Recent Accounting Pronouncements (Tables)

9 Months Ended

Sep. 30, 2020

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


Description	Location in Balance Sheet	September 30, 2020 (1)		December 31, 2019 (1)
Assets:
Chartered-in contracts greater than 12 months (2)	Operating lease right-of-use assets	$	9,171,817	$	18,442,965
Office leases	Operating lease right-of-use assets	1,497,614		1,967,072
Operating lease right-of-use assets		$	10,669,431	$	20,410,037

Liabilities:
Chartered-in contracts greater than 12 months	Current portion of operating lease liabilities	$	10,151,384	$	12,622,524
Office leases	Current portion of operating lease liabilities	696,929		633,454
Lease liabilities - current portion		$	10,848,313	$	13,255,978

Chartered-in contracts greater than 12 months	Operating lease liabilities	$	—	$	6,974,943
Office leases	Operating lease liabilities	793,917		1,326,850
Lease liabilities - noncurrent portion		$	793,917	$	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) During the second quarter of 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 nine months ended September 30, 2020.

Charter Hire Expense

The table below presents the components of the Company’s lease expenses and sublease income on a gross basis earned from chartered-in contracts greater than 12 months for the three and nine months ended September 30, 2020 and 2019.


		Three Months Ended				Nine Months Ended
Description	Location in Statement of Operations	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Lease expense for chartered-in contracts less than 12 months	Charter hire expenses	$	2,560,224	$	7,977,490	$	6,348,081	$	24,022,456
Lease expense for chartered-in contracts greater than 12 months	Charter hire expenses	2,500,279		3,368,125		9,472,728		9,994,546
		$	5,060,503	$	11,345,615	$	15,820,809	$	34,017,002
Lease expense for office leases	General and administrative expenses	185,525		182,171		548,349		537,527
Sublease income from chartered-in contracts greater than 12 months *	Revenues, net	$	1,308,833	$	1,353,020	$	6,598,871	$	7,194,837

* The sublease income represents only time charter revenue earned on the chartered-in contracts with terms more 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 nine months ended September 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 September 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		%

Three months ending December 31, 2020	$	3,287,395		$	185,525		$	3,472,920
2021	6,982,810			700,257			7,683,067
2022				483,048			483,048
2023				244,878			244,878
	$	10,270,205		$	1,613,708		$	11,883,913

Present value of lease liability	$	10,151,384		$	1,490,846		$	11,642,230

Lease liabilities - short term	$	10,151,384		$	696,929		$	10,848,313
Lease liabilities - long term	—			793,917			793,917
Total lease liabilities	$	10,151,384		$	1,490,846		$	11,642,230

Discount based on incremental borrowing rate	$	118,821		$	122,862		$	241,683

Disaggregation of Revenue

The following table shows the revenues earned from time charters and voyage charters for the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019

Time charters	$	25,279,434	$	37,086,461	$	73,798,878	$	96,728,727
Voyage charters	42,902,867		37,023,915		126,153,526		124,162,561
	$	68,182,301	$	74,110,376	$	199,952,404	$	220,891,288