Exhibit 4.36

    

    

    

    

    

    

    Registration Document

    Diana Shipping Inc.

    

    

    

    

    

    

    
      

      

      
        Registration number 13671

          (Marshall Islands)

        Listing on Oslo Stock Exchange

        

          Arrangers:

           

          

           

          

          

          

          

          

          
          

          

          

          

          

          

          
            This Registration Document does not constitute an offer to buy, subscribe or sell the securities described herein.

            

            

            This Registration Document combined with the relevant Securities Note and Summary serves as a listing Prospectus
                as required by applicable laws and no securities are being offered or sold pursuant to this Prospectus.

             

              

            
              
                


            

            

              

              

              IMPORTANT NOTICE

              This Registration Document (the “Registration Document”) has been
                  prepared by Diana Shipping Inc. (“Diana”, “the Company” or the “Issuer”) for use in connection with the listing of Company’s bonds on the Oslo Stock Exchange (the “Listing”).

              The Registration Document combined with the relevant Securities Note and
                  Summary constitutes a Prospectus (the “Prospectus”).

              This Registration Document has been prepared to comply with chapter 7 of
                  the Norwegian Securities Trading Act of 29 June 2007 No. 75 (Nw: Verdipapirhandelloven) (“Norwegian Securities Trading Act”) and
                  related secondary legislation including the Prospectus Directive (EC Commission Regulation EC/809/2004). The Financial Supervisory Authority of Norway (Nw: Finanstilsynet) (“NFSA”) has reviewed and approved this Registration Document in accordance with Section 7-7 and 7-8 of the Norwegian Securities Trading Act. The Prospectus is valid 12 months from the
                  Financial Supervisory Authority’s approval. The Norwegian FSA has not verified or approved the accuracy or completeness of the information provided in this Prospectus. The NFSAs control and approval solely relates to the issuers
                  descriptions according to a pre-defined list of requirements. The NFSA has not undertaken any form of control or approval of corporate matters described in, or in any way included in the prospectus. The Registration Document has been
                  prepared in the English language only.

              The information contained herein is as of the date of this Registration
                  Document and subject to change, completion or amendment without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, any new factor, significant error or inaccuracy that might have an effect on the assessment
                  of the Bond Issue contemplated hereby and emerges between the time of approval of the Registration Document and the Listing, will be included in a supplement to the Registration Document. Neither the approval nor distribution or use of
                  this Registration Document shall under any circumstances create any implication that the information herein is correct as of any date subsequent to the date of the Registration Document.

              All inquiries relating to this Registration Document should be directed
                  to the Company. No other person has been authorized to give any information about, or make any representation on behalf of, the Company in connection with the Listing and, if given or made, such other information or representation must
                  not be relied upon as having been authorized by the Company.

              Unless otherwise indicated, the source of the information in this
                  Registration Document is the Company. The contents of this Registration Document are not to be construed as legal, business or tax advice. Each reader of the Registration Document should consult with its own professional advisors for
                  legal, business and tax advice. If you are in any doubt about the contents of this Registration Document, you should consult your stockbroker, bank manager, lawyer, accountant or other professional advisor.

              An investment in bonds involves inherent risks. Prospective investors in
                  Bonds issued by the Company should carefully consider the risks associated with the investment when reading the information contained in this Registration Document, and be aware of the risk of losing such investment in its entirety,
                  before deciding to invest. A summary of risk factors are set out in Section 1 “Risk Factors”. However, prospective investors should read the entire Registration Document before making any investment decision.

              

              

              Offering restrictions

              The distribution of this Registration Document may in certain
                  jurisdictions be restricted by law (including, but not limited to, the United States, Canada, Australia, Japan and South Africa). Persons in possession of this Registration Document are required to inform themselves about and to observe
                  any such restrictions. This Registration Document does not constitute an offer of, or an invitation to subscribe or purchase, any bonds or other securities.

              The securities described in this Registration Document have not been and
                  will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold absent registration or an applicable exemption from registration under the U.S. Securities Act.

              Furthermore, the bonds may not be offered or sold in or into Canada,
                  Japan, the Republic of South Africa or Australia.

              In relation to the United Kingdom, this Registration Document is only
                  directed at, and may only be distributed to, persons who fall within the scope of Article 19 (Investment Professionals) and 49 (High Net Worth Companies, Unincorporated Associations etc.) of the Financial Services and Markets Act 2000
                  (Financial Promotion) Order 2001 (as amended) or who are persons to whom the document may otherwise be lawfully distributed. This Registration Document may only be distributed in circumstances which do not result in an offer to the public
                  in the United Kingdom within the meaning of Public Offers of Securities Regulations 1995 (as amended). The distribution

              
                
                  


              

              

              

              

              

              (which term shall include any form of communication) of this Registration
                  Document may be restricted pursuant to Section 21 (Restrictions on Financial Promotion) of the Financial Services and Markets Act 2000 (as amended).

              Except for the approval by NFSA as described above, no action has been
                  taken or will be taken in any jurisdiction by the Company or the Manager that would permit a public offering of Bonds issued by the Company, or the possession or distribution of any documents relating to the Listing, or any amendment or
                  supplement thereto, hereunder but not limited to this Registration Document, in any country or jurisdiction where specific action for that purpose is required. Any person receiving this Registration Document is required by the Company and
                  the Manager to inform themselves about and to observe such restrictions.

              The restrictions and limitations listed and described herein are not
                  exhaustive, and other restrictions and limitations that are not known or identified by the Company or the Manager at the date of this Registration Document may apply in various jurisdictions as they relate to the Listing and the
                  Registration Document.

              This Registration Document is subject to Norwegian law, unless otherwise
                  indicated herein. Any dispute arising in respect of this Listing or this Registration Document is subject to the exclusive jurisdiction of the Norwegian courts, with Bergen District Court as exclusive venue.

            

          

          
            

            

            

            

            

            

            
              
                


            

            

            

            

            

            TABLE OF CONTENTS

            

            

            

            

            

            
              	
                      1

                    	
                      RISK FACTORS

                    	
                      4

                    
	
                      2

                    	
                      RESPONSIBILITY STATEMENT

                    	
                      7

                    
	
                      3

                    	
                      THIRD PARTY INFORMATION

                    	
                      8

                    
	
                      4

                    	
                      PRESENTATION OF THE GROUP

                    	
                      9

                    
	
                      5

                    	
                      BOARD OF DIRECTORS AND SENIOR MANAGEMENT

                    	
                      23

                    
	
                      6

                    	
                      FINANCIAL INFORMATION

                    	
                      28

                    
	
                      7

                    	
                      LEAD MANAGERS’ DISCLAIMER

                    	
                      40

                    
	
                      8

                    	
                      DEFINITIONS AND GLOSSARY

                    	
                      41

                    
	
                      APPENDIX A – ARTICLES OF INCORPORATION

                    	
                      42

                    
	
                      APPENDIX B – FINANCIAL STATEMENTS

                    	
                      51

                    


            

            

            

            

            

            

              

              

              

              

              

            

            
              
                


            

            

            

            

            

            
              

              

              1 RISK FACTORS

              Prior to any decision to invest in the Bonds, potential investors should carefully
                read and assess the following specific risks and the other information contained in this presentation. An investment in the bonds is suitable only for investors who understand the risk factors associated with this type of investment and who
                can afford a loss of all or part of their investment.

              If any of the risks presented below materializes, individually or
                  together with other circumstances, the business, financial position and operating results of the Issuer and the Group could be materially and adversely affected, and the price of the Bonds may decline, causing investors to lose all or
                  part of their invested capital.

              The primary risk factors in connection with an investment in the bonds
                  are described below. The description below is not exhaustive and the sequence of the risk factors is not set out according to importance. A prospective investor should carefully consider the factors set out below and elsewhere in this
                  Presentation, including but not limited to the cost structure for both the Issuer and the investors, as well as the investors' current and future tax position.

              The below described risk factors are supplemented by the risks
                  described under the heading “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2017 that summarize the risks that may materially affect the Issuer's business.

              Industry Specific Risk Factors

              
                
                  	·	
                          Charter hire rates for dry bulk carriers may remain at low levels or decrease in the future, which may adversely affect our earnings.

                        


                

              

              
                
                  	·	
                          The dry bulk carrier charter market remains significantly below its high in 2008, which has had and may continue to have an adverse effect on our
                              revenues, earnings and profitability, and may affect our ability to comply with our loan covenants.

                        


                

              

              
                
                  	·	
                          If economic conditions throughout the world decline, in particular in the EU, in China and the rest of the Asia-Pacific region, it could negatively
                              affect our earnings, financial condition and cash flows and may further adversely affect the market price of our common shares.

                        


                

              

              
                
                  	·	
                          A decrease in the level of China’s export of goods or an increase in trade protectionism could have a material adverse impact on our charterers’
                              business and, in turn, could cause a material adverse impact on our earnings, financial condition and cash flows.

                        


                

              

              
                
                  	·	
                          A decline in the state of global financial markets and economic conditions may adversely impact our ability to obtain additional financing or
                              refinance our existing loan and credit facilities on acceptable terms which may hinder or prevent us from expanding our business.

                        


                

              

              
                
                  	·	
                          An over-supply of dry bulk carrier capacity may prolong or further depress the current low charter rates and, in turn, adversely affect our
                              profitability.

                        


                

              

              
                
                  	·	
                          Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and stock
                              price.

                        


                

              

              
                
                  	·	
                          World events could affect our earnings and financial condition.

                        


                

              

              
                
                  	·	
                          Acts of piracy on ocean-going vessels could adversely affect our business.

                        


                

              

              
                
                  	·	
                          Our operating results are subject to seasonal fluctuations, which could affect our operating results.

                        


                

              

              
                
                  	·	
                          An increase in the price of fuel, or bunkers, may adversely affect profits.

                        


                

              

              
                
                  	·	
                          We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of
                              doing business.

                        


                

              

              
                
                  	·	
                          Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business.

                        


                

              

              
                
                  


              

              

              

              

              

              
                
                  	·	
                          The operation of dry bulk carriers has certain unique operational risks which could affect our earnings and cash flow.

                        


                

              

              
                
                  	·	
                          Our vessels may call on ports located in countries that are subject to sanctions and embargoes imposed by the U.S. or other governments, which could
                              adversely affect our reputation and the market for our common stock.

                        


                

              

              
                
                  	·	
                          Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows.

                        


                

              

              
                
                  	·	
                          We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections
                              available to us.

                        


                

              

              
                
                  	·	
                          Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings.

                        


                

              

              
                
                  	·	
                          Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect on our business.

                        


                

              

              
                
                  	·	
                          Changing laws and evolving reporting requirements could have an adverse effect on our business.

                        


                

              

              Company Specific Risk Factors

              
                
                  	·	
                          The market values of our vessels have declined in recent years and may further decline, which could limit the amount of funds that we can borrow and
                              could trigger breaches of certain financial covenants contained in our loan facilities, which could adversely affect our operating results, and we may incur a loss if we sell vessels following a decline in their market values.

                        


                

              

              
                
                  	·	
                          We charter some of our vessels on short-term time charters in a volatile shipping industry and a decline in charter hire rates could affect our
                              results of operations and our ability to pay dividends.

                        


                

              

              
                
                  	·	
                          Rising crew costs could adversely affect our results of operations.

                        


                

              

              
                
                  	·	
                          Our involvement with Diana Containerships Inc. may expose us to risks which may adversely affect our financial condition.

                        


                

              

              
                
                  	·	
                          Our investment in Diana Wilhelmsen Management Limited may expose us to additional risks.

                        


                

              

              
                
                  	·	
                          The effects of the recent Greek crisis could adversely affect the operations of our fleet manager, which has offices in Greece.

                        


                

              

              
                
                  	·	
                          A cyber-attack could materially disrupt our business.

                        


                

              

              
                
                  	·	
                          The Public Company Accounting Oversight Board inspection of our independent accounting firm, could lead to findings in our auditors’ reports and
                              challenge the accuracy of our published audited consolidated financial statements.

                        


                

              

              
                
                  	·	
                          Our earnings may be adversely affected if we are not able to take advantage of favorable charter rates.

                        


                

              

              
                
                  	·	
                          Investment in derivative instruments such as forward freight agreements could result in losses.

                        


                

              

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

                        


                

              

              
                
                  	·	
                          We cannot assure you that we will be able to borrow amounts under our loan facilities and restrictive covenants in our loan facilities impose
                              financial and other restrictions on us.

                        


                

              

              
                
                  	·	
                          We cannot assure you that we will be able to refinance indebtedness incurred under our loan facilities.

                        


                

              

              
                
                  	·	
                          Purchasing and operating secondhand vessels may result in increased operating costs and reduced operating days, which may adversely affect our
                              earnings.

                        


                

              

              
                
                  	·	
                          We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could
                              cause us to suffer losses or otherwise adversely affect our business.

                        


                

              

              
                
                  	·	
                          In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies
                              with greater resources, and as a result, we may be unable to employ our vessels profitably.

                        


                

              

              
                
                  


              

              

              

              

              

              
                
                  	·	
                          We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact the
                              effectiveness of our management and results of operations.

                        


                

              

              
                
                  	·	
                          The fiduciary duties of our officers and directors may conflict with those of the officers and director of Diana Containerships.

                        


                

              

              
                
                  	·	
                          We may not have adequate insurance to compensate us if we lose our vessels or to compensate third parties.

                        


                

              

              
                
                  	·	
                          Our vessels may suffer damage and we may face unexpected drydocking costs, which could adversely affect our cash flow and financial condition.

                        


                

              

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

                        


                

              

              
                
                  	·	
                          We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.

                        


                

              

              
                
                  	·	
                          Volatility in the London Interbank Offered Rate, could affect our profitability, earnings and cash flow.

                        


                

              

              
                
                  	·	
                          We depend upon a few significant customers for a large part of our revenues and the loss of one or more of these customers could adversely affect
                              our financial performance.

                        


                

              

              
                
                  	·	
                          We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations.

                        


                

              

              
                
                  	·	
                          Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us,
                              our directors or our management.

                        


                

              

              
                
                  	·	
                          The international nature of our operations may make the outcome of any bankruptcy proceedings difficult to predict.

                        


                

              

              
                
                  	·	
                          If we expand our business further, we may need to improve our operating and financial systems and will need to recruit suitable employees and crew
                              for our vessels.

                        


                

              

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

                        


                

              

              
                
                  	·	
                          U.S. federal tax authorities could treat us as a “passive foreign investment company”, which could have adverse U.S. federal income tax consequences
                              to U.S. shareholders.

                        


                

              

              
                
                  


              

              

              

              
                
                  	2	
                          RESPONSIBILITY STATEMENT

                        


                

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              
                
                  


              

              

              

              
                
                  	3	
                          THIRD PARTY INFORMATION

                        


                

              

              If not otherwise indicated, Diana Shipping Inc. is the source of information in this
                  Prospectus. Information which has been sourced from a third party has been accurately reproduced. As far as the Issuer is aware and able to ascertain from information published by such third parties, no facts have been omitted which would
                  render the reproduced information inaccurate or misleading.

              

              

              
                
                  


              

              

              

              
                
                  	4	
                          PRESENTATION OF THE GROUP

                        


                

              

              
                
                  	4.1	
                          Overview

                        


                

              

              Diana Shipping Inc. is a holding company incorporated under the laws of Liberia in March 1999
                  as Diana Shipping Investments Corp (registration number: 13671). In February 2005, the Company's articles of incorporation were amended. Under the amended and restated articles of incorporation, the Company was renamed Diana Shipping Inc.
                  and was re-domiciled from the Republic of Liberia to the Republic of the Marshall Islands. Please refer to appendix A for the full Articles of Incorporation. Our executive offices are located at Pendelis 16, 175 64 Palaio Faliro, Athens,
                  Greece. Our telephone number at this address is +30-210-947-0100. Our agent and authorized representative in the United States is our wholly-owned subsidiary, Bulk Carriers (USA) LLC, established in September 2006, in the State of
                  Delaware, which is located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

              Our purpose, as stated in our amended and restated articles of incorporation, is to engage in
                  any lawful act or activity for which corporations may now or hereafter be organized under the Business Corporations Act of the Marshall Islands, or the BCA.

              The objectives for which the Company is formed and incorporated are listed in the Company’s
                  Articles of Incorporation, which can be found in Appendix A.

              4.2 Business objectives and strategy

              Diana Shipping Inc. is a global provider of shipping transportation services through its
                  ownership of dry bulk vessels. As of  November 26, 2018 our fleet consists of 48 dry bulk vessels (4 Newcastlemax, 14 Capesize, 5 Post-Panamax, 5 Kamsarmax and 20 Panamax), as well as two Panamax dry bulk vessels, the ''Triton'' and
                  ''Alcyon'', that have been sold and expected to be delivered to their new owners at the latest by January 7, 2019. As of the same date, the combined carrying capacity of our fleet, including the m/v Triton and m/v Alcyon, is approximately
                  5.8 million dwt with a weighted average age of 9.26 years.

              We wholly own the subsidiaries which own the vessels that comprise our fleet. Our vessels
                  are employed primarily on medium to long-term time charters and transport a range of dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.

              The commercial and technical management of our fleet, as well as the provision of
                  administrative services relating to our fleet's operations, are carried out by Diana Shipping Services S.A., our wholly-owned subsidiary, and Diana Wilhelmsen Management Limited, a 50/50 joint venture with Wilhelmsen Ship Management.

              

              

              We focus on the ownership of dry bulk carriers with a capacity of 70,000 dwt and above. However, we will also consider purchasing
                  other classes of dry bulk vessels, if we determine that those vessels would, in our view, present favorable investment opportunities. The size of our fleet may change through acquisitions or sales of vessels, however the company has not
                  engaged in any new significant activities.

              Competitive position

              Among the distinguishing strengths that we believe provide us with a competitive advantage
                  in the dry bulk shipping industry are the following:

              
                
                  	·	
                          We own a modern, high quality fleet of dry bulk carriers.

                        


                

              

              
                
                  	·	
                          Our fleet includes groups of sister ships, providing operational and scheduling flexibility, as well as cost efficiencies.

                        


                

              

              
                
                  	·	
                          We have an experienced management team.

                        


                

              

              
                
                  	·	
                          We benefit from the experience and reputation of Diana Shipping Services S.A. and the relationship with Wilhelmsen Ship Management through the Diana
                              Wilhelmsen Management Limited joint venture.

                        


                

              

              
                
                  	·	
                          We benefit from strong relationships with members of the shipping and financial industries.

                        


                

              

              
                
                  	·	
                          We have a strong balance sheet and a low level of indebtedness.

                        


                

              

              

              

              During 2017, 2016 and 2015, we had a fleet utilization of 98.2%, 99.4% and 99.3%, respectively, our vessels achieved daily time
                  charter equivalent rates of $8,568, $6,106 and $9,739, respectively, and we generated revenues of $161.9 million, $114.3 million and $157.7 million, respectively.

              
                
                  


              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              The following table presents certain information concerning the dry bulk carriers in our fleet as of November 23, 2018:

              

              

              	 	
                      Vessel

                    	
                      Sister Ships*

                    	
                      Gross Rate (USD Per Day)

                    	
                      Com**

                    	
                      Charterers

                    	
                      Delivery Date to Charterers***

                    	
                      Redelivery Date to Owners****

                    	
                      Notes

                    	 
	 	
                      BUILT    DWT

                    	 
	 	
                      22 Panamax Bulk Carriers

                    	 
	
                      1 

                    	
                      DANAE

                    	
                      A

                    	
                      $10,000

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      22-Dec-17

                    	
                      22-Jan-19 - 7-May-19

                    	 	 
	 	
                      2001    75,106

                    	 	 	 	 	 	 	 
	
                      2 

                    	
                      DIONE

                    	
                      A

                    	
                      $10,350

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      23-Jan-18

                    	
                      23-Mar-19 - 8-Jul-19

                    	 	 
	 	
                      2001    75,172

                    	 	 	 	 	 	 	 	 
	
                      3 

                    	
                      NIREFS

                    	
                      A

                    	
                      $9,400

                    	
                      5.00%

                    	
                      Jaldhi Overseas Pte. Ltd., Singapore

                    	
                      5-May-17

                    	
                      11-Aug-18

                    	 	 
	 	 	 	
                      $10,750

                    	
                      3.75%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      11-Aug-18

                    	
                      11-Jul-19 - 11-Oct-19

                    	 	 
	 	
                      2001    75,311

                    	 	 	 	 	 	 	 	 
	
                      4 

                    	
                      ALCYON

                    	
                      A

                    	
                      $8,800

                    	
                      5.00%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      20-Jul-17

                    	
                      29-Nov-18 - 18-Dec-18

                    	
                      1,2,3

                    	 
	 	
                      2001    75,247

                    	 	 	 	 	 	 	 	 
	
                      5 

                    	
                      TRITON

                    	
                      A

                    	
                      $6,500

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      8-Jun-17

                    	
                      15-Oct-18

                    	
                      4 

                    	 
	 	 	 	
                      $11,000

                    	
                      5.00%

                    	
                      Tongli Shipping Pte. Ltd.

                    	
                      4-Nov-18

                    	
                      26-Nov-18

                    	
                      1,3

                    	 
	 	
                      2001    75,336

                    	 	 	 	 	 	 	 	 
	
                      6 

                    	
                      OCEANIS

                    	
                      A

                    	
                      $7,000

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      30-May-17

                    	
                      16-Nov-18

                    	 	 
	 	 	 	
                      $10,350

                    	
                      5.00%

                    	
                      16-Nov-18

                    	
                      1-Jan-20 - 31-Mar-20

                    	 	 
	 	
                      2001    75,211

                    	 	 	 	 	 	 	 	 
	
                      7 

                    	
                      THETIS

                    	
                      B

                    	
                      $8,350

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      14-Jul-17

                    	
                      19-Oct-18

                    	
                      5,6

                    	 
	 	 	 	
                      $10,650

                    	
                      3.75%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      16-Nov-18

                    	
                      16-Jan-20 - 16-Apr-20

                    	 	 
	 	
                      2004    73,583

                    	 	 	 	 	 	 	 	 
	
                      8 

                    	
                      PROTEFS

                    	
                      B

                    	
                      $7,900

                    	
                      5.00%

                    	
                      Hudson Shipping Lines Incorporated

                    	
                      24-Jun-17

                    	
                      19-Sep-18

                    	 	 
	 	 	 	
                      $11,000

                    	
                      3.75%

                    	
                      19-Sep-18

                    	
                      4-Sep-19 - 19-Dec-19

                    	 	 
	 	
                      2004    73,630

                    	 	 	 	 	 	 	 	 
	
                      9 

                    	
                      CALIPSO

                    	
                      B

                    	
                      $12,200

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      12-Mar-18

                    	
                      28-May-19 - 12-Sep-19

                    	 	 
	 	
                      2005    73,691

                    	 	 	 	 	 	 	 	 
	
                      10 

                    	
                      CLIO

                    	
                      B

                    	
                      $8,550

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      9-Jul-17

                    	
                      10-Nov-18

                    	 	 
	 	 	 	
                      $10,600

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      10-Nov-18

                    	
                      10-Sep-19 - 10-Dec-19

                    	 	 
	 	
                      2005    73,691

                    	 	 	 	 	 	 	 	 
	
                      11 

                    	
                      NAIAS

                    	
                      B

                    	
                      $10,000

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      26-Nov-17

                    	
                      11-Feb-19 - 26-May-19

                    	 	 
	 	
                      2006    73,546

                    	 	 	 	 	 	 	 	 
	
                      12 

                    	
                      ARETHUSA

                    	
                      B

                    	
                      $12,600

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      27-Apr-18

                    	
                      27-Apr-19 - 27-Jul-19

                    	 	 
	 	
                      2007     73,593

                    	 	 	 	 	 	 	 	 
	
                      13 

                    	
                      ERATO

                    	
                      C

                    	
                      $10,500

                    	
                      5.00%

                    	
                      Phaethon International Company AG

                    	
                      30-Dec-17

                    	
                      2-Mar-19 - 30-May-19

                    	 	 
	 	
                      2004    74,444

                    	 	 	 	 	 	 	 	 
	
                      14 

                    	
                      CORONIS

                    	
                      C

                    	
                      $9,000

                    	
                      5.00%

                    	
                      Narina Maritime Ltd

                    	
                      16-May-17

                    	
                      11-Aug-18

                    	
                      7 

                    	 
	 	 	 	
                      $8,300

                    	
                      5.00%

                    	
                      CJ International Italy Societa Per Azioni

                    	
                      11-Aug-18

                    	
                      10-Oct-18

                    	 	 
	 	 	 	
                      $11,300

                    	
                      5.00%

                    	
                      10-Oct-18

                    	
                      11-Aug-19 - 11-Nov-19

                    	 	 
	 	
                      2006    74,381

                    	 	 	 	 	 	 	 	 
	
                      15 

                    	
                      MELIA

                    	 	
                      $12,000

                    	
                      5.00%

                    	
                      United Bulk Carriers International S.A., Luxemburg

                    	
                      28-Apr-18

                    	
                      28-Sep-19 - 28-Dec-19

                    	
                      8 

                    
	 	
                      2005     76,225

                    	 	 	 	 	 	 	 
	
                      16 

                    	
                      ARTEMIS

                    	 	
                      $9,000

                    	
                      5.00%

                    	
                      Ausca Shipping Limited, Hong Kong

                    	
                      8-Jul-17

                    	
                      17-Sep-18

                    	 
	 	 	 	
                      $12,600

                    	
                      5.00%

                    	
                      17-Sep-18

                    	
                      17-Sep-19 - 17-Dec-19

                    	 
	 	
                      2006     76,942

                    	 	 	 	 	 	 	 


              
                
                  


              

              

              

              	
                      17 

                    	
                      LETO

                    	 	
                      $12,500

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      10-Jan-18

                    	
                      10-May-19 - 25-Aug-19

                    	 
	 	
                      2010     81,297

                    	 	 	 	 	 	 	 
	
                      18 

                    	
                      SELINA

                    	
                      D

                    	
                      $12,250

                    	
                      5.00%

                    	
                      BG Shipping Co., Limited, Hong Kong

                    	
                      6-Feb-18

                    	
                      6-Jun-19 - 6-Sep-19

                    	 
	 	
                      2010     75,700

                    	 	 	 	 	 	 	 
	
                      19 

                    	
                      MAERA

                    	
                      D

                    	
                      $11,900

                    	
                      5.00%

                    	
                      Unico Logistics Co., Ltd., Seoul

                    	
                      19-Sep-17

                    	
                      4-Jul-18

                    	 
	 	 	 	
                      $11,750

                    	
                      5.00%

                    	
                      ST Shipping and Transport Pte. Ltd., Singpore

                    	
                      4-Jul-18

                    	
                      20-Jan-19 - 4-Apr-19

                    	
                      9 

                    
	 	
                      2013     75,403

                    	 	 	 	 	 	 	 
	
                      20 

                    	
                      ISMENE

                    	 	
                      $12,000

                    	
                      5.00%

                    	
                      DHL Project & Chartering Limited, Hong Kong

                    	
                      16-Sep-17

                    	
                      29-Nov-18 - 16-Dec-18

                    	
                      1 

                    
	 	
                      2013     77,901

                    	 	 	 	 	 	 	 
	
                      21 

                    	
                      CRYSTALIA

                    	
                      E

                    	
                      $11,100

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      3-Oct-17

                    	
                      30-Nov-18 - 18-Jan-19

                    	
                      1 

                    
	 	
                      2014    77,525

                    	 	 	 	 	 	 	 
	
                      22 

                    	
                      ATALANDI

                    	
                      E

                    	
                      $13,500

                    	
                      5.00%

                    	
                      Uniper Global Commodities SE, Düsseldorf

                    	
                      27-Apr-18

                    	
                      27-Jun-19 - 27-Sep-19

                    	 
	 	
                      2014    77,529

                    	 	 	 	 	 	 	 
	 	
                      5 Kamsarmax Bulk Carriers

                    	 	 
	
                      23 

                    	
                      MAIA

                    	
                      F

                    	
                      $10,125

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      27-Jul-17

                    	
                      5-Nov-18

                    	
                      10 

                    
	 	 	 	
                      $13,300

                    	
                      5.00%

                    	
                      12-Nov-18

                    	
                      1-Jan-20 - 31-Mar-20

                    	 
	 	
                      2009     82,193

                    	 	 	 	 	 	 	 
	
                      24 

                    	
                      MYRSINI

                    	
                      F

                    	
                      $8,650

                    	
                      5.00%

                    	
                      RWE Supply & Trading GmbH, Essen

                    	
                      8-Jun-17

                    	
                      1-Dec-18 - 31-Dec-18

                    	
                      1 

                    
	 	
                      2010     82,117

                    	 	 	 	 	 	 	 
	
                      25 

                    	
                      MEDUSA

                    	
                      F

                    	
                      $10,000

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      6-Jul-17

                    	
                      3-Sep-18

                    	 
	 	 	 	
                      $14,000

                    	
                      4.75%

                    	
                      3-Sep-18

                    	
                      3-Oct-19 - 3-Dec-19

                    	 
	 	
                      2010     82,194

                    	 	 	 	 	 	 	 
	
                      26 

                    	
                      MYRTO

                    	
                      F

                    	
                      $14,000

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      25-Apr-18

                    	
                      25-May-19 - 25-Jul-19

                    	 
	 	
                      2013     82,131

                    	 	 	 	 	 	 	 
	
                      27 

                    	
                      ASTARTE

                    	 	
                      $9,000

                    	
                      5.00%

                    	
                      Glencore Agriculture B.V., Rotterdam

                    	
                      12-Jun-17

                    	
                      16-Oct-18

                    	 
	 	 	 	
                      $14,250

                    	
                      5.00%

                    	
                      16-Oct-18

                    	
                      16-Dec-19 - 16-Mar-20

                    	 
	 	
                      2013     81,513

                    	 	 	 	 	 	 	 
	 	
                      5 Post-Panamax Bulk Carriers

                    	 	 
	
                      28 

                    	
                      ALCMENE

                    	 	
                      $8,000

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      8-Jun-17

                    	
                      6-Oct-18

                    	 	 
	 	 	 	
                      $14,000

                    	
                      5.00%

                    	
                      Smart Gain Shipping Co., Limited, Hong Kong

                    	
                      6-Oct-18

                    	
                      9-Nov-18

                    	 	 
	 	 	 	
                      $11,500

                    	
                      5.00%

                    	
                      BG Shipping Co., Limited, Hong Kong

                    	
                      21-Nov-18

                    	
                      21-Oct-19 - 21-Jan-20

                    	 	 
	 	
                      2010     93,193

                    	 	 	 	 	 	 	 	 
	
                      29 

                    	
                      AMPHITRITE

                    	
                      G

                    	
                      $11,150

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      28-Sep-17

                    	
                      1-Dec-18 - 28-Jan-19

                    	
                      1 

                    	 
	 	
                      2012     98,697

                    	 	 	 	 	 	 	 	 
	
                      30 

                    	
                      POLYMNIA

                    	
                      G

                    	
                      $10,100

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      15-Mar-17

                    	
                      9-Jul-18

                    	 	 
	 	 	 	
                      $16,000

                    	
                      4.75%

                    	
                      9-Jul-18

                    	
                      9-Sep-19 - 9-Dec-19

                    	 	 
	 	
                      2012    98,704

                    	 	 	 	 	 	 	 	 
	
                      31 

                    	
                      ELECTRA

                    	
                      H

                    	
                      $8,000

                    	
                      5.00%

                    	
                      Uniper Global Commodities SE, Düsseldorf

                    	
                      11-Jun-17

                    	
                      19-Oct-18

                    	 	 
	 	 	 	
                      $13,500

                    	
                      5.00%

                    	
                      19-Oct-18

                    	
                      15-Sep-19 - 15-Dec-19

                    	 	 
	 	
                      2013    87,150

                    	 	 	 	 	 	 	 	 


              
                
                  


              

              

              

              	
                      32 

                    	
                      PHAIDRA

                    	
                      H

                    	
                      $12,700

                    	
                      5.00%

                    	
                      Uniper Global Commodities SE, Düsseldorf

                    	
                      13-Jan-18

                    	
                      13-Jan-19 - 13-Apr-19

                    	 
	 	
                      2013    87,146

                    	 	 	 	 	 	 	 
	 	
                      14 Capesize Bulk Carriers

                    
	
                      33 

                    	
                      NORFOLK

                    	 	
                      $13,250

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      1-Dec-17

                    	
                      1-Sep-19 - 1-Dec-19

                    	 
	 	
                      2002    164,218

                    	 	 	 	 	 	 	 
	
                      34 

                    	
                      ALIKI

                    	 	
                      $18,000

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      9-Apr-18

                    	
                      9-Dec-19 - 9-Feb-20

                    	 
	 	
                      2005    180,235

                    	 	 	 	 	 	 	 
	
                      35 

                    	
                      BALTIMORE

                    	 	
                      $18,050

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      6-Jun-18

                    	
                      22-May-19 - 21-Aug-19

                    	 
	 	
                      2005    177,243

                    	 	 	 	 	 	 	 
	
                      36 

                    	
                      SALT LAKE CITY

                    	 	
                      $16,250

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      1-May-18

                    	
                      1-Jan-19 - 1-Mar-19

                    	 
	 	
                      2005    171,810

                    	 	 	 	 	 	 	 
	
                      37 

                    	
                      SIDERIS GS

                    	
                      I

                    	
                      $13,000

                    	
                      5.00%

                    	
                      Rio Tinto Shipping (Asia) Pte., Ltd., Singapore

                    	
                      21-Jun-17

                    	
                      15-Nov-18

                    	 
	 	 	 	
                      $8,500

                    	
                      5.00%

                    	
                      Berge Bulk Shipping Pte. Ltd., Singapore

                    	
                      15-Nov-18

                    	
                      15-Dec-18

                    	 
	 	 	 	
                      $15,350

                    	
                      5.00%

                    	
                      15-Dec-18

                    	
                      15-Dec-19 - 30-Mar-20

                    	 
	 	
                      2006    174,186

                    	 	 	 	 	 	 	 
	
                      38 

                    	
                      SEMIRIO

                    	
                      I

                    	
                      $14,150

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      21-May-17

                    	
                      1-Sep-18

                    	 
	 	 	 	
                      $20,050

                    	
                      5.00%

                    	
                      Pacific Bulk Cape Company Limited, Hong Kong

                    	
                      1-Sep-18

                    	
                      1-Jul-19 - 16-Sep-19

                    	 
	 	
                      2007    174,261

                    	 	 	 	 	 	 	 
	
                      39 

                    	
                      BOSTON

                    	
                      I

                    	
                      $17,000

                    	
                      5.00%

                    	
                      EGPN Bulk Carrier Co., Limited, Hong Kong

                    	
                      6-Dec-17

                    	
                      6-Apr-19 - 6-Jul-19

                    	 
	 	
                      2007    177,828

                    	 	 	 	 	 	 	 
	
                      40 

                    	
                      HOUSTON

                    	
                      I

                    	
                      $19,000

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      9-May-18

                    	
                      25-Jan-19 - 24-Apr-19

                    	 
	 	
                      2009    177,729

                    	 	 	 	 	 	 	 
	
                      41 

                    	
                      NEW YORK

                    	
                      I

                    	
                      $16,000

                    	
                      5.00%

                    	
                      DHL Project & Chartering Limited, Hong Kong

                    	
                      2-Feb-18

                    	
                      2-Jun-19 - 2-Sep-19

                    	 
	 	
                      2010    177,773

                    	 	 	 	 	 	 	 
	
                      42 

                    	
                      SEATTLE

                    	
                      J

                    	
                      $11,700

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      8-Feb-17

                    	
                      30-Jul-18

                    	
                      11 

                    
	 	 	 	
                      $24,000

                    	
                      5.00%

                    	
                      30-Jul-18

                    	
                      30-Nov-18 - 30-Jan-19

                    	 
	 	
                      2011     179,362

                    	 	 	 	 	 	 	 
	
                      43 

                    	
                      P. S. PALIOS

                    	
                      J

                    	
                      $17,350

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      24-May-18

                    	
                      9-Jun-19 - 24-Aug-19

                    	 
	 	
                      2013    179,134

                    	 	 	 	 	 	 	 
	
                      44 

                    	
                      G. P. ZAFIRAKIS

                    	
                      K

                    	
                      $15,000

                    	
                      5.00%

                    	
                      RWE Supply & Trading GmbH, Essen

                    	
                      14-Aug-17

                    	
                      30-Nov-18 - 14-Jan-19

                    	
                      1 

                    
	 	
                      2014    179,492

                    	 	 	 	 	 	 	 
	
                      45 

                    	
                      SANTA BARBARA

                    	
                      K

                    	
                      $20,250

                    	
                      4.75%

                    	
                      Cargill International S.A., Geneva

                    	
                      24-Apr-18

                    	
                      9-Oct-19 - 9-Dec-19

                    	 
	 	
                      2015     179,426

                    	 	 	 	 	 	 	 
	
                      46 

                    	
                      NEW ORLEANS

                    	 	
                      $21,000

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      24-Mar-18

                    	
                      24-Feb-19 - 24-Apr-19

                    	 
	 	
                      2015    180,960

                    	 	 	 	 	 	 	 


              
                
                  


              

              

              

              	 	
                      4 Newcastlemax Bulk Carriers

                    
	
                      47 

                    	
                      LOS ANGELES

                    	
                      L

                    	
                      $19,150

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      16-Apr-18

                    	
                      1-Jan-19 - 16-Apr-19

                    	 
	 	
                      2012    206,104

                    	 	 	 	 	 	 	 
	
                      48 

                    	
                      PHILADELPHIA

                    	
                      L

                    	
                      $20,000

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      18-Jun-18

                    	
                      3-Feb-20 - 18-May-20

                    	 
	 	
                      2012    206,040

                    	 	 	 	 	 	 	 
	
                      49 

                    	
                      SAN FRANCISCO

                    	
                      M

                    	
                      $24,000

                    	
                      5.00%

                    	
                      Koch Shipping Pte. Ltd., Singapore

                    	
                      14-May-18

                    	
                      4-Mar-19 - 24-May-19

                    	 
	 	
                      2017   208,006

                    	 	 	 	 	 	 	 
	
                      50 

                    	
                      NEWPORT NEWS

                    	
                      M

                    	
                      BCI_2014 5TCs AVG + 24%

                    	
                      5.00%

                    	
                      SwissMarine Services S.A., Geneva

                    	
                      10-Jan-17

                    	
                      1-Dec-18 - 10-Mar-19

                    	
                      1 

                    
	 	
                      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.

                    
	 
	
                      1 Based on latest information.

                    
	
                      2 Vessel off hire for unscheduled maintenance from May 30, 2018 to July 10, 2018.

                    
	
                      3 Vessel sold and expected to be delivered to her new Owners at the latest by January 7, 2019.

                    
	
                      4 Vessel on scheduled drydocking from October 17, 2018 to November 1, 2018.

                    
	
                      5 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
                          on October 15, 2018, for the excess period commencing from October 14, 2018.

                    
	
                      6 Vessel on scheduled drydocking from October 22, 2018 to November 16, 2018.

                    
	
                      7 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
                          on August 6, 2018, for the excess period commencing from August 5, 2018, in case it is higher than the current rate of US$ 9,000.

                    
	
                      8 Vessel off hire from October 22, 2018 to October 25, 2018.

                    
	
                      9 Vessel off hire from August 9, 2018 to August 12, 2018.

                    
	
                      10 Charterers have agreed to pay the weighted average of the Baltic Panamax 4 T/C routes, as published by the Baltic Exchange
                          on October 26, 2018 plus 18%, only in case it is higher than the exsisting rate of US$10,125 which otherwise will continue to apply, for the excess period commencing from October 27, 2018.

                    
	
                      11 Charterers have agreed to pay the weighted average of the Baltic Capesize 5 T/C routes, as published by the Baltic Exchange
                          on July 23, 2018 plus 5%, for the excess period commencing from July 23, 2018.

                    


              

              

              

              

              Management of Our Fleet

              The commercial and technical management of our fleet, 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., and out 50/50 joint venture Diana Wilhelmsen Management Limited, pursuant to a management agreement between the management company and each ship
                  owning company whose vessel is managed by it. All management agreements are not for a specific time period and may be terminated by either party by giving three months prior notice in writing unless the ship is sold or becomes a total
                  loss, or with immediate effect, against payment to the Managers of damages. In exchange for providing us with commercial and technical services, personnel and office space, we pay Diana Shipping Services S.A., a commission, which is a
                  percentage of the managed vessels’ gross revenues, a fixed monthly fee per managed vessel and an additional monthly fee for the administrative services provided to Diana Shipping Inc. Such services may include budgeting, reporting,
                  monitoring of bank accounts, compliance with banks, payroll services and any other possible service that Diana Shipping Inc. would require to perform its operations. Similarly, in exchange for providing us with commercial and technical
                  services, we pay Diana Wilhelmsen Management Limited 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 Diana
                  Shipping Services S.A. are considered inter-company transactions and, therefore, are eliminated from our consolidated financial statements. The management fees deriving from the agreements with Diana Wilhelmsen Management Limited are
                  included in our statement of operations as “Management fees to related party”, whereas commercial fees are included in “Voyage expenses”. Since June 1, 2010, Diana Enterprises Inc., renamed to Steamship Shipbroking Enterprises Inc., or
                  Steamship, a related party controlled by our Chief Executive Officer and Chairman of the Board, Mr. Simeon Palios, provides brokerage

              
                
                  


              

              

              

              services to us. Brokerage fees are included in “General and Administrative expenses” in our statement of operations. The terms of
                  this relationship are currently governed by a Brokerage Services Agreement dated April 1, 2017.

              

              

              Our Customers

              Our customers include national, regional and international companies, such as Cargill International S.A., Glencore Grain B.V., EDF
                  Trading Ltd, RWE Supply and Trading Gmbh, Clearlake Shipping Pte Ltd, Koch Shipping Pte Ltd and Swissmarine Services S.A. During 2017, three of our charterers accounted for 43% of our revenues: Koch (17%), Swissmarine (14%), and Cargill
                  (12%). During 2016, four of our charterers accounted for 54% of our revenues: RWE Supply (19%), Swissmarine (15%), Cargill (10%) and Glencore (10%). During 2015, four of our charterers accounted for 66% of our revenues: EDF Trading (10%),
                  Glencore (20%), RWE Supply (24%) and Clearlake (12%).

              

              

              We charter our dry bulk carriers 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 2017, we paid commissions that ranged from 4.75% to 5.0% of the total daily charter hire rate of each charter to unaffiliated ship brokers and to in-house brokers associated with the
                  charterer, depending on the number of brokers involved with arranging the charter.

              

              

              We strategically monitor developments in the dry bulk shipping industry on a regular basis and, subject to market demand, seek to
                  adjust the charter hire periods for our vessels according to prevailing market conditions. In order to take advantage of relatively stable cash flow and high utilization rates, we fix some of our vessels on long-term time charters.
                  Currently, the majority of our vessels are employed on short to medium-term time charters, which provides us with flexibility in esponding to market developments. We continuously evaluate our balance of short- and long-term charters and
                  extend or reduce the charter hire periods of the vessels in our fleet according to the developments in the dry bulk shipping industry.

              

              

              The Dry Bulk Shipping Industry

              The global dry bulk carrier fleet could be divided into seven categories based on a vessel’s carrying capacity. These categories
                  consist of:

              

              

              > Very Large Ore Carriers. Very large ore carriers, or VLOCs, have a carrying capacity of more than 200,000 dwt and are a
                  comparatively new sector of the dry bulk carrier fleet. VLOCs are built to exploit economies of scale on long-haul iron ore routes.

              

              

              > Capesize. Capesize vessels have a carrying capacity of 110,000-199,999 dwt. Only the largest ports around the world possess
                  the infrastructure to accommodate vessels of this size. Capesize vessels are primarily used to transport iron ore or coal and, to a much lesser extent, grains, primarily on long-haul routes.

              

              

              > Post-Panamax. Post-Panamax vessels have a carrying capacity of 80,000-109,999 dwt. These vessels tend to have a shallower
                  draft and larger beam than a standard Panamax vessel with a higher cargo capacity. These vessels have been designed specifically for loading high cubic cargoes from draught restricted ports, although they cannot transit the Panama Canal.

              

              

              > Panamax. Panamax vessels have a carrying capacity of 60,000-79,999 dwt. These vessels carry coal, iron ore, grains, and, to a
                  lesser extent, minor bulks, including steel products, cement and fertilizers. Panamax vessels are able to pass through the Panama Canal, making them more versatile than larger vessels with regard to accessing different trade routes. Most
                  Panamax and Post-Panamax vessels are “gearless,” and therefore must be served by shore-based cargo handling equipment. However, there are a small number of geared vessels with onboard cranes, a feature that enhances trading flexibility
                  and enables operation in ports which have poor infrastructure in terms of loading and unloading facilities.

              

              

              > Handymax/Supramax. Handymax vessels have a carrying capacity of 40,000-59,999 dwt. These vessels operate in a large number of
                  geographically dispersed global trade routes, carrying primarily grains and minor bulks. Within the Handymax category there is also a sub-sector known as Supramax. Supramax bulk carriers are ships between 50,000 to 59,999 dwt, normally
                  offering cargo loading and unloading flexibility with on-board cranes, or “gear,” while at the same time possessing the cargo carrying capability approaching conventional Panamax bulk carriers.

              

              

              > Handysize. Handysize vessels have a carrying capacity of up to 39,999 dwt. These vessels are primarily involved in carrying
                  minor bulk cargoes. Increasingly, ships of this type operate within regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions.
                  Their cargo gear enables them to service ports lacking the infrastructure for cargo loading and unloading.

              

              

              Other size categories occur in regional trade, such as Kamsarmax, with a maximum length of 229 meters, the maximum length that can
                  load in the port of Kamsar in the Republic of Guinea. Other terms such as Seawaymax, Setouchmax, Dunkirkmax, and Newcastlemax also appear in regional trade.

              
                
                  


              

              

              

              

              

              

              

              The supply of dry bulk carriers is dependent on the delivery of new vessels and the removal of vessels from the global fleet,
                  either through scrapping or loss. The level of scrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs. The average age
                  at which a vessel is scrapped was 25 years in 2017, 23 years in 2016 and 25 years in 2015.

              

              

              The demand for dry bulk carrier capacity is determined by the underlying demand for commodities transported in dry bulk carriers,
                  which in turn is influenced by trends in the global economy. Demand for dry bulk carrier capacity is also affected by the operating efficiency of the global fleet, along with port congestion, which has been a feature of the market since
                  2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand. In evaluating demand factors for dry bulk carrier capacity, the Company believes that dry bulk carriers can be the most versatile element of the
                  global shipping fleets in terms of employment alternatives.

              

              

              Charter Hire Rates

              Charter hire rates fluctuate by varying degrees among dry bulk carrier size categories. The volume and pattern of trade in a small
                  number of commodities (major bulks) affect demand for larger vessels. Therefore, charter rates and vessel values of larger vessels often show greater volatility. Conversely, trade in a greater number of commodities (minor bulks) drives
                  demand for smaller dry bulk carriers. Accordingly, charter rates and vessel values for those vessels are usually subject to less volatility.

              

              

              Charter hire rates paid for dry bulk carriers are primarily a function of the underlying balance between vessel supply and demand,
                  although at times other factors may play a role. Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and the different dry bulk carrier categories. In the time charter market, rates vary
                  depending on the length of the charter period and vessel-specific factors such as age, speed and fuel consumption.

              

              

              In the voyage charter market, rates are, among other things, influenced by cargo size, commodity, port dues and canal transit fees,
                  as well as commencement and termination regions. In general, a larger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally command higher rates than routes with low port dues
                  and no canals to transit. Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels load cargo also are generally quoted at lower rates,
                  because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in the calculation of the return charter to a loading area.

              

              

              Within the dry bulk shipping industry, the charter hire rate references most likely to be monitored are the freightrate indices
                  issued by the Baltic Exchange. These references are based on actual charter hire rates under charters entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers. The
                  Baltic Panamax Index is the index with the longest history. The Baltic Capesize Index and Baltic Handymax Index are of more recent origin.

              

              

              The Baltic Dry Index, or BDI, 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 declined from a high of 11,793 in May 2008 to a low of 663 in December 2008. In 2015, the BDI ranged from a high of 1,222 in August to a low of 471 in December. In
                  2016, the BDI ranged from a record low of 290 in February to a high of 1,257 in November. In 2017, the BDI ranged from a low of 685 in February to a high of 1,743 in December (Source: Clarksons Research).

              

              

              Vessel Prices

              Dry bulk vessel values increased in 2017 as compared to 2016 and 2015. Consistent with these trends, the market value of our dry
                  bulk carriers had also increased. As charter rates and vessel values remain at relatively low levels, there can be no assurance as to how long charter rates and vessel values will remain at their current levels or whether they will
                  decrease or improve to any significant degree in the near future.

              

              

              Competition

              Our business fluctuates in line with the main patterns of trade of the major dry bulk cargoes and varies according to changes in
                  the supply and demand for these items. We operate in markets that are highly competitive and based primarily on supply and demand. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as
                  well as on our reputation as an owner and operator. We compete with other owners of dry bulk carriers in the Panamax,

              Post-Panamax and smaller class sectors and with owners of Capesize and Newcastlemax dry bulk carriers. Ownership of dry bulk
                  carriers is highly fragmented.

              

              

              We believe that we possess a number of strengths that provide us with a competitive advantage in the dry bulk shipping industry:

              

              

              > We own a modern, high quality fleet of dry bulk carriers. We believe that owning a modern, high quality fleet reduces
                  operating costs, improves safety and provides us with a competitive advantage in securing favorable time charters. We

              
                
                  


              

              

              

              maintain the quality of our vessels by carrying out regular inspections, both while in port and at sea, and adopting a
                  comprehensive maintenance program for each vessel.

              

              

              > Our fleet includes thirteen 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 manager to apply the technical
                  knowledge of one vessel to all vessels of the same series and creates economies of scale that enable us to realize cost savings when maintaining, supplying and crewing our vessels.

              

              

              > We have an experienced management team. Our management team consists of experienced executives who have, on average, more than
                  30 years of operating experience in the shipping industry and has demonstrated ability in managing the commercial, technical and financial areas of our business. Our management team is led by Mr. Simeon Palios, a qualified naval architect
                  and engineer who has more than 40 years of experience in the shipping industry.

              

              

              > We benefit from the experience and reputation of Diana Shipping Services S.A. and the relationship with Wilhelmsen Ship
                  Management through the Diana Wilhelmsen Management Limited joint venture.

              

              

              > We benefit from strong relationships with members of the shipping and financial industries. We have developed strong
                  relationships with major international charterers, shipbuilders and financial institutions that we believe are the result of the quality of our operations, the strength of our management team and our reputation for dependability.

              

              

              > We have a strong balance sheet and a relatively low level of indebtedness. We believe that our strong balance sheet and
                  relatively low level of indebtedness provide us with the flexibility to increase the amount of funds that we may draw under our loan facilities in connection with any future acquisitions or otherwise and enable us to use cash flow that
                  would otherwise be dedicated to debt service for other purposes.

              4.3 Organizational structure

              

              

              Diana Shipping Inc. is the sole owner of all of the issued and outstanding shares of its subsidiaries. Each of the vessels is owned
                  through a separate wholly-owned subsidiary. Subsidiaries without a vessel are dormant and do not have any operations. Bulk Carriers (USA) LLC, our agent
                  and authorized representative in the United States is also our wholly-owned subsidiary. Diana Shipping Inc., as parent company, is dependent upon its
                  subsidiaries, as a significant part of the cash flow generation required to service the parent company’s obligations originate from these subsidiaries.

              

              

              Below is the organizational chart of the DSI Group of companies:

              

              

            

            

            
              

              

            

            
              
                


            

             

          

            

            

            4.4 Fleet list

            Diana Shipping Inc. wholly owns the subsidiaries which own the vessels that comprise our fleet below:

            

            

            	
                    Diana Shipping Inc. Fleet List

                  
	
                    Panamax Gearless Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Danae

                  	
                    75,106

                  	
                    2001

                  	
                    EATON MARINE S.A.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Dione

                  	
                    75,172

                  	
                    2001

                  	
                    CHORRERA COMPAÑIA ARMADORA S.A.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Nirefs

                  	
                    75,311

                  	
                    2001

                  	
                    SKYVAN SHIPPING COMPANY S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Alcyon*

                  	
                    75,247

                  	
                    2001

                  	
                    BUENOS AIRES COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Triton*

                  	
                    75,336

                  	
                    2001

                  	
                    HUSKY TRADING, S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Oceanis

                  	
                    75,211

                  	
                    2001

                  	
                    PANAMA COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DSS

                  
	
                    Thetis

                  	
                    73,583

                  	
                    2004

                  	
                    CHANGAME COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DSS

                  
	
                    Protefs

                  	
                    73,630

                  	
                    2004

                  	
                    CYPRES ENTERPRISES CORP.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Calipso

                  	
                    73,691

                  	
                    2005

                  	
                    DARIEN COMPAÑIA ARMADORA S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Clio

                  	
                    73,691

                  	
                    2005

                  	
                    TEXFORD MARITIME S.A.

                  	
                    Bahamas

                  	
                    DWM

                  
	
                    Naias

                  	
                    73,546

                  	
                    2006

                  	
                    AILUK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DWM

                  
	
                    Arethusa

                  	
                    73,593

                  	
                    2007

                  	
                    BIKAR SHIPPING COMPANY INC.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Erato

                  	
                    74,444

                  	
                    2004

                  	
                    URBINA BAY TRADING, S.A.

                  	
                    Bahamas

                  	
                    DSS

                  
	
                    Coronis

                  	
                    74,381

                  	
                    2006

                  	
                    VESTA COMMERCIAL, S.A.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Melia

                  	
                    76,225

                  	
                    2005

                  	
                    MANDARINGINA INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Artemis

                  	
                    76,942

                  	
                    2006

                  	
                    FAYO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Leto

                  	
                    81,297

                  	
                    2010

                  	
                    JEMO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Selina

                  	
                    75,700

                  	
                    2010

                  	
                    KABEN SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Maera

                  	
                    75,403

                  	
                    2013

                  	
                    WAKE SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Ismene

                  	
                    77,901

                  	
                    2013

                  	
                    TAROA SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Crystalia

                  	
                    77,525

                  	
                    2014

                  	
                    ERIKUB SHIPPING COMPANY INC.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Atalandi

                  	
                    77,529

                  	
                    2014

                  	
                    WOTHO SHIPPING COMPANY INC.

                  	
                    Greek

                  	
                    DSS

                  
	
                    Kamsarmax Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Maia

                  	
                    82,193

                  	
                    2009

                  	
                    JABAT SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Myrsini

                  	
                    82,117

                  	
                    2010

                  	
                    MAKUR SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Medusa

                  	
                    82,194

                  	
                    2010

                  	
                    RAIROK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Myrto

                  	
                    82,131

                  	
                    2013

                  	
                    TUVALU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Astarte

                  	
                    81,513

                  	
                    2013

                  	
                    EBADON SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  


            
              
                


            

            

            

            	
                    Post-Panamax Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Alcmene

                  	
                    93,193

                  	
                    2010

                  	
                    MAJURO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DWM

                  
	
                    Amphitrite

                  	
                    98,697

                  	
                    2012

                  	
                    GUAM SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Polymnia

                  	
                    98,704

                  	
                    2012

                  	
                    PALAU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Electra

                  	
                    87,150

                  	
                    2013

                  	
                    RAKARU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Phaidra

                  	
                    87,146

                  	
                    2013

                  	
                    MEJATO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Capesize Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Norfolk

                  	
                    164,218

                  	
                    2002

                  	
                    SILVER CHANDRA SHIPPING COMPANY LIMITED

                  	
                    Cyprus

                  	
                    DSS

                  
	
                    Aliki

                  	
                    180,235

                  	
                    2005

                  	
                    KNOX SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Baltimore

                  	
                    177,243

                  	
                    2005

                  	
                    BOKAK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Salt Lake City

                  	
                    171,810

                  	
                    2005

                  	
                    MARFORT NAVIGATION COMPANY LIMITED

                  	
                    Cyprus

                  	
                    DWM

                  
	
                    Sideris GS

                  	
                    174,186

                  	
                    2006

                  	
                    JALUIT SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Semirio

                  	
                    174,261

                  	
                    2007

                  	
                    KILI SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DWM

                  
	
                    Boston

                  	
                    177,828

                  	
                    2007

                  	
                    LIB SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Houston

                  	
                    177,729

                  	
                    2009

                  	
                    GALA PROPERTIES INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    New York

                  	
                    177,773

                  	
                    2010

                  	
                    BIKINI SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Seattle

                  	
                    179,362

                  	
                    2011

                  	
                    TOKU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    P. S. Palios

                  	
                    179,134

                  	
                    2013

                  	
                    PULAP SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    G. P. Zafirakis

                  	
                    179,492

                  	
                    2014

                  	
                    WENO SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Santa Barbara

                  	
                    179,426

                  	
                    2015

                  	
                    LELU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    New Orleans

                  	
                    180,960

                  	
                    2015

                  	
                    UJAE SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Newcastlemax Bulk Carriers

                  
	
                    Name of Vessel

                  	
                    Size (deadweight tons)

                  	
                    Year Built

                  	
                    Company

                  	
                    Flag

                  	
                    Management Company

                  
	
                    Los Angeles

                  	
                    206,104

                  	
                    2012

                  	
                    LAE SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Philadelphia

                  	
                    206,040

                  	
                    2012

                  	
                    NAMU SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    San Francisco

                  	
                    208,006

                  	
                    2017

                  	
                    ASTER SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  
	
                    Newport News

                  	
                    208,021

                  	
                    2017

                  	
                    AERIK SHIPPING COMPANY INC.

                  	
                    Marshall Islands

                  	
                    DSS

                  


            *Vessel sold and expected to be delivered to her new Owners at the latest by January 7, 2019.

            

            

            
              
                


            

            

            

            4.5 Selected financial information

            

            

            The following tables set forth our selected consolidated financial data as of and for the years ended December 31, 2017, 2016, 2015,
                2014 and 2013 and the three months and nine months ended September 30, 2018 and 2017. The selected consolidated financial data as of and for the years ended December 31, 2017, 2016, 2015, 2014 and 2013 are derived from our audited
                consolidated financial statements and notes thereto which have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP.

            

            

            

            

            

            

            

            

            

            

            

            

            
              
                


            

            

            

            4.6 Financing

            

            

            As at December 31, 2017, we had $604.8 million of long term debt outstanding under our facilities and Notes and consisted of the
                agreements described below.

            

            

            Secured Term Loans:

            

            

            On October 22, 2009, our wholly-owned subsidiary Gala Properties Inc. entered into a $40.0 million loan agreement with Bremer
                Landesbank ("Bremer") to partly finance the acquisition cost of the Houston. The loan is repayable in 40 quarterly installments of $0.9 million plus one balloon installment of $4.0 million to be paid together with the last installment on
                November 12, 2019. The loan bears interest at LIBOR plus a margin of 2.15% per annum.

            

            

            On October 2, 2010, our wholly-owned subsidiaries Lae Shipping Company Inc. ("Lae") and Namu Shipping Company Inc., ("Namu") entered
                into a loan agreement with Export-Import Bank of China ("CEXIM Bank") and DnB NOR Bank ASA ("DnB") to finance part of the construction cost of the Los Angeles, and the Philadelphia, for an amount of up to $82.6 million, of which $72.1
                million was drawn, being 70% of the vessels' market value on delivery. The Lae advance is repayable in 40 quarterly installments of approximately $0.6 million and a balloon of $12.3 million payable together with the last installment on
                February 15, 2022. The Namu advance is repayable in 40 quarterly installments of approximately $0.6 million and a balloon of $11.4 million payable together with the last installment on May 18, 2022. Pursuant to an amendment of the loan
                agreement dated May 18, 2017, each of the individual banks are allowed to demand repayment in full of such bank's contribution in any or all advances on August 16, 2019. If one or more banks (acting through the agent) exercise such right in
                respect of an advance, the borrowers shall be obliged to repay each such bank's contribution in that advance in full on such date. The loan bears interest at LIBOR plus a margin of 2.50% per annum.

            

            

            On September 13, 2011, our wholly-owned subsidiary Bikar Shipping Company Inc. ("Bikar") entered into a loan agreement with Emporiki
                Bank of Greece S.A. ("Emporiki") for a loan of up to $15.0 million to refinance part of the acquisition cost of the Arethusa. On December 13, 2012, Bikar, the Company, DSS and Credit Agricole Corporate and Investment Bank ("Credit
                Agricole") entered into a supplemental loan agreement to transfer the outstanding loan balance, the ISDA master swap agreement and the existing security documents from Emporiki to Credit Agricole. The loan is repayable in 20 equal
                semiannual installments of $0.5 million each and a balloon payment of $5.0 million to be paid together with the last installment on September 15, 2021. The loan bears interest at LIBOR plus a margin of 2.5% per annum, or 1% for such loan
                amount that is equivalently secured by cash pledge in favor of the bank.

            

            

            On May 24, 2013, our wholly-owned subsidiaries Erikub Shipping Company Inc. ("Erikub") and Wotho Shipping Company Inc. ("Wotho")
                entered into a loan agreement with CEXIM Bank and DnB to finance part of the construction cost of Crystalia and Atalandi for an amount of up to $15.0 million for each vessel, drawn on May 22, 2014. Each advance is repayable in 19 quarterly
                installments of $250,000 and a balloon of $10.3 million payable together with the last installment on February 22, 2019. The loan bears interest at LIBOR plus a margin of 3.0% per annum.

            

            

            On January 9, 2014, our wholly-owned subsidiaries Taka Shipping Company Inc. and Fayo Shipping Company Inc. entered into a loan
                agreement with Commonwealth Bank of Australia, London Branch, for a loan facility of up to $18.0 million to finance part of the acquisition cost of the Melite and Artemis. The loan bears interest at LIBOR plus a margin of 2.25%. The loan
                was drawn in two tranches, one of $8.5 million assigned to Melite and one of $9.5 million assigned to Artemis. Tranche A is repayable in 24 equal consecutive quarterly installments of $195,833 each; and a balloon of $3.8 million payable on
                January 13, 2020. Tranche B is repayable in 32 equal consecutive quarterly installments of $156,250 each and a balloon of $4.5 million payable on January 13, 2022. As a result of the grounding incident of the Melite and the subsequent sale
                of the vessel, Tranche A was repaid in full in October 2017.

            

            

            On December 18, 2014, our wholly-owned subsidiaries Weno Shipping Company Inc. ("Weno") and Pulap Shipping Company Inc. ("Pulap")
                entered into a loan agreement with BNP Paribas ("BNP"), for a loan facility of up to $55.0 million to finance part of the acquisition cost of the G. P. Zafirakis and the P. S. Palios, of which $53.5 million was drawn. The loan bears
                interest at LIBOR plus a margin of 2%, and is repayable in 14 equal semi-annual installments of approximately $1.6 million and a balloon of $31.5 million, payable on November 30, 2021.

            

            

            On March 17, 2015, eight of our wholly-owned subsidiaries entered into a loan facility with Nordea to refinance the existing
                agreements with the bank and to add additional vessels. On March 19, 2015, after repaying in full all outstanding indebtedness with the bank, we drew down the amount of $93.1 million. The loan is repayable in 24 equal consecutive quarterly
                installments of approximately $1.9 million and a balloon of $48.4 million payable together with the last installment on March 19, 2021. The loan bears interest plus a margin of 2.1% of LIBOR.

            
              
                


            

            

            

            

            

            

            

            On March 26, 2015, three of our wholly-owned subsidiaries entered into a loan agreement with ABN AMRO Bank N.V. for a secured term
                loan facility of up to $53.0 million, to refinance part of the acquisition cost of the vessels New York, Myrto and Maia of which $50.2 million was drawn on March 30, 2015. The loan is repayable in 24 equal consecutive quarterly installments
                of about $1.0 million and a balloon of $26.3 million payable together with the last installment on March 30, 2021. The loan bears interest at LIBOR plus a margin of 2.0%.

            

            

            On April 29, 2015, our wholly-owned subsidiary Lelu Shipping Company Inc. ("Lelu") entered into a term loan agreement with Danish
                Ship Finance A/S for a loan facility of $30.0 million, drawn on April 30, 2015 to partly finance the acquisition cost of the Santa Barbara, which was delivered in January 2015. The loan is repayable in 28 equal consecutive quarterly
                installments of $0.5 million each and a balloon of $16.0 million payable together with the last installment on April 30, 2022. The loan bears interest at LIBOR plus a margin of 2.15%.

            

            

            On July 22, 2015, we entered into a term loan agreement with BNP Paribas for a loan of $165.0 million drawn on July 24, 2015. The
                loan is repayable in 20 consecutive quarterly installments, the first eight installments in an amount of $2.5 million, followed by four installments in an amount of $5.0 million; eight installments in an amount of $7.0 million; and a
                balloon installment of $69.0 million payable together with the last installment on July 24, 2020. The loan bears interest at LIBOR plus a margin of 2.35% per annum for the first two years; 2.3% per annum for the third year and 2.25% per
                annum until the final maturity of the loan.

            

            

            On September 30, 2015, our wholly-owned subsidiaries, Ujae Shipping Company Inc. ("Ujae") and Rairok Shipping Company Inc. ("Rairok")
                entered into a term loan agreement with ING Bank N.V. for a loan of up to $39.7 million, available in two advances to finance part of the acquisition cost of the New Orleans and the Medusa. Advance A of about $28.0 million was drawn on
                November 19, 2015 and is repayable in 28 consecutive quarterly installments of about $0.5 million and a balloon installment of about $15.0 million payable together with the last installment on November 19, 2022. Advance B of about $11.7
                million was drawn on October 6, 2015 and is repayable in 28 consecutive quarterly installments of about $0.3 million and a balloon installment of about $3.5 million payable together with the last installment on October 6, 2022. The loan
                bears interest at LIBOR plus a margin of 1.65%.

            

            

            On January 7, 2016, three of our wholly-owned subsidiaries entered into a secured loan agreement with the CEXIM Bank for a loan of up
                to $75.7 million in order to finance part of the construction cost of three vessels. On January 4, 2017, we drew down $57.24 million to finance part of the construction cost of San Francisco and Newport News, both delivered on January 4,
                2017. The balance of the committed loan amount, including the tranche for Hull DY6006 whose shipbuilding contract was cancelled on October 31, 2016, was cancelled. On February 6, 2017, we also entered into a Deed of Release with the CEXIM
                Bank in order to release the owner of Hull DY6006 of all of its obligations under the loan agreement as borrower. The loan is payable in 60 equal quarterly installments of $954,000 each, the last of which is payable by March 12, 2032, and
                bears interest at LIBOR plus a margin of 2.3%.

            

            

            On March 29, 2016, two of our wholly-owned subsidiaries entered into a term loan agreement with ABN AMRO Bank N.V. for a loan of
                $25.755 million, drawn on March 30, 2016, to finance the acquisition cost of the Selina and the Ismene. The loan is payable in eight consecutive quarterly installments of $855,000 each and a balloon installment of $18.9 million payable
                together with the last installment by June 30, 2019. The first repayment installment was repaid on September 30, 2017. The loan bears interest at LIBOR plus a margin of 3%.

            

            

            On May 10, 2016, one of our wholly-owned subsidiaries entered into a term loan agreement with DNB Bank ASA and the CEXIM Bank for a
                loan of $13.51 million, drawn on the same date, being the purchase price of the Maera. The loan is payable in seven equal consecutive quarterly installments of $19,775 each, four equal consecutive quarterly installments of $282,500 each and
                a balloon of about $12.2 million payable together with the last installment on January 4, 2019. The loan bears interest at LIBOR plus a margin of 3% per annum. Subsequently to December 31, 2017, and according to the terms of the loan
                agreement, we prepaid an additional amount of $289,177 which will be deducted from the balloon and which was reclassified as current in the consolidated balance sheet as at December 31, 2017.

            

            

            Under the secured term loans outstanding as of December 31, 2017, 46 vessels of the Company's fleet were mortgaged with first
                preferred or priority ship mortgages. Additional securities required by the banks include first priority assignment of all earnings, insurances, first assignment of time charter contracts with duration that exceeds a certain period, pledge
                over the shares of the borrowers, manager's undertaking and subordination and requisition compensation and either a corporate guarantee by Diana Shipping Inc. (the "Guarantor") or a guarantee by the ship owning companies (where applicable),
                financial covenants, as well as operating account assignments. The lenders may also require additional security in the future in the event the borrowers breach certain covenants under the loan agreements. The secured term loans generally
                include restrictions as to changes in management and ownership of the vessels, additional indebtedness, as well as minimum requirements regarding hull cover ratio and minimum liquidity per vessel owned by the borrowers, or the guarantor,
                maintained in the bank accounts of the borrowers, or the guarantor. Furthermore, the secured term loans contain cross default provisions and additionally the Company is not permitted to pay any dividends following the occurrence of an event
                of default.

            
              
                


            

            

            

            

            

            

            

            As at December 31, 2016, we were not in compliance with the minimum security cover requirement, under our $165.0 million loan
                facility with BNP Paribas. We estimated the shortfall to be $25.7 million and as such an amount of $19.7 million, representing the amount which would have to be paid to the bank, was reclassified as current in the consolidated balance sheet
                as at December 31, 2016. In addition, we received a waiver from the Commonwealth Bank, valid until December 31, 2016, for the non-compliance with the minimum required security cover, which was amended to a lower level than the one stated in
                the loan agreement. On January 13, 2017, the bank extended its consent for the use of the lower minimum required security cover until June 30, 2017. As of December 31, 2017 and the date of this report, we were in compliance with all of our
                loan covenants.

            

            

            Senior Notes due 2020

            

            

            On May 28, 2015, we issued $55.0 million aggregate principal amount of our 8.5% senior unsecured notes due 2020, or our Notes, in a
                registered public offering and on June 5, 2015, we issued an additional $8.25 million aggregate principal amount of the Notes, pursuant to the underwriters' option to purchase additional Notes. The Notes will mature on May 15, 2020, and
                effective May 15, 2017 may be redeemed in whole or in part at any time at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Notes bear
                interest at a rate of 8.500% per annum, payable quarterly on each February 15, May 15, August 15 and November 15, commencing on August 15, 2015. The Notes commenced trading on the NYSE on May 29, 2015 under the symbol "DSXN."

            

            

            
              
                


            

            

            

            5 BOARD OF DIRECTORS AND SENIOR MANAGEMENT

            5.1 Board of Directors

            Overview

            Set forth below are the names, ages and positions of our directors and executive officers. Our board of directors is elected annually
                on a staggered basis, and each director elected holds office for a three-year term and until his or her successor is elected and has qualified, except in the event of such director’s death, resignation, removal or the earlier termination of
                his or her term of office. Officers are appointed from time to time by our board of directors and hold office until a successor is appointed or their employment is terminated.

            

            

            	
                    Name of director

                  	
                    Position

                  
	
                    Simeon P. Palios

                  	
                    Class I Director, Chief Executive Officer and Chairman of the Board

                  
	
                    Anastasios C. Margaronis

                  	
                    Class I Director and President

                  
	
                    Andreas Michalopoulos

                  	
                    Class III Director, Chief Financial Officer and Treasurer

                  
	
                    Ioannis G. Zafirakis

                  	
                    Class I Director, Chief Strategy Officer and Secretary

                  
	
                    Semiramis Paliou

                  	
                    Class III Director and Chief Operating Officer

                  
	
                    William (Bill) Lawes

                  	
                    Class II Director

                  
	
                    Apostolos Kontoyannis

                  	
                    Class III Director

                  
	
                    Konstantinos Fotiadis

                  	
                    Class III Director

                  
	
                    Konstantinos Psaltis

                  	
                    Class II Director

                  
	
                    Kyriacos Riris

                  	
                    Class II Director

                  
	
                    Christos Glavanis

                  	
                    Class I Director

                  


            

            

            The term of our Class I directors expires in 2021, the term of our Class II directors expires in 2019, and the term of our Class III
                directors expires in 2020.

            

            

            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.

            5.2 Senior Management

            Overview

            The Senior Management of the Company consists of five individuals. The names of the members of the Senior Management as at the date
                of this Prospectus, and their respective positions, are presented in the table below:

            

            

            	
                    Name of officer

                  	
                    Position

                  
	
                    Simeon Palios

                  	
                    Chief Executive officer

                  
	
                    Anastasios Margaronis

                  	
                    President

                  
	
                    Ioannis Zafirakis

                  	
                    Chief Strategy Officer and Secretary

                  
	
                    Semiramis Paliou

                  	
                    Chief Operating Officer

                  
	
                    Andreas Michalopoulos

                  	
                    Chief Financial Officer and Treasurer

                  


            

            

            All members of the Senior Management are employed by Diana Shipping Services S.A.

            

            

            The Company's principal executive office, Pendelis 16, 175 64 Palaio Faliro, Athens, Greece, serves as the business address for the
                members of Senior Management in relation to their positions in the Company.

            

            

            Biographies of the members of the Senior Management:

            Set out below are brief biographies of the members of the Senior Management, including their relevant management expertise and
                experience, an indication of any significant principal activities performed  by them outside the Company and names of companies and partnerships of which a member of the Senior Management is or has been a member of the administrative,
                management or supervisory bodies or partner the previous five years (not including directorships and management positions in subsidiaries of the Company).

            Simeon P. Palios - Director, Chief Executive Officer
                and Chairman of the Board

            
              
                


            

            

            

            

            

            Simeon P. Palios has served as the Chief Executive Officer and Chairman of Diana Shipping Inc. since February 21, 2005 and as a
                Director since March 9, 1999 and has served as the Chief Executive Officer and Chairman of Diana Containerships Inc. since January 13, 2010. Mr. Palios also serves currently as the President of Diana Shipping Services S.A., our management
                company. Prior to November 12, 2004, Mr. Palios was the Managing Director of Diana Shipping Agencies S.A. Since 1972, when he formed Diana Shipping Agencies S.A., Mr. Palios has had overall responsibility for its activities. 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 is a member of various leading classification societies worldwide and he is a member of the board of directors of the United Kingdom Freight Demurrage and Defense Association Limited. Mr.
                Palios has also served as President of the Association "Friends of Biomedical Research Foundation, Academy of Athens" since 2015. He holds a bachelor's degree in Marine Engineering from Durham University.

            Anastasios C. Margaronis - Director and President 

            Anastasios C. Margaronis has served as our President and as a Director since February 21, 2005 and has served as the Director and
                President of Diana Containerships Inc. since January 13, 2010. Mr. Margaronis is a Deputy President of Diana Shipping Services S.A., where he also serves as a Director and Secretary. Prior to February 21, 2005, Mr. Margaronis was employed
                by Diana Shipping Agencies S.A. and performed on our behalf the services he now performs as President. He joined Diana Shipping Agencies S.A. in 1979 and has been responsible for overseeing our vessels' insurance matters, including hull and
                machinery, protection and indemnity and war risks insurances. Mr. Margaronis has experience in the shipping industry, including in ship finance and insurance, since 1980. He is a member of the Greek National Committee of the American Bureau
                of Shipping and a member of the board of directors of the United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited. He holds a bachelor's degree in Economics from the University of Warwick and a master's of science degree in
                Maritime Law from the Wales Institute of Science and Technology.

            Andreas Michalopoulos - Director, Chief Financial
                Officer and Treasurer

            Andreas Michalopoulos has served as the Company’s Chief Financial Officer and Treasurer since March 8, 2006 and also has served in
                these positions with Diana Containerships Inc. since January 13, 2010. Mr. Michalopoulos started his career in 1993 when he joined Merrill Lynch Private Banking in Paris. In 1995, he became an International Corporate Auditor with Nestle SA
                based in Vevey, Switzerland and moved in 1998 to the position of Trade Marketing and Merchandising Manager. From 2000 to 2002, he worked for McKinsey and Company in Paris, France, as an Associate Generalist Consultant before joining a major
                Greek Pharmaceutical Group with U.S. R&D activity as a Vice President of International Business Development and Member of the Executive Committee in 2002 where he remained until 2005. From 2005 to 2006, he joined Diana Shipping Agencies
                S.A. as a Project Manager. Mr. Michalopoulos graduated from Paris IX Dauphine University with Honors in 1993 obtaining an MSc in Economics and a master's degree in Management Sciences specialized in Finance. In 1995, he also obtained a
                master's degree in Business Administration from Imperial College, University of London. Mr. Andreas Michalopoulos is married to the youngest daughter of Mr. Simeon Palios, the Company’s Chief Executive Officer and Chairman.

            Ioannis G. Zafirakis - Director, Chief Strategy Officer
                and Secretary

            Ioannis G. Zafirakis has served as our Director, Chief Strategy Officer and Secretary since August 2018. Under his capacity as Chief
                Strategy Officer, Mr. Zafirakis is responsible for establishing and reviewing key strategic priorities and translating them into a comprehensive strategic plan, monitoring the execution of the plan, facilitating and driving key strategic
                initiatives through inception phase. He is also responsible for communicating the Company's strategy and overall goals internally and externally. In addition, Mr. Zafirakis is the Chief Strategy Officer of Diana Shipping Services S.A.,
                where he also serves as Director and Treasurer. Since February 2005, Mr. Zafirakis served for the same companies in various positions such as Chief Operating Officer, Executive Vice-President and Vice-President. From June 1997 to February
                2005, Mr. Zafirakis was employed by Diana Shipping Agencies S.A. where he held a number of positions in its finance and accounting department. He currently also serves as Director, Chief Strategy Officer and Secretary of Diana
                Containerships 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. 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.

            Semiramis Paliou - Director and Chief Operating Officer

            Semiramis Paliou has served as a Director of Diana Shipping Inc. since March 2015.  Mrs. Paliou has almost 20 years of experience in
                shipping operations, technical management and crewing.  Mrs. Paliou began her career at Lloyd’s Register of Shipping from 1996 to 1998 as a trainee ship surveyor.  She was then employed by Diana Shipping Agencies S.A. From 2007 to 2010 she
                was employed as a Director and President of Alpha Sigma Shipping Corp. From February 2010 to November 2015 she was the Head of the Operations, Technical and Crew department of Diana Shipping Services S.A. From November 2015 to October 2016
                she served as Vice President of the same company. From November 2016 to the end of July 2018, she served as Managing Director and Head of the Technical, Operations, Crew and Supply department of Unitized Ocean Transport Limited. As of
                August 2018, she is the Chief Operating Officer of Diana Shipping Inc. and Diana Shipping Services S.A. As of November 2018, she is the Chief Operating Officer of Diana Containerships Inc. Mrs. Paliou obtained her BSc in Mechanical
                Engineering from Imperial College, London and her MSc in Naval Architecture from University College, London.  She is the

            
              
                


            

            

            

            daughter of Simeon Palios, our Chief Executive Officer and Chairman, and is a member of the Greek committee of Det Norske Veritas -
                Germanischer Lloyd, a member of the Greek committee of Nippon Kaiji Kyokai and a member of the Greek committee of Bureau Veritas.

            5.3 Conflicts of interest

            Certain of our officers and directors are officers and directors of Diana Containerships Inc. and have fiduciary duties to manage our
                business in a manner beneficial to us and our shareholders, as well as a duty to the shareholders of Diana Containerships Inc. Consequently, these officers and directors may encounter situations in which their fiduciary obligations to Diana
                Containerships and to us are in conflict. The resolution of these conflicts may not always be in our best interest or that of our shareholders and could have a material adverse effect on our business, results of operations, cash flows and
                financial condition.

            

            

            5.4 Corporate Governance

            Pursuant to an exception for foreign private issuers, Diana, as a Marshall Islands company, is not required to comply with the
                corporate governance practices followed by U.S. companies under the NYSE listing standards. We believe that our established practices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate
                protection to our shareholders. In fact, we have voluntarily adopted NYSE required practices, such as (a) having a majority of independent directors, (b) establishing audit, compensation and nominating committees and (c) adopting a Code of
                Ethics. The significant differences between our corporate governance practices and the NYSE standards are set forth below.

            Executive Sessions

            The NYSE requires that non-management directors meet regularly in executive sessions without management. The NYSE also requires that
                all independent directors meet in an executive session at least once a year. As permitted under Marshall Islands law and our bylaws, our non-management directors do not regularly hold executive sessions without management and we do not
                expect them to do so in the future.

            Shareholder Approval of Equity Compensation Plans

            The NYSE requires listed companies to obtain prior shareholder approval to adopt or materially revise any equity compensation plan.
                As permitted under Marshall Islands law and our amended and restated bylaws, we do not need prior shareholder approval to adopt or revise equity compensation plans, including our equity incentive plan.

            Corporate Governance Guidelines

            The NYSE requires companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things:
                director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance
                evaluation. We are not required to adopt such guidelines under Marshall Islands law and we have not adopted such guidelines.

            

            

            5.5 Compensation and Equity incentive plan

            Compensation

            Aggregate executive compensation (including amounts paid to Steamship Shipbroking Enterprises Inc. (or “Steamship”, formerly Diana Enterprises Inc.) pursuant to Brokerage Services Agreements) for 2017 was $3.7 million. Since June 1, 2010, Steamship, a related party company, has
                provided to us brokerage services. Under the Brokerage Services Agreements in effect during 2017, fees for 2017 amounted to $1.8 million. We consider fees under these agreements to be part of our executive compensation due to the
                affiliation with Steamship. We expect such fees to remain the same in 2018.

            

            

            Non-employee directors receive annual compensation in the amount of $52,000 plus reimbursement of out-of-pocket expenses. In
                addition, each non-executive serving as chairman or member of a committee receives additional annual compensation of $26,000 or $13,000, respectively, plus reimbursement of out-of-pocket expenses. Since August 2018, the annual compensation
                of the chairman of the audit and compensation committee increased to $40,000 and the annual compensation of the member of the audit committee increased to $26,000. For 2017, 2016 and 2015, fees and expenses of our non-executive directors amounted to $0.4 million, $0.4 million and $0.4 million, respectively.

            

            

            Since 2008 and until the date of this prospectus, our board of directors has awarded an aggregate amount of 11,675,241 shares of
                restricted common stock, of which 9,654,657 shares were awarded to senior management and 2,020,584 shares were awarded to non-employee directors. All restricted shares vest ratably over three years, except for 600,000 shares awarded in 2008
                which vested ratably over a period of six years until 2014 and 1,314,000 shares awarded in 2014 which will

            
              
                


            

            

            

            vest ratably over a period of six years until 2022. The restricted shares are subject to forfeiture until they become vested. Unless
                they forfeit their shares, 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 2017, compensation costs relating to the aggregate amount of restricted stock awards amounted to $8.2 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, or the 2014 Plan, for
                5,000,000 common shares, of which, currently, 1,124,759 shares remain reserved for issuance.

            

            

            Under the 2014 Plan, the Company’s employees, officers and directors are entitled to receive options to acquire the Company’s common
                stock. The 2014 Plan is administered by the Compensation Committee of the Company’s Board of Directors or such other committee of the Board as may be designated by the Board. Under the terms of the 2014 Plan, the Company’s Board of
                Directors is able to grant a) incentive stock options, b) non-qualified stock options, c) stock appreciation rights, d) dividend equivalent rights, e) restricted stock, f) unrestricted stock, g) restricted stock units, and h) performance
                shares. No options, stock appreciation rights or restricted stock units can be exercisable prior to the first anniversary or subsequent to the tenth anniversary of the date on which such award was granted. Under the 2014 Plan, the
                Administrator may waive or modify the application of forfeiture of awards of restricted stock and performance shares in connection with cessation of service with the Company.

            5.6 Compensation committee

            We have established a Compensation Committee comprised of two members, which, as directed by its written charter, is responsible for
                setting the compensation of executive officers of the Company, reviewing the Company’s incentive and equity-based compensation plans, and reviewing and approving employment and severance agreements. The members of the Compensation Committee
                are Mr. Apostolos Kontoyannis (Chairman) and Mr. Konstantinos Psaltis (member).

            5.7 Nominating committee

            We have established a Nominating Committee comprised of two members, which, as directed by its written charter, is responsible for
                identifying, evaluating and making recommendations to the board of directors concerning individuals for selections as director nominees for the next annual meeting of stockholders or to otherwise fill board of director vacancies. The
                members of the Nominating Committee are Mr. Konstantinos Psaltis (Chairman) and Mr. Kyriacos Riris (member).

            5.8 Audit committee

            We have established an Audit Committee, comprised of two board members, which is responsible for reviewing our accounting controls,
                recommending to the board of directors the engagement of our independent auditors, and pre-approving audit and audit-related services and fees. Each member has been determined by our board of directors to be “independent” under the rules of
                the NYSE and the rules and regulations of the SEC. As directed by its written charter, the Audit Committee is responsible for appointing, and overseeing the work of the independent auditors, including reviewing and approving their
                engagement letter and all fees paid to our auditors, reviewing the adequacy and effectiveness of the Company’s accounting and internal control procedures and reading and discussing with management and the independent auditors the annual
                audited financial statements. The members of the Audit Committee are Mr. William Lawes (Chairman and financial expert) and Mr. Apostolos Kontoyannis (member and financial expert).

            5.9 Executive committee

            We have established an Executive Committee comprised of the five executive directors, Mr. Simeon Palios (Chairman), Mr. Anastasios
                Margaronis (member), Mr. Ioannis Zafirakis (member), Mr. Andreas Michalopoulos (Member) and Mrs. Semiramis Paliou (Member). The Executive Committee has, to the extent permitted by law, the powers of the Board of Directors in the management
                of the business and affairs of the Company.

            We also maintain directors’ and officers’ insurance, pursuant to which we provide insurance coverage against certain liabilities to
                which our directors and officers may be subject, including liability incurred under U.S. securities law. Our executive directors have employment agreements, which, if terminated without cause, entitle them to continue receiving their basic
                salary through the date of the agreement’s expiration.

            5.10 Employees

            We crew our vessels primarily with Greek officers and Filipino officers and seamen and may also employ seamen from Poland, Rumania
                and Ukraine. DSS and DWM are responsible for identifying the appropriate officers and seamen mainly through crewing agencies. The crewing agencies handle each seaman’s training, travel and payroll. The management companies ensure that all
                our seamen have the qualifications and licenses required to comply with international regulations and shipping conventions. Additionally, our seafaring employees perform most commissioning work and supervise work at shipyards and drydock
                facilities. We typically man our vessels with more crew members than are required by the country of the vessel’s flag

            
              
                


            

            

            

            in order to allow for the performance of routine maintenance duties. The following table presents the number of shoreside personnel
                employed by DSS and the number of seafaring personnel employed by our vessel-owning subsidiaries as at December 31, 2017, 2016 and 2015.

            

            

            

            
              
                


            

            

            

            6 FINANCIAL INFORMATION

            6.1 Introduction

            The tables set out in this section present selected financial information derived from the Group's audited consolidated annual
                financial statements for the years ended 31 December 2017 and 2016 (both available on the Company’s web page).

            

            

            The consolidated financial statements of Diana Shipping Inc. appearing in Diana Shipping Inc.'s Annual Report for the year ended
                December 31, 2017 and the effectiveness of Diana Shipping Inc.'s internal control over financial reporting as of December 31, 2017 have been audited by Ernst & Young (Hellas) Certified Auditors-Accountants S.A., independent registered
                public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such consolidated financial statements are incorporated herein by reference in reliance upon such reports given on the
                authority of such firm as experts in accounting and auditing. Ernst & Young (Hellas) Certified Auditors-Accountants S.A. is located at Chimarras 8B, 15125, Maroussi, Athens, Greece and is registered as a corporate body with the public
                register for company auditors-accountants kept with the Body of Certified-Auditors-Accountants ("SOEL"), Greece with registration number 107. No auditor have resigned, been removed or not been re-appointed during the period covered by the
                historical financial information.

            6.2 Audit report of historical annual financial information

            

            

            REPORT OF INDEPENDENT

            REGISTERED PUBLIC ACCOUNTING FIRM

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

            Opinion on Internal Control over Financial Reporting

            We have audited Diana Shipping Inc.’s internal control over financial reporting as of December 31, 2017, based on criteria
                established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Diana Shipping Inc. (the Company) maintained, in all
                material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

            

            

            We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
                consolidated balance sheets of Diana Shipping Inc. as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period
                ended December 31, 2017, and the related notes and our report dated March 16, 2018, expressed an unqualified opinion thereon.

            Basis for Opinion

            The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of
                the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
                control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
                applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

            

            

            We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
                obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

            

            

            Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
                weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
                provides a reasonable basis for our opinion.

            Definition and Limitations on Internal Control over Financial Reporting

            A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
                of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
                procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
                recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
                management and directors of

            
              
                


            

            

            

            the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
                disposition of the company’s assets that could have a material effect on the financial statements.

            

            

            Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
                projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

            

            

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

            Athens, Greece

            March 16, 2018

            

            

            6.3 Financial Information

            The following tables set forth our consolidated financial data as of and for the years ended December 31, 2017 and 2016, and the
                three months nine months ended September 30, 2018 and 2017. The consolidated financial data as of and for the years ended December 31, 2017 and 2016 are derived from our audited consolidated financial statements and notes thereto which have
                been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP. The following data should be read in conjunction with the consolidated financial statements, related notes and other financial information
                included in the 2017 annual report.

            

            

            
              
                


            

            

            

            6.4 Consolidated statements of operations and comprehensive loss

            The tables below set out our consolidated statements of operations and comprehensive loss for the years ended 2017, 2016 and 2015 and
                for the three months and nine months ended September 30, 2018 and 2017 (unaudited).

            

            

            

            

            

            

            

            
              
                


            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            Interim (unaudited)

            

            

            

            

            

            

            

            

            

            
              
                


            

            

            

            

            
              

              

              6.5 Consolidated statements of financial position

              The tables below set out our consolidated statements of financial position as of the years ended 2017 and 2016 and the condensed unaudited
                consolidated statement of financial position for the nine months ended September 30, 2018.

              

              

              Annual

              

              

              

              

              

              

              

              
                
                  


              

              

              

              Interim (unaudited)

              

              

              

              

              

              

              

              
                
                  


              

              

              

              6.6 Consolidated statements of cash flow

              The tables below set out our audited consolidated statements of cash flows for the years ended December 31, 2017, 2016 and 2015 and
                  our interim unaudited cash flow data for the three months and nine months ended September 30, 2018 and 2017.

              

              

              Annual

              

              

              

              
                
                  


              

              

              

              

              

              

               

              

              Interim (unaudited)

              

              

              

              
                
                  


              

              

              

              

              

              

              

              

              

              

              

              

              

              

              

              6.7 Consolidated statements of changes in equity

              The table below sets out our selected data from the Group’s audited consolidated statements of changes in equity for the years
                  ended 2017, 2016 and 2015

              

              

              

              6.8 Holders and share capital

              The following table shows the 20 largest public shareholders as per 2 October 2018. Countries of incorporation among the
                  shareholders include among other United States, United Kingdom and Greece.

              

              

              

              Source: Bloomberg

              
                
                  


              

              

              

              

              

              

              

              Major shareholders

              The following table sets forth information regarding ownership of our common stock of which we are aware as of November 20, 2018,
                  for (i) beneficial owners of five percent or more of our common stock and (ii) our officers and directors, individually and as a group. All of our shareholders, including the shareholders listed in this table, are entitled to one vote for
                  each share of common stock held.

              	
                      Title of Class

                    	
                      Identity of Person or Group

                    	
                      Number of

                      Shares Owned

                    	
                      Percent of Class*

                    	 
	
                      Common Stock, par value $0.01

                    	
                      Simeon Palios (1)

                    	
                      24,964,707

                    	
                       

                    	
                      23.1

                    
	
                       

                    	
                       

                    	
                      Franklin Resources Inc. (2)

                    	
                      12,833,190

                    	
                       

                    	
                      11.9

                    
	
                       

                    	
                       

                    	
                      Kopernik Global Investors, LLC (3)

                    	
                       5,573,381

                    	
                       

                    	
                      5.2

                    
	
                       

                    	
                       

                    	
                      All officers and directors as a group (4)

                    	
                      29,658,208

                    	
                       

                    	
                      27.5

                    


              
                

                

              

              
                * Based on 107,931,017 common shares outstanding as of November 20, 2018.

              

              
                

                

              

              	
                      (1)

                    	
                      Mr. Simeon Palios indirectly may be deemed to beneficially own 9,524,360 shares beneficially owned by Ironwood Trading
                          Corp. and 15,440,347 shares beneficially owned by Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.), including 4,762,180 shares beneficially owned through Corozal Compania Naviera S.A., as the result of his
                          ability to control the vote and disposition of such entities, for an aggregate of 24,964,707 shares. As of December 31, 2015, 2016 and 2017, Mr. Simeon Palios owned indirectly 20.6%, 22.2% and 22.5%, respectively, of our
                          outstanding common stock.

                    
	
                      (2)

                    	
                      This information is derived from a Schedule 13G/A filed with the SEC on February 6, 2018.

                    
	
                      (3)

                    	
                      This information is derived from a Schedule 13G/A filed with the SEC on February 9, 2018.

                    
	
                      (4)

                    	
                      Mr. Simeon Palios is our only director or officer that beneficially owns 5% or more of our outstanding common stock. Mr.
                          Anastasios Margaronis, our President and a member of our board of directors is indirect shareholder through ownership of stock held among others in Corozal Compania Naviera S.A., and Ironwood Trading Corp. Mr. Margaronis does not
                          have dispositive or voting power with regard to shares held by Corozal Compania Naviera S.A. and Ironwood Trading Corp. and, accordingly, is not considered to be beneficial owner of our common shares held through Corozal Compania
                          Naviera S.A. and Ironwood Trading Corp. Mr. Anastasios Margaronis also owns indirectly 3.2% of our outstanding common stock. All other officers and directors each owns less than 1% of our outstanding common stock. In addition,
                          Steamship Shipbroking Enterprises Inc. (formerly Diana Enterprises Inc.) owns indirectly 100,390, or 3.9% of the outstanding Series B Preferred Shares and Mr. Anastasios Margaronis owns indirectly 28,025, or 1.1% of the
                          outstanding Series B Preferred Shares. All officers and directors as a group own 133,575, or 5.1% of our outstanding Series B Preferred Shares.

                    


              

              

              Share capital

              Under our amended and restated articles of incorporation, as of the date of this prospectus, our authorized capital stock consists
                  of 200,000,000 shares of common stock, par value $0.01 per share, of which 107,931,017 shares are issued and outstanding, and 25,000,000 shares of preferred stock, par value $0.01 per share, of which (i) 1,000,000 shares are designated
                  Series A Participating Preferred Stock, none of which is issued and outstanding, and (ii) 5,000,000 shares are designated Series B Preferred Stock, 2,600,000 shares of which are issued and outstanding.  All of our shares of stock are in
                  registered form.

              Common Stock

              Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Subject
                  to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock are entitled to receive ratably all dividends, if any, declared by our board of directors out of funds legally available
                  for dividends. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation
                  preferences, if any, the holders of our common stock will be entitled to receive pro rata our remaining assets available for distribution. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any
                  of our securities. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of our preferred stock.

              Preferred Stock

              Our board of directors is authorized to provide for the issuance of preferred stock in one or more series with designations as may
                  be stated in the resolution or resolutions providing for the issue of such preferred stock.  At the time that any series of our preferred stock is authorized, our board of directors will fix the dividend rights, any conversion rights, any
                  voting rights, redemption provisions, liquidation preferences and any other rights, preferences, privileges and restrictions of that series, as well as the number of shares constituting that series and their designation.  Our board of
                  directors could, without shareholder approval, cause us to issue preferred stock which has voting, conversion and other rights and preferences that could adversely affect the voting power and other rights of holders of our common stock,
                  Series A Participating Preferred Stock and Series B Preferred Stock, or make it more difficult to effect a change in control.  In addition, preferred stock could be used to dilute the share ownership of persons seeking to obtain control
                  of us and thereby hinder a possible takeover attempt which, if our shareholders were offered a premium over the market value of their shares, might be viewed as being beneficial to our

              
                
                  


              

              

              

              shareholders. The material terms of any series of preferred stock that we offer through a prospectus supplement will be described
                  in that prospectus supplement.

              Series B Cumulative Redeemable Perpetual Preferred Stock

              Our Series B Preferred Stock is senior in rank to our Series A Participating Preferred Stock.  Holders of our Series B Preferred
                  Stock 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.  Holders of our Series B Preferred Stock rank prior to the holders of our common stock with respect to dividends, distributions and payments upon liquidation.  Dividends on our Series B Preferred Stock are cumulative from
                  the date of original issue and are payable on the 15th day of January, April, July and October of each year at the dividend rate of 8.875% per annum, or $2.21875 per annum per share. At any time on or after February 14, 2019, we may
                  redeem, in whole or in part, the Series B Preferred Stock 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.

              6.9 Capital expenditures

              We make capital expenditures from time to time in connection with vessel acquisitions and constructions, which we finance among
                  others with cash from operations, debt under loan facilities at terms acceptable to us, with funds from equity issuances and senior unsecured notes. Our main uses of funds have been capital expenditures for the acquisition and
                  construction of new vessels, expenditures incurred in connection with ensuring that our vessels comply with international and regulatory standards, repayments of bank loans and payment of our preferred dividends. Since the date of the
                  last published financial statements of December 31, 2017, we do not have capital expenditures for vessel acquisitions or constructions, but we incur capital expenditures when our vessels undergo surveys and to comply with new regulatory
                  standards. This process of recertification or vessel improvements may require us to reposition these vessels from a discharging port to shipyard facilities, which will reduce our operating days during the period. The loss of earnings
                  associated with the decrease in operating days together with the capital needs for repairs and upgrades result in increased cash flow needs. We expect to cover such capital expenditures and cash flow needs with cash from operations and
                  cash on hand. Since the date of the last published financial statements of December 31, 2017 and as of the date of this prospectus, the Company has not made any principal investments or any firm commitments on future investments.

              6.10 Significant changes, trends and other factors affecting results

              Since the date of the Company’s last published audited financial statements of December 31, 2017, the following material events
                  have taken place:

              
                
                  	

                        	(i)	
                          The Company has received the outstanding balance of a loan receivable from a related party amounting to $82.7 million as of December 31, 2017, and
                              as such the loan receivable has been reduced to zero.

                        


                

              

              
                
                  	

                        	(ii)	
                          On July 13, 2018, the Company entered into a term loan facility with BNP Paribas for an amount of up to $75.0 million to refinance an existing loan
                              facility with the bank having an outstanding balance of $130.0 million at the date of refinancing. The loan of $130.0 million was repaid in full on July 16, 2018 by using the $75.0 million loan proceeds and cash on hand.

                        


                

              

              
                
                  	

                        	(iii)	
                          On October 29, 2018, the Company redeemed in full its senior notes amounting to $63.25 million, which until the date of redemption were trading on
                              the NYSE under the symbol "DSXN".

                        


                

              

              
                
                  	

                        	(iv)	
                          On November 5, 2018, the Company through a wholly owned subsidiary entered into a Memorandum of Agreement to sell the vessel “Triton” to an
                              unaffiliated third party, for a sale price of $7.35 million before commissions.

                        


                

              

              
                
                  	

                        	(v)	
                          On November 9, 2018 the Company through a wholly owned subsidiary entered into a Memorandum of Agreement to sell the vessel “Alcyon” to an
                              unaffiliated third party, for a sale price of $7.45 million before commissions.

                        


                

              

              
                
                  	

                        	(vi)	
                          On November 21, 2018 the Company announced the commencement of a tender offer to purchase up to 4,166,666 shares, or about 3.86%, of its outstanding
                              common stock using funds available from cash and cash equivalents at a price of US$3.60 per share. The tender offer will expire at the end of the day, 5:00 P.M., Eastern Time, on December 20, 2018, unless extended or
                              withdrawn.

                        


                

              

              Since the date of the Company’s last published audited financial statements of December
                  31, 2017, and as of the date of this prospectus there has been no material adverse change in the prospects of the issuer and there has been no significant change in the financial or trading position of the Group other than as disclosed in
                  this prospectus that would have a material extent relevant to the evaluation of the issuer’s solvency.

              

              

              
                
                  


              

              

              

              

              

              6.11 Legal and arbitration proceedings

              The Company is not aware of any ongoing, pending or threatened governmental, legal or arbitration proceedings during the previous
                  12 months that may have or have had in the recent past a significant effect on the Company and/or the Group’s financial position or profitability.

              6.12 Material contracts

              There are no material contracts that are entered into outside the ordinary course of the Issuer’s business, which could result in
                  any group member being under an obligation or entitlement that is material to the Issuer’s ability to meet its obligation to security holders in respect of the securities being issued.

              6.13 Documents on display

              The following documents (or copies thereof) may be inspected for twelve months from the date of this Registration Document at the
                  Company’s corporate office16 Pendelis Str., 175 64 Palaio Faliro, Athens, Greece, during normal business hours from Monday through Friday each week (except public holidays):

              

              

              
                
                  	

                        	a)	
                          the Articles of Incorporation and Bylaws of the Company;

                        


                

              

              
                
                  	

                        	b)	
                          all reports, letters, and other documents, historical financial information, valuations and statements prepared by any expert at the Company’s
                              request any part of which is included or referred to in the Registration Document;

                        


                

              

              
                
                  	

                        	c)	
                          the historical financial information of the Company and its subsidiary undertakings for each of the two financial years preceding the publication of
                              the Registration Document.

                        


                

              

              

              

              
                
                  


              

              

              

              7 LEAD MANAGERS’ DISCLAIMER

              

              

              Fearnley Securities AS and Nordea Bank Abp, filial i Norge (the Lead Managers) has assisted the Company in preparing this
                  Registration Document. The Lead Managers has not verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and the Lead Manager expressively disclaim any legal or
                  financial liability as to the accuracy or completeness of the information contained in this Registration Document or any other information supplied in connection with bonds issued by Diana Shipping Inc. or their distribution. The
                  statements made in this paragraph are without prejudice to the responsibility of the Company. Each person receiving this Registration Document acknowledges that such person has not relied on the Lead Managers nor any person affiliated
                  with it in connection with its investigation of the accuracy of such information or its investment decision.

              

              

              Confidentiality rules and internal rules restricting the exchange of information between different parts of the Lead Managers may
                  prevent employees of the Lead Managers who are preparing this Registration Document from utilizing or being aware of information available to the Lead Managers and/ or any of their affiliated companies and which may be relevant to the
                  recipient’s decisions

              

              

              

              

              3 December 2018 Oslo, Norway

              

              

              Fearnley Securities AS and Nordea Bank Abp, filial i Norge

              

              

              
                
                  


              

              

              

              8 DEFINITIONS AND GLOSSARY

              
                
                  	·	
                          Bulk Carriers - Vessels which are specially designed and built to carry large volumes of cargo in bulk cargo form.

                        


                

              

              
                
                  	·	
                          Bunkers - Heavy fuel oil used to power a vessel's engines.

                        


                

              

              
                
                  	·	
                          Capesize - A dry bulk carrier having a carrying capacity of 110,000 dwt to 199,999 dwt.

                        


                

              

              
                
                  	·	
                          Charter - The hire of a vessel for a specified period of time to carry a cargo for a fixed fee from a loading port to a discharging port. The
                              contract for a charter is called a charterparty.

                        


                

              

              
                
                  	·	
                          Charterer - The individual or company hiring a vessel.

                        


                

              

              
                
                  	·	
                          Charter Hire Rate - A sum of money paid to the vessel owner by a charterer under a time charterparty for the use of a vessel.

                        


                

              

              
                
                  	·	
                          Classification Society - An independent organization which certifies that a vessel has been built and maintained in accordance with the rules of
                              such organization and complies with the applicable rules and regulations of the country of such vessel and the international conventions of which that country is a member.

                        


                

              

              
                
                  	·	
                          Deadweight Ton-"dwt" - A unit of a vessel's capacity for cargo, fuel oil, stores and crew, measured in metric tons of 1,000 kilograms. A vessel's
                              DWT or total deadweight is the total weight the vessel can carry when loaded to a particular load line.

                        


                

              

              
                
                  	·	
                          Draft - Vertical distance between the waterline and the bottom of the vessel's keel.

                        


                

              

              
                
                  	·	
                          Dry Bulk - Non-liquid cargoes of commodities shipped in an unpackaged state.

                        


                

              

              
                
                  	·	
                          Drydocking - The removal of a vessel from the water for inspection and/or repair of submerged parts.

                        


                

              

              
                
                  	·	
                          Hull - The shell or body of a vessel.

                        


                

              

              
                
                  	·	
                          International Maritime Organization-"IMO" - A United Nations agency that issues international trade standards for shipping.

                        


                

              

              
                
                  	·	
                          Metric Ton - A metric ton of 1,000 kilograms.

                        


                

              

              
                
                  	·	
                          Newbuilding - A newly constructed vessel.

                        


                

              

              
                
                  	·	
                          Panamax - A dry bulk carrier of approximately 60,000 to 79,999 dwt of maximum length, depth and draft capable of passing fully loaded through the
                              Panama Canal.

                        


                

              

              
                
                  	·	
                          Post-Panamax - A dry bulk carrier having a carrying capacity of 80,000 dwt to 109,999 dwt.

                        


                

              

              
                
                  	·	
                          Protection and Indemnity Insurance - Insurance obtained through a mutual association formed by shipowners to provide liability insurance protection
                              from large financial loss to one member through contributions towards that loss by all members.

                        


                

              

              
                
                  	·	
                          Short-Term Time Charter - A time charter which lasts less than approximately 12 months.

                        


                

              

              
                
                  	·	
                          Sister Ships - Vessels of the same class and specification which were built by the same shipyard.

                        


                

              

              
                
                  	·	
                          Time Charter - Contract for hire of a ship. A charter under which the ship-owner is paid charter hire rate on a per day basis for a certain period
                              of time, the shipowner being responsible for providing the crew and paying operating costs while the charterer is responsible for paying the voyage costs. Any delays at port or during the voyages are the responsibility of the
                              charterer, save for certain specific exceptions such as loss of time arising from vessel breakdown and routine maintenance.

                        


                

              

              
                
                  	·	
                          Ton - A metric ton of 1,000 kilograms.

                        


                

              

              

              

              
                
                  


              

              

              

              APPENDIX A – ARTICLES OF INCORPORATION

              

              

            

            

            

            

            

            

            

            

            

            

            

            

            

            

            

              

              

              

              

              

              

              

              

              
                
                  


              

              

                

                

                

                

                

                  

                  

                  
                    

                    
                      
                        


                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          


                      

                      

                      

                      

                      

                      

                    

                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      
                        
                          


                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  
                    
                      


                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          


                      

                      

                      

                      

                      

                      

                    

                    

                  

                  
                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          


                      

                      

                      

                      

                      

                      

                    

                    

                  

                  

                    

                    

                    

                    
                      
                        


                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      
                        
                          


                      

                      

                      

                      

                      

                      

                      APPENDIX B – FINANCIAL STATEMENTS

                      

                      

                      The full 2017 annual report is set out on the following pages while the Company’s
                          previous annual and quarterly report can be found on: http://www.dianashippinginc.com/investors/annual-and-quarterly-reports/

                      

                      

                      2017 Annual report direct link:

                      http://www.dianashippinginc.com/userfiles/bc94f6aa-05ac-4df6-ae9a-a307010b2cf7/DSI_Annual_Report_2017.pdf

                      2016 Annual report direct link:

                      http://www.dianashippinginc.com/userfiles/bc94f6aa-05ac-4df6-ae9a-a307010b2cf7/DSI_Annual_Report_2016.pdf

                      2015 Annual report direct link:

                      http://www.dianashippinginc.com/userfiles/bc94f6aa-05ac-4df6-ae9a-a307010b2cf7/DSI_Annual_Report_2015.pdf

                      

                      

                      2018 3rd quarter report:

                      http://www.dianashippinginc.com/userfiles/Reports/quarterly/DSX_earnings_release_300918.pdf

                      2018 2nd quarter report:

                      http://www.dianashippinginc.com/userfiles/Reports/quarterly/DSX_Earnings_Release_300618.pdf

                      2018 1st quarter report:

                      http://www.dianashippinginc.com/userfiles/Reports/quarterly/DSI_Earnings_Release_310318.pdf

                      

                      

                      

                      

                    

                    

                  

                  

                    

                    

                    

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  
                    
                      


                  

                  

                    

                    

                    
                      

                      

                      2017 Annual report

                      

                      

                      DIANA SHIPPING INC.

                      

                      

                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                      

                      

                      	
                               

                            	
                               

                            	
                              Page

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Report of Independent Registered Public Accounting Firm          

                            	
                               

                            	
                              F-2

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Report of Independent Registered Public Accounting Firm          

                            	
                               

                            	
                              F-3

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Balance Sheets as of December 31, 2017 and 2016          

                            	
                               

                            	
                              F-4

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Operations for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-5

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-5

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Stockholders' Equity for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-6

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                              F-7

                            
	
                               

                            	
                               

                            	
                               

                            
	
                              Notes to Consolidated Financial Statements          

                            	
                               

                            	
                              F-8

                            
	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            


                      

                      

                      
                        
                          


                      

                      
                      

                      

                      Report of Independent Registered Public Accounting Firm

                      

                      

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

                      

                      

                      Opinion on the Financial Statements

                      We have audited the accompanying consolidated balance sheets of Diana Shipping Inc. (the Company) as
                          of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes
                          (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and
                          2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

                      We also have audited, in accordance with the standards of the Public Company Accounting Oversight
                          Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
                          Organizations of the Treadway Commission (2013 framework) and our report dated March 16, 2018, expressed an unqualified opinion thereon.

                      Basis for Opinion

                      These financial statements are the responsibility of the Company's management. Our responsibility is
                          to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
                          federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

                      We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
                          plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
                          material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and
                          disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
                          We believe that our audits provide a reasonable basis for our opinion.

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

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

                      Athens, Greece

                          March 16, 2018

                      

                      

                      
                        F-2

                        
                          


                      

                      

                      

                      

                      

                      Report of Independent Registered Public Accounting Firm

                      

                      

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

                      Opinion on Internal Control over Financial Reporting

                      We have audited Diana Shipping Inc.'s internal control over financial reporting as of December 31,
                          2017, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Diana Shipping Inc.
                          (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.

                      We also have audited, in accordance with the standards of the Public Company Accounting Oversight
                          Board (United States) (PCAOB), the consolidated balance sheets of Diana Shipping Inc. as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows
                          for each of the three years in the period ended December 31, 2017, and the related notes and our report dated March 16, 2018, expressed an unqualified opinion thereon.

                      Basis for Opinion

                      The Company's management is responsible for maintaining effective internal control over financial
                          reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to
                          express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in
                          accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

                      We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
                          plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

                      Our audit included obtaining an understanding of internal control over financial reporting, assessing
                          the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the
                          circumstances. We believe that our audit provides a reasonable basis for our opinion.

                      Definition and Limitations on Internal Control over Financial Reporting

                      A company's internal control over financial reporting is a process designed to provide reasonable
                          assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial
                          reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
                          reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
                          being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
                          company's assets that could have a material effect on the financial statements.

                      Because of its inherent limitations, internal control over financial reporting may not prevent or
                          detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
                          policies or procedures may deteriorate.

                      

                      

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

                      Athens, Greece

                          March 16, 2018

                      

                      

                      
                        F-3

                        
                          


                      

                      

                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED BALANCE SHEETS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              December 31, 2017 and 2016

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

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

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            
	
                              ASSETS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CURRENT ASSETS:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Cash and cash equivalents  (Note 2(e))

                            	
                               

                            	
                              $

                            	
                              40,227

                            	
                               

                            	
                               

                            	
                              $

                            	
                              98,142

                            	
                               

                            
	
                              Accounts receivable, trade (Note 2(f))

                            	
                               

                            	
                               

                            	
                              4,937

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,903

                            	
                               

                            
	
                              Due from related parties (Notes  2(g) and 4(b))

                            	
                               

                            	
                               

                            	
                              82,660

                            	
                               

                            	
                               

                            	
                               

                            	
                              102

                            	
                               

                            
	
                              Inventories (Note 2(h))

                            	
                               

                            	
                               

                            	
                              5,770

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,860

                            	
                               

                            
	
                              Prepaid expenses and other assets

                            	
                               

                            	
                               

                            	
                              5,167

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,309

                            	
                               

                            
	
                              Total current assets

                            	
                               

                            	
                               

                            	
                              138,761

                            	
                               

                            	
                               

                            	
                               

                            	
                              115,316

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              FIXED ASSETS:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Advances for vessels under construction and acquisitions and other vessel costs

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              46,863

                            	
                               

                            
	
                              Vessels net book value (Note 5)

                            	
                               

                            	
                               

                            	
                              1,053,578

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,403,912

                            	
                               

                            
	
                              Property and equipment, net (Note 6)

                            	
                               

                            	
                               

                            	
                              22,650

                            	
                               

                            	
                               

                            	
                               

                            	
                              23,114

                            	
                               

                            
	
                              Total fixed assets

                            	
                               

                            	
                               

                            	
                              1,076,228

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,473,889

                            	
                               

                            
	
                              OTHER NON-CURRENT ASSETS:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Restricted cash (Notes 2(e) and 7)

                            	
                               

                            	
                               

                            	
                              25,582

                            	
                               

                            	
                               

                            	
                               

                            	
                              23,000

                            	
                               

                            
	
                              Due from related parties, non-current (Notes 2(g) and 4(b))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              45,417

                            	
                               

                            
	
                              Investments in related parties (Notes 2(v) and 3)

                            	
                               

                            	
                               

                            	
                              3,249

                            	
                               

                            	
                               

                            	
                               

                            	
                              6,014

                            	
                               

                            
	
                              Deferred charges, net (Notes 2(m), 2(n) and 5)

                            	
                               

                            	
                               

                            	
                              2,902

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,027

                            	
                               

                            
	
                              Total assets

                            	
                               

                            	
                              $

                            	
                              1,246,722

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,668,663

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              LIABILITIES AND
                                    STOCKHOLDERS' EQUITY

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CURRENT LIABILITIES:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Current portion of long-term debt, net of deferred financing costs, current (Note 7)

                            	
                               

                            	
                              $

                            	
                              60,763

                            	
                               

                            	
                               

                            	
                              $

                            	
                              65,072

                            	
                               

                            
	
                              Accounts payable, trade and other

                            	
                               

                            	
                               

                            	
                              7,954

                            	
                               

                            	
                               

                            	
                               

                            	
                              6,572

                            	
                               

                            
	
                              Due to related parties (Note 4(a) and 4(d))

                            	
                               

                            	
                               

                            	
                              271

                            	
                               

                            	
                               

                            	
                               

                            	
                              25

                            	
                               

                            
	
                              Accrued liabilities

                            	
                               

                            	
                               

                            	
                              8,246

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,734

                            	
                               

                            
	
                              Deferred revenue

                            	
                               

                            	
                               

                            	
                              3,207

                            	
                               

                            	
                               

                            	
                               

                            	
                              822

                            	
                               

                            
	
                              Total current liabilities

                            	
                               

                            	
                               

                            	
                              80,441

                            	
                               

                            	
                               

                            	
                               

                            	
                              78,225

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Long-term debt, net of current portion and deferred financing costs, non-current (Note 7)

                            	
                               

                            	
                               

                            	
                              540,621

                            	
                               

                            	
                               

                            	
                               

                            	
                              533,109

                            	
                               

                            
	
                              Other non-current liabilities

                            	
                               

                            	
                               

                            	
                              902

                            	
                               

                            	
                               

                            	
                               

                            	
                              740

                            	
                               

                            
	
                              Commitments and contingencies (Note 8)

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              STOCKHOLDERS' EQUITY:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              26

                            	
                               

                            
	
                              Common stock, $0.01 par value; 200,000,000 shares authorized and 106,131,017 and 84,696,017 issued and outstanding at
                                  December 31, 2017 and 2016, respectively (Note 9(b) and (c))

                            	
                               

                            	
                               

                            	
                              1,061

                            	
                               

                            	
                               

                            	
                               

                            	
                              847

                            	
                               

                            
	
                              Additional paid-in capital

                            	
                               

                            	
                               

                            	
                              1,070,500

                            	
                               

                            	
                               

                            	
                               

                            	
                              985,171

                            	
                               

                            
	
                              Accumulated other comprehensive income

                            	
                               

                            	
                               

                            	
                              294

                            	
                               

                            	
                               

                            	
                               

                            	
                              185

                            	
                               

                            
	
                              Retained earnings/(Accumulated deficit)

                            	
                               

                            	
                               

                            	
                              (447,123

                            	
                              )

                            	
                               

                            	
                               

                            	
                              70,360

                            	
                               

                            
	
                              Total stockholders' equity

                            	
                               

                            	
                               

                            	
                              624,758

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,056,589

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Total liabilities and stockholders' equity

                            	
                               

                            	
                              $

                            	
                              1,246,722

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,668,663

                            	
                               

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

                            	
                               

                            
	
                               

                            	
                               

                            


                      
                        F-4

                        
                          


                      

                      

                      

                      

                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF OPERATIONS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              For the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                               

                            	
                               

                            	
                               

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

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              REVENUES:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Time charter revenues

                            	
                               

                            	
                              $

                            	
                              161,897

                            	
                               

                            	
                               

                            	
                              $

                            	
                              114,259

                            	
                               

                            	
                               

                            	
                              $

                            	
                              157,712

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              EXPENSES:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Voyage expenses

                            	
                               

                            	
                               

                            	
                              8,617

                            	
                               

                            	
                               

                            	
                               

                            	
                              13,826

                            	
                               

                            	
                               

                            	
                               

                            	
                              15,528

                            	
                               

                            
	
                              Vessel operating expenses

                            	
                               

                            	
                               

                            	
                              90,358

                            	
                               

                            	
                               

                            	
                               

                            	
                              85,955

                            	
                               

                            	
                               

                            	
                               

                            	
                              88,272

                            	
                               

                            
	
                              Depreciation and amortization of deferred charges  (Notes 2(l) and 2(m))

                            	
                               

                            	
                               

                            	
                              87,003

                            	
                               

                            	
                               

                            	
                               

                            	
                              81,578

                            	
                               

                            	
                               

                            	
                               

                            	
                              76,333

                            	
                               

                            
	
                              General and administrative expenses

                            	
                               

                            	
                               

                            	
                              26,332

                            	
                               

                            	
                               

                            	
                               

                            	
                              25,510

                            	
                               

                            	
                               

                            	
                               

                            	
                              25,335

                            	
                               

                            
	
                              Management fees to related party (Notes 3(b) and 4(d))

                            	
                               

                            	
                               

                            	
                              1,883

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,464

                            	
                               

                            	
                               

                            	
                               

                            	
                              405

                            	
                               

                            
	
                              Impairment loss (Note 5)

                            	
                               

                            	
                               

                            	
                              442,274

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Insurance recoveries, net of other loss (Note 5)

                            	
                               

                            	
                               

                            	
                              (10,879

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Gain on contract termination

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,500

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Other loss/(income)

                            	
                               

                            	
                               

                            	
                              296

                            	
                               

                            	
                               

                            	
                               

                            	
                              (253

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (984

                            	
                              )

                            
	
                              Operating loss

                            	
                               

                            	
                              $

                            	
                              (483,987

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (88,321

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (47,177

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              OTHER INCOME / (EXPENSES):

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Interest and finance costs (Note 10)

                            	
                               

                            	
                               

                            	
                              (26,628

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (21,949

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (15,555

                            	
                              )

                            
	
                              Interest and other income (Note 4(b))

                            	
                               

                            	
                               

                            	
                              4,508

                            	
                               

                            	
                               

                            	
                               

                            	
                              2,410

                            	
                               

                            	
                               

                            	
                               

                            	
                              3,152

                            	
                               

                            
	
                              Loss from equity method investments (Note 3)

                            	
                               

                            	
                               

                            	
                              (5,607

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (56,377

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,133

                            	
                              )

                            
	
                              Total other expenses, net

                            	
                               

                            	
                              $

                            	
                              (27,727

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (75,916

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (17,536

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Dividends on series B preferred shares (Notes 9(a) and 11)

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss attributed to common stockholders

                            	
                               

                            	
                              $

                            	
                              (517,483

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (170,006

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (70,482

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Loss per common share,
                                    basic and diluted (Note 11)

                            	
                               

                            	
                              $

                            	
                              (5.41

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (2.11

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (0.89

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Weighted average
                                    number of common shares, basic and diluted (Note 11)

                            	
                               

                            	
                               

                            	
                              95,731,093

                            	
                               

                            	
                               

                            	
                               

                            	
                              80,441,517

                            	
                               

                            	
                               

                            	
                               

                            	
                              79,518,009

                            	
                               

                            


                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              For the years ended December 31, 2017, 2016 and 2015

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              (Expressed in thousands of U.S. Dollars)

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Other comprehensive income/(loss) (Actuarial gain/(loss))

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            
	
                              Comprehensive loss

                            	
                               

                            	
                              $

                            	
                              (511,605

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,321

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (63,697

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

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

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            


                      
                        F-5

                        
                          


                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                            	
                               

                            
	
                              For the years ended December 31, 2017, 2016 and 2015

                            	
                               

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

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                                

                            	
                               

                            	
                              Preferred Stock

                            	
                               

                            	
                               

                            	
                              Common Stock

                            	
                               

                            	
                               

                            	
                              Additional Paid-in Capital

                            	
                               

                            	
                               

                            	
                              Other Comprehensive Income / (Loss)

                            	
                               

                            	
                               

                            	
                              Retained Earnings/

                              (Accumulated Deficit)

                            	
                               

                            	
                               

                            	
                              Total Equity

                            	
                               

                            
	
                               

                            
	
                                

                            	
                               

                            	
                              # of Shares

                            	
                               

                            	
                               

                            	
                              Par Value

                            	
                               

                            	
                               

                            	
                              # of Shares

                            	
                               

                            	
                               

                            	
                              Par Value

                            	
                               

                            
	
                              BALANCE, December 31,  2014

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              81,859,821

                            	
                               

                            	
                               

                            	
                              $

                            	
                              819

                            	
                               

                            	
                               

                            	
                              $

                            	
                              971,280

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (747

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              310,848

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,282,226

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Issuance of restricted stock and compensation cost (Note 9(d))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,100,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              10

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,269

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,279

                            	
                               

                            
	
                              Dividends on series B preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Stock repurchased and retired (Note 9(e))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (413,804

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (4

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (2,669

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,673

                            	
                              )

                            
	
                              Other comprehensive income

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            
	
                              BALANCE, December 31,  2015

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              82,546,017

                            	
                               

                            	
                               

                            	
                              $

                            	
                              825

                            	
                               

                            	
                               

                            	
                              $

                            	
                              976,880

                            	
                               

                            	
                               

                            	
                              $

                            	
                              269

                            	
                               

                            	
                               

                            	
                              $

                            	
                              240,366

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,218,366

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            
	
                              Issuance of restricted stock and compensation cost (Note 9(d))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              2,150,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              22

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,291

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,313

                            	
                               

                            
	
                              Dividends on series B preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Other comprehensive loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            
	
                              BALANCE, December 31,  2016

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              84,696,017

                            	
                               

                            	
                               

                            	
                              $

                            	
                              847

                            	
                               

                            	
                               

                            	
                              $

                            	
                              985,171

                            	
                               

                            	
                               

                            	
                              $

                            	
                              185

                            	
                               

                            	
                               

                            	
                              $

                            	
                              70,360

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,056,589

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            
	
                              Issuance of common stock (Note 9(c))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              20,125,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              201

                            	
                               

                            	
                               

                            	
                               

                            	
                              77,110

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              77,311

                            	
                               

                            
	
                              Issuance of restricted stock and compensation cost (Note 9(d))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,310,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              13

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,219

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,232

                            	
                               

                            
	
                              Dividends on series B preferred stock (Note 9(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Other comprehensive income

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            
	
                              BALANCE, December 31,  2017

                            	
                               

                            	
                               

                            	
                              2,600,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              26

                            	
                               

                            	
                               

                            	
                               

                            	
                              106,131,017

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,061

                            	
                               

                            	
                               

                            	
                              $

                            	
                              1,070,500

                            	
                               

                            	
                               

                            	
                              $

                            	
                              294

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (447,123

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              624,758

                            	
                               

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

                            	
                               

                            


                      

                      

                      
                        F-6

                        
                          


                      

                      

                      

                      

                      

                      	
                              DIANA SHIPPING INC.

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              CONSOLIDATED STATEMENTS OF CASH FLOWS

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              For the years ended December 31, 2017 , 2016 and 2015

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              (Expressed in thousands of U.S. Dollars)

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                               Cash Flows
                                  from Operating Activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Adjustments to reconcile net loss to net cash from operating activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Depreciation and amortization of deferred charges

                            	
                               

                            	
                               

                            	
                              87,003

                            	
                               

                            	
                               

                            	
                               

                            	
                              81,578

                            	
                               

                            	
                               

                            	
                               

                            	
                              76,333

                            	
                               

                            
	
                              Impairment loss (Note 5)

                            	
                               

                            	
                               

                            	
                              442,274

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Amortization of financing costs (Note 10)

                            	
                               

                            	
                               

                            	
                              1,455

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,503

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,364

                            	
                               

                            
	
                              Amortization of free lubricants benefit

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (15

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (85

                            	
                              )

                            
	
                              Compensation cost on restricted stock (Note 9(d))

                            	
                               

                            	
                               

                            	
                              8,232

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,313

                            	
                               

                            	
                               

                            	
                               

                            	
                              8,279

                            	
                               

                            
	
                              Actuarial gain/(loss)

                            	
                               

                            	
                               

                            	
                              109

                            	
                               

                            	
                               

                            	
                               

                            	
                              (84

                            	
                              )

                            	
                               

                            	
                               

                            	
                              1,016

                            	
                               

                            
	
                              Gain from insurance recoveries, net of other loss (Note 5)

                            	
                               

                            	
                               

                            	
                              (10,879

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Gain on shipbuilding contract termination

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (278

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Loss from equity method investments, net of dividends (Note 3)

                            	
                               

                            	
                               

                            	
                              5,607

                            	
                               

                            	
                               

                            	
                               

                            	
                              56,377

                            	
                               

                            	
                               

                            	
                               

                            	
                              5,133

                            	
                               

                            
	
                               (Increase) / Decrease in:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Receivables

                            	
                               

                            	
                               

                            	
                              966

                            	
                               

                            	
                               

                            	
                               

                            	
                              (1,391

                            	
                              )

                            	
                               

                            	
                               

                            	
                              1,871

                            	
                               

                            
	
                              Due from related parties

                            	
                               

                            	
                               

                            	
                              (141

                            	
                              )

                            	
                               

                            	
                               

                            	
                              3,334

                            	
                               

                            	
                               

                            	
                               

                            	
                              2,070

                            	
                               

                            
	
                              Inventories

                            	
                               

                            	
                               

                            	
                              90

                            	
                               

                            	
                               

                            	
                               

                            	
                              391

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,062

                            	
                               

                            
	
                              Prepaid expenses and other assets

                            	
                               

                            	
                               

                            	
                              142

                            	
                               

                            	
                               

                            	
                               

                            	
                              620

                            	
                               

                            	
                               

                            	
                               

                            	
                              (349

                            	
                              )

                            
	
                               Increase / (Decrease) in:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Accounts payable

                            	
                               

                            	
                               

                            	
                              1,382

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,391

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (739

                            	
                              )

                            
	
                              Due to related parties

                            	
                               

                            	
                               

                            	
                              246

                            	
                               

                            	
                               

                            	
                               

                            	
                              (39

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (217

                            	
                              )

                            
	
                              Accrued liabilities, net of accrued preferred dividends

                            	
                               

                            	
                               

                            	
                              2,512

                            	
                               

                            	
                               

                            	
                               

                            	
                              (715

                            	
                              )

                            	
                               

                            	
                               

                            	
                              437

                            	
                               

                            
	
                              Deferred revenue

                            	
                               

                            	
                               

                            	
                              2,385

                            	
                               

                            	
                               

                            	
                               

                            	
                              (1,592

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (865

                            	
                              )

                            
	
                              Other liabilities

                            	
                               

                            	
                               

                            	
                              162

                            	
                               

                            	
                               

                            	
                               

                            	
                              117

                            	
                               

                            	
                               

                            	
                               

                            	
                              (643

                            	
                              )

                            
	
                              Drydock costs

                            	
                               

                            	
                               

                            	
                              (6,418

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (2,489

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (6,009

                            	
                              )

                            
	
                               Net cash
                                  provided by / (used in) Operating Activities

                            	
                               

                            	
                              $

                            	
                              23,413

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (20,998

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              23,945

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash Flows
                                  from Investing Activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Payments for vessel acquisitions, improvements and construction (Note 5)

                            	
                               

                            	
                               

                            	
                              (125,781

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (50,911

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (155,352

                            	
                              )

                            
	
                              Proceeds from vessel sale, net of expenses (Note 5)

                            	
                               

                            	
                               

                            	
                              2,032

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Proceeds from insurance contract, net of expenses (Note 5)

                            	
                               

                            	
                               

                            	
                              11,362

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Proceeds from sale of investment (Note 3)

                            	
                               

                            	
                               

                            	
                              158

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Proceeds from shipbuilding contract termination (Notes 5)

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              9,413

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Cash dividends from investment in Diana Containerships Inc. (Note 3(a))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              96

                            	
                               

                            	
                               

                            	
                               

                            	
                              193

                            	
                               

                            
	
                              Loan to Diana Containerships Inc. (Note 4(b))

                            	
                               

                            	
                               

                            	
                              (40,000

                            	
                              )

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Joint venture investment (Note 3(b))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (267

                            	
                              )

                            
	
                              Payments for plant, property and equipment (Note 6)

                            	
                               

                            	
                               

                            	
                              (104

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (217

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (211

                            	
                              )

                            
	
                               Net cash
                                  used in Investing Activities

                            	
                               

                            	
                              $

                            	
                              (152,333

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (41,619

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (155,637

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash Flows
                                  from Financing Activities:

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Proceeds from long-term debt (Note 7)

                            	
                               

                            	
                               

                            	
                              57,240

                            	
                               

                            	
                               

                            	
                               

                            	
                              39,265

                            	
                               

                            	
                               

                            	
                               

                            	
                              441,173

                            	
                               

                            
	
                              Proceeds from issuance of common stock, net of expenses (Note 9(c))

                            	
                               

                            	
                               

                            	
                              77,311

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Cash dividends on preferred stock

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,769

                            	
                              )

                            
	
                              Payments for repurchase of common stock (Note 9(e))

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,673

                            	
                              )

                            
	
                              Financing costs

                            	
                               

                            	
                               

                            	
                              (31

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (466

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (5,482

                            	
                              )

                            
	
                              Loan payments (Note 7)

                            	
                               

                            	
                               

                            	
                              (55,164

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (42,489

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (321,240

                            	
                              )

                            
	
                               Net cash
                                  provided by / (used in) Financing Activities

                            	
                               

                            	
                              $

                            	
                              73,587

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (9,459

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              106,009

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Net 
                                  decrease in cash, cash equivalents and restricted cash

                            	
                               

                            	
                               

                            	
                              (55,333

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (72,076

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (25,683

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash, cash
                                  equivalents and restricted cash at beginning of the year

                            	
                               

                            	
                               

                            	
                              121,142

                            	
                               

                            	
                               

                            	
                               

                            	
                              193,218

                            	
                               

                            	
                               

                            	
                               

                            	
                              218,901

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               Cash, cash
                                  equivalents and restricted cash at end of the year

                            	
                               

                            	
                              $

                            	
                              65,809

                            	
                               

                            	
                               

                            	
                              $

                            	
                              121,142

                            	
                               

                            	
                               

                            	
                              $

                            	
                              193,218

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Cash and cash equivalents

                            	
                               

                            	
                              $

                            	
                              40,227

                            	
                               

                            	
                               

                            	
                              $

                            	
                              98,142

                            	
                               

                            	
                               

                            	
                               

                            	
                              171,718

                            	
                               

                            
	
                              Restricted cash

                            	
                               

                            	
                               

                            	
                              25,582

                            	
                               

                            	
                               

                            	
                               

                            	
                              23,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              21,500

                            	
                               

                            
	
                              Cash, cash equivalents and restricted cash

                            	
                               

                            	
                              $

                            	
                              65,809

                            	
                               

                            	
                               

                            	
                              $

                            	
                              121,142

                            	
                               

                            	
                               

                            	
                               

                            	
                              193,218

                            	
                               

                            
	
                              SUPPLEMENTAL CASH FLOW INFORMATION

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Related party loan reduction in exchange for preferred shares  (Note 4(b))

                            	
                               

                            	
                              $

                            	
                              3,000

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            	
                               

                            	
                              $

                            	
                              -

                            	
                               

                            
	
                              Interest, net of amounts capitalized

                            	
                               

                            	
                              $

                            	
                              24,503

                            	
                               

                            	
                               

                            	
                              $

                            	
                              19,265

                            	
                               

                            	
                               

                            	
                              $

                            	
                              13,048

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

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

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            


                      
                        F-7

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      1.  Basis of Presentation and General Information

                      

                      

                      The accompanying consolidated financial statements include the accounts of Diana
                          Shipping Inc., or DSI, and its wholly-owned and beneficially-owned subsidiaries (collectively, the "Company"). DSI was formed on March 8, 1999 as Diana Shipping Investment Corp. under the laws of the Republic of Liberia. In
                          February 2005, the Company's articles of incorporation were amended. Under the amended articles of incorporation, the Company was renamed Diana Shipping Inc. and was re-domiciled from the Republic of Liberia to the Republic of the
                          Marshall Islands.

                      

                      

                      The consolidated statements of cash flows for the years ended December 31, 2016 and
                          2015 have been derived from the audited consolidated financial statements for those years, as adjusted to conform to current period presentation for restricted cash following the adoption of ASU No. 2016-18.

                      

                      

                      The Company is engaged in the ocean transportation of dry bulk cargoes worldwide
                          mainly through the ownership of dry bulk carrier vessels. The Company also operates the majority of its own fleet through Diana Shipping Services S.A., or DSS, a wholly-owned subsidiary and a limited number of vessels through a
                          50% owned joint venture (Notes 3 and 4).

                      

                      

                      Diana Shipping Services S.A., or DSS, provides the Company and its vessels with management services since November 12, 2004, pursuant to management agreements and since October 1,
                          2013 administrative services with regards to services related to DSI's operations and its subsidiaries. Such costs are eliminated in consolidation. As at December 31, 2017, DSS does not provide management services to ten vessels
                          in the Company's fleet whose management has been transferred progressively since August 2015 to Diana Wilhelmsen Management Limited, or DWM, (Notes 3(b) and 4(d)).

                      

                      

                      During 2017, 2016, and 2015 charterers that individually accounted for 10% or more of
                          the Company's time charter revenues were as follows:

                      

                      

                      	
                              Charterer  

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              A

                            	
                               

                            	
                               

                            	
                              17

                            	
                              %

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                               

                            	 
	
                              B

                            	
                               

                            	
                               

                            	
                              14

                            	
                              %

                            	
                               

                            	
                               

                            	
                              15

                            	
                              %

                            	
                               

                            	
                               

                            	
                               

                            	 
	
                              C

                            	 	 	
                              12

                            	
                              %

                            	 	 	
                              10

                            	
                              %

                            	 	 	 	 
	
                              D

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              19

                            	
                              %

                            	
                               

                            	
                               

                            	
                              24

                            	
                              %

                            
	
                              E

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              10

                            	
                              %

                            	
                               

                            	
                               

                            	
                              20

                            	
                              %

                            
	
                              F

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              12

                            	
                              %

                            
	
                              G

                            	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                               

                            	 	
                               

                            	
                               

                            	
                              10

                            	
                              %

                            


                      

                      

                      

                      

                      
                        F-8

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      2.  Significant Accounting Policies

                      

                      

                      (a) Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, and include the accounts of Diana Shipping Inc.
                          and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Under Accounting Standards Codification ("ASC") 810 "Consolidation", the Company consolidates entities in which
                          it has a controlling financial interest, by first considering if an entity meets the definition of a variable interest entity ("VIE") for which the Company is deemed to be the primary beneficiary under the VIE model, or if the
                          Company controls an entity through a majority of voting interest based on the voting interest model. The Company evaluates financial instruments, service contracts, and other arrangements to determine if any variable interests
                          relating to an entity exist. For entities in which the Company has a variable interest, the Company determines if the entity is a VIE by considering whether the entity's equity investment at risk is sufficient to finance its
                          activities without additional subordinated financial support and whether the entity's at-risk equity holders have the characteristics of a controlling financial interest. In performing the analysis of whether the Company is the
                          primary beneficiary of a VIE, the Company considers whether it individually has the power to direct the activities of the VIE that most significantly affect the entity's performance and also has the obligation to absorb losses or
                          the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company reconsiders the initial determination of whether an entity is a VIE if certain types of events ("reconsideration events")
                          occur. 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. The Company has identified that it has variable interests in Diana Containerships Inc.
                          and Diana Wilhelmsen Management Limited. The Company assessed reconsideration events and concluded that Diana Containerships Inc. is a VIE, however the Company is not the primary beneficiary (Notes 3(a) and 4(b)).

                      

                      

                      (b) Use of Estimates: The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the
                          reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. 
                          Actual results could differ from those estimates.

                      

                      

                      (c) Other Comprehensive Income / (loss): The Company separately presents certain transactions, which are recorded directly as components of stockholders' equity. Other Comprehensive Income / (Loss) is presented in a
                          separate statement.

                      

                      

                      (d) Foreign Currency Translation: The functional currency of the Company is the U.S. dollar because the Company's vessels operate in international shipping markets, and therefore primarily transact business in U.S.
                          dollars. The Company's accounting records are maintained in U.S. dollars. Transactions involving other currencies during the year are converted into U.S. dollars using the exchange rates in effect at the 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 reflected separately in the
                          accompanying consolidated statements of operations.

                      

                      

                      (e) Cash and Cash Equivalents and Restricted Cash: The Company considers highly liquid investments such as time deposits, certificates of deposit and their equivalents with an original maturity of three months or
                          less to be cash equivalents. Restricted cash consists mainly of cash deposits required to be maintained at all times under the Company's loan facilities (Note 7). As of December 31, 2017, restricted cash also included $582 of cash
                          guarantee which was restricted to withdrawal or usage.

                      

                      

                      
                        F-9

                        
                          


                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	(f)	
                                  Accounts Receivable,
                                        Trade: The amount shown as accounts receivable, trade, at each balance sheet date, includes receivables from charterers for hire, ballast bonus billings, if any, hold cleanings and extra voyage insurance, net
                                      of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No
                                      provision for doubtful accounts was established as of December 31, 2017 and 2016.

                                


                        

                      

                      

                      

                      
                        
                          	(g)	
                                  Loan Receivable from
                                        Related Party: The amounts shown as Due from related parties, current and non-current, in the consolidated balance sheet as at December 31, 2017 and 2016, represent amounts receivable from Diana Containerships
                                      Inc., or Diana Containerships, with respect to a loan agreement, net of any provision for credit losses and does not include the $5,000 discount premium due on the termination date of the loan (Note 4(b)). Interest
                                      income and fees, deriving from the agreement are recorded in the accounts as incurred. At each balance sheet date, amounts due under the aforementioned loan agreement are assessed for purposes of determining the
                                      appropriate provision for credit losses. As at December 31, 2017 and 2016, the Company assessed the ability of Diana Containerships to meet its obligations under the loan agreement by taking into consideration existing
                                      economic conditions, the current financial condition of Diana Containerships, equity offerings, sale plans, historical losses, and other risks/factors that may affect Diana Containerships' future financial condition
                                      and its ability to meet its obligations. As a result of this assessment, the Company did not record any provision for credit losses, as it determined that Diana Containerships will be able to meet its obligations under
                                      the loan in the near future.

                                


                        

                      

                      

                      

                      
                        
                          	(h)	
                                  Inventories: Inventories
                                      consist of lubricants and victualling which are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable
                                      costs of completion, disposal, and transportation. When evidence exists that the net realizable value of inventory is lower than its cost, the difference is recognized as a loss in earnings in the period in which it
                                      occurs. Cost is determined by the first in, first out method. Inventories may also consist of bunkers when on the balance sheet date a vessel remains idle. Bunkers, if any, are also stated at the lower of cost or net
                                      realizable value and cost is determined by the first in, first out method.

                                


                        

                      

                      

                      

                      
                        
                          	(i)	
                                  Vessel Cost: Vessels
                                      are stated at cost which consists of the contract price and any material expenses incurred upon acquisition or during construction. Expenditures for conversions and major improvements are also capitalized when they
                                      appreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels; otherwise these amounts are charged to expense as incurred. Interest cost incurred during the assets'
                                      construction periods that theoretically could have been avoided if expenditure for the assets had not been made is also capitalized. The capitalization rate, applied on accumulated expenditures for the vessel, is based
                                      on interest rates applicable to outstanding borrowings of the period.

                                


                        

                      

                      

                      

                      
                        
                          	(j)	
                                  Property and equipment:
                                      The Company owns the land and building where its offices are located. Land is presented in its fair value on the date of acquisition and it is not subject to depreciation. The building has an estimated useful life of
                                      55 years with no residual value. Depreciation is calculated on a straight-line basis. Equipment consists of office furniture and equipment, computer software and hardware and vehicles which consist of motor scooters
                                      and a car. The useful life of the car is 10 years, of the office furniture, equipment and the scooters is 5 years; and of the computer software and hardware is 3 years. Depreciation is calculated on a straight-line
                                      basis.

                                


                        

                      

                      

                      

                      
                        F-10

                        
                          


                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	(k)	
                                  Impairment of Long-Lived
                                        Assets: Long-lived assets (vessels, land, and building) and certain identifiable intangibles held and used by an entity are reviewed for impairment whenever events or changes in circumstances (such as market
                                      conditions, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of the assets may not be recoverable. When the estimate of undiscounted projected net operating
                                      cash flows, excluding interest charges, expected to be generated by the use of the asset over its remaining useful life and its eventual disposition is less than its carrying amount, the Company should evaluate the
                                      asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset. The Company determines the fair value of its assets based on management estimates and assumptions and by making
                                      use of available market data and taking into consideration third party valuations.

                                


                        

                      

                      

                      

                      With respect to the vessels, the Company
                          determines undiscounted projected net operating cash flows for each vessel by considering the historical and estimated vessels' performance and utilization, assuming (i) future revenues calculated for the fixed days, using the
                          fixed charter rate of each vessel from existing time charters and for the unfixed days, the most recent 10 year average of historical 1 year time charter rates available for each type of vessel over the remaining estimated life of
                          each vessel, net of commissions. Historical ten-year blended average one-year time charter rates are in line with the Company's overall chartering strategy, they reflect the full operating history of vessels of the same type and
                          particulars with the Company's operating fleet and they cover at least a full business cycle; (ii) expected outflows for scheduled vessels' maintenance; (iii) vessel operating expenses; and (iv) fleet utilization; assumptions in
                          line with the Company's historical performance and its expectations for future fleet utilization under its current fleet deployment strategy.

                      

                      

                      During the last quarter of 2017, the Company's
                          management considered various factors, including the recovery of the market, the worldwide demand for dry-bulk products, supply of tonnage and order book and concluded that the charter rates for the years 2008-2010 are
                          exceptional. In this respect the Company's management decided to exclude from the 10-year average of 1 year time charters these three years for which the rates were well above the average and which were not considered sustainable
                          for the foreseeable future. The Company performed the exercise discussed above which resulted to recording an impairment on certain vessels' carrying value (Note 5). No impairment loss has been identified or recorded for 2016 and
                          2015.

                      

                      

                      With respect to the land and building, the
                          Company determines undiscounted projected net operating cash flows by considering an estimated monthly rent the Company would have to pay in order to lease a similar property, during the useful life of the building. As at December
                          31, 2017, 2016 and 2015, no impairment loss was identified or recorded and the Company has not identified any other facts or circumstances that would require the write down of the value of its land or building in the near future.

                      

                      

                      
                        
                          	(l)	
                                  Vessel Depreciation:
                                      Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated salvage (scrap) value.  Each vessel's salvage value is equal to the product of its
                                      lightweight tonnage and estimated scrap rate. Management estimates the useful life of the Company's vessels to be 25 years from the date of initial delivery from the shipyard. Second hand vessels are depreciated from
                                      the date of their acquisition through their remaining estimated useful life. When regulations place limitations over the ability of a vessel to trade on a worldwide basis, its remaining useful life is adjusted at the
                                      date such regulations are adopted.

                                


                        

                      

                      

                      

                      
                        F-11

                        
                          


                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	(m)	
                                  Accounting for
                                        Dry-Docking Costs: The Company follows the deferral method of accounting for dry-docking costs whereby actual costs incurred are deferred and are amortized on a straight-line basis over the period through the
                                      date the next dry-docking is scheduled to become due. Unamortized dry-docking costs of vessels that are sold or impaired are written off and included in the calculation of the resulting gain or loss in the year of the
                                      vessel's sale or impairment.

                                


                        

                      

                      

                      

                      
                        
                          	(n)	
                                  Financing Costs:
                                      Fees paid to lenders for obtaining new loans or refinancing existing ones are deferred and recorded as a contra to debt. Other fees paid for obtaining loan facilities not used at the balance sheet date are capitalized
                                      as deferred financing costs. Fees relating to drawn loan facilities are amortized to interest and finance costs over the life of the related debt using the effective interest method and fees incurred for loan
                                      facilities not used at the balance sheet date are amortized using the straight line method according to their availability terms. Unamortized fees relating to loans repaid or refinanced as debt extinguishment are
                                      expensed as interest and finance costs in the period the repayment or extinguishment is made. Loan commitment fees are charged to expense in the period incurred, unless they relate to loans obtained to finance vessels
                                      under construction, in which case they are capitalized to the vessels' cost.

                                


                        

                      

                      

                      

                      
                        
                          	(o)	
                                  Concentration of Credit
                                        Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash, trade accounts receivable and the loan receivable from a related
                                      party. The Company places its temporary cash investments, consisting mostly of deposits, with various qualified financial institutions and performs periodic evaluations of the relative credit standing of those
                                      financial institutions that are considered in the Company's investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial
                                      condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk. The Company limits its credit risk with the loan receivable by performing
                                      ongoing credit evaluations of Diana Containerships' financial condition. The loan agreement is guaranteed by second preferred mortgages over the vessels of Diana Containerships' fleet (Note 4(b)). The Company has not
                                      entered into any agreement to mitigate credit risk.

                                


                        

                      

                      

                      

                      
                        
                          	(p)	
                                  Accounting for Revenues
                                        and Expenses: Revenues are generated from time charter agreements and are usually paid fifteen days in advance. Time charter agreements with the same charterer are accounted for as separate agreements
                                      according to the terms and conditions of each agreement. Time charter revenues are recorded over the term of the charter as service is provided. Income representing ballast bonus payments by the charterer to the vessel
                                      owner, if any, is recognized in the period earned. Revenues from time charter agreements providing for varying annual rates over their term are accounted for on a straight line basis.  Compensation due to earlier
                                      redelivery than the minimum period agreed in the charter party is recognized in the period earned. Deferred revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue
                                      have not been met. Deferred revenue may also include deferred revenue resulting from charter agreements providing for varying annual rates, which are accounted for on a straight line basis, or the unamortized balance
                                      of the liability associated with the acquisition of second-hand vessels with time charters attached which were acquired at values below fair market value at the date the acquisition agreement is consummated. Voyage
                                      expenses, primarily consisting of commissions, port, canal and bunker expenses that are unique to a particular charter, are paid for by the charterer under time charter arrangements, except for commissions, which are
                                      always paid for by the Company, regardless of charter type and gain or loss from the sale of bunkers on delivery to the time charterers. All voyage and vessel operating expenses are expensed as incurred, except for
                                      commissions. Commissions are deferred over the related voyage charter period to the extent revenue has been deferred since commissions are due as the Company's revenues are earned.

                                


                        

                      

                      

                      

                      
                        F-12

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      (q) Repairs and Maintenance: All repair and maintenance expenses including underwater inspection expenses are expensed in the year incurred. Such costs are included in vessel operating expenses in the accompanying
                          consolidated statements of operations.

                      

                      

                      (r) Earnings / (loss) per Common Share: Basic earnings / (loss) per common share are computed by dividing net income / (loss) available to common stockholders by the weighted average number of common shares
                          outstanding during the year. Diluted earnings per common share, reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised.

                      

                      

                      (s) Segmental Reporting: The Company has determined that it operates under one reportable segment, relating to its operations of the dry-bulk vessels. The Company reports financial information and evaluates the
                          operations of the segment by charter revenues and not by the length of ship employment for its customers, i.e. spot or time charters. The Company does not use discrete financial information to evaluate the operating results for
                          each such type of charter. Although revenue can be identified for these types of charters, management cannot and does not identify expenses, profitability or other financial information for these charters. As a result, management,
                          including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade
                          the vessel worldwide and, as a result, the disclosure of geographic information is impracticable.

                      

                      

                      (t) Fair Value Measurements: The Company classifies and discloses its assets and liabilities carried at the fair value in one of the following categories:

                      

                      

                      Level 1:     Quoted market prices in active markets for identical assets or liabilities;

                      

                      

                      Level 2:     Observable market based inputs or unobservable inputs that are corroborated by market data;

                      

                      

                      Level 3:     Unobservable inputs that are not corroborated by market data.

                      

                      

                      (u) Share Based Payments: The Company issues restricted share awards which are measured at their grant date fair value and are not subsequently re-measured.  That cost is recognized over the period during which an
                          employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite
                          service. 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.

                      

                      

                      (v) Equity method investments: Investments in common stock in entities over which the Company exercises significant influence, but does not exercise control are accounted for by the equity method of accounting. Under
                          this method, the Company records such an investment at cost and adjusts the carrying amount for its share of the earnings or losses of the entity subsequent to the date of investment and reports the recognized earnings or losses
                          in income. Dividends received, if any, reduce the carrying amount of the investment. When the Company's share of losses in an entity accounted for by the equity method equals or exceeds its interest in the entity, the Company does
                          not recognize further losses, unless the Company has made advances, incurred obligations and made payments on behalf of the entity. The Company also evaluates whether a loss in value of an investment that is other than a temporary
                          decline should be recognized. Evidence of a loss in value might include absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the
                          carrying amount of the investment. The Company assessed the financial condition of Diana Containerships (Note 3(a)), the market conditions that could affect its operations in the near future and historical losses of its investment
                          and as a result the Company recorded impairment in 2017 and 2016, which is included in Loss from equity method investments in the accompanying statements of operations.

                      
                        F-13

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      (w) Going concern: The Company's policy is in accordance with ASU No. 2014-15, "Presentation of Financial Statements - Going Concern", issued in August 2014 by the FASB. ASU 2014-15 provides U.S. GAAP guidance on
                          management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and on related required footnote disclosures. For each reporting period, management evaluates
                          whether there are conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year from the date the financial statements are issued.

                      

                      

                      Recent Accounting Pronouncements adopted

                      

                      

                      As of January 1, 2017, the Company adopted ASU No. 2016-15- Statement of Cash Flows
                          Classification of Certain Cash Receipts and Cash Payments and ASU No. 2016-18—Statement of Cash Flows – Restricted Cash.

                      The adoption of ASU No. 2016-15- Statement of Cash Flows Classification of Certain
                          Cash Receipts and Cash Payments did not result in any changes in the classification of cash receipts and cash payments.  The adoption of ASU No. 2016-18—Statement of Cash Flows – Restricted Cash, changed the presentation of
                          restricted cash in cash flow, where amounts generally described as restricted cash and restricted cash equivalents are included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total
                          amounts shown on the statement of cash flows.

                       

                      Recent Accounting Pronouncements not yet adopted

                      

                      

                      In May 2014, FASB issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue
                          from Contracts with Customers", clarifying the method used to determine the timing and requirements for revenue recognition on the statements of income. Under the new standard, an entity must identify the performance obligations
                          in a contract, the transaction price and allocate the price to specific performance obligations to recognize the revenue when the obligation is completed. The amendments in this update also require disclosure of sufficient
                          information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flow arising from contracts. In August 2015, FASB issued ASU No. 2015-14 "Revenue from Contracts with Customers (Topic 606):
                          Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 for all entities by one year. The standard will be effective for public entities for annual reporting periods beginning after December 15, 2017 and
                          interim periods therein.  In May and April 2016, the FASB issued two Updates with respect to Topic 606: ASU 2016-10, "Revenue from Contracts with
                            Customers (Topic 606): Identifying Performance Obligations and Licensing" and ASU 2016-12, "Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients." The Company has
                          evaluated the impact of the standard after reviewing historical contracts and has determined that all of the Company's agreements are considered leases. Certain non-lease components which are required to be assessed according to
                          this standard, may only affect presentation and disclosures and not the way revenue is recognized.

                      

                      

                      

                      

                      
                        F-14

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      In February 2016, the FASB issued ASU No. 2016-02, Leases (ASC 842), which requires
                          lessees to recognize most leases on the balance sheet. This is expected to increase both reported assets and liabilities. The new lease standard does not substantially change lessor accounting. For public companies, the standard
                          will be effective for the first interim reporting period within annual periods beginning after December 15, 2018, although early adoption is permitted. Lessees and lessors will be required to apply the new standard at the
                          beginning of the earliest period presented in the financial statements in which they first apply the new guidance, using a modified retrospective transition method. The requirements of this standard include a significant increase
                          in required disclosures. The Company is analyzing the impact of the adoption of this guidance on the Company's consolidated financial statements, including assessing changes that might be necessary to information technology
                          systems, processes and internal controls to capture new data and address changes in financial reporting.

                      

                      

                      In May 2017, the FASB issued ASU 2017-09, "Compensation — Stock Compensation (Topic
                          718), Scope of Modification Accounting" ("ASU 2017-09"), which clarifies and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, Compensation—Stock Compensation, to a change
                          to the terms or conditions of a share-based payment award. ASU 2017-09 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2017, however early adoption is permitted.
                          The Company does not expect that the adoption of ASU 2017-09 will have a material effect in the Company's financial statements.

                      

                      

                      In June 2016, the FASB issued ASU No. 2016-13– Financial Instruments – Credit Losses
                          (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.  For public entities, the
                          amendments of this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application is permitted. The Company does not expect that the adoption of ASU
                          2016-13 will have a material effect in the Company's financial statements.

                      

                      

                      3.  Investments in related parties

                      
                        
                          	a)	
                                  Diana Containerships
                                        Inc., or Diana Containerships: As at December 31, 2016, DSI owned 25.73% of the common stock of Diana Containerships amounting to $5,815 and included in "Investments in related parties" in the accompanying
                                      consolidated balance sheets. As at December 31, 2017, the investment was reduced to zero following the gradual sales during the year of all Diana Containerships' common stock previously owned by the Company.

                                


                        

                      

                      

                      

                      For 2017, 2016, and 2015, the investment in Diana Containerships
                          resulted in loss of $5,656, $56,465, and $4,977, respectively, of which $3,124, $17,568 and $0, respectively was impairment, which was recorded based on Diana Containerships' market value on Nasdaq at the date of each impairment
                          charge recognition. The loss and impairment are included in "Loss from equity method investments" in the accompanying consolidated statements of operations. Additionally, for 2017, Loss from equity method investments also includes
                          $757 loss from the sale of the shares discussed above. For 2017, 2016, and 2015, DSI received dividends from Diana Containerships amounting to $0, $96 and $193, respectively.

                      

                      

                      On May 30, 2017, the company acquired 100 shares of
                          newly-designated Series C Preferred Stock, par value $0.01 per share, of Diana Containerships for $3,000 in exchange for a reduction of an equal amount in the principal amount of the Company's outstanding loan to Diana
                          Containerships (Note 4(b)). The Series C Preferred Stock has no dividend or liquidation rights. The Series C Preferred Stock votes with the common shares of Diana Containerships, if any, and each share of the Series C Preferred
                          Stock entitles the holder thereof to up to 250,000 votes, subject to a cap such that the aggregate voting power of any holder of Series C Preferred Stock together with its affiliates does not exceed 49.0%, on all matters submitted
                          to a vote of the stockholders of Diana Containerships. The acquisition of shares of Series C Preferred Stock was approved by an independent committee of the Board of Directors of the Company. As at December 31, 2017, the $3,000 is
                          also included in "Investments in related parties" in the accompanying 2017 consolidated balance sheet accounted for at cost less impairment, if any.

                      

                      

                      
                        F-15

                        
                          


                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      
                        
                          	b)	
                                  Diana Wilhelmsen
                                        Management Limited, or DWM: DWM is a joint venture which was established on May 7, 2015 by Diana Ship Management Inc., a wholly owned subsidiary of DSI, and Wilhelmsen Ship Management Holding Limited, an
                                      unaffiliated third party, each holding 50% of DWM. As at December 31, 2017, DWM provided management services to ten vessels of the Company's fleet (Note 4(d)). The DWM office is located in Limassol, Cyprus. As at
                                      December 31, 2017 and 2016, the investment in DWM amounted to $249 and $199, respectively, and is included in "Investments in related parties" in the accompanying consolidated balance sheets. For 2017, 2016, and 2015,
                                      the investment in DWM resulted in gain of $49, $88, and loss of $156, respectively, included in "Loss from equity method investments" in the accompanying consolidated statements of operations.

                                


                        

                      

                      

                      

                      4. Transactions with Related Parties

                      

                      

                      
                        
                          	(a)	
                                  Altair Travel Agency
                                        S.A. ("Altair"): The Company uses the services of an affiliated travel agent, Altair, which is controlled by the Company's CEO and Chairman of the Board. Travel expenses for 2017, 2016 and 2015 amounted to
                                      $2,096, $2,320, and $2,685, respectively, and are mainly included in "Vessels, net book value", "Advances for vessels under construction and acquisitions and other vessel costs", "Vessel operating expenses" and
                                      "General and administrative expenses" in the accompanying consolidated financial statements.  At December 31, 2017 and 2016, an amount of $162 and $23, respectively, was payable to Altair and is included in "Due to
                                      related parties" in the accompanying consolidated balance sheets.

                                


                        

                      

                      

                      

                      
                        
                          	(b)	
                                  Diana Containerships
                                        Inc.: On May 20, 2013, the Company entered into a five year unsecured loan of $50,000 with a subsidiary of Diana Containerships, drawn on August 20, 2013, for general corporate purposes and working capital.
                                      The loan, initially bore interest at LIBOR plus a margin of 5% and a back-end fee equal to 1.25% per annum on the outstanding amount of the loan payable by the borrower on the repayment date of the loan. Following an
                                      amendment on September 9, 2015, the interest was reduced to LIBOR plus a margin of 3% per annum, the back-end fee which was paid on the date of the amendment was eliminated, and a fixed fee of $200 was to be payable on
                                      the maturity date. In addition, the borrower agreed to repay the principal amount of the loan on the last day of each interest period in amounts totalling $5,000 per annum, but not to exceed $32,500 in the aggregate.
                                      Following another amendment on August 24, 2016, the repayment of all outstanding principal amounts was deferred until a later date, the borrower was changed to another wholly-owned subsidiary of Diana Containerships
                                      and the interest rate of the deferral period increased to 3.35% per annum over LIBOR. On May 30, 2017, as discussed in Note 3(a), the loan was decreased by $3,000, in order to acquire the Series C Preferred Stock
                                      issued by Diana Containerships.

                                


                        

                      

                      

                      

                      On June 30, 2017, DSI entered into an agreement with Diana
                          Containerships to refinance the above loan, amounting to $42,417 at that date, with a loan facility of $82,617, which reflects an additional loan amount to Diana Containerships of $40,000 and the $200 fixed fee of the previous
                          loan which became payable on the termination date of the previous agreement and has been included in "Interest and other income" in the accompanying statements of operations. The loan also provides for an additional $5,000
                          interest-bearing discount premium payable on the termination date, unless the lender demands earlier prepayment on or after the first anniversary of the drawdown of the loan, in which case the discount premium is waived. The loan
                          matures in eighteen months from its date of signing, or December 31, 2018, and bears interest at the rate of 6% per annum for the first twelve months, scaled to 9% for the next three months, and further scaled to 12% for the
                          remaining three months of the loan. The loan facility is secured by second preferred mortgages on Diana Containerships' vessels and includes financial and other covenants. Additionally, Diana Containerships is required to prepay
                          the loan with any proceeds received from equity offerings, loan refinancings and vessel sales, according to the terms of the loan agreement. The loan is subordinated to the loan of Diana Containerships with another lender.

                      

                      

                      
                        F-16

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      As at December 31, 2017 the outstanding balance of the loan and interest due from
                          Diana Containerships amounted to $82,660 and is separately presented in "Due from related parties, current" in the related accompanying consolidated balance sheet (Note 14(c)). This amount does not include the additional $5,000
                          interest-bearing discount premium, which is payable on the termination date (Note 8(b)). As at December 31, 2016, there was an amount of $102 and $45,417 presented in Due from related parties, current and non- current,
                          respectively.

                      

                      

                      For 2017, 2016 and 2015, interest and other income amounted to $3,855, $1,692, and
                          $2,745, respectively, and is included in "Interest and other income" in the accompanying consolidated statements of operations.

                      

                      

                      
                        
                          	(c)	
                                  Diana Enterprises Inc.
                                        renamed to Steamship Shipbroking Enterprises Inc., or Steamship: Steamship is a company controlled by the Company's CEO and Chairman of the Board which provides brokerage services to DSI pursuant to a
                                      Brokerage Services Agreement for a fixed fee amended annually on each anniversary of the agreement. For 2017, 2016 and 2015, brokerage fees amounted to $1,800, $1,680, and $1,302, respectively, and are included in
                                      "General and administrative expenses" in the accompanying consolidated statements of operations. As of December 31, 2017 and 2016, there was no amount due to Steamship included in the accompanying consolidated balance
                                      sheets.

                                


                        

                      

                      

                      

                      
                        
                          	(d)	
                                  Diana Wilhelmsen
                                        Management Limited: As of December 31, 2017, DWM provided management services to ten vessels of the Company's fleet for a fixed monthly fee and commercial services charged as a percentage of the vessels'
                                      gross revenues. Management fees for 2017, 2016 and 2015 amounted to $1,883, $1,464, and $405, respectively, and are separately presented as "Management fees to related party" in the accompanying consolidated statements
                                      of operations, whereas commercial fees amounted to $260, $124, and $43, respectively, and are included in "Voyage expenses" in the accompanying consolidated statements of operations. As at December 31, 2017 and 2016
                                      there was an amount of $109 and $2, respectively, due to DWM, included in "Due to related parties" in the accompanying consolidated balance sheets.

                                


                        

                      

                      

                      

                      
                        
                          	(e)	
                                  Vessel Acquisitions: On
                                      February 4, 2016, the Company, through three separate wholly-owned subsidiaries, entered into three Memoranda of Agreement to acquire from a related party three Panamax vessels for an aggregate purchase price of
                                      $39,265. The Company had agreed to acquire the vessels from entities affiliated with Mrs. Semiramis Paliou and Mrs. Aliki Paliou, each of whom is a family member of the Company's Chief Executive Officer and Chairman of
                                      the Board. Mrs. Semiramis Paliou is also a director of the Company. The transaction was approved unanimously by a committee of the Board of Directors established for the purpose of considering the transaction and
                                      consisting of the Company's independent directors and each of its executive directors other than Mrs. Semiramis Paliou and Mr. Simeon Palios. The agreed upon purchase price of the vessels was based, among other
                                      factors, on independent third party broker valuations obtained by the Company. Two of the vessels were delivered in March 2016 and the third was delivered in May 2016 (Note 5).

                                


                        

                      

                      

                      

                      
                        F-17

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      5. Vessels, net book value

                      

                      

                      The amounts in the accompanying consolidated balance sheets are analyzed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              Vessel Cost

                            	
                               

                            	
                               

                            	
                              Accumulated Depreciation

                            	
                               

                            	
                               

                            	
                              Net Book Value

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Balance, December 31, 2015

                            	
                               

                            	
                              $

                            	
                              1,947,992

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (507,189

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              1,440,803

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Acquisitions, improvements and other vessel costs

                            	
                               

                            	
                               

                            	
                              39,427

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              39,427

                            	
                               

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (76,318

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (76,318

                            	
                              )

                            
	
                              Balance, December 31, 2016

                            	
                               

                            	
                              $

                            	
                              1,987,419

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (583,507

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              1,403,912

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Transfer from advances for vessels under construction and acquisition and other vessel costs

                            	
                               

                            	
                               

                            	
                              104,858

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              104,858

                            	
                               

                            
	
                              - Acquisitions, improvements and other vessel costs

                            	
                               

                            	
                               

                            	
                              67,787

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              67,787

                            	
                               

                            
	
                              - Vessel disposal

                            	
                               

                            	
                               

                            	
                              (15,349

                            	
                              )

                            	
                               

                            	
                               

                            	
                              12,834

                            	
                               

                            	
                               

                            	
                               

                            	
                              (2,515

                            	
                              )

                            
	
                              - Impairment charges

                            	
                               

                            	
                               

                            	
                              (877,484

                            	
                              )

                            	
                               

                            	
                               

                            	
                              438,573

                            	
                               

                            	
                               

                            	
                               

                            	
                              (438,911

                            	
                              )

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (81,553

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (81,553

                            	
                              )

                            
	
                              Balance, December 31, 2017

                            	
                               

                            	
                              $

                            	
                              1,267,231

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (213,653

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              1,053,578

                            	
                               

                            


                      

                      

                      On February 4, 2016, the Company acquired the vessels Ismene, Selina and Maera for an aggregate purchase price of $39,265. Ismene
                          and Selina were delivered in March 2016 and the Maera was delivered in May 2016.

                      

                      

                      On October 31, 2016, Houk Shipping Company Inc. provided a notice of cancellation of
                          the shipbuilding contract pursuant to its right under the contract to cancel the contract due to a delay in delivery and to claim a refund of the pre-delivery installments and interest, amounting to $9,413, which the Company
                          received in December 2016.

                      

                      

                      On January 4, 2017, the Company took delivery of Hull H2548 named San Francisco, and Hull
                          H2549 named Newport News, which were under construction until then for an aggregate contract price of $95,400. As at December
                          31, 2016, advances for the construction and other vessel costs amounted to $46,863 and are separately presented in the related consolidated balance sheet.

                      

                      

                      In April 2017, the Company acquired the vessels Astarte, Electra and Phaidra from unaffiliated third party sellers for an aggregate purchase price of $67,250. All three vessels were delivered in May 2017.

                      

                      

                      On July 25, 2017, the Melite run aground at Pulau Laut, Indonesia. Following this incident, on September 21, 2017, the owners served a notice of frustration of the voyage to the time-charterers and a notice
                          of abandonment to the H&M and IV insurers as it was considered that the extent of damages and the estimated cost of repairs were such that the vessel constituted a constructive total loss. As of September 30, 2017, the
                          vessel's net book value was reduced to its scrap value of $2,515 resulting in an impairment of $19,807 which is included in "Impairment loss", in the 2017 accompanying consolidated statement of operations. The vessel, which was
                          insured for a value of $14,000 to H&M insurers, was sold to an unrelated third party at the recorded price in October 2017, and in November 2017, the Company received the balance of the insured value of the vessel amounting to
                          $11,528, which is included in "Insurance recoveries, net of other loss" in the accompanying statement of operations.

                      

                      

                      
                        F-18

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      As at December 31, 2017, the Company's estimated undiscounted projected net operating
                          cash flows, excluding interest charges, expected to be generated by the use of certain vessels over their remaining useful lives and their eventual disposition was less than their carrying amount.  During the last quarter of 2017,
                          the Company's management considered various factors, including the recovery of the market, the worldwide demand for dry-bulk products, supply of tonnage and order book and concluded that the charter rates for the years 2008-2010
                          are extraordinary. In this respect the Company's management decided to exclude from the 10-year average of 1 year time charters these three years for which the rates were well above the average and which were not considered
                          sustainable for the foreseeable future. The Company performed the exercise discussed above which resulted to recording an impairment on certain vessels' carrying value (Note 2). Accordingly, the Company recognized an aggregate
                          impairment loss of $422,466, which is included in "Impairment loss" in the 2017 accompanying consolidated statement of operations of which $3,362 was recognized in "Deferred charges, net". The change in the assumption resulted to
                          an increased impairment loss, net loss and net loss attributed to common stockholders of $287,074, or $3.0 loss per share. The fair value of the vessels was determined through Level 2 inputs of the fair value hierarchy by taking
                          into consideration third party valuations which were based on last done deals of sale of vessels with similar characteristics, such as type, size and age.

                      

                      

                      6. Property and equipment, net

                      

                      

                      The amounts in the accompanying consolidated balance sheets are analyzed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              Property and Equipment

                            	
                               

                            	
                               

                            	
                              Accumulated Depreciation

                            	
                               

                            	
                               

                            	
                              Net Book Value

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Balance, December 31, 2015

                            	
                               

                            	
                              $

                            	
                              26,365

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (2,876

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              23,489

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Additions in property and equipment

                            	
                               

                            	
                               

                            	
                              217

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              217

                            	
                               

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (592

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (592

                            	
                              )

                            
	
                              Balance, December 31, 2016

                            	
                               

                            	
                              $

                            	
                              26,582

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (3,468

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              23,114

                            	
                               

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              - Additions in property and equipment

                            	
                               

                            	
                               

                            	
                              104

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              104

                            	
                               

                            
	
                              - Depreciation for the year

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            	
                               

                            	
                               

                            	
                              (568

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (568

                            	
                              )

                            
	
                              - Disposal of assets

                            	
                               

                            	
                               

                            	
                              (3

                            	
                              )

                            	
                               

                            	
                               

                            	
                              3

                            	
                               

                            	
                               

                            	
                               

                            	
                              -

                            	
                               

                            
	
                              Balance, December 31, 2017

                            	
                               

                            	
                              $

                            	
                              26,683

                            	
                               

                            	
                               

                            	
                              $

                            	
                              (4,033

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              22,650

                            	
                               

                            


                      

                      

                      7.   Long-term debt, current and non-current

                      

                      

                      The amount of long-term debt shown in the accompanying consolidated balance sheets is
                          analyzed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            
	
                              8.5% Senior Unsecured Notes

                            	
                               

                            	
                               

                            	
                              63,250

                            	
                               

                            	
                               

                            	
                               

                            	
                              63,250

                            	
                               

                            
	
                              Secured Term Loans

                            	
                               

                            	
                               

                            	
                              541,543

                            	
                               

                            	
                               

                            	
                               

                            	
                              539,467

                            	
                               

                            
	
                              Total debt outstanding

                            	
                               

                            	
                              $

                            	
                              604,793

                            	
                               

                            	
                               

                            	
                              $

                            	
                              602,717

                            	
                               

                            
	
                              Less related deferred financing costs

                            	
                               

                            	
                               

                            	
                              (3,409

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (4,536

                            	
                              )

                            
	
                              Total debt, net of deferred financing costs

                            	
                               

                            	
                              $

                            	
                              601,384

                            	
                               

                            	
                               

                            	
                              $

                            	
                              598,181

                            	
                               

                            
	
                              Less: Current portion of long term debt, net of deferred financing costs current

                            	
                               

                            	
                               

                            	
                              (60,763

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (65,072

                            	
                              )

                            
	
                              Long-term debt, net of current portion and deferred financing costs, non-current

                            	
                               

                            	
                              $

                            	
                              540,621

                            	
                               

                            	
                               

                            	
                              $

                            	
                              533,109

                            	
                               

                            


                      

                      

                      
                        F-19

                        
                          


                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      8.5% Unsecured Senior Notes: On May 20, 2015, the Company offered $63,250 aggregate principal amount of 8.5% Senior Notes due 2020 (the "Notes"), including an overallotment, at the
                          price of $25.0 per Note, pursuant to an approval obtained by a special committee of the Board of Directors. As part of the offering, the underwriters sold $12,750 aggregate principal amount of the Notes to, or to entities
                          affiliated with, the Company's chief executive officer, Mr. Simeon Palios, and other executive officers and certain directors of the Company at the public offering price. The proceeds, net of underwriting discount and offering
                          expenses, amounting to $61,180, are included in "Long-term debt, net of deferred financing costs, non-current" in the accompanying consolidated balance sheets. As of May 29, 2015, the Notes are trading on the NYSE under the ticker
                          symbol "DSXN".

                      

                      

                      The Notes bear interest from May 28, 2015 at a rate of 8.5% per year and will mature
                          on May 15, 2020. Interest is payable quarterly in arrears on the 15th day of February, May, August and November of each year, commencing on August 15, 2015. Since May 15, 2017, the Company may redeem the Notes at its option, in
                          whole or in part, at any time, at a redemption price equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. The Notes include financial and other covenants,
                          including maximum net borrowings and minimum tangible net worth.

                      

                      

                      Secured Term Loans: The Company, through its subsidiaries, has entered into various long term loan
                            agreements with bank institutions to partly finance or, as the case may be, refinance part of the acquisition cost of certain of its fleet vessels. The loan agreements are repayable in quarterly or semi-annual installments plus
                            one balloon installment per loan agreement to be paid together with the last installment and bear interest at LIBOR plus margin ranging from 1% to 3%. Their maturities range from January 2019 to March 2032. For 2017 and 2016,
                            the weighted average interest rates of the secured term loans were 3.38% and 2.79%, respectively.

                      

                      

                      As at December 31, 2017, the Company had the following agreements with banks:

                      

                      

                      On October 22, 2009, the Company, through a wholly-owned subsidiary, entered into a
                          $40,000 loan agreement with Bremer Landesbank ("Bremer") to partly finance the acquisition cost of the Houston. The loan is
                          repayable in 40 quarterly installments of $900 each plus one balloon installment of $4,000 to be paid together with the last installment on November 12, 2019. The loan bears interest at LIBOR plus a margin of 2.15% per annum.

                      

                      

                      On October 2, 2010, the Company, through two wholly-owned subsidiaries, entered into a
                          loan agreement with Export-Import Bank of China ("CEXIM Bank") and DnB NOR Bank ASA ("DnB") to finance part of the construction cost of the Los Angeles and the Philadelphia, for an amount of up to $82,600, of which $72,100 was drawn on delivery.
                          The Lae advance is repayable in 40 quarterly installments of approximately $628 each and a balloon of $12,332 payable together with the last installment on February 15, 2022. The Namu advance is repayable in 40 quarterly
                          installments of approximately $581 each and a balloon of $11,410 payable together with the last installment on May 18, 2022. Pursuant to an amendment of the loan agreement dated May 18, 2017, each of the individual banks are
                          allowed to demand repayment in full of such bank's contribution in any or all advances on August 16, 2019. If one or more banks (acting through the agent) exercise such right in respect of an advance, the borrowers shall be
                          obliged to repay each such bank's contribution in that advance in full on such date. The loan bears interest at LIBOR plus a margin of 2.50% per annum.

                      

                      

                      
                        F-20

                        
                          


                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      On September 13, 2011, the Company through one wholly-owned subsidiary entered into a
                          loan agreement with Emporiki Bank of Greece S.A. ("Emporiki") for a loan of up to $15,000 to refinance part of the acquisition cost of the Arethusa. On December 13, 2012, Bikar, the Company, DSS and Credit Agricole Corporate and
                          Investment Bank ("Credit Agricole") entered into a supplemental loan agreement to transfer the outstanding loan balance, the ISDA master swap agreement and the existing security documents from Emporiki to Credit Agricole. The loan
                          is repayable in 20 equal semiannual installments of $500 each and a balloon payment of $5,000 to be paid together with the last installment on September 15, 2021. The loan bears interest at LIBOR plus a margin of 2.5% per annum,
                          or 1% for such loan amount that is equivalently secured by cash pledge in favor of the bank.

                      

                      

                      On May 24, 2013, the Company through two wholly-owned subsidiaries entered into a loan
                          agreement with CEXIM Bank and DnB to finance part of the construction cost of Crystalia and Atalandi for an amount of up to $15,000 for each vessel, drawn on May 22, 2014. Each advance is repayable in 19 quarterly installments of $250 each and a
                          balloon of $10,250 payable together with the last installment on February 22, 2019. The loan bears interest at LIBOR plus a margin of 3.0% per annum.

                      

                      

                      On January 9, 2014, the Company through two wholly-owned subsidiaries entered into a
                          loan agreement with Commonwealth Bank of Australia, London Branch, for a loan facility of up to $18,000 to finance part of the acquisition cost of the Melite and Artemis. The loan bears interest at LIBOR plus a margin of 2.25%. The loan was drawn
                          in two tranches, one of $8,500 assigned to Melite and one of $9,500 assigned to Artemis. Tranche A was repayable in 24 equal consecutive quarterly installments of $196 each; and a balloon of $3,800 payable on January 13, 2020. As a result of the
                          grounding incident of the Melite mentioned in Note 5 and the subsequent sale of the vessel, the respective loan balance was
                          repaid in full in October 2017. Tranche B is repayable in 32 equal consecutive quarterly installments of $156 each and a balloon of $4,500 payable on January 13, 2022.

                      

                      

                      On December 18, 2014, the Company through two wholly-owned subsidiaries entered into a
                          loan agreement with BNP Paribas ("BNP"), for a loan facility of up to $55,000 to finance part of the acquisition cost of the G. P. Zafirakis and the P. S. Palios,
                          of which $53,500 was drawn. The loan bears interest at LIBOR plus a margin of 2%, and is repayable in 14 equal semi-annual installments of approximately $1,574 and a balloon of $31,466 payable on November 30, 2021.

                      

                      

                      On March 17, 2015, the Company, through eight separate wholly-owned subsidiaries,
                          entered into a loan agreement with Nordea Bank AB, London Branch, for a secured term loan facility of up to $110,000, to refinance the existing indebtedness with the bank and for general corporate and working capital purposes. On
                          March 19, 2015, the Company drew down $93,080 and repaid the then existing indebtedness with the bank amounting to $38,345. The loan is repayable in 24 equal consecutive quarterly installments of about $1,862 each and a balloon of
                          about $48,402 payable together with the last installment on March 19, 2021. The loan bears interest at LIBOR plus a margin of 2.1%.

                      

                      

                      On March 26, 2015, the Company, through three wholly-owned subsidiaries, entered into
                          a loan agreement with ABN AMRO Bank N.V. for a secured term loan facility of up to $53,000, to refinance part of the acquisition cost of the vessels New York, Myrto and Maia. On March 30, 2015, the Company drew down the amount of $50,160 under the loan facility, which is repayable in 24 equal consecutive quarterly installments of about $994 each and a balloon
                          of $26,310 payable together with the last installment on March 30, 2021. The loan bears interest at LIBOR plus a margin of 2.0%.

                      

                      

                      On April 29, 2015, the Company, through one wholly-owned subsidiary, entered into a
                          term loan agreement with Danish Ship Finance A/S for a loan facility of $30,000, drawn on April 30, 2015 to partly finance the acquisition cost of the Santa Barbara, which was delivered in January 2015. The loan is repayable in 28 equal consecutive quarterly installments of $500 each and a balloon of $16,000 payable together with the last
                          installment on April 30, 2022. The loan bears interest at LIBOR plus a margin of 2.15%.

                      

                      

                      
                        F-21

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      On July 22, 2015, the Company entered into a term loan agreement with BNP Paribas for
                          a loan of $165,000 drawn on July 24, 2015. The loan is repayable in 20 consecutive quarterly installments, the first eight installments in an amount of $2,500 each, followed by four installments in an amount of $5,000 each; eight
                          installments in an amount of $7,000 each; and a balloon installment of $69,000 payable together with the last installment on July 24, 2020.The loan bears interest at LIBOR plus a margin of 2.35% per annum for the first two years;
                          2.3% per annum for the third year and 2.25% per annum until the final maturity of the loan.

                      

                      

                      On September 30, 2015, the Company, through two wholly-owned subsidiaries, entered
                          into a term loan agreement with ING Bank N.V. for a loan of up to $39,683, available in two advances to finance part of the acquisition cost of the New Orleans and the Medusa. Advance A of $27,950 was drawn on November 19, 2015 and is
                          repayable in 28 consecutive quarterly installments of about $466 each and a balloon installment of about $14,907 payable together with the last installment on November 19, 2022. Advance B of $11,733 was drawn on October 6, 2015
                          and is repayable in 28 consecutive quarterly installments of about $293 each and a balloon installment of about $3,520 payable together with the last installment on October 6, 2022. The loan bears interest at LIBOR plus a margin
                          of 1.65%.

                      

                      

                      On January 7, 2016, the Company, through three wholly-owned subsidiaries, entered into
                          a secured loan agreement with the Export-Import Bank of China for a loan of up to $75,735 in order to finance part of the construction cost of Newport News, San Francisco (Note 5) and Hull DY6006. The tranche for Hull DY6006, whose shipbuilding contract was cancelled on October 31, 2016, was cancelled and on February 6, 2017, pursuant to a Deed of Release with
                          the bank the owner of Hull DY6006 was released of all of its obligations under the loan agreement as borrower. On January 4,
                          2017, the Company drew down $57,240. The loan is repayable in 60 equal quarterly instalments of $954 each by March 12, 2032 and bears interest at LIBOR plus a margin of 2.3%.

                      

                      

                      On March 29, 2016, the Company, through two wholly-owned subsidiaries, entered into a
                          term loan agreement with ABN AMRO Bank N.V. for a loan of $25,755, drawn on March 30, 2016, to finance the acquisition cost of the Selina
                          and the Ismene. The loan is payable in eight consecutive quarterly installments of $855 each and a balloon installment of
                          $18,915 payable together with the last installment by June 30, 2019. The first repayment installment was repaid on September 30, 2017. The loan bears interest at LIBOR plus a margin of 3%.

                      

                      

                      On May 10, 2016, the Company, through one wholly-owned subsidiary, entered into a term
                          loan agreement with DNB Bank ASA and the Export-Import Bank of China for a loan of $13,510, drawn on the same date, being the purchase price of the Maera. The loan is payable in seven equal consecutive quarterly installments of about $20 each, four equal consecutive quarterly installments of about $283 and a balloon of about $12,242 payable
                          together with the last installment on January 4, 2019. The loan bears interest at LIBOR plus a margin of 3% per annum. According to the terms of the loan agreement, the Company will prepay an additional amount of $289 in the first
                          quarter of 2018, which will be deducted from the balloon, and which is included in "Current portion of long term debt, net of deferred financing costs, current".

                      

                      

                      Under the secured term loans outstanding as of December 31, 2017, 46 vessels of the
                          Company's fleet are mortgaged with first preferred or priority ship mortgages, having an aggregate carrying value of $968,083. Additional securities required by the banks include first priority assignment of all earnings,
                          insurances, first assignment of time charter contracts that exceed a certain period, pledge over the shares of the borrowers, manager's undertaking and subordination and requisition compensation and either a corporate guarantee by
                          DSI (the "Guarantor") or a guarantee by the ship owning companies (where applicable), financial covenants, as well as operating account assignments. The lenders may also require additional security in the future in the event the
                          borrowers breach certain covenants under the loan agreements. The secured term loans generally include restrictions as to changes in management and ownership of the vessels, additional indebtedness, as well as minimum requirements
                          regarding hull cover ratio and minimum liquidity per vessel owned by the borrowers, or the guarantor, maintained in the bank accounts of the borrowers, or the guarantor. As at December 31, 2017 and 2016, the restricted cash, which
                          relates to minimum cash deposits required to be maintained at all times under the Company's loan facilities, amounted to $25,000 and $23,000, respectively and is included in "Restricted cash" in the accompanying consolidated
                          balance sheets. Furthermore, the secured term loans contain cross default provisions and additionally the Company is not permitted to pay any dividends following the occurrence of an event of default.

                      

                      

                      
                        F-22

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      As at December 31, 2017, the Company was in compliance with all of its loan covenants.

                      

                      

                      As at December 31, 2016, the Company was not in compliance with the minimum security
                          cover requirement of its loan agreement with BNP Paribas dated July 22, 2015. The shortfall was estimated by the Company to be $25,650 and an amount of $19,731, representing the amount which would have to be paid to the bank, was
                          reclassified from non-current debt to the "Current portion of long-term debt, net of deferred financing costs, current" in the 2016 accompanying consolidated balance sheet.

                      

                      

                      The maturities of the Company's debt facilities described above, as at December 31,
                          2017, and throughout their term, are shown in the table below. The table does not include the right of each of the lenders of a secured term loan to demand prepayment of their advance in August 2019 of the then outstanding balance
                          of such advance, subject to a written notification:

                      	
                              Period

                            	
                               

                            	
                              Principal Repayment

                            	
                               

                            
	
                              January 1, 2018 to December 31, 2018

                            	
                               

                            	
                              $

                            	
                              62,059

                            	
                               

                            
	
                              January 1, 2019 to December 31, 2019

                            	
                               

                            	
                               

                            	
                              119,342

                            	
                               

                            
	
                              January 1, 2020 to December 31, 2020

                            	
                               

                            	
                               

                            	
                              183,132

                            	
                               

                            
	
                              January 1, 2021 to December 31, 2021

                            	
                               

                            	
                               

                            	
                              132,494

                            	
                               

                            
	
                              January 1, 2022 to December 31, 2022

                            	
                               

                            	
                               

                            	
                              72,468

                            	
                               

                            
	
                              January 1, 2023 and thereafter

                            	
                               

                            	
                               

                            	
                              35,298

                            	
                               

                            
	
                              Total

                            	
                               

                            	
                              $

                            	
                              604,793

                            	
                               

                            


                      

                      

                      8. Commitments and Contingencies

                      
                        
                          	

                                	a)	
                                  Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course
                                      of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company's vessels. The Company accrues for the
                                      cost of environmental and other liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure.

                                


                        

                      

                      

                      

                      The Company's vessels are covered for pollution in the amount of
                          $1 billion per vessel per incident, by the P&I Association in which the Company's vessels are entered. The Company's vessels are subject to calls payable to their P&I Association and 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. During 2016, the Company was notified by one of its
                          P&I Clubs of supplemental calls with respect to the 2015 policy year which however were immaterial and were expensed in the 2016 consolidated statement of operations.

                      

                      

                      
                        
                          	

                                	b)	
                                  Pursuant to the loan agreement with Diana Containerships Inc. dated June 30, 2017 (Note 4(b)), Diana Containerships is required to pay, on
                                      the termination date of the loan, an additional $5,000 interest-bearing discount premium, which is not included in Due from related parties in the accompanying 2017 balance sheet.

                                


                        

                      

                      

                      

                      
                        
                          	

                                	c)	
                                  As at December 31, 2017, all of the Company's vessels were fixed under time charter agreements. The minimum contractual gross charter
                                      revenue expected to be generated from fixed and non-cancelable time charter contracts existing as at December 31, 2017 and until their expiration was as follows:

                                


                        

                      

                      	
                              Period

                            	
                               

                            	
                              Amount

                            	
                               

                            
	
                              Year 1

                            	
                               

                            	
                              $

                            	
                              95,851

                            	
                               

                            
	
                              Year 2

                            	
                               

                            	
                               

                            	
                              10,129

                            	
                               

                            
	
                                 Total

                            	
                               

                            	
                              $

                            	
                              105,980

                            	
                               

                            


                      

                      

                      
                        F-23

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      9. Capital Stock and Changes in Capital Accounts

                      

                      

                      
                        
                          	

                                	(a)	
                                  Preferred stock: As at December 31, 2017 and 2016, the Company's authorized preferred stock consists of 25,000,000 shares (all in
                                      registered form) of preferred stock, par value $0.01 per share, of which 1,000,000 are designated as Series A Participating Preferred Shares and 5,000,000 are designated as Series B Preferred Shares.

                                


                        

                      

                      

                      

                      As at December 31, 2017 and 2016, 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 and zero Series A Participating Preferred Shares issued and outstanding. 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.

                      

                      

                      Dividends on the Series B preferred shares are cumulative from the
                          date of original issue and are payable on the 15th day of January, April, July and October of each year at the dividend rate of 8.875% per annum, or $2.21875 per share per annum. For 2017, 2016, and 2015, dividends on Series B
                          preferred shares amounted to $5,769. At any time on or after February 14, 2019, the Company may redeem, in whole or in part, the series B preferred shares at a redemption price of $25.00 per share plus an amount equal to all
                          accumulated and unpaid dividends thereon to the date of redemption, whether or not declared.

                      

                      

                      
                        
                          	

                                	(b)	
                                  Common Stock: The
                                      Company's authorized capital stock consists of 200,000,000 shares (all in registered form) of common stock, par value $0.01 per share. The holders of the common shares are entitled to one vote on all matters submitted
                                      to a vote of stockholders and to receive all dividends, if any.

                                


                        

                      

                      

                      

                      
                        
                          	

                                	(c)	
                                  Offering of common
                                        shares: On April 26, 2017, the Company issued a total 20,125,000 common shares, at a price of $4.00 per share, in a public offering.  As part of the offering, entities affiliated with Simeon Palios, the
                                      Company's Chief Executive Officer and Chairman, executive officers and certain directors, purchased an aggregate of 5,500,000 common shares at the public offering price. The net proceeds from the offering after
                                      underwriting discounts and other offering expenses were $77,311.

                                


                        

                      

                      

                      

                      
                        
                          	

                                	(d)	
                                  Incentive plan:
                                      In November 2014, the Company's board of directors approved to adopt the 2014 Equity Incentive Plan, for 5,000,000 shares, of which as at December 31, 2017, 2,924,759 remained reserved for issuance.

                                


                        

                      

                      

                      

                      
                        F-24

                        
                          


                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      Restricted stock during 2017, 2016 and 2015 is analysed as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                              Number of Shares

                            	
                               

                            	
                               

                            	
                              Weighted Average Grant Date Price

                            	
                               

                            
	
                              Outstanding at December 31, 2014

                            	
                               

                            	
                               

                            	
                              2,491,834

                            	
                               

                            	
                               

                            	
                              $

                            	
                              9.30

                            	
                               

                            
	
                              Granted

                            	
                               

                            	
                               

                            	
                              1,100,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              6.91

                            	
                               

                            
	
                              Vested

                            	
                               

                            	
                               

                            	
                              (827,522

                            	
                              )

                            	
                               

                            	
                               

                            	
                              9.57

                            	
                               

                            
	
                              Outstanding at December 31, 2015

                            	
                               

                            	
                               

                            	
                              2,764,312

                            	
                               

                            	
                               

                            	
                              $

                            	
                              8.27

                            	
                               

                            
	
                              Granted

                            	
                               

                            	
                               

                            	
                              2,150,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              2.26

                            	
                               

                            
	
                              Vested

                            	
                               

                            	
                               

                            	
                              (971,646

                            	
                              )

                            	
                               

                            	
                               

                            	
                              8.67

                            	
                               

                            
	
                              Outstanding at December 31, 2016

                            	
                               

                            	
                               

                            	
                              3,942,666

                            	
                               

                            	
                               

                            	
                              $

                            	
                              4.89

                            	
                               

                            
	
                              Granted

                            	
                               

                            	
                               

                            	
                              1,310,000

                            	
                               

                            	
                               

                            	
                               

                            	
                              3.95

                            	
                               

                            
	
                              Vested

                            	
                               

                            	
                               

                            	
                              (1,611,549

                            	
                              )

                            	
                               

                            	
                               

                            	
                              5.46

                            	
                               

                            
	
                              Outstanding at December 31, 2017

                            	
                               

                            	
                               

                            	
                              3,641,117

                            	
                               

                            	
                               

                            	
                              $

                            	
                              4.30

                            	
                               

                            


                      

                      

                      The fair value of the restricted shares has been determined with
                          reference to the closing price of the Company's stock on the date the agreements were signed. The aggregate compensation cost is being recognized ratably in the consolidated statement of operations over the respective vesting
                          periods. On May 11, 2017, after the resignation of one board member, the total amount of his unvested shares up to that date became vested at a compensation cost of $662. For 2017, 2016, and 2015, an amount of $8,232, $8,313, and
                          $8,279, respectively, was recognized in "General and administrative expenses" presented in the accompanying consolidated statements of operations.

                      

                      

                      At December 31, 2017 and 2016, the total unrecognized cost relating
                          to restricted share awards was $10,509 and $13,567, respectively. At December 31, 2017, the weighted-average period over which the total compensation cost related to non-vested awards not yet recognized is expected to be
                          recognized is 0.97 years.

                      

                      

                      
                        
                          	(e)	
                                  Share Repurchase
                                        Agreement: On May 22, 2014, the Company's Board of Directors authorized a share repurchase plan for up to $100,000 worth of shares of the Company's common stock. During 2015, the Company repurchased and
                                      retired 413,804 shares at an aggregate cost of approximately $2,673 and none during 2016 and 2017.

                                


                        

                      

                      

                      

                      10. Interest and Finance Costs

                      

                      

                      The amounts in the accompanying consolidated statements of operations are analyzed as
                          follows:

                      

                      

                      	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              Interest expense

                            	
                               

                            	
                              $

                            	
                              24,978

                            	
                               

                            	
                               

                            	
                              $

                            	
                              19,523

                            	
                               

                            	
                               

                            	
                              $

                            	
                              13,922

                            	
                               

                            
	
                              Amortization of financing costs

                            	
                               

                            	
                               

                            	
                              1,455

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,503

                            	
                               

                            	
                               

                            	
                               

                            	
                              1,364

                            	
                               

                            
	
                              Commitment fees and other costs

                            	
                               

                            	
                               

                            	
                              195

                            	
                               

                            	
                               

                            	
                               

                            	
                              923

                            	
                               

                            	
                               

                            	
                               

                            	
                              269

                            	
                               

                            
	
                              Total

                            	
                               

                            	
                              $

                            	
                              26,628

                            	
                               

                            	
                               

                            	
                              $

                            	
                              21,949

                            	
                               

                            	
                               

                            	
                              $

                            	
                              15,555

                            	
                               

                            


                      

                      

                      Total interest on long-term debt for 2017, 2016 and 2015 amounted to $24,991, $21,009,
                          and $14,622, respectively, of which $13, $1,486, and $700, respectively, were capitalized and included "Vessels, net book value", in the accompanying consolidated balance sheets.

                      
                        F-25

                        
                          


                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      11. 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 upon their vesting. The calculation of basic earnings/(loss) per share does not treat the non-vested shares (not considered
                          participating securities) as outstanding until the time/service-based vesting restriction has lapsed. For the purpose of calculating diluted earnings per share the weighted average number of diluted shares outstanding includes the
                          incremental shares assumed issued determined in accordance with the treasury stock method. For the 2017, 2016 and 2015 and on the basis that the Company incurred losses, the effect of incremental shares would be anti-dilutive and
                          therefore basic and diluted loss per share was the same.

                      

                      

                      Profit or loss attributable to common equity holders is adjusted by the amount of
                          dividends on Series B Preferred Stock as follows:

                      

                      

                      	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                               

                            	
                               

                            	
                              2017

                            	
                               

                            	
                               

                            	
                              2016

                            	
                               

                            	
                               

                            	
                              2015

                            	
                               

                            
	
                              Net loss

                            	
                               

                            	
                              $

                            	
                              (511,714

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (164,237

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (64,713

                            	
                              )

                            
	
                              Less dividends on series B preferred shares

                            	
                               

                            	
                              $

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (5,769

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (5,769

                            	
                              )

                            
	
                              Net loss attributed to common stockholders

                            	
                               

                            	
                               

                            	
                              (517,483

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (170,006

                            	
                              )

                            	
                               

                            	
                               

                            	
                              (70,482

                            	
                              )

                            
	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            	
                               

                            
	
                              Weighted average number of common shares, basic  and diluted

                            	
                               

                            	
                               

                            	
                              95,731,093

                            	
                               

                            	
                               

                            	
                               

                            	
                              80,441,517

                            	
                               

                            	
                               

                            	
                               

                            	
                              79,518,009

                            	
                               

                            
	
                              Loss per share, basic and diluted

                            	
                               

                            	
                              $

                            	
                              (5.41

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (2.11

                            	
                              )

                            	
                               

                            	
                              $

                            	
                              (0.89

                            	
                              )

                            


                      

                      

                      12. Income Taxes

                      

                      

                      Under the laws of the countries of the companies' incorporation and / or vessels'
                          registration, the companies are not subject to tax on international shipping income; however, they are subject to registration and tonnage taxes, which are included in vessel operating expenses in the accompanying consolidated
                          statements of operations.

                      

                      

                      Pursuant to the Internal Revenue Code of the United States (the "Code"), U.S. source
                          income from the international operations of ships is generally exempt from U.S. tax if the company operating the ships meets both of the following requirements, (a) the Company is organized in a foreign country that grants an
                          equivalent exception to corporations organized in the United States and (b) either (i) more than 50% of the value of the Company's stock is owned, directly or indirectly, by individuals who are "residents" of the Company's country
                          of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States (50% Ownership Test) or (ii) the Company's stock is "primarily and regularly traded on an
                          established securities market" in its country of organization, in another country that grants an "equivalent exemption" to United States corporations, or in the United States (Publicly‐Traded Test).

                      

                      

                      Notwithstanding the foregoing, the regulations provide, in pertinent part, that each
                          class of the Company's stock will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned,
                          actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of the Company's outstanding stock, ("5 Percent
                          Override Rule").

                      

                      

                      
                        F-26

                        
                          


                      

                      

                      

                      

                      

                      

                      

                      DIANA SHIPPING INC.

                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2017

                      (Expressed in thousands of U.S. Dollars – except share, per share data, unless
                          otherwise stated)

                      

                      

                      The Company and each of its subsidiaries expects to  qualify for this statutory tax
                          exemption for the 2017, 2016 and 2015 taxable years, and the Company takes this position for United States federal income tax return reporting purposes.  However, there are factual circumstances beyond the Company's control that
                          could cause it to lose the benefit of this tax exemption in future years and thereby become subject to United States federal income tax on its United States source income such as  if, for a particular taxable year, other
                          shareholders with a five percent or greater interest in the Company's stock were, in combination with the Company's existing 5% shareholders, to own 50% or more of the Company's outstanding shares of its stock on more than half
                          the days during the taxable year.

                      

                      

                      The Company estimates that since no more than the 50% of its shipping income would be
                          treated as being United States source income, the effective tax rate is expected to be 2% and accordingly it anticipates that the impact on its results of operations will not be material. The Company believes that it satisfies the
                          Publicly-Traded Test and all of its United States source shipping income is exempt from U.S. federal income tax. Based on its U.S. source Shipping Income for 2017, 2016 and 2015, the Company would be subject to U.S. federal income
                          tax of approximately $136, $80 and $166, respectively, in the absence of an exemption under Section 883.

                      

                      

                      13. Financial Instruments and Fair Value Disclosures

                      

                      

                      The carrying values of temporary cash investments, accounts receivable and accounts
                          payable approximate their fair value due to the short-term nature of these financial instruments. The fair values of long-term bank loans approximate the recorded values, due to their variable interest rates. The fair value of
                          long-term loan receivable from Diana Containerships also approximates its recorded value, due to its variable interest rate. The fair value of the Senior Unsecured Notes (Note 7) having a fixed interest rate amounted to $64,970 as
                          of December 31, 2017, and was determined through the Level 1 input of the fair value hierarchy as defined in FASB guidance for Fair Value Measurements based on the quoted price of the instrument on that date as stated under the
                          ticker Symbol "DSXN" on the NYSE.

                      

                      

                      The Company is exposed to interest rate fluctuations associated with its variable rate
                          borrowings and its objective is to manage the impact of such fluctuations on earnings and cash flows of its borrowings. Currently, the company does not have any derivative instruments to manage such fluctuations.

                      

                      

                      14. Subsequent Events

                      

                      

                      
                        
                          	

                                	a)	
                                  Series B Preferred Stock
                                        Dividends: On January 16, 2018, the Company paid a dividend on its series B preferred stock, amounting to $0.5546875 per share, or $1,442, to its stockholders of record as of January 12, 2018.

                                


                        

                      

                      

                      

                      
                        
                          	

                                	b)	
                                  Annual Incentive Bonus:
                                      On February 21, 2018 the Company's Board of Directors approved the grant of 1,800,000 shares of restricted common stock awards to executive management and non-executive directors, pursuant to the Company's 2014 equity
                                      incentive plan. The fair value of the restricted shares based on the closing price on the date of the Board of Directors' approval was about $6,876 and will be recognized in income ratably over the restricted shares
                                      vesting period which will be 3 years.

                                


                        

                      

                      

                      

                      
                        
                          	

                                	c)	
                                  Loan Prepayment:
                                      On March 12, 2018 the Company received an amount of $8,379 as partial prepayment under the loan with Diana Containerships, decreasing the loan receivable to $74,238 (Note 4(b)).

                                


                        

                      

                      

                      

                      

                      

                    

                    

                    

                    

                    

                    

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                      

                    

                    

                  

                  

                

                

              

              

            

            

            
             

              

          

        

      

    

  

  F-27