C3is Inc. Announces Reverse Stock Split

Rhea-AI Summary

C3is Inc. (CISS) has announced a 1-for-2.5 reverse stock split effective January 2, 2025, aimed at maintaining Nasdaq listing requirements. The split will reduce outstanding common shares from approximately 10.6 million to 4.2 million, with trading on a split-adjusted basis beginning January 2, 2025.

The company's warrants and Series A Convertible Preferred Stock will be adjusted proportionately. Class B and C Warrants will undergo additional adjustments within five trading days post-split. Stockholders who would receive fractional shares will receive cash payments based on the December 31, 2024 closing price. The split's primary purpose is to increase the market price to meet Nasdaq's minimum bid price requirement.

Positive

• Potential maintenance of Nasdaq listing status through meeting minimum bid requirements
• Structured solution for fractional shares through cash payments

Negative

• Reverse stock split indicates struggle to maintain minimum share price requirements
• Reduction in total outstanding shares from 10.6M to 4.2M without fundamental value change
• Additional complexity and adjustments required for warrant holders

Insights

Financial Restructuring Specialist

This reverse stock split represents a critical financial maneuver for C3is Inc., reducing outstanding shares from 10.6 million to approximately 4.2 million through a 1-for-2.5 ratio. The timing, scheduled for December 31, 2024, suggests urgency in meeting Nasdaq's minimum bid price requirements to maintain listing status. While reverse splits don't inherently change company value, they often signal financial distress.

The market mechanics are particularly noteworthy - the adjustment of warrants and Series A Convertible Preferred Stock could create short-term trading volatility, especially during the 5-day adjustment period for Class B and C Warrants. The cash settlement for fractional shares based on December 31's closing price might trigger minor selling pressure. Given the company's micro-cap status ($7.5M), this restructuring appears defensive rather than strategic, primarily aimed at regulatory compliance rather than growth initiatives.

Market Compliance Expert

The regulatory implications here are substantial. This move is clearly designed to address Nasdaq's continued listing requirements, specifically the minimum bid price threshold. For micro-cap companies like C3is, maintaining Nasdaq listing is important for market visibility and liquidity. However, the chosen 1-for-2.5 ratio is unusually precise, suggesting minimal cushioning against future price decline.

The stockholder-approved range and three-year post-spin-out timing indicate careful compliance planning, but also reveal the company's options. Historical patterns show that companies implementing reverse splits often face continued market challenges - approximately 70% of stocks trade lower within a year of a reverse split. This mechanical price adjustment doesn't address underlying business fundamentals or market perception issues.

To be effective January 2, 2025

Aiming to meet the minimum bid price requirement for maintaining listing on Nasdaq

ATHENS, Greece, Dec. 30, 2024 (GLOBE NEWSWIRE) -- C3is Inc. (the “Company”) (Nasdaq: CISS) today announced that its board of directors has determined to effect a one-for-two-and-a-half (1-for-2.5) reverse stock split of the Company’s common stock, par value $0.01 per share.

The reverse stock split will take effect at 11:59 pm Eastern Time on December 31, 2024, and the Company’s common stock will begin trading on a split-adjusted basis on The Nasdaq Capital Market (“Nasdaq”) as of the opening of trading on January 2, 2025. The CUSIP number of Y18284 151 will be assigned to the Company’s common stock when the reverse stock split becomes effective.

When the reverse stock split becomes effective, every two and one-half (2.5) of the Company’s issued shares of common stock will be combined into one issued share of common stock, without any change to the par value per share. This will reduce the number of outstanding shares of common stock from approximately 10.6 million shares to approximately 4.2 million shares. The Company’s outstanding warrants and Series A Convertible Preferred Stock will be proportionately adjusted to increase the exercise price and reduce the number of shares issuable upon exercise. With respect to the Company’s Class B Warrants and Class C Warrants, the exercise price and number of shares issuable upon exercise will be adjusted further in an adjustment period ending on the fifth trading day after the effective time of the reverse split pursuant to the terms of such warrants.

No fractional shares will be issued in connection with the reverse stock split. Stockholders who would otherwise hold a fraction of a share of common stock of the Company will receive a cash payment in lieu thereof at a price equal to that fraction of a share to which the stockholder would otherwise be entitled, multiplied by the closing price of the Company’s common stock on Nasdaq on December 31, 2024 (as adjusted for the reverse split).

Stockholders with shares held in book-entry form or through a bank, broker, or other nominee are not required to take any action and will see the consequence of the reverse stock split reflected in their accounts on or after January 2, 2025. Such beneficial holders may contact their bank, broker, or nominee for more information.

The reverse stock split ratio approved by the board of directors is within the, previously disclosed, range of ratios for a reverse stock split authorized by the stockholders of the Company, within three years of the spin-out of the Company.

The purpose of the reverse stock split is to increase the market price of the Company’s common stock. The Company believes that the reverse stock split will increase the market price for its common stock and allow it to satisfy the minimum bid price requirement for maintaining listing on Nasdaq.

Forward-Looking Statements

Matters discussed in this release may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements with respect to the C3is Inc.’s ability to maintain compliance with Nasdaq’s continued listing standards and remain listed on Nasdaq or other major stock exchange and other statements that are forward looking. 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 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. 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 U.S. Securities and Exchange Commission (the “SEC”) and the following: the strength of world economies and currencies, global 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, drydocking and insurance costs, ability to fund the remaining purchase price for one of our drybulk vessels, ability to obtain financing and comply with covenants in our financing arrangements, 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.

Risks and uncertainties are further described in reports filed by C3is Inc. with the SEC.

ABOUT C3IS INC.

C3is Inc. is a ship-owning company providing dry bulk and crude oil seaborne transportation services. The Company owns four vessels, three handysize drybulk carriers with a total capacity of 97,664 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 213,464 dwt. C3is Inc.’s shares of Common Stock are listed on the Nasdaq Capital Market and trade under the symbol “CISS.”

For further information, please contact:

Company Contact:

Nina Pyndiah
Chief Financial Officer
C3is Inc.
00-30-210-6250-001
E-mail: info@c3is.pro

FAQ

What is the ratio of C3is Inc. (CISS) reverse stock split announced in December 2024?

C3is Inc. announced a 1-for-2.5 reverse stock split, meaning every 2.5 shares will be combined into one share.

When will CISS reverse stock split take effect?

The reverse stock split will take effect at 11:59 pm Eastern Time on December 31, 2024, with split-adjusted trading beginning January 2, 2025.

How many shares will CISS have outstanding after the reverse split?

After the reverse split, CISS will reduce its outstanding shares from approximately 10.6 million to 4.2 million shares.

What happens to fractional shares in the CISS reverse stock split?

Stockholders who would receive fractional shares will receive cash payments based on the closing price of CISS stock on December 31, 2024.

How will the CISS reverse split affect existing warrants?

The warrants will be proportionately adjusted to increase exercise price and reduce issuable shares, with Class B and C Warrants having additional adjustments within five trading days post-split.