On August 1, 2008, about 1546 eastern daylight time, a Piper PA-12, N3424M, registered to and operated by Barnstormer Flite Signs, Inc., experienced a total loss of engine power and was ditched in the Atlantic Ocean near Grand Strand Airport (CRE), North Myrtle Beach, South Carolina. Visual meteorological conditions prevailed at the time and no flight plan was filed for the 14 Code of Federal Regulations (CFR) Part 91 banner-tow flight from CRE. The airplane was substantially damaged and the certificated commercial pilot sustained minor injuries. The flight originated about 1300, from CRE. The pilot stated that earlier that day the fuel tanks were filled and he flew the airplane for 45 minutes, while remaining in the traffic pattern. He secured the airplane and after landing, the operator reportedly advised the pilot twice to fuel the airplane before departure. It was not fueled, and the pilot elected to depart on a banner-tow flight. While monitoring the fuel level during the flight, he noticed the left and right fuel quantity readings were "1/4" and "1/3," respectively. Approximately 1 to 2 minutes later, or at 1545, the engine sputtered once then quit. He notified CRE air traffic control tower that he would attempt to land on the runway and released the banner. After realizing that he was unable to reach the airport, he elected to ditch the airplane. Examination of the airplane by a Federal Aviation Administration inspector revealed no fuel or water in the airplane's fuel tanks. The gascolator contained an unquantified amount of fuel only, and the carburetor contained only water.