Warrant Information

Q&A Regarding Warrants

1. Why is Diana Shipping Inc. distributing warrants to purchase common shares?

The Company has a policy to uphold a robust balance sheet through proactive management of our capital structure. Through this pro-rata warrant distribution, Diana Shipping Inc. may raise new capital to maintain our robust balance sheet while protecting all shareholders, large and small, from dilution. All our shareholders receive the opportunity to either increase their investment in the Company to further participate in the upside potential or to sell their warrants for cash.  This distribution underscores the inherent strength the Board and management see in Diana Shipping Inc. and the confidence they have in the Company’s ability to deliver long-term profitable growth.

2. Why is Diana Shipping Inc. doing this now?

This distribution of warrants is a way to raise equity capital through the exercise of warrants, without diluting shareholders who choose to participate. Diana Shipping Inc. has consistently taken action to optimize its capital structure to deliver value for all shareholders.  Diana Shipping Inc. will continue to execute on the opportunities that deliver the best value enhancing opportunities for shareholders.

3. Is this distribution dilutive to shareholders?

This is a pro-rata warrant distribution that is not dilutive for holders of the Company owning five or more of the Company’s common shares as of December 6, 2023 (the “Record Date”). It is not dilutive after the exercise date for any shareholder who chooses to exercise their warrants early during the Bonus Share Fraction period.

4. Is there any cost to shareholders, or any cash payment required from shareholders, to receive the warrant distribution on payment date?

No, the warrants are being distributed to all shareholders at no cost.

5. What will Diana Shipping Inc. do with the cash proceeds from the exercise of the warrants?

Diana Shipping Inc. intends to use the cash proceeds from the exercise of the warrants for general corporate purposes. 

6. How will shareholders benefit from this warrant distribution?

Diana Shipping Inc. is distributing warrants to all shareholders. The warrants are expected to be listed to trade on the NYSE and are expected to have a value as determined by the market. Shareholders benefit to the extent of the market value of the warrants and may further benefit either by increasing their investment in the Company to further participate in the upside potential or to sell their warrants for cash.

7. What warrant ratio will shareholders receive for their investment stake?

Shareholders will receive one warrant for every five common shares held as of the Record Date, with fractional warrants rounded down.  As a result, shareholders who own fewer than five shares will not be entitled to any warrants. 

8. Will the exercise of the warrants result in the issuance of additional common shares?

We will not issue any common shares directly in the warrant distribution, but will issue common shares upon exercise of warrants.  Based on the number of common shares outstanding as of the Record Date, if all of the approximately 21.7 million warrants issued in this distribution were exercised and the maximum number of Bonus Share Fractions (described below) are issued, we would have approximately 140.7 million common shares outstanding (in each case, assuming no warrants or common shares are rounded down). Shareholders who choose to exercise during certain periods will receive an additional 0.5 of a common share, without any additional cost (the “Bonus Share Fraction”).