2 fluctuations in currencies, interest rates and inflationary pressures; applicable. applicable. common shares. Risks Relating to our Industry We charter our vessels on time charter trips with short to medium duration in a volatile shipping industry and a decline in charter hire rates could affect our results of operations and our ability to pay dividends. We depend entirely on DWM and Steamship to provide the management of our fleet. The termination of our arrangements with DWM or Steamship, or DWM’s or Steamship’s failure to perform their obligations under our management agreements with them, may adversely affect our operations. changes in seaborne and other transportation patterns, including the distance cargo is transported by sea for reasons including but not limited to reductions in canal capacities, any geopolitical conflict and military responses; The dry bulk Risks associated with operating ocean-going vessels could affect our business and reputation, which could financial condition. such as the South China Sea and the Gulf of Aden off the coast of operating results and cash flows. an adverse effect on our business, financial condition, cash flows and operating results. business and our business, results of operations, cash flows and financial condition. Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business. Any of these factors could adversely affect our business, financial condition, and operating results. Under most of our present charters, if the vessel is arrested or detained as a result of a claim against us, we may be in default of our charter and the charterer may terminate the charter upon the passage of a period specified in the charter agreement, which will negatively impact our revenues and cash flows. Governments could requisition our vessels during a period of war or emergency, resulting in a loss of earnings. impairment charges or losses on sale. The market values of our vessels dividends, if and when declared. agreement with Diana Shipping, we cannot assure you that such agreement will successfully address all potential conflicts of interest that arise or that all conflicts will be resolved in our favor. Circumstances in any of these instances may make one decision advantageous to us but detrimental to Diana Shipping, Steamship or DWM, and vice versa. information in our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business and results of operations. In order to comply with the sulfur cap regulation issued on January 1, 2020, related to the control of sulfur in the emissions, our vessels are currently using very low sulfur fuel oil with less than 0.5% sulfur. invested in us and make further investments in us. If we do not meet these standards, our business and/or our ability to access capital could be harmed. Purchasing and operating secondhand vessels may result in increased operating costs and reduced operating days, which may adversely affect our earnings. their useful lives. guaranteed. There can be no guarantee that the services of the current directors and senior management team will be retained, or that suitably skilled and qualified individuals can be identified and employed, which may adversely impact our ability to commercial and financial performance. The loss of the services of any of the directors or other members of the senior management team and the costs of recruiting replacements may have a material adverse effect on our commercial and financial performance as well. If we are unable to hire, train and retain such personnel in a timely manner, our operations could be delayed and our ability to grow our business will be impaired and the delay and inability may have a detrimental effect upon our performance. dividends, if and when declared. 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 operating results and financial performance. operating results. We are choosing to “opt out” of the extended transition period relating to the exemption from new or revised financial accounting standards and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth public companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. jurisdiction over us and our operations would recognize a U.S. bankruptcy court’s jurisdiction if any other bankruptcy court would determine it had jurisdiction. There is substantial legal authority supporting this position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, in the absence of legal authority directly relating to PFIC rules, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if the nature and extent of our operations changed. Securities insolvent by the payment of such a dividend. We may not have sufficient surplus in the future to pay dividends. We can give no assurance that we will reinstate our dividends in the future or when such reinstatement might occur. speculative investing; common stock, the delisting could adversely affect the market liquidity of our common stock, our ability to obtain financing, Our amended and restated articles of incorporation authorize us to issue up to 1,000,000,000 shares of common stock, of which sales, or the announcements of proposed sales, of a large number of common shares by our large shareholders, or the perception that these sales could occur. assessment of market conditions. We intend to acquire additional vessels principally in the secondhand market, including acquisitions from unrelated third parties, and we may also acquire additional vessels from Diana Shipping or other related parties, provided that such related party acquisitions are negotiated and conducted on an arms-length basis. Diana Shipping has granted us a right of first refusal over six identified Nasdaq Capital Market confirming that we regained compliance with the minimum bid price requirement. As a result of this reverse stock split, there was no change in the number of authorized shares or the par value of our common stock. We are a global provider of shipping transportation services. We specialize in the ownership of vessels. Each of our vessels is owned through a separate Vessel BUILT / DWT Sister Ships* Gross Rate Com** Charterers Delivery Date Redelivery Date to Notes Protefs A $ 10,650 5.00 % Reachy International 8-Feb-21 18-Apr-22 - 20- 1 2004 / 73,630 dwt Calipso A $ 10,400 5.00 % Viterra Chartering 22-Jan-21 03-Dec-21 $ 18,750 5.00 % Winking Shipping 03-Dec-21 28-Dec-21 $ 17,100 5.00 % Contango Shipping 28-Dec-21 21-Jan-22 2005 / 73,691 dwt $ 13,850 5.00 % Hengdeli Deyesion 24-Jan-22 16-Feb-22 $ 17,850 5.00 % Atlantic Coal And 18-Feb-22 10-Mar-2022 $ 24,500 5.00 % Tongli Shipping Pte. 10-Mar-2022 08-Jun-22 - 05-Aug- Salt Lake City $ 13,000 5.00 % C Transport Maritime 9-Jan-21 1-Apr-22 - 30-Jun- * ** Total commission percentage paid to third parties. *** 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. Currently, our vessels are employed on time charter trips with short to 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. 10, 2024. Permits and Authorizations substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below. We ensure that all our vessels are currently compliant in all material respects with these regulations. costs as none of our vessels are fitted with scrubbers. 400 gross tonnage and above, in accordance with different values set for ship types and categories. With respect to the CII, the draft amendments would require ships of 5,000 gross tonnage to document and verify their actual annual operational CII achieved against a determined required annual operational CII. Additionally, MEPC 75 proposed draft amendments requiring that, on or before January 1, 2023, all ships above 400 gross tonnage must have an approved SEEMP on board. For ships above 5,000 gross tonnage, the SEEMP would need to include certain mandatory content. MEPC 75 also approved draft amendments to MARPOL Annex I to prohibit the use and carriage for use as fuel of heavy fuel oil (“HFO”) by ships in Arctic waters on and after July 1, 2024. The draft amendments introduced at MEPC 75 were adopted at the MEPC 76 session MEPC 77 adopted a non-binding resolution which urges Member States and ship operators to voluntarily use distillate or other cleaner alternative fuels or methods of propulsion that are safe for ships and could contribute to the reduction of Black Carbon emissions from ships when operating in or near the Arctic. MEPC 79 adopted amendments to MARPOL Annex VI, Appendix IX to include the attained and required CII values, the CII rating and attained EEXI for existing ships in the required information to be submitted to the IMO Ship Fuel Oil Consumption Database. MEPC 79 revised the EEDI calculation guidelines to include a CO2 conversion factor for ethane, a reference to the updated ITCC guidelines, and a clarification that in case of a ship with multiple load line certificates, the maximum certified summer draft should be used when determining the deadweight. The amendments will enter into force on May 1, 2024. In July 2023, MEPC 80 approved the plan for reviewing CII regulations and guidelines, which must be completed at the latest by January 1, 2026. There will be no immediate changes to the CII framework, including correction factors and voyage adjustments, before the review is completed. The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance. Once mid-ocean exchange ballast water treatment requirements become mandatory under the BWM Convention, the cost of compliance could increase for ocean carriers and may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements. Vessels of 24 meters in length or more but less than 400 gross tonnage engaged in international voyages will have to carry a Declaration on Anti-fouling Systems signed by the owner or authorized agent. 2021 and entered into force on January 1, 2023. territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations. The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. For example, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reforms regarding the safety of drilling operations, and the former U.S. President Trump had proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling. the 2013 Vessel General Permit (“VGP”) program (which authorizes discharges incidental to operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast water management regulations adopted under the U.S. National Invasive Species Act (“NISA”), such as mid-ocean ballast exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA establishes a new framework for the regulation of vessel incidental discharges under Clean Water Act (CWA), requires the EPA to develop performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop implementation, compliance, and enforcement regulations within two years of EPA’s promulgation of standards. Under VIDA, all provisions of the 2013 VGP and USCG regulations regarding ballast water treatment remain in force and effect until the EPA and U.S. Coast Guard regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must continue to comply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We have submitted NOIs for our vessels where required. Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels or the implementation of other port facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters. our business routines. Additional EU regulations which are part of the EU’s “Fit-for-55,” could also affect our financial position in terms of compliance and administration costs when they take effect. Greenhouse Gas Regulation At MEPC 77, the Member States agreed to initiate the revision of the Initial IMO Strategy on Reduction of GHG emissions from ships, recognizing the need to strengthen the ambition during the revision process. In July 2023, MEPC 80 adopted a revised strategy, which includes an enhanced common ambition to reach net-zero greenhouse gas emissions from international shipping around or close to 2050, a commitment to ensure an uptake of alternative zero and near-zero greenhouse gas fuels by 2030, as well as i) reducing the total annual greenhouse gas emissions from international shipping by at least 20%, striving for 30%, by 2030, compared to 2008; and ii) reducing the total annual greenhouse gas emissions from international shipping by at least 70%, striving for 80%, by 2040, compared to 2008. enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel’s hull; a continuous synopsis record kept onboard showing a vessel’s history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship’s identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certification requirements. States market. We carry insurance coverage as customary in the shipping industry. However, not all risks can be insured, specific claims may be rejected, and we might not be always able to obtain adequate insurance coverage at reasonable rates. vessels. is filed as Exhibit 8.1 to this annual report on Form 20-F. Period from November 30, 2021 through December 31, 2021 (2021 Company Period)”, contained in our annual report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 31, 2023. Our business is mainly comprised of the following elements: Voyage Expenses ) financial results. vessel’s useful life is adjusted at the date such regulations are adopted. 57 OceanPal Inc. Predecessors For the period from January 1, 2021 through For the year ended For the year ended November 29, 2021 December 31, 2020 December 31, 2019 Results of Operations in millions of U.S. dollars in millions of U.S. dollars in millions of U.S. dollars Time charter revenues 11.34 9.41 12.37 Voyage Expenses 0.42 0.98 1.55 Vessel Operating Expenses 6.2 8.5 5.58 Depreciation and amortization of deferred charges 2.19 2.15 2.48 General and Administrative expenses 1.1 1.27 0.81 Management fees to related parties 0.68 0.76 0.73 Vessel Fair value adjustment — 0.2 — Vessel Impairment charges — — 3.05 Other loss/(income) — 0.24 0.04 Net income/(loss) 0.75 (3.8) (1.87) Year ended December 31, 2022 Voyage the new charterers on same vessel delivery under certain of our charters. our vessels. vessel depreciation expense was partially offset by the effect of the change in the estimated scrap rates of our vessels from $250 per lightweight ton to $400, effective July 1, 2023. our business. Increased Interest Rates increased interest rates can usually be controlled because shipping companies typically monitor costs to preserve liquidity and encourage suppliers and service providers to lower rates and prices during such periods. proceeds from equity offerings. Our operating cash flow is generated from charters on our vessels, through our subsidiaries. Our main uses of funds have been capital expenditures for the acquisition of new vessels, expenditures incurred in connection with ensuring that our vessels comply with international and regulatory standards, and payments of dividends. date of this annual report. Flows City, and (iv) $0.02 million in connection with predelivery expenses of M/V Baltimore. Net cash provided by financing activities a material adverse effect on our business and results of operations. OceanPal Inc. Predecessors For the period from January 1, 2021 to For the year ended For the year ended November 29, 2021 December 31, 2020 December 31, 2019 Fleet Data: Average number of vessels (1) 3.0 3.0 3.0 Number of vessels at period-end 3.0 3.0 3.0 Weighted average age of vessels at period-end (in years) 16.6 15.7 14.7 Ownership days (2) 999 1,098 1,095 Available days (3) 999 1,024 1,095 Operating days (4) 996 971 1,013 Fleet utilization (5) 99.70 % 94.80 % 92.50 % For the period from April 15, 2021 (inception date) to Amounts in the tables below are in thousands of U.S dollars December 31, 2021 Average Daily Results: Time charter equivalent (TCE) rate (6) $ 13,333 Daily vessel operating expenses (7) 3,750 OceanPal Inc. Predecessors For the period from Amounts in the tables below are in thousands of U.S. dollars January 1, 2021 to For the year ended For the year ended Average Daily Results: November 29, 2021 December 31, 2020 December 31, 2019 Time charter equivalent (TCE) rate (6) $ 10,935 $ 8,235 $ 9,883 Daily vessel operating expenses (7) 6,206 7,739 5,098 For the period from April 15, 2021 (inception date) to Amounts in the tables below are in thousands of U.S dollars December 31, 2021 Time charter revenues $ 1,334 Less: voyage expenses (54) Time charter equivalent revenues $ 1,280 Available days 96 Time charter equivalent (TCE) rate $ 13,333 OceanPal Inc. Predecessors Amounts in the tables below are in thousands of U.S. dollars For the period from January 1, For the year ended For the year ended 2021 to November 29, 2021 December 31, 2020 December 31, 2019 Time charter revenues $ 11,343 $ 9,411 $ 12,370 Less: voyage expenses (418) (978) (1,548) Time charter equivalent revenues $ 10,925 $ 8,433 $ 10,822 Available days 999 1,024 1,095 Time charter equivalent (TCE) rate $ 10,935 $ 8,235 $ 9,883 The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions. The current conditions in the dry bulk sector with decreased charter rates and decreased vessel market values are conditions that the Company vessels of the same type and particulars with the Company’s operating fleet and they cover at least a full business cycle, where applicable. In addition, for 2023, the effective fleet utilization is assumed to 98% in the Company’s exercise, in line with the Company’s historical performance and its expectations for future fleet utilization under its 2023 and 2022, was $73.1 million and $64.5 million, respectively. Based on: (i) the carrying value plus unamortized dry-docking and special survey costs of each of our vessels as of December 31, 2023 and 2022 and (ii) what we believe the charter-free market value of each of our vessels was as of December 31, 2023 and 2022, the aggregate carrying value of five and four of the vessels in our fleet as of December 31, 2023 and 2022, respectively, exceeded their aggregate charter-free market value by approximately $13.1 million and $11.5 million, respectively, as noted in the table below. This aggregate difference represents the approximate analysis of the amount by which we believe we would have to increase our loss if we sold all of such vessels at December 31, 2023 and 2022, on a charter-free basis, on industry standard terms, in cash transactions, and to a willing buyer where we were not under any compulsion to sell, and where the buyer was not under any compulsion to buy. For purposes of this calculation, we have assumed that these five and four vessels, respectively, would be sold at a price that reflects our estimate of their charter-free market values as of December 31, 2023, and 2022, respectively. of his or her term of office. Officers are appointed from time to time by our board of directors and hold office until a successor is appointed or their employment is terminated. Name Age Position Semiramis Paliou Class I Director and Chairperson Robert Perri Class II Director Class I Director 2026. The business address of each officer and director is the address of our principal executive offices, which are located at Pendelis 26, 175 64 Palaio Faliro, Athens, Greece. Ioannis Zafirakis has served as a Director Board Diversity Matrix (As of April Country of Principal Executive Offices Greece Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors Did No Disclose Female Male Non-Binary Gender Part I: Gender Identity Directors 2 5 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 For 2023, fees and expenses of our directors amounted to $0.26 million. 10, 2024. of Directors awarded 3,332 in 2023 and 3,332 in 2024 of our Series C Preferred Shares to our directors, pursuant to our 2021 Equity Incentive Plan, as amended and restated, as an annual incentive bonus. All restricted shares vest ratably over two years from their grant date. The restricted shares are subject to forfeiture until they become vested. Unless they forfeit, grantees have the right to receive and retain all dividends paid and to exercise all other rights, powers and privileges of a holder of shares. the internal audit function and the independent auditors the annual audited and quarterly financial statements. The members of the Audit Committee are Nikolaos Veraros (chairperson and financial expert) and Alexios Chrysochoidis (member and financial expert). subsidiaries. Shares Beneficially Owned Identity of person or group Number Percentage* Diana Shipping Inc. (1) — 0 % All other officers and directors as a group 26,000 0 % stock were issued to Diana Shipping. Diana Shipping Inc. also owns 500,000 shares of our Diana Shipping. The vessel was delivered to us on February 8, 2023. The acquisition of the vessel was approved by a committee of independent members of our Board of Directors. this annual report. travel related services. Dividend Policy The dividend rate on shares of our Series D Preferred Stock is 7.0% per annum per $1,000 of liquidation preference per share (equal to $70 per annum per share) and is not subject to adjustment. Not existing material agreements. United States Federal Income Taxation of Our Company The Treasury Regulations provide, in pertinent part, that the stock of a foreign corporation will be considered to be “primarily traded” on an established securities market in a country if the number of shares of each class of stock that is traded during the taxable year on all established securities markets in that country exceeds the number of shares in each such class that is traded during that year on established securities markets in any other single country. Our common shares will be “primarily traded” on the Nasdaq Capital Market, which is an established securities market for these purposes. on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of such United States trade or business. income tax principles. Distributions in excess of the Company’s earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because the Company is not a United States corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends received deduction with respect to any distributions such corporate U.S. Holders receive. Dividends paid with respect to the Company’s common shares will generally be treated as “passive category income” or, in the case of certain types of U.S. Holders, “general category income” for purposes of computing allowable foreign tax credits for United States foreign tax credit purposes. Based on the Company’s anticipated operations and future projections, the Company does not believe that it is, nor does it expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, and the Company is not relying upon an opinion of counsel on this issue, the Company’s belief is based principally on the position that, for purposes of determining whether the Company is a PFIC, the gross income the Company derives or is deemed to derive from the time chartering and voyage chartering activities of its wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that the Company or its wholly-owned subsidiaries own and operate in connection with the production of such income, in particular, the vessels, should not constitute passive assets for purposes of determining whether the Company is a PFIC. The Company believes there is substantial legal authority supporting its position consisting of case law and United States Internal Revenue Service (“IRS”), pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Moreover, in the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the IRS or a court could disagree with the Company’s position. In addition, although the Company intends to conduct its affairs in a manner to avoid being classified as a PFIC with respect to any taxable year, there can be no assurance that the nature of the Company’s operations will not change in the future. of any distributions received by the Non-Electing Holder on the common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common shares), and (ii) any gain realized on the sale or other disposition of the common shares. Under these rules, (i) the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s holding period for the common shares; (ii) the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, would be taxed as ordinary income; and (iii) the amount allocated to each of the other prior taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year. If a Non-Electing Holder dies while owning our common shares, the Non-Electing Holder’s successor would be ineligible to receive a step-up in the tax basis of those common shares. Shareholders may also request a copy of our filings at no cost by writing or telephoning us at the following address: info@oceanpal.com Shareholders and only received the proceeds for the Class A warrants sold together with the Selling Shareholders’ shares of common stock. effectiveness of our internal control over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on this assessment, management has determined that our internal control over financial reporting as of December 31, 2023, is effective. U.S Dollars. 1.2 2.1 2.2 2.3 2.4 2.5 Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act 4.1 4.2 4.4 4.6 4.7 4.8 4.9 4.10 11.1 12.1 12.2 13.1 13.2 101.CAL Inline XBRL Taxonomy Schema Calculation Linkbase 101.LAB Inline XBRL Taxonomy Extension Schema Label Linkbase 101.PRE Inline XBRL Taxonomy Extension Schema Presentation Linkbase 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) F-2 SHEETS 2023 and 2022 2021 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,673 Accounts receivable, trade 811 Due from a related party (Note 3(c)) 70 Inventories 186 Prepaid expenses and other assets 460 Total current assets 3,200 FIXED ASSETS: Vessels, net (Note 4) 45,728 Total fixed assets 45,728 OTHER NON-CURRENT ASSETS: Deferred charges 152 Total assets $ 49,080 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable, trade and other 263 Due to related parties (Note 3) 59 Accrued liabilities 381 Deferred revenue 228 Total current liabilities 931 Commitments and contingencies (Note 5) — STOCKHOLDERS’ EQUITY: Preferred stock, $0.01 par value; 100,000,000 shares authorized, 510,000 issued and outstanding as at December 31, 2021 (Note 6) 5 Common stock, $0.01 par value; 1,000,000,000 shares authorized; 8,820,240 issued and outstanding as at December 31, 2021 (Note 6) 88 Additional paid-in capital (Notes 3 and 6) 47,991 Retained earnings 65 Total stockholders’ equity 48,149 Total liabilities and stockholders’ equity $ 49,080 2021 REVENUES: Time charter revenues (Note 2(n)) $ 1,334 EXPENSES: Voyage expenses (Note 2(n)) 54 Vessel operating expenses 360 Depreciation (Note 4) 354 General and administrative expenses 358 Management fees to related parties (Note 3) 74 Operating income $ 134 Net income and comprehensive income $ 134 Dividends on Series C preferred stock (Note 6(d)) $ 69 Net income attributable to common stockholders $ 65 Earnings per common share, basic (Note 7) $ 0.01 Earnings per common share, diluted (Note 7) $ 0.01 Weighted average number of common stock, basic (Note 7) 8,820,240 Weighted average number of common stock, diluted (Note 7) 12,275,691 Preferred stock Series B Preferred stock Series C Common stock Additional Total # of Par # of Par # of Par paid-in Retained stockholders' Shares Value Shares Value Shares Value capital Earnings equity BALANCE, April 15, 2021 — $ — — $ — 500 $ 5 $ — $ — $ — Net income — $ — — $ — — $ — $ — $ 134 $ 134 Cancellation of common stock (Note (6(a)) — — — — (500) (5) — — — Issuance of common stock (Note 6(a)) — — — — 8,820,240 88 40,421 — 40,509 Issuance of Series B preferred stock (Note 6(c)) 500,000 5 — — — — — — 5 Issuance of Series C preferred stock (Note 6(d)) — — 10,000 — — — 7,570 — 7,570 Dividends on series C preferred stock (Note 6(d)) — — — — — — — (69) (69) BALANCE, December 31, 2021 500,000 $ 5 10,000 $ — 8,820,240 $ 88 $ 47,991 $ 65 $ 48,149 2021 Cash Flows from Operating Activities: Net income $ 134 Adjustments to reconcile net income to net cash from operating activities: Depreciation 354 (Increase) / Decrease in: Accounts receivable, trade 24 Due from a related party (70) Inventories 23 Prepaid expenses and other assets (460) Deferred charges (152) Increase / (Decrease) in: Accounts payable, trade and other 263 Due to related parties 59 Accrued liabilities, net of accrued preferred dividends 312 Deferred revenue 228 Net cash provided by Operating Activities $ 715 Cash Flows used in Investing Activities: Payments for vessel improvements (Note 4) (42) Net cash used in Investing Activities $ (42) Cash Flows from Financing Activities: Proceeds from Spin-Off 1,000 Net cash provided by Financing Activities $ 1,000 Net increase in cash and cash equivalents $ 1,673 Cash and cash equivalents at beginning of the period 0 Cash and cash equivalents at end of the year $ 1,673 SUPPLEMENTAL CASH FLOW INFORMATION Issuance of common and preferred stock in exchange for entities acquisition $ 47,084 (Expressed in thousands of U.S. Dollars – except share, per share, warrants’ and scrap rate data, unless otherwise stated) DSI. On June 24, 2021, OP filed a confidential registration statement on Form 20-F with the US Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, to effect a spin-off of – Recent Accounting Pronouncements 2023, and 2022. Interest earned on cash and cash equivalents is separately presented in the accompanying consolidated statements of comprehensive (loss)/income under “Interest Income”. 2023 and 2022 and for the period from inception (April 15, 2021) through December 31, 2021 increase the earning capacity or improve the efficiency or safety of the vessels; otherwise, these amounts are charged to expense as incurred. As In case of vessel acquisitions, if the agreed contract price includes non-cash consideration through the issuance of equity instruments to the seller, the vessel acquisition is accounted for under the provisions of ASC 360 and the non-cash consideration is assessed through fair value measurement. risk (Note 11). bunkers are purchased by the charterer and sold back to the Company on the redelivery of the vessel. Bunker gain, or loss, Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share. 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. Related Parties sheets. Directors of the Company. Accumulated Vessel Cost Depreciation Net Book Value - Vessels contributed by DSI $ 46,040 — $ 46,040 - Additions and improvements 42 — 42 - Depreciation for the period — (354) (354) Balance, December 31, 2021 $ 46,082 $ (354) $ 45,728 On March 8, 2022, the Company received a written notification from Nasdaq indicating that because the closing bid price of the Company’s common shares for 30 consecutive business days, i.e., from January 21, 2022 to March 7, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq, the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the original applicable grace period to regain compliance was 180 days, or until September 5, 2022. On September 6, 2022, the Company was granted an additional 180-day period from the Nasdaq Capital Market, through March 6, 2023, to regain compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market. Effective December 22, 2022, the Company effected a one-for-ten reverse stock split on its issued and outstanding common stock. The one-for ten ratio was approved by the Company’s Board on December 19, 2022. The Company’s common stock began trading on a split-adjusted basis on the Nasdaq Capital Market at the opening of trading on December 22, 2022. As a result of this reverse stock split, the number of the Company’s issued and outstanding common shares was reduced with no change in the number of the Company’s authorized shares or the par value of the Company’s common stock. As of January 6, 2023, the Company’s common stock remained at $1.00 per share or higher for ten consecutive days. As such, on January 9, 2023, the Company received a letter from the Nasdaq confirming that it regained compliance with the minimum bid price requirement.TABLE OF CONTENTS Pagei Page 14 111274343566062636472727373737385 74747474757575767687 87 87 PART III 767676●●fluctuations in currencies and interest rates, and the impact of the discontinuance of the London Interbank Offered Rate for US Dollars, or LIBOR, after June 30, 2023 on any of our debt referencing LIBOR in the interest rate;●general market conditions, including fluctuations in charter hire rates and vessel values;●changes in demand in the dry-bulk shipping industry;●changes in the supply of vessels, including when caused by new newbuilding vessel orders or changes to or terminations of existing orders, and vessel scrapping levels;●changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs;●our future operating or financial results;●availability of financing and refinancing and changes to our financial condition and liquidity, including our ability to pay amounts that it owes and obtain additional financing to fund capital expenditures, acquisitions and other general corporate activities and our ability to obtain financing and comply with the restrictions and other covenants in our financing arrangements;i●•changes in governmental rules and regulations or actions taken by regulatory authorities;●potential liability from pending or future litigation;●compliance with governmental, tax, environmental and safety regulation, any non-compliance with the U.S. Foreign Corrupt Practices Act of 1977 (FCPA) or other applicable regulations relating to bribery;●new environmental regulations and restrictions, whether at a global level stipulated by the International Maritime Organization, and/or regional/national imposed by regional authorities such as the European Union or individual countries;●potential cyber-attacks which may disrupt our business operations;●the failure of counter parties to fully perform their contracts with us;●our dependence on key personnel;●adequacy of insurance coverage;●the volatility of the price of our common shares;●our incorporation under the laws of the Marshall Islands and the different rights to relief that may be available compared to other countries, including the United States;●disruptions;disruptions, including “trade wars”, such as the armed conflicts in the Ukraine and the Middle East, acts of piracy or maritime aggression, such as recent maritime incidents involving vessels in and around the Red Sea, global public health threats and major outbreaks of diseases;●•the impact of port or canal congestion or disruptions;●the length and severity of the continuing novel coronavirus (COVID-19) outbreak and its impact in the dry-bulk shipping industry;●terrorists;terrorists, such as the maritime incidents in and●other important factors described from time to time in around the reports we file with the U.S. SecuritiesRed Sea; and Exchange Commission, or the SEC.iiPART IItem 1.Identity of Directors, Senior Management and AdvisersItem 1. Identity of Directors, Senior Management and Advisers Item 2.Offer Statistics and Expected TimetableItem 2. Offer Statistics and Expected Timetable Applicable.applicable.Item 3.Key InformationUnless the context otherwise requires, as used in this annual report, the terms “OceanPal,” the “Company,” “we,” “us,” and “our” refer to OceanPal Inc. and its consolidated subsidiaries. All references to “$,” “US$,” “U.S.$,” “U.S. dollars,” “dollars” and “USD” are to the lawful currency of the United States.We use the term deadweight tons, or dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, in describing the size of our vessels.We were incorporated by Diana Shipping Inc. (“Diana Shipping”), under the laws of the Republic of the Marshall Islands on April 15, 2021, to serve as the holding company of the three vessel-owning subsidiaries that were contributed to us by Diana Shipping (the “OceanPal Inc. Predecessors”), together with $1.0 million in working capital, in connection with the distribution of all of our issued and outstanding common stock to Diana Shipping’s shareholders on November 29, 2021 (the “Spin-Off”). In connection with the Spin-Off, Diana Shipping received 500,000 shares of our Series B Preferred Stock, par value $0.01 per share (“Series B Preferred Shares”), and 10,000 shares of our 8.0% Series C Cumulative Convertible Perpetual Preferred Shares. (“Series C Preferred Shares”). We and Diana Shipping are independent publicly traded companies with separate independent boards of directors. All references in this annual report to us for periods prior to the Spin-Off refer to the OceanPal Inc. Predecessors. The consolidated financial statements of the Company for the period from inception (April 15, 2021) through December 31, 2021 reflect the operation of the vessels starting from November 30, 2021. Operations prior to the November 30, 2021 consisted principally of organizational expenses.Item 3. Key Information A. B. Capitalization and Indebtedness Applicable.C.Reasons for the Offer and Use of ProceedsC. Reasons for the Offer and Use of Proceeds Applicable.D.Risk FactorsD. Risk Factors shares,securities, or the trading price of our securities.1●•carriersvessels are volatile and have fluctuated significantly in the past years, which may adversely affect our earnings, revenuebusiness, financial condition, operating results and profitability andour ability to comply with loan covenants in any future borrowing facilities we may enter into.●The current state of the global financial markets and current economic conditions may adversely impact our results of operation, financial condition, cash flows, and ability to obtain additional financing or refinance any future credit facilities on acceptable terms which may negatively impact our business.●The U.K.’s withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.●Regulations relating to ballast water discharge may adversely affect our revenues and profitability.●Outbreaks of epidemic and pandemic diseases, including COVID-19, and governmental responses thereto 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 may adversely affect our profits.●We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business.●The operation of dry bulk carriers has certain unique operational risks which could affect our earnings and cash flow.●If our vessels call on ports located in countries or territories that are the subject of sanctions or embargoes imposed by the U.S. government, the European Union, the United Nations, or other governmental authorities, it could lead to monetary fines or penalties and may adversely affect our reputation and the market for our securities.●We conduct business in China, where the legal system is not fully developed and has inherent uncertainties that could limit the legal protections available to us.●Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect on our business.●Changing laws and evolving reporting requirements could have an adverse effect on our business.●We have a limited operating history upon which investors can evaluate our future prospects.●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 in the future, trigger breaches of certain financial covenants contained in any future borrowing facilities we may enter into, and 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.●A cyber-attack could materially disrupt our business.2●Climate change and greenhouse gas restrictions may adversely impact our operations and markets.●Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks.●Our earnings may be adversely affected if we are not able to take advantage of favorable charter rates.●We 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 retain and recruit qualified key executives, key employees or key consultants, may delay our development efforts or otherwise harm our business.●Technological innovation and quality and efficiency requirements from our customers could reduce our charterhire income and the value of our vessels.●We may not have adequate insurance to compensate us if we lose our vessels or to compensate third parties.●Our vessels may suffer damage and we may face unexpected drydocking costs, which could adversely affect our cash flow and financial condition.●We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.●We are exposed to volatility in the USD London Interbank Offered Rate, or LIBOR, and the potential discontinuance of LIBOR beyond 2023, which could, while limited, 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.●Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.●We may be subject to United States federal income tax on United States source income, which may reduce the Company’s earnings.●United States tax authorities could treat us as a “passive foreign investment company,” which could have adverse United States federal income tax consequences to United States holders.Risks RelatingCertain of our officers and directors participate in business activities not associated with us, and do not devote all of their time to our Common Stock●We cannot assure you that our board of directors will pay dividends in the future.●The market price of our common stock may fluctuate widely and there is no guarantee that an active and liquid public market for you to resell our common stock in the future will continue.3●Since we are incorporated in the Marshall Islands, which does not have a well-developed body of corporate law, you may have more difficulty protecting your interests than shareholders of a U.S. corporation.●Future sales of our common stock could cause the market price of our common stock to decline.
Risks Relating to our Securities●Anti-takeover provisions in our organizational documents could make it difficult for our shareholders to replace or remove our current board of directors or have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock.carriersvessels are volatile and have fluctuated significantly in the past years, which may adversely affect our earnings, revenuebusiness, financial condition, operating results and profitability.Theour ability to comply with loan covenants in any future borrowing facilities we may enter into.is cyclical withand any attendant volatility in charter hire rates and profitability.rates. The degree of charter hire rate volatility among different types of dry bulk carriersvessels has varied widely.widely, and time charter and spot market rates for dry bulk vessel have in the recent past declined below the operating costs of vessels. When we charter our vessels pursuant to spottime charter trips with short to medium duration or short-term timespot charters, we are exposed to changes in the spot market and short-termshort to medium term charter ratesmarket for dry bulk carriers and such changes may affect our earnings and the value of our dry bulk carriers at any given time. We cannot assure you that we will be able to successfully charter our vessels in the future or renew existing charters at rates sufficient to allow us to meet our obligations or pay any dividends in the future. Fluctuations in charter rates result mainly from changes in the supply of and demand for vessel capacity and changes in the supply of and demand for the major commodities carried by water internationally. Because the factors affecting the supply of and demand for vessels are outside of our control and are unpredictable, the nature, timing, direction and degree of changes in industry conditions are also unpredictable. A significant decrease in charter rates would adversely affect our profitability,operating results, cash flows and may cause vessel values to decline, and, as a result, we may have to record an impairment charge in our consolidated financial statements which could adversely affect our financial results.●•supply of and demand for energy resources, commodities, semi-finished and finished consumer and industrial products;●changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products;●the location of regional and global exploration, production and manufacturing facilities●the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;●the globalization of production and manufacturing;●developmentsthe ongoing conflicts between Russia and Ukraine and Israel and Hamas and the maritime incidents in international trade and fluctuations in industrial and agricultural production;around the Red Sea;●economic slowdowns caused by public health events such as the recent COVID-19 outbreak;●natural disasters and other disruptions in international trade;●4●changes in seaborne and other transportation patterns, including the distance cargo is transported by sea and trade patterns;●international sanctions, embargoes, import and export restrictions, nationalizations, piracy, terrorist attacks and armed conflicts;●legal and regulatory changes including regulations adopted by supranational authorities and/or industry bodies, such as safety and environmental regulations and requirements;●weather and acts of God and natural disasters;●environmental and other regulatory developments;●currency exchange rates; and
For a discussion of factors affecting the supply of the dry bulk vessel capacity, see “—An oversupply of vessel capacity in the dry bulk shipping market in which we operate may depress charter rates when they occur, which may limit our ability to operate our vessels profitably.” These factors are outside of our control and are unpredictable, and accordingly we may not be able to correctly assess the nature, timing and degree of changes in charter rates.●weather.●1.●2.●3.andor canal congestion;●4.5. rate of older vessels;●6.●7.●8.9. 10. 11. 12. dry-docked,drydocked, awaiting repairs or otherwise not available for hire; and●sanctions (in particular, sanctions on Iran and Venezuela, amongst others).13. 14. 15. freightcharter rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating costs, costs associated with classification society surveys, normal maintenance and insurance coverage costs, the efficiency and age profile of the existing dry bulk fleet in the market and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for dry bulk shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.carriersvessels will be dependent upon economic growth in the world’s economies, including China and India, seasonal and regional changes in demand, changes in the capacity of the global dry bulk carrier fleet and the sources and supply of dry bulk cargocargoes transported by sea. While there has been a general decrease in new dry bulk carriervessels’ ordering since 2014, the capacity of the global dry bulk carrier fleet could increase and economic growth may not resume in areas that have experienced a recession or continue in other areas. Adverse economic, political, social or other developments could have a material adverse effect on our business and operating results.5carriervessel charter market remains significantly below its historic highis highly volatile and this may have an adverse effect on our revenues, earnings and profitability.andas well as the performance of the entire dry bulk shipping market and has been very volatile. The BDI declined 94% in 2008 from a peak of 11,793 in May 2008 to a low of 663 in December 2008 and has remained volatile since then, reaching a record low of 290 in February 2016. In 2020,2023, the BDI ranged from a low of 393 in May530 on February 16, 2023 to a high of 2,097 in October, increased3,346 on December 4, 2023. During the first months of 2024, BDI ranged from a low of 1,308 on January 17, 2024, to a high of 5,6502,419 on October 7, 2021March 18, 2024, and dropped to 2,217closed at 1,587 on December 24, 2021. The BDI further dropped to 1,296 on January 26, 2022 and as of April 1, 2022 was 2,357.10, 2024. There can be no assurance that the dry bulk charter market will continue to improve in the future. The volatility in charter rates in the dry bulk market affects our earningsrevenues and operating results of operations and also affects the value of our dry bulk vessels, which follows the trends of dry bulk charter rates.carriervessel charter market has had and may continue to have additional adverse consequences for our industry and business, including an absence of financing for our vessels, no active secondhand market for the sale of our vessels, charterers seeking to renegotiate the rates for our existing time charters, and widespread loan covenant defaults in the dry bulk shipping industry.industry and any future financings which we may enter into. Accordingly, our financial condition and operating results could be adversely affected, which could in turn cause the value of our common shares could be substantiallybeing reduced or eliminated.The current state of the global financial markets and currentadversely impact our results of operation, financial condition, cash flows, and abilitycontinue to obtain additional financing or refinance any future credit facilities on acceptable terms which may negatively impact our business.Global financial marketsthe dry bulk shipping industry.economicadverse changes in market conditions have been, and continue to be, volatile. Beginning in February 2020, due in part to fears associated with the spread of COVID-19 (as more fully described below), global financial markets, and starting in late February, financial markets in the U.S., experienced even greater relative volatility and may continue as COVID-19 pandemic and governmental responses continues to develop. Credit markets and the debt and equity capital markets have been distressed and the uncertainty surrounding the future of the global credit markets has resultedregulatory climate in reduced access to credit worldwide, particularly for the shipping industry. These issues, along with significant write-offs in the financial services sector, the repricing of credit risk and the current economic conditions, may make it difficult to obtain financing in the future. The current state of global financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices that will not be dilutive to our shareholders or preclude us from issuing equity at all. Economic conditions may also adversely affect the market price of our common shares.Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the availability and cost of obtaining money from the public and private equity and debt markets has become more difficult. Many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers and other market participants, including equity and debt investors, and some have been unwilling to invest on attractive terms or even at all. Due to these factors, we cannot be certain that additional financing will be available if needed and to the extent required, on acceptable terms or at all. If financing or refinancing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due or we may be unable to meet our obligations as they come due or we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take advantage of business opportunities as they arise.Credit markets inChina, the United States, the European Union and Europeworldwide may adversely affect our business.inaccounted for the past experienced significant contraction, deleveraging and reduced liquidity, and there is a risk thatmajority of global dry bulk transportation growth annually over the U.S. federal government and state governments and European authorities continue to implement a broad variety of governmental action and/or new regulation of the financial markets. Global financial markets and economic conditions have been, and continue to be, disrupted and volatile. We face risks attendant to changes in economic environments, changes in interest rates, and instability in the banking and securities markets around the world, among other factors which may have a material adverse effect onlast decade. Accordingly, our results of operations and financial condition and operating results, as well as our future prospects, would likely be hindered by an economic downturn in any of these countries or geographic regions. In recent years China and India have been among the world’s fastest growing economies in terms of gross domestic product and have been the main driving forces behind increases in shipping trade and the demand for marine transportation. While China, in particular, has enjoyed rates of economic growth significantly above the world average, slowing economic growth rates may causereduce the pricecountry’s contribution to world trade growth, especially in view of our common sharesdeteriorating real estate property values. If economic growth declines in China, India and other countries in the Asia Pacific region, we may face decreases in shipping trade and demand. The level of imports to decline.6The U.K.’s withdrawal fromeconomic growth) or other relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions, internal political instability, changes in currency policies, changes in trade policies and territorial or trade disputes. Furthermore, a slowdown in the economies of the United States or the European Union, or certain other Asian countries may also have adverse impacts on economic growth in the Asia Pacific region. Therefore, a negative effect on globalchange in the economic conditions financial markets and our business.In June 2016, a majority(including any negative changes resulting from any pandemic) of voters in the U.K. elected to withdraw from the EU in a national referendum (informally known as “Brexit”), a process that the government of the U.K. formally initiated in March 2017. Since then, the U.K. and the EU have been negotiating the terms of a withdrawal agreement, which was approved in October 2019 and ratified in January 2020. The U.K. formally exited the EU on January 31, 2020, although a transition period remained in place until December 2020, during which the U.K. was subject to the rules and regulations of the EU. On December 24, 2020, the U.K. and the EU entered into a trade and cooperation agreement (the “Trade and Cooperation Agreement”), which was applied on a provisional basis from January 1, 2021. While the new economic relationship does not match the relationship that existed during the time the U.K. was a member state of the EU, the Trade and Cooperation Agreement sets out preferential arrangements in certain areas such as trade in goods and in services, digital trade and intellectual property. Negotiations between the U.K. and the EU are expected to continue in relation to other areas which are not covered by the Trade and Cooperation Agreement. The long-term effects of Brexit will depend on the effects of the implementation and application of the Trade and Cooperation Agreement and any other relevant agreements between the U.K. and EU. Brexit has also given rise to calls for the governments of other EU member states to consider withdrawal. These developments and uncertainties, or the perception that any of themthese countries or elsewhere may occur, have hadreduce demand for dry bulk vessels and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Any of these factors could depress economic activity and restrict our access to capital,their associated charter rates, which could have a material adverse effect on our business, financial condition and onoperating results, as well as our consolidated financial position, resultsprospects.managementtreatment systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s ballast water. Depending on the date of the International Oil Pollution Prevention (‘IOPP’) renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 Discharge Performance Standard (‘D-2 standard’) on or after September 8, 2019. For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ships constructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017. We currently have one vessel that has to comply with the updated guideline by mid-2022 and costs of compliance may be substantial and adversely affect our revenues and profitability.By approximately 2022,On October 26, 2020, the EPA published a Notice of Proposed Rulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA. On October 18, 2023, the EPA published a supplemental notice of the proposed rule sharing new ballast water data received from the U.S. Coast Guard (“USCG”) and providing clarification on the proposed rule. The public comment period for the proposed rule ended on December 18, 2023. Once EPA finalizes the rule (possibly by Fall 2024), USCG must develop corresponding implementation, compliance and enforcement regulations regarding ballast water. Thewater within two years. While all our vessels are equipped with ballast water treatment system and we believe all our vessels are in compliance with the new regulations, any changes in such regulations could require the installation of new equipment which may cause us to incur substantial costs.An over-supply of dry bulk carrier capacity may lead to reductions in current charter rates, vessel values and profitability.The market supply of dry bulk carriers has increased materially since 2009 due to a high level of new deliveries in the last few years. Although dry bulk newbuilding deliveries have tapered off since 2014, newbuildings continued to be delivered through the end of 2018. While vessel supply will continue to be affected by the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or accidental losses, an over-supply of dry bulk carrier capacity could prolong the period during which low charter rates prevail.7adversely affecthave a material adverse effect on our revenuesoperating results and stock price.●1.2. ●3.acts of God;●4.terrorism;●5.accidents;accidents and pollution;●6.orand damage; and●7.grounding, fire, explosions and collisions, human error, war, terrorism,armed conflicts, terrorist or piracy and other circumstances or events. In addition, changing economic, regulatory andincidents, political conditionsaction in somevarious countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes or adverse weather conditions; and●Piracy or robbery.conditions.These hazards may result in death or injury to persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships, and market disruptions, delay or rerouting, which may also subject us to litigation. If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs and maintenance are unpredictable and may be substantial. We may have to pay drydocking costs that our insurance does not cover in full. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual costrepairs, may adversely affectcircumstances or events could increase our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facilitycosts or lower our vessels may be forced to travel to a drydocking facility that is not conveniently located to our vessels’ positions.revenues. The loss of earnings while these vessels are forced to wait for space or to travel to more distant drydocking facilities may adversely affect our business and financial condition. Further, the total loss of anyinvolvement of our vessels in an environmental disaster may also harm our reputation as a safe and reliable vessel owner anddry bulk operator. If we are unable to adequately maintain or safeguard our vessels, we may be unable to prevent any such damage, costs, or loss which could negatively impact our business, financial condition, results of operations and available cash.available cash.World events could affect our results of operationsability to pay dividends, if and financial condition.Continuing conflicts and recent developmentswhen declared, in the Middle East, including increased tensions betweenfuture may be adversely affected by changing economic, political and government conditions in the U.S. and Iran, as well as other geographic countries and areas, geopolitical events such as Brexit, terroristregions where our vessels are employed or other attacks, and war (or threatened war) or international hostilities, such as thoseregistered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts.North Korea andChina, the armed conflict between Russia and Ukraine may lead to armed conflict or actsand a resultant severe worsening of terrorismRussia’s relations with western economies, the slowing economic growth in China, continuing threat of terrorist attacks around the world, which may contribute to further economiccontinuing instability and conflicts and other ongoing hostilities in the global financial markets,Middle East (such as recent maritime incidents in and international commerce. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. around the Red Sea) and other geographic areas and countries.conflicts haveinstability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region.region, in and around the Red Sea with recent attacks on vessels which armed Houthi groups have claimed responsibility for in connection with the recent conflict in the Gaza Strip (these groups have stated that these attacks are a response to the Israel-Hamas conflict), and the Black Sea in connection with the recent conflict in Ukraine. Acts of terrorism and piracy have also affected vessels trading in regions8Somalia and, in particular the Gulf of Guinea region off Nigeria, which experienced increased incidents of piracy in 2019, which have declined during 2020 and 2021.Somalia. Any of these occurrences could have a material adverse impact on our future performance, operating results. Furthermore, the recent hostilities between Russiaresults, cash flows and Ukraine,financial position.addition to sanctions announced on February 22,of 2022, by President Biden and several European leaders announced various economic sanctions against Russia and any forthcoming sanctions,in connection with the aforementioned conflict in the Ukraine region, which may also adversely impact our business,business.escalationUkraine-Russia-related sanctions program, established with the Ukraine-related national emergency declared in E.O. 13660 and subsequently expanded and addressed through certain additional authorities. The United States has also issued several Executive Orders that prohibit certain transactions related to Russia, including the importation of conflicts between Russiacertain energy products of Russian Federation origin (including crude oil, petroleum, petroleum fuels, oils, liquefied natural gas and coal), and all new investments in Russian by U.S. persons, among other prohibitions and export controls. Furthermore, the United States has also prohibited a variety of specified services related to the maritime transport of Russian Federation origin crude oil and petroleum products, including trading/commodities brokering, financing, shipping, insurance (including reinsurance and protection and indemnity), flagging, and customs brokering. These prohibitions took effect on December 5, 2022 with respect to the maritime transport of crude oil and on February 5, 2023 with respect to the maritime transport of other petroleum products. An exception exists to permit such services when the price of the seaborne Russian oil does not exceed the relevant price cap; but implementation of this price exception relies on a recordkeeping and attestation process that allows each party in the supply chain of seaborne Russian oil to demonstrate or confirm that oil has been purchased at or below the price cap. Violations of the price cap policy or the risk that information, documentation, or attestations provided by parties in the supply chain are later determined to be false may pose additional risks adversely affecting our business. The ongoing conflict could result in the imposition of further economic sanctions or new categories of export restrictions against individuals in or connected to Russia. While in general much uncertainty remains regarding the global impact of the conflict in Ukraine, may lead to further regional and international conflicts or armed action. Itit is possible that such conflict could disrupt supply chains and cause instability in the global economy.Additionally, Brexit, or similar events in other jurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business and operations.Outbreaks of epidemic and pandemic diseases, including COVID-19, and governmental responses theretotensions could adversely affect the Company’s business, financial condition, operating results and cash flows. For instance, on February 24, 2023, OFAC issued a new determination pursuant to Section 1(a)(i) of Executive Order 14024, which enables the imposition of sanctions on individuals and entities who operate or have operated in the metals and mining sector of the Russian economy. Increased restrictions on the metals and mining sector may pose additional risks adversely affecting our business. such as COVID-19 (as described more fully below), influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred in various parts of the world in which we operate, including China, Japan and South Korea, which may even become pandemics, could lead to a significant decrease of demand for the transportation of dry bulk cargoes. Such events may also adversely impact our operations, including timely rotation of our crews, the timing of completion of any outstanding or future repair works in drydock as well as the operations of our customers. The ongoingDelayed rotation of crew may adversely affect the mental and physical health of our crew and the safe operation of our vessels as a consequence.has, among other things, caused delaysby the World Health Organization on March 11, 2020 and uncertainties relating to newbuildings, drydockings and other functions of shipyards.The ongoing outbreak of the novel coronavirus (COVID-19) has already caused severewas declared no longer a global disruptions and may continue tohealth emergency on May 5, 2023, negatively affected economic conditions, supply chains, labor markets, and demand for certain shipped goods both regionally and globally as well as globally and otherwise impact our operations anda result of government efforts to combat the operationspandemic, including the enactment or imposition of our customers and suppliers. Governments in affected countries continue to impose travel bans, quarantines and other emergency public health measures. Companies are also taking precautions, such as requiring employeeswork remotely, imposing travel restrictionswhich our business, the global economy and temporarily closing businesses. These restrictions,the dry bulk transportation industry may be negatively affected by future pandemics, epidemics or other outbreaks of infectious diseases is highly uncertain and future preventionwill depend on numerous evolving factors that we cannot predict, including, but not limited to (i) the duration and mitigationseverity of the infectious disease outbreak; (ii) the imposition of restrictive measures are likely to continuecombat the outbreak and slow disease transmission; (iii) the introduction of financial support measures to have an adverse impact on global economic conditions, which could materially and adversely affect our future operations. Uncertainties regardingreduce the economic impact of the COVID-19 outbreak is likely to resulton the economy; (iv) volatility in sustained market turmoil, which could also negatively impact our business, financial conditionthe demand for and cash flows. As a resultprice of these measures, our vessels may not be able to call on ports,oil and gas; (v) shortages or may be restricted from disembarking from ports, located in regions affected by the outbreak. In addition we may experience severe operational disruptions and delays, unavailability of normal port infrastructure and services including limited access to equipment, critical goods and personnel, disruptions to crew change, quarantine of ships and/or crew, counterparty solidity, closure of ports and custom offices, as well as disruptionsreductions in the supply chainof essential goods, services or labor; and industrial production, which(vi) fluctuations in general economic or financial conditions tied to the outbreak, such as a sharp increase in interest rates or reduction in the availability of credit. We cannot predict the effect that an outbreak of a new COVID-19 variant or strain, or any future infectious disease outbreak, pandemic or epidemic may lead to reduced cargo demand, amongst other potential consequences attendant to epidemic and pandemic diseases.The COVID-19 pandemic and measures to contain its spread have negatively impacted regional and global economies and trade patterns in markets in which we operate, the way we operateon our business, results of operations and the businesses of our charterersfinancial condition, which could be material and suppliers. These negative impacts could continue or worsen, even after the pandemic itself diminishes or ends. Companies, including us, have also taken precautions, such as requiring employees to work remotely and imposing travel restrictions, while some other businesses have been required to close entirely. Moreover, we face significant risks to our personnel and operations due to the COVID-19 pandemic. Our crews face risk of exposure to COVID-19 as a result of travel to ports in which cases of COVID-19 have been reported. Our shore-based personnel likewise face risk of such exposure, as we maintain offices in areas that have been impacted by the spread of COVID-19.Measures against COVID-19 in a number of countries have restricted crew rotations on our vessels, which may continue or become more severe. As a result, in 2020, vessel operators experienced and may continue to experience disruptions to normal vessel operations caused by increased deviation time associated with positioning vessels to countries in which they can undertake a crew rotation in compliance with such measures. Delays in crew rotations have led to issues with crew fatigue and may continue to do so, which may result in delays or other operational issues. We expect to incur increased expenses due to incremental fuel consumption and days in which our vessels are unable to earn revenue in order to deviate to certain ports on which we would ordinarily not call during a typical voyage. We may also incur additional expenses associated with testing, personal protective equipment, quarantines, and travel expenses such as airfare costs in order to perform crew rotations in the current environment.The COVID-19 pandemic and measures in place against the spread of the virus have led to a highly difficult environment in which to dispose of vessels given difficulty to physically inspect vessels. The impact of COVID-19 has also resulted in reduced industrial activity in China with temporary closures of factories and other facilities, labor shortages and restrictions on travel. We believe these9disruptions along with other seasonal factors, including lower demand for some of the cargoes we carry such as iron ore and coal, contributed to lower drybulk rates in 2020.Epidemics may also affect personnel operating payment systems through which we receive revenues from the chartering of our vessels or pay for our expenses, resulting in delays in payments.adverse. Organizations across industries, including ours, are rightly focusing on their employees’ well-being, whilewhilst making sure that their operations continue undisrupted and at the same time, adapting to the new ways of operating. As such employees are encouraged or even required to operate remotely which significantly increases the risk of cyber security attacks.At present, it is not possible to ascertain the overall impact of COVID-19 on our business. However, the occurrence of any of the foregoing events or other epidemics or an increase in the severity or duration of the COVID-19 or other epidemics could have a material adverse effect on our business, results of operations, cash flows, financial condition, value of our vessels, and ability to pay dividends.The extent of the COVID-19 outbreak’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, any resurgence or mutation of the virus, the continued availability of vaccines and their global deployment, the development of effective treatments, the imposition of effective public safety and other protective measures and the public’s response to such measures. There continues to be a high level of uncertainty relating to how the pandemic will evolve, how governments and consumers will react and progress on the approval and distribution of vaccines, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, the ultimate severity of the COVID-19 outbreak is uncertain at this time and therefore we cannot predict the impact it may have on our future operations, which impact could be material and adverse, particularly if the pandemic continues to evolve into a severe worldwide health crisis.Acts of piracy on ocean-going vessels could adversely affect our business.Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden off the coast of Somalia, Sulu Sea and Celebes Sea and in particular the Gulf of Guinea region off Nigeria, which experienced increased incidents of piracy in 2019. Although the frequency of sea piracy worldwide has generally decreased since 2013, sea piracy incidents continue to occur. Acts of piracy could result in harm or danger to the crews that man our vessels. In addition, if these piracy attacks occur in regions in which our vessels are deployed that insurers characterized as “war risk” zones or Joint War Committee “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including due to employing onboard security guards, could increase in such circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vessel is seized by pirates, the charterer may dispute this and withhold charterhire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for a certain number of days and is therefore entitled to cancel the charter party, a claim that we would dispute. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance for our vessels, could have a material adverse impact on our business, financial condition and earnings.endedending June 30 and September 30, and, conversely, our revenues may be stronger in fiscal quarters endedending December 31 and March 31. While this seasonality will not directly affect our operating results, it could materially affect our operating results to the extent our vessels are employed in the spot market in the future.profits.willdo not bear the cost of fuel or bunkers for vessels operating on time charters, fuel is a significant factor in negotiating charter rates.rates and the largest expense in our shipping operations when our vessels are off-hire and/or idle. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at10the time of charter negotiation. Fuel is also a significant, if not the largest, expense in shipping when vessels are under voyage charter.as relevant circumstances may arise. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply of and demand for oil and gas, actions by the Organization of Petroleum Exporting Countries or OPEC(the “OPEC”), and other oil and gas producers, war and armed conflicts and other hostilities such as the ongoing conflict between Russia and the Ukraine and Israel and Hamas, the recent maritime incidents in and around the Red Sea, the unrest in oil producing countries and regions, regional production patterns and environmental concerns and regulations. In March 2020 the price of oil decreased significantly due to economic conditions and anconcerns. Any future increase in oil production. However, fuel prices have increased since then and may continue to increase in the future, including as a result of the continuing impact new regulations mandating a reduction in sulfur emissions to 0.5% as of January 2020. The current conflict in Ukraine and the response of the international community to such conflict is also having a significant impact on the price of oil and, as result, is resulting in significant increases in the cost of fuel for bunkers for the shipping industry as a whole. Further increases in fuel prices in the future may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail. Otherregulationsdirection remains. Any increases to bunker costs for our vessels when off-hire and/or idle have, could have an adverse impact on our operating results and cash flows. This might lead to a decrease in the economic viability of older vessels that lack fuel efficiency and a reduction of useful lives of these vessels.a similar impact.business.11dry bulk carriers has certain unique operational risks which could affect our earnings and cash flow.The international shipping industry is an inherently risky business involving global operations.ocean-going vessel carries inherent risks. Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, bad weather and other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, environmental accidents, war, armed conflicts, terrorism, piracy, labor strikes, boycotts and other circumstances or events. In addition, transporting cargoes across a wide varietyChanging economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of international jurisdictions creates a risk of business interruptions due to political circumstances in foreign countries, hostilities,waterways, piracy, terrorism, labor strikes and boycotts,boycotts. Damage to the potential for changesenvironment could also result from our operations, particularly through spillage of fuel, lubricants or other chemicals and substances used in tax ratesoperations, or policies, and the potential for government expropriation of our vessels. Any of these eventsextensive uncontrolled fires. These hazards may result in death or injury to persons, loss of revenues increased costs and decreased cash flowsor property, the payment of ransoms, environmental damage, higher insurance rates, damage to our customers,customer relationships and market disruptions, delay or rerouting, any of which may subject us to litigation. As a result, we could impair their abilitybe exposed to make payments to ussubstantial liabilities not recoverable under our charters.Furthermore,insurances. Further, the involvement of our vessels in a serious accident could harm our reputation as a safe and reliable vessel operator and lead to a loss of business. Epidemics and other public health incidents may also lead to crew member illness, which can disrupt the operations of our vessels, or to public health measures, which may prevent our vessels from calling on ports or discharging cargo in the affected areas or in other locations after having visited the affected areas.vessels, such as dry bulk carriers,vessels has certain unique operational risks. With a dry bulk carrier,vessel, the cargo itself and its interaction with the vessel can be an operationala risk. By their nature, dry bulk cargoes are often heavy, dense and easily shifted, and react badly to water exposure. In addition, dry bulk carriersvessels are often subjected to battering treatment during unloading operations with grabs, jackhammers (to pry encrusted cargoes out of the hold), and small bulldozers. This treatment may cause damage to the dry bulk vessel. VesselsDry bulk vessels damaged due to treatment during unloading procedures may be more susceptible to a breach to theat sea. Hull breaches in dry bulk carriersvessels may lead to the flooding of the vessels’their holds. If a dry bulk carrier suffers flooding occurs in itsthe forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel’s bulkheads may buckle under the resulting pressure leading to the loss of athe dry bulk vessel. These risks may also impact the risk of loss of life or harm to our crew.repairmaintain or safeguard our vessels, after such damages, we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition earnings, and ability to pay dividends, if any, in the future.or operating results. In addition, the loss of any of our vessels could harm our crew and our reputation as a safe and reliable vessel owner and operator.We cannot assure you that we will be adequately insured against all risks or that we will be able to obtain adequate insurance coverage at reasonable rates for our vessels in the future. For example, in the past more stringent environmental regulations have led to increased costs for, and in the future may result in the lack of availability of, insurance against risks of environmental damage or pollution. Additionally, our insurers may refuse to pay particular claims. Any significant loss or liability for which we are not insured could have a material adverse effect on our financial condition.Ifcallcalled on ports or operatelocated in countries or territories that are the subject toof country-wide or territory-wide sanctions andor embargoes imposed by the U.S. government or other applicable governmental authorities (“Sanctioned Jurisdictions”) in 2023 in violation of applicable sanctions or embargoes laws, such activitiesembargo laws. Our contracts with our charterers may result in a sanctions violation and we could be subject to monetary fines, penalties, or other sanctions, and our reputation and the market for our ordinary shares could adversely affected. Although we endeavor to take precautions reasonably designed to mitigate such risks, it is possible that, in the future,prohibit them from causing our vessels mayto call on ports located in Sanctioned Jurisdictions on charterer’s instructions and/sanctioned countries or territories or carrying cargo for entities that are the subject of sanctions. Although our charterers may, in certain causes, control the operation of our vessels, we have monitoring processes in place reasonably designed to ensure our compliance with applicable economic sanctions and embargo laws. Nevertheless, it remains possible that our charterers may cause our vessels to trade in violation of sanctions provisions without our consent. If such activities result in a violation of applicable sanctions or embargo laws, we could be subject to monetary fines, penalties, or other sanctions, and our reputation and the market for our securitiescommon shares could be adversely affected.U.S. and otherapplicable sanctions and embargo laws and regulations of these different jurisdictions vary in their application as theyand do not all apply to the same covered persons or proscribe the same activities, and suchactivities. In addition, the sanctions and embargo laws and regulations of each jurisdiction may be amended to increase or expanded12over time.persons and entities designated under these laws and regulations are amended frequently. Moreover, most sanctions regimes provide that entities owned or controlled by the persons or entities designated in such lists are also subject to sanctions. The U.S. and EU have enacted new sanctions programs in recent years. Additional countries or territories, as well as additional persons or entities within or affiliated with those countries or territories, have, and in the future will, become the target of sanctions. These require us to be diligent in ensuring our compliance with sanctions laws. Further, the U.S. has increased its focus on sanctions enforcement with respect to the shipping sector. Current or future counterparties of ours may be affiliated with persons or entities that are or may be in the future the subject of sanctions or embargoes imposed by the governments of the U.S., theUnited States, EU, and/or other international bodies. If we determine that such sanctions require us to terminate existing or future contracts to which we, or our subsidiaries, are party or if we are found to be in violation of such applicable sanctions, our operating results of operations may be adversely affected, or we may suffer reputational harm.negativelyseverely impact our ability to access U.S. capital markets and conduct our business and could result in our reputation and the markets for our securities to be adversely affected and/or in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries or territories identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our common stockshares may adversely affect the price at which our common stock trades.shares trade. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities that are not controlled by the governments of countries or territories that are the subject of certain U.S. sanctions or embargo laws, or engaging in operations associated with those countries or territories pursuant to contracts with third parties that are unrelatedrelated to those countries or territories or entities controlled by their governments. Investor perception of the value of our common stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in the countries or territories that we operate in.willmay call in ports in areas where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims which could have an adverse effect on our business, operating results, of operations, cash flows and financial condition.attachattack one or more of our vessels, which wouldcould interrupt our business or have a negative effect on our cash flows.thata vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting“arresting” or attaching“attaching” a vessel through judicial or foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our business the cash flow of the charterer and/or require us to pay large sumsa significant amount of fundsmoney to have the arrest or attachment lifted, which would have a negativean adverse effect on our cash flows. and voyages may be subject to regulations in China that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees. Applicable laws and regulations in China may not be well publicized and may not be known to us or to our charterers in advance of us or our charterers becoming subject to them, and the implementation of such laws and regulations may be inconsistent. Changes in Chinese laws and regulations, including with regards to tax matters, or changes in their implementation by local authorities could affect our vessels if chartered to Chinese customers as well as our vessels calling to Chinese ports and could have a material adverse impact on our business, financial condition and results of operations.13We have a limited operating history upon which investors can evaluate our future prospects.We have a limited operating history upon which an evaluation of our business plan or performance and prospects can be made. Our business and prospects must be considered light of the potential problems, delays, uncertainties and complications encountered in connection with a newly established business. The risks include, but are not limited to, the possibility that we will not successfully manage our fleet; or that we are not able to upgrade and enhance our vessels to accommodate new features or regulations and expanded services. There are no assurances that we can successfully address these challenges and if unsuccessful, we and our business, financial condition and operating results could be materially and adversely affected.The market values of our vessels have fluctuated in recent years and may decline in the future, which could limit the amount ofour ability to borrow funds that we can borrow in the future, trigger breaches of certain financial covenants contained in any future borrowing facilities we may enter into, and adversely affect our operating results, and we may incur a loss if we sell vessels following a declineand/or result in their market values.which are related to prevailing freight charter rates, have fluctuated significantlygenerally experienced high volatility in recent years. While the market values of vessels and the freightdry bulk charter market have a very close relationship as the charter market moves from trough to peak, the time lag between the effect of charter rates on market values of ships can vary.vary, and sometimes, values can be to a greater or lesser extent affected by the respective move in charter rates.14 have generally experienced high volatility, and you should expect the market values of our vessels to fluctuate depending on a number of factors, including:●1.hire rates;●2.●3.●4.●5.●6.●7.●8.●9.Thevaluesvalue of our vessels are at low levels compared to historical averages and if the market values of our vessels were to decline, further, we may not be able to comply with certain covenants contained in any future loan facilities we enter into and we may not be able to incur debt on terms that are acceptable to us or at all or to refinance any debt we may have in the future. of operations, cash flow and financial condition could be adversely affected. Moreover, if we sell a vessel at a time when vessel prices have fallen and before we have recorded an impairment adjustment to our financial statements, the sale may be at less than the vessel’s carrying amount in our financial statements, resulting in a loss and a reduction in earnings. In addition, if vessel values persist or decline, further, we may have to record an impairment adjustment in our financial statements which could adversely affect our financial results.short-term time charterscharter trips with short to medium duration in a volatile shipping industry and a decline in charter hire rates could affect our results of operations and our ability to pay dividends.short-term time charterscharter trips with short to medium duration is not unusual in the dry bulk shipping industry, the short-term time charter market is highly competitive and spot market charter hire rates (which affect time charter rates) may fluctuate significantly based upon available charters and the supply of, and demand for, seaborne shipping capacity. While the short-term to medium-term time charter market may enable us to benefit in periods of increasing charter hire rates, we must consistently renew our charters and this dependence makes us vulnerable to declining charter rates. As a result of the volatility in the dry bulk carrier charter market, we may not be able to employ our vessels upon the termination of their existing charters at their currentfavorable charter hire rates or at all. The dry bulk carrier charter market is volatile, and in the recent past, short-termcharter market rates for time charter trips with short to medium duration and spot market charter ratesvoyages for some dry bulk carriers declined below the operating costs of those vessels before rising. We cannot assure you that future charter hire rates will enable us to operate our vessels profitably, or to pay dividends.Our15Chief Executive Officer and Director, Mr. Eleftherios A. Paratrifon,Papatrifon, also serves as Chief Operating Officera Director of Diana Shipping; and our Director, President, Interim Chief Financial Officer and Secretary, Mr. Ioannis Zafirakis, also serves as Chief Strategy Officer, Chief Financial Officer, Treasurer and a Director of Diana Shipping; and our Chief Corporate Development and Governance Officer and Secretary, Ms. Margarita Veniou, also serves as Chief Corporate Development, Governance & Communications Officer of Diana Shipping. Mrs. Paliou, Mr. Papatrifon and Mr. Zafirakis also serve on our Executive Committee. As a result, Mrs. Paliou, Mr. Papatrifon, and Mr. Zafirakis and Ms. Veniou have fiduciary duties to manage the business of Diana Shipping and its affiliates in a manner beneficial to such entities and their shareholders. Consequently, they may encounter situations in which their fiduciary obligations to Diana Shipping and us are in conflict. We use our best efforts to cause compliance with all applicable laws and regulations in addressing such conflicts of interest. OurCertain of our executive officers and certain of our directors participate in business activities not associated with us and are not required to work full-time on our affairs. Our executive officers may devote less time to us than if they were not engaged in other business activities and may owe fiduciary duties to the shareholders of other companies with which they may be affiliated, including Diana ShippingShipping. Their other business activities may create conflicts of interest in matters involving or affecting us and our customers and it is not certain that any of these conflicts of interest will be resolved in our favor. This could have a material adverse effect on our business, financial condition, results of operations and cash flows.agreementagreements with us other than in accordance with the terms of our management agreements with them, either of which could adversely affect our operations during the process of identifying a replacement for DWM or Steamship (as applicable) and have a material adverse effect on our financial condition and results of our operations.16More specifically, on October 27, 2016,In July 2023, nations at the International Maritime Organization’s Marine Environment Protection Committee (“MEPC”) announced its decision concerningupdated the implementation of regulations mandating a reduction in sulfur emissions from 3.5% currently to 0.5% as of the beginning of January 1, 2020. Additionally, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies —levels of ambition to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40%20% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50%70% by 20502040 compared to 2008 while pursuing efforts towards phasing them out entirely.lendersbanks, and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks.lendersbanks and other market participants are increasingly focused on ESG practices and in recent years have placed increasing importance on the implications and social cost of their investments. The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices. Companies which do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.17indebtedness.indebtedness, if any. Further, it is likely that we will incur additional costs and require additional resources to monitor, report and comply with wide ranging ESG requirements. The occurrence of any of the foregoing could have a material adverse effect on our business and financial condition.Investment in derivative instruments such as forward freight agreements could result in losses.From time to time, we may take positions in derivative instruments including forward freight agreements, or FFAs. FFAs and other derivative instruments may be used to hedge a vessel owner’s exposure to the charter market by providing for the sale of a contracted charter rate along a specified route and period of time. Upon settlement, if the contracted charter rate is less than the average of the rates, as reported by an identified index, for the specified route and period, the seller of the FFA is required to pay the buyer an amount equal to the difference between the contracted rate and the settlement rate, multiplied by the number of days in the specified period. Conversely, if the contracted rate is greater than the settlement rate, the buyer is required to pay the seller the settlement sum. If we take positions in FFAs or other derivative instruments and do not correctly anticipate charter rate movements over the specified route and time period, we could suffer losses in the settling or termination of the FFA. This could adversely affect our results of operations and cash flows.We may have difficulty effectively managing any growth, which may adversely affect our earnings.The growth of our fleet in the future may impose significant additional responsibilities on our management and staff. We expect to grow our fleet further in the future and this may require us to increase the number of our personnel. We may also have to increase our customer base to provide continued employment for the new vessels.Any future growth will primarily depend on our ability to:●locate and acquire suitable vessels;●identify and consummate acquisitions or joint ventures;●enhance our customer base;18●manage our expansion; and●obtain required financing on acceptable terms.Growing any business by acquisition presents numerous risks, such as undisclosed liabilities and obligations, the possibility that indemnification agreements will be unenforceable or insufficient to cover potential losses and difficulties associated with imposing common standards, controls, procedures and policies, obtaining additional qualified personnel, managing relationships with customers and integrating newly acquired assets and operations into existing infrastructure. We cannot give any assurance that we will be successful in executing any future growth plans or that we will not incur significant expenses and losses in connection with our future growth.have the right torigorously inspect previously ownedsecondhand vessels prior to our purchase, of them and we expect to inspect secondhand vessels that we acquire, such inspections dothis does not provide us with the same knowledge about their condition and cost of any required (or anticipated) repairs that we would have had if these vessels had been built for and operated exclusively by us. AAccordingly, we may not discover defects or other problems with secondhand vesselvessels prior to purchasing or chartering-in or may have conditionsincur costs to terminate a purchase agreement. Any such hidden defects or defects that we were not aware of when we bought the vessel, and which may require us to incur costly repairs to the vessel. These repairsproblems may require us to put a vessel into extensive repairs or drydock, which would reduce our average fleet utilization and increase our operating days. costs. If a hidden defect or problem is not detected, it may result in accidents or other incidents for which we may become liable to third parties.we usually dogovernmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment and may restrict the type of activities in which the vessel may engage. As our vessels age, market conditions may not receivejustify those expenditures or enable us to operate our vessels profitably during the benefitremainder of warranties on secondhand vessels.parties with our customers.agreements, management agreements, shipbuilding contracts and credit facilities. Such agreements subject us to counterparty risks. The ability and willingness of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime and offshore industries, the overall financial condition of the counterparty, charter rates received for specific types of vessels, and various expenses. For example, the combination of a reduction of cash flow resulting from a decline in world trade and the lack of availability of debt or equity financing may result in a significant reduction in the ability of our charterers to make payments to us. In addition, in depressed market conditions, our charterers and customers may no longer need a vessel that is then under charter or contract or may be able to obtain a comparable vessel at lower rates. As a result, charterers and customers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts. As a result, this may have a significant impact on our revenues due to our concentrated customer base, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.In addition, in depressed market conditions, our charterers may no longer need a vessel that is currently under charter or may be able to obtain a comparable vessel at lower rates. As a result, charterers may seek to renegotiate the termsWe employ ourin a highlyand transportation of dry bulk cargoes is extremely competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do. Competition for the transportation of dry bulk cargocargoes by sea is intense and depends on price, location, size, age, condition and the acceptability of the vessel and its operators to the charterers. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do. Due in part to the highly fragmented market, competitors with greater resources than us could enter the dry bulk shipping industry and operate larger fleets through consolidations or acquisitions and may be able to offer lower charter rates and higher qualitymore modern vessels than we are able to offer. If we are unable to successfully compete with other dry bulk shipping companies, our results of operations may be adversely impacted.19We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively impact the effectiveness of our management and results of operations.Our success depends to a significant extent upon the abilities and efforts of our management team, our ability to retain key members of our management team and to hire new members as may be necessary. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining replacement personnel could have a similar effect. We do not currently, nor do we intend to, maintain “key man” life insurance on any of our officers or other members of our management team.charterhirecharter income and the value of our vessels.charterhirecharter rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilitiesshipyards and pass through canals and straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. IfWe face competition from companies with more modern vessels having more fuel efficient designs than our vessels, or eco vessels, and if new dry bulk vessels are built that are more efficient or more flexible or have longer physical lives than ourthe current eco vessels, competition from thesethe current eco vessels and any more technologically advanced vessels could adversely affect the amount of charterhirecharter payments we receive for our vessels and the resale value of our vessels could significantly decrease. Similarly, technologically advanced vessels are needed to comply with environmental laws, the investment in which, along with the foregoing, could have a material adverse effect on our results of operations, charter hire payments and resale value of vessels. This could have an adverse effect on our results of operations, cash flows, financial condition and ability to pay dividends. against by vessel owners and operators. Our current insurance includes hull and machinery insurance, war risksrisk insurance, and protection and indemnity insurance (which includes environmental damage and pollution insurance). and freight, demurrage and defense insurance. We can give no assuranceprocure insurance for our vessels against those risks that we are adequatelybelieve the shipping industry commonly insures against. Despite the above policies, we may not be insured againstin amounts sufficient to address all risks and we or thatan intermediary may not be able to obtain adequate insurance coverage for our insurers will pay a particular claim. vessels in the future or may not be able to obtain certain coverage at reasonable rates. Even if our insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement vessel in the event of a total loss. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs.Our vessels may suffer damage and we may face unexpected drydocking costs, whichAny of these factors could adversely affecthave a material adverse effect on our cash flow and financial condition.If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and can be substantial. The loss of earnings while a vessel is being repaired and repositioned, as well as the actual cost of these repairs not covered by our insurance, would decrease our earnings and available cash. We may not have insurance that is sufficient to cover all or any of the costs or losses for damages to our vessels and may have to pay drydocking costs not covered by our insurance.20The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. Currently, our fleet consists of three vessels in operation, having a combined carrying capacity of 319,131 dwt, and a weighted average age of 17 years as of April 6, 2022. As our fleet ages, we will incur increased costs. Older vesselsWe are typically less fuel efficient and more costly to maintain than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage. We cannot assure you that, as our vessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.We may be exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harmmay adversely affect our reported revenue and results of operations.amountamounts of net income that we report in future periods. While we historically have not mitigated the risk associated with exchange rate fluctuations through the use of financial derivatives, we may employ such instruments from time to time in the future in order to minimize any such risk. Our use of financial derivatives would involve certain risks, including the risk that losses on a hedged position could exceed the nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwilling to satisfy its contractual obligations, which could have an adverse effect on our results.Volatilityfinancial condition and results of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and cash flow.The London Interbank Offered Rate (“LIBOR”) is the subject of recent national, international and other regulatory guidance and proposals for reform. The publication of U.S. Dollar LIBOR for the one-week and two-month U.S. Dollar LIBOR tenors ceased on December 31, 2021, and the ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct Authority, announced the publication of all other U.S. Dollar LIBOR tenors will cease on June 30, 2023. The United States Federal Reserve concurrently issued a statement advising banks to cease issuing U.S. Dollar LIBOR instruments after 2021. As such, any new loan agreements we enter into will not use LIBOR as an interest rate.The consequences of these developments cannot be entirely predicted, but could include an increase in the cost of variable rate indebtedness and obligations. LIBOR has been volatile in the past, with the spread between LIBOR and the prime lending rate widening significantly at times. Because the interest rates fluctuate with changes in LIBOR, significant changes in LIBOR could have a material effect on the amount of interest payable on any debt we may have in the future, which in turn, could have an adverse effect on our financial condition.Furthermore, the calculation of interest in most financing agreements in our industry has been based on published LIBOR rates. Due in part to uncertainty relating to the LIBOR calculation process, in recent years, lenders have insisted on provisions that entitle the lenders, in their discretion, to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we are required to agree to such a provision in future financing agreements, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow. In addition, the banks currently reporting information used to set LIBOR have stopped such reporting after 2021, when their commitment to reporting information ends. The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has proposed an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or “SOFR.” The impact of such a transition from LIBOR to SOFR could be significant for us.In order to manage our exposure to interest rate fluctuations, we may use interest rate derivatives to effectively fix an amount of any floating rate debt obligations we may have in the future. No assurance can however be given that the use of these derivative instruments, if any, may effectively protect us from adverse interest rate movements. The use of interest rate derivatives may affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to21post cash as collateral, which may impact our free cash position. Interest rate derivatives may also be impacted by the transition from LIBOR to SOFR or other alternative rates.We derivesmallclient’s failure to make payments to us because of financial inability, disagreements with us or otherwise. The ability of each of our counterparties to perform their obligations under a charter with us depends on a number of charterers. If one or morefactors that are beyond our control and may include, among other things, general economic conditions, the condition of our charterers chooses notthe shipping industry, prevailing prices for the commodities and products which we transport and the overall financial condition of the counterparty. Should a counterparty fail to charter our vessels or ishonor its obligations under an agreement with us, we may be unable to performrealize revenue under one or more charters withthat charter and could sustain losses. In addition, if we lose an existing client, it may be difficult for us andto promptly replace the revenue we are not able to findderived from that counterparty. Any of these factors could have a replacement charter, we could suffer a loss of revenues that could adversely affectmaterial adverse effect on our business, financial condition, cash flows and results of operations.financial obligations depends on our subsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our subsidiaries, we may not be able to satisfy our financial obligations.22yearperiod and we will take this position for United States federal income tax return reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption in the current or future taxable years and thereby become subject to United States federal income tax on our United States source income. For example, if shareholders with a five percent or greater interest in the Company’s stock were, in the aggregate, to own 50% or more of our outstanding common shares on more than half the days during the taxable year, we may not be able to qualify for exemption under Section 883. Due to the factual nature of the issues involved, we can give no assurances on our tax-exempt status or that of any of our subsidiaries.U.S.United States federal income tax considerations.it iswe do not expected that we willexpect to be a PFIC with respect to any taxable year. In this regard, it is expected that gross income derived or are deemed to have been derived from time chartering activities will be treated as services income, rather than rental income. Accordingly, it is expected that income from time chartering activities should not constitute “passive income,” and the assets that we own and operate in connection with the production of that income should not constitute passive assets.23PFIC.PFIC this taxable year. Actual PFIC status for any taxable year, however, will not be determinable until after the end of such taxable year. Accordingly, there can be no assurances regarding our status as a PFIC for the current taxable year or any future taxable year. See the discussion in ““Item“Item 10. Additional Information—E. Taxation—United States Federal Income Taxation— Passive Foreign Investment Company Status and Significant Tax Consequences.” U.S. HoldersConsequences”. Our United States shareholders are urged to consult with their own tax advisors regarding the possible application of the PFIC rules.manysome of Nasdaq’s corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification of material non-compliance with Nasdaq corporate governance practices, and the establishment and composition of an audit committee and a formal written audit committee charter. For a list of the practices followed by us in lieu of Nasdaq’s corporate governance rules, we refer you to “Item 16G. Corporate Governance” in this annual report.Common StockTheWe do not have a declared dividend policy and if the Board determines to declare cash dividends on our common and preferred shares, or certain other securities, the timing and amount of any dividends declared will depend on, among other things, our earnings, financial condition and cash requirements and availability, our ability to obtain debt and equity financing on acceptable terms, or at all, as contemplated by our growth strategy, and the provisions of Marshall Islands law affecting the payment of dividends. In addition, other external factors, such as our future lenders imposing restrictions on our ability to pay dividends under the terms of future loan facilities we may enter into, may limit our ability to pay dividends.24Shares,Stock and our Series D Preferred Stock (and other preferred stock we have issued, or will issue in the future, with dividend rights ranking higher than our common shares), which in each case do or might rank prior to our common shares with respect to dividends, distributions and payments upon liquidation. No cash dividend may be paid on our common stock unless full cumulative dividends have been or contemporaneously are being paid or provided for on all outstanding shares of Series C Preferred SharesStock and Series D Preferred Stock (and other preferred stock we have issued, or will issue in the future, with dividend rights ranking higher than our common shares) for all prior and the then-ending dividend periods. Cumulative dividends on our shares of Series C Preferred Shares willStock and Series D Preferred Stock accrue at a rate of 8.0% and 7.0% per annum, per $1,000respectively, at a stated liquidation preference of $1,000 per Series C and Series D Preferred Share and are payable in cash or, at our election, in kind, quarterly on January 15, April 15, July 15 and October 15 of each year, or, if any such dividend payment date otherwise would fall on a date that is not a business day, the immediately succeeding business day.SharesStock and Series D Preferred Stock when due, we may suffer adverse consequences.SharesStock and Series D Preferred Stock will be paid in cash or, at our election, in kind. If we do not have sufficient cash to pay dividends to holders of ourshares of Series C Preferred SharesStock and/or Series D Preferred Stock or otherwise elect to pay dividends on theour Series C Preferred SharesStock and/or Series D Preferred Stock in kind, in the form of additional shares of common stock, then such issuance of additional Series C Preferred Shares issuanceshares of common stock will result in dilution to our existing shareholders and in additional dividend payment obligations of the Company going forward.forward in periods when our board of directors determines to declare common share dividends. In addition, a failure to pay dividends on our Series C Preferred SharesStock and/or Series D Preferred Stock when due will adversely affect our ability to utilize shelf registration statements to sell our securities, which may be an important fund-raising avenue for us in the future.widelydramatically, and may decline rapidly, regardless of any developments in the future, andour business. Overall, there is no guaranteeare various factors, many of which are beyond our control, that an active and liquid public market for you to resell our common stock incould negatively affect the future will continue.The market price of our common stock onor result in fluctuations in the Nasdaq Capital Market may be volatile due to factors such as:●actual or anticipated fluctuations in our quarterly and annual results and those of other public companies in our industry;●mergers and strategic alliances in the dry bulk shipping industry;●market conditions in the dry bulk shipping industry;●changes in government regulation;●shortfalls in our operating results from levels forecast by securities analysts;●announcements concerning us or our competitors; and●the general state of the securities market.The dry bulk shipping industry has been highly unpredictable and volatile. The market for common stock in this industry may be equally volatile. Therefore, we cannot assure you that you will be able to sell anyprice or trading volume of our common stock, youincluding but not limited to:have purchased atbe unfavorable, inaccurate, inconsistent or not disseminated on a price greater thanregular basis;equal to its original purchase price,other securities that we may issue in the future, and which may or that you will be able to sellmay not dilute the holdings of our existing stockholders;all.Nasdaq. On March 8, 2022 we received written notification from Nasdaq that because the closing bid price of our common stock for 30 consecutive business days was below the minimum $1.00 per share bid price requirement for continued listing on Nasdaq, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance is 180 days, or until September 5, 2022. We intend to monitor the closing bid price of our common stock during this grace period and, if necessary, will take steps necessary to regain compliance with the minimum bid price requirement. There are a number of other continued listing requirements that we must satisfy in order to maintain our listing on Nasdaq. Capital Market. If we fail to maintain compliance with all applicable continued listing requirements for Nasdaq, such as the minimum $1.00 per share bid price requirement, and Nasdaq determines to delist our25to repay any debt we may incur in the future and fund our operations.Since we In addition, our ability to raise additional capital through equity or debt financing would be greatly impaired. A suspension or delisting may also breach the terms of certain of our material contracts.Diana Shipping,holderforegoing, may be put on a “grey list” or a “blacklist”. Effective as of October 17, 2023, the Marshall Islands has been designated as a cooperating jurisdiction for tax purposes. If the Marshall Islands is added to the list of non-cooperative jurisdictions in the future and sanctions or other financial, tax or regulatory measures were applied by European Member States to countries on the list or further economic substance requirements were imposed by the Marshall Islands, our business could be harmed.will be ablethat, together, allow them to exert considerable influence over matters on which our shareholders are entitled to vote.SharesStock to Diana Shipping. These shares of Series B Preferred SharesStock (the “Series B Preferred Stock”) vote with our common shares and each share of Series B Preferred ShareStock entitles the holder thereof to the right to cast a number of votes for all matters on which our shareholders are entitled to vote of up to 34% of the total number of votes entitled to vote on all matters submitted to a vote of our common shareholders, subject to certain limitations that prevent Diana Shipping from exercising more than 49% of the aggregate voting authority derived from any voting security then held by Diana Shipping on any matter put to shareholders. Through its beneficial ownership ofIn addition, in connection with the Series B Preferred Shares,contribution, Diana Shipping is able to establish a quorum at any shareholder meeting. In addition, Diana Shippingalso received 10,000 shares of our Series C Preferred Shares,Stock (the “Series C Preferred Stock”), which are convertible into common shares at Diana Shipping’s option commencing uponfollowing the first anniversary of the original issue date (i.e. November 29, 2021), at a conversion price equal to the lesser of $6.50$1,300.00 and the 10-trading day trailing VWAP of our common shares, subject to certain adjustments. On October 17, 2023, Diana Shipping exercised its right to convert an aggregate of 9,793 shares of our Series C Preferred Stock, following which conversion, Diana Shipping as of April 10, 2024 owned 48.97% of our issued and outstanding shares of common stock and holds 207 shares of our Series C Preferred Stock. Through its beneficial ownership of common shares of Series B Preferred Stock, Diana Shipping is able to establish a quorum at any shareholder meeting. While Diana Shipping has no agreement, arrangement or understanding relating to the voting of theits common shares or shares of Series B Preferred Shares,Stock, it is able to influence the outcome of matters on which our shareholders are entitled to vote, including the election of directors and other significant corporate actions. In addition, an entity controlled by our Chairperson, also has the ability to cause the vote of up to 15% of the total number of votes entitled to vote on all matters submitted to a vote of our common shareholders through the ownership of our issued and outstanding Series E Preferred Shares. For more information, please see “Item 7B. Related Party Transactions —Issuance of Series E Preferred Stock.”. This concentration of ownership may have the effect of delaying, deferring, or preventing a change in control, merger, consolidation, takeover or other business combination. This concentration of ownership could also discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which could in turn have an adverse effect on the market price of our shares. So long as Diana Shipping continues to ownhave a significant amount of our equity,interest on us, even though the amount is less than 50% of our voting power, it will continue to be able to exercise considerable influence over our decisions. The interests of Diana Shipping may be different from your interests.5, 2022,10, 2024, we havehad outstanding Class A warrants under the January 2022 Offering (refer to discussion in Item 4. Information on the Company under the section “History and Development of the Company” below) that may obligate us to issue up to an additional 14,474,000of 72,370 common shares, and outstanding Class B warrants under the 2023 Registered Direct Offering that may obligate us to issue up to an additional of 750,000 common shares, or of 822,370 common shares in the aggregate, upon the exercise of these warrants in full. In addition, we may issue additional shares of common stock upon the conversion of one or more series of our preferred shares and may issue additional securities in the future for any purpose and for such consideration and on such terms and conditions as we may determine appropriate or necessary, including in connection with equity awards, financings or other strategic transactions. In addition, our stockholders may elect to sell large numbers of shares held by them from time to time.2629,829,0927,451,977 shares arewere issued and outstanding as of April 5, 2022.10, 2024. The number of shares of common stock available for sale in the public market will be limited by restrictions applicable under securities laws.Sales or issuances of a substantial number of any of the common shares mentioned above may cause thedecline.●authorizing our board of directors to issue “blank check” preferred stock without shareholder approval;●providing for a classified board of directors with staggered, three-year terms;●prohibiting cumulative voting in the election of directors;●authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of a majority of the outstanding shares of our common stock entitled to vote for the directors;●prohibiting shareholder action by written consent;●limiting the persons who may call special meetings of shareholders; and●establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings.Item 4.Information on the CompanyA.History and Development of the CompanyItem 4. Information on the Company A. History and Development of the Company vessel-owningformer vessel owning subsidiaries that were contributed to us by Diana Shipping (the “OceanPal Inc. Predecessors”) on November 29, 2021. Diana Shipping contributed the OceanPal Inc. Predecessors,, together with $1.0$1.0 million in working capital, in exchange forconnection with the distribution by us of all of ourthe 44,101 issued and outstanding common stock to Diana Shipping’s shareholders on November 29, 2021 (the “Spin-Off”). In connection with the Spin-Off, Diana Shipping received 500,000 shares of our Series B Preferred Stock and 10,000 shares of our 8.0% Series C Preferred Stock. Our common stock commenced tradingtrades on the Nasdaq Capital Market under the ticker symbol "OP" on“OP” since November 30, 2021.servicesservices. As of the date of this annual report, we own and operate five dry bulk carriers that transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers with a fleettotal cargo carrying capacity of three drybulk carriers.approximately 572,599 dwt. We intend to expand our fleet in the future and may acquire additional dry bulk carriers as well as vessels in other sectors based on our27drybulkdry bulk carriers currently owned by Diana Shipping.Shipping on the Spin-Off date. As of the date of this annual report, one of the six identified vessels from Diana Shipping remains available for our purchase. Pursuant to this right of first refusal, we have the right, but not the obligation, to purchase one or all of the sixthis identified vesselsvessel when and if the Diana Shipping determines to sell the vesselsvessel at fair market value at the time of sale. See “Item 7. Major Shareholders and Related Party Transactions—B.Transactions-B. Related Party Transactions.” We may also enter into newbuilding contracts to the extent that we believe they present attractive opportunities.www.oceanpal.com.www.oceanpal.com. None of the information contained on these websites is incorporated into or forms a part of this annual report.Recent DevelopmentsLiquidityWe expect that the funds received from Diana Shipping in the Spin-Off, the proceeds from the (described below) and revenue generated from our vessel charters will be sufficient to meet our working capital demands for the next 12 months and the foreseeable future thereafter.On January 17, 2022, we paid a dividend on our Series C Preferred Shares in the aggregate amount of $0.1 million.Underwritten Public Offeringeach unit200 units consisting of one share of our common stock (or one200 pre-funded warrantwarrants in lieu of one share of our common stock) and one200 Class A warrantwarrants to purchase one share of our common stock. In addition, certain selling stockholdersshareholders affiliated with us (the “Selling Stockholders”Shareholders”) sold an aggregate of 628,5713,143 shares of common stock in the offering. Each shareof the 3,143 shares of common stock sold by athe Selling StockholderShareholders on the primary offering, was solddelivered to the underwriters with one200 additional Class A warrantwarrants to purchase one share of common stock.stock (sold by us), on a firm commitment basis. In addition, the underwriter for the offering fully-exercised its option to purchase an additional 1,148,5775,743 common shares from the Selling StockholdersShareholders and 1,281,4236,407 common shares, along with 2,430,000 Class A warrants from us. Asus to purchase 12,150 shares of April 5, 2022, all prefunded warrants have been exercised and 14,474,000common stock. Each of the 5,743 shares of common stock sold by the Selling Shareholders upon exercise of the underwriters’ over-allotment option, was sold with 200 Class A warrants (sold by us) to purchase one share of our common stock, on a firm commitment basis. All pre-funded warrants related to this offering were exercised during 2022, whereas, as of April 10, 2024, Class A warrants to purchase 72,370 common shares remained available for exercise at an exercise price of $0.77$154.00 per share for up to an aggregate of the same number of shares of common stock.share. The gross proceeds of the offering to us, before underwriting discounts and commissions and estimated offering expenses, were approximately $16.19 million (including the exercise of the overallotment option, the exercise of all prefunded warrants and the4,156,000 Class A warrants exercised to date)purchase 20,780 shares of common stock, and the exercise of all pre-funded warrants). We did not receive any of the proceeds from the sale of common shares by the Selling Stockholders.Shareholders and we only received the proceeds for the Class A warrants sold together with the Selling Shareholders’ shares of common stock. We refer to this offering as ourthe “January 2022 Underwritten Offering.”8, 2022,7, 2023, and February 21, 2024, our Board of Directors approved the award of 3,332 shares and 3,332 shares, respectively, of Series C Preferred Stock to our directors, pursuant to our 2021 Equity Incentive Plan, as amended and restated (the “2021 Equity Incentive Plan”), as an annual incentive bonus. The fair value of each of the preferred stock awards under the 2021 Equity Incentive Plan, was determined based on an independent third-party valuation.Pursuant to the Nasdaq Listing Rules, the applicable grace period to regain compliance is 180 days, or until September 5, 2022. We intend to monitor the closing bid price of our common shares between now and September 5, 2022 and are considering our options in order to regain compliance with the Nasdaq Capital Market minimum bid price requirement. We can cure this deficiency if the closing bid priceOn June 8, 2023, we effected a 1-for-20 reverse split of our common stock isand, at the opening of trading of the same day, our common stock began trading on a split-adjusted basis on the Nasdaq Capital Market. The reverse stock split was approved by our shareholders at our 2023 Annual Meeting of Shareholders held on May 3, 2023. The one-for-twenty ratio was approved by our Board on May 24, 2023. Our Board has the authority to effect one or more additional reverse stock splits on our issued shares of common stock, pursuant to the shareholder approval granted on May 3, 2023, in the aggregate ratio of not more than 1-for-250, with the exact ratio to be determined by the Board in its discretion. As of June 22, 2023, our common stock remained at $1.00 per share or higher for at least ten consecutive business days duringdays. As such, on June 23, 2023, we received a letter from the grace period.18, 2022, 20, 2023, we issued 1,200 shares of our newly-designated Series E Preferred Stock (the “Series E Preferred Stock”), par value $0.01 per share, to an affiliated company of our Chairperson, Mrs. Semiramis Paliou, for a purchase price of $35,000. This transaction was evaluated by a financial advisor engaged to evaluate the transaction and deliver an opinion as to the financial fairness and the fair value of such consideration. The Series E Preferred Stock has no dividend or liquidation rights. The Series E Preferred Stock votes with the shares of common stock of the Company, and each share of the Series E Preferred Stock entitles the holder thereof to up to 25,000 votes, on all matters submitted to a vote of the stockholders of the Company, subject up to 15% of the total number of votes entitled to be cast on matters put to shareholders of the Company. The Series E Preferred Stock is convertible, at the election of the holder, in whole or in part, into shares of our common stock at a conversion price equal to the 10-trading day trailing VWAP of our common stock, subject to certain adjustments, commencing at any time after (i) the cancellation of all of our Series B Preferred Stock or (ii) the transfer for all of our Series B Preferred Stock (collectively, a “Series B Event”). The 15% limitation discussed above, shall terminate upon the occurrence of a Series B Event. The Series E Preferred Stock is transferable only to the holder’s immediate family members and to affiliated persons or entities, with the prior consent of the Company. The issuance of shares of Series E Preferred Stock was approved by an independent committee of our Board of Directors declaredDirectors.$0.05 percommon stock to each of its common shareholders, provided that each Diana Shipping common shareholder was given the opportunity in their sole discretion to opt out, in whole but not in part, of the conversion of the shares of Series D Preferred Stock into shares of our common stock and instead receive shares of Series D Preferred Stock.forcalculations and the payment of cash in lieu thereof were determined at the shareholder nominee level.ended December 31, 2021.of 2025 and the first quarter of 2026. In connection with this transaction, we committed an aggregate amount of $4.13 million, due in three equal installments of $1.38 million each. The cash dividendfirst installment was paid in September 2023, and the two remaining installments are expected to be due in late 2024 and mid-2025, respectively.payableheld in virtual format at 8:00 a.m. Eastern Standard Time on or about April 11, 2022 to all commonMay 17, 2024. All shareholders of record as of April 1, 2022.March 28, 2024, may attend and vote by following the instructions included in the Notice of Annual Meeting of Shareholders and accompanying proxy statement which is available on the SEC website and Company website.28B. Business overview Amendment to the 2021 Equity Incentive PlanOn March 24, 2022, we amended and restated our 2021 Equity Incentive Plan to, among other things, permit grants of Series C Preferred Shares thereunder, in an aggregate amount of up to 10,000 shares. No grants have been approved up to the date of this annual report.B.Business overviewwholly-ownedwholly owned subsidiary.threefive dry bulk carriers, of which twothree are Panamaxes and one is atwo are Capesize vessel,vessels, having a combined carrying capacity of 319,131572,599 dwt and a weighted average age of 1719.0 years. Our vessels transport major bulks such as iron ore, coal and grains, and minor bulks such as bauxite, phosphate and fertilizers.6, 2022:
(USD Per Day)
to
Charterers***
Owners****
-HK Co., Limited
May-22
B.V., Rottedrdam
Limited
Pte Ltd.
International Shipping
Limited
Bulk Pte. Ltd.
Ltd.
22
2229
OceanPal Inc.’s fleet is employed as follows:Ltd., Bermuda2005 / 171,810 dwt Sister Ships* Com** Charterers Notes 3 Panamax Bulk Carriers PROTEFS A LOUIS DREYFUS COMPANY FREIGHT ASIA PTE LTD 12-Sept-23 09-Apr-24 1,2 $ 13,000 5.00 % CHINA RESOURCE CHARTERING LIMITED 14-Apr-24 13-Jul-24 3,4 CALIPSO A OLDENDORFF CARRIERS DENMARK APS 28-Sep-23 05-Nov-23 05-Nov-23 24-Feb-24 HMM CO., LTD. 24-Feb-24 28-Mar-24 COFCO INTERNATIONAL FREIGHT SA 06-Apr-24 05-Jul-24 MELIA ASL BULK SHIPPING LIMITED 26-Aug-23 09-Nov-23 FORTUNE OCEAN MARINE PTE. LTD. 09-Nov-23 12-Dec-23 LOUIS DREYFUS COMPANY FREIGHT ASIA PTE LTD 12-Dec-23 06-Feb-24 ASL BULK SHIPPING LIMITED 06-Feb-24 25-Apr-24 5,6 2 Capesize Bulk Carriers FIVE OCEAN CORPORATION 26-Sep-23 06-Feb-24 DEYESION SHIPPING & TRADING COMPANY LIMITED 06-Feb-24 05-May-24 - 05-Jul-24 5 BALTIMORE 27-Sep-23 $ % RICHLAND BULK PTE. LTD. 18-Nov-23 20-Apr-24-15-May-24 7 "sister ship"“sister ship”, or closely similar to other dry bulk carriers that have the same letter.The vessels were contributedIn case of newly acquired vessel with new time charter attached, this date refers to the Company followingexpected/actual date of delivery of the Spin-Off, which was effectedvessel 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. November 29, 2021.a daily basis of the vessel’s present charter party rate, whichever is higher, for the excess period commencing from March 25, 2024, until the actual redelivery date.****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.2. Currently without an active charterparty. 1 Based on latest information3. Estimated delivery date to the Charterers. 4. 5. Redelivery date on an estimated time charter trip duration of about 79 days. 6. 7. Shipbroking Enterprises Inc., or Steamship, an affiliated company of us and Diana Shipping. Brokerage services relate to the purchase, sale or chartering of our vessels, brokerage services relating to the repairs and other maintenance of our vessels, and any relevant consulting services. Administrative management services may include budgeting, reporting, monitoring of bank accounts, compliance with banks, payroll services, legal and securities compliance services, and any other possible administrative management services that we require to perform our business activities. Steamship also provides brokerage services to us pursuant to a brokerage services agreement. Please see “Item 7. Major Shareholders and Related Party Transactions—B.Transactions-B. Related Party Transactions.”During 2019, 2020 and forFor the period from January 1, 2021, to November 29, 2021, four, four and three of the charterers of the OceanPal Inc. Predecessors accounted for 97%, 98% and 95%, respectively, of the Predecessors’ revenues. During 2021 for(for the period from commencement of our vessels’ operations (November 30, 2021)), 2022 and 2023, three, four, and three of our charterers accounted for 93%, 57%, and 51%, respectively, of our revenues.medium-term time charters.medium duration. 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'svessel’s operating expenses, including the cost of crewing, insuring, repairing and maintaining the vessel. Our time charters are for fixed terms and will expire in accordance with the scheduled set forth in the table above, and charter-hire is generally paid monthlytwice a month in arrears. In 2020 and forFor the period from January 1, 2021 to November 29, 2021, the OceanPal Inc. Predecessors 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. During 2021 for(for the period from commencement of our operations upon closing of the Spin-Off (November 30, 2021)), 2022 and 2023, we paid brokerage commissions of 5.0% of the total daily charter hire rate of each charter to unaffiliated ship brokers and to in-house brokers associated withour managers (which excludes address commissions of 3.75 % paid directly to the charterer.charterer). Our time charters are subject to earlier termination in the event one of our vessels is a total or constructive loss as the result of casualty or is off-hireoff hire for more than a specified period.on thein time charter trips with short to medium duration, by either entering into short-term to medium-term trip time charters or spot market, whereby each vessel is employed on successive charters have a duration of a single voyage,voyages, with the exact term depending on the vessel route, although we may employ our vessels on long-term time charters depending on market conditions. Under a spotvoyage charter, we are responsible for both the vessel operating expenses and the voyage expenses incurred in performing the charter.charter, while under a time charter, we are responsible for vessel operating expenses while the charterer is responsible for voyage expenses. We strategically monitor developments in the dry bulk30medium-term time charters,medium duration, which provides us with flexibility in responding to market developments, but in the future we may employ vessels in the spot market or on longer-term time charters. We continuously evaluate the duration of our 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.●(i)●(ii)●(iii)●(iv)●(v)●(vi)2021 and2023, 27 years in 2020.2022 and 28 years in 2021.31declinedranged in 2023 from a low of 530 on February 16, 2023 to a high of 11,793 in May 2008 to a low3,346 on December 4, 2023. During the first months of 663 in December 2008. In 2020, the2024, BDI ranged from a low of 393 in May1,308 on January 17, 2024 to a high of 2,097 in October, increased to a high of 5,6502,419 on October 7, 2021March 18, 2024, and dropped to 2,217closed at 1,587 on December 24, 2021. The BDI further dropped to 1,296 on January 26, 2022 and as of April 1, 2022 was 2,357.20212023 generally were higherlower as compared to 2020.2022. Consistent with these trends were the market values of our dry bulk carriers. Since the beginning of 2021,Although charter rates and vessel values have improved, butstarted to improve in late 2023 and remain generally strong during the first months of 2024, 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.andas well as with owners of Capesizelarger VLOCs and Newcastlemax dry bulk carriers. Ownership of dry bulk carriers is highly fragmented.32drybulk,dry bulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage and spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997; new emissions standards, titled IMO-2020, took effect on January 1, 2020.332020.2020, with the exception of vessels fitted with exhaust gas cleaning equipment (“scrubbers”) which can carry fuel of higher sulfur content. These regulations subject ocean-going vessels to stringent emissions controls and may cause us to incur substantial costs.The group plans to submitOn December 15, 2022, MEPC 79 adopted the designation of a formal proposal tonew ECA in the IMO byMediterranean, with an effective date of May 1, 2025. In July 2023, MEPC 80 announced three new ECA proposals, including the end of 2022 withCanadian Arctic waters and the goal of having the ECA implemented by 2025.North-East Atlantic Ocean. If other ECAs are approved by the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency (“EPA”) or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.Additionally, MEPC 75 adopted amendments to MARPOL Annex VI which brings forward the effective date of the EEDI’s “phase 3” requirements from January 1, 2025 to April 1, 2022 for several ship types, including gas carriers, general cargo ships, and LNG carriers.34held on June 2021 and are expected to enterentered into force on November 1, 2022, with the requirements for EEXI and CII certification coming into effect from January 1, 2023.We haveDWM has obtained applicable documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The documents of compliance and safety management certificate are renewed as required.The upcomingAdditional amendments, which will comecame into force on June 1, 2022, include (1) addition of a definition of dosage rate, (2) additions to the list of high consequence dangerous goods, (3) new provisions for medical/clinical waste, (4) addition of various ISO standards for gas cylinders, (5) a new handling code, and (6) changes to stowage and segregation provisions.35For example,By IMO resolution, administrations are encouraged to ensure that cyber-risk management systems must beare incorporated by ship-owners and managers by their first annual Document of Compliance audit after January 1, 2021. In February 2021, the U.S. Coast Guard published guidance on addressing cyber risks in a vessel’s safety management system. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of suchfuture regulations is hard to predict at this time.managementtreatment systems on such vessels at the first International Oil Pollution Prevention (“IOPP”) renewal survey following entry into force of the convention. The MEPC adopted updated guidelines for approval of ballast water managementtreatment systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates was also discussed and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes were adopted at MEPC 72. Ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters. The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ballast water managementtreatment systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved in accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72’s amendments to the BWM Convention took effect, making the Code for Approval of Ballast Water ManagementTreatment Systems, which governs assessment of ballast water managementtreatment systems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard. Under these amendments, all ships must meet the D-2 standard by September 8, 2024. Costs of compliance with these regulations may be substantial. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM Convention which would require a commissioning test of the ballast water managementtreatment system for the initial survey or when performing an additional survey for retrofits. This analysis will not apply to ships that already have an installed BWM system certified under the BWM Convention. These amendments have entered into force on June 1, 2022. In December 2022, MEPC 79 agreed that it should be permitted to use ballast tanks for temporary storage of treated sewage and grey water. MEPC 79 also established that ships are expected to return to D-2 compliance after experiencing challenging uptake water and bypassing a BWM system should only be used as a last resort. In July 2023, MEPC 80 approved a plan for a comprehensive review of the BWM Convention over the next three years and the corresponding development of a package of amendments to the Convention. MEPC 80 also adopted further amendments relating to Appendix II of the BWM Convention concerning the form of the Ballast Water Record Book, which are expected to enter into force on June 1, 2022.in February 2025. A protocol for ballast water compliance monitoring devices and unified interpretation of the form of the BWM Convention certificate were also adopted.36, with anti-fouling systems which do not contain cybutryne) must receive an updated IAFS Certificate at the next anti-foulingAnti-fouling application to the vessel. These amendments were formally adopted at MEPC 76 in June 2021.37(i)injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;(ii)injury to, or economic losses resulting from, the destruction of real and personal property;(iii)loss of subsistence use of natural resources that are injured, destroyed or lost;(iv)net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;(v)lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and(vi)net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.38The effects of these proposals and changes are currently unknown, and recently, currentIn January 2021, U.S. President Biden signed an executive order temporarily blocking new leases for oil and gas drilling in federal waters. However, attorney generals from 13 states filed suit in March 2021 to lift the executive order, and in June 2021, a federal judge in Louisiana granted a preliminary injunction against the Biden administration, stating that the power to pause offshore oil and gas leases “lies solely with Congress.” In August 2022, a federal judge in Louisiana sided with Texas Attorney General Ken Paxton, along with the other 12 plaintiff states, by issuing a permanent injunction against the Biden Administration’s moratorium on oil and gas leasing on federal public lands and offshore waters. After being blocked by the courts, in September 2023, the Biden administration announced a scaled back offshore oil drilling plan, including just three oil lease sales in the Gulf of Mexico. With these rapid changes, compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could impact the cost of our operations and adversely affect our business.duly-issuedduly issued permit or exemption and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expanding federal authority under the CWA. Following litigation on the revised WOTUS rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of WOTUS. In 2019 and 2020, the agencies repealed the prior WOTUS Rule and promulgated the Navigable Waters Protection Rule (“NWPR”) which significantly reduced the scope and oversight of EPA and the Department of the Army in traditionally nonnavigablenon navigable waterways. On August 30, 2021, a federal district court in Arizona vacated the NWPR and directed the agencies to replace the rule with the pre-2015 definition. In January 2023, the revised WOTUS rule was codified in place of the vacated NWPR. On May 25, 2023, the United States Supreme Court ruled in the case Sackett v. EPA that only wetlands and permanent bodies of water with a “continuous surface connection” to “traditional interstate navigable waters” are covered by the CWA, further narrowing the application of the WOTUS rule. On December 7, 2021,In August 2023, the EPA and the Department of Army issued the Army proposed afinal WOTUS rule, effective on September 8, 2023, that would reinstatelargely reinstated the pre-2015 definition. On February 24, 2022,definition and applied the EPA announced ten roundtables to facilitate discussion on the implementationSackett ruling.39 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses.market.market, the EU Emissions Trading System (“EU ETS”) as part of its “Fit-for-55” legislation to reduce net greenhouse gas emissions by at least 55% by 2030. On July 14, 2021, the European Parliament formally proposed its plan, which would involve gradually including the maritime sector from 2023 and phasing the sector in over a three-year period. This will require shipowners to buy permits to cover these emissions. ContingentThe Environment Council adopted a general approach on negotiationsthe proposal in June 2022. On December 18, 2022, the Environmental Council and European Parliament agreed to include maritime shipping emissions within the scope of the EU ETS on a formal approval vote, these proposedgradual introduction of obligations for shipping companies to surrender allowances equivalent to a portion of their carbon emissions: 40% for verified emissions from 2024, 70% for 2025 and 100% for 2026. Most large vessels will be included in the scope of the EU ETS from the start. Big offshore vessels of 5,000 gross tonnage and above will be included in the ‘MRV’ on the monitoring, reporting and verification of CO2 emissions from maritime transport regulation from 2025 and in the EU ETS from 2027. In January 2024, the EU ETS was extended to cover CO2 emissions from all large ships (of 5,000 gross tonnage and above) entering EU ports regardless of the flag they fly and will apply to methane and nitrous oxide emissions beginning in 2026. Shipping companies will need to buy allowances that correspond to the emissions covered by the system. General cargo vessels and off-shore vessels between 400-5,000 gross tonnage will be included in the MRV regulation from 2025 and their inclusion in EU ETS will be reviewed in 2026. Furthermore, starting from January 1, 2026, the ETS regulations may not enterwill expand to include emissions of two additional greenhouse gases: nitrous oxide and methane. Compliance with the Maritime EU ETS will result in additional compliance and administration costs to properly incorporate the provisions of the Directive into force for another year or two.”ILO”“ILO”) is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 (“MLC 2006”). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged in international voyages or flying the flag of a Member and operating from a port, or between ports, in another country. We believe that all our vessels are in substantial compliance with and are certified to meet MLC 2006.40previously discussed,part of this initiative, regulations relating to the inclusion of greenhouse gas emissions from the maritime sector in the European Union’s carbon market are also forthcoming.In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, the former U.S. President Trump signed an executive order to review and possibly eliminate the EPA’s plan to cut greenhouse gas emissions, and in August 2019, the Administration announced plans to weaken regulations for methane emissions, and on August 13, 2020, the EPA released rules rolling back standards to control methane and volatile organic compound emissions from new oil and gas facilities. However, U.S. President Biden recently directed the EPA to publish a proposed rule suspending, revising, or rescinding certain of these rules. The EPA or individual U.S. states could enact environmental regulations that would affect our operations.4142vessel.“clubs.“Clubs.”1312 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website states that the Pool provides a mechanism for sharing all claims in excess of US$10 million up to, currently, approximately US$8.22.1 billion. As a member of a P&I Association, which is a member of the International Group, we are subject to callsEstimated Total Calls payable to the associationsAssociations based on our claim records as well as the claim records of all other members of the individual associations and members of the shipping pool of P&I Associations comprising the International Group. Our vessels may be subject to supplementalSupplementary calls which are based on estimatescalculated as a percentage of premium incomethe net Estimated Total Calls for each year and anticipatedafter deducting any applicable rebates, laid up returns and paid claims. Such estimates are adjusted each yearother deductions. A decision to levy Supplementary calls is made by the Board of Directors of the P&I Association until the closing of the relevant policy year, which generally occurs within three years fromat any time during or after the end of the policy year. Supplementalrelevant Policy Year. There is no limit to the number or amount of Supplementary Calls that can be levied in respect of a Policy Year. Supplementary calls, if any, are expensedissued when they are announced and according to the period they relate to.C.Organizational structureC. Organizational structure theour subsidiaries. A list of our subsidiaries listed in our consolidated financial statements for the period from inception (April 15, 2021) through December 31, 2021 under “Item 18. Financial Statements.”D.Property, plants and equipmentD. Property, plants and equipment 5.5 —A. Operating Results – Year ended December 31, 2022 compared to Period from January 1, 2021 through November 29, 2021 (2021 Predecessor Period) and Financial Review and Prospectsi) our consolidated financial statements forand the period from date of inception (April 15, 2021) through December 31, 2021 and their notes and ii) the OceanPal Predecessors’ audited combined carve-outto these financial statements as of December 31, 2020, and for the period from January 1, 202143through November 29, 2021 and for the period ended December 31, 2020 and 2019, included elsewhere in this annual report. “Item 18. Financial Statements.” This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled “Risk Factors” and elsewhere in this annual report.●a)●b)●c)●d)●e)●f)●g)●h)●i)straight linestraight-line basis, equal to the average revenue during the term of the charter.44●a)●b)●a)●b)●c)●d)●e)●f)●g)●h)●i)●j)and audit for each vessel within the six months ofafter taking over a vessel;●k)●l)●m)●management of our financial resources, including banking relationships, i.e., administration of bank loans that we may enter into in the future and bank accounts;●management of our accounting system and records and financial reporting;●administration of the legal and regulatory requirements affecting our business and assets; and●management of the relationships with our service providers and customers.●a)charter rates and periods of charter hire;periods;45b) levels of vessel operating expenses; c) capital expenditures, dry-docking and special survey costs; d) financing costs, if any; e) f) inflation; and g) fluctuations in foreign exchange rates. A. ●levels of vessel operating expenses;Operating results●depreciation expenses;●financing costs; and●fluctuations in foreign exchange rates.A.Operating resultsshort-time charter trips with short to medium-term time charters,medium duration, although we may also charter our vessels in the spot market and on longer-term time charters.prices.prices as we may incur gain/loss on bunkers when the cost of the bunker fuel sold to the new charterer is greater or less than the cost of the bunker fuel acquired. Our revenues are driven primarily by the number of vessels in our fleet, the number of days during which our vessels operate and the amount of daily charter hire rates that our vessels earn under charters, which, in turn, are affected by a number of factors, including:●the duration of our charters;●our decisions relating to vessel acquisitions and disposals;●the amount of time that we spend positioning our vessels;●the amount of time that our vessels spend in drydock undergoing repairs;●maintenance and upgrade work;●the age, condition and specifications of our vessels;●levels of supply and demand in the dry bulk shipping industry; and●other factors affecting spot market charter rates for dry bulk carriers. For 2022, we expect our revenues to increase compared to the period from commencement of operations (November 30, 2021) to December 31, 2021 due to increase in vessel operating days, and possible fleet expansion.46mainly includeprimarily consist of commissions becauseand any gains or losses related to bunker prices as all of our vessels are typically employed under time charters that require the charterer to bear voyage expenses such as bunkers (fuel oil), port and canal charges. Although the charterer bears the cost of bunkers, our voyage resultsexpenses may be affected by differences in bunker prices, and we may record a gain or a loss deriving from such price differences.differences as well as bunker consumption costs during periods when our vessels are repositioning, off-hire or idle. When a vessel is delivered to a charterer, bunkers are purchased by the charterer and sold back to us on the redelivery of the vessel. BunkerBunkers’ gain, or loss, resultresults when a vessel is redelivered by her charterer and delivered to the next charterer at different bunker prices, or quantities. We also pay commissions on each charter to one or more unaffiliated ship brokers to in-house brokers associated with the charterer for the arrangement of the relevant charter. We currently pay commissions of 5.00% of the total daily charter hire rate of each charter to unaffiliated ship brokers, in-house brokers associated with the charterers, depending on the number of brokers involved with arranging the charter.our charters. In addition, we pay commissions to DWM and Steamship for the provision of management and brokerage services. For 2022,services, pursuant to the terms of our management agreements (see also “Item 7. we expect our voyage expenses to follow the same trend as our revenues, Major Shareholders and Related Party Transactions – B. Related Party Transactions”.depending also on the gain or loss from bunkers.For 2022, we expectExpenses for repairs and maintenance tend to fluctuate from period to period because most repair and maintenance works typically occur during periodic dry-dockings or special surveys. Our ability to control our vessels’ operating expenses to increase compared to the period from commencement of operations (November 30, 2021) to December 31, 2021 due to increase in vessel ownership days and if we further expandalso affects our fleet.scrapped.scrapped, which we believe is common in the dry bulk shipping industry. In 2023, we identified that the estimated scrap rate used for the determination of annual depreciation was not in line with the current average historical rate and as such, the estimated scrap rate was revised from $250 per lightweight ton to $400 per lightweight ton. For 2022, we expect2023, this increase in salvage values has reduced depreciation and net loss by approximately $0.92 million. A decrease in the useful life of a vessel or in its salvage value would have the effect of increasing the annual depreciation expensecharge. When regulations place limitations on the ability of a vessel to increase compared totrade on a worldwide basis, the period from commencement of operations (November 30, 2021) to December 31, 2021.With regard to OceanPal Inc. Predecessors’ general and administrative expenses consist of allocations made to OceanPal Inc. Predecessors by Diana Shipping for certain corporate functions and shared services. Amounts recognized by OceanPal Inc. Predecessors are not necessarily representative of the amounts that would have been reflected in the financial statements had the Company operated independently of Diana Shipping.may include compensation ofand fees towards our executive officers, directors and consultants, compensation cost of restricted stock awarded to senior managementawards amortization cost, lumpsum brokerage fees, traveling, directors’ and non-executive directors, traveling,officers’ insurance, promotional and other expenses of a listed public company, such as legal and professional expenses and other general corporate expenses. These expenses are relatively fixed and are not widely affected by the size of theour fleet. For 2022, we expect our general and administrative expenses to increase.47(in millions of U.S. dollars) except for share and per share data Results of Operations Time charter revenues Voyage Expenses Vessel Operating Expenses Depreciation and amortization of deferred charges General and Administrative expenses Management fees to related parties Change in fair value of warrants’ liability - Finance costs - Interest income - Net loss and comprehensive loss Net loss and comprehensive loss attributable to common stockholders Loss per share, basic Loss per share, diluted Weighted average number of common shares, basic Weighted average number of common shares, diluted Results of Operations of OceanPal Inc.For the period fromApril 15, 2021 (inception date) toDecember 31, 2021Results of Operationsin millions of U.S. dollarsTime charter revenues1.33Voyage Expenses0.05Vessel Operating Expenses0.36Depreciation0.35General and Administrative expenses0.36Management fees to related parties0.07Net income0.13Net income attributable to common stockholders0.0748Results of Operations of OceanPal Inc. PredecessorsPeriod from January 1, 2021 through November 29, 2021 (2021 Predecessor Period) and Period from November 30, 2021 through December 31, 2021 (2021 Company Period) compared to year ended December 31, 2020 (2020 Predecessor Year)Time Charter Revenues. Time charter revenues increased by $3.26 million during 2021 Predecessor Period and 2021 Company Period compared to 2020 Predecessor Year, mainly due to increase in average time charter rates.Voyage Expenses. Voyage expenses decreased by $0.51 million, during 2021 Predecessor Period and 2021 Company Period compared to 2020 Predecessor Year, mainly due to gain from bunkers, offset by increase in brokerage commissions as a result of time charter revenues increase, for 2021 Predecessor Period.Vessel Operating Expenses. Vessel operating expenses decreased by $1.94 million during 2021 Predecessor Period and 2021 Company Period compared to 2020 Predecessor Year, mainly due to increased expenses for repairs and maintenance and due to an incident of one of the vessels in 2020.Depreciation and amortization of deferred charges. Depreciation increased by $0.39 million during the 2021 Predecessor Period and 2021 Company Period compared to 2020 Predecessor Year, mainly due to increased amortization of deferred cost relating to dry-dockings of the vessels.General and Administrative Expenses. General and administrative expenses increased by $0.19 million during 2021 Predecessor Period and 2021 Company Period compared to 2020 Predecessor Year, mainly due to increased costs for the Spin-Off transaction.Management Fees To Related Parties. Management fees to related parties decreased by $0.01 million during 2021 Predecessor Period and 2021 Company Period compared to 2020 Predecessor Year, mainly due to decrease in ownership days.20202023, compared to the year ended December 31, 2019charter revenues.Charter Revenues. Time charter revenues decreased by $3.0$0.13 million, or 24%, to $9.4$18.96 million in 2020, compared to $12.42023, from $19.09 million in 2019. The decrease was mainly due to decreased revenues resulting from2022, primarily as a result of the decrease in our average time charter rates andduring 2023, which was partially offset by the increase in off hire days. In 2020, we had totalour operating days to 1,691 in 2023 from 1,117 in 2022, due to the increased size of 971 and fleet utilization of 94.8%, compared to 1,013 total operating days and a fleet utilization of 92.5% in 2019. Additionally, there was a 17% decrease in time charter rates from $9,883 in 2019 to $8,235 in 2020.our fleet.49expenses.Expenses. Voyage expenses amounteddecreased by $1.74 million, to $1.0$1.94 million in 2020 compared to $1.52023, from $3.68 million in 2019. Commissions, which is the main part of voyage expenses decreased in 2020 to $0.6 million compared to $0.7 million in 20192022, mainly due to the decrease in revenues. Voyage expenses decreased even furtherbunker losses primarily arising from the price differences in 2020 comparedthe cost of bunker fuel paid by the Company to 2019, because in 2019 Calipso had an additional loss from bunkers amountingthe previous charterers on vessel re-delivery and the bunker fuel sold to $0.6 million resulting from a claim.operating expenses.Operating Expenses. Vessel operating expenses increased by $2.9$3.54 million, or 52%, to $8.5$10.42 million in 2020 compared to $5.62023, from $6.88 million in 2019. The increase in operating expenses is 2022, mainly due to increases in all operating expenses, but mainly duethe increased ownership days related to expenses relating to an incidentthe increased size of oneour fleet, as well as the increased repair, spares and stores costs for certain of the vessels and vessel annual taxes. Daily operating expenses were $7,739 in 2020 compared to $5,098 in 2019, representing a 52% increase.decreasedincreased by $0.3$2.77 million, or 12%, to $2.2$7.67 million in 2020, compared to $2.52023, from $4.90 million in 2019. This decrease was2022, due to i) a $2.7 million increase in depreciation expense following the impairment lossincrease in the size of the Calipsoour fleet, and ii) an increase in 2019, as the vessel’s value decreased to its fair value (sale price) less cost to selldry-dock amortization costs, as a result of being heldthe dry-docks incurred during 2023 for sale. Additionally, the amortization of deferred cost relating to dry-dockings decreasedtwo vessels in 2020 to $0.1 millionour fleet, compared to $0.2 millionone vessel having undergone dry-dock during 2022. The increase in 2019.expenses. General and Administrative Expensesexpenses increased by $0.5$2.20 million, or 63%, to $1.3$5.28 million in 2020 compared to $0.82023, from $3.08 million in 2019 and represent the allocation of the2022. This increase is mainly attributed to additional expenses incurred by Diana Shipping based on the numberCompany related to brokerage services’ fees as per the amended agreement terms, compensation cost of ownership daysrestricted convertible Series C preferred stock awarded in April 2022 and March 2023 under the 2021 Equity Incentive Plan, increased insurance costs, performance bonuses to a related party, as well as other professional charges essential for the conduct of the fleet vessels.party.parties. Management fees to a related party amountedparties increased by $0.36 million, to $0.8$1.24 million in 2020 compared to $0.72023, from $0.88 million in 2019. The increase is attributable the change of the manager from DWM to DSS in October 2019 and the increased fees under the new management agreements.Vessel Impairment charges and Vessel fair value adjustment. In 2019, an impairment loss amounting to $3.0 million2022. This variation was recordedmainly due to the agreementincrease in the size of our fleet. Management fees charged for each year were in accordance with the terms of the management agreements then in place.sell$nil for 2022. The gain of $6.22 million during 2023 resulted from the Calipso whichfair value changes of the private placement warrants under the Concurrent Private Placement from their initial measurement date to their various settlement dates within 2023 (all private placement warrants were settled during 2023). There was no such transaction during 2022.December 31, 2019such date.recorded as held$0.50 million for sale and its value decreased to its fair value (sale price) less cost to sell. In March 2020, following the failure to complete the sale of the vessel, the vessel’s withdrawal from the market was decided and the vessel was recorded as held for use at its fair value at that date which resulted to a gain of $0.2 million.Other loss/(income): Other loss of $0.04 million in 20192023, compared to other income of $0.24 million in 2020 related$nil for 2022. The amount relates solely to resulting gains or lossesinterest earned from conversion of transactions in currencies other than U.S. dollars.Pro Forma Financial InformationUnaudited pro forma financial information of the Company that summarizes the consolidated results of operations of the Company as though the Spin-Off from Diana Shipping originally consummated on November 29, 2021 had been consummated on January 1, 2021, is included as Exhibit 99.1. The unaudited pro forma financial information is for informational purposes onlytime deposits.does not necessarily represent results that would have occurred if the transaction had taken place on the basis assumed.Inflationdoesand increased interest rates do not have a material effect on our expenses given current economic conditions.conditions and management does not consider inflation or interest rates to be a significant risk to direct costs in the current and foreseeable economic environment. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, administrativea shipping downturn, costs subject to inflation and financing costs.We had less than $1.07 billion in revenue during our last fiscal year, which means thatAct. An emerging growth companyAct, we may take advantage or specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:●50●exemption from new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies; and●exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and financial statements.if, among other things, we have more than $1.07 billionuntil the earliest of: (i) the last day of the first fiscal year in “totalwhich our annual gross revenues”revenue exceeds $1.235 billion; (ii) the last day of the fiscal year during which the fifth anniversary of the date of the IPO occurs; (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that are held by nonaffiliates exceeds $700 million as of the last business day of our most recently completed second fiscal year. We may choose to take advantagequarter; or (iv) the date on which we have issued more than $1 billion in non-convertible debt securities during any three-year period. In addition, Section 107 of some, but not all, of these reduced burdens. For as long as wethe JOBS Act provides that an emerging growth company can take advantage of the reduced reporting obligations,extended transition period for complying with new or revised accounting standards. In other words, an emerging growth company can delay the information that we provide shareholders may be different from information provided by other publicadoption of certain accounting standards until those standards would otherwise apply to private companies. We are choosinghave elected to “opt out” of the extended transition period relating to the exemption from new or revised financial accounting standards and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth public companies. Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.B. B. Liquidity and Capital Resources Capital Resources2021, we did not have any2023, our contractual obligations other than those related to (i) our Series C and Series D preferred shares dividends and, (ii) the aggregate contractual obligations of $2.75 million in connection with our investment in the construction of two chemical tankers (see also “Item 4. Information on the Company—A. History and Development of the Company—Investment in Methanol-Ready Chemical Tanker Newbuildings”), of which $1.375 million are expected to be due in the fourth quarter of 2024 and $1.375 million are expected to be due in the second quarter of 2025. Since January 1, 2024 and up to the date of this annual report, we paid a cash dividend on our Series C and D preferred holders as of record date January 12, 2024, amounting to $0.35 million in the aggregate, which amount was funded through available cash. We intend to fund our contractual obligations as of December 31, 2023, with available cash as well. or debt, but we incur capital expenditures when our vessels undergo surveys andsurveys. This process of recertification may require us to reposition these vessels from a discharging port to the shipyard, which will reduce our operating days during the period. We also incur capital expenditures for vessel improvements to meet new regulations and comply with international and regulatory standards. 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.dividends. stock, as well as the chemical tankers’ investment. We intend to finance our future growth with futurethrough a combination of cash generated from operations, proceeds from equity offerings, borrowings from debt and equity offeringstransactions, as deemed appropriate by our management and board of directors.2021,2023 and 2022, working capital, which is current assets minus current liabilities, amounted to $2.27 million. For 2022, we believe$17.76 million and $11.71 million, respectively.anticipated revenuesit has access to sufficient funds to meet its forecast cash requirements. We anticipate that our primary sources of funds for at least twelve months from the date of this report will result inbe available cash, internally generated cash flows which together with proceeds from our anticipated revenues and equity offering proceeds. We believe that these anticipated sources of funds, as well as our ability to access the January 2022 Offeringequity capital markets if needed, will be sufficient to fundmeet our capital requirementsliquidity needs for at least twelve months from the next 12 months and for the foreseeable future thereafter.Flow OceanPal Inc.atof December 31, 20212023, and 2022 was $1.67 million.$14.84 and $8.45 million, respectively. We consider highly liquid investments such as time deposits and certificates of deposit with an original maturity of around three months or less to be cash equivalents. Cash and cash equivalents are held in U.S. dollars.the period from inception date (April 15,2021) to December 31, 20212023, amounted to $0.7$0.82 million representing a decrease of $0.69 million compared to $1.51 million in 2022. The decrease in net cash provided by operating activities was attributable to the decrease in 2023 in net income after non-cash items by $2.87 million compared to 2022, which was offset by the decrease in 2023 by $2.18 million in working capital outflows mainly as a result of the decrease in outstanding trade receivables by $4.7 million.the period from inception date (April 15,2021)2023 amounted to December 31, 2021 was $0.04$6.01 million and represent amounts paid forrepresents payments of (i) $4.00 million being the cash consideration of the purchase price regarding the acquisition of the M/V Melia in February 2023, in accordance with the terms of the relevant Memorandum of Agreement, (ii) $1.64 million regarding the first instalment and other transactions costs in connection with the chemical tankers investment, and (iii) $0.37 million relating to vessel improvement costs. Net cash used in investing activities in 2022 amounted to $5.09 million and represents payments of (i) $4.4 million being the cash consideration of the purchase price regarding the acquisition of M/V Baltimore acquired in September 2022, in accordance with the terms of the relevant Memorandum of Agreement, (ii) $0.60 million relating to the installation of the ballast water treatment system on M/V Protefs, (iii) $0.07 million relating to improvement costs of M/V Salt Lake City.the period from inception2023 amounted to December 31, 2021 was $1.0$11.58 million and representscomprises from (i) net proceeds of $13.64 million from the contributionissuance of working capital by Diana Shippingunits (comprising of shares of common stock or prefunded warrants and Class B warrants), the issuance of private placement warrants, and the exercise of pre-funded warrants under the 2023 registered Direct Offering and Concurrent Private Placement, (ii) $0.03 million proceeds in connection with the issuance of the newly designated Series E Preferred Stock, less $2.09 million of dividends paid to us pursuant to the Spin-Off.Cash Flow OceanPal Inc. Predecessors51Cash and cash equivalents as at December 31, 2020 and 2019 was $0.04 million and $2 thousands, respectively. Cash and cash equivalents as at November 29, 2021 was $0.09 thousands. Highly liquid investments such as time deposits and certificates of deposit with an original maturity of around three months or less are considered to be cash equivalents. Cash and cash equivalents are held in U.S. dollars.Net Cash provided by /used in Operating ActivitiesNet cash from operating activities decreased by $4.2 million to $2.7 million net cash used in operating activities in 2020 compared to $1.4 million net cash provided by operating activities in 2019. This decrease was attributable to decreased revenues, increased dry-docking costs and increased operating expenses.Net cash provided by operating activities in the period from January 1, 2021 to November 29, 2021 amounted to $3.18 million.Net Cash used in Investing ActivitiesNet cash used in investing activities was $1.5 million for 2020 and relates to vessel improvements due to new regulations. There was no cash from investing activities in 2019.Net cash used in investing activities was $0.02 million for the period from January 1, 2021 to November 29, 2021 and also relates to vessel improvements due to new regulations.Net Cash provided by / used in Financing Activitieswas $4.2in 2022 amounted to $10.36 million for 2020 and relatedcomprise from proceeds of $16.19 million from the issuance of units (comprising of shares of common stock or pre-funded warrants and Class A warrants), common stock and warrants, and the exercise of warrants, under the 2022 Underwritten Public Offering less (i) $4.00 million of dividends paid to additional investment by the Parentcommon, Class A warrants, Series C and Net cash used in financing activities was $1.5Series D preferred holders and, (ii) $1.83 million for 2019 and related to distributions to Parent.Net cash used in financing activities was $3.2 million for the period from January 1, 2021 to November 29, 2021 and related to amounts distributed to the Parent.As part of Parent, OceanPal Inc. Predecessors were dependent upon Parent for all of their working capitalequity issuance and financing requirements, as Parent uses a centralized approach to cash management and financingcosts during the same period.C. Research and development, patents and licenses D. Trend information 2020,2023, the BDI ranged from a high of 3,346 on December 4, 2023, to a low of 530 on February 16, 2023. During the first months of 2024, BDI ranged from a low of 393 in May1,308 on January 17, 2024 to a high of 2,097 in October, increased to a high of 5,6502,419 on October 7, 2021March 18, 2024, and dropped to 2,217closed at 1,587 on December 24, 2021.April 10, 2024. The BDI further dropped to 1,296 on January 26, 2022 and as of April 1, 2022 was 2,357..The decline and volatility in charter rates in the dry bulk market reflects in part the fact that the supply of dry bulk vessels in the market has been increasing, and the number of newbuilding dry bulk vessels on order is high.order. Demand for dry bulk vessel services is influenced by global financial conditions. Global financial markets and economic conditions have been, and continue to be, volatile. BeginningOur revenues and results of operations in February 2020, due in part2024 will be subject to fears associated withdemand for our services, the spreadlevel of COVID-19, global financial markets,inflation, market disruptions and starting in late February, financial marketsinterest rates. Demand for our dry bulk oceangoing vessels is dependent upon economic growth in the U.S., experienced even greater relative volatilityworld’s economies, seasonal and a steepregional changes in demand and abrupt downturn, which volatility and downturn may continue as COVID-19 continueschanges to spread. Credit markets and the debt and equity capital markets have been52distressed and the uncertainty surrounding the futurecapacity of the global credit markets has resulted in reduced access to credit worldwide, particularly for the shipping industry. These issues, along with significant write-offs in the financial services sector, the repricing of credit riskdry bulk fleet and the current weaksources and supply for dry bulk cargo transported by sea. Continued adverse economic, political or social conditions or other developments could further negatively impact charter rates and therefore have made it difficult to obtain financing.OceanPal Inc.For the period fromApril 15, 2021 (inception date) toDecember 31, 2021Fleet Data:Average number of vessels (1)3.0Number of vessels at year-end3.0Weighted average age of vessels at year-end (in years)16.7Ownership days (2)96Available days (3)96Operating days (4)96Fleet utilization (5)100.0% Fleet Data: Number of vessels at year-end Weighted average age of vessels at year-end (in years) (1) (2) (3) (4) (5) fleetFleet utilization by dividing the number of our operatingOperating days during a period by the number of our availableAvailable days during the period. The shipping industry uses fleetFleet utilization to measure a company’s efficiency in finding53suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning for such events. Amounts in the tables below are in U.S dollars Average Daily Results: (6) availableAvailable days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel) expenses, canal charges and commissions. TCE rate is a non-GAAP measure, and management believes it is useful to investors because it is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters are generally expressed in such amounts. The following table reflects the calculation of our TCE rates for the periods presented.(7) Amounts in the tables below are in thousands of U.S dollars except for Available days and TCE rate Time charter revenues Less: voyage expenses Time charter equivalent (TCE) revenues Available days Time charter equivalent (TCE) rate 54E. Critical Accounting Estimates E.Critical Accounting Estimatespoliciesestimates are those estimates made in accordance with generally accepted accounting principles that reflectinvolve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We prepare our financial statements in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments of uncertaintiesto ensure that our consolidated financial statements are presented fairly and potentially result in materially differentaccordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results under differentcould differ from our assumptions and conditions. We have described below what we believe are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment in their application.estimates, and such differences could be material. For a description of all significantour material accounting policies, seeplease read “Item 18. Financial Statements” and more precisely Note 2 (“Significant Accounting Policies”) to our audited consolidated financial statements for the period from inception (April 15, 2021) through December 31, 2021 and Note 2 to the OceanPal Inc. Predecessors’ audited combined carve-out financial statements for the period from January 1, 2021 through November 29,2021 and for the years ended December 31, 2020 and 2019, included elsewhere in this annual report.Accounting for Revenues and ExpensesRevenues are generated from time charter agreements which contain a lease as they meet the criteria of a lease under ASC 842. Agreements with the same charterer are accounted for as separate agreements according to their specific terms and conditions. All agreements contain a minimum non-cancellable period and an extension period at the option of the charterer. Each lease term is assessed at the inception of that lease. Under a time charter agreement, the charterer pays a daily hire for the use of the vessel and reimburses the owner for hold cleanings, extra insurance premiums for navigating in restricted areas and damages caused by the charterers. Additionally, the charterer pays to third parties port, canal and bunkers consumed during the term of the time charter agreement. Such costs are considered direct costs and are not recorded as they are directly paid by charterers, unless they are for the account of the owner, in which case they are included in voyage expenses. Additionally, the owner pays commissions on the hire revenue, to both the charterer and to brokers, which are direct costs and are recorded in voyage expenses. Under a time charter agreement, the owner pays for the operation and the maintenance of the vessel, including crew, insurance, spares and repairs, which are recognized in operating expenses. The Company, as lessor, has elected not to allocate the consideration in the agreement to the separate lease and non-lease components (operation and maintenance of the vessel) as their timing and pattern of transfer to the charterer, as the lessee, are the same and the lease component, if accounted for separately, would be classified as an operating lease. Additionally, the lease component is considered the predominant component as the Company has assessed that more value is ascribed to the vessel rather than to the services provided under the time charter contracts.Voyage expenses, primarily consisting of commissions, are expensed over the related voyage charter period to the extent revenue has been recognized since commissions are due as the Company’s revenues are earned. All vessel operating expenses are expensed as incurred.excluding interest charges, expected to be generated by the use of an asset over its remaining useful life and its eventual disposition is less than its carrying amount plus unamortized dry-docking costs, the Company evaluates the asset for impairment loss. Measurement of the impairment loss is based on the fair value of the asset, determined mainly by third party valuations.calculatesconsiders indicators of a potential impairment. In developing estimates of future undiscounted projected net operating cash flows, by considering the historicalCompany makes assumptions and estimatedestimates about the vessels’ future performance, and utilization with the significant assumptionassumptions being related to future charter rates for the unfixed days using the most recent 10 year average of historical 1 year time charter rates available for each type of vessel over the remaining estimated life of each vessel, net of commissions.and future fleet utilization rate. Other assumptions used, in developing estimates of future undiscounted cash flow are charter rates calculated for the fixed days using the fixed charter rate of each vessel from existing time charters; the expected outflows for scheduled vessels’ maintenance; vessel operating expenses; fleet utilization,estimated remaining useful life of each vessel and the vessels’ residual value if sold for scrap. AssumptionsThe assumptions used to develop estimates of future undiscounted projected net operating cash flows are based on historical trends as well as future expectations, employment prospects under the then current market conditions and vessels’ age. In particular, for the unfixed days, the Company uses the most recent ten-year average of historical market charter rates available for each type of vessel over the remaining estimated life of each vessel, net of commissions. Historical ten-year average market charter rates are in line with the Company’s55current fleet deployment strategy.employment strategy, which is additionally affected with the period(s) each vessel is expected to undergo its scheduled dry-docking and/or special survey maintenance works. This calculation is then compared with the vessels’ net book value plus unamortized dry-docking costs, if any.and special survey costs. The difference between the carrying amount of the vessel plus unamortized dry-docking and special survey costs if any and their fair value is recognized in the Company'sCompany’s accounts as impairment loss. The Company recognizedforwas identified or recorded during the periodyears ended December 31, 2021. OceanPal Inc. Predecessors recognized no2023, and 2022, according to our assessment, the carrying value plus unamortized dry-docking and special survey costs, if any, of vessels for which impairment loss for the period from January 1, 2021 through November 29, 2021 and for the period from January 1, 2020 throughindicators existed as at December 31, 2020. Vessels Dwt Year Built In millions of USD) 2023 2022 1. Protefs 2. Calipso 3. Salt Lake City 4. Baltimore 5. Melia Total $ 73.1 $ 64.5 ●reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;●news and industry reports of similar vessel sales;●offers that we may have received from potential purchasers of our vessels; and●vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.valuevalues, charter rates and vessel utilization are inherently uncertain. In addition, vessel values are highly volatile; as such, our estimates may not be indicative of the current or future charter-free market value of our vessels or prices that we could achieve if we were to sell them. We also refer you to the risk factor in “Item 3. Key Information—D.Information-D. Risk Factors” entitled “The“A decline in the market values of our vessels have declined in recent years and may further decline, which could limit our ability to borrow funds in the amountfuture, trigger breaches of funds that we can borrow, or adversely affect our operating results, andcertain financial covenants contained in any future borrowing facilities we may incur a loss if we sell vessels following a declineenter into, and/or result in their market values”impairment charges or losses on sale.” and the discussion under the heading “Item 4. Information on the Company—B.Company-B. Business Overview–VesselOverview-Vessel Prices.”nonmonetary transactionsensitivity analysis by assigning possible alternative values to these significant inputs, indicated that time charter rates and utilization would need to be reduced by 5.0% to 22.9% to result in impairment of individual long-lived assets with indication of impairment. In particular, a minimum decrease of 5.4% in the time charter rates for the unfixed days as defined broadly undershown in detail in the table below and a minimum fleet utilization rate of 93.0% used instead in our impairment test exercise would result in $4.09 million impairment charge for one of our vessels. However, there can be no assurance as to how long charter rates and vessel values will remain at their current levels. If charter rates decrease and remain depressed for some time, it could adversely affect our revenue and profitability and future assessments of vessel impairment. Average break-even rate Panamax Capesize Panamax Capesize 845, we determine whether820 “Fair Value Measurements and Disclosures”, which defines fair value and provides guidance for using fair value to measure assets, liabilities and equity instruments classified in stockholders’ equity. The guidance creates a fair value hierarchy of measurement and describes fair value as the transaction is a contribution ofprice that would be received to sell an asset or paid to transfer a business by assessingliability or the definition of a business under ASC 805 and whether theconsideration to transfer equity interests issued in an orderly transaction is pro-rata. A transaction is considered pro rata if each owner receives an ownership interestbetween market participants in the transfereemarket in proportionwhich the reporting entity transacts. The fair value measurement assumes that an instrument classified in stockholders’ equity is transferred to its existing ownership interesta market participant at the measurement date. The transfer of an instrument classified in stockholders’ equity assumes that the transferor (even ifinstrument would remain outstanding, and the transferor retains an ownership interest inmarket participant takes on the transferee).rights and responsibilities associated with the instrument. In accordance with FASB Topic 805 Business Combinations: Clarifying the Definitionrequirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets, liabilities and equity instruments classified in stockholders’ equity carried at the fair value in one of the following categories: Level 1: Quoted market prices in active markets for identical assets or liabilities or equity instruments; 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.Business, if substantially allfair value of $2.68 million, to vest over a service period of two years. The fair value of the Series C Preferred Stock was determined based on a valuation obtained by an independent third party for the purposes of the transaction. On February 8, 2023, the Company acquired the M/V Melia from Diana Shipping. The non-cash consideration part of the total purchase price paid in the form of 13,157 Series D Preferred Stock as of the vessel acquisition date has been recorded at a fair value of $10.0 million determined based on valuation obtained by an independent third party for the purposes of the transaction.gross assets acquired in an acquisition transaction are concentrated in a single identifiable asset or group2023 and 2022 restricted stock awards, the Company applied discount factors of similar identifiable assets, then the set is not a business. To be considered a business, a set must include an input12.5% and a substantive process that together significantly contributes to the ability to create an output. All assets contributed under nonmonetary transactions that do not meet the definition of a business and include pro rata distributions, are measured at their fair values12.7%, respectively, determined based on the transaction date in accordance with ASC 845, if theCompany’s estimated weighted average cost of capital comprising of (i) risk-free rates of 3.4% and 1.0%, respectively (ii) representative beta of 1.3, for each fair value measurement and (iii) equity market average return of 10.4% and 10%, respectively. The fair value of the instruments is objectively measurable and clearly realizablesensitive to changes in an outright sale at or near the distribution.discount factor applied.Item 6.Directors, Senior Management and EmployeesA.Directors and Senior ManagementItem 6. Directors, Senior Management and Employees A. Directors and Senior Management andthat will be elected annually on a staggered basis, and each director elected will hold 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 termination564751 Chief Executive Officer Vasiliki Plousaki 38 Chief Financial Officer Ioannis Zafirakis 52 Class III Director Eleftherios Papatrifon 51 and Chief Executive OfficerIoannis Zafirakis50Grigorios-Filippos Psaltis 49 Class II Director Nikolaos Veraros 53 Class III Director President, Interim Alexios Chrysochoidis 50 Class I Director Margarita Veniou 45 FinancialCorporate Development and Governance Officer and SecretaryStyliani Alexandra Sougioultzoglou47Class I DirectorGrigorios-Filippos Psaltis47Class II DirectorNikolaos Veraros51Class III DirectorAlexios Chrysochoidis48Class I Director2023, the term of our Class III directors expires in 2024. Based on the preliminary results of the 2022 annual general meeting held on April 5, 2022, our Class I directors were reelected for a three year term which expires in 2025.2021. Mrs. Paliou is2021 and currently holds the position of Chairperson of the Board of Directors and of the Executive Committee of the Company since November 2021. With extensive experience in the maritime industry, Mrs. Paliou has served asbeen a Director of Diana Shipping Inc. since March 2015. She2015 and has also served asheld various leadership roles within the company including Chief Executive Officer, Chairperson of the Executive Committee and a member of the Sustainability Committee of Diana Shipping since March 1, 2021. She previouslyPrior to her current positions, she served as Deputy Chief Executive Officer of Diana Shipping from October 2019 until February 2021. Mrs. Paliou also served as member of the Executive Committee and the Chief Operating Officer of Diana Shipping from August 2018 until February 2021.Inc. Mrs. Paliou also serves as Chief Executive Officer of Diana Shipping Services S.A. From November 2018 to February 2020and has previously held leadership position at United Ocean Transport Limited. Mrs. Paliou also served as Chief Operating Officer of Performance Shipping Inc. Mrs. Paliou has over 20 years of experience in shipping operations, technical management and crewing. Mrs. PaliouPaliou’s career began her career at Lloyd’s Register of Shipping from 1996 to 1998 as a trainee ship surveyor. She was then employed bysurveyor and later held roles at 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. Ms. Paliou obtained herShe holds a BSc in Mechanical Engineering from Imperial College, London and heran MSc in Naval Architecture from University College, London. Ms. Paliou completedShe has furthered her education through courses in "Finance for Senior Executives" and in "Authentic Leader Development" and a certificate program on "Sustainable Business Strategy" all at Harvard Business School. SheSchool, focusing on finance, authentic leadership development, and sustainable strategy. As a prominent figure in the maritime community, Mrs. Paliou is the daughter of Simeon Palios, the Chairman of Diana Shipping, and isactively involved in various industry organizations, including serving as Vice-Chairperson of the Greek committee of Det Norske Veritas, a member of the Greek committee of Nippon Kaiji Kyokai and Bureau Veritas, and as a member of the Greek committee of Bureau Veritas. Since March 2018, Ms. Paliou has served on the board of directorsmember of the Hellenic Marine Environment Protection Association (HELMEPA) and serves assince since March 2018, where she currently holds the Chairperson since June 2020. Asposition of June 2021,Chairperson. Additionally, she serves as Vice-ChairpersonChairperson of INTERMEPA. Also, sheINTERMEPA and is a member of the board of directors of the United Kingdom Mutual Steam Ship Assurance Association (Europe) Limited since November 2020 and as of February 2022 member ofUK P&I Club, the Union of Greek Shipowners.Eleftherios (Lefteris) A. PapatrifonShipowners and the Global Maritime Forum .Chief Executive Officer since November 2021.IT services. Mr. PapatrifonPerri is a member of the Executive Committee of the Company. He has served as Chief Operating Officer of Diana Shipping and Diana Shipping Services S.A. since March 2021. Mr. Papatrifon participates on a non-voting basis in the Executive Committee of Diana Shipping He was Chief Executive Officer, Co-Founder and Director of Quintana Shipping Ltd, a provider of dry bulk shipping services, from 2010 until the company’s successful sale of assets and consequent liquidation in 2017. Previously, for a period of approximately six years, he served as the ChiefChartered Financial Officer and a Director of Excel Maritime Carriers Ltd. Prior to that, Mr. Papatrifon served for approximately 15 years in a number of corporate finance and asset management positions, both in the USA and Greece. Mr. Papatrifon holds undergraduate (BBA) and graduate (MBA) degrees from Baruch College (CUNY). He is also a member of the CFAAnalyst (CFA) Institute and a CFA charterholder. Mr. Perri received his Bachelor of Science degree in Accounting and Finance from Drexel University in 1995 and received his MBA with a focus on finance and banking from SDA Bocconi in 1999.57 and Secretary of the Company since April 2021. He ishas also served as the Company’s President, Secretary and Interim Chief Financial Officer sincefrom November 2021.2021 to April 2023. Mr. Zafirakis is also member of the Executive Committee of the Company. He has served as a Director of Diana Shipping Inc. from February 2005 and as Chief Financial Officer (Interim Chief Financial Officer until February 2021) and Treasurer of Diana Shipping.Shipping Inc. since February 2020 and he is also the Chief Strategy Officer of Diana Shipping Inc. Mr. Zafirakis is also member of the Executive Committee of Diana Shipping Inc. Mr. Zafirakis has held various executive positions such as Chief Operating Officer, Executive Vice-President and Vice-President. In addition, Mr. Zafirakis is the Chief Financial Officer of Diana Shipping Services S.A., where he also serves as Director and Treasurer. From June 1997 to February 2005, Mr. Zafirakis was employed by Diana Shipping Agencies S.A., where he held a number of positions in finance and accounting. From January 2010 to February 2020 he also served as Director and Secretary of Performance Shipping Inc., where he held various executive positions such as Chief Operating Officer and Chief Strategy Officer. Mr. Zafirakis is a member of the Business Advisory Committee of the Shipping Programs of ALBA Graduate Business School at The American College of Greece. In 2024, Mr. Zafirakis attended and completed the Advanced Management Programme at INSEAD Business School in Singapore. Mr. Zafirakis has also obtained a certificate in “Blockchain Economics: An Introduction to Cryptocurrencies” from Panteion University of Social and Political Sciences in Greece. He holds a bachelor’s degree in Business Studies from City University Business School in London and a master’s degree in International Transport from the University of Wales in Cardiff.served as Curatoris the fourth generation of a shipping family that has owned and Project Manager in Technopolisoperated dry cargo and passenger vessels. She has been a Director of the CityHuman Resources department of Athens from January 1999 through October 2019.Estamar Shipmanagement Company, owners/operators of dry cargo vessels. Ms. Sougioultzoglou graduated from the London School of Economics and Political Science with a degree in International Relations & History.MrMr. Chrysochoidis joined Eurobank Equities in 2003 and he is General Manager, Head of Trading in Athens, Greece. He supervises the Equity and Equity Derivatives Market Making Desk along with the Prop Trading Desk. He has extensive cross border experience, specializing in multi asset products within the Capital Markets and Alternative Sectors. Prior to this he worked for Telesis Securities, as Deputy Head of the Derivatives Desk. He holds a B.Sc and an M.Eng in Electrical Engineering from Imperial College (UK) and an M.Sc in Engineering Economic Systems from Stanford University (US).5, 2022)587 B.CompensationWe have no direct employees. The Female Male Non-Binary Part I: Gender Identity Directors Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction LGBTQ+ Did Not Disclose Demographic Background B. Compensation Chief Executive Officer and President and Interim Chief Financial Officer areofficers have been provided by Steamship an affiliatedShipbroking Enterprises Inc., a related party to the company, aspursuant to the agreements described underin “Item 7. Major Shareholders and Related Party Transactions – B.— Related Party Transactions." These services are providedTransactions”. We consider part of these fees under these agreements to us underconstitute the compensation paid to our administrative services agreement with Steamship.Non-employeeexecutives.(the “Plan”), pursuant to which the Company may issue up to 1,000,0002,000,000 common shares, and 10,000 Series C Preferred Shares, all of which remain available for issuance and 10,000 Series C Preferred Shares, of which 1,354 remain available to be granted as of April 5, 2022.C.PracticesC. Board Practices 59 and the two executive directors, Mr. Ioannis Zafirakis (member), and Mr. Eleftherios (Lefteris) Papatrifon (member). The Executive Committee has, to the extent permitted by law, the powers of the Board of Directors in the management of the business and affairs of the Company.D.EmployeesD. Employees Chief Executive Officer and President, Interim Chief Financial Officer and Secretary.officers. DWM is responsible for identifying the appropriate officers and seamen mainly through crewing agencies. The crewing agencies handle each seaman’s training, travel and payroll. DWM ensures that all our seamen have the qualifications and licenses required to comply with international regulations and shipping conventions. As of December 31, 2023, 2022 and 2021, the number of106, 86 and 63 seafarers, respectively, were employed by our vessel-owning subsidiaries were 63.E. Share Ownership E.Share OwnershipWith respect to the total amount of common shares, Series B Preferred Shares, Series C Preferred Shares, Series D Preferred Shares and Series CE Preferred Shares owned by our officers and directors, individually and as a group, see “Item 7. Major Shareholders and Related Party Transactions—A.Transactions-A. Major Shareholders.”F. Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation Item 7.Major Shareholders and Related Party TransactionsA.Major ShareholdersItem 7. Major Shareholders and Related Party Transactions A. Major Shareholders 5, 202210, 2024 who we know to beneficially own more than five percent of our outstanding common shares, and our executive officers and directors. All of our stockholders including the stockholders listed in this table, are entitled to one vote for each common share held. Shares Beneficially Owned Identity of person or group Number Percentage** Diana Shipping Inc. (1) 3,651,468 49.0 % Semiramis Paliou (2)(3)(4) 2,642,586 26.2 % Ioannis Zafirakis (2)(3) 400,664 5.1 % Eleftherios Papatrifon (2)(3) 229,940 3.0 % Anamar Investments Inc. (5) 518,003 6.5 % Coronis Investments Inc. (6) 630,541 7.8 % Taracan Investments S.A (7) 535,203 6.7 % Sphinx Investment Corp. (8) 972,198 13.0 % Nikolaos Veraros (3) 31,512 * % Grigorios-Filippos Psaltis (3) 31,167 * % Alexios Chrysochoidis (3) 29,088 * % Styliani Alexandra Sougioultzoglou (3) 28,742 * % *Based on 29,829,092(1)shares outstanding as of April 5, 2022. (1) newly-issued Series B Preferred Shares.Stock. Through its beneficial ownership of our Series B Preferred Shares,Stock, Diana Shipping Inc. is entitled to cast a number2,000 votes for each share of votes forSeries B Preferred Stock on all matters on which our common shareholders are entitled to vote of up to 34% of the total number of votes entitled to vote on such matter. To the extent the aggregate voting power of any holder of Series B Preferred Shares,Stock, together with any affiliate of such holder, would exceed 49% of the total number of votes that may be cast on any matter submitted to a vote of our shareholders, the number of votes of therelating to its shares of Series B Preferred SharesStock shall be automatically reduced so that such holder’s aggregate voting power,60(2) (3) (4) (5) (6) together with any affiliate of such holder, is not more than 49%. Diana Shipping also owns 100% of our newly-issued Series C Preferred Shares, which may be converted into shares of our common stock, at Diana Shipping’s option commencing upon the first anniversary of the original issue date, at a conversion price equal to the lesser of $6.50 and the 10-trading day trailing VWAP of our common shares, subject to certain adjustments.(7) This information is derived from a Schedule 13G/A filed with the SEC on February 14, 2024. (8) 4, 2022,10, 2024, we had 9950 shareholders of record, 9132 of which were located in the United States and held an aggregate of 29,784,7713,779,629 of our common shares, representing 99.85%50.72% of our outstanding common shares. However, one of the U.S. shareholders of record is CEDE & CO., a nominee of The Depository Trust Company, which held 29,757,7073,779,230 of our common shares as of that date. Accordingly, we believe that the shares held by CEDE & CO. include common shares beneficially owned by both holders in the United States and non-U.S. beneficial owners. We are not aware of any arrangements the operation of which may at a subsequent date result in our change of control.B. Related Party Transactions Related Party Transactions Shipbroking Enterprises Inc. Shipbroking Enterprises Inc. ("Steamship"), a related party that since January 2023 is controlled by the Chairman of Diana Shipping,our Chairperson, provides to us insurance, administrative and brokerage services pursuant to a Management Agreement for insurance-related services;services an Administrative Services Agreement; and a Brokerage Services Agreement.$95,000$150,000 per month, plus 2.5% on the hire agreed per charter party for each vessel (subject to required deductions and withholdings); provided, however, that we and Steamship may agree to commissions on a percentage basis for specific deals. This Brokerage Services Agreement had an initial term of twelve months commencing on January 1, 2023 (unless terminated earlier on the basis of any other provision contained therein) and is automatically renewed for further periods of one calendar year.maywith Diana Shipping, dated November 8, 2021, pursuant to which Diana Shipping granted us a right of first refusal over six dry bulk carriers then owned by Diana Shipping and identified in the agreement. As of the date of this annual report, one of the six identified vessels from Diana Shipping remains available for our purchase. Pursuant to this right of first refusal, we have the right, but not the obligation, to purchase the remaining identified vessel when and if Diana Shipping determines to sell the vessel. Pursuant to the agreement, in connection with our right of first refusal in any vessel acquisition opportunity, our right to purchase the vessel will be terminatedat a price equal to the fair market value of such vessel at the time of sale, as determined by eitherthe average of two independent shipbroker valuations from brokers mutually agreeable to the Company and Diana Shipping. If we do not exercise our right to purchase this vessel, Diana Shipping has the right to sell the vessel to any third party at any timefor a period of three months from the date we received notice of the offer from Diana Shipping.prior written notice.Diana Shipping, Right of First RefusalWe have entered into a right of first refusal agreement with Diana Shipping, dated November 8, 2021, pursuant to which Diana Shipping granted us a right of first refusal over six drybulk carriers currently owned by Diana Shipping and identified in the agreement. Pursuant to this right of first refusal, we have the right, but not the obligation, to purchase one or all of the six identified vessels when61and if Diana Shipping, makes a determinationRedemption of Series C Preferred Stocksell one or morethe provisions of the vessels. PursuantSeries C Preferred Stock statement of designations, exercised its right to redeem 9,793 of its 10,000 Series C Preferred Stock, through the agreement,issuance to Diana Shipping of 3,649,474 of the Company’s shares of common stock. The redemption rate which was utilized in connection with our rightthe redemption of first refusalthe Series C Preferred Stock was based on the 10-day trailing VWAP of the Company’s common stock, in any vessel acquisition opportunity, our right to purchaseaccordance with the vessel will be atconversion mechanism prescribed in the Series C Preferred Stock statement of designation. As a price equal to the fair market valueresult of each vessel at the timethis redemption, 207 Series C Preferred Stock of sale, as determined by the average of two independent shipbroker valuations from brokers mutually agreeable to the Company remained in Diana Shipping’s possession as of December 31, 2023 and Diana Shipping. If we do not exercise our right to purchase a vessel, Diana Shipping has the right to sell the vessel to any third party for a periodas of three months from the date we received notice of the offer from Diana Shipping.affiliatedunaffiliated entity of us, which provides management services to the vessels in our fleet pursuant to a management agreement, under which each of our vessel-owning subsidiaries pays, for each vessel, an aggregate of 1.25% on hire and on freight of the vessel’s gross income, plus either (i) $18,500 for each month that the vessel is employed or available for employment or (ii) $9,250 per month for each month that the vessel is laid-up and not available for employment for at least 15 calendar days of such month. The management agreement may be terminated by either party on three months’ prior written notice.ContributionConveyance AgreementWe entereddeliver an opinion as to the financial fairness and the fair value of such consideration. The Series E Preferred Stock has no dividend or liquidation rights. The Series E Preferred Stock votes with the shares of common stock of the Company, and each share of the Series E Preferred Stock entitles the holder thereof to up to 25,000 votes, on all matters submitted to a vote of the stockholders of the Company, subject up to 15% of the total number of votes entitled to be cast on matters put to shareholders of the Company. The Series E Preferred Stock is convertible, at the election of the holder, in whole or in part, into an amended and restated contribution and conveyance agreement with Diana Shipping, dated asshares of November 17, 2021, pursuant to which Diana Shipping (i) contributed certain vessel-owning subsidiaries, together with $1.0 million in working capital, to us on November 29, 2021 in exchange for our common shares, stock at a conversion price equal to the 10-trading day trailing VWAP of our common stock, subject to certain adjustments, commencing at any time after a Series B Event. The 15% limitation discussed above, shall terminate upon the occurrence of a Series B Event. The Series E Preferred Shares and Series C Preferred Shares, and (ii) agreed to indemnify us and the vessel-owning subsidiaries for any and all obligations and other liabilities arising from or relatingStock is transferable only to the operation, managementholder’s immediate family members and to affiliated persons or employment of our vesselsentities, with the prior to the effective dateconsent of the Spin-Off.Resale Registration StatementWe have agreed with certain of our executive officers and significant shareholders (the “selling shareholders”) to register their resaleCompany. The issuance of shares of common stock. We registeredSeries E Preferred Stock was approved by an aggregate of 1,777,148 shares for certainindependent committee of the selling shareholders on Form F-1 (Registration No. 333-262129) Board of Directors of the Company.connectionwhich the Company’s Chairperson holds equity interests, provides us from time to time with our January 2022 Underwritten Offering. Pursuant to the agreement, we may register up to an additional 26,000 common shares.C.Interests of Experts and CounselC. Interests of Experts and Counsel Item 8.Financial informationA. Consolidated statements and other financial informationItem 8. Financial information A. Consolidated statements and other financial information One incident involving one of our vessels and described in the combined carve-out financial statements of the OceanPal Inc. Predecessors, relates only to DWM, as managers, and Diana Shipping. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be covered by insurance, subject to customary deductibles. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. Pursuant to the Contribution and Conveyance Agreement between us and Diana Shipping, it has agreed to indemnify us and the Subsidiaries for any and all obligations and other liabilities arising from or relating to the operation, management or employment of our vessels prior to the effective date of the Spin-Off.62SharesStock and our Series D Preferred Stock are payable in cash or, at our election, in kind, quarterly on each January 15, April 15, July 15 and October 15, or, if any such dividend payment date otherwise would fall on a date that is not a business day, the immediately succeeding business day. The dividend rate foron shares of our Series C Preferred SharesStock is 8.0% per annum per $1,000 of liquidation preference per share (equal to $80 per annum per share) and is not subject to adjustment. on and redeem the Series C Preferred Shares only to the extent that assets are legally available for such purposes. Legally available assets generally are limited to our surplus, which essentially represents our retained earnings and the excess of consideration received by us for the sale of shares above the par value of the shares. In addition, under Marshall Islands law we may not pay dividends on or redeem Series C Preferred Shares if we are insolvent or would be rendered insolvent by the payment of such a dividend or the making of such redemption.B. Significant ChangesB. Significant Changes A. Offer and Listing Details B. Plan of distribution C. Markets D.Selling ShareholdersNot Applicable.E.DilutionNot Applicable.63D. Selling Shareholders F.Expenses of the IssueApplicable.E. Dilution F. Expenses of the Issue A. Share capital B.Memorandum and articles of associationB. Memorandum and articles of association 2.82.10 to this annual report titled “Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.”C.C. Material contractsAttached as exhibits to this annual report are the contractsconsider to be both material andhave not entered into any new material contracts in the last two years, other than those entered in the ordinary course of business which (i) are to be performed in whole or in part on or after the filing date of this annual report or (ii) were entered into not more than two years before the filing date of this annual report. Other than these agreements, we have no material contracts, other than contracts entered intoalready attached in the ordinary course of business,exhibits. We also refer you to which“Item 4. Information on the Company or any member-A. History and Development of the group isCompany,” “Item 5. Operating and Financial Review and Prospects -B. Liquidity and Capital Resources” and “Item 7. Major Shareholders and Related Party Transactions -B. Related Party Transactions” for a party. A descriptiondiscussion of these is included in our description of our agreements in Item 7.B.D.Exchange ControlsD. Exchange Controls E.TaxationE. Taxation he Thethe following is a discussion of the material Marshall Islands and U.S. federal income tax considerations applicable to the Company and U.S. Holders and Non-U.S. Holders, each as defined below, of our common stock.regulations,Regulations, all as of the date of this annual report, and all of which are subject to change, possibly with retroactive effect. The discussion below is based, in part, on the description of the Company’s business as described in “Business” above and assumes that the Company will conduct its business as described in that section.64non-United Statesnon-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will not be subject to any United States federal income tax.●the Company is organized in a foreign country, or its country of organization, that grants an “equivalent exemption” to corporations organized in the United States; and●more than 50% of the value of the Company’s stock is owned, directly or indirectly, by “qualified shareholders,” individuals who are “residents” of a foreign country that grants an “equivalent exemption” to corporations organized in the United States, which we refer to as the “50% Ownership Test,” or●the Company’s stock is “primarily and regularly traded on an established securities market” in a country that grants an “equivalent exemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test.”65will beare listed on the Nasdaq Capital Market, the Company will satisfysatisfies the listing threshold.regulationsRegulations provide that the trading frequency and trading volume tests will be deemed satisfied by a class of stock if, as the Company expects to be the case with its common shares, such class of stock is traded on an established market in the United States, such as the Nasdaq Capital Market, and such class of stock is regularly quoted by dealers making a market in such stock.regulationsRegulations provide that, in pertinent part, a non-U.S. corporation’s common stock will not be considered to be “regularly traded” on an established securities market for any taxable year if 50% or more of the outstanding shares of such corporation’s common stock is owned, actually or constructively under specified attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the common stock the corporation (the “5% Override Rule”).regulationsRegulations permit a corporation to rely on Schedule 13-D and Schedule 13-G filings with the SEC to identify persons who have a 5% or more beneficial interest in such corporation’s common stock. The Treasury regulations further provide that an investment company that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Stockholder for such purposes.regulationsRegulations provide that the 5% Override Rule will nevertheless not apply if the Company can establish that within the group of 5% Shareholders, there are sufficient 5% Shareholders that are considered to be “qualified shareholders” for purposes of Section 883 of the Code to preclude non-qualified 5% Shareholders in the closely-held group from owning 50% or more of the corporation’s common stock for more than half the number of days during the taxable year. To establish this exception to the 5% Override Rule, 5% Shareholders owning a sufficient number of our common shares would have to provide the Company with certain information in order to substantiate their status as qualified shareholders. If 5% Shareholders were to own more than 50% of our common shares, there is no assurance that we would be able to satisfy the foregoing requirements.66●The Company has, or is considered to have, a fixed place of business in the United States involved in the earning of shipping income; and●Substantially all of the Company’s U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.thean alternative minimum tax, persons who hold common stock as part of a straddle, hedge, conversion transaction or integrated investment, U.S. Holders whose functional currency is not the United States dollar, persons required to recognize income for U.S. federal income tax purposes no later than when such income is reported on an “applicable financial statement,” investors subject to the “base erosion and anti-avoidance” tax and investors that own, actually or under applicable constructive ownership rules, 10% or more of the Company’s common stock, may be subject to special rules. This discussion deals only with holders who hold the common stock as a capital asset. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local or foreign law of the ownership of common stock.67●at least 75% of the Company’s gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or●at least 50% of the average value of the Company’s assets during such taxable year produce, or are held for the production of, passive income, which we refer to as “passive assets”.6869●such gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States, if the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or●the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.●70●is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or●in certain circumstances, fails to comply with applicable certification requirements.F.Dividends and paying agentsF. Dividends and paying agents G.Statement by expertsG. Statement by experts H.Documents on displayH. Documents on display 71Ioannis ZafirakisDirector, President, Interim FinancialCorporate Development and Governance Officer and Secretaryizafirakis@oceanpal.comI.Subsidiary informationI. Subsidiary information Applicable.applicable.J. Annual Report to Security Holders Item 11.Quantitative and Qualitative Disclosures about Market RiskItem 11. Quantitative and Qualitative Disclosures about Market Risk Item 12.Description of Securities Other than Equity SecuritiesItem 12. Description of Securities Other than Equity Securities Applicable.72PART IIItem 13.Defaults, Dividend Arrearages and DelinquenciesItem 13. Defaults, Dividend Arrearages and Delinquencies Item 14.Material Modifications to the Rights of Security Holders and Use of ProceedsOur Registration Statement on Form F-1 (Registration No. 333-262129) relating to our January 2022 Underwritten Offering was declared effective by the SEC on January 20, 2022. The offering date of the January 2022 Underwritten Offering was January 20, 2022 and the offering was completed onItem 14. Material Modifications to the Rights of Security Holders and Use of Proceeds 2022. Maxim Group LLC acted as the sole book runner for the offering. In the2022, we closed an underwritten public offering we issued and soldof 15,571,429 units at a price of $0.77 per unit, each unit200 units consisting of one share of our common stock (or one200 pre-funded warrantwarrants in lieu of one share of our common stock) and one200 Class A warrantwarrants to purchase one share of our common stock. In addition, certain selling stockholdersshareholders affiliated with us (the “Selling Stockholders”Shareholders”) sold an aggregate of 628,5713,143 shares of common stock in the offering. Each shareof the 3,143 shares of common stock sold by athe Selling StockholderShareholders on the primary offering, was solddelivered to the underwriters with one200 additional Class A warrantwarrants to purchase one share of common stock.stock (sold by us), on a firm commitment basis. In addition, the underwriter for the offering fully-exercised its option to purchase an additional 1,148,5775,743 common shares from the Selling StockholdersShareholders and 1,281,4236,407 common shares, along with 2,430,000 Class A warrants from us. Asus to purchase 12,150 shares of April 5, 2022, all prefunded warrants have been exercised and 14,474,000common stock. Each of the 5,743 shares of common stock sold by the Selling Shareholders upon exercise of the underwriters’ over-allotment option, was sold with 200 Class A warrants (sold by us) to purchase one share of our common stock, on a firm commitment basis. All pre-funded warrants related to this offering were exercised during 2022, whereas as of April 10, 2024, Class A warrants to purchase 72,370 common shares remained available for exercise at an exercise price of $0.77$154.00 per share for up to an aggregate of the same number of shares of common stock.share. The gross proceeds and the net proceeds of the offering to us, before underwriting discounts and commissions and estimated offering expenses, were approximately $16.19 million and $14.72 million, respectively (including the exercise of the overallotment option, the exercise of all prefunded warrants and the4,156,000 Class A warrants exercised to date)purchase 20,780 shares of common stock, and the exercise of all pre-funded warrants). We did not receive any of the proceeds from the sale of common shares by the Selling Stockholders.Item 15.Controls and Procedures(a)Disclosure Controls and Procedures.Item 15. Controls and Procedures (a) Disclosure Controls and Procedures. as ofbeing December 31, 2021.2023. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures are effective as of the evaluation date.(b) Management’s annual report on internal control over financial reporting. due to a transition period established by rulesas such term is defined in Rule 13a-15(f) of the SECExchange Act. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for newly public companies.(c)Attestation reportexternal reporting purposes in accordance with U.S. GAAP.registered public accounting firm.(c) Attestation report of the registered public accounting firm. (d)Changes in internal control over financial reporting.(d) Changes in internal control over financial reporting. 73Item 16C. Principal Accountant Fees and Services(a) Audit FeesItem 16C. Principal Accountant Fees and Services (a) Audit Fees AuditAggregate audit fees in 20212023 and 2022, amounted to € 78,750,€135,000 and €94,500, or approximately $89,318$146,029 and $99,568, respectively, and relate to audit services provided in connection with the audit of our consolidated financial statements.(b) Audit-related Fees(b) Audit-related Fees 2021,2023 and 2022, our principal accountants, Ernst and Young (Hellas), Certified Auditors Accountants S.A., and our external consultants PricewaterhouseCoopers Business Solutions S.A. have also billed us for audit related services provided for the Company’s registration statements, which amounted to €36,750€103,000 and €153,750 or about $41,619.$111,355 and $168,521, respectively.(c) Tax Fees 2021.(d) All Other Fees(d) All Other Fees (e) Audit Committee’s Pre-Approval Policies and Procedures(e) Audit Committee’s Pre-Approval Policies and Procedures (f) Audit Work Performed by Other Than Principal Accountant if Greater Than 50%(f) Audit Work Performed by Other Than Principal Accountant if Greater Than 50% 74Item 16E. Purchases of Equity Securities by the Issuer and Affiliated PurchasersNone.Item 16F. Change in Registrant’s Certifying AccountantItem 16D. Exemptions from the Listing Standards for Audit Committees ●We are not required under Marshall Islands law to maintain a Board of Directors with a majority of independent directors, and we may not be able to maintain a Board of Directors with a majority of independent directors in the future.●In lieu of a nomination committee comprised of independent directors, our Board of Directors will be responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment to board committees. Shareholders may also identify and recommend potential candidates to become board members in writing. No formal written charter has been prepared or adopted because this process is outlined in our bylaws.●As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf.●In lieu of holding regular meetings at which only independent directors are present, our entire Board of Directors, a majority of whom are independent, will hold regular meetings as is consistent with the laws of the Republic of the Marshall Islands.●The Board of Directors has adopted an Equity Incentive Plan. Shareholder approval was not necessary since Marshall Islands law permits the Board of Directors to take such actions.●As a foreign private issuer, we are not required to obtain shareholder approval if any of our directors, officers, or 5% or greater shareholders has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company, or assets to be acquired, or in the consideration to be paid in the transaction(s) and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common stock or voting power of 5% or more.●In lieu of obtaining shareholder approval prior to the issuance of designated securities, the Company will comply with provisions of the Marshall Islands Business Corporations Act, providing that the Board of Directors approves share issuances.75Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. NumberDescription1.12.6 2.7 2.8 2.62.72.84.3764.54.5 8.18.1 99.1101.INS97.1 101.INS Inline XBRL Instance Document –- the instance document does not appear in the Interactive Data File because its XBRL tags are within the Inline XBRL document101.SCH101.SCH Inline XBRL Taxonomy Extension Schema 101.DEF101.DEF Inline XBRL Taxonomy Extension Schema Definition Linkbase (1) Filed as an exhibit to the Company’s Report on Form 6-K on June 30, 2023, and incorporated by reference herein. (2) (3) Filed as an exhibit on Form 6-K filed on February 10, 2023, and incorporated by reference herein. (4) Filed as an exhibit to the Company’s Registration Statement on Form F-1 on January 18, 2022,February 23, 2023, as amended, and incorporated by reference herein.(2)(5)Filed as an exhibit to the Company’s annual report on Form 20-F for the year ended December 31, 2021, filed with the Commission on April 6, 2022. (6) Filed as an exhibit to the Company’s annual report on Form 20-F for the year ended December 31, 2023, filed with the Commission on March 30, 2023. (7) Filed as an exhibit on Form 6-K filed on December 19, 2022, and incorporated by reference herein. (8) 4.1on Form 20-FR12B/A filed on November 17, 2021, and incorporated by reference herein.(9) Filed as an exhibit on Form 6-K filed on January 25, 2022, and incorporated by reference herein. (3)Filed as exhibit 4.2 of Form 6-K filed on January 25, 2022, and incorporated by reference herein.77OCEANPAL INC./s/Vasiliki Plousaki Vasiliki Plousaki Chief Financial Officer Dated: April 15, 2024 /s/ Ioannis ZafirakisIoannis ZafirakisPresident, Interim Chief Financial Officer and SecretaryDated: April 6, 202278OCEANPAL INC.
PageF-7F-1sheetsheets of OceanPal Inc. (the Company) as of December 31, 2021,2023 and 2022, the related consolidated statements of comprehensive (loss)/income, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2023 and for the period from inception (April 15, 2021) through December 31, 2021, 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, 20212023 and 2022 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023 and for the period from inception (April 15, 2021) through December 31, 2021, in conformity with U.S. generally accepted accounting principles.Company'sCompany’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit.audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (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.auditaudits 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our auditaudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion.auditaudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our auditaudits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.April 06, 2022F-2SHEET2021 December 31, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents (Note 2(e)) $ 14,841 $ 8,454 Accounts receivable trade, net (Note 2(f)) 2,963 4,252 - 5 Inventories (Note 2(g)) 287 334 Prepaid expenses and other assets, net (Note 6) 895 1,126 Insurance claims (Note 2(i)) 1,058 - Total current assets 20,044 14,171 FIXED ASSETS: Vessels, net (Notes 2(j), 2(k) and 5) 71,100 63,672 Total fixed assets 71,100 63,672 OTHER NON-CURRENT ASSETS: Deferred charges, net (Notes 2(m) and 2(z)) 2,056 1,175 Equity method investment (Notes 2(h) and 4) 1,645 - Total assets $ 94,845 $ 79,018 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable, trade and other 405 281 474 410 Dividends payable (Note 7(c)) 110 240 Accrued liabilities 898 1,154 Unearned revenue (Note 2(o)) 399 374 Total current liabilities 2,286 2,459 Commitments and contingencies (Note 6) - - STOCKHOLDERS’ EQUITY: 5 5 74 5 Additional paid-in capital (Note 7) 100,500 78,870 Accumulated deficit (8,020 ) (2,321 ) Total stockholders’ equity 92,559 76,559 Total liabilities and stockholders’ equity $ 94,845 $ 79,018 statementsF-3 2023 2022 2021 REVENUES: Time charter revenues (Notes 2(f) and 2(o)) $ 18,957 $ 19,085 $ 1,334 EXPENSES: Voyage expenses (Note 2(o)) 1,940 3,680 54 Vessel operating expenses (Notes 2(p) and 9) 10,421 6,880 360 Depreciation and amortization of deferred charges (Notes 2(l), 2(m) and 5) 7,670 4,896 354 General and administrative expenses 5,281 3,083 358 Management fees to related parties (Notes 3(a) and 3(b)) 1,236 878 74 Other operating loss/(income) (Note 6) 131 (6 ) - Operating (loss)/income $ (7,722 ) $ (326 ) 134 OTHER INCOME: Changes in fair value of warrants’ liability (Note 7(b)) 6,222 - - Finance costs (Note 7(b)) (909 ) - - Interest income 504 - - Gain from equity method investment (Notes 2(h) and 4) 2 - - Other expenses (74 ) - - Total other income, net $ 5,745 $ - $ - Net (loss)/income and comprehensive (loss)/income $ (1,977 ) $ (326 ) $ 134 Deemed dividend upon redemption of Series D Preferred Stock (Note 7(c)) (154 ) (134 ) - Deemed dividend upon redemption of Series C Preferred Stock (Note 7(c)) (2,549 ) - - Dividends on Series C Preferred Stock (Note 7(c)) (991 ) (950 ) (69 ) Dividends on Series D Preferred Stock (Note 7(c)) (1,036 ) (252 ) - Dividends on Class A warrants (Note 7(a)) - (1,012 ) - Net (loss)/income and comprehensive (loss)/income attributable to common stockholders $ (6,707 ) $ (2,674 ) $ 65 (Loss)/ earnings per common share, basic (Note 8) $ (2.02 ) $ (17.18 ) $ 1.47 (Loss)/ earnings per common share, diluted (Note 8) $ (3.83 ) $ (17.18 ) $ 1.06 Weighted average number of common stock, basic (Note 8) 3,315,519 155,655 44,101 Weighted average number of common stock, diluted (Note 8) 3,372,207 155,655 61,378 F-4 Common Stock Additional Retained Earnings/ Par Value Par Value Par Value # of Shares Par Value (Accumulated Deficit) Total Equity BALANCE, April 15, 2021 - $ - - $ - - $ - - $ - 25 $ - $ - $ - $ - Net income - $ - - $ - - $ - - $ - - $ - $ - $ 134 $ 134 Cancellation of common stock (Note 7(a)) - - - - - - - - (25 ) - - - - Issuance of common stock (Note 7(a)) - - - - - - - - 44,101 - 40,509 - 40,509 Issuance of Series B Preferred Stock (Notes 3(c) and 7(c)) 500,000 5 - - - - - - - - - - 5 Issuance of Series C Preferred Stock (Notes 3(c) and 7(c)) - - 10,000 - - - - - - - 7,570 - 7,570 Dividends on Series C Preferred Stock (Note 7(c)) - - - - - - - - - - - (69 ) (69 ) BALANCE, December 31, 2021 500,000 $ 5 10,000 $ - - $ - - $ - 44,101 $ 0 $ 48,079 $ 65 $ 48,149 Net loss - $ - - $ - - - - - - $ - $ - $ (326 ) $ (326 ) - - - - - - - - 65,357 1 10,694 - 10,695 Issuance of 6,407 shares of common stock upon exercise of underwriters’ over- allotment option and exercise of 2,430,000 Class A warrants (Note 7(a)) - - - - - - - - 6,407 - 898 - 898 Issuance of common stock following exercise of 4,156,000 Class A warrants and 2,500,000 prefunded warrants (Note 7(a)) - - - - - - - - 33,280 - 3,143 - 3,143 Issuance of Series D Preferred Stock (Note 7(c)) - - - - 25,000 - - - - - 17,600 - 17,600 Compensation cost under the Equity Incentive Plan (Note 7(c)) - - - - - - - - - - 568 - 568 Dividends declared ($10 per share of common stock and Class A warrant) (Note 7(b)) - - - - - - - - - - (1,767 ) (448 ) (2,215 ) Dividends declared and paid ($2 per share of common stock and Class A warrant) (Note 7(b)) - - - - - - - - - - - (886 ) (886 ) - - - - (15,828 ) - - - 360,055 4 130 (134 ) - Dividends on Series D Preferred Stock (Note 7(c)) - - - - - - - - - - - (117 ) (117 ) Dividends on Series C Preferred Stock (Note 7(c)) - - - - - - - - - - (475 ) (475 ) (950 ) BALANCE, December 31, 2022 500,000 $ 5 10,000 $ - 9,172 $ - - $ - 509,200 $ 5 $ 78,870 $ (2,321 ) $ 76,559 Net loss - $ - - $ - - $ - - $ - - $ - $ - $ (1,977 ) $ (1,977 ) Issuance of Series D Preferred Stock (Notes 3(c) and 7(c)) - - - - 13,157 - - - - - 10,000 - 10,000 Issuance of 15,000,000 units (comprising from 615,000 shares of common stock, 2,700,000 prefunded warrants and 15,000,000 Class B warrants) at primary offering, net of issuance costs (the “February 2023 Registered Direct Offering”) (Note 7(a)) - - - - - - - - 615,000 6 6,693 - 6,699 - - - - - - - - 135,000 1 26 - 27 Issuance of Series E Preferred Stock (Notes 3(d) and 7(c)) - - - - - - 1,200 - - - 35 - 35 Retirement of fractional common shares in June reverse stock split (Note 7(a)) - - - - - - - - (65 ) - - - - - - (9,793 ) - - - - - 3,649,474 36 2,513 (2,549 ) - Series D Preferred Stock redemption and issuance of common stock (Note 7(c)) - - - - (8,591 ) - - - 1,977,491 20 134 (154 ) - - - - - - - - - 562,501 6 1,276 0 1,282 Issuance of restricted Series C Preferred Stock and compensation cost under the Equity Incentive Plan (Note 7(c)) - - 5,314 - - - - - - - 1,893 - 1,893 Dividends declared and paid on Series D Preferred Stock (Note 7(c)) - - - - - - - - - - (255 ) (713 ) (968 ) Dividends declared on Series C Preferred Stock (Note 7(c)) - - - - - - - - - - (685 ) (306 ) (991 ) BALANCE, December 31, 2023 500,000 $ 5 5,521 $ - 13,738 $ - 1,200 - 7,448,601 $ 74 $ 100,500 $ (8,020 ) $ 92,559 2023 2022 2021 Cash Flows provided by Operating Activities: Net (loss)/income $ (1,977 ) $ (326 ) $ 134 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization of deferred charges (Note 5) 7,670 4,896 354 Compensation cost on restricted stock awards (Note 7(c)) 1,893 568 - Finance costs (Note 7(b)) 909 - - Changes in fair value of warrants’ liability (Note 7(b)) (6,222 ) - - Gain from equity method investment (Note 4) (2 ) - - (Increase) / Decrease in: Accounts receivable, trade, net 1,289 (3,441 ) 24 Due from a related party 5 65 (70 ) Inventories 47 (148 ) 23 Prepaid expenses and other assets, net 231 (666 ) (460 ) Insurance claims (1,058 ) - - Deferred charges - 152 (152 ) Increase / (Decrease) in: Accounts payable, trade and other 124 18 263 Due to related parties 64 351 59 Accrued liabilities (256 ) 842 312 Unearned revenue 25 146 228 Dry-dock costs (1,927 ) (944 ) - Net cash provided by Operating Activities $ 815 $ 1,513 $ 715 Cash Flows used in Investing Activities: Payments for vessel improvements and vessel acquisitions (Note 5) (4,368 ) (5,094 ) (42 ) Payment for equity method investment (Note 4) (1,643 ) - - Net cash used in Investing Activities $ (6,011 ) $ (5,094 ) $ (42 ) Cash Flows provided by Financing Activities: Proceeds from Spin-Off (Note 3(c)) - - 1,000 Proceeds from issuance of units and warrants (Note 7(a)) 15,123 16,195 - Proceeds from exercise of prefunded warrants (Note 7(a)) 27 - - Proceeds from issuance of Series E Preferred Stock (Note 3(d) and 7(c)) 35 - - Payments of equity issuance and financing costs (Note 7(a)) (1,513 ) (1,835 ) - Payments of dividends on common stockholders and Class A warrant holders (Note 7(a)) - (3,101 ) - Payments of dividends on Series C Preferred Stock (Note 7(c)) (1,121 ) (780 ) - Payments of dividends on Series D Preferred Stock (Note 7(c)) (968 ) (117 ) - Net cash provided by Financing Activities $ 11,583 $ 10,362 $ 1,000 Net increase in cash and cash equivalents $ 6,387 $ 6,781 $ 1,673 Cash and cash equivalents at beginning of the year/period 8,454 1,673 - Cash and cash equivalents at end of the year/period $ 14,841 $ 8,454 $ 1,673 Series C Preferred Stock dividends declared, not paid (Note 7(c)) $ (110 ) $ (240 ) $ - Deemed dividend on Series C Preferred Stock upon issuance of common stock (Note 7(c)) (2,549 ) - - Deemed dividend on Series D Preferred Stock upon issuance of common stock (Note 7(c)) (154 ) (134 ) - Non-cash consideration for vessel acquisition through the issuance of Series D Preferred Stock (Note 7(c)) (10,000 ) (17,600 ) - Alternative cashless exercise of private placement warrants (Note 7(b)) 1,282 - - Issuance of common stock and preferred stock in exchange for entities’ acquisition (Note 3(c)) $ - $ - $ 47,084 F-5(Expressed in thousands of U.S. Dollars – except for share and per share data)The accompanying notes are an integral part of these consolidated financial statements.F-6OCEANPAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2021Company"Company”, or "OceanPal"“OceanPal”, or “OP”), and its wholly-ownedwholly owned subsidiaries (collectively, the “Company”). OP was incorporated by Diana Shipping Inc. (“Diana Shipping” or “DSI”) on April 15, 2021, under the laws of the Republic of the Marshall Islands, having a share capital of 500 shares, par value $0.01 per share, issued to DSI (Note 3 (c)). In November 2021, the Company’s articles of incorporation and bylaws were amended. Under the amended articles of incorporation, the Company’s authorized share capital increased from 500 common shares to 1,000,000,000 common stock at par value $0.01 and 100,000,000 preferred stock at par value $0.01.3three of DSI’s vessel owning subsidiaries together with working capital in exchange of common and preferred stock to DSI’s stockholders and DSI, and its’ shareholdersrespectively (the “Spin-Off”) (Note 3 (c)3(c)). On November 29, 2021, the registration statement was declared effective. On November 30, 2021, OP began "regular way" tradingUpon Spin-Off consummation, the Company’s articles of incorporation and bylaws were amended. Under the amended articles of incorporation, the Company’s authorized share capital increased from 500 to one billion shares of common stock at par value $0.01 and 100,000,000 preferred stock at par value $0.01. In June 2023, the Company’s articles of incorporation and bylaws were further amended.GlobalCapital Market under the ticker symbol “OP”.wholly-ownedwholly owned subsidiary. TheAs of December 31, 2023, the Company iswas the sole owner of all outstanding shares of the following subsidiaries:●Cypres Enterprises Corp., a company incorporated in the Republic of Panama on September 7, 2000, owner of the 2004 built Panamax dry bulk carrier Protefs,●Darien Compania Armadora S.A., a company incorporated in the Republic of Panama on December 22, 1993, owner of the 2005 built Panamax dry bulk carrier Calipso, and●Marfort Navigation Company Limited, a company incorporated in the Republic of Cyprus on August 10, 2007, owner of the 2005 built Capesize dry bulk carrier Salt Lake City.Financial Statements presentationThe financial statementsCompany have been presentedyears ended December 31, 2023 and 2022 and for the period from inception (April 15, 2021) through December 31, 2021. They include2021accounts of OceanPal Inc.ongoing public health concerns from inception date April 15, 2021the COVID-19 pandemic continue to unfold. Additionally, the ongoing conflict between Russia and the accountsUkraine, has disrupted supply chains and caused instability in the energy markets and the global economy, which have experienced significant volatility. In particular, the conflict in Ukraine and related sanctions measures imposed against Russia has and is disrupting energy production and trade patterns, including shipping in the Black Sea and elsewhere, and has also impacted the price of certain dry bulk goods, such as grain, as well as energy and fuel prices. Notably, various jurisdictions have imposed sanctions against Russia directly targeting the maritime transport of goods originating from Russia, such as of oil products and agricultural commodities such as potash. Further, on October 7, 2023, an ongoing armed conflict between Israel and the Palestinian militant group Hamas, which the United States and the European Union classify as a terrorist organization, has been taking place in and around the Gaza Strip, and there has been a notable uptick in hostilities in the Middle East, including reports of vessel hijacking incidents and missile attacks on vessels from threat actors in the Gulf of Aden and the Red Sea. To date, no apparent consequences have been identified on the Company’s business, or counterparties, by COVID-19 or the armed conflicts in Ukraine and the Gaza Strip and their implications. None of the Company’s wholly-owned subsidiaries from November 30, 2021 upon the Spin-Off consummation and acquisition of the 3 ship-owning subsidiariescontracts have been affected by the Company. No comparatives are presented, as the Spin-Off has been accounted for as a nonmonetary transfer of assets rather than a spin-off of a business.The outbreak of the COVID-19 virus has had a negative effect on the global economyevents in Ukraine and has adversely impacted the international shipping industry into which the Company operates. Gaza.to whichof the repercussions of the ongoing COVID-19 global pandemic and/or the Russo-Ukrainian and Israel-Hamas armed conflicts, and/or other ongoing hostilities occurring in the Middle East, including in the Gulf of Aden and the Red Sea, may have either a direct or indirect impact on the industry and on the Company’s business andwhich is difficult to be predicted, insofar as it is possible that in the future third parties with whom the Company has or will have contracts that may be impacted by such events, i.e. current or future sanctions’ measures imposed in connection with the conflicts. The related financial reporting implications cannot be reasonably estimated at this time, although itthey could materially affect the Company’s business, results of operations and financial condition in the future. As of December 31, 2021, the impact of the outbreak of COVID-19 virus continues to unfold. As a result, manycertain of the Company’s estimates and assumptions carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company’s estimates may change in future periods. The overall impact of COVID-19 on the Company’s business, and the efficacy of any measures the Company takes in response to the challenges presented by the COVID-19 pandemic,these geopolitical events, will depend on how the outbreakthose events will further develops,develop, the duration and extent of the restrictive measures that are associated with the pandemicsuch events and their impact on global economy and trade, which is still uncertain. The Company is constantly monitoring the developing situation, as well as its charterers’ and other counterparties’ response to the severe market disruption via cost cutting and rationalizationcontinuously evaluates the effect on its operations. Also, the Company monitors inflation in the United States of America, Eurozone and other countries, including ongoing global prices pressures that are driving up energy and commodity prices in the wake of the armed conflicts in Ukraine and the Middle East, which continue to have a moderate effect on the Company’s operating expenses.F-7Consolidationconsolidation: The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of OceanPal Inc. and its wholly-owned subsidiaries. All significant 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"(“VIE”) for which the Company is deemed to be the primary beneficiary under the VIE model, or if the Company controls an entity through a majority of voting interest based on the voting interest model. The Company evaluates financial instruments, service contracts, and other arrangements to determine if any variable interests relating to an entity exist. For entities in which the Company has a variable interest, the Company determines if the entity is a VIE by considering whether the entity’s equity investment at risk is sufficient to finance its activities without additional subordinated financial support and whether the entity’s at-risk equity holders have the characteristics of a controlling financial interest. In performing the analysis of whether the Company is the primary beneficiary of a VIE, the Company considers whether it individually has the power to direct the activities of the VIE that most significantly affect the entity’s performance and also has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. If the Company holds a variable interest in an entity that previously was not a VIE, the Company reconsiders the initial determination of whether the entity has become a VIE if certain types of events (“reconsideration events”) occur. The Company has identified it has variable interests in RFSea Infrastructure II AS (“RFSea”) and that RFSea is a variable interest entity as of December 31, 2023, but is not the primary beneficiary of such entity (Note 4).The Company’s evaluation did not result in an identification of consolidated variable interest entities as of December 31, 2021.Estimates: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.Comprehensive Income comprehensive (loss)/ (Loss):income: The Company has no other comprehensive income/(loss)/income and accordingly comprehensive (loss)/income equals net (loss)/income for the periodperiods presented.Currency Translation: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 statementstatements of comprehensive (loss)/income.Cash Equivalents:cash equivalents: The Company considers highly liquid investments such as time deposits, certificates of deposit and their equivalents with an original maturity of up to about three months to be cash equivalents.Receivable, Trade: receivable, trade, net:The amount shown as accounts receivable, trade, net at each balance sheet date, includes receivables from charterers for hire from lease agreements, net of provisionsallowance for doubtful accounts related to expected uncollectible accounts receivable, if any. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposesthe purpose of determining the appropriate provisionallowance for doubtful accounts. The Company assessed its accounts receivable, trade and its credit risk relating to its charterers, followingalso considering the outbreak of the COVID-19global pandemic and geopolitical events and the effect that thisthese events could have on its accounts. NaN provisionThe Company recognizes allowance for doubtful accounts was establishedderiving from the collectability assessment as direct reduction to lease income, which for 2023, 2022 and 2021 amounted to $33, $15, and nil, respectively. The Company does not recognize interest income on trade receivables as all balances are usually settled within a year. The Company classifies accounts receivable, trade, net from charterers in dispute within “Prepaid expenses and other assets, net” in the accompanying consolidated balance sheets (Note 6).2021.Amounts removed from inventory are also determined by the first in first out method. Inventories may also consist of bunkers when on the balance sheet date a vessel is without employment, or 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.F-8OCEANPAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2021(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)atof the balance sheet date, vessels are stated at cost less accumulated depreciation expense and impairment charge, if any.Long-Lived Assets: long-lived assets:Long-lived assets are reviewed for impairment whenever events or changes in circumstances (such as market conditions, obsolesce or damage to the asset, potential sales and other business plans) indicate that the carrying amount of an asset may not be recoverable. When the estimate of undiscounted projected net operating cash flows, excluding interest charges, expected to be generated by the use of an asset over its remaining useful life and its eventual disposition is less than its carrying amount plus unamortized dry-docking costs, the Company evaluates the asset for an impairment loss. Measurement of the impairment loss is based on the fair value of the asset, determined mainlyprimarily by third party valuations.For vessels,valuations The bulker sector has recently experienced decreased charter rates and decreased vessel market values, which are conditions that the Company calculatesconsiders as indicators of a potential impairment. In developing estimates of future undiscounted projected net operating cash flows, by considering the historicalCompany makes assumptions and estimatedestimates about the vessels’ future performance, and utilization with the significant assumptionassumptions being related to future charter rates for the unfixed days using the most recent 10 year average of historical 1 year time charter rates available for each type of vessel over the remaining estimated life of each vessel, net of commissions.and future fleet utilization rates. Other assumptions used in developing estimates of future undiscounted cash flow areare: charter rates calculated for the fixed days using the fixed charter rate of each vessel from existing time charters, the expected outflows for scheduled vessels’ maintenance;maintenance, vessel operating expenses; fleet utilization,expenses, estimated remaining useful life of each vessel, and the vessels’ residual value if sold for scrap. The assumptions used to develop estimates of future undiscounted projected net operating cash flows are based on historical trends as well as future expectations, employment prospects under the then current market conditions and a vessels’ age. In particular, for the unfixed days, the Company uses the most recent historical ten-year average market rates available for each type of vessel over the remaining estimated life of each vessel, as applicable, net of commissions. Historical ten-year average market rates are in line with the Company’s overall chartering strategy, and they reflect the full operating history of vessels of the same type and particulars with the Company’s operating fleet. In addition, effective fleet utilization is assumed to be 98%, which is additionally affected by the period(s) each vessel is expected to undergo her scheduled maintenance, assumptions in line with the Company’s historical performance and its expectations for future fleet utilization under its fleet employment strategy. This calculation is then compared with the vessels’ net book value plus unamortized dry-docking costs. The difference between the carrying amount of the vessel plus unamortized dry-docking costs and their fair value, if any, is recognized in the Company’s accounts as impairment loss. NaNNo impairment loss was identified or recorded in the years ended December 31, 2023 and 2022 and for the period from inception (April 15, 2021) through December 31, 2021.j)l) Vessel Depreciation: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. In 2023, the Company identified that the estimated scrap rate used for the determination of annual depreciation was not in line with the current average historical rate and as such, the estimated scrap rate is revised (Note 5). Management estimates the useful life of the Company’s vessels to be 25 years from the date of initial delivery from the shipyard. Second handSecondhand 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.k)m) Accounting for Dry-Docking Costsdry-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.l)Credit Riskcredit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash, and trade accounts receivable.receivable and amounts due to/from related parties. 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.m)Revenuesrevenues and Expenses:expenses: Revenues are generated from time charter agreements which contain a lease as they meet the criteria of a lease under ASC 842. Agreements with the same charterer are accounted for as separate agreements according to their specific terms and conditions. All agreements contain a minimum non-cancellable period and an extension period at the option of the charterer. Each lease term is assessed at the inception of that lease. Under a time charter agreement, the charterer pays a daily hire for the use of the vessel and reimburses the owner for hold cleanings, extra insurance premiums for navigating in restricted areas and damages caused by the charterers. The charterer pays to third parties port, canal and bunkers consumed during the term of the time charter agreement. Such costs are considered direct costs and are not recorded as they are directly paid by charterers, unless they are for the account of the owner, in which case they are included in voyage expenses. The Company incurs voyage expenses such as commissions, bunkers (fuel oil and diesel oil), and port expenses relating to owners’ matters. When a vessel is delivered to a charterer,F-9OCEANPAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2021(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)resultresults when a vessel is redelivered by a charterer and delivered to the next charterer at different bunker prices, or quantities. For the years ended December 31, 2023 and 2022 and for the period from November 30, 2021inception (April 15, 2021) through December 31, 2021, the Company incurred loss, loss and gain on bunkers amounting to $186, $1,949, and $63 respectively, primarily resulting mainly from the difference in the value of bunkers paid by the Company when the vessel iswas redelivered to the Company from the charterer under the vessel’s previous time charter agreement and the value of bunkers sold by the Company when the vessel iswas delivered to a new charterer. This gain inor loss is included in “Voyage expenses” in the accompanying consolidated statementstatements of comprehensive (loss)/income. Under a time charter agreement, the owner pays for the operation and the maintenance of the vessel, including crew, insurance, spares and repairs, which are recognized in operating expenses. Revenues from time charter agreements providing for varying annual ratesvariable lease payments are accounted for as operating leases and thus recognized on a straight-line basis over the non-cancellable rental periods of such agreements, as the service is performed. Deferred revenue includes cash received prior to the balance sheet date for which all criteria to recognize as revenue have not been met. The Company, as lessor, has elected to apply the practical expedient not to allocate the consideration in the agreement to the separate lease and non-lease components (operation and maintenance of the vessel) as their timing and pattern of transfer to the charterer, as the lessee, are the same and the lease component, if accounted for separately, would be classified as an operating lease.lease, as the criteria of the paragraphs ASC 842-10-15-42A through 42B are met. Additionally, the lease component is considered the predominant component as the Company has assessed that more value is ascribed to the vessel rather than to the services provided under the time charter contracts. Also, the Company elected to apply a package of practical expedients which does not require the Company, as a lessor, to reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) whether initial direct costs for any expired or existing leases would qualify for capitalization under ASC 842. Apart from the agreed hire rate, the owner may be entitled to an additional income, such as ballast bonus, which is considered as reimbursement of owner’s expenses and is recognized together with the lease component over the duration of the charter. The Company has made an accounting policy election to recognize the related ballast costs incurred, mainly consisting of bunkers’ consumption, over the period between the charter party date or the prior redelivery date (whichever is latest) and the delivery date to the charterer, as contract fulfillment costs are amortized over the charter period in accordance with ASC 340-40. Commissions paid to brokers are deferred and amortized over the related charter period to the extent revenue has been deferred, since commissions are earned as the Company’s revenues are earned. Unearned revenue includes cash received prior to the balance sheet date for which all criteria to recognize revenue have not been met. The majority of the vessels are employed on short to medium-term time charter contracts, which provides flexibility in responding to market developments. The Company monitors developments in the dry bulk shipping industry on a regular basis and adjusts the charter hire periods for the vessels according to prevailing market conditions.n)Maintenance:maintenance: All repair and maintenance expenses including underwater inspection expenses are expensed in the year incurred. Such costs are included in vessel“Vessel operating expensesexpenses” in the accompanying consolidated statementstatements of comprehensive (loss)/income./ (loss) per Common Share:common share: Basic (loss)/earnings / (loss) per common share are computed by dividing net (loss)/income / (loss) available to common stockholders by the weighted average number of common shares outstanding during the year. Unvested preferred shares granted under the Company’s equity incentive plan, and Class A warrants are entitled to receive dividends which are not refundable, and therefore are considered participating securities for basic earnings per share calculation purposes, using the two-class method. The two-class method is an earnings allocation method under which EPS is calculated for each class of common stock and participating security considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period. Under this method, net (loss)/income is reduced by the amount of dividends declared or accumulated in the current period for common stockholders and participating security holders. The remaining earnings or “undistributed earnings” are allocated between common stock and participating securities to the extent that each security may share in earnings as if all of the earnings for the period had been distributed. Once calculated, the (loss)/earnings per common share is computed by dividing the net (loss)/income attributable to common stockholders by the weighted average number of common shares outstanding during each year presented. Diluted (loss)/earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised.exercised or converted at the beginning of the periods presented, or issuance date, if later. Diluted (loss)/earnings attributable to common stockholders per common share is computed by dividing the net (loss)/income attributable to common stockholders by the weighted average number of common shares outstanding plus the dilutive effect of warrants and shares issued and outstanding under the Company’s equity incentive plan during the applicable periods and the dilutive effect of convertible securities during the applicable periods as well. The treasury stock method is used to compute the dilutive effect of warrants and shares issued under the Company’s equity incentive plan. The if converted method is used to compute the dilutive effect of shares which could be issued upon conversion of the convertible preferred stock. The two-class method is used for diluted (loss)/earnings per common share when such is the most dilutive method, considering anti – dilution sequencing as per ASC 260. For purposes of the if-convertedif converted calculation, the conversion price of convertible preferred convertible stock is based on the end of the period market price when thefixed conversion price is fixed or on the average market price when the number of shares that may be issued is variable.p)Segmental Reporting:r) Segment reporting: The Company engages in the operation of dry-bulk vessels which has been identified as 1one reportable segment. The operation of the vessels is the main source of revenue generation, the services provided by the vessels are similar and they all operate under the same economic environment. Additionally, the vessels do not operate in specific geographic areas, as they trade worldwide; they do not trade in specific trade routes, as their trading (route and cargo) is dictated by the charterers; and the Company does not evaluate the operating results for each type of dry bulk vessel (i.e., Panamax or Capesize) for the purpose of making decisions about allocating resources and assessing performance.q)Value Measurementsvalue measurements: The Company follows the provisions of ASC 820 "Fair“Fair Value Measurements and Disclosures"Disclosures”, which defines fair value and provides guidance for using fair value to measure assets, liabilities and liabilities.equity instruments classified in stockholders’ equity. The guidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid to transfer a liability or the consideration to transfer equity interests issued in an orderly transaction between market participants in the market in which the reporting entity transacts. The fair value measurement assumes that an instrument classified in stockholders’ equity is transferred to a market participant at the measurement date. The transfer of an instrument classified in stockholders’ equity assumes that the instrument would remain outstanding, and the market participant takes on the rights and responsibilities associated with the instrument. In accordance with the requirements of accounting guidance relating to Fair Value Measurements, the Company classifies and discloses its assets, liabilities and liabilitiesequity instruments classified in stockholders’ equity carried at the fair value in one of the following categories: Level 1: Quoted market prices in active markets for identical assets or liabilities;liabilities or equity instruments; Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data; Level 3: Unobservable inputs that are not corroborated by market data.Based Payments:based payments: The Company issues restricted share awards which are measured at fair value on 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). NaNNo 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 awardF-10OCEANPAL INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2021(Expressed in thousands of U.S. Dollars – except share, per share data, unless otherwise stated)s)u) Going concern: The Company’s policy is in accordance with ASU No. 2014-15, "PresentationCompany follows the provisions of Financial Statements -ASC 205-40 “Presentation of financial statements – Going Concern"Concern”, issued in August 2014 by the FASB. ASU 2014-15which 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. Management evaluates, at each reporting period, whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date the financial statements are issued.t)v) Financial Instruments,instruments, credit losses: At each reporting date, the Company evaluates its financial assets individually for credit losses and presents such assets in the net amount expected to be collected on such financial asset. When financial assets present similar risk characteristics, these are evaluated on a collective basis. When developing an estimate of expected credit losses the Company considers available information relevant to assessing the collectability of cash flows such as internal information, past events, current conditions and reasonable and supportable forecasts. NaNNo provision for credit losses were recorded in 2023, 2022 and the period from inception (April 15, 2021) through December 31, 2021.u)w) Evaluation of Nonmonetary Transactions:nonmonetary transactions: When the Company enters into a nonmonetary transaction as defined broadly under ASC 845, it determines whether the transaction is a contribution of an asset or a business by assessing the definition of a business under ASC 805 and whether the transaction is pro-rata. A transaction is considered pro rata if each owner receives an ownership interest in the transferee in proportion to its existing ownership interest in the transferor (even if the transferor retains an ownership interest in the transferee). In accordance with FASB Topic 805 Business Combinations: Clarifying the Definition of a Business, if substantially all of the fair value of the gross assets acquired in an acquisition transaction are concentrated in a single identifiable asset or group of similar identifiable assets, then the set is not a business. To be considered a business, a set must include an input and a substantive process that together significantly contributes to the ability to create an output. All assets contributed under nonmonetary transactions that do not meet the definition of a business, and include pro rata distributions, are measured at their fair values on the transaction date in accordance with ASC 845, if the fair value is objectively measurable and clearly realizable in an outright sale at or near the distribution.New Accounting Pronouncements - Not Yet AdoptedMarch 2020,its assessment, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): FacilitationCompany analyzes key features of these financial instruments to determine whether they are more akin to equity or to debt. It then identifies any embedded features in those instruments and examines whether the Effectsidentified embedded features fall under the definition of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. ASU 2020-04 applies to contracts that reference LIBOR or another reference rate expected to be terminated because of reference rate reform. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, upderivative according to the provisions of ASC 815 or whether those features require bifurcation (other than those with de minimis value) or affect classification in permanent equity. Financial instruments meeting the classification of liability are initially measured at fair value and are subsequently remeasured at each balance sheet date thatwith the financialoffsetting adjustments recorded within the consolidated statements of comprehensive (loss)/income. Upon settlement or termination, instruments classified as liabilities at fair value are availablemarked to be issued. Once elected for a Topic or an Industry Subtopic,their fair value at the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. An entity may elect to applysettlement date and then the amendments in this Update to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. An entity may elect certain optional expedients for hedging relationships that exist as of December 31, 2022 and maintain those optional expedients through the end of the hedging relationship. ASU 2020-04 can be adopted as of March 12, 2020.liability gets settled. The Company has assessedvalues its instruments classified as liabilities using either the impact of this new accounting guidance andBlack-Scholes option pricing model or other acceptable valuation models, including the adoption of this ASU does not have a material impact on its consolidated financial statements and related disclosures.In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force)binominal option pricing model (Note 7). The ASU addresses the diversity in practice in an issuer’s accounting forF-11modificationsexchangesconvertible preferred stock for issuance of freestanding equity-classified written call options (e.g.shares of common stock: In the case of conversion of preferred stock to common stock, with the conversion feature assessed by the Company at first using the provisions of ASC 480-10-25-14 and then determined as requiring evaluation as a redemption feature (Note 2(x)), warrants)the Company follows redemption accounting. A redemption of preferred stock according to its original terms may be paid using cash, other instruments issued by the issuer or other assets (individually and collectively, the consideration) and may include a premium or discount. As per ASC 260-10-S99-2, a premium paid on redemption represents a return similar to a dividend to/from the preferred holder. In particular, when the Company determines that remainon the redemption date there is a difference in the carrying value of the preferred stock, as compared to the fair value of the common shares issued, that value represents a dividend to/from the preferred holders, which should be deducted from (if a premium) or added to (if a discount) the net (loss)/ income to arrive at the net (loss)/income available to common stockholders (Note 8).classified after modificationoffering are deferred and offset against the proceeds of the offering within additional paid-in capital, unless the offering is aborted, in which case they are written-off and charged to net (loss)/income. Deferred offering expenses in relation to ongoing offerings that have not materialized as of December 31, 2023 and 2022, amounted to $59 and $376, respectively, and are included in “Deferred charges, net” in the accompanying consolidated balance sheets.exchange. Underpresentation requirements of a variety of Topics in the guidance,Codification. The effective date for each amendment of the ASU 2023-06 will be, the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in ASU 2023-06 should be applied prospectively. The Company has assessed that the adoption of this standard will not have any impact on the Company’s consolidated financial statements and related disclosures.issuer determinesexpense that is: a) Significant to the accountingsegment, b) Regularly provided to or easily computed from information regularly provided to the chief operating decision maker, and c) Included in the reported measure of segment profit or loss. The additional disclosure for the modificationsegmented reporting is intended to provide additional information to financial statement users as now expenses such as direct expenses, shared expenses, allocated corporate overhead, or exchange based on whether the transaction was donesignificant interest expense need to issue equity, to issue or modify debt orbe disaggregated and reported separately for other reasons. Theeach segment. ASU 2023-07 also requires that all segment-related disclosures required by FASB Topic 280 (Segment Reporting) be made also by entities that have a single reportable segment. ASU 2023-07 is effective for allpublic entities for fiscal years beginning after December 15, 2021, including2023, and interim periods within thosein fiscal years. Earlyyears beginning after December 15, 2024, and early adoption is permitted, but entities need topermitted. Upon adoption, a public entity will apply the guidanceASU as of the beginning of the fiscal year that includes the interimearliest period in which they choose to early adopt the guidance. The guidance is applied prospectively to all modifications or exchanges that occur on or after the date of adoption.presented. The Company has asessed the impact of this new accounting guidance andassessed that the adoption of this ASU doesstandard will not have a materialany impact on itsthe Company’s consolidated financial statements and related disclosures.In July 2021, the FASB issued ASU No. 2021-05 Leases (Topic 842): Lessors-Certain LeasesVariable Lease Payments. The ASU amends the lessor lease classification guidance in ASC 842 for leases that include any amount of variable lease payments that are not based on an index or rate. If such a lease meets the criteria in ASC 842-10-25-2 through 25-3 for classification as either a sales-type or direct financing lease, and application of the sales-type or direct financing lease recognition guidance would result in recognition of a selling loss, then the amendments require the lessor to classify the lease as an operating lease. For public business entities that have adopted ASC 842 as of July 19, 2021, the amendments in ASU 2021-05 are effective for fiscal years beginning after December 15, 2021 and for interim periods within those fiscal years. The Company has assessed the impact of this new accounting guidance and the adoption of this ASU does not have a material impact on its consolidated financial statements and related disclosures.(a) Diana Wilhelmsen Management Limited, or DWM: 3.Transactions with related partiesa)Diana Wilhelmsen Management Limited, or DWM:On November 29, 2021, the Company appointed DWM to provide management services tofor the vessels of the Company’s fleet pursuant to a management agreement, under which each of the vessel-owning subsidiaries pays, for each vessel, an aggregate of 1.25% on hire and on freight of the vessel’s gross income per month, plus either (i) $20,000 for eachper month that the vessel is employed or available for employment or (ii) $10,000 per month for each month that the vessel is laid-up and not available for employment for at least 15 calendar days ofduring such month. Under the addenda on the management agreements, dated March 1, 2022, the fixed monthly management fee was amended to (i) $18,500 per month that the vessel is employed or available for employment or (ii) $9,250 per month for each month that the vessel is laid-up and not available for employment for at least 15 calendar days during such month. The management agreementagreements, as amended, may be terminated by either party on three months’ prior written notice. DWM is deemed a related party to the Company on the basis that certain members of the Company’s management and board of directors also act as members of the board of directors’ membersdirectors at DWM. Management fees paid tocharged by DWM for the years ended December 31, 2023 and 2022 and for the period from November 30, 2021 toinception (April 15, 2021) through December 31, 2021, amounted to $1,319, $974 and $79, respectively. Of the management fees charged by DWM for the years ended December 31, 2023 and 2022 and for the period from inception (April 15, 2021) through December 31, 2021, $1,086, $737 and $62, respectively, are included in “Management fees to related parties” and $233, $237, and $17, respectively, are included in “Voyage expenses”, in the accompanying consolidated statementstatements of comprehensive income.(loss)/income. As atof December 31, 2021 there was an amount2023 and 2022, amounts of $6$12 and $5, were due to and due from DWM, included in “Due to related parties” and “Due from a related party”, respectively, in the accompanying consolidated balance sheet.(b) Steamship Shipbroking Enterprises Inc. or Steamship: an administrativea brokerage services agreement, and a brokeragean administrative services agreement. Under each vessel-owning subsidiary’s insurance management agreement for insurance-related services with Steamship, the vessel-owning subsidiary pays Steamship a fixed fee of either (i) $500 per month for each month that the vessel is employed or is available for employment or (ii) $250 per month for each month that the vessel is laid-up and not available for employment for at least 15 calendar days ofduring such month. These insurance management agreements may be terminated by either party on three months’ prior written notice. Under the brokerage services agreement, the Company pays Steamship a lumpsum commission and 2.5% on the hire agreed per charter party for each vessel, provided, however, that the Company and Steamship may agree to commissions on a percentage basis for specific deals. Up to December 31, 2022, as per the terms of the brokerage services agreement, the Company paid Steamship a fixed monthly fee of $95,000, which, with effect from January 1, 2023, was increased to $150,000 subject to the provisions of a new brokerage services agreement entered into with Steamship on March 7, 2023, the remaining terms of which remained unaltered. The new brokerage services agreement has an initial term of twelve months that commenced on January 1, 2023, and is automatically thereafter renewed for further periods of one calendar year, unless terminated by either party on three months’ prior written notice. Under the administrative services agreement entered into between the Company and Steamship, the Company pays Steamship a monthly fee of $10,000. ThisThe administrative services agreement may be terminated by either party on 30 days’ prior written notice. Under the brokerageThe administrative services agreement had an initial term of twelve months with effect from November 29, 2021, and an automatic further twelve-month renewal term. On November 29, 2023, the Company paysentered into a new administrative services agreement with Steamship a fixed monthly fee of $95,000, plus 2.5% on substantially the hire agreed per charter party for each vessel plus commission onsame terms as the sale of vessels. This agreement may be terminated by either party at any time by prior written notice.expired agreement. Steamship is deemed a related party to the Company on the basis that members of the Company’s management and board of directors also act as board of directors’ members at Steamship.Steamship and since January 2023, Steamship is controlled by the Company’s Chairperson. For the years ended December 31, 2023 and 2022 and for the period from November 30, 2021 toinception (April 15, 2021) through December 31, 2021, insurance and administrative management fees amounted to $150, $141 and $12, respectively, and are included in “Management fees to related parties” in the accompanying consolidated statementstatements of comprehensive income.(loss)/income. For the sameyears ended December 31, 2023 and 2022 and for the period from inception (April 15, 2021) through December 31, 2021, aggregate brokerage fees amounted to $2,266, $1,614 and $178, respectively. Of the brokerage fees charged by Steamship for the years ended December 31, 2023 and 2022 and for the period from inception (April 15, 2021) through December 31, 2021, $1,800, $1,140 and $145, respectively, are included in “General and administrative expenses”, whereas, $466, $474 and $33, respectively, are included in “Voyage Expenses”expenses” in the accompanying consolidated statementstatements of comprehensive income.(loss)/income. During 2023, in connection with the Company’s chemical tankers’ investment (Note 4), Steamship charged the Company one off brokerage fee amounting to $150 that is included in “Equity method investment” in the accompanying 2023 consolidated balance sheet.2021,2023 and 2022, there was an amount of $33$462 and $410, respectively, due to Steamship, included in “Due to related parties” in the accompanying consolidated balance sheet.sheets, regarding outstanding fees for the services provided under the agreements discussed above and also resulting from amounts paid by Steamship on behalf of the Company.F-12(c) Diana Shipping Inc., or DSI: c)Diana Shipping Inc., or DSI:Spin-Off: On November 29, 2021, the Company completed its Spin-Off from DSI. In connection with the Spin-Off, DSI contributed to the Company the 3 vessel-owning subsidiariesthree ship-owning companies (Cypres, Darien and Marfort discussed in Note 1 above,1) together with $1,000 in working capital, whereas as of the same date, shareholdersstockholders of DSI received one of the Company’s common shares for every 10200 shares of DSI’s common stock owned at the close of business on November 3, 2021. As such, the Company distributed all of its then issued and outstanding common stock2021 (i.e., 8,820,240 shares (Note 6(a)) to DSI’s shareholders. Any fractional shares were rounded up to the nearest whole share. Furthermore, Diana Shipping Inc.44,101 shares). DSI also received 500,000 of the Company’s Series B Preferred stock (the "SeriesStock (the “Series B Preferred Stock"Stock”) (Note 6(c)) and 10,000 of the Company’s Series C Convertible Preferred Stock (the "Series“Series C Preferred Stock"Stock”) (Note 6(d)7(c)). Series B Preferred Stock entitles Diana Shipping Inc. the right of 2,000 votes on all matters on which the Company’s shareholders are entitled to vote of up to 34% of the total number of votes entitled to vote on such matter, provided further that the aggregate voting power of any holder of Series B Preferred Stock, together with any affiliate of such holder, would not exceed 49% of the total number of votes that may be cast on any matter submitted to a vote of the Company's shareholders. Series B preferred Stock has no economic rights. Series C preferred Stock does not have voting rights unless related to amendments of the Articles of Incorporation that adversely alter the preference, powers or rights of the Series C Preferred Stock or to issue parity stock or create or issue senior stock. Series C Preferred Stock, has a cumulative preferred dividend accruing at the rate of 8.0% per annum which may be paid in cash or, at the Company’s election, in kind and will contain a liquidation preference equal to its’ stated value of $1,000 and will be convertible into common shares at DSI’s option commencing upon the first anniversary of the original issue date (i.e. November 29, 2022), at a conversion price equal to the lesser of $6.50 and the 10-trading day trailing VWAP of the Company’s common shares, subject to certain adjustments. DSI willdid not distribute the Series B Preferred Stock or the Series C Preferred Stock to its shareholdersstockholders in connection with the Spin-Off, and the Series B and Series C Preferred Stock are non-transferable. The transaction was approved unanimously by the Board of Directors.Diana Shipping Inc.,DSI, dated November 8, 2021, the Company has been granted a right of first refusal over 6six identified drybulk carriers owned by DSI, effective as of the consummation of the Spin-Off. PursuantAccording to this right of first refusal, the Company has been granted the right, but not the obligation, to purchase 1one or all of the 6six identified vessels when and if DSI determines to sell the vessels at fair market value at the time of sale. As of December 31, 2023, following the Company’s refusal to acquire two of the identified vessels and the acquisition of the M/V Melia in February 2023 and the M/V Baltimore in September 2022 (Note 5), two out of six identified vessels remained available for purchase by the Company pursuant to the exercise of the right of first refusal under the agreement entered between the Company and DSI.offor the 3three vessels contributed to the Company on November 29, 2021, was determined through Level 2 inputs of the fair value hierarchy by taking into consideration third party valuations which were based on the last done deals of salesales of vessels with similar characteristics, such as type, size and age at the specific dates.dates (Note 5). The fair value of other assets contributed to the Company, mainly comprising from lubricating oils and bunkers, amounting to $1,044 in aggregate, approximated their respective carrying value. The Series B preferredPreferred Stock which has 0no economic interest iswas recorded at par, amounting to $5 and the Series C preferredPreferred Stock has been recorded at a fair value of $7,570 determined based on valuation obtained by an independent third party for the purposes of the Spin-Off. Additionally, as of December 31, 2021, there was an amount of $70 due from Diana Shipping Inc., included in “Due from a related party” in the accompanying consolidated balance sheet, resulting from amounts paid or received by DSI on behalf of OceanPal up to the date of the contribution.F-134.Vessels, netVessels’ contributionVessel acquisitions and issuances of Series D Preferred Stock:On November 29, 2021, entities Cypres Enterprises Corp., Darien Compania Armadora S.A.,June 13, 2022 and Marfort NavigationFebruary 1, 2023, pursuant to the exercise of the right of first refusal discussed above, the Company, Limited, whose substantially all assets were vessels Protefs, Calipsothrough Darrit and Salt Lake City,Fiji, entered into separate Memoranda of Agreement with DSI, as amended, to acquire the Capesize M/V Baltimore and the Panamax M/V Melia, for purchase prices of $22,000 and $14,000, respectively. Of the agreed purchase price for each vessel, $4,400 for Baltimore and $4,000 for Melia was paid in cash upon signing of each Memorandum of Agreement and the remaining amounts of $17,600 and $10,000, respectively, were contributedpaid upon delivery of each vessel to the Company, on September 20, 2022 and February 8, 2023, respectively, in the form of 25,000 and 13,157 shares of the Company’s Series D Preferred Stock, respectively (Notes 5 and 7(c)). The vessels’ cost was accounted for at $22,000 and $14,000, respectively, pursuant to the provisions of ASC 360, being the fair value of the consideration that the Company contributed to acquire each vessel, including the fair value of the non-cash consideration. The Series D Preferred Stock has been recorded at a fair value of $17,600 and $10,000, respectively determined based on valuations obtained by Diana Shippingan independent third party for the purposes of the transactions (Note 7(c)). Each of the vessel acquisitions was approved by a committee of independent members of the Company’s Board of Directors.Spin-Offredemption of the Series C Preferred Stock was based on the 10-day trailing VWAP of the Company’s common stock, in accordance with the conversion mechanism prescribed in the Series C Preferred Stock statement of designations. As a result of this redemption, the 9,793 Series C preferred shares have been cancelled and retired and 207 Series C Preferred Stock of the Company remained in DSI’s possession. The Company’s valuation determined that the redemption on October 17, 2023 of 9,793 Series C Preferred Stock for the issuance of the above Company’s shares of common stock resulted in an excess value of the shares of common stock of $2,549 or $0.70 per common share, as compared to the carrying value of the Series C Preferred Stock redeemed (which have been recorded at inception at a fair value of $7,414 determined based on valuation obtained by an independent third party for the purposes of the Spin-Off), that was transferred to DSI on the measurement date (i.e. October 17, 2023), and thus this value represented a deemed dividend to DSI, that was deducted from the net loss to arrive at the net loss available to common stockholders (Note 3(c)8). The fair value of the common shares issued on the measurement date of $9,963 was determined through Level 1 inputs of the fair value hierarchy (quoted market price on the date of the redemption of the Series C Preferred Stock for issuance of common stock). As of December 31, 2023, and 2022, there was no amount due to or from DSI.(d) Issuance of Series E Preferred Stock: (e) Altair Travel Agency S.A. (“Altair”): Vessel Cost Accumulated Depreciation Net Book Value Balance, December 31, 2021 $ 46,082 $ (354 ) $ 45,728 -Vessel acquisitions 22,000 - 22,000 -Additions for improvements 694 - 694 - Depreciation for the year - (4,750 ) (4,750 ) Balance, December 31, 2022 $ 68,776 $ (5,104 ) $ 63,672 -Vessel acquisition 14,064 - 14,064 -Additions for improvements 304 - 304 - Depreciation for the year - (6,940 ) (6,940 ) Balance, December 31, 2023 $ 83,144 $ (12,044 ) $ 71,100 the period ended December 31, 2021,2023 and 2022, the additions to vessels’ cost amounted to $42.The amounts reflected$304 and $694, respectively.Vessels, netscrap rate estimateaccompanying consolidated balance sheet are analyzed as follows:5.Commitmentsvessels’ salvage value has reduced depreciation and net loss by approximately $917 and basic and diluted loss per share by approximately $0.28 and $0.27, respectively.a)supplementalsupplementary calls which are based on estimatescalculated as a percentage of premium incomethe net estimated total calls for each year and anticipatedafter deducting any applicable rebates, laid up returns and paid claims. Such estimates are adjusted each yearother deductions. A decision to levy supplementary calls is made by the Board of Directors of the P&I Association untilat any time during or after the closingend of the relevant policy year, which generally occurs within three years fromyear. There is no limit to the endnumber or amount of thesupplementary calls that can be levied in respect of a policy year. SupplementalSupplementary calls, if any, are expensedissued when they are announced and according to the period they relate to. The Company, isso far, has not been made aware of any supplementalsupplementary calls outstanding in respect of any policy year.b)The Company has certain outstanding amounts from disputes with twoAs at charterers for revenues recognized during the year ended December 31, 2021,2022, which in aggregate amounted to $236 as of December 31, 2023 and are included in Prepaid expenses and other assets, net, in the accompanying 2023 consolidated balance sheet. In connection with the respective open cases, the Company has estimated as of December 31, 2023, that loss contingencies of $19 may arise, and has further established aggregate allowances for doubtful accounts of $170, both included in “Other operating loss/(income)” in the accompanying 2023 consolidated statement of comprehensive loss.842 requirements.842. The minimum contractual gross chartercontracted revenues expected to be generated from fixed and(gross of charterers’ commissions), based on the existing commitments to non-cancelable time charter contracts existing as atof December 31, 20212023 and until their expiration dates, all falling within 2022 iswith the first semester of 2024, are estimated at $2,657.$4,038.6.Capital StockChanges$1,375 is expected to be due in Capital Accounts
the second quarter of 2025 (Note 4).a)Common Stock: As at April 15, 2021, the date of Company’s incorporation, the Company’s authorized share capital was 500 shares of common stock, par value $0.01 per share, issued to DSI. On November 29, 2021, the Company’s articles of incorporation were amended and restated. Under the Company’s amended and restated articles of incorporation, the Company’s authorized common stock consists of 1,000,000,000 shares of common stock, par value $0.01 per share, of which 8,820,240F-14(a) shares were issued and outstanding on November 29, 2021, immediately upon the Spin-Off consummation (Note 3(c)). As at December 31, 2021, the Company’s authorized common stock is 1,000,000,000 shares of common stock, of which 8,820,240 shares are issued and outstanding (all shares of common stock in registered form) (Note 10 (a)).b)PreferredCommon Stock: Under the Company’s amended and restated articles of incorporation, authorized preferred stock consists of 100,000,000 shares of preferred stock, par value $0.01 per share, of which (i) 1,000,000 shares are designated as Series A Participating Preferred Stock, NaN of which was issued and outstanding as of November 29, 2021, (ii) 500,000 shares are designated Series B Preferred Stock, all of which were issued and outstanding as of November 29, 2021, and (iii) 10,000 shares are designated Series C Preferred Stock, all of which were issued and outstanding as of November 29, 2021. All of the Company’s shares of preferred stock are in registered form. As at December 31, 2021, the Company’s authorized preferred stock consists of 100,000,000 shares of preferred stock, par value $0.01 per share, of which 1,000,000 are designated as Series A Participating Preferred Stock, 500,000 are designated as Series B Preferred Stock and 10,000 are designated as Series C Preferred Stock (Notes 3(c), 6(c) and 6(d)). As of December 31, 2021, there is 0 Series A Participating Preferred Stock issued and outstanding.c)Series B Preferred Stock to Diana Shipping Inc.: As at December 31, 2021, the Company had 500,000 Series B Preferred Stock issued and outstanding with par value $0.01 per share, issued to DSI. The Series B Preferred Stock votes with the common shares of the Company, and each share of Series B Preferred Stock entitles the holder thereof to 2,000 votes on all matters on which the Company’s shareholders are entitled to vote of up to 34% of the total number of votes entitled to be cast for all matters for which the Company’s shareholders are entitled to vote on, but with no economic rights. To the extent the aggregate voting power of any holder of Series B Preferred Stock, together with any affiliate of such holder, would exceed 49% of the total number of votes that may be cast on any matter submitted to a vote of the Company’s shareholders, the number of votes of the Series B Preferred Stock shall be automatically reduced so that such holder’s aggregate voting power, together with any affiliate of such holder, is not more than 49%. Furthermore, the Series B Preferred Stock has no dividend, distribution or liquidation rights and cannot be transferred without the consent of the Company except to the holder’s affiliates or successors.d)Series C Preferred Stock to Diana Shipping Inc.: As at December 31, 2021, the Company had 10,000 shares of Series C Preferred Stock issued and outstanding with par value $0.01 per share, at $1,000 per share with liquidation preference at $1,000. The Series C Preferred Stock has no voting rights except (1) in respect of amendments to the Articles of Incorporation which would adversely alter the preferences, powers or rights of the Series C Preferred Stock or (2) in the event that the Company proposes to issue any parity stock if the cumulative dividends payable on outstanding Series C Preferred Stock are in arrears or any senior stock. Also, holders of Series C preferred Stock, rank prior to (i) the holders of common shares, (ii) if issued, any Series A Participating Preferred Stock, and any Series B Preferred Stock and (iii) any other class or series of capital stock established after their original issuance date (i.e. November 29, 2021) with respect to dividends, distributions and payments upon liquidation. The Series C Preferred Stock has a cumulative preferred dividend accruing from the date of original issuance and are payable on the 15th day of January, April, July and October of each year at the dividend rate of 8.0% per annum, and is convertible into common shares at Diana Shipping’s option commencing upon the first anniversary of the original issue date, at a conversion price equal to the lesser of $6.50 and the 10-trading day trailing VWAP of the common shares, subject to certain adjustments or at any time after the issuance date in case of any fundamental change (i.e. liquidation, change of control, dissolution or winding up of the affairs of the Company). Diana Shipping, however, is prohibited from converting the Series C Preferred Stock into common shares to the extent that, as a result of such conversion, Diana Shipping (together with its affiliates) would beneficially own more than 49% of the total outstanding common shares of the Company. The Company in its assessment for the accounting of the Series C Preferred Stock has taken into consideration ASC 480 "Distinguishing liabilities from equity" and determined that the preferred shares should be classified as equity instead of liability. The Company further analyzed key features of the Series C Preferred Stock to determine whether it is more akin to equity or to debt and concluded that the Series C Preferred Stock is equity-like. In its assessment, the Company identified certain embedded features, examined whether these fall under the definition of a derivative according to ASC 815 applicableF-15(i) Receipt of Nasdaq Notices and Reverse Stock Splits: (ii) Equity Offerings: (b) guidance or whether certain of these features affected the classification. Derivative accounting was deemed inappropriate and thus no bifurcation of these features was performed. For 2021, dividendsWarrants(c) Preferred Stock (i) Series B Preferred Stock (ii) Series C preferred stock amounted to $69.Preferred Stock(iii) e)Series D Preferred Stock(iv) Incentive plan: On November 2, 2021, the Company’s Board of Directors has approved and the Company has as of November 29, 2021, adoptedSeries E Preferred Stock(v) Equity Incentive Plan for 1,000,000 common shares, NaN of which has been granted as of December 31, 2021. Under the Equity Incentive Plan and as amended, the Company’s employees, officers and directors are entitled to receive options to acquire the Company’s common stock. The Equity Incentive Plan is administered by the Compensation Committee Board of Directors or such other committee of the Board as may be designated by the Board. Under the terms of the Equity Incentive Plan, the Company’s Board of Directors is able to grant (a) non-qualified stock options, (b) stock appreciation rights, (c) restricted stock, (d) restricted stock units, (e) unrestricted stock, (f) other equity-based or equity-related awards, (g) dividend equivalents and (h) cash awards. No options or stock appreciation rights can be exercisable subsequent to the tenth anniversary of the date on which such Award was granted. Under the Equity Incentive 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 (Note 10(e)).
7.Earnings per Share
All common stock issued and outstanding (including any restricted shares issued under the Company’s amended and restated equity incentive plans) are the Company’s common stock andplan) have equal rights to vote and participate in dividends.dividends, subject to forfeiture provisions as set forth in the respective stock award agreements, as applicable. Furthermore, the Class A warrants are entitled to receive dividends which are not refundable, and therefore are considered participating securities for basic earnings per share calculation purposes. The Class A warrants do not participate in losses. For the year ended December 31, 2023, the Company declared and paid aggregate cash dividends on its Series C preferred stock of $991 and $1,121, respectively. With regards to the Series D preferred stock, during the year ended December 31, 2023, the Company declared and paid aggregate cash dividends of $968, which excludes any amounts accrued in prior periods, as applicable. Also, during the year ended December 31, 2023, in connection with the M/V Melia Stock Dividend and the DSI Series C preferred stock redemption, the Company recorded deemed dividends amounting to $154 and $2,549, respectively. No dividends were declared on the Company’s common stock and its Class A warrants during 2023. For the year ended December 31, 2022, the Company declared and paid aggregate cash dividends to its common and Class A warrants’ holders of $2,089 and $1,012, respectively. Further, in the same year, the Company declared and paid aggregate cash dividends on its Series C preferred stock of $950 and $780, respectively. With regards to the Series D preferred stock, during 2022, the Company declared and paid aggregate cash dividends of $117, which excludes any amounts accrued in prior periods, as applicable. Also, during 2022, in connection with the M/V Baltimore Stock Dividend, the Company recorded a deemed dividend amounting to $134. No dividends were declared to Company’s common holders during the period from inception (April 15, 2021) through December 31, 2021. For the period from inception (April 15, 2021) through December 31, 2021, dividends on Series C Preferred Stock amounted to $69, not paid as of December 31, 2021.
method described above and resulted in 17,277 shares
.December 31, 2023 | December 31, 2022 | From April 15, 2021 through December 31, 2021 | ||||||||||
| Net (loss)/income and comprehensive (loss)/income | $ | (1,977 | ) | $ | (326 | ) | $ | 134 | ||||
| Less deemed dividend on Series C Preferred Stock upon issuance of common stock | (2,549 | ) | - | - | ||||||||
| Less deemed dividend on Series D Preferred Stock upon issuance of common stock | (154 | ) | (134 | ) | - | |||||||
| Less dividends on Series C Preferred Stock | (991 | ) | (950 | ) | (69 | ) | ||||||
| Less dividends on Series D Preferred Stock | (1,036 | ) | (252 | ) | - | |||||||
| Less dividends on Class A warrants | - | (1,012 | ) | - | ||||||||
| Net (loss)/income and comprehensive (loss)/income attributable to common stockholders for basic (loss)/ earnings per share purposes | $ | (6,707 | ) | $ | (2,674 | ) | $ | 65 | ||||
| Less changes in fair value of warrants’ liability | (6,222 | ) | - | - | ||||||||
| Net (loss)/earnings and comprehensive (loss)/earnings attributable to common stockholders for diluted (loss)/earnings per share purposes | $ | (12,929 | ) | $ | (2,674 | ) | $ | 65 | ||||
| Weighted average number of common stock, basic | 3,315,519 | 155,655 | 44,101 | |||||||||
| Effect of dilutive securities | 56,688 | - | 17,277 | |||||||||
| Weighted average number of common stock, diluted | 3,372,207 | 155,655 | 61,378 | |||||||||
| (Loss)/ Earnings per share, basic | $ | (2.02 | ) | $ | (17.18 | ) | $ | 1.47 | ||||
| (Loss)/ Earnings per share, diluted | $ | (3.83 | ) | $ | (17.18 | ) | $ | 1.06 | ||||
8.Income