Nordic American Tankers Limited Annual Report 2020

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549FORM 20-F☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2020OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from ____ to ____OR☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report: Not applicableFor the transition period from ___________________________ to ___________________________Commission file number 001-13944NORDIC AMERICAN TANKERS LIMITED (Exact name of Registrant as specified in its charter) (Translation of Registrant’s name into English) BERMUDA (Jurisdiction of incorporation or organization) LOM BUILDING 27 REID STREET Hamilton HM 11 Bermuda (Address of principal executive offices) Herbjorn Hansson, Chairman, President, and Chief Executive Officer,Tel No. 1 (441) 292-7202,LOM Building, 27 Reid Street, Hamilton HM 11, Bermuda (Name, Telephone, E-mail and/or Facsimile number andAddress of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchange on which registered Common Shares, $0.01 par valueNATNew York Stock Exchange Series A Participating Preferred Shares New York Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NoneIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:As of December 31, 2020, there were outstanding 151,446,112 common shares of the Registrant, $0.01 par value per share.Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.☐ Yes☒ NoIf this report is an annual report or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Actof 1934.☐ Yes☒ NoNote – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations underthose Sections.Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.☒ Yes☐ NoIndicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during this preceding 12 months (or for such shorter period that the registrant was required to submit such files).☒ Yes☐ NoIndicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large acceleratedfiler”, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☐Accelerated filer ☒Non-accelerated filer ☐Emerging Growth Company ☐If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April5, 2012.Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reportingunder Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:☒ U.S. GAAP☐ International Financial Reporting Standards as issued by the International Accounting Standards Board☐ OtherIf “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.☐ Item 17☐ Item 18If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).☐Yes☒ No (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to thedistribution of securities under a plan confirmed by a court.☐ Yes☐ NoTABLE OF CONTENTS PagePART I ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS1ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE1ITEM 3.KEY INFORMATION1 A.SELECTED FINANCIAL DATA1 B.CAPITALIZATION AND INDEBTEDNESS2 C.REASONS FOR THE OFFER AND USE OF PROCEEDS2 D.RISK FACTORS2ITEM 4.INFORMATION ON THE COMPANY27 A.HISTORY AND DEVELOPMENT OF THE COMPANY27 B.BUSINESS OVERVIEW29 C.ORGANIZATIONAL STRUCTURE44 D.PROPERTY, PLANT AND EQUIPMENT44ITEM 4A.UNRESOLVED STAFF COMMENTS44ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS45 A.OPERATING RESULTS45 B.LIQUIDITY AND CAPITAL RESOURCES52 C.RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.55 D.TREND INFORMATION55 E.OFF BALANCE SHEET ARRANGEMENTS55 F.TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS55 G.SAFE HARBOR56ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES56 A.DIRECTORS AND SENIOR MANAGEMENT56 B.COMPENSATION57 C.BOARD PRACTICES58 D.EMPLOYEES58 E.SHARE OWNERSHIP58ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS59 A.MAJOR SHAREHOLDERS59 B.RELATED PARTY TRANSACTIONS59 C.INTERESTS OF EXPERTS AND COUNSEL59ITEM 8.FINANCIAL INFORMATION59 A.CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION59 B.SIGNIFICANT CHANGES60ITEM 9.THE OFFER AND LISTING60ITEM 10.ADDITIONAL INFORMATION60 A.SHARE CAPITAL60 B.MEMORANDUM AND ARTICLES OF ASSOCIATION60 C.MATERIAL CONTRACTS65 D.EXCHANGE CONTROLS66 E.TAXATION67 F.DIVIDENDS AND PAYING AGENTS75 G.STATEMENT BY EXPERTS75 H.DOCUMENTS ON DISPLAY75 I.SUBSIDIARY INFORMATION76ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK76ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES76iTABLE OF CONTENTS(continued) PagePART II ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES76ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS76ITEM 15.CONTROLS AND PROCEDURES77 A.DISCLOSURE CONTROLS AND PROCEDURES.77 B.MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING.77 C.ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM.77 D.CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.78ITEM 16.RESERVED78ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT78ITEM 16B.CODE OF ETHICS78ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES78 A.AUDIT FEES78 B.AUDIT-RELATED FEES78 C.TAX FEES78 D.ALL OTHER FEES78 E.AUDIT COMMITTEE’S PRE-APPROVAL POLICIES AND PROCEDURES78 F.NOT APPLICABLE.79ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES79ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.79ITEM 16F.CHANGE IN REGISTRANT`S CERTIFYING ACCOUNTANT.79ITEM 16G.CORPORATE GOVERNANCE79ITEM 16H.MINE SAFETY DISCLOSURE79PART III ITEM 17.FINANCIAL STATEMENTS79ITEM 18.FINANCIAL STATEMENTS79ITEM 19.EXHIBITS80iiTable of ContentsCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTSCertain matters discussed herein may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans,objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement inconnection with this safe harbor legislation. This report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect ourcurrent views with respect to future events and financial performance, and are not intended to give any assurance as to future results. When used in this document, the words “believe,”“expect,” “anticipate,” “estimate,” “intend,” “plan,” “target,” “project,” “likely,” “will,” “would,” “may,” “seek,” “continue,” “possible,” “might,” “forecast,” “potential,” “should,”“could” and similar expressions, terms, or phrases may identify forward-looking statements.The forward-looking statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, ourmanagement’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions werereasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond ourcontrol, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. We undertake no obligation to update any forward-looking statement,whether as a result of new information, future events or otherwise.Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of worldeconomies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker market, as a result of changes in thepetroleum production levels set by the Organization of the Petroleum Exporting Countries (“OPEC”), and worldwide oil consumption and storage, changes in our operating expenses,including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, changes in governmental rules and regulations or actionstaken by regulatory authorities, potential liability from pending or future litigation and potential costs due to environmental damage and vessel collisions, general domestic andinternational political conditions or events including “trade wars”, potential disruption of shipping routes due to accidents or political events, the length and severity of epidemics andpandemics, including the ongoing global outbreak of the novel coronavirus (“COVID-19”) and its impact on the demand for seaborne transportation in the tanker sector, vesselbreakdowns and instances of off-hire, failure on the part of a seller to complete a sale of a vessel to us and other important factors described from time to time in the reports filed by theCompany with the Securities and Exchange Commission, or the SEC.Table of ContentsPART IITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSNot applicableITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicableITEM 3.KEY INFORMATIONThroughout this annual report, all references to “Nordic American Tankers,” “NAT,” the “Company,” “the Group,” “we,” “our,” and “us” refer to Nordic American TankersLimited and its subsidiaries. Unless otherwise indicated, all references to “U.S. dollars,” “USD,” “dollars,” “US$” and “$” in this annual report are to the lawful currency of theUnited States of America and references to “Norwegian Kroner” or “NOK” are to the lawful currency of Norway.NORDIC AMERICAN TANKERS LTD. IS VERY DIFFERENT FROM OTHER STOCK LISTED TANKER COMPANIES. PLEASE SEE ITEM 4. A. FOR THE NAT OVERALLSTRATEGY.A.Selected Financial DataThe following selected historical financial information should be read in conjunction with our audited financial statements and related notes, which are included herein, togetherwith Item 5. Operating and Financial Review and Prospects. The Statements of Operations data for each of the three years ended December 31, 2020, 2019 and 2018 and selected BalanceSheet data as of December 31, 2020 and 2019 have been derived from our audited financial statements included elsewhere in this document. The Statements of Operations financialinformation for the years ended December 31, 2017 and 2016 and selected balance sheet information as of December 31, 2018, 2017 and 2016 have been derived from our audited financialstatements not included in this Annual Report on Form 20-F.SELECTED CONSOLIDATED FINANCIAL DATA Year ended December 31, All figures in thousands of USD except share data 2020 2019 2018 2017 2016 Voyage Revenues 354,619 317,220 289,016 297,141 357,451 Voyage Expenses (121,089) (141,770) (165,012) (142,465) (125,987)Vessel Operating Expense (66,883) (66,033) (80,411) (87,663) (80,266)General and Administrative Expenses (17,586) (13,481) (12,727) (12,575) (12,296)Depreciation Expenses (67,834) (63,965) (60,695) (100,669) (90,889)Impairment Loss on Vessel - - (2,168) (110,480) - Impairment Loss on Goodwill - - - (18,979) - Loss on Disposal of Vessels - - (6,619) - - Settlement Received - - - - 5,328 Net Operating Income (Loss) 81,227 31,971 (38,616) (175,690) 53,341 Interest Income 96 298 334 347 215 Interest Expense (31,481) (38,390) (34,549) (20,464) (11,170)Other Financial (Expense) Income 255 (4,160) (14,729) (644) (98)Total Other Expenses (31,130) (42,252) (48,944) (20,761) (11,053)Income Tax Expense (64) (71) (79) (83) (102)Loss on Equity Method Investment - - (7,667) (8,435) (46,642)Net Income (Loss) 50,033 (10,352) (95,306) (204,969) (4,456) Basic and Diluted Earnings (Loss) per Share 0.34 (0.07) (0.67) (1.97) (0.05)Cash Dividends Declared per Share 0.45 0.10 0.07 0.53 1.37 Basic and Diluted Weighted Average Shares Outstanding 149,292,586 142,571,361 141,969,666 103,832,680 92,531,001 Market Price per Common Share as of December 31, 2.95 4.92 2.00 2.46 8.40 Other financial data: Net Cash Provided by (Used in) Operating Activities 110,944 52,858 (16,103) 31,741 127,786 Cash Dividends Paid 67,242 14,255 9,936 54,226 125,650 Selected Balance Sheet Data (at period end): Cash and Cash Equivalents 57,847 48,847 49,327 58,359 82,170 Total Assets 974,347 1,030,903 1,071,111 1,141,063 1,349,904 Total Long-Term Debt (1) 334,615 375,364 417,836 388,855 442,820 Common Stock 1,514 1,472 1,420 1,420 1,020 Total Shareholders’ Equity 599,126 595,424 602,031 711,064 871,049 (1) Debt consists of $341,374, $385,285, $419,867, $391,641 and $447,000 as of December 31, 2020, 2019, 2018, 2017 and 2016, respectively (all numbers in thousands of U.S. dollars),excluding deferred financing costs.1Table of ContentsB.Capitalization and IndebtednessNot applicable.C.Reasons for the offer and use of ProceedsNot applicable.D.Risk FactorsThe following constitutes a summary of the material risks relevant to an investment in our company. The occurrence of any of the events described in this section couldsignificantly and negatively affect our business, financial condition, operating results or cash available for dividends or the trading price of our common stock.Summary of Risk Factors•If the Suezmax tanker industry, which historically has been cyclical and volatile, is depressed in the future, our revenues, earnings and available cash flow may decrease.•Major outbreaks of diseases and governmental responses thereto could adversely affect our business.2Table of Contents•Any decrease in shipments of crude oil may adversely affect our financial performance.•We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings and our ability to pay dividends.•Changes in the price of fuel and regulations may adversely affect our profits.•Inability to renew the fleet would adversely affect our business, results of operations, financial condition and ability to pay dividends.•The international Suezmax tanker industry has experienced volatile charter rates and vessel values and there can be no assurance that these charter rates and vessel values willnot decrease in the near future.•Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.•Declines in charter rates and other market deterioration could cause us to incur impairment charges.•The value of our vessels may be depressed in the event that we sell a vessel.•An over-supply of Suezmax tanker capacity may lead to reductions in charter rates, vessel values, and profitability.•Delays or defaults by the shipyards in the construction of our newbuildings could increase our expenses and diminish our net income and cash flows.•Political instability, terrorist attacks, international hostilities and global public health threats can affect the seaborne transportation industry, which could adversely affect ourbusiness.•We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results ofoperations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.•If we do not manage customer relationships or successfully integrate any acquired Suezmax tankers, we may not be able to grow or effectively manage our growth.•Because some of our expenses are incurred in foreign currencies, we are exposed to exchange rate fluctuations, which could negatively affect our results of operations.•The operation of Suezmax tankers involves certain unique operational risks.•We operate our Suezmax tankers worldwide and as a result, our vessels are exposed to international risks which may reduce revenue or increase expenses.•The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.•Acts of piracy on ocean-going vessels could adversely affect our business.•Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow.•Governments could require our vessels during a period of war or emergency resulting in a loss of earnings.•If we purchase secondhand vessels, we may not receive warranties from the builder and operating cost may increase as a result of aging of the fleet.•Our insurance may not be adequate to cover our losses that may result from our operations due to the inherent operational risks of the tanker industry.•An increase in operating costs would decrease earnings and dividends per share.•We may be unsuccessful in competing in the highly competitive international Suezmax tanker market.•We are subject to laws and regulations which can adversely affect our business, results of operations, cash flows and financial condition, and our ability to pay dividends.•Regulations relating to ballast water discharge may adversely affect our revenues and profitability.•Climate change and greenhouse gas restrictions may adversely impact our operations and markets.•If we fail to comply with international safety regulations, we may be subject to increased liability, which may adversely affect our insurance coverage and may result in a denialof access to, or detention in, certain ports.•Developments in safety and environmental requirements relating to the recycling of vessels may result in escalated and unexpected costs.3Table of Contents•Servicing our debt limits funds available for other purposes and if we cannot service our debt, we may lose our vessels.•Our borrowing facilities, contains restrictive covenants which could negatively affect our growth, cause our financial performance to suffer and limit our ability to paydividends.•Volatility of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and cash flow.•We may not be able to finance our future capital commitments.•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 toobtain financing or refinance our existing and future credit facilities on acceptable terms.•We cannot assure you that we will be able to refinance our indebtedness.•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 ornegatively impact our results of operations and cash flows.•Our share price may continue to be highly volatile, which could lead to a loss of all or part of a shareholder’s investment.•We operate in a cyclical and volatile industry and cannot guarantee that we will continue to make cash distributions.•Future sales of our common stock could cause the market price of our common stock to decline.•Ineffective internal controls could impact the Company’s business and financial results.•Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance (“ESG”) policiesmay impose additional costs on us or expose us to additional risks.•A decision of our Board of Directors and the laws of Bermuda may prevent the declaration and payment of dividends.•We have antitakeover protections which could prevent a change of control.•Our vessels may call on ports located in countries or territories that are subject to sanctions or embargoes imposed by the U.S. government, the European Union, the UnitedNations or other governmental authorities, which could adversely affect the trading price of our common stock.•Because we are a foreign corporation, you may not have the same rights that a shareholder in a U.S. corporation may have.•We are incorporated in Bermuda and it may not be possible for our investors to enforce U.S. judgments against us.•We may have to pay tax on United States source income, which would reduce our earnings.•If the United States Internal Revenue Service were to treat us as a “passive foreign investment company,” that could have adverse tax consequences for United Statesshareholders.•We may become subject to taxation in Bermuda which would negatively affect our results.•As a Bermuda exempted company incorporated under Bermuda law with subsidiaries in another offshore jurisdiction, our operations may be subject to economic substancerequirements.Risks Related to Our Business and Financial ConditionIf the Suezmax tanker industry, which historically has been cyclical and volatile, is depressed in the future, our revenues, earnings and available cash flow may decrease.It should be noted that we are specializing in Suezmax tankers. Historically, the tanker industry has been highly cyclical, with volatility in profitability, charter rates and assetvalues resulting from changes in the supply of and demand for tanker capacity. Fluctuations in charter rates and tanker values result from changes in the supply of and demand fortanker capacity and changes in the supply of and demand for oil and oil products. These factors may adversely affect the rates payable and the amounts we receive in respect of ourvessels. Our ability to re-charter our vessels on the expiration or termination of their current spot and time charters and the charter rates payable under any renewal or replacementcharters will depend upon, among other things, economic conditions in the tanker market and we cannot guarantee that any renewal or replacement charters we enter into will besufficient to allow us to operate our vessels profitably.4Table of ContentsThe factors that influence demand for tanker capacity include:•supply and demand for oil and oil products;•global and regional economic and political conditions and developments, including developments in international trade, national oil reserves policies, fluctuations inindustrial and agricultural production and armed conflicts;•regional availability of refining capacity;•environmental and other legal and regulatory developments;•the distance oil and oil products are to be moved by sea;•changes in seaborne and other transportation patterns, including changes in the distances over which tanker cargoes are transported by sea;•increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we mayserve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;•currency exchange rates;•weather and acts of God, natural disasters and health disasters;•competition from alternative sources of energy and from other shipping companies and other modes of transport;•international sanctions, embargoes, import and export restrictions, nationalizations, piracy and wars;•economic slowdowns caused by public health events such as the recent COVID-19 outbreak; and•regulatory changes including regulations adopted by supranational authorities and/or industry bodies, such as safety and environmental regulations and requirements bymajor oil companies.The factors that influence the supply of tanker capacity include:•current and expected purchase orders for tankers;•the number of tanker newbuilding deliveries;•any potential delays in the delivery of newbuilding vessels and/or cancellations of newbuilding orders;•the scrapping rate of older tankers;•technological advances in tanker design and capacity;•tanker charter rates, which are affected by factors that may affect the rate of newbuilding, swapping and laying up of tankers;•port and canal congestion;•price of steel and vessel equipment;5Table of Contents•conversion of tankers to other uses or conversion of other vessels to tankers;•with respect to tanker vessel supply, demand for alternative sources of energy and supply and demand for energy resources and oil and petroleum products;•product imbalances (affecting the level of trading activity);•developments in international trade, including refinery additions and closures;•the number of tankers that are out of service; and•changes in environmental and other regulations that may limit the useful lives of tankers.The factors affecting the supply and demand for tankers have been volatile and are outside of our control, and the nature, timing and degree of changes in industry conditionsare unpredictable, including those discussed above. Continued volatility may reduce demand for transportation of oil over longer distances and increase supply of tankers to carry thatoil, which may have a material adverse effect on our business, financial condition, results of operations, cash flows, ability to pay dividends and existing contractual obligations.Major outbreaks of diseases and governmental responses thereto could adversely affect our business.The COVID-19 pandemic has resulted in numerous actions taken by governments and governmental agencies in an attempt to mitigate the spread of the virus, including travelbans, quarantines, and other emergency public health measures, and a number of countries implemented lockdown measures.Such measures against outbreaks of diseases may result in a reduction in global economic activity and volatility in the global financial markets. If such diseases andgovernmental responses thereto continues on a prolonged basis or becomes more severe, the adverse impact on the global economy and the rate environment for cargo vessels maydeteriorate and our financial and operational results may be negatively impacted.Further, the uncertainties regarding the economic impact of such diseases and governmental response thereto are likely to result in sustained market turmoil, which could alsonegatively impact our business, financial condition and cash flows. Governments may counter the negative economic impacts with stimulus packages; however, we cannot predict theextent to which such measures will be sufficient to restore or sustain the business and financial condition of companies in the shipping industry. These measures, though contemplatedto be temporary in nature, may continue and increase as countries attempt to contain such outbreaks or any reoccurrences thereof.Measures against outbreaks of diseases (such as COVID-19) in a number of countries may restrict crew rotations on our vessels, which may continue or become more severe.As a result, in 2020, we experienced and may continue to experience disruptions to our normal vessel operations caused by increased deviation time associated with positioning ourvessels to countries in which we 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 doso, which may result in delays or other operational issues. In 2020, delays in crew rotations have also caused us to incur additional costs related to crew bonuses paid to retain theexisting crew members on board and may continue to do so.The occurrence or continued 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 couldhave a material adverse effect on our business, results of operations, cash flows, financial condition, value of our vessels, and ability to pay dividends.Any decrease in shipments of crude oil may adversely affect our financial performance.The demand for our vessels and services in transporting oil derives primarily from demand for Arabian Gulf, West African, North Sea and Caribbean crude oil, which, in turn,primarily depends on the economies of the world’s industrial countries and competition from alternative energy sources. A wide range of economic, social and other factors cansignificantly affect the strength of the world’s industrial economies and their demand for crude oil from the mentioned geographical areas. One such factor is the price of worldwide crudeoil.6Table of ContentsAny decrease in shipments of crude oil from the above mentioned geographical areas would have a material adverse effect on our financial performance. Among the factorswhich could lead to such a decrease are:•increased crude oil production from other areas;•increased refining capacity in the Arabian Gulf or West Africa;•increased use of existing and future crude oil pipelines in the Arabian Gulf or West Africa;•a decision by Arabian Gulf or West African oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;•armed conflict in the Arabian Gulf and West Africa and political or other factors; and•the development, availability and relative costs of nuclear power, natural gas, coal and other alternative sources of energy.In addition, volatile economic conditions affecting the world economies may result in reduced consumption of oil products and a decreased demand for our vessels and lowercharter rates, which could have a material adverse effect on our earnings and our ability to pay dividends.We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings and our ability to pay dividends.The 23 vessels that we currently operate are primarily employed in the spot market. We are therefore highly dependent on spot market charter rates.Changes in the price of fuel and regulations may adversely affect our profits.Fuel, including bunkers, is a significant, if not the largest, expense in our shipping operations, and changes in the price of fuel may adversely affect our profitability. The priceand supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by OPEC andother oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns, which may reduce our profitability andhave a material adverse effect on our future performance, results of operations, cash flows and financial position.Effective January 1, 2020, the IMO implemented a new regulation for a 0.50% global sulfur cap on emissions from vessels. Under this new global cap, vessels must use marinefuels with a sulfur content of no more than 0.50% against the former regulations specifying a maximum of 3.50% sulfur in an effort to reduce the emission of sulfur oxide into theatmosphere.All of our vessels have transitioned to burning IMO compliant fuels. Low sulfur fuel of 0.50% sulfur content or lower, is presently more expensive than the non-compliantHeavy Fuel Oil containing 3.5% sulfur and may become more expensive, although the cost differential in 2020 was less than anticipated.Our operations and the performance of our vessels, and as a result our results of operations, cash flows and financial position, may be negatively affected to the extent thatcompliant sulfur fuel oils are unavailable, of low or inconsistent quality, or upon occurrence of any of the other foregoing events. Costs of compliance with these and other relatedregulatory changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows and financial position. As a result, an increasein the price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation. Further, fuel may become much more expensive in the future, whichmay reduce the profitability and competitiveness of our business versus other forms of transportation.7Table of ContentsInability to renew the fleet would adversely affect our business, results of operations, financial condition and ability to pay dividends.If we do not set aside funds or are unable to borrow or raise funds for vessel replacement, we will be unable to replace the vessels in our fleet upon the expiration of their usefullives. Our cash flows and income are dependent on the revenues earned by the chartering of our vessels. If we are unable to replace the vessels in our fleet upon the expiration of theiruseful lives, our business, results of operations, financial condition and ability to pay dividends would be adversely affected. Any funds set aside for vessel replacement will not beavailable for dividends.The international Suezmax tanker industry has experienced volatile charter rates and vessel values and there can be no assurance that these charter rates and vessel values will notdecrease in the near future.The Baltic Dirty Tanker Index, or the BDTI, a U.S. dollar daily average of charter rates issued by the Baltic Exchange that takes into account input from brokers around the worldregarding crude oil fixtures for various routes and oil tanker vessel sizes, has been volatile. For example, in 2020, the BDTI reached a high of 1,550 and a low of 403. The Baltic CleanTanker Index, or BCTI, a comparable index to the BDTI, has similarly been volatile. In 2020, the BCTI reached a high of 2,190 and a low of 309. Although the BDTI and BCTI were 600 and515, respectively, as of April 20, 2021, there can be no assurance that the crude oil and petroleum products charter market will increase, and the market could again decline. This volatilityin charter rates depends, among other factors, on changes in the supply and demand for tanker capacity and changes in the supply and demand for oil and oil products, the demand forcrude oil and petroleum products, the inventories of crude oil and petroleum products in the United States and in other industrialized nations, oil refining volumes, oil prices, and anyrestrictions on crude oil production imposed by the Organization of the Petroleum Exporting Countries, or OPEC, and non-OPEC oil producing countries.Charter rates in the Suezmax tanker industry are volatile. We anticipate that future demand for our vessels, and in turn our future charter rates, will be dependent upon economicgrowth in the world’s economies, as well as seasonal and regional changes in demand and changes in the capacity of the world’s fleet. There can be no assurance that economic growthwill not stagnate or decline leading to a decrease in vessel values and charter rates. A decline in vessel values and charter rates would have an adverse effect on our business, financialcondition, results of operation and ability to pay dividends.Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates.Declines in charter rates and other market deterioration could cause us to incur impairment charges.Our vessels are evaluated for impairment continuously or whenever events or changes in circumstances indicate that the carrying amount of a vessel may not be recoverable.The review for potential impairment indicators and projection of future cash flows related to the vessel is complex and requires us to make various estimates, including future charterrates and earnings from operating the vessel. All of these items have historically been volatile. We estimate the undiscounted cash flows from operating the vessels over their remaininguseful lives and compare those to the net carrying values of the vessels. If the total estimated undiscounted net cash flows for a vessel are less than the carrying amount of the vesselthe vessel is deemed impaired and written down to its fair market value. The carrying values of our vessels may not represent their fair market value at any point in time because themarket prices of secondhand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. Any impairment charges incurred as a result of declines in charter ratescould negatively affect our business, financial condition and operating results. Impairment is assessed on a vessel by vessel basis.8Table of ContentsThe value of our vessels may be depressed in the event that we sell a vessel.Tanker values have generally experienced high volatility. Investors can expect the fair market value of our tankers to fluctuate, depending on general economic and marketconditions affecting the tanker industry and competition from other shipping companies, types and sizes of vessels and other modes of transportation. In addition, as vessels age, theygenerally decline in value. These factors will affect the value of our vessels for purposes of covenant compliance under our borrowing facilities and at the time of any vessel sale. If forany reason we sell a tanker at a time when tanker prices have fallen, the sale may be at less than the tanker’s carrying amount on our financial statements, with the result that we wouldalso incur a loss on the sale and a reduction in earnings, which could reduce our ability to pay dividends. The carrying values of our vessels may not represent their charter-free marketvalue at any point in time.An over-supply of Suezmax tanker capacity may lead to reductions in charter rates, vessel values, and profitability.The market supply of Suezmax tankers is affected by a number of factors such as demand for energy resources, oil, and petroleum products, as well as strong overall economicgrowth in parts of the world economy including Asia. If the capacity of new ships delivered exceeds the capacity of tankers being scrapped and lost, tanker capacity will increase. If thesupply of tanker capacity increases and if the demand for tanker capacity does not increase correspondingly, charter rates could materially decline. A reduction in charter rates and thevalue of our vessels may have a material adverse effect on our results of operations and our ability to pay dividends.Delays or defaults by the shipyards in the construction of our newbuildings could increase our expenses and diminish our net income and cash flows.Vessel construction projects are generally subject to risks of delay that are inherent in any large construction project, which may be caused by numerous factors, includingshortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet qualityand/or performance standards, financial or operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtainrequired permits or approvals, design or engineering changes and work stoppages and other labor disputes, adverse weather conditions, pandemics or any other events of force majeure.Significant delays could adversely affect our financial position, results of operations and cash flows. Additionally, failure to complete a project on time may result in the delay of revenuefrom that vessel, and we will continue to incur costs and expenses related to delayed vessels, such as supervision expense and interest expense for the issued and outstanding debt. Asof December 31, 2020, we have orders for two Suezmax newbuildings for delivery in 2022.Political instability, terrorist attacks, international hostilities and global public health threats can affect the seaborne transportation industry, which could adversely affect ourbusiness.We conduct most of our operations outside of the United States, and our business, results of operations, cash flows, financial condition and ability to pay dividends, if any, inthe future may be adversely affected by changing economic, political and government conditions in the countries and regions where our vessels are employed or registered. Moreover,we operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts.Currently, the world economy faces a number of challenges, including trade tensions between the United States and China and between the United States and the EuropeanUnion, continuing turmoil and hostilities in the Middle East, the Korean Peninsula, North Africa, Venezuela, Iran and other geographic areas and countries, continuing economicweakness in the European Union, geopolitical events such as the withdrawal of the U.K. from the European Union ("Brexit"), continuing threat of terrorist attacks around the world,continuing instability and conflicts and other recent occurrences in the Middle East and in other geographic areas and countries such as those between the United States and NorthKorea or Iran, or between the Houthi and Arab counties in Yemen, or internally in Libya, and stabilizing growth in China, as well as the public health concerns stemming from the COVID-19 outbreak.9Table of ContentsThe threat of future terrorist attacks around the world, continues to cause uncertainty in the world's financial markets and international commerce and may affect our business,operating results and financial condition. Continuing conflicts and recent developments in the Middle East, may lead to additional acts of terrorism and armed conflict around the world,which may contribute to further economic instability in the global financial markets and international commerce. Additionally, any escalations between the United States and Iran couldresult in retaliation from Iran that could potentially affect the shipping industry, through increased attacks on vessels in the Strait of Hormuz (which already experienced an increasednumber of attacks on and seizures of vessels in 2019 and 2020). These uncertainties could also adversely affect our ability to obtain additional financing or insurance on terms acceptableto us or at all. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.Additionally, in Europe, large sovereign debts and fiscal deficits, low growth prospects and high unemployment rates in a number of countries have contributed to the rise ofEurosceptic parties, which would like their countries to leave the Euro. The Brexit further increases the risk of additional trade protectionism. Brexit, or similar events in otherjurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatorymatters could in turn adversely impact our business and operations.Also, China and the US have implemented certain increasingly protective trade measures with continuing trade tensions, including significant tariff increases, between thesecountries, although it is not yet certain how the new Biden administration will proceed with US China relations. These trade barriers to protect domestic industries against foreignimports, depress shipping demand. Protectionist developments, or the perception they may occur, may have a material adverse effect on global economic conditions, and maysignificantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regions globally, (b) the length of time requiredto transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect the quantity of goods to be shipped, shipping time schedules, voyagecosts and other associated costs, which could have an adverse impact on our charterers’ business, operating results and financial condition and could thereby affect their ability to maketimely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of operations,financial condition and our ability to pay any cash distributions to our stockholders.In addition, public health threats such as influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred in various parts ofthe world in which we operate, including China, Japan and South Korea, which may even become pandemics, such as the COVID-19 virus, could lead to a significant decrease of demandfor the transportation of crude oil. Such events may also adversely impact our operations, including timely rotation of our crews, the timing of completion of any outstanding or futurenewbuilding projects or repair works in drydock as well as the operations of our customers. Delayed rotation of crew may adversely affect the mental and physical health of our crew andthe safe operation of our vessels as a consequence.We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results ofoperations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.We rely on our computer systems and network infrastructure across our operations, including on our vessels. The safety and security of our vessels and efficient operation ofour business, including processing, transmitting and storing electronic and financial information, are dependent on computer hardware and software systems, which are increasinglyvulnerable to security breaches and other disruptions. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect ourbusiness and results of operations.Our vessels rely on information systems for a significant part of their operations, including navigation, provision of services, propulsion, machinery management, powercontrol, communications and cargo management. We have in place safety and security measures on our vessels and onshore operations to secure our vessels against cyber-securityattacks and any disruption to their information systems. However, these measures and technology may not adequately prevent security breaches despite our continuous efforts toupgrade and address the latest known threats. A disruption to the information system of any of our vessels could lead to, among other things, wrong routing, collision, grounding andpropulsion failure.10Table of ContentsBeyond our vessels, we rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on ourinformation systems. However, these measures and technology may not adequately prevent security breaches. The technology and other controls and processes designed to secure ourconfidential and proprietary information, detect and remedy any unauthorized access to that information were designed to obtain reasonable, but not absolute, assurance that suchinformation is secure and that any unauthorized access is identified and addressed appropriately. Such controls may in the future fail to prevent or detect, unauthorized access to ourconfidential and proprietary information. In addition, the foregoing events could result in violations of applicable privacy and other laws. If confidential information is inappropriatelyaccessed and used by a third party or an employee for illegal purposes, we may be responsible to the affected individuals for any losses they may have incurred as a result ofmisappropriation. In such an instance, we may also be subject to regulatory action, investigation or liable to a governmental authority for fines or penalties associated with a lapse in theintegrity and security of our information systems.Our operations, including our vessels, and business administration could be targeted by individuals or groups seeking to sabotage or disrupt such systems and networks, or tosteal data, and these systems may be damaged, shutdown or cease to function properly (whether by planned upgrades, force majeure, telecommunications failures, hardware or softwarebreak-ins or viruses, other cyber-security incidents or otherwise). For example, the information systems of our vessels may be subject to threats from hostile cyber or physical attacks,phishing attacks, human errors of omission or commission, structural failures of resources we control, including hardware and software, and accidents and other failures beyond ourcontrol. The threats to our information systems are constantly evolving, and have become increasingly complex and sophisticated. Furthermore, such threats change frequently and areoften not recognized or detected until after they have been launched, and therefore, we may be unable to anticipate these threats and may not become aware in a timely manner of such asecurity breach, which could exacerbate any damage we experience.We may be required to expend significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences. Acyber-attack could result in significant expenses to investigate and repair security breaches or system damages and could lead to litigation, fines, other remedial action, heightenedregulatory scrutiny and diminished customer confidence. In addition, our remediation efforts may not be successful and we may not have adequate insurance to cover these losses.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 have a materialadverse effect on our business, results of operations, cash flows and financial condition.If we do not manage relationships with customers or successfully integrate any acquired Suezmax tankers, we may not be able to grow or effectively manage our growth.One of our principal strategies is to continue to grow by expanding our operations and adding vessels to our fleet. Our future growth will depend upon a number of factors,some of which may not be within our control. These factors include our ability to:•identify suitable tankers and/or shipping companies for acquisitions at attractive prices, which may not be possible if asset prices rise too quickly,•manage relationships with customers and suppliers,•identify businesses engaged in managing, operating or owning tankers for acquisitions or joint ventures,•integrate any acquired tankers or businesses successfully with our then-existing operations,•hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet,11Table of Contents•identify additional new markets,•improve our operating, financial and accounting systems and controls, and•obtain required financing for our existing and new operations.Our failure to effectively identify, purchase, manage customer relationships and integrate any tankers or businesses could adversely affect our business, financial condition andresults of operations. We may incur unanticipated expenses as an operating company. It is possible that the number of employees employed by the company, or current operating andfinancial systems may not be adequate as we implement our plan to expand the size of our fleet. Finally, acquisitions may require additional equity issuances or debt issuances (withamortization payments), both of which could lower dividends per share. If we are unable to expand or execute the certain aspects of our business or events noted above, our financialcondition and dividend rates may be adversely affected.Because some of our expenses are incurred in foreign currencies, we are exposed to exchange rate fluctuations, which could negatively affect our results of operations.The charterers of our vessels pay us in U.S. dollars. While we mostly incur our expenses in U.S. dollars, we may incur expenses in other currencies, most notably the NorwegianKroner. Declines in the value of the U.S. dollar relative to the Norwegian Kroner, or the other currencies in which we may incur expenses in the future, would increase the U.S. dollar costof paying these expenses and thus would affect our results of operations.Risks Related to the Operations of Our Vessels and RegulationsThe operation of Suezmax tankers involves certain unique operational risks.The operation of Suezmax tankers has unique operational risks associated with the transportation of oil. An oil spill may cause significant environmental damage, and acatastrophic spill could exceed the insurance coverage available. Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited bya terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in tankers.Further, our vessels and their cargoes will be at risk of being damaged or lost because of events such as marine disasters, bad weather and other acts of God, businessinterruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy, diseases (such as the ongoing outbreak of COVID-19),quarantine and other circumstances or events. Changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to timeresulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These hazards may result in death or injury to persons, loss of revenues or property, thepayment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships and market disruptions, delay or rerouting.If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and may be substantial. We may have to paydrydocking costs that our insurance does not cover at all or in full. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of theserepairs, may adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are convenientlylocated. We may be unable to find space at a suitable drydocking facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located relative to ourvessels’ positions. 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 financialcondition. Further, the total loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator. If we are unable to adequately maintain or safeguardour vessels, we may be unable to prevent any such damage, costs or loss which could negatively impact our business, financial condition, results of operations, cash flows and ability topay dividends.12Table of ContentsWe operate our Suezmax tankers worldwide and as a result, our vessels are exposed to international risks which may reduce revenue or increase expenses.The international shipping industry is an inherently risky business involving global operations. Our vessels are at a risk of damage or loss because of events such asmechanical failure, collision, human error, war, terrorism, piracy, cargo loss and bad weather. In addition, changing economic, regulatory and political conditions in some countries,including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These sorts of eventscould interfere with shipping routes and result in market disruptions which may reduce our revenue or increase our expenses.International shipping is subject to various security and customs inspections and related procedures in countries of origin and destination and trans-shipment points. Inspection procedures can result in the seizure of the cargo and/or our vessels, delays in loading, offloading or delivery, and the levying of customs duties, fines or other penaltiesagainst us. It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could alsoimpose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes ordevelopments may have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.We expect that our vessels will call in ports where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To theextent 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 facegovernmental or other regulatory claims which could have an adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.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, the Gulf of Aden off the Coast ofSomalia and, in particular, the Gulf of Guinea region off of Nigeria, which experienced increased incidents of piracy in recent years. Acts of piracy and war like conditions could result inharm or danger to the crews onboard our vessels. In addition, if piracy attacks occur in regions in which our vessels are deployed that insurers’ characterized as “war risk” zones or bythe Joint War Committee as “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 costs which may be incurred to the extent we employ onboard security guards, could increase in such circumstances. We may not be adequatelyinsured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or anincrease in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.Maritime claimants could arrest one or more of our vessels, which could interrupt our cash flow.Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims ordamages. In many jurisdictions, a maritime lien-holder may enforce its lien by "arresting" or "attaching" a vessel through foreclosure proceedings. The arrest or attachment of one ormore of our vessels could result in a significant loss of earnings for the related off-hire period. In addition, in jurisdictions where the "sister ship" theory of liability applies, a claimantmay arrest the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. In countries with "sistership" liability laws, claims might be asserted against us or any of our vessels for liabilities of other vessels that we own.13Table of ContentsGovernments could requisition our vessels during a period of war or emergency resulting in a loss of earnings.A government of a vessel's registry could requisition for title or seize one or more of our vessels. Requisition for title occurs when a government takes control of a vessel andbecomes the owner. A government could also requisition one or more of our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectivelybecomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels could have amaterial adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividendsIf we purchase secondhand vessels, we may not receive warranties from the builder and operating cost may increase as a result of aging of the fleetOur current business strategy includes additional growth through the acquisition of new and secondhand vessels. Following a physical inspection of secondhand vessels priorto purchase, we do not have 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 andoperated exclusively by us. Accordingly, we may not discover defects or other problems with such vessels prior to purchase. Any such hidden defects or problems, when detected maybe expensive to repair, and if not detected, may result in accidents or other incidents for which we may become liable to third parties. Also, when purchasing previously owned vessels,we do not receive the benefit of any builder warranties if the vessels we buy are older than one year.In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less fuel efficient than more recentlyconstructed vessels due to improvements in engine technology. Governmental regulations, safety and other equipment standards related to the age of vessels may require expendituresfor alterations or the addition of new equipment to some of our vessels and may restrict the type of activities in which these vessels may engage. We cannot assure you that, as ourvessels age, market conditions will justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives. As a result, regulations andstandards could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends.Our insurance may not be adequate to cover our losses that may result from our operations due to the inherent operational risks of the tanker industry.We carry insurance to protect us against most of the accident related risks involved in the conduct of our business, including marine hull and machinery insurance, protectionand indemnity insurance, which includes pollution risks, crew insurance and war risk insurance. However, we may not be adequately insured to cover losses from our operational risks,which could have a material adverse effect on us. Additionally, our insurers may refuse to pay particular claims and our insurance may be voidable by the insurers if we take, or fail totake, certain action, such as failing to maintain certification of our vessels with applicable maritime regulatory organizations. Any significant uninsured or under-insured loss or liabilitycould have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay dividends. In addition, we may not be able to obtainadequate insurance coverage at reasonable rates in the future during adverse insurance market. Any loss of a vessel or extended vessel off-hire, due to an accident or otherwise, couldhave a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends.An increase in operating costs would decrease earnings and dividends per share.Under the charters of all of our operating vessels, we are responsible for vessel operating expenses. Our vessel operating expenses include the costs of crew, lube oil,provisions, deck and engine stores, insurance and maintenance and repairs, which depend on a variety of factors, many of which are beyond our control. 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. Increases in any of these expenses would decrease earningsand dividends per share.14Table of ContentsWe may be unsuccessful in competing in the highly competitive international Suezmax tanker market.The operation of Suezmax tankers and transportation of crude and petroleum products is extremely competitive. Competition arises primarily from other tanker owners, including major oilcompanies as well as independent tanker companies. Competition for the transportation of oil and oil products can be intense and depends on price, location, size, age, condition and theacceptability of the tanker and its operators to the charterers. We will have to compete with other tanker owners, including major oil companies as well as independent tanker companiesand our market share may decrease in the future and we may not find profitable employment for our vessels, which could adversely affect our financial condition and our ability toexpand our business.We are subject to laws and regulations which can adversely affect our business, results of operations, cash flows and financial condition, and our ability to pay dividends.Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and internationalregulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These requirementsinclude, but are not limited to, the United States (U.S.) Oil Pollution Act of 1990 (OPA), the Comprehensive Environmental Response, Compensation, and Liability Act (generally referredto as CERCLA), the U.S. Clean Water Act (CWA), the U.S. Clean Air Act (CAA), the U.S. Outer Continental Shelf Lands Act, European Union (EU) Regulations, the InternationalMaritime Organization, or IMO, International Convention on Civil Liability for Oil Pollution Damage of 1969 (as from time to time amended and generally referred to as CLC), the IMOInternational Convention for the Prevention of Pollution from Ships of 1973 (as from time to time amended and generally referred to as MARPOL, including the designation of emissioncontrol areas (ECAs) thereunder), the IMO International Convention for the Safety of Life at Sea of 1974 (as from time to time amended and generally referred to as SOLAS), the IMOInternational Convention on Load Lines of 1966 (as from time to time amended), the International Convention on Civil Liability for Bunker Oil Pollution Damage (generally referred to asthe Bunker Convention), the IMO’s International Management Code for the Safe Operation of Ships and for Pollution Prevention (generally referred to as the ISM Code), theInternational Convention for the Control and Management of Ships’ Ballast Water and Sediments Discharge (generally referred to as the BWM Convention), International Ship and PortFacility Security Code (ISPS), and the U.S. Maritime Transportation Security Act of 2002 (generally referred to as the MTSA). Compliance with such laws, regulations and standards,where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs inorder to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions, including greenhouse gases, the management of ballastwaters, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollutionincidents. These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition and our ability to pay dividends. A failure tocomply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Environmental lawsoften impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or atfault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-nautical mile exclusive economiczone around the U.S. (unless the spill results solely from the act or omission of a third party, an act of God or an act of war). An oil spill could result in significant liability, including fines,penalties, criminal liability and remediation costs for natural resource damages under other international and U.S. federal, state and local laws, as well as third-party damages, includingpunitive damages, and could harm our reputation with current or potential charterers of our tankers. We are required to satisfy insurance and financial responsibility requirements forpotential oil (including marine fuel) spills and other pollution incidents. Although we have arranged insurance to cover certain environmental risks, and risk of environmental damagesand impacts there can be no assurance that such insurance will be sufficient to cover all such risks or that any claims will not have a material adverse effect on our business, results ofoperations, cash flows and financial condition, and our ability to pay dividends.15Table of ContentsFurthermore, the explosion of the Deepwater Horizon and the subsequent release of oil into the Gulf of Mexico, or other similar incidents in the future, may result in furtherregulation of the tanker industry, and modifications to statutory liability schemes, which could have a material adverse effect on our business, financial condition, results of operationsand cash flows. 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 released proposed changes to the Well Control Rule, effective July 15,2019, which rolled back certain reforms regarding the safety of drilling operations, and former U.S. President Trump had proposed leasing new sections of U.S. waters to oil and gascompanies for offshore drilling. The effects of these proposals and changes are currently unknown, and recently, current U.S. President Biden signed an executive order temporarilyblocking new leases for oil and gas drilling in federal waters. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of ourvessels could impact the cost of our operations and adversely affect our business.Additional legislation, regulations, or other requirements applicable to the operation of our vessels that may be implemented in the future could adversely affect our business.It should be noted that the U.S. is currently experiencing changes in its environmental policy, the results of which have yet to be fully determined. For example, in March 2017,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 Administrationannounced 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 compoundemissions 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. Furthermore, recent action by the IMO’s Maritime Safety Committee andUnited States agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats.For example, cyber-risk management systems must be incorporated by ship-owners and managers by 2021. This might cause companies to cultivate additional procedures for monitoringcybersecurity, which could require additional expenses and/or capital expenditures. However, the impact of such regulations is hard to predict at this time.Regulations relating to ballast water discharge may adversely affect our revenues and profitability.The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’sballast water. Depending on the date of the IOPP renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or afterSeptember 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. Shipsconstructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017. We currently have 13 vessels that do not comply with the updatedguideline and costs of compliance may be substantial and adversely affect our revenues and profitability.Climate change and greenhouse gas restrictions may adversely impact our operations and markets.Due to concern over the risk of climate change, a number of countries and the IMO have adopted, or are considering the adoption of, regulatory frameworks to reducegreenhouse gas emissions. These regulatory measures may include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives ormandates for renewable energy. More specifically, on October 27, 2016, the International Maritime Organization’s Marine Environment Protection Committee ("MEPC") announced itsdecision concerning 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, inApril 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 greenhousegas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the Energy Efficiency Design Index (EEDI) for new ships; (2)reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. TheEuropean Union on the other hand has indicated that it intends to accelerate its plans to include shipping into the emissions trading scheme.16Table of ContentsSince January 1, 2020, ships have to either remove sulfur from emissions or buy fuel with low sulfur content, which may lead to increased costs and supplementary investmentsfor ship owners. The interpretation of "fuel oil used on board" includes use in main engine, auxiliary engines and boilers. Shipowners may comply with this regulation by (i) using 0.5%sulfur fuels on board, which are available around the world but at a higher cost; (ii) installing scrubbers for cleaning of the exhaust gas; or (iii) by retrofitting vessels to be powered byliquefied natural gas or other alternative energy sources, which may not be a viable option due to the lack of supply network and high costs involved in this process. Costs ofcompliance with these regulatory changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows and financial position.In addition, although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations FrameworkConvention on Climate Change, which required adopting countries to implement national programs to reduce emissions of certain gases, or the Paris Agreement (discussed furtherbelow), a new treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws, regulations and obligations relating to climatechange affects the propulsion options in subsequent vessel designs and could increase our costs related to acquiring new vessels, operating and maintaining our existing vessels andrequire us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program.Revenue generation and strategic growth opportunities may also be adversely affected.Adverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climate change, may alsoadversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for oil and gas inthe future or create greater incentives for use of alternative energy sources. In addition to the peak oil risk from a demand perspective, the physical effects of climate change, includingchanges in weather patterns, extreme weather events, rising sea levels, scarcity of water resources, may negatively impact our operations. Any long-term material adverse effect on theoil and gas industry could have a significant financial and operational adverse impact on our business that we cannot predict with certainty at this time.If we fail to comply with international safety regulations, we may be subject to increased liability, which may adversely affect our insurance coverage and may result in a denial ofaccess to, or detention in, certain ports.The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the“LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that all of our vessels are in substantial compliance withSOLAS and LLMC standards.Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), ouroperations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safetymanagement system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vesselssafely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed forcompliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease availableinsurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’smanagement with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document ofcompliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of ourvessels for which the certificates are required by the IMO. The documents of compliance and safety management certificates are renewed as required.Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity andstability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oiltankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1,2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structuralrequirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers (GBS Standards).17Table of ContentsAmendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International MaritimeDangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions fromthe International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements. Amendmentswhich took effect on January 1, 2020 also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMOtype 9 tank, (2) new abbreviations for segregation groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by flammable liquid or gas.The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarersare 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 classificationsocieties, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.The IMO's Maritime Safety Committee and MEPC, respectively, each adopted relevant parts of the International Code for Ships Operating in Polar Water (the “Polar Code”). ThePolar Code, which entered into force on January 1, 2017, covers design, construction, equipment, operational, training, search and rescue as well as environmental protection mattersrelevant to ships operating in the waters surrounding the two poles. It also includes mandatory measures regarding safety and pollution prevention as well as recommendatoryprovisions. The Polar Code applies to new ships constructed after January 1, 2017, and after January 1, 2018, ships constructed before January 1, 2017 are required to meet the relevantrequirements by the earlier of their first intermediate or renewal surveyFurthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to befurther developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by2021. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of suchregulations is hard to predict at this time.Developments in safety and environmental requirements relating to the recycling of vessels may result in escalated and unexpected costs.The 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, or the Hong Kong Convention, aims to ensure ships, beingrecycled once they reach the end of their operational lives, do not pose any unnecessary risks to the environment, human health and safety. The Hong Kong Convention has yet to beratified by the required number of countries to enter into force. Upon the Hong Kong Convention’s entry into force, each ship sent for recycling will have to carry an inventory of itshazardous materials. The hazardous materials, whose use or installation are prohibited in certain circumstances, are listed in an appendix to the Hong Kong Convention. Ships will berequired to have surveys to verify their inventory of hazardous materials initially, throughout their lives and prior to the ship being recycled. The Hong Kong Convention, which iscurrently open for accession by IMO Member States, will enter into force 24 months after the date on which 15 IMO Member States, representing at least 40% of world merchantshipping by gross tonnage, have ratified or approved accession. As of the date of this annual report, 15 countries representing just over 30% of world merchant shipping tonnage haveratified or approved accession of the Hong Kong Convention, and the requirement of 40% of world merchant shipping by gross tonnage has not yet been satisfied.On November 20, 2013, the European Parliament and the Council of the EU adopted the Ship Recycling Regulation, which retains the requirements of the Hong KongConvention and requires that certain commercial seagoing vessels flying the flag of an EU Member State may be recycled only in facilities included on the European list of permitted shiprecycling facilities.18Table of ContentsThese regulatory developments, when implemented, may lead to cost escalation by shipyards, repair yards and recycling yards. This may then result in a decrease in theresidual scrap value of a vessel, and a vessel could potentially not cover the cost to comply with latest requirements, which may have an adverse effect on our future performance,results of operations, cash flows and financial position.Risks Related to our IndebtednessServicing our debt limits funds available for other purposes and if we cannot service our debt, we may lose our vessels.Borrowing under our credit facilities requires us to dedicate a part of our cash flow from operations to paying interest and installments on our indebtedness. These paymentslimit funds available for working capital, capital expenditures and other purposes, including making distributions to shareholders and further equity or debt financing in the future.Amounts borrowed under the credit facilities bear interest at variable rates. Increases in prevailing rates could increase the amounts that we would have to pay to our lenders, eventhough the outstanding principal amount remains the same, and our net income and cash flows would decrease. We expect our earnings and cash flow to vary from year to year due tothe cyclical nature of the tanker industry. In addition, our current policy is not to accumulate cash, but rather to distribute our available cash to shareholders. If we do not generate orreserve enough cash flow from operations to satisfy our debt obligations, we may have to undertake alternative financing plans, such as:•seeking to raise additional capital;•refinancing or restructuring our debt;•selling vessels or other assets; or•reducing or delaying capital investments.However, these alternative financing plans, if necessary, may not be sufficient to allow us to meet our debt obligations. If we are unable to meet our debt obligations or if someother default occurs under our credit facilities, the lenders could elect to declare that debt, together with accrued interest and fees, to be immediately due and payable and proceedagainst the collateral securing that debt, which constitutes our entire fleet.Our borrowing facilities contains restrictive covenants, which could negatively affect our growth, cause our financial performance to suffer and limit our ability to pay dividends.Our outstanding debt requires us or our subsidiaries to maintain financial covenants. Because some of these ratios are dependent on the market value of vessels, should charterrates or vessel values materially decline in the future, we may be required to take action to reduce our debt or to act in a manner contrary to our business objectives to meet any suchfinancial ratios and satisfy any such financial covenants. Events beyond our control, including changes in the economic and business conditions in the shipping markets in which weoperate, interest rate developments, changes in the funding costs of our banks, changes in vessel earnings and asset valuations and outbreaks of epidemic and pandemic of diseases,such as the ongoing outbreak of COVID-19, may affect our ability to comply with these covenants. We cannot assure you that we will meet these ratios or satisfy our financial or othercovenants or that our lenders will waive any failure to do so.These financial and other covenants may adversely affect our ability to finance future operations or limit our ability to pursue certain business opportunities or take certaincorporate actions. The covenants may also restrict our flexibility in planning for changes in our business and the industry and make us more vulnerable to economic downturns andadverse developments. A breach of any of the covenants in, or our inability to maintain the required financial ratios under the borrowing facilities would prevent us from payingdividends to our shareholders and could result in a default under our borrowing facilities. If a default occurs under our borrowing facilities, the lenders could elect to declare the issuedand outstanding debt, together with accrued interest and other fees, to be immediately due and payable and foreclose on the collateral securing that debt, which could constitute all orsubstantially all of our assets.19Table of ContentsVolatility of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and cash flow.London Interbank Offered Rate (“LIBOR”) is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and otherpressures may cause LIBOR to be eliminated or to perform differently than in the past. The consequences of these developments cannot be entirely predicted, but could include anincrease in the cost of our variable rate indebtedness and obligations. LIBOR has been volatile in the past, with the spread between LIBOR and the prime lending rate wideningsignificantly at times. Because the interest rates borne by a majority of our outstanding indebtedness fluctuates with changes in LIBOR, significant changes in LIBOR would have amaterial effect on the amount of interest payable on our debt, 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 LIBORcalculation process in recent years, it is likely that LIBOR will be phased out in the future. As a result, lenders have provisions that entitle the lenders, in their discretion, to replacepublished 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 costscould 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 LIBORwill likely stop such reporting after 2021, when their commitment to reporting information ends. The Alternative Reference Rate Committee, a committee convened by the Federal Reservethat 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 transitionfrom LIBOR to SOFR (or an alternative rate) could be significant for us.We may not be able to finance our future capital commitments.We cannot guarantee that we will be able to obtain financing at all or on terms acceptable to us. If adequate funds are not available, we may have to reduce expenditures forinvestments in new and existing projects, which could hinder our growth and prevent us from realizing potential revenues from prior investments which will have a negative impact onour cash flows and results of operations.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 obtainfinancing or refinance our existing and future credit facilities on acceptable terms.Global financial markets and economic 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 a steep and abruptdownturn, which volatility and downturn may continue as COVID-19 continues to spread. Credit markets and the debt and equity capital markets have been distressed and theuncertainty surrounding the future of the global credit markets has resulted in reduced access to credit worldwide, particularly for the shipping industry. These issues, along withsignificant write-offs in the financial services sector, the re-pricing of credit risk and the current weak economic conditions, have made, and will likely continue to make, it difficult toobtain additional financing. The current state of global financial markets and current economic conditions might adversely impact our ability to issue additional equity at prices that willnot be dilutive to our existing shareholders or preclude us from issuing equity at all. Economic conditions and the economic slow-down resulting from COVID-19 and the intentionalgovernmental responses to the virus 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 fromthe public and private equity and debt markets has become more difficult. Many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existingdebt 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 financing will be available if needed and to the extent required,or that we will be able to refinance our existing and future credit facilities, on acceptable terms or at all. If financing or refinancing is not available when needed, or is available only onunfavorable terms, 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 orotherwise take advantage of business opportunities as they arise. The recent COVID-19 outbreak has negatively impacted, and may continue to negatively impact, global economicactivity, demand for energy, and funds flows and sentiment in the global financial markets. Continued economic disruption caused by the continued failure to control the spread of thevirus could significantly impact our ability to obtain additional debt financing.20Table of ContentsWe cannot assure you that we will be able to refinance our indebtedness.In the event that we are unable to service or repay our debt obligations out of our operating activities, we may need to refinance our indebtedness and we cannot assure youthat we will be able to do so on terms that are acceptable to us or at all. The actual or perceived tanker market rate environment and prospects and the market value of our fleet, amongother things, may materially affect our ability to obtain new debt financing. If we are unable to refinance our indebtedness, we may choose to issue securities or sell certain of our assetsin order to satisfy our debt obligations.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 ornegatively impact our results of operations and cash flows.We have entered into various contracts, including charter agreements with our customers, our borrowing facilities, and from time to time we may enter into newbuildingcontracts. Such agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number offactors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime and offshore industries, the overall financialcondition of the counterparty, charter rates received for specific types of vessels, work stoppages and other labor disturbances, including as a result of the recent outbreak of COVID-19and various expenses. For example, the combination of a reduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-based credit facilitiesand the lack of availability of debt or equity financing may result in a significant reduction in the ability of our charterers to make charter payments to us. In addition, in depressed marketconditions, our charterers and customers may no longer need a vessel that is currently 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 parties or avoid their obligations under those contracts. Should a counterparty fail to honor itsobligations 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 cashflows. As a result, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as ourability to pay dividends, if any, in the future, and comply with covenants in our borrowing facilities.Risks Relating to Investing in Our Common SharesOur share price may continue to be highly volatile, which could lead to a loss of all or part of a shareholder’s investment.The market price of our common shares has fluctuated widely since our common shares began trading in on the NYSE. Over the last few years, the stock market has experiencedprice and volume fluctuations, especially due to factors relating to the ongoing outbreak of COVID-19. This volatility has sometimes been unrelated to the operating performance ofparticular companies. During 2020, the price of our common shares experienced a high of $7.20 in April and a low of $2.46 in March. As of April 22, 2021, the price of our common shareswas $3.15. This market and share price volatility relating to the effects of COVID-19, as well as general economic, market or political conditions, has and could further reduce the marketprice of our common shares in spite of our operating performance and could also increase our cost of capital, which could prevent us from accessing debt and equity capital on termsacceptable to us or at all.21Table of ContentsThe market price of our common shares is affected by a variety of factors, including:•fluctuations in interest rates;•fluctuations in the availability or the price of oil and chemicals;•fluctuations in foreign currency exchange rates;•announcements by us or our competitors;•changes in our relationships with customers or suppliers;•actual or anticipated fluctuations in our semi-annual and annual results and those of other public companies in our industry;•changes in United States or foreign tax laws;•actual or anticipated fluctuations in our operating results from period to period;•shortfalls in our operating results from levels forecast by securities analysts;•market conditions in the shipping industry and the general state of the securities markets;•business interruptions caused by COVID-19;•mergers and strategic alliances in the shipping industry;•changes in government regulation;•a general or industry-specific decline in the demand for, and price of, shares of our common shares resulting from capital market conditions independent of our operatingperformance;•the loss of any of our key management personnel;•our failure to successfully implement our business plan; and•issuance of shares.We operate in a cyclical and volatile industry and cannot guarantee that we will continue to make cash distributions.We have made cash distributions quarterly since October 1997. It is possible that our revenues could be reduced as a result of decreases in charter rates or that we could incurother expenses or contingent liabilities that would reduce or eliminate the cash available for distribution as dividends. Further, our credit facilities limit our ability to distribute dividends.For more information, please see “Item 5. Operating and Financial Review and Prospectus—B. Liquidity and Capital Resources—Our Borrowing Activities.” We may not continue to paydividends at rates previously paid or at all. If we do not pay dividends, the market price for our common shares must appreciate for investors to realize a gain on their investment. Thisappreciation may not occur and our common shares may in fact depreciate in value, in part because of any future decreases in or elimination of our dividend payments.22Table of ContentsFuture sales of our common stock could cause the market price of our common stock to decline.The market price of our common stock could decline due to sales of our shares in the market or the perception that such sales could occur. This could depress the market priceof our common stock and make it more difficult for us to sell equity securities in the future at a time and price that we deem appropriate, or at all.Ineffective internal controls could impact the Company’s business and financial results.The Company’s internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, thecircumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financialstatements. If the Company fails to maintain the adequacy of its internal controls, including any failure to implement required new or improved controls, or if the Company experiencesdifficulties in their implementation, the Company’s business and financial results could be harmed and the Company could fail to meet its financial reporting obligations.Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance (“ESG”) policies mayimpose additional costs on us or expose us to additional risks.Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups, certain institutional investors, investment funds, lendersand 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 aresult 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, maysuffer from reputational damage and the business, financial condition, and/or stock price of such a company could be materially and adversely affected.We may face increasing pressures from investors, lenders and other market participants, who are increasingly focused on climate change, to prioritize sustainable energypractices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing andfuture investors and lenders remain 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 beharmed.Additionally, certain investors and lenders may exclude shipping companies, such as us, from their investing portfolios altogether due to environmental, social and governancefactors. These limitations in both the debt and equity capital markets may affect our ability to grow as our plans for growth may include accessing the equity and debt capital markets. Ifthose markets are unavailable, or if we are unable to access alternative means of financing on acceptable terms, or at all, we may be unable to implement our business strategy, whichwould have a material adverse effect on our financial condition and results of operations and impair our ability to service our indebtedness. Further, it is likely that we will incur additionalcosts 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 effecton our business and financial condition.A decision of our Board of Directors and the laws of Bermuda may prevent the declaration and payment of dividends.Our ability to declare and pay dividends is subject at all times to the discretion of our board of directors, or the Board, and compliance with Bermuda law, and may be dependent,among other things, upon our having sufficient available distributable reserves. For more information, please see “Item 8. Financial Information—Dividend Policy.” We may not continueto pay dividends at rates previously paid or at all.23Table of ContentsWe have antitakeover protections which could prevent a change of control.We have antitakeover protections which could prevent a third party to acquire us without the consent of our board of directors. On June 16, 2017, our Board adopted ashareholders rights agreement. This shareholders’ rights plan was designed to enable us to protect shareholder interests in the event that an unsolicited attempt is made for a businesscombination with, or a takeover of, the Company. Our shareholders’ rights plan is not intended to deter offers that our Board determines are in the best interests of our shareholders.Our vessels may call on ports located in countries or territories that are subject to sanctions or embargoes imposed by the U.S. government, the European Union, the United Nationsor other governmental authorities, which could adversely affect the trading price of our common stock. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and suchsanctions and embargo laws and regulations may be amended or expanded over time. Current or future counterparties of ours, including charterers, may be affiliated with persons orentities that are or may be in the future the subject of sanctions or embargoes imposed by the U.S., the EU, and/or other international bodies. If we determine that such sanctions requireus 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 or embargoes, our operations maybe adversely affected, we may suffer reputational harm, and/or the price at which our common stock trades might be adversely affected.Although we believe that we have been in compliance with applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be noassurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation couldresult in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, orbeing required, to divest their interest, or not to invest, in us. Additionally, some investors may decide not to invest in our company simply because we do business with companies thatdo business in sanctioned countries. The determination by these investors not to invest in, or to divest from, our common stock may adversely affect the price at which our commonstock trades. 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 thoseviolations 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 embargolaws, or engaging in operations associated with those countries or territories pursuant to contracts with third parties that are unrelated to those countries or territories or entitiescontrolled 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 andgovernmental actions in the countries or territories that we operate in.Because we are a foreign corporation, you may not have the same rights that a shareholder in a U.S. corporation may have.We are incorporated in the Islands of Bermuda. Our memorandum of association, bye-laws and the Companies Act, 1981 of Bermuda (the “Companies Act”), govern our affairs.The Companies Act does not as clearly establish your rights and the fiduciary responsibilities of our directors as do statutes and judicial precedent in some U.S. jurisdictions. Therefore,you may have more difficulty in protecting your interests as a shareholder in the face of actions by the management, directors or controlling shareholders than would shareholders of acorporation incorporated in a United States jurisdiction. There is a statutory remedy under Section 111 of the Companies Act which provides that a shareholder may seek redress in thecourts as long as such shareholder can establish that our affairs are being conducted, or have been conducted, in a manner oppressive or prejudicial to the interests of some part of theshareholders, including such shareholder.24Table of ContentsWe are incorporated in Bermuda and it may not be possible for our investors to enforce U.S. judgments against us.We are incorporated in the Islands of Bermuda. Substantially all of our assets are located outside the U.S. In addition, most of our directors and officers are non-residents of theU.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it may be difficult or impossible for U.S. investors to serve processwithin the U.S. upon us, or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countriesin which we are incorporated or where our vessels are located (1) would enforce judgments of U.S. courts obtained in actions against us based upon the civil liability provisions ofapplicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us based on those laws.We may have to pay tax on United States source income, which would reduce our earnings.Under the United States Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such asourselves, attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be characterized as U.S. source shipping income and suchincome is subject to a 4% United States federal income tax, without the benefit of deductions, unless that corporation is entitled to a special tax exemption under the Code which appliesto income derived by certain non-United States corporations from the international operations of ships. We believe that we currently qualify for this statutory tax exemption and we havetaken, and will continue to take, this position on the Company’s United States federal income tax returns. However, there are several risks that could cause us to become subject to tax onour United States source shipping income. Due to the factual nature of the issues involved, we can give no assurances as to our tax-exempt status for our future taxable years.If we are not entitled to this statutory tax exemption for any taxable year, we would be subject for any such year to a 4% U.S. federal income tax on our U.S. source shippingincome, without the benefit of deductions. The imposition of this tax could have a negative effect on our business and would result in decreased earnings available for distribution to ourshareholders.If the United States Internal Revenue Service were to treat us as a “passive foreign investment company,” that could have adverse tax consequences for United States shareholders.A foreign corporation is treated as a “passive foreign investment company,” or PFIC, for United States federal income tax purposes, if either (1) at least 75% of its gross incomefor any taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of thosetypes of passive income. For purposes of these tests, cash is treated as an asset that produces passive income, and passive income includes dividends, interest, and gains from the saleor exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade orbusiness. Income derived from the performance of services does not constitute passive income. United States shareholders of a PFIC may be subject to a disadvantageous United Statesfederal income tax regime with respect to the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.We believe that we ceased to be a PFIC beginning with the 2005 taxable year. Based on our current and expected future operations, we believe that we are not currently a PFIC,nor do we anticipate that we will become a PFIC for any future taxable year. As a result, non-corporate United States shareholders should be eligible to treat dividends paid by us in 2006and thereafter as “qualified dividend income” which is subject to preferential tax rates.We expect to derive more than 25% of our income each year from our spot chartering or time chartering activities. We also expect that more than 50% of the value of our assetswill be devoted to our spot chartering and time chartering. Therefore, since we believe that such income will be treated for relevant United States federal income tax purposes as servicesincome, rather than rental income, we have taken, and will continue to take, the position that such income should not constitute passive income, and that the assets that we own andoperate in connection with the production of that income, in particular our vessels, should not constitute assets that produce or are held for the production of passive income forpurposes of determining whether we are a PFIC in any taxable year.25Table of ContentsThere is, however, no direct legal authority under the PFIC rules addressing our method of operation. We believe there is substantial legal authority supporting our positionconsisting of case law and United States Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters asservices income rather than rental income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income forother tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine thatwe are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of ouroperations.If the IRS or a court of law were to find that we are or have been a PFIC for any taxable year beginning with the 2005 taxable year, our United States shareholders who ownedtheir shares during such year would face adverse United States federal income tax consequences and certain information reporting obligations. Under the PFIC rules, unless thoseUnited States shareholders made or make an election available under the Code (which election could itself have adverse consequences for such United States shareholders), such UnitedStates shareholders would be subject to United States federal income tax at the then highest income tax rates on ordinary income plus interest upon excess distributions (i.e.,distributions received in a taxable year that are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or the United Statesshareholder’s holding period for our common shares) and upon any gain from the disposition of our common shares, as if the excess distribution or gain had been recognized ratablyover the United States shareholder’s holding period of our common shares. In addition, non-corporate United States shareholders would not be eligible to treat dividends paid by us as“qualified dividend income” if we are a PFIC in the taxable year in which such dividends are paid or in the immediately preceding taxable year.We may become subject to taxation in Bermuda which would negatively affect our results.At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by ourshareholders in respect of our shares. We have obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in theevent that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estateduty or inheritance tax, such tax shall not, until March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except insofar as such taxapplies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or leased by us in Bermuda. We cannot assure you that a future Minister wouldhonor that assurance, which is not legally binding, or that after such date we would not be subject to any such tax. If we were to become subject to taxation in Bermuda, our results ofoperations could be adversely affected.As a Bermuda exempted company incorporated under Bermuda law with subsidiaries in another offshore jurisdiction, our operations may be subject to economic substancerequirements.On December 5, 2017, following an assessment of the tax policies of various countries by the Code of Conduct Group for Business Taxation of the European Union (the“COCG”), the Council of the European Union approved and published Council conclusions containing a list of non-cooperative jurisdictions for tax purposes (the “Conclusions”). Although at that time not considered “non-cooperative jurisdictions,” certain countries, including Bermuda and the Marshall Islands were listed as having “tax regimes that facilitateoffshore structures which attract profits without real economic activity.” In connection with the Conclusions, and to avoid being placed on the list of “non-cooperative jurisdictions,”the government of Bermuda, among others, committed to addressing COCG proposals relating to economic substance for entities doing business in or through their respectivejurisdictions and to pass legislation to implement any appropriate changes by the end of 2018.The Economic Substance Act 2018 and the Economic Substance Regulations 2018 of Bermuda (the “Economic Substance Act” and the “Economic Substance Regulations”,respectively) became operative on 31 December 2018. The Economic Substance Act applies to every registered entity in Bermuda that engages in a relevant activity and requires thatevery such entity shall maintain a substantial economic presence in Bermuda. A relevant activity for the purposes of the Economic Substance Act is banking business, insurancebusiness, fund management business, financing and leasing business, headquarters business, shipping business, distribution and service centre business, intellectual propertybusiness and conducting business as a holding entity, which means acting as a pure equity holding entity.26Table of ContentsThe Economic Substance Act provides that a registered entity that carries on a relevant activity complies with economic substance requirements if (a) it is directed andmanaged in Bermuda, (b) its core income-generating activities (as may be prescribed) are undertaken in Bermuda with respect to the relevant activity, (c) it maintains adequate physicalpresence in Bermuda, (d) it has adequate full time employees in Bermuda with suitable qualifications and (e) it incurs adequate operating expenditure in Bermuda in relation to therelevant activity.A registered entity that carries on a relevant activity is obliged under the Economic Substance Act to file a declaration in the prescribed form (the “Declaration”) with theRegistrar of Companies (the “Registrar”) on an annual basis.The Economic Substance Regulations provide that minimum economic substance requirements shall apply in relation to an entity if the entity is a pure equity holding entitywhose sole function is to acquire and hold shares or an equitable interest in other entities, and the shares or equitable interest are controlling stakes in other entities. The minimumeconomic substance requirements include a) compliance with applicable corporate governance requirements set forth in the Bermuda Companies Act 1981 including keeping records ofaccount, books and papers and financial statements and b) submission of a Declaration. Additionally, the Economic Substance Regulations provide that a pure equity holding entitycomplies with economic substance requirements where it also has adequate people for holding and managing equity participations, and adequate premises in Bermuda.Certain of our subsidiaries may from time to time be organized in other jurisdictions identified by the COCG based on global standards set by the Organization for Economic Co-operation and Development with the objective of preventing low-tax jurisdictions from attracting profits from certain activities. These jurisdictions, including the Marshall Islands, havealso enacted economic substance laws and regulations which we may be obligated to comply with. If we fail to comply with our obligations under the Economic Substance Act or anysimilar law applicable to us in any other jurisdiction, we could be subject to financial penalties and spontaneous disclosure of information to foreign tax officials in related jurisdictionsand may be struck from the register of companies in Bermuda or such other jurisdiction. Any of these actions could have a material adverse effect on our business, financial conditionand results of operations.ITEM 4.INFORMATION ON THE COMPANYA.History and Development of the CompanyNordic American Tankers Limited was formed on June 12, 1995 under the name Nordic American Tanker Shipping Limited and organized under the laws of the Islands ofBermuda. In June 2011, we changed our name to Nordic American Tankers Limited. We maintain our principal offices at LOM Building, 27 Reid Street, Hamilton HM 11, Bermuda. Ourtelephone number at such address is (441) 292-7202 and we maintain an internet site at www.nat.bm. The SEC maintains an Internet site that contains reports, proxy and informationstatements, and other information regarding issuers that file electronically with the SEC. The address of the SEC’s internet site is www.sec.gov. None of the information contained onthese websites is incorporated into or forms a part of this annual report. Our common shares trade under the symbol “NAT” on the New York Stock Exchange, or the NYSE.We are an international tanker company originally formed for the purpose of acquiring and chartering double-hull Suezmax tankers. Our fleet currently consists of 25 vessels(including 2 newbuildings). During 2020, we have placed orders for two Suezmax newbuildings from Samsung shipyard in South Korea for delivery in 2022.The vessels in our fleet are homogenous and interchangeable, which is a business strategy we refer to as the “Nordic American System”. The Nordic American System istransparent and predictable with the key elements of ships, people and capital. Further, we are a dividend company with the objective of having a strong balance sheet and low G&Acosts. Under the “Nordic American System”, we are focusing on close customer relationships and serving the “Big Oil” companies with a top quality fleet.27Table of ContentsOur 25 tankers (including 2 newbuildings) in our fleet are all Suezmax vessels, which have a carrying capacity of one million barrels of oil, are highly versatile, and are able to beutilized on most long-haul trade routes. A homogenous fleet streamlines operating and administration costs, which helps keep our cash-breakeven point low.As from May 2018 we sold 10 vessels. The sales were a part of our commercial strategy and represented an important adjustment of the fleet. Our newbuilding program consistsof two Suezmax newbuildings ordered on September 23, 2020, at Samsung shipyard in South Korea for delivery in 2022.Cash dividends are a priority for us and we have paid quarterly dividends for 94 consecutive quarters. In 2020, we have declared and paid quarterly dividends in total of $0.45per share and we have declared a dividend in the first quarter of 2021 of $0.02 that was payable on March 31, 2021.We pay our dividends from cash on hand. We have an operating cash break-even level of about $8,000 per day per vessel, which we consider low in the industry. The cashbreak-even rate is the amount of average daily revenue our vessels would need to earn in order to cover our vessel operating expenses (excluding general and administrative expenses,interest expenses and all other cash charges).Hermitage Offshore Services Ltd., or HOS, (formerly known as Nordic American Offshore Ltd) was considered as an associate and related party of us during the period we actedas manager and held a substantial part of the outstanding common stock. Our management services ended in 2019. During 2020 we sold our remaining shares and as of December 31,2020, we no longer hold any interest in HOS.In conjunction with delivery of three vessels from Samsung shipyard during 2018, or the 2018-built Vessels, we entered into final agreements for the financing. Under the termsof the financing agreement, the lender has provided financing of 77.5% of the purchase price for each of the three 2018-built Vessels. After delivery of each of the vessels, we enteredinto ten-year bareboat charter agreements. We are obligated to purchase the vessels upon the completion of the ten-year bareboat charter agreement and also have the option topurchase the vessels after sixty and eighty-four months.On February 12, 2019, we entered into a new five-year senior secured credit facility for $306.1 million, or the 2019 Senior Secured Credit Facility. Borrowings under the facility aresecured by first priority mortgages over the Company’s vessel (excluding the three 2018-built Vessels) and assignments of earnings and insurance. The loan has an annual amortizationequal to a twenty-year maturity profile, carries a floating LIBOR interest rate plus a margin and matures in February 2024. Further, we incorporated NAT Bermuda Holdings Ltd(“NATBH”) as a wholly-owned subsidiary of NAT and transferred the ownership of twenty vessels used as collateral from NAT to NATBH.28Table of ContentsOn March 29, 2019, we entered into an equity distribution agreement with B. Riley Securities, Inc. (formerly known as B. Riley FBR, Inc.), acting as a sales agent, under which wemay, from time to time, offer and sell our common stock through an At-the-Market Offering, or $40 million ATM, program having an aggregate offering price of up to $40,000,000. As ofDecember 31, 2019, we had raised gross and net proceeds (after deducting sales commissions and other fees and expenses) of $18.6 million and $17.9 million, respectively, by issuing andselling 5,260,968 common shares. In 2020, we have raised further gross and net proceeds of $21.4 million and $20.7 million, respectively, by issuing and selling 4,215,478 common shares.No further proceeds are available under the $40 million ATM as of December 31, 2020.On October 16, 2020, we entered into a new equity distribution agreement with B. Riley Securities, Inc., acting as a sales agent, under which we may, from time to time, offer andsell our common stock through an At-the-Market Offering, or $60 million ATM, program having an aggregate offering price of up to $60,000,000. As of December 31, 2020, we had notraised any proceeds under this ATM. Subsequent to December 31, 2020, we have raised gross and net proceeds of $10.0 million and $9.7 million, respectively, by issuing and selling2,989,769 common shares.On December 16, 2020, we entered into a new loan agreement for the borrowing of $30.0 million. The loan is considered an accordion loan under the 2019 Senior Secured CreditFacility. The loan has an annual amortization equal to a twenty-year maturity profile, carries a floating LIBOR interest rate plus a margin and matures in February 2024.On December 22, 2020, we entered into final agreements for the financing of the two Suezmax newbuildings to be delivered from Samsung Shipyard in South Korea in 2022. Wehave secured up to 80% financing of the newbuilding price for these two vessels at similar terms as for the 2018-built Vessels with Ocean Yield ASA.For more information, please see “Item 5.B. Liquidity and Capital Resources” with regard to the above described transactions.As of April 29, 2021, we have 154,435,881 common shares issued and outstanding.B.Business OverviewOur FleetOur fleet currently consists of 25 Suezmax crude oil tankers (including 2 newbuildings), of which the vast majority have been built in Korea. The majority of our vessels areemployed in the spot market, together with one vessel currently on a longer term time charter agreement expiring in late 2021 or later. The vessels are considered homogenous andinterchangeable as they have approximately the same freight capacity and ability to transport the same type of cargo.VesselBuilt in DeadweightTons Deliveredto NAT in Nordic Freedom2005 159,331 2005 Nordic Moon2002 160,305 2006 Nordic Apollo2003 159,998 2006 Nordic Cosmos2003 159,999 2006 Nordic Grace2002 149,921 2009 Nordic Mistral2002 164,236 2009 Nordic Passat2002 164,274 2010 Nordic Vega2010 163,940 2010 Nordic Breeze2011 158,597 2011 Nordic Zenith2011 158,645 2011 Nordic Sprinter2005 159,089 2014 Nordic Skier2005 159,089 2014 Nordic Light2010 158,475 2015 Nordic Cross2010 158,475 2015 Nordic Luna2004 150,037 2016 Nordic Castor2004 150,249 2016 Nordic Sirius2000 150,183 2016 Nordic Pollux2003 150,103 2016 Nordic Star2016 157,738 2016 Nordic Space2017 157,582 2017 Nordic Aquarius2018 157,338 2018 Nordic Cygnus2018 157,526 2018 Nordic Tellus2018 157,407 2018 Newbuilding (1)2022 156,800 2022 Newbuilding (1)2022 156,800 2022 (1)Scheduled for delivery in 202229Table of ContentsEmployment of Our FleetIt is our policy to operate our vessels either in the spot market or on shorter-term time charters. Large international oil companies, oil traders and independent oil companiesboth in the Western and the Eastern parts of the world are important customers.Spot Charters: Tankers operating in the spot market are typically chartered for a single voyage which may last up to several weeks. Under a voyage charter, we are responsiblefor paying voyage expenses and the charterer is responsible for any delay at the loading or discharging ports. When our tankers are operating on spot charters, the vessels are tradedfully at the risk and reward of the Company. Revenues are recognized in a manner to reflect the transfer of the services to our customers over the duration of the voyage and freight isgenerally billed to the customer upon discharge of the cargo. The Company considers it appropriate to present this type of arrangement on a gross basis in the Statements of Operations.For further information concerning our accounting policies, please see Note 2 to our financial statements.The tanker industry has historically been stronger in the fall and winter months in anticipation of increased oil consumption in the norther hemisphere during the winter months.Seasonal variations in tanker demand normally result in seasonal fluctuations in the spot market charters.Time Charters: Under a time charter, the charterer is responsible and pays for the voyage expenses, such as port, canal and fuel costs, while the shipowner is responsible andpays for vessel operating expenses, including, among other costs, crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and costs relatingto a vessel’s intermediate and special surveys. Revenue from time charter contracts are recognized daily over the term of the charter. Time charter agreements with profit-sharing arerecognized when the contingency related to it is resolved.Technical ManagementThe technical management of our vessels is handled by companies under direct instructions from NAT. The ship management firms V.Ships Norway AS, ColumbiaShipmanagement Ltd, Cyprus and Hellespont Ship Management GmbH & Co KG, Germany, provide the technical management services. The compensation paid under the technicalmanagement agreements is in accordance with industry standards.The International Tanker MarketInternational seaborne oil and petroleum products transportation services are mainly provided by two types of operators: major oil company captive fleets (both private andstate-owned) and independent shipowner fleets. Both types of operators transport oil under short-term contracts (including single-voyage “spot charters”) and long-term time charterswith oil companies, oil traders, large oil consumers, petroleum product producers and government agencies. The oil companies own, or control through long-term time charters,approximately one third of the current world tanker capacity, while independent companies own or control the balance of the fleet. The oil companies use their fleets not only totransport their own oil, but also to transport oil for third-party charterers in direct competition with independent owners and operators in the tanker charter market.30Table of ContentsThe oil transportation industry has historically been subject to regulation by national authorities and through international conventions. Over recent years, however, anenvironmental protection regime has evolved which has a significant impact on the operations of participants in the industry in the form of increasingly more stringent inspectionrequirements, closer monitoring of pollution-related events, and generally higher costs and potential liabilities for the owners and operators of tankers.In order to benefit from economies of scale, tanker charterers typically charter the largest possible vessel to transport oil or products, consistent with port and canal dimensionalrestrictions and optimal cargo lot sizes. A tanker’s carrying capacity is measured in deadweight tons, or dwt, which is the amount of crude oil measured in metric tons that the vessel iscapable of loading. ULCCs and VLCCs typically transport crude oil in long-haul trades, such as from the Arabian Gulf to Rotterdam via the Cape of Good Hope. Suezmax tankers alsoengage in long-haul crude oil trades as well as in medium-haul crude oil trades, such as from the Mediterranean and Arabian Gulf towards the Far East, i.e. China, India and otheremerging economies in Asia that absorb the shortfall from what the traditional routes, from West Africa to the East Coast of the United States, used to represent. Aframax-size vesselsgenerally engage in both medium-and short-haul trades of less than 1,500 miles and carry crude oil or petroleum products. Smaller tankers mostly transport petroleum products in short-haul to medium-haul trades.The 2020 Tanker Market (Source; Fearnleys)Suezmax earnings in 2020, based on the fixture date for forward loading for modern vessels, averaged $31,200 per day for the year, up 2% from an average $30,600 per day in2019. The year was a tale of two halves, however, with average earnings in the first half of close to $50,000 per day, which declined to around operating cost levels during the secondhalf. Earnings in the highly correlated VLCC and Aframax segments averaged $52,900 per day and $25,200 per day in 2020, up 36% and down 7% vs. 2019, respectively. The main reasonfor the VLCC’s outperformance in 2020 was a greater extent of support from floating storage through the summer.The total crude oil and product tanker fleet above 25,000 dwt grew a net 3.1% in 2020, with the crude tanker fleet expanding 3.3% and the product tanker fleet growing 2.5%. Thiswas down from the 5.7% growth in 2019 due to fewer deliveries and high slippage at the end of the year, and despite very low scrapping. It was also slightly lower than the ten-yearaverage total tanker fleet growth of 3.5%.Suezmax fleet growth of 3.1% was down from growth of 4.1% in 2019, and although it was higher than the 1.9% growth rate experienced in 2018, it was still well below the lastten years’ average of 4.7%. Eighteen vessels were delivered in 2020, compared to 26 vessels in 2019, whilst only one was scrapped, which took the total fleet at the end of 2020 to 566vessels. Deliveries in 2020 were back-end loaded, where six vessels were delivered in the first half vs. twelve in the second, which further exacerbated the weaker rate development laterin the year. 28% of the fleet were modern, fuel-efficient vessels, up from 27% a year earlier.There was minimal scrapping in 2020. Demolition of ships slowed further to 1.8 million dwt from 3.3 million dwt in 2019 and a historically high 19.1 million in 2018. As of thebeginning of 2020 there were 23 Suezmax vessels at or above the past 10-year average scrap age of 22 years, and 55 vessels existing within the 20+ years age group.The Suezmax orderbook stood at 51 vessels of 8 million dwt at the beginning of 2021, or 9.0% of the fleet. The total crude oil and product tanker orderbook for vessels above25,000 dwt counted 52.1 million dwt, or 8.9% of the fleet. This remains among the lowest since the 1990s.Tanker demand started off on a strong footing last year, with slight y/y global oil production growth in Q1, but importantly for tankers there was continued growth in Atlanticbasin production whilst production East of Suez declined, which is beneficial with regards to the distance side of the ton-mile equation. Demand held up quite well until April, as SaudiArabia and Russia could not agree on further oil supply cuts in March, and rather ended in a (short-lived) supply war. This coincided with the deep negative impact from Covid-19 onglobal oil demand, estimated by the IEA to have declined by 8.7 mbpd for the full year. This led onshore inventories to fill quickly, making floating storage necessary. With a widecontango for the Brent oil price curve, there was room for very high rates to store oil on tankers. This tied up a large portion of the fleet through the summer, before gradually easingwhen the oil market started to rebalance.31Table of ContentsEventually, the OPEC agreed with Russia and various other producers (OPEC+) about an oil production cut of nearly 10 mbpd, in an effort to rebalance the market. Furthermore,Saudi Arabia, Kuwait and the UAE cut an additional 1.18 mbpd in June. This inevitably affected crude oil volumes to be shipped at sea negatively, and as onshore storage capacity freedup, floating storage vessels were also freed up, effectively leading to higher supply growth to add to pressure on tanker rates.Although the OPEC+ gradually eased some of the cuts during the second half of the year, this gave only limited respite for tanker volumes. In Q4 global oil production isestimated by the IEA to have been 92.4 mbpd, a sharp reduction compared to the 101.5 mbpd produced the same quarter one year earlier, which also gives some indications to themagnitude of the decline in tanker volumes. In terms of geographical spread, tanker demand was to some extent helped by Atlantic production being down relatively less than the MiddleEast, partly due to Libya coming back with 1.2 mbpd of production toward the end of the year, but this was not sufficient to alter the overall balance.The Tanker Market 2021Reported spot rates in the first quarter of 2021 has seen a gradual improvement from the fourth quarter of 2020, and the average Suezmax earnings per day increased from $6,455in the fourth quarter of 2020 to $8,723 for the first quarter of 2021 based on the indicated rates published by Clarksons. The quoted rates are an average of observations. From the time avoyage is booked and the rate is reported to the market until the vessel loads the cargo and commences there can be a delay of up to 30 days. As such, from an accounting perspective,a voyage booked at the end of a quarter may see the majority of its revenues being recorded in the following quarter’s results. The earnings for vessel operators is for this reason notnecessarily expected to fluctuate in an identical manner as the indicative rates reported by Clarksons on a quarter over quarter basis.As of March 12, 2021, the orderbook for conventional Suezmax tankers stood at 40 vessels in total. No additional orders for Suezmax vessels has been placed with the shipyardsso far in 2021. In 2021 a total of 21 Suezmaxes are expected to be added to the world fleet and 9 of these have already been delivered in the first quarter of 2021.2020 saw a gradual increase in oil prices from the low of $30 per barrel in March 2020 when OPEC talks collapsed and resulted in an oversupply of oil into the market. Theincreased output from oil producers met a reduced end-user demand for oil and resulted in oil inventories building throughout the first half of 2020. After OPEC+ agreed on cuts in oilproduction, the second half of 2020 saw a gradually improving oil price as a consequence of decreasing global oil inventories, and continued OPEC+ production cuts. This had anegative effect on the oil tanker market. In 2021 we are seeing a reversal to this market activity. With oil inventories nearing a return to historic averages and oil prices on the rise, atabout $66 per barrel for Brent Crude as of April 21, 2021, the signs of a world undersupplied with oil is evident. With oil prices now at healthy levels for most oil producers and plenty ofspare capacity among OPEC, Russia and the US, we see increased oil output and increased tanker demand for the remainder of 2021.Environmental and Other Regulations in the Shipping IndustryGovernment regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and locallaws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage,handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources.Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures.32Table of ContentsA variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicablenational authorities such as the United States Coast Guard (“USCG”), harbor master or equivalent), classification societies, flag state administrations (countries of registry) andcharterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure tomaintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels.Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for allof our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. Webelieve that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses,certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricterrequirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition,a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.International Maritime OrganizationThe International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels (the “IMO”), has adopted the InternationalConvention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,”the International Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of 1966 (the “LL Convention”). MARPOLestablishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmfulsubstances in packaged forms. MARPOL is applicable to drybulk, tanker and LNG carriers, among other vessels, and is broken into six Annexes, each of which regulates a differentsource of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and Vrelate 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; newemissions standards, titled IMO-2020, took effect on January 1, 2020.In 2013, the IMO’s Marine Environmental Protection Committee, or the “MEPC,” adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or “CAS.”These amendments became effective on October 1, 2014, and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of BulkCarriers and Oil Tankers, or “ESP Code,” which provides for enhanced inspection programs. We may need to make certain financial expenditures to comply with these amendments.Air EmissionsIn September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxideemissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatilecompounds from cargo tanks and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas tobe established with more stringent controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration(from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or “PCBs”) are also prohibited. We believe that all our vessels are currentlycompliant in all material respects with these regulations.33Table of ContentsThe Marine Environment Protection Committee, or “MEPC,” adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozonedepleting substances, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressivereduction of the amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxideemissions limit (reduced from 3.50%) starting from January 1, 2020. This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels or certain exhaust gas cleaningsystems. Ships are now required to obtain bunker delivery notes and International Air Pollution Prevention (“IAPP”) Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and took effect March 1, 2020. These regulationssubject ocean-going vessels to stringent emissions controls, and may cause us to incur substantial costs.Sulfur content standards are even stricter within certain “Emission Control Areas,” or (“ECAs”). As of January 1, 2015, ships operating within an ECA were not permitted to usefuel with sulfur content in excess of 0.1% m/m. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specifiedportions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these areas will be subject to stringent emission controlsand may cause us to incur additional costs. Other areas in China are subject to local regulations that impose stricter emission controls. If other ECAs are approved by the IMO, or othernew 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”) orthe states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPCmeeting held from March to April 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect. Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx produced by vesselswith a marine diesel engine installed and constructed on or after January 1, 2016. Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built on or after January 1, 2021. The EPA promulgated equivalent (and in somesenses stricter) emissions standards in 2010. As a result of these designations or similar future designations, we may be required to incur additional operating or other costs.As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collectand report annual data on fuel oil consumption to an IMO database, with the first year of data collection having commenced on January 1, 2019. The IMO intends to use such data asthe first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship EnergyEfficiency Management Plans (“SEEMPS”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy EfficiencyDesign Index (“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014. Additionally, MEPC 75 adopted amendments toMARPOL 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.Additionally, MEPC 75 introduced draft amendments to Annex VI which impose new regulations to reduce greenhouse gas emissions from ships. These amendments introducerequirements to assess and measure the energy efficiency of all ships and set the required attainment values, with the goal of reducing the carbon intensity of international shipping. The requirements include (1) a technical requirement to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index (“EEXI”), and (2) operational carbon intensityreduction requirements, based on a new operational carbon intensity indicator (“CII”). The attained EEXI is required to be calculated for ships of 400 gross tonnage and above, inaccordance 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 verifytheir actual annual operational CII achieved against a determined required annual operational CII. Additionally, MEPC 75 proposed draft amendments requiring that, on or beforeJanuary 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 mandatorycontent. The draft amendments introduced at MEPC 75 may be adopted at the MEPC 76 session, to be held during 2021.34Table of ContentsWe may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation ofexpensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.Safety Management System RequirementsThe SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the“LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance withSOLAS and LLMC standards.Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), ouroperations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safetymanagement system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vesselssafely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management teams have developed forcompliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease availableinsurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’smanagement with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document ofcompliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of ourvessels for which the certificates are required by the IMO. The documents of compliance and safety management certificates are renewed as required.Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity andstability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oiltankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1,2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structuralrequirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers (“GBS Standards”).Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International MaritimeDangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions fromthe International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods and (3) new mandatory training requirements. Amendmentswhich took effect on January 1, 2020 also reflect the latest material from the UN Recommendations on the Transport of Dangerous Goods, including (1) new provisions regarding IMOtype 9 tank, (2) new abbreviations for segregation groups, and (3) special provisions for carriage of lithium batteries and of vehicles powered by flammable liquid or gas.The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarersare 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 classificationsocieties, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.35Table of ContentsFurthermore, recent action by the IMO’s Maritime Safety Committee and United States agencies indicates that cybersecurity regulations for the maritime industry are likely to befurther developed in the near future in an attempt to combat cybersecurity threats. For example, cyber-risk management systems must be incorporated by ship-owners and managers by2021. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of suchregulations is hard to predict at this time.Pollution Control and Liability RequirementsThe IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. Forexample, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in 2004. The BWMConvention entered into force on September 8, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless or avoid the uptake or discharge ofnew or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatoryballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballastwater management certificate.On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that the dates are triggered by the entry into force dateand not the dates originally in the BWM Convention. This, in effect, makes all vessels delivered before the entry into force date “existing vessels” and allows for the installation ofballast water management systems on such vessels at the first International Oil Pollution Prevention (“IOPP”) renewal survey following entry into force of the convention. The MEPCadopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates wasalso 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 over400 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 themaximum 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 treatballast water and eliminate unwanted organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, orwhich 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’samendments to the BWM Convention took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water managementsystems, 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 bySeptember 8, 2024. Costs of compliance with these regulations may be substantial. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM Convention whichwould require a commissioning test of the ballast water management system for the initial survey or when performing an additional survey for retrofits. This analysis will not apply toships that already have an installed BWM system certified under the BWM Convention. These amendments are expected to enter into force on June 1, 2022.Once mid-ocean exchange ballast water treatment requirements become mandatory under the BWM Convention, the cost of compliance could increase for ocean carriers andmay 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 theintroduction 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 ballastexchange, or undertake some alternate measure, and to comply with certain reporting requirements.36Table of ContentsThe IMO adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984 and 1992, and amended in2000 (“the CLC”). Under the CLC and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner may bestrictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions. The 1992 Protocol changed certainlimits on liability expressed using the International Monetary Fund currency unit, the Special Drawing Rights. The limits on liability have since been amended so that the compensationlimits on liability were raised. The right to limit liability is forfeited under the CLC where the spill is caused by the shipowner’s actual fault and under the 1992 Protocol where the spill iscaused by the shipowner’s intentional or reckless act or omission where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons coveredby it to maintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We have protection and indemnity insurance forenvironmental incidents. P&I Clubs in the International Group issue the required Bunkers Convention “Blue Cards” to enable signatory states to issue certificates. All of our vessels arein possession of a CLC State issued certificate attesting that the required insurance coverage is in force.The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage (the “Bunker Convention”) to impose strict liability on ship owners(including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The BunkerConvention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable nationalor international limitation regime (but not exceeding the amount calculated in accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carriedas fuel in ship’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States where the CLC or theBunker Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.Anti‑Fouling RequirementsIn 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the “Anti‑fouling Convention.” The Anti‑foulingConvention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls ofvessels. Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an InternationalAnti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced.In November 2020, MEPC 75 approved draft amendments to the Anti-fouling Convention to prohibit anti-fouling systems containing cybutryne, which would apply to shipsfrom January 1, 2023, or, for ships already bearing such an anti-fouling system, at the next scheduled renewal of the system after that date, but no later than 60 months following the lastapplication to the ship of such a system. These amendments may be formally adopted at MEPC 76 in 2021.We have obtained Anti‑fouling System Certificates for all of our vessels that are subject to the Anti‑fouling Convention.Compliance EnforcementNoncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurancecoverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not incompliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, each of our vessels isISM Code certified. However, there can be no assurance that such certificates will be maintained in the future. The IMO continues to review and introduce new regulations. It isimpossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.37Table of ContentsUnited States RegulationsThe U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability ActThe U.S. Oil Pollution Act of 1990 (“OPA”) established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affectsall “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial seaand 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” inthe case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a thirdparty, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, includingbunkers (fuel). OPA defines these other damages broadly to include:(i) injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;(ii) injury to, or economic losses resulting from, the destruction of real and personal property;(iii) loss of subsistence use of natural resources that are injured, destroyed or lost;(iv) net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources; (v) lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and(vi) net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or healthhazards, and loss of subsistence use of natural resources.OPA contains statutory caps on liability and damages; such caps do not apply to direct cleanup costs. Effective November 12, 2019, the USCG adjusted the limits of OPAliability for a tank vessel, other than a single-hull tank vessel, over 3,000 gross tons liability to the greater of $2,300 per gross ton or $19,943,400 (subject to periodic adjustment forinflation. These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by aresponsible party (or its agent, employee or a person acting pursuant to a contractual relationship) or a responsible party’s gross negligence or willful misconduct. The limitation onliability similarly does not apply if the responsible party fails or refuses to (i) report the incident as required by law where the responsible party knows or has reason to know of theincident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal WaterPollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.38Table of ContentsCERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damages for injury to, ordestruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if thedischarge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 pergross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (renderingthe responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or theprimary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsibleperson fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels toestablish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject.Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. Wecomply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.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 regulationsregarding 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. Forexample, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxedcertain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reformsregarding the safety of drilling operations, and former U.S. President Trump had proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling. The effectsof these proposals and changes are currently unknown, and recently, current U.S. President Biden signed an executive order temporarily blocking new leases for oil and gas drilling infederal waters. 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 andadversely affect our business.OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at aminimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigablewaterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardoussubstance. These laws may be more stringent than U.S. federal law. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants withintheir waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners’ responsibilities underthese laws. The Company intends to comply with all applicable state regulations in the ports where the Company’s vessels call.We currently maintain pollution liability coverage insurance in the amount of $1.0 billion per incident for each of our vessels. If the damages from a catastrophic spill were toexceed our insurance coverage, it could have an adverse effect on our business and results of operation.Other United States Environmental InitiativesThe U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate standards applicable to emissions of volatile organiccompounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning andconducting other operations in regulated port areas. The CAA also requires states to draft State Implementation Plans, or “SIPs,” designed to attain national health-based air qualitystandards in each state. Although state-specific, SIPs may include regulations concerning emissions resulting from vessel loading and unloading operations by requiring the installationof vapor control equipment. Our vessels operating in such regulated port areas with restricted cargoes are equipped with vapor recovery systems that satisfy these existingrequirements.39Table of ContentsThe U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit orexemption, 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 anddamages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expandingfederal 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“waters of the United States.” The proposed rule was published in the Federal Register on February 14, 2019 and was subject to public comment. On October 22, 2019, the agenciespublished a final rule repealing the 2015 Rule defining “waters of the United States” and recodified the regulatory text that existed prior to the 2015 Rule. The final rule became effectiveon December 23, 2019. On January 23, 2020, the EPA published the “Navigable Waters Protection Rule,” which replaces the rule published on October 22, 2019, and redefines “waters ofthe United States.” This rule became effective on June 22, 2020, although the effective date has been stayed in at least one U.S. state pursuant to court order. The effect of this rule iscurrently unknown.The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballastwater before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels fromentering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waterspursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018 and replaces the 2013 Vessel General Permit (“VGP”) program (whichauthorizes 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 managementregulations 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 vesselsequipped 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 WaterAct (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 watertreatment 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 tocomply 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 forour 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 theimplementation of other port facility disposal procedures at potentially substantial cost, or may otherwise restrict our vessels from entering U.S. waters.European Union RegulationsIn October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, ifcommitted with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting thedischarge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships orwhere human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions frommaritime 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 causeus to incur additional expenses.40Table of ContentsThe European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age andflag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and adefinitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements onclassification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to usereduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VIrelating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in the Baltic, the North Sea and the EnglishChannel (the so called “SOx-Emission Control Area”). As of January 2020, EU member states must also ensure that ships in all EU waters, except the SOx-Emission Control Area, usefuels with a 0.5% maximum sulfur content.On September 15, 2020, the European Parliament voted to include greenhouse gas emissions from the maritime sector in the European Union’s carbon market from 2022. Thiswill require shipowners to buy permits to cover these emissions. Contingent on another formal approval vote, specific regulations are forthcoming and are expected to be proposed by2021.International Labour OrganizationThe International Labour Organization (the “ILO”) is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 (“MLC 2006”). A Maritime LaborCertificate 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 ininternational 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 withand are certified to meet MLC 2006.Greenhouse Gas RegulationCurrently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on ClimateChange, which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with targetsextended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any newtreaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gasemissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limitgreenhouse gas emissions from ships. The U.S. initially entered into the agreement, but on June 1, 2017, former U.S. President Trump announced that the United States intends towithdraw from the Paris Agreement, and the withdrawal became effective on November 4, 2020. On January 20, 2021, U.S. President Biden signed an executive order to rejoin the ParisAgreement, which the U.S. officially rejoined on February 19, 2021.At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions fromships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initialstrategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of theEEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing themout entirely. The initial strategy notes that technological innovation, alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition.These regulations could cause us to incur additional substantial expenses.The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990 levels by 2020. The EU also committed to reduce itsemissions by 20% under the Kyoto Protocol’s second period from 2013 to 2020. Starting in January 2018, large ships over 5,000 gross tonnage calling at EU ports are required to collectand publish data on carbon dioxide emissions and other information. As previously discussed, regulations relating to the inclusion of greenhouse gas emissions from the maritime sectorin the European Union’s carbon market are also forthcoming.41Table of ContentsIn 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 certainmobile sources and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, former U.S. President Trump signed an executiveorder 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 methaneemissions. 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 enactenvironmental regulations that would affect our operations.Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at theinternational level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant financial expenditures which wecannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sealevel changes or certain weather events.Vessel Security RegulationsSince the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. MaritimeTransportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirementsaboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Shipand Port Facility Security Code (“the ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attainan International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may bedetained, 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-boardinstallation 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 butonly 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 keptonboard 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’sidentification 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 certificationrequirements.The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vesselshave on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have asignificant financial impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including theGulf of Aden and Arabian Sea area. Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk ofuninsured losses could significantly affect our business. Costs are incurred in taking additional security measures in accordance with Best Management Practices to Deter Piracy,notably those contained in the BMP5 industry standard.42Table of ContentsInspection by Classification SocietiesThe hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that avessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it acondition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of ClassificationSocieties, the IACS. The IACS has adopted harmonized Common Structural Rules, or “the Rules,” which apply to oil tankers and bulk carriers contracted for construction on or after July1, 2015. The Rules attempt to create a level of consistency between IACS Societies. All of our vessels are certified as being “in class” by all the applicable Classification Societies (e.g.,American Bureau of Shipping, Lloyd’s Register of Shipping).A vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous surveycycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every 30 to 36 months for inspection of theunderwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable tocarry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carrycargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.Risk of Loss and Liability InsuranceGeneralThe operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due topolitical circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills andother environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners,operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liabilityinsurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all riskscan be insured, specific claims may be rejected, and we might not be always able to obtain adequate insurance coverage at reasonable rates.Hull and Machinery InsuranceWe procure marine hull and machinery and war risk insurance, which include the risk of actual or constructive total loss, for all of the vessels in our fleet. The vessels in our fleetare each covered up to at least fair market value, with deductibles of $350,000 per vessel per incident. We also arranged increased value coverage for each vessel. Under this increasedvalue coverage, in the event of total loss of a vessel, we will be able recover for amounts not recoverable under the hull and machinery policy. We generally do not maintain insuranceagainst loss of hire (except for certain charters for which we consider it appropriate), which covers business interruptions that result in the loss of use of a vessel.Protection and Indemnity InsuranceProtection and indemnity insurance is provided by mutual protection and indemnity associations, or “P&I Associations,” and covers our third-party liabilities in connectionwith our shipping activities. This includes third-party liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, claimsarising from collisions with other vessels, damage to other third-party property, pollution arising from oil or other substances and salvage, towing and other related costs, includingwreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or “clubs.”43Table of ContentsOur current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The 13 P&I Associations that comprise the International Groupinsure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website statesthat the Pool provides a mechanism for sharing all claims in excess of US$ 10 million up to, currently, approximately US$ 8.2 billion. As a member of a P&I Association, which is a memberof the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associationsand members of the shipping pool of P&I Associations comprising the International Group.CompetitionWe operate in what we refer to as the Nordic American System, which describes our operation of our homogenous Suezmax tanker fleet in markets that are highly competitiveand based primarily on supply and demand. We currently operate the majority of our vessels in the spot market. We compete for charters on the basis of price, vessel location, size, ageand condition of the vessel, as well as on our reputation as an operator. For more information on the “Nordic American System”, please see “Item 4.A. History and Development of theCompany.”Permits and AuthorizationsWe are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits,licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel’s crew and theage of a vessel. We have been able to obtain all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental orotherwise, may be adopted which could limit our ability to do business or increase our cost of doing business.SeasonalityHistorically, oil trade and, therefore, charter rates increased in the winter months and eased in the summer months as demand for oil in the Northern Hemisphere rose in colderweather and fell in warmer weather. The tanker industry, in general, has become less dependent on the seasonal transport of heating oil than a decade ago as new uses for oil and oilproducts have developed, spreading consumption more evenly over the year. This is most apparent from the higher seasonal demand during the summer months due to energyrequirements for air conditioning and motor vehicles.C.Organizational StructureSee Exhibit 8.1 to this Form 20-F for a list of our significant subsidiaries.D.Property, Plant and EquipmentPlease see “Item 4. Information on the Company B. Business Overview—Our Fleet”, for a description of our vessels. The vessels are mortgaged as collateral under the 2019Senior Secured Credit Facility including the $30 million Accordion Loan and the financing agreements with Ocean Yield.ITEM 4A.UNRESOLVED STAFF COMMENTSNone.44Table of ContentsITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTSThe following management’s discussion and analysis should be read in conjunction with our historical financial statements and notes thereto included elsewhere in this report.This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially fromthose anticipated in these forward-looking statements as a result of certain factors, such as those set forth in the section entitled “Item 3. Key Information—D. Risk Factors” andelsewhere in this annual report.A.Operating ResultsBusiness overviewOur fleet currently consists of 25, including 2 newbuildings, Suezmax crude oil tankers. The contracts for the two Suezmax newbuildings with Samsung shipyard in South Korea,scheduled for delivery in the first half of 2022, were announced by us in September 2020. The majority of our vessels are employed in the spot market, together with one vessel currentlyon a longer term time charter agreement expiring in late 2021 or later. The vessels are considered homogenous and interchangeable as they have approximately the same freight capacityand ability to transport the same type of cargo.YEAR ENDED DECEMBER 31, 2020 COMPARED TO YEAR ENDED DECEMBER 31, 2019 Years Ended December 31, All figures in USD ‘000 2020 2019 Variance Voyage Revenue 354,619 317,220 11.8%Voyage Expenses (121,089) (141,770) -14.6%Vessel Operating Expenses (66,883) (66,033) 1.3%Impairment Loss on Vessels - - General and Administrative Expenses (17,586) (13,481) 30.5%Depreciation Expenses (67,834) (63,965) 6.0%Net Operating (Loss) Income 81,227 31,971 154.1%Interest Income 96 298 -67.8%Interest Expenses (31,481) (38,390) -18.0%Other Financial Income (Expenses) 191 (4,231) N/A Net (Loss) Income 50,033 (10,352) N/A Management believes that net voyage revenue, a non-GAAP financial measure, provides additional meaningful information because it enables us to compare the profitability ofour vessels which are employed under bareboat charters, spot related time charters and spot charters. Net voyage revenues divided by the number of days on the charter provides theTime Charter Equivalent (TCE) Rate. Net voyage revenues and TCE rates are widely used by investors and analysts in the tanker shipping industry for comparing the financialperformance of companies and for preparing industry averages. We believe that our method of calculating net voyage revenue is consistent with industry standards. The table belowreconciles our net voyage revenues to voyage revenues. Years Ended December 31, All figures in USD ‘000, except TCE rate per day 2020 2019 Variance Voyage Revenue 354,619 317,220 11.8%Less Voyage expenses (121,089) (141,770) -14.6%Net Voyage Revenue 233,530 175,450 33.1%Vessel Calendar Days (1) 8,418 8,395 0.3%Less off-hire days 952 293 224.9%Total TCE days 7,466 8,102 (7.8%)TCE Rate per day (2) $31,279 $21,655 44.4%Total Days for vessel operating expenses 8,418 8,395 0.3%(1)Vessel Calendar Days is the total number of days the vessels were in our fleet.(2)Time Charter Equivalent ("TCE") Rate, results from Net Voyage Revenue divided by total TCE days.45Table of ContentsThe change in Voyage revenue is due to two main factors:i)The number of TCE daysii)The change in the TCE rate achieved.Number of vessel calendar days increased insignificantly by 0.3% and reflects that the number of vessels in our fleet was similar in 2020 as in 2019.With regards to i), the increase of 636 days in offhire days was a result of an increase in planned offhire in 2020 due to drydocking of our vessels.With regards to ii), the TCE rate per day increased by $9,624, or 44.4%, from $21,655 in 2019 to $31,279 in 2020. The indicative rates presented by Clarksons Research decreasedby 4.2% for the twelve months of 2020 compared to the same twelve months in 2019 to $30,240 from $31,560, respectively. The rates presented by Clarksons Research for the year endedDecember 31, 2019 were significantly influenced by a spike in the Suezmax tanker rates in the fourth quarter of 2019. The spike reported by Clarksons Research in fourth quarter of 2019materialized to a larger extent for us in the first quarter of 2020.As a result of i) and ii) net voyage revenues increased by 33.1% from $175.5 million for the year ended December 31, 2019, to $233.5 million for the year ended December 31, 2020.Voyage expenses decreased to $121.1 million from $141.8 million, or 14.6%. The decrease in voyage expenses was primarily due to a decrease in bunker costs caused by acombination of a decrease in fuel oil prices compared to prior year and lower consumption as a larger portion of the vessels have been employed on time charter contracts during 2020compared to 2019.Vessel operating expenses increased by $0.9 million, or 1.3%, from $66.0 million in 2019 to $66.9 million in 2020, and reflects that the number of vessels in the fleet was similar in2020 as in 2019 with a similar expense per vessel for the two years. In cooperation with our technical managers we maintain our focus on keeping the fleet in top technical conditionwhilst keeping costs low.General and administrative expenses increased by $4.1 million, or 30.5%, from $13.5 million in 2019 to $17.6 million in 2020. The increase in cost is mainly related to thetermination of a cost sharing agreement with a former associate and increase in salaries.Depreciation expenses increased by $3.8 million, or 6.0%, from $64.0 million in 2019 to $67.8 million in 2020. The increase in 2020 compared to 2019 is primarily due to an increasein capitalized cost in 2020 related to drydocking of our vessels that is depreciated over a period until next drydocking.Interest expenses decreased by $6.9 million, or 18.0%, from $38.4 million in 2019 to $31.5 million in 2020. The decrease is due to repayments on our credit facilities in 2019 and2020 that lowers the outstanding loan balances and related interest cost.Other financial expenses decreased by $4.4 million mainly due to a fair value adjustment of Investment Securities of $3.2 million in 2019.46Table of ContentsYEAR ENDED DECEMBER 31, 2019 COMPARED TO YEAR ENDED DECEMBER 31, 2018 Years Ended December 31, All figures in USD ‘000 2019 2018 Variance Voyage Revenue 317,220 289,016 9.8%Voyage Expenses (141,770) (165,012) (14.1%)Vessel Operating Expenses (66,033) (80,411) (17.9%)Impairment Loss on Vessels - (2,168) N/A Impairment Loss on Goodwill - - N/A Loss from Disposal of Vessels - (6,619) N/A General and Administrative Expenses (13,481) (12,727) 5.9%Depreciation Expenses (63,965) (60,695) 5.4%Net Operating (Loss) Income 31,971 (38,616) (182.8%)Interest Income 298 334 (10.8%)Interest Expenses (38,390) (34,549) 11.1%Other Financial Expenses (4,231) (14,808) (71.4%)Equity Loss from Associate - (7,667) N/A Net (Loss) Income (10,352) (95,306) (89.1%) Years EndedDecember 31, All figures in USD ‘000, except TCE rate per day 2019 2018 Variance Voyage Revenue 317,220 289,016 9.8%Less Voyage expenses (141,770) (165,012) (14.1%)Net Voyage Revenue 175,450 124,004 41.5%Vessel Calendar Days (1) 8,395 9,747 (13.9%)Less off-hire days 293 277 5.8%Total TCE days 8,102 9,470 (14.4%)TCE Rate per day (2) $21,655 $13,095 65.4%Total Days for vessel operating expenses 8,395 9,747 (13.9%)(1)Vessel Calendar Days is the total number of days the vessels were in our fleet.(2)Time Charter Equivalent (“TCE”) Rate, results from Net Voyage Revenue divided by total TCE days.The change in Voyage revenue is due to two main factors:i)The number of TCE daysii)The change in the TCE rate achieved.With regards to i), the decrease in vessel calendar days is mainly due to the disposal of ten vessels in 2018, offset by three 2018-build Vessels delivered in the latter part of 2018.With regards to ii), the TCE rate increased by $8,560, or 65.4%. The indicative rates presented by Clarksons Research increased by 91.7% for the twelve months of 2019compared to the same twelve months in 2018 to $31,560 from $16,466, respectively. The rates presented by Clarksons Research were significantly influenced by the spike in the Suezmaxtanker rates in the fourth quarter of both 2019 and 2018. Our average TCE was also positively impacted by the increased tanker rates towards the end of 2019, but not to the same extentas the rates reported by Clarksons Research. This spike materialized to a larger extent in the first quarter of 2020 compared to the rates reported by Clarksons Research.As a result of i) and ii) net voyage revenues increased by 41.5% from $124.0 million for the year ended December 31, 2018, to $175.5 million for the year ended December 31, 2019.47Table of ContentsVoyage expenses decreased to $141.8 million from $165.0 million, or 14.1%. The decrease in voyage expenses was primarily due to a decrease in vessel calendar days asdiscussed above.Vessel operating expenses decreased by $14.4 million, or 17.9%, from $80.4 million in 2018 to $66.0 million in 2019. This was primarily due to the decrease in our fleet as discussedabove. In cooperation with our technical managers we maintain our focus on keeping the fleet in top technical condition whilst keeping costs low.No impairment loss on vessels has been recorded in 2019 compared to a loss of $2.2 million recorded for the year ended December 31, 2018.General and administrative expenses increased $0.7 million, or 5.9%, from $12.7 million in 2018 to $13.5 million in 2019.Depreciation expenses increased by $3.3 million, or 5.4%, from $60.7 million in 2018 to $64.0 million in 2019. The increase is primarily due to the full-year effect of the threevessels added to the fleet in the latter part of 2018.Interest expenses increased by $3.8 million, or 11.1%, from $34.5 million in 2018 to $38.4 million in 2019. The increase is mainly due to the full year-effect of the loans associatedwith the three vessels added to the fleet in latter part of 2018 and a non-cash expense of about $1.7 million related to the remaining borrowing cost under our previous $500 million creditfacility that was repaid on February 12, 2019.Other financial expenses decreased by $10.6 million, or 71.4%, from $14.8 million in 2018 to $4.2 million in 2019 mainly due an expense related to fair value change of $3.2 millionfor Investment Securities, offset by the cancellation of the Backstop facility in 2018 and expense of the associated fees of $13.4 million.InflationInflation has had only a moderate effect on our expenses given recent economic conditions. In the event that significant global inflationary pressures appear, these pressureswould increase our operating costs.Critical Accounting EstimatesWe prepare our financial statements in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. On a regular basis, management reviewsthe accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with U.S. GAAP. However,because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For adescription of our material accounting policies, please read Item 18. Financial Statements Note 2 - Summary of Significant Accounting Policies.Revenues and voyage expensesRevenues and voyage expenses are recognized on an accruals basis over the duration of each spot charter.For vessels operating on spot charters, voyage revenues are recognized ratably over the estimated length of each voyage, calculated on a load-to-discharge basis under ASC606 and, therefore, are allocated between reporting periods based on the relative transit time in each period, and revenue is therefore recognized on a pro-rata basis commencing on thedate that the cargo is loaded and concluded on the date of discharge of the cargo. Voyage expenses are capitalized between the discharge port of previous cargo, or contract date if later,and the load port of the cargo to be chartered if they qualify as fulfillment costs. Incremental cost to obtain a contract is capitalized and amortized ratably over the estimated length ofeach voyage, calculated on a load-to-discharge basis. The impact of recognizing voyage expenses ratably over the length of each voyage is not materially different on a quarterly andannual basis from a method of recognizing such costs when incurred. We do not capitalize fulfilment cost or recognize revenue when a charter has not been contractually committed toby a customer.48Table of ContentsVessel ImpairmentThe carrying values of the Company’s vessels may not represent their fair value at any point in time since the market prices of secondhand vessels tend to fluctuate withchanges in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical. Our vessels are evaluated for possible impairment wheneverevents or changes in circumstances indicate that the carrying amount of a vessel may not be recoverable. If the estimated undiscounted future cash flows expected from the commercialuse of the vessel and its eventual sale is less than the carrying amount of the vessel, the vessel is deemed to be impaired. Impairment charges are assessed and recognized on anindividual vessel by vessel basis. Under this approach we identified impairment charges on vessels for the year ended December 31, 2020, December 31, 2019, December 31, 2018 of $0.0million, $0.0 million and $2.2 million, respectively. The amount of the impairment is measured as the difference between the carrying value and the estimated fair value of the vessel. Thisassessment is made at the individual vessel level as information about separately identifiable cash flows for each vessel is available.In developing estimates of future undiscounted cash flows, we make assumptions and estimates about the vessels’ future performance, with the significant assumptions beingrelated to charter rates, fleet utilization, operating expenses, capital expenditures/periodical maintenance, residual value and the estimated remaining useful life of each vessel.The assumptions used to develop estimates of future undiscounted cash flows are based on historical trends as well as future expectations. The estimated net operatingrevenues are determined by considering an estimated daily time charter equivalent for the remaining operating days over the useful life of the vessel. The daily time charter equivalentrates are converted to annual forecasted revenues by multiplying the daily rate by the number of days in the year less days for expected off-hire and dry-docking. Although theCompany believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are subjective. There can be no assurance as to howlong charter rates and vessel values will remain at their currently low levels or whether they will improve by any significant degree.The estimated daily time charter equivalents applied are based on an average of several broker estimates for the first two years of the analysis. For the remaining period fromyear 3 and to the end of the useful life of each vessel, we have applied a daily time charter equivalent equaling the fifteen-year historical average spot market rate for similar vessels. Thebroker estimates applied in year one and two are considered a more precise forecast as it captures the shorter-term expected market development of our business. The broker estimatesare normally not available for a period exceeding two years. For year 3 and beyond, we believe that the 15-year historical company-specific average is a reasonable proxy for our expectedcash flows as this average is most likely to encompass the charter rate cycles that our vessels will experience.When we calculate the expected undiscounted net cash flows for the vessels, we deduct operating expenses and expected cost of dry-docking and other expected capitalexpenditures from the operating revenues before adding an estimated scrap value of the vessel at the end of its useful life. The operating expenses applied are based on the forecastedoperating cost for the vessels, which is adjusted in subsequent periods for expected growth. We have applied a compounded growth factor to the operating expenses, which iscalculated based on the average increase in our operating expenses over the last fifteen years. Estimated cash outflows for dry-docking are based on historical and forecastedexpenditure. Vessel utilization is based on historical average levels achieved. The scrap value applied is assessed to be $8.0 million per vessel based on market price of scrap per tonmultiplied by lightweight tonnage of the vessel, less estimated cost associated with scrapping the vessel. All vessels are maintained for and assumed to have a useful life of 25 years.For the vessels in our fleet we have in the table below indicated the following: (1) charter rates applied in our vessel impairment assessment; (2) the break-even rate, if appliedfrom year 1 to the end of the useful life for each vessel, indicates the rate at which undiscounted cash flow do not exceed the book value for the first vessel in our fleet and (3) achievedrates, which represents the five and ten-year average charter rates achieved by the Company.49Table of ContentsRates used (1)Break even rate (2)Achieved Rates (3)($ per day)First yearSecond yearThereafter20202016 -20202011-2020NAT fleet18,46827,97525,99321,77921,67520,629If the five or ten-year average historical rates described under “Achieved Rates” had been used in the cash flow forecast instead of the rates used from year three and onwards,carrying value would exceed the total undiscounted cash flows for nil and four of our vessels, respectively.The Total Fleet – Comparison of Carrying Value versus Market Value: During the past five years, the market values of vessels have experienced particular volatility for manyvessel classes. During 2019, our fleet of Suezmax vessels experienced a positive valuation curve with values at the end of 2019 above the valuations received at the end of 2018. In 2020,the valuation curve has been negative for our fleet. According to Clarksons Research 144 Suezmax tankers were sold and bought in total between 2016 and 2020, however suchtransactions may not be vessels as well maintained as the vessels in our fleet. We believe that our fleet should be valued as a transportation system as it is not meaningful under ourstrategy to assess the value of each individual vessel.Factors and conditions which could impact our estimates of future cash flows of our vessels include:•Declines in prevailing market charter rates;•Changes in behaviors and attitudes of our charterers towards actual and preferred technical, operational and environmental standards; and•Changes in regulations over the requirements for the technical and environmental capabilities of our vessels.Our estimates of market value assume that our vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified in class withoutnotations of any kind, and are held for use. Most oil companies require CAP 2 notation or better. All relevant vessels in our fleet have CAP1 notation for Hull, as well as Machinery &Cargo. CAP is an abbreviation for Condition Assessment Program. The quality of the NAT fleet is at the top as evidenced by our vetting statistics, that is, inspections of our ships byclients. In such vetting processes safety for our crew, the environment and our assets are main considerations.Our estimates are based on the estimated market values for our vessels that we have received from shipbrokers and these are inherently uncertain. The market value of a vesselas determined by shipbrokers could be an arbitrary assessment giving an estimate of a value for a transaction that has not taken place. In Management’s view the valuation of theCompany on the NYSE should not be based upon net asset value (NAV), a measure that only is linked to the steel value of our ships. We have our own ongoing system value with alarge and homogenous fleet allowing us to offer our transportation services to our clients across the globe.Vessel BuiltDeadweight TonsDeliveredto NAT CarryingValue $(millions)Dec 31,2020 CarryingValue$ (millions)Dec 31,2019 Nordic Freedom*2005159,331 2005 35.9 36.2 Nordic Apollo*2003159,998 2006 32.7 36.6 Nordic Moon*2002160,305 2006 30.6 34.8 Nordic Cosmos*2003159,999 2006 32.9 37.2 Nordic Grace*2002149,921 2009 25.0 26.9 Nordic Mistral*2002164,236 2009 26.2 26.8 Nordic Passat*2002164,274 2010 26.6 28.6 Nordic Vega*2010163,940 2010 59.9 59.9 Nordic Breeze*2011158,597 2011 44.6 47.1 Nordic Zenith*2011158,645 2011 45.0 47.5 Nordic Sprinter*2005159,089 2014 26.0 26.1 Nordic Skier*2005159,089 2014 27.1 26.4 Nordic Light*2010158,475 2015 47.6 47.8 Nordic Cross*2010158,475 2015 48.1 51.3 Nordic Luna*2004150,037 2016 24.2 24.6 Nordic Castor*2004150,249 2016 21.8 23.7 Nordic Sirius*2000150,183 2016 15.8 14.7 Nordic Pollux*2003150,103 2016 20.5 21.1 Nordic Star*2016157,738 2016 55.3 57.8 Nordic Space*2017157,582 2017 56.7 59.5 Nordic Tellus2018157,407 2018 53.7 54.5 Nordic Aquarius2018157,338 2018 52.3 55.0 Nordic Cygnus2018157,526 2018 52.8 55.9 50Table of Contents* The carrying value of our vessels as of December 31, 2020 is $861.3 million. We have obtained broker estimates from two independent shipbrokers indicating a fair market value of ourfleet on a charter free basis to be $647.1 million, based on an average of the two estimates including the inherent uncertainty in such estimates. Each vessel marked with an asterisk has afair market value that is lower than the carrying value. The total carrying value based on the above is consequently exceeding the fair value of the vessels by approximately $214.2 millionas of December 31, 2020. We have in our vessel impairment analysis estimated future undiscounted cash flows generated by the vessels over their estimated useful life that exceed theircarrying values as of December 31, 2020.VesselsThe useful lives of our vessels are principally dependent on the technical condition of our vessels. Vessels are stated at their historical cost and the estimated useful life of avessel is 25 years from the date the vessel is delivered from the shipyard. Certain subsequent expenditures for major improvements are also capitalized if it is determined that theyappreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessel and depreciated over the remaining useful life of the vessel.Depreciation is calculated based on cost less estimated residual value using the straight-line method. The residual value is estimated by management and reviewed annually,where the market price of scrap per ton is considered when evaluating this.DrydockingThe Company’s vessels are required to be drydocked approximately every 30 to 60 months. Vessels exceeding 15 years are subject to periodical maintenance surveys every 30months, whereas vessels under 15 years of age are subject to survey intervals every 60 months. The Company capitalizes a substantial portion of the costs incurred during drydockingand amortizes those costs on a straight-line basis from the completion of a drydocking or intermediate survey to the estimated completion of the next drydocking. Drydocking costsinclude a variety of costs incurred while vessels are placed within drydock, including direct expenses incurred related to the in preparation for docking and port expenses at the drydockshipyard, general shipyard expenses, expenses related to hull, external surfaces and decks, expenses related to machinery and engines of the vessel, as well as expenses related to thetesting and correction of findings related to safety equipment on board. Consistent with prior periods, the Company includes in capitalized drydocking those costs incurred as part ofthe drydock to meet classification and regulatory requirements. Expenditures for normal repairs and maintenance performed during drydocking are expensed as incurred. Ballast tankimprovements are capitalized and amortized on a straight-line basis over a period of eight years. The capitalized and unamortized drydocking costs are included in the book value of thevessels. Amortization expense of the drydocking costs is included in depreciation expense.51Table of ContentsIf we change our estimate of the next drydock date, we will adjust our annual amortization of drydocking expenditures accordingly.B.Liquidity and Capital ResourcesWe operate in a cyclical and capital intensive industry. Our fleet of Suezmax tankers are financed through a combination of earnings generated from operations, raising equityand borrowings.Our main liquidity requirements are related to voyage cost and operating cost for our vessels, repayments of loans and related interest charges, general and administration cost,capital expenditure for our vessels including installments related to our newbuildings, and working capital needs.In September 2020, we announced that we had entered into two Suezmax newbuilding contracts with Samsung shipyard in South Korea for scheduled deliveries in the first halfof 2022. We refer to further information below and in “Item 5. Operating and Financial Review and Prospects—F. Tabular Disclosure of Contractual Obligations” for disclosure ofContractual Obligations.On a regular basis, we perform cash flow projections to evaluate whether we will be in a position to cover our liquidity needs for the next 12-month period and the compliancewith financial and security ratios under our existing and future financing agreements. In developing estimates of future cash flows, we make assumptions about the vessels’ futureperformance, market rates, operating expenses, capital expenditure, fleet utilization, general and administrative expenses, loan repayments and interest charges. The assumptions appliedare based on historical experience and future expectations.Cash, restricted cash and cash equivalents are predominantly held in U.S. Dollars and was $57.8 million and $48.8 million as of December 31, 2020 and December 31, 2019,respectively. Minor cash balances are held in NOK and EUR. Restricted cash was $4.2 million and $12.8 million as of December 31, 2020 and December 31, 2019, respectively. Therestricted cash deposit is nominated and available for use for drydocking and other capex commitments related to the vessels used as collateral under the 2019 Senior Secured CreditFacility.Our Borrowing ActivitiesOn February 12, 2019, we entered into the $306 million 2019 Senior Secured Credit Facility using twenty of our vessels built from year 2000 to 2017 as collateral. On December 16,2020, we entered into a loan agreement for $30.0 million that is considered an accordion loan under the 2019 Senior Secured Credit Facility loan agreement.The three 2018-built Vessels are financed through Ocean Yield ASA.In September 2020, we announced that we had entered into two Suezmax newbuilding contracts with Samsung shipyard in South Korea for scheduled deliveries in the first halfof 2022 to expand and renew our fleet. We have in December 2020 entered into financing agreements with Ocean Yield ASA for the financing of up to 80% of the newbuilding price for thetwo newbuildings at similar terms as for the 2018-built Vessels. We have not utilized any portion of this financing arrangement as of December 31, 2020.2019 Senior Secured Credit Facility and $30 million Accordion LoanOn February 12, 2019 we entered into a new five-year senior secured credit facility for $306.1 million (the “2019 Senior Secured Credit Facility”). Borrowings under the 2019Senior Secured Credit Facility are secured by first priority mortgages over our vessels (excluding the three vessels delivered in 2018, see described below) and assignments of earningsand insurance. The loan is amortizing with a twenty-year maturity profile, carries a floating LIBOR interest rate plus a margin and matures in February 2024. Further, the agreementcontains a discretionary excess cash mechanism for the lender that equals 50% of the net earnings from the collateral vessels, less capex provision and fixed loan amortization. Theagreement contains covenants that require a minimum liquidity of $30.0 million and a loan-to-vessel value ratio of maximum 70%.52Table of ContentsAs of December 31, 2019, we had $291.8 million drawn under our 2019 Senior Secured Credit Facility, where $16.1 million, net of deferred financing cost of $2.6 million, waspresented as Current Portion of Long-Term Debt. This included $3.4 million related to the excess cash flow mechanism payment related to earnings generated in the fourth quarter of 2019and payable in the first quarter of 2020.On December 16, 2020, we entered into a new loan agreement for the borrowing of $30.0 million (the “$30 million Accordion Loan”). The loan is considered an accordion loan tothe 2019 Senior Secured Credit Facility loan agreement and has the same amortization profile, carries a floating LIBOR interest rate plus a margin and matures in February 2024. Thesecurity of the loan is attached to the security of the 2019 Senior Secured Credit Facility and has equal priority, same financial covenants and same excess cash flow mechanism as the2019 Senior Secured Credit Facility.We have repaid $67.9 million on the facilities in the twelve months ended December 31, 2020. As of December 31, 2020, the total outstanding balance was $253.9 million. TheCompany has presented $14.4 million, net of deferred financing costs of $2.4 million, under Current Portion of Long-Term Debt. Earnings generated in the fourth quarter of 2020 did notresult in any additional payment related to the excess cash flow mechanism.Subsequent to December 31, 2020, we have repaid in total $4.2 million and the total outstanding balance as of the date of this report is $249.7 million.Financing of 2018-built VesselsThe three vessels were delivered to us in July, August and October 2018, respectively. Under the terms of the financing agreement, the lender has provided financing of 77.5%of the purchase price for each of the three 2018-built vessels. Upon delivery of each of the vessels, we entered into ten-year bareboat charter agreements. We have obligations topurchase the vessels for a consideration of $13.6 million for each vessel upon the completion of the ten-year bareboat charter agreements, and also have the option to purchase thevessels after sixty and eighty-four months. The financing agreements for the three vessels have a total effective interest rate ranging from 4.86% to 5.06% including a floating LIBORelement that is subject to annual adjustment. The financing agreement contains certain financial covenants requiring us to on a consolidated basis to maintain a minimum value adjustedequity of $175.0 million and ratio of 25%, minimum liquidity of $20.0 million; and a minimum vessel value to outstanding lease clause.The outstanding amounts under this financing arrangement were $112.2 million and $119.9 million as of December 31, 2020 and 2019, respectively, where $7.7 million and $7.4million, net of deferred financing costs, have been presented as Current Portion of Long-Term Debt, respectively.EquityOn March 29, 2019, we entered into an equity distribution agreement with B. Riley Securities, Inc., acting as a sales agent, under which we may, from time to time, offer and sellshares of our common stock through the $40 million ATM. As of December 31, 2020, we have raised gross and net proceeds (after deducting sales commissions and other fees andexpenses) of $40.0 million and $38.6 million, respectively, by issuing and selling 9,476,446 common shares in total. In 2020, we have raised gross and net proceeds (after deducting salescommissions and other fees and expenses) of $21.4 million and $20.7 million, respectively, by issuing and selling 4,215,478 common shares. No further proceeds are available under the$40 million ATM as of December 31, 2020.On October 16, 2020, we entered into a new equity distribution agreement with B. Riley Securities, Inc., acting as a sales agent, under which we may, from time to time, offer andsell shares of our common stock through the $60 million ATM. As of December 31, 2020, we have not raised any proceeds, under the $60 million ATM. Subsequent to December 31, 2020,we have raised $10.0 million and $9.7 million in gross and net proceeds, respectively by issuing 2,989,769 common shares.We monitor compliance with our financial covenants on a regular basis and as at December 31, 2020, we were in compliance with the financial covenants in our debt facilities.We believe that our current cash and cash equivalents and cash expected to be generated from operations, together with the remaining balance available under the $60 million ATM as ofthe date of this report, are sufficient to meet our working capital needs and other liquidity requirements for the next 12 months from the date of this report.53Table of ContentsCash FlowsThe following table shows our net cash flows from operating, investing and financing activities for the periods ended December 31, 2020, 2019 and 2018.All figures in USD ‘000 2020 2019 2018 Net Cash Provided by (Used in) Operating Activities 110,944 52,858 (16,103)Net Cash Provided by (Used in) Investing Activities (17,476) (2,319) 85,054 Net Cash Used in Financing Activities (93,075) (38,251) (78,034)Net Increase / (Decrease) in Cash, Cash Equivalents and Restricted cash 393 12,288 (9,083)Cash, Cash Equivalents and Restricted Cash at Beginning of Year 61,638 49,327 58,359 Cash, Cash Equivalents and Restricted Cash at End of Year 62,070 61,638 49,327 YEAR ENDED DECEMBER 31, 2020, COMPARED TO YEAR ENDED DECEMBER 31, 2019Cash flows (used in) / provided by operating activities increased to $110.9 million for the year ended December 31, 2020, from $52.9 million for the year ended December 31, 2019.The change in cash flows provided by operating activities is primarily due to increases in charter rates achieved in 2020 compared to 2019 combined with a positive change in workingcapital from voyage related activities.Cash flows (used in) / provided by investing activities increased to ($17.5) million for the year ended December 31, 2020, compared to ($2.3) million for the year ended December31, 2019. The increase of cash flows used in investing activities is primarily due to the payment of the installment of $11.0 million for the 2022 Newbuildings and an increase of $4.3 millionin investment in vessels.Cash flows used in financing activities increased to ($93.1) million for the year ended December 31, 2020, compared to cash flow used in financing activities of ($38.3) million forthe year ended December 31, 2019. The increase is primarily due to an increase in distributed dividends of $53.0 million, an increase in repayments on the 2019 Senior Secured CreditFacility of $53.6 million, offset by an increase in proceeds from issuance of common stock of $2.8 million, and proceeds of $29.3 million from the Accordion Loan compared to the netrepayment of $13.4 million in 2019 related to termination of the $500 mill credit facility by $313.4 million and by proceeds from the 2019 Senior Secured Credit Facility by $300.0 million.The cash and cash equivalents was $57.8 million as of December 31, 2020.YEAR ENDED DECEMBER 31, 2019, COMPARED TO YEAR ENDED DECEMBER 31, 2018Cash flows (used in) / provided by operating activities increased to $52.9 million for the year ended December 31, 2019, from ($16.1) million for the year ended December 31, 2018.The change in cash flows provided by operating activities is primarily due to increases in market rates achieved in 2019 compared to 2018 combined with a positive change in workingcapital from voyage related activities, offset by the settlement of the Deferred Executive Pension plan.Cash flows (used in) / provided by investing activities decreased to ($2.3) million for the year ended December 31, 2019, compared to $85.0 million for the year ended December31, 2018. The decrease of cash flows (used in) / provided by investing activities is primarily due the Company disposing of ten vessels in 2018 compared to none in 2019.54Table of ContentsCash flows used in financing activities decreased to ($38.3) million for the year ended December 31, 2019, compared to cash flow used in financing activities of ($78.0) million forthe year ended December 31, 2018. The decrease is primarily due to repayment of the previous $500 million credit facility by $313.4 million in 2019 compared to $78.2 million in 2018, offsetby proceeds from the 2019 Senior Secured Credit Facility by $300.0 million and an increase of $14.3 million for repayment of the 2019 Senior Secured Credit Facility in 2019 and an increasein distributed dividends from $9.9 million in 2018 compared to $14.3 million in 2019, offset by issuance of common stock in 2019 with net proceeds of $17.9 million.The cash and cash equivalents was $48.8 million as of December 31, 2019.For further information on contractual obligations please see “Item 5. Operating and Financial Review and Prospects—F. Tabular Disclosure of Contractual Obligations.”C.Research and Development, Patents and Licenses, Etc.Not applicable.D.Trend InformationThe oil tanker industry has been highly cyclical, experiencing volatility in charter hire rates and vessel values resulting from changes in the supply of and demand for crude oiland tanker capacity. See “Item 4. Information on the Company—B. Business Overview –The International Tanker Market.”E.Off Balance Sheet ArrangementsAs of December 31, 2020, we do not have any liabilities, contingent or otherwise, that we would consider to be off-balance sheet arrangements.F.Tabular Disclosure of Contractual ObligationsThe Company’s contractual obligations as of December 31, 2020, consist of our obligations as borrower under our 2019 Senior Secured Credit Facility including our $30 millionAccordion Loan and our obligations related to financing of our three 2018-built vessels.The following table sets out financial, commercial and other obligations outstanding as of December 31, 2020.Contractual Obligations in $’000s Total Less than1 year 1-3years 3-5 years More than5 years 2019 Senior Secured Credit Facility including Accordion Loan (1) 253,902 16,805 33,610 203,487 - Interest Payments (2) 57,044 19,429 34,953 2,662 - Financing of 2018-built Vessels (3) 112,238 7,960 17,038 18,673 68,567 Interest Payments (4) 42,776 6,223 14,131 11,543 10,879 Operating Lease Liabilities (5) 1,661 512 647 331 171 Newbuildings (6) 99,000 16,500 82,500 - - Total 566,621 67,429 182,879 236,696 79,617 Notes:(1)Refers to obligation to repay indebtedness outstanding under the 2019 Senior Secured Credit Facility including the Accordion Loan as of December 31, 2020. Thefacilities contain a discretionary excess cash amortization mechanism for the lender that equals 50% of the net earnings from the collateral vessels, less capexprovision and fixed amortization.(2)Refers to the estimated interest payments over the term of indebtedness outstanding under the 2019 Senior Secured Credit Facility including the Accordion Loan asof December 31, 2020. Estimate is based on applicable interest rate, agreed amortization and balance outstanding as of December 31, 2020.(3)Refers to obligation to repay indebtedness outstanding as of December 31, 2020 for three 2018-built vessels.(4)Refers to estimated interest payments over the term of the indebtedness outstanding as of December 31, 2020 for the financing of the three 2018-built vessels.Estimate is based on applicable interest rate as of December 31, 2020.(5)Refers to the future obligation as of December 31, 2020 to pay for operating lease liabilities at nominal values.(6)Refers to the remaining obligations as of December 31, 2020 for our order of two Suezmax newbuildings for delivery in 2022 from Samsung Shipyard in SouthKorea.55Table of ContentsG. Safe HarborSee “Cautionary Statement Regarding Forward Looking Statements” at the beginning of this annual report.ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEESA.Directors and Senior ManagementSet forth below are the names and positions of our directors of the Company and senior management of the Company. The directors of the Company are elected annually, andeach elected director holds office until a successor is elected. Officers are elected from time to time by vote of the Board and holds office until a successor is elected.The CompanyNameAgePositionHerbjørn Hansson73Founder, Chairman, Chief Executive Officer, President and DirectorJim Kelly67Vice Chairman, Non-Executive Director and Audit Committee ChairmanRichard H. K. Vietor76Non-Executive DirectorAlexander Hansson39Non-Executive DirectorDavid Workman60Non-Executive DirectorBjørn Giaever53Chief Financial OfficerCertain biographical information with respect to each director and senior management of the Company listed above is set forth below.Herbjørn Hansson earned his M.B.A. at the Norwegian School of Economics and Business Administration and attended Harvard Business School. In 1974 he was employed bythe Norwegian Shipowners’ Association. In the period from 1975 to 1980, he was Chief Economist and Research Manager of INTERTANKO, an industry association whose memberscontrol about 70% of the world’s independently owned tanker fleet, excluding state owned and oil company fleets. During the 1980s, he was Chief Financial Officer of Kosmos/AndersJahre, at the time one of the largest Norwegian based shipping and industry groups. In 1989, Mr. Hansson founded Ugland Nordic Shipping AS, or UNS, which became one of theworld’s largest owners of specialized shuttle tankers. He served as Chairman in the first phase and as Chief Executive Officer as from 1993 to 2001 when UNS, under his management, wassold to Teekay Shipping Corporation, or Teekay, for an enterprise value of $780.0 million. He continued to work with Teekay, and reached the position of Vice Chairman of Teekay NorwayAS, until he started working full-time for the Company on September 1, 2004. Mr. Hansson is the founder and has been Chairman and Chief Executive Officer of the Company since itsestablishment in 1995. He also has been a member of various governing bodies of companies within shipping, insurance, banking, manufacturing, national/international shippingagencies including classification societies and protection and indemnity associations. Mr. Hansson is fluent in Norwegian and English, and has a command of German and French forconversational purposes.Jim Kelly has been a director of the Company since June 2010. Mr. Kelly has worked for Time Inc., the world’s largest magazine publisher, since 1978. He served as ForeignEditor during the fall of the Soviet Union and the first Gulf War, and was named Deputy Managing Editor in 1996. In 2001, Mr. Kelly became the magazine’s managing editor, and duringhis tenure the magazine won a record four National Magazine awards. In 2004, Time Magazine received its first EMMA for its contribution to the ABC News Series “Iraq: Where ThingsStand.” In late 2006, Mr. Kelly became the managing editor of all of Time Inc., helping supervise the work of more than 2,000 journalists working at 125 titles, including Fortune, Money,Sports Illustrated and People. Since 2009, Mr. Kelly has worked as a consultant at Bloomberg LP and taught at Princeton and Columbia Universities. Jim Kelly was elected as member ofour Audit Committee in February 2012. Mr. Kelly was appointed as the Chairman of the Audit Committee after our former vice chairman, non-executive board member and chairman of theAudit Committee, Mr. Andreas Ove Ugland, passed away on March 8, 2020.56Table of ContentsRichard H. K. Vietor has been a director of the Company since July 2007. Mr. Vietor is the Paul Whiton Cherrington Professor of Business Administration where he teachescourses on the regulation of business and the international political economy.Alexander Hansson has been a director of the Company since November 2019 and has been employed by the Company since 2009. Mr. Hansson is an investor in variousmarkets globally and has made several successful investments in both listed and privately held companies. Mr. Hansson is the son of the Company’s Chairman and Chief ExecutiveOfficer and he has built a network over the last 20 years in the shipping and finance sector. He has operated shipping and trading offices in London and Monaco. He studied at EBSRegents College in London, United Kingdom.David Workman has been a director of the Company since November 2019. Mr. Workman has served as Hermitage Offshore Services Ltd.’s Class A Director since December2013. Mr. Workman was Chief Operating Officer and member of the Supervisory Board of Stork Technical Services, or STS, guided, as Chief Executive Officer, the sale of the RBGOffshore Services Group into the STS group in 2011.Bjørn Giaever joined the Company as Chief Financial Officer and Secretary on October 16, 2017. Mr. Giaever has over 20 years of experience in the shipping & offshoreindustry, holding key roles in corporate finance and equity research. He joined the Company from Fearnley Securities AS, where he served as partner and director in the CorporateFinance division. From 2006 to 2010, Mr. Giaever served as a senior corporate advisor in the John Fredriksen group in London. In addition, Mr. Giaever has been a top rated ShippingAnalyst at DNB Markets and partner at Inge Steensland AS, specializing in gas and maritime matters. Mr. Giaever holds a BSc in business and economics.B.CompensationDuring the year ended December 31, 2020, we have paid aggregate cash compensation of $6.0 million to our directors and executive officers (six persons). The amount includes the cashcompensation paid for managing our operations in Monaco.2011 Equity Incentive PlanIn 2011, the Board of Directors approved an incentive plan under which 400,000 common shares were reserved for issuance and were allocated among 23 persons employed inthe management of the Company and the members of the Board of Directors. Of those 400,000 common shares, 326,000 and 74,000 had a five year and four year trade restriction,respectively, and the shares are forfeited if the grantee discontinues working for the Company before such time. The holders of the restricted shares are entitled to voting rights as wellas receive dividends paid during the vesting period. Our Board of Directors considers this arrangement to be in the best interests of the Company.In December 2015, we amended and restated the 2011 Equity Incentive Plan to reserve an additional 137,665 common shares for issuance to persons employed in themanagement of the Company and members of the Board of Directors under the same terms as the original plan. All 137,665 common shares reserved under the Amended and Restated2011 Equity Incentive Plan were issued to 30 employees in 2016. We are holding 42,000 treasury shares as of December 31, 2020 from forfeitures. As of December 31, 2020, a total numberof 4,500 common shares have been allocated. The trading restrictions for these common shares expire in January 2021.57Table of ContentsIn October 2019, we amended and restated the 2011 Equity Incentive Plan to reserve an additional 1,000,000 stock options for issuance to persons employed in the managementof the Company and members of the Board of Directors under the same terms as the original plan. On October 28, 2019, the Company granted 755,000 and 234,000 stock options withvesting over a period of two and three years, respectively, and an exercise price of $4.70 per share.A copy of the Amended and Restated 2011 Equity Incentive Plan is filed as Exhibit 4.11 to this annual report.Executive Pension Plan and TermsOur Founder, Chairman, President and Chief Executive Officer had an individual deferred compensation agreement that was terminated in 2019. The parties entered into anagreement in 2020, whereby our Founder, Chairman, President and Chief Executive Officer has a right to have his present position until 2027, after which he may become non-executiveChairman as long as he lives. Our Chief Financial Officer has a regular contribution pension plan in line with the Company’s policy for employees.C.Board PracticesThe members of our Board of Directors serve until the next annual general meeting following his or her election. The members of our current Board of Directors were elected atthe annual general meeting held in 2020. Our Board of Directors has established an Audit Committee, consisting of a single independent director, Mr. Kelly. Mr. Kelly serves as the auditcommittee financial expert. The Audit Committee provides assistance to our Board of Directors in fulfilling their responsibility to shareholders, and investment community relating tocorporate accounting, reporting practices of the Company, and the quality and integrity of the financial reports of the Company. The Audit Committee, among other duties, recommendsto the Board of Directors the independent auditors to be selected to audit our financial statements; meets with the independent auditors and our financial management to review thescope of the proposed audit for the current year and the audit procedures to be utilized; reviews with the independent auditors, and financial and accounting personnel, the adequacyand effectiveness of the accounting and financial controls of the Company; and reviews the financial statements contained in the annual report to shareholders with management andthe independent auditors.Pursuant to an exemption for foreign private issuers, we are not required to comply with many of the corporate governance requirements of the NYSE that are applicable to U.S.listed companies. For more information, please see “Item 16G. Corporate Governance.”There are no contracts between us and any of our directors providing for benefits upon termination of their employment.D.EmployeesAll our shore based employees have employment contracts and as of December 31, 2020, the Company had a total of about 20 full time employees. We have fixed contracts withthree ship managers, which operate under our direct instructions. All seafarers onboard our vessels have employment contracts via the technical management companies.E.Share OwnershipWith respect to the total amount of common shares owned by all of our officers and directors individually and as a group, please see “Item 7. Major Shareholders and RelatedParty Transactions.”58Table of ContentsITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONSA.Major ShareholdersThe following table sets forth information regarding beneficial ownership of our common shares for (i) owners of more than five percent of our common shares and (ii) ourdirectors and officers, of which we are aware of the date of this annual report.Title Identity of Person No. of Shares Percent of Class(1) Common Hansson family (2) 4,815,659 3.12% Jim Kelly * Richard Vietor * David Workman * Bjørn Giæver * BlackRock, Inc. (3) 8,721,613 5.8% (1) Based on 154,435,881 common shares outstanding as of the date of this annual report.(2) The holdings between our founder, chairman & CEO, Herbjørn Hansson, and Alexander Hansson, are reported herein.(3) Based solely on the Schedule 13G/A filed on January 29, 2021.* Less than 1% of our common outstanding shares.As of April 20, 2021, we had 524 holders of record in the United States, including Cede & Co., which is the Depositary Trust Company’s nominee for holding shares on behalf ofbrokerage firms, as a single holder of record. We had a total of 154,435,881 Common Shares outstanding as of the date of this annual report.B.Related Party TransactionsBoard Members and Employees:We have an agreement with a company owned by a Board member for the use of an asset for corporate and marketing activities. We have in 2020 paid a fixed annual fee of $0.2million, operating cost of $0.3 million and fees associated with actual use. In 2020, 2019 and 2018, we recognized $0.1 million, $0.3 million and $0.4 million, respectively, for utilization of theasset. No amounts were due to the related party as of December 31, 2020, 2019 and 2018 related to use of the asset.C.Interests of Experts and CounselNot applicable.ITEM 8.FINANCIAL INFORMATIONA.Consolidated Statements and other Financial InformationSee Item 18.Legal ProceedingsTo our knowledge, we are not currently a party to any lawsuit that, if adversely determined, would have a material adverse effect on our financial position, results of operationsor liquidity.59Table of ContentsDividend PolicyOur policy is to declare quarterly dividends to shareholders as decided by the Board of Directors. The dividend to shareholders could be higher than the operating cash flow orthe dividend to shareholders could be lower than the operating cash flow after reserves as the Board of Directors may from time to time determine are required, taking into accountcontingent liabilities, the terms of our borrowing agreements, our other cash needs and the requirements of Bermuda law.Total cash dividends distributed in 2020 totaled $67.2 million or $0.45 per share. The quarterly cash dividend payments per share over the last 5 years have been as follows:Period 2020 2019 2018 2017 2016 1st Quarter $0.07 $0.04 $0.03 $0.20 $0.43 2nd Quarter $0.14 $0.03 $0.01 $0.20 $0.43 3rd Quarter $0.20 $0.01 $0.02 $0.10 $0.25 4th Quarter $0.04 $0.02 $0.01 $0.03 $0.26 Total $0.45 $0.10 $0.07 $0.53 $1.37 The Company declared a dividend of $0.02 per share in respect of the fourth quarter of 2020, which was paid to shareholders on March 30, 2021.B.Significant ChangesNot applicable.ITEM 9.THE OFFER AND LISTINGNot applicable except for Item 9.A.4. and Item 9.C.Share History and MarketsSince November 16, 2004, the primary trading market for our common shares has been the NYSE on which our shares are listed under the symbol “NAT.”ITEM 10.ADDITIONAL INFORMATIONA.Share CapitalNot applicable.B.Memorandum and Articles of AssociationMemorandum of Association and Bye-LawsThe following description of our share capital summarizes the material terms of our Memorandum of Association and our bye-laws.Under our Memorandum of Association, as amended, our authorized capital consists of 360,000,000 common shares having a par value of $0.01 per share.The purposes and powers of the Company include the entering into of any guarantee, contract, indemnity or suretyship and to assure, support, secure, with or without theconsideration or benefit, the performance of any obligations of any person or persons; and the borrowing and raising of money in any currency or currencies to secure or discharge anydebt or obligation in any manner.60Table of ContentsOur bye-laws provide that our Board of Directors shall convene and the Company shall hold annual general meetings of shareholders in accordance with the requirements ofthe Companies Act at such times and places as the Board shall decide. However, under Bermuda law, a company may by resolution in general meeting, elect to dispense with the holdingof an annual general meeting for (a) the year in which it is made and any subsequent year or years; (b) for a specified number of years; or (c) indefinitely. Our Board of Directors may callspecial general meetings of shareholders at its discretion or as required by the Companies Act. Under the Companies Act, holders of one-tenth of our issued common shares may callspecial general meetings.Under our bye-laws, five days advance notice of an annual general meeting or any special general meeting must be given to each shareholder entitled to vote at that meetingunless, in the case of an annual general meeting, a shorter notice period for such meeting is agreed to by all of the shareholders entitled to vote thereat and, in the case of any othermeeting, a shorter notice period for such meeting is agreed to by at least 75% of the shareholders entitled to vote thereat. Under Bermuda law, accidental failure to give notice will notinvalidate proceedings at a meeting. Our Board of Directors may set a record date for the purpose of identifying the persons entitled to receive notice of and vote at a meeting ofshareholders at any time before or after the date on which such notice is dispatched.Our Board of Directors must consist of at least three and no more than 11 directors, or such number in excess thereof as the Board of Directors may from time to time determineby resolution. Our directors are not required to retire because of their age, and our directors are not required to be holders of our common shares. Directors serve for one-year terms, andshall serve until re-elected or until their successors are appointed at the next annual general meeting. Casual vacancies on our Board of Directors may be filled by a majority vote of thethen-current directors.Any director retiring at an annual general meeting will be eligible for reappointment and will retain office until the close of the meeting at which such director retires or (if earlier)until a resolution is passed at that meeting not to fill the vacancy or the resolution to re-appoint such director is put to a vote at the meeting and is lost. If a director’s seat is not filled atthe annual general meeting at which he or she retires, such director shall be deemed to have been reappointed unless it is resolved by the shareholders not to fill the vacancy or aresolution for the reappointment of the director is voted upon and lost. No person other than a director retiring shall be appointed a director at any general meeting unless (i) he or she isrecommended by the Board of Directors or (ii) a notice executed by a shareholder (not being the person to be proposed) has been received by our secretary no less than 120 days and nomore than 150 days prior to the date our proxy statement is released to shareholders in connection with the prior year’s annual general meeting declaring the intention to propose anindividual for the vacant directorship position.A director may at any time summon a meeting of the Board of Directors. The quorum necessary for the transaction of business at a meeting of the Board of Directors may befixed by the Board of Directors and, unless so fixed at any other number, shall be two directors. Questions arising at any meeting of the Board of Directors shall be determined by amajority of the votes cast.Our bye-laws do not prohibit a director from being a party to, or otherwise having an interest in, any transaction or arrangement with the Company or in which the Company isotherwise interested. Our bye-laws provide that a director who has an interest in any transaction or arrangement with the Company and who has complied with the provisions of theCompanies Act and with our bye-laws with regard to disclosure of such interest shall be taken into account in ascertaining whether a quorum is present, and will be entitled to vote inrespect of any transaction or arrangement in which he is so interested.Our bye-laws permit us to increase our authorized share capital with the approval of a majority of votes cast in respect of our outstanding common shares represented in personor by proxy.There are no pre-emptive, redemption, conversion or sinking fund rights attached to our common shares. The holders of common shares are entitled to one vote per share on allmatters submitted to a vote of holders of common shares. Unless a different majority is required by law or by our bye-laws, resolutions to be approved by holders of common sharesrequire approval by a simple majority of votes cast at a meeting at which a quorum is present. Shareholders present in person or by proxy and entitled to vote at a meeting ofshareholders representing the holders of at least one-third of the issued shares entitled to vote at such general meeting shall be a quorum for all purposes.61Table of ContentsUnder our bye-laws, our Board of Directors is authorized to attach to our undesignated shares such preferred, qualified or other special rights, privileges, conditions andrestrictions as the Board of Directors may determine. The Board of Directors may allot our undesignated shares in more than one series and attach particular rights and restrictions toany such shares by resolution; provided, however, that the Board of Directors may not attach any rights or restrictions to our undesignated shares that would alter or abrogate any ofthe special rights attached to any other class or series of shares without such sanction as is required for any such alternation or abrogation unless expressly authorized to do so by therights attaching to or by the terms of the issue of such shares.Subject to Bermuda law, special rights attaching to any class of our shares may be altered or abrogated with the consent in writing of not less than 75% of the issued shares ofthat class or with the sanction of a resolution of the holders of such shares voting in person or by proxy.In the event of our liquidation, dissolution or winding up, the holders of common shares are entitled to share in our assets, if any, remaining after the payment of all of our debtsand liabilities, subject to any liquidation preference on any outstanding preference shares.Our bye-laws provide that our Board of Directors may, from time to time, declare and pay dividends or distributions out of contributed surplus, which we refer to collectively asdividends. Each common share is entitled to dividends if and when dividends are declared by our Board of Directors, subject to any preferred dividend right of the holders of anypreference shares.There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our common shares.Bermuda law permits the bye-laws of a Bermuda company to contain a provision indemnifying the Company’s directors and officers for any loss arising or liability attaching tohim or her by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the officer or person may be guilty, save with respect to fraud ordishonesty. Bermuda law also grants companies the power generally to indemnify directors and officers of a company, except in instances of fraud and dishonesty, if any such personwas or is a party or threatened to be made a party to a threatened, pending or completed action, suit or proceeding by reason of the fact that he or she is or was a director and officer ofsuch company or was serving in a similar capacity for another entity at such company’s request.Our bye-laws provide that each director, alternate director, officer, person or member of a committee, if any, resident representative, and any liquidator, manager or trustee for thetime being acting in relation to the affairs of the Company, and his heirs, executors or administrators, which we refer to collectively as an indemnitee, will be indemnified and heldharmless out of our assets to the fullest extent permitted by Bermuda law against all liabilities, loss, damage or expense (including, but not limited to, liabilities under contract, tort andstatute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable) incurred or suffered by him or by reason of any act done,conceived in or omitted in the conduct of the Company’s business or in the discharge of his duties except in respect of fraud or dishonesty. In addition, each indemnitee shall beindemnified out of the assets of the Company against all liabilities incurred in defending any proceedings, whether civil or criminal, in which judgment is given in such indemnitee’s favor,or in which he is acquitted.Under our bye-laws, we and our shareholders have agreed to waive any claim or right of action we or they may have at any time against any indemnitee on account of anyaction taken by such indemnitee or the failure of such indemnitee to take any action in the performance of his duties with or for the Company with the exception of any claims or rights ofaction arising out of fraud or actions to recover any gain, personal profit or advantage to which such indemnitee is not legally entitled.Our Board of Directors may, at its discretion, purchase and maintain insurance for, among other persons, any indemnitee or any persons who are or were at the time directors,officers or employees of the Company, or of any other company in which the Company has a direct or indirect interest that is allied or associated with the Company, or of any subsidiaryundertaking of the Company or such other company, against liability incurred by such persons in respect of any act or omission in the actual or purported execution or discharge of theirduties or in the exercise or purported exercise of their powers or otherwise in relation to their duties, powers or offices in relation to the Company, subsidiary undertaking or any suchother company.62Table of ContentsOur Memorandum of Association may be amended with the approval of a majority of votes cast in respect of our outstanding common shares represented in person or by proxyand our bye-laws may be amended by approval by not less than 75% of the votes cast in respect of our issued and outstanding common shares represented in person or by proxy.Shareholder Rights AgreementOn June 16, 2017, our Board declared a dividend of one preferred share purchase right, or a Right, for each outstanding common share and adopted a shareholder rights plan, asset forth in the Shareholders Rights Agreement dated as of June 16, 2017, or the Rights Agreement, by and between the Company and Computershare Trust Company, N.A., as rightsagent.The Board adopted the Rights Agreement to protect shareholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penaltyupon any person or group that acquires 15% or more of our outstanding common shares without the approval of the Board. If a shareholder’s beneficial ownership of our commonshares as of the time of the public announcement of the rights plan and associated dividend declaration is at or above the applicable threshold, that shareholder’s then-existingownership percentage would be grandfathered, but the rights would become exercisable if at any time after such announcement, the shareholder increases its ownership percentage by1% or more.The Rights may have anti-takeover effects. The Rights will cause substantial dilution to any person or group that attempts to acquire us without the approval of our Board. Asa result, the overall effect of the Rights may be to render more difficult or discourage any attempt to acquire us. Because our Board can approve a redemption of the Rights for apermitted offer, the Rights should not interfere with a merger or other business combination approved by our Board.For those interested in the specific terms of the Rights Agreement, we provide the following summary description. Please note, however, that this description is only a summary,and is not complete, and should be read together with the entire Rights Agreement, which is an exhibit to the Form 8-A filed by us on June 16, 2017 and incorporated herein by reference.The foregoing description of the Rights Agreement is qualified in its entirety by reference to such exhibit.The Rights. The Rights trade with, and are inseparable from, our common shares. The Rights are evidenced only by certificates that represent our common shares. New Rightswill accompany any new common shares of the Company issues after June 26, 2017 until the Distribution Date described below.Exercise Price. Each Right allows its holder to purchase from the Company one one-thousandth of a Series A Participating Preferred Share (a “Preferred Share”) for $30.00 (the“Exercise Price”), once the Rights become exercisable. This portion of a Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as wouldone common share. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.Exercisability. The Rights are not exercisable until ten days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficialownership of 15% or more of our outstanding common shares.Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying common shares or arereportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of our common shares equivalent to theeconomic exposure created by the derivative position, to the extent our actual common shares are directly or indirectly held by counterparties to the derivatives contracts. Swaps dealersunassociated with any control intent or intent to evade the purposes of the Rights Agreement are exempt from such imputed beneficial ownership.63Table of ContentsFor persons who, prior to the time of public announcement of the Rights Agreement, beneficially own 15% or more of our outstanding common shares, the Rights Agreement“grandfathers” their current level of ownership, so long as they do not purchase additional shares in excess of certain limitations.The date when the Rights become exercisable is the “Distribution Date.” Until that date, our common share certificates (or, in the case of uncertificated shares, by notations inthe book-entry account system) will also evidence the Rights, and any transfer of our common shares will constitute a transfer of Rights. After that date, the Rights will separate from ourcommon shares and will be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of our common shares. Any Rights held by anAcquiring Person are null and void and may not be exercised.Preferred Share ProvisionsEach one one-thousandth of a Preferred Share, if issued, will, among other things:•not be redeemable;•entitle holders to quarterly dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount(payable in kind) of all non-cash dividends or other distributions other than a dividend payable in our common shares or a subdivision of our outstanding common shares(by reclassification or otherwise), declared on our common shares since the immediately preceding quarterly dividend payment date; and•entitle holders to one vote on all matters submitted to a vote of the shareholders of the Company.The value of one one-thousandth interest in a Preferred Share should approximate the value of one common share.Consequences of a Person or Group Becoming an Acquiring Person.•Flip In. If an Acquiring Person obtains beneficial ownership of 15% or more of our common shares, then each Right will entitle the holder thereof to purchase, for theExercise Price, a number of our common shares (or, in certain circumstances, cash, property or other securities of the Company) having a then-current market value of twicethe Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by theCompany, as further described below.Following the occurrence of an event set forth in preceding paragraph, all Rights that are or were, under certain circumstances specified in the Rights Agreement, beneficially owned byan Acquiring Person or certain of its transferees will be null and void.•Flip Over. If, after an Acquiring Person obtains 15% or more of our common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into theCompany; or (iii) the Company sellsor transfers 50% or more of its assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereofto purchase, for the Exercise Price, a number of our common shares of the person engaging in the transaction having a then-current market value of twice the Exercise Price.•Notional Shares. Shares held by affiliates and associates of an Acquiring Person, including certain entities in which the Acquiring Person beneficially owns a majority ofthe equity securities, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the RightsAgreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.64Table of ContentsRedemption. The Board may redeem the Rights for $0.01 per Right at any time before any person or group becomes an Acquiring Person. If the Board redeems any Rights, itmust redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.01 per Right. The redemption pricewill be adjusted if the Company has a stock dividend or a stock split.Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common shares, the Board mayextinguish the Rights by exchanging one common share or an equivalent security for each Right, other than Rights held by the Acquiring Person. In certain circumstances, the Companymay elect to exchange the Rights for cash or other securities of the Company having a value approximately equal to one common share.Expiration. The Rights expire on the earliest of (i) June 16, 2027; or (ii) the redemption or exchange of the Rights as described above.Anti-Dilution Provisions. The Board may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights toprevent dilution that may occur from a stock dividend, a stock split, or a reclassification of the Preferred Shares or our common shares. No adjustments to the Exercise Price of less than1% will be made.Amendments. The terms of the Rights and the Rights Agreement may be amended in any respect without the consent of the holders of the Rights on or prior to the DistributionDate. Thereafter, the terms of the Rights and the Rights Agreement may be amended without the consent of the holders of Rights, with certain exceptions, in order to (i) cure anyambiguities; (ii) correct or supplement any provision contained in the Rights Agreement that may be defective or inconsistent with any other provision therein; (iii) shorten or lengthenany time period pursuant to the Rights Agreement; or (iv) make changes that do not adversely affect the interests of holders of the Rights (other than an Acquiring Person or an affiliateor associate of an Acquiring Person).Taxes. The distribution of Rights should not be taxable for federal income tax purposes. However, following an event that renders the Rights exercisable or upon redemption ofthe Rights, shareholders may recognize taxable income.Dividend Reinvestment and Direct Stock Purchase PlanThe Company’s transfer agent, Computershare, maintains a dividend reinvestment program under which shareholders may reinvest their dividends for shares.ListingOur common shares are listed on the NYSE under the symbol “NAT.”Transfer AgentThe registrar and transfer agent for our common shares is Computershare Trust Company, N.A.C.Material ContractsFor a description of our 2019 Senior Secured Credit Facility, including the $30 million Accordion Loan, which the Company entered into on February 12, 2019, please see Item 5.Operating and Financial Review and Prospectus B. Liquidity and Capital Resources - Our Borrowing Activities.Scandic American Shipping Ltd (“Scandic”) has been a fully owned subsidiary of the Company since 2013 and the Company has determined that the intra-group agreementsbetween Scandic and the Company, including the management agreement between the Company and Scandic previously filed as an exhibit to the Company’s annual report for 2019, areno longer deemed material to the Company.65Table of ContentsD. Exchange ControlsThe Company has been designated as a non-resident of Bermuda for exchange control purposes by the Bermuda Monetary Authority, whose permission for the issue of itscommon shares was obtained prior to the offering thereof.The Company’s common shares are currently listed on an appointed stock exchange. For so long as the Company’s shares are listed on an appointed stock exchange thetransfer of shares between persons regarded as resident outside Bermuda for exchange control purposes and the issuance of common shares to or by such persons may be effectedwithout specific consent under the Bermuda Exchange Control Act of 1972 and regulations made thereunder. Issues and transfers of common shares between any person regarded asresident in Bermuda and any person regarded as non-resident for exchange control purposes require specific prior approval under the Bermuda Exchange Control Act 1972 unless suchcommon shares are listed on an appointed stock exchange.Subject to the foregoing, there are no limitations on the rights of owners of shares in the Company to hold or vote their shares. Because the Company has been designated asnon-resident for Bermuda exchange control purposes, there are no restrictions on its ability to transfer funds in and out of Bermuda or to pay to United States residents who are holdersof common shares, other than in respect of local Bermuda currency.In accordance with Bermuda law, share certificates may be issued only in the names of those with legal capacity. In the case of an applicant acting in a special capacity (forexample, as an executor or trustee), certificates may, at the request of the applicant, record the capacity in which the applicant is acting. Notwithstanding the recording of any suchspecial capacity, the Company is not bound to investigate or incur any responsibility in respect of the proper administration of any such estate or trust.The Company will take no notice of any trust applicable to any of its shares or other securities whether or not it had notice of such trust.As an “exempted company,” the Company is exempt from Bermuda laws which restrict the percentage of share capital that may be held by non-Bermudians, but as an exemptedcompany, the Company may not participate in certain business transactions including: (i) the acquisition or holding of land in Bermuda except for land required for its business by way oflease for a term not exceeding 50 years or otherwise, with the express authorization of the Ministers of Finance of Bermuda, land by way of lease for a term not exceeding 21 years inorder to provide accommodation or recreational facilities for its officers and employees; (ii) the taking of mortgages on land in Bermuda to secure an amount in excess of $50,000 withoutthe consent of the Minister of Finance of Bermuda; (iii) the acquisition of securities created or issued by, or any interest in, any local company or business, other than certain types ofBermuda government securities or securities of another “exempted company, exempted partnership or other corporation or partnership resident in Bermuda but incorporated abroad”; or(iv) the carrying on of business of any kind in Bermuda, except in so far as may be necessary for the carrying on of its business outside Bermuda or under a license granted by theMinister of Finance of Bermuda.The Bermuda government actively encourages foreign investment in “exempted” entities like the Company that are based in Bermuda but do not operate in competition withlocal business. In addition to having no restrictions on the degree of foreign ownership, the Company is subject neither to taxes on its income or dividends nor to any exchange controlsin Bermuda other than outlined above. In addition, there is no capital gains tax in Bermuda, and profits can be accumulated by the Company, as required, without limitation.66Table of ContentsE.TaxationBermuda Tax ConsiderationsUnder current Bermuda law, there are no taxes on profits, income or dividends nor is there any capital gains tax. Furthermore, the Company has received from the Minister ofFinance of Bermuda under the Exempted Undertakings Tax Protection Act of 1966, as amended, an undertaking that, in the event that Bermuda enacts any legislation imposing taxcomputed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax shallnot be applicable to the Company or to any of its operations, or the common shares, debentures or other obligations of the Company, until March 31, 2035. This undertaking does not,however, prevent the imposition of any such tax or duty on such persons as are ordinarily resident in Bermuda and holding such shares, debentures or obligations of the Company or ofproperty taxes on Company-owned real property or leasehold interests in Bermuda.The United States does not have a comprehensive income tax treaty with Bermuda. However, Bermuda has legislation in place (U.S.A. – Bermuda Tax Convention Act 1986)which authorizes the enforcement of certain obligations of Bermuda pursuant to the Convention Between The Government Of The United Kingdom of Great Britain And NorthernIreland (On Behalf Of The Government Of Bermuda) And The Government Of The United States Of America Relating To The Taxation Of Insurance Enterprises And Mutual AssistanceIn Tax Matters entered into on 11 July 1986 (the “Convention”). Article 5 of the Convention states that the U.S.A. and Bermuda “shall provide assistance as appropriate in carrying outthe laws of the respective covered jurisdictions (Bermuda and U.S.A.) relating to the prevention of tax fraud and the evasion of taxes. In addition, the competent authorities shall,through consultations, develop appropriate conditions, method, and techniques for providing, and shall thereafter provide, assistance as appropriate in carrying out the fiscal laws ofthe respective covered jurisdictions other than those relating to tax fraud and the evasion of taxes.”United States Federal Income Tax ConsiderationsThe following discussion is a summary of the material United States federal income tax considerations relevant to the Company and to a United States Holder and Non-UnitedStates Holder (each defined below) of our common shares. This discussion is based on advice received by us from Seward & Kissel LLP, our United States counsel. This discussiondoes not purport to deal with the tax consequences of owning common shares to all categories of investors, some of which (such as dealers in securities or currencies, investors whosefunctional currency is not the United States dollar, financial institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, insurance companies,persons holding our common shares as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, persons liable for alternative minimum tax, personssubject to the “base erosion and anti-avoidance” tax, persons required to recognize income for U.S. federal income tax purposes no later than when such income is included on an“applicable financial statement” and persons who are investors in pass-through entities) may be subject to special rules. This discussion only applies to shareholders who (i) own ourcommon shares as a capital asset and (ii) own less than 10%, actually or constructively, of our common shares. Shareholders are encouraged to consult their own tax advisors withrespect to the specific tax consequences to them of purchasing, holding or disposing of common shares.United States Federal Income Taxation of the CompanyOperating Income: In GeneralUnless exempt from United States federal income taxation under section 883 of the United Stated Internal Revenue Code of 1986, as amended, or the Code, a foreign corporationis subject to United States federal income taxation in the manner described below in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels foruse on a time, voyage or bareboat charter basis, or from the performance of services directly related to such use, which we refer to as Shipping Income, to the extent that such ShippingIncome is derived from sources within the United States, which we refer to as United States-Source Shipping Income.67Table of ContentsShipping Income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered to be 50% derived fromsources within the United States. Shipping Income that is attributable to transportation that both begins and ends in the United States will be considered to be 100% derived fromsources within the United States.Shipping Income that is attributable to transportation exclusively between non-United States ports will be considered to be 100% derived from sources outside the UnitedStates. Shipping Income derived from sources outside the United States will not be subject to United States federal income tax.Our vessels will be operated in various parts of the world and, in part, are expected to be involved in transportation of cargoes that begins or ends, but that does not both beginand end, in United States ports. Accordingly, it is not expected that we will engage in transportation that gives rise to 100% United States-Source Shipping Income.Exemption of Operating Income from United States Federal Income TaxationPursuant to section 883 of the Code, we will be exempt from United States federal income taxation on our United States-Source Shipping Income if (i) we are organized in aforeign country that grants an equivalent exemption from income taxation to corporations organized in the United States, which we refer to as the Country of Organization Requirement,and (ii) either (A) more than 50% of the value of our common shares is owned, directly or indirectly, by individuals who are “residents” of such country or of another foreign country thatgrants an equivalent exemption to corporations organized in the United States, which we refer to as the 50% Ownership Test, or (B) our common shares are “primarily and regularlytraded on an established securities market” in such country, in another country that grants an equivalent exemption to United States corporations, or in the United States, which we referto as the Publicly-Traded Test.Bermuda, the country in which we are incorporated, grants an equivalent exemption to United States corporations. Therefore, we will satisfy the Country of OrganizationRequirement and will be exempt from United States federal income taxation with respect to our United States-Source Shipping Income if we satisfy either the 50% Ownership Test or thePublicly-Traded Test.The regulations promulgated by the United States Department of the Treasury (the “Treasury Regulations”) under section 883 of the Code provide that stock of a foreigncorporation 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 any taxableyear 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 othersingle country.The Publicly-Traded Test also requires our common shares be “regularly traded” on an established securities market. Under the Treasury Regulations, our common shares areconsidered to be “regularly traded” on an established securities market if shares representing more than 50% of our outstanding common shares, by both total combined voting power ofall classes of stock entitled to vote and total value, are listed on the market, referred to as the “Listing Threshold.” The Treasury Regulations further require that with respect to eachclass of stock relied upon to meet the listing threshold, (i) such class of stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or 1/6 ofthe days in a short taxable year, which is referred to as the Trading Frequency Test; and (ii) the aggregate number of shares of such class of stock traded on such market during thetaxable year is at least 10% of the average number of shares of such class of stock outstanding during such year (as appropriately adjusted in the case of a short taxable year), which isreferred to as the Trading Volume Test. Even if we do not satisfy both the Trading Frequency and Trading Volume Tests, the Treasury Regulations provide that the Tests will be deemedsatisfied if our common shares are traded on an established securities market in the United States and such stock is regularly quoted by dealers making a market in our common shares.We believe that we satisfied the Publicly-Traded Test for our 2020 taxable year since, on more than half the days of the taxable year, we believe the Company’s common shareswere primarily and regularly traded on an established securities market in the United States, namely the NYSE.68Table of ContentsNotwithstanding the foregoing, we will not satisfy the Publicly-Traded Test if 50% or more of the vote and value of our common shares is owned (or is treated as owned undercertain stock ownership attribution rules) by persons each of whom owns (or is treated as owning under certain stock ownership attribution rules) 5% or more of the value of ourcommon shares, or 5% Shareholders, for more than half the days during the taxable year, to which we refer to as the 5% Override Rule. In the event the 5% Override Rule is triggered,the 5% Override Rule will nevertheless not apply if we can establish that among the closely-held group of 5% Shareholders, there are sufficient 5% Shareholders that are considered tobe “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 our commonshares for more than half the number of days during the taxable year. In order to determine the persons who are 5% Shareholders, we are permitted to rely on those persons that areidentified on Schedule 13G and Schedule 13D filings with the SEC as having a 5% or more beneficial interest in our common shares.We are not aware of any facts which would indicate that 50% or more of our common shares were actually or constructively owned by 5% Shareholders during our 2020 taxableyear. Accordingly, we expect that our common shares will be considered to be “primarily and regularly traded on an established securities market” and that we will, therefore, qualify forthe exemption under section 883 of the Code for our 2020 taxable year. However, because of the factual nature of the issues relating to this determination, no assurance can be given thatwe will qualify for the exemption in any future taxable year. For example, if 5% Shareholders owned 50% or more of our common shares, then we would have to satisfy certainrequirements regarding the identity and residence of our 5% Shareholders. These requirements are onerous and there is no assurance that we could satisfy them.United States Federal Income Taxation of Gain on Sale of VesselsRegardless of whether we qualify for exemption under section 883 of the Code, we will generally not be subject to United States federal income taxation with respect to gainrealized on the sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel willbe considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It isexpected that any sale of a vessel by us will be considered to occur outside of the United States.4% Gross Basis Tax RegimeTo the extent that the benefits of section 883 of the Code are unavailable with respect to any item of United States-Source Shipping Income, such Shipping Income that isconsidered not to be “effectively connected” with the conduct of a trade or business in the United States, as discussed below, would be subject to a 4% tax imposed by section 887 ofthe Code on a gross basis, without benefit of deductions, which we refer to as the 4% Gross Basis Tax Regime. Since under the sourcing rules described above, no more than 50% of ourShipping Income would be derived from United States sources, the maximum effective rate of United States federal income tax on our gross Shipping Income would never exceed 2%under the 4% Gross Basis Tax Regime.Net Basis and Branch Profits Tax RegimeTo the extent that the benefits of the exemption under section 883 of the Code are unavailable and our United States-Source Shipping Income is considered to be “effectivelyconnected” with the conduct of a United States trade or business, as described below, any such “effectively connected” United States-Source Shipping Income, net of applicabledeductions, would be subject to the United States federal income tax imposed at corporate rate of 21% under present law. In addition, we may be subject to the 30% “branch profits”taxes 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 paidattributable to the conduct of the United States trade or business.Our United States-Source Shipping Income would be considered “effectively connected” with the conduct of a U.S. trade or business only if (i) we have, or are considered tohave, a fixed place of business in the United States involved in the earning of Shipping Income and (ii) substantially all of our United States-Source Shipping Income is attributable toregularly scheduled transportation, such as the operation of a vessel that followed a published schedule with repeated sailings at regular intervals between the same points for voyagesthat begin or end in the United States, or, in the case of income from the chartering of a vessel, is attributable to a fixed place of business in the United States.69Table of ContentsWe do not intend to have a fixed place of business in the United States involved in the earning of Shipping Income. Based on the foregoing and on the expected mode of ourshipping operations and other activities, we believe that none of our United States-Source Shipping Income will be “effectively connected” with the conduct of a United States trade orbusiness.United States Federal Income Taxation of United States HoldersAs used herein, the term “United States Holder” means, for United States federal income tax purposes, a beneficial owner of common shares who is (A) an individual citizen orresident of the United States, (B) a corporation (or other entity treated as a corporation) created or organized in or under the laws of the United States or of any state or the District ofColumbia, (C) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (D) a trust if (a) a court within theUnited States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions ofthe trust or (b) it has an election in place to be treated as a United States person.If a partnership holds our common shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of thepartnership. If you are a partner in a partnership holding our common shares, you are urged to consult your tax advisors.DistributionsSubject to the discussion below of passive foreign investment companies, or PFICs, any distributions made by us with respect to our common shares to a United States Holderwill generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income,” as described in more detail below, to the extent of our current oraccumulated earnings and profits, as determined under United States federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a non-taxablereturn of capital to the extent of the United States Holder’s tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a United Statescorporation, United States Holders that are corporations will generally not be entitled to claim a dividends received deduction with respect to any distributions they receive from us.Dividends paid with respect to our common shares will generally be treated as “passive category income” or, in the case of certain types of United States Holders, “general categoryincome” for purposes of computing allowable foreign tax credits for United States foreign tax credit purposes.Dividends paid on our common shares to a United States Holder who is an individual, trust or estate, or a United States Individual Holder, will generally be treated as “qualifieddividend income” that is taxable to such United States Individual Holders at preferential tax rates provided that (1) the common shares are readily tradable on an established securitiesmarket in the United States (such as the NYSE on which our common shares are traded); (2) we are not a PFIC for the taxable year during which the dividend is paid or the immediatelypreceding taxable year (as discussed below); (3) the United States Individual Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days beforethe date on which the common shares become ex-dividend, and (4) the United States Individual Holder is not under an obligation (whether pursuant to a short sale or otherwise) to makepayments with respect to positions in substantially similar or related property. There is no assurance that any dividends paid on our common shares will be eligible for these preferentialrates in the hands of a United States Individual Holder. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a United StatesIndividual Holder.If we pay an “extraordinary dividend” on our common shares (generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder’s adjusted tax basis (orfair market value in certain circumstances) in the common shares or dividends received within a one-year period that, in the aggregate, equal or exceed 20% of a shareholder’s adjustedtax basis (or fair market value upon the shareholder’s election)) that is treated as “qualified dividend income,” then any loss derived by a United States Individual Holder from the sale orexchange of such common shares will be treated as long-term capital loss to the extent of such dividend.70Table of ContentsSale, Exchange or other Disposition of Common SharesAssuming we do not constitute a PFIC for taxable years after 2004, a United States Holder generally will recognize taxable gain or loss upon a sale, exchange or other dispositionof our common shares in an amount equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the United StatesHolder’s tax basis in such common shares. Such gain or loss will be treated as long-term capital gain or loss if the United States Holder’s holding period is greater than one year at thetime of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as United States-source income or loss, as applicable, for United States foreign tax creditpurposes. A United States Holder’s ability to deduct capital losses is subject to certain limitations.Special rules may apply to a United States Holder who purchased shares before 2005 and did not make a timely QEF election or a mark-to-market election (as discussed below). Such United States Holders are encouraged to consult their tax advisors regarding the United States federal income tax consequences to them of the disposal of our common shares.Passive Foreign Investment Company ConsiderationsSpecial United States federal income tax rules apply to a United States Holder that holds shares in a foreign corporation classified as a PFIC for United States federal income taxpurposes. In general, we will be treated as a PFIC with respect to a United States Holder if, for any taxable year in which such Holder held our common shares, either•at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conductof a rental business), or•at least 50% of the average value of the assets held by us during such taxable year produce, or are held for the production of, such passive income.For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of oursubsidiary corporations in which we own at least 25% of the value of the subsidiary’s shares. Income earned, or deemed earned, by us in connection with the performance of serviceswould not constitute passive income. By contrast, rental income would generally constitute passive income unless we were treated under specific rules as deriving our rental income inthe active conduct of a trade or business.For taxable years through 2004, we were a PFIC. However, based on our current operations and future projections, we do not believe that we have been, or will become, a PFICwith respect to our taxable years after 2004. Although there is no legal authority directly on point, and we are not relying upon an opinion of counsel on this issue, our belief is basedprincipally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from our time chartering and voyage charteringactivities should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we own and operate orare deemed to own and operate in connection with the production of such income, in particular, the vessels, should not constitute passive assets for purposes of determining whetherwe are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and Internal Revenue Service, or IRS, pronouncements concerning thecharacterization of income derived from time charters and voyage charters as services income for other tax purposes. However, we note that there is also authority which characterizestime charter income as rental income rather than services income for other tax purposes. In the absence of any legal authority specifically relating to the statutory provisions governingPFICs, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC, we cannot assure youthat the nature of our operations will not change in the future.As discussed more fully below, if we were to be treated as a PFIC for any taxable year which included a United States Holder’s holding period in our common shares, then suchUnited States Holder would be subject to different United States federal income taxation rules depending on whether the United States Holder makes an election to treat us as a“qualified electing fund,” which election we refer to as a QEF Election. As an alternative to making a QEF election, a United States Holder should be able to make a “mark-to-market”election with respect to our common shares, as discussed below. In addition, if we were to be treated as a PFIC for a taxable year ending on or after December 31, 2013, a United StatesHolder of our common shares would be required to file an annual information return with the IRS for such year.71Table of ContentsUnited States Holders Making a Timely QEF ElectionPass-Through of Ordinary Earnings and Net Capital Gain. A United States Holder who makes a timely QEF Election with respect to our common shares, or an Electing Holder,would report for United States federal income tax purposes his pro rata share of our “ordinary earnings” (i.e., the net operating income determined under United States federal income taxprinciples) and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder. Our “net capital gain” is any excess of any of our net longterm capital gains over our net short term capital losses and is reported by the Electing Holder as long term capital gain. Our net operating losses or net capital losses would not passthrough to the Electing Holder and will not offset our ordinary earnings or net capital gain reportable to Electing Holders in subsequent years (although such losses would ultimatelyreduce the gain, or increase the loss, if any, recognized by the Electing Holder on the sale of his common shares).For purposes of calculating our ordinary earnings, the cost of each vessel is depreciated on a straight-line basis over the applicable recovery period for vessels. Any gain onthe sale of a vessel would be treated as ordinary income, rather than capital gain, to the extent of such depreciation deductions with respect to such vessel.In general, an Electing Holder would not be taxed twice on his share of our income. Thus, distributions received from us by an Electing Holder are excluded from the ElectingHolder’s gross income to the extent of the Electing Holder’s prior inclusions of our ordinary earnings and net capital gain. The Electing Holder’s tax basis in his shares would beincreased by any amount included in the Electing Holder’s income. Distributions received by an Electing Holder, which are not includible in income because they have been previouslytaxed, would decrease the Electing Holder’s tax basis in the common shares. Distributions, if any, in excess of such tax basis would be treated as capital gain (which gain will be treatedas long-term capital gain if the Electing Holder held its common shares for more than one year at the time of distribution).Disposition of Common Shares. An Electing Holder would generally recognize capital gain or loss on the sale or exchange of common shares in an amount equal to thedifference between the amount realized by the Electing Holder from such sale or exchange and the Electing Holder’s tax basis in the common shares. Such gain or loss would generally betreated as long-term capital gain or loss if the Electing Holder’s holding period in the common shares at the time of the sale or exchange is more than one year. A United States Holder’sability to deduct capital losses may be limited.Making a QEF Election. A United States Holder makes a QEF Election for a taxable year by completing and filing IRS Form 8621 (Return by a Shareholder of a Passive ForeignInvestment Company or Qualified Electing Fund) in accordance with the instructions thereto. If we were aware that we were to be treated as a PFIC for any taxable year, we wouldprovide each United States Holder with all necessary information in order to make the QEF Election described above.United States Holders Making a Timely Mark-to-Market ElectionMark-to-Market Regime. A United States Holder who does not make a QEF Election may make a “mark-to-market” election under section 1296 of the Code, provided that thecommon shares are regularly traded on a “qualified exchange.” The NYSE, on which the common shares are traded, is a “qualified exchange” for these purposes. A United States Holderwho makes a timely mark-to-market election with respect to the common shares would include annually in the United States Holder’s income, as ordinary income, any excess of the fairmarket value of the common shares at the close of the taxable year over the United States Holder’s then adjusted tax basis in the common shares. The excess, if any, of the United StatesHolder’s adjusted tax basis at the close of the taxable year over the then fair market value of the common shares would be deductible in an amount equal to the lesser of the amount ofthe excess or the net mark-to-market gains that the United States Holder included in income in previous years with respect to the common shares. A United States Holder’s tax basis inhis common shares would be adjusted to reflect any income or loss amount recognized pursuant to the mark-to-market election.72Table of ContentsDisposition of Common Shares. A United States Holder who makes a timely mark-to-market election would recognize ordinary income or loss on a sale, exchange or otherdisposition of the common shares in an amount equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and theUnited States Holder’s tax basis in the common shares; provided, however, that any ordinary loss on the sale, exchange or other disposition may not exceed the net mark-to-market gainsthat the United States Holder included in income in previous years with respect to the common shares. The amount of any loss in excess of such net mark-to market gains is treated ascapital loss.Making the Mark-to-Market Election. A United States Holder makes a mark-to-market election for a taxable year by completing and filing IRS Form 8621 (Return by aShareholder of a Passive Foreign Investment Company or Qualified Electing Fund) in accordance with the instructions thereto.United States Holders Not Making a Timely QEF Election or Mark-to-Market ElectionA United States Holder who does not make a timely QEF Election or a timely mark-to-market election, which we refer to as a Non-Electing Holder, would be subject to specialrules with respect to (i) any “excess distribution” (generally, the portion of any distributions received by the Non-Electing Holder on the common shares in a taxable year in excess of125% 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 thecommon shares), and (ii) any gain realized on the sale or other disposition of common shares. Under these rules, (i) the excess distribution or gain would be allocated ratably over theNon-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 aPFIC, 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 applicableclass 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. Ifa Non-Electing Holder dies while owning common shares, the Non-Electing Holder’s successor would be ineligible to receive a step-up in the tax basis of those common shares.Distributions received by a Non-Electing Holder that are not “excess distributions” would be includible in the gross income of the Non-Electing Holder as dividend income tothe extent that such distributions are paid out of our current or accumulated earnings and profits as determined under United States federal income tax principles. Such dividends wouldnot be eligible to be treated as “qualified dividend income” eligible for preferential tax rates. Distributions in excess of our current or accumulated earnings and profits would be treatedfirst as a return of the United States Holder’s tax basis in the common shares (thereby increasing the amount of any gain or decreasing the amount of any loss realized on the subsequentsale or disposition of such common shares) and thereafter as capital gain.United States Holders Who Acquired Shares Before 2005We were a PFIC through the 2004 taxable year. Therefore, a United States Holder who acquired our common shares before 2005 may be subject to special rules with respect toour common shares. In particular, a United States Holder who did not make a timely QEF Election or a mark-to-market election may continue to be subject to the PFIC rules with respectto our common shares. Such United States Holders are encouraged to consult their tax advisors regarding the application of these rules as well as the availability of certain electionswhich may ameliorate the application of these rules.United States Federal Income Taxation of Non-United States HoldersA beneficial owner of common shares (other than a partnership) that is not a United States Holder is referred to herein as a Non-United States Holder.73Table of ContentsDividends on Common SharesNon-United States Holders generally will not be subject to United States federal income or withholding tax on dividends received from us with respect to our common shares,unless that income is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States. If the Non-United States Holder is entitled to thebenefits of a United States income tax treaty with respect to those dividends, that income is taxable only if it is attributable to a permanent establishment maintained by the Non-UnitedStates Holder in the United States.Sale, Exchange or Other Disposition of Common SharesNon-United States Holders generally will not be subject to United States federal income or withholding tax on any gain realized upon the sale, exchange or other disposition ofour common shares, unless:•the gain is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States (and, if the Non-United States Holder is entitledto the benefits of a United States income tax treaty with respect to that gain, that gain is attributable to a permanent establishment maintained by the Non-United StatesHolder in the United States); or•the Non-United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.If the Non-United States Holder is engaged in a United States trade or business for United States federal income tax purposes, the income from the common shares, includingdividends and the gain from the sale, exchange or other disposition of the common shares, that is effectively connected with the conduct of that trade or business will generally besubject to regular United States federal income tax in the same manner as discussed in the previous section relating to the taxation of United States Holders. In addition, if you are acorporate Non-United States Holder, your earnings and profits that are attributable to the effectively connected income, subject to certain adjustments, may be subject to an additionalbranch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable United States income tax treaty.Backup Withholding and Information ReportingIn general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements if you are a UnitedStates Individual Holder. Such payments may also be subject to backup withholding tax if you are a United States Individual Holder and you:•fail to provide an accurate taxpayer identification number;•are notified by the IRS that you have failed to report all interest or dividends required to be shown on your United States federal income tax returns; or•in certain circumstances, fail to comply with applicable certification requirements.Non-United States Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an IRS Form W-8.If you are a Non-United States Holder and you sell your common shares to or through a United States office of a broker, the payment of the proceeds is subject to both UnitedStates backup withholding and information reporting unless you certify that you are a non-United States person, under penalties of perjury, or you otherwise establish an exemption. Ifyou are a Non-United States Holder and you sell your common shares through a non-United States office of a non-United States broker and the sales proceeds are paid to you outsidethe United States, then information reporting and backup withholding generally will not apply to that payment. However, information reporting requirements, but not backupwithholding, will apply to a payment of sales proceeds, even if that payment is made to you outside the United States, if you sell your common shares through a non-United States officeof a broker that is a United States person or has some other contacts with the United States. Such information reporting requirements will not apply, however, if the broker hasdocumentary evidence in his records that you are a non-United States person and certain other conditions are met, or you otherwise establish an exemption.74Table of ContentsBackup withholding is not an additional tax. Rather, you generally may obtain a refund of any amounts withheld under backup withholding rules that exceed your United Statesfederal income tax liability by filing a refund claim with the IRS.Individuals who are United States Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-United States Holders and certainUnited States entities) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset foreach taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollaramount as prescribed by applicable Treasury regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the shares are held throughan account maintained with a United States financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonablecause and not due to willful neglect. Additionally, in the event an individual United States Holder (and to the extent specified in applicable Treasury regulations, an individual Non-United States Holder or a United States entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of United Statesfederal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. United States Holders (including UnitedStates entities) and Non- United States Holders are encouraged consult their own tax advisors regarding their reporting obligations under this legislation.In addition to the tax consequences discussed above, we may be subject to tax in one or more other jurisdictions where we conduct activities. The amount of any such taximposed upon our operations may be material.The above-mentioned tax considerations does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase, own ordispose of the shares. Shareholders who wish to clarify their own tax situation should consult and rely upon their own tax advisors.Other Tax ConsiderationsIn addition to the tax consequences discussed above, we may be subject to tax in one or more other jurisdictions where we conduct activities. The amount of any such taximposed upon our operations may be material.F.Dividends and Paying AgentsNot applicable.G.Statement by ExpertsNot applicable.H.Documents on DisplayWe are subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements we file reports and otherinformation with the SEC. These materials, including this annual report and the accompanying exhibits may be inspected and copied at the public reference facilities maintained by theSEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549. The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and otherinformation that we and other registrants have filed electronically with the SEC. Our filings are also available on our website at www.nat.bm. This web address is provided as an inactivetextual reference only. Information contained on our website does not constitute part of this annual report.75Table of ContentsShareholders may also request a copy of our filings at no cost, by writing or telephoning us at the following address:Nordic American Tankers LimitedLOM Building27 Reid StreetHamilton, HM11, Bermuda.Tel: +1 441 292 7202Fax: +1 441 292 3266I.Subsidiary InformationNot applicable.ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKThe Company is exposed to market risk from changes in interest rates related to the variable rate of the Company’s borrowings under our 2019 Senior Secured Credit Facility,$30.0 million Accordion Loan and Financing of 2018-built Vessel.Amounts borrowed under these borrowing agreements bear interest at a rate equal to LIBOR plus a margin. Increasing interest rates could affect our future profitability. Incertain situations, the Company may enter into financial instruments to reduce the risk associated with fluctuations in interest rates.A 100 basis point increase in LIBOR would have resulted in an increase of approximately $3.8 million in our interest expense for the year ended December 31, 2020.The Company is exposed to the spot market. Historically, the tanker markets have been volatile as a result of the many conditions and factors that can affect the price, supplyand demand for tanker capacity. Changes in demand for transportation of oil over longer distances and supply of tankers to carry that oil may materially affect our revenues, profitabilityand cash flows. All of our vessels are currently operated in the spot market through a cooperative arrangement. We believe that over time, spot employment generates premium earningscompared to longer-term employment.We estimate that during 2020, a $1,000 per day per vessel decrease in the spot market rate would have decreased our voyage revenue by approximately $7.5 million.ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESNot applicable.PART IIITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNot applicable.ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDSNot applicable.76Table of ContentsITEM 15. CONTROLS AND PROCEDURESA.Disclosure Controls and Procedures.Pursuant to Rules 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s management, under the supervision and with theparticipation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures asof December 31, 2020. Disclosure controls and procedures are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under theAct is recorded, processed, summarized and reported, within the time periods specified in the U.S Securities and Exchange Commission’s rules and forms. Disclosure controls andprocedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits underthe Act is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate toallow timely decisions regarding required disclosure. Based on this evaluation, management has concluded that our disclosure controls and procedures were effective as of December 31,2020.B.Management’s annual report on internal control over financial reporting.Our internal control system is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the reliability of financial reportingand the preparation of published financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our system of internal control overfinancial reporting includes those policies and procedures that:•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generallyaccepted in the United States of America and that our receipts and expenditures are being made only in accordance with authorization of our management and directors;and•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on theconsolidated financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. All internal control systems, no matter how welldesigned and operated, can only provide reasonable, not absolute, assurance that the objectives of the control system will be met. Therefore, even those systems determined to beeffective can provide only reasonable assurance with respect to financial statement preparation and presentation. Additionally, any projections of any evaluations of effectiveness tofuture periods are subject to the risk that controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with our policies andprocedures.Our management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as at December31, 2020, based on the framework established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission(“COSO”). Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2020.C.Attestation report of the registered public accounting firm.The effectiveness of our internal control over financial reporting as of December 31, 2020 has been audited by KPMG AS, an independent registered public accounting firm, asstated in their report that appears herein.77Table of ContentsD. Changes in internal control over financial reporting.There have been no changes in internal controls over financial reporting that occurred during the year covered by this Annual Report, that have materially affected, or arereasonably likely to materially affect, the Company’s internal controls over financial reporting.ITEM 16.RESERVEDITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERTThe Board of Directors has determined that Mr. Kelly, who serves as Chairman of the Audit Committee, qualifies as an “audit committee financial expert” under SEC rules, andthat Mr. Kelly is “independent” under applicable NYSE rules and SEC standards.ITEM 16B.CODE OF ETHICSThe Company has adopted a code of ethics that applies to all of the Company’s employees, including our chief executive officer, chief financial officer, principal accountingofficer or controller. The code of ethics may be downloaded at our website (www.nat.bm). Additionally, any person, upon request, may ask for a hard copy or an electronic file of thecode of ethicsITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICESA.Audit FeesOur Board of Directors has established preapproval and procedures for the engagement of the Company’s independent public accounting firms for all audit and non-auditservices. The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for professional services rendered by our principal accountant, KPMG AS, for thefiscal years ended December 31, 2020 and 2019, respectively, for the audit of the Company’s annual financial statements and services provided by the principal accountant in connectionwith statutory and regulatory filings or engagements for the years ended December 31, 2020 and 2019.FISCAL YEAR ENDED DECEMBER 31, 2020 $828,566 FISCAL YEAR ENDED DECEMBER 31, 2019 $853,439 B.Audit-Related FeesFISCAL YEAR ENDED DECEMBER 31, 2020 $0 FISCAL YEAR ENDED DECEMBER 31, 2019 $0 C.Tax FeesNot applicable.D.All Other FeesNot applicable.E.Audit Committee’s Pre-Approval Policies and ProceduresOur audit committee pre-approves all audit, audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees prior tothe engagement of the independent auditor with respect to such services.78Table of ContentsF. Not applicable.ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot applicable.ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.Not applicable.ITEM 16F.CHANGE IN REGISTRANT`S CERTIFYING ACCOUNTANT.Not applicable.ITEM 16G.CORPORATE GOVERNANCEPursuant to an exception for foreign private issuers, we, as a Bermuda company, are not required to comply with the corporate governance practices followed by U.S. companiesunder the NYSE listing standards (which are available at www.nyse.com) because in certain cases we follow our home country (Bermuda) practice. We believe that our establishedpractices in the area of corporate governance are in line with the spirit of the NYSE standards and provide adequate protection to our shareholders.There are four significant differences between our corporate governance practices and the NYSE standards applicable to listed U.S. companies. The NYSE requires that non-management directors meet regularly in executive sessions without management. The NYSE also requires that all independent directors meet in an executive session at least once a year.As permitted under Bermuda law and our bye-laws, our non-management directors do not regularly hold executive sessions without management and we do not expect them to do so inthe future. The NYSE requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose,duties and evaluation procedures of the committee. As permitted under Bermuda law and our bye-laws, we do not currently have a nominating or corporate governance committee. TheNYSE requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent. As permitted by Rule 10A-3under the Securities Exchange Act of 1934, our audit committee consists of one independent member of our Board of Directors. The NYSE requires U.S. companies to adopt and disclosecorporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management andindependent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. We are not required toadopt such guidelines under Bermuda law and we have not adopted such guidelines.ITEM 16H.MINE SAFETY DISCLOSURENot applicable.PART IIIITEM 17.FINANCIAL STATEMENTSSee Item 18.ITEM 18.FINANCIAL STATEMENTSThe financial information required by this Item is set forth on pages F-1 to F-24 filed as part of this annual report.79Table of ContentsITEM 19.EXHIBITS1.1Memorandum of Association of the Company incorporated by reference to Exhibit 1.1 to the Company’s annual report on Form 20-F filed with the Securities andExchange Commission on April 17, 2012. 1.2By-Laws of the Company incorporated by reference to Form 6-K filed with the Securities and Exchange Commission on January 18, 2012. 2.1Form of Share Certificate incorporated by reference to Exhibit 2.1 to the Company’s annual report on Form 20-F filed with the Securities and Exchange Commission onApril 17, 2012. 2.2Shareholder Rights Agreement dated as of June 16, 2017 by and between the Company and Computershare Trust Company, N.A., as rights agent incorporated byreference to Form 6-K filed with the Securities and Exchange Commission on June 16, 2017. 2.3Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 incorporated by reference to Exhibit 2.3 to the Company’s annualreport on Form 20-F filed with the Securities and Exchange Commission on April 16, 2020. 4.11Amended and Restated 2011 Equity Incentive Plan, incorporated by reference to Exhibit 4.11 to the Company’s annual report on Form 20-F for the fiscal year endedDecember 31, 2019 filed with the Securities and Exchange Commission on April 16, 2020. 4.12Equity Distribution Agreement dated March 29, 2019, by and between Nordic American Tankers Limited and B. Riley FBR, Inc, incorporated by reference to Exhibit4.14 to the Company’s annual report on Form 20-F for the fiscal year ended December 31, 2019 filed with the Securities and Exchange Commission on April 16, 2020. 4.13Equity Distribution Agreement dated October 16, 2020, by and between Nordic American Tankers Limited and B. Riley Securities, Inc. 8.1Subsidiaries of Nordic American Tankers Limited 12.1Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer. 12.2Rule 13a-14(a) /15d-14(a) Certification of the Chief Financial Officer. 13.1Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 13.2Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 15.1Consent of Independent Registered Public Accounting Firm – KPMG AS. 15.2Consent of Fearnleys 101.INSXBRL Instance Document 101.SCHXBRL Taxonomy Extension Schema Document 101.CALXBRL Taxonomy Extension Schema Calculation Linkbase Document 101.DEFXBRL Taxonomy Extension Schema Definition Linkbase Document 101.LABXBRL Taxonomy Extension Schema Label Linkbase Document 101.PREXBRL Taxonomy Extension Schema Presentation Linkbase Document80Table of ContentsSIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf. NORDIC AMERICAN TANKERS LIMITED /s/Herbjørn Hansson April 29, 2021Name: Herbjørn Hansson Title: Founder, Chairman, President, and Chief Executive Officer 81Table of ContentsNORDIC AMERICAN TANKERS LIMITEDTABLE OF CONTENTSPage REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM – KPMG ASF-2 F-3 FINANCIAL STATEMENTS: Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018F-4 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018F-5 Consolidated Balance Sheets as of December 31, 2020 and 2019F-6 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2020, 2019 and 2018F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018F-8 Notes to Consolidated Financial StatementsF-9F-1Table of ContentsReport of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsNordic American Tankers Limited:Opinion on the Consolidated Financial StatementsWe have audited the accompanying consolidated balance sheets of Nordic American Tankers Limited and subsidiaries (the Company) as of December 31, 2020 and 2019, the relatedconsolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three‑year period ended December 31, 2020, andthe related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position ofthe Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2020, in conformitywith U.S. generally accepted accounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financialreporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission, and our report dated April 29, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statementsbased on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federalsecurities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether theconsolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatementof the consolidated 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 consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimatesmade by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MatterThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to becommunicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging,subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and weare not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.Recoverability of the carrying value of vesselsAs discussed in Note 4 to the consolidated financial statements, the carrying value of vessels as of December 31, 2020 was $861.3 million. As discussed in Note 2, at eachreporting date, the Company evaluates the recoverability of the carrying values of vessels, once identifying events or changes in circumstances indicate the carrying value ofvessels may not be recoverable. To perform this evaluation, the Company estimates undiscounted cash flows to result from the use and eventual disposition of each vessel.We identified the assessment of recoverability of the carrying value of vessels as a critical audit matter. The undiscounted cash flow model used to calculate the recoverabilityof vessels was challenging to test due to the subjectivity of a certain assumption. Specifically, charter rates are volatile and changes could have had a significant effect on theCompany’s assessment of the carrying value of the vessels.The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internalcontrol related to the recoverability of the carrying value of vessels, including the determination of charter rates. We evaluated the Company’s charter rates for 2021 and 2022by comparing the Company’s historical expected charter rates to actual charter rates and comparing current expectations of charter rates to forecasts from brokers and publiclyavailable information about the industry. To evaluate the Company’s charter rates from 2023 to the end of the useful life of the vessel, we compared the Company’s charter ratesto both Company specific historical results and to historical charter rates from brokers and analyzed publicly available information about the industry./s/ KPMG ASWe have served as the Company’s auditor since 2015.Oslo, NorwayApril 29, 2021F-2Table of ContentsReport of Independent Registered Public Accounting FirmTo the Shareholders and Board of DirectorsNordic American Tankers Limited:Opinion on Internal Control Over Financial ReportingWe have audited Nordic American Tankers Limited and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in allmaterial respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued bythe Committee of Sponsoring Organizations of the Treadway Commission.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Companyas of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in thethree-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements), and our report dated April 29, 2021 expressed an unqualifiedopinion on those consolidated financial statements.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financialreporting, included in the accompanying management's annual report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internalcontrol over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company inaccordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whethereffective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding ofinternal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based onthe assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis forour opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, andthat receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to futureperiods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate./s/ KPMG ASOslo, NorwayApril 29, 2021F-3Table of ContentsNORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF OPERATIONS FOR YEAR ENDED DECEMBER 31, 2020, 2019 AND 2018All figures in USD ‘000, except share and per share amount Year Ended December 31, 2020 2019 2018 Voyage Revenues 354,619 317,220 289,016 Voyage Expenses (121,089) (141,770) (165,012)Vessel Operating Expenses (66,883) (66,033) (80,411)Impairment Loss on Vessels - - (2,168)Loss on Disposal of Vessels - - (6,619)General and Administrative Expenses (17,586) (13,481) (12,727)Depreciation Expense (67,834) (63,965) (60,695)Net Operating Income (Loss) 81,227 31,971 (38,616)Interest Income 96 298 334 Interest Expense (31,481) (38,390) (34,549)Other Financial Income (Expense) 255 (4,160) (14,729)Total Other Expenses (31,130) (42,252) (48,944)Net Income (Loss) Before Income Taxes and Equity Loss 50,097 (10,281) (87,560)Income Tax Expense (64) (71) (79)Equity Loss from Associate - - (7,667)Net Income (Loss) 50,033 (10,352) (95,306) Basic and Diluted Income (Loss) per Share 0.34 (0.07) (0.67)Basic and Diluted Average Number of Common Shares Outstanding 149,292,586 142,571,361 141,969,666 The accompanying notes are an integral part of these consolidated financial statements.F-4Table of ContentsNORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR YEAR ENDED DECEMBER 31, 2020, 2019 AND 2018All figures in USD ‘000, except share and per share amount Year Ended December 31, 2020 2019 2018 Net Income (Loss) 50,033 (10,352) (95,306)Other Comprehensive Income (Loss) Translation Differences 157 (498) (172)Unrealized Gain (Loss) on Defined benefit plan (76) 420 40 Other Comprehensive Income (Loss) 81 (78) (132)Total Comprehensive Income (Loss) 50,114 (10,430) (95,438)The accompanying notes are an integral part of these consolidated financial statements.F-5Table of ContentsNORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2020 AND 2019All figures in USD ‘000, except share and per share amount As of December 31, Assets 2020 2019 Current Assets Cash and Cash Equivalents 57,847 48,847 Restricted Cash 4,223 12,791 Accounts Receivable, Net 6,349 24,583 Prepaid Expenses 5,477 3,383 Inventory 19,408 22,475 Voyages in Progress 4,644 13,124 Investment Securities - 825 Other Current Assets 1,574 3,344 Total Current Assets 99,522 129,372 Non-Current Assets Vessels 861,342 899,997 Vessels under Construction 11,000 - Right of Use Assets 1,219 1,412 Other Non-Current Assets 1,264 122 Total Non-Current Assets 874,825 901,531 Total Assets 974,347 1,030,903 Liabilities and Shareholders’ Equity Current Liabilities Accounts Payable 4,099 8,405 Accrued Voyage Expenses 5,254 11,524 Other Current Liabilities 8,232 15,562 Current Portion of Long-Term Debt 22,094 23,537 Total Current Liabilities 39,679 59,028 Non-Current Liabilities Long-Term Debt 334,615 375,364 Operating Lease Liabilities 730 934 Other Non-Current Liabilities 197 153 Total Non-Current Liabilities 335,542 376,451 Commitments and Contingencies Shareholders’ Equity Common Stock, par value $0.01 per share 360,000,000 authorized, 151,446,112 and 147,230,634 issued and outstanding at December 31, 2020and December 31, 2019, respectively. 1,514 1,472 Additional Paid-In Capital 59,412 38,499 Contributed Surplus 539,516 567,202 Accumulated Other Comprehensive Loss (1,316) (1,397)Retained Earnings (Accumulated Deficit) - (10,352)Total Shareholders’ Equity 599,126 595,424 Total Liabilities and Shareholders’ Equity 974,347 1,030,903 The accompanying notes are an integral part of these consolidated financial statements.F-6Table of ContentsNORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR YEAR ENDED DECEMBER 31, 2020, 2019 AND 2018All figures in USD ‘000, except number of shares Number ofShares TreasuryShares CommonStock AdditionalPaid-InCapital ContributedSurplus AccumulatedOtherComprehensiveLoss RetainedEarnings(AccumulatedDeficit) TotalShareholders’Equity Balance at January 1, 2018 141,969,666 22,000 1,420 123,439 796,817 (1,187) (209,425) 711,064 Effect of change in accounting policy (ASC 606) - - - - - (4,072) (4,072)Adjusted balance at January 1, 2018 141,969,666 22,000 1,420 123,439 796,817 (1,187) (213,497) 706,992 Net Loss - - - - - - (95,306) (95,306)Other Comprehensive Loss - - - - - (132) - (132)Share Based Compensation - - - 413 - - - 413 Dividends Distributed - - - - (9,936) - - (9,936)Balance at December 31, 2018 141,969,666 22,000 1,420 123,852 786,881 (1,319) (308,803) 602,031 Net Loss - - - - - - (10,352) (10,352)Coverage of Accumulated Deficit as of December 31, 2018 - - - - (308,803) - 308,803 - Reduction of Share Premium - - - (103,379) 103,379 - - - Common Shares Issued, net of $0.7 million issuance cost 5,260,968 - 52 17,870 - - - 17,922 Other Comprehensive Loss - - - - - (78) - (78)Share Based Compensation - - - 156 - - - (156)Forfeited shares – 2011 Equity Incentive Plan - 20,000 - - - - - - Dividends Distributed - - - - (14,255) - - (14,255)Balance at December 31, 2019 147,230,634 42,000 1,472 38,499 567,202 (1,396) (10,352) 595,424 Net Income - - - - - - 50,033 50,033 Common Shares Issued, net of $0.7 million issuance cost 4,215,478 - 42 20,628 - - - 20,670 Other Comprehensive Loss - - - - - 81 - 81 Share Based Compensation - - - 285 - - - 285 Dividends Distributed - - - - (27,686) - (39,566) (67,242)Balance at December 31, 2020 151,446,112 42,000 1,514 59,412 539,516 (1,316) - 599,126 The accompanying notes are an integral part of these consolidated financial statements.F-7Table of ContentsNORDIC AMERICAN TANKERS LIMITEDCONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020, 2019 AND 2018All figures in USD ‘000 Year Ended December 31, Cash Flows from Operating Activities 2020 2019 2018 Net Income (Loss) 50,033 (10,352) (95,306)Reconciliation of Net Loss to Net Cash Provided by Operating Activities Depreciation Expense 67,834 63,965 60,695 Impairment Loss on Vessels - - 2,168 Loss on Disposal of Vessels - - 6,619 Equity Loss from Associate - - 7,667 Change in Fair Value of Investment Securities 224 3,160 - Drydock Expenditure (21,045) (4,158) (5,210)Amortization of Deferred Finance Costs 4,354 4,291 15,350 Deferred Compensation Liabilities (71) (10,970) (860)Share-based Compensation 285 156 413 Other, net (739) (66) 21 Changes in Operating Assets and Liabilities Accounts Receivables 18,109 (1,989) (357)Accounts Receivables, Related Party - - 237 Inventory 3,068 (2,184) 2,794 Prepaid Expenses and Other Current Assets (330) (1,068) 1,837 Accounts Payable and Accrued Liabilities (19,258) 10,122 (7,112)Voyages in Progress 8,480 1,951 (5,059)Net Cash Provided by / (Used In) Operating Activities 110,944 52,858 (16,103) Cash Flows from Investing Activities Investment in Vessels (6,845) (2,531) (4,810)Investment in Other Fixed Assets (233) - (60)Investment in Vessels under Construction (11,000) - - Sale of Vessels - - 89,624 Proceeds from Sale of Investment Securities 602 212 - Dividends received from Associate - - 300 Net Cash (Used In) / Provided by Investing Activities (17,476) (2,319) 85,054 Cash Flows from Financing Activities Proceeds from Issuance of Common Stock 20,713 17,922 - Proceeds from Vessel Financing 2018-built Vessels - - 12,505 Proceeds from Borrowing Activities 29,300 300,000 - Repayments on prior $500 million Credit Facility - (313,400) (78,242)Repayment of Vessel financing 2018-built Vessels (7,630) (7,273) (2,361)Repayments on Borrowing Facility (67,896) (14,324) - Transaction Costs Borrowing Facilities (320) (6,921) - Dividends Distributed (67,242) (14,255) (9,936)Net Cash Used In Financing Activities (93,075) (38,251) (78,034)Net Increase / (Decrease) in Cash, Cash Equivalents, and Restricted Cash 393 12,288 (9,083)Cash, Cash Equivalents, and Restricted Cash at Beginning of Year 61,638 49,327 58,359 Effect of Exchange Rate Changes on Cash and Cash Equivalents 39 23 51 Cash, Cash Equivalents, and Restricted Cash at End of Year 62,070 61,638 49,327 Supplemental Disclosure of Cash Flow information Cash and Cash Equivalents 57,847 48,847 49,327 Restricted Cash 4,223 12,791 - Total Cash, Cash equivalents and Restricted Cash Shown in the Statement of Cash Flows 62,070 61,638 49,327 Cash Paid for Taxes 71 79 83 Cash Paid for Interest, Net of Amounts Capitalized 27,128 35,616 32,300 The accompanying notes are an integral part of these consolidated financial statements.F-8Table of ContentsNORDIC AMERICAN TANKERS LIMITEDNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(All amounts in USD ‘000 except where noted)1.NATURE OF BUSINESSNordic American Tankers Limited (“NAT”) was formed on June 12, 1995 under the laws of the Islands of Bermuda. The Company’s shares trade under the symbol “NAT” on the NewYork Stock Exchange. The Company was formed for the purpose of acquiring and chartering out double-hull tankers.The Company is an international tanker company that currently has a fleet of 25 Suezmax tankers (including 2 newbuildings). The Company has in 2020 ordered two newbuildings fordelivery in 2022 from Samsung shipyard in South Korea and not disposed of any vessels. The active fleet of 23 vessels that the Company operated per December 31, 2020 are consideredhomogeneous and interchangeable as they have approximately the same freight capacity and ability to transport the same type of cargo. The vessels are predominantly employed in thespot market, together with one vessel currently on a longer term time charter agreement expiring in late 2021 or later.The Company’s FleetThe Company’s current fleet consists of 25 Suezmax crude oil tankers (including 2 newbuildings) of which the vast majority have been built in Korea.VesselBuilt inDeadweight TonsDelivered to NAT in Nordic Freedom2005159,3312005Nordic Moon2002160,3052006Nordic Apollo2003159,9982006Nordic Cosmos2003159,9992006Nordic Grace2002149,9212009Nordic Mistral2002164,2362009Nordic Passat2002164,2742010Nordic Vega2010163,9402010Nordic Breeze2011158,5972011Nordic Zenith2011158,6452011Nordic Sprinter2005159,0892014Nordic Skier2005159,0892014Nordic Light2010158,4752015Nordic Cross2010158,4752015Nordic Luna2004150,0372016Nordic Castor2004150,2492016Nordic Sirius2000150,1832016Nordic Pollux2003150,1032016Nordic Star2016157,7382016Nordic Space2017157,5822017Nordic Tellus2018157,4072018Nordic Aquarius2018157,3382018Nordic Cygnus2018157,5262018Newbuilding (1)2022156,800-Newbuilding (1)2022156,800-(1)Vessel under construction per December 31, 2020, with expected delivery in 2022F-9Table of Contents2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of Accounting: These consolidated financial statements (“financial statements”) have been prepared in accordance with accounting principles generally accepted in the UnitedStates of America (“U.S. GAAP”).Reclassifications: The Company made certain reclassifications to the prior years' financial statements to conform them to the presentation as of and for the year ended December 31,2020. These reclassifications had no effect on consolidated financial position, net earnings, shareholders' equity, or net cash flows for any of the periods presented.Principles of Consolidation: Entities in which NAT has controlling financial interest are consolidated. Subsidiaries are consolidated from the date on which control is obtained. Thesubsidiaries’ accounting policies are in conformity with U.S. GAAP. All intercompany balances and transactions have been eliminated in the consolidation.Use of Estimates: Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assetsand liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.Actual results could differ from those estimates. The effects of changes in accounting estimates are accounted for in the same period in which the estimates are changed.Foreign Currency Translation: The functional currency of NAT is the United States (“U.S.”) dollar as substantially all revenues are nominated in U.S. dollars and the majority of theexpenditures are incurred and paid in U.S. dollars. Transactions in foreign currencies during the year are translated into U.S. dollars at the rates of exchange in effect at the date of thetransaction. The Company’s subsidiaries NAT Chartering AS, and the European branch of Scandic American Shipping Ltd, have Norwegian kroner as their functional currency. Allassets and liabilities of those entities are translated into U.S. dollars as of each balance sheet date. Translation gains and losses are reflected in shareholders’ equity as part ofaccumulated other comprehensive loss.Revenue and Expense Recognition: Revenues and expenses are recognized on the accruals basis. Revenues are generated from spot and time charters.Spot Charters: For vessels operating on spot charters, voyage revenues are recognized ratably over the estimated length of each voyage, on a load-to-discharge basis and, therefore,are allocated between reporting periods based on the relative transit time in each period. Voyage expenses are capitalized between the discharge port of the immediately previous cargo,or contract date if later, and the load port of the cargo to be chartered if they qualify as fulfillment costs. Incremental cost to obtain a contract is capitalized and amortized ratably over theestimated length of each voyage, calculated on a load-to-discharge basis. The impact of recognizing voyage expenses ratably over the length of each voyage is not materially differenton a quarterly and annual basis from a method of recognizing such costs as incurred. Expected losses that are deemed probable on voyages are provided for in full at the time suchlosses can be estimated. A voyage is deemed to commence upon loading of cargo and is deemed to end upon the completion of discharge of the same cargo. The Company does notcapitalize fulfilment cost or recognize revenue if a charter has not been contractually committed to by a customer.As the Company’s performance obligations are services which are received and consumed by our customers as we perform such services, revenues are recognized over timeproportionate to the days elapsed since the service commencement compared to the total days anticipated to complete the service. Freight is generally billed to the customers after thecargo has been discharged and the performance obligation fulfilled by the Company. The Company is responsible for paying voyage expenses and the charterer is responsible for anydelay at the load and discharge ports. Demurrage earned during a spot charter represents a variable consideration. The Company recognizes such revenues in the voyage estimates onlyto the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Voyage estimates are reviewed and updated over the duration ofthe spot charter contract. When the Company’s tankers are operating on spot charters the vessels are traded fully at the risk and reward of the Company. The Company considers itappropriate to present the gross amount of earned revenue from the spot charter, showing voyage expenses related to the voyage separately in the Statements of Operations.F-10Table of ContentsTime Charters: Under a time charter, the charterer pays for the voyage expenses, such as port, canal and fuel costs, while the Company pays for vessel operating expenses, including,among other costs, crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs and costs relating to a vessel’s intermediate and special surveys.Revenues from time charter contracts where the Company is a lessor are accounted for as fixed rate operating leases under ASC 842 Leases and are recognized daily over the term of thecharter. Time charter agreements with profit-sharing are recognized when the contingency related to it is resolved. The Company has applied the practical expedient to not separate non-lease components from the associated lease component and instead to account for those components as a single component if the non-lease component otherwise would be accountedfor under the new revenue guidance (ASC 606); and both of the following are met: (1) the timing and patterns of transfer of the non-lease component and associated lease are the same;and (2) the lease component, if accounted for separately, would be classified as an operating lease. The pattern of revenue recognition has not changed as a result of implementation ofASC 842 Leases.Vessel Operating Expenses: Vessel operating expenses include crewing, repair and maintenance, insurance, stores, lubricants, management fee, communication expenses and tonnagetax. These expenses are recognized when incurred.Cash, Cash Equivalents and Restricted Cash: Cash, cash equivalents and Restricted Cash consist of highly liquid investments such as time deposits with original maturities whenacquired of three months or less. Amounts included in restricted cash represent those required to be set aside by a contractual agreement with a banking institution for the payment offuture estimated drydocking expenditure related to the vessels used as collateral.Accounts Receivable, Net: Accounts receivable and other receivables are presented net of allowance for doubtful balances. The Company regularly reviews its accounts receivables andestimates the amount of uncollectible receivables each period and provides for an allowance for uncollectable amounts. The assessment of the allowance is based on the age of theunpaid receivables, financial status of the customer and other relevant information.Inventories: Inventories are comprised of bunker fuel and lubrication oil. Cost is determined on a first-in, first-out (“FIFO”) basis.Vessels: Vessels are stated at their historical cost, which consists of the contracted purchase price and any direct expenses incurred upon acquisition (including improvements, on sitesupervision expenses incurred during the construction period, commissions paid, delivery expenses and other expenditures to prepare the vessel for its initial voyage) less accumulateddepreciation. Financing costs incurred during the construction period of the vessels are capitalized and included in vessels’ cost based on the weighted-average method. Certainsubsequent expenditures for conversions and major improvements are capitalized if it is determined that they appreciably extend the life, increase the earning capacity or improve theefficiency or safety of the vessel. Depreciation is calculated based on cost less estimated residual value, and is expensed over the estimated useful life of the related assets using thestraight-line method. The estimated useful life of a vessel is 25 years from the date the vessel is delivered from the shipyard. Estimated useful life of ballast tank improvements is eightyears. Ordinary repairs and maintenance are expensed as incurred.Impairment of Vessels: The Company reviews for impairment long-lived assets held and used whenever events or changes in circumstances indicate that the carrying amount of theassets may not be recoverable. In this respect, the Company reviews its assets for impairment on a vessel by vessel basis. When the estimate of undiscounted cash flows, excludinginterest charges, expected to be generated by the use of the asset is less than its carrying amount, the Company evaluates the asset for impairment loss. The impairment loss isdetermined by the difference between the carrying amount of the asset and fair value (based on broker estimates). In developing estimates of future undiscounted cash flows, theCompany makes assumptions and estimates about the vessels’ future performance, with the significant assumptions being related to charter rates, fleet utilization, operating expenses,capital expenditures/periodical maintenance, residual value and the estimated remaining useful life of each vessel. The assumptions used to develop estimates of future undiscountedcash flows are based on historical trends as well as future expectations. The estimated net operating cash flows are determined by considering an estimated daily time charter equivalentfor the remaining operating days of the vessel, net of brokerage commissions, expected outflows for vessels’ maintenance and vessel operating expenses (including planned drydockingexpenditures). The Company estimates the daily time charter equivalent for the remaining operating days, utilizing available market data for spot market rates for the initial two-yearperiod and the most recent fifteen-year historical company-specific average rates for the remaining estimated life of the vessel. Useful economic life is assumed to be 25 years from thedelivery of the vessel from the shipyard. The salvage value used in the impairment test is estimated to be $8.0 million per vessel. If the Company’s estimate of undiscounted future cashflows for any vessel is lower than the vessel’s carrying value, the carrying value is written down, by recording an impairment charge.F-11Table of ContentsDrydocking: The Company’s vessels are required to be drydocked approximately every 30 to 60 months. The Company capitalizes eligible costs incurred during drydocking andamortizes those costs on a straight-line basis from the completion of a drydocking or intermediate survey to the estimated completion of the next drydocking. Drydocking costs include avariety of costs incurred while vessels are placed within drydock, including expenses related to the dock preparation and port expenses at the drydock shipyard, general shipyardexpenses, expenses related to hull, external surfaces and decks, expenses related to machinery and engines of the vessel, as well as expenses related to the testing and correction offindings related to safety equipment on board. The Company includes in capitalized drydocking those costs incurred as part of the drydock to meet classification and regulatoryrequirements. Expenditures for normal repairs and maintenance performed during drydocking are expensed as incurred. The capitalized and unamortized drydocking costs are included inthe book value of the vessels. Amortization expense of the drydocking costs is included in depreciation expense.Leases: The Company bareboat charters certain vessels under leasing agreements. Sale-leaseback arrangements where the transaction is not considered a sale under ASC 606 areaccounted for as a financing transaction. Consideration received in such sale-leaseback arrangements is recorded as a financial liability. Each lease payment is allocated between liabilityand interest expense to achieve a constant rate on the financial liability outstanding. The interest element is charged as Interest Expense over the lease period. The Company has certainoffice lease contracts resulting in a right-of-use asset and a lease liability and the Company has applied an incremental borrowing rate as the discount rate to calculate the respectiveasset and liability. The Company determines if an arrangement is or contains a lease at contract inception. The Company recognizes a right-of-use (ROU) asset and a lease liability at thelease commencement date. For operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencementdate. Optional periods are not included in the calculation. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for leasepayments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. For operating leases, the right-of-use asset issubsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less theunamortized balance of lease incentives received. Lease expense for lease payments is recognized on a straight-line basis over the lease term.Investments in Equity Method Investees: Investments in other entities where the Company has “significant influence” in accordance with U.S. GAAP are accounted for using the equitymethod of accounting. Under the equity method of accounting, the investment is stated at initial cost and is adjusted for subsequent additional investments and the Company’sproportionate share of earnings or losses and distributions. The Company evaluates its investment in equity method investees for impairment when events or circumstances indicatethat the carrying value of the investment may have experienced an other than temporary decline in value below its carrying value. If the estimated fair value is less than the carryingvalue and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the Statements ofOperations.Investment Securities: Equity securities are recorded at fair value with changes in fair value recognized in net income.F-12Table of ContentsDeferred Compensation Liability: The Company had two individual deferred compensation agreements that were terminated in 2019. The liabilities were accounted for on an accrualbasis using actuarial calculations. Any currency translation adjustments as well as actuarial gains and losses were recognized in general and administrative expenses as incurred. Thetotal expense (gain) related to the deferred compensation agreements recognized in 2019 and 2018 were $(0.2) and million, $(0.7) million, respectively.Segment Information: The Company has identified only one operating segment. The Company has only one type of vessel – Suezmax crude oil tankers. The Company does not providea geographical analysis because the Company’s business is global in nature and the location of its vessels continually changes.Fair Value of Financial Instruments: The fair values of cash, cash equivalents and restricted cash, accounts receivable, accounts payable and accrued liabilities approximate carryingvalue because of the short-term nature of these instruments.Deferred Financing Costs: Financing costs, including fees, commissions and legal expenses are deferred and amortized over the term of the arrangement, which approximates theeffective interest method. Incurred fees related to loans not yet drawn are presented as Other non-current Assets. Unamortized deferred financing costs are deducted from the carryingvalue of the associated financial liability.Share Based Compensation:Restricted sharesThe fair value of restricted shares to employees is estimated based on the market price of the Company’s shares. The fair value of restricted shares granted to employees is measured atgrant date and the Company records the compensation expense for such awards over the requisite service period.Stock optionsThe Company grants stock options as incentive-based compensation to certain employees. The Company measures the cost of such awards using the grant date fair value of the awardand recognizes that cost over the requisite service period.Income Taxes: The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not subject to corporate income taxes. The statutory applicable rate toconsolidated corporate earnings is 0%.Two of the Company’s wholly-owned subsidiaries are located in Norway and are subject to income tax in that jurisdiction at 22%, 22%, and 23% for the years ended December 31, 2020,2019 and 2018, respectively, of their taxable profit. The income tax expensed for year ended December 31, 2020, 2019 and 2018 was $64,000, $71,000 and $79,000, respectively. Deferred taxassets related to these entities are inconsequential. The Company does not have any unrecognized tax benefits, material accrued interests or penalties related to income taxes.Concentration of Credit Risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accountsreceivable. The Company’s cash is primarily held in major banks and financial institutions and typically insured up to a set amount. Accordingly, the Company believes the risk of anypotential loss on deposits held in these institutions is remote. Concentrations of credit risk relative to accounts receivable are limited to our client base in the oil and energy industry thatmay be affected by changes in economic or other external conditions. The Company does not require collateral for its accounts receivable.For the year ended December 31, 2020, one customer accounted for 11.4% of the voyage revenues. For the year ended December 31, 2019, one customer accounted for 13.7% of thevoyage revenues. For the year ended December 31, 2018, no single customer accounted for more than 10% of the voyage revenues.Accounts receivable, Net, as of December 31, 2020, and December 31, 2019 were $6.3 and $24.6 million, respectively. As of December 31, 2020, two charterers accounted for 39% of theoutstanding accounts receivable, with 22% and 17%. As of December 31, 2019, three charterers accounted for 48% of the outstanding accounts receivable, with 19%, 15% and 14%.Accounts Receivable, Net, as of December 31, 2020, and December 31, 2019 are net of a provision for credit losses of $25,000 and $0, respectively.F-13Table of ContentsRecently Adopted Accounting StandardsFinancial Accounting Standards Board ("FASB") ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13" or "Topic 326"). Effective January 1, 2020,the Company adopted ASU 2016-13 using a modified-retrospective approach. The standard changes the way entities recognize impairment of many financial assets by requiringimmediate recognition of estimated credit losses expected to occur over their remaining life. Adoption of the standard did not have a material impact on the Company's consolidatedfinancial statements.Effective January 1, 2019, the Company adopted ASC 842 Leases applying the modified retrospective method. We recognized an initial $1.9 million lease liability and a correspondingright-of-use lease asset to comply with the new lease standard. No cumulative effects have been recorded to the Company’s accumulated deficit. The comparative information has notbeen restated and continues to be reported under the accounting standards in effect for those prior periods (effective date method). The Company has applied the practical expedient fortime-charter out contracts that include both a lease component, consisting of the lease of the vessel, and a non-lease component, consisting of the operation of the vessel for thecustomer, to not separate non-lease components, or service element, from the associated lease component and instead to account for those components as a single component if thenon-lease component otherwise would be accounted for under the new revenue guidance (ASC 606); and both of the following are met: (1) the timing and patterns of transfer of the non-lease component and associated lease are the same; and (2) the lease component, if accounted for separately, would be classified as an operating lease.The right-of-use asset, presented in Other-Non Current Assets, and lease liability is related to leased office space and the reduction in the carrying amount of the right-of-use assetduring the twelve months ended December 31, 2019 has been $0.5 million. Certain of the Company’s lease contracts for office space include optional periods that are not included in theright-of-use asset and lease liability. The discount rate applied to the calculations is an incremental borrowing rate. The lease liability is presented in Other Current Liabilities andOperating Lease Liabilities and the lease cost is recognized in General and Administrative Expenses.ASC 842 allows lessees to elect as an accounting policy not to apply the provisions of ASC 842 to short term leases (i.e., leases with an original term of 12-months or less), which theCompany has applied. Instead, a lessee may recognize the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in whichthe obligation for those payments is incurred.Recent Accounting PronouncementsIn March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (ASC 848) which provides relief for companies preparing for discontinuation of interest rates such as LIBOR. Acontract modification is eligible to apply the optional relief to account for the modifications as a continuation of the existing contracts without additional analysis and considerembedded features to be clearly and closely related to the host contract without reassessment, if all of the following criteria are met: (i) contract references a rate that will bediscontinued; (ii) modified terms directly replace (or have potential to replace) this reference rate; and (iii) changes to any other terms that change (or have potential to change) amountand timing of cash flows must be related to replacement of the reference rate. Relief provided by this ASU is optional and expires December 31, 2022.In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (ASC 848) to refine the scope of ASC 848 and to clarify some of its guidance. The Company has determined thatits primary exposure to LIBOR is in relation to its floating rate borrowing facilities to which it is a party. We expect to take advantage of the expedients and exceptions for applying GAAPprovided by the updates when reference rates currently in use are discontinued and replaced with alternative reference rates.F-14Table of Contents3. VOYAGE REVENUESOur voyage revenues consist of time charter revenues and spot charter revenues with the following split:All figures in USD ‘000 2020 2019 2018 Spot Charter Revenues 274,217 283,007 259,978 Time Charter Revenues 80,402 34,213 29,038 Total Voyage Revenues 354,619 317,220 289,016 The future minimum revenues as at December 31, 2020 related to time charter revenues are as follows:All figures in USD ‘000 Amount 2021 8,395 2022 - 2023 - Total Future Minimum Revenues 8,395 Our voyage contracts have a duration of one year or less and we applied the exemption related to excluding the disclosure of remaining performance obligations.As of December 31, 2020 and December 31, 2019, the Company has capitalized fulfilment cost of $0.4 million and $1.0 million, respectively.4.VESSELSVessels consists of the carrying value of 23 vessels for the year ended December 31, 2020 and December 31, 2019, respectively. Vessels includes capitalized drydocking costs.All figures in USD ‘000 2020 2019 Vessels Cost as of January 1 1,309,618 1,307,087 Additions Vessels 6,845 2,531 Disposals Vessels - - Drydocking Cost as of January 1 59,949 52,331 Additions Drydocking 22,278 7,618 Disposals Drydocking - - Total Cost Vessels and Drydocking 1,398,690 1,369,567 Less Accumulated Depreciation (537,348) (469,570)Less Accumulated Impairment Loss on Vessels - - Net Book Value Vessels as of December 31 861,342 899,997 The Company has taken ten vessels through periodical maintenance surveys in 2020.The Company has in 2020 paid $11.0 million related to the shipbuilding contracts for the two newbuildings to be delivered in 2022 from Samsung shipyard in South Korea. The payment ispresented in the consolidated balance sheets as Vessels under Construction. The remaining commitments under these contracts are $99.0 million in total. 17% of the remaininginstallments are due in 2021 and 83% in 2022. We refer to footnote 9 for further information related to the financing of the newbuildings.F-15Table of ContentsImpairment Loss on VesselsThe Company has not recorded any impairment loss on vessels for the year ended December 31, 2020. The Company recorded an impairment loss of $0.0 million and $2.2 million for theyears ended December 31, 2019 and December 31, 2018, respectively.The Company reviewed its vessels for impairment on an asset by asset basis. In determining whether the assets are recoverable, the Company compared the estimate of theundiscounted cash flows expected to be generated by the assets to its carrying value. As of December 31, 2020, it was determined that the sum of the undiscounted cash flows for eachvessel exceeded its carrying value and no impairment was recorded.In developing estimates of future undiscounted cash flows, we made assumptions and estimates based on historical trends as well as future expectations. The most importantassumption in determining undiscounted cash flows are the estimated charter rates. Charter rates are volatile and the analysis is based on market rates obtained from third parties, incombination with historical achieved rates by the Company.5.INVESTMENT SECURITIESThe Company owned 811,538 shares in Hermitage Offshore Services Ltd. as of December 31, 2019. The carrying value of the investment as of December 31, 2019 was $0.8 million basedon the market share price. The Company has disposed of 811,538 shares for a consideration of $0.6 million in the period ended December 31, 2020, and recognized a loss of $0.2 million inOther Financial Income (Expenses) in 2020.6.RELATED PARTY TRANSACTIONSThe Company has an agreement with a company owned by a Board member for the use of an asset for corporate and marketing activities. The Company has in 2020 paid a fixed annualfee of $0.2 million, operating cost of $0.3 million and fees associated with actual use. In 2020, 2019 and 2018, the Company recognized an expense of $0.1 million, $0.3 million and $0.4million, respectively, for utilization of the asset. No amounts were due to the related party as of December 31, 2020 or December 31, 2019 related to use of the asset.7.OTHER NON-CURRENT ASSETSAll figures in USD ‘000 2020 2019 Fixture, Furniture and Equipment 242 65 Other 1,022 57 Total as of December 31, 1,264 122 8.SHARE-BASED COMPENSATION PLANIn 2011, the Board of Directors decided to establish an incentive plan and the Company has amended its 2011 Equity Incentive Plan (the “Plan”) in 2015 and 2019. As of December 31,2020, the Plan includes awards of 537,665 common shares and 1,000,000 stock options.F-16Table of ContentsCommon Shares AwardThe 537,665 common shares are pursuant to a vesting schedule and the shares are forfeited if the grantee leaves the Company before the shares are vested. The holders of the shares areentitled to voting rights as well as to receive dividends paid during the trade restriction period.All shares under this program have been granted and allocated to Board of Directors, management and employees of the Company in prior periods.As of December 31, 2019, a remaining 92,165 common shares with a weighted average grant date fair value of $14.38 were unvested with a remaining unrecognized cost related tounvested shares of nil. A total of 87,665 common shares vested on January 8, 2020. As of December 31, 2020, there was 4,500 unvested shares remaining that vested in January 2021.The Company held 42,000 common shares from forfeitures as treasury shares as of December 31, 2019. No shares have forfeited in 2020 and the Company held 42,000 treasury shares asof December 31, 2020.The compensation expense is recognized on a straight-line basis over the vesting period and is recorded as part of General and Administrative expenses. The total compensationexpense related to common shares under the plan was $0.1 million, $0.1 million, and $0.4 million for the years ended December 31, 2020, December 31, 2019 and December 31, 2018,respectively.Stock Option AwardThe Board of Directors approved an additional 1,000,000 stock options for issuance in 2019.In 2019, the Company granted 755,000 and 234,000 options with vesting over a period of two and three years, respectively, with an exercise price of $4.70 per share. The stock optionswere allocated amongst management and employees of the Company. No further stock options have been granted in 2020.The Company used the Black-Scholes option pricing model to measure the grant date fair value of the options with the following assumptions applied to the model; Options with twoyear vestingOptions withthree year vestingVolatility57.5%52.5%Dividend yield10.0%10.0%Risk-free interest rate1.64%1.65%Weighted-average grant date fair value$0.59$0.58The expected volatility was based on historical volatility observed from historical company-specific data during the two years prior to the grant date.The compensation expense related to the stock option awards was $0.3 million and $0.1 million for the years ended December 31, 2020 and December 31, 2019, respectively, and theremaining unrecognized cost as of December 31, 2020 related to non-vested stock options was $0.2 million with a remaining average remaining vesting period of 1.1 years. No forfeitureshave occurred and no stock options were exercisable as of December 31, 2020.9.LONG-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBTThe Company has two lenders financing its active fleet of Suezmax tankers; (1) the 2019 Senior Secured Credit Facility, including the $30 million Accordion Loan, secured by the twentyvessels built from year 2000 to year 2016, and (2) the Financing of 2018-built vessels that is related to the three vessels built in 2018.F-17Table of Contents2019 Senior Secured Credit Facility and $30 million Accordion Loan:On February 12, 2019 the Company entered into a new five-year senior secured credit facility for $306.1 million (the “2019 Senior Secured Credit Facility”). Borrowings under the 2019Senior Secured Credit Facility are secured by first priority mortgages over the vessels (excluding the three vessels delivered in 2018, see description below) and assignments of earningsand insurance. The loan is amortizing with a twenty-year maturity profile, carries a floating LIBOR interest rate plus a margin and matures in February 2024. Further, the agreementcontains a discretionary excess cash mechanism for the lender that equals 50% of the net earnings from the collateral vessels, less capex provision and fixed loan amortization. TheCompany has incurred $13.0 million (including a non-cash portion of $6.1 million) in financing costs, which is amortized over the term of the loan and the outstanding loan balance waspresented net of the costs. The agreement contains covenants that require a minimum liquidity of $30.0 million and a loan-to-vessel value ratio of maximum 70%.As of December 31, 2019, the Company had $291.8 million drawn under its 2019 Senior Secured Credit Facility, where $16.1 million, net of deferred financing cost of $2.6 million, waspresented as Current Portion of Long-Term Debt. This included $3.4 million related to the excess cash flow mechanism payment related to earnings generated in the fourth quarter of 2019and payable in the first quarter of 2020.On December 16, 2020, the Company entered into a new loan agreement for the borrowing of $30.0 million (the “$30 million Accordion Loan”). The loan is considered an accordion loanto the 2019 Senior Secured Credit Facility loan agreement and has the same amortization profile, carries a floating LIBOR interest rate plus a margin and matures in February 2024. Thesecurity of the loan is attached to the security of the 2019 Senior Secured Credit Facility and has equal priority, the same financial covenants and the same excess cash flow mechanismas the 2019 Senior Secured Credit Facility.The Company has repaid $67.9 million of the facility in the twelve months ended December 31, 2020. As of December 31, 2020, the total outstanding balance was $253.9 million. TheCompany has presented $14.4 million, net of deferred financing cost of $2.4 million, under Current Portion of Long-Term Debt. Earnings generated in the fourth quarter of 2020 did notresult in any additional payment related to the excess cash flow mechanism.Subsequent to December 31, 2020, the Company has repaid in total $4.2 million and the total outstanding balances as of April 29, 2021 is $249.7 million.The estimated fair value for the long-term debt is considered to be approximately equal to the carrying value since it carries a variable interest rate.Financing of 2018-built VesselsThe three vessels were delivered in July, August and October 2018, respectively. Under the terms of the financing agreement, the lender has provided financing of 77.5% of the purchaseprice for each of the three 2018-built vessels. Upon delivery of each of the vessels, the Company entered into ten-year bareboat charter agreements. The Company has obligations topurchase each vessel for $13.6 million upon the completion of the ten-year bareboat charter agreements, and also has the option to purchase the vessels after sixty and eighty-fourmonths. The financing agreements for the three vessels have a total effective interest rate ranging from 4.86% to 5.06% including a floating LIBOR element that is subject to annualadjustment. The Company has incurred $2.3 million in financing cost, which is amortized over the term of the financing arrangement and presented net of the outstanding loan balance.The financing agreement contains certain financial covenants requiring us on a consolidated basis to maintain a minimum value adjusted equity of $175.0 million and ratio of 25%,minimum liquidity of $20.0 million; and a minimum vessel value to outstanding lease clause.F-18Table of ContentsThe outstanding amounts under this financing arrangement were $112.2 million and $119.9 million as of December 31, 2020 and 2019, respectively, where $7.7 and $7.4 million, net ofdeferred financing costs, have been presented as Current Portion of Long-Term Debt, respectively.As of December 31, 2020 the aggregate annual principal payments required to be made under the Company’s outstanding debt facilities are as follows:Debt repayments in $'000s Total 2021 2022 2023 2024 2025 Morethan 5years 2019 Senior Secured CreditFacility including the $30mill Accordion Loan 253,902 16,805 16,805 16,805 203,487 - - Financing of 2018-builtVessels 112,238 7,960 8,327 8,711 9,138 9,535 68,567 Total 366,140 24,765 25,132 25,516 212,625 9,535 68,567 The Company has ordered two Suezmax newbuildings at Samsung shipyard in South Korea for delivery in 2022. The Company has secured up to 80% financing of the newbuilding pricefor these two vessels at similar terms as for the 2018-built vessels with the same lender. No debt is incurred under these financing arrangements as of December 31, 2020, and the tableabove does not include figures related to the financing of the newbuildings.The Company monitors compliance with the financial covenants on a regular basis and as at December 31, 2020, the Company was in compliance with the financial covenants in the debtfacilities. The Company believes that the current cash and cash equivalents and cash expected to be generated from operations, together with the availability of the $60 million ATM, aresufficient to meet the working capital needs and other liquidity requirements for the next 12 months from the date of this report.10.INTEREST EXPENSESInterest expenses consist of interest expense on the long-term debt and amortization of deferred financing costs related to the facilities described in Note 9.All figures in USD ‘000 2020 2019 2018 Interest Expenses, net of capitalized interest 27,127 34,018 29,753 Commitment Fee - - 3,325 Amortization of Deferred Financing Costs 4,354 4,372 1,470 Other financial costs - - 1 Total Interest Expenses 31,481 38,390 34,549 For the years ended December 31, 2020, 2019 and 2018, $0.1 million, $0.0 million and $2.6 million of interest expenses were capitalized, respectively.F-19Table of Contents11. OTHER CURRENT LIABILITIESAll figures in USD ‘000 2020 2019 Accrued Interest - 163 Accrued Expenses 5,689 8,225 Other Liabilities 2,403 1,190 Settlement Deferred Compensation Liabilities - 3,830 Deferred Revenues 140 2,154 Total as of December 31, 8,232 15,562 12.EARNINGS (LOSS) PER SHAREBasic earnings per share (“EPS”) are computed by dividing net income (loss) by the weighted-average number of common shares outstanding for the period. Diluted EPS is computed bydividing net income by the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period.All figures in USD except number of shares and earnings (loss) per common share 2020 2019 2018 Numerator: Net Income (Loss) 50,033 (10,352) (95,306)Denominator: Basic - Weighted Average Common Shares Outstanding 149,292,586 142,571,361 141,969,666 Dilutive – Weighted Average Common Shares Outstanding 149,292,586 142,571,361 141,969,666 Earnings (Loss) per Common Share: Basic 0.34 (0.07) (0.67)Diluted 0.34 (0.07) (0.67)Potentially dilutive equity instruments include unexercised stock options described in note 8 and additional dilution could result from the use of the ATM offering as further described innote 13.13.SHAREHOLDERS’ EQUITYAuthorized, issued and outstanding common shares roll-forward is as follows: AuthorizedShares Issued andOutstandingShares Common Stock Balance as of January 1, 2018 180,000,000 141,969,666 1,420 Authorization of additional authorized shares 180,000,000 - - Balance as of December 31, 2018 360,000,000 141,969,666 1,420 $40 million ATM - 5,260,968 52 Balance as of December 31, 2019 360,000,000 147,230,634 1,472 $40 million ATM - 4,215,478 42 Balance as of December 31, 2020 360,000,000 151,446,112 1,514 F-20Table of ContentsIn December 2018, the Annual General Meeting of the Company approved to increase the Company’s authorized share capital from $1.8 million to $3.6 million.On March 29, 2019, the Company entered into an equity distribution agreement with B. Riley FBR, Inc., acting as a sales agent, under which we may, from time to time, offer and sellshares of our common stock through an At-the-Market Offering (the “$40 million ATM”) program having an aggregate offering price of up to $40,000,000. As of December 31, 2020, theCompany has raised gross and net proceeds (after deducting sales commissions and other fees and expenses) of $40.0 million and $38.6 million, respectively, by issuing and selling9,476,446 common shares. Through the $40 million ATM, the Company has issued 5,260,968 shares and raised net proceeds of $17.9 million in 2019, and has issued 4,215,478 shares andraised net proceeds of $20.7 million in 2020.On October 16, 2020, the Company entered into a new equity distribution agreement with B. Riley FBR, Inc., acting as a sales agent, under which we may, from time to time, offer and sellshares of our common stock through an At-the-Market Offering (the “$60 million ATM”) program having an aggregate offering price of up to $60,000,000. As of December 31, 2020, theCompany has not raised any proceeds under the $60 million ATM. Subsequent to December 31, 2020, through to April 22, 2021, the Company has raised $10.0 million and $9.7 million ingross and net proceeds, respectively by issuing 2,989,769 common shares. The remaining available proceeds through the $60 million ATM offering is $50.0 million as of April 22, 2021.Based on the share price of the Company of $3.15 per share as of April 22, 2021, it would have resulted in 15,880,072 new shares being issued, if fully utilizing the remaining balanceavailable through the $60 million ATM.Additional Paid-in CapitalIncluded in Additional Paid-in Capital is the Company’s Share Premium Fund as defined by Bermuda law. The Share Premium Fund cannot be distributed without complying with certainlegal procedures designed to protect the creditors of the Company, including public notice to its creditors and a subsequent period for creditor notice of concern, regarding theCompany’s intention, following shareholder approval, to transfer such funds to the Company’s Contributed Surplus Account and thereby make such funds available for distribution.On November 20, 2019, at the Company’s Annual General Meeting, the shareholders voted to reduce the Share Premium Fund by the amount of about $103.4 million. The reduction inshare premium did not result in a distribution to shareholders but rather, the surplus resulting from such reduction was credited to the Company's contributed surplus account. The legalprocedures related to this reduction were finalized in December 2019 upon which the amount became eligible for distribution.The Share Premium Fund was $38.5 million and $17.9 million as of December 31, 2020 and 2019, respectively. Credits and charges to Additional Paid in Capital were a result of theaccounting for the Company’s share based compensation programs and issuance of shares.Contributed Surplus AccountThe Company’s Contributed Surplus Account as defined by Bermuda law, consists of amounts previously recorded as share premium, transferred to Contributed Surplus Account whenresolutions are adopted by the Company’s shareholders to make Share Premium Fund distributable or available for other purposes. As indicated by the laws governing the Company, theContributed Surplus Account can be used for dividend distribution and to cover accumulated losses from its operations.The Company’s Board of Directors determined in 2019 to transfer $308.8 million from the Contributed Surplus Account to cover Accumulated Deficits incurred as of December 31, 2018.We refer to the information above related to the reduction of $103.4 million of the Share Premium Fund that was credited to the Company’s Contributed Surplus Account.F-21Table of ContentsFor the year ended December 31, 2020, the Company paid a dividend of $67.2 million that was charged with $27.7 million to the Contributed Surplus Account and the remaining portionwas considered as Retained Earnings. In 2019, the Company paid a dividend of $14.3 million that was charged to the Contributed Surplus Account. The Company’s Contributed Surplusaccount was $539.5 million and $567.2 million per December 31, 2020 and 2019, respectively.Shareholders’ Rights PlanOn June 16, 2017, the Board of Directors adopted a new shareholders’ rights agreement and declared a dividend of one preferred share purchase right to purchase one one-thousandth ofa Series A Participating Preferred Share of the Company for each outstanding common share, par value $0.01 per share. The dividend was payable on June 26, 2017 to shareholders ofrecord on that date. Each right entitles the registered holder to purchase from us one one-thousandth of a Series A Participating Preferred Share of the Company at an exercise price of$30.00, subject to adjustment. The Company can redeem the rights at any time prior to a public announcement that a person or group has acquired ownership of 15% or more of theCompany’s common shares. As at December 31, 2020, no shares were issued pursuant to the plan.This shareholders’ rights plan was designed to enable us to protect shareholder interests in the event that an unsolicited attempt is made for a business combination with, or a takeoverof, the Company. Our shareholders’ rights plan is not intended to deter offers that the Board determines are in the best interests of our shareholders.14.COMMITMENTS AND CONTINGENCIESThe Company may become a party to various legal proceedings generally incidental to its business and is subject to a variety of environmental and pollution control laws andregulations. As is the case with other companies in similar industries, the Company faces exposure from actual or potential claims and legal proceedings. Although the ultimatedisposition of legal proceedings cannot be predicted with certainty, it is the opinion of the Company’s management that the outcome of any claim which might be pending or threatened,either individually or on a combined basis, will not have a materially adverse effect on the financial position of the Company, but could materially affect the Company’s results ofoperations in a given year.No material claims have been filed against the Company for the fiscal years ended December 31, 2020 and 2019.The Company’s newbuilding program consists of two Suezmax newbuildings for delivery in 2022 ordered from Samsung shipyard in South Korea. We refer to footnote 4 and footnote 9for information related the remaining commitments and financing.15.FINANCIAL INSTRUMENTS AND OTHER FAIR VALUE DISCLOSURESThe majority of NAT and its subsidiaries’ transactions, assets and liabilities are denominated in United States dollars, the functional currency of the Company. There is no significant riskthat currency fluctuations will have a material negative effect on the value of the Company’s cash flows.The Company categorizes its fair value estimates using a fair value hierarchy based on the inputs used to measure fair value for those assets that are recorded on the Balance Sheet atfair value. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value as follows:F-22Table of ContentsLevel 1.Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.Level 2.Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; andLevel 3.Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.The following methods and assumptions were used to estimate the fair value of each class of financial instruments and other financial assets.-The carrying value of cash and cash equivalents and marketable securities, is a reasonable estimate of fair value.-The estimated fair value for the long-term debt is considered to be equal to the carrying values since it bears spreads and variable interest rates which approximate marketrates.The carrying value and estimated fair value of the Company`s financial instruments at December 31, 2020 and 2019, are as follows:All figures in USD ‘000Recurring: Fair ValueHierarchyLevel 2020FairValue 2020CarryingValue 2019FairValue 2019CarryingValue Cash and Cash Equivalents 1 57,847 57,847 48,847 48,847 Restricted Cash 1 4,223 4,223 12,791 12,791 Investment Securities 1 - - 825 825 2019 Senior Secured Credit Facility including $30 million Accordion Loan 2 (253,902) (253,902) (291,798) (291,798)Financing of 2018-built Vessels 2 (112,238) (112,238) (119,867) (119,867)16.SUBSEQUENT EVENTSOn February 26, 2021, the Company declared a cash dividend of $0.02 per share in respect of the results for the fourth quarter of 2020. The dividend of $3.0 million was paid on March 30,2021.F-24Exhibit 4.13EXECUTION COPYNORDIC AMERICAN TANKERS LIMITED Common Shares(par value $0.01 per share)At Market Issuance Sales Agreement October 16, 2020 B. Riley Securities, Inc.299 Park Avenue, 21st FloorNew York, NY 10171 Ladies and Gentlemen: Nordic American Tankers Limited, an exempted company formed under the laws of Bermuda (the “Company”), confirms its agreement (this “Agreement”) with B. RileySecurities, Inc. (the “Agent”) as follows: 1. Issuance and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein,it may issue and sell through or to the Agent, as sales agent or principal, shares (the “Placement Shares”); of the Company’s common shares, par value $0.01 per share (the “CommonShares”); provided however, that in no event shall the Company issue or sell through the Agent such number of Placement Shares that (a) exceeds the number of shares or dollaramount of Common Shares registered on the effective Registration Statement (as defined below) pursuant to which the offering is being made or (b) exceeds the number of shares ordollar amount registered on the Prospectus Supplement (as defined below) (the lesser of (a) or (b) the “Maximum Amount”). Notwithstanding anything to the contrary contained herein,the parties hereto agree that compliance with the limitations set forth in this Section 1 on the number of Placement Shares issued and sold under this Agreement shall be the soleresponsibility of the Company and that the Agent shall have no obligation in connection with such compliance. The issuance and sale of Placement Shares through the Agent will beeffected pursuant to the Registration Statement (as defined below), although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statementto issue any Placement Shares. The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended and the rules and regulations thereunder (the “Securities Act”), with theSecurities and Exchange Commission (the “Commission”), a registration statement on Form F-3 (File No. 333-228603), including a base prospectus, relating certain securities including thePlacement Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with theprovisions of the Securities Exchange Act of 1934, as amended and the rules and regulations thereunder (the “Exchange Act”). The Company has prepared one or more prospectussupplements to the base prospectus included as part of such registration statement specifically relating to the Placement Shares (the “Prospectus Supplement”). The Company willfurnish to the Agent, for use by the Agent, copies of the base prospectus included as part of such registration statement, as supplemented by the Prospectus Supplement, relating to thePlacement Shares. Except where the context otherwise requires, such registration statement, and any post-effective amendment thereto, including all documents filed as part thereof orincorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under theSecurities Act or deemed to be a part of such registration statement pursuant to Rule 430B of the Securities Act, or any subsequent registration statement on Form F-3 filed pursuant toRule 415(a)(6) under the Securities Act by the Company to cover any Placement Shares or any subsequent registration statement on Form F-3 filed pursuant to 462(b) under theSecurities Act, is herein called the “Registration Statement.” The base prospectus, including all documents incorporated or deemed incorporated therein by reference to the extent suchinformation has not been superseded or modified in accordance with Rule 412 under the Securities Act (as qualified by Rule 430B(g) of the Securities Act), included in the RegistrationStatement, as it may be supplemented by the Prospectus Supplement, in the form in which such base prospectus and/or Prospectus Supplement have most recently been filed by theCompany with the Commission pursuant to Rule 424(b) under the Securities Act is herein called the “Prospectus.” Any reference herein to the Registration Statement, the Prospectus orany amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,”“amendment” or “supplement” with respect to the Registration Statement or the Prospectus shall be deemed to refer to and include the filing after the execution hereof of any documentwith the Commission incorporated by reference therein (the “Incorporated Documents”).For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include the mostrecent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System, or if applicable, the Interactive Data Electronic Application system whenused by the Commission (collectively, “EDGAR”). 2. Placements. Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will notify the Agent by electronic mail (or othermethod mutually agreed to in writing by the parties) of the number of Placement Shares, the time period during which sales are requested to be made, any limitation on the number ofPlacement Shares that may be sold in any one day and any minimum price below which sales may not be made (a “Placement Notice”), the form of which is attached hereto as Schedule1. The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to each of the other individuals from the Company listed onsuch schedule), and shall be addressed to each of the individuals from the Agent set forth on Schedule 3, as such Schedule 3 may be amended from time to time. The Placement Noticeshall be effective immediately upon receipt by the Agent unless and until (i) the Agent declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entireamount of the Placement Shares thereunder has been sold, (iii) the Company suspends or terminates the Placement Notice, which suspension and termination rights may be exercised bythe Company in its sole discretion, or (iv) this Agreement has been terminated under the provisions of Section 13. The amount of any discount, commission or other compensation to bepaid by the Company to the Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 2. It is expresslyacknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until theCompany delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specifiedtherein and herein. In the event of a conflict between the terms of Sections 2 or 3 of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control.23. Sale of Placement Shares by the Agent. Subject to the terms and conditions of this Agreement, for the period specified in a Placement Notice, the Agent will use itscommercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the New York StockExchange (the “Exchange”), to sell the Placement Shares up to the amount specified in, and otherwise in accordance with the terms of, such Placement Notice. The Agent will providewritten confirmation to the Company no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of PlacementShares hereunder setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to the Agent pursuant to Section 2 with respect to suchsales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the Agent (as set forth in Section 5(b)) from the gross proceedsthat it receives from such sales. Subject to the terms of a Placement Notice, the Agent may sell Placement Shares by any method permitted by law deemed to be an “at the marketoffering” as defined in Rule 415 of the Securities Act. “Trading Day” means any day on which shares of Common Shares are purchased and sold on the Exchange. 4. Suspension of Sales. The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of theother party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or bytelephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend any sale ofPlacement Shares (a “Suspension”); provided, however, that such suspension shall not affect or impair any party’s obligations with respect to any Placement Shares sold hereunderprior to the receipt of such notice. While a Suspension is in effect, any obligation under Sections 7(l), 7(m), and 7(n) with respect to the delivery of certificates, opinions, or comfortletters to the Agent, shall be waived. Each of the parties agrees that no such notice under this Section 4 shall be effective against any other party unless it is made to one of theindividuals named on Schedule 3 hereto, as such Schedule may be amended from time to time. 5. Sale and Delivery to the Agent; Settlement. a. Sale of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, uponthe Agent’s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated inaccordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal tradingand sales practices and applicable state and federal laws, rules and regulations and the rules of the Exchange to sell such Placement Shares up to the amount specified in, and otherwisein accordance with the terms of, such Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling PlacementShares, (ii) the Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by the Agentto use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the Exchangeto sell such Placement Shares as required under this Agreement and (iii) the Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to thisAgreement, except as otherwise agreed by the Agent and the Company.3b. Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on thesecond (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The Agentshall notify the Company of each sale of Placement Shares no later than opening day following the Trading Day that the Agent sold Placement Shares. The amount of proceeds to bedelivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price received by the Agent, afterdeduction for (i) the Agent’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed byany governmental or self-regulatory organization in respect of such sales. c. Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the PlacementShares being sold by crediting the Agent’s or its designee’s account (provided the Agent shall have given the Company written notice of such designee and such designee’s accountinformation at least one Trading Day prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means ofdelivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each SettlementDate, the Agent will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if theCompany, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date through no fault of the Agent, then in addition to and in no waylimiting the rights and obligations set forth in Section 11(a) hereto, it will (i) hold the Agent harmless against any loss, claim, damage, or reasonable, documented expense (includingreasonable and documented legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to theAgent (without duplication) any commission, discount, or other compensation to which it would otherwise have been entitled absent such default. d. Limitations on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to thesale of such Placement Shares, the aggregate number of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Placement Sharesunder this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement and (C) the amount authorized from time totime to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to theAgent in writing. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than the minimumprice authorized from time to time by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent inwriting.46. Representations and Warranties of the Company. Except as disclosed in the Registration Statement or Prospectus (including the Incorporated Documents), theCompany represents and warrants to, and agrees with the Agent that as of the date of this Agreement and as of each Applicable Time (as defined below), unless such representation,warranty or agreement specifies a different date or time: a. Registration Statement and Prospectus. The transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the useof Form F-3 under the Securities Act. The Company is a “foreign private issuer” as such term is defined in Rule 3b-4 under the Exchange Act. The Registration Statement has been filedwith the Commission and has been declared effective under the Securities Act. The Prospectus Supplement will name the Agent as the agent in the section entitled “Plan ofDistribution.” The Company has not received, and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening orinstituting proceedings for that purpose. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the requirements of Rule 415 under theSecurities Act and comply in all material respects with said Rule. Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statementor the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed, as applicable. Copies of the Registration Statement, the Prospectus, and anysuch amendments or supplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered,or are available through EDGAR, to the Agent and its counsel. The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of thedistribution of the Placement Shares, will not distribute any offering material in connection with the offering or sale of the Placement Shares other than the Registration Statement and theProspectus and any Issuer Free Writing Prospectus (as defined below) to which the Agent has consented, which consent will not be unreasonably withheld or delayed, or that isrequired by applicable law or the listing maintenance requirements of the Exchange. The Common Shares are currently quoted on the Exchange under the trading symbol “NAT.” TheCompany has not, in the 12 months preceding the date hereof, received notice from the Exchange to the effect that the Company is not in compliance with the listing or maintenancerequirements of the Exchange. To the Company’s knowledge, it is in compliance with all such listing and maintenance requirements. b. No Misstatement or Omission. At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material respectswith the requirements of the Securities Act. The Registration Statement, when it became or becomes effective, did not, and will not, contain an untrue statement of a material fact or omitto state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendment and supplement thereto, on the datethereof and at each Applicable Time (defined below), did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statementstherein, in light of the circumstances under which they were made, not misleading. The documents incorporated by reference in the Prospectus or any Prospectus Supplement did not,and any further documents filed and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a materialfact required to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading. Theforegoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by the Agentspecifically for use in the preparation thereof.5c. Conformity with Securities Act and Exchange Act. The Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment orsupplement thereto, and the Incorporated Documents, when such documents were or are filed with the Commission under the Securities Act or the Exchange Act or became or becomeeffective under the Securities Act, as the case may be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable. d. Financial Information. The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement and theProspectus, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and the Subsidiaries (as definedbelow) as of the dates indicated and the consolidated results of operations, cash flows and changes in stockholders’ equity of the Company and the Subsidiaries for the periodsspecified (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate) and have been prepared incompliance with the published requirements of the Securities Act and Exchange Act, as applicable, and in conformity with generally accepted accounting principles in the United States(“GAAP”) applied on a consistent basis (except (i) for such adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements,to the extent they may exclude footnotes or may be condensed or summary statements) during the periods involved; the other financial and statistical data with respect to the Companyand the Subsidiaries contained or incorporated by reference in the Registration Statement and the Prospectus, are accurately and fairly presented and prepared on a basis consistentwith the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated byreference in the Registration Statement, or the Prospectus that are not included or incorporated by reference as required; the Company and the Subsidiaries do not have any materialliabilities or obligations, direct or contingent (including any off balance sheet obligations), not described in the Registration Statement, and the Prospectus which are required to bedescribed in the Registration Statement or Prospectus; and all disclosures contained or incorporated by reference in the Registration Statement and the Prospectus, if any, regarding“non--GAAP financial measures” (as such term is defined by the rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item10 of Regulation S-K under the Securities Act, to the extent applicable. e. Conformity with EDGAR Filing. The Prospectus delivered to the Agent for use in connection with the sale of the Placement Shares pursuant to this Agreementwill be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T.6f. Organization. The Company and any subsidiary that is a significant subsidiary (as such term is defined in Rule 1-02 of Regulation S-X promulgated by theCommission) (each, a “Subsidiary,” collectively, the “Subsidiaries”), are, and will be, duly incorporated, validly existing as a company and in good standing under the laws of theirjurisdiction of incorporation. The Company and the Subsidiaries are duly licensed or qualified as a foreign corporation for transaction of business and in good standing under the lawsof each other jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such license or qualification, and have allcorporate power and authority necessary to own or hold their respective properties and to conduct their respective businesses as described in the Registration Statement and theProspectus, except where the failure to be so qualified or in good standing or have such power or authority would not, individually or in the aggregate, have a material adverse effect onthe assets, business, operations, earnings, properties, condition (financial or otherwise), prospects, stockholders’ equity or results of operations of the Company and the Subsidiariestaken as a whole, or prevent the consummation of the transactions contemplated hereby (a “Material Adverse Effect”). g. Subsidiaries. As of the date hereof, the Company’s only Subsidiaries are set forth on Schedule 6(g). The Company owns directly or indirectly, all of the equityinterests of the Subsidiaries free and clear of any lien, charge, security interest, encumbrance, right of first refusal or other restriction, and all the equity interests of the Subsidiaries arevalidly issued and are fully paid, nonassessable and free of preemptive and similar rights. h. No Violation or Default. Neither the Company nor any Subsidiary is (i) in violation of its charter or bye-laws or similar organizational documents; (ii) in default,and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition containedin any indenture, mortgage, deed of trust, loan agreement or other similar agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or anySubsidiary is bound or to which any of the property or assets of the Company or any Subsidiary is subject; or (iii) in violation of any law or statute or any judgment, order, rule orregulation of any court or arbitrator or governmental or regulatory authority, except, in the case of each of clauses (ii) and (iii) above, for any such violation or default that would not,individually or in the aggregate, have a Material Adverse Effect. To the Company’s knowledge, no other party under any material contract or other agreement to which it or anySubsidiary is a party is in default in any respect thereunder where such default would have a Material Adverse Effect. i. No Material Adverse Effect. Since the date of the most recent financial statements of the Company included or incorporated by reference in the RegistrationStatement and Prospectus, there has not been (i) any Material Adverse Effect, or any development that would result in a Material Adverse Effect, (ii) any transaction which is material tothe Company and the Subsidiaries taken as a whole, (iii) any obligation or liability, direct or contingent (including any off-balance sheet obligations), incurred by the Company or theSubsidiaries, which is material to the Company and the Subsidiaries taken as a whole, (iv) any material change in the share capital (other than (A) the grant of additional options underthe Company’s existing share option plans, (B) changes in the number of outstanding Common Shares of the Company due to the issuance of shares upon the exercise or conversion ofsecurities exercisable for, or convertible into, Common Shares outstanding on the date hereof, (C) as a result of the issuance of Placement Shares, (D) any repurchases of share capital ofthe Company, (E) as described in a proxy statement or information statement filed on Form 6-K, or a Registration Statement on Form S-4, or (F) otherwise publicly announced) oroutstanding long-term indebtedness of the Company or the Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the share capital of the Company orany Subsidiary, other than in each case above in the ordinary course of business or as otherwise disclosed in the Registration Statement or Prospectus (including any documentincorporated by reference therein).7j. Capitalization. The issued and outstanding shares of the Company have been validly issued, are fully paid and non-assessable and, other than as disclosed inthe Registration Statement or the Prospectus, are not subject to any preemptive rights, rights of first refusal or similar rights. The Company has an authorized, issued and outstandingshare capital as set forth in the Registration Statement and the Prospectus as of the dates referred to therein (other than (i) the grant of additional options under the Company’s existingshare option plans, (ii) changes in the number of outstanding Common Shares of the Company due to the issuance of shares upon the exercise or conversion of securities exercisable for,or convertible into, Common Shares outstanding on the date hereof, (iii) as a result of the issuance of Placement Shares, or (iv) any repurchases of share capital of the Company) andsuch authorized share capital conforms to the description thereof set forth in the Registration Statement and the Prospectus. The description of the Common Shares in the RegistrationStatement and the Prospectus is complete and accurate in all material respects. Except as disclosed in or contemplated by the Registration Statement or the Prospectus, the Company didnot have outstanding any options to purchase, or any rights or warrants to subscribe for, or any securities or obligations convertible into, or exchangeable for, or any contracts orcommitments to issue or sell, any shares or other securities. k. F-3 Eligibility. (i) At the time of filing the Registration Statement and (ii) at the time of the most recent amendment thereto for the purposes of complying withSection 10(a)(3) of the Securities Act (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or formof prospectus), the Company met the then applicable requirements for use of Form F-3 under the Securities Act, including compliance with General Instruction I.B.1 of Form F-3, asapplicable. l. Authorization; Enforceability. The Company has full legal right, power and authority to enter into this Agreement and perform the transactions contemplatedhereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding agreement of the Company enforceable against the Companyin accordance with its terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rightsgenerally and by general equitable principles and (ii) the indemnification and contribution provisions of Section 11 hereof may be limited by federal or state securities laws and publicpolicy considerations in respect thereof. m. Authorization of Placement Shares. The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors of theCompany or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, will be duly and validly authorized and issuedand fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim (other than any pledge, lien, encumbrance, security interest or otherclaim arising from an act or omission of the Agent or a purchaser), including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, andwill be registered pursuant to Section 12 of the Exchange Act. The Placement Shares, when issued, will conform in all material respects to the description thereof set forth in orincorporated into the Prospectus.8n. No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or any governmental orregulatory authority is required for the execution, delivery and performance by the Company of this Agreement, and the issuance and sale by the Company of the Placement Shares ascontemplated hereby, except for such consents, approvals, authorizations, orders and registrations or qualifications (i) as may be required under applicable state securities laws or by theby-laws and rules of the Financial Industry Regulatory Authority (“FINRA”) or the Exchange, including any notices that may be required by the Exchange, in connection with the sale ofthe Placement Shares by the Agent, (ii) as may be required under the Securities Act and (iii) as have been previously obtained by the Company. o. No Preferential Rights. (i) No person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a “Person”), has theright, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Shares or other shares or other securities of the Company (other than upon theexercise of options or warrants to purchase Common Shares or upon the exercise of options that may be granted from time to time under the Company’s share option plan), (ii) no Personhas any preemptive rights, rights of first refusal, or any other rights (except pursuant to Shareholder Rights Agreement dated as of June 16, 2017 by and between the Company andComputershare Trust Company, N.A.) to purchase any Common Shares or other shares or other securities of the Company from the Company which have not been duly waived withrespect to the offering contemplated hereby, (iii) no Person has the right to act as an underwriter or as a financial advisor to the Company in connection with the offer and sale of theCommon Shares, and (iv) no Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any Common Shares or other shares or othersecurities of the Company, or to include any such shares or other securities in the Registration Statement or the offering contemplated thereby, whether as a result of the filing oreffectiveness of the Registration Statement or the sale of the Placement Shares as contemplated thereby or otherwise, except in each case for such rights as have been waived on or priorto the date hereof. p. Independent Public Accountant. KPMG AS (the “Accountant”), whose report on the consolidated financial statements of the Company is filed with theCommission as part of the Company’s most recent Annual Report on Form 20-F filed with the Commission and incorporated into the Registration Statement, are and, during the periodscovered by their report, were independent public accountants within the meaning of the Securities Act and the Public Company Accounting Oversight Board (United States). To theCompany’s knowledge, the Accountant is not in violation of the auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect to theCompany.9q. Enforceability of Agreements. All agreements between the Company and third parties expressly referenced in the Prospectus, other than such agreements thathave expired by their terms or whose termination is disclosed in documents filed by the Company on EDGAR, are legal, valid and binding obligations of the Company and, to theCompany’s knowledge, enforceable in accordance with their respective terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization,moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification provisions of certain agreements may be limited by federalor state securities laws or public policy considerations in respect thereof, and except for any unenforceability that, individually or in the aggregate, would not have a Material AdverseEffect. r. No Litigation. There are no legal or governmental proceedings pending or threatened to which the Company or any Subsidiary is a party or to which any of theproperties of the Company or any Subsidiary is subject (i) other than proceedings accurately described in all material respects in the Prospectus and proceedings that would not have aMaterial Adverse Effect on the Company and its subsidiaries, taken as a whole, or on the power or ability of the Company to perform its obligations under this Agreement or toconsummate the transactions contemplated by the Prospectus or (ii) that are required to be described in the Registration Statement or the Prospectus and are not so described; andthere are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to theRegistration Statement that are not described or filed as required. s. Licenses and Permits. The Company and the Subsidiaries possess or have obtained, all licenses, certificates, consents, orders, approvals, permits and otherauthorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for theownership or lease of their respective properties or the conduct of their respective businesses and operations as currently conducted, as described in the Registration Statement and theProspectus (the “Permits”), except where the failure to possess, obtain or make the same would not, individually or in the aggregate, have a Material Adverse Effect. Neither theCompany nor any Subsidiary has received written notice of any proceeding relating to revocation or modification of any such Permit or has any reason to believe that such Permit willnot be renewed in the ordinary course, except where the failure to obtain any such renewal would not, individually or in the aggregate, have a Material Adverse Effect. t. No Material Defaults. Neither the Company nor any Subsidiary has defaulted on any installment on indebtedness for borrowed money or on any rental on oneor more long-term leases, which defaults, individually or in the aggregate, would have a Material Adverse Effect. The Company has not filed a report pursuant to Section 13(a) or 15(d) ofthe Exchange Act since the filing of its last Annual Report on Form 20-F, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) hasdefaulted on any installment on indebtedness for borrowed money or on any rental on one or more long-term leases, which defaults, individually or in the aggregate, would have aMaterial Adverse Effect. u. Certain Market Activities. Neither the Company, nor any Subsidiary, nor, to the knowledge of the Company, any of their respective directors, officers orcontrolling persons has taken, directly or indirectly, any action designed, or that has constituted or would cause or result in, under the Exchange Act or otherwise, the stabilization ormanipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.10v. Broker/Dealer Relationships. Neither the Company nor any Subsidiary or any related entities (i) is required to register as a “broker” or “dealer” in accordancewith the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or is a “person associated with a member” or “associated person of amember” (within the meaning set forth in the FINRA Manual). w. No Reliance. The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax or accounting advice in connection with the offeringand sale of the Placement Shares. x. Taxes. The Company and the Subsidiaries have filed all federal, state, local and foreign tax returns which have been required to be filed and paid all taxes shownthereon through the date hereof, to the extent that such taxes have become due and are not being contested in good faith, except where the failure to do so would not have a MaterialAdverse Effect. Except as otherwise disclosed in or contemplated by the Registration Statement or the Prospectus, no tax deficiency has been determined adversely to the Company orany Subsidiary which has had, or would have, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge of any federal, state or other governmental taxdeficiency, penalty or assessment which has been or might be asserted or threatened against it which would have a Material Adverse Effect. y. Title to Real and Personal Property. The Company and the Subsidiaries have good and valid title in fee simple to all items of real property and good and validtitle to all personal property described in the Registration Statement or Prospectus as being owned by them that are material to the businesses of the Company or such Subsidiary, ineach case free and clear of all liens, encumbrances and claims, except those that (i) do not materially interfere with the use made and proposed to be made of such property by theCompany and the Subsidiaries or (ii) would not, individually or in the aggregate, have a Material Adverse Effect. Any real property described in the Registration Statement orProspectus as being leased by the Company and the Subsidiaries is held by them under valid, existing and enforceable leases, except those that (A) do not materially interfere with theuse made or proposed to be made of such property by the Company or the Subsidiaries or (B) would not, individually or in the aggregate, have a Material Adverse Effect. z. Intellectual Property. Except as otherwise disclosed in the Registration Statement and Prospectus, the Company and the Subsidiary does not own or possessany material trade names, trademark registrations, service marks, service mark registrations, Internet domain name registrations, copyrights, copyright registrations, (collectively, the“Intellectual Property”), necessary for the conduct of their respective businesses as conducted as of the date hereof. aa. Compliance with Applicable Laws. The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are not conductingbusiness in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except where failure to be so in compliance would not resultin a Material Adverse Effect.11bb. Environmental Laws. The Company and the Subsidiaries (i) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations,decisions and orders relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively,“Environmental Laws”); (ii) have received and are in compliance with all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct theirrespective businesses as described in the Registration Statement and the Prospectus; and (iii) have not received notice of any actual or potential liability for the investigation orremediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except, in the case of any of clauses (i), (ii) or (iii) above, for any suchfailure to comply or failure to receive required permits, licenses, other approvals or liability as would not, individually or in the aggregate, have a Material Adverse Effect. cc. Disclosure Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions areexecuted in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity withGAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recordedaccountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company is not aware of anymaterial weaknesses in its internal control over financial reporting (other than as set forth in the Registration Statement or the Prospectus). Since the date of the latest audited financialstatements of the Company included in the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonablylikely to materially affect, the Company’s internal control over financial reporting (other than as set forth in the Registration Statement or the Prospectus). The Company has establisheddisclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) that comply with the requirements of the Exchange Act. The Company’s certifying officershave evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the Form 20-F for the fiscal year most recently ended(such date, the “Evaluation Date”). The Company presented in its Form 20-F for the fiscal year most recently ended the conclusions of the certifying officers about the effectiveness ofthe disclosure controls and procedures based on their evaluations as of the most recent Evaluation Date, and the “disclosure controls and procedures” are effective. dd. Sarbanes-Oxley Act. There is and has been no failure on the part of the Company or, to the knowledge of the Company, any of the Company’s directors orofficers, in their capacities as such, to comply in all material respects with any applicable provisions of the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder.Each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer of the Company and each former principal financialofficer of the Company as applicable) has made all certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with respect to all reports, schedules, forms, statements andother documents required to be filed by it or furnished by it to the Commission during the past 12 months. For purposes of the preceding sentence, “principal executive officer” and“principal financial officer” shall have the meanings given to such terms in the Exchange Act Rules 13a-15 and 15d-15. ee. Finder’s Fees. Neither the Company nor any Subsidiary has incurred any liability for any finder’s fees, brokerage commissions or similar payments inconnection with the transactions herein contemplated, except as may otherwise exist with respect to the Agent pursuant to this Agreement.12ff. Vessels. Except as otherwise disclosed in the Registration Statement and Prospectus, all of the vessels described in the Registration Statement and theProspectus are owned directly by the Company or subsidiaries of the Company. Each of such vessels (the “Owned Vessels”), to the knowledge of the Company, has been duly andvalidly registered as a vessel under the laws and regulations and flag of the applicable jurisdiction; each Company subsidiary has good title to the applicable Owned Vessel, free andclear of all mortgages, pledges, liens, security interests and claims and all defects of the title of record, except for those mortgages, pledges, liens, security interests and claims arisingunder credit facilities, each as disclosed in the Registration Statement and the Prospectus, and any other encumbrances which would not, in the aggregate, reasonably be expected toresult in a material adverse effect on the Company and its subsidiaries, taken as a whole. gg. Labor Disputes. No labor disturbance by or dispute with employees of the Company or any Subsidiary exists or, to the knowledge of the Company, isthreatened which would result in a Material Adverse Effect. hh. Investment Company Act. Neither the Company nor any Subsidiary is or, after giving effect to the offering and sale of the Placement Shares, will be required toregister as an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the“Investment Company Act”). ii. Operations. To the knowledge of the Company, the operations of the Company and the Subsidiaries are and have been conducted at all times in compliance withapplicable financial record keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of alljurisdictions to which the Company or the Subsidiaries are subject, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered orenforced by any governmental agency having jurisdiction over the Company (collectively, the “Money Laundering Laws”), except where the failure to be in such compliance would notresult in a Material Adverse Effect; and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or anySubsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened. jj. Off-Balance Sheet Arrangements. Except as otherwise disclosed in the Registration Statement and Prospectus, the Company does not have any off-balancesheet arrangement. kk. Underwriter Agreements. Other than with respect to this Agreement, the Company is not a party to any agreement with an agent or underwriter for any other“at the market” or continuous equity transaction.13ll. ERISA. To the knowledge of the Company, (i) each material employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement IncomeSecurity Act of 1974, as amended (“ERISA”) that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Companyand the Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited toERISA and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, hasoccurred which would result in a material liability to the Company with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and(iii) for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Codehas been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) equals or exceedsthe present value of all benefits accrued under such plan determined using reasonable actuarial assumptions, other than, in the case of (i), (ii) and (iii) above, as would not have aMaterial Adverse Effect. mm. Forward-Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a“Forward-Looking Statement”) contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than ingood faith. nn. Reserved. oo. Insurance. The Company and the Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and theSubsidiaries reasonably believe are adequate for the conduct of their business. pp. No Improper Practices. (i) Neither the Company nor, to the Company’s knowledge, the Subsidiaries, nor to the Company’s knowledge, any of their respectiveexecutive officers has, in the past five years, made any unlawful contributions to any candidate for any political office (or failed fully to disclose any contribution in violation of law) ormade any contribution or other payment to any official of, or candidate for, any federal, state, municipal, or foreign office or other person charged with similar public or quasi-public dutyin violation of any law or of the character required to be disclosed in the Prospectus; (ii) no relationship, direct or indirect, exists between or among the Company or, to the Company’sknowledge, the Subsidiaries or any affiliate of any of them, on the one hand, and the directors, officers and stockholders of the Company or, to the Company’s knowledge, theSubsidiaries, on the other hand, that is required by the Securities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship,direct or indirect, exists between or among the Company or the Subsidiaries or any affiliate of them, on the one hand, and the directors, officers, stockholders or directors of the Companyor, to the Company’s knowledge, the Subsidiaries, on the other hand, that is required by the rules of FINRA to be described in the Registration Statement and the Prospectus that is notso described; (iv) there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the Company’s knowledge, the Subsidiaries to or forthe benefit of any of their respective officers or directors or any of the members of the families of any of them; and (v) the Company has not offered, or caused any placement agent tooffer, Common Shares to any person with the intent to influence unlawfully (A) a customer or supplier of the Company or the Subsidiaries to alter the customer’s or supplier’s level ortype of business with the Company or the Subsidiaries or (B) a trade journalist or publication to write or publish favorable information about the Company or the Subsidiaries or any oftheir respective products or services, and, (vi) neither the Company nor the Subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or the Subsidiarieshas made any payment of funds of the Company or the Subsidiaries or received or retained any funds in violation of any law, rule or regulation (including, without limitation, the ForeignCorrupt Practices Act of 1977), which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement or the Prospectus.14qq. Status Under the Securities Act. The Company was not and is not an ineligible issuer as defined in Rule 405 under the Securities Act at the times specified inRules 164 and 433 under the Securities Act in connection with the offering of the Placement Shares. rr. No Misstatement or Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time(as defined in Section 25 below), did not, does not and will not, through the completion of the Placement or Placements for which such Issuer Free Writing Prospectus is issued, includeany information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any incorporated document deemed tobe a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based uponand in conformity with written information furnished to the Company by the Agent specifically for use therein. ss. No Conflicts. Neither the execution of this Agreement, nor the issuance, offering or sale of the Placement Shares, nor the consummation of any of thetransactions contemplated herein, nor the compliance by the Company with the terms and provisions hereof will conflict with, or will result in a breach of, any of the terms and provisionsof, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of theCompany pursuant to the terms of any contract or other agreement to which the Company may be bound or to which any of the property or assets of the Company is subject, except (i)such conflicts, breaches or defaults as may have been waived and (ii) such conflicts, breaches and defaults that would not have a Material Adverse Effect; nor will such action result (x)in any violation of the provisions of the organizational or governing documents of the Company, or (y) in any material violation of the provisions of any statute or any order, rule orregulation applicable to the Company or of any court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company, except wheresuch violation would not have a Material Adverse Effect. tt. OFAC. (i) Neither the Company nor any Subsidiary (collectively, the “Entity”) nor, to the Company’s knowledge, any director, officer, employee, agent, affiliate orrepresentative of the Entity, is a government, individual, or entity (in this paragraph (tt), “Person”) that is, or is owned or controlled by a Person that is: (a) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), theUnited Nations Security Council (“UNSC”), the European Union (“EU”), Her Majesty’s Treasury (“HMT”), or other relevant sanctions authority (collectively, “Sanctions”), nor15(b) located, organized or resident in a country or territory that is the subject of Sanctions. (ii) The Entity will not, directly or indirectly, knowingly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds toany subsidiary, joint venture partner or other Person: (a) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding orfacilitation, is the subject of Sanctions; or (b) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether asunderwriter, advisor, investor or otherwise). (iii) The Entity represents and covenants that, except as detailed in the Registration Statement and the Prospectus, for the past 5 years, it has notknowingly engaged in and is not now knowingly engaged in any dealing or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is orwas the subject of Sanctions. uu. Stock Transfer Taxes. On each Settlement Date, all material stock transfer or other taxes (other than income taxes) which are required to be paid in connectionwith the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be orwill have been fully complied with by the Company in all material respects. vv. Reserved. Any certificate signed by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement shall bedeemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein. 7. Covenants of the Company. The Company covenants and agrees with the Agent that: a. Registration Statement Amendments. After the date of this Agreement and during any period in which a prospectus relating to any Placement Shares is requiredto be delivered by the Agent under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act) (the“Prospectus Delivery Period”) (i) the Company will notify the Agent promptly of the time when any subsequent amendment to the Registration Statement, other than documentsincorporated by reference or amendments not related to any Placement, has been filed with the Commission and/or has become effective or any subsequent supplement to theProspectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus related to the Placement or for additionalinformation related to the Placement, (ii) the Company will prepare and file with the Commission, promptly upon the Agent’s request, any amendments or supplements to the RegistrationStatement or Prospectus that, upon the advice of the Company’s legal counsel, may be necessary or advisable in connection with the distribution of the Placement Shares by the Agent(provided, however, that the failure of the Agent to make such request shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on therepresentations and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agent shall have with respect to the failure to make such filingshall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the RegistrationStatement or Prospectus relating to the Placement Shares or a security convertible into the Placement Shares (other than an Incorporated Document) unless a copy thereof has beensubmitted to the Agent within a reasonable period of time before the filing and the Agent has not reasonably objected thereto (provided, however, that (A) the failure of the Agent tomake such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Companyin this Agreement and (B) the Company has no obligation to provide the Agent any advance copy of such filing or to provide the Agent an opportunity to object to such filing if thefiling does not name the Agent or does not relate to the transaction herein provided; and provided, further, that the only remedy the Agent shall have with respect to the failure by theCompany to obtain such consent shall be to cease making sales under this Agreement) and the Company will furnish to the Agent at the time of filing thereof a copy of any documentthat upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company willcause each amendment or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in thecase of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed (thedetermination to file or not file any amendment or supplement with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shallbe made exclusively by the Company).16b. Notice of Commission Stop Orders. The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance orthreatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Placement Shares foroffering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will use its commercially reasonable efforts to prevent the issuance ofany stop order or to obtain its withdrawal if such a stop order should be issued. The Company will advise the Agent promptly after it receives any request by the Commission for anyamendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related to the offeringof the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus. c. Delivery of Prospectus; Subsequent Changes. During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by theSecurities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by theCompany with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If the Company has omitted any information from theRegistration Statement pursuant to Rule 430A under the Securities Act, it will use its commercially reasonable efforts to comply with the provisions of and make all requisite filings withthe Commission pursuant to said Rule 430A and to notify the Agent promptly of all such filings. If during the Prospectus Delivery Period any event occurs as a result of which theProspectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light ofthe circumstances then existing, not misleading, or if during such Prospectus Delivery Period it is necessary to amend or supplement the Registration Statement or Prospectus to complywith the Securities Act, the Company will promptly notify the Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend orsupplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance; provided, however, thatthe Company may delay the filing of any amendment or supplement, if in the judgment of the Company, it is in the best interest of the Company.17d. Listing of Placement Shares. During the Prospectus Delivery Period, the Company will use its commercially reasonable efforts to cause the Placement Shares tobe listed on the Exchange and to qualify the Placement Shares for sale under the securities laws of such jurisdictions in the United States as the Agent reasonably designates and tocontinue such qualifications in effect so long as required for the distribution of the Placement Shares; provided, however, that the Company shall not be required in connection therewithto qualify as a foreign corporation or dealer in securities, file a general consent to service of process, or subject itself to taxation in any jurisdiction if it is not otherwise so subject. e. Delivery of Registration Statement and Prospectus. The Company will furnish to the Agent and its counsel (at the reasonable expense of the Company) copiesof the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement orProspectus that are filed with the Commission during the Prospectus Delivery Period (including all documents filed with the Commission during such period that are deemed to beincorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the Agent may from time to time reasonably request and, at the Agent’srequest, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not berequired to furnish any document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR. f. Earnings Statement. The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months afterthe end of the Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act. g. Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”18h. Notice of Other Sales. Without the prior written consent of the Agent, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant anyoption to sell or otherwise dispose of any Common Shares (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable forCommon Shares, warrants or any rights to purchase or acquire, Common Shares during the period beginning on the date on which any Placement Notice is delivered to the Agenthereunder and ending on the third (3rd) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if thePlacement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice, the date of such suspension or termination); and will notdirectly or indirectly in any other “at the market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Shares(other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Shares, warrants or any rights to purchase or acquire,Common Shares prior to the termination of this Agreement; provided, however, that such restrictions will not apply in connection with the Company’s issuance or sale of (i) CommonShares, options to purchase Common Shares or Common Shares issuable upon the exercise of options, pursuant to any share option, or benefits plan, share ownership plan or dividendreinvestment plan (but not Common Shares subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented;(ii) Common Shares issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company availableon EDGAR or otherwise in writing to the Agent, (iii) Common Shares, or securities convertible into or exercisable for Common Shares, offered and sold in a privately negotiatedtransaction to vendors, customers, strategic partners or potential strategic partners or other investors conducted in a manner so as not to be integrated with the offering of CommonShares hereby and (iv) Common Shares in connection with any acquisition, strategic investment or other similar transaction (including any joint venture, strategic alliance orpartnership). i. Change of Circumstances. The Company will, at any time during the pendency of a Placement Notice advise the Agent promptly after it shall have receivednotice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to be providedto the Agent pursuant to this Agreement. j. Due Diligence Cooperation. During the term of this Agreement, the Company will cooperate with any reasonable due diligence review conducted by the Agentor its representatives in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporateofficers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request. k. Required Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require, the Company will (i)file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act (each and every date a filing under Rule 424(b) is made, a“Filing Date”), which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and thecompensation payable by the Company to the Agent with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to eachexchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market. l. Representation Dates; Certificate. Each time during the term of this Agreement that the Company:19(i) amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) theRegistration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation ofdocuments by reference into the Registration Statement or the Prospectus relating to the Placement Shares; (ii) files an annual report on Form 20-F under the Exchange Act (including any Form 20-F/A containing amended audited financial information or a materialamendment to the previously filed Form 20-F); (iii) files its quarterly or semi-annual financial statements on Form 6-K under the Exchange Act; or (iv) files a current report on Form 6-K containing amended financial information under the Exchange Act; (Each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date.”) the Company shall furnish the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in such Form 6-K is material) with acertificate, in the form attached hereto as Exhibit 7(l). The requirement to provide a certificate under this Section 7(l) shall be waived for any Representation Date occurring at a time atwhich no Placement Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Placement Notice hereunder (which for such calendarquarter shall be considered a Representation Date) and the next occurring Representation Date on which the Company files its annual report on Form 20-F. Notwithstanding theforegoing, (i) upon the delivery of the first Placement Notice hereunder and (ii) if the Company subsequently decides to sell Placement Shares following a Representation Date when theCompany relied on such waiver and did not provide the Agent with a certificate under this Section 7(l), then before the Agent sells any Placement Shares, the Company shall provide theAgent with a certificate, in the form attached hereto as Exhibit 7(l), dated the date of the Placement Notice. m. Legal Opinion. On or prior to the date of the first Placement Notice given hereunder the Company shall cause to be furnished to the Agent a written opinion anda negative assurance letter of Seward & Kissel LLP (“Company Counsel”), or other counsel reasonably satisfactory to the Agent, each in form and substance reasonably satisfactory tothe Agent. Thereafter, within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate in the form attached hereto asExhibit 7(l) for which no waiver is applicable, the Company shall cause to be furnished to the Agent a negative assurance letter of Company Counsel in form and substance reasonablysatisfactory to the Agent; provided that, in lieu of such negative assurance for subsequent periodic filings under the Exchange Act, counsel may furnish the Agent with a letter (a“Reliance Letter”) to the effect that the Agent may rely on the negative assurance letter previously delivered under this Section 7(m) to the same extent as if it were dated the date ofsuch letter (except that statements in such prior letter shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of the date of theReliance Letter).20n. Comfort Letter. Within five (5) Trading Days of each subsequent Representation Date, other than pursuant to Section 7(l)(iii), the Company shall cause itsindependent accountants to furnish the Agent letters (the “Comfort Letters”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section7(n). The Comfort Letter from the Company’s independent accountants shall be in a form and substance reasonably satisfactory to the Agent, (i) confirming that they are an independentpublic accounting firm within the meaning of the Securities Act and the Public Company Accounting Oversight Board (the “PCAOB”), (ii) stating, as of such date, the conclusions andfindings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered publicofferings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter hadit been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter. o. Market Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or would constitute, thestabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Shares or (ii) sell, bid for, or purchase Common Shares in violation ofRegulation M, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent. p. Investment Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor the Subsidiaries will be orbecome, at any time prior to the termination of this Agreement, an “investment company,” as such term is defined in the Investment Company Act. q. No Offer to Sell. Other than an Issuer Free Writing Prospectus approved in advance by the Company and the Agent in its capacity as agent hereunderpursuant to Section 23, neither of the Agent nor the Company (including its agents and representatives, other than the Agent in its capacity as such) will make, use, prepare, authorize,approve or refer to any written communication (as defined in Rule 405), required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buyPlacement Shares hereunder. 8. Representations and Covenants of the Agent. The Agent represents and warrants that it is duly registered as a broker-dealer under FINRA, the Exchange Act and theapplicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states in which the Agent is exempt from registration or suchregistration is not otherwise required. The Agent shall continue, for the term of this Agreement, to be duly registered as a broker-dealer under FINRA, the Exchange Act and theapplicable statutes and regulations of each state in which the Placement Shares will be offered and sold, except such states in which it is exempt from registration or such registration isnot otherwise required, during the term of this Agreement. The Agent shall comply with all applicable law and regulations in connection with the transactions contemplated by thisAgreement, including the issuance and sale through the Agent of the Placement Shares.219. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, filing,including any fees required by the Commission, and printing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment andsupplement thereto and each Free Writing Prospectus, in such number as the Agent shall deem reasonably necessary, (ii) the printing and delivery to the Agent of this Agreement andsuch other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the preparation, issuance and delivery of thecertificates, if any, for the Placement Shares to the Agent, including any stock or other transfer taxes and any capital duties, stamp duties or other duties or taxes payable upon the sale,issuance or delivery of the Placement Shares to the Agent, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Company, (v) the reasonable anddocumented out-of-pocket fees and disbursements of counsel to the Agent up to $40,000.00 after the Agent or its legal counsel provided the Company with written invoicesdocumenting such fees and disbursement in reasonable detail, then starting with the fourth quarter ended December 31, 2020 at the earliest, an additional $2,500.00 per quarter so long asthis Agreement remains in effect and excluding any period during which a Suspension is in place pursuant to Section 4 (provided that such additional fee shall be paid upon theresumption of sale upon the ending of any Suspension); (vi) the fees and expenses of the transfer agent and registrar for the Common Shares, (vii) the filing fees incident to any reviewby FINRA of the terms of the sale of the Placement Shares, and (viii) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange. 10. Conditions to the Agent’s Obligations. The obligations of the Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completenessof the representations and warranties made by the Company herein (other than those representations and warranties made as of a specified date or time), to the due performance in allmaterial respects by the Company of its obligations hereunder, to the completion by the Agent of a due diligence review satisfactory to it in its reasonable judgment, and to thecontinuing reasonable satisfaction (or waiver by the Agent in its sole discretion) of the following additional conditions: a. Registration Statement Effective. The Registration Statement shall remain effective and shall be available for the sale of all Placement Shares contemplated to beissued by any Placement Notice. b. No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional informationfrom the Commission or any other federal or state governmental authority during the period of effectiveness of the Registration Statement, the response to which would require anypost‑effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state governmental authority ofany stop order suspending the effectiveness of the Registration Statement or receipt by the Company of notification of the initiation of any proceedings for that purpose; (iii) receipt bythe Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or receiptby the Company of notification of the initiation of, or a threat to initiate, any proceeding for such purpose; or (iv) the occurrence of any event that makes any material statement made inthe Registration Statement or the Prospectus or any material Incorporated Document untrue in any material respect or that requires the making of any changes in the RegistrationStatement, the Prospectus or any material Incorporated Document so that, in the case of the Registration Statement, it will not contain any materially untrue statement of a material fact oromit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectus or any materialIncorporated Document, it will not contain any materially untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make thestatements therein, in the light of the circumstances under which they were made, not misleading.22c. No Misstatement or Material Omission. The Agent shall not have advised the Company that the Registration Statement or Prospectus, or any amendment orsupplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion is material, or omits to state a fact that in the Agent’s reasonable opinion is material andis required to be stated therein or is necessary to make the statements therein not misleading. d. Material Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been anyMaterial Adverse Effect, or any development that would cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating assigned to any of the Company’s securities(other than asset backed securities) by any “nationally recognized statistical rating organization,” as such term is defined by the Commission for purposes of Rule 436(g)(2) under theSecurities Act (a “Rating Organization”), or a public announcement by any Rating Organization that it has under surveillance or review its rating of any of the Company’s securities(other than asset backed securities), the effect of which, in the case of any such action by a Rating Organization described above, in the reasonable judgment of the Agent (withoutrelieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shareson the terms and in the manner contemplated in the Prospectus. e. Legal Opinion. The Agent shall have received (i) the opinion and negative assurance letter of Company Counsel required to be delivered pursuant to Section7(m) on or before the date on which such delivery of such opinion and negative assurance letter are required pursuant to Section 7(m); and (ii) the opinion of MJM Limited, theCompany’s Bermuda counsel, in a form reasonably satisfactory to the Agent. f. Comfort Letter. The Agent shall have received the Comfort Letter required to be delivered pursuant Section 7(n) on or before the date on which such delivery ofsuch letter is required pursuant to Section 7(n). g. Representation Certificate. The Agent shall have received the certificate required to be delivered pursuant to Section 7(l) on or before the date on whichdelivery of such certificate is required pursuant to Section 7(l). h. Secretary’s Certificate. On or prior to the first Representation Date, the Agent shall have received a certificate, signed on behalf of the Company by itscorporate Secretary, in form and substance satisfactory to the Agent and its counsel. Such certificate shall include a representation that the Company (i) has a non-affiliate and publiccommon equity float of at least $300 million, calculated on any date within the past 60 days from the date of this Agreement, and (ii) has been subject to the Exchange Act reportingrequirements for a period of at least 36 months and has filed in a timely manner all such reports required to be filed in the past 12 months.23i. No Suspension. Trading in the Common Shares shall not have been suspended on the Exchange and the Common Shares shall not have been delisted from theExchange. j. Other Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(l), the Company shall have furnished to the Agentsuch appropriate further information, certificates and documents as the Agent may reasonably request and which are usually and customarily furnished by an issuer of securities inconnection with a securities offering of the type contemplated hereby. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof. k. Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of anyPlacement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424. l. Approval for Listing. The Placement Shares shall either have been approved for listing on the Exchange, subject only to notice of issuance, or the Companyshall have filed an application for listing of the Placement Shares on the Exchange at, or prior to, the issuance of any Placement Notice. m. No Termination Event. There shall not have occurred any event that would permit the Agent to terminate this Agreement pursuant to Section 13(a). n. FINRA. If applicable, FINRA shall have raised no objection to the terms of this offering and the amount of compensation allowable or payable to the Agent asdescribed in the Prospectus. 11. Indemnification and Contribution. (a) Company Indemnification. The Company agrees to indemnify and hold harmless the Agent, its partners, members, directors, officers, employees and agentsand each person, if any, who controls the Agent within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon any untruestatement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a materialfact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact includedin any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary inorder to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount paid insettlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untruestatement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 11(d) below) any such settlement is effected with the written consent of theCompany, which consent shall not unreasonably be delayed or withheld; and24(iii) against any and all expense whatsoever, as incurred (including the reasonable and documented out-of-pocket fees and disbursements of counsel),reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened,or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i)or (ii) above, provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or allegeduntrue statement or omission made solely in reliance upon and in conformity with written information furnished to the Company by the Agent expressly for use in the RegistrationStatement (or any amendment thereto), or in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto). (b) Indemnification by the Agent. The Agent agrees to indemnify and hold harmless the Company and its directors and officers, and each person, if any, who (i)controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act or (ii) is controlled by or is under common control with the Companyagainst any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 11(a), as incurred, but only with respect to untrue statements or omissions,or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or in any related Issuer Free Writing Prospectus or the Prospectus (or anyamendment or supplement thereto) in reliance upon and in conformity with information relating to the Agent and furnished to the Company in writing by the Agent expressly for usetherein. (c) Procedure. Any party that proposes to assert the right to be indemnified under this Section 11 will, promptly after receipt of notice of commencement of anyaction against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 11, notify each such indemnifying party of thecommencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liabilitythat it might have to any indemnified party otherwise than under this Section 11 and (ii) any liability that it may have to any indemnified party under the foregoing provisions of thisSection 11 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought againstany indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by deliveringwritten notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarlynotified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of itselection to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonablecosts of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any suchaction, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party hasbeen authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it orother indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict of interest exists (based on advice of counselto the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action onbehalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of thecommencement of the action, in each of which cases the reasonable and documented out-of-pocket fees, disbursements and other charges of counsel will be at the expense of theindemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liablefor the reasonable and documented out-of-pocket fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for allsuch indemnified party or parties. All such reasonable and documented out-of-pocket fees, disbursements and other charges will be reimbursed by the indemnifying party promptly afterthe indemnifying party receives a written invoice relating to fees, disbursements and other charges in reasonable detail. An indemnifying party will not, in any event, be liable for anysettlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise orconsent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 11 (whether or not any indemnifiedparty is a party thereto), unless such settlement, compromise or consent (1) includes an unconditional release of each indemnified party from all liability arising out of such litigation,investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.25(d) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs ofthis Section 11 is applicable in accordance with its terms but for any reason is held to be unavailable from the Company or the Agent, the Company and the Agent will contribute to thetotal losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlementof, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the Agent, such as persons who controlthe Company within the meaning of the Securities Act or the Exchange Act, officers of the Company who signed the Registration Statement and directors of the Company, who also maybe liable for contribution) to which the Company and the Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on theone hand and the Agent on the other hand. The relative benefits received by the Company on the one hand and the Agent on the other hand shall be deemed to be in the sameproportion as the total Net Proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agent(before deducting expenses) from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicablelaw, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative faultof the Company, on the one hand, and the Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action inrespect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whetherthe untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent ofthe parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agent agree that it would not bejust and equitable if contributions pursuant to this Section 11(d) were to be determined by pro rata allocation or by any other method of allocation that does not take into account theequitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof,referred to above in this Section 11(d) shall be deemed to include, for the purpose of this Section 11(d), any legal or other expenses reasonably incurred by such indemnified party inconnection with investigating or defending any such action or claim to the extent consistent with Section 11(c) hereof. Notwithstanding the foregoing provisions of this Section 11(d),the Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation(within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of thisSection 11(d), any person who controls a party to this Agreement within the meaning of the Securities Act or the Exchange Act, and any officers, directors, partners, employees oragents of the Agent, will have the same rights to contribution as that party, and each officer who signed the Registration Statement and director of the Company will have the samerights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any actionagainst such party in respect of which a claim for contribution may be made under this Section 11(d), will notify any such party or parties from whom contribution may be sought, but theomission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 11(d) except to theextent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement enteredinto pursuant to the last sentence of Section 11(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent isrequired pursuant to Section 11(c) hereof.2612. Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 11 of this Agreement and all representationsand warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf ofthe Agent, any controlling persons, or the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement Shares andpayment therefor or (iii) any termination of this Agreement.2713. Termination. a. The Agent may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution of thisAgreement or since the date as of which information is given in the Prospectus, any Material Adverse Effect, or any development that would have a Material Adverse Effect that, in thesole judgment of the Agent, is material and adverse and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (2)if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof orother calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect ofwhich is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (3) iftrading in the Common Shares has been suspended or limited by the Commission or the Exchange, or if trading generally on the Exchange has been suspended or limited, or minimumprices for trading have been fixed on the Exchange, (4) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall haveoccurred and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States shall have occurred and be continuing, or (6) if a bankingmoratorium has been declared by either U.S. Federal or New York authorities. Any such termination shall be without liability of any party to any other party except that the provisions ofSection 9 (Payment of Expenses), Section 11 (Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time;Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination. If the Agent elects to terminate thisAgreement as provided in this Section 13(a), the Agent shall provide the required notice as specified in Section 14 (Notices). b. The Company shall have the right, by giving five (5) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after thedate of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 9 (Payment of Expenses), Section 11(Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19(Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination. c. The Agent shall have the right, by giving five (5) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after thedate of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 9 (Payment of Expenses), Section 11(Indemnification and Contribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19(Consent to Jurisdiction) hereof shall remain in full force and effect notwithstanding such termination. d. Unless earlier terminated pursuant to this Section 13, this Agreement shall automatically terminate upon the issuance and sale of all of the Placement Sharesthrough the Agent on the terms and subject to the conditions set forth herein except that the provisions of Section 9 (Payment of Expenses), Section 11 (Indemnification andContribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction)hereof shall remain in full force and effect notwithstanding such termination.28e. This Agreement shall remain in full force and effect unless terminated pursuant to Sections 13(a), (b), (c), or (d) above or otherwise by mutual agreement of theparties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 9 (Payment of Expenses), Section 11 (Indemnification andContribution), Section 12 (Representations and Agreements to Survive Delivery), Section 18 (Governing Law and Time; Waiver of Jury Trial) and Section 19 (Consent to Jurisdiction)shall remain in full force and effect. Upon termination of this Agreement, the Company shall not have any liability to the Agent for any discount, commission or other compensation withrespect to any Placement Shares not otherwise sold by the Agent under this Agreement. f. Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not beeffective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be. If such termination shall occur prior to the Settlement Datefor any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement. 14. Notices. All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be inwriting, unless otherwise specified, and if sent to the Agent, shall be delivered to: B. Riley Securities, Inc.299 Park Avenue, 7th FloorNew York, NY 10171Attention: General CounselTelephone: (212) 457-9947Email: atmdesk@brileyfin.com with a copy to:Morgan Lewis & Bockius LLP1400 Page Mill RoadPalo Alto, CA 94304Attention: Albert LungTelephone: (650) 843-7263Email: albert.lung@morganlewis.com29and if to the Company, shall be delivered to:LOM Building27 Reid Street, Hamilton, HM 11BermudaAttention: Bjorn GiaeverTelephone: (441) 292-7202Email: bg@scandicamerican.comwith a copy to:Seward & Kissel LLPOne Battery Park PlazaNew York NY 10004Attention: Gary WolfeTelephone: (212) 574-1223Email: Wolfe@sewkis.com Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each such notice orother communication shall be deemed given (i) when delivered personally, by email, or by verifiable facsimile transmission on or before 4:30 p.m., New York City time, on a Business Dayor, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on theBusiness Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shallmean any day on which the Exchange and commercial banks in the City of New York are open for business. 15. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and the Agent and their respective successors and theaffiliates, controlling persons, officers and directors referred to in Section 11 hereof. References to any of the parties contained in this Agreement shall be deemed to include thesuccessors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respectivesuccessors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither theCompany nor the Agent may assign its rights or obligations under this Agreement without the prior written consent of the other party. 16. Adjustments for Stock Splits. The parties acknowledge and agree that all share‑related numbers contained in this Agreement shall be adjusted to take into account anyshare consolidation, stock split, stock dividend, corporate domestication or similar event effected with respect to the Placement Shares.3017. Entire Agreement; Amendment; Severability. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto)constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to thesubject matter hereof. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Agent. In the event thatany one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction,then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall beconstrued as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of theterms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement. 18. GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWSOF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. THECOMPANY AND THE AGENT EACH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURYIN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 19. CONSENT TO JURISDICTION. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTSSITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH ANYTRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THATIT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUMOR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS ANDCONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPTREQUESTED) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOODAND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESSIN ANY MANNER PERMITTED BY LAW. 20. Use of Information. The Agent may not use any information gained in connection with this Agreement and the transactions contemplated by this Agreement, includingdue diligence, to advise any party with respect to transactions not expressly approved by the Company. 21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute oneand the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile transmission or email of a .pdf attachment. 22. Effect of Headings. The section, Schedule and Exhibit headings herein are for convenience only and shall not affect the construction hereof.3123. Permitted Free Writing Prospectuses. The Company represents, warrants and agrees that, unless it obtains the prior consent of the Agent, and the Agent represents,warrants and agrees that, unless it obtains the prior consent of the Company, it has not made and will not make any offer relating to the Placement Shares that would constitute an IssuerFree Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writingprospectus consented to by the Agent or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents andwarrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and willcomply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed in Exhibit 23 hereto are Permitted Free Writing Prospectuses. 24. Absence of Fiduciary Relationship. The Company acknowledges and agrees that: a. The Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction contemplated bythis Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of its respective affiliates, stockholders (or otherequity holders), creditors or employees or any other party, on the one hand, and the Agent, on the other hand, has been or will be created in respect of any of the transactionscontemplated by this Agreement, irrespective of whether or not the Agent has advised or is advising the Company on other matters, and the Agent has no obligation to the Companywith respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement; b. it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by thisAgreement; c. the Agent has not provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and it hasconsulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate; d. it is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company andthe Agent has no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and e. it waives, to the fullest extent permitted by law, any claims it may have against the Agent for breach of fiduciary duty or alleged breach of fiduciary duty inconnection with the sale of Placement Shares under this Agreement and agrees that the Agent shall not have any liability (whether direct or indirect, in contract, tort or otherwise) to it inrespect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than inrespect of the Agent’s obligations under this Agreement and to keep information provided by the Company to the Agent and its counsel confidential to the extent not otherwisepublicly-available.3225. Definitions. As used in this Agreement, the following terms have the respective meanings set forth below: “Applicable Time” means (i) each Representation Date and (ii) the time of each sale of any Placement Shares pursuant to this Agreement. “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement Shares that (1) is required to be filed with theCommission by the Company, (2) is a “road show” that is a “written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or(3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that does not reflect the final terms, in each case in theform filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act. “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules under the Securities Act. All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the Registration Statement or theProspectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is incorporated byreference in the Registration Statement or the Prospectus, as the case may be. All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copyfiled with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free Writing Prospectuses that, pursuant toRule 433, are not required to be filed with the Commission) shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in thisAgreement to “supplements” to the Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials prepared in connection with any offering, sale orprivate placement of any Placement Shares by the Agent outside of the United States. [Remainder of the page intentionally left blank]33If the foregoing correctly sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose, whereupon this letter shallconstitute a binding agreement between the Company and the Agent.Very truly yours,NORDIC AMERICAN TANKERS LIMITEDBy:Name:Title:ACCEPTED as of the date first-above written:B. RILEY SECURITIES, INC.By:Name: Patrice McNicollTitle: Co-Head of Investment Banking34SCHEDULE 1FORM OF PLACEMENT NOTICE From:Nordic American Tankers LimitedTo:B. Riley Securities, Inc.Attention:[•]Subject:At Market Issuance--Placement NoticeLadies and Gentlemen: Pursuant to the terms and subject to the conditions contained in the At Market Issuance Sales Agreement between Nordic American Tankers Limited, a Bermuda limitedcompany (the “Company”), and B. Riley Securities, Inc. (the “Agent”), dated October 16, 2020, the Company hereby requests that the Agent sell up to [____] of the Company’s CommonShares, par value $0.01 per share, at a minimum market price of $per share, during the time period beginning [month, day, time] and ending [month, day, time].35SCHEDULE 2CompensationThe Company shall pay to the Agent in cash, upon each sale of Placement Shares pursuant to this Agreement, an amount equal to 2.5% of the gross proceeds from each sale ofPlacement Shares.36SCHEDULE 3Notice PartiesThe CompanyHerbjorn HanssonHerbjorn.Hansson@scandicamerican.comBjorn Giaeverbg@scandicamerican.comB. Riley Securities, Inc.Seth Appelsappel@brileyfin.comErnie Dahlmanedahlman@brileyfin.comScott Ammaturosammaturo@brileyfin.comPatrice McNicollpmcnicoll@brileyfin.comKeith Pomplianokpompliano@brileyfin.comwith a copy to atmdesk@brileyfin.com37SCHEDULE 6(g)SubsidiariesCompanyJurisdictionNAT BERMUDA HOLDINGS LIMITEDBermudaScandic American Shipping Ltd.BermudaNAT Chartering Ltd.Bermuda38EXHIBIT 7(l)Form of Representation Date Certificate___________, 20___ This Representation Date Certificate (this “Certificate”) is executed and delivered in connection with Section 7(l) of the At Market Issuance Sales Agreement (the “Agreement”),dated October 16, 2020, and entered into between Nordic American Tankers Limited (the “Company”) and B. Riley Securities, Inc. All capitalized terms used but not defined herein shallhave the meanings given to such terms in the Agreement. The Company hereby certifies as follows: 1. As of the date of this Certificate (i) the Registration Statement does not contain any untrue statement of a material fact or omit to state a material fact required to bestated therein or necessary in order to make the statements therein not misleading and (ii) neither the Registration Statement nor the Prospectus contain any untrue statement of amaterial fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made,not misleading and (iii) no event has occurred as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein not untrue or misleadingfor this paragraph 1 to be true. 2. Each of the representations and warranties of the Company contained in the Agreement were, when originally made, and are, as of the date of this Certificate, true andcorrect in all material respects. 3. Except as waived by the Agent in writing, each of the covenants required to be performed by the Company in the Agreement on or prior to the date of the Agreement,this Representation Date, and each such other date prior to the date hereof as set forth in the Agreement, has been duly, timely and fully performed in all material respects and eachcondition required to be complied with by the Company on or prior to the date of the Agreement, this Representation Date, and each such other date prior to the date hereof as set forthin the Agreement has been duly, timely and fully complied with in all material respects. 4. Subsequent to the date of the most recent financial statements in the Prospectus, and except as described in the Prospectus, including Incorporated Documents, therehas been no Material Adverse Effect. 5. No stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued, and no proceedings for that purpose have beeninstituted or are pending or threatened by any securities or other governmental authority (including, without limitation, the Commission).396. No order suspending the effectiveness of the Registration Statement or the qualification or registration of the Placement Shares under the securities or Blue Sky laws ofany jurisdiction are in effect and no proceeding for such purpose is pending before, or threatened, to the Company’s knowledge or in writing by, any securities or other governmentalauthority (including, without limitation, the Commission). The undersigned has executed this Representation Date Certificate as of the date first written above.[•]By:Name:Title:EXHIBIT 23Permitted Issuer Free Writing Prospectuses[None].Exhibit 8.1The following is a list of the Company's subsidiaries as of April 29, 2021:NameOrganizationOwnership percentageScandic American Shipping Ltd.Bermuda100%NAT Chartering Ltd.Bermuda100%NAT Bermuda Holdings LimitedBermuda100%Exhibit 12.1CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICERI, Herbjørn Hansson, certify that:1. I have reviewed this annual report on Form 20-F of Nordic American Tankers Limited;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results ofoperations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosurecontrols and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that hasmaterially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the auditcommittee of the Company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect theCompany’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.Date: April 29, 2021 /s/ Herbjørn HanssonHerbjørn HanssonChief Executive Officer (Principal Executive Officer)Exhibit 12.2CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICERI, Bjørn Giaever, certify that:1. I have reviewed this annual report on Form 20-F of Nordic American Tankers Limited;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of thecircumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results ofoperations and cash flows of the Company as of, and for, the periods presented in this report;4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)) and 15d-15(f) for the Company and have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that materialinformation relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosurecontrols and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that hasmaterially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the auditcommittee of the Company’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect theCompany’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.Date: April 29, 2021 /s/ Bjørn GiaeverBjørn GiaeverChief Financial Officer (Principal Financial Officer)Exhibit 13.1PRINCIPAL EXECUTIVE OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350In connection with this Annual Report of Nordic American Tankers Limited (the “Company”) on Form 20-F for the year ended December 31, 2020 as filed with the Securities andExchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Herbjørn Hansson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.Date: April 29, 2021/s/ Herbjørn HanssonHerbjørn HanssonChief Executive Officer (Principal Executive Officer)Exhibit 13.2PRINCIPAL FINANCIAL OFFICER CERTIFICATIONPURSUANT TO 18 U.S.C. SECTION 1350In connection with this Annual Report of Nordic American Tankers Limited (the “Company”) on Form 20-F for the year ended December 31, 2020 as filed with the Securities andExchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Bjørn Giaever, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.Date: April 29, 2021/s/ Bjørn GiaeverBjørn GiaeverChief Financial Officer (Principal Financial Officer)Exhibit 15.1Consent of Independent Registered Public Accounting FirmThe Board of DirectorsNordic American Tankers Limited:We consent to the incorporation by reference in the registration statement (No. 333-228603) on Form F-3 of Nordic American Tankers Limited of our reports dated April 29, 2021, withrespect to the consolidated balance sheets of Nordic American Tankers Limited and subsidiaries as of December 31, 2020 and 2019, and the related consolidated statements ofoperations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes, and theeffectiveness of internal control over financial reporting as of December 31, 2020, which reports appear in the December 31, 2020 annual report on Form 20-F of Nordic American TankersLimited./s/ KPMG ASOslo, NorwayApril 29, 2021Exhibit 15.2FEARNRESEARCHNordic American TankersLOM Building27 Reid StreetHamilton HM11BermudaMarch 31, 2021Ladies and Gentlemen:Reference is made to the annual report on Form-20F for the year ended December 31, 2020 of Nordic American Tankers Limited (the “Company”) to be filed with the U.S. Securities andExchange Commission (the “SEC”) (the “Annual Report”).We hereby consent to all references to our name in the Annual Report and to the use of the statistical information supplied by us set forth in the Annual Report, including, withoutlimitation, the information set forth in the Annual Report under the heading “The 2020 Tanker Market”. We further advise the Company that our role has been limited to the provision ofsuch statistical data supplied by us. With respect to such statistical data, we further advise you that:(1)certain information in our database is derived from estimates or subjective judgements, and while we have taken reasonable care in the compilation of the statistical and geographicalinformation and believe it to be accurate and correct, data compiled is subject to limited audit and validation procedures; and(2)the information in the databases of other maritime data collection agencies may differ from the information in our database.We hereby consent to the filing of this letter as an exhibit to the Annual Report to be filed with the SEC pursuant to the Securities Exchange Act of 1934, as amended, and to thereferences to our firm in the section of the Annual Report entitled “The 2020 Tanker Market”.Yours faithfully,/s/ Jonathan S. StauboJonathan S. StauboTitle: Advisor

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