Flawless Management SC 13D/A C3is / Flawless Management ownership change

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 1)^*

C3IS INC.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

Y18284 102

(CUSIP Number)

Harry N. Vafias

c/o C3is Inc.

331 Kifissias Avenue

Erithrea 14561

Athens, Greece

011 30210 625 0001

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

January 23, 2024

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box  ☐.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)

CUSIP No. Y18284 102 13D

1	NAME OF REPORTING PERSONS   Flawless Management Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)   (a)  ☐        (b)  ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions)   OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)   ☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION   Republic of the Marshall Islands

NUMBER OF SHARES BENEFICIALLY  OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER   0
	8	SHARED VOTING POWER   7,401
	9	SOLE DISPOSITIVE POWER   0
	10	SHARED DISPOSITIVE POWER   7,401

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   7,401
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)   ☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   0.03%**
14	TYPE OF REPORTING PERSON (see instructions)   CO

* Based on 28,307,840 shares of common stock, par value $0.01 per share, of C3is Inc. outstanding as reported in C3is Inc.’s Report on Form 6-K furnished to the SEC on January 23, 2024.

CUSIP No. Y18284 102 13D

1	NAME OF REPORTING PERSONS   Arethusa Properties LTD
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)   (a)  ☐        (b)  ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions)   OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)   ☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION   British Virgin Islands

NUMBER OF SHARES BENEFICIALLY  OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER   0
	8	SHARED VOTING POWER   74
	9	SOLE DISPOSITIVE POWER   0
	10	SHARED DISPOSITIVE POWER   74

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   74
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)   ☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   0.001%*
14	TYPE OF REPORTING PERSON (see instructions)   CO

* Based on 28,307,840 shares of common stock, par value $0.01 per share, of C3is Inc. outstanding as reported in C3is Inc.’s Report on Form 6-K furnished to the SEC on January 23, 2024.

CUSIP No. Y18284 102 13D

1	NAME OF REPORTING PERSONS   Harry N. Vafias
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (see instructions)   (a)  ☐        (b)  ☐
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions)   OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)   ☐
6	CITIZENSHIP OR PLACE OF ORGANIZATION   GREECE

NUMBER OF SHARES BENEFICIALLY  OWNED BY EACH REPORTING PERSON WITH	7	SOLE VOTING POWER   864,414**
	8	SHARED VOTING POWER   7,475
	9	SOLE DISPOSITIVE POWER   864,414**
	10	SHARED DISPOSITIVE POWER   7,475

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON   871,889**
12	CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see instructions)   ☐
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11   3.1%*
14	TYPE OF REPORTING PERSON (see instructions)   IN

* Based on 28,307,840 shares of common stock, par value $0.01 per share, of C3is Inc. outstanding as reported in C3is Inc.’s Report on Form 6-K furnished to the SEC on January 23, 2024.

** Includes 770,960 restricted shares of Common Stock outstanding as of the date hereof, of which 385,480 vest on November 6, 2024 and 385,480 vest on November 6, 2025. These shares remain subject to forfeiture if the time-based vesting conditions are not satisfied.

AMENDMENT NO. 1 TO

STATEMENT ON SCHEDULE 13D

This Amendment No. 1 (this “Amendment No. 1”) to Schedule 13D (originally filed on November 16, 2023), relates to the common stock, par value $0.01 per share (“Common Stock”), of C3is Inc., a Marshall Islands corporation (the “Issuer”), and 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, Arethusa Properties LTD, a British Virgin Islands company, and Harry N. Vafias in his personal capacity (sometimes collectively referred to as the “Reporting Persons”).

This Amendment No. 1 is being filed by the Reporting Persons as a result of the dilution of the Reporting Persons’s ownership percentage resulting from the issuance of shares of Common Stock by the Issuer in its underwritten public offering of units, comprised of one share of Common Stock, half of a Class B-1 Warrant and one Class B-2 Warrant to purchase one share of Common Stock, consummated on January 23, 2024 (the “January 2024 Offering”), and exercises of pre-funded warrants issued in such offering. As a result of this transaction, the Reporting Persons no longer beneficially own more than 5% of the outstanding shares of Common Stock.

Information given in response to each item below shall be deemed incorporated by reference in all other items below. Unless indicated otherwise, all items left blank remain unchanged, and any items which are amended below are deemed to amend and update the existing items in the Schedule 13D.

Item 2. Identity and Background

Item 2 of the Statement is hereby amended and restated to read as follows:

(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”), Arethusa Properties LTD, a British Virgin Islands company (“Arethusa”), 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 principal business of Arethusa is acting as a ship holding company. The business address of each of Flawless and Mr. Vafias is 331 Kifissias Avenue, Erithrea 14561, Athens, Greece. The business address of Arethusa is Kingston Chambers, P.O BOX 173, Road Town, Tortola, British Virgin Islands. The sole officer and director of each of Flawless and Arethusa is Harry N. Vafias. Harry N. Vafias is an individual of Greek citizenship who is the Non-Executive Chairman of the Board of Directors 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

Item 3 of the Statement is hereby amended by adding the following paragraphs to the end of Item 3:

This Amendment No. 1 updates the percentage of outstanding Common Stock beneficially owned by Reporting Persons to reflect the issuance of Common Stock in the January 2024 Offering.

On December 5, 2023, Mr. Vafias’s mother, Theano Vafias, transferred all of the outstanding equity interests in Arethusa, which owns 74 shares of Common Stock, to Mr. Vafias without consideration.

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.

Mr. Vafias serves as the Non-Executive Chairman of the Issuer and therefore regularly engages in discussions with management of the Issuer, the board of directors of the Issuer, other shareholders of the Issuer and other relevant parties, which discussions may include matters ranging from the operations and conduct of the Issuer’s business to considering or exploring extraordinary corporate transactions including the events listed in Items 4(a) through 4(j) of Schedule 13D. In connection with these discussions, the Reporting Persons may, either directly or through one or more affiliates, determine to take any available course of action or to take no course of action and may at any time and from time to time take steps to further or implement such course of action, including any of the events listed in Items 4(a) through 4(j) of Schedule 13D. Any action or actions the Reporting Persons may undertake with respect to their investment in the Issuer or the operations and conduct of the Issuer’s business will be dependent upon the Reporting Persons’ review of numerous factors, including those listed above, and the Reporting Persons specifically reserve the right to change their intentions, or to formulate plans and proposals, with respect to any or all of the matters described in this paragraph, subject to applicable law and regulations.

Item 5. Interest in Securities of the Issuer

Item 5 of the Statement is hereby amended and restated to read as follows:

(a) See Items 11 and 13 on the cover pages to this Statement for the aggregate number and percentage of the class of Common Stock owned by each Reporting Person.

(b) Number of shares as to which each Reporting Person has:

i. Sole power to vote or to direct the vote: See Item 7 on cover pages to this Statement.

ii. Shared power to vote or to direct the vote: See Item 8 on cover pages to this Statement.

iii. Sole power to dispose or direct the disposition: See Item 9 on cover pages to this Statement.

iv. Shared power to dispose or direct the disposition: See Item 10 on cover pages to this Statement.

(c) Other than as set forth in response to Item 3 above, no other transactions in the Company’s Common Stock by the Reporting Persons were effected in the past 60 days.

(d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock beneficially owned by the Reporting Persons.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Item 6 of the Statement is hereby amended by adding the following paragraph to the end of Item 6:

A copy of the form of Lockup Agreement entered into by Harry Vafias in connection with the January 2024 Offering is filed as Exhibit 2 and is incorporated herein by reference.

Item 7. Material to be Filed as Exhibits

Item 7 is hereby amended to add the following exhibits:

Exhibit 1: Joint Filing Agreement, dated January  24, 2024, among Flawless Management Inc., Arethusa Properties LTD and Harry N. Vafias.

Exhibit 2. Lockup Agreement with Aegis Capital Corp. (incorporated by reference to Exhibit A of Exhibit 1.1 to the Company’s Report on Form 6-K furnished to the SEC on January 23, 2024).

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SIGNATURE

After reasonable inquiry and to the best of the knowledge and belief of each of the undersigned, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: January 24, 2024

FLAWLESS MANAGEMENT INC.
By:	/s/ Harry N. Vafias
	Harry N. Vafias
	President

ARETHUSA PROPERTIES LTD.
By:	/s/ Harry N. Vafias
	Harry N. Vafias
	President

/s/ Harry N. Vafias

Harry N. Vafias