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

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.

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

of the dividend rate for the

million value of preferred shares remaining outstanding until

January 2021.

After that date the dividend rate will increase to

14%.

The difference between (

) the fair value of the consideration transferred to the holders of the Series B Preferred Shares (comprising the cash payment offered) and (

) 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

$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.