14.

Derivative Financial Instruments

Interest rate swaps

Effective

October 17, 2014,

the Company entered into

one

interest rate swap with Eurobank – Ergasias S.A. (“Eurobank”) for a notional amount of

$10.0

million, in order to manage interest costs and the risk associated with changing interest rates of the Company’s loans. Under the terms of the swap, Eurobank made a quarterly payment to the Company equal to the

-month LIBOR while the Company paid an adjustable rate averaging

1.97%

(more specifically, the Company paid the fixed rate of

0.50%

until

November 28, 2016

then

0.95%

until

November 28, 2017

and then

3.55%

until

May 28, 2019)

based on the relevant notional amount.

The interest rate swap contract did

not

qualify for hedge accounting as of

December

31,

2018.

As of

December 31, 2019,

the Company had

interest rate swaps open positions.

Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2018	December 31, 2019

Interest rate swap contract	Current liabilities – Derivatives	41,435	-
Total derivative liabilities		41,435	-

Derivatives not designated as hedging instruments	Location of gain (loss) recognized	Year Ended December 31, 2017		Year Ended December 31, 2018		Year Ended December 31, 2019
Interest rate swap contract– Unrealized (loss) / gain	(Gain) / loss on derivativtes, net	(5,901	)	204,647		-
Interest rate swap contract - Realized gain / (loss)	Gain / (loss) on derivatives, net	19,071		(201,745	)	(2,885	)
Total net gain / (loss) on interest rate swap contract		13,170		2,902		(2,885	)

Freight Forward Agreements (“FFA”)

December 2017,

the Company entered into

three

FFA contracts on the Baltic Panamax Index (“BPI”) for the

first

three

calendar months of

2018,

totaling

days at an average time charter equivalent rate of

$11,000

per day.

The

contracts are settled on a monthly basis using the average of the BPI for the days of the month the BPI is published. The Company receives a payment if the average BPI for the month is below the contract rate equal to the difference of the contract rate less the average BPI for the month times the number of contract days sold; if the average BPI for the month is greater than the contract rate, the Company makes a payment equal to the difference of the average BPI for the month less the contract rate times the number of contract days sold. If the Company buys contracts previously sold (or the opposite) the Company receives or pays the difference of the

two

rates for the period covered by the contracts.

The FFA contracts did

not

qualify for hedge accounting. The Company follows guidance relating to “Fair value measurements” to calculate the fair value of the FFA contracts (see Note

FFA contracts not designated as hedging instruments	Location of gain (loss) recognized	Year Ended December 31, 2017		Year Ended December 31, 2018		Year Ended December 31, 2019
FFA contracts – Unrealized loss	Gain / (loss) on derivatives, net	(781	)	-			-
FFA contracts – Realized loss	Gain / (loss) on derivatives, net	-		(47,245	)		-
Total loss on FFA contracts		(781	)	(47,245	)		-