C3is (US:CISS)2025-08-29 10:05Company Overview - C3is Inc. was incorporated on July 25, 2022, and commenced operations after the Spin-Off on June 21, 2023, receiving $5 million in cash for working capital [348]. - The company was incorporated on July 25, 2022, and completed a Spin-Off from Imperial Petroleum on June 21, 2023, receiving $5 million in cash as working capital [22]. - The company has no salaried employees, with management services provided under a management agreement with Brave Maritime [487]. Fleet and Operations - The fleet consists of three drybulk carriers and one Aframax tanker, with a total cargo carrying capacity of 213,468 dwt [351]. - In July 2023, C3is Inc. acquired an Aframax tanker for $43 million and plans to acquire a third handysize drybulk carrier for $16.19 million, with 10% paid in Q2 2024 and the remaining 90% due in April 2025 [349]. - Average number of vessels increased from 1.09 in 2022 to 3.6 in 2024, with total voyage days rising from 136 to 1,327 during the same period [363]. - Fleet utilization was 99.9% in 2023 and 99.5% in 2024, indicating high operational efficiency [363]. - Total voyage days for the fleet increased to 900 in 2023 from 136 in 2022, reflecting a substantial growth in operational capacity [365]. - The average number of vessels in the fleet increased to 3.6 for the year ended December 31, 2024, compared to 2.5 for the year ended December 31, 2023 [392]. - Total calendar days for the fleet were 1,334 days for the year ended December 31, 2024, compared to 901 days for the same period in 2023 [394]. Financial Performance - Total voyage revenues for 2023 reached $28.74 million, up from $3.29 million in 2022, representing a significant increase [365]. - Voyage revenues for the year ended December 31, 2024 amounted to $42.3 million, an increase of $13.6 million compared to $28.7 million for the year ended December 31, 2023 [393]. - Voyage expenses for 2023 amounted to $7.63 million, a significant rise from $497,672 in 2022, highlighting increased operational costs [365]. - Voyage expenses for the year ended December 31, 2024 were $14.1 million, an increase of $6.5 million from $7.6 million for the year ended December 31, 2023 [395]. - A net loss of $2.7 million was reported for the year ended December 31, 2024, compared to a net income of $9.3 million for the year ended December 31, 2023 [403]. - Net cash provided by operating activities increased to $25.0 million for the year ended December 31, 2024, up from $5.6 million in 2023 [435]. - The company had a working capital deficit of $2.4 million as of December 31, 2024 [432]. Operating Costs - The adjusted average charter rate was $23,453 per day in 2023, slightly decreasing to $21,233 in 2024 [363]. - Vessel operating expenses increased from $5,151 per day in 2022 to $6,277 in 2024, reflecting rising operational costs [363]. - Voyage expenses totaled $0.7 million from January 1, 2022 to October 18, 2022, with commissions to third parties accounting for 85.7% of total voyage expenses [419]. - Vessel operating expenses were $2.4 million for the same period, while dry docking costs amounted to $0.8 million [420]. - Vessels' operating expenses for the year ended December 31, 2024 were $8.4 million, compared to $4.8 million for the year ended December 31, 2023 [396]. - General and administrative expenses for 2023 were approximately $0.3 million, with expectations of $0.4 million in 2024, reflecting ongoing operational costs [372]. - General and administrative costs for the year ended December 31, 2024 were $3.0 million, compared to $1.2 million for the year ended December 31, 2023 [398]. Market Conditions - The Baltic Dry Index (BDI) fluctuated significantly, ranging from a low of 530 in February 2023 to a high of 3,346 in December 2023 [358]. - The drybulk fleet size in deadweight tons grew by approximately 3.1% in 2023, while tonne-mile demand increased by 4.8%, yet the Baltic Dry Index (BDI) value declined by 28% compared to 2022 levels [452]. - The BDI experienced significant volatility in 2022, ranging from a low of 965 to a high of 3,369, and in 2023, it ranged from 530 to 3,346, indicating ongoing market instability [453]. - Average handysize drybulk carrier spot rates in 2023 ranged from a low of $7,000 per day to a high of $18,250 per day, with an average of $13,667 per day as of March 1, 2024 [453]. - Crude oil trade increased by 8.8% to 318.4 million deadweight tons (dwt) in 2022 and further increased by 5.2% to 335.0 million dwt in 2023, reflecting a recovery in demand [459]. - The ongoing war in Ukraine has led to increased economic uncertainty, affecting fuel and grain prices, which may impact charter rates and operating expenses [454]. - The tanker industry remains cyclical and volatile, with geopolitical events significantly influencing demand for seaborne transportation of crude oil and oil products [456]. Future Outlook - C3is Inc. plans to evaluate vessel purchase opportunities to expand its fleet and may consider selling vessels when favorable opportunities arise [357]. - Key factors affecting future financial results include global economic conditions, competition in the marine transportation industry, and potential disruptions in shipping routes [27]. - The company expects to incur a financial liability of $14.57 million related to the purchase of the Eco Spitfire, which will impact future financial performance [379]. Compensation and Governance - The aggregate cash compensation for the company's officers in 2023 and 2024 was $0.3 million and $0.4 million, respectively, with an expected cash compensation of approximately $0.4 million in 2025 [474]. - Non-cash stock-based compensation expense recognized was $0.04 million in 2023 and $0.3 million in 2024, with unrecognized non-cash stock-based compensation expense of $0.5 million as of December 31, 2024 [475]. - The company granted an aggregate of 514 restricted shares of common stock to the Non-Executive Chairman and 16 restricted shares to the Chief Financial Officer on November 6, 2023, with vesting conditions over two years [492]. - The Audit Committee consists of two independent members, which is compliant with the rules for foreign private issuers under the Nasdaq Capital Market [481]. - The company has adopted an equity compensation plan that allows for awards totaling up to 10% of the number of common shares outstanding at the time of grant [491]. Stock and Shareholder Information - The company executed a 1-for-100 reverse stock split on April 11, 2024, followed by a 1-for-2.5 reverse split on December 31, 2024, and a 1-for-6 reverse split on April 3, 2025 [23].