C3is Inc. (Nasdaq: CISS) (the “Company”), a ship-owning company providing dry bulk seaborne transportation services, and from Q3 2023, tanker transportation services, announced today its unaudited financial and operating results for the third quarter and nine months ended September 30, 2023. These financial results were based on the accounts of C3is Inc. and its wholly owned subsidiaries, which were prepared as if the subsidiaries owning dry bulk vessels were consolidated subsidiaries of C3is for the entire periods presented, since the date the vessels were acquired by these subsidiaries, and using the historical carrying costs of the assets and the liabilities of these subsidiaries.

OPERATIONAL AND FINANCIAL HIGHLIGHTS

  • Our two handysize dry bulk carriers currently operate under short-term time charter contracts, earning gross charter rates ranging from $20,000 to $26,000 per day.
  • Our Aframax oil tanker operates in the spot market, where voyage charter rates for Aframax tankers currently are in excess of $65,000 per day. Fleet operational utilization of 98.5% for the three months ended September 30, 2023, as our vessels were mainly under time charter employment.
  • Voyage revenues of $10.1 million for the three months ended September 30, 2023, corresponding to a daily TCEi of $27,903.
  • 378% increase in Net Revenues and 1,637% increase in EBITDA from the second quarter of 2023.
  • Net Income of $3.3 million for the three months ended September 30, 2023.
  • 1,018% increase in Net Income from the second quarter of 2023.
  • Earnings per share, basic and diluted, for the third quarter of 2023 were $0.43 and $0.15, respectively.
  • Cash & cash equivalents of $8.9 million as of the end of the third quarter of 2023, reflecting $5.4 million and $3.7 million of net cash provided by operating activities during the nine months and the three months ended September 30, 2023, respectively. Both handysize dry bulk carriers and our newly acquired Aframax oil tanker are currently unencumbered.
  • Financial liability of $38.7 million related to the acquisition of our Aframax tanker and due in July 2024, expected to be financed with cash on hand, net cash from operations and proceeds from equity offerings.

Third Quarter 2023 Results:

  • Voyage revenues for the three months ended September 30, 2023 amounted to $10.1 million, an increase of $9.9 million compared to revenues of $0.2 million for the period from July 25, 2022 (inception of C3is Inc.) to September 30, 2022, primarily due to the increase in the average number of our vessels. Total calendar days for our fleet were 263 days for the three months ended September 30, 2023. Of the total calendar days in the third quarter of 2023, 180, or 68.4%, were time charter days. Our fleet operational utilization was 98.5% for this period.
  • Voyage expenses and vessels’ operating expenses for the three months ended September 30, 2023 were $2.8 million and $1.5 million respectively, compared to $0.06 million and $0.08 million respectively, for the period ended September 30, 2022. The increases in both voyage expenses and vessels’ operating expenses are attributed to the increase in the average number of our vessels. Voyage expenses for the three months ended September 30, 2023 included commissions to third parties of $0.4 million, corresponding to 14% of total voyage expenses. Operating expenses for the three months ended September 30, 2023 mainly included crew expenses of $0.8 million, corresponding to 53% of total operating expenses, spares and consumables costs of $0.3 million, corresponding to 20%, and maintenance expenses of $0.13 million, representing works and repairs on the vessels, corresponding to 9% of total vessel operating expenses.
  • Depreciation for the three months ended September 30, 2023 was $1.4 million, a $1.37 million increase from $0.03 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 September 30, 2023 were $0.4 million and mainly related to expenses incurred as a result of operating as a separate public company.             
  • Interest and finance costs for the three months ended September 30, 2023 was $0.6 million and related to the accrued interest expense – related party as of September 30, 2023 in connection with the $38.7 million, part of the acquisition price of our Aframax tanker Afrapearl II which is payable by July 2024.
  • As a result of the above, for the three months ended September 30, 2023, the Company reported a net income of $3.3 million.
  • EBITDAii for the three months ended September 30, 2023 amounted to $5.3 million.
  • An average of 2.9 vessels were owned by the Company during the three months ended September 30, 2023.

Nine months 2023 Results:

  • Voyage revenues for the nine months ended September 30, 2023 amounted to $15.0 million, an increase of $14.8 million compared to revenues of $0.2 million for the period from July 25, 2022 to September 30, 2022, primarily due to the increase in the average number of our vessels. Total calendar days for our fleet were 625 days for the nine months ended September 30, 2023. Of the total calendar days in the first nine months of 2023, 506 or 81.0%, were time charter days. Our fleet operational utilization was 93.6% for this period.
  • Voyage expenses and vessels’ operating expenses for the nine months ended September 30, 2023 were $3.3 million and $3.3 million respectively, compared to $0.06 million and $0.08 million respectively, for the period ended September 30, 2022. The increases in both voyage expenses and vessels’ operating expenses are attributed to the increase in the average number of our vessels. Voyage expenses for the nine months ended September 30, 2023 mainly included bunker costs of $1.3 million, corresponding to 39% of total voyage expenses, and commissions to third parties of $0.7 million, corresponding to 21% of total voyage expenses. Operating expenses for the nine months ended September 30, 2023 mainly included crew expenses of $1.9 million, corresponding to 58% of total operating expenses, spares and consumables costs of $0.7 million, corresponding to 21%, and maintenance expenses of $0.3 million, representing works and repairs on the vessels, corresponding to 9% of total vessel operating expenses.
  • Depreciation for the nine months ended September 30, 2023 was $2.7 million, a $2.67 million increase from $0.03 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 nine months ended September 30, 2023 were $0.9 million and mainly related to the portion of general and administrative expenses incurred by Imperial Petroleum, the former Parent of C3is Inc., that were allocated to C3is Inc., as well as to expenses incurred as a result of operating as a separate public company.
  • Interest and finance costs for the nine months ended September 30, 2023 was $0.6 million and related to the accrued interest expense – related party, as of September 30, 2023 in connection with the $38.7 million, part of the acquisition price of our Aframax tanker Afrapearl II which is payable by July 2024.
  • As a result of the above, for the nine months ended September 30, 2023, the Company reported a net income of $3.7 million.
  • EBITDA for the nine months ended September 30, 2023 amounted to $7.1 million.
  • An average of 2.3 vessels were owned by the Company during the nine months ended September 30, 2023.

CEO Dr. Diamantis Andriotis commented:

"We are very pleased to announce that, even though we have been operating as a newly listed entity for a short period of approximately 4 months following our spin-off from Imperial Petroleum Inc. in late June 2023, we have managed to grow our fleet and achieved a remarkable financial performance. Specifically, during the third quarter of 2023, we generated record revenues of $10.1 million and a record net income of $3.3 million, representing increases of 493% and 1,018% respectively, from the previous quarter.

Going forward, we strongly believe that the new acquisition of our Aframax oil tanker, which was delivered to us in July 2023, will well position us to capture the firm prevailing tanker market conditions and generate significant cash flow with the efficient operations of our expanded and diversified fleet. Specifically, our two handysize dry bulk carriers currently operate under short-term time charter contracts, earning gross charter rates ranging from $20,000 to $26,000 per day and resulting in a fixed revenue backlog of approximately $2.9 million until December 2023. Our already secured revenues are supplemented by the operation of our Aframax oil tanker in the spot market, where voyage charter rates for Aframax tankers currently stand at very high levels, in excess of $65,000 per day. This employment strategy will enhance our ability to finance our outstanding liability of $38.7 million, related to the acquisition of our tanker and due in July 2024, partially with cash on hand, cash from operating activities and proceeds from equity offerings.

With our Company’s impressive performance, we will continue to pursue growth strategies focused on timely and selective acquisitions of high-quality vessels which we may consider to be in the best interests of our Company and our shareholders."

Conference Call details:

On November 3, 2023, 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 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 dry bulk and crude oil seaborne transportation services. The Company owns three vessels, two handysize dry bulk 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 dwt. C3is Inc.’s shares of common stock are listed on the Nasdaq Capital Market and trade under the symbol “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, or impact or duration of the COVID-19 pandemic 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 impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, 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 dry-dockings, shipyard performance, changes in C3IS INC’s operating expenses, including bunker prices, dry-docking 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, potential disruption of shipping routes due to 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 September 30, 2022 and September 30, 2023.

FLEET DATA July 25, 2022- September 30, 2022 Q3 2023 9M 2023
Average number of vessels (1) 0.13 2.9 2.3
Period end number of owned vessels in fleet 1 3 3
Total calendar days for fleet (2) 9 263 625
Total voyage days for fleet (3) 9 262 624
Fleet utilization (4) 100.0% 99.6% 99.8%
Total charter days for fleet (5) 9 180 506
Total spot market days for fleet (6) 0 82 118
Fleet operational utilization (7) 100.0% 98.5% 93.6%

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 major repairs, dry-dockings 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 major repairs, dry-dockings 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)    
  July 25, 2022- September 30, 2022 Q3 2023 9M 2023
Net income - EBITDA      
Net income 28,495 3,331,044 3,719,169
Plus interest and finance costs -- 620,282 621,011
Plus depreciation 33,379 1,382,297 2,722,425
EBITDA 61,874 5,333,623 7,062,605
       

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)    
July 25, 2022- September 30, 2022 Q3 2023 9M 2023
Voyage Revenues 211,166 10,107,108 14,962,205
Voyage expenses 63,410 2,796,633 3,255,260
Time charter equivalent revenues 147,756 7,310,475 11,706,945
Total voyage days for fleet 9 262 624
Time charter equivalent rate 16,417 27,903 18,761

C3is Inc.Unaudited Consolidated Statements of Income(Expressed in United States Dollars, except for number of shares)

                 
          July 25, 2022- September 30, 2022   Q3 2023     9M 2023
                     
Revenues                  
  Revenues     211,166   10,107,108     14,962,205
                     
Expenses                  
  Voyage expenses     60,770   2,685,556     3,085,246
  Voyage expenses - related party   2,640   111,077     170,014
  Vessels' operating expenses   76,904   1,441,088     3,281,260
  Vessels' operating expenses - related party --   21,750     51,750
  Dry-docking costs     --   10,238     184,387
  Management fees - related party   4,400   115,280     274,560
  General and administrative expenses   4,578   390,753     856,020
  Depreciation        33,379   1,382,297     2,722,425
Total expenses     182,671   6,158,039     10,625,662
                     
Income from operations     28,495   3,949,069     4,336,543
                     
Other (expenses)/income                
  Interest and finance costs   --   (562)     (1,291)
  Interest and finance costs – related party       (619,720)     (619,720)
  Foreign exchange gain     --   2,257     3,637
Other expenses, net     --   (618,025)     (617,374)
                     
Net Income       28,495   3,331,044     3,719,169
                     
Earnings per shareiii                
- Basic      0.01   0.43     0.77
- Diluted     0.00   0.15     0.20
                     
Weighted average number of shares              
- Basic      3,182,932   7,301,475     4,570,866
- Diluted     17,468,646   21,587,190     18,856,580

C3is Inc.Unaudited Consolidated Balance Sheets(Expressed in United States Dollars)

          December 31,   September 30,
          2022   2023
               
Assets            
Current assets          
  Cash and cash equivalents   --   8,949,353
  Due from related parties   146,708   --
  Trade and other receivables   674,827   3,140,918
  Other current assets     --   112,776
  Inventories     165,645   2,061,825
  Advances and prepayments   36,340   18,397
Total current assets     1,023,520   14,283,269
               
Non current assets          
  Vessels, net     38,836,151   76,543,726
Total non current assets     38,836,151   76,543,726
Total assets       39,859,671   90,826,995
               
Liabilities and Stockholders' Equity        
Current liabilities          
  Trade accounts payable   792,142   932,528
  Payable to related parties   --   39,096,635
  Accrued and other liabilities   173,324   544,472
Total current liabilities     965,466   40,573,635
Total liabilities     965,466   40,573,635
               
Commitments and contingencies        
               
Stockholders' equity          
  Former Parent Company investment   38,894,205   --
  Capital stock     --   79,479
  Preferred stock, Series A   --   6,000
  Additional paid-in capital   --   47,031,071
  Retained earnings     --   3,136,810
Total stockholders' equity     38,894,205   50,253,360
Total liabilities and stockholders' equity   39,859,671   90,826,995

C3is Inc.Unaudited Consolidated Statements of Cash Flows(Expressed in United States Dollars)

               
              July 25, 2022-September 30,2022   9M 2023
                   
Cash flows from operating activities            
  Net income for the period       28,495   3,719,169
                   
Adjustments to reconcile net income to net cash          
provided by operating activities:            
  Depreciation            33,379   2,722,425
                   
Changes in operating assets and liabilities:          
  (Increase)/decrease in              
  Trade and other receivables       (461,331)   (2,466,091)
  Other current assets         --   (112,776)
  Inventories         (66,402)   (1,896,180)
  Advances and prepayments       (28,049)   17,943
  Increase/(decrease) in              
  Trade accounts payable       49,596   140,386
  Balances with related parties       252,805   2,900,843
  Accrued liabilities         11,798   371,148
  Deferred income         388,834   -
Net cash provided by operating activities       209,125   5,396,867
                   
Cash flows from investing activities            
  Acquisition and improvement of vessels     (20,709,125)   (4,300,000)
Net cash used in investing activities       (20,709,125)   (4,300,000)
                   
Cash flows from financing activities            
  Net transfers from former Parent Company     20,500,000   3,305,083
  Proceeds from follow-on offering       --   5,003,250
  Stock issuance costs         --   (455,847)
Net cash provided by financing activities       20,500,000   7,852,486
                   
Net increase in cash and cash equivalents     --   8,949,353
Cash and cash equivalents at end of period     --   8,949,353
                   

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       --   212,500

i 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.ii 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.iii The computation of earnings per share gives retroactive effect to the shares issued in connection with the spin-off.

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