Flex LNG - 20F 2021

HM08

Bermuda

Telephone:

441

295 69 35

Facsimile:

441

295 3494

(Name, Telephone, E-mail and/or Facsimile, and address of Company Contact Person)

Securities registered or to be registered pursuant to section 12(b) of the Act.

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Ordinary Shares, par value $0.10 per share

FLNG

New York Stock Exchange

Securities registered or to be registered pursuant to section 12(g) of the Act.

NONE

(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

NONE

(Title of class)

Indicate 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, 2021, there were 53,130,584 ordinary shares, par value $0.10 per share, issued and outstanding.

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Yes

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pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

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Yes

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submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such

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Yes

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Large accelerated filer

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Accelerated filer

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Non-accelerated filer

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Emerging growth company

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reporting company)

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the registrant has elected not to use the extended transition 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 April 5, 2012.

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U.S. GAAP

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Item 17

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Item 18

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(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE

YEARS)

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TABLE OF CONTENTS

Page

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

ITEM 3.

KEY INFORMATION

ITEM 4.

INFORMATION ON THE COMPANY

ITEM 4A.

UNRESOLVED STAFF COMMENTS

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

ITEM 8.

FINANCIAL INFORMATION

ITEM 9.

THE OFFER AND LISTING

ITEM 10.

ADDITIONAL INFORMATION

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF

PROCEEDS

ITEM 15.

CONTROLS AND PROCEDURES

ITEM 16.

[RESERVED]

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT.

ITEM 16B.

CODE OF ETHICS

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED

PURCHASERS

ITEM 16F.

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

ITEM 16G.

CORPORATE GOVERNANCE

ITEM 16H.

MINE SAFETY DISCLOSURE

PART III

ITEM 17.

FINANCIAL STATEMENTS

ITEM 18.

FINANCIAL STATEMENTS

ITEM 19.

EXHIBITS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR

SUMMARY

Our disclosure and analysis in this annual report pertaining to our operations, cash flows and financial position,

including, in particular, the likelihood of our success in developing and expanding our business, include forward-looking

statements. The Private Securities Litigation Reform Act of 1995, or the PSLRA, 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.

We are taking advantage of the safe harbor provisions of the PSLRA and are including this cautionary statement in

connection therewith. This document and any other written or oral statements made by us or on our behalf may include

forward-looking statements, which reflect our current views with respect to future events and financial performance. This

annual report includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are

intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs about

future events may and often do vary from actual results and the differences can be material. Statements that are predictive in

nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "intends,"

"plans," "believes," "estimates," "seeks," "targets," "potential," "continue," "contemplate," "possible," "likely," "might," "will,"

"would," "could," "projects," "forecasts," "may," "should" and similar expressions are forward-looking statements.

All statements in this annual report that are not statements of either historical or current facts are forward-looking

statements. Forward-looking statements include, but are not limited to, such matters as:

•general LNG shipping market conditions, including fluctuations in charter rates and vessel values;

•the volatility of prevailing spot market charter rates;

•our future operating or financial results;

•global and regional economic and political conditions or events, including "trade wars" and other, including armed

conflicts, piracy or acts by terrorists;

•fluctuations in interest rates and foreign exchange rates;

•stability of Europe and the Euro;

•our business strategy and expected and unexpected capital spending and operating expenses, including dry-docking,

surveys, upgrades, insurance costs, crewing and bunker costs;

•our expectations of the availability of vessels to purchase, the time it may take to construct new vessels and risks

associated with vessel construction and vessels' useful lives;

•LNG market trends, including charter rates and factors affecting supply and demand;

•the supply of and demand for vessels comparable to ours, including against the background of possibly accelerated

climate change transition worldwide which would have an accelerated negative effect on the demand for fossil fuels,

including LNG, and thus transportation of LNG;

•our financial condition and liquidity, including our ability to repay or refinance our indebtedness and obtain

financing in the future to fund capital expenditures, acquisitions and other general corporate activities;

•our ability to enter into and successfully deliver our vessels under time charters or other employment arrangements

for our vessels after our current charters expire and our ability to earn income in the spot market (which includes

vessel employment under single voyage spot charters and time charters with an initial term of less than six months);

•our ability to compete successfully for future chartering opportunities and newbuilding opportunities (if any);

•estimated future maintenance and replacement capital expenditures;

•the expected cost of, and our ability to comply with, governmental regulations, including environmental regulations,

maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable

to our business;

•customers’ increasing emphasis on environmental and safety concerns;

•availability of and ability to maintain skilled labor, vessel crews and management;

•our anticipated incremental general and administrative expenses as a publicly traded company;

•business disruptions, including supply chain disruption and congestion, due to natural or other disasters or

otherwise;

•potential physical disruption of shipping routes due to accidents, climate-related incidents, and public health threats;

and

•our ability to maintain relationships with major LNG producers and traders.

Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict

and are subject to risks and uncertainties that are described more fully in "Item 3. Key Information—D. Risk Factors." Any of

these factors or a combination of these factors could materially affect our future results of operations and the ultimate accuracy

of the forward-looking statements. Factors that might cause future results to differ include, but are not limited to, the following:

•changes in governmental rules and regulations or actions taken by regulatory authorities including the

implementation of new environmental regulations;

•fluctuations in currencies and interest rates and the impact of the discontinuance of the London Interbank Offered

Rate for US Dollars, or LIBOR, after June 30, 2023 on any of our debt referencing LIBOR in the interest rate;

•changes in economic and competitive conditions affecting our business, including market fluctuations in charter

rates and charterers' abilities to perform under existing time charters;

•shareholders’ reliance on the Company to enforce the Company’s rights against contract counterparties;

•dependence on the ability of the Company’s subsidiaries to distribute funds to satisfy financial obligations and make

dividend payments;

•the length and severity of epidemics and pandemics, including the novel coronavirus (“COVID-19”) and its impact

on across our business on demand, operations in China and the Far East and knock-on impacts to our global

operations;

•potential liability from future litigation and potential costs due to environmental damage and vessel collisions;

•potential liability from future litigation, related to claims raised by public-interest organizations or activism with

regard to failure to adapt or mitigate climate impact;

•the arresting or attachment of one or more of the Company’s vessels by maritime claimants;

•potential requisition of the Company’s vessels by a government during a period of war or emergency;

•treatment of the Company as a “passive foreign investment company” by U.S. tax authorities;

•being required to pay taxes on U.S. source income;

•the Company’s operations being subject to economic substance requirements;

•the potential for shareholders to not be able to bring a suit against the Company or enforce a judgement obtained

against the Company in the United States;

•the failure to protect the Company’s information systems against security breaches, or the failure or unavailability of

these systems for a significant period of time;

•the impact of adverse weather and natural disasters;

•potential liability from safety, environmental, governmental and other requirements and potential significant

additional expenditures related to complying with such regulations;

•any non-compliance with the amendments by the International Maritime Organization, the United Nations agency

for maritime safety and the prevention of pollution by vessels, or IMO, (the amendments hereinafter referred to as

IMO 2020) to Annex VI to the International Convention 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, which will reduce the maximum amount of sulfur that vessels may emit into the air and applies to us as

January 1, 2020;

•technological innovation in the sector in which we operate and quality and efficiency requirements from customers;

•increasing scrutiny and changing expectations with respect to environmental, social and governance policies;

•the impact of public health threats and outbreaks of other highly communicable diseases;

•technology risk associated with energy transition and fleet/systems renewal including in respect of alternative

propulsion systems;

•the impact of port or canal congestion;

•the length and number of off-hire periods; and

•other factors described in "Item 3. Key Information—D. Risk Factors" in this annual report.

You should not place undue reliance on forward-looking statements contained in this annual report because they are

statements about events that are not certain to occur as described or at all. All forward-looking statements in this annual report

are qualified in their entirety by the cautionary statements contained in this annual report. These forward-looking statements are

not guarantees of our future performance, and actual results and future developments may vary materially from those projected

in the forward-looking statements.

Except to the extent required by applicable law or regulation, we undertake no obligation to release publicly any

revisions to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect

the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these

factors. Further, we cannot assess the effect of each such factor on our business or the extent to which any factor, or

combination of factors, may cause actual results to be materially different from those contained in any forward-looking

statement.

PART I

ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.KEY INFORMATION

Unless otherwise indicated, the terms "FLEX LNG," "we," "us," "our," the "Company" and the "Group" refer to FLEX

LNG Ltd. and its consolidated subsidiaries.

We use the term "LNG" to refer to liquefied natural gas, and we use the term "cbm" to refer to cubic meters in

describing the carrying capacity of the vessels in our fleet. Unless otherwise indicated, all references to "U.S. dollars," "USD,"

"dollars," "US$" and "$" in this annual report are to the lawful currency of the United States of America, references to

"Norwegian Kroner," and "NOK" are to the lawful currency of Norway, references to "Great British Pounds," and "GBP" are to

the lawful currency of the United Kingdom and references to "Swiss Franc" and "CHF" are to the lawful currency of

Switzerland.

The consolidated financial statements included in this annual report have been prepared in accordance with Generally

Accepted Accounting Principles in the United States of America, or U.S. GAAP.

A.[Reserved]

B.Capitalization and Indebtedness

Not applicable.

C.Reasons for the offer and use of Proceeds

Not applicable.

D.Risk Factors

The following summarizes the risks that may materially affect our business, financial condition or results of

operations. The occurrence of any of the events described in this section could significantly and negatively affect our business,

financial condition, operating results or the trading price of our securities.

Risks Related to Our Industry

Charter hire rates for LNG vessels are volatile and may decrease in the future, which may adversely affect our earnings,

revenue and profitability and our ability to comply with our loan covenants.

Substantially all of our revenues are derived from a single market, the LNG carrier segment, and therefore our

financial results depend on chartering activities and developments in this segment. The LNG shipping industry is cyclical with

attendant volatility in charter hire rates and profitability. The LNG charter market, from which we derive and plan to continue

to derive our revenues, is expected to have demand increased by 5% in 2022 to about 399 million tons following a projected 6%

gain. The degree of charter hire rate volatility among different types of LNG vessels has varied widely, and time charter and

spot market rates for LNG vessels have in the recent past declined below operating costs of vessels.

Fluctuations in charter rates result from changes in the supply and demand for vessel capacity and changes in the

supply and demand for the major commodities carried on water internationally. Because the factors affecting the supply and

demand for vessels are outside of our control and are unpredictable, the nature, timing, direction and degree of changes in

charter rates are also unpredictable. Since we charter our vessels principally in the spot market, we are exposed to the cyclical

nature and volatility of the spot market. Spot market charter hire rates may fluctuate significantly based upon available charters

and the supply of and demand for seaborne shipping capacity, and we may be unable to keep our vessels fully employed in

these short-term markets. Alternatively, charter rates available in the spot market may be insufficient to enable our vessels to

operate profitably. A significant decrease in charter rates would also affect asset values and adversely affect our profitability,

cash flows and our ability to pay dividends, if any.

Furthermore, a significant decrease in charter rates would cause asset values to decline and we may have to record an

impairment charge in our consolidated financial statements which could adversely affect our financial results.

Factors that may influence demand for vessel capacity include:

•supply of and demand for LNG;

•the price of LNG;

•changes in the exploration or production of LNG;

•competition from, supply of and demand for alternative sources of energy;

•the location of regional and global exploration, production and manufacturing facilities;

•the location of consuming regions for LNG;

•the globalization of production and manufacturing;

•global and regional economic and political conditions and developments, armed conflicts, including the recent

conflicts between Russia and Ukraine, which remain ongoing as of the date of this annual report and terrorist

activities, trade wars, tariffs, embargoes and strikes;

•disruptions and developments in international trade;

•changes in seaborne and other transportation patterns, including the distance LNG is transported by sea;

•changes in governmental and maritime self-regulatory organizations’ rules and regulations or actions taken by

regulatory authorities;

•environmental concerns and uncertainty around new regulations in relation to, amongst others, new technologies

which may delay the ordering of new vessels;

•currency exchange rates, most importantly versus the US Dollar; and

•pandemics, such as the COVID-19 outbreak, and other diseases and viruses.

Demand for our LNG vessels is dependent upon economic growth in the world's economies, seasonal and regional

changes in demand, changes in the capacity of the global LNG fleet and the sources and supply of LNG transported by sea. The

capacity of the global LNG vessels fleet seems likely to increase and economic growth may not resume in areas that have

experienced a recession or continue in other areas. As such, adverse economic, political, social or other developments could

have a material adverse effect on our business and operating results.

Factors that influence the capacity capacity of the global LNG fleet, which we reference herein as the "supply of vessel

capacity" include:

•number of newbuilding orders and deliveries; as may be impacted by the availability of financing for shipping

activity;

•the number of shipyards and ability of shipyards to deliver vessels;

•scrapping of older vessels;

•speed of vessel operation;

•vessel casualties, which may include but are not limited to serious injury, loss or material damage to, grounding or

disabling of a vessel;

•the degree of recycling of older vessels, depending, among other things, on recycling rates and international

recycling regulations;

•number of vessels that are out of service, namely those that are laid up, dry-docked, awaiting repairs or otherwise

not available for hire or blocked in port or canal congestions;

•availability of financing for new vessels and shipping activity;

•business disruptions, including supply chain disruptions and congestion, due to natural and other disasters, including

the COVID-19 pandemic, outside our control;

•changes in national or international regulations that may effectively cause reductions in the carrying capacity of

vessels or early obsolescence of tonnage; and

•environmental concerns and uncertainty around new regulations in relation to, amongst others, new technologies

which may delay, amongst other things, the ordering of new vessels.

In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and

laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, costs of bunkers and other operating

costs, costs associated with classification society surveys, normal maintenance costs, insurance coverage costs, the efficiency

and age profile of the existing LNG fleet in the market, and government and industry regulation of maritime transportation

practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for

shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of

changes in industry conditions.

Further, the market may fluctuate widely based on a variety of factors including changes in overall market movements,

political and economic events, wars, acts of terrorism, natural disasters (including disease, epidemics and pandemics) and

changes in interest rates or inflation rates.

Global economic conditions may negatively impact the LNG shipping industry and we face risks attendant in economic and

regulatory conditions around the world.

As the shipping industry is highly dependent on the availability of credit to finance and expand operations, it can be

negatively affected by decline in available credit facilities. Any weakening in global economic conditions may have a number

of adverse consequences for LNG and other shipping sectors, including, among other things:

•low charter rates, particularly for vessels employed in the spot market (which includes vessel employment under

single voyage spot charters and time charters with an initial term of less than six months);

•decreases in the market value of LNG vessels and limited second-hand market for the sale of vessels;

•limited financing for vessels;

•widespread loan covenant defaults; and

•declaration of bankruptcy by certain vessel operators, vessel owners, shipyards and charterers.

The occurrence of one or more of these events could have a material adverse effect on our business, results of

operations, cash flows, financial condition and ability to pay dividends, if any.

We face risks attendant to changes in economic environments, changes in interest rates, instability in the banking and

securities markets and trade regulation around the world, and the development of the ongoing COVID-19 pandemic, among

other factors. Major market disruptions and adverse changes in market conditions and regulatory climate in China, the United

States, the European Union and worldwide may adversely affect our business or impair our ability to borrow amounts under

credit facilities or any future financial arrangements.

Chinese LNG imports have accounted for the majority of global LNG transportation growth annually over the last

years, with recent demand growth driven by stronger LNG imports to China. Before the global economic financial crisis that

began in 2008, China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had

a significant impact on shipping demand. While the growth rate of China's GDP for the year ended December 31, 2021, was

8.1%, up from a growth rate of approximately 2.2% for the year ended December 31, 2020, it still remains well below pre-2008

levels. Accordingly, our financial condition and results of operations, as well as our future prospects, would likely be hindered

by an economic downturn in any of these countries or geographic region.While global economic activity levels, led by China,

have improved, the outlook for China and the rest of the world remains uncertain and is highly dependent on the path of

COVID-19 and measures taken by governments around the world in response to it. In addition, the International Monetary Fund

has warned that continuing trade tensions, including significant tariff increases, between the United States and China could

derail recovery from the impacts of COVID-19.

In recent years there have been continuing trade tensions, including significant tariff increases, between the United

States and China. Protectionist developments, or the perception that they may occur, may have a material adverse effect on

global economic conditions, and may significantly 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 required to 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, voyage costs 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 make timely 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.

While global economic conditions have generally improved, any renewed adverse economic and governmental factors,

together with the concurrent volatility in charter rates and vessel values, may have a material adverse effect on our results of

operations, financial condition and cash flows and could cause the price of our ordinary shares to decline. An extended period

of deterioration in the outlook for the world economy could reduce the overall demand for our services and could also adversely

affect our ability to obtain financing on acceptable terms or at all.

We are dependent on spot charterers and any decrease in spot charter rates in the future may adversely affect our earnings

and ability to pay dividends, if any..

As of March 15, 2022, four of our 13 vessels, which are owned, leased or chartered-in by us, were employed in the

spot market or on short-term or variable rate time charters, and we are therefore exposed to fluctuations in spot market charter

rates.

Although the number of vessels in our Fleet that participate in the spot market will vary from time to time, we

anticipate that a significant portion of our fleet will participate in this market. As a result, our financial performance will be

significantly affected by conditions in the LNG spot market and only our vessels that operate under fixed-rate time charters

may, during the period such vessels operate under such time charters, provide a fixed source of revenue to us.

Historically, the LNG spot freight market has been volatile as a result of the many conditions and factors that can

affect the price, supply of and demand for LNG capacity. Weak global economic trends may further reduce demand for

transportation of LNG cargoes over longer distances, which may materially affect our revenues, profitability and cash flows.

The spot charter market may fluctuate significantly based upon supply of and demand for vessels and cargoes. The successful

operation of our vessels in the competitive spot charter market depends upon, among other things, obtaining profitable spot

charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up

cargo. The spot market is volatile and there have been periods when spot rates have declined below the operating cost of

vessels. If future spot charter rates decline, then we may be unable to operate our vessels trading in the spot market profitably,

or meet our obligations, including payments on indebtedness, or to pay dividends in the future. Furthermore, as charter rates for

spot charters are fixed for a single voyage, which may last up to several weeks during periods in which spot charter rates are

rising, we will generally experience delays in realizing the benefits from such increases.

Our ability to renew the charters on our vessels on the expiration or termination of our current charters, or on vessels

that we may acquire in the future, or the charter rates payable under any replacement charters and vessel values will depend

upon, among other things, economic conditions in the sectors in which our vessels operate at that time, changes in the supply

and demand for vessel capacity and changes in the supply and demand for the seaborne transportation of energy resources.

Risks involved with operating ocean-going vessels could result in the loss of life or harm to our seafarers, environmental

accidents or otherwise affect our business and reputation, which could have a material adverse effect on our results of

operations and financial condition.

The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of:

•loss of life or harm to seafarers;

•an accident involving a vessel resulting in damage to the asset or total loss of the same;

•a marine disaster;

•terrorism;

•piracy or robbery;

•environmental accidents;

•cargo and property losses and damage; and

•business interruptions caused by mechanical failure, human error, war, political action in various countries, labor

strikes, or adverse weather conditions.

Any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels

in an environmental disaster may harm our reputation as a safe and reliable LNG operator.

Political instability, terrorist or other attacks, war, international hostilities and global public health threats can affect the

seaborne transportation industry, which could adversely affect our business.

We conduct most of our operations outside the United States, and our business, results of operations, cash flows,

financial condition and ability to pay dividends, if any, in the 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, stabilizing growth in China, geopolitical events, such as continuing threat of terrorist attacks around the world,

continuing instability and conflicts and other recent occurrences in the Middle East, Ukraine and in other geographic areas and

countries, and stabilizing growth in China, as well as the public health concerns stemming from the ongoing COVID-19

outbreak.

In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt

international shipping, particularly in the Arabian Gulf region and most recently in the Black Sea in connection with the recent

conflicts between Russia and Ukraine. Acts of terrorism and piracy have also affected vessels trading in regions such as the

South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact

on our future performance, results of operation, cash flows and financial position.

In February of 2022, President Biden and several European leaders announced various economic sanctions against

Russia in connection with the aforementioned conflicts in the Ukraine region, which may adversely impact our business. Our

business could also be adversely impacted by trade tariffs, trade embargoes or other economic sanctions that limit trading

activities by the United States or other countries against countries in the Middle East, Asia or elsewhere as a result of terrorist

attacks, hostilities or diplomatic or political pressures.

On March 8, 2022 President Biden issued an executive order prohibiting the import of certain Russian energy products

into the United States, including crude oil, petroleum, petroleum fuels, oils, liquefied natural gas and coal. Additionally, the

executive order prohibits any investments in the Russian energy sector by US persons, among other restricitions.

In addition, public health threats, such as COVID-19, influenza and other highly communicable diseases or viruses,

outbreaks of which have from time to time occurred in various parts of the world in which we operate, including China, Japan

and South Korea, which may even become pandemics, such as the COVID-19 virus, could lead to a significant decrease of

demand for the transportation of LNG. Such events may also adversely impact our operations, including timely rotation of our

crews, the timing of completion of any future newbuilding projects. Delayed rotation of crew may adversely affect the mental

and physical health of our crew and the safe operation of our vessels as a consequence.

Our financial results and operations may be adversely affected by the ongoing outbreak of COVID-19, and related

governmental responses thereto.

In response to the outbreak of COVID-19 in late 2019, governments and governmental agencies around the world took

numerous actions, including travel bans, quarantines, and other emergency public health measures, and a number of countries

implemented lockdown measures, which resulted in a significant reduction in global economic activity and extreme volatility in

the global financial markets. By 2021, however many of these measures were relaxed. Nonetheless, we cannot predict whether

and to what degree emergency public health and other measures will be reinstituted in the event of any resurgence in the

COVID-19 virus or any variants thereof. If the COVID-19 pandemic continues on a prolonged basis or becomes more severe,

the adverse impact on the global economy and the rate environment for LNG and other cargo vessels may deteriorate further

and our operations and cash flows may be negatively impacted. Relatively weak global economic conditions during periods of

volatility have and may continue to have a number of adverse consequences for LNG and other shipping sectors, as we

experienced in 2020 and we may experience in the future, including, among other things:

•low charter rates, particularly for vessels employed on short-term time charters or in the spot market;

•decreases in the market value of LNG vessels and limited second-hand market for the sale of vessels;

•limited financing for vessels;

•loan covenant defaults; and

•declaration of bankruptcy by certain vessel operators, vessel owners, shipyards and charterers.

The COVID-19 pandemic and measures to contain its spread have negatively impacted regional and global economies

and trade patterns in markets in which we operate, the way we operate our business, and the businesses of our charterers and

suppliers. These negative impacts could continue or worsen, even after the pandemic itself diminishes or ends. Companies,

including us, have also taken precautions, such as requiring employees to work remotely and imposing travel restrictions, while

some other businesses have been required to close entirely. Moreover, we face significant risks to our personnel and operations

due to the COVID-19 pandemic. Our crews face risk of exposure to COVID-19 as a result of travel to ports in which cases of

COVID-19 have been reported. Our shore-based personnel likewise face risk of such exposure, as we maintain offices in areas

that have been impacted by the spread of COVID-19.

Measures against COVID-19 in a number of countries have restricted crew rotations on our vessels, which may

continue or become more severe. As a result, in 2021, we experienced and may continue to experience disruptions to our

normal vessel operations caused by increased deviation time associated with positioning our vessels to countries in which we

can undertake a crew rotation in compliance with such measures. We have had and expect to continue to have increased

expenses due to incremental fuel consumption and days in which our vessels are unable to earn revenue in order to deviate to

certain ports on which we would ordinarily not call during a typical voyage. We may also incur additional expenses associated

with testing, personal protective equipment, quarantines, and travel expenses such as airfare costs in order to perform crew

rotations in the current environment. In 2021, delays in crew rotations have also caused us to incur additional costs related to

crew bonuses paid to retain the existing crew members on board and may continue to do so.

Moreover, COVID-19 and governmental and other measures related to it have led to a highly difficult environment in

which to acquire and dispose of vessels given difficulty to physically inspect vessels. The impact of COVID-19 has also

resulted in reduced industrial activity globally, and more specifically, in China with temporary closures of factories and other

facilities, labor shortages and restrictions on travel.

This and future epidemics may affect personnel operating payment systems through which we receive revenues from

the chartering of our vessels or pay for our expenses, resulting in delays in payments. We continue to focus on our employees'

well-being, whilst making sure that our operations continue undisrupted and at the same time, adapting to the new ways of

operating. As such employees are encouraged and in certain cases required to operate remotely which significantly increases the

risk of cyber security attacks.

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 could have a material adverse effect on our business, results of

operations, cash flows, financial condition, value of our vessels and ability to pay dividends.

The price of our ordinary shares may be volatile.

The price of our ordinary shares may be volatile and may fluctuate due to factors including:

•our payment of dividends to our shareholders;

•actual or anticipated fluctuations in quarterly and annual results;

•fluctuations in the seaborne transportation industry, including fluctuations in the LNG carrier market;

•mergers and strategic alliances in the shipping industry;

•changes in governmental regulations or maritime self-regulatory organization standards;

•shortfalls in our operating results from levels forecasted by securities analysts;

•announcements concerning us or our competitors;

•the failure of securities analysts to publish research about us, or analysts making changes in their financial estimates;

•general economic conditions;

•terrorist acts;

•business interruptions caused by the COVID-19 pandemic;

•future sales of our shares or other securities;

•investors’ perception of us and the LNG shipping industry;

•the general state of the securities market; and

•other developments affecting us, our industry or our competitors.

Securities markets worldwide are experiencing significant price and volume fluctuations, especially due to factors

relating to the COVID-19 pandemic. The market price for our ordinary shares is volatile. The trading price of our ordinary

shares as of December 31, 2021 was $23.49 per share and as of March 15, 2022, was $20.78 per share. 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 market price of our ordinary 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 terms acceptable to us or at all.

While we do not currently, we may conduct a substantial amount of business in China. The legal system in China has

inherent uncertainties that could have a material adverse effect on our business, financial condition and results of

operations.

The Chinese legal system is based on written statutes and their legal interpretation by the Standing Committee of the

National People's Congress. Prior court decisions may be cited for reference but have limited precedential value. Since 1979,

the Chinese government has been developing a comprehensive system of commercial laws dealing with economic matters such

as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and

regulations are relatively new, there is a general lack of internal guidelines or authoritative interpretive guidance and because of

the limited number of published cases and their non-binding nature, interpretation and enforcement of these laws and

regulations involve uncertainties. Any administrative and court proceedings in China may be protracted, resulting in substantial

costs and diversion of resources and management attention. Since Chinese administrative and court authorities have significant

discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of

administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems.

To the extent our charters, shipbuilding contracts and financing agreements that are governed by English law, if we are

required to commence legal proceedings against a customer, a shipbuilder or a lender based in China, we may have difficulties

in enforcing any judgment rendered by an English court (or other non-Chinese court) in China.

Changes in laws and regulations, including with regards to tax matters, and their implementation by local authorities

could affect our vessels that are either chartered to Chinese customers or that call to Chinese ports and our vessels that undergo

dry-docking, or to which we install scrubbers, at Chinese shipyards, and the financial institutions with whom we have entered

into financing agreements, could have a material adverse effect on our business, results of operations and financial condition.

If our vessels call at ports located in countries or territories that are the subject of sanctions or embargoes imposed by the

U.S. government, the European Union, the United Nations or governmental authorities, it could lead to monetary fines or

other penalties and adversely affect our reputation and the market for our ordinary shares and its trading price.

None of our vessels called on ports located in countries or territories that are the subject of country-wide or territory-

wide sanctions or embargoes imposed by the U.S. government or other applicable governmental authorities (“Sanctioned

Jurisdictions”) in 2021 in violation of applicable sanctions or embargo laws. Although we intend to maintain compliance with

all sanctions and embargo laws during 2021, and we endeavor to take precautions reasonably designed to mitigate such risks, it

is possible that, in the future, our vessels may call on ports located in Sanctioned Jurisdictions on charterers’ instructions and/or

without our consent. If such activities result in a violation of sanctions or embargo laws, we could be subject to monetary fines,

penalties, or other sanctions, and our reputation and the market for our ordinary shares could be adversely affected.

The applicable 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 such sanctions and embargo laws and regulations may be amended

or expanded over time. Current or future counterparties of ours may be affiliated with persons or entities that are or may be in

the future the subject of sanctions or embargoes imposed by the United States, EU, and/or other international bodies. If we

determine that such sanctions require us to terminate existing or future contracts to which we, or our subsidiaries, are party or if

we are found to be in violation of such applicable sanctions, our results of operations may be adversely affected, or we may

suffer reputational harm.

Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations

in 2021, and intend to maintain such compliance, there can be no assurance 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

could result 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, or being required, to divest their interest, or not to invest, in

us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding

securities of companies that have contracts with countries or territories identified by the U.S. government as state sponsors of

terrorism. The determination by these investors not to invest in, or to divest from, our ordinary shares may adversely affect the

price at which our ordinary shares trade. Moreover, our charterers may violate applicable sanctions and embargo laws and

regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our

reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other

activities, such as entering into charters with individuals or entities that are not controlled by the governments of countries or

territories that are the subject of certain U.S. sanctions or embargo laws, or engaging in operations associated with those

countries or territories pursuant to contracts with third parties that are unrelated to those countries or territories or entities

controlled by their governments. Investor perception of the value of our ordinary shares may be adversely affected by the

consequences of war, the effects of terrorism, civil unrest and governmental actions in countries or territories that we operate in.

Compliance with safety and other vessel requirements imposed by classification societies may be costly and could reduce our

net cash flows and net income.

A classification society authorized by the country of registry of a commercial vessel must certify such vessel as being

"in class" and safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel

and the Safety of Life at Sea Convention. Most insurance underwriters make it a condition 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

Classification Societies, 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 July 1, 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 or DNV GL).

Additionally a vessel must undergo annual surveys, intermediate surveys, dry-dockings or special surveys.

Alternatively, a vessel's machinery may be placed on a continuous survey cycle, under which the machinery would be surveyed

periodically over a five-year period. We expect our vessels to be on special survey cycles for hull inspection and continuous

survey cycles for machinery inspection.

Every vessel is also required to be dry-docked every five years for inspection of the underwater parts of the vessel. If

any vessel does not maintain its class and/or fails any annual survey, intermediate survey, dry-docking or special survey, the

vessel will be unable to carry 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 carry cargo or be employed, or any such violation

of covenants, could have a material adverse impact on our financial condition and results of operations.

The LNG shipping industry is subject to substantial environmental and other regulations, which may significantly limit our

operations or increase our expenses.

Our operations are materially affected by extensive and changing international, national, state and local environmental

laws, regulations, treaties, conventions and standards which are in force in international waters, or in the jurisdictional waters of

the countries in which our ships operate and in the countries in which our ships are registered. These requirements include those

relating to equipping and operating ships, providing security and minimizing or addressing impacts on the environment from

ship operations. We may incur substantial costs in complying with these requirements, including costs for ship modifications

and changes in operating procedures. We also could incur substantial costs, including clean-up costs, civil and criminal

penalties and sanctions, the suspension or termination of operations and third-party claims as a result of violations of, or

liabilities under, such laws and regulations.

In addition, these requirements can affect the resale value or useful lives of our ships, require a reduction in cargo

capacity, necessitate ship modifications or operational changes or restrictions or lead to decreased availability of insurance

coverage for environmental matters. They could further result in the denial of access to certain jurisdictional waters or ports or

detention in certain ports. We are required to obtain governmental approvals and permits to operate our ships. Delays in

obtaining such governmental approvals may increase our expenses, and the terms and conditions of such approvals could

materially and adversely affect our operations.

Additional laws and regulations may be adopted that could limit our ability to do business or increase our operating

costs, which could materially and adversely affect our business. For example, new or amended legislation relating to ship

recycling, sewage systems, emission control (including emissions of greenhouse gases and other pollutants) as well as ballast

water treatment and ballast water handling may be adopted. The United States has recently enacted ballast water management

system legislation and regulations that require more stringent controls of air and water emissions from ocean-going ships. Such

legislation or regulations may require additional capital expenditures or operating expenses (such as increased costs for low-

sulfur fuel) in order for us to maintain our ships' compliance with international and/or national regulations. We also may

become subject to additional laws and regulations if we enter new markets or trades.

We also believe that the heightened environmental, quality and security concerns of insurance underwriters, regulators

and charterers will generally lead to additional regulatory requirements, including enhanced risk assessment and security

requirements, as well as greater inspection and safety requirements on all LNG carriers in the marine transportation market.

These requirements are likely to add incremental costs to our operations, and the failure to comply with these requirements may

affect the ability of our ships to obtain and, possibly, recover from, insurance policies or to obtain the required certificates for

entry into the different ports where we operate.

Some environmental laws and regulations, such as the U.S. Oil Pollution Act of 1990, or "OPA", provide for

potentially unlimited joint, several and strict liability for owners, operators and demise or bareboat charterers for oil pollution

and related damages. OPA applies to discharges of any oil from a ship in U.S. waters, including discharges of fuel and

lubricants from an LNG carrier, even if the ships do not carry oil as cargo. In addition, many states in the United States

bordering a navigable waterway have enacted legislation providing for potentially unlimited strict liability without regard to

fault for the discharge of pollutants within their waters. We also are subject to other laws and conventions outside the United

States that provide for an owner or operator of LNG carriers to bear strict liability for pollution, such as the International

Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984, and 1992,

and amended in 2000, or the CLC.

Some of these laws and conventions, including OPA and the CLC, may include limitations on liability. However, the

limitations may not be applicable in certain circumstances, such as where a spill is caused by a ship owner's or operator's

intentional or reckless conduct. These limitations are also subject to periodic updates and may otherwise be amended in the

future.

Compliance with OPA and other environmental laws and regulations also may result in ship owners and operators

incurring increased costs for additional maintenance and inspection requirements, the development of contingency

arrangements for potential spills, obtaining mandated insurance coverage and meeting financial responsibility requirements.

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 International Maritime Organization (the

"IMO"), have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These

regulatory measures may include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards

and incentives or mandates for renewable energy. More specifically, on October 27, 2016, the IMO’s Marine Environment

Protection Committee (the "MEPC"), announced its decision 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. Since January 1, 2020, ships

must either remove sulfur from emissions or buy fuel with low sulfur content, which may lead to increased costs and

supplementary investments for 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 by liquefied natural gas, which may not be a viable option due to the lack of supply network and high

costs involved in this process. Costs of compliance 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.

Maritime shipping will also be included in the Emission Trading Scheme (the "ETS") as of 2023 with a phase-in

period. It is expected that shipowners will need to purchase and surrender a number of emission allowances that represent their

Measurement Recording and Verification-recorded carbon emission exposure for a specific reporting period. The person or

organization responsible for the compliance with the EU ETS should be the shipping company, defined as the shipowner or any

other organization or person, such as the manager or the bareboat charterer, that has assumed the responsibility for the operation

of the ship from the shipowner. Compliance with the Maritime EU ETS will result in additional compliance and administration

costs to properly incorporate the provisions of the Directive into our business routines. Additional EU regulations which are

part of the EU’s Fit-for-55, could also affect our financial position in terms of compliance and administration costs when they

take effect.

Territorial taxonomy regulations in geographies where we are operating and are regulatorily liable, such as EU

Taxonomy, might jeopardize the level of access to capital. For example, EU has already introduced a set of criteria for

economic activities which should be framed as ‘green’, called EU Taxonomy. As long as we are an EU-based company meeting

the NFRD prerequisites, we will be eligible for reporting our Taxonomy eligibility and alignment. Based on the current version

of the Regulation, companies that own assets shipping fossil fuels are considered as not aligned with EU Taxonomy. The

outcome of such provision might be either an increase in the cost of capital and/or gradually reduced access to financing as a

result of financial institutions’ compliance with EU Taxonomy.

Since January 1, 2020, ships must either remove sulfur from emissions or buy fuel with low sulfur content, which may

lead to increased costs and supplementary investments for 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 by liquefied natural gas, which may not be a viable option due to the lack of supply

network and high costs involved in this process. Costs of compliance 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 Framework Convention on Climate Change, which required adopting countries to

implement national programs to reduce emissions of certain gases, or the Paris Agreement (discussed further below), 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 climate change affects the propulsion options in subsequent vessel designs and could

increase our costs related to acquiring new vessels, operating and maintaining our existing vessels and require 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 also adversely 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 in the future or create

greater incentives for use of alternative energy sources. In addition, the physical effects of climate change, including changes 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 the oil 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 of access to, or detention in, certain ports.

The operation of our vessels is affected by the requirements set forth in the IMO's International Safety Management

Code (the "ISM Code"). The ISM Code requires shipowners, ship managers and bareboat charterers to develop and maintain an

extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth

instructions and procedures for safe operation and describing procedures for dealing with emergencies. If we fail to comply

with the ISM Code, we may be subject to increased liability, or may invalidate existing insurance or decrease available

insurance coverage for our affected vessels, and such failure may result in a denial of access to, or detention in, certain ports.

The USCG and European Union authorities enforce compliance with the ISM and International Ship and Port Facility Security

Code (the “ISPS Code”) and prohibit non-compliant vessels from trading in U.S. and European Union ports. This could have a

material adverse effect on our future performance, results of operations, cash flows and financial position. Given that the IMO

continues to review and introduce new regulations, it is impossible 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.

Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying

with such conventions, laws and regulations or the impact thereof on the resale prices or useful lives of our vessels. Additional

conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing

business and which may materially adversely affect our operations. We are required by various governmental and quasi-

governmental agencies to obtain certain permits, licenses, certificates, and financial assurances with respect to our operations.

Please see “Item 4. Information on the Company - B. Business Overview - Environmental and Other Regulations in

the Shipping Industry” for a discussion of the environmental and other regulations applicable to us.

Safety, environmental and other governmental and other requirements expose us to liability, and compliance with current

and future regulations could require significant additional expenditures, which could have a material adverse effect on our

business and financial results.

Our operations are affected by extensive and changing international, national, state and local laws, regulations, treaties,

conventions and standards in force in international waters, the jurisdictions in which our LNG vessels operate, and the country

or countries in which such vessels are registered, including those governing the management and disposal of hazardous

substances and wastes, the cleanup of oil spills and other contamination, air emissions, and water discharges and ballast and

bilge water management. These regulations include, but are not limited to, the U.S. Oil Pollution Act of 1990, or OPA,

requirements of the U.S. Coast Guard, or the USCG, and the U.S. Environmental Protection Agency, or EPA, the U.S.

Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, the U.S. Clean Water Act, the

U.S. Maritime Transportation Security Act of 2002, and regulations of the International Maritime Organization, or IMO,

including the International Convention for the Safety of Life at Sea of 1974, or SOLAS, the International Convention for the

Prevention of Pollution from Ships of 1973, or MARPOL, including the designation thereunder of Emission Control Areas, or

ECAs, the International Convention on Civil Liability for Oil Pollution Damage of 1969, or CLC, and the International

Convention on Load Lines of 1966. In particular, IMO’s MEPC 73, amendments to Annex VI prohibiting the carriage of

bunkers above 0.5% sulfur on ships took effect March 1, 2020 and may cause us to incur substantial costs. Compliance with

these regulations could have a material adverse effect our business and financial results.

In addition, vessel classification societies and the requirements set forth in the IMO’s International Management Code

for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code, also impose significant safety and other

requirements on our vessels. In complying with current and future environmental requirements, vessel owners and operators

may also incur significant additional costs in meeting new maintenance and inspection requirements, in developing contingency

arrangements for potential spills and in obtaining insurance coverage. Government regulation of vessels, particularly in the

areas of safety and environmental requirements, can be expected to become stricter in the future and require us to incur

significant capital expenditures on our vessels to keep them in compliance, or even to recycle or sell certain vessels altogether.

Many of these requirements are designed to reduce the risk of oil spills and other pollution, and our compliance with

these requirements can be costly. These requirements can also affect the resale value or useful lives of our vessels, require

reductions in cargo capacity, ship modifications or operational changes or restrictions, lead to decreased availability of

insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or ports, or

detention in certain ports.

Under local, national and foreign laws, as well as international treaties and conventions, we could incur material

liabilities, including cleanup obligations, natural resource damages and third-party claims for personal injury or property

damages, in the event that there is a release of petroleum or other hazardous substances from our vessels or otherwise in

connection with our current or historic operations. We could also incur substantial penalties, fines and other civil or criminal

sanctions, including in certain instances seizure or detention of our vessels, as a result of violations of or liabilities under

environmental laws, regulations and other requirements. Environmental laws often 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 at fault. For example, OPA affects all vessel owners shipping oil to, from or within the United States. Under OPA,

owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil in U.S. waters,

including the 200 nautical mile exclusive economic zone around the United States. Similarly, the CLC, which has been adopted

by most countries outside of the United States, imposes liability for oil pollution in international waters. OPA expressly permits

individual states to impose their own liability regimes with regard to hazardous materials and oil pollution incidents occurring

within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA. Coastal states in the

United States have enacted pollution prevention liability and response laws, many providing for unlimited liability.

Furthermore, the 2010 explosion of the drilling rig Deepwater Horizon, which is unrelated to the Company, and the subsequent

release of oil into the Gulf of Mexico, or other events, has resulted in increased, and may result in further, regulation of the

shipping and offshore industries and modifications to statutory liability schemes, which could have a material adverse effect on

our business, financial condition, results of operations and cash flows. An oil spill could also 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, and could harm our reputation with current or potential

charterers of our vessels. We are required to satisfy insurance and financial responsibility requirements for potential oil

(including marine fuel) spills and other pollution incidents. Although we have arranged insurance to cover certain

environmental risks, 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 of operations, cash flows and financial condition and available

cash.

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's ballast water. Depending on the date of the International Oil

Pollution Prevention, or IOPP renewal survey, existing vessels constructed before September 8, 2017 must comply with the

updated D-2 standard on or after September 8, 2019. For most vessels, compliance with the D-2 standard will involve installing

on-board systems to treat ballast water and eliminate unwanted organisms. Ships constructed on or after September 8, 2017 are

to comply with the D-2 standards upon delivery. All our vessels comply with the updated guideline.

Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit, or VGP,

program and U.S. National Invasive Species Act, or NISA, are currently in effect to regulate ballast discharge, exchange and

installation, the Vessel Incidental Discharge Act, or VIDA, which was signed into law on December 4, 2018, requires that the,

U.S. Environmental Protection Agency, or EPA develop national standards of performance for approximately 30 discharges,

similar to those found in the VGP within two years. On October 26, 2020, the EPA published a Notice of Proposed Rulemaking

for Vessel Incidental Discharge National Standards of Performance under VIDA. By approximately 2022, the U.S. Coast

Guard, or USCG, must develop corresponding implementation, compliance and enforcement regulations regarding ballast

water. The new regulations could require the installation of new equipment, which may cause us to incur substantial costs.

Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our customers' or our cash

flows.

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 or damages. In many jurisdictions, a maritime lien holder may

enforce its lien by "arresting" or "attaching" a vessel through judicial or foreclosure proceedings. The arrest or attachment of

one or more of our vessels could interrupt the cash flow of the charterer and/or our cash flow and require us to pay a significant

amount of money to have the arrest lifted, which would have an adverse effect on our financial condition and results of

operations.

In addition, in jurisdictions where the "sister ship" theory of liability applies, such as South Africa, a claimant may

arrest the vessel that 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 "sister ship" liability laws, claims may be asserted against us or any of our

vessels for liabilities of other vessels that we own.

Governments 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 and becomes the owner. Such 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 effectively becomes

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 a material adverse effect on our business, results of operations, cash flows,

financial condition and ability to pay dividends.

Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our

Environmental, Social and Governance (“ESG”) policies may impose additional costs on us or expose us to additional risks.

Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups,

certain institutional investors, investment funds, lenders and other market participants are increasingly focused on ESG

practices and in recent years have placed increasing importance on the implications and social cost of their investments. The

increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may

decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices. Companies

which do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are

evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of

whether there is a legal requirement to do so, may suffer from reputational damage, costs related to litigation, 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 energy practices, 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 and future investors and

lenders remain invested in us and make further investments in us, especially given the highly focused and specific trade of LNG

transportation in which we are engaged. Such ESG corporate transformation calls for an increased resource allocation to serve

the necessary changes in that sector, increasing costs and capital expenditure. If we do not meet these standards, our business

and/or our ability to access capital could be harmed.

Additionally, certain investors and lenders may exclude LNG shipping companies, such as us, from their investing

portfolios altogether due to environmental, social and governance factors. 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. If

those 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, which would 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 additional costs

and require additional resources to monitor, report and comply with wide ranging ESG requirements. The occurrence of any of

the foregoing could have a material adverse effect on our business and financial condition.

Technological innovation and quality and efficiency requirements from our customers could reduce our charterhire income

and the value of our vessels.

Our customers, in particular those in the oil industry, have a high and increasing focus on quality and compliance

standards with their suppliers across the entire supply chain, including the shipping and transportation segment. Our continued

compliance with these standards and quality requirements is vital for our operations. The charterhire rates and the value and

operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and

physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes

the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel’s

physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. We face

competition from companies with more modern vessels with more fuel efficient designs than our vessels, and if new LNG

carriers are built that are more efficient or more flexible or have longer physical lives than the current eco vessels, competition

from the current eco vessels and any more technologically advanced vessels could adversely affect the amount of charterhire

payments we receive for our vessels and the resale value of our vessels could significantly decrease. Similarly, technologically

advanced vessels are needed to comply with environmental laws the investment in which along with the foregoing could have a

material adverse effect on our results of operations, charterhire payments and resale value of vessels. This could have an

adverse effect on our results of operations, cash flows, financial condition, and ability to pay dividends.

Risks Related to Our Business

The market values of our vessels may decline, which could limit the amount of funds that we can borrow, cause us to breach

certain financial covenants in our credit facilities, or result in an impairment charge, and cause us to incur a loss if we sell

vessels following a decline in their market value.

The fair market values of LNG vessels, including our vessels, have generally experienced high volatility and may

decline in the future. The fair market value of our vessels may increase and decrease depending on but not limited to the

following factors:

•general economic and market conditions affecting the shipping industry;

•the balance between the supply of and demand for ships of a certain type;

•competition from other shipping companies;

•the availability of ships of the required size and design;

•the availability of other modes of transportations;

•cost of newbuildings;

•shipyard capacity;

•governmental or other regulations;

•changes in environmental and other regulations that may limit the useful lives of vessels;

•distressed asset sales, including newbuilding contract sales below acquisition costs due to lack of financing;

•types, sizes and ages of vessels;

•prevailing level of charter rates;

•the need to upgrade secondhand and previously owned vessels as a result of charterer requirements; and

•technological advances in vessel design or equipment or otherwise.

During the period a vessel is subject to a charter, we might not be permitted to sell it to take advantage of increases in

vessel values without the charterer's consent. If we sell a vessel at a time when ship prices have fallen, the sale may be at less

than the vessel's carrying amount in our financial statements, with the result that we could incur a loss and a reduction in

earnings. The carrying values of our owned and leased vessels are reviewed quarterly or whenever events or changes in

circumstances indicate that the carrying amount of the vessel may no longer be recoverable. We assess recoverability of the

carrying value by estimating the future net cash flows expected to result from the vessel, including eventual disposal for owned

vessels. If the future net undiscounted cash flows and the estimated fair market value of the vessel are less than the carrying

value, an impairment loss is recorded equal to the difference between the vessel's carrying value and fair value. Any impairment

charges incurred as a result of declines in charter rates and other market deterioration could negatively affect our business,

financial condition or operating results or the trading price of our ordinary shares.

In addition, if we determine at any time that a vessel's future useful life and earnings require us to impair its value in

our financial statements, this would result in a charge against our earnings and a reduction of our shareholders' equity. If the fair

market values of our vessels decline, we may not be in compliance with certain covenants contained in our secured credit

facilities, which may result in an event of default. In such circumstances, we may not be able to refinance our debt or obtain

additional financing acceptable to us or at all. Further, if we are not able to comply with the covenants in our secured credit

facilities, and are unable to remedy the relevant breach, our lenders could accelerate our debt and foreclose on our fleet.

Conversely, if vessel values are elevated at a time when we wish to acquire additional vessels, the cost of acquisition

may increase and this could adversely affect our business, results of operations, cash flow and financial condition.

We may require additional capital in the future, which may not be available on favorable terms, or at all.

Depending on many factors, including market developments, our future earnings, value of our assets and expenditures

for any new projects, we may need additional funds. We cannot guarantee that we will be able to obtain additional financing at

all or on terms acceptable to us. If adequate funds are not available, we may have to reduce expenditures for investments in new

and existing projects, which could hinder our growth, prevent us from realizing potential revenues from prior investments and

have a negative impact on our cash flows and results of operations.

We are highly leveraged, which could significantly limit our ability to execute our business strategy and has increase the risk

of default under our debt obligations.

As of December 31, 2021, we had approximately $1,633.4 million of net outstanding indebtedness under our credit

facilities and debt securities. We cannot assure you that we will be able to generate cash flow in amounts that is sufficient to

satisfy these obligations. If we are not able to satisfy these obligations, we may have to undertake alternative financing plans or

sell our assets. In addition, debt service payments under our credit facilities may limit funds otherwise available for working

capital, capital expenditures, payment of cash distributions and other purposes. If we are unable to meet our debt obligations, or

if we otherwise default under our credit facilities, our lenders could declare the debt, together with accrued interest and fees, to

be immediately due and payable and foreclose on our fleet, which could result in the acceleration of other indebtedness that we

may have at such time and the commencement of similar foreclosure proceedings by other lenders.

Our credit facilities impose operating and financial restrictions on us that limit our ability or the ability of our

subsidiaries party thereto, as applicable, to:

•pay dividends, if any, and make capital expenditures, if there is an event of default under our credit facilities;

•incur additional indebtedness, including the issuance of guarantees, or refinance or prepay any new indebtedness,

unless certain conditions exist;

•create liens on our assets, unless otherwise permitted under our credit facilities;

•change the flag, class or management of our vessels or terminate or materially amend the management agreement

relating to each vessel;

•acquire new or sell our vessels, unless certain conditions exist;

•merge or consolidate with, or transfer all or substantially all our assets to, another person; or

•enter into a new line of business.

In addition, our loan agreements, which are secured by liens on our vessels, contain various financial covenants.

Among those covenants are requirements that relate to our financial position, operating performance and liquidity. For example,

there are financial covenants that require us to maintain (i) an equity ratio fixing a minimum value of book equity, (ii) minimum

levels of free cash, (iii) positive working capital, and (iv) collateral maintenance test, ensuring that the aggregate value of the

vessels making up the facility in question exceeds the aggregate value of the debt commitment outstanding.

Our ability to comply with the covenants and restrictions contained in our current or future credit facilities may be

affected by events beyond our control, including prevailing economic, financial and industry conditions, interest rate

developments, changes in the funding costs of our banks and changes in vessel earnings and asset valuations. If market or other

economic conditions deteriorate, our ability to comply with these covenants may be impaired. For example, the market value of

LNG vessels is likewise sensitive to, among other things, changes in the LNG market, with vessel values deteriorating in times

when charter rates for LNG vessels are falling or anticipated to fall and improving when charter rates are rising or anticipated to

rise. Such conditions may result in us not being in compliance with our loan covenants. In such a situation, unless our lenders

are willing to provide further waivers of covenant compliance or modifications to our covenants, or would be willing to

refinance our indebtedness, we may have to sell vessels in our fleet and/or seek to raise additional capital in the equity markets

in order to comply with our loan covenants. Furthermore, if the value of our vessels deteriorates significantly, we may have to

record an impairment adjustment in our financial statements, which would adversely affect our financial results and further

hinder our ability to raise capital. The fair market values of our vessels may decline, which could limit the amount of funds that

we can borrow, cause us to breach certain financial covenants in our credit facilities, or result in an impairment charge, and

cause us to incur a loss if we sell vessels following a decline in their market value.

If we are not in compliance with our covenants and are not able to obtain covenant waivers or modifications, our

lenders could require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down

our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, or they could

accelerate our indebtedness, any of which would impair our ability to continue to conduct our business. If our indebtedness is

accelerated, we might not be able to refinance our debt or obtain additional financing and could lose our vessels if our lenders

foreclose on their liens. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will

recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to

comply with our loan agreements.

Furthermore, certain of our credit facilities contain a cross-default provision that may be triggered by a default under

one of our other credit facilities. A cross-default provision means that a default on one loan would result in a default on certain

of our other loans. Because of the presence of cross-default provisions in certain of our credit facilities, the refusal of any one

lender under our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if

our other lenders under our credit facilities have waived covenant defaults under the respective agreements. If our secured

indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for us to refinance

our debt or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders

foreclose their liens, which would adversely affect our ability to conduct our business.

Our operating fleet consists of thirteen LNG vessels from which we derive all of our revenue and cash flow. Any limitation

in the availability or operation of these vessels could have a material adverse effect on our business, results of operations

and financial condition.

Our operating fleet consists of thirteen LNG carriers. Although some of our time charter agreements have fixed terms,

they may be terminated early due to certain events, such as a charterer's failure to make charter payments to us because of

financial inability, disagreements with us or otherwise. The ability of each of our counterparties to perform its obligations under

a charter with us will depend on a number of factors that are beyond our control and may include, among other things, general

economic conditions, the condition of the LNG shipping industry, prevailing prices for natural gas and the overall financial

condition of the counterparty. Should a counterparty fail to honor its obligations under an agreement with us, we may be unable

to realize revenue under that charter and could sustain losses, which could have a material adverse effect on our business,

financial condition, results of operations and ability to pay dividends to our shareholders, if any.

If any of our vessels are unable to generate revenues as a result of off-hire time, early termination of the applicable

time charter or otherwise, our business, and results of operations financial condition could be materially adversely affected.

We currently derive all our revenue and cash flow from a limited number of customers and the loss of any of these

customers could cause us to suffer losses or otherwise adversely affect our business.

We have derived, and believe we will continue to derive, all of our revenues from a limited number of customers. For

the year ended December 31, 2021, during which we derived our operating revenues from fifteen customers, with our top four

customers accounted for 20.8%, 16.6%, 15.3% and 13.4% of our consolidated revenues, equivalent to 66.1% of our

consolidated revenues. During this period, no other customer accounted for over 10% of our consolidated revenues.

We employ our Fleet (defined in "Item 4. Information on the Company – A. History and Development of the

Company") in both the term and spot markets (which includes vessel employment under single voyage spot charters and time

charters with an initial term of less than six months). All of the charters for our Fleet have fixed terms but may be terminated

early due to certain events, including but not limited to the customer’s failure to make charter payments to us because of

financial inability, disagreements with us or otherwise. The ability of each of our counterparties to perform its respective

obligations under a charter with us will depend on a number of factors that are beyond our control and may include, among

other things, general economic conditions, the condition of the LNG shipping industry, prevailing prices for natural gas, the

overall financial condition of the counterparty and work stoppages or other labor disturbances, including as a result of the

COVID-19 pandemic. Should a counterparty fail to honor its obligations under an agreement with us, we may be unable to

realize revenue under that charter and may sustain losses, which may have a material adverse effect on our business, financial

condition, cash flows, results of operations and ability to pay distributions to our shareholders (if any).

In addition, in general a customer may exercise its right to terminate its charter if, among other things:

•the vessel suffers a total loss or is damaged beyond repair;

•we default on our obligations under the charter, including prolonged periods of vessel off-hire;

•war or hostilities significantly disrupt the free trade of the vessel;

•the vessel is requisitioned by any governmental authority; or

•a prolonged force majeure event occurs, such as war or political unrest, which prevents the chartering of the vessel.

In addition, the charter payments we receive may be reduced if the vessel does not perform according to certain

contractual specifications. For example, charter hire may be reduced if the average vessel speed falls below the speed we have

guaranteed or if the amount of fuel consumed to power the vessel exceeds the guaranteed amount.

Furthermore, in depressed market conditions, our customers may no longer need a vessel that is then under charter or

may be able to obtain a comparable vessel at lower rates. As a result, customers may seek to renegotiate the terms of their

existing charter agreements or avoid their obligations under those contracts. If our customers fail to meet their obligations to us

or attempt to renegotiate our charter agreements, it may be difficult to secure substitute employment for such vessel, and any

new charter arrangements we secure may be at lower rates.

If any of our charters are terminated, we may be unable to re-deploy the related vessel on terms as favorable to us as

our current charters, or at all. If we are unable to re-deploy a vessel for which the charter has been terminated, we will not

receive any revenues from that vessel, and we may be required to pay ongoing expenses necessary to maintain the vessel in

proper operating condition. Any of these factors may decrease our revenue and cash flows. Further, the loss of any of our

customers, charters or vessels, or a decline in charter hire under any of our charters, could have a material adverse effect on our

business, results of operations, financial condition and ability to pay distributions to our shareholders (if any).

We may be unable to successfully compete with other vessel operators for charters, which could adversely affect our results

of operations and financial position.

The operation of LNG vessels and transportation of LNG cargoes is extremely competitive. Competition for the

transportation of LNG cargoes by sea is intense and depends on price, location, size, age, condition and the acceptability of the

vessel and its operators to the charterers. Through our operating subsidiaries, we compete with other vessel owners, and, to a

lesser extent, owners of other size vessels. The LNG market is highly fragmented. Due in part to the highly fragmented market,

competitors with greater resources could enter the LNG shipping industry and operate larger fleets through consolidations or

acquisitions and may be able to offer lower charter rates and higher vessel quality than we are able to offer. As a result, we

cannot assure you that we will be successful in finding continued timely employment of our existing vessels, which could

adversely affect our results of operations and financial position.

Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.

We operate our LNG vessels in markets that have historically exhibited seasonal variations in demand and, as a result,

in charter hire rates. The LNG sector is typically stronger in the fall and winter months in anticipation of increased consumption

of LNG in the northern hemisphere. In addition, unpredictable weather patterns in these months tend to disrupt vessel

scheduling and supplies of certain commodities. This seasonality may result in quarter-to-quarter volatility in our revenues and

operating results, which could affect our ability to pay dividends, if any, in the future.

A drop in spot market charter rates may provide an incentive for some charterers to default on their charters and the failure

of our counterparties to meet their obligations could cause us to suffer losses or otherwise adversely affect our business.

We have entered into various contracts, including charter parties with our customers, which subject us to counterparty

risks. The ability of each of the counterparties to perform its obligations under a contract with us or contracts entered into on

our behalf will depend on a number of factors that are beyond our control and may include, among other things, general

economic conditions, the condition of the shipping sector, the overall financial condition of the counterparty, charter rates

received for LNG. Should a counterparty fail to honor its obligations under any such contracts, we could sustain significant

losses that could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability

to pay dividends, if any.

When we enter into a time charter, charter rates under that charter may be fixed for the term of the charter. Ten of our

vessels are currently on fixed rate time charters with longer duration of more than eleven months from the date of this annual

report. If the spot charter rates or short-term time charter rates in the LNG shipping industry become significantly lower than

the time charter equivalent rates that some of our charterers are obligated to pay us under our existing charters, the charterers

may have incentive to default under that charter or attempt to renegotiate the charter. If our charterers fail to pay their

obligations, we would have to attempt to re-charter our vessels at lower charter rates, which would affect our ability to comply

with our loan covenants and operate our vessels profitably. If we are not able to comply with our loan covenants and our

lenders choose to accelerate our indebtedness and foreclose their liens, we could be required to sell vessels in our fleet and our

ability to continue to conduct our business would be impaired.

Our fixed rate time charters may limit our ability to benefit from any improvement in charter rates, and at the same time,

our revenues may be adversely affected if we do not successfully employ our vessels on the expiration of our charters.

As of March 15, 2022, ten of our vessels, which are owned, or leased by us, are currently on fixed rate charters with

longer duration of more than eleven months from the date of this annual report. Although our fixed rate time charters generally

provide more reliable revenues, they also limit the portion of our fleet available for spot market voyages during an upswing in

the LNG industry cycle, when spot market voyages might be more profitable. By the same token, we cannot assure you that we

will be able to successfully employ our vessels in the future or renew our existing charters at rates sufficient to allow us to

operate our business profitably or meet our obligations. A decline in charter or spot rates or a failure to successfully charter our

vessels could have a material adverse effect on our business, financial condition, results of operations and ability to pay

dividends.

We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet

their obligations could cause us to suffer losses or otherwise adversely affect our business.

We have entered, and may enter in the future, into various contracts, including charter parties with our customers,

financing agreements with our lenders, vessel management, newbuilding contracts, and other agreements with other entities,

which subject us to counterparty risks. The ability of each of the counterparties to perform its obligations under a contract with

us or contracts entered into on our behalf will depend on a number of factors that are beyond our control and may include,

among other things, general economic conditions, the condition of the shipping sector, the overall financial condition of the

counterparty, charter rates received for our vessels and the supply and demand for commodities. Should a counterparty fail to

honor its obligations under any such contract, we could sustain significant losses which could have a material adverse effect on

our business, financial condition, results of operations and cash flows.

Charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities. In

addition, in depressed market conditions, charterers may have incentive to renegotiate their charters or default on their

obligations under charters. Should a charterer in the future fail to honor its obligations under agreements with us, it may be

difficult to secure substitute employment for such vessel, and any new charter arrangements we secure on the spot market or on

charters may be at lower rates, depending on the then existing charter rate levels, compared to the rates currently being charged

for our vessels. In addition, if the charterer of a vessel in our fleet that is used as collateral under one or more of our financing

agreements defaults on its charter obligations to us, such default may constitute an event of default under the relevant financing

agreement, which may allow the bank to exercise remedies under the financing agreement. If our charterers fail to meet their

obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have a

material adverse effect on our business, financial condition, results of operations, cash flows and compliance with covenants in

our financing agreements.

Volatility of LIBOR and potential changes of the use of LIBOR as a benchmark could affect our profitability, earnings and

cash flow.

Movements in interest rates could negatively affect our financial performance given that certain of our current

financing agreements have, floating interest rates, typically based on LIBOR. The publication of U.S. Dollar LIBOR for the

one-week and two-month U.S. Dollar LIBOR tenors ceased on December 31, 2021, and the ICE Benchmark Administration

(“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s

Financial Conduct Authority, announced the publication of all other U.S. Dollar LIBOR tenors will cease on June 30, 2023. The

United States Federal Reserve concurrently issued a statement advising banks to cease issuing U.S. Dollar LIBOR instruments

after 2021. As such, any new loan agreements we enter into will not use LIBOR as an interest rate, and we will need to

transition our existing loan agreements from U.S. Dollar LIBOR to an alternative reference rate prior to June 2023.

In response to the anticipated discontinuation of LIBOR, working groups are converging on alternative reference rates.

The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market

participants, has proposed an alternative rate to replace U.S. Dollar LIBOR with the Secured Overnight Financing Rate, or

“SOFR”. At this time, it is not possible to predict how markets will respond to SOFR or other alternative reference rates. The

impact of such a transition from LIBOR to SOFR or other alternative rates could be significant for us.

In order to manage our exposure to interest rate fluctuations under LIBOR, SOFR or any other alternative rate, we

have and may from time to time use interest rate derivatives to effectively fix some of our floating rate debt obligations. No

assurance can however be given that the use of these derivative instruments, if any, may effectively protect us from adverse

interest rate movements. The use of interest rate derivatives may affect our results through mark to market valuation of these

derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which may impact

our free cash position. Interest rate derivatives may also be impacted by the transition from LIBOR to SOFR or other alternative

rates.

Our financing agreements contain a provision requiring or permitting us to enter into negotiations with our lenders to

agree to an alternative interest rate or an alternative basis for determining the interest rate in anticipation of the cessation of

LIBOR. These clauses present significant uncertainties as to how alternative reference rates or alternative bases for

determination of rates would be agreed upon, as well as the potential for disputes or litigation with our lenders regarding the

appropriateness or comparability to LIBOR of any substitute indices, such as SOFR, and any credit adjustment spread between

the two benchmarks. In the absence of an agreement between us and our lenders, most of our financing agreements provide that

LIBOR would be replaced with some variation of the lenders’ cost-of-funds rate. The discontinuation of LIBOR presents a

number of risks to our business, including volatility in applicable interest rates among our financing agreements, potential

increased borrowing costs for future financing agreements or unavailability of or difficulty in attaining financing, which could

in turn have an adverse effect on our profitability, earnings and cash flow.

Geveran Trading Co. Ltd ("Geveran") may be able to exercise significant influence over us and may have conflicts of

interest with our other shareholders.

As of March 15, 2022, Geveran, a Cyprus-based company, whose shares are indirectly held by two trusts settled by

Mr. John Fredriksen for the benefit of his family, own approximately 46.4% of our issued and outstanding ordinary shares.

Please see "Item 7. Major Shareholders and Related Party Transactions - A. Major Shareholders." For so long as Geveran owns

a significant percentage of our issued and outstanding shares, it may be able to exercise significant influence over us and will be

able to strongly influence the outcome of shareholder votes on other matters, including the adoption or amendment of

provisions in our Memorandum of Continuance or Bye-Laws and approval of possible mergers, amalgamations, control

transactions and other significant corporate transactions. This concentration of ownership may have the effect of delaying,

deferring or preventing a change in control, merger, amalgamations, consolidation, takeover or other business combination.

This concentration of ownership could also discourage a potential acquirer from making a tender offer or otherwise attempting

to obtain control of us, which could in turn have an adverse effect on the market price of our ordinary shares. Geveran may not

necessarily act in accordance with the best interests of other shareholders. The interests of Geveran may not coincide with the

interests of other holders of our ordinary shares. To the extent that conflicts of interest may arise, Geveran may vote in a

manner adverse to us or to you or other holders of our securities.

Certain of our directors, executive officers and major shareholders may have interests that are different from the interests of

our other shareholders.

Certain of our directors, executive officers and major shareholders may have interests that are different from, or are in

addition to, the interests of our other shareholders.

These directors, including Mr. Lorentzon, also serve on the boards of one or more entities in which Geveran or entities

related to Geveran are major shareholders, including but not limited to, Golden Ocean Group Limited (NASDAQ:GOGL) and

Frontline Ltd. (NYSE:FRO). There may be real or apparent conflicts of interest with respect to matters affecting Geveran or

entities related to Geveran that in certain circumstances may be adverse to our interests.

Geveran, our largest shareholder, whose shares are indirectly held by two trusts settled by Mr. John Fredriksen for the

benefit of his family, own approximately 46.4% of our issued and outstanding ordinary shares. To the extent that we do

business with or compete with Geveran or entities related to Geveran for business opportunities, prospects or financial

resources, or participate in ventures in which Geveran or entities related to Geveran may participate, these directors and officers

may face actual or apparent conflicts of interest in connection with decisions that could have different implications for us.

These decisions may relate to corporate opportunities, corporate strategies, potential acquisitions of businesses, newbuilding

acquisitions, inter-company agreements, the issuance or disposition of securities, the election of new or additional directors and

other matters. Such potential conflicts may delay or limit the opportunities available to us, and it is possible that conflicts may

be resolved in a manner adverse to us or result in agreements that are less favorable to us than terms that would be obtained in

arm's-length negotiations with unaffiliated third-parties.

We may not be able to implement our strategy successfully.

Subject to the covenants in our financing agreements and other contractual restrictions, Our long-term intention is to

renew and grow our fleet through selective acquisitions and newbuilding of LNG tonnage. Our business plan will therefore

depend upon our ability to identify and acquire suitable vessels to grow our fleet in the future and successfully employ our

vessels.

Growing any business by acquisition presents numerous risks, including undisclosed liabilities and obligations,

difficulty obtaining additional qualified personnel and managing relationships with customers and suppliers. In addition,

competition from other companies, many of which may have significantly greater financial resources than us, may reduce our

acquisition opportunities or cause us to pay higher prices. We cannot assure you that we will be successful in executing our

plans to establish and grow our business or that we will not incur significant expenses and losses in connection with these plans.

Our failure to effectively identify, purchase, develop and integrate any vessels could impede our ability to establish our

operations or implement our growth successfully. Our acquisition growth strategy exposes us to risks that may harm our

business, financial condition and operating results, including risks that we may:

•fail to realize anticipated benefits, such as cost savings or cash flow enhancements;

•incur or assume unanticipated liabilities, losses or costs associated with any vessels or businesses acquired,

particularly if any vessel we acquire proves not to be in good condition;

•be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business

and fleet;

•decrease our liquidity by using a significant portion of available cash or borrowing capacity to finance acquisitions;

•significantly increase our interest expense or financial leverage if we incur debt to finance acquisitions; or

•incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or

restructuring charges.

Operational risks and damage to our vessels could adversely impact our performance.

Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, bad

weather and other acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions,

human error, war, terrorism, piracy, labor strikes, boycotts, and other circumstances or events. These hazards may result in

death or injury to persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates,

damage to our customer relationships and market disruptions, delay or rerouting. Epidemics and other public health incidents

may also lead to crew member illness, which can disrupt the operations of our vessels, or to public health measures, which may

prevent our vessels from calling on ports or discharging cargo in the affected areas or in other locations after having visited the

affected areas. Please also see "Our financial results and operations have been and may continue to be adversely affected by the

outbreak of COVID-19, and related governmental responses thereto."

If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-dock repairs are

unpredictable and may be substantial. We may have to pay dry-docking 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 these repairs, may

adversely affect our business and financial condition. In addition, space at dry-docking facilities is sometimes limited and not

all dry-docking facilities are conveniently located. We may be unable to find space at a suitable dry-docking facility or our

vessels may be forced to travel to a dry-docking facility that is not conveniently located relative to our vessels' positions. The

loss of earnings while these vessels are forced to wait for space or to travel to more distant dry-docking facilities may adversely

affect our business and financial condition.

Further, the 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 safeguard our vessels, we may be unable to prevent any such damage, costs or loss, which

could negatively impact our business, financial condition, results of operations and cash flows.

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 of operations, including on our vessels. Additionally, if these systems fail or

become unavailable for any significant period of time, our business could be harmed.

The safety and security of our vessels and efficient operation of our business, including processing, transmitting and

storing electronic and financial information, depend on computer hardware and software systems, which are increasingly

vulnerable to security breaches and other disruptions. Any significant interruption or failure of our information systems or any

significant breach of security could adversely affect our business 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, power control, communications and cargo management. We have in place safety

and security measures on our vessels and onshore operations to secure our vessels against cyber-security attacks and any

disruption to their information systems. However, these measures and technology may not adequately prevent security breaches

despite our continuous efforts to upgrade and address the latest known threats, which are constantly evolving and have become

increasing sophisticated. If these threats are not recognized or detected until they have been launched, we may be unable to

anticipate these threats and may not become aware in a timely manner of such a security breach, which could exacerbate any

damage we experience. A disruption to the information system of any of our vessels could lead to, among other things,

incorrect routing, collision, grounding and propulsion failure.

Beyond our vessels, we rely on industry accepted security measures and technology to securely maintain confidential

and proprietary information maintained on our information systems. However, these measures and technology may not

adequately prevent security breaches. The technology and other controls and processes designed to secure our confidential and

proprietary information, detect and remedy any unauthorized access to that information were designed to obtain reasonable, but

not absolute, assurance that such information 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 our confidential and proprietary

information. In addition, the foregoing events could result in violations of applicable privacy and other laws. If confidential

information is inappropriately accessed 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 of misappropriation. 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 the integrity and security of our information systems.

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. A cyber-attack could also lead to litigation, fines, other remedial action,

heightened regulatory 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 material adverse effect on our business, results of operations, cash flows and

financial condition.

Moreover, cyber-attacks against the Ukrainian government and other countries in the region have been reported in

connection with recent conflicts between Russia and Ukraine. To the extent such attacks have collateral effects on global

critical infrastructure or financial institutions, such developments could adversely affect our business, operating results, cash

flows and financial condition. At this time, it is difficult to assess the likelihood of such threat and any potential impact at this

time.

Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and

cause disruption of our business.

International shipping is subject to security and customs inspection and related procedures in countries of origin,

destination and trans-shipment points. Under the U.S. Maritime Transportation Security Act of 2002 (the "MTSA"), the USCG

issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to

the jurisdiction of the United States and at certain ports and facilities. These security procedures can result in delays in the

loading, offloading or trans-shipment and the levying of customs duties, fines or other penalties against exporters or importers

and, in some cases, carriers. Future changes to the existing security procedures may be implemented that could affect the LNG

sector. These changes have the potential to impose additional financial and legal obligations on carriers and, in certain cases, to

render the shipment of certain types of goods uneconomical or impractical. These additional costs could reduce the volume of

goods shipped, resulting in a decreased demand for vessels and have a negative effect on our business, revenues and customer

relations.

Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-corruption laws could result in fines, criminal

penalties and an adverse effect on our business.

We may operate in a number of countries throughout the world, including countries known to have a reputation for

corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of

business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977,

(the "U.S. Foreign Corrupt Practices Act") and other anti-bribery legislation. We are subject, however, to the risk that we, our

affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in

violation of such anti-corruption laws, including the U.S. Foreign Corrupt Practices Act. Any such violation could result in

substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might

adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage

our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is

expensive and can consume significant time and attention of our senior management. Though we have implemented monitoring

procedures and required policies, guidelines, contractual terms and audits, these measures may not prevent or detect failures by

our agents or intermediaries regarding compliance.

We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material

adverse effect on us.

We may be, from time to time, involved in various litigation matters. These matters may include, among other things,

contract disputes, shareholder litigation, personal injury claims, environmental claims or proceedings, asbestos and other toxic

tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course

of our business. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or effect

of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may

have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain

solvent which may have a material adverse effect on our financial condition.

If we do not set aside funds and are unable to borrow or raise funds for vessel replacement at the end of a vessel's useful

life, our revenue will decline, which would adversely affect our business, results of operations, financial condition and

ability to pay dividends.

Our cash flows and income are dependent on the revenues earned by the chartering of our vessels. If we do not set

aside funds and 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 remaining useful lives, which would cause our business, results of operations, financial condition

and ability to pay dividends to be adversely affected. Any funds set aside for vessel replacement will not be available for cash

distributions and dividends.

We may not have adequate insurance to compensate us if our vessels are damaged or lost.

In the event of a casualty to a vessel or other catastrophic event, we rely on our insurance to pay the insured value of

the vessel or the damages incurred. We procure insurance for our fleet against those risks that we believe companies in the

shipping industry commonly insure. These insurances include hull and machinery insurance, protection and indemnity

insurance, including environmental damage and pollution insurance coverage, and war risk insurance. We can give no

assurance that we will be adequately insured against all risks and we cannot guarantee that any particular claim will be paid,

even if we have previously recorded a receivable or revenue in respect of such claim. Our insurance policies may contain

deductibles for which we will be responsible and limitations and exclusions, which may increase our costs or lower our

revenues.

We cannot assure you that we will be able to obtain adequate insurance coverage for our vessels in the future or renew

our existing policies on the same or commercially reasonable terms, or at all. For example, more stringent environmental

regulations have in the past led to increased costs for, and in the future may result in the lack of availability of, protection and

indemnity insurance against risks of environmental damage or pollution. Any uninsured or underinsured loss could harm our

business, results of operations, cash flows, financial condition and ability to pay dividends. In addition, our insurance may be

voidable by the insurers as a result of certain of our actions, such as our vessels failing to maintain certification with applicable

maritime self-regulatory organizations. Further, we cannot assure you that our insurance policies will cover all losses that we

incur, or that disputes over insurance claims will not arise with our insurance carriers. Any claims covered by insurance would

be subject to deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these

deductibles could be material. In addition, our insurance policies may be subject to limitations and exclusions, which may

increase our costs or lower our revenues, thereby possibly having a material adverse effect on our business, results of

operations, cash flows, financial condition and ability to pay dividends.

We may be subject to calls because we obtain some of our insurance through protection and indemnity associations.

We may be subject to increased premium payments, or calls, if the value of our claim records, the claim records of our

fleet managers, and/or the claim records of other members of the protection and indemnity associations through which we

receive insurance coverage for tort liability (including pollution-related liability) significantly exceed projected claims. In

addition, our protection and indemnity associations may not have enough resources to cover claims made against them. Our

payment of these calls could result in significant expense to us, which could have a material adverse effect on our business,

results of operations, cash flows, financial condition and ability to pay dividends.

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

financial obligations.

We are a holding company and our subsidiaries conduct all of our operations and own all of our operating assets. We

have no significant assets other than the equity interests in our subsidiaries. Our ability to satisfy our financial obligations in the

future depends on our subsidiaries and their ability to distribute funds to us. If we are unable to obtain funds from our

subsidiaries, we may not be able to satisfy our financial obligations.

We are an "emerging growth company", and we cannot be certain that the reduced disclosure and other requirements

applicable to emerging growth companies will make our ordinary shares less attractive to investors.

We are an "emerging growth company", as defined in the Jumpstart Our Business Startups Act, or "JOBS Act", and we

may take advantage of certain exemptions from various reporting and other requirements that are applicable to other public

companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404

of the Sarbanes-Oxley Act. Investors may find our ordinary shares and the price of our ordinary shares less attractive because

we rely, or may rely, on these exemptions. If some investors find our ordinary shares less attractive as a result, there may be a

less active trading market for our ordinary shares and the price of our ordinary shares may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the

extended transition period for complying with new or revised accounting standards. In other words, an emerging growth

company can delay the adoption of certain accounting standards until those standards would otherwise apply to private

companies. We have elected to "opt out" of such extended transition period, and as a result, we will comply with new or revised

accounting standards as required when they are adopted for public companies. Section 107 of the JOBS Act provides that our

decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We could remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of

the date we first sell our common equity securities pursuant to an effective registration statement under the Securities Act,

although a variety of circumstances could cause us to lose that status earlier. For as long as we take advantage of the reduced

reporting obligations, the information that we provide to shareholders may be different from information provided by other

public companies.

Because we are a Bermuda exempted company, our shareholders may have less recourse against us or our directors than

shareholders of a U.S. company have against the directors of that U.S. Company.

Because we are a Bermuda company, the rights of holders of our ordinary shares will be governed by Bermuda law

and our memorandum of continuance and bye-laws. The rights of shareholders under Bermuda law may differ from the rights

of shareholders in other jurisdictions, including with respect to, among other things, rights related to interested directors,

amalgamations, mergers and acquisitions, takeovers, the exculpation and indemnification of directors and shareholder lawsuits.

Among these differences is a Bermuda law provision that permits a company to exempt a director from liability for

any negligence, default, or breach of a fiduciary duty except for liability resulting directly from that director's fraud or

dishonesty. Our bye-laws provide that no director or officer shall be liable to us or our shareholders unless the director's or

officer's liability results from that person's fraud or dishonesty. Our bye-laws also require us to indemnify a director or officer

against any losses incurred by that director or officer resulting from their negligence or breach of duty, except where such

losses are the result of fraud or dishonesty. Accordingly, we carry directors' and officers' insurance to protect against such a

risk.

In addition, under Bermuda law, the directors of a Bermuda company owe their duties to that company and not to the

shareholders. Bermuda law does not, generally, permit shareholders of a Bermuda company to bring an action for a wrongdoing

against the company or its directors, but rather the company itself is generally the proper plaintiff in an action against the

directors for a breach of their fiduciary duties. Moreover, class actions and derivative actions are generally not available to

shareholders under Bermuda law. These provisions of Bermuda law and our bye-laws, as well as other provisions not discussed

here, may differ from the law of jurisdictions with which shareholders may be more familiar and may substantially limit or

prohibit a shareholder's ability to bring suit against our directors or in the name of the company. Bermuda courts, however,

would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to

the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result

in the violation of the company's memorandum of association or bye-laws. Furthermore, consideration would be given by a

Bermuda court to acts that are alleged to constitute a fraud against minority shareholders or, for instance, where an act requires

the approval of a greater percentage of the company's shareholders than that which actually approved it. However, generally a

derivative action will not be permitted where there is an alternative action available that would provide an adequate remedy.

Any property or damages recovered by derivative action go to the company, not to the plaintiff shareholders. When the affairs

of a company are being conducted in a manner which is oppressive or prejudicial to the interests of some part of the

shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit,

including an order regulating the conduct of the company's affairs in the future or ordering the purchase of the shares of any

shareholders by other shareholders or by the company or that the company be wound up.

It is also worth noting that under Bermuda law, our directors and officers are required to disclose to our Board of

Directors any interests they have in any material contract entered into by our company or any of its subsidiaries. Our directors

and officers are also required to disclose their material interests in any corporation or other entity which is party to a material

contract with our company or any of its subsidiaries. A director who has disclosed his or her interests in accordance with

Bermuda law may participate in any meeting of our Board of Directors, and may vote on the approval of a material contract,

notwithstanding that he or she has an interest.

Future issuance of shares or other securities may dilute the holdings of shareholders and could materially affect the price of

our ordinary shares.

It is possible that we may in the future decide to offer additional shares or other securities in order to secure financing

for new projects, in connection with unanticipated liabilities or expenses or for any other purposes. Any such additional offering

could reduce the proportionate ownership and voting interests of holders of our ordinary shares, as well as our earnings per

share and our net asset value per share, and any offering by us could have a material adverse effect on the market price of our

ordinary shares.

Because our offices and most of our assets are outside the United States, you may not be able to bring suit against us, or

enforce a judgment obtained against us in the United States.

Our executive offices, administrative activities and the majority of our assets are located outside the United States. In

addition, most of our directors and officers are not United States residents. As a result, it may be more difficult for investors to

effect service of process within the United States upon us, or to enforce both in the United States and outside the United States

judgments against us in any action, including actions predicated upon the civil liability provisions of the United States federal

securities laws.

As an exempted company incorporated under Bermuda law with subsidiaries in a Crown dependency and other offshore

jurisdictions, our operations may be subject to economic substance requirements.

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 December 31, 2018. The

Economic Substance Act applies to every registered entity in Bermuda that engages in a relevant activity and requires that every

such entity shall maintain a substantial economic presence in Bermuda. A relevant activity for the purposes of the Economic

Substance Act is banking business, insurance business, fund management business, financing business, headquarters business,

shipping business, distribution and service center business, intellectual property holding business and conducting business as a

holding entity.

The Economic Substance Act provides that a registered entity that carries on a relevant activity complies with

economic substance requirements if (a) it is directed and managed 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 physical presence 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 the relevant 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 the Registrar of Companies (the "Registrar") on an annual basis.

Certain of our subsidiaries may be organized in other jurisdictions identified by the Code of Conduct Group for

Business Taxation of the European Union 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 may have also 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 any similar law applicable to us in any other

jurisdictions, we could be subject to financial penalties and spontaneous disclosure of information to foreign tax officials in

related jurisdictions and 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 condition and results of operations.

Tax Risks

We may have to pay tax on United States source income, which would reduce our earnings.

Under the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves and

our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United

States, may be subject to a 4% United States federal income tax without allowance for deduction, unless that corporation

qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations promulgated

thereunder.

We believe that we and each of our subsidiaries qualified for this statutory tax exemption for our taxable year ending

on December 31, 2021 and we will take this position for U.S. federal income tax return reporting purposes. However, there are

factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption for future taxable years

and thereby become subject to United States federal income tax on our United States source shipping income. For example, we

would no longer qualify for exemption under Section 883 of the Code for a particular taxable year if certain non-qualified

shareholders with a 5% or greater interest in our ordinary shares owned, in the aggregate, 50% or more of our outstanding

ordinary shares for more than half the days during the taxable year. It is possible that we could be subject to this rule for our

taxable year ending on or after December 31, 2022. Due to the factual nature of the issues involved, there can be no assurances

on our tax-exempt status or that of any of our subsidiaries.

If we or our subsidiaries are not entitled to exemption under Section 883 of the Code for any taxable year, we, or our

subsidiaries, could be subject during those years to an effective 2% U.S. federal income tax on the gross shipping income

derived during such a year that is attributable to the transport of cargoes to or from the United States. The imposition of this tax

would have a negative effect on our business. However, the amount of our shipping income that would be subject to this tax has

historically not been material.

United States tax authorities could treat us as a "passive foreign investment company", which could have adverse United

States federal income tax consequences to United States shareholders.

A foreign corporation will be treated as a "passive foreign investment company" ("PFIC"), for U.S. federal income tax

purposes if either (1) at least 75% of its gross income for 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 those types of "passive

income". For purposes of these tests, "passive income" includes cash distributions, interest, and gains from the sale or 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 or business. For purposes of these tests, income derived from the performance of

services does not constitute "passive income." U.S. shareholders of a PFIC are subject to a disadvantageous United States

federal 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.

Based on our current and proposed method of operation, we do not believe that we are or that we have been since the

beginning of our 2004 taxable year, or that we will be a PFIC with respect to any taxable year. In this regard, we intend to treat

the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental

income. Accordingly, we believe that our income from these activities does not constitute "passive income", and the assets that

we own and operate in connection with the production of that income do not constitute assets that produce, or are held for the

production of, "passive income".

Although these is no direct legal authority under the PFIC rules addressing our method of operation, there is

substantial legal authority supporting our position consisting of case law and United States Internal Revenue Service (the

"IRS"), pronouncements concerning the characterization of income derived from time charters and voyage charters as services

income for other tax purposes. However, it should be noted that there is also authority that characterizes time charter income as

rental income rather than services income for other 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 that we 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 our operations.

If the IRS were to find that we are or have been a PFIC for any taxable year, our United States shareholders will face

adverse United States federal income tax consequences. Under the PFIC rules, unless those shareholders make an election

available under United States Internal Revenue Code of 1986, as amended (the "Code") (which election could itself have

adverse consequences for such shareholders, as discussed below under "Taxation - U.S. Federal Income Tax Considerations"),

such shareholders would be liable to pay United States federal income tax at the then prevailing income tax rates on ordinary

income plus interest upon excess distributions and upon any gain from the disposition of our ordinary shares, as if the excess

distribution or gain had been recognized ratably over the shareholder's holding period of our ordinary shares.

ITEM 4.INFORMATION ON THE COMPANY

A.History and Development of the Company

FLEX LNG Ltd. is an exempted company incorporated under the laws of Bermuda. We are a growth-oriented owner

and commercial operator of fuel efficient, fifth generation LNG carriers. As of March 15, 2022, we own and operate i) nine M-

type, Electronically Controlled, Gas Injection ("MEGI") LNG carriers, of which four have partial re-liquefaction systems

installed and three have full re-liquefaction systems installed, and, ii) four Generation X Dual Fuel ("X-DF") LNG carriers,

which we collectively refer to as our "Operating Vessels" or our "Fleet". Our business currently focuses on the expansion of our

Fleet and execution of our chartering strategy to seek balanced employment for the vessels in our Fleet through actively

marketing our vessels in both the term and spot market.

Our registered office is at Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton, Bermuda. Our telephone number at

that address is +1 441 295 69 35. Our website is www.flexlng.com. The SEC maintains an Internet site that contains reports,

proxy and information statements, 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 on these websites is incorporated into or forms a

part of this annual report.

Company Background

FLEX LNG Ltd. was initially incorporated under the laws of the British Virgin Islands in September 2006 and re-

domiciled, by way of continuation, into Bermuda in 2017. In July 2017, as part of our strategy to position ourselves for growth,

we transferred the listing of our ordinary shares from Oslo Axess to the Oslo Stock Exchange in order to increase our visibility

to investors and to facilitate trading liquidity. We conducted no material operations until 2013, at which time we entered into

contracts for the construction of two newbuilding LNG carriers, which were delivered to us in 2018. We have since increased

our Fleet, which now consists of 13 LNG carriers in operation, as described above.

In June 2019, we effected a cross listing of our ordinary shares on the NYSE. No new shares were offered and sold in

connection with the NYSE listing. Our ordinary shares commenced trading on the NYSE under the symbol “FLNG” on June

17, 2019. As a result of our listing on the NYSE, our ordinary shares may be traded on both the OSE and the NYSE. All of our

issued and outstanding ordinary shares are identified by CUSIP G35947 202 and ISIN BMG 359472021.

In connection with our fleet expansion, we conducted a series of vessel acquisitions, share issuances and financing

transactions, which are further discussed below under "Share Issuances, Share Repurchases and Financing Transactions" and

"— B. Business Overview — Our Fleet."

Share Issuances, Share Repurchases and Financing Transactions

In 2014, Geveran increased its ownership in our ordinary shares to 43.3% and became obliged to conduct a mandatory

offer for our ordinary shares, which resulted in Geveran owning 82% of our issued and outstanding ordinary shares at that time.

As of March 15, 2022, Geveran owns 46.4% of our issued and outstanding ordinary shares.

In April 2019, we, through two of our vessel owning subsidiaries, entered into a $250 million secured term loan

facility, or the $250 Million Facility, with a syndicate of banks to partially finance the two newbuildings, Flex Constellation

and Flex Courageous. The first $125 million tranche under the facility was drawn upon the delivery of the Flex Constellation in

June 2019, and the second $125 million tranche was drawn upon the delivery of the Flex Courageous in August 2019. The

facility has a term of five years from delivery of the last vessel and bears interest at LIBOR plus a margin of 2.35% per annum.

As of December 31, 2021, the net outstanding balance was $219.2 million.

In April 2019, we, through two of our vessel owning subsidiaries, entered into sale and time charter agreements for the

vessels Flex Endeavour and Flex Enterprise, or the Hyundai Glovis Sale and Charterback. The transactions closed in July 2019,

whereby we sold the vessels to Triple H No. 3 Ltd. and Triple H No. 4 Ltd., respectively, for a gross consideration of $210.0

million per vessel, with a net consideration of $150.0 million per vessel adjusted for a non-amortizing and non-interest bearing

seller’s credit of $60.0 million per vessel. Flex Endeavour and Flex Enterprise are chartered back from Hyundai Glovis Co.

Ltd. (“Hyundai Glovis”) on a time-charter basis to us, through our subsidiaries, for a period of ten years. The agreements

include fixed price purchase options, whereby we have options to acquire the vessels during the term of the time-charters. Upon

closing of the transactions with Hyundai Glovis, a portion of the proceeds were used to prepay $194.3 million relating to these

vessels under our $315 Million Term Loan Facility, resulting in net proceeds from the financing agreement with Hyundai

Glovis to the Company of $102.7 million after fees and expenses. As of December 31, 2021, the net outstanding balance was

$269.5 million.

In July 2019, we, through one of our vessel owning subsidiaries, entered into a $100 million secured term loan and

revolving credit facility agreement, or the $100 Million Facility, with a syndicate of banks for the refinancing of the Flex

Ranger, which was financed under the $315 Million Term Loan Facility. The $100 Million Facility is split between a $50

million term loan and a $50 million revolving facility. The facility was fully drawn in July 2019 and the proceeds were used to

prepay the outstanding balance of $99.8 million relating to the Flex Ranger under the existing $315 Million Term Loan

Facility. The facility has a term of five years and bears interest at LIBOR plus a margin of 2.25% per annum. In March 2021,

we signed an addendum to the $100 Million Facility, whereby the revolving tranche under the facility was increased by $20

million. The $20 million increase will be non-amortizing and bear interest at LIBOR plus a margin of 2.25% per annum for any

drawn amounts. As of December 31, 2021, the revolving facility was fully drawn and the total net outstanding balance under

the $100 Million Facility was $108.1 million.

In February 2020, we entered into an agreement with a syndicate of banks and the Export-Import Bank of Korea, or

KEXIM, for the part financing of the vessels Flex Aurora, Flex Artemis, Flex Resolute, Flex Freedom and Flex Amber in an

amount up to $629 million, or the $629 Million Term Loan Facility. The facility is divided into a commercial bank loan of $250

million, or the Commercial Loan, a KEXIM guaranteed loan of $189.1 million funded by commercial banks, or the KEXIM

Guaranteed Loan, and a KEXIM direct loan of $189.9 million, or the KEXIM Direct Loan. The amount available for drawdown

upon delivery of each vessel is limited to the lower of (i) 65% of the fair market value of the relevant vessel and (ii) $125.8

million. The facility includes an accordion option of up to $10 million per vessel subject to acceptable long-term employment

and credit approval by the lenders. The Commercial Loan bears interest at LIBOR plus a margin of 2.35% per annum and has a

final maturity date being the earlier of (i) 5 years from delivery of the final vessel or (ii) November 30, 2025. The KEXIM

Guaranteed Loan and the KEXIM Direct Loan bear interest at LIBOR plus a margin of 1.20% per annum and 2.25% per

annum, respectively. The KEXIM Guaranteed Loan has a term of six years from the delivery of each vessel and the KEXIM

Direct Loan has a term of 12 years from the delivery of each vessel, provided that these loans will mature at the same time as

the Commercial Loan if the Commercial Loan has not been refinanced at terms acceptable to the lenders. In July 2020, the

Company drew down $125.8 million on delivery of Flex Aurora, and utilized the accordion option to increase the Commercial

Loan relating to the newbuilding Flex Artemis by $10 million. In August 2020, we drew down $135.8 million on delivery Flex

Artemis and utilized the option under the facility to replace the newbuilding Flex Amber with the sister vessel Flex Vigilant,

delivered in the second quarter of 2021. In September 2020, we drew down $125.8 million on delivery of Flex Resolute. In end

December 2020, the Company drew down $125.8 million in connection with the delivery of Flex Freedom, which was

delivered to us January 1, 2021. In May 2021, the Company drew down $123.3 million on delivery of Flex Vigilant. As of

December 31, 2021, the net outstanding balance under the facility was $602.1 million.

In June 2020, we entered into a sale and leaseback transaction with an Asian based leasing house for the newbuilding

Flex Amber, or the Flex Amber Sale and Leaseback. Under the terms of the transaction, the vessel was sold for a gross

consideration of $206.5 million, with a net consideration to the Company of $156.4 million adjusted for an advance hire of

$50.1 million. The vessel has been chartered back on a bareboat basis for a period of ten years. The agreement includes fixed

price purchase options, whereby we have options to re-purchase the vessel at or after the first anniversary of the agreement, and

on each anniversary thereafter. At the end of the ten-year lease period, we have an obligation to purchase the vessel for a net

purchase price of $69.5 million. The bareboat rate payable under the lease has a fixed element, treated as principal repayment,

and a variable element based on LIBOR plus a margin of 3.20% per annum calculated on the principal outstanding under the

lease. The transaction was executed upon delivery of the vessel from the shipyard in October 2020. As of December 31, 2021,

the net outstanding balance was $146.0 million.

In June 2020, we entered into a $125 million term loan and revolving credit facility with a syndicate of banks, or the

$125 Million Facility, for the financing of the vessel Flex Volunteer. The facility is divided into a $100 million term loan and a

$25 million revolving credit facility. The facility bears interest at LIBOR plus a margin of 2.85% per annum and has a term of

five years from delivery of the vessel. The amount available for drawdown upon delivery of the vessel will be limited to the

lower of (i) 65% of the fair market value the vessel and (ii) $125 million. In January 2021, the Company drew down $100

million under the term loan on delivery of Flex Volunteer. Upon closing of the Flex Volunteer Sale and Leaseback transaction

in the fourth quarter of 2021, further described and defined below, the full amount outstanding under the $125 Million Facility

was prepaid.

In November 2021, we signed a sale and leaseback agreement with an Asian based lease provider for the vessel, Flex

Volunteer, for a period of ten years (the "Flex Volunteer Sale and Leaseback"). Under the terms of the memorandum of

agreement and bareboat charter, we sold the vessel for a gross consideration of $215 million, with a net consideration to us of

$160 million, adjusted the down payment of $55 million for the ten-year charter period. At the end of the ten-years, we have the

right to buy and the lessor has the right to sell the vessel for a consideration of $80 million. The vessel was chartered back to us

on a bareboat basis for a period of ten years with a fixed daily charter rate. The transaction closed in the fourth quarter of 2021

and a portion of the proceeds was used to prepay the outstanding balances under the $125 Million Facility, which resulted in net

proceeds to the Company of $37.7 million after fees and expenses.

In February 2022, we, through our vessel owning subsidiaries, received credit approved term sheets for a new

$375 million term and revolving loan facility (the "$375 Million Facility") from a syndicate of banks to refinance existing

facilities secured by Flex Endeavour, Flex Ranger and Flex Rainbow. The facility is comprised of a $125 million term loan

facility with a six-year repayment profile and a non-amortizing $250 million revolving credit facility, resulting in an average

age-adjusted repayment profile of 22 years. The facility has an accordion option to add an additional $125 million of

indebtedness by adding an additional vessel as security as nominated by us within 36 months from the closing date of the

agreement. The facility has an interest rate of SOFR plus 210 basis points. SOFR is a benchmark interest rate for dollar-

denominated derivatives and loans that is replacing LIBOR. The facility is subject to final documentation and customary

closing conditions and is expected to be drawn between the second quarter of 2022 and the third quarter of 2022.

In February 2022, we, through our vessel owning subsidiaries, received credit approved term sheets from an Asian

based lease provider for an aggregate of $320 million for two separate sale and bareboat leaseback agreements (the "$320

Million Sale and Leaseback") to refinance the existing facility secured by Flex Constellation and Flex Courageous. Under the

terms of the two sale and leaseback agreements, the vessels will be sold for gross consideration equivalent to the market value

of each vessel and net consideration to us of $160 million per vessel, adjusted for an advance hire per vessel. The term of each

lease is ten years and we have options to repurchase the vessels after three years. At the expiry of the ten-year charter period we

have the option to repurchase the vessels for $66.5 million per vessel reflecting an age adjusted repayment profile of 20 years.

The agreement has an interest rate of SOFR plus 250 basis points. The agreement is subject to final documentation and

customary closing conditions and is expected to be drawn in the second quarter of 2022.

As of December 31, 2021, we had 17 interest rate swap transactions to reduce the risks associated with fluctuations in

interest rates, whereby the floating rate has been swapped to a fixed rate. The total amortized principal of all of our interest rate

swaps was $677.8 million with a weighted average fixed interest rate of 1.17%.

For further information about our financing agreements, see "Item 5. Operating and Financial Review and Prospects -

B. Liquidity and Capital Resources - Our Borrowing Activities."

On November 19, 2020, our Board of Directors authorized a share buy-back program (our “buy-back program”) to

purchase up to an aggregate of 4,110,584 of our ordinary shares for the purpose of increasing shareholder value with a

maximum amount to be paid per share under our buy-back program (a “maximum price”) of $10.00 or the equivalent in NOK if

purchased on the OSE. Between February and August 2021, in a series of actions, our Board of Directors authorized the

increase in the maximum price that may be paid per ordinary share in our buy-back program from $10.00 to $15.00. Our buy-

back program commenced on November 19, 2020 and ended on November 19, 2021. Under the buy-back program, we had

repurchased an aggregate of 980,000 ordinary shares for an aggregate purchase price of NOK81.5 million, or $9.4 million, at an

average purchase price of NOK83.13, or $9.64, per share.

On August 16, 2021, the Company issued 585,000 share options to members of executive management. The share

options have a five-year term as from September 7, 2021, and a three-year vesting schedule, whereby: 25% will vest after one

year; 35% will vest after two years; and 40% will vest after three years. The options have an exercise price of: $14.00 for those

vesting after one year; $15.60 for those vesting after two years; and $17.20 for those vesting after three years. The weighted

average strike price of the options is $15.84 per share. The exercise price will be adjusted for any distribution of dividends

made before the relevant options expire. As part of the issuance, Øystein Kalleklev, CEO, and Knut Traaholt, CFO, both of

Flex LNG Management AS, were allocated 250,000 and 120,000 stock options respectively.

On November 17, 2021, Øystein Kalleklev, CEO of Flex LNG Management AS, exercised 60,000 stock options

vested in the period from September 7, 2018 to September 7, 2021. The original strike price was $14.30 per share but were

adjusted to $12.90 (the "Adjusted Strike Price") pursuant to the terms of the options due to the dividend payments of an

aggregate of $1.40 dividend paid per share since the options were granted. The stock options have been settled in cash based on

the difference of the Adjusted Strike Price and the closing price at NYSE on November 17, 2021 which was $22.78. Following

the exercise of these stock options, Mr. Kalleklev holds 50,000 shares in Flex LNG Ltd. as well as 250,000 stock options that

are described above.

For further information about our financing agreements, see "Item 5. Operating and Financial Review and Prospects—

B. Liquidity and Capital Resources—Our Borrowing Activities."

Reverse Stock Split

On March 7, 2019, we effected a 1-for-10 reverse stock split of our then-outstanding ordinary shares. The reverse

stock split reduced the number of our issued and outstanding ordinary shares from 541,043,903 shares to 54,103,993 shares and

affected all issued and outstanding ordinary shares. The number of our authorized ordinary shares was consequently reduced

from 100,000,000,000 to 10,000,000,000 and the par value increased from $0.01 per share to $0.10 per share. The terms of our

ordinary shares were not affected by the reverse stock split. No fractional shares were issued in connection with the reverse

stock split. Shareholders of record who would have otherwise been entitled to receive a fractional share as a result of the reverse

stock split received a cash payment in lieu thereof. The reverse stock split was completed in order to comply with the initial

listing requirements of the NYSE with which we were required to be in compliance in connection with our listing on the NYSE.

B.Business Overview

Our Fleet

The following table sets forth additional information about our Fleet as of March 15, 2022:

Vessel Name

Cargo

Capacity

(cbm)

Propulsion

Year Built

Shipyard(1)

Charter

Expiration(2)

Flex Endeavour

173,400

MEGI

2018

DSME

Q1 2025(3)

Flex Enterprise

173,400

MEGI

2018

DSME

Q1 2023(4)

Flex Ranger

174,000

MEGI

2018

SHI

Q1 2025(3)

Flex Rainbow

174,000

MEGI

2018

SHI

Q1 2023

Flex Constellation

173,400

MEGI

2019

DSME

Q2 2024(5)

Flex Courageous

173,400

MEGI

2019

DSME

Q1 2025(6)

Flex Aurora

174,000

X-DF

2020

HSHI

Q1 2026(7)

Flex Amber

174,000

X-DF

2020

HSHI

Q4 2022(4)

Flex Artemis

173,400

MEGI

2020

DSME

Q3 2025(8)

Flex Resolute

173,400

MEGI

2020

DSME

Q1 2025(9)

Flex Freedom

173,400

MEGI

2021

DSME

Q1 2027(10)

Flex Volunteer

174,000

X-DF

2021

HSHI

Spot(11)

Flex Vigilant

174,000

X-DF

2021

HSHI

Q1 2025(3)

(1)As used in this annual report, "DSME" means Daewoo Ship building and Marine Engineering Co. Ltd., "SHI" means

Samsung Heavy Industries, and "HSHI" means Hyundai Samho Heavy Industries Co. Ltd.

(2)The expiration of our charters are generally subject to re-delivery windows ranging from 15 to 45 days before or after

the expiration date.

(3)The charterer has the option to extend the charters for up to two additional years, in 12-month periods.

(4) The charterers have the option to extend the charter for an additional 12 months.

(5) The charterer has the option to extend the charter for up to three additional years, in 12-months periods.

(6) The charterer has the option to extend the charter for an additional four years, in 24-months periods.

(7) Flex Aurora's existing charter with an international energy major expires in Q3 2022 and the vessel may be nominated

as the fourth vessel with Cheniere Marketing International ("Cheniere") which will commence in Q3 2022 and expire in Q1

2026 with a charterer option to extend the charter for up to two additional years.

(8) The charterer has the option to extend the charter for an additional five years, in 12-month periods.

(9) The charterer has the option to extend the charter for an additional four years, in 24-month periods.

(10) The charterer has the option to extend the charter for an additional two years.

(11) Flex Volunteer is currently operating in the spot market and the vessel may be nominated as the fifth vessel with

Cheniere, if the charterers declare this option. The charter would commence in Q3 2022 and expire in Q1 2026 with a charterer

option to extend the charter for up to two additional years.

Fleet Development

In January 2021, we successfully took delivery of our eleventh newbuilding LNG carrier, Flex Freedom, which was

constructed at DSME. In connection with the delivery of the vessel, we made a final payment of $130.5 million to an entity

related to Geveran, our largest shareholder. The final payment was part financed with a drawdown of $125.8 million under the

$629 Million Term Loan Facility (as defined below), the remaining balance was paid with cash on hand.

In January 2021, we successfully took delivery of our twelfth newbuilding LNG carrier, Flex Volunteer, which was

constructed at HSHI. In connection with the delivery of the vessel, we made a final payment of $127.5 million to an entity

related to Geveran. The final payment was part financed with a drawdown of $100 million term tranche under the $125 Million

Facility (as defined below) the remaining balance was paid with cash on hand.

In May 2021, we successfully took delivery of our thirteenth newbuilding LNG carrier, Flex Vigilant, which was

constructed at HSHI. In connection with the delivery of the vessel, we made a final payment of $127.5 million to an entity

related to Geveran. The final payment was part financed with a drawdown of $123.3 million term tranche under the $629

Million Term Loan Facility (as defined below) the remaining balance was paid with cash on hand.

For information about our financing agreements which we have entered into in connection with the expansion of our

Fleet, see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources— Our Borrowing

Activities."

Employment of Our Fleet and Our Customers

We manage the employment of our fleet. We deploy our LNG carriers on a mix of period time charters that can last up

to several years, and spot market charters (through voyage charters and short-term time charters), which generally last from one

to six months, subject to market conditions. Time and bareboat charters are for a fixed period of time. A voyage charter is

generally a contract to carry a specific cargo from a loading port to a discharging port for an agreed-upon total charge. Under

voyage charters we pay for voyage expenses such as port, canal and fuel costs. Under a time charter the charterer pays for

voyage expenses while under a bareboat charter the charterer pays for voyage expenses and operating expenses such as

crewing, supplies, maintenance and repairs including special survey and dry-docking costs.

Vessels operating in the spot market generate revenues that are less predictable but may enable us to capture increased

profit margins during periods of improvements in LNG charter rates, although we are then exposed to the risk of declining LNG

carrier charter rates. Typically, spot market charters can last from a few days up to two months. If we commit vessels to period

charters, future spot market rates may be higher or lower than those rates at which we have period chartered our vessels.

In formulating our chartering strategy, we evaluate past, present and future performance of the freight markets and

balance the mix of our chartering arrangements in order to achieve optimal results for the fleet. As of March 15, 2022, we have

one vessel operating in the spot market, three vessels on time charters expiring in one year and nine vessels on time charters

expiring from two to five years. In terms of charter coverage as of March 15, 2022, we had approximately 91% of the available

calendar days fixed under period charters for 2022, and approximately 72% for 2023.

According to industry reports, the United States is currently expected to continue to increase its exports of LNG

products. In the event this creates more demand for vessels like ours, we would expect to deploy more vessels in the United

States and the Caribbean. As freight rates usually vary between these areas as well as voyage and operating expenses, we

evaluate such parameters when positioning our vessels for new employment.

Customers

Our assessment of a charterer’s financial condition and reliability is an important factor in negotiating employment for

our vessels. Principal charterers include producers of LNG products, such as national, major and other independent energy

companies and energy traders, and industrial users of those products. For the year ended December 31, 2021, we had four

customers accountable for more than 66.1% of our total revenues.

In March 2019, we entered into a time charter agreement with an international energy major for the employment of the

vessel Flex Enterprise. The time charter had an initial firm period of 12 months, commencing at the end of the first quarter of

2019. The charterer has options to extend the charter period up to an additional four years, in 12-month periods. The first 12-

month extension option was declared by the charterer in January 2020, extending the firm period under the time charter to the

end of the first quarter of 2021. The second 12-month extension option was declared by the charterer in December 2020,

extending the firm period under the time charter to end of the first quarter of 2022. The time charter has elements of a variable

rate of hire.

In November 2019, we entered into a long-term time charter with Clearlake for the employment of the Flex Artemis.

The time charter has a firm period of five years, and the charterer has options to extend the charter period for an additional five

years, in 12-month periods. The vessel immediately commenced its long-term time charter with Clearlake upon its delivery in

August 2020 . The time charter has elements of a variable rate of hire.

In August 2020, the Flex Aurora commenced a fixed rate time charter with an international utility company. Following

amendments in September 2020, the firm period under the charter has been extended from eight to 11 months, with the

charterers' option to extend the period by up to an additional six months, which was declared.

In September 2020, the Flex Resolute commenced a fixed rate time charter with an international utility company. The

charter has a firm period of 11 months, with the charterers' option to extend the period by up to six months, in 3-month periods,

which were both declared.

In October 2020, the Flex Amber commenced a time charter with an international energy major. The charter has a firm

period of 12 months. In August 2021, an option was declared extending the variable rate time charter by one additional year.

The charterer has the option to extend the time charter by one additional year.The time charter has elements of a variable rate of

hire.

In January 2020, the Flex Rainbow commenced a fixed rate time charter with an international trading house. The

charter has a firm period of 12 months, with the charters' option to extend the period by 12 months, which was declared.

In April 2021, we entered into fixed rate time charter agreements with Cheniere for four LNG carriers with the option

for a fifth LNG carrier. Under the agreements: Flex Endeavour was delivered to Cheniere in April 2021 with a firm period

ending in the first quarter of 2025; Flex Vigilant was delivered to Cheniere in May 2021 with a firm period ending in the second

quarter of 2024; Flex Ranger was delivered to Cheniere in August 2021 with a firm period ending in the first quarter of 2025.

The fourth vessel will be delivered to Cheniere in the third quarter of 2022, with a firm period expected to be ending in the first

quarter of 2026. Cheniere will also have the option to add a fifth vessel during the third quarter of 2022 with a firm period

expected to be ending in the first quarter of 2026. Under each time charter agreement, Cheniere has options to extend the

charter period for each vessel by up to two additional years. The time charter agreements remain subject to certain customary

closing conditions in connection with the delivery and acceptance of the remaining optional vessel.

In May 2021, we entered into a fixed rate time charter agreement with an international trading house for the vessel,

Flex Constellation. The time charter commenced in May 2021 and has a firm period ending in the second quarter of 2024 with

options to extend the term of the charter by up to three years.

In May 2021, we entered into a fixed rate time charter agreement with an LNG portfolio player, for a firm period of a

minimum of five years for Flex Freedom. The charter commenced in the first quarter of 2022 immediately following the

expiration of her existing time charter. The charterer has the option to extend the period by an additional two years.

In November 2021, we entered into fixed rate time charter agreements with minimum firm periods of three years with

an international energy major for two LNG carriers, Flex Resolute and Flex Courageous. Under the agreements, the two vessels

were delivered during the first quarter of 2022 in direct continuation of their existing time charters. The agreements include the

options to extend each vessel by up to four additional years in two-year periods.

Management Structure

General Management Agreements

In October 2021, we entered into a service level agreement with a Front Ocean Management AS where they will

provide to us certain advisory and support services including human resources, shared office costs, administrative support, IT

systems and services, compliance, insurance and legal assistance. In the year ended December 31, 2021, we recorded an

expense, within administrative expenses, of $0.1 million for these services.

We have entered into a general management agreement with Flex LNG Bermuda Management Limited, our wholly

owned subsidiary, for the provision of management services, which primarily include, among others, general administration,

contract management, corporate governance assistance, accounting service and operational support. Flex LNG Bermuda

Management Limited has, in turn, subcontracted these services from certain of our other subsidiaries, including Flex LNG

Management AS and Flex LNG Management Limited. We reimburse Flex LNG Bermuda Management Limited for expenses

incurred in connection with providing these services to us, plus a mark-up, which fee is subject to annual review and

adjustment. Each of the Company and Flex LNG Bermuda Management Limited may terminate the general management

agreement upon twelve months’ prior written notice to the other party. In addition, we may terminate the general management

agreement with immediate effect upon a breach of the agreement by Flex LNG Bermuda Management Limited that continues

for a period of 14 days after the date on which we deliver written notice to Flex LNG Bermuda Management Limited of the

breach. The total compensation to Flex LNG Management AS for the year ended December 31, 2021 was $4.6 million (2020:

$2.1 million). The total compensation to Flex LNG Management Limited for the year end December 31, 2021 was $1.3 million

(2020: $0.8 million).

We have an administrative services agreement with Frontline Management AS, ("Frontline Management"), a related

party, under which they provide us with certain administrative support, technical supervision, purchase of goods and services

within the ordinary course of business and other support services, for which we pay our allocation of the actual costs they incur

on our behalf, plus a margin. Frontline Management may subcontract these services to other associated companies, including

Frontline Management (Bermuda) Limited. In the year ended December 31, 2021, we recorded an expense, within

administrative expenses, of $0.5 million from Frontline Management and associated companies for these services (2020:

$0.3 million (2019: $1.0 million)).

We also have a services agreement with Seatankers Management Co. Ltd., or Seatankers, a related party, under which

they provide us with certain advisory and support services, for which we pay our allocation of the actual costs they incur on our

behalf, plus a margin. We may terminate the services agreement upon not less than 20 business days’ written notice. In the year

ended December 31, 2021, we recorded an expense, within administrative expenses, of $0.1 million from Seatankers for these

services (2020: $0.3 million (2019: $0.5 million)).

Technical Management and Support Services

The Company has a ship management agreements with Flex LNG Fleet Management AS, a related party owned by

Frontline Ltd., for which they are responsible for the technical ship management for all of our entire fleet. Under the

agreements, Flex LNG Fleet Management AS is paid a fixed fee per vessel per annum, which is subject to an annual review. In

the year ended December 31, 2021, we recorded an expense, within vessel operating expenses, of $3.2 million from Flex LNG

Fleet Management AS for these services (2020: $1.8 million (2019: $0.2 million)). For a description of our technical

management and support services, please see “Item 7. Major Shareholders and Related Party Transactions-B. Related Party

Transactions-Technical Management and Support Services.”

Consultancy Services

The Company has a consultancy agreement with FS Maritime SARL for the employment of our Chief Commercial

Officer. The fee is set at a maximum of CHF437,995 per annum and is charged on a pro-rated basis for the time allocation of

consultancy services incurred. The contract was terminated in December 2021, and will expire in March 2022. In the year

ended December 31, 2021, we recorded an expense, within administrative expenses, of $0.3 million from FS Maritime SARL

for these services (2020: $0.2 million).

The Liquefied Natural Gas Industry

This section discusses the industry and markets in which we operate. Certain of the information in this section relating

to market environment, market developments, growth rates, market trends, industry trends, competition and similar information

are estimates based on data compiled by professional organizations, consultants and analysts; in addition to market data from

other external and publicly available sources, and our knowledge of the markets. Any forecast information and other forward-

looking statements in this market summary are not guarantees of future outcomes and these future outcomes could differ

materially from current expectations. Numerous factors could cause or contribute to such differences, including those risks

described in "Item 3. Key Information—D. Risk Factors."

Introduction

The Company's business is marine transportation of LNG, referred to as LNG shipping. The marine transportation is

done by means of specialized ships, referred to as LNG carriers, which are vessels built to meet the specialized requirement of

the LNG products.

LNG is used as a term to describe the super cool liquid form of natural gases, being a mix of hydrocarbon gasses

(mainly methane, but also commonly including varying amounts of other higher alkanes and various other gases). The natural

gas can primarily be extracted from oil fields or natural gas fields, but in recent years an increasing amount of gas is being

extracted from more challenging and untraditional resource types such as sour gas, tight gas, shale gas and coal-bed methane.

An important source of energy, natural gas is non-toxic, clean-burning and relatively inexpensive. Although

predominantly used for electricity generation, heating and cooking, natural gas is also utilized as a chemical feedstock in the

industrial sector and, to a lesser extent, as fuel for vehicles. In producing regions with a high natural gas demand, pipelines are

constructed when it is economically feasible to transport natural gas in from a wellsite to an end consumer. In end-user regions

without access to pipelines, natural gas may be transported on tanker trucks or railway tankers (if by land) or by LNG carriers

(if by sea).

LNG is a product that requires processing both at the supplying and at the receiving end of the transportation chain.

This is because transportation is only economically feasible when the gas is in a liquid state. Liquefaction of natural gas reduces

the volume to 1/600 of the gaseous state and therefore makes it economical for transportation by sea.

At the supply source of the transportation chain, liquefaction is done at specialized liquefaction plants, referred to as

"liquefaction trains", where undesired heavy hydrocarbons and non-hydrocarbons are removed from the natural gas before

cooling the natural gas to approximately -163 °C (-260 °F) to become liquid at close to atmospheric pressure. Similarly, at the

receiving end of the transportation chain, the LNG is regasified to its gaseous state before being distributed to the end-user

through pipelines.

LNG shipping is closely related to the liquefaction and regasification processes that take place at either end of the

transportation chain. Liquefaction can be done onboard specialized ships (floating liquefaction plants), being a relatively new

trend in the LNG business. Regasification onboard Floating Storage Regasification Units ("FSRUs") have also become an

important part of the LNG business.

LNG supply and demand

The volume of LNG shipping amounted to approximately 380 million tonnes in 2021 in terms of export volumes. This

volume has been subject to large changes, having increased from approximately 114 million tonnes in 2000. Among the factors

that have contributed to this growth, are relatively low gas prices, a focus on reduction of air pollution and greenhouse gas

emissions, large new discoveries and developments of natural gas resources, large developments of liquefaction plants to

monetize these resources, as well as factors contributing to reducing the cost of importing LNG, such as FSRUs. During this

period, there have been large changes both in the supplying (exporting) and consuming (importing) regions for LNG, giving

rise to a more complex pattern of seaborne transportation.

Demand for natural gas and LNG is closely correlated with general energy demand, which in turn is closely related to

economic growth and development. Factors impacting the demand for natural gas also include environmental awareness

(particularly in comparison with coal) and relative price to other energy sources (particularly crude oil). The main rationale for

securing access to natural gas has been economics – as natural gas is more cost effective than running power plants on fuel oil.

In addition to the economic rationales for substituting other sources of energy with natural gas, the list of operational projects

reveal other reasons for wanting access to LNG, including lack of sufficient electricity generation from hydro power plants (e.g.

Brazil), large seasonal differences in demand (e.g. Dubai/Kuwait), security of supply and geopolitical considerations (e.g.

Lithuania), falling domestic natural gas production (e.g. Egypt), and increased demand for energy, or LNG volumes already

contracted on long-term deals (e.g. Indonesia). Also, factors such as the temporary shutdown of nuclear power plants in Japan

following the Fukushima disaster in 2011 have impacted LNG demand.

The LNG carrier Fleet

LNG carriers have been built since 1964. In January 2022, the fleet was made up of approximately 640 LNG carriers

(>125,000 cbm) with various cargo and propulsion systems. The orderbook for LNG carriers as of January 2022 for vessels

larger than 125,000 cbm stands at approximately 163 vessels. Up to 2010, LNG carriers were generally constructed with steam

turbines for propulsion. While these vessels still make up a large part of the fleet, they have a cost disadvantage to modern

vessels due to higher fuel consumption. Starting around 2006, the first four stroke medium speed diesel electric LNG carriers

were delivered, making up the bulk of the current modern tonnage. Starting around 2016, the first LNG carriers with slow speed

two stroke engines referred to as MEGI (high pressure) or X-DF (low pressure) were delivered, which were specifically made

for ships propelled by gas.

Rate developments

The majority of the LNG carrier fleet is contracted on long term contracts that link specific exporters to specific

importers. This contract structure means that a large part of the LNG shipping business is of a more industrial nature than many

other shipping businesses. However, there is also a part of the LNG carrier fleet that is constructed without contract coverage at

the time of ordering. These LNG carriers will typically either serve short-term spot trading or fixed on long term contracts.

The spot and short-term contract market is influenced by supply and demand imbalances, and may be volatile. The

market spiked in 2011/2012 following the Fukushima disaster in Japan, as all Japanese nuclear power plants were temporarily

shut down. This caused the demand for natural gas to increase significantly in Asia and LNG prices increased as well. As a

result there was a large price differential for LNG between Europe and Asia and the demand for LNG carriers increased with

the flow of LNG from Atlantic to the Pacific. In late 2014 and 2015 the price for crude oil dropped significantly along with a

slowdown in the global economy, resulting in the drop in LNG prices in Asia and the closing of the arbitrage between Atlantic

and Pacific base prices. Since that period, the market has been characterized by an oversupply of LNG tonnage, mainly caused

by delays in new LNG capacity coming on stream, particularly in Australia, and the reduced into basin trading. This overhang

of tonnage caused freight rates to be depressed. In the more recent period, the market has seen strong growth in LNG

production and export capacity, particularly in the US, leading to a more balanced market. Although 20 million tonnes of

liquefaction capacity came on stream in 2020, COVID-19 put pressure on energy demand, as lockdown pushed gas prices to

historical low levels. This diminished the spread between the major importing and exporting regions, leading to approximately

189 cargo cancellations from the US, which lowered vessel utilization and ultimately freight rates. As Asian gas prices

recovered towards the end of 2020 and into 2021 on the back of record cold weather and supply disruptions in the Asian region,

freight rates reached historical highs for a short period. In April and March 2021, there was a typical downward seasonal

adjustment in the LNG market when both freight and product market fell from all-time high levels at the start of the year. After

this period, the spot LNG freight market remained relatively conducive in the summer despite a lack of spot fixtures due to

most charterers engaging in long term agreements and re-lets, therefore reducing the demand for spot fixtures. After a relatively

static August and September 2021, the spot LNG freight market began to improve towards the end of September with rapidly

increasing freight rates, continuing into October through to December 2021, where spot LNG freight market surpassed record

levels in the early 2021. As we are heading into summer season, prices have retracted as the weather has moderated towards

normal levels.

Environmental and Other Regulations in the Shipping Industry

Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to

international conventions and treaties, national, state and local laws 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.

A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These

entities include the local port authorities (applicable national authorities such as the United States Coast Guard ("USCG"),

harbor master or equivalent), classification societies, flag state administrations (countries of registry) and charterers, particularly

terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the

operation of our vessels. Failure to maintain 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 all of our vessels that emphasize operational safety, quality maintenance,

continuous training of our officers and crews and compliance with United States and international regulations. We believe 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 stricter requirements, 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 Organisation

The International Maritime Organisation, the United Nations agency for maritime safety and the prevention of

pollution by vessels (the "IMO"), has adopted the International Convention 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"). MARPOL establishes environmental standards relating to oil leakage or spilling,

garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances

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 different source 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 V relate to sewage and

garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO

in September of 1997; new emissions standards, titled IMO-2020, took effect on January 1, 2020.

Vessels that transport gas, including LNG carriers and FSRUs, are also subject to regulation under the International

Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk, or the IGC Code, published by the IMO.

The IGC Code provides a standard for the safe carriage of LNG and certain other liquid gases by prescribing the design and

construction standards of vessels involved in such carriage. The completely revised and updated IGC Code entered into force in

2016, and the amendments were developed following a comprehensive five-year review and are intended to take into account

the latest advances in science and technology. Compliance with the IGC Code must be evidenced by a Certificate of Fitness for

the Carriage of Liquefied Gases in Bulk. Non-compliance with the IGC Code or other applicable IMO regulations may subject

a shipowner or a bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected

vessels and may result in the denial of access to, or detention in, some ports. We believe that each of our vessels is in

compliance with the IGC Code.

In June 2015 the IMO formally adopted the International Code of Safety for Ships using Gases or Low flashpoint

Fuels, or the IGF Code, which is designed to minimize the risks involved with ships using low flashpoint fuels- including LNG.

The IGF Code will be mandatory under SOLAS through the adopted amendments. The IGF Code and the amendments to

SOLAS became effective January 1, 2017.

Our LNG vessels may also become subject to the 2010 HNS Convention, if it is entered into force. The Convention

creates a regime of liability and compensation for damage from hazardous and noxious substances, HNS, including liquefied

gases. The 2010 HNS Convention sets up a two-tier system of compensation composed of compulsory insurance taken out by

shipowners and an HNS Fund which comes into play when the insurance is insufficient to satisfy a claim or does not cover the

incident. Under the 2010 HNS Convention, if damage is caused by bulk HNS, claims for compensation will first be sought from

the shipowner up to a maximum of 100 million Special Drawing Rights, or SDR. If the damage is caused by packaged HNS or

by both bulk and packaged HNS, the maximum liability is 115 million SDR. Once the limit is reached, compensation will be

paid from the HNS Fund up to a maximum of 250 million SDR. The 2010 HNS Convention has not been ratified by a sufficient

number of countries to enter into force, and we cannot estimate the costs that may be needed to comply with any such

requirements that may be adopted with any certainty at this time.

The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if

any, may be passed by the IMO and what effect, if any, such regulation may have on our operations.

Air Emissions

In 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 oxide emissions from all commercial vessel exhausts and prohibits

"deliberate emissions" of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile

compounds 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 to be 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 currently compliant in all material respects with these regulations.

The MEPC adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter

and ozone depleting 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 progressive reduction 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 oxide

emissions 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 cleaning systems. 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, with the exception of

vessels fitted with exhaust gas cleaning equipment (“scrubbers”) which can carry fuel of higher sulfur content, were adopted

and took effect from March 1, 2020. These regulations subject 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 use fuel 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 specified portions

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 controls and may cause us to incur additional costs. Other areas in China are subject

to local regulations that impose stricter emission controls. In December 2021, the member states of the Convention for the

Protection of the Mediterranean Sea Against Pollution (“Barcelona Convention”) agreed to support the designation of a new

ECA in the Mediterranean. The group plans to submit a formal proposal to the IMO by the end of 2022 with the goal of having

the ECA implemented by 2025. If other ECAs are approved by the IMO, or other new or more stringent requirements relating

to emissions from marine diesel engines or port operations by vessels are adopted by the Environmental Protection Agency

("EPA") or the states where we operate, compliance with these regulations could entail significant capital expenditures or

otherwise increase the costs of our operations.

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 MEPC meeting 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 vessels with 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 MEPC 70 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 some senses stricter) emissions standards in late 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 collect and 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 as the

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 Energy Efficiency Management Plans, or SEEMPS, and new ships must be

designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design

Index, or 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 to MARPOL Annex VI which brings forward the effective date of the EEDI’s

“phase 3” requirements from January 1, 2025 to April 1, 2022 for several ship types, including gas carriers, general cargo ships,

and LNG carriers.

Additionally, MEPC 75 introduced draft amendments to Annex VI which impose new regulations to reduce

greenhouse gas emissions from ships. These amendments introduce requirements 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 intensity reduction 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, in accordance with

different values set for ship types and categories. With respect to the CII, the draft amendments would require ships of 5,000

gross tonnage to document and verify their actual annual operational CII achieved against a determined required annual

operational CII. Additionally, MEPC 75 proposed draft amendments requiring that, on or before January 1, 2023, all ships

above 400 gross tonnage must have an approved SEEMP on board. For ships above 5,000 gross tonnage, the SEEMP would

need to include certain mandatory content. MEPC 75 also approved draft amendments to MARPOL Annex I to prohibit the use

and carriage for use as fuel of heavy fuel oil (“HFO”) by ships in Arctic waters on and after July 1, 2024. The draft amendments

introduced at MEPC 75 were adopted at the MEPC 76 session, to be held on June 2021 and are expected to enter into force on

November 1, 2022, with the requirements for EEXI and CII certification coming into effect from January 1, 2023. MEPC 77

adopted a non-binding resolution which urges Member States and ship operators to voluntarily use distillate or other cleaner

alternative fuels or methods of propulsion that are safe for ships and could contribute to the reduction of Black Carbon

emissions from ships when operating in or near the Arctic.

We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may

be adopted that could require the installation of expensive emission control systems and could adversely affect our business,

results of operations, cash flows and financial condition.

Safety Management System Requirements

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, or 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 with SOLAS

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"), our operations are also subject to environmental standards and

requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management

system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions

and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the

safety management system that our manager has developed for compliance 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 available insurance

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's management 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 of compliance, 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 our vessels for which the certificates are required by the IMO. The document of compliance

and safety management certificate 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 and stability 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 oil tankers

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 structural requirements

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 Maritime Dangerous Goods Code, or IMDG Code. Effective January 1, 2018,

the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the

International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3)

new mandatory training requirements. Amendments which 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 IMO type 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 upcoming amendments, which will come into force on June 1, 2022, include (1) addition of a

definition of dosage rate, (2) additions to the list of high consequence dangerous goods, (3) new provisions for medical/clinical

waste, (4) addition of various ISO standards for gas cylinders, (5) a new handling code, and (6) changes to stowage and

segregation provisions.

The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for

Seafarers, or STCW. As of February 2017, all seafarers are required to meet the STCW standards and be in possession of a

valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which

have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.

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”). The Polar Code, which entered into force on January 1, 2017, covers

design, construction, equipment, operational, training, search and rescue as well as environmental protection matters relevant to

ships operating in the waters surrounding the two poles. It also includes mandatory measures regarding safety and pollution

prevention as well as recommendatory provisions. 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 relevant requirements by the earlier of

their first intermediate or renewal survey.

Furthermore, recent action by the IMO's Maritime Safety Committee and United States agencies indicates that

cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat

cybersecurity threats. By IMO resolution, administrations are encouraged to ensure that cyber-risk management systems are

incorporated by ship-owners and managers by their first annual Document of Compliance audit after January 1, 2021. In

February 2021, the U.S. Coast Guard published guidance on addressing cyber risks in a vessel's safety management system.

This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional

expenses and/or capital expenditures. The impact of future regulations is hard to predict at this time.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions that impose liability for pollution in international waters and the

territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the

Control and Management of Ships' Ballast Water and Sediments, or BWM Convention, in 2004. The BWM Convention 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 of new or invasive aquatic organisms and pathogens within ballast water and

sediments. The BWM Convention's implementing regulations call for a phased introduction of mandatory ballast 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 ballast water 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 date and 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 of ballast water

management systems on such vessels at the first International Oil Pollution Prevention, or IOPP renewal survey following entry

into force of the convention. The MEPC adopted 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 was also discussed and

amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Those changes

were adopted at MEPC 72. Ships over 400 gross tons generally must comply with a "D-1 standard," requiring the exchange of

ballast water only in open seas and away from coastal waters. The "D-2 standard" specifies the maximum amount of viable

organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date

of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships,

compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted

organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or

biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved in

accordance with IMO Guidelines (Regulation D-3). As of October 13, 2019, MEPC 72’s amendments to the BWM Convention

took effect, making the Code for Approval of Ballast Water Management Systems, which governs assessment of ballast water

management systems, mandatory rather than permissive, and formalized an implementation schedule for the D-2 standard.

Under these amendments, all ships must meet the D-2 standard by September 8, 2024. Costs of compliance with these

regulations may be substantial. Additionally, in November 2020, MEPC 75 adopted amendments to the BWM Convention

which would require a commissioning test of the ballast water management system for the initial survey or when performing an

additional survey for retrofits. This analysis will not apply to ships that already have an installed BWM system certified under

the BWM Convention. These amendments are expected to enter into force on June 1, 2022.

Once mid-ocean ballast exchange or ballast water treatment requirements become mandatory under the BWM

Convention, the cost of compliance could increase for ocean carriers and may have a material effect on our operations.

However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent

the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters

from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain

reporting requirements.

The 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 in 2000 (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 be strictly 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 certain limits 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 compensation limits 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 is caused 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 covered by 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 for environmental 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 are in 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 Bunker Convention

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 national or 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 carried as 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 the Bunker 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 Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or

the "Anti‑fouling Convention." The Anti‑fouling Convention, 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 of vessels. 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 International Anti‑fouling System Certificate is issued for the first time; and subsequent surveys when the

anti‑fouling systems are altered or replaced. We have obtained Anti‑fouling System Certificates for all of our vessels that are

subject to the Anti‑fouling Convention.

In November 2020, MEPC 75 approved draft amendments to the Anti-fouling Convention to prohibit anti-fouling

systems containing cybutryne, which would apply to ships from January 1, 2023, or, for ships already bearing such an

antifouling system, at the next scheduled renewal of the system after that date, but no later than 60 months following the last

application to the ship of such a system. In addition, the IAFS Certificate has been updated to address compliance options for

anti-fouling systems to address cybutryne. Ships which are affected by this ban on cybutryne must receive an updated IAFS

Certificate no later than two years after the entry into force of these amendments. Ships which are not affected (i.e. with

antifouling systems which do not contain cybutryne) must receive an updated IAFS Certificate at the next Anti-fouling

application to the vessel.These amendments were formally adopted at MEPC 76 in June 2021.

Compliance Enforcement

Noncompliance 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 insurance coverage 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 in compliance

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 is ISM 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 is impossible 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.

United States Regulations

The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act

The U.S. Oil Pollution Act of 1990 (the "OPA") established an extensive regulatory and liability regime for the

protection and cleanup of the environment from oil spills. OPA affects all "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 sea and its 200 nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive

Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous

substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define "owner

and operator" in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and

CERCLA impact our operations.

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 third party, 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, including bunkers

(fuel). OPA defines these other damages broadly to include:

•injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;

•injury to, or economic losses resulting from, the destruction of real and personal property;

•loss of subsistence use of natural resources that are injured, destroyed or lost;

•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;

•lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural

resources; and

•net cost of increased or additional public services necessitated by removal activities following a discharge of oil,

such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.

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 OPA liability 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 for inflation).

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 a responsible 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 on liability 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 the incident; (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 Water Pollution Act (Section 311 (c), (e)) or the

Intervention on the High Seas Act.

CERCLA 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, or destruction 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 the discharge 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 per gross 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 (rendering the 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 the primary 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 responsible person 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 to establish 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. We comply 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 regulations regarding offshore oil and gas drilling and a pilot inspection

program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. For example,

the U.S. Bureau of Safety and Environmental Enforcement’s (the "BSEE") revised Production Safety Systems Rule (the

"PSSR"), effective December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016

PSSR. Additionally, the BSEE amended the Well Control Rule, effective July 15, 2019, which rolled back certain reforms

regarding the safety of drilling operations, and the former U.S. President Trump had proposed leasing new sections of U.S.

waters to oil and gas companies for offshore drilling. In January 2021, current U.S. President Biden signed an executive order

temporarily blocking new leases for oil and gas drilling in federal waters. However attorney generals from 13 states filed suit in

March 2021 to lift the executive order, and in June 2021, a federal judge in Louisiana granted a preliminary injunction against

the Biden administration, stating that the power to pause offshore oil and gas leases “lies solely with Congress.” With these

rapid changes, compliance with any new requirements of OPA and future legislation or regulations applicable to the operation

of our vessels could impact the cost of our operations and adversely affect our business.

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 a minimum, 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 navigable waterway

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 hazardous substance. 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 within their waters, although in

some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel

owners' responsibilities under these 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 billion per incident for each of our

vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have an adverse effect on our

business and results of operation.

Other United States Environmental Initiatives

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (the "CAA") requires the EPA to

promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject

to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting

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 quality standards in each state. Although state-specific, SIPs may include regulations concerning

emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. Our

vessels operating in such regulated port areas with restricted cargoes are equipped with vapor recovery systems that satisfy

these existing requirements.

The U.S. Clean Water Act (the "CWA") prohibits the discharge of oil, hazardous substances and ballast water in U.S.

navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for

any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages

and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of "waters of the

United States" (the "WOTUS"), thereby expanding federal authority under the CWA. Following litigation on the revised

WOTUS rule, in December 2018, the EPA and Department of the Army proposed a revised, limited definition of WOTUS. In

2019 and 2020, the agencies repealed the prior WOTUS Rule and promulgated the Navigable Waters Protection Rule

(“NWPR”) which significantly reduced the scope and oversight of EPA and the Department of the Army in traditionally non-

navigable waterways. On August 30, 2021, a federal district court in Arizona vacated the NWPR and directed the agencies to

replace the rule. On December 7, 2021, the EPA and the Department of the Army proposed a rule that would reinstate the

pre-2015 definition, which is subject to public comment until February 7, 2022.

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 ballast water 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 from entering

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 waters pursuant to VIDA, which was signed into law on December 4, 2018 and replaces the

2013 VGP program (which authorizes discharges incidental to operations of commercial vessels and contains numeric ballast

water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust

gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast water

management regulations adopted under NISA, such as mid-ocean ballast exchange programs and installation of approved

USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA

establishes a new framework for the regulation of vessel incidental discharges under the CWA, requires the EPA to develop

performance standards for those discharges within two years of enactment, and requires the U.S. Coast Guard to develop

implementation, compliance, and enforcement regulations within two years of EPA's promulgation of standards. Under VIDA,

all provisions of the 2013 VGP and USCG regulations regarding ballast water treatment remain in force and effect until the

EPA and U.S. Coast Guard regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must

continue to comply with the requirements of the VGP, including submission of a Notice of Intent (the "NOI") or retention of a

PARI form and submission of annual reports. We have submitted NOIs for our vessels where required. Compliance with the

EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels

or the implementation of other port facility disposal procedures at potentially substantial cost, or may otherwise restrict our

vessels from entering U.S. waters.

European Union Regulations

In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source

discharges of polluting substances, including minor discharges, if committed 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 the

discharge 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 or where 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) 2015/757 of 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 from maritime transport, and, subject to some exclusions, requires

companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually, which may cause us

to incur additional expenses.

The European Union has adopted several regulations and directives requiring, among other things, more frequent

inspections of high-risk ships, as determined by type, age, and flag 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 a definitive

ban for repeated offenses. The regulation also provided the European Union with greater authority and control over

classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments

for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced

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 VI relating 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 English Channel (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, use fuels 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. On July 14, 2021, the European Parliament formally proposed its plan,

which would involve gradually including the maritime sector from 2023 and phasing the sector in over a three-year period. This

will require shipowners to buy permits to cover these emissions. Contingent on negotiations and a formal approval vote, these

proposed regulations may not enter into force for another year or two.

International Labour Organization

The International Labour Organization (the "ILO"), is a specialized agency of the UN that has adopted the Maritime

Labor Convention 2006 ("MLC 2006"). A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is

required to ensure compliance with the MLC 2006 for all ships that are 500 gross tonnage or over and are either engaged in

international voyages or flying the flag of a Member and operating from a port, or between ports, in another country. We

believe that all our vessels are in substantial compliance with and are certified to meet MLC 2006.

Greenhouse Gas Regulation

Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the

United Nations Framework Convention on Climate Change, 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 targets extended 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 new treaty. 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 gas emissions. 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 limit greenhouse 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 to withdraw 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 Paris Agreement, 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 from ships 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 initial strategy identifies

"levels of ambition" to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through

implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an

average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008

emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while

pursuing efforts towards phasing them out 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. At MEPC 77, the Member States agreed to initiate the revision of the Initial IMO

Strategy on Reduction of GHG emissions from ships, recognizing the need to strengthen the ambition during the revision

process. A final draft Revised IMO GHG Strategy would be considered by MEPC 80 (scheduled to meet in spring 2023), with a

view to adoption.

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 its emissions 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 collect and

publish data on carbon dioxide emissions and other information. As previously discussed, regulations relating to the inclusion

of greenhouse gas emissions from the maritime sector in the European Union’s carbon market are also forthcoming.

In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted

regulations to limit greenhouse gas emissions from certain mobile sources, and proposed regulations to limit greenhouse gas

emissions from large stationary sources. However, in March 2017, former U.S. President Trump signed an executive order to

review and possibly eliminate the EPA's plan to cut greenhouse gas emissions, and in August 2019, the Administration

announced plans to weaken regulations for methane emissions. 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. On

November 2, 2021, the EPA issued a proposed rule under the CAA designed to reduce methane emissions from oil and gas

sources. The proposed rule would reduce 41 million tons of methane emissions between 2023 and 2035 and cut methane

emissions in the oil and gas sector by approximately 74 percent compared to emissions from this sector in 2005. EPA also

anticipates issuing a supplemental proposed rule in 2022 to include additional methane reduction measures following public

input and anticipates issuing a final rule by the end of 2022. If these new regulations are finalized, they could 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 the international level to succeed the Kyoto Protocol or Paris Agreement,

that restricts emissions of greenhouse gases could require us to make significant financial expenditures which we cannot 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 sea level changes or certain weather events.

Vessel Security Regulations

Since 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. Maritime Transportation Security Act of 2002 (the "MTSA"). To implement certain

portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard

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 Ship and 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 attain an

International Ship Security Certificate (the "ISSC") from a recognized security organization approved by the vessel's flag state.

Ships operating without a valid certificate may be detained, expelled from, or refused entry at port until they obtain an

ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-board

installation of automatic identification systems to provide a means for the automatic transmission of safety-related information

from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and

navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the

authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a

vessel's hull; a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state

whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number,

the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance

with flag state security certification requirements.

The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from

MTSA vessel security measures, provided such vessels have 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 a significant 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 the Gulf 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 of uninsured 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.

Inspection by Classification Societies

The 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 a vessel 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 a condition 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 Classification Societies, 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 July 1, 2015. The Rules attempt

to create a level of consistency between IACS Societies. All of our Operating Vessels are certified as being "in class" by all the

applicable Classification Societies (e.g. American Bureau of Shipping, Lloyds Register of Shipping, DNV).

A vessel must undergo annual surveys, intermediate surveys, dry-dockings and special surveys. In lieu of a special

survey, a vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically

over a five-year period. Every vessel is also required to be dry-docked every 30-36 months for inspection of the underwater

parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, dry-docking or

special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could

cause us to be in violation of certain covenants in our financing agreements. Any such inability to carry cargo 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 Insurance

General

The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss,

cargo loss or damage and business interruption due to political circumstances in foreign countries, piracy incidents, hostilities

and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other

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 liability insurance 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 risks can be insured, specific claims may be rejected, and we might not be always able to

obtain adequate insurance coverage at reasonable rates.

Marine and War Risks Insurance

We have in force marine hull and machinery and war risks insurance for all of our vessels. Our marine hull and

machinery insurance covers risks of particular and general average and actual or constructive total loss from collision, fire,

grounding, engine breakdown and other insured named perils up to an agreed amount per vessel. Our war risks insurance covers

the risks of particular and general average and actual or constructive total loss from acts of war and civil war, terrorism, piracy,

confiscation, seizure, capture, vandalism, sabotage, and other war-related named perils. We have also arranged coverage for

increased value for each vessel. Under this increased value coverage, in the event of total loss of a vessel, we will be able to

recover amounts in excess of those recoverable under the hull and machinery policy in order to compensate for additional costs

associated with replacement of the loss of the vessel. Each vessel is covered up to at least its fair market value at the time of the

insurance attachment and subject to a fixed deductible per each single accident or occurrence.

Protection and Indemnity Insurance

Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations,

and covers our third-party liabilities in connection with 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, claims arising 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, including wreck removal. Protection and indemnity insurance is a form of mutual indemnity

insurance, extended by protection and indemnity mutual associations, or "clubs."

Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The 13 P&I

Associations that comprise the International Group insure approximately 90% of the world's commercial tonnage and have

entered into a pooling agreement to reinsure each association's liabilities. The International Group's website states that the Pool

provides a mechanism for sharing all claims in excess of US$ 10 million up to, currently, approximately US$ 8.2 billion. As a

member of a P&I Association, which is a member of 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 associations and members of the

shipping pool of P&I Associations comprising the International Group.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and

certificates with respect to our vessels. The permits, licenses and certificates that are required depend upon several factors,

including the commodity transported, the waters in which the vessel operates, the nationality of the vessel's crew and the age of

the vessel. We have obtained all permits, licenses and certificates currently required to permit our vessels to operate. Additional

laws and regulations, environmental or otherwise, may be adopted which could limit our ability to do business or increase the

cost of us doing business.

LNG Safety

LNG shipping is generally safe relative to other forms of commercial marine transportation. In the past forty years,

there have been no significant accidents or cargo spillages involving an LNG carrier, even though over 40,000 LNG voyages

have been made during that time.

LNG is non-toxic and non-explosive in its liquid state. It only becomes explosive or inflammable when it is heated,

vaporized, and in a confined space within a narrow range of concentrations in the air (5% to 15%). The risks and hazards from

an LNG spillage vary depending on the size of the spillage, the environmental conditions, and the site at which the spillage

occurs.

Competition

We operate in markets that are highly competitive and based primarily on supply and demand. The process of

obtaining new time charters generally involves intensive screening and competitive bidding, and often extends for several

months. LNG carrier time charters are generally awarded based upon a variety of factors relating to the vessel operator,

including but not limited to price, customer relationships, operating expertise, professional reputation and size, age and

condition of the vessel. We believe that the LNG shipping industry is characterized by the significant time required to develop

the operating expertise and professional reputation necessary to obtain and retain charterers.

We expect substantial competition for providing marine transportation services for potential LNG projects from a

number of experienced companies, including state-sponsored entities and major energy companies. Many of these competitors

have significantly greater financial resources and larger and more versatile fleets than we do. We anticipate that an increasing

number of marine transportation companies, including many with strong reputations and extensive resources and experience,

will enter the LNG transportation market. This increased competition may cause greater price competition for time charters.

Seasonality

Historically, LNG trade, and therefore charter rates, increased in the winter months and eased in the summer months as

demand for LNG in the Northern Hemisphere rose in colder weather and fell in warmer weather. The LNG industry in general

has become less dependent on the seasonal transport of LNG than a decade ago as new uses for LNG have developed, spreading

consumption more evenly over the year. There is a higher seasonal demand during the summer months due to energy

requirements for air conditioning in some markets and a pronounced higher seasonal demand during the winter months for

heating in other markets.

C.Organizational Structure

FLEX LNG was initially incorporated under the laws of the British Virgin Islands in 2006 and re-domiciled, by way of

continuation, into Bermuda in 2017. We operate principally through our wholly-owned subsidiaries, which are incorporated in

Bermuda, the United Kingdom, Norway, the Isle of Man and the Marshall Islands. A list of our subsidiaries is filed herewith as

Exhibit 8.1.

D.Property, Plants and Equipment

We own no properties other than our vessels. For a description of our fleet, see "Item 4. Information on the Company

—B. Business Overview—Our Fleet."

We lease office space in Oslo, Norway from Seatankers Management Norway AS, a related party.

ITEM 4A.UNRESOLVED STAFF COMMENTS

None.

ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following presentation of management's discussion and analysis of results of operations and financial condition

should be read in conjunction with our audited consolidated financial statements, and related notes, and other financial

information appearing in "Item 18. Financial Statements." You should also carefully read the following discussion with the

sections of this annual report entitled "Item 3. Key Information—D. Risk Factors," "Item 4. Information on the Company—B.

Business Overview," and "Cautionary Statement Regarding Forward-Looking Statements." This discussion contains forward-

looking statements that reflect our current views with respect to future events and financial performance. Our actual results may

differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth

in "Item 3. Key Information—D. Risk Factors" and elsewhere in this annual report.

The audited consolidated financial statements as of and for the years ended December 31, 2021, 2020 and 2019 have

been prepared in accordance with U.S. GAAP. The financial statements are presented in U.S. dollars.

The Company’s business could be materially and adversely affected by the risks, or the public perception of the risks

related to the COVID-19 pandemic. The Company is unable to reasonably predict the estimated length or severity of the

COVID-19 pandemic on future operating results. Please see "Item 3. Key Information—D. Risk Factors—Our financial results

and operations may be adversely affected by the ongoing outbreak of COVID-19, and related governmental responses thereto”

for further information.

A.Operating Results

Important Financial and Operational Terms and Concepts

We use a variety of financial and operational terms and concepts when analyzing our performance. These include the

following:

Voyage Operating Revenues. Our time charter revenues are driven primarily by the number of vessels in our fleet, the

amount of daily charter hire that our LNG carriers earn under time charters and the number of revenue earning days during

which our vessels generate revenues. These factors are, in turn, affected by our decisions relating to vessel acquisitions, the

amount of time that our LNG carriers spend dry-docked undergoing repairs, maintenance and upgrade work, the age, condition

and specifications of our vessels and the levels of supply and demand in the LNG carrier charter market. Our revenues will also

be affected if any of our charterers cancel a time charter or if we agree to renegotiate charter terms during the term of a charter

resulting in aggregate revenue reduction. Our time charter arrangements have been contracted in varying rate environments and

expire at different times. The Company employs all of its vessels on time charter contracts, which the Company has established

to contain a lease since the vessel is a specified asset, the charterer has the right to direct the use of the vessel and there are no

substantive substitution rights. All revenue from time charter contracts are recognized as operating leases under ASC 842

Leases. We recognize revenues from time charters over the term of the charter as the applicable vessel operates under the

charter. Under time charters, revenue is not recognized during days a vessel is off-hire. Revenue is recognized from delivery of

the vessel to the charterer, until the end of the time charter period. Under time charters, we are responsible for providing the

crewing and other services related to the vessel's operations, the cost of which is included in the daily hire rate, except when

off-hire.

Refer to Note 2 in the Financial Statements for additional information related to ASC 842.

Off-hire (Including Commercial Waiting Time). When a vessel is "off-hire"—or not available for service—the

charterer generally is not required to pay the time charter hire rate and we are responsible for all costs. Prolonged off-hire may

lead to vessel substitution or termination of a time charter. Our vessels may be out of service, that is, off-hire, for several

reasons: scheduled dry-docking or special survey, vessel upgrades, maintenance or inspection, which we refer to as scheduled

off-hire; days spent waiting or positioning for a charter, which we refer to as commercial waiting time; and unscheduled repairs,

maintenance, operational efficiencies, equipment breakdown, accidents, crewing strikes, certain vessel detentions or similar

problems, or our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the

required crew, which we refer to as unscheduled off-hire. We have obtained loss of hire insurance to protect us against loss of

income in the event one of our vessels cannot be employed due to damage caused by perils that are covered under the terms of

our hull and machinery insurance. Under our loss of hire policies, our insurers will generally pay us the hire rate agreed in the

policy in respect of each vessel for each day in excess of 14 days and with a maximum period of 180 days.

Voyage Expenses. Voyage expenses primarily include port and canal charges, bunker (fuel) expenses and agency fees

which are paid for by the charterer under our time charter arrangements or by us during periods of off-hire except for

commissions, which are always paid for by us. We may incur voyage related expenses when positioning or repositioning

vessels before or after the period of a time charter, during periods of commercial waiting time or while off-hire during a period

of dry-docking. Voyage expenses can be higher when vessels trade on shorter term charters or in the spot market due to fuel

consumption during idling, cool down requirements, commercial waiting time in between charters and positioning and

repositioning costs. From time to time, in accordance with industry practice, we pay commissions ranging up to 1.25% of the

total daily charter rate under the charters to unaffiliated ship brokers, depending on the number of brokers involved with

arranging the charter.

Vessel Operating Expenses. Vessel operating expenses include crew wages and related costs, performance claims, the

cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, lubricant costs, statutory and

classification expenses, forwarding and communications expenses and other miscellaneous expenses. Vessel operating expenses

are paid by the ship-owner under time charters and are recognized as expenses when incurred. We expect that insurance costs,

dry-docking and maintenance costs will increase as our vessels age. Factors beyond our control, some of which may affect the

shipping industry in general, for instance, developments relating to market premiums for insurance, industry and regulatory

requirements and changes in the market price of lubricants due to increases in oil prices, may also cause vessel operating

expenses to increase.

Dry-docking. We must periodically dry-dock each of our vessels for inspection, repairs and maintenance and any

modifications required to comply with industry certification or governmental requirements. In accordance with industry

certification requirements, we have a mandatory obligation to dry-dock our vessels every five years. Special survey and dry-

docking costs (consisting of direct costs, including shipyard costs, paints and class renewal expense, and peripheral costs,

including spare parts, service engineer attendance) are capitalized and depreciated over the period until the next dry-dock. The

number of dry-dockings undertaken in a given period and the nature of the work performed determine the level of dry-docking

expenditures.

Depreciation. We depreciate the cost of our vessels on the basis of two components: a vessel component and a dry-

docking component. We depreciate our LNG carriers on a straight-line basis over their remaining useful economic lives.

Depreciation is based on the cost of the vessel less its estimated salvage value. We estimate the useful life of the LNG carriers

in our Fleet to be 35 years from their initial delivery from the shipyard, consistent with LNG industry practice. The estimated

residual value is based on the steel value of the tonnage for each vessel. The assumptions made reflect our experience, market

conditions and the current practice in the LNG industry; however they required more discretion since there is a lack of historical

references in scrap prices of similar types of vessels. The dry-docking component of the vessel’s cost is depreciated over five

years (the period within which each vessel is required to be dry-docked). We capitalize the costs associated with the dry-

docking and amortize these costs on a straight-line basis over the period to the next expected dry-docking. We have adopted the

"built in overhaul" method for when a vessel is newly acquired, or constructed, whereby a proportion of the cost of the vessel is

allocated to the components expected to be replaced at the next dry-docking based on the expected costs relating to the next

dry-docking.

Interest expense. We incur interest expense on outstanding indebtedness under our existing debt agreements which we

include in interest expense. Interest expense depends on our overall level of borrowings and may significantly increase when

we take delivery of, acquire or refinance ships. Interest expense may also change with prevailing interest rates, although interest

rate swaps or other derivative instruments may reduce the effect of these changes. We also incur financing and legal costs in

connection with establishing debt agreements, which are deferred and amortized to interest and finance costs using the effective

interest method. We may incur additional interest expense in the future on our outstanding borrowings and under future

borrowings. For a description of our existing credit facilities, please see "Item 5. Operating and Financial Review and Prospects

—B. Liquidity and Capital Resources—Our Borrowing Activities."

Vessel Useful Lives and Impairment. Vessels are reviewed for impairment quarterly or whenever events or changes in

circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset

or asset group to be tested for possible impairment, we first compare the undiscounted cash flows expected to be generated by

that asset to its carrying value. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow

basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through

various valuation techniques including discounted cash flow models, quoted market values and third-party independent

appraisals as considered necessary. Since our inception, no impairment loss was recorded in any of our fleet vessels.

Implications of Being an Emerging Growth Company

We had less than $1.07 billion in revenue during our last fiscal year, which means that we are an "emerging growth

company" as defined in the JOBS Act. As an emerging growth company, we may take advantage of specified reduced public

company reporting requirements that are otherwise applicable generally to public companies, including:

•an exemption from the auditor attestation requirement of management's assessment of the effectiveness of our

internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; and

•an exemption from compliance with any new requirements adopted by the PCAOB, requiring mandatory audit firm

rotation or a supplement to the auditor's report in which the auditor would be required to provide additional

information about the audit and financial statements.

We may choose to take advantage of some or all of these reduced reporting requirements. We may take advantage of

these provisions until the end of the fiscal year following the fifth anniversary of the effectiveness date of our registration

statement on Form 20-F, or such earlier time that we are no longer an emerging growth company. We will cease to be an

emerging growth company if we have more than $1.07 billion in "total annual gross revenues" during our most recently

completed fiscal year, if we become a "large accelerated filer" with a public float of more than $700 million, or as of any date

on which we have issued more than $1 billion in non-convertible debt over the three-year period prior to such date.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the

extended transition period for complying with new or revised accounting standards. In other words, an emerging growth

company can delay the adoption of certain accounting standards until those standards would otherwise apply to private

companies. We have elected to "opt out" of such extended transition period, and as a result, we will comply with new or revised

accounting standards as required when they are adopted for public companies. Section 107 of the JOBS Act provides that our

decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

For as long as we take advantage of the reduced reporting obligations, the information that we provide shareholders

may not be compatible to information provided by other public companies. See "Item 3. Key Information—D. Risk Factors—

We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging

growth companies will make our ordinary shares less attractive to investors."

Results of Operations

Year ended December 31, 2021 compared with the year ended December 31, 2020

Vessel operating revenues

(in thousands of $)

2021

2020

Change

Vessel operating revenues

343,448

164,464

178,984

Vessel operating revenues increased to $343.4 million for the year ended December 31, 2021 compared to

$164.5 million for the year ended December 31, 2020. The increase of $179.0 million is due to the growth of our Fleet from six

to thirteen LNG carriers between July 2020 and May 2021, improved vessel utilization and higher achieved market rates for our

vessels, when compared to the year ended December 31, 2020.

Voyage expenses

(in thousands of $)

2021

2020

Change

Voyage expenses

(3,334)

(3,697)

363

Voyage expenses, which include voyage specific expenses, broker commissions and bunkers consumption, for the year

ended December 31, 2021 amounted to $3.3 million, compared to $3.7 million for the year ended December 31, 2020.

Vessel operating expenses

(in thousands of $)

2021

2020

Change

Vessel operating expenses

(61,237)

(36,999)

(24,238)

Vessel operating expenses, including claim expense and technical operating expenses (such as crewing, insurance,

lubes and repairs & maintenance) for the year ended December 31, 2021 amounted to $61.2 million compared to $37.0 million

for the year ended December 31, 2020. The increase of $24.2 million is due to the increase in our Fleet from six to thirteen

LNG carriers between the period of July 2020 and May 2021.

Administrative expenses

(in thousands of $)

2021

2020

Change

Administrative Expenses

(7,887)

(6,302)

(1,585)

Administrative expenses increased by $1.6 million to $7.9 million for the year ended December 31, 2021 (2020:

$6.3 million). The increase is due to the increase in our administrative function with additional staff members as well as an

increase in directors and officers insurance and performance bonuses paid to staff in 2021.

Depreciation

(in thousands of $)

2021

2020

Change

Depreciation

(69,833)

(41,846)

(27,987)

Depreciation expense for the year ended December 31, 2021 was $69.8 million, compared to $41.8 million for the year

ended December 31, 2020. The increase in depreciation is due to the increase in our Fleet from six to thirteen LNG carriers

between the period of July 2020 and May 2021.

Interest income

(in thousands of $)

2021

2020

Change

Interest income

327

(286)

Interest income was $0.0 million for the year ended December 31, 2021 compared to $0.3 million for the year ended

December 31, 2020.

Interest expense

(in thousands of $)

2021

2020

Change

Interest expense

(56,221)

(41,805)

(14,416)

Interest expense was $56.2 million for the year ended December 31, 2021 compared to $41.8 million for the year

ended December 31, 2020. The increase in interest expense was due to the increase in debt following the drawdown of $636.5

million in aggregate under the $629 Million Facility between July 2020 and May 2021; the drawdown of the $156.4 million

under the Flex Amber Sale and Leaseback in October 2020; and the drawdown of $100 million under the $125 Million Facility

for Flex Volunteer, in January 2021. The increase in interest expense is offset by lower rates of LIBOR in 2021 compared to

2020 and regular repayments of long term debt of $72.2m in the year ended 2021.

Write-off of debt issuance costs

(in thousands of $)

2021

2020

Change

Write-off of debt issuance costs

(1,209)

—

(1,209)

In the year ended December 31,2021, the Company wrote off $1.2 million of debt issuance costs, compared to

$0.0 million for the year ended December 31, 2020. The increase was due to the write-off of debt issuance costs in relation to

the prepayment of the $125 Million Facility in December 2021.

Gain/(loss) on derivatives

(in thousands of $)

2021

2020

Change

Gain/(loss) on derivatives

18,399

(25,182)

43,581

Gain/(loss) on derivatives was $18.4 million for the year ended December 31, 2021 compared to $25.2 million for the

year ended December 31, 2020. This is due to the positive development in interest rates in the period, resulting in an increase in

the fair value of our interest rate swap derivatives.

Other financial items

(in thousands of $)

2021

2020

Change

Other financial items

137

(771)

908

Other financial items were $0.1 million for the year ended December 31, 2021 compared to $0.8 million for the year

ended December 31, 2020. This is primarily due to an increase in foreign exchange gains of $1.0 million, partly offset by other

financial charges of 0.1 million.

For the discussion of our operating results in 2020 compared with 2019, we refer to "Item 5. Operating and Financial

Review and Prospects - A. Operating Results" included in our annual report on Form 20-F for the year ended December 31,

2020, which was filed with the U.S. Securities and Exchange Commission on March 17, 2021.

B.Liquidity and Capital Resources

Liquidity and Cash Needs

We operate in a capital-intensive industry and have financed the purchase of the vessels and newbuildings in our Fleet

through a combination of cash generated from operations, equity capital and borrowings under our financing agreements.

Payment of amounts outstanding under our debt agreements, and all other commitments that we have entered into are made

from the cash available to us.

Cash

As of December 31, 2021, we reported cash, cash equivalents and restricted cash of $201.2 million, which represented

an increase of $72.2 million, compared to $129.0 million as of December 31, 2020.

Working Capital Needs

Working capital is equal to current assets less current liabilities, including the current portion of long-term debt. As of

December 31, 2021, we had positive working capital of $93.3 million, as compared to $26.0 million as of December 31, 2020.

Our primary liquidity requirements include payment of operating costs, funding working capital requirements,

repayment of bank loans, payment of lease obligations and maintaining sufficient cash reserves against fluctuations in operating

cash flows and payment of cash distributions. Sources of short-term liquidity include cash balances, revolving credit facilities,

restricted cash balances and receipts from customers. We believe that our cash flows from operations, amounts available for

borrowing under our financing agreements and our cash balance will be sufficient to meet our existing liquidity requirements

for at least the next 12 months from the date of this annual report.

Our Borrowing Activities

Flex Rainbow Sale and Leaseback

In July 2018, we, through our wholly-owned subsidiary, Flex LNG Rainbow Ltd., which owned the Flex Rainbow,

entered into a sale leaseback transaction for the vessel with a Hong Kong-based lessor for a lease period of ten years. The gross

sales price under the lease was $210 million, of which $52.5 million represented advance hire for the ten-year lease period. The

agreement includes fixed price purchase options, whereby we have options to re-purchase the vessel at or after the second

anniversary of the agreement, and on each anniversary thereafter, until the end of the lease period. The bareboat rate payable

under the lease has a fixed element, treated as principal repayment, and a variable element based on LIBOR plus a margin of

3.50% per annum calculated on the outstanding under the lease. The facility requires us to provide additional security, by way

of a deposit, as necessary to maintain the fair market value of the vessel at not less than a specified percentage of the principal

amount outstanding under the lease. As of December 31, 2021, the net outstanding balance under the lease was $131.1 million

(2020: $138.8 million).

$250 Million Term Loan Facility

In April 2019, we, through two of our wholly-owned subsidiaries, entered into the $250 Million Term Loan Facility

with a syndicate of banks for the part financing of the two newbuildings, Flex Constellation and Flex Courageous, which serve

as collateral for the facility. The first $125 million tranche under the facility was drawn upon the delivery of the Flex

Constellation in June 2019 and the second $125 million tranche under the facility was drawn upon the delivery of the Flex

Courageous in August 2019. The facility has a term of five years from delivery of the final vessel and bears interest at LIBOR

plus a margin of 2.35% per annum. The facility contains financial covenants (as described below) and requires us to provide

additional security or prepay an amount of the loan facility as necessary to maintain the fair market value of the vessels securing

the loan facility at not less than specified percentages of the principal amount outstanding under the loan facility. As of

December 31, 2021, the net outstanding balance under the facility was $219.2 million (2020: $230.9 million).

Hyundai Glovis Sale and Charterback

In April 2019, we, through two of our wholly owned subsidiaries, entered into sale and time charter agreements for the

vessels Flex Endeavour and Flex Enterprise. The transactions were executed in July 2019, whereby the vessels were sold to

Triple H No. 3 Ltd. and Triple H No. 4 Ltd., respectively, for a gross consideration of $210 million per vessel, with a net

consideration of $150 million per vessel adjusted for a non-amortizing and non-interest bearing seller’s credit of $60 million per

vessel. The vessels have been chartered back from Hyundai Glovis on a time-charter basis to us, through our subsidiaries, for a

period of ten years. The agreements include fixed price purchase options, whereby we will have annual options to acquire the

vessels during the term of the time-charters. The first option is exercisable on the third anniversary of closing of the transactions

and the last option at expiry of the ten-year charter period. At the end of the ten-year charter period, Hyundai Glovis will have

the right to sell the vessels back to us for a net consideration of $75 million per vessel, net of the $60 million seller’s credit per

vessel. Upon closing of the transactions with Hyundai Glovis, a portion of the proceeds were used to prepay the outstanding

aggregate amount of $194.3 million relating to these vessels under our $315 Million Term Loan Facility. As of December 31,

2021, the total net outstanding under the leases was $269.5 million (2020: $281.3 million).

$100 Million Facility

In July 2019, we, through one of our vessel owning subsidiaries, entered into the $100 Million Facility with a

syndicate of banks for the refinancing of the Flex Ranger, which was financed under the $315 Million Term Loan Facility. The

$100 Million Facility is split between a $50 million term loan and a $50 million revolving facility. The facility was fully drawn

in July 2019 and the proceeds were used to prepay the outstanding balance of $99.8 million relating to the Flex Ranger under

the existing $315 Million Term Loan Facility. The facility has a term of five years and bears interest at LIBOR plus a margin of

2.25% per annum. The facility contains financial covenants (as described below) and requires us to provide additional security

or prepay an amount of the loan facility as necessary to maintain the fair market value of the vessel securing the loan facility at

not less than specified percentages of the principal amount outstanding under the loan facility. In March 2021, the Company

signed an addendum to the facility, whereby the revolving tranche was increased by $20 million. The $20 million increase will

be non-amortizing and bear interest at LIBOR plus a margin of 2.25% per annum for any drawn amounts. As of December 31,

2021, the revolving facility was fully drawn and the total net outstanding balance under the facility was $108.1 million (2020:

$93.3 million).

$629 Million Term Loan Facility