Euroseas Ltd. Enters Into Agreement to Sell Series B Convertible Perpetual Preferred Shares, Raising $29 Million in Net

Euroseas Ltd. Enters Into Agreement to Sell Series B Convertible Perpetual 
Preferred Shares, Raising $29 Million in Net Proceeds 
MAROUSSI, ATHENS, GREECE -- (Marketwired) -- 01/27/14 --  Euroseas
Ltd. (NASDAQ: ESEA) (the "Company") announced today that it entered
into an agreement to sell 25,000 shares of its Series B Convertible
Perpetual Preferred Shares ("Series B Preferred Shares") to a fund
managed by Tennenbaum Capital Partners, LLC ("TCP") and 5,700 shares
to Preferred Friends Investment Company Inc,, an affiliate of the
Company, for expected net proceeds of approximately $29 million. The
Company intends to use the proceeds for the acquisition of vessels
and general corporate purposes. The transaction is expected to close
by January 29, 2014. RMK Maritime acted as an advisor to the Company
in the transaction. 
Aristides Pittas, CEO of Euroseas, commented: "We are pleased to
welcome an institutional investor of the caliber of TCP as an
investor to Euroseas. This fundraising is part of our strategy to
make investments in dry cargo vessels at what we believe is an
opportune time in the market cycle and to renew our fleet as
evidenced by the newbuilding orders for 2 Ultramax bulkers we
recently placed. We believe that raising funds through the sale of
our Series B Preferred Shares is advantageous for our shareholders at
this point in time and we look forward to continuing growing Euroseas
with the support of TCP and the rest of our shareholders." 
The Series B Preferred Shares will pay dividends (in cash or in-kind
at the option of the Company, subject to certain exceptions) during
the first five years at a rate of 0% or 5%, depending on the trading
price of the Company's common stock. In addition, if a cash dividend
is paid on the Company's common stock during such time, then if the
dividend paid on the Series B Preferred Shares is 5%, the holders of
Series B Preferred Shares shall receive such dividend in cash and
shall also receive an additional cash dividend in an amount equal to
40% of the common stock dividend it would have received on an
as-converted basis. If, however, the dividend on the Series B
Preferred Shares is 0%, then the holders of Series B Preferred Shares
shall receive a cash dividend equal to the greater of 100% of the
common stock dividend it would have received on an as-converted
basis, and 5%. If a cash dividend is paid on the Company's common
stock after the first five years, the holders of Series B Preferred
Shares shall receive an additional cash dividend in an amount equal
to 40% of the common stock dividend it would have received on an
as-converted basis. The dividend rate will increase to 12% in years
six and seven and to 14% thereafter. The Series B Preferred Shares
can be converted at the option of their holders at any time, and at
the option of the Company only if certain share price and liquidity
milestones are met. Each Series B Preferred Share is convertible into
common stock at an initial conversion price of $1.45 (subject to
adjustment, including upon a default). The Series B Preferred Shares
are redeemable in cash by the Company at any time after the fifth
anniversary of the original issue date. Holders of the Series B
Preferred Shares may require the Company to redeem their shares only
upon the occurrence of certain corporate events.  
Subject to certain ownership thresholds, holders of Series B
Preferred Shares have the right to appoint one director to the
Company's board of directors and TCP also has consent rights over
certain corporate actions. In addition, the holders of Series B
Preferred Shares will vote as one class with the Company's common
stock on all matters on which shareholders are entitled to vote, with
each Series B Preferred Share having a number of votes equal to 50%
of the numbers of shares of common stock of the Company into which
such Series B Preferred Share would be convertible on the applicable
record date. The terms of the Series B Preferred Shares, including
the rights, preferences and privileges of such shares are set forth
in full in the Statement of Designation of the Rights, Preferences
and Privileges of Series B Convertible Perpetual Preferred Shares of
the Company (the "Statement of Designation") filed with the Registrar
of Corporations of the Republic of the Marshall Islands. A copy of
the Statement of Designation has also been filed with the SEC and is
available on EDGAR.  
About Euroseas Ltd.  
Euroseas Ltd. was formed on May 5, 2005 under the laws of the
Republic of the Marshall Islands to consolidate the ship owning
interests of the Pittas family of Athens, Greece, which has been in
the shipping business over the past 136 years. Euroseas trades on the
NASDAQ Global Select Market under the ticker ESEA since January 31,
2007.  
Euroseas operates in the dry cargo, drybulk and container shipping
markets. Euroseas' operations are managed by Eurobulk Ltd., an ISO
9001:2008 certified affiliated ship management company, which is
responsible for the day-to-day commercial and technical management
and operations of the vessels. Euroseas employs its vessels on spot
and period charters and through pool arrangements.  
Euroseas has a fleet of 14 vessels, including 3 Panamax drybulk
carriers and 1 Handymax drybulk carrier, 3 Intermediate size
containerships, 5 Handy size containerships and 2 Feeder
containerships. Euroseas 4 drybulk carriers have a total cargo
capacity of 262,074 dwt, and its 10 containerships have a cargo
capacity of 17,587 teus. 
About Tennenbaum Capital Partners, LLC 
Tennenbaum Capital Partners, LLC ("TCP") is a Los Angeles-based
alternative investment management firm focused on performing credit
and special situations for middle-market companies. Since its
founding, TCP has invested more than $11.9 billion in over 280
companies. For more information, please visit:
www.tennenbaumcapital.com. 
Forward Looking Statement 
 This press release contains
forward-looking statements (as defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended) concerning future events and the
Company's growth strategy and measures to implement such strategy;
including our expected joint venture and vessel acquisitions and time
charters. Words such as "expects," "intends," "plans," "believes,"
"anticipates," "hopes," "estimates," and variations of such words and
similar expressions are intended to identify forward-looking
statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have been
correct. These statements involve known and unknown risks and are
based upon a number of assumptions and estimates that are inherently
subject to significant uncertainties and contingencies, many of which
are beyond the control of the Company. Actual results may differ
materially from those expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially include, but are not limited to changes in the demand for
drybulk vessels and containerships, competitive factors in the market
in which the Company operates; risks associated with operations
outside the United States; and other factors listed from time to time
in the Company's filings with the Securities and Exchange Commission.
The Company expressly disclaims any obligations or undertaking to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any
 change in the Company's
expectations with respect thereto or any change in events, conditions
or circumstances on which any statement is based.  
Visit our website www.euroseas.gr  
Company Contact
Tasos Aslidis
Chief Financial Officer
Euroseas Ltd.
11 Canterbury Lane,
Watchung, NJ 07069
Tel. (908) 301-9091
E-mail: aha@euroseas.gr  
Investor Relations / Financial Media
Nicolas Bornozis
President
Capital Link, Inc.
230 Park Avenue, Suite 1536
New York, NY 10169
Tel. (212) 661-7566
E-mail: euroseas@capitallink.com 
 
 
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