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Note 15 - Preferred Shares | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Preferred Stock [Text Block] |
15. | Preferred shares
|  |  | Number of Shares |  |  |  | Preferred Shares Amount |  |  |  | Dividends paid-in-kind |  |  |  | Total |
Balance, January 1, 2017 |  |  | 35,505 |  |  |  | 29,000,000 |  |  |  | 4,804,948 |  |  |  | 33,804,948 |
Dividends declared |  |  | 1,809 |  |  |  | - |  |  |  | 1,808,811 |  |  |  | 1,808,811 |
Balance, December 31, 2017 |  |  | 37,314 |  |  |  | 29,000,000 |  |  |  | 6,613,759 |  |  |  | 35,613,759 |
Dividends declared |  |  | 1,333 |  |  |  | - |  |  |  | 1,335,733 |  |  |  | 1,335,733 |
Shares distributed to EuroDry |  |  | (19,042 | ) |  |  | (14,500,000 | ) |  |  | (3,692,131 | ) |  |  | (18,192,131 | )
Balance, December 31, 2018 |  |  | 19,605 |  |  |  | 14,500,000 |  |  |  | 4,257,361 |  |  |  | 18,757,361 |
Dividends declared |  |  | 81 |  |  |  | - |  |  |  | 78,639 |  |  |  | 78,639 |
Redemption of shares |  |  | (11,686 | ) |  |  | (8,155,055 | ) |  |  | (3,530,945 | ) |  |  | (11,686,000 | )
Preferred deemed dividend |  |  | - |  |  |  | 504,577 |  |  |  | - |  |  |  | 504,577 |
Balance, December 31, 2019 |  |  | 8,000 |  |  |  | 6,849,522 |  |  |  | 805,055 |  |  |  | 7,654,577 |
On January 27, 2014, the Company 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 total net proceeds of approximately $29 million. The redemption amount of the Company’s Series B Preferred Shares is $1,000 per share. The Company used the proceeds for the acquisition of vessels and general corporate purposes. The Series B Preferred Shares paid dividends in-kind until January 29, 2019 at a rate of 5%.
The dividend rate increased to 12% for the two years following January 29, 2019 and to 14% thereafter and is payable only in cash. Cash dividends are declared at each quarter and actual payments are made within the following quarter. If a cash dividend is paid on the Company's common stock after January 29, 2019, 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 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 a conversion price of $15.58 (as adjusted in September 2015 following the shareholders’ rights offering of the Company) subject to further adjustment for certain events. 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. At the Spin-off date Euroseas distributed EuroDry Series B Preferred Shares to holders of Euroseas' Series B Preferred Shares in exchange for a number of such Euroseas Series B Preferred Shares, representing 50% of Euroseas Series B Preferred Stock, i.e. $14,500,000 of the initial preferred shares amount of the Company and $3,692,131 of dividends paid in kind. Euroseas contributed to EuroDry its interests in seven of its drybulk subsidiaries and related intercompany debts and obligations in exchange for approximately 2,254,830 of EuroDry common shares and 19,042 of EuroDry Series B Preferred Shares (representing all of the EuroDry's issued and outstanding stock as of that time). Euroseas made a special dividend of 100% of EuroDry's outstanding common shares to holders of Euroseas' common stock as of the record date of the special dividend. In addition, Euroseas distributed 100% of EuroDry Series B Preferred Shares to holders of Euroseas' Series B Preferred Shares as described above. On June 10, 2019 the Company proceeded in the redemption of $11.7 million of value, or about 59.4%, of its outstanding Series B Preferred Shares with a simultaneous reduction of 4% of the dividend rate for the $8 million value of preferred shares remaining outstanding until January 2021. After that date the dividend rate will increase to 14%. The difference between ( 1 ) the fair value of the consideration transferred to the holders of the Series B Preferred Shares (comprising the cash payment offered) and ( 2 ) the carrying amount of the Series B Preferred Shares before the redemption (net of issuance costs) amounted to $504,577, and was recorded as a preferred deemed dividend. For each of the years ended December 31, 2017 and 2018, the Company declared four consecutive dividends totaling $1.81 million and $1.34 million, respectively, all of which were paid in kind. For the year ended December 31, 2019 the Company declared dividends of $1.27 million, of which $0.08 million were paid in-kind, $1.03 million were paid in cash during 2019 and another $0.16 million were accrued as of December 31, 2019 and were paid in cash in the first quarter of 2020. The redemption liability as of December 31, 2019 is $8,000,000.
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.

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- Definition The entire disclosure for terms, amounts, nature of changes, rights and privileges, dividends, and other matters related to preferred stock. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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