the final instalment.

The third tranche of $12.0 million was drawn on October 3, 2019, in connection with the acquisition of GSL Kalliopi. The Facility is repayable in 20 equal quarterly instalments of $0.4 million each with a final balloon of $4.0 million payable together with the final instalment.

On December 10, 2019, the Company via its subsidiaries Global Ship Lease 33 and 34 entered into an amended and restated loan agreement with Hellenic Bank for an additional facility of amount $22.0 million that is to be borrowed in two tranches and to be used in connection with the acquisition of the vessels GSL Vinia and GSL Christel Elisabeth. Both tranches were drawn on December 10, 2019 and are each repayable in 20 equal quarterly instalments of $0.4 million each with a final balloon of $3.5 million payable together with the final instalment.

This facility bears interest at LIBOR plus a margin of 3.90% per annum.

On February 26, 2020, the Company via its subsidiaries, Athena Marine LLC, Aphrodite Marine LLC and Aris Marine LLC entered into a secured term facility agreement with Chailease International Financial Services Pte., Ltd. for an amount of $9.0 million. The Chailease Bank Facility is to be used for the refinance of DVB Credit Facility.

The Facility is repayable in 36 consecutive monthly instalments $0.2 million and 24 monthly installments of $0.1 million with a final balloon of $1.3 million payable together with the final instalment.

This facility bears interest at LIBOR plus a margin of 4.20% per annum.

As of February 12, 2020, the outstanding balance on this facility amounted to $44.4 million was fully refinanced by the Tranche B Syndicated Senior Secured Credit Facility and the Chailease Credit Facility.

The facility had a repayment schedule along with a cash sweep clause, whereby the excess cash flows will be used against the outstanding balance of the facility and would be specifically applied to the prepayment of the balloon instalment up to a specific amount.

The facility carried interest at LIBOR plus a margin of 2.85% per annum.

On September 23, 2019, the outstanding balance on this facility of $51.0 million was fully refinanced by the Syndicated Senior Secured Credit Facility.

The facility had a repayment schedule along with a cash sweep clause, whereby the excess cash flows would be used against the outstanding balance of the facility and would be specifically applied to the prepayment of the balloon instalment up to a specific amount.

This facility carried interest at LIBOR plus a margin of 2.75% per annum.

In connection with the Poseidon Transaction, the Company assumed debt from the vessel owning company of Agios Dimitrios on the date of completion of the transaction of $24.2 million with Blue Ocean Income Fund LP, Blue Ocean Onshore Fund LP, Blue Ocean Investments SPC One and Blue Ocean Investments SPC Three (together, “Blue Ocean”). The agreement was dated August 11, 2017, with initial drawdown amount of $24.5 million and final maturity of December 31, 2020.

On September 24, 2019, the outstanding balance on this facility of $23.7 million was fully refinanced by the Syndicated Senior Secured Credit Facility.

The facility had a following repayment schedule along with a cash sweep clause, whereby the excess cash flows would be used against the outstanding balance on the facility and would be specifically applied to the prepayment of the balloon instalment up to a specific amount.

This facility carried interest on $18.8 million of principal at LIBOR plus a margin of 4.00% per annum.

In connection with the Poseidon Transaction, the Company assumed debt from the two vessel owning companies of Orca II and Katherine, on the date of completion of the transaction of $64.3 million with ABN AMRO Bank N.V. The agreement was dated August 30, 2017, with initial drawdown amount of $65.3 million and final maturity of December 31, 2020.

On September 24, 2019, the outstanding balance on this facility of $61.6 million was fully refinanced by the Syndicated Senior Secured Credit Facility.

The facility had a repayment schedule along with a cash sweep clause, whereby the excess cash flows would be used against the outstanding balance on the facility and would be specifically applied to the prepayment of the balloon instalment up to a specific amount.

This facility carried interest at LIBOR plus a margin of 3.42% per annum up to March 31, 2019 and afterwards 3.50% per annum.

In connection with the Poseidon Transaction, the Company assumed debt from THD Maritime Co. Limited, a holding company of the three vessel owning companies of Tasman, Dimitris Y and Ian H, on the date of completion of the transaction of $17.1 million with Amsterdam Trade Bank N.V. The agreement was dated October 9, 2018 with initial drawdown amount of $17.1 million divided in three tranches of $5.7 million each and final maturity of December 31, 2020.

On September 27, 2019, the outstanding balance on this facility of $12.6 million was fully refinanced by the Syndicated Senior Secured Credit Facility.

The facility had a repayment schedule along with a cash sweep clause, whereby the excess cash flows would be used against the outstanding balance on the facility and would be specifically applied to the prepayment of the balloon instalment up to a specific amount.

This facility carried interest at LIBOR plus a margin of 3.90% per annum.

In connection with the Poseidon Transaction, the Company assumed debt from the three vessel owning companies of Alexandra, Alexis, (previously named UASC Bubiyan) and Olivia I (previously named UASC Yas) on the date of completion of the transaction of $80.0 million with Credit Agricole. The agreement was dated October 3, 2018, with initial drawdown amount of $80.0 million and final maturity of June 30, 2020. An amendment to the agreement was entered into on April 22, 2019, whereby the final maturity date was amended to April 5, 2021 and the number of quarterly repayments increased from six to 10.

On September 24, 2019, the outstanding balance on this facility of $75.5 million was fully refinanced by the Syndicated Senior Secured Credit Facility.

The Facility was repayable in 10 equal quarterly instalments of $1.5 million each with a final balloon of $65.0 million payable together with the final instalment.

This facility carried interest at LIBOR plus a margin of 3.00% per annum for the first 6 months, 3.25% for the following 12 months and 3.50% thereafter payable quarterly in arrears.

In connection with the Poseidon Transaction, the Company assumed debt from the three vessel owning companies of Alexandra, UASC Bubiyan and Olivia I (ex. UASC Yas) on the date of completion of the transaction of $38.5 million with Blue Ocean. The agreement was dated October 3, 2018, with initial drawdown amount of $38.5 million and final maturity of October 3, 2023.

On September 19, 2019, the outstanding balance on this facility of $38.5 million was refinanced by the Blue Ocean Junior Credit Facility.

The Facility was scheduled to be repaid in one instalment at maturity date and bears interest at 10.00% fixed payable quarterly in arrears.

Covenants

Certain of our credit facilities have financial covenants, which require us to maintain, among other things:

●

minimum consolidated liquidity of not less than $20.0 million;

●

minimum net worth of not less than $50.0 million;

●

minimum market value of collateral for each credit facility, such that the aggregate market value of the vessels collateralizing the particular credit facility is between 125% and 135%, depending on the particular facility, of the aggregate principal amount outstanding under such credit facility, or, if we do not meet such threshold, to provide additional security to eliminate the shortfall; and

The agreements governing our indebtedness also contain undertakings limiting or restricting us from, among other things:

●

incurring additional indebtedness or issuing certain preferred stock;

●

making any substantial change to the general nature of our business;

●

paying dividends on or repaying or distributing any dividend or share premium reserve;

●

redeeming or repurchasing capital stock;

●

creating or impairing certain securities interests, including liens;

●

transferring or selling certain assets;

●

entering into certain transactions other than arm’s length transactions;

●

acquiring a company, shares or securities or a business or undertaking;

●

entering into any amalgamation, demerger, merger, consolidation or corporate reconstruction, or selling all or substantially all of our properties or assets;

●

experiencing any change in the position of Executive Chairman; and

●

changing the flag, class or technical or commercial management of the vessel mortgaged under such facility or terminating or materially amending the management agreement relating to such vessel.

●

a first priority mortgage over the relevant collateralized vessels;

●

first priority assignment of earnings and insurances from the mortgaged vessels;

●

pledge of the earnings account of the mortgaged vessel;

●

pledge of the equity interest of each of the vessel-owning subsidiaries; and

●

corporate guarantees.

Leverage

Debt at June 30, 2020 totaled $845.0 million, comprising $267.0 million of indebtedness on our 2022 Notes and $4.7 million of indebtedness under a secured term loan, both cross collateralized by 18 vessels in the GSL Fleet, $59.0 million of indebtedness on our 2024 Notes, and $514.3 million other debt collateralized by our other vessels.  As of June 30, 2020, five of our vessels are unencumbered.

As market conditions warrant, we may from time to time, depending upon market conditions and the provisions of the indenture governing the 2022 Notes and of the agreement governing the secured term loan, seek to repurchase debt securities that we have issued or repay loans that we have borrowed, including the 2022 Notes and borrowings under our other credit facilities, in privately-negotiated or open market transactions, by tender offer or otherwise.

Tabular Disclosure of Contractual Obligations

The contractual obligations presented below represent our estimates of future payments under fixed contractual obligations and commitments as of June 30, 2020. These amounts do not include dividends on the Series B Preferred Shares which amount to $3.6 million annually. Changes in our business needs or in interest rates, as well as actions by third parties and other factors, may cause these estimates to change. These estimates are necessarily subjective and our actual payments in future periods are likely to vary from those presented in the table.

Quantitative and Qualitative Disclosures about Market Risks

Interest Rate Risk

We are exposed to the impact of interest rate changes primarily through our floating-rate borrowings. Significant increases in interest rates could adversely affect our results of operations and our ability to service our own debt. Details of the expected maturity of our borrowings are presented in Tabular Disclosure of Contractual Obligations above.

Sensitivity Analysis

Our analysis of the potential effects of variations in market interest rates is based on a sensitivity analysis, which models the effects of potential market interest rate changes on our financial condition and results of operations. The following sensitivity analysis may have limited use as a benchmark and should not be viewed as a forecast as it does not include a variety of other potential factors that could affect our business as a result of changes in interest rates.

Based on the outstanding balance at June 30, 2020 of our floating rate credit facilities of $480.6 million and ignoring amortization thereon and cash on hand, a hypothetical 1.00% increase in LIBOR would have the impact of reducing our annual net income, before income taxes, by approximately $4.8 million.

Foreign Currency Exchange Risk

The shipping industry’s functional currency is the U.S. dollar. All of our revenues and the majority of our operating costs are in U.S. dollars. In the future, we do not expect to be exposed to any significant extent to the impact of changes in foreign currency exchange rates. Consequently, we do not presently intend to enter into derivative instruments to hedge the foreign currency translation of assets or liabilities or foreign currency transactions or to use financial instruments for trading or other speculative purposes.

Inflation

With the exception of rising costs associated with the employment of international crews for our ships and the impact of global oil prices on the cost of lubricating oil, we do not believe that inflation has had, or is likely in the foreseeable future to have, a significant impact on ship operating expenses, drydocking expenses and general and administrative expenses. For the duration of the global expense agreement, under certain predefined circumstances, we will be able to recover a portion of our ship operating costs above a pre-determined threshold.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Index	Page
INTERIM UNAUDITED CONSOLIDATED BALANCE SHEETS AS AT JUNE 30, 2020 AND DECEMBER 31, 2019	F-1
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019	F-2
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019	F-3
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019	F-4
NOTES TO THE INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	F-5

						As of
		Note				June 30, 2020				December 31, 2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents							73,721				138,024
Restricted cash							9,750				3,909
Accounts receivable, net							3,390				2,350
Inventories							6,071				5,595
Prepaid expenses and other current assets							6,910				8,132
Due from related parties			5				7,244				3,860
Assets held for sale			3				7,096				—
Total current assets						$	114,182			$	161,870
NON-CURRENT ASSETS
Vessels in operation			3				1,147,214				1,155,586
Advances for vessels acquisitions and other additions			3				10,073				10,791
Intangible assets-charter agreements							108				1,467
Deferred charges, net							17,679				16,408
Restricted cash, net of current portion							6,215				5,703
Total non-current assets							1,181,289				1,189,955
TOTAL ASSETS						$	1,295,471			$	1,351,825
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable							14,869				9,052
Accrued liabilities							13,851				22,916
Current portion of long-term debt and deferred financing costs			4				81,358				87,532
Deferred revenue							5,019				9,987
Due to related parties			5				33				109
Total current liabilities							115,130				129,596
LONG-TERM LIABILITIES
Long-term debt, net of current portion and deferred financing costs			4				748,857				809,357
Intangible liability-charter agreements							5,466				6,470
Total non-current liabilities							754,323				815,827
Total liabilities						$	869,453			$	945,423
Commitments and Contingencies			6				—				—
SHAREHOLDERS' EQUITY
Class A common shares - authorized 214,000,000 shares with a $0.01 par value17,741,008 shares issued and outstanding (2019 – 17,556,738 shares)			7				177				175
Series B Preferred Shares - authorized 44,000 shares with a $0.01 par value 16,655 shares issued and outstanding (2019 – 14,428 shares)			7				—				—
Series C Preferred Shares - authorized 250,000 shares with a $0.01 par value 250,000 shares issued and outstanding (2019 - 250,000 shares)			7				3				3
Additional paid in capital							571,974				565,586
Accumulated deficit							(146,136	)			(159,362	)
Total shareholders' equity							426,018				406,402
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY						$	1,295,471			$	1,351,825

						Six months ended June 30,
		Note				2020				2019
OPERATING REVENUES
Time charter revenues (include related party revenues of $74,524 and $72,478 for each of the periods ended June 30, 2020 and 2019, respectively)							142,323				127,601
OPERATING EXPENSES:
Vessels operating expenses (include related party vessels operating expenses of $6,105 and $ 4,233 for each of the periods ended June 30, 2020 and 2019, respectively)							49,682				41,765
Time charter and voyage expenses (include related party time charter and voyage expenses of $1,201 and $850 for each of the periods ended June 30, 2020 and 2019, respectively)							6,181				3,635
Depreciation and amortization			3				23,126				21,710
Vessel impairment losses			3				8,497				—
General and administrative expenses							4,759				4,968
Operating Income							50,078				55,523
Interest income							831				784
Interest and other financial expense (including premium on 2022 Notes)							(35,539	)			(38,060	)
Other (expense)/ income, net							(351	)			1,236
Total non-operating expense							(35,059	)			(36,040	)
Income before income taxes							15,019				19,483
Income taxes							(3	)			40
Net Income							15,016				19,523
Earnings allocated to Series B Preferred Shares			7				(1,790	)			(1,532	)
Net Income available to Common Shareholders						$	13,226			$	17,991
Earnings per Share
Weighted average number of Class A common shares outstanding
Basic			9				17,632,674				9,937,836
Diluted			9				17,730,628				10,012,442
Net Earnings per Class A common share
Basic						$	0.43			$	0.79
Diluted						$	0.43			$	0.78

						Six months ended June 30,
		Note				2020				2019
Cash flows from operating activities:
Net Income							15,016				19,523
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization							23,126				21,710
Vessel impairment losses			3				8,497				—
Amortization of deferred financing costs			4				1,921				1,489
Amortization of original issue discount/ premium on repurchase of notes							2,282				405
Amortization of intangible asset/ liability-charter agreements							355				947
Share based compensation			8				1,282				858
Changes in operating assets and liabilities:
Decrease/ (increase) in accounts receivable and other assets							182				(1,746	)
Increase in inventories							(476	)			(194	)
(Decrease)/ increase in accounts payable and other liabilities							(5,154	)			789
Decrease in related parties' balances, net							(3,460	)			(6,367	)
Decrease in deferred revenue							(4,968	)			(788	)
Unrealized foreign exchange gain							1				10
Net cash provided by operating activities						$	38,604			$	36,636
Cash flows from investing activities:
Acquisition of vessels							(23,060	)			(18,496	)
Cash paid for vessel expenditures							(1,385	)			(6,776	)
Advances for vessel acquisitions and other additions							(1,279	)			—
Cash paid for drydockings							(7,189	)			(696	)
Advances from sale of vessels							4,119				—
Net cash used in investing activities						$	(28,794	)		$	(25,968	)
Cash flows from financing activities:
Proceeds from issuance of 2024 Notes							19,193				—
Repurchase of 2022 Notes, including premium							(57,822	)			—
Proceeds from drawdown of credit facilities							47,000				13,000
Repayment of credit facilities							(33,912	)			(26,546	)
Repayment of refinanced debt							(44,366	)			—
Deferred financing costs paid							(969	)			(322	)
Proceeds from offering of Class A common shares, net of offering costs							(76	)			—
Proceeds from offering of Series B preferred shares, net of offering costs			7				4,982				—
Series B Preferred Shares - dividends paid							(1,790	)			(1,532	)
Net cash used in financing activities						$	(67,760	)		$	(15,400	)
Net decrease in cash and cash equivalents and restricted cash							(57,950	)			(4,732	)
Cash and cash equivalents and restricted cash at beginning of the year							147,636				90,072
Cash and cash equivalents and restricted cash at end of the year						$	89,686			$	85,340
Supplementary Cash Flow Information:
Cash paid for interest							33,098				34,895
Non-cash investing activities:
Unpaid dry docking expenses							482				—
Unpaid vessel expenditures							2,823				—

		Number of Common Shares at par value $0.01				Number of Series B Preferred Shares at par value $0.01				Number of Series C Preferred Shares at par value $0.01				Common Shares				Series B Preferred Shares				Series C Preferred Shares				Additional paid-in capital				Accumulated Deficit				Total Shareholders' Equity
Balance at December 31, 2018			9,942,950				14,000				250,000			$	99			$	—			$	3			$	512,379			$	(196,119	)		$	316,362
Restricted Stock Units (Note 8)			—				—				—				—				—				—				429				—				429
Net Income for the period			—				—				—				—				—				—				—				10,389				10,389
Series B Preferred Shares dividend (Note 7)			—				—				—				—				—				—				—				(766	)			(766	)
Balance at March 31, 2019			9,942,950				14,000				250,000			$	99			$	—			$	3				512,808			$	(186,496	)			326,414
Restricted Stock Units (Note 8)			—				—				—				—				—				—				429				—				429
Net Income for the period			—				—				—				—				—				—				—				9,134			$	9,134
Series B Preferred Shares dividend (Note 7)			—				—				—				—				—				—				—				(766	)			(766	)
Balance at June 30, 2019			9,942,950				14,000				250,000			$	99			$	—			$	3			$	513,237			$	(178,128	)		$	335,211

		Number of Common Shares at par value $0.01				Number of Series B Preferred Shares at par value $0.01				Number of Series C Preferred Shares at par value $0.01				Common Shares				Series B Preferred Shares				Series C Preferred Shares				Additional paid-in capital				Accumulated Deficit				Total Shareholders' Equity
Balance at December 31, 2019			17,556,738				14,428				250,000			$	175			$	-			$	3			$	565,586			$	(159,362	)		$	406,402
Issuance of Class A common shares, net of offering costs			—				—				—				—				—				—				(39	)			—				(39	)
Series B Preferred Shares dividend (Note 7)			—				—				—				—				—				—				—				(879	)			(879	)
Restricted Stock Units (Note 8)			—				—				—				—				—				—				429				—				429
Net Income for the period			—				—				—				—				—				—				—				1,500				1,500
Issuance of Series B Preferred shares, net of offering costs			—				1,646				—				—				—				—				4,003				—				4,003
Balance at March 31, 2020			17,556,738				16,074				250,000			$	175			$	-			$	3			$	569,979			$	(158,741	)		$	411,416
Issuance of Class A common shares, net of offering costs			184,270				—				—				2				—				—				(37	)			—				(35	)
Series B Preferred Shares dividend (Note 7)			—				—				—				—				—				—				—				(911	)			(911	)
Restricted Stock Units (Note 8)			—				—				—				—				—				—				853				—				853
Net Income for the period			—				—				—				—				—				—				—				13,516				13,516
Issuance of Series B Preferred shares, net of offering costs			—				581				—				—				—				—				1,179				—				1,179
Balance at June 30, 2020			17,741,008				16,655				250,000			$	177			$	-			$	3			$	571,974			$	(146,136	)		$	426,018

1.	Description of Business

Company Name (1)	Fleet	Country of Incorporation	Vessel  Name	Capacity in TEUs  (2)	Year Built	Earliest  Charter Expiry Date
Global Ship Lease 54 LLC	GSL	Liberia	CMA CGM Thalassa	11,040	2008	4Q25
Laertis Marine LLC	Poseidon	Marshall Islands	UASC Al Khor	9,115	2015	1Q22
Telemachus Marine LLC	Poseidon	Marshall Islands	Anthea Y	9,115	2015	3Q20
Penelope Marine LLC	Poseidon	Marshall Islands	Maira XL	9,115	2015	3Q20
Global Ship Lease 53 LLC	GSL	Liberia	MSC Tianjin	8,603	2005	2Q24
Global Ship Lease 52 LLC	GSL	Liberia	MSC Qingdao	8,603	2004	2Q24
Global Ship Lease 43 LLC	GSL	Liberia	GSL Ningbo	8,603	2004	3Q20
Global Ship Lease 30 Limited	—	Marshall Islands	GSL Eleni	7,847	2004	3Q24(3)
Global Ship Lease 31 Limited	—	Marshall Islands	GSL Kalliopi	7,847	2004	4Q22(3)
Global Ship Lease 32 Limited	—	Marshall Islands	GSL Grania	7,847	2004	4Q22(3)
Alexander Marine LLC	Poseidon	Marshall Islands	Mary	6,927	2013	3Q23
Hector Marine LLC	Poseidon	Marshall Islands	Kristina	6,927	2013	2Q24
Ikaros Marine LLC	Poseidon	Marshall Islands	Katherine	6,927	2013	1Q24
Philippos Marine LLC	Poseidon	Marshall Islands	Alexandra	6,927	2013	1Q24
Aristoteles Marine LLC	Poseidon	Marshall Islands	Alexis	6,882	2015	1Q24
Menelaos Marine LLC	Poseidon	Marshall Islands	Olivia I	6,882	2015	1Q24
Global Ship Lease 23 Limited	GSL	Hong Kong	CMA CGM Berlioz	6,621	2001	2Q21
Leonidas Marine LLC	Poseidon	Marshall Islands	Agios Dimitrios	6,572	2011	4Q23
Global Ship Lease 35 LLC	—	Liberia	GSL Nicoletta	6,840	2002	3Q20(4)
Global Ship Lease 36 LLC	—	Liberia	GSL Christen	6,840	2002	3Q20(4)
Global Ship Lease 33 Limited	—	Liberia	GSL Vinia	6,080	2004	3Q24(5)
Global Ship Lease 34 Limited	—	Liberia	GSL Christel Elisabeth	6,080	2004	2Q24(5)
Tasman Marine LLC	Poseidon	Marshall Islands	Tasman	5,936	2000	1Q22(6)
Hudson Marine LLC	Poseidon	Marshall Islands	Dimitris Y	5,936	2000	2Q21
Drake Marine LLC	Poseidon	Marshall Islands	Ian H	5,936	2000	1Q21
Hephaestus Marine LLC	Poseidon	Marshall Islands	Dolphin II	5,095	2007	3Q20

1.	Description of Business (continued)

Company Name (1)	Fleet	Country of Incorporation	Vessel Name	Capacity in TEUs  (2)	Year Built	Earliest  Charter Expiry Date
Zeus One Marine LLC	Poseidon	Marshall Islands	Orca I	5,095	2006	3Q20(7)
Global Ship Lease 47 LLC	GSL	Liberia	CMA CGM Château d’If	5,089	2007	4Q20
GSL Alcazar Inc.	GSL	Marshall Islands	CMA CGM Alcazar	5,089	2007	4Q20
Global Ship Lease 50 LLC	GSL	Liberia	CMA CGM Jamaica	4,298	2006	3Q22
Global Ship Lease 49 LLC	GSL	Liberia	CMA CGM Sambhar	4,045	2006	3Q22
Global Ship Lease 51 LLC	GSL	Liberia	CMA CGM America	4,045	2006	3Q22
Global Ship Lease 26 Limited	GSL	Hong Kong	GSL Valerie	2,824	2005	3Q20
Pericles Marine LLC	Poseidon	Marshall Islands	Athena	2,762	2003	1Q21
Aris Marine LLC	Poseidon	Marshall Islands	Maira	2,506	2000	4Q20(8)
Aphrodite Marine LLC	Poseidon	Marshall Islands	Nikolas	2,506	2000	4Q20(8)
Athena Marine LLC	Poseidon	Marshall Islands	Newyorker	2,506	2001	1Q21(8)
Global Ship Lease 46 LLC	GSL	Liberia	La Tour	2,272	2001	4Q20
Global Ship Lease 38 LLC	GSL	Liberia	GSL Manet	2,272	2001	3Q20
Global Ship Lease 37 LLC	GSL	Liberia	GSL Matisse	2,262	1999	—
Global Ship Lease 39 LLC	GSL	Liberia	Utrillo	2,262	1999	—
Global Ship Lease 5 Limited	GSL	Cyprus	GSL Keta	2,207	2003	3Q20
Global Ship Lease 41 LLC	GSL	Liberia	Julie	2,207	2002	3Q20
Global Ship Lease 45 LLC	GSL	Liberia	Kumasi	2,207	2002	4Q20
Global Ship Lease 44 LLC	GSL	Liberia	Marie Delmas	2,207	2002	4Q20

2.	Summary of Significant Accounting Policies and Disclosures

(a)	Basis of Presentation

2.	Summary of Significant Accounting Policies and Disclosures (continued)

(b)	Principles of Consolidation

(c)	Use of estimates

(d)	Vessels in operation

2.	Summary of Significant Accounting Policies and Disclosures (continued)

(e)	Assets Held for Sale

2.	Summary of Significant Accounting Policies and Disclosures (continued)

(g)	Revenue recognition and related expense

(h)	Fair Value Measurement and Financial Instruments

(h)	Fair Value Measurement and Financial Instruments (continued)

(i)	Recent accounting pronouncements

3.	Vessels in Operation

		Vessel Cost, as adjusted for Impairment charges				Accumulated Depreciation				Net Book Value
As of January 1, 2019		$	1,224,377			$	(111,611	)		$	1,112,766
Additions			82,559				—				82,559
Depreciation			—				(39,739	)			(39,739	)
As of December 31, 2019		$	1,306,936			$	(151,350	)		$	1,155,586
Additions			27,624				—				27,624
Depreciation			—				(20,441	)			(20,441	)
Impairment loss			(43,803	)			35,306				(8,497	)
Transfers to Assets held for sale			(7,058	)			—				(7,058	)
As of June 30, 2020		$	1,283,699			$	(136,485	)		$	1,147,214

3.	Vessels in Operation (continued)

4.	Long-Term Debt

Facilities		June 30, 2020				December 31, 2019
2022 Notes		$	322,723			$	340,000
Less repurchase of Notes			(55,768	)			(17,277	)
2022 Notes (a)		$	266,955			$	322,723
2024 Notes (b)			58,958				39,765
Syndicated Senior Secured Credit Facility (CACIB, ABN, CIT, Siemens, Hellenic, CTBC, Bank Sinopac, Palatine) (c)			250,400				224,800
Blue Ocean Junior Credit Facility (d, p)			38,500				38,500
Deutsche, CIT, HCOB, Entrust, Blue Ocean Credit Facility (e)			156,571				164,710
Citi Credit Facility (f)			4,677				12,077
Hayfin Credit Facility (g)			6,703				7,129
Hellenic Bank Credit Facility (h)			53,700				57,700
Chailease Credit Facility (i)			8,532				—
DVB Credit Facility (j)			—				45,445
Total		$	844,996			$	912,849
Less: Current portion of 2022 Notes (a)			(27,923	)			(27,923	)
Less: Current portion of long-term debt			(53,435	)			(59,609	)
Less: Original issue discount of 2022 Notes (a)			(1,493	)			(1,859	)
Less: Original issue discount of 2024 Notes (b)			(145	)			(6	)
Less: Deferred financing costs (r)			(13,143	)			(14,095	)
Non-current portion of Long-Term Debt		$	748,857			$	809,357

4.	Long-Term Debt (continued)

a)	9.875% First Priority Secured Notes due 2022

b)	8.00% Senior Unsecured Notes due 2024

4.	Long-Term Debt (continued)

c)	$268.0 Million Syndicated Senior Secured Credit Facility (CACIB, ABN, CIT, Siemens, Hellenic, CTBC, Bank Sinopac, Palatine)

●

$55,700 Credit Agricole Credit Facility with an outstanding balance of $50,961 as of September 19, 2019 (see note 4k).

●

$24,500 Blue Ocean Credit Facility with an outstanding balance of $23,652 as of September 19, 2019 (see note 4l).

●

$65,300 ABN AMRO Credit Facility with an outstanding balance of $61,595 as of September 19, 2019 (see note 4m).

●

$17,100 Amsterdam Trade Bank (“ATB”) Credit Facility with an outstanding balance of $12,600 as of September 19, 2019 (see note 4n).

●

$80,000 Credit Agricole Credit Facility with an outstanding balance of $75,500 as of September 19, 2019 (see note 4o).

●

$52,625 DVB Credit Facility with an outstanding balance of $44,366 as of February 12, 2020 (see note 4j).

d)	$38.5 Million Blue Ocean Junior Credit Facility

4.	Long-Term Debt (continued)

e)	$180.5 Million Deutsche, CIT, HCOB, Entrust, Blue Ocean Credit Facility

f)	$54.8 Million Citi Credit Facility

4.	Long-Term Debt (continued)

g)	$65.0 Million Hayfin Credit Facility

h)	$59.0 Million Hellenic Bank Credit Facility

i)	$9.0 Million Chailease Credit Facility

4.	Long-Term Debt (continued)

j)	$52.6 Million DVB Credit Facility

k)	$55.7 Million Credit Agricole Credit Facility

l)	$24.5 Million Blue Ocean Credit Facility

m)	$65.3 Million ABN AMRO Credit Facility

4.	Long-Term Debt (continued)

n)	$17.1 Million Amsterdam Trade Bank (“ATB”) Credit Facility

o)	$80.0 Million Credit Agricole Credit Facility

4.	Long-Term Debt (continued)

q)	Repayment Schedule

Payment due by period ended		Amount
June 30, 2021		$	81,376
June 30, 2022			212,139
June 30, 2023			245,198
June 30, 2024			37,835
June 30, 2025 and thereafter			268,448
		$	844,996

r)	Deferred Financing Costs

		June 30, 2020				December 31, 2019
Opening balance		$	14,095			$	9,299
Expenditures in the period			969				7,904
Amortization included within interest expense			(1,921	)			(3,108	)
Closing balance		$	13,143			$	14,095
Current portion			(18	)			—
Non current portion		$	13,125			$	14,095

s)	Debt covenants-securities

5.	Related Party Transactions

6.	Commitments and Contingencies

Period ending		Amount
June 30, 2021		$	213,252
June 30, 2022			176,340
June 30, 2023			120,289
June 30, 2024			81,088
Thereafter			21,945
Total minimum lease revenue, net of address commissions		$	612,915

7.	Share Capital

8.	Share-Based Compensation

	Restricted Stock Units
	Number of Units
			Management			Weighted Average Fair Value on Grant Date					Actual Fair Value on Vesting Date
Unvested as at January 1, 2019			—			$	—				—
Granted on January 2019			1,359,375				3.79				n/a
Unvested as at December 31, 2019			1,359,375			$	3.79				n/a
Vested for six months ended June 30, 2020			373,826				—				—
Unvested as at June 30, 2020			985,549			$	3.79				n/a

9.	Earnings per Share

		Six months ended June 30,
		2020				2019
Numerator:
Net income attributable to common shareholders			13,226				17,991
Undistributed income attributable to Series C participating preferred shares			(5,602	)			(10,181	)
Net income available to common shareholders, basic and diluted			7,624				7,810
Net income available to:
Class A, basic and diluted			7,624				7,810
Denominator:
Class A Common shares
Basic weighted average number of common shares outstanding			17,632,674				9,937,836
Plus weighted average number of RSUs with service conditions			97,954				74,606
Common share and common share equivalents, dilutive			17,730,628				10,012,442
Basic earnings per share:
Class A			0.43				0.79
Diluted earnings per share:
Class A			0.43				0.78
Series C Preferred Shares-basic and diluted earnings per share:
Undistributed income attributable to Series C participating preferred shares			5,602				10,181
Basic weighted average number of Series C Preferred shares outstanding, as converted			12,955,187				12,955,187
Plus weighted average number of RSUs with service conditions			71,970				97,259
Dilutive weighted average number of Series C Preferred shares outstanding, as converted			13,027,157				13,052,446
Basic earnings per share			0.43				0.79
Diluted earnings per share			0.43				0.78

10.	Subsequent events