Recent Accounting Pronouncements (Tables)

6 Months Ended

Jun. 30, 2020

Operating lease right-of-use assets and lease liabilities as of June 30, 2020 and December 31, 2019 are as follows:


Description	Location in Balance Sheet	June 30, 2020 ⁽¹⁾		December 31, 2019⁽¹⁾
Assets:
Chartered-in contracts greater than 12 months ⁽²⁾	Operating lease right-of-use assets	$	12,125,541	$	18,442,965
Office leases	Operating lease right-of-use assets	1,659,026		1,967,072
		$	13,784,567	$	20,410,037
Liabilities:
Chartered-in contracts greater than 12 months	Current portion of operating lease liabilities	$	11,853,335	$	12,622,524
Office leases	Current portion of operating lease liabilities	658,455		633,454
Lease liabilities - current portion		$	12,511,790	$	13,255,978

Chartered-in contracts greater than 12 months	Operating lease liabilities	$	1,441,411	$	6,974,943
Office leases	Operating lease liabilities	1,000,571		1,326,850
Lease liabilities - noncurrent portion		$	2,441,982	$	8,301,793

⁽¹⁾ The Operating lease right-of-use assets 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 5.50%.

⁽²⁾As of June 30, 2020, the Company determined that there were impairment indicators present for one of our chartered-in vessel contracts and, as a result, we recorded an operating lease impairment of $0.4 million. The operating lease impairment was included as a component of Operating (loss)/income in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020.

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, 2020 and 2019.


		Three Months Ended						Six Months Ended
Description	Location in Statement of Operations	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Lease expense for chartered-in contracts less than 12 months	Charter hire expenses	$	1,644,173	$	7,684,182	$	4,389,586	$	16,044,965
Lease expense for chartered-in contracts greater than 12 months	Charter hire expenses	3,075,194		3,495,298		6,370,720		6,626,421
		$	4,719,367	$	11,179,480	$	10,760,306	$	22,671,386
Lease expense for office leases	General and administrative expenses	181,412		177,356		362,824		355,356
Sub lease income from chartered-in contracts greater than 12 months *	Revenues, net	$	1,292,814	$	2,759,065	$	5,290,038	$	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 earned from voyage charters on the same chartered-in contracts which is recorded in Revenues, net in our Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 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, 2020:


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, 2020	$	6,585,809		$	371,050		$	6,956,859
2021	6,982,810			700,256			7,683,066
2022	—			483,048			483,048
2023	—			244,878			244,878
	$	13,568,619		$	1,799,232		$	15,367,851

Present value of lease liability	$	13,294,746		$	1,659,026		$	14,953,772

Lease liabilities - short term	$	11,853,335		$	658,455		$	12,511,790
Lease liabilities - long term	1,441,411			1,000,571			2,441,982
Total lease liabilities	$	13,294,746		$	1,659,026		$	14,953,772

Discount based on incremental borrowing rate	$	273,873		$	140,206		$	414,079

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, 2020 and 2019:


	Three Months Ended						Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019

Time charters	$	20,506,088	$	32,138,075	$	48,336,563	$	59,642,266
Voyage charters	36,885,696		37,253,240		83,433,540		87,138,646
	$	57,391,784	$	69,391,315	$	131,770,103	$	146,780,912