Toro Corp 6-K, filed May 23, 2023

Toro Corp. (TORO)

6-K 2023-05-23 For: 2023-05-23

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Toro Corp filed this 6-K on May 23, 2023.

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	TORO CORP.
Dated: May 23, 2023
	By:	/s/ Petros Panagiotidis
		Petros Panagiotidis
		Chairman and Chief Executive Officer

	Page
Unaudited Interim Consolidated Balance Sheets as of December 31, 2022, and March 31, 2023	F-2
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022, and 2023	F-3
Unaudited Interim Consolidated Statements of Shareholders’ Equity and Mezzanine Equity for the three months ended March 31, 2022, and 2023	F-4
Unaudited Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2022, and 2023	F-5
Notes to Unaudited Interim Condensed Consolidated Financial Statements	F-6

			December 31,			March 31,
ASSETS	Note		2022			2023
CURRENT ASSETS:
Cash and cash equivalents			$	41,779,594		$	67,206,733
Due from related parties, current		3		558,327			1,314,394
Accounts receivable trade, net				10,616,573			5,949,733
Inventories				893,569			922,286
Prepaid expenses and other assets				915,244			3,698,340
Total current assets				54,763,307			79,091,486

NON-CURRENT ASSETS:
Vessels, net		5		92,486,178			91,717,046
Restricted cash		6		700,000			700,000
Due from related parties		3		1,708,474			1,708,474
Prepaid expenses and other assets, non-current				5,199,999			2,199,999
Deferred charges, net		4		2,621,145			3,062,070
Total non-current assets				102,715,796			99,387,589
Total assets			$	157,479,103		$	178,479,075

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net		6		2,606,302			2,617,485
Accounts payable				1,643,468			2,860,823
Deferred revenue				—			479,926
Accrued liabilities				2,269,281			2,857,134
Total current liabilities				6,519,051			8,815,368

NON-CURRENT LIABILITIES:
Long-term debt, net		6		10,463,172			9,802,459
Total non-current liabilities				10,463,172			9,802,459

Commitments and contingencies		10

MEZZANINE EQUITY:
1.00% Series A fixed rate cumulative perpetual convertible preferred shares: 0 and 140,000 shares issued and outstanding as of December 31, 2022, and March 31, 2023, respectively, aggregate liquidation preference of $0 and $140,000,000 as of December 31, 2022 and March 31, 2023, respectively		8		—			117,372,390
Total mezzanine equity				—			117,372,390

SHAREHOLDERS’ EQUITY:
Former Net Parent Company investment				140,496,912			—
Common shares, $0.001 par value; 1,000 and 3,900,000,000 shares authorized; 1,000 and 9,461,009 shares issued; 1,000 and 9,461,009 shares outstanding as of December 31, 2022, and March 31, 2023 respectively		7		—			9,461
Preferred shares, $0.001 par value: 0 and 100,000,000 shares authorized; Series B preferred shares: 0 and 40,000 shares issued and outstanding as of December 31, 2022 and March 31, 2023, respectively		7		—			40
Additional paid-in capital				—			38,156,985
(Accumulated deficit)/Retained Earnings				(32	)		4,322,372
Total shareholders’ equity				140,496,880			42,488,858
Total liabilities, mezzanine equity and shareholders’ equity			$	157,479,103		$	178,479,075

			Three Months Ended March 31,			Three Months Ended March 31,
	Note		2022			2023
REVENUES:
Time charter revenues		12	$	2,986,345		$	1,906,250
Voyage charter revenues		12		10,734,868			7,930
Pool revenues		12		3,109,235			29,239,974
Total vessel revenues				16,830,448			31,154,154

EXPENSES:
Voyage expenses (including $213,836 and $394,803 to related party for the three months ended March 31, 2022, and 2023, respectively)		3,13		(7,241,317	)		(518,797	)
Vessel operating expenses		13		(5,236,713	)		(5,116,521	)
Management fees to related parties		3		(688,500	)		(702,000	)
Recovery of provision for doubtful accounts				—			266,732
Depreciation and amortization		4,5		(1,808,997	)		(2,055,646	)
General and administrative expenses (including $93,246 and $352,778 to related party for the three months March 31, 2022, and 2023, respectively)		3		(286,444	)		(983,264	)
Total expenses			$	(15,261,971	)	$	(9,109,496	)

Operating income			$	1,568,477		$	22,044,658

OTHER (EXPENSES)/INCOME:
Interest and finance costs		14		(184,222	)		(317,673	)
Interest income				615			435,429
Foreign exchange gains/(losses)				22			(10,000	)
Total other (expenses)/ income, net			$	(183,585	)	$	107,756

Net income, before taxes			$	1,384,892		$	22,152,414
Income taxes				(151,761	)		(193,201	)
Net income and comprehensive income			$	1,233,131		$	21,959,213
Dividend on Series A Preferred Shares		3,11		—			(97,222	)
Deemed dividend on Series A Preferred Shares		8		—			(200,255	)
Net income attributable to common shareholders			$	1,233,131		$	21,661,736
Earnings per common share, basic		11		0.13			2.29
Earnings per common share, diluted		11		0.02			0.35
Weighted average number of common shares, Basic		11		9,461,009			9,461,009
Weighted average number of common shares, Diluted		11		61,898,567			61,898,567

																				Mezzanine equity
	# of Series B Preferred Shares		Par Value of Preferre d Series B shares		# of Common shares		Par Value of Common Shares		Additional Paid-in capital		Former Parent Company Investment			(Accumulated deficit)/Retained Earnings			Total Shareholders’ Equity			# of Series A Preferred Shares		Mezzanine Equity
Balance, December 31, 2021		—		—		—		—		—		104,031,170			—			104,031,170			—		—
Net income and comprehensive income		—		—		—		—		—		1,233,131			—			1,233,131			—		—
Net decrease in Former Parent Company Investment		—		—		—		—		—		(1,267,578	)		—			(1,267,578	)		—		—
Balance, March 31, 2022		—		—		—		—		—		103,996,723			—			103,996,723			—		—

Balance, December 31, 2022		—		—		—		—		—		140,496,912			(32	)		140,496,880			—		—
Net income and comprehensive income		—		—		—		—		—		17,339,332			4,619,881			21,959,213			—		—
Net increase in Former Parent Company investment		—		—		—		—		—		211,982			—			211,982			—		—
Capitalization at spin off, including Issuance of capital and preferred stock, net of costs (Note 8)		40,000		40		9,461,009		9,461		38,156,985		(158,048,226	)		—			(119,881,740	)		140,000		117,172,135
Dividend on Series A preferred shares		—		—		—		—		—		—			(97,222	)		(97,222	)		—		—
Deemed dividend on Series A preferred shares (Note 8)		—		—		—		—		—		—			(200,255	)		(200,255	)		—		200,255
Balance, March 31, 2023		40,000		40		9,461,009		9,461		38,156,985		—			4,322,372			42,488,858			140,000		117,372,390

	Note		Three months ended March 31, 2022			Three months ended March 31, 2023
Cash Flows (used in)/provided by Operating Activities:
Net income			$	1,233,131		$	21,959,213
Adjustments to reconcile net income to net cash (used in)/provided by Operating activities:
Depreciation and amortization		4,5		1,808,997			2,055,646
Amortization of deferred finance charges		14		32,283			25,470

Changes in operating assets and liabilities:
Accounts receivable trade, net				(4,883,869	)		4,666,840
Inventories				(2,248,292	)		(28,717	)
Due from/to related parties				1,227,879			(977,432	)
Prepaid expenses and other assets				(997,847	)		216,904
Other deferred charges				(61,087	)		—
Accounts payable				1,521,756			973,238
Accrued liabilities				412,943			493,785
Deferred revenue				(547,939	)		479,926
Dry-dock costs paid				—			(1,222,755	)
Net Cash (used in)/provided by Operating Activities				(2,502,045	)		28,642,118

Cash flow (used in)/provided by Investing Activities:
Vessel acquisitions and other vessel improvements		5		(327,792	)		(181,498	)
Net cash used in Investing Activities				(327,792	)		(181,498	)

Cash flows (used in)/provided by Financing Activities:
Net (decrease)/ increase in Former Parent Company Investment				(1,267,578	)		211,982
Issuance of Series B Preferred shares		7		—			40
Repayment of long-term debt		6		(850,000	)		(675,000	)
Payments related to Spin-Off		3		—			(2,570,503	)
Net cash used in Financing Activities				(2,117,578	)		(3,033,481	)

Net increase in cash, cash equivalents, and restricted cash				(4,947,415	)		25,427,139
Cash, cash equivalents and restricted cash at the beginning of the period				5,663,411			42,479,594
Cash, cash equivalents and restricted cash at the end of the period			$	715,996			67,906,733

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents			$	15,996		$	67,206,733
Restricted cash, non-current				700,000			700,000
Cash, cash equivalents, and restricted Cash				715,996			67,906,733

Company		Country of incorporation	Date of incorporation	Vessel Name	DWT	Year Built	Delivery date to Vessel owning company
1	Rocket Shipping Co. (“Rocket”)	Marshall Islands	01/13/2021	M/T Wonder Polaris	115,351	2005	March 11, 2021
2	Gamora Shipping Co. (“Gamora”)	Marshall Islands	01/13/2021	M/T Wonder Sirius	115,341	2005	March 22, 2021
3	Starlord Shipping Co. (“Starlord”)	Marshall Islands	04/15/2021	M/T Wonder Vega	106,062	2005	May 21, 2021
4	Hawkeye Shipping Co. (“Hawkeye”)	Marshall Islands	04/27/2021	M/T Wonder Avior	106,162	2004	May 27, 2021
5	Vision Shipping Co. (“Vision”)	Marshall Islands	04/27/2021	M/T Wonder Mimosa	36,718	2006	May 31, 2021
6	Colossus Shipping Co. (“Colossus”)	Marshall Islands	04/27/2021	M/T Wonder Musica	106,290	2004	June 15, 2021
7	Xavier Shipping Co. (“Xavier”)	Marshall Islands	04/27/2021	M/T Wonder Formosa	36,660	2006	June 22, 2021
8	Drax Shipping Co. (“Drax”)	Marshall Islands	11/22/2021	M/T Wonder Bellatrix	115,341	2006	December 23, 2021

1	Toro RBX Corp. (“Toro RBX”)⁽¹⁾
2	Elektra Shipping Co. (“Elektra”)⁽²⁾

	December 31, 2022		March 31, 2023
Assets:
Due from Castor Ships (a) – current		558,327		1,535,760
Due from Castor Ships (a) – non-current		1,708,474		1,708,474
Liabilities:
Due to Former Parent Company (d) – current	$	—	$	221,366

	Dry-docking costs
Balance December 31, 2022	$	2,621,145
Additions		931,069
Amortization		(490,144	)
Balance March 31, 2023	$	3,062,070

	Vessel Cost		Accumulated depreciation			Net Book Value
Balance December 31, 2022	$	102,122,080	$	(9,635,902	)	$	92,486,178
Acquisitions, improvements, and other vessel costs		796,370		—			796,370
Period depreciation		—		(1,565,502	)		(1,565,502	)
Balance March 31, 2023	$	102,918,450	$	(11,201,404	)	$	91,717,046

Loan facilities	Borrowers	As of December 31, 2022			As of March 31, 2023
$18.0 Million Term Loan Facility	Rocket- Gamora		13,250,000			12,575,000
Total long-term debt		$	13,250,000		$	12,575,000
Less: Deferred financing costs			(180,526	)		(155,056	)
Total long-term debt, net of deferred finance costs			13,069,474			12,419,944

Presented:
Current portion of long-term debt		$	2,700,000		$	2,700,000
Less: Current portion of deferred finance costs			(93,698	)		(82,515	)
Current portion of long-term debt, net of deferred finance costs		$	2,606,302		$	2,617,485

Non-Current portion of long-term debt			10,550,000			9,875,000
Less: Non-Current portion of deferred finance costs			(86,828	)		(72,541	)
Non-Current portion of long-term debt, net of deferred finance costs		$	10,463,172		$	9,802,459

Twelve-month period ending March 31,	Amount
2024	$	2,700,000
2025		2,700,000
2026		7,175,000
Total long-term debt	$	12,575,000

	Three months ended March 31,			Three months ended March 31,
Voyage expenses	2022			2023
Brokerage commissions		344,067			74,565
Brokerage commissions- related party		213,836			394,803
Port & other expenses		1,818,548			55,368
Bunkers consumption		4,864,872			—
Gain on bunkers		(6	)		(5,939	)
Total Voyage expenses	$	7,241,317		$	518,797

	Three months ended March 31, 2022									Three months ended March 31, 2023
	Aframax tanker segment			Handysize tanker segment			Total			Aframax tanker segment			Handysize tanker segment			Total
- Time charter revenues	$	2,986,345		$	—		$	2,986,345			1,906,250		$	—			1,906,250
- Voyage charter revenues		10,734,868			—			10,734,868			7,930			—			7,930
- Pool revenues		1,190,819			1,918,416			3,109,235			25,379,990			3,859,984			29,239,974
Total vessel revenues	$	14,912,032		$	1,918,416		$	16,830,448		$	27,294,170		$	3,859,984		$	31,154,154
Voyage expenses (including charges from related parties)		(7,204,148	)		(37,169	)		(7,241,317	)		(467,029	)		(51,768	)		(518,797	)
Vessel operating Expenses		(4,208,099	)		(1,028,614	)		(5,236,713	)		(3,915,402	)		(1,201,119	)		(5,116,521	)
Management fees to related parties		(535,500	)		(153,000	)		(688,500	)		(526,500	)		(175,500	)		(702,000	)
Recovery of Provision for doubtful accounts		—			—			—			266,732			—			266,732
Depreciation and Amortization		(1,460,033	)		(348,964	)		(1,808,997	)		(1,689,735	)		(365,911	)		(2,055,646	)

Segments operating income	$	1,504,252		$	350,669		$	1,854,921		$	20,962,236		$	2,065,686		$	23,027,922
Interest and finance costs								(184,222	)								(317,673	)
Interest income								615									435,429

Foreign exchange gains/(losses)		22			(10,000	)
Less: Unallocated corporate general and administrative expenses (including related parties)		(286,444	)		(983,264	)
Net income and comprehensive income, before taxes	$	1,384,892		$	22,152,414

	As of December 31, 2022			As of March 31, 2023
Aframax/LR2 tanker segment	$	134,093,677		$	122,599,174
Handysize tanker segment		23,385,458			20,241,587
Cash and cash equivalents⁽¹⁾		(32	)		35,795,410
Prepaid expenses and other assets⁽¹⁾		—			(157,096	)
Total assets	$	157,479,103		$	178,479,075

	Three months ended March 31, 2022			Three months ended March 31, 2023			Change - Amount
Total vessel revenues	$	16,830,448		$	31,154,154		$	14,323,706
Expenses:
Voyage expenses (including commissions to related party)		(7,241,317	)		(518,797	)		6,722,520
Vessel operating expenses		(5,236,713	)		(5,116,521	)		120,192
Management fees to related parties		(688,500	)		(702,000	)		(13,500	)
Depreciation and amortization		(1,808,997	)		(2,055,646	)		(246,649	)
General and administrative expenses (including costs from related parties)		(286,444	)		(983,264	)		(696,820	)
Recovery of provision for doubtful accounts		—			266,732			266,732
Operating income		1,568,477			22,044,658			20,476,181
Interest and finance costs, net⁽¹⁾		(183,607	)		117,756			301,363
Foreign exchange gains/(losses)		22			(10,000	)		(10,022	)
US source income taxes		(151,761	)		(193,201	)		(41,440	)
Net income and comprehensive income	$	1,233,131		$	21,959,213		$	20,726,082
Dividend on Series A Preferred Shares		—			(97,222	)		(97,222	)
Deemed dividend on Series A Preferred Shares		—			(200,255	)		(200,255	)
Net income attributable to common shareholders	$	1,233,131		$	21,661,736		$	20,428,605
Earnings per common share, basic		0.13			2.29
Earnings per common share, diluted		0.02			0.35
Weighted average number of common shares, basic		9,461,009			9,461,009
Weighted average number of common shares, diluted		61,898,567			61,898,567

	Three months ended March 31, 2022			Three months ended March 31, 2023				Change – amount
Total vessel revenues	$	14,912,032		$	27,294,170			$	12,382,138
Expenses:
Voyage expenses (including commissions to related party)		(7,204,148	)			(467,029	)		6,737,119
Vessel operating expenses		(4,208,099	)			(3,915,402	)		292,697
Management fees to related parties		(535,500	)			(526,500	)		9,000
Depreciation and amortization		(1,460,033	)			(1,689,735	)		(229,702	)
Recovery of provision for doubtful accounts		—				266,732			266,732
Segment operating income	$	1,504,252		$		20,962,236		$	19,457,984

	For the three months ended			For the three months ended
	March 31, 2022			March 31, 2023
Net cash (used in)/provided by operating activities		(2,502,045	)		28,642,118
Net cash used in by investing activities		(327,792	)		(181,498	)
Net cash used in financing activities		(2,117,578	)		(3,033,481	)

	Three months ended March 31,			Three months ended March 31,
	2022			2023
Total vessel revenues	$	16,830,448		$	31,154,154
Voyage expenses – including commissions from related party		(7,241,317	)		(518,797	)
TCE revenues	$	9,589,131		$	30,635,357
Available Days		810			677
Daily TCE Rate	$	11,838		$	45,252