SCHEDULE: C3IS Insider Ownership Shifts Post-Warrant Exercise

Key insiders, including Non-Executive Chairman Harry N. Vafias, updated their beneficial ownership in C3IS Inc. to reflect dilution from recent warrant exercises and an increased share count.

Summary

• This Amendment No. 3 to Schedule 13D updates beneficial ownership percentages for C3IS Inc. Common Stock.
• The filing is made by Flawless Management Inc., Arethusa Properties LTD, and Harry N. Vafias (collectively, the "Reporting Persons").
• The primary purpose of this amendment is to reflect dilution in percentage ownership due to an increased total number of outstanding shares, including those issued upon the exercise of outstanding warrants, as reported by the Issuer on September 29, 2025.
• Harry N. Vafias, the Non-Executive Chairman of C3IS Inc., beneficially owns 100,577 shares, representing 6.3% of the class, which includes 5,000 shares issuable upon exercise of vested stock options.
• Arethusa Properties LTD beneficially owns 72,331 shares, representing 4.5% of the class.
• Flawless Management Inc. beneficially owns 4 shares, representing 0.01% of the class.
• The reported share amounts account for three previous reverse stock splits: 1-for-100 (April 11, 2024), 1-for-2.5 (December 31, 2024), and 1-for-6 (April 3, 2025).

Sentiment

Score: 4

Explanation: The filing is primarily a compliance update reflecting dilution from warrant exercises, which is a slight negative for existing shareholders, though key insiders maintain significant stakes and active involvement, mitigating a stronger negative sentiment.

Positives

• Reporting Persons acquired the securities for investment purposes, indicating continued belief in the Issuer's prospects.
• Harry N. Vafias, as Non-Executive Chairman, regularly engages in discussions with the Issuer's management and board, suggesting active oversight and involvement in strategic matters.

Negatives

• Beneficial ownership percentages of the Reporting Persons have decreased due to dilution from the issuance of new shares, including those from warrant exercises.

Risks

• Dilution of existing shareholder value due to the issuance of new shares from warrant exercises.
• Future actions by Reporting Persons regarding their investment are subject to various factors, including market conditions and the Issuer's performance, which could lead to further sales or acquisitions.

Future Outlook

The Reporting Persons intend to continuously review their investment in C3IS Inc. and may acquire additional securities or sell existing holdings based on various factors, including the Issuer's business, financial condition, market conditions, and strategic alternatives. Harry N. Vafias, as Non-Executive Chairman, will continue to engage in discussions with management and the board regarding the Issuer's operations and potential extraordinary corporate transactions.

Management Comments

• Harry N. Vafias, as Non-Executive Chairman, regularly engages in discussions with the Issuer's management, board of directors, other shareholders, and relevant parties, which may include matters ranging from operations and business conduct to considering or exploring extraordinary corporate transactions.
• Reporting Persons acquired the securities for investment purposes and intend to review their investment in the Issuer on a continuing basis, reserving the right to acquire additional securities or sell existing holdings.

Industry Context

This Schedule 13D/A filing is a standard regulatory disclosure required when a beneficial owner's stake in a public company changes significantly. The dilution reported, stemming from warrant exercises, is a common occurrence in companies that utilize warrants as a financing mechanism, impacting existing shareholder percentages.

Stakeholder Impact

• Shareholders: Experience dilution of their ownership percentage due to new share issuance from warrant exercises, potentially impacting per-share value.
• Management/Board: Harry N. Vafias, as Non-Executive Chairman, continues to be actively involved in strategic discussions, maintaining a significant insider presence.

Next Steps

• Reporting Persons will continue to review their investment in C3IS Inc. on an ongoing basis.
• Reporting Persons may acquire additional securities or sell existing holdings in the open market or privately negotiated transactions.
• Harry N. Vafias will continue to engage in discussions with management and the board regarding the Issuer's business and potential strategic actions.
• 5,000 unvested stock options for Harry N. Vafias are scheduled to vest on September 16, 2026.

Key Dates

Recommendation

The filing primarily reports a compliance update regarding beneficial ownership, reflecting dilution from warrant exercises. While dilution is generally a negative, key insiders, including the Non-Executive Chairman, maintain significant stakes and express continued investment intent, suggesting a 'hold' position rather than a 'sell' based solely on this filing.

Keywords

C3IS, Schedule 13D, beneficial ownership, insider ownership, stock options, reverse split, warrant exercise, dilution, Harry Vafias, corporate governance