Companies: 10,796     total market cap: $140.811 T
โ‚ฌEUR๐Ÿ‡ช๐Ÿ‡บโ‚นINR๐Ÿ‡ฎ๐Ÿ‡ณยฃGBP๐Ÿ‡ฌ๐Ÿ‡ง$CAD๐Ÿ‡จ๐Ÿ‡ฆ$AUD๐Ÿ‡ฆ๐Ÿ‡บ$NZD๐Ÿ‡ณ๐Ÿ‡ฟ$HKD๐Ÿ‡ญ๐Ÿ‡ฐ$SGD๐Ÿ‡ธ๐Ÿ‡ฌ
Diana Shipping
DSX
#8021
Rank
$0.31 B
Marketcap
๐Ÿ‡ฌ๐Ÿ‡ท Greece
Country
$2.52
Share price
4.13%
Change (1 day)
77.46%
Change (1 year)
๐Ÿšš Transportation ๐Ÿšข Maritime transportation
Categories
  1. Diana Shipping
  2. Annual Reports (20-F)
  3. Financial Year 2025

Diana Shipping - 20-F annual report 2025


Text size:
0001318885FY--12-31false11578743412520340510000000000.01falsetrue☐00013188852025-01-012025-12-3100013188852024-01-012024-12-3100013188852023-01-012023-12-3100013188852022-12-310001318885dsx:BergenJointVentureMemberdsx:EcobulkAsMember2023-04-282023-04-2800013188852025-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesDPreferredStockMemberdsx:Mrs.SemiramisPaliouMember2025-12-310001318885us-gaap:AdditionalPaidInCapitalMember2022-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesBPreferredStockMember2025-01-012025-12-310001318885dei:BusinessContactMember2025-01-012025-12-3100013188852023-12-310001318885us-gaap:FairValueMeasurementsRecurringMember2025-12-310001318885dsx:SeniorUnsecuredBond8.375PercentMember2025-12-310001318885us-gaap:RetainedEarningsMember2023-01-012023-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesCPreferredStockMember2022-12-310001318885us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001318885dsx:SeniorUnsecuredBond875PercentMemberdsx:July2027Member2024-07-022024-07-020001318885us-gaap:PreferredStockMemberus-gaap:SeriesCPreferredStockMember2025-12-3100013188852024-12-310001318885dsx:SeniorUnsecuredBond8.375PercentMemberus-gaap:FairValueInputsLevel1Member2025-12-310001318885us-gaap:CommonStockMember2023-01-012023-12-310001318885us-gaap:RelatedPartyMember2025-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesDPreferredStockMember2022-12-310001318885dsx:AltairTravelAgencySaMember2024-01-012024-12-310001318885us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesBPreferredStockMember2025-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesDPreferredStockMember2024-12-310001318885us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2025-12-310001318885dsx:SeniorUnsecuredBond875PercentMember2024-07-020001318885us-gaap:CommonStockMember2025-01-012025-12-310001318885dsx:SeniorUnsecuredBond875PercentMemberdsx:January2028Member2024-07-022024-07-0200013188852025-01-072025-01-070001318885dsx:SeriesBCumulativeRedeemablePerpetualPreferredSharesAt8875PercentMember2025-01-012025-12-310001318885us-gaap:CommonStockMember2025-01-012025-12-310001318885us-gaap:SecuredDebtMember2025-12-310001318885dsx:DNBBankASAMemberus-gaap:SecuredDebtMember2025-01-012025-12-310001318885dsx:WarrantsToPurchaseCommonStockMember2025-01-012025-12-310001318885us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembersrt:MinimumMember2025-01-012025-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesCPreferredStockMember2025-01-012025-12-310001318885us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2025-12-310001318885dsx:DanishShipFinanceMember2023-04-182023-04-190001318885dsx:OceanpalMemberus-gaap:SeriesDPreferredStockMember2023-12-3100013188852025-06-242025-06-240001318885us-gaap:RetainedEarningsMember2024-01-012024-12-310001318885us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberdsx:NipponYusenKaishaMember2025-01-012025-12-310001318885us-gaap:CommonStockMember2024-01-012024-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesBPreferredStockMember2022-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesCPreferredStockMember2024-12-310001318885dsx:SteamshipShipbrokingEnterprisesMember2024-12-310001318885dsx:Florida2022BuiltCapesizeVesselMember2022-03-290001318885us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2025-12-310001318885dsx:ShipbuildingContractsMember2025-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesDPreferredStockMember2023-12-310001318885us-gaap:CommonStockMember2023-12-310001318885dsx:IfAllWarrantsAreExercisedMember2025-01-012025-12-310001318885us-gaap:SeriesBPreferredStockMemberus-gaap:SubsequentEventMember2026-01-152026-01-150001318885us-gaap:AdditionalPaidInCapitalMember2024-12-310001318885us-gaap:AdditionalPaidInCapitalMember2025-01-012025-12-3100013188852024-06-182024-06-180001318885dsx:BergenJointVentureMember2023-04-280001318885dsx:BergenJointVentureMember2025-01-012025-12-310001318885us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-12-310001318885us-gaap:RetainedEarningsMember2023-12-310001318885dsx:AltairTravelAgencySaMember2023-01-012023-12-310001318885dsx:DianaWilhelmsenManagementLimitedMember2023-01-012023-12-310001318885us-gaap:RetainedEarningsMember2025-01-012025-12-310001318885dsx:DanishShipFinanceMember2024-10-182024-10-180001318885dsx:Mrs.SemiramisPaliouMemberus-gaap:SeriesDPreferredStockMember2025-01-012025-12-310001318885dsx:BergenMemberdsx:AdministrativeServiceAgreementMember2025-01-012025-12-310001318885dsx:SeniorUnsecuredBond875PercentMemberdsx:DirectorsAndOfficersMember2024-07-022024-07-020001318885us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberdsx:CargillInternationalSaMember2025-01-012025-12-310001318885us-gaap:RetainedEarningsMember2024-12-310001318885us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001318885dsx:DianaWilhelmsenManagementLimitedMember2024-12-310001318885dsx:NewOrleansAndSantaBarbaraVesselsMember2022-08-170001318885us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2025-12-310001318885dsx:BergenMember2025-12-310001318885us-gaap:SecuredDebtMemberdsx:ExportImportBankOfChinaMember2017-01-042017-01-040001318885us-gaap:PreferredStockMemberus-gaap:SeriesBPreferredStockMember2023-12-310001318885us-gaap:AdditionalPaidInCapitalMember2023-01-012023-12-310001318885us-gaap:RelatedPartyTransactionDomain2025-01-012025-12-310001318885dsx:DianaWilhelmsenManagementLimitedMember2024-01-012024-12-310001318885us-gaap:AdditionalPaidInCapitalMember2024-01-012024-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesBPreferredStockMember2024-12-310001318885dsx:DianaWilhelmsenManagementLimitedMember2025-01-012025-12-310001318885dsx:BergenJointVentureMember2024-01-012024-12-310001318885dsx:DNBBankASAMemberus-gaap:SecuredDebtMember2023-07-060001318885us-gaap:RelatedPartyMember2024-01-012024-12-310001318885dsx:OceanpalMemberus-gaap:SeriesBPreferredStockMember2024-12-310001318885dsx:OceanpalMemberdsx:SeriesCAndSeriesDPreferredSharesMember2025-01-012025-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesCPreferredStockMember2023-12-310001318885dsx:DianaWilhelmsenManagementLimitedMemberdsx:ManagementAgreementsMember2024-12-310001318885dsx:DanishShipFinanceMember2025-01-012025-12-310001318885dsx:DsiAndromedaMember2022-12-060001318885dsx:SeniorUnsecuredBond875PercentMemberdsx:July2028Member2024-07-022024-07-0200013188852024-12-020001318885dsx:OceanpalMemberdsx:SeriesCAndSeriesDPreferredSharesMember2023-01-012023-12-310001318885us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-01-012025-12-310001318885dsx:BergenMemberdsx:CommissionOnLoanGuaranteeMember2025-01-012025-12-310001318885dsx:AltairTravelAgencySaMember2024-12-310001318885dsx:OceanpalMemberdsx:SeriesCAndSeriesDPreferredSharesMember2024-01-012024-12-310001318885dsx:AltairTravelAgencySaMember2025-01-012025-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesDPreferredStockMemberdsx:Mrs.SemiramisPaliouMember2025-01-012025-12-310001318885dsx:SeriesCConvertiblePreferredStockMemberdsx:OceanpalMember2024-12-310001318885us-gaap:CommonStockMember2024-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesDPreferredStockMember2025-12-310001318885dsx:NordeaBankMember2025-01-012025-12-310001318885us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembersrt:MinimumMember2024-01-012024-12-310001318885us-gaap:SecuredDebtMemberdsx:ExportImportBankOfChinaMember2025-01-012025-12-310001318885dsx:DanishShipFinanceMember2023-04-190001318885dsx:DNBBankASAMemberus-gaap:SecuredDebtMember2023-06-260001318885us-gaap:CommonStockMember2022-12-310001318885us-gaap:PreferredStockMember2025-12-310001318885dsx:BergenJointVentureMember2023-04-282023-04-280001318885dsx:BergenJointVentureMember2023-04-282023-04-280001318885dsx:DanishShipFinanceMember2024-10-180001318885dsx:OceanpalMemberdsx:SeriesBAndSeriesCPreferredSharesMember2024-12-310001318885dsx:BergenMemberdsx:LoanAgreementWithNordeaMember2023-03-3000013188852025-03-212025-03-2100013188852024-03-122024-03-120001318885dsx:SeniorUnsecuredBond875PercentMemberdsx:January2029Member2024-07-022024-07-020001318885us-gaap:RelatedPartyMember2025-01-012025-12-310001318885us-gaap:RelatedPartyTransactionDomaindsx:SaleAndLeaseBackAgreementMember2025-12-310001318885dsx:DNBBankASAMemberus-gaap:SecuredDebtMember2025-12-310001318885dsx:DanishShipFinanceMember2023-04-120001318885dsx:NordeaBankMember2024-07-250001318885dsx:DianaWilhelmsenManagementLimitedMember2025-12-310001318885dsx:OceanpalMember2024-12-310001318885dsx:BergenJointVentureMember2024-12-310001318885us-gaap:AdditionalPaidInCapitalMember2023-12-310001318885us-gaap:RetainedEarningsMember2022-12-310001318885dsx:WindwardMember2024-12-310001318885us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-12-310001318885us-gaap:AdditionalPaidInCapitalMember2025-12-310001318885us-gaap:RetainedEarningsMember2025-12-310001318885dsx:DianaWilhelmsenManagementLimitedMemberdsx:ManagementAgreementsMember2025-12-310001318885dsx:AltairTravelAgencySaMember2025-12-310001318885us-gaap:CommonStockMember2025-12-310001318885dsx:OceanpalMemberdsx:SeriesBAndSeriesCPreferredSharesMember2025-12-310001318885dsx:OceanpalMember2025-12-310001318885dsx:BergenJointVentureMember2025-12-310001318885us-gaap:RelatedPartyMember2024-12-310001318885us-gaap:SecuredDebtMember2024-12-310001318885us-gaap:RelatedPartyMember2023-01-012023-12-310001318885us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberdsx:NipponYusenKaishaMember2024-01-012024-12-310001318885us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMemberdsx:CargillInternationalSaMember2023-01-012023-12-310001318885us-gaap:FairValueMeasurementsRecurringMember2024-12-310001318885us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2024-12-310001318885us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2024-12-310001318885us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2024-12-310001318885dsx:DianaWilhelmsenManagementLimitedMemberdsx:ManagementAgreementsMember2025-01-012025-12-310001318885dsx:DianaWilhelmsenManagementLimitedMemberdsx:ManagementAgreementsMember2024-01-012024-12-310001318885dsx:DianaWilhelmsenManagementLimitedMemberdsx:ManagementAgreementsMember2023-01-012023-12-310001318885dsx:BergenMemberdsx:AdministrativeServiceAgreementMember2024-01-012024-12-310001318885dsx:WindwardMember2025-01-012025-12-310001318885dsx:WindwardMember2025-12-310001318885dsx:WindwardMember2024-01-012024-12-310001318885dsx:DianaMarinersMemberdsx:CebuMember2025-12-310001318885dsx:DianaMarinersMemberdsx:CebuMember2024-12-310001318885us-gaap:EquityMethodInvesteeMember2024-12-310001318885us-gaap:EquityMethodInvesteeMember2025-12-310001318885dsx:OceanpalMemberus-gaap:SeriesDPreferredStockMember2023-01-012023-12-310001318885dsx:OceanpalMember2024-01-012024-12-310001318885dsx:OceanpalMember2025-01-012025-12-3100013188852024-02-082024-02-080001318885dsx:ArtemisAndHoustonMember2024-01-012024-12-310001318885dsx:AlcmeneAndSelinaMember2025-01-012025-12-310001318885dsx:SeniorUnsecuredBond8.375Member2025-01-012025-12-310001318885dsx:SeniorUnsecuredBond8.375Member2021-06-220001318885dsx:DirectorsAndOfficersMemberdsx:SeniorUnsecuredBond8.375Member2021-06-222021-06-220001318885dsx:SeniorUnsecuredBond8.375Member2023-06-290001318885dsx:SeniorUnsecuredBond8.375Member2023-06-292023-06-290001318885dsx:SeniorUnsecuredBond8.375Member2024-07-022024-07-020001318885dsx:SeniorUnsecuredBond8.375Member2024-07-020001318885us-gaap:SecuredDebtMemberdsx:NordeaBankMember2023-06-272023-06-270001318885us-gaap:SecuredDebtMemberdsx:DNBBankASAMember2024-01-012024-12-310001318885us-gaap:SecuredDebtMemberdsx:DNBBankASAMember2023-01-012023-12-310001318885dsx:DNBBankASAMemberus-gaap:SecuredDebtMember2024-12-310001318885dsx:BergenMemberdsx:LoanAgreementWithNordeaMember2025-12-310001318885us-gaap:PreferredStockMember2024-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesAPreferredStockMember2024-12-310001318885us-gaap:PreferredStockMemberus-gaap:SeriesDPreferredStockMemberdsx:Mrs.SemiramisPaliouMember2024-12-310001318885us-gaap:CommonStockMemberdsx:VesselAcquisitionsMember2023-01-012023-12-310001318885us-gaap:CommonStockMemberdsx:VesselAcquisitionsMember2023-12-3100013188852023-03-202023-03-2000013188852023-07-102023-07-1000013188852023-09-082023-09-0800013188852023-12-042023-12-0400013188852024-08-302024-08-3000013188852024-12-182024-12-1800013188852023-06-092023-06-090001318885us-gaap:WarrantMember2023-12-140001318885dsx:IfAllWarrantsAreExercisedMember2025-12-310001318885us-gaap:WarrantMember2025-12-310001318885us-gaap:WarrantMember2024-12-310001318885us-gaap:WarrantMember2025-01-012025-12-310001318885us-gaap:WarrantMember2024-01-012024-12-310001318885us-gaap:WarrantMember2023-01-012023-12-310001318885us-gaap:SubsequentEventMember2026-02-260001318885us-gaap:BuildingMember2024-12-310001318885us-gaap:BuildingMember2025-12-310001318885us-gaap:FurnitureAndFixturesMember2024-12-310001318885us-gaap:OfficeEquipmentMember2024-12-310001318885us-gaap:VehiclesMember2024-12-310001318885dsx:CarMember2024-12-310001318885dsx:ComputerSoftwareAndHardwareMember2024-12-310001318885dsx:ImpairedVesselsMember2023-01-012023-12-310001318885dsx:ImpairedVesselsMember2024-01-012024-12-310001318885dsx:ImpairedVesselsMember2025-01-012025-12-310001318885dsx:ImpairedBuildingMember2023-01-012023-12-310001318885dsx:ImpairedBuildingMember2024-01-012024-12-310001318885dsx:ImpairedBuildingMember2025-01-012025-12-310001318885us-gaap:MaritimeEquipmentMember2025-12-310001318885us-gaap:SalvageValueMember2025-01-012025-12-310001318885us-gaap:SalvageValueMember2023-01-012023-12-310001318885dsx:SteamshipShipbrokingEnterprisesMember2025-01-012025-12-310001318885dsx:SteamshipShipbrokingEnterprisesMember2024-01-012024-12-310001318885dsx:SteamshipShipbrokingEnterprisesMember2023-01-012023-12-310001318885dsx:SteamshipShipbrokingEnterprisesMember2025-12-310001318885dsx:BergenJointVentureMember2023-01-012023-12-310001318885dsx:BergenMemberdsx:AdministrativeServiceAgreementMember2023-01-012023-12-310001318885dsx:BergenMemberdsx:CommissionOnLoanGuaranteeMember2024-01-012024-12-310001318885dsx:BergenMemberdsx:CommissionOnLoanGuaranteeMember2023-01-012023-12-310001318885dsx:BergenMember2024-12-310001318885dsx:WindwardMember2023-01-012023-12-310001318885dsx:EcogasholdingsasmemberMemberdsx:DianagasincmemberMember2025-01-012025-12-310001318885dsx:EcogasholdingsasmemberMemberdsx:DianagasincmemberMember2025-12-310001318885dsx:OceanpalMember2023-01-012023-12-310001318885dsx:OceanpalMemberus-gaap:CommonStockMember2024-12-310001318885dsx:SeriesCConvertiblePreferredStockMemberdsx:OceanpalMember2023-10-170001318885dsx:SeriesCConvertiblePreferredStockMemberdsx:OceanpalMember2023-10-172023-10-170001318885us-gaap:SeriesBPreferredStockMemberdsx:OceanpalMember2024-01-012024-12-310001318885dsx:SeriesCConvertiblePreferredStockMemberdsx:OceanpalMember2025-12-310001318885dsx:SeriesCConvertiblePreferredStockMemberdsx:OceanpalMember2025-01-012025-12-310001318885dsx:BergenMember2025-11-190001318885dsx:OceanpalMemberus-gaap:CommonStockMember2025-12-310001318885dsx:GencoShippingAndTradingMember2025-12-310001318885dsx:GencoShippingAndTradingMember2025-01-012025-12-310001318885dsx:NationalBankOfGreeceSaMember2025-09-290001318885dsx:NationalBankOfGreeceSaMember2025-12-310001318885dsx:NationalBankOfGreeceSaMember2025-01-012025-12-310001318885dsx:WindwardMember2025-12-310001318885dsx:EcogasholdingsasmemberMember2025-12-3100013188852025-09-112025-09-1100013188852025-12-172025-12-170001318885us-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembersrt:MinimumMember2023-01-012023-12-310001318885us-gaap:SubsequentEventMember2026-01-292026-01-290001318885us-gaap:RestrictedStockMember2025-02-252025-02-250001318885us-gaap:RestrictedStockMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2025-02-252025-02-250001318885us-gaap:RestrictedStockMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2025-02-252025-02-250001318885dsx:GencoShippingAndTradingMember2025-11-242025-11-240001318885us-gaap:SubsequentEventMemberdsx:GencoShippingAndTradingMember2026-01-292026-01-290001318885us-gaap:SeriesBPreferredStockMemberdsx:OceanpalMember2025-10-282025-10-280001318885us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-12-310001318885dsx:DianaEnergizeMemberdsx:WindwardMember2025-05-050001318885dsx:DianaEnergizeMemberdsx:WindwardMember2025-05-052025-05-050001318885dsx:DianaEnergizeMemberdsx:WindwardMember2023-11-072023-11-070001318885dsx:DianaEnergizeMemberdsx:WindwardMember2023-11-070001318885dsx:DianaMarinersMemberdsx:CebuMember2025-01-012025-12-310001318885dsx:DianaMarinersMemberdsx:CebuMember2024-01-012024-12-310001318885dsx:DianaMarinersMemberdsx:CebuMember2023-01-012023-12-310001318885dsx:NordeaBankMember2025-12-310001318885dsx:NordeaBankMemberdsx:LoanAgreement9UltramaxVesselsMember2022-09-300001318885dsx:NordeaBankMemberdsx:LoanAgreement9UltramaxVesselsMember2022-09-302022-09-300001318885dsx:NordeaBankMemberdsx:LoanAgreement9UltramaxVesselsMember2022-12-012022-12-310001318885us-gaap:SubsequentEventMemberdsx:GencoShippingAndTradingMemberdsx:DnbCarnegieAndNordeaMember2026-02-260001318885dsx:OceanpalMemberus-gaap:CommonStockMember2025-01-012025-12-31iso4217:EURiso4217:USDxbrli:purexbrli:sharesiso4217:USDxbrli:sharesdummy:Vesselsdummy:Item
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, 2025
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)
Ms Maria Dede
Pendelis 16
,
175 64 Palaio Faliro
,
Athens
,
Greece
Tel:
+
30
-
210
-
9470-100
, Fax: +
30-210-9470-101
E-mail:
mdede@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, 2025, there were
115,787,434
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
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;
●
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
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.
7
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 bullets below 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.
●
Our
operations
expose
us
to
global
risks,
such
as
political
instability,
terrorist
or
other
attacks,
war,
international
hostilities,
economic sanctions
or
other
trade
restrictions,
and
public
health
concerns,
which
may
affect
the
seaborne
transportation
industry
and
adversely affect our business.
●
An increase in the price of fuel, or bunkers, may adversely affect our
profits.
8
●
We are
subject to
complex laws
and regulations, including
environmental regulations that
can adversely affect the cost, manner or feasibility of doing business.
●
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 United
Kingdom, the European Union,
the United Nations, or other governmental
authorities, or engage in other
such transactions
or dealings
that would
be violative
of applicable
sanctions laws, 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
has inherent uncertainties
that could
limit the legal protections available to us.
Company Specific Risk Factors
●
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.
●
A cyber-attack could materially disrupt our business.
●
Our
earnings may
be adversely
affected if
we are
not able
to take
advantage of
favorable
charter rates.
●
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.
●
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.
●
Technological innovation and
quality and
efficiency requirements
from our
customers could
reduce our charter hire income and affect the demand and the value
of our vessels.
●
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.
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.
●
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.
9
●
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 influence
over matters
on
which our shareholders are entitled to vote.
●
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
the 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, outstanding
warrants 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
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
vessels have
in the
past
declined below the
operating costs of
vessels. When we
charter our
vessels pursuant to
short-term time
charters, we
are exposed
to changes
in short-term
charter rates
for dry
bulk carriers
and such
changes
may affect our earnings. 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. We
cannot assure
you that
we will
be able
to successfully
charter our
vessels in
10
the
future
or
renew
existing
charters
at
rates
sufficient
to
allow
us
to
meet
our
obligations
or
pay
any
dividends in the future. 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
2025,
dry
bulk
shipping
showed
mixed
performance
across
vessel
sizes.
Capesizes
remained
the
strongest, supported
by steady long-haul
iron ore
and bauxite trades
and expectations
for new projects
like
Simandou. Panamax
and Supramax
markets softened
due to
increased vessel
supply and
weaker Chinese
demand, but Panamax
activity was risen
mid year
driven by strong
Brazilian soyabean and
corn exports
from
ECSA,
although
oversupply
and
softer
Chinese
buying
still
pressured
rates.
Ongoing
conflicts,
geopolitical
tensions,
U.S.–China
tariffs,
and
shifting
trade
policies
added
further
uncertainty,
making
scheduling and freight levels
less predictable. At the
same time, FuelEU Maritime
and the expanding EU
ETS added cost pressure as ships calling EU ports faced stricter
fuel rules and rising obligations.
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;
●
availability of credit to finance international trade;
●
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,
such
as
those
between
Russia and Ukraine and between the U.S.
and its allies, and Iran, trade disruption
in the Red Sea
region 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, strikes, import and export
restrictions, nationalizations, piracy,
and terrorist attacks;
●
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;
11
●
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;
●
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
●
changes in environmental and other regulations that may limit the useful lives and trading patterns
of vessels.
In
addition
to
the
prevailing
and
anticipated
charter
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
12
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
drybulk vessels and
the charter rates
of the drybulk
market
will be dependent upon economic
recovery and growth in
the United States, Europe, Japan,
China, India
and the overall world economy,
as well as seasonal
and regional changes in demand and changes to the
capacity
of the
world fleet.
The capacity
of
the world
fleet may
increase and
economic growth
may
not
continue. Adverse
economic, political,
social or
other developments
could also
have a
material adverse
effect on our business 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.
Global economic conditions may negatively impact the drybulk shipping
industry.
Economic
growth
is
expected
to
remain
resilient
in
2026
and
2027,
despite
significant
challenges,
as
inflation is expected to continue to ease further. However,
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
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.
Although China
met its
official growth
target of
5% in
2025, the
growth of
China’s
economy has a
2026 real growth
target of 4.5%–5.0%,
as there is
a continued threat
of a Chinese
financial
crisis
resulting
from
deteriorating
real
estate
property
values,
excessive
personal
and
corporate
indebtedness and “trade wars.”
An economic slowdown in China,
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.
The dry bulk
carrier charter market 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
13
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 2025, the BDI ranged
from
a low of
715 to a
high of 2,845
and closed at
1,972 on March
12, 2026. 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
oversupply of vessels, easing
of port congestion, slower
demand growth and
economic and
geopolitical factors.
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.
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
previous
year
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
rose 2.9%
and 2.7%
in December 2024
and 2025,
respectively,
compared to the prior year. 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.
Our operations
expose us
to global
risks, such
as political
instability, terrorist
or other
attacks, war,
international
hostilities,
economic
sanctions
or
other
trade
restrictions,
and
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,
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,
including the current
political instability in the
Middle East, Ukraine, the
South China Sea region
and other geographic countries
and areas, geopolitical
events, acts
of terrorism,
war or threatened
war, and related international
hostilities.
The response
of the
United States
and others
to terrorist
attacks, as
well as
the threat
of future
terrorist
attacks around
the world,
continues to
cause uncertainty
in the
world’s financial
markets and
may affect
our business,
operating results,
and financial
condition. Continuing
conflicts and
recent developments
in
Venezuela,
Ukraine
and
the
Middle
East,
along
with
increased
tensions
between
the
U.S.
and
China,
Russia, Iran
and certain terrorist
organizations, as well
as the
presence of U.S.
or other
armed forces in
various other regions, may lead to additional acts of terrorism and
armed conflict around the world, which
may
contribute
to
further
economic
instability
in
the
global
financial
markets.
As
a
result
of
the
above,
insurers have increased premiums and reduced
or restricted coverage for losses caused
by terrorist acts
14
generally. These uncertainties could
also adversely
affect our ability
to obtain additional
financing on
terms
acceptable to us
or at all.
Any of these
occurrences could have
a material adverse
impact on our
operating
results,
revenues
and
costs.
Additionally,
events
in
other
jurisdictions
could
impact
global
markets,
including
foreign
exchange
and
securities
markets;
any
resulting
changes
in
currency
exchange
rates,
tariffs, treaties and other regulatory matters could in turn adversely impact our business
and operations.
In addition, the recent armed conflict between the U.S. and
its allies and Iran has led to severe disruption
and an effective
shutdown of the
Strait of Hormuz
and further disrupted trade
routes in the
Red Sea and
the
Gulf
of
Aden,
which have
been
affected
by
armed
attacks
on
ships
traveling
in
those
regions.
The
continued disruption of
such critical trade routes
could have significant
impacts in the Middle
East region
and on the
global economy,
which may adversely impact
oil markets and the
demand for dry-bulk vessel
capacity and charter rates.
Currently,
the Company’s charter
contracts, or our operations,
have not been
negatively
affected
by the
events
of
the
Ukraine War,
nor
the
Middle
East,
but
trade
routes
have been
disrupted. It
is possible
that in
the future
third parties
with whom
the
Company has
or will
have charter
contracts may
be impacted by
such events.
The Company
cannot predict what
effect the
higher price
of
oil, refined petroleum products
or certain dry-bulk
commodities will have on
demand, and it is possible
that
the conflicts in the Ukraine,
the Middle East and elsewhere
could adversely affect the Company’s financial
condition, results of operations, and future performance.
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,
along with
economic sanctions
or other
trade
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, in the Black
Sea in connection with
the conflict
between Russia and
Ukraine,
and in
and around
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,
among
others.
Any
of
these
occurrences could have
a material
adverse impact on
our future
performance, results of
operation, cash
flows and financial position.
Beginning in
February of
2022, the
United States,
the United
Kingdom and
the European
Union, among
other
countries,
announced
various
economic
sanctions
against
Russia
in
connection
with
the
aforementioned conflicts
in the
Ukraine region,
which may
adversely impact
our business.
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 continuation of the
conflict in Ukraine and any
other potential resolution thereof,
it is possible
that such tensions could adversely
affect the Company’s business, financial
condition, results of operation
and cash flows.
The United States
has issued several
Executive Orders
that prohibit certain
transactions related to
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 Russia by
U.S.
persons,
among
other
prohibitions
and
export
controls,
and
has
issued
numerous
determinations
authorizing the
imposition of
sanctions on
persons who
operate or
have operated
in the
energy,
metals
and mining,
and marine sectors
of the
Russian Federation economy,
among others.
Designations under
these sanctions
programs are
continuing, including
in October
2025 against
Lukoil and
Rosneft, and
certain
of their subsidiaries. Increased
restrictions on these sectors,
or the expansion of
sanctions to new sectors,
may pose additional risks that could adversely affect our business and operations.
15
Our business could be adversely impacted by trade tariffs,
trade embargoes or other economic sanctions
that limit trading
activities between the United
States or other countries
and 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 ongoing tensions
involving Russia, Iran,
and China and
the current conflicts
between Russia
and Ukraine and in the Middle East.
An increase in
trade protectionism,
the unravelling of
multilateral trade
agreements and
a decrease
in the level
of China’s export
of goods and import
of raw materials could
have a material
adverse
impact
on
our
charterers’
business
and,
in
turn,
could
cause
a
material
adverse
impact
on
our
results of operations, financial condition and cash flows.
Our operations expose
us to the
risk that increased
trade protectionism
may adversely affect
our business.
Recently,
government leaders
have declared
that their
countries may
turn to
trade barriers
to protect
or
revive their domestic industries
in the face of
foreign imports, thereby
depressing the demand
for shipping.
The U.S.
government has
made statements
and taken
actions that
may impact
U.S. and
international trade
policies, including
tariffs affecting
certain Chinese
industries. Additionally,
there is
significant uncertainty
about the future relationship between
the United States and
China and other countries, such
as Canada,
Mexico,
and
the
European
Union,
among
others,
with
respect
to
trade
policies,
treaties,
government
regulations, and
tariffs, some of
which remain
subject to
legal challenge.
It is unknown
whether and
to what
extent such tariffs will
be retained, expanded,
or otherwise modified
by the U.S.,
or the effect that
any such
actions
or
any
actions taken
by
other
countries in
response
will have
on
us
or
our
industry.
If
any new
tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or,
in particular,
if the U.S.
government pursues additional
retaliatory trade actions
due to the
ongoing U.S.-
China trade
tension, such
changes could
have an
adverse effect
on our
business, results
of operations
and financial condition.
For
example,
beginning
in
April
2025,
the
Office
of
the
United
States
Trade
Representative
(USTR)
implemented service fees on Chinese vessel operators and owners, as well as operators of Chinese-built
vessels, and for
certain car carriers
and roll-on/roll-off vessels
calling at U.S.
ports. Such service
fees were
initially
imposed
as
scheduled beginning
on
October
14,
2025,
but
were suspended
for
one
year
as
of
November
10,
2025
as
a
result
of
broader
trade
negotiations
between
the
U.S.
and
China.
China
had
imposed retaliatory service fees on
U.S. vessels, which were also
suspended for a period of
one year on
the same date.
It is unknown
whether and to
what extent these
port fees will
be reimposed following
the
one-year suspension, or the effect that they might have on us or our industry generally.
Furthermore, the government of China has
implemented economic policies aimed at increasing domestic
consumption of Chinese-made goods. This may have the effect of reducing the supply of goods available
for export and may,
in turn, result in a decrease of
demand for shipping. Many of the reforms, particularly
some limited price reforms that result
in the prices for certain commodities
being principally determined by
market forces, are unprecedented or experimental and may be subject
to revision, change or abolition.
Restrictions
on
imports, including
in
the
form
of
tariffs,
could
have
a
major
impact
on
global
trade
and
demand for shipping. Specifically,
increasing trade protectionism in the markets
that our charterers serve
may cause
an increase
in (i)
the cost
of goods
exported from
exporting countries,
(ii) the
length of
time
required
to
deliver
goods
from
exporting
countries,
(iii)
the
costs
of
such
delivery
and
(iv)
the
risks
associated with
exporting goods.
These factors
may result
in a
decrease in
the quantity
of goods
to be
shipped, shipping time
schedules, voyage costs and
other associated costs.
Protectionist developments,
or the perception they may occur, may have a material adverse effect on global economic conditions, and
may
significantly
reduce
global
trade,
including
trade
between
the
United
States
and
China.
These
developments
would
also
have
an
adverse
impact
on
our
charterers’
business,
operating
results
and
financial condition which could,
in turn, affect
our charterers’ ability to
make timely charter
hire payments
to us
and impair
our ability
to renew
charters and
grow our
business. Any
of these
developments could
16
have a material
adverse effect on
our business, results
of operations and
financial condition,
as well as
our
cash flows, including cash available for dividends to our stockholders.
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.
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
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; (vi) the effect such
an
outbreak would have on the
global business environment and
the demand for the goods we
transport; (vii)
governmental
responses;
and
(viii)
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
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. As China is the most significant market for dry bulk shipping, the public holidays in relation to the
Chinese New Year during the
first quarter usually
results in a
decrease in
market activity during
this period.
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 March
31 and June
30, and, conversely,
our revenues
may be stronger in
fiscal quarters ending September 30
and December 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, such
as the
ongoing conflict
between Russia
and Ukraine
and between
the
U.S. and
its
allies, and
Iran, 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.
17
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,
thereunder,
the
International
Convention
for
the
Safety
of
Life
at
Sea
(SOLAS),
the
International
Convention on
Load Lines
of 1966,
the International
Convention of
Civil Liability for
Bunker Oil
Pollution
Damage,
and
the
International
Safety
Management
(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 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.
These
numerous
and
sometimes
conflicting
laws
and
regulations
include,
among
others,
data
privacy
requirements (in
particular the
European General
Data Protection
Regulation, enforceable
as from
May 25,
2018,
labor
relations
laws,
tax
laws,
anti-competition
regulations,
import
and
trade
restrictions,
export
requirements, U.S. laws such as the
FCPA and other U.S. federal laws and regulations established
by the
OFAC or other local laws which prohibit corrupt
payments to governmental
officials or certain payments or
remunerations to customers.
18
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
related
procedures
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, environmental
accidents, bad
weather
and natural disasters
or other disasters
outside our control
and other acts
of God, business
interruptions
caused
by
mechanical
failures,
grounding,
fire,
explosions
and
collisions,
human
error,
war,
terrorism,
piracy, robbery,
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 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
reduce our revenue or increase
our expenses and also
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
or
the
loss
of
any
of
our
vessels
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 not covered by
our insurance, would decrease our
earnings and
available
cash
and
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
19
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, which could harm
our reputation as
a safe and reliable
vessel owner and
operator.
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.
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 United Kingdom, the European
Union, the United
Nations, or other
governmental authorities, or engage
in other such
transactions or dealings that
would be
violative of
applicable sanctions
laws, it
could lead
to monetary
fines or
penalties and
may adversely affect our reputation and the market for our securities.
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 or
from countries and territories
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, 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 vary
in their application,
and by jurisdiction,
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.,
U.K.
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, embargoes
or blockades imposed
by the United States,
U.K., 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 2025 and
up to the date of this
annual report, and intend
to maintain such compliance,
there
20
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. Further,
our reputation
and the
market for
our securities
may be
adversely affected
if, for
example, we
enter into
charters
with
individuals
or
entities
who,
pursuant
to
contracts
with
third
parties,
provide
services
to
or
engage in operations associated with countries or territories that
are the subject of certain U.S. sanctions
or embargo laws. Investor perception
of the value of our
common stock may also
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,
or stowaways,
whether inside
or attached to
the hull of
our vessel and
whether with
or without the 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.
Under some jurisdictions, vessels used for
the conveyance of illegal drugs could
result in forfeiture of the
subject vessel to the government of such jurisdiction.
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 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
21
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.
Although
none
of
our
vessels
have
been
requisitioned
by
a
government
for
title
or
hire,
a
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
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
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.
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
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:
22
●
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;
●
scrap values;
●
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.
In
addition,
as
vessels
grow
older,
they
generally
decline
in
value.
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,
2025,
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.
Conversely, if vessel
values are
elevated at
a time
when we
wish to acquire
additional
vessels,
the
cost
of
acquisition
may
increase
and
this
could
adversely
affect
our
business,
results
of
operations, cash flow and financial condition.
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 while
short-term time
charter and
spot market rates
for some
dry bulk carriers
were at
or below
operating costs
in early
2025,
conditions have improved since then. We cannot assure you
that future charter hire rates will enable
us to
operate our vessels profitably, or to pay dividends.
23
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, including navigation,
provision of services, propulsion,
machinery management, power control,
communications and cargo management. We have in
place safety and security measures on our
vessels
and onshore
operations to
protect our
vessels against
cyber-security attacks
and any
disruption to
their
information systems.
Information systems
are vulnerable
to security breaches
occurred from unauthorized
access by various threat
actors (e.g., hackers, terrorists,
script kiddies, etc.). We rely
on industry accepted
security measures
and technology
to securely
maintain confidential
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. We
do not
maintain cyber-liability
insurance at
this time
to cover
such losses.
Any significant
interruption or
failure of our information systems or any significant breach of security could adversely affect our business
and results
of operations.
We have
taken extensive
measures to
enhance our
security infrastructure,
reform
network architecture, and implement rigorous
security policies, culminating in
ISO 27001 certification. Key
initiatives include
conducting regular
security testing,
maintaining business
continuity and
disaster recovery
capabilities, and
operating incident response
programs supported by
a 24/7
Security Operations Center.
We
have
also
expanded
our
security
awareness
and
training
program
to
enhance
employee
vigilance
against
cyber
threats.
Despite
these
improvements
we
cannot
assure
you
that
we
will
be
able
to
successfully thwart all future attacks without 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 a threat and any potential impact.
24
As
cyberattacks
become
increasingly
sophisticated,
and
as
tools
and
resources
become
more
readily
available to
attackers, including
the risk associated
with the use
of emerging
technologies, such
as artificial
intelligence and quantum
computing for nefarious
purposes, there can
be no
guarantee that our
actions,
security measures and controls
designed to prevent, detect
or respond to intrusion,
to limit access to
data,
to prevent
destruction or alteration
of data
or to
limit the
negative impact from
such attacks,
can provide
absolute security against compromise. In
2025, we initiated the creation
of a draft AI
policy to govern the
usage of
AI tools
within the
organization. Furthermore,
we selected
a training
provider for
an AI
training
workshop to upskill employees on the risks
and benefits of AI technology.
While we utilize AI-driven tools
within
our
security
stack
(such
as
within
our
SIEM
and
SOC
solutions),
we
continue
to
monitor
the
regulatory environment
regarding AI disclosures
and, at this
stage, we do
not expect AI
to cause increased
risk to our industry or business.
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
cyber
threats
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. A
failure to disclosure could result
in the
imposition of
injunctions, fines
and other
penalties by
the
SEC. Complying
with these
obligations
could
cause
us
to
incur
substantial
costs
and
could
increase
negative
publicity
surrounding
any
cybersecurity incident.
During the
year ended
December 31,
2025, 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 on our cybersecurity policies, please see
“Item 16K. Cybersecurity.”
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 Energy Efficiency Design Index
(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.
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
25
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
related
to
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,
particularly those
outside the
United States, 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.
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.
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
26
our progress toward achieving our environmental goals and commitments, the resulting negative publicity
could adversely affect our reputation and/or our access to capital.
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
short
to
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.
At the expiration of our charters or if
a charter terminates early for any
reason or when we acquire vessels
charter-free, we
will need
to charter
or recharter
our vessels.
If an
excess of
vessels is
available on
the
spot or short-term
market at the
time we are
seeking to
fix new longer-term
charters, we
may have difficulty
entering into
such charters
at all
or at
profitable rates
and for
any term
other than
short term
and, as
a
result,
our
cash
flow may
be
subject to
instability in
the
mid
to
long-term. In
addition, it
would be
more
difficult to
fix relatively older
vessels should there
be an
oversupply of younger
vessels on the
market. A
depressed spot
market may require
us to
enter into short-term
spot charters
based on prevailing
market
rates, which could result in a decrease in our cash flow.
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.
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.
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;
27
●
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.
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.
Generally,
we do not receive
the benefit of
warranties on secondhand vessels.
Accordingly, we
may not
discover defects or
other problems with
secondhand vessels prior
to purchasing or
chartering-in. Any such
hidden defects or
problems may be
expensive to repair
and 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.
The market prices of
secondhand and newbuilt
vessels also tend to
fluctuate with changes in
charter rates
and, if we sell the vessels, the sales prices may be less than their
carrying values at that time.
In general, the costs to maintain a vessel in
good operating condition increase with the age of the vessel.
As
of
the
date
of
this
annual
report,
our
fleet
consists
of
38
vessels
of
which
36
vessels,
owned
and
chartered-in, are in operation,
having a combined carrying
capacity of 4.1 million dead
weight tons, or dwt,
and a weighted average age of
12.3 years and two vessels are under construction.
As our fleet ages, we
will
incur
increased
costs.
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.
28
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. As a
result, regulations and
standards could have
a material adverse
effect on our business,
financial condition,
results of operations, cash flows and ability to pay dividends.
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, work stoppages
or other labor disturbances
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.
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. Furthermore, it
is possible that
parties with whom we
have charter contracts may
be impacted
by events in Russia and Ukraine and in the Middle East, including in the Red Sea area,
and any resulting
sanctions.
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.
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
29
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 affect the demand 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
vessels,
competition
from
the
current
eco
vessels
and
any
more
technologically
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. In these circumstances, we may
also be
forced to
charter our
vessels to
less creditworthy
charterers, either
because top
tier charters
will not
charter
older
and
less
technologically
advanced
vessels
or
will
only
charter
such
vessels
at
lower
contracted
charter
rates
than
we
are
able
to
obtain
from
these
less
creditworthy,
second
tier
charterers.
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 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.
Developments in technology could also affect global
trade flows and supply chains causing disruptions in
the
demand
for
our
vessels.
Decreasing
the
cost
of
labor
through
automation
and
digitization
and
increasing
the
consumers
power
to
demand
goods,
technology
is
changing
the
business
models
and
production of
goods in many
industries. Consequently,
supply chains are
being pulled closer
to the end-
customer
and
are
required
to
be
more
responsive
to
changing
demand
patterns.
As
a
result,
fewer
intermediate and raw inputs are
traded, which could lead to
a decrease in shipping activity.
If automation
and digitization become more
commercially viable and/or production
becomes more regional or
local, total
dry-bulk
volumes would
decrease,
which would
adversely affect
demand for
our services.
Supply chain
disruptions
caused
by
geopolitical
events,
rising
tariff
barriers
and
environmental
concerns
may
also
accelerate these trends.
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.
Additionally, our insurers may
refuse to pay
particular claims
and
our insurance may
be voidable by
the insurers if
we take, or
fail to take,
certain action, such
as failing to
maintain certification of our vessels with applicable maritime regulatory organizations. 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
30
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. In
addition, we
do not presently
carry loss-of-hire
insurance, which
covers
the
loss
of
revenue
during
extended
vessel
off-hire
periods,
such
as
those
that
might
occur
during
an
unscheduled drydocking due to damage to the vessel from a major accident. Accordingly, any vessel that
is off hire
for an extended period
of time, due to
an accident or
otherwise, could have a material
adverse
effect on our business, results of operations and financial condition.
We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm
results of operations.
We
generate all
of our
revenues in
U.S. dollars
but incur
approximately 30%
of our
operating expenses
and
around
half
of
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 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
2025, 2024, and 2023, 29%, 11% and 13%, respectively, of our revenues were derived from two, one 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. The ability
of our subsidiaries
to make these
distributions may become
subject to restrictions
contained
in
those
subsidiaries’ financing
agreements
and could
be
affected
by
a
claim
or
other
action
by a
third
party,
including
a
creditor,
or
by
Marshall
Islands
law
which
regulates
the
payment
of
dividends
by
companies.
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
joint
venture
arrangements,
pursuant
to
which
we
own
minority
interests
in
four
commissioning service
operation vessels
through Windward
Offshore
GmbH &
Co. KG,
in one
dry bulk
vessel through Bergen Ultra, which however was sold in January 2026 and majority interests
in two 7,500
cbm LPG vessels under
construction through Ecogas
Holding AS, scheduled
for delivery in 2027.
We may
enter into
additional joint venture
arrangements in the
future. We
share voting and
operational control of
31
these joint ventures
and the operations
of these vessels.
Our joint venture
partners may
have interests
that
are different
from ours
which may result
in conflicting views
as to
the operation
of the
vessels owned by
the joint ventures or the conduct of the business
of the joint ventures. We may not be able to resolve
such
conflicts
in
our
favor
and
such
conflicts
or
differing
views
could
have
a
material
adverse
effect
on
our
interest in these joint ventures.
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.
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.
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.
32
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,
suppliers
and
integrating newly acquired assets and operations into existing infrastructure. If we
are unable to grow our
financial and operating
systems or to
recruit suitable employees,
should we decide
to expand our
fleet, our
financial performance may be
adversely affected, among other
things. 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 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.
The application
of the exemption
under Section
883 of
the Code
is highly
fact-dependent. There
are factual
circumstances beyond our control that could cause us
to lose the benefit of
this tax exemption in 2025 or
any
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 not 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 2025
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.
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.
33
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
Ta
xation
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.
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 for
companies
with
global
revenues
of
more
than
€20
billion;
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
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
34
of improving market conditions in 2021, our
board of directors elected to declare quarterly dividends from
the fourth quarter of 2021 until the
fourth quarter of 2025 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
when
our
lenders impose
restrictions
on
our
ability
to
pay
dividends,
may
affect
our
dividend
policy.
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.
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:
35
●
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 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 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;
●
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 strategic
alliances, acquisitions or other
investments;
●
legislative, administrative, regulatory or
other actions affecting our business,
our industry;
●
investigations, proceedings, or litigation
that involve or affect
us;
36
●
the occurrence of any of the
other risk factors included in
this annual report; and
●
general state of the securities markets,
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.
We are a
“foreign private issuer” under the
NYSE rules, and as such we
are entitled to exemption
from certain NYSE
corporate governance standards,
and you may
not have the
same protections
afforded to
shareholders of
companies that
are subject
to all
of the
NYSE corporate
governance
requirements.
We are a “foreign private issuer” under the
securities laws of the United States
and the rules of the NYSE.
Under the securities laws of
the United States, “foreign private
issuers” are subject to different
disclosure
requirements than U.S. domiciled
registrants, as well
as different financial
reporting requirements. Under
the NYSE rules, a “foreign private
issuer” is subject to less stringent corporate
governance requirements.
Subject to
certain exceptions,
the
rules of
the
NYSE permit
a “foreign
private issuer”
to follow
its home
country practice in lieu of the listing requirements of the NYSE.
Accordingly, you may
not have
the same
protections afforded
to shareholders
of companies
that are
subject
to all of the
NYSE corporate governance requirements. For a
list of the practices followed
by us in lieu
of
NYSE’s corporate
governance rules, we
refer you to
the section of
this annual report
entitled "Corporate
Governance" under Item 16G.
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.
37
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,
Ms.
Semiramis
Paliou,
our
Chief
Executive
Officer
and
Director,
beneficially owns 27,809,560 shares, or approximately 21.5% of
our outstanding common stock, which is
held
indirectly
through
entities
over
which
she
exercises
sole
voting
power.
Ms.
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,
Ms.
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 Ms.
Paliou and
the entities
controlled by
Ms. 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, 2025, 115,787,434 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.
38
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 an Amended and Restated
Stockholders Rights Agreement, dated February
2,
2024, 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. See “Item 10.
Additional Information-
B. Memorandum and Articles of Association-Stockholders Rights
Agreement.”
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.
39
The existence of the Series B Preferred
Shares 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.
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
40
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
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
41
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.
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
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.
As
of
December 31,
2025,
we have
issued 9.9
million shares
of common
stock
and we
could issue
up
to 27.1
million additional 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
. The information
contained
on or connected to our website is not part of this annual report.
Recent Developments
Genco Acquisition Proposal
During 2025, we acquired 6,413,151 shares of common stock
of Genco Shipping and Trading
Limited, or
Genco, representing
approximately 14.8%
of Genco’s
outstanding shares
for $103.5
million. On
November
24, 2025, we submitted
to Genco’s board of directors
a proposal to acquire
all of the outstanding
shares of
Genco
we did
not already
own for
a price
of $20.60
per share
in cash.
On
January 16,
2026, following
42
Genco’s rejection of our proposal we announced our intention to nominate a slate of independent director
candidates for election
on the Genco
board. On March
6, 2026, we increased
our offer to $23.50
per share
in cash. This acquisition proposal would be financed by a $1.43 billion fully committed facility arranged by
DNB
Carnegie and
Nordea,
and
with
participation of
other
international banks.
Also
on March
6,
2026,
Diana entered into a
definitive agreement with
Star Bulk Carriers Corp.,
or Star Bulk,
to acquire 16
vessels
of Genco for $470.5 million in cash upon, and subject to, the consummation
of an acquisition of Genco by
Diana.
Joint Venture Agreements
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 increased
our commitment
to Euro
50.0 million,
being
45.87% of
Windward’s capital
in order
for the
partnership to
place orders
for two
additional CSOVs.
On
May 5, 2025, a new partner was admitted to Windward which reduced our ownership percentage to 34%.
In 2023,
2024 and 2025,
we invested Euro
9.7 million or
$10.3 million, Euro
25.0
million or
$27.1 million
and Euro
7.6 million or
$8.0 million,
respectively and in
2025 after
the admission
of the
new partner,
we
received Euro
3.1 million
or $3.5
million, as
return of
capital. As
of the
date of
this annual
report, we
invested
Euro 1.3 million or $1.5 million and the remaining commitment amounts
to Euro 9.4 million.
On March 12, 2025,
we entered into a
joint venture agreement with
an unrelated party to
establish Ecogas
Holding AS,
pursuant to
which we
agreed to
contribute $18.5
million, being
80.0% interests
of two
LPG
newbuilding
vessels
with
delivery
in
2027.
During
2025,
we
invested
$10.2
million
out
of
the
total
commitment.
In November 2025, Bergen Ultra
LP,
a limited partnership in which
we have 25% interest,
agreed to sell to
an unrelated third party,
the vessel DSI Drammen,
for $26.4 million. The vessel was delivered to her
new
owners on January 9, 2026
and we received $3.7 million as return of capital.
Tender offer
In
December 2024,
we
announced
the
commencement of
a
tender
offer
to
purchase
up
to
15,000,000
shares,
or
about
12.0%,
of
our
outstanding
common
stock
using
funds
available
from
cash
and
cash
equivalents
at
a
price
of
$2.00
per
share.
The
tender
offer
was
settled
on
January
7,
2025
and
we
purchased a total of 11,442,645 shares of common stock for an aggregate amount of $23.0 million.
Dividends
On
March 21,
2025, we
paid
a
cash dividend
of $0.01
per share,
or
$1.2 million,
to
all
shareholders of
record as of March 12, 2025.
On June 24, 2025,
we paid a cash
dividend of $0.01
per share, or $1.2 million,
to shareholders of record
as of June 17, 2025.
On September
11
, 2025,
we paid
a cash
dividend of
$0.01 per
share, or $1.2
million, to
shareholders of
record as of August 21, 2025.
On December
17, 2025,
we paid
a cash
dividend of
$0.01 per
share, or
$1.2 million,
to shareholders
of
record as of December 8, 2025.
On February 26, 2026, we declared a cash dividend of $0.01
per share, or $1.2 million, payable on March
18, 2026 to shareholders of record as of March 11, 2026.
43
Loans
On September 29, 2025, we signed a $55 million six-year secured term loan facility with National Bank of
Greece S.A. The full amount was drawn down immediately.
The new loan maturing in September 2031 is
secured by five vessels.
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,
subject
to
adjustments,
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,
also subject
to adjustments.
Since the
dividend ex-Date
on March
11
, 2026, each
Warrant entitles the
holder to purchase 1.12097
shares of common stock
plus the Bonus
Share Fraction adjusted to 0.56050 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
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 a 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
shelf
registration
statement on
Form
F-3
declared
effective
on
July
9,
2021
expired
and
the
Warrant
distribution
is
now
being
offered
pursuant
to
our
existing
shelf
registration
statement on Form F-3 declared effective on September 9, 2024.
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, 6,410,343
Warrants have been exercised and 9,866,677 common shares have been issued.
Appointment of new Co-Chief Financial Officer
Effective January
17, 2025, we
appointed Ms. Maria
Dede as the
Company’s Co-Chief Financial
Officer.
In addition, effective January 1, 2026, she was appointed Co-Chief Financial
Officer and Treasurer.
44
Effective January 1, 2026, Mr.
Ioannis Zafirakis is the Company’s President, Mr.
Evangelos Sfakiotakis is
the Company’s Chief Technical
Investment Officer and Ms. Margarita Veniou is the
Company’s Secretary
and Corporate Contact.
Vessels under construction
In February
2024, we
signed an
agreement
with an
unaffiliated third
party, for the
construction of
two 81,200
dwt methanol
dual fuel
new-building
Kamsarmax dry
bulk vessels
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.
Vessel acquisitions
In
August
2022,
we
entered
into
a
master
agreement
with
an
unaffiliated
third
party,
to
acquire
nine
Ultramax vessels for
an aggregate purchase
price of $330
million, of which
$220 million payable
in cash
and
$110
million
through
an
aggregate
of
18,487,393
newly
issued
common
shares,
issuable
on
the
delivery
of
each
vessel.
In
addition
to
the
master
agreement,
we
also
entered
into
nine
separate
memoranda of agreement for the acquisition of each vessel and issued nine warrants to the seller, for the
issuance of the shares, exercisable on the delivery date of each vessel. We took delivery of eight vessels
in December 2022 and the ninth vessel in January 2023.
Vessel disposals
In June 2025, we agreed to sell to an unrelated
third party, the vessel Selina,
for $11.8
million. The vessel
was delivered to her new owners on July 15, 2025.
In February 2025, we agreed to sell to an unrelated third party, the vessel Alcmene, for $11.9
million. The
vessel was delivered to her new owners on March 13, 2025.
In February 2024, we agreed to sell to an unrelated third party,
the vessel Houston, for $23.3 million. The
vessel was delivered to her new owners on September 4, 2024.
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 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 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
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.
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 38
vessels of
which 36
in operation,
owned and
chartered-
45
in, having
a combined carrying
capacity of
4.1 million dead weight
tons, or
dwt, and
a weighted average
age of
12.3 years. We
also have
two Kamsarmax vessels
under construction with
expected deliveries in
2027 and 2028.
As of December
31, 2025,
we had a
fleet of 36
dry bulk
carriers, owned and
chartered-in, consisting
of nine
Ultramax,
five
Panamax,
six
Kamsarmax,
four
Post-Panamax,
eight
Capesize
and
four
Newcastlemax
vessels, having
a combined
carrying capacity
of approximately
4.1 million
dwt and a
weighted average
age
of 12.1 years.
As of December
31, 2024,
we had a
fleet of 38
dry bulk
carriers, owned and
chartered-in, consisting
of nine
Ultramax,
six
Panamax,
six
Kamsarmax,
five
Post-Panamax,
eight
Capesize
and
four
Newcastlemax
vessels, having
a combined
carrying capacity
of approximately
4.2 million
dwt and a
weighted average
age
of 11.3 years.
As
of
December
31,
2023,
we
had
a
fleet
of
40
dry
bulk
carriers,
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.
During
2025,
2024
and
2023,
we
had
a
fleet
utilization
of
99.7%,
99.7%
and
99.7%,
respectively,
our
vessels achieved daily
time charter equivalent
rates of
$15,454, $15,267 and
$16,713, respectively,
and
we generated revenues of $213.5 million, $228.2 million and $262.1
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.
Currently,
the majority
of our vessels
are
employed on
short-
to medium-term
time charter
agreements.
We may
fix our
vessels on
short-, medium-
or
long-term
employment
depending
on
prevailing
market
conditions,
which
provides
us
with
flexibility
in
responding to market developments.
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 income in “Management fees to a related party” and “Voyage Expenses”.
Steamship
Shipbroking
Enterprises
Inc.,
or
Steamship,
a
related
party
controlled
by
our
CEO
Ms.
Semiramis Paliou,
provides brokerage services to us, since June 1, 2010. Brokerage fees are included in
“General
and
Administrative
expenses”
in
our
statement
of
income.
The
terms
of
this
relationship
are
currently governed by a Brokerage Services Agreement dated
February 25, 2026.
46
The following table presents certain information
concerning the dry bulk carriers in
our fleet, as of the date
of this annual report.
47
Fleet Employment (As of the date of this annual
report)
VESSEL
SISTE
R
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
13,500
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd.
8-Aug-25
1/Oct/2026 - 30/Nov/2026
2017 60,456
2
DSI Pollux
A
14,750
5.00%
Stone Shipping Ltd
9-Dec-25
1/Jan/2027 - 28/Feb/2027
2015 60,446
3
DSI Pyxis
A
13,100
5.00%
Stone Shipping Ltd
8-Nov-24
20/Mar/2026 - 20/Apr/2026
1
2018 60,362
4
DSI Polaris
A
12,250
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd.
1-Jul-25
21/Jul/2026 - 21/Sep/2026
2018 60,404
5
DSI Pegasus
A
14,250
4.75%
Cargill Ocean Transportation
(Singapore) Pte. Ltd
15-Aug-25
20/May/2026 - 20/Jul/2026
2015 60,508
6
DSI Aquarius
B
14,500
5.00%
Bunge SA, Geneva
7-Nov-25
1/Nov/2026 - 31/Dec/2026
2016 60,309
7
DSI Aquila
B
14,500
5.00%
Bunge SA, Geneva
12-Oct-25
25/Feb/2027 - 25/Apr/2027
2
2015 60,309
8
DSI Altair
B
14,750
5.00%
Bunge SA, Geneva
19-Jan-26
15/Jan/2027 - 30/Mar/2027
3
2016 60,309
9
DSI Andromeda
B
14,600
5.00%
Western Bulk Carriers AS
7-Dec-25
1/Apr/2027 - 31/May/2027
4
2016 60,309
5 Panamax Bulk Carriers
10
LETO
12,750
4.75%
Cargill International SA, Geneva
4-Apr-25
16/Jul/2026 - 16/Sep/2026
2010 81,297
11
MAERA
11,750
5.00%
CRC Shipping Pte. Ltd., Singapore
3-Nov-25
20/Oct/2026 - 20/Dec/2026
2013 75,403
12
ISMENE
11,000
5.00%
CRC Shipping Pte. Ltd.
24-Apr-25
20/Mar/2026 - 20/May/2026
2013 77,901
13
CRYSTALIA
C
13,900
5.00%
Louis Dreyfus Company Freight
Asia Pte. Ltd.
4-May-24
13-Mar-26
5
2014 77,525
16,200
5.00%
SwissMarine Pte. Ltd., Singapore
13-Mar-26
10/Mar/2027 - 10/May/2027
6
14
ATALANDI
C
10,100
5.00%
Stone Shipping Ltd
8-Jun-25
15/Jun/2026 - 15/Aug/2026
7
2014 77,529
6 Kamsarmax Bulk Carriers
15
MAIA
D
11,600
5.00%
Paralos Shipping Pte. Ltd.
9-Dec-24
16-Jan-26
8
2009 82,193
14,000
5.00%
16-Jan-26
5/Jul/2027 - 5/Sep/2027
16
MYRSINI
D
13,000
4.75%
Cargill International SA, Geneva
26-Feb-25
3-Jan-26
2010 82,117
13,500
5.00%
Paralos Shipping Pte. Ltd.
3-Jan-26
20/Dec/2026 - 20/Feb/2027
17
MEDUSA
D
13,000
4.75%
Cargill International SA, Geneva
16-Mar-25
15/May/2026 - 15/Jul/2026
2010 82,194
18
MYRTO
D
12,000
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
23-Dec-24
25/Mar/2026 - 15/May/2026
1
2013 82,131
19
ASTARTE
12,500
5.00%
Propel Shipping Pte. Ltd.
2-Aug-25
16/Aug/2026 - 16/Oct/2026
2013 81,513
20
LEONIDAS P. C.
14,000
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
24-Sep-25
15/Sep/2026 - 15/Nov/2026
2011 82,165
4 Post-Panamax Bulk Carriers
21
AMPHITRITE
E
12,100
5.00%
Cobelfret S.A., Luxembourg
8-Jan-25
12-Feb-26
9
2012 98,697
16,500
5.00%
12-Feb-26
1/Mar/2027 - 30/Apr/2027
10
48
22
POLYMNIA
E
14,000
5.00%
Oldendorff Carriers GmbH & Co.
KG
17-Aug-25
10/Apr/2026 - 10/Jun/2026
2012 98,704
23
ELECTRA
F
14,000
5.00%
Oldendorff Carriers GmbH & Co.
KG
7-Dec-25
1/Dec/2026 - 31/Jan/2027
2013 87,150
24
PHAIDRA
F
9,750
5.00%
SwissMarine Pte. Ltd., Singapore
31-May-25
27-Feb-26
2013 87,146
14,500
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
27-Feb-26
20/Feb/2027 - 20/Apr/2027
8 Capesize Bulk Carriers
25
SEMIRIO
G
16,650
5.00%
Solebay Shipping Cape Company
Limited, Hong Kong
11-Feb-25
15-Mar-26
11
2007 174,261
21,650
5.00%
15-Mar-26
31/Jan/2027 - 15/Apr/2027
12
26
NEW YORK
G
17,600
5.00%
SwissMarine Pte. Ltd., Singapore
11-Jan-25
20/Mar/2026 - 13/May/2026
1,13
2010 177,773
27
SEATTLE
H
24,500
5.00%
SwissMarine Pte. Ltd., Singapore
29-Nov-25
1/May/2027 - 30/Jun/2027
2011 179,362
28
P.
S. PALIOS
H
25,200
5.00%
Glencore Freight Pte. Ltd.
15-Dec-25
15/Nov/2026 - 15/Jan/2027
2013 179,134
29
G. P. ZAFIRAKIS
I
26,800
5.00%
Nippon Yusen Kabushiki Kaisha,
Tokyo
16-Sep-24
16/Aug/2026 - 16/Nov/2026
2014 179,492
30
SANTA BARBARA
I
25,500
5.00%
Dampskibsselskabet Norden A/S
27-Nov-25
1/Mar/2027 - 30/Apr/2027
14
2015 179,426
31
NEW ORLEANS
26,000
5.00%
SwissMarine Pte. Ltd., Singapore
31-Oct-25
1/Dec/2026 - 15/Feb/2027
14,15
2015 180,960
32
FLORIDA
25,900
5.00%
Bunge S.A., Geneva
29-Mar-22
29/Jan/2027 - 29/May/2027
4
2022 182,063
4 Newcastlemax Bulk Carriers
33
LOS ANGELES
J
24,000
5.00%
MOL Ocean Bulk Pte. Ltd.,
Singapore
1-Nov-25
10/Sep/2026 - 1/Nov/2026
2012 206,104
34
PHILADELPHIA
J
21,500
5.00%
Refined Success Limited
29-May-25
9/Jun/2026 - 8/Aug/2026
2012 206,040
35
SAN FRANCISCO
K
26,000
5.00%
SwissMarine Pte. Ltd., Singapore
1-Mar-25
25/Oct/2026 - 25/Dec/2026
2017 208,006
36
NEWPORT NEWS
K
25,000
5.00%
Bohai Ocean Shipping (Singapore)
Holding Pte. Ltd.
16-Jun-25
1/Sep/2026 - 31/Oct/2026
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.
2Vessel on scheduled drydocking from September 17, 2025 to October
12, 2025.
3Vessel on scheduled drydocking from December 27, 2025 to January
19, 2026.
4Bareboat chartered-in for a period of ten years.
5Estimated redelivery date from the charterers.
6Estimated delivery date to the charterers.
7The charter rate was US$9,000 per day for
the first thirty-five (35) days of the charter period.
8Charterers have agreed to compensate the Owners,
for all the days over and above the maximum
redelivery date (December 31, 2025), at
a hire rate of
105% of the average of the Baltic Panamax Index
5TC or the vessel’s present charter party rate
whichever of the two is higher.
9The charter rate was US$8,750 per day for
the first fifty (50) days of the charter period.
10The charter rate will be US$13,000 per
day for the first thirty (30) days of the charter
period.
11Vessel off hire for drydocking from September 8, 2025 to November 1, 2025.
49
12Estimated date.
13The charter rate was US$6,300 per day for
the first trip of the charter period.
14Bareboat chartered-in for a period of eight years.
15Vessel on scheduled drydocking from September 20, 2025 to
October 31, 2025.
Our Customers
Our customers include
regional and international
companies, mainly with
concentrations below 10%
of our
gross revenues. During 2025,
only two of our
charterers accounted for
29% of our revenues,
in aggregate.
During
2024,
one
of
our
charterers
accounted
for
11%
of
our
revenues
and
during
2023,
one
of
our
charterers accounted for 13% 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
2025, 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,
most of
our vessels
are employed
on short-
to medium-
term time charters, which
allows us greater flexibility
to respond to market
developments. We continuously
evaluate
our
mix
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.
In the voyage charter market, rates are, among other things, influenced by cargo size, bunker prices, 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.
50
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 2025, the BDI ranged from a low of 715 to a high of 2,845 and closed
at 1,972 on March 12, 2026.
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/ Newcastlemax
. Vessels
with carrying
capacities of
between 200,000
and 220,000 dwt.
These vessels
carry both
iron ore
and coal
and they
represent the
largest vessels
able to enter the
port of Newcastle
in Australia. There are
relatively few ports
around the world with
the infrastructure to accommodate vessels of this size.
●
Capesize
. Capesize vessels (including Baby Capes) have a carrying capacity of 100,000-120.000
dwt
for
Baby
Capes,
and
150,000-199,999
dwt
for
conventional
Capes.
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
84,000-99,999
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. Post-Panamaxes
are used primarily
in the coal
trade, as well
as grains from River Plate to Far East.
●
Panamax
.
Panamax vessels have a carrying
capacity of 70,000-79,999, and a
subset within this
segment is
the ‘Kamsarmax’
at 80,000
- 83,999
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.
●
Ultramax
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
to
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. Ultramaxes often compete with Panamaxes on certain grain routes.
51
●
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 and Dunkirkmax 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
age
range
at
which
a
vessel
is
scrapped
is
between
20
and
32
years,
depending on among others, the vessel type, the freight
market conditions and regulatory requirements.
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
2025 generally remained
firm and
in several
segments increased compared
to
2024, despite fluctuations
in charter rates
during the year.
This resilience in
secondhand asset values
is
largely supported
by historically
high newbuilding
prices and
a restricted
availability of
shipyard slots
for
near-term deliveries which limits near-term fleet growth. While 2025 presented a mixed rate environment,
charter
rates
have shown
notable
strength and
an
upward
trajectory in
early
2026.
However,
given the
cyclical nature of the industry,
there can be no assurance
as to how long vessel values
and charter rates
will remain at
their current robust
levels, or whether
they will continue
to improve or
face adjustments 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
class
sectors and
with owners
of Capesize
and Newcastlemax
dry
bulk carriers.
Ownership of
dry
bulk
carriers is highly fragmented.
52
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
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
53
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
2025 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.
54
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. Currently,
the IMO has designated five
ECAs, including specified portions of the
Baltic Sea
area, Mediterranean 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
July
2023,
MEPC
80
announced
three
new
ECA
proposals,
including
the
Canadian
Arctic
waters
and
the
Norwegian
Sea,
which
should
take
effect
in
March
2027.
MEPC
83
also
approved
the
Northeast Atlantic Ocean
as an ECA and
is expected to
take effect in 2028.
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 established new tiers
of stringent nitrogen oxide emissions standards for marine
diesel engines, depending
on their date
of installation. Tier III
NOx standards were
designed for the
control
of NOx
produced by
vessels and
apply to
ships that
operate in
the North
American and
U.S. Caribbean
Sea ECAs with a marine diesel engine installed
and constructed on or after January 1,
2016. 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. The Canadian-Arctic
ECA for NOx will
also be effective starting from
March 1,
2026
for
ships
built
on
or
after
January
1,
2025.
For
the
Norwegian
Sea
ECA,
the
NOx
Tier
III
engine
certification requirement will apply to ships (i) with building contracts placed on or after March 1, 2026, (ii)
in the
absence of
a building
contract, constructed
on or
after September
1, 2026,
or (iii)
delivered on
or
after
March
1,
2030. For
the
North-East Atlantic
ECA,
the
requirement
is expected
to
apply
to
ships (i)
contracted on
or after
January 1,
2027, (ii)
in the
absence of
a building
contract, constructed
on or
after
July 1, 2027, or (iii) delivered on or after January 1,
2031. The EPA promulgated equivalent (and in some
55
senses
stricter)
emissions
standards
in
2010. Tier
III
requirements
could
apply
to
additional
areas
designated for Tier
III NOx in the
future. In April 2025, MEPC
83 also adopted amendments (expected to
enter into force late
2026 and early 2027)
to the NOx Technical Code 2008, which allows
ships to optimize
fuel
consumption
based
on
their
operational
profile,
thus
improving
energy
efficiency,
while
ensuring
compliance
with
NOx
emission
requirements.
As
a
result
of
these
designations
or
similar
future
designations, we may be required to incur additional operating or other costs.
At the
MEPC 70,
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 used such
data
as
part
of
its
initial roadmap
(through
2023)
for
developing
its
strategy to
reduce
greenhouse gas
emissions
from
ships,
as
discussed
further
below.
MEPC
83
approved
draft
amendments
to
make
the
IMO’s data collection system more accessible to the public through an anonymized database.
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”).
Additionally,
MEPC
75
adopted amendments
to MARPOL Annex
VI which brought
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,
in 2022,
MEPC 75
amended to
Annex VI
to 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.
All
ships
above
400
gross
tonnage
must
also
have
an
approved SEEMP on
board. For ships
above 5,000 gross
tonnage, the
SEEMP needs to
include certain
mandatory content. That
same year,
MEPC amended 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.
In July 2021, 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. MEPC
79 also
revised the
EEDI calculation
guidelines to include a CO2
conversion factor for ethane, a
reference to the updated ITCC
guidelines, and
a clarification that in case of a ship with
multiple load line certificates, the maximum certified summer
draft
should be used when
determining the deadweight.
These amendments entered
into force on May
1, 2024.
In July 2023, MEPC 80 approved the
plan for reviewing CII regulations and guidelines, and
in April 2025,
MEPC
83
adopted
amendments
to
2021
Guidelines
on
operational
carbon
intensity
reduction
factors,
which
outline methods
for
determining CII
reduction factors
from
2023 and
now
includes newly
defined
factors from 2027 to 2030.
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.
56
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
57
batteries and of vehicles powered by flammable liquid or
gas. Additional amendments came into force on
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
newest
edition
of
the
IMDG
Code
took
effect
on
January
1,
2024,
although
the
changes
are
largely
incremental.
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,
cybersecurity
guidance
and
regulations
have
been
developed
in
an
attempt
to
combat
cybersecurity
threats.
For
new
ships
and
offshore
installations
contracted
for
construction
on
or
after
January
1,
2024,
the
International
Association
of
Classification
Societies
(“IACS”)
now
requires
vessel
owners,
yard
and
suppliers
to
build
cybersecurity
barriers
into
their
systems
and
vessels,
requiring
compliance across
the full
spectrum of
critical on-board
control and
navigation systems.
In addition
to these
requirements, the Company
is actively addressing
the European
Union's Network
and Information
Security
(NIS2)
Directive.
During
2025,
we
completed
a
comprehensive
NIS2
Gap
Analysis
and
have
initiated
remediation of findings to
ensure compliance with these
enhanced cybersecurity obligations. On July
16,
2025,
the
U.S.
Coast
Guard’s
final
rule,
Cybersecurity in
the
Martine
Transportation
System,
went
into
effect.
Under
this
rule,
all
regulated
entities
are
required
to
develop
Cybersecurity
and
Cyber
Incident
Response
Plans,
designate
a
Cybersecurity
Officer
to
implement
plans,
and
to
report
certain
cyber
incidents to the
National Response Center.
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
58
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.
The MEPC maintains guidelines for approval of ballast water management systems (G8).
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.
These
standards have
been in
force since
2019, and
for most
ships, compliance
with the D-2
standard
involved
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).
Since
September
8,
2024,
all
ships
have
been
required to meet the
D-2 standard. 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.
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
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.
59
In November 2020, MEPC
75 approved draft amendments
to the Anti-fouling Convention to
prohibit anti-
fouling
systems
containing
cybutryne,
which
would
apply
to
ships
from
January
1,
2023,
or,
for
ships
already bearing such an
anti-fouling system, at the
next scheduled renewal of the
system after that date,
but no later
than 60 months
following the last
application to the
ship of such
a system. In
addition, the IAFS
Certificate has been
updated to address
compliance options for
anti-fouling systems to
address cybutryne.
Ships which are affected by this ban on cybutryne must
receive an updated IAFS Certificate no later than
two years after
the entry
into force of
these amendments.
Ships which
are not
affected (i.e. with
anti-fouling
systems which do not contain cybutryne)
must receive an updated IAFS Certificate
at the next Anti-fouling
application to
the vessel.
These amendments
were formally
adopted at
MEPC 76
in June
2021 and
entered
into force on January 1, 2023.
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
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
60
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
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,
2023, 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
61
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.
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.
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
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.
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 and
current Coast Guard
ballast
water management regulations adopted
under the U.S. National
Invasive Species Act. VIDA establishes
a
new
framework
for
the
regulation
of
vessel
incidental
discharges
under
the
CWA,
requires
the
EPA
to
develop
performance
standards
for
those
discharges
within
two
years
of
enactment,
and
requires
the
USCG
to
develop
implementation,
compliance,
and
enforcement
regulations
within
two
years
of
EPA’s
promulgation
of
standards.
In
October
2024,
the
EPA
finalized
its
rule
on
Vessel
Incidental
Discharge
62
Standards
of
Performance,
which
means
that
the
USCG
must
now
develop
corresponding
regulations
regarding ballast water within two years of that date.
Under
VIDA,
all
provisions
of
the
2013
VGP
and
USCG
regulations
regarding
ballast
water
treatment
remain in force and
effect until the EPA and USCG
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
to some
exclusions, requires
companies with
ships over
5,000 gross
tonnages 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.
This will
require shipowners to
buy permits to
cover these emissions.
On December
18, 2022, the
Environmental
Council and European Parliament agreed 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.
63
From January 1, 2025,
the EU adopted the
FuelEU Maritime regulation,
a proposal included
in the "Fit-for-
55" legislation. FuelEU Maritime
sets requirements on
the annual average GHG
intensity of energy
used
by
ships
trading
within the
EU
or
European
Economic Area
(EEA).
This intensity
is
measured
as GHG
emissions
per
energy
unit
(gCO2e/MJ)
and,
in
turn,
GHG
emissions
are
calculated
in
a
well-to-wake
perspective. The calculation takes into account emissions related to the extraction, cultivation, production
and transportation of
fuel, in addition
to emissions from
energy used on
board the ship.
The baseline for
the calculation is the
average well-to-wake GHG intensity
of the fleet
in 2020: 91.16 gCO2e/MJ.
This will
start at
a 2%
reduction in
2025, increasing
to 6%
in 2030,
and accelerating
from 2035
to reach
an 80%
reduction by 2050.
Compliance with
the Maritime
EU ETS
and FuelEU
Maritime regulations
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
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.
is not a party to the Paris Agreement.
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
reduce
greenhouse gas
emissions and
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
64
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
“levels
of
ambition.” In
July
2023, MEPC
80 adopted
the
2023 IMO
Strategy
on
Reduction of
GHG
Emissions from Ships (the
“2023 IMO Strategy”), which
builds upon the initial
strategy’s levels of ambition.
The
revised
levels
of
ambition
include
(1)
further
decreasing
the
carbon
intensity
from
ships
through
improvement
of
energy efficiency;
(2)
reducing
carbon
intensity
of
international shipping;
(3)
increasing
adoption of
zero or
near-zero emissions
technologies, fuels,
and energy
sources; and
(4) achieving
net
zero GHG
emissions from
international shipping.
Furthermore, the
following indicative
checkpoints were
adopted in order to reach net zero GHG emissions from international shipping: (1) reduce
the total annual
GHG emissions from international shipping by at least 20%, striving for
30%, by 2030, compared to 2008
levels; and (2) reduce the
total annual GHG emissions
from international shipping
by at least 70%, striving
for 80%, by
2040, compared
to 2008 levels.
As part of
the 2023 IMO
Strategy, MPEC also created
the IMO
Net-zero Framework, which
will combine mandatory
emissions limits and
GHG pricing across
the industry.
The IMO
Net-zero Framework
was approved
at MEPC
83 (Spring
2025) for
potential adoption
in Spring
2026 and will
eventually be included
in Annex VI.
Under these draft
regulations, ships will
be required to
reduce their annual greenhouse gas fuel intensity (“GFI”) calculated using the well-to-wake approach and
ships emitting
above GFI
thresholds will
have to
acquire remedial
units to
balance its
deficit emissions,
while those using zero or near-zero GHG technologies will
be eligible for financial rewards.
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, the
European Union’s
carbon market,
EU ETS,
has been
extended to
cover CO2
emissions from
all large
ships
entering EU ports starting January 2024.
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
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 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.
65
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 to 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
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
66
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,
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
related
costs,
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 12
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$8.9
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, DSS owns three
additional plots, one partly acquired in 2021 and
partly in
2023 from two related parties and
two acquired in 2024 from unrelated
third parties. All plots of land are in
67
the same area as our principal offices and were acquired for corporate use.
Other than this interest in real
property, our only material properties are the vessels in our fleet.
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
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,
68
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
related
costs,
the
cost
of
insurance, expenses relating to repairs and maintenance, the costs of
spares and consumable
stores, tonnage
taxes and
other operating
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:
As of and for the
Year Ended December 31,
2025
2024
2023
Fleet Data:
Average number of vessels (1)
36.7
38.9
41.1
Number of vessels at year-end
36.0
38.0
40.0
Weighted average age of vessels at year-end (in
years)
12.1
11.3
10.5
Ownership days (2)
13,406
14,219
14,986
Available days (3)
13,014
14,057
14,867
Operating days (4)
12,969
14,009
14,824
Fleet utilization (5)
99.7%
99.7%
99.7%
Average Daily Results:
Time charter equivalent (TCE) rate (6)
$
15,454
$
15,267
$
16,713
Daily vessel operating expenses (7)
5,986
5,808
5,704
The following table reflects the calculation of our TCE rates for
the periods presented:
Year Ended December 31,
2025
2024
2023
(in thousands of U.S. dollars, except for TCE rates, which
are expressed in U.S. dollars, and available days)
Time charter revenues
$
213,541
$
228,209
$
262,098
Less: voyage expenses
(12,417)
(13,607)
(13,621)
Time charter equivalent revenues
$
201,124
$
214,602
$
248,477
Available days
13,014
14,057
14,867
Time charter equivalent (TCE) rate
$
15,454
$
15,267
$
16,713
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:
69
●
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
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 material 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 2025 decreased compared to previous years due to the decrease in the size of our
fleet following vessel sales described elsewhere in this annual
report.
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 usually
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.
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 health,
safety,
quality (HSQ)
and vetting.
Our vessel
operating expenses
generally represent
fixed costs.
70
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
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.
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.
General and administrative expenses are
not affected significantly 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, 2025 our aggregate debt amounted
to $529.2 million and
our finance
liabilities amounted
to $114.1
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.
Interest rates,
which had
been increasing
since the
beginning of
2022, started
to decrease
in the
third quarter
of 2024
and continued to decline until the end of 2025.
We manage our exposure to interest
rates by maintaining a mix
of floating and fixed
interest rate financing
agreements. Floating
rate agreements
include secured
loan facilities
and fixed
rate agreements
include
leases and our senior unsecured
bond. 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.
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.
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
71
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;
●
crew selection and training;
●
vessel spares and stores supply;
●
contingency response planning;
72
●
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;
●
global conflicts;
●
inflation, and
●
fluctuations in foreign exchange rates.
73
Results of Operations
Year ended December 31, 2025 compared to the year ended December 31, 2024
Time charter
revenues.
Time charter
revenues decreased
by $14.7
million, or
6%, to
$213.5 million
in 2025,
compared to $228.2 million in 2024. The decrease was primarily due to a decrease in the size
of the fleet
resulting from
the sale
of two
vessels during
2025, which
decreased operating
days during
2025, compared
to last year.
Operating days declined to
12,969 in 2025 from
14,009 in 2024.
This reduction was partially
offset by
higher average time charter
rates, as reflected in
our TCE rate
of $15,454 in 2025
compared to
$15,267 in 2024.
Voyage
expenses.
Voyage
expenses
decreased
by
$1.2
million,
or
9%,
to
$12.4
million
in
2025
as
compared
to
$13.6 million
in
2024.
This
decrease was
mainly
attributable to
lower commissions,
which
amounted
to
$10.8
million
in
2025,
compared
to
$11.6
million
in
2024.
A
further
decrease
was
due
to
voyage and port expenses, which declined to $0.9 million in 2025
from $1.2 million in 2024.
Vessel operating expenses.
Vessel operating expenses decreased by $2.4 million, or 3%, to $80.2 million
in 2025 compared to $82.6 million
in 2024. The decrease was mainly
attributable to fewer ownership
days
in
2025
following
the
sale
of
two
vessels
discussed
above.
This
decrease was
partially
offset
by
a
3%
increase in
daily vessel
operating expenses,
which rose
to $5,986
in 2025,
from $5,808
in 2024,
mainly
due to higher crew-related costs.
Depreciation
and
amortization
of
deferred
charges.
Depreciation
and
amortization
of
deferred
charges
increased by $1.8
million, or 4%, to $46.5
million in 2025, compared
to $44.7 million
in 2024. The increase
was primarily due
to higher amortization
of deferred
drydock costs, as
fourteen vessels underwent
drydock
surveys in 2025 compared to six vessels
in 2024.
This increase was partially offset
by lower depreciation
expenses resulting from reduced ownership days following the sale of
two vessels during 2025.
General and
administrative expenses
. General and admini
strati
ve expenses
increased by
$0.7 million,
or
2%, to $34.1 million in 2025 compared to $33.4 million in 2024. The increase was primarily driven by higher
payroll
and legal
expenses, partially
offset by lower
tax expenses.
Additionally, as
almost half
of our general
and
administrative
expenses
are
denominated
in
Euro,
general
and
administrative
expenses
were
also
affected by movements in the euro/U.S. dollar exchange rate during 2025.
Management fees to a related party.
Management fees to a related party decreased by $0.1 million, or 8%,
to $1.2 million in 2025, compared
to $1.3 million in 2024.
The decrease was attributable to a
reduction in the
number of vessels managed by DWM in 2025,
following the sale of one managed vessel during the year.
Gain on sale of
vessels.
Gain on sale of
vessels decreased by $2.1
million, or 36%, to
$3.7 million in 2025
due to the sale of vessels
Alcmene and Selina,
compared to $5.8 million in 2024 which related to the sale of
vessels
Artemis and
Houston
.
Interest expense and finance costs.
Interest expense and finance costs decreased by $4.5 million or 9% to
$43.0 million
in 2025
compared to
$47.5 million
in 2024.
The decrease
was mainly
due to
lower average
interest rates in 2025 compared to 2024.
Interest and
other income
. Interest and other income decreased by $0.9 million, or 11%, to $7.5 million in
2025
compared
to
$8.4
million
in
2024.
The
decrease
was
mainly
attributable
to
a
lower
amount
of
time
deposits placed
during 2025
and further
impacted by
lower deposit
rates achieved
in 2025
compared to
2024.
Loss on extinguishment of debt. In 2024, the loss on extinguishment of debt consisted of the prepayment of
the 8.375%
Senior Unsecured
bond at
a price
equal to
103.35% of
nominal value,
with the
proceeds from
the new bond.
74
Gain/(loss)
on derivatives. In
2025, loss on
derivates amounted to
$0.2 million,
as compared to
a gain of
$0.3
million
in
2024.
Gain/(loss)
on
derivative
instruments
reflects
the
decrease
in
interest
rates
affecting
the
change in
fair value
of the
interest rate
swap dated
July 6,
2023, which
we entered
into with
DNB for
a notional
amount of $30
million, under which we
pay a fixed
rate of 4.268% and
receive floating interest based
on term
SOFR.
Gain/(loss) on
related party
Investments. Loss
on related
party investments
amounted to
$1.1 million
in 2025.
The loss primarily reflected
the dilution of the
Company’s common stock holdings
in OceanPal arising from
multiple common
stock issuances
and the
impact of
a reverse
stock split,
which resulted
in a
$4.1 million
loss. This was partially
offset by a $3.0
million gain on the
sale of the Company’s
500,000 Series B Preferred
Shares of OceanPal,
representing the excess of
the sale proceeds over
the carrying amount. This
compares
to a loss of $3.9 million
in 2024, which resulted from the
measurement of OceanPal’s common shares
at fair
value on December 31, 2024, based on the closing price of the shares on
that date.
Gain/(loss) on equity securities.
Gain on
equity securities
amounted
to $14.7
million
in 2025,
compared
to a
loss of $0.4 million in
2024. In 2024, we sold equity
securities acquired in 2023, resulting in
a realized loss of
$0.4
million.
In
2025,
we
acquired
equity
securities
of
Genco
Shipping
&
Trading
Limited
(Genco)
representing 14.8% of Genco’s common stock
as of year-end. The valuation of
these equity securities at fair
value at year-end resulted in an unrealized gain of $14.7 million.
Gain
on warrants.
Gain on
warrants amounted
to $0.5
million
in 2025,
compared to
$0.7 million
in 2024,
which resulted
from the
fair value
adjustment of
the outstanding
warrants as
of December
31, 2025
and 2024,
respectively.
Loss from
equity method
investments.
Loss from
equity method
investments, amounted
to $2.8
million in
2025,
compared to $0.1
million in 2024. In
2025, the loss was
attributable to a $1.4
million loss from our
80%
interest in Ecogas, a
$0.1 million loss from
our 34% interest in
Windward, an additional $0.8
million loss from
our
25%
interest
in
Bergen
and
a
$0.5 million
loss
from
our
50%
interest
in
DWM.
In
2024,
the
loss
was
attributable to a $0.5 million loss from
our 45.87% interest in Windward, which was
partially offset by a $0.3
million gain from our 25% interest in Bergen and a $0.1 million gain from our
50% interest in DWM.
Year ended December 31, 2024 compared to the year ended December 31, 2023
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023,
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, 2024 filed with the SEC on March 21,
2025.
B.
Liquidity and Capital Resources
Historically, we finance our short-term and long-term
capital requirements with cash
from operations, cash
at
banks,
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.
Our short-term
liquidity requirements include
funding the
installments for
the construction
of two
vessels
with
expected
deliveries
in
2027
and
2028,
funding
the
construction
of
an
office
building,
payments
of
committed capital under the terms of our joint ventures in Windward and Ecogas,
expenditures relating to
scheduled
drydock
and
special
surveys
of
our
vessels
to
comply
with
international
and
regulatory
standards,
payments
of
interest
and
principal
installments
under
our
bank
loans,
our
bond,
and
lease
agreements and payment of dividends,
common and preferred.
Our primary sources of short-term
liquidity
75
include cash generated from
operating activities, available cash
balances,
proceeds from the
exercise of
warrants and vessel sales.
Our
long-term
liquidity
requirements
include
funding
our
newbuilding
vessel
installments,
interest
and
principal
payments
on
outstanding
debt,
bond,
and
lease
agreements,
loan
maturities,
payment
of
dividends,
common
and
preferred,
if
declared
by
the
board
of
directors,
expenditures
for
drydock
and
special surveys
as they become
due. Sources of
funding for
our long-term
liquidity requirements include
cash
flows
from
operations,
available
cash
balances,
bank
borrowings,
issuance
of
debt
and
equity
securities, and vessel sales.
As of
December 31,
2025 and
2024, working
capital, defined
as current
assets minus
current liabilities,
including the
current portion
of long-term
debt and
finance liabilities,
amounted to
$155.3 million
and $126.4
million, respectively.
The increase in
working capital was
primarily driven by
a $118.2
million increase
in
investments in equity
securities related to the
acquisition of 14.8% ownership
interest in Genco. Working
capital also increased by
$4.2 million due to
the reclassification of our
equity method investment
in Bergen
as
current,
resulting from
Bergen’s
sale
of
DSI Drammen
.
The
increase
was
partially offset
by a
$83.9
million decrease
in cash
and cash
equivalents and
time deposits,
mainly due
to the
maturity of
time deposits
and the
redeployment of
available liquidity
into equity
securities. Working
capital was
further affected
by
an increase
in current
liabilities, primarily
due to
a higher
current portion
of long-term
debt following
the
issuance of
a new
loan during
2025. We
believe that
our working
capital is
sufficient to
cover our
short-
term requirements.
Cash and
cash equivalents, including
restricted cash,
are primarily held
in U.S.
dollars and
amounted to
$122.3 million
as of
December 31,
2025 and
$143.7 million
as of
December 31,
2024. Restricted
cash,
non-current, which
represents minimum
liquidity requirements
under our
loan facilities,
as of December
31,
2025 and 2024, amounted to
$18 million and $19 million,
respectively.
Restricted cash, current consists
of
loan proceeds drawn during
the year maintained in
a pledged account in
order to reduce
the loan’s margin
and as
of December
31, 2025
amounted to
$53.8 million.
Time deposits with
maturities above
three months
amounted to $0 million and $63.5
million as of December 31, 2025 and
2024,
respectively. Our
cash and
cash equivalents, restricted cash and time
deposits represent our unused sources of liquidity to
meet our
short- and long-term obligations.
During 2025 and 2024, our sources and uses of cash were as
follows:
Net Cash Provided by Operating Activities
Net cash provided by operating
activities decreased by $36.0 million,
or 43%.
In 2025, net cash
provided
by
operating
activities
was
$47.5 million
compared
to
net
cash
provided
by
operating
activities
of
$83.5 million in
2024. The
decrease was
mainly attributable
to the
proceeds from
the sale
of our
investment
in equity
securities recognized in
2024, increased dry-docking
and special survey
costs incurred in
2025
and
lower
operating
cash
inflows,
primarily
reflecting
reduced
operating
days
following
the
sale
of
two
vessels during the year.
Net Cash Used in Investing Activities
Net
cash
used
in
investing activities
was
$32.0 million
for
2025,
which
consists
of
$1.5
million
paid
for
vessels under
construction and
improvements; $23.0 million
of proceeds
from the
sale of
two vessels
in
2025; $118.3 million paid to acquire investments,
net of a $3.5 million
return of capital from our
investment
in Windward;
$3.0 million proceeds
from the sale
of the Series
B Preferred shares
of OceanPal; a
$63.5
million
decrease
in
time
deposits
with
maturity
above
three
months;
and
$1.7
million
relating
to
the
acquisition of property and equipment.
76
Net cash
used in
investing activities
was $39.8
million for
2024, which
consists of
$20.5 million
paid for
vessels under
construction and
improvements; $35.2 million
of proceeds
from the
sale of
two vessels
in
2024; $27.2 million
paid to acquire
investments in Windward;
increased investment
by $23.5 million
in time
deposits
with
maturity
above
three
months;
and
$3.7
million
relating
to
the
acquisition
of
property
and
equipment.
Net Cash Used in Financing Activities
Net cash used in
financing activities was $36.9 million
for 2025, which
mainly consists of $55.0
million of
proceeds
from
the
issuance
of
long
term
debt;
$58.2
million
of
repayments
of
bank
debt
and
finance
liabilities;
$23.0 million of
payments for the
repurchase of common
stock; $5.8 million
and $4.6 million
of
cash dividends
paid on
our preferred
and common
stock, respectively;
and $0.4
million of
finance costs
paid in connection with the new loan agreement.
Net cash used in financing activities was $21.7
million for 2024, which consists of $117.2 million proceeds
from issuance
of long term
debt; $123.0 million
of bank
debt and
finance liabilities that
we repaid; $24.2
million proceeds from issuance of common stock; $5.8 million and $29.0 million
of cash dividends paid on
our preferred and
common stock,
respectively; and
$5.3 million
of finance
costs paid in
relation to new
loan
agreements.
For a detailed
discussion of
cash flows
for the
year ended
December 31,
2024 compared
to the year
ended
December 31, 2023 please see “Item 5. Operating and Financial Review and Prospects - B. Liquidity and
Capital Resources”
included in
our
2024 Annual
Report filed
on Form
20-F with
the SEC
on
March 21,
2025.
Commitments for Capital Expenditures
As of the
date of this annual report,
we have outstanding commitments amounting to:
(i) $73.6 million for
the construction of two 81,200 dwt methanol dual-fuel newbuilding Kamsarmax dry bulk vessels
expected
to be
delivered in
the third
quarter of
2027 and
the first
quarter of
2028; (ii)
€9.4 million
under our
joint
venture agreement with Windward;
(iii) $8.2 million remaining commitment to
Ecogas for the construction
of
two
7,500
cbm
LPG
vessels
with
expected
deliveries
in
2027
and
(iv)
$50.4
million
of
purchase
obligations under our lease agreements.
We also incur
capital expenditures
when our
vessels undergo
statutory (drydock
and special)
surveys. This
process may
require us to
reposition vessels from
discharging ports to
shipyard facilities, which
reduces
operating
days
during
the
period.
Additional
capital
expenditure
may
also
be
required
for
vessel
improvements needed to comply with new or upcoming regulations.
Over the next
twelve months, we
will require capital
to fund ongoing
operations, debt service,
common and
preferred dividend payments, bareboat charter hire payments,
and investments.
As of the date of this annual report,
we have contracted revenues covering around 81% of our ownership
days in 2026, in time
charter agreements having an average time
charter rate above our break-even rate
as of
December 31, 2025,
and we have
fixed around 9%
of our ownerships
days in 2027.
Our revenues
for the unfixed days in 2026
and 2027 will be affected by the developments in the dry bulk market and we
cannot assure
you that we
will be
able to successfully
renew existing
charters at rates
sufficient to
allow
us
to
meet
all
of
our
obligations.
As
of
the
date
of
this
annual
report,
we
believe
that
contracted
and
anticipated
revenues will
result
in
internally generated
cash flows
and together
with available
cash
and
cash equivalents
will be
sufficient to
fund our
short-term and long-term
capital requirements.
In addition,
we
expect
to
finance
part
of
our
long
term
capital
requirements,
such
as
the
construction
cost
of
our
methanol vessels, with new bank debt and if needed vessel sales.
77
Debt instruments and guarantees
As of December
31, 2025,
we had $529.2
million of
long-term debt
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
. The loan is payable in equal quarterly instalments of about
$1.0 million each until January
4, 2032.
On July
25, 2024,
we drew
down $167.3
million under
a new
loan agreement
with Nordea
Bank AB,
or
Nordea,
which
was
used
to
refinance
other
outstanding
agreements
with
the
same
bank.
The
loan
is
repayable in equal
quarterly instalments of $4.5
million and a
balloon instalment of $64.8
million payable
on July 25, 2030.
On
April
12,
2023,
we
entered
into
a
$100
million
term
loan
facility
with
Danish
Ship
Finance
A/S
to
refinance outstanding loan balances
with another bank and for
working capital. On October 18,
2024, we
refinanced
the
outstanding
balance
of
the
loan
with
a
new
loan
which
is
repayable
in
equal
quarterly
instalments of $2.5 million each and a
balloon of $14.3 million payable
together with the last instalment on
April 18, 2031.
On June
26, 2023,
we entered
into a
$100 million
loan agreement
with DNB
Bank ASA,
or DNB,
to refinance
an
outstanding
loan
balance with
another
bank
and
for
working
capital. The
loan
is
repayable
in
equal
quarterly
instalments
of
$3.8
million
until
December
27,
2029.
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, the margin reset date of the loan, according to which
the swap will be terminated if the
loan is prepaid. As of December 31, 2025, the
interest rate swap was a
liability having a fair value of $0.4 million.
On September 29,
2025, we drew
down $55 million
under a loan
agreement with National
Bank of Greece,
or NBG. The loan proceeds were deposited in a pledged
account with the bank to reduce the margin. The
Company may withdraw any
part or all
of the funds from
the pledged account at
the end of
each interest
period, provided no event of default has
occurred. The loan is repayable in equal quarterly
instalments of
$1.3 million and a balloon instalment of $25.0 million payable on September
29, 2031.
Under
the
secured
term
loans
outstanding
as
of
December
31,
2025,
31
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
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
78
not permitted to pay any dividends following the occurrence of an event of default. All of our secured term
loans bear interest in Term SOFR plus a margin.
As of December 31, 2024 and
2025, and the date of this
annual report, we were in compliance with
all of
our loan covenants.
Senior Unsecured Bond:
On July
2, 2024,
we issued
a bond
of $150
million nominal
value at
par and
on November
8, 2024,
we
issued an additional
amount of
$25 million
nominal value
at 102.00% of
par.
The bond proceeds
were used
to refinance the outstanding balance of our $125 million senior
unsecured bond maturing in June 2026 at
a price equal to 103.35% of nominal value. The
bond has a US Dollar fixed-rate coupon
of 8.75% payable
semi-annually in arrears in January and
July of each year.
The bond is callable in whole
or in part in July
2027 at
a price
equal to
103.50% of
nominal value;
in January
2028 at
a price
equal to
102.625% of
nominal
value; in
July 2028
at a
price equal
to
101.75% and
after January
2029 at
a price
equal to
100.00% of
nominal value.
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. The
bond includes financial
and other covenants
and is trading
on the Oslo
Stock Exchange under
the ticker
symbol “DIASH03”.
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.
Guarantees
On March 30,
2023, we entered
into a corporate
guarantee with Nordea
under which we
guaranteed the
performance by Bergen Ultra of its
obligations under a loan agreement with the
bank,
maturing on March
30, 2028.
As of
December 31,
2025, the
loan had
an outstanding
balance of
$12.3 million
and was
fully
repaid
in
January
2026
after
the
sale
of
Bergen
Ultra’s
vessel.
Following
repayment
of
the
loan,
the
corporate guarantee provided to Nordea was released.
79
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 available
to fix
our vessels 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 2025,
the BDI
ranged from a low
of 715 to a
high of 2,845 and
closed at 1,972 on
March 12, 2026. Although
there can be
no assurance
that the
dry bulk
charter market
will not
decline from
current levels,
as of
the date
of this
annual report,
we have
fixed about
81% of
our fleet
ownership days
in 2026
in time
charter agreements
having an average time
charter rate above our break-even
rate. Nevertheless, our revenues
and results of
operations in 2026 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,
obsolescence or
damage to
the asset,
potential sales
and other
business plans)
indicate
that the
carrying amount
of an
asset may
not be
recoverable. For
impairment testing
purposes, each
vessel
together with its
associated deferred costs
is considered
a single asset
group. When impairment
indicators
are
identified,
the
Company
compares
the
carrying
amount
of
the
asset
group
with
the
estimated
undiscounted projected net
operating cash flows
expected to result
from the use
of the asset
group over
its remaining useful life
and its eventual
disposition. If the
carrying amount exceeds
the undiscounted cash
flows,
the
asset
group
is
considered
not
recoverable
and
is
written
down
to
its
fair
value,
determined
primarily through third-party valuations.
For vessels, the
Company estimates undiscounted net
operating cash flows by
considering the historical
and projected vessel performance and utilization. A significant
assumption in this analysis is the estimate
of future time charter rates for
the unfixed days, using the most
recent 10-year average of historical
1 year
time charter rates, net
of commissions, available
for each vessel class.
These estimated time
charter rates
reflect the Company’s
chartering strategy,
vessel operating history
per vessel class
and at least
one full
shipping
cycle,
where
applicable.
When
a
full
10-year
history
is
not
available,
the
average
1
year
time
charter rate of the available period is used. The
historical ten-year average rate used in 2025 to calculate
undiscounted
projected
net
operating
cash
flow
was
$13,596
for
our
Panamax,
Kamsarmax
and
Post-
Panamax
vessels,
$16,309 for
our
Ultramax vessels
and
$17,517 for
our
Capesize and
Newcastlemax
80
vessels, compared to $13,053, 16,626 and $16,315,
respectively in 2024. Additional assumptions include
contracted
charter
rates
for
fixed
days
based
on
existing
time
charter
contracts,
anticipated
vessel
operating expenses,
scheduled vessel maintenance
costs, fleet
utilization levels,
and estimated
residual
values based
on scrap
rates. Assumptions
are in
line with
the Company’s
historical performance
and its
expectations
for
future
fleet
utilization
under
its
current
fleet
deployment
strategy.
The
undiscounted
projected
net
operating
cash
flows
are
compared
with
the
carrying
amount
of
the
vessel,
including
its
unamortized
deferred costs.
If
the
carrying amount
exceeds the
undiscounted cash
flows, the
vessel is
written
down
to
its
fair
value,
and
the
difference
is
recognized
as
an
impairment
loss.
Although
no
impairment loss was identified or
recorded in 2025, according to
our assessment, the carrying value plus
unamortized deferred
cost of
vessels for
which impairment
indicators existed
as of
December 31,
2025,
was $281.3 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.
These
vessels
would
be
impaired
in
accordance with the
related US GAAP
guidance for impairment
recognition, if the
undiscounted cash
flows
were lower
compared to
their carrying
value. Based
on: (i)
the carrying
value plus
unamortized deferred
cost of
each of
our vessels as
of December 31,
2025 and
2024 and (ii)
what we
believe the charter-free
market value of each
of our vessels was
as of December 31,
2025 and 2024, the
aggregate carrying value
of 10 and
12 of the
vessels in our
fleet as of
December 31, 2025
and 2024, respectively,
exceeded their
aggregate charter-free market value
by approximately $37 million
and $22 million,
respectively,
as noted
in the table below. This represents the approximate amount
by which we believe we
would have to reduce
our net income if we sold all
of such vessels at December 31, 2025 and
2024, 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
10 and
12 vessels
would be
sold at
a price
that reflects
our estimate
of their
charter-free market
values as of December 31, 2025 and 2024, respectively.
81
Vessel
Dwt
Year Built
Carrying Value plus unamortized
deferred cost
(in millions of US dollars)
2025
2024
1
Alcmene
93,193
2010
-
10.1
2
Amphitrite
98,697
2012
12.5
13.2
3
Astarte
81,513
2013
15.9
17.0
4
Atalandi
77,529
2014
15.1
16.0
5
Crystalia
77,525
2014
14.8
15.7
6
Electra
87,150
2013
12.8
13.4
7
G.P.
Zafirakis
179,492
2014
22.6
23.8
8
Ismene
77,901
2013
10.6
11.1
9
Leto
81,297
2010
12.4
12.1
10
Los Angeles
206,104
2012
21.4
22.4
11
Maera
75,403
2013
10.3
11.0
12
Maia
82,193
2009
11.4
12.4
13
Medusa
82,194
2010
12.0
11.8
14
Myrsini
82,117
2010
13.3
13.4
15
Myrto
82,131
2013
15.7
16.8
16
New Orleans
180,960
2015
31.3
30.4
17
New York
177,773
2010
15.3
13.7
18
Newport News
208,021
2017
37.0
38.8
19
P.S.
Palios
179,134
2013
31.4
33.3
*
20
Phaidra
87,146
2013
12.1
12.9
21
Philadelphia
206,040
2012
22.0
23.1
22
Polymnia
98,704
2012
12.8
13.5
23
San Francisco
208,006
2017
37.1
38.9
24
Santa Barbara
179,426
2015
33.7
35.7
*
25
Seattle
179,362
2011
21.0
20.2
26
Selina
75,700
2010
-
8.6
27
Semirio
174,261
2007
15.7
14.7
28
LEONIDAS P.C.
82,165
2011
18.9
*
19.5
*
29
Florida
182,063
2022
53.0
55.0
30
DSI Pyxis
60,362
2018
32.1
*
33.8
*
31
DSI Pollux
60,446
2015
27.9
*
28.4
*
32
DSI Phoenix
60,456
2017
29.5
*
31.1
*
33
DSI Polaris
60,404
2018
32.7
*
34.4
*
34
DSI Andromeda
60,309
2016
29.3
*
30.2
*
35
DSI Aquila
60,309
2015
27.8
*
28.5
*
36
DSI Pegasus
60,508
2015
27.0
*
27.3
*
37
DSI Altair
60,309
2016
28.2
*
29.7
*
38
DSI Aquarius
60,309
2016
28.0
*
29.5
*
Total
4,226,612
805
851
_______________________________
*
Indicates dry bulk
vessels for which
we believe, as
of December 31,
2025 and 2024,
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 $37 million and $22 million, respectively.
82
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 15%
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
$16,309
$13,276
Panamax/Kamsarmax/Post-Panamax
$13,596
$9,960
Capesize/Newcastlemax
$17,517
$12,954
83
It should be
noted that
as of December
31, 2025,
ten 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
$14,089
-
$15,319
-
$18,609
-
Panamax/Kamsarmax/Post-
Panamax
$12,929
-
$13,759
-
$16,719
-
Capesize/Newcastlemax
$22,074
-
$20,482
-
$21,105
-
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 nine
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
51
Class III Director and Chief Executive Officer
Simeon Palios
84
Class I Director and Chairman
Ioannis Zafirakis
54
Class III Director and President
Anastasios Margaronis
70
Class I Director
Kyriacos Riris
76
Class II Director
Apostolos Kontoyannis
77
Class III Director
Eleftherios Papatrifon
55
Class II Director
Simon Frank Peter Morecroft
66
Class II Director
Jane Sih Ho Chao
49
Class I Director
Maria Dede
53
Co-Chief Financial Officer and Treasurer
Margarita Veniou
47
Chief Corporate Development, Governance &
Communications Officer and Secretary
Maria Christina Tsemani
47
Chief People & Culture Officer
Evangelos Sfakiotakis
54
Chief Technical
Investment Officer
The term of our
Class I directors expires
in 2027, the
term of our Class
II directors expires in
2028, and the
term of our Class III directors expires in 2026.
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
84
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.
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. She
also
served as
a Director
of OceanPal
Inc. (NASDAQ:
SVRN) from
April 2021
until October
2025 and
as the
Chairperson of the
Board of Directors
and of
the Executive Committee
of OceanPal Inc.
from November
2021 until October 2025.
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.)
(NASDAQ: PSHG).
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.
Until December 2025,
Mr.
Palios also served
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.)
(NASDAQ: PSHG) and as Chief Executive Officer until October 2020.
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.
Ioannis Zafirakis
has served as
a Director of
Diana Shipping
Inc. since February
2005. Mr. Zafirakis is
the
President
of
the
Company
since
January
2026.
He
is
also
member
of
the
Executive
Committee
of
the
Company.
Mr.
Zafirakis has held various
executive positions such as
the Secretary of the
Company,
Co-
85
Chief
Financial
Officer,
Treasurer,
Chief
Strategy
Officer,
Company’s
Chief
Financial
Officer,
Chief
Operating
Officer,
Executive
Vice-President
and
Vice-President.
He
is
the
Managing
Director
of
Diana
Shipping Services
S.A. since
January 2026.
Mr.
Zafirakis served
as the
Chief
Strategy Officer
and Co-
Chief
Financial
Officer
of
Diana
Shipping
Services
S.A.
since
January
2025.
Prior
to
this,
he
was
the
company’s Chief Financial
Officer from March
2020 (Interim
Financial Officer
until February
2021) and
held
the positions of Director and Treasurer. Also, he served as a Director of OceanPal Inc. (NASDAQ: SVRN)
from
April
2021
to
February
2026.
He
has
also
served
as
the
President,
Secretary
and
Interim
Chief
Financial
Officer
of
OceanPal
Inc.
from
November
2021
to
April
2023.
He
was
also
member
of
the
Executive Committee of OceanPal Inc. until February 2026.
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.) (NASDAQ:
PSHG),
where
he
held
various
executive
positions
such
as
Chief
Operating
Officer
and
Chief
Strategy
Officer.
Mr.
Zafirakis,
currently
also
acts
as
Director,
President,
Secretary
and
Treasurer,
for
Sea
Transportation Inc.
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.
Anastasios C. Margaronis
has served as a Director
of Diana Shipping Inc. since
February 2005. He also
served as President and as a member of the Executive Committee of the Company until December 2025.
Since
January
2026,
Mr.
Margaronis
has
been
a
member
of
the
Nominating
Committee
and
the
Sustainability Committee
of the
Company.
Mr.
Margaronis was
the Deputy
President of
Diana Shipping
Services S.A., where he also
served as a Director
and Secretary until January 2026.
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
performed
as
President
of
Diana
Shipping
Inc.
until
December
2025.
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.) (NASDAQ: PSHG).
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.
Eleftherios (Lefteris) A. Papatrifon
has served as a Director and a member of the Executive Committee
of
Diana
Shipping
Inc.
since
February
2023.
He
also
serves
as
the
Chairperson
of
the
Company’s
Nominating Committee since May 2025.
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. (NASDAQ: SVRN) 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.
86
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.
Kyriacos Riris
has served as a Director of Diana Shipping Inc. since March 2015. Since May 2022, he is
the
Chairman of
the
Audit Committee
of the
Company.
Mr.
Riris was
also a
member of
the
Company’s
Nominating Committee from May 2015 until his voluntary resignation in
December 2025.
Mr. Riris
served in various positions in PricewaterhouseCoopers (PwC), Greece, including Deputy Senior
Partner, Managing Partner of the Audit and
the Advisory/Consulting Service lines.
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
by Grant
Thornton, Greece,
where in
1984 he
became a
Partner.
From 1976 to 1982, Mr. Riris was employed by Arthur Young, Greece.
Since
November
2018,
Mr.
Riris
has
served
as
the
vice
Chairman
of
the
Board
of
Titan
Cement
International S.A., a
Belgian corporation, while
also retaining the
position as Chairman
of the Audit and
the
Risk Committee of the Group, since that date.
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
and Chartered 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.
Simon Morecroft
has served as an independent
Director of Diana Shipping Inc.
since May 2022 and as
a
member
of
the
Company’s Compensation
Committee since
May
2025. 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 PLC)
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 an independent 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
comprises
of
residential
and
87
commercial properties in Shanghai. 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
has
served
as
Co-Chief
Financial
Officer
of
Diana
Shipping
Inc.
since
January
2025
and,
effective
January 1,
2026, also
holds
the
position of
Treasurer.
Prior to
these
roles,
Ms.
Dede
was
the
Company’s Chief Accounting Officer from September
2005. Additionally, she has been Co-Chief Financial
Officer of
Diana Shipping Services
S.A. since January
2025, having previously
served as the
company’s
Finance Manager and Chief Accounting Officer of the Company.
Ms. Dede began her career in 1996 at Venus
Enterprises S.A., a ship-management company, where she
held various positions primarily in accounting and
supplies until 2000. She then joined
the Athens branch
of
Arthur Andersen
in 2000,
which merged
with Ernst
& Young
(Hellas) in
2002, serving
as an
external
auditor for shipping companies until 2005.
She 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 of
the American College
of Greece
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
and effective
January 1,
2026
also
holds
the
position of
Secretary
of
the
Board of
Directors
of
Diana Shipping
Inc.
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. (NASDAQ: SVRN)
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.
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.) (NASDAQ: PSHG).
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. In 2024, she completed the
"Leadership Communication
with
Impact"
program
at
INSEAD
Business
School.
Additionally,
she
has
completed
the
“Sustainability
Leadership
and
Corporate
Responsibility”
program
at
London
Business
School
and
has
obtained
the
Certification in
Shipping Derivatives
from 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 and,
as of
January
2026,
as
Chief
People
&
Culture
Officer.
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 human
resources across
multinational companies
and
institutional
organizations.
Prior
to
joining
Diana
Shipping,
she
served
as
People
Acquisition
and
Development Manager of
Vodafone Greece.
During her career in
Vodafone from
2008 to 2020,
she held
various senior roles, 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
a
Project
Manager
in
the
European
Commission,
based
in
88
Luxembourg.
Ms. Tsemani
holds a
bachelor’s degree
in Mathematical
Sciences and
a Master’s
of Science
in Applied
Statistics from the University of Oxford, UK.
Evangelos Sfakiotakis
has served as the
Chief Technical Investment Officer of Diana
Shipping Inc. since
January 2026.
Mr.
Sfakiotakis is
also the
Chief Operating
Officer of
Diana Shipping
Services S.A.
since
September 2022,
overseeing the
operational performance
and strategic
management of
a fleet
of more
than
30 bulk
carriers. With
more than
25 years
of experience
across the
shipping industry,
he has
held
senior
leadership
roles
in
technical,
fleet,
and
corporate
operations
within
major
ship-management
organizations.
Before joining
Diana Shipping
Services S.A. in
2022, he
served as
Chief Operating
Officer of Pavimar
S.A.,
managing a
diverse fleet
of carriers,
container vessels,
and tankers.
Earlier,
he spent
over a
decade at
TMS Tankers
Ltd, where he progressed from Fleet Manager to
Technical
Manager, supervising a
fleet of
up
to
50
tankers
(VLCC,
Aframax,
Suezmax,
Handymax).
His
responsibilities
covered
full
technical
operations, strategic planning, and the oversight of both Technical and Purchasing Departments.
Mr.
Sfakiotakis holds a
Diploma in
Mechanical Engineering
from the
University of
Patras and
completed
extensive postgraduate
research in
mechanical engineering,
contributing to
scientific publications
in the
fields of computational mechanics, gear technology, and structural analysis.
B.
Compensation
Aggregate executive
compensation (including
amounts paid
to Steamship)
for 2025
was $6.0
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
Agreement
in
effect
during
2025,
brokerage
fees
amounted
to
$3.9
million
and
we
also
paid
commissions
for
vessel
sales
and
purchases
amounting to
$0.4
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 2025, 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
20,000,000
shares.
Currently, 1,394,759 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
Company’s Board of Directors, or such other committee of the Board as
may be designated by the Board.
89
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).
In
February
2025
and
2026,
our
board
of
directors
awarded
an
aggregate
of
2,000,000
shares
and
1,850,000 shares,
respectively,
of restricted
common stock to
executive and non-executive
directors. All
restricted shares
vest ratably
over a
period of
three years
and are
subject to
forfeiture until
they vest.
In
addition,
in February
2026,
our board
of directors
also awarded
5,900,000 restricted
common shares
to
executive
and
non-executive
directors,
that
vest
ratably
over
a
period
of
six
years.
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 2025, compensation
costs relating
to the aggregate
amount of
restricted stock
awards amounted
to $9.6
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
board 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. Simon Morecroft (member).
We have established a Nominating
Committee comprised of two
board 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. Eleftherios Papatrifon (chairman) and Mr. Anastasios Margaronis (member).
We have established
a Sustainability
Committee comprised
of Mr. Apostolos Kontoyannis
(Chairman),
Ms.
Semiramis Paliou (member) and Mr.
Anastasios Margaronis (member).
The Sustainability Committee, 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.
90
We
have
established
an
Executive
Committee
comprised
of
Ms.
Semiramis
Paliou
(Chairperson),
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,
2025,
2024
and
2023.
Year Ended December 31,
2025
2024
2023
Shoreside
126
11
7
11
2
Seafaring
813
864
906
Total
939
981
1,018
91
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
Percent of
Class*
Shares Owned
Common Stock,
Semiramis Paliou (1)
27,809,560
21.5%
par value $0.01
Anastasios Margaronis (2)
10,061,227
8.0%
Simeon Palios (3)
7,153,374
5.7%
F.
Laeisz GmbH (4)
7,716,757
6.2%
All other officers and directors as a group (5)
9,668,908
7.8%
* Based on 123,539,757 common shares outstanding as of
March 12, 2026.
(1)
Ms. Semiramis Paliou
indirectly may be deemed
to beneficially own
21.5% of our
outstanding
common stock
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
5,931,386 shares
of common
stock issuable
to Semiramis
Paliou upon exercise
of 3,527,501
warrants distributed
on December
14, 2023.
As of
December 31,
2023, 2024
and 2025,
Ms.
Semiramis Paliou owned
indirectly 20.3%, 18.4%
and 20.4%, respectively,
of our outstanding
common
stock.
Additionally,
Ms.
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
92
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.
(2)
Mr. Anastasios
Margaronis
may
be
deemed
to
beneficially
own
8.0%
of
our
outstanding
common stock through Anamar Investments Inc. and ESX Investments Inc. as the result of his
ability
to
control
the
vote
and
disposition
of
such
entities.
These
shares
include
3,014,529
shares
of
common
stock
issuable
to
Anastasios
Margaronis
upon
exercise
of
1,792,794
warrants distributed on December 14, 2023.
(3)
Mr. Simeon Palios may be deemed to beneficially own 5.7% of our outstanding common stock
through
Taracan
Investments
S.A
and
Limon
Compania
Financiera
S.A.
as
the
result
of
his
ability
to
control
the
vote
and
disposition
of
such
entities.
These
shares
include
1,189,537
shares
of
common
stock
issuable
to
Symeon
Palios
upon
exercise
of
707,439
warrants
distributed on December 14, 2023.
(4)
This information is derived
from a Schedule
13D filed with
the SEC on June
12, 2025, adjusting
the percentage figure
based on the
common shares issued
and outstanding as
of the date
of
this report.
(4)
Mr.
Ioannis
Zafirakis
may
be
deemed
to
beneficially
own
4,934,878
shares,
or
3.9%
of
our
outstanding common stock, beneficially
owned through Abra Marinvest
Inc. The shares include
shares of common
stock issuable
upon exercise of
his warrants. Mr. Eleftherios
Papatrifon may
be deemed
to beneficially
own 1,800,772
shares, or
1.5% of
our outstanding
common stock.
The
shares
include
shares
of
common
stock
issuable
upon
exercise
of
his
warrants.
Mr.
Apostolos Kontoyannis may
be deemed
to beneficially
own 1,314,941
shares, or
1.1% of
our
outstanding
common
stock.
All
other
officers
and
directors
each
own
less
than
1%
of
our
outstanding common stock.
As of
March 12,
2026, we
had 79
shareholders of record,
65 of
which were located
in the
United States
and
held
an
aggregate
of
103,357,639
of
our
common
shares,
representing
82.3%
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 101,864,543
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.
93
B.
Related Party Transactions
OceanPal Inc.,
or OceanPal
We own 207
shares of OceanPal’s Series
C Convertible Preferred Shares and 145,978
common shares.
On October 28, 2025, the Company sold
its 500,000 Series B Preferred Shares for
cash consideration of
$3.0
million.
to
purchasers
in
connection
with
a
PIPE
offering
by
and
between
OceanPal
and
certain
purchasers.
Series C Preferred Shares do
not have voting rights unless
they are 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
are
convertible
into
common stock
at the
Company’s option,
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 $1,000 per
share.
Dividend income from the OceanPal preferred shares during 2025 amounted
to $16,560.
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, only one
of the
six vessels identified in the agreement remains unsold.
Series D Preferred Stock
In June
2021, we
issued 400
shares of
our designated
Series D
Preferred Stock,
par value
$0.01 per
share,
to Tuscany Shipping
Corp., an entity controlled by
our Chief Executive Officer,
Ms. 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
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
94
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
our 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 Company.
Steamship Shipbroking Enterprises Inc.
Steamship, an
affiliated entity
controlled by
our CEO
Ms. Semiramis
Paliou,
provides us
brokerage services
for an annual
fee pursuant
to a Brokerage
Services Agreement.
In 2025, brokerage
fees, amounted
to $3.9
million and
we paid
an additional
amount of
$0.4 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 25, 2026 due to expire on December 31, 2026.
Altair Travel Agency S.A.
Altair Travel Agency S.A., or Altair,
an affiliated entity that is controlled by our CEO Ms. Semiramis Paliou
provides us with travel related services. Travel related expenses in 2025, amounted
to $2.7 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 for
a fee charged
as a percentage of
the vessels’ gross revenues. Management fees
in 2025 amounted to $1.2
million and
commissions amounted to $0.3 million.
Bond acquisition
Officers and directors of
the Company and/or
entities affiliated with them
purchased an aggregate
of $47.3
million principal amount of our senior unsecured bond issued on July
2, 2024.
95
Bergen Ultra LP
Bergen Ultra LP,
or Bergen, is a limited partnership that owned until January 2026 a dry bulk carrier. One
of our subsidiaries,
Diana General
Partner Inc.,
owns 3%
of the
partnership and
acts as its
General Partner
and another subsidiary, Komi Shipping Company Inc., owns 22%.
The remaining partnership interests
are
owned by unaffiliated
third 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 and
a commission
agreement under
which
the
Company
received
a
commission
of
0.8%
per
annum,
on
the
outstanding
balance
of
the
loan,
as
compensation for providing this guarantee
to Nordea. We have also entered
into an administrative service
agreement
under
which
DSS
provides
administrative
services
to
Bergen.
In
2025,
income
from
administrative
fees
amounted
to
$15,000,
and
we
received
$105,976
as
payment
for
the
guarantee
commission.
On November 19, 2025, Bergen entered into an agreement with an unrelated third party to sell the vessel
for $26.4 million.
Upon completion of the vessel sale
and full repayment of Bergen’s loan with Nordea,
the
Company’s corporate guarantee for Bergen’s obligations under the loan was released.
Windward Offshore GmbH
Windward
Offshore
GmbH
&
Co.
KG,
or
Windward,
is
a
limited
partnership operating
an
offshore
wind
vessel
company
based
in
Germany.
One
of
our
subsidiaries,
Diana
Energize
Inc.,
or
Diana
Energize,
entered
into
a
novated
agreement
to
contribute
capital
for
Windward’s
construction
of
four
CSOVs,
ultimately
contributing
45.87%
of
Windward’s
capital.
On
May
5,
2025,
a
new
partner
was
admitted
to
Windward and the Company received Euro 3.1 million as
return of capital, which reduced the Company’s
ownership percentage to 34%. As of December 31, 2025, our investment
in Windward amounted to $44.5
million consisting
of
advances to
fund
the
construction of
the
vessels,
working capital
and
our
share in
Windward’s results.
Diana Mariners Inc.
In
2023,
we
acquired
through
one
of
our
subsidiaries,
Cebu
Shipping
Company
Inc.,
or
Cebu,
a
24%
interest in Cohen Global Maritime Inc., or Cohen,
a company organized in the Republic of the
Philippines
for the purpose of providing
manning services to our vessels.
Cohen was renamed Diana
Mariners Inc., or
Diana Mariners, in August
2024. As of December
31, 2025, our investment
in Diana Mariners
amounted to
$0.4 million and
$0.8 million was
due from Diana
Mariners. As of
December 31,
2025, all of
the Company’s
ship-owning subsidiaries had entered into manning agreements
with Diana Mariners.
Ecogas Holding AS.
On March 12, 2025, we entered, through our wholly owned subsidiary Diana Gas Inc., into a joint venture
agreement with an unrelated party to establish
Ecogas, a company formed under the laws
of Norway,
for
the purpose of building two 7,500 cbm LPG vessels scheduled for delivery in
2027. The Company agreed
to contribute $18.5 million,
representing an 80% equity interest for the construction of the two vessels. As
of December 31,
2025, our investment in
Ecogas amounted to $8.8
million, representing a
portion of our
equity contributions to fund the construction of the vessels and working capital as well as our share of the
loss recognized from this investment at year-end.
C.
Interests of Experts and Counsel
Not Applicable.
96
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
fourth
quarter
of
2025
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 occurs
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
97
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 16
“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” since March 23, 2005.
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 July 2,
2024,
our
8.75%
Senior
Unsecured
Bond
due
2029
commenced
trading
on
the
Oslo
Stock
Exchange,
under the symbol "DIASH03."
D.
Selling Shareholders
Not Applicable.
E.
Dilution
Not Applicable.
F.
Expenses of the Issue
Not Applicable.
98
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 2.6
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.
99
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
100
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,
2025,
approximately
6.5%
of
the
Company’s
shipping
income
was
attributable to the transportation of cargoes either to or from a U.S. port. Accordingly, approximately 3.3%
of
the
Company’s
shipping
income
would
be
treated
as
derived
from
U.S. sources
for
the
year
ended
December 31, 2025. 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 $0.3 million for the year ended December 31, 2025.
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 2025
taxable year, 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
either
the
50%
Ownership Test
or the Publicly Traded Test.
The 50% Ownership Test
For
purposes
of
the
50%
Ownership
Test,
“qualified
shareholders”
include:
(i)
individuals
who
are
“residents”
(as
defined
in
the
Treasury
regulations
promulgated
under
Section
883
of
the
Code
(the
“Section
883
Regulations”)
of
qualified
foreign
countries,
(ii)
corporations
organized
in
qualified
foreign
countries that meet the
Publicly-Traded Test
(discussed below), (iii) governments
(or subdivisions thereof)
of qualified foreign countries, (iv)
non-profit organizations organized in qualified foreign countries, and
(v)
certain beneficiaries
of pension
funds organized
in qualified
foreign countries,
in each
case, that
do not
beneficially
own
the
shares
in
the
foreign
corporation
claiming
the
Section
883
Exemption,
directly
or
101
indirectly (at any point in
the chain of ownership), in
the form of bearer shares
(as described in the Section
883 Regulations).
For this
purpose, certain
constructive ownership
rules under
the Section
883 Regulations
require looking
through the ownership
of entities
to the owners
of the interests
in those entities.
The foreign
corporation claiming
the
Section 883
Exemption based
on the
50% Ownership
Test
must obtain
all
the
facts
necessary
to
satisfy
the
IRS
that
the
50%
Ownership
Test
has
been
satisfied
(as
detailed
in
the
Section 883 Regulations) and must meet certain substantiation
and reporting requirements.
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.
Under
the
Treasury
Regulations, the
Company’s
common
and
preferred 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 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.
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.
However, the requirements of establishing these exemptions are onerous and there can be no assurance
that the
Company will
either satisfy
the
50% Ownership
Test
or the
Publicly Traded
Test
in 2025
or in
future taxable years.
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
2025
taxable
year
and
in
the
absence
of
exemption
under Section 883 of
the Code, the Company
would be subject to
$0.3 million of U.S.
federal income tax
under the 4% Gross Basis Tax Regime.
102
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
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
103
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
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.
104
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
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
105
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,
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:
106
•
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.
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
107
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
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.
108
Item 11.
Quantitative and Qualitative Disclosures about Market Risk
Interest Rates
We
are
exposed
to
market
risks
associated
with
changes
in
interest
rates
related
to
our
loan
facilities,
under which we
pay interest at
term SOFR plus
a margin. Increases
in interest rates
could adversely affect
our results
of operations.
An increase
of 1%
in the
interest rates
of our
loan facilities
bearing a
variable
interest rate during 2025, could have increased our interest cost by
approximately $3.4 million.
We expect to continue
to have debt
outstanding, which could
impact our results
of operations and
financial
condition. We manage
our interest rate
exposure by maintaining a
mix of floating
and fixed interest rates
financing agreements.
During 2022, we refinanced certain portions of our loans bearing a floating interest
rate
through sale
and leaseback
transactions with
fixed rates.
In
2023, we
entered into
an
interest rate
swap for
$30 million
under which
we pay
fixed interest
and receive
floating. Through
these agreements
and our bond, which
also bears a fixed
interest rate, we
manage a portion of
our exposure to interest
rates
associated with the remaining agreements that bear floating interest
rates.
As of December
31, 2025, 2024
and 2023, 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 incur less than half of our operating expenses (30% in
2025 and 29% in 2024) and
approximately half of our general and administrative expenses (49%
in 2025
and 46%
in 2024)
in currencies
other than
the U.S.
dollar,
primarily the
Euro. For
accounting purposes,
expenses incurred in Euros are translated
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
this
risk
to
be
material
to
our
results
of
operations, as in 2025 and 2024, non-US dollar
expenses represented 19% and 17%, respectively of our
revenues. Accordingly, we have not entered into derivative instruments to hedge this exposure.
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 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.
109
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
Officers,
have
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 Officers
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, 2025 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.
110
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,
Deloitte
Certified
Public 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” under applicable NYSE and SEC standards.
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 the
Annual Report filed
on Form
20-F on March
21, 2025,
and incorporated by
reference herein. 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,
Deloitte Certified Public
Accountants S.A.,
the member firms
of Deloitte Touche
Tohmatsu
Limited and
their respective
affiliates (collectively,
“Deloitte”) have
billed us
for audit
services.
Audit
fees
in
2025
and
2024
amounted
to
€
382,822
and
€
360,000,
or
approximately
$414,398
and
$388,000, respectively, and relate to compensation
for professional services
rendered for the audits
of our
consolidated financial statements and in connection with the
review of regulatory filings.
The amount of €
111
382,822 consists of
€ 367,822 related
to Deloitte and
€ 15,000 to Ernst
& Young (Hellas) Certified Auditors
Accountants S.A.
b) Audit-Related Fees
Audit related fees during 2025 amounted to € 9,000,
as compared to € 51,301 in 2024 and relate
to audit
services provided in connection with the Company’s filings with the SEC.
c) Tax Fees
None.
d) All Other Fees
During 2025, we
paid fees amounting to
€17,280 related to
professional services rendered by
Deloitte in
connection with assistance provided with the Company’s cybersecurity assessment.
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 2025,
we did
not repurchase
any shares
of common
stock and
as of
December 31,
2025 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.
On
December
2,
2024,
the
Company
commenced
a
tender
offer
to
purchase
up
to
15,000,000 shares of its
outstanding common stock, at
$2.00 per share, using
funds available from cash
and
cash
equivalents.
The
tender
offer
was
settled
on
January
7,
2025
and
we
purchased
a
total
of
11,442,645 shares of common stock for an aggregate amount of $22.9 million.
Item 16F.
Change in Registrant’s Certifying Accountant
Not applicable.
112
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.
113
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, we have
adopted
insider trading policies and procedures
governing
the
purchase,
sale,
and
other
dispositions
of
the
registrant’s
securities
by
directors,
senior
management, and employees
that are reasonable
designed to promote
compliance with applicable
insider
trading laws, rules and regulations, and
NYSE listing standards for fiscal
year ending December 31, 2024.
Our insider trading policies and procedures are filed as Exhibit
11.2 to this annual report.
Item 16K. Cybersecurity
Risk management and strategy
We have security measures
in place
to mitigate the
risk of cybersecurity
threats affecting our technological
environment and
our business.
Cybersecurity risk
management is
integrated into
our broader
enterprise
risk management
(ERM) framework
to protect
shareholder value
and ensure
business continuity.
Cyber
risks are assessed
alongside operational,
financial, and compliance
risks. By integrating
cybersecurity into
our broader risk management strategy, we aim to reduce exposure
to cyber incidents, safeguard sensitive
data,
and maintain
investor
confidence in
our
long-term resilience
and
operational stability.
Throughout
2025, the
Company successfully
maintained its
ISO 27001
certification, demonstrating
ongoing compliance
with
the
rigorous
requirements
of
this
internationally
recognized
standard.
The
Company's
Chief
Information Security Officer (CISO) regularly
conducts internal reviews and enhancements to ensure that
our
cyber
risk
management
framework
remains
aligned
with
ISO
27001.
In
preparation
for
evolving
regulatory
landscapes,
the
Company
also
completed
a
NIS2
Gap
Analysis
in
2025
and
has
initiated
remediation of findings to ensure future compliance.
Additionally,
we
have
established structured
processes
for
third-party
risk
management.
During
vendor
onboarding and
ongoing monitoring,
information security
assessments are
conducted.
During 2025,
this
third-party risk management
program included
a focused
web application
penetration test
on a critical
ERP
vendor, ensuring the security of our supply chain and partner ecosystem.
Cybersecurity training
is carried
out on
a company-wide
basis to
all employees
and seafarers.
During 2025,
the Company executed a multi-faceted awareness strategy. This included the release of a fully digitalized
cybersecurity
awareness
training
program
specifically
for
crew
members.
Onshore,
we
implemented
gamified learning
experiences, synchronous
and asynchronous
security awareness
sessions, and
custom-
tailored
phishing
campaigns.
To
further
enhance
visibility,
we
deployed
a
new
internal
communication
mechanism
to
push
security
awareness
material
directly
to
employee
workstation
lock-screens.
The
security
team
has
further
enhanced
our
processes
and
increased
our
defenses
by
maintaining
a
cybersecurity testing program. In 2025,
this included internal penetration testing on
vessel networks and a
comprehensive
social
engineering
exercise
conducted
across
the
entire
fleet.
A
centralized
monitoring
system
is
in
place
throughout
the
year.
In
2025,
we
fully
onboarded
our
shore-based
operations
to
a
managed Security Operations Center (SOC). This partnership
enables proactive 24/7 security monitoring,
114
threat intelligence, and rapid
incident response. Regarding
operational resilience and
network security, we
optimized
our
fleet’s
data
consumption and
patch management
strategy during
the
year
by centralizing
Windows update deployment on vessels, significantly
reducing bandwidth usage and ensuring that critical
security
patches
are
applied
efficiently
across
the
fleet.
To
further
ensure
business
continuity
and
operational
resilience,
the
Company
successfully implemented
a
cloud-based disaster
recovery
site
for
critical applications
during 2025.
This migration
ensures that
essential business
functions can
be rapidly
restored and maintained in the event of physical or digital disruptions
to our primary systems.
As emerging
technologies such
as Artificial
Intelligence become
more prevalent,
the Company
is taking
steps to ensure responsible use. In 2025, we initiated the creation of a draft AI policy to govern the usage
of AI tools within
the organization. Furthermore,
we selected a
training provider for
an AI training
workshop
to upskill employees on the risks and
benefits of AI technology.
While we utilize AI-driven tools within our
security
stack
(such
as
within
our
Security
Information
and
Event
Management
—
SIEM
and
Security
Operations
Center-SOC
solutions),
we
continue
to
monitor
the
regulatory
environment
regarding
AI
disclosures.
Looking
ahead
to
2026,
our
strategic
focus
shifts
towards
hardening
our
infrastructure
and
expanding
control
over
unmanaged
assets.
Key
projects
include
the
implementation
of
Mobile
Application
Management (MAM) technology
to secure corporate
data on
unmanaged devices, and
the installation of
enterprise-grade firewalls across our vessel fleet.
We will also
prioritize the hardening of our
Azure cloud
infrastructure
and
proceed with
a
comprehensive Information
Protection project,
for
which an
RFP
was
issued in
late 2025.
Furthermore, we
will maintain
a strong
focus on
the human
factor by
continuing our
rigorous information security
training and
awareness programs, incorporating
new modules
on emerging
threats to ensure our staff and crew remain vigilant.
In parallel to these security measures,
our Company continues to actively
invest on Data Governance
and
the Data
Management, expanding its
Data Platform
over Microsoft Azure
Technologies,
which acts
as a
centralized
and
secure
source
of
truth
for
our
operations,
strengthening
the
quality
and
integrity
of
company’s informational assets.
The Data Platform
enables better, faster and more
accurate monitoring of
Company activities and improves decision making and productivity. This transition is further strengthened
with the digital upskilling of relevant personnel, enabling the proper and
secure use of information assets.
We are
committed to enhance
and enriching 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
Chief
Information
Security
Officer, who has 12 years of specialized information security experience.
This experience
includes serving
as Chief
Information Security
Officer at
Diana Shipping
Services S.A.,
Information Security Officer at Viva
Wallet, Senior IT Auditor at
First Data Corporation focusing on EMEA
region security audits, and IT
Auditor/Security Consultant at Deloitte's
Enterprise Risk Services. The
Chief
Information
Security
Officer
holds
CISA
and
CDPSE
certifications
from
ISACA,
completed
Information
Security Management Systems
(ISMS) Auditor/Lead Auditor
Training in accordance with
ISO 27001:2013,
and possesses an MSc in Digital Systems Security from the University
of Piraeus.
The Chief Information
Security Officer is
responsible
for assessing, managing
and mitigating 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. To
115
support
these
efforts,
the
cybersecurity
department
expanded
its
resources
in
2025,
finalizing
the
recruitment process for additional specialized personnel who
joined the team in early 2026.
Our management
team plays
a vital
role in
assessing and
managing the
Company's material
risks from
cybersecurity threats. The Chief Information Security
Officer leads our cybersecurity program, reporting to
the Digital Transformation Officer, who in turn
reports to the Chief
Executive Officer on matters
of strategic
importance. Additionally,
the Chief Information
Security Officer holds
biweekly meetings with
the CEO to
discuss emerging threats, ongoing security initiatives, and strategic
cybersecurity priorities.
The Chief
Information Security
Officer reports
to the
management team
on a
semi-annual basis,
presenting
major
cybersecurity
incidents
and
key
performance
indicators
related
to
the
company's
cybersecurity
posture. Additionally, the
Chief Information
Security Officer
reports to
the audit
committee on
a semi-annual
basis regarding
progress
on critical
cybersecurity initiatives,
results of
the company's
cybersecurity
maturity
level assessments, and updates on the implementation of our
cybersecurity strategy.
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
As of the
date of this
annual report, we
have not identified
any cybersecurity threats that
have materially
affected or are
reasonably likely
to materially
affect our business
strategy, results of operations,
or financial
condition. This assessment
is supported by
our proactive vulnerability management
program, successful
vessel audit schedule adherence, and the
lack of material breaches identified
during the fiscal year ended
December 31, 2025. 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.”
116
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
1.2
1.3
1.4
1.5
2.1
2.2
2.3
2.4
2.5
2.6
**
2.7
2.8
4.1
4.2
(24)
4.8:
**
4.12:
(28)
4.13:
(28)
4.14:
**
4.21
4.22
4.47:
(26)
4.48:
(26)
117
4.50:
(25)
4.52:
(25)
8.1
10.5
11.1
(28)
11.2
**
12.1
**
12.2
**
13.1
**
13.2
**
15.1
**
15.2
**
97.1
101
The following materials
from the Company's
Annual Report on
Form 20-F for
the fiscal year
ended
December 31, 2025,
formatted in eXtensible
Business Reporting Language
(XBRL): (i) Consolidated
Balance Sheets as of December 31, 2025 and 2024; (ii) Consolidated Statements of Income for the
years ended December 31,
2025, 2024 and
2023; (iii) Consolidated
Statements of Comprehensive
Income for
the years
ended December
31, 2025,
2024 and
2023; (iv)
Consolidated Statements
of
Stockholders'
Equity
for
the
years
ended
December
31,
2025,
2024
and
2023;
(v)
Consolidated
Statements
of
Cash
Flows
for
the
years
ended
December
31,
2025,
2024
and
2023;
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,
and incorporated
by
reference herein.
(2)
Filed as
Exhibit 99.3
to the
Company's Form
6-K filed
on November
15, 2023,
and incorporated
by
reference herein.
(3)
Filed
as
Exhibit
3.3
to
the
Company's
Form
8-A
filed
on
February
13,
2014,
and
incorporated
by
reference herein.
(4)
Filed as Exhibit 3.1 to the Company's Form 8-A12B/A filed on January 15, 2016, and incorporated by
reference herein.
(5)
Filed as Exhibit 4.1 to the Company's Form 6-K filed on May 28, 2015, and
incorporated by reference
herein.
(6)
Filed as Exhibit 4.2 to the Company's Form 6-K filed on May 28, 2015, and
incorporated by reference
herein.
(7)
Filed as Exhibit 4.1 to the Company's Form 8-A12B/A filed on February 2, 2024,
and incorporated by
reference herein.
(8)
Filed as an Exhibit to
the Company's Registration
Statement (File No. 123052)
on March 1, 2005, and
incorporated by reference herein.
(9)
Filed as
an Exhibit
to the
Company's Amended
Registration Statement
(File No.
123052) on
March
15, 2005, and incorporated by reference herein.
(10)
Filed as
Exhibit 1.1
to the
Company's Form
6-K filed
on September
9, 2024,
and incorporated
by
reference herein.
(11)
Filed
as
an
Exhibit
to
the
Company's
Annual
Report filed
on
Form
20-F
on
March
27,
2014,
and
incorporated by reference herein.
(12)
Reserved.
(13)
Filed
as
an
Exhibit
to
the
Company's
Annual
Report filed
on
Form
20-F
on
March
28,
2016,
and
incorporated by reference herein.
(14)
Reserved.
118
(15)
Reserved.
(16)
Filed as Exhibit 4.1 to the Company's Form 8-A12B filed on
February 13, 2014, and incorporated by
reference herein.
(17)
Reserved.
(18)
Filed
as
an
Exhibit
to
the
Company’s
Form
6-K
filed
on
February
6,
2019,
and
incorporated
by
reference herein.
(19)
Reserved.
(20)
Reserved.
(21)
Filed as an
Exhibit to the
Company’s Form 6-K
filed on April
23, 2021, and
incorporated by reference
herein.
(22)
Filed
as
an
Exhibit to
the
Company’s
Form
6-K filed
on
September
8,
2023,
and
incorporated by
reference herein.
(23)
Filed as an Exhibit to
the Company’s Form 6-K filed
on July 31, 2021, and
incorporated by reference
herein.
(24)
Filed
as
an
Exhibit to
the
Company’s
Annual
Report filed
on
Form
20-F
on
March
12,
2021,
and
incorporated by reference herein.
(25)
Filed
as
an
Exhibit
to
the
Company’s
Annual
Report
filed
on
Form
20-F
on
April
5,
2024,
and
incorporated by reference herein.
(26)
Filed as
an Exhibit
to the
Company’s Annual
Report filed
on Form
20-F
on March
27, 2023,
and
incorporated by reference herein.
(27)
Filed as
an Exhibit
to the
Company’s
Form 6-K
filed
on December
14, 2023,
and incorporated
by
reference herein.
(28)
Filed
as
an
Exhibit to
the
Company’s
Annual Report
filed
on
Form 20-F
on
March
21,
2025,
and
incorporated by reference herein.
119
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/ Maria Dede
Maria Dede
Co-Chief Financial Officer and Treasurer
Dated: March 13, 2026
F-1
DIANA SHIPPING INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm: Deloitte
Certified Public
Accountants S.A. (PCAOB ID No.
1163
)
............................................................................
F-2
Report of Independent Registered Public Accounting Firm on
Internal Controls Over
Financial Reporting: Deloitte Certified Public Accountants S.A.
(PCAOB ID No.1163)
.......
F-5
Report of Independent Registered Public Accounting Firm: Ernst
& Young (Hellas)
Certified Auditors Accountants S.A. (PCAOB ID No.
1457
)
...................................................
F-7
Consolidated Balance Sheets as of December 31, 2025 and 2024
................................
...
F-8
Consolidated Statements of Income for the years ended December
31, 2025, 2024 and
2023 ................................................................
................................
................................
..
F-9
Consolidated Statements of Comprehensive Income for the years
ended December 31,
2025, 2024 and 2023
................................
................................
................................
.........
F-10
Consolidated Statements of Stockholders' Equity for the years
ended December 31,
2025, 2024 and 2023
................................
................................
................................
.........
F-
11
Consolidated Statements of Cash Flows for the years ended December
31, 2025, 2024
and 2023 ................................
................................
................................
...........................
F-13
Notes to Consolidated Financial Statements................................
................................
......
F-15
F-2
Report of Independent Registered Public Accounting Firm
To
the Shareholders 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. and subsidiaries
(the “Company”) as of December 31, 2025 and 2024,
the related consolidated statements
of income,
comprehensive income, stockholders’ equity, and cash flows, for each of the two years in the period
ended December 31, 2025,
and the related notes (collectively referred to as the “financial
statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company as of December 31, 2025 and 2024, and the results of its operations
and its cash flows for
each of the two years in the period ended December 31, 2025, in conformity
with accounting principles
generally accepted in the United States of America.
We have also 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, 2025, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report
dated March 13,
2026, expressed an unqualified opinion on the Company’s internal control over financial
reporting.
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.
F-3
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 critical audit matters
does not alter in any way our opinion on the 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 disclosures to which it relates.
Impairment of long-lived assets– Future Charter Rates for vessels
with impairment indicators –
Refer to Note 2 of the consolidated financial statements.
Critical Audit Matter Description
The Company’s evaluation of vessels held for use by the Company for impairment
involves an initial
assessment of each vessel to determine whether events or changes
in circumstances indicate that the
carrying amount of the vessel,
including its unamortized deferred costs, may not be recoverable. As
at
December 31, 2025, 10 out of 36 vessels held for use had impairment
indicators.
If impairment indicators exist, the Company compares undiscounted
projected net operating cash flows
to the carrying value of the respective vessel,
including its unamortized deferred costs, with impairment
indicators to determine if the vessel is required to be impaired.
When the Company’s estimate of
undiscounted projected net operating cash flows, excluding
interest charges, expected to be generated
by the use and eventual disposition of the vessel is less than its carrying
amount, the Company records
an impairment loss. Impairment loss is equal to the difference between
the vessel’s carrying value,
including its unamortized deferred costs and fair market value
The Company makes various assumptions and judgments to determine
the undiscounted projected net
operating cash flows expected to be generated over the remaining
useful life of the vessel, including
estimates and assumptions related to the future charter rates. Future charter
rates are the most
significant and subjective assumption that the Company uses
for its undiscounted projected net operating
cash flows. For periods of time where the vessels are not fixed under
time charter contracts, the
Company estimates the future daily time charter equivalent rate
(the “future charter rate”) for the vessels’
unfixed days based on the most recent 10-year average of historical
1 year time charter rates available
for each vessel class, as such averages take into account the volatility
and cyclicality of the market.
These assumptions are based on historical trends as well as future
expectations. Assumptions
are in line
with the Company’s historical performance and its expectations
for future fleet deployment strategy.
We identified future charter rates for vessels with impairment indicators used
in the undiscounted
projected net operating cash flows as a critical audit matter because of
the complex judgements made by
management to estimate them and the significant impact these estimates
have on the undiscounted
projected net cash flows expected to be generated over the remaining
useful life of the vessel.
This required a high degree of auditor judgment and an increased extent
of effort when performing audit
procedures to evaluate the reasonableness of management’s future charter
rates.
F-4
How the Critical Audit Matter Was
Addressed in the Audit
Our audit procedures related to the future charter rates for vessels
with impairment indicators used in the
undiscounted projected net operating cash flows included
the following, among others:
•
We tested the effectiveness of controls over management’s review
of the impairment analysis,
including the future charter rates used within the undiscounted projected
net operating cash flows.
•
We evaluated the Company’s methodology for estimating the
future charter rates utilized in the
undiscounted projected net operating cash flows by comparing
them to 1) the Company’s
historical rates, 2) historical rate information of similar size
vessels published by a third-party
broker and 3) other external market sources, including reports on
prospective market outlook.
●
We evaluated management’s ability to accurately forecast future
charter rates by comparing
actual results to management’s historical forecasts.
/s/
Deloitte Certified Public Accountants S.A.
Athens, Greece
March 13, 2026
We have served as the Company’s auditor since 2024.
F-5
Report of Independent Registered Public Accounting Firm
To
the Shareholders and the Board of Directors of Diana Shipping
Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Diana Shipping
Inc. and subsidiaries (the
“Company”) as of December 31, 2025, based on criteria established
in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission
(COSO).
In our opinion, the Company maintained, in all material respects,
effective internal control over
financial reporting as of December 31, 2025, based on criteria established
in Internal Control - Integrated
Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight
Board (United States) (PCAOB), the consolidated financial statements
as of and for the year ended
December 31, 2025, of the Company and our report dated March 13,
2026,
expressed an unqualified
opinion on those financial statements.
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.
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.
F-6
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/ Deloitte Certified Public Accountants S.A.
Athens, Greece
March 13, 2026
F-7
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
statements
of
income,
comprehensive
income, stockholders'
equity
and
cash
flows
of
Diana
Shipping
Inc.
(the
Company)
for
the
year
ended
December
31,
2023,
and
the
related
notes (collectively
referred
to
as
the
“consolidated
financial
statements”). In
our opinion, the
consolidated financial statements
present fairly,
in all
material respects,
the
results
of
the
Company ‘s
operations and
its
cash flows
for the
year
ended December
31, 2023,
in
conformity with U.S. generally accepted accounting principles.
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 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 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
audit
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
audit
provide
a
reasonable basis for our opinion.
/s/
Ernst & Young (Hellas) Certified Auditors Accountants S.A.
We have served as the Company’s auditor from 2004 to 2023.
Athens, Greece
April 4, 2024
F-8
DIANA SHIPPING INC.
CONSOLIDATED BALANCE SHEETS
December 31, 2025 and 2024
(Expressed in thousands of U.S. Dollars – except
for share and per share data)
2025
2024
ASSETS
Current Assets
Cash and cash equivalents (Note 2 (e))
$
50,505
$
124,666
Time deposits (Note 2 (e))
-
63,500
Restricted cash, current (Notes 2(e) and 8)
53,750
-
Accounts receivable, trade (Note 2 (f))
3,739
6,565
Due from related parties (Note 4)
1,157
194
Inventories (Note 2 (g))
4,137
4,193
Prepaid expenses and other assets
8,828
7,490
Investments in equity securities (Note 5(b))
118,194
-
Investments in a related party, current (Note 5(a))
338
-
Equity method investment, current (Note 4 (b))
4,227
-
Total Current Assets
244,875
206,608
Fixed Assets:
Advances for vessels under construction (Note 6)
20,877
19,558
Vessels, net (Note 6)
777,938
833,412
Property and equipment, net (Note 7)
27,848
27,175
Total fixed assets
826,663
880,145
Other Noncurrent Assets
Restricted cash, non-current (Note 8)
18,000
19,000
Due from related parties, non-current (Note 4)
-
155
Equity method investments (Note 4)
53,875
42,826
Investments in a related party (Notes 2 (y) and
5(a))
-
4,415
Other non-current assets
31
31
Deferred costs
26,748
17,838
Total Non-current Assets
925,317
964,410
Total Assets
$
1,170,192
$
1,171,018
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Long-term debt, current, net of deferred financing
costs (Note 8)
$
50,281
$
45,230
Finance liabilities, current (Note 9)
10,041
9,608
Accounts payable
10,611
8,990
Due to related parties (Note 3)
89
190
Accrued liabilities
13,444
11,896
Deferred revenue
4,970
4,235
Fair value of derivatives (Note 2 (bb) 8)
144
31
Total Current Liabilities
89,580
80,180
Non-current Liabilities
Long-term debt, net of current portion and deferred
financing costs (Note 8)
472,528
469,387
Finance liabilities, net of current portion (Note 9)
103,259
113,300
Fair value of derivatives (Note 8)
217
134
Warrant liability (Note 11(h))
1,330
1,802
Other non-current liabilities
865
1,158
Total Noncurrent Liabilities
578,199
585,781
Commitments and contingencies (Note 10)
-
-
Stockholders' Equity
Preferred stock (Note 11)
26
26
Common stock, $
0.01
par value;
1,000,000,000
shares authorized and
115,787,434
and
125,203,405
issued and outstanding on December 31, 2025,
and 2024, respectively
(Note 11)
1,158
1,252
Additional paid-in capital
1,126,049
1,139,363
Accumulated other comprehensive income
3,648
312
Accumulated deficit
(628,468)
(635,896)
Total Stockholders' Equity
502,413
505,057
Total Liabilities and Stockholders' Equity
$
1,170,192
$
1,171,018
The accompanying notes are an integral part of
these consolidated financial statements.
F-9
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS
OF INCOME
For the years ended December 31, 2025, 2024 and 2023
(Expressed in thousands of U.S. Dollars – except for share and per share data)
2025
2024
2023
REVENUES:
Time charter revenues
$
213,541
$
228,209
$
262,098
OPERATING EXPENSES
Voyage expenses
12,417
13,607
13,621
Vessel operating expenses (Note 3)
80,244
82,587
85,486
Depreciation and amortization of deferred charges
46,525
44,691
49,785
General and administrative expenses (Note 3)
34,099
33,435
32,968
Management fees to a related party (Note 4(a))
1,191
1,332
1,313
Gain on sale of vessels (Note 3 and 6)
(3,663)
(5,799)
(5,323)
Other operating loss/(income)
538
(422)
(1,464)
Operating income, total
$
42,190
$
58,778
$
85,712
OTHER INCOME/(EXPENSE)
Interest expense and finance costs (Note 12)
(42,951)
(47,468)
(49,331)
Interest and other income
7,505
8,369
8,170
Gain/(loss) on derivative instruments (Note 8)
(196)
274
(439)
Loss on extinguishment of debt (Note 8)
-
(3,475)
(748)
Gain on deconsolidation of subsidiary (Note 4 (b))
-
-
844
Gain/(loss) on related party investments (Note 5(a))
(1,072)
(3,905)
1,502
Gain/(loss) on equity securities (Note 5(b))
14,671
(400)
2,813
Gain on warrants (Note 11(h))
490
719
1,583
Loss from equity method investments (Note 4)
(2,810)
(146)
(262)
Total other expenses, net
$
(24,363)
$
(46,032)
$
(35,868)
Net income
$
17,827
$
12,746
$
49,844
Dividends on series B preferred shares (Notes 11(b) and 13)
(5,769)
(5,769)
(5,769)
Net income attributable to common stockholders
$
12,058
$
6,977
$
44,075
Earnings per common share, basic
(Note 13)
$
0.11
$
0.06
$
0.44
Earnings per common share, diluted
(Note 13)
$
0.11
$
0.05
$
0.42
Weighted average number of common shares outstanding,
basic
(Note 13)
110,459,096
115,956,249
100,166,629
Weighted average number of common shares outstanding,
diluted
(Note 13)
110,497,640
118,655,243
101,877,142
The accompanying notes are an integral part of these consolidated financial statements.
F-10
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
For the years ended December 31, 2025, 2024 and 2023
(Expressed in thousands of U.S. Dollars)
2025
2024
2023
Net income
$
17,827
$
12,746
$
49,844
Other comprehensive income - Defined benefit plan
23
4
55
Currency translation adjustment
3,313
-
-
Other comprehensive income
3,336
4
55
Comprehensive income
$
21,163
$
12,750
$
49,899
The accompanying notes are an integral part of these consolidated financial statements.
F-
11
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS
OF STOCKHOLDERS’ EQUITY
For the years ended December 31, 2025, 2024
and 2023
(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
Accumulated
Deficit
Total
Equity
# of Shares
Par
Value
# of
Shares
Par
Value
# of
Shares
Par
Value
# of Shares
Par
Value
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
49,844
Issuance of restricted
stock and
compensation cost
(Note 11(i))
-
-
-
-
-
-
1,750,000
18
9,920
-
-
9,938
Issuance of common
stock (Note 11(f))
-
-
-
-
-
-
6,628,493
66
22,780
-
-
22,846
Issuance of common
stock for vessel
acquisitions (Note
11(e))
-
-
-
-
-
-
2,033,613
20
7,710
-
-
7,730
Dividends on series B
preferred stock
($
2.21875
per share)
(Note 11(b))
-
-
-
-
-
-
-
-
-
-
(5,769)
(5,769)
Dividends on common
stock ($
0.60
per share)
(Note 11(f))
-
-
-
-
-
-
-
-
-
-
(64,276)
(64,276)
Dividends in kind (Note
11(g))
-
-
-
-
-
-
-
-
-
-
(10,761)
(10,761)
Warrants (Note 11(h))
-
-
-
-
-
-
-
-
-
-
(7,914)
(7,914)
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
Net income
-
-
-
-
-
-
-
-
-
-
12,746
12,746
Issuance of Restricted
Stock and
Compensation Cost
(Note 11(i))
-
-
-
-
-
-
2,300,000
23
9,989
-
-
10,012
Issuance of Common
Stock (Note 11(h))
-
-
-
-
-
-
9,837,680
98
27,949
-
-
28,047
Dividends on series B
preferred stock
($
2.21875
per share)
(Note 11(b))
-
-
-
-
-
-
-
-
-
-
(5,769)
(5,769)
Dividends on common
stock ($
0.235
per
share) (Note 11(f))
-
-
-
-
-
-
-
-
-
-
(29,004)
(29,004)
F-12
Other Comprehensive
Income
-
-
-
-
-
-
-
-
-
4
-
4
BALANCE,
December
31, 2024
2,600,000
$
26
10,675
$
-
400
$
-
125,203,405
$
1,252
$
1,139,363
$
312
$
(635,896)
$
505,057
Net income
-
-
-
-
-
-
-
-
-
-
17,827
17,827
Issuance of Restricted
Stock and
Compensation Cost
(Note 11(i))
-
-
-
-
-
-
2,000,000
20
9,585
-
-
9,605
Issuance of Common
Stock (Note 11(h))
-
-
-
-
-
-
26,674
-
35
-
-
35
Stock repurchased and
retired (Note 11(e))
-
-
-
-
-
-
(11,442,645)
(114)
(22,934)
-
-
(23,048)
Dividends on series B
preferred stock
($
2.21875
per share)
(Note 11(b))
-
-
-
-
-
-
-
-
-
-
(5,769)
(5,769)
Dividends on common
stock ($
0.04
per share)
(Notes 11(f))
-
-
-
-
-
-
-
-
-
-
(4,630)
(4,630)
Other Comprehensive
Income
-
-
-
-
-
-
-
-
-
3,336
-
3,336
BALANCE,
December
31, 2025
2,600,000
$
26
10,675
$
-
400
$
-
115,787,434
$
1,158
$
1,126,049
$
3,648
$
(628,468)
$
502,413
The accompanying notes are an integral part of
these consolidated financial statements.
F-13
DIANA SHIPPING INC.
CONSOLIDATED STATEMENTS
OF CASH FLOWS
For the years ended December 31, 2025, 2024 and 2023
(Expressed in thousands of U.S. Dollars)
2025
2024
2023
Cash Flows from Operating Activities:
Net income
$
17,827
$
12,746
$
49,844
Adjustments
to
reconcile
net
income
to
cash
provided
by
operating
activities
Depreciation and amortization of deferred charges
46,525
44,691
49,785
Amortization of debt issuance costs (Note 12)
2,139
2,372
2,620
Compensation cost on restricted stock (Note 11(i))
9,605
10,012
9,938
Dividend income
-
-
(3)
Pension and other postretirement benefits
23
4
55
(Gain)/loss on derivative instruments (Note 8)
196
(274)
439
Gain on sale of vessels (Note 6)
(3,663)
(5,799)
(5,323)
(Gain)/loss on related party investments (Note 5)
1,072
3,905
(1,502)
Loss on extinguishment of debt
-
3,475
748
Gain on deconsolidation of subsidiary
-
-
(844)
Loss from equity method investments, net of dividend (Note 4)
2,830
146
262
(Gain)/loss on equity securities (Note 5(b))
(14,671)
400
(2,813)
Gain on warrants (Note 11(h))
(490)
(719)
(1,583)
(Increase) / Decrease
Accounts receivable, trade
2,826
(695)
256
Due from related parties
(808)
119
(252)
Inventories
56
863
(511)
Prepaid expenses and other assets
(1,379)
1,247
(1,950)
Other non-current assets
-
-
70
Investments in equity securities
-
20,329
(17,916)
Increase / (Decrease)
Accounts payable
1,621
(673)
(1,761)
Due to related parties
(101)
(569)
(57)
Accrued liabilities
1,548
(520)
282
Deferred revenue
735
672
(4,195)
Other non-current liabilities
(293)
(158)
437
Drydock cost
(18,091)
(8,044)
(5,646)
Net Cash Provided by Operating Activities
$
47,507
$
83,530
$
70,380
Cash Flows from Investing Activities:
Payments
for
vessels
under
construction
and
vessel
improvements
(Note 6)
(1,502)
(20,516)
(29,732)
Proceeds from sale of vessels, net of expenses (Note 6)
22,975
35,154
36,560
Return of capital from equity method investment (Note 4)
3,505
-
-
Payments to acquire investments (Note 4 and 5 (b))
(121,821)
(27,203)
(10,595)
Proceeds from sale of investments (Note 4 and 5 (a))
3,005
-
-
Time deposits (Note 2 (c))
63,500
(23,500)
6,500
Payments to acquire other assets
-
-
(216)
Cash divested from deconsolidation
-
-
(771)
Proceeds from convertible loan with limited partnership
-
-
25,189
Payments to acquire property, furniture and fixtures (Note 7)
(1,671)
(3,718)
(2,006)
Net Cash Provided by/(Used in) Investing Activities
$
(32,009)
$
(39,783)
$
24,929
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt and finance
liabilities (Note
8)
55,000
117,150
57,696
Proceeds from issuance of common stock, net of fees (Note 11(h))
93
24,195
-
Payments for issuance of common stock (Note 11(e))
-
-
(79)
Payments of dividends, preferred stock (Note 11(b))
(5,769)
(5,769)
(5,769)
Payments of dividends, common stock (Note 11(f))
(4,630)
(29,004)
(41,427)
Payments for repurchase of common stock (Note 11(e))
(23,048)
-
-
Payments of financing costs (Notes 8 and 9)
(348)
(5,238)
(1,724)
Repayments of long-term debt and finance liabilities (Notes 8 and 9)
(58,207)
(123,007)
(79,842)
Net Cash Used in Financing Activities
$
(36,909)
$
(21,673)
$
(71,145)
Cash,
Cash
Equivalents
and
Restricted
Cash,
Year
Increase/(Decrease)
(21,411)
22,074
24,164
Cash, Cash Equivalents and Restricted Cash, Beginning Balance
143,666
121,592
97,428
Cash, Cash Equivalents and Restricted Cash, Ending Balance
$
122,255
$
143,666
$
121,592
F-14
RECONCILIATION OF CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
Cash and cash equivalents
$
50,505
$
124,666
101,592
Restricted cash, current
53,750
-
-
Restricted cash, non-current
18,000
19,000
20,000
Cash, Cash Equivalents and Restricted Cash, Total
$
122,255
$
143,666
$
121,592
SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash acquisition of assets
$
-
$
-
7,809
Stock issued in noncash financing activities
-
3,852
7,809
Non-cash investments acquired
-
-
10,000
Noncash dividend
-
-
41,521
Interest paid, net of amounts capitalized
$
41,505
$
46,257
46,473
The accompanying notes are an integral part of these consolidated financial statements.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-15
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
upon
consolidation.
2.
Significant Accounting Policies and Recent Accounting Pronouncements
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 controlling financial interest. In
performing
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,
the
disclosure
of
contingent
assets
and
liabilities at
the date of
the financial
statements, and
the reported
amounts of
revenues and
expenses
during the reporting period. Actual results may differ from those estimates.
c)
Other
Comprehensive
Income:
The
Company
records
certain
transactions
directly
within
stockholders’
equity
when
required
by
U.S.
GAAP
and
presents
them
separately
from
results
of
operations.
Other
comprehensive
income/(loss)
is
reported
in
a
separate
statement
of
comprehensive income
and includes
items that
are not
recognized in
net income.
The Company’s
components
of
other
comprehensive
income/(loss)
include
translation
adjustments
arising
from
equity method investments whose
functional currency is
not the US
Dollar,
and actuarial gains and
losses and other adjustments related to the Company’s defined benefit plan.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-16
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 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 income.
e)
Cash,
Cash Equivalents,
Time
Deposits and
Restricted Cash:
The Company
considers highly
liquid investments, such as time
deposits, certificates of deposit
and similar instruments with
original
maturities
of
three
months
or
less,
to
be
cash
equivalents.
Time
deposits
with
original
maturities
greater than three months are
presented separately as time deposits.
As of December 31, 2025
and
2024, time deposits with original maturities greater than three months amounted to $
0
and $
63,500
,
respectively. During 2025 and 2024, the
Company placed new time deposits with maturities greater
than
three
months
of
$
20,000
and
$
63,500
,
respectively,
and
deposits
of
$
83,500
and
$
40,000
,
respectively,
matured.
Restricted
cash
primarily
consists
of
cash
balances
that
the
Company
is
required
to
maintain
under
its
loan
facilities
(Note
8)
as
compensating
cash
balances.
These
restricted amounts are not available for general use but
are not pledged as collateral. In addition, as
of
December
31,
2025,
restricted
cash,
current
amounting
to
$
53,750
,
consists
of
loan
proceeds
drawn during the
year maintained in
a pledged account
in order to
reduce the loan’s
margin (Note 8).
f)
Accounts Receivable,
Trade:
Accounts receivable,
trade, consist of
receivables from charterers
for
hire earned
under operating
lease agreements,
net of
provisions for
doubtful accounts,
if any. At
each
balance
sheet
date,
the
Company
evaluates
all
outstanding
receivables
individually
to
assess
whether collection is
probable. If collection
of a
receivable is not
probable, the
Company records a
provision
for
doubtful
accounts
to
reduce
the
carrying
amount
of
the
receivable
to
the
amount
expected to be collected. Receivables that are determined to be uncollectible are written off against
the
provision
for
doubtful
accounts
(if
one
exists)
or
directly
to
expense
when
identified.
As
of
December 31, 2025 and 2024 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,
victualing stores,
and, when
applicable, bunkers
on
board vessels that
are not under employment
at the balance
sheet date. Inventories are
measured
at
the
lower
of
cost
or
net
realizable
value,
in
accordance
with
ASC
330.
Net
realizable
value
represents the estimated
selling price in
the ordinary course
of business, less
reasonably predictable
costs of disposal and transportation. When
evidence indicates that net realizable
value is lower than
cost, the difference is
recognized as a loss
in earnings in
the period identified.
Inventory write-downs
are not reversed
in subsequent
periods. Cost
is determined
using the first-in,
first-out method
(FIFO).
Amounts removed from inventory are also determined by the
first-in, first-out method.
h)
Vessel
Cost
: Vessels
are stated
at cost
which consists
of the
contract price
and any
capitalizable
expenditures
incurred
upon
acquisition
or
during
construction,
less
accumulated depreciation
and
impairment, if any. 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 incurred
during
the
assets'
construction
period,
that
theoretically
could
have
been
avoided
if
expenditure
for
the
assets
had
not
been
made,
is
also
capitalized.
The
capitalization
rate,
applied
on
accumulated
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-17
expenditures for
the vessel,
is based
on interest
rates applicable
to outstanding
borrowings of
the
period.
i)
Vessels held
for sale:
A long-lived asset classified
as held for
sale is measured at
the lower of its
carrying amount or fair value less cost to sell when the respective held for sale criteria are met. The
asset is
not depreciated
while it
is classified
as 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.
If the
plan to sell the
asset changes, the asset is
reclassified as held and used,
measured at the lower of
its carrying amount
before it was
classified as held
for sale,
adjusted for any
depreciation expense
that would have been
recognized had the asset
been continuously classified as
held and used and
its fair value at the date of the
subsequent decision not to sell. As of December 31,
2025 and 2024,
none of the Company’s vessels met the criteria to be classified as held
for sale.
j)
Sale
and
leaseback:
The
Company
accounts for
sale
and
leaseback transactions
in
accordance
with ASC
842-40. As
seller-lessee, the
Company first
evaluates whether
the transfer
of the
vessel
qualifies as a sale under
ASC 606. For a sale
to have occurred, the control
of the vessel 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. Sale and
leaseback transactions, which include
an obligation for the Company,
as
seller-lessee,
to
repurchase
the
vessel,
or
other
situations
where
the
leaseback
would
be
classified as a finance
lease are determined
to be failed sales
under ASC 842-40.
In such cases,
the
Company does not derecognize the vessel
from its balance sheet. The
proceeds received from the
buyer-lessor are
recognized as
a financial
liability,
which is
subsequently measured in
accordance
with
the
applicable
guidance
for
such
liabilities.
No
gain
or
loss
is
recognized
at
the
time
of
the
transaction, and the vessel continues to be depreciated over its remaining
useful life.
k)
Property and equipment:
The Company owns the
land and building where
its offices are
located.
The Company also owns other plots
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,
obsolescence
or
damage
to
the
asset,
potential sales and
other business plans)
indicate that the
carrying amount of
an asset may
not be
recoverable.
For
impairment
testing
purposes,
each
vessel
together
with
its
associated
deferred
costs is
considered a
single asset
group. When
impairment indicators are
identified, the
Company
compares
the
carrying
amount
of
the
asset
group
with
the
estimated
undiscounted
projected
net
operating cash flows expected to result from the use
of the asset group over its remaining useful
life
and its
eventual disposition.
If the
carrying amount
exceeds the
undiscounted cash
flows, the
carrying
amount
of
the
asset
group
is
considered
not
recoverable
and
is
written
down
to
its
fair
value,
determined primarily through third-party valuations.
For
vessels,
the
Company
estimates
undiscounted
net
operating
cash
flows
by
considering
the
historical and projected vessel performance and utilization.
A significant assumption in this analysis
is the
estimate of
future time
charter rates
for the
unfixed days,
using the
most recent
10
-year average
of
historical 1
year time
charter rates,
net of
commissions, available
for each
vessel class.
These
estimated time charter rates reflect
the Company’s chartering strategy,
vessel operating history per
vessel class
and at least one
full shipping cycle, where
applicable. When a full
10
-year history is not
available,
the average
1 year
time charter
rate of
the available
period is
used.
Additional assumptions
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-18
include contracted charter rates
for fixed days
based on existing time
charter contracts,
anticipated
vessel
operating
expenses,
scheduled
vessel
maintenance
costs,
fleet
utilization
levels,
and
estimated
residual
values
based
on
scrap
rates.
Assumptions
are
in
line
with
the
Company’s
historical
performance
and
its
expectations
for
future
fleet
utilization
under
its
current
fleet
deployment strategy.
The undiscounted
projected net
operating cash
flows are
compared with
the
carrying
amount
of
the
vessel,
including
its
unamortized
deferred
costs.
If
the
carrying
amount
exceeds the undiscounted cash flows, the vessel is written down to its fair value, and
the difference
is recognized as an impairment loss.
During
2025,
2024
and
2023,
no
impairment
loss
was
identified
or
recorded
for
the
Company’s
vessels.
For
the
Company’s
building,
recoverability
is
assessed
by
comparing
the
carrying
amount
to
undiscounted
projected
cash
flows,
which
are
estimated
based
on
the
market
rent
the
Company
would
expect
to
pay
to
lease
comparable
premises
over
the
building’s
remaining
useful
life.
No
impairment
loss
was
identified
or
recorded
for
2025,
2024
and
2023
and
the
Company
has
not
identified
any
facts
or
circumstances that
would require
the
write
down
of
the
value
of
its
land
or
building.
m)
Vessel Depreciation:
Depreciation is calculated
using the
straight-line method over
the estimated
useful life of
the vessels, after
considering the estimated
salvage (scrap) value.
The salvage value
of
a
vessel
is
estimated
as
the
product
of
its
lightweight
tonnage
and
the
applicable
scrap
value.
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 newly
adopted regulations
restrict the
vessel’s
ability to trade on a worldwide basis, the vessel’s remaining useful life is revised as of the date such
regulations
are
adopted.
Effective July 1, 2023, the Company reassessed the scrap rate used in
determining salvage values. Based on the average demolition prices across major markets during
the preceding 15 years, the Company increased the estimated scrap rate. This change in estimate
resulted in higher salvage values,
lower depreciation expense and higher operating income. For the
period from July
1, 2023
to December 31,
2023, net
income and basic
and diluted
earnings per share
increased by $
3,773
and $
0.04
, respectively.
n)
Deferred Costs
: The
Company follows
the deferral
method of
accounting for
dry-docking and
special
survey costs. Under
this method, actual
costs incurred are
capitalized and amortized on
a straight-
line basis
over the
period through the
date the
next scheduled
survey is
expected to
become due.
Unamortized deferred
dry-docking or
special survey
costs related
to vessels
that are
sold or
impaired
are written off
and included in
the determination of the
gain or loss
on the vessel’s
sale (Note 6)
or
impairment.
o)
Financing
Costs
:
Fees
and
costs
incurred
in
connection
with
obtaining
new
loans,
refinancing
existing loans, issuing bonds, or amending existing debt agreements
are deferred and presented as
a contra-liability to
the related debt
in accordance with
ASC 835-30. These
amounts are amortized
to
interest and
finance costs
over
the
life
of the
related financing
arrangement using
the
effective
interest
method.
Fees
paid
for
undrawn
loan
facilities
are
deferred
and
are
amortized
on
a
straight-line basis over the commitment period, which approximates the effective
interest method. If
a debt
transaction is
accounted for
as a
debt extinguishment under
ASC 470-50,
any unamortized
deferred
financing
costs
related
to
the
repaid
or
extinguished
debt
are
written
off
in
the
period
of
extinguishment and included
in gain/loss on
debt extinguishment. If
a refinancing is
accounted for as
a modification,
unamortized fees
continue to
be amortized
over the
revised term
of the
debt. Loan
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-19
commitment fees
are expensed
as incurred
unless they
relate to
financing obtained
for vessels
under
construction,
in
which
case
they
are
capitalized
as
part
of
the
vessels’
construction
cost
in
accordance with ASC 835-20.
p)
Accounting for
Revenues and
Expenses:
The Company
enters into
short-
to medium-term
time
charter agreements, under which
the charterer pays a
fixed daily rate. Charter
hire is usually paid
15
days in
advance. Revenues
from time
charter agreements
constitute operating
leases under
ASC
842. A time charter contract contains a lease because (i) each vessel is an
identifiable asset, (ii) the
owner of the vessel does not have substantive
substitution rights, and (iii) the charterer
has the right
to control the
use of the
vessel during
the charter period
and obtains substantially
all of the
economic
benefits from
such
use. Each
time
charter agreement,
including consecutive
agreements with
the
same charterer,
is accounted for
as a separate
lease. The lease term
includes the non-cancellable
period
of
the
charter
plus
any
charterer
extension
options
that
the
Company
concludes
are
reasonably certain to be exercised. Under a time charter,
the charterer pays a daily hire rate for the
use
of
the
vessel
and
reimburses
the
owner
of
the
vessel
for
hold
cleanings,
extra
insurance
premiums for
trading in
restricted areas,
and charterer-caused
damages.
Time
charter revenue
is
recognized as
operating lease income
on a
straight-line basis over
the lease
term, as
the services
are provided. The Company elected the lessor practical expedient under
ASC 842-10-15-42A not to
separate the lease
and non-lease components (such
as operation and maintenance
of the vessel),
because the timing and
pattern of transfer are
the same, and the
lease component is predominant.
Charterers typically
pay port
charges, canal
expenses and
bunkers directly
to
third
parties. When
such costs are
for the
Company’s account,
they are
recorded in
voyage expenses.
Voyage expenses
also
include
commissions
on
time
charter
revenues
and
gains
or
losses
arising
from
bunkers
on
redelivery and
delivery of
vessels between
consecutive
time charters.
The Company
may earn
ballast
bonus when
a charterer
reimburses the
Company for
repositioning a
vessel. The
Company evaluates
each contract
to determine
whether the
bonus is
part of
the lease
consideration (recognized
on a
straight-line basis
over the
lease term)
or represents
a separate
service component
accounted for
under ASC 606,
recognized when the repositioning
service is performed. The
Company,
as lessor,
bears
the
costs
of
operating
and
maintaining
the
vessel,
including
crew,
insurance,
spares
and
repairs,
which are
recorded as
vessel operating
expenses. Deferred
revenue represents
amounts
collected
in
advance
of
providing
services
under
time
charter
agreements
and
is
recognized
in
revenue as the related services are performed.
q)
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 income.
r)
Earnings / (loss)
per Common Share:
Basic earnings /
(loss) per common
share is computed
by
dividing net
income /
(loss) available
to common
stockholders by
the weighted
average number
of
common
shares outstanding
during
the
year.
Shares that
are
contingently issuable
for
little
or
no
cash consideration are included in 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.
s)
Segmental Reporting:
The Company operates under one reportable segment, the operation of dry
bulk
vessels. The
Company’s management,
including its
Chief
Executive Officer,
who is
the
chief
operating decision
maker (“CODM”),
reviews operating
results solely
by the
consolidated revenue
and consolidated
operating results
of the
fleet. The
CODM does
not use
discrete financial
information
to evaluate the
operating results for each type
of charter or vessel
but is instead regularly
provided
with only the consolidated expenses as noted on
the face of the consolidated statements of income.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-20
The measure of segment assets is reported
on the balance sheet as total consolidated assets.
The
CODM
assesses
performance
for
the
vessel
operations
segment
and
decides
how
to
allocate
resources based
on consolidated
net income.
Net income
is used
to monitor
budget versus
actual
results
of
the
Company.
The
Company’s
consolidated financial
results
are
used
in
assessing
the
performance of the
segment and in
deciding whether
to reinvest profits
in the Company. 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.
t)
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.
u)
Share
Based
Payments:
The
Company
grants
restricted
share
awards,
which
are
classified
as
equity awards under ASC 718.
Restricted share awards are measured at
their grant-date fair value
and
are
not
subsequently
re-measured.
The
related
compensation
cost
is
recognized
on
a
straight-line basis over
the requisite service
period (generally the
vesting period), which
represents
the
period
during
which
the
employees
must
provide
service
in
order
to
earn
the
awards.
No
compensation cost
is recognized
for awards for
which employees
do not render
the requisite service,
unless otherwise
determined by
the Board
of Directors.
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. Compensation expense related
to
share-based payments
is
recorded
in
general
and
administrative expenses
in
the
consolidated
statements of income.
v)
Equity method
investments:
Investments in
entities in
which the
Company has
significant influence,
but does
not control,
are accounted
for under
the equity
method of
accounting in
accordance with
ASC 323. Significant
influence is generally
presumed to exist
when the Company
owns 20% or
more
of the voting
interests, unless
such influence can
be clearly demonstrated
not to exist.
Equity method
investments
are
initially
recorded
at
cost
(or
at
fair
value
if
such
measurement
results
from
a
deconsolidation
event)
and
are
subsequently
adjusted
to
reflect
the
Company’s
share
of
the
investee’s earnings
or losses
after the
date of
acquisition. The
Company records
its share
of investee
earnings or losses in
income/(loss) from equity method investments
in the consolidated statements
of income.
Dividends received,
if any, reduce
the carrying
amount of
the investment
and are
recorded
as receivables when declared.
When the Company’s share
of losses reduces
the carrying amount
of
an equity method
investment to zero,
the Company ceases
recognizing additional losses,
unless it
has committed
to provide
further financial
support to
the investee.
The Company
evaluates equity
method investments for impairment whenever events or changes
in circumstances indicate that the
carrying amount
may not
be recoverable.
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.
If
the
fair
value
of
an
investment
declines
below
its
carrying
value
and
the
decline
is
determined
to
be
other
than
temporary,
the investment is
written down to
its fair value
and the impairment
loss is recognized
in
earnings. For
equity method
investments for
which the
Company has
elected the
fair value
option
under ASC 825, the investment is measured at fair value, and subsequent changes in fair value are
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-21
recognized in gain/(loss) on related party
investments in the consolidated statements
of income. For
investees whose
functional currency
is not
the U.S.
dollar,
the
Company records
foreign currency
translation
adjustments
arising
from
its
share
of
the
investee’s
equity
in
other
comprehensive
income/(loss) as part of the cumulative translation adjustment.
w)
Shares repurchased
and retired:
The Company’s
common shares
repurchased are
immediately
cancelled
and
the
Company reduces
its
share capital
by
the
par
value
of
the
shares retired.
The
excess of the
repurchase cost of the
shares over par value
is recorded as a
reduction of additional
paid-in capital, in accordance with ASC 505-30-30, Treasury Stock.
x)
Financial Instruments, credit
losses
: 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.
No
credit losses
were identified
and recorded in 2025, 2024 and 2023.
y)
Financial
Instruments,
Investments
in
Equity
Securities
:
Equity
investments
with
readily
determinable fair values
are initially recognized
at transaction price
and subsequently measured
at
fair
value
with
changes
in
fair
value
recognized
in
net
income,
in
accordance
with
ASC
321.
For
equity
securities
without
a
readily
determinable
fair
value,
the
Company
has
elected
the
measurement alternative
in ASC
321-10-35-2, under
which such
investments are
carried at
cost, less
impairment, and adjusted
for observable price
changes in orderly transactions
for the identical
or a
similar investment of
the same issuer.
When observable price
changes occur,
the carrying amount
is
adjusted
to
fair
value
as
of
the
date
of
the
transaction,
with
the
corresponding
gain
or
loss
recognized
in
earnings. At
each
reporting
date,
the
Company
reassesses
whether
an
investment
continues
to
qualify
for
the
measurement
alternative.
The
Company
may
irrevocably
elect
to
subsequently measure
an equity security
at fair value,
with changes
recognized in earnings,
at which
point the investment is
no longer eligible for
the measurement alternative. The
Company evaluates
equity securities
measured under
the measurement
alternative for
impairment whenever
events or
circumstances
indicate
that
the
investment’s
fair
value
may
be
less
than
its
carrying
amount.
Indicators
of
impairment
include,
but
are
not
limited
to,
significant
deterioration
in
the
investee’s
financial condition, adverse
changes in its
industry or market environment,
or a decline
in its ability
to
continue
as
a
going
concern.
If
an
impairment
is
identified,
the
Company
estimates
the
investment’s fair value, and
any difference between the
carrying amount and
fair value is recognized
as an impairment loss in earnings.
z)
Contracts
in
entity’s
equity:
The
Company
evaluates
contracts
that
may
be
settled
in
the
Company’s
common
shares,
including warrants
and
pre-funded
warrants, under
the
guidance of
ASC 480 and ASC 815-40
to determine whether such instruments should be
classified as equity or
as
liabilities.
The
Company
first
assesses
whether
the
contract
is
within
the
scope
of
ASC
480,
including
instruments
that
are
mandatorily
redeemable,
require
the
issuer
to
repurchase
its
own
shares for cash, or embody an
unconditional obligation to deliver
cash. Instruments within the scope
of
ASC
480
are
classified
as
liabilities.
If
ASC
480
does
not
require
liability
classification,
the
Company evaluates
the instrument
under ASC
815-40. The
Company considers
whether the
contract
(i)
is
indexed
to
the
Company’s
own
stock
and
(ii)
meets
the
equity
classification
criteria
in
ASC
815-40-25. These
criteria require,
among other
things, that
the Company
has sufficient
authorized
and
unissued
shares
available
for
settlement;
settlement
in
unregistered
shares
is
permitted;
the
contract
contains
a
fixed
or
explicitly
limited
number
of
shares
for
settlement;
there
are
no
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-22
requirements
for
net
cash
settlement
under
any
circumstances
outside
the
Company’s
control,
including failure to make
SEC filings; and there
are no cash-settled top-off,
penalty,
or make-whole
provisions.
Instruments
that
meet
both
the
indexation
and
equity
classification
conditions
are
classified in
equity.
Instruments that
do
not meet
these
criteria
are
classified as
liabilities and
are
remeasured
at
fair
value
through
earnings
at
each
reporting
date.
In
assessing
warrants
and
pre-funded warrants,
the Company
also analyzes
whether the
instruments meet
the definition
of a
derivative under
ASC 815
and whether
any embedded
features would
require bifurcation.
If derivative
accounting is not required and the criteria for equity classification are met, the warrant
is accounted
for
as
an
equity-classified instrument,
and
no
bifurcation of
embedded features
is
performed. For
warrants classified as liabilities, subsequent changes in fair value are
recognized in earnings.
aa)
Guarantees:
Guarantees issued by
the Company,
other than those
that guarantee the
Company’s
own
performance,
are
recognized
at
fair
value
at
the
time
the
guarantee
is
issued,
or
upon
the
deconsolidation of a subsidiary. The initial fair value
represents the obligation
undertaken to perform
under the guarantee.
After initial recognition,
the guarantee liability
is subsequently amortized
over
the
term
of
the
guarantee
or
until
it
is
extinguished. If,
at
any
time,
it
becomes
probable
that
the
Company will
be required
to perform
under a
guarantee and
the amount
of the
loss is
reasonably
estimable, the Company will record an additional liability,
recognized separately from the guarantee
liability. Certain guarantees are excluded from the initial
fair value recognition requirement,
including
a
parent’s
guarantee of
a
subsidiary’s
debt to
a third
party when
both entities
are under
common
control. For
such guarantees,
no liability
is recorded
and the
Company provides
disclosures
regarding
the nature and terms of the guarantee.
bb)
Derivative instruments:
Derivative instruments
are recognized on
the consolidated balance
sheets
as
either assets
or
liabilities measured
at
fair
value.
Changes in
the
fair
value
of
a
derivative are
recognized either in other comprehensive income (“OCI”),
to the extent the derivative
is designated
and qualifies
as a
hedging instrument,
or in
earnings if
hedge accounting
is not
applied. The
Company
has not
designated any
derivative instruments
as hedging
instruments under
ASC 815.
Derivative
assets and liabilities are not
offset unless the requirements
for offsetting under ASC 210-20
are met.
New Accounting Pronouncements
In November
2024, the
FASB
issued
ASU 2024-03, “Income
Statement
-
Reporting
Comprehensive
Income
-
Expense
Disaggregation
Disclosures
(Subtopic 220-40):
Disaggregation
of
Income
Statement
Expenses”.
The
standard
is
intended
to
require
more
detailed
disclosure
about
specified
categories
of
expenses (including employee compensation, depreciation,
and amortization) included in certain expense
captions presented on
the face
of the
income statement. This
ASU is effective
for fiscal
years beginning
after December
15,
2026, and
for
interim
periods
within
fiscal
years
beginning
after December
15,
2027. Early
adoption
is
permitted.
The
amendments may be
applied
either
prospectively
to
financial
statements issued
for reporting
periods after
the effective
date of
this ASU
or retrospectively
to all
prior
periods presented
in the
financial statements.
The Company
is currently
assessing the
impact this
standard
will have on its consolidated financial statements.
In
July
2025,
the
FASB
issued
ASU
No.
2025-05,
“Financial
Instruments—Credit
Losses
(Topic
326):
Measurement of Credit Losses
for Accounts Receivable
and Contract Assets”. The
ASU 2025-05 provides
a practical expedient
that all entities
may elect to
use when estimating
expected credit losses for
current
accounts receivable and current
contract assets arising from
transactions accounted for
under ASC 606,
Revenue from
Contracts with
Customers, by
allowing them
to
assume that
current conditions
as of
the
balance sheet date will not change for the remaining life of the asset. ASU 2025-05 is effective for annual
reporting periods beginning after
December 15, 2025, and
interim reporting periods within
those periods,
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-23
with early
adoption permitted.
The Company
is currently
evaluating the
impact that
the adoption
of ASU
2025-05 will have on its consolidated financial statements and related
disclosures.
In
December
2025,
the
FASB
issued
ASU
2025-11,
Interim
Reporting
(Topic
270):
Narrow-Scope
Improvements,
which
clarifies
the
navigability
and
applicability
of
interim
reporting
guidance
under
US
GAAP and
adds a
new disclosure
principle for
interim periods.
The amendments
are not
intended to
change
the
fundamental
nature
of
interim
reporting
or
expand
or
reduce
substantive
interim
disclosure
requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning
after December 15, 2027
for public business
entities and after December 15,
2028 for entities other
than
public business
entities, with
early adoption
permitted. The
Company is
currently evaluating
the impact
that
adopting this update may have on its consolidated financial statement
disclosures.
In
December
2025
the
FASB
issued
ASU
No.
2025-12
to
clarify,
correct errors
in
or
make
other
improvements to a broad range of topics
in the Accounting Standards Codification
(“ASC”), including ASC
260,
Earnings
Per
Share;
ASC
325,
Investments
—
Other;
and
ASC
958,
Not-for-Profit
Entities.
The
guidance is
effective for
all entities
for annual
reporting periods
beginning after
15 December
2026, and
interim periods within those annual periods. Early adoption is
permitted. Entities are required to apply the
amendments to ASC
260 retrospectively to
each prior reporting
period presented in
the period of
adoption.
Entities
can
apply
all
other
amendments
in
the
period
of
adoption
either
(1)
prospectively
to
all
new
transactions
recognized
on
or
after
the
date
that
the
entity
first
applies
the
amendments
or
(2)
retrospectively to
the
beginning of
the
earliest comparative
period presented,
with an
adjustment to
the
opening
balance
of
retained
earnings
(or
other
appropriate
components
of
equity
or
net
assets
in
the
statement of financial position) as of the beginning of the earliest comparative period presented. An entity
may elect
the transition
method on
an issue-by-issue
basis (except
for the
ASC 260
amendments). The
Company is currently
assessing the impact
this standard will
have on its
consolidated financial
statements.
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 CEO Mrs. Semiramis Paliou. Travel expenses for 2025, 2024
and
2023
amounted
to
$
2,654
,
$
2,569
and
$
2,525
,
respectively,
and
are
mainly
included
in
vessel
operating expenses in
the accompanying consolidated
financial statements. As
of December 31,
2025 and
2024, an
amount of
$
89
and $
190
, 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 2025,
2024
and 2023, brokerage fees amounted to $
3,912
, $
4,093
and $
3,900
, respectively, and
are included mainly
in general
and administrative
expenses in
the accompanying
consolidated statements
of income.
For 2025,
2024 and
2023, commissions related
to Steamship
amounted to
$
355
, $
544
and $
906
, respectively and
are mainly included
in gain on
the sale of
vessels in the
accompanying consolidated
statements of income.
As of December 31, 2025 and 2024, there was
no
amount due to Steamship.
c)
Bond issuance:
In 2024, officers and directors of the
Company and/or entities affiliated with them
purchased an aggregate
of $
47,300
principal amount of the
senior unsecured bond
issued on July 2,
2024
(Note 8).
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-24
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, 2025 and 2024, the investment in
DWM
amounted to
$
244
and
$
794
and
is
included
in
equity
method
investments
in
the
accompanying
consolidated balance sheets. In 2025, 2024 and 2023, the investment in DWM
resulted in a loss of $
550
,
a
gain
of
$
60
and
a
gain
of
$
228
,
respectively,
included in
loss
from
equity method
investments in
the
accompanying consolidated statements of income.
DWM
performs the
technical and
commercial management
of
five
vessels of
the
Company’s fleet
for
a
fixed monthly fee
separately presented as management
fees to a
related party and
a percentage of their
gross
revenues
included
in
voyage
expenses.
Management
fees
to
DWM
in
2025,
2024
and
2023
amounted to $
1,191
, $
1,332
and $
1,313
, respectively. Voyage expenses (commissions) incurred by
DWM
under
the
management
agreements
during
2025,
2024
and
2023,
amounted
to
$
314
,
$
368
and
$
390
,
respectively.
As of
December 31, 2025
and 2024, there
was an amount
of $
239
and $
3
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
established
as
a
wholly
owned
subsidiary of the Company, for the purpose of acquiring, owning,
and operating a vessel. On February
14,
2023, Bergen signed
a Memorandum of
Agreement to acquire from
an unrelated third-party
an Ultramax
dry bulk
vessel which
was 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
and
the
Company
provided a
corporate guarantee
to
secure Bergen’s
obligations under
the
loan
(Note 10).
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;
(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; (iv) a
commission agreement under which the Company is
paid a commission on the
outstanding
balance
of
the
loan,
as
compensation
for
the
guarantee
it
provided
to
Nordea
and
(v)
a
convertible
loan
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.
Following the
admission of
the new
investor,
the Company
evaluated its
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
retained
control
over
Bergen’s
board
of
directors.
Consequently,
the
Company deconsolidated
Bergen in
accordance with
ASC 610
and the
retained noncontrolling
interest was
accounted for under the equity method due to the Company’s significant influence
over Bergen.
On the date of
deconsolidation, the fair value of the
Company’s interest amounted to $
4,519
, determined
through Level 2 inputs of the
fair value hierarchy,
by taking into consideration the fair value
of the distinct
assets and
liabilities of
Bergen on
the date
of the
deconsolidation.
This resulted
in a
gain on
deconsolidation
amounting to
$
844
, separately
presented in
the accompanying
consolidated statement of
income, being
the difference
between the fair
value of the
retained noncontrolling interest
plus the carrying
value of the
liabilities assumed by Bergen and the carrying value of the assets derecognized.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-25
As of December 31, 2025 and 2024,
the Company’s equity investment in Bergen
amounted to $
4,227
and
$
5,012
, respectively, and is included in
equity method investment,
current and equity
method investments,
non-current, respectively,
in the accompanying consolidated balance
sheets. In 2025, 2024 and 2023, the
investment in
Bergen resulted
in a
loss of
$
765
, a
gain of
$
312
and a
gain of
$
181
, respectively
and is
included in loss from equity method investments
in the accompanying consolidated statements
of income.
Also, in 2025,
2024 and
2023, income
from management
fees from Bergen
amounted to $
15
, $
15
and $
10
,
respectively,
included
in
time
charter
revenues
and
income
from
the
commission
paid
on
the
loan
guarantee
amounted
to
$
52
,
$
40
and
$
28
,
included
in
interest
and
other
income
in
the
accompanying
consolidated statements
of income. As
of December 31,
2025 and 2024,
there was an
amount of $
158
and
$
246
, respectively, due from Bergen included in due from related parties, current and non-current.
On November 19, 2025, Bergen entered into an agreement with an unrelated third party to sell the vessel
for the sale price
of $
26,400
. As a result,
the Company reclassified
its equity method investment
from non-
current to current assets,
in the accompanying consolidated balance sheet. (Note 16).
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 committed to contribute
50
million Euro, representing
45.87
% of the limited partnership’s capital.
On May 5, 2025, a new partner was admitted to Windward and the Company received Euro
3.1
million as
return of capital, which reduced the
Company’s ownership percentage to
34
%. As of December 31,
2025
and 2024,
the Company’s investment
in Windward
amounted to
$
44,494
and $
36,631
, respectively, mainly
consisting
of
advances to
fund
the
construction of
four
vessels
and working
capital.
On
September 30,
2025, the
first vessel
was delivered
to its
owners. In
2025, 2024
and 2023,
the investment
in Windward
resulted
in
a
loss
of
$
62
,
$
518
and
$
671
,
respectively,
and
is
included
in
loss
from
equity
method
investments in the accompanying consolidated statements of income.
d)
Diana Mariners
Inc., or
Diana Mariners:
On September
12, 2023,
the Company
through its
wholly
owned subsidiary Cebu Shipping
Company Inc., or Cebu, acquired
24
% of Cohen Global Maritime Inc.,
or
Cohen,
a
company
organized
in
the
Republic
of
the
Philippines
for
the
purpose
of
providing
manning
agency services. In August 2024, Cohen was renamed Diana Mariners and acts as the manning
agent of
the Company’s vessels.
As of December
31, 2025 and
2024, the Company’s
investment in Diana
Mariners
amounted to
$
383
and $
389
, respectively
and there
was an
amount of
$
760
and $
100
, included
in due
from related parties, respectively. In 2025, 2024 and 2023, the investment in Diana Mariners resulted in a
loss
of
$
24
,
$
0
and
$
0
,
respectively
and
is
included
in
loss
from
equity
method
investments
in
the
consolidated statements of income. For 2025, 2024 and 2023,
manning fees to Diana Mariners amounted
to $
314
,
nil
and
nil
, respectively, and are included in operating
expenses in the consolidated
statements of
income.
As
of
December
31,
2025,
all
of
the
Company’s
ship-owning
subsidiaries
have
entered
into
manning agreements with Diana Mariners.
e)
Ecogas
Holding
AS,
or
Ecogas:
On
March
12,
2025,
the
Company,
through
a
wholly
owned
subsidiary
Diana
Gas
Inc.,
entered
into
a
joint
venture
agreement
with
an
unrelated
party
to
establish
Ecogas,
a company
formed under
the
laws
of Norway,
for
the
purpose of
building
two
7,500 cbm
LPG
vessels
with
delivery
in
2027
and
with
an
option
for
two
additional
vessels.
Under
the
terms
of
the
agreement, the Company and its strategic
partner hold equal voting rights
(
50
% each), and as a result the
Company does
not have
control over
Ecogas. Furthermore, the
Company agreed to
contribute $
18,464
,
representing an
80
% equity interest, for the
construction of the
two
vessels. As of December
31, 2025, the
investment
in
Ecogas
amounted
to
$
8,754
,
representing
part
of
its
equity
participation
to
fund
the
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-26
construction of
the vessels
and working
capital. In
2025, the
investment in
Ecogas resulted
in a
loss of
$
1,409
and is included in loss from equity method investments in
the consolidated statements of income.
5.
Investments in a related party and other
a)
OceanPal
Inc.,
or
OceanPal:
As
of
December 31,
2024,
the
Company held
500,000
shares of
Series B Preferred
Shares of OceanPal.
Series B Preferred
Shares entitled the
holder to
2,000
votes on
all
matters
submitted to
a
vote
of
stockholders, however,
the
voting
rights
were capped
at
34
% of
total
votes, and
the total
votes entitled
to
be cast
by the
holder,
including common
stock or
any other
voting
security, should not
exceed
49
% of the total number of votes. Series B Preferred Shares had no
dividend
or distribution rights.
On October 28,
2025, the Company
sold its
500,000
Series B Preferred
Shares for
cash
consideration of
$
3,005
.
The
sale
resulted
in
a
realized
gain, representing
the
excess of
the
sale
proceeds over the carrying
amount of the shares.
This gain is included
within gain/(loss) on related
party
investments
in
the
accompanying
consolidated
statements
of
income.
The
realized
gain
partially
offset
realized
losses
recognized
during
2025
from
the
dilution
of
the
Company’s
common
stock
holdings
in
OceanPal, described below.
As of December
31, 2025 and
2024, the Company
held
207
Series C Convertible
Preferred Shares.
Series
C
Preferred
Shares
do
not
have
voting
rights
except
with
respect
to
amendments
to
the
Articles
of
Incorporation that adversely affect the
preferences, powers, or rights of the
Series C Preferred Shares or
relate to
the issuance
of Parity
Stock or
the creation
or issuance
of Senior
Stock. Series
C Preferred
Shares
have a liquidation preference equal to the stated value of $
1,000
and are convertible into common shares
at the
Company’s option
commencing upon the
first anniversary
of the
issue date,
at a
conversion price
equal to the lesser of $
6.50
and the
10
-trading-day trailing VWAP of OceanPal’s common shares, subject
to adjustment. Dividends are cumulative and accrue at the rate of
8
% per annum and are payable in cash
or,
at OceanPal’s
option, in
kind. As
of December
31, 2025
and 2024,
the Company’s
investment in
the
Series C preferred shares, amounted to $
180
and $
180
, respectively, included in investments in a related
party,
current
and
investments
in
a
related
party,
non-current,
respectively,
in
the
accompanying
consolidated balance sheets.
On October
17, 2023,
the Company
converted
9,793
of its
10,000
Series C
Preferred Shares
into
3,649,474
common shares,
having a
fair value
of $
9,160
based on
Level 1
inputs of
the fair
value hierarchy,
using
the closing price
of OceanPal’s common
shares on the
conversion date. Upon conversion,
the Company
recognized a gain
of $
1,742
, representing the
excess of the
fair value of
the common shares
received over
the carrying amount of
the Series C Preferred
Shares derecognized. This gain
is included in gain/(loss)
on
related
party
investments
in
the
accompanying
consolidated
statements
of
income.
Following
the
conversion, the Company became the beneficial owner of
49
% of OceanPal’s outstanding common stock
and, as
the shares
are listed
on NASDAQ,
the Company
elected to
account for
its ownership
interest in
OceanPal at fair value.
As of
December 31,
2024, the
Company held
3,649,474
shares of
OceanPal’s common
stock. During
2025,
OceanPal completed a series of common
stock issuances and effected a reverse stock
split, resulting in a
significant dilution
of the
Company’s ownership
interest to
145,978
common shares
as of
December 31,
2025,
resulting
in
a
loss
of
$
4,077
included
in
gain/(loss)
on
related
party
investments,
in
the
2025
consolidated statement
of
income.
As a
result
of this
dilution,
the
Company concluded
that it
no longer
exercises
significant
influence
over
OceanPal,
and
therefore
the
investment
no
longer
qualifies
for
the
equity method under
ASC 323. The
discontinuation of the equity
method did not
affect the measurement
of the
investment, as
the Company
had previously
elected the
fair value
option for
its holdings
in OceanPal.
Accordingly, the
investment continues to be carried
at fair value, with
changes in fair value
recognized in
earnings.
As
of
December
31,
2025
and
2024,
the
Company’s
investment
in
the
common
stock
of
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-27
OceanPal amounted to $
158
and $
4,235
, respectively,
included in investments in a
related party,
current
and investments in a related party, non-current,
respectively.
In
2025,
2024 and
2023, changes
in
the
fair
value
of
the
Company’s
investment in
OceanPal common
shares and
preferred shares resulted
in losses
of $
1,072
, $
3,905
and $
1,022
, respectively,
presented in
gain/(loss) on related party investments, in the consolidated
statements of income.
In
2023,
the
Company
distributed
13,157
Series
D
Preferred
Shares
as
non-cash
dividends
to
its
shareholders
(Note
11).
The
Series
D
Preferred
Shares
were
offered
to
shareholders
as
non-cash
consideration
for
the
sale
of
Melia
to
OceanPal.
The
Company
accounted
for
the
transaction
as
a
nonreciprocal transfer with its owners in accordance with ASC 845 and measured the preferred shares at
their fair value on
the date of declaration
at $
10,761
and recorded a gain
of $
761
included in gain/(loss) on
related party investments
in the related accompanying
consolidated statement of income.
The fair value of
the Series D Preferred Shares was determined
using the income approach, based on
the present value of
the future cash flows expected to be received by the holder of the equity instrument.
In
2025,
2024
and
2023,
dividend
income
from
the
Series
C
and
Series
D
OceanPal
preferred
shares
amounted to $
17
, $
17
and $
801
, respectively,
included in interest and other income in the accompanying
consolidated statements of income.
b)
Investment
in
equity
securities:
In
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 at
year-end at fair
value, determined
through
Level 1
of the
fair value
hierarchy. The securities
were considered
marketable securities
that were
available
to
be
converted
into
cash
to
fund
current
operations
and
were
classified
in
current
assets
in
the
accompanying consolidated
balance sheet.
The Company
sold all
securities during
the first
quarter of
2024
and in
2024 and
2023, recorded
a realized
loss of
$
400
and an
unrealized gain
of $
2,813
, respectively,
presented in gain/(loss) on equity securities in the accompanying
consolidated statements of income.
In 2025, the
Company acquired equity securities of
Genco Shipping & Trading
Limited (Genco) which as
of December 31, 2025,
had a fair value
of $
118,194
. As of December 31,
2025, the Company is
the holder
of
6,413,151
common shares, being
14.8
% of Genco’s common stock.
The equity securities were initially
recorded at cost
amounting to $
103,524
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
consolidated balance
sheet as
of December
31, 2025.
Unrealized
gain
on
the
investment
amounted
to
$
14,671
and
is
separately
presented
in
gain/(loss)
on
equity securities in the accompanying consolidated statements
of income.
In 2025, dividend income from the Investment in equity securities amounted to $
1,670
included in interest
and other income in the accompanying consolidated statements of income.
On
November
24,
2025,
we
submitted
to
Genco’s
board
of
directors
a
proposal
to
acquire
all
of
the
outstanding shares of Genco we did not already own for a price of
$
20.60
per share in cash (Note 16).
6.
Advances for vessels under construction and Vessels, net
It is in
the Company’s normal
course of business
from time to
time to acquire
and sell vessels.
Accordingly,
in 2025 and 2024, the Company entered into the below transactions.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-28
Vessels under construction
On
February
8,
2024,
the
Company
signed
an
agreement
with
an
unaffiliated
third
party,
for
the
construction of
two
81,200 dwt methanol dual
fuel new-building Kamsarmax dry
bulk vessels, 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.
As
of
December
31,
2025
and
2024,
advances for vessels under
construction amounted to $
20,877
and $
19,558
, respectively, of which $
2,446
and
$
1,146
was
capitalized
interest.
In
2025
and
2024,
an
amount
of
$
1,319
and
$
1,158
,
including
capitalized interest of $
1,299
and $
1,146
, respectively, was capitalized.
Vessel Disposals
In 2024, the Company sold to unrelated third parties the vessels
Artemis
and
Houston
and recognized an
aggregate gain on sale of $
5,799
.
In 2025, the
Company sold to unrelated
third parties the
vessels
Alcmene
and
Selina
and recognized an
aggregate gain on sale of $
3,663
.
The
amount
reflected
in Vessels,
net
in
the
accompanying consolidated
balance sheets
is analyzed
as
follows:
Vessel Cost
Accumulated
Depreciation
Net Book
Value
Balance, December 31, 2023
$
1,114,247
$
(214,055)
$
900,192
- Additions for vessel improvements
958
-
958
- Vessel disposals
(46,001)
16,849
(29,152)
- Depreciation for the year
-
(38,586)
(38,586)
Balance, December 31, 2024
$
1,069,204
$
(235,792)
$
833,412
- Additions for vessel improvements
183
-
183
- Vessel disposals
(23,875)
6,201
(17,674)
- Depreciation for the year
-
(37,983)
(37,983)
Balance, December 31, 2025
$
1,045,512
$
(267,574)
$
777,938
7.
Property and Equipment, net
The Company
owns the
land and
building of
its principal
corporate offices
in Athens,
Greece and
three
plots
of
land
acquired
for
corporate
purposes.
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:
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-29
Property and
Equipment
Accumulated
Depreciation
Net Book
Value
Balance, December 31, 2023
$
30,942
$
(6,660)
$
24,282
- Additions in property and equipment
3,718
-
3,718
- Depreciation for the year
-
(825)
(825)
Balance, December 31, 2024
$
34,660
$
(7,485)
$
27,175
- Additions in property and equipment
1,671
-
1,671
- Depreciation for the year
-
(998)
(998)
Balance, December 31, 2025
$
36,331
$
(8,483)
$
27,848
8.
Long-term debt
The
amount of
long-term debt
shown in
the
accompanying consolidated
balance sheets
is
analyzed as
follows:
December 31, 2025
December 31, 2024
Senior unsecured bond
175,000
175,000
Secured long-term debt
354,189
347,590
Total long-term
debt
$
529,189
$
522,590
Less: Deferred financing costs
(6,380)
(7,973)
Long-term debt, net of deferred financing costs
$
522,809
$
514,617
Less: Current long-term debt, net of deferred financing
costs,
current
(50,281)
(45,230)
Long-term debt, excluding current maturities
$
472,528
$
469,387
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-30
8.375% Senior Unsecured Bond:
On
June 22, 2021
, the
Company issued a
$
125,000
senior unsecured bond
maturing in
June 2026. The
bond ranked
ahead of
subordinated capital
and ranked
the same
with all
other senior
unsecured obligations
of
the
Company
other
than
obligations
which
were
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.
On June 29, 2023,
the Company repurchased $
5,900
nominal value of the bond
for $
5,851
resulting in a
loss on debt extinguishment
of $
159
, representing the
difference between the
reacquisition price of
$
5,851
and the
net carrying
amount of
the debt
extinguished of
$
5,900
less deferred
financing fees
of $
208
. In
June 2024, the bond
became callable, and on July
2, 2024, the Company prepaid the
remaining balance
at
103.35
% of par,
using proceeds from the new bond
described below. The
Company accounted for the
transaction
partly
as
a
debt
modification
and
partly
as
debt
extinguishment.
The
portion refinanced
by
existing
investors
amounting
to
$
57,850
was
treated
as
modification
and
the
remaining
$
61,250
was
accounted for as debt extinguishment. An amount of
$
5,336
consisting of the costs paid to
investors who
participated in the refinancing
and unamortized deferred
fees were deferred
over the term of
the new bond
and an amount of
$
3,475
was recorded as loss on
debt extinguishment. The bond included
financial and
other covenants and was trading on the Oslo Stock Exchange under
the ticker symbol “DIASH02”.
8.75% Senior Unsecured Bond
:
In 2024,
the Company
issued a
$
175,000
senior unsecured
bond maturing in
July 2029
bearing a
fixed-
rate coupon of
8.75
% payable semi-annually in
arrears in January and
July of each
year. Proceeds
from
the bond
were used
to prepay
the balance
of the
then outstanding
bond and
for general
working capital
purposes.
The bond
is
callable in
whole or
in
part in
July 2027
at
a price
equal to
103.50
%
of nominal
value;
in January
2028 at
a price
equal to
102.625
%
of
nominal value;
in
July 2028
at
a price
equal to
101.75
% and after January 2029 at
a price equal to
100.00
% of nominal value. 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. The bond includes financial and other covenants
and is trading on the Oslo Stock Exchange under the ticker symbol
“DIASH03”.
Secured Term Loans:
Under the
secured term
loans outstanding
as of
December 31,
2025,
31
vessels of
the Company’s
fleet
are
mortgaged
with
first
preferred
or
priority
ship
mortgages,
having
an
aggregate
carrying
value
of
$
621,566
.
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,
2025 and 2024 minimum
cash deposits required to
be maintained at all
times under
the Company’s
loan facilities,
amounted to
$
18,000
and $
19,000
, respectively
and are
included in
restricted
cash, non-current in
the accompanying consolidated
balance sheets. Furthermore,
the secured term
loans
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-31
contain
cross
default
provisions
and
additionally
the
Company
is
not
permitted
to
pay
any
dividends
following the occurrence
of an event
of default. All
of the Company’s
secured term loans
bear interest at
SOFR plus a margin. In 2025 and 2024, the weighted
average interest rate of the secured term
loans was
6.1
% and
7.3
%, respectively.
As of December 31, 2025,
the Company had the following
agreements with banks, either as
a borrower or
as a guarantor, to guarantee the loans of its subsidiaries:
Nordea Bank
AB, London
Branch (“Nordea”):
On September
30, 2022,
the
Company entered
into a
$
200
million loan
agreement to
finance the
acquisition of
9
Ultramax vessels.
The Company
drew down
$
197,236
under the loan,
in tranches for
each vessel on
their delivery to
the Company and
in December
2022 prepaid
$
21,937
due to
a vessel
sale and
leaseback transaction. The
loan was
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
.
On June 27, 2023, the Company drew down $
22,500
under a secured loan agreement and prepaid in full
the
outstanding
balance
of
an
existing
loan
amounting
to
$
20,934
and
recorded
a
loss
on
debt
extinguishment amounting to $
220
. The loan, maturing
on
June 27, 2028
was repayable in equal
quarterly
instalments of $
1,125
.
On July
25, 2024,
the Company
entered into
and drew
a $
167,263
loan agreement,
to refinance
the balance
of the then outstanding
loans. The loan is
repayable in equal
quarterly instalments of
$
4,454
and a balloon
instalment of $
64,827
payable on
July 25, 2030
.
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
.
DNB Bank
ASA or DNB:
On June
26, 2023, the
Company entered into
a $
100,000
sustainability linked
loan agreement which was drawn on June 27, 2023, to refinance the outstanding balance of another loan
and
for
working
capital
purposes.
The
loan
is
repayable
in
equal
quarterly
instalments
of
$
3,846
until
December 27, 2029
. The loan is subject to a margin reset
and unless the parties agree on a new margin,
the loan will
be mandatorily repayable
on June 27,
2027. On
July 6, 2023,
the Company entered
into an
interest rate swap with DNB for a notional amount for the
30
% of the loan amount. Under the interest rate
swap, the Company pays
a fixed rate and
receives floating under term
SOFR.
The swap has a
termination
date on December 27,
2029, and a mandatory
break on June 27,
2027, according to which the
swap will
be terminated if the loan is prepaid. As of December 31,
2025 and 2024, the fair value of the interest rate
swap was $
361
and $
165
, respectively,
and is separately presented in
current and non-current liabilities.
In
2025,
2024
and
2023,
the
Company
recognized
a
loss
of
$
196
,
a
gain
of
$
274
and
a
loss
of
$
439
,
respectively, from
the swap valuation separately presented as gain/(loss) on derivative instruments in the
accompanying consolidated statements
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
loans with
other banks
and for
working
capital.
On
April
18
and
19,
2023,
the
Company
drew
down
$
100,000
which
was
repayable
in
equal
quarterly
instalments of $
3,301
each and a balloon of $
33,972
payable together with the last instalment on
April 19,
2028. On
October 18,
2024, the
Company refinanced
the outstanding
balance of
this loan
with a
loan which
is repayable in equal quarterly instalments of $
2,533
each and a balloon of $
14,323
payable together with
the last instalment on
April 18, 2031
.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-32
National Bank of
Greece S.A. (“NBG”):
On September 29,
2025, the Company entered
into a $
55,000
loan agreement.
The loan
proceeds were
drawn on
the same
date and
deposited in
a pledged
account
with
the
bank
to
reduce
the
margin.
As
of
December
31,
2025,
the
amount
of
$
53,750
is
presented
separately as
restricted cash,
current in
the accompanying
consolidated balance
sheet. The
Company may
withdraw any part or
all of the funds
from the pledged account
at the end of
the loan’s fixed interest
period,
provided no event of default has
occurred. The loan is repayable in equal quarterly
instalments of $
1,250
and a balloon instalment of $
25,000
payable on
September 29, 2031
.
As of December 31, 2025 and 2024, the Company was in compliance with
all of its loan covenants.
As of December 31, 2025, the maturities of
the Company’s bond and debt facilities throughout their term,
are shown in the table below and do not include related debt issuance
costs.
Period
Principal Repayment
Year 1
$
52,149
Year 2
52,149
Year 3
52,149
Year 4
227,149
Year 5
92,684
Year 6 and
thereafter
52,909
Total
$
529,189
9.
Finance Liabilities
On March 29, 2022, the Company
sold
Florida
to an unrelated third party
and leased back the vessel
from
the buyer for
a period of
ten years
, under which
the Company pays
a fixed monthly
hire. The Company
has
the option to
repurchase the vessel
at specific prices, after
the end of
the third year
of the charter period
and for
each year
thereafter,
and the
obligation to
purchase the
vessel 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
third parties for
New Orleans
and
Santa Barbara
. 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,
under which
the Company
pays a
fixed monthly
hire. Under
the bareboat charter, the
Company has the
option to repurchase
the vessel at
specific prices, after
the end
of the
third year
of the
charter period
and for
each year
thereafter, and the
obligation to
purchase the
vessel
on the expiration of the lease on the eighth year.
On December 6, 2022, the Company
sold
DSI Andromeda
to an unrelated third party and leased
back the
vessel
under
a
bareboat agreement,
for
a
period
of
ten years
,
under
which
the
Company
pays
a
fixed
monthly hire. The Company has the option to repurchase the
vessel at specific prices, after the end of the
third year of the charter period
and for each year thereafter,
and the obligation to purchase the vessel
on
the expiration of the lease on the tenth year.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-33
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, 2025
and
2024, finance
liability
amounted to
$
10,041
and
$
9,608
,
respectively,
included in
finance
liabilities,
current and $
103,259
and $
113,300
respectively included in finance liabilities, net of
current portion. As of
December 31, 2025, the
weighted average remaining lease
term of the above lease
agreements was
5.71
years, the
average interest rate
was
4.83
% and the
sublease income for
the years ended
December 31,
2025, 2024 and 2023 was
$
29,073
, $
28,814
and $
34,560
, respectively, included in time charter revenues.
As of
December 31,
2025, and
throughout
the term
of the
leases,
the Company
has annual
finance liabilities
as shown in the table below:
Period
Principal Repayment
Year 1
$
10,224
Year 2
10,661
Year 3
11,151
Year 4
11,604
Year 5
36,170
Year 6 and
thereafter
34,282
Total
$
114,092
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.
b)
Pursuant to the sale and lease
back agreements signed between the Company
and its counterparties,
the
Company
has
purchase
obligations
amounting
to
$
50,400
,
at
the
end
of
the
lease
agreements
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,
2025,
the
Company
did
not
record
a
provision for
losses
under
the
guarantee
of
Bergen’s
loan
amounting to
$
12,288
on that date (Notes 4 and 16).
d)
As of December 31, 2025, the Company’s remaining commitments to its joint ventures
consist of EUR
10.7
million to Windward and $
8,220
to Ecogas.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-34
e)
As of December 31,
2025, the Company had
total obligations under shipbuilding
contracts (Note 6), as
follows:
Period
Amount
Year 1
$
9,200
Year 2
36,800
Year 3
27,600
Total
$
73,600
f)
As
of
December
31,
2025,
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, 2025 and until their expiration was as follows:
Period
Amount
Year 1
$
142,842
Year 2
7,931
Total
$
150,773
11.
Capital Stock and Changes in Capital Accounts
a)
Preferred stock
:
As of December 31, 2025, and 2024, the
Company’s authorized preferred stock
consists of
50,000,000
shares (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,
2025 and
2024, the
Company had
zero
Series A Participating Preferred Shares issued and outstanding.
b)
Series
B
Preferred
Stock:
As
of
December
31,
2025,
and
2024,
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 a dividend rate of
8.875
% per annum,
or
$
2.21875
per
share
per
annum.
For
each
of
the
years
ended
December
31,
2025,
2024
and
2023,
dividends on Series B
Preferred Shares amounted
to $
5,769
. 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,
2025,
and
2024,
the
Company
had
10,675
shares of Series C Preferred Stock, issued and outstanding, with par value $
0.01
per share, owned by an
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-35
affiliate of its Chief
Executive Officer, Ms.
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, 2025, and 2024, 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,
Ms. 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 2023, the Company issued
2,033,613
shares
of
common
stock,
at
$
3.84
,
for
the
acquisition
of
one
vessel,
upon
exercise of
a
warrant
issued
to
the
vessel’s sellers. The
Company did
no
t receive any
proceeds from
the exercise
of the warrants
in 2023,
and
the
value
of
the
shares
issued
was
included
in
vessels,
net.
On
December
2,
2024,
the
Company
commenced a tender
offer to purchase up
to
15,000,000
shares of its outstanding
common stock, at $
2.00
per share,
using funds available
from cash and
cash equivalents.
On January 7,
2025, the tender
offer was
settled and
the Company
repurchased and
retired a
total of
11,442,645
shares of
common stock
for an
aggregate amount of $
23,048
.
f)
Dividend
on
Common Stock:
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.
On March
12, 2024,
the Company
paid a
cash dividend
on its
common stock
of $
0.075
per share,
or $
8,989
to shareholders of record
as of March 5,
2024. On June 18,
2024, the Company paid a
cash dividend on
its common
stock of
$
0.075
per share,
or $
9,379
, to shareholders
of record
as of June
12, 2024.
On August
30,
2024,
the
Company
paid
a
cash
dividend
on
its
common
stock
of
$
0.075
per
share,
or
$
9,384
,
to
shareholders of record as of
August 15, 2024. On
December 18, 2024, the
Company paid a cash
dividend
on its common stock of $
0.01
per share, or $
1,252
, to shareholders of record as of December 11, 2024.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-36
On March 21,
2025, the
Company paid a
cash dividend
on its common
stock of
$
0.01
per share,
or $
1,158
,
to all shareholders of record as of March 12, 2025. On June 24, 2025, the Company paid a cash dividend
on its common stock of $
0.01
per share, or $
1,158
, to all shareholders of record
as of June 17, 2025. On
September 11, 2025
the Company
paid a
cash dividend
on its
common stock
of $
0.01
per share,
or $
1,157
,
to shareholders
of record
as of
August 21,
2025. On
December 17,
2025 the
Company paid
a cash
dividend
on its common stock of $
0.01
per share, or $
1,157
, to shareholders of record as of December 8, 2025.
g)
Dividend in
Kind:
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.
h)
Warrants:
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
entitles the holder
to purchase, at
the holder’s sole and
exclusive election,
at the
exercise price
of $
4
per warrant,
1.67484
shares of
common stock
including a
bonus share
fraction. A
bonus share
fraction entitles
a holder
to receive
an additional
part of
a share
of
common stock for each warrant exercised without payment of any
additional exercise price.
In 2025 and
2024, the Company
issued
26,674
and
9,837,680
shares, respectively, having a
value of $
35
and $
28,047
, net
of expenses,
or $
1.30
and $
2.86
per share,
respectively. In 2025 and
2024, the
Company
received $
93
and $
24,195
, in proceeds, net of fees
from the exercise of
16,181
and
6,392,765
warrants,
respectively.
If all
warrants were
exercised as
of December
31, 2025,
the Company
would have
issued
37,003,669
shares of common stock, including the shares from the warrants already exercised, with
a fair
value of
$
73,133
and would have
received $
90,452
of gross
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.
As of
December 31,
2025 and
2024, the
warrant liability, measured
at fair
value, amounted
to $
1,330
and $
1,802
,
respectively. In 2025, 2024 and
2023, Gain on
warrants amounted
to $
490
, $
719
and $
1,583
, respectively,
separately presented in the accompanying consolidated statements
of income.
i)
Incentive
Plan:
As
of
December
31,
2025,
9,144,759
shares
remained
reserved
for
issuance
according to the Company’s incentive plan.
Restricted stock as of December 31, 2025, 2024 and 2023 is analyzed
as follows:
Number of Shares
Weighted Average
Grant Date Price
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
Granted
2,300,000
2.96
Vested
(2,996,334)
3.38
Outstanding as of December 31, 2024
6,097,502
$
3.30
Granted
2,000,000
1.84
Vested
(3,134,365)
3.37
Outstanding as of December 31, 2025
4,963,137
$
2.67
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-37
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
accompanying
consolidated
statements
of
income
over
the
respective
vesting
periods.
In
2025,
2024
and
2023,
compensation
cost
amounted
to
$
9,605
, $
10,012
and $
9,938
, respectively,
and is included
in general and
administrative expenses in
the
accompanying consolidated statements of income.
As of December 31, 2025 and December 31,
2024, the total unrecognized cost relating
to restricted share
awards was
$
5,749
and $
11,674
, respectively.
As of
December 31,
2025, the
weighted-average period
over which the total compensation cost related
to non-vested awards not yet recognized is
expected to be
recognized is
1.45
years.
12.
Interest expense and Finance costs
The amounts in the accompanying consolidated statements of income
are analyzed as follows:
2025
2024
2023
Interest expense, debt
$
34,750
$
38,385
$
39,617
Finance liabilities interest expense
5,867
6,353
6,786
Amortization of debt and finance liabilities issuance costs
2,139
2,372
2,620
Loan and other expenses
195
358
308
Interest expense and finance costs
$
42,951
$
47,468
$
49,331
13.
Earnings/(loss) 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 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 2025, 2024 and 2023, there
were
38,544
,
2,698,994
and
1,710,513
included in the denominator of the
diluted earnings
per share calculation.
Securities that could
potentially dilute basic
earnings per share
in
the future but were not included in the computation of diluted earnings per
share—because their inclusion
would have been anti-dilutive—consist
of any incremental shares
from unexercised warrants
that were out
of
the
money
during
the
reporting
period
and
any
incremental
shares
resulting
from
the
non-vested
restricted share awards.
Net income attributable to common stockholders is adjusted
by the dividends on Series B Preferred Stock
and the gain on warrants with dilutive effect to calculate the diluted earnings
per share.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-38
Basic Earnings / (Loss) per Share
2025
2024
2023
Net income
$
17,827
$
12,746
$
49,844
Dividends on series B preferred shares
(5,769)
(5,769)
(5,769)
Net income attributable to common stockholders
$
12,058
$
6,977
$
44,075
Weighted average number of common shares, basic
110,459,096
115,956,249
100,166,629
Earnings per common share, basic
$
0.11
$
0.06
$
0.44
Diluted Earnings / (Loss) per Share
2025
2024
2023
Net income
$
17,827
$
12,746
$
49,844
Dividends on series B preferred shares
(5,769)
(5,769)
(5,769)
Adjustments for fair value gain on warrants
-
(719)
(1,583)
Adjusted net income attributable to common
stockholders
$
12,058
$
6,258
$
42,492
Weighted average number of common shares, basic
110,459,096
115,956,249
100,166,629
Incremental shares from dilutive instruments
38,544
2,698,994
1,710,513
Weighted average number of common shares,
diluted
110,497,640
118,655,243
101,877,142
Earnings per common share, diluted
$
0.11
$
0.05
$
0.42
14.
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 income.
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 2025,
2024 and
2023 taxable years,
and the
Company takes this
position for
United States federal
income tax
return reporting purposes.
15.
Financial Instruments and Fair Value Disclosures
Interest rate risk and concentration of credit risk
Financial instruments that potentially
subject the Company
to concentrations of credit
risk consist primarily
of cash and cash equivalents, time deposits and accounts
receivable, trade arising from operating leases.
(Note 2).
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 Company’s credit
risk with financial institutions is limited as it
has
temporary
cash
investments,
consisting
mostly
of
deposits,
placed
with
various
qualified
financial
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-39
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
2025,
2024 and
2023 charterers
that
individually accounted
for
10
% or
more
of
the
Company’s time
charter revenues were as follows:
Charterer
2025
2024
2023
Cargill International SA
14%
*
13%
Nippon Yusen Kaisha
15%
11%
*
*Less than 10%
The Company is exposed to interest rate risk on its borrowings with variable interest rates. This exposure
is partly mitigated
through fixed-rate indebtedness
including the Company’s bond
(Note 8), an interest
rate
swap with DNB (Note 8) and finance liabilities that bear fixed rates (Note
9).
Fair value of assets and liabilities
The
carrying
values
of
financial
assets
reflected
in
the
accompanying
consolidated
balance
sheet
approximate their fair values due to the short-term nature and high liquidity of these financial instruments.
Cash
and
cash
equivalents
and
restricted
cash are
classified
as
Level 1 instruments as
they
represent
liquid assets with short-term maturities. The fair
value of long-term bank loans with
variable interest rates
approximates
the
recorded
values,
as
their
interest
rates
adjust
to
market-observable
rates.
These
instruments
are
classified
within
Level
2
of
the
fair
value
hierarchy.
As
of
December
31,
2025,
the
Company’s lease liabilities had a carrying value of $
114,092
(Note 9) and a fair value of $
109,939
.
Fair value measurements disclosed
As of December 31,
2025, the Bond
which bears a
fixed interest rate
and had a
carrying value of
$
175,000
(Note 8), had a fair value of $
180,906
determined using Level 1 inputs of the fair value hierarchy.
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-40
Other Fair value measurements
December 31,
2024
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 a related party
4,415
4,235
-
180
Total
recurring fair value measurements
$
4,415
$
4,235
$
-
$
180
Liabilities
Recurring fair value measurements
Warrant liability
$
1,802
$
1,802
$
-
Interest rate swap, liability
165
-
165
Total
recurring fair value measurements
$
1,967
$
1,802
$
165
December 31,
2025
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
118,194
118,194
-
-
Investments in related party
$
338
$
158
$
-
$
180
Total
recurring fair value measurements
$
118,532
$
118,352
$
-
$
180
Liabilities
Recurring fair value measurements
Warrant liability
$
1,330
$
1,330
$
-
Interest rate swap, liability
361
-
361
Total
recurring fair value measurements
$
1,691
$
1,330
$
361
16.
Subsequent Events
a)
Series B Preferred Stock Dividends
: On January 15, 2026, 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 14, 2026.
b)
Sale
of
DSI
Drammen and
return
of
capital
:
Following
the
sale
of
the
vessel
DSI
Drammen
by
Bergen and its delivery to its new owners, Bergen
distributed $
3,675
to the Company on January 29,
2026, as return of capital,
which reduced the carrying amount of the equity method investment
(Note
4).
Upon
completion
of
the
vessel
sale
and
the
full
repayment
of
Bergen’s
loan
with
Nordea,
the
Company’s
corporate
guarantee
provided
to
Nordea
for
Bergen’s
obligations
under
the
loan
was
released (Note 10).
c)
Restricted share
awards:
On February
25, 2026, the
Company’s Board of
Directors approved the
award of
7,750,000
shares of restricted common stock to executive management and non-executive
directors, pursuant to
the Company’s amended plan,
as annual bonus.
The fair value of
the restricted
shares based on the closing
price on the date of
the Board of Directors’ approval
was $
20,073
. The
DIANA SHIPPING INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025
(Expressed in thousands of U.S. Dollars – except share, per share
data, unless otherwise stated)
F-41
cost of these awards
will be recognized
ratably over the restricted
shares vesting period which
will be
3
and
6
years for
1,850,000
and
5,900,000
shares, respectively.
d)
Common
Stock
Dividend:
On
February 26,
2026,
the
Company
declared
a
cash
dividend
on
its
common stock
of $
0.01
per
share, based
on the
Company’s results
of operations
during the
three
months ended December
31, 2025. The cash
dividend is payable
on or around March
18, 2026, to
all
shareholders of record as of March 11,
2026.
e)
Genco
Shipping
and
Trading
Limited:
On
January
16,
2026,
following
Genco’s
rejection
of
the
Company’s
proposal,
the
Company
announced
the
intention
to
nominate
a
slate
of
independent
director candidates for election on the Genco board. On March 6, 2026, the
Company increased the
offer to $
23.50
per share in cash.
This acquisition proposal would be
financed by a $
1,433,000
fully
committed facility
arranged by
DNB Carnegie
and Nordea,
and with
participation of
other international
banks.
Also
on
March
6,
2026,
the
Company
entered
into
a
definitive
agreement
with
Star
Bulk
Carriers Corp., or Star Bulk,
to acquire
16
vessels of Genco for $
470,500
in cash upon, and subject
to, the consummation of an acquisition of Genco by the Company.

What is the market capitalization of a company?

The market capitalization sometimes referred as Marketcap, is the value of a publicly listed company.
In most cases it can be easily calculated by multiplying the share price with the amount of outstanding shares.

DISCLAIMER

CompaniesMarketCap is not associated in any way with CoinMarketCap.com
Stock prices are delayed, the delay can range from a few minutes to several hours.
Company logos are from the CompaniesLogo.com logo database and belong to their respective copyright holders. Companies Marketcap displays them for editorial purposes only.

Contact

For inquiries or if you want to report a problem write to hello@8marketcap.com

Links

- Privacy policy

- Terms and conditions

© 2025 CompaniesMarketcap.com