Note 9. Commitments and Contingencies

Vessel Technical Management Contract

The Company has technical management agreements for some of its vessels with independent technical managers. For the Predecessor, the Company paid average monthly technical management fees of $13,994 per vessel for the period from January 1 to October 15 in 2014, $11,901 for year ended December 31, 2013. For the Successor, the Company paid average monthly technical management fees of $10,920 per vessel in 2015 and $11,041 per vessel for the period from October 16, 2014 to December 31, 2014.

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 $74,918 which amount is recorded as restricted cash in the accompanying balance sheets. In September 2014, the Company entered into a lease office agreement in Singapore, the lease expires in October 2016. During the period from January 1 to October 15, 2014 and during the year ended December 31, 2013, the Predecessor recorded rent expense of $1,061,608 and $1,319,380, respectively. Rent expense recorded by the Successor for the year ended December 31, 2015 was $2,591,489 including lease termination fees of $1,334,301 on its existing office space in New York, New York and the period from October 16 to December 31, 2014 was $272,365.

F- 26

The future minimum commitments under the leases for office space as of December 31, 2015 are as follows:

2016	$	338,398
2017		415,957
2018		429,376
2019		442,794
Thereafter		1,653,769
Total	$	3,280,294

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 (formerly Burma). At the time of such apparent violations, the Company had a different senior operational management team. There can be no assurance that 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 October 14, 2015, the Company entered into a lease termination and surrender agreement for the New York office space effective on March 31, 2016. Under the agreement the Company will pay $1.3 million as an early termination fee. As of December 31, 2015, $1.2 million has been paid and $0.1 million has been accrued.