Even as it was receiving its latest Nasdaq delisting notice, Harry Vafias-backed shipowner C3is was counting roughly $6m in gross proceeds from its latest dilutive equity raise.
The owner of two bulkers and one tanker disclosed results of the shares offering in a securities filing hours before it announced the delisting letter from the stock exchange and its intention to appeal on 15 March.
Acting through underwriter Aegis Capital, C3is disclosed it had received the funds in a deal that priced at the close of trading on 14 March.
C3is issued 120m new shares at $0.05 each, which represented a 37% discount from that day’s close of $0.079 per share.
Investors reacted negatively to the news, sending the stock to a close of $0.028 per share as they traded more than 200m units against an average daily trading volume of 13.7m.
After close of trading, C3is announced that it had received a letter from Nasdaq’s listing qualifications department explaining that its shares had a closing bid price of $0.10 or less for 10 consecutive trading days to 14 March.
Nasdaq gave the shipowner until 22 March to appeal against the ruling, which it now has.
C3is has requested a hearing to argue its case.
The appeal halts any delisting and should be heard within 30 to 45 days.
The shipowner had already received notice that it had failed to comply with another listing requirement to have a stock price above $1.
The latest equity raise had the effect of dramatically increasing total shares outstanding for C3is. The company is a spin-off of Vafias vehicle Imperial Petroleum, which itself is a spin-off of his StealthGas. Both parent companies are Nasdaq-listed.
C3is had just over 44m shares outstanding prior to the deal, and more than 164m after it.
C3is shareholders have kept shares below the deal price since, with the stock trading just above $0.03 on Tuesday.
The company said it expected to receive $5.1m in net proceeds following underwriting discounts and fees. Each share sold in the offering included a package of warrants.
“We intend to use the net proceeds from the sale of the securities offered by this prospectus for capital expenditures, including for payment towards the $38.7m remaining purchase price for the aframax tanker we acquired in July 2023,” it said in a prospectus accompanying the raise.
Proceeds could also be applied to other vessel acquisitions.
The deal is the second C3is has done this year through Aegis Capital.
It said it raised $7m in an equity offering outlining similar use or proceeds. The deal was upsized from an original target of $6m.
It is widely expected that C3is will carry out a reverse shares split to remedy the deficiencies cited by Nasdaq.
