Aristides J. Pittas – Chairman and CEO Dr. Anastasios Aslidis – CFO and Treasurer

Donald McLee – Wells Fargo

Thank you for standing by, ladies and gentlemen. And welcome to the Euroseas’ Conference Call on three and six months period ended June 30, 2014 Financial Results. We have with us Mr. Aristides Pittas, Chairman and Chief Executive Officer; and Mr. Tasios Aslidis, Chief Financial Officer of the company. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advise you that the conference is being recorded today, on Friday, 8 August, 2014. Please be reminded that the company announced their results after the market closed yesterday with a press release that has been publicly distributed. Before passing the floor to Mr. Pittas, I would like to remind everyone that in today’s presentation and conference call, Euroseas will be making forward-looking statements. These statements are within the meaning of the Federal Securities Laws. Matters discussed may be forward-looking statements which are based on the current management expectations that involve risks and uncertainties that may result in such expectations not being realized. I kindly draw your attention to slide #2 of the webcast presentation, which has the full forward-looking statement and that the same statement was also included in the press release. Please take a moment to go through the whole statement and read it. And I would now like to pass the floor over to Mr. Pittas, Chairman and Chief Executive Officer of Euroseas. Please go ahead, sir. Aristides J. Pittas: Good morning and thank you for joining Euroseas for our conference call today. Together with me is Tasios Aslidis, our CFO. The purpose of today's call is to discuss our financial results for the three and six months period ended June 30, 2014. Let's turn to slide 3 of our presentation for our financial results overview. The results for the second quarter of 2014 reflect the continued depressed state of the markets. For the second quarter of 2014, we reported total net revenues of $9.6 million same as the previous quarter. Net loss for the period was $5 million whilst adjusted net loss available to common shareholders was $5.3 million or $0.09 per share basic and diluted. The primary difference being the $0.4 million dividends paid to our Series B Preferred shares. Adjusted EBITDA for the second quarter of 2014 was negative by $1.6 million. Turning to our first half 2014 financial results, we reported total net revenues of $19.1 million. Net loss for the period was $7.2 million, while adjusted to common shareholders was $7.8 million or $0.15 loss per share basic and diluted. Again, the main difference is the $0.7 million preferred dividends. Adjusted EBITDA for the first half of 2014 was negative $0.6 million. Our CFO, Tasos Aslidis will go over our financials in more detail later on during the call. Turning to slide 4, we highlight our operational highlights that include employment extensions on six of our containerships that vary from short period of one to three months and up to 12 months, which is in line with our strategy to take cover up to maximum of one year whilst waiting for the market to recover further. All the (inaudible) were slightly levels on the previous charters. During the first half the containership market remained generally static at low levels but we expect prospects to improve in 2014 and 2015 with supply demand balance in favor of demand. We currently maintain a single short-time chartering policy with result to our bulkers where we also believe that the rates will improve from the current low levels as we’re above (12) (ph) and the fourth quarter which historically has been good for the drybulk sector. We fixed one of our leasing on the spot (inaudible) for a single 90-day strip, one on the four to six months time charter and one on the index linked charter. We also locked one of our new building Kamsarmax vessels scheduled for delivery at the end of 2015 for four year at an attractive rate of $14,100 per day with a one year optional at $14350 per day. Our current fleet including the four new building drybulk vessels is shown in slide 5. In total we’ve 19 vessels including 9 drybulk vessels and 10 container carriers. On slide 6, you will Euromar fleet, our joint venture with Eton Park and Rhône Capital. Euromar has a fleet of 10 intermediate and handysize container vessels between 1,700 TEUs and 3,100 TEUs and post-panamax vessel. The total amount of $175 committed equity of which $25 million was from Euroseas has been injected into the company. Euromar’s current cash position is about $26.5 million with which it may purchase one or two additional vessels. Let’s move to slide 8 for a briefer review of the market. The BDI dropped from 1362 to 894 point within Q2 and currently stands at 732 points. In more detail the Capes size spot market dropped sharply from about $18,500 a day to about $14,000 a day at the end of the quarter and currently stands at only $8,500 per day. The Panamax started the second quarter at above $7,300 per day then fluctuated its way to a peak of $8,500 in May only to drop to unsustainable levels of $3,400 a day by the end of second quarter. Currently panamax spot rate is still at the press at $4,900 per day. The Supramax was not as violent as we aforementioned falling from $11,000 per day to $7,000 per day during the second quarter and currently standing at $7,750 a day. Similar less violent moves were of course noticed in the one year period circus. Capes dropped from $28,000 to about $20,000 per day, Panamax is on $14,000 to $10,000 and Supramax has held a ground a bit but then falling from $12,750 to about $10,000 a day. Due to the unexpected significant drop in the markets, second hand prices have dropped significantly by close to 20% from 10 year old receipts coming close to the all time lows, which was at the beginning of 2013. New building prices held as most decent yards are covered for the next couple of years and they’re reluctant to accept lower prices. Consequently, there was little ordering during the last three months. On the containership sector, rates moved slightly downwards which seems up to 3,000 TEU from the recent hikes at the end of Q1. Activity on the Panamax sector was just cascading where possible into the smaller sizes (inaudible) and the rates there witnessed the slight increase. Interestingly, idle fleet has been reduced to around 250,000 TEUs which is the lowest since the summer of 2011, of course, this is expected to rise again after the peak season of the next two to three months, but in the meantime we may see slightly higher rates. Secondhand prices witness to decrease of about 15% from the recent hikes mainly due to the lack of buyers and the overtime with mainly ships controlled by banks which could easily become sales candidates. We believe prices continued to strengthen mainly due to demand for other ship types taking up to yard capacity. Turning to slide 9, we can view the Drybulk age profile and orderbook delivery schedule. The delivery schedule for Drybulk vessels in the beginning 2014 stood at significant 10.4% of the fleet with larger vessels dominating the orderbook. This does not take into cancellations, slippages and scraping. In the past years it was generally difficult to quantify how much of the orderbook will actually get delivered this year. First indications are that it will be around 70%. The orderbook for 2015 at close to 8% is the lowest it has been very many years, but if it all gets delivered it will still (inaudible). Turning to slide 10, the containership delivery scheduled at the beginning of 2014 stood at 9.5%. Here again, cancellations and slippages will change its original estimate. But it will be significantly less by the 27% we post last year, per house just around 10%. Here again, the orderbook for 2015 stands relatively low of 80%. The current orderbook is of course heavily skewed towards the larger ships. However, cascading is happening fast, which implies trades of all sizes will get affected. We have seen and continue to see Panamax ships between 3,000 to 5,000 TEU being displaced by the new larger ships. At the same time some of these ships are cascading down with some of their routes up to recently served by our size of ships between 1,000 and 3,000 TEU. A good set of example is the African trade. Factors like high consumption and lack of gear are restricting the possible uses. But nevertheless, this penetration by the Panamax fleet is bound to continue. We believe that in order to see a sustained recovery, we will need to see extra capacity absorb regardless of vessel sizes and then the whole market in parallel. Turning to slide 11 for review on the world economy. We see many positives but also significant negatives that can affect global growth and consequently global trade. On the positive side, we see the GDP in the U.S. could be around 3% for the remainder of the year, India’s pro-business government, the fragmentation of the Euro-sceptic parties in the EU where growth expectations have been revised upwards, actual stability in sizes. Negatives include the instability in the Middle East and Ukraine, but also financial issues like the Argentina default and European banking sector weakness, narrated by the failure Banco Espirito Santo in Portugal in advance of the completion of the EU bank and stress test exercise. Slide 12, shows our expectations of world GDP according to the IMF and shipping demand growth. Projected world GDP growth in 2014 is now expected to be slightly less than what it was three months ago mainly due to the U.S. drybulk reduced just the first quarter pullback, Russia and Brazil. China is expected to grow by 7.4% which is all lower than previous years and remains quite ahead of seasons to continue support drybulk sector. The 3.4% annual growth in the global projection is still higher than the 2013 growth of 3%. Further out in 2015, the global economies projected by the IMF to grow at even healthier rate of 4% the levels not seen since 2010. As can be seen on the bottom of slide 10, Clarksons’ projections point to drybulk growth of 5% in 2014, up from earlier projections of 4%. Containerized Trade has remained unchanged from earlier projections by Clarksons of 5.8% in 2014. Let’s turn to slide 13 to summarize our outlook for drybulk and container sectors. Let’s start with bulkers. New vessel deliveries have softened in the second quarter of 2014 and are expected to continue softening in the second half. This fact together seasonally higher trade required in the second half of the year, are the reasons why we believe drybulk rates will improve from the extremely low current spot levels. Our market analysis suggest a balance demand in supply for the whole year which would result in the average time charter being similar to last year's, this averaged around $10,100 per day for Panamax one year time charter rates although its closed that year at 14,500 per day. In 2015, we expect the rates to move sideways. The FFA market currently agrees suggesting calendar 2015 trade in the range of $10,000 per day. With 2016 remaining new building capacity slots, scoring worries that the market will soften up again if new orders are place. With new fundamental deliveries for 2016 do not exceed 2% of the fleet, we would expect softer to remain at least as in 2015. As for containership trends, we expect demand prospect to move further in the remainder of 2014 and 2015. With no new incremental deliveries expected for the remainder for 2014 and 2015 and few for 2016, we expect the supply-demand balance in favor of demand in the next couple of years and improvement of rates. If new incremental deliveries in 2016 do not exceed 3% of the fleet, we would expect charter rates to remain as in 2015. If incremental deliveries are low, as we believe will be the case, then 2016 could be better than 2015. Let's turn to slide 15 for drybulk employment schedule. Our drybulk covenant for 2014 currently stands at around 84% based on maximum durations and ships on index charters. As said previously, we are continuing the practice of employing our vessels and short-term contracts in the anticipation of the market improvement. Let's turn slide 16 for our containership employment schedule. We currently have about 62% covenants for 2014 based on minimum durations here. As in the case to the drybulk vessels our strategy for our container vessels is also to employ them on short-term charters between 3 to 12 months in anticipation of the market improvement. Please turn to slide 17. Through Eurobulk our manager we have been able to continue to keep our costs very low. The graph on this page compares our daily costs excluding drydock expenses since 2008. Overall our cost remains amongst the lowest of the public shipping companies. For the second quarter of 2014, our operational fleet utilization was 99.7% and our commercial fleet utilization was 99.5%. Our daily cost per vessel for Q2 2014 was in line with our budget and similar to last year. Let's now turn to slide 18. The left side of the slide shows the evolution of time charter rates of Panamax drybulk ships and containers of 1,700 TEU since 2001. After seven years when drybulk ships earned more than containerships, both segments were earning similar rates again in the beginning of 2013. The EU crisis which seriously eroded container demand and the surge in drybulk imports to China over the second half of 2015 pushed drybulk rates higher again, but they are now back to the same levels as containerships. The right hand side of slide 18 shows current asset value in relation to historical prices. Panamax asset prices are again significantly below the average of 2000 to 2014. Containership values are still very weak and hovering around their all time lows. We would expect prices to revert closer to historical levels by 2016 if the global economy improves as the IMF predicts. We believe that both markets; containers and drybulk will see a gradual improvement over the next couple of years, but do not expect spectacular returns. For the time being, we are focused on implementing our significant new building program and expect, we’ll soon see a recovering market which will strengthen our share price which will further provide us with a means to continue growing the company in our usual conservative way. With that, I will pass the floor over to our CEO, Tasios Aslidis to take you through our financials in more detail.

Thank you very much Aristides. Good morning from me as well ladies and gentlemen. As usual, I will now provide you with a brief overview of our financial results for the three and six months periods end of June 30, 2014. Let’s move to slide 20 and first take a look at our results for the second quarter of 2014 in comparison to the same period of 2013. I will repeat here some of the same figure that Aristides gave during the beginning of the presentation. For the second quarter of 2014, we reported total net revenues of $9.6 million representing a small increase of the total net revenues of $9.6 million again during the second quarter of 2013. We reported net loss for the period of $5 million, a net loss available to common shareholders of $5.4 million as compared to a net loss of $8.9 million for the second quarter of last year. As Aristides mentioned earlier, the difference between net loss and net loss available to common shareholders is the $0.4 million of dividends we paid to our Series B Preferred shares. We did not have preferred share outstanding in the second quarter of 2014. The preferred dividend can be paid at our option either in cash or in kind, but we have elected to pay in kind for the last two quarters. The results for the second quarter of 2013 include a $0.1 million net loss in derivatives as compared to a zero net contribution from derivatives and a $3.2 million loss on sale of our vessel for the same period of 2013. Basic and diluted loss per share available to common shareholders for the second quarter of 2014 was $0.09 compared to basic and diluted loss per share of $0.20 for the second quarter of last year. Excluding the effect on the loss available to common shareholders for the two periods of the net loss on derivatives and the loss from the sale of vessel, we adjusted net loss per share available to common shareholders for the quarter ended June 30, 2014 remained $0.09 per share basic and diluted compared to a net loss of $0.12 per share basic and diluted to the same quarter of last year. Our adjusted EBITDA for the second quarter of 2014 was negative $1.6 million compared to a negative $1 achieved during the second quarter of 2013. (inaudible) we shared our first half results. For the first half of 2014, we reported total net revenues of $19.1 million representing a 6.6 decrease of our total net revenues of $20.5 during the first half of 2013. We reported a net loss for the period of $7.2 million and net loss available to common shareholders of $7.9million as compared to a net loss of $13.5 million for the first half of last year. Again, the difference between net loss, net loss available to common shareholders is $0.7 million of dividends we paid to Series B Preferred Shares which as I mentioned earlier, we paid them in kind. The results of the first half of 2014 include a 0.1 net loss in derivatives as compared to a zero contribution on derivatives and a $3.2 loss on the sale of a vessel for the same period of 2013. Basic and diluted loss per share available to common shareholders for the first half of 2014 was $0.15 compared to basic and diluted loss per share for (inaudible) for the first half of 2013. Excluding the effect on the loss available to common shareholders for the result of the two periods, the net loss on derivatives and the loss on sale of vessel, we adjusted net loss per share available to common shareholders for the six-month period ended June 30, 2014 remain at $0.15 compared to a loss of $0.23 per share basic and diluted for the same period of last year. Let's now go to slide 21. In this slide we’ll provide you with our fleet performance for the three and six months period ended June 30, 2014, again in comparison to the same period of last year. As usual, we have broken down our presentation of fleet utilization into commercial and operational. Starting first with the second quarter of 2014, we reported 99.5% commercial utilization rate and then 99.7% operational utilization rate as compared to 99.6% commercial and 99.8% of operational for the same period of 2013. Our utilization rate calculation does not include vessels on drybulk or in scheduled repairs during the reporting periods. In the second quarter of 2013, we operated 14.4 vessels with time charter equivalent of $7,373 per vessel per day which represents about 4% decline compared to the times charter equivalent or $7,708 per vessel per day that we have achieved during the same period of last year, during which we operated 15 vessels. Overall, we believe we have maintained, we’ve continued to maintain one of the lowest cost structures among the public shipping companies and we think this is one of our main competitive advantages in the business. Let’s now look at the bottom of this table to our daily cash flow breakeven levels presented here on a dollar per vessel per day basis. For the second quarter of 2014, we reported an operating breakeven level including loan repayments of $14,149 per vessel per day as compared to approximately $11,249 per vessels per day for the same period of 2013. The 14,149 figure that I mentioned earlier includes the repayment of $4.6 million balloon. Turning to our first half of 2014 now, where we reported 99.7% commercial utilization rate, and 99.8% operational utilization rate, compared to 95% commercial and 99.3% operational utilization rate for the same period of 2013. Again, as in the second quarter utilization rate calculation does not include vessels on drydock or in scheduled repairs. In the first half of 2014, we operated 14.2 vessels and earned the time charter equivalent of about $7,585 per vessel per day, which represents a decrease of about 8%, compared to the time charter equivalent of $8,256 per vessel per day that we achieved during the same period of first half of 2013 operating during that period 15 vessels. Total operating expenses including management fees, G&A but excluding drydock cost were $6,399 per vessel per day during the first half of this year, as compared to $6,192 per vessel per day for the same period of 2013. Again at the bottom of this table, as we had for the second quarter we show our daily cash flow breakeven levels for the first half of 2014, we reported an operating breakeven level including our repayments of $10,943 per vessels per day which compares to approximately $10,358 per vessels per day for breakeven level for the same period of last year. Let's move to slide 22. This slide shows on the right hand side our cash flow breakeven levels over the next 12 months and from the left side, we show our scheduled debt repayments including scheduled balloon repayments. As we can see from the chart on the left side, in 2013 we were able to make $10.1 million loan repayment for entire year pay the balloon which we all have to pay was $4.6 million, we paid that balloon in May 2014. Our loan on balloon repayments over the next 12 months have used $2,700 per vessel per day contribution to our daily cash flow breakeven level, a number that we can see on the last row on the page on the right part of the slide. After making assumptions for the other elements that make up our cash flow breakeven levels, such as operating expenses, administrative costs, interest and drydocking expense, we come to estimate cash flow breakeven for the next 12 months of about $10,600 per vessel per day and that number includes loan and balloon repayments. This includes scheduled balloon repayments of $4.9 million, and we approached our cost level would be around $9,300 per vessel per day. Let's move to the next slide, slide 23 and as usual let me give you some highlights from our balance sheet. As of June 30, 2014, our total cash was about $46.4 million comprised of $38.4 million of unrestricted cash and about $8 million of restricted funds and retention accounts. Our outstanding debt was $59.4 million as of June 30, 2014. As a result of the ratio of our debt to the market value of our fleet was about 55% and our net debt to the market value of our fleet was above 12%. We are happy to report that as of June 30, 2014, we were in compliance with all of our loan covenants. Finally, let me make a word about our capital commitments. As mentioned earlier in the presentation, our drybulk investment program required about $118 million of funds over the period of 2014 to 2016 to-date we have made payments amounting to just above $12 million against those capital commitments. We plan to finance the remaining of this commitments with equity, most of which has been secured via the preferred and common offerings during the first quarter of this year and debt in the range of $70 million to $83 million between 6% to 7% for the acquisition price. And with this brief remark, let met pass the floor back to Aristides. Aristides J. Pittas: Thank you, Tasios. Let me now open up the floor for any questions.

(Operator Instructions) Your first question comes from the line of Donald McLee, please ask your question. Donald McLee – Wells Fargo: Good morning guys. Thanks for taking my question. So, the first question is kind of, after the fine start to the year, we have seen drybulk rate generally drop and trend down towards 2013 level. Is there any degree or differentiation on charter between some of the older vessels and younger vessels in the market and where is that at? Aristides J. Pittas: The older vessels demand a little bit lower levels than the younger ones only where feed and consumption are different. If feed and consumption is the same and the size is the same, then charters treat it similarly if we are talking for soft periods, 13 for something like that. But now, the charters have flexibility they want to fix for the longer period for the year or two to grow for younger ships and it's difficult to fix and elder ship for a larger period. Having said that we don't want to fix for a larger period at these rates because we think that the traditional seasonally recover in the market towards the end of the year. Donald McLee – Wells Fargo: That makes sense, I guess, I am interpreting that as if even, if the current rate of environment persist is probably not a big chance of you scrapping any vessels? Aristides J. Pittas: We won't scrap, no if the market is extremely low and below $5,000 to the end of the year that will probably prompt us to scrap the elder Panamaxes as they come due for the drydock. But unless they come due for drydock and the market is below $5,000 a day, no we don't think to scrap this, the ship side is technically very good condition and we see no reason why to do that for ships that have very little debt on them. Donald McLee – Wells Fargo: Okay. I know in your presentation you guys covered the supply side in terms pretty well for the drybulk sector, are there any key covenants in demand side that you are looking for, indicating and proving fundamentals?

I guess the situation at China remains the main driver of demand growth, so as long as China develops or mostly our – we are content towards that and that we are watching of course. Aristides J. Pittas: But we expect more trade into China during the second half of the year as traditionally is the case. We except grains to pickup because as we’re in a good harvest in the U.S. and we are slightly, we’re modestly optimistic. Donald McLee – Wells Fargo: Okay. And then, just the last question before I turn it over, it seems like the outlook for the container markets a bit more positive than the drybulk outlook, how does that affect your growth strategy going forward, will we see potentially focused more on the containers in the immediate term or near term? Aristides J. Pittas: I think that you are right. The container sector is modestly better and not significantly better. We have the bulk of our container investments done through Euromar these days. So, you may see Euromar volume maybe adding the super slow on its fleet at this point in time.

But, we get sufficient exposure to the market through our ten ships and 11 ships via Euromar, if the container market does it bit better we will benefit not (inaudible). Donald McLee – Wells Fargo: Alright. Thanks guys. That’s helpful. Thanks for your time.

Thank you. We have no further question at this time. Please continue. Aristides J. Pittas: Well, thank you very much for attending our conference call today. We would be back to you in three months time with Q3 results. Good bye. Thanks everybody.

Ladies and gentlemen that does conclude our conference call today. Thank you for participating. You may now disconnect.