| Item 1. | Security and Issuer |
This Schedule 13D relates to the common stock, par value $0.01 per share (“Common Stock”), of C3is Inc., a Marshall Islands corporation (the “Issuer”). The principal executive office of the Issuer is located at 331 Kifissias Avenue, Erithrea 14561, Athens, Greece. Information given in response to each item below shall be deemed incorporated by reference in all other items below.
| Item 2. | Identity and Background |
(a)-(c), (f) This Schedule 13D is being filed pursuant to a Joint Filing Agreement (attached as Exhibit 1 and incorporated herein by reference) by and between Flawless Management Inc., a Republic of the Marshall Islands corporation (“Flawless”), and Harry N. Vafias in his personal capacity (sometimes collectively referred to as the “Reporting Persons”). The principal business of Flawless is investing in securities. The business address of each of the Reporting Persons is c/o C3is Inc., 331 Kifissias Avenue, Erithrea 14561, Athens, Greece. The sole officer and director of Flawless is Harry N. Vafias who is the Director, President, Secretary and Treasurer of Flawless. Harry N. Vafias is an individual of Greek citizenship who is the Non-Executive Chairman of the Issuer and the Chief Executive Officer, President and a director of Imperial Petroleum Inc. and the Chief Executive Officer, President, Chief Financial Officer and a director of StealthGas Inc.
(d) During the last five years, no Reporting Person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, no Reporting Person was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
| Item 3. | Source and Amount of Funds or Other Consideration |
On June 21, 2023, Imperial Petroleum Inc. effected a spin-off distribution (the “Spin-Off Distribution”) of all of the outstanding shares of Common Stock of the Issuer, which was formed to act as the holding company for two drybulk carriers owned by Imperial Petroleum Inc., to stockholders and warrantholders of Imperial Petroleum as of the close of business on June 13, 2023, who, including the Reporting Persons, received one share of the Issuer’s Common Stock for every eight shares of Imperial Petroleum Inc. common stock owned at the close of business on June 13, 2023. In the Spin-Off Distribution, on June 21, 2023, Flawless and Mr. Vafias acquired 7,401 shares and 100,855 shares (including the 7,401 shares acquired by Flawless) of Common Stock, respectively, in respect of the shares of Imperial Petroleum Inc. common stock owned by such Reporting Persons as of the close of business on June 13, 2023.
On November 6, 2023, Mr. Vafias acquired, as compensatory awards, 770,960 shares of restricted Common Stock, 50% of which vest on November 6, 2024 and the remaining 50% of which vest on November 6, 2025, subject to satisfaction of the time-based vesting terms.
As described above, Mr. Vafias is the Chief Executive Officer, President and a director of Imperial Petroleum Inc., which owns 600,000 shares of the Issuer’s outstanding Series A Convertible Preferred Stock, par value $0.01 per share, liquidation preference $25.00 per share, which is convertible, at the holder’s option, into Common Stock at a current conversion price of $1.05.
| Item 4. | Purpose of Transaction. |
The Reporting Persons acquired the securities described in this Schedule 13D for investment purposes and intend to review their investment in the Issuer on a continuing basis. Any Reporting Person may from time to time acquire additional securities of the Issuer, or retain or sell all or a portion of the shares then held by the Reporting Persons, in the open market, block trades, underwritten public offerings or privately negotiated transactions. Any actions any Reporting Person might undertake with respect to its investment in the Issuer may be made at any time and from time to time and will be dependent upon such Reporting Person’s review of numerous factors, including, but not limited to: ongoing evaluation of the Issuer’s business, financial condition, operations, prospects and strategic alternatives; price levels of the Issuer’s securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; tax considerations; liquidity of the Issuer’s securities; and other factors and future developments.
