C3is Inc 6-K, filed Mar 26, 2024
C3is Inc. (CISS)
About this 6-K
C3is Inc filed this 6-K on March 26, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2024
Commission File Number 001-41717
C3IS INC.
(Translation of registrant’s name into English)
331 Kifissias Avenue Erithrea 14561 Athens, Greece
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached to this report on Form 6-K as Exhibit 99.1 is a copy of C3is Inc.’s (the “Company”) preliminary financial and operating results for the fourth quarter and year end December 31, 2023.
| EXHIBIT INDEX | ||
| 99.1 | C3is Inc.’s preliminary financial and operating results for the fourth quarter and year end December 31, 2023 | |
*****
This report on Form 6-K is hereby incorporated by reference into the Company’s Registration Statement on Form S-8 (Reg. No. 333-273306) filed with the Securities and Exchange Commission on July 18, 2023.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 26, 2024
| C3IS INC. | ||
| By: | /s/ Nina Pyndiah | |
| Name: | Nina Pyndiah | |
| Title: | Chief Financial Officer | |
Exhibit 99.1
March 26, 2024
On March 26, 2024, C3is Inc. (the “Company”) announced its preliminary fourth quarter and twelve months results for the period ended December 31, 2023.
Fourth Quarter 2023 Results:
| • | Voyage revenues for the three months ended December 31, 2023 amounted to $13.8 million, an increase of $10.7 million compared to revenues of $3.1 million for the three months ended December 31, 2022, primarily due to the increase in the average number of our vessels. Total calendar days for our fleet were 276 days for the three months ended December 31, 2023. Of the total calendar days in the fourth quarter of 2023, 174, or 63.0%, were time charter days. Our fleet operational utilization was 87.0% for this period. |
| • | Voyage expenses and vessels’ operating expenses for the three months ended December 31, 2023 were $4.4 million and $1.5 million respectively, compared to $0.4 million and $0.8 million respectively, for the three months ended December 31, 2022. The increase in both voyage expenses and vessels’ operating expenses is attributed to the increase in the average number of our vessels. Voyage expenses for the three months ended December 31, 2023 included commissions to third parties of $0.5 million, corresponding to 11% of total voyage expenses. Operating expenses for the three months ended December 31, 2023 mainly included crew expenses of $0.9 million, corresponding to 60% of total operating expenses, spares and consumables costs of $0.3 million, corresponding to 20%, and maintenance expenses of $0.1 million, representing works and repairs on the vessels, corresponding to 7% of total vessel operating expenses. |
| • | Depreciation for the three months ended December 31, 2023 was $1.4 million, a $0.9 million increase from $0.5 million for the same period of last year, due to the increase in the average number of our vessels. |
| • | Management fees for the three months ended December 31, 2023 were $0.12 million, a $0.05 million increase from $0.07 million for the same period of last year, due to the increase in the average number of our vessels. |
| • | General and Administrative costs for the three months ended December 31, 2023 were $0.3 million and mainly related to expenses incurred as a result of operating as a separate public company. General and Administrative costs for the three months ended December 31, 2022 were $0.1 million. |
| • | Interest and finance costs for the three months ended December 31, 2023 were $0.7 million and mainly related to the accrued interest expense – related party as of December 31, 2023 in connection with the $38.7 million which is part of the acquisition price of our Aframax tanker Afrapearl II that is payable by July 2024. |
| • | As a result of the above, for the three months ended December 31, 2023, the Company reported a net income of $5.6 million. |
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| • | EBITDA for the three months ended December 31, 2023 amounted to $7.7 million. |
| • | An average of 3.0 vessels were owned by the Company during the three months ended December 31, 2023. |
Twelve months 2023 Results:
| • | Voyage revenues for the twelve months ended December 31, 2023 amounted to $28.7 million, an increase of $25.4 million compared to revenues of $3.3 million for the period from July 25, 2022 (inception of C3is Inc.) to December 31, 2022, primarily due to the increase in the average number of our vessels. Total calendar days for our fleet were 901 days for the twelve months ended December 31, 2023. Of the total calendar days in 2023, 680, or 75.5%, were time charter days. Our fleet operational utilization was 91.6% for this period. |
| • | Voyage expenses and vessels’ operating expenses for the twelve months ended December 31, 2023 were $7.6 million and $4.8 million respectively, compared to $0.5 million and $0.9 million for the period ended December 31, 2022. The increase in both voyage expenses and vessels’ operating expenses is attributed to the increase in the average number of our vessels and the addition of our Aframax tanker. Voyage expenses for the twelve months ended December 31, 2023 mainly included bunker costs of $3.4 million, corresponding to 45% of total voyage expenses, and commissions to third parties of $1.2 million, corresponding to 16% of total voyage expenses. Operating expenses for the twelve months ended December 31, 2023 mainly included crew expenses of $2.8 million, corresponding to 58% of total operating expenses, spares and consumables costs of $1.0 million, corresponding to 21%, and maintenance expenses of $0.4 million, representing works and repairs on the vessels, corresponding to 8% of total vessel operating expenses. |
| • | Depreciation for the twelve months ended December 31, 2023 was $4.1 million, a $3.5 million increase from $0.6 million for the same period of last year, due to the increase in the average number of our vessels. |
| • | Management fees for the three months ended December 31, 2023 were $0.4 million, a $0.3 million increase from $0.1 million for the same period of last year, due to the increase in the calendar days of our fleet during the current period. |
| • | General and Administrative costs for the twelve months ended December 31, 2023 were $1.2 million and mainly related to the portion of general and administrative expenses incurred by Imperial Petroleum, the former Parent of C3is Inc., prior to our separation from Imperial Petroleum that were allocated to C3is Inc., as well as to expenses incurred as a result of operating as a separate public company. General and Administrative costs for the period ended December 31, 2022 were $0.1 million. |
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| • | Interest and finance costs for the twelve months ended December 31, 2023 were $1.4 million and mainly related to the accrued interest expense – related party, as of December 31, 2023 in connection with the $38.7 million which is part of the acquisition price of our Aframax tanker Afrapearl II that is payable by July 2024. |
| • | As a result of the above, for the twelve months ended December 31, 2023, the Company reported a net income of $9.3 million. |
| • | EBITDA for the twelve months ended December 31, 2023 amounted to $14.7 million. |
| • | An average of 2.5 vessels were owned by the Company during the twelve months ended December 31, 2023. |
Reverse Stock Split
We expect to effect a reverse stock split, with the exact ratio and effective date to be determined by our Board of Directors and announced in the near term.
Forward-Looking Statements
Matters discussed in this report may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, including our intention to effect a reverse stock split, the exact ratio and timing of such reverse stock split and our ability to regain compliance with Nasdaq continued listing requirements, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although C3IS INC. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, C3IS INC. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include risks discussed in our filings with the SEC and the following: the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydockings, shipyard performance, changes in C3IS INC’s operating expenses, including bunker prices, drydocking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, the conflict in Ukraine and related sanctions, the conflict in Israel and Gaza, potential disruption of shipping routes due to ongoing attacks by Houthis in the Red Sea and Gulf of Aden or accidents and political events or acts by terrorists.
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Fleet Data:
The following key indicators highlight the Company’s operating performance during the periods ended December 31, 2022 and December 31, 2023.
| FLEET DATA |
Q4 2022 | Q4 2023 | July 25, 2022- December 31, 2022 |
12M 2023 | ||||||||||||
| Average number of vessels (1) |
1.79 | 3.00 | 1.09 | 2.47 | ||||||||||||
| Period end number of owned vessels in fleet |
2 | 3 | 2 | 3 | ||||||||||||
| Total calendar days for fleet (2) |
165 | 276 | 174 | 901 | ||||||||||||
| Total voyage days for fleet (3) |
127 | 276 | 136 | 900 | ||||||||||||
| Fleet utilization (4) |
77.0 | % | 100.0 | % | 78.2 | % | 99.9 | % | ||||||||
| Total charter days for fleet (5) |
122 | 174 | 131 | 680 | ||||||||||||
| Total spot market days for fleet (6) |
5 | 102 | 5 | 220 | ||||||||||||
| Fleet operational utilization (7) |
73.9 | % | 87.0 | % | 75.3 | % | 91.6 | % | ||||||||
1) Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.
2) Total calendar days for fleet are the total days the vessels we operated were in our possession for the relevant period including off-hire days associated with repairs, drydockings or special or intermediate surveys.
3) Total voyage days for fleet reflect the total days the vessels we operated were in our possession for the relevant period net of off-hire days associated with repairs, drydockings or special or intermediate surveys.
4) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.
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5) Total charter days for fleet are the number of voyage days the vessels operated on time or bareboat charters for the relevant period.
6) Total spot market charter days for fleet are the number of voyage days the vessels operated on spot market charters for the relevant period.
7) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days excluding commercially idle days by fleet calendar days for the relevant period.
Reconciliation of EBITDA:
EBITDA represents net income before interest and finance costs, interest income and depreciation. EBITDA is not a recognized measurement under U.S. GAAP. Our
calculation of EBITDA may not be comparable to that reported by other companies in the shipping or other industries.
EBITDA is included herein because it is a basis, upon which we and our investors assess our financial performance. It allows us to present our performance from period to period on a comparable basis and provides investors with a means of better evaluating and understanding our operating performance.
| (Expressed in United States Dollars, except number of shares) |
||||||||||||||||
| Q4 2022 | Q4 2023 | July 25, 2022- December 31, 2022 |
12M 2023 | |||||||||||||
| Net income - EBITDA |
||||||||||||||||
| Net income |
523,091 | 5,572,743 | 551,586 | 9,291,912 | ||||||||||||
| Plus interest and finance costs |
116 | 746,820 | 116 | 1,367,831 | ||||||||||||
| Less interest income |
— | (36,107 | ) | — | (36,107 | ) | ||||||||||
| Plus depreciation |
524,595 | 1,382,295 | 557,974 | 4,104,720 | ||||||||||||
| EBITDA |
1,047,802 | 7,665,751 | 1,109,676 | 14,728,356 | ||||||||||||
Reconciliation of TCE:
Time Charter Equivalent rate or “TCE” rate is determined by dividing voyage revenue net of voyage expenses by voyage days for the relevant time period. TCE is a non-GAAP measure which provides additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure to Time charter equivalent revenues assisting the Company’s management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. TCE is also a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot charters or time charters, but not bareboat charters) under which the vessels may be employed between the periods.
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| (Expressed in thousands of U.S. Dollars except for available days and Time charter equivalent rate) |
Q4 2022 | Q4 2023 | July 25, 2022- December 31, 2022 |
12M 2023 | ||||||||||||
| Voyage Revenues |
3,075,935 | 13,776,777 | 3,287,101 | 28,738,982 | ||||||||||||
| Voyage expenses |
434,262 | 4,376,135 | 497,672 | 7,631,395 | ||||||||||||
| Time charter equivalent revenues |
2,641,673 | 9,400,642 | 2,789,429 | 21,107,587 | ||||||||||||
| Total voyage days for fleet |
127 | 276 | 136 | 900 | ||||||||||||
| Time charter equivalent rate |
20,801 | 34,060 | 20,511 | 23,453 | ||||||||||||
C3is Inc.
Unaudited Consolidated Statements of Income
(Expressed in United States Dollars, except for number of shares)
| Q4 2022 | Q4 2023 | July 25, 2022 - December 31, 2022 |
12M 2023 | |||||||||||||
| Revenues |
||||||||||||||||
| Revenues |
3,075,935 | 13,776,777 | 3,287,101 | 28,738,982 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
3,075,935 | 13,776,777 | 3,287,101 | 28,738,982 | ||||||||||||
|
|
|
|
|
|
|
|
|
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| Expenses |
||||||||||||||||
| Voyage expenses |
396,069 | 4,205,883 | 456,839 | 7,291,129 | ||||||||||||
| Voyage expenses – related party |
38,193 | 170,252 | 40,833 | 340,266 | ||||||||||||
| Vessels’ operating expenses |
812,368 | 1,435,276 | 889,272 | 4,716,536 | ||||||||||||
| Vessels’ operating expenses – related party |
7,000 | 27,500 | 7,000 | 79,250 | ||||||||||||
| Drydocking costs |
584,355 | (1,297 | ) | 584,355 | 183,090 | |||||||||||
| Management fees |
73,040 | 121,440 | 77,440 | 396,000 | ||||||||||||
| General and administrative expenses |
— | 232,438 | — | 679,156 | ||||||||||||
| General and administrative expenses – related parties |
116,749 | 111,572 | 121,327 | 520,874 | ||||||||||||
| Depreciation |
524,595 | 1,382,295 | 557,974 | 4,104,720 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total expenses |
2,552,369 | 7,685,359 | 2,735,040 | 18,311,021 | ||||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
523,566 | 6,091,418 | 552,061 | 10,427,961 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other (expenses)/income |
||||||||||||||||
| Interest and finance costs |
(116 | ) | (3,180 | ) | (116 | ) | (4,471 | ) | ||||||||
| Interest and finance costs – related party |
— | (743,640 | ) | — | (1,363,360 | ) | ||||||||||
| Interest income |
— | 36,107 | — | 36,107 | ||||||||||||
| Foreign exchange (loss)/gain |
(359 | ) | 192,038 | (359 | ) | 195,675 | ||||||||||
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|
|
|
|
|
|
|
|
|||||||||
| Other expenses, net |
(475 | ) | (518,675 | ) | (475 | ) | (1,136,049 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income |
523,091 | 5,572,743 | 551,586 | 9,291,912 | ||||||||||||
|
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|
|
|
|
|
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| Earnings per share1* |
|
|||||||||||||||
| - Basic |
0.16 | 0.64 | 0.17 | 1.57 | ||||||||||||
| - Diluted |
0.07 | 0.25 | 0.07 | 0.63 | ||||||||||||
| Weighted average number of shares |
|
|||||||||||||||
| - Basic |
3,182,681 | 7,947,681 | 3,182,681 | 5,421,821 | ||||||||||||
| - Diluted |
7,468,395 | 22,233,395 | 7,468,395 | 14,611,645 | ||||||||||||
C3is Inc.
Unaudited Consolidated Balance Sheets
(Expressed in United States Dollars)
| December 31, | December 31, | |||||||
| 2022 | 2023 | |||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
— | 695,288 | ||||||
| Time deposits |
— | 8,368,417 | ||||||
| Due from related parties |
146,708 | — | ||||||
| Trade and other receivables |
674,827 | 10,443,497 | ||||||
| Other current assets |
— | 33,846 | ||||||
| Inventories |
165,645 | 689,269 | ||||||
| Advances and prepayments |
36,340 | 80,267 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,023,520 | 20,310,584 | ||||||
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|
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|
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| Non current assets |
||||||||
| Vessels, net |
38,836,151 | 75,161,431 | ||||||
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|
|
|
|||||
| Total non current assets |
38,836,151 | 75,161,431 | ||||||
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|
|
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| Total assets |
39,859,671 | 95,472,015 | ||||||
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|
|||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current liabilities |
||||||||
| Trade accounts payable |
792,142 | 547,017 | ||||||
| Payable to related parties |
— | 38,531,016 | ||||||
| Accrued and other liabilities |
173,324 | 634,297 | ||||||
| Deferred income |
— | 215,836 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
965,466 | 39,928,166 | ||||||
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|
|
|
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| Total liabilities |
965,466 | 39,928,166 | ||||||
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|
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| Commitments and contingencies |
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| 1 | The computation of earnings per share gives retroactive effect to the shares issued in connection with the spin-off of our company from Imperial Petroleum Inc. in June 2023. |
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| Stockholders’ equity |
||||||||
| Former Parent Company investment |
38,894,205 | — | ||||||
| Capital stock |
— | 87,424 | ||||||
| Preferred stock, Series A |
— | 6,000 | ||||||
| Additional paid-in capital |
— | 47,104,506 | ||||||
| Retained earnings |
— | 8,345,919 | ||||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
38,894,205 | 55,543,849 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
39,859,671 | 95,472,015 | ||||||
|
|
|
|
|
C3is Inc.
Unaudited Consolidated Statements of Cash Flows
(Expressed in United States Dollars)
| July 25, 2022 - December 31, 2022 |
12M 2023 | |||||||
| Cash flows from operating activities |
||||||||
| Net income for the period/year |
551,586 | 9,291,912 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation |
557,974 | 4,104,720 | ||||||
| Share based compensation |
— | 37,638 | ||||||
| Unrealized foreign exchange gain on time deposits |
— | (241,967 | ) | |||||
| Changes in operating assets and liabilities: (Increase)/decrease in |
||||||||
| Trade and other receivables |
(674,827 | ) | (9,768,670 | ) | ||||
| Due from related party |
(146,708 | ) | 146,708 | |||||
| Other current assets |
— | (33,846 | ) | |||||
| Inventories |
(165,645 | ) | (523,624 | ) | ||||
| Advances and prepayments |
(36,340 | ) | (43,927 | ) | ||||
| Increase/(decrease) in |
||||||||
| Trade accounts payable |
792,142 | (245,125 | ) | |||||
| Payable to related parties |
— | 2,238,516 | ||||||
| Accrued liabilities |
173,324 | 460,973 | ||||||
| Deferred income |
— | 215,836 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
1,051,506 | 5,639,144 | ||||||
|
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|
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|
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| Cash flows from investing activities |
||||||||
| Acquisition and improvement of vessels |
(39,394,125 | ) | (4,300,000 | ) | ||||
| Purchase of bank time deposits |
— | (8,126,450 | ) | |||||
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|
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|
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| Net cash used in investing activities |
(39,394,125 | ) | (12,426,450 | ) | ||||
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|
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| Cash flows from financing activities |
||||||||
| Net transfers from former Parent Company |
38,342,619 | 3,305,083 | ||||||
| Proceeds from follow-on offering |
— | 5,003,250 | ||||||
| Stock issuance costs |
— | (584,072 | ) | |||||
| Dividends paid on preferred shares |
— | (241,667 | ) | |||||
|
|
|
|
|
|||||
| Net cash provided by financing activities |
38,342,619 | 7,482,594 | ||||||
|
|
|
|
|
|||||
| Net increase in cash and cash equivalents |
— | 695,288 | ||||||
| Cash and cash equivalents at beginning of period/year |
— | — | ||||||
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|
|
|
|
|||||
| Cash and cash equivalents at end of period/year |
— | 695,288 | ||||||
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|
|
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|
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| Supplemental Cash Flow Information |
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| Non-cash Investing and Financing Activities |
||||||||
| Vessel acquisition included in payable to related parties |
— | 36,130,000 | ||||||
| Dividends on preferred shares Series A included in payable to related parties |
— | 162,500 |
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