Three weeks ago, C3is closed a $6 million offering bundled with warrants that could issue tens of millions of new shares at prices designed to reset lower after closing. By August 17, the share count had roughly quadrupled. On Monday, the board moved to undo it: every forty shares become one.
The offering, completed July 28, included Class F Warrants with the potential to issue up to about 41.7 million additional shares, depending on how their reset and cashless exercise features played out, according to a Form 6-K filed with the SEC on July 28. A prospectus from the same date listed about 13 million shares outstanding, according to an amended Schedule 13G filed August 14 by L1 Capital Global Opportunities Master Fund. By August 17, the 6-K announcing the reverse split put the count at about 57.6 million.
Shares closed 15.32% higher at $2.7400 on August 18, on dollar volume of about $1.3 million.
The split is the company's answer to Nasdaq's minimum bid price rule, which requires listed stocks to trade above $1. The company's press release said the split "will increase the market price" and allow it to meet that threshold. After the split, the outstanding share count falls from about 57.6 million to about 1.44 million, according to the 6-K. Holders who end up with a fraction of a share will receive a cash equivalent rather than a fractional share.
Combining shares does not change what fraction of the company each holder owns. But the mechanism that expanded the share count to where it stands now — the resettable, cashless warrants — remains in place and will itself be adjusted in proportion when the split takes effect.
Not all of those adjustments are straightforward. The 6-K says the Class B and Class C Warrants will go through a further adjustment period lasting five trading days after the split, under terms set out in those warrants' own documents. The filing does not describe what range of outcomes that window produces, or what it means for the number of shares those warrants could eventually deliver.