13 - LEASES

Effective April 4, 2011, the Company entered into a seven-year sub-sublease agreement for its main office in New York, New York. The term of the sub-sublease commenced June 1, 2011, with a free base rental period until October 31, 2011. Following the expiration of the free base rental period, the monthly base rental payments were $82 per month until May 31, 2015 and thereafter were $90 per month until the end of the seven-year term. Pursuant to the sub-sublease agreement, the sublessor was obligated to contribute $472 toward the cost of the Company’s alterations to the sub-subleased office space. The Company has also entered into a direct lease with the over-landlord of such office space that commenced immediately upon the expiration of such sub-sublease agreement, for a term covering the period from May 1, 2018 to September 30, 2025; the direct lease provided for a free base rental period from May 1, 2018 to September 30, 2018. Following the expiration of the free base rental period, the monthly base rental payments are $186 per month from October 1, 2018 to April 30, 2023 and $204 per month from May 1, 2023 to September 30, 2025. For accounting purposes, the sub-sublease agreement and direct lease agreement with the landlord constitute one lease agreement.

In addition, during October 2017 the Company entered into a lease for office space in Singapore that expired in January 2019. A lease was signed for a new office space in Singapore effective January 17, 2019 for a three-year term.

Lastly, during July 2018, the Company entered into a lease for office space in Copenhagen, which commenced on July 1, 2018 and ended on April 30, 2019. A lease was signed for a new office space in Copenhagen effective May 1, 2019 for a minimum period ending May 1, 2023.

The Company adopted ASC 842 using the transition method on January 1, 2019 and has identified these leases as operating leases. Variable rent expense, such as utilities and escalation expenses, are excluded from the determination of the operating lease liability, as the Company has deemed these insignificant. The Company used its incremental borrowing rate as the discount rate under ASC 842 since the rate implicit in the lease cannot be readily determined.

On June 14, 2019, the Company entered into a sublease agreement for a portion of the leased space for its main office in New York, New York that commenced on July 26, 2019 and will end on September 29, 2025. There is a free base rental period for the first four and a half months commencing on July 26, 2019. Following the expiration of the free base rental period, the monthly base sublease income will be $102 per month until September 29, 2025. The sublease income for the portion of the leased space is less than the lease payments due for the space, which has been identified as an indicator of impairment under ASC 360. As such, the right-of-use asset for the subleased portion of the space was written down to its fair value during the second quarter of 2019 which resulted in $223 of impairment charges which was recorded in Impairment of right-of-asset in the Condensed Consolidated Statements of Operation during the three months ended June 30, 2019. Sublease income is recorded net with the total operating lease costs in General and administrative expenses in the Condensed Consolidated Statements of Operation. There was $306 of sublease income recorded during the three months ended March 31, 2020. There was no sublease income recorded during the three months ended March 31, 2019.

Total operating lease costs recorded during the three months ended March 31, 2020 and 2019 were $483 and $452, respectively, which was recorded in General and administrative expenses in the Condensed Consolidated Statements of Operations.

Supplemental Condensed Consolidated Balance Sheet information related to the Company’s operating leases as of March 31, 2020 are as follows:


	March 31,
	2020
Operating Lease:
Operating lease right-of-use asset	$	7,904

Current operating lease liabilities	$	1,698
Long-term operating lease liabilities		9,393
Total operating lease liabilities	$	11,091

Weighted average remaining lease term (years)		5.50
Weighted average discount rate		5.15	%

Maturities of operating lease liabilities as of March 31, 2020 are as follows:


	March 31,
	2020
Remainder of 2020	$	1,672
2021		2,230
2022		2,230
2023		2,378
2024		2,453
Thereafter		1,839
Total lease payments		12,802
Less imputed interest		(1,711)
Present value of lease liabilities	$	11,091

Supplemental Condensed Consolidated Cash Flow information related to leases are as follows:


	For the Three Months Ended
	March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating lease	$	557	$	557

During the second quarter of 2018, the Company began chartering-in third-party vessels. Under ASC 842, the Company is the lessee in these agreements. The Company has elected the practical expedient under ASC 842 to not recognize right-of-use assets and lease liabilities for short-term leases. During the three months ended March 31, 2020 and 2019, all charter-in agreements for third-party vessels were less than twelve months and considered short-term leases. Refer to Note 2 — Summary of Significant Accounting Policies for the charter hire expenses recorded during the three months ended March 31, 2020 and 2019 for these charter-in agreements.