6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2016

Commission File Number:  001-33283

EUROSEAS LTD.

(Translation of registrant's name into English)

4 Messogiou & Evropis Street

151 24 Maroussi, Greece

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [X]       Form 40-F [  ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [  ].

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [  ].

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K

Attached hereto as Exhibit 1 is Management's Discussion and Analysis of Financial Condition and Results of Operations and unaudited interim condensed consolidated financial statements and related information and data of Euroseas Ltd. (the "Company") as of and for the nine-month period ended September 30, 2016. Also attached hereto as Exhibit 101 is the Interactive Data file relating to the materials in this Report on Form 6-K, formatted in Extensible Business Reporting Language (XBRL).

This Report on Form 6-K is hereby incorporated by reference into the Company's Registration Statement on Form F-3 (File No. 333-194922) filed with the U.S. Securities and Exchange Commission (the "Commission") on March 31, 2014, as amended, and the Company's Registration Statement on Form F-3 (File No. 333-208305) filed with the Commission on December 2, 2015, as amended from time to time.

Exhibit 1

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of our financial condition and results of operations for the nine months ended September 30, 2016. Unless otherwise specified herein, references to the "Company" or "we" shall include Euroseas Ltd and its subsidiaries. You should read the following discussion and analysis together with theunaudited interim condensed consolidated financial statements and related notes included elsewhere in this report. For additional information relating to our management's discussion and analysis of financial condition and results of operations, please see our annual report on Form 20-F for the year ended December 31, 2015 filed with the U.S. Securities and Exchange Commission on May 2, 2016.

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents the Company's selected consolidated financial and other data for each of the two nine-month periods ended September 30, 2015 and 2016,   and as of December 31, 2015 and September 30, 2016.  The selected consolidated statement of operations and balance sheet data is derived from, and is qualified by reference to, our unaudited financial results for the nine-month periods ended September 30, 2015 and 2016. 

Euroseas Ltd. – Summary of Selected Historical Financials

	Nine Months Ended September 30,
	2015			2016
Statement of Operations Data
Voyage revenues		30,357,715			22,111,476
Related party revenue		180,000			180,000
Commissions		(1,672,566	)		(1,179,636	)
Voyage expenses		(1,204,320	)		(1,088,633	)
Vessel operating expenses		(19,575,241	)		(13,608,596	)
Drydocking expenses		(1,882,654	)		(1,725,240	)
Management fees		(3,177,465	)		(2,361,821	)
Vessel depreciation		(8,605,776	)		(6,569,978	)
Loss on termination of newbuilding contracts		-			(3,202,030	)
Gain on vessel sale		-			10,597
Other general and administration expenses		(2,533,286	)		(2,694,252	)
Operating loss		(8,113,593	)		(10,128,113	)
Total other expenses, net		(1,985,515	)		(16,464,085	)
Net loss		(10,099,108	)		(26,592,198	)
Dividend Series B Preferred Shares		(1,220,382	)		(1,283,808	)
Net loss available to common shareholders		(11,319,490	)		(27,876,006	)
Other Financial Data
Net cash provided by operating activities		132,966			213,419
Net cash used in investing activities		(8,601,437	)		(18,691,826	)
Net cash provided by financing activities		3,619,134			11,490,997
Loss per share attributable to common shareholders, basic and diluted		(1.92	)		(3.43	)
Weighted average number of shares outstanding during period, basic and diluted		5,903,609			8,116,343
Balance Sheet Data	December 31, 2015			September 30, 2016
Total current assets		21,584,299			23,602,528
Vessels, net		88,957,752			114,628,730
Advances for vessels under construction		32,701,867			3,847,758
Investment in joint venture		16,515,701			1,105,381
Other non-current assets		12,364,772			14,077,915
Total Assets		172,124,391			157,262,312
Current liabilities		19,241,147			9,149,402
Long term liabilities		25,755,402			47,368,818
Long term debt, net of current portion		25,552,702			47,010,657
Total liabilities		44,996,549			56,518,220
Mezzanine Equity		32,079,249			33,363,057
Total shareholders' equity		95,048,593			67,381,035

	Nine Months Ended September 30,
	2015			2016
Other Fleet Data (1)
Number of vessels		15.00			11.33
Calendar days		4,095			3,105
Available days		4,005			3,047
Voyage days		3,872			2,912
Utilization Rate (percent)		96.7	%		95.6	%
(In U.S. dollars per day per vessel)
Average TCE rate (2)		7,529			7,220
Vessel Operating Expenses		4,780			4,383
Management Fees		776			760
G&A Expenses		619			867
Total Operating Expenses excluding drydocking expenses		6,175			6,010
Drydocking expenses		460			556

(1) For the definition of calendar days, available days, voyage days and utilization rate see our annual report on Form 20-F for the year ended December 31, 2015 ("Item 5A-Operating Results.") filed on May 2, 2016.

(2) Time charter equivalent rate, or TCE rate, is determined by dividing voyage revenues less voyage expenses or time charter equivalent revenue, or TCE revenues, by the number of voyage days during the relevant time period. TCE revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating the Company's financial performance. TCE revenues and TCE rate are also standard shipping industry performance measures used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods (see also Item 5A-Operating Results).

Reconciliation of TCE revenues as reflected in the consolidated statement of operations and calculation of TCE rate follow:

	Nine Months Ended September 30,
	2015			2016
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
Voyage revenues		30,357,715			22,111,476
Voyage expenses		(1,204,320	)		(1,088,633	)
Time Charter Equivalent or TCE Revenues		29,153,395			21,022,843
Voyage days(1)		3,872			2,912
Average TCE rate		7,529			7,220

Nine months ended September 30, 2016 compared to nine months ended September 30, 2015.

Voyage revenues. Voyage revenues for the nine month period ended September 30, 2016 were $22.11 million, down 27.2% compared to the same period in 2015 during which voyage revenues amounted to $30.36 million. This decrease was due to the lower number of vessels operating during the period as compared to the same period of 2015. An average of 11.33 vessels operated in the nine months of 2016 for a total of 3,105 ownership days against an average of 15.0 vessels during the same period in 2015 or 4,095 ownership days, a 24.2% decrease.  The total number of days our vessels earned revenue decreased by 24.8% to 2,912 days in the first nine months of 2016 from 3,872 days in the same period in 2015. While employed, our vessels generated a TCE rate of $7,220 per day per vessel in the first nine months of 2016 compared to $7,529 per day per vessel for the same period in 2015 (see calculation in table above).  The average TCE rate our vessels achieved is a combination of the time charter rate earned by our vessels under time charter contracts, which is not influenced by market developments during the duration of the charter and the TCE rate earned by our vessels employed in the spot market or in market-indexed linked contracts which is influenced by market developments.  Market charter rates in the nine months of 2016 were lower for our drybulk vessels and for our containership vessels compared to the first nine months of 2015 which was reflected in the average earnings our ships earned. We had 57.7 scheduled offhire days, including drydocking and laid-up time, 127.8 commercial offhire and 7.5 operational offhire days in the first nine months of 2016 compared to 89.6 scheduled offhire days, including drydocking and laid-up time, 117.8 commercial offhire and 15.6 operational offhire days in the first nine months of 2015.

Related party revenue. Related party revenues reflect $0.18 million received from Euromar LLC, a joint venture of Euroseas, for administration services for the nine month period ended September 30, 2016 unchanged as compared to the same period of 2015.

Commissions. Commissions for the nine month period ended September 30, 2016 were $1.18 million. At 5.3% of voyage revenues, commissions were lower than in the same period of 2015 during which they accounted for 5.5% of our revenues. The overall level of commissions depends on the agreed commission for each charter contract.

Voyage expenses. Voyage expenses for the nine month period ended September 30, 2016 were $1.09 million and related to expenses for repositioning voyages between time charter contracts, ballast voyages and owners expenses at certain ports, compared to $1.2 million for the same period of 2015. Voyage expenses depend on the number of days our vessels are employed under voyage contracts (as opposed to time charter contracts), the number of days they are sailing for repositioning and any port or other costs incurred without a contract. Because our vessels are generally chartered under time charter contracts, voyage expenses represent a small percentage (4.9% and 4.0% during the first nine months of 2016 and 2015, respectively) of voyage revenues and are mainly incurred while our vessels are repositioned between time charter contracts and while our vessels are under voyage charters.

Vessel operating expenses. Vessel operating expenses excluding management fees were $13.6 million during the first nine months of 2016 compared to $19.58 million for the same period of 2015.  Daily vessel operating expenses excluding management fees per vessel decreased between the two periods to $4,383 per day per vessel in the first nine months of 2016 compared to $4,780 per day during the same period of 2015, a 8.3% decrease, mainly due to the disposal of three of our older vessels with higher daily cost at the end of 2015 and the addition of our newbuilding, Xenia, in February 2016 with lower daily cost which further reduced the average daily cost during the first nine months of 2016.

Related party management fees. These are part of the fees we pay to Eurobulk Ltd. ("Eurobulk") under our Master Management Agreement and Eurobulk (Far East) Ltd. Inc. ("Eurobulk FE") under a management agreement with our vessel owning subsidiary for vessel m/v Xenia. During the first nine months of 2016, Eurobulk charged us 685 Euros per day per vessel totalling $2.36 million for the period, or $760 per day per vessel. In the same period of 2015, management fees amounted to $3.18 million, or $776 per day per vessel based on the daily rate per vessel of 685 Euros.  The decline in the total management fees is primarily due to the lower number of vessels operating during the first nine months of 2016 compared to the same period of 2015.

Gain on sale of a vessel. In April 2016, the Company agreed to sell one of its older container carriers M/V "Cpt Costas". The 24 years old vessel was sold for a net amount of $2.6 million. The Company recorded a $0.01 million gain on the sale.

Loss on termination of newbuilding contracts.  On June 29, 2016, we cancelled the newbuilding contract for Hull Number DY 160, under construction at Dayang yard due to excessive construction delays as per the terms of the contract. On September 2, 2016, we cancelled the newbuilding contract for Hull Number DY 161, under construction at Dayang yard due to excessive construction delays as per the terms of the contract.   We have demanded the return of our progress payments and other expenses of $16.96 million (included in the line "Other receivables" of the consolidated balance sheets) as specified in the newbuilding contracts and secured by refund guarantees which were classified as a receivable and expensed the remaining payments made amounting to $3.2 million consisting mainly of supervision, management fees and certain other expenses. There was no loss on newbuilding contract during the same period in 2015.

Other general and administrative expenses. These are expenses we pay as part of our operation as a public company and include the fixed portion of our management agreement fees, legal and auditing fees, directors' and officers' liability insurance and other miscellaneous corporate expenses. In the first nine months of 2016, we had a total of $2.69 million of general and administrative expenses as compared to $2.53 million in same period of 2015. The 2016 figure includes higher professional and legal expenses as well as travelling expenses for the year 2016 compared to the same period of 2015 partly offset by lower incentive compensation costs due to a lower share price.

Dry-docking expenses. These are expenses we pay for our vessels to complete a dry-docking as part of an intermediate or special survey or in some cases an in-water survey in lieu of a drydocking. The cost of passing a survey increases significantly if a dry-docking is required and depends on the extent of work that needs to be performed (like amount of steel replacement required), where the yard is located that the dry-docking takes place and whether it is an intermediate or a special survey with the latter frequently requiring a dry-docking and more extensive work. In the first nine months of 2016, we had two vessels completing their special survey by undergoing drydocking for an expense of $1.7 million. During the first nine months of 2015, we had two vessels completing their intermediate surveys one with drydocking and one in-water (in lieu of drydock) and two vessels completing their special survey with drydocking, for a total expense of $1.88 million incurred during the period.

Vessel depreciation. Vessel depreciation for the nine month period ended September 30, 2016 was $6.57 million. Comparatively, vessel depreciation for the same period in 2015 amounted to $8.61 million. Vessel depreciation in the first nine months of 2016 was lower compared to the same period of 2015 mainly due to the decreased fleet of the Company in 2016.

Interest and other financing costs. Interest and other financing costs for the nine month period ended September 30, 2016 were $1.84 million. Comparatively, during the same period in 2015, interest and finance costs amounted to $1.23 million. The difference is primarily due to increase in the interest paid as a result of the higher average margin and higher LIBOR in the first nine months of 2016 as compared to the same period in 2015 partly offset by higher imputed interest calculated, based on the contract value of our new-building vessels and booked against interest expense, in the first nine months of 2016 as compared to the same period in 2015. The average LIBOR rate on our debt as of September 30, 2016 was 0.49% and the average margin over LIBOR was 4.28% for a total interest rate of 4.77% as compared to an average LIBOR rate on September 30, 2015 of 0.34% and an average margin over LIBOR of 3.97% for a total interest rate of 4.31%.

Other expenses, net. This line includes in addition to Interest and other financing costs, discussed above,  Loss on Derivatives, net, Other investment income, Foreign exchange gain / (loss) and Interest income. In the first nine months of 2016, we had a Loss on derivatives, net of $0.22 million from three interest rate swap contracts which consisted of a realized loss of $0.11 million and an unrealized loss of $0.1 million.  For the same period of 2015, we had a total derivative loss of $0.38 million from three interest rate swap contracts which consisted of a realized loss of $0.23 million and an unrealized loss of $0.14 million from the interest rate swaps. The performance of our derivative contracts depends on the movement of interest rates. A decline in interest rates increases our loss in our derivative contracts. Other investment income includes accrued income from our preferred equity investment in Euromar LLC, "Euromar", of $1.02 million and $0.85 million during the first nine months of 2016 and 2015, respectively. Overall, Other expenses, net, including Interest and other financing costs, amounted to a net expense of $1.05 million and $0.71 million during the first nine months of 2016 and 2015, respectively.

Equity loss and impairment in joint venture. In the second quarter of 2016 the Company concluded that its equity investment in Euromar was impaired due to developments during the period that related to absence of the seasonal market recovery during March and April as well as the completion of loan restructuring agreements between Euromar and its lenders that provided the latter with increased total payments, partly in-kind, and participation in the profits of Euromar. Furthermore, the largest of Euromar's vessels came off a high rate charter and was able to only find employment at a significantly lower charter rate. As a result, the Company booked an impairment of $14.0 million on its investment in its joint venture, Euromar. The Company estimated the fair value of its investment in Euromar by calculating the fair value of Euromar's assets based on cost of capital, earnings and operating cost assumptions and the terms of the loan restructuring agreements and subtracting the fair value of its liabilities; as a result, the Company recorded the afore-mentioned impairment. The Company's share of the loss of Euromar was $1.41 million in the first nine months of 2016 compared to a loss of $1.28 in the comparative period of 2015, as the revenues of Euromar were lower in the first nine months of 2016 based on lower time charter rates as compared to the same period of 2015.

Net loss and net loss attributable to common shareholders. As a result of the above, net loss for the nine months ended on September 30, 2016 was $26.59 million compared to $10.1 million for the same period in 2015. After in kind payment of dividends of $1.28 million to our Series B Preferred Shares, the net loss attributable to common shareholders amounted to $27.88 million for the nine months ended September 30, 2016 compared to a loss of $11.32 million for the same period of 2015 after in kind payment of dividends of $1.22 million to our Series B Preferred Shares.

Liquidity and capital resources

Historically, our sources of funds have been equity provided by our shareholders, operating cash flows and long-term borrowings. Our principal use of funds has been capital expenditures to establish and expand our fleet, maintain the quality of our vessels, comply with international shipping standards and environmental laws and regulations, fund working capital requirements, make principal repayments on outstanding loan facilities, and pay dividends.

Cash Flows

As of September 30, 2016, we had a cash balance of $1.73 million, funds due to a related company of $0.14 million and cash in restricted retention accounts of $7.07 million. Amounts due to such related company represent net disbursements and collections made by our fleet managers, Eurobulk and Eurobulk Far East, on behalf of the ship-owning companies during the normal course of operations for which they have the right of offset.  Working capital is current assets minus current liabilities, including the current portion of long term debt. We had a working capital surplus of $14.45 million as of September 30, 2016. This working capital surplus includes the deposits from our cancelled newbuilding contracts for Hull DY 160 and Hull DY 161 of $8.59 million and $8.37 million which we expect to receive during the second and third quarter of 2017, respectively.

We have under construction one bulk carrier newbuilding with a total contracted amount of $24.93 million remaining to be paid.  The amount of $5.54 million is to be paid within the following twelve months and the remaining $19.39 million within the first quarter of 2018 upon the delivery of the vessel. We plan to finance the remaining capital commitments for this vessel with bank debt and equity. However, on July 20, 2016, we signed an addendum to this newbuilding contract that gave us the option until the end of December 2016 to cancel the contract without any financial penalty except for the progress payment already made; consequently, our newbuilding capital commitments are under our control. Should we decide to exercise our option to cancel this newbuilding contract we will expense the progress payment made and other capitalized expenses totaling $3.85 million.

In November 2016, we agreed to purchase M/V Capetan Tassos, a drybulk vessel of 75,100 dwt, built in 2000 in Japan for approximately $4.40 million. The vessel will be delivered to us in January 2017. We plan to finance this acquisition and any short term working capital requirements via the following options:

a)cash from operations,

b)drawings from a loan facility from an affiliate, which facility is subject to final documentation,

c)cash from potential sale of vessels.

We believe that we will be able to finance all our obligations over the next twelve months. Therefore, the consolidated financial statements have been prepared on a going concern basis.  Furthermore, we plan to proceed with our previously announced at-the-market offering.

Net cash from operating activities.

Our cash flow from operations represents the net amount of cash, after expenses, generated by our vessels and it is influenced by the earnings of our vessels, the cost required to operate them, adjustments for non-cash items and changes in our working capital. Our vessel earnings depend on number of vessels we operate and their employment contract rates we have secured which, in turn, are affected by the market rates and the length of the contract. Our vessel costs depend on the number of vessels we operate, their daily cost and could fluctuate depending on the number of vessels passing intermediate or special survey in each period, whether an in-water survey or drydocking is done as well as the extent of the work performed on each vessel during each drydocking. During the first nine months of 2016, our net cash provided by operating activities was $0.21 million consisting of net loss after non-cash items of $1.57 million plus a decrease in working capital of $1.78 million; we operated 11.33 vessels on average. Two vessels completed their drydocking during the period. During the same period of 2015, net cash flow provided by operating activities was $0.13 million consisting of net loss after non-cash items of $0.55 million plus a decrease in working capital of $0.68 million while operating 15 vessels. Two vessels underwent their special survey and two underwent their intermediate survey (one with drydocking and one with in-water survey).

.

Net cash from investing activities.

In the first nine months of 2016, we spent $23.26 million in advances for our vessels under construction of which $21.82 million related to the final instalment and delivery of our vessel Xenia. We also spent $3.02 million for the acquisition of vessel Aegean Express. We had approximately a $5.33 million release and $1.93 million increase of restricted funds for net of $3.4 million release of restricted funds and $4.2 million proceeds from sale of two vessels, for total funds used in investment activities of $18.69 million. In the same period of 2015, we spent $10.67 million in advances for our vessels under construction. We had approximately a $3.20 million release and $1.13 million increase of restricted funds for net of $2.07 million release, for total funds used in investment activities of $8.6 million.

Net cash from financing activities.

In the first nine months of 2016, net cash provided by financing activities amounted to $11.49 million. These funds consisted primarily of $16.03 million of loan repayments, $28.3 million proceeds from long term debt for the financing of M/V Xenia and refinancing of the loan facilities with Eurobank Ergasias S.A., $0.73 million loan fees paid and $0.05 million of offering expenses paid. In the same period of 2015, net cash used in financing activities amounted to $3.62 million. These funds consisted primarily of $11.44 million of loan repayments, $5.0 million proceeds from a long term debt refinancing, $0.35 million loan fees paid, $0.14 million of offering expenses paid and $10.55 million from issuance of common stock through our shareholders rights offering.

Debt Financing

We operate in a capital intensive industry, which requires significant amounts of investment, and we fund a portion of this investment through long term debt. We target debt levels we consider prudent at the time of conclusion of such debt funding based on our market expectations, cash flow, interest coverage and percentage of debt to capital amongst other factors.

As of September 30, 2016, our long term debt comprised of six outstanding loans with a combined outstanding balance of $52.79 million. These loans have maturity dates between 2016 and 2023. A description of our loans as of September 30, 2016 is provided in Note 6 to our attached unaudited interim condensed consolidated financial statements. Over the next twelve months, we have scheduled repayments of approximately $5.46 million of the above debt.

     We have partly hedged our interest rate exposure and entered into one interest rate swap agreements for a notional amount of $10 million which expires on May 28, 2019.

Euroseas Ltd. and Subsidiaries

Unaudited Interim Condensed Consolidated Financial Statements

 Index to unaudited interim condensed consolidated financial statements

	Pages
Unaudited Condensed Consolidated Balance Sheets as of December 31, 2015 and September 30, 2016	2
Unaudited Condensed Consolidated Statements of Operations for the nine months ended September 30, 2015 and 2016	4
Unaudited Condensed Consolidated Statements of Shareholders' Equity for the nine months ended September 30, 2015 and, 2016	5
Unaudited Condensed Consolidated Statements of Cash Flows for  the nine months ended September 30, 2015 and 2016	6
Notes to Unaudited Interim Condensed Consolidated Financial Statements	7

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(All amounts expressed in U.S. Dollars – except number of shares)

	Notes		December 31, 2015		September 30, 2016
Assets
Current assets
Cash and cash equivalents				8,715,636		1,728,226
Trade accounts receivable, net				1,408,272		797,225
Other receivables		3		1,231,391		17,598,113
Inventories				1,464,940		1,347,128
Restricted cash		6		5,916,743		1,889,065
Prepaid expenses				175,506		242,771
Vessels held for sale				2,671,811		-
Total current assets				21,584,299		23,602,528
Fixed assets
Vessels, net		4		88,957,752		114,628,730
Advances for vessels under construction		3		32,701,867		3,847,758
Long-term assets
Restricted cash		6		4,550,000		5,184,267
Deferred charges, net				418,034		472,195
Other investment		10, 11		7,396,738		8,421,453
Investment in joint venture		11		16,515,701		1,105,381
Total long-term assets				150,540,092		133,659,784
Total assets				172,124,391		157,262,312
Liabilities, Mezzanine equity and shareholders' equity
Current liabilities
Long-term debt, current portion		6		14,685,766		5,317,351
Trade accounts payable and accrued expenses				2,597,944		2,913,876
Deferred revenues				462,124		778,538
Liabilities from assets held for sale				1,122,208		-
Due to related companies		5		322,703		139,637
Derivatives		10		50,402		-
Total current liabilities				19,241,147		9,149,402

(Unaudited Condensed Consolidated balance sheets continues on the next page)

2

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(All amounts expressed in U.S. Dollars – except number of shares)

(continued)

	Notes		December 31, 2015			September 30, 2016
Long-term liabilities
Long-term debt, net of current portion		6		25,552,702			47,010,657
Derivatives		10		202,700			358,161
Total long-term liabilities				25,755,402			47,368,818
Total liabilities				44,996,549			56,518,220
Commitments and Contingencies		7
Mezzanine Equity
Preferred shares (par value $0.01, 20,000,000 preferred shares authorized, 33,779 and 35,063 shares issued and outstanding, respectively)				32,079,249			33,363,057
Shareholders' equity
Common stock (par value $0.03, 200,000,000 shares authorized, 8,195,760  issued and outstanding)				245,873			246,899
Additional paid-in capital				278,833,156			279,040,578
Accumulated deficit				(184,030,436	)		(211,906,442	)
Total shareholders' equity				95,048,593			67,381,035
Total liabilities, mezzanine equity and shareholders' equity				172,124,391			157,262,312

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(All amounts expressed in U.S. Dollars – except number of shares)

		Nine months ended September 30,
		2015			2016
Revenues
Voyage revenue			30,357,715			22,111,476
Related party revenue	5		180,000			180,000
Commissions (including $379,471 and $276,393, respectively, to related party)			(1,672,566	)		(1,179,636	)
Net revenue			28,865,149			21,111,840
Operating expenses
Voyage expenses			1,204,320			1,088,633
Vessel operating expenses (including $239,739 and $153,450, respectively, to related party)			19,575,241			13,608,596
Drydocking expenses			1,882,654			1,725,240
Vessel depreciation	4		8,605,776			6,569,978
Related party management fees	5		3,177,465			2,361,821
Gain on sale of vessel			-			(10,597	)
Loss on termination of newbuilding contracts	3		-			3,202,030
Other general and administrative expenses (including $1,500,000 and $1,500,000, respectively, to related party)			2,533,286			2,694,252
Total operating expenses			36,978,742			31,239,953
Operating loss			(8,113,593	)		(10,128,113	)
Other income/(expenses)
Interest and other financing costs	6		(1,232,290	)		(1,843,413	)
Loss on derivatives, net	10		(376,135	)		(215,839	)
Other investment income	11		847,875			1,024,715
Foreign exchange gain / (loss)			29,373			(35,792	)
Interest income			24,912			16,565
Other expenses, net			(706,265	)		(1,053,764	)
Equity loss and impairment in joint venture	11		(1,279,250	)		(15,410,321	)
Net loss			(10,099,108	)		(26,592,198	)
Dividend Series B Preferred shares			(1,220,382	)		(1,283,808	)
Net loss available to common shareholders	9		(11,319,490	)		(27,876,006	)
Loss per share, basic and diluted			(1.92	)		(3.43	)
Weighted average number of shares outstanding, basic& diluted	9		5,903,609			8,116,343

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated statements of Shareholders' Equity

 (All amounts expressed in U.S. Dollars – except number of shares)

	Number of Shares Outstanding		Common Stock Amount		Additional Paid - in Capital			Accumulated Deficit			Total
Balance, January 1, 2015		5,715,731		171,472		268,374,336			(168,343,304	)		100,202,504
Net loss attributable to common shareholders									(11,319,490	)		(11,319,490	)
Share-based compensation		67,500		2,025		245,440			-			247,465
New shares due to rounding, reverse stock- split		794		24		(24	)		-			-
Issuance of shares from  rights offering, net of issuance costs		2,343,335		70,975		10,171,135						10,242,110
Balance, September 30, 2015		8,127,360		244,496		278,790,887			(179,662,794	)		99,372,589
Balance, January 1, 2016		8,195,760		245,873		278,833,156			(184,030,436	)		95,048,593
Net loss attributable to common shareholders									(27,876,006	)		(27,876,006	)
Offering Expenses		-		-		(5,000	)		-			(5,000	)
Share based compensation		-		1,026		212,422			-			213,448
Balance, September 30, 2016		8,195,760		246,899		279,040,578			(211,906,442	)		67,381,035

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

 (All amounts expressed in U.S. Dollars)

	For the nine months ended September 30,
	2015			2016
Cash flows from operating activities:
Net loss		(10,099,108	)		(26,592,198	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of vessels		8,605,776			6,569,978
Amortization and write off of deferred charges		115,494			554,566
Equity loss and impairment in joint venture		1,279,250			15,410,321
Loss on termination of newbuilding contracts		-			3,202,030
Share-based compensation		247,465			213,448
Gain on sale of a vessel		-			(10,597	)
Unrealized loss on derivatives		144,479			105,059
Other investment income accrued		(847,875	)		(1,024,712	)
Changes in operating assets and liabilities		687,485			1,785,524
Net cash  provided by operating activities		132,966			213,419
Cash flows from investing activities:
Advances for vessels under construction		(10,674,779	)		(23,264,490	)
Vessel acquisition		-			(3,017,015	)
Proceeds from sale of vessels		-			4,196,268
Increase in restricted cash		(1,126,658	)		(1,931,603	)
Release of restricted cash		3,200,000			5,325,014
Net cash used in investing activities		(8,601,437	)		(18,691,826	)
Cash flows from financing activities:
Proceeds from issuance of common stock		10,545,008			-
Loan fees paid		(346,411	)		(727,501	)
Offering expenses paid		(135,463	)		(47,377	)
Proceeds from long-term debt		5,000,000			28,300,000
Repayment of long-term debt		(11,444,000	)		(16,034,125	)
Net cash provided by financing activities		3,619,134			11,490,997
Net decrease in cash and cash equivalents		(4,849,337	)		(6,987,410	)
Cash and cash equivalents at beginning of period		25,411,420			8,715,636
Cash and cash equivalents at end of period		20,562,083			1,728,226

6

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

1.    Basis of Presentation and General Information

Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the beneficial owners of the ship owning companies in existence at that time. Euroseas Ltd, through its wholly owned vessel owning subsidiaries (collectively the "Company") is engaged in the ocean transportation of drybulk commodities and containers through ownership and operation of drybulk vessels and containerships.

The operations of the vessels are managed by Eurobulk ("Management Company") and Eurobulk FE, (collectively the "Management Companies"), corporations controlled by members of the Pittas family.  Eurobulk has an office in Greece located at 4 Messogiou & Evropis Street, Maroussi, Greece; Eurobulk FE has an office at Manilla, Philippines Suite 1003, 10th Floor Ma. Natividad Building, 470 T.M. Kalaw cor. Cortada Sts., Ermita. Both provide the Company with a wide range of shipping services such as technical support and maintenance, insurance consulting, chartering, financial and accounting services, as well as executive management services, in consideration for fixed and variable fees (see Note 5).

The Pittas family is the controlling shareholder of Friends Investment Company Inc. which, in turn, owns 30.8% of the Company's shares as of September 30, 2016.

The accompanying unaudited condensed consolidated financial statements include the accounts of Euroseas Ltd., and its wholly owned vessel owning subsidiaries and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2015 as filed with the Securities and Exchange Commission ("SEC") on Form 20-F.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information. Accordingly, they do not include all the information and notes required by US GAAP for complete financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. Operating results for the nine month period ended September 30, 2016 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2016.

As of September 30, 2016, the Company had a cash balance of $1.73 million, funds due to a related company of $0.14 million and cash in restricted retention accounts of $7.07 million and a working capital surplus of $14.45 million which includes the deposits from our cancelled newbuilding contracts for Hull DY 160 and Hull DY 161 of $8.59 million and $8.37 million expected to be received in the second and third quarter of 2017, respectively.  As noted in Note 6, the Company has also refinanced certain of its loans to defer balloon payments.

The Company has sufficient cash flow to meet its obligations in the subsequent twelve months. Consequently, the consolidated financial statements have been prepared on a going concern basis. The Company intends to satisfy any short term working capital requirements that might arise via cash flow from operations, drawings from a loan facility from an affiliate, proceeds from potential sale of vessels, and by proceeding with the execution of a previously announced at-the-market offering, among other options.

7

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

2.   Significant Accounting Policies

A summary of the Company's significant accounting policies is identified in Note 2 of the Company's Annual Report on Form 20-F for the fiscal year ended December 31, 2015. There have been no changes to the Company's significant accounting policies, except as noted below.

Recent accounting pronouncements

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers" ("ASU 2014-09"), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016.   The Company is evaluating the potential impact of this adoption on its consolidated financial statements.  Subsequent to the issuance of ASU 2014-09, the FASB issued the following ASU's which amend or provide additional guidance on topics addressed in ASU 2014-09.  In March 2016, the FASB issued ASU No. 2016-08, "Revenue Recognition - Principal versus Agent" (reporting revenue gross versus net). In April 2016, the FASB issued ASU No. 2016-10, "Revenue Recognition - Identifying Performance Obligations and Licenses."   Lastly, in May 2016, the FASB issued No. ASU 2016-12, "Revenue Recognition - Narrow Scope Improvements and Practical Expedients."   The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. Early adoption of the standard, but not before December 15, 2016 is permitted. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern." This ASU establishes specific guidance to an organization's management on their responsibility to evaluate whether there is substantial doubt about the organization's ability to continue as a going concern. The provisions of this ASU are effective for interim and annual periods ending after December 15, 2016. Management is evaluating the implementation of this update and its impact on its financial statements.

In April, 2015, FASB issued ASU No 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which outlines a simplified approach to present debt issuance costs and debt discount and premium by requiring debt issuance costs to be presented as deduction from the corresponding liability. This standard is effective for public entities with reporting periods beginning after December 15, 2015 and should be applied on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. The Company adopted this standard as of January 1, 2016 on a retrospective basis resulting in "Deferred charges, net" of $700,606 as of December 31, 2015 and $931,102 as of September 30, 2016 to be presented against the related debt liability.

In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory" to simplify the measurement of inventory using first-in, first out (FIFO) or average cost method. According to this ASU an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices less reasonably predictable costs of completion, disposal and transportation. This update is effective for public entities with reporting periods beginning after December 15, 2016. Early adoption is permitted. Management believes that the implementation of this update will not have any material impact on its financial statements and has not elected the early adoption.

8

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

2. Significant Accounting Policies – continued

In February 2016, the FASB issued ASU 2016-02, Leases. The standard amends the existing accounting standards for lease accounting and adds additional disclosures about leasing arrangements.  The ASU requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by most leases, while lessor accounting remains largely unchanged. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. This update is effective for public entities with reporting periods beginning after December 15, 2018. Early adoption is permitted for all entities. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Stock Compensation. The new guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company evaluated this update and concluded that it will not have any material impact on its financial statements and has not elected the early adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has not yet evaluated the impact, if any, of the adoption of this new standard on the disclosures in its financial statements.

In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows: Restricted Cash"which amends ASC 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows.  For public business entities, the guidance is effective for fiscal years beginning after December 15, 2017, including interim periods therein.  Early adoption is permitted.  Entities must apply the guidance retrospectively to all periods presented.  The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

9

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

3.  Advances for Vessels under Construction

As of September 30, 2016 the amount of the advances for vessels under construction amounts to $3.8 million and mainly represents progress payments according to the agreement entered into with the shipyard as well as legal and other costs related to the construction of Hull number YZJ 1153. Within the first quarter of 2016, the Company took delivery of M/V Xenia.  Additionally, Hull Number DY 160 and DY161, under construction at Dayang yard and originally scheduled for delivery in the second and third quarter of 2016 respectively, were cancelled due to excessive construction delays. Both cases have been referred to arbitration. The Company has classified as receivable $17.0 million being the return of its progress payments and other expenses as specified in the newbuilding contract and secured by refund guarantees and has expensed the remaining payments made amounting to $3.2 million, consisting mainly of supervision, management fees and certain other expenses.

	Costs		Vessel Delivery or contract cancellation			Net Book Value
Balance, January 1, 2016		32,701,867		-			32,701,867
Advances for vessels under construction		23,135,067		-			23,135,067
Vessel delivered during the period		-		(31,831,239	)		(31,831,239	)
Cancellation of newbuilding contracts		-		(20,157,937	)		(20,157,937	)
Balance, September 30, 2016		55,836,934		(51,989,176	)		3,847,758

4. Vessels, net

The amounts in the accompanying consolidated balance sheets are as follows:

	Costs			Accumulated Depreciation			Net Book Value
Balance, January 1, 2016		124,748,377			(35,790,625	)		88,957,752
Depreciation for the period		-			(6,569,978	)		(6,569,978	)
Delivery of newbuilding vessel		31,831,239			-			31,831,239
Sale of a vessel		(3,749,135	)		1,113,067			(2,636,068	)
Vessel Acquisition		3,045,785			-			3,045,785
Balance, September 30, 2016		155,876,266			(41,247,536	)		114,628,730

All vessels as of September 30, 2016 are used as collateral under the Company's loan agreements (see Note 6).

10

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

5. Related Party Transactions

The Company's vessel owning companies are parties to management agreements with the Management Companies which are controlled by members of the Pittas family, whereby the Management Companies provide technical and commercial vessel management for a fixed daily fee of Euro 685 for 2015 and Euro 685 for 2016 under the Company's Master Management Agreement (see below) in case of Eurobulk, or, under a direct management agreement with a Company's vessel owing subsidiary in case of Eurobulk FE. Vessel management fees paid to the Management Companies amounted to $3,177,465 and $2,361,821 in the nine-month periods ended September 30, 2015 and 2016, respectively.

In addition to the vessel management services, the Management Company provides the Company with the services of its executives, services associated with the Company being a public company and other services to our subsidiaries. For the nine months ended September 30, 2015 and September 30, 2016, compensation paid to the Management Company for such additional services to the Company was $1,500,000. This amount is included in the general and administration expenses.

Amounts due to or from related companies represent net disbursements and collections made on behalf of the vessel-owning companies by the Management Companies during the normal course of operations for which a right of offset exists.  As of December 31, 2015 the amount due to related companies was $322,703. As of September 30, 2016, the amount due to related companies was $139,640. Based on the Master Management Agreement between the Company and the Management Company and the management agreement with Eurobulk FE, an estimate of the quarter's operating expenses, expected drydocking expenses, vessel management fee and fee for management executive services are to be paid in advance at the beginning of each quarter to the Management Company.

11

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

5. Related Party Transactions - continued

The Company uses brokers for various services, as is industry practice.  Eurochart S.A., an affiliated company controlled by certain members of the Pittas family, provides vessel sale and purchase services, and chartering services to the Company whereby the Company pays commission of 1% of the vessel sales or acquisition prices and 1.25% of charter revenues.  Commission on vessel sales amounted to $27,741 for the sale of M/V "Captain Costas" and $30,000 for the acquisition of M/V "Aegean Express", during the nine-month period ended September 30, 2016; Eurochart S.A. also received $213,500 as commission for the acquisition of M/V "Xenia." during the same period. There were no vessel sales or acquisitions during the first nine months of 2015. Commissions to Eurochart S.A. for chartering services were $379,471 and $276,393 for the nine-month periods ended September 30, 2015 and 2016, respectively.

Certain members of the Pittas family, together with another unrelated ship management company, have formed a joint venture with the insurance broker Sentinel Maritime Services Inc. ("Sentinel"). Technomar Crew Management Services Corp ("Technomar"), is a company owned by certain members of the Pittas family, together with two other unrelated ship management companies. Sentinel is paid a commission on premium not exceeding 5%; Technomar is paid a fee of about$50 per crew member per month. Total fees charged by Sentinel and Technomar were $105,304 and $134,435 in the first nine months of 2015, respectively. In the first nine months of 2016, total fees charged by Sentinel and Technomar were $78,522 and $74,928, respectively. These amounts are recorded in "Vessel operating expenses" under "Operating expenses".

Related party revenue amounting to $180,000 for the nine-month periods ended September 30, 2015 and 2016 relates to fees received from Euromar LLC,  a joint venture of the Company (see below Note 11), for vessel management and various administrative services. Vessel management services are performed by Eurobulk and its affiliates; strategic, financial and reporting services are provided by Euroseas.

12

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

6. Long-Term Debt

Long-term debt represents bank loans of the Company. Outstanding long-term debt as of December 31, 2015 and September 30, 2016 is as follows:

Borrower	December 31, 2015			September 30, 2016
Xingang Shipping Ltd. / Joanna Maritime Ltd.		1,276,040			1,103,915
Manolis Shipping Ltd.		4,500,000			-
Saf Concord Shipping Ltd.		3,250,000			-
Pantelis Shipping Corp.		5,120,000			4,840,000
Noumea Shipping Ltd.		7,800,000			7,080,000
Eirini Shipping Ltd. / Eleni Shipping Ltd.		13,200,000			12,850,000
Eternity Shipping Company		5,375,000			-
Allendale Investments S.A. / Alterwall Business Inc. / Manolis Shipping Ltd. / Saf Concord Shipping Ltd. / Aggeliki Shipping Ltd. /Eternity Shipping Company / Jonathan John Shipping Ltd.		-			13,580,000
Kamsarmax One Shipping Ltd.		-			13,333,000
		40,521,040			52,786,915
Less: Current portion		(14,810,000	)		(5,464,000	)
Long-term portion		25,711,040			47,322,915
Deferred Charges, current portion		124,234			146,649
Deferred charges, long-term portion		158,338			312,258
Long-term debt, current portion net of deferred charges		14,685,766			5,317,351
Long-term debt, long-term portion net of deferred charges		25,552,702			47,010,657

None of the above loans are registered in the U.S. The future annual loan repayments are as follows:

To September 30:
2017	5,464,000
2018	15,782,915
2019	21,009,000
2020	934,000
2021	934,000
Thereafter	8,663,000
Total	52,786,915

Details of the loans are discussed in Notes 9, 20(b) and 20(c) of our consolidated financial statements for the year ended December 31, 2015 included in the Company's annual report on Form 20-F  and are supplemented by the changes noted below.

13

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated financial statements

(All amounts expressed in U.S. Dollars)

6.Long-Term Debt - continued

One of the vessels of the loan facility of $14.5 million with Eurobank Ergasias S.A. signed in February 2016 as described in Note 20(b) on Form 20-F as mentioned above, M/V "Captain Costas", was sold on May 10, 2016, however, the proceeds were not used to repay a portion of the loan facility but remained available to the Company to acquire a substitute vessel which would secure the loan facility in place of M/V "Captain Costas". On September 29, 2016, the Company acquired M/V "Aegean Express".

In September 2016, the Company signed a supplemental agreement to its loan agreements of Xingang Shipping Ltd., Pantelis Shipping Corp., Eirini Shipping Ltd. and Eleni Shipping Ltd. providing for the deferment of loan repayments from twelve to fifteen months, relaxation of loan-to-value covenants and certain other terms as noted below:

The loan with Xingang Shipping Ltd. will be repaid in November 2017 with one payment equal to its outstanding balance of $1,103,915.

The loan with Pantelis Shipping Corp will have the six principal instalments, from June 2016 to September 2017, deferred. The deferred amount of $1,680,000 will be added to the balloon payment of $3,160,000 due in September 2017. Furthermore, if Euroseas extends or refinances the balloon payment on the loan of Noumea Shipping Ltd., owner of M/V Evridiki G, at least until the current charter expires in January 2018, then the outstanding amount of $4,840,000 as of September 2017 will be repaid in four quarterly instalments starting in March 2018 with two instalments of $280,000 each, 2 instalments of $560,000 each plus a balloon payment of $3,160,000 along with the last payment in December 2018.

The outstanding balance of the loan of Eirini Shipping Ltd / Eleni Shipping Ltd. of $12,850,000 prior to the closing of the supplemental agreement was reduced to $11,600,000 via prepayment of the cash collateral of $1,250,000 (which was effected after the signing of the respective supplemental agreement). In addition, seven principal instalments of $350,000 each, from September 2016 to December 2017 were deferred. Repayment of the loan will be resumed in March 2018 and the outstanding balance of $11,600,000 will be repaid in two quarterly instalments of $350,000 each, four of $725,000 each plus a balloon payment of $8,000,000 due in May 2019.  The asset coverage ratio was reduced from 130% to 75% until December 31, 2017. A cash sweep mechanism was put in place until the entire deferred amount of $3,330,000 is repaid.

In November 2016, the loan with Noumea Shipping Ltd., owner of M/V Evridiki G, was agreed to be refinanced so that the balloon payment of $6,360,000 originally due in December 2016 will be repaid with two semi-annual repayments of $720,000 each in June and January 2018 and a balloon payment of $4,920,000 in January 2018. The loan-to-value covenant will be waived until November 2017. The agreement is subject to customary legal documentation and an amendment fee of $15,000 is payable. As a result of refinancing this balloon payment, the balloon payment of Pantelis Shipping Corp of $4,840,000 due in September 2017 is refinanced as described above.

The Company's loans are secured with one or more of the following:

· first priority mortgage over the respective vessels on a joint and several basis.

· first assignment of earnings and insurance.

· a corporate guarantee of Euroseas Ltd.

· a pledge of all the issued shares of each borrower.

14

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated financial statements

(All amounts expressed in U.S. Dollars)

6.Long-Term Debt - continued

The loan agreements contain covenants such as minimum requirements regarding the hull ratio cover  (the ratio of fair value of vessel to outstanding loan less cash in retention accounts), restrictions as to changes in management and ownership of the vessel shipowning companies, distribution of profits or assets (i.e. limiting dividends in some loans to 60% of profits, or, not permitting dividend payment or other distributions in cases that an event of default has occurred), additional indebtedness and mortgage of vessels without the lender's prior consent, sale of vessels, maximum fleet-wide leverage, sale of capital stock of our subsidiaries, ability to make investments and other capital expenditures, entering in mergers or acquisitions, minimum cash balance requirements and minimum cash retention accounts (restricted cash).  The loans agreements also require the Company to make deposits in retention accounts with certain banks that can only be used to pay the current loan installments. Restricted cash under "Current Assets" and "Long-term assets" amounts to $10,466,743 and $7,073,332 as of  December 31, 2015 and September 30, 2016 and is comprised of deposits held in retention accounts and deposits required to be maintained as  certain minimum cash balances per mortgaged vessel.

Interest expense excluding loan fee amortization for the nine-month periods ended September 30, 2015 and 2016 amounted to $1,116,796 and $1,288,847, respectively, of which imputed interest was $433,999 and $497,813, respectively.  At September 30, 2016, LIBOR for the Company's loans was on average approximately 0.50% per year, the average interest rate margin over LIBOR on our debt was approximately 5.05% per year for a total average interest rate of approximately 5.55% per year.

7. Commitments and Contingencies

(a) There are no material legal proceedings other than the arbitration involving the Company's requests for the return of the progress payments for the canceled newbuilding contracts with Dayang shipyard (see Note 3) to which the Company is a party or to which any of its properties are subject, other than routine litigation incidental to the Company's business.  In management's opinion, the disposition of these lawsuits should not have a material impact on the unaudited condensed consolidated results of operations, financial position and cash flows; management believes that the arbitration for the return of the shipbuilding contract payments will be favorable for the Company.

(b) Future gross minimum revenues upon collection of hire under non-cancellable time charter agreements involving two of its vessels in operation as of September 30, 2016 totals $21.37 million (one off-hire day per quarter for each vessel is assumed and no drydockings are due for the vessels during the charter period; in addition early delivery of the vessels by the charterers or any exercise of the charterers' options to extend the terms of the charters are not accounted for).

(c) As of September 30, 2016, the Company had under construction one bulk carrier, a Kamsarmax, with a total contracted amount remaining to be paid of $5.54 million in 2017 and $19.39 million in 2018. On July 20, 2016, the Company signed an addendum to its newbuilding contract giving it the option to cancel the contract for the construction of a Kamsarmax drybulk vessel without penalty except for the progress payment already made.

15

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

8. Stock Incentive Plan

A summary of the status of the Company's unvested shares as of January 1, 2016, and changes during the nine month period ended September 30, 2016, are presented below:

Unvested Shares	Shares			Weighted-Average Grant-Date Fair Value per share
Unvested on January 1, 2016		90,900			5.67
Granted		-			-
Vested		(34,200	)		4.18
Forfeited		-			-
Unvested on September 30, 2016		56,700			6.57

As of September 30, 2016, there was $115,954 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted.  That cost is expected to be recognized over a weighted-average period of 0.46 years. The share-based compensation recognized relating to the unvested shares was $213,448 for the nine month periods ended September 30, 2016 (September 30, 2015: $247,465) and is included in general and administrative expenses.

On November 3, 2016, an award of 82,080 shares was made with a grant-date fair value of $1.21 per share, or $99,317 in total.

9. Loss Per Share

Basic and diluted loss per common share are computed as follows:

	For the nine months ended September 30,
	2015			2016
Net loss attributable to common shareholders		(11,319,490	)		(27,876,009	)
Weighted average common shares –     Outstanding		5,903,609			8,116,343
Basic and diluted  loss per share		(1.92	)		(3.43	)

The Company excluded the effect of 45,000 and 56,700 unvested incentive award shares as of September 30, 2015 and 2016, respectively, as they were anti-dilutive.

16

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

10.Financial Instruments

The principal financial assets of the Company consist of cash on hand and at banks, other investment and accounts receivable due from charterers. The principal financial liabilities of the Company consist of long-term loans, derivatives including interest rate swaps, and accounts payable due to suppliers.

Interest rate risk

The Company enters into interest rate swap contracts as economic hedges to manage some of its exposure to variability in its floating rate long term debt. Under the terms of the interest rate swaps the Company and the bank agreed to exchange, at specified intervals the difference between a paying fixed rate and floating rate interest amount calculated by reference to the agreed principal amounts and maturities.  Interest rate swaps allow the Company to convert long-term borrowings issued at floating rates into equivalent fixed rates. Even though the interest rate swaps were entered into for economic hedging purposes, the derivatives described below in this note do not qualify for accounting purposes as fair value hedges, under guidance relating to  Derivatives and Hedging, as the Company does not have currently written contemporaneous documentation identifying the risk being hedged and, both on a prospective and retrospective basis, performing an effectiveness test to support that the hedging relationship is highly effective. Consequently, the Company recognizes the change in fair value of these derivatives in the "Unaudited condensed consolidated statements of operations." As of December 31, 2015 and September 30, 2016, the Company had three and one open interest rate swap contracts, respectively, of notional amount of $30 million and $10 million, respectively.

Concentration of credit risk

Financial instruments, which potentially subject the Company to significant concentration of credit risk consist primarily of cash and trade accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluation of the relative credit standing of these financial institutions that are considered in the Company's investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers' financial condition and generally does not require collateral for its accounts receivable. As of September 30, 2016, the Company has a claim receivable against the counterparties of its cancelled Ultramax newbuilding contracts which is secured by refund guarantees from China Export Import Bank.

Fair value of financial instruments

The estimated fair values of the Company's financial instruments such as trade receivables, trade accounts payable, cash and cash equivalents and restricted cash approximate their individual carrying amounts as of December 31, 2015 and September 30, 2016, due to their short-term maturity.  Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities.The fair value of the Company's long term borrowings approximates $51.9 million as of September 30, 2016 or approximately $0.9 million less than its carrying value of $52.8 million (excluding the unamortized deferred charges). The fair value of the long term borrowing are estimated based on current interest rates offered to the Company for similar loans. LIBOR rates are observable at commonly quoted intervals for the full terms of the loans and hence fair value of the long-term bank loans are considered Level 2 items in accordance with the fair value hierarchy due to their variable interest rate, being the LIBOR. The fair value of the Company's interest rate swaps was the estimated amount the Company would pay to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the Company and its counter parties.

17

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

10.Financial Instruments - continued

Fair value of financial instruments - continued

The Company follows guidance relating to "Fair value measurements", which establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements.  This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities;

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;

Level 3: Unobservable inputs that are not corroborated by market data.

The fair value of the Company's interest rate swap agreements is determined using a discounted cash flow approach based on market-based LIBOR swap rates.  LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items. The fair values of the interest rate swap determined through Level 2 of the fair value hierarchy as defined in guidance relating to "Fair value measurements" are derived principally from or corroborated by observable market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allow value to be determined.

Recurring Fair Value Measurements

	Fair Value Measurement at Reporting Date
	Total, December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Liabilities
Interest rate swap contracts, current and long-term portion	$	253,102		-	$	253,102		-

	Fair Value Measurement at Reporting Date
	Total, September 30, 2016		(Level 1)		(Level 2)		Significant  Other Unobservable Inputs (Level 3)
Liabilities
Interest rate swap contracts, current and long-term portion	$	358,161		-	$	358,161		-

18

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

10.Financial Instruments - continued

Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2015		September 30, 2016
Interest rate contracts	Current liabilities - Derivatives		50,402		-
Interest rate contracts	Long-term liabilities - Derivatives		202,700		358,161
Total derivative liabilities			253,102		358,161

Derivatives not designated as hedging instruments	Location of gain (loss) recognized	Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2016
Interest rate – Fair value	Loss on derivatives, net		(144,479	)		(105,059	)
Interest rate contracts  - Realized loss	Loss on derivatives net		(231,656	)		(110,780	)
Total loss on derivatives			(376,135	)		(215,839	)

The fair value of the Company's "Other investment", which refers to its preferred equity investment in Euromar, approximates its carrying value (see Note 11 – "Investment in Joint Venture and Other Investment") and is considered a Level 3 item.

The key input that determines the fair value of the Company's "Other investment" is the required rate of return for preferred equity investments in investment opportunities of similar risk which is not observable and hence is considered a Level 3 item.  The Company considers the initial dividend rate of 19% p.a. as the appropriate rate for its fair value calculation and monitors market conditions for similar investment and other possible developments specific to its investment that might provide indications for changes in the required rate of return it uses in its fair value measurement. As of September 30, 2016, the Company did not identify indications that would require changes in the required rate of return.

Quantitative Information about Level 3 Fair Value Measurements

	Other investment		Valuation Technique	Unobservable Input	Value
Fair Value at December 31, 2015		7,396,738	Discounted cash flow	Rate of return		19	%
Fair Value at September 30, 2016		8,421,453	Discounted cash flow	Rate of return		19	%

The fair value of the Company's "Other investment" is sensitive to the required rate of return used to estimate the present value of its investment using the discounted cash flow approach. If the required rate of return increases or decreases, the fair value of the Company's "Other investment" will decrease or increase, respectively.

19

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

10.Financial Instruments - continued

Non-recurring Fair Value Measurements

During the second quarter of 2016, the Company concluded that its equity investment in Euromar shown under "Investment in joint venture" was impaired and wrote it down to its estimated fair value. The impairment was due both to changes in the terms of its investment during the period as well as continuing less favorable market developments. The change in the terms of the Company's investment resulted from the conclusion of loan restructuring agreements between Euromar and its lenders that provided the latter with increased payments before any capital is returned to Euromar's partners, which include the Company, and, in addition, participation of the lenders in the profits of and any distributions made by Euromar. The fair value of the Company's "Investment in joint venture" is considered a Level 3 item (see Note 11 – "Investment in Joint Venture and Other Investment"). The key input that determines the fair value of the Company's "Investment in joint venture" is the cost of capital for investments in containership vessels which is not observable and hence is considered a level 3 item.  The Company estimated the cost of capital in the range of 9-10% p.a. based on its return threshold in considering investments in containerships which, in turn take into consideration the historical returns and volatility of such investments. Additional inputs required include earnings assumptions and operating cost assumptions for each vessel as well other expenses and liabilities of Euromar. The Company used the Discounted cash flow" technique and a cost of capital of 9.5% p.a. to calculate the fair value of its equity investment in Euromar and estimated a $14,000,000 impairment on its equity investment which is shown under "Equity loss and impairment in joint venture" along with the Company's share of Euromar contribution under the Equity method of $1,410,321 for the nine-month period ended September 30, 2016. As of September 30, 2016, the Company's investment in Euromar is $1,105,381 and is shown under "Investment in joint venture" in the consolidated balance sheets.

The fair value of the Company's "Investment in joint venture" is sensitive to the required rate of return used to estimate the fair value of its investment using the discounted cash flow approach. If the required rate of return or vessel operating expenses increase or charter rates decrease, the fair value of the Company's "Investment in joint venture" will decrease; inversely, if the required rate of return or vessel operating expenses decrease or charter rates increase, the fair value of the Company's "Investment in joint venture" will increase.

	Non-recurring Fair Value Measurement at Reporting Date
	Total, September 30, 2016		(Level 1)		(Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets
Investment in joint venture		-		-		-		1,105,381

20

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

11. Investment in joint venture and Other Investment

By June 30, 2016, Euromar reached agreements in principle with two of its lenders (representing about 90% of its indebtedness) to restructure its debt. These agreements included relaxation of covenants, repayment moratorium and extension of the tenor of the loans in exchange for cash sweep provisions, increased interest rate for a portion of the debt, participation in profits and certain rights in the disposition of the some vessels. As a result, on June 30, 2016, the Company estimated the fair value of investment in Euromar by calculating the fair value of Euromar's assets based on cost of capital, earnings and operating cost assumptions, and terms included in the loan restructuring agreements between Euromar and its lenders and subtracting the fair value of its liabilities; as a result, the Company recorded an impairment on its investment in Euromar, of $14,000,000. The Company's investment in the Joint Venture is recorded in the "Unaudited condensed consolidated balance sheets" as "Investment in joint venture" at its book value which was $16,515,701 as of December 31, 2015 and $1,105,381 as of September 30, 2016.

Other Investment represents the Company's s preferred equity investment in Euromar, Euroseas recorded an accrued dividend income of $847,875 for the period ended September 30, 2015 and $1,024,715 for period ended September 30, 2016. This amount is recorded in the "Unaudited condensed consolidated statements of operations" as "Other Investment Income" under "Other Income / (expenses)".  The Company evaluated the recoverability of its investment in Preferred Units of Euromar LLC and concluded that it is recoverable.

In USD	Other Investment
Balance, December 31, 2015		7,396,738
Total gain for period included in Investment income		1,024,715
Balance, September 30 ,2016		8,421,453

12.Subsequent Events

a) On November 15, 2016, the Company signed a memorandum of agreement to buy M/V Capetan Tassos, a Japanese 2000-blt, 75,100 dwt drybulk carrier. The vessel is expected to be delivered in January 2017 for a gross price of approximately $4.4 million.

b) On November 23, 2016, the Company announced that it reached an agreement with an affiliate to draw a $2 million loan. Interest on the loan is payable quarterly, and there are no principal repayments until January 2018 when the loan matures.  The Company may elect to add the interest to the outstanding principal amount. Under certain limited circumstances, the Company can pay principal and interest in equity, and the loan is convertible in common stock of the Company at the option of the lender at certain times.  The agreement is subject to customary legal documentation.

21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EUROSEAS LTD.
Dated: November 23, 2016	By:	/s/ Dr. Anastasios Aslidis
	Name:	Dr. Anastasios Aslidis
	Title:	Chief Financial Officer and Treasurer

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Document And Entity Information	9 Months Ended
	Sep. 30, 2016 shares
Document Information [Line Items]
Entity Registrant Name	EUROSEAS LTD.
Entity Central Index Key	0001341170
Trading Symbol	esea
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)	0
Document Type	6-K
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets
Cash and cash equivalents	$ 1,728,226	$ 8,715,636
Trade accounts receivable, net	797,225	1,408,272
Other receivables	17,598,113	1,231,391
Inventories	1,347,128	1,464,940
Restricted cash	1,889,065	5,916,743
Prepaid expenses	242,771	175,506
Vessels held for sale		2,671,811
Total current assets	23,602,528	21,584,299
Fixed assets
Vessels, net	114,628,730	88,957,752
Advances for vessels under construction	3,847,758	32,701,867
Long-term assets
Restricted cash	5,184,267	4,550,000
Deferred charges, net	472,195	418,034
Other investment	8,421,453	7,396,738
Equity Method Investments	1,105,381	16,515,701
Total long-term assets	133,659,784	150,540,092
Total assets	157,262,312	172,124,391
Current liabilities
Long-term debt, current portion	5,317,351	14,685,766
Trade accounts payable and accrued expenses	2,913,876	2,597,944
Deferred revenues	778,538	462,124
Liabilities from assets held for sale		1,122,208
Due to related companies	139,637	322,703
Derivatives		50,402
Total current liabilities	9,149,402	19,241,147
Long-term liabilities
Long-term debt, net of current portion	47,010,657	25,552,702
Interest rate contracts	358,161	202,700
Total long-term liabilities	47,368,818	25,755,402
Total liabilities	56,518,220	44,996,549
Commitments and Contingencies
Preferred shares (par value $0.01, 20,000,000 preferred shares authorized, 33,779 and 35,063 shares issued and outstanding, respectively)	33,363,057	32,079,249
Shareholders’ equity
Common stock (par value $0.03, 200,000,000 shares authorized, 8,195,760 issued and outstanding)	246,899	245,873
Additional paid-in capital	279,040,578	278,833,156
Accumulated deficit	(211,906,442)	(184,030,436)
Total shareholders’ equity	67,381,035	95,048,593
Total liabilities, mezzanine equity and shareholders’ equity	$ 157,262,312	$ 172,124,391

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Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Preferred shares, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred shares, shares authorized (in shares)	20,000,000	20,000,000
Preferred shares, shares issued (in shares)	35,063	35,063
Preferred shares, shares outstanding (in shares)	35,063	35,063
Common stock, par value (in dollars per share)	$ 0.03	$ 0.03
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	8,195,760	8,195,760
Common stock, shares outstanding (in shares)	8,195,760	8,195,760

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Unaudited Condensed Consolidated Statements of Operations - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Revenues
Voyage revenue	$ 22,111,476	$ 30,357,715
Related party revenue	180,000	180,000
Commissions (including $379,471 and $276,393, respectively, to related party)	(1,179,636)	(1,672,566)
Net revenue	21,111,840	28,865,149
Operating expenses
Voyage expenses	1,088,633	1,204,320
Vessel operating expenses (including $239,739 and $153,450, respectively, to related party)	13,608,596	19,575,241
Drydocking expenses	1,725,240	1,882,654
Vessel depreciation	6,569,978	8,605,776
Related party management fees	2,361,821	3,177,465
Gain on sale of vessel	(10,597)
Loss on termination of newbuilding contracts	3,202,030
Other general and administrative expenses (including $1,500,000 and $1,500,000, respectively, to related party)	2,694,252	2,533,286
Total operating expenses	31,239,953	36,978,742
Operating loss	(10,128,113)	(8,113,593)
Other income/(expenses)
Interest and other financing costs	(1,843,413)	(1,232,290)
Loss on derivatives, net	(215,839)	(376,135)
Other investment income	1,024,715	847,875
Foreign exchange gain / (loss)	(35,792)	29,373
Interest income	16,565	24,912
Other expenses, net	(1,053,764)	(706,265)
Equity loss and impairment in joint venture	(15,410,321)	(1,279,250)
Net loss	(26,592,198)	(10,099,108)
Dividend Series B Preferred shares	(1,283,808)	(1,220,382)
Earnings / Net loss available to common shareholders	$ (27,876,006)	$ (11,319,490)
Loss per share, basic and diluted (in dollars per share)	$ (3.43)	$ (1.92)
Weighted average number of shares outstanding, basic & diluted (in shares)	8,116,343	5,903,609

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Unaudited Condensed Consolidated Statements of Operations (Parentheticals) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Commissions paid to related party	$ 276,393	$ 379,471
Vessel operating expenses, related party	153,450	239,739
Other general and administrative expenses, related party	$ 1,500,000	$ 1,500,000

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Unaudited Condensed Consolidated Statements of Shareholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2014	5,715,731
Balance at Dec. 31, 2014	$ 171,472	$ 268,374,336	$ (168,343,304)	$ 100,202,504
Net loss attributable to common shareholders			(11,319,490)	(11,319,490)
Share-based compensation (in shares)	67,500
Share-based compensation	$ 2,025	245,440		247,465
New shares due to rounding, reverse stock- split (in shares)	794
New shares due to rounding, reverse stock- split	$ 24	(24)
Issuance of shares from rights offering, net of issuance costs (in shares)	2,343,335
Issuance of shares from rights offering, net of issuance costs	$ 70,975	10,171,135		10,242,110
Balance (in shares) at Sep. 30, 2015	8,127,360
Balance at Sep. 30, 2015	$ 244,496	278,790,887	(179,662,794)	99,372,589
Share based compensation	$ 2,025	245,440		247,465
Balance (in shares) at Dec. 31, 2015	8,195,760
Balance at Dec. 31, 2015	$ 245,873	278,833,156	(184,030,436)	95,048,593
Net loss attributable to common shareholders			(27,876,006)	(27,876,006)
Share-based compensation (in shares)
Share-based compensation	$ 1,026	212,422		213,448
Balance (in shares) at Sep. 30, 2016	8,195,760
Balance at Sep. 30, 2016	$ 246,899	279,040,578	$ (211,906,442)	67,381,035
Offering Expenses		(5,000)		(5,000)
Share based compensation	$ 1,026	$ 212,422		$ 213,448

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net loss	$ (26,592,198)	$ (10,099,108)
Adjustments to reconcile net loss to net cash provided by operating activities:
Vessel depreciation	6,569,978	8,605,776
Amortization and write off of deferred charges	554,566	115,494
Equity loss and impairment in joint venture	15,410,321	1,279,250
Loss on termination of newbuilding contracts	3,202,030
Share-based compensation	213,448	247,465
Gain on sale of vessel	(10,597)
Unrealized loss on derivatives	105,059	144,479
Other investment income accrued	(1,024,712)	(847,875)
Changes in operating assets and liabilities	1,785,524	687,485
Net cash provided by operating activities	213,419	132,966
Cash flows from investing activities:
Advances for vessels under construction	(23,264,490)	(10,674,779)
Vessel acquisition	(3,017,015)
Proceeds from sale of vessels	4,196,268
Increase in restricted cash	(1,931,603)	(1,126,658)
Release of restricted cash	5,325,014	3,200,000
Net cash used in investing activities	(18,691,826)	(8,601,437)
Cash flows from financing activities:
Proceeds from issuance of common stock		10,545,008
Loan fees paid	(727,501)	(346,411)
Offering expenses paid	(47,377)	(135,463)
Proceeds from long-term debt	28,300,000	5,000,000
Repayment of long-term debt	(16,034,125)	(11,444,000)
Net cash provided by financing activities	11,490,997	3,619,134
Net decrease in cash and cash equivalents	(6,987,410)	(4,849,337)
Cash and cash equivalents at beginning of period	8,715,636	25,411,420
Cash and cash equivalents at end of period	$ 1,728,226	$ 20,562,083

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Note 1 - Basis of Presentation and General Information

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Business Description and Basis of Presentation [Text Block]

1. Basis of Presentation and General Information

Euroseas Ltd. was formed on May 5, 2005 under the laws of the Republic of the Marshall Islands to consolidate the beneficial owners of the ship owning companies in existence at that time. Euroseas Ltd, through its wholly owned vessel owning subsidiaries (collectively the “Company”) is engaged in the ocean transportation of drybulk commodities and containers through ownership and operation of drybulk vessels and containerships.

The operations of the vessels are managed by Eurobulk (“Management Company”) and Eurobulk FE

,

(collectively the “Management Companies”), corporations controlled by members of the Pittas family. Eurobulk has an office in Greece located at 4 Messogiou & Evropis Street, Maroussi, Greece; Eurobulk FE has an office at Manilla, Philippines Suite 1003, 10th Floor Ma. Natividad Building, 470 T.M. Kalaw cor. Cortada Sts., Ermita. Both provide the Company with a wide range of shipping services such as technical support and maintenance, insurance consulting, chartering, financial and accounting services, as well as executive management services, in consideration for fixed and variable fees (see Note 5).

The Pittas family is the controlling shareholder of Friends Investment Company Inc. which, in turn, owns 30.8% of the Company’s shares as of September 30, 2016.

The accompanying unaudited condensed consolidated financial statements include the accounts of Euroseas Ltd., and its wholly owned vessel owning subsidiaries and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2015 as filed with the Securities and Exchange Commission (“SEC”) on Form 20-F.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) for interim financial information. Accordingly, they do not include all the information and notes required by US GAAP for complete financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the periods presented. Operating results for the nine month period ended September 30, 2016 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2016.

As of September 30, 2016, the Company had a cash balance of $1.73 million, funds due to a related company of $0.14 million and cash in restricted retention accounts of $7.07 million and a working capital surplus of $14.45 million which includes the deposits from our cancelled newbuilding contracts for Hull DY 160 and Hull DY 161 of $8.59 million and $8.37 million expected to be received in the second and third quarter of 2017, respectively. As noted in Note 6, the Company has also refinanced certain of its loans to defer balloon payments.

The Company has sufficient cash flow to meet its obligations in the subsequent twelve months. Consequently, the consolidated financial statements have been prepared on a going concern basis. The Company intends to satisfy any short term working capital requirements that might arise via cash flow from operations, drawings from a loan facility from an affiliate, proceeds from potential sale of vessels, and by proceeding with the execution of a previously announced at-the-market offering, among other options.

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Note 2 - Significant Accounting Policies

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. Significant Accounting Policies

A summary of the Company's significant accounting policies is identified in Note 2 of the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2015. There have been no changes to the Company’s significant accounting policies, except as noted below.

Recent accounting pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016.   The Company is evaluating the potential impact of this adoption on its consolidated financial statements.  Subsequent to the issuance of ASU 2014-09, the FASB issued the following ASU’s which amend or provide additional guidance on topics addressed in ASU 2014-09.  In March 2016, the FASB issued ASU No. 2016-08, “Revenue Recognition - Principal versus Agent” (reporting revenue gross versus net). In April 2016, the FASB issued ASU No. 2016-10, “Revenue Recognition - Identifying Performance Obligations and Licenses.”   Lastly, in May 2016, the FASB issued No. ASU 2016-12, “Revenue Recognition - Narrow Scope Improvements and Practical Expedients.”   The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. Early adoption of the standard, but not before December 15, 2016 is permitted. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern.” This ASU establishes specific guidance to an organization's management on their responsibility to evaluate whether there is substantial doubt about the organization's ability to continue as a going concern. The provisions of this ASU are effective for interim and annual periods ending after December 15, 2016. Management is evaluating the implementation of this update and its impact on its financial statements.

In April, 2015, FASB issued ASU No 2015-03, “Simplifying the Presentation of Debt Issuance Costs”, which outlines a simplified approach to present debt issuance costs and debt discount and premium by requiring debt issuance costs to be presented as deduction from the corresponding liability. This standard is effective for public entities with reporting periods beginning after December 15, 2015 and should be applied on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. The Company adopted this standard as of January 1, 2016

on a retrospective basis

resulting in “Deferred charges, net” of $700,606 as of December 31, 2015 and $931,102 as of September 30, 2016 to be presented against the related debt liability.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory” to simplify the measurement of inventory using first-in, first out (FIFO) or average cost method. According to this ASU an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices less reasonably predictable costs of completion, disposal and transportation. This update is effective for public entities with reporting periods beginning after December 15, 2016. Early adoption is permitted. Management believes that the implementation of this update will not have any material impact on its financial statements and has not elected the early adoption.

In February 2016, the FASB issued ASU 2016-02, Leases. The standard amends the existing accounting standards for lease accounting and adds additional disclosures about leasing arrangements.  The ASU requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by most leases, while lessor accounting remains largely unchanged. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. This update is effective for public entities with reporting periods beginning after December 15, 2018. Early adoption is permitted for all entities. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Stock Compensation. The new guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company evaluated this update and concluded that it will not have any material impact on its financial statements and has not elected the early adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has not yet evaluated the impact, if any, of the adoption of this new standard on the disclosures in its financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows: Restricted Cash” which amends ASC 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows.  For public business entities, the guidance is effective for fiscal years beginning after December 15, 2017, including interim periods therein.  Early adoption is permitted.  Entities must apply the guidance retrospectively to all periods presented.  The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

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Note 3 - Advances for Vessels Under Construction

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Advances for Vessels under Construction [Text Block]

3. Advances for Vessels under Construction

As of September 30, 2016 the amount of the advances for vessels under construction amounts to $3.8 million and mainly represents progress payments according to the agreement entered into with the shipyard as well as legal and other costs related to the construction of Hull number YZJ 1153. Within the first quarter of 2016, the Company took delivery of M/V Xenia.  Additionally, Hull Number DY 160 and DY161, under construction at Dayang yard and originally scheduled for delivery in the second and third quarter of 2016 respectively, were cancelled due to excessive construction delays. Both cases have been referred to arbitration. The Company has classified as receivable $17.0 million being the return of its progress payments and other expenses as specified in the newbuilding contract and secured by refund guarantees and has expensed the remaining payments made amounting to $3.2 million, consisting mainly of supervision, management fees and certain other expenses.

	Costs	Vessel Delivery or contract cancellation		Net Book Value
Balance, January 1, 2016	32,701,867	-		32,701,867
Advances for vessels under construction	23,135,067	-		23,135,067
Vessel delivered during the period	-	(31,831,239	)	(31,831,239	)
Cancellation of newbuilding contracts	-	(20,157,937	)	(20,157,937	)
Balance, September 30, 2016	55,836,934	(51,989,176	)	3,847,758

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Note 4 - Vessel, Net

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

4. Vessels, net

The amounts in the accompanying consolidated balance sheets are as follows:

	Costs		Accumulated Depreciation		Net Book Value
Balance, January 1, 2016	124,748,377		(35,790,625	)	88,957,752
Depreciation for the period	-		(6,569,978	)	(6,569,978	)
Delivery of newbuilding vessel	31,831,239		-		31,831,239
Sale of a vessel	(3,749,135	)	1,113,067		(2,636,068	)
Vessel Acquisition	3,045,785		-		3,045,785
Balance, September 30, 2016	155,876,266		(41,247,536	)	114,628,730

All vessels as of September 30, 2016 are used as collateral under the Company’s loan agreements (see Note 6).

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Note 5 - Related Party Transactions

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

5. Related Party Transactions

The Company’s vessel owning companies are parties to management agreements with the Management Companies which are controlled by members of the Pittas family, whereby the Management Companies provide technical and commercial vessel management for a fixed daily fee of Euro 685 for 2015 and Euro 685 for 2016 under the Company’s Master Management Agreement (see below) in case of Eurobulk, or, under a direct management agreement with a Company’s vessel owing subsidiary in case of Eurobulk FE. Vessel management fees paid to the Management Companies amounted to $3,177,465 and $2,361,821 in the nine-month periods ended September 30, 2015 and 2016, respectively.

In addition to the vessel management services, the Management Company provides the Company with the services of its executives, services associated with the Company being a public company and other services to our subsidiaries. For the nine months ended September 30, 2015 and September 30, 2016, compensation paid to the Management Company for such additional services to the Company was $1,500,000. This amount is included in the general and administration expenses.

Amounts due to or from related companies represent net disbursements and collections made on behalf of the vessel-owning companies by the Management Companies during the normal course of operations for which a right of offset exists. As of December 31, 2015 the amount due to related companies was $322,703. As of September 30, 2016, the amount due to related companies was $139,640. Based on the Master Management Agreement between the Company and the Management Company and the management agreement with Eurobulk FE, an estimate of the quarter’s operating expenses, expected drydocking expenses, vessel management fee and fee for management executive services are to be paid in advance at the beginning of each quarter to the Management Company.

The Company uses brokers for various services, as is industry practice. Eurochart S.A., an affiliated company controlled by certain members of the Pittas family, provides vessel sale and purchase services, and chartering services to the Company whereby the Company pays commission of 1% of the vessel sales or acquisition prices and 1.25% of charter revenues. Commission on vessel sales amounted to $27,741 for the sale of M/V “Captain Costas” and $30,000 for the acquisition of M/V “Aegean Express”, during the nine-month period ended September 30, 2016; Eurochart S.A. also received $213,500 as commission for the acquisition of M/V “Xenia.” during the same period. There were no vessel sales or acquisitions during the first nine months of 2015. Commissions to Eurochart S.A. for chartering services were $379,471 and $276,393 for the nine-month periods ended September 30, 2015 and 2016, respectively.

Certain members of the Pittas family, together with another unrelated ship management company, have formed a joint venture with the insurance broker Sentinel Maritime Services Inc. (“Sentinel”). Technomar Crew Management Services Corp (“Technomar”), is a company owned by certain members of the Pittas family, together with two other unrelated ship management companies. Sentinel is paid a commission on premium not exceeding 5%; Technomar is paid a fee of about $50 per crew member per month. Total fees charged by Sentinel and Technomar were $105,304 and $134,435 in the first nine months of 2015, respectively. In the first nine months of 2016, total fees charged by Sentinel and Technomar were $78,522 and $74,928, respectively. These amounts are recorded in “Vessel operating expenses” under “Operating expenses”.

Related party revenue amounting to $180,000 for the nine-month periods ended September 30, 2015 and 2016 relates to fees received from Euromar LLC, a joint venture of the Company (see below Note 11), for vessel management and various administrative services. Vessel management services are performed by Eurobulk and its affiliates; strategic, financial and reporting services are provided by Euroseas.

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Note 6 - Long-term Debt

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Long-term Debt [Text Block]

6. Long-Term Debt

Long-term debt represents bank loans of the Company. Outstanding long-term debt as of December 31, 2015 and September 30, 2016 is as follows:

Borrower	December 31, 2015			September 30, 2016
Xingang Shipping Ltd. / Joanna Maritime Ltd.		1,276,040			1,103,915
Manolis Shipping Ltd.		4,500,000			-
Saf Concord Shipping Ltd.		3,250,000			-
Pantelis Shipping Corp.		5,120,000			4,840,000
Noumea Shipping Ltd.		7,800,000			7,080,000
Eirini Shipping Ltd. / Eleni Shipping Ltd.		13,200,000			12,850,000
Eternity Shipping Company		5,375,000			-
Allendale Investments S.A. / Alterwall Business Inc. / Manolis Shipping Ltd. / Saf Concord Shipping Ltd. / Aggeliki Shipping Ltd. /Eternity Shipping Company / Jonathan John Shipping Ltd.		-			13,580,000
Kamsarmax One Shipping Ltd.		-			13,333,000
		40,521,040			52,786,915
Less: Current portion		(14,810,000	)		( 5,464,000	)
Long-term portion		25,711,040			4 7,322,915
Deferred Charges, current portion		124,234			146,649
Deferred charges, long-term portion		158,338			312,258
Long-term debt, current portion net of deferred charges		14,685,766			5,317,351
Long-term debt, long-term portion net of deferred charges		25,552,702			47,010 ,657

None of the above loans are registered in the U.S. The future annual loan repayments are as follows:

To September 30:
2017	5,464 ,000
2018	1 5,782,915
2019	21,009,000
2020	934,000
2021	934,000
Thereafter	8,663,000
Total	52,786,915

Details of the loans are discussed in Notes 9, 20(b) and 20(c) of our consolidated financial statements for the year ended December 31, 2015 included in the Company’s annual report on Form 20-F and are supplemented by the changes noted below.

One of the vessels of the loan facility of $14.5 million with Eurobank Ergasias S.A. signed in February 2016 as described in Note 20(b) on Form 20-F as mentioned above, M/V “Captain Costas”, was sold on May 10, 2016, however, the proceeds were not used to repay a portion of the loan facility but remained available to the Company to acquire a substitute vessel which would secure the loan facility in place of M/V “Captain Costas”. On September 29, 2016, the Company acquired M/V “Aegean Express”.

In September 2016, the Company signed a supplemental agreement to its loan agreements of Xingang Shipping Ltd., Pantelis Shipping Corp., Eirini Shipping Ltd. and Eleni Shipping Ltd. providing for the deferment of loan repayments from twelve to fifteen months, relaxation of loan-to-value covenants and certain other terms as noted below:

The loan with Xingang Shipping Ltd. will be repaid in November 2017 with one payment equal to its outstanding balance of $1,103,915.

The loan with Pantelis Shipping Corp will have the six principal instalments, from June 2016 to September 2017, deferred. The deferred amount of $1,680,000 will be added to the balloon payment of $3,160,000 due in September 2017. Furthermore, if Euroseas extends or refinances the balloon payment on the loan of Noumea Shipping Ltd., owner of M/V Evridiki G, at least until the current charter expires in January 2018, then the outstanding amount of $4,840,000 as of September 2017 will be repaid in four quarterly instalments starting in March 2018 with two instalments of $280,000 each, 2 instalments of $560,000 each plus a balloon payment of $3,160,000 along with the last payment in December 2018.

The outstanding balance of the loan of Eirini Shipping Ltd / Eleni Shipping Ltd. of $12,850,000 prior to the closing of the supplemental agreement was reduced to $11,600,000 via prepayment of the cash collateral of $1,250,000 (which was effected after the signing of the respective supplemental agreement). In addition, seven principal instalments of $350,000 each, from September 2016 to December 2017 were deferred. Repayment of the loan will be resumed in March 2018 and the outstanding balance of $11,600,000 will be repaid in two quarterly instalments of $350,000 each, four of $725,000 each plus a balloon payment of $8,000,000 due in May 2019. The asset coverage ratio was reduced from 130% to 75% until December 31, 2017. A cash sweep mechanism was put in place until the entire deferred amount of $3,330,000 is repaid.

In November 2016, the loan with Noumea Shipping Ltd., owner of M/V Evridiki G, was agreed to be refinanced so that the balloon payment of $6,360,000 originally due in December 2016 will be repaid with two semi-annual repayments of $720,000 each in June and January 2018 and a balloon payment of $4,920,000 in January 2018. The loan-to-value covenant will be waived until November 2017. The agreement is subject to customary legal documentation

and an amendment fee of $15,000 is payable.. As a result of refinancing this balloon payment, the balloon payment of Pantelis Shipping Corp of $4,840,000 due in September 2017 is refinanced as described above.

The Company’s loans are secured with one or more of the following:

· first priority mortgage over the respective vessels on a joint and several basis.

· first assignment of earnings and insurance.

· a corporate guarantee of Euroseas Ltd.

· a pledge of all the issued shares of each borrower.

The loan agreements contain covenants such as minimum requirements regarding the hull ratio cover (the ratio of fair value of vessel to outstanding loan less cash in retention accounts), restrictions as to changes in management and ownership of the vessel shipowning companies, distribution of profits or assets (i.e. limiting dividends in some loans to 60% of profits, or, not permitting dividend payment or other distributions in cases that an event of default has occurred), additional indebtedness and mortgage of vessels without the lender’s prior consent, sale of vessels, maximum fleet-wide leverage, sale of capital stock of our subsidiaries, ability to make investments and other capital expenditures, entering in mergers or acquisitions, minimum cash balance requirements and minimum cash retention accounts (restricted cash). The loans agreements also require the Company to make deposits in retention accounts with certain banks that can only be used to pay the current loan installments. Restricted cash under “Current Assets” and “Long-term assets” amounts to $10,466,743 and $7,073,332 as of December 31, 2015 and September 30, 2016 and is comprised of deposits held in retention accounts and deposits required to be maintained as certain minimum cash balances per mortgaged vessel.

Interest expense excluding loan fee amortization for the nine-month periods ended September 30, 2015 and 2016 amounted to $1,116,796 and $1,288,847, respectively, of which imputed interest was $433,999 and $497,813, respectively.

At September 30, 2016, LIBOR for the Company’s loans was on average approximately 0.5% per year, the average interest rate margin over LIBOR on our debt was approximately 5.05% per year for a total average interest rate of approximately 5.55% per year.

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Note 7 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

7. Commitments and Contingencies

(a) There are no material legal proceedings other than the arbitration involving the Company’s requests for the return of the progress payments for the canceled newbuilding contracts with Dayang shipyard (see Note 3) to which the Company is a party or to which any of its properties are subject, other than routine litigation incidental to the Company’s business. In management’s opinion, the disposition of these lawsuits should not have a material impact on the unaudited condensed consolidated results of operations, financial position and cash flows; management believes that the arbitration for the return of the shipbuilding contract payments will be favorable for the Company.

(b) Future gross minimum revenues upon collection of hire under non-cancellable time charter agreements involving two of its vessels in operation as of September 30, 2016 totals $21.37 million (one off-hire day per quarter for each vessel is assumed and no drydockings are due for the vessels during the charter period; in addition early delivery of the vessels by the charterers or any exercise of the charterers’ options to extend the terms of the charters are not accounted for).

(c) As of September 30, 2016, the Company had under construction one bulk carrier, a Kamsarmax, with a total contracted amount remaining to be paid of $5.54 million in 2017 and $19.39 million in 2018. On July 20, 2016, the Company signed an addendum to its newbuilding contract giving it the option to cancel the contract for the construction of a Kamsarmax drybulk vessel without penalty except for the progress payment already made.

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Note 8 - Stock Incentive Plan

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

8. Stock Incentive Plan

A summary of the status of the Company’s unvested shares as of January 1, 2016, and changes during the nine month period ended September 30, 2016, are presented below:

Unvested Shares	Shares			Weighted-Average Grant-Date Fair Value per share
Unvested on January 1, 2016		90,900		5.67
Granted		-		-
Vested		(34,200	)	4.18
Forfeited		-		-
Unvested on September 30, 2016		56,700		6.57

As of September 30, 2016, there was $115,954 of total unrecognized compensation cost related to unvested share-based compensation arrangements granted. That cost is expected to be recognized over a weighted-average period of 0.46 years. The share-based compensation recognized relating to the unvested shares was $213,448 for the nine month periods ended September 30, 2016 (September 30, 2015: $247,465) and is included in general and administrative expenses.

On November 3, 2016, an award of 82,080 shares was made with a grant-date fair value of $1.21 per share, or $99,317 in total.

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Note 9 - Loss Per Share

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

9. Loss Per Share

Basic and diluted loss per common share are computed as follows:

	For the nine months ended September 30,
		2015		2016
Net loss attributable to common shareholders		(11,319,490	)	(27,876,009	)
Weighted average common shares – Outstanding		5,903,609		8,116,343
Basic and diluted  loss per share		(1.92	)	(3.43	)

The Company excluded the effect of 45,000 and 56,700 unvested incentive award shares as of September 30, 2015 and 2016, respectively, as they were anti-dilutive.

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Note 10 - Financial Instruments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Financial Instruments Disclosure [Text Block]

10.       Financial Instruments

The principal financial assets of the Company consist of cash on hand and at banks, other investment and accounts receivable due from charterers. The principal financial liabilities of the Company consist of long-term loans, derivatives including interest rate swaps, and accounts payable due to suppliers.

Interest rate risk

The Company enters into interest rate swap contracts as economic hedges to manage some of its exposure to variability in its floating rate long term debt. Under the terms of the interest rate swaps the Company and the bank agreed to exchange, at specified intervals the difference between a paying fixed rate and floating rate interest amount calculated by reference to the agreed principal amounts and maturities. Interest rate swaps allow the Company to convert long-term borrowings issued at floating rates into equivalent fixed rates. Even though the interest rate swaps were entered into for economic hedging purposes, the derivatives described below in this note do not qualify for accounting purposes as fair value hedges, under guidance relating to

Derivatives and Hedging

, as the Company does not have currently written contemporaneous documentation identifying the risk being hedged and, both on a prospective and retrospective basis, performing an effectiveness test to support that the hedging relationship is highly effective. Consequently, the Company recognizes the change in fair value of these derivatives in the “Unaudited condensed consolidated statements of operations.” As of December 31, 2015 and September 30, 2016, the Company had three and one open interest rate swap contracts, respectively, of notional amount of $30 million and $10 million, respectively.

Concentration of credit risk

Financial instruments, which potentially subject the Company to significant concentration of credit risk consist primarily of cash and trade accounts receivable. The Company places its temporary cash investments, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluation of the relative credit standing of these financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable As of September 30, 2016, the Company has a claim receivable against the counterparties of its cancelled Ultramax newbuilding contracts which is secured by refund guarantees from China Export Import Bank.

Fair value of financial instruments

The estimated fair values of the Company's financial instruments such as trade receivables, trade accounts payable, cash and cash equivalents and restricted cash approximate their individual carrying amounts as of December 31, 2015 and September 30, 2016, due to their short-term maturity.  Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of the Company’s long term borrowings approximates $51.9 million as of September 30, 2016 or approximately $0.9 million less than its carrying value of $52.8 million (excluding the unamortized deferred charges). The fair value of the long term borrowing are estimated based on current interest rates offered to the Company for similar loans. LIBOR rates are observable at commonly quoted intervals for the full terms of the loans and hence fair value of the long-term bank loans are considered Level 2 items in accordance with the fair value hierarchy due to their variable interest rate, being the LIBOR. The fair value of the Company’s interest rate swaps was the estimated amount the Company would pay to terminate the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the Company and its counter parties.

Fair value of financial instruments - continued

The Company follows guidance relating to “Fair value measurements”, which establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosure about fair value measurements.  This statement enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities;

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data;

Level 3: Unobservable inputs that are not corroborated by market data.

The fair value of the Company’s interest rate swap agreements is determined using a discounted cash flow approach based on market-based LIBOR swap rates.  LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swaps and therefore are considered Level 2 items. The fair values of the interest rate swap determined through Level 2 of the fair value hierarchy as defined in guidance relating to “Fair value measurements” are derived principally from or corroborated by observable market data. Inputs include quoted prices for similar assets, liabilities (risk adjusted) and market-corroborated inputs, such as market comparables, interest rates, yield curves and other items that allow value to be determined.

Recurring Fair Value Measurements

	Fair Value Measurement at Reporting Date
	Total, December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Liabilities
Interest rate swap contracts, current and long-term portion	$	253,102		-	$	253,102		-

	Fair Value Measurement at Reporting Date
	Total, September 30, 2016		(Level 1)		(Level 2)		Significant Other Unobservable Inputs (Level 3)
Liabilities
Interest rate swap contracts, current and long-term portion	$	358,161		-	$	358,161		-

Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2015	September 30, 2016
Interest rate contracts	Current liabilities - Derivatives	50,402	-
Interest rate contracts	Long-term liabilities - Derivatives	202,700	358,161
Total derivative liabilities		253,102	358,161

Derivatives not designated as hedging instruments	Location of gain (loss) recognized	Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2016
Interest rate – Fair value	Loss on derivatives, net	(144,479	)	(105,059	)
Interest rate contracts  - Realized loss	Loss on derivatives net	(231,656	)	(110,780	)
Total loss on derivatives		(376,135	)	(215,839	)

The fair value of the Company’s “Other investment”, which refers to its preferred equity investment in Euromar, approximates its carrying value (see Note 11 – “Investment in Joint Venture and Other Investment”) and is considered a Level 3 item.

The key input that determines the fair value of the Company’s “Other investment” is the required rate of return for preferred equity investments in investment opportunities of similar risk which is not observable and hence is considered a Level 3 item. The Company considers the initial dividend rate of 19% p.a. as the appropriate rate for its fair value calculation and monitors market conditions for similar investment and other possible developments specific to its investment that might provide indications for changes in the required rate of return it uses in its fair value measurement. As of September 30, 2016, the Company did not identify indications that would require changes in the required rate of return.

Quantitative Information about Level 3 Fair Value Measurements

	Other investment	Valuation Technique	Unobservable Input	Value
Fair Value at December 31, 2015	7,396,738	Discounted cash flow	Rate of return	19	%
Fair Value at September 30, 2016	8,421,453	Discounted cash flow	Rate of return	19	%

The fair value of the Company’s “Other investment” is sensitive to the required rate of return used to estimate the present value of its investment using the discounted cash flow approach. If the required rate of return increases or decreases, the fair value of the Company’s “Other investment” will decrease or increase, respectively.

Non-recurring Fair Value Measurements

During the second quarter of 2016, the Company concluded that its equity investment in Euromar shown under “Investment in joint venture” was impaired and wrote it down to its estimated fair value. The impairment was due both to changes in the terms of its investment during the period as well as continuing less favorable market developments. The change in the terms of the Company’s investment resulted from the conclusion of loan restructuring agreements between Euromar and its lenders that provided the latter with increased payments before any capital is returned to Euromar’s partners, which include the Company, and, in addition, participation of the lenders in the profits of and any distributions made by Euromar. The fair value of the Company’s “Investment in joint venture” is considered a Level 3 item (see Note 11 – “Investment in Joint Venture and Other Investment”). The key input that determines the fair value of the Company’s “Investment in joint venture” is the cost of capital for investments in containership vessels which is not observable and hence is considered a level 3 item. The Company estimated the cost of capital in the range of 9-10% p.a. based on its return threshold in considering investments in containerships which, in turn take into consideration the historical returns and volatility of such investments. Additional inputs required include earnings assumptions and operating cost assumptions for each vessel as well other expenses and liabilities of Euromar. The Company used the Discounted cash flow” technique and a cost of capital of 9.5% p.a. to calculate the fair value of its equity investment in Euromar and estimated a $14,000,000 impairment on its equity investment which is shown under “Equity loss and impairment in joint venture” along with the Company’s share of Euromar contribution under the Equity method of $1,410,321 for the nine-month period ended September 30, 2016. As of September 30, 2016, the Company’s investment in Euromar is $1,105,381 and is shown under “Investment in joint venture” in the consolidated balance sheets.

The fair value of the Company’s “Investment in joint venture” is sensitive to the required rate of return used to estimate the fair value of its investment using the discounted cash flow approach. If the required rate of return or vessel operating expenses increase or charter rates decrease, the fair value of the Company’s “Investment in joint venture” will decrease; inversely, if the required rate of return or vessel operating expenses decrease or charter rates increase, the fair value of the Company’s “Investment in joint venture” will increase.

	Non-recurring Fair Value Measurement at Reporting Date
	Total, September 30, 2016		(Level 1)		(Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets
Investment in joint venture		-		-		-		1,105,381

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Note 11 - Investment in Joint Venture and Other Investment

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

11. Investment in joint venture and Other Investment

By June

30, 2016, Euromar reached agreements in principle with two of its lenders (representing about 90% of its indebtedness) to restructure its debt. These agreements included relaxation of covenants, repayment moratorium and extension of the tenor of the loans in exchange for cash sweep provisions, increased interest rate for a portion of the debt, participation in profits and certain rights in the disposition of the some vessels. As a result, on June 30, 2016, the Company estimated the fair value of investment in Euromar by calculating the fair value of Euromar’s assets based on cost of capital, earnings and operating cost assumptions, and terms included in the loan restructuring agreements between Euromar and its lenders and subtracting the fair value of its liabilities; as a result, the Company recorded an impairment on its investment in Euromar, of $14,000,000. The Company’s investment in the Joint Venture is recorded in the “Unaudited condensed consolidated balance sheets” as “Investment in joint venture” at its book value which was $16,515,701 as of December 31, 2015 and $1,105,381 as of September 30, 2016.

Other Investment represents the Company’s s preferred equity investment in Euromar, Euroseas recorded an accrued dividend income of $847,875 for the period ended September 30, 2015 and $1,024,715 for period ended September 30, 2016. This amount is recorded in the “Unaudited condensed consolidated statements of operations” as “Other Investment Income” under “Other Income / (expenses)”. The Company evaluated the recoverability of its investment in Preferred Units of Euromar LLC and concluded that it is recoverable.

In USD	Other Investment
Balance, December 31, 2015	7,396,738
Total gain for period included in Investment income	1,024,715
Balance, September 30,2016	8,421,453

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Note 12 - Subsequent Events

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

12.       Subsequent Events

a) On November 15, 2016, the Company signed a memorandum of agreement to buy M/V Capetan Tassos, a Japanese 2000-blt, 75,100 dwt drybulk carrier. The vessel is expected to be delivered in January 2017 for a gross price of approximately $4.4 million.

b) On November 23, 2016, the Company announced that it reached an agreement with an affiliate to draw a $2 million loan. Interest on the loan is payable quarterly, and there are no principal repayments until January 2018 when the loan matures. The Company may elect to add the interest to the outstanding principal amount. Under certain limited circumstances, the Company can pay principal and interest in equity, and the loan is convertible in common stock of the Company at the option of the lender at certain times. The agreement is subject to customary legal documentation.

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2016

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting pronouncements

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The FASB also permitted early adoption of the standard, but not before the original effective date of December 15, 2016.   The Company is evaluating the potential impact of this adoption on its consolidated financial statements.  Subsequent to the issuance of ASU 2014-09, the FASB issued the following ASU’s which amend or provide additional guidance on topics addressed in ASU 2014-09.  In March 2016, the FASB issued ASU No. 2016-08, “Revenue Recognition - Principal versus Agent” (reporting revenue gross versus net). In April 2016, the FASB issued ASU No. 2016-10, “Revenue Recognition - Identifying Performance Obligations and Licenses.”   Lastly, in May 2016, the FASB issued No. ASU 2016-12, “Revenue Recognition - Narrow Scope Improvements and Practical Expedients.”   The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. Early adoption of the standard, but not before December 15, 2016 is permitted. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, “Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern.” This ASU establishes specific guidance to an organization's management on their responsibility to evaluate whether there is substantial doubt about the organization's ability to continue as a going concern. The provisions of this ASU are effective for interim and annual periods ending after December 15, 2016. Management is evaluating the implementation of this update and its impact on its financial statements.

In April, 2015, FASB issued ASU No 2015-03, “Simplifying the Presentation of Debt Issuance Costs”, which outlines a simplified approach to present debt issuance costs and debt discount and premium by requiring debt issuance costs to be presented as deduction from the corresponding liability. This standard is effective for public entities with reporting periods beginning after December 15, 2015 and should be applied on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. The Company adopted this standard as of January 1, 2016

on a retrospective basis

resulting in “Deferred charges, net” of $700,606 as of December 31, 2015 and $931,102 as of September 30, 2016 to be presented against the related debt liability.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory” to simplify the measurement of inventory using first-in, first out (FIFO) or average cost method. According to this ASU an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices less reasonably predictable costs of completion, disposal and transportation. This update is effective for public entities with reporting periods beginning after December 15, 2016. Early adoption is permitted. Management believes that the implementation of this update will not have any material impact on its financial statements and has not elected the early adoption.

In February 2016, the FASB issued ASU 2016-02, Leases. The standard amends the existing accounting standards for lease accounting and adds additional disclosures about leasing arrangements.  The ASU requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by most leases, while lessor accounting remains largely unchanged. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. This update is effective for public entities with reporting periods beginning after December 15, 2018. Early adoption is permitted for all entities. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Stock Compensation. The new guidance is intended to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. The Company evaluated this update and concluded that it will not have any material impact on its financial statements and has not elected the early adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. The main objective of this Update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this Update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The ASU requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The amendments are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has not yet evaluated the impact, if any, of the adoption of this new standard on the disclosures in its financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows: Restricted Cash” which amends ASC 230 to add or clarify guidance on the classification and presentation of restricted cash in the statement of cash flows.  For public business entities, the guidance is effective for fiscal years beginning after December 15, 2017, including interim periods therein.  Early adoption is permitted.  Entities must apply the guidance retrospectively to all periods presented.  The Company has not yet evaluated the impact, if any, of the adoption of this new standard.

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Note 3 - Advances for Vessels Under Construction (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Advances for Property, Plant, and Equipment [Table Text Block]

	Costs	Vessel Delivery or contract cancellation		Net Book Value
Balance, January 1, 2016	32,701,867	-		32,701,867
Advances for vessels under construction	23,135,067	-		23,135,067
Vessel delivered during the period	-	(31,831,239	)	(31,831,239	)
Cancellation of newbuilding contracts	-	(20,157,937	)	(20,157,937	)
Balance, September 30, 2016	55,836,934	(51,989,176	)	3,847,758

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Note 4 - Vessel, Net (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Property, Plant and Equipment [Table Text Block]

	Costs		Accumulated Depreciation		Net Book Value
Balance, January 1, 2016	124,748,377		(35,790,625	)	88,957,752
Depreciation for the period	-		(6,569,978	)	(6,569,978	)
Delivery of newbuilding vessel	31,831,239		-		31,831,239
Sale of a vessel	(3,749,135	)	1,113,067		(2,636,068	)
Vessel Acquisition	3,045,785		-		3,045,785
Balance, September 30, 2016	155,876,266		(41,247,536	)	114,628,730

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Note 6 - Long-term Debt (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

Borrower	December 31, 2015			September 30, 2016
Xingang Shipping Ltd. / Joanna Maritime Ltd.		1,276,040			1,103,915
Manolis Shipping Ltd.		4,500,000			-
Saf Concord Shipping Ltd.		3,250,000			-
Pantelis Shipping Corp.		5,120,000			4,840,000
Noumea Shipping Ltd.		7,800,000			7,080,000
Eirini Shipping Ltd. / Eleni Shipping Ltd.		13,200,000			12,850,000
Eternity Shipping Company		5,375,000			-
Allendale Investments S.A. / Alterwall Business Inc. / Manolis Shipping Ltd. / Saf Concord Shipping Ltd. / Aggeliki Shipping Ltd. /Eternity Shipping Company / Jonathan John Shipping Ltd.		-			13,580,000
Kamsarmax One Shipping Ltd.		-			13,333,000
		40,521,040			52,786,915
Less: Current portion		(14,810,000	)		( 5,464,000	)
Long-term portion		25,711,040			4 7,322,915
Deferred Charges, current portion		124,234			146,649
Deferred charges, long-term portion		158,338			312,258
Long-term debt, current portion net of deferred charges		14,685,766			5,317,351
Long-term debt, long-term portion net of deferred charges		25,552,702			47,010 ,657

Schedule of Future Annual Loan Repayments [Table Text Block]

To September 30:
2017	5,464 ,000
2018	1 5,782,915
2019	21,009,000
2020	934,000
2021	934,000
Thereafter	8,663,000
Total	52,786,915

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Note 8 - Stock Incentive Plan (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Nonvested Share Activity [Table Text Block]

Unvested Shares	Shares			Weighted-Average Grant-Date Fair Value per share
Unvested on January 1, 2016		90,900		5.67
Granted		-		-
Vested		(34,200	)	4.18
Forfeited		-		-
Unvested on September 30, 2016		56,700		6.57

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Note 9 - Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	For the nine months ended September 30,
		2015		2016
Net loss attributable to common shareholders		(11,319,490	)	(27,876,009	)
Weighted average common shares – Outstanding		5,903,609		8,116,343
Basic and diluted  loss per share		(1.92	)	(3.43	)

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Note 10 - Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]

	Fair Value Measurement at Reporting Date
	Total, December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Liabilities
Interest rate swap contracts, current and long-term portion	$	253,102		-	$	253,102		-

	Fair Value Measurement at Reporting Date
	Total, September 30, 2016		(Level 1)		(Level 2)		Significant Other Unobservable Inputs (Level 3)
Liabilities
Interest rate swap contracts, current and long-term portion	$	358,161		-	$	358,161		-

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2015	September 30, 2016
Interest rate contracts	Current liabilities - Derivatives	50,402	-
Interest rate contracts	Long-term liabilities - Derivatives	202,700	358,161
Total derivative liabilities		253,102	358,161

Derivative Instruments, Gain (Loss) [Table Text Block]

Derivatives not designated as hedging instruments	Location of gain (loss) recognized	Nine Months Ended September 30, 2015		Nine Months Ended September 30, 2016
Interest rate – Fair value	Loss on derivatives, net	(144,479	)	(105,059	)
Interest rate contracts  - Realized loss	Loss on derivatives net	(231,656	)	(110,780	)
Total loss on derivatives		(376,135	)	(215,839	)

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

	Other investment	Valuation Technique	Unobservable Input	Value
Fair Value at December 31, 2015	7,396,738	Discounted cash flow	Rate of return	19	%
Fair Value at September 30, 2016	8,421,453	Discounted cash flow	Rate of return	19	%

Fair Value Measurements, Nonrecurring [Table Text Block]

	Non-recurring Fair Value Measurement at Reporting Date
	Total, September 30, 2016		(Level 1)		(Level 2)		Significant Other Unobservable Inputs (Level 3)
Assets
Investment in joint venture		-		-		-		1,105,381

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Note 11 - Investment in Joint Venture and Other Investment (Tables)

9 Months Ended

Sep. 30, 2016

Notes Tables

Investment Income [Table Text Block]

In USD	Other Investment
Balance, December 31, 2015	7,396,738
Total gain for period included in Investment income	1,024,715
Balance, September 30,2016	8,421,453

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Note 1 - Basis of Presentation and General Information (Details Textual) - USD ($)	3 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Sep. 30, 2016	Dec. 31, 2015
Friends Investment Company Inc. [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners			30.80%
Scenario, Forecast [Member]
Newbuilding Contracts, Concelled Deposits	$ 8,370,000	$ 8,590,000
Cash			$ 1,730,000
Due to Related Parties			139,640	$ 322,703
Restricted Cash and Cash Equivalents			7,073,332	$ 10,466,743
Working Capital Surplus			$ 14,450,000

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Note 2 - Significant Accounting Policies (Details Textual) - Presentation of Debt Issuance Costs, Discount, and Premium as a Deduction from Corresponding Liability [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
As of December 31, 2015 [Member]
Prior Period Reclassification Adjustment		$ 700,606
Current Period Reclassification Adjustment	$ 931,102

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Note 3 - Advances for Vessels Under Construction (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Advances for Vessel Acquisition	$ 3,847,758	$ 32,701,867
Return of Payment and Expenses, Receivable	17,000,000
Remaining Payments, Expense	$ 3,200,000

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Note 3 - Advances for Vessels Under Construction (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
Balance, Cost	$ 32,701,867
Balance, Net	32,701,867
Advances for vessels under construction	23,135,067
Vessel delivered during the period	(31,831,239)
Cancellation of newbuilding contracts	(20,157,937)
Balance, Cost	55,836,934
Balance, Cancelled	(51,989,176)
Balance, Net	$ 3,847,758

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Note 4 - Summary of Vessels (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Vessels [Member]
Costs	$ 124,748,377
Accumulated Depreciation	(35,790,625)
Net Book Value	88,957,752
Depreciation for the period	(6,569,978)
Costs, Delivery of newbuilding vessel	31,831,239
Costs, Sale of a vessel	(3,749,135)
Sale of a vessel	1,113,067
Net Book Value, Sale of a vessel	(2,636,068)
Costs, Vessel Acquisition	3,045,785
Costs	155,876,266
Accumulated Depreciation	(41,247,536)
Net Book Value	114,628,730
Net Book Value	88,957,752
Depreciation for the period	(6,569,978)	$ (8,605,776)
Costs, Delivery of newbuilding vessel	31,831,239
Net Book Value	$ 114,628,730

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Note 5 - Related Party Transactions (Details Textual)	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 EUR (€)	Sep. 30, 2015 USD ($)	Sep. 30, 2015 EUR (€)	Dec. 31, 2015 USD ($)
Eurobulk Ltd. [Member] | Executive Services [Member] | General and Administrative Expense [Member]
Related Party Transaction, Amounts of Transaction	$ 1,500,000		$ 1,500,000
Eurobulk Ltd. [Member] | Vessel Management Fees (Member)
Related Party Transaction, Amounts of Transaction	2,361,821		3,177,465
Service Management Costs Daily Fee Related Party | €		€ 685		€ 685
Eurochart [Member] | Vessel Sales [Member] | M/V Captain Costas [Member]
Related Party Transaction, Expenses from Transactions with Related Party	$ 27,741
Eurochart [Member] | Vessel Sales [Member]
Related Party Transaction Commission, Percentage	1.00%	1.00%
Eurochart [Member] | Charter Revenues [Member]
Related Party Transaction Commission, Percentage	1.25%	1.25%
Related Party Transaction, Expenses from Transactions with Related Party	$ 276,393		379,471
Eurochart [Member] | Vessel Acquisition [Member] | M/V Aegean Express [Member]
Related Party Transaction, Expenses from Transactions with Related Party	30,000
Eurochart [Member] | Vessel Acquisition [Member] | M/V Xenia [Member]
Related Party Transaction, Expenses from Transactions with Related Party	213,500
Sentinel [Member]
Related Party Transaction, Expenses from Transactions with Related Party	$ 78,522		105,304
Related Party Transaction Commission on Premium, Maximum, Percentage	5.00%	5.00%
Technomar [Member]
Related Party Transaction, Expenses from Transactions with Related Party	$ 74,928		134,435
Revenue from Related Parties	180,000		180,000
Proceeds from Sale of Vessels			$ 0
Vessels Acquired During the Period			0	0
Due to Related Parties	139,640				$ 322,703
Related Party Transaction Amounts of Transaction Per Crew Member Per Month	$ 50

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Note 6 - Long-term Debt (Details Textual)	1 Months Ended			9 Months Ended
	Nov. 23, 2016 USD ($)	Sep. 30, 2016 USD ($)	Feb. 29, 2016 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Nov. 30, 2016 USD ($)	Sep. 29, 2016 USD ($)	Dec. 31, 2015 USD ($)
Noumea Shipping Ltd [Member] | Subsequent Event [Member]
Debt Instrument, Second Periodic Payment	$ 720,000
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid	4,920,000					$ 6,360,000
Debt Instrument, First Periodic Payment	$ 720,000
Debt Instrument Number of Semi Annual Payments	2
Debt Instrument, Fee Amount	$ 15,000
Xingang Shipping Ltd [Member]
Debt Instrument, Number of Periodic Payments		1
Long-term Debt		$ 1,103,915		$ 1,103,915
Pantelis Shipping Corp [Member] | Subsequent Event [Member]
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid	$ 4,840,000
Pantelis Shipping Corp [Member]
Long-term Debt		$ 4,840,000		4,840,000
Debt Instrument Number of Installments Payments Deferred		6
Debt Instrument, Deferred Amount		$ 1,680,000
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid		$ 3,160,000		3,160,000
Debt Instrument, Refinance Term, Number of Quarterly Payments		4
Debt Instrument, Refinance Term, First Periodic Payment		$ 280,000
Debt Instrument, Refinance Term, Second Periodic Payment		280,000
Debt Instrument, Refinance Term, Third Periodic Payment		560,000
Debt Instrument, Refinance Term, Fourth Periodic Payment		560,000
Debt Instrument,Refinance Term, Balloon Payment to be Paid		3,160,000		3,160,000
Eirini Shipping Ltd and Eleni Shipping Ltd [Member]
Debt Instrument, Second Periodic Payment		350,000
Long-term Debt		$ 11,600,000		11,600,000			$ 12,850,000
Debt Instrument Number of Installments Payments Deferred		7
Debt Instrument, Deferred Amount		$ 3,330,000
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid		8,000,000		$ 8,000,000
Repayments of Long-term Debt		1,250,000
Debt Instrument, Periodic Payment, Deferred		$ 350,000
Debt Instrument Number of Quarterly Payments		2
Debt Instrument, First Periodic Payment		$ 350,000
Debt Instrument, Third Periodic Payment		$ 725,000
Property, Plant and Equipment Value to Outstanding Facility Amount		75.00%		75.00%			130.00%
Debt Instrument, Fourth Periodic Payment		$ 725,000
Debt Instrument, fifth Periodic Payment		725,000
Debt Instrument, Sixth Periodic Payment		$ 725,000
Eurobank [Member]
Proceeds from Issuance of Long-term Debt			$ 14,500,000
HSBC Bank PLC [Member]
Debt Instrument, Term		1 year 90 days		1 year
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument Variable Interest Rate				0.50%
Debt Instrument, Basis Spread on Variable Rate				5.05%
Proceeds from Issuance of Long-term Debt				$ 28,300,000	$ 5,000,000
Long-term Debt		$ 52,786,915		$ 52,786,915
Limited Dividends Percentage Loans to Profits				60.00%
Restricted Cash and Cash Equivalents		$ 7,073,332		$ 7,073,332				$ 10,466,743
Interest Expense, Debt, Excluding Amortization				1,288,847	1,116,796
Imputed Interest				$ 497,813	$ 433,999
Debt Instrument, Interest Rate During Period				5.55%

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Note 6 - Summary of Long-term Debt (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Xingang Shipping Ltd. / Alcinoe Shipping Ltd Borrower [Member]
Bank Loans	$ 1,103,915	$ 1,276,040
Manolis Shipping Ltd. Borrower [Member]
Bank Loans		4,500,000
Saf-Concord Shipping Ltd. Borrower [Member]
Bank Loans		3,250,000
Pantelis Shipping Corp. Borrower [Member]
Bank Loans	4,840,000	5,120,000
Noumea Shipping Ltd. Borrower [Member]
Bank Loans	7,080,000	7,800,000
Eirini Shipping Ltd. [Member]
Bank Loans	12,850,000	13,200,000
Eternity Shipping Company [Member]
Bank Loans		5,375,000
Allendale Investments S.A. [Member]
Bank Loans	13,580,000
Kamsarmax One Shipping Ltd. [Member]
Bank Loans	13,333,000
Bank Loans	52,786,915	40,521,040
Less: Current portion	(5,464,000)	(14,810,000)
Long-term portion	47,322,915	25,711,040
Deferred Charges, current portion	146,649	124,234
Deferred charges, long-term portion	312,258	158,338
Long-term debt, current portion net of deferred charges	5,317,351	14,685,766
Long-term debt, long-term portion net of deferred charges	$ 47,010,657	$ 25,552,702

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Note 6 - Summary of Future Annual Loan Repayments for Long-term Debt (Details)	Sep. 30, 2016 USD ($)
2017	$ 5,464,000
2018	15,782,915
2019	21,009,000
2020	934,000
2021	934,000
Thereafter	8,663,000
Total	$ 52,786,915

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Note 7 - Commitments and Contingencies (Details Textual) $ in Thousands	Sep. 30, 2016 USD ($)
Number of Vessels Under Construction	2
Future Minimum Long Term Charter Revenue	$ 21,370
Purchase Obligation, Due in Second Year	5,540
Purchase Obligation, Due in Third Year	$ 19,390

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Note 8 - Stock Incentive Plan (Details Textual) - USD ($)		9 Months Ended
	Nov. 03, 2016	Sep. 30, 2016	Sep. 30, 2015
Restricted Stock [Member] | General and Administrative Expense [Member]
Allocated Share-based Compensation Expense		$ 213,448	$ 247,465
Restricted Stock [Member] | Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	82,080
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 1.21
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Granted in Period, Fair Value	$ 99,317
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized		$ 115,954
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition		167 days

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Note 8 - Summary of the Status of the Company's Non-vested Shares (Details) - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2016 $ / shares shares
Unvested on January 1, 2016 (in shares)	90,900
Unvested on January 1, 2016 (in dollars per share) | $ / shares	$ 5.67
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period
Vested (in shares)	(34,200)
Vested (in dollars per share) | $ / shares	$ 4.18
Forfeited (in shares)
Unvested on September 30, 2016 (in shares)	56,700
Unvested on September 30, 2016 (in dollars per share) | $ / shares	$ 6.57

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Note 9 - Loss Per Share (Details Textual) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Unvested Incentive Award Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	56,700	45,000

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Note 9 - Summary of Basic and Diluted Loss Per Common Share (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Net loss attributable to common shareholders	$ (27,876,006)	$ (11,319,490)
Weighted average common shares – Outstanding (in shares)	8,116,343	5,903,609
Basic and diluted loss per share (in dollars per share)	$ (3.43)	$ (1.92)

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Note 10 - Financial Instruments (Details Textual)	6 Months Ended	9 Months Ended
	Jun. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Interest Rate Swap [Member]
Derivative, Number of Instruments Held		1		3
Derivative, Notional Amount		$ 10,000,000		$ 30,000,000
Equity Method Investments [Member] | Minimum [Member]
Fair Value Inputs, Cost of Capital		9.00%
Equity Method Investments [Member] | Maximum [Member]
Fair Value Inputs, Cost of Capital		10.00%
Euromar LLC, The Joint Venture [Member] | Equity Loss and Impairment in Joint Venture [Member]
Equity Method Investment, Other than Temporary Impairment		$ 14,000,000
Euromar LLC, The Joint Venture [Member]
Fair Value Inputs, Cost of Capital		9.50%
Equity Method Investment, Other than Temporary Impairment	$ 14,000,000
Income (Loss) from Equity Method Investments		$ (1,410,321)
Equity Method Investments		1,105,381		16,515,701
Long-term Debt, Fair Value		51,900,000
Difference Between Fair Value and Carrying Value		900,000
Long-term Debt		$ 52,786,915
Fair Value Assumptions, Expected Dividend Rate		19.00%
Income (Loss) from Equity Method Investments		$ (15,410,321)	$ (1,279,250)
Equity Method Investments		$ 1,105,381		$ 16,515,701

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Note 10 - Fair Value of Company's Liabilities (Details) - Interest Rate Swap [Member] - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Inputs, Level 1 [Member]
Interest rate swap contracts, current and long-term portion
Fair Value, Inputs, Level 2 [Member]
Interest rate swap contracts, current and long-term portion	358,161	253,102
Fair Value, Inputs, Level 3 [Member]
Interest rate swap contracts, current and long-term portion
Interest rate swap contracts, current and long-term portion	$ 358,161	$ 253,102

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Note 10 - Derivatives Not Designated as Hedging Instruments by Account Type (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Interest rate contracts		$ 50,402
Interest rate contracts	358,161	202,700
Total derivative liabilities	$ 358,161	$ 253,102

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Note 10 - Gain or Loss on Derivatives Not Designated as Hedging Instruments (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Interest rate – Fair value	$ (105,059)	$ (144,479)
Interest rate contracts - Realized loss	(110,780)	(231,656)
Total loss on derivatives	$ (215,839)	$ (376,135)

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Note 10 - Quantitative Information about Level 3 Fair Value Measurements (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Inputs, Level 3 [Member] | Discounted Cash Flow [Member]
Other investment	$ 8,421,453	$ 7,396,738
Value	19.00%	19.00%
Other investment	$ 8,421,453	$ 7,396,738

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Note 10 - Fair Value of Company's Investments (Details) - Fair Value, Measurements, Nonrecurring [Member]	Sep. 30, 2016 USD ($)
Fair Value, Inputs, Level 1 [Member]
Investment in joint venture
Fair Value, Inputs, Level 2 [Member]
Investment in joint venture
Fair Value, Inputs, Level 3 [Member]
Investment in joint venture	1,105,381
Investment in joint venture

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Note 11 - Investment in Joint Venture and Other Investment (Details Textual) - USD ($)	6 Months Ended	9 Months Ended
	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Euromar LLC, The Joint Venture [Member]
Number of Lenders	2
Amount of Debt, Percent, Restructuring Agreement	90.00%
Euromar LLC, The Joint Venture [Member]
Equity Method Investment, Other than Temporary Impairment	$ 14,000,000
Equity Method Investments		$ 1,105,381		$ 16,515,701
Equity Method Investments, Fair Value Disclosure		1,105,381
Investment Income, Dividend		1,024,715	$ 847,875
Equity Method Investments		1,105,381		$ 16,515,701
Investment Income, Dividend		$ 1,024,712	$ 847,875

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Note 11 - Investment in Joint Venture (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Balance, December 31, 2015	$ 7,396,738
Total gain for period included in Investment income	1,024,715	$ 847,875
Balance, September 30,2016	$ 8,421,453

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Note 12 - Subsequent Events (Details Textual) - Subsequent Event [Member] $ in Millions	Nov. 15, 2016 USD ($) T	Nov. 23, 2016 USD ($)
M/V Capetan Tassos [Member]
Vessel Carrying Capacity | T	75,100
Long-term Purchase Commitment, Amount	$ 4.4
Affiliated Entity [Member]
Debt Instrument, Face Amount		$ 2.0