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. The lease 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 by cash collateral of $74,917 which amount is recorded as restricted cash in the accompanying consolidated balance sheets. Rent expense for all of our global locations 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 2015 includes 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 office agreement 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	$	576
2019	420
2020	420
2021	420
2022	420
Thereafter	209
Total	$	2,465

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. The Company 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 of operations, 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 the provision of shipping services for third party charterers with respect to the transportation of cargo to or from Myanmar. At the time of such apparent violations, the Company had a different senior operational management team. There can be no assurance that Office of Foreign Assets Control (“OFAC”) will not conclude that these past actions warrant 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 the agency’s review, consideration and determination regarding what action, if any, may be taken in resolution of this matter. The Company will continue to cooperate with the agency regarding this matter and cannot estimate when such review will be concluded. While the ultimate 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 or results of operations.

Other Commitments

On July 28, 2011, the Company entered into an agreement to charter in a 37,000 dwt newbuilding Japanese vessel that was delivered in October 2014 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 eighth year option. On May 10, 2017, the Company signed an agreement to cancel this existing time charter contract. The Company agreed to pay a lump sum termination 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 cancelled charter) 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 per day 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 of December 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 increase the commitments for the purpose of financing the acquisition of the vessel. The increase in the commitments was $8,600,000. Ultraco took delivery of the vessel in January 2018 and drew down $8.6 million.