CISS C3is Inc

C3is Inc. (Nasdaq: CISS) (the “Company”), a ship-owning company providing drybulk seaborne transportation services, and from the third quarter of 2023, tanker transportation services, announced today its unaudited financial and operating results for the fourth quarter and twelve months ended December 31, 2023.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

• Following the acquisition of the Aframax tanker, Afrapearl II (ex. Stealth Berana), in July 2023 the total fleet capacity increased to 179,800 dwt.
• Our two handysize dry bulk carriers are currently on short term fixed rate time charters with steady cash flows, while our Aframax tanker operates in the spot market where voyage charter rates for Aframax tankers are in excess of $40,000 per day.
• Both our handysize dry bulk carriers, and our Aframax tanker are unencumbered.
• Fleet operational utilization of 91.6% for the twelve months ended December 31, 2023, as our vessels were mainly under time charter employment.
• Voyage revenues of $28.7 million for the twelve months ended December 31, 2023, corresponding to a daily TCE1 of $23,453.
• 22.1% increase in daily TCE to $34,060 per day for the three months ended December 31, 2023, as compared to the daily TCE of $27,903 per day for the three months ended September 30, 2023.
• Our Company generated a net income of $9.3 million for the twelve months ended December 31, 2023, and a net income of $5.6 million for the three months ended December 31, 2023.
• 69.7% increase in Net Income to $5.6 million for the three months ended December 31, 2023, from $3.3 million for the three months ended September 30, 2023.
• 45.3% increase in EBITDA2 to $7.7 million for the three months ended December 31, 2023, from $5.3 million for the three months ended September 30, 2023.
• 140% increase in Total Assets as of December 31, 2023 compared to December 31, 2022.
• During the first quarter of 2024, we concluded two follow-on equity offerings, generating aggregate gross proceeds of $13.0 million which increased our current cash balance to approximately $35.6 million.
• Based on the current fleet market value, our Company’s net asset value is estimated at $50.45 million3, or $0.31 per share, which represents approximately 10.3x our current market capitalization.
• Diluted EPS for the fourth quarter of 2023 was $0.25, which is 733% higher than the Company’s stock price as of March 22, 2024.
• Our Board of Directors has decided to effect a reverse stock split, with the exact ratio and effective date to be determined and announced in the near term, which is expected to enable our Company to regain compliance with all Nasdaq continuous listing criteria.

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.
• 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.

• 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.

CEO Dr. Diamantis Andriotis commented:

Since our Company’s listing in late June 2023 and following the acquisition of our Aframax, the first step of our growth strategy, our expanded and diversified fleet has enabled our Company to enjoy solid financial performance. Indicatively, during the fourth quarter of 2023, we achieved a fleetwide time charter equivalent rate of $34,060 per day. As a result, during the fourth quarter of 2023, we generated revenues of $13.8 million and a net income of $5.6 million, representing increases of 36% and 67% respectively from the previous quarter.

The revenue generation of $23.9 million, achieved during the second half of 2023, since our Company’s spin-off from its parent company, represents approximately 83% of the full year’s revenue. We believe that this is indicative of our ability to efficiently operate our fleet and capitalize on the sustainable freight rate environment. Specifically, our two handysize bulk carriers which are mainly employed under short-term time charter contracts, are currently earning charter rates ranging from $13,000 to $14,000 per day. The earnings raised from our two handysize dry bulk carriers are enhanced through the operation of our Aframax tanker in the spot market. The vessel is currently capturing the prevailing robust Aframax spot rates which stand in excess of $40,000 per day, a level that is in line with the time charter equivalent rate achieved by our tanker during the last quarter. Our diversified fleet and deployment in the spot market enables our Company to take advantage of the promising charter rate environment and is expected to generate strong cash flow going forward.

We believe that our capital structure comprising of no bank debt and a strong cash balance, currently standing at $35.6 million, will further enhance our Company’s ability to fund selective vessel acquisitions following payment of the remaining purchase price for our Aframax tanker. 

Conference Call details:

On March 26, 2024, at 11:00 am ET, the company’s management will host a conference call to present the results and the company’s operations and outlook.

Slides and audio webcast:

There will also be a live and then archived webcast of the conference call, through C3is Inc. website (www.c3is.pro). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

ABOUT C3IS INC.C3is Inc. is a ship-owning company providing drybulk and crude oil seaborne transportation services. The Company owns three vessels, two Handysize drybulk carriers with a total capacity of 64,000 deadweight tons (dwt) and an Aframax oil tanker with a cargo carrying capacity of approximately 115,800 dwt, resulting with a fleet total capacity of 179,800. C3is Inc.’s shares of common stock are listed on the Nasdaq Capital Market and trade under the symbols “CISS”.

Forward-Looking StatementsMatters discussed in this release 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.

Company Contact:

Nina PyndiahChief Financial Officer

C3is INC.00-30-210-6250-001E-mail: info@c3is.pro

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.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.

(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)

				July 25, 2022 - December 31,
		Q4 2022	Q4 2023	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
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
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
Other expenses, net		(475)	(518,675)	(475)	(1,136,049)
Net Income		523,091	5,572,743	551,586	9,291,912
Earnings per share4*
	- 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
Non current assets
	Vessels, net				38,836,151		75,161,431
Total non current assets					38,836,151		75,161,431
Total assets					39,859,671		95,472,015
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
Total liabilities					965,466		39,928,166
Commitments and contingencies
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
Cash flows from investing activities
	Acquisition and improvement of vessels						(39,394,125)		(4,300,000)
	Purchase of bank time deposits						--		(8,126,450)
Net cash used in investing activities							(39,394,125)		(12,426,450)
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							--		--
Cash and cash equivalents at end of period/year							--		695,288

Supplemental Cash Flow InformationNon-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

1 TCE is a non-GAAP measure. Refer to the reconciliation of this measure to the most directly comparable financial measure in accordance with GAAP set forth later in this release.2 EBITDA is a non-GAAP measure. Refer to the reconciliation of this measure to the most directly comparable financial measure in accordance with GAAP set forth later in this release.3 Net asset value (or NAV) is based on estimates of the market value of the vessels in the fleet of $68.5 million, total cash of $35.6 million, less the liquidation preference of the Series A Convertible Preferred Shares of $15 million and the financial liability of $38.7 million payable to Imperial Petroleum Inc and due in July 2024 The estimated NAV represents a snapshot in time, will likely change, and does not represent the amount a stockholder would receive now or in the future for his or her shares of the Company’s common stock and is based on assumptions and estimates that are susceptible to uncertainty and subject to circumstances and market conditions. Net Asset Value is a non-GAAP measure and calculation methodologies may vary across industries and companies.4 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.