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Republic of the Marshall Islands		4412		Not Applicable
(State or other jurisdiction of incorporation or organization)		Primary Standard Industrial Classification Code Number		(I.R.S. Employer Identification No.)

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Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state in which the offer or sale is not permitted.

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ABOUT THIS PROSPECTUS			ii
HOW TO OBTAIN ADDITIONAL INFORMATION			ii
PROSPECTUS SUMMARY			1
RISK FACTORS			7
FORWARD-LOOKING STATEMENTS			21
USE OF PROCEEDS			21
CAPITALIZATION			22
DILUTION			22
SELECTED HISTORICAL FINANCIAL INFORMATION			24
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			26
INDUSTRY			42
BUSINESS			44
MANAGEMENT			52
PRINCIPAL SHAREHOLDERS			56
CERTAIN RELATED TRANSACTIONS			57
DESCRIPTION OF EUROSEAS SECURITIES			57
CERTAIN MARSHALL ISLANDS COMPANY CONSIDERATIONS			60
TAX CONSIDERATIONS			63
THE OFFERING			70
SELLING SHAREHOLDERS			71
PLAN OF DISTRIBUTION			75
EXPERTS			77
LEGAL MATTERS			77
WHERE YOU CAN FIND ADDITIONAL INFORMATION			77
ENFORCEABILITY OF CIVIL LIABILITIES			77
GLOSSARY OF SHIPPING TERMS			77
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1
EX-23.2: CONSENT OF DELOITTE, HADJIPAVLOU, SOFIANOS & CAMBANIS S.A.

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	There may not be an active market for our shares, which may cause our shares to trade at lower prices and make it difficult to sell your shares.

	The price of our shares may be volatile and less than you originally paid for such shares.

	•	actual or anticipated fluctuations in quarterly and annual results;
	•	mergers and strategic alliances in the shipping industry;
	•	market conditions in the industry;
	•	changes in government regulation;
	•	fluctuations in our quarterly revenues and earnings and those of our publicly held competitors;
	•	shortfalls in our operating results from levels forecasted by securities analysts;
	•	announcements concerning us or our competitors; and
	•	the general state of the securities markets.

	Our Articles of Incorporation and Bylaws contain anti-takeover provisions that may discourage, delay or prevent (1) our merger or acquisition and/or (2) the removal of incumbent directors and officers.

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	The cyclical nature of the shipping industry may lead to volatile changes in freight rates which may reduce our revenues and net income.

	The value of our vessels may fluctuate, adversely affecting our earnings, liquidity and causing it us breach our secured credit agreements.

	•	general economic and market conditions affecting the shipping industry;
	•	supply of drybulk and containership vessels;
	•	demand for drybulk containership vessels;
	•	types and sizes of vessels;
	•	other modes of transportation;
	•	cost of newbuildings;
	•	new regulatory requirements from governments or self-regulated organizations; and
	•	prevailing level of charter rates.

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	Although charter rates in the international shipping industry reached historic highs recently, future profitability will be dependent on the level of charter rates and commodity prices.

	•	supply and demand for drybulk and containership commodities, and separately for containerized cargo;
	•	global and regional economic conditions;
	•	the distance drybulk and containership commodities are to be moved by sea; and
	•	changes in seaborne and other transportation patterns.

	•	the number of newbuilding deliveries;
	•	the scrapping rate of older vessels;
	•	changes in environmental and other regulations that may limit the useful life of vessels;
	•	the number of vessels that are laid up; and
	•	changes in global drybulk and containership commodity production and manufacturing distribution patterns of finished goods.

	An economic slowdown in the Asia Pacific region could materially reduce the amount and/or profitability of our business.

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	We may become dependent on spot charters in the volatile shipping markets, which can result in decreased revenues and/or profitability.

	We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income.

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	Capital expenditures and other costs necessary to operate and maintain our vessels may increase due to changes in governmental regulations, safety or other equipment standards.

	Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.

	Rising fuel prices may adversely affect our profits.

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	If our vessels fail to maintain their class certification and/or fail any annual survey, intermediate survey, drydocking or special survey, that vessel would be unable to carry cargo, thereby reducing our revenues and profitability and violating certain loan covenants of our third-party indebtedness.

	Maritime claimants could arrest our vessels, which could interrupt our cash flow.

	Governments could requisition our vessels during a period of war or emergency, resulting in loss of earnings.

	World events outside our control may negatively affect our ability to operate, thereby reducing our revenues and net income or our ability to obtain additional financing, thereby restricting the implementation of our business strategy.

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	We will depend entirely on Eurobulk to manage and charter our fleet.

	Because Eurobulk is a privately held company, there is little or no publicly available information about it and we may get very little advance warning of operational or financial problems experienced by Eurobulk that may adversely affect us.

	We and our principal officers have affiliations with Eurobulk that could create conflicts of interest detrimental to us.

	We are a holding company, and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations or to make dividend payments.

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	We may not be able to pay dividends.

	Companies affiliated with Eurobulk or our officers and directors may acquire vessels that compete with our fleet.

	If we are unable to fund our capital expenditures, we may not be able to continue to operate some of our vessels, which would have a material adverse effect on our business and our ability to pay dividends.

	If we fail to manage our planned growth properly, we may not be able to successfully expand our market share.

	•	locating and acquiring suitable vessels;
	•	identifying and consummating acquisitions or joint ventures;
	•	integrating any acquired business successfully with our existing operations;
	•	enhancing our customer base;

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	•	managing our expansion; and
	•	obtaining required financing.

	A decline in the market value of our vessels could lead to a default under our loan agreements and the loss of our vessels.

	Our existing loan agreements contain restrictive covenants that may limit our liquidity and corporate activities.

	•	incur additional indebtedness;
	•	create liens on our assets;
	•	sell capital stock of our subsidiaries;
	•	make investments;
	•	engage in mergers or acquisitions;
	•	pay dividends;
	•	make capital expenditures;
	•	change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and
	•	sell our vessels.

	Servicing future debt would limit funds available for other purposes.

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	Our ability to obtain additional debt financing may be dependent on the performance of our then existing charters and the creditworthiness of our charterers.

	As we expand our business, we may need to upgrade our operations and financial systems, and add more staff and crew. If we cannot upgrade these systems or recruit suitable employees, our performance may be adversely affected.

	Because we obtain some of our insurance through protection and indemnity associations, we may also be subject to calls in amounts based not only on our own claim records, but also the claim records of other members of the protection and indemnity associations.

	Labor interruptions could disrupt our business.

	In the highly competitive international drybulk and containership shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources.

	We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of operations.

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	Risks involved with operating ocean going vessels could affect our business and reputation, which may reduce our revenues.

	•	crew strikes and/or boycotts;
	•	marine disaster;
	•	piracy;
	•	environmental accidents;
	•	cargo and property losses or damage; and
	•	business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions.

	Our vessels may suffer damage and it may face unexpected drydocking costs, which could affect our cash flow and financial condition.

	Purchasing and operating previously owned, or secondhand, vessels may result in increased operating costs and vessels off-hire, which could adversely affect our earnings.

	We may not have adequate insurance to compensate us adequately for damage to, or loss of, our vessels.

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	Our operations outside the United States of America expose it to risks of mining, terrorism and piracy that may interfere with the operation of our vessels.

	Because the Republic of the Marshall Islands, where we are incorporated, does not have a well-developed body of corporate law, shareholders may have fewer rights and protections than under typical United States law, such as Delaware, and shareholders may have difficulty in protecting their interest with regard to actions taken by our Board of Directors.

	Obligations associated with being a public company will require significant company resources and management attention

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	Our historical financial and operating data may not be representative of our future results because we are a newly formed company with no operating history as a stand-alone entity or as a publicly traded company.

	We depend upon a few significant charterers for a large part of our revenues. The loss of one or more of these charterers could adversely affect our financial performance.

	Exposure to currency exchange rate fluctuations will result in fluctuations in our cash flows and operating results.

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	U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. holders.

	We may have to pay tax on United States source income, which would reduce our earnings.

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	•	our future operating or financial results;
	•	future, pending or recent acquisitions, business strategy, areas of possible expansion, and expected capital spending or operating expenses; and
	•	drybulk and containership market trends, including charter rates and factors affecting vessel supply and demand.

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	(a) The Merger with Cove in which 1,079,167 newly issued shares are to be issued to the shareholders of Cove, when the Merger is consummated (or to Friends if the Merger is not consummated). Of this amount, 818,604 shares are to be issued to certain affiliates of Cove and are being registered for resale under this prospectus. However, for purposes of the calculations hereunder, we have used the full 1,079,167 amount since all of these shares are expected to be issued in connection with the Merger.
	(b) Cash dividend of $2.65 million declared on November 2, 2005 to (i) our shareholders of record on December 16, 2005 and paid on or about December 19, 2005, and (ii) either Cove’s shareholders that will exchange their shares to Euroseas shares, if the Merger with Cove is consummated, or, Friends which will be issued the shares that would have been issued to Cove’s shareholders if the Merger is not consummated. None of the Company’s warrants were exercised.
	(c) New loan to finance acquisition of m/v Artemis of $15,500,000 which was drawn down of December 30, 2005; and repayments for loans outstanding as at September 30, 2005 amounting to $4,170,000.

			As of September 30, 2005
							As Adjusted for
							Subsequent Event
			Actual				and This Offering
			(In U.S. dollars)
Debt:
	Current portion of long term debt			12,854,998				14,430,000
	Total long term debt, net of current portion			24,375,002				34,130,000
Total debt				37,230,000				48,560,000
Shareholders’ equity
	Common stock, $.01 par value; 100,000,000 shares authorized on an actual and as adjusted basis; 36,781,159 shares issued and outstanding on an actual basis; 37,860,326 shares issued and outstanding on an as adjusted basis			367,812				378,603
	Additional paid-in capital			18,383,781				18,382,990
	Retained earnings (deficit)			6,673,708				6,673,708
	Dividend declared November 2, 2005			—				(2,650,223	)
Total shareholders equity (deficit)				25,425,301				22,785,078
Total capitalization				62,655,301				71,345,078

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Initial offering price per share in the Private Placement		$	3.00
Net tangible book value per share as of June 30, 2005		$	0.06
Increase in net tangible book value attributable to the new investors		$	0.46
Proforma net tangible book value per share after giving effect to this offering		$	0.52
Dilution per share to the new investors		$	2.48

		Pro Forma Shares
		Outstanding								Total Consideration
																		Average Price
		Number				Percent				Amount				Percent				per Share
Existing shareholders			29,754,166				78.6%			$	1,651,029				7.3%			$	0.06
Cove shareholders			1,079,167				2.8%			$	10,000				0.0%			$	0.01
New investors			7,026,993				18.6%			$	21,080,979				92.7%			$	3.00
Total			37,860,326				100.0%			$	22,742,008				100.0%			$	0.60

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		Year Ended December 31,												Six Months Ended June 30,
Euroseas Ltd. — Summary Historical Financials(1)		2002				2003				2004				2004				2005
		(All amounts in U.S. dollars)
Statement of Income Data
Voyage revenue			15,291,761				25,951,023				45,718,006				21,321,769				23,833,736
Commissions			(420,959	)			(906,017	)			(2,215,197	)			(1,018,218	)			(1,340,228	)
Voyage expenses			(531,936	)			(436,935	)			(370,345	)			(60,829	)			(131,903	)
Vessel operating expenses			(7,164,271	)			(8,775,730	)			(8,906,252	)			(4,727,324	)			(4,270,787	)
Management fees			(1,469,690	)			(1,722,800	)			(1,972,252	)			(1,007,771	)			(965,384	)
Amortization and depreciation(2)			(4,053,049	)			(4,757,933	)			(3,461,678	)			(1,640,565	)			(1,824,322	)
Net gain on sale of vessel			—				—				2,315,477				2,315,477				—
Interest and finance cost			(799,970	)			(793,257	)			(708,284	)			(297,916	)			(545,719	)
Derivative gain/(loss)			—				—				27,029				11,000				(82,029	)
Foreign exchange gain/(loss)			2,849				(690	)			(1,808	)			(3,734	)			312
Interest income			6,238				36,384				187,069				18,535				89,698
Other income/(expenses), net			(790,883	)			(757,563	)			(495,994	)			(272,115	)			(537,738	)
Equity in earnings/(losses)			30,655				(167,433	)			—				—				—
Net income for the period			891,628				8,426,612				30,611,765				14,910,424				14,763,374
Balance Sheet Data (at period end)
Current Assets			3,192,345				9,409,339				16,461,159				12,404,490				11,276,109
Vessels, net book value			45,254,226				41,096,067				34,171,164				35,434,642				32,978,300
Deferred charges, net			596,262				929,757				2,205,178				1,996,885				2,357,775
Investment in associate			1,216,289				22,856				—				—				—
Total assets			50,259,121				51,458,019				52,837,501				49,836,017				46,612,184
Current liabilities, including current portion of long-term debt			10,878,488				8,481,773				13,764,846				10,332,710				18,341,155
Long-term debt, including current portion			23,845,000				20,595,000				13,990,000				15,126,220				41,400,000
Common stock			297,542				297,542				297,542				297,542				297,542
Total shareholders’ equity			21,285,634				27,486,246				31,112,655				30,634,170				1,651,029

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		Year Ended December 31,												Six Months Ended June 30,
Euroseas Ltd. — Summary Historical Financials(1)		2002				2003				2004				2004				2005
		(All amounts in U.S. dollars)
Other Financial Data
Net cash provided by operating activities			5,631,343				10,956,132				34,208,693				13,382,837				8,157,781
Net cash paid to (received from) related party			(177,169	)			482,778				(3,541,236	)			(108,277	)			8,621,660
Net cash from investing activities			(17,036,079	)			214,832				6,756,242				6,722,524				(1,230,155	)
Net cash used in financing activities			12,247,355				(4,778,000	)			(33,567,500	)			(17,231,280	)			(16,972,500	)
Earnings per share, basic and diluted			0.03				0.28				1.03				0.50				0.50
Cash Dividends/Return of capital, declared per common share			0.02				0.04				0.91				0.40				1.49
Weighted average number of shares outstanding during the period			29,754,166				29,754,166				29,754,166				29,754,166				29,754,166
Cash paid for common stock dividend declared/return of capital			687,500				1,200,000				26,962,500				11,762,500				44,225,000	(3)

(1)	The Company has not included financial data for the years ended 2000 and 2001 since the Company was only recently formed in May 2005 and incurred significant expense in the preparation of its consolidated financial statements for 2002, 2003 and 2004. The Company believes that it would constitute “unreasonable effort or expense” for it to include the first two years of the Selected Consolidated Financial Data reflecting the discussion by the Staff of the SEC in “International Reporting and Disclosure Issues in the Division of Corporation Finance,” dated October 1, 2003. The Company’s predecessor (which is the separate ship-owning entities that became wholly-owned by the Company subsequent to its formation) prepared financial statements for the years ended December 31, 2000 and 2001 on a basis different from the financial statements included in this prospectus. The Company believes that the effort and cost involved in converting such financial statements into a basis similar to those financial statements included in this prospectus would be unreasonably burdensome.
(2)	In 2004, the estimated scrap value of the vessels was increased from $170 to $300 per light ton to better reflect market price developments in the scrap metal market. The effect of this change in estimate was to reduce 2004 depreciation expense by $1,400,010 and increase 2004 net income by the same amount. In addition, in 2004, the estimated useful life of the vessel m/v Ariel was extended from 28 years to 30 years since the vessel performed dry-docking in the current year and it is not expected to be sold until year 2007. M/ V Widar was sold in April 2004. Depreciation expense for m/v Widar for the year ended December 31, 2004 amounted to $136,384 compared to $409,149 in 2003.
(3)	This amount reflects a dividend in the amount of $27,525,000 and a return of capital in the amount of $16,700,000. The total payment to shareholders made in 2005 is in excess of previously retained earnings because the Company decided to distribute to its original shareholders in advance of going public most of the profits relating to the Company’s operations up to that time and to recapitalize the Company. This one-time dividend cannot be considered indicative of future dividend payments and the Company refers you to the other sections in this prospectus for a clearer understanding of the Company’s dividend policy.

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	Lack of Historical Operating Data for Vessels Before their Acquisition

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	•	obtain the charterer’s consent to us as the new owner;
	•	obtain the charterer’s consent to a new technical manager;
	•	obtain the charterer’s consent to a new flag for the vessel;
	•	arrange for a new crew for the vessel;
	•	replace all hired equipment on board, such as gas cylinders and communication equipment;
	•	negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;
	•	register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;
	•	implement a new planned maintenance program for the vessel; and
	•	ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.

	Factors Affecting Our Results of Operations

	•	Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was in our possession including off-hire days associated with major repairs, drydockings or special or intermediate surveys. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during that period.
	•	Available days. We define available days as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with scheduled repairs, drydockings or special or intermediate surveys. The shipping industry uses available days to measure the number of days in a period during which vessels were available to generate revenues.
	•	Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with scheduled and unscheduled repairs, drydockings or special or intermediate surveys or days waiting to find employment. The shipping industry uses voyage days to measure the number of days in a period during which vessels actually generate revenues.
	•	Fleet utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our available days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for its vessels and

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		minimizing the amount of days that its vessels are off-hire for reasons such as unscheduled repairs or days waiting to find employment.
	•	Spot Charter Rates. Spot charter rates are volatile and fluctuate on a seasonal and year to year basis. The fluctuations are caused by imbalances in the availability of cargoes for shipment and the number of vessels available at any given time to transport these cargoes.
	•	Time Charter Equivalent. A standard maritime industry performance measure used to evaluate performance is the daily time charter equivalent, or daily TCE. Daily TCE revenues are voyage revenues minus voyage expenses divided by the number of voyage days during the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by a charterer under a time charter. We believe that the daily TCE neutralizes the variability created by unique costs associated with particular voyages or the employment of drybulk carriers on time charter or on the spot market (containership are chartered on a time charter basis) and presents a more accurate representation of the revenues generated by our vessels.

	Basis of Presentation and General Information

	•	Voyage revenues. Our voyage revenues are driven primarily by the number of vessels in our fleet, the number of voyage days during which our vessels generate revenues and the amount of daily charter hire that our vessels earn under charters, which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in drydock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, levels of supply and demand in the transportation market and other factors affecting spot market charter rates in both the drybulk carrier and containership markets.
	•	Commissions. We pay commissions on all chartering arrangements of 1-1.25% to Eurochart, one of our affiliates, plus additional commission of usually up to 5% to other brokers involved in the transaction. These additional commissions, as well as changes to charter rates will cause our commission expenses to fluctuate from period to period. Eurochart also receives a fee equal to 1% calculated as stated in the relevant memorandum of agreement for any vessel bought or sold by them on our behalf.
	•	Voyage expenses. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage which would otherwise be paid by the charterer under a time charter contract, as well as commissions. Under time charters, the charterer pays voyage expenses whereas under spot market voyage charters, we pay such expenses. The amounts of such voyage expenses are driven by the mix of charters undertaken during the period.
	•	Vessel Operating Expenses. Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Our vessel operating expenses, which generally represent fixed costs, have historically changed in line with the size of our fleet. Other factors beyond our control, some of which may affect the shipping industry in general (including, for instance, developments relating to market prices for insurance or inflationary increases) may also cause these expenses to increase.
	•	Management fees. These are the fees that we pay to Eurobulk, our ship manager and an affiliate, under our management agreement with Eurobulk for the technical and commercial management that Eurobulk performs on our behalf. The fee is 590 Euros per vessel per day and is payable monthly in advance.
	•	Depreciation. We depreciate our vessels on a straight-line basis with reference to the cost of the vessel, age and scrap value as estimated at the date of acquisition. Depreciation is calculated over the remaining useful life of the vessel, which is estimated to range from 25 to 30 years from the date of original construction. Remaining useful lives of property are periodically reviewed and revised to

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		recognize changes in conditions, new regulations or other reasons. Revisions of estimated lives are recognized over current and future periods. During 2004, management changed its estimate of the scrap value of its vessels.
	•	Amortization of deferred drydocking costs. Our vessels are required to be drydocked approximately every 30 to 60 months for major repairs and maintenance that cannot be performed while the vessels are trading. We capitalize the costs associated with drydockings as they occur and amortize these costs on a straight-line basis over the period between drydockings. Costs capitalized as part of the drydocking include actual costs incurred at the drydock yard; cost of hiring riding crews to effect repairs on a vessel and parts used in making such repairs that are reasonably made in anticipation of reducing the duration or cost of the drydocking; cost of travel, lodging and subsistence of our personnel sent to the drydocking site to supervise; and the cost of hiring a third party to oversee a drydocking. We believe that these criteria are consistent with industry practice and that our policy of capitalization reflects the economics and market values of the vessels. Commencing January 1, 2006, we have revised our policy to exclude the cost of hiring riding crews and the cost of parts used by riding crews from amounts capitalized as drydocking cost. We have not restated any historical financial statements because we determined that the impact of such a revision is not material to our operating income and net income for any periods presented.
	•	Interest expense. We traditionally finance vessel acquisitions partly with debt on which we incur interest expense. The interest rate we pay is generally linked to the 3-month LIBOR rate, although from time to time we utilize fixed rate loans or could use interest rate swaps to eliminate our interest rate exposure. Interest due is expensed in the period is accrued. Loan cost are amortized over the period of the loan; the un-amortized portion is written-off if the loan is prepaid early.
	•	General and administrative expenses. We will incur expenses consisting mainly of executive compensation, professional fees, directors liability insurance and reimbursement of our directors’ and officers’ travel-related expenses. General and administrative expenses will increase following the completion of our Private Placement and anticipated Merger in due to the duties typically associated with public companies. We acquire executive services, our CEO, CFO and Secretary, through Eurobulk. In 2005, executive compensation for such services to us as a public company is estimated to be $500,000 on an annualized basis starting in July 2005, incremental to the management fee.

Vessel Type		Bulkers				Containerships				Total
Average number of vessels			5				2				7
Number of vessels at end of period			5				2				7
Dwt (in thousands)/ teu at end of period			190.9				2,538
Average age at end of period (years)			22.6				14.0				20.1

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Vessel Type		2005 H1				2004 H1				2004				2003				2002
Utilization in period			99.8	%			99.4	%			99.5	%			99.3	%			99.7	%
TCE per ship per day		$	19,099			$	15,956			$	17,839			$	8,965			$	6,049
Operating expenses per ship per day including management fees $		$	4,133			$	4,129			$	4,064			$	3,595			$	3,467
Voyage revenues ($ thousand)		$	23,834			$	21,322			$	45,718			$	25,951			$	15,292
Net income ($ thousand)		$	14,763			$	14,910			$	30,612			$	8,427			$	892
Voyage days			1,239.4				1,333				2,542				2,846				2,440
Available Days			1,242				1,338				2,554				2,867				2,448
Calendar days			1,267				1,389				2,677				2,920				2,490

	Six month period ended June 30, 2005 compared to six month period ending June 30, 2004.

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	Net cash from operating activities.

	Net cash from investing activities.

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	Net cash used in financing activities.

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	For the year ended December 31, 2004 compared to the year ended December 31, 2003

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	Net cash from operating activities.

	Net cash from investing activities.

	Net cash used in financing activities.

	For the year ended December 31, 2003 compared to the year ended December 31, 2002

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	Net cash from operating activities.

	Net cash from investing activities.

	Net cash used in financing activities.

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						Less Than				One to				Three to				More Than
In U.S. dollars		Total				One Year				Three Years				Five Years				Five Years
Bank debt		$	41,400,000			$	14,780,000			$	19,160,000			$	4,660,000			$	2,800,000
Interest Payment (1)		$	4,295,771			$	1,790,748			$	2,217,505			$	194,250			$	93,188
Management fees (2)		$	11,176,241			$	2,022,192			$	4,419,631			$	4,734,418				—

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	Depreciation

	Revenue and expense recognition

	Deferred drydock costs

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	Impairment of long-lived assets

	Recent accounting pronouncements

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Year Ended June 30,		Amount
2006			340,100
2007			221,300
2008			125,500
2009			60,300
2010 and thereafter			51,000

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Owner				Country of Incorporation		Vessel Name		Flag
1)		Diana Trading Ltd.		Republic of the Marshall Islands		IRINI		Marshall Islands
2)		Alterwall Business Inc.		Republic of Panama		YM QINGDAO I		Panamanian
3)		Allendale Investments S.A.		Republic of Panama		KUO HSIUNG		Panamanian
4)		Alcinoe Shipping Limited		Republic of Cyprus		PANTELIS P.		Cypriot
5)		Searoute Maritime Limited		Republic of Cyprus		ARIEL		Cypriot
6)		Oceanpride Shipping Limited		Republic of Cyprus		JOHN P.		Cypriot
7)		Oceanopera Shipping Limited		Republic of Cyprus		NIKOLAOS P.		Cypriot
8)		Salina Shipholding Corp.		Republic of the Marshall Islands		ARTEMIS		Marshall Islands

Country

TEU

Vessel

Dwt

Built

Year Built

Type

Capacity

IRINI

69,734

Japan

1988

Dry Bulk

N/A

YM QINGDAO I

18,253

Japan

1990

Containership

1,269

KUO HSIUNG

18,154

Japan

1993

Containership

1,269

PANTELIS P.

26,354

Scotland

1981

Dry Bulk

N/A

ARIEL

33,712

Japan

1977

Dry Bulk

N/A

JOHN P.

26,354

Scotland

1981

Dry Bulk

N/A

NIKOLAOS P.

34,750

Spain

1984

Dry Bulk

N/A

ARTEMIS

29,693

Croatia

1987

Containership

2,098

	•	Experienced Management Team. Our management team has significant experience in operating drybulk carriers and expertise in all aspects of commercial, technical, operational and financial areas of our business. Our main shareholding family has over 100 years experience in shipping and enjoys a well established reputation. The Pittas family roots in shipping go back four generations to the 19th century.

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		Nikolaos Pittas started the family business more than 125 years ago and has been followed by his sons and his grandsons, one of whom is Mr. John Pittas, a controlling shareholder of Friends Investment Company Inc., the largest shareholder of Euroseas. Aristides J. Pittas, his son, is the CEO, President, Chairman of the Board and a Director of Euroseas. Aristides P. Pittas, his nephew, is the Vice-Chairman of the Board and a Director of Euroseas. This experience enables management, among other things, to identify suitable shipping opportunities and time its investments in an efficient manner.
	•	Strong Customer Relationships. Through Eurobulk, our ship management company, and Eurochart, our chartering broker, we have many long-established customer relationships with major charterers and shipping pools (Klaveness), and we believe we are well regarded within the international shipping community.
	•	Profitable Operations to Date. The Pittas family, the principal owner of Eurobulk and of our largest shareholder, has operated vessels over the past 125 years. The vessels have been operated through various partnerships and different entities over these years. In 1995, the Pittas family separated its interests from Oceanbulk Maritime S.A. and formed Eurobulk in order to manage and operate its own vessels. Since the inception of Eurobulk, all vessel acquisitions have been profitable and the group’s results, on a consolidated basis, have been profitable for each of the last five years. This was achieved by carefully selecting secondhand vessels, competitively commissioning and actively supervising cost-efficient shipyards to perform repairs, reconditioning and systems upgrading work, together with a proactive preventive maintenance program both ashore and at sea, and employing professional, well-trained masters, officers and crews. We believe that this combination allows us to minimize off-hire periods, effectively manage insurance costs, and control overall operating expenses.

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	International Operations

	•	Vessel m/v YM Qingdao I: Japan (Tokyo, Kobe, Osaka, Yokohama), Taiwan (Kaohsiung, Keelung, Taichung), Hong Kong, China (Tianjin, Dalian), Vietnam (Ho Chi Mingh)
	•	Vessel m/v Kuo Hsiung: Japan (Tokyo, Kobe, Osaka, Yokohama), Taiwan (Kaohsiung, Keelung, Taichung), Hong Kong, Thailand (Bangkok, Laem Chabang)
	•	Vessel m/v Artemis: Italy (Cagliari, Leghorn, Genoa), France (Fos), Spain (Valencia), Portugal (Lisbon), United States (New York, Norfolk, Savannah, Miami)

	•	Far East: all major Chinese ports, Taiwan, South Korea, Singapore, Indonesia (various ports), Malaysia (Port Kelang), Bangladesh, all major Indian ports, Philippines (Manila), Sri Lanka
	•	Australia: Newcastle, Port Lincoln
	•	Middle East: UAE (Dubai, Fujairah), Saudi Arabia, Jordan (Aqaba), Turkey (Eregli, Istanbul, Izmir)
	•	Europe: all seaport nations, mostly Italy, Spain, France, Greece, UK, Netherlands, Belgium, Germany, Poland, Scandinavian countries, Russia, Ukraine, Romania, etc.
	•	Africa: South Africa, Sudan, Egypt, Morocco, Nigeria, Guinea, Ghana. However, with respect to Sudan, we have not had any material contact with such country and do not anticipate having any such contact in the future. Our prior contact was an indirect contact that was limited to a one-time discharge of a cargo of bulk sugar. Generally, Sudan is an excluded destination from our charter party contracts, but in this one instance, the charterer requested that we give them an exemption. We do not maintain any connections with Sudan whatsoever and do not anticipate any future contacts with Sudan so long as Sudan is subject to U.S. sanctions.

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	•	North and South America: USA (all major ports), Canada (all major ports), Mexico (all major ports), Carribean, Venezuela, Colombia, Brazil (all major ports), Argentina, Chile, Peru

	•	Diana Shipping (NYSE: DSX) — larger vessels (13).
	•	Dryships (Nasdaq: DRYS) — larger vessels (27).
	•	Excel Maritime (NYSE: EXM) — mix of vessels (17) primarily larger size.
	•	Eagle Bulk Shipping (Nasdaq: EGLE) — handymaxes (14).

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	Environmental Regulation — International Maritime Organization (“IMO”)

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	Environmental Regulations — The United States of America Oil Pollution Act of 1990

	Vessel Security Regulations

	•	on-board installation of automatic information systems (“AIS”), to enhance vessel-to-vessel and vessel-to-shore communications;
	•	on-board installation of ship security alert systems;
	•	the development of vessel security plans; and
	•	compliance with flag state security certification requirements.

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	Inspection by Classification Societies

	General

	Hull and Machinery Insurance

	Protection and Indemnity Insurance

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Name		Age				Position
Aristides J. Pittas			46			Chairman, President and CEO; Director
Dr. Anastasios Aslidis			45			CFO and Treasurer; Director
Aristides P. Pittas			53			Vice Chairman; Director
Stephania Karmiri			37			Secretary
George Skarvelis			44			Director
George Taniskidis			44			Director
Gerald Turner			57			Director
Panagiotis Kyriakopoulos			45			Director

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	Family Relationships

	Audit Committee

	Code of Ethics

	Director Compensation

	Executive Compensation and Employment Agreements

	Options

	Option Plans

	Corporate Governance

	•	Following the closing of this offering, we will have a board of directors with a majority of independent directors which holds at least one annual meeting at which only independent directors are present, consistent with Nasdaq corporate governance requirements. We are not required under Marshall Islands law to maintain a board of directors with a majority of independent directors, and we cannot guarantee that we will always in the future maintain a board of directors with a majority of independent directors.

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	•	In lieu of a compensation committee comprised of independent directors, our board of directors will be responsible for establishing the executive officers’ compensation and benefits. Under Marshall Islands law, compensation of the executive officers is not required to be determined by an independent committee.
	•	In lieu of a nomination committee comprised of independent directors, our board of directors will be responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment to board committees. Shareholders may also identify and recommend potential candidates to become candidates to become board members in writing. No formal written charter has been prepared or adopted because this process is outlined in our bylaws.
	•	In lieu of obtaining an independent review of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a related party transaction will be permitted if: (i) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board and the Board in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the Board as defined in Section 55 of the Marshall Islands Business Corporations Act, by unanimous vote of the disinterested directors; or (ii) the material facts as to his relationship or interest are disclosed and the shareholders are entitled to vote thereon, and the contract or transaction is specifically approved in good faith by a simple majority vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or of a committee which authorizes the contract or transaction.
	•	As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf.
	•	In lieu of holding regular meetings at which only independent directors are present, our entire board of directors, a majority of whom are independent, will hold regular meetings as is consistent with the laws of the Republic of the Marshall Islands.

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				Pre-Merger and
				Private Placement
				Euroseas Amount				Pre-Merger and				Post-Merger and
				of Shares				Private Placement				Private Placement
		Name and Address of		Beneficially				Euroseas Percent				Euroseas Percent
Title of Class		Beneficial Owner(1)		Owned				of Class				of Class
Common Stock		Friends Investment Company Inc.(2)			29,754,166				100	%			78.59	%
Common Stock		Aristides J. Pittas(3)			714,100				2.4	%			1.89	%
Common Stock		George Skarvelis(4)			1,576,971				5.3	%			4.16	%
Common Stock		George Taniskidis(5)			29,754				*				*
Common Stock		Gerald Turner(6)			422,509				1.42	%			1.11	%
Common Stock		Panagiotis Kyriakopoulos (7)			178,525				*				*
Common Stock		Aristides P. Pittas(8)			2,439,842				8.2	%			6.44	%
Common Stock		Anastasios Aslidis			0				0	%			0	%
Common Stock		Stephania Karmiri(9)			5,951				*				*
Common Stock		All directors and officers and 5% owners as a group			29,754,166				100	%			78.59	%

	*	Indicates less than 1.0%.

(1)	Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Exchange Act and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by him/her.
(2)	John Pittas has investment power and voting control over these securities.
(3)	Includes 714,100 shares of common stock held of record by Friends, by virtue of Mr. Pittas’ ownership interest in Friends. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest.
(4)	Includes 1,576,971 shares of common stock held of record by Friends, by virtue of Mr. Skarvelis’ ownership interest in Friends. Mr. Skarvelis disclaims beneficial ownership except to the extent of his pecuniary interest.
(5)	Includes 29,754 shares of common stock held of record by Friends, by virtue of Mr. Taniskidis’ ownership in Friends. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest.
(6)	Includes 422,509 shares of common stock held of record by Friends, by virtue of Mr. Turner’s ownership interest in Friends. Mr. Turner disclaims beneficial ownership except to the extent of his pecuniary interest.
(7)	Includes 178,525 shares of common stock held of record by Friends, by virtue of Mr. Kyriakopoulos’ ownership in Friends. Mr. Kyriakopoulos disclaims beneficial ownership except to the extent of his pecuniary interest.
(8)	Includes 2,439,842 shares of common stock held of record by Friends, by virtue of Mr. Pittas’ ownership interest in Friends. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest.
(9)	Includes 5,951 shares of common stock held of records by Friends, by virtue of Mrs. Karmiri’s ownership in Friends. Mrs. Karmiri disclaims beneficial ownership except to the extent of her pecuniary interest.

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	Certain Provisions of Our Articles of Incorporation and Bylaws

	•	allow the Board of Directors to issue, without further action by the shareholders, up to 20,000,000 shares of undesignated preferred stock;
	•	require that special meetings of our shareholders be called only by the Board of Directors or the Chairman of the Board; and
	•	establish an advance notice procedure for shareholder proposals to be brought before an annual meeting of shareholders.

	•	prior to such time, the Board of Directors approved either the Business Combination or the transaction which resulted in the shareholder becoming an Interested Shareholder; or

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	•	upon consummation of the transaction which resulted in the shareholder becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the voting stock of Euroseas outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
	•	at or subsequent to such time, the Business Combination is approved by the Board of Directors and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of at least 51% of the outstanding voting stock that is not owned by the interested shareholder; or
	•	the shareholder became an Interested Shareholder prior to the consummation of the initial public offering of Euroseas’ common stock under the Securities Act.

	•	A shareholder becomes an Interested Shareholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares so that the shareholder ceases to be an Interested Shareholder; and (ii) would not, at any time within the three-year period immediately prior to a Business Combination between Euroseas and such shareholder, have been an Interested Shareholder but for the inadvertent acquisition of ownership; or
	•	The Business Combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which (i) constitutes one of the transactions described in the following sentence; (ii) is with or by a person who either was not an Interested Shareholder during the previous three years or who became an Interested Shareholder with the approval of the Board; and (iii) is approved or not opposed by a majority of the members of the Board then in office (but not less than one) who were Directors prior to any person becoming an Interested Shareholder during the previous three years or were recommended for election or elected to succeed such Directors by a majority of such Directors. The proposed transactions referred to in the preceding sentence are limited to:

	(a) a merger or consolidation of Euroseas (except for a merger in respect of which, pursuant to the BCA, no vote of the shareholders of Euroseas is required);
	(b) a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of Euroseas or of any direct or indirect majority-owned subsidiary of Euroseas (other than to any direct or indirect wholly-owned subsidiary or to Euroseas) having an aggregate market value equal to 50% or more of either that aggregate market value of all of the assets of Euroseas determined on a consolidated basis or the aggregate market value of all the outstanding shares; or
	(c) a proposed tender or exchange offer for 50% or more of the outstanding voting shares of Euroseas.

	•	Any merger or consolidation of Euroseas or any direct or indirect majority-owned subsidiary of Euroseas with (i) the Interested Shareholder or any of its affiliates, or (ii) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the Interested Shareholder;
	•	Any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately as a shareholder of Euroseas, to or with the Interested Shareholder, whether as part of a dissolution or otherwise, of assets of Euroseas or of any direct or indirect majority-owned subsidiary of Euroseas which assets have an aggregate market value equal to

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		10% or more of either the aggregate market value of all the assets of Euroseas determined on a consolidated basis or the aggregate market value of all the outstanding shares;
	•	Any transaction which results in the issuance or transfer by Euroseas or by any direct or indirect majority-owned subsidiary of Euroseas of any shares, or any share of such subsidiary, to the Interested Shareholder, except: (i) pursuant to the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares, or shares of any such subsidiary, which securities were outstanding prior to the time that the Interested Shareholder became such; (ii) pursuant to a merger with a direct or indirect wholly-owned subsidiary of Euroseas solely for purposes of forming a holding company; (iii) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into shares, or shares of any such subsidiary, which security is distributed, pro rata to all holders of a class or series of shares subsequent to the time the Interested Shareholder became such; (iv) pursuant to an exchange offer by Euroseas to purchase shares made on the same terms to all holders of said shares; or (v) any issuance or transfer of shares by Euroseas; provided however, that in no case under items (iii)-(v) of this subparagraph shall there be an increase in the Interested Shareholder’s proportionate share of the any class or series of shares;
	•	Any transaction involving Euroseas or any direct or indirect majority-owned subsidiary of Euroseas which has the effect, directly or indirectly, of increasing the proportionate share of any class or series of shares, or securities convertible into any class or series of shares, or shares of any such subsidiary, or securities convertible into such shares, which is owned by the Interested Shareholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares not caused, directly or indirectly, by the Interested Shareholder; or
	•	Any receipt by the Interested Shareholder of the benefit, directly or indirectly (except proportionately as a shareholder of Euroseas), of any loans, advances, guarantees, pledges or other financial benefits (other than those expressly permitted above) provided by or through Euroseas or any direct or indirect majority-owned subsidiary.

	•	is the owner of 15% or more of the outstanding voting shares of Euroseas; or
	•	is an affiliate or associate of Euroseas and was the owner of 15% or more of the outstanding voting shares of Euroseas at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an Interested Shareholder; and the affiliates and associates of such person; provided, however, that the term “Interested Shareholder” shall not include any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by Euroseas; provided that such person shall be an Interested Shareholder if thereafter such person acquires additional shares of voting shares of Euroseas, except as a result of further Company action not caused, directly or indirectly, by such person.

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Marshall Islands			Delaware
Shareholder Meetings
• Held at a time and place as designated in the bylaws			• May be held in the manner provided in the bylaws. The articles of incorporation may designate any place for such meetings and, in the absence of such designation, as directed by the bylaws.
• May be held within or outside the Marshall Islands			• May be held within or outside Delaware
• Notice:			• Notice:
	• Whenever shareholders are required to take action at a meeting, written notice shall state the place, date and hour of the meeting and indicate that it is being issued by or at the direction of the person calling the meeting		• Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of electronic communication, if any by which stockholders and proxies may be deemed to be present and vote at such meeting
	• A copy of the notice of any meeting shall be given personally or sent by mail not less than 15 nor more than 60 days before the meeting		• Written notice shall be given not less than 10 nor more than 60 days before the date of the meeting
Shareholders’ Voting Rights
• Any action required to be taken by meeting of shareholders may be taken without meeting if consent is in writing and is signed by all the shareholders entitled to vote			• Stockholders may act by majority written consent with respect to any action required or permitted to be taken at a meeting of stockholders
• Any person authorized to vote may authorize another person to act for him by proxy			• Any person authorized to vote may authorize another person or persons to act for him by proxy
• Unless otherwise provided in the articles of incorporation, a majority of shares entitled to vote constitutes a quorum. In no event shall a quorum consist of fewer than one third of the shares entitled to vote at a meeting
• The Articles of Incorporation may provide for cumulative voting			• The voting power present in person or by the proxy at the meeting shall constitute a quorum
			• The articles of incorporation may provide for cumulative voting
Directors
• Board must consist of at least one member			• Board must consist of at least one member
• Number of members can be changed by an amendment to the bylaws, by the shareholders, or by action of the board			• A corporation may provide in its articles of incorporation or in its bylaws for a fixed or variable number of directors and for the manner in which the number may be increased or decreased
• If the board is authorized to change the number of directors, it can only do so by an absolute majority (majority of the entire board)

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Marshall Islands			Delaware
Dissenters’ Rights of Appraisal
• Shareholder’s have a right to dissent from a merger or sale of all or substantially all assets not made in the usual course of business, and receive payment of the fair value of their shares			• Appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation
• A holder of any adversely affected shares who does not vote on or consent in writing to an amendment to the articles of incorporation has the right to dissent and to receive payment for such shares if the amendment:
	• Alters or abolishes any preferential right of any outstanding shares having preference; or
	• Creates, alters, or abolishes any provision or right in respect to the redemption of any outstanding shares; or
	• Alters or abolishes any preemptive right of such holder to acquire shares or other securities; or
	• Excludes or limits the right of such holder to vote on any matter, except as such right may be limited by the voting rights given to new shares then being authorized of any existing or new class
Shareholder’s Derivative Actions
• An action may be brought in the right of a corporation to procure a judgement in its favor, by a holder of shares or of voting trust certificates or of a beneficial interest in such shares or certificates. It shall be made to appear that the plaintiff is such a holder at the time of bringing the action and that he was such a holder at the time of the transaction of which he complains, or that his shares or his interest therein devolved upon him by operation of law			• In any derivative suit instituted by a stockholder of a corporation, it shall be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of the transaction of which he complains or that such stockholder’s stock thereafter devolved upon such stockholder by operation of law
• Complaint shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board or the reasons for not making such effort
• Such action shall not be discontinued, compromised or settled, without the approval of the High Court of the Republic
• Attorney’s fees may be awarded if the action is successful
• Corporation may require a plaintiff bringing a derivative suit to give security for reasonable expenses if the plaintiff owns less than 5% of any class of stock and the shares have a value of less than $50,000

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	Taxation of Operating Income: In General

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	Exemption of Operating Income from United States Federal Income Taxation

	•	we are organized in a foreign country (our “country of organization”) that grants an “equivalent exemption” to corporations organized in the United States; and

	•	more than 50% of the value of our stock is owned, directly or indirectly, by “qualified stockholders,” individuals who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemption” to corporations organized in the United States, which we refer to as the “50% Ownership Test,” or
	•	our stock is “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an “equivalent exemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test.”

	Taxation In Absence of Exemption

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	•	We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
	•	substantially all of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

	United States Taxation of Gain on Sale of Vessels

	Distributions

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	Sale, Exchange or other Disposition of Common Stock

	Passive Foreign Investment Company Status and Significant Tax Consequences

	•	at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
	•	at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.

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	Taxation of U.S. Holders Making a Timely QEF Election

	Taxation of U.S. Holders Making a “Mark-to-Market” Election

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	Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

	•	the excess distribution or gain would be allocated ratably over the Non-Electing Holders’ aggregate holding period for the common stock;
	•	the amount allocated to the current taxable year and any taxable year before we became a passive foreign investment company would be taxed as ordinary income; and
	•	the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

	Dividends on Common Stock

	Sale, Exchange or Other Disposition of Common Stock

	•	the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of an income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
	•	the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.

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	•	fail to provide an accurate taxpayer identification number;
	•	are notified by the Internal Revenue Service that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or
	•	in certain circumstances, fail to comply with applicable certification requirements.

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		Shares of Common												Shares of Common
		Stock Beneficially												Stock Beneficially
		Owned Prior to the												Owned After the
		Offering												Offering
		Number of								Number of				Number of
		Shares				Percent				Shares				Shares				Percent
		Beneficially				of				Being				Beneficially				of
Selling Stockholder		Owned				Class(1)				Offered				Owned(2)				Class(1)
Bonanza Master Fund Ltd.(3)			2,500,000				6.6	%			2,500,000				0				*
JMG Capital Partners, LP(4)			625,000				1.7	%			625,000				0				*
JMG Triton Offshore Fund, Ltd.(5)			625,000				1.7	%			625,000				0				*
Eurobulk Marine Holdings, Inc.(6)			1,250,000				3.3	%			1,250,000				0				*
Third Point Resources Ltd.(7)			650,000				1.7	%			650,000				0				*
Third Point Resources L.P.(8)			391,666				1.0	%			391,666				0				*
BTG Investments, LLC(9)			625,000				1.7	%			625,000				0				*
Basso Fund Ltd.(10)			260,416				*				260,416				0				*
Basso Private Opportunity Holding Fund Ltd.(11)			260,416				*				260,416				0				*
Kircher Family Trust dtd 03-24-04(12)			416,666				1.1	%			416,666				0				*
Omicron Master Trust(13)			416,666				1.1	%			416,666				0				*
Whitebox Intermarket Partners L.P.(14)			312,500				*				312,500				0				*
Vacky Holding S.A.(15)			15,166				*				15,166				0				*
James J. Apostolakis(16)			30,332				*				30,332				0				*
Marion Corp. Defined Benefit Pension Plan(17)			30,332				*				30,332				0				*
SRB Greenway Capital, L.P.(18)			12,457				*				12,457				0				*
SRB Greenway Capital (QP), L.P.(19)			84,707				*				84,707				0				*
SRB Greenway Offshore Operating Fund, L.P.(20)			7,000				*				7,000				0				*
Nite Capital, L.P.(21)			83,332				*				83,332				0				*
Vision Opportunity Master Fund, Ltd.(22)			83,332				*				83,332				0				*
Jonathan Spanier(23)			13,750				*				13,750				0				*
Peter G. Geddes(24)			13,750				*				13,750				0				*
Jesse Grossman Accountancy Corp. Retirement Trust (25)			13,750				*				13,750				0				*
Michael Stone(26)			41,666				*				41,666				0				*
David E. Graber(27)			20,832				*				20,832				0				*
Seward Ave Partners, LLC(28)			144,712				*				144,712				0				*
Jonathan Spanier(29)			142,653				*				142,653				0				*
Olive Grove, LLC(30)			165,699				*				165,699				0				*
Blue Star Investors Ltd.(31)			272,868				*				272,868				0				*
Jodi Hunter(32)			92,672				*				92,672				0				*

	*	Less than one percent.

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	(1)	Based on 37,860,326 shares of Euroseas common stock that will be issued and outstanding immediately following the merger of Cove Apparel, Inc. with Euroseas Acquisition Company, Inc., a wholly-owned subsidiary of Euroseas, assuming each Cove stockholder participates in the merger. For purposes of calculating the percentage ownership, any shares that each selling shareholder has the right to acquire within 60 days under warrants or options have been included in the total number of shares outstanding for that person, in accordance with Rule 13d-3 under the Exchange Act.
	(2)	Assumes that the selling shareholders sell all of their shares of common stock beneficially owned by each selling shareholder and offered hereby immediately following the merger described in this prospectus.
	(3)	Reflects 2,000,000 shares of common stock and 500,000 shares of common stock issuable upon the exercise of warrants. Brian Ladin is the Managing Director of Bonanza Master Fund LTD. Bernay Box is the President of Bonanza Fund Management LLC, and as such has investment power and voting control over these securities. Mr. Box disclaims beneficial ownership of these securities. The address for the selling shareholder is 300 Crescent Court, Suite 1740, Dallas, Texas 75201.
	(4)	Reflects 500,000 shares of common stock and 125,000 shares of common stock issuable upon the exercise of warrants. JMG Capital Partners, L.P. (“JMG Partners”) is a California limited partnership. Its general partner is JMG Capital Management, LLC (the “Manager”), a Delaware limited liability company and an investment adviser that has voting and dispositive power over JMG Partners’ investments, including the Euroseas shares. The equity interests of the Manager are owned by JMG Capital Management, Inc., (“JMG Capital”) a California corporation, and Asset Alliance Holding Corp., a Delaware corporation. Jonathan M. Glaser is the Executive Office and Director of JMG Capital and has sole investment discretion over JMG Partners’ portfolio holdings. The address for the selling shareholder is 11601 Wilshire Blvd., Suite 2180, Los Angeles, California 90025.
	(5)	Reflects 500,000 shares of common stock and 125,000 shares of common stock issuable upon the exercise of warrants. JMG Triton Offshore Fund, Ltd. (the “Fund”) is an international business company organized under the laws of the British Virgin Islands. The Fund’s investment manager is Pacific Assets Management LLC, a Delaware limited liability company (the “Manager”) that has voting and dispositive power over the Fund’s investments, including the Euroseas shares. The equity interests of the Manager are owned by Pacific Capital Management, Inc., a California corporation (“Pacific”) and Asset Alliance Holding Corp., a Delaware corporation. The equity interests of Pacific are owned by Messrs. Roger Richter, Jonathan M. Glaser and Daniel A. David. Messrs. Glaser and Richter have sole investment discretion over the Fund’s portfolio holdings. The address for the selling shareholder is 11601 Wilshire Blvd., Suite 2180, Los Angeles, California 90025.
	(6)	Reflects 1,000,000 shares of common stock and 250,000 shares of common stock issuable upon the exercise of warrants. John Pittas has investment power and voting control over these securities. The address for the selling shareholder is Aethrion Center, 40 Ag. Konstantinou Street, 151 24 Maroussi, Greece.
	(7)	Reflects 520,000 shares of common stock and 130,000 shares of common stock issuable upon the exercise of warrants. Daniel S. Loeb has investment power and voting control over these securities. Mr. Loeb disclaims beneficial ownership of these securities. The address for the selling shareholder is 390 Park Avenue, 18th Fl., New York, New York, 10022.
	(8)	Reflects 313,333 shares of common stock and 78,333 shares of common stock issuable upon the exercise of warrants. Daniel S. Loeb has investment power and voting control over these securities. Mr. Loeb disclaims beneficial ownership of these securities. The address for the selling shareholder is 390 Park Avenue, 18th Fl., New York, New York, 10022.
	(9)	Reflects 500,000 shares of common stock and 125,000 shares of common stock issuable upon the exercise of warrants. Gordon Roth and Byron Roth share investment power and voting control, and claim beneficial ownership of these securities.- The address for the selling shareholder is c/o BTG Investments, 24 Corporate Plaza, Newport Beach, California, 92660.

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(10)	Reflects 208,333 shares of common stock and 52,083 shares of common stock issuable upon the exercise of warrants. Basso Capital Management, L.P. (“Basso”) is the Investment Manager to Basso Fund Ltd. Howard I. Fischer is a managing member of Basso GP, LLC, the General Partner of Basso, and as such has investment power and voting control over these securities. Mr. Fischer disclaims beneficial ownership of these securities.
(11)	Reflects 208,333 shares of common stock and 52,083 shares of common stock issuable upon the exercise of warrants. Basso Capital Management, L.P. (“Basso”) is the Investment Manager to Basso Private Opportunity Holding Fund Ltd. Howard I. Fischer is a managing member of Basso GP, LLC, the General Partner of Basso, and as such has investment power and voting control over these securities. Mr. Fischer disclaims beneficial ownership of these securities.
(12)	Reflects 333,333 shares of common stock and 83,333 shares of common stock issuable upon the exercise of warrants. Steven C. Kircher, Trustee, has investment power and voting control over these securities. Mr. Kircher disclaims beneficial ownership of these securities. The address for the selling shareholder is 6000 Greystone Place, Granite Bay, California, 95746.
(13)	Reflects 333,333 shares of common stock and 83,333 shares of common stock issuable upon the exercise of warrants. The address for the selling shareholder is 650 Fifth Ave, 24th Fl, New York, New York, 10019.
(14)	Reflects 250,000 shares of common stock and 62,500 shares of common stock issuable upon the exercise of warrants. Whitebox Intermarket Partners, L.P. is a B.V.I. limited partnership. Its general partner is Whitebox Intermarket Advisors, LLC (the “Manager”), a Delaware limited liability company and investment adviser that has voting and dispositive power over Whitebox Intermarket Advisors, LLC, including the Euroseas shares. The equity interest of the Manager are owned by Whitebox Intermarket Partners, L.P.. Andrew J. Redleaf is the Managing Member of the General Partner, Chief Executive Officer and Director of Whitebox Intermarket Advisors, LLC and has sole investment discretion over Whitebox Intermarket Partners, L.P. portfolio holdings. The address for the selling shareholder is 3033 Excelsior Blvd. #300, Minneapolis, MN 55416.
(15)	Reflects 12,133 shares of common stock and 3,033 shares of common stock issuable upon the exercise of warrants. Vassiliki Demis is the Director of Vacky Holdings, SA and as such has investment power and voting control over these securities. Mr. Demis disclaims beneficial ownership of these securities. The address for the selling shareholder is c/o Vassiliki Demis, 14 Perikleous Street, Piraeus Gr 18536, Greece.
(16)	Reflects 24,266 shares of common stock and 6,066 shares of common stock issuable upon the exercise of warrants. James J. Apostolakis has investment power and voting control over these securities, and has beneficial ownership of these securities. The address for the selling shareholder is 150 E.69th St, New York, New York 10021.
(17)	Reflects 24,266 shares of common stock and 6,066 shares of common stock issuable upon the exercise of warrants. Robert F. DiMarsico is the Trustee of the Marion Corp. Defined Benefit Pension Plan, and as such has investment power and voting control over these securities, and has beneficial ownership of these securities. The address for the selling shareholder is 869 Park Ave, River Edge, NJ 07661.
(18)	Reflects 9,966 shares of common stock and 2,491 shares of common stock issuable upon the exercise of warrants. BC Advisors, LLC (“BCA”) is the general partner of SRB Management, L.P (“SRBGC”), SRB Greenway Capital (Q.P.), L.P. (“SRBQP”) and SRB Greenway Offshore Operating Fund, L.P. (“SRB Offshore”). Steven R. Becker is the sole principal of BCA. Through his control of BCA, Mr. Becker possesses sole voting and investment control over the portfolio securities of each of SRBGC, SRBQP and SRB Offshore. The address of the selling shareholder is 300 Crescent Court, Suite 1111, Dallas, Texas, 75201.
(19)	Reflects 67,766 shares of common stock and 16,941 shares of common stock issuable upon the exercise of warrants. BC Advisors, LLC (“BCA”) is the general partner of SRB Management, L.P (“SRBGC”), SRB Greenway Capital (Q.P.), L.P. (“SRBQP”) and SRB Greenway Offshore Operating Fund, L.P. (“SRB Offshore”). Steven R. Becker is the sole principal of BCA. Through his

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	control of BCA, Mr. Becker possesses sole voting and investment control over the portfolio securities of each of SRBGC, SRBQP and SRB Offshore. The address of the selling shareholder is 300 Crescent Court, Suite 1111, Dallas, Texas, 75201.
(20)	Reflects 5,600 shares of common stock and 1,400 shares of common stock issuable upon the exercise of warrants. BC Advisors, LLC (“BCA”) is the general partner of SRB Management, L.P (“SRBGC”), SRB Greenway Capital (Q.P.), L.P. (“SRBQP”) and SRB Greenway Offshore Operating Fund, L.P. (“SRB Offshore”). Steven R. Becker is the sole principal of BCA. Through his control of BCA, Mr. Becker possesses sole voting and investment control over the portfolio securities of each of SRBGC, SRBQP and SRB Offshore. The address of the selling shareholder is 300 Crescent Court, Suite 1111, Dallas, Texas, 75201.
(21)	Reflects 66,666 shares of common stock and 16,666 shares of common stock issuable upon the exercise of warrants. Keith A. Goodman is Manager of the General Partner for Nite Capital LP, and as such has investment power and voting control over these securities, and has beneficial ownership of these securities. The address for the selling shareholder is 100 East Cook Ave #201, Libertyville, IL 60048.
(22)	Reflects 66,666 shares of common stock and 16,666 shares of common stock issuable upon the exercise of warrants. Adam Banowitz has investment power and voting control over these securities, and has beneficial ownership of these securities. The address for the selling shareholder is 954 3rd Ave #402, New York, New York 10022.
(23)	Reflects 11,000 shares of common stock and 2,750 shares of common stock issuable upon the exercise of warrants. Jonathan Evan Spanier has investment power and voting control over these securities, and disclaims beneficial ownership of these securities. The address for the selling shareholder is 267 S. Beverly Drive #1162, Beverly Hills, California, 90212.
(24)	Reflects 11,000 shares of common stock and 2,750 shares of common stock issuable upon the exercise of warrants. Peter G. Geddes has investment power and voting control over these securities, and has beneficial ownership of these securities. The address for the selling shareholder is P.O. Box 5303, Beverly Hills, California 90212.
(25)	Reflects 11,000 shares of common stock and 2,750 shares of common stock issuable upon the exercise of warrants. Jesse Grossman, Trustee of the Jesse Grossman Accountancy Corp. Retirement Trust, has investment power and voting control over these securities, and claims beneficial ownership of these securities. The address for the selling shareholder is 5000 Llano Drive, Woodland Hills, California, 91364.
(26)	Reflects 33,333 shares of common stock and 8,333 shares of common stock issuable upon the exercise of warrants. Michael Stone has investment power and voting control over these securities, and has beneficial ownership of these securities. The address for the selling shareholder is 18 Ozone Avenue, Venice, California, 90291.
(27)	Reflects 16,666 shares of common stock and 4,166 shares of common stock issuable upon the exercise of warrants. David Graber has investment power and voting control over these securities, and has beneficial ownership of these securities. The address for the selling shareholder is 9101 St. Ives Drive, Los Angeles, California, 90069.
(28)	Reflects 144,712 shares of common stock issuable upon consummation of the Merger. Seward Ave Partners, LLC is a Delaware limited liability company. Beneficial ownership of these securities is as follows: 92% Jesse Grossman; 4% Anthony Salandra; and 4% Winnie Huang who share investment power and voting control in the same proportions as beneficial ownership. The address for the selling shareholder is c/o Winnie Huang, 175 South Lake Avenue, Suite 307, Pasadena, California 91101.
(29)	Reflects 142,653 shares of common stock issuable upon consummation of the Merger. Jonathan Spanier has investment power and voting control over these securities. The address for the selling shareholder is 269 S. Beverly Dr., Suite 1102, Beverly Hills, California 90212.
(30)	Reflects 165,699 shares of common stock issuable upon consummation of the Merger. Olive Grove, LLC is a limited liability company organized under the laws of the State of California. Olive Grove, LLC is beneficially owned by the following members in the following approximate percentages:

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	85% by Peter G. Geddes and 15% by David Graber. Peter G. Geddes, has investment power and voting control over these securities. The address for the selling shareholder is P.O. Box 5303, Beverly Hills, California 90212.

(31)	Reflects 272,868 shares of common stock issuable upon consummation of the Merger. James A Loughran and Barry Taleghany, each acting singly, has investment power and voting control over these securities. The address for the selling shareholder is c/o James Loughran, 38 Hertford Streed, London W1JSG, England.
(32)	Reflects 92,672 shares of common stock issuable upon consummation of the Merger. Jodi Hunter has investment power and voting control over these securities. The address for the selling shareholder is 1003 Dormador, Suite 21, San Clemente, California 92672.

	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	•	an exchange distribution in accordance with the rules of the applicable exchange;
	•	privately negotiated transactions;
	•	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
	•	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share;
	•	a combination of any such methods of sale;
	•	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or
	•	any other method permitted pursuant to applicable law.

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		Pages
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2003 and 2004		F-3
Consolidated Statements of Income for the Years Ended December 31, 2002, 2003 and 2004		F-4
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2002, 2003 and 2004		F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2003 and 2004		F-6
Notes to the Consolidated Financial Statements		F-7
Schedule I — Condensed Financial Information of Euroseas Ltd.
Schedule I — Balance Sheets — December 31, 2003 and 2004		F-24
Schedule I — Income Statements for the years ended December 31, 2002, 2003 and 2004		F-25
Schedule I — Statements of Stockholders’ Equity for the years ended December 31, 2002, 2003 and 2004		F-26
Schedule I — Statements of Cash Flows for the years ended December 31, 2002, 2003 and 2004		F-27
Schedule I — Notes to the Condensed Financial Information of Euroseas Ltd.		F-28

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	Deloitte.
	Hadjipavlou, Sofianos & Cambanis S.A.

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		Notes				2003				2004
						(All amounts expressed in
						U.S. dollars)
ASSETS
Current Assets
Cash and cash equivalents							8,100,047				15,497,482
Trade accounts receivable, net							431,740				245,885
Prepaid expenses							74,114				207,551
Claims and other receivables							346,307				137,783
Inventories			3				354,927				303,478
Restricted cash							102,204				68,980
Total current assets							9,409,339				16,461,159
Fixed Assets
Vessels, net			4				41,096,067				34,171,164
Total fixed assets							41,096,067				34,171,164
Long-Term Assets
Deferred charges, net			5				929,757				2,205,178
Investment in associate			6				22,856				—
Total long-term assets							952,613				2,205,178
Total assets							51,458,019				52,837,501
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Long-term debt, current portion			10				5,105,000				6,030,000
Trade accounts payable							802,054				879,541
Accrued expenses			7				254,863				321,056
Deferred revenue			8				1,235,032				1,908,189
Due to related companies			9				1,084,824				4,626,060
Total current liabilities							8,481,773				13,764,846
Long-Term Liabilities
Long-term debt, net of current portion			10				15,490,000				7,960,000
Total long-term liabilities							15,490,000				7,960,000
Total liabilities							23,971,773				21,724,846
Commitments and contingencies			13				—				—
Shareholders’ Equity
Common Stock (par value $0.01, 100,000,000 shares authorized, 29,754,166 issued and outstanding)							297,542				297,542
Preferred shares (par value $0.01, 20,000,000 shares authorized, no shares issued and outstanding)							—				—
Additional paid-in capital			14				18,623,236				17,073,381
Retained earnings							8,565,468				13,741,732
Total shareholders’ equity							27,486,246				31,112,655
Total liabilities and shareholders’ equity							51,458,019				52,837,501

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		Notes				2002				2003				2004
						(All amounts expressed in U.S. dollars)
Revenues
Voyage Revenue							15,291,761				25,951,023				45,718,006
Commissions			9				(420,959	)			(906,017	)			(2,215,197	)
Net revenue							14,870,802				25,045,006				43,502,809
Operating Expenses
Voyage expenses			15				531,936				436,935				370,345
Vessel operating expenses			15				7,164,271				8,775,730				8,906,252
Management fees			9				1,469,690				1,722,800				1,972,252
Amortization and depreciation			4, 5				4,053,049				4,757,933				3,461,678
Net gain on sale of vessel			4				—				—				(2,315,477	)
Total operating expenses							13,218,946				15,693,398				12,395,050
Operating income							1,651,856				9,351,608				31,107,759
Other Income/(Expenses)
Interest and finance cost							(799,970	)			(793,257	)			(708,284	)
Derivative gain							—				—				27,029
Foreign exchange gain/(loss)							2,849				(690	)			(1,808	)
Interest income							6,238				36,384				187,069
Other expenses, net							(790,883	)			(757,563	)			(495,994	)
Equity in earnings/(losses)			6				30,655				(167,433	)			—
Net income for the year							891,628				8,426,612				30,611,765
Earnings per share, basic and diluted			12				0.03				0.28				1.03
Weighted average number of shares outstanding during the period			12				29,754,166				29,754,166				29,754,166

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										Common				Preferred
						Number of				Shares				Shares				Paid-In
		Comprehensive				Shares				Amount				Amount				Capital				Retained
		Income				(Note 12)				(Note 12)				(Note 12)				(Note 12)				Earnings				Total
		(All amounts, except per share data, expressed in U.S. dollars)
Balance, January 1, 2002			—				29,754,166				297,542				—				15,073,236				1,210,728				16,581,506
Net income			891,628				—				—				—				—				891,628				891,628
Contribution			—				—								—				4,500,000				—				4,500,000
Dividend paid			—				—				—				—				—				(687,500	)			(687,500	)
Balance, December 31, 2002			—				29,754,166				297,542				—				19,573,236				1,414,856				21,285,634
Net income			8,426,612				—				—				—				—				8,426,612				8,426,612
Dividends paid/return of capital			—				—				—				—				(950,000	)			(1,276,000	)			(2,226,000	)
Balance, December 31, 2003							29,754,166				297,542				—				18,623,236				8,565,468				27,486,246
Net income			30,611,765				—				—				—				—				30,611,765				30,611,765
Dividends paid/return of capital			—				—				—				—				(1,549,855	)			(25,435,501	)			(26,985,356	)
Balance, December 31, 2004							29,754,166				297,542				—				17,073,381				13,741,732				31,112,655

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		2002				2003				2004
		(All amounts expressed in U.S. dollars)
Cash Flows from Operating Activities:
Net income			891,628				8,426,612				30,611,765
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of vessel			3,514,403				4,158,159				2,530,100
Amortization of dry-docking expenses			538,646				599,774				931,578
Amortization of deferred finance cost			55,497				67,402				50,681
Equity in earnings			(30,655	)			167,433
Provision for doubtful accounts			—				3,592				(27,907	)
Gain on sale of vessel			—				—				(2,315,477	)
Changes in operating assets and liabilities:
(Increase)/decrease in:
Trade accounts receivable, net			68,888				110,471				213,762
Prepaid expenses			(3,213	)			26,552				(133,437	)
Claims and other receivables			29,728				(171,731	)			208,524
Inventories			(125,499	)			(7,748	)			51,449
Increase/(decrease) in:
Due to related companies			177,169				(482,778	)			3,541,236
Trade accounts payable			644,749				(650,863	)			77,487
Accrued expenses			3,125				(43,308	)			66,193
Other liabilities			(133,123	)			(274,764	)			673,157
Deferred dry-docking expenses			—				(972,671	)			(2,270,418	)
Net cash provided by operating activities			5,631,343				10,956,132				34,208,693
Cash Flows from Investing Activities:
Purchase of vessel			(16,993,811	)			—				—
(Increase)/decrease in cash retention accounts			(42,268	)			214,832				33,224
Proceeds from sale of vessels			—				—				6,723,018
Net cash from investing activities			(17,036,079	)			214,832				6,756,242
Cash Flows from Financing Activities:
Increase in common stock and paid-in capital			4,500,000				—				—
Dividends			(687,500	)			(1,200,000	)			(26,962,500	)
Advance from shareholders			300,000				—				—
Repayment of advances from shareholders			—				(300,000	)			—
Deferred finance costs			(120,145	)			(28,000	)			—
Proceeds from long-term debt			11,900,000				3,000,000				—
Repayment of long-term debt			(3,645,000	)			(6,250,000	)			(6,605,000	)
Net cash used in financing activities			12,247,355				(4,778,000	)			(33,567,500	)
Net increase in cash and cash equivalents			842,619				6,392,964				7,397,435
Cash and cash equivalents at beginning of year			864,464				1,707,083				8,100,047
Cash and cash equivalents at end of year			1,707,083				8,100,047				15,497,482
Supplemental cash flow information
Cash paid during the year for:
Cash paid for interest			582,740				725,034				474,430
Non Cash Items:
Dividend and return of capital from investment in associates (note 6)			—				1,026,000				22,856

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1.	Basis of Presentation and General Information

	•	Searoute Maritime Ltd. incorporated in Cyprus on May 20, 1992, owner of the Cyprus flag 33,712 DWT bulk carrier motor vessel “Ariel”, which was built in 1977 and acquired on March 5, 1993.
	•	Oceanopera Shipping Ltd. incorporated in Cyprus on June 26, 1995, owner of the Cyprus flag 34,750 DWT bulk carrier motor vessel “Nikolaos P”, which was built in 1984 and acquired on July 22, 1996.
	•	Oceanpride Shipping Ltd. incorporated in Cyprus on March 7, 1998, owner of the Cyprus flag 26,354 DWT bulk carrier motor vessel “John P”, which was built in 1981 and acquired on March 7, 1998.
	•	Alcinoe Shipping Ltd. incorporated in Cyprus on March 20, 1997, owner of the Cyprus flag 26,354 DWT bulk carrier motor vessel “Pantelis P”, which was built in 1981 and acquired on June 4, 1997.
	•	Alterwall Business Inc. incorporated in Panama on January 15, 2001, owner of the Panama flag 18,253 DWT container carrier motor vessel “HM Qingdao1” (ex Kuo Jane), which was built in 1990 and acquired on February 16, 2001.
	•	Allendale Investment S.A. incorporated in Panama on January 22, 2002, owner of the Panama flag 18,154 DWT container carrier motor vessel “Kuo Hsiung”, which was built in 1993 and acquired on May 13, 2002.
	•	Diana Trading Ltd. incorporated in the Marshall Islands on September 25, 2002, owner of the Marshall Islands flag 69,734 DWT bulk carrier motor vessel “Irini”, which was built in 1988 and acquired on October 15, 2002.

	(a) Silvergold Shipping Ltd. incorporated in Cyprus on May 16, 1994. Up to June 3, 1996, the Company was engaged in ship owning activities, but thereafter, the Company’s assets and liabilities were

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	liquidated and the retained earnings were distributed to the shareholders. The Company remained dormant until October 10, 2000 when it acquired the 18,000 DWT, Cyprus flag, container carrier motor vessel Widar, which was built in 1986. The vessel was sold on April 24, 2004. The group of beneficial shareholders which own the above mentioned ship-owing companies also own the ship owning company, Silvergold Shipping Ltd., accordingly, these accompanying financial statements also consolidate the accounts of Silvergold Shipping Ltd. until May 31, 2005, when Silvergold Shipping Ltd. paid a final dividend of $35,000 to its shareholders.
	(b) Fitsoulas Corporation Limited which was incorporated in Malta on September 24, 1999, is the owner of the Malta flag 41,427 DWT bulk carrier motor vessel Elena Heart, which was built in 1983 and acquired on October 22, 1999. The vessel was sold on March 31, 2003. The group of beneficial shareholders which own the above mentioned ship-owing companies also exercised significant influence over the ship-owning company Fitsoulas Corporation Limited through their 38% interest in that company, and this investment was therefore accounted for using the equity method.

		Year Ended December 31,
Charterer		2002				2003				2004
A			42.40	%			31.30	%			12.20	%
B			28.68	%			23.01	%			11.50	%
C			—				10.55	%			—
D			—				—				20.60	%
E			—				—				10.52	%
F			—				—				14.07	%

2.	Significant Accounting Policies

	Principles of Consolidation

	Investment in Associates

	Use of Estimates

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	Other Comprehensive Income

	Foreign Currency Translation

	Cash and Cash Equivalents

	Restricted Cash

	Trade Accounts Receivable

	Claims and Other Receivables

	Inventories

	Vessels

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	Depreciation

	Revenue and Expense Recognition

	Repairs and Maintenance

	Accounting for Dry-Docking Costs

	Pension and Retirement Benefit Obligations — Crew

	Financing Costs

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	Assets Held for Sale

	Impairment of Long-Lived Assets

	Derivative Financial Instruments

	Earnings Per Common Share

	Segment Reporting

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	Recent Accounting Pronouncements

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3.	Inventories

		2003				2004
Lubricants			263,408				256,223
Victualling			91,519				47,255
Total			354,927				303,478

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4.	Vessels

		Vessel				Accumulated				Net Book
		Cost				Depreciation				Value
		(Amount expressed in thousands)
Balance, December 31, 2001			44,593				(12,818	)			31,775
— Depreciation for the year			—				(3,515	)			(3,515	)
— Acquisition of vessels			16,994				—				16,994
Balance, December 31, 2002			61,587				(16,333	)			45,254
— Depreciation for the year			—				(4,158	)			(4,158	)
Balance, December 31, 2003			61,587				(20,491	)			41,096
— Depreciation for the year			—				(2,530	)			(2,530	)
— Sale of vessel			(5,827	)			1,432				(4,395	)
Balance, December 31, 2004			55,760				(21,589	)			34,171

5.	Deferred Charges

		2002				2003				2004
Balance, beginning of year			1,070,261				596,262				929,757
Additions:			120,144				1,000,671				2,270,418
Amortization of dry-docking expenses			(538,646	)			(599,774	)			(931,578	)
Amortization of loan arrangement fees			(55,497	)			(67,402	)			(50,681	)
Written-off on sale of vessel M/ V Widar			—				—				(12,738	)
Balance, end of year			596,262				929,757				2,205,178

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6.	Investment in Associate

		2002				2003				2004
Balance, beginning of year			1,185,634				1,216,289				22,856
Equity in earnings/(losses)			30,655				(167,433	)			—
Dividends and return of capital			—				(1,026,000	)			(22,856	)
Balance, end of year			1,216,289				22,856				—

7.	Accrued Expenses

		2003				2004
Accrued payroll expenses			83,240				95,615
Accrued interest			23,800				100,366
Other accrued expenses			147,823				125,075
Total			254,863				321,056

8.	Deferred Revenue

9.	Related Party Transactions

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10.	Long-Term Debt

						December 31,
Borrower						2003				2004
Alterwall Business Inc.			(a	)			4,350,000				3,750,000
Alcinoe Shipping Limited/ Oceanpride Shipping Limited			(b	)			2,500,000				1,600,000
Diana Trading Limited			(c	)			5,020,000				4,140,000
Allendale Investments S.A.			(d	)			5,100,000				4,500,000
Searoute Maritime Limited			(e	)			250,000				—
Silvergold Shipping Limited			(e	)			2,000,000				—
Oceanopera Shipping Limited			(e	)			1,375,000				—
							20,595,000				13,990,000
Current portion							(5,105,000	)			(6,030,000	)
Long-term portion							15,490,000				7,960,000

2005			6,030,000
2006			2,280,000
2007			1,480,000
2008			4,200,000
Total		$	13,990,000

(a)

On January 30, 2001, Alterwall Business Inc. (the owner of M/ V HM Qingdao I (ex M/ V Kuo Jane)) entered into a loan agreement for an amount of $6,000,000. The loan is repayable in sixteen quarterly installments of $150,000 each and a balloon payment of $3,600,000 due in February 2005. (See Subsequent events e.(1)). Interest is calculated at LIBOR plus 1.5% per annum. The average interest rate for the years ended December 31, 2002, 2003 and 2004 amounted to 3.26%, 2.75% and 3.65%.

(b)		On April 1, 2003, Alcinoe Shipping Limited (the owner of M/ V Pantelis P.) and Oceanpride Shipping Limited (the owner of M/ V John P.) jointly and severally entered into a new loan amounting to $3,000,000 when the outstanding amount of the old loan was $780,000. The loan is repayable in twelve consecutive quarterly installments being four installments of $250,000 each, eight installments of $200,000 each and a balloon payment of $400,000 payable with the last installment in August 2006. The first installment is due in August 2003. Interest is calculated on LIBOR plus 1.75% per annum. The average interest rate for the years ended December 31, 2002, 2003 and 2004 amounted to 3.15%, 2.91% and 3.89%.
(c)		On October 10, 2002, Diana Trading Limited (the owner of M/ V Irini) entered into a loan agreement for an amount of $5,900,000 which was drawn down in to tranches of $4,900,000 on October 16, 2002 and of $1,000,000 on December 2, 2002. The loan is repayable in twenty-four consecutive quarterly installments of $220,000 each, and a balloon payment of $600,000 payable together with the last installment due in

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		October 2008. The first installment is payable in January 2003. The interest is calculated at LIBOR plus 1.6% per annum. The average interest rate for the years ended December 31, 2002, 2003 and 2004 amounted to 3.03%, 2.93% and 3.8%.
(d)		On May 1, 2002, Allendale Investments S.A. (the owner of m/ v Kuo Hsiung) entered into a loan agreement for an amount of $6,000,000 which was drawn down on May 31, 2002. The loan is repayable in twenty-four consecutive quarterly installments of $150,000 plus a balloon payment of $2,400,000 payable with the last installment in May 2008. The interest is calculated at LIBOR plus 1.75% per annum. The average interest rate for the years ended December 31, 2002, 2003 and 2004 amounted to 3.56%, 3.05% and 3.63%.
(e)		The loans of Searoute Maritime Limited (the owner of m/ v Ariel), Silvergold Shipping Limited (the owner of m/ v Widar) and Oceanopera Shipping Limited (the owner of m/ v Nikolaos) were fully repaid in 2004. The average interest rate for the years ended December 31, 2002, 2003 and 2004 amounted to 3.5%, 2.94% and 2.94%.

	•	a first priority mortgage over the respective vessels.
	•	a first priority assignment of earnings and insurances.
	•	a personal guarantee of one shareholder.
	•	the corporate guarantee of the management company.

11.	Income Taxes

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12.	Earnings Per Common Share

			December 31,				December 31,				December 31,
			2002				2003				2004
Income:
	Net income for the year available to common stockholders			891,628				8,426,612				30,611,765
Basic earnings per share:
	Weighted average common shares — outstanding			29,754,166				29,754,166				29,754,166
Diluted earnings per share:
	Weighted average common shares — diluted			29,754,166				29,754,166				29,754,166
Basic earnings per share:				0.03				0.28				1.03
Diluted earnings per share:				0.03				0.28				1.03

13.	Commitments and Contingencies

14.	Common Stock and Paid-In Capital

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15.	Voyage and Vessel Operating Expenses

		Year Ended December 31,
		2002				2003				2004
Voyage Expense
Port charges			132,076				202,537				188,319
Bunkers			387,973				227,398				182,026
Other			11,887				7,000				—
Total			531,936				436,935				370,345
Vessel Operating Expenses
Crew wages and related costs			3,934,140				4,569,039				4,460,233
Insurance			875,319				1,334,517				1,486,179
Repairs and maintenance			503,761				595,194				515,820
Lubricants			391,576				455,931				446,034
Spares and consumable stores			1,310,317				1,555,286				1,660,600
Professional and legal fees			31,327				34,206				46,997
Others			117,831				231,557				290,389
Total			7,164,271				8,775,730				8,906,252

		Year Ended December 31,
		2002				2003				2004
Commissions charged by third parties			265,899				619,552				1,334,307
Commissions charges by related parties			155,060				286,465				880,890
Total			420,959				906,017				2,215,197

16.	Financial Instruments

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17.	Subsequent Events

1.	Transaction with Euroseas Ltd. and Cove Apparel Inc.

2.	Dividends

3.	New Loans

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	•	a second priority mortgage over the respective vessel.
	•	general assignment of earnings and insurance.
	•	a personal guarantee of one shareholder.

	•	first priority mortgage over the respective vessels on a joint and several basis.
	•	first assignment of earnings and insurance.
	•	a personal guarantee of one shareholder.
	•	a corporate guarantee of Eurobulk Ltd.
	•	a minimum liquidity balance equal to no less than $1,000,000 through out the life of the facility.

	•	first priority mortgage over the respective vessels on a joint and several basis;
	•	first assignment of earnings and insurance;

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	•	a corporate guarantee of Euroseas Ltd.; and
	•	a minimum liquidity balance equal to no less than $300,000 per vessel in the Euroseas fleet throughout the life of the facility.

4.	Refinance of Loans

	•	first priority mortgage over the respective vessels on a joint and several basis.
	•	first assignment of earnings and insurance.
	•	a personal guarantee of one shareholder.
	•	a corporate guarantee of Eurobulk Ltd.
	•	a pledge of all the issued shares of each borrower

5.	Management Agreements

6.	Dividend and Authorization of Reverse Stock Split

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7.	Acquisition of Vessel

8.	Reclassification of Dividend

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		December 31,				December 31,
		2003				2004
ASSETS
Current assets			—				—
Investments			27,486,245				31,112,654
Total assets			27,486,245				31,112,654
LIABILITIES AND SHAREHOLDERS’ EQUITY
Total current liabilities			—				—
Total liabilities			—				—
Commitments and contingencies			—				—
Shareholders’ equity
Common shares (par value $0.01, 100,000,000 shares authorized, 29,754,166 issued and outstanding)			297,542				297,542
Preferred shares (par value $0.01, 20,000,000 shares authorized, no shares issued and outstanding)
Additional paid-in capital			18,623,236				17,073,381
Retained earnings/(accumulated deficit)			8,565,467				13,741,731
Total shareholders’ equity			27,486,245				31,112,654
Total liabilities and shareholders’ equity			27,486,245				31,112,654

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		Year Ended December 31,
		2002				2003				2004
Revenues
Equity in net income of subsidiaries			891,627				8,426,612				30,611,765
Net income			891,627				8,426,612				30,611,765
Earnings per share, basic and diluted			0.03				0.28				1.03
Weighted average number of shares outstanding during the period			29,754,166				29,754,166				29,754,166

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																						Retained
										Common				Preferred								Earnings/
		Comprehensive				Number of				Shares				Shares				Paid-in				(Accumulated
		Income				Shares				Amount				Amount				Capital				deficit)				Total
Balance, January 1, 2002							29,754,166				297,542				—				15,073,236				1,210,728				16,581,506
Net income			891,628				—				—				—				—				891,628				891,628
Contribution							—				—				—				4,500,000
Dividends paid							—				—				—				—				(687,500	)			(687,500	)
Balance, December 31, 2002							29,754,166				297,542				—				19,573,236				1,414,856				21,285,634
Net income			8,426,612				—				—				—				—				8,426,612				8,426,612
Dividends paid/ return of capital							—				—				—				(950,000	)			(1,276,000	)			(2,226,000	)
Balance, December 31, 2003							29,754,166				297,542				—				18,623,236				8,565,468				27,486,246
Net income			30,611,765				—				—				—				—				30,611,765				30,611,765
Dividends paid/ return of capital							—				—				—				(1,549,855	)			(25,435,501	)			(26,985,356	)
Balance, December 31, 2004							29,754,166				297,542				—				17,073,381				13,741,732				31,112,655

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		2002				2003				2004
Cash flows from operating activities:
Net income			891,628				8,426,612				30,611,765
Adjustments to reconcile net income to net cash provided by operating activities:
Undistributed earnings/ (losses) of subsidiaries			(204,127	)			(6,002,612	)			(3,626,409	)
Net cash used in operating activities			687,500				2,226,000				26,985,356
Cash flows from investing activities:
Investment in subsidiaries			(4,500,000	)			—				—
Net cash used in investing activities			(4,500,000	)			—				—
Cash flows from financing activities:
Dividends paid/return of capital			(687,500	)			(2,226,000	)			(26,985,356	)
Contributions to paid in capital			4,500,000				—				—
Net cash used in financing activities			3,812,500				(2,226,000	)			(26,985,356	)
Net change in cash and cash equivalents			—				—				—
Cash and cash equivalents at beginning of year			—				—				—
Cash and cash equivalents at end of year			—				—				—

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		Pages
Unaudited Condensed Consolidated Balance Sheet as of June 30, 2005			F-30
Unaudited Condensed Consolidated Statements of Income for the six month periods ended June 30, 2004 and 2005			F-31
Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the six month period ended June 30, 2005			F-32
Unaudited Condensed Consolidated Statements of Cash Flows for the six month periods ended June 30, 2004 and 2005			F-33
Notes to the Unaudited Condensed Consolidated Financial Statements			F-34

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		Notes				Historical				Proforma(1)
						(All amounts
						expressed in
						U.S. Dollars)
ASSETS
Current Assets
Cash and cash equivalents							5,452,608
Accounts receivable trade, net							9,652
Prepaid expenses							129,706
Claims and other receivables							69,641
Due from related party			4				3,995,602
Inventories			2				319,765
Restricted cash							1,299,135
Total current assets							11,276,109
Fixed Assets
Vessels, net book value							32,978,300
Total fixed assets							32,978,300
Long-Term Assets
Deferred charges, net							2,357,775
Total long-term assets							2,357,775
Total assets							46,612,184
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Long-term debt, current portion							14,780,000				14,780,000
Trade accounts payable							946,760				946,760
Accrued expenses							437,570				437,570
Deferred revenue			3				2,176,825				2,176,825
Due to related companies			4				—				—
Dividend payable							—				2,650,223
Total current liabilities							18,341,155				20,991,738
Long-Term Liabilities
Long-term debt, net of current portion							26,620,000				26,620,000
Total long-term liabilities							26,620,000				26,620,000
Total liabilities							44,961,155				47,611,378
Commitments and contingencies			6				—				—
Shareholders’ Equity
Common Stock (par value $0.01, 100,000,000 shares authorized, 29,754,166 issued and outstanding)							297,542				297,542
Preferred shares (par value $0.01, 20,000,000 shares authorized, no shares issued and outstanding)							—				—
Additional paid-in capital (restated)			8				373,381				373,381
Retained earnings/(Accumulated deficit) (restated)			8				980,106				(1,670,117	)
Total shareholders’ equity							1,651,029				(999,194	)
Total liabilities and shareholders’ equity							46,612,184				46,612,184

(1)

Gives effect to the payment of a cash dividend of $2.65 million to (i) our shareholders of record on December 16, 2005, and (ii) either Cove Apparel Inc.’s shareholders that will exchange their shares to Euroseas shares, if the merger with Cove Apparel Inc. is consummated, or, Friends which will issue the shares that would have been issued to Cove Apparel Inc.’s Shareholders, if the merger is not consummated. It assumes no exercise of any of the Company’s warrants.

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		Six Months Ended June 30,
		2004				2005
		(All amounts expressed
		in U.S. dollars)
		(Unaudited)				(Unaudited)
Revenues
Voyage revenue			21,321,769				23,833,736
Commissions			(1,018,218	)			(1,340,228	)
Net revenue			20,303,551				22,493,508
Operating Expenses
Voyage expenses			60,829				131,903
Vessel operating expenses			4,727,324				4,270,787
Management fees			1,007,771				965,384
Amortization and depreciation			1,640,565				1,824,322
Gain on sale of vessel			(2,315,477	)			—
Total operating expenses			5,121,012				7,192,396
Operating income			15,182,539				15,301,112
Other Income/(Expenses)
Interest and finance cost			(297,916	)			(545,719	)
Derivative gain/(loss)			11,000				(82,029	)
Foreign exchange gain/(loss)			(3,734	)			312
Interest income			18,535				89,698
Other income/(expenses), net			(272,115	)			(537,738	)
Net income for the period			14,910,424				14,763,374
Earnings per share, basic and diluted			0.50				0.50
Weighted average number of shares outstanding during the period			29,754,166				29,754,166

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																						Retained
																						Earnings/
																		Paid-In				(Accumulated
										Common				Preferred				Capital				Deficit)				Total
		Comprehensive				Number of				Shares				Shares				(Restated —				(Restated —				(Restated —
		Income				Shares				Amount				Amount				See Note 8)				See Note 8)				See Note 8)
		(All amounts, except per share data, expressed in U.S. dollars)
Balance, December 31, 2004							29,754,166				297,542				—				17,073,381				13,741,732				31,112,655
Net income			14,763,374				—				—				—				—				14,763,374				14,763,374
Dividends/Return of capital							—				—				—				(16,700,000	)			(27,525,000	)			(44,225,000	)
Balance June 30, 2005							29,754,166				297,542				—				373,381				980,106				1,651,029

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		Six Months Ended June 30,
		2004				2005
		(All amounts expressed
		in U.S. dollars)
		(Unaudited)				(Unaudited)
Cash Flows from Operating Activities:
Net income			14,910,424				14,763,374
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			1,328,247				1,191,864
Amortization for deferred dry-docking			312,318				632,458
Amortization for deferred finance cost			26,269				61,784
Gain on sale of vessel			(2,315,477	)			—
Provision for doubtful accounts			(27,907	)			—
(Gain)/ Loss on derivative			(11,000	)			82,029
Changes in operating assets and liabilities:
(Increase)/decrease in:
Accounts receivable trade, net			(170,965	)			236,233
Prepaid expenses			(319,914	)			77,845
Claims and other receivables			333,139				(13,887	)
Inventories			98,927				(16,287	)
Due from related companies			108,277				(8,621,660	)
Increase/(decrease) in:
Trade accounts payable			866,962				67,219
Accrued expenses			(182,671	)			116,914
Other liabilities			(93,714	)			268,634
Deferred dry docking expenses			(1,480,078	)			(688,739	)
Net cash provided by operating activities			13,382,837				8,157,781
Cash flows from investing activities:
(Increase)/decrease in cash retention accounts			(494	)			(1,230,155	)
Proceeds from sale of vessel			6,723,018				—
Net cash used in investing activities			6,722,524				(1,230,155	)
Cash flows from financing activities:
Deferred financing costs			—				(157,500	)
Dividends paid/ return of capital			(11,762,500	)			(44,225,000	)
Proceeds from long term debt			—				28,810,000
Repayment of long-term debt			(5,468,780	)			(1,400,000	)
Net cash used in financing activities			(17,231,280	)			(16,972,500	)
Net increase in cash and cash equivalents			2,874,081				(10,044,874	)
Cash and cash equivalents at beginning of period			8,100,047				15,497,482
Cash and cash equivalents at end of period			10,974,128				5,452,608
Cash paid for interest			253,644				260,376

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1.	Basis of Presentation and General Information

	•	Searoute Maritime Ltd. incorporated in Cyprus on May 20, 1992, owner of the Cyprus flag 33,712 DWT bulk carrier motor vessel “Ariel”, which was built in 1977 and acquired on March 5, 1993.
	•	Oceanopera Shipping Ltd. incorporated in Cyprus on June 26, 1995, owner of the Cyprus flag 34,750 DWT bulk carrier motor vessel “Nikolaos P”, which was built in 1984 and acquired on July 22, 1996.
	•	Oceanpride Shipping Ltd. incorporated in Cyprus on March 7, 1998, owner of the Cyprus flag 26,354 DWT bulk carrier motor vessel “John P”, which was built in 1981 and acquired on March 7, 1998.
	•	Alcinoe Shipping Ltd. incorporated in Cyprus on March 20, 1997, owner of the Cyprus flag 26,354 DWT bulk carrier motor vessel “Pantelis P”, which was built in 1981 and acquired on June 4, 1997.
	•	Alterwall Business Inc. incorporated in Panama on January 15, 2001, owner of the Panama flag 18,253 DWT container carrier motor vessel “HM Qingdao1” (ex Kuo Jane), which was built in 1990 and acquired on February 16, 2001.
	•	Allendale Investment S.A. incorporated in Panama on January 22, 2002, owner of the Panama flag 18,154 DWT container carrier motor vessel “Kuo Hsiung”, which was built in 1993 and acquired on May 13, 2002.
	•	Diana Trading Ltd. incorporated in the Marshall Islands on September 25, 2002, owner of the Marshall Islands flag 69,734 DWT bulk carrier motor vessel “Irini”, which was built in 1988 and acquired on October 15, 2002.
	•	Euroseas Acquisition Company Inc. was incorporated in Delaware, United States of America on June 21, 2005, to effect a merger with Cove Apparel Inc. See Note 7.

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	(a) Silvergold Shipping Ltd. incorporated in Cyprus on May 16, 1994. Up to June 3, 1996, the Company was engaged in ship owning activities, but thereafter, the Company’s assets and liabilities were liquidated and the retained earnings were distributed to the shareholders. The Company remained dormant until October 10, 2000 when it acquired the 18,000 DWT, Cyprus flag, container carrier motor vessel “Widar”, which was built in 1986. The vessel was sold on April 24, 2004. The group of beneficial shareholders which own the above mentioned ship-owing companies also own the ship owning company, Silvergold Shipping Ltd., accordingly, these accompanying financial statements also consolidate the accounts of Silvergold Shipping Ltd until May 31, 2005, when Silvergold Shipping Ltd paid a final dividend of $35,000 to its shareholders.
	(b) Fitsoulas Corporation Limited which was incorporated in Malta on September 24, 1999, is the owner of the Malta flag 41,427 DWT bulk carrier motor vessel Elena Heart, which was built in 1983 and acquired on October 22, 1999. The vessel was sold on March 31, 2003. The group of beneficial shareholders which own the above mentioned ship-owing companies also exercised significant influence over the ship-owning company Fitsoulas Corporation Limited through their 38% interest in that company, and this investment was therefore accounted for using the equity method.

		Six Months
		Ended June 30,
Charterer		2004				2005
A			12.91	%			16.77	%
B			12.37	%			—
C			11.6	%			—
D			10.87	%			—
E			10.81	%			19.52	%

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2.	Inventories

		June 30,
		2005
Lubricants			261,954
Victualling			57,811
Total			319,765

3.	Deferred Revenue

4.	Related Party Transactions

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5.	Long-Term Debt

						June 30,
Borrower						2005
Diana Trading Limited			(a	)			7,900,000
Alterwall Business Inc./Allendale Investments S.A.			(c	)			20,000,000
Alcinoe Shipping Limited
Oceanpride Shipping Limited
Searoute Maritime Limited
Oceanopera Shipping Limited			(b	)			13,500,000
							41,400,000
Current portion							(14,780,000	)
Long-Term Portion							26,620,000

To June 30
2005			14,780,000
2006			8,980,000
2007			10,180,000
2008			2,860,000
2009			1,800,000
thereafter			2,800,000
Total		$	41,400,000

(a)

On May 9, 2005 Diana Trading Ltd. (the owner of m/v Irini) entered into a loan agreement amounting to $4,200,000 which was drawn down on May 9, 2005. The loan is repayable in twelve consecutive quarterly installments being four installments of $450,000 each, and eight installments of $300,000 each with the last installment due in May 2008. The first installment is payable in August 2005. The interest is calculated at LIBOR plus 1.25% per annum.

(b)		On May 16, 2005 Alcinoe Shipping Ltd (the owner of m/v Pantelis P.), Oceanpride Shipping Ltd. (the owner of m/v John P.), Searoute Maritime Ltd. (the owner of m/v Ariel) and Oceanopera Shipping Ltd. (the owner of m/v Nikolaos P) jointly and severally entered into a new eurodollar loan amounting to $13,500,000 which was drawn down on May 16, 2005. Prior to obtaining the loan an amount of $1,400,000 was paid in settlement of the outstanding loans as at March 31, 2005 for Alcinoe Shipping Ltd. and Oceanpride Shipping Ltd. The new loan is repayable in twelve consecutive quarterly installments being two installments of $2,000,000 each, one installment of $1,500,000, nine installments of $600,000 each and a balloon payment of $2,600,000 payable with the last installment in May 2008. The first installment is due in August 2005. Interest is calculated on LIBOR plus 1.5% per annum.
(c)		On May 24, 2005, Allendale Investments S.A. (the owner of m/v Kuo Hsiung) and Alterwall Business Inc. (the owner of m/v HM Qingdao1” (ex Kuo Jane)) jointly and severally entered into a loan agreement amounting to $20,000,000 which was drawn down on May 26, 2005. The outstanding amount

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		of the old loans was $7,800,000 and was repaid in full. The loan is repayable in twenty-four unequal consecutive quarterly installments of $1,500,000 each in the first year, $1,125,000 each in the second year, $775,000 in the third year, $450,000 each in the forth through to the sixth year and a balloon payment of $1,000,000 payable with the last installment in May 2011. The interest is calculated at LIBOR plus 1.25% per annum as long as the outstanding amount remains below 60% of the fair market value (FMV) of the vessel and 1.375% if the outstanding amount is above 60% of the FMV of the vessel.

	•	first priority mortgage over the respective vessels on a joint and several basis.
	•	first assignment of earnings and insurance.
	•	a personal guarantee of one shareholder.
	•	a corporate guarantee of Eurobulk Ltd.
	•	a pledge of all the issued shares of each borrower

6.	Commitments and Contingencies

7.	Subsequent Events

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8.	Restatement of previously issued financial statements

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Item 6.	Indemnification of Directors and Officers.

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Item 7.	Recent Sales of Unregistered Securities

Item 8.	Exhibits and Financial Statement Schedules.

2.1		Agreement and Plan of Merger dated as of August 25, 2005 by and among Euroseas Ltd., Euroseas Acquisition Company Inc., Cove Apparel, Inc., and Kevin Peterson, Shawn Peterson, Jodi Hunter and Daniel Trotter(1)
2.2		Amendment No. 1 to Agreement and Plan of Merger, dated November 22, 2005(1)
3.1		Articles of Incorporation of Euroseas Ltd.(1)
3.2		Bylaws of Euroseas Ltd.(1)
4.1		Specimen Common Stock Certificate(1)
4.2		Form of Securities Purchase Agreement(1)
4.3		Form of Registration Rights Agreement(1)
4.4		Form of Warrant(1)
4.5		Registration Rights Agreement between Euroseas Ltd. and Friends Investment Company Inc., dated November 2, 2005(1)

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5.1		Opinion of Seward & Kissel LLP, special Marshall Islands counsel to the Registrant, as to the validity of the shares of Common Stock(1)
8.1		Opinion of Seward & Kissel LLP, as to certain tax matters(1)
10.1		Form of Lock-Up Agreement(1)
10.2		Loan Agreement between Oceanopera Shipping Limited, as borrower and HSBC Bank plc, as lender for the amount of USD$3,200,000, dated June 11, 2001(1)
10.3		Loan Agreement between Diana Trading Ltd., as borrower, and Oceanopera Shipping Limited, as corporate guarantor, and HSBC Bank plc, as the lender, dated October 16, 2002 for the amount of USD$5,900,000(1)
10.4		Loan Agreement between Diana Trading Ltd., as borrower, and HSBC Bank plc, as lender, for the amount of USD$4,200,000 dated May 9, 2005(1)
10.5		Loan Agreement dated May 16, 2005 between EFG Eurobank Ergasias S.A., as lender, and Alcinoe Shipping Limited, Oceanopera Shipping Limited, Oceanpride Shipping Limited, and Searoute Maritime Limited, as borrowers, for the amount of US$13,500,000(1)
10.6		Secured Loan Facility Agreement dated May 24, 2005 between Allendale Investments S.A. and Alterwall Business Inc. as borrowers, Fortis Bank (Nederland) N.V. and others as lenders, and Fortis Bank (Nederland) N.V. as agent and security trustee for USD$20,000,000(1)
10.7		Form of Standard Ship Management Agreement(1)
10.8		Agreement between Eurobulk Ltd. and Eurochart S.A., for the provision of exclusive brokerage services, dated December 20, 2004(1)
10.9		Form of Current Time Charter(1)
10.10		Services Agreement between Euroseas Ltd. and Eurobulk Ltd. dated November 2, 2005(1)
10.11		Loan Agreement between Salina Shipping Corp., as borrower, and Calyon, as lender, for the amount of USD$15,500,000 dated December 28, 2005(1)
21.1		Subsidiaries of the Registrant(1)
23.1		Consents of Seward & Kissel LLP (included in its opinions filed as Exhibits 5.1 and 8.1(1))
23.2		Consent of Deloitte, Hadjipavlou, Sofianos & Cambanis S.A.(2)
24.1		Power of Attorney(3)

(1)	Previously filed.
(2)	Filed herewith.
(3)	Included on the signature page of this Registration Statement.

Item 9.	Undertakings.

	(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

	(a)	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended;
	(b)	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and

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	(c)	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

	(2)	That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
	(4)	To file a post-effective amendment to the registration statement to include any financial statements required by §210.3-19 of Regulation S-X at the start of any delayed offering or throughout a continuous offering.
	(5)	That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

	i.	to respond to requests for information that is incorporated by reference into the prospectus, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; and
	ii.	to arrange or provide for a facility in the U.S. for the purpose of responding to such requests. The undertaking in subparagraph (i) above include information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

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	EUROSEAS LTD.

	By:	/s/ Aristides J. Pittas

	Name: Aristides J. Pittas

	Title:	Chairman of the Board and President

SIGNATURES				TITLE		DATE
/s/ Aristides J. Pittas Aristides J. Pittas				Chairman of the Board of Directors, President and Chief Executive Officer (Principal Executive Officer)		February 3, 2006
/s/ Dr. Anastasios Aslidis Dr. Anastasios Aslidis				Chief Financial Officer, Treasurer and Director (Principal Financial and Accounting Officer) and Authorized Representative in the United States		February 3, 2006

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SIGNATURES				TITLE		DATE
/s/ Aristides P. Pittas Aristides P. Pittas				Vice Chairman and Director		February 3, 2006
/s/ Stephania Karmiri Stephania Karmiri				Secretary		February 3, 2006
/s/ George Skarvelis George Skarvelis				Director		February 3, 2006
/s/ George Taniskidis George Taniskidis				Director		February 3, 2006
/s/ Gerald Turner Gerald Turner				Director		February 3, 2006
/s/ Panagiotis Kyriakopoulos Panagiotis Kyriakopoulos				Director		February 3, 2006

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