dsx-20251231

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

☑

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

For the fiscal year ended

December 31, 2025

☐

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

☐

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:

210

9470-100

, Fax: +

30-210-9470-101

E-mail:

mdede@dianashippinginc.com

(Name, Telephone, E-mail and/or

Facsimile number and Address of Company Contact Person)

Securities registered or to be

registered pursuant

to Section 12(b) of the Act.

Title of each class

Trading

Symbol(s)

Name of each exchange on which

registered

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

DSX

New York Stock Exchange

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

DSXPRB

New York Stock Exchange

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

DSX WS

New York Stock Exchange

Securities registered or to be registered pursuant

to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section

15(d) of the Act.

None

(Title of Class)

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

as of the close of the period covered by

the annual report.

As of December 31, 2025, there were

115,787,434

shares of the registrant’s

common stock outstanding

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

as defined in Rule 405 of the Securities Act.

☐

Yes

☑

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

☑

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

☐

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

☐

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

☑

(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

☐

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

PART I

Item 1.

Identity of Directors, Senior Management and Advisers

Item 2.

Offer Statistics and Expected Timetable

Item 3.

Key Information

Item 4.

Information on the Company

Item 4A.

Unresolved Staff Comments

Item 5.

Operating and Financial Review and Prospects

Item 6.

Directors, Senior Management and Employees

Item 7.

Major Shareholders and Related Party Transactions

Item 8.

Financial Information

Item 9.

The Offer and Listing

Item 10.

Additional Information

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

108

Item 12.

Description of Securities Other than Equity Securities

108

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

109

Item 14.

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

109

Item 15.

Controls and Procedures

109

Item 16A.

Audit Committee Financial Expert

110

Item 16B.

Code of Ethics

110

Item 16C.

Principal Accountant Fees and Services

110

Item 16D.

Exemptions from the Listing Standards for Audit Committees

111

Item 16E.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

111

Item 16F.

Change in Registrant’s Certifying Accountant

111

Item 16G.

Corporate Governance

112

Item 16H.

Mine Safety Disclosure

113

Item 16I.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

113

Item 16J.

Insider Trading Policies

113

113

116

116

116

FORWARD-LOOKING STATEMENTS

Matters

discussed

this

annual

report

and

the

documents

incorporated

reference

may

constitute

forward-looking

statements.

The

Private

Securities

Litigation

Reform

Act

1995

provides

safe

harbor

protections

for

forward-looking

statements

order

encourage

companies

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

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,

turn,

upon

further

assumptions,

including

without

limitation,

management’s

examination

historical

operating

trends,

data

contained

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

future

events

and

are

subject

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

Key

Information—D.

Risk

Factors,"

and

the

documents

incorporated

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

the

supply

vessels,

including

when

caused

new

newbuilding

vessel

orders

changes to or terminations of existing orders, and vessel scrapping

levels;

●

changes

the

Company's operating

expenses, including

bunker

prices, crew

costs,

drydocking

and insurance costs;

●

the Company’s future operating or financial results;

●

availability

financing

and

refinancing

and

changes

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

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-

Risk

Factors” in

this

Annual Report

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

vary

from

actual

results

and

the

differences

can

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.

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

[Reserved]

Capitalization and Indebtedness

Not Applicable.

Reasons for the Offer and Use of Proceeds

Not Applicable.

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

obtain

additional

financing

acceptable

terms

and

otherwise

negatively impact our business.

●

Our operating results may be affected by seasonal fluctuations.

●

Our

operations

expose

global

risks,

such

political

instability,

terrorist

other

attacks,

war,

international

hostilities,

economic sanctions

other

trade

restrictions,

and

public

health

concerns,

which

may

affect

the

seaborne

transportation

industry

and

adversely affect our business.

●

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

profits.

●

We are

subject to

complex laws

and regulations, including

environmental regulations that

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

●

If our

vessels call

on ports

located in

countries or

territories that

are the

subject of

sanctions

or embargoes imposed

by the U.S.

government, the United

Kingdom, the European Union,

the United Nations, or other governmental

authorities, or engage in other

such transactions

or dealings

that would

be violative

of applicable

sanctions laws, it

could lead

to monetary

fines or penalties and

may adversely affect our reputation

and the market for our

securities.

●

We conduct business

in China, where

the legal system

has inherent uncertainties

that could

limit the legal protections available to us.

Company Specific Risk Factors

●

We charter

some of our

vessels on short-term time

charters in a

volatile shipping industry

and a

decline in

charter hire

rates could

affect our

results of

operations and

our ability

pay dividends.

●

A cyber-attack could materially disrupt our business.

●

Our

earnings may

be adversely

affected if

we are

not able

to take

advantage of

favorable

charter rates.

●

cannot

assure

you

that

will

able

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.

●

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

●

cannot

assure

you

that

our

board

directors

will

continue

declare

dividends

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

the

Marshall Islands,

which

does not

have

a well-developed

body

corporate

law,

you

may

have

difficulty

protecting

your

interests

than

shareholders of a U.S. corporation.

●

As a Marshall Islands corporation and

with some of our subsidiaries being

Marshall Islands

entities and also having subsidiaries in other offshore jurisdictions, our operations may be

subject to economic substance requirements, which could impact

our business.

●

Certain existing

shareholders will

be able

to exert

considerable influence

over matters

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

diluted

the

issuance

additional

preferred

shares,

including

additional

Series

Preferred Shares, and by other transactions.

●

may

redeem

the

Series

Preferred

Shares,

and

you

may

not

able

reinvest

the

redemption price you receive in a similar security.

Risks Relating to Our Outstanding Warrants

●

The issuance

of our

common stock

upon the

exercise of

the Warrants

may depress

our stock

price.

Some

the

following

risks

relate

principally

the

industry

which

operate

and

our

business

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

any of

the

events described in this section

could significantly and negatively affect

our business, financial condition,

operating

results,

cash

available

for

the

payment

dividends

our

and

interest

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

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

cyclicality of

the

dry bulk

shipping industry

and any

attendant volatility

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

the

supply

and

demand

for

the

major

commodities

carried

water

internationally.

Because

the

factors

affecting

the

supply

and

demand

for

vessels

are

outside

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

the

future

renew

existing

charters

rates

sufficient

allow

meet

our

obligations

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,

a result,

we may

have

record an

impairment

charge in our consolidated financial statements which could adversely

affect our financial results.

2025,

dry

bulk

shipping

showed

mixed

performance

across

vessel

sizes.

Capesizes

remained

the

strongest, supported

by steady long-haul

iron ore

and bauxite trades

and expectations

for new projects

Simandou. Panamax

and Supramax

markets softened

due to

increased vessel

supply and

weaker Chinese

demand, but Panamax

activity was risen

mid year

driven by strong

Brazilian soyabean and

corn exports

from

ECSA,

although

oversupply

and

softer

Chinese

buying

still

pressured

rates.

Ongoing

conflicts,

geopolitical

tensions,

U.S.–China

tariffs,

and

shifting

trade

policies

added

further

uncertainty,

making

scheduling and freight levels

less predictable. At the

same time, FuelEU Maritime

and the expanding EU

ETS added cost pressure as ships calling EU ports faced stricter

fuel rules and rising obligations.

Factors that influence demand for dry bulk vessel capacity include:

●

supply

and

demand

for

energy

resources,

commodities,

and

semi-finished

and

finished

consumer and industrial products;

●

changes in the exploration or production of energy

resources, commodities, and semi-finished and

finished consumer and industrial products;

●

the location of regional and global exploration, production and manufacturing

facilities;

●

availability of credit to finance international trade;

●

the

location

consuming

regions

for

energy

resources,

commodities,

and

semi-finished

and

finished consumer and industrial products;

●

the globalization of production and manufacturing;

●

global

and

regional

economic

and

political

conditions,

armed

conflicts,

such

those

between

Russia and Ukraine and between the U.S.

and its allies, and Iran, trade disruption

in the Red Sea

region and fluctuations in industrial and agricultural production;

●

disruptions and developments in international trade;

●

changes in seaborne and other transportation patterns,

including the distance cargo is transported

sea

for

reasons

including

but

not

limited

reductions

canal

capacities

and

geopolitical

conflicts and military responses;

●

international sanctions, embargoes, strikes, import and export

restrictions, nationalizations, piracy,

and terrorist attacks;

●

legal

and

regulatory

changes

including

regulations

adopted

supranational

authorities

and/or

industry bodies, such as safety and environmental regulations and

requirements;

●

weather and acts of God and natural disasters;

●

environmental and other regulatory developments;

●

currency exchange rates, specifically versus USD; and

●

economic slowdowns caused by public health pandemics.

Demand for

our dry

bulk oceangoing

vessels is

dependent upon

economic

growth in

the world’s

economies,

seasonal and regional changes in

demand and changes to the

capacity of the global dry

bulk fleet and the

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

or social

conditions

other

developments

could

negatively

impact

charter

rates

and

therefore

have

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,

shipping

routes

due

accidents

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.

addition

the

prevailing

and

anticipated

charter

rates,

factors

that

affect

the

rate

newbuilding,

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

costs of

bunkers and

other operating

costs, costs

associated with

classification society

surveys, normal

maintenance and insurance coverage

costs, the efficiency

and age profile of

the existing dry bulk

fleet in

the

market

and

government

and

industry

regulation

maritime

transportation

practices,

particularly

environmental

protection

laws

and regulations.

These factors

influencing the

supply

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

drybulk vessels and

the charter rates

of the drybulk

market

will be dependent upon economic

recovery and growth in

the United States, Europe, Japan,

China, India

and the overall world economy,

as well as seasonal

and regional changes in demand and changes to the

capacity

of the

world fleet.

The capacity

the world

fleet may

increase and

economic growth

may

not

continue. Adverse

economic, political,

social or

other developments

could also

have a

material adverse

effect on our business and results of operations.

The current

state of

the global

financial markets

and economic

conditions may

adversely impact

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

business.

Global

financial

markets

can

volatile

and

contraction

available

credit

may

occur

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

general

decline

the

willingness

banks

and

other

financial

institutions

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

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

expected

remain

resilient

2026

and

2027,

despite

significant

challenges,

inflation is expected to continue to ease further. However,

major market disruptions and adverse changes

in market

conditions and

regulatory climate

in China,

the United

States, the

European Union

and worldwide

may

adversely

affect

our

business

impair

our

ability

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

hindered

economic

downturn

any

these

countries

geographic

regions. In recent years

China and India have

been among the

world’s fastest growing economies

in terms

of gross

domestic product.

Although China

met its

official growth

target of

5% in

2025, the

growth of

China’s

economy has a

2026 real growth

target of 4.5%–5.0%,

as there is

a continued threat

of a Chinese

financial

crisis

resulting

from

deteriorating

real

estate

property

values,

excessive

personal

and

corporate

indebtedness and “trade wars.”

An economic slowdown in China,

the Asia-Pacific region, or

in India may

adversely

affect

demand

for

seaborne

transportation

our

products

and

our

results

operations.

Moreover,

any

deterioration

the

economy

the

United

States

the

European

Union

may

further

adversely affect economic growth in Asia.

The dry bulk

carrier charter market remains

significantly below its

high in 2008,

which may affect

our revenues, earnings and profitability, and our ability to comply with our loan covenants.

The abrupt and

dramatic downturn in the

dry bulk charter

market until the

beginning of 2021,

from which

derive

substantially

all

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%

2008

from

peak

11,793

May

2008

low

663

December 2008

and

has

remained volatile since then,

reaching a record low of

290 in February 2016.

In 2025, the BDI ranged

from

a low of

715 to a

high of 2,845

and closed at

1,972 on March

12, 2026. There

can be no

assurance that

the

dry

bulk

charter

market

will

not

decline

further.

The

decline

and

volatility

charter

rates

due

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

the

dry

bulk

carrier

charter

market

may

have

additional

adverse

consequences

for

our

industry,

including

absence

financing

for

vessels,

active

secondhand

market

for

the

sale

vessels,

charterers

seeking

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

year

worldwide

economies

experienced

inflationary

pressures,

with

price

increases

seen

across

many

sectors

globally.

For

example,

the

U.S.

consumer

price

index,

inflation

gauge

that

measures costs

across dozens

of items

rose 2.9%

and 2.7%

in December 2024

and 2025,

respectively,

compared to the prior year. It remains to be seen whether

inflationary pressures will increase again

and to

what degree. In the

event that inflation

becomes a significant

factor in the global

economy generally and

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

transport

could

alter

demand

for

our

services.

Interventions

the

economy

central

banks

response

inflationary

pressures

may

slow

down

economic

activity,

including

altering

consumer

purchasing habits

and reducing

demand for

the commodities

and products

we carry, and cause

a reduction

in trade. As a result,

the volumes of goods we

deliver and/or charter rates

for our vessels may be

affected.

Any

these

factors

could

have

adverse effect

our

business, financial

condition,

cash

flows

and

operating results.

Our operations

expose us

to global

risks, such

as political

instability, terrorist

or other

attacks, war,

international

hostilities,

economic

sanctions

other

trade

restrictions,

and

public

health

concerns,

which

may

affect

the

seaborne

transportation

industry

and

adversely

affect

our

business.

We are an international

shipping company and

primarily conduct most

of our operations

outside the United

States, and our business,

results of operations, cash

flows, financial condition

and ability to pay dividends,

any,

may

adversely

affected

changing

economic,

political

and

government

conditions

the

countries and regions where our vessels are employed or registered. Moreover, we operate

in a sector of

the economy that is

likely to be adversely

impacted by the effects

of political conflicts,

including the current

political instability in the

Middle East, Ukraine, the

South China Sea region

and other geographic countries

and areas, geopolitical

events, acts

of terrorism,

war or threatened

war, and related international

hostilities.

The response

of the

United States

and others

to terrorist

attacks, as

well as

the threat

of future

terrorist

attacks around

the world,

continues to

cause uncertainty

in the

world’s financial

markets and

may affect

our business,

operating results,

and financial

condition. Continuing

conflicts and

recent developments

Venezuela,

Ukraine

and

the

Middle

East,

along

with

increased

tensions

between

the

U.S.

and

China,

Russia, Iran

and certain terrorist

organizations, as well

as the

presence of U.S.

or other

armed forces in

various other regions, may lead to additional acts of terrorism and

armed conflict around the world, which

may

contribute

further

economic

instability

the

global

financial

markets.

result

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

other

jurisdictions

could

impact

global

markets,

including

foreign

exchange

and

securities

markets;

any

resulting

changes

currency

exchange

rates,

tariffs, treaties and other regulatory matters could in turn adversely impact our business

and operations.

In addition, the recent armed conflict between the U.S. and

its allies and Iran has led to severe disruption

and an effective

shutdown of the

Strait of Hormuz

and further disrupted trade

routes in the

Red Sea and

the

Gulf

Aden,

which have

been

affected

armed

attacks

ships

traveling

those

regions.

The

continued disruption of

such critical trade routes

could have significant

impacts in the Middle

East region

and on the

global economy,

which may adversely impact

oil markets and the

demand for dry-bulk vessel

capacity and charter rates.

Currently,

the Company’s charter

contracts, or our operations,

have not been

negatively

affected

by the

events

the

Ukraine War,

nor

the

Middle

East,

but

trade

routes

have been

disrupted. It

is possible

that in

the future

third parties

with whom

the

Company has

or will

have charter

contracts may

be impacted by

such events.

The Company

cannot predict what

effect the

higher price

oil, refined petroleum products

or certain dry-bulk

commodities will have on

demand, and it is possible

that

the conflicts in the Ukraine,

the Middle East and elsewhere

could adversely affect the Company’s financial

condition, results of operations, and future performance.

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

United States and China,

stabilizing growth in China, continuing threat

of terrorist attacks around

the world,

continuing instability and

conflicts and other

ongoing occurrences in

the Middle

East,

Ukraine, and

in other

geographic areas

and countries,

along with

economic sanctions

or other

trade

restrictions.

In the

past, political

instability has

also resulted

in attacks

on vessels,

mining of

waterways and

other efforts

to disrupt international shipping,

particularly in the Arabian

Gulf region, in the Black

Sea in connection with

the conflict

between Russia and

Ukraine,

and in

and around

the Red

Sea in

connection with the

conflict

between Israel and Hamas.

Acts of terrorism

and piracy have also

affected vessels trading in

regions such

the

South

China

Sea

and

the

Gulf

Aden

off

the

coast

Somalia,

among

others.

Any

these

occurrences could have

a material

adverse impact on

our future

performance, results of

operation, cash

flows and financial position.

Beginning in

February of

2022, the

United States,

the United

Kingdom and

the European

Union, among

other

countries,

announced

various

economic

sanctions

against

Russia

connection

with

the

aforementioned conflicts

in the

Ukraine region,

which may

adversely impact

our business.

The ongoing

conflict could result in the

imposition of further economic

sanctions or new categories

of export restrictions

against persons in

or connected

to Russia.

While in

general much uncertainty

remains regarding

the global

impact of the continuation of the

conflict in Ukraine and any

other potential resolution thereof,

it is possible

that such tensions could adversely

affect the Company’s business, financial

condition, results of operation

and cash flows.

The United States

has issued several

Executive Orders

that prohibit certain

transactions related to

Russia,

including

the

importation

certain

energy

products

Russian

Federation

origin

(including

crude

oil,

petroleum, petroleum fuels,

oils, liquefied natural

gas and coal), and

all new investments

in Russia by

U.S.

persons,

among

other

prohibitions

and

export

controls,

and

has

issued

numerous

determinations

authorizing the

imposition of

sanctions on

persons who

operate or

have operated

in the

energy,

metals

and mining,

and marine sectors

of the

Russian Federation economy,

among others.

Designations under

these sanctions

programs are

continuing, including

in October

2025 against

Lukoil and

Rosneft, and

certain

of their subsidiaries. Increased

restrictions on these sectors,

or the expansion of

sanctions to new sectors,

may pose additional risks that could adversely affect our business and operations.

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

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

our

charterers’

business

and,

turn,

could

cause

material

adverse

impact

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

revive their domestic industries

in the face of

foreign imports, thereby

depressing the demand

for shipping.

The U.S.

government has

made statements

and taken

actions that

may impact

U.S. and

international trade

policies, including

tariffs affecting

certain Chinese

industries. Additionally,

there is

significant uncertainty

about the future relationship between

the United States and

China and other countries, such

as Canada,

Mexico,

and

the

European

Union,

among

others,

with

respect

trade

policies,

treaties,

government

regulations, and

tariffs, some of

which remain

subject to

legal challenge.

It is unknown

whether and

to what

extent such tariffs will

be retained, expanded,

or otherwise modified

by the U.S.,

or the effect that

any such

actions

any

actions taken

other

countries in

response

will have

our

industry.

any new

tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or,

in particular,

if the U.S.

government pursues additional

retaliatory trade actions

due to the

ongoing U.S.-

China trade

tension, such

changes could

have an

adverse effect

on our

business, results

of operations

and financial condition.

For

example,

beginning

April

2025,

the

Office

the

United

States

Trade

Representative

(USTR)

implemented service fees on Chinese vessel operators and owners, as well as operators of Chinese-built

vessels, and for

certain car carriers

and roll-on/roll-off vessels

calling at U.S.

ports. Such service

fees were

initially

imposed

scheduled beginning

October

14,

2025,

but

were suspended

for

one

year

November

10,

2025

result

broader

trade

negotiations

between

the

U.S.

and

China.

China

had

imposed retaliatory service fees on

U.S. vessels, which were also

suspended for a period of

one year on

the same date.

It is unknown

whether and to

what extent these

port fees will

be reimposed following

the

one-year suspension, or the effect that they might have on us or our industry generally.

Furthermore, the government of China has

implemented economic policies aimed at increasing domestic

consumption of Chinese-made goods. This may have the effect of reducing the supply of goods available

for export and may,

in turn, result in a decrease of

demand for shipping. Many of the reforms, particularly

some limited price reforms that result

in the prices for certain commodities

being principally determined by

market forces, are unprecedented or experimental and may be subject

to revision, change or abolition.

Restrictions

imports, including

the

form

tariffs,

could

have

major

impact

global

trade

and

demand for shipping. Specifically,

increasing trade protectionism in the markets

that our charterers serve

may cause

an increase

in (i)

the cost

of goods

exported from

exporting countries,

(ii) the

length of

time

required

deliver

goods

from

exporting

countries,

(iii)

the

costs

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

adverse

impact

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

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

which

our

business,

the

global

economy

and

dry

bulk

transportation

industry

may

negatively

affected

future

pandemics,

epidemics

other

outbreaks

infectious

diseases

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

outbreak would have on the

global business environment and

the demand for the goods we

transport; (vii)

governmental

responses;

and

(viii)

fluctuations

general

economic

financial

conditions

tied

the

outbreak, such

as a

sharp increase

interest rates

or reduction

in the

availability of

credit. We

cannot

predict

the

effect

that

any

future

infectious

disease

outbreak,

pandemic

epidemic

may

have

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

typically

stronger

the

fall

and

winter

months

anticipation

increased

consumption

coal

and

other

raw

materials

the

northern

hemisphere

during

the

winter

months. As China is the most significant market for dry bulk shipping, the public holidays in relation to the

Chinese New Year during the

first quarter usually

results in a

decrease in

market activity during

this period.

In addition, unpredictable

weather patterns in

these months tend to

disrupt vessel scheduling

and supplies

of certain commodities. As a result, our revenues may

be weaker during the fiscal quarters ending March

31 and June

30, and, conversely,

our revenues

may be stronger in

fiscal quarters ending September 30

and December 31. While

this seasonality does not

directly affect our

operating results, it could

materially

affect our operating results to the extent our vessels are employed in the spot

market in the future.

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

profits.

While we generally will not bear the cost

of fuel or bunkers for vessels

operating on time charters, fuel is

significant

factor

negotiating

charter

rates.

result,

increase

the

price

fuel

beyond

our

expectations

may

adversely

affect

our

profitability

the

time

charter

negotiation.

Fuel

also

significant, if not

the largest, expense

in shipping when

vessels are under

voyage charter.

The price and

supply of

fuel is

unpredictable and

fluctuates based

on events

outside our

control, including

geopolitical

developments, such

as the

ongoing conflict

between Russia

and Ukraine

and between

the

U.S. and

its

allies, and

Iran, supply

and demand

for oil

and gas,

actions by

the Organization

of Petroleum

Exporting

Countries (the

"OPEC"), and

other oil

and gas

producers, war

and unrest

in oil

producing countries

and

regions, regional production patterns

and environmental concerns. Any

future increase in the

cost of fuel

may reduce the profitability and competitiveness of our business.

are

subject

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

1990,

requirements

the

U.S.

Coast

Guard,

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

Pollution

from

Ships

1973,

modified

the

Protocol

1978,

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

thereunder,

the

International

Convention

for

the

Safety

Life

Sea

(SOLAS),

the

International

Convention on

Load Lines

of 1966,

the International

Convention of

Civil Liability for

Bunker Oil

Pollution

Damage,

and

the

International

Safety

Management

(ISM)

Code. Because

such

conventions,

laws,

and

regulations are often revised, we

cannot predict the ultimate cost

of complying with such requirements or

the impact

thereof on the

re-sale price

or useful life

of any

vessel that

we own

or will

acquire. Additional

conventions, laws

and regulations

may be

adopted that

could limit

our ability

to do

business or

increase

the

cost

our

doing

business

and

which

may

materially

adversely

affect

our

operations.

Government

regulation

vessels,

particularly

the

areas

safety

and

environmental

requirements,

continue

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,

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

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

useful

lives

our

vessels,

require

reduction in

cargo capacity,

ship modifications

or operational

changes or

restrictions, lead

to decreased

availability

insurance

coverage

for

environmental

matters

result

the

denial

access

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

property

damage

claims

relating

the

release

hazardous

substances

associated

with

our

existing or

historic operations. Violations

of, or

liabilities under,

environmental requirements can

result in

substantial penalties, fines and other sanctions,

including in certain instances, seizure or

detention of our

vessels.

These

numerous

and

sometimes

conflicting

laws

and

regulations

include,

among

others,

data

privacy

requirements (in

particular the

European General

Data Protection

Regulation, enforceable

as from

May 25,

2018,

labor

relations

laws,

tax

laws,

anti-competition

regulations,

import

and

trade

restrictions,

export

requirements, U.S. laws such as the

FCPA and other U.S. federal laws and regulations established

by the

OFAC or other local laws which prohibit corrupt

payments to governmental

officials or certain payments or

remunerations to customers.

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

could increase costs and disrupt our business.

International

shipping

subject

various

security

and

customs

inspection

and

procedures

countries of origin,

destination and trans-shipment

points. Under the

U.S. Maritime Transportation Security

Act

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

certain ports

and facilities.

These security

procedures may

result

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

our customers and

may,

in certain cases,

render the shipment

of certain types

of cargo uneconomical or

impractical.

Any

such

changes

developments

may

have

material

adverse

effect

our

business,

customer relations, financial condition and earnings.

Operational risks and damage to our vessels could adversely impact

our performance.

The operation of an ocean-going vessel carries inherent

risks. Our vessels and their cargoes are

at risk of

being damaged or

lost because of

events such as

marine disasters, environmental

accidents, bad

weather

and natural disasters

or other disasters

outside our control

and other acts

of God, business

interruptions

caused

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

our

vessels

serious

accident

the

loss

any

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.

addition,

space

drydocking facilities is

sometimes limited

and not

all drydocking facilities

are conveniently located.

We may

unable

find

space

suitable

drydocking

facility

our

vessels

may

forced

travel

drydocking facility

that is

not conveniently

located relative to

our vessels' positions.

The loss

of earnings

while

these

vessels

are

forced

wait

for

space

travel

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

water

exposure.

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, which could harm

our reputation as

a safe and reliable

vessel owner and

operator.

are

unable to

adequately maintain

safeguard

our

vessels,

we may

unable

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

call

ports

located

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,

remains possible

that

our

charterers may

cause

our

vessels to

trade

violation of

sanctions

provisions without

our

consent. If

such

activities result

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

each

jurisdiction

may

amended

increase

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

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

sanctions.

These

require

diligent

ensuring

our

compliance

with

sanctions

laws.

Further,

the

U.S.

has

increased

its

focus

sanctions enforcement

with

respect to

the

shipping sector. Current or

future counterparties of ours may be affiliated

with persons or entities that are

or may

be in the

future the subject

of sanctions, embargoes

or blockades imposed

by the United States,

U.K., EU,

and/or other

international bodies.

If we

determine that

such sanctions

require us

to terminate

existing or future contracts

to which we,

or our subsidiaries, are party

or if we are

found to be in

violation

such

applicable

sanctions,

our

results

operations

may

adversely

affected,

may

suffer

reputational harm.

As a result

of Russia’s actions

in Ukraine, the

U.S., EU and

United Kingdom,

together with numerous

other

countries, have imposed

significant sanctions on

persons and entities

associated with Russia

and Belarus,

well

comprehensive

sanctions

certain

areas

within

the

Donbas

region

Ukraine,

and

such

sanctions apply

to entities

owned or

controlled by

such designated

persons or

entities. These

sanctions

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

whose cargo we may carry.

Although we believe that we

have been in compliance with all

applicable sanctions and embargo

laws and

regulations in 2025 and

up to the date of this

annual report, and intend

to maintain such compliance,

there

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

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

entities

who,

pursuant

contracts

with

third

parties,

provide

services

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

other contraband

onto our

vessels may

lead to

governmental claims

against us.

expect that

our vessels

will call

ports in

areas where

smugglers attempt

hide drugs

and other

contraband on

vessels, with

without the

knowledge of

crew members.

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

attach one

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

entitled

maritime

lien

against

vessel

for

unsatisfied

debts,

claims

damages.

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

our

fleet

for

claims

relating

another

our

ships.

Under

some

our

present

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

charter

and

the

charterer

may

suspend

the

payment

hire

under

the

charter

and

charge

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

our

vessels may

chartered to

Chinese

customers and

from

time

our

charterers'

instructions,

our

vessels

may

call

Chinese

ports.

Such

charters

and

voyages

may

subject

regulations in China

that may require

us to incur

new or additional

compliance or other

administrative costs

and

may require

that

we pay

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

their

implementation

local

authorities

could

affect

our

vessels

chartered

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

government takes

control of

a vessel

and becomes

her

owner,

while requisition

for

hire occurs

when

government takes

control

vessel and

effectively

becomes her

charterer

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

requisition

one

our

vessels,

the

amount

and

timing

payment

would

uncertain.

Although

none

our

vessels

have

been

requisitioned

government

for

title

hire,

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

comply

with

the

U.S.

Foreign

Corrupt

Practices

Act

could

result

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

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

substantial

fines,

sanctions,

civil

and/or

criminal

penalties,

curtailment

operations

certain

jurisdictions,

and

might

adversely affect our business,

earnings or financial

condition. In addition,

actual or alleged violations

could

damage

our

reputation

and

ability

business.

Furthermore,

detecting,

investigating,

and

resolving

actual

alleged

violations

expensive

and

can

consume

significant

time

and

attention

our

senior

management.

Company Specific Risk Factors

The market values of our vessels could decline,

which could limit the amount of funds

that we can

borrow and

could trigger

breaches of

certain financial

covenants contained

in our

loan facilities,

which

could

adversely

affect

our

operating

results,

and

may

incur

loss

sell

vessels

following a decline in their market values.

While the

market values

of vessels

and the

charter market

have a

very close relationship

as the

charter

market moves

from trough

to peak,

the time

lag between

the effect

of charter

rates on

market values

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.

addition,

vessels

grow

older,

they

generally

decline

value.

the

market

values

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

all.

December

31,

2025,

were

compliance

with

all

the

covenants

our

loan

facilities. If

we are

not able

to comply

with the

covenants in

our loan

facilities or

are unable

to obtain

waivers

amendments

otherwise

remedy

the

relevant

breach,

our

lenders

could

accelerate

our

debt

and

foreclose on our vessels.

Furthermore, if

we sell

any of

our owned

vessels at

a time

when prices

are depressed,

our business,

results

of operations, cash flow and financial condition

could be adversely affected. Moreover,

if we sell a vessel

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

financial statements, resulting

in a

loss and

a reduction in

earnings. In

addition, if

vessel values decline,

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

affect

our financial

results.

Conversely, if vessel

values are

elevated at

a time

when we

wish to acquire

additional

vessels,

the

cost

acquisition

may

increase

and

this

could

adversely

affect

our

business,

results

operations, cash flow and financial condition.

We charter

some of

our vessels

on short-term time

charters in

a volatile

shipping industry and

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

benefit

periods

increasing charter

hire

rates,

must

consistently

renew

our

charters

and

this

dependence

makes us

vulnerable to

declining charter

rates. As

a result

of the

volatility in

the dry

bulk carrier

charter

market, we may

not be able

to employ our

vessels upon the

termination of their

existing charters at their

current charter hire rates or at all. The dry bulk carrier charter market is volatile, and while

short-term time

charter and

spot market rates

for some

dry bulk carriers

were at

or below

operating costs

in early

2025,

conditions have improved since then. We cannot assure you

that future charter hire rates will enable

us to

operate our vessels profitably, or to pay dividends.

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

crew

costs.

Additionally,

the

return

number

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

crew

wages.

Continued

higher

crew

costs

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

invested

50/50

joint

venture

with

Wilhelmsen

Ship

Management

which

provides

management

services

limited

number

vessels

our

fleet

and

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.

rely

information

technology

systems

and

networks

our

operations

and

administration

our

business, including navigation,

provision of services, propulsion,

machinery management, power control,

communications and cargo management. We have in

place safety and security measures on our

vessels

and onshore

operations to

protect our

vessels against

cyber-security attacks

and any

disruption to

their

information systems.

Information systems

are vulnerable

to security breaches

occurred from unauthorized

access by various threat

actors (e.g., hackers, terrorists,

script kiddies, etc.). We rely

on industry accepted

security measures

and technology

to securely

maintain confidential

and proprietary

information maintained

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

our

operations,

lead

unauthorized

release of

information or alteration

of information in

our systems. Any

such attack or

other breach of

our

information

technology

systems

could

have

material

adverse

effect

our

business

and

results

operations.

addition,

the

unavailability

the

information

systems

the

failure

these

systems

perform

anticipated

for

any

reason

could

disrupt

our

business

and

could

result

decreased

performance and increased operating costs, causing our business and results of operations to

suffer. We

do not

maintain cyber-liability

insurance at

this time

to cover

such losses.

Any significant

interruption or

failure of our information systems or any significant breach of security could adversely affect our business

and results

of operations.

We have

taken extensive

measures to

enhance our

security infrastructure,

reform

network architecture, and implement rigorous

security policies, culminating in

ISO 27001 certification. Key

initiatives include

conducting regular

security testing,

maintaining business

continuity and

disaster recovery

capabilities, and

operating incident response

programs supported by

a 24/7

Security Operations Center.

have

also

expanded

our

security

awareness

and

training

program

enhance

employee

vigilance

against

cyber

threats.

Despite

these

improvements

cannot

assure

you

that

will

able

successfully thwart all future attacks without causing material and adverse

effect on our business.

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

and incidents may be elevated

result

the

ongoing conflicts

between

Russia and

Ukraine

and

the

Israel-Hamas

conflict. To

the

extent

such

attacks

have

collateral

effects

global

critical

infrastructure

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.

cyberattacks

become

increasingly

sophisticated,

and

tools

and

resources

become

readily

available to

attackers, including

the risk associated

with the use

of emerging

technologies, such

as artificial

intelligence and quantum

computing for nefarious

purposes, there can

be no

guarantee that our

actions,

security measures and controls

designed to prevent, detect

or respond to intrusion,

to limit access to

data,

to prevent

destruction or alteration

of data

or to

limit the

negative impact from

such attacks,

can provide

absolute security against compromise. In

2025, we initiated the creation

of a draft AI

policy to govern the

usage of

AI tools

within the

organization. Furthermore,

we selected

a training

provider for

an AI

training

workshop to upskill employees on the risks

and benefits of AI technology.

While we utilize AI-driven tools

within

our

security

stack

(such

within

our

SIEM

and

SOC

solutions),

continue

monitor

the

regulatory environment

regarding AI disclosures

and, at this

stage, we do

not expect AI

to cause increased

risk to our industry or business.

Even

without

actual

breaches

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,

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,

July

2023,

the

SEC

adopted

amendments

its

rules

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

incur

substantial

costs

and

could

increase

negative

publicity

surrounding

any

cybersecurity incident.

During the

year ended

December 31,

2025, we

did not

identify any

cybersecurity

threats

that

have

materially

affected

are

reasonably

likely

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

cap

and

trade

regimes,

carbon

taxes,

increased

efficiency

standards

and

incentives

mandates

for

renewable

energy.

July

2023,

nations

the

International Maritime Organization’s

Marine Environment Protection

Committee (“MEPC”) 80

updated the

initial

strategy

reduce

greenhouse

gas

emissions

from

ships.

The

initial

strategy

identifies

levels

ambition to reducing greenhouse gas

emissions, including (1) decreasing the

carbon intensity from ships

through implementation of further phases of the Energy Efficiency Design Index

(EEDI)

for new ships; (2)

reducing carbon dioxide emissions per transport work,

as an average across international shipping, by

least

20%

2030,

compared

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

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.

addition,

although

the

emissions

greenhouse

gases

from

international

shipping

currently

are

not

subject

the

Kyoto

Protocol

the

United

Nations

Framework

Convention

Climate

Change,

which

required adopting countries

to implement national programs

to reduce emissions

of certain gases,

or the

Paris

Agreement

(discussed

further

below),

new

treaty

may

adopted

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

install

new

emission

controls,

acquire

allowances

pay

taxes

our

greenhouse

gas

emissions

administer

and

manage

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

their

ESG

policies.

Investor

advocacy groups, certain

institutional investors, investment funds,

lenders and other market

participants,

particularly those

outside the

United States, are

increasingly focused

on ESG

practices and

in recent

years

have placed

increasing importance

on the

implications and

social cost

of their

investments. Companies

which

not

adapt

comply

with

investor,

lender

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

whether

there

legal

requirement

so,

may

suffer

from

reputational damage and the business, financial condition, and/or

stock price of such a company could be

materially and adversely affected.

We may

face increasing pressures

from investors, future

lenders and other

market participants, who

are

increasingly

focused

climate

change,

prioritize

sustainable

energy

practices,

reduce

our

carbon

footprint and

promote sustainability.

As a

result, we

may

be required

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

us,

from

their

investing

portfolios

altogether

due

to environmental,

social and

governance

factors.

These

limitations

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.

those

markets

are

unavailable,

are

unable

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

monitor,

report

and

comply

with

wide

ranging

ESG

requirements.

The

occurrence

any

the

foregoing

could

have

material

adverse

effect

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

respect

certain

ESG

items.

While

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

prone to

error

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.

Our earnings

may be

adversely affected

if we

are not

able to

take advantage of

favorable charter

rates.

charter

our

dry

bulk

carriers

customers

pursuant

short,

medium

long-term

time

charters.

However,

part

our

business

strategy,

the

majority

our

vessels

are

currently

fixed

short

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

result,

our

cash

flow may

subject to

instability in

the

mid

long-term. In

addition, it

would be

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

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

the

loan

documents.

Prior

each

drawdown,

are

required,

among

other

things,

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;

●

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.

cannot

assure

you

that

will

able

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,

terms that

are

acceptable to

us or

all. If

are

not able

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

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

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

would

have

had

these

vessels

had

been

built

for

and

operated

exclusively

us.

Generally,

we do not receive

the benefit of

warranties on secondhand vessels.

Accordingly, we

may not

discover defects or

other problems with

secondhand vessels prior

to purchasing or

chartering-in. Any such

hidden defects or

problems may be

expensive to repair

and may require us

to put a

vessel into drydock,

which would reduce our fleet utilization

and increase our operating costs. If

a hidden defect or problem is

not detected, it may result in accidents or other incidents

for which we may become liable to third parties.

The market prices of

secondhand and newbuilt

vessels also tend to

fluctuate with changes in

charter rates

and, if we sell the vessels, the sales prices may be less than their

carrying values at that time.

In general, the costs to maintain a vessel in

good operating condition increase with the age of the vessel.

the

date

this

annual

report,

our

fleet

consists

vessels

which

vessels,

owned

and

chartered-in, are in operation,

having a combined carrying

capacity of 4.1 million dead

weight tons, or dwt,

and a weighted average age of

12.3 years and two vessels are under construction.

As our fleet ages, we

will

incur

increased

costs.

Older

vessels

are

typically

less

fuel-efficient

than

recently

constructed

vessels

due

improvements

engine

technology.

Cargo

insurance

rates

increase

with

the

age

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

new equipment

and may

restrict the

type

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

meet

their

obligations could

cause

suffer

losses

otherwise adversely

affect our business.

enter

into,

among

other

things,

charter

parties with

our

customers. Such

agreements

subject

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.

our

charterers

fail

meet

their

obligations

attempt

renegotiate

our

charter

agreements,

may

difficult

secure substitute

employment for

such vessels,

and

any

new

charter

arrangements we

secure may

lower rates.

a result,

could

sustain significant

losses, which

could have

a material

adverse effect

on our

business, financial condition,

results of

operations and cash

flows.

the

highly

competitive

international

shipping

industry,

may

not

able

compete

for

charters with

new entrants

or established

companies with

greater resources,

and as

a result,

may be unable to employ our vessels profitably.

The

operation

dry

bulk

vessels

and

transportation

dry

bulk

cargoes

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

the

vessel

and

its

operators

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

offer

lower

charter rates

and

higher quality

vessels than

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.

may

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

retain

key

members

our

management

team

and

hire

new

members as may

be necessary.

The loss of

any of these

individuals could adversely affect

our business

prospects

and

financial

condition.

Difficulty

hiring

and

retaining

replacement

personnel

could

have

similar effect.

We do

not currently,

nor do

we intend

to, maintain

“key man”

life insurance

on any

of our

officers or other members of our management team.

Technological

innovation

and

quality

and

efficiency

requirements

from

our

customers

could

reduce our charter hire income and affect the demand and the value

of our vessels.

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

across

the

entire

supply

chain,

including

the

shipping

and

transportation

segment.

Our

continued

compliance with these

standards and quality

requirements is vital

for our operations.

The charter hire

rates

and the value and operational life

of a vessel are determined by a number

of factors including the vessel’s

efficiency, operational flexibility and physical

life. Efficiency includes

speed, fuel economy

and the ability

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

modern

vessels

having

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

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

will

only

charter

such

vessels

lower

contracted

charter

rates

than

are

able

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

labor

through

automation

and

digitization

and

increasing

the

consumers

power

demand

goods,

technology

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

responsive

changing

demand

patterns.

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

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).

can

give

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.

may also be

subject to calls,

or premiums, in

amounts based not

only on our

own claim records

but also

the

claim

records

all

other

members

the

protection

and

indemnity

associations

through

which

receive

indemnity

insurance

coverage

for

tort

liability.

Our

insurance

policies

also

contain

deductibles,

limitations

and

exclusions

which,

although

believe

are

standard

the

shipping

industry,

may

nevertheless increase

our costs. In

addition, we

do not presently

carry loss-of-hire

insurance, which

covers

the

loss

revenue

during

extended

vessel

off-hire

periods,

such

those

that

might

occur

during

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.

generate all

of our

revenues in

U.S. dollars

but incur

approximately 30%

of our

operating expenses

and

around

half

our

general

and

administrative

expenses

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

satisfy its contractual obligations, which could have an adverse

effect on our results.

We depend

upon a few

significant customers for a

large part of

our revenues and the

loss of one

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

We have historically

derived a significant part

of our revenues from

a small number of

charterers. During

2025, 2024, and 2023, 29%, 11% and 13%, respectively, of our revenues were derived from two, one and

one charterers,

respectively. If one

or more

of our

charterers chooses

not to

charter our

vessels or

is unable

to perform under one or

more charters with us and

we are not able

to find a replacement

charter, we could

suffer a loss of revenues that could adversely affect our financial condition and results of operations.

We are a holding company, and we

depend on the ability of our subsidiaries to distribute funds to

us in order to satisfy our financial obligations.

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

operating

assets. We

have no significant

assets other than

the equity

interests in our

subsidiaries. As a

result, our

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

funds to

us. The ability

of our subsidiaries

to make these

distributions may become

subject to restrictions

contained

those

subsidiaries’ financing

agreements

and could

affected

claim

other

action

by a

third

party,

including

creditor,

Marshall

Islands

law

which

regulates

the

payment

dividends

companies.

are

unable

obtain

funds

from

our

subsidiaries,

may

not

able

satisfy

our

financial obligations.

Certain of our vessels

are owned through joint

ventures that we have entered

into, and our views

about

the

operations

those

vessels

may

differ

from

our

joint

venture

partners

and

adversely

affect our interest in the joint ventures.

have

entered

into

joint

venture

arrangements,

pursuant

which

own

minority

interests

four

commissioning service

operation vessels

through Windward

Offshore

GmbH &

Co. KG,

in one

dry bulk

vessel through Bergen Ultra, which however was sold in January 2026 and majority interests

in two 7,500

cbm LPG vessels under

construction through Ecogas

Holding AS, scheduled

for delivery in 2027.

We may

enter into

additional joint venture

arrangements in the

future. We

share voting and

operational control of

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

our

favor

and

such

conflicts

differing

views

could

have

material

adverse

effect

our

interest in these joint ventures.

Because we

are organized

under the

laws of

the Marshall

Islands, it

may be

difficult to

serve us

with legal process or enforce judgments against us, our directors

or our management.

We are

organized under

the laws

of the

Marshall Islands,

and substantially

all of

our assets

are located

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

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

United States.

As a

result, it

may be

difficult or

impossible for

someone to

bring an

action against

us or

against these

individuals in

the

United

States if

they

believe that

their

rights

have been

infringed under

securities laws or

otherwise. Even if

you are successful

in bringing an

action of this

kind, the laws

of the

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

our assets or the assets of our directors or officers.

The international nature of our operations may make the

outcome of any bankruptcy proceedings

difficult to predict.

We are incorporated under the laws of the Republic of the

Marshall Islands and we conduct operations in

countries

around

the

world.

Consequently,

the

event

any

bankruptcy,

insolvency,

liquidation,

dissolution, reorganization or

similar proceeding involving

us or

any of

our subsidiaries,

bankruptcy laws

other

than

those

the

United

States

could

apply.

become

debtor

under

U.S.

bankruptcy

law,

bankruptcy

courts

the

United

States

may

seek

assert

jurisdiction

over

all

our

assets,

wherever

located, including

property situated

in other countries.

There can

be no assurance,

however, that we would

become

debtor

the

United

States,

that

U.S.

bankruptcy

court

would

entitled

to,

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,

will

need

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

able

continue

hire

suitable

employees

expand

our

fleet.

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

acquisition

presents

numerous

risks,

such

undisclosed

liabilities

and

obligations, the

possibility that

indemnification agreements

will be

unenforceable or

insufficient to

cover

potential

losses

and

difficulties

associated

with

imposing

common

standards,

controls,

procedures

and

policies,

obtaining

additional

qualified

personnel,

managing

relationships with

customers,

suppliers

and

integrating newly acquired assets and operations into existing infrastructure. If we

are unable to grow our

financial and operating

systems or to

recruit suitable employees,

should we decide

to expand our

fleet, our

financial performance may be

adversely affected, among other

things. We cannot give any assurance

that

we will be

successful in executing

any future

growth plans or

that we will

not incur significant

expenses and

losses in connection with our future growth.

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

our earnings.

Under

the

U.S.

Internal

Revenue

Code

1986, as

amended,

the

Code,

50%

the

gross

shipping

income

vessel-owning

chartering

corporation,

such

ourselves

and

our

subsidiaries,

that

attributable to

transportation that

begins or

ends, but

that does

not both

begin and

end, in

the United

States

is characterized as

U.S. source shipping

income and such

income is generally

subject to a

4% U.S. federal

income tax

without allowance

for deductions,

unless that

corporation qualifies

for exemption

from tax under

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

The application

of the exemption

under Section

883 of

the Code

is highly

fact-dependent. There

are factual

circumstances beyond our control that could cause us

to lose the benefit of

this tax exemption in 2025 or

any

future

years

and

thereby

become

subject

U.S.

federal

income

tax

our

U.S.

source

shipping

income. For example, in certain circumstances we may not qualify for exemption under Code Section

883

for

particular

taxable

year

shareholders,

other

than

“qualified

shareholders”,

with

five

percent

greater interest in our common shares owned, in the aggregate, 50% or

more of our outstanding common

shares for more

than half the

days during the

taxable year. Due to

the factual nature

of the issues

involved,

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

of our subsidiaries.

If we or

our subsidiaries are not

entitled to this exemption

under Section 883 of

the Code for any

taxable

year, we or our subsidiaries would

be subject for those

years to a 4%

U.S. federal income

tax on our gross

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

could have a negative effect on our business

and would

result in

decreased earnings

available for

distribution to

our shareholders,

although, for

the 2025

taxable year, we estimate

our maximum

U.S. federal

income tax

liability to be

immaterial if we

were subject

this

U.S.

federal

income

tax.

See

“Item

10.

Additional

Information—E.

Taxation"

for

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

those

types

“passive

income.”

For

purposes

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

trade

business.

For

purposes

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,

believe that

our income

from our

time chartering activities

does not

constitute “passive

income,” and the

assets that we own and operate in connection with

the production of that income do not constitute assets

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

There

substantial

legal

authority

supporting

this

position

consisting

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

also

authority

which

characterizes

time

charter

income

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

xation

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

the

Organisation

for

Economic

Co-operation

and

Development’s

(“OECD”)

two-pillar

base

erosion and profit

shifting project. In

October 2021, members

of the OECD

put forth two

proposals: (i)

Pillar

One reallocates

profit to

the market

jurisdictions where

sales arise

versus physical

presence for

companies

with

global

revenues

than

€20

billion;

and

(ii)

Pillar

Two

compels

multinational

corporations

with €750 million

or more

in annual

revenue to

pay a

global minimum

tax of

15% on

income received

each

country

which

they

operate. The

reforms

aim

level

the

playing

field

between

countries

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

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 2025 and two

special non-cash dividends. The actual

declaration of future

cash dividends, and

the establishment of

record and payment

dates, is subject

to final

determination

our

board

directors

each

quarter

after

its

review

the

company's

financial

performance.

cannot

assure

you

that

our

board

directors

will

declare

and

pay

dividends

going

forward. Our dividend policy

is assessed by

our board of

directors from time to

time, based on

prevailing

market conditions,

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

growth strategy and other

cash needs, the requirements

of Marshall Islands law

and other factors deemed

relevant to

our

board of

directors.

addition, other

external factors,

such as

when

our

lenders impose

restrictions

our

ability

pay

dividends,

may

affect

our

dividend

policy.

Under

the

terms

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

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.

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

addition, our

ability to

pay dividends

to holders

of our

common shares

will be

subject to

the rights

holders

our

Series

Preferred

Shares,

which

rank

senior

our

common

with

respect

dividends,

distributions and

payments

upon

liquidation. No

cash dividend

may

paid

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

our

Series

Preferred

accrue

rate

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

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

our

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

unpredictable

and

not

bear

any

relationship

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

social

media

and

online

forums,

the

direct

access by retail investors

to broadly available trading

platforms, the amount and

status of short interest

our

common

stock

and

our

other

securities,

access

margin

debt,

trading

options

and

other

derivatives on our shares of common

stock and any related hedging

and other trading factors:

there

extreme

market

volatility

and

trading

patterns

our

common

stock,

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

our

operating

performance

prospects,

macro

industry

fundamentals;

●

our

future

market

capitalization

reflects

trading

dynamics

unrelated

our

financial

performance or

prospects, purchasers

of our

common stock

could incur

substantial losses

as prices decline once

the level of market volatility

has abated;

●

if the

future market

price of

our common

stock declines,

purchasers of

shares of

common

stock may be

unable to resell

such shares at

or above the

price at which

they acquired them.

We cannot

assure such

purchasers that

the market

of our

common stock

will not

fluctuate

or decline significantly in

the future, in which case

investors could incur substantial

losses.

Further, we may

incur rapid and

substantial increases

or decreases

in our common

stock price in

the

foreseeable future

that may

not coincide

in timing

with the

disclosure of

news or

developments by

affecting us.

Accordingly, the

market price

of our

common stock

may fluctuate

dramatically, and

may

decline

rapidly,

regardless

any

developments

our

business.

Overall,

there

are

various

factors,

many

which

are

beyond

our

control,

that

could

negatively

affect

the

market

price

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

research

reports

analysts

others

about

the

shipping

industry

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

the

number

individual

holders

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.

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

the

Marshall

Islands

Business

Corporations

Act,

the

BCA.

The

provisions

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

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

shareholders

the

Marshall

Islands

may

differ

from

the

rights

shareholders

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

protecting your

interests in

the face

of actions

by the

management, directors

or controlling

shareholders

than

would

shareholders

corporation

incorporated

U.S.

jurisdiction

which

has

developed

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

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

other

offshore

jurisdictions,

our

operations

may

subject

economic substance requirements, which could impact our business.

are

Marshall

Islands

corporation

and

some

our

subsidiaries

are

Marshall

Islands

entities.

The

Marshall Islands has

enacted economic substance laws

and regulations with which

we may be

obligated

comply.

believe

that

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

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.

the

date

this

annual

report,

Ms.

Semiramis

Paliou,

our

Chief

Executive

Officer

and

Director,

beneficially owns 27,809,560 shares, or approximately 21.5% of

our outstanding common stock, which is

held

indirectly

through

entities

over

which

she

exercises

sole

voting

power.

Ms.

Paliou

controls 10,675

shares of

Series C

Preferred Stock,

par value

$0.01 per

share, issued

on January

31, 2019,

and 400

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

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%

the

total

number

votes

eligible

cast

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

Preferred

Stock

and

Series

Preferred

Stock,

Ms.

Paliou

controls

36%

the

vote

any

matter

submitted to the vote

of the common shareholders.

Please see "Item 7.

Major Shareholders and Related

Party Transactions—A.

Major Shareholders."

While Ms.

Paliou and

the entities

controlled by

Ms. Paliou

have no

agreement, arrangement

or understanding

relating to

the voting

of their

shares of

our common

stock, they

are able

to influence

the outcome

of matters

on which

our shareholders

are entitled

to vote,

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

may

have

the

effect

delaying,

deferring

preventing

change

control,

merger,

consolidation,

takeover or other

business combination.

This concentration of

ownership could

also discourage a

potential

acquirer from

making a

tender offer or

otherwise attempting

to obtain

control of

us, which

could in

turn have

an adverse effect

on the market

price of our

shares. So long

as our

Chief Executive Officer

continues to

own a significant amount

of our equity,

even though the amount

held by her represents

less than 50% of

our voting power,

she will continue to

be able to exercise

considerable influence over our

decisions. The

interests of these shareholders may be different from your interests.

Future sales of our common stock could cause the market price

of our common stock to decline.

Our amended

and restated

articles of

incorporation authorize

us to

issue up

to 1,000,000,000

shares of

common stock, of which, as

of December 31, 2025, 115,787,434 shares were outstanding.

The number of

shares of

common stock available

for sale

in the public

market is limited

by restrictions applicable

under

securities laws

and agreements

that we

and our

executive officers,

directors and

principal shareholders

have entered into.

Sales of a substantial

number of shares of our

common stock in the public

market, or the perception that

these

sales

could

occur,

may

depress the

market

price

for

our

common

stock.

These

sales

could

also

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

securities in the future.

Anti-takeover

provisions

our

organizational

documents

could

make

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

prevent a merger or acquisition that shareholders may consider

favorable.

These provisions include:

●

authorizing

our board

of directors

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

the

holders

majority

the

outstanding shares

our

common

stock

entitled

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

2024, pursuant

which our

board of

directors may

cause the

substantial dilution

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

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

with

respect

dividends,

distributions

and

payments

upon

liquidation,

which

could

have

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.

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.

pay quarterly

dividends on

our Series

B Preferred

Shares only

from funds

legally available

for such

purpose when,

as and

declared by

our board

directors. We

may

not have

sufficient

cash available

each

quarter to

pay dividends.

The amount

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

record

losses

and

may

not

pay

dividends

during

periods

when

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

bear the

financial risks

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

diluted

the

issuance

additional

preferred

shares,

including

additional

Series

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

redeem preferred

shares. Our

amended and

restated

articles of

incorporation currently

authorize the issuance

of up to

50,000,000 preferred

shares, par value

$0.01 per share.

Of these preferred

shares, 1,000,000 shares have been

designated Series A Participating

Preferred Stock, 5,000,000 shares

have been

designated Series

B Preferred

Shares, 10,675

are designated

as Series

C Preferred

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

will

terminate,

except

the

right

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

the Series B Preferred Shares

(as a percentage of the

price of our Series B

Preferred Shares) relative to

market

interest

rates.

increase

market

interest

rates,

which

are

currently

low

levels

relative

historical

rates,

may

lead

prospective

purchasers

our

Series

Preferred

expect

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

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

pay

dividends

and

redeem

our

Series

Preferred

limited

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

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

fixed

the

redemption

preference

$25.00

per

plus

accumulated and

unpaid dividends

the

date

liquidation. If,

in the

case of

our

liquidation, there

are

remaining

assets

be distributed

after

payment

this

amount,

you

will

have

no right

receive

participate in these

amounts. Furthermore,

if the market

price for your

Series B Preferred

Shares is greater

than

the

liquidation

preference,

you

will

have

right

receive

the

market

price

from

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.

December 31,

2025,

we have

issued 9.9

million shares

of common

stock

and we

could issue

to 27.1

million additional shares

common

stock

connection

with

the

exercise

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

additional shares

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

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.

February

2005,

the

Company’s

articles

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,

the

State

Delaware,

which is located

at 2711 Centerville Road, Suite

400, Wilmington, Delaware

19808. The SEC

maintains an

Internet

site

that

contains

reports,

proxy

and

information

statements,

and

other

information

regarding

issuers that file electronically with

the SEC. The address of

the SEC's Internet site

is http://www.sec.gov.

The address of

the Company's

Internet site is

http://www.dianashippinginc.com

. The information

contained

on or connected to our website is not part of this annual report.

Recent Developments

Genco Acquisition Proposal

During 2025, we acquired 6,413,151 shares of common stock

of Genco Shipping and Trading

Limited, or

Genco, representing

approximately 14.8%

of Genco’s

outstanding shares

for $103.5

million. On

November

24, 2025, we submitted

to Genco’s board of directors

a proposal to acquire

all of the outstanding

shares of

Genco

we did

not already

own for

a price

of $20.60

per share

in cash.

January 16,

2026, following

Genco’s rejection of our proposal we announced our intention to nominate a slate of independent director

candidates for election

on the Genco

board. On March

6, 2026, we increased

our offer to $23.50

per share

in cash. This acquisition proposal would be financed by a $1.43 billion fully committed facility arranged by

DNB

Carnegie and

Nordea,

and

with

participation of

other

international banks.

Also

on March

2026,

Diana entered into a

definitive agreement with

Star Bulk Carriers Corp.,

or Star Bulk,

to acquire 16

vessels

of Genco for $470.5 million in cash upon, and subject to, the consummation

of an acquisition of Genco by

Diana.

Joint Venture Agreements

November

2023,

entered

into

joint

venture

agreement,

with

two

unrelated

companies

form

Windward

Offshore

GmbH

Co.

KG,

Windward,

for

the

purpose

establishing

and

operating

offshore wind

vessel company.

agreed to

contribute Euro

25.0 million,

being 45.45%

of Windward’s

capital, to

construct two

CSOVs. In

January 2024,

we increased

our commitment

to Euro

50.0 million,

being

45.87% of

Windward’s capital

in order

for the

partnership to

place orders

for two

additional CSOVs.

May 5, 2025, a new partner was admitted to Windward which reduced our ownership percentage to 34%.

In 2023,

2024 and 2025,

we invested Euro

9.7 million or

$10.3 million, Euro

25.0

million or

$27.1 million

and Euro

7.6 million or

$8.0 million,

respectively and in

2025 after

the admission

of the

new partner,

received Euro

3.1 million

or $3.5

million, as

return of

capital. As

of the

date of

this annual

report, we

invested

Euro 1.3 million or $1.5 million and the remaining commitment amounts

to Euro 9.4 million.

On March 12, 2025,

we entered into a

joint venture agreement with

an unrelated party to

establish Ecogas

Holding AS,

pursuant to

which we

agreed to

contribute $18.5

million, being

80.0% interests

of two

LPG

newbuilding

vessels

with

delivery

2027.

During

2025,

invested

$10.2

million

out

the

total

commitment.

In November 2025, Bergen Ultra

LP,

a limited partnership in which

we have 25% interest,

agreed to sell to

an unrelated third party,

the vessel DSI Drammen,

for $26.4 million. The vessel was delivered to her

new

owners on January 9, 2026

and we received $3.7 million as return of capital.

Tender offer

December 2024,

announced

the

commencement of

tender

offer

purchase

15,000,000

shares,

about

12.0%,

our

outstanding

common

stock

using

funds

available

from

cash

and

cash

equivalents

price

$2.00

per

share.

The

tender

offer

was

settled

January

2025

and

purchased a total of 11,442,645 shares of common stock for an aggregate amount of $23.0 million.

Dividends

March 21,

2025, we

paid

cash dividend

of $0.01

per share,

$1.2 million,

all

shareholders of

record as of March 12, 2025.

On June 24, 2025,

we paid a cash

dividend of $0.01

per share, or $1.2 million,

to shareholders of record

as of June 17, 2025.

On September

, 2025,

we paid

a cash

dividend of

$0.01 per

share, or $1.2

million, to

shareholders of

record as of August 21, 2025.

On December

17, 2025,

we paid

a cash

dividend of

$0.01 per

share, or

$1.2 million,

to shareholders

record as of December 8, 2025.

On February 26, 2026, we declared a cash dividend of $0.01

per share, or $1.2 million, payable on March

18, 2026 to shareholders of record as of March 11, 2026.

Loans

On September 29, 2025, we signed a $55 million six-year secured term loan facility with National Bank of

Greece S.A. The full amount was drawn down immediately.

The new loan maturing in September 2031 is

secured by five vessels.

Warrant Distribution

On December 14, 2023,

we issued warrants to

purchase common shares (the “Warrants”)

to the holders

of record of Common Stock

as of the close of

business on December 6, 2023 (the

“Record Date”) on the

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

to this

annual report). Each

holder received one

Warrant for

every five shares

of issued and

outstanding

shares of common stock held as of the

Record Date (rounded down to the nearest whole number for

any

fractional

Warrant).

Each

Warrant

entitles

the

holder

purchase,

the

holder’s

sole

and

exclusive

election,

the

exercise

price,

one

common

stock,

subject

adjustments,

plus

the

extent

described

below,

the

Bonus

Fraction.

Bonus

Fraction

entitles

holder

receive

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

, 2026, each

Warrant entitles the

holder to purchase 1.12097

shares of common stock

plus the Bonus

Share Fraction adjusted to 0.56050 of a share of common stock

for each Warrant exercised.

The right

to receive

the Bonus

Share Fraction

will expire

at 5:00

p.m. New

York City time (the

“Bonus Share

Expiration Date”) upon

the earlier of (i)

the date specified

by the Registrant

upon not less than

20 business

days’

notice

and

(ii)

the

first

business

day

following

the

last

day

the

first

consecutive trading

day

period

which

the

daily

VWAP

the

common

stock

has

been

least

equal

the

then

applicable

trigger

price

for

least

trading

days

(whether

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

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

1933, as

amended.

The

shelf

registration

statement on

Form

F-3

declared

effective

July

2021

expired

and

the

Warrant

distribution

now

being

offered

pursuant

our

existing

shelf

registration

statement on Form F-3 declared effective on September 9, 2024.

The

Warrants

commenced

trading

the

New

York

Stock

Exchange

under

the

ticker

“DSX

WS”

December 14, 2023.

As of

the date

of this

annual report,

out of

the 22,613,070

Warrants distributed

in this

transaction, 6,410,343

Warrants have been exercised and 9,866,677 common shares have been issued.

Appointment of new Co-Chief Financial Officer

Effective January

17, 2025, we

appointed Ms. Maria

Dede as the

Company’s Co-Chief Financial

Officer.

In addition, effective January 1, 2026, she was appointed Co-Chief Financial

Officer and Treasurer.

Effective January 1, 2026, Mr.

Ioannis Zafirakis is the Company’s President, Mr.

Evangelos Sfakiotakis is

the Company’s Chief Technical

Investment Officer and Ms. Margarita Veniou is the

Company’s Secretary

and Corporate Contact.

Vessels under construction

In February

2024, we

signed an

agreement

with an

unaffiliated third

party, for the

construction of

two 81,200

dwt methanol

dual fuel

new-building

Kamsarmax dry

bulk vessels

to be

built at

Tsuneishi Group (Zhoushan)

Shipbuilding Inc., China. The vessels

are expected to be delivered to

the Company by the second

half of

2027 and the first half of 2028.

Vessel acquisitions

August

2022,

entered

into

master

agreement

with

unaffiliated

third

party,

acquire

nine

Ultramax vessels for

an aggregate purchase

price of $330

million, of which

$220 million payable

in cash

and

$110

million

through

aggregate

18,487,393

newly

issued

common

shares,

issuable

the

delivery

each

vessel.

addition

the

master

agreement,

also

entered

into

nine

separate

memoranda of agreement for the acquisition of each vessel and issued nine warrants to the seller, for the

issuance of the shares, exercisable on the delivery date of each vessel. We took delivery of eight vessels

in December 2022 and the ninth vessel in January 2023.

Vessel disposals

In June 2025, we agreed to sell to an unrelated

third party, the vessel Selina,

for $11.8

million. The vessel

was delivered to her new owners on July 15, 2025.

In February 2025, we agreed to sell to an unrelated third party, the vessel Alcmene, for $11.9

million. The

vessel was delivered to her new owners on March 13, 2025.

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

the vessel Houston, for $23.3 million. The

vessel was delivered to her new owners on September 4, 2024.

In January 2024,

we agreed to

sell to an

unrelated third party,

the vessel Artemis, for

the purchase price

of $13.0 million. The vessel was delivered to her new owners on

March 5, 2024.

In October

2023, we

agreed to

sell to

an unrelated

third party,

the vessel

Boston, for

$18.0 million.

The

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

In February

2023, we

agreed to

sell to

OceanPal, a

related party,

the vessel

Melia, for

$14.0 million,

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.

January

2023,

agreed

sell

unrelated

third

party,

the

vessel Aliki,

for

$15.08

million.

The

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

Business overview

We specialize

in the ownership

and bareboat charter-in

of dry bulk

vessels, determined as one

business

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

subsidiary.

As of

the date

of this

report, our

fleet consisted

of 38

vessels of

which 36

in operation,

owned and

chartered-

in, having

a combined carrying

capacity of

4.1 million dead weight

tons, or

dwt, and

a weighted average

age of

12.3 years. We

also have

two Kamsarmax vessels

under construction with

expected deliveries in

2027 and 2028.

As of December

31, 2025,

we had a

fleet of 36

dry bulk

carriers, owned and

chartered-in, consisting

of nine

Ultramax,

five

Panamax,

six

Kamsarmax,

four

Post-Panamax,

eight

Capesize

and

four

Newcastlemax

vessels, having

a combined

carrying capacity

of approximately

4.1 million

dwt and a

weighted average

age

of 12.1 years.

As of December

31, 2024,

we had a

fleet of 38

dry bulk

carriers, owned and

chartered-in, consisting

of nine

Ultramax,

six

Panamax,

six

Kamsarmax,

five

Post-Panamax,

eight

Capesize

and

four

Newcastlemax

vessels, having

a combined

carrying capacity

of approximately

4.2 million

dwt and a

weighted average

age

of 11.3 years.

December

31,

2023,

had

fleet

dry

bulk

carriers,

consisting

nine

Ultramax,

seven

Panamax, six Kamsarmax, five

Post-Panamax, nine Capesize and

four Newcastlemax vessels, having

combined carrying capacity of approximately 4.5 million dwt and a

weighted average age of 10.5 years.

During

2025,

2024

and

2023,

had

fleet

utilization

99.7%,

99.7%

and

99.7%,

respectively,

our

vessels achieved daily

time charter equivalent

rates of

$15,454, $15,267 and

$16,713, respectively,

and

we generated revenues of $213.5 million, $228.2 million and $262.1

million, respectively.

operate

our

vessels

worldwide,

markets

that

have

historically

exhibited

seasonal

variations

demand and,

as a

result, in

charter hire

rates. The

dry bulk

carrier market

is typically

stronger in the

fall

and winter months in

anticipation of increased

consumption of coal and

other raw materials

in the northern

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

in these months tend to

disrupt vessel

scheduling and supplies

of certain commodities.

Currently,

the majority

of our vessels

are

employed on

short-

to medium-term

time charter

agreements.

We may

fix our

vessels on

short-, medium-

long-term

employment

depending

prevailing

market

conditions,

which

provides

with

flexibility

responding to market developments.

Management of Our Fleet

The commercial and technical management of our fleet, owned and

bareboat chartered-in, as well as the

provision of administrative services

relating to the fleet’s

operations, are carried out

by our wholly-owned

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

Limited, a 50/50 joint

venture with Wilhelmsen

Ship Management, which

we refer to as

DWM. In exchange

for

providing

with

commercial

and

technical

services,

personnel

and

office

space,

pay

DSS

commission,

which

percentage

the

managed

vessels’

gross

revenues,

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

perform

its

operations. Similarly, in exchange

for providing

us with

commercial and

technical services,

we pay

to DWM

a commission

which is

a percentage

of the

managed vessels’

gross revenues

and a

fixed management

monthly fee

for each

managed vessel.

The amounts

deriving from

the agreements

with DSS

are considered

inter-company transactions and, therefore, are eliminated from

our consolidated financial statements. The

management fees

and commissions

deriving from

the agreements

with DWM

are included

in our

statement

of income in “Management fees to a related party” and “Voyage Expenses”.

Steamship

Shipbroking

Enterprises

Inc.,

Steamship,

party

controlled

our

CEO

Ms.

Semiramis Paliou,

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

“General

and

Administrative

expenses”

our

statement

income.

The

terms

this

relationship

are

currently governed by a Brokerage Services Agreement dated

February 25, 2026.

The following table presents certain information

concerning the dry bulk carriers in

our fleet, as of the date

of this annual report.

Fleet Employment (As of the date of this annual

report)

VESSEL

SISTE

SHIPS*

GROSS RATE

(USD PER DAY)

COM**

CHARTERERS

DELIVERY DATE

CHARTERERS***

REDELIVERY DATE TO

OWNERS****

NOTES

BUILT DWT

9 Ultramax Bulk Carriers

DSI Phoenix

13,500

4.75%

Cargill Ocean Transportation

(Singapore) Pte. Ltd.

8-Aug-25

1/Oct/2026 - 30/Nov/2026

2017 60,456

DSI Pollux

14,750

5.00%

Stone Shipping Ltd

9-Dec-25

1/Jan/2027 - 28/Feb/2027

2015 60,446

DSI Pyxis

13,100

5.00%

Stone Shipping Ltd

8-Nov-24

20/Mar/2026 - 20/Apr/2026

2018 60,362

DSI Polaris

12,250

4.75%

Cargill Ocean Transportation

(Singapore) Pte. Ltd.

1-Jul-25

21/Jul/2026 - 21/Sep/2026

2018 60,404

DSI Pegasus

14,250

4.75%

Cargill Ocean Transportation

(Singapore) Pte. Ltd

15-Aug-25

20/May/2026 - 20/Jul/2026

2015 60,508

DSI Aquarius

14,500

5.00%

Bunge SA, Geneva

7-Nov-25

1/Nov/2026 - 31/Dec/2026

2016 60,309

DSI Aquila

14,500

5.00%

Bunge SA, Geneva

12-Oct-25

25/Feb/2027 - 25/Apr/2027

2015 60,309

DSI Altair

14,750

5.00%

Bunge SA, Geneva

19-Jan-26

15/Jan/2027 - 30/Mar/2027

2016 60,309

DSI Andromeda

14,600

5.00%

Western Bulk Carriers AS

7-Dec-25

1/Apr/2027 - 31/May/2027

2016 60,309

5 Panamax Bulk Carriers

LETO

12,750

4.75%

Cargill International SA, Geneva

4-Apr-25

16/Jul/2026 - 16/Sep/2026

2010 81,297

MAERA

11,750

5.00%

CRC Shipping Pte. Ltd., Singapore

3-Nov-25

20/Oct/2026 - 20/Dec/2026

2013 75,403

ISMENE

11,000

5.00%

CRC Shipping Pte. Ltd.

24-Apr-25

20/Mar/2026 - 20/May/2026

2013 77,901

CRYSTALIA

13,900

5.00%

Louis Dreyfus Company Freight

Asia Pte. Ltd.

4-May-24

13-Mar-26

2014 77,525

16,200

5.00%

SwissMarine Pte. Ltd., Singapore

13-Mar-26

10/Mar/2027 - 10/May/2027

ATALANDI

10,100

5.00%

Stone Shipping Ltd

8-Jun-25

15/Jun/2026 - 15/Aug/2026

2014 77,529

6 Kamsarmax Bulk Carriers

MAIA

11,600

5.00%

Paralos Shipping Pte. Ltd.

9-Dec-24

16-Jan-26

2009 82,193

14,000

5.00%

16-Jan-26

5/Jul/2027 - 5/Sep/2027

MYRSINI

13,000

4.75%

Cargill International SA, Geneva

26-Feb-25

3-Jan-26

2010 82,117

13,500

5.00%

Paralos Shipping Pte. Ltd.

3-Jan-26

20/Dec/2026 - 20/Feb/2027

MEDUSA

13,000

4.75%

Cargill International SA, Geneva

16-Mar-25

15/May/2026 - 15/Jul/2026

2010 82,194

MYRTO

12,000

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

23-Dec-24

25/Mar/2026 - 15/May/2026

2013 82,131

ASTARTE

12,500

5.00%

Propel Shipping Pte. Ltd.

2-Aug-25

16/Aug/2026 - 16/Oct/2026

2013 81,513

LEONIDAS P. C.

14,000

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

24-Sep-25

15/Sep/2026 - 15/Nov/2026

2011 82,165

4 Post-Panamax Bulk Carriers

AMPHITRITE

12,100

5.00%

Cobelfret S.A., Luxembourg

8-Jan-25

12-Feb-26

2012 98,697

16,500

5.00%

12-Feb-26

1/Mar/2027 - 30/Apr/2027

POLYMNIA

14,000

5.00%

Oldendorff Carriers GmbH & Co.

17-Aug-25

10/Apr/2026 - 10/Jun/2026

2012 98,704

ELECTRA

14,000

5.00%

Oldendorff Carriers GmbH & Co.

7-Dec-25

1/Dec/2026 - 31/Jan/2027

2013 87,150

PHAIDRA

9,750

5.00%

SwissMarine Pte. Ltd., Singapore

31-May-25

27-Feb-26

2013 87,146

14,500

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

27-Feb-26

20/Feb/2027 - 20/Apr/2027

8 Capesize Bulk Carriers

SEMIRIO

16,650

5.00%

Solebay Shipping Cape Company

Limited, Hong Kong

11-Feb-25

15-Mar-26

2007 174,261

21,650

5.00%

15-Mar-26

31/Jan/2027 - 15/Apr/2027

NEW YORK

17,600

5.00%

SwissMarine Pte. Ltd., Singapore

11-Jan-25

20/Mar/2026 - 13/May/2026

1,13

2010 177,773

SEATTLE

24,500

5.00%

SwissMarine Pte. Ltd., Singapore

29-Nov-25

1/May/2027 - 30/Jun/2027

2011 179,362

S. PALIOS

25,200

5.00%

Glencore Freight Pte. Ltd.

15-Dec-25

15/Nov/2026 - 15/Jan/2027

2013 179,134

G. P. ZAFIRAKIS

26,800

5.00%

Nippon Yusen Kabushiki Kaisha,

Tokyo

16-Sep-24

16/Aug/2026 - 16/Nov/2026

2014 179,492

SANTA BARBARA

25,500

5.00%

Dampskibsselskabet Norden A/S

27-Nov-25

1/Mar/2027 - 30/Apr/2027

2015 179,426

NEW ORLEANS

26,000

5.00%

SwissMarine Pte. Ltd., Singapore

31-Oct-25

1/Dec/2026 - 15/Feb/2027

14,15

2015 180,960

FLORIDA

25,900

5.00%

Bunge S.A., Geneva

29-Mar-22

29/Jan/2027 - 29/May/2027

2022 182,063

4 Newcastlemax Bulk Carriers

LOS ANGELES

24,000

5.00%

MOL Ocean Bulk Pte. Ltd.,

Singapore

1-Nov-25

10/Sep/2026 - 1/Nov/2026

2012 206,104

PHILADELPHIA

21,500

5.00%

Refined Success Limited

29-May-25

9/Jun/2026 - 8/Aug/2026

2012 206,040

SAN FRANCISCO

26,000

5.00%

SwissMarine Pte. Ltd., Singapore

1-Mar-25

25/Oct/2026 - 25/Dec/2026

2017 208,006

NEWPORT NEWS

25,000

5.00%

Bohai Ocean Shipping (Singapore)

Holding Pte. Ltd.

16-Jun-25

1/Sep/2026 - 31/Oct/2026

2017 208,021

* Each dry bulk carrier is a “sister ship”, or closely

similar, to other dry bulk carriers that have the same letter.

** Total commission percentage paid to third parties.

*** In case of newly acquired vessel with

time charter attached, this date refers to the expected/actual

date of delivery of the vessel to the Company.

**** Range of redelivery dates, with the actual

date of redelivery being at the Charterers’

option, but subject to the terms, conditions, and

exceptions of the

particular charterparty.

1Based on latest information.

2Vessel on scheduled drydocking from September 17, 2025 to October

12, 2025.

3Vessel on scheduled drydocking from December 27, 2025 to January

19, 2026.

4Bareboat chartered-in for a period of ten years.

5Estimated redelivery date from the charterers.

6Estimated delivery date to the charterers.

7The charter rate was US$9,000 per day for

the first thirty-five (35) days of the charter period.

8Charterers have agreed to compensate the Owners,

for all the days over and above the maximum

redelivery date (December 31, 2025), at

a hire rate of

105% of the average of the Baltic Panamax Index

5TC or the vessel’s present charter party rate

whichever of the two is higher.

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

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

10The charter rate will be US$13,000 per

day for the first thirty (30) days of the charter

period.

11Vessel off hire for drydocking from September 8, 2025 to November 1, 2025.

12Estimated date.

13The charter rate was US$6,300 per day for

the first trip of the charter period.

14Bareboat chartered-in for a period of eight years.

15Vessel on scheduled drydocking from September 20, 2025 to

October 31, 2025.

Our Customers

Our customers include

regional and international

companies, mainly with

concentrations below 10%

of our

gross revenues. During 2025,

only two of our

charterers accounted for

29% of our revenues,

in aggregate.

During

2024,

one

our

charterers

accounted

for

11%

our

revenues

and

during

2023,

one

our

charterers accounted for 13% of our revenues.

We charter our

dry bulk

carriers, owned

and bareboat

chartered-in, to

customers pursuant

to time charters.

Under our time charters, the charterer typically

pays us a fixed daily charter hire rate and

bears all voyage

expenses, including the cost

of bunkers (fuel

oil) and canal and

port charges. We

remain responsible for

paying the

chartered vessel's

operating expenses,

including the

cost of

crewing, insuring,

repairing and

maintaining the

vessel. In

2025, we

paid commissions that

ranged from

4.75% to

5.0% of

the total

daily

charter hire

rate of

each charter

to unaffiliated

ship brokers

and to

in-house brokers

associated with

the

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

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

market

demand,

seek

adjust

the

charter

hire

periods

for

our

vessels

according

prevailing

market

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

we fix some

of our

vessels on

long-term time

charters. Currently,

most of

our vessels

are employed

on short-

to medium-

term time charters, which

allows us greater flexibility

to respond to market

developments. We continuously

evaluate

our

mix

short-

and

long-term

charters and

extend

reduce

the

charter

hire

periods

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

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

function

the

underlying

balance

between

vessel supply and demand, although at

times other factors may play a

role. Furthermore, the pattern seen

charter

rates

broadly

mirrored

across

the

different

charter

types

and

the

different

dry

bulk

carrier

categories. In the

time charter market,

rates vary depending

on the length

of the charter

period and vessel-

specific factors such as age, speed and fuel consumption.

In the voyage charter market, rates are, among other things, influenced by cargo size, bunker prices, port

dues and canal transit fees, as well

as commencement and termination

regions. In general, a larger

cargo

size is quoted

at a lower

rate per ton

than a smaller

cargo size.

Routes with

costly ports or

canals generally

command higher rates

than routes

with low port

dues and

no canals to

transit. Voyages

with a

load port

within a

region that

includes ports

where vessels

usually discharge

cargo or

a discharge

port within

a region

with

ports

where

vessels

load

cargo

also

are

generally

quoted

lower

rates,

because

such

voyages

generally increase vessel utilization

by reducing the unloaded portion

(or ballast leg) that is

included in the

calculation of the return charter to a loading area.

Within the dry bulk shipping industry, the

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

freight rate indices

issued by the

Baltic Exchange. These

references are based

on actual charter

hire rates

under

charters

entered

into

market

participants

well

daily

assessments

provided

the

Baltic

Exchange by a panel

of major shipbrokers.

The Baltic Panamax

Index is the index

with the longest

history.

The Baltic Capesize Index and Baltic Handymax Index are

of more recent origin.

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

20 shipping routes measured on a time

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

bulk carriers.

In 2025, the BDI ranged from a low of 715 to a high of 2,845 and closed

at 1,972 on March 12, 2026.

The Dry Bulk Shipping Industry

The

global

dry

bulk

carrier

fleet

could

divided

into

seven

categories

based

vessel's

carrying

capacity. These categories consist of:

●

Very

Large Ore

Carriers/ Newcastlemax

. Vessels

with carrying

capacities of

between 200,000

and 220,000 dwt.

These vessels

carry both

iron ore

and coal

and they

represent the

largest vessels

able to enter the

port of Newcastle

in Australia. There are

relatively few ports

around the world with

the infrastructure to accommodate vessels of this size.

●

Capesize

. Capesize vessels (including Baby Capes) have a carrying capacity of 100,000-120.000

dwt

for

Baby

Capes,

and

150,000-199,999

dwt

for

conventional

Capes.

Only

the

largest

ports

around the world

possess the

infrastructure to

accommodate vessels

of this size.

Capesize vessels

are primarily

used to

transport iron

ore or

coal and,

to a

much lesser

extent, grains,

primarily on

long-haul routes.

●

Post-Panamax

vessels

have

carrying

capacity

84,000-99,999

dwt.

These

vessels tend

to have

a shallower

draft and

larger beam

than a

standard Panamax

vessel with

higher

cargo

capacity.

These

vessels

have

been

designed

specifically

for

high

cubic

cargoes from draught

restricted ports. Post-Panamaxes

are used primarily

in the coal

trade, as well

as grains from River Plate to Far East.

●

Panamax

Panamax vessels have a carrying

capacity of 70,000-79,999, and a

subset within this

segment is

the ‘Kamsarmax’

at 80,000

- 83,999

dwt. These

vessels carry

coal, iron

ore, grains,

and,

to a lesser extent, minor bulks,

including steel products, cement, and fertilizers. Panamax vessels

are able to pass

through the Panama Canal, making them

more versatile than larger vessels

with

regard

accessing

different

trade

routes.

Most

Panamax

and

Post-Panamax

vessels

are

“gearless,”

and

therefore

must

served

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

ports

which

have

poor

infrastructure

terms

and

unloading facilities.

●

Ultramax

the

largest

class

before

Panamax

and

the

newer

form

the

smaller

Supramax with

maximum

length

200

meters

and

capacity

that

ranges

from

60,000

dwt

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

its

higher

cargo

carrying

capacity

and

better

bunker

efficiency.

Ultramax

class

bulk

carriers

have

cargo

holds.

are

fitted

with

cranes

and

usually are equipped with grabs allowing

them to call more ports with no such

facilities giving them

more versatility. Ultramaxes often compete with Panamaxes on certain grain routes.

●

Handymax/Supramax

Handymax vessels have a carrying

capacity of 40,000-59,999 dwt.

These

vessels

operate

large

number

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

and

unloading

flexibility

with

on-board

cranes,

“gear,”

while

the

same

time

possessing the cargo carrying capability approaching conventional

Panamax bulk carriers.

●

Handysize

Handysize vessels have

a carrying capacity

of up

to 39,999 dwt.

These vessels are

primarily

involved

carrying

minor

bulk

cargoes.

Increasingly,

ships

this

type

operate

within

regional

trading

routes, and

may

serve

trans-shipment

feeders

for

larger vessels.

Handysize

vessels are well

suited for small

ports with length

and draft restrictions.

Their cargo gear

enables

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

Other size categories occur in regional trade,

such as Kamsarmax, with a maximum length

of 229 meters,

the maximum

length that can

load in

the port

of Kamsar

in the

Republic of Guinea.

Other terms

such as

Seawaymax, Setouchmax and Dunkirkmax also appear in regional trade.

The supply

of dry

bulk carriers

is dependent

on the

delivery of

new vessels

and the

removal of

vessels

from the global fleet,

either through scrapping

or loss. The level

of scrapping activity

is generally a function

of scrapping prices

in relation to current

and prospective charter market

conditions, as well as

operating,

repair

and

survey

costs.

The

age

range

which

vessel

scrapped

between

and

years,

depending on among others, the vessel type, the freight

market conditions and regulatory requirements.

The

demand

for

dry

bulk

carrier

capacity

determined

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

also

affected

the

operating

efficiency

the

global

fleet,

along

with

port

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

absorbing tonnage and therefore leading

to a

tighter balance

between supply

and demand.

In evaluating

demand factors

for dry

bulk carrier

capacity,

the Company believes that dry

bulk carriers can be

the most versatile element

of the global shipping

fleets

in terms of employment alternatives.

Vessel Prices

Dry bulk

vessel values in

2025 generally remained

firm and

in several

segments increased compared

2024, despite fluctuations

in charter rates

during the year.

This resilience in

secondhand asset values

largely supported

by historically

high newbuilding

prices and

a restricted

availability of

shipyard slots

for

near-term deliveries which limits near-term fleet growth. While 2025 presented a mixed rate environment,

charter

rates

have shown

notable

strength and

upward

trajectory in

early

2026.

However,

given the

cyclical nature of the industry,

there can be no assurance

as to how long vessel values

and charter rates

will remain at

their current robust

levels, or whether

they will continue

to improve or

face adjustments in

the

near future.

Competition

Our business

fluctuates in

line with

the main

patterns of

trade of

the major

dry bulk

cargoes and

varies

according to

changes in

the supply

and demand

for these

items. We

operate in

markets that

are highly

competitive and

based primarily

on supply

and demand.

We compete

for charters

on the

basis of

price,

vessel

location,

size,

age

and

condition

the

vessel,

well

our

reputation

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.

●

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

apply the

technical knowledge

one vessel

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.

●

have

experienced

management

team.

Our

management

team

consists

experienced

executives

who

have,

average,

than

years

operating

experience

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.

●

benefit from

strong relationships

with members

of the

shipping and

financial industries.

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

institutions

that

believe

are

the

result

the

quality

our

operations,

the

strength

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

indebtedness

provide

with

the

flexibility

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

are

required

various

governmental

and

quasi-governmental

agencies

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

the

vessel's

crew

and

the

age

vessel.

have

been

able

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

Iran

certain

designated

natural

persons

entities

involved

terrorism

the

proliferation of weapons of mass destruction during the period

covered by the report.

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

2025 and to the date of this annual report.

Environmental and Other Regulations in the Shipping Industry

Government

regulation

and

laws

significantly

affect

the

ownership

and

operation

our

fleet.

are

subject to international conventions and treaties,

national, state and local laws

and regulations in force in

the

countries

which

our

vessels

may

operate

are

registered

relating

safety

and

health

and

environmental

protection

including

the

storage,

handling,

emission,

transportation

and

discharge

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.

variety

government

and

private

entities

subject

our

vessels

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

equivalent),

classification

societies,

flag

state

administrations

(countries

registry)

and

charterers,

particularly

terminal

operators.

Certain

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

demand

for

vessels

that

conform

stricter

environmental

standards.

are

required

maintain

operating

standards

for

all

our

vessels

that

emphasize

operational

safety,

quality

maintenance,

continuous

training

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

other

authorizations

necessary

for

the

conduct

our

operations. However, because such laws and regulations frequently

change and may impose increasingly

stricter

requirements,

cannot

predict

the

ultimate

cost

complying with

these

requirements,

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

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

air

emissions.

Annex

was

separately

adopted

the

IMO

September

1997;

new

emissions

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

Air Emissions

September

1997,

the

IMO

adopted

Annex

MARPOL

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

specific substances.

Annex VI

also includes

a global

cap on

the sulfur

content of

fuel

oil and

allows for

special

areas

established

with

stringent

controls

sulfur

emissions,

explained

below.

Emissions

“volatile

organic

compounds”

from

certain

vessels,

and

the

shipboard

incineration

(from

incinerators installed after

January 1, 2000)

of certain

substances (such as

polychlorinated biphenyls, or

“PCBs”) are also prohibited. We believe that

all our vessels are currently compliant

in all material respects

with these regulations.

The Marine Environment Protection Committee, or

“MEPC”, adopted amendments to Annex VI

regarding

emissions of

sulfur oxide,

nitrogen oxide,

particulate matter

and ozone

depleting substances,

which entered

into force

on July

1, 2010.

The amended Annex

VI seeks

to further

reduce air

pollution by,

among other

things, implementing

a progressive

reduction of

the amount

of sulfur

contained in

any fuel

oil used

on board

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

0.5% m/m sulfur

oxide emissions

limit (reduced

from 3.50%)

starting from

January 1,

2020. This

limitation can

be met

using

low-sulfur compliant fuel

oil, alternative

fuels,

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

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”).

January 1, 2015,

ships operating

within an

ECA were

not permitted

to use fuel

with sulfur content

in excess

of 0.1% m/m. Currently,

the IMO has designated five

ECAs, including specified portions of the

Baltic Sea

area, Mediterranean Sea area,

North Sea area, North

American area and United States

Caribbean area.

Ocean-going vessels

in these

areas will

be subject

to stringent

emission controls

and may

cause us

incur additional costs.

Other areas

in China are

subject to local

regulations that

impose stricter emission

controls.

July

2023,

MEPC

announced

three

new

ECA

proposals,

including

the

Canadian

Arctic

waters

and

the

Norwegian

Sea,

which

should

take

effect

March

2027.

MEPC

also

approved

the

Northeast Atlantic Ocean

as an ECA and

is expected to

take effect in 2028.

If other ECAs are

approved by

the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or

port operations by vessels

are adopted by the

U.S. Environmental Protection

Agency (“EPA”) or the states

where

operate,

compliance

with

these

regulations

could

entail

significant

capital

expenditures

otherwise increase the costs of our operations.

Amended Annex VI also established new tiers

of stringent nitrogen oxide emissions standards for marine

diesel engines, depending

on their date

of installation. Tier III

NOx standards were

designed for the

control

of NOx

produced by

vessels and

apply to

ships that

operate in

the North

American and

U.S. Caribbean

Sea ECAs with a marine diesel engine installed

and constructed on or after January 1,

2016. At MEPC 70

and MEPC 71,

the MEPC approved

the North Sea

and Baltic Sea

as ECAs

for nitrogen oxide

for ships built

on or after January 1,

2021. The Canadian-Arctic

ECA for NOx will

also be effective starting from

March 1,

2026

for

ships

built

after

January

2025.

For

the

Norwegian

Sea

ECA,

the

NOx

Tier

III

engine

certification requirement will apply to ships (i) with building contracts placed on or after March 1, 2026, (ii)

in the

absence of

a building

contract, constructed

on or

after September

1, 2026,

or (iii)

delivered on

after

March

2030. For

the

North-East Atlantic

ECA,

the

requirement

is expected

apply

ships (i)

contracted on

or after

January 1,

2027, (ii)

in the

absence of

a building

contract, constructed

on or

after

July 1, 2027, or (iii) delivered on or after January 1,

2031. The EPA promulgated equivalent (and in some

senses

stricter)

emissions

standards

2010. Tier

III

requirements

could

apply

additional

areas

designated for Tier

III NOx in the

future. In April 2025, MEPC

83 also adopted amendments (expected to

enter into force late

2026 and early 2027)

to the NOx Technical Code 2008, which allows

ships to optimize

fuel

consumption

based

their

operational

profile,

thus

improving

energy

efficiency,

while

ensuring

compliance

with

NOx

emission

requirements.

result

these

designations

similar

future

designations, we may be required to incur additional operating or other costs.

At the

MEPC 70,

Regulation 22A

of MARPOL

Annex VI became

effective as of

March 1, 2018

and requires

ships

above

5,000

gross

tonnage

collect

and

report

annual

data

fuel

oil

consumption

IMO

database, with the

first year of data

collection having

commenced on January

1, 2019. The

IMO used such

data

part

its

initial roadmap

(through

2023)

for

developing

its

strategy to

reduce

greenhouse gas

emissions

from

ships,

discussed

further

below.

MEPC

approved

draft

amendments

make

the

IMO’s data collection system more accessible to the public through an anonymized database.

As of January

1, 2013, MARPOL

made mandatory certain

measures relating to

energy efficiency for

ships.

All

ships

are

now

required

develop

and

implement

Ship

Energy

Efficiency

Management

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

with minimum energy efficiency levels

per

capacity

mile

defined

the

Energy

Efficiency

Design

Index (“EEDI”).

Additionally,

MEPC

adopted amendments

to MARPOL Annex

VI which brought

forward the effective

date of the

EEDI’s “phase

3” requirements

from April

1, 2022 to

January 1,

2025 for

several ship

types, including

gas carriers,

general

cargo ships, and LNG carriers.

Additionally,

in 2022,

MEPC 75

amended to

Annex VI

to impose

new regulations

to reduce

greenhouse

gas emissions from ships. These amendments

introduce requirements to assess and

measure the energy

efficiency of all ships and set the

required attainment values, with

the goal of reducing the carbon

intensity

of international shipping. The requirements include (1) a

technical requirement to reduce carbon intensity

based

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

document

and

verify

their

actual

annual

operational

CII

achieved

against

determined

required

annual

operational

CII.

All

ships

above

400

gross

tonnage

must

also

have

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

include the

attained and

required CII

values, the

CII rating

and attained

EEXI for

existing ships

in the

required information

submitted to

the IMO

Ship Fuel Oil

Consumption Database. MEPC

79 also

revised the

EEDI calculation

guidelines to include a CO2

conversion factor for ethane, a

reference to the updated ITCC

guidelines, and

a clarification that in case of a ship with

multiple load line certificates, the maximum certified summer

draft

should be used when

determining the deadweight.

These amendments entered

into force on May

1, 2024.

In July 2023, MEPC 80 approved the

plan for reviewing CII regulations and guidelines, and

in April 2025,

MEPC

adopted

amendments

2021

Guidelines

operational

carbon

intensity

reduction

factors,

which

outline methods

for

determining CII

reduction factors

from

2023 and

now

includes newly

defined

factors from 2027 to 2030.

may

incur

costs

comply

with

these

revised

standards.

Additional

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

loss

life

personal

injury

claim

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

assess

all

risks

and

then

take

measured

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

Ships

and

for

Pollution

Prevention (the “ISM

Code”),

our

operations

are

also

subject

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

control of a

vessel to develop

an extensive

safety management

system that

includes, among

other things,

the adoption

of a

safety and

environmental protection policy

setting forth

instructions and procedures

for operating its

vessels safely and describing procedures

for responding to emergencies. Through

strong leadership and

disciplined,

clearly

documented

management

system,

the

Company

promotes

the

concept

HSSE

(Health, Safety,

Security and

Environmental) excellence

at all

levels in

the organisation.

This concept

achieved

by consistent

measurement and

feedback of

the

Company’s Management

System in

order to

generate

continuous

and

sustainable

improvement

Health,

Safety,

Security,

and

Quality

and

Environmental

(including

Energy

Efficiency)

(HSSQE)

management

processes. The

failure

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

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

the

functional

requirements

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

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)

new

handling

code,

and

(6)

changes

stowage

and

segregation

provisions.

The

newest

edition

the

IMDG

Code

took

effect

January

2024,

although

the

changes

are

largely

incremental.

The

IMO

has

also

adopted

the

International

Convention

Standards

Training,

Certification

and

Watchkeeping for Seafarers (“STCW”). As of February

2017, all seafarers are required

to meet the STCW

standards

and

be in

possession

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

the

International Code for Ships Operating in Polar Water

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

into force

on January

1, 2017,

covers design,

construction, equipment,

operational, training,

search and

rescue as well

as environmental protection matters

relevant to ships

operating in the

waters surrounding

the two

poles. It

also includes mandatory

measures regarding

safety and pollution

prevention as

well as

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

after

January

2018,

ships

constructed

before

January

2017

are

required

meet

the

relevant

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

Furthermore,

cybersecurity

guidance

and

regulations

have

been

developed

attempt

combat

cybersecurity

threats.

For

new

ships

and

offshore

installations

contracted

for

construction

after

January

2024,

the

International

Association

Classification

Societies

(“IACS”)

now

requires

vessel

owners,

yard

and

suppliers

build

cybersecurity

barriers

into

their

systems

and

vessels,

requiring

compliance across

the full

spectrum of

critical on-board

control and

navigation systems.

In addition

to these

requirements, the Company

is actively addressing

the European

Union's Network

and Information

Security

(NIS2)

Directive.

During

2025,

completed

comprehensive

NIS2

Gap

Analysis

and

have

initiated

remediation of findings to

ensure compliance with these

enhanced cybersecurity obligations. On July

16,

2025,

the

U.S.

Coast

Guard’s

final

rule,

Cybersecurity in

the

Martine

Transportation

System,

went

into

effect.

Under

this

rule,

all

regulated

entities

are

required

develop

Cybersecurity

and

Cyber

Incident

Response

Plans,

designate

Cybersecurity

Officer

implement

plans,

and

report

certain

cyber

incidents to the

National Response Center.

This might cause

companies to create

additional procedures

for

monitoring

cybersecurity,

which

could

require

additional

expenses

and/or

capital

expenditures.

The

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

In June

2022, SOLAS

also set

out new

amendments that

took effect

on January

1, 2024,

which include

new

requirements for:

(1)

the

design for

safe

mooring operations,

(2)

the

Global

Maritime

Distress and

Safety System (“GMDSS”),

(3) watertight integrity, (4) watertight doors

on cargo ships,

(5) fault-isolation of

fire detection

systems, (6)

life-saving appliances,

and (7)

safety of

ships using

LNG as

fuel. These

new

requirements may impact the cost of our operations.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions

that impose liability for pollution in

international waters

and

the

territorial

waters

the

signatories

such

conventions.

For

example,

the

IMO

adopted

International

Convention

for

the

Control

and

Management

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

phased

introduction

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.

The MEPC maintains guidelines for approval of ballast water management systems (G8).

Ships over 400

gross tons

generally must

comply with

a “D-1

standard,” requiring

the exchange

of ballast

water only

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

accordance

with

IMO

Guidelines

(Regulation

D-3).

Since

September

2024,

all

ships

have

been

required to meet the

D-2 standard. Additionally, in November

2020, MEPC 75

adopted amendments to

the

BWM Convention which would require

a commissioning test of the

ballast water management system for

the initial survey or when performing an additional survey for retrofits. This analysis will not apply to

ships

that already

have an

installed BWM

system certified

under the

BWM Convention.

These amendments

have

entered into force on

June 1, 2022. In

December 2022, MEPC

79 agreed that it

should be permitted

to use

ballast tanks

for temporary

storage of

treated sewage

and grey

water. MEPC 79

also established

that ships

are

expected to

return to

D-2

compliance after

experiencing challenging

uptake water

and bypassing

BWM system should only be used as a last resort.

Once

mid-ocean

exchange

ballast

water

treatment

requirements

become

mandatory

under

the

BWM

Convention, the

cost of

compliance could

increase for

ocean carriers

and may have

a material effect

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

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

maintain

insurance

for

pollution

damage

amount

equal

the

limits

liability

under

the

applicable

national

international

limitation

regime

(but

not

exceeding

the

amount

calculated

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,

the

“Anti-fouling

Convention.”

The

Anti-fouling

Convention,

which

entered

into

force

September 17,

2008,

prohibits

the

use

organotin

compound

coatings

prevent

the

attachment

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

ships

from

January

2023,

or,

for

ships

already bearing such an

anti-fouling system, at the

next scheduled renewal of the

system after that date,

but no later

than 60 months

following the last

application to the

ship of such

a system. In

addition, the IAFS

Certificate has been

updated to address

compliance options for

anti-fouling systems to

address cybutryne.

Ships which are affected by this ban on cybutryne must

receive an updated IAFS Certificate no later than

two years after

the entry

into force of

these amendments.

Ships which

are not

affected (i.e. with

anti-fouling

systems which do not contain cybutryne)

must receive an updated IAFS Certificate

at the next Anti-fouling

application to

the vessel.

These amendments

were formally

adopted at

MEPC 76

in June

2021 and

entered

into force on January 1, 2023.

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

Convention.

Requirements for the Safe and Environmentally Sound Recycling of Ships

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

entitled

fly

the

flag

Party

operating

under

its

authority,

with

some

exceptions

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

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

warn,

detain,

dismiss,

exclude

the

ship

from

its

ports,

which

might

have

impact

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

other

IMO

regulations

may

subject

the

ship

owner

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,

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.

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

threatened

discharges of oil from their vessels,

including bunkers (fuel). OPA defines these other damages broadly

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

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

liability

and

damages;

such

caps

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

periodic adjustment

for inflation).

On December

23, 2022,

the

USCG issued

a final

rule to

adjust the

limitation of

liability under the

OPA.

Effective March 23,

2023, the new

adjusted limits of

OPA

liability for

non-tank vessels, edible

oil tank vessels,

and any oil

spill response vessels,

to the

greater of $1,300

per

gross ton or $1,076,000 (subject to periodic adjustment for inflation).These limits of liability do not apply if

an incident

was proximately

caused by

the violation

of an

applicable U.S.

federal safety,

construction or

operating

regulation

responsible

party

(or

its

agent,

employee

person

acting

pursuant

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

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

$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

negligence,

the

primary

cause

the

release

was

violation of applicable safety,

construction or operating standards or regulations.

The limitation on liability

also does

not apply

if the

responsible person

fails or

refused to

provide all

reasonable cooperation

and

assistance as requested in connection with response activities where

the vessel is subject to OPA.

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

law.

OPA

and CERCLA both

require owners and

operators of vessels

to establish and

maintain with the

USCG evidence of

financial responsibility sufficient to

meet the maximum

amount of liability to

which the

particular

responsible

person

may

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

guarantee.

We comply

and

plan

comply going

forward

with

the

USCG’s

financial

responsibility

regulations by providing applicable certificates of financial responsibility.

OPA

specifically permits individual

states to

impose their own

liability regimes with

regard to oil

pollution

incidents

occurring

within

their

boundaries,

provided

they

accept,

minimum,

the

levels

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

discharge of

oil

release of

a hazardous

substance. These

laws may

be more

stringent than

U.S. federal

law.

Moreover,

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

waters,

although in

some

cases, states

which have

enacted this

type

of legislation

have not

yet issued

implementing regulations defining vessel owners’

responsibilities under these laws.

The Company intends

to comply with all applicable state regulations in the ports where

the Company’s vessels call.

We currently maintain pollution

liability coverage insurance

in the amount

of $1 billion per

incident for each

of our

vessels. If

the damages from

a catastrophic spill

were to

exceed our

insurance coverage, it

could

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

Other United States Environmental Initiatives

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

the EPA to

promulgate standards applicable to

emissions of volatile organic

compounds and other air

contaminants.

The CAA requires states to adopt State

Implementation Plans, or SIPs, some of which

regulate emissions

resulting from vessel loading and unloading operations which

may affect our vessels.

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

in U.S.

navigable waters

unless authorized

by a

duly-issued permit

or exemption,

and imposes

strict liability

in the form of

penalties for any

unauthorized discharges. The

CWA also imposes substantial

liability for the

costs

removal,

remediation

and

damages

and

complements

the

remedies

available

under

OPA

and

CERCLA.

The EPA and the

USCG have

also enacted

rules relating

to ballast

water discharge,

compliance with

which

requires the

installation of

equipment on

our vessels

to treat

ballast water

before it

is discharged

or the

implementation of other port

facility disposal arrangements or

procedures at potentially substantial costs,

and/or otherwise restrict our vessels from entering U.S. Waters. The EPA will regulate these ballast water

discharges and other discharges incidental to the normal operation

of certain vessels within United States

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

4, 2018 and

replaces the 2013

Vessel General

Permit (“VGP”) program and

current Coast Guard

ballast

water management regulations adopted

under the U.S. National

Invasive Species Act. VIDA establishes

new

framework

for

the

regulation

vessel

incidental

discharges

under

the

CWA,

requires

the

EPA

develop

performance

standards

for

those

discharges

within

two

years

enactment,

and

requires

the

USCG

develop

implementation,

compliance,

and

enforcement

regulations

within

two

years

EPA’s

promulgation

standards.

October

2024,

the

EPA

finalized

its

rule

Vessel

Incidental

Discharge

Standards

Performance,

which

means

that

the

USCG

must

now

develop

corresponding

regulations

regarding ballast water within two years of that date.

Under

VIDA,

all

provisions

the

2013

VGP

and

USCG

regulations

regarding

ballast

water

treatment

remain in force and

effect until the EPA and USCG

regulations are finalized.

Non-military, non-recreational

vessels greater than 79

feet in length must

continue to comply

with the requirements

of the VGP, including

submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We

have

submitted NOIs

for our

vessels where

required. Compliance

with the

EPA, U.S.

Coast Guard

and

state regulations could require

the installation of ballast water

treatment equipment on our

vessels or the

implementation of

other port

facility disposal

procedures at

potentially substantial

cost or

may otherwise

restrict our vessels from entering U.S. waters.

European Union Regulations

October

2009,

the

European

Union

amended

directive

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

water.

Aiding

and

abetting

the

discharge

polluting

substance

may

also

lead

criminal

penalties. The

directive applies

to all

types of

vessels, irrespective

of their

flag, but

certain exceptions

apply

to warships or where human safety

or that of the ship is

in danger. Criminal liability for pollution may result

substantial

penalties

fines

and

increased

civil

liability

claims.

Regulation

(EU)

2015/757

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,

imposing

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

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

called

“SOx-Emission

Control

Area”).

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”)

part of its

“Fit-for-55” legislation

to reduce net

greenhouse gas emissions

by at least

55% by 2030.

This will

require shipowners to

buy permits to

cover these emissions.

On December

18, 2022, the

Environmental

Council and European Parliament agreed on a gradual introduction of

obligations for shipping companies

to surrender allowances equivalent to a portion of their carbon emissions:

40% for verified emissions from

2024, 70% for

2025 and 100%

for 2026. Most

large vessels will

be included in

the scope of

the EU ETS

from the start. Big offshore vessels of 5,000 gross tonnage and above will be included in the 'MRV' on the

monitoring, reporting and verification of CO2 emissions from maritime transport

regulation from 2025 and

in the EU ETS from

2027. General cargo vessels

and off-shore vessels between 400-5,000

gross

tonnage

will be included in

the MRV regulation

from 2025 and their

inclusion in EU ETS

will be reviewed in

2026.

Furthermore, starting from

January 1, 2026,

the ETS regulations

will expand to

include emissions of

two

additional greenhouse gases: nitrous oxide and methane.

From January 1, 2025,

the EU adopted the

FuelEU Maritime regulation,

a proposal included

in the "Fit-for-

55" legislation. FuelEU Maritime

sets requirements on

the annual average GHG

intensity of energy

used

ships

trading

within the

European

Economic Area

(EEA).

This intensity

measured

as GHG

emissions

per

energy

unit

(gCO2e/MJ)

and,

turn,

GHG

emissions

are

calculated

well-to-wake

perspective. The calculation takes into account emissions related to the extraction, cultivation, production

and transportation of

fuel, in addition

to emissions from

energy used on

board the ship.

The baseline for

the calculation is the

average well-to-wake GHG intensity

of the fleet

in 2020: 91.16 gCO2e/MJ.

This will

start at

a 2%

reduction in

2025, increasing

to 6%

in 2030,

and accelerating

from 2035

to reach

an 80%

reduction by 2050.

Compliance with

the Maritime

EU ETS

and FuelEU

Maritime regulations

will result

in additional

compliance

and administration costs to properly incorporate the provisions of the Directive into our business routines.

Additional EU regulations which are part of

the EU’s "Fit-for-55," could also affect

our financial position in

terms of compliance and administration costs when they take effect.

EU Ship Recycling Regulation

The Regulation

is mostly

aligned with

the

Hong Kong

Convention on

Ship Recycling,

mentioned earlier

and aims quick

ratification of the

Convention. However, it sets

some additional requirements

and has been

into force since 2015 for new ships

and 2020 for existing ships. It concerns

vessels over 500 GT flying the

flag of a

member state or

vessels flying

the flag

of a 3

party calling at

port or anchorage

of member

states.

Our

fleet

fully

complies

with

this

regulation.

Our

fleet’s

Inventories

Hazardous Materials

preparation,

certification and continuous maintenance have resulted in a

significant cost to the Company.

International Labour Organization

The International Labour Organization (the “ILO”) is

a specialized agency of the UN

that has adopted the

Maritime Labor Convention

2006 (“MLC 2006”). A

Maritime Labor Certificate

and a Declaration

of Maritime

Labor

Compliance is

required to

ensure compliance

with the

MLC 2006

for all

ships that

are 500

gross

tonnage

over

and

are

either

engaged

international

voyages

flying

the

flag

Member

and

operating

from

port,

between

ports,

another

country.

All

our

vessels

are

certified

under

the

Maritime Labor Convention 2006 (“MLC 2006”).

Greenhouse Gas Regulation

Currently,

the

emissions

greenhouse

gases

from

international

shipping

are

not

subject

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

any

new

treaty.

December 2009,

than

nations,

including the

U.S.

and

China,

signed

the

Copenhagen Accord,

which includes

a non-binding

commitment to

reduce greenhouse

gas emissions.

The

2015 United Nations Climate Change Conference in Paris resulted in

the Paris Agreement, which entered

into force on

November 4, 2016

and does not

directly limit greenhouse

gas emissions from

ships. The U.S.

is not a party to the Paris Agreement.

MEPC

and

MEPC

71,

draft

outline

the

structure

the

initial

strategy

for

developing

comprehensive

IMO

strategy

reduction

greenhouse

gas

emissions

from

ships

was

approved.

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

ambition”

reduce

greenhouse gas

emissions and

notes that

technological innovation,

alternative fuels

and/or energy

sources

for international shipping will be

integral to achieve the overall ambition.

These regulations could cause us

to incur additional substantial expenses. At MEPC

77, the Member States agreed to initiate

the revision of

the Initial

IMO Strategy

on Reduction

of GHG

emissions from

ships, recognizing

the need

to strengthen

the

“levels

ambition.” In

July

2023, MEPC

80 adopted

the

2023 IMO

Strategy

Reduction of

GHG

Emissions from Ships (the

“2023 IMO Strategy”), which

builds upon the initial

strategy’s levels of ambition.

The

revised

levels

ambition

include

(1)

further

decreasing

the

carbon

intensity

from

ships

through

improvement

energy efficiency;

(2)

reducing

carbon

intensity

international shipping;

(3)

increasing

adoption of

zero or

near-zero emissions

technologies, fuels,

and energy

sources; and

(4) achieving

net

zero GHG

emissions from

international shipping.

Furthermore, the

following indicative

checkpoints were

adopted in order to reach net zero GHG emissions from international shipping: (1) reduce

the total annual

GHG emissions from international shipping by at least 20%, striving for

30%, by 2030, compared to 2008

levels; and (2) reduce the

total annual GHG emissions

from international shipping

by at least 70%, striving

for 80%, by

2040, compared

to 2008 levels.

As part of

the 2023 IMO

Strategy, MPEC also created

the IMO

Net-zero Framework, which

will combine mandatory

emissions limits and

GHG pricing across

the industry.

The IMO

Net-zero Framework

was approved

at MEPC

83 (Spring

2025) for

potential adoption

in Spring

2026 and will

eventually be included

in Annex VI.

Under these draft

regulations, ships will

be required to

reduce their annual greenhouse gas fuel intensity (“GFI”) calculated using the well-to-wake approach and

ships emitting

above GFI

thresholds will

have to

acquire remedial

units to

balance its

deficit emissions,

while those using zero or near-zero GHG technologies will

be eligible for financial rewards.

The EU made

a unilateral

commitment to

reduce overall

greenhouse gas

emissions from

its member

states

from 20% of 1990 levels

by 2020. The EU also committed

to reduce its emissions

by 20% under the

Kyoto

Protocol’s

second

period

from

2013

2020.

Starting

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

committed

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.

other countries

where we

operate, or

any treaty

adopted at

the international

level to

succeed the

Kyoto

Protocol

Paris

Agreement,

that

restricts

emissions

greenhouse

gases

could

require

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

September

11,

2001

the

United

States,

there

have

been

variety

initiatives intended

to enhance

vessel security

such as

the U.S.

Maritime Transportation

Security Act

2002 (“MTSA”).

implement certain

portions of

the MTSA,

the

USCG issued

regulations requiring

the

implementation

certain

security

requirements

aboard

vessels

operating

waters

subject

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.

trade

internationally,

a vessel must

attain an

International Ship Security

Certificate (“ISSC”) from

a recognized

security organization approved

by the vessel’s flag

state. Ships operating

without a valid

certificate may be

detained, expelled from, or refused entry at port until they obtain an ISSC.

The USCG regulations, intended to align with

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

vessels

from

MTSA

vessel

security

measures,

provided

such

vessels

have

board

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

revenue

and

other

costs

may

incurred

result

detention

vessel

additional

security

measures, and

the risk

of uninsured

losses could

significantly affect

our business.

Costs are

incurred in

taking

additional

security

measures

accordance

with

Best

Management

Practices

Deter

Piracy,

notably those contained in the BMP5 industry standard.

Inspection by Flag administration and Classification Societies

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

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

to ensure

safety at sea

and should verify that

ships under its authority,

conform to relevant international

standards,

in regard to construction,

design, equipment and manning

of ships, through on

board physical inspections.

The hull and machinery of every commercial vessel

must be classed by a classification society

authorized

its

country

registry.

The

classification

society

certifies

that

vessel

safe

and

seaworthy

accordance with the

applicable rules and

regulations of the

country of registry of

the vessel and

SOLAS.

Most

insurance

underwriters

make

condition

for

insurance

coverage

and

lending

that

vessel

certified

“in

class”

classification

society

which

member

the

International

Association

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

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

surveyed

periodically

over

five-year

period.

Every

vessel

should

have

minimum

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

carry cargo

between ports

and

will be

unemployable and

uninsurable which

could

cause

us to

violation of certain covenants in our loan agreements.

Any such inability to carry cargo or be employed,

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

damage

and

business

interruption

due

political

circumstances

foreign

countries, piracy incidents, hostilities and

labor strikes. In

addition, there is

always an inherent

possibility

marine

disaster,

including

oil

spills

and

other

environmental

mishaps,

and

the

liabilities

arising

from

owning

and

operating

vessels

international

trade.

OPA,

which

imposes

virtually

unlimited

liability

upon shipowners,

operators

and bareboat

charterers

of any

vessel

trading

the

exclusive

economic

zone of the

United States

for certain

oil pollution

accidents in

the United

States, has

made liability

insurance

expensive

for shipowners

and

operators

trading

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

our

operations,

we may

not

able to

achieve

or maintain

this

level of

coverage

throughout

vessel's

useful life.

Furthermore, while

believe

that

our

present

insurance

coverage is

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

claim will be paid,

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

at reasonable rates.

Hull & Machinery and War Risks Insurance

We maintain marine hull and

machinery and war risks insurance, which cover,

among other marine risks,

the risk

of actual

or constructive

total loss,

for all

of our

vessels. Our

vessels are

each covered

up to

least

fair

market

value

with

deductibles

ranging

maximum

$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

damage

cargo,

claims

arising

from

collisions

with

other

vessels,

damage

other

third-party

property,

pollution

arising

from

oil

other

substances,

and

salvage,

towing

and

other

costs,

including

wreck

removal.

Protection

and

indemnity

insurance

form

mutual

indemnity

insurance,

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

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

The 12

P&I Associations

that comprise

the International

Group insure

approximately 90%

of the world’s

commercial

tonnage

and

have

entered

into

pooling

agreement

reinsure

each association’s

liabilities. The

International

Group’s

website

states

that

the

Pool

provides

mechanism

for

sharing

all

claims in

excess of

US$10 million

up to,

currently,

approximately US$8.9

billion. As

a member

of a

P&I

Association,

which

member

the

International

Group,

are

subject

calls

payable

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.

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.

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.

Item 5.

Operating and Financial Review and Prospects

The

following

management's

discussion

and

analysis

should

read

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

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.

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

indicator of

the

size of

our

fleet

over a

period

and

affect

both

the

amount

revenues

and

the

amount

expenses

that

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

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

days

that

its

vessels

are

off-hire

for

reasons

other

than

scheduled

repairs

under

guarantee,

vessel

upgrades,

special

surveys

vessel

positioning

for

such

events.

(6)

Time

charter

equivalent

rates,

TCE

rates,

are

defined

our

time

charter

revenues

less

voyage expenses

during a

period divided

by the

number of

our available

days during

the period,

which

consistent

with

industry

standards.

Voyage

expenses

include

port

charges,

bunker

(fuel)

expenses,

canal

charges

and

commissions.

TCE

rate

non-GAAP

measure,

and

management

believes

useful

investors

because

standard

shipping

industry

performance measure used primarily

to compare daily earnings

generated by vessels on

time

charters

with

daily

earnings

generated

vessels

voyage

charters,

because

charter

hire

rates

for

vessels

voyage

charters

are

generally

not

expressed

per

day

amounts

while

charter hire rates for vessels on time charters are generally expressed

in such amounts.

(7)

Daily

vessel

operating

expenses,

which

include

crew

wages

and

costs,

the

cost

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

spares and consumable

stores, tonnage

taxes and

other operating

expenses, are

calculated by

dividing vessel

operating

expenses by ownership days for the relevant period.

The following table reflects such factors for the periods indicated:

As of and for the

Year Ended December 31,

2025

2024

2023

Fleet Data:

Average number of vessels (1)

36.7

38.9

41.1

Number of vessels at year-end

36.0

38.0

40.0

Weighted average age of vessels at year-end (in

years)

12.1

11.3

10.5

Ownership days (2)

13,406

14,219

14,986

Available days (3)

13,014

14,057

14,867

Operating days (4)

12,969

14,009

14,824

Fleet utilization (5)

99.7%

Average Daily Results:

Time charter equivalent (TCE) rate (6)

15,454

15,267

16,713

Daily vessel operating expenses (7)

5,986

5,808

5,704

The following table reflects the calculation of our TCE rates for

the periods presented:

Year Ended December 31,

2025

2024

2023

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

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

Time charter revenues

213,541

228,209

262,098

Less: voyage expenses

(12,417)

(13,607)

(13,621)

Time charter equivalent revenues

201,124

214,602

248,477

Available days

13,014

14,057

14,867

Time charter equivalent (TCE) rate

15,454

15,267

16,713

Time Charter Revenues

Our revenues are driven primarily by

the number of vessels in our

fleet, the number of days during which

our vessels operate and

the amount of daily

charter hire rates that

our vessels earn under

charters, which,

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

●

the duration of our charters;

●

our decisions relating to vessel acquisitions and disposals;

●

the amount of time that we spend positioning our vessels;

●

the amount of time that our vessels spend in drydock undergoing

repairs;

●

maintenance and upgrade work;

●

the age, condition and specifications of our vessels;

●

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

Vessels

operating on time

charters for a

certain period of

time provide more

predictable cash flows

over

that

period

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

capture

increased

profit

margins during

periods of

improvements in

charter rates

although their owners

would be

exposed to

the

risk of declining charter rates, which

may have a material adverse impact

on financial performance. As we

employ vessels on

period charters,

future spot charter

rates may be

higher or lower

than the rates

at which

we have employed

our vessels on

period charters.

Our time charter

agreements subject

us to counterparty

risk. In depressed market

conditions, charterers may

seek to renegotiate the

terms of their existing

charter

parties or avoid

their obligations under

those contracts.

Should a counterparty

fail to honor

their obligations

under agreements with us, we could sustain significant losses which could have a material adverse effect

our

business,

financial condition,

results

operations

and

cash

flows.

Revenues derived

from

time

charter agreements in 2025 decreased compared to previous years due to the decrease in the size of our

fleet following vessel sales described elsewhere in this annual

report.

Voyage Expenses

We incur

voyage expenses

that mainly

include commissions

because all

of our

vessels are

employed

under

time charters that require the

charterer to bear voyage expenses

such as bunkers (fuel oil), port

and canal

charges. Although the charterer bears the cost

of bunkers, we also have bunker gain or

loss deriving from

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

bunkers are purchased by the

charterer and sold back

to us on the

redelivery of the vessel.

Bunker gain, or loss,

results

when a vessel

is redelivered by her charterer and delivered to the next charterer

at different bunker prices, or quantities.

We usually

pay commissions

ranging from

4.75% to

5.00% of

the total

daily charter

hire rate

of each

charter

to unaffiliated ship brokers, in-house brokers

associated with the charterers, depending on the number of

brokers

involved with

arranging the

charter.

addition, we

pay

a commission

DWM

and to

DSS for

those vessels

for which

they provide

commercial management

services. The

commissions paid

to DSS

are

eliminated from our consolidated financial statements as intercompany

transactions.

Vessel Operating Expenses

Vessel operating expenses include

crew wages and

related costs,

the cost of

insurance, expenses

relating

to repairs and

maintenance, the cost

of spares and

consumable stores, tonnage

taxes, environmental

plan

costs

and health,

safety,

quality (HSQ)

and vetting.

Our vessel

operating expenses

generally represent

fixed costs.

Vessel Depreciation

The cost of our

vessels is depreciated

on a straight-line

basis over the estimated

useful life of each

vessel.

Depreciation is based

on the

cost of the

vessel less

its estimated salvage

value. We

estimate the useful

life of

our dry

bulk vessels

to be

25 years from

the date

of initial

delivery from

the shipyard,

which we

believe

is common in the

dry bulk shipping industry.

Furthermore, we estimate the salvage

values of our vessels

based on historical average prices

of the cost of

the light-weight ton of

vessels being scrapped. Effective

July 1, 2023, the Company

changed its estimated

scrap rate of its

vessels from $250 per

lightweight ton to

$400 per lightweight

ton, calculated

based on the

average demolition

prices in

different markets, during

the

last 15 years.

General and Administrative Expenses

We incur general

and administrative

expenses which

include our

onshore related

expenses such

as payroll

expenses

employees,

executive

officers,

directors

and

consultants,

compensation

cost

restricted

stock

awarded

senior

management

and

non-executive

directors,

traveling,

promotional

and

other

expenses of

the public

company,

such as

legal and

professional expenses and

other general expenses.

General and administrative expenses are

not affected significantly by

the size of the

fleet.

However, they

are affected by the exchange rate of Euro to US Dollars,

as about half of our administrative expenses are

in Euro.

Interest and Finance Costs

We incur

interest expense and

financing costs

in connection with

vessel-specific debt,

senior unsecured

bond and finance liabilities. As of December 31, 2025 our aggregate debt amounted

to $529.2 million and

our finance

liabilities amounted

to $114.1

million. During

2023, we

replaced LIBOR,

being the

reference

rate to

calculate interest

expense in

our loan

facilities having

a floating

rate, with

term SOFR.

Interest rates,

which had

been increasing

since the

beginning of

2022, started

to decrease

in the

third quarter

of 2024

and continued to decline until the end of 2025.

We manage our exposure to interest

rates by maintaining a mix

of floating and fixed

interest rate financing

agreements. Floating

rate agreements

include secured

loan facilities

and fixed

rate agreements

include

leases and our senior unsecured

bond. Also, in 2023, we

entered into an interest

rate swap for 30% of

our

$100 million

loan facility

with DNB,

dated June

26, 2023,

under which

we pay

fixed interest

and receive

floating.

Lack of Historical Operating Data for Vessels before Their Acquisition

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

some vessels with time charters. It is rare

in the shipping industry for the last charterer

of the vessel in the

hands of the seller to continue as the first charterer of

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

when a

vessel is

under time

charter and

the buyer

wishes to

assume that

charter,

the vessel

cannot be

acquired without the charterer’s

consent and the buyer entering into

a separate direct agreement (called

“novation agreement”) with the

charterer to assume the

charter. The

purchase of a

vessel itself does not

transfer

the

charter

because

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

liabilities at

fair

value.

Fair value

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

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

the

charter

and

the

net

present

value

future

contractual cash

flows.

When the

present value of

the time

charter assumed is

greater than the

current

fair market

value of

such charter, the

difference is

recorded as

prepaid charter

revenue.

When the

opposite

situation occurs,

any difference,

capped to

the vessel’s

fair value

on a

charter-free basis, is

recorded as

deferred revenue.

Such assets and

liabilities, respectively, are amortized

as a reduction of,

or an increase

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

When we

purchase a

vessel and

assume or

renegotiate a

related time

charter,

among others,

we must

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

operations:

●

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

●

obtain the charterer’s consent to a new technical

manager;

●

in some cases, obtain the charterer’s consent to

a new flag for the vessel;

●

arrange for a

new crew for the

vessel, and where the

vessel is on charter,

in some cases, the

crew must be approved by the charterer;

●

replace all hired equipment on board, such as gas cylinders

and communication equipment;

●

negotiate

and

enter

into

new

insurance

contracts

for

the

vessel

through

our

own

insurance

brokers;

●

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

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

vessel;

●

vessel hiring management;

●

vessel surveying; and

●

vessel performance monitoring.

The management of

financial, general and

administrative elements

involved in the

conduct of our

business

and ownership of our vessels mainly requires the following

components:

●

management of our

financial resources, including

banking relationships, i.e.,

administration of

bank loans and bank accounts;

●

management of our accounting system and records and financial

reporting;

●

administration of the legal and regulatory requirements affecting our business

and assets; and

●

management of the relationships with our service providers and customers.

The principal factors

that affect our profitability, cash

flows and shareholders’

return on investment

include:

●

rates and periods of charter hire;

●

levels of vessel operating expenses;

●

depreciation expenses;

●

financing costs;

●

global conflicts;

●

inflation, and

●

fluctuations in foreign exchange rates.

Results of Operations

Year ended December 31, 2025 compared to the year ended December 31, 2024

Time charter

revenues.

Time charter

revenues decreased

by $14.7

million, or

6%, to

$213.5 million

in 2025,

compared to $228.2 million in 2024. The decrease was primarily due to a decrease in the size

of the fleet

resulting from

the sale

of two

vessels during

2025, which

decreased operating

days during

2025, compared

to last year.

Operating days declined to

12,969 in 2025 from

14,009 in 2024.

This reduction was partially

offset by

higher average time charter

rates, as reflected in

our TCE rate

of $15,454 in 2025

compared to

$15,267 in 2024.

Voyage

expenses.

Voyage

expenses

decreased

$1.2

million,

9%,

$12.4

million

2025

compared

$13.6 million

2024.

This

decrease was

mainly

attributable to

lower commissions,

which

amounted

$10.8

million

2025,

compared

$11.6

million

2024.

further

decrease

was

due

voyage and port expenses, which declined to $0.9 million in 2025

from $1.2 million in 2024.

Vessel operating expenses.

Vessel operating expenses decreased by $2.4 million, or 3%, to $80.2 million

in 2025 compared to $82.6 million

in 2024. The decrease was mainly

attributable to fewer ownership

days

2025

following

the

sale

two

vessels

discussed

above.

This

decrease was

partially

offset

increase in

daily vessel

operating expenses,

which rose

to $5,986

in 2025,

from $5,808

in 2024,

mainly

due to higher crew-related costs.

Depreciation

and

amortization

deferred

charges.

Depreciation

and

amortization

deferred

charges

increased by $1.8

million, or 4%, to $46.5

million in 2025, compared

to $44.7 million

in 2024. The increase

was primarily due

to higher amortization

of deferred

drydock costs, as

fourteen vessels underwent

drydock

surveys in 2025 compared to six vessels

in 2024.

This increase was partially offset

by lower depreciation

expenses resulting from reduced ownership days following the sale of

two vessels during 2025.

General and

administrative expenses

. General and admini

strati

ve expenses

increased by

$0.7 million,

2%, to $34.1 million in 2025 compared to $33.4 million in 2024. The increase was primarily driven by higher

payroll

and legal

expenses, partially

offset by lower

tax expenses.

Additionally, as

almost half

of our general

and

administrative

expenses

are

denominated

Euro,

general

and

administrative

expenses

were

also

affected by movements in the euro/U.S. dollar exchange rate during 2025.

Management fees to a related party.

Management fees to a related party decreased by $0.1 million, or 8%,

to $1.2 million in 2025, compared

to $1.3 million in 2024.

The decrease was attributable to a

reduction in the

number of vessels managed by DWM in 2025,

following the sale of one managed vessel during the year.

Gain on sale of

vessels.

Gain on sale of

vessels decreased by $2.1

million, or 36%, to

$3.7 million in 2025

due to the sale of vessels

Alcmene and Selina,

compared to $5.8 million in 2024 which related to the sale of

vessels

Artemis and

Houston

Interest expense and finance costs.

Interest expense and finance costs decreased by $4.5 million or 9% to

$43.0 million

in 2025

compared to

$47.5 million

in 2024.

The decrease

was mainly

due to

lower average

interest rates in 2025 compared to 2024.

Interest and

other income

. Interest and other income decreased by $0.9 million, or 11%, to $7.5 million in

2025

compared

$8.4

million

2024.

The

decrease

was

mainly

attributable

lower

amount

time

deposits placed

during 2025

and further

impacted by

lower deposit

rates achieved

in 2025

compared to

2024.

Loss on extinguishment of debt. In 2024, the loss on extinguishment of debt consisted of the prepayment of

the 8.375%

Senior Unsecured

bond at

a price

equal to

103.35% of

nominal value,

with the

proceeds from

the new bond.

Gain/(loss)

on derivatives. In

2025, loss on

derivates amounted to

$0.2 million,

as compared to

a gain of

$0.3

million

2024.

Gain/(loss)

derivative

instruments

reflects

the

decrease

interest

rates

affecting

the

change in

fair value

of the

interest rate

swap dated

July 6,

2023, which

we entered

into with

DNB for

a notional

amount of $30

million, under which we

pay a fixed

rate of 4.268% and

receive floating interest based

on term

SOFR.

Gain/(loss) on

related party

Investments. Loss

on related

party investments

amounted to

$1.1 million

in 2025.

The loss primarily reflected

the dilution of the

Company’s common stock holdings

in OceanPal arising from

multiple common

stock issuances

and the

impact of

a reverse

stock split,

which resulted

in a

$4.1 million

loss. This was partially

offset by a $3.0

million gain on the

sale of the Company’s

500,000 Series B Preferred

Shares of OceanPal,

representing the excess of

the sale proceeds over

the carrying amount. This

compares

to a loss of $3.9 million

in 2024, which resulted from the

measurement of OceanPal’s common shares

at fair

value on December 31, 2024, based on the closing price of the shares on

that date.

Gain/(loss) on equity securities.

Gain on

equity securities

amounted

to $14.7

million

in 2025,

compared

to a

loss of $0.4 million in

2024. In 2024, we sold equity

securities acquired in 2023, resulting in

a realized loss of

$0.4

million.

2025,

acquired

equity

securities

Genco

Shipping

Trading

Limited

(Genco)

representing 14.8% of Genco’s common stock

as of year-end. The valuation of

these equity securities at fair

value at year-end resulted in an unrealized gain of $14.7 million.

Gain

on warrants.

Gain on

warrants amounted

to $0.5

million

in 2025,

compared to

$0.7 million

in 2024,

which resulted

from the

fair value

adjustment of

the outstanding

warrants as

of December

31, 2025

and 2024,

respectively.

Loss from

equity method

investments.

Loss from

equity method

investments, amounted

to $2.8

million in

2025,

compared to $0.1

million in 2024. In

2025, the loss was

attributable to a $1.4

million loss from our

80%

interest in Ecogas, a

$0.1 million loss from

our 34% interest in

Windward, an additional $0.8

million loss from

our

25%

interest

Bergen

and

$0.5 million

loss

from

our

50%

interest

DWM.

2024,

the

loss

was

attributable to a $0.5 million loss from

our 45.87% interest in Windward, which was

partially offset by a $0.3

million gain from our 25% interest in Bergen and a $0.1 million gain from our

50% interest in DWM.

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

For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023,

please refer to “Item 5. Operating and Financial

Review and Prospects” in our Annual Report

on Form 20-

for the year ended December 31, 2024 filed with the SEC on March 21,

2025.

Liquidity and Capital Resources

Historically, we finance our short-term and long-term

capital requirements with cash

from operations, cash

banks,

equity

contributions

from

shareholders,

long-term

bank

debt,

finance

liabilities

and

senior

unsecured

bonds.

Our

main

uses

funds

have

been

capital

expenditures

for

the

acquisition

and

construction of

new vessels,

expenditures incurred

in connection

with

ensuring that

our vessels

comply

with international and

regulatory standards, repayments

of bank

loans, repurchase of

our common stock

and payment of dividends.

Our short-term

liquidity requirements include

funding the

installments for

the construction

of two

vessels

with

expected

deliveries

2027

and

2028,

funding

the

construction

office

building,

payments

committed capital under the terms of our joint ventures in Windward and Ecogas,

expenditures relating to

scheduled

drydock

and

special

surveys

our

vessels

comply

with

international

and

regulatory

standards,

payments

interest

and

principal

installments

under

our

bank

loans,

our

bond,

and

lease

agreements and payment of dividends,

common and preferred.

Our primary sources of short-term

liquidity

include cash generated from

operating activities, available cash

balances,

proceeds from the

exercise of

warrants and vessel sales.

Our

long-term

liquidity

requirements

include

funding

our

newbuilding

vessel

installments,

interest

and

principal

payments

outstanding

debt,

bond,

and

lease

agreements,

loan

maturities,

payment

dividends,

common

and

preferred,

declared

the

board

directors,

expenditures

for

drydock

and

special surveys

as they become

due. Sources of

funding for

our long-term

liquidity requirements include

cash

flows

from

operations,

available

cash

balances,

bank

borrowings,

issuance

debt

and

equity

securities, and vessel sales.

As of

December 31,

2025 and

2024, working

capital, defined

as current

assets minus

current liabilities,

including the

current portion

of long-term

debt and

finance liabilities,

amounted to

$155.3 million

and $126.4

million, respectively.

The increase in

working capital was

primarily driven by

a $118.2

million increase

investments in equity

securities related to the

acquisition of 14.8% ownership

interest in Genco. Working

capital also increased by

$4.2 million due to

the reclassification of our

equity method investment

in Bergen

current,

resulting from

Bergen’s

sale

DSI Drammen

The

increase

was

partially offset

by a

$83.9

million decrease

in cash

and cash

equivalents and

time deposits,

mainly due

to the

maturity of

time deposits

and the

redeployment of

available liquidity

into equity

securities. Working

capital was

further affected

an increase

in current

liabilities, primarily

due to

a higher

current portion

of long-term

debt following

the

issuance of

a new

loan during

2025. We

believe that

our working

capital is

sufficient to

cover our

short-

term requirements.

Cash and

cash equivalents, including

restricted cash,

are primarily held

in U.S.

dollars and

amounted to

$122.3 million

as of

December 31,

2025 and

$143.7 million

as of

December 31,

2024. Restricted

cash,

non-current, which

represents minimum

liquidity requirements

under our

loan facilities,

as of December

31,

2025 and 2024, amounted to

$18 million and $19 million,

respectively.

Restricted cash, current consists

loan proceeds drawn during

the year maintained in

a pledged account in

order to reduce

the loan’s margin

and as

of December

31, 2025

amounted to

$53.8 million.

Time deposits with

maturities above

three months

amounted to $0 million and $63.5

million as of December 31, 2025 and

2024,

respectively. Our

cash and

cash equivalents, restricted cash and time

deposits represent our unused sources of liquidity to

meet our

short- and long-term obligations.

During 2025 and 2024, our sources and uses of cash were as

follows:

Net Cash Provided by Operating Activities

Net cash provided by operating

activities decreased by $36.0 million,

or 43%.

In 2025, net cash

provided

operating

activities

was

$47.5 million

compared

net

cash

provided

operating

activities

$83.5 million in

2024. The

decrease was

mainly attributable

to the

proceeds from

the sale

of our

investment

in equity

securities recognized in

2024, increased dry-docking

and special survey

costs incurred in

2025

and

lower

operating

cash

inflows,

primarily

reflecting

reduced

operating

days

following

the

sale

two

vessels during the year.

Net Cash Used in Investing Activities

Net

cash

used

investing activities

was

$32.0 million

for

2025,

which

consists

$1.5

million

paid

for

vessels under

construction and

improvements; $23.0 million

of proceeds

from the

sale of

two vessels

2025; $118.3 million paid to acquire investments,

net of a $3.5 million

return of capital from our

investment

in Windward;

$3.0 million proceeds

from the sale

of the Series

B Preferred shares

of OceanPal; a

$63.5

million

decrease

time

deposits

with

maturity

above

three

months;

and

$1.7

million

relating

the

acquisition of property and equipment.

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

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

the

acquisition

property

and

equipment.

Net Cash Used in Financing Activities

Net cash used in

financing activities was $36.9 million

for 2025, which

mainly consists of $55.0

million of

proceeds

from

the

issuance

long

term

debt;

$58.2

million

repayments

bank

debt

and

finance

liabilities;

$23.0 million of

payments for the

repurchase of common

stock; $5.8 million

and $4.6 million

cash dividends

paid on

our preferred

and common

stock, respectively;

and $0.4

million of

finance costs

paid in connection with the new loan agreement.

Net cash used in financing activities was $21.7

million for 2024, which consists of $117.2 million proceeds

from issuance

of long term

debt; $123.0 million

of bank

debt and

finance liabilities that

we repaid; $24.2

million proceeds from issuance of common stock; $5.8 million and $29.0 million

of cash dividends paid on

our preferred and

common stock,

respectively; and

$5.3 million

of finance

costs paid in

relation to new

loan

agreements.

For a detailed

discussion of

cash flows

for the

year ended

December 31,

2024 compared

to the year

ended

December 31, 2023 please see “Item 5. Operating and Financial Review and Prospects - B. Liquidity and

Capital Resources”

included in

our

2024 Annual

Report filed

on Form

20-F with

the SEC

March 21,

2025.

Commitments for Capital Expenditures

As of the

date of this annual report,

we have outstanding commitments amounting to:

(i) $73.6 million for

the construction of two 81,200 dwt methanol dual-fuel newbuilding Kamsarmax dry bulk vessels

expected

to be

delivered in

the third

quarter of

2027 and

the first

quarter of

2028; (ii)

€9.4 million

under our

joint

venture agreement with Windward;

(iii) $8.2 million remaining commitment to

Ecogas for the construction

two

7,500

cbm

LPG

vessels

with

expected

deliveries

2027

and

(iv)

$50.4

million

purchase

obligations under our lease agreements.

We also incur

capital expenditures

when our

vessels undergo

statutory (drydock

and special)

surveys. This

process may

require us to

reposition vessels from

discharging ports to

shipyard facilities, which

reduces

operating

days

during

the

period.

Additional

capital

expenditure

may

also

required

for

vessel

improvements needed to comply with new or upcoming regulations.

Over the next

twelve months, we

will require capital

to fund ongoing

operations, debt service,

common and

preferred dividend payments, bareboat charter hire payments,

and investments.

As of the date of this annual report,

we have contracted revenues covering around 81% of our ownership

days in 2026, in time

charter agreements having an average time

charter rate above our break-even rate

as of

December 31, 2025,

and we have

fixed around 9%

of our ownerships

days in 2027.

Our revenues

for the unfixed days in 2026

and 2027 will be affected by the developments in the dry bulk market and we

cannot assure

you that we

will be

able to successfully

renew existing

charters at rates

sufficient to

allow

meet

all

our

obligations.

the

date

this

annual

report,

believe

that

contracted

and

anticipated

revenues will

result

internally generated

cash flows

and together

with available

cash

and

cash equivalents

will be

sufficient to

fund our

short-term and long-term

capital requirements.

In addition,

expect

finance

part

our

long

term

capital

requirements,

such

the

construction

cost

our

methanol vessels, with new bank debt and if needed vessel sales.

Debt instruments and guarantees

As of December

31, 2025,

we had $529.2

million of

long-term debt

under the

agreements described

below.

Secured Term Loans

On January 4,

2017, we

drew down $57.24

million, under a

secured loan

agreement with

the Export-Import

Bank

China,

dated

January

2016,

finance

part

the

construction

cost

San

Francisco

and

Newport News

. The loan is payable in equal quarterly instalments of about

$1.0 million each until January

4, 2032.

On July

25, 2024,

we drew

down $167.3

million under

a new

loan agreement

with Nordea

Bank AB,

Nordea,

which

was

used

refinance

other

outstanding

agreements

with

the

same

bank.

The

loan

repayable in equal

quarterly instalments of $4.5

million and a

balloon instalment of $64.8

million payable

on July 25, 2030.

April

12,

2023,

entered

into

$100

million

term

loan

facility

with

Danish

Ship

Finance

A/S

refinance outstanding loan balances

with another bank and for

working capital. On October 18,

2024, we

refinanced

the

outstanding

balance

the

loan

with

new

loan

which

repayable

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

outstanding

loan

balance with

another

bank

and

for

working

capital. The

loan

repayable

equal

quarterly

instalments

$3.8

million

until

December

27,

2029.

The

loan

subject

margin

reset,

according to

which the

borrowers and

the lenders

will enter

into discussions

to agree

on a

new margin.

Unless the

parties agree

on a

new margin,

the loan

will be

mandatorily repayable on

June 27,

2027. As

part of the loan agreement, on July 6, 2023, we entered into an interest rate swap with DNB for a notional

amount of

$30 million

and quarterly

amortization of

$1.2 million.

Under the

interest rate

swap, we

pay a

fixed rate of

4.268% and

receive floating

under term

SOFR. The

swap has

a termination

date on

December

27, 2029, and a mandatory break on June 27, 2027, the margin reset date of the loan, according to which

the swap will be terminated if the

loan is prepaid. As of December 31, 2025, the

interest rate swap was a

liability having a fair value of $0.4 million.

On September 29,

2025, we drew

down $55 million

under a loan

agreement with National

Bank of Greece,

or NBG. The loan proceeds were deposited in a pledged

account with the bank to reduce the margin. The

Company may withdraw any

part or all

of the funds from

the pledged account at

the end of

each interest

period, provided no event of default has

occurred. The loan is repayable in equal quarterly

instalments of

$1.3 million and a balloon instalment of $25.0 million payable on September

29, 2031.

Under

the

secured

term

loans

outstanding

December

31,

2025,

vessels

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

certain

period,

pledge

over

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

changes

management

and

ownership

the

vessels,

additional

indebtedness, as

well as

minimum requirements

regarding hull

cover ratio

and minimum

liquidity per

vessel

owned

the

borrowers,

the

Guarantor,

maintained

the

bank

accounts

the

borrowers,

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, 2024 and

2025, and the date of this

annual report, we were in compliance with

all of

our loan covenants.

Senior Unsecured Bond:

On July

2, 2024,

we issued

a bond

of $150

million nominal

value at

par and

on November

8, 2024,

issued an additional

amount of

$25 million

nominal value

at 102.00% of

par.

The bond proceeds

were used

to refinance the outstanding balance of our $125 million senior

unsecured bond maturing in June 2026 at

a price equal to 103.35% of nominal value. The

bond has a US Dollar fixed-rate coupon

of 8.75% payable

semi-annually in arrears in January and

July of each year.

The bond is callable in whole

or in part in July

2027 at

a price

equal to

103.50% of

nominal value;

in January

2028 at

a price

equal to

102.625% of

nominal

value; in

July 2028

at a

price equal

101.75% and

after January

2029 at

a price

equal to

100.00% of

nominal value.

The bond

ranks

ahead

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

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

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

each

vessel's

bareboat

charter

period,

each

year

thereafter,

until

the

termination

the

lease,

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.

December

2022,

entered

into

sale

and

leaseback

agreement

for

$29.9

million

with

unaffiliated third party, for

a period of

ten years,

under which

we pay

hire, monthly

in advance,

and we

have

the

option

repurchase

the

vessel

after

the

end

the

third

year

the

charter

period,

each

year

thereafter, until the

termination of the lease, at specific

prices, subject to irrevocable and written

notice to

the owner.

If not repurchased earlier,

we have the obligation to repurchase the

vessel for $8.1 million, on

the expiration of the lease on the tenth year.

Guarantees

On March 30,

2023, we entered

into a corporate

guarantee with Nordea

under which we

guaranteed the

performance by Bergen Ultra of its

obligations under a loan agreement with the

bank,

maturing on March

30, 2028.

As of

December 31,

2025, the

loan had

an outstanding

balance of

$12.3 million

and was

fully

repaid

January

2026

after

the

sale

Bergen

Ultra’s

vessel.

Following

repayment

the

loan,

the

corporate guarantee provided to Nordea was released.

Research and development, patents and licenses

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.

Trend information

Demand for dry

bulk vessel services is

influenced by global financial conditions.

Global financial markets

and economic

conditions have

been, and

continue

to be,

volatile. Our

results of

operations depend

primarily

on charter

hire rates available

to fix

our vessels and

the demand for

dry bulk vessel

services. The Baltic

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

bulk vessel

charter market

and the

performance of the

entire dry

bulk shipping market.

In 2025,

the BDI

ranged from a low

of 715 to a

high of 2,845 and

closed at 1,972 on

March 12, 2026. Although

there can be

no assurance

that the

dry bulk

charter market

will not

decline from

current levels,

as of

the date

of this

annual report,

we have

fixed about

81% of

our fleet

ownership days

in 2026

in time

charter agreements

having an average time

charter rate above our break-even

rate. Nevertheless, our revenues

and results of

operations in 2026 will be subject to demand for our services,

the level of inflation, market disruptions and

interest rates.

Demand for

our dry

bulk oceangoing

vessels is

dependent upon

economic

growth in

the

world’s economies, seasonal

and regional changes in

demand and changes to

the capacity of the

global

dry

bulk

fleet

and

the

sources

and

supply

for

dry

bulk

cargo

transported

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.

Critical Accounting Estimates

The

discussion

and

analysis

our

financial

condition

and

results

operations

are

based

upon

our

consolidated

financial

statements,

which

have

been

prepared

accordance

with

U.S.

GAAP.

The

preparation

those

financial

statements

requires

make

estimates

and

judgments

that

affect

the

reported

amounts of

assets

and liabilities,

revenues and

expenses and

related disclosure

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

changes in

circumstances (such

market conditions,

obsolescence or

damage to

the asset,

potential sales

and other

business plans)

indicate

that the

carrying amount

of an

asset may

not be

recoverable. For

impairment testing

purposes, each

vessel

together with its

associated deferred costs

is considered

a single asset

group. When impairment

indicators

are

identified,

the

Company

compares

the

carrying

amount

the

asset

group

with

the

estimated

undiscounted projected net

operating cash flows

expected to result

from the use

of the asset

group over

its remaining useful life

and its eventual

disposition. If the

carrying amount exceeds

the undiscounted cash

flows,

the

asset

group

considered

not

recoverable

and

written

down

its

fair

value,

determined

primarily through third-party valuations.

For vessels, the

Company estimates undiscounted net

operating cash flows by

considering the historical

and projected vessel performance and utilization. A significant

assumption in this analysis is the estimate

of future time charter rates for

the unfixed days, using the most

recent 10-year average of historical

1 year

time charter rates, net

of commissions, available

for each vessel class.

These estimated time

charter rates

reflect the Company’s

chartering strategy,

vessel operating history

per vessel class

and at least

one full

shipping

cycle,

where

applicable.

When

full

10-year

history

not

available,

the

average

year

time

charter rate of the available period is used. The

historical ten-year average rate used in 2025 to calculate

undiscounted

projected

net

operating

cash

flow

was

$13,596

for

our

Panamax,

Kamsarmax

and

Post-

Panamax

vessels,

$16,309 for

our

Ultramax vessels

and

$17,517 for

our

Capesize and

Newcastlemax

vessels, compared to $13,053, 16,626 and $16,315,

respectively in 2024. Additional assumptions include

contracted

charter

rates

for

fixed

days

based

existing

time

charter

contracts,

anticipated

vessel

operating expenses,

scheduled vessel maintenance

costs, fleet

utilization levels,

and estimated

residual

values based

on scrap

rates. Assumptions

are in

line with

the Company’s

historical performance

and its

expectations

for

future

fleet

utilization

under

its

current

fleet

deployment

strategy.

The

undiscounted

projected

net

operating

cash

flows

are

compared

with

the

carrying

amount

the

vessel,

including

its

unamortized

deferred costs.

the

carrying amount

exceeds the

undiscounted cash

flows, the

vessel is

written

down

its

fair

value,

and

the

difference

recognized

impairment

loss.

Although

impairment loss was identified or

recorded in 2025, according to

our assessment, the carrying value plus

unamortized deferred

cost of

vessels for

which impairment

indicators existed

as of

December 31,

2025,

was $281.3 million.

Historically,

the

market

values

vessels

have

experienced

volatility,

which

from

time

may

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

impaired

accordance with the

related US GAAP

guidance for impairment

recognition, if the

undiscounted cash

flows

were lower

compared to

their carrying

value. Based

on: (i)

the carrying

value plus

unamortized deferred

cost of

each of

our vessels as

of December 31,

2025 and

2024 and (ii)

what we

believe the charter-free

market value of each

of our vessels was

as of December 31,

2025 and 2024, the

aggregate carrying value

of 10 and

12 of the

vessels in our

fleet as of

December 31, 2025

and 2024, respectively,

exceeded their

aggregate charter-free market value

by approximately $37 million

and $22 million,

respectively,

as noted

in the table below. This represents the approximate amount

by which we believe we

would have to reduce

our net income if we sold all

of such vessels at December 31, 2025 and

2024, on industry standard terms,

in cash

transactions, and to

a willing buyer

where we were

not under

any compulsion to

sell, and

where

the buyer was

not under any

compulsion to buy.

For purposes of

this calculation, we

have assumed that

these

10 and

12 vessels

would be

sold at

a price

that reflects

our estimate

of their

charter-free market

values as of December 31, 2025 and 2024, respectively.

Vessel

Dwt

Year Built

Carrying Value plus unamortized

deferred cost

(in millions of US dollars)

2025

2024

Alcmene

93,193

2010

10.1

Amphitrite

98,697

2012

12.5

13.2

Astarte

81,513

2013

15.9

17.0

Atalandi

77,529

2014

15.1

16.0

Crystalia

77,525

2014

14.8

15.7

Electra

87,150

2013

12.8

13.4

G.P.

Zafirakis

179,492

2014

22.6

23.8

Ismene

77,901

2013

10.6

11.1

Leto

81,297

2010

12.4

12.1

Los Angeles

206,104

2012

21.4

22.4

Maera

75,403

2013

10.3

11.0

Maia

82,193

2009

11.4

12.4

Medusa

82,194

2010

12.0

11.8

Myrsini

82,117

2010

13.3

13.4

Myrto

82,131

2013

15.7

16.8

New Orleans

180,960

2015

31.3

30.4

New York

177,773

2010

15.3

13.7

Newport News

208,021

2017

37.0

38.8

P.S.

Palios

179,134

2013

31.4

33.3

Phaidra

87,146

2013

12.1

12.9

Philadelphia

206,040

2012

22.0

23.1

Polymnia

98,704

2012

12.8

13.5

San Francisco

208,006

2017

37.1

38.9

Santa Barbara

179,426

2015

33.7

35.7

Seattle

179,362

2011

21.0

20.2

Selina

75,700

2010

8.6

Semirio

174,261

2007

15.7

14.7

LEONIDAS P.C.

82,165

2011

18.9

19.5

Florida

182,063

2022

53.0

55.0

DSI Pyxis

60,362

2018

32.1

33.8

DSI Pollux

60,446

2015

27.9

28.4

DSI Phoenix

60,456

2017

29.5

31.1

DSI Polaris

60,404

2018

32.7

34.4

DSI Andromeda

60,309

2016

29.3

30.2

DSI Aquila

60,309

2015

27.8

28.5

DSI Pegasus

60,508

2015

27.0

27.3

DSI Altair

60,309

2016

28.2

29.7

DSI Aquarius

60,309

2016

28.0

29.5

Total

4,226,612

805

851

_______________________________

Indicates dry bulk

vessels for which

we believe, as

of December 31,

2025 and 2024,

the charter-free

market value

was lower than the vessel’s

carrying value plus unamortized deferred

cost. We believe that the

aggregate carrying

value

plus

unamortized

deferred

cost

these

vessels

exceeded

their

aggregate

charter-free

market

value

approximately $37 million and $22 million, respectively.

Our

estimates

charter-free

market

value

assume

that

our

vessels

were

all

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

which

are

aware

through

both

formal

and

informal

communications

with

shipowners,

shipbrokers,

industry

analysts

and

various

other

shipping

industry participants and observers.

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

their

market

values

”

and

the

discussion

under

the

heading

"Item

Information

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

sensitivity

analysis

assigning

possible

alternative

values

this

significant

input,

indicated that

time charter

rates would

need to

be reduced

by 15%

to result

in impairment

of individual

long-lived assets

with indication

of impairment.

However, there can

be no

assurance as

to how

long charter

rates and vessel values will remain at their current levels.

If charter rates decrease and remain depressed

for

some

time,

could

adversely

affect

our

revenue

and

profitability

and

future

assessments

vessel

impairment.

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

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

below:

Average estimated daily time

charter equivalent rate used

Average break-even

rate

Ultramax

$16,309

$13,276

Panamax/Kamsarmax/Post-Panamax

$13,596

$9,960

Capesize/Newcastlemax

$17,517

$12,954

It should be

noted that

as of December

31, 2025,

ten of our

vessels, having

indication of

impairment, would

be affected by a reduction

in time charter rates

below the average

break-even rate. Additionally, the use of

the

1-year,

3-year

and

5-year

average

blended

rates

would

not

have

any

effect

the

Company’s

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

Vessel type

1-year

(period)

Impairment

charge

(in USD

million)

3-year

(period)

Impairment

charge

(in USD

million)

5-year

(period)

Impairment

charge

(in USD

million)

Ultramax

$14,089

$15,319

$18,609

Panamax/Kamsarmax/Post-

Panamax

$12,929

$13,759

$16,719

Capesize/Newcastlemax

$22,074

$20,482

$21,105

Item 6.

Directors, Senior Management and Employees

Directors and Senior Management

Set forth

below are

the names,

ages and

positions of

our directors

and executive

officers. Our

Board of

Directors consists

of nine

members and

is elected

annually on

a staggered

basis, and

each director

elected

holds office for a three-year term and until

his or her successor is elected and has qualified, except in the

event of

such director’s death,

resignation, removal or

the earlier

termination of

his or

her term

of office.

Officers

are

appointed

from

time

our

board

directors

and

hold

office

until

successor

appointed or their employment is terminated.

Name

Age

Position

Semiramis Paliou

Class III Director and Chief Executive Officer

Simeon Palios

Class I Director and Chairman

Ioannis Zafirakis

Class III Director and President

Anastasios Margaronis

Class I Director

Kyriacos Riris

Class II Director

Apostolos Kontoyannis

Class III Director

Eleftherios Papatrifon

Class II Director

Simon Frank Peter Morecroft

Class II Director

Jane Sih Ho Chao

Class I Director

Maria Dede

Co-Chief Financial Officer and Treasurer

Margarita Veniou

Chief Corporate Development, Governance &

Communications Officer and Secretary

Maria Christina Tsemani

Chief People & Culture Officer

Evangelos Sfakiotakis

Chief Technical

Investment Officer

The term of our

Class I directors expires

in 2027, the

term of our Class

II directors expires in

2028, and the

term of our Class III directors expires in 2026.

The business address of

each officer and

director is the address

of our principal executive

offices, which

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

Biographical information with respect to each of our directors and executive

officers is set forth below.

Semiramis

Paliou

has

served

Director

Diana

Shipping

Inc.

since

March

2015,

and

the

Company’s

Chief

Executive

Officer,

Chairperson

the

Executive

Committee

and

member

the

Sustainability

Committee

since

March

2021.

Ms.

Paliou

has

been

the

Chief

Executive

Officer

Diana

Shipping

Services

S.A.

since

March

2021.

Ms.

Paliou

the

Chairperson

the

Hellenic

Marine

Environment Protection

Association (HELMEPA), a

position she

has held

since June

2020, while

she joined

its board of directors

in March 2018. As

of July 2023, she serves

as Chairperson of INTERMEPA.

She is

also a member of

the board of directors of

the UK P&I Club

since November 2020, member of

the Union

of Greek

Shipowners since

February 2022

and member

of the

Global Maritime

Forum since

April 2022.

She is Vice-Chairperson of

the Greek committee of

Det Norske Veritas, a member

of the Greek committee

of Nippon

Kaiji Kyokai,

Bureau Veritas,

American Bureau

of Shipping

and Hellenic

War

Risks. She

also

served as

a Director

of OceanPal

Inc. (NASDAQ:

SVRN) from

April 2021

until October

2025 and

as the

Chairperson of the

Board of Directors

and of

the Executive Committee

of OceanPal Inc.

from November

2021 until October 2025.

Ms. Paliou

has over

20 years

of experience

in shipping

operations, technical

management and

crewing.

She began her

career at Lloyd’s

where she worked

as a trainee

ship surveyor from

1996

1998.

She

was

then

employed

Diana

Shipping

Agencies

S.A.

From

2007

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

the

end of

July 2018,

she served

Managing Director

and Head

of the

Technical,

Operations, Crew and

Supply department of Unitized

Ocean Transport

Limited. From November 2018

February

2020,

she

worked

Chief

Operating

Officer

Performance

Shipping

Inc.

(ex.

Diana

Containerships Inc.)

(NASDAQ: PSHG).

From October

2019 until

February 2021,

Ms. Paliou

served as

Deputy

Chief

Executive

Officer

Diana

Shipping

Inc.

She

also

served

member

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

Naval

Architecture

from

University

College,

London.

She

completed

courses

“Finance

for

Senior

Executives”,

“Authentic

Leader

Development”

and

certificate

program

“Sustainable

Business

Strategy” all at

Harvard Business

School. Ms. Paliou

is also the

daughter of Simeon

Palios, the Company’s

Chairman.

Simeon

Palios

has

served

the

Chairman

the

Board

Directors

Diana

Shipping

Inc.

since

February

2005

and

Director

the

Company

since

March

1999.

served

the

Company’s

Chief

Executive Officer

from February 2005

until February 2021.

Until December 2025,

Mr.

Palios also served

as the President of Diana Shipping Services S.A. which was

formed in 1986. Mr. Palios has experience in

the shipping industry

since 1969 and

expertise in technical

and operational issues.

He has served

as an

ensign in the Greek

Navy for the inspection

of passenger boats on

behalf of Ministry of

Merchant Marine

and is

qualified as

a naval

architect and

marine engineer.

Mr.

Palios was

the founder

of Diana

Shipping

Agencies

S.A.,

where

served

Managing

Director

until

November

2004,

having

the

overall

responsibility for its

activities. From January

13, 2010 until

February 28, 2022,

Mr.

Palios also served

the

Chairman

the

Board

Directors

Performance

Shipping

Inc.

(ex.

Diana

Containerships

Inc.)

(NASDAQ: PSHG) and as Chief Executive Officer until October 2020.

Mr.

Palios is

a member

various leading

classification societies

worldwide and

is a

member of

the

board

directors

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

Athens”.

holds

bachelor's

degree

Marine

Engineering

from

Durham

University.

Ioannis Zafirakis

has served as

a Director of

Diana Shipping

Inc. since February

2005. Mr. Zafirakis is

the

President

the

Company

since

January

2026.

also

member

the

Executive

Committee

the

Company.

Mr.

Zafirakis has held various

executive positions such as

the Secretary of the

Company,

Co-

Chief

Financial

Officer,

Treasurer,

Chief

Strategy

Officer,

Company’s

Chief

Financial

Officer,

Chief

Operating

Officer,

Executive

Vice-President

and

Vice-President.

the

Managing

Director

Diana

Shipping Services

S.A. since

January 2026.

Mr.

Zafirakis served

as the

Chief

Strategy Officer

and Co-

Chief

Financial

Officer

Diana

Shipping

Services

S.A.

since

January

2025.

Prior

this,

was

the

company’s Chief Financial

Officer from March

2020 (Interim

Financial Officer

until February

2021) and

held

the positions of Director and Treasurer. Also, he served as a Director of OceanPal Inc. (NASDAQ: SVRN)

from

April

2021

February

2026.

has

also

served

the

President,

Secretary

and

Interim

Chief

Financial

Officer

OceanPal

Inc.

from

November

2021

April

2023.

was

also

member

the

Executive Committee of OceanPal Inc. until February 2026.

From June 1997 to

February 2005, Mr.

Zafirakis was employed by

Diana Shipping Agencies S.A., where

he held

a number

of positions in

finance and

accounting. From January

2010 to

February 2020,

he also

served as Director and

Secretary of Performance

Shipping Inc. (ex. Diana

Containerships Inc.) (NASDAQ:

PSHG),

where

held

various

executive

positions

such

Chief

Operating

Officer

and

Chief

Strategy

Officer.

Mr.

Zafirakis,

currently

also

acts

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

INSEAD

Business

School

Singapore.

Mr.

Zafirakis

has

also

obtained

certificate

“Blockchain

Economics:

Introduction

Cryptocurrencies”

from

Panteion

University of

Social and

Political Sciences

in Greece.

He holds

a bachelor's

degree in

Business Studies

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

University of Wales in Cardiff.

Anastasios C. Margaronis

has served as a Director

of Diana Shipping Inc. since

February 2005. He also

served as President and as a member of the Executive Committee of the Company until December 2025.

Since

January

2026,

Mr.

Margaronis

has

been

member

the

Nominating

Committee

and

the

Sustainability Committee

of the

Company.

Mr.

Margaronis was

the Deputy

President of

Diana Shipping

Services S.A., where he also

served as a Director

and Secretary until January 2026.

Mr. Margaronis has

experience in the shipping industry, including

in ship finance and insurance, since 1980. Prior to February

21, 2005, Mr.

Margaronis was employed by Diana Shipping Agencies S.A.

in 1979 and performed on our

behalf

the

services

performed

President

Diana

Shipping

Inc.

until

December

2025.

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

February

2020,

served

Director

and

President

Performance

Shipping

Inc.

(ex.

Diana

Containerships Inc.) (NASDAQ: PSHG).

addition,

Mr.

Margaronis

member

the

Greek

National

Committee

the

American

Bureau

Shipping. He

has also

been on

the Members’

Committee of

the Britannia

Steam Ship

Insurance Association

Limited

since

October

2022.

From

October

2005

October

2019,

was

member

the

board

directors of the United Kingdom Mutual Steam Ship Assurance Association

(Europe) Limited.

holds

bachelor's

degree

Economics

from

the

University

Warwick

and

master's

science

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

Eleftherios (Lefteris) A. Papatrifon

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

Diana

Shipping

Inc.

since

February

2023.

also

serves

the

Chairperson

the

Company’s

Nominating Committee since May 2025.

Prior to this appointment, he served

as Chief Operating Officer of

the Company

from March

2021 to

February 2023.

Mr.

Papatrifon also

serves as

a Director

of OceanPal

Inc. (NASDAQ: SVRN) and a member of its Executive Committee, positions he has held since November

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

Executive Officer of OceanPal Inc.

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

assets and consequent liquidation in

2017. Previously,

for a period of

approximately six years, he served

the

Chief

Financial

Officer

and

Director

Excel

Maritime

Carriers

Ltd.

Prior

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).

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

Kyriacos Riris

has served as a Director of Diana Shipping Inc. since March 2015. Since May 2022, he is

the

Chairman of

the

Audit Committee

of the

Company.

Mr.

Riris was

also a

member of

the

Company’s

Nominating Committee from May 2015 until his voluntary resignation in

December 2025.

Mr. Riris

served in various positions in PricewaterhouseCoopers (PwC), Greece, including Deputy Senior

Partner, Managing Partner of the Audit and

the Advisory/Consulting Service lines.

From 2009 to 2014, Mr.

Riris served as Chairman

of the Board of

Directors of PricewaterhouseCoopers

(PwC), Greece. Prior to

its

merger with

PwC, Mr. Riris

was employed

by Grant

Thornton, Greece,

where in

1984 he

became a

Partner.

From 1976 to 1982, Mr. Riris was employed by Arthur Young, Greece.

Since

November

2018,

Mr.

Riris

has

served

the

vice

Chairman

the

Board

Titan

Cement

International S.A., a

Belgian corporation, while

also retaining the

position as Chairman

of the Audit and

the

Risk Committee of the Group, since that date.

Mr.

Riris

holds

degree

from

Birmingham

Polytechnic

(presently

Birmingham

City

University)

and

completed his professional qualifications with the Association of

Certified Chartered Accountants (ACCA)

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

and Chartered Accountants in 1985.

Apostolos Kontoyannis

is a Director, the Chairperson

of the Compensation

Committee and a

member of

the Audit Committee of Diana

Shipping Inc., positions he has

held since March 2005.

Since March 2021,

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

Mr.

Kontoyannis has

over

years

experience

shipping

finance

and

currently

serves

financial

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

(Corporate

Bank),

London

(Head

Shipping

Finance

South

Western

European

Region)

and

Piraeus

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

Mr.

Kontoyannis holds a bachelor's

degree in Finance and

Marketing and a

master's degree in

Business

Administration and Finance from Boston University.

Simon Morecroft

has served as an independent

Director of Diana Shipping Inc.

since May 2022 and as

member

the

Company’s Compensation

Committee since

May

2025. He

also

serves

Director

Enarxis Ltd,

a shipping

consultancy company.

Mr.

Morecroft spent

his career

in the

shipbroking industry

as a Sale

and Purchase

broker. He joined Braemar

Shipbrokers Ltd

(now Braemar PLC)

in 1983

becoming

a director in 1986

and remained on

the board until

his retirement in August

2021. During this

time Braemar

grew from a boutique

broking operation into

one of the world’s

most successful fully

integrated shipbroking

companies with a listing on the London Stock Exchange.

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

Jane Chao

has served as an independent Director of Diana Shipping Inc. since February 2023. She also

serves as

a director

of Wah

Kwong Shipping

Holdings Limited,

a position

she has

held since

2008. Ms.

Chao

the

managing

director

Wah

Kwong

China

Investment

which

comprises

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

Council

Member

for

Changing

Young

Lives

Foundation

helping

underprivileged children in Hong Kong and China from 2014 to 2020.

Maria

Dede

has

served

Co-Chief

Financial

Officer

Diana

Shipping

Inc.

since

January

2025

and,

effective

January 1,

2026, also

holds

the

position of

Treasurer.

Prior to

these

roles,

Ms.

Dede

was

the

Company’s Chief Accounting Officer from September

2005. Additionally, she has been Co-Chief Financial

Officer of

Diana Shipping Services

S.A. since January

2025, having previously

served as the

company’s

Finance Manager and Chief Accounting Officer of the Company.

Ms. Dede began her career in 1996 at Venus

Enterprises S.A., a ship-management company, where she

held various positions primarily in accounting and

supplies until 2000. She then joined

the Athens branch

Arthur Andersen

in 2000,

which merged

with Ernst

& Young

(Hellas) in

2002, serving

as an

external

auditor for shipping companies until 2005.

She holds

a Bachelor’s

degree in

Maritime Studies

from the

University of

Piraeus, a

Master’s degree

Business Administration

from the ALBA

Graduate Business

School of

the American College

of Greece

and

a Master’s degree in Auditing and Accounting from

the Greek Institute of Chartered Accountants.

Margarita

Veniou

has

served

the

Chief

Corporate

Development,

Governance

Communications

Officer

Diana Shipping

Inc.

since

July

2022

and effective

January 1,

2026

also

holds

the

position of

Secretary

the

Board of

Directors

Diana Shipping

Inc.

From

September

2004

until June

2022, she

served

the

Corporate

Planning

Governance

Department

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

2022

she

held

various

other

positions

Diana

Shipping

Services

S.A.

addition,

since

November 2021,

Ms. Veniou

has

served as

the Chief

Corporate Development

& Governance

Officer

OceanPal Inc. (NASDAQ: SVRN)

and she has also served as the company’s

Board Secretary since April

2023.

She

the

General Manager

Steamship Shipbroking

Enterprises Inc.,

position

she

has

held

since April 2014.

From

January

2010

February

2020,

Ms.

Veniou

also

held

the

position

Corporate

Planning

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

Inc.) (NASDAQ: PSHG).

Ms. Veniou

holds a bachelor's

degree in Maritime

Studies and a

master's degree in Maritime

Economics

& Policy from the University of

Piraeus, Greece. In 2024, she completed the

"Leadership Communication

with

Impact"

program

INSEAD

Business

School.

Additionally,

she

has

completed

the

“Sustainability

Leadership

and

Corporate

Responsibility”

program

London

Business

School

and

has

obtained

the

Certification in

Shipping Derivatives

from Athens

University of

Economics and

Business. Ms.

Veniou is also

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

Maria-Christina Tsemani

has served as the

Company’s Chief People Officer

since July 2022 and,

as of

January

2026,

Chief

People

Culture

Officer.

Ms.

Tsemani

also

serves

Manager

Diana

Shipping Services S.A., a position she has held since October 2020.

Ms.

Tsemani

has over

20 years

of experience

in human

resources across

multinational companies

and

institutional

organizations.

Prior

joining

Diana

Shipping,

she

served

People

Acquisition

and

Development Manager of

Vodafone Greece.

During her career in

Vodafone from

2008 to 2020,

she held

various senior roles, including Senior HR Business Partner and Organizational Effectiveness and Reward

Manager. From 2004

to 2008,

Ms. Tsemani worked as

a Senior

HR Consultant

in PricewaterhouseCoopers

(PwC).

From

2001

2004,

she

served

Project

Manager

the

European

Commission,

based

Luxembourg.

Ms. Tsemani

holds a

bachelor’s degree

in Mathematical

Sciences and

a Master’s

of Science

in Applied

Statistics from the University of Oxford, UK.

Evangelos Sfakiotakis

has served as the

Chief Technical Investment Officer of Diana

Shipping Inc. since

January 2026.

Mr.

Sfakiotakis is

also the

Chief Operating

Officer of

Diana Shipping

Services S.A.

since

September 2022,

overseeing the

operational performance

and strategic

management of

a fleet

of more

than

30 bulk

carriers. With

more than

25 years

of experience

across the

shipping industry,

he has

held

senior

leadership

roles

technical,

fleet,

and

corporate

operations

within

major

ship-management

organizations.

Before joining

Diana Shipping

Services S.A. in

2022, he

served as

Chief Operating

Officer of Pavimar

S.A.,

managing a

diverse fleet

of carriers,

container vessels,

and tankers.

Earlier,

he spent

over a

decade at

TMS Tankers

Ltd, where he progressed from Fleet Manager to

Technical

Manager, supervising a

fleet of

tankers

(VLCC,

Aframax,

Suezmax,

Handymax).

His

responsibilities

covered

full

technical

operations, strategic planning, and the oversight of both Technical and Purchasing Departments.

Mr.

Sfakiotakis holds a

Diploma in

Mechanical Engineering

from the

University of

Patras and

completed

extensive postgraduate

research in

mechanical engineering,

contributing to

scientific publications

in the

fields of computational mechanics, gear technology, and structural analysis.

Compensation

Aggregate executive

compensation (including

amounts paid

to Steamship)

for 2025

was $6.0

million. Since

June 1, 2010, Steamship, a related party,

as described in "Item 7. Major Shareholders and

Related Party

Transactions—B. Related

Party Transactions"

has provided

to us

brokerage services.

Under the

Brokerage

Services

Agreement

effect

during

2025,

brokerage

fees

amounted

$3.9

million

and

also

paid

commissions

for

vessel

sales

and

purchases

amounting to

$0.4

million.

consider

fees

under

these

agreements to be part of our executive compensation due to

the affiliation with Steamship.

Non-employee directors

receive

annual compensation

the

amount

$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

member

committee

receives

additional

annual

compensation

$13,000,

plus

reimbursement for out-of-pocket expenses

with the exception

of the member

of the audit

committee who

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

out-of-pocket expenses. In 2025, fees

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

million.

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

Equity Incentive Plan

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

Equity Incentive

Plan for 5,000,000

shares of common

stock, amended on

May 31, 2018

to increase the

shares of common

stock to

13,000,000 and

further amended

on January

8, 2021,

referred to

as “the

Plan”, to

increase the

number

common

stock

available for

the

issuance

equity awards

20,000,000

shares.

Currently, 1,394,759 shares remain reserved for issuance under the Plan.

Under the Plan, the Company’s

employees, officers and directors

are entitled to receive

options to acquire

the

Company’s

common

stock.

The

Plan

administered

the

Compensation

Committee

the

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

may be designated by the Board.

Under

the

terms

the

Plan,

the

Company’s

Board

Directors

able

grant

(a)

non-qualified stock

options, (b) stock appreciation rights,

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

modify

the

application

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).

February

2025

and

2026,

our

board

directors

awarded

aggregate

2,000,000

and

1,850,000 shares,

respectively,

of restricted

common stock to

executive and non-executive

directors. All

restricted shares

vest ratably

over a

period of

three years

and are

subject to

forfeiture until

they vest.

addition,

in February

2026,

our board

of directors

also awarded

5,900,000 restricted

common shares

executive

and

non-executive

directors,

that

vest

ratably

over

period

six

years.

Unless

they

forfeit,

grantees

have the

right to

vote, to

receive and

retain all

dividends paid

and to

exercise all

other rights,

powers and privileges of a holder of shares.

In 2025, compensation

costs relating

to the aggregate

amount of

restricted stock

awards amounted

to $9.6

million.

Board Practices

have

established

Audit

Committee,

comprised

two

board

members,

which

responsible

for

reviewing

our

accounting

controls,

recommending

the

board

directors

the

engagement

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

our

auditors,

reviewing

the

adequacy

and

effectiveness

the

Company's

accounting

and

internal

control

procedures

and

reading

and

discussing

with

management

and

the

independent auditors the

annual audited

financial statements. The

members of

the Audit

Committee are

Mr. Kyriacos

Riris (chairman and financial

expert) and Mr.

Apostolos Kontoyannis (member and

financial

expert).

We have established a

Compensation Committee

comprised of two

board members, which,

as directed by

its

written

charter,

responsible

for

setting

the

compensation

executive

officers

the

Company,

reviewing the

Company’s incentive

and equity-based

compensation plans,

and reviewing

and approving

employment and

severance agreements.

The members

of the

Compensation

Committee are

Mr. Apostolos

Kontoyannis (chairman) and Mr. Simon Morecroft (member).

We have established a Nominating

Committee comprised of two

board members, which, as

directed by its

written

charter,

responsible

for

identifying,

evaluating

and

making

recommendations

the

board

directors

concerning

individuals

for

selections

director

nominees

for

the

annual

meeting

stockholders or to

otherwise fill board

of director vacancies.

The members of

the Nominating Committee

are Mr. Eleftherios Papatrifon (chairman) and Mr. Anastasios Margaronis (member).

We have established

a Sustainability

Committee comprised

of Mr. Apostolos Kontoyannis

(Chairman),

Ms.

Semiramis Paliou (member) and Mr.

Anastasios Margaronis (member).

The Sustainability Committee, as

directed by

its written

charter,

is responsible

for identifying,

evaluating and

making recommendations

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.

have

established

Executive

Committee

comprised

Ms.

Semiramis

Paliou

(Chairperson),

Mr.

Ioannis Zafirakis

(member), and

Mr.

Eleftherios Papatrifon

(member). The

Executive Committee

has, to

the extent permitted by law,

the powers of the Board of Directors in the management

of the business and

affairs of the Company.

also

maintain

directors’

and

officers’

insurance,

pursuant

which

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

all of

any incentive-based

compensation, if

any,

provided to

certain executives

who, during

a three-year

period

preceding

the

date

which

accounting

restatement

required,

received

incentive

compensation

based

the

erroneous

financial

data

that

exceeds

the

amount

incentive-based

compensation the executive would have received based on

the restatement.

Our

Clawback

Policy

shall

administered

our

Compensation Committee

who

has

the

authority,

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.

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

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

shoreside

personnel

employed

DSS

and

the

number

seafaring

personnel

employed

our

vessel-owning

subsidiaries

December

31,

2025,

2024

and

2023.

Year Ended December 31,

2025

2024

2023

Shoreside

126

Seafaring

813

864

906

Total

939

981

1,018

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.”

Disclosure of Registrant's Action to Recover Erroneously Awarded

Compensation

Not applicable.

Item 7.

Major Shareholders and Related Party Transactions

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

group.

All

our

shareholders,

including

the

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

of common stock held.

Title of Class

Identity of Person or Group

Number of

Percent of

Class*

Shares Owned

Common Stock,

Semiramis Paliou (1)

27,809,560

21.5%

par value $0.01

Anastasios Margaronis (2)

10,061,227

8.0%

Simeon Palios (3)

7,153,374

5.7%

Laeisz GmbH (4)

7,716,757

6.2%

All other officers and directors as a group (5)

9,668,908

7.8%

* Based on 123,539,757 common shares outstanding as of

March 12, 2026.

(1)

Ms. Semiramis Paliou

indirectly may be deemed

to beneficially own

21.5% of our

outstanding

common stock

through Tuscany

Shipping Corp.,

or Tuscany, and

through 4

Sweet Dreams

S.A.,

as the result

of her ability

to control the

vote and disposition

of such entities.

The shares include

5,931,386 shares

of common

stock issuable

to Semiramis

Paliou upon exercise

of 3,527,501

warrants distributed

on December

14, 2023.

As of

December 31,

2023, 2024

and 2025,

Ms.

Semiramis Paliou owned

indirectly 20.3%, 18.4%

and 20.4%, respectively,

of our outstanding

common

stock.

Additionally,

Ms.

Paliou

owns,

through

Tuscany,

10,675

Series

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

vote

the

common

stockholders

the

Company.

Each

Series

Preferred Stock shall entitle the holder thereof to two hundred thousand (200,000) votes on all

matters

submitted

vote

the

stockholders

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,

Common

Stock

any

other

voting

security

the

Company

issued

and

outstanding as of the date hereof or

that may be issued in the future)

on any matter submitted

vote

stockholders of

the

Company

would exceed

36.0%

the

total

number

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

and

any

other

voting

securities

the

Company beneficially

owned

such

holder,

shall

reduced to

36% of

the total

number of

votes that

may be

cast on

such matter

submitted to

vote of stockholders.

(2)

Mr. Anastasios

Margaronis

may

deemed

beneficially

own

8.0%

our

outstanding

common stock through Anamar Investments Inc. and ESX Investments Inc. as the result of his

ability

control

the

vote

and

disposition

such

entities.

These

include

3,014,529

common

stock

issuable

Anastasios

Margaronis

upon

exercise

1,792,794

warrants distributed on December 14, 2023.

(3)

Mr. Simeon Palios may be deemed to beneficially own 5.7% of our outstanding common stock

through

Taracan

Investments

S.A

and

Limon

Compania

Financiera

S.A.

the

result

his

ability

control

the

vote

and

disposition

such

entities.

These

include

1,189,537

common

stock

issuable

Symeon

Palios

upon

exercise

707,439

warrants

distributed on December 14, 2023.

(4)

This information is derived

from a Schedule

13D filed with

the SEC on June

12, 2025, adjusting

the percentage figure

based on the

common shares issued

and outstanding as

of the date

this report.

(4)

Mr.

Ioannis

Zafirakis

may

deemed

beneficially

own

4,934,878

shares,

3.9%

our

outstanding common stock, beneficially

owned through Abra Marinvest

Inc. The shares include

shares of common

stock issuable

upon exercise of

his warrants. Mr. Eleftherios

Papatrifon may

be deemed

to beneficially

own 1,800,772

shares, or

1.5% of

our outstanding

common stock.

The

include

common

stock

issuable

upon

exercise

his

warrants.

Mr.

Apostolos Kontoyannis may

be deemed

to beneficially

own 1,314,941

shares, or

1.1% of

our

outstanding

common

stock.

All

other

officers

and

directors

each

own

less

than

our

outstanding common stock.

As of

March 12,

2026, we

had 79

shareholders of record,

65 of

which were located

in the

United States

and

held

aggregate

103,357,639

our

common

shares,

representing

82.3%

our

outstanding

common

shares.

However,

one

the

U.S.

shareholders

record

CEDE

CO.,

nominee

The

Depository Trust

Company,

which held 101,864,543

of our

common shares as

of that

date. Accordingly,

we believe

that the

shares held

by CEDE

& CO.

include common

shares beneficially

owned by

both holders

in the United

States and

non-U.S. beneficial

owners. We are

not aware of

any arrangements,

the operation

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

Holders

the

Series

Preferred

generally

have

voting

rights

except

(1)

respect

amendments to the Articles of

Incorporation which would adversely alter

the preferences, powers or rights

the

Series

Preferred

(2)

the

event

that

propose

issue

any

parity

stock

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

series

parity

stock

upon

which

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.

Related Party Transactions

OceanPal Inc.,

or OceanPal

We own 207

shares of OceanPal’s Series

C Convertible Preferred Shares and 145,978

common shares.

On October 28, 2025, the Company sold

its 500,000 Series B Preferred Shares for

cash consideration of

$3.0

million.

purchasers

connection

with

PIPE

offering

and

between

OceanPal

and

certain

purchasers.

Series C Preferred Shares do

not have voting rights unless

they are related to amendments

of the Articles

of Incorporation that adversely

alter the preference, powers

or rights of the

Series C Preferred

Shares or

issue

Parity

Stock

create

issue

Senior

Stock.

Series

Preferred

are

convertible

into

common stock

at the

Company’s option,

at a

conversion price

equal to

the lesser

of $6.5

and the

10-trading

day trailing VWAP of

OceanPal’s common shares,

subject to adjustments.

Additionally, Series C Preferred

Shares have a cumulative preferred dividend accruing

at the rate of 8% per annum, payable in cash or, at

OceanPal’s election, in

kind and has

a liquidation

preference equal to

the stated value

of $1,000 per

share.

Dividend income from the OceanPal preferred shares during 2025 amounted

to $16,560.

OceanPal Inc. Non-Competition Agreement

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

2021, pursuant to which we

granted to OceanPal (i) a

right of first refusal over any

opportunity available to

(or

any

our

subsidiaries)

acquire

charter-in

any

dry

bulk

vessel

that

larger

than

70,000

deadweight

tons

and

that

was

built

prior

2006

and

(ii)

right

first

refusal

over

any

employment

opportunity for

a dry bulk

vessel pursuant

to a spot

market charter

presented or

available to

us with respect

any

vessel

owned

chartered

in,

directly

indirectly,

us.

The

non-competition

agreement

also

prohibits

and

OceanPal

from

soliciting

each

other's

employees.

The

terms

the

non-competition

agreement provide that it

will terminate on the

date that (i) our

ownership of OceanPal’s equity

securities

represents less than

10% of total

outstanding voting power

and (ii)

we and

OceanPal share no

common

executive officers.

OceanPal Inc. Right of First Refusal

On November

2, 2021,

we entered

into a

right of

first refusal

agreement with

OceanPal Inc.

pursuant to

which we granted OceanPal

Inc. a right of

first refusal over six

drybulk carriers owned

by us, as of

the date

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

OceanPal Inc. has

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

when and if we

make a determination

to sell one

or more of

the vessels at

a price equal

to the fair

market value of

each

vessel at

the time

of sale,

as determined

by the

average of

two independent

shipbroker valuations

from

brokers mutually

agreeable to

us and

OceanPal Inc.

If OceanPal

Inc. does

not exercise

its right

to purchase

a vessel, we have the

right to sell the vessel

to any third party for

a period of three months

from the date

notified OceanPal Inc.

of our intent to

sell the vessel.

As of the

date of the

annual report, only one

of the

six vessels identified in the agreement remains unsold.

Series D Preferred Stock

In June

2021, we

issued 400

shares of

our designated

Series D

Preferred Stock,

par value

$0.01 per

share,

to Tuscany Shipping

Corp., an entity controlled by

our Chief Executive Officer,

Ms. Semiramis Paliou, for

aggregate purchase

price

$360,000. The

Series

Preferred Stock

has

no dividend

liquidation

rights.

Each share

of Series

D Preferred

Stock shall

entitle the

holder thereof

to two

hundred thousand

(200,000)

votes

all

matters

submitted

vote

the

stockholders

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

issued

the

future)

any matter

submitted to

vote

stockholders of

the

Company

would

exceed 36.0% of

the total number

of votes eligible

to be cast

on such matter, the total

number of votes

that

holders of Series D Preferred Stock

may exercise derived from the Series

D Preferred Stock together with

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

be reduced

to 36%

of the

total number

of votes

that may

be cast

on such

matter submitted

to a

vote of

stockholders. The Series D Preferred Stock is

transferable only to the holder’s immediate

family members

and to affiliated

persons. The issuance of

shares of Series

D Preferred Stock to

Tuscany Shipping Corp.

was approved by an

independent committee of the Board

of Directors of the

Company, which

received a

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

from a financial point of view

to the Company.

Series C Preferred Stock

In January

2019, we

issued 10,675

shares of

our designated

Series C

Preferred Stock,

par value

$0.01

per share, to an

affiliate of our Chairman, Mr.

Simeon Palios.

In September 2020, the Series

C Preferred

were

transferred

from

affiliate

Mr.

Simeon

Palios

affiliate

the

Company’s

Chief

Executive Officer,

Mrs. Semiramis Paliou. The

Series C Preferred Stock

vote with the common

shares of

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

of the stockholders

of the Company. The

Series C

Preferred Stock

has no dividend

or liquidation

rights and

cannot be transferred without the consent of the

Company except to the holder’s affiliates and immediate

family members.

The issuance

of shares

of Series

C Preferred

Stock was

approved by

an independent

committee of the

Board of Directors,

which received

a fairness opinion

from an independent

third party that

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

Steamship Shipbroking Enterprises Inc.

Steamship, an

affiliated entity

controlled by

our CEO

Ms. Semiramis

Paliou,

provides us

brokerage services

for an annual

fee pursuant

to a Brokerage

Services Agreement.

In 2025, brokerage

fees, amounted

to $3.9

million and

we paid

an additional

amount of

$0.4 million

for commissions

on the

sale and

purchases of

vessels. The terms of

this relationship are currently governed

by a Brokerage Services

Agreement dated

February 25, 2026 due to expire on December 31, 2026.

Altair Travel Agency S.A.

Altair Travel Agency S.A., or Altair,

an affiliated entity that is controlled by our CEO Ms. Semiramis Paliou

provides us with travel related services. Travel related expenses in 2025, amounted

to $2.7 million.

Diana Wilhelmsen Management Limited

Diana Wilhelmsen

Management Limited,

or DWM,

is a

50/50 joint

venture which

provides management

services to certain

vessels in our

fleet for a

fixed monthly fee

and commercial services for

a fee charged

as a percentage of

the vessels’ gross revenues. Management fees

in 2025 amounted to $1.2

million and

commissions amounted to $0.3 million.

Bond acquisition

Officers and directors of

the Company and/or

entities affiliated with them

purchased an aggregate

of $47.3

million principal amount of our senior unsecured bond issued on July

2, 2024.

Bergen Ultra LP

Bergen Ultra LP,

or Bergen, is a limited partnership that owned until January 2026 a dry bulk carrier. One

of our subsidiaries,

Diana General

Partner Inc.,

owns 3%

of the

partnership and

acts as its

General Partner

and another subsidiary, Komi Shipping Company Inc., owns 22%.

The remaining partnership interests

are

owned by unaffiliated

third parties. On

March 30, 2023,

we entered into

a corporate guarantee

with Nordea

to secure Bergen’s

obligations under

a $15.4

million loan

facility and

a commission

agreement under

which

the

Company

received

commission

0.8%

per

annum,

the

outstanding

balance

the

loan,

compensation for providing this guarantee

to Nordea. We have also entered

into an administrative service

agreement

under

which

DSS

provides

administrative

services

Bergen.

2025,

income

from

administrative

fees

amounted

$15,000,

and

received

$105,976

payment

for

the

guarantee

commission.

On November 19, 2025, Bergen entered into an agreement with an unrelated third party to sell the vessel

for $26.4 million.

Upon completion of the vessel sale

and full repayment of Bergen’s loan with Nordea,

the

Company’s corporate guarantee for Bergen’s obligations under the loan was released.

Windward Offshore GmbH

Windward

Offshore

GmbH

Co.

KG,

Windward,

limited

partnership operating

offshore

wind

vessel

company

based

Germany.

One

our

subsidiaries,

Diana

Energize

Inc.,

Diana

Energize,

entered

into

novated

agreement

contribute

capital

for

Windward’s

construction

four

CSOVs,

ultimately

contributing

45.87%

Windward’s

capital.

May

2025,

new

partner

was

admitted

Windward and the Company received Euro 3.1 million as

return of capital, which reduced the Company’s

ownership percentage to 34%. As of December 31, 2025, our investment

in Windward amounted to $44.5

million consisting

advances to

fund

the

construction of

the

vessels,

working capital

and

our

share in

Windward’s results.

Diana Mariners Inc.

2023,

acquired

through

one

our

subsidiaries,

Cebu

Shipping

Company

Inc.,

Cebu,

24%

interest in Cohen Global Maritime Inc., or Cohen,

a company organized in the Republic of the

Philippines

for the purpose of providing

manning services to our vessels.

Cohen was renamed Diana

Mariners Inc., or

Diana Mariners, in August

2024. As of December

31, 2025, our investment

in Diana Mariners

amounted to

$0.4 million and

$0.8 million was

due from Diana

Mariners. As of

December 31,

2025, all of

the Company’s

ship-owning subsidiaries had entered into manning agreements

with Diana Mariners.

Ecogas Holding AS.

On March 12, 2025, we entered, through our wholly owned subsidiary Diana Gas Inc., into a joint venture

agreement with an unrelated party to establish

Ecogas, a company formed under the laws

of Norway,

for

the purpose of building two 7,500 cbm LPG vessels scheduled for delivery in

2027. The Company agreed

to contribute $18.5 million,

representing an 80% equity interest for the construction of the two vessels. As

of December 31,

2025, our investment in

Ecogas amounted to $8.8

million, representing a

portion of our

equity contributions to fund the construction of the vessels and working capital as well as our share of the

loss recognized from this investment at year-end.

Interests of Experts and Counsel

Not Applicable.

Item 8.

Financial information

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

operations

liquidity.

From time

time,

we may

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

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

position

take

advantage

market

opportunities

then-

deteriorating

market,

our

board

directors,

beginning

with

the

fourth

quarter

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

2025

and

two

special

noncash

dividends,

described

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

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

pay

dividends

under

the

terms

our

loan

facilities,

may

limit

our

ability

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

dividends

other

than

from

surplus

when

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

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

legally

available funds

for

such

purpose.

The

dividend

rate

for

our

Series

Preferred

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

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.

Significant Changes

There have

been no

significant changes

since the

date of

the

annual consolidated

financial statements

included in

this annual

report, other

than those

described in

Note 16

“Subsequent events”

of our

annual

consolidated financial statements.

Item 9.

The Offer and Listing

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.

Plan of distribution

Not Applicable.

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

the

Oslo

Stock

Exchange,

under the symbol "DIASH03."

Selling Shareholders

Not Applicable.

Dilution

Not Applicable.

Expenses of the Issue

Not Applicable.

Item 10.

Additional Information

Share Capital

Not Applicable.

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

each

class

our

described

Exhibit 2.6

this

annual

report

titled

“Description

Securities

Registered

Pursuant

Section 12 of the Securities Exchange Act of 1934.”

Stockholders Rights Agreement

February 2,

2024, we

entered

into

Amended and

Restated Stockholders

Rights

Agreement with

Computershare

Trust

Company,

N.A.,

Rights

Agent,

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,

Right,

for

each

common

stock

outstanding

the

business

January 26,

2016.

Each Right

entitles the

registered

holder to

purchase from

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)

transaction

not

approved

our

Board

Directors.

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.

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.

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.

Exchange Controls

Under

Marshall

Islands,

Panamanian,

Cypriot

and

Greek

law,

there

are

currently

restrictions on

the

export or import of

capital, including foreign exchange controls or restrictions

that affect the remittance

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

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

the

ownership

and

disposition

U.S. Holder

and

Non-

U.S. Holder,

each as defined

below,

of the

common stock. This

discussion does not

purport to deal

with

the

tax

consequences

owning

common

stock

all

categories

investors,

some

which,

such

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

straddle,

hedge,

conversion

transaction

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

later

than

when

such

income

reported

“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

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

based

upon

the

provisions

the

U.S.

Internal

Revenue

Code

1986,

amended

(the

“Code”),

existing

and

proposed

U.S.

Treasury

Department

regulations,

(the

“Treasury

Regulations”),

administrative

rulings,

pronouncements

and

judicial

decisions,

all

the

date

this

Annual Report.

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

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

vessels

international

commerce

and

that

this

income

will

principally

consist

freights

from

the

transportation

cargoes,

hire

lease

from

time

voyage

charters

and

the

performance

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,

the

United

States

will

considered

50%

derived

from

sources

within

the

United

States.

Shipping

Income

attributable

transportation

that

both

begins

and

ends

the

United

States

will

considered to be

100% derived from

sources within the

United States. The

Company is not

permitted by

law

engage in

transportation that

gives rise

100% U.S. source

Shipping Income.

Shipping Income

attributable to

transportation exclusively

between non-U.S. ports

will be

considered to

100% derived

100

from sources outside the United States. Shipping Income

derived from sources outside the United States

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

Based upon the

Company’s anticipated

shipping operations,

the Company’s vessels

will operate

in various

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

under

Section 883

the

Code,

the

Company

will

subject

U.S. federal

income

taxation,

the

manner

discussed below,

to the extent

its Shipping Income

is considered derived

from sources within

the United

States.

the

year

ended

December

31,

2025,

approximately

6.5%

the

Company’s

shipping

income

was

attributable to the transportation of cargoes either to or from a U.S. port. Accordingly, approximately 3.3%

the

Company’s

shipping

income

would

treated

derived

from

U.S. sources

for

the

year

ended

December 31, 2025. In

the absence of

exemption from U.S. federal income

tax under Section 883 of

the

Code, the Company

would have been

subject to a

4% tax on its

gross U.S. source

Shipping Income, equal

to $0.3 million for the year ended December 31, 2025.

Application of Exemption under Section 883 of the Code

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

thereunder,

foreign

corporation

will

exempt

from

U.S. federal

income

taxation

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:

•

than

50%

its

stock,

terms

value,

beneficially

owned

qualified

shareholders

which,

defined,

includes

individuals

who

are

residents

qualified

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

•

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

incorporation of

each of

the Company

and its

subsidiaries

that earns

Shipping Income,

as a

qualified foreign

country.

Accordingly,

the

Company

and

each

the

subsidiaries

satisfy

the

Country

Organization

Requirement.

For the 2025

taxable year, the

eligibility of

the Company

and each

subsidiary to

qualify for

exemption under

Section 883

the

Code

wholly

dependent

upon

the

Company’s

ability

satisfy

either

the

50%

Ownership Test

or the Publicly Traded Test.

The 50% Ownership Test

For

purposes

the

50%

Ownership

Test,

“qualified

shareholders”

include:

(i)

individuals

who

are

“residents”

(as

defined

the

Treasury

regulations

promulgated

under

Section

883

the

Code

(the

“Section

883

Regulations”)

qualified

foreign

countries,

(ii)

corporations

organized

qualified

foreign

countries that meet the

Publicly-Traded Test

(discussed below), (iii) governments

(or subdivisions thereof)

of qualified foreign countries, (iv)

non-profit organizations organized in qualified foreign countries, and

(v)

certain beneficiaries

of pension

funds organized

in qualified

foreign countries,

in each

case, that

do not

beneficially

own

the

foreign

corporation

claiming

the

Section

883

Exemption,

directly

101

indirectly (at any point in

the chain of ownership), in

the form of bearer shares

(as described in the Section

883 Regulations).

For this

purpose, certain

constructive ownership

rules under

the Section

883 Regulations

require looking

through the ownership

of entities

to the owners

of the interests

in those entities.

The foreign

corporation claiming

the

Section 883

Exemption based

on the

50% Ownership

Test

must obtain

all

the

facts

necessary

satisfy

the

IRS

that

the

50%

Ownership

Test

has

been

satisfied

(as

detailed

the

Section 883 Regulations) and must meet certain substantiation

and reporting requirements.

The Publicly-Traded Test

Under

the

Treasury

Regulations,

stock

foreign

corporation

considered

“primarily

traded”

established

securities market

country

the

number

shares of

each

class

stock

that

is traded

during the taxable year on

all established securities markets in

that country exceeds the number

of shares

each

such

class that

is traded

during that

year

established securities

markets in

any

other single

country.

Under

the

Treasury

Regulations, the

Company’s

common

and

preferred stock

will

considered to

“regularly traded” on

the NYSE if: (1)

more than 50% of

its common stock,

by voting power and

total value,

is listed on the NYSE, referred to as the “Listing Threshold”, (2) its common stock is

traded on the NYSE,

other than in

minimal quantities,

on at least

60 days during

the taxable

year (or one-sixth

of the days

during

a short taxable year), which is referred to as the “Trading Frequency Test”;

and (3) the aggregate number

of shares of its common stock traded on the NYSE during the

taxable year is at least 10% of the average

number of shares of its common stock outstanding during such taxable

year (as appropriately adjusted in

the case

of a

short taxable

year), which

is referred

to as

the “Trading Volume

Test”.

The Trading Frequency

Test and Trading Volume Test are deemed

to be

satisfied under

the Treasury

Regulations if

the Company’s

common stock is regularly quoted by dealers making a market in

the common stock.

Notwithstanding the foregoing, the Treasury

Regulations provide, in pertinent part,

that stock of a

foreign

corporation

will

not

considered

“regularly

traded”

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,

than

half

the

days

during

the

taxable

year

persons,

“5%

Shareholders”,

who

each

own

the

value

such

stock,

the

“5%

Override

Rule.”

For

purposes

determining

the

persons

who

are

Shareholders,

foreign

corporation

may

rely

Schedules 13D and 13G filings with the SEC.

However, the requirements of establishing these exemptions are onerous and there can be no assurance

that the

Company will

either satisfy

the

50% Ownership

Test

or the

Publicly Traded

Test

in 2025

or in

future taxable years.

Taxation in Absence of Exemption Under Section 883 of the Code

the

extent the

benefits of

Section

883

the

Code

are

unavailable with

respect

any

item

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

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

its

U.S.

source Shipping

Income

for

the

2025

taxable

year

and

the

absence

exemption

under Section 883 of

the Code, the Company

would be subject to

$0.3 million of U.S.

federal income tax

under the 4% Gross Basis Tax Regime.

102

The 4%

Gross Basis

Tax Regime would not apply

to U.S. source

Shipping Income

to the extent

considered

to be

“effectively connected”

with the

conduct of

a U.S.

trade or

business.

In the

absence of

exemption

under Section

883 of

the Code,

such “effectively

connected” U.S.

source Shipping

Income, net

of applicable

deductions, would be

subject to U.S.

federal income tax

currently imposed at

a rate of

21%.

In addition,

earnings

“effectively

connected”

with

the

conduct

such

U.S.

trade

business,

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

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.

do not

intend to

have, or

permit

circumstances that

would result

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

gain

realized

sale

vessel,

provided

the

sale

considered to

occur outside

of the

United States

under U.S.

federal income

tax principles.

In general,

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

discussion

the

material

U.S.

federal

income

tax

considerations

relevant

investment decision

by a

U.S. Holder, as

defined below, with

respect to

our common

stock. This discussion

does

not

purport

deal

with

the

tax

consequences

owning

our

common

stock

all

categories

investors,

some

which may

subject to

special rules. You

are

encouraged to

consult your

own tax

advisors

concerning

the

overall

tax

consequences

arising

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

more U.S. persons

have the authority

to control all

substantial decisions

of the trust

or (b) it

has an election

place

treated

United

States

person;

and

(ii)

owns

the

common

stock

capital

asset,

generally, for investment purposes.

a partnership

holds our

common stock,

the

tax treatment

a partner

will generally

depend upon

the

status of the partner and

upon the activities of the

partnership. If you are a partner

in a partnership holding

our common stock, you are encouraged to consult your own

tax advisor on this issue.

Distributions

Subject to

the discussion of

passive foreign investment

companies below,

any distributions made

by the

Company with respect to its common

stock to a U.S. Holder will

generally constitute dividends, which

may

103

taxable

ordinary

income

“qualified

dividend

income”

described

detail

below,

the

extent of

the Company’s

current or

accumulated earnings

and profits,

as determined

under U.S.

federal

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

and profits will be treated first as

a non-taxable return of capital

to the extent of the U.S. Holder’s

tax basis in his common stock

on a dollar-

for-dollar basis

and thereafter

as capital

gain. Because

the Company

is not

a U.S.

corporation, U.S.

Holders

that are corporations will generally not

be entitled to claim a dividends-received deduction with respect

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

treated

“qualified dividend

income”

that

taxable

Holders

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

ordinary

income

U.S.

Non-Corporate

Holder.

Special

rules

may

apply

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.

pay

“extraordinary dividend”

our

common stock

that

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

the

U.S.

Holder

from

such

sale,

exchange

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

preferential U.S.

Federal income

tax

rates.

U.S.

Holder’s ability

deduct capital

losses

subject to certain limitations.

PFIC Status and Significant Tax Consequences

Special

U.S.

federal

income

tax

rules

apply

U.S.

Holder

that

holds

stock

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

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

•

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

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

other than in the

active conduct of a rental business), or

•

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

during such

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

income.

104

For purposes of determining whether

the Company is a PFIC, the

Company will be treated as earning

and

owning its proportionate

share of the income and

assets, respectively, of any of its subsidiary

corporations

in which it owns at least 25% of the

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

earned, by

the

Company

connection

with

the

performance

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

expect

become,

PFIC

with

respect

any

taxable

year. Although

there

legal

authority directly

on point,

the Company’s

belief is

based principally on

the position

that, for

purposes of

determining

whether

the

Company

PFIC,

the

gross

income

the

Company

derives

deemed

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

its

wholly-owned

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

the vessels,

not

constitute

assets

that

produce

are

held

for

the

production

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

income

derived

from

time

charters

and

voyage

charters

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

conduct

its

affairs

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

subject

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

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

increased

reflect

amounts

included

the

Electing

Holder’s income.

Distributions received

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

the adjusted tax

basis in

the common

stock and

will not

be taxed

again once

distributed. An Electing

Holder would

generally

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

of the common stock.

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

Alternatively,

if the

Company were

to be

treated as

a PFIC

for any

taxable year

and, as

anticipated, the

common stock is treated

as “marketable stock,” a

U.S. Holder would be

allowed to make a

Mark-to-Market

Election with respect to the Company’s

common stock. If that election is made, the

U.S. Holder generally

would include as

ordinary income

in each

taxable year the

excess, if

any,

of the

fair market

value of

the

105

common

stock

the

end

the

taxable

year

over

such

Holder’s

adjusted

tax

basis

the

common

stock. The U.S. Holder

would also be

permitted an

ordinary loss in

respect of

the excess, if

any, of the U.S.

Holder’s adjusted tax basis in the

common stock over its fair

market value at the end

of the taxable year,

but only

to the

extent of

the net

amount previously

included in

income as

a result

of the

Mark-to-Market

Election. A U.S. Holder’s tax

basis in his

common stock would

be adjusted to

reflect any such

income or

loss

amount. Gain

realized

the

sale,

exchange

other

disposition

the

common

stock

would

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

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

the

three

(3)

preceding

taxable

years,

or,

shorter,

the Non-Electing Holder’s

holding

period

for

the

common

stock),

and

(2) any

gain

realized

the

sale,

exchange

other

disposition

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

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

tax

effect

for

the

applicable class

taxpayer

for

that

year,

and

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.

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

herein as a “Non-U.S. Holder.”

Dividends on Common Stock

Non-U.S.

Holders

generally

will

not

subject

U.S.

federal

income

withholding

tax

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

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

subject

U.S.

federal

income

withholding

tax

any

gain

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

stock, unless:

106

•

the

gain

effectively

connected

with

the

Non-U.S.

Holder’s

conduct

trade

business in the United States. If

the Non-U.S. Holder is entitled to

the benefits of a U.S.

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

the United States only

if attributable

to a

permanent establishment maintained

by the

Non-U.S. Holder

in the

United States; or

•

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

in the United States for 183 days or

more during the taxable year of disposition and other conditions

are met.

If the

Non-U.S. Holder

is engaged

in a

U.S. trade

or business

for U.S.

federal income

tax purposes,

the

income

from

our

common

stock,

including

dividends

and

the

gain

from

the

sale,

exchange

other

disposition

the

common

stock,

that

effectively

connected

with

the

conduct

that

U.S.

trade

business

will

generally

subject

U.S.

federal

income

tax

the

same

manner

discussed

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

required

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

not

additional

tax. Rather,

taxpayer

generally

may

obtain

refund

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

the

asset for

each taxable

year

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

the

taxable

year

(or

such

higher

dollar

amount

prescribed

applicable

Treasury

Regulations).

Specified foreign

financial assets

would include,

among other

assets, our

common stock,

unless the

common stock

is held

through an

account maintained

with a

U.S. financial

institution. Substantial

107

penalties

apply

any

failure

timely

file

IRS

Form

8938,

unless

the

failure

shown

due

reasonable cause

and not

due to

willful neglect.

Additionally, in the

event a

U.S. Holder

who is

an individual

(and to

the

extent specified

in applicable

Treasury

regulations, a

U.S. entity)

that is

required to

file IRS

Form

8938

does

not

file

such

form,

the

statute

limitations

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

tax

cross-border

international trade and profits are evolving

as a result of, among

other things, initiatives such as the

Anti-

Tax

Avoidance

Directives,

well

the

Base

Erosion

and

Profit

Shifting

reporting

requirements,

mandated

and/or

recommended

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

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

jurisdiction

where

conduct

business

pay tax

could

have

negative effect on our company.

Dividends and paying agents

Not Applicable.

Statement by experts

Not Applicable.

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.

Subsidiary information

Not Applicable.

Annual Report to Security Holders

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

format as an exhibit to a

current report on Form 6-K.

108

Item 11.

Quantitative and Qualitative Disclosures about Market Risk

Interest Rates

are

exposed

market

risks

associated

with

changes

interest

rates

our

loan

facilities,

under which we

pay interest at

term SOFR plus

a margin. Increases

in interest rates

could adversely affect

our results

of operations.

An increase

of 1%

in the

interest rates

of our

loan facilities

bearing a

variable

interest rate during 2025, could have increased our interest cost by

approximately $3.4 million.

We expect to continue

to have debt

outstanding, which could

impact our results

of operations and

financial

condition. We manage

our interest rate

exposure by maintaining a

mix of floating

and fixed interest rates

financing agreements.

During 2022, we refinanced certain portions of our loans bearing a floating interest

rate

through sale

and leaseback

transactions with

fixed rates.

2023, we

entered into

interest rate

swap for

$30 million

under which

we pay

fixed interest

and receive

floating. Through

these agreements

and our bond, which

also bears a fixed

interest rate, we

manage a portion of

our exposure to interest

rates

associated with the remaining agreements that bear floating interest

rates.

As of December

31, 2025, 2024

and 2023, and

as of the

date of this

annual report, we

did not and

have

not designated any financial instruments as accounting hedging

instruments.

Currency and Exchange Rates

We generate all of our revenues in U.S. dollars but incur less than half of our operating expenses (30% in

2025 and 29% in 2024) and

approximately half of our general and administrative expenses (49%

in 2025

and 46%

in 2024)

in currencies

other than

the U.S.

dollar,

primarily the

Euro. For

accounting purposes,

expenses incurred in Euros are translated

into U.S. dollars at the exchange rate

prevailing on the date of

each transaction. Because a

significant portion of our

expenses are incurred in

currencies other than the

U.S. dollar, our expenses

may from time

to time increase

relative to our

revenues as a

result of fluctuations

exchange

rates,

particularly

between

the

U.S.

dollar

and

the

Euro,

which

could

affect

our

results

operations

future

periods.

Currently,

not

consider

this

risk

material

our

results

operations, as in 2025 and 2024, non-US dollar

expenses represented 19% and 17%, respectively of our

revenues. Accordingly, we have not entered into derivative instruments to hedge this exposure.

While we

historically have

not mitigated

the risk

associated with

exchange rate

fluctuations through

the use

of financial

derivatives, we

may determine

to employ

such instruments

from time

to time

in the

future to

minimize this risk. Our use of

financial derivatives would involve

certain risks, including the risk

that losses

on a

hedged position

could exceed

the nominal

amount invested

in the

instrument and

the risk

that the

counterparty to the derivative transaction

may be unable or

unwilling to satisfy its

contractual obligations,

which could have an adverse effect on our results.

Item 12.

Description of Securities Other than Equity Securities

Not Applicable.

109

PART II

Item 13.

Defaults, Dividend Arrearages and Delinquencies

None.

Item 14.

Material Modifications to the Rights of Security Holders and

Use

of Proceeds

None.

Item 15.

Controls and Procedures

a) Disclosure Controls and Procedures

Management,

including

our

Chief

Executive

Officer

and

Chief

Financial

Officers,

have

conducted

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

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

provide reasonable

assurance

regarding

the

reliability

financial

reporting

and

the

preparation

the

Company’s

financial

statements

for

external

reporting

purposes

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,

reasonable detail,

accurately and

fairly

reflect

the

transactions

and

dispositions

the

assets

the

company;

(ii)

provide

reasonable

assurance that transactions are

recorded as necessary to permit

the preparation of financial statements

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

this

assessment,

management

has

determined

that

the

Company’s

internal

control

over

financial

reporting as of December 31, 2025 is effective.

The registered

public accounting firm

that audited

the financial

statements included

in this

annual report

containing

the

disclosure

required

this

Item

has

issued

attestation

report

management's

assessment of our internal control over financial reporting.

110

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

met.

Further,

because

the

inherent

limitations

all

control

systems,

evaluation

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,

by management override of the controls. The

design of any system of controls

is based in part on

certain

assumptions

about

the

likelihood

future

events,

and

there

can

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

“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

ethics is posted on our website,

http://www.dianashippinginc.com

, under “About Us—Code of Ethics” and

is filed

as Exhibit

11.1

to the

Annual Report filed

on Form

20-F on March

21, 2025,

and incorporated by

reference herein. Copies of our code of ethics are available in print, free of charge, upon

request to Diana

Shipping

Inc.,

Pendelis

16,

175

Palaio

Faliro,

Athens,

Greece.

intend

satisfy

any

disclosure

requirements regarding

any amendment

to, or

waiver from,

a provision

of this

code of

ethics by

posting

such information on our website.

Item 16C. Principal Accountant Fees and Services

a) Audit Fees

Our principal accountants,

Deloitte Certified Public

Accountants S.A.,

the member firms

of Deloitte Touche

Tohmatsu

Limited and

their respective

affiliates (collectively,

“Deloitte”) have

billed us

for audit

services.

Audit

fees

2025

and

2024

amounted

€

382,822

and

€

360,000,

approximately

$414,398

and

$388,000, respectively, and relate to compensation

for professional services

rendered for the audits

of our

consolidated financial statements and in connection with the

review of regulatory filings.

The amount of €

111

382,822 consists of

€ 367,822 related

to Deloitte and

€ 15,000 to Ernst

& Young (Hellas) Certified Auditors

Accountants S.A.

b) Audit-Related Fees

Audit related fees during 2025 amounted to € 9,000,

as compared to € 51,301 in 2024 and relate

to audit

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

c) Tax Fees

None.

d) All Other Fees

During 2025, we

paid fees amounting to

€17,280 related to

professional services rendered by

Deloitte in

connection with assistance provided with the Company’s cybersecurity assessment.

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

Our

Audit

Committee

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

which

services

proposed

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

each

other

requirement

applicable

audit

committees

required

the

applicable listing standards of the NYSE.

Item

16E.

Purchases

Equity

Securities

the

Issuer

and

Affiliated

Purchasers

On May 23, 2014, we announced that our

Board of Directors authorized a share repurchase

plan for up to

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

plan does not have an expiration date. During 2025,

we did

not repurchase

any shares

of common

stock and

as of

December 31,

2025 and

the date

of this

report, there

is an

outstanding value

of about

$66.3 million

of common

shares that

can be

repurchased

under

the

plan.

December

2024,

the

Company

commenced

tender

offer

purchase

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

January

2025

and

purchased

total

11,442,645 shares of common stock for an aggregate amount of $22.9 million.

Item 16F.

Change in Registrant’s Certifying Accountant

Not applicable.

112

Item 16G.

Corporate Governance

Overview

Pursuant to an exception for foreign private issuers,

we, as a Marshall Islands company,

are not required

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

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

not

expect

them

the

future.

Audit Committee

The NYSE requires,

among other things,

that a company

have an audit

committee with a

minimum of three

members.

Our Audit

Committee consists

of two

independent members

of our

Board of

Directors. Our

Audit

Committee

conforms

every

other

requirement

applicable

audit

committees

set

forth

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,

not

need prior

shareholder approval

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

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

the

Marshall

Islands

Business

Corporations

Act,

which

allows

the

Board

Directors

approve share issuances. Additionally,

the NYSE restricts the issuance of super voting

stock such as our

Series

Preferred

Shares.

However,

pursuant

313.00

Section

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

compliance

with

the

NYSE’s

requirements

for

domestic

companies

that

not

prohibited by

the company's

home country

law.

are not

subject to

such restrictions

under our

home

country, Marshall Islands, law.

113

Item 16H. Mine Safety Disclosure

Not applicable.

Item 16I.

Disclosure Regarding

Foreign Jurisdictions

that Prevent

Inspections

Not applicable.

Item 16J. Insider Trading Policies

Pursuant to applicable SEC transition guidance, we have

adopted

insider trading policies and procedures

governing

the

purchase,

sale,

and

other

dispositions

the

registrant’s

securities

directors,

senior

management, and employees

that are reasonable

designed to promote

compliance with applicable

insider

trading laws, rules and regulations, and

NYSE listing standards for fiscal

year ending December 31, 2024.

Our insider trading policies and procedures are filed as Exhibit

11.2 to this annual report.

Item 16K. Cybersecurity

Risk management and strategy

We have security measures

in place

to mitigate the

risk of cybersecurity

threats affecting our technological

environment and

our business.

Cybersecurity risk

management is

integrated into

our broader

enterprise

risk management

(ERM) framework

to protect

shareholder value

and ensure

business continuity.

Cyber

risks are assessed

alongside operational,

financial, and compliance

risks. By integrating

cybersecurity into

our broader risk management strategy, we aim to reduce exposure

to cyber incidents, safeguard sensitive

data,

and maintain

investor

confidence in

our

long-term resilience

and

operational stability.

Throughout

2025, the

Company successfully

maintained its

ISO 27001

certification, demonstrating

ongoing compliance

with

the

rigorous

requirements

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.

preparation

for

evolving

regulatory

landscapes,

the

Company

also

completed

NIS2

Gap

Analysis

2025

and

has

initiated

remediation of findings to ensure future compliance.

Additionally,

have

established structured

processes

for

third-party

risk

management.

During

vendor

onboarding and

ongoing monitoring,

information security

assessments are

conducted.

During 2025,

this

third-party risk management

program included

a focused

web application

penetration test

on a critical

ERP

vendor, ensuring the security of our supply chain and partner ecosystem.

Cybersecurity training

is carried

out on

a company-wide

basis to

all employees

and seafarers.

During 2025,

the Company executed a multi-faceted awareness strategy. This included the release of a fully digitalized

cybersecurity

awareness

training

program

specifically

for

crew

members.

Onshore,

implemented

gamified learning

experiences, synchronous

and asynchronous

security awareness

sessions, and

custom-

tailored

phishing

campaigns.

further

enhance

visibility,

deployed

new

internal

communication

mechanism

push

security

awareness

material

directly

employee

workstation

lock-screens.

The

security

team

has

further

enhanced

our

processes

and

increased

our

defenses

maintaining

cybersecurity testing program. In 2025,

this included internal penetration testing on

vessel networks and a

comprehensive

social

engineering

exercise

conducted

across

the

entire

fleet.

centralized

monitoring

system

place

throughout

the

year.

2025,

fully

onboarded

our

shore-based

operations

managed Security Operations Center (SOC). This partnership

enables proactive 24/7 security monitoring,

114

threat intelligence, and rapid

incident response. Regarding

operational resilience and

network security, we

optimized

our

fleet’s

data

consumption and

patch management

strategy during

the

year

by centralizing

Windows update deployment on vessels, significantly

reducing bandwidth usage and ensuring that critical

security

patches

are

applied

efficiently

across

the

fleet.

further

ensure

business

continuity

and

operational

resilience,

the

Company

successfully implemented

cloud-based disaster

recovery

site

for

critical applications

during 2025.

This migration

ensures that

essential business

functions can

be rapidly

restored and maintained in the event of physical or digital disruptions

to our primary systems.

As emerging

technologies such

as Artificial

Intelligence become

more prevalent,

the Company

is taking

steps to ensure responsible use. In 2025, we initiated the creation of a draft AI policy to govern the usage

of AI tools within

the organization. Furthermore,

we selected a

training provider for

an AI training

workshop

to upskill employees on the risks and

benefits of AI technology.

While we utilize AI-driven tools within our

security

stack

(such

within

our

Security

Information

and

Event

Management

—

SIEM

and

Security

Operations

Center-SOC

solutions),

continue

monitor

the

regulatory

environment

regarding

disclosures.

Looking

ahead

2026,

our

strategic

focus

shifts

towards

hardening

our

infrastructure

and

expanding

control

over

unmanaged

assets.

Key

projects

include

the

implementation

Mobile

Application

Management (MAM) technology

to secure corporate

data on

unmanaged devices, and

the installation of

enterprise-grade firewalls across our vessel fleet.

We will also

prioritize the hardening of our

Azure cloud

infrastructure

and

proceed with

comprehensive Information

Protection project,

for

which an

RFP

was

issued in

late 2025.

Furthermore, we

will maintain

a strong

focus on

the human

factor by

continuing our

rigorous information security

training and

awareness programs, incorporating

new modules

on emerging

threats to ensure our staff and crew remain vigilant.

In parallel to these security measures,

our Company continues to actively

invest on Data Governance

and

the Data

Management, expanding its

Data Platform

over Microsoft Azure

Technologies,

which acts

as a

centralized

and

secure

source

truth

for

our

operations,

strengthening

the

quality

and

integrity

company’s informational assets.

The Data Platform

enables better, faster and more

accurate monitoring of

Company activities and improves decision making and productivity. This transition is further strengthened

with the digital upskilling of relevant personnel, enabling the proper and

secure use of information assets.

We are

committed to enhance

and enriching our

operational excellence through our

external 3rd parties’

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

share our results and “lessons

learnt”

within the industry and organizations, we compare and

benchmark our performance and we continuously

improve our safety footprint.

Governance

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

the

day-to-day

oversight

cybersecurity

and

other

technology

risks

the

Chief

Information

Security

Officer, who has 12 years of specialized information security experience.

This experience

includes serving

as Chief

Information Security

Officer at

Diana Shipping

Services S.A.,

Information Security Officer at Viva

Wallet, Senior IT Auditor at

First Data Corporation focusing on EMEA

region security audits, and IT

Auditor/Security Consultant at Deloitte's

Enterprise Risk Services. The

Chief

Information

Security

Officer

holds

CISA

and

CDPSE

certifications

from

ISACA,

completed

Information

Security Management Systems

(ISMS) Auditor/Lead Auditor

Training in accordance with

ISO 27001:2013,

and possesses an MSc in Digital Systems Security from the University

of Piraeus.

The Chief Information

Security Officer is

responsible

for assessing, managing

and mitigating cybersecurity

threats and for

reporting cybersecurity updates, including

updates on monitoring strategies

and efforts to

prevent cybersecurity threats,

to the board

of directors on

a quarterly basis

or more often

as needed. To

115

support

these

efforts,

the

cybersecurity

department

expanded

its

resources

2025,

finalizing

the

recruitment process for additional specialized personnel who

joined the team in early 2026.

Our management

team plays

a vital

role in

assessing and

managing the

Company's material

risks from

cybersecurity threats. The Chief Information Security

Officer leads our cybersecurity program, reporting to

the Digital Transformation Officer, who in turn

reports to the Chief

Executive Officer on matters

of strategic

importance. Additionally,

the Chief Information

Security Officer holds

biweekly meetings with

the CEO to

discuss emerging threats, ongoing security initiatives, and strategic

cybersecurity priorities.

The Chief

Information Security

Officer reports

to the

management team

on a

semi-annual basis,

presenting

major

cybersecurity

incidents

and

key

performance

indicators

the

company's

cybersecurity

posture. Additionally, the

Chief Information

Security Officer

reports to

the audit

committee on

a semi-annual

basis regarding

progress

on critical

cybersecurity initiatives,

results of

the company's

cybersecurity

maturity

level assessments, and updates on the implementation of our

cybersecurity strategy.

The

audit committee

receives regular

reports from

management

our cybersecurity

risks

addition,

management updates the audit committee, as

necessary, regarding

any material cybersecurity incidents,

well

any

incidents

with

lesser

impact

potential.

The

audit

committee

reviews

the

Company's

cybersecurity

risks

and

assess’

the

steps

that

management

has

taken

protect

against

threats

the

Company's information systems and security.

Our

board

directors

oversees

the

Company’s

cybersecurity

risk

exposures

and

the

steps

taken

management to

monitor and

mitigate cybersecurity

risks. The

board of

directors ensures

allocation and

prioritization of resources and

overall strategic direction for

cybersecurity and ensures alignment with

the

Company’s overall strategy.

Cybersecurity Threats

As of the

date of this

annual report, we

have not identified

any cybersecurity threats that

have materially

affected or are

reasonably likely

to materially

affect our business

strategy, results of operations,

or financial

condition. This assessment

is supported by

our proactive vulnerability management

program, successful

vessel audit schedule adherence, and the

lack of material breaches identified

during the fiscal year ended

December 31, 2025. For

more information about the

cybersecurity risks we face,

please see Item 3.

Key

Information — D. Risk Factors — “A cyber-attack could materially

disrupt our business.”

116

PART III

Item 17.

Financial Statements

See Item 18.

Item 18.

Financial Statements

The financial statements

required by this

Item 18 are

filed as a

part of this

annual report beginning

on page

F-1.

Item 19.

Exhibits

Exhibit

Number

Description

1.1

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

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

Company (18)

2.6

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

2.7

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

Preferred Stock of the Company (22)

2.8

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 February 2, 2024 (7)

4.2

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

(24)

4.8:

Brokerage Services Agreement, dated February 25, 2026

4.12:

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

(28)

4.13:

Loan Agreement dated July 25, 2024 with Nordea Bank ABP

(28)

4.14:

Loan Agreement dated September 29, 2025 with National Bank of Greece

4.21

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

Diana Shipping Services S.A. (11)

4.22

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

2015 (13)

4.47:

Right of First Refusal Agreement with OceanPal Inc.

(26)

4.48:

Amended and Restated Contribution and Conveyance Agreement with OceanPal Inc.

(26)

117

4.50:

Loan Agreement dated June 26, 2023 with DNB Bank ASA

(25)

4.52:

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

(25)

8.1

Subsidiaries of the Company**

10.5

Form of Management Agreement (9)

11.1

Amended Code of Ethics

(28)

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

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, 2025,

formatted in eXtensible

Business Reporting Language

(XBRL): (i) Consolidated

Balance Sheets as of December 31, 2025 and 2024; (ii) Consolidated Statements of Income for the

years ended December 31,

2025, 2024 and

2023; (iii) Consolidated

Statements of Comprehensive

Income for

the years

ended December

31, 2025,

2024 and

2023; (iv)

Consolidated Statements

Stockholders'

Equity

for

the

years

ended

December

31,

2025,

2024

and

2023;

(v)

Consolidated

Statements

Cash

Flows

for

the

years

ended

December

31,

2025,

2024

and

2023;

and

(v)

the

Notes to Consolidated Financial Statements

104

Cover Page Interactive Data File (formatted as Inline XBRL

and contained in Exhibit 101)

Filed herewith.

(1)

Filed as

Exhibit 99.2

to the

Company's Form

6-K filed

on November

15, 2023,

and incorporated

reference herein.

(2)

Filed as

Exhibit 99.3

to the

Company's Form

6-K filed

on November

15, 2023,

and incorporated

reference herein.

(3)

Filed

Exhibit

3.3

the

Company's

Form

8-A

filed

February

13,

2014,

and

incorporated

reference herein.

(4)

Filed as Exhibit 3.1 to the Company's Form 8-A12B/A filed on January 15, 2016, and incorporated by

reference herein.

(5)

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

incorporated by reference

herein.

(6)

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

incorporated by reference

herein.

(7)

Filed as Exhibit 4.1 to the Company's Form 8-A12B/A filed on February 2, 2024,

and incorporated by

reference herein.

(8)

Filed as an Exhibit to

the Company's Registration

Statement (File No. 123052)

on March 1, 2005, and

incorporated by reference herein.

(9)

Filed as

an Exhibit

to the

Company's Amended

Registration Statement

(File No.

123052) on

March

15, 2005, and incorporated by reference herein.

(10)

Filed as

Exhibit 1.1

to the

Company's Form

6-K filed

on September

9, 2024,

and incorporated

reference herein.

(11)

Filed

Exhibit

the

Company's

Annual

Report filed

Form

20-F

March

27,

2014,

and

incorporated by reference herein.

(12)

Reserved.

(13)

Filed

Exhibit

the

Company's

Annual

Report filed

Form

20-F

March

28,

2016,

and

incorporated by reference herein.

(14)

Reserved.

118

(15)

Reserved.

(16)

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

February 13, 2014, and incorporated by

reference herein.

(17)

Reserved.

(18)

Filed

Exhibit

the

Company’s

Form

6-K

filed

February

2019,

and

incorporated

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

Exhibit to

the

Company’s

Form

6-K filed

September

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

Exhibit to

the

Company’s

Annual

Report filed

Form

20-F

March

12,

2021,

and

incorporated by reference herein.

(25)

Filed

Exhibit

the

Company’s

Annual

Report

filed

Form

20-F

April

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

reference herein.

(28)

Filed

Exhibit to

the

Company’s

Annual Report

filed

Form 20-F

March

21,

2025,

and

incorporated by reference herein.

119

SIGNATURES

The registrant hereby certifies that it meets all of the requirements

for filing on Form 20-F and has duly

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

behalf.

DIANA SHIPPING INC.

/s/ Maria Dede

Maria Dede

Co-Chief Financial Officer and Treasurer

Dated: March 13, 2026

F-1

DIANA SHIPPING INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page

Report of Independent Registered Public Accounting Firm: Deloitte

Certified Public

Accountants S.A. (PCAOB ID No.

1163

)

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

F-2

Report of Independent Registered Public Accounting Firm on

Internal Controls Over

Financial Reporting: Deloitte Certified Public Accountants S.A.

(PCAOB ID No.1163)

.......

F-5

Report of Independent Registered Public Accounting Firm: Ernst

& Young (Hellas)

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

1457

)

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

F-7

Consolidated Balance Sheets as of December 31, 2025 and 2024

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

...

F-8

Consolidated Statements of Income for the years ended December

31, 2025, 2024 and

2023 ................................................................

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

F-9

Consolidated Statements of Comprehensive Income for the years

ended December 31,

2025, 2024 and 2023

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

.........

F-10

Consolidated Statements of Stockholders' Equity for the years

ended December 31,

2025, 2024 and 2023

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

.........

F-

Consolidated Statements of Cash Flows for the years ended December

31, 2025, 2024

and 2023 ................................

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

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

F-13

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

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

......

F-15

F-2

Report of Independent Registered Public Accounting Firm

the Shareholders and the Board of Directors of Diana Shipping

Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Diana

Shipping Inc. and subsidiaries

(the “Company”) as of December 31, 2025 and 2024,

the related consolidated statements

of income,

comprehensive income, stockholders’ equity, and cash flows, for each of the two years in the period

ended December 31, 2025,

and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2025 and 2024, and the results of its operations

and its cash flows for

each of the two years in the period ended December 31, 2025, in conformity

with accounting principles

generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting

Oversight

Board (United States) (PCAOB), the Company’s internal control over financial

reporting as of December

31, 2025, based on criteria established in Internal Control — Integrated

Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway Commission and our report

dated March 13,

2026, expressed an unqualified opinion on the Company’s internal control over financial

reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to

express an opinion on the Company’s financial statements based on our audits.

We are a public

accounting firm registered with the PCAOB and are required to be independent

with respect to the

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

the applicable rules and regulations of

the Securities and Exchange Commission

and the PCAOB.

We conducted our audits

in accordance with the standards of the PCAOB. Those standards

require that

we plan and perform the audit to obtain reasonable assurance about

whether the financial statements are

free of material misstatement, whether due to error or fraud.

Our audits

included performing procedures

to assess the risks of material misstatement of the financial statements,

whether due to error or fraud,

and performing procedures that respond to those risks. Such procedures

included examining, on a test

basis, evidence regarding the amounts and disclosures in the financial

statements. Our audits

also

included evaluating the accounting principles used and significant

estimates made by management, as

well as evaluating the overall presentation of the financial

statements. We believe that our audits

provide

a reasonable basis for our opinion.

F-3

Critical Audit Matter

The critical audit matter communicated below is a matter arising

from the current-period audit of the

financial statements that was communicated or required to be communicated

to the audit committee and

that (1) relates to accounts or disclosures that are material to the

financial statements and (2) involved

our especially challenging, subjective, or complex judgments. The communication

of critical audit matters

does not alter in any way our opinion on the financial statements,

taken as a whole, and we are not, by

communicating the critical audit matter below, providing a separate opinion on the critical audit

matter or

on the accounts or disclosures to which it relates.

Impairment of long-lived assets– Future Charter Rates for vessels

with impairment indicators –

Refer to Note 2 of the consolidated financial statements.

Critical Audit Matter Description

The Company’s evaluation of vessels held for use by the Company for impairment

involves an initial

assessment of each vessel to determine whether events or changes

in circumstances indicate that the

carrying amount of the vessel,

including its unamortized deferred costs, may not be recoverable. As

December 31, 2025, 10 out of 36 vessels held for use had impairment

indicators.

If impairment indicators exist, the Company compares undiscounted

projected net operating cash flows

to the carrying value of the respective vessel,

including its unamortized deferred costs, with impairment

indicators to determine if the vessel is required to be impaired.

When the Company’s estimate of

undiscounted projected net operating cash flows, excluding

interest charges, expected to be generated

by the use and eventual disposition of the vessel is less than its carrying

amount, the Company records

an impairment loss. Impairment loss is equal to the difference between

the vessel’s carrying value,

including its unamortized deferred costs and fair market value

The Company makes various assumptions and judgments to determine

the undiscounted projected net

operating cash flows expected to be generated over the remaining

useful life of the vessel, including

estimates and assumptions related to the future charter rates. Future charter

rates are the most

significant and subjective assumption that the Company uses

for its undiscounted projected net operating

cash flows. For periods of time where the vessels are not fixed under

time charter contracts, the

Company estimates the future daily time charter equivalent rate

(the “future charter rate”) for the vessels’

unfixed days based on the most recent 10-year average of historical

1 year time charter rates available

for each vessel class, as such averages take into account the volatility

and cyclicality of the market.

These assumptions are based on historical trends as well as future

expectations. Assumptions

are in line

with the Company’s historical performance and its expectations

for future fleet deployment strategy.

We identified future charter rates for vessels with impairment indicators used

in the undiscounted

projected net operating cash flows as a critical audit matter because of

the complex judgements made by

management to estimate them and the significant impact these estimates

have on the undiscounted

projected net cash flows expected to be generated over the remaining

useful life of the vessel.

This required a high degree of auditor judgment and an increased extent

of effort when performing audit

procedures to evaluate the reasonableness of management’s future charter

rates.

F-4

How the Critical Audit Matter Was

Addressed in the Audit

Our audit procedures related to the future charter rates for vessels

with impairment indicators used in the

undiscounted projected net operating cash flows included

the following, among others:

•

We tested the effectiveness of controls over management’s review

of the impairment analysis,

including the future charter rates used within the undiscounted projected

net operating cash flows.

•

We evaluated the Company’s methodology for estimating the

future charter rates utilized in the

undiscounted projected net operating cash flows by comparing

them to 1) the Company’s

historical rates, 2) historical rate information of similar size

vessels published by a third-party

broker and 3) other external market sources, including reports on

prospective market outlook.

●

We evaluated management’s ability to accurately forecast future

charter rates by comparing

actual results to management’s historical forecasts.

/s/

Deloitte Certified Public Accountants S.A.

Athens, Greece

March 13, 2026

We have served as the Company’s auditor since 2024.

F-5

Report of Independent Registered Public Accounting Firm

the Shareholders and the Board of Directors of Diana Shipping

Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Diana Shipping

Inc. and subsidiaries (the

“Company”) as of December 31, 2025, based on criteria established

in Internal Control - Integrated

Framework (2013) issued by the Committee of Sponsoring

Organizations of the Treadway Commission

(COSO).

In our opinion, the Company maintained, in all material respects,

effective internal control over

financial reporting as of December 31, 2025, based on criteria established

in Internal Control - Integrated

Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting

Oversight

Board (United States) (PCAOB), the consolidated financial statements

as of and for the year ended

December 31, 2025, of the Company and our report dated March 13,

2026,

expressed an unqualified

opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over

financial

reporting and for its assessment of the effectiveness of internal control over

financial reporting, included

in the accompanying “Management’s Annual Report on Internal Control over Financial

Reporting”. Our

responsibility is to express an opinion on the Company’s internal control

over financial reporting based on

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

to be independent

with respect to the Company in accordance with the U.S. federal

securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and

the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that

we plan and perform the audit to obtain reasonable assurance about

whether effective internal control

over financial reporting was maintained in all material respects.

Our audit included obtaining an

understanding of internal control over financial reporting, assessing

the risk that a material weakness

exists, testing and evaluating the design and operating effectiveness of

internal control based on the

assessed risk, and performing such other procedures as we considered necessary

in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to

provide reasonable

assurance regarding the reliability of financial reporting and the

preparation of financial statements for

external purposes in accordance with generally accepted accounting

principles. A company’s internal

control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance

of records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of the

assets of the company; (2) provide reasonable assurance that

transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally

accepted accounting principles,

and that receipts and expenditures of the company are being made only

in accordance with

authorizations of management and directors of the company;

and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of the company’s

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

F-6

Because of its inherent limitations, internal control over financial reporting

may not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periods

are subject to the

risk that controls may become inadequate because of changes in conditions,

or that the degree of

compliance with the policies or procedures may deteriorate.

/s/ Deloitte Certified Public Accountants S.A.

Athens, Greece

March 13, 2026

F-7

Report of Independent Registered Public Accounting Firm

the Stockholders and the Board of Directors of Diana

Shipping Inc.

Opinion on the Financial Statements

have

audited

the

accompanying

consolidated

statements

income,

comprehensive

income, stockholders'

equity

and

cash

flows

Diana

Shipping

Inc.

(the

Company)

for

the

year

ended

December

31,

2023,

and

the

notes (collectively

referred

the

“consolidated

financial

statements”). In

our opinion, the

consolidated financial statements

present fairly,

in all

material respects,

the

results

the

Company ‘s

operations and

its

cash flows

for the

year

ended December

31, 2023,

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

independent

with

respect

the

Company

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

material

misstatement,

whether

due

error

fraud.

Our

audits

included

performing

procedures

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

the

financial

statements.

Our

audit

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

management,

well

evaluating

the

overall

presentation

the

financial

statements.

believe

that

our

audit

provide

reasonable basis for our opinion.

/s/

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

We have served as the Company’s auditor from 2004 to 2023.

Athens, Greece

April 4, 2024

F-8

DIANA SHIPPING INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2025 and 2024

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

for share and per share data)

2025

2024

ASSETS

Current Assets

Cash and cash equivalents (Note 2 (e))

50,505

124,666

Time deposits (Note 2 (e))

63,500

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

53,750

Accounts receivable, trade (Note 2 (f))

3,739

6,565

Due from related parties (Note 4)

1,157

194

Inventories (Note 2 (g))

4,137

4,193

Prepaid expenses and other assets

8,828

7,490

Investments in equity securities (Note 5(b))

118,194

Investments in a related party, current (Note 5(a))

338

Equity method investment, current (Note 4 (b))

4,227

Total Current Assets

244,875

206,608

Fixed Assets:

Advances for vessels under construction (Note 6)

20,877

19,558

Vessels, net (Note 6)

777,938

833,412

Property and equipment, net (Note 7)

27,848

27,175

Total fixed assets

826,663

880,145

Other Noncurrent Assets

Restricted cash, non-current (Note 8)

18,000

19,000

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

155

Equity method investments (Note 4)

53,875

42,826

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

5(a))

4,415

Other non-current assets

Deferred costs

26,748

17,838

Total Non-current Assets

925,317

964,410

Total Assets

1,170,192

1,171,018

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Long-term debt, current, net of deferred financing

costs (Note 8)

50,281

45,230

Finance liabilities, current (Note 9)

10,041

9,608

Accounts payable

10,611

8,990

Due to related parties (Note 3)

190

Accrued liabilities

13,444

11,896

Deferred revenue

4,970

4,235

Fair value of derivatives (Note 2 (bb) 8)

144

Total Current Liabilities

89,580

80,180

Non-current Liabilities

Long-term debt, net of current portion and deferred

financing costs (Note 8)

472,528

469,387

Finance liabilities, net of current portion (Note 9)

103,259

113,300

Fair value of derivatives (Note 8)

217

134

Warrant liability (Note 11(h))

1,330

1,802

Other non-current liabilities

865

1,158

Total Noncurrent Liabilities

578,199

585,781

Commitments and contingencies (Note 10)

Stockholders' Equity

Preferred stock (Note 11)

Common stock, $

0.01

par value;

1,000,000,000

shares authorized and

115,787,434

and

125,203,405

issued and outstanding on December 31, 2025,

and 2024, respectively

(Note 11)

1,158

1,252

Additional paid-in capital

1,126,049

1,139,363

Accumulated other comprehensive income

3,648

312

Accumulated deficit

(628,468)

(635,896)

Total Stockholders' Equity

502,413

505,057

Total Liabilities and Stockholders' Equity

1,170,192

1,171,018

The accompanying notes are an integral part of

these consolidated financial statements.

F-9

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF INCOME

For the years ended December 31, 2025, 2024 and 2023

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

2025

2024

2023

REVENUES:

Time charter revenues

213,541

228,209

262,098

OPERATING EXPENSES

Voyage expenses

12,417

13,607

13,621

Vessel operating expenses (Note 3)

80,244

82,587

85,486

Depreciation and amortization of deferred charges

46,525

44,691

49,785

General and administrative expenses (Note 3)

34,099

33,435

32,968

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

1,191

1,332

1,313

Gain on sale of vessels (Note 3 and 6)

(3,663)

(5,799)

(5,323)

Other operating loss/(income)

538

(422)

(1,464)

Operating income, total

42,190

58,778

85,712

OTHER INCOME/(EXPENSE)

Interest expense and finance costs (Note 12)

(42,951)

(47,468)

(49,331)

Interest and other income

7,505

8,369

8,170

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

(196)

274

(439)

Loss on extinguishment of debt (Note 8)

(3,475)

(748)

Gain on deconsolidation of subsidiary (Note 4 (b))

844

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

(1,072)

(3,905)

1,502

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

14,671

(400)

2,813

Gain on warrants (Note 11(h))

490

719

1,583

Loss from equity method investments (Note 4)

(2,810)

(146)

(262)

Total other expenses, net

(24,363)

(46,032)

(35,868)

Net income

17,827

12,746

49,844

Dividends on series B preferred shares (Notes 11(b) and 13)

(5,769)

Net income attributable to common stockholders

12,058

6,977

44,075

Earnings per common share, basic

(Note 13)

0.11

0.06

0.44

Earnings per common share, diluted

(Note 13)

0.11

0.05

0.42

Weighted average number of common shares outstanding,

basic

(Note 13)

110,459,096

115,956,249

100,166,629

Weighted average number of common shares outstanding,

diluted

(Note 13)

110,497,640

118,655,243

101,877,142

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

F-10

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

For the years ended December 31, 2025, 2024 and 2023

(Expressed in thousands of U.S. Dollars)

2025

2024

2023

Net income

17,827

12,746

49,844

Other comprehensive income - Defined benefit plan

Currency translation adjustment

3,313

Other comprehensive income

3,336

Comprehensive income

21,163

12,750

49,899

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

F-

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF STOCKHOLDERS’ EQUITY

For the years ended December 31, 2025, 2024

and 2023

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

for share data)

Preferred Stock

Series B

Preferred Stock

Series C

Preferred Stock

Series D

Common Stock

Additional

Paid-in

Capital

Other

Comprehe

nsive

Income

Accumulated

Deficit

Total

Equity

# of Shares

Par

Value

# of

Par

Value

# of

Par

Value

# of Shares

Par

Value

BALANCE,

December

31, 2022

2,600,000

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

9,920

9,938

Issuance of common

stock (Note 11(f))

6,628,493

22,780

22,846

Issuance of common

stock for vessel

acquisitions (Note

11(e))

2,033,613

7,710

7,730

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

BALANCE,

December

31, 2023

2,600,000

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

9,989

10,012

Issuance of Common

Stock (Note 11(h))

9,837,680

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) (Note 11(f))

(29,004)

F-12

Other Comprehensive

Income

BALANCE,

December

31, 2024

2,600,000

10,675

400

125,203,405

1,252

1,139,363

312

(635,896)

505,057

Net income

17,827

Issuance of Restricted

Stock and

Compensation Cost

(Note 11(i))

2,000,000

9,585

9,605

Issuance of Common

Stock (Note 11(h))

26,674

Stock repurchased and

retired (Note 11(e))

(11,442,645)

(114)

(22,934)

(23,048)

Dividends on series B

preferred stock

2.21875

per share)

(Note 11(b))

(5,769)

Dividends on common

stock ($

0.04

per share)

(Notes 11(f))

(4,630)

Other Comprehensive

Income

3,336

BALANCE,

December

31, 2025

2,600,000

10,675

400

115,787,434

1,158

1,126,049

3,648

(628,468)

502,413

The accompanying notes are an integral part of

these consolidated financial statements.

F-13

DIANA SHIPPING INC.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

For the years ended December 31, 2025, 2024 and 2023

(Expressed in thousands of U.S. Dollars)

2025

2024

2023

Cash Flows from Operating Activities:

Net income

17,827

12,746

49,844

Adjustments

reconcile

net

income

cash

provided

operating

activities

Depreciation and amortization of deferred charges

46,525

44,691

49,785

Amortization of debt issuance costs (Note 12)

2,139

2,372

2,620

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

9,605

10,012

9,938

Dividend income

(3)

Pension and other postretirement benefits

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

196

(274)

439

Gain on sale of vessels (Note 6)

(3,663)

(5,799)

(5,323)

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

1,072

3,905

(1,502)

Loss on extinguishment of debt

3,475

748

Gain on deconsolidation of subsidiary

(844)

Loss from equity method investments, net of dividend (Note 4)

2,830

146

262

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

(14,671)

400

(2,813)

Gain on warrants (Note 11(h))

(490)

(719)

(1,583)

(Increase) / Decrease

Accounts receivable, trade

2,826

(695)

256

Due from related parties

(808)

119

(252)

Inventories

863

(511)

Prepaid expenses and other assets

(1,379)

1,247

(1,950)

Other non-current assets

Investments in equity securities

20,329

(17,916)

Increase / (Decrease)

Accounts payable

1,621

(673)

(1,761)

Due to related parties

(101)

(569)

(57)

Accrued liabilities

1,548

(520)

282

Deferred revenue

735

672

(4,195)

Other non-current liabilities

(293)

(158)

437

Drydock cost

(18,091)

(8,044)

(5,646)

Net Cash Provided by Operating Activities

47,507

83,530

70,380

Cash Flows from Investing Activities:

Payments

for

vessels

under

construction

and

vessel

improvements

(Note 6)

(1,502)

(20,516)

(29,732)

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

22,975

35,154

36,560

Return of capital from equity method investment (Note 4)

3,505

Payments to acquire investments (Note 4 and 5 (b))

(121,821)

(27,203)

(10,595)

Proceeds from sale of investments (Note 4 and 5 (a))

3,005

Time deposits (Note 2 (c))

63,500

(23,500)

6,500

Payments to acquire other assets

(216)

Cash divested from deconsolidation

(771)

Proceeds from convertible loan with limited partnership

25,189

Payments to acquire property, furniture and fixtures (Note 7)

(1,671)

(3,718)

(2,006)

Net Cash Provided by/(Used in) Investing Activities

(32,009)

(39,783)

24,929

Cash Flows from Financing Activities:

Proceeds from issuance of long-term debt and finance

liabilities (Note

55,000

117,150

57,696

Proceeds from issuance of common stock, net of fees (Note 11(h))

24,195

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))

(4,630)

(29,004)

(41,427)

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

(23,048)

Payments of financing costs (Notes 8 and 9)

(348)

(5,238)

(1,724)

Repayments of long-term debt and finance liabilities (Notes 8 and 9)

(58,207)

(123,007)

(79,842)

Net Cash Used in Financing Activities

(36,909)

(21,673)

(71,145)

Cash,

Cash

Equivalents

and

Restricted

Cash,

Year

Increase/(Decrease)

(21,411)

22,074

24,164

Cash, Cash Equivalents and Restricted Cash, Beginning Balance

143,666

121,592

97,428

Cash, Cash Equivalents and Restricted Cash, Ending Balance

122,255

143,666

121,592

F-14

RECONCILIATION OF CASH, CASH EQUIVALENTS

AND RESTRICTED CASH

Cash and cash equivalents

50,505

124,666

101,592

Restricted cash, current

53,750

Restricted cash, non-current

18,000

19,000

20,000

Cash, Cash Equivalents and Restricted Cash, Total

122,255

143,666

121,592

SUPPLEMENTAL CASH FLOW INFORMATION

Non-cash acquisition of assets

7,809

Stock issued in noncash financing activities

3,852

7,809

Non-cash investments acquired

10,000

Noncash dividend

41,521

Interest paid, net of amounts capitalized

41,505

46,257

46,473

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

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-15

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

March 8, 1999

Diana

Shipping

Investment

Corp.,

under

the

laws

the

Republic

Liberia.

February

2005,

the

Company’s

articles

incorporation

were

amended.

Under

the

amended

articles

incorporation,

the

Company

was

renamed

Diana

Shipping

Inc.

and

was

re-domiciled

from

the

Republic

Liberia

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,

DWM,

owned

joint

venture

(Note

4(a)).

The

fees

paid

DSS

are

eliminated

upon

consolidation.

Significant Accounting Policies and Recent Accounting Pronouncements

Principles

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

entity

meets

the

definition

variable

interest

entity

("VIE")

for

which

the

Company is deemed to be the primary

beneficiary under the VIE model, or if

the Company controls

entity

through

majority

voting

interest

based

the

voting

interest

model.

The

Company

evaluates

financial

instruments,

service

contracts,

and

other

arrangements

determine

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

risk

sufficient

finance

its

activities

without

additional

subordinated

financial

support

and

whether the entity’s at-risk equity holders

have the characteristics of controlling financial interest. In

performing

analysis

whether

the

Company

the

primary

beneficiary

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.

Use

Estimates:

The

preparation

consolidated

financial

statements

conformity

with

U.S.

generally accepted accounting

principles requires management

to make estimates and

assumptions

that

affect

the

reported

amounts

assets

and

liabilities,

the

disclosure

contingent

assets

and

liabilities at

the date of

the financial

statements, and

the reported

amounts of

revenues and

expenses

during the reporting period. Actual results may differ from those estimates.

Other

Comprehensive

Income:

The

Company

records

certain

transactions

directly

within

stockholders’

equity

when

required

U.S.

GAAP

and

presents

them

separately

from

results

operations.

Other

comprehensive

income/(loss)

reported

separate

statement

comprehensive income

and includes

items that

are not

recognized in

net income.

The Company’s

components

other

comprehensive

income/(loss)

include

translation

adjustments

arising

from

equity method investments whose

functional currency is

not the US

Dollar,

and actuarial gains and

losses and other adjustments related to the Company’s defined benefit plan.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-16

Foreign Currency Translation:

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

the

Company’s

vessels operate

international shipping

markets,

and therefore

primarily transact

business

U.S.

dollars.

The

Company’s

accounting

records

are

maintained

U.S.

dollars.

Transactions

involving

other

currencies

during

the

year

are

converted

into

U.S.

dollars

using

the

exchange rates in effect at

the time of the

transactions. At the balance

sheet dates, monetary assets

and liabilities which are denominated in other currencies are translated into U.S. dollars at the year-

end exchange rates.

Resulting gains or losses

are included in other

operating income/ (loss) in

the

accompanying consolidated statements of income.

Cash,

Cash Equivalents,

Time

Deposits and

Restricted Cash:

The Company

considers highly

liquid investments, such as time

deposits, certificates of deposit

and similar instruments with

original

maturities

three

months

less,

cash

equivalents.

Time

deposits

with

original

maturities

greater than three months are

presented separately as time deposits.

As of December 31, 2025

and

2024, time deposits with original maturities greater than three months amounted to $

and $

63,500

respectively. During 2025 and 2024, the

Company placed new time deposits with maturities greater

than

three

months

20,000

and

63,500

respectively,

and

deposits

83,500

and

40,000

respectively,

matured.

Restricted

cash

primarily

consists

cash

balances

that

the

Company

required

maintain

under

its

loan

facilities

(Note

compensating

cash

balances.

These

restricted amounts are not available for general use but

are not pledged as collateral. In addition, as

December

31,

2025,

restricted

cash,

current

amounting

53,750

consists

loan

proceeds

drawn during the

year maintained in

a pledged account

in order to

reduce the loan’s

margin (Note 8).

Accounts Receivable,

Trade:

Accounts receivable,

trade, consist of

receivables from charterers

for

hire earned

under operating

lease agreements,

net of

provisions for

doubtful accounts,

if any. At

each

balance

sheet

date,

the

Company

evaluates

all

outstanding

receivables

individually

assess

whether collection is

probable. If collection

of a

receivable is not

probable, the

Company records a

provision

for

doubtful

accounts

reduce

the

carrying

amount

the

receivable

the

amount

expected to be collected. Receivables that are determined to be uncollectible are written off against

the

provision

for

doubtful

accounts

(if

one

exists)

directly

expense

when

identified.

December 31, 2025 and 2024 there was

provision for doubtful accounts. The Company does not

recognize interest income on trade receivables as all balances are

settled within a year.

Inventories:

Inventories consist

of lubricants,

victualing stores,

and, when

applicable, bunkers

board vessels that

are not under employment

at the balance

sheet date. Inventories are

measured

the

lower

cost

net

realizable

value,

accordance

with

ASC

330.

Net

realizable

value

represents the estimated

selling price in

the ordinary course

of business, less

reasonably predictable

costs of disposal and transportation. When

evidence indicates that net realizable

value is lower than

cost, the difference is

recognized as a loss

in earnings in

the period identified.

Inventory write-downs

are not reversed

in subsequent

periods. Cost

is determined

using the first-in,

first-out method

(FIFO).

Amounts removed from inventory are also determined by the

first-in, first-out method.

Vessel

Cost

: Vessels

are stated

at cost

which consists

of the

contract price

and any

capitalizable

expenditures

incurred

upon

acquisition

during

construction,

less

accumulated depreciation

and

impairment, if any. Expenditures for conversions and major improvements

are also capitalized when

they appreciably extend the life, increase the

earning capacity or improve the efficiency

or safety of

the vessels; otherwise,

these amounts are charged to expense as incurred. Interest incurred

during

the

assets'

construction

period,

that

theoretically

could

have

been

avoided

expenditure

for

the

assets

had

not

been

made,

also

capitalized.

The

capitalization

rate,

applied

accumulated

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-17

expenditures for

the vessel,

is based

on interest

rates applicable

to outstanding

borrowings of

the

period.

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

asset held for

sale is assessed

at each reporting period

it remains classified as

held for sale.

If the

plan to sell the

asset changes, the asset is

reclassified as held and used,

measured at the lower of

its carrying amount

before it was

classified as held

for sale,

adjusted for any

depreciation expense

that would have been

recognized had the asset

been continuously classified as

held and used and

its fair value at the date of the

subsequent decision not to sell. As of December 31,

2025 and 2024,

none of the Company’s vessels met the criteria to be classified as held

for sale.

Sale

and

leaseback:

The

Company

accounts for

sale

and

leaseback transactions

accordance

with ASC

842-40. As

seller-lessee, the

Company first

evaluates whether

the transfer

of the

vessel

qualifies as a sale under

ASC 606. For a sale

to have occurred, the control

of the vessel would need

to be transferred to the

buyer and the buyer would need

to obtain substantially all the benefits

from

the use of the asset. Sale and

leaseback transactions, which include

an obligation for the Company,

seller-lessee,

repurchase

the

vessel,

other

situations

where

the

leaseback

would

classified as a finance

lease are determined

to be failed sales

under ASC 842-40.

In such cases,

the

Company does not derecognize the vessel

from its balance sheet. The

proceeds received from the

buyer-lessor are

recognized as

a financial

liability,

which is

subsequently measured in

accordance

with

the

applicable

guidance

for

such

liabilities.

gain

loss

recognized

the

time

the

transaction, and the vessel continues to be depreciated over its remaining

useful life.

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

55 years

with

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.

Impairment of

Long-Lived Assets:

Long-lived assets

are reviewed

for impairment

whenever events

changes

circumstances

(such

market

conditions,

obsolescence

damage

the

asset,

potential sales and

other business plans)

indicate that the

carrying amount of

an asset may

not be

recoverable.

For

impairment

testing

purposes,

each

vessel

together

with

its

associated

deferred

costs is

considered a

single asset

group. When

impairment indicators are

identified, the

Company

compares

the

carrying

amount

the

asset

group

with

the

estimated

undiscounted

projected

net

operating cash flows expected to result from the use

of the asset group over its remaining useful

life

and its

eventual disposition.

If the

carrying amount

exceeds the

undiscounted cash

flows, the

carrying

amount

the

asset

group

considered

not

recoverable

and

written

down

its

fair

value,

determined primarily through third-party valuations.

For

vessels,

the

Company

estimates

undiscounted

net

operating

cash

flows

considering

the

historical and projected vessel performance and utilization.

A significant assumption in this analysis

is the

estimate of

future time

charter rates

for the

unfixed days,

using the

most recent

-year average

historical 1

year time

charter rates,

net of

commissions, available

for each

vessel class.

These

estimated time charter rates reflect

the Company’s chartering strategy,

vessel operating history per

vessel class

and at least one

full shipping cycle, where

applicable. When a full

-year history is not

available,

the average

1 year

time charter

rate of

the available

period is

used.

Additional assumptions

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-18

include contracted charter rates

for fixed days

based on existing time

charter contracts,

anticipated

vessel

operating

expenses,

scheduled

vessel

maintenance

costs,

fleet

utilization

levels,

and

estimated

residual

values

based

scrap

rates.

Assumptions

are

line

with

the

Company’s

historical

performance

and

its

expectations

for

future

fleet

utilization

under

its

current

fleet

deployment strategy.

The undiscounted

projected net

operating cash

flows are

compared with

the

carrying

amount

the

vessel,

including

its

unamortized

deferred

costs.

the

carrying

amount

exceeds the undiscounted cash flows, the vessel is written down to its fair value, and

the difference

is recognized as an impairment loss.

During

2025,

2024

and

2023,

impairment

loss

was

identified

recorded

for

the

Company’s

vessels.

For

the

Company’s

building,

recoverability

assessed

comparing

the

carrying

amount

undiscounted

projected

cash

flows,

which

are

estimated

based

the

market

rent

the

Company

would

expect

pay

lease

comparable

premises

over

the

building’s

remaining

useful

life.

impairment

loss

was

identified

recorded

for

2025,

2024

and

2023

and

the

Company

has

not

identified

any

facts

circumstances that

would require

the

write

down

the

value

its

land

building.

Vessel Depreciation:

Depreciation is calculated

using the

straight-line method over

the estimated

useful life of

the vessels, after

considering the estimated

salvage (scrap) value.

The salvage value

vessel

estimated

the

product

its

lightweight

tonnage

and

the

applicable

scrap

value.

Management estimates

the useful

life of

the Company’s vessels

to be

25 years

from the date

of initial

delivery from

the shipyard.

Second-hand vessels are

depreciated from the

date of

their acquisition

through their

remaining estimated

useful life.

When newly

adopted regulations

restrict the

vessel’s

ability to trade on a worldwide basis, the vessel’s remaining useful life is revised as of the date such

regulations

are

adopted.

Effective July 1, 2023, the Company reassessed the scrap rate used in

determining salvage values. Based on the average demolition prices across major markets during

the preceding 15 years, the Company increased the estimated scrap rate. This change in estimate

resulted in higher salvage values,

lower depreciation expense and higher operating income. For the

period from July

1, 2023

to December 31,

2023, net

income and basic

and diluted

earnings per share

increased by $

3,773

and $

0.04

, respectively.

Deferred Costs

: The

Company follows

the deferral

method of

accounting for

dry-docking and

special

survey costs. Under

this method, actual

costs incurred are

capitalized and amortized on

a straight-

line basis

over the

period through the

date the

next scheduled

survey is

expected to

become due.

Unamortized deferred

dry-docking or

special survey

costs related

to vessels

that are

sold or

impaired

are written off

and included in

the determination of the

gain or loss

on the vessel’s

sale (Note 6)

impairment.

Financing

Costs

Fees

and

costs

incurred

connection

with

obtaining

new

loans,

refinancing

existing loans, issuing bonds, or amending existing debt agreements

are deferred and presented as

a contra-liability to

the related debt

in accordance with

ASC 835-30. These

amounts are amortized

interest and

finance costs

over

the

life

of the

related financing

arrangement using

the

effective

interest

method.

Fees

paid

for

undrawn

loan

facilities

are

deferred

and

are

amortized

straight-line basis over the commitment period, which approximates the effective

interest method. If

a debt

transaction is

accounted for

as a

debt extinguishment under

ASC 470-50,

any unamortized

deferred

financing

costs

the

repaid

extinguished

debt

are

written

off

the

period

extinguishment and included

in gain/loss on

debt extinguishment. If

a refinancing is

accounted for as

a modification,

unamortized fees

continue to

be amortized

over the

revised term

of the

debt. Loan

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-19

commitment fees

are expensed

as incurred

unless they

relate to

financing obtained

for vessels

under

construction,

which

case

they

are

capitalized

part

the

vessels’

construction

cost

accordance with ASC 835-20.

Accounting for

Revenues and

Expenses:

The Company

enters into

short-

to medium-term

time

charter agreements, under which

the charterer pays a

fixed daily rate. Charter

hire is usually paid

days in

advance. Revenues

from time

charter agreements

constitute operating

leases under

ASC

842. A time charter contract contains a lease because (i) each vessel is an

identifiable asset, (ii) the

owner of the vessel does not have substantive

substitution rights, and (iii) the charterer

has the right

to control the

use of the

vessel during

the charter period

and obtains substantially

all of the

economic

benefits from

such

use. Each

time

charter agreement,

including consecutive

agreements with

the

same charterer,

is accounted for

as a separate

lease. The lease term

includes the non-cancellable

period

the

charter

plus

any

charterer

extension

options

that

the

Company

concludes

are

reasonably certain to be exercised. Under a time charter,

the charterer pays a daily hire rate for the

use

the

vessel

and

reimburses

the

owner

the

vessel

for

hold

cleanings,

extra

insurance

premiums for

trading in

restricted areas,

and charterer-caused

damages.

Time

charter revenue

recognized as

operating lease income

on a

straight-line basis over

the lease

term, as

the services

are provided. The Company elected the lessor practical expedient under

ASC 842-10-15-42A not to

separate the lease

and non-lease components (such

as operation and maintenance

of the vessel),

because the timing and

pattern of transfer are

the same, and the

lease component is predominant.

Charterers typically

pay port

charges, canal

expenses and

bunkers directly

third

parties. When

such costs are

for the

Company’s account,

they are

recorded in

voyage expenses.

Voyage expenses

also

include

commissions

time

charter

revenues

and

gains

losses

arising

from

bunkers

redelivery and

delivery of

vessels between

consecutive

time charters.

The Company

may earn

ballast

bonus when

a charterer

reimburses the

Company for

repositioning a

vessel. The

Company evaluates

each contract

to determine

whether the

bonus is

part of

the lease

consideration (recognized

on a

straight-line basis

over the

lease term)

or represents

a separate

service component

accounted for

under ASC 606,

recognized when the repositioning

service is performed. The

Company,

as lessor,

bears

the

costs

operating

and

maintaining

the

vessel,

including

crew,

insurance,

spares

and

repairs,

which are

recorded as

vessel operating

expenses. Deferred

revenue represents

amounts

collected

advance

providing

services

under

time

charter

agreements

and

recognized

revenue as the related services are performed.

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.

Earnings / (loss)

per Common Share:

Basic earnings /

(loss) per common

share is computed

dividing net

income /

(loss) available

to common

stockholders by

the weighted

average number

common

shares outstanding

during

the

year.

Shares that

are

contingently issuable

for

little

cash consideration are included in basic earnings / (loss) per

share as of the date that all necessary

conditions have been

satisfied. Diluted

earnings per common

share reflects the

potential dilution

that

could occur if securities or other contracts to issue common stock

were exercised.

Segmental Reporting:

The Company operates under one reportable segment, the operation of dry

bulk

vessels. The

Company’s management,

including its

Chief

Executive Officer,

who is

the

chief

operating decision

maker (“CODM”),

reviews operating

results solely

by the

consolidated revenue

and consolidated

operating results

of the

fleet. The

CODM does

not use

discrete financial

information

to evaluate the

operating results for each type

of charter or vessel

but is instead regularly

provided

with only the consolidated expenses as noted on

the face of the consolidated statements of income.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-20

The measure of segment assets is reported

on the balance sheet as total consolidated assets.

The

CODM

assesses

performance

for

the

vessel

operations

segment

and

decides

how

allocate

resources based

on consolidated

net income.

Net income

is used

to monitor

budget versus

actual

results

the

Company.

The

Company’s

consolidated financial

results

are

used

assessing

the

performance of the

segment and in

deciding whether

to reinvest profits

in the Company. Additionally,

the vessels do not

operate in specific geographic areas,

as they trade worldwide;

they do not trade

specific

trade

routes,

their

trading

(route

and

cargo)

dictated

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

making

decisions

about

allocating

resources

and

assessing

performance.

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.

Based

Payments:

The

Company

grants

restricted

awards,

which

are

classified

equity awards under ASC 718.

Restricted share awards are measured at

their grant-date fair value

and

are

not

subsequently

re-measured.

The

compensation

cost

recognized

straight-line basis over

the requisite service

period (generally the

vesting period), which

represents

the

period

during

which

the

employees

must

provide

service

order

earn

the

awards.

compensation cost

is recognized

for awards for

which employees

do not render

the requisite service,

unless otherwise

determined by

the Board

of Directors.

Forfeitures of

awards are

accounted for

when

and if they occur. If an equity award is modified after the grant date, incremental compensation cost

will be recognized in an amount equal to the excess of the

fair value of the modified award over the

fair value of the original award

immediately before the modification. Compensation expense related

share-based payments

recorded

general

and

administrative expenses

the

consolidated

statements of income.

Equity method

investments:

Investments in

entities in

which the

Company has

significant influence,

but does

not control,

are accounted

for under

the equity

method of

accounting in

accordance with

ASC 323. Significant

influence is generally

presumed to exist

when the Company

owns 20% or

of the voting

interests, unless

such influence can

be clearly demonstrated

not to exist.

Equity method

investments

are

initially

recorded

cost

(or

fair

value

such

measurement

results

from

deconsolidation

event)

and

are

subsequently

adjusted

reflect

the

Company’s

the

investee’s earnings

or losses

after the

date of

acquisition. The

Company records

its share

of investee

earnings or losses in

income/(loss) from equity method investments

in the consolidated statements

of income.

Dividends received,

if any, reduce

the carrying

amount of

the investment

and are

recorded

as receivables when declared.

When the Company’s share

of losses reduces

the carrying amount

an equity method

investment to zero,

the Company ceases

recognizing additional losses,

unless it

has committed

to provide

further financial

support to

the investee.

The Company

evaluates equity

method investments for impairment whenever events or changes

in circumstances indicate that the

carrying amount

may not

be recoverable.

Evidence of

a loss

in value

might include

absence of

ability

recover

the

carrying

amount

the

investment

inability

the

investee

sustain

earnings

capacity

that

would

justify

the

carrying

amount

the

investment.

the

fair

value

investment

declines

below

its

carrying

value

and

the

decline

determined

other

than

temporary,

the investment is

written down to

its fair value

and the impairment

loss is recognized

earnings. For

equity method

investments for

which the

Company has

elected the

fair value

option

under ASC 825, the investment is measured at fair value, and subsequent changes in fair value are

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-21

recognized in gain/(loss) on related party

investments in the consolidated statements

of income. For

investees whose

functional currency

is not

the U.S.

dollar,

the

Company records

foreign currency

translation

adjustments

arising

from

its

the

investee’s

equity

other

comprehensive

income/(loss) as part of the cumulative translation adjustment.

Shares repurchased

and retired:

The Company’s

common shares

repurchased are

immediately

cancelled

and

the

Company reduces

its

share capital

the

par

value

the

shares retired.

The

excess of the

repurchase cost of the

shares over par value

is recorded as a

reduction of additional

paid-in capital, in accordance with ASC 505-30-30, Treasury Stock.

Financial Instruments, credit

losses

: The

Company evaluates its

financial assets

individually for

credit losses and presents such assets in the net amount expected to be collected on such financial

asset. When financial assets present similar risk characteristics, these are evaluated on a collective

basis.

When

developing

estimate

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.

credit losses

were identified

and recorded in 2025, 2024 and 2023.

Financial

Instruments,

Investments

Equity

Securities

Equity

investments

with

readily

determinable fair values

are initially recognized

at transaction price

and subsequently measured

fair

value

with

changes

fair

value

recognized

net

income,

accordance

with

ASC

321.

For

equity

securities

without

readily

determinable

fair

value,

the

Company

has

elected

the

measurement alternative

in ASC

321-10-35-2, under

which such

investments are

carried at

cost, less

impairment, and adjusted

for observable price

changes in orderly transactions

for the identical

or a

similar investment of

the same issuer.

When observable price

changes occur,

the carrying amount

adjusted

fair

value

the

date

the

transaction,

with

the

corresponding

gain

loss

recognized

earnings. At

each

reporting

date,

the

Company

reassesses

whether

investment

continues

qualify

for

the

measurement

alternative.

The

Company

may

irrevocably

elect

subsequently measure

an equity security

at fair value,

with changes

recognized in earnings,

at which

point the investment is

no longer eligible for

the measurement alternative. The

Company evaluates

equity securities

measured under

the measurement

alternative for

impairment whenever

events or

circumstances

indicate

that

the

investment’s

fair

value

may

less

than

its

carrying

amount.

Indicators

impairment

include,

but

are

not

limited

to,

significant

deterioration

the

investee’s

financial condition, adverse

changes in its

industry or market environment,

or a decline

in its ability

continue

going

concern.

impairment

identified,

the

Company

estimates

the

investment’s fair value, and

any difference between the

carrying amount and

fair value is recognized

as an impairment loss in earnings.

Contracts

entity’s

equity:

The

Company

evaluates

contracts

that

may

settled

the

Company’s

common

shares,

including warrants

and

pre-funded

warrants, under

the

guidance of

ASC 480 and ASC 815-40

to determine whether such instruments should be

classified as equity or

liabilities.

The

Company

first

assesses

whether

the

contract

within

the

scope

ASC

480,

including

instruments

that

are

mandatorily

redeemable,

require

the

issuer

repurchase

its

own

shares for cash, or embody an

unconditional obligation to deliver

cash. Instruments within the scope

ASC

480

are

classified

liabilities.

ASC

480

does

not

require

liability

classification,

the

Company evaluates

the instrument

under ASC

815-40. The

Company considers

whether the

contract

(i)

indexed

the

Company’s

own

stock

and

(ii)

meets

the

equity

classification

criteria

ASC

815-40-25. These

criteria require,

among other

things, that

the Company

has sufficient

authorized

and

unissued

available

for

settlement;

settlement

unregistered

permitted;

the

contract

contains

fixed

explicitly

limited

number

for

settlement;

there

are

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-22

requirements

for

net

cash

settlement

under

any

circumstances

outside

the

Company’s

control,

including failure to make

SEC filings; and there

are no cash-settled top-off,

penalty,

or make-whole

provisions.

Instruments

that

meet

both

the

indexation

and

equity

classification

conditions

are

classified in

equity.

Instruments that

not meet

these

criteria

are

classified as

liabilities and

are

remeasured

fair

value

through

earnings

each

reporting

date.

assessing

warrants

and

pre-funded warrants,

the Company

also analyzes

whether the

instruments meet

the definition

of a

derivative under

ASC 815

and whether

any embedded

features would

require bifurcation.

If derivative

accounting is not required and the criteria for equity classification are met, the warrant

is accounted

for

equity-classified instrument,

and

bifurcation of

embedded features

performed. For

warrants classified as liabilities, subsequent changes in fair value are

recognized in earnings.

aa)

Guarantees:

Guarantees issued by

the Company,

other than those

that guarantee the

Company’s

own

performance,

are

recognized

fair

value

the

time

the

guarantee

issued,

upon

the

deconsolidation of a subsidiary. The initial fair value

represents the obligation

undertaken to perform

under the guarantee.

After initial recognition,

the guarantee liability

is subsequently amortized

over

the

term

the

guarantee

until

extinguished. If,

any

time,

becomes

probable

that

the

Company will

be required

to perform

under a

guarantee and

the amount

of the

loss is

reasonably

estimable, the Company will record an additional liability,

recognized separately from the guarantee

liability. Certain guarantees are excluded from the initial

fair value recognition requirement,

including

parent’s

guarantee of

subsidiary’s

debt to

a third

party when

both entities

are under

common

control. For

such guarantees,

no liability

is recorded

and the

Company provides

disclosures

regarding

the nature and terms of the guarantee.

bb)

Derivative instruments:

Derivative instruments

are recognized on

the consolidated balance

sheets

either assets

liabilities measured

fair

value.

Changes in

the

fair

value

derivative are

recognized either in other comprehensive income (“OCI”),

to the extent the derivative

is designated

and qualifies

as a

hedging instrument,

or in

earnings if

hedge accounting

is not

applied. The

Company

has not

designated any

derivative instruments

as hedging

instruments under

ASC 815.

Derivative

assets and liabilities are not

offset unless the requirements

for offsetting under ASC 210-20

are met.

New Accounting Pronouncements

In November

2024, the

FASB

issued

ASU 2024-03, “Income

Statement

Reporting

Comprehensive

Income

Expense

Disaggregation

Disclosures

(Subtopic 220-40):

Disaggregation

Income

Statement

Expenses”.

The

standard

intended

require

detailed

disclosure

about

specified

categories

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

permitted.

The

amendments may be

applied

either

prospectively

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.

July

2025,

the

FASB

issued

ASU

No.

2025-05,

“Financial

Instruments—Credit

Losses

(Topic

326):

Measurement of Credit Losses

for Accounts Receivable

and Contract Assets”. The

ASU 2025-05 provides

a practical expedient

that all entities

may elect to

use when estimating

expected credit losses for

current

accounts receivable and current

contract assets arising from

transactions accounted for

under ASC 606,

Revenue from

Contracts with

Customers, by

allowing them

assume that

current conditions

as of

the

balance sheet date will not change for the remaining life of the asset. ASU 2025-05 is effective for annual

reporting periods beginning after

December 15, 2025, and

interim reporting periods within

those periods,

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-23

with early

adoption permitted.

The Company

is currently

evaluating the

impact that

the adoption

of ASU

2025-05 will have on its consolidated financial statements and related

disclosures.

December

2025,

the

FASB

issued

ASU

2025-11,

Interim

Reporting

(Topic

270):

Narrow-Scope

Improvements,

which

clarifies

the

navigability

and

applicability

interim

reporting

guidance

under

GAAP and

adds a

new disclosure

principle for

interim periods.

The amendments

are not

intended to

change

the

fundamental

nature

interim

reporting

expand

reduce

substantive

interim

disclosure

requirements. The ASU is effective for interim reporting periods within annual reporting periods beginning

after December 15, 2027

for public business

entities and after December 15,

2028 for entities other

than

public business

entities, with

early adoption

permitted. The

Company is

currently evaluating

the impact

that

adopting this update may have on its consolidated financial statement

disclosures.

December

2025

the

FASB

issued

ASU

No.

2025-12

clarify,

correct errors

make

other

improvements to a broad range of topics

in the Accounting Standards Codification

(“ASC”), including ASC

260,

Earnings

Per

Share;

ASC

325,

Investments

—

Other;

and

ASC

958,

Not-for-Profit

Entities.

The

guidance is

effective for

all entities

for annual

reporting periods

beginning after

15 December

2026, and

interim periods within those annual periods. Early adoption is

permitted. Entities are required to apply the

amendments to ASC

260 retrospectively to

each prior reporting

period presented in

the period of

adoption.

Entities

can

apply

all

other

amendments

the

period

adoption

either

(1)

prospectively

all

new

transactions

recognized

after

the

date

that

the

entity

first

applies

the

amendments

(2)

retrospectively to

the

beginning of

the

earliest comparative

period presented,

with an

adjustment to

the

opening

balance

retained

earnings

(or

other

appropriate

components

equity

net

assets

the

statement of financial position) as of the beginning of the earliest comparative period presented. An entity

may elect

the transition

method on

an issue-by-issue

basis (except

for the

ASC 260

amendments). The

Company is currently

assessing the impact

this standard will

have on its

consolidated financial

statements.

Transactions with related parties

Altair Travel Agency S.A. (“Altair”):

The Company uses the

services of an affiliated

travel agent,

Altair, which is controlled by the Company’s CEO Mrs. Semiramis Paliou. Travel expenses for 2025, 2024

and

2023

amounted

2,654

2,569

and

2,525

respectively,

and

are

mainly

included

vessel

operating expenses in

the accompanying consolidated

financial statements. As

of December 31,

2025 and

2024, an

amount of

and $

190

, respectively,

was payable

to Altair

and is

included in

“Due to

parties” in the accompanying consolidated balance sheets.

Steamship Shipbroking Enterprises Inc. or

Steamship:

Steamship is a company controlled by

the Company’s

CEO Mrs.

Semiramis Paliou

and provides

brokerage services

to DSI

for a

fixed monthly

fee plus commission on

the sale of vessels, pursuant

to a Brokerage Services

Agreement.

For 2025,

2024

and 2023, brokerage fees amounted to $

3,912

, $

4,093

and $

3,900

, respectively, and

are included mainly

in general

and administrative

expenses in

the accompanying

consolidated statements

of income.

For 2025,

2024 and

2023, commissions related

to Steamship

amounted to

355

, $

544

and $

906

, respectively and

are mainly included

in gain on

the sale of

vessels in the

accompanying consolidated

statements of income.

As of December 31, 2025 and 2024, there was

amount due to Steamship.

Bond issuance:

In 2024, officers and directors of the

Company and/or entities affiliated with them

purchased an aggregate

of $

47,300

principal amount of the

senior unsecured bond

issued on July 2,

2024

(Note 8).

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-24

Equity Method Investments

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

% of DWM. As of December 31, 2025 and 2024, the investment in

DWM

amounted to

244

and

794

and

included

equity

method

investments

the

accompanying

consolidated balance sheets. In 2025, 2024 and 2023, the investment in DWM

resulted in a loss of $

550

gain

and

gain

228

respectively,

included in

loss

from

equity method

investments in

the

accompanying consolidated statements of income.

DWM

performs the

technical and

commercial management

five

vessels of

the

Company’s fleet

for

fixed monthly fee

separately presented as management

fees to a

related party and

a percentage of their

gross

revenues

included

voyage

expenses.

Management

fees

DWM

2025,

2024

and

2023

amounted to $

1,191

, $

1,332

and $

1,313

, respectively. Voyage expenses (commissions) incurred by

DWM

under

the

management

agreements

during

2025,

2024

and

2023,

amounted

314

368

and

390

respectively.

As of

December 31, 2025

and 2024, there

was an amount

of $

239

and $

due from DWM,

included in due from related parties in the accompanying consolidated

balance sheets.

Bergen

Ultra

LP,

Bergen:

Bergen

limited

partnership

established

wholly

owned

subsidiary of the Company, for the purpose of acquiring, owning,

and operating a vessel. On February

14,

2023, Bergen signed

a Memorandum of

Agreement to acquire from

an unrelated third-party

an Ultramax

dry bulk

vessel which

was delivered

on April

10, 2023.

On March

30, 2023,

Bergen entered

into a

loan

agreement

with

Nordea

for

15,400

loan

finance

part

the

purchase

price

the

vessel

and

the

Company

provided a

corporate guarantee

secure Bergen’s

obligations under

the

loan

(Note 10).

April

28,

2023,

the

Company

entered

into

(i)

investment

agreement

with

unrelated

third

party

acquire

% 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

the

loan,

compensation

for

the

guarantee

provided

Nordea

and

(v)

convertible

loan

with

Bergen

under

which

Bergen

would

have

repay

all

expenditures

made

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

cash

while

amount

3,675

was

converted

into

partnership interests in Bergen, representing

% of the total partnership interests.

Following the

admission of

the new

investor,

the Company

evaluated its

interests in

Bergen under

ASC

810 and

concluded that

Bergen is

a VIE

and that

the Company

does not

individually have

the power

direct the

activities of the

VIE that most

significantly affect the

partnership’s performance. From

April 28,

2023

the

Company

longer

retained

control

over

Bergen’s

board

directors.

Consequently,

the

Company deconsolidated

Bergen in

accordance with

ASC 610

and the

retained noncontrolling

interest was

accounted for under the equity method due to the Company’s significant influence

over Bergen.

On the date of

deconsolidation, the fair value of the

Company’s interest amounted to $

4,519

, determined

through Level 2 inputs of the

fair value hierarchy,

by taking into consideration the fair value

of the distinct

assets and

liabilities of

Bergen on

the date

of the

deconsolidation.

This resulted

in a

gain on

deconsolidation

amounting to

844

, separately

presented in

the accompanying

consolidated statement of

income, being

the difference

between the fair

value of the

retained noncontrolling interest

plus the carrying

value of the

liabilities assumed by Bergen and the carrying value of the assets derecognized.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-25

As of December 31, 2025 and 2024,

the Company’s equity investment in Bergen

amounted to $

4,227

and

5,012

, respectively, and is included in

equity method investment,

current and equity

method investments,

non-current, respectively,

in the accompanying consolidated balance

sheets. In 2025, 2024 and 2023, the

investment in

Bergen resulted

in a

loss of

765

, a

gain of

312

and a

gain of

181

, respectively

and is

included in loss from equity method investments

in the accompanying consolidated statements

of income.

Also, in 2025,

2024 and

2023, income

from management

fees from Bergen

amounted to $

, $

and $

respectively,

included

time

charter

revenues

and

income

from

the

commission

paid

the

loan

guarantee

amounted

and

included

interest

and

other

income

the

accompanying

consolidated statements

of income. As

of December 31,

2025 and 2024,

there was an

amount of $

158

and

246

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

On November 19, 2025, Bergen entered into an agreement with an unrelated third party to sell the vessel

for the sale price

of $

26,400

. As a result,

the Company reclassified

its equity method investment

from non-

current to current assets,

in the accompanying consolidated balance sheet. (Note 16).

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

service

vessels

the

growing

offshore

wind

industry

and

acquire

certain

vessels.

Diana

Energize committed to contribute

million Euro, representing

45.87

% of the limited partnership’s capital.

On May 5, 2025, a new partner was admitted to Windward and the Company received Euro

3.1

million as

return of capital, which reduced the

Company’s ownership percentage to

%. As of December 31,

2025

and 2024,

the Company’s investment

in Windward

amounted to

44,494

and $

36,631

, respectively, mainly

consisting

advances to

fund

the

construction of

four

vessels

and working

capital.

September 30,

2025, the

first vessel

was delivered

to its

owners. In

2025, 2024

and 2023,

the investment

in Windward

resulted

loss

518

and

671

respectively,

and

included

loss

from

equity

method

investments in the accompanying consolidated statements of income.

Diana Mariners

Inc., or

Diana Mariners:

On September

12, 2023,

the Company

through its

wholly

owned subsidiary Cebu Shipping

Company Inc., or Cebu, acquired

% of Cohen Global Maritime Inc.,

Cohen,

company

organized

the

Republic

the

Philippines

for

the

purpose

providing

manning

agency services. In August 2024, Cohen was renamed Diana Mariners and acts as the manning

agent of

the Company’s vessels.

As of December

31, 2025 and

2024, the Company’s

investment in Diana

Mariners

amounted to

383

and $

389

, respectively

and there

was an

amount of

760

and $

100

, included

in due

from related parties, respectively. In 2025, 2024 and 2023, the investment in Diana Mariners resulted in a

loss

and

respectively

and

included

loss

from

equity

method

investments

the

consolidated statements of income. For 2025, 2024 and 2023,

manning fees to Diana Mariners amounted

to $

314

nil

and

nil

, respectively, and are included in operating

expenses in the consolidated

statements of

income.

December

31,

2025,

all

the

Company’s

ship-owning

subsidiaries

have

entered

into

manning agreements with Diana Mariners.

Ecogas

Holding

AS,

Ecogas:

March

12,

2025,

the

Company,

through

wholly

owned

subsidiary

Diana

Gas

Inc.,

entered

into

joint

venture

agreement

with

unrelated

party

establish

Ecogas,

a company

formed under

the

laws

of Norway,

for

the

purpose of

building

two

7,500 cbm

LPG

vessels

with

delivery

2027

and

with

option

for

two

additional

vessels.

Under

the

terms

the

agreement, the Company and its strategic

partner hold equal voting rights

(

% each), and as a result the

Company does

not have

control over

Ecogas. Furthermore, the

Company agreed to

contribute $

18,464

representing an

% equity interest, for the

construction of the

two

vessels. As of December

31, 2025, the

investment

Ecogas

amounted

8,754

representing

part

its

equity

participation

fund

the

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-26

construction of

the vessels

and working

capital. In

2025, the

investment in

Ecogas resulted

in a

loss of

1,409

and is included in loss from equity method investments in

the consolidated statements of income.

Investments in a related party and other

OceanPal

Inc.,

OceanPal:

December 31,

2024,

the

Company held

500,000

shares of

Series B Preferred

Shares of OceanPal.

Series B Preferred

Shares entitled the

holder to

2,000

votes on

all

matters

submitted to

vote

stockholders, however,

the

voting

rights

were capped

% of

total

votes, and

the total

votes entitled

be cast

by the

holder,

including common

stock or

any other

voting

security, should not

exceed

% of the total number of votes. Series B Preferred Shares had no

dividend

or distribution rights.

On October 28,

2025, the Company

sold its

500,000

Series B Preferred

Shares for

cash

consideration of

3,005

The

sale

resulted

realized

gain, representing

the

excess of

the

sale

proceeds over the carrying

amount of the shares.

This gain is included

within gain/(loss) on related

party

investments

the

accompanying

consolidated

statements

income.

The

realized

gain

partially

offset

realized

losses

recognized

during

2025

from

the

dilution

the

Company’s

common

stock

holdings

OceanPal, described below.

As of December

31, 2025 and

2024, the Company

held

207

Series C Convertible

Preferred Shares.

Series

Preferred

not

have

voting

rights

except

with

respect

amendments

the

Articles

Incorporation that adversely affect the

preferences, powers, or rights of the

Series C Preferred Shares or

relate to

the issuance

of Parity

Stock or

the creation

or issuance

of Senior

Stock. Series

C Preferred

have a liquidation preference equal to the stated value of $

1,000

and are convertible into common shares

at the

Company’s option

commencing upon the

first anniversary

of the

issue date,

at a

conversion price

equal to the lesser of $

6.50

and the

-trading-day trailing VWAP of OceanPal’s common shares, subject

to adjustment. Dividends are cumulative and accrue at the rate of

% per annum and are payable in cash

or,

at OceanPal’s

option, in

kind. As

of December

31, 2025

and 2024,

the Company’s

investment in

the

Series C preferred shares, amounted to $

180

and $

180

, respectively, included in investments in a related

party,

current

and

investments

party,

non-current,

respectively,

the

accompanying

consolidated balance sheets.

On October

17, 2023,

the Company

converted

9,793

of its

10,000

Series C

Preferred Shares

into

3,649,474

common shares,

having a

fair value

of $

9,160

based on

Level 1

inputs of

the fair

value hierarchy,

using

the closing price

of OceanPal’s common

shares on the

conversion date. Upon conversion,

the Company

recognized a gain

of $

1,742

, representing the

excess of the

fair value of

the common shares

received over

the carrying amount of

the Series C Preferred

Shares derecognized. This gain

is included in gain/(loss)

party

investments

the

accompanying

consolidated

statements

income.

Following

the

conversion, the Company became the beneficial owner of

% of OceanPal’s outstanding common stock

and, as

the shares

are listed

on NASDAQ,

the Company

elected to

account for

its ownership

interest in

OceanPal at fair value.

As of

December 31,

2024, the

Company held

3,649,474

shares of

OceanPal’s common

stock. During

2025,

OceanPal completed a series of common

stock issuances and effected a reverse stock

split, resulting in a

significant dilution

of the

Company’s ownership

interest to

145,978

common shares

as of

December 31,

2025,

resulting

loss

4,077

included

gain/(loss)

party

investments,

the

2025

consolidated statement

income.

As a

result

of this

dilution,

the

Company concluded

that it

no longer

exercises

significant

influence

over

OceanPal,

and

therefore

the

investment

longer

qualifies

for

the

equity method under

ASC 323. The

discontinuation of the equity

method did not

affect the measurement

of the

investment, as

the Company

had previously

elected the

fair value

option for

its holdings

in OceanPal.

Accordingly, the

investment continues to be carried

at fair value, with

changes in fair value

recognized in

earnings.

December

31,

2025

and

2024,

the

Company’s

investment

the

common

stock

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-27

OceanPal amounted to $

158

and $

4,235

, respectively,

included in investments in a

related party,

current

and investments in a related party, non-current,

respectively.

2025,

2024 and

2023, changes

the

fair

value

the

Company’s

investment in

OceanPal common

shares and

preferred shares resulted

in losses

of $

1,072

, $

3,905

and $

1,022

, respectively,

presented in

gain/(loss) on related party investments, in the consolidated

statements of income.

2023,

the

Company

distributed

13,157

Series

Preferred

non-cash

dividends

its

shareholders

(Note

11).

The

Series

Preferred

were

offered

shareholders

non-cash

consideration

for

the

sale

Melia

OceanPal.

The

Company

accounted

for

the

transaction

nonreciprocal transfer with its owners in accordance with ASC 845 and measured the preferred shares at

their fair value on

the date of declaration

at $

10,761

and recorded a gain

of $

761

included in gain/(loss) on

related party investments

in the related accompanying

consolidated statement of income.

The fair value of

the Series D Preferred Shares was determined

using the income approach, based on

the present value of

the future cash flows expected to be received by the holder of the equity instrument.

2025,

2024

and

2023,

dividend

income

from

the

Series

and

Series

OceanPal

preferred

amounted to $

, $

and $

801

, respectively,

included in interest and other income in the accompanying

consolidated statements of income.

Investment

equity

securities:

2023,

the

Company

acquired

equity

securities

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

converted

into

cash

fund

current

operations

and

were

classified

current

assets

the

accompanying consolidated

balance sheet.

The Company

sold all

securities during

the first

quarter of

2024

and in

2024 and

2023, recorded

a realized

loss of

400

and an

unrealized gain

of $

2,813

, respectively,

presented in gain/(loss) on equity securities in the accompanying

consolidated statements of income.

In 2025, the

Company acquired equity securities of

Genco Shipping & Trading

Limited (Genco) which as

of December 31, 2025,

had a fair value

of $

118,194

. As of December 31,

2025, the Company is

the holder

6,413,151

common shares, being

14.8

% of Genco’s common stock.

The equity securities were initially

recorded at cost

amounting to $

103,524

and measured subsequently

at fair value,

since their fair

values

were

readily

determinable,

determined

through

Level

the

fair

value

hierarchy.

The

securities

are

considered marketable

securities that

are available

to be

converted into

cash to

fund current

operations

and classified

in current

assets in

the accompanying

consolidated balance

sheet as

of December

31, 2025.

Unrealized

gain

the

investment

amounted

14,671

and

separately

presented

gain/(loss)

equity securities in the accompanying consolidated statements

of income.

In 2025, dividend income from the Investment in equity securities amounted to $

1,670

included in interest

and other income in the accompanying consolidated statements of income.

November

24,

2025,

submitted

Genco’s

board

directors

proposal

acquire

all

the

outstanding shares of Genco we did not already own for a price of

20.60

per share in cash (Note 16).

Advances for vessels under construction and Vessels, net

It is in

the Company’s normal

course of business

from time to

time to acquire

and sell vessels.

Accordingly,

in 2025 and 2024, the Company entered into the below transactions.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-28

Vessels under construction

February

2024,

the

Company

signed

agreement

with

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

delivered to

the

Company

the

second

half

2027

and

the

first

half

2028.

December

31,

2025

and

2024,

advances for vessels under

construction amounted to $

20,877

and $

19,558

, respectively, of which $

2,446

and

1,146

was

capitalized

interest.

2025

and

2024,

amount

1,319

and

1,158

including

capitalized interest of $

1,299

and $

1,146

, respectively, was capitalized.

Vessel Disposals

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

Artemis

and

Houston

and recognized an

aggregate gain on sale of $

5,799

In 2025, the

Company sold to unrelated

third parties the

vessels

Alcmene

and

Selina

and recognized an

aggregate gain on sale of $

3,663

The

amount

reflected

in Vessels,

net

the

accompanying consolidated

balance sheets

is analyzed

follows:

Vessel Cost

Accumulated

Depreciation

Net Book

Value

Balance, December 31, 2023

1,114,247

(214,055)

900,192

- Additions for vessel improvements

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

- Additions for vessel improvements

183

- Vessel disposals

(23,875)

6,201

(17,674)

- Depreciation for the year

(37,983)

Balance, December 31, 2025

1,045,512

(267,574)

777,938

Property and Equipment, net

The Company

owns the

land and

building of

its principal

corporate offices

in Athens,

Greece and

three

plots

land

acquired

for

corporate

purposes.

Other

assets

consist

office

furniture

and

equipment,

computer software and hardware

and vehicles. The amount

reflected in “Property and

equipment, net” is

analyzed as follows:

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-29

Property and

Equipment

Accumulated

Depreciation

Net Book

Value

Balance, December 31, 2023

30,942

(6,660)

24,282

- Additions in property and equipment

3,718

- Depreciation for the year

(825)

Balance, December 31, 2024

34,660

(7,485)

27,175

- Additions in property and equipment

1,671

- Depreciation for the year

(998)

Balance, December 31, 2025

36,331

(8,483)

27,848

Long-term debt

The

amount of

long-term debt

shown in

the

accompanying consolidated

balance sheets

analyzed as

follows:

December 31, 2025

December 31, 2024

Senior unsecured bond

175,000

Secured long-term debt

354,189

347,590

Total long-term

debt

529,189

522,590

Less: Deferred financing costs

(6,380)

(7,973)

Long-term debt, net of deferred financing costs

522,809

514,617

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

costs,

current

(50,281)

(45,230)

Long-term debt, excluding current maturities

472,528

469,387

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-30

8.375% Senior Unsecured Bond:

June 22, 2021

, the

Company issued a

125,000

senior unsecured bond

maturing in

June 2026. The

bond ranked

ahead of

subordinated capital

and ranked

the same

with all

other senior

unsecured obligations

the

Company

other

than

obligations

which

were

mandatorily

preferred

law.

Entities

affiliated

with

executive officers

and directors of

the Company purchased

an aggregate of

21,000

principal amount of

the bond.

On June 29, 2023,

the Company repurchased $

5,900

nominal value of the bond

for $

5,851

resulting in a

loss on debt extinguishment

of $

159

, representing the

difference between the

reacquisition price of

5,851

and the

net carrying

amount of

the debt

extinguished of

5,900

less deferred

financing fees

of $

208

. In

June 2024, the bond

became callable, and on July

2, 2024, the Company prepaid the

remaining balance

103.35

% of par,

using proceeds from the new bond

described below. The

Company accounted for the

transaction

partly

debt

modification

and

partly

debt

extinguishment.

The

portion refinanced

existing

investors

amounting

57,850

was

treated

modification

and

the

remaining

61,250

was

accounted for as debt extinguishment. An amount of

5,336

consisting of the costs paid to

investors who

participated in the refinancing

and unamortized deferred

fees were deferred

over the term of

the new bond

and an amount of

3,475

was recorded as loss on

debt extinguishment. The bond included

financial and

other covenants and was trading on the Oslo Stock Exchange under

the ticker symbol “DIASH02”.

8.75% Senior Unsecured Bond

In 2024,

the Company

issued a

175,000

senior unsecured

bond maturing in

July 2029

bearing a

fixed-

rate coupon of

8.75

% payable semi-annually in

arrears in January and

July of each

year. Proceeds

from

the bond

were used

to prepay

the balance

of the

then outstanding

bond and

for general

working capital

purposes.

The bond

callable in

whole or

part in

July 2027

a price

equal to

103.50

of nominal

value;

in January

2028 at

a price

equal to

102.625

nominal value;

July 2028

a price

equal to

101.75

% and after January 2029 at

a price equal to

100.00

% of nominal value. The bond

ranks ahead of

subordinated capital and ranks

the same with all other

senior unsecured obligations of

the Company other

than obligations which are mandatorily preferred by law. The bond includes financial and other covenants

and is trading on the Oslo Stock Exchange under the ticker symbol

“DIASH03”.

Secured Term Loans:

Under the

secured term

loans outstanding

as of

December 31,

2025,

vessels of

the Company’s

fleet

are

mortgaged

with

first

preferred

priority

ship

mortgages,

having

aggregate

carrying

value

621,566

Additional

securities

required

the

banks

include

first

priority

assignment

all

earnings,

insurances, first assignment of time

charter contracts that exceed a

certain period, pledge over the

the

borrowers,

manager’s

undertaking

and

subordination

and

requisition

compensation

and

either

corporate

guarantee

DSI

(the

“Guarantor”)

guarantee

the

ship

owning

companies

(where

applicable), financial covenants, as well as operating account assignments. The lenders may also require

additional

security

the

future

the

event

the

borrowers

breach

certain

covenants

under

the

loan

agreements.

The

secured

term

loans

generally

include

restrictions

changes

management

and

ownership of the vessels, additional indebtedness, as well as minimum requirements regarding hull cover

ratio and minimum liquidity

per vessel owned by the

borrowers, or the Guarantor,

maintained in the bank

accounts of the borrowers, or the Guarantor.

As of December 31,

2025 and 2024 minimum

cash deposits required to

be maintained at all

times under

the Company’s

loan facilities,

amounted to

18,000

and $

19,000

, respectively

and are

included in

restricted

cash, non-current in

the accompanying consolidated

balance sheets. Furthermore,

the secured term

loans

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-31

contain

cross

default

provisions

and

additionally

the

Company

not

permitted

pay

any

dividends

following the occurrence

of an event

of default. All

of the Company’s

secured term loans

bear interest at

SOFR plus a margin. In 2025 and 2024, the weighted

average interest rate of the secured term

loans was

6.1

% and

7.3

%, respectively.

As of December 31, 2025,

the Company had the following

agreements with banks, either as

a borrower or

as a guarantor, to guarantee the loans of its subsidiaries:

Nordea Bank

AB, London

Branch (“Nordea”):

On September

30, 2022,

the

Company entered

into a

200

million loan

agreement to

finance the

acquisition of

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

existing

loan

amounting

20,934

and

recorded

loss

debt

extinguishment amounting to $

220

. The loan, maturing

June 27, 2028

was repayable in equal

quarterly

instalments of $

1,125

On July

25, 2024,

the Company

entered into

and drew

a $

167,263

loan agreement,

to refinance

the balance

of the then outstanding

loans. The loan is

repayable in equal

quarterly instalments of

4,454

and a balloon

instalment of $

64,827

payable on

July 25, 2030

Export-Import Bank of China:

On January 4,

2017, the Company drew

down $

57,240

under a secured

loan

agreement,

which

repayable

equal

quarterly

instalments

954

each,

until

its

maturity

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

repayable

equal

quarterly

instalments

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

% of the loan amount. Under the interest rate

swap, the Company pays

a fixed rate and

receives floating under term

SOFR.

The swap has a

termination

date on December 27,

2029, and a mandatory

break on June 27,

2027, according to which the

swap will

be terminated if the loan is prepaid. As of December 31,

2025 and 2024, the fair value of the interest rate

swap was $

361

and $

165

, respectively,

and is separately presented in

current and non-current liabilities.

2025,

2024

and

2023,

the

Company

recognized

loss

196

gain

274

and

loss

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.

April

and

19,

2023,

the

Company

drew

down

100,000

which

was

repayable

equal

quarterly

instalments of $

3,301

each and a balloon of $

33,972

payable together with the last instalment on

April 19,

2028. On

October 18,

2024, the

Company refinanced

the outstanding

balance of

this loan

with a

loan which

is repayable in equal quarterly instalments of $

2,533

each and a balloon of $

14,323

payable together with

the last instalment on

April 18, 2031

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-32

National Bank of

Greece S.A. (“NBG”):

On September 29,

2025, the Company entered

into a $

55,000

loan agreement.

The loan

proceeds were

drawn on

the same

date and

deposited in

a pledged

account

with

the

bank

reduce

the

margin.

December

31,

2025,

the

amount

53,750

presented

separately as

restricted cash,

current in

the accompanying

consolidated balance

sheet. The

Company may

withdraw any part or

all of the funds

from the pledged account

at the end of

the loan’s fixed interest

period,

provided no event of default has

occurred. The loan is repayable in equal quarterly

instalments of $

1,250

and a balloon instalment of $

25,000

payable on

September 29, 2031

As of December 31, 2025 and 2024, the Company was in compliance with

all of its loan covenants.

As of December 31, 2025, the maturities of

the Company’s bond and debt facilities throughout their term,

are shown in the table below and do not include related debt issuance

costs.

Period

Principal Repayment

Year 1

52,149

Year 2

52,149

Year 3

52,149

Year 4

227,149

Year 5

92,684

Year 6 and

thereafter

52,909

Total

529,189

Finance Liabilities

On March 29, 2022, the Company

sold

Florida

to an unrelated third party

and leased back the vessel

from

the buyer for

a period of

ten years

, under which

the Company pays

a fixed monthly

hire. The Company

has

the option to

repurchase the vessel

at specific prices, after

the end of

the third year

of the charter period

and for

each year

thereafter,

and the

obligation to

purchase the

vessel on

the expiration

of the

lease on

the tenth year.

On August 17, 2022, the

Company entered into

two

sale and leaseback agreements with two

unaffiliated

third parties for

New Orleans

and

Santa Barbara

. The vessels

were delivered

to their buyers

on September

8, 2022 and

September 12,

2022, respectively

and the

Company chartered-in

both vessels

under bareboat

charter parties

for a

period of

eight years

, each,

under which

the Company

pays a

fixed monthly

hire. Under

the bareboat charter, the

Company has the

option to repurchase

the vessel at

specific prices, after

the end

of the

third year

of the

charter period

and for

each year

thereafter, and the

obligation to

purchase the

vessel

on the expiration of the lease on the eighth year.

On December 6, 2022, the Company

sold

DSI Andromeda

to an unrelated third party and leased

back the

vessel

under

bareboat agreement,

for

period

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

the expiration of the lease on the tenth year.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-33

The Company determined

that, under ACS

842-40 Sale and

Leaseback Transactions, the

transactions are

failed

sales

and

consequently the

assets

were not

derecognized from

the

financial

statements

and

the

proceeds from the sale of the vessels were accounted for as financial liabilities. As of December

31, 2025

and

2024, finance

liability

amounted to

10,041

and

9,608

respectively,

included in

finance

liabilities,

current and $

103,259

and $

113,300

respectively included in finance liabilities, net of

current portion. As of

December 31, 2025, the

weighted average remaining lease

term of the above lease

agreements was

5.71

years, the

average interest rate

was

4.83

% and the

sublease income for

the years ended

December 31,

2025, 2024 and 2023 was

29,073

, $

28,814

and $

34,560

, respectively, included in time charter revenues.

As of

December 31,

2025, and

throughout

the term

of the

leases,

the Company

has annual

finance liabilities

as shown in the table below:

Period

Principal Repayment

Year 1

10,224

Year 2

10,661

Year 3

11,151

Year 4

11,604

Year 5

36,170

Year 6 and

thereafter

34,282

Total

114,092

10.

Commitments and Contingencies

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

the

operations

the

Company’s

vessels.

The

Company

accrues

for

the

cost

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 $

billion per vessel per

incident, by the P&I Association in which the Company’s vessels are entered.

Pursuant to the sale and lease

back agreements signed between the Company

and its counterparties,

the

Company

has

purchase

obligations

amounting

50,400

the

end

the

lease

agreements

described in Note 9.

On March

30, 2023,

the Company

entered into

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

the

vessel,

first

priority

general

assignment

the

earnings,

insurances

and

requisition

compensation

the

vessel,

charter

party

assignment,

partnership

interests

security

deed,

and

manager’s

undertaking.

Accordingly,

December

31,

2025,

the

Company

did

not

record

provision for

losses

under

the

guarantee

Bergen’s

loan

amounting to

12,288

on that date (Notes 4 and 16).

As of December 31, 2025, the Company’s remaining commitments to its joint ventures

consist of EUR

10.7

million to Windward and $

8,220

to Ecogas.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-34

As of December 31,

2025, the Company had

total obligations under shipbuilding

contracts (Note 6), as

follows:

Period

Amount

Year 1

9,200

Year 2

36,800

Year 3

27,600

Total

73,600

December

31,

2025,

the

Company’s

vessels,

owned

and

chartered-in,

were

fixed

under

time

charter

agreements,

considered

operating

leases.

The

minimum

contractual

gross

charter

revenue

expected to

be generated

from fixed

and non-cancelable

time charter

contracts existing

as of

December

31, 2025 and until their expiration was as follows:

Period

Amount

Year 1

142,842

Year 2

7,931

Total

150,773

11.

Capital Stock and Changes in Capital Accounts

Preferred stock

As of December 31, 2025, and 2024, the

Company’s authorized preferred stock

consists of

50,000,000

shares (all

in registered

form), par

value $

0.01

per share,

of which

1,000,000

are designated as Series A Participating

Preferred Shares,

5,000,000

shares are designated as Series B

Preferred

Shares,

10,675

are

designated

Series

Preferred

and

400

are

designated as

Series D

Preferred Shares.

As of

December 31,

2025 and

2024, the

Company had

zero

Series A Participating Preferred Shares issued and outstanding.

Series

Preferred

Stock:

December

31,

2025,

and

2024,

the

Company

had

2,600,000

Series B Preferred

Shares issued and

outstanding with

par value $

0.01

per share, at

25.00

per share and

with liquidation preference

at $

25.00

per share.

Holders of Series B Preferred Shares have no voting rights

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

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

rights.

Also, holders of Series B Preferred

Shares rank prior to the holders

of common shares with respect

to dividends,

distributions and

payments upon

liquidation and

are subordinated

to all

of the

existing and

future indebtedness.

Dividends on the Series

B Preferred Shares

are cumulative from

the date of original

issue and are

payable

on the 15th day of January,

April, July and October of each year at a dividend rate of

8.875

% per annum,

2.21875

per

annum.

For

each

the

years

ended

December

31,

2025,

2024

and

2023,

dividends on Series B

Preferred Shares amounted

to $

5,769

. Since February 14,

2019, the Company

may

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

25.00

per share plus

an amount equal

to all accumulated

and unpaid dividends thereon

to the date

of redemption, whether

not declared.

Series

Preferred

Stock

December

31,

2025,

and

2024,

the

Company

had

10,675

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

0.01

per share, owned by an

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-35

affiliate of its Chief

Executive Officer, Ms.

Semiramis Paliou.

The Series C Preferred Stock votes with the

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

submitted to a vote of the shareholders of the Company.

The Series C Preferred Stock has no dividend

liquidation rights

and

cannot

transferred

without the

consent of

the

Company

except

the

holder’s

affiliates and immediate family members.

Series D Preferred Stock

: As of December 31, 2025, and 2024, the Company had

400

shares of

Series D Preferred Stock, issued and outstanding,

with par value $

0.01

per share, owned by an affiliate of

its Chief

Executive Officer,

Ms. Semiramis

Paliou.

The Series

D Preferred

Stock is

not redeemable

and

has

dividend or

liquidation rights.

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

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

votes,

all

matters

submitted

vote

the

stockholders

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

% of the total number of votes that may be cast on such matter submitted

to a vote of stockholders.

Issuance and Repurchase of Common Shares:

In 2023, the Company issued

2,033,613

common

stock,

3.84

for

the

acquisition

one

vessel,

upon

exercise of

warrant

issued

the

vessel’s sellers. The

Company did

t receive any

proceeds from

the exercise

of the warrants

in 2023,

and

the

value

the

issued

was

included

vessels,

net.

December

2024,

the

Company

commenced a tender

offer to purchase up

15,000,000

shares of its outstanding

common stock, at $

2.00

per share,

using funds available

from cash and

cash equivalents.

On January 7,

2025, the tender

offer was

settled and

the Company

repurchased and

retired a

total of

11,442,645

shares of

common stock

for an

aggregate amount of $

23,048

Dividend

Common Stock:

March

20,

2023,

the

Company

paid

dividend

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

cash

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

cash

dividend

its

common

stock

0.075

per

share,

9,384

shareholders of record as of

August 15, 2024. On

December 18, 2024, the

Company paid a cash

dividend

on its common stock of $

0.01

per share, or $

1,252

, to shareholders of record as of December 11, 2024.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-36

On March 21,

2025, the

Company paid a

cash dividend

on its common

stock of

0.01

per share,

or $

1,158

to all shareholders of record as of March 12, 2025. On June 24, 2025, the Company paid a cash dividend

on its common stock of $

0.01

per share, or $

1,158

, to all shareholders of record

as of June 17, 2025. On

September 11, 2025

the Company

paid a

cash dividend

on its

common stock

of $

0.01

per share,

or $

1,157

to shareholders

of record

as of

August 21,

2025. On

December 17,

2025 the

Company paid

a cash

dividend

on its common stock of $

0.01

per share, or $

1,157

, to shareholders of record as of December 8, 2025.

Dividend in

Kind:

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.

Warrants:

December

14,

2023,

the

Company

distributed

22,613,070

warrants

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 $

per warrant,

1.67484

shares of

common stock

including a

bonus share

fraction. A

bonus share

fraction entitles

a holder

to receive

an additional

part of

a share

common stock for each warrant exercised without payment of any

additional exercise price.

In 2025 and

2024, the Company

issued

26,674

and

9,837,680

shares, respectively, having a

value of $

and $

28,047

, net

of expenses,

or $

1.30

and $

2.86

per share,

respectively. In 2025 and

2024, the

Company

received $

and $

24,195

, in proceeds, net of fees

from the exercise of

16,181

and

6,392,765

warrants,

respectively.

If all

warrants were

exercised as

of December

31, 2025,

the Company

would have

issued

37,003,669

shares of common stock, including the shares from the warrants already exercised, with

a fair

value of

73,133

and would have

received $

90,452

of gross

proceeds. The warrants

were measured

the date of

distribution at

fair value, determined

through Level 1

account hierarchy, being the

opening price

of the warrants

on the NYSE on

the date of

distribution as they

are listed under the

ticker DSX_W.

As of

December 31,

2025 and

2024, the

warrant liability, measured

at fair

value, amounted

to $

1,330

and $

1,802

respectively. In 2025, 2024 and

2023, Gain on

warrants amounted

to $

490

, $

719

and $

1,583

, respectively,

separately presented in the accompanying consolidated statements

of income.

Incentive

Plan:

December

31,

2025,

9,144,759

remained

reserved

for

issuance

according to the Company’s incentive plan.

Restricted stock as of December 31, 2025, 2024 and 2023 is analyzed

as follows:

Number of Shares

Weighted Average

Grant Date Price

Outstanding as of December 31, 2022

7,866,589

3.07

Granted

1,750,000

4.54

Vested

(2,822,753)

3.05

Outstanding as of December 31, 2023

6,793,836

3.45

Granted

2,300,000

2.96

Vested

(2,996,334)

3.38

Outstanding as of December 31, 2024

6,097,502

3.30

Granted

2,000,000

1.84

Vested

(3,134,365)

3.37

Outstanding as of December 31, 2025

4,963,137

2.67

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-37

The

fair

value

the

restricted

has

been

determined

with

reference

the

closing

price

the

Company’s

stock

the

date

such

awards

were

approved

the

Company’s

board

directors.

The

aggregate

compensation

cost

recognized

ratably

the

accompanying

consolidated

statements

income

over

the

respective

vesting

periods.

2025,

2024

and

2023,

compensation

cost

amounted

9,605

, $

10,012

and $

9,938

, respectively,

and is included

in general and

administrative expenses in

the

accompanying consolidated statements of income.

As of December 31, 2025 and December 31,

2024, the total unrecognized cost relating

to restricted share

awards was

5,749

and $

11,674

, respectively.

As of

December 31,

2025, the

weighted-average period

over which the total compensation cost related

to non-vested awards not yet recognized is

expected to be

recognized is

1.45

years.

12.

Interest expense and Finance costs

The amounts in the accompanying consolidated statements of income

are analyzed as follows:

2025

2024

2023

Interest expense, debt

34,750

38,385

39,617

Finance liabilities interest expense

5,867

6,353

6,786

Amortization of debt and finance liabilities issuance costs

2,139

2,372

2,620

Loan and other expenses

195

358

308

Interest expense and finance costs

42,951

47,468

49,331

13.

Earnings/(loss) per Share

All common shares

issued (including

the restricted

shares issued

under the

Company’s incentive plans

are

the Company’s common stock

and have equal rights to

vote and participate in dividends. The

calculation

of basic earnings per share does not

treat the non-vested shares (not considered participating securities)

outstanding

until

the

time/service-based

vesting

restriction

has

lapsed.

The

dilutive

effect

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

are

the

number

assumed

issued

under

the

treasury stock method weighted for the periods the non-vested shares

were outstanding.

In 2025, 2024 and 2023, there

were

38,544

2,698,994

and

1,710,513

included in the denominator of the

diluted earnings

per share calculation.

Securities that could

potentially dilute basic

earnings per share

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

the

money

during

the

reporting

period

and

any

incremental

resulting

from

the

non-vested

restricted share awards.

Net income attributable to common stockholders is adjusted

by the dividends on Series B Preferred Stock

and the gain on warrants with dilutive effect to calculate the diluted earnings

per share.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-38

Basic Earnings / (Loss) per Share

2025

2024

2023

Net income

17,827

12,746

49,844

Dividends on series B preferred shares

(5,769)

Net income attributable to common stockholders

12,058

6,977

44,075

Weighted average number of common shares, basic

110,459,096

115,956,249

100,166,629

Earnings per common share, basic

0.11

0.06

0.44

Diluted Earnings / (Loss) per Share

2025

2024

2023

Net income

17,827

12,746

49,844

Dividends on series B preferred shares

(5,769)

Adjustments for fair value gain on warrants

(719)

(1,583)

Adjusted net income attributable to common

stockholders

12,058

6,258

42,492

Weighted average number of common shares, basic

110,459,096

115,956,249

100,166,629

Incremental shares from dilutive instruments

38,544

2,698,994

1,710,513

Weighted average number of common shares,

diluted

110,497,640

118,655,243

101,877,142

Earnings per common share, diluted

0.11

0.05

0.42

14.

Income Taxes

Under

the

laws

the

countries

the

companies’

incorporation

and

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

% of

% of U.S.-related gross transportation

income unless an exemption

applies.

The Company and each

of its subsidiaries expects it

qualifies for this statutory

tax exemption for the 2025,

2024 and

2023 taxable years,

and the

Company takes this

position for

United States federal

income tax

return reporting purposes.

15.

Financial Instruments and Fair Value Disclosures

Interest rate risk and concentration of credit risk

Financial instruments that potentially

subject the Company

to concentrations of credit

risk consist primarily

of cash and cash equivalents, time deposits and accounts

receivable, trade arising from operating leases.

(Note 2).

The ability and willingness of

each of the Company’s

counterparties to perform their

obligations

under a

contract depend

upon a

number of

factors that

are beyond

the Company’s

control and

may include,

among

other

things,

general

economic

conditions, the

state

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

deposits,

placed

with

various

qualified

financial

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-39

institutions and performs periodic

evaluations of the relative

credit standing of those

financial institutions.

The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its

customers’

financial

condition

and

receiving payments

hire

advance.

The

Company,

generally,

does not require collateral

for its accounts receivable

and does not have

any agreements to mitigate

credit

risk.

2025,

2024 and

2023 charterers

that

individually accounted

for

% or

the

Company’s time

charter revenues were as follows:

Charterer

2025

2024

2023

Cargill International SA

14%

13%

Nippon Yusen Kaisha

15%

11%

*Less than 10%

The Company is exposed to interest rate risk on its borrowings with variable interest rates. This exposure

is partly mitigated

through fixed-rate indebtedness

including the Company’s bond

(Note 8), an interest

rate

swap with DNB (Note 8) and finance liabilities that bear fixed rates (Note

9).

Fair value of assets and liabilities

The

carrying

values

financial

assets

reflected

the

accompanying

consolidated

balance

sheet

approximate their fair values due to the short-term nature and high liquidity of these financial instruments.

Cash

and

cash

equivalents

and

restricted

cash are

classified

Level 1 instruments as

they

represent

liquid assets with short-term maturities. The fair

value of long-term bank loans with

variable interest rates

approximates

the

recorded

values,

their

interest

rates

adjust

market-observable

rates.

These

instruments

are

classified

within

Level

the

fair

value

hierarchy.

December

31,

2025,

the

Company’s lease liabilities had a carrying value of $

114,092

(Note 9) and a fair value of $

109,939

Fair value measurements disclosed

As of December 31,

2025, the Bond

which bears a

fixed interest rate

and had a

carrying value of

175,000

(Note 8), had a fair value of $

180,906

determined using Level 1 inputs of the fair value hierarchy.

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-40

Other Fair value measurements

December 31,

2024

Quoted Prices

in Active

Markets

(Level 1)

Significant

Other

Observable

Inputs (Level 2)

Significant

Other

Observable

Inputs (Level 3)

Assets

Recurring fair value measurements

Investments in a related party

4,415

4,235

180

Total

recurring fair value measurements

4,415

4,235

180

Liabilities

Recurring fair value measurements

Warrant liability

1,802

Interest rate swap, liability

165

Total

recurring fair value measurements

1,967

1,802

165

December 31,

2025

Quoted Prices

in Active

Markets

(Level 1)

Significant

Other

Observable

Inputs (Level 2)

Significant

Other

Observable

Inputs (Level 3)

Assets

Recurring fair value measurements

Investments in equity securities

118,194

Investments in related party

338

158

180

Total

recurring fair value measurements

118,532

118,352

180

Liabilities

Recurring fair value measurements

Warrant liability

1,330

Interest rate swap, liability

361

Total

recurring fair value measurements

1,691

1,330

361

16.

Subsequent Events

Series B Preferred Stock Dividends

: On January 15, 2026, the Company paid a quarterly

dividend

on its series B preferred stock, amounting to $

0.5546875

per share, or $

1,442

, to its stockholders of

record as of January 14, 2026.

Sale

DSI

Drammen and

return

capital

Following

the

sale

the

vessel

DSI

Drammen

Bergen and its delivery to its new owners, Bergen

distributed $

3,675

to the Company on January 29,

2026, as return of capital,

which reduced the carrying amount of the equity method investment

(Note

4).

Upon

completion

the

vessel

sale

and

the

full

repayment

Bergen’s

loan

with

Nordea,

the

Company’s

corporate

guarantee

provided

Nordea

for

Bergen’s

obligations

under

the

loan

was

released (Note 10).

Restricted share

awards:

On February

25, 2026, the

Company’s Board of

Directors approved the

award of

7,750,000

shares of restricted common stock to executive management and non-executive

directors, pursuant to

the Company’s amended plan,

as annual bonus.

The fair value of

the restricted

shares based on the closing

price on the date of

the Board of Directors’ approval

was $

20,073

. The

DIANA SHIPPING INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2025

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

data, unless otherwise stated)

F-41

cost of these awards

will be recognized

ratably over the restricted

shares vesting period which

will be

and

years for

1,850,000

and

5,900,000

shares, respectively.

Common

Stock

Dividend:

February 26,

2026,

the

Company

declared

cash

dividend

its

common stock

of $

0.01

per

share, based

on the

Company’s results

of operations

during the

three

months ended December

31, 2025. The cash

dividend is payable

on or around March

18, 2026, to

all

shareholders of record as of March 11,

2026.

Genco

Shipping

and

Trading

Limited:

January

16,

2026,

following

Genco’s

rejection

the

Company’s

proposal,

the

Company

announced

the

intention

nominate

slate

independent

director candidates for election on the Genco board. On March 6, 2026, the

Company increased the

offer to $

23.50

per share in cash.

This acquisition proposal would be

financed by a $

1,433,000

fully

committed facility

arranged by

DNB Carnegie

and Nordea,

and with

participation of

other international

banks.

Also

March

2026,

the

Company

entered

into

definitive

agreement

with

Star

Bulk

Carriers Corp., or Star Bulk,

to acquire

vessels of Genco for $

470,500

in cash upon, and subject

to, the consummation of an acquisition of Genco by the Company.