Diana Shipping - 20-F annual report 2024

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, 2024

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, 2024, there were

125,203,405

shares of the registrant’s

common stock outstanding

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

as defined in Rule 405 of the Securities Act.

☐

Yes

☑

No

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

is not required to file reports pursuant to Section 13

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

☐

Yes

☑

No

Note – Checking the box above will not relieve any registrant

required to file reports pursuant to Section 13 or

15(d) of the Securities

Exchange Act of 1934 from their obligations under those Sections.

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

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

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

to file such reports), and (2) has

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

☑

Yes

☐

No

Indicate by check mark whether the registrant has submitted electronically

every Interactive Data File required to

be submitted pursuant to

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

was

required to submit such files).

☑

Yes

☐

No

Indicate by check mark whether the registrant is a large accelerated

filer, an accelerated filer,

a non-accelerated filer,

or an emerging

growth company.

See definition of “large accelerated filer”,

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

Exchange Act.

Large accelerated filer

☐

Accelerated filer

☑

Non-accelerated filer

☐

Emerging growth company

☐

If an emerging growth company that prepares its financial statements

in accordance with U.S. GAAP,

indicate by check mark if the

registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards†

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

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

to any update issued by the Financial Accounting Standards

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

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

to its management’s assessment of the

effectiveness of its internal control

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

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

☑

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

by check mark whether the financial statements of the

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

previously issued financial statements.

☐

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

that required a recovery analysis of incentive-

based compensation received by any of the registrant’s

executive officers during the relevant recovery

period pursuant to §240.10D-

1(b).

☐

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

prepare the financial statements included in this

filing:

U.S. GAAP

☑

International Financial Reporting Standards as issued

Other

☐

by the International Accounting Standards Board □

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

item the registrant has

elected to follow.

☐

Item 17

☐

Item 18

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

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

☐

Yes

☑

No

(APPLICABLE ONLY TO

ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PAST FIVE YEARS)

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

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

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

☐

Yes

☐

No

4

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

5

PART I

Item 1.

Identity of Directors, Senior Management and Advisers

7

Item 2.

Offer Statistics and Expected Timetable

7

Item 3.

Key Information

7

Item 4.

Information on the Company

42

Item 4A.

Unresolved Staff Comments

68

Item 5.

Operating and Financial Review and Prospects

69

Item 6.

Directors, Senior Management and Employees

85

Item 7.

Major Shareholders and Related Party Transactions

93

Item 8.

Financial Information

98

Item 9.

The Offer and Listing

99

Item 10.

Additional Information

100

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

109

Item 12.

Description of Securities Other than Equity Securities

110

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

111

Item 14.

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

111

Item 15.

Controls and Procedures

111

Item 16A.

Audit Committee Financial Expert

112

Item 16B.

Code of Ethics

112

Item 16C.

Principal Accountant Fees and Services

112

Item 16D.

Exemptions from the Listing Standards for Audit Committees

113

Item 16E.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

113

Item 16F.

Change in Registrant’s Certifying Accountant

113

Item 16G.

Corporate Governance

114

Item 16H.

Mine Safety Disclosure

115

Item 16I.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

115

Item 16J.

Insider Trading Policies

115

116

119

119

119

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.

●

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

profits.

●

We are

subject to

complex laws

and regulations, including

environmental regulations that

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

8

●

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.

●

Increasing

scrutiny

and

changing

expectations

from

investors,

lenders

and

other

market

participants with respect to our ESG policies may impose additional costs on us or expose

us to additional risks.

●

Our

earnings may

be adversely

affected if

we are

not able

to take

advantage of

favorable

charter rates.

●

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

control

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

our

Warrants

may

depress

our

stock price.

Some

of

the

following

risks

relate

principally

to

the

industry

in

which

we

operate

and

our

business

in

general. Other

risks relate

principally to

the securities

market and ownership

of our securities,

including our

common

stock, 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 2024, the

dry bulk

shipping market

experienced significant

volatility, especially in

the Capesize segment,

with fluctuating demand

and a notable

drop in rates

during the fourth

quarter.

Geopolitical tensions, stricter

environmental

regulations,

including

EU

fuel

rules,

and

disruptions

in

the

Panama

and

Suez

Canals

impacted

market

dynamics.

Infrastructure

projects

and

agricultural

exports

supported

demand,

keeping

freight rates for

Panamax and Ultramax segments relatively

stable, with an exception

towards the end

of

2024.

Freight rate

volatility stemmed

from seasonal

demand shifts,

with recovery

periods driven

by key

commodity

demand,

such

as

China’s

demand

for

coal

and

iron

ore

which

remained

crucial,

while

also

limited fleet

growth provided

partial support.

The introduction

of stricter

environmental

regulations, including

IMO 2030

and EU

fuel mandates,

is expected

to raise

operational costs,

potentially affecting

shipping rates.

The

Russia-Ukraine

war

and

tensions

in

Israel

disrupted

supply

chains

and

shipping

routes,

causing

unpredictable shifts in dry bulk demand. Despite these challenges, the market outlook remains cautiously

optimistic,

though

subject

to

shifts

in

global

trade

patterns,

economic

conditions,

and

geopolitical

developments.

Factors that influence demand for dry bulk vessel capacity include:

●

supply

of

and

demand

for

energy

resources,

commodities,

and

semi-finished

and

finished

consumer and industrial products;

●

changes in the exploration or production of energy

resources, commodities, and semi-finished and

finished consumer and industrial products;

●

the location of regional and global exploration, production and manufacturing

facilities;

●

the

location

of

consuming

regions

for

energy

resources,

commodities,

and

semi-finished

and

finished consumer and industrial products;

●

the globalization of production and manufacturing;

●

global

and

regional

economic

and

political

conditions,

armed

conflicts,

including

the

ongoing

conflicts

between

Russia

and

Ukraine

and

Israel

and

Hamas,

and

fluctuations

in

industrial

and

agricultural production;

●

disruptions and developments in international trade;

●

changes in seaborne and other transportation patterns,

including the distance cargo is transported

by

sea

for

reasons

including

but

not

limited

to

reductions

in

canal

capacities

and

geopolitical

conflicts and military responses;

●

international

sanctions,

embargoes,

import

and

export

restrictions,

nationalizations,

piracy,

and

terrorist attacks;

●

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;

11

●

environmental and other regulatory developments;

●

currency exchange rates, specifically versus USD; and

●

economic slowdowns caused by public health pandemics.

Demand for

our dry

bulk oceangoing

vessels is

dependent upon

economic

growth in

the world’s

economies,

seasonal and regional changes in

demand and changes to the

capacity of the global dry

bulk fleet and the

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

or social

conditions

or

other

developments

could

negatively

impact

charter

rates

and

therefore

have

a

material

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

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

●

the number of newbuilding orders and deliveries, including slippage

in deliveries;

●

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

●

port or canal congestion;

●

potential

disruption,

including

supply

chain

disruptions,

of

shipping

routes

due

to

accidents

or

political events;

●

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

freight

rates,

factors

that

affect

the

rate

of

newbuilding,

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

costs of

bunkers and

other operating

costs, costs

associated with

classification society

surveys, normal

12

maintenance and insurance coverage

costs, the efficiency

and age profile of

the existing dry bulk

fleet in

the

market

and

government

and

industry

regulation

of

maritime

transportation

practices,

particularly

environmental

protection

laws

and regulations.

These factors

influencing the

supply

of

and

demand

for

shipping capacity are outside of our

control, and we may not be able

to correctly assess the nature, timing

and degree of changes in industry conditions.

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

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

the capacity of the global

dry bulk carrier fleet

and the sources and

supply of dry bulk

cargo transported by

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

since 2014, the capacity of

the global dry

bulk carrier fleet

could increase, and

economic growth may

not resume in

areas that have

experienced

a

recession

or

continue

in

other

areas.

Adverse

economic,

political,

social

or

other

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

results.

In

addition,

the

conflict

between

Israel

and

Hamas,

which

began

in

October

2023,

has

resulted

in

an

increased

number

of

vessel

attacks

in

the

Red

Sea.

Various

shipping

companies

and/or

commercial

managers have indicated that their vessels would

avoid crossing the Red Sea and consequently

the Suez

Canal,

and

for

the

time

being

divert

vessels

around

southern

Africa’s

Cape

of

Good

Hope,

which

occasionally adds substantial

time and cost

to East-West voyages.

While we are

unable to ascertain

the

immediate impact of this conflict,

any further attacks or piracy attempts,

or continued diversion of vessels

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

The current

state of

the global

financial markets

and economic

conditions may

adversely impact

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

business.

Global

financial

markets

can

be

volatile

and

contraction

in

available

credit

may

occur

as

economic

conditions change.

In recent

years, operating

businesses in

the global

economy have

faced

weakening

demand for

goods and

services, deteriorating

international liquidity

conditions, and

declining markets

which

lead

to

a

general

decline

in

the

willingness

of

banks

and

other

financial

institutions

to

extend

credit,

particularly in

the shipping industry. As

the shipping industry

is highly dependent

on the availability

of credit

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

changes and volatility.

We face risks attendant to changes in economic environments, changes in

interest rates, and instability in

the

banking

and

securities

markets

around

the

world,

among

other

factors

which

may

have

a

material

adverse effect on our results

of operations and financial

condition and may cause

the price of our

common

shares to decline.

Global economic conditions may negatively impact the drybulk shipping

industry.

Economic

growth

is

expected

to

remain

resilient

in

2025

and

2026,

despite

significant

challenges,

as

inflation is

expected to

ease further

compared to

2024. 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

2024, the

growth of

China’s

economy is projected to slow

in 2025, as there is a

continuous threat of a Chinese

financial crisis resulting

13

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.

In

recent

years,

China

and

the

United

States

have

implemented

certain

increasingly

protective

trade

measures

with

continuing

tensions

that

started

as

tariffs

and

now

include

technology

restrictions

and

additional export controls. Moreover, the impact that the

new U.S. presidential administration will have on

these tensions remains in flux. Geopolitical tensions in 2025

may intensify and impact trade flows, military

conflicts, and dry

bulk transportation

in the

future, and

U.S.-China trade

tensions, including

the introduction

by the U.S.

government of

tariffs affecting certain

goods imported

by China, may

provoke further

retaliatory

trade actions.

Additionally,

new tariffs

have recently

been imposed

by the

U.S. on

imports from

Canada

and Mexico,

among other

countries, on

goods including

steel and

aluminum, and

the U.S.

has also

signaled

that it may

impose “reciprocal” tariffs

on foreign imports in

the coming weeks.

It is unknown

whether and

to

what

extent

such

tariffs

(or

other

new

laws

or

regulations)

will

be

retained,

expanded

or

otherwise

modified by the U.S.,

or the effect that

any such actions

will have on us

or our industry, but such measures

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

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

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 2024, the BDI ranged

from

a low of

976 to a

high of 2,419

and closed at

1,635 on March

20, 2025. 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

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 3.4%

and 2.9%

in December 2023

and 2024,

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

14

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

and

economic

sanctions

restrictions

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 (including in

Israel and Gaza), Ukraine, the

South China Sea region

and other geographic

countries and

areas, geopolitical

events, terrorist

or other attacks,

war (or

threatened

war) and 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 Ukraine

and the

Middle East,

and 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

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.

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

United States and China,

stabilizing growth in China, continuing threat

of terrorist attacks around

the world,

continuing instability and

conflicts and other

ongoing occurrences in

the Middle

East,

Ukraine, and in other geographic areas and countries, economic

sanctions restrictions.

In the

past, political

instability has

also resulted

in attacks

on vessels,

mining of

waterways and

other efforts

to disrupt international shipping,

particularly in the Arabian

Gulf region, 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,

European leaders

announced various

economic sanctions

against Russia

in connection

with the

aforementioned conflicts

in the

Ukraine region,

which may

adversely impact

our

business. The

ongoing conflict

could result

in the

imposition of

further economic

sanctions or

new categories

of export

restrictions

against

persons

in

or

connected

to

Russia.

While

in

general

much

uncertainty

remains

regarding the

global impact

of the

conflict in Ukraine,

it is possible

that such

tensions could

adversely affect

the Company’s business, financial condition, results of operation and cash flows.

15

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. 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.

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,

new tariffs may

be imposed by

the Trump

administration on imports

from Canada,

Mexico and

China as

well as

on imports of

steel and

aluminum. It is unknown

whether and to what

extent new tariffs (or

other new laws or

regulations) will be

adopted, or the effect that any such actions would

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

takes 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.

Additionally,

the

U.S.

trade

war

with

China

may

escalate

beyond

tariffs

with

a

proposal

by

the

Trump

administration to impose significant fees on any

vessel entering a U.S. port where that

vessel is owned by

a

Chinese

shipping

company

or

by

a

vessel

operator

whose

fleet

includes

one

or

more

Chinese-built

vessels or

that has

newbuilding

orders at

a Chinese

shipyard. The

proposal of

the U.S.

trade representative

(USTR), if

adopted as

proposed, would

require Chinese

shipping company’s-to

pay up

to $1

million per

port

call

and

those

operating

Chinese-built

vessels

to

be

charged

up

to

$1.5

million

per

U.S.

port

call,

depending on the percentage of vessels in their fleet

built at Chinese shipyard or newbuilding orders with

Chinese shipyards.

It is

unknown whether

and to

what extent

these new

port fees

on Chinese

shipping

companies and vessels will be adopted, or the effect that they would

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

container 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

16

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

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. In addition, unpredictable

weather patterns in these

months tend to disrupt vessel

scheduling and

supplies of certain

commodities. As a

result, our revenues

may be weaker

during the

fiscal quarters ending

June 30

and

September 30,

and,

conversely,

our

revenues

may

be

stronger

in

fiscal

quarters

ending

December 31 and March 31.

While this seasonality

does not directly

affect our operating

results, it could

materially

affect

our

operating results

to

the

extent

our

vessels

are

employed

in

the

spot

market

in

the

future.

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

profits.

While we generally will not bear the cost

of fuel or bunkers for vessels

operating on time charters, fuel is

a

significant

factor

in

negotiating

charter

rates.

As

a

result,

an

increase

in

the

price

of

fuel

beyond

our

expectations

may

adversely

affect

our

profitability

at

the

time

of

charter

negotiation.

Fuel

is

also

a

significant, if not

the largest, expense

in shipping when

vessels are under

voyage charter.

The price and

supply of

fuel is

unpredictable and

fluctuates based

on events

outside our

control, including

geopolitical

developments, such as the ongoing conflict between Russia and Ukraine and between

Israel and Hamas,

supply

and

demand for

oil

and

gas,

actions

by

the

Organization

of

Petroleum Exporting

Countries

(the

17

"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.

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, SOLAS,

the International Convention on

Load Lines of 1966,

the International Convention of

Civil Liability for

Bunker Oil Pollution

Damage, and the

ISM Code. Because such

conventions, laws, and

regulations are often revised, we

cannot predict the ultimate cost

of complying with such requirements or

the impact

thereof on the

re-sale price

or useful life

of any

vessel that

we own

or will

acquire. Additional

conventions, laws

and regulations

may be

adopted that

could limit

our ability

to do

business or

increase

the

cost

of

our

doing

business

and

which

may

materially

adversely

affect

our

operations.

Government

regulation

of

vessels,

particularly

in

the

areas

of

safety

and

environmental

requirements,

continue

to

change, requiring us

to incur significant

capital expenditures on

our vessels to

keep them in

compliance,

or even

to scrap

or sell

certain vessels

altogether.

In addition,

we may

incur significant

costs in

meeting

new

maintenance

and

inspection

requirements,

in

developing

contingency

arrangements

for

potential

environmental violations and in obtaining insurance coverage.

In addition,

we are required

by various

governmental and quasi-governmental agencies

to obtain

certain

permits,

licenses,

certificates,

approvals

and

financial

assurances

with

respect

to

our

operations.

Our

failure to

maintain necessary

permits, licenses,

certificates, approvals

or financial

assurances could

require

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

lead to the invalidation or reduction of our insurance coverage.

Environmental

requirements

can

also

affect

the

resale

value

or

useful

lives

of

our

vessels,

require

a

reduction in

cargo capacity,

ship modifications

or operational

changes or

restrictions, lead

to decreased

availability

of

insurance

coverage

for

environmental

matters

or

result

in

the

denial

of

access

to

certain

jurisdictional waters or

ports, or detention

in certain ports.

Under local, national and

foreign laws, as

well

as international treaties

and conventions, we

could incur material

liabilities, including 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.

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

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.

In

addition,

international

shipping

is

subject

to

various

security

and

customs

inspection

and

in

countries of

origin

and

destination and

trans-shipment points.

Inspection

procedures can

result in

the seizure of

the cargo and/or

our vessels, delays

in the

loading, offloading or

delivery and the

levying

of

customs

duties,

fines

or

other

penalties

against

us.

It

is

possible

that

changes

to

inspection

procedures

could

impose

additional

financial

and

legal

obligations

on

us.

Furthermore,

changes

to

inspection procedures

could also

impose additional

costs and

obligations on

our customers

and may,

in

certain

cases,

render

the

shipment

of

certain

types

of

cargo

uneconomical

or

impractical.

Any

such

changes or developments may

have a material adverse

effect on our business, results

of operations, cash

flows, financial condition and available cash.

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

19

be

unable

to

find

space

at

a

suitable

drydocking

facility

or

our

vessels

may

be

forced

to

travel

to

a

drydocking facility

that is

not conveniently

located relative to

our vessels' positions.

The loss

of earnings

while

these

vessels

are

forced

to

wait

for

space

or

to

travel

to

more

distant

drydocking

facilities

may

adversely affect our business and financial condition.

The operation

of dry

bulk vessels has

certain unique operational

risks. With

a dry

bulk vessel, the

cargo

itself and its interaction

with the ship can

be a risk

factor. By their nature, dry

bulk cargoes are

often heavy,

dense

and

easily

shifted,

and

react

badly

to

water

exposure.

In

addition,

dry

bulk

vessels

are

often

subjected to

battering treatment

during unloading

operations with

grabs, jackhammers

(to pry

encrusted

cargoes out of the

hold), and small bulldozers. This

treatment may cause damage to

the dry bulk vessel.

Dry bulk

vessels damaged

due to

treatment during

unloading procedures

may be

more susceptible

to a

breach at sea. Hull breaches in

dry bulk vessels may lead to the

flooding of their holds. If flooding occurs

in the forward holds, the bulk

cargo may become so waterlogged that

the vessel's bulkheads may buckle

under the resulting

pressure leading

to the loss of

the dry bulk vessel.

These risks may

also impact the

risk

of loss of life or harm to our crew.

If

we

are

unable to

adequately maintain

or

safeguard

our

vessels,

we may

be

unable

to

prevent these

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

results of operations.

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

or embargoes

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.

20

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 2024 and

up to the date of this

annual report, and intend

to maintain such compliance,

there

can be no assurance that we

or our charterers will be

in compliance in the future, particularly

as the scope

of certain

laws may be

unclear and may

be subject to

changing interpretations. Any

such violation could

result

in

fines,

penalties or

other

sanctions that

could severely

impact

our

ability to

access

U.S.

capital

markets and conduct our business and could result in

our reputation and the markets for our securities to

be adversely affected

and/or in some

investors deciding, or being

required, to divest

their interest, or

not

to invest, in us. In

addition, certain institutional investors may have investment policies

or restrictions that

prevent them

from holding

securities of

companies that

have contracts

with countries

or territories

identified

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

by these investors not to invest

in, or

to divest

from, our shares

may adversely

affect the

price at

which our

shares trade. Moreover,

our

charterers may violate applicable sanctions

and embargo laws and

regulations as a result

of actions that

do not involve

us or our

vessels, and those

violations could in

turn negatively affect

our reputation. 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

21

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

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.

Changing laws and

evolving reporting requirements

could have an

adverse effect on

our business.

Changing laws,

regulations and

standards relating

to reporting

requirements, including

the European

Union

General Data Protection Regulation, or GDPR, may create additional

compliance requirements for us.

22

GDPR broadens the

scope of personal

privacy laws to

protect the rights

of European Union

citizens and

requires organizations to

report data

breaches within 72

hours and be

bound by more

stringent rules for

obtaining

the

consent

of

individuals

on

how

their

data

can

be

used.

GDPR

applies

to

all

companies

processing and holding the personal

data of data subjects residing

in the EU, regardless of

the company’s

location.

GDPR

became

enforceable

on

May

25,

2018

and

non-compliance

may

expose

entities

to

significant fines or

other regulatory claims

which could have

an adverse effect

on our

business, financial

condition, and operations.

Company Specific Risk Factors

The market values of our vessels could decline,

which could limit the amount of funds

that we can

borrow and

could trigger

breaches of

certain financial

covenants contained

in our

loan facilities,

which

could

adversely

affect

our

operating

results,

and

we

may

incur

a

loss

if

we

sell

vessels

following a decline in their market values.

While the

market values

of vessels

and the

freight charter

market have

a very

close relationship

as the

charter market

moves from

trough to

peak, the

time lag

between the

effect of

charter rates

on market

values

of ships can vary.

The market

values of

our vessels

have generally

experienced high

volatility,

and you

should expect

the

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

factors including:

●

the prevailing level of charter hire rates;

●

general economic and market conditions affecting the shipping industry;

●

competition from other shipping companies and other modes

of transportation;

●

the types, sizes and ages of vessels;

●

the supply of and demand for vessels;

●

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,

2024,

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

23

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 since

the beginning

of 2025, short-term time charter and spot market charter rates for some dry bulk carriers have declined at

or

below

the

operating

costs

of

those

vessels. We

cannot

assure you

that

future

charter

hire

rates

will

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

Rising crew costs could adversely affect our results of operations.

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

and increased demand for

crew

has

created

upward

pressure

on

crew

costs.

Additionally,

the

return

of

a

number

of

Ukrainian

seafarers to

their homes as

a result

of the

ongoing war in

Ukraine has

reduced the number

of seafarers

globally

and

thereby

increased

the

pressure

on

crew

wages.

Continued

higher

crew

costs

or

further

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

Our investment in Diana Wilhelmsen Management Limited may expose

us to additional risks.

During

2015

we

invested

in

a

50/50

joint

venture

with

Wilhelmsen

Ship

Management

which

provides

management

services

to

a

limited

number

of

vessels

in

our

fleet

and

to

affiliated

companies,

but

our

eventual goal

is to

provide fleet

management services

to unaffiliated

third-party vessel

operators. While

this joint

venture may

provide us

in the

future with

a potential

revenue source,

it may

also expose

us to

risks such

as low

customer satisfaction, increased

operating costs compared

to those we

would achieve

for our

vessels, and

inability to

adequately staff

our vessels

with crew

that meets

our expectations

or to

maintain our vessels according to our standards, which would adversely

affect our financial condition.

A cyber-attack could materially disrupt our business.

We

rely

on

information

technology

systems

and

networks

in

our

operations

and

administration

of

our

business, 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 by computer

hackers and

cyber

terrorists.

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.

24

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

establishing

security

testing,

business

continuity,

disaster

recovery,

and

incident

response

programs,

as

well

as

developing

a

robust

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

with

causing material and adverse effect on our business.

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

and incidents may be elevated

as

a result

of the

ongoing conflicts

between Russia

and

Ukraine. and

the

Israel-Hamas conflict.

To

the

extent

such

attacks

have

collateral

effects

on

global

critical

infrastructure

or

financial

institutions,

such

developments could adversely affect our

business, operating results and

financial condition. At this

time, it

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

As

cyberattacks

become

increasingly

sophisticated,

and

as

tools

and

resources

become

more

readily

available to

malicious third

parties, 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. 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,

2024, 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

25

International Maritime Organization’s

Marine Environment Protection

Committee (“MEPC”) 80

updated the

initial strategy

to reduce

greenhouse gas

emissions from

ships. The

initial strategy

identifies ―levels

of

ambition to reducing greenhouse gas

emissions, including (1) decreasing the

carbon intensity from ships

through implementation

of further phases

of the EEDI

for new ships;

(2) reducing

carbon dioxide

emissions

per transport

work, as

an average

across international

shipping, by

at least

20% by

2030, compared

to

2008 emission

levels; and

(3) reducing

the total

annual greenhouse

emissions by

at least

70% by

2040

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

Since January

1, 2020,

ships have

to either

remove sulfur

from emissions

or buy

fuel with

low sulfur

content,

which may lead to

increased costs and supplementary investments for

ship owners. The interpretation of

"fuel

oil used

on board"

includes use

in main

engine, auxiliary

engines and

boilers. We

have elected

to

comply with this regulation

by using 0.5% sulfur fuels

on board, which are

available around the world but

often at a higher cost

and may result in higher

costs than other companies

that elected to install scrubbers

on their vessels.

In

addition,

although

the

emissions

of

greenhouse

gases

from

international

shipping

currently

are

not

subject

to

the

Kyoto

Protocol

to

the

United

Nations

Framework

Convention

on

Climate

Change,

which

required adopting countries

to implement national programs

to reduce emissions

of certain gases,

or the

Paris

Agreement

(discussed

further

below),

a

new

treaty

may

be

adopted

in

the

future

that

includes

restrictions on shipping emissions. Compliance with

changes in laws, regulations and

obligations relating

to climate

change could increase

our costs related

to operating

and maintaining our

vessels and require

us

to

install

new

emission

controls,

acquire

allowances

or

pay

taxes

our

greenhouse

gas

emissions

or

administer

and

manage

a

greenhouse

gas

emissions

program.

Revenue

generation

and

strategic growth opportunities may also be adversely affected.

Increasing

scrutiny

and

changing

expectations

from

investors,

lenders

and

other

market

participants with respect

to our ESG

policies may impose

additional costs on

us or

expose us to

additional risks.

Companies

across

all

industries

are

facing

increasing

scrutiny

relating

to

their

ESG

policies.

Investor

advocacy groups,

certain institutional

investors, investment

funds, lenders

and other

market participants

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

implications and social

cost of their

investments. Companies

which do not

adapt to or

comply with investor,

lender

or

other

industry

shareholder

expectations

and

standards,

which

are

evolving,

or

which

are

perceived

to

have

not

responded

appropriately

to

the

growing

concern

for

ESG

issues,

regardless

of

whether

there

is

a

legal requirement

to

do

so,

may

suffer

from

reputational damage

and

the

business,

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

be materially and adversely affected.

In

February

2021,

the

former

Acting

Chair

of

the

SEC

issued

a

statement

directing

the

Division

of

Corporation Finance

to enhance

its focus

on climate-related

disclosure in

public company

filings and

in

March

2021

the

SEC

announced

the

creation

of

a

Climate

and

ESG

Task

Force

in

the

Division

of

Enforcement (the “Task Force”). The Task Force’s goal is to

develop initiatives

to proactively identify

ESG-

related misconduct consistent with increased investor

reliance on climate and ESG-related disclosure

and

investment.

To

implement the Task Force’s purpose, the

SEC has taken

several enforcement actions,

with

the first enforcement

action taking place

in May 2022,

and promulgated new

rules. On March

21, 2022, the

SEC proposed that all

public companies are to include

extensive climate-related information in their

SEC

filings. On

May 25,

2022, SEC

proposed a

second set

of rules

aiming to

curb the

practice of

"greenwashing"

(i.e., making

unfounded claims

about one's

ESG efforts)

and would

add proposed

amendments to

rules

and reporting

forms that

apply to

registered investment

companies and

advisers, advisers

exempt from

registration,

and

business

development

companies. On

March

6,

2024,

the

SEC

adopted

final

rules

to

require registrants

to disclose

certain climate-related

information in

SEC filings

of all

public companies.

The

final rules

require companies

to disclose,

among other

things: material

climate-related risks;

activities to

mitigate or

adapt to such

risks; information about

the registrant's board

of directors' oversight

of climate-

26

related risks

and management’s

role in

managing material

climate-related risks;

and information

on any

climate-related

targets

or

goals

that

are

material

to

the

registrant's

business,

results

of

operations,

or

financial condition.

Further, to facilitate

investors' assessment

of certain

climate-related risks,

the final

rules

require

disclosure

of

Scope

1

and/or

Scope

2

greenhouse

gas

(GHG)

emissions

on

a

phased-in

basis

when those

emissions are

material; the

filing of

an attestation

report covering

the required

disclosure of

such

registrants’

Scope

1

and/or

Scope

2

emissions,

also

on

a

phased-in

basis;

and

disclosure of

the

financial statement

effects of

severe weather

events and other

natural conditions including,

for example,

costs

and

losses.

The

final

rules

include

a

phased-in

compliance

period

for

all

registrants,

with

the

compliance date dependent on the registrant’s filer status and the content

of the disclosure.

Almost immediately upon release of the

rules, multiple lawsuits challenging the rules

were filed in federal

court, and the

cases were transferred

to the

Eighth Circuit Court

of Appeals.

On April

4, 2024, the

SEC

voluntarily issued a stay of

the climate-related disclosure rules

pending the completion of

judicial review of

the consolidated

Eighth Circuit

petitions, which

is still

ongoing.

In addition,

on June

28, 2024,

in its

decision

of

the

combined

cases

of

Relentless

v.

Department

of

Commerce

and

Loper

Bright

Enterprises

v.

Raimondo

, the

Supreme Court of the

United States narrowed its

view of agency

authority by overturning

Chevron deference, which required judges to defer to an agency’s interpretation of relevant laws when its

regulations are subject to a legal challenge. This

decision will raise the burden for administrative

agencies

to prove they have the

authority to create a rule and

will likely create a hurdle

for SEC’s pending climate-

The

impact

of

the

ongoing litigation

with

respect

to

these

rules,

as

well as

the

change in administration, is uncertain. Costs

of compliance with these new rules

and any further climate-

related disclosure rules that are adopted

in the future may be significant

and may have a material adverse

effect on our future performance, results of operations, cash flows and

financial position.

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

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

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

27

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;

●

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;

28

●

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.

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

39

vessels

of

which

37

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

11.4 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.

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

29

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

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.

30

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

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

31

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

around half of

our operating

expenses and our

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

a significant portion of

our expenses is incurred

in currencies other

than the U.S. dollar, our expenses

may

from time to

time increase relative

to our revenues

as a result

of fluctuations in

exchange rates, particularly

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

2024, 2023, and

2022, approximately

11%, 13% and 34%,

respectively, of our revenues

were derived

from

one,

one

and

two

charterers,

respectively.

If

one

or

more

of

our

charterers

chooses

not

to

charter

our

vessels

or

is

unable

to

perform

under

one

or

more

charters

with

us

and

we

are

not

able

to

find

a

replacement charter, we could suffer

a loss of revenues that could adversely affect our financial condition

and results of operations.

We are a holding company, and we

depend on the ability of our subsidiaries to distribute funds to

us in order to satisfy our financial obligations.

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

operating

assets. We

have no significant

assets other than

the equity

interests in our

subsidiaries. As a

result, our

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

funds to

us.

If

we

are

unable

to

obtain

funds

from

our

subsidiaries,

we

may

not

be

able

to

satisfy

our

financial

obligations.

Certain of our vessels

are owned through joint

ventures that we have entered

into, and our views

about

the

operations

of

those

vessels

may

differ

from

our

joint

venture

partners

and

adversely

affect our interest in the joint ventures.

We have entered into

two joint venture arrangements pursuant to

which we own minority interests in

four

commissioning service operation

vessel newbuilding contracts

through Windward

Offshore GmbH

& Co.

KG

and

one

dry

bulk

vessel

through

Bergen

Ultra,

and

we

may

enter

into

additional

joint

venture

arrangement

in

the

future. As

a

minority

interest

holder

in

these

joint

ventures,

we

share

voting

and

operational control of these joint

ventures and the operations of

these 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.

32

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.

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

33

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.

We expect that

we and each

of our subsidiaries

qualify for this

statutory tax exemption

for the 2024

taxable

year and

we will take

this position

for U.S. federal

income tax return

reporting purposes. However,

there

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

in future years

and thereby

become subject

to U.S.

federal income

tax on

our U.S. source

shipping income.

For example, in

certain circumstances we

may no longer

qualify for exemption

under Code Section 883

for

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

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

for more

than half

the days

during the

taxable year.

Due to

the factual

nature of the

issues involved, we

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

If we or

our subsidiaries are not

entitled to this exemption

under Section 883 of

the Code for any

taxable

year, we or our subsidiaries would

be subject for those

years to a 4%

U.S. federal income

tax on our gross

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

could have a negative effect on our business

and would

result in

decreased earnings

available for

distribution to

our shareholders,

although, for

the 2024

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.

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”.

34

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;

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

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 2024 and two

special non-cash dividends. The actual

declaration of future

cash dividends, and

the establishment of

record and payment

dates, is subject

to final

determination

by

our

board

of

directors

each

quarter

after

its

review

of

the

company's

financial

performance.

We

cannot

assure

you

that

our

board

of

directors

will

declare

and

pay

dividends

going

forward. Our dividend policy

is assessed by

our board of

directors from time to

time, based on

prevailing

market conditions,

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

35

growth strategy and other

cash needs, the requirements

of Marshall Islands law

and other factors deemed

relevant

to

our

board

of

directors.

In

addition,

other

external

factors,

such

as

our

lenders

imposing

restrictions on our

ability to pay

dividends.

Under the terms

of our agreements,

we may not

be permitted

to

pay

dividends

that

would

result

in

an

event

of

default

or

if

an

event

of

default

has

occurred

and

is

continuing.

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

of debt

and equity

financing on

terms acceptable

to us.

If financing

is not

available to

us on

acceptable

terms, our board

of directors

may determine to

finance or refinance

acquisitions with cash

from operations,

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

for the payment of dividends.

Marshall

Islands

law

generally

prohibits

the

payment

of

dividends

other

than

from

surplus

(retained

earnings and

the excess

of consideration

received for

the sale

of shares

above the

par value

of the

shares),

or while

a company

is insolvent

or would

be rendered

insolvent by

the payment

of such

a dividend.

We

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

In

addition, our

ability to

pay dividends

to holders

of our

common shares

will be

subject to

the rights

of

holders

of

our

Series

B

Preferred

Shares,

which

rank

senior

to

our

common

shares

with

respect

to

dividends,

distributions and

payments

upon

liquidation. No

cash dividend

may

be

paid

on

our

common

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

all outstanding

Series B

Preferred Shares

for all

prior and

the then-ending

dividend periods.

Cumulative

dividends

on

our

Series

B

Preferred

Shares

accrue

at

a

rate

of

8.875%

per

annum

per

$25.00

stated

liquidation preference

per Series

B Preferred

Share, subject

to increase

upon the

occurrence of

certain

events, and are payable, as and if

declared by our board of directors,

on January 15, April 15, July

15 and

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

fall on a date that is not a

business

day,

the

immediately succeeding

business

day.

For

additional information

about

our

Series

B

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

of our

registration statement

on Form

8-A filed

with the

SEC on

February 13,

2014 and

incorporated by

reference herein.

The

market

prices

and

trading

volume

of

our

shares

of

common

stock

may

experience

rapid

and

substantial price

volatility, which

could cause

purchasers of

our common

stock to

incur substantial

losses.

Our shares of our common stock may experience

similar rapid and substantial price volatility unrelated

to our financial

performance, which

could cause purchasers

of our common

stock to incur

substantial

losses,

which

may

be

unpredictable

and

not

bear

any

relationship

to

our

business

and

financial

performance. Extreme fluctuations in

the market price of

our common stock may

occur in response to

strong

and

atypical

retail

investor

interest,

including

on

social

media

and

online

forums,

the

direct

access by retail investors

to broadly available trading

platforms, the amount and

status of short interest

in

our

common

stock

and

our

other

securities,

access

to

margin

debt,

trading

in

options

and

other

derivatives on our shares of common

stock and any related hedging

and other trading factors:

If

there

is

extreme

market

volatility

and

trading

patterns

in

our

common

stock,

it

may

create

several

risks for purchasers of

our shares, including the following:

●

the market

price

of our

common stock

may

experience

rapid and

substantial

increases or

decreases

unrelated

to

our

operating

performance

or

prospects,

or

macro

or

industry

fundamentals;

●

if

our

future

market

capitalization

reflects

trading

dynamics

unrelated

to

our

financial

performance or

prospects, purchasers

of our

common stock

could incur

substantial losses

as prices decline once

the level of market volatility

has abated;

36

●

if the

future market

price of

our common

stock declines,

purchasers of

shares of

common

stock in this offering may be unable to

resell such shares at or above the price

at which they

acquired

them.

We

cannot

assure

such

purchasers

that

the

market

of

our

common

stock

will not fluctuate or decline significantly in the

future, in which case investors in this offering

could incur substantial losses.

Further, we may

incur rapid and

substantial increases

or decreases

in our common

stock price in

the

foreseeable future

that may

not coincide

in timing

with the

disclosure of

news or

developments by

or

affecting us.

Accordingly, the

market price

of our

common stock

may fluctuate

dramatically, and

may

decline

rapidly,

regardless

of

any

developments

in

our

business.

Overall,

there

are

various

factors,

many

of

which

are

beyond

our

control,

that

could

negatively

affect

the

market

price

of

our

common

stock or result in

fluctuations in the price or trading

volume of our common

stock, including:

●

actual or anticipated variations in our annual or quarterly

results of operations, including our

earnings estimates and whether we

meet market expectations with regard

to our earnings;

●

our ability to pay dividends or

other distributions;

●

publication

of

research

reports

by

analysts

or

others

about

us

or

the

shipping

industry

in

which we

operate which

may be

unfavorable, inaccurate,

inconsistent or

not disseminated

on a regular basis;

●

changes in market valuations of similar

companies;

●

market reaction

to any

additional

equity, debt

or other

securities that

we may

issue in

the

future, and which may or

may not dilute the holdings

of our existing stockholders;

●

additions or departures of key

personnel;

●

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;

●

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.

37

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.

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

38

for tax

purposes. If

the Marshall

Islands is

added to

the list

of non-cooperative

jurisdictions in

the future

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

European Member States to

countries on

the list

or further

economic substance requirements

were imposed

by the

Marshall Islands,

our business could be harmed.

Certain existing

shareholders will

be able

to exert

considerable influence

over matters

on which

our shareholders are entitled to vote.

As

of

the

date

of

this

annual

report,

Mrs.

Semiramis

Paliou,

our

Chief

Executive

Officer

and

Director,

beneficially owns 24,719,462 shares, or approximately 20.3% of

our outstanding common stock, which is

held indirectly

through entities

over which

she exercises

sole voting

power.

Mrs. Paliou

controls 10,675

shares of

Series C

Preferred Stock,

par value

$0.01 per

share, issued

on January

31, 2019,

and 400

shares

of Series D

Preferred Stock,

issued on

June 22,

2021. The

Series C Preferred

Stock vote

with our common

shares and

each share

of the

Series C

Preferred Stock

entitles the

holder thereof

to 1,000

votes on

all

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

The Series D Preferred Stock vote

with

the

common

shares of

the

Company,

and

each share

of

the

Series D

Preferred

Stock

entitles the

holder thereof

to up

to 200,000

votes, on

all matters

submitted to

a vote

of the

stockholders of

the Company,

provided however, that

to the extent the

total number of votes one

or more holders of Series

D Preferred

Stock is entitled

to vote (including

any voting power

of such holders

derived from Series

D Preferred

Stock,

shares of

Common Stock

or any

other voting

security of

the Company

issued and

outstanding as

of the

date hereof or

that may be

issued in the

future) on any

matter submitted to

a vote of

stockholders of the

Company

would

exceed

36%

of

the

total

number

of

votes

eligible

to

be

cast

on

such

matter,

the

total

number of

votes that

holders of

Series D

Preferred Stock

may exercise

derived from

the Series

D Preferred

Stock together with

Common Shares and

any other voting

securities of the

Company beneficially owned

by such holder,

shall be reduced to 36% of

the total number of votes entitled to

vote on any matter put to

stockholders of the Company.

Through her beneficial ownership of common shares

and shares of Series

C

Preferred

Stock

and

Series

D

Preferred

Stock,

Mrs.

Paliou

controls

36%

of

the

vote

of

any

matter

submitted to the vote

of the common shareholders.

Please see "Item 7.

Major Shareholders and Related

Party Transactions—A. Major

Shareholders." While Mrs. Paliou and the entities

controlled by Mrs. Paliou

have no

agreement, arrangement

or understanding

relating to

the voting

of their

shares of

our common

stock, they

are able

to influence

the outcome

of matters

on which

our shareholders

are entitled

to vote,

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

may

have

the

effect

of

delaying,

deferring

or

preventing

a

change

in

control,

merger,

consolidation,

takeover or other

business combination.

This concentration of

ownership could

also discourage a

potential

acquirer from

making a

tender offer or

otherwise attempting

to obtain

control of

us, which

could in

turn have

an adverse effect

on the market

price of our

shares. So long

as our

Chief Executive Officer

continues to

own a significant amount

of our equity,

even though the amount

held by her represents

less than 50% of

our voting power,

she will continue to

be able to exercise

considerable influence over our

decisions. The

interests of these shareholders may be different from your interests.

Future sales of our common stock could cause the market price

of our common stock to decline.

Our amended

and restated

articles of

incorporation authorize

us to

issue up

to 1,000,000,000

shares of

common stock, of which, as

of December 31, 2024, 125,203,405

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.

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.

39

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.

The existence of the Series B Preferred

Shares could have an adverse effect on the value

of our common

shares.

40

Risks Relating to Our Series B Preferred Stock

We may not have

sufficient cash from our operations to

enable us to pay dividends on

our Series

B Preferred Shares following the payment of expenses and the establishment

of any reserves.

We

pay quarterly

dividends on

our Series

B Preferred

Shares only

from funds

legally available

for such

purpose when,

as and

if

declared by

our board

of

directors. We

may

not have

sufficient

cash available

each

quarter to

pay dividends.

The amount

of

dividends we

can pay

on our

Series B

Preferred Shares

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

operations, which may fluctuate.

The

amount of

cash we

have

available for

dividends on

our Series

B Preferred

Shares will

not

depend

solely on our

profitability. The

actual amount of cash

we have available to

pay dividends on our

Series B

Preferred Shares depends on many factors, including

the following:

●

changes in

our operating

cash flow, capital expenditure

requirements, working

capital requirements

and other cash needs;

●

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

ability to

pay dividends if an

event of default has

occurred and is

continuing or if

the payment of the

dividend

would result in

an event of

default, or under

certain facilities

if it would

result in the

breach of certain

financial covenants;

●

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

and

●

restrictions under

Marshall Islands

law,

which generally

prohibits the

payment of

dividends other

than from

surplus (retained

earnings and

the excess

of consideration

received for

the sale

of shares

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

by the payment of such a dividend.

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

from our net income or loss for

the period, which

is affected by

non-cash items, and

our board of

directors in its discretion

may elect not

to declare

any dividends.

As a

result of

these and

the other

factors mentioned

above, we

may pay

dividends

during

periods

when

we

record

losses

and

may

not

pay

dividends

during

periods

when

we

record

net

income.

The Series B Preferred Shares represent perpetual equity

interests.

The Series B

Preferred Shares represent

perpetual equity interests

in us and,

unlike our indebtedness,

will

not give

rise to

a claim for

payment of a

principal amount at

a particular date.

As a

result, holders of

the

Series

B Preferred

Shares may

be required

to

bear the

financial risks

of

an investment

in the

Series B

Preferred Shares for an indefinite period

of time. In addition, the Series B

Preferred Shares will rank junior

to all our

indebtedness and other

liabilities, and to

any other senior

securities we may

issue in the

future

with respect to assets available to satisfy claims against us.

Our Series

B Preferred

Shares are

subordinate to

our indebtedness,

and your

interests could

be

diluted

by

the

issuance

of

additional

preferred

shares,

including

additional

Series

B

Preferred

Shares, and by other transactions.

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

our ability to pay dividends on, redeem

or pay the liquidation preference on

our Series B Preferred Shares

in liquidation or

otherwise may be

subject to prior

payments due to

the holders of

our indebtedness. Our

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

ability to pay

dividends on

or

redeem preferred

shares. Our

amended and

restated

articles of

incorporation currently

41

authorize the issuance

of up to

50,000,000 preferred

shares, par value

$0.01 per share.

Of these preferred

shares, 1,000,000 shares have been

designated Series A Participating

Preferred Stock, 5,000,000 shares

have been

designated Series

B Preferred

Shares, 10,675

are designated

as Series

C Preferred

Shares

and 400 are designated as

Series D Preferred Shares. The

Series B Preferred Shares are

senior in rank

to the

Series A

Participating Preferred

Shares. The

issuance of

additional Series

B Preferred

Shares or

other preferred shares

on a parity

with or senior

to the Series B

Preferred Shares would

dilute the interests

of holders of our

Series B Preferred Shares, and any issuance

of preferred shares senior to

our Series B

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

the liquidation preference

on our Series

B Preferred Shares.

The Series B

Preferred Shares do

not contain

any provisions

affording the

holders of

our Series

B Preferred

Shares protection

in the

event of

a highly

leveraged or other transaction,

including a merger or the

sale, lease or conveyance

of all or substantially

all our assets

or business, which might

adversely affect the

holders of our Series

B Preferred Shares, so

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

materially and adversely affected.

We may redeem the

Series B Preferred

Shares, and you

may not be

able to reinvest

the redemption

price you receive in a similar security.

Since February 14, 2019, we

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

in whole or in part, at

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

if market conditions allow us

to issue other preferred shares

or debt securities at a

rate that is lower than

the dividend

on the

Series B

Preferred Shares.

If we

redeem Series

B Preferred

Shares, then

from and

after the

redemption date,

your dividends

will cease

to accrue

on your

Series B

Preferred Shares,

your

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

shares

will

terminate,

except

the

right

to

receive

the

redemption

price

plus

accumulated

and

unpaid

dividends, if any,

payable upon redemption. If

we redeem the

Series B Preferred

Shares for any

reason,

you may not be able to reinvest the redemption price you receive in a similar

security.

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

Shares.

One of

the factors that

may influence the

price of

our Series B

Preferred Shares is

the dividend yield

on

the Series B Preferred Shares

(as a percentage of the

price of our Series B

Preferred Shares) relative to

market

interest

rates.

An

increase

in

market

interest

rates,

which

are

currently

at

low

levels

relative

to

historical

rates,

may

lead

prospective

purchasers

of

our

Series

B

Preferred

Shares

to

expect

a

higher

dividend yield, and

higher interest rates

would likely increase

our borrowing costs

and potentially decrease

funds available for

distribution. Accordingly,

higher market

interest rates could

cause the

market price of

our Series B Preferred Shares to decrease.

As a holder of Series B Preferred Shares you have extremely

limited voting rights.

Your voting rights as a holder of Series

B Preferred Shares are

extremely limited. Our common

shares are

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

Shares have

no voting

rights other

than the

ability,

subject to

certain exceptions,

to elect

one director

if

dividends for six

quarterly dividend

periods (whether

or not consecutive)

payable on

our Series B

Preferred

Shares are in arrears and certain other limited protective voting

rights.

Our

ability

to

pay

dividends

on

and

to

redeem

our

Series

B

Preferred

Shares

is

limited

by

the

requirements of Marshall Islands law.

Marshall Islands

law provides that

we may

pay dividends on

and redeem the

Series B

Preferred Shares

only to the

extent that assets

are legally available

for such purposes.

Legally available

assets generally

are

limited to our surplus, which essentially represents our retained earnings

and the excess of consideration

received by us for

the sale of shares

above the par value

of the shares. In

addition, under Marshall

Islands

42

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,

2024, we

have

issued 9.8

million shares

of common

stock

and we

could issue

up

to 26.5

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.

Recent Developments

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

committed

to

increase

our

contribution

to

the

partnership to Euro 50.0

million, being 45.87% of

Windward’s capital in

order for the partnership to

place

orders for two additional CSOVs.

43

On March 12, 2025,

we entered into a

joint venture agreement with

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 and with the option for two more.

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 $22.9 million.

Stockholders’ Rights Agreement

On

February 2,

2024,

we

entered

into

an

Amended

and

Restated Stockholders

Rights

Agreement (the

“Rights Agreement”)

with Computershare

Trust Company, N.A., as Rights

Agent, to amend

and restate

the

Stockholders Rights Agreement, dated January 15, 2016 which, among other things,

amends the original

rights agreement to extend the expiration date of the Rights Agreement

to February 1, 2034.

Equity Distribution Agreement

On September 9,

2024, we

entered into Amendment

No. 2 to

the Equity Distribution

Agreement dated

April

23, 2021, and amended July 9, 2021, between Maxim and the Company.

Dividends

On March

12, 2024,

we paid

a cash

dividend of

$0.075 per

share, or

$9.0 million,

to all

shareholders of

record as of March 5, 2024.

On June 18, 2024, we paid a cash dividend of $0.075 per share, or $9.4 million,

to shareholders of record

as of June 12, 2024.

On August

30, 2024,

we paid

a cash

dividend of

$0.075 per

share, or

$9.4 million,

to shareholders

of record

as of August 15, 2024.

On December

18, 2024,

we paid

a cash

dividend of

$0.01 per

share, or

$1.3 million,

to shareholders

of

record as of December 11, 2024.

On February 25, 2025, we declared a cash dividend of $0.01 per

share, or $1.1 million, payable on March

21, 2025 to shareholders of record as of March 12, 2025.

Loans

In

July

2024,

we

completed

the

pricing

of

a

$150

million

private

placement

of

senior

unsecured

bonds

maturing in July

2029 and callable

beginning three years

after issuance. The

bond offering was priced

with

a U.S. dollar fixed-rate coupon of

8.75%. Interest is payable semi-annually in arrears in

July and January

of each year.

In November 2024, we completed a $25

million tap issue under our senior

unsecured bond

issue priced at 102.00% of par value. The bond is trading on the Oslo Børs.

On July

25, 2024,

we refinanced

the outstanding

balance of

two loan

facilities with

Nordea Bank

amounting

to $167.3 million and

originally maturing in

October 2027 and June

2028 with a facility

of the same amount

and maturity extended to July 2030.

44

On October 18,

2024, we refinanced the

outstanding balance of a

loan facility with Danish

Ship Finance,

amounting to

$80.2 million,

originally maturing

in April

2028, with a

facility of

the same amount

and maturity

extended to April 2031.

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

12, 2025, each

Warrant entitles the

holder to purchase 1.09653

shares of common stock

plus the Bonus

Share Fraction adjusted to 0.54827 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, 6,397,117

Warrants have been exercised and 9,844,781 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

(Operations Finance). Mr. Ioannis Zafirakis, the

Company’s current Chief Financial

Officer, will continue to

serve in the Co-Chief Financial Officer (Strategic Finance) position with

Ms. Dede.

45

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.

In

March

2022,

we

took

delivery

of

Florida,

a

Japanese

new-building

Capesize

dry

bulk

vessel

of

approximately 181,500 dwt,

which we agreed

to acquire from an

unaffiliated third party in

December 2020.

In February

2022, we

took delivery

of Leonidas

P.C. (ex Magnolia), a

2011 built Kamsarmax

dry bulk

vessel

of 82,165 dwt, which we agreed to acquire from an unaffiliated third party in July

2021.

Vessel disposals

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.

In June 2022, we

sold to OceanPal Inc.,

or OceanPal, a related party

company, the

vessel Baltimore, for

a sale price of $22.0 million before commissions, of which $4.4 million was paid in cash and

$17.6 million

through

25,000

Series

D

Convertible

Preferred

shares.

The

vessel

was

delivered

to

OceanPal

on

September 20, 2022.

46

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 39

vessels of

which 37

in operation,

owned and

chartered-

in, having

a combined carrying

capacity of

4.1 million dead weight

tons, or

dwt, and

a weighted average

age of

11.4 years.

We also

have two

Kamsarmax vessels under

construction with expected

deliveries in

2027 and 2028.

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, owned and

chartered-in, consisting

of nine

Ultramax, seven

Panamax, six

Kamsarmax, five

Post-Panamax, nine

Capesize and

four Newcastlemax

vessels, having

a combined

carrying capacity

of approximately

4.5 million

dwt and a

weighted average

age

of 10.5 years.

As

of

December

31,

2022,

we

had

a

fleet

of

42

dry

bulk

carriers,

consisting

of

eight

Ultramax,

eight

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

Newcastlemax vessels,

having

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

As of

December 31,

2022, the

Company had

agreed to

acquire a

2016 built

Ultramax dry

bulk vessel

of

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

During

2024,

2023

and

2022,

we

had

a

fleet

utilization

of

99.7%,

99.7%

and

98.9%,

respectively,

our

vessels achieved daily

time charter equivalent

rates of

$15,267, $16,713 and

$22,735, respectively,

and

we generated revenues of $228.2 million, $262.1 million and $290.0

million, respectively.

We

operate

our

vessels

worldwide,

in

markets

that

have

historically

exhibited

seasonal

variations

in

demand and,

as a

result, in

charter hire

rates. The

dry bulk

carrier market

is typically

stronger in the

fall

and winter months in

anticipation of increased

consumption of coal and

other raw materials

in the northern

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

in these months tend to

disrupt vessel scheduling

and supplies of certain

commodities. This seasonality

has a limited direct

impact

on our operating

results as we

charter our vessels to

customers pursuant to medium-term

and long-term

time charter agreements.

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

47

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

controlled

by

our

CEO

Mrs.

Semiramis Paliou,

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

“General

and

Administrative

expenses”

in

our

statement

of

income.

The

terms

of

this

relationship

are

currently governed by a Brokerage Services Agreement dated

February 25, 2025.

The following table presents certain information

concerning the dry bulk carriers in

our fleet, as of the date

of this annual report.

48

Fleet Employment (As of March 19, 2025)

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

16,500

5.00%

Bulk Trading SA

6-May-24

1/Aug/2025 - 30/Sep/2025

2017 60,456

2

DSI Pollux

A

14,000

4.75%

Cargill Ocean Transportation

(Singapore) Pte. Ltd.

28-Dec-23

20/Aug/2025 - 20/Oct/2025

2015 60,446

3

DSI Pyxis

A

13,100

5.00%

Stone Shipping Ltd

8-Nov-24

20/Feb/2026 - 20/Apr/2026

2018 60,362

4

DSI Polaris

A

15,400

5.00%

Stone Shipping Ltd

20-Jul-24

1/Jun/2025 - 15/Aug/2025

2018 60,404

5

DSI Pegasus

A

15,250

4.75%

Cargill Ocean Transportation

(Singapore) Pte. Ltd

5-Sep-24

1/Jun/2025 - 1/Aug/2025

2015 60,508

6

DSI Aquarius

B

13,300

5.00%

Bunge SA, Geneva

6-Dec-24

6/Oct/2025 - 21/Dec/2025

2016 60,309

7

DSI Aquila

B

12,500

5.00%

Western Bulk Carriers AS

11-Nov-23

21-Jan-25

2015 60,309

12,250

5.00%

21-Jan-25

23/Jun/2025 - 8/Aug/2025

1

8

DSI Altair

B

15,750

5.00%

Propel Shipping Pte. Ltd.

28-Sep-24

1/Nov/2025 - 31/Dec/2025

2016 60,309

9

DSI Andromeda

B

13,500

5.00%

Bunge SA, Geneva

27-Nov-23

28-Mar-25

2,3

2016 60,309

6 Panamax Bulk Carriers

10

LETO

16,000

5.00%

ASL Bulk Shipping Limited

3-May-24

9-Mar-25

4

2010 81,297

11

SELINA

C

10,500

5.00%

Raffles Shipping International Pte.

Ltd.

17-Oct-24

10-Apr-25

3

2010 75,700

12

MAERA

C

8,400

5.00%

China Resource Chartering Limited

15-Dec-24

20/Sep/2025-20/Nov/2025

2013 75,403

13

ISMENE

12,650

5.00%

Paralos Shipping Pte., Ltd.

13-Sep-23

15/Apr/2025 - 30/Jun/2025

2013 77,901

14

CRYSTALIA

D

13,900

5.00%

Louis Dreyfus Company Freight

Asia Pte. Ltd.

4-May-24

4/Feb/2026 - 4/Jun/2026

2014 77,525

15

ATALANDI

D

14,600

4.75%

Cargill International SA, Geveva

20-Jul-24

1/Jun/2025 - 31/Jul/2025

2014 77,529

6 Kamsarmax Bulk Carriers

16

MAIA

E

11,600

5.00%

Paralos Shipping Pte. Ltd.

9-Dec-24

1/Nov/2025 - 31/Dec/2025

2009 82,193

17

MYRSINI

E

17,100

5.00%

Cobelfret S.A. Luxembourg

25-Jun-24

9-Feb-25

5

2010 82,117

13,000

4.75%

Cargill International SA, Geneva

26-Feb-25

1/Jan/2026 - 28/Feb/2026

18

MEDUSA

E

14,250

5.00%

ASL Bulk Shipping Limited

14-May-23

21-Feb-25

6

2010 82,194

13,000

4.75%

Cargill International SA, Geneva

16-Mar-25

15/May/2026 - 15/Jul/2026

19

MYRTO

E

12,000

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

23-Dec-24

1/Mar/2026 - 15/May/2026

2013 82,131

20

ASTARTE

14,000

5.00%

Paralos Shipping Pte. Ltd.

19-Aug-24

15/Jul/2025 - 15/Sep/2025

2013 81,513

21

LEONIDAS P. C.

17,000

5.00%

Ming Wah International Shipping

Company Limited

22-Feb-24

20/Aug/2025 - 20/Oct/2025

2011 82,165

5 Post-Panamax Bulk Carriers

22

ALCMENE

6,000

5.00%

Lestari Shipping Pte Ltd

28-Dec-24

16-Jan-25

49

2010 93,193

2,000

5.00%

Pan Ocean Co., Ltd.

16-Jan-25

8-Mar-25

7

23

AMPHITRITE

F

15,000

5.00%

Cobelfret S.A., Luxembourg

13-Jan-24

8-Jan-25

8

2012 98,697

12,100

5.00%

8-Jan-25

1/Jan/2026 - 15/Mar/2026

9

24

POLYMNIA

F

17,500

5.00%

Reachy Shipping (SGP) Pte. Ltd.

8-Jun-24

1/Aug/2025 - 30/Sept/2025

2012 98,704

25

ELECTRA

G

14,000

4.75%

Aquavita International S.A.

3-Jun-24

15/Oct/2025 - 31/Dec/2025

2013 87,150

26

PHAIDRA

G

12,000

4.75%

Aquavita International S.A.

12-Oct-24

1/May/2025 - 15/Jul/2025

2013 87,146

8 Capesize Bulk Carriers

27

SEMIRIO

H

14,150

5.00%

Solebay Shipping Cape Company

Limited, Hong Kong

18-Aug-23

11-Feb-25

2007 174,261

16,650

5.00%

11-Feb-25

15/Feb/2026 - 15/Apr/2026

28

NEW YORK

H

16,000

5.00%

STX Green Logis Ltd

30-Nov-24

11-Jan-25

2010 177,773

17,600

5.00%

SwissMarine Pte. Ltd., Singapore

11-Jan-25

15/Jan/2026 - 30/Mar/2026

10,11

29

SEATTLE

I

17,500

5.00%

Solebay Shipping Cape Company

Limited, Hong Kong

1-Oct-23

15/Jul/2025 - 30/Sep/2025

2011 179,362

30

P.

S. PALIOS

I

27,150

5.00%

Bohai Shipping (HEBEI) Co., Ltd

7-May-24

1/Nov/2025 - 31/Dec/2025

2013 179,134

31

G. P. ZAFIRAKIS

J

26,800

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

16-Sep-24

16/Aug/2026 - 16/Nov/2026

2014 179,492

32

SANTA BARBARA

J

22,000

5.00%

Mitsui O.S.K. Lines, Ltd.

27-Dec-24

20/Oct/2025 - 20/Dec/2025

12

2015 179,426

33

NEW ORLEANS

20,000

5.00%

Kawasaki Kisen Kaisha, Ltd.

7-Dec-23

15/Aug/2025 - 31/Oct/2025

12

2015 180,960

34

FLORIDA

25,900

5.00%

Bunge S.A., Geneva

29-Mar-22

29/Jan/2027 - 29/May/2027

2

2022 182,063

4 Newcastlemax Bulk Carriers

35

LOS ANGELES

K

28,700

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

20-Jul-24

1/Oct/2025 - 15/Dec/2025

2012 206,104

36

PHILADELPHIA

K

22,500

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

4-Feb-24

20/Apr/2025 - 20/Jul/2025

2012 206,040

37

SAN FRANCISCO

L

22,000

5.00%

SwissMarine Pte. Ltd., Singapore

18-Feb-23

1-Mar-25

2017 208,006

26,000

5.00%

1-Mar-25

25/Oct/2026 - 25/Dec/2026

38

NEWPORT NEWS

L

20,000

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

20-Sep-23

15/Mar/2025 - 10/Jun/2025

3

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.

1Charterers will compensate the Owners at a rate

of 115% of the average Baltic Tess 58 Supramax Index as published by the Baltic Exchange on a daily

basis or double the vessel’s present charter party rate, whichever

is higher, for the excess period commencing from January 10, 2025 until

the actual

redelivery date.

2Bareboat chartered-in for a period of ten years.

3Based on latest information.

4Currently without an active charterparty.

5Vessel on scheduled drydocking from February 9, 2025 until February

26, 2025.

6Vessel on scheduled drydocking from February 21, 2025 until March

16, 2025.

7Vessel has been sold and it is delivered to her new Owners on

March 13, 2025.

8The charter rate was US$12,250 per day for

the first thirty (30) days of the charter period.

50

9The charter rate will be US$8,750 per day for

the first fifty (50) days of the charter period.

10The charter rate will be US$6,300 per

day for the first trip of the charter period.

11Vessel currently off hire for drydocking.

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

Our Customers

Our customers include

regional and international

companies,

mainly with concentrations

below 10% of

our

gross revenues. During 2024,

only one of our

charterers accounted for 11% of our

revenues.

During 2023,

one of our

charterers accounted

for 13% of

our revenues and

during 2022,

two of our

charterers accounted

for 34% of our revenues,

in aggregate.

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

2024, we

paid commissions that

ranged from

4.75% to

5.0% of

the total

daily

charter hire

rate of

each charter

to unaffiliated

ship brokers

and to

in-house brokers

associated with

the

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

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

market

demand,

seek

to

adjust

the

charter

hire

periods

for

our

vessels

according

to

prevailing

market

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

we fix some

of our vessels on long-term time

charters. Currently, the

majority of our vessels are employed on

short to

medium-term time

charters, which

provides us

with flexibility in

responding to

market developments.

We

continuously evaluate our balance of

short-

and long-term charters and extend

or reduce the charter hire

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

the dry bulk shipping industry.

Charter Hire Rates

Charter hire

rates fluctuate

by varying

degrees among

dry bulk

carrier size

categories. The

volume and

pattern of

trade in

a small

number of

commodities

(major bulks)

affect demand

for larger

vessels. Therefore,

charter rates

and vessel

values of

larger vessels

often show

greater volatility. Conversely, trade

in a

greater

number

of

commodities (minor

bulks)

drives

demand

for

smaller

dry

bulk

carriers.

Accordingly,

charter

rates and vessel values for those vessels are usually subject

to less volatility.

Charter

hire

rates

paid

for

dry

bulk

carriers

are

primarily

a

function

of

the

underlying

balance

between

vessel supply and demand, although at

times other factors may play a

role. Furthermore, the pattern seen

in

charter

rates

is

broadly

mirrored

across

the

different

charter

types

and

the

different

dry

bulk

carrier

categories. In the

time charter market,

rates vary depending

on the length

of the charter

period and vessel-

specific factors such as age, speed and fuel consumption.

In the

voyage charter

market, rates

are, among

other things,

influenced by

cargo size,

commodity,

port

dues and canal transit fees, as well

as commencement and termination

regions. In general, a larger

cargo

size is quoted

at a lower

rate per ton

than a smaller

cargo size.

Routes with

costly ports or

canals generally

command higher rates

than routes

with low port

dues and

no canals to

transit. Voyages

with a

load port

within a

region that

includes ports

where vessels

usually discharge

cargo or

a discharge

port within

a region

with

ports

where

vessels

load

cargo

also

are

generally

quoted

at

lower

rates,

because

such

voyages

generally increase vessel utilization

by reducing the unloaded portion

(or ballast leg) that is

included in the

calculation of the return charter to a loading area.

51

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 2024, the BDI ranged from a low of 976 to a high of 2,419 and closed

at 1,635 on March 20, 2025.

The Dry Bulk Shipping Industry

The

global

dry

bulk

carrier

fleet

could

be

divided

into

seven

categories

based

on

a

vessel's

carrying

capacity. These categories consist of:

●

Very

Large Ore

Carriers

.

Very

large ore

carriers, or

VLOCs, have

a carrying

capacity of

more

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

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

●

Capesize

.

Capesize vessels

have a

carrying capacity

of 110,000

-199,999 dwt.

Only the

largest

ports around the

world possess the

infrastructure to accommodate

vessels of this

size. Capesize

vessels are

primarily used

to transport

iron ore

or coal

and, to

a much

lesser extent,

grains, primarily

on long-haul routes.

●

Post-Panamax

.

Post-Panamax vessels

have a

carrying capacity

of 80,000-109,999

dwt. These

vessels tend

to have

a shallower

draft and

larger beam

than a

standard Panamax

vessel with

a

higher

cargo

capacity.

These

vessels

have

been

designed

specifically

for

loading

high

cubic

cargoes from draught restricted ports, although they cannot

transit the Panama Canal.

●

Panamax

.

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

coal,

iron ore,

grains, and,

to

a

lesser extent,

minor

bulks, including

steel products,

cement and

fertilizers.

Panamax

vessels

are

able

to

pass

through

the

Panama

Canal,

making

them

more

versatile than

larger vessels

with regard

to

accessing different

trade routes.

Most Panamax

and

Post-Panamax

vessels

are

“gearless,”

and

therefore

must

be

served

by

shore-based

cargo

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

vessels with onboard cranes, a

feature

that

enhances

trading

flexibility

and

enables

operation

in

ports

which

have

poor

infrastructure in terms of loading and unloading facilities.

●

Ultramax

is

the

largest

class

before

Panamax

and

is

the

newer

form

of

the

smaller

Supramax with a

maximum length

of

200 meters

and capacity

that ranges

from

60,000 dwt

and

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

investment

for

Charterers

and

Shipowners

due

to

its

higher

cargo

carrying

capacity

and

better

bunker

efficiency.

Ultramax

class

bulk

carriers

have

5

cargo

holds.

are

fitted

with

4

cranes

and

usually are equipped with grabs allowing

them to call more ports with no such

facilities giving them

more versatility.

●

Handymax/Supramax

.

Handymax vessels have a carrying

capacity of 40,000-59,999 dwt.

These

vessels

operate

in

a

large

number

of

geographically

dispersed

global

trade

routes,

carrying

primarily grains and minor

bulks. Within the Handymax category

there is also a

sub-sector known

as Supramax. Supramax

bulk carriers are

ships between 50,000

to 59,999 dwt,

normally offering

cargo

loading

and

unloading

flexibility

with

on-board

cranes,

or

“gear,”

while

at

the

same

time

possessing the cargo carrying capability approaching conventional

Panamax bulk carriers.

52

●

Handysize

.

Handysize vessels have

a carrying capacity

of up

to 39,999 dwt.

These vessels are

primarily

involved

in

carrying

minor

bulk

cargoes.

Increasingly,

ships

of

this

type

operate

within

regional

trading

routes, and

may

serve

as

trans-shipment

feeders

for

larger vessels.

Handysize

vessels are well

suited for small

ports with length

and draft restrictions.

Their cargo gear

enables

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

Other size categories occur in regional trade,

such as Kamsarmax, with a maximum length

of 229 meters,

the maximum

length that can

load in

the port

of Kamsar

in the

Republic of Guinea.

Other terms

such as

Seawaymax, Setouchmax, Dunkirkmax, and Newcastlemax also appear

in regional trade.

The supply

of dry

bulk carriers

is dependent

on the

delivery of

new vessels

and the

removal of

vessels

from the global fleet,

either through scrapping

or loss. The level

of scrapping activity

is generally a function

of scrapping prices

in relation to current

and prospective charter market

conditions, as well as

operating,

repair

and

survey

costs.

The

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

2024 generally were

lower as

compared to 2023.

Consistent with these

trends

were the market

values of our

dry bulk carriers.

As charter rates

and vessel

values decreased during

2024,

and

continued to

decrease in

early 2025,

there can

be no

assurance as

to how

long charter

rates and

vessel values will remain at their current levels or whether they will decrease or improve to any significant

degree in the near future.

Competition

Our business

fluctuates in

line with

the main

patterns of

trade of

the major

dry bulk

cargoes and

varies

according to

changes in

the supply

and demand

for these

items. We

operate in

markets that

are highly

competitive and

based primarily

on supply

and demand.

We compete

for charters

on the

basis of

price,

vessel

location,

size,

age

and

condition

of

the

vessel,

as

well

as

on

our

reputation

as

an

owner

and

operator. We

compete with other owners of dry bulk carriers

in the Panamax, Post-Panamax and smaller

class

sectors and

with owners

of Capesize

and Newcastlemax

dry

bulk carriers.

Ownership of

dry

bulk

carriers is highly fragmented.

We believe that we possess a number

of strengths that provide us

with a competitive advantage in

the dry

bulk shipping industry:

●

We own

a modern, high

quality fleet of

dry bulk carriers

.

We believe that

owning a modern,

high

quality fleet

reduces operating

costs, improves

safety and

provides us

with a

competitive advantage

in securing favorable time charters.

We maintain the

quality of our vessels by

carrying out regular

inspections, both while

in port and

at sea, and

adopting a comprehensive

maintenance program

for

each vessel.

53

●

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

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

2024 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

54

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.

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,

55

or

“PCBs”)

are

also

prohibited.

We

believe

that

all

our

vessels

are

currently

compliant

in

all

material

respects with these regulations.

The Marine Environment Protection Committee, or

“MEPC”, adopted amendments to Annex VI

regarding

emissions of

sulfur oxide,

nitrogen oxide,

particulate matter

and ozone

depleting substances,

which entered

into force on

July 1, 2010.

The amended Annex VI

seeks to further

reduce air pollution by,

among other

things, implementing

a progressive

reduction of

the amount

of sulfur

contained in

any fuel

oil used

on board

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

0.5% m/m sulfur

oxide emissions limit

(reduced from 3.50%)

starting from January

1, 2020.

This limitation can

be met by

using

low-sulfur compliant fuel

oil, alternative

fuels,

or

certain exhaust

gas cleaning

systems. Ships

are

now required

to obtain

bunker delivery

notes and

International Air

Pollution Prevention (“IAPP”)

Certificates

from their

flag states

that specify

sulfur content.

Additionally,

at MEPC

73, amendments

to Annex

VI to

prohibit the carriage of bunkers

above 0.5% sulfur on ships were

adopted and took effect March

1, 2020,

with the exception of

vessels fitted with exhaust

gas cleaning equipment

(“scrubbers”) which can

carry fuel

of

higher sulfur

content.

These regulations

subject ocean-going

vessels to

stringent emissions

controls

and may cause us to incur substantial costs.

Sulfur

content

standards

are

even

stricter

within

certain

“Emission

Control

Areas,”

or (“ECAs”).

As

of

January 1, 2015,

ships operating

within an

ECA were

not permitted

to use fuel

with sulfur content

in excess

of 0.1%

m/m. Amended Annex

VI establishes procedures

for designating new

ECAs. Currently,

the IMO

has designated

four ECAs,

including specified

portions of

the Baltic

Sea area,

Mediterranean Sea

area,

North Sea area, North American area and United States Caribbean

area. The Mediterranean

Sea became

an ECA

on May

1, 2024,

and compliance obligations

will begin

May 1,

2025. 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 North-

East

Atlantic

Ocean,

which were

adopted

in

draft

amendments

to

Annex

IV

that

will

enter

into

force

in

March 2026. 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.

Tier

III

requirements could apply

to areas that

will be

designated for Tier

III NOx in

the future.

At MEPC 70

and

MEPC 71, the MEPC approved the North

Sea and Baltic Sea as ECAs

for nitrogen oxide for ships built on

or

after

January

1,

2021.

For

the

moment,

this

regulation

relates

to

new

building

vessels

and

has

no

retroactive

application

to

existing

fleet.

The EPA

promulgated

equivalent

(and

in

some

senses

stricter)

emissions standards in 2010.

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

required to incur additional operating or other costs.

As determined

at the

MEPC 70,

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.

As of January

1, 2013, MARPOL

made mandatory certain

measures relating to

energy efficiency for

ships.

All

ships

are

now

required

to

develop

and

implement

a

Ship

Energy

Efficiency

Management

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

with minimum energy efficiency levels

per capacity mile

as defined by

the Energy Efficiency

Design Index (“EEDI”).

Under these measures,

by

56

2025, all new ships built will be 30% more energy

efficient than those built in 2014. Additionally, MEPC 75

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

“phase

3” requirements

from April

1, 2022 to

January 1,

2025 for

several ship

types, including

gas carriers,

general

cargo ships, and LNG carriers.

Additionally,

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. The Mediterranean Sea became an ECA on

May 1, 2024,

and compliance obligations will begin

May 1, 2025. 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,

which

must

be

completed at the

latest by January

1, 2026. This

review commenced at

MEPC 82 in

Fall 2024 and

there

will be no immediate changes to

the CII framework, including correction factors

and voyage adjustments,

before the review is completed.

We

may

incur

costs

to

comply

with

these

revised

standards.

Additional

or

new

conventions,

laws

and

regulations may be adopted that could require the

installation of expensive emission control systems and

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

financial condition.

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

57

vessels safely and describing procedures

for responding to emergencies. Through

strong leadership and

a

disciplined,

clearly

documented

management

system,

the

Company

promotes

the

concept

of

HSSE

(Health, Safety,

Security and

Environmental) excellence

at all

levels in

the organisation.

This concept

is

achieved

by consistent

measurement and

feedback of

the

Company’s Management

System in

order to

generate

continuous

and

sustainable

improvement

in

Health,

Safety,

Security,

and

Quality

and

Environmental

(including

Energy

Efficiency)

(HSSQE)

management

processes. The

failure

of

a

vessel

owner or bareboat

charterer to

comply with

the ISM

Code may

subject such

party to

increased liability, may

decrease available insurance coverage for the affected vessels and

may result in a denial of access to, or

detention in, certain ports.

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

operate. This

certificate evidences

compliance by

a vessel’s management

with the

ISM Code

requirements

for a

safety management

system. No

vessel can

obtain a

safety management

certificate unless

its manager

has been

awarded a document

of compliance, issued

by each flag

state, under the

ISM Code. We

have

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

our vessels

for which

the certificates

are required by

the IMO.

The documents of

compliance and safety

management certificate are renewed as required.

Regulation II-1/3-10

of

the

SOLAS Convention

governs ship

construction and

stipulates that

ships

over

150 meters

in length

must have

adequate strength,

integrity and

stability to

minimize risk

of loss

or pollution.

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

with July 1,

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

The SOLAS Convention regulation II-1/3-10

on goal-based

ship construction

standards for

bulk carriers

and oil

tankers, which

entered into

force on

January 1, 2012, requires

that all oil tankers

and bulk carriers of

150 meters in length

and above, for which

the building

contract is

placed on

or after

July 1,

2016, satisfy

applicable structural

requirements conforming

to

the

functional

requirements

of

the

International

Goal-based

Ship

Construction

Standards

for

Bulk

Carriers and Oil Tankers (“GBS Standards”).

Amendments to

the SOLAS Convention

Chapter VII

apply to

vessels transporting dangerous

goods and

require those

vessels be

in

compliance with

the

International Maritime

Dangerous Goods

Code (“IMDG

Code”). Effective

January 1, 2018,

the IMDG

Code includes (1)

updates to the

provisions for radioactive

material, reflecting

the

latest provisions

from the

International Atomic

Energy Agency,

(2) new

marking,

packing

and

classification

requirements

for

dangerous

goods,

and

(3)

new

mandatory

training

requirements. Amendments which took

effect on January

1, 2020 also reflect

the latest material from

the

UN Recommendations on the Transport of Dangerous

Goods, including (1) new provisions

regarding IMO

type 9 tank, (2) new abbreviations

for segregation groups, and

(3) special provisions for carriage

of lithium

batteries and of vehicles powered by flammable liquid or

gas. Additional amendments came into force on

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

58

the two

poles. It

also includes mandatory

measures regarding

safety and pollution

prevention as

well as

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

after

January

1,

2018,

ships

constructed

before

January

1,

2017

are

required

to

meet

the

relevant

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

Furthermore, recent action by the

IMO’s Maritime Safety Committee and United

States agencies indicates

that cybersecurity regulations for the maritime industry are

likely to be further developed in the near future

in an

attempt to

combat cybersecurity

threats. By

IMO resolution,

administrations are

encouraged

to ensure

that cyber-risk management systems are incorporated by ship-owners

and managers by their first annual

Document of Compliance audit after January

1, 2021. In February 2021, the

U.S. Coast Guard published

guidance on addressing

cyber risks in

a vessel’s safety

management system.

This might

cause companies

to

create

additional

procedures

for

monitoring

cybersecurity,

which

could

require

additional

expenses

and/or capital expenditures.

The impact of future regulations is hard to predict at this time.

In June

2022, SOLAS

also set

out new

amendments that

took effect

on January

1, 2024,

which include

new

requirements for:

(1)

the

design for

safe

mooring operations,

(2)

the

Global

Maritime

Distress and

Safety System (“GMDSS”),

(3) watertight integrity, (4) watertight doors

on cargo ships,

(5) fault-isolation of

fire detection

systems, (6)

life-saving appliances, and

(7) safety

of ships

using LNG

as fuel.

These new

requirements may impact the cost of our operations.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions

that impose liability for pollution in

international waters

and

the

territorial

waters

of

the

signatories

to

such

conventions.

For

example,

the

IMO

adopted

an

International

Convention

for

the

Control

and

Management

of

Ships’

Ballast

Water

and

Sediments, (the

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

The BWM

Convention requires ships to manage their

ballast water to remove, render harmless,

or avoid the uptake

or discharge of

new or invasive

aquatic organisms

and pathogens within

ballast water and

sediments.

The

BWM

Convention’s

implementing

regulations

call

for

a

phased

introduction

of

mandatory

ballast

water

exchange requirements, to

be replaced in

time with mandatory

concentration limits, and

require all ships

to carry a ballast water record book and an international ballast water

management certificate.

On December 4, 2013, the

IMO Assembly passed a resolution

revising the application dates of the

BWM

Convention so that

the dates are

triggered by the

entry into force

date and not

the dates originally

in the

BWM

Convention.

This, in

effect,

makes

all

vessels delivered

before the

entry into

force date

“existing

vessels” and allows

for the installation

of ballast water

management systems on

such vessels at

the first

International Oil Pollution Prevention (“IOPP”) renewal survey

following entry into force of the convention.

The

MEPC

maintains

guidelines for

approval

of ballast

water

management systems

(G8).

At

MEPC 72

amendments

were

adopted

to

extend

the

date

existing

vessels

are

subject

to

certain

ballast

water

standards. 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

59

agreed that it

should be permitted to

use ballast tanks for

temporary storage of treated

sewage and grey

water.

MEPC 79 also

established that ships

are expected to

return to D-2

compliance after experiencing

challenging uptake water and bypassing a BWM system should only

be used as a last resort.

In July 2023,

MEPC 80 approved

a plan

for a comprehensive

review of

the BWM Convention.

over the

the corresponding development of

a package of

amendments to the

Convention. MEPC

80 also adopted further amendments relating to Appendix

II of the BWM Convention concerning

the form

of the Ballast Water Record Book, which are

expected to enter into force in February 2025. A protocol for

ballast water compliance monitoring devices

and unified interpretation of

the form of the BWM Convention

certificate were

also adopted.

In

March 2024,

MEPC 81

adopted amendments

to

the

BWM Convention

concerning the

use of

Ballast Water Record

Books in

electronic form,

which are

expected to

enter into

force

in October 2025. Pursuant to the ongoing review, in Fall 2024, MEPC 82 approved the 2024 Guidance on

ballast water

record keeping

and reporting

and the

2024 Guidance

for Administrations

on the

type approval

process for ballast water management systems to support harmonized

evaluation by Administrations.

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.

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

60

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

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.

61

Under OPA,

vessel owners

and operators

are “responsible

parties” and

are jointly,

severally and

strictly

liable (unless the

spill results solely

from the act or

omission of a

third party, an act of God

or an act

of war)

for

all

containment

and

clean-up

costs

and

other

damages

arising

from

discharges

or

threatened

discharges of

oil from their

vessels, including bunkers

(fuel).

OPA

defines these other

damages broadly

to include:

(i)

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

related assessment costs;

(ii)

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

real and personal property;

(iii)

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

or lost;

(iv)

net

loss of

taxes, royalties,

rents, fees

or net

profit revenues

resulting from

injury,

destruction or

loss of real or personal property, or natural resources;

(v)

lost profits

or impairment

of earning

capacity due

to injury,

destruction or

loss of

real or

personal

property or natural resources; and

(vi)

net

cost

of

increased or

additional

public services

necessitated by

removal

activities

following a

discharge of oil, such as protection from fire,

safety or health hazards, and loss of subsistence

use

of natural resources.

OPA

contains

statutory

caps

on

liability

and

damages;

such

caps

do

not

apply

to

direct

cleanup

costs.

Effective November 12,

2019, the

USCG adjusted

the limits

of OPA

liability for

non-tank vessels,

edible oil

tank vessels,

and any

oil spill

response vessels,

to the

greater of

$1,200 per

gross ton

or $997,100

(subject to periodic

adjustment for

inflation). On December

23, 2022,

the USCG issued

a final rule

to adjust

the limitation of

liability under the OPA.

Effective March 23,

2022, the new adjusted

limits of OPA

liability

for non-tank

vessels, edible oil

tank vessels,

and any

oil spill

response vessels,

to the

greater of

$1,300

per gross

ton or

$1,076,000 (subject

to periodic

adjustment for

inflation).These limits

of liability

do not

apply

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

construction or

operating

regulation

by

a

responsible

party

(or

its

agent,

employee

or

a

person

acting

pursuant

to

a

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

liability similarly does not apply if the responsible party fails or

refuses to (i) report the incident as required

by law where the responsible party knows or

has reason to know of the incident; (ii)

reasonably cooperate

and assist

as requested

in connection

with oil

removal activities;

or (iii)

without sufficient

cause, comply

with an order issued under the Federal

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

High Seas Act.

CERCLA contains

a similar

liability regime

whereby owners

and operators

of vessels

are liable

for cleanup,

removal and remedial costs, as well as damages for

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

including

the

reasonable

costs

associated

with

assessing the

same,

and

health

assessments

or

health

effects studies. There is no liability

if the discharge of a hazardous

substance results solely from the

act or

omission of a third party, an act of God

or an act of war. Liability under CERCLA

is limited to the greater

of

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

a hazardous substance as cargo and the greater of

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

person liable for the total cost

of response and damages) if

the release or threat of release

of a hazardous

substance

resulted

from

willful

misconduct

or

negligence,

or

the

primary

cause

of

the

release

was

a

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

The limitation on liability

also does

not apply

if the

responsible person

fails or

refused to

provide all

reasonable cooperation

and

assistance as requested in connection with response activities where

the vessel is subject to OPA.

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

62

USCG evidence of

financial responsibility sufficient to

meet the maximum

amount of liability to

which the

particular

responsible

person

may

be

subject.

Vessel

owners

and

operators

may

satisfy

their

financial

responsibility obligations by providing a proof of insurance, a

surety bond, qualification as a self-insurer or

a

guarantee.

We comply

and

plan

to

comply going

forward

with

the

USCG’s

financial

responsibility

regulations by providing applicable certificates of financial responsibility.

The 2010

Deepwater Horizon

oil spill

in the

Gulf of

Mexico resulted

in additional

regulatory initiatives

or

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

and gas drilling,

and

a

pilot

inspection

program

for

offshore

facilities.

However,

several

of

these

initiatives

and

regulations have

been

or

may

be

revised.

For

example,

the

U.S.

Bureau

of

Safety

and

Environmental Enforcement’s

(“BSEE”)

revised

Production

Safety

Systems

Rule

(“PSSR”),

effective

December 27,

2018, modified

and relaxed

certain environmental

and safety

protections under

the 2016

PSSR.

Additionally, in August

2023, the

BSEE released

a final

Well Control

Rule which

strengthens testing

and performance requirements, and may affect offshore drilling operations.

In January 2021, the

Biden Administration issued an executive

order temporarily blocking new leases

for

oil

and

gas

drilling in

federal

waters,

but

ultimately,

the

order

was rendered

ineffective

by

a

permanent

injunction issued

by a

Louisiana court.

After being

blocked by

the courts,

in September

2023, the

Biden

administration announced a scaled back offshore oil drilling plan, including just three oil lease sales in the

Gulf of Mexico.

In December 2024,

the Biden Administration

also gave approval

for the sales

of oil and

gas

leases in Alaska. On January 6, 2025, the Biden Administration announced a ban on

new offshore oil and

gas drilling in more than 625 million acres of U.S. waters on the Atlantic and Pacific coasts and in Alaska,

but Louisiana-led states and

fossil fuel groups are

challenging the ban. On

January 21, 2025, the

Trump

Administration issued

an executive

order revoking

this ban,

although this

order is

being challenged

in court.

Additionally,

the Trump

Administration has

proposed leasing

new sections

of U.S.

waters to

oil and

gas

companies for offshore drilling.

With

these

rapid

changes,

compliance

with

any

new

requirements

of

OPA and

future

legislation

or

regulations applicable

to the

operation of

our vessels could

impact the

cost of

our operations

and adversely

affect our business.

OPA

specifically permits individual

states to

impose their own

liability regimes with

regard to oil

pollution

incidents

occurring

within

their

boundaries,

provided

they

accept,

at

a

minimum,

the

levels

of

liability

established

under

OPA

and

some

states

have

enacted

legislation

providing

for

unlimited

liability

for

oil

spills.

Many U.S. states that border a

navigable waterway have enacted

environmental pollution laws that

impose

strict liability

on a

person

for removal

costs

and damages

resulting from

a

discharge of

oil

or

a

release of a

hazardous substance.

These laws may be

more stringent than U.S.

federal law.

Moreover,

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

waters,

although in

some

cases, states

which have

enacted this

type

of legislation

have not

yet issued

implementing regulations defining vessel owners’

responsibilities under these laws.

The Company intends

to comply with all applicable state regulations in the ports where

the Company’s vessels call.

We currently maintain pollution

liability coverage insurance

in the amount

of $1 billion per

incident for each

of our

vessels. If

the damages from

a catastrophic spill

were to

exceed our

insurance coverage, it

could

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

Other United States Environmental Initiatives

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

the EPA to

promulgate

standards

applicable

to

emissions

of

volatile

organic

compounds

and

other

air

contaminants.

The

CAA

requires

states

to

adopt

State

Implementation

Plans,

or

SIPs,

some

of

which

regulate emissions resulting from vessel loading and unloading operations

which may affect our vessels.

63

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.

In 2015, the EPA

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

thereby

expanding federal authority

under the CWA.

Following litigation on

the revised WOTUS rule,

in December

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

limited definition of WOTUS. In 2019

and

2020,

the

agencies repealed

the

prior

WOTUS Rule

and

promulgated the

Navigable Waters

Protection

Rule

(“NWPR”)

which significantly

reduced the

scope and

oversight of

EPA

and

the

Department of

the

Army

in

traditionally

non

navigable

waterways.

On

August

30,

2021,

a

federal

district

court

in

Arizona

vacated the NWPR and directed the agencies to replace the rule with the pre-2015 definition.

. In January

2023, the revised WOTUS rule was codified in place of the vacated NWPR. On May

25, 2023, the United

States Supreme Court ruled in

the case Sackett v. EPA that only wetlands and permanent bodies of water

with a "continuous

surface connection"

to "traditional

interstate navigable

waters" are covered

by the

CWA,

further narrowing the application

of the WOTUS rule.

On August 2023, the

EPA and the Department of the

Army

issued

the

final

WOTUS

rule,

effective

September

8,

2023,

that

largely

reinstated

the

pre-2015

definition and applied the

Sackett

ruling.

The EPA and the

USCG have

also enacted

rules relating

to ballast

water discharge,

compliance with

which

requires the

installation of

equipment on

our vessels

to treat

ballast water

before it

is discharged

or the

implementation of other port

facility disposal arrangements or

procedures at potentially substantial costs,

and/or otherwise restrict our

vessels from entering U.S.

Waters.

The EPA will regulate these ballast water

discharges and other discharges incidental to the normal operation

of certain vessels within United States

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

4,

2018

and

replaces

the

2013

Vessel

General

Permit

(“VGP”)

program

(which

authorizes

discharges

incidental to operations

of commercial

vessels and

contains numeric

ballast water

discharge limits

for most

vessels

to

reduce

the

risk

of

invasive

species

in

U.S.

waters,

stringent

requirements

for

exhaust

gas

scrubbers, and

requirements for

the use

of environmentally

acceptable lubricants)

and current

Coast Guard

ballast

water

management

regulations

adopted

under

the

U.S.

National

Invasive

Species

Act

(“NISA”),

such

as

mid-ocean

ballast

exchange

programs

and

installation

of

approved

USCG

technology

for

all

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

VIDA establishes

a new framework

for the regulation

of vessel incidental

discharges under Clean

Water Act (CWA), requires

the

EPA

to

develop

performance

standards

for

those

discharges

within

two

years

of

enactment,

and

requires the U.S.

Coast Guard

to develop implementation,

compliance, and

enforcement regulations

within

two years

of EPA’s promulgation of standards.

On September

24, 2024,

the EPA finalized

its rule

on Vessel

Incidental

Discharge

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 U.S.

Coast Guard regulations

are finalized.

Non-military, non-

recreational vessels

greater than

79 feet

in length

must continue

to comply

with the

requirements of

the

VGP,

including submission

of

a

Notice

of

Intent (“NOI”)

or

retention

of

a

PARI

form

and

submission of

annual reports. We have submitted NOIs for our vessels where required.

Compliance with the EPA,

U.S.

Coast Guard

and state

regulations could

require the

installation of ballast water

treatment equipment

on

our vessels or

the implementation of

other port facility

disposal procedures at

potentially substantial cost

or may otherwise restrict our vessels from entering U.S. waters.

European Union Regulations

In

October

2009,

the

European

Union

amended

a

directive

to

impose

criminal

sanctions

for

illicit

ship-

source discharges of polluting substances, including minor discharges,

if committed with intent, recklessly

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

quality

of

water.

Aiding

and

abetting

the

discharge

of

a

polluting

substance

may

also

lead

to

criminal

64

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.

On July

14, 2021, the European Parliament

formally proposed its plan, which

would involve gradually including

the

maritime sector from

2023 and phasing the

sector in over

three-year period. This will

require shipowners

to

buy permits

to

cover these

emissions. The

Environment Council

adopted a

general approach

on

the

proposal

in

June

2022.

On

December

18,

2022,

the

Environmental

Council

and

European

Parliament

agreed to include

maritime shipping emissions within

the scope of

the EU ETS

on a gradual

introduction

of

obligations

for

shipping

companies

to

surrender

allowances

equivalent

to

a

portion

of

their

carbon

emissions:

40% for verified

emissions from 2024,

70% for 2025

and 100% for

2026. Most large

vessels will

be included

in the

scope of

the EU

ETS from the

start. Big

offshore vessels

of 5,000

gross tonnage and

above will

be included

in the

'MRV'

on the

monitoring, reporting

and verification

of CO2

emissions from

maritime transport

regulation from

2025

and in

the

EU

ETS

from

2027. General

cargo vessels

and off-

shore vessels

between 400-5,000

gross tonnage

will be

included in

the

MRV

regulation from

2025 and

their inclusion in

EU ETS will

be reviewed

in 2026. Furthermore,

starting from January

1, 2026, the

ETS

regulations

will

expand

to

include

emissions

of

two

additional

greenhouse

gases:

nitrous

oxide

and

methane.

Compliance

with the

Maritime

EU

ETS

will

result

in

additional compliance

and

administration

costs

to

properly

incorporate

the

provisions

of

the

Directive

into

our

business

routines.

Additional

EU

regulations

which

are

part

of

the

EU’s

"Fit-for-55,"

could

also

affect

our

financial

position

in

terms

of

compliance and administration costs when they take effect.

EU Ship Recycling Regulation

The Regulation

is mostly

aligned with

the

Hong Kong

Convention on

Ship Recycling,

mentioned earlier

and aims quick

ratification of the

Convention. However, it sets

some additional requirements

and has been

into force since 2015 for new ships

and 2020 for existing ships. It concerns

vessels over 500 GT flying the

flag of a

member state or

vessels flying

the flag

of a 3

rd

party calling at

port or anchorage

of member

states.

Our

fleet

fully

complies

with

this

regulation.

Our

fleet’s

Inventories

of

Hazardous Materials

preparation,

certification and continuous maintenance have resulted in a

significant cost to the Company.

65

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.

initially

entered

into

the

agreement,

but

on

June

1,

2017,

the

former

U.S. President

Trump

announced

that the United States intends

to withdraw from the

Paris Agreement, and the

withdrawal became effective

on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive

order to rejoin the

Paris

Agreement,

which

the

U.S.

officially

rejoined

on

February

19,

2021.

However,

in

January

2025,

President Trump

signed an

executive order

to begin

the

withdrawal of

the United

States from

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

reducing

greenhouse

gas

emissions,

including

(1)

decreasing

the

carbon

intensity

from

ships

through

implementation of

further phases

of the

EEDI for

new ships;

(2) reducing

carbon dioxide

emissions per

transport

work,

as

an

average

across

international shipping,

by

at

least

40%

by

2030,

pursuing

efforts

towards 70%

by 2050,

compared to 2008

emission levels; and

(3) reducing the

total annual

greenhouse

emissions by

at least

50% by

2050 compared

to 2008

while pursuing

efforts

towards phasing

them out

entirely.

The initial strategy

notes that technological

innovation, alternative

fuels and/or energy

sources for

international shipping will be integral to achieve the overall ambition. These regulations could cause us to

incur additional

substantial expenses.

At MEPC

77, the

Member States

agreed to

initiate the

revision of

the Initial

IMO Strategy

on Reduction

of GHG

emissions from

ships, recognizing

the need

to strengthen

the ambition

during the

revision process.

In July

2023, MEPC

80 adopted

a revised

strategy, which includes

an enhanced

common ambition to

reach net-zero

greenhouse gas emissions

from international shipping

around or close to 2050, a

commitment to ensure an uptake of

alternative zero and near-zero greenhouse

gas fuels

by 2030,

as well

as i).

reducing the

total annual

greenhouse gas

emissions from

international

shipping by at

least 20%, striving for

30%, by 2030,

compared to 2008;

and ii). reducing

the total annual

greenhouse gas

emissions from

international shipping

by at

least 70%,

striving for

80%, by

2040, compared

to 2008.

In March

2024, MEPC 81

further developed the

goal based marine

fuel standard regulating

the

phased reduction of marine fuel’s GHG intensity as part of its mid-term measures. In Fall 2024, MEPC 82

made further progress

on the development

of these mid-term

measures, and the

Committee is expected

to approve amendments at MEPC 83 (Spring 2025) for adoption in

October 2025.

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

66

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

various requirements,

some

of

which

are

found

in

the

SOLAS

Convention, include,

for

example,

on-board

installation

of

automatic

identification systems to provide

a means for the

automatic transmission of safety-related

information from

among

similarly

equipped

ships

and

shore

stations,

including

information

on

a

ship’s

identity,

position,

course, speed

and navigational

status; on-board installation

of ship

security alert

systems, which

do not

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

security plans; ship

identification

number

to

be

permanently

marked

on

a

vessel’s

hull;

a

continuous

synopsis

record

kept

onboard showing a vessel's history including

the name of the ship, the state

whose flag the ship is entitled

to fly, the date on which the ship was registered

with that state, the ship's

identification number, the port at

which

the

ship

is

registered

and

the

name

of

the

registered

owner(s)

and

their

registered

address;

and compliance with flag state security certification requirements.

The USCG regulations, intended to align with

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

vessels

from

MTSA

vessel

security

measures,

provided

such

vessels

have

on

board

a

valid

ISSC

that

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

Future security

measures could

have a

significant financial

impact on

us.

We intend

to comply

with the

various security measures addressed by MTSA,

the SOLAS Convention and the

ISPS Code. The cost of

vessel security

measures has

also been

affected by

the escalation

in the

frequency of

acts of

piracy against

ships, notably off the coast of Somalia, including the Gulf of Aden and Arabian Sea area. Substantial loss

of

revenue

and

other

costs

may

be

incurred

as

a

result

of

detention

of

a

vessel

or

additional

security

measures, and

the risk

of uninsured

losses could

significantly affect

our business.

Costs are

incurred in

taking

additional

security

measures

in

accordance

with

Best

Management

Practices

to

Deter

Piracy,

notably those contained in the BMP5 industry standard.

67

Inspection by Flag administration and Classification Societies

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

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

to ensure

safety at sea

and should verify that

ships under its

authority,

conform relevant international standards,

in

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

through on board physical inspections.

The hull and machinery of every commercial vessel

must be classed by a classification society

authorized

by

its

country

of

registry.

The

classification

society

certifies

that

a

vessel

is

safe

and

seaworthy

in

accordance with the

applicable rules and

regulations of the

country of registry of

the vessel and

SOLAS.

Most

insurance

underwriters

make

it

a

condition

for

insurance

coverage

and

lending

that

a

vessel

be

certified

“in

class”

by

a

classification

society

which

is

a

member

of

the

International

Association

of

Classification Societies, the IACS.

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

Rules”, which

apply to

oil tankers

and bulk

carriers contracted

for construction

on or after

July 1,

2015.

The

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

All of our vessels are certified as

being “in

class” by

all the

applicable Classification Societies

(e.g., American

Bureau of

Shipping, Lloyd's

Register of Shipping).

A vessel must undergo annual surveys,

intermediate surveys, drydockings and special surveys. In

lieu of

a special survey,

a vessel’s machinery may be

on a continuous survey cycle, under

which the machinery

would

be

surveyed

periodically

over

a

five-year

period.

Every

vessel

should

have

a

minimum

of

two

examinations of

the outside

of a

vessel's bottom

and related

items during

each five-year

special survey

period. One such examination is to

be carried out in conjunction with the

Special Periodical Survey.

In all

cases, the

interval between

any two

such examinations

is not

to exceed

36 months.

In all

cases, the

interval

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

and/or fails any

annual survey, intermediate survey, drydocking

or special survey, the

vessel will be

unable

to

carry cargo

between ports

and

will be

unemployable and

uninsurable which

could

cause

us to

be

in

violation of certain covenants in our loan agreements.

Any such inability to carry cargo or be employed,

or

any such

violation of

covenants, could

have a

material adverse

impact on

our financial

condition and

results

of operations.

Risk of Loss and Liability Insurance

General

The operation

of any cargo

vessel includes

risks such

as mechanical

failure, physical damage,

collision,

property

loss,

cargo

loss

or

damage

and

business

interruption

due

to

political

circumstances

in

foreign

countries, piracy incidents, hostilities and

labor strikes. In

addition, there is

always an inherent

possibility

of

marine

disaster,

including

oil

spills

and

other

environmental

mishaps,

and

the

liabilities

arising

from

owning

and

operating

vessels

in

international

trade.

OPA,

which

imposes

virtually

unlimited

liability

upon shipowners,

operators

and bareboat

charterers

of any

vessel

trading

in

the

exclusive

economic

zone of the

United States

for certain

oil pollution

accidents in

the United

States, has

made liability

insurance

more

expensive

for shipowners

and

operators

trading

in

the United

States

market. We

carry

insurance

coverage as customary in

the shipping industry. However, not all risks can be

insured, specific claims

may

be rejected, and we might not be always

able to obtain adequate insurance coverage

at reasonable rates.

While we maintain hull and machinery insurance, war risks

insurance, protection and indemnity cover and

freight, demurrage and

defense cover for

our operating fleet

in amounts that

we believe to

be prudent to

cover

normal risks

in

our

operations,

we may

not

be

able to

achieve

or maintain

this

level of

coverage

throughout

a

vessel's

useful life.

Furthermore, while

we

believe

that

our

present

insurance

coverage is

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

claim will be paid,

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

at reasonable rates.

68

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

including

wreck

removal.

Protection

and

indemnity

insurance

is

a

form

of

mutual

indemnity

insurance,

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

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

The 13

P&I Associations

that comprise

the International

Group insure

approximately 90%

of the world’s

commercial

tonnage

and

have

entered

into

a

pooling

agreement

to

reinsure

each association’s

liabilities. The

International

Group’s

website

states

that

the

Pool

provides

a

mechanism

for

sharing

all

claims in

excess of

US$10 million up

to, currently,

approximately US$8.2

billion.

As a

member of

a P&I

Association,

which

is

a

member

of

the

International

Group,

we

are

subject

to

calls

payable

to

the

associations based on our

claim records as

well as the claim

records of all

other members of the

individual

associations

and

members

of

the shipping

pool

of

P&I

Associations

comprising

the

International

Group.

Our

vessels

may

be

subject

to

supplemental

calls

which

are

based

on

estimates

of

premium

income and anticipated and paid claims. Such estimates

are adjusted each year by the Board of

Directors

of the

P&I Association

until the

closing of

the relevant

policy year, which

generally occurs

within three

years

from the

end of the

policy year.

Supplemental calls, if

any,

are expensed when

they are

announced and

according to the period they relate to.

C.

Organizational structure

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

in Exhibit 8.1 to this annual report.

D.

Property, plants and equipment

Since October 8, 2010, DSS owns

the land and the building where

we have our principal corporate offices

in Athens, Greece. In addition, 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

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.

69

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,

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.

70

(7)

Daily

vessel

operating

expenses,

which

include

crew

wages

and

the

cost

of

insurance, expenses relating to repairs and maintenance, the costs of

spares and consumable

stores,

tonnage

taxes

and

other

miscellaneous

expenses,

are

calculated

by

dividing

vessel

operating expenses by ownership days for the relevant period.

The following table reflects such factors for the periods indicated:

As of and for the

Year Ended December 31,

2024

2023

2022

Fleet Data:

Average number of vessels (1)

38.9

41.1

35.4

Number of vessels at year-end

38.0

40.0

42.0

Weighted average age of vessels at year-end (in

years)

11.3

10.5

10.2

Ownership days (2)

14,219

14,986

12,924

Available days (3)

14,057

14,867

12,449

Operating days (4)

14,009

14,824

12,306

Fleet utilization (5)

99.7%

98.9%

Average Daily Results:

Time charter equivalent (TCE) rate (6)

$

15,267

$

16,713

$

22,735

Daily vessel operating expenses (7)

5,808

5,704

5,574

The following table reflects the calculation of our TCE rates for

the periods presented:

Year Ended December 31,

2024

2023

2022

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

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

Time charter revenues

$

228,209

$

262,098

$

289,972

Less: voyage expenses

(13,607)

(13,621)

(6,942)

Time charter equivalent revenues

$

214,602

$

248,477

$

283,030

Available days

14,057

14,867

12,449

Time charter equivalent (TCE) rate

$

15,267

$

16,713

$

22,735

Time Charter Revenues

Our revenues are driven primarily by

the number of vessels in our

fleet, the number of days during which

our vessels operate and

the amount of daily

charter hire rates that

our vessels earn under

charters, which,

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

●

the duration of our charters;

●

our decisions relating to vessel acquisitions and disposals;

●

the amount of time that we spend positioning our vessels;

●

the amount of time that our vessels spend in drydock undergoing

repairs;

71

●

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 materially adverse

impact on financial

performance. As

we employ vessels

on period charters,

future spot charter

rates may be

higher or lower

than the rates

at

which

we

have

employed

our

vessels

on

period

charters.

Our

time

charter

agreements

subject

us

to

counterparty risk.

In depressed

market conditions,

charterers may

seek to

renegotiate the

terms of

their

existing charter parties or

avoid their obligations

under those contracts.

Should a counterparty

fail to honor

their obligations

under agreements

with us,

we could

sustain significant

losses which

could have

a material

adverse effect on

our business,

financial condition,

results of

operations and

cash flows. Revenues

derived

from

time

charter

agreements

in

2024

decreased

compared

to

due

to

the

decrease

in

charter

rates

during the

year

and

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 HSQ and vetting. Our vessel operating expenses generally

represent fixed costs.

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.

72

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

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, 2024 our aggregate debt amounted

to $522.6 million and

our finance

liabilities amounted

to $123.9

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 have

been increasing

since the

beginning of

2022, started

to decrease

from the

third quarter

of 2024.

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

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;

73

●

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;

●

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;

74

●

vessel hiring management;

●

vessel surveying; and

●

vessel performance monitoring.

The management of

financial, general and

administrative elements

involved in the

conduct of our

business

and ownership of our vessels mainly requires the following components:

●

management of our

financial resources, including

banking relationships, i.e.,

administration of

bank loans and bank accounts;

●

management of our accounting system and records and financial

reporting;

●

administration of the legal and regulatory requirements affecting our business

and assets; and

●

management of the relationships with our service providers and customers.

The principal factors

that affect our profitability, cash

flows and shareholders’

return on investment

include:

●

rates and periods of charter hire;

●

levels of vessel operating expenses;

●

depreciation expenses;

●

financing costs;

●

the war in the Ukraine;

●

inflation, and

●

fluctuations in foreign exchange rates.

Results of Operations

Year ended December 31, 2024 compared to the year ended December 31, 2023

Time

charter revenues.

Time

charter revenues

decreased by

$33.9 million,

or 13%,

to $228.2

million in

2024, compared to $262.1 million

in 2023. The

decrease in time charter

revenues was due to

decreased

average time

charter rates

achieved during

the year, reflected

in our

TCE rate

of $15,267

in 2024

compared

to $16,713 in 2023,

representing a 9% decrease.

A further decrease was due

to the decrease in the

size

of our fleet resulting from the disposal

of two vessels during 2024, which

decreased operating days during

2024, as compared to last year. Operating days in 2024 were 14,009 compared to 14,824 in 2023.

Voyage

expenses.

Voyage

expenses

amounted

to

$13.6

million

in

2024

and

remained

unchanged

compared

to

2023.

Although

commissions,

included

in

voyage

expenses,

decreased

in

2024

to

$11.6

million compared to $13.3

million in 2023, this

decrease was offset by

increased port expenses

and loss in

bunkers amounting

to $0.7

million in

2024 compared

to a

gain of

$0.5 million

in 2023.

The gain/loss

on

bunkers was mainly due

to the difference in the

price of bunkers paid

by the Company

to the charterers on

the redelivery of the vessels from the charterers

under the previous charter party agreement

and the price

75

of bunkers paid

by charterers to

the Company on

the delivery of

the same vessels

to their charterers

under

new charter party agreements.

Vessel operating expenses.

Vessel operating expenses decreased by $2.9 million, or 3%, to $82.6 million

in 2024

compared to $85.5

million in

2023. The decrease

in operating expenses

is mainly attributable

to

the decrease

in ownership

days in

2024, due

to the

sale of

vessels discussed

above. Daily

vessel operating

expenses were $5,808

in 2024 and

increased by 2%

compared to $5,704

in 2023. Therefore,

the decrease

in operating expenses due to the decreased number of vessels during the year was offset by increases in

vessel supplies and taxes.

Depreciation

and

amortization

of

deferred

charges.

Depreciation

and

amortization

of

deferred

charges

decreased

by $5.1

million,

or 10%,

to $44.7

million

in 2024,

compared

to $49.8

million

in 2023.

This decrease

was

due

to

the

sale

of

two

vessels,

as

noted

above.

The

decrease

was

partly

offset

by

increased

amortization of deferred cost as a result of the drydock cost incurred

in 2024 as compared to 2023.

General and

administrative expenses

. General and admini

strati

ve expenses

increased by

$0.4 million,

or

1%, to $33.4

million in 2024

compared to $33.0

million in 2023.

The increase was

mainly due to

increased

payroll and taxes and was partly offset by decreased transfer agent expenses and legal fees.

Management fees to

a related party.

Management fees to

a related party

amounted to $1.3

million both in

2024 and

2023 due

to the

fact that

the number

of vessels

managed by

DWM in

2024 remained

the same

with 2023.

Gain

on

sale

of

vessels.

Gain

on

sale

of

vessels

increased

by

$0.5

million,

or

9%,

to

$5.8

million

which

resulted

from

the

sale

of

vessels

Artemis

and

Houston

in

2024

compared

to

$5.3

million

in

2023

which

resulted from the sale of vessels

Aliki, Melia and Boston

in 2023.

Interest expense and

finance costs.

Interest expense and

finance costs decreased

by $1.8 million

or 4%

to $47.5

million

in 2024

compared

to $49.3

million

in 2023.

The decrease

derived from

a decreased

average

outstanding

balance

of

debt

and

finance

liabilities

in

2024

and

was

partly

offset

by

increased

average

interest rates compared to 2023.

Interest and

other income

. Interest

and other

income increased

by $0.2

million, or

2%, to

$8.4 million in

2024 compared to $8.2 million in 2023. The increase

is mainly attributable to an increased amount

of time

deposits booked during

2024 and was

partly offset by

decreased deposit

rates achieved

in 2024 compared

to 2023.

Loss on

extinguishment of

debt.

In 2024,

loss on

extinguishment of

debt increased

by $2.8

million, or

400%

to $3.5 million and 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.

In 2023, loss on extinguishment of debt

amounted to

$0.7 million

and consisted

of the

prepayment in

full of

six loan

agreements refinanced

by other

banks.

Gain/(loss) on derivatives

. In 2024,

gain on derivates amounted

to $0.3 million, as

compared to a loss

of

$0.4 million

in 2023.

Gain/(loss) on

derivative instruments

represents the

fair value

of an

interest rate

swap

dated July

6, 2023

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 under term SOFR.

Gain/(loss) on

related party

Investments.

Loss on

related party

investments amounted

to $3.9

million in

2024 and

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. This

compares to

a gain

of $1.5

million in

2023,

which

consists

of

a

gain

of

$1.7

million

from

the

conversion

of

9,793

of

the

10,000

Series

C

Preferred

shares of OceanPal to 3,649,474 common

shares of OceanPal, having a fair

value of $9.2 million, based

76

on the

closing price

of OceanPal’s

common shares

on the

date of

conversion; a

gain of

$0.8 million

resulting

from the distribution of 13,157 Series D Preferred Shares of OceanPal to our shareholders as a non cash

dividend; and an

unrealized loss of

$1.0 million, resulting from

the measurement of OceanPal’s

common

shares at fair value on December 31, 2023, based on the closing price

of the shares on that date.

Gain on deconsolidation of

subsidiary.

Gain on deconsolidation of

subsidiary amounted to

$0.8 million in

2023 and

represented the gain

from the

Company’s 25%

interest in Bergen

Ultra measured at

fair value

on the date of its deconsolidation from the Company’s financial statements. No

such gain exists in 2024.

Gain/(loss) on equity securities.

Loss on equity securities amounted to $0.4

million in 2024, as compared

to a

gain of

$2.8 million

in 2023

and resulted

from the

measurement of

equity securities,

having a

book

value of $17.9 million, at fair value of $20.7 million on December 31, 2023, determined through Level 1 of

the fair

value hierarchy.

The Company

sold all

securities during

the first

quarter of

2024 and

recorded a

realized loss of $0.4 million.

Gain on warrants.

Gain on warrants

amounted to $0.7

million in 2024,

compared to $1.6

million in 2023,

which resulted

from the

fair value

adjustment of

the outstanding

warrants as

of December

31, 2024

and

2023, respectively.

Loss from equity method investments.

Loss from equity method investments,

amounted to $0.1 million in

2024, compared to $0.3 million

in 2023. In 2024, the loss was

attributable to a loss of

$0.5 million from our

45.87%

interest

in Windward

which was

partly

offset

by

a

gain

of

$0.3 million

from

our

25% interest

in

Bergen and a gain of $0.1 million

from our 50% interest in DWM. In 2023,

the loss is attributed to a loss of

$0.7 million from

our 45.45% interest

in Windward, which

was partly offset

by a

gain of $0.2

million from

our 50% interest in DWM,

and a gain of $0.2 million from our 25% interest in Bergen.

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

For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022,

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, 2023 filed with the SEC on April

5, 2024.

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

capital

expenditures

in

connection

with

our

investment

in

Windward,

expenditures

relating

to

drydocking

of

vessels

to

comply

with

international

and

regulatory

standards, repayments

of

bank

loans, repurchase

of

our

common stock,

payment

of

dividends and

our

bareboat

charters.

Our

primary

sources

of

short-term

liquidity

include

cash

generated

from

operating

activities and the sale of a vessel, available cash balances and proceeds from the

exercise of warrants, if

any.

Our

long-term

liquidity

requirements

include

funding

our

newbuilding

vessel

installments,

interest

and

principal payments

on outstanding

debt,

payment of

dividends,

expenditures for

vessel efficiency

upgrades

and

drydock

costs.

Sources

of

funding

for

our

long-term

liquidity

requirements

include

cash

flows

from

operations, bank borrowings, issuance of debt and equity securities, and

vessel sales.

77

As

of

December

31,

2024

and

2023,

working

capital,

which

is

current

assets

minus

current

liabilities,

including the current

portion of long-term

debt and finance

liabilities, amounted to

$126.4 million and

$97.1

million,

respectively.

The

increase

in

working

capital

was

mainly

due

to

increased

cash

and

cash

equivalents and time deposits, as a result of the liquidation of our investment in equity securities acquired

in 2023 amounting

to $20.7 million;

proceeds from

our $175 million

bond issued

in July 2024

which prepaid

the then outstanding $119 million bond and proceeds of $24.2

million from the exercise of warrants

during

2024. This increase

was partly offset

by increased drydock

costs incurred during 2024,

increased capital

expenditures for the acquisition of investments and decreased revenues as a result of the significant drop

of

the

charter

rates

during

2024

compared

to

2023.

The

increase

in

working

capital

in

2024

was

also

affected

by

decreased

current

portion

of

long-term

debt

compared

to

last

year,

as

a

result

of

loan

refinancings

during

2024,

under

which

we

extended

the

relevant

repayment

schedules

and

decreased

annual amortization. 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

$143.7 million

as

of

December 31,

2024

and $121.6

million as

of

December 31,

2023. Restricted

cash

represents minimum

liquidity requirements

under our

loan facilities

and as

of December

31, 2024

and 2023,

amounted

to

$19

million

and

$20

million,

respectively.

Also,

as

of

December

31,

2024

and

2023,

time

deposits with maturities

above three

months amounted

to $63.5 million

and $40.0

million, 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 2024 and 2023, our sources and uses of cash were as

follows:

Net Cash Provided by Operating Activities

Net cash

provided by operating

activities increased by

$13.1 million,

or 19%.

In 2024, net

cash provided

by

operating

activities

was

$83.5 million

compared

to

net

cash

provided

by

operating

activities

of

$70.4 million in 2023. This increase was mainly

attributable to the proceeds from sale of

our investment in

equity securities

that

we acquired

in 2023,

and was

partly offset

by decreased

revenues, as

a result

of

decreased

average

time

charter

rates

compared

to 2023

and

increased

dry-docking

costs

incurred

in

2024.

Net Cash Used in Investing Activities

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

provided by investing

activities was $24.9

million for

2023, which consists

of $29.7 million

paid

for vessel acquisitions

and improvements;

$36.6 million

of proceeds from

the sale of

three vessels in

2023;

$10.5

million

paid

to

acquire

investments

in

Windward

and

Cohen;

$1.0

million

cash

divested

from

deconsolidation of Bergen

Ultra; decreased

investment by $6.5

million in time

deposits with

maturity above

three

months;$25.2 million

proceeds

from

convertible

loan

with

limited

partnership;

$0.2

million

paid

to

acquire other assets; and $2.0 million relating to the acquisition

of equipment.

Net Cash Provided by Financing Activities

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 indebtedness

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

78

our preferred and

common stock,

respectively; and

$5.3 million

of finance

costs paid in

relation to new

loan

agreements.

Net cash used in

financing activities was $71.1 million for

2023, which consists of $57.7

million proceeds

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

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

cash dividends paid on our preferred and common stock,

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

to new loan agreements.

For a detailed

discussion of

cash flows

for the

year ended

December 31,

2023

compared to

the year

ended

December 31, 2022

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

Capital Resources” included in our 2023 Annual Report filed on Form 20-F

with the SEC on April 5, 2024.

Commitments for Capital Expenditures

In January 2025, we paid $22.9 million for the purchase of 11,442,645 shares of common stock, pursuant

to

a

tender

offer

we

commenced

on

December

2,

2024.

As

of

the

date

of

this

annual

report,

we

have

commitments

of

$73.6

million

for

the

construction

of

two

81,200

dwt

methanol

dual

fuel

new-building

Kamsarmax dry bulk vessels,

expected to be delivered in the third quarter of

2027 and the first quarter of

2028. In February

and March 2025,

we paid €7.6

million, or $8.0

million, under our

€50 million commitment

to Windward

for the

construction of

four CSOVs

with deliveries

scheduled to

occur between

the third

quarter

of

2025

and the

fourth

quarter of

2026,

thus

reducing our

remaining commitment

as

of the

date of

this

report

to

€7.6

million,

expected

to

be

paid

in

the

following

months.

We

also

expect

to

incur

capital

expenditures for vessel efficiency upgrades amounting to $3.0 million,

scheduled to take place until 2027.

We also incur capital expenditures when our vessels undergo surveys. This

process of recertification may

require us to

reposition these vessels

from a discharging

port to

shipyard facilities, which

will reduce our

operating days during

the period. We may

also incur capital

expenditures for vessel

improvements to

meet

new regulations.

In the

next twelve

months, we

will require

capital to

fund ongoing

operations, debt

service,

the payment of our preferred dividends and the payment of our bareboat

charters.

We expect

to finance

part of

the construction

cost of

our methanol

vessels on

order with

new bank

debt

and our remaining

capital expenditures

from cash from

operations and cash

at banks. As

of the date

of this

annual report, we have contracted revenues covering around 70% of our ownership days in

2025, in time

charter agreements having

an average time

charter rate on

or around our

break-even rate as

of December

31, 2024,

and we

have fixed

around 10%

of our

ownerships days

in 2026.

Our revenues

for the

unfixed

days in 2025 and 2026 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.

However, 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

and

time

deposits

maturing

in

2025,

will

be

sufficient

to

fund

our

short

term

and

long-term

capital requirements.

Debt instruments and guarantees

As of December

31, 2024,

we had $522.6

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

, both

delivered on January

4, 2017. The

loan is payable

in equal quarterly

instalments of

about $1.0 million each, the last of which is payable by January

4, 2032.

79

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

the acquisition price of

9 Ultramax vessels. The Company drew-down $197.2 million in tranches,

with each tranche drawn on the

delivery

of

each

vessel

to

us.

In

December

2022,

we

prepaid

$21.9

million

due

to

a

vessel

sale

and

leaseback transaction. On June 20, 2023, we

entered into a $22.5 million loan agreement with

Nordea to

refinance $20.9 million outstanding

balance of an

existing loan. On

July 25, 2024,

we refinanced the

two

agreements with

Nordea with

a new

$167.3 loan

agreement, drawn

on July

25, 2024.

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 an

aggregate of

$75.2 million

outstanding balance

under existing

loans with

BNP Paribas

and

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 aggregate

of $68.7

million outstanding

balance under

existing loans

with ABN

AMRO Bank

N.V,

and

for

working

capital

purposes.

The

loan

is

repayable

in

equal

quarterly

instalments

of

$3.8

million

until

December 27, 2029. Additionally,

the loan is

subject to a margin

reset, according to

which the borrowers

and the lenders

will enter into

discussions to agree

on a new

margin. Unless the

parties agree on

a new

margin, the loan will

be mandatorily repayable on

June 27, 2027. As part

of the loan agreement, on

July 6,

2023, we

entered into

an interest

rate swap

with DNB

for a

notional amount

of $30

million and

quarterly

amortization of

$1.2 million.

Under the

interest rate

swap, we

pay a

fixed rate

of 4.268%

and receive

floating

under term

SOFR. The swap

has a

termination date

on December 27,

2029, and

a mandatory break

on

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

the loan, according to which the swap will be terminated

if the loan is prepaid. As of December 31, 2024, the

interest rate swap was a liability having a fair value

of

$0.2 million.

Under

the

secured

term

loans

outstanding

as

of

December

31,

2024,

27

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

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, 2023 and

2024, and the date of this

annual report, we were in compliance with

all of

our loan covenants.

Senior Unsecured Bond:

On June 22, 2021,

we issued a $125

million senior unsecured bond maturing

in June 2026. On

June 29,

2023, we repurchased $5.9 million nominal

value of the bond and recognized

a loss of $0.2 million and on

July 2,

2024 we

prepaid the

outstanding balance at

a price

equal to

103.35% of

nominal value,

with the

proceeds from a new

bond and recognized

a loss of $3.5

million. On July 2,

2024, we issued

the new bond

amounting to

$150 million

nominal value,

issued at

par value,

and on

November 8,

2024, we

issued an

80

additional amount of

$25 million nominal

value, at 102.00%

of par value.

The new 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,

an

equity method

investee

owning one

dry

bulk

carrier,

of

its

obligations

under a loan agreement with

the bank maturing on March

30, 2028. We consider the

likelihood of having

to make any

payments under

the guarantee

to be

remote, as

the loan is

also secured

by an

account pledge

by

Bergen,

first

preferred

mortgage

on

the

vessel,

a

first

priority

general

assignment

of

the

earnings,

insurances and requisition

compensation of the vessel,

a charter party assignment,

a partnership interests

security

deed,

and

a

manager’s

undertaking.

As

of

December

31,

2024,

the

loan

had

an

outstanding

balance of $13.5 million.

C.

Research and development, patents and licenses

We

incur from

time to

time expenditures

relating to

inspections for

acquiring new

vessels that

meet our

standards. Such expenditures are insignificant and they are expensed

as they incur.

D.

Trend information

Demand for dry

bulk vessel services is

influenced by global financial conditions.

Global financial markets

and economic

conditions have

been, and

continue

to be,

volatile. Our

results of

operations depend

primarily

81

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 2024,

the BDI

ranged from a low

of 976 to a

high of 2,419 and

closed at 1,635 on

March 20, 2025. Although

there can be

no assurance that the dry

bulk charter market will not

decline further, as

of the date of

this annual report,

we have

fixed about

70% of

our fleet

ownership days

in 2025

in time

charter agreements

having an

average

time charter rate on or

around our break-even rate. Nevertheless, our revenues and

results of operations

in 2025

will be

subject to

demand for

our services,

the level

of inflation,

market disruptions

and interest

rates.

Demand

for

our

dry

bulk

oceangoing vessels

is

dependent upon

economic

growth in

the

world’s

economies, seasonal and regional changes in demand and changes to the capacity of the global dry bulk

fleet

and

the

sources

and

supply

for

dry

bulk

cargo

transported

by

sea.

Continued

adverse

economic,

political

or

social

conditions

or

other

developments

could

further

negatively

impact

charter

rates

and

therefore have a material adverse effect on our business and results of operations.

E.

Critical Accounting Estimates

The

discussion

and

analysis

of

our

financial

condition

and

results

of

operations

are

based

upon

our

consolidated

financial

statements,

which

have

been

prepared

in

accordance

with

U.S.

GAAP.

The

preparation

of

those

financial

statements

requires

us

to

make

estimates

and

judgments

that

affect

the

reported

amounts of

assets

and liabilities,

revenues and

expenses and

related disclosure

of

contingent

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

results may differ from these estimates

under different assumptions and conditions.

Impairment of Vessels

Long-lived assets

are

reviewed for

impairment whenever

events

or

changes in

circumstances (such

as

market conditions,

obsolesce or

damage to the

asset, potential sales

and other

business plans)

indicate

that the

carrying amount

of an

asset may

not be

recoverable. When

impairment indicators

are identified

and the estimate

of undiscounted projected

net operating cash

flows, excluding interest

charges, expected

to be generated

by the use

of an asset

over its remaining

useful life and

its eventual disposition

is less than

its carrying

amount, the

Company evaluates

the asset

for impairment

loss. Measurement

of the

impairment

loss is based on the fair value of the asset, determined mainly by

third party valuations.

For

vessels, we

calculate undiscounted

projected net

operating cash

flows by

considering the

historical

and

estimated

vessels’ performance

and

utilization

with

the

significant

assumption

being

future

charter

rates for

the unfixed

days, using

the most

recent 10-year

average of

historical 1

year time

charter rates

available for

each type

of

vessel over

the

remaining estimated

life

of

each vessel,

net

of

commissions.

Historical

ten-year

blended

average

one-year

time

charter

rates

are

in

line

with

the

Company’s

overall

chartering strategy,

they reflect the

full operating history

of vessels of

the same type

and particulars with

the Company’s

operating fleet

and they

cover at

least a

full business

cycle, where

applicable. When the

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

not available for a type of vessels, the Company

uses

the

average

of

historical

1

year

time

charter

rates

of

the

available

period.

The

historical

ten-year

average rate

used in

2024 to

calculate undiscounted

projected net

operating cash

flow was

$13,053 for

Panamax,

Kamsarmax

and

Post-Panamax

vessels,

$16,626

for

Ultramax

vessels

and

$16,315

for

our

Capesize

and

Newcastlmax

vessels,

compared

to

$12,775,

16,608

and

$16,115,

respectively

in

2023.

Other assumptions

used in

developing estimates

of future

undiscounted cash

flow are

the charter

rates

calculated for

the fixed

days using

the fixed

charter rate

of each

vessel from

existing time

charters, the

expected outflows

for scheduled

vessels’ maintenance;

vessel operating

expenses; fleet

utilization, and

the vessels’ residual

value if sold

for scrap. Assumptions

are in line

with our

historical performance

and our

expectations for future

fleet utilization under

our current fleet

deployment strategy. The difference between

the carrying amount of a vessel plus unamortized deferred costs and its fair value would be recognized in

our accounts as impairment loss,

if the undiscounted cash

flows were lower compared to carrying

value of

that vessel.

Although no impairment loss

was identified or recorded

in 2024, according to

our assessment,

82

the carrying value plus unamortized deferred cost of vessels for which impairment indicators

existed as of

December 31, 2024, was $361.4 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,

2024 and

2023 and (ii)

what we

believe the charter-free

market value of each

of our vessels was

as of December 31,

2024 and 2023, the

aggregate carrying value

of 12 and

12 of the

vessels in our

fleet as of

December 31, 2024

and 2023, respectively,

exceeded their

aggregate charter-free market value

by approximately $22 million

and $49 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, 2024 and

2023, on industry standard terms,

in cash

transactions, and to

a willing buyer

where we were

not under

any compulsion to

sell, and

where

the buyer was

not under any

compulsion to buy.

For purposes of

this calculation, we

have assumed that

these

12 and

12 vessels

would be

sold at

a price

that reflects

our estimate

of their

charter-free market

values as of December 31, 2024 and 2023, respectively.

83

Vessel

Dwt

Year Built

Carrying Value plus unamortized

deferred cost

(in millions of US dollars)

2024

2023

1

Alcmene

93,193

2010

10.1

9.6

2

Amphitrite

98,697

2012

13.2

14.0

3

Artemis

76,942

2006

-

11.0

4

Astarte

81,513

2013

17.0

18.0

5

Atalandi

77,529

2014

16.0

15.7

6

Crystalia

77,525

2014

15.7

15.4

7

Electra

87,150

2013

13.4

14.1

8

G.P.

Zafirakis

179,492

2014

23.8

22.1

9

Houston

177,729

2009

-

18.4

10

Ismene

77,901

2013

11.1

11.7

11

Leto

81,297

2010

12.1

12.9

12

Los Angeles

206,104

2012

22.4

23.5

13

Maera

75,403

2013

11.0

11.7

14

Maia

82,193

2009

12.4

15

Medusa

82,194

2010

11.8

12.4

16

Myrsini

82,117

2010

13.4

14.2

17

Myrto

82,131

2013

16.8

17.8

18

New Orleans

180,960

2015

30.4

31.6

19

New York

177,773

2010

13.7

14.0

20

Newport News

208,021

2017

38.8

40.5

21

P.S.

Palios

179,134

2013

33.3

*

35.3

*

22

Phaidra

87,146

2013

12.9

13.5

23

Philadelphia

206,040

2012

23.1

24.2

24

Polymnia

98,704

2012

13.5

14.2

25

San Francisco

208,006

2017

38.9

40.6

26

Santa Barbara

179,426

2015

35.7

*

34.8

*

27

Seattle

179,362

2011

20.2

21.3

28

Selina

75,700

2010

8.6

9.1

29

Semirio

174,261

2007

14.7

16.1

30

LEONIDAS P.C.

82,165

2011

19.5

*

20.8

*

31

Florida

182,063

2022

55.0

57.0

32

DSI Pyxis

60,362

2018

33.8

*

35.6

*

33

DSI Pollux

60,446

2015

28.4

*

29.9

*

34

DSI Phoenix

60,456

2017

31.1

*

32.7

*

35

DSI Polaris

60,404

2018

34.4

*

36.2

*

36

DSI Andromeda

60,309

2016

30.2

*

31.8

*

37

DSI Aquila

60,309

2015

28.5

*

29.9

*

38

DSI Pegasus

60,508

2015

27.3

*

28.8

*

39

DSI Altair

60,309

2016

29.7

*

31.3

*

40

DSI Aquarius

60,309

2016

29.5

*

31.0

*

Total

4,481,283

851

915

_______________________________

*

Indicates dry bulk

vessels for which

we believe, as

of December 31,

2024 and 2023,

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 $22 million and $49 million, respectively.

84

Our

estimates

of

charter-free

market

value

assume

that

our

vessels

were

all

in

good

and

seaworthy

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

Our estimates are based on information available from various industry

sources, including:

●

reports

by industry

analysts and

data

providers that

focus

on our

industry and

related dynamics

affecting vessel values;

●

news and industry reports of similar vessel sales;

●

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

●

vessel

sale

prices

and

values

of

which

we

are

aware

through

both

formal

and

informal

communications

with

shipowners,

shipbrokers,

industry

analysts

and

various

other

shipping

industry participants and observers.

As

we

obtain information

from

various industry

and

other

sources, our

estimates

of charter-free

market

value are

inherently uncertain.

In addition,

vessel values

are highly

volatile; as

such, our

estimates may

not be

indicative of the

current or

future charter-free market

value of

our vessels or

prices that

we could

achieve if we

were to sell them.

We also refer

you to the

risk factor in “Item

3. Key Information—D. Risk

Factors” entitled

“

The market

values of

our vessels

could decline,

which could

limit the

amount of

funds

that we

can borrow

and could

trigger breaches

of certain

financial covenants

contained in

our loan

facilities,

which could adversely

affect our operating results,

and we may

incur a loss

if we sell

vessels following a

decline

in

their

market

values

”

and

the

discussion

under

the

heading

"Item

4.

Information

on

the

Company—B. Business Overview–Vessel Prices.”

Our impairment test

exercise is sensitive

to variances in

the time charter

rates. Our current

analysis, which

also

involved

a

sensitivity

analysis

by

assigning

possible

alternative

values

to

this

significant

input,

indicated that

time charter

rates would

need to

be reduced

by 14%

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

$16,626

$12,513

Panamax/Kamsarmax/Post-Panamax

$13,053

$9,399

Capesize/Newcastlemax

$16,315

$12,018

85

It should be

noted that as

of December 31,

2024, twelve of

our vessels, having

indication of impairment,

would be affected by a

reduction in time charter

rates below the average break-even

rate. Additionally, the

use of the 1-year,

3-year and 5-year average blended rates

would not have any effect

on the Company’s

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

Vessel type

1-year

(period)

Impairment

charge

(in USD

million)

3-year

(period)

Impairment

charge

(in USD

million)

5-year

(period)

Impairment

charge

(in USD

million)

Ultramax

$16,737

-

$18,297

-

$18,081

-

Panamax/Kamsarmax/Post-

Panamax

$14,813

-

$16,245

-

$16,239

-

Capesize/Newcastlemax

$23,750

-

$19,637

-

$19,451

-

Item 6.

Directors, Senior Management and Employees

A.

Directors and Senior Management

Set forth

below are

the names,

ages and

positions of

our directors

and executive

officers. Our

Board of

Directors

consists

of

eleven

members

and

is

elected

annually

on

a

staggered basis,

and

each

director

elected holds office for

a three-year term

and until his

or her successor

is elected and

has qualified, except

in the

event of

such director’s

death, resignation,

removal or

the earlier

termination of

his or

her term

of

office. Officers are

appointed from time to time by

our board of directors and

hold office until a

successor

is appointed or their employment is terminated.

Name

Age

Position

Semiramis Paliou

50

Class III Director and Chief Executive Officer

Simeon Palios

83

Class I Director and Chairman

Anastasios Margaronis

69

Class I Director and President

Ioannis Zafirakis

53

Class I Director, Co-Chief Financial Officer, Chief

Strategy Officer, Treasurer and Secretary

Konstantinos Psaltis

86

Class II Director

Kyriacos Riris

75

Class II Director

Apostolos Kontoyannis

76

Class III Director

Konstantinos Fotiadis

74

Class III Director

Eleftherios Papatrifon

54

Class II Director

Simon Frank Peter Morecroft

65

Class II Director

Jane Sih Ho Chao

48

Class I Director

Maria Dede

52

Co-Chief Financial Officer

Margarita Veniou

46

Chief Corporate Development, Governance &

Communications Officer

Maria Christina Tsemani

46

Chief People Officer

The term of our

Class I directors expires

in 2027, the

term of our Class

II directors expires in

2025, 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.

86

Biographical information with respect to each of our directors and executive

officers is set forth below.

Semiramis

Paliou

has

served

as

a

Director

of

Diana

Shipping

Inc.

since

March

2015,

and

as

the

Company’s

Chief

Executive

Officer,

Chairperson

of

the

Executive

Committee

and

member

of

the

Sustainability

Committee

since

March

2021.

Ms.

Paliou

has

been

the

Chief

Executive

Officer

of

Diana

Shipping Services S.A.

since March 2021.

She also serves

as a Director

of OceanPal Inc.

(NASDAQ: OP)

since

April

2021

and

as

the

Chairperson

of

the

Board

of

Directors

and

of

the

Executive

Committee

of

OceanPal Inc.

since November

2021. Ms.

Paliou is

the Chairperson

of the

Hellenic Marine

Environment

Protection Association (HELMEPA), a position she has

held since June 2020,

while she joined its

board of

directors in

March 2018.

As of

July 2023,

she serves

as Chairperson

of INTERMEPA. She

is also

a member

of

the

board

of

directors

of

the

UK

P&I

Club

since

November

2020,

member

of

the

Union

of

Greek

Shipowners since February

2022 and member

of the Global

Maritime Forum since

April 2022. She

is Vice-

Chairperson of the Greek committee of

Det Norske Veritas,

a member of the Greek

committee of Nippon

Kaiji Kyokai, Bureau Veritas, American Bureau of Shipping and Hellenic War Risks

Ms. Paliou

has over

20 years

of experience

in shipping

operations, technical

management and

crewing.

She began her

career at Lloyd’s

Register of Shipping

where she worked

as a trainee

ship surveyor from

1996

to

1998.

She

was

then

employed

by

Diana

Shipping

Agencies

S.A.

From

2007

to

2010

she

was

employed as a

Director and President of

Alpha Sigma Shipping Corp.

From February 2010 to

November

2015, she

was the

Head of the

Operations, Technical

and Crew

department of

Diana Shipping Services

S.A. From

November 2015

to October

2016, she

served as

Vice-President of

the same

company.

From

November 2016

to

the

end of

July 2018,

she served

as

Managing Director

and Head

of the

Technical,

Operations, Crew and

Supply department of Unitized

Ocean Transport

Limited. From November 2018

to

February

2020,

she

worked

as

Chief

Operating

Officer

of

Performance

Shipping

Inc.

(ex.

Diana

Containerships Inc.)

(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.

Mr. Palios also

serves as

the President

of Diana

Shipping Services

S.A. which

was formed

in 1986.

Mr. Palios has

experience in

the shipping

industry since

1969 and expertise in technical and

operational issues. He has served as

an ensign in the Greek Navy for

the

inspection of

passenger boats

on

behalf of

Ministry

of Merchant

Marine and

is

qualified as

a

naval

architect

and marine

engineer.

Mr.

Palios

was

the

founder

of

Diana

Shipping Agencies

S.A.,

where

he

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

January 13,

2010 until

February 28,

2022, Mr. Palios

also served

as the

Chairman of

the Board

of Directors

of Performance Shipping

Inc. (ex.

Diana Containerships Inc.)

(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.

87

Anastasios C. Margaronis

has served as President and

a Director of Diana Shipping

Inc. since February

2005.

He

is

also

member

of

the

Executive

Committee

of

the

Company.

Mr.

Margaronis

is

the

Deputy

President

of

Diana

Shipping

Services

S.A.,

where

he

also

serves

as

a

Director

and

Secretary.

Mr.

Margaronis has experience

in the shipping

industry,

including in ship

finance and insurance,

since 1980.

Prior to February 21,

2005, Mr.

Margaronis was employed by Diana

Shipping Agencies S.A. in

1979 and

performed on our behalf

the services he

now performs as President.

He joined Diana Shipping

Agencies

S.A. in

1979 and has

been responsible for

overseeing our vessels’

insurance matters, including

hull and

machinery,

protection and indemnity and war

risks insurances. From January

2010 to February 2020,

he

served as Director and

President of Performance

Shipping Inc. (ex. Diana

Containerships Inc.) (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.

Ioannis Zafirakis

has served

as a Director and Secretary

of Diana Shipping Inc.

since February 2005. He

has

also

been

the

Co-Chief

Financial

Officer

since

January

2025,

having

previously

served

as

the

Company’s Chief

Financial

Officer from

February 2020

(Interim Chief

Financial

Officer until

February 2021).

In addition,

he has

held the

role of

Treasurer since

February 2020

and is

also the

Company’s Chief

Strategy

Officer.

Mr.

Zafirakis is also member

of the Executive Committee

of the Company.

Mr.

Zafirakis has held

various executive positions

such as Chief

Operating Officer, Executive Vice-President and Vice-President.

In addition, Mr. Zafirakis has

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

continues

to

hold

the

positions

of

Director

and Treasurer.

Also,

he has

served as

a

Director of

OceanPal Inc.

(NASDAQ: OP)

since April

2021. He has also served as the

President, Secretary and Interim Chief

Financial Officer of OceanPal Inc.

from November 2021 to April 2023. He is also member of the Executive

Committee of OceanPal Inc.

From June 1997 to

February 2005, Mr.

Zafirakis was employed by

Diana Shipping Agencies S.A., where

he held

a number

of positions in

finance and

accounting. From January

2010 to

February 2020,

he also

served as Director and

Secretary of Performance

Shipping Inc. (ex. Diana

Containerships Inc.) (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.

Eleftherios (Lefteris) A. Papatrifon

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

of Diana

Shipping Inc.

since February

2023. Prior

to this

appointment, he

served as

Chief Operating

Officer

of the Company from March 2021 to February

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

Inc.

(NASDAQ: OP)

and a

member

of

its

Executive Committee,

positions he

has

held

since

November

2021. From November 2021 to January 2023, he served as Chief

Executive Officer of OceanPal Inc.

88

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

Shipping Ltd,

a provider

of dry

bulk shipping

services, from

2010 until

the company’s

successful sale

of

assets and consequent liquidation in

2017. Previously,

for a period of

approximately six years, he served

as

the

Chief

Financial

Officer

and

Director

of

Excel

Maritime

Carriers

Ltd.

Prior

to

that,

Mr.

Papatrifon

served for approximately

15 years in

a number of

corporate finance

and asset

management positions,

both

in the USA and in Greece.

Mr. Papatrifon holds undergraduate (BBA) and

graduate (MBA) degrees

from Baruch College (CUNY).

He

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

Konstantinos Psaltis

has served as a

Director of Diana Shipping

Inc. since March 2005,

the Chairman of

its Nominating Committee

since May

2015 and

a member

of its

Compensation Committee

since May

2017.

Mr.

Psaltis

serves

also

as

President

of

Ormos

Compania

Naviera

S.A.,

a

company

that

specializes

in

operating and managing multipurpose

container vessels, where from

1981 to 2006, he held

the position of

Managing Director. Prior to joining Ormos Compania Naviera S.A., Mr. Psaltis simultaneously served as

a

technical

manager

in

the

textile

manufacturing

industry

and

as

a

shareholder

of

shipping

companies

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

the Royal Hellenic Navy.

He holds a

degree in Mechanical Engineering

from Technische

Hochschule Reutlingen & Wuppertal

and

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

Kyriacos Riris

has served

as a

Director of

Diana Shipping

Inc. since

March 2015

and a

member of

its

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

of the Company.

Commencing in 1998, Mr. Riris served

in a series

of positions in PricewaterhouseCoopers

(PwC), Greece,

including Senior

Partner, Managing

Partner of

the Audit

and the

Advisory/Consulting

Lines of

Service. From

2009 to 2014, Mr.

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

Greece. Prior to its

merger with PwC, Mr.

Riris was employed at

Grant Thornton, Greece, where

in 1984

he

became

a

Partner.

From

1976

to

1982,

Mr.

Riris

was

employed

at

Arthur

Young,

Greece.

Since

November

2018,

Mr.

Riris

has

served

as

Chairman

of

Titan

Cement

International

S.A.,

a

Belgian

corporation, while he

is currently the

Vice Chairman of

the Board and

the Chairman of

the Audit and

the

Risk Committee of the Group.

Mr.

Riris

holds

a

degree

from

Birmingham

Polytechnic

(presently

Birmingham

City

University)

and

completed his professional qualifications with the Association of

Certified Chartered Accountants (ACCA)

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

Accountants in 1985.

Apostolos Kontoyannis

is a Director, the Chairperson

of the Compensation

Committee and a

member of

the Audit Committee of Diana

Shipping Inc., positions he has

held since March 2005.

Since March 2021,

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

Mr.

Kontoyannis has

over

40

years

of

experience

in

shipping

finance

and

currently

serves

as

financial

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

(Corporate

Bank),

London

(Head

of

Shipping

Finance

South

Western

European

Region)

and

Piraeus

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

Mr.

Kontoyannis holds a bachelor's

degree in Finance and

Marketing and a

master's degree in

Business

Administration and Finance from Boston University.

Konstantinos Fotiadis

has served as a

Director of Diana Shipping Inc.

since 2017.

Mr. Fotiadis served

as an independent

Director and

as the Chairman

of the Audit

Committee of

Performance Shipping

Inc. (ex.

Diana Containerships

Inc.) (NASDAQ:

PSHG) from

the completion

of Performance

Shipping Inc.

(ex. Diana

89

Containerships Inc.)’s

private offering

until February 2011.

From 1990

until 1994,

Mr.

Fotiadis served

as

the President and

Managing Director of Reckitt

& Colman (Greece),

part of the

British multinational Reckitt

&

Colman

plc,

manufacturers

of

household,

cosmetics

and

health

care

products.

From

1981

until

its

acquisition in 1989

by Reckitt &

Colman plc, Mr.

Fotiadis was a

General Manager at

Dr. Michalis

S.A., a

Greek company manufacturing and marketing cosmetics and health care products. From 1978 until

1981,

Mr.

Fotiadis held

positions

with

Esso

Chemicals Ltd.

and

Avrassoglou

S.A.

Mr.

Fotiadis

has

also

been

active as a business consultant and real estate developer.

Mr.

Fotiadis

holds

a

degree

in

Economics

from

Technische

Universitaet

Berlin

and

in

Business

Administration from Freie Universitaet Berlin.

Simon Morecroft

has served as

a Director of

Diana Shipping Inc.

since May 2022.

He also serves

as a

Director of Enarxis Ltd,

a shipping consultancy

company. Mr. Morecroft spent his career in the

shipbroking

industry

as

a

Sale

and

Purchase

broker.

He

joined

Braemar

Shipbrokers

Ltd

(now

Braemar

ACM

Shipbroking) in 1983 becoming

a director in 1986

and remained on the

board until his retirement

in August

2021.

During

this

time

Braemar

grew

from

a

boutique

broking

operation

into

one

of

the

world’s

most

successful fully integrated shipbroking companies with a listing on

the London Stock Exchange.

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

Jane Chao

has served

as a

Director of

Diana Shipping

Inc. since

February 2023.

She also

serves as

a

director of

Wah

Kwong Shipping

Holdings Limited,

a position

she has

held since

2008. Ms.

Chao is

the

managing

director

of

Wah

Kwong

China

Investment

which

comprises

of

residential

and

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

is the Co-Chief Financial Officer of Diana Shipping Inc. since January 2025. Prior to this role,

Ms. Dede served as the Company’s Chief Accounting Officer starting in September 2005. In addition, Ms.

Dede has served

as the 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.

In 2000, Ms.

Dede joined the Athens branch of Arthur Andersen, which merged with Ernst and Young (Hellas) in 2002,

where she served as an external

auditor of shipping companies until 2005. From

1996 to 2000 Ms. Dede

was

employed

by

Venus

Enterprises

S.A.,

a

ship-management company,

where

she

held

a

number

of

positions primarily in accounting and supplies.

Ms. Dede holds a Bachelor’s

degree in Maritime Studies

from the University of

Piraeus, a Master’s

degree

in Business

Administration from the

ALBA Graduate Business

School and a

Master’s degree in

Auditing

and Accounting from the Greek Institute of Chartered Accountants.

Margarita

Veniou

has

served

as

the

Chief

Corporate

Development,

Governance

&

Communications

Officer of Diana

Shipping Inc. since

July 2022. From

September 2004 until June

2022, she served in

the

Corporate

Planning

&

Governance

Department

of

Diana

Shipping

Inc.,

holding

various

positions

as

Associate,

Officer

and

Manager.

Ms.

Veniou

is

also

the

Corporate

Development,

Governance

&

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

2004 to 2022

she held

various other

positions at

Diana Shipping

Services S.A.

In addition,

since November

2021, Ms. Veniou has served

as the Chief

Corporate Development &

Governance Officer of

OceanPal Inc.

(NASDAQ: OP) 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

&

90

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.

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.

Before

joining

Diana

Shipping,

Ms.

Tsemani

was

People

Acquisition

and

Development Manager of

Vodafone Greece.

During her career in

Vodafone from

2008 to 2020,

she held

various

other

positions,

including

Senior

HR

Business

Partner

and

Organizational

Effectiveness

and

Reward

Manager.

From

2004

to

2008,

Ms.

Tsemani

worked

as

a

Senior

HR

Consultant

in

PricewaterhouseCoopers (PwC). From

2001 to

2004, she

served as

a Project Manager

in the

European

Commission, based in Luxembourg.

Ms. Tsemani

holds a

bachelor’s degree

in Mathematical

Sciences and

a Master’s

of Science

in Applied

Statistics from the University of Oxford, UK.

B.

Compensation

Aggregate executive

compensation (including

amounts paid

to Steamship)

for 2024

was $6.2

million. Since

June 1, 2010, Steamship, a related party,

as described in "Item 7. Major Shareholders and

Related Party

Transactions—B. Related

Party Transactions"

has provided

to us

brokerage services.

Under the

Brokerage

Services

Agreements

in

effect

during

2024,

fees

for

2024

amounted

to

$4.1

million

and

we

also

paid

commissions

for

vessel

sales

and

purchases

amounting to

$0.5

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 2024, fees

and expenses of our non-executive directors amounted to $0.6

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, 9,144,759 shares remain reserved for issuance under the Plan.

91

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.

Under

the

terms

of

the

Plan,

the

Company’s

Board

of

Directors

is

able

to

grant

(a)

non-qualified stock

options, (b) stock appreciation rights,

(c) restricted stock, (d)

restricted stock units, (e)

unrestricted stock,

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

dividend equivalents and (h) cash awards. No options

or stock appreciation

rights can be

exercisable subsequent to the

tenth anniversary of

the date on

which

such

Award

was

granted.

Under

the

Plan,

the

Administrator

may

waive

or

modify

the

application

of

forfeiture of awards

of restricted stock

and performance

shares in connection

with cessation of

service with

the Company.

No Awards

may be

granted under

the Plan

following the

tenth anniversary

of the

date on

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

January 8, 2031).

During

2024

and

as

of

the

date

of

this

annual

report,

our

board

of

directors

awarded

an

aggregate

of

2,300,000 shares and

2,000,000 shares, respectively,

of restricted common

stock, awarded to

executive

and non-executive directors.

All restricted shares

vest ratably over

three years and are

subject to forfeiture

until they vest. 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

2024,

compensation costs

relating

to

the

aggregate

amount

of

restricted

stock

awards

amounted to

$10.0 million.

C.

Board Practices

We

have

established

an

Audit

Committee,

comprised

of

two

board

members,

which

is

responsible

for

reviewing

our

accounting

controls,

recommending

to

the

board

of

directors

the

engagement

of

our

independent auditors,

and pre-approving

audit and

audit-related

services and

fees. Each

member has

been

determined by our

board of directors

to be “independent”

under the rules

of the NYSE

and the rules

and

regulations of

the SEC.

As directed

by its

written charter, the

Audit Committee

is responsible

for appointing,

and overseeing the

work of the

independent auditors,

including reviewing

and approving their

engagement

letter

and

all

fees

paid

to

our

auditors,

reviewing

the

adequacy

and

effectiveness

of

the

Company's

accounting

and

internal

control

procedures

and

reading

and

discussing

with

management

and

the

independent auditors the

annual audited

financial statements. The

members of

the Audit

Committee are

Mr. Kyriacos

Riris (chairman and financial

expert) and Mr.

Apostolos Kontoyannis (member and

financial

expert).

We

have established

a Compensation

Committee comprised

of two

members, which,

as directed

by its

written charter, is responsible

for setting the

compensation of

executive officers of

the Company, reviewing

the Company’s incentive

and equity-based

compensation plans,

and reviewing

and approving

employment

and severance

agreements. The

members of

the Compensation

Committee are

Mr. Apostolos Kontoyannis

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

We have established

a Nominating

Committee comprised

of two

members, which,

as directed

by its

written

charter,

is responsible

for identifying,

evaluating and

making recommendations

to the

board of

directors

concerning individuals for selections as

director nominees for the

next annual meeting of

stockholders or

to

otherwise

fill

board

of

director

vacancies.

The

members

of

the

Nominating

Committee

are

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

We have established a Sustainability

Committee comprised of Mr. Apostolos Kontoyannis

(Chairman) and

Ms.

Semiramis

Paliou

(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.

92

We

have

established

an

Executive

Committee

comprised

of

Ms.

Semiramis

Paliou

(Chairperson),

Mr.

Anastasios

Margaronis

(member),

Mr.

Ioannis

Zafirakis

(member),

and

Mr.

Eleftherios

Papatrifon

(member).

The

Executive

Committee

has,

to

the

extent

permitted

by

law,

the

powers

of

the

Board

of

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

We

also

maintain

directors’

and

officers’

insurance,

pursuant

to

which

we

provide

insurance

coverage

against certain

liabilities to

which our

directors and

officers may

be subject,

including liability

incurred under

U.S.

securities law.

Our executive

directors have

employment

agreements, which,

if terminated

without

cause, entitle them to continue

receiving their basic salary through the date of the agreement’s expiration.

Clawback Policy

In December 2023,

our Board

of Directors

adopted a policy

regarding the

recovery of erroneously

awarded

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

NYSE and Section 10D and

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

an accounting restatement due to

material noncompliance with any

financial reporting requirements under

U.S. securities

laws or

otherwise erroneous

data or

if we

determine there

has been

a significant

misconduct

that causes material financial, operational

or reputational harm, we shall

be entitled to recover a portion

or

all of

any incentive-based

compensation, if

any,

provided to

certain executives

who, during

a three-year

period

preceding

the

date

on

which

an

accounting

restatement

is

required,

received

incentive

compensation

based

on

the

erroneous

financial

data

that

exceeds

the

amount

of

incentive-based

compensation the executive would have received based on

the restatement.

Our

Clawback

Policy

shall

be

administered

by

our

Compensation Committee

who

has

the

authority,

in

accordance with

the applicable

laws, rules

and regulations,

to interpret

and make

determinations

necessary

for the administration of the

Clawback Policy,

and may forego recovery in

certain instances, including if it

determines that recovery would be impracticable.

D.

Employees

We crew our vessels

primarily with Greek officers and Filipino officers

and seamen and may also employ

seamen from Poland,

Romania and

Ukraine. DSS

and DWM are

responsible for identifying

the appropriate

officers

and

seamen

mainly

through

crewing

agencies.

The

crewing

agencies

handle

each

seaman's

training, travel

and payroll.

The management

companies ensure

that all

our seamen

have the

qualifications

and licenses required to comply

with international regulations and shipping conventions. Additionally,

our

seafaring

employees

perform

most

commissioning

work

and

supervise

work

at

shipyards

and

drydock

facilities. We

typically man

our vessels

with more crew

members than

are required by

the country of

the

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

duties.

The

following

table

presents

the

number

of

shoreside

personnel

employed

by

DSS

and

the

number

of

seafaring

personnel

employed

by

our

vessel-owning

subsidiaries

as

of

December

31,

2024,

2023

and

2022.

Year Ended December 31,

2024

2023

2022

Shoreside

11

7

11

2

113

Seafaring

864

906

907

Total

981

1,018

1,020

93

E.

Share Ownership

With respect to

the total amount

of common shares,

Series B Preferred

Shares, Series C

Preferred Shares

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

and as a group, see “Item

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

F.

Disclosure of Registrant's Action to Recover Erroneously Awarded

Compensation

Not applicable.

Item 7.

Major Shareholders and Related Party Transactions

A.

Major Shareholders

The following table

sets forth information

regarding ownership

of our common

stock of which

we are aware

as of the

date of this

annual report, for (i) beneficial

owners of five

percent or more of

our common stock

and

(ii) our

officers

and

directors,

individually

and

as

a

group.

All

of

our

shareholders,

including

the

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

of common stock held.

Title of Class

Identity of Person or Group

Number of

Shares Owned

Percent of

Class

*

Common Stock,

Semiramis Paliou (1)

24,719,462

20.3%

par value $0.01

Anastasios Margaronis (2)

10,505,922

8.8%

Sea Trade Holdings Inc. (3)

14,682,781

12.7%

F.

Laeisz GmbH (4)

6.305.426

5.4%

All other officers and directors as a group (5)

12,573,796

10.8%

* Based on 115,767,861 common shares outstanding as of March 20, 2025.

(1)

Mrs. Semiramis Paliou indirectly may be deemed to beneficially own 20.3% beneficially owned

through Tuscany Shipping Corp., or Tuscany,

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

of her ability to

control the vote and

disposition of such entities.

The shares include 5,802,034

shares

of

common

stock

issuable

to

Semiramis Paliou

upon

exercise

of

3,527,501

warrants

distributed on December 14, 2023. As of December 31, 2022, 2023 and 2024, Mrs. Semiramis

Paliou

owned

indirectly

16.0%,

20.3%

and

18.4%,

respectively,

of

our

outstanding

common

stock. Additionally,

Mrs. Paliou

owns, through

Tuscany,

10,675 shares

of Series

C Preferred

Stock, par value $0.01 per share, and 400

shares of Series D Preferred Stock,

par value $0.01

per share. The

Series C Preferred Stock

vote with our common

shares and each share

of the

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

vote of

the common

stockholders of

the Company. Each

share of

Series D

Preferred Stock

shall

entitle the holder thereof to

two hundred thousand (200,000) votes

on all matters submitted to

a vote of

the stockholders of the

Company, provided however,

that, notwithstanding any other

provision of the

Series D Preferred Stock

statement of designation, to

the extent that

the total

number of votes one

or more holders of

Series D Preferred Stock is

entitled to vote (including

any voting

power of

such holders

derived from

Series D

Preferred Stock,

shares of

Common

Stock or any other

voting security of

the Company issued

and outstanding

as of the date

hereof

or that

may be

issued in

the future)

on any

matter submitted

to a

vote of

stockholders of

the

Company would exceed 36.0% of the total

number of votes eligible to be cast

on such matter,

the total

number of votes

that holders

of Series D

Preferred Stock may

exercise derived from

the Series D Preferred Stock together with Common Shares and any

other voting securities of

94

the Company beneficially

owned by such

holder, shall

be reduced to

36% of the

total number

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

stockholders.

(2)

Mr. Anastasios

Margaronis,

our

President

and

a

member

of

our

board

of

directors

may

be

deemed to beneficially

own Anamar Investments

Inc. and ESX Investments

Inc. as the result

of

his ability to

control the vote

and disposition of

such entities. These

shares include 2,948,820

shares

of

common

stock

issuable

to

Anastasios

Margaronis

upon

exercise

of

1,792,814

warrants distributed on December 14, 2023.

(3)

This

information

is

derived from

a

Schedule 13G/A

filed

with

the

SEC on

January

29,

2025,

adjusting the percentage figure based

on the common shares issued

and outstanding as of the

date of this report.

(4)

This

information

is

derived

from

a

Schedule

13G

filed

with

the

SEC

on

October

18,

2024,

adjusting the percentage figure based

on the common shares issued

and outstanding as of the

date of this report.

(5)

Ms. Semiramis

Paliou

and

Mr. Anastasios

Margaronis

are

our

only

directors

or

officers

that

beneficially

own

5%

or

more

of

our

outstanding

common

stock.

Mr.

Simeon

Palios

may

be

deemed

to

beneficially

own

5,533,206

shares,

or

4.7%

of

our

outstanding

common

stock,

beneficially owned

through Taracan

Investments S.A.

and Limon

Compania Financiera

S.A.;

Mr.

Ioannis

Zafirakis

may

be

deemed

to

beneficially

own

2,437,232

shares,

or

2.1%

of

our

outstanding common

stock, beneficially

owned through

Abra Marinvest

Inc.; and Mr. Eleftherios

Papatrifon may

be deemed

to beneficially

own 1,292,717

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 20,

2025, we

had 78

shareholders of record,

64 of

which were located

in the

United States

and

held

an

aggregate

of

102,793,930

of

our

common

shares,

representing

82.1%

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 101,729,866

of our

common shares as

of that

date. Accordingly,

we believe

that the

shares held

by CEDE

& CO.

include common

shares beneficially

owned by

both holders

in the United

States and

non-U.S. beneficial

owners. We are

not aware of

any arrangements,

the operation

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

Holders

of

the

Series

B

Preferred

Shares

generally

have

no

voting

rights

except

(1)

in

respect

of

amendments to the Articles of

Incorporation which would adversely alter

the preferences, powers or rights

of

the

Series

B

Preferred

Shares

or

(2)

in

the

event

that

we

propose

to

issue

any

parity

stock

if

the

cumulative dividends payable

on outstanding Preferred

Stock are in

arrears or any

senior stock.

However,

if and whenever

dividends payable

on the

Series B

Preferred Shares

are in

arrears for

six or

more quarterly

periods, whether or not consecutive, holders

of Series B Preferred Shares (voting together

as a class with

all

other

classes

or

series

of

parity

stock

upon

which

like

voting

rights

have

been

conferred

and

are

exercisable) will

be entitled to

elect one additional

director to serve

on our

board of directors

until such time

as all accumulated and unpaid dividends on the Series B Preferred

Shares have been paid in full.

B.

Related Party Transactions

OceanPal Inc.,

or OceanPal

We own 500,000

of OceanPal’s

Series B

Preferred Shares,

207 shares

of OceanPal’s

Series C

Convertible

Preferred Shares and 3,649,474 common shares, being 49% of

OceanPal’s common stock.

95

Series

B

Preferred

Shares

entitle

the

holder

to

2,000

votes

on

all

matters

submitted

to

vote

of

the

stockholders of the

Company,

provided however,

that the total

number of votes

shall not exceed

34% of

the total

number of

votes, provided

further, that the

total number

of votes

entitled to

vote, including

common

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

Series C Preferred Shares do

not have voting rights unless

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 $10,000.

Dividend

income from the OceanPal preferred shares during 2024 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

its newly-designated Series

D Preferred Stock,

par value $0.01

per

share,

to

Tuscany

Shipping

Corp.,

an

entity

controlled

by

its

Chief

Executive

Officer,

Mrs.

Semiramis

Paliou, for

an aggregate

purchase price

of

$360,000. The

Series D

Preferred Stock

has no

dividend or

liquidation rights.

Each share of

Series D Preferred

Stock shall entitle

the holder thereof

to two hundred

thousand (200,000) votes on all

matters submitted to a vote of

the stockholders of the Company, provided

however, that, notwithstanding

any other provision of

Series D Preferred Stock

statement of designation,

to the extent that

the total number of votes

one or more holders

of Series D Preferred Stock

is entitled to

vote (including

any voting

power of

such holders

derived from

Series D

Preferred Stock,

shares of

Common

Stock or

any other

voting security

of the

Company issued

and outstanding

as of

the date

hereof or

that

may

be

issued

in

the

future)

on

any matter

submitted to

a

vote

of

stockholders of

the

Company

would

exceed 36.0% of

the total number

of votes eligible

to be cast

on such matter, the total

number of votes

that

96

holders of Series D Preferred Stock

may exercise derived from the Series

D Preferred Stock together with

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

be reduced

to 36%

of the

total number

of votes

that may

be cast

on such

matter submitted

to a

vote of

stockholders. The Series D Preferred Stock is

transferable only to the holder’s immediate

family members

and to affiliated

persons. The issuance of

shares of Series

D Preferred Stock to

Tuscany Shipping Corp.

was approved by an

independent committee of the Board

of Directors of the

Company, which

received a

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

from a financial point of view

to the Company.

Series C Preferred Stock

In January 2019, we issued 10,675

shares of newly-designated Series C

Preferred Stock, par value $0.01

per share, to an

affiliate of our Chairman, Mr.

Simeon Palios.

In September 2020, the Series

C Preferred

Shares

were

transferred

from

an

affiliate

of

Mr.

Simeon

Palios

to

an

affiliate

of

the

Company’s

Chief

Executive Officer,

Mrs. Semiramis Paliou. The

Series C Preferred Stock

vote with the common

shares of

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

of the stockholders

of the Company. The

Series C

Preferred Stock

has no dividend

or liquidation

rights and

cannot be transferred without the consent of the

Company except to the holder’s affiliates and immediate

family members.

The issuance

of shares

of Series

C Preferred

Stock was

approved by

an independent

committee of the

Board of Directors,

which received

a fairness opinion

from an independent

third party that

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

Steamship Shipbroking Enterprises Inc.

Steamship,

an

affiliated

entity

controlled

by

our

CEO

Ms.

Semiramis

Paliou,

provides

to

us

brokerage

services for

an annual

fee pursuant

to a

Brokerage Services

Agreement.

In 2024,

brokerage fees

amounted

to $4.1 million

and we paid

an additional

amount of

$0.5 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, 2025 due to expire on December 31, 2025.

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 2024, amounted

to $2.6 million.

Diana Wilhelmsen Management Limited

Diana Wilhelmsen

Management Limited,

or DWM,

is a

50/50 joint

venture which

provides management

services

to

certain

vessels

in

our

fleet

for

a

fixed

monthly

fee

and

commercial

services

charged

as

a

percentage

of

the

vessels’

gross

revenues.

Management

fees

in

2024

amounted

to

$1.3

million,

commissions on revenues amounted to $0.4 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

the $150.0 million

senior unsecured bond

issued on July

2, 2024, on

the date

of issuance.

Bergen Ultra

Bergen Ultra,

or Bergen,

is a

limited partnership

which owns

a dry

bulk carrier.

One of

our subsidiaries,

Diana

General

Partner

Inc.,

owns

3%

of

the

partnership

and

acts

as

the

General

Partner

and

another

subsidiary, Komi Shipping

Company Inc.,

owns 22%

of the

partnership.

The remaining

partnership interests

97

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

corporate guarantee with Nordea

to secure Bergen’s

obligations under

a $15.4

million loan

facility and

a commission

agreement under

which

the

Company

is

paid

a

commission

of

0.8%

per

annum,

on

the

outstanding

balance

of

the

loan,

as

compensation for the

guarantee it

provided to Nordea.

We have also

entered into

an administrative

service

agreement

under

which

DSS

provides

administrative

services

to

Bergen.

In

2024,

income

from

administrative

fees

amounted

to

$15,000

and

we

received

$116,395

as

payment

for

the

guarantee

commission.

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.

As

of

December

31,

2024,

the

investment

in

Windward amounted

to $36.6

million consisting

of advances

to fund

the construction

of the

vessels,

working

capital and our portion in Windward’s results.

Diana Mariners Inc.

In

2023,

we

acquired

through

one

of

our

subsidiaries,

Cebu

Shipping

Company

Inc.,

or

Cebu,

24%

of

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,

2024, our investment in Diana Mariners amounted to $0.4

million and there

was an amount

of $0.1 million

due from Diana

Mariners. As of

December 31, 2024,

Diana

Mariners did not have any operations.

C.

Interests of Experts and Counsel

Not Applicable.

98

Item 8.

Financial information

A.

Consolidated statements and other financial information

See “Item 18. Financial Statements.”

Legal Proceedings

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

had, a significant effect on

our business, financial position,

results of operations

or liquidity, nor are we aware of

any proceedings that

are pending or

threatened which may

have a significant

effect on our

business, financial position, results

of

operations

or

liquidity.

From time

to

time,

we may

be

subject to

legal proceedings

and

claims in

the

ordinary course of business,

principally personal injury

and property casualty

claims. We expect that

these

claims

would be

covered by

insurance, subject

to

customary deductibles.

Those claims,

even if

lacking

merit, could result in the expenditure of significant financial and

managerial resources.

Dividend Policy

Our board

of directors reviews

and amends our

dividend policy from

time to

time in

light of

our business

plans

and

other

factors. In

order

to

position

us

to

take

advantage

of

market

opportunities

in

a

then-

deteriorating

market,

our

board

of

directors,

beginning

with

the

fourth

quarter

of

2008,

suspended

our

common stock dividend. As a result of improving

market conditions in 2021, our board of directors

elected

to declare quarterly dividends

with respect to the

third quarter of 2021

and for each quarter

thereafter, until

the

fourth

quarter

of

2024

and

two

special

noncash

dividends,

as

described

in

Item

4A.

History

and

development of the Company.

The declaration and payment

of dividends will

always be subject to the

discretion of our board

of directors.

The

timing

and

amount

of

any

dividends

declared

will

depend

on,

among

other

things,

our

earnings,

financial condition and

cash requirements and

availability, our ability to obtain

debt and equity

financing on

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

law affecting

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

such as our lenders imposing restrictions on

our

ability

to

pay

dividends

under

the

terms

of

our

loan

facilities,

may

limit

our

ability

to

pay

dividends.

Further,

under the

terms of

our loan

agreements, we

may not

be permitted

to pay

dividends

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

99

in part, the Series B Preferred Shares at

a redemption price of $25.00 per share plus an

amount equal to

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

whether or not declared.

Marshall Islands

law provides that

we may

pay dividends on

and redeem the

Series B

Preferred Shares

only to the

extent that assets

are legally available

for such purposes.

Legally available

assets generally

are

limited to our surplus, which essentially represents our retained earnings

and the excess of consideration

received by us for

the sale of shares

above the par value

of the shares. In

addition, under Marshall

Islands

law we

may not

pay dividends

on or

redeem Series

B Preferred

Shares if

we are

insolvent or

would be

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

of such redemption.

B.

Significant Changes

There have

been no

significant changes

since the

date of

the

annual consolidated

financial statements

included in

this annual

report, other

than those

described in

Note 17

“Subsequent events”

of our

annual

consolidated financial statements.

Item 9.

The Offer and Listing

A.

Offer and Listing Details

The

trading market

for

shares of

our

common stock

is the

NYSE, on

which our

shares trade

under the

symbol “DSX” 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.

100

Item 10.

Additional Information

A.

Share Capital

Not Applicable.

B.

Memorandum and Articles of Association

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

amended and restated

bylaws are filed

as exhibit 1.2

hereto. The information contained

in these exhibits

is incorporated by reference herein.

Information

regarding

the

rights,

preferences

and

restrictions

attaching

to

each

class

of

our

shares

is

described

in

Exhibit 2.8

to

this

annual

report

titled

“Description

of

Securities

Registered

Pursuant

to

Section 12 of the Securities Exchange Act of 1934.”

Stockholders Rights Agreement

On

February 2,

2024, we

entered

into

an

Amended and

Restated Stockholders

Rights

Agreement with

Computershare

Trust

Company,

N.A.,

as

Rights

Agent,

to

amend

and

restate

the

Stockholders

Rights

Agreement, dated January 15, 2016.

Under the Amended

and Restated

Stockholders Rights

Agreement, we

declared a

dividend payable

of one

preferred

stock

purchase

right,

or

Right,

for

each

share

of

common

stock

outstanding

at

the

close

of

business

on

January 26,

2016.

Each Right

entitles the

registered

holder to

purchase from

us

one one-

thousandth of a share of Series

A participating preferred stock, par value $0.01

per share, at an exercise

price of $25.00 per share. The

Rights will separate from the common stock and

become exercisable only

if a person or

group acquires beneficial

ownership of 15% or

more of our common

stock (including through

entry

into

certain

derivative

positions)

in

a

transaction

not

approved

by

our

Board

of

Directors.

In

that

situation, each holder of a Right (other than the

acquiring person, whose Rights will become void and will

not be exercisable)

will have the

right to purchase,

upon payment

of the exercise

price, a number

of shares

of our

common stock having

a then-current market

value equal to

twice the

exercise price. In

addition, if

the Company

is acquired

in a

merger or

other business

combination after

an acquiring

person acquires

15% or more

of our common

stock, each holder

of the Right

will thereafter

have the right

to purchase, upon

payment of the

exercise price, a

number of shares

of common stock

of the acquiring

person having a

then-

current market value equal

to twice the exercise price.

The acquiring person

will not be entitled

to exercise

these Rights.

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

February 1, 2034. A copy of the

Amended and Restated Stockholders Rights Agreement and a summary

of its

terms are

contained in

the Form

8-A12B filed

with the

SEC on

January 15,

2016, with

file number

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

C.

Material Contracts

Attached as exhibits

to this annual

report are the

contracts we consider

to be both

material and not

entered

into in the ordinary

course of business,

which (i) are

to be performed

in whole or

in part on

or after the

filing

date

of this

annual report

or (ii)

were entered

into not

more than

two years

before the

filing date

of this

annual report.

Other than these agreements, we have no material

contracts, other than contracts entered

into in

the ordinary

course of

business, to

which the

Company or

any member

of the

group is

a party.

A

description of these is

included in our description

of our agreements generally:

we refer you to Item

5.B for

a discussion of our loan facilities.

101

D.

Exchange Controls

Under

Marshall

Islands,

Panamanian,

Cypriot

and

Greek

law,

there

are

currently

no

restrictions on

the

export or import of

capital, including foreign exchange controls or restrictions

that affect the remittance

of

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

E.

Taxation

In the

opinion of

Seward & Kissel

LLP,

the following is

a discussion of

the material Marshall

Islands and

U.S. federal

income

tax

considerations

of

the

ownership

and

disposition

by

a

U.S. Holder

and

a

Non-

U.S. Holder,

each as defined

below,

of the

common stock. This

discussion does not

purport to deal

with

the

tax

consequences

of

owning

common

stock

to

all

categories

of

investors,

some

of

which,

such

as

dealers in

securities or

commodities, financial

institutions, insurance

companies, tax-exempt

organizations,

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

tax, persons who hold common stock

as part

of

a

straddle,

hedge,

conversion

transaction

or

integrated

investment,

U.S. Holders

whose

functional

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

purposes

no

later

than

when

such

income

is

reported

on

an

“applicable

financial

statement,”

investors

subject to the “base erosion and

anti-avoidance” tax

and investors that own, actually or

under applicable

constructive ownership

rules, 10%

or more

of the

Company’s common

stock, may

be subject

to special

rules.

This

discussion

deals

only

with

holders

who

hold

the

common

stock

as

a

capital

asset.

You

are

encouraged to consult your own

tax advisors concerning the

overall tax consequences arising

in your own

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

ownership of common stock.

Marshall Islands Tax Considerations

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

Islands law, the company is

not subject to

tax on income

or capital gains,

and no Marshall

Islands withholding tax

will be imposed

upon

payments of dividends by us to our shareholders.

United States Federal Income Taxation

The

following

discussion

is

based

upon

the

provisions

of

the

U.S.

Internal

Revenue

Code

of

1986,

as

amended

(the

“Code”),

existing

and

proposed

U.S.

Treasury

Department

regulations,

(the

“Treasury

Regulations”),

administrative

rulings,

pronouncements

and

judicial

decisions,

all

as

of

the

date

of

this

Annual Report.

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

in

the United States. Unless the context otherwise

requires, the reference to Company below

shall be meant

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

subsidiaries.

Taxation of the Company’s Shipping Income

In General

The Company anticipates that it will derive substantially

all of its gross income from the use and operation

of

vessels

in

international

commerce

and

that

this

income

will

principally

consist

of

freights

from

the

transportation

of

cargoes,

hire

or

lease

from

time

or

voyage

charters

and

the

performance

of

services

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

Income.”

Shipping Income that is attributable

to transportation that begins or

ends, but that does not

both begin and

end,

in

the

United

States

will

be

considered

to

be

50%

derived

from

sources

within

the

United

States.

Shipping

Income

attributable

to

transportation

that

both

begins

and

ends

in

the

United

States

will

be

considered to be

100% derived from

sources within the

United States. The

Company is not

permitted by

law

to

engage in

transportation that

gives rise

to

100% U.S. source

Shipping Income.

Shipping Income

attributable to

transportation exclusively

between non-U.S. ports

will be

considered to

be

100% derived

102

from sources outside the United States. Shipping Income

derived from sources outside the United States

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

Based upon the

Company’s anticipated

shipping operations,

the Company’s vessels

will operate

in various

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

under

Section 883

of

the

Code,

the

Company

will

be

subject

to

U.S. federal

income

taxation,

in

the

manner

discussed below,

to the extent

its Shipping Income

is considered derived

from sources within

the United

States.

In

the

year

ended

December

31,

2024,

approximately

6.1%

of

the

Company’s

shipping

income

was

attributable to the transportation of cargoes either to or from a U.S. port. Accordingly, approximately 3.1%

of

the

Company’s

shipping

income

would

be

treated

as

derived

from

U.S. sources

for

the

year

ended

December 31, 2024. 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, 2024.

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

2024

taxable

year,

the

Company

believes

that

it

is

unlikely

that

the

50%

Ownership

Test

was

satisfied.

Therefore,

the

eligibility

of

the

Company

and

each

subsidiary

to

qualify

for

exemption

under

Section 883

of the

Code is

wholly dependent

upon the

Company’s

ability

to

satisfy the

Publicly Traded

Test.

Under

the

Treasury

Regulations,

stock

of

a

foreign

corporation

is

considered

“primarily

traded”

on

an

established

securities market

in

a

country

if

the

number

of

shares of

each

class

of

stock

that

is traded

during the taxable year on

all established securities markets in

that country exceeds the number

of shares

in

each

such

class that

is traded

during that

year

on

established securities

markets in

any

other single

country.

The Company’s

common stock

was “primarily

traded” on

the NYSE

during the

2024 taxable

year.

Under the Treasury Regulations, the Company’s common

stock will be considered to

be “regularly traded”

on the NYSE

if: (1) more than

50% of its

common stock, by voting

power and total

value, is listed

on the

103

NYSE, referred

to as

the “Listing

Threshold”, (2) its

common stock

is traded

on the

NYSE, other

than in

minimal

quantities, on

at

least

60 days

during

the

taxable

year

(or

one-sixth of

the

days

during

a

short

taxable year),

which is

referred to

as the

“Trading Frequency

Test”; and (3) the

aggregate number

of shares

of its common stock traded on the NYSE during

the taxable year is at least 10% of

the average number of

shares of its common stock outstanding

during such taxable year (as appropriately

adjusted in the case of

a short taxable year), which is referred to as the “Trading Volume

Test”.

The Trading Frequency Test

and

Trading Volume Test are deemed

to be

satisfied under

the Treasury

Regulations if

the Company’s

common

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

stock.

The Company believes

that its

common stock has

satisfied the Listing

Threshold, as well

as the Trading

Frequency Test

and Trading Volume Tests,

during the 2024 taxable year.

Notwithstanding the foregoing, the Treasury

Regulations provide, in pertinent part,

that stock of a

foreign

corporation

will

not

be

considered

to

be

“regularly

traded”

on

an

established

securities

market

for

any

taxable year during which 50%

or more of such stock

is owned, actually or constructively under specified

stock

attribution

rules,

on

more

than

half

the

days

during

the

taxable

year

by

persons,

or

“5%

Shareholders”,

who

each

own

5%

or

more

of

the

value

of

such

stock,

or

the

“5%

Override

Rule.”

For

purposes

of

determining

the

persons

who

are

5%

Shareholders,

a

foreign

corporation

may

rely

on

Schedules 13D and 13G filings with the SEC.

Based on Schedules 13D and 13G filings, during the 2024 taxable year,

less than 50% of the Company’s

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

Company believes that it is not subject to

the 5% Override Rule

and thus has satisfied

the Publicly Traded Test for the 2024 taxable

year.

However,

there

can

be

no assurance

that the

Company will

continue

to

satisfy the

Publicly Traded

Test

in

future

taxable

years. For

example,

the

Company

could

be

subject

to

the

5%

Override

Rule

if

another

5%

Shareholder in

combination with

the Company’s

existing 5%

Shareholders were

to own

50% or

more of

the Company’s

common stock.

In such a

case, the Company

would be subject

to the 5%

Override Rule

unless

it

could

establish that,

among the

shares of

the

common

stock owned

by

the

5%

Shareholders,

sufficient shares are

owned by

qualified shareholders,

for purposes

of Section

883 of

the Code,

to preclude

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

the

number of

days during

the

taxable year.

The requirements

of establishing

this exception

to the

5%

Override Rule are onerous and there is no assurance the

Company will be able to satisfy them.

Based

on

the

foregoing,

the

Company

believes

that

it

satisfied

the

Publicly

Traded

Test

and

therefore

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

under Section 883 of the Code, during the 2024

taxable year and intends to take this position on its 2024 U.S. federal

income tax returns.

Taxation in Absence of Exemption Under Section 883 of the Code

To

the

extent the

benefits of

Section

883

of

the

Code

are

unavailable with

respect

to

any

item

of

U.S.

source Shipping Income, the Company and each of its subsidiaries

would be subject to a 4% tax imposed

on such income

by Section 887 of

the Code on

a gross basis, without

the benefit of

deductions, which is

referred to as

the “4%

Gross Basis Tax Regime”. Since

under the sourcing

rules described

above, no

more

than 50%

of the

Company’s Shipping

Income would

be treated

as being

derived from

U.S. sources,

the

maximum effective

rate of

U.S. federal

income tax

on the

Company’s Shipping

Income would

never exceed

2% under the 4% Gross Basis Tax Regime.

Based

on

its

U.S.

source Shipping

Income

for

the

2024

taxable

year

and

in

the

absence

of

exemption

under Section 883

of the Code,

the Company would

be subject to

$0.3 of U.S.

federal income tax

under

the 4% Gross Basis Tax Regime.

The 4%

Gross Basis

Tax Regime would not apply

to U.S. source

Shipping Income

to the extent

considered

to be

“effectively connected”

with the

conduct of

a U.S.

trade or

business.

In the

absence of

exemption

104

under Section

883 of

the Code,

such “effectively

connected” U.S.

source Shipping

Income, net

of applicable

deductions, would be

subject to U.S.

federal income tax

currently imposed at

a rate of

21%.

In addition,

earnings

“effectively

connected”

with

the

conduct

of

such

U.S.

trade

or

business,

as

determined

after

allowance for certain adjustments, and certain

interest paid or deemed paid attributable to

the conduct of

the U.S. trade or

business may be

subject to U.S.

federal branch profits

tax imposed at

a rate of 30%.

The

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

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

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

or business

in the United States involved in the earning

of Shipping Income; and (2) substantially

all of the Company’s

U.S. source Shipping Income

is attributable to regularly

scheduled transportation, such

as the operation

of

a vessel that followed

a published schedule with

repeated sailings at regular

intervals between the same

points for voyages that begin or

end in the United States, or,

in the case of income from

the chartering of

a vessel,

is attributable

to a

fixed place

of business

in the

United States.

We

do not

intend to

have, or

permit

circumstances that

would result

in

having a

vessel

operating to

the

United

States on

a regularly

scheduled basis.

Based on the foregoing and on

the expected mode of our shipping

operations and other

activities, we believe that

none of our

U.S. source Shipping Income

will be effectively

connected with the

conduct of a U.S. trade or business.

Gain on Sale of Vessels

Regardless of whether we

qualify for exemption under

Section 883 of the Code,

we will not be

subject to

U.S.

federal

income

taxation

with

respect

to

gain

realized

on

a

sale

of

a

vessel,

provided

the

sale

is

considered to

occur outside

of the

United States under

U.S. federal

income tax

principles.

In general,

a

sale of a

vessel will

be considered

to occur

outside of

the United States

for this

purpose if

title to the

vessel,

and risk of

loss with respect

to the vessel,

pass to the

buyer outside of

the United States.

It is expected

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

the United States.

United States Taxation of U.S. Holders

The

following

is

a

discussion

of

the

material

U.S.

federal

income

tax

considerations

relevant

to

an

investment decision

by a

U.S. Holder, as

defined below, with

respect to

our common

stock. This discussion

does

not

purport

to

deal

with

the

tax

consequences

of

owning

our

common

stock

to

all

categories

of

investors,

some

of

which may

be

subject to

special rules. You

are

encouraged to

consult your

own tax

advisors

concerning

the

overall

tax

consequences

arising

in

your

own

particular

situation

under

U.S.

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

As used

herein, the

term “U.S.

Holder” means

a beneficial

owner of our

common stock

that (i)

is a

U.S.

citizen or resident, a

U.S. corporation or other U.S.

entity taxable as a corporation,

an estate, the income

of which

is subject to

U.S. federal income

taxation regardless of

its source, or

a trust if

(a) a

court within

the

United

States is

able to

exercise primary

jurisdiction over

the

administration of

the trust

and one

or

more U.S. persons

have the authority

to control all

substantial decisions

of the trust

or (b) it

has an election

in

place

to

be

treated

as

a

United

States

person;

and

(ii)

owns

the

common

stock

as

a

capital

asset,

generally, for investment purposes.

If

a partnership

holds our

common stock,

the

tax treatment

of

a partner

will generally

depend upon

the

status of the partner and

upon the activities of the

partnership. If you are a partner

in a partnership holding

our common stock, you are encouraged to consult your own

tax advisor on this issue.

Distributions

Subject to

the discussion of

passive foreign investment

companies below,

any distributions made

by the

Company with respect to its common

stock to a U.S. Holder will

generally constitute dividends, which

may

be

taxable

as

ordinary

income

or

“qualified

dividend

income”

as

described

in

more

detail

below,

to

the

extent of

the Company’s

current or

accumulated earnings

and profits,

as determined

under U.S.

federal

105

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

and profits will be treated first as

a non-taxable return of capital

to the extent of the U.S. Holder’s

tax basis in his common stock

on a dollar-

for-dollar basis

and thereafter

as capital

gain. Because

the Company

is not

a U.S.

corporation,

U.S. Holders

that are corporations will generally not

be entitled to claim a dividends-received deduction with respect

to

any distributions they receive from the Company.

Dividends paid to a

U.S. Holder which is

an individual, trust, or

estate, referred to herein

as a “U.S. Non-

Corporate

Holder,”

will

generally

be

treated

as

“qualified dividend

income”

that

is

taxable

to

Holders

at

preferential U.S.

federal income

tax rates,

provided that

(1) the common

stock is

readily tradable

on an

established securities

market in

the United

States (such

as the

NYSE on

which the

common stock

is listed);

(2) the Company

is not

a PFIC

for the

taxable year

during which the

dividend is

paid or

the immediately

preceding taxable year (which the Company does

not believe it is, has

been or will be); (3) the

U.S. Non-

Corporate Holder

has owned

the common

stock for

more than

60 days in

the 121-day

period beginning

60 days before

the date

on which

the common

stock becomes

ex-dividend; and

(4) the

U.S. Non-Corporate

Holder is not

under an obligation

(whether pursuant to

a short sale

or otherwise) to

make payments with

respect to positions in

substantially similar or related property.

There is no assurance that

any dividends

paid on our common stock

will be eligible for

these preferential rates in

the hands of a U.S.

Non-Corporate

Holder. Any dividends paid by the Company which

are not eligible for these

preferential rates will be taxed

as

ordinary

income

to

a

U.S.

Non-Corporate

Holder.

Special

rules

may

apply

to

any

“extraordinary

dividend,” generally, a dividend paid

by us in an amount which is equal to or in

excess of ten percent of a

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

value in certain circumstances, in a

share of our common

stock.

If

we

pay

an

“extraordinary dividend”

on

our

common stock

that

is

treated

as “qualified

dividend

income,” then

any loss

derived by

a U.S. Individual

Holder from

the

sale or

exchange of

such common

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

Sale, Exchange or other Disposition of Common Stock

Subject to the

discussion of the

PFIC rules below,

a U.S. Holder

generally will recognize

taxable gain or

loss upon

a sale,

exchange or

other disposition

of the

Company’s common

stock in

an amount

equal to

the

difference

between

the

amount

realized

by

the

U.S.

Holder

from

such

sale,

exchange

or

other

disposition and

the U.S.

Holder’s tax

basis in

such stock. Such

gain or

loss will

be treated

as long-term

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

at the

time of the sale,

exchange or other disposition. Long-term capital

gain of a U.S.

Non-Corporate Holder is

taxable

at

preferential U.S.

Federal income

tax

rates.

A

U.S.

Holder’s ability

to

deduct capital

losses

is

subject to certain limitations.

PFIC Status and Significant Tax Consequences

Special

U.S.

federal

income

tax

rules

apply

to

a

U.S.

Holder

that

holds

stock

in

a

foreign

corporation

classified as a passive foreign investment company,

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

general, the

Company will

be treated

as a

PFIC with

respect to

a U.S.

Holder if,

for any

taxable year

in

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

•

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

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

than in the

active conduct of a rental business), or

•

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

during such

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

income.

For purposes of determining whether

the Company is a PFIC, the

Company will be treated as earning

and

owning its proportionate

share of the income and

assets, respectively, of any of its subsidiary

corporations

in which it owns at least 25% of the

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

earned, by

106

the

Company

in

connection

with

the

performance

of

services

would

not

constitute

passive

income. By

contrast, rental

income would

generally constitute

passive income

unless the

Company is

treated under

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

a trade or business.

Based on the Company’s

current operations and future projections, the

Company does not believe that it

is,

nor

does

it

expect

to

become,

a

PFIC

with

respect

to

any

taxable

year. Although

there

is

no

legal

authority directly

on point,

the Company’s

belief is

based principally on

the position

that, for

purposes of

determining

whether

the

Company

is

a

PFIC,

the

gross

income

the

Company

derives

or

is

deemed

to

derive from

the

time

chartering and

voyage chartering

activities of

its

wholly-owned subsidiaries

should

constitute services income,

rather than rental

income. Correspondingly, the

Company believes that

such

income

does

not

constitute

passive

income,

and

the

assets

that

the

Company

or

its

wholly-owned

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

the vessels,

do

not

constitute

assets

that

produce

or

are

held

for

the

production

of

passive

income

for

purposes of

determining whether the

Company is

a PFIC.

The Company

believes there

is substantial

legal authority

supporting its position consisting

of case law and

Internal Revenue Service, or

the “IRS”, pronouncements

concerning

the

characterization

of

income

derived

from

time

charters

and

voyage

charters

as

services

income for

other tax

purposes. However, there

is also

authority which characterizes

time charter

income

as rental

income rather

than services

income for

other tax

purposes.

It should

be noted

that in

the absence

of any

legal authority specifically

relating to

the statutory

provisions governing PFICs,

the IRS

or a

court

could

disagree

with

this

position. In

addition,

although

the

Company

intends

to

conduct

its

affairs

in

a

manner to

avoid being classified

as a

PFIC with respect

to any taxable

year, there

can be no

assurance

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

As discussed more fully below,

if the Company were to

be treated as a PFIC for

any taxable year,

a U.S.

Holder

would

be

subject

to

different

U.S.

federal

income taxation

rules

depending on

whether the

U.S.

Holder makes an

election to treat

the Company as

a “Qualified Electing Fund,”

which election is referred

to as

a “QEF

Election.” As

discussed below,

as an

alternative to

making a

QEF Election,

a U.S.

Holder

should be

able to

make a

“mark-to-market” election with

respect to

the common

stock, which

election is

referred to

as a

“Mark-to-Market Election”.

If the

Company were

to be

treated as

a PFIC,

a U.S.

Holder

would be

required to

file with

respect to

taxable years

ending on

or after

December 31,

2013 IRS

Form

8621 to report certain information regarding the Company.

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

If a U.S. Holder makes a

timely QEF Election, which U.S. Holder

is referred to as an “Electing

Holder”, the

Electing

Holder

must

report

each

year

for

U.S.

federal

income

tax

purposes

his

pro

rata

share

of

the

Company’s ordinary earnings and

net capital gain, if any, for the Company’s

taxable year that ends

with or

within the taxable year of the

Electing Holder, regardless of

whether or not distributions were received by

the Electing Holder from the Company.

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

be

increased

to

reflect

amounts

included

in

the

Electing

Holder’s income.

Distributions received

by

an

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

the adjusted tax

basis in

the common

stock and

will not

be taxed

again once

distributed. An Electing

Holder would

generally

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

of the common stock.

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

Alternatively,

if the

Company were

to be

treated as

a PFIC

for any

taxable year

and, as

anticipated, the

common stock is treated

as “marketable stock,” a

U.S. Holder would be

allowed to make a

Mark-to-Market

Election with respect to the Company’s

common stock. If that election is made, the

U.S. Holder generally

would include as

ordinary income

in each

taxable year the

excess, if

any,

of the

fair market

value of

the

common

stock

at

the

end

of

the

taxable

year

over

such

Holder’s

adjusted

tax

basis

in

the

common

stock. The U.S. Holder

would also be

permitted an

ordinary loss in

respect of

the excess, if

any, of the U.S.

Holder’s adjusted tax basis in the

common stock over its fair

market value at the end

of the taxable year,

107

but only

to the

extent of

the net

amount previously

included in

income as

a result

of the

Mark-to-Market

Election. A U.S. Holder’s tax

basis in his

common stock would

be adjusted to

reflect any such

income or

loss

amount. Gain

realized

on

the

sale,

exchange

or

other

disposition

of

the

common

stock

would

be

treated as

ordinary income,

and any

loss realized

on the

sale, exchange

or other

disposition of

the common

stock would

be treated

as ordinary

loss to

the extent

that such

loss does

not exceed

the net

mark-to-market

gains previously included by the U.S. Holder.

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

Finally,

if the

Company were

to be

treated as

a PFIC

for any

taxable year,

a U.S.

Holder who

does not

make

either a

QEF

Election or

a Mark-to-Market

Election for

that

year,

whom

is

referred to

as a

“Non-

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

federal income tax rules with respect to

(1) any excess

distribution (i.e., the portion of any

distributions received by the Non-Electing

Holder on the common stock

in a

taxable year

in excess

of 125%

of the

average annual

distributions received

by the

Non-Electing Holder

in

the

three

(3)

preceding

taxable

years,

or,

if

shorter,

the Non-Electing Holder’s

holding

period

for

the

common

stock),

and

(2) any

gain

realized

on

the

sale,

exchange

or

other

disposition

of

the

common

stock. Under these special rules:

•

the excess distribution

or gain

would be

allocated ratably

over the Non-Electing

Holder’s

aggregate holding period for the common stock;

•

the

amount

allocated

to

the

current

taxable

year

and

any

taxable

years

before

the

Company became a PFIC would be taxed as ordinary income;

and

•

the amount allocated

to each

of the other

taxable years would

be subject to

tax at

the

highest

rate

of

tax

in

effect

for

the

applicable class

of

taxpayer

for

that

year,

and

an

interest charge

for the

deemed tax

deferral benefit

would be

imposed with

respect to

the resulting tax attributable to each such other taxable year.

These penalties would not

apply to a pension

or profit sharing trust

or other tax-exempt organization that

did not borrow

funds or otherwise

utilize leverage in

connection with its

acquisition of

the common stock.

If

a Non-Electing Holder who is an individual dies while

owning the common stock, such Holder’s successor

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

to such stock.

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

A beneficial owner of

our common stock that is

not a U.S. Holder (other

than a partnership) is referred

to

herein as a “Non-U.S. Holder.”

Dividends on Common Stock

Non-U.S.

Holders

generally

will

not

be

subject

to

U.S.

federal

income

or

withholding

tax

on

dividends

received from us

with respect to

our common stock,

unless that income

is effectively

connected with the

Non-U.S. Holder’s conduct of a trade

or business in the United States.

If the Non-U.S. Holder is entitled

to

the benefits of

a U.S. income

tax treaty with

respect to those

dividends, that income

is taxable in

the United

States only if

attributable to a permanent

establishment maintained by the Non-U.S.

Holder in the United

States.

Sale, Exchange or Other Disposition of Common Stock

Non-U.S.

Holders

generally

will

not

be

subject

to

U.S.

federal

income

or

withholding

tax

on

any

gain

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

stock, unless:

•

the

gain

is

effectively

connected

with

the

Non-U.S.

Holder’s

conduct

of

a

trade

or

business in the United States. If

the Non-U.S. Holder is entitled to

the benefits of a U.S.

108

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

the United States only

if attributable

to a

permanent establishment maintained

by the

Non-U.S. Holder

in the

United States; or

•

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

in the United States for 183 days or

more during the taxable year of disposition and other conditions

are met.

If the

Non-U.S. Holder

is engaged

in a

U.S. trade

or business

for U.S.

federal income

tax purposes,

the

income

from

our

common

stock,

including

dividends

and

the

gain

from

the

sale,

exchange

or

other

disposition

of

the

common

stock,

that

is

effectively

connected

with

the

conduct

of

that

U.S.

trade

or

business

will

generally

be

subject

to

U.S.

federal

income

tax

in

the

same

manner

as

discussed

in

the

previous section relating

to the taxation

of U.S. Holders.

In addition, in

the case of

a corporate Non-U.S.

Holder, such Holder’s

earnings and

profits that

are attributable

to the effectively

connected income,

subject

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

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

tax treaty.

Backup Withholding and Information Reporting

In general, dividend

payments, or other

taxable distributions, made

within the United States

to a holder will

be subject to U.S.

federal information reporting requirements. Such payments will

also be subject to

U.S.

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

•

fails to provide an accurate taxpayer identification number;

•

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

required to be

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

•

in certain circumstances, fails to comply with applicable certification

requirements.

Non-U.S.

Holders

may

be

required

to

establish

their

exemption

from

information

reporting

and

backup

withholding by certifying their status on an applicable IRS Form

W-8.

If a holder sells

his common stock to

or through a U.S.

office of a broker,

the payment of the

proceeds is

subject to

both backup

withholding and

information reporting

unless the

holder establishes

an exemption. If

a holder sells

his common

stock through a

non-U.S. office of

a non-U.S. broker

and the sales

proceeds are

paid to the holder

outside the United States, then information

reporting and backup withholding generally

will not

apply to

that payment. However,

information reporting requirements,

but not

backup withholding,

will apply to

a payment of

sales proceeds, including

a payment made

to a holder

outside the United

States,

if the holder

sells his common

stock through a

non-U.S. office of

a broker that

is a U.S.

person or has

some

other contacts with the United States.

Backup

withholding

is

not

an

additional

tax. Rather,

a

taxpayer

generally

may

obtain

a

refund

of

any

amounts

withheld

under

backup

withholding

rules

that

exceed

the

taxpayer’s

U.S.

federal

income

tax

liability by filing a refund claim with the IRS.

U.S. Holders who

are individuals (and

to the extent

specified in applicable

Treasury Regulations, certain

U.S. entities) who

hold “specified foreign financial

assets” (as defined

in Section 6038D of

the Code) are

required to

file

IRS Form

8938 with

information relating

to

the

asset for

each taxable

year

in

which the

aggregate value of all such assets

exceeds $75,000 at any time during

the taxable year or $50,000

on the

last

day

of

the

taxable

year

(or

such

higher

dollar

amount

as

prescribed

by

applicable

Treasury

Regulations).

Specified foreign

financial assets

would include,

among other

assets, our

common stock,

unless the

common stock

is held

through an

account maintained

with a

U.S. financial

institution. Substantial

penalties

apply

to

any

failure

to

timely

file

IRS

Form

8938,

unless

the

failure

is

shown

to

be

due

to

reasonable cause

and not

due to

willful neglect.

Additionally, in the

event a

U.S. Holder

who is

an individual

(and to

the

extent specified

in applicable

Treasury

regulations, a

U.S. entity)

that is

required to

file IRS

109

Form

8938

does

not

file

such

form,

the

statute

of

limitations

on

the

assessment

and

collection of

U.S.

federal income

taxes of

such holder

for the

related tax

year may

not close

until three

(3) years

after the

date that the required information is filed.

Changes in Global Tax Laws

Long-standing

international

tax

initiatives

that

determine

each

country’s

jurisdiction

to

tax

cross-border

international trade and profits are evolving

as a result of, among

other things, initiatives such as the

Anti-

Tax

Avoidance

Directives,

as

well

as

the

Base

Erosion

and

Profit

Shifting

reporting

requirements,

mandated

and/or

recommended

by

the

EU,

G8,

G20

and

Organization

for

Economic

Cooperation

and

Development, including the imposition of a minimum global

effective tax rate for multinational businesses

regardless of the jurisdiction of operation

and where profits are generated (Pillar

Two). As these and other

tax laws and

related regulations change (including

changes in the

interpretation, approach and guidance

of tax

authorities), our

financial results

could be

materially impacted.

Given the

unpredictability of

these

possible changes and their potential

interdependency, it

is difficult to

assess whether the overall effect

of

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

but

such changes could adversely affect our financial results.

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

Pillar Two

global corporate

minimum tax

rate of

15% on

companies with

revenues of

at least

€750 million effective

from 2024. Various countries have either

adopted implementing legislation

or are in the

process of drafting

such

legislation. Any

new

tax

law

in

a

jurisdiction

where

we

conduct

business

or

pay tax

could

have

a

negative effect on our company.

F.

Dividends and paying agents

Not Applicable.

G.

Statement by experts

Not Applicable.

H.

Documents on display

We file reports

and other information with

the SEC. These materials,

including this annual report

and the

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

I.

Subsidiary information

Not Applicable.

J.

Annual Report to Security Holders

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

format as an exhibit to a

current report on Form 6-K.

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

Interest Rates

We

are

exposed to

market risks

associated with

changes

in

interest rates

relating to

our

loan facilities,

according to which we were paying interest at term SOFR plus a margin.

Increases in interest rates could

110

affect

our

results

of

operations.

An

increase

of

1%

in

the

interest

rates

of

our

loan

facilities

bearing

a

variable interest rate during 2024, could have increased our interest

cost by $3.8 million.

We

will

continue

to

have

debt

outstanding,

which

could

impact

our

results

of

operations

and

financial

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

a mix of financing under agreements

with floating and

fixed interest rates.

More specifically, during 2022, we refinanced

part of our loans

having

a floating interest

rate, with sale

and leaseback

transactions with fixed

rates. Also, in

2023, we entered

into

an interest rate swap for

$30 million under which we

pay fixed interest and receive

floating. Through these

agreements and

our bond,

also bearing

fixed interest

rate, we

manage part

of our

exposure in

interest rates

caused by the remaining agreements which bear floating interest rates.

As of December

31, 2024, 2023

and 2022, and

as of the

date of this

annual report, we

did not and

have

not designated any financial instruments as accounting hedging

instruments.

Currency and Exchange Rates

We generate all of our

revenues in U.S. dollars

but currently incur less

than half of our

operating expenses

(around 29% in 2024 and

around 29% in 2023) and about

half of our general and administrative

expenses

(around 46% in 2024 and around

44% in 2023) in currencies other

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

For

accounting

purposes,

including

throughout

this

annual

report,

expenses

incurred

in

Euros

are

converted

into

U.S.

dollars

at

the

exchange rate

prevailing on

the

date

of

each transaction.

Because a

significant portion of our

expenses are incurred in currencies

other than the U.S.

dollar, our expenses may

from time to

time increase relative

to our revenues

as a result

of fluctuations in

exchange rates, particularly

between

the

U.S.

dollar

and

the

Euro,

which

could

affect

our

results

of

operations

in

future

periods.

Currently,

we

do

not

consider

the

risk

from

exchange

rate

fluctuations

to

be

material

for

our

results

of

operations,

as

during

2024

and

2023,

these

non-US

dollar

expenses

represented

17%

and

15%,

respectively

of

our

revenues

and

therefore,

we

are

not

engaged

in

derivative

instruments

to

hedge

a

considerable part of those expenses.

While we

historically have

not mitigated

the risk

associated with

exchange rate

fluctuations through

the use

of financial

derivatives, we

may determine

to employ

such instruments

from time

to time

in the

future in

order to

minimize this

risk. Our

use of

financial derivatives

would involve

certain risks,

including the

risk

that losses on a hedged position could exceed

the nominal amount invested in the instrument

and the risk

that

the

counterparty

to

the

derivative

transaction

may

be

unable

or

unwilling

to

satisfy

its

contractual

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

Item 12.

Description of Securities Other than Equity Securities

Not Applicable.

111

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.

Material Modifications to the Rights of Security Holders and

Use

of Proceeds

None.

Item 15.

Controls and Procedures

a) Disclosure Controls and Procedures

Management,

including

our

Chief

Executive

Officer

and

Chief

Financial

Officers,

has

conducted

an

evaluation of

the effectiveness

of our

disclosure controls and

procedures (as

defined in

Rules 13a-15(e)

and 15d-15(e) under the

Exchange Act) as of

the end of the

period covered by this

annual report. Based

upon

that

evaluation,

our

Chief

Executive

Officer

and

Chief

Financial 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, 2024 is effective.

The registered

public accounting firm

that audited

the financial

statements included

in this

annual report

containing

the

disclosure

required

by

this

Item

15

has

issued

an

attestation

report

on

management's

assessment of our internal control over financial reporting.

112

c)

Attestation Report of Independent Registered Public

Accounting Firm

The attestation report

on the Company’s

internal control over

financial reporting issued

by the registered

public

accounting

firm

that

audited

the

Company’s

consolidated

financial

statements,

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 this

Annual Report.

Copies of

our code

of ethics

are available

in print,

free of

charge, upon

request to

Diana Shipping

Inc., Pendelis

16, 175

64 Palaio

Faliro, Athens,

Greece. We intend

to

satisfy

any

disclosure requirements

regarding

any

amendment to,

or waiver

from,

a

provision of

this

code of ethics by posting such information on our website.

Item 16C. Principal Accountant Fees and Services

a) Audit Fees

Our

principal

accountants,

Deloitte

Certified

Public

Accountants

S.A.,

have

billed

us

for

audit

services

provided

in

2024

and

Ernst

and

Young

(Hellas), Certified

Auditors Accountants

S.A., have

billed us

for

audit services

provided in

2023. Audit

fees in

2024 and

2023 amounted

to €

360,000 and

€ 383,250,

or

approximately $388,000 and $416,000, 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.

113

b) Audit-Related Fees

Audit related fees during 2024

amounted to € 51,301, as compared

to € 22,050 in 2023 and

relate to audit

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

c) Tax Fees

During

2023,

we

paid

fees

amounting

to

$11,025,

for

the

calculation

of

Earnings

and

Profits

of

the

Company. The

services were provided by Ernst & Young

LLP,

an affiliate of our principal accountants for

2023.

d) All Other Fees

None.

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

Our

Audit

Committee

is

responsible

for

the

appointment,

replacement,

compensation,

evaluation

and

oversight of the work

of our independent auditors. As

part of this responsibility,

the Audit Committee pre-

approves the audit

and non-audit services performed

by the independent auditors

in order to

assure that

they

do not

impair the

auditor’s independence

from the

Company.

The Audit

Committee has

adopted a

policy

which

sets

forth

the

procedures

and

the

conditions

pursuant

to

which

services

proposed

to

be

performed by the independent auditors may be pre-approved.

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

50%

Not applicable.

Item 16D. Exemptions from the Listing Standards for Audit

Committees

Our Audit Committee

consists of

two independent

members of our

Board of

Directors. Otherwise,

our Audit

Committee

conforms

to

each

other

requirement

applicable

to

audit

committees

as

required

by

the

applicable listing standards of the NYSE.

Item

16E.

Purchases

of

Equity

Securities

by

the

Issuer

and

Affiliated

Purchasers

On May 23, 2014, we announced that our

Board of Directors authorized a share repurchase

plan for up to

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

plan does not have an expiration date. During 2024,

we did

not repurchase

any shares

of common

stock and

as of

December 31,

2024 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

On May

21, 2024,

the Audit

Committee of

the Board

of Directors

approved and

signed the

engagement

letter

appointing

Deloitte

Certified

Public

Accountants

S.A.

(“Deloitte”)

as

the

Company’s

independent

registered public accounting firm for the year ending December 31, 2024. The Company's annual general

114

meeting of

shareholders held

on May

21, 2024

approved such

appointment. The

audit committee

approved

the engagement of Deloitte following the expiration of the engagement

letter with the Company's previous

independent registered

public accounting

firm, Ernst &

Young (Hellas) Certified Auditors

Accountants S.A..

The reports of

Ernst & Young

(Hellas) Certified Auditors

Accountants S.A. on

the financial statements

of

the

Company

as

of

December

31,

2023

and

2022

did

not

contain

an

adverse

opinion

or

disclaimer

of

opinion

and

were

not

qualified

or

modified

as

to

uncertainty,

audit

scope

or

accounting

principles.

In

connection with

the audits

of the

Company’s financial

statements for

each of

the two

fiscal years

ended

December 31, 2023 and

2022 there were no

disagreements with Ernst

& Young (Hellas) Certified Auditors

Accountants S.A.

on any

matters of

accounting principles or

practices, financial statement

disclosure, or

auditing scope or procedures which,

if not resolved to the

satisfaction of Ernst &

Young

(Hellas) Certified

Auditors Accountants

S.A. ,

would have

caused Ernst

& Young (Hellas)

Certified Auditors

Accountants S.A.

to make reference to the

matter of such disagreements

in their reports. In

connection with the audits

of the

Company's financial statements

for each of the

two fiscal years ended

December 31, 2023 and

2022 none

of the events described in paragraphs (A) through (D) of Item 16F(a)(1)(v)

of Form 20-F occurred.

In connection with the audits of the Company’s financial statements

for each of the two fiscal years ended

December 31, 2023

and 2022 neither

the Company nor

anyone on its

behalf consulted with

Deloitte on the

application of accounting principles

to a specified transaction, either

completed or proposed; or

the type of

audit opinion that might

be rendered on the

Company’s financial statements

or any matter that

would have

been

the

subject of

a

disagreement, as

that

term

is

defined in

Item

16F(a)(1)(iv) of

Form

20-F and

the

to

Item

16F

of

Form

20-F,

or

a

reportable

event,

as

that

term

is

defined

in

Item

16F(a)(1)(v).

The

Company

has

provided Ernst

&

Young

(Hellas)

Certified Auditors

Accountants S.A.

with

a

copy

of

these disclosures prior to

the filing hereof and

has requested that Ernst & Young

furnish to the Company

a letter

addressed to

the Securities

and Exchange

Commission stating

whether Ernst

& Young

(Hellas)

Certified Auditors Accountants S.A. agrees with the statements

made by the Company in this report.

Ernst &

Young (Hellas) Certified

Auditors Accountants

S.A.’s letter

is attached

as Exhibit

16.1 to

this Annual

Report on Form 20-

F.

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.

115

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.

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.

116

Item 16K. Cybersecurity

Risk management and strategy

We have

security measures

in place

to mitigate the

risk of cybersecurity

threats affecting our

technology

environment and

our business.

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. Since 2023, the

Company

has maintained

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

and integrated

into our

broader enterprise

risk management

strategy, considering financial, operational, and compliance impacts.

Additionally,

we

have

established structured

processes

for

third-party

risk

management.

During

vendor

onboarding and

ongoing monitoring,

information security

assessments are

conducted, including

security

questionnaires, contractual

requirements for

NDAs and

DPAs, and cybersecurity

liability clauses

to mitigate

supply chain risks.

Cybersecurity training

is carried

out on

a company-wide

basis to

all employees

and seafarers.

To help build

cultural

awareness

of

these

risks

within

the

Company,

additional

phishing

campaigns

have

been

implemented within

the organization

which have

motivated the

staff to

react, helping

to enhance

awareness

of these risks and mitigate their occurrence. The security team have further

enhanced our processes and

increased our defenses by implementing a cybersecurity testing program,

carried out on a yearly basis by

external

consultants.

Penetration

testing

was

also

carried

out

in

parallel

during

2024.

A

centralized

monitoring

system,

powered

by

Microsoft's

cloud-based

Security

Information

and

Event

Management

(SIEM)

solution,

is

in

place

throughout

the

year.

This

system

aggregates

security

data

from

various

sources, uses built-in artificial

intelligence to detect and investigate

threats, and enables our security

team

to respond to incidents rapidly.

We have also created a comprehensive Business Continuity and Disaster

Recovery plan to ensure business resilience and minimize potential

disruptions.

For the

year 2025,

the security

team has

planned a

comprehensive

collaboration with

a

third-party

company

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

design and

implementation

of

a

multi-faceted

approach

to

staff

training,

encompassing

synchronous

and

asynchronous

security

awareness

sessions,

custom-tailored

phishing

campaigns

and

the

creation

of

informative cybersecurity awareness

newsletters to keep

our staff

up to date

on the latest

best practices

and emerging risks. Furthermore, the

collaboration will focus on the

customization and digitalization of our

vessels' cybersecurity awareness program, ensuring that our seafarers

maintain a robust security posture

while at sea.

In addition to

awareness initiatives, we will

continue to acquire

relevant tools to

support the

identification of

third-party

risks and further strengthen our overall security posture.

As

part

of

our

continuous

efforts

to

enhance

threat

detection

and

incident

response,

we

will

leverage

Security Operations

Center (SOC)

services through

a trusted

external provider. This

partnership will

enable

proactive

security

monitoring,

threat

intelligence,

and

rapid

incident

response,

further

reinforcing

our

cybersecurity resilience across both shore-based operations.

Additionally,

we

will

implement

a

disaster

recovery

site

to

the

cloud

for

critical

applications,

ensuring

business continuity and operational resilience in the event of

disruptions.

117

In parallel

to these security

measures, our Company

has established a

Data Management Platform

over

Microsoft

Azure

Technologies,

to

act

as

a

centralized

and

secure

source

of

truth

for

our

operations,

strengthening the quality and integrity

of company’s informational assets. The

Data Management Platform

was

integrated

with

our

core

systems

and

implementation

of

key

reports

was

initiated

within

2024,

delivering several

new Financial

Reports that

will enable

better,

faster and

more accurate

monitoring of

Company activities

and improve 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

enrich

our

operational

excellence

through

our

external

3rd

parties’

inspections and audits (PSC-Vetting inspections Audits). We openly

share our results and “lessons

learnt”

within the industry and organizations, we compare and

benchmark our performance and we continuously

improve our safety footprint.

Governance

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

the day-to-day oversight

of cybersecurity and

other technology risks

to the Cyber

Security Officer, who has

11 years of specialized information security experience.

This

experience

includes

serving

as

Cyber

Security

Officer

at

Diana

Shipping

Services,

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

Cyber

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 Cyber

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.

Our management

team plays

a vital

role in

assessing and

managing the

Company's material

risks from

cybersecurity threats. The Cyber 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

Cyber

Security

Officer

holds

biweekly

meetings

with

the

CEO

to

discuss

emerging threats, ongoing security initiatives, and strategic cybersecurity

priorities.

The

Cyber

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 Cyber

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.

118

Cybersecurity Threats

As of

the date

of this

annual report,

we have

not identifed

any cybersecurity threats

that have

materially

affected or are

reasonably likely

to materially

affect our business

strategy, results of operations,

or financial

condition. For more information about the cybersecurity risks we face, please see Item 3. Key Information

— D. Risk Factors — “A cyber-attack could materially disrupt our business.”

119

PART III

Item 17.

Financial Statements

See Item 18.

Item 18.

Financial Statements

The financial statements

required by this

Item 18 are

filed as a

part of this

annual report beginning

on page

F-1.

Item 19.

Exhibits

Exhibit

Number

Description

1.1

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

Shipping Investment Corp.) (1)

1.2

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

1.3

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

2021 (21)

1.4

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

LLC. dated July 7, 2021 (23)

1.5

Amendment No.2 to Equity Distribution Agreement between Diana Shipping Inc. and Maxim Group

LLC. Dated September 9, 2024 (10)

2.1

Form of Common Share Certificate (13)

2.2

Form of Series B Preferred Stock Certificate (16)

2.3

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

Shares of the Company (3)

2.4

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

2.5

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

Company Americas (5)

2.6

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

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

8.500% Senior Notes due 2020 (6)

2.7

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

Company (18)

2.8

Description of Securities

**

2.9

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

Preferred Stock of the Company (22)

2.10

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

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

4.1

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

4.2

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

4.3

Form of Technical Manager Purchase Option Agreement (8)

4.4

Form of Management Agreement (9)

4.5

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

Diana Shipping Services S.A. (11)

120

4.6

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

2015 (13)

4.7:

Right of First Refusal Agreement with OceanPal Inc.

(26)

4.8:

Amended and Restated Contribution and Conveyance Agreement with OceanPal Inc.

(26)

4.9:

Brokerage Services Agreement, dated February 25, 2025

**

4.10:

Loan Agreement dated June 26, 2023 with DNB Bank ASA

(26)

4.

11

:

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

(26)

4.12:

Loan Agreement dated October 18, 2024 with Danish Ship Finance A/S

**

4.13:

Loan Agreement dated July 25, 2025 with Nordea Bank ABP

**

8.1

Subsidiaries of the Company**

11.1

Amended Code of Ethics

**

11.2

Insider Trading Policy

**

12.1

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

**

12.2

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

**

13.1

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

to Section 906 of the Sarbanes-Oxley Act of 2002

**

13.2

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

to Section 906 of the Sarbanes-Oxley Act of 2002

**

15.1

Consent of Independent Registered Public Accounting Firm

**

15.2

Consent of Independent Registered Public Accounting Firm

**

16.1

Letter from Ernst & Young (Hellas) Certified Auditors Accountants S.A.

**

97.1

Policy Regarding the Recovery of Erroneously Awarded Compensation (25)

.

101

The following materials

from the Company's

Annual Report on

Form 20-F for

the fiscal year

ended

December 31, 2024,

formatted in eXtensible

Business Reporting Language

(XBRL): (i) Consolidated

Balance Sheets as of December 31, 2024 and 2023; (ii) Consolidated Statements of Income for the

years ended December 31,

2024, 2023 and

2022; (iii) Consolidated

Statements of Comprehensive

Income for

the years

ended December

31, 2024,

2023 and

2022; (iv)

Consolidated Statements

of

Stockholders'

Equity

for

the

years

ended

December

31,

2024,

2023

and

2022;

(v)

Consolidated

Statements

of

Cash

Flows

for

the

years

ended

December

31,

2024,

2023

and

2022;

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.

121

(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.

(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.

122

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

Dated: March 21, 2025

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-4

Report of Independent Registered Public Accounting Firm: Ernst

& Young (Hellas)

Certified Auditors Accountants S.A. (PCAOB ID No.

1457

)

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

F-6

Consolidated Balance Sheets as of December 31, 2024 and 2023

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

...

F-7

Consolidated Statements of Income for the years ended December

31, 2024, 2023 and

2022 ................................................................

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

..

F-8

Consolidated Statements of Comprehensive Income for the years

ended December 31,

2024, 2023 and 2022

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

.........

F-8

Consolidated Statements of Stockholders' Equity for the years

ended December 31,

2024, 2023 and 2022

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

.........

F-9

Consolidated Statements of Cash Flows for the years ended December

31, 2024, 2023

and 2022 ................................

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

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

F-

11

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

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

......

F-13

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 sheet of Diana Shipping Inc.

and subsidiaries (the “Company”)

as of December 31, 2024, the related consolidated

statement of income,

comprehensive income, stockholders’

equity,

and cash flows, for the year ended December

31, 2024, 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, 2024, and the results of its operations

and its cash flows for the year ended

December 31,

2024, 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, 2024, 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

21, 2025, 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 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 the financial statements

are free of material

misstatement, whether due to

error or fraud. Our audit 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.

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.

F-3

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 may

not

be recoverable. As at December

31, 2024, 12 out of 38 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 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 equal to the difference

between the vessel’s

carrying value 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 impairment analysis. 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 type of vessel, as such

averages take

into account the volatility and cyclicalit

y

of the market.

We identified future charter

rates on 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 they 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.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the future charter rates on vessels with impairment

indicators utilized 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 reasonableness of the Company’s estimate of future charter rates through

the performance of

the following procedures:

1.

Evaluating 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.

2.

Evaluating 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 21, 2025

We have served as the Company’s

auditor since 2024.

F-4

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, 2024, 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, 2024, 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, 2024, of the Company

and our report dated March 21, 2025, 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.

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

F-5

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 21, 2025

F-6

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Diana Shipping Inc.

Opinion on the Financial Statements

We have

audited the accompanying

consolidated balance

sheet of Diana

Shipping Inc. (the

Company) as

of

December 31,

2023, the

of income,

comprehensive income, stockholders'

equity and

cash

flows

for

each of

the two

years

in the

period ended

December 31,

2023,

and the

to as

the “consolidated

financial statements”).

In our

opinion, the

consolidated

financial statements present

fairly, in all material respects,

the financial

position of

the Company at

December

31, 2023,

and the

results of

its operations

and its

cash flows

for each

of the

two years

in the

period 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 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.

/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-7

DIANA SHIPPING INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2024 and 2023

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

for share and per share data)

2024

2023

ASSETS

Current Assets

Cash and cash equivalents (Note 2 (e))

$

124,666

$

101,592

Time deposits (Note 2 (e))

63,500

40,000

Accounts receivable, trade (Note 2 (f))

6,565

5,870

Due from related parties (Note 4)

194

149

Inventories (Note 2 (g))

4,193

5,056

Prepaid expenses and other assets

7,490

8,696

Investments in equity securities (Note 5(b))

-

20,729

Fair value of derivatives

-

129

Total Current Assets

206,608

182,221

Fixed Assets:

Advances for vessels under construction (Note 6)

19,558

-

Vessels, net (Note 6)

833,412

900,192

Property and equipment, net (Note 7)

27,175

24,282

Total fixed assets

880,145

924,474

Other Noncurrent Assets

Restricted cash, non-current (Notes 2(e) and 8)

19,000

20,000

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

155

319

Equity method investments (Note 4)

42,826

15,769

Investments in a related party (Notes 2(aa) and

5(a))

4,415

8,318

Other non-current assets

31

Deferred costs

17,838

15,278

Total Non-current Assets

964,410

984,189

Total Assets

$

1,171,018

$

1,166,410

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Long-term debt, current, net of deferred financing

costs (Note 8)

$

45,230

$

49,512

Finance liabilities, current (Note 9)

9,608

9,221

Accounts payable

8,990

9,663

Due to related parties (Note 3)

190

759

Accrued liabilities

11,896

12,416

Deferred revenue

4,235

3,563

Fair value of derivatives

31

-

Total Current Liabilities

80,180

85,134

Non-current Liabilities

Long-term debt, net of current portion and deferred

financing costs (Note 8)

469,387

461,131

Finance liabilities, net of current portion (Note 9)

113,300

122,908

Fair value of derivatives (Note 2 (dd))

134

568

Warrant liability (Note 11(e))

1,802

6,332

Other non-current liabilities

1,158

1,316

Total Noncurrent Liabilities

585,781

592,255

Commitments and contingencies (Note 10)

-

Stockholders' Equity

Preferred stock (Note 11)

26

Common stock, $

0.01

par value;

1,000,000,000

shares authorized and

125,203,405

and

113,065,725

issued and outstanding on December 31, 2024

and 2023, respectively (Note

11)

1,252

1,131

Additional paid-in capital

1,139,363

1,101,425

Accumulated other comprehensive income

312

308

Accumulated deficit

(635,896)

(613,869)

Total Stockholders' Equity

505,057

489,021

Total Liabilities and Stockholders' Equity

$

1,171,018

$

1,166,410

The accompanying notes are an integral part of

these consolidated financial statements.

F-8

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF INCOME

For the years ended December 31, 2024, 2023 and 2022

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

2024

2023

2022

REVENUES:

Time charter revenues

$

228,209

$

262,098

$

289,972

OPERATING EXPENSES

Voyage expenses

13,607

13,621

6,942

Vessel operating expenses

82,587

85,486

72,033

Depreciation and amortization of deferred charges

44,691

49,785

43,326

General and administrative expenses

33,435

32,968

29,367

Management fees to a related party (Note 4(a))

1,332

1,313

511

Gain on sale of vessels (Note 6)

(5,799)

(5,323)

(2,850)

Insurance recoveries

-

(1,789)

Other operating income

(422)

(1,464)

(265)

Operating income, total

$

58,778

$

85,712

$

142,697

OTHER INCOME/(EXPENSE)

Interest expense and finance costs (Note 13)

(47,468)

(49,331)

(27,419)

Interest and other income

8,369

8,170

2,737

Gain/(loss) on derivative instruments (Note 8)

274

(439)

-

Loss on extinguishment of debt (Note 8)

(3,475)

(748)

(435)

Gain on deconsolidation of subsidiary

-

844

-

Gain/(loss) on related party investments (Note 5(a))

(3,905)

1,502

589

Gain/(loss) on equity securities (Note 5(b))

(400)

2,813

-

Gain on warrants (Note 11(e))

719

1,583

-

Gain/(loss) from equity method investments (Note 4)

(146)

(262)

894

Total other expenses, net

$

(46,032)

$

(35,868)

$

(23,634)

Net income

$

12,746

$

49,844

$

119,063

Dividends on series B preferred shares (Notes 11(b) and 14)

(5,769)

Net income attributable to common stockholders

$

6,977

$

44,075

$

113,294

Earnings per common share, basic

(Note 14)

$

0.06

$

0.44

$

1.42

Earnings per common share, diluted

(Note 14)

$

0.05

$

0.42

$

1.36

Weighted average number of common shares outstanding,

basic

(Note 14)

115,956,249

100,166,629

80,061,040

Weighted average number of common shares outstanding,

diluted

(Note 14)

118,655,243

101,877,142

83,318,901

The accompanying notes are an integral part of these consolidated financial statements.

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

For the years ended December 31, 2024 and 2023 and 2022

(Expressed in thousands of U.S. Dollars)

2024

2023

2022

Net income

$

12,746

$

49,844

$

119,063

Other comprehensive income - Defined benefit plan

4

55

182

Comprehensive income

$

12,750

$

49,899

$

119,245

The accompanying notes are an integral part of these consolidated financial statements.

F-9

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

For the years ended December 31, 2024, 2023

and 2022

(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, 2021

2,600,000

$

26

10,675

$

-

400

$

-

84,672,258

$

847

$

982,537

$

71

$

(590,286)

$

393,195

Net income

-

119,063

Issuance of restricted

stock and

compensation cost

(Note 11(i))

-

1,470,000

15

9,267

-

9,282

Stock repurchased and

retired

(Note 11(e))

-

(820,000)

(8)

(3,791)

-

(3,799)

Issuance of common

stock

(Note 11(e))

-

877,581

9

5,313

-

5,322

Issuance of common

stock for vessel

acquisitions

(Note

11(e))

-

16,453,780

164

67,689

-

67,853

Dividends on series B

preferred stock

($

2.21875

per share)

(Note 11(d))

-

(5,769)

Dividends on common

stock ($

0.90

per share)

(Note 11(f))

-

(79,812)

Dividends in kind

(Note 11(g))

-

(18,189)

Other comprehensive

income

-

182

-

182

BALANCE,

December

31, 2022

2,600,000

$

26

10,675

$

-

400

$

-

102,653,619

$

1,027

$

1,061,015

$

253

$

(574,993)

$

487,328

Net income

-

49,844

Issuance of restricted

stock and

compensation cost

(Note 11(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 6,

11(e))

-

2,033,613

20

7,710

-

7,730

F-10

Dividends on series B

preferred stock

($

2.21875

per share)

(Note 11(b))

-

(5,769)

Dividends on common

stock ($

0.60

per share)

(Note 11(f))

-

(64,276)

Dividends in kind

(Note 11(g))

-

(10,761)

Warrants

(Note 11(h))

-

(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

Issuance of Restricted

Stock and

Compensation Cost

(Note 11(i))

-

2,300,000

23

9,989

-

10,012

Issuance of Common

Stock (Note 11(e))

-

9,837,680

98

27,949

-

28,047

Dividends on series B

preferred stock

($

2.21875

per share)

(Note 11(b))

-

(5,769)

Dividends on common

stock ($

0.235

per

share) (Notes 11(f))

-

(29,004)

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

The accompanying notes are an integral part of

these consolidated financial statements.

F-

11

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

For the years ended December 31, 2024, 2023 and 2022

(Expressed in thousands of U.S. Dollars)

2024

2023

2022

Cash Flows from Operating Activities:

Net income

$

12,746

$

49,844

$

119,063

Adjustments to reconcile net

income to cash provided

by operating

activities

Depreciation and amortization of deferred charges

44,691

49,785

43,326

Amortization of debt issuance costs (Note 13)

2,372

2,620

2,286

Compensation cost on restricted stock (Note 11(g))

10,012

9,938

9,282

Provision for credit loss

-

133

Dividend income (Note 5(a))

-

(3)

(100)

Pension and other postretirement benefits

4

55

182

(Gain)/loss on derivative instruments (Note 8)

(274)

439

-

Gain on sale of vessels (Notes 6)

(5,799)

(5,323)

(2,850)

(Gain)/loss on related party investments (Note 5)

3,905

(1,502)

(589)

Loss on extinguishment of debt

3,475

748

435

Gain on deconsolidation of subsidiary

-

(844)

-

(Gain)/loss from equity method investments (Note 4)

146

262

(894)

(Gain)/loss on equity securities (Note 5(b))

400

(2,813)

-

Gain on warrants (Note 11(e))

(719)

(1,583)

-

(Increase) / Decrease

Accounts receivable, trade

(695)

256

(3,427)

Due from related parties

119

(252)

736

Inventories

863

(511)

1,768

Prepaid expenses and other assets

1,247

(1,950)

(1,265)

Other non-current assets

-

70

(16)

Investments in equity securities

20,329

(17,916)

-

Increase / (Decrease)

Accounts payable, trade and other

(673)

(1,761)

1,465

Due to related parties

(569)

(57)

(72)

Accrued liabilities

(520)

282

3,956

Deferred revenue

672

(4,195)

2,026

Other non-current liabilities

(158)

437

(218)

Drydock cost

(8,044)

(5,646)

(16,368)

Net Cash Provided by Operating Activities

$

83,530

$

70,380

$

158,859

Cash Flows from Investing Activities:

Payments for vessels under construction and

vessel improvements

(Note 6)

(20,516)

(29,732)

(230,302)

Proceeds from sale of vessels, net of expenses (Note 6)

35,154

36,560

4,372

Payments to acquire investments (Note 4)

(27,203)

(10,595)

-

Time deposits (Note 2 (e))

(23,500)

6,500

(46,500)

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)

(3,718)

(2,006)

(667)

Net Cash Provided by/(Used) in Investing Activities

$

(39,783)

$

24,929

$

(273,097)

Cash Flows from Financing Activities:

Proceeds

from

issuance

of

long-term

debt

and

finance

liabilities

(Note 8)

117,150

57,696

275,133

Proceeds from

issuance of

common stock,

net of

expenses (Note

11(e))

24,195

-

5,266

Payments for issuance of common stock (Note 11(e))

-

(79)

-

Payments of dividends, preferred stock (Note 11(b))

(5,769)

Payments of dividends, common stock (Note 11(f))

(29,004)

(41,427)

(79,812)

Payments for repurchase of common stock

-

(3,799)

Payments of financing costs (Notes 8 and 9)

(5,238)

(1,724)

(3,302)

Repayments of long-term debt

and finance liabilities (Notes

8 and 9)

(123,007)

(79,842)

(102,839)

Net Cash Provided by/(Used) in Financing Activities

$

(21,673)

$

(71,145)

$

84,878

Cash,

Cash

Equivalents

and

Restricted

Cash,

Year

Increase/(Decrease)

22,074

24,164

(29,360)

F-12

Cash, Cash Equivalents and Restricted Cash, Beginning

Balance

121,592

97,428

126,788

Cash, Cash Equivalents and Restricted Cash, Ending Balance

$

143,666

$

121,592

$

97,428

RECONCILIATION OF CASH, CASH EQUIVALENTS

AND RESTRICTED CASH

Cash and cash equivalents

$

124,666

$

101,592

76,428

Restricted cash, non-current

19,000

20,000

21,000

Cash, Cash Equivalents and Restricted Cash, Total

$

143,666

$

121,592

$

97,428

SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash acquisition of assets

$

-

$

7,809

136,038

Non-cash debt assumed

-

20,571

Non-cash finance liability

-

47,782

Stock issued in noncash financing activities

3,852

7,809

67,909

Non-cash investments acquired

-

10,000

-

Noncash dividend

-

41,521

-

Transfer to Investments

-

1,370

Interest paid, net of amounts capitalized

$

46,257

$

46,473

21,306

The accompanying notes are an integral part of these consolidated financial statements.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-13

1.

Basis of Presentation and General Information

The accompanying consolidated financial statements include the accounts

of Diana Shipping Inc., or DSI,

and

its

wholly owned

subsidiaries (collectively,

the

“Company”). DSI

was formed

on

March 8, 1999

,

as

Diana

Shipping

Investment

Corp.,

under

the

laws

of

the

Republic

of

Liberia.

In

February

2005,

the

Company’s

articles

of

incorporation

were

amended.

Under

the

amended

articles

of

incorporation,

the

Company

was

renamed

Diana

Shipping

Inc.

and

was

re-domiciled

from

the

Republic

of

Liberia

to

the

Republic of the Marshall Islands.

The Company

is engaged

in the ocean

transportation of

dry bulk

cargoes worldwide

through the ownership

and

bareboat charter

in of

dry bulk

carrier vessels.

The Company

operates its

own fleet

through Diana

Shipping Services

S.A. (or

“DSS”), a

wholly owned

subsidiary and

through Diana

Wilhelmsen Management

Limited,

or

DWM,

a

50

%

owned

joint

venture

(Note

4(a)).

The

fees

paid

to

DSS

are

eliminated

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 a 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

and

disclosure

of

contingent

assets

and

liabilities at the date of the consolidated financial statements and the reported amounts

of revenues

and expenses during the reporting period.

Actual results could differ from those estimates.

c)

Other Comprehensive

Income /

(Loss):

The Company

separately presents

certain transactions,

which are

recorded directly

as components

of stockholders’

equity.

Other Comprehensive

Income/

(Loss) is presented in a separate statement.

d)

Foreign Currency Translation:

The functional currency of the Company is the U.S. dollar because

the

Company’s

vessels operate

in

international shipping

markets,

and therefore

primarily transact

business

in

U.S.

dollars.

The

Company’s

accounting

records

are

maintained

in

U.S.

dollars.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-14

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/(loss).

e)

Cash,

Cash Equivalents,

Time

Deposits and

Restricted Cash:

The Company

considers highly

liquid investments such as

time deposits, certificates of

deposit and their equivalents

with an original

maturity

of

up

to

three

months

to

be

cash

equivalents.

Time

deposits

with

maturity

above

three

months are

separately presented

as time

deposits. As

of December

31, 2024

and 2023,

time deposits

(with

maturity above

three

months)

amounted to

$

63,500

and

$

40,000

,

respectively.

During

2024

and 2023, the Company

placed new time deposits

exceeding three months of

$

63,500

and $

50,000

,

respectively,

and

during

the

same

periods,

deposits

of

$

40,000

and

$

56,500

matured.

Restricted

cash consists

mainly of

cash deposits

required to

be maintained

at all

times under

the Company’s

loan facilities

(Note

8) as

compensating cash

balances and

are not

pledged. As

of December

31,

2024 and 2023, accrued

interest income amounted to

$

605

and $

1,206

, respectively and is included

in prepaid expenses and other assets in the accompanying consolidated

balance sheets.

f)

Accounts Receivable, Trade:

The amount

shown as

accounts receivable, trade,

at each

balance

sheet date, includes

receivables from charterers

for hire from

lease agreements,

net of provisions

for

doubtful

accounts,

if

any.

At

each

balance

sheet

date,

all

potentially

uncollectible

accounts

are

assessed individually

for purposes of

determining the

appropriate provision

for doubtful accounts.

As

of December 31,

2024 and 2023 there

was

no

provision for doubtful accounts.

The Company does

not recognize interest income on trade receivables as all balances are

settled within a year.

g)

Inventories:

Inventories consist of lubricants and victualing which are stated, on a consistent

basis,

at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the

ordinary

course

of

business,

less

reasonably

predictable

costs

of

completion,

disposal,

and

transportation. When evidence exists that the net realizable value of inventory is lower than its cost,

the difference is recognized as a loss in

earnings in the period in

which it occurs. Cost is determined

by the first

in, first out method.

Amounts removed from inventory are

also determined by the

first in

first out method. Inventories may also consist of bunkers,

when on the balance sheet date, a vessel

is without

employment. Bunkers, if

any,

are also

stated at

the lower

of cost

or net

realizable value

and cost is determined by the first in, first out method.

h)

Vessel

Cost

: Vessels

are stated

at cost

which consists

of the

contract price

and any

capitalizable

expenditures

incurred

upon

acquisition

or

during

construction.

Expenditures

for

conversions

and

major improvements are

also capitalized when they

appreciably extend the

life, increase the earning

capacity or improve the efficiency or safety of the vessels; otherwise,

these amounts are charged to

expense as incurred. Interest 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 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

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-15

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.

j)

Sale

and

leaseback:

In

accordance

with

ASC

842-40,

in

a

sale

and

leaseback

transaction

the

Company,

as seller-lessee, determines

whether the transfer

of the

asset is

a sale

under ASC 606.

For a sale

to have occurred, the

control of the asset

would need to be

transferred to the buyer

and

the

buyer

would

need

to

obtain

substantially

all

the

benefits

from

the

use

of

the

asset.

Sale

and

leaseback transactions,

which include

an obligation for

the Company, as seller-lessee,

to repurchase

the

asset,

or

other

situations

where

the

leaseback

would

be

classified

as

a

finance

lease,

are

determined to

be failed

sales under

ASC 842-40.

In these

cases, the

Company does

not derecognize

the asset from its balance sheet and accounts for any amounts

received as financial liability.

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. When impairment

indicators are identified and

the estimate of

undiscounted projected

net operating

cash flows,

excluding interest

charges, expected

to be

generated by

the use

of an

asset

over

its

remaining

useful

life

and

its

eventual

disposition

is

less

than

its

carrying

amount,

the

Company evaluates the asset for impairment loss. Measurement of the

impairment loss is based on

the fair value of the asset, determined mainly by third party valuations.

For vessels,

the Company

calculates undiscounted

projected net

operating cash

flows by

considering

the historical

and estimated

vessels’ performance

and utilization

with the

significant assumption

being

future charter rates for

the unfixed days, using

the most recent

10

-year average of historical

1 year

time charter rates available for each type of vessel over the remaining estimated life of each vessel,

net of commissions. Historical ten-year blended average one-year time charter rates are in line with

the

Company’s

overall

chartering

strategy,

they

reflect

the

full

operating

history

of

vessels

of

the

same type and particulars with the Company’s operating fleet and they cover at least

a full business

cycle,

where

applicable.

When

the

10

-year

average

of

historical

1

year

time

charter

rates

is

not

available for a type

of vessel, the Company uses

the average of historical 1

year time charter rates

of the available

period. Other

assumptions used in

developing estimates

of future undiscounted

cash

flow are

charter rates calculated

for the

fixed days using

the fixed

charter rate of

each vessel from

existing time charters, the

expected outflows for scheduled

vessels’ maintenance; vessel operating

expenses; fleet utilization, and the

vessels’ residual value if sold for

scrap.

Assumptions are in line

with the

Company’s historical

performance and

its expectations

for future

fleet utilization

under its

current fleet deployment

strategy. This calculation is then compared

with the vessels’

net book value

plus

unamortized

deferred

costs.

The

difference

between

the

carrying

amount

of

the

vessel

plus

unamortized

deferred

costs

and

their

fair

value

is

recognized

in

the

Company's

accounts

as

impairment loss.

The Company’s impairment

assessment did not

result in the

recognition of impairment

on any vessel

and therefore

no

impairment loss was identified or recorded in 2024, 2023 and 2022.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-16

For

the

building,

the

Company

determines

undiscounted

projected

net

operating

cash

flows

by

considering the

estimated monthly rent

the Company would

have to

pay in order

to lease

a similar

building for a period equal to its remaining useful life.

No

impairment loss was identified or recorded

for 2024, 2023 and

2022 and the Company has

not identified any other facts

or circumstances that

would require the write down of the value of its land or building in

the near future.

m)

Vessel

Depreciation:

Depreciation is

computed using

the straight-line

method over

the estimated

useful

life

of

the

vessels,

after

considering

the

estimated

salvage

(scrap)

value.

Each

vessel’s

salvage

value

is

equal

to

the

product

of

its

lightweight

tonnage

and

estimated

scrap

rate.

Management estimates

the useful

life of

the Company’s vessels

to be

25 years

from the date

of initial

delivery from

the shipyard.

Second-hand vessels are

depreciated from the

date of

their acquisition

through their remaining estimated useful life. When regulations place limitations over the ability of a

vessel to trade on

a worldwide basis,

its remaining useful

life is adjusted at

the date such regulations

are

adopted.

Effective July 1, 2023, the Company reassessed the estimated scrap rate used to

calculate depreciation and, based on the average demolition prices in different markets during the

last 15 years, adjusted upwards the estimated scrap rate of its vessels. This change in estimate

resulted

in

increased

salvage

values,

decreased

depreciation

expense

and

increased

operating

income. Additionally, for

the period

from July

1, 2023

to December

31, 2023,

net income

and earnings

per share, basic and diluted, 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 whereby actual costs incurred are deferred and amortized on a straight-line basis over

the period

through the date

the next

survey is

scheduled to

become due.

Unamortized deferred

costs

of vessels that

are sold or impaired

are written off

and included in

the calculation of

the resulting gain

or loss in the year of the vessel’s sale (Note 6) or impairment.

o)

Financing Costs

: Fees

paid for

obtaining finance liabilities,

fees paid

to lenders

for obtaining

new

loans,

new bonds, refinancing or amending existing loans,

are deferred and recorded as a contra to

debt. Other

fees paid

for obtaining

loan facilities

not used

at the

balance sheet

date are

deferred.

Fees relating to

drawn loan facilities

are amortized to

interest and finance

costs over the

life of the

related debt

using the

effective interest method

and fees

incurred for

loan facilities not

used at

the

balance sheet date are amortized using

the straight-line method according to

their availability terms.

Unamortized

fees

relating

to

loans

or

bonds

repaid

or

repurchased

or

refinanced

as

debt

extinguishment

are

written

off

in

the

period

the

repayment,

prepayment,

repurchase

or

extinguishment is made and

included in the determination

of gain/loss on debt extinguishment.

Loan

commitment fees are

expensed

in the period

incurred, unless they

relate to loans

obtained to finance

vessels under construction, in which case, they are capitalized

to the vessels’ cost.

p)

Concentration

of

Credit

Risk

:

Financial

instruments,

which

potentially

subject

the

Company

to

significant concentrations

of credit

risk, consist

principally of

cash and

trade accounts

receivable. The

Company places

its temporary

cash investments,

consisting mostly

of deposits,

with various

qualified

financial institutions

and performs

periodic evaluations

of the

relative credit

standing of

those financial

institutions that are considered in the Company’s investment strategy. The Company

limits its credit

risk

with

accounts

receivable

by

performing

ongoing

credit

evaluations

of

its

customers’

financial

condition and generally does

not require collateral for

its accounts receivable

and does not have

any

agreements to mitigate credit risk.

q)

Accounting for Revenues and Expenses:

Revenues are generated from time

charter agreements

which contain a lease

as they meet the

criteria of a lease

under ASC 842.

The time charter contracts

are considered

operating leases because

(i) the vessel

is an

identifiable asset (ii)

the owner

of the

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-17

vessel does not have substantive substitution

rights and (iii) the charterer has

the right to control the

use of the

vessel during the term

of the contract and

derives the economic benefits

from such use.

Agreements with

the same

charterer are

accounted for

as separate

agreements according to

their

specific

terms

and

conditions.

All

agreements

contain

a

minimum

non-cancellable

period

and

an

extension period at the option

of the charterer.

Each lease term is assessed at

the inception of that

lease. Under a time charter agreement, the charterer pays

a daily hire for the use of the

vessel and

reimburses the owner for

hold cleanings, extra

insurance premiums for navigating

in restricted areas

and

damages

caused

by

the

charterers.

Revenues

from

time

charter

agreements

providing

for

varying annual

rates are

accounted for

as operating

leases and

thus recognized

on a

straight-line

basis over the non-cancellable rental periods of such agreements,

as service is performed.

The charterer

pays to

third parties

port, canal

and bunkers

consumed during

the term

of the

time

charter agreement, unless they are for the account of the owner, in which case,

they are included in

voyage expenses. Voyage expenses also include commissions on time charter revenue (paid to the

charterers, the brokers

and the managers)

and gain or

loss from bunkers

resulting mainly from

the

difference

in

the

value

of

bunkers

paid

by

the

Company

when

the

vessel

is

redelivered

to

the

Company from

the charterer

under the

vessel’s previous

time charter

agreement and

the value

of

bunkers sold

by the

Company when

the vessel

is delivered

to a

new charterer

(Note 12).

Under a

time

charter

agreement,

the

owner

pays

for

the

operation

and

the

maintenance

of

the

vessel,

including

crew,

insurance,

spares

and

repairs,

which

are

recognized

in

operating

expenses.

The

Company,

as lessor, has

elected not to allocate the consideration

in the agreement to the

separate

lease

and

non-lease

components

(operation

and

maintenance

of

the

vessel)

as

their

timing

and

pattern

of

transfer

to

the

charterer,

as

the

lessee,

are

the

same

and

the

lease

component,

if

accounted

for

separately,

would

be

classified

as

an

operating

lease.

Additionally,

the

lease

component

is

considered

the

predominant

component,

as

the

Company

has

assessed

that

more

value is ascribed to the vessel rather than to the services provided under the time charter contracts.

In

time

charter

agreements

apart

from

the

agreed

hire

rate,

the

Company

may

be

entitled

to

an

additional income,

such as

ballast bonus.

Ballast bonus

is paid

by charterers

for repositioning

the

vessel. The Company analyzes

terms of each contract

to assess whether income

from ballast bonus

is

accounted

together

with

the

lease

component

over

the

duration

of

the

charter

or

as

service

component under

ASC 606.

Deferred revenue

includes cash

received prior

to the balance

sheet date

for which all criteria to recognize as revenue have not been

met.

r)

Repairs and

Maintenance:

All repair

and maintenance

expenses including underwater

inspection

expenses are expensed in the year incurred. Such costs are included in

vessel operating expenses

in the accompanying consolidated statements of income.

s)

Earnings / (loss) per Common Share:

Basic earnings / (loss) per common share are

computed by

dividing net

income /

(loss) available

to common

stockholders by

the weighted

average number

of

common shares outstanding during the year. Shares issuable at little or no cash consideration upon

satisfaction of

certain conditions,

are considered

outstanding and

included in

the computation

of basic

earnings/(loss) per

share as

of the

date that

all necessary

conditions have

been satisfied.

Diluted

earnings

per

common

share,

reflects

the

potential

dilution

that

could

occur

if

securities

or

other

contracts to issue common stock were exercised.

t)

Segmental Reporting:

The Company reports financial

information and evaluates its

operations and

operating

results

by

revenue

and

operating

expenses.

As

a

result,

the

Company’s

management,

including its

Chief Executive

Officer,

who is

the chief

operating decision

maker,

reviews operating

results solely by revenue and operating

results of the fleet, and

thus, the Company has determined

that it operates

under one

reportable segment,

that of operating

dry bulk

vessels. The

chief operating

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-18

decision maker

(“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.

The

CODM

assesses

performance

for

the

vessel

operations

segment and

decides

how

to

allocate

resources

based

on

consolidated net

income. 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.

In

November

2023,

the

FASB

issued

ASU

2023-07,

which

requires

the

disclosure

of

significant

segment

expenses

that

are

part

of

an

entity’s

segment

measure

of

profit

or

loss

and

regularly

provided to

the chief

operating decision

maker.

In addition,

it adds

or makes

clarifications to

other

segment-related

disclosures,

such

as

clarifying

that

the

disclosure

requirements

in

ASC

280

are

required

for

entities

with

a

single

reportable

segment

and

that

an

entity

may

disclose

multiple

measures

of

segment

profit

and

loss.

ASU

2023-07

is

effective

for

fiscal

years

beginning

after

December 15, 2023 and

interim periods beginning

after December 15, 2024.

The Company adopted

ASU 2023-07 as of January 1, 2024 and its adoption has limited impact on the

Company’s financial

disclosures and there was no impact to financial position or results

of operations.

u)

Fair Value

Measurements

: The

Company classifies and

discloses its

assets and

liabilities carried

at fair

value in

one of the

following categories: Level

1: Quoted

market prices in

active markets for

identical assets

or liabilities;

Level 2:

Observable market-based

inputs or

unobservable inputs

that

are corroborated by market data; Level 3:

Unobservable inputs that are not corroborated by

market

data.

v)

Share Based Payments:

The Company issues

restricted share awards

which are measured

at their

grant date fair value and are not subsequently

re-measured. That cost is recognized over the period

during which

an employee

is required

to provide

service in

exchange for

the award—the

requisite

service period

(usually the

vesting period).

No compensation

cost is

recognized for

equity instruments

for

which employees

do not

render

the

requisite service

unless the

board of

directors determines

otherwise.

Forfeitures

of

awards

are

accounted

for

when

and

if

they

occur.

If

an

equity

award

is

modified after the grant date, incremental compensation cost will be recognized in an amount equal

to

the

excess

of

the

fair

value

of

the

modified

award

over

the

fair

value

of

the

original

award

immediately before the modification.

w)

Equity

method

investments:

Investments

in

common

stock

in

entities

over

which

the

Company

exercises significant influence but does not exercise control are accounted for by the equity method

of accounting. Under this

method, the Company records such

an investment at cost

(or fair value if

a consequence of deconsolidation) and

adjusts the carrying amount for

its share of the

earnings or

losses

of

the

entity

subsequent to

the

date

of

investment and

reports

the

recognized

earnings

or

losses in income. Dividends received,

if any,

reduce the carrying amount of the

investment and are

recorded

as

receivable

on

dividend

declaration.

When

the

carrying

value

of

an

equity

method

investment is

reduced to

zero because of

losses, the

Company does

not provide

for additional

losses

unless

it

is

committed

to

provide

further

financial

support

to

the

investee.

The

Company

also

evaluates whether a loss in value of an investment that

is other than a temporary decline should be

recognized. Evidence

of a

loss in

value might

include absence

of an

ability to

recover the

carrying

amount of the investment

or inability of

the investee to

sustain an earnings

capacity that would

justify

the carrying amount

of the investment.

For equity

method investments

that the Company

has elected

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-19

to account

for using

the fair

value option,

all subsequent

changes in

fair value

are included

in gain/loss

on related party investments.

x)

Going concern:

Management evaluates, at each

reporting period, whether there

are conditions or

events that raise

substantial doubt about

the Company's ability

to continue as

a going concern

within

one year from the date the financial statements are issued.

y)

Shares repurchased and retired:

The Company’s shares

repurchased are immediately cancelled

and the Company’s share capital

is accordingly reduced. Any excess of

the cost of the shares

over

their par value is allocated

in additional paid-in capital, in

accordance with ASC 505-30-30, Treasury

Stock.

z)

Financial Instruments, credit losses

: At each reporting date,

the Company evaluates its financial

assets

individually

for

credit

losses

and

presents

such

assets

in

the

net

amount

expected

to

be

collected on

such financial

asset. When

financial assets

present similar

risk characteristics,

these are

evaluated

on

a

collective

basis.

When

developing

an

estimate

of

expected

credit

losses,

the

Company considers available information relevant to assessing the

collectability of cash flows such

as internal

information, past

events, current

conditions and

reasonable and

supportable forecasts.

No

credit losses were identified and recorded in 2024 and 2023.

aa)

Financial Instruments, Investments-Equity

Securities, Recognition and

Measurement

: Equity

investments

with

readily

determinable

fair

values

are

recognized

at

the

transaction

price

and

subsequently

measured

at

fair

value

through

net

income.

According

to

ASC

321-10-35-2,

the

Company has elected to measure equity securities without a readily determinable fair value, that do

not

qualify

for

the

practical expedient

in

ASC

820

Fair

Value

Measurement

to

estimate

fair

value

using

the

NAV

per

share

(or

its

equivalent),

at

its

cost

minus

impairment,

if

any.

If

the

Company

identifies observable price changes in orderly

transactions for the identical or

a similar investment of

the same

issuer,

it shall

measure equity

securities at

fair value

as of

the date

that the

observable

transaction occurred.

The Company

shall continue

to apply

this measurement

until the

investment

does

not qualify

to

be measured

in

accordance with

this paragraph.

At

each reporting

period,

the

Company reassesses

whether an

equity investment

without a

readily determinable

fair value

qualifies

to

be

measured

in

accordance

with

this

paragraph.

The

Company

may

subsequently

elect

to

measure equity

securities at

fair value

and the

election to measure

securities at

fair value

shall be

irrevocable. Any resulting

gains or

losses on the

securities for

which that election

is made shall

be

recorded in

earnings at

the time

of the

election. At

each reporting

period, the

Company also

evaluates

indicators such

as the

investee’s performance

and its

ability to

continue as

going concern

and market

conditions, to determine

whether an investment

is impaired

in which

case, the Company

will estimate

the fair value of the investment to determine the amount of impairment

loss.

bb)

Contracts

in

entity’s

equity:

Under

ASC

815-40

contracts

that

require

settlement

in

shares

are

considered equity instruments, unless an event that is not in the entity’s control will require net cash

settlement.

Additional

conditions

necessary

for

equity

classification

include

settlement

to

be

permitted in

unregistered shares,

the entity

to have

sufficient authorized

and unissued

shares, the

contract to contain an explicit share

limit, there should be no requirement

for net cash settlement in

the event the entity fails to make timely filings with the Securities and Exchange Commission (SEC)

and there are no cash settled top-off or make-whole provisions. The Company,

when assessing the

accounting

of

warrants

and

pre-funded

warrants, takes

into

consideration

ASC

480

to

determine

whether the warrants

and pre-funded warrants should be

classified as permanent

equity instead of

temporary equity

or

liability.

The Company

further analyses

the key

features of

warrants and

pre-

funded warrants

and examines

whether these

fall under

the definition

of a

derivative according

to

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-20

ASC 815 applicable guidance or whether certain of these

features affect the classification. In cases

when derivative accounting is deemed inappropriate, no bifurcation

of these features is performed.

cc)

Guarantees:

Guarantees

issued

by

the

Company,

excluding

those

that

guarantee

its

own

performance,

are

recognized

at

fair

value

at

the

time

the

guarantees

are

issued,

or

upon

the

deconsolidation of a subsidiary. A liability

for the fair value

of the obligation undertaken

in issuing the

guarantee

is

recognized. If

it

becomes

probable

that

the

Company

will

have

to

perform

under

a

guarantee (Note

10(c)), the

Company will

recognize an

additional liability

if the

amount of

the loss

can be

reasonably estimated.

The recognition

of fair

value is

not required

for certain

guarantees such

as the parent's guarantee of

a subsidiary's debt to a

third party. For those guarantees excluded from

the above

guidance requiring the

fair value

recognition provision of

the liability,

financial statement

disclosures of such items are made.

dd)

Derivative instruments:

Derivative instruments

are recorded

in the

balance sheet

as either

an asset

or liability measured at its fair value

with changes in the instruments' fair value recognized as

either

a

component

in

other

comprehensive

income

if

specific

hedge

accounting

criteria

are

met

in

accordance

with

guidance

relating

to

“Derivatives

and

Hedging”

or

in

earnings

if

hedging

criteria

are not 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.

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 2024, 2023

and

2022

amounted

to

$

2,569

,

$

2,525

and

$

2,644

,

respectively,

and

are

mainly

included

in

vessel

operating expenses and general and administrative expenses in the accompanying consolidated financial

statements. As of

December 31, 2024

and 2023, an

amount of $

190

and $

62

, 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 2024, 2023

and 2022

brokerage fees

amounted to

$

4,093

, $

3,900

and $

3,309

, respectively, and

are included

in general

and

administrative expenses

in

the

accompanying consolidated

statements of

income.

For

2024, 2023,

and 2022,

commissions related to

Steamship amounted to

$

544

, $

906

and $

1,219

, respectively

and are

included in gain

on the sale

of vessels,

vessel cost and

equity method investments.

As of December

31,

2024 and 2023,

an amount of

$

0

and $

697

, respectively, was due to Steamship

included in “Due

to related

parties” in the accompanying consolidated balance sheets.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-21

c)

Bond

issuance:

Officers

and

directors

of

the

Company

and/or

entities

affiliated

with

them

purchased an

aggregate of

$

47,300

principal amount

of the

$

150,000

senior unsecured

bond issued

on

July 2, 2024 (Note 8).

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, 2024 and 2023, the investment in

DWM

amounted to

$

794

and

$

734

and

is

included

in

equity

method

investments

in

the

accompanying

consolidated balance sheets.

In 2024, 2023

and 2022, the

investment in DWM

resulted in a

gain of $

60

,

$

228

and $

894

, respectively, included in gain/(loss) from equity method investments in the accompanying

consolidated statements of income.

DWM performs the

technical and commercial

management of

six

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 2024, 2023 and 2022 amounted to

$

1,332

,

$

1,313

and

$

511

,

respectively.

Voyage

expenses

(commissions)

incurred

by

DWM

under

the

management agreements during 2024,

2023 and 2022, amounted

to $

368

, $

390

and $

162

, respectively.

As of December 31, 2024 and 2023, there was an amount of $

3

and $

25

due from DWM, included in due

from related parties in the accompanying consolidated balance

sheets.

b)

Bergen Ultra

LP, or Bergen:

Bergen is

a limited

partnership which

was established

for the

purpose

of acquiring,

owning, chartering

and/or operating

a vessel.

Bergen was

a wholly

owned subsidiary

of Diana,

which on February

14, 2023, signed

a Memorandum of

Agreement to acquire

from an unrelated

third-party

an Ultramax dry bulk vessel,

delivered on April 10, 2023. On March

30, 2023, Bergen entered into a loan

agreement with Nordea

for a $

15,400

loan to finance

part of the

purchase price of

the vessel. On

the same

date, the Company entered into a

corporate guarantee with Nordea to secure

Bergen’s obligations under

the loan. On April 28, 2023,

the Company entered into (i)

an investment agreement with an

unrelated third

party to

acquire

75

% of

the limited

partnership interests;

(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.

The Company

evaluated its variable

interests in Bergen

under ASC

810 and concluded

that Bergen

is a

VIE and that the Company does

not individually have the power

to direct the activities of the

VIE that most

significantly affect the partnership’s performance. From April 28, 2023 the Company no

longer retains the

power to

control the board

of directors. On

the same date,

Bergen was considered

an affiliate

entity and

not a controlled subsidiary of the Company. The Company accounted for the deconsolidation

of 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

and

was

calculated through

Level 2

inputs of

the fair

value hierarchy

in accordance

with ASC

610, by

taking into

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-22

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.

As

of

December

31,

2024

and

2023,

the

investment

in

Bergen

amounted

to

$

5,012

and

$

4,700

,

respectively,

and

is

included

in

equity

method

investments

in

the

accompanying

consolidated

balance

sheets. In 2024 and 2023, the investment in Bergen

resulted in a gain of $

312

and $

181

, respectively and

is included in gain/(loss) from equity

method investments in the accompanying

consolidated statements

of

income. Also, in 2024

and 2023, income from

management fees from Bergen amounted

to $

15

and $

10

,

respectively,

included

in

time

charter

revenues

and

income

from

the

commission

paid

on

the

loan

guarantee

amounted

to

$

40

and

$

28

,

included

in

interest

and

other

income

in

the

accompanying

consolidated statements

of income. As

of December 31,

2024 and 2023,

there was an

amount of $

246

and

$

443

, respectively, due from Bergen included in due from related parties, current and non-current.

c)

Windward Offshore

GmbH,

or Windward:

On November

7, 2023,

the Company

through its

wholly

owned subsidiary Diana

Energize Inc., or Diana

Energize, entered into a

joint venture agreement, with

two

unrelated companies

to form Windward

Offshore GmbH &

Co. KG or

Windward, based

in Germany, for the

purpose of

establishing and

operating an

offshore wind

vessel company

with the

aim of

becoming a

leading

provider

of

service

vessels

to

the

growing

offshore

wind

industry

and

acquire

certain

vessels.

Diana

Energize agreed

to contribute

25,000,000

Euro, being

45.45

% of

the limited

partnership’s capital

for the

construction of two CSOVs, and

in January 2024 agreed to

increase its contribution to

50,000,000

Euro or

45.87

% of the limited partnership’s capital pursuant to

a novated agreement in order for the

partnership to

place orders for two

additional CSOVs. As of

December 31, 2024 and 2023,

the investment in Windward

amounted to

$

36,631

and $

10,063

,

respectively,

consisting

of

advances to

fund

the

construction of

the

vessels and working capital. In 2024 and 2023,

the investment in Windward resulted in a

loss of $

518

and

$

671

,

respectively,

included

in

gain/(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 will act as the manning agent

of

the

Company’s

vessels.

As

of

December

31,

2024

and

2023,

the

Company’s

investment

in

Diana

Mariners amounted to

$

389

and $

272

, respectively and

there was an

amount of $

100

and $

0

, respectively,

due from Diana Mariners included

in due from related

parties. As of December 31,

2024, Diana Mariners

did not have any operations.

5.

Investments in a related party and other

a)

OceanPal Inc., or

OceanPal:

As of December

31, 2024 and

2023, the Company

was the holder

of

500,000

Series B Preferred Shares and

207

of Series C Convertible Preferred

Shares of OceanPal and

3,649,474

common shares,

being

49

%

of OceanPal’s

common

stock.

As

the

Company applied

the

fair

value option to

its investment in

the common shares

of OceanPal that

would otherwise be

accounted for

under the equity method of accounting,

it also applied fair value

to all of its financial

interests in OceanPal.

Series

B

preferred

shares

entitle

the

holder

to

2,000

votes

on

all

matters

submitted

to

vote

of

the

stockholders of the

Company,

provided however,

that the total

number of votes

shall not exceed

34

% of

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-23

the total

number of

votes, provided

further, that the

total number

of votes

entitled to

vote, including

common

stock or any other voting security,

would not exceed

49

% of the total number of votes. Series B Preferred

Shares have no dividend or distribution rights.

Series C preferred shares do not have voting rights unless related to amendments of the Articles of

Incorporation that adversely alter the preference, powers or rights of the Series C Preferred Shares or to

issue Parity Stock or create or issue Senior Stock.

Series C preferred

shares have a

liquidation preference

equal

to

the

stated

value

of

$

1,000

and

are

convertible

into

common

stock

at

the

Company’s

option

commencing upon the first anniversary of the issue date, at a conversion price equal to the lesser

of $

6.5

and the

10-trading day

trailing VWAP

of OceanPal’s

common shares,

subject to

adjustments. Dividends

on

each

share

of

Series

C

Preferred

Shares

are

cumulative

and

accrue

at

the

rate

of

8

%

per

annum.

Dividends are payable in cash or, at OceanPal’s election, in kind.

On October 17,

2023, the Company

converted

9,793

of the

10,000

Series C Preferred

shares of OceanPal

to

3,649,474

common shares, having a

fair value of

$

9,160

determined through Level

1 inputs of

the fair

value hierarchy, based on

the closing

price of

OceanPal’s common shares

on the

date of

conversion.

Upon

conversion the

Company realized

a gain

of $

1,742

,

being the

difference between

the

book value

of the

9,793

Series

C

Preferred

shares

and

the

fair

value

of

the

common

shares

acquired

and

is

included

in

gain/(loss)

on

investments,

separately

presented

in

the

accompanying

consolidated

statements

of

income.

Following

the

conversion,

the

Company

is

the

beneficial

owner

of

49

%

of

the

outstanding common

stock of

OceanPal and since

the shares are

listed at

NASDAQ, the Company

elected

to account for its common stock ownership in OceanPal at fair value.

As

of

December

31,

2024

and

2023,

the

Company’s

investment

in

the

common

stock

of

OceanPal

amounted to $

4,235

and $

8,138

, respectively,

being the fair value of OceanPal’s

common shares on that

date, determined through Level 1

inputs of the fair

value hierarchy.

In 2024 and 2023,

unrealized loss on

investment

amounted

to

$

3,905

and

$

1,022

,

respectively,

resulting

from

such

valuation,

included

in

gain/(loss)

on

investments,

separately

presented

in

the

accompanying

consolidated

statements of income.

As of

December 31,

2024 and

2023, the

Company’s investment

in the

Series B

preferred shares

and Series

C preferred shares,

amounted to $

180

and $

180

, respectively, including $

3

and $

3

, respectively, dividends

receivable

on

the

Series

C

preferred

shares,

and

are

included

in

investments

in

a

in

the

accompanying consolidated balance sheets.

In 2023

and 2022, the

Company distributed

13,157

and

25,000

Series D Preferred

Shares, respectively,

as non-cash dividends

to its shareholders (Note 11).

The Series D Preferred Shares were offered as non-

cash consideration

for the

sale of

the vessels

Melia (in

2023) (Note

6) and

Baltimore (in

2022) to

OceanPal.

The Company

accounted for

the transactions

as a

nonreciprocal transfer

with its

owners in

accordance

with ASC

845 and measured

the fair

value of the

preferred shares on

the date

of declaration at

$

10,761

and $

18,189

, respectively.

The fair

value of the

Series D

Preferred Shares was

determined by using

the

income approach,

taking into

account the

present value

of the

future cash

flows, the

holder of

shares would

expect to receive from holding

the equity instrument. In 2023 and 2022,

the transactions

resulted in a gain

of $

761

and $

589

, respectively,

being the difference

between the fair

value and the

carrying value of the

investments, separately

presented as gain/(loss)

on related party

investments in

the related accompanying

consolidated statements

of income.

In

2024,

2023

and

2022,

dividend

income

from

the

Series

C

and

Series

D

OceanPal

preferred

shares

amounted to $

17

, $

801

and $

917

, respectively, included in interest and

other income in the

accompanying

consolidated statements of income.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-24

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.

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 2024 and 2023, the Company entered into the below transactions.

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, 2024,

advances for

vessels under construction amounted to $

19,558

, including $

1,146

of capitalized interest.

Vessel Acquisitions

On January 30,

2023, the Company

took delivery of

the Ultramax dry

bulk vessel

Aquarius

paid partly in

cash and

2,033,613

newly issued common shares, having a fair value of $

7,809

. The value of the shares

issued in

2023, was

determined through

Level 1

inputs of

the fair

value hierarchy

based on

the closing

price

of

the

Company’s common

stock

on

the

date

of

issuance

which was

the

date

of

delivery

of

each

vessel.

On

February 14,

2023, the

Company,

through

a wholly

owned

subsidiary,

acquired from

an unaffiliated

third-party

the

Ultramax

dry

bulk

vessel

DSI

Drammen.

On

April

28,

2023,

this

subsidiary

was

deconsolidated from the Company’s

financial statements due to

the Company’s loss of

control described

in

note

4(b)

and

the

net

book

value

of

the

vessel

was

included

in

both

vessel

acquisitions

and

vessel

disposals in the related year.

Vessel Disposals

In

2023,

the

Company sold

to

unrelated third

parties

the

vessels

Aliki

and

Boston,

and to

OceanPal, a

related party company,

the vessel

Melia

(Note 5) and recognized an aggregate gain on sale amounting to

$

5,323

.

In 2024, the Company sold to unrelated third parties the vessels

Artemis

and

Houston

and recognized an

aggregate gain of $

5,799

.

The

amount

reflected

in Vessels,

net

in

the

accompanying consolidated

balance sheets

is analyzed

as

follows:

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-25

Vessel Cost

Accumulated

Depreciation

Net Book

Value

Balance, December 31, 2022

$

1,141,128

$

(191,512)

$

949,616

- Additions for vessel acquisitions and improvements

61,682

-

61,682

- Vessel disposals

(60,655)

21,688

(38,967)

- Vessel disposal due to deconsolidation

of subsidiary

(27,908)

-

(27,908)

- Depreciation for the year

-

(44,231)

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)

Balance, December 31, 2024

$

1,069,204

$

(235,792)

$

833,412

7.

Property and Equipment, net

The Company

owns the

land and

building of

its principal

corporate offices

in Athens,

Greece and

three

plots of which two were acquired in 2024 from unaffiliated third parties and one in 2023 from Alpha Sigma

Shipping Corp, a

related party company,

all 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:

Property and

Equipment

Accumulated

Depreciation

Net Book

Value

Balance, December 31, 2022

$

28,936

$

(5,973)

$

22,963

- Additions in property and equipment

2,006

-

2,006

- Depreciation for the year

-

(687)

Balance, December 31, 2023

$

30,942

$

(6,660)

$

24,282

- Additions in property and equipment

3,718

-

3,718

- Depreciation for the year

-

(825)

Balance, December 31, 2024

$

34,660

$

(7,485)

$

27,175

8.

Long-term debt

The

amount of

long-term debt

shown in

the

accompanying consolidated

balance sheets

is

analyzed as

follows:

2024

2023

Senior unsecured bond

175,000

119,100

Secured long-term debt

347,590

397,857

Total long-term

debt

$

522,590

$

516,957

Less: Deferred financing costs

(7,973)

(6,314)

Long-term debt, net of deferred financing costs

$

514,617

$

510,643

Less: Current long-term debt, net of deferred financing

costs,

current

(45,230)

(49,512)

Long-term debt, excluding current maturities

$

469,387

$

461,131

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-26

8.375% Senior Unsecured Bond

:

On

June 22, 2021

, the

Company issued a

$

125,000

senior unsecured bond

maturing in

June 2026. The

bond ranks ahead of subordinated capital and ranks the

same with all other senior unsecured obligations

of

the

Company

other

than

obligations

which

are

mandatorily

preferred

by

law.

Entities

affiliated

with

executive officers

and directors of

the Company purchased

an aggregate of

$

21,000

principal amount of

the bond. On June 29, 2023, the Company repurchased $

5,900

nominal value of the bond for $

5,851

and

recognized an

amount of

$

159

as loss

on debt

extinguishment, representing the

difference between

the

reacquisition price

of $

5,851

and the

net carrying

amount of

the debt

being extinguished

of $

5,900

less

deferred financing

fees of

$

208

. In

June 2024,

the bond

became callable,

and on

July 2,

2024,it was

prepaid

at a price equal to

103.35

% of nominal value, with the proceeds from the new bond discussed below. The

Company

applied

the

debt

modification

guidance

for

the

part

of

the

transaction

refinanced

by

existing

investors

amounting

to

$

57,850

and

the

debt

extinguishment for

the

remaining

$

61,250

.

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

:

On July 2, 2024, the Company

issued $

150,000

out of the $

175,000

maximum amount of a new

issue of a

senior unsecured

bond maturing

in July

2029 having

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.

On November

8, 2024,

the Company

issued the

remaining $

25,000

nominal value

of the

bond issue, at

102.00

% of

par 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,

2024,

27

vessels of

the Company’s

fleet

are

mortgaged

with

first

preferred

or

priority

ship

mortgages,

having

an

aggregate

carrying

value

of

$

585,780

.

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,

2024 and 2023 minimum

cash deposits required to

be maintained at all

times under

the Company’s

loan facilities,

amounted to

$

19,000

and $

20,000

, respectively

and are

included in

restricted

cash, non-current in

the accompanying consolidated

balance sheets. Furthermore,

the secured term

loans

contain

cross

default

provisions

and

additionally

the

Company

is

not

permitted

to

pay

any

dividends

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-27

following the occurrence

of an event

of default. All

of the Company’s

secured term loans

bear interest at

SOFR plus a margin. In 2024 and 2023, the weighted

average interest rate of the secured term

loans was

7.3

% and

7.3

%, respectively.

As of December

31, 2024 and

2023, 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

a

$

167,263

loan

agreement,

drawn

on

July

25,

2024,

to

refinance

the

outstanding

balance

of

the

two

loans

mentioned

above.

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,

2024 and 2023, the fair value of the interest rate

swap amounted

to

$

165

and $

439

, respectively,

and is

separately presented

in current

assets/liabilities

and non-current liabilities. In 2024 and 2023, the Company recognized 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

.

As of December 31, 2024 and 2023, the Company was in compliance

with all of its loan covenants.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-28

As of December 31, 2024, 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

$

47,150

Year 2

47,150

Year 3

47,149

Year 4

47,149

Year 5

222,149

Year 6 and

thereafter

111,843

Total

$

522,590

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

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

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.

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, 2024

and

2023,

finance

liability

amounted

to

$

9,608

and

$

9,221

,

respectively,

included

in

finance

liabilities,

current and $

113,300

and $

122,908

respectively included in finance liabilities, net of

current portion. As of

December 31, 2024, the

weighted average remaining lease

term of the above lease

agreements was

6.70

years, the

average interest rate

was

4.83

% and

the sublease

income during the

years ended

December

31, 2024 was $

28,814

, included in time charter revenues.

As of

December 31,

2024, and

throughout

the term

of the

leases,

the Company

has annual

finance liabilities

as shown in the table below:

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-29

Period

Principal Repayment

Year 1

$

9,808

Year 2

10,224

Year 3

10,661

Year 4

11,151

Year 5

11,604

Year 6 and

thereafter

70,452

Total

$

123,900

10.

Commitments and Contingencies

a)

Various

claims, suits,

and complaints,

including those

involving government

regulations and

product

liability, arise in

the ordinary

course of

the shipping

business. In

addition, losses

may arise

from disputes

with

charterers,

agents,

insurance

and

other

claims

with

suppliers

relating

to

the

operations

of

the

Company’s

vessels.

The

Company

accrues

for

the

cost

of

environmental

and

other

liabilities

when

management becomes

aware that

a liability

is probable

and is

able to

reasonably estimate

the probable

exposure. The Company’s vessels are

covered for pollution in the

amount of $

1

billion per vessel per

incident, by the

P&I Association in

which the Company’s

vessels are entered.

In 2022, the

Company

recorded a

gain of

$

1,789

from insurance

recoveries received

from its

insurers for

claims covered

under

its insurance

policies, which

is separately

presented as

insurance recoveries

in the

accompanying 2022

consolidated statement of income.

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,

2024,

the

Company

did

not

record

a

provision for

losses

under

the

guarantee

of

Bergen’s

loan

amounting to

$

13,533

on that date.

d)

As of December 31,

2024, the Company had

total obligations under shipbuilding

contracts (Note 6), as

follows:

Period

Amount

Year 1

$

-

Year 2

9,200

Year 3

36,800

Year 4

27,600

Total

$

73,600

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-30

e)

As

of

December

31,

2024,

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, 2024 and until their expiration was as follows:

Period

Amount

Year 1

$

124,091

Year 2

17,373

Year 3

725

Total

$

142,189

11.

Capital Stock and Changes in Capital Accounts

a)

Preferred stock

:

As of December 31, 2024, and 2023, the

Company’s authorized preferred stock

consists of

50,000,000

shares, respectively

(all in

registered form),

par value

$

0.01

per share,

of which

1,000,000

shares

are

designated

as

Series

A

Participating

Preferred

Shares,

5,000,000

shares

are

designated as

Series B

Preferred Shares,

10,675

shares are designated

as Series

C Preferred

Shares and

400

shares

are

designated

as

Series

D

Preferred

Shares.

As

of

December

31,

2024

and

2023,

the

Company had

zero

Series A Participating Preferred Shares issued and outstanding.

b)

Series

B

Preferred

Stock:

As

of

December

31,

2024,

and

2023,

the

Company

had

2,600,000

Series B Preferred

Shares issued and

outstanding with

par value $

0.01

per share, at

$

25.00

per share and

with liquidation preference

at $

25.00

per share.

Holders of Series B Preferred Shares have no voting rights

other than the ability, subject to certain exceptions, to elect one director if dividends for six quarterly

dividend periods (whether or not consecutive) are in arrears and certain other limited protective voting

rights.

Also, holders of Series B Preferred

Shares rank prior to the holders

of common shares with respect

to dividends,

distributions and

payments upon

liquidation and

are subordinated

to all

of the

existing and

future indebtedness.

Dividends on the Series

B Preferred Shares

are cumulative from

the date of original

issue and are

payable

on the 15th

day of January, April, July

and October of

each year at

the dividend rate

of

8.875

% per annum,

or

$

2.21875

per

share

per

annum.

In

2024,

2023,

and

2022,

dividends

on

Series

B

Preferred

Shares

amounted

to

$

5,769

,

$

5,769

and

$

5,769

,

respectively.

Since

February

14,

2019,

the

Company

may

redeem, in whole or in part, the Series B Preferred Shares at a redemption price of $

25.00

per share plus

an amount equal

to all accumulated

and unpaid dividends thereon

to the date

of redemption, whether

or

not declared.

c)

Series

C

Preferred

Stock

:

As

of

December

31,

2024,

and

2023,

the

Company

had

10,675

shares of Series C Preferred Stock, issued and outstanding, with par value $

0.01

per share, owned by an

affiliate of its Chief Executive Officer, Mrs. Semiramis Paliou.

The Series C Preferred Stock votes with the

common shares of the Company, and each share entitles the holder thereof to 1,000 votes on all matters

submitted to a vote of the shareholders of the Company.

The Series C Preferred Stock has no dividend

or

liquidation rights

and

cannot

be

transferred

without the

consent

of

the

Company

except

to

the

holder’s

affiliates and immediate family members.

d)

Series D Preferred Stock

: As of December 31, 2024, and 2023, the Company had

400

shares of

Series D Preferred Stock, issued and outstanding,

with par value $

0.01

per share, owned by an affiliate of

its Chief

Executive Officer,

Mrs. Semiramis

Paliou.

The Series

D Preferred Stock

is not

redeemable and

has

no

dividend or

liquidation rights.

The Series D Preferred Stock vote with the common shares of the

Company, and each share of the Series D Preferred Stock entitles the holder thereof to up to 200,000

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-31

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

2022, the

Company repurchased

under its

share repurchase program

820,000

shares of common stock,

at an average price

of $

4.56

per share, for

an

aggregate

cost

of

$

3,799

,

including

expenses.

Also,

the

Company

issued

under

its

ATM

program

877,581

shares of

common stock,

at an

average price

of $

6.27

per share

and received

net proceeds

of

$

5,322

, and

16,453,780

shares of common stock, at an average price of $

4.13

, for the acquisition of

eight

vessels, upon exercise of warrants issued to the vessels’ sellers.

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 (Note

6). The

Company did

no

t receive

any proceeds from the exercise of the warrants

in 2022 and 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

(Note 17).

f)

Dividend on Common Stock:

On March 21,

2022, the Company paid

a dividend on its

common

stock of

$

0.20

per share,

to its

shareholders of

record as

of March

9, 2022.

On June

17, 2022,

the Company

paid a dividend on its common stock of

$

0.25

per share, to its shareholders of record as

of June 6, 2022.

On

August

19,

2022,

the

Company

paid

a

dividend

on

its

common

stock

of

$

0.275

per

share,

to

its

shareholders of record as of August 8, 2022. On December 15, 2022, the Company paid a

dividend on its

common stock of $

0.175

per share, to its shareholders

of record as of November

28, 2022. During 2022,

the Company paid total cash dividends on common stock amounting

to $

79,812

.

On March

20, 2023, the

Company paid

a dividend of

$

0.15

per share, or

$

15,965

, to

its shareholders of

record as of March 13, 2023. On July 10, 2023, the Company distributed a dividend of $

0.15

per share to

all shareholders of record as

of June 12, 2023, and

paid $

12,424

in cash to its shareholders

who elected

to receive cash

and distributed

965,044

newly issued common shares

to its shareholders

who elected to

receive

shares.

On

September

8,

2023,

the

Company

distributed

a

dividend

of

$

0.15

per

share

to

all

shareholders of record as

of August 14, 2023, and

paid $

13,041

in cash to its shareholders

who elected to

receive

cash

and

distributed

831,672

newly

issued

common

shares

to

its

shareholders

who

elected

to

receive

shares.

On

December

4,

2023,

the

Company

distributed

a

dividend

of

$

0.15

per

share

to

all

shareholders of record

as of November

27, 2023 in

the form of

common stock and

distributed

4,831,777

newly issued common shares.

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

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-32

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.

g)

Dividend in Kind

:

On December 15, 2022,

the Company distributed the

Company’s investment in

the Series D Preferred

Shares of OceanPal in

the form of a stock

dividend amounting to $

18,189

, or $

0.18

per

share,

to

its

shareholders

of

record

as

of

November

28,

2022.

On

June

9,

2023,

the

Company

distributed the Company’s investment in the Series

D Preferred Shares of OceanPal in

the form of a stock

dividend amounting to $

10,761

, or $

0.10

per share, to its shareholders of record as of April 24, 2023.

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,

one

share of common stock plus 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

2023,

no

warrants were

exercised.

In

2024,

the

Company

issued

9,837,680

shares

of

common

stock,

having

a

value

of

$

28,047

,

net

of

expenses, or $

2.86

per share, upon the exercise of

6,392,765

warrants issued in 2023 and distributed as

dividend to

the Company’s

shareholders. The

Company received $

24,195

in proceeds,

net of

fees, from

the

exercise of

warrants. If

all

warrants were

exercised as

of

December 31,

2024, the

Company would

have issued

36,369,395

shares of

common stock

with a

fair value

of $

80,049

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, 2024

and 2023,

the

warrant liability,

measured at

fair value,

amounted to

$

1,802

and $

6,332

, respectively.

During the

years

ended December 31, 2024 and 2023, gain from warrants amounted to $

719

and $

1,583

, respectively and

is separately presented in the consolidated statements

of income.

i)

Incentive

Plan:

As

of

December

31,

2024,

11,144,759

shares

remained

reserved

for

issuance

according to the Company’s incentive plan.

Restricted stock in 2024, 2023 and 2022 is analyzed as follows:

Number of Shares

Weighted Average

Grant Date Price

Outstanding as of December 31, 2021

9,514,649

$

2.83

Granted

1,470,000

4.15

Vested

(3,118,060)

2.86

Outstanding as of December 31, 2022

7,866,589

$

3.07

Granted

1,750,000

4.54

Vested

(2,822,753)

3.05

Outstanding as of December 31, 2023

6,793,836

$

3.45

Granted

2,300,000

2.96

Vested

(2,996,334)

3.38

Outstanding as of December 31, 2024

6,097,502

$

3.30

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

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-33

aggregate

compensation

cost

is

recognized

ratably

in

the

consolidated

statement

of

income

over

the

respective vesting periods. In

2024, 2023 and 2022,

compensation cost amounted

to $

10,012

, $

9,938

and

$

9,282

,

respectively,

and

is

included

in

general

and

administrative

expenses

in

the

accompanying

consolidated statements of income.

As of

December 31,

2024 and

2023, the

total unrecognized cost

relating to

restricted share

awards was

$

11,674

and $

14,880

, respectively. As of

December 31,

2024, the weighted-average

period over

which the

total compensation cost related to

non-vested awards not yet

recognized is expected to be

recognized is

1.54

years.

12.

Voyage expenses

The amounts in the accompanying consolidated statements of income

are analyzed as follows:

2024

2023

2022

Commissions

$

11,640

$

13,331

$

14,412

Loss/(gain) from bunkers

725

(474)

(8,100)

Port expenses and other

1,242

764

630

Total

$

13,607

$

13,621

$

6,942

13.

Interest and Finance Costs

The amounts in the accompanying consolidated statements of income

are analyzed as follows:

2024

2023

2022

Interest expense, debt

$

38,385

$

39,617

$

21,983

Finance liabilities interest expense

6,353

6,786

2,735

Amortization of debt and finance liabilities issuance costs

2,372

2,620

2,286

Loan and other expenses

358

308

415

Interest expense and finance costs

$

47,468

$

49,331

$

27,419

14.

Earnings per Share

All common

shares issued

(including the

restricted shares

issued under

the Company’s

incentive plans)

are

the

Company’s

common

stock

and

have

equal

rights

to

vote

and

participate

in

dividends.

The

calculation of basic earnings per share does not treat the non-vested shares (not considered participating

securities) as outstanding until the time/service-based

vesting restriction has lapsed.

The dilutive effect on

unexercised warrants 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

2024, 2023,

and 2022,

there were

2,698,994

,

1,710,513

and

3,257,861

incremental shares

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.

During

the

years

ended

December

31,

2024

and

2023,

the

number

of

common shares that could potentially be

issued in connection with unexercised warrants that

were out of

the

money

for

a

portion

of

the

respective

period

was

390,132

,

and

nil

,

respectively.

There

were

no

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-34

outstanding securities

during the

year ended

December 31,

2022 that

could potentially

dilute basic

earnings

per share.

During the

years ended

December 31,

2024, 2023

and 2022,

the number

of common

shares

that

could

potentially

be

issued

in

connection

with

non-vested

restricted

share

awards

was

469,525

,

109,089

and

nil

, respectively.

Net income attributable to common stockholders is adjusted

by the dividends on Series B Preferred Stock

and the gain on warrants to calculate the diluted earnings per share.

2024

2023

2022

Net income

$

12,746

$

49,844

$

119,063

Dividends on series B preferred shares

(5,769)

Net income attributable to common stockholders

$

6,977

$

44,075

$

113,294

Weighted average number of common shares, basic

115,956,249

100,166,629

80,061,040

Earnings per share, basic

$

0.06

$

0.44

$

1.42

Net income

$

12,746

$

49,844

$

119,063

Dividends on series B preferred shares

(5,769)

Gain on warrants

(719)

(1,583)

-

Adjusted net income attributable to common

stockholders

$

6,258

$

42,492

$

113,294

Weighted average number of common shares, basic

115,956,249

100,166,629

80,061,040

Incremental shares

2,698,994

1,710,513

3,257,861

Weighted average number of common shares, diluted

118,655,243

101,877,142

83,318,901

Earnings per share, diluted

$

0.05

$

0.42

$

1.36

15.

Income Taxes

Under

the

laws

of

the

countries

of

the

companies’

incorporation

and

/

or

vessels’

registration,

the

companies are

not subject

to tax

on international

shipping income;

however, they are

subject to

registration

and tonnage

taxes, which

are included

in vessel

operating expenses

in the

accompanying consolidated

statements of 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 2024,

2023 and

2022 taxable years,

and the

Company takes this

position for

United States federal

income tax

return reporting purposes.

16.

Financial Instruments and Fair Value Disclosures

Interest rate risk and concentration of credit risk

Financial instruments,

which potentially

subject the

Company to

significant concentrations

of credit

risk,

consist

principally

of

cash

and

trade

accounts

receivable.

The

ability

and

willingness

of

each

of

the

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-35

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 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

2024,

2023 and

2022 charterers

that

individually accounted

for

10

% or

more

of

the

Company’s time

charter revenues were as follows:

Charterer

2024

2023

2022

Cargill International SA

*

13%

19%

Koch Shipping PTE LTD.

Singapore

*

15%

Nippon Yusen Kaisha

11%

*

*Less than 10%

The Company

is exposed

to interest

rate fluctuations

associated with

its variable

rate of

borrowings. On

July 6,

2023, the company

entered into an

interest rate swap

with DNB (Note

8) to

manage part of

such

exposure. Additionally, in 2022 and

2023, the Company refinanced part of its variable rate debt with fixed

rate financial liabilities (Note 9).

Fair value of assets and liabilities

The

carrying

values

of

financial

assets

reflected

in

the

accompanying

consolidated

balance

sheet

approximate their respective fair values

due to the short-term nature

of these financial instruments.

Cash

and cash equivalents

and restricted cash

are considered Level 1 items

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, generally due to their variable interest rates.

Fair value measurements disclosed

As of December 31, 2024, the Bond having a fixed interest

rate and a carrying value of $

175,000

(Note 8)

had a fair value of $

178,938

determined through the Level 1 input of the fair value hierarchy as defined in

FASB guidance for Fair Value Measurements.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-36

Other Fair value measurements

December 31,

2023

Quoted Prices

in Active

Markets

(Level 1)

Significant

Other

Observable

Inputs (Level 2)

Significant

Other

Observable

Inputs (Level 3)

Assets

Recurring fair value measurements

Investments in equity securities

$

20,729

$

20,729

$

Investments in related party

8,315

8,138

177

Interest rate swap, asset

129

Total

recurring fair value measurements

$

29,173

$

28,867

$

129

$

177

Non-recurring fair value measurements

Equity method investments(1)

$

4,519

$

4,519

Long-lived assets held for use(2)

7,809

Total

non-recurring fair value measurements

$

12,328

$

7,809

$

4,519

Liabilities

Recurring fair value measurements

Warrant liability

$

6,332

$

6,332

$

Interest rate swap, liability

568

Total

recurring fair value measurements

$

6,900

$

6,332

$

568

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 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

Total

recurring fair value measurements

$

1,967

$

1,802

$

165

(1)

On

April 28,

2023, the

Company

estimated that

the

fair

value of

its

25

%

interest in

Bergen was

$

4,519

,

determined

through

the

Level

2

inputs

of

the

fair

value

hierarchy,

as

defined

in

FASB

guidance for Fair

Value Measurements, and recorded a

gain of $

844

, being the difference

between

the fair value

of the retained noncontrolling

interest plus the carrying

value the liabilities assumed

by Bergen and the carrying value of the assets derecognized

(Note 3(e)).

(2)

On January

30, 2023.

the Company

took delivery

of one

vessel under

its master

agreement with

Sea Trade, acquired for

$

23,955

which was paid

in cash and

$

7,809

which was paid

through newly

issued

common

stock

(Note

6).

The

fair

value

of

the

common

shares

issued

to

Sea

Trade

was

determined based

on the

closing price

of the

Company’s shares

on the

date

of delivery

of each

vessel, which was also the date of issuance of such shares.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

(Expressed in thousands of U.S. Dollars – except share, per share

data, unless otherwise stated)

F-37

17.

Subsequent Events

a)

Repurchase

of

common

stock

:

On

January

7,

2025,

the

tender

offer

which

had

commenced

in

December 2024 (Note 11)

was settled and the

Company purchased a total

of

11,442,645

shares of

common stock for an aggregate amount of $

22,885

.

b)

Exercise of

warrants

:

From January

1, 2025

until March

21, 2025,

the Company

issued

7,101

shares

of common stock, resulting to $

17

of proceeds from the exercise of

4,352

warrants.

c)

Series B Preferred Stock Dividends

: On January 15, 2025, 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, 2025.

d)

Sale of Vessel Alcmene:

On February 10, 2025, the Company, through a wholly owned subsidiary,

entered into an

agreement with an

unrelated third party to

sell the vessel

Alcmene. The vessel

was

delivered to the new owners on March 13, 2025. The Company expects to have a gain from the sale

of the vessel.

e)

Restricted share

awards:

On February

25, 2025, the

Company’s Board of

Directors approved the

award of

2,000,000

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

$

3,680

. The

cost of these awards

will be recognized

ratably over the restricted

shares vesting period which

will be

3 years

.

f)

Common

Stock

Dividend:

On

February 25,

2025,

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 fourth

quarter

ended

December

31,

2024.

The

cash

dividend

will

be

paid

on

March

21,

2025,

to

all

shareholders of record as of March 12, 2025.

g)

Joint Venture

agreement:

On March

12, 2025,

the

Company,

through a

wholly owned

subsidiary

Diana Gas

Inc., entered

into a

joint venture

agreement with

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 and with the option for

two

more.

Diana Shipping - 20-F annual report 2024

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