Diana Shipping - 20-F annual report 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.

20549

FORM

20-F

(Mark One)

☐

REGISTRATION STATEMENT

PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☑

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended

December 31, 2023

OR

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report:

Not applicable

For the transition period from ___________________________

to ___________________________

Commission file number

001-32458

DIANA SHIPPING INC.

____________________________________________________________________________________________________________________________________________________________________________________________________________

(

Exact name of Registrant as specified in its charter)

Diana Shipping Inc.

____________________________________________________________________________________________________________________________________________________________________________________________________________

(Translation of Registrant’s

name into English)

Republic of the Marshall Islands

____________________________________________________________________________________________________________________________________________________________________________________________________________

(Jurisdiction of incorporation or organization)

Pendelis 16

,

175 64 Palaio Faliro

,

Athens

,

Greece

____________________________________________________________________________________________________________________________________________________________________________________________________________

(Address of principal executive offices)

Mr. Ioannis Zafirakis

Pendelis 16, 175 64 Palaio Faliro,

Athens, Greece

Tel:

+

30

-

210

-

9470-100

, Fax: +

30-210-9470-101

E-mail:

izafirakis@dianashippinginc.com

____________________________________________________________________________________________________________________________________________________________________________________________________________

(Name, Telephone, E-mail and/or

Facsimile number and Address of Company Contact Person)

Securities registered or to be

registered pursuant

to Section 12(b) of the Act.

Title of each class

Trading

Symbol(s)

Name of each exchange on which

registered

Common Stock, $0.01 par value including the Preferred Stock Purchase Rights

DSX

New York Stock Exchange

8.875% Series B Cumulative Redeemable Perpetual Preferred Shares, $0.01 par value

DSXPRB

New York Stock Exchange

Warrants to Purchase Common Stock, Expiring on or about December 14, 2026

DSX WS

New York Stock Exchange

Securities registered or to be registered pursuant

to Section 12(g) of the Act.

None

____________________________________________________________________________________________________________________________________________________________________________________________________________

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section

15(d) of the Act.

None

____________________________________________________________________________________________________________________________________________________________________________________________________________

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock

as of the close of the period covered by

the annual report.

As of December 31, 2023, there were

113,065,725

shares of the registrant’s

common stock outstanding

Indicate by check mark if the registrant is a well-known seasoned issuer,

as defined in Rule 405 of the Securities Act.

☐

Yes

☑

No

If this report is an annual or transition report, indicate by check mark if the registrant

is not required to file reports pursuant to Section 13

or 15(d) of the Securities Exchange Act of 1934.

☐

Yes

☑

No

Note – Checking the box above will not relieve any registrant

required to file reports pursuant to Section 13 or

15(d) of the Securities

Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required

to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required

to file such reports), and (2) has

been subject to such filing requirements for the past 90 days.

☑

Yes

☐

No

Indicate by check mark whether the registrant has submitted electronically

every Interactive Data File required to

be submitted pursuant to

Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant

was

required to submit such files).

☑

Yes

☐

No

Indicate by check mark whether the registrant is a large accelerated

filer, an accelerated filer,

a non-accelerated filer,

or an emerging

growth company.

See definition of “large accelerated filer”,

“accelerated filer” and "emerging growth company" in Rule 12b-2 of the

Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Emerging growth company

☐

If an emerging growth company that prepares its financial statements

in accordance with U.S. GAAP,

indicate by check mark if the

registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards†

provided pursuant to Section 13(a) of the Exchange Act. □

† The term “new or revised financial accounting standard” refers

to any update issued by the Financial Accounting Standards

Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation

to its management’s assessment of the

effectiveness of its internal control

over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the

registered public accounting firm that prepared or issued its audit report.

☑

If securities are registered pursuant to Section 12(b) of the Act, indicate

by check mark whether the financial statements of the

registrant included in the filing reflect the correction of an error to

previously issued financial statements.

☐

Indicate by check mark whether any of those error corrections are restatements

that required a recovery analysis of incentive-

based compensation received by any of the registrant’s

executive officers during the relevant recovery

period pursuant to §240.10D-

1(b).

☐

Indicate by check mark which basis of accounting the registrant has used to

prepare the financial statements included in this

filing:

U.S. GAAP

☑

International Financial Reporting Standards as issued

Other

☐

by the International Accounting Standards Board □

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement

item the registrant has

elected to follow.

☐

Item 17

☐

Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company

(as defined in Rule 12b-2 of the Exchange Act).

☐

Yes

☑

No

(APPLICABLE ONLY TO

ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required

to be filed by Sections 12, 13 or 15(d) of the

Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐

Yes

☐

No

4

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

5

PART I

Item 1.

Identity of Directors, Senior Management and Advisers

8

Item 2.

Offer Statistics and Expected Timetable

8

Item 3.

Key Information

8

Item 4.

Information on the Company

43

Item 4A.

Unresolved Staff Comments

68

Item 5.

Operating and Financial Review and Prospects

68

Item 6.

Directors, Senior Management and Employees

85

Item 7.

Major Shareholders and Related Party Transactions

93

Item 8.

Financial Information

98

Item 9.

The Offer and Listing

99

Item 10.

Additional Information

100

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

109

Item 12.

Description of Securities Other than Equity Securities

110

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

111

Item 14.

Material Modifications to the Rights of Security Holders and Use of Proceeds

111

Item 15.

Controls and Procedures

111

Item 16A.

Audit Committee Financial Expert

112

Item 16B.

Code of Ethics

112

Item 16C.

Principal Accountant Fees and Services

112

Item 16D.

Exemptions from the Listing Standards for Audit Committees

113

Item 16E.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

113

Item 16F.

Change in Registrant’s Certifying Accountant

113

Item 16G.

Corporate Governance

114

Item 16H.

Mine Safety Disclosure

115

Item 16I.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

115

Item 16J.

Insider Trading Policies

115

115

117

117

117

5

FORWARD-LOOKING STATEMENTS

Matters

discussed

in

this

annual

report

and

the

documents

incorporated

by

reference

may

constitute

forward-looking

statements.

The

Private

Securities

Litigation

Reform

Act

of

1995

provides

safe

harbor

protections

for

forward-looking

statements

in

order

to

encourage

companies

to

provide

prospective

information about

their business.

Forward-looking statements

include, but

are not

limited to,

statements

concerning plans, objectives, goals,

strategies, future events

or performance, underlying

assumptions and

other statements, which are other than statements of historical facts.

Diana Shipping

Inc., or

the Company, desires

to take

advantage of

the safe

harbor provisions

of the

Private

Securities Litigation Reform Act of

1995 and is including this

cautionary statement in connection with this

safe harbor legislation.

This document and any other written or oral statements made by the Company

or

on its behalf may include forward-looking statements, which reflect its current views with respect to future

events and financial performance, and

are not intended to

give any assurance as to

future results. When

used in this document, the words “believe”,

“anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,”

“potential,”

“will,”

“may,”

“should,”

“expect,”

“targets,”

“likely,”

“would,”

“could,”

“seeks,”

“continue,”

“possible,”

“might,”

“pending,”

and

similar

expressions,

terms

or

phrases

may

identify

forward-looking

statements.

Please note in this annual report, “we”,

“us”, “our” and “the Company” all refer to

Diana Shipping Inc. and

its subsidiaries, unless otherwise indicated.

The forward-looking statements in

this document are based

upon various assumptions,

many of which are

based,

in

turn,

upon

further

assumptions,

including

without

limitation,

management’s

examination

of

historical

operating

trends,

data

contained

in

its

records

and

other

data

available

from

third

parties.

Although the

Company believes that

these assumptions

were reasonable when

made, because

these assumptions are inherently

subject to significant uncertainties and

contingencies which are difficult

or impossible to predict and are beyond its control, the

Company cannot assure you that it will achieve or

accomplish these expectations, beliefs or projections.

Such

statements

reflect

the

Company’s

current

views

with

respect

to

future

events

and

are

subject

to

certain risks,

uncertainties and

assumptions. Should

one or

more of

these risks

or uncertainties

materialize,

or should underlying assumptions prove

incorrect, actual results may vary

materially from those described

herein as anticipated, believed,

estimated, expected or

intended. The Company

is making investors

aware

that such forward-looking

statements, because

they relate to

future events, are

by their very

nature subject

to many important factors that could cause actual results

to differ materially from those contemplated.

In addition

to these important

factors and

matters discussed

elsewhere herein,

including under

the heading

"Item

3.

Key

Information—D.

Risk

Factors,"

and

in

the

documents

incorporated

by

reference

herein,

important factors that, in

its view, could cause actual results

to differ materially from

those discussed in

the

forward-looking statements include, but are not limited to:

●

the strength of world economies;

●

fluctuations in currencies,

interest rates, and inflationary pressures;

●

general market conditions, including fluctuations in charter hire rates

and vessel values;

●

changes in demand in the dry-bulk shipping industry;

●

changes

in

the

supply

of

vessels,

including

when

caused

by

new

newbuilding

vessel

orders

or

changes to or terminations of existing orders, and vessel scrapping

levels;

6

●

changes

in

the

Company's operating

expenses, including

bunker

prices, crew

costs,

drydocking

and insurance costs;

●

the Company’s future operating or financial results;

●

availability

of

financing

and

refinancing

and

changes

to

the

Company’s

financial

condition

and

liquidity, including the Company’s

ability to pay

amounts that

it owes and

obtain additional

financing

to fund capital expenditures,

acquisitions and other

general corporate activities

and the Company’s

ability to

obtain financing

and comply

with the

restrictions and

other covenants in

the Company’s

financing arrangements;

●

changes in governmental rules and regulations or actions taken by

regulatory authorities;

●

potential liability from pending or future litigation;

●

compliance with governmental, tax, environmental and safety regulation, any non-compliance with

the U.S.

Foreign Corrupt Practices

Act of

1977 (FCPA)

or other

applicable regulations relating

to

bribery;

●

the failure of counter-parties to fully perform their contracts with the Company;

●

the Company’s dependence on key personnel;

●

adequacy of insurance coverage;

●

the volatility of the price of the Company’s common shares;

●

the Company’s incorporation under the

laws of the Marshall

Islands and the different rights

to relief

that may be available compared to other countries, including the United

States;

●

general domestic and international political conditions or labor disruptions;

●

the impact of port or canal congestion or disruptions;

●

any continuing

impacts of

coronavirus (COVID-19)

or other

global or

regional pandemics

and its

impact in the dry-bulk shipping industry;

●

potential physical

disruption of

shipping routes

due to

accidents, climate-related

reasons (acute

and

chronic), political events, public health threats, international

hostilities and instability, piracy or acts

by terrorists; and

●

other

important factors

described from

time to

time

in the

reports filed

by the

Company with

the

Securities and

Exchange Commission,

or the

SEC, including

those factors

discussed in

“Item 3.

Key

Information-

D.

Risk

Factors” in

this

Annual Report

on

Form

20-F

and

the

New

York

Stock

Exchange, or the NYSE.

This report may

contain assumptions,

expectations, projections,

intentions and

beliefs about future

events.

These statements are intended as forward-looking statements.

The Company may also from time

to time

make forward-

looking statements

in other

documents and

reports that

are filed

with or

submitted to

the

Commission, in

other information sent

to the

Company’s security

holders, and in

other written materials.

The Company

also cautions

that assumptions,

expectations, projections,

intentions and

beliefs about

future

events

may

and

often

do

vary

from

actual

results

and

the

differences

can

be

material.

The

Company

7

undertakes no

obligation to

publicly update

or revise

any forward-looking

statement contained

in this

report,

whether as a result of new information, future events or otherwise,

except as required by law.

8

PART I

Item 1.

Identity of Directors, Senior Management and Advisers

Not Applicable.

Item 2.

Offer Statistics and Expected Timetable

Not Applicable.

Item 3.

Key Information

A.

[Reserved]

B.

Capitalization and Indebtedness

Not Applicable.

C.

Reasons for the Offer and Use of Proceeds

Not Applicable.

D.

Risk Factors

Summary of Risk Factors

The below bullets summarize the principal risk factors related

to an investment in our Company.

Industry Specific Risk Factors

●

Charter hire rates

for dry bulk

vessels are

volatile and

have fluctuated

significantly in

the

past years, which may adversely affect

our earnings, revenues and profitability and our

ability to comply with our loan covenants.

●

The current

state of

the global

financial markets

and economic

conditions may

adversely

impact

our

ability

to

obtain

additional

financing

on

acceptable

terms

and

otherwise

negatively impact our business.

●

Our operating results may be affected by seasonal fluctuations.

●

An increase in the price of fuel, or bunkers, may adversely affect our

profits.

●

We

are

subject

to

complex laws

and

regulations, including

environmental regulations

that can adversely affect the cost, manner or feasibility of doing business.

9

●

Increased inspection

procedures, tighter

import

and export

controls and

new

security

regulations could increase costs and disrupt our business.

●

Operational risks and damage to our vessels could adversely

impact our performance.

●

If

our

vessels

call

on

ports

located

in

countries

or

territories

that

are

the

subject

of

sanctions

or

embargoes

imposed

by

the

U.S.

government,

the

European

Union,

the

United

Nations,

or

other

governmental

authorities,

it

could

lead

to

monetary

fines

or

penalties and may adversely affect our reputation and the market for

our securities.

●

We

conduct business

in China,

where the

legal system

is not

fully developed

and has

inherent uncertainties that could limit the legal protections available

to us.

●

Failure

to

comply

with

the

U.S.

Foreign

Corrupt

Practices

Act

could

result

in

fines,

criminal penalties and an adverse effect on our business.

●

Changing laws and

evolving reporting requirements

could have an

adverse effect on

our

business.

Company Specific Risk Factors

●

The market

values of

our vessels could

decline, which could

limit the

amount of

funds

that we can borrow and could trigger breaches of certain financial covenants contained

in

our

loan

facilities,

which

could

adversely

affect

our

operating

results,

and

we

may

incur a loss if we sell vessels following a decline in their market values.

●

We

charter

some

of

our

vessels

on

short-term

time

charters

in

a

volatile

shipping

industry and a decline

in charter hire rates

could affect our results

of operations and

our

ability to pay dividends.

●

Rising crew costs could adversely affect our results of operations.

●

Our investment in

Diana Wilhelmsen Management

Limited may expose us

to additional

risks.

●

A cyber-attack could materially disrupt our business.

●

Climate change

and greenhouse

gas restrictions

may adversely

impact our

operations

and markets.

●

Increasing scrutiny and

changing expectations

from investors,

lenders and other

market

participants

with

respect

to

our

ESG

policies

may

impose

additional

costs

on

us

or

expose us to additional risks.

●

Our earnings may be

adversely affected if we

are not able to

take advantage of favorable

charter rates.

●

Investment in derivative instruments such as forward

freight agreements could result in

losses.

●

We cannot

assure you that

we will be

able to borrow

amounts under loan

facilities and

restrictive covenants in our loan facilities impose financial and

other restrictions on us.

10

●

We

are

subject

to

certain

risks

with

respect

to

our

counterparties

on

contracts,

and

failure of such

counterparties to meet

their obligations could

cause us to

suffer losses

or otherwise adversely affect our business.

●

In the highly competitive

international shipping industry, we

may not be able

to compete

for charters with new entrants or established companies with greater resources, and as

a result, we may be unable to employ our vessels profitably.

●

We may be unable

to attract and

retain key management

personnel and other

employees

in

the

shipping

industry,

which

may

negatively

impact

the

effectiveness

of

our

management and results of operations.

●

Technological

innovation and

quality and

efficiency requirements

from our

customers

could reduce our charter hire income and the value of our vessels.

●

We

may

not

have

adequate

insurance

to

compensate

us

if

we

lose

our

vessels

or

to

compensate third parties.

●

Our vessels

may suffer

damage and we

may face

unexpected drydocking costs,

which

could adversely affect our cash flow and financial condition.

●

The aging of our fleet may result in increased operating costs in the future, which could

adversely affect our earnings.

●

We

are exposed

to U.S.

dollar and

foreign currency

fluctuations and

devaluations that

could harm our reported revenue and results of operations.

●

We

depend upon

a few

significant customers

for

a large

part of

our revenues

and the

loss of

one or

more of

these customers

could adversely

affect our

financial performance.

●

We are a holding

company, and we depend

on the ability

of our subsidiaries

to distribute

funds to us in order to satisfy our financial obligations.

●

Because we

are organized under

the laws

of the

Marshall Islands, it

may be

difficult to

serve

us

with

legal

process

or

enforce

judgments

against

us,

our

directors

or

our

management.

●

If we expand our

business further, we

may need to improve our

operating and financial

systems and will need to recruit suitable employees and crew for our

vessels.

●

We may have to pay tax on U.S. source income, which would reduce

our earnings.

●

U.S. federal

tax authorities

could treat

us as

a “passive

foreign investment

company,”

which could have adverse U.S. federal income tax consequences

to U.S. shareholders.

Risks Relating to Our Common Stock

●

We cannot assure

you that our board

of directors will continue

to declare dividends on

shares of our common stock in the future.

●

The market

prices and trading

volume of our

shares of

common stock may

experience

rapid

and

substantial

price

volatility,

which

could

cause

purchasers

of

our

common

stock to incur substantial losses.

11

●

Since we are

incorporated in the

Marshall Islands,

which does not

have a well-developed

body

of

corporate

law,

you

may

have

more

difficulty

protecting

your

interests

than

shareholders of a U.S. corporation.

●

As

a

Marshall

Islands

corporation

and

with

some

of

our

subsidiaries

being

Marshall

Islands

entities

and

also

having

subsidiaries

in

other

offshore

jurisdictions,

our

operations may

be subject

to economic

substance requirements,

which could

impact our

business.

●

Certain existing shareholders will be able to exert

considerable control over matters on

which our shareholders are entitled to vote.

●

Future sales of our

common stock could

cause the market

price of our common

stock to

decline.

●

Our

Series

B

Preferred

Shares

are

senior

obligations

of

ours

and

rank

prior

to

our

common shares with respect

to dividends, distributions

and payments upon

liquidation,

which could have an adverse effect on the value of our common shares.

Risks Relating to Our Series B Preferred Stock

●

We may

not have sufficient

cash from our

operations to enable

us to pay

dividends on

our Series B Preferred

Shares following the payment

of expenses and

the establishment

of any reserves.

●

Our Series B

Preferred Shares are subordinate

to our indebtedness, and

your interests

could

be

diluted

by

the

issuance

of

additional

preferred

shares,

including

additional

Series B Preferred Shares, and by other transactions.

●

We may redeem the Series

B Preferred Shares, and you may not

be able to reinvest the

redemption price you receive in a similar security.

Risks Relating to Our Outstanding Warrants

●

The issuance of our common stock upon the exercise of our Warrants may depress our

stock price.

Some

of

the

following

risks

relate

principally

to

the

industry

in

which

we

operate

and

our

business

in

general. Other

risks relate

principally to

the securities

market and ownership

of our securities,

including our

common stock and our Series

B Preferred Shares. The

occurrence of any of the

events described in this

section could

significantly and

negatively affect

our business,

financial condition,

operating results,

cash

available for

the payment

of dividends

on our

shares and

interest on

our loan

facilities and

Bond, or

the

trading price of our securities.

Industry Specific Risk Factors

Charter

hire

rates

for

dry

bulk

vessels

are

volatile

and

have

fluctuated

significantly

in

the

past

years, which

may adversely

affect our earnings,

revenues and

profitability and

our ability

to comply

with our loan covenants.

Substantially all of our revenues

are derived from a single

market, the dry bulk segment,

and therefore our

financial results

are subject

to

cyclicality of

the

dry bulk

shipping industry

and any

attendant volatility

in

12

charter hire

rates and profitability. The

degree of

charter hire

rate volatility

among different types

of dry

bulk

vessels has

varied widely,

and time

charter and spot

market rates

for dry

bulk vessel

have in

the recent

past declined below

the operating costs

of vessels. When

we charter our

vessels pursuant

to spot or

short-

term time

charters, we

are exposed

to changes

in spot

market and

short-term charter

rates for

dry bulk

carriers and such changes

may affect our earnings

and the value

of our dry

bulk carriers at any

given time.

We cannot

assure you

that we

will be

able to

successfully charter

our vessels

in the

future or

renew existing

charters at

rates sufficient

to allow

us to

meet our

obligations

or pay

any dividends

in the

future. Fluctuations

in charter rates

result from changes

in the supply

of and demand

for vessel capacity

and changes in

the

supply

of

and

demand

for

the

major

commodities

carried

by

water

internationally.

Because

the

factors

affecting the supply

of and demand

for vessels are

outside of our

control and

are unpredictable,

the nature,

timing, direction

and degree

of changes

in industry

conditions are

also unpredictable.

A significant

decrease

in charter rates would

adversely affect our

profitability, cash flows and may

cause vessel values

to decline,

and,

as a

result, we

may have

to record

an impairment

charge in

our consolidated

financial statements

which could adversely affect our financial results.

In 2023, the period market for dry bulk vessels experienced

fluctuations influenced by various factors. Dry

bulk market conditions

remained volatile

reflecting the

impact of

war in

Ukraine, geopolitical

tensions, trade

policies,

and

environmental

regulations.

However,

there

were

regional

variations

in

market

conditions,

with China's demand

recovering and

some other

areas experiencing

stronger demand

due to

infrastructure

projects or agricultural exports.

Panama Canal and Suez

Canal disruptions during the

year surely affected

market

and

the

longer these

issues

go

on,

the

more

of

a

market support

it

will

be.

The markets

rallied

strongly at

the end

of last

year,

with the

Baltic Capesize

index rallying

to heights

which since

2010 was

only exceeded

in October

2021. The

Panamax, Ultramax,

Supramax and

Handysize indices

rallied to

levels

which since 2010 was exceeded only during most of 2021 and early 2022. Fundamentals maintain bullish

and can support a positive outlook for 2024 which as always are

subject to revisions.

Factors that influence demand for dry bulk vessel capacity include:

●

supply

of

and

demand

for

energy

resources,

commodities,

and

semi-finished

and

finished

consumer and industrial products;

●

changes in the exploration or production of

energy resources, commodities, and semi-finished

and finished consumer and industrial products;

●

the location of regional and global exploration, production and manufacturing

facilities;

●

the location

of consuming

regions for

energy resources,

commodities, and

semi-finished and

finished consumer and industrial products;

●

the globalization of production and manufacturing;

●

global and

regional economic

and political

conditions, armed

conflicts, including

the

ongoing

conflicts between Russia and Ukraine and Israel and Hamas, and fluctuations in industrial and

agricultural production;

●

disruptions and developments in international trade;

●

changes

in

seaborne

and

other

transportation

patterns,

including

the

distance

cargo

is

transported by

sea for

reasons including

but not

limited to

reductions in

canal capacities

and

geopolitical conflicts and military responses;

●

international sanctions, embargoes,

import and export

restrictions, nationalizations, piracy, and

terrorist attacks;

13

●

legal and regulatory changes including regulations

adopted by supranational authorities and/or

industry bodies, such as safety and environmental regulations and

requirements;

●

weather and acts of God and natural disasters;

●

environmental and other regulatory developments;

●

currency exchange rates, specifically versus USD; and

●

economic slowdowns caused by public health pandemics.

Demand for

our dry

bulk oceangoing

vessels is

dependent upon

economic

growth in

the world’s

economies,

seasonal and regional changes in

demand and changes to the

capacity of the global dry

bulk fleet and the

sources and supply for dry bulk cargo transported by sea. Continued adverse economic, political

or social

conditions

or

other

developments

could

negatively

impact

charter

rates

and

therefore

have

a

material

adverse effect on our business results, results of operations and ability to pay dividends.

Factors that influence the supply of dry bulk vessel capacity include:

●

the number of newbuilding orders and deliveries, including

slippage in deliveries;

●

the number of shipyards and ability of shipyards to deliver vessels;

●

port or canal congestion;

●

potential disruption,

including supply chain

disruptions, of

shipping routes due

to accidents

or

political events;

●

the scrapping of older vessels;

●

speed of vessel operation;

●

vessel casualties;

●

technological advances in vessel design and capacity;

●

the

degree

of

scrapping

or

recycling

of

older

vessels,

depending,

among

other

things,

on

scrapping or recycling rates and international scrapping or recycling

regulations;

●

the price of steel and vessel equipment;

●

product imbalances (affecting level of trading activity) and developments

in international trade;

●

the number

of vessels

that are

out of

service, namely

those that

are laid-up,

drydocked, awaiting

repairs or otherwise not available for hire;

●

availability of financing for new vessels and shipping activity;

●

changes

in

international

regulations

that

may

effectively

cause

reductions

in

the

carrying

capacity of vessels or early obsolescence of tonnage; and

14

●

changes

in

environmental

and

other

regulations

that

may

limit

the

useful

lives

and

trading

patterns of vessels.

In

addition

to

the

prevailing

and

anticipated

freight

rates,

factors

that

affect

the

rate

of

newbuilding,

scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices,

costs of

bunkers and

other operating

costs, costs

associated with

classification society

surveys, normal

maintenance and insurance coverage costs,

the efficiency and

age profile of the

existing dry bulk fleet

in

the

market

and

government

and

industry

regulation

of

maritime

transportation

practices,

particularly

environmental

protection

laws

and regulations.

These factors

influencing the

supply

of

and

demand

for

shipping capacity are outside of our

control, and we may not be able

to correctly assess the nature, timing

and degree of changes in industry conditions.

We anticipate that the future demand for our dry bulk carriers will be dependent upon economic growth in

the world’s economies, including China and India, seasonal and regional changes in demand, changes in

the capacity of the global

dry bulk carrier fleet

and the sources and

supply of dry bulk

cargo transported by

sea. While there has been a general decrease in new dry bulk carrier ordering

since 2014, the capacity of

the global

dry bulk

carrier fleet

could increase

and economic

growth may

not resume

in areas

that have

experienced

a

recession

or

continue

in

other

areas.

Adverse

economic,

political,

social

or

other

developments could have a material adverse effect on our business and operating

results.

In

addition,

the

conflict

between

Israel

and

Hamas,

which

began

in

October

2023,

has

resulted

in

an

increased

number

of

vessel

attacks

in

the

Red

Sea.

Various

shipping

companies

and/or

commercial

managers have indicated that their vessels

would avoid crossing the Red Sea

and consequently the Suez

Canal,

and

for

the

time

being

divert

vessels

around

southern

Africa’s

Cape

of

Good

Hope,

which

occasionally adds substantial

time and cost

to East-West voyages.

While we are

unable to ascertain

the

immediate impact of this conflict, any

further attacks or piracy attempts, or continued

diversion of vessels

from the Suez Canal, may affect our business, financial condition, and results of operations.

The current

state of

the global

financial markets

and economic

conditions may

adversely impact

our ability to obtain additional financing on acceptable terms and otherwise negatively impact our

business.

Global

financial

markets

can

be

volatile

and

contraction

in

available

credit

may

occur

as

economic

conditions change.

In recent

years, operating

businesses in

the global

economy have

faced

weakening

demand for

goods and

services, deteriorating

international liquidity

conditions, and

declining markets

which

lead

to

a

general

decline

in

the

willingness

of

banks

and

other

financial

institutions

to

extend

credit,

particularly in

the shipping industry. As

the shipping industry

is highly dependent

on the

availability of

credit

to finance and expand operations, it may be negatively affected by such

changes and volatility.

We face risks attendant to changes in economic environments, changes

in interest rates, and instability in

the

banking

and

securities

markets

around

the

world,

among

other

factors

which

may

have

a

material

adverse effect on our results

of operations and

financial condition and

may cause the price

of our common

shares to

decline. As

of December

31, 2023,

we had

total outstanding

indebtedness of

$517.0 million

under

our various credit facilities and bond and a further $133.3 million

of finance liabilities.

Global economic conditions may continue to negatively impact

the drybulk shipping industry.

Major market disruptions

and adverse changes

in market conditions

and regulatory climate

in China, the

United States, the European Union and

worldwide may adversely affect our business

or impair our ability

to borrow amounts under credit facilities or any future financial arrangements.

Chinese dry bulk imports have accounted

for the majority of global dry bulk

transportation growth annually

over the

last decade.

Accordingly,

our financial

condition and results

of operations,

as well

as our

future

15

prospects,

would

likely

be

hindered

by

an

economic

downturn

in

any

of

these

countries

or

geographic

regions. In recent

years China and

India have been

among the world’s

fastest growing economies

in terms

of gross

domestic product.

The growth

of China’s

economy has

slowed during

2023. A

continued

economic

slowdown

in

China

or

the

Asia

Pacific

region

or

in

India

may

adversely

affect

demand

for

seaborne

transportation of our

products and our

results of operations.

Moreover, any deterioration in the

economy of

the United States or the European Union, may further adversely affect economic

growth in Asia.

Economic growth is expected to slow, including due to supply-chain disruption, inflationary pressures and

related actions

by central

banks and

geopolitical conditions,

with a

significant risk

of recession

in many

parts

of

the

worlds

in

the

near

term.

In

particular,

an

adverse

change

in

economic

conditions

affecting

China, Japan, India or Southeast Asia generally could have a negative

effect on the drybulk market.

The dry bulk carrier charter market has improved but

remains significantly below its high in 2008,

which may affect

our revenues, earnings and

profitability, and our

ability to comply with

our loan

covenants.

The abrupt and

dramatic downturn in the

dry bulk charter

market until the

beginning of 2021,

from which

we

derive

substantially

all

of

our

revenues,

severely

affected

the

dry

bulk

shipping

industry

and

our

business. The

Baltic Dry

Index, or

the BDI,

a daily

average of

charter rates

for key

dry bulk

routes published

by the Baltic Exchange Limited, has long been viewed as the main benchmark to monitor the movements

of the dry bulk vessel charter market and the performance of the entire dry bulk shipping market. The BDI

declined

94%

in

2008

from

a

peak

of

11,793

in

May

2008

to

a

low

of

663

in

December 2008

and

has

remained volatile since then,

reaching a record low of

290 in February 2016. In

2023, the BDI ranged from

a low of 530 to

a high of 3,346 and

closed at 1,714 on April 2,

2024. There can be no

assurance that the

dry bulk charter market will not

decline further. The

decline and volatility in charter rates is

due to various

factors,

including

the

lack

of

trade

financing

for

purchases

of

commodities

carried

by

sea,

which

has

resulted in a significant decline in cargo shipments, and the excess supply of iron ore in China, which has

resulted in

falling iron

ore prices

and increased

stockpiles in

Chinese ports.

The decline

and volatility

in

charter rates in the dry bulk market also affects the value of our dry bulk vessels, which follows the trends

of dry bulk

charter rates, and earnings

on our charters,

and similarly,

affects our cash

flows, liquidity and

compliance with the covenants contained in our loan agreements.

Any

decline

in

the

dry

bulk

carrier

charter

market

may

have

additional

adverse

consequences

for

our

industry,

including

an

absence

of

financing

for

vessels,

no

active

secondhand

market

for

the

sale

of

vessels,

charterers

seeking

to

renegotiate

the

rates

for

existing

time

charters,

and

widespread

loan

covenant defaults in the dry bulk shipping

industry. Accordingly, the value of our common shares could be

substantially reduced or eliminated.

Worldwide inflationary

pressures could

negatively impact

our results

of operations

and cash

flows.

The

worldwide

economies

experienced

inflationary

pressures,

with

price

increases

seen

across

many

sectors

globally.

For

example,

the

U.S.

consumer

price

index,

an

inflation

gauge

that

measures costs across dozens of items was 6.5% in December 2022, driven in large

part by increases in

energy costs.

In December

2023, the

U.S. consumer

price index

dropped to

3.4% and

it remains

to

be

seen

whether

inflationary

pressures

will

increase

again

and

to

what

degree.

In

the

event

that

inflation

becomes a significant

factor in the

global economy

generally and in

the shipping

industry more specifically,

inflationary pressures would result in increased operating, voyage

and administrative costs. Furthermore,

the effects of

inflation on the supply and demand of

the products we transport could alter

demand for our

services. Interventions

in the

economy by

central banks

in response

to inflationary

pressures may

slow

down economic

activity,

including by

altering consumer

purchasing habits

and reducing

demand for

the

commodities and products we carry, and cause a reduction in trade. As a result, the volumes of goods

we

deliver and/or charter

rates for our

vessels may be

affected. Any of

these factors could

have an adverse

effect on our business, financial condition, cash flows and operating results.

16

Risks

associated

with

operating

ocean-going

vessels

could

affect

our

business

and

reputation,

which could have a material adverse effect on our results of operations and

financial condition.

The operation of ocean-going vessels carries inherent risks. These

risks include the possibility of:

●

marine disaster;

●

acts of God;

●

terrorism;

●

environmental accidents;

●

cargo and property losses or damage;

●

business

interruptions

caused

by

mechanical

failures,

human

error,

war,

political

action

in

various countries, labor strikes or adverse weather conditions; and

●

piracy or robbery.

In

addition,

international

shipping

is

subject

to

various

security

and

customs

inspection

and

in

countries of

origin

and

destination and

trans-shipment points.

Inspection

procedures can

result in the

seizure of the

cargo and/or our

vessels, delays in

the loading, offloading

or delivery and

the

levying

of

customs

duties,

fines

or

other

penalties

against

us.

It

is

possible

that

changes

to

inspection

procedures

could

impose

additional

financial

and

legal

obligations

on

us.

Furthermore,

changes

to

inspection procedures

could also

impose additional

costs and

obligations on

our customers

and may,

in

certain

cases,

render

the

shipment

of

certain

types

of

cargo

uneconomical

or

impractical.

Any

such

changes or developments may

have a material adverse

effect on our business, results

of operations, cash

flows, financial condition and available cash.

Our

operations outside

the

United States

expose us

to

global risks,

such as

political instability,

terrorist

or

other

attacks,

war,

international

hostilities

and

global

public

health

concerns,

which

may affect the seaborne transportation industry and adversely affect our business.

We are an international

shipping company and

primarily conduct most

of our operations

outside the United

States, and our business,

results of operations, cash

flows, financial condition and

ability to pay dividends,

if any, in the future may be adversely affected by changing economic, political and government conditions

in

the

countries and

regions where

our

vessels are

employed or

registered. Moreover,

we

operate in

a

sector of the economy that is likely to be adversely impacted by the effects of political

conflicts.

Currently, the world economy faces a number of challenges, including trade tensions between the

United States and China,

stabilizing growth in China, continuing threat

of terrorist attacks around

the world,

continuing instability and

conflicts and other

ongoing occurrences in

the Middle

East,

Ukraine, and in other geographic areas and countries, economic

sanctions restrictions.

In the

past, political

instability has

also resulted

in attacks

on vessels,

mining of

waterways and

other efforts

to disrupt international shipping, particularly in the Arabian Gulf region and most recently in the Black Sea

in connection with the

recent conflicts between

Russia and Ukraine,

and in the Red

Sea in connection

with

the conflict between Israel

and Hamas. Acts

of terrorism and piracy have

also affected vessels trading

in

regions

such

as

the

South

China

Sea

and

the

Gulf

of

Aden

off

the

coast

of

Somalia.

Any

of

these

occurrences could have

a material

adverse impact on

our future

performance, results of

operation, cash

flows and financial position.

17

Beginning

in

February

of

2022,

President

Biden

and

several

European

leaders

announced

various

economic sanctions against Russia in connection with the aforementioned conflicts in the Ukraine region,

which may adversely impact our business.

The United

States Department

of the

Treasury’s

Office

of Foreign

Assets Control

(“OFAC”)

administers

and

enforces

multiple

authorities

under

which

sanctions

have

been

imposed

on

Russia,

including:

the

Russian

Harmful

Foreign

Activities

sanctions

program,

established

by

the

Russia-related

national

emergency declared in

Executive Order (E.O.)

14024 and subsequently

expanded and addressed

through

certain

additional

authorities,

and

the

Ukraine-Russia-related

sanctions

program,

established

with

the

Ukraine-related national emergency

declared in E.O.

13660 and subsequently

expanded and addressed

through

certain additional

authorities.

The

United

States

has

also

issued

several

Executive Orders

that

prohibit

certain

transactions

Russia,

including

the

importation

of

certain

energy

products

of

Russian Federation origin

(including crude oil,

petroleum, petroleum fuels,

oils, liquefied

natural gas and

coal), and all new investments in Russian by U.S. persons, among

other prohibitions and export controls.

Furthermore, the United

States has also

prohibited a variety

of specified services related

to the maritime

transport

of

Russian

Federation

origin

crude

oil

and

petroleum

products,

including

trading/commodities

brokering, financing,

shipping, insurance

(including reinsurance

and protection

and indemnity),

flagging,

and customs brokering. These prohibitions

took effect on

December 5, 2022 with respect

to the maritime

transport

of

crude

oil

and

February

5,

2023

with

respect

to

the

maritime

transport

of

other

petroleum

products.

An exception exists

to permit such

services when the

price of the

seaborne Russian oil

does not

exceed the

relevant price

cap; but

implementation of

this price

exception relies

on a

recordkeeping and

attestation process that

allows each

party in

the supply chain

of seaborne Russian

oil to

demonstrate or

confirm that oil has been purchased

at or below the price cap.

Violations of the price cap policy

or the risk

that information,

documentation, or

attestations provided

by parties

in the

supply chain

are later

determined

to be false may pose additional risks adversely affecting our business.

While Ukraine

continued to

deploy a

number of

counter-attacks in

2023 and

as of

December 2023

held

important areas in ground operations, after over two years of fighting Russia still maintains a foothold in a

number

of

key

cities

and

areas.

The

ongoing

conflict

could

result

in

the

imposition

of

further

economic

sanctions

or

new

categories

of

export

restrictions

against

persons

in

or

connected

to

Russia.

While

in

general much uncertainty remains regarding the global impact of the

conflict in Ukraine, it is possible that

such tensions could adversely affect the Company’s

business, financial condition, results of

operation and

cash

flows.

Our

business

could

also

be

adversely

impacted

by

trade

tariffs,

trade

embargoes

or

other

economic sanctions that limit trading activities by the United States or other countries against countries in

the

Middle

East,

Asia

or

elsewhere

as

a

result

of

terrorist

attacks,

hostilities

or

diplomatic

or

political

pressures, including as a result of the current conflict between

Israel and Hamas.

Outbreaks

of

epidemic

and

pandemic

diseases

and

governmental

responses

thereto

could

adversely affect our business.

Our operations are subject to risks related to pandemics, epidemics or other infectious disease outbreaks

and

government

responses

thereto.

COVID-19,

which

was

initially

declared

a

pandemic

by

the

World

Health Organization on March 11, 2020 and was declared no longer a global

health emergency on May 5,

2023,

negatively

affected

economic

conditions,

supply

chains,

labor

markets,

and

demand

for

certain

shipped

goods

both

regionally

and

globally

as

a

result

of

government

efforts

to

combat

the

pandemic,

including

the

enactment

or

imposition

of

travel

bans,

quarantines

and

other

emergency

public

health

measures.

The

extent

to

which

our

business,

the

global

economy

and

dry

bulk

transportation

industry

may

be

negatively

affected

by

future

pandemics,

epidemics

or

other

outbreaks

of

infectious

diseases

is

highly

uncertain and will

depend on numerous evolving

factors that we

cannot predict, including, but

not limited

to (i) the duration and

severity of the infectious

disease outbreak; (ii)

the imposition of restrictive

measures

18

to combat the outbreak and slow disease transmission; (iii) the introduction of financial support measures

to reduce the impact

of the outbreak on the

economy; (iv) volatility in the

demand for and price

of oil and

gas; (v) shortages or reductions in the supply of essential goods, services or labor; and (vi) fluctuations in

general economic or financial conditions tied to the outbreak, such as a sharp increase

in interest rates or

reduction in

the

availability of

credit. We

cannot predict

the

effect that

an

outbreak of

a new

COVID-19

variant

or

strain,

or

any

future

infectious

disease

outbreak,

pandemic

or

epidemic

may

have

on

our

business, results of operations and financial condition, which could be

material and adverse.

Our operating results may be affected by seasonal fluctuations.

We operate our vessels in markets that have

historically exhibited seasonal variations in demand and, as

a result,

in charter

hire rates.

This seasonality

may result

in quarter-to-quarter

volatility in

our operating

results.

The

dry

bulk

carrier

market

is

typically

stronger

in

the

fall

and

winter

months

in

anticipation

of

increased

consumption

of

coal

and

other

raw

materials

in

the

northern

hemisphere

during

the

winter

months. In addition, unpredictable

weather patterns in these

months tend to disrupt vessel

scheduling and

supplies of certain

commodities. As

a result, our

revenues may

be weaker during

the fiscal quarters

ending

June 30

and

September 30,

and,

conversely,

our

revenues

may

be

stronger

in

fiscal

quarters

ending

December 31 and March 31.

While this seasonality

does not directly

affect our operating

results, it could

materially

affect

our

operating results

to

the

extent

our

vessels

are

employed

in

the

spot

market

in

the

future.

An increase in the price of fuel, or bunkers, may adversely affect our

profits.

While we generally will not bear the

cost of fuel or bunkers for vessels

operating on time charters, fuel is

a

significant

factor

in

negotiating

charter

rates.

As

a

result,

an

increase

in

the

price

of

fuel

beyond

our

expectations

may

adversely

affect

our

profitability

at

the

time

of

charter

negotiation.

Fuel

is

also

a

significant, if not

the largest, expense

in shipping when

vessels are under

voyage charter.

The price and

supply of

fuel is

unpredictable and

fluctuates based

on events

outside our

control, including

geopolitical

developments, supply

and demand

for

oil

and

gas,

actions by

the

Organization of

Petroleum Exporting

Countries (the

"OPEC"), and

other oil

and gas

producers, war

and unrest

in oil

producing countries

and

regions, regional production patterns

and environmental concerns. Any

future increase in the

cost of fuel

may reduce the profitability and competitiveness of our business.

In addition, if the recent sharp

increase in crude oil prices and widening of the

spread between the prices

of high

sulfur fuel

and low

sulfur fuel

resulting from

conflict between

Russia and

Ukraine and

Israel and

Hamas continues,

this might

lead to

a decrease

in the

economic viability

of

older vessels

that lack

fuel

efficiency and a reduction of useful lives of these vessels.

We

are

subject

to

complex

laws

and

regulations,

including

environmental

regulations

that

can

adversely affect the cost, manner or feasibility of doing business.

Our business and the operations of our vessels

are materially affected by environmental regulation in the

form of international conventions, national, state

and local laws and regulations in force in

the jurisdictions

in which

our vessels

operate, as

well as

in the

country or

countries of

their registration,

including those

governing the

management and

disposal of

hazardous substances

and wastes,

the cleanup

of oil

spills

and other contamination, air emissions (including greenhouse gases), water discharges and ballast water

management. These regulations include, but

are not limited

to, European Union

regulations, the U.S.

Oil

Pollution

Act

of

1990,

requirements

of

the

U.S.

Coast

Guard,

or

USCG

and

the

U.S.

Environmental

Protection Agency, the U.S. Clean Air Act of 1970 (including

its amendments of 1977 and 1990)

, the U.S.

Clean Water

Act, and the U.S.

Maritime Transportation Security

Act of 2002, and

regulations of the IMO,

including the International Convention on Civil Liability for Oil Pollution Damage of

1969, the International

Convention

for

the

Prevention

of

Pollution

from

Ships

of

1973,

as

modified

by

the

Protocol

of

1978,

collectively referred to as MARPOL 73/78 or MARPOL, including designations of Emission Control Areas,

19

thereunder, SOLAS,

the International Convention on

Load Lines of 1966,

the International Convention of

Civil Liability for

Bunker Oil Pollution

Damage, and the

ISM Code. Because such

conventions, laws, and

regulations are often revised, we

cannot predict the ultimate cost

of complying with such requirements or

the impact

thereof on the

re-sale price

or useful life

of any

vessel that

we own

or will acquire.

Additional

conventions, laws

and regulations may

be adopted

that could

limit our

ability to

do business

or increase

the

cost

of

our

doing

business

and

which

may

materially

adversely

affect

our

operations.

Government

regulation

of

vessels,

particularly

in

the

areas

of

safety

and

environmental

requirements,

continue

to

change, requiring us

to incur significant

capital expenditures on our

vessels to keep

them in compliance,

or even

to scrap

or sell

certain vessels

altogether.

In addition,

we may

incur significant

costs in

meeting

new

maintenance

and

inspection

requirements,

in

developing

contingency

arrangements

for

potential

environmental violations and in obtaining insurance coverage.

In addition, we

are required by

various governmental and

quasi-governmental agencies to

obtain certain

permits,

licenses,

certificates,

approvals

and

financial

assurances

with

respect

to

our

operations.

Our

failure to

maintain necessary

permits, licenses,

certificates, approvals

or financial

assurances could

require

us to incur substantial costs or temporarily suspend operation of one or more of the vessels in our fleet or

lead to the invalidation or reduction of our insurance coverage.

Environmental

requirements

can

also

affect

the

resale

value

or

useful

lives

of

our

vessels,

require

a

reduction in

cargo capacity,

ship modifications

or operational

changes or

restrictions, lead

to decreased

availability

of

insurance

coverage

for

environmental

matters

or

result

in

the

denial

of

access

to

certain

jurisdictional waters or

ports, or detention

in certain ports.

Under local, national and

foreign laws, as

well

as

international

treaties

and

conventions,

we

could

incur

material

liabilities,

including

for

cleanup

obligations and natural resource damages, in

the event that there is

a release of petroleum or hazardous

substances from

our vessels

or otherwise

in connection

with our

operations. We

could also

become subject

to personal injury

or property damage claims

relating to the

release of hazardous substances

associated

with our

existing or

historic operations. Violations

of, or

liabilities under,

environmental requirements can

result in substantial

penalties, fines

and other

sanctions, including

in certain

instances, seizure

or detention

of our vessels.

Increased inspection procedures, tighter import and export controls and new security regulations

could increase costs and disrupt our business.

International

shipping

is

subject

to

various

security

and

customs

inspection

and

in

countries of origin,

destination and trans-shipment

points. Under the

U.S. Maritime Transportation Security

Act

of

2002 (“MTSA”),

the

U.S.

Coast Guard

issued regulations

requiring

the

implementation of

certain

security requirements

aboard vessels

operating in

waters subject

to the

jurisdiction of

the United

States

and

at

certain ports

and facilities.

These security

procedures may

result

in

cargo seizure,

delays in

the

loading, offloading,

trans-shipment or delivery

and the

levying of customs

duties, fines or

other penalties

against us. It is possible

that changes to inspection

procedures could impose additional

financial and legal

obligations on us.

Changes to inspection

procedures could also

impose additional

costs and obligations

on

our customers and

may,

in certain cases,

render the shipment of

certain types of

cargo uneconomical or

impractical.

Any

such

changes

or

developments

may

have

a

material

adverse

effect

on

our

business,

customer relations, financial condition and earnings.

Operational risks and damage to our vessels could adversely

impact our performance.

The operation of an ocean-going vessel carries inherent

risks. Our vessels and their cargoes are

at risk of

being damaged or

lost because of

events such as

marine disasters, bad weather

and other acts

of God,

business

interruptions caused

by mechanical

failures,

grounding, fire,

explosions and

collisions, human

error, war, terrorism,

piracy, labor strikes,

boycotts and

other circumstances

or events.

Changing

economic,

regulatory

and

political conditions

in

some

countries, including

political and

military

conflicts,

have from

time

to

time

resulted

in

attacks

on

vessels,

mining

of

waterways,

piracy,

terrorism,

labor

strikes

and

20

boycotts. Damage to the

environment could also

result from our operations,

particularly through spillage

of

fuel,

lubricants

or

other

chemicals

and

substances

used

in

operations,

or

extensive

uncontrolled

fires.

These

hazards

may

result

in

death

or

injury

to

persons,

loss

of

revenues

or

property,

the

payment

of

ransoms,

environmental

damage,

higher

insurance

rates,

damage

to

our

customer

relationships

and

market disruptions, delay

or rerouting, any

of which may

subject us to

litigation. As a

result, we could

be

exposed

to

substantial

liabilities

not

recoverable

under

our

insurances.

Further,

the

involvement

of

our

vessels in a serious accident could harm our reputation as a safe and reliable vessel operator and lead to

a

loss

of

business. Epidemics

and

other

public health

incidents

may

also

lead

to

crew member

illness,

which

can

disrupt

the

operations

of

our

vessels,

or

to

public

health

measures,

which

may

prevent

our

vessels from calling

on ports or

discharging cargo in

the affected

areas or in

other locations

after having

visited the affected areas.

If our vessels suffer

damage, they may need

to be repaired at

a drydocking facility.

The costs of drydock

repairs are unpredictable

and may

be substantial.

We may have

to pay

drydocking costs

that our

insurance

does not

cover at

all or

in full.

The loss

of revenues

while these

vessels are

being repaired

and repositioned,

as well

as the

actual cost

of these

repairs, may

adversely affect

our business

and financial

condition. In

addition, space

at drydocking

facilities is

sometimes limited

and not

all drydocking

facilities are

conveniently

located. We may be

unable to find space at

a suitable drydocking facility or our vessels

may be forced to

travel to a drydocking facility that is not conveniently located relative to

our vessels' positions. The loss of

earnings while these

vessels are forced

to wait for

space or to

travel to more

distant drydocking facilities

may adversely affect our business and financial condition.

The operation

of dry

bulk vessels has

certain unique operational

risks. With

a dry

bulk vessel, the

cargo

itself and its

interaction with the

ship can be a

risk factor. By their nature,

dry bulk cargoes

are often heavy,

dense

and

easily

shifted,

and

react

badly

to

water

exposure.

In

addition,

dry

bulk

vessels

are

often

subjected to

battering treatment

during unloading

operations with

grabs, jackhammers

(to pry

encrusted

cargoes out of the

hold), and small bulldozers. This

treatment may cause damage to

the dry bulk vessel.

Dry bulk

vessels damaged

due to

treatment during

unloading procedures

may be

more susceptible

to a

breach at sea. Hull breaches in dry

bulk vessels may lead to the flooding of

their holds. If flooding occurs

in the forward holds, the bulk

cargo may become so waterlogged that

the vessel's bulkheads may buckle

under the resulting

pressure leading

to the loss of

the dry bulk vessel.

These risks may

also impact the

risk

of loss of life or harm to our crew.

If

we

are

unable to

adequately maintain

or

safeguard

our

vessels,

we may

be

unable to

prevent these

events. Any of these circumstances or events could negatively impact our business, financial condition or

results of operations. In addition, the loss of any

of our vessels could harm our crew and our

reputation as

a safe and reliable vessel owner and operator.

If our

vessels call

on ports

located in

countries or

territories that

are the

subject of

sanctions or

embargoes

imposed

by

the

U.S.

government,

the

European

Union,

the

United

Nations,

or

other

governmental authorities, it

could lead to

monetary fines or penalties

and may adversely affect

our

reputation and the market for our securities.

We have not engaged in

shipping activities in countries

or territories or with

government-controlled entities

in 2023

in violation

of any

applicable sanctions or

embargoes imposed by

the U.S.

government, the EU,

the United Nations or other applicable governmental authorities.

Our contracts with our charterers prohibit

them

from

causing

our

vessels to

call

on

ports

located

in

sanctioned

countries or

territories or

carrying

cargo for entities that

are the subject of

sanctions. Although our charterers may,

in certain cases, control

the

operation

of

our

vessels,

we

have

monitoring

processes

in

place

to

ensure

our

compliance

with

applicable economic

sanctions and

embargo laws.

Nevertheless, it

remains possible

that our

charterers

may cause

our vessels to

trade in

violation of sanctions

provisions without our

consent. If such

activities

result

in

a

violation

of

applicable

sanctions

or

embargo

laws,

we

could

be

subject

to

monetary

fines,

21

penalties, or

other sanctions,

and our

reputation and

the market

for our

common shares

could be

adversely

affected.

The

applicable sanctions

and

embargo laws

and regulations

of

these

different

jurisdictions vary

in

their

application and do not all apply to the same covered persons or proscribe the same activities. In addition,

the sanctions

and embargo

laws and

regulations of

each jurisdiction

may be

amended to

increase or

reduce

the restrictions they

impose over time,

and the

lists of

persons and entities

designated under these

laws

and regulations are amended

frequently. Moreover, most sanctions regimes provide that entities

owned or

controlled by the

persons or entities

designated in such

lists are

also subject to

sanctions. The U.S.

and

EU have

enacted new

sanctions programs

in recent

years. Additional

countries or

territories, as

well as

additional persons or

entities within or affiliated

with those countries

or territories, have, and

in the future

will,

become

the

target

of

sanctions.

These

require

us

to

be

diligent

in

ensuring

our

compliance

with

sanctions

laws.

Further,

the

U.S.

has

increased

its

focus

on

sanctions enforcement

with

respect to

the

shipping sector. Current or

future counterparties of ours may be affiliated

with persons or entities that are

or may be

in the future

the subject of

sanctions or embargoes imposed

by the United

States, EU, and/or

other international

bodies. If

we determine

that such

sanctions require

us to

terminate existing

or future

contracts to which we, or our subsidiaries, are party or if we are found to be in violation

of such applicable

sanctions, our results of operations may be adversely affected, or we may

suffer reputational harm.

As a result

of Russia’s actions

in Ukraine, the

U.S., EU and

United Kingdom,

together with numerous

other

countries, have imposed

significant sanctions on

persons and entities

associated with Russia

and Belarus,

as

well

as

comprehensive

sanctions

on

certain

areas

within

the

Donbas

region

of

Ukraine,

and

such

sanctions apply

to entities

owned or

controlled by

such designated

persons or

entities. These

sanctions

adversely affect our ability to operate in the region and also restrict parties

whose cargo we may carry.

Although we believe that we

have been in compliance with

all applicable sanctions and

embargo laws and

regulations in 2023 and

up to the date of

this annual report, and intend

to maintain such compliance,

there

can be no assurance that we

or our charterers will be

in compliance in the future, particularly

as the scope

of certain

laws may be

unclear and may

be subject to

changing interpretations. Any

such violation could

result

in

fines,

penalties or

other

sanctions that

could severely

impact

our

ability to

access

U.S.

capital

markets and conduct our business and could result in our

reputation and the markets for our securities to

be adversely affected

and/or in some

investors deciding, or being

required, to divest their

interest, or not

to invest, in us. In

addition, certain institutional investors may have investment policies or

restrictions that

prevent them

from holding

securities of

companies that

have contracts

with countries

or territories

identified

by the U.S. government as state sponsors of terrorism. The determination

by these investors not to invest

in, or

to divest

from, our shares

may adversely

affect the

price at

which our

shares trade. Moreover,

our

charterers may violate applicable sanctions

and embargo laws and

regulations as a result

of actions that

do

not

involve

us

or

our

vessels,

and

those

violations

could

in

turn

negatively

affect

our

reputation.

In

addition, our reputation

and the market

for our securities

may be adversely

affected if we engage

in certain

other

activities,

such

as

entering

into

charters

with

individuals

or

entities

that

are

not

controlled

by

the

governments of countries

or territories that

are the subject

of certain U.S.

sanctions or embargo

laws, or

engaging in operations

associated with

those countries or

territories pursuant

to contracts with

third parties

that

are

unrelated

to

those

countries

or

territories

or

entities

controlled

by

their

governments.

Investor

perception of the value of our common stock may

be adversely affected by the consequences of war,

the

effects of terrorism, civil unrest and governmental actions in countries or

territories that we operate in.

The smuggling

of drugs

or

other contraband

onto our

vessels may

lead to

governmental claims

against us.

We

expect that

our vessels

will call

in

ports in

areas where

smugglers attempt

to

hide drugs

and other

contraband on

vessels, with

or

without the

knowledge of

crew members.

To

the

extent our

vessels are

found with contraband, whether inside

or attached to the hull

of our vessel and whether with

or without the

22

knowledge of any of our crew, we may

face governmental or other regulatory claims which could have an

adverse effect on our business, results of operations, cash flows and financial

condition.

Maritime claimants

could arrest

or

attach one

or

more

of our

vessels, which

could interrupt

our

business or have a negative effect on our cash flows.

Crew members, suppliers of goods and services to a vessel, shippers of cargo, lenders, and other parties

may

be

entitled

to

a

maritime

lien

against

a

vessel

for

unsatisfied

debts,

claims

or

damages.

In

many

jurisdictions, a

maritime lien

holder may

enforce its

lien by

“arresting” or

“attaching” a

vessel through

judicial

or foreclosure proceedings.

The arrest or

attachment of

one or

more of our

vessels could interrupt

the cash

flow of

the charterer

and/or require

us to

pay a

significant amount

of money

to have

the arrest

or attachment

lifted, which would have an adverse effect on our cash flows.

In addition, in some jurisdictions, such

as South Africa, under the “sister-ship”

theory of liability, a claimant

may arrest

both the

vessel that

is subject

to the claimant’s

maritime lien

and any

“associated” vessel,

which

is any

vessel owned

or controlled

by the

same owner.

Claimants could

try to

assert “sister-ship”

liability

against

one

vessel

in

our

fleet

for

claims

relating

to

another

of

our

ships.

Under

some

of

our

present

charters, if the vessel is arrested or detained as a result of a claim against us, we may be in default of our

charter

and

the

charterer

may

suspend

the

payment

of

hire

under

the

charter

and

charge

us

with

any

additional expenses

incurred during

that period,

which may

negatively impact

our revenues

and cash

flows.

We

conduct

business

in

China,

where

the

legal

system

is

not

fully

developed

and

has

inherent

uncertainties that could limit the legal protections available

to us.

Some

of

our

vessels may

be

chartered to

Chinese

customers and

from

time

to

time

on

our

charterers'

instructions,

our

vessels

may

call

on

Chinese

ports.

Such

charters

and

voyages

may

be

subject

to

regulations in China

that may require

us to incur

new or additional

compliance or other

administrative costs

and

may require

that

we pay

to

the

Chinese government

new taxes

or other

fees.

Applicable laws

and

regulations in

China may

not be

well publicized

and may

not be

known to

us or

to our

charterers in

advance

of us

or our

charterers becoming

subject to

them, and

the implementation

of such

laws and

regulations

may be

inconsistent. Changes in

Chinese laws and

regulations, including with

regards to

tax matters, or

changes

in

their

implementation

by

local

authorities

could

affect

our

vessels

if

chartered

to

Chinese

customers as well

as our vessels

calling to Chinese

ports and could

have a material

adverse impact

on our

business, financial condition and results of operations.

Governments could

requisition our

vessels during

a period

of war

or emergency, resulting

in a

loss

of earnings.

A government could

requisition one or

more of

our vessels for

title or

for hire.

Requisition for title

occurs

when

a

government takes

control of

a vessel

and becomes

her

owner,

while requisition

for

hire occurs

when

a

government takes

control of

a

vessel and

effectively

becomes her

charterer at

dictated charter

rates. Generally, requisitions occur

during periods of war or emergency,

although governments may elect

to requisition vessels in other circumstances. Although we would be entitled to compensation in the event

of

a

requisition

of

one

or

more

of

our

vessels,

the

amount

and

timing

of

payment

would

be

uncertain.

Government requisition of one or

more of our vessels may negatively

impact our revenues and reduce

the

amount

of

cash

we

may

have

available

for

distribution

as

dividends

to

our

shareholders,

if

any

such

dividends are declared.

Failure

to

comply

with

the

U.S.

Foreign

Corrupt

Practices

Act

could

result

in

fines,

criminal

penalties and an adverse effect on our business.

We may

operate in a

number of countries

throughout the world,

including countries suspected

to have

a

risk of corruption. We are committed to doing business in accordance with applicable anti-corruption laws

23

and have adopted measures

designed to ensure compliance with

the U.S. Foreign Corrupt

Practices Act

of 1977, as

amended (the “FCPA”).

We are

subject, however,

to the risk

that we, our

affiliated entities or

our

or

their

respective

officers,

directors,

employees

and

agents

may

take

actions

determined to

be

in

violation of

such anti-corruption

laws, including

the FCPA.

Any such

violation could

result in

substantial

fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might

adversely affect our business,

earnings or financial

condition. In addition,

actual or alleged violations

could

damage

our

reputation

and

ability

to

do

business.

Furthermore,

detecting,

investigating,

and

resolving

actual

or

alleged

violations

is

expensive

and

can

consume

significant

time

and

attention

of

our

senior

management.

Changing laws and

evolving reporting requirements

could have an

adverse effect on

our business.

Changing laws,

regulations and

standards relating

to reporting

requirements, including

the European

Union

General Data Protection Regulation, or GDPR, may create additional

compliance requirements for us.

GDPR broadens the

scope of personal

privacy laws to

protect the rights

of European Union

citizens and

requires organizations to

report on

data breaches within

72 hours

and be bound

by more

stringent rules

for obtaining the consent of individuals

on how their data can be used.

GDPR has become enforceable

on

May 25, 2018

and non-compliance

may expose entities

to significant fines

or other regulatory

claims which

could have an adverse effect on our business, financial condition, and operations.

Company Specific Risk Factors

The market values of our vessels could decline,

which could limit the amount of funds

that we can

borrow and

could trigger

breaches of

certain financial

covenants contained

in our

loan facilities,

which

could

adversely

affect

our

operating

results,

and

we

may

incur

a

loss

if

we

sell

vessels

following a decline in their market values.

While the

market values

of vessels

and the

freight charter

market have

a very

close relationship

as the

charter market

moves from

trough to

peak, the

time lag

between the

effect of

charter rates

on market

values

of ships can vary.

The market

values of

our vessels

have generally

experienced high

volatility,

and you

should expect

the

market values of our vessels to fluctuate depending on a number of

factors including:

●

the prevailing level of charter hire rates;

●

general economic and market conditions affecting the shipping industry;

●

competition from other shipping companies and other modes

of transportation;

●

the types, sizes and ages of vessels;

●

the supply of and demand for vessels;

●

applicable governmental or other regulations;

●

technological advances;

●

the need

to upgrade

vessels as

a result

of charterer

requirements, technological

advances in

vessel

design or equipment or otherwise; and

●

the cost of newbuildings.

24

If the market values of

our vessels decline, we

may not be in compliance

with certain covenants contained

in our

loan facilities

and we

may not

be able

to refinance

our debt

or obtain

additional financing or

incur

debt on terms that are acceptable

to us or at all. As of December

31, 2023, we were in compliance

with all

of the covenants in our loan facilities. If

we are not able to comply with the

covenants in our loan facilities

or are unable

to obtain

waivers or

amendments or

otherwise remedy

the relevant

breach, our

lenders could

accelerate our debt and foreclose on our vessels.

Furthermore, if

we sell

any of

our owned

vessels at

a time

when prices

are depressed,

our business,

results

of operations, cash flow and financial condition

could be adversely affected. Moreover,

if we sell a vessel

at a time when vessel prices have fallen, the sale may be at less than the vessel's carrying amount in our

financial statements, resulting

in a

loss and

a reduction in

earnings. In

addition, if

vessel values decline,

we may have to record an impairment adjustment in our financial statements which could adversely

affect

our financial results.

We charter

some of

our vessels

on short-term time

charters in

a volatile

shipping industry and

a

decline in charter hire rates could affect our results of operations and our ability

to pay dividends.

Although significant exposure to

short-term time charters is

not unusual in the

dry bulk shipping industry,

the short-term

time charter

market is

highly competitive

and spot

market charter

hire rates

(which affect

time charter

rates) may

fluctuate significantly

based upon

available charters

and the

supply of,

and demand

for,

seaborne

shipping

capacity.

While

the

short-term

time

charter

market

may

enable

us

to

benefit

in

periods

of

increasing charter

hire

rates,

we

must

consistently

renew

our

charters

and

this

dependence

makes us

vulnerable to

declining charter

rates. As

a result

of the

volatility in

the dry

bulk carrier

charter

market, we may

not be able

to employ our

vessels upon the

termination of their

existing charters at their

current charter

hire rates

or at

all. The

dry bulk

carrier charter

market is

volatile, and

in the

recent past,

short-term

time

charter

and

spot

market

charter

rates

for

some

dry

bulk

carriers

declined

below

the

operating

costs

of

those

vessels

before

rising.

We

cannot

assure

you

that

future

charter

hire

rates

will

enable us to operate our vessels profitably, or to pay dividends.

Rising crew costs could adversely affect our results of operations.

Due to an increase in the size of the global shipping fleet, the limited supply of

and increased demand for

crew

has

created

upward

pressure

on

crew

costs.

Additionally,

the

return

of

a

number

of

Ukrainian

seafarers to

their homes as

a result

of the

ongoing war in

Ukraine has

reduced the number

of seafarers

globally,

and

thereby

increased

the

pressure

on

crew

wages.

Continued

higher

crew

costs

or

further

increases in crew costs could adversely affect our results of operations.

Our investment in Diana Wilhelmsen Management Limited may expose

us to additional risks.

During

2015

we

invested

in

a

50/50

joint

venture

with

Wilhelmsen

Ship

Management

which

provides

management

services

to

a

limited

number

of

vessels

in

our

fleet

and

to

affiliated

companies,

but

our

eventual goal

is to

provide fleet

management services

to unaffiliated

third party

vessel operators.

While

this joint

venture may

provide us

in the

future with

a potential

revenue source,

it may

also expose

us to

risks such

as low

customer satisfaction, increased

operating costs compared

to those we

would achieve

for our

vessels, and

inability to

adequately staff

our vessels

with crew

that meets

our expectations

or to

maintain our vessels according to our standards, which would adversely affect our

financial condition.

A cyber-attack could materially disrupt our business.

We

rely

on

information

technology

systems

and

networks

in

our

operations

and

administration

of

our

business.

Information

systems

are

vulnerable

to

security

breaches

by

computer

hackers

and

cyber

terrorists. We

rely on

industry accepted

security measures

and technology

to securely

maintain confidential

25

and

proprietary

information

maintained

on

our

information

systems.

However,

these

measures

and

technology may not adequately prevent security breaches. Our

business operations could be targeted by

individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or

to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our

operations, or lead to unauthorized release of

information or alteration of information in our

systems. Any

such attack or other

breach of our information

technology systems could

have a material

adverse effect on

our

business

and

results

of

operations.

In

addition,

the

unavailability

of

the

information

systems

or

the

failure

of

these

systems to

perform

as

anticipated for

any reason

could

disrupt

our

business

and could

result

in

decreased

performance

and

increased

operating

costs,

causing

our

business

and

results

of

operations

to

suffer.

Any

significant

interruption

or

failure

of

our

information

systems

or

any

significant

breach of

security could

adversely affect

our business

and results

of operations.

Our systems

were the

subject of a malicious attack

in September 2020 that resulted in

disruptions to our computer networks for

a period of several days. We were able

to successfully fully restore our systems

without interruption to our

business

or

operations.

Since

then, we

have

taken

extensive

measures

to

enhance

our

security

infrastructure, reform network

architecture, and implement

rigorous security policies

in line with

ISO27001.

Key

initiatives

include

establishing

security

testing,

business

continuity,

disaster

recovery,

and

incident

response programs, as

well as

implementing multi-factor

authentication and a

vulnerability management

framework. Despite these improvements we cannot assure you that we will be able to successfully thwart

all future attacks with causing material and adverse effect on our business.

Moreover, our risk of cyber-attacks and other sources of security breaches

and incidents may be elevated

as

a result

of the

ongoing conflicts

between Russia

and

Ukraine. and

the

Israel-Hamas conflict.

To

the

extent

such

attacks

have

collateral

effects

on

global

critical

infrastructure

or

financial

institutions,

such

developments could adversely affect our business, operating results and financial condition. At this time it

is difficult to assess the likelihood of such threat and any potential impact.

Even

without

actual

breaches

of

information

security,

protection

against

increasingly

sophisticated

and

prevalent cyberattacks

may result

in significant

future prevention,

detection, response

and management

costs, or

other costs,

including the

deployment of

additional cybersecurity

technologies, engaging

third-

party

experts,

deploying

additional

personnel

and

training

employees.

Further,

as

cyberthreats

are

continually evolving,

our

controls and

procedures may

become inadequate,

and we

may be

required to

devote additional resources to modify or enhance our systems in the future. Such expenses could have a

material adverse effect on our future performance, results of operations,

cash flows and financial position.

Further,

in

July

2023,

the

SEC

adopted

amendments

to

its

rules

on

cybersecurity

risk

management,

strategy, governance, and

incident disclosure.

The amendments,

require us

to report

material cybersecurity

incidents involving our

information systems and

periodic reporting regarding our

policies and procedures

to identify and manage cybersecurity risks, amongst other disclosures.

Climate

change

and

greenhouse

gas

restrictions

may

adversely

impact

our

operations

and

markets.

Due to concern over the risk

of climate change, a number of

countries and the IMO have adopted, or

are

considering the

adoption of,

regulatory frameworks

to reduce

greenhouse gas

emissions. These

regulatory

measures

may

include,

among

others,

adoption

of

cap

and

trade

regimes,

carbon

taxes,

increased

efficiency

standards

and

incentives

or

mandates

for

renewable

energy.

In

July

2023,

nations

at

the

International Maritime Organization’s

Marine Environment Protection

Committee (“MEPC”) 80

updated the

initial strategy

to reduce

greenhouse gas

emissions from

ships. The

initial strategy

identifies ―levels

of

ambition to reducing greenhouse gas

emissions, including (1) decreasing the

carbon intensity from ships

through implementation

of further phases

of the EEDI

for new ships;

(2) reducing

carbon dioxide

emissions

per transport

work, as

an average

across international

shipping, by

at least

20% by

2030, compared

to

2008 emission

levels; and

(3) reducing

the total

annual greenhouse

emissions by

at least

70% by

2040

compared to 2008 while pursuing efforts towards phasing them out entirely.

26

Since January

1, 2020,

ships have

to either

remove sulfur

from emissions

or buy

fuel with

low sulfur

content,

which may lead to

increased costs and supplementary investments for

ship owners. The interpretation of

"fuel

oil used

on board"

includes use

in main

engine, auxiliary

engines and

boilers. We

have elected

to

comply with this regulation

by using 0.5% sulfur fuels

on board, which are

available around the world but

often at a higher cost

and may result in higher

costs than other companies

that elected to install scrubbers

on their vessels.

In

addition,

although

the

emissions

of

greenhouse

gases

from

international

shipping

currently

are

not

subject

to

the

Kyoto

Protocol

to

the

United

Nations

Framework

Convention

on

Climate

Change,

which

required adopting countries

to implement national programs

to reduce emissions

of certain gases,

or the

Paris

Agreement

(discussed

further

below),

a

new

treaty

may

be

adopted

in

the

future

that

includes

restrictions on shipping emissions. Compliance with

changes in laws, regulations and

obligations relating

to climate

change could increase

our costs related

to operating

and maintaining our

vessels and require

us

to

install

new

emission

controls,

acquire

allowances

or

pay

taxes

our

greenhouse

gas

emissions

or

administer

and

manage

a

greenhouse

gas

emissions

program.

Revenue

generation

and

strategic growth opportunities may also be adversely affected.

Increasing

scrutiny

and

changing

expectations

from

investors,

lenders

and

other

market

participants with respect

to our ESG

policies may impose

additional costs on

us or

expose us to

additional risks.

Companies

across

all

industries

are

facing

increasing

scrutiny

relating

to

their

ESG

policies.

Investor

advocacy groups,

certain institutional

investors, investment

funds, lenders

and other

market participants

are increasingly focused on ESG practices and in recent years have placed increasing importance on the

implications and social

cost of their

investments. Companies

which do not

adapt to or

comply with investor,

lender

or

other

industry

shareholder

expectations

and

standards,

which

are

evolving,

or

which

are

perceived

to

have

not

responded

appropriately

to

the

growing

concern

for

ESG

issues,

regardless

of

whether

there

is

a

legal requirement

to

do

so,

may

suffer

from

reputational damage

and

the

business,

financial condition, and/or stock price of such a company could be

materially and adversely affected.

In

February 2021,

the

Acting Chair

of the

SEC issued

a statement

directing the

Division of

Corporation

Finance to enhance

its focus on

climate-related disclosure in

public company filings

and in March

2021 the

SEC announced the creation of a Climate and ESG Task

Force in the Division of Enforcement (the “Task

Force”).

The

Task

Force’s

goal

is

to

develop

initiatives

to

proactively

identify

ESG-related

misconduct

consistent

with

increased

investor

reliance

on

climate

and

ESG-related

disclosure

and

investment.

To

implement

the

Task

Force’s

purpose,

the

SEC

has

taken

several

enforcement

actions,

with

the

first

enforcement action taking

place in May

2022, and promulgated

new rules. On

March 21, 2022,

the SEC

proposed that all

public companies are

to include extensive

climate-related information in

their SEC filings.

On May 25, 2022, SEC proposed

a second set of rules

aiming to curb the practice of

"greenwashing" (i.e.,

making unfounded

claims about

one's ESG

efforts)

and would

add proposed

amendments to

rules and

reporting

forms

that

apply

to

registered

investment

companies

and

advisers,

advisers

exempt

from

registration,

and

business

development

companies.

On

March

6,

2024,

the

SEC

adopted

final

rules

to

require registrants

to disclose

certain climate-related

information in

SEC filings

of all

public companies.

The

final rules

require companies

to disclose,

among other

things: material

climate-related risks;

activities to

mitigate or

adapt to such

risks; information about

the registrant's board

of directors' oversight

of climate-

related risks

and management’s

role in

managing material

climate-related risks;

and information

on any

climate-related

targets

or

goals

that

are

material

to

the

registrant's

business,

results

of

operations,

or

financial condition.

Further, to facilitate

investors' assessment

of certain

climate-related risks,

the final

rules

require

disclosure

of

Scope

1

and/or

Scope

2

greenhouse

gas

(GHG)

emissions

on

a

phased-in

basis

when those

emissions are

material; the

filing of

an attestation

report covering

the required

disclosure of

such

registrants’

Scope

1

and/or

Scope

2

emissions,

also

on

a

phased-in

basis;

and

disclosure of

the

financial statement

effects of

severe weather

events and other

natural conditions including,

for example,

27

costs

and

losses.

The

final

rules

include

a

phased-in

compliance

period

for

all

registrants,

with

the

compliance date dependent on the registrant’s filer

status and the content of the

disclosure. However, on

March 15, 2024, the

U.S. Court of Appeals

for the Fifth Circuit

granted an administrative

stay on the

SEC's

recent climate disclosure rule.

We may

face increasing pressures

from investors, future

lenders and other

market participants, who

are

increasingly

focused

on

climate

change,

to

prioritize

sustainable

energy

practices,

reduce

our

carbon

footprint and

promote sustainability.

As a

result, we

may

be required

to

implement more

stringent ESG

procedures or

standards so that

our existing and

future investors

and lenders remain

invested in us

and

make further investments

in us. For

example, in February

2021, we established

a Sustainability

Committee

and in March 2021, we signed an agreement with American Bureau of Shipping (“ABS”) to implement the

ABS

Environmental

MonitorTM

digital

sustainability

solution

across

all

our

vessels

managed

by

Diana

Shipping Services S.A. Additionally, in May 2021, we signed a sustainability - linked loan facility with ABN

AMRO Bank N.V., through six wholly-owned subsidiaries. Under this loan, the margin amount that we are

required

to

pay

can

be

either

increased

or

decreased

depending

on

our

ability

to

achieve

certain

sustainability performance targets related to our fleet’s carbon emissions.

If we do not meet the standards

in this loan, our business could be harmed.

Additionally,

certain

investors

and

lenders

may

exclude

companies,

such

as

us,

from

their

investing

portfolios

altogether

due

to environmental,

social and

governance

factors.

These

limitations

in

both

the

debt and

equity capital

markets may

affect our

ability to

grow as

our plans

for growth

may include

accessing

the

equity

and

debt

capital

markets.

If

those

markets

are

unavailable,

or

if

we

are

unable

to

access

alternative means of

financing on acceptable

terms, or at all,

we may be unable

to implement our business

strategy,

which would have

a material

adverse effect

on our

financial condition and

results of

operations

and impair our ability to service

our indebtedness. Further, it is likely that we

will incur additional costs and

require

additional

resources

to

monitor,

report

and

comply

with

wide

ranging

ESG

requirements.

The

occurrence

of

any

of

the

foregoing

could

have

a

material

adverse

effect

on

our

business

and

financial

condition.

Moreover,

from time to

time, in

alignment with

our sustainability priorities,

we may

establish and publicly

announce

goals

and

commitments

in

respect

of

certain

ESG

items.

While

we

may

create

and

publish

voluntary disclosures regarding ESG matters from time to time,

many of the statements in those voluntary

disclosures are

based on

hypothetical expectations

and assumptions

that may

or may

not be

representative

of current or actual risks or events or forecasts of expected risks or events, including

the costs associated

therewith.

Such

expectations and

assumptions

are

necessarily uncertain

and

may

be

prone to

error

or

subject to

misinterpretation given

the long

timelines involved

and the

lack of

an established

single approach

to identifying, measuring and reporting on many ESG matters. If we fail to achieve or improperly

report on

our progress toward achieving our environmental goals and commitments, the resulting negative publicity

could adversely affect our reputation and/or our access to capital.

The Public Company Accounting Oversight Board inspection of our independent accounting firm,

could lead to findings

in our auditors’ reports

and challenge the accuracy

of our published audited

consolidated financial statements.

Auditors of

U.S. public

companies are

required by

law to

undergo periodic

Public Company

Accounting

Oversight

Board,

or

PCAOB,

inspections

that

assess

their

compliance

with

U.S.

law

and

professional

standards in connection with performance of audits of financial statements filed with the SEC. For several

years

certain

European

Union

countries,

including

Greece,

did

not

permit

the

PCAOB

to

conduct

inspections of accounting firms established and operating in such European Union countries, even if

they

were part of

major international firms.

Accordingly, unlike for most U.S.

public companies, the

PCAOB was

prevented

from

evaluating

our

auditor’s

performance

of

audits

and

its

quality

control

procedures,

and,

unlike stockholders of

most U.S. public

companies, we and

our stockholders were

deprived of the

possible

benefits of such inspections. Since 2015, Greece

has agreed to allow the PCAOB

to conduct inspections

28

of accounting firms operating in Greece. In the

future, such PCAOB inspections could result in findings in

our

auditors’

quality

control

procedures,

question

the

validity

of

the

auditor’s

reports

on

our

published

consolidated financial statements and

the effectiveness of our internal control

over financial reporting, and

cast doubt upon the accuracy of our published audited financial

statements.

Our earnings

may be

adversely affected

if we

are not

able to

take advantage of

favorable charter

rates.

We

charter

our

dry

bulk

carriers

to

customers

pursuant

to

short,

medium

or

long-term

time

charters.

However, as part of our business strategy,

the majority of our vessels are currently fixed on medium-term

time charters. We

may extend the

charter periods

for additional

vessels in

our fleet, including

additional dry

bulk carriers that

we may purchase in

the future, to

take advantage of the

relatively stable cash flow

and

high

utilization

rates

that

are

associated

with

long-term

time

charters.

While

we

believe

that

long-term

charters provide us with relatively

stable cash flows and higher

utilization rates than shorter-term charters,

our vessels that

are committed to

long-term charters may not

be available for

employment on short-term

charters

during

periods

of

increasing

short-term

charter

hire

rates

when

these

charters

may

be

more

profitable than long-term charters.

Investment in derivative instruments such as forward

freight agreements could result in losses.

Forward

freight

agreements, or

FFAs

and

other derivative

instruments may

be

used

to

hedge

a vessel

owner's

exposure

to

the

charter

market

by

providing

for

the

sale

of

a

contracted

charter

rate

along

a

specified route and period of time. Upon settlement, if the contracted charter rate is less than the average

of the rates, as

reported by an identified index, for

the specified route and period,

the seller of the

FFA is

required to

pay the

buyer an

amount equal

to the

difference between

the contracted

rate and

the settlement

rate, multiplied by the number of days in the specified period. Conversely,

if the contracted rate is greater

than the settlement rate, the buyer is required to pay the seller the settlement sum. If we

take positions in

FFAs

or

other

derivative

instruments

and

do

not

correctly

anticipate

charter

rate

movements

over

the

specified route and time period, we could suffer losses in

the settling or termination of the FFA. This could

adversely affect our results of operations and cash flows.

We may have difficulty effectively managing our growth, which may adversely affect our earnings.

Since the completion of our initial public offering in

March 2005, we have increased our fleet to 51

vessels

in operation

in 2017, and

as of

the date

of this

annual report we

have 41

vessels of

which 39

vessels in

operation,

owned

and

chartered-in,

and

two

under

construction

and

we

have

agreed

to

sell

one

of

our

vessels. We may grow our fleet further in the future and this may

require us to increase the number of our

personnel. We may

also have to

increase our customer

base to provide

continued employment

for the new

vessels.

Any future growth will primarily depend on our ability to:

●

locate and acquire suitable vessels;

●

identify and consummate acquisitions or joint ventures;

●

enhance our customer base;

●

manage our expansion; and

●

obtain required financing on acceptable terms.

29

Growing

any

business

by

acquisition

presents

numerous

risks,

such

as

undisclosed

liabilities

and

obligations, the

possibility that

indemnification agreements

will be

unenforceable or

insufficient to

cover

potential

losses

and

difficulties

associated

with

imposing

common

standards,

controls,

procedures

and

policies, obtaining

additional qualified

personnel, managing

relationships with

customers and

integrating

newly acquired assets and

operations into existing infrastructure. We

cannot give any assurance that

we

will be

successful in

executing any future

growth plans or

that we

will not incur

significant expenses and

losses in connection with our future growth.

We cannot assure

you that we will

be able to borrow

amounts under loan facilities

and restrictive

covenants in our loan facilities impose financial and other restrictions

on us.

Historically, we have entered into several loan agreements

to finance vessel acquisitions,

the construction

of newbuildings and working capital.

As of December 31,

2023, we had $517.0 million

outstanding under

our

facilities

and

bond. Our

ability

to

borrow

amounts

under

our

facilities

is

subject

to

the

execution

of

customary

documentation

relating

to

the

facility,

including

security

documents,

satisfaction

of

certain

customary conditions

precedent and

compliance with

terms and

conditions included

in the

loan documents.

Prior

to

each

drawdown,

we

are

required,

among

other

things,

to

provide

the

lender

with

acceptable

valuations of the

vessels in our

fleet confirming that

the vessels in our

fleet have a minimum

value and that

the

vessels

in

our

fleet

that

secure

our

obligations under

the

facilities

are

sufficient

to

satisfy

minimum

security requirements.

To the extent that

we are

not able

to satisfy

these requirements,

including as

a result

of a decline

in the

value of

our vessels,

we may

not be

able to

draw down

the full

amount under

the facilities

without obtaining

a waiver

or consent

from the

lender.

We will

also not

be permitted

to borrow

amounts

under the facilities if we experience a change of control.

The loan facilities

also impose operating

and financial restrictions

on us. These

restrictions may limit

our

ability to, among other things:

●

pay dividends

if there

is a

default under

the loan

facilities or

if the payment

of the dividend

would

result in a default or breach of a loan covenants;

●

incur additional indebtedness, including through the issuance of guarantees;

●

change the flag, class or management of our vessels;

●

create liens on our assets;

●

sell our vessels;

●

enter into a

time charter

or consecutive

voyage charters

that have a

term that

exceeds, or

which

by virtue of any optional extensions may exceed a certain period;

●

merge or consolidate with, or transfer all or substantially all

our assets to, another person; and

●

enter into a new line of business.

Therefore, we

may need

to seek

permission from

our lenders

in order

to engage

in some

corporate actions.

Our lenders’ interests

may be different

from ours and

we cannot guarantee that

we will be

able to obtain

our

lenders'

permission when

needed.

This

may

limit

our

ability to

finance

our

future

operations, make

acquisitions or pursue business opportunities.

30

We

cannot

assure

you

that

we

will

be

able

to

refinance

indebtedness

incurred

under

our

loan

facilities and bond.

We cannot assure

you that we

will be able

to refinance our

indebtedness with

equity offerings or

otherwise,

on

terms that

are

acceptable to

us or

at

all. If

we

are

not able

to

refinance these

amounts with

the

net

proceeds of

equity offerings

or otherwise,

on terms

acceptable to us

or at

all, we

will have

to dedicate

a

greater portion of our cash flow from operations to pay the principal and interest

of this indebtedness than

if we were able to refinance such amounts. If we are not able to satisfy these obligations, we may have to

undertake alternative financing plans. The

actual or perceived credit quality

of our charterers, any defaults

by them, and

the market value of

our fleet, among other

things, may materially affect

our ability to obtain

alternative financing.

In addition,

debt service

payments under

our loan

facilities or

alternative financing

may limit funds otherwise available for working capital, capital expenditures and other purposes. If we are

unable to

meet our

debt obligations,

or if

we otherwise

default under

our loan

facilities or

an alternative

financing arrangement, our lenders could declare the

debt, together with accrued interest

and fees, to be

immediately due

and payable

and foreclose

on our

fleet, which

could result

in the

acceleration of

other

indebtedness that we

may have at

such time and

the commencement of

similar foreclosure proceedings

by other lenders.

Purchasing

and

operating

secondhand

vessels

may

result

in

increased

operating

costs

and

reduced operating days, which may adversely affect our earnings.

As part of our

current business

strategy to increase

our owned fleet,

we may acquire

new and secondhand

vessels. While we rigorously

inspect previously owned

or secondhand vessels prior

to purchase, this does

not

provide us

with the

same

knowledge about

their

condition and

cost of

any required

(or

anticipated)

repairs

that

we

would

have

had

if

these

vessels

had

been

built

for

and

operated

exclusively

by

us.

Accordingly, we may

not discover defects or other problems with secondhand vessels prior to purchasing

or

chartering-in,

or

may

incur

costs

to

terminate

a

purchase

agreement.

Any

such

hidden

defects

or

problems may require

us to put

a vessel into

drydock, which would

reduce our fleet

utilization and increase

our

operating

costs.

If

a

hidden

defect

or

problem

is

not

detected,

it

may

result

in

accidents

or

other

incidents for which we may become liable to third parties.

In general, the costs to maintain a vessel in

good operating condition increase with the age of the vessel.

Older vessels are typically less fuel-efficient than more recently constructed vessels due to improvements

in engine technology.

Cargo insurance rates increase with the age of a

vessel, making older vessels less

desirable to charterers.

Furthermore, governmental regulations, safety or other equipment

standards related to the age of vessels

may

require

expenditures for

alterations, or

the addition

of

new equipment

and may

restrict the

type

of

activities

in which

the

vessel may

engage. As

our

vessels age,

market conditions

may

not justify

those

expenditures or enable us to operate our vessels profitably during

the remainder of their useful lives.

We are subject to certain risks with respect to our counterparties on

contracts, and failure of such

counterparties

to

meet

their

obligations could

cause

us

to

suffer

losses

or

otherwise adversely

affect our business.

We

enter

into,

among

other

things,

charter

parties with

our

customers. Such

agreements

subject

us

to

counterparty risks. The

ability and willingness

of each of

our counterparties to

perform its obligations

under

a contract with us will depend on

a number of factors that are beyond

our control and may include, among

other things, general

economic conditions,

the condition of

the maritime and

offshore industries, the

overall

financial

condition

of

the

counterparty,

charter

rates

received

for

specific

types

of

vessels,

and

various

expenses. Should a counterparty fail to

honor its obligations under agreements with

us, we could sustain

significant losses, which could have a material adverse effect

on our business, financial condition, results

of operations and cash flows.

31

In addition, in

depressed market conditions, our

charterers may no

longer need a

vessel that is

currently

under charter

or may

be able

to obtain

a comparable

vessel at

lower rates.

As a

result, charterers

may

seek to

renegotiate the

terms of

their existing

charter agreements

or avoid

their obligations

under those

contracts.

If

our

charterers

fail

to

meet

their

obligations

to

us

or

attempt

to

renegotiate

our

charter

agreements,

it

may

be

difficult

to

secure substitute

employment for

such vessels,

and

any

new

charter

arrangements we

secure may

be

at

lower rates.

As

a result,

we

could

sustain significant

losses, which

could have

a material

adverse effect

on our

business, financial condition,

results of

operations and cash

flows.

In

the

highly

competitive

international

shipping

industry,

we

may

not

be

able

to

compete

for

charters with

new entrants

or established

companies with

greater resources,

and as

a result,

we

may be unable to employ our vessels profitably.

The

operation

of

dry

bulk

vessels

and

transportation

of

dry

bulk

cargoes

is

extremely

competitive

and

fragmented. Competition

for the transportation

of dry bulk

cargoes by sea

is intense and

depends on

price,

location,

size,

age,

condition

and

the

acceptability

of

the

vessel

and

its

operators

to

the

charterers.

Competition arises

primarily from

other vessel

owners, some

of whom

have substantially

greater resources

than we do. Due in part

to the highly fragmented market,

competitors with greater resources

than us could

enter the

dry bulk

shipping industry

and operate

larger fleets

through consolidations

or acquisitions

and

may

be able

to

offer

lower

charter rates

and

higher quality

vessels than

we

are

able to

offer.

If we

are

unable to successfully compete with other

dry bulk shipping companies, our results

of operations may be

adversely impacted.

We

may

be

unable to

attract

and

retain

key management

personnel and

other

employees in

the

shipping industry, which may

negatively impact the effectiveness of our

management and results

of operations.

Our success

depends to

a significant

extent upon

the abilities

and efforts

of our

management team. We

have

entered

into

employment

contracts

with

our

Chief

Executive

Officer

Mrs. Semiramis

Paliou;

our

President, Mr.

Anastasios Margaronis;

our Chief

Financial Officer,

Chief Strategy

Officer,

Treasurer

and

Secretary Mr. Ioannis Zafirakis

and our Chief

Operating Officer Mr. Eleftherios

Papatrifon. On

February 22,

2023, Mr.

Eleftherios Papatrifon

resigned from

his position

of the

Chief Operating

Officer and

since that

date serves as a member of the board of

directors. Our success will depend upon our ability to retain key

members of

our management

team and

to hire

new members

as may

be necessary.

The loss

of any

of

these individuals could adversely

affect our business prospects

and financial condition. Difficulty

in hiring

and retaining replacement personnel could have

a similar effect. We do not currently, nor do we intend to,

maintain “key man” life insurance on any of our officers or other members of

our management team.

Technological

innovation

and

quality

and

efficiency

requirements

from

our

customers

could

reduce our charter hire income and the value of our vessels.

Our customers have a high and increasing focus on quality and compliance standards with their suppliers

across

the

entire

supply

chain,

including

the

shipping

and

transportation

segment.

Our

continued

compliance with these

standards and quality

requirements is vital

for our operations.

The charter hire

rates

and the value and operational life

of a vessel are determined by a number

of factors including the vessel’s

efficiency, operational flexibility and physical

life. Efficiency includes

speed, fuel economy

and the ability

to

load

and

discharge

cargo quickly.

Flexibility includes

the

ability to

enter harbors,

utilize related

docking

facilities and pass through canals and straits. The length of a vessel’s physical life is

related to its original

design and construction, its maintenance and the impact of the stress

of operations. We face competition

from

companies

with

more

modern

vessels

having

more

fuel

efficient

designs

than

our

vessels, or

eco

vessels, and if

new dry bulk

vessels are built

that are

more efficient or

more flexible or

have longer

physical

lives than the current eco vessels, competition from the current eco vessels and any more technologically

32

advanced vessels could adversely

affect the amount

of charter hire payments

we receive for our

vessels

and

the

resale

value

of

our

vessels

could

significantly

decrease.

Similarly,

technologically

advanced

vessels are

needed to

comply with

environmental laws the

investment in

which along

with the

foregoing

could have a material adverse effect on

our results of operations, charter hire payments and resale value

of vessels. This could

have an adverse effect

on our results of

operations, cash flows, financial condition

and ability to pay dividends.

We may

not have adequate

insurance to

compensate us if

we lose

our vessels or

to compensate

third parties.

We procure

insurance for

our fleet

against risks

commonly insured

against by

vessel owners

and operators.

Our

current

insurance

includes

hull

and

machinery

insurance,

war

risks

insurance

and

protection

and

indemnity

insurance

(which

includes

environmental

damage

and

pollution

insurance).

We

can

give

no

assurance that we are

adequately insured against all risks

or that our insurers

will pay a particular

claim.

Even if

our insurance

coverage is

adequate to

cover our

losses, we

may not

be able

to timely

obtain a

replacement vessel

in the

event of

a loss.

Furthermore, in

the future,

we may

not be

able to

obtain adequate

insurance

coverage at

reasonable rates

for

our fleet.

We

may

also

be

subject to

calls,

or

premiums, in

amounts based not only

on our own

claim records but

also the claim records

of all other members

of the

protection

and

indemnity

associations

through

which

we

receive

indemnity

insurance

coverage

for

tort

liability.

Our

insurance

policies

also

contain

deductibles,

limitations

and

exclusions

which,

although

we

believe are standard in the shipping industry, may nevertheless increase our costs.

Our

vessels

may

suffer

damage

and

we

may

face

unexpected

drydocking

costs,

which

could

adversely affect our cash flow and financial condition.

If our vessels suffer

damage, they may need

to be repaired at

a drydocking facility.

The costs of drydock

repairs are unpredictable

and can be substantial.

The loss of earnings

while a vessel is

being repaired and

repositioned, as well as the actual

cost of these repairs not covered

by our insurance, would decrease

our

earnings and available cash. We

may not have insurance that

is sufficient to cover

all or any of the

costs

or losses for damages

to our vessels and

may have to pay

drydocking costs not

covered

by our insurance.

The aging of our fleet may result in increased operating costs in the future, which could adversely

affect our earnings.

In general,

the cost

of maintaining

a vessel

in good

operating condition

increases with

the age

of the

vessel.

As of the

date of this

annual report, our

fleet consists of

41 vessels of

which 39 in

operation, owned and

chartered-in, having a combined carrying capacity of 4.4 million dead weight tons, or dwt, and a weighted

average age of

10.4 years and

two Kamsarmax vessels

under construction.

As our fleet

ages, we will

incur

increased

costs.

Older

vessels

are

typically

less

fuel

efficient

and

more

costly

to

maintain

than

more

recently constructed vessels

due to improvements

in engine technology.

Cargo insurance rates

increase

with the age of a vessel, making older vessels less desirable to charterers.

Governmental regulations and

safety

or

other

equipment

standards

the

age

of

vessels

may

also

require

expenditures

for

alterations or the addition of new

equipment to our vessels and may restrict

the type of activities in which

our

vessels may

engage. We

cannot assure

you that,

as our

vessels age,

market conditions

will

justify

those expenditures or

enable us to

operate our vessels

profitably during the

remainder of their

useful lives.

We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm

our reported revenue and results of operations.

We generate

all of

our revenues

in U.S.

dollars but incur

around half of

our operating

expenses and our

general and administrative expenses in currencies other than the U.S. dollar, primarily the Euro. Because

a significant portion of

our expenses is incurred

in currencies other

than the U.S. dollar, our expenses

may

from time to

time increase relative

to our revenues

as a result

of fluctuations in

exchange rates, particularly

33

between the U.S. dollar and the Euro,

which could affect the amount of net

income that we report in future

periods. While

we historically

have not

mitigated the

risk associated

with exchange

rate fluctuations

through

the use of financial derivatives, we

may employ such instruments from

time to time in the future

in order to

minimize this risk. Our use of

financial derivatives would involve

certain risks, including the risk

that losses

on a

hedged position

could exceed

the nominal

amount invested

in the

instrument and

the risk

that the

counterparty to the derivative transaction

may be unable or

unwilling to satisfy its

contractual obligations,

which could have an adverse effect on our results.

We depend

upon a few

significant customers for a

large part of

our revenues and the

loss of one

or more of these customers could adversely affect our financial performance.

We have historically

derived a significant part

of our revenues from

a small number of

charterers. During

2023, 2022, and

2021, approximately

13%, 34%

and 10%, respectively, of

our revenues

were derived

from

one,

two

and

one

charterers,

respectively.

If

one

or

more

of

our

charterers

chooses

not

to

charter

our

vessels

or

is

unable

to

perform

under

one

or

more

charters

with

us

and

we

are

not

able

to

find

a

replacement charter, we could suffer

a loss of revenues that could adversely affect our financial condition

and results of operations.

We are a holding company, and we

depend on the ability of our subsidiaries to distribute funds to

us in order to satisfy our financial obligations.

We are a holding company and our subsidiaries conduct all of our operations and own all of our

operating

assets. We

have no significant

assets other than

the equity

interests in our

subsidiaries. As a

result, our

ability to satisfy our financial obligations depends on our subsidiaries and their ability to distribute

funds to

us.

If

we

are

unable

to

obtain

funds

from

our

subsidiaries,

we

may

not

be

able

to

satisfy

our

financial

obligations.

Certain of our vessels

are owned through joint

ventures that we have entered

into, and our views

about

the

operations

of

those

vessels

may

differ

from

our

joint

venture

partners

and

adversely

affect our interest in the joint ventures.

We have entered into

two joint venture arrangements pursuant to

which we own minority interests in

four

CSOV newbuilding

contracts through

Windward Offshore

GmbH &

Co. KG

and one

dry bulk

vessel through

Bergen Ultra,

and we

may enter

into additional

joint venture

arrangement in

the future. As

a minority

interest

holder

in

these

joint

ventures,

we

share

voting

and

operational

control

of

these

joint

ventures

and

the

operations of these vessel that we own through these joint ventures. Our joint venture

partners may have

interests that are

different from ours

which may result in

conflicting views as to

the operation the vessels

owned by

the joint

ventures or

the

conduct of

the business

of the

joint venture.

We

may

not be

able to

resolve such conflicts in our favor and such conflicts

or differing view could have a material adverse effect

on our interest in the joint venture or our business in general.

Because we

are organized

under the

laws of

the Marshall

Islands, it

may be

difficult to

serve us

with legal process or enforce judgments against us, our directors

or our management.

We are

organized under

the laws

of the

Marshall Islands,

and substantially

all of

our assets

are located

outside of the United States. In addition, the majority of our directors and officers are non-residents of the

United States, and all or a substantial portion of the assets of these non-residents are located outside the

United States.

As a

result, it

may be

difficult or

impossible for

someone to

bring an

action against

us or

against these

individuals in

the

United

States if

they

believe that

their

rights

have been

infringed under

securities laws or

otherwise. Even if

you are successful

in bringing an

action of this

kind, the laws

of the

Marshall Islands and of other jurisdictions may prevent or restrict them from enforcing a judgment against

our assets or the assets of our directors or officers.

34

The international nature of our operations may make the

outcome of any bankruptcy proceedings

difficult to predict.

We are incorporated under the laws of the Republic of the

Marshall Islands and we conduct operations in

countries

around

the

world.

Consequently,

in

the

event

of

any

bankruptcy,

insolvency,

liquidation,

dissolution, reorganization or

similar proceeding involving

us or

any of

our subsidiaries,

bankruptcy laws

other

than

those

of

the

United

States

could

apply.

If

we

become

a

debtor

under

U.S.

bankruptcy

law,

bankruptcy

courts

in

the

United

States

may

seek

to

assert

jurisdiction

over

all

of

our

assets,

wherever

located, including

property situated

in other countries.

There can

be no assurance,

however, that we would

become

a

debtor

in

the

United

States,

or

that

a

U.S.

bankruptcy

court

would

be

entitled

to,

or

accept,

jurisdiction over such a

bankruptcy case, or

that courts in other

countries that have

jurisdiction over us

and

our operations would recognize a

U.S. bankruptcy court’s jurisdiction

if any other bankruptcy

court would

determine it had jurisdiction.

If we

expand our

business further,

we may

need to

improve our

operating and

financial systems

and will need to recruit suitable employees and crew for our vessels.

Our current operating and financial

systems may not be adequate

if we further expand the size

of our fleet

and our attempts to

improve those systems may be

ineffective. In addition, if we

expand our fleet further,

we

will

need

to

recruit

suitable

additional

seafarers

and

shoreside

administrative

and

management

personnel. While we have not

experienced any difficulty in recruiting

to date, we cannot guarantee

that we

will

be

able

to

continue

to

hire

suitable

employees

if

we

expand

our

fleet.

If

we

or

our

crewing

agents

encounter business or

financial difficulties,

we may not

be able to

adequately staff our

vessels. If we

are

unable to grow our financial and

operating systems or to recruit suitable employees

should we determine

to expand our fleet, our financial

performance may be adversely affected, among other things.

We may have to pay tax on U.S. source income, which would reduce

our earnings.

Under

the

U.S.

Internal

Revenue

Code

of

1986, as

amended,

or

the

Code,

50%

of

the

gross

shipping

income

of

a

vessel-owning

or

chartering

corporation,

such

as

ourselves

and

our

subsidiaries,

that

is

attributable to

transportation that

begins or

ends, but

that does

not both

begin and

end, in

the United

States

is characterized as

U.S. source shipping

income and such

income is generally

subject to a

4% U.S. federal

income tax

without allowance

for deductions,

unless that

corporation qualifies

for exemption

from tax under

Section 883 of the Code and the Treasury Regulations promulgated thereunder.

We expect that

we and each

of our subsidiaries

qualify for this

statutory tax exemption

for the 2023

taxable

year and

we will take

this position

for U.S. federal

income tax return

reporting purposes. However,

there

are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption

in future years

and thereby

become subject

to U.S.

federal income

tax on

our U.S. source

shipping income.

For example, in

certain circumstances we

may no longer

qualify for exemption

under Code Section 883

for

a particular taxable year if shareholders, other than “qualified shareholders”, with a five percent or greater

interest in our common shares owned, in the aggregate, 50% or more of our outstanding common shares

for more

than half

the days

during the

taxable year.

Due to

the factual

nature of the

issues involved, we

can give no assurances on our tax-exempt status or that of any of our subsidiaries.

If we or

our subsidiaries are not

entitled to this exemption

under Section 883 of

the Code for any

taxable

year, we or our subsidiaries would

be subject for those

years to a 4%

U.S. federal income

tax on our gross

U.S.-source shipping income. The imposition of this taxation

could have a negative effect on our business

and would

result in

decreased earnings

available for

distribution to

our shareholders,

although, for

the 2023

taxable year, we estimate

our maximum

U.S. federal

income tax

liability to be

immaterial if we

were subject

to

this

U.S.

federal

income

tax.

See

“Item

10.

Additional

Information—E.

Taxation"

for

a

more

comprehensive discussion of U.S. federal income tax considerations.

35

U.S. federal tax authorities

could treat us as

a “passive foreign investment

company”, which could

have adverse U.S. federal income tax consequences to U.S. shareholders.

A foreign corporation will be treated as a

“passive foreign investment company”, or PFIC, for U.S. federal

income tax purposes if

either (1) at least 75%

of its gross income

for any taxable year

consists of certain

types of “passive income”

or (2) at least 50% of

the average value of the

corporation's assets produce or

are

held

for

the

production

of

those

types

of

“passive

income.”

For

purposes

of

these

tests,

“passive

income” includes

dividends, interest,

gains from

the sale

or exchange

of investment

property,

and rents

and royalties

other than rents

and royalties which

are received

from unrelated parties

in connection with

the

active

conduct

of

a

trade

or

business.

For

purposes

of

these

tests,

income

derived

from

the

performance of services does not constitute “passive income.” U.S. shareholders of a PFIC are subject to

a disadvantageous

U.S. federal

income tax

regime with

respect to

the income

derived by

the PFIC,

the

distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition

of their shares in the PFIC.

Based on

our current

and proposed

method of

operation, we

do not

believe that

we will

be a

PFIC with

respect to any taxable

year. In this regard, we intend

to treat the gross income

we derive or are

deemed to

derive from

our time

chartering activities

as services

income, rather

than rental

income. Accordingly,

we

believe that

our income

from our

time chartering activities

does not

constitute “passive

income,” and the

assets that we own and operate in connection with

the production of that income do not constitute assets

that produce or are held for the production of “passive income”.

There

is

substantial

legal

authority

supporting

this

position

consisting

of

case

law

and

U.S.

Internal

Revenue Service, or “IRS”, pronouncements concerning the characterization of income derived from time

charters and voyage charters as services income for other

tax purposes. However, it should be noted that

there

is

also

authority

which

characterizes

time

charter

income

as

rental

income

rather

than

services

income for other tax

purposes. Accordingly,

no assurance can be given

that the IRS or a

court of law will

accept this position, and there is a risk

that the IRS or a court of

law could determine that we are a PFIC.

Moreover, no assurance can be

given that we

would not constitute

a PFIC for any

future taxable year

if the

nature and extent of our operations changed.

If the

IRS or

a court

of law

were to

find that

we are

or have

been a

PFIC for

any taxable

year,

our U.S.

shareholders would

face adverse

U.S. federal

income tax

consequences. Under

the PFIC

rules, unless

those shareholders make

an election available

under the Code

(which election could

itself have adverse

consequences for such shareholders),

such shareholders would

be subject to

U.S. federal income

tax at

the then

prevailing U.S.

federal income

tax rates

on ordinary

income plus

interest upon

excess distributions

and upon any gain

from the disposition of

our common stock,

as if the excess

distribution or gain

had been

recognized ratably

over the

shareholder's holding

period of

our common

stock. See

“Item 10.

Additional

Information—E.

Taxation–United

States

Taxation

of

U.S.

Holders–PFIC

Status

and

Significant

Tax

Consequences" for

a more

comprehensive discussion

of the

U.S. federal

income tax

consequences to

U.S.

holders of our common stock if we are or were to be treated as a PFIC.

Changes in tax

laws and unanticipated

tax liabilities could

materially and adversely

affect the taxes

we pay, results of operations and financial results.

We are subject to income and other taxes in the United States and foreign jurisdictions, and our results of

operations and financial

results may be

affected by tax and

other initiatives around

the world. For

instance,

there is a high level of uncertainty in

today’s tax environment stemming from global initiatives put forth by

the

Organisation

for

Economic

Co-operation

and

Development’s

(“OECD”)

two-pillar

base

erosion

and

profit

shifting

project.

In

October

2021,

members

of

the

OECD

put

forth

two

proposals:

(i)

Pillar

One

reallocates profit to the market

jurisdictions where sales arise

versus physical presence; and

(ii) Pillar Two

compels multinational corporations with €750 million

or more in annual

revenue to pay a

global minimum

tax of 15% on income

received in each country in

which they operate. The reforms

aim to level the playing

36

field between countries by discouraging

them from reducing their

corporate income taxes to

attract foreign

business investment. Over 140 countries agreed to enact

the two-pillar solution to address the challenges

arising from the

digitalization of the

economy and, in

2024, these guidelines

were declared effective

and

must now be enacted by those OECD member

countries. It is possible that these guidelines,

including the

global

minimum

corporate

tax

rate

measure

of

15%,

could

increase

the

burden

and

costs

of

our

tax

compliance, the

amount of

taxes

we

incur in

those

jurisdictions and

our

global effective

tax

rate,

which

could have a material adverse impact on our results of operations and

financial results.

Risks Relating to Our Common Stock

We cannot

assure you that

our board of

directors will continue to

declare dividends on shares

of

our common stock in the future.

In order to position us to take advantage of market opportunities in a then-deteriorating market, our board

of directors, beginning with the fourth quarter of 2008, suspended

our common stock dividend. As a result

of improving market conditions in 2021, our

board of directors elected to declare quarterly dividends from

the fourth

quarter of

2021 until

the first

quarter of

2024 and

two special

non-cash dividends.

The actual

declaration of future

cash dividends, and

the establishment of

record and payment

dates, is subject

to final

determination

by

our

board

of

directors

each

quarter

after

its

review

of

the

company's

financial

performance.

We

cannot

assure

you

that

our

board

of

directors

will

declare

and

pay

dividends

going

forward. Our dividend policy

is assessed by

our board of

directors from time to

time, based on

prevailing

market conditions,

available cash, uses of capital, contingent liabilities, the terms of our loan facilities, our

growth strategy and other

cash needs, the requirements

of Marshall Islands law

and other factors deemed

relevant

to

our

board

of

directors.

In

addition,

other

external

factors,

such

as

our

lenders

imposing

restrictions on our

ability to pay

dividends.

Under the terms

of our agreements,

we may not

be permitted

to

pay

dividends

that

would

result

in

an

event

of

default

or

if

an

event

of

default

has

occurred

and

is

continuing.

Our strategy contemplates that we will finance the acquisition of additional vessels through a combination

of debt

and equity

financing on

terms acceptable

to us.

If financing

is not

available to

us on

acceptable

terms, our board

of directors

may determine to

finance or refinance

acquisitions with cash

from operations,

which could also reduce or even eliminate the amount of cash available

for the payment of dividends.

Marshall

Islands

law

generally

prohibits

the

payment

of

dividends

other

than

from

surplus

(retained

earnings and

the excess

of consideration

received for

the sale of

shares above

the par value

of the shares)

or while

a company

is insolvent

or would

be rendered

insolvent by

the payment

of such

a dividend.

We

may not have sufficient surplus in the future to pay dividends.

In

addition, our

ability to

pay dividends

to holders

of our

common shares

will be

subject to

the rights

of

holders

of

our

Series

B

Preferred

Shares,

which

rank

senior

to

our

common

shares

with

respect

to

dividends,

distributions and

payments

upon

liquidation. No

cash dividend

may

be

paid

on

our

common

stock unless full cumulative dividends have been or contemporaneously are being paid or provided for on

all outstanding

Series B

Preferred Shares

for all

prior and

the then-ending

dividend periods.

Cumulative

dividends

on

our

Series

B

Preferred

Shares

accrue

at

a

rate

of

8.875%

per

annum

per

$25.00

stated

liquidation preference

per Series

B Preferred

Share, subject

to increase

upon the

occurrence of

certain

events, and are payable, as and if

declared by our board of directors,

on January 15, April 15, July

15 and

October 15 of each year, or, if any such dividend payment date otherwise would

fall on a date that is not a

business

day,

the

immediately succeeding

business

day.

For

additional information

about

our

Series

B

Preferred Shares, please see the section entitled "Description of Registrant's Securities to be Registered"

of our

registration statement

on Form

8-A filed

with the

SEC on

February 13,

2014 and

incorporated by

reference herein.

37

The

market

prices

and

trading

volume

of

our

shares

of

common

stock

may

experience

rapid

and

substantial price

volatility, which

could cause

purchasers of

our common

stock to

incur substantial

losses.

Our shares of our common stock may experience

similar rapid and substantial price volatility unrelated

to our financial

performance, which

could cause purchasers

of our common

stock to incur

substantial

losses,

which

may

be

unpredictable

and

not

bear

any

relationship

to

our

business

and

financial

performance. Extreme fluctuations in

the market price of

our common stock may

occur in response to

strong

and

atypical

retail

investor

interest,

including

on

social

media

and

online

forums,

the

direct

access by retail investors

to broadly available trading

platforms, the amount and

status of short interest

in

our

common

stock

and

our

other

securities,

access

to

margin

debt,

trading

in

options

and

other

derivatives on our shares of common

stock and any related hedging

and other trading factors:

If

there

is

extreme

market

volatility

and

trading

patterns

in

our

common

stock,

it

may

create

several

risks for purchasers of

our shares, including the following:

●

the market

price

of our

common stock

may

experience

rapid and

substantial

increases or

decreases

unrelated

to

our

operating

performance

or

prospects,

or

macro

or

industry

fundamentals;

●

if

our

future

market

capitalization

reflects

trading

dynamics

unrelated

to

our

financial

performance or

prospects, purchasers

of our

common stock

could incur

substantial losses

as prices decline once

the level of market volatility

has abated;

●

if the

future market

price of

our common

stock declines,

purchasers of

shares of

common

stock in this offering may be unable to

resell such shares at or above the price

at which they

acquired

them.

We

cannot

assure

such

purchasers

that

the

market

of

our

common

stock

will not fluctuate or decline significantly in the

future, in which case investors in this offering

could incur substantial losses.

Further, we may

incur rapid and

substantial increases

or decreases

in our common

stock price in

the

foreseeable future

that may

not coincide

in timing

with the

disclosure of

news or

developments by

or

affecting us.

Accordingly, the

market price

of our

common stock

may fluctuate

dramatically, and

may

decline

rapidly,

regardless

of

any

developments

in

our

business.

Overall,

there

are

various

factors,

many

of

which

are

beyond

our

control,

that

could

negatively

affect

the

market

price

of

our

common

stock or result in

fluctuations in the price or trading

volume of our common

stock, including:

●

actual or anticipated variations in our annual or quarterly

results of operations, including our

earnings estimates and whether we

meet market expectations with regard

to our earnings;

●

our ability to pay dividends or

other distributions;

●

publication

of

research

reports

by

analysts

or

others

about

us

or

the

shipping

industry

in

which we

operate which

may be

unfavorable, inaccurate,

inconsistent or

not disseminated

on a regular basis;

●

changes in market valuations of similar

companies;

●

market reaction

to any

additional

equity, debt

or other

securities that

we may

issue in

the

future, and which may or

may not dilute the holdings

of our existing stockholders;

●

additions or departures of key

personnel;

38

●

actions by institutional or

significant stockholders;

●

short interest in our

common stock or our

other securities and the market

response to such

short interest;

●

the

dramatic

increase

in

the

number

of

individual

holders

of

our

common

stock

and

their

participation in social media platforms

targeted at speculative investing;

●

speculation in the press or investment community about our company or industries in which

we operate;

●

strategic actions by us or

our competitors, such as

acquisitions or other investments;

●

legislative, administrative, regulatory or

other actions affecting our business,

our industry;

●

investigations, proceedings, or litigation

that involve or affect

us;

●

the occurrence of

any of the

other risk factors

included in this

registration statement of

which

this prospectus forms a part;

and

●

general market and economic

conditions.

Since we are

incorporated in the Marshall

Islands, which does

not have a

well-developed body of

corporate law, you

may have more difficulty

protecting your interests than

shareholders of a U.S.

corporation.

Our corporate affairs are governed by our amended and restated articles of incorporation and bylaws and

by

the

Marshall

Islands

Business

Corporations

Act,

or

the

BCA.

The

provisions

of

the

BCA

resemble

provisions of the

corporation laws of

a number of

states in the

United States. However,

there have been

few judicial cases in the

Marshall Islands interpreting the BCA. The

rights and fiduciary responsibilities of

directors under the

laws of the

Marshall Islands are

not as clearly

established as the

rights and fiduciary

responsibilities of

directors under statutes

or judicial

precedent in existence

in the United

States. The

rights

of

shareholders

of

the

Marshall

Islands

may

differ

from

the

rights

of

shareholders

of

companies

incorporated in the United States. While the BCA

provides that it is to be interpreted according to the

laws

of the State of Delaware and other states with substantially similar legislative provisions, there have been

few, if any, court

cases interpreting

the BCA

in the

Marshall Islands

and we

cannot predict

whether Marshall

Islands courts

would reach

the same

conclusions as

U.S. courts.

Thus, you

may have

more difficulty

in

protecting your

interests in

the face

of actions

by the

management, directors

or controlling

shareholders

than

would

shareholders

of

a

corporation

incorporated

in

a

U.S.

jurisdiction

which

has

developed

a

relatively more substantial body of case law.

As a

Marshall Islands

corporation and

with some

of our

subsidiaries being

Marshall Islands

entities

and

also

having

subsidiaries

in

other

offshore

jurisdictions,

our

operations

may

be

subject

to

economic substance requirements, which could impact our business.

We

are

a

Marshall

Islands

corporation

and

some

of

our

subsidiaries

are

Marshall

Islands

entities.

The

Marshall Islands has

enacted economic substance laws and

regulations with which we

may be obligated

to

comply.

We

believe

that

we

and

our

subsidiaries

are

compliant

with

the

Marshall

Islands

economic

substance requirements. However, if there were a change in the requirements or interpretation thereof, or

if there were

an unexpected

change to our

operations, any

such change

could result

in noncompliance

with

the economic substance legislation and

related fines or other

penalties, increased monitoring and audits,

and dissolution of the non-compliant entity,

which could have an adverse effect on our business, financial

condition or operating results.

39

EU Finance ministers rate jurisdictions for tax rates and tax transparency,

governance and real economic

activity.

Countries that are

viewed by such

finance ministers as

not adequately cooperating,

including by

not implementing sufficient

standards in

respect of the

foregoing, may be

put on a

“grey list” or

a “blacklist”.

Effective as

of October 17,

2023 the Marshall

Islands has

been designated as

a cooperating

jurisdiction

for tax

purposes. If

the Marshall

Islands is

added to

the list

of non-cooperative

jurisdictions in

the future

and sanctions or other financial, tax or regulatory measures were applied by

European Member States to

countries on

the list

or further

economic substance requirements

were imposed

by the

Marshall Islands,

our business could be harmed.

Certain existing

shareholders will

be able

to exert

considerable influence

over matters

on which

our shareholders are entitled to vote.

As

of

the

date

of

this

annual

report,

Mrs.

Semiramis

Paliou,

our

Chief

Executive

Officer

and

Director,

beneficially owns 23,750,097 shares, or approximately 19.8% of

our outstanding common stock, which is

held indirectly

through entities

over which

she exercises

sole voting

power.

Mrs. Paliou

controls 10,675

shares of

Series C

Preferred Stock,

par value

$0.01 per

share, issued

on January

31, 2019,

and 400

shares

of Series D

Preferred Stock,

issued on

June 22,

2021. The

Series C Preferred

Stock vote

with our common

shares and

each share

of the

Series C

Preferred Stock

entitles the

holder thereof

to 1,000

votes on

all

matters submitted to a vote of the common stockholders of the Issuer.

The Series D Preferred Stock vote

with

the

common

shares of

the

Company,

and

each share

of

the

Series D

Preferred

Stock

entitles the

holder thereof

to up

to 200,000

votes, on

all matters

submitted

to a

vote of

the stockholders

of the

Company,

provided however, that

to the extent the

total number of votes one

or more holders of Series

D Preferred

Stock is entitled

to vote (including

any voting power

of such holders

derived from Series

D Preferred

Stock,

shares of

Common Stock

or any

other voting

security of

the Company

issued and

outstanding as

of the

date hereof or

that may be

issued in the

future) on any

matter submitted to

a vote of

stockholders of the

Company

would

exceed

36%

of

the

total

number

of

votes

eligible

to

be

cast

on

such

matter,

the

total

number of

votes that

holders of

Series D

Preferred Stock

may exercise

derived from

the Series

D Preferred

Stock together with

Common Shares and

any other voting

securities of the

Company beneficially owned

by such holder,

shall be reduced to 36% of

the total number of votes entitled to

vote on any matter put to

stockholders of the Company.

Through her beneficial ownership of common shares

and shares of Series

C

Preferred

Stock

and

Series

D

Preferred

Stock,

Mrs.

Paliou

controls

36%

of

the

vote

of

any

matter

submitted to the vote

of the common shareholders.

Please see "Item 7.

Major Shareholders and Related

Party Transactions—A. Major

Shareholders." While Mrs. Paliou and the entities

controlled by Mrs. Paliou

have no

agreement, arrangement

or understanding

relating to

the voting

of their

shares of

our common

stock, they

are able

to influence

the outcome

of matters

on which

our shareholders

are entitled

to vote,

including the election of directors and other significant corporate actions. This concentration of ownership

may

have

the

effect

of

delaying,

deferring

or

preventing

a

change

in

control,

merger,

consolidation,

takeover or other

business combination.

This concentration of

ownership could

also discourage a

potential

acquirer from

making a

tender offer or

otherwise attempting

to obtain

control of

us, which

could in

turn have

an adverse effect

on the market

price of our

shares. So long

as our

Chief Executive Officer

continues to

own a significant amount

of our equity,

even though the amount

held by her represents

less than 50% of

our voting power,

she will continue to

be able to exercise

considerable influence over our

decisions. The

interests of these shareholders may be different from your interests.

Future sales of our common stock could cause the market price

of our common stock to decline.

Our amended

and restated

articles of

incorporation authorize

us to

issue up

to 1,000,000,000

shares of

common stock, of which, as

of December 31, 2023, 113,065,725 shares were outstanding.

The number of

shares of

common stock available

for sale

in the public

market is limited

by restrictions applicable

under

securities laws

and agreements

that we

and our

executive officers,

directors and

principal shareholders

have entered into.

40

Sales of a substantial

number of shares of our

common stock in the public

market, or the perception that

these

sales

could

occur,

may

depress the

market

price

for

our

common

stock.

These

sales

could

also

impair our ability to raise additional capital through the sale of our equity

securities in the future.

Anti-takeover

provisions

in

our

organizational

documents

could

make

it

difficult

for

our

shareholders to

replace or

remove our

current board

of directors

or have

the effect

of discouraging,

delaying or

preventing a

merger or

acquisition, which

could adversely

affect

the market

price of

our common stock.

Several provisions of our amended and

restated articles of incorporation and

bylaws could make it difficult

for our shareholders to change the composition of our board

of directors in any one year, preventing them

from changing the composition

of management. In

addition, the same

provisions may discourage,

delay or

prevent a merger or acquisition that shareholders may consider

favorable.

These provisions include:

●

authorizing

our board

of directors

to

issue “blank

check” preferred

stock without

shareholder

approval;

●

providing for a classified board of directors with staggered, three-year

terms;

●

prohibiting cumulative voting in the election of directors;

●

authorizing

the

removal of

directors

only for

cause and

only

upon

the

affirmative

vote

of

the

holders

of

a

majority

of

the

outstanding shares

of

our

common

stock

entitled

to

vote

for

the

directors;

●

prohibiting shareholder action by written consent;

●

limiting the persons who may call special meetings of shareholders;

and

●

establishing advance notice requirements for nominations for election to our board of directors

or for proposing matters that can be acted on by shareholders at shareholder

meetings.

In addition,

we have

adopted a

Stockholders Rights

Agreement, dated

January 15,

2016, pursuant

to which

our board of directors may cause the substantial dilution

of any person that attempts to acquire us without

the approval of our board of directors.

These

anti-takeover

provisions,

including

provisions

of

our

Stockholders

Rights

Agreement,

could

substantially impede the ability of public shareholders to benefit from a change in control and, as a result,

may adversely affect the

market price of our

common stock and

your ability to

realize any potential

change

of control premium.

Our Series B Preferred Shares

are senior obligations of ours

and rank prior to our common

shares

with

respect

to

dividends,

distributions

and

payments

upon

liquidation,

which

could

have

an

adverse effect on the value of our common shares.

The rights of the holders

of our Series B Preferred Shares

rank senior to the obligations to

holders of our

common shares. Upon our liquidation, the holders of Series

B Preferred Shares will be entitled to receive

a liquidation preference

of $25.00 per share,

plus all accrued but

unpaid dividends, prior and

in preference

to any distribution to the holders of any other class of our equity securities, including our common shares.

The existence of the Series B Preferred

Shares could have an adverse effect on the value

of our common

shares.

41

Risks Relating to Our Series B Preferred Stock

We may not have

sufficient cash from our operations to

enable us to pay dividends on

our Series

B Preferred Shares following the payment of expenses and the establishment

of any reserves.

We

pay quarterly

dividends on

our Series

B Preferred

Shares only

from funds

legally available

for such

purpose when,

as and

if

declared by

our board

of

directors. We

may

not have

sufficient

cash available

each

quarter to

pay dividends.

The amount

of

dividends we

can pay

on our

Series B

Preferred Shares

depends upon the amount of cash we generate from and use in

our operations, which may fluctuate.

The

amount of

cash we

have

available for

dividends on

our Series

B Preferred

Shares will

not

depend

solely on our

profitability. The

actual amount of cash

we have available to

pay dividends on our

Series B

Preferred Shares depends on many factors, including

the following:

●

changes in

our operating

cash flow, capital expenditure

requirements, working

capital requirements

and other cash needs;

●

restrictions under our existing or future credit facilities or any future debt securities

on our ability to

pay dividends if an

event of default has

occurred and is

continuing or if

the payment of the

dividend

would result in

an event of

default, or under

certain facilities

if it would

result in the

breach of certain

financial covenants;

●

the amount of any cash reserves established by our board of directors;

and

●

restrictions under

Marshall Islands

law,

which generally

prohibits the

payment of

dividends other

than from

surplus (retained

earnings and

the excess

of consideration

received for

the sale

of shares

above the par value of the shares) or while a company is insolvent or would be rendered insolvent

by the payment of such a dividend.

The amount of cash we generate from our operations may differ materially

from our net income or loss for

the period, which

is affected by

non-cash items, and

our board of

directors in its discretion

may elect not

to declare

any dividends.

As a

result of

these and

the other

factors mentioned

above, we

may pay

dividends

during

periods

when

we

record

losses

and

may

not

pay

dividends

during

periods

when

we

record

net

income.

The Series B Preferred Shares represent perpetual equity

interests.

The Series B

Preferred Shares represent

perpetual equity interests

in us and,

unlike our indebtedness,

will

not give

rise to

a claim for

payment of a

principal amount at

a particular date.

As a

result, holders of

the

Series

B Preferred

Shares may

be required

to

bear the

financial risks

of

an investment

in the

Series B

Preferred Shares for an indefinite period

of time. In addition, the Series

B Preferred Shares will rank junior

to all our

indebtedness and other

liabilities, and to

any other senior

securities we may

issue in the

future

with respect to assets available to satisfy claims against us.

Our Series

B Preferred

Shares are

subordinate to

our indebtedness,

and your

interests could

be

diluted

by

the

issuance

of

additional

preferred

shares,

including

additional

Series

B

Preferred

Shares, and by other transactions.

Our Series B Preferred Shares are subordinated to all of our existing and future indebtedness. Therefore,

our ability to pay dividends on, redeem

or pay the liquidation preference on

our Series B Preferred Shares

in liquidation or

otherwise may be

subject to prior

payments due to

the holders of

our indebtedness. Our

existing indebtedness restricts, and our future indebtedness may include restrictions on, our

ability to pay

42

dividends on

or

redeem preferred

shares. Our

amended and

restated

articles of

incorporation currently

authorize the issuance

of up to

50,000,000 preferred

shares, par value

$0.01 per share.

Of these preferred

shares, 1,000,000 shares have been

designated Series A Participating

Preferred Stock, 5,000,000 shares

have been

designated Series

B Preferred

Shares, 10,675

are designated

as Series

C Preferred

Shares

and 400 are designated as

Series D Preferred Shares. The

Series B Preferred Shares are

senior in rank

to the

Series A

Participating Preferred

Shares. The

issuance of

additional Series

B Preferred

Shares or

other preferred shares

on a parity

with or senior

to the Series B

Preferred Shares would

dilute the interests

of holders of our

Series B Preferred Shares, and any issuance

of preferred shares senior to

our Series B

Preferred Shares or of additional indebtedness could affect our ability to pay dividends on, redeem or pay

the liquidation preference

on our Series

B Preferred Shares.

The Series B

Preferred Shares do

not contain

any provisions

affording the

holders of

our Series

B Preferred

Shares protection

in the

event of

a highly

leveraged or other transaction,

including a merger or the

sale, lease or conveyance

of all or substantially

all our assets

or business, which might

adversely affect the

holders of our Series

B Preferred Shares, so

long as the rights of our Series B Preferred Shares are not directly

materially and adversely affected.

We may redeem the

Series B Preferred

Shares, and you

may not be

able to reinvest

the redemption

price you receive in a similar security.

Since February 14, 2019, we

may, at our option, redeem Series B Preferred Shares,

in whole or in part, at

any time or from time to time. We may have an incentive to redeem Series B Preferred Shares voluntarily

if market conditions allow us

to issue other preferred shares

or debt securities at a

rate that is lower than

the dividend

on the

Series B

Preferred Shares.

If we

redeem Series

B Preferred

Shares, then

from and

after the

redemption date,

your dividends

will cease

to accrue

on your

Series B

Preferred Shares,

your

Series B Preferred Shares shall no longer be deemed outstanding and all your rights as a holder of those

shares

will

terminate,

except

the

right

to

receive

the

redemption

price

plus

accumulated

and

unpaid

dividends, if any,

payable upon redemption. If

we redeem the

Series B Preferred

Shares for any

reason,

you may not be able to reinvest the redemption price you receive

in a similar security.

Market interest rates may adversely affect the value of our Series B Preferred

Shares.

One of

the factors that

may influence the

price of

our Series B

Preferred Shares is

the dividend yield

on

the Series B Preferred Shares

(as a percentage of the

price of our Series B

Preferred Shares) relative to

market

interest

rates.

An

increase

in

market

interest

rates,

which

are

currently

at

low

levels

relative

to

historical

rates,

may

lead

prospective

purchasers

of

our

Series

B

Preferred

Shares

to

expect

a

higher

dividend yield, and

higher interest rates

would likely increase

our borrowing costs

and potentially decrease

funds available for

distribution. Accordingly,

higher market

interest rates could

cause the

market price of

our Series B Preferred Shares to decrease.

As a holder of Series B Preferred Shares you have extremely

limited voting rights.

Your voting rights as a holder of Series

B Preferred Shares are

extremely limited. Our common

shares are

the only outstanding class or series of our shares carrying full voting rights. Holders of Series B Preferred

Shares have

no voting

rights other

than the

ability,

subject to

certain exceptions,

to elect

one director

if

dividends for six

quarterly dividend

periods (whether

or not consecutive)

payable on

our Series B

Preferred

Shares are in arrears and certain other limited protective voting

rights.

Our

ability

to

pay

dividends

on

and

to

redeem

our

Series

B

Preferred

Shares

is

limited

by

the

requirements of Marshall Islands law.

Marshall Islands

law provides that

we may

pay dividends on

and redeem the

Series B

Preferred Shares

only to the

extent that assets

are legally available

for such purposes.

Legally available

assets generally

are

limited to our surplus, which essentially represents our retained earnings

and the excess of consideration

received by us for

the sale of shares

above the par value

of the shares. In

addition, under Marshall

Islands

43

law we

may not

pay dividends

on or

redeem Series

B Preferred

Shares if

we are

insolvent or

would be

rendered insolvent by the payment of such a dividend or the making

of such redemption.

The amount of your

liquidation preference is

fixed and you will

have no right

to receive any greater

payment regardless of the circumstances.

The

payment

due

upon

a

liquidation

is

fixed

at

the

redemption

preference

of

$25.00

per

share

plus

accumulated and

unpaid dividends

to

the

date

of

liquidation. If,

in the

case of

our

liquidation, there

are

remaining

assets

to

be distributed

after

payment

of

this

amount,

you

will

have

no right

to

receive

or

to

participate in these

amounts. Furthermore,

if the market

price for your

Series B Preferred

Shares is greater

than

the

liquidation

preference,

you

will

have

no

right

to

receive

the

market

price

from

us

upon

our

liquidation.

Risks Relating to Our Outstanding Warrants

The issuance

of our

common stock

upon the

exercise of

the Warrants may

depress our

stock price.

We could issue up

to 33,919,605 shares of common

stock in connection

with the exercise

of the Warrants.

The issuances

of the

shares of

common stock

upon exercise

of the

Warrants and the

resale of

such shares

after their issuance,

or the perception that

such sales could

occur, could

result in downward

pressure on

our

stock

price

and

could

impact

our

ability to

raise

capital

through the

sale

of

additional shares

in

the

future. See

“Item 4. Information

on the

Company— A.

History and

development of

the Company—

Warrant

Distribution" for a more detailed discussion of our Warrants.

Item 4.

Information on the Company

A.

History and development of the Company

Diana Shipping Inc. is a holding company

incorporated under the laws of Liberia in

March 1999 as Diana

Shipping

Investments

Corp.

In

February

2005,

the

Company’s

articles

of

incorporation

were

amended.

Under the amended

and restated articles

of incorporation, the

Company was

renamed Diana Shipping

Inc.

and was re-domiciled from the Republic

of Liberia to the Republic of

the Marshall Islands.

Our executive

offices

are located

at Pendelis

16,

175 64

Palaio Faliro,

Athens, Greece.

Our telephone

number at

this

address is +30-210-947-0100. Our agent and authorized representative in the United States is our wholly

owned

subsidiary,

Bulk

Carriers

(USA)

LLC,

established in

September

2006,

in

the

State

of

Delaware,

which is located

at 2711 Centerville Road, Suite

400, Wilmington, Delaware

19808. The SEC

maintains an

Internet

site

that

contains

reports,

proxy

and

information

statements,

and

other

information

regarding

issuers that file electronically with

the SEC. The address of

the SEC's Internet site

is http://www.sec.gov.

The address of the Company's Internet site is http://www.dianashippinginc.com.

Recent Developments

Vessel acquisitions

In January 2023, we

took delivery of

DSI Aquarius, a

2016 built Ultramax

dry bulk vessel of

60,309 dwt, for

a purchase price of $24.0 million in

cash and 2,033,613 newly issued common shares. The vessel

is one

of nine modern Ultramax dry bulk vessels that we entered into an agreement

to purchase in August 2022.

In

February 2024,

we signed

shipbuilding contracts

for two

81,200 dwt

methanol dual

fuel new-building

Kamsarmax

dry

bulk

vessels,

for

a

purchase

price

of

$46

million

each,

to

be

built

at

Tsuneishi

Group

(Zhoushan)

Shipbuilding Inc.,

China.

The

vessels

are

expected to

be

delivered to

the

Company by

the

second half of 2027 and the first half of 2028, respectively.

44

Vessel disposals

In January 2023,

we agreed to

sell to an

unrelated third party

the vessel

Aliki

for $15.08 million.

The vessel

was delivered to her new owners on February 8, 2023.

In

February 2023,

we agreed

to

sell to

OceanPal, a

related party,

the

vessel

Melia

for $14.0

million, of

which $4.0

million was

paid in

cash and

$10.0 million through

13,157 of

OceanPal Series

D Convertible

Preferred Shares. The vessel was delivered to her new owners

on February 8, 2023.

In

October

2023,

we

agreed to

sell

to

an

unrelated third

party the

vessel

Boston

for

$18.0 million.

The

vessel was delivered to her new owners on December 6, 2023.

In January 2024, we agreed to sell to an unrelated third party the vessel

Artemis

for the purchase price of

$13.0 million.

The vessel was delivered to her new owners on March 5, 2024.

In February 2024, we agreed to sell to an unrelated third party,

the vessel

Houston,

for $23.3 million. The

vessel is expected to be delivered to the buyer latest by September 16,

2024.

Please

read

Note

6

– Advances

for

vessel

acquisitions

and

Vessels,

net of

our

consolidated

financial

statements, included elsewhere in

this Annual Report for

a full description of

the Company’s acquisitions

and sales of vessels as of December 31, 2023.

Other transactions

In February 2023,

we signed a

Memorandum of Agreement

to acquire from

an unaffiliated third-party

an

Ultramax dry bulk vessel for a purchase price

of $27.9 million. On April 28, 2023, the vessel’s ship

owning

company

was

deconsolidated

from

the

Company’s

financial

statements

due

to

the

Company’s

loss

of

control. Upon the deconsolidation, we retained 25% of the the total partnership

interests.

In

November

2023,

we

entered

into

a

joint

venture

agreement,

with

two

unrelated

companies

to

form

Windward

Offshore

GmbH

&

Co.

KG,

or

Windward,

for

the

purpose

of

establishing

and

operating

an

offshore wind

vessel company.

We

agreed to

contribute Euro

25.0 million,

being 45.45%

of Windward’s

capital,

to

construct

two

CSOVs.

In

January

2024,

we

committed

to

increase

our

contribution

to

the

partnership to Euro 50.0

million, being 45.87% of

Windward’s capital in

order for the partnership to

place

orders for two additional CSOVs.

Dividends

On March 20, 2023,

we paid a cash

dividend on our common

stock of $0.15 per

share,

or $16 million, to

all shareholders

of record

as of March

13, 2023 and

on June 9,

2023, we

distributed our

Series D Preferred

Shares of OceanPal to our shareholders of record as of April

24, 2023.

On July

10, 2023,

we distributed a

dividend of

$0.15 per

share to

our shareholders of

record as

of June

12,

2023,

and

paid

$12.4

million

in

cash

to

shareholders

who

elected

to

receive

cash

and

distributed

965,044 newly issued common shares to shareholders who elected

to receive shares.

On September

8, 2023, we

distributed a dividend

of $0.15

per share to

our shareholders of

record as

of

August 14,

2023, and

paid $13.0

million in

cash to

shareholders who

elected to

receive cash

and distributed

831,672 newly issued common shares to shareholders who elected

to receive shares.

On

December 4,

2023, we

distributed a

dividend of

$0.15 per

share to

all

shareholders of

record as

of

November 27, 2023,

in the form

of common

stock and distributed

4,831,777 newly

issued common

shares.

45

On March

12, 2024,

we paid

a cash

dividend of

$0.075 per

share, or

$9.0 million,

to all

shareholders of

record as of March 5, 2024.

Please read Note

11

– Capital Stock and Changes in Capital Accounts and Note 17 – Subsequent

events

to our consolidated financial statements, included elsewhere in this

Annual Report for a full description of

the Company’s dividends distribution as of December 31, 2023.

Loans

In February 2023, we

early prepaid $8.1 million of

outstanding debt due to the

sale of

Melia

to OceanPal

and

Alik

i to an unaffiliated third party.

On March

14, 2023,

we early prepaid

$11.8

million, being the

outstanding balance of

our loan

with DNB

Bank ASA.

In April

2023, both

loans held

with BNP

were refinanced

through a

new $100

million loan

facility with

Danish

Ship Finance and the outstanding balance of both loans, amounting

to $75.2 million was prepaid in full.

On June

26, 2023,

we prepaid

in full

both loans

held with

ABN Bank

amounting to

$68.7 million,

which

were refinanced under

a new loan

agreement with DNB

Bank ASA of

$100.0 million,

drawn on June

27,

2023. As part of

the loan agreement,

we entered into an

interest rate swap

with DNB for a

notional amount

of $30.0 million, being 30% of the loan amount

under which we pay a fixed rate and receive

floating under

term SOFR.

On June 27, 2023, we

drew down $22.5 million

and prepaid in full

the outstanding balance of

our loan with

Nordea Bank of $20.9 million.

On June 29,

2023, we repurchased

$5.9 million

nominal value of

the $125.0 million

senior unsecured bond

issued in June 2021 with maturity in June 2026.

A full description of the Company’s loan facilities as

of December 31, 2023 is included in

Item 5 Operating

and

Financial

Review

and

Prospects

and

Note

8

of

our

consolidated

financial

statements

and

Notes

thereto, included elsewhere in this Annual Report.

Warrant Distribution

On December 14, 2023,

we issued warrants to

purchase common shares (the “Warrants”)

to the holders

of record of Common Stock

as of the close of

business on December 6, 2023 (the

“Record Date”) on the

terms and conditions described in the Warrant Agreement (as defined below and attached as exhibit 2.10

to this

annual report). Each

holder received one

Warrant for

every five shares

of issued and

outstanding

shares of common stock held as of the

Record Date (rounded down to the nearest whole number for

any

fractional

Warrant).

Each

Warrant

entitles

the

holder

to

purchase,

at

the

holder’s

sole

and

exclusive

election, at the exercise price,

one share of common stock

plus, to the extent, described

below, the Bonus

Share Fraction. A

Bonus Share

Fraction entitles

a holder to

receive an additional

0.5 of a

share of common

stock for each Warrant exercised (the “Bonus Share Fraction”) without

payment of any additional exercise

price. Since the dividend

ex-Date on March 4, 2024,

the Bonus Share Fraction

was adjusted to 0.51292

of

a share of common stock for each Warrant exercised.

The right

to receive

the Bonus

Share Fraction

will expire

at 5:00

p.m. New

York City time (the

“Bonus Share

Expiration Date”) upon

the earlier of (i)

the date specified

by the Registrant

upon not less than

20 business

days’

notice

and

(ii)

the

first

business

day

following

the

last

day

of

the

first

30

consecutive trading

day

period

in

which

the

daily

VWAP

of

the

shares

of

common

stock

has

been

at

least

equal

to

the

then

46

applicable

trigger

price

for

at

least

20

trading

days

(whether

or

not

consecutive)

(the

“Bonus

Price

Condition”). Any Warrant

exercised with an

exercise date after

the Bonus Share

Expiration Date will

not be

entitled to any Bonus Share

Fraction. The Company will

make a public announcement

of the Bonus Share

Expiration Date

(i) at least

20 business

days prior

to such date,

in the

case of the

Company setting

a Bonus

Share Expiration Date

and (ii) prior

to market

open on the

Bonus Share Expiration

Date in the

case of

a

Bonus Price Condition.

Unless earlier redeemed, the Warrants will expire

and cease to be exercisable at

5:00 p.m. New York City

time on December 14, 2026 (the “Expiration Date”).

In connection with the Warrant distribution, we filed a prospectus

supplement, dated December 14, 2023,

pursuant

to

our

existing

shelf

registration

statement

on

Form

F-3

declared

effective

on

July

9,

2021,

registering up

to 33,919,605

shares of

common stock to

be issued

upon exercise

of the

Warrants under

the Securities Act of 1933, as amended.

The

Warrants

commenced

trading

on

the

New

York

Stock

Exchange

under

the

ticker

“DSX

WS”

on

December 14, 2023.

As of

the date

of this

annual report,

out of

the 22,613,070

Warrants distributed

in this

transaction, 3,051,471

Warrants have been exercised and 4,597,192 common shares have been issued.

B.

Business overview

We specialize

in the ownership

and bareboat charter-in

of dry bulk

vessels, determined as one

business

segment. Each of our vessels is owned through a separate wholly-owned

subsidiary.

As of

the date

of this

report, our

fleet consisted

of 41

vessels of

which 39

in operation,

owned and

chartered-

in, having

a combined carrying

capacity of

4.4 million dead weight

tons, or

dwt, and

a weighted average

age of 10.4 years and two Kamsarmax vessels under construction.

As of December

31, 2023,

we had a

fleet of 40

dry bulk

carriers, owned and

chartered-in, consisting

of nine

Ultramax, seven

Panamax, six

Kamsarmax, five

Post-Panamax, nine

Capesize and

four Newcastlemax

vessels, having

a combined

carrying capacity

of approximately

4.5 million

dwt and a

weighted average

age

of 10.5 years.

As

of

December

31,

2022,

we

had

a

fleet

of

42

dry

bulk

carriers,

consisting

of

eight

Ultramax,

eight

Panamax, six Kamsarmax, five Post-Panamax, eleven Capesize and four

Newcastlemax vessels, having

a combined carrying capacity of approximately 4.9 million dwt and a weighted average age of 10.2 years.

As of

December 31,

2022, the

Company had

agreed to

acquire a

2016 built

Ultramax dry

bulk vessel

of

60,309 dwt, delivered on January 30, 2023.

During

2023,

2022

and

2021,

we

had

a

fleet

utilization

of

99.7%,

98.9%

and

99.1%,

respectively,

our

vessels achieved daily

time charter equivalent

rates of

$16,713, $22,735 and

$15,759, respectively,

and

we generated revenues of $262.1 million, $290.0 million and $214.2

million, respectively.

We

operate

our

vessels

worldwide,

in

markets

that

have

historically

exhibited

seasonal

variations

in

demand and,

as a

result, in

charter hire

rates. The

dry bulk

carrier market

is typically

stronger in the

fall

and winter months in

anticipation of increased

consumption of coal and

other raw materials

in the northern

hemisphere during the winter months. In addition, unpredictable weather patterns

in these months tend to

disrupt vessel scheduling

and supplies of certain

commodities. This seasonality

has a limited direct

impact

on our operating

results as we

charter our vessels to

customers pursuant to medium-term

and long-term

time charter agreements.

47

Management of Our Fleet

The commercial and technical management of our fleet,

owned and bareboat chartered-in, as well as the

provision of administrative services

relating to the fleet’s

operations, are carried out

by our wholly-owned

subsidiary, Diana Shipping Services S.A., which we refer to as DSS, and Diana Wilhelmsen Management

Limited, a 50/50 joint

venture with Wilhelmsen

Ship Management, which

we refer to as

DWM. In exchange

for

providing

us

with

commercial

and

technical

services,

personnel

and

office

space,

we

pay

DSS

a

commission,

which

is

a

percentage

of

the

managed

vessels’

gross

revenues,

a

fixed

monthly

fee

per

managed vessel and an additional monthly fee for the administrative services provided to Diana Shipping

Inc. Such services may

include budgeting, reporting,

monitoring of bank accounts,

compliance with banks,

payroll

services

and

any

other

possible

service

that

Diana

Shipping

Inc.

would

require

to

perform

its

operations. Similarly, in exchange

for providing

us with

commercial and

technical services,

we pay

to DWM

a commission

which is

a percentage

of the

managed vessels’

gross revenues

and a

fixed management

monthly fee

for each

managed vessel.

The amounts

deriving from

the agreements

with DSS

are considered

inter-company transactions and, therefore, are eliminated from

our consolidated financial statements. The

management fees

and commissions

deriving from

the agreements

with DWM

are included

in our

statement

of

operations

in

“Management

fees

to

“Voyage

Expenses”,

“Advances

for

vessel

acquisitions” and “Vessels, net”.

Steamship

Shipbroking

Enterprises

Inc.,

or

Steamship,

a

controlled

by

our

CEO

Mrs.

Semiramis Paliou,

provides brokerage services to us, since June 1, 2010. Brokerage fees are included in

“General and

Administrative expenses” in

our statement of

operations. The terms

of this relationship

are

currently governed by a Brokerage Services Agreement dated February

23,

2024.

The following table presents certain information

concerning the dry bulk carriers in

our fleet, as of the date

of this annual report.

Fleet Employment (As of April 3, 2024)

VESSEL

SISTER

SHIPS*

GROSS

RATE (USD

PER DAY)

COM**

CHARTERERS

DELIVERY DATE

TO

CHARTERERS***

REDELIVERY DATE TO

OWNERS****

NOTES

BUILT DWT

9 Ultramax Bulk Carriers

1

DSI Phoenix

A

13,250

5.00%

ASL Bulk Marine Limited

4/Nov/22

15/Apr/2024 - 4/May/2024

1

2017 60,456

2

DSI Pollux

A

14,000

4.75%

Cargill Ocean

Transportation

(Singapore) Pte. Ltd.

28/Dec/23

20/Aug/2025 - 20/Oct/2025

2015 60,446

3

DSI Pyxis

A

14,250

5.00%

ASL Bulk Marine Limited

24/Sep/23

10/Oct/2024 - 10/Dec/2024

2018 60,362

4

DSI Polaris

A

13,100

5.00%

ASL Bulk Marine Limited

12/Nov/22

12/May/2024 - 12/Jul/2024

2018 60,404

5

DSI Pegasus

A

14,000

5.00%

Reachy Shipping (SGP)

Pte. Ltd.

7/Dec/22

15/Jul/2024 - 15/Sep/2024

2015 60,508

6

DSI Aquarius

B

14,200

5.00%

Engelhart CTP Freight

(Switzerland) SA

1/Feb/23

18/Jan/2024

2016 60,309

14,500

5.00%

Stone Shipping Ltd

18/Jan/24

1/Dec/2024 - 1/Feb/2025

7

DSI Aquila

B

12,500

5.00%

Western Bulk Carriers

AS

11/Nov/23

10/Nov/2024 - 10/Jan/2025

2015 60,309

8

DSI Altair

B

13,800

5.00%

Western Bulk Carriers

AS

23/Jun/23

10/Aug/2024 - 10/Oct/2024

2016 60,309

48

9

DSI Andromeda

B

13,500

5.00%

Bunge SA, Geneva

27/Nov/23

20/Feb/2025 - 20/Apr/2025

2, 3

2016 60,309

6 Panamax Bulk Carriers

10

ARTEMIS

12,000

5.00%

Jera Global Markets Pte.

Ltd.

14/Oct/23

23/Feb/2024

4

2006 76,942

11

LETO

14,500

4.75%

Cargill International

S.A., Geneva

29/Jan/23

5/Apr/2024 - 30/Apr/2024

1

2010 81,297

12

SELINA

C

12,000

4.75%

Cargill International

S.A., Geneva

20/May/23

15/Sep/2024 - 15/Nov/2024

2010 75,700

13

MAERA

C

12,000

4.75%

Cargill International

S.A., Geneva

16/Dec/22

29/Jan/2024

5

2013 75,403

13,750

5.00%

ST Shipping and

Transport Pte. Ltd.

29/Jan/24

20/Nov/2024 - 20/Jan/2025

14

ISMENE

12,650

5.00%

Paralos Shipping Pte.,

Ltd.

13/Sep/23

15/Apr/2025 - 30/Jun/2025

2013 77,901

15

CRYSTALIA

D

11,250

5.00%

Reachy Shipping (SGP)

Pte. Ltd.

6/Sep/23

05/Apr/2024 - 15/Apr/2024

1

2014 77,525

13,900

5.00%

Louis Dreyfus Company

Freight Asia Pte. Ltd.

-

6

16

ATALANDI

D

13,250

4.75%

Aquavita International

S.A.

15/Feb/23

10/Apr/2024 - 5/May/2024

1

2014 77,529

6 Kamsarmax Bulk Carriers

17

MAIA

E

13,500

5.00%

ST Shipping and

Transport Pte. Ltd.

23/Sep/23

15/Jun/2024 - 20/Aug/2024

2009 82,193

18

MYRSINI

E

15,000

5.00%

Salanc Pte. Ltd.

22/Nov/22

20/Apr/2024 - 28/Jun/2024

2010 82,117

19

MEDUSA

E

14,250

5.00%

ASL Bulk Shipping

Limited

14/May/23

10/Feb/2025 - 15/Apr/2025

2010 82,194

20

MYRTO

E

12,650

5.00%

Cobelfret S.A.,

Luxemburg

15/Jul/23

1/Nov/2024 - 15/Jan/2025

2013 82,131

21

ASTARTE

15,000

5.00%

Reachy Shipping (SGP)

Pte. Ltd.

29/Apr/23

1/Aug/2024 - 1/Oct/2024

2013 81,513

22

LEONIDAS P. C.

17,000

4.75%

Cargill International

S.A., Geneva

17/Mar/23

22/Feb/2024

7

2011 82,165

17,000

5.00%

Ming Wah International

Shipping Company

Limited

22/Feb/24

20/Aug/2025 - 20/Oct/2025

5 Post-Panamax Bulk Carriers

23

ALCMENE

13,000

5.00%

SwissMarine Pte. Ltd.,

Singapore

2/Jan/23

23/Mar/2024

2010 93,193

16,000

5.00%

Triangle Merchant

Maritime Co., Limited

24/Mar/24

13/May/2024-18/May/2024

8

24

AMPHITRITE

F

14,250

5.00%

Cobelfret S.A.,

Luxembourg

9/Nov/22

13/Jan/2024

2012 98,697

15,000

13/Jan/24

15/Nov/2024 - 15/Jan/2025

9

25

POLYMNIA

F

15,000

5.00%

Cobelfret S.A.,

Luxemburg

14/Jan/23

15/Apr/2024 - 31/May/2024

10

2012 98,704

26

ELECTRA

G

14,500

5.00%

Cobelfret S.A.,

Luxemburg

13/Apr/23

1/Jun/2024 - 1/Aug/2024

2013 87,150

49

27

PHAIDRA

G

12,250

4.75%

Aquavita International

S.A.

9/May/23

1/Sep/2024 - 15/Nov/2024

2013 87,146

9 Capesize Bulk Carriers

28

SEMIRIO

H

14,150

5.00%

Solebay Shipping Cape

Company Limited, Hong

Kong

18/Aug/23

20/Nov/2024 - 30/Jan/2025

2007 174,261

29

HOUSTON

H

13,000

5.00%

EGPN Bulk Carrier Co.,

Limited

21/Nov/22

1/Jul/2024 - 31/Aug/2024

11

2009 177,729

30

NEW YORK

H

16,000

5.00%

SwissMarine Pte. Ltd.,

Singapore

11/Jun/23

1/Oct/2024 - 7/Dec/2024

2010 177,773

31

SEATTLE

I

17,500

5.00%

Solebay Shipping Cape

Company Limited, Hong

Kong

1/Oct/23

15/Jul/2025 - 30/Sep/2025

2011 179,362

32

P.

S. PALIOS

I

31,000

5.00%

Classic Maritime Inc.

11/Jun/22

15/Apr/2024 - 30/Jun/2024

2013 179,134

33

G. P. ZAFIRAKIS

J

17,000

5.00%

Solebay Shipping Cape

Company Limited, Hong

Kong

12/Jan/23

15/Jun/2024 - 15/Aug/2024

2014 179,492

34

SANTA BARBARA

J

21,250

5.00%

Smart Gain Shipping

Co., Limited

7/May/23

10/Oct/2024 - 10/Dec/2024

12

2015 179,426

35

NEW ORLEANS

20,000

5.00%

Kawasaki Kisen Kaisha,

Ltd.

7/Dec/23

15/Aug/2025 - 31/Oct/2025

12, 13

2015 180,960

36

FLORIDA

25,900

5.00%

Bunge S.A., Geneva

29/Mar/22

29/Jan/2027 - 29/May/2027

3

2022 182,063

4 Newcastlemax Bulk Carriers

37

LOS ANGELES

K

17,700

5.00%

Nippon Yusen Kabushiki

Kaisha, Tokyo

15/Jan/23

20/May/2024 - 5/Aug/2024

2012 206,104

38

PHILADELPHIA

K

26,000

5.00%

C Transport Maritime

Ltd., Bermuda

12/Apr/22

04/Feb/2024

2012 206,040

22,500

5.00%

Nippon Yusen Kabushiki

Kaisha, Tokyo

4/Feb/24

20/Apr/2025 - 20/Jul/2025

39

SAN FRANCISCO

L

22,000

5.00%

SwissMarine Pte. Ltd.,

Singapore

18/Feb/23

5/Jan/2025 - 5/Mar/2025

2017 208,006

40

NEWPORT NEWS

L

20,000

5.00%

Nippon Yusen Kabushiki

Kaisha, Tokyo

20/Sep/23

10/Mar/2025 - 10/Jun/2025

2017 208,021

* Each dry bulk carrier is a “sister ship”, or closely similar, to other dry bulk carriers that have the same letter.

** Total

commission percentage paid to third parties.

*** In case of newly acquired vessel with time charter attached, this date refers to the expected/actual date of delivery of the vessel to

the Company.

**** Range of redelivery dates, with the actual date of redelivery being at the Charterers’ option, but subject to the terms, conditions,

and exceptions of the particular charterparty.

1Based on latest information.

2The fixture includes the option for redelivery of vessel east of Suez against a gross ballast bonus of US$250,000.

3Bareboat chartered-in for a period of ten years.

4Vessel has been sold and delivered to her new Owners on March 5, 2024.

50

5Charterers will compensate the Owners at a rate of 105% of the Baltic Panamax Index 5 TC average as published by the Baltic

Exchange on a daily basis or the vessel’s present charter party rate, whichever is higher, for the excess period commencing from

December 29, 2023 until the actual redelivery date.

6Vessel will be delivered to the new Charterers during the second quarter of 2024.

7Vessel off hire for 6.83 days.

8Redelivery date based on an estimated time charter trip duration of about 50-55 days.

9The charter rate will be US$12,250 per day for the first 30 days of the charter period.

10The charter rate was US$10,000 per day for the first 30 days of the charter period.

11Vessel

has been sold and it is expected to be delivered to her new Owners by latest September 16, 2024.

12Bareboat chartered-in for a period of eight years.

13Vessel off hire for 3.65 days.

Our Customers

Our customers include

regional and international

companies,

mainly with concentrations

below 10% of

our

gross revenues. During 2023,

only one of our

charterers accounted for 13%

of our revenues.

During 2022,

two

of

our

charterers

accounted

for

34%

of

our

revenues,

in

aggregate,

and

during

2021,

one

of

our

charterers accounted for 10% of our revenues.

We charter our

dry bulk

carriers, owned

and bareboat

chartered-in, to

customers pursuant

to time charters.

Under our time charters, the charterer typically

pays us a fixed daily charter hire rate and

bears all voyage

expenses, including the cost

of bunkers (fuel

oil) and canal and

port charges. We

remain responsible for

paying the

chartered vessel's

operating expenses,

including the

cost of

crewing, insuring,

repairing and

maintaining the

vessel. In

2023, we

paid commissions that

ranged from

4.75% to

5.0% of

the total

daily

charter hire

rate of

each charter

to unaffiliated

ship brokers

and to

in-house brokers

associated with

the

charterer, depending on the number of brokers involved with arranging the charter.

We strategically monitor developments in the dry bulk shipping industry on a regular basis and, subject to

market

demand,

seek

to

adjust

the

charter

hire

periods

for

our

vessels

according

to

prevailing

market

conditions. In order to take advantage of relatively stable cash flow and high utilization rates,

we fix some

of our vessels on long-term time

charters. Currently, the

majority of our vessels are employed on

short to

medium-term time

charters, which

provides us

with flexibility in

responding to

market developments.

We

continuously evaluate our balance of

short-

and long-term charters and extend

or reduce the charter hire

periods of the vessels in our fleet according to the developments in

the dry bulk shipping industry.

Charter Hire Rates

Charter hire

rates fluctuate

by varying

degrees among

dry bulk

carrier size

categories. The

volume and

pattern of

trade in

a small

number of

commodities

(major bulks)

affect demand

for larger

vessels. Therefore,

charter rates

and vessel

values of

larger vessels

often show

greater volatility. Conversely, trade

in a

greater

number

of

commodities (minor

bulks)

drives

demand

for

smaller

dry

bulk

carriers.

Accordingly,

charter

rates and vessel values for those vessels are usually subject

to less volatility.

Charter

hire

rates

paid

for

dry

bulk

carriers

are

primarily

a

function

of

the

underlying

balance

between

vessel supply and demand, although at

times other factors may play a

role. Furthermore, the pattern seen

in

charter

rates

is

broadly

mirrored

across

the

different

charter

types

and

the

different

dry

bulk

carrier

categories. In the

time charter market,

rates vary depending

on the length

of the charter

period and vessel-

specific factors such as age, speed and fuel consumption.

51

In the

voyage charter

market, rates

are, among

other things,

influenced by

cargo size,

commodity,

port

dues and canal transit fees, as well

as commencement and termination

regions. In general, a larger

cargo

size is quoted

at a lower

rate per ton

than a smaller

cargo size.

Routes with

costly ports or

canals generally

command higher rates

than routes

with low port

dues and

no canals to

transit. Voyages

with a

load port

within a

region that

includes ports

where vessels

usually discharge

cargo or

a discharge

port within

a region

with

ports

where

vessels

load

cargo

also

are

generally

quoted

at

lower

rates,

because

such

voyages

generally increase vessel utilization

by reducing the unloaded portion

(or ballast leg) that is

included in the

calculation of the return charter to a loading area.

Within the dry bulk shipping industry, the

charter hire rate references, most likely to be monitored, are the

freight rate indices

issued by the

Baltic Exchange. These

references are based

on actual charter

hire rates

under

charters

entered

into

by

market

participants

as

well

as

daily

assessments

provided

to

the

Baltic

Exchange by a panel

of major shipbrokers.

The Baltic Panamax

Index is the index

with the longest

history.

The Baltic Capesize Index and Baltic Handymax Index are

of more recent origin.

The Baltic Dry Index, or BDI, is a daily average of charter rates

in 20 shipping routes measured on a time

charter and voyage basis and covering Capesize, Panamax, Supramax, and Handysize dry

bulk carriers.

In 2023, the BDI ranged from a low of 530 to a high of 3,346 and

closed at 1,714 on April 2, 2024.

The Dry Bulk Shipping Industry

The

global

dry

bulk

carrier

fleet

could

be

divided

into

seven

categories

based

on

a

vessel's

carrying

capacity. These categories consist of:

●

Very

Large Ore

Carriers

.

Very

large ore

carriers, or

VLOCs, have

a carrying

capacity of

more

than 200,000 dwt and are a comparatively new sector of the dry bulk carrier fleet. VLOCs are built

to exploit economies of scale on long-haul iron ore routes.

●

Capesize

.

Capesize vessels

have a

carrying capacity

of 110,000

-199,999 dwt.

Only the

largest

ports around the

world possess the

infrastructure to accommodate

vessels of this

size. Capesize

vessels are

primarily used

to transport

iron ore

or coal

and, to

a much

lesser extent,

grains, primarily

on long-haul routes.

●

Post-Panamax

.

Post-Panamax vessels

have a

carrying capacity

of 80,000-109,999

dwt. These

vessels tend

to have

a shallower

draft and

larger beam

than a

standard Panamax

vessel with

a

higher

cargo

capacity.

These

vessels

have

been

designed

specifically

for

loading

high

cubic

cargoes from draught restricted ports, although they cannot

transit the Panama Canal.

●

Panamax

.

Panamax vessels have a carrying capacity of 60,000-79,999 dwt. These vessels carry

coal,

iron ore,

grains, and,

to

a

lesser extent,

minor

bulks, including

steel products,

cement and

fertilizers.

Panamax

vessels

are

able

to

pass

through

the

Panama

Canal,

making

them

more

versatile than

larger vessels

with regard

to

accessing different

trade routes.

Most Panamax

and

Post-Panamax

vessels

are

“gearless,”

and

therefore

must

be

served

by

shore-based

cargo

handling equipment. However, there are a small number of geared

vessels with onboard cranes, a

feature

that

enhances

trading

flexibility

and

enables

operation

in

ports

which

have

poor

infrastructure in terms of loading and unloading facilities.

52

●

Ultramax

is

the

largest

class

before

Panamax

and

is

the

newer

form

of

the

smaller

Supramax with a

maximum length

of

200 meters

and capacity

that ranges

from

60,000 dwt

and

66,000 dwt. This class is considered an upgrade to Supramax class as it offers a better all-around

investment

for

Charterers

and

Shipowners

due

to

its

higher

cargo

carrying

capacity

and

better

bunker

efficiency.

Ultramax

class

bulk

carriers

have

5

cargo

holds.

are

fitted

with

4

cranes

and

usually are equipped with grabs allowing

them to call more ports with no such

facilities giving them

more versatility.

●

Handymax/Supramax

.

Handymax vessels have a carrying

capacity of 40,000-59,999 dwt.

These

vessels

operate

in

a

large

number

of

geographically

dispersed

global

trade

routes,

carrying

primarily grains and minor

bulks. Within the Handymax category

there is also a

sub-sector known

as Supramax. Supramax

bulk carriers are

ships between 50,000

to 59,999 dwt,

normally offering

cargo

loading

and

unloading

flexibility

with

on-board

cranes,

or

“gear,”

while

at

the

same

time

possessing the cargo carrying capability approaching conventional

Panamax bulk carriers.

●

Handysize

.

Handysize vessels have

a carrying capacity

of up

to 39,999 dwt.

These vessels are

primarily

involved

in

carrying

minor

bulk

cargoes.

Increasingly,

ships

of

this

type

operate

within

regional

trading

routes, and

may

serve

as

trans-shipment

feeders

for

larger vessels.

Handysize

vessels are well

suited for small

ports with length

and draft restrictions.

Their cargo gear

enables

them to service ports lacking the infrastructure for cargo loading and unloading.

Other size categories occur in regional trade,

such as Kamsarmax, with a maximum length

of 229 meters,

the maximum length

that can load

in the

port of Kamsar

in the

Republic of Guinea.

Other terms

such as

Seawaymax, Setouchmax, Dunkirkmax, and Newcastlemax also appear

in regional trade.

The supply

of dry

bulk carriers

is dependent

on the

delivery of

new vessels

and the

removal of

vessels

from the global fleet,

either through scrapping

or loss. The level

of scrapping activity

is generally a function

of scrapping prices

in relation to current

and prospective charter market

conditions, as well as

operating,

repair and

survey costs.

The average

age at

which a

vessel is

scrapped was

29 years

in 2022

and 28

years

in 2021.

The

demand

for

dry

bulk

carrier

capacity

is

determined

by

the

underlying

demand

for

commodities

transported in

dry bulk carriers,

which in turn

is influenced by

trends in

the global

economy.

Demand for

dry

bulk

carrier

capacity

is

also

affected

by

the

operating

efficiency

of

the

global

fleet,

along

with

port

congestion, which has been a feature of the market since 2004,

absorbing tonnage and therefore leading

to a

tighter balance

between supply

and demand.

In evaluating

demand factors

for dry

bulk carrier

capacity,

the Company believes that dry

bulk carriers can be

the most versatile element

of the global shipping

fleets

in terms of employment alternatives.

Vessel Prices

Dry bulk

vessel values in

2023 generally were

lower as

compared to 2022.

Consistent with these

trends

were the

market values

of

our

dry bulk

carriers. As

charter rates

and vessel

values

partially decreased

during 2023, there can be

no assurance as to how

long charter rates and

vessel values will remain at

their

current levels or whether they will decrease or improve to any significant

degree in the near future.

Competition

Our business

fluctuates in

line with

the main

patterns of

trade of

the major

dry bulk

cargoes and

varies

according to

changes in

the supply

and demand

for these

items. We

operate in

markets that

are highly

competitive and

based primarily

on supply

and demand.

We compete

for charters

on the

basis of

price,

vessel

location,

size,

age

and

condition

of

the

vessel,

as

well

as

on

our

reputation

as

an

owner

and

operator. We

compete with other owners of dry bulk carriers

in the Panamax, Post-Panamax and smaller

53

class

sectors and

with owners

of Capesize

and Newcastlemax

dry

bulk carriers.

Ownership of

dry

bulk

carriers is highly fragmented.

We believe that we possess a number

of strengths that provide us

with a competitive advantage in

the dry

bulk shipping industry:

●

We own

a modern, high

quality fleet of

dry bulk carriers

.

We believe that

owning a modern,

high

quality fleet

reduces operating

costs, improves

safety and

provides us

with a

competitive advantage

in securing favorable time charters.

We maintain the

quality of our vessels by

carrying out regular

inspections, both while

in port and

at sea, and

adopting a comprehensive

maintenance program

for

each vessel.

●

Our fleet

includes groups

of sister

ships.

We believe

that maintaining

a fleet

that includes

sister

ships enhances the revenue

generating potential of our

fleet by providing us

with operational and

scheduling flexibility.

The uniform

nature of sister

ships also

improves our operating

efficiency by

allowing our

fleet managers

to

apply the

technical knowledge

of

one vessel

to

all vessels

of the

same series

and create

economies of

scale that

enable us

to realize

cost savings

when maintaining,

supplying and crewing our vessels.

●

We

have

an

experienced

management

team.

Our

management

team

consists

of

experienced

executives

who

have,

on

average,

more

than

30

years

of

operating

experience

in

the

shipping

industry and has demonstrated

ability in managing

the commercial, technical

and financial areas of

our business.

●

We benefit

from the

experience and

reputation of

Diana Shipping

Services S.A.

and the

relationship

with

Wilhelmsen

Ship

Management

through

the

Diana

Wilhelmsen

Management

Limited

joint

venture.

●

We

benefit from

strong relationships

with members

of the

shipping and

financial industries.

We

have developed strong relationships with major international charterers, shipbuilders and financial

institutions

that

we

believe

are

the

result

of

the

quality

of

our

operations,

the

strength

of

our

management team and our reputation for dependability.

●

We have

a strong

balance sheet

and a

relatively low

level of

indebtedness.

We believe

that our

strong

balance

sheet

and

relatively

low

level

of

indebtedness

provide

us

with

the

flexibility

to

increase

the

amount of

funds

that

we may

draw under

our

loan

facilities in

connection

with

any

future acquisitions or otherwise and enable us to use cash flow that would otherwise be dedicated

to debt service for other purposes.

Permits and Authorizations

We

are

required

by

various

governmental

and

quasi-governmental

agencies

to

obtain

certain

permits,

licenses and

certificates with

respect to

our vessels.

The kinds

of permits,

licenses and

certificates required

depend upon

several factors,

including the

commodity transported,

the waters

in which

the vessel

operates

the

nationality

of

the

vessel's

crew

and

the

age

of

a

vessel.

We

have

been

able

to

obtain

all

permits,

licenses and

certificates currently

required to

permit our

vessels to

operate. Additional

laws and

regulations,

environmental or

otherwise, may

be adopted

which could

limit our

ability to

do business

or increase

the

cost of us doing business.

Disclosure Pursuant to Section 219 of the Iran Threat Reduction and

Syrian Human Rights

Act

Section 219

of the U.S.

Iran Threat

Reduction and Syria

Human Rights Act

of 2012,

or the ITRA,

added

new Section

13(r) to

the U.S.

Securities Exchange

Act of

1934, as

amended, or

the Exchange

Act, requiring

54

each SEC reporting issuer to disclose in its

annual and, if applicable, quarterly reports

whether it or any of

its affiliates

have knowingly

engaged in

certain activities,

transactions or dealings

relating to

Iran or

with

the

Government

of

Iran

or

certain

designated

natural

persons

or

entities

involved

in

terrorism

or

the

proliferation of weapons of mass destruction during the period

covered by the report.

Pursuant to Section 13(r) of the Exchange Act, we note that none of our vessels made port calls to Iran in

2023 and to the date of this annual report.

Environmental and Other Regulations in the Shipping Industry

Government

regulation

and

laws

significantly

affect

the

ownership

and

operation

of

our

fleet.

We

are

subject to international conventions and treaties,

national, state and local laws

and regulations in force in

the

countries

in

which

our

vessels

may

operate

or

are

registered

relating

to

safety

and

health

and

environmental

protection

including

the

storage,

handling,

emission,

transportation

and

discharge

of

hazardous and non-hazardous materials, and the remediation of contamination and liability

for damage to

natural

resources.

Compliance

with

such

laws,

regulations

and

other

requirements

entails

significant

expense, including vessel modifications and implementation of certain

operating procedures.

A

variety

of

government

and

private

entities

subject

our

vessels

to

both

scheduled

and

unscheduled

inspections.

These entities

include the

local port

authorities (applicable

national authorities

such as

the

United

States

Coast

Guard (“USCG”),

harbor

master

or

equivalent),

classification

societies,

flag

state

administrations

(countries

of

registry)

and

charterers,

particularly

terminal

operators.

Certain

of

these

entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our

vessels. Failure to maintain

necessary permits or approvals

could require us to

incur substantial costs or

result in the temporary suspension of the operation of one or

more of our vessels.

Increasing

environmental

concerns

have

created

a

demand

for

vessels

that

conform

to

stricter

environmental

standards.

We

are

required

to

maintain

operating

standards

for

all

of

our

vessels

that

emphasize

operational

safety,

quality

maintenance,

continuous

training

of

our

officers

and

crews

and

compliance with United States and international regulations. We

believe that the operation of

our vessels

is in substantial compliance with applicable environmental

laws and regulations and that our vessels have

all

material

permits,

licenses,

certificates

or

other

authorizations

necessary

for

the

conduct

of

our

operations. However, because such laws and regulations

frequently change and may impose increasingly

stricter

requirements,

we

cannot

predict

the

ultimate

cost

of

complying with

these

requirements,

or

the

impact of these

requirements on the

resale value or useful

lives of our

vessels. In addition,

a future serious

marine incident that causes

significant adverse environmental impact could result

in additional legislation

or regulation that could negatively affect our profitability.

International Maritime Organization

The International Maritime

Organization, the United

Nations agency for

maritime safety and the

prevention

of pollution

by vessels (the “IMO”),

has adopted

the International

Convention for

the Prevention

of Pollution

from Ships, 1973, as modified

by the Protocol of

1978 relating thereto, collectively

referred to as MARPOL

73/78 and

herein as “MARPOL,”

the International

Convention for

the Safety

of Life

at Sea

of 1974 (“SOLAS

Convention”), and

the International

Convention on

Load Lines

of

1966 (the

“LL

Convention”). MARPOL

establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air

emissions, handling and

disposal of noxious

liquids and the

handling of harmful

substances in packaged

forms.

MARPOL is

applicable to

drybulk, tanker

and LNG carriers,

among other

vessels, and

is broken

into six Annexes, each

of which regulates a

different source of pollution.

Annex I relates to

oil leakage or

spilling;

Annexes

II

and

III

relate

to

harmful

substances

carried

in

bulk

in

liquid

or

in

packaged

form,

respectively; Annexes IV and

V relate to sewage

and garbage management, respectively; and

Annex VI,

lastly,

relates to air

emissions. Annex VI was

separately adopted by

the IMO in

September of 1997;

new

emissions standards, titled IMO-2020, took effect on January 1, 2020.

55

Air Emissions

In

September

of

1997,

the

IMO

adopted

Annex

VI

to

MARPOL

to

address

air

pollution

from

vessels.

Effective May 2005, Annex VI sets limits

on sulfur oxide and nitrogen oxide

emissions from all commercial

vessel exhausts and prohibits

“deliberate emissions” of ozone

depleting substances (such as halons

and

chlorofluorocarbons), emissions

of volatile compounds

from cargo tanks, and

the shipboard incineration

of

specific substances.

Annex VI

also includes

a global

cap on

the sulfur

content of

fuel oil

and allows

for

special

areas

to

be

established

with

more

stringent

controls

on

sulfur

emissions,

as

explained

below.

Emissions of

“volatile

organic

compounds” from

certain vessels,

and

the

shipboard

incineration

(from incinerators

installed after

January 1,

2000) of

certain substances

(such as

polychlorinated biphenyls,

or

“PCBs”)

are

also

prohibited.

We

believe

that

all

our

vessels

are

currently

compliant

in

all

material

respects with these regulations.

The Marine Environment Protection Committee, or “MEPC”,

adopted amendments to Annex VI regarding

emissions of

sulfur oxide,

nitrogen oxide,

particulate matter

and ozone

depleting substances,

which entered

into force on

July 1, 2010.

The amended Annex VI

seeks to further

reduce air pollution by,

among other

things, implementing

a progressive

reduction of

the amount

of sulfur

contained in

any fuel

oil used

on board

ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement

a global 0.5% m/m sulfur

oxide emissions limit

(reduced from 3.50%)

starting from January

1, 2020.

This limitation can

be met by

using

low-sulfur compliant fuel

oil, alternative

fuels,

or

certain exhaust

gas cleaning

systems. Ships

are

now required

to obtain

bunker delivery

notes and

International Air

Pollution Prevention (“IAPP”)

Certificates

from their

flag states

that specify

sulfur content.

Additionally,

at MEPC

73, amendments

to Annex

VI to

prohibit the carriage of bunkers above

0.5% sulfur on ships were adopted and

took effect March 1, 2020,

with the exception of

vessels fitted with

exhaust gas cleaning

equipment (“scrubbers”) which

can carry fuel

of

higher sulfur

content.

These regulations

subject ocean-going

vessels to

stringent emissions

controls

and may cause us to incur substantial costs.

Sulfur

content

standards

are

even

stricter

within

certain

“Emission

Control

Areas,”

or (“ECAs”).

As

of

January 1, 2015,

ships operating

within an

ECA were

not permitted

to use fuel

with sulfur content

in excess

of 0.1%

m/m. Amended Annex

VI establishes procedures

for designating new

ECAs. Currently,

the IMO

has

designated

four

ECAs,

including

specified

portions

of

the

Baltic

Sea

area,

North

Sea

area,

North

American area and United States Caribbean area.

Ocean-going vessels in these areas will be

subject to

stringent emission controls and

may cause us

to incur additional

costs. Other areas

in China are

subject

to local

regulations that

impose stricter

emission controls.

In December

2021, the

member states

of the

Convention of the

Protection of

the Mediterranean Sea

Against Pollution

agreed to support

the designation

of a new ECA in the Mediterranean. On December 15, 2022, MEPC 79 adopted the designation of a

new

ECA in the Mediterranean,

with an effective date of

May 1, 2025. In July

2023, MEPC 80 announced

three

new ECA

proposals, including

the Canadian

Arctic waters

and the

North-East Atlantic

Ocean. If

other ECAs

are approved by the IMO,

or other new or more

stringent requirements relating to emissions from

marine

diesel

engines

or

port

operations

by

vessels

are

adopted

by

the

U.S.

Environmental

Protection

Agency (“EPA”) or the states where we operate, compliance with these regulations could entail significant

capital expenditures or otherwise increase the costs of our operations.

Amended Annex VI also establishes new

tiers of stringent nitrogen oxide emissions

standards for marine

diesel engines,

depending on

their date

of installation.

At the

MEPC meeting

held from

March to

April 2014,

amendments to

Annex VI

were adopted

which address

the date

on which

Tier

III Nitrogen

Oxide (NOx)

standards in ECAs

will go into

effect.

Under the amendments, Tier

III NOx standards

apply to ships

that

operate in the

North American and

U.S. Caribbean Sea

ECAs designed for

the control of

NOx produced

by

vessels

with

a

marine

diesel

engine

installed

and

constructed

on

or

after

January

1,

2016.

Tier

III

requirements could apply

to areas that

will be

designated for Tier

III NOx in

the future. At

MEPC 70

and

MEPC 71, the MEPC approved the North

Sea and Baltic Sea as ECAs for

nitrogen oxide for ships built on

or

after

January

1,

2021.

For

the

moment,

this

regulation

relates

to

new

building

vessels

and

has

no

56

retroactive

application

to

existing

fleet.

The EPA

promulgated

equivalent

(and

in

some

senses

stricter)

emissions standards in 2010.

As a result of these designations or similar future designations, we may be

required to incur additional operating or other

costs.

As

determined at

the

MEPC 70,

the

new Regulation

22A of

MARPOL Annex

VI became effective as

of

March 1, 2018 and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil

consumption to an

IMO database, with

the first year

of data collection

having commenced on

January 1,

2019.

The IMO intends to use such data as the first step in its roadmap (through 2023) for developing its

strategy to reduce greenhouse gas emissions from ships, as discussed

further below.

As of January

1, 2013, MARPOL

made mandatory certain

measures relating to

energy efficiency for

ships.

All

ships

are

now

required

to

develop

and

implement

a

Ship

Energy

Efficiency

Management

Plans (“SEEMPs”), and new ships must be designed in compliance

with minimum energy efficiency levels

per capacity mile

as defined by

the Energy Efficiency

Design Index (“EEDI”).

Under these measures, by

2025, all new ships built will be 30% more

energy efficient than those built in 2014. Additionally, MEPC 75

adopted amendments to MARPOL Annex VI which brings forward the effective date of the EEDI’s “phase

3” requirements

from April

1, 2022

to January

1, 2025

for several

ship types,

including gas

carriers, general

cargo ships, and LNG carriers.

Additionally, MEPC 75 introduced draft amendments to Annex

VI which impose new regulations

to reduce

greenhouse

gas

emissions

from

ships.

These

amendments

introduce

requirements

to

assess

and

measure the energy

efficiency of all ships

and set the

required attainment values,

with the goal

of reducing

the

carbon

intensity

of

international

shipping.

The

requirements

include

(1)

a

technical

requirement

to

reduce carbon

intensity based

on a

new Energy

Efficiency Existing

Ship Index

(“EEXI”), and

(2) operational

carbon intensity

reduction requirements,

based on

a new operational

carbon intensity

indicator (“CII”).

The

attained EEXI is

required to be

calculated for ships

of 400 gross

tonnage and above,

in accordance with

different values

set for

ship types

and categories.

With respect

to the

CII, the

draft amendments

would

require ships of 5,000

gross tonnage to document and

verify their actual annual operational

CII achieved

against a determined

required annual operational

CII.

Additionally, MEPC 75 proposed draft

amendments

requiring that,

on or

before January 1,

2023, all

ships above

400 gross tonnage

must have

an approved

SEEMP

on

board.

For

ships

above

5,000

gross

tonnage,

the

SEEMP

would

need

to

include

certain

mandatory content.

MEPC 75

also approved draft

amendments to MARPOL

Annex I to

prohibit the use

and carriage for

use as fuel

of heavy fuel

oil (“HFO”) by

ships in Arctic

waters on and

after July 1,

2024.

The draft amendments introduced at MEPC 75 were adopted at the

MEPC 76 session on June 2021 and

entered into force

on November 1, 2022,

with the requirements for

EEXI and CII certification

coming into

effect from January 1, 2023. MEPC 77 adopted a non-binding resolution which urges Member States and

ship operators

to voluntarily use

distillate or other

cleaner alternative fuels

or methods of

propulsion that

are

safe

for

ships

and

could

contribute

to

the

reduction

of

Black

Carbon

emissions

from

ships

when

operating

in

or

near the

Arctic.

MEPC

79

adopted

amendments to

MARPOL

Annex

VI,

Appendix

IX

to

include

the

attained

and

required

CII

values,

the

CII

rating

and

attained

EEXI

for

existing

ships

in

the

required information to

be submitted to

the IMO Ship

Fuel Oil Consumption

Database. In July

2023, MEPC

80 announced three new

ECA proposals, including

the Canadian Arctic

waters and the North-East

Atlantic

Ocean. The amendments will enter into

force on May 1, 2024.

In July 2023, MEPC 80

approved the plan

for reviewing

CII regulations

and guidelines,

which must

be completed

at the

latest by

January 1,

2026.

There

will

be

no

immediate

changes

to

the

CII

framework,

including

correction

factors

and

voyage

adjustments, before the review is completed.

We

may

incur

costs

to

comply

with

these

revised

standards.

Additional

or

new

conventions,

laws

and

regulations may be adopted that could require the

installation of expensive emission control systems and

could adversely affect our business, results of operations, cash flows and

financial condition.

57

Safety Management System Requirements

The SOLAS

Convention was

amended to

address the

safe manning

of vessels

and emergency

training

drills.

The Convention of Limitation of Liability for Maritime Claims (the “LLMC”) sets limitations of liability

for

a

loss

of

life

or

personal

injury

claim

or

a

property

claim

against

ship

owners.

The ISM

Certification provides validation that

both company and

ships are operating

using a process-based system

approach to manage risks and achieve continual improvement. The ISM code is meant

to be a preventive

tool

and

asks

companies

to

assess

all

risks

and

then

take

measured

to

safeguard

against

them.

Responsibilities and authorities are

set out for

the various entities

includes in the

ISM process. All

of our

vessels as well as our shore-based operations are fully certified

under the ISM Code.

Under Chapter

IX of

the SOLAS

Convention, or the

International Safety Management

Code for

the Safe

Operation

of

Ships

and

for

Pollution

Prevention (the “ISM

Code”),

our

operations

are

also

subject

to

environmental standards and requirements. The ISM Code requires the party with operational

control of a

vessel to develop

an extensive

safety management

system that

includes, among

other things,

the adoption

of a

safety and

environmental protection policy setting

forth instructions and

procedures for operating

its

vessels safely and describing procedures for

responding to emergencies. Through strong leadership and

a

disciplined,

clearly

documented

management

system,

the

Company

promotes

the

concept

of

HSSE

(Health, Safety,

Security and

Environmental) excellence

at all

levels in

the organisation.

This concept

is

achieved by

consistent measurement

and feedback

of the

Company’s Management

System in

order to

generate

continuous

and

sustainable

improvement

in

Health,

Safety,

Security,

and

Quality

and

Environmental

(including

Energy

Efficiency)

(HSSQE)

management

processes. The

failure

of

a

vessel

owner or

bareboat charterer

to comply

with the

ISM Code

may subject

such party

to increased

liability, may

decrease available insurance coverage for the affected vessels and

may result in a denial of access to, or

detention in, certain ports.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they

operate. This

certificate evidences

compliance by

a vessel’s management

with the

ISM Code

requirements

for a

safety management

system. No

vessel can

obtain a

safety management

certificate unless

its manager

has been

awarded a document

of compliance, issued

by each flag

state, under the

ISM Code. We

have

obtained applicable documents of compliance for our offices and safety management certificates for all of

our vessels

for which

the certificates

are required by

the IMO.

The documents of

compliance and safety

management certificate are renewed as required.

Regulation II-1/3-10

of

the

SOLAS Convention

governs ship

construction and

stipulates that

ships

over

150 meters

in length

must have

adequate strength,

integrity and

stability to

minimize risk

of loss

or pollution.

Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012,

with July 1,

2016 set for application to new oil tankers and bulk carriers.

The SOLAS Convention regulation II-1/3-10

on goal-based

ship construction

standards for

bulk carriers

and oil

tankers, which

entered into

force on

January 1, 2012, requires

that all oil tankers

and bulk carriers of

150 meters in length

and above, for which

the building

contract is

placed on

or after

July 1,

2016, satisfy

applicable structural

requirements conforming

to

the

functional

requirements

of

the

International

Goal-based

Ship

Construction

Standards

for

Bulk

Carriers and Oil Tankers (“GBS Standards”).

Amendments to

the SOLAS Convention

Chapter VII

apply to

vessels transporting dangerous

goods and

require those

vessels be

in

compliance with

the

International Maritime

Dangerous Goods

Code (“IMDG

Code”). Effective

January 1, 2018,

the IMDG

Code includes (1)

updates to the

provisions for radioactive

material, reflecting

the

latest provisions

from the

International Atomic

Energy Agency,

(2) new

marking,

packing

and

classification

requirements

for

dangerous

goods,

and

(3)

new

mandatory

training

requirements. Amendments which took effect

on January 1, 2020

also reflect the latest

material from the

UN Recommendations on the Transport of Dangerous

Goods, including (1) new provisions

regarding IMO

type 9 tank, (2) new abbreviations

for segregation groups, and

(3) special provisions for carriage

of lithium

batteries and of vehicles powered by flammable liquid or

gas. Additional amendments came into force on

58

June 1,

2022, include

(1) addition

of a

definition of

dosage rate,

(2) additions

to the

list of

high consequence

dangerous goods, (3)

new provisions for medical/clinical

waste, (4) addition

of various ISO

standards for

gas cylinders, (5) a new handling code, and (6) changes to stowage and

segregation provisions.

The

IMO

has

also

adopted

the

International

Convention

on

Standards

of

Training,

Certification

and

Watchkeeping for Seafarers (“STCW”).

As of February

2017, all seafarers

are required to

meet the STCW

standards

and

be in

possession of

a

valid STCW

certificate.

Flag

states that

have

ratified SOLAS

and

STCW

generally

employ

the

classification

societies,

which

have

incorporated

SOLAS

and

STCW

requirements into their class rules, to undertake surveys to confirm

compliance.

The

IMO's

Maritime

Safety

Committee

and

MEPC,

respectively,

each

adopted

relevant

parts

of

the

International Code for Ships Operating in Polar Water

(the “Polar Code”). The Polar Code, which entered

into force

on January

1, 2017,

covers design,

construction, equipment,

operational, training,

search and

rescue as well

as environmental protection matters

relevant to ships

operating in the

waters surrounding

the two

poles. It

also includes mandatory

measures regarding safety

and pollution prevention

as well as

recommendatory provisions. The Polar Code applies to new ships constructed after January 1, 2017, and

after

January

1,

2018,

ships

constructed

before

January

1,

2017

are

required

to

meet

the

relevant

requirements by the earlier of their first intermediate or renewal survey.

Furthermore, recent action by the

IMO’s Maritime Safety Committee and United

States agencies indicates

that cybersecurity regulations for the maritime industry

are likely to be further developed in the near future

in an

attempt to

combat cybersecurity

threats. By

IMO resolution,

administrations are

encouraged

to ensure

that

cyber-risk management

systems must

be

incorporated

by

ship-owners

and

managers

by

their

first

annual

Document

of

Compliance audit

after

January

1,

2021. In

February 2021,

the

U.S.

Coast

Guard

published guidance on addressing cyber risks in a vessel’s safety management system. This

might cause

companies

to

create

additional

procedures

for

monitoring

cybersecurity,

which

could

require

additional

expenses and/or capital expenditures.

The impact of future regulations is hard to predict at this

time.

In June

2022, SOLAS

also set

out new

amendments that

took effect

on January

1, 2024,

which include

new

requirements for:

(1)

the

design for

safe

mooring operations,

(2)

the

Global

Maritime

Distress and

Safety System (“GMDSS”),

(3) watertight integrity, (4) watertight doors

on cargo ships,

(5) fault-isolation of

fire detection

systems, (6)

life-saving appliances, and

(7) safety

of ships

using LNG

as fuel.

These new

requirements may impact the cost of our operations.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions

that impose liability for pollution in

international waters

and

the

territorial

waters

of

the

signatories

to

such

conventions.

For

example,

the

IMO

adopted

an

International

Convention

for

the

Control

and

Management

of

Ships’

Ballast

Water

and

Sediments, (the

“BWM Convention”), in 2004. The BWM Convention entered into force on September 8, 2017.

The BWM

Convention requires ships to manage their

ballast water to remove, render harmless, or

avoid the uptake

or discharge of

new or invasive

aquatic organisms

and pathogens

within ballast water

and sediments.

The

BWM

Convention’s

implementing

regulations

call

for

a

phased

introduction

of

mandatory

ballast

water

exchange requirements, to

be replaced in

time with mandatory

concentration limits, and

require all ships

to carry a ballast water record book and an international ballast

water management certificate.

On December 4, 2013, the IMO

Assembly passed a resolution revising the application dates

of the BWM

Convention so that

the dates are

triggered by the

entry into force

date and not

the dates originally

in the

BWM

Convention.

This, in

effect,

makes

all

vessels delivered

before the

entry into

force date

“existing

vessels” and allows

for the installation

of ballast water

management systems on

such vessels at

the first

International Oil Pollution Prevention (“IOPP”) renewal survey following entry into force of the convention.

The MEPC adopted updated guidelines for approval of ballast

water management systems (G8) at MEPC

70. At MEPC

71, the schedule

regarding the BWM

Convention’s implementation dates

was also discussed

59

and amendments were introduced to

extend the date existing vessels

are subject to certain

ballast water

standards. Those changes were adopted

at MEPC 72. Ships

over 400 gross tons

generally must comply

with a

“D-1 standard,”

requiring the

exchange of

ballast water

only in

open seas

and away

from coastal

waters.

The “D-2 standard” specifies

the maximum amount of

viable organisms allowed to

be discharged,

and compliance

dates vary

depending on

the IOPP

renewal dates.

Depending on

the date

of the

IOPP

renewal survey,

existing vessels

must comply

with the D-2

standard on

or after

September 8,

2019. For

most ships, compliance

with the D-2 standard will

involve installing on-board

systems to treat ballast

water

and eliminate

unwanted organisms.

Ballast water

management systems,

which include

systems that

make

use

of chemical,

biocides, organisms

or

biological mechanisms,

or which

alter the

chemical or

physical

characteristics of the

ballast water,

must be approved

in accordance with IMO

Guidelines (Regulation D-

3). As of

October 13, 2019,

MEPC 72’s amendments

to the BWM

Convention took

effect, making the

Code

for

Approval

of

Ballast

Water

Management

Systems,

which

governs

assessment

of

ballast

water

management systems, mandatory rather than permissive, and formalized an implementation schedule for

the D-2 standard. Under these amendments,

all ships must meet the D-2

standard by September 8, 2024.

Costs of compliance with these

regulations may be substantial.

Additionally, in November 2020, MEPC 75

adopted

amendments to

the

BWM

Convention which

would require

a

commissioning test

of the

ballast

water management system for the initial survey or when performing an additional survey for retrofits. This

analysis

will

not

apply

to

ships

that

already

have

an

installed

BWM

system

certified

under

the

BWM

Convention. These amendments have

entered into force

on June 1,

2022. In December

2022, MEPC 79

agreed that it

should be permitted to

use ballast tanks for

temporary storage of treated

sewage and grey

water.

MEPC 79 also

established that ships

are expected to

return to D-2

compliance after experiencing

challenging uptake water

and bypassing a

BWM system should

only be used as

a last resort. In

July 2023,

MEPC 80 approved a plan for a comprehensive

review of the BWM Convention. over the next

three years

and

the

corresponding

development

of

a

package

of

amendments

to

the

Convention.

MEPC

80

also

adopted further

amendments relating

to Appendix

II of

the BWM

Convention concerning

the form

of the

Ballast Water Record Book, which are expected to

enter into force in February 2025.

A protocol for ballast

water

compliance

monitoring

devices

and

unified

interpretation

of

the

form

of

the

BWM

Convention

certificate were also adopted.

Once

mid-ocean

exchange

ballast

water

treatment

requirements

become

mandatory

under

the

BWM

Convention, the

cost of

compliance could

increase for

ocean carriers

and may have

a material effect

on

our operations. Irrespective of

the BWM convention, certain

countries such as the U.S.

have enforced and

implemented regional requirement related to the system certification,

operation and reporting.

The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the

“Bunker

Convention”) to

impose

strict liability

on

ship

owners

(including the

registered

owner,

bareboat

charterer, manager

or operator) for

pollution damage in jurisdictional

waters of ratifying states

caused by

discharges of

bunker fuel.

The Bunker

Convention requires registered

owners of

ships over

1,000 gross

tons

to

maintain

insurance

for

pollution

damage

in

an

amount

equal

to

the

limits

of

liability

under

the

applicable

national

or

international

limitation

regime

(but

not

exceeding

the

amount

calculated

in

accordance with the LLMC).

With respect to non-ratifying

states, liability for spills or

releases of oil carried

as fuel

in ship’s

bunkers typically

is determined by

the national

or other

domestic laws

in the

jurisdiction

where the events or damages occur.

Ships are

required to

maintain a

certificate attesting

that they

maintain adequate

insurance to

cover an

incident. In jurisdictions, such

as the United

States where the

Bunker Convention has not

been adopted,

various legislative schemes or

common law govern, and

liability is imposed either

on the basis of

fault or

on a strict-liability basis.

Anti-Fouling Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful

Anti-fouling Systems on

Ships,

or

the

“Anti-fouling

Convention.”

The

Anti-fouling

Convention,

which

entered

into

force

on

60

September 17,

2008,

prohibits

the

use

of

organotin

compound

coatings

to

prevent

the

attachment

of

mollusks and other sea life

to the hulls of vessels.

Vessels of over 400 gross tons engaged in

international

voyages will also be required to undergo an initial survey before

the vessel is put into service or before an

International Anti-fouling System Certificate is issued for

the first time; and subsequent

surveys when the

anti-fouling systems

are altered

or replaced.

Vessels of 24

meters in

length or

more but

less than

400 gross

tonnage engaged in international voyages will have to carry a Declaration on Anti-fouling Systems signed

by the owner or authorized agent.

We have obtained Anti-fouling System Certificates for all of our vessels that are subject to the Anti-fouling

Convention.

Requirements for the Safe and Environmentally Sound Recycling

of Ships

In

2009

the

Hong

Kong

International

Convention

and

MEPC

269(68)

adopted

the

guidelines

for

the

preparation of

the Inventory

of Hazardous

Materials. The

Convention concerns

all vessels

over 500

GT

entitled

to

fly

the

flag

of

a

Party

or

operating

under

its

authority,

with

some

exceptions

like

warships.

According to

the Convention

the shipowner

should control

Ship’s Hazardous

Materials inherent

in ship’s

structure,

machinery,

equipment

and

paints,

coatings

and

prohibit

the

new

installations

of

Hazardous

Materials, by maintaining an Inventory of Hazardous Materials (IHM). It is the Company’s responsibility to

maintain the IHM

Part I up

to date, during

the life of

the ship, according

to MEPC Guidelines.

The ships

are

subject

to

survey

(initial,

renewal,

additional

and

final)

and

certification

and

should

keep

a

valid

International

Certificate

on

Inventory

of

Hazardous

Materials

or

an

International

Ready

for

Recycling

Certificate (in

case of

recycling), on

board. For

ships been

resulted to

contain hazardous

materials (like

asbestos),

actions

for

removal

should

be

taken

by

the

shipowner.

The

ships

should

only

be

recycled

according to the regulations. If the ship is detected to be in violation of this Convention, the Party carrying

out an inspection may take

steps to warn, detain, dismiss, or

exclude the ship from its

ports, which might

have an impact in our commercial image and

cause high fines to the company. Our fleet already complies

with this

regulation, although

not yet

into force,

but the

preparation, maintenance and

whenever needed

removal have resulted in substantial costs.

Compliance Enforcement

Noncompliance

with

the

ISM

Code

or

other

IMO

regulations

may

subject

the

ship

owner

or

bareboat

charterer to increased liability, may lead to decreases

in available insurance coverage

for affected vessels

and may

result in

the denial

of access

to, or

detention in,

some ports.

The USCG

and European

Union

authorities have

indicated that vessels

not in

compliance with the

ISM Code

by applicable

deadlines will

be prohibited

from trading

in U.S.

and European

Union ports,

respectively.

As of

the date

of this

report,

each of our vessels

is ISM Code certified. The

IMO continues to review and

introduce new regulations. It

is impossible to

predict what additional regulations,

if any,

may be passed

by the IMO

and what effect,

if

any, such regulations might have on our operations.

U.S. Regulations

The U.S. Oil Pollution

Act of 1990 and

the Comprehensive Environmental Response, Compensation and

Liability Act

The U.S. Oil Pollution Act

of 1990 (“OPA”)

established an extensive regulatory and liability regime for

the

protection and

cleanup of

the environment

from oil

spills. OPA

affects all

“owners and

operators” whose

vessels trade or

operate within the U.S., its territories

and possessions or whose

vessels operate in U.S.

waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around

the U.S.

The U.S.

has

also

enacted

the

Comprehensive

Environmental

Response,

Compensation

and

Liability Act (“CERCLA”), which applies

to the discharge of hazardous substances other

than oil, except in

limited circumstances, whether on land or at sea.

OPA and CERCLA both define “owner and operator” in

61

the case of a vessel as any person owning, operating or chartering by demise,

the vessel.

Both OPA and

CERCLA impact our operations.

Under OPA,

vessel owners

and operators

are “responsible

parties” and

are jointly,

severally and

strictly

liable (unless the

spill results solely

from the act or

omission of a

third party, an act of God

or an act

of war)

for

all

containment

and

clean-up

costs

and

other

damages

arising

from

discharges

or

threatened

discharges of oil

from their

vessels, including bunkers

(fuel).

OPA

defines these other

damages broadly

to include:

(i)

injury to, destruction or loss of, or loss of use of, natural resources and

related assessment costs;

(ii)

injury to, or economic losses resulting from, the destruction of

real and personal property;

(iii)

loss of subsistence use of natural resources that are injured, destroyed

or lost;

(iv)

net

loss of

taxes, royalties,

rents, fees

or net

profit revenues

resulting from

injury,

destruction or

loss of real or personal property, or natural resources;

(v)

lost profits

or impairment

of earning

capacity due

to injury,

destruction or

loss of

real or

personal

property or natural resources; and

(vi)

net

cost

of

increased or

additional

public services

necessitated by

removal

activities

following a

discharge of oil, such as protection from fire,

safety or health hazards, and loss of

subsistence use

of natural resources.

OPA

contains

statutory

caps

on

liability

and

damages;

such

caps

do

not

apply

to

direct

cleanup

costs.

Effective November

12, 2019,

the USCG

adjusted the

limits of

OPA

liability for

non-tank vessels,

edible oil

tank vessels,

and any

oil spill

response vessels,

to the

greater of

$1,200 per

gross ton

or $997,100

(subject to periodic

adjustment for

inflation). On December

23, 2022,

the USCG issued

a final rule

to adjust

the limitation of

liability under the OPA.

Effective March 23,

2022, the new adjusted

limits of OPA

liability

for non-tank

vessels, edible oil

tank vessels,

and any

oil spill

response vessels,

to the

greater of

$1,300

per gross

ton or

$1,076,000 (subject

to periodic

adjustment for

inflation).These limits

of liability

do not

apply

if an incident was proximately caused by the violation of an applicable U.S. federal safety,

construction or

operating

regulation

by

a

responsible

party

(or

its

agent,

employee

or

a

person

acting

pursuant

to

a

contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on

liability similarly does not apply if the responsible

party fails or refuses to (i) report the incident as required

by law where the responsible party knows or

has reason to know of the incident; (ii)

reasonably cooperate

and assist

as requested

in connection

with oil

removal activities;

or (iii)

without sufficient

cause, comply

with an order issued under the Federal

Water Pollution Act (Section 311 (c), (e)) or the Intervention on the

High Seas Act.

CERCLA contains

a similar

liability regime

whereby owners

and operators

of vessels

are liable

for cleanup,

removal and remedial costs, as well as damages for

injury to, or destruction or loss of, natural resources,

including

the

reasonable

costs

associated

with

assessing the

same,

and

health

assessments

or

health

effects studies. There is no liability

if the discharge of a hazardous

substance results solely from the

act or

omission of a third party, an act of God

or an act of war. Liability under

CERCLA is limited to

the greater of

$300 per gross ton or $5.0 million for vessels carrying

a hazardous substance as cargo and the greater of

$300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible

person liable for the total cost

of response and damages) if

the release or threat of release

of a hazardous

substance

resulted

from

willful

misconduct

or

negligence,

or

the

primary

cause

of

the

release

was

a

violation of applicable safety, construction or operating standards or regulations.

The limitation on liability

also does

not apply

if the

responsible person

fails or

refused to

provide all

reasonable cooperation

and

assistance as requested in connection with response activities where

the vessel is subject to OPA.

62

OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort

law.

OPA

and CERCLA both require

owners and operators of vessels

to establish and maintain

with the

USCG evidence of

financial responsibility sufficient to

meet the maximum

amount of liability to

which the

particular

responsible

person

may

be

subject.

Vessel

owners

and

operators

may

satisfy

their

financial

responsibility obligations by providing a proof of insurance,

a surety bond, qualification as a self-insurer or

a

guarantee.

We comply

and

plan

to

comply going

forward

with

the

USCG’s

financial

responsibility

regulations by providing applicable certificates of financial responsibility.

The 2010

Deepwater Horizon

oil spill

in the

Gulf of

Mexico resulted

in additional

regulatory initiatives

or

statutes, including higher liability caps under OPA, new regulations regarding offshore oil and

gas drilling,

and

a

pilot

inspection

program

for

offshore

facilities.

However,

several

of

these

initiatives

and

regulations have

been

or

may

be

revised.

For

example,

the

U.S.

Bureau

of

Safety

and

Environmental Enforcement’s

(“BSEE”)

revised

Production

Safety

Systems

Rule

(“PSSR”),

effective

December 27,

2018, modified

and relaxed

certain environmental

and safety

protections under

the 2016

PSSR.

Additionally, the BSEE amended the Well Control Rule, effective July 15,

2019, which rolled back

certain

reforms

regarding

the

safety

of

drilling

operations,

and

the

former

U.S.

President

Trump

had

proposed leasing

new sections

of U.S.

waters to

oil and

gas companies

for offshore

drilling.

In January

2021,

U.S.

President

Biden

signed

an

executive

order

temporarily

blocking

new

leases

for

oil

and

gas

drilling

in

federal

waters.

However,

attorney

generals

from

13

states

filed

suit

in

March

2021

to

lift

the

executive order,

and in

June 2021,

a federal

judge in

Louisiana granted

a preliminary

injunction against

the

Biden

administration,

stating

that

the

power

to

pause

offshore

oil

and

gas

leases

“lies

solely

with

Congress.” In August

2022, a federal

judge in Louisiana

sided with Texas

Attorney General Ken

Paxton,

along with

the other

12 plaintiff states,

by issuing

a permanent

injunction against

the Biden

Administration’s

moratorium on oil and gas leasing on federal public lands and offshore waters. After being blocked by the

courts, in

September 2023,

the Biden

administration announced

a scaled

back offshore

oil drilling

plan,

including just

three oil

lease sales in

the Gulf

of Mexico.

With these rapid

changes, compliance with

any

new

requirements

of

OPA and

future

legislation

or

regulations

applicable

to

the

operation

of

our

vessels could impact the cost of our operations and adversely affect our business.

OPA

specifically permits individual

states to

impose their own

liability regimes with

regard to oil

pollution

incidents

occurring

within

their

boundaries,

provided

they

accept,

at

a

minimum,

the

levels

of

liability

established

under

OPA

and

some

states

have

enacted

legislation

providing

for

unlimited

liability

for

oil

spills.

Many U.S. states that border

a navigable waterway have enacted

environmental pollution laws that

impose

strict liability

on a

person for

removal costs

and damages

resulting from

a

discharge

of oil

or

a

release of a

hazardous substance.

These laws may be

more stringent than U.S.

federal law.

Moreover,

some states have enacted legislation providing for unlimited liability for discharge of pollutants within their

waters,

although in

some

cases, states

which have

enacted this

type

of legislation

have not

yet issued

implementing regulations defining vessel owners’

responsibilities under these laws.

The Company intends

to comply with all applicable state regulations in the ports where

the Company’s vessels call.

We currently maintain pollution

liability coverage insurance

in the amount

of $1 billion per

incident for each

of our

vessels. If

the damages from

a catastrophic spill

were to

exceed our

insurance coverage, it

could

have an adverse effect on our business and results of operation.

Other United States Environmental Initiatives

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires

the EPA to

promulgate

standards

applicable

to

emissions

of

volatile

organic

compounds

and

other

air

contaminants.

The

CAA

requires

states

to

adopt

State

Implementation

Plans,

or

SIPs,

some

of

which

regulate emissions resulting from vessel loading and unloading

operations which may affect our vessels.

The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water

in U.S.

navigable waters

unless authorized

by a

duly-issued permit

or exemption,

and imposes

strict liability

63

in the

form of

penalties for

any unauthorized

discharges.

The CWA

also imposes

substantial liability for

the costs of removal, remediation and damages

and complements the remedies available

under OPA and

CERCLA.

In 2015, the EPA

expanded the definition of “waters of the United States” (“WOTUS”),

thereby

expanding federal authority

under the CWA.

Following litigation on

the revised WOTUS rule,

in December

2018, the EPA and Department of the Army proposed a revised,

limited definition of WOTUS. In 2019

and

2020,

the

agencies repealed

the

prior

WOTUS Rule

and

promulgated the

Navigable Waters

Protection

Rule (“NWPR”)

which significantly

reduced the

scope and

oversight of

EPA

and

the

Department of

the

Army

in

traditionally

non

navigable

waterways.

On

August

30,

2021,

a

federal

district

court

in

Arizona

vacated the NWPR and directed the agencies

to replace the rule. On December 7,

2021, the EPA and the

Department of

the Army

proposed a

rule that

would reinstate

the pre-2015

definition. .

In January

2023,

the revised WOTUS rule was codified in place

of the vacated NWPR. On May 25, 2023,

the United States

Supreme Court ruled in the case Sackett v. EPA

that only wetlands and permanent bodies of water with a

"continuous surface

connection" to

"traditional interstate

navigable waters"

are covered

by the

CWA, further

narrowing the application of the WOTUS rule. On August 2023, the EPA

and the Department of the Army

issued the final

WOTUS rule, effective

September 8, 2023,

that largely reinstated

the pre-2015 definition

and applied the

Sackett

ruling.

The EPA and the

USCG have

also enacted

rules relating

to ballast

water discharge,

compliance with

which

requires the

installation of

equipment on

our vessels

to treat

ballast water

before it

is discharged

or the

implementation of other port

facility disposal arrangements or

procedures at potentially substantial costs,

and/or otherwise restrict our

vessels from entering U.S.

Waters.

The EPA will regulate these ballast water

discharges and other discharges incidental to the normal operation

of certain vessels within United States

waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December

4,

2018

and

replaces

the

2013

Vessel

General

Permit

(“VGP”)

program

(which

authorizes

discharges

incidental to operations

of commercial

vessels and

contains numeric

ballast water

discharge limits

for most

vessels

to

reduce

the

risk

of

invasive

species

in

U.S.

waters,

stringent

requirements

for

exhaust

gas

scrubbers, and

requirements for

the use

of environmentally

acceptable lubricants)

and current

Coast Guard

ballast

water

management

regulations

adopted

under

the

U.S.

National

Invasive

Species

Act

(“NISA”),

such

as

mid-ocean

ballast

exchange

programs

and

installation

of

approved

USCG

technology

for

all

vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters.

VIDA establishes

a new framework

for the regulation

of vessel incidental

discharges under Clean

Water Act (CWA), requires

the

EPA

to

develop

performance

standards

for

those

discharges

within

two

years

of

enactment,

and

requires the

U.S. Coast

Guard to develop

implementation, compliance,

and enforcement

regulations within

two years

of EPA’s

promulgation of

standards.

Under VIDA,

all provisions

of the

2013 VGP

and USCG

regulations regarding

ballast water

treatment remain

in force

and effect

until the

EPA and U.S.

Coast Guard

regulations

are

finalized.

Non-military,

non-recreational

vessels

greater

than

79

feet

in

length

must

continue to comply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or

retention of a

PARI form and submission

of annual

reports. We have submitted

NOIs for our

vessels where

required.

Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation

of ballast water

treatment equipment

on our

vessels or

the implementation

of other

port facility

disposal

procedures at potentially substantial cost or may otherwise restrict

our vessels from entering U.S. waters.

European Union Regulations

In

October

2009,

the

European

Union

amended

a

directive

to

impose

criminal

sanctions

for

illicit

ship-

source discharges of polluting substances, including minor discharges,

if committed with intent, recklessly

or with serious negligence and the discharges individually or in the aggregate result in deterioration of the

quality

of

water.

Aiding

and

abetting

the

discharge

of

a

polluting

substance

may

also

lead

to

criminal

penalties. The

directive applies

to all

types of

vessels, irrespective

of their

flag, but certain

exceptions apply

to warships or where human safety

or that of the ship is

in danger. Criminal liability for pollution may result

in

substantial

penalties

or

fines

and

increased

civil

liability

claims.

Regulation

(EU)

2015/757

of

the

European Parliament

and of

the Council

of 29

April 2015

(amending EU

Directive 2009/16/EC)

governs

the monitoring, reporting

and verification of

carbon dioxide emissions

from maritime transport,

and, subject

64

to some exclusions,

requires companies with

ships over 5,000

gross tonnage to

monitor and report

carbon

dioxide emissions annually, which may cause us to incur additional expenses.

The European Union has adopted

several regulations and directives requiring, among

other things, more

frequent inspections

of high-risk ships,

as determined

by type, age,

and flag as

well as the

number of

times

the ship has been detained. The European

Union also adopted and extended a

ban on substandard ships

and enacted

a minimum

ban period

and a

definitive ban

for repeated

offenses. The

regulation also

provided

the

European

Union

with

greater

authority

and

control

over

classification

societies,

by

imposing

more

requirements on classification societies and providing for fines or penalty payments for

organizations that

failed to comply. Furthermore,

the EU has implemented

regulations requiring

vessels to use

reduced sulfur

content

fuel

for

their

main

and

auxiliary

engines.

The

EU

Directive

2005/33/EC

(amending

Directive

1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine

fuels. In

addition, the EU imposed

a 0.1% maximum

sulfur requirement for

fuel used

by ships

at berth in

the

Baltic,

the

North

Sea

and

the

English

Channel

(the

so

called

“SOx-Emission

Control

Area”).

As

of

January 2020, EU member states must also ensure that ships in all EU

waters, except the SOx-Emission

Control Area, use fuels with a 0.5% maximum sulfur content.

On September

15, 2020,

the European

Parliament voted

to include

greenhouse gas

emissions from

the

maritime sector in the European Union’s carbon

market, the EU Emissions Trading System (“EU ETS”)

as

part of its “Fit-for-55”

legislation to reduce

net greenhouse gas

emissions by at

least 55% by 2030.

On July

14, 2021, the European Parliament

formally proposed its plan,

which would involve gradually

including the

maritime sector from

2023 and phasing the

sector in over three-year

period. This will

require shipowners

to buy

permits to cover

these emissions.

The Environment Council

adopted a general

approach on the

proposal

in

June

2022.

On

December

18,

2022,

the

Environmental

Council

and

European

Parliament

agreed to include

maritime shipping emissions within

the scope of

the EU ETS

on a gradual

introduction

of

obligations

for

shipping

companies

to

surrender

allowances

equivalent

to

a

portion

of

their

carbon

emissions: 40% for

verified emissions

from 2024,

70% for 2025

and 100% for

2026. Most large

vessels will

be included

in the

scope of

the EU

ETS from the

start. Big

offshore vessels

of 5,000

gross tonnage and

above will

be included

in the

'MRV'

on the

monitoring, reporting

and verification

of CO2

emissions from

maritime transport

regulation from

2025

and in

the

EU

ETS

from

2027. General

cargo vessels

and off-

shore vessels

between 400-5,000

gross tonnage

will be

included in

the

MRV

regulation from

2025 and

their inclusion in

EU ETS will

be reviewed

in 2026. Furthermore,

starting from January

1, 2026, the

ETS

regulations

will

expand

to

include

emissions

of

two

additional

greenhouse

gases:

nitrous

oxide

and

methane.

Compliance

with the

Maritime

EU

ETS

will

result

in

additional compliance

and

administration

costs

to

properly

incorporate

the

provisions

of

the

Directive

into

our

business

routines.

Additional

EU

regulations

which

are

part

of

the

EU’s

"Fit-for-55,"

could

also

affect

our

financial

position

in

terms

of

compliance and administration costs when they take effect.

EU Ship Recycling Regulation

The Regulation

is mostly

aligned with

the

Hong Kong

Convention on

Ship Recycling,

mentioned earlier

and aims quick

ratification of the

Convention. However, it sets

some additional requirements

and has been

into force since 2015 for new ships

and 2020 for existing ships. It concerns

vessels over 500 GT flying the

flag of a

member state or

vessels flying

the flag

of a 3

rd

party calling

at port or

anchorage of

member states.

Our

fleet

fully

complies

with

this

regulation.

Our

fleet’s

Inventories

of

Hazardous Materials

preparation,

certification and continuous maintenance have resulted in a

significant cost to the Company.

International Labour Organization

The International Labour Organization (the “ILO”) is

a specialized agency of the UN

that has adopted the

Maritime Labor Convention

2006 (“MLC 2006”). A

Maritime Labor Certificate

and a Declaration

of Maritime

Labor Compliance

is required

to ensure

compliance with

the MLC

2006 for

all ships

that are

500 gross

tonnage

or

over

and

are

either

engaged

in

international

voyages

or

flying

the

flag

of

a

Member

and

65

operating

from

a

port,

or

between

ports,

in

another

country. All

of

our

vessels

are

certified

under

the

Maritime Labor Convention 2006 (“MLC 2006”)

Greenhouse Gas Regulation

Currently,

the

emissions

of

greenhouse

gases

from

international

shipping

are

not

subject

to

the

Kyoto

Protocol to

the United

Nations Framework

Convention on

Climate Change,

which entered

into force

in 2005

and pursuant

to which

adopting countries have

been required to

implement national programs

to reduce

greenhouse gas emissions with targets extended through 2020.

International negotiations are continuing

with respect to a successor to the Kyoto Protocol, and

restrictions on shipping emissions may be included

in

any

new

treaty.

In

December 2009,

more

than

27

nations,

including the

U.S.

and

China,

signed

the

Copenhagen Accord,

which includes

a non-binding

commitment

to reduce

greenhouse gas

emissions.

The

2015 United Nations Climate Change Conference in Paris resulted

in the Paris Agreement, which entered

into force on

November 4, 2016

and does not

directly limit greenhouse

gas emissions

from ships. The

U.S.

initially

entered

into

the

agreement,

but

on

June

1,

2017,

the

former

U.S. President

Trump

announced

that the United States intends

to withdraw from the

Paris Agreement, and the

withdrawal became effective

on November 4, 2020.

On January 20, 2021, U.S.

President Biden signed an

executive order to rejoin

the

Paris Agreement,

which the U.S. officially rejoined on February 19, 2021.

At

MEPC

70

and

MEPC

71,

a

draft

outline

of

the

structure

of

the

initial

strategy

for

developing

a

comprehensive

IMO

strategy

on

reduction

of

greenhouse

gas

emissions

from

ships

was

approved.

In

accordance with this roadmap, in April 2018, nations at

the MEPC 72 adopted an initial strategy to reduce

greenhouse

gas

emissions

from

ships.

The

initial

strategy

identifies

“levels

of

ambition”

to

reducing

greenhouse

gas

emissions,

including

(1)

decreasing

the

carbon

intensity

from

ships

through

implementation of

further phases

of the

EEDI for

new ships;

(2) reducing

carbon dioxide

emissions per

transport

work,

as

an

average

across

international shipping,

by

at

least

40%

by

2030,

pursuing

efforts

towards 70%

by 2050,

compared to 2008

emission levels; and

(3) reducing the

total annual

greenhouse

emissions by

at least

50% by

2050 compared

to 2008

while pursuing

efforts

towards phasing

them out

entirely.

The initial strategy

notes that technological

innovation, alternative

fuels and/or energy

sources for

international shipping will be integral to achieve

the overall ambition.

These regulations could cause us to

incur additional

substantial expenses.

At MEPC

77, the

Member States

agreed to

initiate the

revision of

the Initial

IMO Strategy

on Reduction

of GHG

emissions from

ships, recognizing

the need

to strengthen

the ambition

during the

revision process.

In July

2023, MEPC

80 adopted

a revised

strategy, which includes

an enhanced

common ambition to

reach net-zero

greenhouse gas emissions

from international shipping

around or close to 2050, a

commitment to ensure an uptake of

alternative zero and near-zero greenhouse

gas fuels

by 2030,

as well

as i).

reducing the

total annual

greenhouse gas

emissions from

international

shipping by at

least 20%, striving for

30%, by 2030,

compared to 2008;

and ii). reducing

the total annual

greenhouse gas

emissions from

international shipping

by at

least 70%,

striving for

80%, by

2040, compared

to 2008.

The EU made

a unilateral

commitment to

reduce overall

greenhouse gas

emissions from

its member

states

from 20% of 1990 levels

by 2020. The EU also committed

to reduce its emissions

by 20% under the

Kyoto

Protocol’s

second

period

from

2013

to

2020.

Starting

in

January

2018,

large

ships

over

5,000

gross

tonnage calling at EU ports

are required to collect

and publish data on

carbon dioxide emissions

and other

information.

Under

the

European

Climate

Law,

the

EU

committed

to

reduce

its

net

greenhouse

gas

emissions by

at least

55% by

2030 through

its “Fit-for-55”

legislation package.

As part

of this

initiative,

regulations relating to

the inclusion of

greenhouse gas

emissions from the

maritime sector in

the European

Union’s carbon market are also forthcoming.

Any passage

of climate

control legislation

or other

regulatory initiatives

by the

IMO, the EU,

the U.S. or

other countries

where we

operate, or

any treaty

adopted at

the international

level to

succeed the

Kyoto

Protocol

or

Paris

Agreement,

that

restricts

emissions

of

greenhouse

gases

could

require

us

to

make

significant financial expenditures which we cannot

predict with certainty at this time.

Even in the absence

66

of climate control

legislation, our business

may be indirectly

affected to the

extent that climate

change may

result in sea level changes or certain weather events.

Vessel Security Regulations

Since

the

terrorist

attacks

of

September

11,

2001

in

the

United

States,

there

have

been

a

variety

of

initiatives intended

to enhance

vessel security

such as

the U.S.

Maritime Transportation

Security Act

of

2002 (“MTSA”). To

implement certain

portions of

the MTSA,

the

USCG issued

regulations requiring

the

implementation

of

certain

security

requirements

aboard

vessels

operating

in

waters

subject

to

the

jurisdiction of the

United States and

at certain ports

and facilities, some

of which are

regulated by the

EPA.

Similarly, Chapter XI-2

of the

SOLAS Convention

imposes detailed

security obligations

on vessels

and port

authorities and

mandates compliance

with the

International Ship

and Port

Facility Security

Code (“the ISPS

Code”). The ISPS Code is designed to enhance

the security of ports and ships against

terrorism. To trade

internationally,

a vessel

must attain

an International Ship

Security Certificate (“ISSC”) from

a recognized

security organization approved

by the vessel’s flag

state. Ships operating

without a valid

certificate may be

detained, expelled

from, or

refused entry

at port

until they

obtain an

ISSC.

The various

requirements, some

of

which

are

found

in

the

SOLAS

Convention, include,

for

example,

on-board

installation

of

automatic

identification systems to provide

a means for the

automatic transmission of safety-related

information from

among

similarly

equipped

ships

and

shore

stations,

including

information

on

a

ship’s

identity,

position,

course, speed

and navigational

status; on-board installation

of ship

security alert

systems, which

do not

sound on the vessel but only alert the authorities on shore; the development of vessel

security plans; ship

identification

number

to

be

permanently

marked

on

a

vessel’s

hull;

a

continuous

synopsis

record

kept

onboard showing a vessel's history including

the name of the ship, the state

whose flag the ship is entitled

to fly, the date on which the ship was registered

with that state, the ship's

identification number, the port at

which

the

ship

is

registered

and

the

name

of

the

registered

owner(s)

and

their

registered

address;

and compliance with flag state security certification requirements.

The USCG regulations, intended to align with

international maritime security standards, exempt non-U.S.

vessels

from

MTSA

vessel

security

measures,

provided

such

vessels

have

on

board

a

valid

ISSC

that

attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code.

Future security

measures could

have a

significant financial

impact on

us.

We intend

to comply

with the

various security measures addressed by MTSA, the

SOLAS Convention and the ISPS Code.

The cost of

vessel security

measures has

also been

affected by

the escalation

in the

frequency of

acts of

piracy against

ships, notably off the coast of Somalia, including

the Gulf of Aden and Arabian Sea

area.

Substantial loss

of

revenue

and

other

costs

may

be

incurred

as

a

result

of

detention

of

a

vessel

or

additional

security

measures, and

the risk

of uninsured

losses could

significantly affect

our business.

Costs are

incurred in

taking

additional

security

measures

in

accordance

with

Best

Management

Practices

to

Deter

Piracy,

notably those contained in the BMP5 industry standard.

Inspection by Flag administration and Classification Societies

The flag represents the nationality of the ship, showing that it’s under the control of the registered country

and must comply with international and maritime law of it. The flag is required to

take measures to ensure

safety at sea

and should verify that

ships under its

authority,

conform relevant international standards, in

regard to construction, design, equipment and manning of ships,

through on board physical inspections.

The hull and machinery of every commercial

vessel must be classed by a classification society

authorized

by

its

country

of

registry.

The

classification

society

certifies

that

a

vessel

is

safe

and

seaworthy

in

accordance with the

applicable rules and regulations

of the country

of registry of the

vessel and SOLAS.

Most

insurance

underwriters

make

it

a

condition

for

insurance

coverage

and

lending

that

a

vessel

be

certified

“in

class”

by

a

classification

society

which

is

a

member

of

the

International

Association

of

Classification Societies, the IACS.

The IACS has adopted harmonized Common Structural Rules, or “the

67

Rules”, which

apply to

oil tankers

and bulk

carriers contracted

for construction

on or after

July 1,

2015.

The

Rules attempt to create a level of consistency between IACS Societies.

All of our vessels are certified as

being “in

class” by

all the

applicable Classification Societies

(e.g., American

Bureau of

Shipping, Lloyd's

Register of Shipping).

A vessel must undergo annual surveys,

intermediate surveys, drydockings and special surveys. In

lieu of

a special survey,

a vessel’s machinery may be

on a continuous survey cycle, under

which the machinery

would

be

surveyed

periodically

over

a

five-year

period.

Every

vessel

should

have

a

minimum

of

two

examinations of

the outside

of a

vessel's bottom

and related

items during

each five-year

special survey

period. One such examination is to

be carried out in conjunction with the

Special Periodical Survey.

In all

cases, the

interval between

any two

such examinations

is not

to exceed

36 months.

In all

cases, the

interval

between any two such examinations is not to exceed 36 months. If any vessel does not maintain its class

and/or fails any

annual survey, intermediate survey, drydocking

or special survey, the

vessel will be

unable

to

carry cargo

between ports

and

will be

unemployable and

uninsurable which

could

cause

us to

be

in

violation of certain covenants in our loan agreements.

Any such inability to carry cargo or be employed,

or

any such

violation of

covenants, could

have a

material adverse

impact on

our financial

condition and

results

of operations.

Risk of Loss and Liability Insurance

General

The operation

of any cargo

vessel includes

risks such

as mechanical

failure, physical damage,

collision,

property

loss,

cargo

loss

or

damage

and

business

interruption due

to

political

circumstances

in

foreign

countries, piracy incidents, hostilities and

labor strikes. In

addition, there is

always an inherent

possibility

of

marine

disaster,

including

oil

spills

and

other

environmental

mishaps,

and

the

liabilities

arising

from

owning

and

operating

vessels

in

international

trade.

OPA,

which

imposes

virtually

unlimited

liability

upon shipowners,

operators

and bareboat

charterers

of any

vessel

trading

in

the

exclusive

economic

zone of the

United States

for certain

oil pollution

accidents in

the United

States, has

made liability

insurance

more

expensive

for shipowners

and

operators

trading

in

the United

States

market. We

carry

insurance

coverage as customary in

the shipping industry. However, not all risks can be

insured, specific claims

may

be rejected, and we might not be always

able to obtain adequate insurance coverage at

reasonable rates.

While we maintain hull and machinery insurance, war

risks insurance, protection and indemnity cover and

freight, demurrage and

defense cover for

our operating fleet

in amounts that

we believe to

be prudent to

cover

normal risks

in

our

operations, we

may

not

be

able to

achieve

or maintain

this

level of

coverage

throughout

a

vessel's

useful life.

Furthermore, while

we

believe

that

our

present

insurance

coverage is

adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be

paid,

or that we will always be able to obtain adequate insurance coverage

at reasonable rates.

Hull & Machinery and War Risks Insurance

We maintain marine hull and machinery

and war risks insurance, which cover,

among other marine risks,

the risk

of actual

or constructive

total loss,

for all

of our

vessels. Our

vessels are

each covered

up to

at

least

fair

market

value

with

deductibles

ranging

to

a

maximum

of

$100,000

per

vessel

per

incident

for

Panamax, Kamsarmax and

Post-Panamax vessels

and $150,000 per

vessel per incident

for Capesize and

Newcastlemax vessels.

Protection and Indemnity Insurance

Protection and indemnity

insurance is provided

by mutual protection

and indemnity associations,

or “P&I

Associations,” and covers our third-party liabilities in connection with our shipping activities. This includes

third-party liability

and other

related expenses of

injury or

death of

crew, passengers and

other third

parties,

68

loss

or

damage

to

cargo,

claims

arising

from

collisions with

other

vessels,

damage

to

other

third-party

property,

pollution

arising

from

oil

or

other

substances,

and

salvage,

towing

and

other

including

wreck

removal.

Protection

and

indemnity

insurance

is

a

form

of

mutual

indemnity

insurance,

extended by protection and indemnity mutual associations, or “clubs.”

Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident.

The 13

P&I Associations

that comprise

the International

Group insure

approximately 90%

of the world’s

commercial

tonnage

and

have

entered

into

a

pooling

agreement

to

reinsure

each association’s

liabilities. The

International

Group’s

website

states

that

the

Pool

provides

a

mechanism

for

sharing

all

claims in

excess of

US$10 million up

to, currently,

approximately US$8.2 billion.

As a

member of

a P&I

Association,

which

is

a

member

of

the

International

Group,

we

are

subject

to

calls

payable

to

the

associations based on our

claim records as

well as the claim

records of all

other members of

the individual

associations

and

members

of

the shipping

pool

of

P&I

Associations

comprising

the

International

Group.

Our

vessels

may

be

subject

to

supplemental

calls

which

are

based

on

estimates

of

premium

income and anticipated and paid claims. Such

estimates are adjusted each year by

the Board of Directors

of the

P&I Association

until the

closing of

the relevant

policy year, which

generally occurs

within three

years

from the

end of the

policy year.

Supplemental calls, if

any,

are expensed when

they are

announced and

according to the period they relate to.

C.

Organizational structure

Diana Shipping Inc. is the sole owner of all of the issued and outstanding shares of the subsidiaries listed

in Exhibit 8.1 to this annual report.

D.

Property, plants and equipment

Since October 8, 2010, DSS owns

the land and the building where

we have our principal corporate offices

in Athens, Greece.

In addition, in

December 2014,

DSS acquired

a plot of

land jointly with

two other

individuals and in

November 2021 acquired

an additional part

of this land owned

by

one of our related parties. On July 6, 2023, the

Company purchased the remaining 1/3 from Alpha Sigma

Shipping Corp, a related party company, for the purchase price

of $1.2 million and became its sole

owner.

In 2024, we purchased two additional

plots of land from unrelated third parties

for an aggregate amount of

approximately $1.9 million.

All plots

of land

are in the

same area as

our principal offices.

Other than

this

interest

in

real

property,

our

only

material

properties

are

the

vessels

in

our

fleet,

owned

and

bareboat

chartered-in.

Item 4A.

Unresolved Staff Comments

None.

Item 5.

Operating and Financial Review and Prospects

The

following

management's

discussion

and

analysis

should

be

read

in

conjunction

with

our

historical

consolidated financial statements

and their notes included

elsewhere in this

annual report. This

discussion

contains forward-looking

statements that

reflect our

current views

with respect

to future

events and

financial

performance.

Our

actual

results

may

differ

materially

from

those

anticipated

in

these

forward-looking

statements as a result of certain

factors, such as those set forth

in the section entitled “Risk Factors”

and

elsewhere in this annual report.

A.

Operating results

69

Factors Affecting Our Results of Operations

We believe that our results of operations are affected by the following factors:

(1)

Average number of

vessels is the

number of vessels

that constituted our fleet

for the relevant

period, as

measured by

the sum

of the

number of

days each

vessel was

a part

of our

fleet during

the period divided by the number of calendar days in the period.

(2)

Ownership days are the aggregate number of days in a period during which

each vessel in our

fleet

has been

owned

by us.

Ownership days

are

an

indicator of

the

size of

our

fleet

over a

period

and

affect

both

the

amount

of

revenues

and

the

amount

of

expenses

that

we

record

during a period.

(3)

Available days are

the number of our

ownership days less the

aggregate number of days

that

our vessels are off-hire

due to scheduled repairs or

repairs under guarantee, vessel upgrades

or special surveys and the aggregate amount of time that we spend positioning our vessels for

such events.

The shipping

industry uses

available days

to measure

the number

of days

in a

period during which vessels should be capable of generating

revenues.

(4)

Operating days are

the number of

available days in

a period less

the aggregate number

of days

that

our

vessels

are

off-hire

due

to

any

reason,

including

unforeseen

circumstances.

The

shipping industry

uses operating

days to

measure the

aggregate number

of days

in a

period

during which vessels actually generate revenues.

(5)

We calculate

fleet utilization

by dividing

the number

of our

operating days

during a

period by

the number of our available days

during the period. The shipping industry uses

fleet utilization

to measure

a company's

efficiency in

finding suitable

employment for

its vessels

and minimizing

the

amount

of

days

that

its

vessels

are

off-hire

for

reasons

other

than

scheduled

repairs

or

repairs

under

guarantee,

vessel

upgrades,

special

surveys

or

vessel

positioning

for

such

events.

(6)

Time

charter

equivalent

rates,

or

TCE

rates,

are

defined

as

our

time

charter

revenues

less

voyage expenses

during a

period divided

by the

number of

our available

days during

the period,

which

is

consistent

with

industry

standards.

Voyage

expenses

include

port

charges,

bunker

(fuel)

expenses,

canal

charges

and

commissions.

TCE

rate

is

a

non-GAAP

measure,

and

management

believes

it

is

useful

to

investors

because

it

is

a

standard

shipping

industry

performance measure used primarily to

compare daily earnings generated by

vessels on time

charters

with

daily

earnings

generated

by

vessels

on

voyage

charters,

because

charter

hire

rates

for

vessels

on

voyage

charters

are

generally

not

expressed

in

per

day

amounts

while

charter hire rates for vessels on time charters are generally expressed

in such amounts.

(7)

Daily

vessel

operating

expenses,

which

include

crew

wages

and

the

cost

of

insurance, expenses relating to repairs and maintenance, the costs

of spares and consumable

stores,

tonnage

taxes

and

other

miscellaneous

expenses,

are

calculated

by

dividing

vessel

operating expenses by ownership days for the relevant period.

The following table reflects such factors for the periods indicated:

70

As of and for the

Year Ended December 31,

2023

2022

2021

Fleet Data:

Average number of vessels (1)

41.1

35.4

36.6

Number of vessels at year-end

40.0

42.0

33.0

Weighted average age of vessels at year-end (in

years)

10.5

10.2

10.4

Ownership days (2)

14,986

12,924

13,359

Available days (3)

14,867

12,449

13,239

Operating days (4)

14,824

12,306

13,116

Fleet utilization (5)

99.7%

98.9%

99.1%

Average Daily Results:

Time charter equivalent (TCE) rate (6)

$

16,713

$

22,735

$

15,759

Daily vessel operating expenses (7)

5,704

5,574

5,596

The following table reflects the calculation of our TCE rates for

the periods presented:

Year Ended December 31,

2023

2022

2021

(in thousands of U.S. dollars, except for TCE rates, which

are expressed in U.S. dollars, and available days)

Time charter revenues

$

262,098

$

289,972

$

214,203

Less: voyage expenses

(13,621)

(6,942)

(5,570)

Time charter equivalent revenues

$

248,477

$

283,030

$

208,633

Available days

14,867

12,449

13,239

Time charter equivalent (TCE) rate

$

16,713

$

22,735

$

15,759

Time Charter Revenues

Our revenues are driven primarily by

the number of vessels in our

fleet, the number of days during which

our vessels operate and

the amount of daily

charter hire rates that

our vessels earn under

charters, which,

in turn, are affected by a number of factors, including:

●

the duration of our charters;

●

our decisions relating to vessel acquisitions and disposals;

●

the amount of time that we spend positioning our vessels;

●

the amount of time that our vessels spend in drydock undergoing

repairs;

●

maintenance and upgrade work;

●

the age, condition and specifications of our vessels;

●

levels of supply and demand in the dry bulk shipping industry.

Vessels

operating on time

charters for a

certain period of

time provide more

predictable cash flows

over

that

period

of

time

but

can

yield

lower

profit

margins than

vessels

operating in

the

spot

charter market

71

during periods characterized by favorable market conditions. Vessels operating in the spot charter market

generate

revenues

that

are

less

predictable

but

may

enable

their

owners

to

capture

increased

profit

margins during

periods of

improvements in

charter rates

although their owners

would be

exposed to the

risk of

declining charter rates,

which may have

a materially adverse

impact on financial

performance. As

we employ vessels

on period charters,

future spot charter

rates may be

higher or lower

than the rates

at

which

we

have

employed

our

vessels

on

period

charters.

Our

time

charter

agreements

subject

us

to

counterparty risk.

In depressed

market conditions,

charterers may

seek to

renegotiate the

terms of

their

existing charter parties or

avoid their obligations under

those contracts. Should

a counterparty fail to

honor

their obligations

under agreements

with us,

we could

sustain significant

losses which

could have

a material

adverse effect on

our business,

financial condition,

results of

operations and

cash flows. Revenues

derived

from

time

charter

agreements

in

2023

decreased

compared

to

due

to

the

significant

decrease in

charter rates,

despite the

increase in

the size

of our

fleet, evident

in the

increase of

the average

number of vessels.

In 2024, the average

number of vessels will

decrease, as currently our

fleet consists of

41 vessels of which 39 vessels in operation, owned and chartered-in, and two under construction,

and we

have agreed to sell one of our vessels. As a result, although we have observed

that the time charter rates

have increased

since the

beginning of

2024, we

expect our

revenues in

2024 to

decrease compared

to

2023.

Voyage Expenses

We incur

voyage expenses

that mainly

include commissions

because all

of our

vessels are

employed

under

time charters that require the

charterer to bear voyage expenses

such as bunkers (fuel oil), port

and canal

charges. Although the charterer bears the cost

of bunkers, we also have bunker gain or

loss deriving from

the price differences of bunkers. When a vessel is delivered to a charterer,

bunkers are purchased by the

charterer and sold back

to us on the

redelivery of the vessel.

Bunker gain, or loss,

results

when a vessel

is redelivered by her charterer and delivered to the next charterer

at different bunker prices, or quantities.

We

currently pay

commissions ranging

from

4.75% to

5.00% of

the

total

daily charter

hire rate

of

each

charter

to

unaffiliated

ship

brokers,

in-house

brokers

associated

with

the

charterers,

depending

on

the

number of brokers

involved with arranging the

charter. In

addition, we pay

a commission to

DWM and to

DSS for those vessels

for which they provide

commercial management

services. The commissions

paid to

DSS are

eliminated from

our consolidated

financial statements

as intercompany

transactions. For

2024,

we expect

our voyage

expenses to

decrease compared

to 2023,

due to

the expected

decrease in

revenues.

The effect of

bunker prices cannot be determined,

as a gain or

loss from bunkers results mainly

from the

difference in

the value

of bunkers

paid by

the Company

when the

vessel is

redelivered to

the Company

from the

charterer under

the vessel’s

previous time

charter agreement

and the

value of

bunkers sold

by

the Company when the vessel is delivered to a new charterer.

Vessel Operating Expenses

Vessel operating expenses include

crew wages and

related costs,

the cost of

insurance, expenses

relating

to repairs and

maintenance, the cost

of spares and

consumable stores, tonnage

taxes, environmental

plan

costs

and

HSQ

and

vetting.

Our

vessel

operating

expenses

generally

represent

fixed

costs.

Vessel

operating expenses

have increased

since 2021

due to

the increase

in ownership

days. For

2024, we

expect

our operating expenses to decrease compared to 2023, as a result of the average decrease of the size of

the fleet compared to 2023.

Vessel Depreciation

The cost of our

vessels is depreciated

on a straight-line

basis over the estimated

useful life of each

vessel.

Depreciation is based

on the

cost of the

vessel less

its estimated salvage

value. We

estimate the useful

life of

our dry

bulk vessels

to be

25 years from

the date

of initial

delivery from

the shipyard,

which we

believe

is common in the

dry bulk shipping industry.

Furthermore, we estimate the salvage

values of our vessels

72

based on historical average prices

of the cost of

the light-weight ton of

vessels being scrapped. Effective

July 1, 2023, the Company

changed its estimated

scrap rate of its

vessels from $250 per

lightweight ton to

$400 per lightweight

ton, calculated

based on the

average demolition

prices in

different markets, during

the

last 15 years. During 2022, we

took delivery of ten vessels and

sold one and in 2023,

we took delivery of

one vessel and

sold three. Following

these transactions vessel

depreciation has increased

since 2021.

For

2024, we expect depreciation

expense to decrease due to

the increase of the

scrap rate in 2023

and the

decrease in the number of vessels in our fleet

as in 2024 we have sold one vessel and

we have agreed to

sell another one.

General and Administrative Expenses

We incur general

and administrative

expenses which

include our

onshore related

expenses such

as payroll

expenses

of

employees,

executive

officers,

directors

and

consultants,

compensation

cost

of

restricted

stock

awarded

to

senior

management

and

non-executive

directors,

traveling,

promotional

and

other

expenses of

the public

company,

such as

legal and

professional expenses and

other general expenses.

During the

last three

years, our

general and

administrative expenses

are increasing,

especially in

2023,

mainly due to payroll costs

and donations.

For 2024, we expect our

general and administrative expenses

to increase, due to anticipated increases in payroll and other office expenses. General and administrative

expenses are not

affected by the

size of the

fleet. However, they are affected

by the exchange

rate of Euro

to US Dollars,

as about half of our administrative expenses are in Euro.

Interest and Finance Costs

We incur

interest expense and

financing costs

in connection with

vessel-specific debt,

senior unsecured

bond and finance liabilities. As of December 31, 2023 our aggregate debt amounted

to $517.0 million and

our finance

liabilities amounted

to $133.3

million. During

2023, we

replaced LIBOR,

being the

reference

rate to calculate interest expense in our loan facilities having a floating rate, with term SOFR through loan

refinancings and one loan modification. Interest rates, which have been increasing since the

beginning of

2022, continued

to increase

in 2023

and in

combination with

the increased

average debt

outstanding in

2023, interest costs

increased significantly. For 2024,

we expect

interest and finance

costs to remain

at the

same levels with 2023, as we do not expect interest rates to increase,

while debt outstanding is expected

to decrease.

We manage

our exposure

in interest

rates, by

maintaining a

mix of

financing under

agreements with

floating

and fixed

interest rates. More

specifically,

during 2022, we

refinanced part of

our loans

having a floating

interest rate,

with sale

and leaseback

transactions

with fixed

rates. Also,

in 2023,

we entered

into an

interest

rate swap

for 30%

of our

$100 million

loan facility

with DNB,

dated June

26, 2023,

under which

we pay

fixed

interest and

receive floating.

Through these

agreements and

our

bond, also

bearing fixed

interest

rate, we

manage part

of our

exposure in

interest rates

caused by

the remaining

agreements which

bear

floating interest rates.

Lack of Historical Operating Data for Vessels before Their Acquisition

Although vessels are generally acquired free of charter, we have acquired (and may in the future acquire)

some vessels with time charters. It is rare

in the shipping industry for the last charterer

of the vessel in the

hands of the seller to continue as the first charterer

of the vessel in the hands of the buyer. In most cases,

when a

vessel is

under time

charter and

the buyer

wishes to

assume that

charter,

the vessel

cannot be

acquired without the charterer’s

consent and the buyer entering into

a separate direct agreement (called

a

“novation agreement”) with the

charterer to assume the

charter. The

purchase of a

vessel itself does not

transfer

the

charter

because

it

is

a

separate

service

agreement

between

the

vessel

owner

and

the

charterer.

73

Where we identify any intangible assets or liabilities associated with the acquisition

of a vessel, we record

all

identified assets

or

liabilities at

fair

value.

Fair value

is

determined by

reference to

market

data. We

value any

asset or

liability arising

from the

market value

of the

time charters

assumed when

a vessel

is

acquired. The amount to be recorded as an asset or liability at the

date of vessel delivery is based on the

difference

between

the

current

fair

market

value

of

the

charter

and

the

net

present

value

of

future

contractual cash

flows.

When the

present value

of the

time charter

assumed is

greater than the

current

fair market

value of

such charter, the

difference is

recorded as

prepaid charter

revenue.

When the

opposite

situation occurs,

any difference,

capped to

the vessel’s

fair value

on a

charter-free basis, is

recorded as

deferred revenue.

Such assets and

liabilities, respectively, are amortized

as a reduction of,

or an increase

in, revenue over the period of the time charter assumed.

When we

purchase a

vessel and

assume or

renegotiate a

related time

charter,

among others,

we must

take the following steps before the vessel will be ready to commence

operations:

●

obtain the charterer’s consent to us as the new owner;

●

obtain the charterer’s consent to a new technical

manager;

●

in some cases, obtain the charterer’s consent to

a new flag for the vessel;

●

arrange for a

new crew for the

vessel, and where the

vessel is on charter,

in some cases, the

crew must be approved by the charterer;

●

replace all hired equipment on board, such as gas cylinders

and communication equipment;

●

negotiate

and

enter

into

new

insurance

contracts

for

the

vessel

through

our

own

insurance

brokers;

●

register the vessel under a

flag state and perform

the related inspections in order

to obtain new

trading certificates from the flag state;

●

implement a new planned maintenance program for the vessel; and

●

ensure that the new

technical manager obtains new certificates for

compliance with the safety

and vessel security regulations of the flag state.

When we charter

a vessel

pursuant to a

long-term time

charter agreement

with varying rates,

we recognize

revenue on a straight-line basis, equal to the average revenue during

the term of the charter.

The following

discussion is

intended to

help you

understand how

acquisitions of

vessels affect

our business

and results of operations.

Our business is mainly comprised of the following elements:

●

employment and operation of our vessels; and

●

management of

the financial,

general and

administrative elements

involved in

the conduct

of

our business and ownership of our vessels.

The employment and operation of our vessels mainly require the

following components:

●

vessel maintenance and repair;

74

●

crew selection and training;

●

vessel spares and stores supply;

●

contingency response planning;

●

onboard safety procedures auditing;

●

accounting;

●

vessel insurance arrangement;

●

vessel chartering;

●

vessel security training and security response plans (ISPS);

●

obtaining of

ISM certification

and audit

for each

vessel within

the six

months of

taking over

a

vessel;

●

vessel hiring management;

●

vessel surveying; and

●

vessel performance monitoring.

The management of

financial, general and

administrative elements

involved in the

conduct of our

business

and ownership of our vessels mainly requires the following

components:

●

management of our

financial resources, including

banking relationships, i.e.,

administration of

bank loans and bank accounts;

●

management of our accounting system and records and financial

reporting;

●

administration of the legal and regulatory requirements affecting our business

and assets; and

●

management of the relationships with our service providers and customers.

The principal factors

that affect our profitability, cash

flows and shareholders’

return on investment

include:

●

rates and periods of charter hire;

●

levels of vessel operating expenses;

●

depreciation expenses;

●

financing costs;

●

the effects of COVID-19;

●

the war in the Ukraine;

●

inflation, and

75

●

fluctuations in foreign exchange rates.

Results of Operations

Year ended December 31, 2023 compared to the year ended December 31, 2022

Time charter

revenues.

Time

charter revenues

decreased by

$27.9 million,

or 9.6%,

to $262.1

million in

2023, compared to $290.0 million

in 2022. The

decrease in time charter

revenues was due to

decreased

average

time

charter

rates,

which

decreased

our

TCE

rate

to

$16,713

in

2023

from

$22,735

in

2022,

representing a 26%

decrease. This decrease

was partly offset

by increased operating

days during 2023,

as

compared

to

last

year.

Operating

days

in

2023

were

14,824

compared

to

12,306

in

2022,

mainly

resulting from the acquisition of eight Ultramax

vessels in the fourth quarter of

2022 and one more in first

quarter of 2023.

Voyage

expenses.

Voyage

expenses

increased

by

$6.7

million,

or

97%,

to

$13.6

million

in

2023

as

compared to $6.9 in 2022.

This increase was mainly due to

the decreased gain on bunkers amounting to

$0.5 million

in 2023

compared to

$8.1 million

in 2022.

The gain

on bunkers

was mainly

due to

the difference

in the

price of

bunkers paid

by the

Company to

the charterers

on the

redelivery of

the vessels

from the

charterers under the previous

charter party agreement and the

price of bunkers paid

by charterers to the

Company on the

delivery of the

same vessels to

their charterers under

new charter party

agreements. This

decrease was partially counterbalanced due to decreased commissions, which is the main part of voyage

expenses, and which in 2023 decreased to $13.3 million compared

to $14.4 million in 2022.

Vessel operating expenses.

Vessel operating expenses

increased by

$13.5 million,

or 19%,

to $85.5

million

in

2023

compared

to

$72.0

million

in

2022.

The

increase

in

operating

expenses

is

attributable

to

the

increase in

ownership days in

2023, as

a result

of the

acquisition of

eight Ultramax

vessels in

the fourth

quarter of 2022

and one more

in first quarter

of 2023.

Operating expenses

also increased due

to increased

crew

costs, insurances,

spares

and

other consumables.

Total

daily operating

expenses

were $5,704

in

2023 compared to $5,574 in 2022.

Depreciation

and

amortization

of

deferred

charges. Depreciation

and

amortization

of

deferred

charges

increased

by $6.5 million,

or 15%,

to $49.8

million

in 2023,

compared

to $43.3

million

in 2022.

This increase

was due

to the

acquisition of

nine vessels,

as noted

above. This

increase was

partially offset

due to

the

fact that,

effective July 1,

2023, the

Company changed

its estimated

scrap rate

of its

vessels from

$250

per lightweight ton to $400 and the sale of vessel

Boston

in the fourth quarter of 2023. A further decrease

incurred due to decreased amortization of deferred cost as a result of the drydock cost incurred for seven

vessels having drydock surveys in 2023 and twelve in 2022.

General and

administrative expenses

. General and admini

strati

ve expenses

increased by

$3.6 million,

or

12%,

to

$33.0

million

in

2023

compared

to

$29.4

million

in

2022.

The

increase

was

mainly

due

to

the

increased payroll

costs and

travelling expenses.

A further

increase by

$0.6 million

was attributed

to donations.

Management fees to related party.

Management fees to a related party increased

by $0.8 million, or 160%

to $1.3 million in 2023 compared

to $0.5 million in 2022. The increase

was attributable to increased average

number of vessels managed

by DWM in 2023 compared to 2022, due to the acquisition of three Ultramax

vessels

in

the

fourth

quarter

of

2022

and

one

more

in

first

quarter

of

2023,

whose management

was

assigned to DWM.

Gain

on

sale

of

vessels.

Gain

on

sale

of

vessels

increased

by

$2.4

million,

or

83%,

to

$5.3

million

which

resulted

from

the

sale

of

vessels

Aliki,

Melia

and

Boston

in

2023

compared

to

$2.9 million

in

2022

which

resulted from the sale of

Baltimore

in 2022.

76

Insurance recoveries

. Insurance recoveries amounted to null balance in 2023,

compared to $1.8

million in

2022

which

consisted

of amounts

received from

our insurers

for claims

covered under

the insurance

policies

during 2022.

Interest expense

and finance

costs.

Interest expense

and finance

costs increased

by $21.9

or 80% to

$49.3

million

in 2023

compared

to $27.4

million

in 2022.

The increase

was primarily

attributable to

increased

average outstanding

balance of

debt and

finance liabilities

in 2023,

resulting from

the refinances

performed.

A

further

increase

was

also

derived

from

increased

average

interest

rates

resulting

from

our

loan

agreements, having

a variable

interest rate.

In 2023,

the weighted

average interest

rate of

our secured

loan

agreements was 7.3% compared to 3.8% in 2022.

Interest and other income

. Interest and other income increased by $5.5 million, or 204%, to $8.2 million

in

2023 compared

to $2.7

million in

2022. The

increase is

mainly attributable

to increased

deposit rates

in

2023 compared to 2022.

Loss on extinguishment

of debt.

In 2023, loss on

extinguishment of debt increased

by $0.3, or 75%

to $0.7

million and consisted of the prepayment in full of six loan agreements refinanced by other banks. In 2022,

loss on extinguishment

of debt amounted

to $0.4 million

and consisted of

financing costs written

off as a

result of the early prepayment of

the outstanding balances of loans attributed

to one vessel sold and three

vessels refinanced in sale and leaseback transactions in 2022.

Loss on

derivatives

. Loss on

derivates

amounted

to $0.4 million

in 2023

and represents the

fair value of

an interest

rate swap

dated July

6, 2023

in which

the Company

entered into

with DNB.

The notional

amount

of the agreement is $30 million and the Company pays a fixed rate of 4.268% and receives floating under

term SOFR.

Gain on

related party

Investments.

Gain on

related party

Investments amounted

to $1.5

million in

2023,

compared to $0.6 million

in 2022. On October 17,

2023, the Company realized

a gain of $1.7 million

which

derived from the

conversion of 9,793

of the

10,000 Series C

Preferred shares of

OceanPal to 3,649,474

common shares of OceanPal, having a fair

value of $9.2 million, based on the closing

price of OceanPal’s

common

shares

on

the

date

of

conversion.

This

gain

was

the

difference

between

the

book

value

of

OceanPal’s Series

C Preferred

shares and

the fair

value of

the converted

common shares

and was

partially

offset by an unrealized

loss of $1.0

million, resulting from

the measurement

of OceanPal’s common

shares

at fair value on

December 31, 2023,

based on the

closing price of the

shares on that

date. Additionally, the

Company distributed to

its shareholders as

a noncash dividend,

its 13,157 Series

D Preferred Shares

of

OceanPal,

which

resulted

in

gain

of

$0.8

million.

The

gain

of

$0.6

million

in

2022

represents

the

gain

recognized upon the

distribution of 25,000

Convertible Series D

Preferred Shares of

OceanPal Inc.

as a

noncash dividend to

the Company's shareholders,

being the difference

between the carrying

value and the

fair value of the Series D Preferred Shares on the date of the dividend

declaration.

Gain on deconsolidation of

subsidiary.

Gain on deconsolidation of

subsidiary amounted to

$0.8 million in

2023 and represents the gain from the Company’s 25% interest in Bergen Ultra measured at fair

value on

the date of its deconsolidation from the Company’s financial statements.

Unrealized gain on equity

securities.

Unrealized gain on equity

securities amounted to $2.8

million in 2023

and resulted from the measurement of equity securities,

having a book value of $17.9 million, at fair value

of $20.7 million on December 31, 2023, determined through Level

1 of the fair value hierarchy.

Unrealized gain on

warrants.

Unrealized

gain on warrants

amounted $1.6 million

in 2023, which

resulted

from the fair value adjustment

as of December 31, 2023

of the value of the

22,613,070 warrants issued on

December 14, 2023.

77

Gain/(loss) from equity method

investments.

In 2023, loss

from equity method

investments,

amounted to

$0.3 million,

compared to

a gain

of $0.9

million in

2022

The loss

in 2023

is attributed

to a

loss of

$0.7

million from

our 45.45%

interest in

Windward, which

was partly

offset by

a gain

of $0.2

million from

our

50% interest in DWM,

and a gain of

$0.2 million from

our 25% interest

in Bergen. The

gain in the prior

year

derived from our 50% interest in DWM.

Year ended December 31, 2022 compared to the year ended December 31, 2021

For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021,

please refer to “Item 5. Operating and Financial

Review and Prospects” in our Annual Report

on Form 20-

F,

for the year ended December 31, 2022 filed with the SEC on March 27,

2023.

B.

Liquidity and Capital Resources

We

finance

our

capital

requirements

with

cash

flow

from

operations,

equity

contributions

from

shareholders, long-term bank

debt, finance liabilities and

senior unsecured bonds.

Our main uses of

funds

have been capital expenditures for the acquisition and construction of new vessels, expenditures

incurred

in

connection

with

ensuring

that

our

vessels

comply

with

international

and

regulatory

standards,

repayments of bank loans, repurchase of our common stock and payment

of dividends.

As

of

December

31,

2023

and

2022,

working

capital,

which

is

current

assets

minus

current

liabilities,

including the current

portion of long-term

debt and finance

liabilities, amounted to

$97.1 million and

$9.0

million, respectively. The increase in working capital

is mainly due to increased

cash and cash equivalents

and our investment in equity securities amounting to $20.7 million,

which did not exist in the prior year.

In

addition, the

Company’s current

portion of

long-term debt

decreased compared

to last

year as

in 2022,

current

portion of

long-term debt

included a

balloon of

$43.8 million

under

one

of

our

loan

agreements

which was refinanced in 2023.

Cash and

cash equivalents,

including restricted

cash, was

$121.6 million

as of

December 31,

2023 and

$97.4

million

as

of

December

31,

2022.

Restricted

cash

mainly

consists

of

the

minimum

liquidity

requirements under

our loan

facilities. As

of December

31, 2023

and 2022,

restricted cash

amounted to

$20.0 million and $21.0 million, respectively. We consider highly liquid investments such

as time deposits,

certificates of deposit

and their equivalents

with an original

maturity of up

to about three

months to be

cash

equivalents. Time deposits

with maturity above

three months are

removed from cash

and cash equivalents

and are separately presented

as time deposits. As

of December 31, 2023,

the time deposits above

three

months amounted to

$40.0 million,

compared to $46.5

million as

of December 31,

2022. Cash and

cash

equivalents are primarily held in U.S. dollars.

Net Cash Provided by Operating Activities

Net cash provided by operating

activities decreased by $88.5 million,

or 56%.

In 2023, net cash

provided

by

operating

activities

was

$70.4 million

compared

to

net

cash

provided

by

operating

activities

of

$158.9 million in

2022. This

decrease in

cash from

operating activities

was mainly

attributable to

decreased

revenues

as

a

result

of

decreased

average

time

charter

rates

compared

to

2022.

Cash

provided

by

operating

activities

was

also

affected

by

our

investment

in

equity

securities

acquired

in

2023

for

$17.9

million. This decrease was

partly offset by decreased

dry-docking costs incurred

for seven vessels in

2023

compared to twelve vessels in 2022.

Net Cash Used in Investing Activities

Net cash

provided by investing

activities was $24.9

million for

2023, which consists

of $29.7 million

paid

for vessel acquisitions and improvements due to new regulations; $36.6 million of proceeds from the

sale

of three

vessels in

2023; $10.5

million paid to

acquire investments in

Windward and

Cohen; $1.0 million

78

cash divested from deconsolidation

of Bergen Ultra;

decreased investment by $6.5

million in time deposits

with

maturity

above

three months;$25.2

million

proceeds

from

convertible

loan

with

limited

partnership;

$0.2 million paid to acquire other assets; and $2.0 million relating

to the acquisition of equipment.

Net cash used in investing activities was $273.1 million for 2022, which consists of $230.3 million paid for

vessel acquisitions

and improvements

due to

new regulations;

$4.4 million

of proceeds

from the

sale of

one vessel in 2022; $46.5 million investment in

time deposits with maturity above three months; and $0.7

million relating to the acquisition of equipment.

Net Cash Provided by Financing Activities

Net cash used in

financing activities was $71.1 million for

2023, which consists of $57.7

million proceeds

from issuance of long term debt and finance liabilities; $79.8 million of indebtedness and finance liabilities

that we repaid; $5.8 million and $41.4 million of

cash dividends paid on our preferred and common stock,

respectively; and $1.8 million of finance costs paid in relation

to new loan agreements.

Net

cash

provided

by

financing

activities

was

$84.9

million

for

2022,

which

consists

of

$275.1

million

proceeds from

issuance of

long term

debt and

finance liabilities;

$102.8 million

of indebtedness

and finance

liabilities that

we repaid;

$5.8 million

and $79.8

million of

cash dividends

paid on

our preferred

and common

stock, respectively; $3.8

million paid for

repurchase of common

stock; $5.3 million

proceeds from issuance

of common

stock; and

$3.3 million

of finance

costs paid

in relation

to new

loan agreements

and finance

liabilities.

For a detailed

discussion of

cash flows

for the

year ended

December 31,

2022

compared to

the year

ended

December 31, 2021

please see “Item 5. Operating and Financial Review and Prospects - B. Liquidity and

Capital Resources”

included in

our

2022 Annual

Report filed

on Form

20-F with

the SEC

on

March 27,

2023.

Capital Expenditures

We make capital expenditures in connection with vessel acquisitions and constructions, which we finance

with

cash

from

operations,

debt

under

loan

facilities

at

terms

acceptable

to

us,

sale

and

leaseback

agreements and with funds from equity issuances.

As of

the date

of this

annual report,

we have

entered into

two agreements

for the

construction of

two 81,200

dwt methanol

dual fuel

new-building Kamsarmax dry

bulk vessels, for

$46 million each.

The vessels

are

expected to be delivered

to the Company by

the second half

of 2027 and

the first half of

2028 respectively.

On February 15, 2024,

we paid an aggregate

amount of $16.1

million, representing 17.5%

of the purchase

price of

both vessels.

Additionally,

we have

committed to

contribute Euro

50 million

to Windward

for the

construction of four CSOVs, with deliveries scheduled to

occur between the third quarter of 2025

and the

fourth quarter

of 2026.

As of

the date

of this

report, we

have paid

an aggregate

of Euro

24.3 million,

or

$26.1 million.

We also

expect to

incur capital

expenditures

when our

vessels undergo

surveys. This

process

of recertification may

require us

to reposition these

vessels from a

discharging port to

shipyard facilities,

which will reduce our operating days during the period. We may also incur capital expenditures for vessel

improvements to meet new regulations. In the next twelve

months, we will require capital to fund ongoing

operations, debt

service, the

payment of

our preferred

dividends and

the payment

of our

bareboat charters.

As of the date of this annual report,

we have contracted revenues covering around 71% of our ownership

days in 2024, in time charter agreements

having an average time charter

rate in excess of our break-even

rate as of

December 31, 2023,

and we have

also fixed around

12% of our

ownerships days in

2025. We

believe that contracted and

anticipated revenues will

result in internally generated

cash flows and together

with available cash and

cash equivalents,

which as of December

31, 2023 amounted to

$101.6 million and

having additional investments

in time

deposits of $40.0

million which mature

in 2024, will

be sufficient to

79

fund

such

capital

requirements.

Should

time

charter

rates

remain

at

current

levels

as

our

time

charter

agreements are due for renewal

during the year, we believe that we will be able to have

sufficient funds to

cover our

capital expenditures

in the

long-term. We

may also

incur additional

debt to

finance part

of the

construction cost of our methanol vessels on order.

Long-term Debt and Finance Liabilities

As of

December 31,

2023, we

had $517.0

million of

long term

debt outstanding

under our

facilities and

Bond, under the agreements described below.

Secured Term Loans

On January 4,

2017, we

drew down

$57.24 million,

under a

secured loan

agreement with

the Export-Import

Bank

of

China,

dated

January

7,

2016,

to

finance

part

of

the

construction

cost

of

San

Francisco

and

Newport News

, both

delivered on January

4, 2017. The

loan is payable

in equal quarterly

instalments of

about $1.0 million each,

the last of

which is payable by

January 4, 2032. On

July 19, 2023, we

amended

the terms of

the loan

to replace

LIBOR with

term SOFR

and the

margin was

increased from

2.3% to

2.45%.

On September 30, 2022, we entered into a $200 million loan agreement to finance

the acquisition price of

9 Ultramax vessels.

The Company drew

down $197.2 million under

the loan, in

tranches for each

vessel

on their

delivery to

the Company

but prepaid

$21.9 million

in December

2022 due

to a

vessel sale

and

leaseback transaction.

The loan

is repayable

in equal

quarterly instalments

of an

aggregate amount

of $3.7

million, and a balloon of $100.9

million payable together with the last

instalment on October 11, 2027. The

loan bears interest at term SOFR plus a margin of 2.25%.

On

April

12,

2023,

we

entered

into

a

$100

million

term

loan

facility

with

Danish

Ship

Finance

A/S

to

refinance an

aggregate of

$75.2 million

outstanding balance

under existing

loans with

BNP Paribas

and

working

capital.

The

loan is

repayable

in

twenty equal

consecutive

quarterly instalments

of

$3.3 million

each and

a balloon

of $34

million payable together

with the

last instalment

on April

19, 2028,

and bears

interest at term SOFR plus a margin of 2.2%.

On

June

20, 2023,

the

Company

entered into

a $22.5

million loan

agreement with

Nordea to

refinance

$20.9

million

outstanding

balance

of

an

existing

loan.

The

new

loan

is

repayable

in

equal

quarterly

instalments of

about $1.1

million and

bears interest

at term

SOFR plus

a margin

of 2.25%.

The loan

matures

on June 27, 2028.

On June

26, 2023,

we entered

into a

$100 million

loan agreement

with DNB

Bank ASA,

or DNB,

to refinance

an aggregate

of $68.7

million outstanding

balance under

existing loans

with ABN

AMRO Bank

N.V,

and

for

working

capital

purposes.

The

loan

is

repayable

in

equal

quarterly

instalments

of

$3.8

million

until

December

27,

2029,

and

bears

term

SOFR

plus

a

margin

of

2.2%,

subject

to

sustainability

margin

adjustment. Additionally,

the loan

is subject to

a margin

reset, according to

which the

borrowers and the

lenders will enter

into discussions to

agree on a

new margin. Unless

the parties agree

on a new

margin,

the loan will be mandatorily

repayable on June 27, 2027.

As part of the loan

agreement, on July 6, 2023,

we

entered

into

an

interest

rate

swap

with

DNB

for

a

notional

amount

of

$30

million

and

quarterly

amortization of

$1.2 million.

Under the

interest rate

swap, we

pay a

fixed rate

of 4.268%

and receive

floating

under term

SOFR. The swap

has a

termination date

on December 27,

2029, and

a mandatory break

on

June 27, 2027, which is the margin reset date of

the loan, according to which the swap will be terminated

if the loan is prepaid. As of December 31, 2023, the

interest rate swap was a liability having a fair value

of

$0.4 million.

Under

the

secured

term

loans

outstanding

as

of

December

31,

2023,

33

vessels

of

our

fleet

were

mortgaged with

first preferred

or priority

ship mortgages.

Additional securities

required by

the banks

include

first priority assignment of all earnings, insurances,

first assignment of time charter contracts with

duration

80

that

exceeds

a

certain

period,

pledge

over

the

shares

of

the

borrowers,

manager’s

undertaking

and

subordination and requisition compensation and either a corporate guarantee by Diana Shipping Inc. (the

“Guarantor”) or a

guarantee by

the ship owning

companies (where applicable),

financial covenants,

as well

as operating

account assignments.

The lenders

may

also require

additional security

in the

future in

the

event

the

borrowers

breach

certain

covenants

under

the

loan

agreements.

The

secured

term

loans

generally

include

restrictions

as

to

changes

in

management

and

ownership

of

the

vessels,

additional

indebtedness, as

well as

minimum requirements

regarding hull

cover ratio

and minimum

liquidity per

vessel

owned

by

the

borrowers,

or

the

Guarantor,

maintained

in

the

bank

accounts

of

the

borrowers,

or

the

Guarantor.

Furthermore, the secured

term loans contain

cross default provisions and

additionally we are

not permitted to pay any dividends following the occurrence of an

event of default.

As of December 31, 2022 and

2023, and the date of this

annual report, we were in compliance with

all of

our loan covenants.

Senior Unsecured Bond due 2026

On June 22, 2021,

the Company issued a

$125 million senior

unsecured bond maturing in

June 2026. The

bond ranks ahead of subordinated capital and ranks the

same with all other senior unsecured obligations

of

the

Company

other

than

obligations

which

are

mandatorily

preferred

by

law.

Entities

affiliated

with

executive officers and

directors of the

Company purchased an

aggregate of $21

million principal amount

of

the

bond. The

bond bears

interest at

a US

Dollar fixed-rate

coupon of

8.375%

and

is payable

semi-

annually in

arrears in

June and

December of

each year.

The bond

is callable

in whole

or in

part in

June

2024 at a price

equal to 103.35%

of nominal value;

between June 2025

to December 2025

at a price

equal

to 101.675%

of nominal

value and

after December

2025 at

a price

equal to

100% of

nominal value.

On

June

29,

2023,

we

repurchased

$5.9

million

nominal

value

of

the

bond

and

recognized

a

loss

of

$0.2

million. The bond includes financial and other covenants and is trading at

Oslo Stock Exchange under the

ticker symbol “DIASH02”.

Finance Liabilities

On March 29, 2022, we entered into a $50 million sale and leaseback agreement with an unaffiliated third

party,

for a

period of ten

years, under which

we pay

hire, monthly in

advance and we

have the option

to

repurchase the vessel after the

end of the third year of

the charter period, or each

year thereafter, until the

termination

of the

lease, at

specific prices,

subject to

irrevocable and

written notice

to

the

owner.

If not

repurchased earlier, we have the obligation to repurchase the vessel

for $16.4 million, on the expiration of

the lease on the tenth year.

On August 17, 2022,

we entered into two

sale and leaseback agreements with two

unaffiliated Japanese

third parties, for

an aggregate amount

of $66.4 million,

for a period

of eight years,

each,

under which we

pay hire, monthly in advance,

and we have the option to purchase the vessels at the end of the third year

of

each

vessel's

bareboat

charter

period,

or

each

year

thereafter,

until

the

termination

of

the

lease,

at

specific prices, subject to irrevocable

and written notice to the

owner. If

not repurchased earlier,

we have

the

obligation to

repurchase the

vessels for

$13.0

million, each,

on the

expiration of

each

lease on

the

eighth year.

On

December

6,

2022,

we

entered

into

a

sale

and

leaseback

agreement

for

$29.9

million

with

an

unaffiliated third party, for

a period of

ten years,

under which

we pay

hire, monthly

in advance,

and we

have

the

option

to

repurchase

the

vessel

after

the

end

of

the

third

year

of

the

charter

period,

or

each

year

thereafter, until the

termination of the lease, at specific

prices, subject to irrevocable and written

notice to

the owner.

If not repurchased earlier,

we have the obligation to repurchase the

vessel for $8.1 million, on

the expiration of the lease on the tenth year.

81

Commitments and Contingencies

On March 30,

2023, we entered

into a corporate

guarantee with Nordea

under which we

guaranteed the

performance by

Bergen Ultra,

an

equity method

investee

owning one

dry

bulk

carrier,

of

its

obligations

under a loan

agreement with

the bank maturing

on March 30,

2028. The Company

considers the likelihood

of

having

to

make

any

payments under

the

guarantee to

be

remote,

as the

loan

is

also

secured by

an

account pledge by Bergen,

first preferred mortgage on

the vessel, a first priority

general assignment of the

earnings, insurances

and requisition

compensation of

the vessel,

a charter

party assignment,

a partnership

interests

security

deed,

and

a

manager’s

undertaking.

As

of

December

31,

2023,

the

loan

had

an

outstanding balance of $14.8 million.

C.

Research and development, patents and licenses

We

incur from

time to

time expenditures

relating to

inspections for

acquiring new

vessels that

meet our

standards. Such expenditures are insignificant and they are expensed

as they incur.

D.

Trend information

Demand for dry

bulk vessel services is

influenced by global financial conditions.

Global financial markets

and economic

conditions have

been, and

continue

to be,

volatile. Our

results of

operations depend

primarily

on charter hire

rates that we

are able to

realize, and the

demand for dry

bulk vessel services.

The Baltic

Dry Index, or the BDI, has long been viewed as the main benchmark to monitor the movements of the dry

bulk vessel

charter market

and the

performance of the

entire dry

bulk shipping market.

In 2023,

the BDI

ranged from a low

of 530 to a

high of 3,346 and

closed at 1,714 on

April 2, 2024. Although

there can be no

assurance that the dry bulk charter market will not

decline further,

as of the date of this annual report,

we

have fixed

about 62%

of our

fleet ownership

days in

2024 at

rates above

our break-even

rate. Nevertheless,

our

revenues

and

results

of

operations

in

2024 will

be

subject

to

demand

for

our

services,

the

level

of

inflation, market disruptions and interest rates. Demand for our dry bulk oceangoing vessels is dependent

upon economic growth in the world’s economies, seasonal and regional

changes in demand and changes

to the

capacity of

the global

dry bulk

fleet and

the sources

and supply

for dry

bulk cargo

transported by

sea.

Continued

adverse

economic,

political

or

social

conditions

or

other

developments

could

further

negatively impact charter rates

and therefore have a

material adverse effect

on our business

and results

of operations.

E.

Critical Accounting Estimates

The

discussion

and

analysis

of

our

financial

condition

and

results

of

operations

are

based

upon

our

consolidated

financial

statements,

which

have

been

prepared

in

accordance

with

U.S.

GAAP.

The

preparation

of

those

financial

statements

requires

us

to

make

estimates

and

judgments

that

affect

the

reported

amounts of

assets

and liabilities,

revenues and

expenses and

related disclosure

of

contingent

assets and liabilities at the date of our financial statements. Actual

results may differ from these estimates

under different assumptions and conditions.

Impairment of Vessels

Long-lived assets

are

reviewed for

impairment whenever

events

or

changes in

circumstances (such

as

market conditions,

obsolesce or

damage to the

asset, potential sales

and other

business plans)

indicate

that the

carrying amount

of an asset

may not be

recoverable. When

the estimate

of undiscounted

projected

net operating cash

flows, excluding interest

charges, expected

to be generated

by the use

of an asset

over

its remaining

useful life

and its

eventual disposition

is less

than its

carrying amount,

the Company

evaluates

the asset for impairment loss. Measurement of the impairment

loss is based on the fair value of the asset,

determined mainly by third party valuations.

82

For

vessels, we

calculate undiscounted

projected net

operating cash

flows by

considering the

historical

and

estimated

vessels’ performance

and

utilization

with

the

significant

assumption

being

future

charter

rates for

the unfixed

days, using

the most

recent 10-year

average of

historical 1

year time

charter rates

available for

each type

of

vessel over

the

remaining estimated

life

of

each vessel,

net

of

commissions.

Historical

ten-year

blended

average

one-year

time

charter

rates

are

in

line

with

the

Company’s

overall

chartering strategy,

they reflect the

full operating history

of vessels of

the same type

and particulars with

the Company’s

operating fleet

and they

cover at

least a

full business

cycle, where

applicable. When the

10-year average of historical 1 year time charter rates is

not available for a type of vessels, the Company

uses

the

average

of

historical

1

year

time

charter

rates

of

the

available

period.

The

historical

ten-year

average rate

used in

2023 to

calculate undiscounted

projected net

operating cash

flow was

$12,775 for

Panamax,

Kamsarmax

and

Post-Panamax

vessels,

$16,608

for

Ultramax

vessels

and

$16,115

for

our

Capesize

and

Newcastlmax

vessels,

compared

to

$12,431,

16,876

and

$16,128,

respectively

in

2022.

Other assumptions

used in

developing estimates

of future

undiscounted cash

flow are

the charter

rates

calculated for

the fixed

days using

the fixed

charter rate

of each

vessel from

existing time

charters, the

expected outflows

for scheduled

vessels’ maintenance;

vessel operating

expenses; fleet

utilization, and

the vessels’ residual

value if sold

for scrap. Assumptions

are in line

with our

historical performance

and our

expectations for future

fleet utilization under

our current fleet

deployment strategy. The difference between

the carrying amount of the vessel plus unamortized deferred costs

and their fair value is recognized in the

Company's accounts as impairment loss. Although no impairment loss was

identified or recorded in 2023,

according

to

our

assessment,

the

carrying

value

plus

unamortized

deferred

cost

of

vessels

for

which

impairment indicators existed as of December 31, 2023, was $378.2

million.

Historically,

the

market

values

of

vessels

have

experienced

volatility,

which

from

time

to

time

may

be

substantial.

As a result, the

charter-free market value of certain

of our vessels may

have declined below

those

vessels’

carrying

value

plus

unamortized

deferred

cost,

even

though

we

would

not

impair

those

vessels’

carrying

value

under

our

accounting

impairment

policy.

Based

on:

(i)

the

carrying

value

plus

unamortized deferred

cost

of

each of

our vessels

as of

December 31,

2023 and

2022 and

(ii)

what we

believe the charter-free market value of each of

our vessels was as of December 31,

2023 and 2022, the

aggregate

carrying

value

of

12

and

17

of

the

vessels

in

our

fleet

as

of

December

31,

2023

and

2022,

respectively,

exceeded their

aggregate charter-free

market value

by

approximately $49

million and

$83

million, respectively,

as noted

in the

table below.

This aggregate

difference represents

the

approximate

analysis of the amount by which we believe we would have to reduce our net income or increase our loss

if we sold

all of such

vessels at

December 31,

2023 and

2022, on a

charter-free basis,

on industry

standard

terms, in

cash transactions, and

to a

willing buyer where

we were not

under any compulsion

to sell,

and

where the buyer was

not under any compulsion

to buy. For purposes of this

calculation, we have assumed

that these 12 and 17 vessels

would be sold at a price

that reflects our estimate of

their charter-free market

values as of December 31, 2023 and 2022, respectively.

83

Vessel

Dwt

Year Built

Carrying Value plus unamortized

deferred cost

(in millions of US dollars)

2023

2022

1

Alcmene

93,193

2010

9.6

10.1

2

Aliki

180,235

2005

-

13.0

3

Amphitrite

98,697

2012

14.0

14.7

4

Artemis

76,942

2006

11.0

11.9

5

Astarte

81,513

2013

18.0

19.1

6

Atalandi

77,529

2014

15.7

16.4

7

Boston

177,828

2007

-

18.2

*

8

Crystalia

77,525

2014

15.4

16.1

9

Electra

87,150

2013

14.1

14.9

10

G.P.

Zafirakis

179,492

2014

22.1

23.0

11

Houston

177,729

2009

18.4

19.4

12

Ismene

77,901

2013

11.7

10.6

13

Leto

81,297

2010

12.9

13.7

14

Los Angeles

206,104

2012

23.5

24.8

15

Maera

75,403

2013

11.7

12.3

16

Maia

82,193

2009

12.4

13.4

17

Medusa

82,194

2010

12.4

13.1

18

Melia

76,225

2005

-

10.8

19

Myrsini

82,117

2010

14.2

15.1

20

Myrto

82,131

2013

17.8

18.9

21

New Orleans

180,960

2015

31.6

33.1

*

22

New York

177,773

2010

14.0

14.5

23

Newport News

208,021

2017

40.5

42.4

*

24

P.S.

Palios

179,134

2013

35.3

*

37.4

*

25

Phaidra

87,146

2013

13.5

13.0

26

Philadelphia

206,040

2012

24.2

25.5

27

Polymnia

98,704

2012

14.2

15.0

28

San Francisco

208,006

2017

40.6

42.5

*

29

Santa Barbara

179,426

2015

34.8

*

36.4

*

30

Seattle

179,362

2011

21.3

22.6

31

Selina

75,700

2010

9.1

9.3

32

Semirio

174,261

2007

16.1

17.6

*

33

LEONIDAS P.C.

82,165

2011

20.8

*

21.7

*

34

Florida

182,063

2022

57.0

59.1

*

35

DSI Pyxis

60,362

2018

35.6

*

36.1

*

36

DSI Pollux

60,446

2015

29.9

*

31.4

*

37

DSI Phoenix

60,456

2017

32.7

*

34.3

*

38

DSI Polaris

60,404

2018

36.2

*

36.9

*

39

DSI Andromeda

60,309

2016

31.8

*

33.3

*

40

DSI Aquila

60,309

2015

29.9

*

31.5

*

41

DSI Pegasus

60,508

2015

28.8

*

30.3

*

42

DSI Altair

60,309

2016

31.3

*

32.5

*

43

DSI Aquarius

60,309

2016

31.0

*

-

Total

4,915,571

915

966

_______________________________

*

Indicates dry bulk

vessels for which

we believe, as

of December 31,

2023 and 2022,

the charter-free

market value

was lower than the vessel’s

carrying value plus unamortized deferred

cost. We believe that the

aggregate carrying

value

plus

unamortized

deferred

cost

of

these

vessels

exceeded

their

aggregate

charter-free

market

value

by

approximately $49 million and $83 million, respectively.

84

Our

estimates

of

charter-free

market

value

assume

that

our

vessels

were

all

in

good

and

seaworthy

condition without need for repair and if inspected would be certified in class without notations of any kind.

Our estimates are based on information available from various industry

sources, including:

●

reports

by industry

analysts and

data

providers that

focus

on our

industry and

related dynamics

affecting vessel values;

●

news and industry reports of similar vessel sales;

●

offers that we may have received from potential purchasers of our vessels; and

●

vessel

sale

prices

and

values

of

which

we

are

aware

through

both

formal

and

informal

communications

with

shipowners,

shipbrokers,

industry

analysts

and

various

other

shipping

industry participants and observers.

As

we

obtain information

from

various industry

and

other

sources, our

estimates

of charter-free

market

value are

inherently uncertain.

In addition,

vessel values

are highly

volatile; as

such, our

estimates may

not be

indicative of the

current or

future charter-free market

value of

our vessels or

prices that

we could

achieve if we

were to sell them.

We also refer

you to the

risk factor in “Item

3. Key Information—D. Risk

Factors” entitled

“

The market

values of

our vessels

could decline,

which could

limit the

amount of

funds

that we

can borrow

and could

trigger breaches

of certain

financial covenants

contained in

our loan

facilities,

which could adversely

affect our operating results,

and we may

incur a loss

if we sell

vessels following a

decline

in

their

market

values

”

and

the

discussion

under

the

heading

"Item

4.

Information

on

the

Company—B. Business Overview–Vessel Prices.”

Our impairment test

exercise is sensitive

to variances in

the time charter

rates. Our current

analysis, which

also

involved

a

sensitivity

analysis

by

assigning

possible

alternative

values

to

this

significant

input,

indicated that

time charter

rates would

need to

be reduced

by

11

% to

result in

impairment of

individual

long-lived assets

with indication

of impairment.

However, there can

be no

assurance as

to how

long charter

rates and vessel values will remain at their current levels.

If charter rates decrease and remain depressed

for

some

time,

it

could

adversely

affect

our

revenue

and

profitability

and

future

assessments

of

vessel

impairment.

A comparison of the average estimated daily time charter equivalent rate used in our impairment analysis

with the average “break-even rate” for each major class of vessels is presented

below:

Average estimated daily time

charter equivalent rate used

Average break-even

rate

Ultramax

$16,608

$12,195

Panamax/Kamsarmax/Post-Panamax

$12,775

$9,314

Capesize/Newcastlemax

$16,115

$11,721

85

It should be

noted that as

of December 31,

2023, twelve of

our vessels, having

indication of impairment,

would be affected by a

reduction in time charter

rates below the average break-even

rate. Additionally, the

use of the 1-year,

3-year and 5-year average blended rates

would not have any effect

on the Company’s

impairment analysis and as such on the Company’s results of operations:

Vessel type

1-year

(period)

Impairment

charge

(in USD

million)

3-year

(period)

Impairment

charge

(in USD

million)

5-year

(period)

Impairment

charge

(in USD

million)

Ultramax

$15,131

-

$20,740

-

$17,191

-

Panamax/Kamsarmax/Post-

Panamax

$13,536

-

$18,618

-

$15,652

-

Capesize/Newcastlemax

$15,623

-

$19,900

-

$17,974

-

Item 6.

Directors, Senior Management and Employees

A.

Directors and Senior Management

Set forth

below are

the names,

ages and

positions of

our directors

and executive

officers. Our

Board of

Directors

consists

of

eleven

members

and

is

elected

annually

on

a

staggered basis,

and

each

director

elected holds office for

a three-year term

and until his

or her successor

is elected and

has qualified, except

in the

event of

such director’s

death, resignation,

removal or

the earlier

termination of

his or

her term

of

office. Officers are

appointed from time to time by

our board of directors and

hold office until a

successor

is appointed or their employment is terminated.

Name

Age

Position

Semiramis Paliou

49

Class III Director and Chief Executive Officer

Simeon Palios

82

Class I Director and Chairman

Anastasios Margaronis

68

Class I Director and President

Ioannis Zafirakis

52

Class I Director, Chief Financial Officer, Chief

Strategy Officer, Treasurer and Secretary

Konstantinos Psaltis

85

Class II Director

Kyriacos Riris

74

Class II Director

Apostolos Kontoyannis

75

Class III Director

Konstantinos Fotiadis

73

Class III Director

Eleftherios Papatrifon

54

Class II Director

Simon Frank Peter Morecroft

65

Class II Director

Jane Sih Ho Chao

48

Class I Director

Maria Dede

51

Chief Accounting Officer

Margarita Veniou

45

Chief Corporate Development, Governance &

Communications Officer

Maria Christina Tsemani

45

Chief People Officer

The term of our

Class I directors expires

in 2024, the term

of our Class

II directors expires in

2025, and the

term of our Class III directors expires in 2026.

Mr. Eleftherios Papatrifon served as

Chief Operating Officer

of the Company

until February 2023,

when he

was appointed as

Class II Director

and member of

the Executive Committee

on February

22, 2023

to serve

until the next scheduled election for Class II directors.

86

Ms. Jane Chao

was appointed

as a Class

I Director on

February 22, 2023

to serve until

the next scheduled

election for Class I directors.

The business address of

each officer and

director is the address

of our principal executive

offices, which

are located at Pendelis 16, 175 64 Palaio Faliro, Athens, Greece.

Biographical information with respect to each of our directors and executive

officers is set forth below.

Semiramis

Paliou

has

served

as

a

Director

of

Diana

Shipping

Inc.

since

March

2015,

and

as

the

Company’s

Chief

Executive

Officer,

Chairperson

of

the

Executive

Committee

and

member

of

the

Sustainability

Committee

since

March

2021.

Ms.

Paliou

has

been

the

Chief

Executive

Officer

of

Diana

Shipping Services S.A.

since March 2021. She

also serves as

a Director of

OceanPal Inc. since

April 2021

and as the Chairperson of the Board

of Directors and of the Executive Committee of

OceanPal Inc. since

November 2021. Ms. Paliou is

the Chairperson of the Hellenic Marine

Environment Protection Association

(HELMEPA),

a

position she

has

held

since June

2020,

while she

joined its

board of

directors in

March

2018. As of July 2023, she serves as

Chairperson of INTERMEPA. She

is also a member of the board

of

directors

of

the

UK

P&I

Club

since

November

2020,

member

of

the

Union

of

Greek

Shipowners

since

February 2022 and

member of the

Global Maritime Forum

since April 2022.

She is Vice-Chairperson

of the

Greek committee of Det

Norske Veritas, a member of the

Greek committee of Nippon

Kaiji Kyokai, Bureau

Veritas, American Bureau of Shipping and Hellenic War Risks

Ms. Paliou

has over

20 years

of experience

in shipping

operations, technical

management and

crewing.

She began her

career at Lloyd’s

Register of Shipping

where she worked

as a trainee

ship surveyor from

1996

to

1998.

She

was

then

employed

by

Diana

Shipping

Agencies

S.A.

From

2007

to

2010

she

was

employed as a

Director and President of

Alpha Sigma Shipping Corp.

From February 2010 to

November

2015, she

was the

Head of the

Operations, Technical

and Crew

department of

Diana Shipping Services

S.A. From

November 2015

to October

2016, she

served as

Vice-President of

the same

company.

From

November 2016

to

the

end of

July 2018,

she served

as Managing

Director

and Head

of the

Technical,

Operations, Crew and

Supply department of Unitized

Ocean Transport

Limited. From November 2018

to

February

2020,

she

worked

as

Chief

Operating

Officer

of

Performance

Shipping

Inc.

(ex.

Diana

Containerships Inc.).

From October

2019 until

February 2021,

Ms. Paliou

served as

Deputy Chief

Executive

Officer

of

Diana

Shipping

Inc.

She

also

served

as

member

of

the

Executive

Committee

and

the

Chief

Operating Officer of the Company from August 2018 until February 2021.

Ms. Paliou

obtained her

BSc in

Mechanical Engineering

from Imperial

College, London

and her

MSc

in

Naval

Architecture

from

University

College,

London.

She

completed

courses

in

“Finance

for

Senior

Executives”,

in

“Authentic

Leader

Development”

and

a

certificate

program

on

“Sustainable

Business

Strategy” all at

Harvard Business

School. Ms. Paliou

is also the

daughter of Simeon

Palios, the Company’s

Chairman.

Simeon

P.

Palios

has

served

as

the

Chairman

of

the

Board

of

Directors

of

Diana

Shipping

Inc.

since

February

2005

and

a

Director

of

the

Company

since

March

1999.

He

served

as

the

Company’s

Chief

Executive Officer

from February

2005 until

February 2021.

Mr. Palios also

serves as

the President

of Diana

Shipping Services

S.A. which

was formed

in 1986.

Mr. Palios has

experience in

the shipping

industry since

1969 and expertise in technical and

operational issues. He has served as

an ensign in the Greek Navy for

the

inspection

of

passenger boats

on

behalf of

Ministry

of Merchant

Marine and

is

qualified as

a

naval

architect

and marine

engineer.

Mr.

Palios

was

the

founder

of

Diana

Shipping Agencies

S.A.,

where

he

served as Managing Director until November 2004, having the overall responsibility for its activities. From

January 13,

2010 until

February 28,

2022, Mr. Palios

also served

as the

Chairman of

the Board

of Directors

of Performance Shipping Inc. (ex. Diana Containerships Inc.) and as Chief

Executive Officer until October

2020.

87

Mr.

Palios is

a member

of

various leading

classification societies

worldwide and

he is

a member

of

the

board

of

directors

of

the

United

Kingdom

Freight

Demurrage

and

Defense

Association

Limited.

Since

October 7, 2015, Mr.

Palios has served as

President of the Association “Friends

of Biomedical Research

Foundation,

Academy

of

Athens”.

He

holds

a

bachelor's

degree

in

Marine

Engineering

from

Durham

University.

Anastasios C. Margaronis

has served as President

and a Director of Diana

Shipping Inc. since February

2005.

He

is

also

member

of

the

Executive

Committee

of

the

Company.

Mr.

Margaronis

is

the

Deputy

President

of

Diana

Shipping

Services

S.A.,

where

he

also

serves

as

a

Director

and

Secretary.

Mr.

Margaronis has experience

in the shipping

industry,

including in ship

finance and insurance,

since 1980.

Prior to February 21,

2005, Mr.

Margaronis was employed by Diana

Shipping Agencies S.A. in

1979 and

performed on our behalf

the services he

now performs as President.

He joined Diana Shipping Agencies

S.A. in

1979 and has

been responsible for

overseeing our vessels’

insurance matters, including

hull and

machinery,

protection and indemnity and war

risks insurances. From January

2010 to February 2020,

he

served as Director and President of Performance Shipping

Inc. (ex. Diana Containerships Inc.).

In

addition,

Mr.

Margaronis

is

a

member

of

the

Greek

National

Committee

of

the

American

Bureau

of

Shipping. He

has also

been on

the Members’

Committee of

the Britannia

Steam Ship

Insurance Association

Limited

since

October

2022.

From

October

2005

to

October

2019,

he

was

a

member

of

the

board

of

directors of the United Kingdom Mutual Steam Ship Assurance Association

(Europe) Limited.

He

holds

a

bachelor's

degree

in

Economics

from

the

University

of

Warwick

and

a

master's

of

science

degree in Maritime Law from the Wales Institute of Science and Technology.

Ioannis Zafirakis

has served

as a Director and

Secretary of Diana

Shipping Inc. since February

2005 and

Chief Financial Officer (Interim Chief

Financial Officer until February 2021) and

Treasurer since February

2020

and

he

is

also

the

Chief

Strategy

Officer

of

the

Company.

Mr.

Zafirakis

is

also

member

of

the

Executive Committee

of the

Company.

Mr.

Zafirakis has

held various

executive positions

such as

Chief

Operating

Officer,

Executive

Vice-President

and

Vice-President.

In

addition,

Mr.

Zafirakis

is

the

Chief

Financial Officer of

Diana Shipping Services S.A., where

he also serves as

Director and Treasurer.

Also,

he

has

served

as

a

Director

of

OceanPal

Inc.

since

April

2021.

He

has

also

served

as

the

President,

Secretary and

Interim Chief Financial

Officer of

OceanPal Inc.

from November 2021

to April

2023. He

is

also member of the Executive Committee of OceanPal Inc.

From June 1997 to

February 2005, Mr.

Zafirakis was employed by

Diana Shipping Agencies S.A., where

he held

a number

of positions in

finance and

accounting. From January

2010 to

February 2020,

he also

served as Director and Secretary of Performance Shipping Inc. (ex. Diana Containerships Inc.), where he

held various executive positions such as Chief Operating Officer and Chief Strategy

Officer.

Mr. Zafirakis is

a member

of the

Business Advisory

Committee of

the Shipping

Programs of

ALBA Graduate

Business School at

The American College of

Greece. In 2024,

Mr.

Zafirakis attended and completed

the

Advanced

Management

Programme

at

INSEAD

Business

School

in

Singapore.

Mr.

Zafirakis

has

also

obtained

a

certificate

in

“Blockchain

Economics:

An

Introduction

to

Cryptocurrencies”

from

Panteion

University of

Social and

Political Sciences

in Greece.

He holds

a bachelor's

degree in

Business Studies

from City University Business School in London and a master's degree in International Transport from the

University of Wales in Cardiff.

Eleftherios (Lefteris) A. Papatrifon

has served as a Director and a member of the Executive Committee

of Diana

Shipping Inc.

since February

2023. Prior

to this

appointment, he

served as

Chief Operating

Officer

of the Company from March 2021 to February

2023. Mr. Papatrifon also serves as a Director of OceanPal

Inc.

and

a

member

of

its

Executive

Committee,

positions

he

has

held

since

November

2021.

From

November 2021 to January 2023, he served as Chief Executive

Officer of OceanPal Inc.

88

Prior to joining Diana Shipping Inc., he was Chief Executive Officer, Co-Founder and Director of Quintana

Shipping Ltd,

a provider

of dry

bulk shipping

services, from

2010 until

the company’s

successful sale

of

assets and consequent liquidation in

2017. Previously,

for a period of

approximately six years, he served

as

the

Chief

Financial

Officer

and

Director

of

Excel

Maritime

Carriers Ltd.

Prior

to

that,

Mr. Papatrifon

served for

approximately 15 years

in a number

of corporate

finance and

asset management

positions, both

in the USA and in Greece.

Mr. Papatrifon holds undergraduate (BBA) and

graduate (MBA) degrees

from Baruch College

(CUNY). He

is also a member of the CFA Institute and a CFA charterholder.

Konstantinos Psaltis

has served as a

Director of Diana Shipping

Inc. since March 2005,

the Chairman of

its Nominating

Committee since

May 2015

and a

member of its

Compensation Committee

since May

2017.

Mr.

Psaltis

serves

also

as

President

of

Ormos

Compania

Naviera

S.A.,

a

company

that

specializes

in

operating and managing multipurpose

container vessels, where from

1981 to 2006, he held

the position of

Managing Director. Prior to joining Ormos Compania Naviera S.A.,

Mr. Psaltis simultaneously served as a

technical

manager

in

the

textile

manufacturing

industry

and

as

a

shareholder

of

shipping

companies

managed by M.J. Lemos. From 1961 to 1964, he served as ensign in

the Royal Hellenic Navy.

He holds a

degree in Mechanical Engineering from

Technische

Hochschule Reutlingen & Wuppertal and

a bachelor's degree in Business Administration from Tubingen University in Germany.

Kyriacos Riris

has served

as a

Director of

Diana Shipping

Inc. since

March 2015

and a

member of

its

Nominating Committee since May 2015. From May 2022, he is also the Chairman of the Audit Committee

of the Company.

Commencing in 1998,

Mr. Riris served in a series

of positions in PricewaterhouseCoopers

(PwC), Greece,

including Senior

Partner, Managing

Partner of

the Audit

and the

Advisory/Consulting

Lines of

Service. From

2009 to 2014, Mr.

Riris served as Chairman of the Board of Directors of PricewaterhouseCoopers (PwC),

Greece. Prior to its

merger with PwC, Mr.

Riris was employed at

Grant Thornton, Greece, where

in 1984

he

became

a

Partner.

From

1976

to

1982,

Mr.

Riris

was

employed

at

Arthur

Young,

Greece.

Since

November

2018,

Mr.

Riris

has

served

as

Chairman

of

Titan

Cement

International

S.A.,

a

Belgian

corporation, while he

is currently the

Vice Chairman of

the Board and

the Chairman of

the Audit and

the

Risk Committee of the Group.

Mr.

Riris

holds

a

degree

from

Birmingham

Polytechnic

(presently

Birmingham

City

University)

and

completed his professional qualifications with the Association of Certified Chartered

Accountants (ACCA)

in the UK in 1975, becoming a Fellow of the Association of Certified Accountants

in 1985.

Apostolos Kontoyannis

is a Director, the Chairperson

of the Compensation

Committee and a

member of

the Audit Committee of Diana

Shipping Inc., positions he has

held since March 2005. Since

March 2021,

Mr. Kontoyannis also serves as the Chairperson of the Sustainability Committee of the Company.

Mr.

Kontoyannis has

over

40

years

of

experience

in

shipping

finance

and

currently

serves

as

financial

consultant to various shipping companies. He was employed by Chase Manhattan Bank N.A. in Frankfurt

(Corporate

Bank),

London

(Head

of

Shipping

Finance

South

Western

European

Region)

and

Piraeus

(Manager, Ship Finance Group) from 1975 to 1987.

Mr.

Kontoyannis holds a bachelor's

degree in Finance and

Marketing and a

master's degree in

Business

Administration and Finance from Boston University.

Konstantinos Fotiadis

has served as

a Director of Diana

Shipping Inc. since 2017.

Mr. Fotiadis

served

as an independent

Director and

as the Chairman

of the Audit

Committee of

Performance Shipping

Inc. (ex.

89

Diana Containerships

Inc.) from

the completion

of Performance

Shipping Inc.

(ex. Diana

Containerships

Inc.)’s private offering until

February 2011. From 1990 until 1994,

Mr. Fotiadis served as the

President and

Managing Director

of Reckitt

& Colman

(Greece), part

of the

British multinational

Reckitt &

Colman plc,

manufacturers of household,

cosmetics and health care

products. From 1981

until its acquisition

in 1989

by

Reckitt

&

Colman

plc,

Mr.

Fotiadis

was

a

General

Manager

at

Dr.

Michalis

S.A.,

a

Greek

company

manufacturing and marketing

cosmetics and health

care products. From

1978 until 1981,

Mr. Fotiadis held

positions with Esso Chemicals Ltd. and Avrassoglou S.A. Mr. Fotiadis has also been active as a business

consultant and real estate developer.

Mr.

Fotiadis

holds

a

degree

in

Economics

from

Technische

Universitaet

Berlin

and

in

Business

Administration from Freie Universitaet Berlin.

Simon Morecroft

has served as

a Director of

Diana Shipping Inc.

since May 2022.

He also serves

as a

Director of Enarxis Ltd,

a shipping consultancy

company. Mr. Morecroft spent his career in the shipbroking

industry

as

a

Sale

and

Purchase

broker.

He

joined

Braemar

Shipbrokers

Ltd

(now

Braemar

ACM

Shipbroking) in 1983 becoming

a director in 1986

and remained on the

board until his

retirement in August

2021.

During

this

time

Braemar

grew

from

a

boutique

broking

operation

into

one

of

the

world’s

most

successful fully integrated shipbroking companies with a listing on

the London Stock Exchange.

Mr. Morecroft graduated from Oxford University in 1980 with a Masters in PPE.

Jane Chao

has served

as a

Director of

Diana Shipping

Inc. since

February 2023.

She also

serves as

a

director of

Wah

Kwong Shipping

Holdings Limited,

a position

she has

held since

2008. Ms.

Chao is

the

managing director of Wah Kwong China Investment which includes residential and commercial properties

as well as

hospitality businesses in

Shanghai and Wuxi.

Ms. Chao has

founded her own

art consultancy

company Galerie Huit

and lifestyle gallery

Maison Huit in

2009 and recently,

the non-profit Chao-Lee

Art

Foundation in 2022.

Ms.

Chao

has

also

served

as

a

Council

Member

for

Changing

Young

Lives

Foundation

helping

underprivileged children in Hong Kong and China from 2014 to

2020.

Maria Dede

is the

Chief Accounting

Officer of

Diana Shipping

Inc., a

position she

has held

since September

2005. Since Mach 2020,

she also serves as

the Finance Manager and Chief

Accounting Officer of Diana

Shipping Services

S.A. In

2000, Ms.

Dede joined

the Athens

branch of

Arthur Andersen,

which merged

with Ernst

and Young

(Hellas) in

2002, where

she served

as an

external auditor

of shipping

companies

until 2005. From

1996 to 2000

Ms. Dede was

employed by Venus

Enterprises S.A., a

ship-management

company, where she held a number of positions primarily in accounting and supplies.

Ms. Dede holds a Bachelor’s

degree in Maritime Studies

from the University of Piraeus,

a Master’s degree

in Business

Administration from the

ALBA Graduate Business

School and a

Master’s degree in

Auditing

and Accounting from the Greek Institute of Chartered Accountants.

Margarita

Veniou

has

served

as

the

Chief

Corporate

Development,

Governance

&

Communications

Officer of Diana

Shipping Inc. since July

2022. From September 2004

until June 2022, she

served in the

Corporate

Planning

&

Governance

Department

of

Diana

Shipping

Inc.,

holding

various

positions

as

Associate,

Officer

and

Manager.

Ms.

Veniou

is

also

the

Corporate

Development,

Governance

&

Communications Manager of Diana Shipping Services S.A., a position she has held since 2022, and from

2004 to

2022 she

held various

other positions

at Diana

Shipping Services

S.A. In

addition, since

November

2021, Ms. Veniou has served

as the Chief

Corporate Development &

Governance Officer of

OceanPal Inc.

and she has also served

as the company’s Board Secretary

since April 2023. She is

the General Manager

of Steamship Shipbroking Enterprises Inc., a position she has held

since April 2014.

90

From

January

2010

to

February

2020,

Ms.

Veniou

also

held

the

position

of

Corporate

Planning

&

Governance Officer of Performance Shipping Inc. (ex. Diana Containerships

Inc.).

Ms. Veniou

holds a bachelor's

degree in Maritime

Studies and a

master's degree in Maritime

Economics

&

Policy

from

the

University

of

Piraeus,

Greece.

She

completed

the

Sustainability

Leadership

and

Corporate

Responsibility

course

at

the

London

Business

School

and

has

obtained

the

Certification

in

Shipping Derivatives

from the Athens

University of Economics

and Business.

Ms. Veniou is also

a member

of WISTA Hellas and ISO 14001 certified by Lloyd’s Register.

Maria-Christina

Tsemani

has

served

as

the

Company’s

Chief

People

Officer

since

July

2022.

Ms.

Tsemani

also

serves

as

HR

Manager

of

Diana

Shipping

Services

S.A.,

a

position

she

has

held

since

October 2020.

Ms. Tsemani has over

20 years

of experience

in HR

positions with

multinational companies

and institutional

bodies. Before joining

Diana Shipping, Ms.

Tsemani was People Acquisition and

Development Manager of

Vodafone

Greece. During

her

career

in

Vodafone

from

2008 to

2020, she

held

various

other

positions,

including Senior HR

Business Partner and

Organizational Effectiveness and

Reward Manager. From 2004

to 2008, Ms. Tsemani

worked as a Senior HR

Consultant in PricewaterhouseCoopers (PwC). From 2001

to 2004, she served as Project Manager in the European Commission,

based in Luxembourg.

Ms.

Tsemani

holds

a bachelor’s

degree in

Mathematical Sciences

and

a master’s

of

science

degree in

Applied Statistics from the University of Oxford, UK.

B.

Compensation

Aggregate executive

compensation (including

amounts paid

to Steamship)

for 2023

was $6.6

million. Since

June 1, 2010, Steamship, a related party,

as described in "Item 7. Major Shareholders and

Related Party

Transactions—B. Related

Party Transactions"

has provided

to us

brokerage services.

Under the

Brokerage

Services

Agreements

in

effect

during

2023,

fees

for

2023

amounted

to

$3.9

million

and

we

also

paid

commissions

for

vessel

sales

and

purchases

amounting to

$0.9

million.

We

consider

fees

under

these

agreements to be part of our executive compensation due to

the affiliation with Steamship.

Non-employee directors

receive

annual compensation

in

the

amount

of

$52,000 plus

reimbursement of

out-of-pocket expenses. In addition, each director serving as chairman of a committee receives additional

annual compensation of

$26,000, plus reimbursement

for out-of-pocket

expenses with

the exception of

the

chairman of

the audit

and compensation committee

who receive

annual compensation of

$40,000. Each

director

serving

as

member

of

a

committee

receives

additional

annual

compensation

of

$13,000,

plus

reimbursement for out-of-pocket expenses

with the exception

of the member

of the audit

committee who

receives annual compensation of $26,000, plus reimbursement for

out-of-pocket expenses. In 2023, fees

and expenses of our non-executive directors amounted to $0.5

million.

We do not have a retirement plan for our officers or directors.

Equity Incentive Plan

In November 2014, our board of directors approved, and the Company adopted the 2014

Equity Incentive

Plan for 5,000,000

shares of common

stock, amended on

May 31, 2018

to increase the

shares of common

stock to

13,000,000 and

further amended

on January

8, 2021,

referred to

as “the

Plan”, to

increase the

number

of

shares

of

common

stock

available

for

the

issuance

of

equity

awards

by

20

million

shares.

Currently, 11,144,759

shares remain reserved for issuance under the Plan.

Under the Plan, the Company’s

employees, officers and directors

are entitled to receive

options to acquire

the

Company’s

common

stock.

The

Plan

is

administered

by

the

Compensation

Committee

of

the

91

Company’s Board of Directors, or such other committee of the Board

as may be designated by the Board.

Under

the

terms

of

the

Plan,

the

Company’s

Board

of

Directors

is

able

to

grant

(a)

non-qualified stock

options, (b) stock appreciation rights,

(c) restricted stock, (d)

restricted stock units, (e)

unrestricted stock,

(f) other equity-based or equity-related awards, (g)

dividend equivalents and (h) cash awards. No options

or stock appreciation

rights can be

exercisable subsequent to the

tenth anniversary of

the date on

which

such

Award

was

granted.

Under

the

Plan,

the

Administrator

may

waive

or

modify

the

application

of

forfeiture of awards

of restricted stock

and performance

shares in connection

with cessation of

service with

the Company.

No Awards

may be

granted under

the Plan

following the

tenth anniversary

of the

date on

which the Plan was adopted by the Board (i.e.,

January 8, 2031).

During 2023 and as of the

date of this annual report, our

board of directors awarded

an aggregate amount

of 1,750,000

shares and

2,300,000 shares,

respectively of

restricted common

stock, of

which 1,487,500

shares and 1,955,000

shares, respectively were

awarded to senior

management, and 262,500

shares and

345,000 shares, respectively,

were awarded to non-employee

directors. All restricted shares

vest ratably

over

three

years,

The

restricted

shares

are

subject

to

forfeiture

until

they

become

vested.

Unless

they

forfeit, grantees

have the

right to

vote, to

receive and

retain all

dividends paid

and to

exercise all

other

rights, powers and privileges of a holder of shares.

In 2023, compensation

costs relating

to the aggregate

amount of

restricted stock

awards amounted

to $9.9

million.

C.

Board Practices

We

have

established

an

Audit

Committee,

comprised

of

two

board

members,

which

is

responsible

for

reviewing

our

accounting

controls,

recommending

to

the

board

of

directors

the

engagement

of

our

independent

auditors, and

pre-approving audit

and

audit-related

services and

fees.

Each member

has

been determined by our board of directors to be “independent” under the rules of the NYSE and

the rules

and

regulations

of

the

SEC.

As

directed

by

its

written

charter,

the

Audit

Committee

is

responsible

for

appointing, and overseeing the work of the

independent auditors, including reviewing and approving their

engagement

letter

and

all

fees

paid

to

our

auditors,

reviewing

the

adequacy

and

effectiveness

of

the

Company's accounting and internal control

procedures and reading and discussing

with management and

the independent

auditors the

annual audited

financial statements.

The members

of the

Audit Committee

are

Mr. Kyriacos

Riris

(chairman

and

financial

expert)

and

Mr. Apostolos

Kontoyannis

(member

and

financial expert).

We

have established

a Compensation

Committee comprised

of two

members, which,

as directed

by its

written charter, is responsible

for setting the

compensation of

executive officers of

the Company, reviewing

the Company’s incentive

and equity-based

compensation plans,

and reviewing

and approving

employment

and severance

agreements. The

members of

the Compensation

Committee are

Mr. Apostolos Kontoyannis

(chairman) and Mr. Konstantinos Psaltis (member).

We have established

a Nominating

Committee comprised

of two

members, which,

as directed

by its

written

charter,

is responsible

for identifying,

evaluating and

making recommendations

to the

board of

directors

concerning individuals for selections as

director nominees for the

next annual meeting of

stockholders or

to

otherwise

fill

board

of

director

vacancies.

The

members

of

the

Nominating

Committee

are

Mr. Konstantinos Psaltis (chairman) and Mr. Kyriacos Riris (member).

We

have established

a Sustainability

Committee as

of February

18, 2021,

comprised of

Ms. Semiramis

Paliou (member)

and Mr.

Apostolos Kontoyannis (Chairman)

which, as

directed by

its written charter,

is

responsible for

Identifying, evaluating

and making

recommendations to

the Board

with respect

to significant

policies

and

performance

on

matters

relating

to

sustainability,

including

environmental

risks

and

opportunities, social responsibility and impact and the health and

safety of all of our stakeholders.

92

We

have

established

an

Executive

Committee

comprised

of

the

four

directors,

Ms.

Semiramis

Paliou

(Chairperson), Mr.

Anastasios Margaronis (member), Mr.

Ioannis Zafirakis (member), and Mr.

Eleftherios

Papatrifon

(member).

The

Executive

Committee has,

to

the

extent

permitted

by

law,

the

powers of

the

Board of Directors in the management of the business and affairs of the Company.

We

also

maintain

directors’

and

officers’

insurance,

pursuant

to

which

we

provide

insurance

coverage

against certain

liabilities to

which our

directors and

officers may be

subject, including

liability incurred

under

U.S.

securities law.

Our executive

directors have

employment

agreements, which,

if terminated

without

cause, entitle them to continue receiving their basic salary

through the date of the agreement’s expiration.

Clawback Policy

In December 2023,

our Board

of Directors

adopted a policy

regarding the

recovery of erroneously

awarded

compensation (“Clawback Policy”) in accordance with the applicable rules of

NYSE and Section 10D and

Rule 10D-1 of the Securities Exchange Act of 1934, as amended. In the event we are required to prepare

an accounting restatement due to

material noncompliance with any

financial reporting requirements under

U.S. securities

laws or

otherwise erroneous

data or

if we

determine there

has been

a significant

misconduct

that causes material financial, operational

or reputational harm, we shall

be entitled to recover a portion

or

all of

any incentive-based

compensation, if

any,

provided to

certain executives

who, during

a three-year

period

preceding

the

date

on

which

an

accounting

restatement

is

required,

received

incentive

compensation

based

on

the

erroneous

financial

data

that

exceeds

the

amount

of

incentive-based

compensation the executive would have received based on

the restatement.

Our

Clawback

Policy

shall

be

administered

by

our

Compensation Committee

who

has

the

authority,

in

accordance with

the applicable

laws, rules

and regulations,

to interpret

and make

determinations

necessary

for the administration of the

Clawback Policy,

and may forego recovery in

certain instances, including if it

determines that recovery would be impracticable.

D.

Employees

We crew our vessels

primarily with Greek officers and Filipino officers

and seamen and may also employ

seamen from Poland,

Romania and

Ukraine. DSS

and DWM are

responsible for identifying

the appropriate

officers

and

seamen

mainly

through

crewing

agencies.

The

crewing

agencies

handle

each

seaman's

training, travel

and payroll.

The management

companies ensure

that all

our seamen

have the

qualifications

and licenses required to comply

with international regulations and shipping conventions. Additionally,

our

seafaring

employees

perform

most

commissioning

work

and

supervise

work

at

shipyards

and

drydock

facilities. We

typically man

our vessels

with more crew

members than

are required by

the country of

the

vessel's flag in order to allow for the performance of routine maintenance

duties.

The

following

table

presents

the

number

of

shoreside

personnel

employed

by

DSS

and

the

number

of

seafaring

personnel

employed

by

our

vessel-owning

subsidiaries

as

of

December

31,

2023,

2022

and

2021.

Year Ended December 31,

2023

2022

2021

Shoreside

11

2

113

111

Seafaring

906

907

708

Total

1,018

1,020

819

93

E.

Share Ownership

With respect to

the total amount

of common shares,

Series B Preferred

Shares, Series C

Preferred Shares

and Series D Preferred Shares owned by our officers and directors, individually

and as a group, see “Item

7. Major Shareholders and Related Party Transactions—A. Major Shareholders.”

F.

Disclosure of Registrant's Action to Recover Erroneously Awarded

Compensation

Not applicable.

Item 7.

Major Shareholders and Related Party Transactions

A.

Major Shareholders

The following table

sets forth information

regarding ownership

of our common

stock of which

we are aware

as of the

date of this

annual report, for (i) beneficial

owners of five

percent or more of

our common stock

and

(ii) our

officers

and

directors,

individually

and

as

a

group.

All

of

our

shareholders,

including

the

shareholders listed in this table, are entitled to one vote for each share

of common stock held.

Title of Class

Identity of Person or Group

Number of

Shares Owned

Percent of

Class

*

Common Stock,

Semiramis Paliou (1)

23,750,097

19.8%

par value $0.01

Anastasios Margaronis (2)

12,114,535

10.1%

Sea Trade Holdings Inc. (3)

19,165,545

16.0%

All other officers and directors as a group (4)

12,316,914

10.3%

* Based on 119,962,917 common shares outstanding as of April 1, 2024.

(1)

Mrs. Semiramis Paliou indirectly may be deemed to beneficially own 19.8% beneficially owned

through Tuscany Shipping Corp., or Tuscany,

and through 4 Sweet Dreams S.A., as the result

of her ability to

control the vote and

disposition of such entities.

The shares include 5,427,977

shares

of

common

stock

issuable

to

Semiramis Paliou

upon

exercise

of

3,527,501

warrants

distributed on December 14, 2023. As of December 31, 2021, 2022 and 2023, Mrs. Semiramis

Paliou

owned

indirectly

17.8%,

18.9%

and

20.3%,

respectively,

of

our

outstanding

common

stock. Additionally,

Mrs. Paliou

owns, through

Tuscany,

10,675 shares

of Series

C Preferred

Stock, par value $0.01 per share, and 400

shares of Series D Preferred Stock,

par value $0.01

per share. The

Series C Preferred Stock

vote with our common

shares and each share

of the

Series C Preferred Stock entitle the holder thereof to 1,000 votes on all matters submitted to a

vote of

the common

stockholders of

the Company.

Each share

of Series

D Preferred

Stock

shall entitle

the holder

thereof to

two hundred

thousand (200,000)

votes on

all matters

submitted

to a

vote of

the stockholders

of the

Company, provided however, that, notwithstanding

any other

provision of the

Series D Preferred Stock

statement of designation, to

the extent that

the total

number of votes one

or more holders of

Series D Preferred Stock is

entitled to vote (including

any voting

power of

such holders

derived from

Series D

Preferred Stock,

shares of

Common

Stock or any other

voting security of

the Company issued

and outstanding

as of the date

hereof

or that

may be

issued in

the future)

on any

matter submitted

to a

vote of

stockholders of

the

Company would exceed 36.0% of the total

number of votes eligible to be cast

on such matter,

the total

number of votes

that holders

of Series D

Preferred Stock may

exercise derived from

the Series D Preferred Stock together with Common Shares and any

other voting securities of

94

the Company beneficially

owned by such

holder, shall

be reduced to

36% of the

total number

of votes that may be cast on such matter submitted to a vote of

stockholders.

(2)

Mr. Anastasios

Margaronis,

our

President

and

a

member

of

our

board

of

directors

may

be

deemed to

beneficially own

Anamar Investments

Inc. and

Coronis Investments

Inc. as

the result

of his ability to control the vote and disposition of such entities, for an aggregate of 12,114,535

shares.

These

shares

include

2,758,710

shares

of

common

stock

issuable

to

Anastasios

Margaronis upon exercise of 1,792,814 warrants distributed on December

14, 2023.

(3)

This information

is derived

from a

Schedule 13G/A

filed with

the SEC

on February

12, 2024,

adjusting the percentage figure based

on the common shares issued

and outstanding as of the

date of

this report.

The shares

include 4,422,817

shares of

common stock

issuable to

Sea Trade

Holdings Inc. upon the exercise of 2,948,545 warrants distributed on December

14, 2023.

(4)

Ms. Semiramis

Paliou

and

Mr. Anastasios

Margaronis

are

our

only

directors

or

officers

that

beneficially own

5% or

more of

our outstanding

common stock.

Mr.

Ioannis Zafirakis

may be

deemed

to

beneficially

own

3,089,992

shares,

or

2.6%

of

our

outstanding

common

stock,

beneficially

owned

through

Abra

Marinvest

Inc.;

and

Mr.

Simeon

Palios

may

be

deemed

to

beneficially

own

5,017,536

shares,

or

4.2%

of

our

outstanding

common

stock,

beneficially

owned

through

Taracan

Investments

S.A.

and

Limon

Compania

Financiera

S.A.

All

other

officers and directors each own less than 1% of our outstanding common

stock.

As of April 1, 2024,

we had 83 shareholders of record, 65

of which were located in the

United States and

held an

aggregate of

105,578,632 of

our common

shares, representing

88.01% of

our outstanding

common

shares. However,

one of

the U.S.

shareholders of

record is

CEDE &

CO., a

nominee of

The Depository

Trust Company,

which held 104,663,529

of our

common shares as

of that

date. Accordingly,

we believe

that the

shares held

by CEDE

& CO.

include common

shares beneficially

owned by

both holders

in the

United States

and non-U.S.

beneficial owners.

We

are not

aware of

any arrangements

the operation

of

which may at a subsequent date result in our change of control.

Holders

of

the

Series

B

Preferred

Shares

generally

have

no

voting

rights

except

(1)

in

respect

of

amendments to the Articles of

Incorporation which would adversely alter

the preferences, powers or rights

of

the

Series

B

Preferred

Shares

or

(2)

in

the

event

that

we

propose

to

issue

any

parity

stock

if

the

cumulative dividends payable

on outstanding Preferred

Stock are in

arrears or any

senior stock.

However,

if and whenever

dividends payable

on the

Series B

Preferred Shares

are in

arrears for

six or

more quarterly

periods, whether or not consecutive, holders

of Series B Preferred Shares (voting together

as a class with

all

other

classes

or

series

of

parity

stock

upon

which

like

voting

rights

have

been

conferred

and

are

exercisable) will

be entitled to

elect one additional

director to serve

on our

board of directors

until such time

as all accumulated and unpaid dividends on the Series B Preferred

Shares have been paid in full.

B.

Related Party Transactions

OceanPal Inc.,

or OceanPal

Since November 2021,

we own 500,000

of OceanPal’s Series B

Preferred Shares. As

of October 17,

2023

we own

207 shares

of OceanPal’s

Series C

Convertible Preferred

Shares issued

to us

in the

OceanPal

spin-off.

Series B Preferred Shares entitle the holder

to 2,000 votes on all matters submitted to vote

of the

stockholders of the

Company,

provided however,

that the total

number of votes

shall not exceed

34% of

the total

number of

votes, provided

further, that the

total number

of votes

entitled to

vote, including

common

stock or any other voting security, would not exceed 49% of the total number of votes.

Series

C

Preferred

Shares

do

not

have

voting

rights

unless

amendments

of

the

Articles

of

Incorporation that adversely alter

the preference, powers or

rights of the

Series C Preferred

Shares or to

95

issue Parity

Stock or

create or

issue Senior

Stock. Series

C Preferred

Shares have

become convertible

into common stock

at the Company’s

option since the first

anniversary of the issue

date, at a

conversion

price

equal

to

the

lesser

of

$6.5

and

the

10-trading day

trailing

VWAP

of

OceanPal’s

common

shares,

subject

to

adjustments.

Additionally,

Series

C

Preferred

Shares

have

a

cumulative

preferred

dividend

accruing

at

the

rate

of

8%

per

annum,

payable

in

cash

or,

at

OceanPal’s

election,

in

kind

and

has

a

liquidation preference equal to the stated value of $10,000.

On September

20, 2022,

we acquired

25,000 Series

D Preferred

Shares, par

value $0.01

per share,

as

part

of

the

consideration

provided

to

us

for

the

acquisition

of

Baltimore

,

which

was

sold

to

OceanPal,

pursuant to a Memorandum of

Agreement dated June 13,

2022, for $22.0 million.

On December 15, 2022,

we

distributed

the

Series

D

Preferred

Shares

as

non-cash

dividend

to

our

shareholders

of

record

on

November 28, 2022.

On

February

8,

2023,

we

acquired

13,157

of

OceanPal’s

Series

D

Preferred

Shares

as

part

of

the

consideration

provided

to

us

for

the

acquisition

of

Melia

,

which

was

sold

to

OceanPal,

pursuant

to

a

Memorandum of Agreement

dated February 1,

2023, for $14.0

million. On June

9, 2023, we

distributed the

Series D Preferred Shares as a non-cash dividend to our shareholders

of record on April 24, 2023.

Dividend income from the OceanPal preferred shares during 2023 amounted

to $0.8 million.

OceanPal Inc. Non-Competition Agreement

We have entered into a non-competition agreement with OceanPal Inc. ("OceanPal"), dated November 2,

2021, pursuant to which we

granted to OceanPal (i) a

right of first refusal over any

opportunity available to

us

(or

any

of

our

subsidiaries)

to

acquire

or

charter-in

any

dry

bulk

vessel

that

is

larger

than

70,000

deadweight

tons

and

that

was

built

prior

to

2006

and

(ii)

a

right

of

first

refusal

over

any

employment

opportunity for

a dry bulk

vessel pursuant

to a spot

market charter

presented or

available to

us with respect

to

any

vessel

owned

or

chartered

in,

directly

or

indirectly,

by

us.

The

non-competition

agreement

also

prohibits

us

and

OceanPal

from

soliciting

each

other's

employees.

The

terms

of

the

non-competition

agreement provide that it

will terminate on the

date that (i) our

ownership of OceanPal’s equity

securities

represents less than

10% of total

outstanding voting power

and (ii)

we and

OceanPal share no

common

executive officers.

OceanPal Inc. Right of First Refusal

On November

2, 2021

we entered

into a

right of

first refusal

agreement with

OceanPal Inc.

pursuant to

which we granted OceanPal

Inc. a right of

first refusal over six

drybulk carriers owned

by us, as of

the date

of the agreement, and identified in the agreement. Pursuant to this right of first refusal,

OceanPal Inc. has

the right, but not the obligation, to purchase one or all of the six identified vessels from us

when and if we

make a determination

to sell one

or more of

the vessels at

a price equal

to the fair

market value of

each

vessel at

the time

of sale,

as determined

by the

average of

two independent

shipbroker valuations

from

brokers mutually

agreeable to

us and

OceanPal Inc.

If OceanPal

Inc. does

not exercise

its right

to purchase

a vessel, we have the

right to sell the vessel

to any third party for

a period of three months

from the date

notified OceanPal Inc.

of our

intent to

sell the

vessel. As

of the

date of

the annual

report, OceanPal has

acquired two of the six vessels and three vessels were sold to third

parties.

Series D Preferred Stock

In June 2021, we

issued 400 shares of

its newly-designated Series

D Preferred Stock,

par value $0.01

per

share,

to

Tuscany

Shipping

Corp.,

an

entity

controlled

by

its

Chief

Executive

Officer,

Mrs.

Semiramis

Paliou, for

an aggregate

purchase price

of

$360,000. The

Series D

Preferred Stock

has no

dividend or

liquidation rights.

Each share of

Series D Preferred

Stock shall entitle

the holder thereof

to two hundred

thousand (200,000) votes on all

matters submitted to a vote of

the stockholders of the Company, provided

96

however, that, notwithstanding

any other provision of

Series D Preferred Stock

statement of designation,

to the extent that

the total number of votes

one or more holders

of Series D Preferred Stock

is entitled to

vote (including

any voting

power of

such holders

derived from

Series D

Preferred Stock,

shares of

Common

Stock or

any other

voting security

of the

Company issued

and outstanding

as of

the date

hereof or

that

may

be

issued

in

the

future)

on

any matter

submitted to

a

vote

of

stockholders of

the

Company

would

exceed 36.0% of

the total number

of votes eligible

to be cast

on such matter, the total

number of votes

that

holders of Series D Preferred Stock

may exercise derived from the Series

D Preferred Stock together with

Common Shares and any other voting securities of the Company beneficially owned by such holder, shall

be reduced

to 36%

of the

total number

of votes

that may

be cast

on such

matter submitted

to a

vote of

stockholders. The Series D Preferred Stock is

transferable only to the holder’s immediate

family members

and to affiliated

persons. The issuance of

shares of Series

D Preferred Stock to

Tuscany Shipping Corp.

was approved by an

independent committee of the Board

of Directors of the

Company, which

received a

fairness opinion from an independent third party that the transaction was fair

from a financial point of view

to the Company.

Series C Preferred Stock

In January 2019, we issued 10,675

shares of newly-designated Series C

Preferred Stock, par value $0.01

per share, to an

affiliate of our Chairman, Mr.

Simeon Palios.

In September 2020, the Series

C Preferred

Shares

were

transferred

from

an

affiliate

of

Mr.

Simeon

Palios

to

an

affiliate

of

the

Company’s

Chief

Executive Officer,

Mrs. Semiramis Paliou. The

Series C Preferred Stock

vote with the common

shares of

the Company, and each share entitles the holder thereof to 1,000 votes on all matters submitted to a vote

of the stockholders

of the Company. The

Series C

Preferred Stock

has no dividend

or liquidation

rights and

cannot be transferred without the consent of the

Company except to the holder’s affiliates and immediate

family members.

The issuance

of shares

of Series

C Preferred

Stock was

approved by

an independent

committee of the

Board of Directors,

which received

a fairness opinion

from an independent

third party that

the transaction was fair from a financial point of view to the Issuer.

Steamship Shipbroking Enterprises Inc.

Steamship, an affiliated

entity that

was controlled by

our Chairman of

the Board, Mr.

Simeon Palios until

January 15, 2023 and our CEO Ms. Semiramis

Paliou thereafter, provides to us brokerage services for an

annual fee pursuant

to a

Brokerage Services

Agreement. In

2023, brokerage

fees amounted

to $3.9

million

and we paid

an additional amount

of $0.9 million

for commissions on the

sale and purchases

of vessels.

The terms of this relationship are currently governed by a Brokerage Services Agreement dated February

23, 2024 due to expire on December 31, 2024.

Altair Travel Agency S.A.

Altair

Travel

Agency

S.A.,

or

Altair,

an

affiliated

entity

that

is

controlled

by

our

Chairman

of

the

Board,

Mr. Simeon Palios and CEO Ms. Semiramis Paliou provides us with travel related services. Travel related

expenses in 2023, amounted to $2.5 million.

Diana Wilhelmsen Management Limited

Diana Wilhelmsen

Management Limited,

or DWM,

is a

50/50 joint

venture which

provides management

services

to

certain

vessels

in

our

fleet

for

a

fixed

monthly

fee

and

commercial

services

charged

as

a

percentage

of

the

vessels’

gross

revenues.

Management

fees

in

2023

amounted

to

$1.3

million,

commissions on revenues amounted to $0.4 million.

Bergen Ultra

Bergen Ultra,

or Bergen,

is a

limited partnership

which owns

a dry

bulk carrier.

One of

our subsidiaries,

97

Diana

General

Partner

Inc.,

owns

3%

of

the

partnership

and

acts

as

the

General

Partner

and

another

subsidiary, Komi Shipping

Company Inc.,

owns 22%

of the

partnership.

The remaining

partnership interests

are owned by unaffiliated parties. On March 30, 2023, we entered into a

corporate guarantee with Nordea

to

secure

Bergen’s

obligations

under

a

$15.4

million

loan

facility.

We

have

also

entered

into

an

administrative

service

agreement

under

which

DSS

provides

administrative

services

to

Bergen

for

an

annual fee of $15 and a

commission agreement under which the Company is paid

a commission of 0.8%

per

annum,

on

the

outstanding

balance

of

the

loan,

as

compensation

for

the

guarantee

it

provided

to

Nordea. During 2023, income from administrative fees amounted to $10,192 and we received $61,267 as

payment for the guarantee commission.

Real Estate Acquisition

In July 2023 we purchased the remaining 1/3 interest in a

parcel of land that the Company did not already

own from Alpha Sigma Shipping Corp, a related party company, for the purchase price of $1.2 million and

became the sole owner of the parcel.

Please see Item 4.(D), Property, plants and equipment.

C.

Interests of Experts and Counsel

Not Applicable.

98

Item 8.

Financial information

A.

Consolidated statements and other financial information

See “Item 18. Financial Statements.”

Legal Proceedings

We have not been involved in any legal proceedings which may have, or have

had, a significant effect on

our business, financial position,

results of operations

or liquidity, nor are we aware of

any proceedings that

are pending or

threatened which may

have a significant

effect on our

business, financial position, results

of

operations

or

liquidity.

From time

to

time,

we may

be

subject to

legal proceedings

and

claims in

the

ordinary course of business,

principally personal injury

and property casualty

claims. We expect that

these

claims

would be

covered by

insurance, subject

to

customary deductibles.

Those claims,

even if

lacking

merit, could result in the expenditure of significant financial and

managerial resources.

Dividend Policy

Our board

of directors reviews

and amends our

dividend policy from

time to

time in

light of

our business

plans

and

other

factors. In

order

to

position

us

to

take

advantage

of

market

opportunities

in

a

then-

deteriorating

market,

our

board

of

directors,

beginning

with

the

fourth

quarter

of

2008,

suspended

our

common stock dividend. As a result of improving

market conditions in 2021, our board of directors

elected

to declare quarterly dividends

with respect to the

third quarter of 2021

and for each quarter

thereafter, until

the

first

quarter

of

2024

and

two

special

noncash

dividends,

as

described

in

Item

4A.

History

and

development of the Company.

The declaration and payment

of dividends will

always be subject to the

discretion of our board

of directors.

The

timing

and

amount

of

any

dividends

declared

will

depend

on,

among

other

things,

our

earnings,

financial condition and

cash requirements and

availability, our ability to obtain

debt and equity

financing on

acceptable terms as contemplated by our growth strategy and provisions of Marshall

Islands law affecting

the payment of dividends. In addition, other external factors,

such as our lenders imposing restrictions on

our

ability

to

pay

dividends

under

the

terms

of

our

loan

facilities,

may

limit

our

ability

to

pay

dividends.

Further,

under the

terms of

our loan

agreements, we

may not

be permitted

to pay

dividends

that would result in an event of default or if an event of default has

occurred and is continuing.

Marshall

Islands

law

generally

prohibits

the

payment

of

dividends

other

than

from

surplus

or

when

a

company is insolvent or if the payment

of the dividend would render

the company insolvent. Also, our loan

facilities and Bond prohibit the payment of dividends should an

event of default arise.

We believe

that, under

current law,

any dividends

that we

have paid

and may

pay in

the future

from earnings

and profits constitute

“qualified dividend

income” and as

such are generally

subject to a

20% United States

federal income tax rate with

respect to non-corporate United States shareholders. Distributions

in excess

of our earnings

and profits will

be treated first

as a non-taxable

return of capital

to the extent

of a United

States

shareholder’s tax

basis in

its

common stock

on a

dollar-for-dollar basis

and thereafter

as capital

gain.

Please

see

the

section

of

this

annual

report

entitled

“Taxation”

under

Item

10.E

for

additional

information relating to the tax treatment of our dividend payments.

Cumulative dividends on our Series

B Preferred Shares are payable

on each January 15, April

15, July 15

and October

15, when, as

and if

declared by our

board of

directors or any

authorized committee thereof

out

of

legally

available funds

for

such

purpose.

The

dividend

rate

for

our

Series

B

Preferred

Shares

is

8.875% per

annum per

$25.00 of

liquidation preference

per share

(equal to

$2.21875 per

annum per

share)

and is not subject to adjustment. Since February 14, 2019, we may redeem, in whole or from

time to time

99

in part, the Series B Preferred Shares at

a redemption price of $25.00 per share plus an

amount equal to

all accumulated and unpaid dividends thereon to the date of redemption,

whether or not declared.

Marshall Islands

law provides that

we may

pay dividends on

and redeem the

Series B

Preferred Shares

only to the

extent that assets

are legally available

for such purposes.

Legally available

assets generally

are

limited to our surplus, which essentially represents our retained earnings

and the excess of consideration

received by us for

the sale of shares

above the par value

of the shares. In

addition, under Marshall

Islands

law we

may not

pay dividends

on or

redeem Series

B Preferred

Shares if

we are

insolvent or

would be

rendered insolvent by the payment of such a dividend or the making

of such redemption.

B.

Significant Changes

There have

been no

significant changes

since the

date of

the

annual consolidated

financial statements

included in

this annual

report, other

than those

described in

Note 17

“Subsequent events”

of our

annual

consolidated financial statements.

Item 9.

The Offer and Listing

A.

Offer and Listing Details

The

trading market

for

shares of

our

common stock

is the

NYSE, on

which our

shares trade

under the

symbol “DSX”.

Our Series

B Preferred

Stock has

traded on

the NYSE

under the

symbol “DSXPRB”

since February

21,

2014.

Our Warrants to Purchase Common Stock, expiring on or about December 14, 2026, have

traded on the

NYSE under the symbol “DSX WS” since December 14, 2023.

B.

Plan of distribution

Not Applicable.

C.

Markets

Our common shares have traded on the NYSE since March 23, 2005 under the

symbol “DSX,” our Series

B Preferred Stock has traded on the NYSE

under the symbol "DSXPRB" since

February 21, 2014 and our

Warrants have

traded on

the NYSE

under the

symbol “DSX

WS” since

December 14,

2023. Since

February

1, 2022, our 8.375% Senior Unsecured Bond due 2026 commenced trading

on the Oslo Stock Exchange,

under the symbol "DIASH02."

D.

Selling Shareholders

Not Applicable.

E.

Dilution

Not Applicable.

F.

Expenses of the Issue

Not Applicable.

100

Item 10.

Additional Information

A.

Share capital

Not Applicable.

B.

Memorandum and articles of association

Our current amended and restated articles of incorporation are filed as exhibit 1.1 hereto, and our current

amended and restated

bylaws are filed

as exhibit 1.2

hereto. The information contained

in these exhibits

is incorporated by reference herein.

Information

regarding

the

rights,

preferences

and

restrictions

attaching

to

each

class

of

our

shares

is

described

in

Exhibit 2.8

to

this

annual

report

titled

“Description

of

Securities

Registered

Pursuant

to

Section 12 of the Securities Exchange Act of 1934.”

Stockholders Rights Agreement

On

February 2,

2024, we

entered

into

an

Amended and

Restated Stockholders

Rights

Agreement with

Computershare

Trust

Company,

N.A.,

as

Rights

Agent,

to

amend

and

restate

the

Stockholders

Rights

Agreement, dated January 15, 2016.

Under the Amended

and Restated

Stockholders Rights

Agreement, we

declared a

dividend payable

of one

preferred

stock

purchase

right,

or

Right,

for

each

share

of

common

stock

outstanding

at

the

close

of

business

on

January 26,

2016.

Each Right

entitles the

registered

holder to

purchase from

us

one one-

thousandth of a share of Series

A participating preferred stock, par value $0.01

per share, at an exercise

price of $25.00 per share. The

Rights will separate from the common stock and

become exercisable only

if a person or

group acquires beneficial

ownership of 15% or

more of our common

stock (including through

entry

into

certain

derivative

positions)

in

a

transaction

not

approved

by

our

Board

of

Directors.

In

that

situation, each holder of a Right (other than the

acquiring person, whose Rights will become void and will

not be exercisable)

will have the

right to purchase,

upon payment

of the exercise

price, a number

of shares

of our

common stock having

a then-current market

value equal to

twice the

exercise price. In

addition, if

the Company

is acquired

in a

merger or

other business

combination after

an acquiring

person acquires

15% or more

of our common

stock, each holder

of the Right

will thereafter

have the right

to purchase, upon

payment of the

exercise price, a

number of shares

of common stock

of the acquiring

person having a

then-

current market value equal

to twice the exercise price.

The acquiring person

will not be entitled

to exercise

these Rights.

Under the Amended and Restated Stockholders Rights Agreement's terms, it will expire on

February 1, 2034. A copy of the

Amended and Restated Stockholders Rights Agreement and a summary

of its

terms are

contained in

the Form

8-A12B filed

with the

SEC on

January 15,

2016, with

file number

001-32458, as amended on February 2, 2024.

C.

Material contracts

Attached as exhibits

to this annual

report are the

contracts we consider

to be both

material and not

entered

into in the ordinary

course of business,

which (i) are

to be performed

in whole or

in part on

or after the

filing

date

of this

annual report

or (ii)

were entered

into not

more than

two years

before the

filing date

of this

annual report.

Other than these agreements, we have no material

contracts, other than contracts entered

into in

the ordinary

course of

business, to

which the

Company or

any member

of the

group is

a party.

A

description of these is

included in our description

of our agreements generally:

we refer you to Item

5.B for

a discussion of our loan facilities.

101

D.

Exchange Controls

Under

Marshall

Islands,

Panamanian,

Cypriot

and

Greek

law,

there

are

currently

no

restrictions on

the

export or import of

capital, including foreign exchange controls or restrictions

that affect the remittance

of

dividends, interest or other payments to non-resident holders of our securities.

E.

Taxation

In the

opinion of

Seward & Kissel

LLP,

the following is

a discussion of

the material

Marshall Islands and

U.S. federal

income

tax

considerations

of

the

ownership

and

disposition

by

a

U.S. Holder

and

a

Non-

U.S. Holder,

each as defined

below,

of the

common stock. This

discussion does not

purport to deal

with

the

tax

consequences

of

owning

common

stock

to

all

categories

of

investors,

some

of

which,

such

as

dealers in

securities or

commodities, financial

institutions, insurance

companies, tax-exempt

organizations,

U.S. expatriates, persons liable for the alternative minimum

tax, persons who hold common

stock as part

of

a

straddle,

hedge,

conversion

transaction

or

integrated

investment,

U.S. Holders

whose

functional

currency is not the United States dollar, persons required to recognize income for U.S. federal income tax

purposes

no

later

than

when

such

income

is

reported

on

an

“applicable

financial

statement,”

investors

subject to the “base erosion and

anti-avoidance” tax

and investors that own, actually or

under applicable

constructive ownership

rules, 10%

or more

of the

Company’s common

stock, may

be subject

to special

rules.

This

discussion

deals

only

with

holders

who

hold

the

common

stock

as

a

capital

asset.

You

are

encouraged to consult your own

tax advisors concerning the

overall tax consequences arising

in your own

particular situation under U.S. federal, state, local or foreign law of the

ownership of common stock.

Marshall Islands Tax Considerations

The Company is incorporated in the Marshall Islands. Under current Marshall

Islands law, the company is

not subject to

tax on income

or capital gains,

and no Marshall

Islands withholding tax

will be imposed

upon

payments of dividends by us to our shareholders.

United States Federal Income Taxation

The

following

discussion

is

based

upon

the

provisions

of

the

U.S.

Internal

Revenue

Code

of

1986,

as

amended

(the

“Code”),

existing

and

proposed

U.S.

Treasury

Department

regulations,

(the

“Treasury

Regulations”),

administrative

rulings,

pronouncements

and

judicial

decisions,

all

as

of

the

date

of

this

Annual Report.

This discussion assumes that we do not have an office or other fixed place of business

in

the United States. Unless the context otherwise

requires, the reference to Company below

shall be meant

to refer to both the Company and its vessel-owning and operating

subsidiaries.

Taxation of the Company’s Shipping Income

In General

The Company anticipates that it will derive substantially

all of its gross income from the use and operation

of

vessels

in

international

commerce

and

that

this

income

will

principally

consist

of

freights

from

the

transportation

of

cargoes,

hire

or

lease

from

time

or

voyage

charters

and

the

performance

of

services

directly related thereto, which the Company refers to as “Shipping

Income.”

Shipping Income that is attributable

to transportation that begins or

ends, but that does not

both begin and

end,

in

the

United

States

will

be

considered

to

be

50%

derived

from

sources

within

the

United

States.

Shipping

Income

attributable

to

transportation

that

both

begins

and

ends

in

the

United

States

will

be

considered to be

100% derived from

sources within the

United States. The

Company is not

permitted by

law

to

engage in

transportation that

gives rise

to

100% U.S. source

Shipping Income.

Shipping Income

attributable to

transportation exclusively

between non-U.S. ports

will be

considered to

be

100% derived

102

from sources outside the United States. Shipping Income

derived from sources outside the United States

will not be subject to U.S. federal income tax.

Based upon the

Company’s anticipated

shipping operations,

the Company’s vessels

will operate

in various

parts of the world, including to or from U.S. ports. Unless exempt from U.S. federal income taxation

under

Section 883

of

the

Code,

the

Company

will

be

subject

to

U.S. federal

income

taxation,

in

the

manner

discussed below,

to the extent

its Shipping Income

is considered derived

from sources within

the United

States.

In

the

year

ended

December

31,

2023,

approximately

2.4%

of

the

Company’s

shipping

income

was

attributable to the transportation of cargoes either to or from a U.S. port. Accordingly, approximately 1.2%

of

the

Company’s

shipping

income

would

be

treated

as

derived

from

U.S. sources

for

the

year

ended

December 31, 2023. In

the absence of

exemption from U.S. federal income

tax under Section 883 of

the

Code, the Company

would have been

subject to a

4% tax on its

gross U.S. source

Shipping Income, equal

to $0.1 for the year ended December 31, 2023.

Application of Exemption under Section 883 of the Code

Under the relevant provisions of Section 883 of the Code and the final Treasury Regulations promulgated

thereunder,

a

foreign

corporation

will

be

exempt

from

U.S. federal

income

taxation

on

its

U.S. source

Shipping Income if:

(1)

It is organized in a qualified foreign country which, as defined, is one

that grants an equivalent

exemption from

tax to

corporations organized

in the

United States

in respect

of the

Shipping

Income for which exemption

is being claimed under

Section 883 of

the Code, or the

“Country of

Organization Requirement”; and

(2)

It can satisfy any one of the following two stock ownership requirements:

•

more

than

50%

of

its

stock,

in

terms

of

value,

is

beneficially

owned

by

qualified

shareholders

which,

as

defined,

includes

individuals

who

are

residents

of

a

qualified

foreign country, or the “50% Ownership Test”;

or

•

its stock is

“primarily and regularly” traded

on an established securities

market located

in the United States or a qualified foreign country, or the “Publicly Traded Test”.

The U.S. Treasury Department has recognized the Marshall Islands,

Panama and Cyprus the countries

of

incorporation of

each of

the Company

and its

subsidiaries

that earns

Shipping Income,

as a

qualified foreign

country.

Accordingly,

the

Company

and

each

of

the

subsidiaries

satisfy

the

Country

of

Organization

Requirement.

For

the

2023

taxable

year,

the

Company

believes

that

it

is

unlikely

that

the

50%

Ownership

Test

was

satisfied.

Therefore,

the

eligibility

of

the

Company

and

each

subsidiary

to

qualify

for

exemption

under

Section 883

of the

Code is

wholly dependent

upon the

Company’s

ability

to

satisfy the

Publicly Traded

Test.

Under

the

Treasury

Regulations,

stock

of

a

foreign

corporation

is

considered

“primarily

traded”

on

an

established

securities market

in

a

country

if

the

number

of

shares of

each

class

of

stock

that

is traded

during the taxable year on

all established securities markets in

that country exceeds the number

of shares

in

each

such

class that

is traded

during that

year

on

established securities

markets in

any

other single

country.

The Company’s

common stock

was “primarily

traded” on

the NYSE

during the

2023 taxable

year.

Under the Treasury Regulations, the Company’s common

stock will be considered to

be “regularly traded”

on the NYSE

if: (1) more than

50% of its

common stock, by voting

power and total

value, is listed

on the

103

NYSE, referred

to as

the “Listing

Threshold”, (2) its

common stock

is traded

on the

NYSE, other

than in

minimal

quantities, on

at

least

60 days

during

the

taxable

year

(or

one-sixth of

the

days

during

a

short

taxable year),

which is

referred to

as the

“Trading Frequency

Test”; and (3) the

aggregate number

of shares

of its common stock traded on the NYSE during

the taxable year is at least 10% of

the average number of

shares of its common stock outstanding

during such taxable year (as appropriately

adjusted in the case of

a short taxable year), which is

referred to as the “Trading Volume Test”.

The Trading Frequency Test and

Trading Volume Test are deemed

to be

satisfied under

the Treasury

Regulations if

the Company’s

common

stock is regularly quoted by dealers making a market in the common

stock.

The Company believes

that its

common stock has

satisfied the Listing

Threshold, as well

as the Trading

Frequency Test

and Trading Volume Tests,

during the 2023 taxable year.

Notwithstanding the foregoing, the Treasury

Regulations provide, in pertinent part,

that stock of a

foreign

corporation

will

not

be

considered

to

be

“regularly

traded”

on

an

established

securities

market

for

any

taxable year during which 50%

or more of such stock

is owned, actually or constructively under specified

stock

attribution

rules,

on

more

than

half

the

days

during

the

taxable

year

by

persons,

or

“5%

Shareholders”,

who

each

own

5%

or

more

of

the

value

of

such

stock,

or

the

“5%

Override

Rule.”

For

purposes

of

determining

the

persons

who

are

5%

Shareholders,

a

foreign

corporation

may

rely

on

Schedules 13D and 13G filings with the SEC.

Based on Schedules 13D and 13G filings, during the 2023 taxable year,

less than 50% of the Company’s

common stock was owned by 5% Shareholders. Therefore, the

Company believes that it is not subject to

the 5% Override Rule

and thus has satisfied

the Publicly Traded Test for the 2023 taxable

year.

However,

there

can

be

no assurance

that the

Company will

continue

to

satisfy the

Publicly Traded

Test

in

future

taxable

years. For

example,

the

Company

could

be

subject

to

the

5%

Override

Rule

if

another

5%

Shareholder in

combination with

the Company’s

existing 5%

Shareholders were

to own

50% or

more of

the Company’s

common stock.

In such a

case, the Company

would be subject

to the 5%

Override Rule

unless

it

could

establish that,

among the

shares of

the

common

stock owned

by

the

5%

Shareholders,

sufficient shares are

owned by

qualified shareholders,

for purposes

of Section

883 of

the Code,

to preclude

non-qualified shareholders from owning 50% or more of the Company’s common stock for more than half

the

number of

days during

the

taxable year.

The requirements

of establishing

this exception

to the

5%

Override Rule are onerous and there is no assurance the

Company will be able to satisfy them.

Based

on

the

foregoing,

the

Company

believes

that

it

satisfied

the

Publicly

Traded

Test

and

therefore

believes that it was exempt from U.S. federal income tax

under Section 883 of the Code, during the 2023

taxable year and intends to take this position on its 2023 U.S. federal

income tax returns.

Taxation in Absence of Exemption Under Section 883 of the Code

To

the

extent the

benefits of

Section

883

of

the

Code

are

unavailable with

respect

to

any

item

of

U.S.

source Shipping Income, the Company and each of its subsidiaries

would be subject to a 4% tax imposed

on such income

by Section 887 of

the Code on

a gross basis, without

the benefit of

deductions, which is

referred to as

the “4%

Gross Basis Tax Regime”. Since

under the sourcing

rules described

above, no

more

than 50%

of the

Company’s Shipping

Income would

be treated

as being

derived from

U.S. sources,

the

maximum effective

rate of

U.S. federal

income tax

on the

Company’s Shipping

Income would

never exceed

2% under the 4% Gross Basis Tax Regime.

Based

on

its

U.S.

source Shipping

Income

for

the

2023

taxable

year

and

in

the

absence

of

exemption

under Section 883

of the Code,

the Company would

be subject to

$0.1 of U.S.

federal income tax

under

the 4% Gross Basis Tax Regime.

The 4%

Gross Basis

Tax Regime would not apply

to U.S. source

Shipping Income

to the extent

considered

to be

“effectively connected”

with the

conduct of

a U.S.

trade or

business.

In the

absence of

exemption

104

under Section

883 of

the Code,

such “effectively

connected” U.S.

source Shipping

Income, net

of applicable

deductions, would be

subject to U.S.

federal income tax

currently imposed at

a rate of

21%.

In addition,

earnings

“effectively

connected”

with

the

conduct

of

such

U.S.

trade

or

business,

as

determined

after

allowance for certain adjustments, and certain

interest paid or deemed paid attributable to

the conduct of

the U.S. trade or

business may be

subject to U.S.

federal branch profits

tax imposed at

a rate of 30%.

The

Company’s U.S. source Shipping Income would be considered “effectively connected” with the conduct of

a U.S. trade or business only if: (1) the

Company has, or is considered to have, a fixed place

or business

in the United States involved in the earning

of Shipping Income; and (2) substantially

all of the Company’s

U.S. source Shipping Income

is attributable to regularly

scheduled transportation, such

as the operation

of

a vessel that followed

a published schedule with

repeated sailings at regular

intervals between the same

points for voyages that begin or

end in the United States, or,

in the case of income from

the chartering of

a vessel,

is attributable

to a

fixed place

of business

in the

United States.

We

do not

intend to

have, or

permit

circumstances that

would result

in

having a

vessel

operating to

the

United

States on

a regularly

scheduled basis.

Based on the foregoing and on

the expected mode of our shipping

operations and other

activities, we believe that

none of our

U.S. source Shipping Income

will be effectively

connected with the

conduct of a U.S. trade or business.

Gain on Sale of Vessels

Regardless of whether we

qualify for exemption under

Section 883 of the Code,

we will not be

subject to

U.S.

federal

income

taxation

with

respect

to

gain

realized

on

a

sale

of

a

vessel,

provided

the

sale

is

considered to

occur outside

of the

United States

under U.S.

federal income

tax principles.

In general,

a

sale of a

vessel will

be considered

to occur

outside of

the United States

for this

purpose if

title to the

vessel,

and risk of

loss with respect

to the vessel,

pass to the

buyer outside of

the United States.

It is expected

that any sale of a vessel by us will be considered to occur outside of

the United States.

United States Taxation of U.S. Holders

The

following

is

a

discussion

of

the

material

U.S.

federal

income

tax

considerations

relevant

to

an

investment decision

by a

U.S. Holder, as

defined below, with

respect to

our common

stock. This discussion

does

not

purport

to

deal

with

the

tax

consequences

of

owning

our

common

stock

to

all

categories

of

investors,

some

of

which may

be

subject to

special rules. You

are

encouraged to

consult your

own tax

advisors

concerning

the

overall

tax

consequences

arising

in

your

own

particular

situation

under

U.S.

federal, state, local or foreign law of the ownership of our common stock.

As used

herein, the

term “U.S.

Holder” means

a beneficial

owner of our

common stock

that (i)

is a

U.S.

citizen or resident, a U.S.

corporation or other U.S. entity taxable

as a corporation, an estate,

the income

of which

is subject to

U.S. federal income

taxation regardless of

its source, or

a trust if

(a) a

court within

the

United

States is

able to

exercise primary

jurisdiction over

the

administration of

the trust

and one

or

more U.S. persons

have the authority

to control all

substantial decisions

of the trust

or (b) it

has an election

in

place

to

be

treated

as

a

United

States

person;

and

(ii)

owns

the

common

stock

as

a

capital

asset,

generally, for investment purposes.

If

a partnership

holds our

common stock,

the

tax treatment

of

a partner

will generally

depend upon

the

status of the partner and

upon the activities of the

partnership. If you are a partner

in a partnership holding

our common stock, you are encouraged to consult your own

tax advisor on this issue.

Distributions

Subject to

the discussion of

passive foreign investment

companies below,

any distributions made

by the

Company with respect to its common

stock to a U.S. Holder will

generally constitute dividends, which

may

be

taxable

as

ordinary

income

or

“qualified

dividend

income”

as

described

in

more

detail

below,

to

the

extent of

the Company’s

current or

accumulated earnings

and profits,

as determined

under U.S.

federal

105

income tax principles. Distributions in excess of the Company’s earnings

and profits will be treated first as

a non-taxable return of capital

to the extent of the U.S. Holder’s

tax basis in his common stock

on a dollar-

for-dollar basis

and thereafter

as capital

gain. Because

the Company

is not

a U.S.

corporation,

U.S. Holders

that are corporations will generally not

be entitled to claim a dividends-received deduction with respect

to

any distributions they receive from the Company.

Dividends paid to a

U.S. Holder which is

an individual, trust, or

estate, referred to herein

as a “U.S. Non-

Corporate

Holder,”

will

generally

be

treated

as

“qualified dividend

income”

that

is

taxable

to

Holders

at

preferential U.S.

federal income

tax rates,

provided that

(1) the common

stock is

readily tradable

on an

established securities

market in

the United

States (such

as the

NYSE on

which the

common stock

is listed);

(2) the Company

is not

a PFIC

for the

taxable year

during which the

dividend is

paid or

the immediately

preceding taxable year (which the Company does

not believe it is, has

been or will be); (3) the

U.S. Non-

Corporate Holder

has owned

the common

stock for

more than

60 days in

the 121-day

period beginning

60 days before

the date

on which

the common

stock becomes

ex-dividend; and

(4) the

U.S. Non-Corporate

Holder is not

under an obligation

(whether pursuant to

a short sale

or otherwise) to

make payments with

respect to positions in

substantially similar or related property.

There is no assurance that

any dividends

paid on our common stock

will be eligible for

these preferential rates in

the hands of a U.S.

Non-Corporate

Holder. Any dividends paid by the Company which

are not eligible for these

preferential rates will be taxed

as

ordinary

income

to

a

U.S.

Non-Corporate

Holder.

Special

rules

may

apply

to

any

“extraordinary

dividend,” generally, a dividend paid

by us in an amount which is equal to or in

excess of ten percent of a

U.S. Holder’s adjusted tax basis, or fair market

value in certain circumstances, in a

share of our common

stock.

If

we

pay

an

“extraordinary dividend”

on

our

common stock

that

is

treated

as “qualified

dividend

income,” then

any loss

derived by

a U.S. Individual

Holder from

the

sale or

exchange of

such common

stock will be treated as long-term capital loss to the extent of such dividend.

Sale, Exchange or other Disposition of Common Stock

Subject to the

discussion of the

PFIC rules below,

a U.S. Holder

generally will recognize

taxable gain or

loss upon

a sale,

exchange or

other disposition

of the

Company’s common

stock in

an amount

equal to

the

difference

between

the

amount

realized

by

the

U.S.

Holder

from

such

sale,

exchange

or

other

disposition and

the U.S.

Holder’s tax

basis in

such stock. Such

gain or

loss will

be treated

as long-term

capital gain or loss if the U.S. Holder’s holding period in the common stock is greater than one year

at the

time of the sale,

exchange or other disposition. Long-term capital

gain of a U.S.

Non-Corporate Holder is

taxable

at

preferential U.S.

Federal income

tax

rates.

A

U.S.

Holder’s ability

to

deduct capital

losses

is

subject to certain limitations.

PFIC Status and Significant Tax Consequences

Special

U.S.

federal

income

tax

rules

apply

to

a

U.S.

Holder

that

holds

stock

in

a

foreign

corporation

classified as a passive foreign investment company,

or a “PFIC”, for U.S. federal income tax purposes. In

general, the

Company will

be treated

as a

PFIC with

respect to

a U.S.

Holder if,

for any

taxable year

in

which such Holder held the Company’s common stock, either:

•

at least 75% of the Company’s gross income for such taxable year consists of passive

income (e.g., dividends, interest, capital gains and rents derived other

than in the

active conduct of a rental business), or

•

at least 50% of the average value of the assets held by the corporation

during such

taxable year produce, or are held for the production of, such passive

income.

For purposes of determining whether

the Company is a PFIC, the

Company will be treated as earning

and

owning its proportionate

share of the income and

assets, respectively, of any of its subsidiary

corporations

in which it owns at least 25% of the

value of the subsidiary’s stock. Income earned, or deemed earned,

by

106

the

Company

in

connection

with

the

performance

of

services

would

not

constitute

passive

income. By

contrast, rental

income would

generally constitute

passive income

unless the

Company is

treated under

specific rules as deriving its rental income in the active conduct of

a trade or business.

Based on the Company’s

current operations and future projections, the

Company does not believe that it

is,

nor

does

it

expect

to

become,

a

PFIC

with

respect

to

any

taxable

year. Although

there

is

no

legal

authority directly

on point,

the Company’s

belief is

based principally on

the position

that, for

purposes of

determining

whether

the

Company

is

a

PFIC,

the

gross

income

the

Company

derives

or

is

deemed

to

derive from

the

time

chartering and

voyage chartering

activities of

its

wholly-owned subsidiaries

should

constitute services income,

rather than rental

income. Correspondingly, the

Company believes that

such

income

does

not

constitute

passive

income,

and

the

assets

that

the

Company

or

its

wholly-owned

subsidiaries own and operate in connection with the production of such income, in particular,

the vessels,

do

not

constitute

assets

that

produce

or

are

held

for

the

production

of

passive

income

for

purposes of

determining whether the

Company is

a PFIC.

The Company

believes there

is substantial

legal authority

supporting its position consisting

of case law and

Internal Revenue Service, or

the “IRS”, pronouncements

concerning

the

characterization

of

income

derived

from

time

charters

and

voyage

charters

as

services

income for

other tax

purposes. However, there

is also

authority which characterizes

time charter

income

as rental

income rather

than services

income for

other tax

purposes.

It should

be noted

that in

the absence

of any

legal authority specifically

relating to

the statutory

provisions governing PFICs,

the IRS

or a

court

could

disagree

with

this

position. In

addition,

although

the

Company

intends

to

conduct

its

affairs

in

a

manner to

avoid being classified

as a

PFIC with respect

to any taxable

year, there

can be no

assurance

that the nature of its operations will not change in the future.

As discussed more fully below,

if the Company were to

be treated as a PFIC for

any taxable year,

a U.S.

Holder

would

be

subject

to

different

U.S.

federal

income taxation

rules

depending on

whether the

U.S.

Holder makes an

election to treat

the Company as

a “Qualified Electing Fund,”

which election is referred

to as

a “QEF

Election.” As

discussed below,

as an

alternative to

making a

QEF Election,

a U.S.

Holder

should be

able to

make a

“mark-to-market” election with

respect to

the common

stock, which

election is

referred to

as a

“Mark-to-Market Election”.

If the

Company were

to be

treated as

a PFIC,

a U.S.

Holder

would be

required to

file with

respect to

taxable years

ending on

or after

December 31,

2013 IRS

Form

8621 to report certain information regarding the Company.

Taxation of U.S. Holders Making a Timely QEF Election

If a U.S. Holder makes a

timely QEF Election, which U.S. Holder

is referred to as an “Electing

Holder”, the

Electing

Holder

must

report

each

year

for

U.S.

federal

income

tax

purposes

his

pro

rata

share

of

the

Company’s ordinary earnings and

net capital gain, if

any, for the Company’s taxable year that ends

with or

within the taxable year of the

Electing Holder, regardless of

whether or not distributions were received by

the Electing Holder from the Company.

The Electing Holder’s adjusted tax basis in the common stock will

be

increased

to

reflect

amounts

included

in

the

Electing

Holder’s income.

Distributions received

by

an

Electing Holder that had been previously taxed will result in a corresponding reduction in

the adjusted tax

basis in

the common

stock and

will not

be taxed

again once

distributed. An Electing

Holder would

generally

recognize capital gain or loss on the sale, exchange or other disposition

of the common stock.

Taxation of U.S. Holders Making a Mark-to-Market Election

Alternatively,

if the

Company were

to be

treated as

a PFIC

for any

taxable year

and, as

anticipated, the

common stock is treated

as “marketable stock,” a

U.S. Holder would be

allowed to make a

Mark-to-Market

Election with respect to the Company’s

common stock. If that election is made, the

U.S. Holder generally

would include as

ordinary income

in each

taxable year the

excess, if

any,

of the

fair market

value of

the

common

stock

at

the

end

of

the

taxable

year

over

such

Holder’s

adjusted

tax

basis

in

the

common

stock. The U.S. Holder

would also be

permitted an

ordinary loss in

respect of

the excess, if

any, of the U.S.

Holder’s adjusted tax basis in the

common stock over its fair

market value at the end

of the taxable year,

107

but only

to the

extent of

the net

amount previously

included in

income as

a result

of the

Mark-to-Market

Election. A U.S. Holder’s tax

basis in his

common stock would

be adjusted to

reflect any such

income or

loss

amount. Gain

realized

on

the

sale,

exchange

or

other

disposition

of

the

common

stock

would

be

treated as

ordinary income,

and any

loss realized

on the

sale, exchange

or other

disposition of

the common

stock would

be treated

as ordinary

loss to

the extent

that such

loss does

not exceed

the net

mark-to-market

gains previously included by the U.S. Holder.

Taxation of U.S. Holders Not Making a Timely QEF Election or Mark-to-Market Election

Finally,

if the

Company were

to be

treated as

a PFIC

for any

taxable year,

a U.S.

Holder who

does not

make

either a

QEF

Election or

a Mark-to-Market

Election for

that

year,

whom

is

referred to

as a

“Non-

Electing Holder”, would be subject to special U.S.

federal income tax rules with respect to

(1) any excess

distribution (i.e., the portion of any

distributions received by the Non-Electing

Holder on the common stock

in a

taxable year

in excess

of 125%

of the

average annual

distributions received

by the

Non-Electing Holder

in

the

three

(3)

preceding

taxable

years,

or,

if

shorter,

the Non-Electing Holder’s

holding

period

for

the

common

stock),

and

(2) any

gain

realized

on

the

sale,

exchange

or

other

disposition

of

the

common

stock. Under these special rules:

•

the excess distribution

or gain

would be

allocated ratably

over the Non-Electing

Holder’s

aggregate holding period for the common stock;

•

the

amount

allocated

to

the

current

taxable

year

and

any

taxable

years

before

the

Company became a PFIC would be taxed as ordinary income;

and

•

the amount allocated

to each

of the other

taxable years would

be subject to

tax at

the

highest

rate

of

tax

in

effect

for

the

applicable class

of

taxpayer

for

that

year,

and

an

interest charge

for the

deemed tax

deferral benefit

would be

imposed with

respect to

the resulting tax attributable to each such other taxable year.

These penalties would not

apply to a pension

or profit sharing trust

or other tax-exempt organization that

did not borrow

funds or otherwise

utilize leverage in

connection with its

acquisition of

the common stock.

If

a Non-Electing Holder who is an individual dies while

owning the common stock, such Holder’s successor

generally would not receive a step-up in tax basis with respect

to such stock.

U.S. Federal Income Taxation of “Non-U.S. Holders”

A beneficial owner of

our common stock that is

not a U.S. Holder (other

than a partnership) is referred

to

herein as a “Non-U.S. Holder.”

Dividends on Common Stock

Non-U.S.

Holders

generally

will

not

be

subject

to

U.S.

federal

income

or

withholding

tax

on

dividends

received from us

with respect to

our common stock,

unless that income

is effectively

connected with the

Non-U.S. Holder’s conduct of a trade

or business in the United States.

If the Non-U.S. Holder is entitled

to

the benefits of

a U.S. income

tax treaty with

respect to those

dividends, that income

is taxable in

the United

States only if

attributable to a permanent

establishment maintained by the Non-U.S.

Holder in the United

States.

Sale, Exchange or Other Disposition of Common Stock

Non-U.S.

Holders

generally

will

not

be

subject

to

U.S.

federal

income

or

withholding

tax

on

any

gain

realized upon the sale, exchange or other disposition of our common

stock, unless:

•

the

gain

is

effectively

connected

with

the

Non-U.S.

Holder’s

conduct

of

a

trade

or

business in the United States. If

the Non-U.S. Holder is entitled to

the benefits of a U.S.

108

income tax treaty with respect to that gain, the gain is taxable in

the United States only

if attributable

to a

permanent establishment maintained

by the

Non-U.S. Holder

in the

United States; or

•

the Non-U.S. Holder is an individual who is present

in the United States for 183 days or

more during the taxable year of disposition and other conditions

are met.

If the

Non-U.S. Holder

is engaged

in a

U.S. trade

or business

for U.S.

federal income

tax purposes,

the

income

from

our

common

stock,

including

dividends

and

the

gain

from

the

sale,

exchange

or

other

disposition

of

the

common

stock,

that

is

effectively

connected

with

the

conduct

of

that

U.S.

trade

or

business

will

generally

be

subject

to

U.S.

federal

income

tax

in

the

same

manner

as

discussed

in

the

previous section relating

to the taxation

of U.S. Holders.

In addition, in

the case of

a corporate Non-U.S.

Holder, such Holder’s

earnings and

profits that

are attributable

to the effectively

connected income,

subject

to certain adjustments, may be subject to an additional U.S. federal branch profits tax at a rate of 30%, or

at a lower rate as may be specified by an applicable U.S. income

tax treaty.

Backup Withholding and Information Reporting

In general, dividend

payments, or other

taxable distributions, made

within the United States

to a holder will

be subject to U.S.

federal information reporting requirements. Such payments will

also be subject to

U.S.

federal “backup withholding” if paid to a non-corporate U.S. holder who:

•

fails to provide an accurate taxpayer identification number;

•

is notified by the IRS that he has failed to report all interest or dividends

required to be

shown on his U.S. federal income tax returns; or

•

in certain circumstances, fails to comply with applicable certification

requirements.

Non-U.S.

Holders

may

be

required

to

establish

their

exemption

from

information

reporting

and

backup

withholding by certifying their status on an applicable IRS Form

W-8.

If a holder sells

his common stock to

or through a U.S.

office of a broker,

the payment of the

proceeds is

subject to

both backup

withholding and

information reporting

unless the

holder establishes

an exemption. If

a holder sells

his common

stock through a

non-U.S. office of

a non-U.S. broker

and the sales

proceeds are

paid to the holder

outside the United States, then information

reporting and backup withholding generally

will not

apply to

that payment. However,

information reporting requirements,

but not

backup withholding,

will apply to

a payment of

sales proceeds, including

a payment made

to a holder

outside the United

States,

if the holder

sells his common

stock through a

non-U.S. office of

a broker that

is a U.S.

person or has

some

other contacts with the United States.

Backup

withholding

is

not

an

additional

tax. Rather,

a

taxpayer

generally

may

obtain

a

refund

of

any

amounts

withheld

under

backup

withholding

rules

that

exceed

the

taxpayer’s

U.S.

federal

income

tax

liability by filing a refund claim with the IRS.

U.S. Holders who

are individuals (and

to the extent

specified in applicable

Treasury Regulations, certain

U.S. entities) who

hold “specified foreign financial

assets” (as defined

in Section 6038D of

the Code) are

required to

file

IRS Form

8938 with

information relating

to

the

asset for

each taxable

year

in

which the

aggregate value of all such assets

exceeds $75,000 at any time during

the taxable year or $50,000

on the

last

day

of

the

taxable

year

(or

such

higher

dollar

amount

as

prescribed

by

applicable

Treasury

Regulations).

Specified foreign

financial assets

would include,

among other

assets, our

common stock,

unless the

common stock

is held

through an

account maintained

with a

U.S. financial

institution. Substantial

penalties

apply

to

any

failure

to

timely

file

IRS

Form

8938,

unless

the

failure

is

shown

to

be

due

to

reasonable cause

and not

due to

willful neglect.

Additionally, in the

event a

U.S. Holder

who is

an individual

(and to

the

extent specified

in applicable

Treasury

regulations, a

U.S. entity)

that is

required to

file IRS

109

Form

8938

does

not

file

such

form,

the

statute

of

limitations

on

the

assessment

and

collection of

U.S.

federal income

taxes of

such holder

for the

related tax

year may

not close

until three

(3) years

after the

date that the required information is filed.

Changes in Global Tax Laws

Long-standing

international

tax

initiatives

that

determine

each

country’s

jurisdiction

to

tax

cross-border

international trade and profits are evolving

as a result of, among

other things, initiatives such as the

Anti-

Tax

Avoidance

Directives,

as

well

as

the

Base

Erosion

and

Profit

Shifting

reporting

requirements,

mandated

and/or

recommended

by

the

EU,

G8,

G20

and

Organization

for

Economic

Cooperation

and

Development, including the imposition of a minimum global

effective tax rate for multinational businesses

regardless of the jurisdiction of operation

and where profits are generated (Pillar

Two). As these and other

tax laws and

related regulations change (including

changes in the

interpretation, approach and guidance

of tax

authorities), our

financial results

could be

materially impacted.

Given the

unpredictability of

these

possible changes and their potential

interdependency, it

is difficult to

assess whether the overall effect

of

such potential tax changes would be cumulatively positive or negative for our earnings and cash flow,

but

such changes could adversely affect our financial results.

On December 12, 2022, the European Union member states agreed to implement the OECD’s

Pillar Two

global corporate

minimum tax

rate of

15% on

companies with

revenues of

at least

€750 million effective

from 2024. Various countries have either

adopted implementing legislation

or are in the

process of drafting

such

legislation. Any

new

tax

law

in

a

jurisdiction

where

we

conduct

business

or

pay tax

could

have

a

negative effect on our company.

F.

Dividends and paying agents

Not Applicable.

G.

Statement by experts

Not Applicable.

H.

Documents on display

We file reports

and other information with

the SEC. These materials,

including this annual report

and the

accompanying exhibits are available from the SEC’s website http://www.sec.gov.

I.

Subsidiary information

Not Applicable.

J.

Annual Report to Security Holders

We intend to submit any annual report provided to security holders in electronic

format as an exhibit to a

current report on Form 6-K.

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

Interest Rates

We

are

exposed to

market risks

associated with

changes

in

interest rates

relating to

our

loan facilities,

according to which we were paying

interest at LIBOR plus a margin

until June 30, 2023 and since

then we

110

pay term

SOFR plus

a margin.

Increases in

interest rates

could affect

our results

of operations.

An increase

of

1% in

the

interest rates

of our

loan facilities

bearing

a variable

interest rate

during 2023,

could have

increased our interest cost from $29.6 million to $33.6 million.

We

will

continue

to

have

debt

outstanding,

which

could

impact

our

results

of

operations

and

financial

condition. We manage our exposure in interest rates, by maintaining

a mix of financing under agreements

with floating and

fixed interest rates.

More specifically, during 2022, we refinanced

part of our loans

having

a floating interest

rate, with sale

and leaseback

transactions with fixed

rates. Also, in

2023, we entered

into

an interest rate swap for 30% of our

$100 million loan facility with DNB,

dated June 26, 2023, under

which

we

pay fixed

interest and

receive floating.

Through these

agreements and

our

bond, also

bearing fixed

interest rate, we manage

part of our exposure

in interest rates

caused by the remaining

agreements which

bear floating interest rates.

As of December

31, 2023, 2022

and 2021, and

as of the

date of this

annual report, we

did not and

have

not designated any financial instruments as accounting hedging

instruments.

Currency and Exchange Rates

We generate all of our

revenues in U.S. dollars

but currently incur less

than half of our

operating expenses

(around 29% in 2023 and

around 32% in 2022) and

about half of our general

and administrative expenses

(around 44% in 2023 and around

45% in 2022) in currencies other

than the U.S. dollar, primarily the Euro.

For

accounting

purposes,

including

throughout

this

annual

report,

expenses

incurred

in

Euros

are

converted

into

U.S.

dollars

at

the

exchange rate

prevailing on

the

date

of

each transaction.

Because a

significant portion of our

expenses are incurred in currencies

other than the U.S.

dollar, our expenses may

from time to

time increase relative

to our revenues

as a result

of fluctuations in

exchange rates, particularly

between

the

U.S.

dollar

and

the

Euro,

which

could

affect

our

results

of

operations

in

future

periods.

Currently,

we

do

not

consider

the

risk

from

exchange

rate

fluctuations

to

be

material

for

our

results

of

operations,

as

during

2023

and

2022,

these

non-US

dollar

expenses

represented

15%

and

12%,

respectively

of

our

revenues

and

therefore,

we

are

not

engaged

in

extensive

derivative

instruments

to

hedge a considerable part of those expenses.

While we

historically have

not mitigated

the risk

associated with

exchange rate

fluctuations through

the use

of financial

derivatives, we

may determine

to employ

such instruments

from time

to time

in the

future in

order to

minimize this

risk. Our

use of

financial derivatives

would involve

certain risks,

including the

risk

that losses on a hedged position could exceed

the nominal amount invested in the instrument

and the risk

that

the

counterparty

to

the

derivative

transaction

may

be

unable

or

unwilling

to

satisfy

its

contractual

obligations, which could have an adverse effect on our results.

Item 12.

Description of Securities Other than Equity Securities

Not Applicable.

111

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.

Material Modifications to the Rights of Security Holders and

Use

of Proceeds

None.

Item 15.

Controls and Procedures

a) Disclosure Controls and Procedures

Management,

including

our

Chief

Executive

Officer

and

Chief

Financial

Officer,

has

conducted

an

evaluation of

the effectiveness

of our

disclosure controls and

procedures (as

defined in

Rules 13a-15(e)

and 15d-15(e) under the

Exchange Act) as of

the end of the

period covered by this

annual report. Based

upon

that

evaluation,

our

Chief

Executive

Officer

and

Chief

Financial

Officer

have

concluded

that

our

disclosure controls and procedures are

effective to ensure that information required

to be disclosed by the

Company in the reports that it

files or submits to the SEC

under the Exchange Act is

recorded, processed,

summarized and reported within the time periods specified in SEC rules

and forms.

b) Management’s Annual Report on Internal Control over Financial Reporting

Management

is

responsible

for

establishing

and

maintaining

adequate

internal

control

over

financial

reporting, as such term

is defined in Rule 13a-15(f)

of the Exchange Act. The

Company’s internal control

over

financial reporting

is a

process designed

under the

supervision of

the

Company’s

Chief

Executive

Officer

and

Chief

Financial Officer

to

provide reasonable

assurance

regarding

the

reliability

of

financial

reporting

and

the

preparation

of

the

Company’s

financial

statements

for

external

reporting

purposes

in

accordance with U.S. GAAP.

A company’s internal control over financial

reporting includes those policies

and

procedures that

(i)

pertain to

the

maintenance of

records that,

in

reasonable detail,

accurately and

fairly

reflect

the

transactions

and

dispositions

of

the

assets

of

the

company;

(ii)

provide

reasonable

assurance that transactions are

recorded as necessary to permit

the preparation of financial statements

in

accordance with U.S.

GAAP,

and that receipts

and expenditures of

the company are

being made only

in

accordance with authorizations of

management and directors of the

company; and (iii) provide reasonable

assurance regarding prevention

or timely detection

of unauthorized acquisition,

use, or disposition

of the

company’s assets that could have a material effect on the financial statements.

Management has

conducted an

assessment of

the effectiveness

of the

Company’s internal

control over

financial reporting based on the framework established in Internal Control – Integrated Framework issued

by the

Committee of

Sponsoring Organizations of

the Treadway

Commission (2013

Framework). Based

on

this

assessment,

management

has

determined

that

the

Company’s

internal

control

over

financial

reporting as of December 31, 2023 is effective.

The registered

public accounting firm

that audited

the financial

statements included

in this

annual report

containing

the

disclosure

required

by

this

Item

15

has

issued

an

attestation

report

on

management's

assessment of our internal control over financial reporting.

112

c)

Attestation Report of Independent Registered Public

Accounting Firm

The attestation report

on the Company’s

internal control over

financial reporting issued

by the registered

public accounting firm

that audited the

Company’s consolidated financial

statements, Ernst Young (Hellas)

Certified Auditors

Accountants S.A., appears

on page F-4

of the

financial statements filed

as part of

this

annual report.

d) Changes in Internal Control over Financial Reporting

None.

Inherent Limitations on Effectiveness of Controls

Our management, including

our Chief

Executive Officer

and our

Chief Financial Officer,

does not expect

that our disclosure

controls or our

internal control over

financial reporting will

prevent or detect

all error and

all fraud. A

control system, no matter

how well designed

and operated, can

provide only reasonable,

not

absolute,

assurance

that

the

control

system’s

objectives

will

be

met.

Further,

because

of

the

inherent

limitations

in

all

control

systems,

no

evaluation

of

controls

can

provide

absolute

assurance

that

misstatements due to

error or fraud

will not occur

or that all

control issues and

instances of fraud,

if any,

within the Company have been detected. These inherent limitations include the realities that judgments in

decision-making can

be faulty

and that

breakdowns can

occur because

of simple

error or

mistake. Controls

can also be

circumvented by the

individual acts of

some persons, by

collusion of two

or more people,

or

by management override of the controls. The

design of any system of controls

is based in part on

certain

assumptions

about

the

likelihood

of

future

events,

and

there

can

be

no

assurance

that

any

design

will

succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of

controls effectiveness

to future periods

are subject to

risks. Over time,

controls may become

inadequate

because of changes in conditions

or deterioration in the degree of

compliance with policies or procedures.

Item 16A. Audit Committee Financial Expert

Our Board of Directors has determined that both the members of our

Audit Committee, Mr. Kyriacos Riris

and

Mr.

Apostolos

Kontoyannis,

qualify

as

“Audit

Committee

financial

experts”

and

that

they

are

both

considered to be “independent” according to SEC rules.

Item 16B. Code of Ethics

We have

adopted a code of

ethics that applies to

officers, directors, employees

and agents. Our

code of

ethics is posted on our website,

http://www.dianashippinginc.com

, under “About Us—Code of Ethics” and

is filed

as Exhibit

11.1

to this

Annual Report.

Copies of

our code

of ethics

are available

in print,

free of

charge, upon

request to

Diana Shipping

Inc., Pendelis

16, 175

64 Palaio

Faliro, Athens,

Greece. We intend

to

satisfy

any

disclosure requirements

regarding

any

amendment to,

or waiver

from,

a

provision of

this

code of ethics by posting such information on our website.

Item 16C. Principal Accountant Fees and Services

a) Audit Fees

Our principal

accountants,

Ernst and Young

(Hellas), Certified Auditors

Accountants S.A., have

billed us

for audit

services. Audit fees

in 2023 and

2022 amounted to

€ 383,250 and

€ 383,250, or

approximately

$416,000 and

$437,000, respectively,

and relate to

audit services

provided in

connection with

timely AS

4105

reviews,

the

audit

of

our

consolidated

financial

statements

and

the

audit

of

internal

control

over

financial reporting.

113

b) Audit-Related Fees

Audit related fees during 2023

amounted to € 22,050, as compared

to € 71,288 in 2022 and

relate to audit

services provided in connection with the Company’s filings with the SEC.

c) Tax Fees

During

2023

and

2022,

we

received

services

for

which

fees

amounted

to

$11,025

and

$10,500,

respectively, for the calculation of Earnings and Profits of the Company.

d) All Other Fees

None.

e) Audit Committee’s Pre-Approval Policies and Procedures

Our

Audit

Committee

is

responsible

for

the

appointment,

replacement,

compensation,

evaluation

and

oversight of the work

of our independent auditors. As

part of this responsibility,

the Audit Committee pre-

approves the audit

and non-audit services performed

by the independent auditors

in order to

assure that

they

do not

impair the

auditor’s independence

from the

Company.

The Audit

Committee has

adopted a

policy

which

sets

forth

the

procedures

and

the

conditions

pursuant

to

which

services

proposed

to

be

performed by the independent auditors may be pre-approved.

f) Audit Work Performed by Other than Principal Accountant if Greater than

50%

Not applicable.

Item 16D. Exemptions from the Listing Standards for Audit

Committees

Our Audit Committee

consists of

two independent

members of our

Board of

Directors. Otherwise,

our Audit

Committee

conforms

to

each

other

requirement

applicable

to

audit

committees

as

required

by

the

applicable listing standards of the NYSE.

Item

16E.

Purchases

of

Equity

Securities

by

the

Issuer

and

Affiliated

Purchasers

On May 23, 2014, we announced that our

Board of Directors authorized a share repurchase

plan for up to

$100 million of the Company’s common shares. The

plan does not have an expiration date. During 2023,

we did

not repurchase

any shares

of common

stock and

as of

December 31,

2023 and

the date

of this

report, there

is an

outstanding value

of about

$66.3 million

of common

shares that

can be

repurchased

under the plan.

Item 16F.

Change in Registrant’s Certifying Accountant

Not applicable.

114

Item 16G.

Corporate Governance

Overview

Pursuant to an exception for foreign private issuers,

we, as a Marshall Islands company,

are not required

to

comply with

the

corporate governance

practices followed

by U.S.

companies under

the

NYSE listing

standards.

We believe that our established practices in

the area of corporate governance are in

line with

the spirit

of the

NYSE standards

and provide

adequate protection to

our shareholders.

In fact,

we have

voluntarily adopted

NYSE required

practices, such

as (a)

having a

majority of

independent directors,

(b)

establishing audit,

compensation, sustainability

and nominating

committees and

(c)

adopting a

Code of

Ethics.

The significant differences between our corporate governance practices and the NYSE standards

are set forth below.

Executive Sessions

The

NYSE

requires

that

non-management

directors

meet

regularly

in

executive

sessions

without

management.

The NYSE also

requires that all

independent directors

meet in an

executive session

at least

once a year.

As permitted under Marshall Islands law and our bylaws, our non-management directors do

not

regularly

hold

executive

sessions

without

management

and

we

do

not

expect

them

to

do

so

in

the

future.

Audit Committee

The NYSE requires,

among other things,

that a company

have an audit

committee with a

minimum of three

members.

Our Audit

Committee consists

of two

independent members

of our

Board of

Directors. Our

Audit

Committee

conforms

to

every

other

requirement

applicable

to

audit

committees

set

forth

in

the

listing

standards of the NYSE.

Shareholder Approval of Equity Compensation Plans

The NYSE requires listed

companies to obtain prior

shareholder approval to adopt

or materially revise any

equity compensation

plan. As

permitted under

Marshall Islands

law and

our amended

and restated

bylaws,

we

do

not

need prior

shareholder approval

to

adopt

or revise

equity compensation

plans, including

our

equity incentive plan.

Corporate Governance Guidelines

The NYSE

requires companies

to adopt

and disclose

corporate governance

guidelines.

The guidelines

must address,

among other

things: director

qualification standards,

director responsibilities,

director access

to

management

and

independent

advisers,

director

compensation,

director

orientation

and

continuing

education, management succession

and an annual

performance evaluation.

We are not required to

adopt

such guidelines under Marshall Islands law and we have not adopted

such guidelines.

Share Issuances

In lieu of obtaining shareholder

approval prior to the

issuance of designated securities,

we will comply with

provisions

of

the

Marshall

Islands

Business

Corporations

Act,

which

allows

the

Board

of

Directors

to

approve share issuances. Additionally,

the NYSE restricts the issuance of super voting

stock such as our

Series

C

Preferred

Shares.

However,

pursuant

to

313.00

of

Section

3

of

the

NYSE

Listed

Company

Manual, the

NYSE will accept

any action or

issuance relating to

the voting

rights structure of

a non-U.S.

company

that

is

in

compliance

with

the

NYSE’s

requirements

for

domestic

companies

or

that

is

not

prohibited by

the company's

home country

law.

We

are not

subject to

such restrictions

under our

home

country, Marshall Islands, law.

115

Item 16H. Mine Safety Disclosure

Not applicable.

Item 16I.

Disclosure Regarding

Foreign Jurisdictions

that Prevent

Inspections

Not applicable.

Item 16J. Insider Trading Policies

Pursuant to applicable

SEC transition guidance,

the disclosure required

by Item 16J

will be applicable

to

us beginning in the fiscal year ending December 31, 2024.

Item 16K. Cybersecurity

Risk management and strategy

We have

security measures in

place to mitigate

the risk of

cybersecurity threats affecting

our technology

environment

and

our

business.

In

2023,

the

Company

successfully

achieved

ISO

27001

certification,

demonstrating that our

Information Security

Management System

(ISMS) meets the

rigorous requirements

of

this

internationally recognized

standard.

The

Company's

security

team

regularly

conducts

significant

internal

changes,

and

the

underlying

controls

of

our

cyber

risk

management

program

are

now

formally

aligned with ISO 27001.

Cybersecurity training is carried out on a company-wide

basis to all employees and seafarers while online

performance cybersecurity

is delivered

to our crew

monthly. To

help build

cultural awareness

of these

risks

within the Company, additional phishing campaigns have been

implemented within the organization

which

have

motivated

the

staff

to

react,

helping

to

enhance

awareness

of

these

risks

and

mitigate

their

occurrence.

The

security

team

have

further

enhanced

our

processes

and

increased

our

defenses

by

implementing

a

cybersecurity

testing

program,

carried

out

on

a

yearly

basis

by

external

consultants.

Penetration testing was also carried out

in parallel during 2023. A

centralized monitoring system, powered

by

Microsoft's

cloud-based

Security

Information

and

Event

Management

(SIEM)

solution,

is

in

place

throughout

the

year.

This

system

aggregates

security

data

from

various

sources,

uses

built-in

artificial

intelligence to

detect and

investigate threats,

and enables

our security

team to

respond to

incidents rapidly.

We

have

also

created

a

comprehensive

Business

Continuity

and

Disaster

Recovery

plan

to

ensure

business resilience and minimize potential disruptions.

For the

year 2024,

the security

team has

planned a

comprehensive

collaboration with

a third-party

company

to enhance our cybersecurity awareness and training initiatives. This partnership includes the

design and

implementation

of

a

multi-faceted

approach

to

staff

training,

encompassing

synchronous

and

asynchronous

security

awareness

sessions,

custom-tailored

phishing

campaigns

and

the

creation

of

informative cybersecurity awareness

newsletters to keep

our staff

up to date

on the latest

best practices

and emerging risks. Furthermore, the

collaboration will focus on the

customization and digitalization of our

vessels' cybersecurity awareness program, ensuring that our seafarers

maintain a robust security posture

while at sea.] We will continue to acquire relevant tools to support the identification

of third-party risks and

further

strengthen our

defense. In

parallel to

these

security

measures, our

Company has

established a

Data Management Platform over Microsoft Azure

Technologies, to act as a centralized and secure source

of

truth

for

our

operations.

The

Data

Management

Platform

was

integrated

with

our

core

systems

and

implementation of key reports

was initiated. The goal

for 2024 is to build

Financial and Operational

reports

116

that will

enable better,

faster and

more accurate

monitoring of

Company activities

and improve

decision

making

and

productivity.

To

further

support

this

transition,

relevant

personnel

will

be

digitally

upskilled,

while

being

provided

with

the

necessary

tools

to

help

them

make

better

decisions,

ensuring

greater

productivity

and

enhancing vessel

efficiency.

We

are

committed to

enhance

and

enrich

our

operational

excellence through our external

3rd parties’ inspections and

audits (PSC-Vetting

inspections Audits). We

openly

share

our

results

and

“lessons

learnt”

within

the

industry

and

organizations,

we

compare

and

benchmark our performance and we continuously improve our safety

footprint.

Governance

Our board of directors considers cybersecurity risk as part of its risk oversight function and has delegated

the

day-to-day

oversight of

cybersecurity

and

other

technology

risks

to

the

Cyber

Security Officer.

The

Cyber Security Officer

is responsible for

assessing and managing cybersecurity

threats and for

reporting

cybersecurity

updates,

including

updates

on

monitoring

strategies

and

efforts

to

prevent

cybersecurity

threats, to the board of directors on a quarterly basis or more often

as needed.

The

audit

committee receives

regular reports

from

management

on

our cybersecurity

risks.

In

addition,

management updates the audit committee, as

necessary, regarding

any material cybersecurity incidents,

as

well

as

any

incidents

with

lesser

impact

potential.

The

audit

committee

reviews

the

Company's

cybersecurity

risks

and

assess’

the

steps

that

management

has

taken

to

protect

against

threats

to

the

Company's information systems and security.

Our

board

of

directors

oversees

the

Company’s

cybersecurity

risk

exposures

and

the

steps

taken

by

management to

monitor and

mitigate cybersecurity

risks. The

board of

directors ensures

allocation and

prioritization of resources and

overall strategic direction for

cybersecurity and ensures alignment with

the

Company’s overall strategy.

Cybersecurity Threats

During the year ended December 31, 2023 and until the date of this annual report, we did not identify any

cybersecurity threats that

have materially affected

or are reasonably likely

to materially affect our

business

strategy, results of operations,

or financial condition.

For more

information about

the cybersecurity

risks we

face, please see Item 3.

Key Information — D. Risk Factors

— “A cyber-attack could materially

disrupt our

business.”

117

PART III

Item 17.

Financial Statements

See Item 18.

Item 18.

Financial Statements

The financial statements

required by this

Item 18 are

filed as a

part of this

annual report beginning

on page

F-1.

Item 19.

Exhibits

Exhibit

Number

Description

1.1

Amended and Restated Articles of Incorporation of Diana Shipping Inc. (originally known as Diana

Shipping Investment Corp.) (1)

1.2

Amended and Restated By-laws of the Company (2)

1.3

Equity Distribution Agreement between Diana Shipping Inc. and Maxim Group LLC. dated April 23,

2021 (21)

1.4

Amendment No.1 to Equity Distribution Agreement between Diana Shipping Inc. and Maxim Group

LLC. dated July 7, 2021 (23)

2.1

Form of Common Share Certificate (13)

2.2

Form of Series B Preferred Stock Certificate (16)

2.3

Statement of Designation of the 8.875% Series B Cumulative Redeemable Perpetual Preferred

Shares of the Company (3)

2.4

Statement of Designations of the Series A Participating Preferred Stock of the Company (4)

2.5

Base Indenture, dated May 28, 2015, by and between the Company and Deutsche Bank Trust

Company Americas (5)

2.6

First Supplemental Indenture to the Base Indenture, dated May 28, 2015, by and between the

Company and Deutsche Bank Trust Company Americas, as trustee, relating to the Company's

8.500% Senior Notes due 2020 (6)

2.7

Statement of Designation of Rights, Preferences and Privileges of Series C Preferred Stock of the

Company (18)

2.8

Description of Securities

**

2.9

Amended and Restated Statement of Designation of Rights, Preferences and Privileges of Series D

Preferred Stock of the Company (22)

2.10

Warrant Agreement dated December 14, 2023, between Computershare Inc., and its affiliate,

Computershare Trust Company, N.A. and the Registrant (including the form of the Warrants) (27)

4.1

Amended and Restated Stockholders Rights Agreement dated January 15, 2016 (7)

4.2

2014 Equity Incentive Plan (as amended and restated effective January 8, 2021) (24)

4.3

Form of Technical Manager Purchase Option Agreement (8)

4.4

Form of Management Agreement (9)

4.5

Loan Agreement with Bremer Landesbank dated October 22, 2009 (17)

4.6

Loan Agreement with the Export-Import Bank of China and DnB Nor Bank ASA dated October 2,

2010 (17)

4.7

Loan Agreement with Emporiki Bank of Greece S.A., dated September 13, 2011 (14)

118

4.8

First Supplemental Agreement, by and between Bikar Shipping Company Inc., Diana Shipping Inc.,

DSS and Emporiki Bank of Greece S.A., dated December 11, 2012 (13)

4.9

Second Supplemental Agreement, by and between Bikar Shipping Company Inc., Diana Shipping

Inc., DSS and Credit Agricole Corporate and Investment Bank, dated December 13, 2012 (13)

4.10

Loan Agreement, dated May 24, 2013, by and among Erikub Shipping Company Inc., Wotho

Shipping Company Inc., DNB Bank ASA, and Export-Import Bank of China (11)

4.11

Loan Agreement, dated January 9, 2014, by and among Taka Shipping Company Inc., Fayo Shipping

Company Inc., and Commonwealth Bank of Australia (11)

4.12

Loan Agreement, dated December 18, 2014, by and among Weno Shipping Company Inc., Pulap

Shipping Company Inc., the Banks and Financial Institutions listed therein and BNP Paribas (12)

4.13

Loan Agreement, dated March 17, 2015, by and among Knox Shipping Company Inc., Bokak

Shipping Company Inc., Jemo Shipping Company Inc., Guam Shipping Company Inc., Palau

Shipping Company Inc., Makur Shipping Company Inc., Mandaringina Inc., Vesta Commercial, S.A.,

the Banks and Financial Institutions listed therein, Nordea Bank Finland Plc and Nordea Bank AB,

London Branch (12)

4.14

Administrative Services Agreement, dated October 1, 2013, by and between Diana Shipping Inc. and

Diana Shipping Services S.A. (11)

4.15

Amended and Restated Non-Competition Agreement, dated as of March 1, 2013, by and between

Diana Shipping Inc. and Diana Containerships Inc. (renamed to Performance Shipping Inc.) (11)

4.16

Loan Agreement with ABN AMRO Bank N.V., dated March 26, 2015 (13)

4.17

Loan Agreement with Danish Ship Finance, dated April 29, 2015 (13)

4.18

Joint Venture and Subscription Agreement with Wilhelmsen Ship Management, dated January 16,

2015 (13)

4.19

Loan Agreement with BNP Paribas, dated July 22, 2015 (13)

4.20

Loan Agreement with ING Bank N.V., dated September 30, 2015 (13)

4.21

Loan Agreement with The Export-Import Bank of China, dated January 7, 2016 (13)

4.22

Loan Agreement with ABN AMRO Bank N.V., dated March 29, 2016 (15)

4.23

Brokerage Services Agreement, dated April 1, 2016, by and between Diana Shipping Inc. and Diana

Enterprises Inc. (15)

4.24

Loan Agreement with DNB Bank ASA and The Export-Import Bank of China, dated May 10, 2016

(15)

4.25

Fourth Amendment to Loan Agreement, dated May 20, 2013, by and between Diana Shipping Inc.,

Eluk Shipping Company Inc. and Diana Containerships Inc. (renamed to Performance Shipping Inc.),

dated September 12, 2016 (15)

4.26

Waiver Letter from Commonwealth Bank of Australia dated January 13, 2017 (15)

4.27

Amendment to Loan Agreement dated October 2, 2010 with the Export-Import Bank of China and

DnB Nor Bank ASA, dated February 15, 2017 (15)

4.28

Brokerage Services Agreement, dated April 1, 2019, by and between Diana Shipping Inc. and

Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.) (20)

4.29

Fifth Amendment to Loan Agreement, dated May 20, 2013, by and between Diana Shipping Inc.,

Kapa Shipping Company Inc. and Diana Containerships Inc. (renamed to Performance Shipping

Inc.), dated May 30, 2017 (19)

4.30

Intercreditor Agreement with Diana Containerships Inc. (renamed to Performance Shipping Inc.),

dated June 30, 2017 (19)

4.31

Subordinated Facility Agreement by and between Diana Containerships Inc. (renamed to

Performance Shipping Inc.) and Diana Shipping Inc., dated June 30, 2017 (19)

4.32

Amendment to Loan Agreement dated October 2, 2010 with the Export-Import Bank of China and

DnB Nor Bank ASA, dated May 18, 2017 (19)

4.33

Loan Agreement dated July 2018 with BNP Paribas (20)

4.34

Summary for Diana Shipping Inc. listing prospectus dated as of December 31, 2018 in respect of

9.50% USD 100,000,000 Senior Unsecured Callable Bond Issue 2018/2023 (20)

4.35

Securities Note dated as of December 3, 2018, in respect of 9.50% USD 100,000,000 Senior

Unsecured Callable Bond Issue 2018/2023 (20)

119

4.36

Registration Document dated as of December 3, 2018, in respect of 9.50% USD 100,000,000 Senior

Unsecured Callable Bond Issue 2018/2023 (20)

4.37

Loan Agreement dated March 2019 with DNB Bank ASA (20)

4.38

Loan Agreement dated June 2019 with ABN AMRO Bank N.V.(24)

4.39

Third Amendment Agreement dated December 2020 with DNB Bank ASA (24)

4.40

Loan Agreement dated May 2020 with ABN AMRO Bank N.V. (24)

4.41

Loan Agreement dated May 2020 with Nordea Bank Abp, filial i Norge(24)

4.42

Loan Agreement dated June 2020 with BNP Paribas(24)

4.43

Brokerage Services Agreement, dated July 1, 2020, by and between Diana Shipping Inc. and Diana

Enterprises Inc(24)

4.44

Loan Agreement dated May 2021 with ABN AMRO Bank N.V (25)

4.45:

Nordea Supplemental Agreement dated July, 29, 2021

(26)

4.46:

Nordea Loan Agreement dated September 30, 2022

(26)

4.47:

Right of First Refusal Agreement with OceanPal Inc.

(26)

4.48:

Amended and Restated Contribution and Conveyance Agreement with OceanPal Inc.

(26)

4.49:

Loan Agreement dated April 12, 2023 with Danish Ship Finance A/S

**

4.50:

Loan Agreement dated June 26, 2023 with DNB Bank ASA

**

4.51:

Loan Agreement dated June 20, 2023 with Nordea Bank ABP

**

4.52:

Amended and Restatement Deed re Secured Loan Agreement, dated July 19, 2023

**

4.53:

Brokerage Services Agreement, dated February 23, 2024

**

8.1

Subsidiaries of the Company**

11.1

Amended Code of Ethics (20)

12.1

Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer

**

12.2

Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer

**

13.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002

**

13.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant

to Section 906 of the Sarbanes-Oxley Act of 2002

**

15.1

Consent of Independent Registered Public Accounting Firm

**

97.1

Policy Regarding the Recovery of Erroneously Awarded Compensation

**.

101

The following materials

from the Company's

Annual Report on

Form 20-F for

the fiscal year

ended

December 31, 2023,

formatted in eXtensible

Business Reporting Language

(XBRL): (i) Consolidated

Balance Sheets as of December 31, 2023 and 2022;

(ii) Consolidated Statements of Income for the

years ended December 31,

2023, 2022 and

2021; (iii) Consolidated

Statements of Comprehensive

Income for

the years

ended December

31, 2023,

2022 and

2021; (iv)

Consolidated Statements

of

Stockholders'

Equity

for

the

years

ended

December

31,

2023,

2022

and

2021;

(v)

Consolidated

Statements

of

Cash

Flows

for

the

years

ended

December

31,

2023,

2022

and

2021;

and

(v)

the

Notes to Consolidated Financial Statements

104

Cover Page Interactive Data File (formatted as Inline XBRL

and contained in Exhibit 101)

**

Filed herewith.

(1)

Filed as Exhibit 99.2 to the Company's Form 6-K filed on November 15, 2023

.

(2)

Filed as Exhibit 99.3 to the Company's Form 6-K filed on November 15, 2023.

(3)

Filed as Exhibit 3.3 to the Company's Form 8-A filed on February 13,

2014.

(4)

Filed as Exhibit 3.1 to the Company's Form 8-A12B/A filed on January

15, 2016.

(5)

Filed as Exhibit 4.1 to the Company's Form 6-K filed on May 28, 2015.

(6)

Filed as Exhibit 4.2 to the Company's Form 6-K filed on May 28, 2015.

(7)

Filed as Exhibit 4.1 to the Company's Form 8-A12B/A filed on February

2, 2024.

(8)

Filed as an Exhibit to the Company's Registration Statement (File

No. 123052) on March 1, 2005.

(9)

Filed as

an Exhibit

to the

Company's Amended

Registration Statement

(File No.

123052) on

March

15, 2005.

(10)

Reserved.

120

(11)

Filed as an Exhibit to the Company's Annual Report filed on Form 20-F

on March 27, 2014.

(12)

Filed as an Exhibit to the Company's Annual Report filed on Form 20-F

on March 25, 2015.

(13)

Filed as an Exhibit to the Company's Annual Report filed on Form 20-F

on March 28, 2016.

(14)

Filed as an Exhibit to the Company's Annual Report filed on Form 20-F

on April 20, 2012.

(15)

Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on February 17,

2017.

(16)

Filed as Exhibit 4.1 to the Company's Form 8-A12B filed on February

13, 2014.

(17)

Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on March 31, 2011.

(18)

Filed as an Exhibit to the Company’s Form 6-K filed on February 6, 2019.

(19)

Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on March 16, 2018.

(20)

Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on March 12, 2019.

(21)

Filed as an Exhibit to the Company’s Form 6-K filed on April 23, 2021.

(22)

Filed as an Exhibit to the Company’s Form 6-K filed

on September 8, 2023

.

(23)

Filed as an Exhibit to the Company’s Form 6-K filed on July 31, 2021.

(24)

Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on March 12, 2021.

(25)

Filed as an Exhibit to the Company’s Form F-3 filed on June 4, 2021.

(26)

Filed as an Exhibit to the Company’s Annual Report filed on Form 20-F on

March 27, 2023.

(27)

Filed as an Exhibit to the Company’s Form 6-K filed on December 14, 2023.

121

SIGNATURES

The registrant hereby certifies that it meets all of the requirements

for filing on Form 20-F and has duly

caused and authorized the undersigned to sign this annual report on its

behalf.

DIANA SHIPPING INC.

/s/ Ioannis Zafirakis

Ioannis Zafirakis

Chief Financial Officer

Dated: April 4, 2024

F-1

DIANA SHIPPING INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm (PCAOB

ID:

1457

)

..................

F-2

Report of Independent Registered Public Accounting Firm

................................

................

F-4

Consolidated Balance Sheets as of December 31, 2023 and 2022

................................

...

F-6

Consolidated Statements of Income for the years ended December

31, 2023, 2022 and

2021 ................................................................

................................

..

F-7

Consolidated Statements of Comprehensive Income for the years

ended December 31,

2023, 2022 and 2021

................................

.........

F-8

Consolidated Statements of Stockholders' Equity for the years

ended December 31,

2023, 2022 and 2021

................................

.........

F-9

Consolidated Statements of Cash Flows for the years ended December

31, 2023, 2022

and 2021 ................................

................................

...........................

F-

11

Notes to Consolidated Financial Statements................................

................................

......

F-13

F-2

Report of Independent Registered Public Accounting Firm

To

the Stockholders and the Board of Directors of Diana

Shipping Inc.

Opinion on the Financial Statements

We have

audited the

accompanying consolidated balance

sheets of

Diana Shipping

Inc. (the

Company)

as

of

December

31,

2023

and

2022,

the

statements

of

income,

comprehensive

income, stockholders' equity and cash

flows for each of the three years

in the period ended December

31,

2023,

and

the

referred

to

as

the

“consolidated

financial

statements”).

In

our

opinion, the consolidated financial statements present fairly,

in all material respects, the financial position

of the Company

at December 31,

2023 and 2022,

and the results

of its operations

and its cash

flows for

each of

the three

years in

the period

ended December

31, 2023, in

conformity with

U.S. generally

accepted

accounting principles.

We

also

have

audited,

in

accordance

with

the

standards

of

the

Public

Company

Accounting Oversight

Board (United

States) (PCAOB), the

Company's internal control

over financial

reporting as

of December

31, 2023, based on criteria

established in Internal Control-Integrated

Framework issued by the Committee

of Sponsoring Organizations of the Treadway Commission (2013

framework) and our report dated April

4,

2024 expressed an unqualified opinion thereon.

Basis for Opinion

These financial

statements are

the responsibility of

the Company's

management. Our responsibility

is to

express an

opinion on

the Company’s

financial statements

based on

our audits.

We are

a public

accounting

firm

registered

with

the

PCAOB

and

are

required

to

be

independent

with

respect

to

the

Company

in

accordance with the U.S. federal securities laws and the

applicable rules and regulations of the Securities

and Exchange Commission and the PCAOB.

We conducted

our audits in

accordance with the

standards of the

PCAOB. Those standards

require that

we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are

free of material misstatement, whether

due to error or fraud.

Our audits included performing

procedures to

assess the

risks of

material misstatement

of the

financial statements, whether

due to

error or

fraud, and

performing procedures that respond to those risks. Such

procedures included examining, on a test basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

We

believe

that

our

audits

provide

a

reasonable basis for our opinion.

Critical Audit Matter

The

critical

audit

matter

communicated

below

is

a

matter

arising

from

the

current

period

audit

of

the

financial statements that was

communicated or required to

be communicated to the

audit committee and

that: (1) relates

to accounts or

disclosures that are

material to the

financial statements and

(2) involved our

especially challenging,

subjective

or complex

judgments. The

communication of

the

critical audit

matter

does not alter in any

way our opinion on the consolidated financial statements, taken

as a whole, and we

are not, by communicating the critical audit

matter below, providing a separate opinion on the critical audit

matter or on the accounts or disclosure to which it relates.

F-3

Recoverability assessment of vessels held and used

Description

of the

matter

At

December

31,

2023,

the

carrying

value

of

the

Company’s

vessels

plus

unamortized deferred costs was $

915,470 thousands. As discussed in Note 2

(l) to

the

consolidated

financial

statements,

the

Company

evaluates

its

vessels

for

impairment whenever events or

changes in circumstances

indicate that the carrying

value

of

a

vessel

plus

unamortized

deferred

costs

may

not

be

recoverable

in

accordance with the

guidance in ASC 360

– Property,

Plant and Equipment (“ASC

360”).

If

indicators

of

impairment

exist,

management

analyzes

the

future

undiscounted

net

operating

cash

flows

expected

to

be

generated

throughout

the

remaining

useful

life

of

each

vessel

and

compares

it

to

the

carrying

value

of

the

vessel

plus

unamortized

deferred

costs.

Where

a

vessel’s

carrying

value

plus

unamortized

deferred

costs

exceeds

the

undiscounted

net

operating

cash

flows,

management will recognize an

impairment loss equal to

the excess of

the carrying

value plus unamortized deferred costs over the fair value of the

vessel.

Auditing

management’s

recoverability

assessment

was

complex

given

the

judgement

and

estimation

uncertainty

involved

in

determining

the

future

charter

rates

for

non-contracted

revenue

days

used

in

forecasting

undiscounted

net

operating cash

flows. These

rates are

subjective as

they involve

the development

and use of

assumptions about the dry-bulk

shipping market through the

end of the

useful

lives

of

the

vessels. This

assumption is

forward

looking and

subject

to

the

inherent unpredictability of future global economic and market

conditions.

How we

addressed

the matter

in our audit

We obtained

an understanding

of the

Company’s impairment

process, evaluated

the

design, and

tested the

operating effectiveness of

the controls

over the

Company’s

recoverability assessment of vessels held

and used, including the

determination of

future charter rates for non-contracted revenue days.

We

evaluated

management’s

recoverability

assessment

by

comparing

the

methodology and

model used

for each

vessel against

the

accounting guidance

in

ASC 360.

To

test management’s

undiscounted net

operating cash

flow forecasts,

our procedures

included, among

others, comparing the

future vessel

charter rates

for non-contracted

revenue days

with external

data such

as available

market data

from various analysts and recent economic

and industry changes, and internal data

such as historical charter

rates for the vessels.

In addition, we performed

sensitivity

analyses to assess the impact of changes to future charter rates for non-contracted

revenue

days

in

the

determination

of

the

future

undiscounted

net

operating

cash

flows.

We

tested

the

completeness

and

accuracy

of

the

data

used

within

the

forecasts.

We assessed the adequacy

of the Company’s disclosures

in Note 2 (l)

to

the consolidated financial statements.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

We have served as the Company’s auditor since 2004.

Athens, Greece

April 4, 2024

F-4

Report of Independent Registered Public Accounting Firm

To

the Stockholders and the Board of Directors of Diana

Shipping Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Diana

Shipping Inc.’s internal control over

financial reporting as of December

31, 2023,

based

on

criteria

established

in

Internal

Control—Integrated

Framework

issued

by

the

Committee

of

Sponsoring

Organizations

of

the

Treadway

Commission

(2013

framework)

(the

COSO

criteria).

In

our

opinion, Diana Shipping Inc.

(the Company) maintained, in

all material respects, effective

internal control

over financial reporting as of December 31, 2023, based on the COSO

criteria.

We

also

have

audited,

in

accordance

with

the

standards

of

the

Public

Company

Accounting Oversight

Board

(United States)

(PCAOB), the

consolidated balance

sheets of

the

Company as

of

December 31,

2023

and

2022,

the

statements

of

income,

comprehensive

income,

stockholders’

equity and cash flows for each of the three years in

the period ended December 31, 2023, and the related

notes and our report dated April 4, 2024 expressed an unqualified opinion

thereon.

Basis for Opinion

The

Company’s

management

is

responsible

for

maintaining

effective

internal

control

over

financial

reporting and for its assessment of the effectiveness of internal control over financial reporting included in

the

accompanying

Management’s

Annual

Report

on

Internal

Control

over

Financial

Reporting.

Our

responsibility is to express an opinion on the Company’s internal control over financial reporting based on

our audit. We are a public accounting firm registered with the PCAOB and are required to be

independent

with respect to the

Company in accordance with the

U.S. federal securities laws and

the applicable rules

and regulations of the Securities and Exchange Commission and

the PCAOB.

We conducted our audit in

accordance with the standards

of the PCAOB. Those

standards require that we

plan and

perform the

audit to

obtain reasonable

assurance about

whether effective

internal control

over

financial reporting was maintained in all material respects.

Our audit

included obtaining

an understanding

of internal

control over

financial reporting,

assessing the

risk

that

a

material

weakness

exists,

testing

and

evaluating

the

design

and

operating

effectiveness

of

internal

control

based

on

the

assessed

risk,

and

performing

such

other

procedures

as

we

considered

necessary in the circumstances. We believe that our audit provides a reasonable

basis for our opinion.

F-5

Definition and Limitations of Internal Control Over Financial

Reporting

A

company’s

internal

control

over

financial

reporting

is

a

process

designed

to

provide

reasonable

assurance

regarding

the

reliability

of

financial

reporting

and

the

preparation

of

financial

statements

for

external

purposes

in

accordance

with

generally

accepted

accounting

principles.

A

company’s

internal

control over financial reporting includes those policies and procedures that (1) pertain to the maintenance

of records

that, in

reasonable detail,

accurately and

fairly reflect

the transactions

and dispositions

of the

assets of the company; (2) provide reasonable

assurance that transactions are recorded as necessary to

permit

preparation of

financial

statements

in

accordance with

generally accepted

accounting principles,

and that receipts and expenditures

of the company are

being made only in

accordance with authorizations

of management and

directors of the

company; and (3)

provide reasonable

assurance regarding prevention

or timely detection of

unauthorized acquisition,

use, or disposition

of the company’s assets

that could have

a material effect on the financial statements.

Because

of

its

inherent

limitations,

internal

control

over

financial

reporting

may

not

prevent

or

detect

misstatements. Also, projections of any evaluation

of effectiveness to future periods are subject

to the risk

that controls may become inadequate because of changes

in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

/s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.

Athens, Greece

April 4, 2024

F-6

DIANA SHIPPING INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2023 and 2022

(Expressed in thousands of U.S. Dollars – except

for share and per share data)

2023

2022

ASSETS

Current Assets

Cash and cash equivalents (Note 2(e))

$

101,592

$

76,428

Time deposits (Note 2(e))

40,000

46,500

Accounts receivable, trade (Note 2(f))

5,870

6,126

Due from related parties (Note 4)

149

216

Inventories (Note 2(g))

5,056

4,545

Prepaid expenses and other assets

8,696

6,749

Investments in equity securities (Note 5(b))

20,729

-

Fair value of derivatives

129

-

Total Current Assets

182,221

140,564

Fixed Assets:

Advances for vessel acquisitions (Note 6)

-

24,123

Vessels, net (Note 6)

900,192

949,616

Property and equipment, net (Note 7)

24,282

22,963

Total fixed assets

924,474

996,702

Other Noncurrent Assets

Restricted cash, non-current (Note 8)

20,000

21,000

Due from related parties, non-current (Note 4)

319

-

Equity method investments (Note 4)

15,769

506

Investments in related party (Note 5(a))

8,318

7,744

Other non-current assets

31

101

Deferred costs

15,278

16,302

Total Non-current Assets

984,189

1,042,355

Total Assets

$

1,166,410

$

1,182,919

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Current portion of long-term debt, net of deferred

financing costs (Note 8)

$

49,512

$

91,495

Current portion of finance liabilities, net of deferred

financing costs (Note 9)

9,221

8,802

Accounts payable

9,663

11,242

Due to related parties (Note 3)

759

136

Accrued liabilities

12,416

12,134

Deferred revenue

3,563

7,758

Total Current Liabilities

85,134

131,567

Non-current Liabilities

Long-term debt, net of current portion and deferred

financing costs (Note 8)

461,131

431,016

Finance liabilities, net of current portion and deferred

financing costs (Note 9)

122,908

132,129

Fair value of derivatives

568

-

Warrant liability (Note 11(g))

6,332

-

Other non-current liabilities

1,316

879

Total Noncurrent Liabilities

592,255

564,024

Commitments and contingencies (Note 10)

-

Stockholders' Equity

Preferred stock (Note 11)

26

Common stock, $

0.01

par value;

1,000,000,000

and

200,000,000

shares authorized and

113,065,725

and

102,653,619

issued and outstanding on December 31, 2023

and 2022,

respectively (Note 11)

1,131

1,027

Additional paid in capital

1,101,425

1,061,015

Accumulated other comprehensive income

308

253

Accumulated deficit

(613,869)

(574,993)

Total Stockholders' Equity

489,021

487,328

Total Liabilities and Stockholders' Equity

$

1,166,410

$

1,182,919

The accompanying notes are an integral part of

these consolidated financial statements.

F-7

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF INCOME

For the years ended December 31, 2023, 2022 and 2021

(Expressed in thousands of U.S. Dollars – except for share and per share data)

2023

2022

2021

REVENUES:

Time charter revenues

$

262,098

$

289,972

$

214,203

OPERATING EXPENSES

Voyage expenses (Note 12)

13,621

6,942

5,570

Vessel operating expenses

85,486

72,033

74,756

Depreciation and amortization of deferred charges

49,785

43,326

40,492

General and administrative expenses

32,968

29,367

29,192

Management fees to a related party (Note 4(a))

1,313

511

1,432

Gain on sale of vessels (Note 6)

(5,323)

(2,850)

(1,360)

Insurance recoveries

-

(1,789)

-

Other operating (income)/loss

(1,464)

(265)

603

Operating income, total

$

85,712

$

142,697

$

63,518

OTHER INCOME / (EXPENSES):

Interest expense and finance costs (Note 13)

(49,331)

(27,419)

(20,239)

Interest and other income

8,170

2,737

176

Loss on derivative instruments (Note 8)

(439)

-

Loss on extinguishment of debt (Note 8)

(748)

(435)

(980)

Gain on spin-off of OceanPal Inc.

-

15,252

Gain on deconsolidation of subsidiary (Note 4(b))

844

-

Gain on related party investments (Note 5(a))

1,502

589

-

Unrealized gain on equity securities (Note 5(b))

2,813

-

Unrealized gain on warrants (Note 11 (g))

1,583

-

Gain/(loss) from equity method investments (Note 4)

(262)

894

(333)

Total other expenses, net

$

(35,868)

$

(23,634)

$

(6,124)

Net income

$

49,844

$

119,063

$

57,394

Dividends on series B preferred shares (Notes 11(b) and

14)

(5,769)

Net income attributable to common stockholders

$

44,075

$

113,294

$

51,625

Earnings per common share, basic

(Note 14)

$

0.44

$

1.42

$

0.64

Earnings per common share, diluted

(Note 14)

$

0.42

$

1.36

$

0.61

Weighted average number of common shares

outstanding, basic

(Note 14)

100,166,629

80,061,040

81,121,781

Weighted average number of common shares

outstanding, diluted

(Note 14)

101,877,142

83,318,901

84,856,840

The accompanying notes are an integral part of these consolidated financial statements.

F-8

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

For the years ended December 31, 2023, 2022 and 2021

(Expressed in thousands of U.S. Dollars)

2023

2022

2021

Net income

$

49,844

$

119,063

$

57,394

Other comprehensive income - Defined benefit plan

55

182

2

Comprehensive income

$

49,899

$

119,245

$

57,396

The accompanying notes are an integral part of these consolidated financial statements.

F-9

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

For the years ended December 31, 2023, 2022

and 2021

(Expressed in thousands of U.S. Dollars – except

for share data)

Preferred Stock

Series B

Preferred Stock

Series C

Preferred Stock

Series D

Common Stock

Additional

Paid-in

Capital

Other

Comprehe

nsive

Income

Accumulat

ed Deficit

Total

Equity

# of Shares

Par

Valu

e

# of

Shares

Par

Valu

e

# of

Shares

Par

Valu

e

# of Shares

Par

Value

BALANCE,

December 31, 2020

2,600,000

$

26

10,675

$

-

$

-

89,275,002

$

893

$

1,020,164

$

69

$

(592,582)

$

428,570

Net income

-

57,394

Issuance of Series

D Preferred Stock

(Note 11(d))

-

400

-

254

-

254

Issuance of

restricted stock and

compensation cost

(Note 11(h))

-

8,260,000

83

7,359

-

7,442

Stock repurchased

and retired (Note

11(e))

-

(12,862,744)

(129)

(45,240)

-

(45,369)

Dividends on series

B preferred stock

(Note 11(b))

-

(5,769)

Dividends on

common stock

(Note 11(f))

-

(8,820)

OceanPal Inc.

spinoff (Note 11(g))

-

(40,509)

Other

comprehensive

income

-

2

-

2

BALANCE,

December 31, 2021

2,600,000

$

26

10,675

$

-

400

$

-

84,672,258

$

847

$

982,537

$

71

$

(590,286)

$

393,195

Net income

-

119,063

Issuance of

restricted stock and

compensation cost

(Note 11(h))

-

1,470,000

15

9,267

-

9,282

Stock repurchased

and retired (Note

11(e))

-

(820,000)

(8)

(3,791)

-

(3,799)

Issuance of

common stock

(Note 11(e))

-

877,581

9

5,313

-

5,322

Issuance of

common stock for

vessel acquisitions

(Notes 6 and 11(e))

-

16,453,780

164

67,689

-

67,853

Dividends on series

B preferred stock

(Note 11(b))

-

(5,769)

Dividends on

common stock

(Note 11(f))

-

(79,812)

Dividends in kind

(Note 11(g))

-

(18,189)

F-10

Other

comprehensive

income

-

182

-

182

BALANCE,

December 31, 2022

2,600,000

$

26

10,675

$

-

400

$

-

102,653,619

$

1,027

$

1,061,015

$

253

$

(574,993)

$

487,328

Net income

-

49,844

Issuance of

restricted stock and

compensation cost

(Note 11(h))

-

1,750,000

18

9,920

-

9,938

Issuance of

common stock

(Note 11(e))

-

6,628,493

66

22,780

-

22,846

Issuance of

common stock for

vessel acquisitions

(Notes 6 and 11(e))

-

2,033,613

20

7,710

-

7,730

Dividends on series

B preferred stock

(Note 11(b))

-

(5,769)

Dividends on

common stock

(Note 11(f))

-

(64,276)

Warrants (Note

11(g))

-

(7,914)

Dividends in kind

(Note 11(g))

-

(10,761)

Other

comprehensive

income

-

55

-

55

BALANCE,

December 31, 2023

2,600,000

$

26

10,675

$

-

400

$

-

113,065,725

$

1,131

$

1,101,425

$

308

$

(613,869)

$

489,021

The accompanying notes are an integral part of

these consolidated financial statements.

F-

11

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

For the years ended December 31, 2023, 2022 and 2021

(Expressed in thousands of U.S. Dollars)

2023

2022

2021

Cash Flows from Operating Activities:

Net income

$

49,844

$

119,063

$

57,394

Adjustments

to

reconcile

net

income

to

cash

provided

by

operating activities

Depreciation and amortization of deferred charges

49,785

43,326

40,492

Amortization of debt issuance costs (Note 13)

2,620

2,286

1,865

Compensation cost on restricted stock (Note 11(h))

9,938

9,282

7,442

Provision for credit loss

-

133

300

Dividend income (Note 5(a))

(3)

(100)

(69)

Pension and other postretirement benefits

55

182

2

Loss on derivative instruments (Note 8)

439

-

Gain on sale of vessels (Notes 6)

(5,323)

(2,850)

(1,360)

Gain on related parties investments (Note 5(a))

(1,502)

(589)

-

Loss on extinguishment of debt (Note 8)

748

435

980

Gain on OceanPal spinoff

-

(15,252)

Gain on deconsolidation of subsidiary (Note 4 (b))

(844)

-

Gain / (Loss) from equity method investments (Note 4)

262

(894)

333

Unrealized gain on equity securities (Note 5(b))

(2,813)

-

Unrealized gain on warrants (Note 11(g))

(1,583)

-

(Increase) / Decrease

Accounts receivable, trade

256

(3,427)

1,568

Due from related parties

(252)

736

(56)

Inventories

(511)

1,768

(1,581)

Prepaid expenses and other assets

(1,950)

(1,265)

1,759

Other non-current assets

70

(16)

(1,177)

Investments in equity securities

(17,916)

Increase / (Decrease)

Accounts payable, trade and other

(1,761)

1,465

1,219

Due to related parties

(57)

(72)

154

Accrued liabilities

282

3,956

(2,610)

Deferred revenue

(4,195)

2,026

2,890

Other non-current liabilities

437

(218)

(57)

Drydock cost

(5,646)

(16,368)

(4,531)

Net Cash Provided by Operating Activities

$

70,380

$

158,859

$

89,705

Cash Flows from Investing Activities:

Payments to

acquire vessels and

vessel improvements

(Notes

6 and 4(b))

(29,732)

(230,302)

(17,393)

Proceeds from sale of vessels, net of expenses (Note 6)

36,560

4,372

33,731

Payments to acquire investments (Note 4)

(10,595)

-

Time deposits

6,500

(46,500)

-

Payments to joint ventures

-

(375)

Payments to acquire other assets (Note 4(b))

(216)

-

Cash divested from deconsolidation (Note 4(b))

(771)

-

(1,000)

Proceeds

from

convertible

loan

with

limited

partnership

(Note

4(b))

25,189

-

Payments to acquire property, furniture and fixtures (Note 7)

(2,006)

(667)

(1,600)

Net Cash Provided By/(Used in) Investing Activities

$

24,929

$

(273,097)

$

13,363

Cash Flows from Financing Activities:

Proceeds from issuance of long-term debt and finance liabilities

(Notes 8 and 9)

57,696

275,133

101,279

Proceeds from issuance of common stock (Note 11(e))

-

5,266

-

Payments for issuance of common stock (Note 11(e))

(79)

-

Proceeds from issuance of preferred stock, net of expenses

-

254

Payments of dividends, preferred stock (Note 11(b))

(5,769)

Payments of dividends, common stock (Note 11(f))

(41,427)

(79,812)

(8,820)

Payments for repurchase of common stock

-

(3,799)

(45,369)

Payments of financing costs (Notes 8 and 9)

(1,724)

(3,302)

(7,594)

Repayments

of

long-term

debt

and

finance

liabilities

(Notes 8

and 9)

(79,842)

(102,839)

(93,170)

F-12

Net Cash Provided by/(Used In) Financing Activities

$

(71,145)

$

84,878

$

(59,189)

Cash,

Cash

Equivalents

and

Restricted

Cash,

Period

Increase/(Decrease)

24,164

(29,360)

43,879

Cash, Cash Equivalents and Restricted Cash, Beginning

Balance

97,428

126,788

82,909

Cash, Cash Equivalents and Restricted Cash, Ending

Balance

$

121,592

$

97,428

$

126,788

RECONCILIATION OF CASH, CASH EQUIVALENTS

AND RESTRICTED CASH

Cash and cash equivalents

$

101,592

$

76,428

110,288

Restricted cash, non-current

20,000

21,000

16,500

Cash, Cash Equivalents and Restricted Cash, Total

$

121,592

$

97,428

$

126,788

SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash acquisition of assets (Note 6)

$

7,809

$

136,038

-

Non-cash debt assumed

-

20,571

-

Non-cash Finance Liability

-

47,782

-

Stock issued in noncash financing activities (Note 6)

7,809

67,909

-

Non-cash investments acquired (Notes 6 and 5(a))

10,000

-

Noncash dividend (Note 11(f) and 11(g))

41,521

-

Transfer to Investments

-

1,370

441

Interest paid

$

46,473

$

21,306

19,608

The accompanying notes are an integral part of these consolidated financial statements.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-13

1.

Basis of Presentation and General Information

The accompanying consolidated financial statements include the accounts

of Diana Shipping Inc., or DSI,

and

its

wholly owned

subsidiaries (collectively,

the

“Company”). DSI

was formed

on

March 8, 1999

,

as

Diana

Shipping

Investment

Corp.,

under

the

laws

of

the

Republic

of

Liberia.

In

February

2005,

the

Company’s

articles

of

incorporation

were

amended.

Under

the

amended

articles

of

incorporation,

the

Company

was

renamed

Diana

Shipping

Inc.

and

was

re-domiciled

from

the

Republic

of

Liberia

to

the

Republic of the Marshall Islands.

The Company

is engaged

in the ocean

transportation of

dry bulk

cargoes worldwide

through the ownership

and

bareboat charter

in of

dry bulk

carrier vessels.

The Company

operates its

own fleet

through Diana

Shipping Services

S.A. (or

“DSS”), a

wholly owned

subsidiary and

through Diana

Wilhelmsen Management

Limited,

or

DWM,

a

50

%

owned

joint

venture

(Note

4(a)).

The

fees

paid

to

DSS

are

eliminated

in

consolidation.

2.

Significant Accounting Policies

a)

Principles

of

Consolidation

:

The

accompanying

consolidated

financial

statements

have

been

prepared in

accordance with

U.S. generally

accepted accounting

principles and

include the

accounts of

Diana Shipping Inc.

and its wholly

owned subsidiaries. All

intercompany balances and transactions

have

been

eliminated

upon

consolidation.

Under

Accounting

Standards

Codification

(“ASC”)

810

“Consolidation”, the

Company consolidates entities

in which

it has

a controlling

financial interest,

by first

considering if

an entity

meets the

definition of

a variable

interest entity

("VIE") for

which the

Company is

deemed to be the primary beneficiary under

the VIE model, or if the Company controls

an entity through a

majority

of

voting

interest

based

on

the

voting

interest

model.

The

Company

evaluates

financial

instruments, service contracts, and

other arrangements to determine

if any variable interests

relating to an

entity exist. For

entities in which

the Company

has a variable

interest, the Company

determines if

the entity

is a

VIE by

considering whether

the entity’s

equity investment

at risk

is sufficient

to finance

its activities

without additional

subordinated financial

support and

whether the

entity’s at-risk

equity holders

have the

characteristics of a controlling financial interest. In performing the analysis of whether the Company is the

primary beneficiary

of a

VIE, the

Company considers

whether it

individually has

the

power to

direct the

activities of

the VIE

that most

significantly affect

the entity’s

performance and

also has

the obligation

to

absorb losses

or the right

to receive

benefits of the

VIE that could

potentially be significant

to the

VIE. If

the Company holds

a variable interest

in an entity

that previously was

not a VIE,

it reconsiders whether

the

entity has become a VIE.

b)

Use

of

Estimates:

The preparation

of

consolidated financial

statements

in

conformity with

U.S.

generally accepted accounting principles

requires management to make estimates

and assumptions that

affect the

reported amounts

of assets

and liabilities

and disclosure

of contingent

assets and

liabilities at

the

date

of

the

consolidated financial

statements

and the

reported

amounts of

revenues

and

expenses

during the reporting period.

Actual results could differ from those estimates.

c)

Other Comprehensive Income / (Loss):

The Company separately presents certain transactions,

which are recorded directly as components

of stockholders’ equity. Other Comprehensive Income / (Loss)

is presented in a separate statement.

d)

Foreign Currency

Translation:

The functional

currency of

the Company

is the

U.S. dollar

because

the Company’s

vessels operate

in international

shipping markets,

and therefore

primarily transact

business

in U.S. dollars. The Company’s accounting records are

maintained in U.S. dollars. Transactions

involving

other currencies during

the year are

converted into U.S.

dollars using the

exchange rates in

effect at the

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-14

time of

the transactions.

At the balance

sheet dates,

monetary assets

and liabilities

which are denominated

in

other

currencies

are

translated

into

U.S.

dollars

at

the

year-end

exchange

rates.

Resulting

gains

or

losses

are

included

in

other

operating

(income)/loss

in

the

accompanying

consolidated

statements

of

operations.

e)

Cash, Cash Equivalents and Time

Deposits:

The Company considers highly liquid investments

such as time deposits, certificates of deposit

and their equivalents with an original maturity of

up to about

three months to

be cash equivalents. Time

deposits with maturity above

three months are removed

from

cash and cash

equivalents and are

separately presented

as time deposits.

Restricted cash consists

mainly

of cash deposits required to be maintained at all times under the Company’s loan facilities (Note 8). As of

December 31, 2023 and

2022, accrued interest income

amounted to $

1,206

and $

578

, respectively and is

included in prepaid expenses and other assets in the accompanying

consolidated balance sheets.

f)

Accounts Receivable, Trade:

The amount shown as accounts receivable, trade, at each

balance

sheet

date,

includes

receivables

from

charterers

for

hire

from

lease

agreements,

net

of

provisions

for

doubtful accounts, if any.

At each balance

sheet date, all potentially

uncollectible accounts are

assessed

individually for

purposes of determining

the appropriate

provision for doubtful

accounts. As

of December

31, 2023

and 2022

there was

no

provision for

doubtful accounts.

The Company

does not

recognize interest

income on trade receivables as all balances are settled within a year.

g)

Inventories:

Inventories

consist

of

lubricants

and

victualling

which

are

stated,

on

a

consistent

basis, at the lower of cost or net

realizable value. Net realizable value is

the estimated selling prices in the

ordinary course of business,

less reasonably predictable

costs of completion, disposal,

and transportation.

When

evidence

exists

that

the

net

realizable

value

of

inventory

is

lower

than

its

cost,

the

difference

is

recognized as a loss in earnings in the period in which it occurs.

Cost is determined by the first in, first out

method. Amounts removed from inventory are also determined by the

first in first out method. Inventories

may also consist of bunkers,

when on the balance sheet date,

a vessel is without employment. Bunkers,

if

any,

are also stated at

the lower of cost

or net realizable value and

cost is determined by

the first in, first

out method.

h)

Vessel

Cost

:

Vessels

are

stated

at

cost

which

consists

of

the

contract

price

and

any

material

expenses

incurred

upon

acquisition

or

during

construction.

Expenditures

for

conversions

and

major

improvements are also capitalized when they appreciably extend the life, increase

the earning capacity or

improve

the

efficiency

or

safety

of

the

vessels;

otherwise,

these

amounts

are

charged

to

expense

as

incurred. Interest cost

incurred during the

assets' construction periods that

theoretically could have

been

avoided if expenditure

for the assets

had not

been made is

also capitalized.

The capitalization

rate, applied

on accumulated

expenditures

for the

vessel, is

based on

interest rates

applicable to

outstanding borrowings

of the period.

i)

Vessels held for sale:

The Company classifies assets as being held for sale when the respective

criteria are met. Long-lived assets

or disposal groups classified as

held for sale are measured

at the lower

of their

carrying amount or

fair value

less cost

to sell.

These assets

are not

depreciated once they

meet

the criteria to be held for sale. The fair value less cost to sell of an asset held for sale is assessed at each

reporting period it remains classified as held

for sale. When the plan to sell an asset

changes, the asset is

reclassified as held and used,

measured at the lower of

its carrying amount before

it was recorded as held

for sale, adjusted for depreciation, and the asset’s fair value at the date of the

decision not to sell.

j)

Sale and

leaseback:

In accordance

with ASC

842-40 in

a sale-leaseback

transaction where

the

sale of an asset and leaseback

of the same asset by

the seller is involved, the

Company, as seller-lessee,

should firstly determine whether the transfer of an asset shall be accounted for as a

sale under ASC 606.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-15

For a

sale to

have occurred,

the control

of the

asset would

need to

be transferred

to the

buyer and

the

buyer

would

need

to

obtain

substantially

all

the

benefits

from

the

use

of

the

asset.

As

per

the

aforementioned guidance, sale and leaseback transactions, which include an obligation for the Company,

as seller-lessee, to repurchase the

asset, or other situations where the

leaseback would be classified as a

finance lease, are determined

to be failed sales under ASC

842-40. Consequently, the Company does not

derecognize the asset from

its balance sheet and accounts for

any amounts received under the

sale and

leaseback agreement as a financing arrangement.

k)

Property and equipment:

The Company owns the land

and building where its offices are located.

The Company also owns part of a plot acquired for

office use (Note 7).

Land is stated at cost and it is

not

subject

to

depreciation.

The

building

has

an

estimated

useful

life

of

55 years

with

no

residual

value.

Furniture,

office

equipment

and

vehicles

have

a

useful

life

of

5 years

,

except

for

a

car

owned

by

the

Company, which has a useful life of

10 years

. Computer software and hardware have a useful

life of

three

years

. Depreciation is calculated on a straight-line basis.

l)

Impairment

of

Long-Lived

Assets:

Long-lived

assets

are

reviewed

for

impairment

whenever

events

or

changes

in

circumstances

(such

as

market

conditions,

obsolesce

or

damage

to

the

asset,

potential

sales

and

other

business

plans)

indicate

that

the

carrying

amount

of

an

asset

may

not

be

recoverable.

When

the

estimate

of

undiscounted projected

net

operating

cash

flows,

excluding interest

charges, expected

to be

generated by

the use

of an

asset over

its remaining

useful life

and its

eventual

disposition

is

less

than

its

carrying

amount,

the

Company

evaluates

the

asset

for

impairment

loss.

Measurement of

the impairment

loss is

based on

the fair

value of

the asset,

determined mainly

by third

party valuations.

For vessels, the Company calculates undiscounted projected net operating cash flows by considering the

historical and

estimated vessels’ performance

and utilization with

the significant assumption

being future

charter rates for the unfixed days, using

the most recent

10

-year average of historical 1 year time charter

rates available

for each

type of

vessel over

the remaining

estimated life

of each

vessel, net

of commissions.

Historical

ten-year

blended

average

one-year

time

charter

rates

are

in

line

with

the

Company’s

overall

chartering strategy,

they reflect the

full operating history

of vessels of

the same type

and particulars with

the Company’s

operating fleet

and they

cover at

least a

full business

cycle, where

applicable. When the

10

-year average of historical 1 year time charter rates is

not available for a type of vessels, the Company

uses the average of historical 1 year time charter rates

of the available period. Other assumptions used in

developing estimates of

future undiscounted cash

flow are charter rates

calculated for the

fixed days using

the

fixed

charter

rate

of

each

vessel

from

existing

time

charters,

the

expected

outflows

for

scheduled

vessels’ maintenance; vessel

operating expenses; fleet

utilization, and the

vessels’ residual value

if sold

for scrap.

Assumptions are

in line

with the

Company’s historical

performance and

its expectations

for future

fleet

utilization

under

its

current

fleet

deployment

strategy.

This

calculation

is

then

compared

with

the

vessels’ net book

value plus unamortized deferred

costs. The difference

between the carrying amount

of

the vessel plus

unamortized deferred costs

and their fair

value is recognized

in the Company's

accounts

as impairment loss.

The Company’s impairment assessment did not result in the

recognition of impairment

on any vessel and

therefore

no

impairment loss was identified or recorded in 2023, 2022

and 2021.

For property

and equipment,

the Company

determines undiscounted

projected net

operating cash

flows

by

considering

an

estimated

monthly

rent

the

Company

would

have

to

pay

in

order

to

lease

a

similar

property, during the useful

life of the

building. No

impairment loss

was identified or

recorded for

2023,

2022

and 2021 and

the Company has

not identified any

other facts or

circumstances that

would require

the write

down of the value of its land or building in the near future.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-16

m)

Vessel Depreciation:

Depreciation is computed using the straight-line method over the estimated

useful life

of the

vessels, after

considering the

estimated salvage

(scrap) value.

Each vessel’s

salvage

value is equal

to the product

of its lightweight tonnage

and estimated scrap

rate. Management estimates

the useful life of

the Company’s vessels to

be

25 years

from the date of

initial delivery from the

shipyard.

Second-hand vessels are depreciated from the date of their acquisition through their remaining estimated

useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its

remaining

useful

life

is

adjusted

at

the

date

such

regulations

are

adopted.

Effective July 1, 2023, the

Company changed its estimated scrap rate of its vessels from $250 per lightweight ton to $400 per

lightweight ton, calculated based on the average demolition prices in different markets, during the last 15

years.

For the

period from

July 1,

2023 to

December 31,

2023, this

increase in

vessels’ salvage

values

resulted

in

decreased

depreciation expense,

increased

operating

income

and

increased

net

income

by

$

3,773

and increased earnings per share, basic and diluted, by $

0.04

.

n)

Deferred

Costs

:

The

Company

follows

the

deferral

method

of

accounting

for

dry-docking

and

special survey

costs whereby

actual costs

incurred are

deferred and

amortized on

a straight-line

basis over

the period

through the date

the next

survey is

scheduled to

become due. Unamortized

deferred costs of

vessels that are sold or impaired are written off and included in

the calculation of the resulting gain or loss

in the year of the vessel’s sale (Note 6) or impairment.

o)

Financing Costs

: Fees paid for obtaining finance liabilities, fees paid to lenders for obtaining new

loans,

new bonds, or refinancing existing ones

accounted as loan modification,

are deferred and recorded

as

a contra

to

debt. Other

fees

paid for

obtaining loan

facilities not

used at

the

balance sheet

date

are

deferred. Fees relating

to drawn loan

facilities are amortized

to interest and

finance costs over

the life of

the

using

the

effective

interest method

and

fees

incurred for

loan

facilities

not

used at

the

balance

sheet

date

are

amortized

using

the

straight-line

method

according

to

their

availability

terms.

Unamortized fees relating to

loans or bonds repaid

or repurchased or

refinanced as debt

extinguishment

are

written

off

in

the

period

the

repayment,

prepayment,

repurchase

or

extinguishment

is

made

and

included in the determination of

gain/loss on debt extinguishment.

Loan commitment fees are

expensed

in

the period

incurred, unless

they relate

to loans

obtained to

finance vessels

under construction,

in which

case, they are capitalized to the vessels’ cost.

p)

Concentration of

Credit

Risk

:

Financial instruments,

which potentially

subject

the

Company to

significant

concentrations

of

credit

risk,

consist

principally

of

cash

and

trade

accounts

receivable.

The

Company

places

its

temporary

cash

investments,

consisting

mostly

of

deposits,

with

various

qualified

financial

institutions

and

performs

periodic

evaluations

of

the

relative

credit

standing

of

those

financial

institutions that

are considered

in the

Company’s investment

strategy.

The Company

limits its

credit risk

with accounts receivable

by performing ongoing credit

evaluations of its customers’

financial condition and

generally

does

not

require

collateral

for

its

accounts

receivable

and

does

not

have

any

agreements

to

mitigate credit risk.

q)

Accounting

for

Revenues

and

Expenses:

Revenues

are

generated

from

time

charter

agreements which contain

a lease as

they meet the

criteria of a

lease under ASC

842. Agreements with

the

same

charterer

are

accounted

for

as

separate

agreements

according

to

their

specific

terms

and

conditions. All

agreements contain

a minimum

non-cancellable

period and

an extension

period at

the option

of the

charterer. Each

lease

term is

assessed at

the inception

of that

lease. Under

a time

charter agreement,

the charterer pays a daily hire

for the use of the vessel and

reimburses the owner for hold

cleanings, extra

insurance premiums for navigating in

restricted areas and damages caused

by the charterers. Revenues

from time charter

agreements providing

for varying annual

rates are accounted

for as operating

leases and

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-17

thus recognized

on a

straight-line basis

over the

non-cancellable rental

periods of

such agreements,

as

service is performed.

The charterer

pays to third

parties port, canal

and bunkers

consumed during

the term

of the

time charter

agreement, unless

they are

for the

account of

the owner,

in which

case, they

are included

in

voyage

expenses. Voyage

expenses

also

include commissions

on

time

charter

revenue

(paid to

the

charterers,

the

brokers

and

the

managers)

and

gain

or

loss

from

bunkers

resulting

mainly

from

the

difference in

the value

of bunkers

paid by

the Company

when the

vessel is

redelivered to

the Company

from the

charterer under

the vessel’s

previous time

charter agreement

and the

value of

bunkers sold

by

the Company when the vessel is delivered to a new charterer (Note 12). Under a time charter agreement,

the owner pays

for the operation

and the

maintenance of the

vessel, including

crew, insurance, spares and

repairs, which are recognized in operating expenses.

The Company, as lessor, has elected not to allocate

the

consideration

in

the

agreement

to

the

separate

lease

and

non-lease

components

(operation

and

maintenance of the

vessel) as their

timing and pattern

of transfer to

the charterer,

as the lessee,

are the

same

and the

lease component,

if accounted

for separately,

would be

classified as

an operating

lease.

Additionally,

the

lease

component

is

considered

the

predominant

component,

as

the

Company

has

assessed that

more

value is

ascribed to

the

vessel rather

than

to the

services provided

under the

time

charter contracts.

In time

charter agreements

apart from

the agreed

hire rate,

the Company

may be

entitled

to an

additional income,

such as

ballast bonus.

Ballast bonus

is paid

by charterers

for repositioning

the

vessel. The

Company analyzes

terms of

each contract

to assess

whether income

from ballast

bonus is

accounted together

with the

lease component

over the

duration of

the charter

or as

service component

under

ASC 606.

Deferred

revenue

includes cash

received

prior

to

the

balance sheet

date

for

which all

criteria to recognize as revenue have not been met.

r)

Repairs and Maintenance:

All repair and maintenance expenses

including underwater inspection

expenses are expensed in the year incurred. Such costs are included in vessel operating expenses in the

accompanying consolidated statements of operations.

s)

Earnings / (loss)

per Common Share:

Basic earnings /

(loss) per common

share are computed

by

dividing

net

income

/

(loss)

available

to

common

stockholders

by

the

weighted

average

number

of

common

shares

outstanding

during

the

year.

Shares

issuable

at

little

or

no

cash

consideration

upon

satisfaction

of

certain

conditions,

are

considered

outstanding

and

included

in

the

computation

of

basic

earnings/(loss) per share

as of the date

that all necessary

conditions have been

satisfied. Diluted earnings

per common

share, reflects the

potential dilution that

could occur

if securities or

other contracts to

issue

common stock were exercised.

t)

Segmental Reporting:

The Company

engages in

the operation

of dry-bulk

vessels which

has been

identified

as

one

reportable

segment.

The

operation

of

the

vessels

is

the

main

source

of

revenue

generation, the services

provided by the

vessels are similar

and they all

operate

under the same

economic

environment.

Additionally, the vessels

do not

operate in

specific geographic

areas, as

they trade

worldwide;

they do

not trade in

specific trade routes,

as their trading

(route and cargo)

is dictated by

the charterers;

and the Company does not evaluate the operating

results for each type of dry bulk vessels

(i.e. Panamax,

Capesize etc.)

for the

purpose of

making decisions

about allocating

resources and

assessing performance.

u)

Fair Value Measurements

: The Company classifies and discloses its assets and liabilities

carried

at fair value in

one of the

following categories: Level

1: Quoted market

prices in active

markets for identical

assets or liabilities;

Level 2: Observable

market-based inputs or

unobservable inputs that

are corroborated

by market data; Level 3: Unobservable inputs that are not corroborated

by market data.

v)

Share

Based Payments:

The

Company issues

restricted share

awards which

are

measured

at

their grant date fair value and are not subsequently re-measured.

That cost is recognized over the period

during which an employee is required to provide service in

exchange for the award—the requisite service

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-18

period (usually

the vesting

period). No

compensation cost

is recognized

for equity

instruments for

which

employees

do

not

render

the

requisite

service

unless

the

board

of

directors

determines

otherwise.

Forfeitures of

awards are

accounted for

when and

if they

occur.

If an

equity award

is modified

after the

grant date, incremental compensation cost will be recognized in an amount equal to the excess of the fair

value of the modified award over the fair value of the original award immediately

before the modification.

w)

Equity method

investments:

Investments in

common stock

in entities

over which

the Company

exercises

significant

influence but

does

not

exercise control

are

accounted for

by

the

equity method

of

accounting.

Under

this

method,

the

Company

records

such

an

investment

at

cost

(or

fair

value

if

a

consequence of deconsolidation)

and adjusts the carrying

amount for its share

of the earnings or

losses of

the entity subsequent to the

date of investment and reports the

recognized earnings or losses in

income.

Dividends received, if any,

reduce the carrying amount

of the investment and

are recorded as receivable

on

dividend

declaration.

When

the

carrying

value

of

an

equity

method

investment

is

reduced

to

zero

because of losses,

the Company does

not provide for

additional losses unless

it is

committed to provide

further

financial

support

to

the

investee.

The

Company

also

evaluates

whether

a

loss

in

value

of

an

investment that is other than a temporary decline should be recognized. Evidence of a loss in value might

include absence of an

ability to recover

the carrying amount of

the investment or inability

of the investee to

sustain an earnings

capacity that would

justify the carrying

amount of the

investment. For equity

method

investments

that

the

Company

has

elected

to

account

for

using

the

fair

value

option,

all

subsequent

changes in fair value are included in gain/loss on related party investments.

x)

Going concern:

Management evaluates, at each

reporting period, whether

there are conditions or

events that raise substantial doubt about the Company's ability to continue as a going concern within one

year from the date the financial statements are issued.

y)

Shares

repurchased

and

retired:

The

Company’s

shares

repurchased

for

retirement,

are

immediately cancelled and the Company’s share capital is accordingly reduced. Any excess of

the cost of

the shares

over their

par value is

allocated in additional

paid-in capital,

in accordance

with ASC 505-30-

30, Treasury Stock.

z)

Financial Instruments,

credit losses

: At each

reporting date, the

Company evaluates its

financial

assets individually for credit

losses and presents such

assets in the

net amount expected to

be collected

on such financial asset. When financial assets present similar risk characteristics, these are evaluated on

a

collective

basis.

When

developing

an

estimate

of

expected

credit

losses,

the

Company

considers

available information

relevant to assessing

the collectability

of cash

flows such

as internal

information, past

events,

current

conditions

and

reasonable

and

supportable

forecasts.

As

of

December

31,

2021,

the

Company

assessed

the

financial

condition

of

DWM,

changed

its

estimate

on

the

recoverability

of

its

receivable due

from DWM

relating to

the fine

paid by

the Company

on behalf

of DWM

(Notes 4(a))

and

determined

that

part

of

the

amount

may

not

be

recoverable.

As

a

result,

the

Company

recorded

as

of

December 31, 2021, an allowance for

credit losses amounting to $

300

, based on probability of default

as

there

was

no

record.

The

allowance

for

credit

losses

was

included

in

other

operating

(income)/loss in the 2021 accompanying

consolidated statements of income.

The allowance was reversed

in 2022 as

the full amount

was recovered and its

reversal is included

in other operating

(income)/loss” in

the

2022

accompanying

consolidated

statements

of

operations.

No

credit

losses

were

identified

and

recorded in 2023 and 2022.

aa)

Financial

Instruments,

Investments-Equity

Securities,

Recognition

and

Measurement

:

The

Company

initially

recognizes

equity

securities

at

the

transaction

price.

Equity

Investments

with

readily

determinable fair values are subsequently measured at fair value through net

income. Unrealized holding

gains

and

losses

for

these

securities

are

recorded

in

earnings.

According

to

ASC

321-10-35-2,

the

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-19

Company has

elected to

measure equity

securities without

a readily

determinable fair

value, that

do not

qualify for

the practical

expedient in

ASC 820

Fair Value Measurement

to estimate

fair value

using the

NAV

per share (or

its equivalent),

at its cost

minus impairment,

if any. If the Company

identifies observable

price

changes in orderly

transactions for

the identical or

a similar investment

of the same

issuer, it shall measure

equity securities at fair value as

of the date that the observable transaction occurred.

The Company shall

continue to

apply this

measurement until

the investment

does not

qualify to

be measured

in accordance

with

this

paragraph.

At

each

reporting

period,

the

Company

reassesses

whether

an

equity

investment

without a readily determinable fair value qualifies to

be measured in accordance with this paragraph. The

Company may

subsequently elect to

measure equity

securities at fair

value and

the election to

measure

securities at

fair value

shall be

irrevocable. Any

resulting gains

or losses on

the securities

for which

that

election is

made shall

be recorded

in earnings

at the

time

of the

election. At

each reporting

period, the

Company also evaluates indicators such

as the investee’s performance and

its ability to continue as

going

concern

and

market

conditions,

to

determine

whether

an

investment

is

impaired

in

which

case,

the

Company will estimate the fair value of the investment to determine

the amount of the impairment loss.

ab)

Non-monetary transactions

and spinoffs:

Non-monetary transactions

are recorded

based on

the

fair values of

the assets (or

services) involved unless the

fair value of

neither the asset received,

nor the

asset relinquished is determinable

within reasonable limits. Also, under

ASC 845-10-30-10 Nonmonetary

Transactions, Overall,

Initial Measurement,

Nonreciprocal

Transfers with

Owners and

ASC 505-60

Spinoffs

and Reverse Spinoffs,

if the pro-rata

spinoff of a

consolidated subsidiary or equity

method investee does

not meet the definition of a business under ASC 805, the nonreciprocal transfer of nonmonetary assets is

accounted for at fair value, if the fair value of the nonmonetary asset distributed is objectively measurable

and

would

be

clearly

realizable

to

the

distributing

entity

in

an

outright

sale

at

or

near

the

time

of

the

distribution, and

the spinor

recognizes a

gain or

loss for

the difference

between the

fair value

and book

value of the

spinee. A transaction

is considered pro

rata if

each owner receives

an ownership interest

in

the transferee in proportion to

its existing ownership interest in

the transferor (even if the transferor

retains

an ownership interest

in the transferee).

In accordance with

ASC 805 Business

Combinations: Clarifying

the Definition of a

Business, if substantially all of

the fair value of

the gross assets distributed

in a spinoff

are concentrated in

a single identifiable

asset or group

of similar identifiable

assets, then the

spinoff of a

consolidated

subsidiary

does

not

meet

the

definition

of

a

business.

Other

nonreciprocal

transfers

of

nonmonetary assets

to owners

are accounted

for at

fair value

if the

fair value

of the

nonmonetary asset

distributed is objectively measurable and would be clearly

realizable to the distributing entity in an outright

sale at or near the time of the distribution.

ac)

Contracts in

entity’s equity:

Under ASC

815-40 contracts that

require settlement

in shares

are

considered equity

instruments, unless

an event

that

is not

in the

entity’s

control would

require net

cash

settlement.

Additionally,

the

entity

should

have

sufficient

authorized

and

unissued

shares,

the

contract

contains an explicit

share limit, there

is no requirement

to net cash

settle the contract

in the event

the entity

fails

to make

timely filings with

the

Securities and

Exchange Commission

(SEC) and

there are

no cash

settled top-off

or make-whole provisions.

The Company follows

the provision of

ASC 480 “Distinguishing

Liabilities from

Equity” and

ASC 815

“Derivatives and

Hedging” to

determine the

classification of

certain

freestanding financial instruments as permanent equity, temporary equity or liability.

The Company, when

assessing the accounting of the warrants and

the pre-funded warrants, takes into consideration ASC 480

to determine whether the warrants and the pre-funded warrants should be classified

as permanent equity

instead of temporary equity

or liability. The Company further analyses

the key features of

the warrants and

the pre-funded warrants and examines whether these fall

under the definition of a derivative

according to

ASC 815 applicable guidance or whether certain of these features affect the classification. In cases when

derivative accounting is deemed inappropriate, no bifurcation of

these features is performed.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-20

ad)

Guarantees:

Guarantees

issued

by

the

Company,

excluding

those

that

guarantee

its

own

performance, are recognized at fair

value at the time the

guarantees are issued, or upon deconsolidation

of

a

subsidiary.

A

liability

for

the

fair

value

of

the

obligation

undertaken

in

issuing

the

guarantee

is

recognized. If it becomes probable that

the Company will have to perform

under a guarantee (Note 10(c)),

the Company

will recognize an

additional liability if

the amount

of the

loss can

be reasonably

estimated.

The

recognition

of

fair

value is

not

required for

certain

guarantees such

as

the

parent's guarantee

of

a

subsidiary's debt

to a

third party.

For those

guarantees excluded

from the

above guidance

requiring the

fair value recognition provision of the liability, financial statement disclosures of such items are made.

3.

Transactions with related parties

a)

Altair Travel Agency S.A. (“Altair”):

The Company uses the

services of an affiliated

travel agent,

Altair,

which is

controlled by

the Company’s

Chairman of

the Board

Mr.

Palios and

the Company’s

CEO

Mrs. Semiramis

Paliou. Travel

expenses for

2023, 2022

and 2021

amounted to

$

2,525

, $

2,644

and $

2,210

,

respectively,

and

are

mainly

included

in

vessel

operating

expenses

and

general

and

administrative

expenses in the accompanying consolidated

financial statements. As of December

31, 2023 and 2022, an

amount of $

62

and $

136

, respectively,

was payable to Altair

and is included in

“Due to related parties”

in

the accompanying consolidated balance sheets.

b)

Steamship Shipbroking Enterprises Inc. or

Steamship:

Steamship is a company controlled by

the Company’s

CEO Mrs.

Semiramis Paliou

and provides

brokerage services

to DSI

for a

fixed monthly

fee plus commission on

the sale of vessels, pursuant

to a Brokerage Services

Agreement. For 2023, 2022

and 2021

brokerage fees

amounted to

$

3,900

, $

3,309

and $

3,309

, respectively, and

are included

in general

and

administrative expenses

in

the

accompanying consolidated

statements of

income.

For

2023, 2022,

and 2021, commissions to Steamship amounted to $

906

, $

1,219

and $

712

, respectively and are included

in gain on the sale of vessels,

vessel cost and equity method investments.

As of December 31, 2023 and

2022, an amount of $

697

and $

0

, respectively, was due to Steamship.

4.

Equity Method Investments

a)

Diana Wilhelmsen Management Limited, or DWM:

DWM is a joint venture between

Diana Ship

Management Inc., a

wholly owned subsidiary

of DSI, and

Wilhelmsen Ship Management

Holding AS, an

unaffiliated third party,

each holding

50

% of DWM. As of December 31, 2023 and 2022, the investment in

DWM

amounted to

$

734

and

$

506

and

is

included

in

equity

method

investments

in

the

accompanying

consolidated balance

sheets. In

2023 and

2022, the

investment in

DWM resulted

in a

gain of

$

228

, and

$

894

, respectively, and in

2021, resulted

in a

loss of

$

333

, included

in loss

from equity

method investments

in the accompanying consolidated statements of income.

From October

8, 2019

until May 24,

2021, DSS outsourced

the management of

certain vessels to

DWM

for

which

DSS

was

paying

a

fixed

monthly

fee

per

vessel

and

a

percentage

of

those

vessels’

gross

revenues.

On

May

24,

2021,

the

management

of

the

same

vessels

was

transferred

to

DWM

directly,

whereas the vessel

owning companies of

these vessels entered

into new management

agreements with

DWM under

which they pay

a fixed monthly

fee and

a percentage of

their gross revenues.

Management

fees

to

DWM

in

2023,

2022

and

2021

amounted

to

$

1,313

,

$

511

and

$

1,432

,

respectively,

and

are

separately presented as management fees to related party in the accompanying consolidated statements

of income. Additionally, in

2023 and 2022,

the Company paid

to DWM management

fees amounting

to $

19

and

$

272

,

respectively,

included

in

advances

for

vessel

acquisitions

and

vessels,

net,

relating

to

the

management of

four Ultramax vessels

the Company

assigned to DWM

with new

management agreements

and incurred

during the

predelivery period

of the

vessels. Commissions

for 2023,

2022 and

2021 amounted

to $

390

, $

162

and $

200

, respectively,

and are

included in

voyage expenses

(Note 12).

As of

December

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-21

31, 2023

and 2022, there

was an amount

of $

25

and $

216

due from

DWM, included in

due from related

parties in the accompanying consolidated balance sheets.

b)

Bergen Ultra

LP, or Bergen:

Bergen is

a limited

partnership which

was established

for the

purpose

of acquiring,

owning, chartering

and/or operating

a vessel.

Bergen was

a wholly

owned subsidiary

of Diana,

which

on

February

14,

2023,

signed

a

Memorandum

of

Agreement

to

acquire

for

$

27,900

,

from

an

unrelated third-party an Ultramax

dry bulk vessel, delivered

on April 10, 2023.

On March 30, 2023,

Bergen

entered into a loan agreement with Nordea for a $

15,400

loan to finance part of the purchase price of the

vessel.

On

the

same

date,

the

Company

entered

into

a

corporate

guarantee

with

Nordea

to

secure

Bergen’s

obligations

under

the

loan.

On

April

28,

2023,

the

Company

entered

into

(i)

an

investment

agreement with an unrelated

third party to acquire

75

% of the limited

partnership interests, for

$

11,025

; (ii)

an amended limited partnership agreement under which the

Company acts as the General Partner of

the

partnership through its wholly owned subsidiary Diana General Partner Inc.; (iii)

an administrative service

agreement under

which DSS

provides administrative

services to

Bergen for

an annual

fee of

$

15

; (iv)

a

commission

agreement

under

which

the

Company

is

paid

a

commission

of

0.8

%

per

annum,

on

the

outstanding

balance

of

the

loan,

as

compensation

for

the

guarantee

it

provided

to

Nordea

and

(v)

a

convertible loan agreement

for $

27,900

plus other expenses,

with Bergen under

which Bergen would

have

to repay all expenditures made by the Company for the acquisition of the vessel. Pursuant to the terms of

the

convertible

loan,

on

April

28,

2023,

the

Company

received

from

Bergen

$

25,189

in

cash

while

an

amount

of

$

3,675

was

converted

into

partnership

interests

in

Bergen,

representing

25

%

of

the

total

partnership interests.

Upon the provisions of

the amended partnership

agreement, the general

partner irrevocably delegated

the

authority

to

Bergen’s

board

of

directors

to

have

the

power

to

oversee

and

direct

the

operations,

management and policies of Bergen. The Company evaluated

its variable interests in Bergen under ASC

810 and

concluded that

Bergen is

a VIE

and that

the Company

does not

individually have

the power

to

direct the

activities of the

VIE that most

significantly affect the

partnership’s performance. From

April 28,

2023

the

Company no

longer retains

the

power

to

control the

board

of directors.

As

of

the

same

date,

Bergen has been considered as an affiliate entity and not as a controlled subsidiary of the Company.

The

Company

accounted

for

the

deconsolidation

of

Bergen

in

accordance

with

ASC

610

and

the

retained

noncontrolling interest

of

25

% was

accounted for

under the

equity method

due to

the Company’s

significant

influence over Bergen.

On the

date of

deconsolidation,

the Company

measured the

fair value

of the

retained noncontrolling

interest

at

$

4,519

through Level

2 inputs

of the

fair

value hierarchy.

The Company

in order

to

calculate the

fair

value of its

25

% interest in accordance with ASC 610,

took into consideration the fair value of the

distinct

assets and liabilities

of Bergen on the date

of the deconsolidation.

This resulted in gain

on deconsolidation

amounting to

$

844

, separately

presented in

the accompanying

2023 consolidated

statement of

income,

being the

difference between the

fair value of

the retained noncontrolling

interest plus the

carrying value

the liabilities assumed by Bergen and the carrying value of

the assets derecognized.

For 2023,

the investment

in Bergen

resulted in

gain of

$

181

and is

included in

loss from

equity method

investments in the 2023 accompanying consolidated statement of income.

As of December 31, 2023, the

investment

in

Bergen

amounted

to

$

4,700

and

is

included

in

equity

method

investments

in

the

accompanying

2023

consolidated

balance

sheet.

Also,

for

2023,

income

from

management

fees

from

Bergen amounted to $

10

, included in time charter revenues and income from the commission paid on the

loan

guarantee

amounted

to

$

28

,

included

in

interest

and

other

income

in

the

2023

accompanying

consolidated

statement

of

income.

As

of

December

31,

2023,

there

was

an

amount

of

$

443

due

from

Bergen included in due from related parties, current and non-current.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-22

c)

Windward Offshore

GmbH,

or Windward:

On November

7, 2023,

the Company

through its

wholly

owned subsidiary Diana

Energize Inc., or Diana

Energize, entered into a

joint venture agreement, with

two

unrelated companies

to form Windward

Offshore GmbH &

Co. KG or

Windward, based

in Germany, for the

purpose of

establishing and

operating an

offshore wind

vessel company

with the

aim of

becoming a

leading

provider

of

service

vessels

to

the

growing

offshore

wind

industry

and

acquire

certain

vessels.

Diana

Energize agreed to

contribute

25,000,000

Euro, being

45.45

% of the limited

partnership’s capital and as

of

December

31,

2023,

the

investment

amounted

to

$

10,063

mainly

consisting

of

advances

to

fund

the

construction of

two

vessels and working capital.

For 2023, the

investment in Windward resulted

in a loss

of $

671

and is

included in

loss from

equity method

investments in

the 2023

accompanying consolidated

statement of income.

d)

Cohen Global Maritime

Inc., or Cohen:

On September 12, 2023,

the Company through

its wholly

owned subsidiary Cebu Shipping Company Inc., or Cebu, acquired

24

% of Cohen, a company

organized

in

the

Republic

of

the

Philippines

for

the

purpose

of

engaging

in

the

manning

agency

business.

As

of

December 31, 2023, the Company’s investment in Cohen amounted to $

272

, consisting of advances paid

to acquire the license required to engage in the manning agency

business.

5.

Investments in related parties and other

a)

OceanPal Inc., or

OceanPal:

As of December

31, 2023 and

2022, the Company

was the holder

of

500,000

Series B Preferred

Shares and

207

and

10,000

, respectively, of Series C Convertible

Preferred

Shares of OceanPal.

Series

B

preferred

shares

entitle

the

holder

to

2,000

votes

on

all

matters

submitted

to

vote

of

the

stockholders of the

Company,

provided however,

that the total

number of votes

shall not exceed

34

% of

the total

number of

votes, provided

further, that the

total number

of votes

entitled to

vote, including

common

stock or any other voting security,

would not exceed

49

% of the total number of votes. Series B Preferred

Shares have no dividend or distribution rights.

Series C preferred shares do not have voting rights unless related to amendments of the Articles of

Incorporation that adversely alter the preference, powers or rights of the Series C Preferred Shares or to

issue Parity Stock or create or issue Senior Stock.

Series C preferred

shares have a

liquidation preference

equal

to

the

stated

value

of

$

1,000

and

are

convertible

into

common

stock

at

the

Company’s

option

commencing upon the first anniversary of the issue date, at a conversion price equal to the lesser of

$

6.5

and the

10-trading day

trailing VWAP

of OceanPal’s

common shares,

subject to

adjustments. Dividends

on

each

share

of

Series

C

Preferred

Shares

are

cumulative

and

accrue

at

the

rate

of

8

%

per

annum.

Dividends are payable in cash or, at OceanPal’s election, in kind.

On October 17,

2023, the Company

converted

9,793

of the

10,000

Series C Preferred

shares of OceanPal

to

3,649,474

common shares, having a

fair value of

$

9,160

determined through Level

1 inputs of

the fair

value hierarchy, based on

the closing

price of

OceanPal’s common shares

on the

date of

conversion.

Upon

conversion the

Company realized

a gain

of $

1,742

,

being the

difference between

the

book value

of the

9,793

Series C Preferred shares and the

fair value of the common shares

acquired and is included in gain

on

investments,

separately

presented

in

the

accompanying

consolidated

statements

of

income. Following

the conversion,

the Company is

the beneficial

owner of

49

% of the

outstanding common

stock of

OceanPal and

since the

shares are

listed at

NASDAQ, the

Company elected

to account

for its

common stock ownership in OceanPal at fair value.

As

of

December

31,

2023,

the

Company’s

investment

in

the

common

stock

of

OceanPal

amounted

to

$

8,138

, being the

fair value of

OceanPal’s common shares

on that date,

determined through

Level 1 inputs

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-23

of the

fair value

hierarchy, and the

Company recorded

an unrealized

loss on

investment of

$

1,022

, included

in gain on

related party investments, separately presented

in the accompanying consolidated

statements

of income.

As the

Company applied

the fair

value option

to its

investment in

the common

shares of

OceanPal that

would otherwise be accounted for under the

equity method of accounting, it also applied

fair value to all of

its financial

interests in

OceanPal, being

the

Series B

preferred shares

and Series

C preferred

shares which

until then, the Company applied

the guidance for equity securities

without readily determinable fair

values.

As of December 31,

2023 and 2022, the

Company’s investment in Series

B preferred shares and

Series C

preferred

shares,

amounted

to

$

180

and

$

7,744

,

respectively,

including

$

3

and

$

169

,

respectively,

dividends

receivable on

the

Series

C

preferred shares,

and

are

separately presented

in

investments in

related parties in

the accompanying consolidated

balance sheets. As

of December 31,

2023, the Company

recorded a gain of $

21

, presented in gain on

related party Investments, being the difference

between the

book

value

of

the

investments

and

the

fair

value

determined

through

Level

3

inputs

of

the

fair

value

hierarchy,

by using

the income

approach, taking into

account the

present value of

the future

cash flows,

the holder of shares would expect to receive from holding the equity instrument.

On

September

20,

2022,

the

Company

acquired

25,000

OceanPal

Cumulative

Convertible

Series

D

Preferred Shares, par value $

0.01

per share, as part of the

consideration provided to the Company

for the

sale of

Baltimore to OceanPal, pursuant

to a Memorandum

of Agreement dated

June 13, 2022

(Note 6).

Similarly,

on February

8, 2023,

the Company

acquired

13,157

shares of

OceanPal Series

D Cumulative

Convertible Preferred

Shares,

as part

of the

consideration provided

to the

Company for

sale of

Melia to

OceanPal, pursuant to a Memorandum of Agreement dated February

1, 2023 (Note 6).

Series D preferred shares

were convertible into

common stock at

the holder’s option,

at a conversion

price

equal to

the 10-trading

day trailing

VWAP of OceanPal’s

common shares,

provided however

that the

holder

would not beneficially

own greater than

49

% of OceanPal’s

outstanding shares of common

stock. Series

D preferred

shares have

no voting

rights; dividends

were cumulative,

accruing at

the rate

of

7

% per

annum,

payable in cash or,

at OceanPal’s election, in PIK shares (Series D Preferred shares issued to

the holder

in lieu of cash dividends); and they had a liquidation preference equal

$

1,000

per share.

On the date of issuance,

the Company measured its investments

on Series D preferred shares

at their fair

value and elected to subsequently

measure such investments in accordance

with paragraph ASC 321-10-

35-2 (Note 2(aa)). The

fair value of

Series D Preferred

Shares was determined

by taking into

consideration

a third-party valuation which was based on the income approach, taking into account the present value of

the future cash flows the Company expects to receive from

holding the equity instrument.

On

December

15,

2022,

the

Company

distributed

the

25,000

Series

D

Preferred

Shares

as

non-cash

dividend to its shareholders of record on November 28, 2022. The shareholders had the option to receive

Series

D

Preferred

Shares

or

common

shares

of

OceanPal

at

the

conversion

rate

determined

before

distribution

according

to

the

terms

of

the

designation

statement.

The

Company

accounted

for

the

transaction as

a nonreciprocal

transfer with

its owners

in accordance

with ASC

845 and

measured their

fair

value

on

the

date

of

declaration

at

$

18,189

.

The

fair

value

of

the

Series

D

Preferred

Shares

was

determined by using the income approach, taking into account the

present value of the future cash flows,

the holder

of shares

would expect

to receive

from holding

the equity

instrument. This

resulted in

gain of

$

589

, being

the difference

between the

fair value

and the

carrying value

of the

investment and

is separately

presented as Gain on related party investments in the accompanying

consolidated statements of income.

On June 9, 2023, the Company distributed the

13,157

Series D Preferred Shares as a non-cash dividend

to

its

shareholders

of

record

on

April

24,

2023.

The

Company

accounted

for

the

transaction

as

a

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-24

nonreciprocal

transfer

with

its

owners

in

accordance

with

ASC

845

and

measured

the

fair

value

of

the

preferred shares

on the

date of

declaration at

$

10,761

. The

fair value

of the

Series D

Preferred Shares

was determined

by using

the income

approach, taking

into account

the present

value of

the future

cash

flows, the holder

of shares would

expect to receive

from holding

the equity

instrument. This

resulted in gain

of

$

761

,

being

the

difference

between

the

fair

value

and

the

carrying

value

of

the

investment

and

is

separately

presented

as

gain

on

investment

in

the

2023

accompanying

consolidated

statement of income.

For 2023,

2022 and

2021, dividend

income from

the Series

C and

Series D

OceanPal preferred

shares

amounted to $

801

, $

917

and $

69

, respectively, included in interest and

other income in the

accompanying

consolidated statements of income.

b)

Investment in

equity securities:

During 2023,

the Company

acquired equity

securities of

an entity

listed in the NYSE which as of December

31, 2023 had a fair value of $

20,729

. The equity securities were

initially recorded

at cost

amounting to

$

17,916

and measured

subsequently at

fair value,

since their

fair

values were

readily determinable,

determined through

Level 1

of the

fair value

hierarchy.

The securities

are considered

marketable securities

that are

available to

be converted

into cash

to fund

current operations

and classified in current

assets in the accompanying

2023 consolidated balance

sheet. Unrealized gain

on

the investment amounted to $

2,813

and is separately presented in unrealized gain

on equity securities in

the accompanying consolidated statements of income.

6.

Advances for vessel acquisitions and Vessels, net

Vessel Acquisitions

On July

15, 2021

the Company

agreed to

acquire from

an unaffiliated

third party, the

2011 built Kamsarmax

dry

bulk

vessel

Leonidas

P.C.

,

for

a

purchase

price

of

$

22,000

,

delivered

on

February

16,

2022.

The

Company incurred $

927

of additional predelivery expenses.

On December 3,

2021, the Company

agreed to acquire from

an unaffiliated third

party,

the Capesize dry

bulk vessel

Florida,

for a purchase price of $

59,275

, delivered on March 29, 2022. The Company incurred

$

1,504

of additional predelivery expenses.

On August 10,

2022, the Company

entered into a

master agreement with

Sea Trade Holdings Inc.

(or “Sea

Trade”),

an unaffiliated

third party,

to acquire

nine Ultramax

vessels for

an aggregate

purchase price

of

$

330,000

, of

which $

220,000

would be

paid in

cash and

$

110,000

through an

aggregate of

18,487,393

newly issued

common shares

of the

Company, issuable on

the delivery

of each

vessel. In

the fourth

quarter

of 2022,

the Company

took delivery

of

eight

vessels for

$

195,810

in cash

and

16,453,780

newly issued

common shares having a

fair value of $

67,909

(Notes 11

and 16). The Company also

incurred $

4,364

of

additional predelivery expenses.

On January

30, 2023,

the Company

took delivery

of the

ninth vessel

for $

23,955

in cash

and

2,033,613

newly issued common shares, having

a fair value of

$

7,809

. Part of the

purchase price of the vessel

and

additional

predelivery

expenses

were

already

paid

in

2022

and

presented as

of

December 31,

2022

in

advances for vessel

acquisitions in the

accompanying consolidated

balance sheet.

The Company incurred

$

555

of additional predelivery expenses.

The value

of the

shares issued

in 2022

and in

2023, was

determined through

Level 1

inputs of

the fair

value

hierarchy based on the closing price of the

Company’s common stock on the date of issuance which

was

the date of delivery of each vessel.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-25

On February 14, 2023, the Company signed a Memorandum of Agreement to acquire from an unaffiliated

third-party an

Ultramax dry

bulk vessel

for a

purchase price

of $

27,900

. On

April 28,

2023, the

vessel’s

ship owning company

was deconsolidated

from the Company’s

financial statements due

to the Company’s

loss of control

described in

note 4(b) and

the net book

value of

the vessel amounting

to $

27,908

is included

in both vessel acquisitions and vessel disposals.

Vessel Disposals

On June

13, 2022,

the Company

sold to

OceanPal, the

vessel

Baltimore

, for

a sale

price of

$

22,000

of

which $

4,400

in cash

and $

17,600

in

25,000

newly issued

OceanPal Series

D Preferred

Shares

(Note

5(a)). On the date of the agreement, the vessel was classified as held for sale according to the provisions

of

ASC

360,

as

all

criteria

required

for

this

classification

were

met,

at

carrying

value

of

$

16,722

and

unamortized deferred costs of $

41

, measured at the lower of

carrying value and fair value

(sale price) less

costs to sell. The vessel was delivered to OceanPal on

September 20, 2022 and the sale resulted in gain

amounting to $

2,850

, included in gain on sale of vessels in the accompanying consolidated statements of

income.

On

January

23,

2023,

the

Company

sold

to

an

unrelated

third

party

the

vessel

Aliki

for

a

sale

price

of

$

15,080

and

on February

1,

2023, the

Company,

sold to

OceanPal the

vessel

Melia

for a

sale

price of

$

14,000

, of

which $

4,000

in cash

and $

10,000

in

13,157

newly issued

OceanPal Series

D Preferred

Shares

(Note 5(a)).

On the

date of the

agreements, the vessels,

having an

aggregate carrying value

of $

23,198

and unamortized deferred

costs of $

405

were classified as

held for sale,

measured at carrying

value which

was

the

lower

of

their

carrying

value

and

fair

value

(sale

price)

less

costs

to

sell.

Both

vessels

were

delivered to their new owners on

February 8, 2023. The sale of the

vessels resulted in gain amounting to

$

4,995

, included in gain on sale of vessels in the accompanying consolidated

statements of income.

On October

5, 2023,

the Company

sold to

an unrelated

third party

the vessel

Boston for

a sale

price of

$

17,998

. The vessel was delivered to the buyer on

December 6, 2023 and the sale of the vessel resulted

in gain

of $

328

, included

in gain

on sale

of vessels

in the

accompanying

consolidated statements

of income.

The amounts reflected in Vessels, net in

the accompanying consolidated balance sheets are analyzed as

follows:

Vessel Cost

Accumulated

Depreciation

Net Book

Value

Balance, December 31, 2021

$

810,429

$

(166,979)

$

643,450

- Additions for vessel acquisitions and improvements

358,504

-

358,504

- Additions for improvements reclassified from other non-

current assets

1,370

-

1,370

- Vessel disposals

(29,175)

12,453

(16,722)

- Depreciation for the year

-

(36,986)

Balance, December 31, 2022

$

1,141,128

$

(191,512)

$

949,616

- Additions for vessel acquisitions and improvements

61,682

-

61,682

- Vessel disposals

(60,655)

21,688

(38,967)

- Vessel disposal due to deconsolidation

of subsidiary (Note

4(b))

(27,908)

-

(27,908)

- Depreciation for the year

-

(44,231)

Balance, December 31, 2023

$

1,114,247

$

(214,055)

$

900,192

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-26

Additions for vessel

improvements mainly

relate to the

implementation of ballast

water treatment and

other

works necessary

for the vessels

to comply with

new regulations

and be able

to navigate to

additional ports.

As of

December 31,

2022, an

amount of

$

1,370

was reclassified

to Vessels,

net from

other non-current

assets

and

ballast

water

treatment

equipment

paid

in

a

but

delivered on

the

vessels during the year ended December 31, 2022.

7.

Property and Equipment, net

The Company owns the land and building of its principal corporate offices in Athens, Greece and a plot of

a

land

of

which on

July 6,

2023,

DSS purchased

1/3

from

Alpha Sigma

Shipping

Corp,

a related

party

company,

for

the

purchase

price

of

$

1,208

and

became

its

sole

owner.

Other

assets

consist

of

office

furniture and equipment,

computer software and

hardware and vehicles.

The amount

reflected in “Property

and equipment, net” is analyzed as follows:

Property and

Equipment

Accumulated

Depreciation

Net Book

Value

Balance, December 31, 2021

$

28,269

$

(5,427)

$

22,842

- Additions in property and equipment

667

-

667

- Depreciation for the year

-

(546)

Balance, December 31, 2022

$

28,936

$

(5,973)

$

22,963

- Additions in property and equipment

2,006

-

2,006

- Depreciation for the year

-

(687)

Balance, December 31, 2023

$

30,942

$

(6,660)

$

24,282

8.

Long-term debt

The

amount of

long-term debt

shown in

the

accompanying consolidated

balance sheets

is

analyzed as

follows:

2023

2022

Senior unsecured bond

119,100

125,000

Secured long-term debt

397,857

405,120

Total long-term

debt

$

516,957

$

530,120

Less: Deferred financing costs

(6,314)

(7,609)

Long-term debt, net of deferred financing costs

$

510,643

$

522,511

Less: Current long-term debt, net of deferred financing

costs,

current

(49,512)

(91,495)

Long-term debt, excluding current maturities

$

461,131

$

431,016

Senior Unsecured Bond

:

On

June 22, 2021

, the

Company issued a

$

125,000

senior unsecured bond

maturing in

June 2026. The

bond ranks ahead of subordinated capital and ranks the

same with all other senior unsecured obligations

of

the

Company

other

than

obligations

which

are

mandatorily

preferred

by

law.

Entities

affiliated

with

executive officers

and directors of

the Company purchased

an aggregate of

$

21,000

principal amount of

the bond.

The bond

bears interest

at a

US Dollar

fixed-rate coupon

of

8.375

% and

is payable

semi-annually

in arrears in June

and December of each

year. The

bond is callable in

whole or in part

in June 2024 at

a

price

equal

to

103.35

%

of

nominal

value;

between

June

2025

to

December

2025

at

a

price

equal

to

101.675

% of nominal value and after December 2025 at a price

equal to

100

% of nominal value. On June

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-27

29,

2023,

the

Company repurchased

$

5,900

nominal value

of

the

bond

for

$

5,851

.

In

this

respect, the

Company

recognized

an

amount

of

$

159

as

loss

on

debt

extinguishment,

representing

the

difference

between the

reacquisition price of

$

5,851

and the

net carrying

amount of the

debt being

extinguished of

$

5,900

less deferred

financing fees

of $

208

. The

bond includes

financial and

other covenants

and is

trading

at Oslo Stock Exchange under the ticker symbol “DIASH02”.

Secured Term Loans:

Under the

secured term

loans outstanding

as of

December 31,

2023,

33

vessels of

the Company’s

fleet

are

mortgaged

with

first

preferred

or

priority

ship

mortgages,

having

an

aggregate

carrying

value

of

$

699,014

.

Additional

securities

required

by

the

banks

include

first

priority

assignment

of

all

earnings,

insurances, first assignment of time charter

contracts that exceed a certain

period, pledge over the shares

of

the

borrowers,

manager’s

undertaking

and

subordination

and

requisition

compensation

and

either

a

corporate

guarantee

by

DSI

(the

“Guarantor”)

or

a

guarantee

by

the

ship

owning

companies

(where

applicable), financial covenants, as well as operating account assignments. The lenders may also require

additional

security

in

the

future

in

the

event

the

borrowers

breach

certain

covenants

under

the

loan

agreements.

The

secured

term

loans

generally

include

restrictions

as

to

changes

in

management

and

ownership of the vessels, additional indebtedness, as well as minimum requirements regarding hull cover

ratio and minimum liquidity

per vessel owned by the

borrowers, or the Guarantor,

maintained in the bank

accounts of the borrowers, or the Guarantor.

As of December 31, 2023 and 2022, minimum cash

deposits required to be maintained at all times under

the Company’s

loan facilities,

amounted to

$

20,000

and $

21,000

, respectively

and are

included in

restricted

cash, non-current in

the accompanying consolidated

balance sheets. Furthermore,

the secured term

loans

contain

cross

default

provisions

and

additionally

the

Company

is

not

permitted

to

pay

any

dividends

following the occurrence

of an event

of default. In

2023 and 2022

, the weighted

average interest rate

of

the secured term loans was

7.3

% and

3.8

%, respectively.

As of December

31, 2023 and

2022, the Company

had the following

agreements with banks,

either as a

borrower or as a guarantor, to guarantee the loans of its subsidiaries:

BNP Paribas (“BNP”):

On December 19, 2014, the Company

drew down $

53,500

under a secured loan

agreement, to

finance part of

the acquisition cost

of the

G. P.

Zafirakis

and the

P.

S. Palios

maturing on

November 30, 2021

. The agreement was refinanced on June 29,

2020, to extend the maturity to

May 19,

2024

. The loan was repayable in equal semi-annual instalments of approximately $

1,574

and a balloon of

$

23,596

payable together

with the

last instalment.

The refinanced

loan bore

interest at

LIBOR plus

a margin

of

2.5

%.

On July 16, 2018, the Company drew down $

75,000

under a secured loan agreement with BNP. The loan

was

repayable

in

consecutive

quarterly

instalments

of

$

1,562.5

and

a

balloon

instalment

of

$

43,750

payable together with the last instalment on

July 17, 2023

. The loan bore interest at LIBOR plus a margin

of

2.3

%.

In

April 2023,

both loans

were refinanced

through a

new loan

facility with

Danish Ship

Finance and

the

outstanding balance of both loans, amounting to

$

75,193

was prepaid in full and the Company

recorded a

loss on debt extinguishment amounting to $

107

.

Nordea Bank AB,

London Branch (“Nordea”):

On March

19, 2015, the

Company drew down

$

93,080

under a secured

loan agreement,

maturing on

March 19, 2021

. The loan agreement

was amended on

May

7, 2020,

and supplemented

on July

29, 2021,

with an

additional borrowing

of $

460

. In

July 2022

and in

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-28

February 2023, the Company prepaid an amount of $

4,786

and $

8,134

, respectively, following the sale of

vessels. On June 20, 2023,

the Company entered into a

new loan agreement with Nordea

to refinance the

outstanding

balance of

the

existing

loan

amounting to

$

20,934

.

On

June

27,

2023,

the

Company

drew

down

$

22,500

and

prepaid

in

full

the

outstanding

balance

of

$

20,934

and

recorded

a

loss

on

debt

extinguishment

amounting to

$

220

.

The

new

loan

is

repayable

in

twenty

equal

quarterly

instalments of

$

1,125

and bears interest at term SOFR plus a margin of

2.25

%. The loan matures on

June 27, 2028

.

On September

30, 2022,

the Company

entered into

a $

200

million loan

agreement to

finance the

acquisition

price of

9 Ultramax

vessels. The

Company drew

down $

197,236

under the

loan, in

tranches for

each vessel

on their

delivery to

the Company

but prepaid

$

21,937

in December

2022 due

to a

vessel sale

and leaseback

transaction. The loan is repayable in equal

quarterly

instalments of an aggregate amount of

$

3,719

, and a

balloon of $

100,912

payable together with

the last instalment

on

October 11, 2027

. The loan

bears interest

at term

SOFR plus

a margin

of

2.25

%. Loan

fees amounted

to $

2,069

presented as

contra to

debt and

commitment fees amounted to $

191

, included in interest expense and finance costs in the accompanying

2022 consolidated statement of income.

ABN AMRO Bank N.V., or ABN:

On May 22, 2020, the Company signed a term loan facility with ABN, in

the

amount

of

$

52,885

to

combine

two

loans

outstanding

with

ABN.

Tranche

A

was

repayable

in

consecutive

quarterly

instalments of $

800

each and a balloon instalment of

$

9,000

payable together with

the last instalment on

June 28, 2024

. The tranche bore

interest at LIBOR plus

a margin of

2.25

%. Tranche

B was repayable in equal consecutive

quarterly

instalments of about $

994

each and a balloon of $

13,391

payable together with

the last

instalment on

June 28, 2024

, and

bore interest at

LIBOR plus a

margin of

2.4

%.

On May 20,

2021, the Company, drew

down $

91,000

under a secured

sustainability linked

loan facility with

ABN AMRO Bank N.V,

dated May 14, 2021, which was used

to refinance existing loans. In August 2022,

the Company prepaid

$

30,791

due to vessel

sale and leaseback

transactions and since

then, the loan

was

repayable

in

quarterly

instalments

of

$

1,980

and

a

balloon

of

$

13,553

payable

together

with

the

last

instalment, on

May 20, 2026

. The loan

bore interest at

LIBOR plus a margin

of

2.15

% per annum,

which

could

be

adjusted

annually

by

maximum

10

basis

points

upwards

or

downwards,

subject

to

the

performance under certain sustainability KPIs.

On June 26,

2023, the Company prepaid

in full both

loans amounting to $

68,677

, which were refinanced

under

a

new

loan

agreement

with

DNB

Bank

ASA

and

the

Company

recorded

a

loss

on

debt

extinguishment amounting to $

237

.

Export-Import Bank of China:

On January 4,

2017, the Company drew

down $

57,240

under a secured

loan

agreement,

which

is

repayable

in

equal

quarterly

instalments

of

$

954

,

each,

until

its

maturity

on

January 4, 2032

and bears interest at term SOFR plus a margin of

2.45

%.

DNB Bank

ASA or

DNB:

On March

14, 2019,

the Company

drew down

$

19,000

under a

secured loan

agreement,

which

is

repayable

in

consecutive

quarterly

instalments

of

$

477.3

and

a

balloon

of

$

9,454

payable together

with the

last instalment

on

March 14, 2024

. The

loan bore

interest at

LIBOR plus

a margin

of

2.4

%. On March 14, 2023,

the outstanding balance of

the loan amounting to $

11,841

was prepaid in full

and the Company recorded a loss on debt extinguishment amounting

to $

25

.

On June 26,

2023, the Company

entered into a

$

100,000

loan agreement which was

drawn on June

27,

2023,

to

refinance

the

outstanding

balance

of

the

ABN

loans

mentioned

above

and

for

working

capital

purposes. The loan is repayable

in

26

equal

quarterly

instalments of $

3,846

until

December 27, 2029

, and

bears term SOFR plus

a margin of

2.2

%, subject to sustainability

margin adjustment. Additionally, the loan

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-29

is subject to

a margin reset,

according to which

the borrowers and

the lenders will

enter into discussions

to agree

on a

new margin.

Unless the

parties agree

on a

new margin,

the loan

will be

mandatorily repayable

on June 27,

2027. As part

of the loan

agreement, on July

6, 2023, the

Company entered into

an interest

rate

swap

with

DNB

for

a

notional

amount

of

$

30,000

,

being

30

%

of

the

loan

amount

and

quarterly

amortization

of

$

1,154

.

Under

the

interest

rate

swap,

the

Company

pays

a

fixed

rate

of

4.268

%

and

receives floating under

term SOFR, has

a trade date

on June 27,

2023, and termination

date on December

27, 2029, and also has a mandatory break on June 27, 2027, the margin reset date of

the loan, according

to which the swap will be terminated

if the loan is prepaid. As of

December 31, 2023, the fair value of the

interest

rate

swap

amounted

to

$

439

and

is

separately

presented

in

current

assets

and

non-current

liabilities,

amounting

to

$

129

and

$

568

respectively,

in

the

2023

accompanying

consolidated

balance

sheet. Loss

from the

interest rate

swap amounted

to $

439

and is

separately presented

as loss

on derivative

instruments in the 2023 consolidated statement of income.

Danish Ship

Finance A/S

or Danish:

On April

12,

2023, the

Company signed

a term

loan facility

with

Danish, for

$

100,000

to refinance

the outstanding

balance of

the Company’s

loans with

DNB Bank

ASA

and

BNP,

mentioned

above

and

working

capital.

On

April

18

and

19,

2023,

the

Company

drew

down

$

100,000

which

is

repayable

in

twenty

equal

consecutive

quarterly

instalments

of

$

3,301

each

and

a

balloon of $

33,972

payable together with the last instalment

on April 19, 2028, and

bears interest at term

SOFR plus a margin of

2.2

%.

As of December 31, 2023 and 2022, the Company was in compliance

with all of its loan covenants.

As of December 31, 2023, the maturities of

the Company’s bond and debt facilities throughout their term,

are shown in the table below and do not include the related

debt issuance costs.

Period

Principal Repayment

Year 1

$

51,783

Year 2

51,783

Year 3

170,883

Year 4

152,696

Year 5

62,026

Year 6 and

thereafter

27,786

Total

$

516,957

9.

Finance Liabilities

The amount

of finance

liabilities shown

in the

accompanying consolidated

balance sheet

is analyzed

as

follows:

December 31, 2023

December 31, 2022

Finance liabilities

133,337

142,370

Less: Deferred financing costs

(1,208)

(1,439)

Finance liabilities, net of deferred financing costs

$

132,129

$

140,931

Less: Current finance liabilities, net of deferred financing

costs,

current

(9,221)

(8,802)

Finance liabilities, excluding current maturities

$

122,908

$

132,129

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-30

On March 29, 2022, the Company sold

Florida

to an unrelated third party for $

50,000

(Note 6) and leased

back the

vessel under

a bareboat

agreement, for

a period

of

ten years

, under

which the

Company pays

hire, monthly

in advance.

Under the

bareboat charter,

the Company

has the

option to

repurchase the

vessel

after

the

end of

the third

year

of the

charter period,

or each

year thereafter,

until the

termination of

the

lease, at specific prices, subject to

irrevocable and written notice to the

owner. If

not repurchased earlier,

the Company has

the obligation to repurchase

the vessel for $

16,350

, on the expiration

of the lease

on the

tenth year.

On August 17, 2022, the

Company entered into

two

sale and leaseback agreements with two

unaffiliated

Japanese

third

parties

for

New

Orleans

and

Santa

Barbara,

for

an

aggregate

amount

of

$

66,400

.

The

vessels were delivered

to their buyers

on September 8,

2022 and September 12,

2022, respectively and

the Company

chartered in

both vessels

under bareboat

charter parties for

a period

of

eight years

, each,

and has purchase options beginning at the end of the

third year of each vessel's bareboat charter period,

or

each

year

thereafter,

until

the

termination

of

the

lease,

at

specific

prices,

subject

to

irrevocable

and

written notice to the

owner.

If not repurchased earlier,

the Company has the

obligation to repurchase the

vessels for $

13,000

, each, on the expiration of each lease on the eighth year.

On December 6, 2022, the Company

sold

DSI Andromeda

to an unrelated third party for $

29,850

(Note 6)

and

leased

back

the

vessel

under

a

bareboat

agreement,

for

a

period

of

ten years

,

under

which

the

Company

pays

hire,

monthly

in

advance.

Under

the

bareboat

charter,

the

Company

has

the

option

to

repurchase the vessel after the

end of the third year of

the charter period, or each

year thereafter, until the

termination

of the

lease, at

specific prices,

subject to

irrevocable and

written notice

to

the

owner.

If not

repurchased earlier, the Company

has the

obligation to repurchase

the vessel for

$

8,050

, on the

expiration

of the lease on the tenth year.

Under the bareboat charter parties, the Company is responsible for the operation and maintenance of the

vessels and the

owner of the

vessels shall not

retain any control,

possession, or command of

the vessel

during the charter period.

The Company determined

that, under ACS

842-40 Sale and

Leaseback Transactions, the

transactions are

failed

sales

and

consequently the

assets

were not

derecognized from

the

financial

statements

and

the

proceeds from the sale of

the vessels were accounted

for as financial liabilities. As

of December 31, 2023,

the weighted average remaining

lease term of

the above lease

agreements was

7.70

years, the average

interest

rate

was

4.83

%

and

the

sublease

income

during

2023

was

$

34,560

,

included

in

time

charter

revenues.

As of

December 31,

2023, and

throughout

the term

of the

leases,

the Company

has annual

finance liabilities

as shown in the table below:

Period

Principal Repayment

Year 1

$

9,437

Year 2

9,808

Year 3

10,224

Year 4

10,661

Year 5

11,151

Year 6 and

thereafter

82,056

Total

$

133,337

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-31

10.

Commitments and Contingencies

a)

Various

claims, suits,

and complaints,

including those

involving government

regulations and

product

liability, arise in

the ordinary

course of

the shipping

business. In

addition, losses

may arise

from disputes

with

charterers,

agents,

insurance

and

other

claims

with

suppliers

relating

to

the

operations

of

the

Company’s

vessels.

The

Company

accrues

for

the

cost

of

environmental

and

other

liabilities

when

management becomes

aware that

a liability

is probable

and is

able to

reasonably estimate

the probable

exposure. The Company’s vessels are

covered for pollution in the

amount of $

1

billion per vessel per

incident, by the

P&I Association in

which the Company’s

vessels are entered.

In 2022, the

Company

recorded a

gain of

$

1,789

from insurance

recoveries received

from its

insurers for

claims covered

under

its insurance

policies, which

is separately

presented as

insurance recoveries

in the

accompanying 2022

consolidated statement of operations.

b)

Pursuant to the sale and lease

back agreements signed between the Company

and its counterparties,

the Company

has purchase

obligations to

repurchase the

vessels

Florida, Santa

Barbara, New

Orleans

and

DSI Andromeda

upon expiration of their lease contracts, as described

in Note 9.

c)

On March

30, 2023,

the Company

entered into

a

corporate guarantee

with Nordea

under which

the

Company guarantees

the performance

by Bergen

of all

of its

obligations

under the

loan until

the maturity

of the loan

on March 30, 2028

(Note 4 (b)). The

Company considers the likelihood of

having to make

any payments under the guarantee to be remote, as the loan is also secured by an account pledge by

Bergen,

first

preferred

mortgage

on

the

vessel,

a

first

priority

general

assignment

of

the

earnings,

insurances

and

requisition

compensation

of

the

vessel,

a

charter

party

assignment,

a

partnership

interests

security

deed,

and

a

manager’s

undertaking.

Accordingly,

as

of

December

31,

2023,

the

Company

did

not

record

a

provision for

losses

under

the

guarantee

of

Bergen’s

loan

amounting to

$

14,778

on that date.

d)

As

of

December

31,

2023,

the

Company’s

vessels,

owned

and

chartered-in, were

fixed

under

time

charter

agreements,

considered

operating

leases.

The

minimum

contractual

gross

charter

revenue

expected to

be generated

from fixed

and non-cancelable

time charter

contracts existing

as of

December

31, 2023 and until their expiration was as follows:

Period

Amount

Year 1

$

127,297

Year 2

24,629

Year 3

9,454

Year 4

725

Total

$

162,105

11.

Capital Stock and Changes in Capital Accounts

a)

Preferred stock

:

As of December 31, 2023, and 2022, the

Company’s authorized preferred stock

consists of

50,000,000

shares and

25,000,000

shares, respectively

(all in registered

form), par value

$

0.01

per share,

of which

1,000,000

shares are

designated as

Series A

Participating Preferred

Shares,

5,000,000

shares are designated as

Series B Preferred Shares,

10,675

shares are designated as

Series C Preferred

Shares and

400

shares are designated

as Series

D Preferred Shares.

As of December

31, 2023 and

2022,

the Company had

zero

Series A Participating Preferred Shares issued and outstanding.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-32

b)

Series

B

Preferred

Stock:

As

of

December

31,

2023,

and

2022,

the

Company

had

2,600,000

Series B Preferred

Shares issued and

outstanding with

par value $

0.01

per share, at

$

25.00

per share and

with liquidation preference

at $

25.00

per share.

Holders of Series B Preferred Shares have no voting rights

other than the ability, subject to certain exceptions, to elect one director if dividends for six quarterly

dividend periods (whether or not consecutive) are in arrears and certain other limited protective voting

rights.

Also, holders of Series B Preferred

Shares rank prior to the holders

of common shares with respect

to dividends,

distributions and

payments upon

liquidation and

are subordinated

to all

of the

existing and

future indebtedness.

Dividends on the Series

B Preferred Shares

are cumulative from

the date of original

issue and are

payable

on the 15th

day of January, April, July

and October of

each year at

the dividend rate

of

8.875

% per annum,

or

$

2.21875

per

share

per

annum.

In

2023,

2022

and

2021,

dividends

on

Series

B

Preferred

Shares

amounted

to

$

5,769

,

$

5,769

and

$

5,769

,

respectively.

Since

February

14,

2019,

the

Company

may

redeem, in whole or in part, the Series B Preferred Shares at a redemption price of $

25.00

per share plus

an amount equal

to all accumulated

and unpaid dividends thereon

to the date

of redemption, whether

or

not declared.

c)

Series C Preferred Stock

: As of December 31, 2023, and 2022,

the Company had

10,675

shares

of Series C Preferred Stock, issued and

outstanding, with par value $

0.01

per share, owned by an affiliate

of its Chief

Executive Officer, Mrs. Semiramis

Paliou.

The Series C Preferred Stock votes with the common

shares of the Company, and each share entitles the holder thereof to 1,000 votes on all matters submitted

to a vote of the shareholders of the Company.

The Series C Preferred

Stock has no dividend or

liquidation

rights and cannot be

transferred without the consent

of the Company except to

the holder’s affiliates and

immediate family members.

d)

Series D Preferred Stock

: As of December 31, 2023, and 2022, the Company had

400

shares of

Series D Preferred Stock, issued and outstanding,

with par value $

0.01

per share, owned by an affiliate of

its Chief

Executive Officer,

Mrs. Semiramis

Paliou.

The Series

D Preferred Stock

is not

redeemable and

has

no

dividend or

liquidation rights.

The Series D Preferred Stock vote with the common shares of the

Company, and each share of the Series D Preferred Stock entitles the holder thereof to up to 200,000

votes,

on

all

matters

submitted

to

a

vote

of

the

stockholders

of

the

Company, provided

however, that,

notwithstanding any

other provision

of the Series

D Preferred

Stock

statement of

designation, to

the extent

that the total number

of votes one or

more holders of Series

D Preferred Stock

is entitled to vote

(including

any voting power of such holders derived from Series D Preferred

Stock, shares of Common Stock or any

other voting security of the

Company issued and outstanding as of

the date hereof or that

may be issued

in the

future) on any

matter submitted to

a vote

of stockholders of

the Company would

exceed

36.0

% of

the total number

of votes eligible

to be cast on

such matter, the total

number of votes

that holders of

Series

D Preferred Stock may exercise derived

from the Series D Preferred Stock

together with Common Shares

and any

other voting

securities of

the

Company beneficially

owned by

such holder,

shall be

reduced to

36

% of the total number of votes that may be cast on such matter submitted

to a vote of stockholders.

e)

Issuance and Repurchase of Common Shares:

In February 2021, the Company repurchased

in

a tender

offer

6,000,000

shares at

the price

of $

2.50

per share.

In

August 2021,

the Company

repurchased,

in another

tender offer,

3,333,333

shares, at

a price

of $

4.50

per share

and in

December 2021,

repurchased

3,529,411

shares at a

price of

$

4.25

per share.

The aggregate

cost of

the share repurchases

was $

45,369

,

including

expenses.

In

2022,

the

Company

issued

under

its

ATM

program

877,581

shares

of

common

stock,

at

an

average

price

of

$

6.27

per

share

and

received

net

proceeds

of

$

5,322

.

During

2022,

the

Company

repurchased

under

its

share

repurchase

program

820,000

shares

of

common

stock,

at

an

average price of $

4.56

per share, for an aggregate

cost of $

3,799

, including expenses. In addition, in

the

fourth

quarter

of

2022,

the

Company

issued

16,453,780

common

shares

to

Sea

Trade

(Note

6),

upon

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-33

exercise by Sea Trade of the

eight out of nine warrants mentioned in (i) below,

for the acquisition of eight

vessels,

at

an

average

price

of

$

4.13

.

On

January

30,

2023,

the

Company

issued

2,033,613

common

shares, at

$

3.84

, to

Sea Trade

upon exercise

by Sea

Trade

of a

warrant it

held for

the acquisition

of a

vessel

(Note

6).

The

Company did

no

t

receive

any

proceeds

from

the

exercise

of

the

warrants by

Sea

Trade and the exercise price of the shares issued was included in the price of the vessels

acquired.

f)

Dividend on Common Stock:

On March 21,

2022, the Company paid

a dividend on its

common

stock of

$

0.20

per share,

to its

shareholders of

record as

of March

9, 2022.

On June

17, 2022,

the Company

paid a dividend on its common stock of

$

0.25

per share, to its shareholders of record as

of June 6, 2022.

On

August

19,

2022,

the

Company

paid

a

dividend

on

its

common

stock

of

$

0.275

per

share,

to

its

shareholders of record as of August 8, 2022. On December 15, 2022,

the Company paid a dividend on its

common stock of $

0.175

per share, to its shareholders

of record as of November

28, 2022. During 2022,

the Company paid total cash dividends on common stock amounting

to $

79,812

.

On March

20, 2023, the

Company paid

a dividend of

$

0.15

per share, or

$

15,965

, to

its shareholders of

record as of March 13, 2023. On July 10, 2023, the Company distributed a dividend of $

0.15

per share to

all shareholders of record as

of June 12, 2023, and

paid $

12,424

in cash to its shareholders

who elected

to receive cash

and distributed

965,044

newly issued common shares

to its shareholders

who elected to

receive

shares.

On

September

8,

2023,

the

Company

distributed

a

dividend

of

$

0.15

per

share

to

all

shareholders of record as

of August 14, 2023, and

paid $

13,041

in cash to its shareholders

who elected to

receive

cash

and

distributed

831,672

newly

issued

common

shares

to

its

shareholders

who

elected

to

receive

shares.

On

December

4,

2023,

the

Company

distributed

a

dividend

of

$

0.15

per

share

to

all

shareholders of record

as of November

27, 2023 in

the form of

common stock and

distributed

4,831,777

newly issued common shares.

g)

Dividend in Kind:

On November 29, 2021, the

Company distributed to its shareholders of record

on November 3,

2021, the common stock

of OceanPal, acquired in

a spin-off, amounting

to $

40,509

. On

December 15, 2022,

the Company distributed

the Company’s investment

in the Series

D Preferred Shares

of OceanPal in the form of a stock dividend amounting to $

18,189

, or $

0.18

per share, to its shareholders

of record as of November

28, 2022. On June

9, 2023, the Company

distributed the Company’s investment

in the

Series D

Preferred Shares

of OceanPal

in the

form of

a stock

dividend amounting

to $

10,761

, or

$

0.10

per share, to its shareholders of record as of April 24, 2023

(Notes 5(a)).

On

December 14,

2023, the

Company distributed

22,613,070

warrants to

its

shareholders of

record

on

December 6, 2023. Holders

received

one warrant for every

five shares of issued

and outstanding shares

of common stock held as of

the record date (rounded down to

the nearest whole number for any fractional

warrant. Each

Warrant

entitle the

Holder to

purchase, at

the Holder’s

sole and

exclusive election, at

the

exercise price of $

4

per warrant,

one

share of common stock plus a

bonus share fraction. A bonus share

fraction entitles

a Holder

to receive

an additional

half

of a

share of

common stock

for each

warrant exercised

without payment of any additional exercise price. If all warrants were exercised as of December

31, 2023,

the Company would

have issued

33,919,605

common shares

with a

fair value of

$

100,741

and would have

received

$

90,452

of

proceeds.

The

warrants

were

measured

on

the

date

of

distribution

at

fair

value,

determined through level

1 account hierarchy, being the opening

price of the warrants

on the NYSE

on the

date of distribution as they are listed

under the ticker DSX_W. The value of the warrants was

measured at

$

7,914

, or $

0.35

per warrant and

was recorded as

liability under the

terms of ASC

480. As of

December

31, 2023, the

warrant liability was remeasured

at fair value and

recorded at $

6,332

, resulting in

a gain of

$

1,583

separately presented

in the

2023 consolidated

statement of

income as

unrealized gain

on warrants.

As of December 31, 2023,

no

warrants had been exercised.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-34

h)

Incentive

Plan:

As

of

December

31,

2023,

13,444,759

shares

remained

reserved

for

issuance

according to the Company’s incentive plan.

Restricted stock in 2023, 2022 and 2021 is analyzed as follows:

Number of Shares

Weighted Average

Grant Date Price

Outstanding as of December 31, 2020

2,423,012

$

2.95

Granted

8,260,000

2.85

Vested

(1,168,363)

3.20

Outstanding as of December 31, 2021

9,514,649

$

2.83

Granted

1,470,000

4.15

Vested

(3,118,060)

2.86

Outstanding as of December 31, 2022

7,866,589

$

3.07

Granted

1,750,000

4.54

Vested

(2,822,753)

3.05

Outstanding as of December 31, 2023

6,793,836

$

3.45

The

fair

value

of

the

restricted

shares

has

been

determined

with

reference

to

the

closing

price

of

the

Company’s

stock

on

the

date

such

awards

were

approved

by

the

Company’s

board

of

directors.

The

aggregate

compensation

cost

is

recognized

ratably

in

the

consolidated

statement

of

income

over

the

respective vesting periods. In 2023, 2022 and 2021,

compensation cost amounted to $

9,938

, $

9,282

and

$

7,442

,

respectively,

and

is

included

in

general

and

administrative

expenses

in

the

accompanying

consolidated statements of income.

As of

December 31,

2023 and

2022, the

total unrecognized cost

relating to

restricted share

awards was

$

14,880

and $

16,873

, respectively. As of

December 31,

2023, the weighted-average

period over

which the

total compensation cost related to

non-vested awards not yet

recognized is expected to be

recognized is

1.95

years.

i)

Warrants:

On

August

11,

2022, the

Company

issued

nine

warrants

to

Sea

Trade

(Note

6)

that

permitted the holder to purchase from the Company

18,487,393

, at $

0.01

per share, each exercisable on

the delivery of each vessel from Sea Trade to the Company.

The warrants would expire and no longer be

exercisable upon

the earlier

of the

termination date

of each

memorandum of

agreement and

the date

before

the delivery date of a vessel if

a registration statement had not been declared effective.

The holder of the

warrants would not be

considered a shareholder prior to

the issuance of the

shares. As of December

31,

2022, there was only

one

warrant not exercised by Sea Trade, which was exercised

on January 30, 2023,

upon delivery of the ninth Ultramax vessel (Note 6). The

Company did

no

t receive any proceeds from the

exercise of

the warrants

by Sea Trade

and the

exercise price

of the

shares issued

was included

in the

price

of the vessels acquired.

12.

Voyage expenses

The amounts in the accompanying consolidated statements of income

are analyzed as follows:

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-35

2023

2022

2021

Commissions

$

13,331

$

14,412

$

10,794

Gain from bunkers

(474)

(8,100)

(5,955)

Port expenses and other

764

630

731

Total

$

13,621

$

6,942

$

5,570

13.

Interest and Finance Costs

The amounts in the accompanying consolidated statements of income

are analyzed as follows:

2023

2022

2021

Interest expense, debt

$

39,617

$

21,983

$

18,067

Finance liabilities interest expense

6,786

2,735

-

Amortization of debt and finance liabilities issuance

costs

2,620

2,286

1,865

Loan and other expenses

308

415

307

Interest expense and finance costs

$

49,331

$

27,419

$

20,239

14.

Earnings per Share

All common

shares issued

(including the

restricted shares

issued under

the Company’s

incentive plans)

are

the

Company’s

common

stock

and

have

equal

rights

to

vote

and

participate

in

dividends.

The

calculation of basic earnings per share does not treat the non-vested shares (not considered participating

securities) as outstanding until the time/service-based

vesting restriction has lapsed.

The dilutive effect on

unexercised

warrants (Note

11(g))

that

are

in-the-money,

is

computed using

the

treasury stock

method

which assumes that the proceeds upon exercise of these warrants are

used to purchase common shares

at the average market price for the period. Incremental shares are

the number of shares assumed issued

under the

treasury stock

method weighted

for the

periods the

non-vested shares

were outstanding.

In 2023,

2022

and

2021,

there

were

1,710,513

,

3,257,861

,

and

3,735,059

incremental

shares,

respectively,

included in the denominator of the diluted earnings per share calculation.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-36

Net income attributable

to common stockholders

is adjusted by the

dividends on Series B

Preferred Stock.

Net income attributable to common

stockholders is further adjusted by

the unrealized gain on

warrants as

of December 31, 2023 to calculate the diluted earnings per share.

2023

2022

2021

Net income

$

49,844

$

119,063

$

57,394

Dividends on series B preferred shares

(5,769)

Net income attributable to common stockholders

$

44,075

$

113,294

$

51,625

Weighted average number of common shares, basic

100,166,629

80,061,040

81,121,781

Earnings per share, basic

$

0.44

$

1.42

$

0.64

Net income

$

49,844

$

119,063

$

57,394

Dividends on series B preferred shares

(5,769)

Unrealized gain on warrants

(1,583)

-

Adjusted net income attributable to common

stockholders

$

42,492

$

113,294

$

51,625

Weighted average number of common shares, basic

100,166,629

80,061,040

81,121,781

Incremental shares

1,710,513

3,257,861

3,735,059

Weighted average number of common shares, diluted

101,877,142

83,318,901

84,856,840

Earnings per share, diluted

$

0.42

$

1.36

$

0.61

15.

Income Taxes

Under

the

laws

of

the

countries

of

the

companies’

incorporation

and

/

or

vessels’

registration,

the

companies are

not subject

to tax

on international

shipping income;

however, they are

subject to

registration

and tonnage

taxes, which

are included

in vessel

operating expenses

in the

accompanying consolidated

statements of operations.

The vessel-owning

companies with

vessels that

have called

on the

United States

are obliged

to file

tax

returns with the Internal Revenue Service. However, pursuant to the Internal Revenue Code of the United

States, U.S.

source income from

the international operations

of ships

is generally exempt

from U.S.

tax.

The applicable tax is

50

% of

4

% of U.S.-related gross transportation

income unless an exemption

applies.

The Company and each

of its subsidiaries expects it

qualifies for this statutory

tax exemption for the 2023,

2022 and

2021 taxable years,

and the

Company takes this

position for

United States federal

income tax

return reporting purposes.

16.

Financial Instruments and Fair Value Disclosures

Interest rate risk and concentration of credit risk

Financial instruments,

which potentially

subject the

Company to

significant concentrations

of credit

risk,

consist

principally

of

cash

and

trade

accounts

receivable.

The

ability

and

willingness

of

each

of

the

Company’s counterparties to perform their

obligations under a contract depend upon a

number of factors

that are

beyond the

Company’s control

and may

include, among

other things,

general economic

conditions,

the

state

of

the

capital

markets,

the

condition

of

the

shipping

industry

and

charter

hire

rates. The

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-37

Company’s credit risk with financial institutions is limited as it has temporary cash investments, consisting

mostly of deposits, placed with various qualified financial institutions and performs periodic evaluations of

the relative credit

standing of those financial

institutions. The Company limits

its credit risk

with accounts

receivable by performing ongoing

credit evaluations of its

customers’ financial condition and by

receiving

payments

of

hire

in

advance.

The

Company,

generally,

does

not

require

collateral

for

its

accounts

receivable and does not have any agreements to mitigate credit risk.

In 2023,

2022 and

2021, charterers

that individually

accounted for

10

% or

more of

the Company’s

time

charter revenues were as follows:

Charterer

2023

2022

2021

Cargill International SA

13%

19%

10%

Koch Shipping PTE LTD.

Singapore

*

15%

*

*Less than 10%

The Company is exposed to interest rate fluctuations

associated with its variable rate borrowings. On July

6, 2023, the

company entered

into an interest

rate swap

with DNB

(Notes 8 and

13) to manage

part of

such

exposure.

Fair value of assets and liabilities

The

carrying

values

of

financial

assets

reflected

in

the

accompanying

consolidated

balance

sheet

approximate their

respective fair

values due

to the

short-term nature

of these

financial instruments.

The

fair value of long-term bank loans with variable interest

rates approximates the recorded values, generally

due to their variable interest rates.

Fair value measurements disclosed

As of December 31, 2023, the Bond having a fixed interest

rate and a carrying value of $

119,100

(Note 8)

had a fair value of $

118,505

determined through the Level 1 input of the fair value hierarchy as defined in

FASB guidance for Fair Value Measurements.

On

September

20,

2022,

the

Company

acquired

25,000

Series

D

Preferred

Shares

of

OceanPal

at

$

17,600

, determined by

taking into consideration

a third-party valuation

which was based

on the

income

approach, taking into account the

present value of the future

cash flows the Company expects to

receive

from holding the equity instrument.

On December 15,

2022, the Company

distributed the

Series D Preferred

Shares as non-cash

dividend and

measured their fair value on

the date of declaration at

$

18,189

. Their fair value

was determined by using

the income approach, taking into

account the present value of the

future cash flows, the holder

of shares

would expect to receive from holding the equity instrument which

resulted in gain of $

589

.

On February

8, 2023, the

Company acquired

13,157

shares of

OceanPal Series

D Preferred

Shares, as

part of

the consideration provided

to the

Company for sale

of Melia to

OceanPal, at

$

10,000

, taking

into

consideration a

third-party valuation

which was

based on

the

income approach,

taking into

account the

present value of the future cash

flows the Company expects to

receive from holding the equity instrument.

On

June

9,

2023, the

Company distributed

the

Series

D

Preferred

Shares as

a

non-cash

dividend and

measured their

fair value

on the

date of

declaration at

$

10,761

. The

fair value

was determined

by using

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-38

the income approach, taking into

account the present value of the

future cash flows, the holder

of shares

would expect to receive from holding the equity instrument which

resulted in gain of $

761

.

Other Fair value measurements

Description (in thousands of US Dollars)

December 31,

2022

Quoted Prices

in Active

Markets

(Level 1)

Non-recurring fair value measurements

Long-lived assets held for use

$

67,909

$

67,909

Total

non-recurring fair value measurements

67,909

December 31,

2023

Quoted Prices

in Active

Markets

(Level 1)

Significant

Other

Observable

Inputs (Level 2)

Significant

Other

Observable

Inputs (Level 3)

Assets

Recurring fair value measurements

Investments in equity securities

$

20,729

$

Investments in related party

8,315

8,138

177

Interest rate swap, asset

129

Total

recurring fair value measurements

$

29,173

$

28,867

$

129

$

177

Non-recurring fair value measurements

Equity method investments

$

4,519

$

4,519

$

Long-lived assets held for use

7,809

-

Total

non-recurring fair value measurements

$

12,328

$

7,809

$

4,519

-

Liabilities

Recurring fair value measurements

Interest rate swap, liability

568

Warrant liability

6,332

Total

recurring fair value measurements

6,900

6,332

568

-

17.

Subsequent Events

a)

Exercise of

warrants:

Since January

4, 2024 and

until April

1, 2024, holders

of warrants

exercised

3,051,471

warrants under which

4,597,192

shares of common

stock were issued

and the proceeds

from the exercise of warrants amounted to $

12,206

.

b)

Series

B

Preferred

Stock

Dividends

:

On

January

15,

2024,

the

Company

paid

a

quarterly

dividend

on

its

series

B

preferred

stock,

amounting

to

$

0.5546875

per

share,

or

$

1,442

,

to

its

stockholders of record as of January 12, 2024.

c)

Acquisition

of

property:

On

January

18,

2024,

the

Company

acquired

from

unaffiliated

third

parties a plot of

land for the purchase price of

Euro

310,000

to be utilized for

corporate purposes.

On March 6, 2024, the Company acquired

from unaffiliated third parties another plot

of land for the

purchase price of Euro

1,300,000

.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-39

d)

Sale of Vessel Artemis:

On January 19, 2024, the Company, through a wholly owned subsidiary,

entered into an agreement with an unrelated third party to sell

the vessel Artemis for the sale price

of $

12,990

. The vessel was delivered to the new owners on March 5, 2024.

e)

Commissioning Service

Operation Vessels (CSOVs):

On January

24, 2024,

Diana Energize

Inc.

increased

its

equity

commitment

to

Euro

50

million,

being

approximately

45.87

%

of

the

limited

partnership’s capital (Note 4 (c)).

f)

Methanol

Dual

Fuel

New-Building Kamsarmax

Dry

Bulk

Vessels:

On

February

8,

2024,

the

Company signed an agreement to

order through Marubeni Corporation

or its guaranteed nominee,

an

unaffiliated

third

party,

two

81,200

dwt methanol

dual

fuel

new-building Kamsarmax

dry

bulk

vessels, for

a purchase

price of

$

46,000

each, built

at Tsuneishi

Group (Zhoushan)

Shipbuilding

Inc., China. The vessels are expected

to be delivered to the

Company by the second half of 2027

and the first

half of 2028

respectively. On February 15,

2024, the Company

paid the first

instalment,

amounted $

8,050

for each vessel, representing the

17.5

% of the contract price.

g)

Sale of

Vessel Houston:

On February

22, 2024,

the Company, through

a wholly

owned subsidiary,

entered into an agreement

with an unrelated third

party to sell the

vessel Houston for the

sale price

of $

23,300

,

with delivery to the new owners latest by September 16, 2024.

h)

Common Stock Dividend:

On February 23,

2024, the Company

declared a cash

dividend on its

common stock of

$

0.075

per share, based

on the

Company’s results of

operations during

the fourth

quarter

ended

December

31,

2023.

The

cash

dividend

was

paid

on

March

12,

2024,

to

all

shareholders of record as of March 5, 2024.

Diana Shipping - 20-F annual report 2023

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