Euroholdings Ltd.

The accompanying combined carve-out financial statements include the accounts of the legal entities comprising the Company as discussed in Note 1. These combined carve-out financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of Euroseas. The combined carve-out financial statements reflect the financial position, results of operations and cash flows of the Predecessor as they were historically managed, in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission, or the SEC.

These financial statements are presented as if such businesses had been combined throughout the periods presented. All intercompany accounts and transactions between the entities comprising the Company have been eliminated. The Company has no common capital structure for the combined business and, accordingly, has not presented historical earnings per share.

During the periods presented the Company is dependent upon its Parent Company for a major part of its working capital and financing requirements, as Euroseas Ltd. uses a centralized approach to cash management and financing of its operations. Financial transactions relating to the Company are accounted for through the net parent investment account. Accordingly, none of Euroseas Ltd.’s cash and cash equivalents or debt and the related interest expense at the corporate level have been assigned to the Company in the combined carve-out financial statements. Net parent contributions to equity, financing part or all of the acquisition cost of the vessels owned by the Subsidiaries are accounted for through the net parent investment account. Net parent investment represents Euroseas Ltd.’s interest in the Company’s net assets and includes the Company’s cumulative earnings as adjusted for cash distributions to and cash contributions from Euroseas Ltd. Transactions with Euroseas Ltd. are reflected in the accompanying combined carve-out statements of cash flows as a financing activity, in the combined carve-out statement of changes in net parent investment as “Net transfers to parent” and in the combined carve-out balance sheets within “Net parent investment”. Euroseas did not incur any debt in connection with the acquisition of the vessels, except for mortgage debt financing directly allocated to the Company (see Note 8). As a result, there was no intercompany financing excluded from the asset or liability balances.

The combined carve-out income statements reflect intercompany expense allocations made to Euroholdings Ltd. Predecessor by Euroseas for certain corporate functions and for shared services provided by Euroseas. These allocations were made by Euroseas on a pro-rata basis, based on the number of calendar days of Euroholdings’ vessels compared to the number of calendar days of the total Euroseas fleet. See Note 6. “General and administrative expenses” and Note 7. “Related Party Transactions” for further information on expenses allocated by Euroseas.

Both the Company and Euroseas consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by Euroholdings Ltd. Predecessor during the periods presented. Nevertheless, the combined carve-out financial statements may not be indicative of the Company’s future performance and may not include all of the actual expenses that would have been incurred by the Company as an independent publicly traded company or reflect the Company’s financial position, results of operations and cash flows that would have been reported if the Company had been a stand-alone entity during the periods presented.