CISSV C3is Inc

/s/ Nina Pyndiah

Our handysize dry bulk carriers are on time charters of short term durations, producing steady cash flows, while our Aframax tanker operates in the spot market where voyage charter rates for Aframax tankers are currently around $27,000 per day.

All our handysize dry bulk carriers and our Aframax tanker are unencumbered.

Fleet operational utilization of 87.7% for the three months ended June 30, 2024, mainly due to the commercial idle days of the vessel that operated in the spot market, as our vessels that operated under time charter employment had few commercial idle days.

Revenues of $10.8 million for the three months ended June 30, 2024, corresponding to a daily TCE I of $23,938.

185% increase in daily TCE for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

Net Loss, EBITDA¹ and loss per share, basic, of $11.8 million, loss of $9.7 million and $2.84 respectively, for the three months ended June 30, 2024.

Adjusted net incomeⁱ of $2.9 million for the three months ended June 30, 2024, an increase of 885% compared to the three months ended June 30, 2023.

1,499% increase in Adjusted EBITDAⁱ for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.

44% increase in Total Assets as of June 30, 2024 compared to December 31, 2023.

Adjusted EPS of $0.63 for the second quarter of 2024.

In April 2024, the Company effected a reverse stock split of 1 for 100 of its common shares, aimed at meeting the minimum bid price requirement for maintaining listing on Nasdaq Capital Market, thus all share amounts have been retrospectively restated.

In April 2024, our Company announced an agreement to acquire a 2012-built Japanese handysize drybulk carrier from an affiliated company. Following this vessel acquisition and the delivery of the 33,664 DWT handysize drybulk carrier to our Company in May 2024, the total fleet capacity increased to 213,468 dwt. 10% of the purchase price was paid on delivery, with the remaining 90% ($16.2 million) due in April 2025.

In July 2024, the Company paid off the remaining 90% purchase price on the Aframax oil tanker, amounting to $38.7 million, using cash provided by operations, cash on hand and net proceeds from equity offerings.

The Company recorded a non-cash adjustment of $14.5 million as “Loss on Warrants”, which mainly arose due to the change in the fair value of warrants as at June 30, 2024 as compared to the fair value as of their issuance date during Q1 2024.

TCE, EBITDA, Adjusted EBITDA and Adjusted Net Income are non-GAAP measure. Refer to the reconciliation of these measures to the most directly comparable financial measure in accordance with GAAP set forth later in this release.

Voyage revenues for the three months ended June 30, 2024 amounted to $10.8 million, an increase of $9.1 million compared to revenues of $1.7 million for the three months ended June 30, 2023, primarily due to the increase in the average number of our vessels. Total calendar days for our fleet were 325 days for the three months ended June 30, 2024, as compared to 182 days for the same period in 2023. Of the total calendar days in the second quarter of 2024, 203, or 62.5%, were time charter days, as compared to 163 or 89.6% for the same period in 2023. Our fleet operational utilization was 87.7% and 89.6% for the three months ended June 30, 2024 and 2023.

Voyage expenses and vessels’ operating expenses for the three months ended June 30, 2024 were $3.1 million and $2.0 million, compared to $0.2 million and $0.8 million for the three months ended June 30, 2023. 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 June 30, 2024 included bunkers cost and port expenses of $1.3 million and $1.2 million respectively, corresponding to 42% and 39% of total voyage expenses due to the fact that the vessel Afrapearl II operated in the spot market as compared to the same period last year, when the vessels operated under time charter employment. Operating expenses for the three months ended June 30, 2024 mainly included crew expenses of $1.1 million, corresponding to 55% of total operating expenses, spares and consumables costs of $0.3 million, corresponding to 15% of total vessel operating expenses, and maintenance expenses of $0.3 million, representing works and repairs on the vessels, corresponding to 15% of total vessel operating expenses.

Depreciation for the three months ended June 30, 2024 was $1.5 million, a $0.8 million increase from $0.7 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 June 30, 2024 were $0.14 million, a $0.06 million increase from $0.08 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 June 30, 2024 were $0.6 million and were mainly related to expenses incurred as a result of operating as a separate public company. For the same period of 2023, the balance was $0.3 million.

Interest and finance costs for the three months ended June 30, 2024 were $0.9 million and related to the accrued interest expense – related party in connection with the $53.3 million, part of the acquisition prices of our Aframax tanker Afrapearl II—which was completely repaid in July 2024 - and our bulk carrier Eco Spitfire, which is payable by April 2025.

Interest income for the three months ended June 30, 2024 was $0.4 million and related to the interest earned from the time deposits held by the Company.

Loss on warrants for the three months ended June 30, 2024 was $14.5 million and mainly related to net fair value losses on our Class B-1 and B-2 Warrants and Class C-1 and C-2 warrants which were issued during the first quarter of 2024 in connection with the two public offerings and have been classified as liabilities.

Adjusted net income was $2.9 million corresponding to an Adjusted EPS, basic of $0.63 for the three months ended June 30, 2024 compared to an Adjusted net loss of $0.4 million corresponding to an Adjusted loss per share, basic, of $12.07 for the same period last year.

Adjusted EBITDA for the three months ended June 30, 2024 and 2023 amounted to $4.9 million and $0.3 million, respectively. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.

An average of 3.6 vessels were owned by the Company during the three months ended June 30, 2024 compared to 2.0 vessels for the same period in 2023.

Voyage revenues for the six months ended June 30, 2024 amounted to $23.6 million, an increase of $18.7 million compared to revenues of $4.9 million for the six months ended June 30, 2023, primarily due to the increase in the average number of our vessels. Total calendar days for our fleet were 598 days for the six months ended June 30, 2024, as compared to 362 days for the same period in 2023. Of the total calendar days in the first six months of 2024, 367 or 61.4%, were time charter days, as compared to 326 or 90.0% for the same period in 2023. Our fleet operational utilization was 90.3% and 90.1% for the six months ended June 30, 2024 and 2023.

Voyage expenses and vessels’ operating expenses for the six months ended June 30, 2024 were $6.0 million and $3.8 million compared to $0.5 million and $1.9 million for the six months ended June 30, 2023. 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 six months ended June 30, 2024 mainly included bunker costs of $3.1 million, corresponding to 52% of total voyage expenses, and port expenses of $1.9 million, corresponding to 32% of total voyage expenses due to the fact that the vessel Afrapearl II operated in the spot market as compared to the same period last year, when the vessels operated under time charter employment. Operating expenses for the six months ended June 30, 2024 mainly included crew expenses of $2.0 million, corresponding to 53% of total operating expenses, spares and consumables costs of $0.8 million, corresponding to 21%, and maintenance expenses of $0.4 million, representing works and repairs on the vessels, corresponding to 11% of total vessel operating expenses.

Depreciation for the six months ended June 30, 2024 was $2.9 million, a $1.6 million increase from $1.3 million for the same period of last year, due to the increase in the average number of our vessels.

Management fees for the six months ended June 30, 2024 were $0.3 million, a $0.1 million increase from $0.2 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 six months ended June 30, 2024 were $2.1 million and mainly related to expenses incurred relating to the two public offerings and the reverse stock split and expenses incurred as a result of operating as a separate public company. General and Administrative costs for the six months ended June 30, 2023 were $0.5 million.

Interest and finance costs for the six months ended June 30, 2024 were $1.7 million and related to the accrued interest expense – related party, as of June 30, 2024 in connection with the $53.3 million, part of the acquisition prices of our Aframax tanker Afrapearl II - which was subsequently completely paid off in July 2024 - and our bulk carrier Eco Spitfire, which is payable by April 2025.

Interest income for the six months ended June 30, 2024 was $0.6 million and related to the interest earned from the time deposits held by the Company.

Loss on warrants for the six months ended June 30, 2024 was $15.2 million and mainly related to the net fair value losses on our Class B-1 and B-2 Warrants and Class C-1 and C-2 warrants which were issued during the first quarter of 2024 in connection with the two public offerings and have been classified as liabilities.

Adjusted Net Income was $7.3 million corresponding to an Adjusted EPS, basic of $1.68 for the six months ended June 30, 2024 compared to adjusted net income of $0.4 million, corresponding to an Adjusted EPS, basic of $11.54 for the same period in the last year.

Adjusted EBITDA for the six months ended June 30, 2024 and 2023 amounted to $11.3 million and $1.7 million respectively. Reconciliations of Adjusted Net Income, EBITDA and Adjusted EBITDA to Net Income are set forth below.

An average of 3.3 vessels were owned by the Company during the six months ended June 30, 2024 compared to 2.0 vessels for the same period of 2023.

FLEET DATA

Average number of vessels (1)

Period end number of owned vessels in fleet

Total calendar days for fleet (2)

Total voyage days for fleet (3)

Fleet utilization (4)

Total charter days for fleet (5)

Total spot market days for fleet (6)

Fleet operational utilization (7)

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.

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.

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.

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.

Total charter days for fleet are the number of voyage days the vessels operated on time or bareboat charters for the relevant period.

Total spot market charter days for fleet are the number of voyage days the vessels operated on spot market charters for the relevant period.

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.

(Expressed in United States Dollars,
except number of shares)

Net (Loss)/Income - Adjusted Net (Loss)/Income

Net (loss)/income

Plus loss on warrants

Plus share based compensation

Adjusted Net (loss)/income

Net (Loss)/Income - EBITDA

Net (loss)/income

Plus interest and finance costs

Less interest income

Plus depreciation

EBITDA

Net (Loss)/Income - Adjusted EBITDA

Net (loss)/income

Plus loss on warrants

Plus share based compensation

Plus interest and finance costs

Less interest income

Plus depreciation

Adjusted EBITDA

EPS

Numerator

Net (loss)/income

Less: Cumulative dividends on preferred shares

Less: Down round deemed dividend on Series A Perpetual Convertible Preferred Shares

Net (loss)/income attributable to common shareholders, basic

Denominator

Weighted average number of shares

EPS - Basic

Adjusted EPS

Numerator

Adjusted net (loss)/income

Less: Cumulative dividends on preferred shares

Less: Undistributed earnings allocated to non-vested shares

Less: Down round deemed dividend on Series A Perpetual Convertible Preferred Shares

Adjusted net (loss)/income attributable to common shareholders, basic

Denominator

Weighted average number of shares

Adjusted EPS

(Expressed in U.S. Dollars except for available days and Time charter
equivalent rate)

Voyage revenues

Voyage expenses

Time charter equivalent revenues

Total voyage days for fleet

Time charter equivalent rate

Revenues

Revenues

Total revenues

Expenses

Voyage expenses

Voyage expenses – related party

Vessels’ operating expenses

Vessels’ operating expenses – related party

Drydocking costs

Management fees – related party

General and administrative expenses

General and administrative expenses – related party

Depreciation

Total expenses

(Loss)/Income from operations

Other (expenses)/income

Interest and finance costs

Interest and finance costs – related party

Interest income

Foreign exchange gain/(loss)

Loss on warrants

Other expenses, net

Net (loss)/income

(Loss)/Earnings per share (ii)

- Basic

- Diluted

Weighted average number of shares

- Basic

- Diluted

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 and to reverse stock split effected in April 2024.

Assets

Current assets

Cash and cash equivalents

Time deposits

Trade and other receivables

Other current assets

Inventories

Advances and prepayments

Operating lease right-of-use assets

Total current assets

Non current assets

Vessels, net

Total non current assets

Total assets

Liabilities and Stockholders’ Equity

Current liabilities

Trade accounts payable

Payable to related parties

Accrued and other liabilities

Operating lease liabilities

Deferred income

Total current liabilities

Non current liabilities

Warrant liability

Total current liabilities

Total liabilities

Commitments and contingencies

Stockholders’ equity

Capital stock

Preferred stock, Series A

Additional paid-in capital

Retained earnings/(accumulated deficit)

Total stockholders’ equity

Total liabilities and stockholders’ equity

Cash flows from operating activities

Net income/(loss) for the period

Adjustments to reconcile net income/(loss) to net cash provided by operating activities:

Depreciation

Share based compensation

Unrealized foreign exchange loss on time deposits

Loss on warrants

Noncash lease expense

Offering costs attributable to warrant liability

Changes in operating assets and liabilities:

(Increase)/decrease in

Trade and other receivables

Other current assets

Inventories

Advances and prepayments

Increase/(decrease) in

Trade accounts payable

Changes in operating lease liabilities

Payable to related parties

Accrued liabilities

Deferred income

Net cash provided by operating activities

Cash flows from investing activities

Acquisition of vessel

Increase in bank time deposits

Maturity of bank time deposits

Net cash used in investing activities

Cash flows from financing activities

Net transfers from former Parent Company

Proceeds from follow-on offerings

Proceeds from exercise of warrants

Stock issuance costs

Dividends paid on preferred shares

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period