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 June 2019

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 notes of Euroseas Ltd. (the "Company") as of and for the three-month period ended March 31, 2019. 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. 333-208305) filed with the Commission on December 2, 2015, as amended.

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: June 4, 2019	By:	/s/ Dr. Anastasios Aslidis
	Name:	Dr. Anastasios Aslidis
	Title:	Chief Financial Officer and Treasurer

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 three months ended March 31, 2019. 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, 2018 filed with the U.S. Securities and Exchange Commission on April 25, 2019.

SELECTED CONSOLIDATED FINANCIAL DATA

The following table presents the Company’s selected consolidated financial and other data for each of the three-month periods ended March 31, 2018 and 2019, and as of December 31, 2018 and March 31, 2019.  The selected consolidated statement of operations, cash flow and balance sheet data is derived from, and is qualified by reference to, our unaudited financial results for the three-month periods ended March 31, 2018 and 2019. 

Following the close of trading on the Nasdaq Capital Market on May 30, 2018, the Company completed the spin-off of its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold) to EuroDry Ltd ("EuroDry"). Shareholders of the Company received one EuroDry common share for every five common shares of the Company they owned as of May 23, 2018. Shares of EuroDry commenced trading on May 31, 2018 on the Nasdaq Capital Market under the symbol "EDRY." EuroDry operates in the dry cargo, drybulk shipping markets, owning and operating drybulk vessels previously owned and operated by Euroseas, and is now a separate publicly traded company. Euroseas continues to operate in the container shipping market and remains a publicly traded company. Accordingly, the results of operations and financial condition of EuroDry have been presented in discontinued operations for all the historical comparative periods presented. The summary financials below refer to Euroseas Ltd. "continuing operations" excluding the contribution of drybulk vessels spun off into EuroDry ("discontinued operations") from historical comparative periods which have been adjusted accordingly.

Euroseas Ltd. – Summary of Selected Historical Financials

	Three Months Ended March 31
	2018			2019
Statement of Operations Data
Time charter revenue		8,761,317			8,728,986
Commissions		(454,701	)		(390,855	)
Voyage expenses		(111,035	)		(116,117	)
Vessel operating expenses		(5,575,401	)		(4,789,923	)
Drydocking expenses		(747,562	)		(592,473	)
Related party management fees		(956,713	)		(776,292	)
Vessel depreciation		(866,734	)		(798,712	)
Other general and administrative expenses		(820,747	)		(595,423	)
Operating (loss) / income, continuing operations		(771,576	)		669,191
Total other expenses, net, continuing operations		(651,401	)		(685,223	)
Net loss, continuing operations		(1,422,977	)		(16,032	)
Dividend Series B Preferred Shares		(460,033	)		(471,114	)
Net loss from continuing operations attributable to common shareholders		(1,883,010	)		(487,146	)
Loss per share attributable to common shareholders- basic and diluted, continuing operations		(0.17	)		(0.04	)
Weighted average number of shares outstanding during period, basic and diluted		11,133,764			12,340,060
Net loss attributable to common shareholders, discontinued operations		(1,445,688	)		-
Net loss attributable to common shareholders		(3,328,698	)		(487,146	)

Cash Flow Data	Three Months Ended March 31
	2018			2019
Net cash provided by / (used in) operating activities of continuing operations		2,648,336			(1,494,412	)
Net cash used in financing activities of continuing operations		(5,027,411	)		(1,303,000	)

Balance Sheet Data	December 31, 2018		March 31, 2019
Total current assets		11,994,168		8,436,974
Vessels, net		48,826,128		48,027,416
Other non-current assets		6,134,267		6,134,267
Total assets		66,954,563		62,598,657
Current liabilities		11,592,535		8,686,942
Total long-term liabilities		32,784,049		31,718,127
Long term bank loans, including current portion		36,586,790		35,369,229
Total liabilities		44,376,584		40,405,069
Mezzanine equity		18,757,361		18,835,253
Total shareholders' equity		3,820,618		3,358,335

	Three Months Ended March 31 (continuing operations),
	2018			2019
Other Fleet Data (1)
Number of vessels		12.00			11.00
Calendar days		1,080.0			990.0
Available days		1,050.5			953.6
Voyage days		1,024.8			947.7
Utilization Rate (percent)		97.6	%		99.4	%
(In U.S. dollars per day per vessel)
Average TCE rate (2)		8,441			9,088
Vessel Operating Expenses		5,162			4,838
Management Fees		886			784
General &Administrative Expenses		760			601
Total Operating Expenses excluding drydocking expenses		6,808			6,223
Drydocking expenses		692			598

(1) For the definition of calendar days, available days and utilization rate see our annual report on Form 20-F for the year ended December 31, 2018 (“Item 5A-Operating Results.”) filed on April 25, 2019.

(2) Time charter equivalent rate, or TCE rate, is determined by dividing time charter revenue and voyage charter revenue 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’s 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, pool agreements and bareboat charters) under which the vessels may be employed between the periods (see also “Item 5A-Operating Results” in our annual report on Form 20-F for the year ended December 31, 2018). Our definition of TCE revenues and TCE rate may not be comparable to that used by other companies in the shipping industry.

The following table reflects the reconciliation of TCE revenues to time charter revenue and voyage charter revenue, if any, as reflected in the consolidated statement of operations and our calculation of TCE rates for the periods presented.

	Three Months Ended March 31
	2018			2019
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
Time charter revenue		8,761,317			8,728,986
Voyage expenses		(111,035	)		(116,117	)
Time Charter Equivalent or TCE Revenues		8,650,282			8,612,869
Voyage days(1)		1,024.8			947.7
Average TCE rate		8,441			9,088

Three months ended March 31, 2019 compared to three months ended March 31, 2018.

Time charter revenue. Time charter revenue for the three month period ended March 31, 2019 was $8.73 million, marginally decreased compared to the same period in 2018 during which time charter revenue amounted to $8.76 million. Although we operated with a lower number of vessels during the period as compared to the same period of 2018, our vessels earned higher average charter rates. An average of 11.00 vessels operated in the three months of 2019 for a total of 990 ownership days as compared to an average of 12.00 vessels during the same period in 2018 or 1,080 ownership days, an 8.3% decrease.  The total number of days our vessels earned revenue decreased by 7.5% to 947.7 days in the first three months of 2019 from 1,024.8 days in the same period in 2018. While employed, our vessels generated a TCE rate of $9,088 per day per vessel in the first three months of 2019 compared to $8,441 per day per vessel for the same period in 2018 (see calculation in the table above). Market charter rates in the three months of 2019 were higher for our containership vessels compared to the first three months of 2018, which was reflected in the average earnings of our ships. We had 36.4 scheduled offhire days, including drydocking and laid-up time, 5.6 commercial offhire and 0.3 operational offhire days in the first three months of 2019 compared to 29.5 scheduled offhire days, including drydocking and laid-up time, 22.9 commercial offhire and 2.8 operational offhire days in the first three months of 2018.

Commissions. Commissions for the three month period ended March 31, 2019 were $0.39 million. At 4.5% of time charter revenues, the percentage of commissions over revenues was marginally lower than in the same period of 2018 during which they amounted to 5.2% of our revenues. The overall level of commissions depends on the agreed commission for each charter contract.

Voyage expenses. Voyage expenses for the three month period ended March 31, 2019 were $0.12 million and related to expenses for repositioning voyages between time charter contracts and ballast voyages, and owners expenses at certain ports, compared to $0.11 million for the same period of 2018. Voyage expenses depend on the number of days our vessels are employed under voyage contracts (as opposed to time charter contracts) and the number of days they are sailing for repositioning and any port or other costs incurred without a contract. In the first three months of 2019 our vessels had no days in voyage charters and as a result voyage expenses represented 1.3% of time charter revenues and were mainly incurred while our vessels were repositioned between time charter contracts.  In the same period of 2018 our vessels had no days in voyage charters and voyage expenses also represented 1.3% of time charter revenues.

Vessel operating expenses. Vessel operating expenses were $4.79 million during the first three months of 2019 compared to $5.58 million for the same period of 2018.  Daily vessel operating expenses per vessel decreased between the two periods to $4,838 per day per vessel in the first three months of 2019 compared to $5,162 per day during the same period of 2018, a 6.3% decrease, mainly due to the different mix of vessels that we operated in 2018.

Related party management fees. These are part of the fees we pay to Eurobulk Ltd. (“Eurobulk”) under our Master Management Agreement. During the first three months of 2019, Eurobulk charged us 685 Euros per day per vessel totalling $0.78 million for the period, or $784 per day per vessel. In the same period of 2018, management fees amounted to $0.96 million, or $886 per day per vessel based on the daily rate per vessel of 685 Euros.  The decrease in the total management fees is primarily due to the lower number of vessels operating during the first three months of 2019 compared to the same period of 2018.

Other general and administrative expenses. These expenses include the fixed portion of our management fees, incentive awards, legal and auditing fees, directors’ and officers’ liability insurance and other miscellaneous corporate expenses. In the first three months of 2019, we had a total of $0.60 million of general and administrative expenses, down from the $0.82 million incurred in the same period of 2018. This decrease of 27.5% is attributable to the costs related to the spin-off of our drybulk fleet incurred in 2018.

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 (such as amount of steel replacement required), the location of the drydock yard and whether it is an intermediate or a special survey with the latter almost always requiring a drydocking and more extensive work. In the first three months of 2019, one vessel completed its drydock which commenced in December 2018 for an expense of $0.59 million. During the first three months of 2018, we had one vessel completing its drydock for an expense of $0.75 million incurred during the period.

Vessel depreciation. Vessel depreciation for the three month period ended March 31, 2019 was $0.80 million, comparatively lower than the same period in 2018 which was $0.87 million. This slight decrease was due to the lower average number of vessels operating in the first three months of 2019 compared to the same period of 2018.

Interest and other financing costs. Interest and other financing costs for the three month period ended March 31, 2019 were $0.71 million. Comparatively, during the same period in 2018, interest and other financing costs amounted to $0.64 million. The difference is primarily due to the increased amount of debt for the three month period ended March 31, 2019 compared to the same period in 2018. The weighted average LIBOR rate on our debt for the three month period ended March 31, 2019 was 2.63% and the weighted average margin over LIBOR was 4.17% for a total weighted interest rate of 6.80% as compared to a weighted average LIBOR rate for the three month period ended March 31, 2018 of 1.64% and a weighted average margin over LIBOR of 4.61% for a total weighted interest rate of 6.25%.

Other expenses, net. This line includes in addition to Interest and other financing costs, discussed above, Loss on derivatives, net, Foreign exchange loss and Interest income. Overall, Other expenses, net amounted to a total expense of $0.69 million and $0.65 million during the first three months of 2019 and 2018, respectively.

Net loss and net loss attributable to common shareholders. As a result of the above, net loss for the three months ended March 31, 2019 was $0.02 million compared to a net loss of $1.42 million for the same period in 2018. After in kind payment of dividends of $0.47 million and $0.46 million respectively, to our Series B Preferred Shares, the net loss attributable to common shareholders amounted to $0.49 million for the three months ended March 31, 2019 compared to a loss of $1.88 million for the same period of 2018.

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 during operations and the periodically required drydockings, comply with international shipping standards and environmental laws and regulations, fund working capital requirements and if necessary operating shortfalls, make principal repayments on outstanding loan facilities, and pay dividends. We expect to rely on available cash, funds generated from operating cash flows, funds from our shareholders, equity offerings, like our ongoing at-the-market ("ATM") offering (under our filed prospectus about $2.20 million of our stock is still available for sale), and long-term borrowings to meet our liquidity needs going forward and to finance our capital expenditures and working capital needs in 2019 and beyond.

Cash Flows

As of March 31, 2019, we had a working capital deficit of $0.25 million and have been incurring losses. Our cash balance amounted to $4.16 million and cash in restricted and retention accounts amounted to $6.25 million as of March 31, 2019. We intend to fund our working capital requirements via cash on hand, cash flow from operations, debt balloon payment refinancing and proceeds from our at-the-market offering and other equity offerings. In the unlikely event that these are not sufficient we may also draw down up to $2.00 million under a commitment from COLBY Trading Ltd., a company controlled by the Pittas family and affiliated with our Chief Executive Officer, and possible vessel sales (where equity will be released), if required, among other options. We believe we will have adequate funding through the sources described above and, accordingly, we believe we have the ability to continue as a going concern and finance our obligations as they come due over the next twelve months following the date of the issuance of our financial statements. Consequently, our consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Net cash from operating activities.

Our cash flow deficit from operating activities for the three months ended March 31, 2019 was $1.49 million as compared to a net surplus from cash flows provided by operating activities of $2.65 million in the three months ended March 31, 2018.

The major drivers of the change of cash flows from operating activities for the period ended March 31, 2019 compared to the period ended March 31, 2018, are the following: a fair increase of the market rates during the three months ended March 31, 2019, which resulted in a higher TCE rate of $9,088 compared to $8,441 for the period ended March 31, 2018. The increase in TCE rates is also reflected in the increase of our operating income (excluding non-cash items) to $1.49 million for the period ended March 31, 2019 from $0.15 million for the corresponding period in 2018. This positive effect was, however, offset by (i) a net working capital outflow of $2.37 million during the three months ended March 31, 2019 compared to a net working capital inflow of $3.06 million for the three months ended March 31, 2018, mainly due to the significant decrease of the Due to related company balance for the three months ended March 31, 2019 as reimbursements were made to our Manager (ii) by higher net interest expense for the period ended March 31, 2019 compared to the corresponding period in 2018 and (iii) the decrease by one vessel in our operating fleet in the three months ended March 31, 2019 compared to the same period of 2018.

Net cash from financing activities.

Net cash flows used in financing activities were $1.3 million for the three months ended March 31, 2019, compared to net cash flows used in financing activities of $5.03 million for the three months ended March 31, 2018. In the three months ended March 31, 2019, long term debt principal payments was decreased by $4.94 million, compared to the same period of 2018. During the three months ended March 31, 2018, there was also an outflow of funds to a spun-off subsidiary (EuroDry) of $2.91 million, partially offset by an increase in proceeds of long term debt (net of loan arrangement fees paid) of $4.13 million.

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 March 31, 2019, we had three outstanding loans with a combined outstanding balance of $36.19 million. These loans have maturity up to 2024. Our long-term debt as of March 31, 2019 comprises bank loans granted to our vessel-owning subsidiaries.  A description of our loans as of March 31, 2019 is provided in Note 5 of our attached financial statements. As of March 31, 2019, we are scheduled to repay approximately $4.26 million of the above bank loans in the following twelve months.

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, 2018 and March 31, 2019	7
Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2018 and 2019	9
Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2018 and 2019	10
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2018 and 2019	11
Notes to Unaudited Interim Condensed Consolidated Financial Statement	12

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

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

	Notes		December 31, 2018		March 31, 2019
Assets
Current assets
Cash and cash equivalents				6,960,258		4,164,659
Trade accounts receivable, net				958,705		1,120,403
Other receivables				2,031,415		706,071
Inventories				1,704,391		1,238,919
Due from related company		4		-		762,380
Restricted cash		5		117,063		115,250
Prepaid expenses				222,336		329,292
Total current assets				11,994,168		8,436,974
Long-term assets
Vessels, net		3		48,826,128		48,027,416
Restricted cash		5		6,134,267		6,134,267
Total assets				66,954,563		62,598,657
Liabilities, mezzanine equity and shareholders’ equity
Current liabilities
Long-term bank loans, current portion		5		4,870,241		3,651,102
Trade accounts payable				2,288,525		1,896,833
Accrued expenses				1,301,805		996,836
Accrued preferred dividends				-		393,222
Deferred revenues				417,634		658,768
Derivative		9		41,435		22,681
Vessel profit participation liability		5		-		1,067,500
Due to related company		4		2,672,895		-
Total current liabilities				11,592,535		8,686,942

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

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

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

(continued)

	Notes		December 31, 2018			March 31, 2019
Long-term liabilities
Long-term bank loans, net of current portion		5		31,716,549			31,718,127
Vessel profit participation liability		5		1,067,500			-
Total long-term liabilities				32,784,049			31,718,127
Total liabilities				44,376,584			40,405,069
Commitments and Contingencies		6
Mezzanine Equity
Preferred shares (par value $0.01, 20,000,000 preferred shares authorized, 19,605 and 19,686 issued and outstanding, respectively)				18,757,361			18,835,253
Shareholders’ equity
Common stock (par value $0.03, 200,000,000 shares authorized, 12,515,645 issued and outstanding)				375,476			375,476
Additional paid-in capital				233,668,127			233,692,990
Accumulated deficit				(230,222,985	)		(230,710,131	)
Total shareholders’ equity				3,820,618			3,358,335
Total liabilities, mezzanine equity and shareholders’ equity				66,954,563			62,598,657

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

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

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

		Three months ended March 31,
		2018			2019
Revenues
Time charter revenue			8,761,317			8,728,986
Commissions (including $109,516 and $109,112, respectively, to related party)			(454,701	)		(390,855	)
Net revenue, continuing operations			8,306,616			8,338,131
Operating expenses
Voyage expenses			111,035			116,117
Vessel operating expenses (including $52,991 and $49,346, respectively, to related party)			5,575,401			4,789,923
Dry-docking expenses			747,562			592,473
Vessel depreciation	3		866,734			798,712
Related party management fees	4		956,713			776,292
Other general and administrative expenses (including $323,529 and $312,500, respectively, to related party)	4		820,747			595,423
Total operating expenses, continuing operations			9,078,192			7,668,940
Operating (loss) / income, continuing operations			(771,576	)		669,191
Other income/(expenses)
Interest and other financing costs	5		(639,996	)		(710,649	)
Loss on derivatives, net	9		(8,469	)		(2,794	)
Foreign exchange loss			(18,835	)		(3,534	)
Interest income			15,899			31,754
Other expenses, net, continuing operations			(651,401	)		(685,223	)
Net loss, continuing operations			(1,422,977	)		(16,032	)
Dividend Series B Preferred shares			(460,033	)		(471,114	)
Earnings / Net loss from continuing operations attributable to common shareholders	8		(1,883,010	)		(487,146	)
Loss per share, basic and diluted, continuing operations	8		(0.17	)		(0.04	)
Weighted average number of shares, basic & diluted			11,133,764			12,340,060
Net (loss) / income attributable to common shareholders, discontinued operations	10		(1,445,688	)		-
Net loss attributable to common shareholders			(3,328,698	)		-

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

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, 2018		11,274,126		338,230		284,236,597		(237,880,629	)		46,694,198
Net loss attributable to common shareholders		-		-		-		(1,883,010	)		(1,883,010	)
Share-based compensation		-		-		58,870		-			58,870
Balance, March 31, 2018		11,274,126		338,230		284,295,467		(239,763,639	)		44,870,058
Balance, January 1, 2019		12,515,645		375,476		233,668,127		(230,222,985	)		3,820,618
Net loss attributable to common shareholders		-		-		-		(487,146	)		(487,146	)
Share-based compensation		-		-		24,863		-			24,863
Balance, March 31, 2019		12,515,645		375,476		233,692,990		(230,710,131	)		3,358,335

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

Euroseas Ltd. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

 (All amounts expressed in U.S. Dollars)

	For the three months ended March 31,
	2018			2019
Cash flows from operating activities:
Net loss, continuing operations		(1,422,977	)		(16,032	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Vessel depreciation		866,734			798,712
Amortization of deferred charges		33,281			31,339
Share-based compensation		58,870			24,862
Unrealized gain on derivative		(39,738	)		(18,754	)
Amortization of debt discount		88,294			54,101
Changes in operating assets and liabilities		3,063,872			(2,368,640	)
Net cash provided by / (used in) operating activities of continuing operations		2,648,336			(1,494,412	)
Cash flows from financing activities:
Investment in subsidiary spun-off		(2,905,060	)		-
Loan arrangement fees paid		(119,863	)		-
Offering expenses paid		(12,488	)		-
Proceeds from long-term bank loans		4,250,000			-
Repayment of long-term bank loans		(6,240,000	)		(1,303,000	)
Net cash used in financing activities of continuing operations		(5,027,411	)		(1,303,000	)
Net  decrease in cash and cash equivalents and restricted cash		(2,379,075	)		(2,797,412	)
Cash, cash equivalents and restricted cash at beginning of period		8,297,147			13,211,588
Cash, cash equivalents and restricted cash at end of period, continuing operations		5,918,072			10,414,176

Cash breakdown
Cash and cash equivalents	1,300,640		4,164,659
Restricted cash, current	583,165		115,250
Restricted cash, long term	4,034,267		6,134,267
Total cash, cash equivalents and restricted cash shown in the statement of cash flows, continuing operations	5,918,072		10,414,176
Discontinued operations:
Net cash provided by operating activities of discontinued operations	433,374		-
Net cash used in investing activities of discontinued operations	(2,501,208	)	-
Net cash provided by financing activities of discontinued operations	1,648,317		-

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

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" or “Euroseas”) is engaged in the ocean transportation of containers through ownership and operation of containerships. Euroseas’ common shares trade on the Nasdaq Capital Market under the ticker symbol “ESEA”.

The operations of the vessels are managed by Eurobulk Ltd. (“Eurobulk” or “Management Company” or “Manager”), a corporation controlled by members of the Pittas family.  Eurobulk has an office in Greece located at 4 Messogiou & Evropis Street, Maroussi, Greece. The Manager provides the Company with a wide range of shipping services such as technical support and maintenance, insurance consulting, chartering, financial and accounting services and executive management services, in consideration for fixed and variable fees (see Note 4).

The Pittas family is the controlling shareholder of Friends Investment Company Inc. which, in turn, owns 29.6% of the Company’s common shares as of March 31, 2019.

Following the close of trading on the Nasdaq Capital Market on May 30, 2018, the Company completed the spin-off (the “Spin-off”) of its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold) to EuroDry Ltd ("EuroDry"). Shareholders of the Company received one EuroDry common share for every five common shares of the Company they owned as of May 23, 2018. Shares of EuroDry commenced trading on May 31, 2018 on the Nasdaq Capital Market under the symbol "EDRY." EuroDry operates in the dry cargo, drybulk shipping markets, owning and operating drybulk vessels previously owned and operated by Euroseas, and is now a separate publicly traded company. Euroseas continues to operate in the container shipping market and remains a publicly traded company. Accordingly, the results of operations and financial condition of EuroDry have been presented in discontinued operations for all historical comparative periods presented.

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, 2018 as filed with the U.S. Securities and Exchange Commission ("SEC") on Form 20-F on April 25, 2019.

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 three month period ended March 31, 2019 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2019.

As of March 31, 2019, the Company had a working capital deficit of $0.25 million and has been incurring losses. The Company’s cash balance amounted to $4.16 million and cash in restricted and retention accounts amounted to $6.25 million as of March 31, 2019. The Company intends to fund its working capital requirements via cash on hand, cash flow from operations, debt balloon payment refinancing and proceeds from its at-the-market offering and other equity offerings. In the unlikely event that these are not sufficient we may also draw down up to $2.00 million under a commitment from COLBY Trading Ltd., a company controlled by the Pittas family and affiliated with the Company’s Chief Executive Officer, and possible vessel sales (where equity will be released), if required, among other options. The Company believes that it will have adequate funding through the sources described above and, accordingly, it believes it has the ability to continue as a going concern and finance its obligations as they come due over the next twelve months following the date of the issuance of these financial statements. Consequently, the interim condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

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, 2018. There have been no changes to the Company’s significant accounting policies, except as noted below.

Recent accounting pronouncements

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)”, which amends the existing accounting standard for lease accounting and adds additional disclosures about leasing arrangements. ASC 842 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. ASC 842, as amended, subject to certain transition relief options, requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, or allows entities to elect not to recast the comparative periods presented when transitioning to ASC 842 and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASC 842 also provides a practical expedient to lessors by class of underlying asset, to not separate non lease components from the associated lease component, similar to the expedient provided for lessees, when the following criteria are met i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. ASC 842 is effective for public entities with reporting periods beginning after December 15, 2018, including interim periods within those fiscal periods. Early adoption is permitted for all entities. The Company adopted ASC 842 for its reporting period commencing January 1, 2019 and has elected not to recast the comparative periods presented when transitioning to ASC 842. The Company’s time charter agreements are classified as operating leases pursuant to ASC 842, because (i) the vessel is an identifiable asset, (ii) the Company does not have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel, during the term of the contract, and derives the economic benefits from such use. The nature of the lease component and non-lease component that are combined as a result of applying the practical expedient are the contract for the hire of a vessel and the fees for operating and maintaining the vessel respectively. The Company has elected not to separate the lease and non-lease components. The lease component is the predominant component and the Company accounts for the combined component as an operating lease in accordance with Topic 842. Since lessor accounting remains largely unchanged from current U.S. GAAP, the adoption of ASC 842 did not materially impact the Company’s accounting for time charter contracts. The revenue generated from time charter contracts is recognized on a straight-line basis over the term of the respective time charter agreements, which is recorded in “Time charter revenue” in the accompanying unaudited condensed consolidated statements of operations for the three-month periods ended March 31, 2019 and 2018.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

2.   Significant Accounting Policies - continued

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. In November 2018, FASB issued ASU 2018-19 “Codification Improvements to topic 326, Financial Instruments-Credit Losses”. The amendments in this update clarify that operating lease receivables are not within the scope of ASC 326-20 and should instead be accounted for under the new leasing standard, ASC 842. For public entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application is permitted. The adoption of this ASU is not expected to have a material effect on the Company’s unaudited interim condensed consolidated financial statements and accompanying notes.

In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting (Topic 718). ASU 2018-07 simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. For public entities, the amendments in ASU 2018-07 are effective for annual periods beginning after 15 December 2018, and interim periods within those annual periods. The Company adopted this standard for its reporting period commencing January 1, 2019 and it did not have any material impact on its unaudited interim consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the disclosure requirements for fair value measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The adoption of this ASU is not expected to have a material effect on the Company’s unaudited interim condensed consolidated financial statements and accompanying notes.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

3. Vessels, net

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

	Costs		Accumulated Depreciation			Net Book Value
Balance, January 1, 2019		61,279,976		(12,453,848	)		48,826,128
Depreciation for the period		-		(798,712	)		(798,712	)
Balance, March 31, 2019		61,279,976		(13,252,560	)		48,027,416

As of March 31, 2019 all vessels are used as collateral under the Company’s loan agreements (see Note 5).

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

4. Related Party Transactions

The Company’s vessel owning companies are parties to management agreements with the Management Company which is controlled by members of the Pittas family, whereby the Management Company provides technical and commercial vessel management for a fixed daily fee of Euro 685 for both the three months ended 2018 and 2019 under the Company’s Master Management Agreement (“MMA”) with Eurobulk. Vessel management fees paid to the Management Companies amounted to $956,713 and $776,292 in the three-month periods ended March 31, 2018 and 2019, respectively. The MMA was further renewed on January 1, 2018 for an additional five year term until January 1, 2023 with the 5% volume discount permanently incorporated in the daily management fee. The daily management fee remained unchanged at Euros 685 for the year 2019 and will be adjusted annually for inflation in the Eurozone. These fees are recorded under "Related party management fees" in the unaudited condensed consolidated statements of operations.

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 the Company’s subsidiaries. For the three months ended March 31, 2018 and March 31, 2019, compensation paid to the Management Company for such additional services to the Company was $323,529 and $312,500 respectively. This amount is included in “Other general and administrative expenses” in the accompanying unaudited condensed consolidated statements of operations.

Amounts due to or from related company represent net disbursements and collections made on behalf of the vessel-owning companies by the Management Company during the normal course of operations for which a right of offset exists.  As of March 31, 2018 the amount due to related company was $2,672,895. As of March 31, 2019, the amount due from related company was $762,380.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

4. 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. Commissions to Eurochart S.A. for chartering services were $109,516 and $109,112 for the three-month periods ended March 31, 2018 and 2019, 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 insurance premiums not exceeding 5%; Technomar is paid a fee of about $50 per crew member per month. Total fees charged by Sentinel and Technomar were $17,685 and $35,306 in the first three months of 2018, respectively. In the first three months of 2019, total fees charged by Sentinel and Technomar were $16,732 and $32,614, respectively.  These amounts are recorded in “Vessel operating expenses” under “Operating expenses” in the accompanying unaudited condensed consolidated statements of operations.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

5. Long-Term Debt

Long-term debt represents bank loans of the Company. Outstanding long-term debt as of December 31, 2018 and March 31, 2019 is as follows:

Borrower	December 31,2018			March 31,2019
Alterwall Business Inc. / Allendale Investments S.A. / Manolis Shipping Ltd. / Joanna Maritime Ltd. / Jonathan John shipping Ltd. / Athens Shipping Ltd. / Oinousses Navigation Ltd. / Corfu Navigation Ltd. / Bridge Shipping Ltd.		30,000,000			29,100,000
Noumea Shipping Ltd.		3,341,000			3,038,000
Gregos Shipping Ltd.		4,150,000			4,050,000
		37,491,000			36,188,000
Less: Current portion		(5,212,000	)		(4,264,500	)
Long-term portion		32,279,000			31,923,500
Deferred charges, current portion		125,357			126,493
Deferred charges, long-term portion		237,848			205,373
Long-term debt, current portion net of deferred charges		5,086,643			4,138,006
Long-term debt, long-term portion net of deferred charges		32,041,152			31,718,128
Debt discount, current portion		(216,402	)		(486,905	)
Debt discount, long-term portion		(324,603	)		-
Long-term debt, current portion net of deferred charges and debt discount		4,870,241			3,651,102
Long-term debt, long-term portion net of deferred charges and debt discount		31,716,549			31,718,127

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

To March 31:
2020	4,264,500
2021	4,486,000
2022	22,786,000
2023	886,000
2024	3,765,500
Total	36,188,000

Details of the loans are discussed in Note 7 of our consolidated financial statements for the year ended December 31, 2018 included in the Company’s annual report on Form 20-F.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated financial statements

(All amounts expressed in U.S. Dollars)

5. Long-Term Debt - continued

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 loan 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. Minimum cash balance requirements are in addition to cash held in retention accounts. These cash deposits amounted to $5,717,063 and $5,715,250 as of December 31, 2018 and March 31, 2019, respectively, and are included in "Restricted cash" under "Current assets" and "Long-term assets" in the accompanying unaudited condensed consolidated balance sheets. As of March 31, 2019, the Company satisfied all its debt covenants.

Interest expense, including loan fee amortization for the three-month periods ended March 31, 2018 and 2019 amounted to $639,996 and $710,649, respectively.  At March 31, 2019, LIBOR for the Company’s loans was on average approximately 2.63% per year, the average interest rate margin over LIBOR on our debt was approximately 4.17% per year for a total average interest rate of approximately 6.8% per year.

On June 15, 2018, the Company entered into a profit sharing agreement with Credit Agricole whereby it will share with the bank 35% of the excess of the fair market value of M/V "EM Astoria" over the outstanding loan when the vessel is sold or when the loan matures. As a result of the lender's entitlement to participate in the appreciation of the market value of the mortgaged vessel, the Company has recognized a participation liability of amount $1,067,500 as of December 31, 2018 and March 31, 2019, presented in "Vessel profit participation liability" in the accompanying unaudited condensed consolidated balance sheets, with a corresponding debit to a debt discount account, presented contra to the loan balance. In addition, 35% of the cash flow after debt service will be set aside and be used to repay the balloon payment with any excess funds to be paid to the bank. The loan was refinanced in May 2019 (see Note 11).

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated financial statements

(All amounts expressed in U.S. Dollars)

6. Commitments and Contingencies

(a) As of March 31, 2019 a subsidiary of the Company, Alterwall Business Inc., owner of M/V Ninos, has a dispute with a fuel oil supplier who claimed a maritime lien against the vessel after the company which had time-chartered the vessel from the Company went bankrupt in October 2009 and failed to pay certain invoices. The vessel was arrested in Karachi in November 2009 and released after a bank guarantee for an amount of $0.53 million was provided on behalf of the Company, for which the bank has restricted an equal amount of the Company's cash which is presented within Restricted Cash under “Long-term assets”. Legal proceedings continue.  Although the Company believes it will be successful in its claim, it has made a provision of $0.15 million, included in “Other general and administrative expenses” in the unaudited condensed consolidated statements of operations, for any costs that may be incurred.

There are no other material legal proceedings 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 the opinion of the management, the disposition of these lawsuits should not have a material impact on the consolidated results of operations, financial position and cash flows.

7. Stock Incentive Plan

A summary of the status of the Company’s unvested shares as of January 1, 2019, and changes during the three month period ended March 31, 2019, are presented below:

Unvested Shares	Shares		Weighted-Average Grant-Date Fair Value
Unvested on January 1, 2019		175,585		1.27
Granted		-		-
Vested		-		-
Forfeited		-		-
Unvested on March 31, 2019		175,585		1.27

As of March 31, 2019, there was $104,778 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 0.9 years. The share based compensation recognized relating to the unvested shares was $24,863 for the three month periods ended March 31, 2019 (March 31, 2018: $58,870) and is included within “Other general and administrative expenses” in the unaudited condensed consolidated statements of operations.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

8. Loss Per Share

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

	For the three months ended March 31,
	2018			2019
Net loss, continuing operations		(1,422,977	)		(16,032	)
Dividend Series B Preferred shares		(460,033	)		(471,114	)
Net loss attributable to common shareholders, continuing operations		(1,883,010	)		(487,146	)
Weighted average common shares – outstanding, continuing operations		11,133,764			12,340,060
Basic and diluted loss per share, continuing operations		(0.17	)		(0.04	)
Net loss attributable to common shareholders, discontinued operations		(1,445,688	)		-
Net loss attributable to common shareholders		(3,328,698	)		(487,146	)
Basic and diluted loss per share		(0.30	)		(0.04	)

The Company excluded the effect of 175,585 unvested incentive award shares as of March 31, 2019 and 140,362 shares as of March 31, 2018, as well as the effect of Series B preferred shares, as they were anti-dilutive.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

9. Financial Instruments

The principal financial assets of the Company consist of cash at banks 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 “Loss on derivatives, net” in the unaudited condensed consolidated statements of operations. As of December 31, 2018 and March 31, 2019, the Company had one open swap contract of a notional amount of $10 million.

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.

Fair value of financial instruments

The estimated fair values of the Company's financial instruments such as cash and cash equivalents, restricted cash and amount due from related party company approximate their individual carrying amounts as of December 31, 2018 and March 31, 2019, 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 $35.7 million as of March 31, 2019 or approximately $0.6 million less than its carrying value of $36.2 million (excluding the unamortized deferred charges). The fair value of the long term borrowing is 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.

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

9. 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, 2018		(Level 1)		(Level 2)		(Level 3)
Liabilities
Interest rate swap contract, current portion	$	41,435		-	$	41,435		-

	Fair Value Measurement at Reporting Date
	Total, March 31, 2019		(Level 1)		(Level 2)		Significant Other Unobservable Inputs (Level 3)
Liabilities
Interest rate swap contract, current portion	$	22,681		-	$	22,681		-

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

9. Financial Instruments - continued

Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2018	March 31, 2019
Interest rate swap contract	Current liabilities – Derivative	41,435	22,681
Total derivative liabilities		41,435	22,681

Derivative not designated as hedging instruments	Location of loss recognized	Three Months Ended March 31, 2018	Three Months Ended March 31, 2019
Interest rate swap contract– Unrealized gain/ (loss)	Loss on derivatives, net	42,731	(21,548)
Interest rate swap contract  - Realized (loss) / gain	Loss on derivatives, net	(51,200)	18,754
Total  loss on derivative		(8,469)	(2,794)

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

10.Discontinued Operations

Following the close of trading on the Nasdaq Capital Market on May 30, 2018, the Company completed the spin-off of its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold) to EuroDry Ltd. Accordingly, the results of operations and financial condition of EuroDry have been presented in discontinued operations for all historical comparative periods presented. The revenue and loss for the discontinued operations for the periods ended March 31, 2018 and 2019 are analyzed as follows:

	Three months ended March 31, (discontinued operations)
	2018			2019
Statement of Operations Data
Time charter revenue		4,912,495			-
Commissions		(271,808	)		-
Voyage expenses		(94,521	)		-
Vessel operating expenses		(2,347,987	)		-
Drydocking expenses		(1,460,834	)		-
Management fees		(379,410	)		-
Vessel depreciation		(1,205,139	)		-
Other general and administrative expenses		(257,261	)		-
Operating loss		(1,104,465	)		-
Total other expenses, net		(341,223	)		-
Net loss attributable to discontinued operations		(1,445,688	)		-
Loss per share attributable to common shareholders, basic and diluted		(0.65	)		-
Weighted average number of shares outstanding during period, basic and diluted		2,226,753			-

Euroseas Ltd. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

(All amounts expressed in U.S. Dollars)

11.Subsequent Events

(a) On May 30, 2019, the Company agreed to draw new loans totaling $12 million from its revolving loan facility with Eurobank Ergasias S.A.  in order to repay existing indebtedness of approximately $7 million of Noumea Shipping Ltd. and Gregos Shipping Ltd., owners of two of its vessels, the M/V Evridiki G and the M/V EM Astoria, and also repay a fee of approximately $0.95 million relating to the lender’s entitlement to participate in the appreciation in the market value of the latter mortgaged vessel. Following this refinancing, all of the Company’s existing vessels are financed by the same bank, which as part of the arrangement agreed to reduce the loan margin of the facility by 0.5%; the bank, furthermore, agreed to release $4 million of the total $5 million of security deposit required by the loan to be used to redeem the Company’s Series B Preferred Shares.

(b) The Company has agreed to use the liquidity generated by the refinancing, i.e. the $4 million excess liquidity generated by drawing the new loans and the $4 million of security funds released, along with $3.7 million of additional funds from its balance sheet to redeem approximately $11.7 million face value of its outstanding Series B Preferred Shares which, since January 2019, carry an annual dividend of 12% which is set to increase to 14% in January 2021. After the redemption, there will be $8 million face value of Series B Preferred Shares outstanding; in addition the holders of the remaining Series B Preferred Shares agreed to reduce the annual dividend of the shares to 8% until January 2021.

(c) On May 31, 2019, the Company signed memoranda of agreement to acquire four feeder containerships for a consideration that includes a cash payment of $15 million and issuance of $22.5 million shares of common stock to the sellers. The Company intends to finance the cash portion of the acquisition price with bank debt. The shares to be issued to the sellers will represent approximately 64.3% of the shares of the Company. The vessels are owned by affiliates of the Pittas family, controlled by the Company’s CEO. The transactions have been evaluated and approved by a special committee formed by independent members of the Board of the Company. The four vessels, the Diamantis, a 2,008 teu feeder vessel built in 1998, the EM Hydra and the EM Spetses, both 1,700 teu feeder containership built in 2005 and 2007, respectively, and the EM Kea, a 3,100 teu feeder containership built in 2007, represent a significant expansion of the Company’s fleet both in terms of units and value. After the acquisition of these four vessels which are currently chartered, the fleet of the Company will consist of 15 vessels, nine of which were built post 2000; all the vessels except for one are feeder containerships. The acquisition of the vessels is subject to regulatory approval, including approval from NASDAQ.

XML

Document And Entity Information	3 Months Ended
	Mar. 31, 2019
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 Current Reporting Status	Yes
Document Type	6-K
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 4,164,659	$ 6,960,258
Trade accounts receivable, net	1,120,403	958,705
Other receivables	706,071	2,031,415
Inventories	1,238,919	1,704,391
Due from related company	762,380
Restricted cash	115,250	117,063
Prepaid expenses	329,292	222,336
Total current assets	8,436,974	11,994,168
Long-term assets:
Vessels, net	48,027,416	48,826,128
Restricted cash	6,134,267	6,134,267
Total assets	62,598,657	66,954,563
Current liabilities
Long-term bank loans, current portion	3,651,102	4,870,241
Trade accounts payable	1,896,833	2,288,525
Accrued expenses	996,836	1,301,805
Accrued preferred dividends	393,222
Deferred revenues	658,768	417,634
Derivative	22,681	41,435
Vessel profit participation liability	1,067,500
Due to related company		2,672,895
Total current liabilities	8,686,942	11,592,535
Long-term liabilities
Long-term bank loans, net of current portion	31,718,127	31,716,549
Vessel profit participation liability		1,067,500
Total long-term liabilities	31,718,127	32,784,049
Total liabilities	40,405,069	44,376,584
Commitments and Contingencies
Mezzanine Equity
Preferred shares (par value $0.01, 20,000,000 preferred shares authorized, 19,605 and 19,686 issued and outstanding, respectively)	18,835,253	18,757,361
Shareholders’ equity
Common stock (par value $0.03, 200,000,000 shares authorized, 12,515,645 issued and outstanding)	375,476	375,476
Additional paid-in capital	233,692,990	233,668,127
Accumulated deficit	(230,710,131)	(230,222,985)
Total shareholders’ equity	3,358,335	3,820,618
Total liabilities, mezzanine equity and shareholders’ equity	$ 62,598,657	$ 66,954,563

XML

Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	19,686	19,605
Preferred stock, shares outstanding (in shares)	19,686	19,605
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)	12,515,645	12,515,645
Common stock, shares outstanding (in shares)	12,515,645	12,515,645

XML

Unaudited Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Time charter revenue	$ 8,728,986	$ 8,761,317
Commissions (including $109,516 and $109,112, respectively, to related party)	(390,855)	(454,701)
Net revenue, continuing operations	8,338,131	8,306,616
Operating expenses
Voyage expenses	116,117	111,035
Vessel operating expenses (including $52,991 and $49,346, respectively, to related party)	4,789,923	5,575,401
Dry-docking expenses	592,473	747,562
Vessel depreciation	798,712	866,734
Related party management fees	776,292	956,713
Other general and administrative expenses (including $323,529 and $312,500, respectively, to related party)	595,423	820,747
Total operating expenses, continuing operations	7,668,940	9,078,192
Operating (loss) / income, continuing operations	669,191	(771,576)
Other income/(expenses)
Interest and other financing costs	(710,649)	(639,996)
Loss on derivatives, net	(2,794)	(8,469)
Foreign exchange loss	(3,534)	(18,835)
Interest income	31,754	15,899
Other expenses, net, continuing operations	(685,223)	(651,401)
Net loss, continuing operations	(16,032)	(1,422,977)
Dividend Series B Preferred shares	(471,114)	(460,033)
Net loss from continuing operations attributable to common shareholders	$ (487,146)	$ (1,883,010)
Loss per share, basic and diluted, continuing operations (in dollars per share)	$ (0.04)	$ (0.17)
Weighted average number of shares, basic & diluted (in shares)	12,340,060	11,133,764
Net (loss) / income attributable to common shareholders, discontinued operations		$ (1,445,688)
Net loss attributable to common shareholders	$ (487,146)	$ (3,328,698)

XML

Unaudited Condensed Consolidated Statements of Operations (Parentheticals) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Commissions, related party	$ 109,112	$ 109,516
Vessel operating expenses, related party	49,346	52,991
Other general and administrative expenses, related party	$ 312,500	$ 323,529

XML

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, 2017	11,274,126
Balance at Dec. 31, 2017	$ 338,230	$ 284,236,597	$ (237,880,629)	$ 46,694,198
Net loss attributable to common shareholders			(1,883,010)	(1,883,010)
Share-based compensation (in shares)
Share-based compensation		58,870		58,870
Balance (in shares) at Mar. 31, 2018	11,274,126
Balance at Mar. 31, 2018	$ 338,230	284,295,467	(239,763,639)	44,870,058
Balance (in shares) at Dec. 31, 2018	12,515,645
Balance at Dec. 31, 2018	$ 375,476	233,668,127	(230,222,985)	3,820,618
Net loss attributable to common shareholders			(487,146)	(487,146)
Share-based compensation (in shares)
Share-based compensation		24,863		24,863
Balance (in shares) at Mar. 31, 2019	12,515,645
Balance at Mar. 31, 2019	$ 375,476	$ 233,692,990	$ (230,710,131)	$ 3,358,335

XML

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net loss, continuing operations	$ (16,032)	$ (1,422,977)
Adjustments to reconcile net loss to net cash provided by operating activities:
Vessel depreciation	(798,712)	(866,734)
Amortization of deferred charges	(31,339)	(33,281)
Share-based compensation	24,862	58,870
Unrealized gain on derivative	(18,754)	(39,738)
Amortization of debt discount	54,101	88,294
Changes in operating assets and liabilities	(2,368,640)	3,063,872
Net cash provided by / (used in) operating activities of continuing operations	(1,494,412)	2,648,336
Cash flows from financing activities:
Investment in subsidiary spun-off		(2,905,060)
Loan arrangement fees paid		(119,863)
Offering expenses paid		(12,488)
Proceeds from long-term bank loans		4,250,000
Repayment of long-term bank loans	(1,303,000)	(6,240,000)
Net cash used in financing activities of continuing operations	(1,303,000)	(5,027,411)
Net decrease in cash and cash equivalents and restricted cash	(2,797,412)	(2,379,075)
Cash, cash equivalents and restricted cash at beginning of period	13,211,588	8,297,147
Cash, cash equivalents and restricted cash at end of period, continuing operations	10,414,176	5,918,072
Cash breakdown
Total cash, cash equivalents and restricted cash shown in the statement of cash flows, continuing operations	13,211,588	8,297,147
Discontinued operations:
Net cash provided by operating activities of discontinued operations		433,374
Net cash used in investing activities of discontinued operations		2,501,208
Net cash provided by financing activities of discontinued operations		$ 1,648,317

XML

Note 1 - Basis of Presentation and General Information

3 Months Ended

Mar. 31, 2019

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" or “Euroseas”) is engaged in the ocean transportation of containers through ownership and operation of containerships. Euroseas’ common shares trade on the Nasdaq Capital Market under the ticker symbol “ESEA”.

The operations of the vessels are managed by Eurobulk Ltd. (“Eurobulk” or “Management Company” or “Manager”), a corporation controlled by members of the Pittas family.  Eurobulk has an office in Greece located at

4

Messogiou & Evropis Street, Maroussi, Greece. The Manager provides the Company with a wide range of shipping services such as technical support and maintenance, insurance consulting, chartering, financial and accounting services and executive management services, in consideration for fixed and variable fees (see Note

4

).

The Pittas family is the controlling shareholder of Friends Investment Company Inc. which, in turn, owns

29.6%

of the Company’s common shares as of

March 31, 2019.

Following the close of trading on the Nasdaq Capital Market on

May 30, 2018,

the Company completed the spin-off (the “Spin-off”) of its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold) to EuroDry Ltd ("EuroDry"). Shareholders of the Company received

one

EuroDry common share for every

five

common shares of the Company they owned as of

May 23, 2018.

Shares of EuroDry commenced trading on

May 31, 2018

on the Nasdaq Capital Market under the symbol "EDRY." EuroDry operates in the dry cargo, drybulk shipping markets, owning and operating drybulk vessels previously owned and operated by Euroseas, and is now a separate publicly traded company. Euroseas continues to operate in the container shipping market and remains a publicly traded company. Accordingly, the results of operations and financial condition of EuroDry have been presented in discontinued operations for all historical comparative periods presented.

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, 2018

as filed with the U.S. Securities and Exchange Commission ("SEC") on Form

20

-F on

April 25, 2019.

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

three

month period ended

March 31, 2019

are

not

necessarily indicative of the results that might be expected for the fiscal year ending

December 31, 2019.

As of

March 31, 2019,

the Company had a working capital deficit of

$0.25

million and has been incurring losses. The Company’s cash balance amounted to

$4.16

million and cash in restricted and retention accounts amounted to

$6.25

million as of

March 31, 2019.

The Company intends to fund its working capital requirements via cash on hand, cash flow from operations, debt balloon payment refinancing and proceeds from its at-the-market offering and other equity offerings. In the unlikely event that these are

not

sufficient we

may

also draw down up to

$2.00

million under a commitment from COLBY Trading Ltd., a company controlled by the Pittas family and affiliated with the Company’s Chief Executive Officer, and possible vessel sales (where equity will be released), if required, among other options. The Company believes that it will have adequate funding through the sources described above and, accordingly, it believes it has the ability to continue as a going concern and finance its obligations as they come due over the next

twelve

months following the date of the issuance of these financial statements. Consequently, the interim condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

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Note 2 - Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

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, 2018.

There have been

no

changes to the Company’s significant accounting policies, except as noted below.

Recent accounting pronouncements

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

“Leases (Topic

842

)”, which amends the existing accounting standard for lease accounting and adds additional disclosures about leasing arrangements. ASC

842

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. ASC

842,

as amended, subject to certain transition relief options, requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, or allows entities to elect

not

to recast the comparative periods presented when transitioning to ASC

842

and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASC

842

also provides a practical expedient to lessors by class of underlying asset, to

not

separate non lease components from the associated lease component, similar to the expedient provided for lessees, when the following criteria are met i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. ASC

842

is effective for public entities with reporting periods beginning after

December 15, 2018,

including interim periods within those fiscal periods. Early adoption is permitted for all entities. The Company adopted ASC

842

for its reporting period commencing

January 1, 2019

and has elected

not

to recast the comparative periods presented when transitioning to ASC

842.

The Company’s time charter agreements are classified as operating leases pursuant to ASC

842,

because (i) the vessel is an identifiable asset, (ii) the Company does

not

have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel, during the term of the contract, and derives the economic benefits from such use. The nature of the lease component and non-lease component that are combined as a result of applying the practical expedient are the contract for the hire of a vessel and the fees for operating and maintaining the vessel respectively. The Company has elected

not

to separate the lease and non-lease components. The lease component is the predominant component and the Company accounts for the combined component as an operating lease in accordance with Topic

842.

Since lessor accounting remains largely unchanged from current U.S. GAAP, the adoption of ASC

842

did

not

materially impact the Company’s accounting for time charter contracts. The revenue generated from time charter contracts is recognized on a straight-line basis over the term of the respective time charter agreements, which is recorded in “Time charter revenue” in the accompanying unaudited condensed consolidated statements of operations for the

three

-month periods ended

March 31, 2019

and

2018.

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. In

November 2018,

FASB issued ASU

2018

-

19

“Codification Improvements to topic

326,

Financial Instruments-Credit Losses”. The amendments in this update clarify that operating lease receivables are

not

within the scope of ASC

326

-

20

and should instead be accounted for under the new leasing standard, ASC

842.

 For public entities, the amendments in this Update are effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. Early application is permitted. The adoption of this ASU is

not

expected to have a material effect on the Company’s unaudited interim condensed consolidated financial statements and accompanying notes.

In

June 2018,

the FASB issued ASU 

2018

-

07,

Improvements to Nonemployee Share-Based Payment Accounting (Topic

718

). ASU 

2018

-

07

simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. For public entities, the amendments in ASU 

2018

-

07

are effective for annual periods beginning after

15

December 2018,

and interim periods within those annual periods. The Company adopted this standard for its reporting period commencing

January 1, 2019

and it did

not

have any material impact on its unaudited interim consolidated financial statements.

In

August 2018,

the FASB issued ASU

2018

-

13,

Fair Value Measurement (Topic

820

): Disclosure Framework – Changes to the disclosure requirements for fair value measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic

820,

Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level

3

fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The adoption of this ASU is

not

expected to have a material effect on the Company’s unaudited interim condensed consolidated financial statements and accompanying notes.

XML

Note 3 - Vessels, Net

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

3. Vessels, net

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

	Costs	Accumulated Depreciation		Net Book Value
Balance, January 1, 2019	61,279,976	(12,453,848	)	48,826,128
Depreciation for the period	-	(798,712	)	(798,712	)
Balance, March 31, 2019	61,279,976	(13,252,560	)	48,027,416

As of

March 31, 2019

all vessels are used as collateral under the Company’s loan agreements (see Note

5

).

XML

Note 4 - Related Party Transactions

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

4. Related Party Transactions

The Company’s vessel owning companies are parties to management agreements with the Management Company which is controlled by members of the Pittas family, whereby the Management Company provides technical and commercial vessel management for a fixed daily fee of Euro

685

for both the

three

months ended

2018

and

2019

under the Company’s Master Management Agreement (“MMA”) with Eurobulk. Vessel management fees paid to the Management Companies amounted to

$956,713

and

$776,292

in the

three

-month periods ended

March 31, 2018

and

2019,

respectively.

The MMA was further renewed on

January 1, 2018

for an additional

five

year term until

January 1, 2023

with the

5%

volume discount permanently incorporated in the daily management fee. The daily management fee remained unchanged at Euros

685

for the year

2019

and will be adjusted annually for inflation in the Eurozone. These fees are recorded under "Related party management fees" in the unaudited condensed consolidated statements of operations.

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 the Company’s subsidiaries. For the

three

months ended

March 31, 2018

and

March 31, 2019,

compensation paid to the Management Company for such additional services to the Company was

$323,529

and

$312,500

respectively. This amount is included in “Other general and administrative expenses” in the accompanying unaudited condensed consolidated statements of operations.

Amounts due to or from related company represent net disbursements and collections made on behalf of the vessel-owning companies by the Management Company during the normal course of operations for which a right of offset exists. As of

March 31, 2018

the amount due to related company was

$2,672,895.

As of

March 31, 2019,

the amount due from related company was

$762,380.

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. Commissions to Eurochart S.A. for chartering services were

$109,516

and

$109,112

for the

three

-month periods ended

March 31, 2018

and

2019,

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 insurance premiums

not

exceeding

5%;

Technomar is paid a fee of about

$50

per crew member per month. Total fees charged by Sentinel and Technomar were

$17,685

and

$35,306

in the

first

three

months of

2018,

respectively. In the

first

three

months of

2019,

total fees charged by Sentinel and Technomar were

$16,732

and

$32,614,

respectively. These amounts are recorded in “Vessel operating expenses” under “Operating expenses” in the accompanying unaudited condensed consolidated statements of operations.

XML

Note 5 - Long-term Debt

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Long-term Debt [Text Block]

5. Long-Term Debt

Long-term debt represents bank loans of the Company. Outstanding long-term debt as of

December 31, 2018

and

March 31, 2019

is as follows:

Borrower	December 31, 2018		March 31, 2019
Alterwall Business Inc. / Allendale Investments S.A. / Manolis Shipping Ltd. / Joanna Maritime Ltd. / Jonathan John shipping Ltd. / Athens Shipping Ltd. / Oinousses Navigation Ltd. / Corfu Navigation Ltd. / Bridge Shipping Ltd.	30,000,000		29,100,000
Noumea Shipping Ltd.	3,341,000		3,038,000
Gregos Shipping Ltd.	4,150,000		4,050,000
	37,491,000		36,188,000
Less: Current portion	(5,212,000	)	(4,264,500	)
Long-term portion	32,279,000		31,923,500
Deferred charges, current portion	125,357		126,493
Deferred charges, long-term portion	237,848		205,373
Long-term debt, current portion net of deferred charges	5,086,643		4,138,006
Long-term debt, long-term portion net of deferred charges	32,041,152		31,718,128
Debt discount, current portion	(216,402	)	(486,905	)
Debt discount, long-term portion	(324,603	)	-
Long-term debt, current portion net of deferred charges and debt discount	4,870,241		3,651,102
Long-term debt, long-term portion net of deferred charges and debt discount	31,716,549		31,718,127

None

of the above loans are registered in the U.S. The future annual loan repayments are as follows:

To March 31:
2020	4,264,500
2021	4,486,000
2022	22,786,000
2023	886,000
2024	3,765,500
Total	36,188,000

Details of the loans are discussed in Note

7

of our consolidated financial statements for the year ended

December 31, 2018

included in the Company’s annual report on Form

20

-F.

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 loan 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. Minimum cash balance requirements are in addition to cash held in retention accounts. These cash deposits amounted to

$5,717,063

and

$5,715,250

as of

December 31, 2018

and

March 31, 2019,

respectively, and are included in "Restricted cash" under "Current assets" and "Long-term assets" in the accompanying unaudited condensed consolidated balance sheets. As of

March 31, 2019,

the Company satisfied all its debt covenants.

Interest expense, including loan fee amortization for the

three

-month periods ended

March 31, 2018

and

2019

amounted to

$639,996

and

$710,649,

respectively. At

March 31, 2019,

LIBOR for the Company’s loans was on average approximately

2.63%

per year, the average interest rate margin over LIBOR on our debt was approximately

4.17%

per year for a total average interest rate of approximately

6.8%

per year.

On

June 15, 2018,

the Company entered into a profit sharing agreement with Credit Agricole whereby it will share with the bank

35%

of the excess of the fair market value of M/V "EM Astoria" over the outstanding loan when the vessel is sold or when the loan matures. As a result of the lender's entitlement to participate in the appreciation of the market value of the mortgaged vessel, the Company has recognized a participation liability of amount

$1,067,500

as of

December 31, 2018

and

March 31, 2019,

presented in "Vessel profit participation liability" in the accompanying unaudited condensed consolidated balance sheets, with a corresponding debit to a debt discount account, presented contra to the loan balance. In addition,

35%

of the cash flow after debt service will be set aside and be used to repay the balloon payment with any excess funds to be paid to the bank. The loan was refinanced in

May 2019 (

see Note

11

).

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Note 6 - Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

6. Commitments and Contingencies

(a) As of March 31, 2019 a subsidiary of the Company, Alterwall Business Inc., owner of M/V Ninos, has a dispute with a fuel oil supplier who claimed a maritime lien against the vessel after the company which had time-chartered the vessel from the Company went bankrupt in October 2009 and failed to pay certain invoices. The vessel was arrested in Karachi in November 2009 and released after a bank guarantee for an amount of $0.53 million was provided on behalf of the Company, for which the bank has restricted an equal amount of the Company's cash which is presented within Restricted Cash under “Long-term assets”. Legal proceedings continue.  Although the Company believes it will be successful in its claim, it has made a provision of $0.15 million, included in “Other general and administrative expenses” in the unaudited condensed consolidated statements of operations, for any costs that may be incurred.

There are

no

other material legal proceedings 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 the opinion of the management, the disposition of these lawsuits should

not

have a material impact on the consolidated results of operations, financial position and cash flows.

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Note 7 - Stock Incentive Plan

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

7. Stock Incentive Plan

A summary of the status of the Company’s unvested shares as of

January 1, 2019,

and changes during the

three

month period ended

March 31, 2019,

are presented below:

Unvested Shares	Shares	Weighted-Average Grant-Date Fair Value
Unvested on January 1, 2019	175,585	1.27
Granted	-	-
Vested	-	-
Forfeited	-	-
Unvested on March 31, 2019	175,585	1.27

As of

March 31, 2019,

there was

$104,778

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

0.9

years. The share based compensation recognized relating to the unvested shares was

$24,863

for the

three

month periods ended

March 31, 2019 (

March 31, 2018:

$58,870

) and is included within “Other general and administrative expenses” in the unaudited condensed consolidated statements of operations.

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Note 8 - Loss Per Share

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Earnings Per Share [Text Block]

8. Loss Per Share

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

	For the three months ended March 31,
	2018			2019
Net loss, continuing operations		(1,422,977	)		(16,032	)
Dividend Series B Preferred shares		(460,033	)		(471,114	)
Net loss attributable to common shareholders, continuing operations		(1,883,010	)		(487,146	)
Weighted average common shares – outstanding, continuing operations		11,133,764			12,340,060
Basic and diluted loss per share, continuing operations		(0.17	)		(0.04	)
Net loss attributable to common shareholders, discontinued operations		(1,445,688	)		–
Net loss attributable to common shareholders		(3,328,698	)		(487,146	)
Basic and diluted loss per share		(0.30	)		(0.04	)

The Company excluded the effect of

175,585

unvested incentive award shares as of

March 31, 2019

and

140,362

shares as of

March 31, 2018,

as well as the effect of Series B preferred shares, as they were anti-dilutive.

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Note 9 - Financial Instruments

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Financial Instruments Disclosure [Text Block]

9. Financial Instruments

The principal financial assets of the Company consist of cash at banks 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 “Loss on derivatives, net” in the unaudited condensed consolidated statements of operations. As of

December 31, 2018

and

March 31, 2019,

the Company had

one

open swap contract of a notional amount of

$10

million.

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.

Fair value of financial instruments

The estimated fair values of the Company's financial instruments such as cash and cash equivalents, restricted cash and amount due from related party company approximate their individual carrying amounts as of

December 31, 2018

and

March 31, 2019,

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

$35.7

million as of

March 31, 2019

or approximately

$0.6

million less than its carrying value of

$36.2

million (excluding the unamortized deferred charges). The fair value of the long term borrowing is 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.

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, 2018	(Level 1)		(Level 2)	(Level 3)
Liabilities
Interest rate swap contract, current portion	$	41,435	-	$	41,435	-

	Fair Value Measurement at Reporting Date
		Total, March 31, 2019	(Level 1)		(Level 2)	Significant Other Unobservable Inputs (Level 3)
Liabilities
Interest rate swap contract, current portion	$	22,681	-	$	22,681	-

Derivatives not designated as hedging instruments	Balance Sheet Location	December 31, 2018	March 31, 2019
Interest rate swap contract	Current liabilities – Derivative	41,435	22,681
Total derivative liabilities		41,435	22,681

Derivative not designated as hedging instruments	Location of loss recognized	Three Months Ended March 31, 2018	Three Months Ended March 31, 2019
Interest rate swap contract– Unrealized gain/ (loss)	Loss on derivatives, net	42,731	(21,548)
Interest rate swap contract  - Realized (loss) / gain	Loss on derivatives, net	(51,200)	18,754
Total loss on derivative		(8,469)	(2,794)

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Note 10 - Discontinued Operations

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

10. Discontinued Operations

Following the close of trading on the Nasdaq Capital Market on

May 30, 2018,

the Company completed the spin-off of its drybulk fleet (excluding M/V Monica P, a handymax drybulk carrier, which was agreed to be sold) to EuroDry Ltd. Accordingly, the results of operations and financial condition of EuroDry have been presented in discontinued operations for all historical comparative periods presented. The revenue and loss for the discontinued operations for the periods ended

March 

31,

2018

and

2019

are analyzed as follows:

	Three months ended March 31, (discontinued operations)
	2018			2019
Statement of Operations Data
Time charter revenue		4,912,495			–
Commissions		(271,808	)		–
Voyage expenses		(94,521	)		–
Vessel operating expenses		(2,347,987	)		–
Drydocking expenses		(1,460,834	)		–
Management fees		(379,410	)		–
Vessel depreciation		(1,205,139	)		–
Other general and administrative expenses		(257,261	)		–
Operating loss		(1,104,465	)		–
Total other expenses, net		(341,223	)		–
Net loss attributable to discontinued operations		(1,445,688	)		–
Loss per share attributable to common shareholders, basic and diluted		(0.65	)		–
Weighted average number of shares outstanding during period, basic and diluted		2,226,753			–

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Note 11 - Subsequent Events

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

11. Subsequent Events

(a) On May 30, 2019, the Company agreed to draw new loans totaling $12 million from its revolving loan facility with Eurobank Ergasias S.A. in order to repay existing indebtedness of approximately $7 million of Noumea Shipping Ltd. and Gregos Shipping Ltd., owners of two of its vessels, the M/V Evridiki G and the M/V EM Astoria, and also repay a fee of approximately $0.95 million relating to the lender’s entitlement to participate in the appreciation in the market value of the latter mortgaged vessel. Following this refinancing, all of the Company’s existing vessels are financed by the same bank, which as part of the arrangement agreed to reduce the loan margin of the facility by 0.5%; the bank, furthermore, agreed to release $4 million of the total $5 million of security deposit required by the loan to be used to redeem the Company’s Series B Preferred Shares.

(b) The Company has agreed to use the liquidity generated by the refinancing, i.e. the $4 million excess liquidity generated by drawing the new loans and the $4 million of security funds released, along with $3.7 million of additional funds from its balance sheet to redeem approximately $11.7 million face value of its outstanding Series B Preferred Shares which, since January 2019, carry an annual dividend of 12% which is set to increase to 14% in January 2021. After the redemption, there will be $8 million face value of Series B Preferred Shares outstanding; in addition the holders of the remaining Series B Preferred Shares agreed to reduce the annual dividend of the shares to 8% until January 2021.

(c) On May 31, 2019, the Company signed memoranda of agreement to acquire four feeder containerships for a consideration that includes a cash payment of $15 million and issuance of $22.5 million shares of common stock to the sellers. The Company intends to finance the cash portion of the acquisition price with bank debt. The shares to be issued to the sellers will represent approximately 64.3% of the shares of the Company. The vessels are owned by affiliates of the Pittas family, controlled by the Company’s CEO. The transactions have been evaluated and approved by a special committee formed by independent members of the Board of the Company. The four vessels, the Diamantis, a 2,008 teu feeder vessel built in 1998, the EM Hydra and the EM Spetses, both 1,700 teu feeder containership built in 2005 and 2007, respectively, and the EM Kea, a 3,100 teu feeder containership built in 2007, represent a significant expansion of the Company’s fleet both in terms of units and value. After the acquisition of these four vessels which are currently chartered, the fleet of the Company will consist of 15 vessels, nine of which were built post 2000; all the vessels except for one are feeder containerships. The acquisition of the vessel is subject to regulatory approval, including approval from NASDAQ.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recent accounting pronouncements

In

February 2016,

the FASB issued ASU

No.

2016

-

02,

“Leases (Topic

842

)”, which amends the existing accounting standard for lease accounting and adds additional disclosures about leasing arrangements. ASC

842

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. ASC

842,

as amended, subject to certain transition relief options, requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, or allows entities to elect

not

to recast the comparative periods presented when transitioning to ASC

842

and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASC

842

also provides a practical expedient to lessors by class of underlying asset, to

not

separate non lease components from the associated lease component, similar to the expedient provided for lessees, when the following criteria are met i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. ASC

842

is effective for public entities with reporting periods beginning after

December 15, 2018,

including interim periods within those fiscal periods. Early adoption is permitted for all entities. The Company adopted ASC

842

for its reporting period commencing

January 1, 2019

and has elected

not

to recast the comparative periods presented when transitioning to ASC

842.

The Company’s time charter agreements are classified as operating leases pursuant to ASC

842,

because (i) the vessel is an identifiable asset, (ii) the Company does

not

have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel, during the term of the contract, and derives the economic benefits from such use. The nature of the lease component and non-lease component that are combined as a result of applying the practical expedient are the contract for the hire of a vessel and the fees for operating and maintaining the vessel respectively. The Company has elected

not

to separate the lease and non-lease components. The lease component is the predominant component and the Company accounts for the combined component as an operating lease in accordance with Topic

842.

Since lessor accounting remains largely unchanged from current U.S. GAAP, the adoption of ASC

842

did

not

materially impact the Company’s accounting for time charter contracts. The revenue generated from time charter contracts is recognized on a straight-line basis over the term of the respective time charter agreements, which is recorded in “Time charter revenue” in the accompanying unaudited condensed consolidated statements of operations for the

three

-month periods ended

March 31, 2019

and

2018.

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. In

November 2018,

FASB issued ASU

2018

-

19

“Codification Improvements to topic

326,

Financial Instruments-Credit Losses”. The amendments in this update clarify that operating lease receivables are

not

within the scope of ASC

326

-

20

and should instead be accounted for under the new leasing standard, ASC

842.

 For public entities, the amendments in this Update are effective for fiscal years beginning after

December 15, 2019,

including interim periods within those fiscal years. Early application is permitted. The adoption of this ASU is

not

expected to have a material effect on the Company’s unaudited interim condensed consolidated financial statements and accompanying notes.

In

June 2018,

the FASB issued ASU 

2018

-

07,

Improvements to Nonemployee Share-Based Payment Accounting (Topic

718

). ASU 

2018

-

07

simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. For public entities, the amendments in ASU 

2018

-

07

are effective for annual periods beginning after

15

December 2018,

and interim periods within those annual periods. The Company adopted this standard for its reporting period commencing

January 1, 2019

and it did

not

have any material impact on its unaudited interim consolidated financial statements.

In

August 2018,

the FASB issued ASU

2018

-

13,

Fair Value Measurement (Topic

820

): Disclosure Framework – Changes to the disclosure requirements for fair value measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic

820,

Fair Value Measurement, based on the concepts in the Concepts Statement, including the consideration of costs and benefits. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level

3

fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The adoption of this ASU is

not

expected to have a material effect on the Company’s unaudited interim condensed consolidated financial statements and accompanying notes.

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Note 3 - Vessels, Net (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

	Costs	Accumulated Depreciation		Net Book Value
Balance, January 1, 2019	61,279,976	(12,453,848	)	48,826,128
Depreciation for the period	-	(798,712	)	(798,712	)
Balance, March 31, 2019	61,279,976	(13,252,560	)	48,027,416

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Note 5 - Long-term Debt (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

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

Borrower	December 31, 2018		March 31, 2019
Alterwall Business Inc. / Allendale Investments S.A. / Manolis Shipping Ltd. / Joanna Maritime Ltd. / Jonathan John shipping Ltd. / Athens Shipping Ltd. / Oinousses Navigation Ltd. / Corfu Navigation Ltd. / Bridge Shipping Ltd.	30,000,000		29,100,000
Noumea Shipping Ltd.	3,341,000		3,038,000
Gregos Shipping Ltd.	4,150,000		4,050,000
	37,491,000		36,188,000
Less: Current portion	(5,212,000	)	(4,264,500	)
Long-term portion	32,279,000		31,923,500
Deferred charges, current portion	125,357		126,493
Deferred charges, long-term portion	237,848		205,373
Long-term debt, current portion net of deferred charges	5,086,643		4,138,006
Long-term debt, long-term portion net of deferred charges	32,041,152		31,718,128
Debt discount, current portion	(216,402	)	(486,905	)
Debt discount, long-term portion	(324,603	)	-
Long-term debt, current portion net of deferred charges and debt discount	4,870,241		3,651,102
Long-term debt, long-term portion net of deferred charges and debt discount	31,716,549		31,718,127

Schedule of Future Annual Loan Repayments [Table Text Block]

To March 31:
2020	4,264,500
2021	4,486,000
2022	22,786,000
2023	886,000
2024	3,765,500
Total	36,188,000

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Note 7 - Stock Incentive Plan (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Nonvested Share Activity [Table Text Block]

Unvested Shares	Shares	Weighted-Average Grant-Date Fair Value
Unvested on January 1, 2019	175,585	1.27
Granted	-	-
Vested	-	-
Forfeited	-	-
Unvested on March 31, 2019	175,585	1.27

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Note 8 - Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

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

	For the three months ended March 31,
	2018			2019
Net loss, continuing operations		(1,422,977	)		(16,032	)
Dividend Series B Preferred shares		(460,033	)		(471,114	)
Net loss attributable to common shareholders, continuing operations		(1,883,010	)		(487,146	)
Weighted average common shares – outstanding, continuing operations		11,133,764			12,340,060
Basic and diluted loss per share, continuing operations		(0.17	)		(0.04	)
Net loss attributable to common shareholders, discontinued operations		(1,445,688	)		–
Net loss attributable to common shareholders		(3,328,698	)		(487,146	)
Basic and diluted loss per share		(0.30	)		(0.04	)

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Note 9 - Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

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

	Fair Value Measurement at Reporting Date
		Total, December 31, 2018	(Level 1)		(Level 2)	(Level 3)
Liabilities
Interest rate swap contract, current portion	$	41,435	-	$	41,435	-

	Fair Value Measurement at Reporting Date
		Total, March 31, 2019	(Level 1)		(Level 2)	Significant Other Unobservable Inputs (Level 3)
Liabilities
Interest rate swap contract, current portion	$	22,681	-	$	22,681	-

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, 2018	March 31, 2019
Interest rate swap contract	Current liabilities – Derivative	41,435	22,681
Total derivative liabilities		41,435	22,681

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

Derivative not designated as hedging instruments	Location of loss recognized	Three Months Ended March 31, 2018	Three Months Ended March 31, 2019
Interest rate swap contract– Unrealized gain/ (loss)	Loss on derivatives, net	42,731	(21,548)
Interest rate swap contract  - Realized (loss) / gain	Loss on derivatives, net	(51,200)	18,754
Total loss on derivative		(8,469)	(2,794)

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Note 10 - Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Disposal Groups, Including Discontinued Operations [Table Text Block]

	Three months ended March 31, (discontinued operations)
	2018			2019
Statement of Operations Data
Time charter revenue		4,912,495			–
Commissions		(271,808	)		–
Voyage expenses		(94,521	)		–
Vessel operating expenses		(2,347,987	)		–
Drydocking expenses		(1,460,834	)		–
Management fees		(379,410	)		–
Vessel depreciation		(1,205,139	)		–
Other general and administrative expenses		(257,261	)		–
Operating loss		(1,104,465	)		–
Total other expenses, net		(341,223	)		–
Net loss attributable to discontinued operations		(1,445,688	)		–
Loss per share attributable to common shareholders, basic and diluted		(0.65	)		–
Weighted average number of shares outstanding during period, basic and diluted		2,226,753			–

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Note 1 - Basis of Presentation and General Information (Details Textual) - USD ($) $ in Thousands	Mar. 31, 2019	May 30, 2018
Spinoff Transaction, Number of Eurodry Common Share Received by Company’s Shareholders for Every Five Common Shares		1
Spinoff Transaction, Number of Company’s Common Shares Exchanged for Each Common Share of Eurodry		5
Working Capital Deficit	$ 250
Cash, Ending Balance	4,160
Restricted Cash and Cash Equivalents, Total	6,250
Commitments and Vessel Sales, Draw-down Capacity	$ 2,000
Friends Investment Company Inc. [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	29.60%

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Note 3 - Vessels, Net - Summary of Vessels (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net book value	$ 48,826,128
Vessel depreciation	(798,712)	$ (866,734)
Net book value	48,027,416
Vessels [Member]
Costs	61,279,976
Accumulated depreciation	(12,453,848)
Net book value	48,826,128
Vessel depreciation	(798,712)
Costs	61,279,976
Accumulated depreciation	(13,252,560)
Net book value	$ 48,027,416

XML

Note 4 - Related Party Transactions (Details Textual)			3 Months Ended				12 Months Ended
	Jan. 01, 2018	Jan. 01, 2011	Mar. 31, 2019 USD ($)	Mar. 31, 2019 EUR (€)	Mar. 31, 2018 USD ($)	Mar. 31, 2018 EUR (€)	Dec. 31, 2018 EUR (€)
Service Management Costs Daily Fee Related Party | €				€ 685		€ 685	€ 685
Related Party Agreement Term		5 years
Related Party Transaction Discount Percentage	5.00%
Due to Related Parties, Total					$ 2,672,895
Due from Related Parties, Total			$ 762,380
Eurobulk Ltd. [Member] | Fixed Management Fees [Member]
Related Party Transaction, Amounts of Transaction			312,500		323,529
Eurobulk Ltd. [Member] | Vessel Management Fees [Member]
Related Party Transaction, Amounts of Transaction			$ 776,292		956,713
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			$ 109,112		109,516
Sentinel [Member]
Related Party Transaction, Expenses from Transactions with Related Party			$ 16,732		17,685
Related Party Transaction Commission on Premium, Maximum, Percentage			5.00%	5.00%
Technomar [Member]
Related Party Transaction, Expenses from Transactions with Related Party			$ 32,614		$ 35,306
Related Party Transaction Amounts of Transaction Per Crew Member Per Month			$ 50

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Note 5 - Long-term Debt (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Jun. 15, 2018
Limited Dividends Percentage Loans to Profits	60.00%
Restricted Cash, Total	$ 5,715,250		$ 5,717,063
Interest Expense, Total	$ 710,649	$ 639,996
Debt Instrument, Interest Rate During Period	6.80%
Vessel Profit Participation Liability, Current	$ 1,067,500
Loan Agreement to Finance Acquisition of M/V EM Astoria [Member]
Percent Shared With Bank in Excess of Fair Market Value				35.00%
Vessel Profit Participation Liability, Current	$ 1,067,500		$ 1,067,500
Percent of Cash Flow After Debt Service Set Aside	35.00%
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument Variable Interest Rate	2.63%
Debt Instrument, Basis Spread on Variable Rate	4.17%

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Note 5 - Long-term Debt - Summary of Long-term Debt (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Long-term debt, gross	$ 36,188,000	$ 37,491,000
Less: Current portion	(4,264,500)	(5,212,000)
Long-term portion	31,923,500	32,279,000
Deferred charges, current portion	126,493	125,357
Deferred charges, long-term portion	205,373	237,848
Long-term debt, current portion net of deferred charges	4,138,006	5,086,643
Long-term debt, long-term portion net of deferred charges	31,718,128	32,041,152
Debt discount, current portion	(486,905)	(216,402)
Debt discount, long-term portion		(324,603)
Long-term debt, current portion net of deferred charges and debt discount	3,651,102	4,870,241
Long-term debt, long-term portion net of deferred charges and debt discount	31,718,127	31,716,549
Alterwall Business Inc., Allendale Investments S.A., Manolis Shipping Ltd., Joanna Maritime Ltd., Jonathan John shipping Ltd., Athens Shipping Ltd., Oinousses Navigation Ltd., Corfu Navigation Ltd., Bridge Shipping Ltd [Member]
Long-term debt, gross	29,100,000	30,000,000
Noumea Shipping Ltd. Borrower [Member]
Long-term debt, gross	3,038,000	3,341,000
Gregos Shipping Ltd [Member]
Long-term debt, gross	$ 4,050,000	$ 4,150,000

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Note 5 - Long-term Debt - Summary of Future Annual Loan Repayments for Long-term Debt (Details)	Mar. 31, 2019 USD ($)
2020	$ 4,264,500
2021	4,486,000
2022	22,786,000
2023	886,000
2024	3,765,500
Total	$ 36,188,000

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Note 6 - Commitments and Contingencies (Details Textual) - Alterwall Business Inc. Vs. Fuel Oil Supplier [Member] - Pending Litigation [Member] - Alterwall Business Inc. [Member] $ in Thousands	Mar. 31, 2019 USD ($)
Restricted Cash and Investments, Total	$ 530
Estimated Litigation Liability	$ 150

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Note 7 - Stock Incentive Plan (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 104,778
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition	328 days
General and Administrative Expense [Member]
Share-based Payment Arrangement, Expense	$ 24,863	$ 58,870

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Note 7 - Stock Incentive Plan - Summary of the Status of the Company's Non-vested Shares (Details) - Restricted Stock [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Unvested (in shares) | shares	175,585
Unvested, weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.27
Granted (in shares) | shares
Granted, weighted average grant date fair value (in dollars per share) | $ / shares
Vested (in shares) | shares
Vested, weighted average grant date fair value (in dollars per share) | $ / shares
Forfeited (in shares) | shares
Forfeited, weighted average grant date fair value (in dollars per share) | $ / shares
Unvested (in shares) | shares	175,585
Unvested, weighted average grant date fair value (in dollars per share) | $ / shares	$ 1.27

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Note 8 - Loss Per Share (Details Textual) - shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	175,585	140,362

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Note 8 - Loss Per Share - Summary of Basic and Diluted Loss Per Common Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net loss, continuing operations	$ (16,032)	$ (1,422,977)
Dividend Series B Preferred shares	(471,114)	(460,033)
Net loss attributable to common shareholders, continuing operations	$ (487,146)	$ (1,883,010)
Weighted average common shares – outstanding, continuing operations (in shares)	12,340,060	11,133,764
Basic and diluted loss per share, continuing operations (in dollars per share)	$ (0.04)	$ (0.17)
Net loss attributable to common shareholders, discontinued operations		$ (1,445,688)
Net loss attributable to common shareholders	$ (487,146)	$ (3,328,698)
Basic and diluted loss per share (in dollars per share)	$ (0.04)	$ (0.30)
Preferred Class B [Member]
Dividend Series B Preferred shares	$ (471,114)	$ (460,033)

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Note 9 - Financial Instruments (Details Textual)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Long-term Debt, Fair Value	$ 35,700,000
Difference Between Fair Value and Carrying Value	600,000
Long-term Debt, Total	$ 36,188,000
Interest Rate Swap [Member]
Derivative, Number of Instruments Held, Total	1	1
Derivative, Notional Amount	$ 10,000,000	$ 10,000,000

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Note 9 - Financial Instruments - Fair Value of Company's Liabilities (Details) - Interest Rate Swap [Member] - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Interest rate swap contract, current portion	$ 22,681	$ 41,435
Fair Value, Inputs, Level 1 [Member]
Interest rate swap contract, current portion
Fair Value, Inputs, Level 2 [Member]
Interest rate swap contract, current portion	22,681	41,435
Fair Value, Inputs, Level 3 [Member]
Interest rate swap contract, current portion

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Note 9 - Financial Instruments - Derivatives Not Designated as Hedging Instruments by Account Type (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Interest rate contract	$ 22,681	$ 41,435
Total derivative liabilities	$ 22,681	$ 41,435

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Note 9 - Financial Instruments - Gain or Loss on Derivatives Not Designated as Hedging Instruments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest rate swap contract– Unrealized gain/ (loss)	$ (2,794)	$ (8,469)
Not Designated as Hedging Instrument [Member]
Interest rate swap contract– Unrealized gain/ (loss)	(2,794)	(8,469)
Not Designated as Hedging Instrument [Member] | Interest Rate Swap Contracts, Fair Value [Member]
Interest rate swap contract– Unrealized gain/ (loss)	(21,548)	42,731
Not Designated as Hedging Instrument [Member] | Interest Rate Contracts, Realized (Loss) / Gain [Member]
Interest rate swap contract– Unrealized gain/ (loss)	$ 18,754	$ (51,200)

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Note 10 - Discontinued Operations - Results of Discontinued Operations (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Spinoff [Member] - Drybulk Fleet [Member]	3 Months Ended
	Mar. 31, 2018 USD ($) $ / shares shares
Time charter revenue	$ 4,912,495
Commissions	(271,808)
Voyage expenses	(94,521)
Vessel operating expenses	(2,347,987)
Drydocking expenses	(1,460,834)
Management fees	(379,410)
Vessel depreciation	(1,205,139)
Other general and administrative expenses	(257,261)
Operating loss	(1,104,465)
Total other expenses, net	(341,223)
Net loss attributable to discontinued operations	$ (1,445,688)
Loss per share attributable to common shareholders, basic and diluted (in dollars per share) | $ / shares	$ (0.65)
Weighted average number of shares outstanding during period, basic and diluted (in shares) | shares	2,226,753

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Note 11 - Subsequent Events (Details Textual)				3 Months Ended		5 Months Ended	19 Months Ended
	Jan. 01, 2021	May 31, 2019 USD ($) shares	May 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	May 29, 2019	Jan. 01, 2021	Mar. 29, 2019 USD ($)
Repayments of Long-term Debt, Total				$ 1,303,000	$ 6,240,000
Security Deposit								$ 4,000,000
Preferred Class B [Member] | Forecast [Member]
Preferred Stock, Dividend Rate, Percentage	14.00%						8.00%
Eurobank Ergasias S.A. [Member] | Series B Preferred Stock [Member]
Security Deposit								$ 5,000,000
Subsequent Event [Member]
Debt Instrument, Excess Liquidity			$ 4,000,000
Additional Funding from Balance Sheet			3,700,000
Number of Vessels Acquired		15
Subsequent Event [Member] | Four Feeder Containerships [Member]
Number of Vessels Acquired		4
Payments to Acquire Property, Plant, and Equipment, Total		$ 15,000,000
Stock Issued During Period, Value, Purchase of Assets		$ 22,500,000
Shares Issued, Percent of Outsanding Shares of the Company | shares		64.3
Subsequent Event [Member] | Series B Preferred Stock [Member]
Payments for Repurchase of Preferred Stock and Preference Stock			11,700,000
Subsequent Event [Member] | Preferred Class B [Member]
Preferred Stock, Dividend Rate, Percentage						12.00%
Preferred Stock, Value, Outstanding			$ 8,000,000
Subsequent Event [Member] | Eurobank Ergasias S.A. [Member]
Debt Instrument, Interest Rate, Increase (Decrease)			(0.50%)
Subsequent Event [Member] | Eurobank Ergasias S.A. [Member] | Series B Preferred Stock [Member]
Increase (Decrease) in Security Deposits			$ 4,000,000
Loan Agreement to Repay Debt for M/V Evridiki G and M/V EM Astoria, and Repay Fee to Lenders [Member] | Subsequent Event [Member]
Debt Instrument, Face Amount			12,000,000
Repayments of Long-term Debt, Total			7,000,000
Repayment of Fee, Lender's Entitlement to Appreciation of the Market Value of Mortgaged Vessel			$ 950,000