Recent Accounting Pronouncements (Tables)

6 Months Ended

Jun. 30, 2019

Operating lease right-of-use assets and lease liabilities as of June 30, 2019 and January 1, 2019 are as follows:



Description	Location in Balance Sheet	June 30, 2019		January 1, 2019 **
Assets:
Chartered-in contracts greater than 12 months *	Operating lease right-of-use assets	$	20,194,474	$	26,144,409
Office leases	Operating lease right-of-use assets	2,267,583		2,560,593
		$	22,462,057	$	28,705,002
Liabilities :
Chartered-in contracts greater than 12 months	Current portion of operating lease liabilities	$	11,547,210	$	13,802,149
Office leases	Current portion of operating lease liabilities	608,557		693,203
		$	12,155,767	$	14,495,352

Chartered-in contracts greater than 12 months	Operating lease liabilities	$	10,129,531	$	14,160,374
Office leases	Operating lease liabilities	1,659,026		1,867,390
		$	11,788,557	$	16,027,764

* The Company netted $1.8 million, which was previously recorded as fair value on time charters acquired in the Condensed Consolidated Balance Sheet as of December 31, 2018 against the Operating lease right-of-use asset upon adoption of ASC 842 on January 1, 2019.

** The Operating lease right-of-use asset and Operating lease liabilities represent the present value of lease payments for the remaining term of the lease. The discount rate used ranged from 5.05% to 6.08%. The weighted average discount rate used to calculate the lease liability was 5.49%.

Charter Hire Expense

The table below presents the components of the Company’s lease expenses and sub-lease income on a gross basis earned from chartered-in contracts greater than 12 months for the three and six months ended June 30, 2019:



Description	Location in Statement of Operations	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019

Lease expense for chartered-in contracts less than 12 months	Charter hire expenses	$	7,684,182	$	16,044,965
Lease expense for chartered-in contracts greater than 12 months	Charter hire expenses	3,495,298		6,626,421
		$	11,179,480	$	22,671,386

Lease expense for office leases	General and administrative expenses	$	177,356	$	355,356

Sub lease income from chartered-in contracts greater than 12 months *	Revenues, net	$	2,759,065	$	5,841,817

* The sub-lease income represents only time charter revenue earned on the chartered-in contracts greater than 12 months. There is additional revenue of $0.2 million and $1.0 million, respectively, earned from voyage charters on the same chartered-in contracts which is recorded in Revenues, net in our Statement of Operations in the condensed consolidated financial statements for the three and six months ended June 30, 2019. Additionally, there is revenue earned from time charters from chartered-in contracts less than 12 months which is included in Revenues, net in our Statement of Operations for the three and six months ended June 30, 2019.

Future Minimum Lease Payments

The table below provides the total amount of lease payments on an undiscounted basis on our chartered-in contracts and office leases greater than 12 months as of June 30, 2019:



Year	Chartered-in contracts greater than 12 months			Office leases			Total Operating leases

Discount rate upon adoption	5.37		%	5.80		%	5.48		%

Six months ending December 31, 2019	$	7,070,784		$	364,341		$	7,435,125
2020	9,867,731			733,874			10,601,605
2021	5,825,710			700,257			6,525,967
2022	—			483,048			483,048
2023	—			244,878			244,878
	$	22,764,225		$	2,526,398		$	25,290,623

Present value of lease liability	$	21,676,741		$	2,267,583		$	23,944,324

Lease liabilities - short term	$	11,547,210		$	608,557		$	12,155,767
Lease liabilities - long term	10,129,531			1,659,026			11,788,557
Total lease liabilities	$	21,676,741		$	2,267,583		$	23,944,324

Discount based on incremental borrowing rate	$	1,087,484		$	258,815		$	1,346,299

Schedule of Future Minimum Rental Payments for Operating Leases

The future minimum commitments under the leases for office space as of December 31, 2018 are as follows:



2019	$	714,794
2020	728,212
2021	707,630
2022	483,048
2023	244,878
Total	$	2,878,562

Disaggregation of Revenue

The following table shows the revenues earned from time charters and voyage charters for the three and six months ended June 30, 2019 and 2018:



	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018

Time charters	$	32,138,075	$	37,355,472	$	59,642,266	$	66,678,691
Voyage charters	37,253,240		37,583,228		87,138,646		87,630,618
	$	69,391,315	$	74,938,700	$	146,780,912	$	154,309,309