GENCO SHIPPING & TRADING LTD

Previous wording

Any increased trade barriers or restrictions, especially involving China, could adversely impact global economic conditions and, as a result, the amount of cargo transported on drybulk vessels. As an example of such restrictions, and most notable in term of drybulk trade volumes, China imposed tariffs on U.S. soybean exports in 2019 as part of the U.S.-China trade dispute. A deterioration in the trading relationship or a re-escalation of protectionist measures taken between these countries or others could lead to reduced drybulk trade volumes.

Current wording

Any increased trade barriers or restrictions, especially involving China, could adversely impact global economic conditions and, as a result, the amount of cargo transported on drybulk vessels. As an example of such restrictions, and most notable in term of drybulk trade volumes, China imposed tariffs on U.S. soybean exports in 2019 as part of the U.S.-China trade dispute. A deterioration in the trading relationship or a re-escalation of protectionist measures taken between these countries or others could lead to reduced drybulk trade volumes. Economic difficulties in China’s real estate sector has led to reduced domestic demand for steel, prompting China to increase steel exports. President Trump recently announced global tariffs on steel due to take effect on March 12, 2025, and other countries may react with protectionist measures. If China were to reduce steel production, its demand for drybulk cargoes used in steel production may likewise fall. Any significant decrease in demand for drybulk cargoes could cause a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.

Previous wording

A prolonged downturn in the drybulk charter market, from which we derive the large majority of our revenues, has been volatile over the past five years. The Baltic Dry Index (“BDI”), an index published by The Baltic Exchange of shipping rates for key drybulk routes increased during 2021 after a decline in 2020 principally caused by the COVID-19 pandemic, while another firm year was seen in 2022. In 2023, the BDI declined from 2021 and 2022 highs, but was firm from a historical perspective. There can be no assurance that the drybulk charter market will not experience future downturns.

Current wording

A prolonged downturn in the drybulk charter market, from which we derive the large majority of our revenues, has been volatile over the past five years. There can be no assurance that the drybulk charter market will not experience future downturns.

Previous wording

Shipping capacity supply and demand strongly influences freight rates. Factors that influence demand include demand for and production of drybulk products; global and regional economic and political conditions, including developments in international trade, fluctuations in industrial and agricultural production and armed conflicts; the distance drybulk cargo is to be moved by sea; environmental and other regulatory developments; events impacting production of the commodities that we carry; and changes in seaborne and other transportation patterns. Factors that influence the supply of vessel capacity include the number of newbuilding deliveries; port and canal congestion; scrapping of older vessels; vessel casualties; conversion of vessels to other uses; the number of vessels out of service (laid-up, drydocked, awaiting repairs or otherwise not available for hire); and environmental concerns and regulations.

Current wording

Shipping capacity supply and demand strongly influences freight rates. Factors that influence demand include demand for and production of drybulk products; global and regional economic and political conditions, including developments in international trade, fluctuations in industrial and agricultural production and armed conflicts; the distance drybulk cargo is to be moved by sea; environmental and other regulatory developments; events impacting production of the commodities that we carry; and changes in seaborne and other transportation patterns. These factors, in turn, may be affected by changes in climate, which may include changes in sea level and adverse weather events. Factors that influence the supply of vessel capacity include the number of newbuilding deliveries; port and canal congestion; scrapping of older vessels; vessel casualties; conversion of vessels to other uses; the number of vessels out of service (laid-up, drydocked, awaiting repairs or otherwise not available for hire); and environmental concerns and regulations.

Previous wording

Although vessel supply growth rates have slowed in recent years, if the supply of newbuilding vessels outpaces the demand for vessels, it could negatively impact freight rates and charterhire rates. If market conditions deteriorate following our vessels’ current employment, we may not be able to employ our vessels at profitable rates or at all. The occurrence of these events could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern.

Current wording

Although vessel supply growth rates have slowed in recent years, if the supply of newbuilding vessels outpaces the demand for vessels, it could negatively impact freight rates and charterhire rates. If market conditions deteriorate following our vessels’ current employment, we may not be able to employ our vessels at profitable rates or at all. The occurrence of these events could have a material adverse effect on our business, results of operations, cash flows, financial condition, ability to pay dividends, and ability to continue as a going concern. In 2025, drybulk commodity demand growth may ease relative to 2024 levels, whereas vessel supply growth is expected to remain at a similar level to 2024.

Previous wording

Inflation could continue to adversely affect our business and financial results by increasing the costs of labor and materials needed to operate our business. During the year ended December 31, 2023, we experienced increased costs for crew, spares, and stores, which we currently expect to continue into 2024. In an inflationary environment such as the current economic environment, depending on the drybulk industry and other economic conditions, we may be unable to raise our charter rates enough to offset the increasing costs of our operations, which would decrease our profit margins. Inflation may also raise our costs of capital and decrease our purchasing power, making it more difficult to maintain sufficient funds to operate our business.

Current wording

Inflation could adversely affect our business and financial results by increasing the costs of labor and materials needed to operate our business. In an inflationary environment such as the current economic environment, depending on the drybulk industry and other economic conditions, we may be unable to raise our charter rates enough to offset the increasing costs of our operations, which would decrease our profit margins. Inflation may also raise our costs of capital and decrease our purchasing power, making it more difficult to maintain sufficient funds to operate our business.

Previous wording

Our vessels are at risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. All these can result in death or injury to persons, repair and other increased costs, loss of revenues, loss or damage to property (including cargo), environmental damage, higher insurance rates, damage to our customer relationships, harm to our reputation as a safe and reliable operator and delay or rerouting. Public health threats, such as COVID-19, influenza and other highly communicable diseases or viruses, could adversely impact our and our customers’ operations. Changing economic, regulatory and political conditions, including political and military conflicts, have resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. Our vessels may operate in dangerous areas, including areas of the South China Sea, the Arabian Sea, the Indian Ocean, the Gulf of Aden off the coast of Somalia, the Gulf of Guinea, and the Red Sea. In November 2013, the Chinese government announced an Air Defense Identification Zone (ADIZ) covering much of the East China Sea. A number of nations do not honor the ADIZ, which includes certain maritime areas that have been contested among various nations in the region. Tensions relating to the Chinese ADIZ or other territorial disputes may escalate and result in interference with shipping routes or in market disruptions.

Current wording

Our vessels are at risk of damage or loss because of events such as mechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. All these can result in death or injury to persons, repair and other increased costs, loss of revenues, loss or damage to property (including cargo), environmental damage, higher insurance rates, damage to our customer relationships, harm to our reputation as a safe and reliable operator and delay or rerouting. Public health threats, such as COVID-19, influenza and other highly communicable diseases or viruses, could adversely impact our operations as well as our customers’. Changing economic, regulatory and political conditions, including political and military conflicts, have resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. Our vessels may operate in dangerous areas, including areas of the South China Sea, the Arabian Sea, the Indian Ocean, the Gulf of Aden off the coast of Somalia, the Gulf of Guinea, and the Red Sea. In November 2013, the Chinese government announced an Air Defense Identification Zone (ADIZ) covering much of the East China Sea. A number of nations do not honor the ADIZ, which includes certain maritime areas that have been contested among various nations in the region. Tensions relating to the Chinese ADIZ or other territorial disputes may escalate and result in interference with shipping routes or in market disruptions.

Previous wording

In recent years, tensions have been rising between the U.S. and China as a result of significantly increased Chinese military flights into Taiwan’s air defense zone, U.S. claims that China tested a hypersonic missile, and the establishment of the AUKUS pact among Australia, the U.K., and the U.S. under which the U.S. is to assist Australia in developing a nuclear submarine program. In addition, China imposed restrictions on the imports of coal and certain other products from Australia following Australia’s alignment with the U.S. on a number of issues, which China perceived as adverse to its interests. Developments around these restrictions are dynamic and uncertain. The escalation of such trade issues or tensions or development of any military conflict could result in interference with shipping routes or in market disruptions. In addition, unfavorable weather conditions brought on by climate change or otherwise could result in disruption to our operations or require infrastructure adaptations or new or different investments for our vessels. Any of the foregoing could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Current wording

In recent years, tensions have been rising between the U.S. and China as a result of significantly increased Chinese military flights into Taiwan’s air defense zone, U.S. claims that China tested a hypersonic missile, and the establishment of the AUKUS pact among Australia, the U.K., and the U.S. under which the U.S. is to assist Australia in developing a nuclear submarine program. In addition, China imposed restrictions on the imports of coal and certain other products from Australia following Australia’s alignment with the U.S. on a number of issues, which China perceived as adverse to its interests. Developments around these restrictions are dynamic and uncertain. The escalation of such trade issues or tensions or development of any military conflict could result in interference with shipping routes or in market disruptions. In addition, unfavorable weather conditions could result in disruption to our operations or require infrastructure adaptations or new or different investments for our vessels. Any of the foregoing could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Previous wording

At the end of 2023, Houthi rebels began to attack commercial vessels transiting the southern Red Sea and Gulf of Aden region. At the start of 2024, the attacks have increased in frequency despite intervention from several outside countries, including the United States through Operation Prosperity Guardian. These attacks have led to augmented risks regarding transit in the region. As a result, many shipping companies across the drybulk, tanker and container sectors have elected to re-route their vessels around the Cape of Good Hope, increasing sailing distances. On January 17, 2024, the Genco Picardy, a 2005-built 55,255 dwt Supramax vessel, was impacted by an unidentified projectile while transiting through the Gulf of Aden laden with a cargo of phosphate rock. No seafarers aboard the vessel were injured, and the damage to the vessel was limited.

Current wording

At the end of 2023, Houthi rebels began to attack commercial vessels transiting the southern Red Sea and Gulf of Aden region. In 2024, the attacks continued and increased in frequency despite intervention from several outside countries, including the United States through Operation Prosperity Guardian. These attacks have led to augmented risks regarding transit in the region. As a result, many shipping companies across the drybulk, tanker and container sectors have elected to re-route their vessels around the Cape of Good Hope, increasing sailing distances. As a result of the Israel and Hamas ceasefire agreement announced in January 2025, the Houthis have stated that they will curtail attacks on commercial vessels transiting the Red Sea as long as the agreement remains in place and is observed. Despite this agreement, many shipowners in the near-term have stated plans to continue to avoid the area while monitoring developments.

Previous wording

International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination. Inspection procedures can result in the seizure of the contents of our vessels, delays in the loading, offloading or delivery and the levying of customs duties, fines or other penalties against us. Changes to inspection procedures could impose additional financial and legal obligations on us. Such changes could also impose additional costs and obligations on our customers and may render the shipment of certain types of cargo uneconomical

Current wording

International shipping is subject to various security and customs inspection and related procedures in countries of origin and destination. Inspection procedures can result in the seizure of the contents of our vessels, delays in the loading, offloading or delivery and the levying of customs duties, fines or other penalties against us. Changes to inspection procedures could impose additional financial and legal obligations on us. Such changes could also impose additional costs and obligations on our customers and may render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Previous wording

On February 24, 2022, Russia invaded Ukraine leading to what is now a multi-year war and a continued humanitarian crisis. The impact on the drybulk market has been a redirection of cargo flows, volatile commodity prices, a greater emphasis on energy and food security and sanctions on various Russian exports. The U.S., Europe and other countries have imposed unprecedented economic sanctions in response to Russian actions which could be increased with uncertain effects on the drybulk market and the world economy. In addition, the U.S. and certain other North Atlantic Treaty Organization (NATO) countries have been supplying Ukraine with military aid. The longer term impact of Russia’s war in Ukraine remains unknown, which may take some time to materialize. Russia and Ukraine export significant volumes of coal and grain cargoes. A reduction of these exports as well as the global effect of these reduced supplies may result in lower trade volumes, higher commodity prices, increased inflation, and potential demand destruction. U.S. officials have also warned of the increased possibility of Russian cyberattacks, which could disrupt the

Current wording

a greater emphasis on energy and food security and sanctions on various Russian entities and exports. The U.S., Europe and other countries have imposed unprecedented economic sanctions in response to Russian actions which could be increased with uncertain effects on the drybulk market and the world economy. In addition, the U.S. and certain other North Atlantic Treaty Organization (NATO) countries have been supplying Ukraine with military aid. The longer term impact of Russia’s war in Ukraine remains unknown, which may take some time to materialize. Russia and Ukraine export significant volumes of coal and grain cargoes. A reduction of these exports as well as the global effect of these reduced supplies may result in lower trade volumes, higher commodity prices, increased inflation, and potential demand destruction. U.S. officials have also warned of the increased possibility of Russian cyberattacks, which could disrupt the operations of businesses involved in the drybulk industry, including ours. As a reaction to the war, China has increased domestic coal production as well as their imports of the commodity as a way to bolster energy security. The scope or intensity of the ongoing military conflict as well as sanctions and other actions undertaken in response to it could increase, potentially having negative effects on the global economy and markets.

Previous wording

Since the Black Sea Grain Initiative was established on July 27, 2022 to allow for the export of grain from Ukrainian ports while the war in Ukraine continues, a total of approximately 33 million metric tons of grain were exported from three Ukrainian ports under this agreement, of which nearly 80% has been corn and wheat cargoes. However, Russia exited the agreement in July 2023. Since then, Ukraine has established its own corridor to export the country’s agricultural products outside of the Black Sea Grain Initiative. Overall, volumes along these routes have been lower relative to pre-war levels. Ukraine has been using the corridor in an attempt to revive its seaborne exports without Russia’s approval. Future prospects for Ukrainian grain shipments and the impact on drybulk markets for the shipment of grain and other cargoes remain unpredictable. Failure to reinstate the agreement or the continuation or worsening of the war in Ukraine could have an adverse impact on our business, financial condition, results of operations, and ability to pay dividends.

Current wording

The Black Sea Grain Initiative was established on July 27, 2022 to allow for the export of grain from Ukrainian ports while the war in Ukraine continues. However, Russia exited the agreement in July 2023. Since then, Ukraine has established its own corridor to export the country’s agricultural products outside of the Black Sea Grain Initiative. Overall, volumes along these routes have been lower relative to pre-war levels. Ukraine has been using the corridor in an attempt to revive its seaborne exports without Russia’s approval. Future prospects for Ukrainian grain shipments and the impact on drybulk markets for the shipment of grain and other cargoes remain unpredictable. Failure to reinstate the agreement or the continuation or worsening of the war in Ukraine could have an adverse impact on our business, financial condition, results of operations, and ability to pay dividends.

Previous wording

In addition, on October 7, 2023, the Palestinian Sunni Islamist group Hamas led surprise attacks against Israel from the Gaza Strip by land, sea, and air, reportedly killing more than 1,400 Israelis and other nationals and taking a number of hostages. In response, Israel’s cabinet formally declared war on Hamas, and Israel has commenced military operations against Hamas in Gaza. The impacts of the Israel-Hamas war on the global economy, including commodity pricing and demand, among other factors, are currently unknown. The continuation or worsening of the Israel-Hamas war could have an adverse impact on our business, financial condition, results of operations, and ability to pay dividends. The Houthi attacks on commercial vessels in the southern Red Sea and Gulf of Aden have led to many shipping companies to make a decision to avoid transiting the region. This will extend the duration of many trade routes, effectively reducing vessel capacity. While the containership industry is most impacted by the re-routing, due to the amount of cargo volume transiting the area, drybulk is likely to experience an impact to the supply and demand balance as well. Key cargoes loaded by our vessels that could have longer trade routes include iron ore, coal, grain and various minor bulk commodities. The extent of the impact as well as the trajectory of the current situation is fluid and we continue to monitor current events.

Current wording

In addition, on October 7, 2023, the Palestinian Sunni Islamist group Hamas led surprise attacks against Israel from the Gaza Strip by land, sea, and air, killing many Israelis and other nationals and taking a number of hostages. In response, Israel’s cabinet formally declared war on Hamas, and Israel has commenced military operations against Hamas in Gaza. The impacts of the Israel-Hamas war on the global economy, including commodity pricing and demand, among other factors, are currently unknown. The continuation or worsening of the Israel-Hamas war could have an adverse impact on our business, financial condition, results of operations, and ability to pay dividends. The Houthi attacks on commercial vessels in the southern Red Sea and Gulf of Aden have led to many shipping companies to make a decision to avoid transiting the region. This has extended the duration of many trade routes, effectively reducing vessel capacity. While the containership industry is most impacted by the re-routing, due to the amount of cargo volume transiting the area, drybulk has experienced an impact to the supply and demand balance as well. Key cargoes loaded by our vessels that could have longer trade routes include iron ore, coal, grain and various minor bulk commodities. In January 2025, a ceasefire agreement between Israel and Hamas was reached. The extent of the impact as well as the trajectory of the current situation is fluid and we continue to monitor current events.

Previous wording

The hull and machinery of commercial vessels must be certified as being “in class” by a classification society authorized by its country of registry and undergo annual surveys, intermediate surveys and special surveys as described in Item 1., “Business – Classification and Inspection” in this report. If any vessel does not maintain its class or fails any annual, intermediate or special survey, the vessel will be unable to trade between ports and unemployable, and we could be in violation of certain covenants in our credit facility, which could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

Current wording

The hull and machinery of commercial vessels must be certified as being “in class” by a classification society authorized by its country of registry and undergo annual surveys, intermediate surveys and special surveys as described in Item 1., “Business – Classification and Inspection” in this report. If any vessel does not maintain its class or fails any annual, intermediate or special survey, the vessel will be unable to trade between ports and unemployable, and we could

Previous wording

sanctions or embargoes imposed by the U.S. government or countries identified by the U.S. government as state sponsors of terrorism, such as Iran, Sudan and Syria. Moreover, the ongoing war in Ukraine could result in the imposition of further economic sanctions by the U.S. and the European Union against Russia. 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 imposed by the governments of the U.S., European Union, and/or other international bodies. Any violation of sanctions and embargo laws and regulations could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. Additionally, some investors may decide to divest their interest, or not to invest, in us simply because we do business with companies that do business in sanctioned countries. 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. War, terrorism, civil unrest and governmental actions in these and surrounding countries may adversely affect investor perception of the value of our common stock.

Current wording

All of our charters with customers prohibit our vessels from entering any countries or conducting any trade prohibited by the U.S. However, on such customers’ instructions, our vessels could call on ports in countries subject to sanctions or embargoes imposed by the U.S. government or countries identified by the U.S. government as state sponsors of terrorism, such as Iran, Sudan and Syria. Moreover, the ongoing war in Ukraine could result in the imposition of further economic sanctions by the U.S. and the European Union against Russia. 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 imposed by the governments of the U.S., European Union, and/or other international bodies. Any violation of sanctions and embargo laws and regulations could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. Additionally, some investors may decide to divest their interest, or not to invest, in us simply because we do business with companies that do business in sanctioned countries. 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. War, terrorism, civil unrest and governmental actions in these and surrounding countries may adversely affect investor perception of the value of our common stock.

Previous wording

Our success largely depends on attracting and retaining highly skilled and qualified personnel. In crewing our vessels, we require technically skilled employees with specialized training who can perform physically demanding work. Competition to attract and retain qualified crew members is intense. Any inability that GSSM or we experience in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage, maintain and grow our business, which could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

Current wording

Our success largely depends on attracting and retaining highly skilled and qualified personnel. In crewing our vessels, we require technically skilled employees with specialized training who can perform physically demanding work. Competition to attract and retain qualified crew members is intense. Any inability that GSSM or Synergy or we experience in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage, maintain and grow our business, which could have a material adverse effect on our business, results of operations, cash flows, financial condition, and ability to pay dividends.

Previous wording

we currently charter most of our vessels on spot market voyage charters, we are exposed to the cyclicality and volatility of the spot charter market, and we do not have significant long-term, fixed-rate time charters to ameliorate the adverse effects of downturns in the spot market. Capesize vessels, which we operate as part of our fleet, have been particularly susceptible to significant freight rate fluctuations in spot charter rates.

Current wording

The charterhire rates for our vessels have sometimes declined below the operating costs of our vessels. Because we currently charter most of our vessels on spot market voyage charters, we are exposed to the cyclicality and volatility of the spot charter market, and we do not have significant long-term, fixed-rate time charters to ameliorate the adverse effects of downturns in the spot market.

Previous wording

of Directors. The principal business factors that our Board of Directors expects to consider when determining the timing and amount of dividend payments or stock repurchases include our earnings, financial condition, and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends or stock repurchases other than from surplus or while a company is insolvent or would be rendered insolvent by such a payment or repurchase.

Current wording

Under our credit facility, we may not declare or pay dividends if an event of default has occurred and is continuing or would occur as a result of the declaration or we would not be in pro forma compliance with our financial covenants after giving effect to the dividend. Any dividend or stock repurchase is subject to the discretion of our Board of Directors. The principal business factors that our Board of Directors expects to consider when determining the timing and amount of dividend payments or stock repurchases include our earnings, financial condition, and cash requirements at the time. Marshall Islands law generally prohibits the declaration and payment of dividends or stock repurchases other than from surplus or while a company is insolvent or would be rendered insolvent by such a payment or repurchase.

Previous wording

Our future growth depends on a number of factors, some of which we cannot control. These factors include our ability to identify vessels for acquisition; consummate acquisitions or establish joint ventures on favorable terms; integrate acquired vessels successfully with our existing operations; expand our customer base; and obtain required financing for our existing and new operations. As of December 31, 2023, we had $294.8 million of availability under our credit facility. These limitations place restrictions on financing that we could use for our growth.

Current wording

Our future growth depends on a number of factors, some of which we cannot control. These factors include our ability to identify vessels for acquisition; consummate acquisitions or establish joint ventures on favorable terms; integrate acquired vessels successfully with our existing operations; expand our customer base; and obtain required financing for our existing and new operations. As of December 31, 2024, we had $337.3 million of availability under our credit facility. These limitations place restrictions on financing that we could use for our growth.

Previous wording

We currently maintain all of our cash and cash equivalents with eight financial institutions. None of our balances are covered by insurance in the event of default by the financial institutions

Current wording

We currently maintain all of our cash and cash equivalents with seven financial institutions. None of our balances are covered by insurance in the event of default by the financial institutions

Previous wording

P&I Association provides mutual insurance based on the aggregate tonnage of a member’s vessels entered into the Association. Claims are paid through the aggregate premiums of all members, although members remain subject to calls for additional funds if the aggregate premiums are insufficient to cover claims submitted to the Association. Claims submitted to the Association may include those incurred by members of the Association, as well as claims submitted to the Association from other P&I Associations with which our P&I Association has entered into inter-association agreements. The P&I Associations to which we belong might not remain viable, or we may become subject to funding calls that could adversely affect us.

Current wording

We are insured against tort claims and some contractual claims (including claims related to environmental damage and pollution) through memberships in Protection and Indemnity Associations or Clubs, or P&I Associations. A P&I Association provides mutual insurance based on the aggregate tonnage of a member’s vessels entered into the Association. Claims are paid through the aggregate premiums of all members, although members remain subject to calls for additional funds if the aggregate premiums are insufficient to cover claims submitted to the Association. Claims submitted to the Association may include those incurred by members of the Association, as well as claims submitted to the Association from other P&I Associations with which our P&I Association has entered into inter-association agreements. The P&I Associations to which we belong might not remain viable, or we may become subject to funding calls that could adversely affect us.

Previous wording

We will qualify for the Section 883 exemption if, among other things, (i) our stock is treated as primarily and regularly traded on an established securities market in the U.S. (the “publicly traded test”), or (ii) we satisfy the qualified shareholder test or (iii) we satisfy the controlled foreign corporation test (the “CFC test”). Under applicable Treasury Regulations, the publicly-traded test cannot be satisfied in any taxable year in which persons who actually or constructively own 5% or more of our stock (which we sometimes refer to as “5% shareholders”), together own 50% or more of our stock (by vote and value) for more than half the days in such year (the “five percent override rule”), unless an exception applies. A foreign corporation satisfies the qualified shareholder test if more than 50% of the value of its outstanding shares is owned (or treated as owned by applying certain attribution rules) for at least half of the number of days in the foreign corporation’s taxable year by one or more “qualified shareholders.” A qualified shareholder includes a foreign corporation that, among other things, satisfies the publicly traded test. A foreign corporation satisfies the CFC test if it is a “controlled foreign corporation” and one or more qualified U.S. persons own more than 50% of the total value of all the outstanding stock.

Current wording

more of our stock (by vote and value) for more than half the days in such year (the “five percent override rule”), unless an exception applies. A foreign corporation satisfies the qualified shareholder test if more than 50% of the value of its outstanding shares is owned (or treated as owned by applying certain attribution rules) for at least half of the number of days in the foreign corporation’s taxable year by one or more “qualified shareholders.” A qualified shareholder includes a foreign corporation that, among other things, satisfies the publicly traded test. A foreign corporation satisfies the CFC test if it is a “controlled foreign corporation” and one or more qualified U.S. persons own more than 50% of the total value of all the outstanding stock.

Previous wording

unless a shareholder makes certain elections available under the Code (which elections could themselves have adverse consequences for such shareholder), such shareholder would be liable to pay U.S. federal income tax at the highest applicable ordinary income tax rates upon the receipt of excess distributions and upon any gain from the disposition of our common stock, plus interest on such amounts, as if such excess distribution or gain had been recognized ratably over the shareholder’s holding period of our common stock.

Current wording

If we were to be treated as a PFIC for any taxable year (and regardless of whether we remain a PFIC for subsequent taxable years), our U.S. shareholders would face adverse U.S. tax consequences. Under the PFIC rules, unless a shareholder makes certain elections available under the Code (which elections could themselves have adverse consequences for such shareholder), such shareholder would be liable to pay U.S. federal income tax at the highest applicable ordinary income tax rates upon the receipt of excess distributions and upon any gain from the disposition of our common stock, plus interest on such amounts, as if such excess distribution or gain had been recognized ratably over the shareholder’s holding period of our common stock.

Previous wording

For example, on November 15, 2023, the Organisation for Economic Cooperation and Development (OECD) announced that 145 countries and jurisdictions had signed on as members of the OECD/G20 Inclusive Framework on base erosion and profit shifting, which issued an outcome statement on July 11, 2023 describing a two-pillar framework to address the tax challenges arising from the digitalization of the economy. While the United States has signed the agreement, it has not enacted legislation that would implement either pillar, and the Marshall Islands is not among the signatories. Pillar Two of that framework agreement subjects certain multinational enterprises with consolidated revenues of at least 750 million euros to a minimum 15% tax rate. The agreement would also reallocate certain taxing rights over multinational enterprises from their home countries to the markets where they have business activities and earn profits—regardless of whether the multinational enterprises have a physical presence in such markets. While certain international shipping income is exempt from some or all of the provisions included in the agreement, the impact of these provisions is uncertain and may not become evident for some period of time.

Current wording

For example, on November 15, 2023, the Organization for Economic Cooperation and Development (OECD) announced that 145 countries and jurisdictions had signed on as members of the OECD/G20 Inclusive Framework on base erosion and profit shifting, which issued an outcome statement on July 11, 2023 describing a two-pillar framework to address the tax challenges arising from the digitalization of the economy. Pillar Two of that framework agreement subjects certain multinational enterprises with consolidated revenues of at least 750 million euros to a minimum 15% tax rate. The agreement would also reallocate certain taxing rights over multinational enterprises from their home countries to the markets where they have business activities and earn profits—regardless of whether the multinational enterprises have a physical presence in such markets. While certain international shipping income is exempt from some or all of the

Previous wording

The market price of our common stock could decline due to sales of a large number of shares in the market or the perception that these sales could occur. These sales could also make it more difficult or impossible for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds. We cannot predict the effect that future sales of common stock or other equity-related securities would have on the market price of our common stock.

Current wording

The market price of our common stock could decline due to sales of a large number of shares in the market or the perception that these sales could occur. These sales could also make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate to raise funds. We cannot predict the effect that future sales of common stock or other equity-related securities would have on the market price of our common stock.