Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

Share Name	Share Symbol	Market	Type
Toro Corporation	NASDAQ:TORO	NASDAQ	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	2.96	2.95	3.04				2	09:13:03

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2024

Commission File Number: 001-41561

TORO CORP.

(Translation of registrant’s name into English)

223 Christodoulou Chatzipavlou Street, Hawaii Royal Gardens, 3036 Limassol, Cyprus

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒

Form 40-F ☐

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached to this report on Form 6-K as Exhibits 99.1 and 99.2 are the unaudited consolidated interim financial statements and related management’s discussion and analysis of financial condition and results of operations of Toro Corp. for the three months ended March 31, 2024.

The information contained in this report on Form 6-K and Exhibits 99.1 and 99.2 attached hereto are hereby incorporated by reference into the Company’s registration statements on Form F-3 (File Nos. 333-275477 and 333-275478).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TORO CORP.
Dated: May 10, 2024
	By:	/s/ Petros Panagiotidis
		Petros Panagiotidis
		Chairman and Chief Executive Officer

Exhibit 99.1

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the financial condition and results of operations of Toro Corp. (“Toro”) for the three months ended March 31, 2023, and March 31, 2024. Unless otherwise specified herein or the context otherwise requires, references to the “Company”, “we”, “our” and “us” or similar terms shall include Toro and its wholly owned subsidiaries. You should read the following discussion and analysis together with the unaudited interim condensed consolidated financial statements and related notes included elsewhere in this report. Amounts relating to percentage variations in period-on-period comparisons shown in this section are derived from those unaudited interim condensed consolidated financial statements. The following discussion contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. These forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control which could cause actual results, cash flows, financial positions, events or conditions to differ materially from those currently anticipated and expressed or implied by such forward-looking statements. For a more complete discussion of these risks and uncertainties, please read the sections entitled “Cautionary Statement Regarding Forward-Looking Statements” and “Item 3. Key Information—D. Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2023 (the “2023 Annual Report”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 12, 2024. For additional information relating to our management’s discussion and analysis of financial conditions and results of operations, please see our 2023 Annual Report. Unless otherwise defined herein, capitalized terms and expressions used herein shall have the same meanings ascribed to them in the 2023 Annual Report.

Business Overview and Fleet Information

We are an independent, growth-oriented shipping company that was incorporated under the laws of the Republic of the Marshall Islands in July 2022 by Castor Maritime Inc. (“Castor”) to serve as the holding company of Castor’s former tanker owning subsidiaries and Elektra Shipping Co. (formerly owning the M/T Wonder Arcturus) in connection with the spin-off of Castor’s tanker business into an independent, publicly traded company (the “Spin-Off”). The Spin-Off was completed on March 7, 2023, on which date we began to trade as an independent publicly listed company. For further information regarding the Spin-Off, refer to the 2023 Annual Report.

We acquire, own, charter and operate oceangoing tanker and LPG carrier vessels and provide worldwide seaborne transportation services for refined petroleum products and liquefied petroleum gas (“LPG”).

As of May 9, 2024, we operated a fleet of five vessels that engages in the worldwide transportation of refined petroleum products and liquefied petroleum gas and is comprised of (i) one Handysize tanker, which transports refined petroleum products, and (ii) four LPG carriers 5,000 cbm each, which transport LPG. Our fleet has an aggregate cargo carrying capacity of 0.1 million dwt and an average age of 9.8 years. During the three months ended March 31, 2023, we operated a fleet of (i) five Aframax/LR2 tankers and one Aframax tanker which transported crude oil, and (ii) two Handysize tankers, which transported refined petroleum products. As a result of the different characteristics of the transport of crude oil (carried by Aframax/LR2 tankers), refined petroleum products (carried by Handysize tanker vessels) and LPG (carried by LPG carriers), as well as differences in the nature of trade, trading routes, charterers and cargo handling of LPG, refined petroleum products and crude oil, we have determined that during the three months ended March 31, 2024, we operated in three reportable segments: (i) the Aframax/LR2 tanker segment, (ii) the Handysize tanker segment and (iii) the LPG carrier segment. Following completion of the sale of the M/T Wonder Sirius on January 24, 2024, as discussed below, the Company no longer has any Aframax/LR2 vessels and management has determined that, with effect from the second quarter of 2024, the Company operates in two reportable segments: (i) the Handysize tanker segment and (ii) the LPG carrier segment.

Our fleet is currently contracted to operate in a mix of pool and time charters. Our commercial strategy primarily focuses on deploying our fleet under a mix of pools, voyage charters and time charters according to our assessment of market conditions. We adjust the mix of these charters to take advantage of the relatively stable cash flows and high utilization rates for our vessels associated with period time charters, to profit from attractive trip charter rates during periods of strong charter market conditions associated with voyage charters or to take advantage of high utilization rates for our vessels along with exposure to attractive charter rates during periods of strong charter market conditions when employing our vessels in pools.

With effect from July 1, 2022, Castor Ships S.A. (“Castor Ships”) provides ship management and chartering services to the vessels through subcontracting agreements with unrelated third-party managers.

The following table summarizes key information about our fleet as of May 9, 2024:

Fleet vessels:

Vessel

Name

Capacity

(dwt)

Year

Built

Country of

Construction

Type of

Charter

Gross Charter

Rate ($/day)

Estimated

Earliest Charter

Expiration

Estimated

Latest Charter

Expiration

Handysize Segment

M/T Wonder

Mimosa

36,718

2006

S. Korea

Tanker Pool⁽¹⁾

N/A

LPG Carrier

Segment

LPG Dream

Terrax

4,743

2020

Japan

Time Charter Period⁽²⁾

310,000 per month

August 2024

August 2025

LPG Dream

Arrax

4,753

2015

Japan

Time Charter Period⁽³⁾

323,000 per month

May 2025

May 2026

LPG Dream

Syrax

5,158

2015

Japan

Time Charter Period⁽⁴⁾

308,500 per month

May 2024

LPG Dream

Vermax

5,155

2015

Japan

Time Charter Period⁽⁵⁾

318,000 per month

March 2025

March 2026

(1)	The vessel is currently participating in an unaffiliated tanker pool specializing in the employment of Handysize tanker vessels.

(2)	The vessel has been fixed under a time charter period contract of twelve months at $310,000 per month plus twelve months at $320,000 per month at the charterer’s option.

(3)	The vessel has been fixed under a time charter period contract of twelve months at $323,000 per month plus twelve months at $335,000 per month at the charterer’s option.

(4)

Immediately after redelivery from the current charter, estimated to take place on May 20, 2024, in accordance with the prevailing charter party terms, the vessel will be fixed under a time charter period contract of twelve months at a gross charter rate equal to $323,000 per month plus twelve months at the charterer’s option. The rate for the optional period will be increased at a rate between 2% and 6% to be mutually agreed between us and the charterers.

(5)	The vessel has been fixed under a time charter period contract of twelve months at $318,000 per month plus twelve months at the charterer’s option at a rate to be mutually agreed by us and the charterers.

Recent Developments

Please refer to Note 17 to our unaudited interim condensed consolidated financial statements for developments that took place after March 31, 2024.

Operating Results

Principal factors impacting our business, results of operations and financial condition

Our results of operations are affected by numerous factors. The principal factors that have impacted the business during the fiscal periods presented in the following discussion and analysis and that are likely to continue to impact our business are the following:

•	The levels of demand and supply of seaborne cargoes and vessel tonnage in the shipping industries in which we operate;

•	The cyclical nature of the shipping industry in general and its impact on charter and freight rates and vessel values;

•	The successful implementation of our business strategy, including the ability to obtain equity and debt financing at acceptable and attractive terms to fund future capital expenditures and/or to implement this business strategy;

•	The global economic growth outlook and trends;

•

Economic, regulatory, political and governmental conditions that affect shipping and the tanker shipping industry, including international conflict or war (or threatened war), such as between Russia and Ukraine and in the Middle East, and acts of piracy or maritime aggression, such as recent maritime incidents involving vessels in and around the Red Sea;

•	The employment and operation of our fleet including the utilization rates of our vessels;

•	The ability to successfully employ our vessels at economically attractive rates and the strategic decisions regarding the employment mix of our fleet in the voyage, time charter and pool markets, as our charters expire or are otherwise terminated;

•	Management of the operational, financial, general and administrative elements involved in the conduct of our business and ownership of our fleet, including the effective and efficient management of our fleet by our manager and its sub-managers, and each of their suppliers;

•	The number of charterers and pool operators who use our services and the performance of their obligations under their agreements, including their ability to make timely payments to us;

•	The ability to maintain solid working relationships with our existing charterers and pool operators and our ability to increase the number of our charterers through the development of new working relationships;

•	The vetting approvals requested by oil majors and the Chemical Distribution Institute (CDI) for the vessels managed by our manager and/or sub-managers;

•	Dry-docking and special survey costs and duration, both expected and unexpected;

•	Our borrowing levels and the finance costs related to our outstanding debt as well as our compliance with our debt covenants;

•	Management of our financial resources, including banking relationships and of the relationships with our various stakeholders;

•	Major outbreaks of diseases and governmental responses thereto; and

•	The level of any distribution on all classes of our shares.

These factors are volatile and in certain cases may not be within our control. Accordingly, past performance is not necessarily indicative of future performance, and it is difficult to predict future performance with any degree of certainty. See also “Item 3. Key Information—D. Risk Factors” in our 2023 Annual Report.

Employment and operation of our fleet

A significant factor that impacts our profitability is the employment and operation of our fleet. The profitable employment of our fleet is highly dependent on the levels of demand and supply in the shipping segments in which we operate, our commercial strategy including the decisions regarding the employment mix of our fleet among time and voyage charters and pool arrangements, as well as our manager’s and sub-manager’s ability to leverage our relationships with existing or potential customers. As a new entrant to the tankers and LPG carriers’ business, our customer base is currently concentrated to a small number of charterers and a single pool manager. The breadth of our customer base has historically had an impact on the profitability of our business and in the three months ended March 31, 2024, 44% of our revenues were earned on pool arrangements entered into with two pool managers and 45% of our revenues were earned on time charters entered into with four different charterers. Further, the effective operation of our fleet mainly requires regular maintenance and repair, effective crew selection and training, ongoing supply of our fleet with the spares and the stores that it requires, contingency response planning, auditing of our vessels’ onboard safety procedures, arrangements for our vessels’ insurance, chartering of the vessels, training of onboard and on shore personnel with respect to the vessels’ security and security response plans (ISPS), obtaining of ISM certifications, compliance with environmental regulations and standards and performing the necessary audit for the vessels within the year of taking over a vessel and the ongoing performance monitoring of the vessels.

Financial, general and administrative management

The management of financial, general and administrative elements involved in the conduct of our business and ownership of our vessels requires us to manage our financial resources, which includes managing banking relationships, administrating our bank accounts, managing our accounting system, records and financial reporting, monitoring and ensuring compliance with the legal and regulatory requirements affecting our business and assets and managing our relationships with our service providers and customers.

Important Measures and Definitions for Analyzing Results of Operations

Our management uses the following metrics to evaluate our operating results, including our operating results at the segment level, and to allocate capital accordingly:

Total vessel revenues. Total vessel revenues are generated from voyage charters, time charters and pool arrangements. Total vessel revenues are affected by the number of vessels in our fleet, hire and freight rates and the number of days a vessel operates which, in turn, are affected by several factors, including the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in dry-dock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels, and levels of supply and demand in the seaborne transportation market. Total vessel revenues are also affected by our commercial strategy related to the employment mix of our fleet between vessels on time charters, vessels operating on voyage charters and vessels in pools.

We measure revenues in each segment for three separate activities: (i) time charter revenues, (ii) voyage charter revenues, and (iii) pool revenues.

Voyage expenses. Our voyage expenses primarily consist of bunker expenses, port and canal expenses and brokerage commissions paid in connection with the chartering of our vessels. Voyage expenses are incurred primarily during voyage charters or when the vessel is repositioning or unemployed. Bunker expenses, port and canal dues increase in periods during which vessels are employed on voyage charters because these expenses are in this case borne by us. Under a time charter, the charterer pays substantially all the vessel voyage related expenses. Under pooling arrangements, voyage expenses are borne by the pool operator. Gain/loss on bunkers may also arise where the cost of the bunker fuel sold to the new charterer is greater or less than the cost of the bunker fuel acquired.

Operating expenses. We are responsible for vessel operating costs, which include crewing, expenses for repairs and maintenance, the cost of insurance, tonnage taxes, the cost of spares and consumable stores, lubricating oils costs, communication expenses and other expenses. Expenses for repairs and maintenance tend to fluctuate from period to period because most repairs and maintenance typically occur during periodic dry-docking. Our ability to control our vessels’ operating expenses also affects our financial results. Daily vessel operating expenses are calculated by dividing fleet operating expenses by the Ownership Days for the relevant period.

Management fees. Management fees include fees paid to related parties providing certain ship management services to our fleet pursuant to ship management agreements with Castor Ships.

Off-hire. Off-hire is the period our fleet is unable to perform the services for which it is required under a charter for reasons such as scheduled repairs, vessel upgrades, dry-dockings or special or intermediate surveys or other unforeseen events.

Dry-docking/Special Surveys. We periodically dry-dock and/or perform special surveys on our fleet for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements. Our ability to control our dry-docking and special survey expenses and our ability to complete our scheduled dry-dockings and/or special surveys on time also affects our financial results. Dry-docking and special survey costs are accounted for under the deferral method whereby the actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due.

Ownership Days. Ownership Days are the total number of calendar days in a period during which we owned a vessel. Ownership Days are an indicator of the size of our fleet over a period and determine both the level of revenues and expenses recorded during that specific period.

Available Days. Available Days are the Ownership Days in a period less the aggregate number of days our vessels are off-hire due to scheduled repairs, dry-dockings or special or intermediate surveys. The shipping industry uses Available Days to measure the aggregate number of days in a period during which vessels are available to generate revenues. Our calculation of Available Days may not be comparable to that reported by other companies.

Operating Days. Operating Days are the Available Days in a period after subtracting unscheduled off-hire and idle days.

Fleet Utilization. Fleet Utilization is calculated by dividing the Operating Days during a period by the number of Available Days during that period. Fleet Utilization is used to measure a company’s ability to efficiently find suitable employment for its vessels and minimize the number of days that its vessels are off-hire for reasons such as major repairs, vessel upgrades, dry-dockings or special or intermediate surveys and other unforeseen events.

Daily Time Charter Equivalent Rate (“Daily TCE Rate”). See Appendix A for a description of the Daily TCE Rate.

Results of Operations

Consolidated Results of Operations

Three months ended March 31, 2024, as compared to the three months ended March 31, 2023

	Three months ended March 31, 2023			Three months ended March 31, 2024			Change –amount
Total vessel revenues	$	31,154,154		$	7,005,829		$	(24,148,325	)
Expenses:
Voyage expenses (including commissions to related party)		(518,797	)		(494,990	)		23,807
Vessel operating expenses		(5,116,521	)		(2,557,847	)		2,558,674
Management fees to related parties		(702,000	)		(497,681	)		204,319
Depreciation and amortization		(2,055,646	)		(1,191,615	)		864,031
General and administrative expenses (including costs from related parties)		(983,264	)		(2,257,574	)		(1,274,310	)
Recovery of provision/ (provision) for doubtful accounts		266,732			(25,369	)		(292,101	)
Gain on sale of vessel		—			19,559,432			19,559,432
Operating income	$	22,044,658		$	19,540,185			(2,504,473	)
Interest and finance costs, net⁽¹⁾		117,756			1,976,642			1,858,886
Foreign exchange (losses)/ gains		(10,000	)		1,085			11,085
Dividend income from related party		—			631,944			631,944
Income taxes		(193,201	)		(22,497	)		170,704
Net income and comprehensive income	$	21,959,213		$	22,127,359		$	168,146

(1)	Includes interest and finance costs, net of interest income, if any.

Total vessel revenues

Total vessel revenues, net of charterers’ commissions, decreased to $7.0 million in the three months ended March 31, 2024, from $31.2 million in the same period in 2023. This decrease of $24.2 million was mainly associated with the (i) reduction in the Available Days of the Aframax/LR2 vessels in our fleet to 24 days in the three months ended March 31, 2024, from 540 days in the corresponding period in 2023, due to the sale of five of our six Aframax/LR2 vessels in 2023 and of the M/T Wonder Sirius on January 24, 2024, and (ii) decrease of the Daily TCE Rate to $13,593 in the three months ended March 31, 2024, from $45,252 in the same period in 2023, mainly due to the change in the mix of our fleet following the addition of the LPG vessels which earn a lower Daily TCE Rate than the Handysize and Aframax/LR2 tanker vessels due to their size and the trade they operate in. Daily TCE Rate is not a recognized measure under U.S. GAAP. Please refer to Appendix A for the definition and reconciliation of this measure to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

Voyage expenses

Voyage expenses for our fleet amounted to $0.5 million in the three months ended March 31, 2024, unchanged versus the same period in 2023.

Vessel Operating Expenses

The decrease in vessel operating expenses by $2.5 million, to $2.6 million in the three months ended March 31, 2024, from $5.1 million in the same period of 2023, mainly reflects the decrease (i) in the daily vessel operating expenses of the vessels in our fleet to $5,340 in the three months ended March 31, 2024, from $7,106 in the same period in 2023, mainly due to the change in the mix of our fleet following the addition of the LPG vessels which incur lower daily vessel operating expenses than the Handysize and Aframax/LR2 tanker vessels due to their size and (ii) in the Ownership Days of our fleet to 479 days in the three months ended March 31, 2024, from 720 days in the corresponding period in 2023 due to the decrease of the average number of operating vessels to 5.3 vessels in the three months ended March 31, 2024, from 8.0 vessels in the same period of 2023.

Management Fees

Management fees decreased to $0.5 million in the three months ended March 31, 2024, from $0.7 million in the same period of 2023, as a result of the decrease in the Ownership Days of our fleet, partly offset by the increased management fees with effect from July 1, 2023, from $975 per vessel per day to $1,039 per vessel per day which were adjusted for inflation in accordance with the terms of the master management agreement, between the Company, the Company’s shipowning subsidiaries and Castor Ships, effective from July 1, 2022.

Depreciation and Amortization

Depreciation expenses for our fleet decreased to $1.1 million in the three months ended March 31, 2024, from $1.6 million in the same period in 2023 as a result of the decrease in the Ownership Days of our fleet. Dry-dock and special survey amortization charges amounted to $0.1 million for the three months ended March 31, 2024, compared to a charge of $0.5 million in the three months ended March 31, 2023. This decrease in dry-dock amortization charges primarily resulted from the decrease in dry-dock amortization days from 289 days in the three months ended March 31, 2023, to 99 dry-dock amortization days in the three months ended March 31, 2024.

General and Administrative Expenses

General and administrative expenses in the three months ended March 31, 2024, amounted to $2.3 million, whereas, in the same period in 2023, general and administrative expenses totaled $1.0 million. This increase is mainly associated with the stock based compensation cost for non-vested shares granted under our Equity Incentive Plan amounting to $1.2 million. For the period from January 1, 2023 through March 7, 2023 (completion of Spin-Off), General and administrative expenses reflect the expense allocations made to the Company by Castor based on the proportion of the number of Ownership Days of our fleet vessels to the total Ownership Days of Castor’s full fleet.

Gain on sale of vessel

On January 24, 2024, we concluded the sale of the M/T Wonder Sirius which we sold, pursuant to an agreement dated January 8, 2024, for cash consideration of $33.8 million. The sale resulted in net proceeds to the Company of $32.5 million and the Company recorded a gain on the sale of $19.6 million in the first quarter of 2024.

Interest and finance costs, net

Interest and finance costs, net, amounted to $(2.0) million in the three months ended March 31, 2024, whereas in the same period of 2023, interest and finance costs, net amounted to $(0.1) million. This variation is mainly due to higher cash balances compared to the same period of 2023 and the increase in interest income for the three months ended March 31, 2024 on our available cash, which more than offset an increase in the weighted average interest rate on our long-term debt, consisting of the $18.0 million senior secured credit facility that was repaid in January 2024, from 7.8% in the three months ended March 31, 2023 to 8.6% in the same period of 2024.

Three months ended March 31, 2024, as compared to the three months ended March 31, 2023 — Aframax/LR2 Tanker Segment

	Three months ended March 31, 2023			Three months ended March 31, 2024				Change –amount
Total vessel revenues	$	27,294,170		$	586,367			$	(26,707,803	)
Expenses:
Voyage expenses (including commissions to related party)		(467,029	)			(12,266	)		454,763
Vessel operating expenses		(3,915,402	)			(307,057	)		3,608,345
Management fees to related parties		(526,500	)			(24,936	)		501,564
Depreciation and amortization		(1,689,735	)			(35,305	)		1,654,430
Recovery of provision for doubtful accounts		266,732				—			(266,732	)
Gain on sale of vessel		—				19,559,432			19,559,432
Segment operating income	$	20,962,236			$	19,766,235		$	(1,196,001	)

Total vessel revenues

Total vessel revenues, net of charterers’ commissions, for our Aframax/LR2 tanker segment amounted to $0.6 million in the three months ended March 31, 2024, as compared to $27.3 million in the same period of 2023. This decrease of $26.7 million is mainly due to the decrease in the Available Days of our Aframax/LR2 vessels in our fleet to 24 days in the three months ended March 31, 2024, from 540 days in the corresponding period in 2023, as the result of the sale of the (i) M/T Wonder Bellatrix on June 22, 2023, (ii) M/T Wonder Polaris on June 26, 2023, (iii) M/T Wonder Musica on July 6, 2023, (iv) M/T Wonder Avior on July 17, 2023, (v) M/T Wonder Vega on December 21, 2023 and (vi) M/T Wonder Sirius on January 24, 2024. During the three months ended March 31, 2024, our Aframax/LR2 tanker fleet earned an average Daily TCE Rate of $23,921, compared to an average Daily TCE Rate of $49,680 earned in the same period of 2023. Daily TCE Rate is not a recognized measure under U.S. GAAP. Please refer to Appendix A for the definition and reconciliation of this measure to Total vessel revenues, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

Voyage Expenses

Voyage expenses for our Aframax/LR2 tanker segment amounted to $0.01 million and $0.5 million in the three months ended March 31, 2024, and the same period of 2023, respectively. This decrease of $0.49 million is mainly associated with the reduction of Ownership Days of our Aframax/LR2 vessels, to 24 days in the three months ended March 31, 2024 from 540 days in the same period in 2023 due to the vessel sales described above.

Vessel Operating Expenses

The decrease in Operating expenses by $3.6 million, to $0.3 million in the three months ended March 31, 2024, from $3.9 million in the same period in 2023, mainly reflects the decrease in the Ownership Days of our Aframax/LR2 vessels to 24 days in the three months ended March 31, 2024, from 540 days in the same period in 2023 due to the vessel sales described above.

Management Fees

The decrease in Management fees by $0.48 million, to $0.02 million in the three months ended March 31, 2024, from $0.5 million in the same period in 2023, mainly reflects the decrease in the Ownership Days of our Aframax/LR2 tanker fleet, partially offset by the inflation-based adjustment in management fees that was effected on July 1, 2023, under the Master Management Agreement, which is discussed in more detail under “—Consolidated Results of Operations—Management Fees.”

Depreciation and Amortization

Depreciation expenses for our Aframax/LR2 tanker segment decreased to $0.02 million in the three months ended March 31, 2024, from $1.3 million in the same period in 2023, as a result of the decrease in the Ownership Days of our Aframax/LR2 tanker fleet. Dry-dock and special survey amortization charges in the three months ended March 31, 2024, of $0.02 million related only to the amortization of the M/T Wonder Sirius which underwent its scheduled dry-docking repairs during the fourth quarter of 2023 and was sold on January 24, 2024. Dry-dock and special survey amortization charges amounted to $0.4 million in the same period of 2023, related to the amortization of the M/T Wonder Musica and M/T Wonder Avior.

Gain on sale of vessel

Refer to discussion under “—Consolidated Results of Operations—Gain on sale of vessel” above for details on the sale of the M/T Wonder Sirius.

Three months ended March 31, 2024, as compared to the three months ended March 31, 2023— Handysize Tanker Segment

	Three months ended March 31, 2023			Three months ended March 31, 2024			Change –amount
Total vessel revenues	$	3,859,984		$	2,479,180		$	(1,380,804	)
Expenses:
Voyage expenses (including commissions to related party)		(51,768	)		(43,787	)		7,981
Vessel operating expenses		(1,201,119	)		(587,743	)		613,376
Management fees to related parties		(175,500	)		(94,549	)		80,951
Depreciation and amortization		(365,911	)		(228,548	)		137,363
Segment operating income	$	2,065,686		$	1,524,553		$	(541,133	)

Total Vessel revenues

Total vessel revenues, net of charterers’ commissions for our Handysize tanker segment decreased to $2.5 million in the three months ended March 31, 2024, from $3.9 million in the same period in 2023. This decrease of $1.4 million was largely driven by the decrease in the Available Days of our Handysize vessels in our fleet to 91 days in the three months ended March 31, 2024, from 137 days in the corresponding period in 2023, as a result of the sale of M/T Wonder Formosa on November 16, 2023. During the three months ended March 31, 2024, our Handysize fleet earned on average a Daily TCE Rate of $26,763, compared to an average Daily TCE Rate of $27,797 earned during the same period in 2023. Daily TCE Rate is not a recognized measure under U.S. GAAP. Please refer to Appendix A for the definition and reconciliation of this measure to Total vessel revenues, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

Voyage Expenses

Voyage Expenses amounted to $0.1 million for our Handysize tanker segment in the three months ended March 31, 2024, unchanged compared to the same period in 2023.

Vessel Operating Expenses

The decrease in operating expenses for our Handysize tanker segment by $0.6 million, to $0.6 million in the three months ended March 31, 2024, from $1.2 million in the corresponding period of 2023, mainly reflects the decrease of the Ownership Days of our Handysize tanker fleet to 91 days in the three months ended March 31, 2024, from 180 days in the corresponding period in 2023.

Management Fees

Management fees for our Handysize tanker segment decreased to $0.1 million in the three months ended March 31, 2024, from $0.2 million in the same period in 2023, as a result of the decrease of the Ownership Days of our Handysize tanker fleet, partially offset by the increased management fees following the inflation-based adjustment in management fees that was effected on July 1, 2023, under the Master Management Agreement, which is discussed in more detail under “—Consolidated Results of Operations—Management Fees”.

Depreciation and Amortization

Depreciation expenses for our Handysize tanker segment decreased to $0.1 million in the three months ended March 31, 2024, from $0.3 million in the same period in 2023, as a result of the decrease in the Ownership Days of our Handysize tanker fleet. Dry-dock amortization charges in the three months ended March 31, 2024, amounted to $0.1 million, related to the amortization of the M/T Wonder Mimosa. Dry-dock and special survey amortization charges amounted to $0.1 million in the same period of 2023, related to the amortization of the M/T Wonder Mimosa and the M/T Wonder Formosa which underwent its scheduled dry-dock and special survey in the first quarter of 2023 and was sold on November 16, 2023.

Three months ended March 31, 2024— LPG Carrier Segment

We entered the LPG business in the second quarter of 2023 and, accordingly, no comparative financial information exists for the three months ended March 31, 2023.

	Three months ended March 31, 2024
Total vessel revenues	$	3,940,282
Expenses:
Voyage expenses (including commissions to related party)		(438,937	)
Vessel operating expenses		(1,663,047	)
Management fees to related parties		(378,196	)
Depreciation and amortization		(927,762	)
Provision for doubtful accounts		(25,369	)
Segment Operating income	$	506,971

Total Vessel revenues

Total vessel revenues for our LPG carrier segment amounted to $3.9 million in the three months ended March 31, 2024. During the three months ended March 31, 2024, we owned on average 4.0 LPG carriers that earned a Daily TCE Rate of $9,619. Daily TCE Rate is not a recognized measure under U.S. GAAP. Please refer to Appendix A for the definition and reconciliation of this measure to Total vessel revenues, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP. During the three months ended March 31, 2024, our LPG carriers were engaged in voyage and time charters.

Voyage Expenses

Voyage expenses for our LPG carrier segment amounted to $0.4 million in the three months ended March 31, 2024, mainly comprised bunkers’ consumption costs and brokerage commissions.

Vessel Operating Expenses

Operating expenses for our LPG carrier segment amounted to $1.7 million in the three months ended March 31, 2024, mainly comprised crew wages costs, stores, spares and insurance costs.

Management Fees

Management fees for our LPG carrier segment amounted to $0.4 million in the three months ended March 31, 2024.

Depreciation and Amortization

Depreciation and amortization expenses amounted to $0.9 million in the three months ended March 31, 2024 and exclusively relate to vessels’ depreciation.

Liquidity and Capital Resources

We operate in a capital-intensive industry, and we expect to finance the purchase of additional vessels and other capital expenditures through a combination of cash from operations, proceeds from equity offerings, and borrowings from debt transactions. Our liquidity requirements relate to funding capital expenditures and working capital (which includes maintaining the quality of our vessels and complying with international shipping standards and environmental laws and regulations). In accordance with our business strategy, other liquidity needs may relate to funding potential investments in new vessels and maintaining cash reserves against fluctuations in operating cash flows. Our funding and treasury activities are intended to maximize investment returns while maintaining appropriate liquidity.

For the three months ended March 31, 2024, our principal sources of funds were cash from operations and the net proceeds from the sale of the M/T Wonder Sirius.

As of March 31, 2024, and December 31, 2023, we had cash and cash equivalents of $186.4 million and $155.2 million, respectively, which excludes $0 million and $0.4 million of restricted cash in each period under our debt agreements, respectively. Cash and cash equivalents are primarily held in U.S. dollars.

Working capital is equal to current assets minus current liabilities. As of March 31, 2024 and December 31, 2023, we had a working capital surplus of $187.1 million and $157.3 million, respectively.

We believe that our current sources of funds and those that we anticipate to internally generate for a period of at least the next twelve months from March 31, 2024, will be sufficient to fund the operations of our fleet and meet our normal working capital requirements for that period and for the foreseeable future.

Our medium- and long-term liquidity requirements relate to the funding of cash dividends on our Series A Preferred Shares, when declared, and expenditures relating to the operation and maintenance of our vessels. Sources of funding for our medium- and long-term liquidity requirements include cash flows from operations or new debt financing, if required.

Our Borrowing Activities

Please refer to Note 6 to our unaudited interim condensed consolidated financial statements, included elsewhere herein, for information regarding our borrowing activities as of March 31, 2024.

Cash Flows

The following table summarizes our net cash flows provided by/(used in) operating, investing and financing activities for the three months ended March 31, 2024 and the three months ended March 31, 2023:

	For the three months ended			For the three months ended
	March 31, 2023			March 31, 2024
Net cash provided by operating activities	$	28,642,118		$	7,706,420
Net cash (used in)/ provided by investing activities	$	(181,498	)	$	32,455,460
Net cash used in financing activities	$	(3,033,481	)	$	(9,335,208	)

Operating Activities: Net cash provided by operating activities amounted to $7.7 million for the three months ended March 31, 2024, consisting of net income of $22.1 million, with non-cash adjustment for the gain on sale of the M/T Wonder Sirius of $19.6 million, non-cash adjustments related to depreciation and amortization of $1.2 million, amortization of deferred finance charges and provision for doubtful accounts of $0.1 million, a payment of dry-dock costs of $0.6 million, stock compensation cost of $1.2 million and a net decrease of $3.3 million in working capital which mainly derived from (i) a decrease in accounts receivable by $1.9 million, (ii) a decrease in ‘Due from/to related parties’ by $1.4 million and (iii) an increase in accounts payable by $0.8 million. For the three months ended March 31, 2023, net cash provided by operating activities amounted to $28.6 million, consisting of net income of $22.0 million, non-cash adjustments related to depreciation and amortization of $2.0 million, a payment of dry-dock costs of $1.2 million and a net decrease of $5.8 million in working capital which mainly derived from (i) a decrease in accounts receivable by $4.7 million, (ii) an increase in ‘Due from/to related parties’ by $1.0 million and (iii) a decrease in accounts payable by $1.0 million. The $20.9 million decrease in net cash provided by operating activities in the three months ended March 31, 2024, as compared with the same period of 2023, reflects mainly the gain on sale of the aforementioned vessel.

Investing Activities: Net cash provided by investing activities in the three months ended March 31, 2024 amounted to $32.4 million and mainly reflects the net proceeds from the sale of the M/T Wonder Sirius amounting to $32.5 million, partially offset by payment of vessel improvements. Net cash used in investing activities in the three months ended March 31, 2023 amounting to $0.2 million mainly reflects the payments of BWTS installation expenses.

Financing Activities: Net cash used in financing activities during the three months ended March 31, 2024 amounted to $9.3 million and relates to (i) $5.3 million for the early repayment of the outstanding portion of the $18.0 million term loan facility which was secured by M/T Wonder Sirius, (ii) payment for repurchase of common shares under the Company’s share repurchase program amounting to $3.7 million and (iii) payment to Castor of a dividend on the Series A Preferred Shares for the period from October 15, 2023 to January 14, 2024 amounting to $0.3 million. Net cash used in financing activities during the three months ended March 31, 2023 amounted to $3.0 million and relates to (i) Spin-Off expenses incurred by Castor on our behalf in the amount of $2.5 million, which were reimbursed by us pursuant to the Contribution and Spin-Off Distribution Agreement entered into between us and Castor on February 24, 2023 (ii) $0.7 million of periodic scheduled principal repayments in connection with our $18.0 million term loan facility, and (iii) a net increase in former parent company investment amounting to $0.2 million.

Critical Accounting Estimates

Critical accounting estimates are those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. We prepare our financial statements in accordance with U.S. GAAP. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. For more details on our Critical Accounting Estimates, please read “Item 5. Operating and Financial Review and Prospects—E. Critical Accounting Estimates” in our 2023 Annual Report. For a description of our significant accounting policies, please read Note 2 to our unaudited interim condensed consolidated financial statements, “Item 18. Financial Statements” in our 2023 Annual Report and more precisely “Note 2. Summary of Significant Accounting Policies” of our consolidated financial statements included in our 2023 Annual Report.

APPENDIX A

Non-GAAP Financial Information

Daily TCE Rate. The Daily Time Charter Equivalent Rate (“Daily TCE Rate”), is a measure of the average daily revenue performance of a vessel. The Daily TCE Rate is not a measure of financial performance under U.S. GAAP (i.e., it is a non-GAAP measure) and should not be considered as an alternative to any measure of financial performance presented in accordance with U.S. GAAP. We calculate Daily TCE Rate by dividing total revenues (time charter and/or voyage charter revenues, and/or pool revenues, net of charterers’ commissions), less voyage expenses, by the number of Available Days during that period. Under a time charter, the charterer pays substantially all the vessel voyage related expenses. However, we may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time or other charter, during periods of commercial waiting time or while off-hire during dry-docking or due to other unforeseen circumstances. Under voyage charters, the majority of voyage expenses are generally borne by us whereas for vessels in a pool, such expenses are borne by the pool operator. The Daily TCE Rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a company’s performance and, management believes that the Daily TCE Rate provides meaningful information to our investors because it compares daily net earnings generated by our vessels irrespective of the mix of charter types (e.g., time charter, voyage charter, pools) under which our vessels are employed between the periods while it further assists our management in making decisions regarding the deployment and use of our vessels and in evaluating our financial performance. Our calculation of the Daily TCE Rates may be different from and may not be comparable to that reported by other companies. The following table reconciles the calculation of the Daily TCE Rate for our fleet to Total vessel revenues, the most directly comparable U.S. GAAP financial measure, for the periods presented (amounts in U.S. dollars, except for Available Days):

Reconciliation of Daily TCE Rate to Total vessel revenues — Consolidated

	Three months ended March 31,			Three months ended March 31,
	2023			2024
Total vessel revenues	$	31,154,154		$	7,005,829
Voyage expenses – including commissions to related party		(518,797	)		(494,990	)
TCE revenues	$	30,635,357		$	6,510,839
Available Days		677			479
Daily TCE Rate	$	45,252		$	13,593

Reconciliation of Daily TCE Rate to Total vessel revenues — Aframax/LR2 Tanker Segment

	Three months ended March 31,			Three months ended March 31,
	2023			2024
Total vessel revenues	$	27,294,170		$	586,367
Voyage expenses – including commissions to related party		(467,029	)		(12,266	)
TCE revenues	$	26,827,141		$	574,101
Available Days		540			24
Daily TCE Rate	$	49,680		$	23,921

Reconciliation of Daily TCE Rate to Total vessel revenues — Handysize Tanker Segment

	Three months ended March 31,			Three months ended March 31,
	2023			2024
Total vessel revenues	$	3,859,984		$	2,479,180
Voyage expenses – including commissions to related party		(51,768	)		(43,787	)
TCE revenues	$	3,808,216		$	2,435,393
Available Days		137			91
Daily TCE Rate	$	27,797		$	26,763

Reconciliation of Daily TCE Rate to Total vessel revenues — LPG Carrier Segment

	Three months ended March 31,
	2024
Total vessel revenues	$	3,940,282
Voyage expenses – including commissions to related party		(438,937	)
TCE revenues	$	3,501,345
Available Days		364
Daily TCE Rate	$	9,619

Exhibit 99.2

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
Unaudited Condensed Consolidated Balance Sheets as of December 31, 2023, and March 31, 2024	F-2
Unaudited Interim Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2023 and 2024	F-3
Unaudited Condensed Consolidated Statements of Shareholders’ Equity and Mezzanine Equity for the three months ended March 31, 2023 and 2024	F-4
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2024	F-5
Notes to Unaudited Interim Condensed Consolidated Financial Statements	F-6

TORO CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2023 and March 31, 2024

(Expressed in U.S. Dollars – except for share data)

			December 31,			March 31,
ASSETS	Note		2023			2024
CURRENT ASSETS:
Cash and cash equivalents			$	155,235,401		$	186,412,073
Due from related parties, current		3		3,923,315			2,505,920
Accounts receivable trade, net				4,132,282			2,236,656
Inventories				260,555			420,372
Deferred charges, net				—			24,409
Prepaid expenses and other assets				1,584,015			775,649
Total current assets				165,135,568			192,375,079

NON-CURRENT ASSETS:
Vessels, net		3,5		88,708,051			75,956,293
Restricted cash		6		350,000			—
Due from related parties		3		1,590,501			1,590,501
Prepaid expenses and other assets, non-current				357,769			357,769
Deferred charges, net		4		1,420,574			100,872
Investment in related party		3		50,541,667			50,548,611
Total non-current assets				142,968,562			128,554,046
Total assets			$	308,104,130		$	320,929,125

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt, net		6		1,311,289			—
Due to related parties		3		315,000			318,889
Accounts payable				3,187,728			2,058,243
Deferred revenue				310,000			618,500
Accrued liabilities				2,735,007			2,326,311
Total current liabilities				7,859,024			5,321,943

NON-CURRENT LIABILITIES:
Long-term debt, net		6		3,902,497			—
Total non-current liabilities				3,902,497			—

Commitments and contingencies		10

MEZZANINE EQUITY:
1.00% Series A fixed rate cumulative perpetual convertible preferred shares:140,000 shares issued and outstanding as of December 31, 2023, and March 31, 2024, respectively, aggregate liquidation preference of $140,000,000 as of December 31, 2023, and March 31, 2024, respectively		8		119,601,410			120,352,788
Total mezzanine equity				119,601,410			120,352,788

SHAREHOLDERS’ EQUITY:
Common shares, $0.001 par value: 3,900,000,000 shares authorized; 19,021,758 and 18,978,409 shares issued; 18,978,409 and 18,333,853 shares (net of treasury shares) outstanding as of December 31, 2023, and March 31, 2024, respectively		7,11		19,022			18,978
Preferred shares, $0.001 par value: 100,000,000 shares authorized; Series B preferred shares: 40,000 shares issued and outstanding as of December 31, 2023, and March 31, 2024, respectively		7		40			40
Additional paid-in capital				57,244,290			58,239,605
Treasury shares: 43,349 and 644,556 shares as of December 31, 2023, and March 31, 2024, respectively		7		(223,840	)		(3,728,008	)
Retained Earnings				119,701,687			140,723,779
Total shareholders’ equity				176,741,199			195,254,394
Total liabilities, mezzanine equity and shareholders’ equity			$	308,104,130		$	320,929,125

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-2

TORO CORP.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three months ended March 31, 2023 and 2024

(Expressed in U.S. Dollars – except for share data)

			Three months ended March 31,			Three months ended March 31,
	Note		2023			2024
REVENUES:
Time charter revenues		13	$	1,906,250		$	3,179,490
Voyage charter revenues		13		7,930			762,148
Pool revenues		13		29,239,974			3,064,191
Total vessel revenues				31,154,154			7,005,829

EXPENSES:
Voyage expenses (including $394,803 and $87,938 to related party for the three months ended March 31, 2023 and 2024, respectively)		3,14		(518,797	)		(494,990	)
Vessel operating expenses		14		(5,116,521	)		(2,557,847	)
Management fees to related parties		3		(702,000	)		(497,681	)
Recovery of provision /(provision) for doubtful accounts				266,732			(25,369	)
Depreciation and amortization		4,5		(2,055,646	)		(1,191,615	)
General and administrative expenses (including $352,778 and $799,500 to related party for the three months ended March 31, 2023 and 2024, respectively)		3,11		(983,264	)		(2,257,574	)
Gain on sale of vessel		3,5		—			19,559,432
Total expenses			$	(9,109,496	)	$	12,534,356

Operating income			$	22,044,658		$	19,540,185

OTHER (EXPENSES)/INCOME:
Interest and finance costs		15		(317,673	)		(90,364	)
Interest income				435,429			2,067,006
Dividend income from related party		3,16		—			631,944
Foreign exchange (losses)/ gains				(10,000	)		1,085
Total other income, net			$	107,756		$	2,609,671

Net income, before taxes			$	22,152,414		$	22,149,856
Income taxes				(193,201	)		(22,497	)
Net income and comprehensive income			$	21,959,213		$	22,127,359
Dividend on Series A Preferred Shares		3,12		(97,222	)		(353,889	)
Deemed dividend on Series A Preferred Shares		8		(200,255	)		(751,378	)
Net income attributable to common shareholders			$	21,661,736		$	21,022,092
Earnings per common share, basic		12		2.29			1.11
Earnings per common share, diluted		12		0.35			0.51
Weighted average number of common shares, basic		12		9,461,009			17,739,362
Weighted average number of common shares, diluted		12		61,898,567			42,147,033

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-3

TORO CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND MEZZANINE EQUITY

For the three months ended March 31, 2023 and 2024

(Expressed in U.S. Dollars – except for share data)

														Treasury stock																		Mezzanine equity
	# of Series B Preferred Shares		Par Value of Preferred Series B shares		# of Common shares			Par Value of Common Shares			Additional Paid-in capital			# of shares			Amount			Due from Stockholder			Former Parent Company Investment			(Accumulated deficit)/Retained Earnings			Total Shareholders’ Equity			# of Series A Preferred Shares		Mezzanine Equity
Balance, December 31, 2022		—		—		1,000			1			—			—			—			(1	)		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			—		—
Cancellation of common shares due to spin off		—		—		(1,000	)		(1	)		—			—			—			1			—			—			—			—		—
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 (Note 8)		—		—		—			—			—			—			—			—			—			(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

Balance, December 31, 2023		40,000		40		19,021,758			19,022			57,244,290			(43,349	)		(223,840	)		—			—			119,701,687			176,741,199			140,000		119,601,410
Net income and comprehensive income		—		—		—			—			—			—			—			—			—			22,127,359			22,127,359			—		—
Stock based compensation cost (Note 11)		—		—		—			—			1,219,111			—			—			—			—			—			1,219,111			—		—
Repurchase of common shares (Note 7)		—		—		(43,349	)		(44	)		(223,796	)		(601,207	)		(3,504,168	)		—			—			—			(3,728,008	)		—		—
Dividend on Series A preferred shares (Note 8)		—		—		—			—			—			—			—			—			—			(353,889	)		(353,889	)		—		—
Deemed dividend on Series A preferred shares (Note 8)		—		—		—			—			—			—			—			—			—			(751,378	)		(751,378	)		—		751,378
Balance, March 31,2024		40,000		40		18,978,409			18,978			58,239,605			(644,556	)		(3,728,008	)		—			—			140,723,779			195,254,394			140,000		120,352,788

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-4

TORO CORP.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2023 and 2024

(Expressed in U.S. Dollars)

	Note		Three months ended March 31, 2023			Three months ended March 31, 2024
Cash Flows (used in)/provided by Operating Activities:
Net income			$	21,959,213		$	22,127,359
Adjustments to reconcile net income to net cash (used in)/provided by Operating activities:
Depreciation and amortization		4,5		2,055,646			1,191,615
Amortization of deferred finance charges		15		25,470			43,414
Gain on sale of vessel		5		—			(19,559,432	)
Provision for doubtful accounts				—			25,369
Stock based compensation cost		11		—			1,219,111
Changes in operating assets and liabilities:
Accounts receivable trade, net				4,666,840			1,869,936
Inventories				(28,717	)		(159,817	)
Due from/to related parties				(977,432	)		1,410,772
Prepaid expenses and other assets				216,904			808,366
Other deferred charges				—			(24,409	)
Accounts payable				973,238			(800,861	)
Accrued liabilities				493,785			(127,457	)
Deferred revenue				479,926			308,500
Dry-dock costs paid				(1,222,755	)		(626,046	)
Net Cash provided by Operating Activities				28,642,118			7,706,420

Cash flow (used in)/provided by Investing Activities:
Vessel acquisitions and other vessel improvements		5		(181,498	)		(34,660	)
Net proceeds from sale of vessel				—			32,490,120
Net cash (used in)/provided by Investing Activities				(181,498	)		32,455,460

Cash flows (used in)/provided by Financing Activities:
Net increase in Former Parent Company Investment				211,982			—
Issuance of Series B Preferred shares		7		40			—
Payment of Dividend on Series A Preferred Shares		8		—			(350,000	)
Payment for repurchase of common shares		7		—			(3,728,008	)
Repayment of long-term debt		6		(675,000	)		(5,257,200	)
Payments related to Spin-Off		3		(2,570,503	)		—
Net cash used in Financing Activities				(3,033,481	)		(9,335,208	)

Net increase in cash, cash equivalents, and restricted cash				25,427,139			30,826,672
Cash, cash equivalents and restricted cash at the beginning of the period				42,479,594			155,585,401
Cash, cash equivalents and restricted cash at the end of the period			$	67,906,733			186,412,073

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents			$	67,206,733			186,412,073
Restricted cash, non-current				700,000			—
Cash, cash equivalents, and restricted cash				67,906,733			186,412,073

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-5

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

1.	Basis of Presentation and General information:

Toro Corp. (“Toro”) was formed on July 29, 2022 as a wholly owned subsidiary of Castor Maritime Inc. (“Castor”, or the “Former Parent Company”) under the laws of the Republic of the Marshall Islands under the name Tankco Shipping Inc. and changed its name to Toro Corp. on September 29, 2022. On March 7, 2023 (the “Distribution Date”), Castor completed the Spin-Off (as defined herein) of Toro based on the terms approved by the independent disinterested directors of Castor following the recommendation of its special committee of independent disinterested directors. In the Spin-Off, Castor separated its tanker fleet from its dry bulk and container fleet by, among other actions, contributing to Toro its interest in the subsidiaries comprising its tanker fleet, each owning one tanker vessel and Elektra Shipping Co. (the “Toro Subsidiaries”) in exchange for (i) 9,461,009 common shares of Toro, (ii) the issuance to Castor of 140,000 1.00% Series A fixed rate cumulative perpetual convertible preferred shares of Toro (the “Series A Preferred Shares”) having a stated amount of $1,000 per share and a par value of $0.001 per share and (iii) the issuance at par to Pelagos Holdings Corp, a company controlled by the Toro’s Chairman and Chief Executive Officer, of 40,000 Series B preferred shares of Toro, par value $0.001 per share (the “Series B Preferred Shares”). Toro’s common shares were distributed on March 7, 2023 pro rata to the shareholders of record of Castor as of February 22, 2023 at a ratio of one Toro common share for every ten Castor common shares. The foregoing transactions are referred to collectively herein as the “Spin-Off”. Toro began trading on the Nasdaq Capital Market (the “Nasdaq”), under the symbol “TORO”.

In addition, Toro entered into various agreements effecting the separation of its business from Castor including a Contribution and Spin-Off Distribution Agreement entered into by Toro and Castor on February 24, 2023 (the “Contribution and Spin-Off Distribution Agreement”), pursuant to which, among other things, (i) Castor agreed to indemnify Toro and the Toro Subsidiaries for any and all obligations and other liabilities arising from or relating to the operation, management or employment of vessels or subsidiaries that Castor retained after the Distribution Date and Toro agreed to indemnify Castor for any and all obligations and other liabilities arising from or relating to the operation, management or employment of the vessels contributed to it or the Toro Subsidiaries, and (ii) Toro agreed to replace Castor as guarantor under the $18.0 senior secured credit facility with Alpha Bank S.A. (the “$18.0 Million Term Loan Facility”) upon completion of the Spin-Off. The Contribution and Spin-Off Distribution Agreement also provided for the settlement or extinguishment of certain liabilities and other obligations between Castor and Toro and provides Castor with certain registration rights relating to Toro’s common shares, if any, issued upon conversion of the Series A Preferred Shares issued to Castor in connection with the Spin-Off. Following the successful completion of the Spin Off on March 7, 2023, Toro reimbursed Castor for expenses related to the Spin-Off that were incurred by Castor, except for any of these expenses that were incurred or paid by any of Toro’s subsidiaries, after March 7, 2023.

The Spin-off has been accounted for as a transfer of business among entities under common control. Accordingly, these accompanying unaudited interim condensed consolidated financial statements of the Company have been presented as if the Toro Subsidiaries were consolidated subsidiaries of the Company for all periods presented and using the historical carrying costs of the assets and the liabilities of the subsidiaries listed below, from their dates of incorporation. As a result, the accompanying unaudited interim condensed consolidated financial statements include the accounts of Toro and its wholly owned subsidiaries (collectively, the “Company”).

The Company is currently engaged in the worldwide transportation of refined petroleum products and liquefied petroleum gas through its vessel-owning subsidiaries.

Castor Ships S.A., a corporation incorporated under the laws of the Republic of the Marshall Islands (“Castor Ships”), a related party controlled by Toro’s Chairman and Chief Executive Officer, Petros Panagiotidis, provides ship management and chartering services to the vessels owned by the Company’s vessel-owning subsidiaries with effect from July 1, 2022. Such services are provided through subcontracting agreements with unrelated third-party managers, entered into with the Company’s consent, for all of the Company’s vessels. During the period ended December 31, 2021 and until June 30, 2022, Castor Ships provided only commercial ship management and chartering services to such subsidiaries. As a part of the Spin-Off, the Company entered into a master management agreement with Castor Ships with respect to its vessels in substantially the same form as Castor’s Master Management Agreement previously in place for its vessels. The vessel management agreements with Castor Ships previously entered into for each of the vessels by the applicable vessel-owning subsidiary remain in effect for each such vessel. Upon the acquisition of the LPG carrier vessels in the second and third quarters of 2023, the relevant vessel owning subsidiaries entered into management agreements with Castor Ships on substantially the same terms as the existing vessel-owning subsidiaries.

F-6

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

1.	Basis of Presentation and General information: (continued)

The wholly owned subsidiaries which are included in the Company’s unaudited interim condensed consolidated financial statements for the periods presented are listed below.

Consolidated vessel owning subsidiaries:

Company

Country of

incorporation

Date of

incorporation

Vessel Name

DWT

Year

Built

Delivery date

to Vessel

owning company

Vision Shipping Co. (“Vision”)

Marshall Islands

04/27/2021

M/T Wonder Mimosa

36,718

2006

May 31, 2021

Zatanna Shipping Co. (“Zatanna”)

Marshall Islands

05/02/2023

LPG Dream Terrax

4,743

2020

May 26, 2023

Starfire Shipping Co. (“Starfire”)

Marshall Islands

05/02/2023

LPG Dream Arrax

4,753

2015

June 14, 2023

Cyborg Shipping Co. (“Cyborg”)

Marshall Islands

05/02/2023

LPG Dream Syrax

5,158

2015

July 18, 2023

Nightwing Shipping Co. (“Nightwing”)

Marshall Islands

05/02/2023

LPG Dream Vermax

5,155

2015

August 4, 2023

Consolidated non-vessel owning subsidiaries:

1	Toro RBX Corp. (“Toro RBX”)⁽¹⁾

2	Elektra Shipping Co. (“Elektra”)⁽²⁾

3	Rocket Shipping Co. (“Rocket”) ⁽³⁾

4	Drax Shipping Co. (“Drax”) ⁽⁴⁾

5	Colossus Shipping Co. (“Colossus”)⁽⁵⁾

6	Hawkeye Shipping Co. (“Hawkeye”) ⁽⁶⁾

7	Xavier Shipping Co. (“Xavier”)⁽⁷⁾

8	Starlord Shipping Co. (“Starlord”)⁽⁸⁾

9	Gamora Shipping Co. (“Gamora”)⁽⁹⁾

⁽¹⁾	Incorporated under the laws of the Marshall Islands on October 3, 2022, this entity serves as the cash manager of the Company’s subsidiaries with effect from March 7, 2023.

⁽²⁾	Incorporated under the laws of the Marshall Islands on April 27, 2021, no longer owns any vessel following the sale of the M/T Wonder Arcturus on May 9, 2022, for a gross sale price of $13.15 million and delivery of such vessel to an unaffiliated third-party on July 15, 2022.

⁽³⁾	Incorporated under the laws of the Marshall Islands on January 13, 2021, no longer owns any vessel following the sale of the M/T Wonder Polaris on May 18, 2023, for a gross sale price of $34.5 million and delivery of such vessel to an unaffiliated third-party on June 26, 2023.

⁽⁴⁾	Incorporated under the laws of the Marshall Islands on November 22, 2021, no longer owns any vessel following the sale of the M/T Wonder Bellatrix on May 12, 2023, for a gross sale price of $37.0 million and delivery of such vessel to an unaffiliated third-party on June 22, 2023.

⁽⁵⁾	Incorporated under the laws of the Marshall Islands on April 27, 2021, no longer owns any vessel following the sale of the M/T Wonder Musica on June 15, 2023, for a gross sale price of $28.0 million and delivery of such vessel to an unaffiliated third-party on July 6, 2023.

F-7

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

1.	Basis of Presentation and General information: (continued)

⁽⁶⁾	Incorporated under the laws of the Marshall Islands on April 27, 2021, no longer owns any vessel following the sale of the M/T Wonder Avior on April 28, 2023, for a gross sale price of $30.1 million and delivery of such vessel to an unaffiliated third-party on July 17, 2023.

⁽⁷⁾	Incorporated under the laws of the Marshall Islands on April 27, 2021, no longer owns any vessel following the sale of the M/T Wonder Formosa on September 1, 2023, for a gross sale price of $18.0 million and delivery of such vessel to an unaffiliated third-party on November 16, 2023.

⁽⁸⁾	Incorporated under the laws of the Marshall Islands on April 15, 2021, no longer owns any vessel following the sale of the M/T Wonder Vega on September 5, 2023, for a gross sale price of $31.5 million and delivery of such vessel to an unaffiliated third-party on December 21, 2023.

⁽⁹⁾	Incorporated under the laws of the Marshall Islands on January 13, 2021, no longer owns any vessel following the sale of the M/T Wonder Sirius on January 8, 2024, for a gross sale price of $33.8 million and delivery of such vessel to an unaffiliated third-party on January 24, 2024.

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. These statements and the accompanying notes should be read in conjunction with the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023, filed with the SEC on March 12, 2024 (the “2023 Annual Report”).

The accompanying interim condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of its condensed consolidated financial position and results of operations for the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the entire year.

2.	Significant Accounting Policies and Recent Accounting Pronouncements:

A discussion of the Company’s significant accounting policies can be found in the consolidated financial statements for the year ended December 31, 2023, included in the Company’s 2023 Annual Report. There have been no material changes to the Company’s significant accounting policies in the three-month period ended March 31, 2024.

Recent Accounting Pronouncements:

There are no recent accounting pronouncements the adoption of which is expected to have a material effect on the Company’s unaudited interim condensed consolidated financial statements in the current period.

F-8

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

3.	Transactions with Related Parties:

During the three months ended March 31, 2023 and 2024, the Company incurred the following charges in connection with related party transactions, which are included in the accompanying unaudited interim condensed consolidated statements of comprehensive income:

	Three months ended March 31,		Three months ended March 31,
	2023		2024
Management fees-related parties
Management fees – Castor Ships (a)	$	702,000	$	497,681

Included in Voyage expenses
Charter hire commissions – Castor Ships (a)	$	394,803	$	87,938

Included in General and administrative expenses
Administration fees – Castor Ships (a)	$	352,778	$	799,500
Stock based compensation cost (Note 11)	$	—	$	1,219,111

Included in Gain on sale of vessel
Sale & purchase commission – Castor Ships (a)	$	—	$	338,000

As of December 31, 2023, and March 31, 2024, balances with related parties consisted of the following:

	December 31, 2023		March 31, 2024
Assets:
Due from Castor Ships (a) – current	$	3,923,315	$	2,505,920
Due from Castor Ships (a) – non-current		1,590,501		1,590,501
Investment in related party (c) – non-current		50,541,667		50,548,611
Liabilities:
Due to Former Parent Company (c) – current	$	315,000	$	318,889

(a)	Castor Ships:

Details of the Company’s transactions and arrangements with Castor Ships are discussed in Note 3(a) to the consolidated financial statements for the year ended December 31, 2023, included in the Company’s 2023 Annual Report.

As of March 31, 2024, in accordance with the provisions of the Master Management Agreement, dated as of March 7, 2023, by and among the Company, its shipowning subsidiaries and Castor Ships, Castor Ships had subcontracted to a third-party ship management company the technical management of all the Company’s vessels, except the M/T Wonder Mimosa, for which Castor Ships has provided the technical management since June 7, 2023. Castor Ships pays, at its own expense, the third-party technical management company a fee for the services it has subcontracted to such company without any additional cost to Toro.

During the three months ended March 31, 2023, and the three months ended March 31, 2024, the Company’s subsidiaries were charged the following fees and commissions by Castor Ships (i) management fees amounting to $702,000 and $497,681, respectively, (ii) charter hire commissions amounting to $394,803 and $87,938, respectively, and (iii) sale and purchase commission amounting to $338,000 in the three months ended March 31, 2024 in connection with the sale of the vessel M/T Wonder Sirius (Note 5).

F-9

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

3.	Transactions with Related Parties: (continued)

In addition, until March 7, 2023, part of the general and administrative expenses incurred by Castor has been allocated on a pro rata basis within General and administrative expenses of the Company based on the proportion of the number of ownership days of the Toro Subsidiaries’ vessels to the total ownership days of Castor’s fleet. These expenses consisted mainly of administration costs charged by Castor Ships, investor relations, legal, audit and consultancy fees. During the period from January 1 through March 7, 2023 the above mentioned administration fees charged by Castor Ships to Castor that were allocated to the Company amounted to $144,445 and are included in ‘General and administrative expenses’ in the accompanying unaudited interim condensed consolidated statements of comprehensive income. For the period of March 7 through March 31, 2023, the Company recognized as pro rata allocation of days of Flat Management Fee in the amount of $208,333, which is included in ‘General and administrative expenses’ in the accompanying unaudited interim condensed consolidated statements of comprehensive income. As a result, in the three months ended March 31, 2023, and in the same period of 2024, the aggregate amounts of $352,778 and $799,500, respectively, are included in ‘General and administrative expenses’ in the accompanying unaudited interim condensed consolidated statements of comprehensive income.

The Master Management Agreement also provides for advance funding equal to two months of vessel daily operating costs to be deposited with Castor Ships as a working capital guarantee, refundable in case a vessel is no longer under Castor Ship’s management. As of March 31, 2024, the working capital guarantee advances to Castor Ships amounted to $1,590,501, which are presented in ‘Due from related parties, non-current’ in the accompanying unaudited condensed consolidated balance sheets. As of March 31, 2024, $2,505,920 of ‘Due from related parties, current’ represents working capital guarantee deposits relating to third-party managers and operating expense payments made on behalf of the Company in excess of amounts advanced.

(b)	Pool Agreement:

During the period September 30, 2022 to December 12, 2022, all Aframax/LR2 tanker vessels, entered into a series of separate agreements with V8 Pool Inc. (“V8”), a member of Navig8 Group of companies, for the participation of the vessels in the V8 plus pool (the “V8 Plus Pool”), a pool operating Aframax tankers aged fifteen (15) years or more. In February 2023, the agreement relating to the M/T Wonder Sirius’s participation in the V8 Plus Pool was terminated and the vessel commenced a period time charter. In December 2023 after the termination of the period time charter, the M/T Wonder Sirius entered back into V8 Plus Pool. The pool agreement with V8 was terminated following the completion of the sale of M/T Wonder Sirius on January 24, 2024 (Note 5). The V8 Plus Pool is managed by V8 Plus Management Pte. Ltd., a company in which the Company’s Chairman and Chief Executive Officer, Petros Panagiotidis, has had a minority equity interest. Following the sales of the M/T Wonder Bellatrix, M/T Wonder Polaris, M/T Wonder Avior, M/T Wonder Musica and M/T Wonder Vega from the second to fourth quarter of 2023, the vessels’ respective pool agreements with the V8 Plus Pool were terminated. As of March 31, 2024, none of the Company’s vessels participated in the V8 Plus Pool.

(c)	Former Parent Company:

In connection with the Spin-Off as discussed in Note 1, on March 7, 2023, Toro issued 140,000 1.00% Series A Preferred Shares to Castor having a stated amount of $1,000 per share and a par value of $0.001 per share (Note 8). The amount of accrued dividend on Series A Preferred Shares due to Castor as of March 31, 2024 was $318,889 and is presented net in ‘Due to related parties, current’ in the accompanying unaudited condensed consolidated balance sheet.

In the period ending March 31, 2023, the Company reimbursed Castor $2,570,503 for expenses related to the Spin-Off that were incurred by Castor. As of March 31, 2023, the outstanding expenses to be reimbursed by the Company amounted to $124,144 and are presented in ‘Due from related parties, current’, in the accompanying unaudited condensed consolidated balance sheet. As of March 31, 2024, there are no outstanding expenses to be reimbursed by the Company.

F-10

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

3.	Transactions with Related Parties: (continued)

On August 7, 2023, the Company agreed to purchase 50,000 5.00% Series D Cumulative Perpetual Convertible Preferred Shares of Castor, having a stated value of $1,000 and par value of $0.001 per share (the “Castor Series D Preferred Shares”), for aggregate cash consideration of $50.0 million. The distribution rate on the Castor Series D Preferred Shares is 5.00% per annum, which rate will be multiplied by a factor of 1.3 on the seventh anniversary of the issue date of the Castor Series D Preferred Shares and annually thereafter, subject to a maximum distribution rate of 20% per annum in respect of any quarterly dividend period. Dividends are payable quarterly in arrears on the 15^th day of January, April, July and October in each year, subject to Castor’s board of directors’ approval. For the three months ended March 31, 2024, the Company received a dividend on the Castor Series D Preferred Shares, amounting to $0.6 million.

The Series D Preferred Shares are convertible, in whole or in part, at the Company’s option to common shares of Castor from the first anniversary of their issue date at the lower of (i) $7.00 per common share, and (ii) the 5-day-value-weighted average price immediately preceding the conversion. On March 27, 2024, Castor effected a 1-for-10 reverse stock split of its common stock without any change in the number of authorized common shares. As a result of the reverse stock split, the number of Castor’s outstanding shares as of March 27, 2024, was decreased to 9,662,354 while the par value of its common shares remained unchanged to $0.001 per share. The conversion price of the Castor Series D Preferred Shares is subject to adjustment upon the occurrence of certain events, including the occurrence of splits and combinations (including a reverse stock split) of the common shares and was adjusted to $7.00 per common share on March 27, 2024 from $0.70 per common share following effectiveness of the 1-for-10 reverse stock split. The minimum conversion price of the Series D Preferred Shares is $0.30 per common share.

This transaction and its terms were approved by the independent members of the board of directors of each of Castor and the Company at the recommendation of their respective special committees composed of independent and disinterested directors, which negotiated the transaction and its terms.

As of March 31, 2024, the aggregate value of the investment in Castor amounted to $50,548,611, including $548,611 of accrued dividends and is presented as ‘Investment in related party’ in the accompanying unaudited condensed consolidated balance sheet. As of March 31, 2024, the Company did not identify any impairment or any observable prices for identical or similar investments of the same issuer.

4.	Deferred Charges, net:

The movement in deferred charges net, which represents deferred dry-docking costs, in the accompanying unaudited condensed consolidated balance sheets is as follows:

	Dry-docking costs
Balance December 31, 2023	$	1,420,574
Additions		47,925
Amortization		(104,835	)
Disposals		(1,262,792	)
Balance March 31, 2024	$	100,872

F-11

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated

5.	Vessels, net:

The amounts in the accompanying unaudited condensed consolidated balance sheets are analyzed as follows:

	Vessel Cost			Accumulated depreciation			Net Book Value
Balance December 31, 2023	$	94,124,368		$	(5,416,317	)	$	88,708,051
Improvements, and other vessel costs		2,918			—			2,918
Vessel disposals		(13,765,451	)		2,097,555			(11,667,896	)
Depreciation		—			(1,086,780	)		(1,086,780	)
Balance March 31, 2024	$	80,361,835		$	(4,405,542	)	$	75,956,293

On January 8, 2024, the Company entered into an agreement with an unaffiliated third party for the sale of the M/T Wonder Sirius for a gross sale price of $33.8 million. The vessel was delivered to its new owners on January 24, 2024. In connection with this sale, the Company recognized during the first quarter of 2024 a gain of $19.6 million which is presented in ‘Gain on sale of vessel’ in the accompanying unaudited interim condensed consolidated statements of comprehensive income. The sale of the above vessel took place due to a favorable offer.

The Company reviewed all its vessels for impairment and none were found to have an indication of impairment as the fair value was in excess of carrying value at March 31, 2024.

6.	Long-Term Debt:

The amounts of long-term debt shown in the accompanying unaudited condensed consolidated balance sheets of December 31, 2023 and March 31, 2024, are analyzed as follows:

Loan facilities	Borrowers	As of December 31, 2023			As of March 31, 2024
$18.0 Million Term Loan Facility	Rocket- Gamora		5,257,200			—
Total long-term debt		$	5,257,200		$	—
Less: Deferred financing costs			(43,414	)		—
Total long-term debt, net of deferred finance costs			5,213,786			—
						—
Presented:						—
Current portion of long-term debt		$	1,345,600		$	—
Less: Current portion of deferred finance costs			(34,311	)		—
Current portion of long-term debt, net of deferred finance costs		$	1,311,289		$	—
						—
Non-Current portion of long-term debt			3,911,600			—
Less: Non-Current portion of deferred finance costs			(9,103	)		—
Non-Current portion of long-term debt, net of deferred finance costs		$	3,902,497		$	—

F-12

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated

6.	Long-Term Debt: (continued)

$18.0 Million Term Loan Facility

Details of the Company’s $18.0 million senior secured term loan facility between Alpha Bank S.A, Rocket and Gamora may be found in Note 6 to the consolidated financial statements for the year ended December 31, 2023, included in the Company’s 2023 Annual Report.

During the three months ended March 31, 2024, the Company used part of the proceeds of the sale of the M/T Wonder Sirius (Note 5) to fully repay the remaining outstanding balance of $5.3 million under the $18.0 Million Term Loan Facility. As a result, the Company had no outstanding indebtedness under any facility as of March 31, 2024.

Restricted cash as of December 31, 2023 and March 31, 2024, non-current, comprised $0.4 million and $0 million of minimum liquidity deposits required pursuant to the $18.0 Million Term Loan Facility, respectively.

The weighted average interest rate on long-term debt for the three months ended March 31, 2023 and 2024, was 7.8% and 8.6%, respectively.

Total interest incurred on long-term debt for the three months ended March 31, 2023 and 2024, amounted to $251,613, and $30,041, respectively, and is included in ‘Interest and finance costs’ (Note 15) in the accompanying unaudited interim condensed consolidated statements of comprehensive income.

7.	Equity Capital Structure:

Under Toro’s initial Articles of Incorporation dated July 29, 2022, Toro’s authorized capital stock consisted of 1,000 shares par value $0.001 per share. On March 2, 2023, the Company’s articles of incorporation were amended and restated and Toro’s authorized capital stock was increased to 3,900,000,000 common shares, par value $0.001 per share and 100,000,000 preferred shares, par value $0.001 per share. For a further description of the terms and rights of the Company’s capital stock and details of its equity transactions prior to January 1, 2024, please refer to Note 7 to the consolidated financial statements for the year ended December 31, 2023, included in the Company’s 2023 Annual Report. That description is supplemented by the below new activities during the three-month period ended March 31, 2024.

As of March 31, 2024, Toro had 18,978,409 common shares issued and 18,333,853 common shares outstanding (net of 644,556 treasury shares), including 1,240,000 restricted common shares issued pursuant to the Equity Incentive Plan (as defined and discussed in Note 11).

Share Repurchase Program

On November 6, 2023, the Board of Directors of the Company approved a share repurchase program, authorizing the repurchase of up to $5.0 million of the Company’s common shares commencing November 10, 2023, through to March 31, 2024. During the year ended December 31, 2023, the Company repurchased under its share repurchase program 222,600 shares of common stock in open market transactions at an average price of $4.69 per share, for an aggregate consideration of $1.0 million. On December 27, 2023, 179,251 of these repurchased common shares were cancelled and removed from the Company’s share capital and on January 3, 2024, the remaining 43,349 repurchased common shares were cancelled and removed from the Company’s share capital.

F-13

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

7.	Equity Capital Structure: (continued)

During the three months ended March 31, 2024, the Company repurchased under its share repurchase program an additional 644,556 shares of common stock in open market transactions at an average price of $5.77 per share, for an aggregate consideration of $3.7 million, which have been classified as treasury shares as these repurchased common shares were not cancelled as of March 31, 2024. This brought the total number of shares repurchased under the program to 867,156 common shares at an average price of $5.50 per share. The share repurchase program was terminated on March 31, 2024 in accordance with its terms.

8.	Mezzanine equity:

Series A Preferred Shares

The Company issued as part of the Spin-Off to Castor 140,000 Series A Preferred Shares with par value of $0.001 and a stated value of $1,000 each. Details of the Company’s Series A Preferred Shares are discussed in Note 8 to the Company’s consolidated financial statements for the year ended December 31, 2023, included in the 2023 Annual Report.

The Company uses an effective interest rate of 3.71% over the expected life of the preferred stock being nine years which is the expected earliest redemption date. This is consistent with the interest method, taking into account the discount between the issuance price and liquidation preference and the stated dividends, including “step-up” amounts. The amounts accreted during the period March 7, 2023 through March 31, 2023 and in the three months ended March 31, 2024, were $200,255 and $751,378, respectively, and is presented as ‘Deemed dividend on Series A Preferred Shares’ in the accompanying unaudited interim condensed consolidated statements of comprehensive income.

As of March 31, 2024, the net value of Mezzanine Equity amounted to $120,352,788, including the amount of $751,378 of deemed dividend on the Series A Preferred Shares in the three months ended March 31, 2024, and is presented as ‘Mezzanine Equity’ in the accompanying unaudited condensed consolidated balance sheet. During the three months ended March 31, 2024, the Company paid to Castor a dividend amounting to $350,000 on the Series A Preferred Shares for the period from October 15, 2023 to January 14, 2024. The accrued amount for the period from January 15, 2024 to March 31, 2024 (included in the dividend period ended April 14, 2024) amounted to $318,889 (Notes 3(c) and 17(a)).

9.	Financial Instruments and Fair Value Disclosures:

As of March 31, 2024, the principal financial assets of the Company consist of cash at banks, trade accounts receivable, an investment in a related party, Castor Maritime Inc., and amounts due from related parties. As of March 31, 2024, the principal financial liabilities of the Company consist of trade accounts payable and amounts due to related parties.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

•

Cash and cash equivalents, accounts receivable trade, net, amounts due from/to related party/(ies) and accounts payable: The carrying values reported in the unaudited condensed consolidated balance sheets for those financial instruments are reasonable estimates of their fair values due to their short-term maturity nature. Cash and cash equivalents are considered Level 1 items as they represent liquid assets with short term maturities.

•

Investment in related party: Investment in related party is initially measured at the transaction price and subsequently assessed for the existence of any observable market for the Castor Series D Preferred Shares and any observable price changes for identical or similar investments and the existence of any indications for impairment. As per the Company’s assessment no such case was identified as at March 31, 2024.

F-14

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

9.	Financial Instruments and Fair Value Disclosures: (continued)

Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, due from related parties and trade accounts receivable. The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of the financial institutions in which it places its deposits. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its customers’ financial condition.

10.	Commitments and Contingencies:

Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, pool operators, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying unaudited interim condensed consolidated financial statements.

The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. As of the date of these unaudited interim condensed consolidated financial statements, management was not aware of any such claims or contingent liabilities that should be disclosed or for which a provision should be established in the accompanying unaudited interim condensed consolidated financial statements. The Company is covered for liabilities associated with the vessels’ actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.

(a) Commitments under long-term lease contracts

The following table sets forth the future minimum contracted lease payments to the Company (gross of charterers’ commissions), based on the Company’s vessels’ commitments to non-cancelable time charter contracts as of March 31, 2024. Non-cancelable time charter contracts include fixed-rate time charters.

Twelve-month period ending March 31,	Amount
2025	$	12,205,361
2026		989,839
Total	$	13,195,200

11.	Equity Incentive Plan:

As of March 31, 2024, the Company maintains an Equity Incentive Plan (the “Equity Incentive Plan”) under which the Company’s board of directors has made and may make awards of certain securities of the Company or cash to directors, officers and employees (including any prospective director, officer or employee) of the Company and/or its subsidiaries and affiliates and consultants and service providers to (including persons who are employed by or provide services to any entity that is itself a consultant or service provider to) the Company and its subsidiaries and affiliates. Details of the Equity Incentive Plan are discussed in Note 11 to the Company’s consolidated financial statements for the year ended December 31, 2023, included in the 2023 Annual Report.

The stock based compensation cost for the non-vested shares under the Equity Incentive Plan for the three months ended March 31, 2024 amounted to $1,219,111 and is included in ‘General and administrative expenses’ in the accompanying unaudited interim condensed consolidated statements of comprehensive income.

F-15

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

11.	Equity Incentive Plan: (continued)

A summary of the status of the Company’s non-vested restricted shares as of March 31, 2024, and the movement during the three-month period ended March 31, 2024, is presented below:


	Number of restricted shares		Weighted average grant date fair value per non-vested share
Non-vested, December 31, 2023		1,240,000		5.83
Granted		—		—
Non-vested, March 31, 2024		1,240,000		5.83

No shares vested during the period presented. The remaining unrecognized compensation cost relating to the shares granted amounting to $4,737,391 as of March 31, 2024, is expected to be recognized over the remaining period of two years, according to the contractual terms of those non-vested share awards.

12.	Earnings Per Common Share:

The computation of earnings per share is based on the weighted average number of common shares outstanding during that period and gives retroactive effect to the shares issued in connection with the Spin-Off.

The Company calculates earnings per common share by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the relevant period.

The Company calculates basic earnings per share in conformity with the two-class method required for companies with participating securities. The calculation of basic earnings per share does not consider the non-vested shares as outstanding until the time-based vesting restrictions have lapsed.

Diluted earnings per common share, if applicable, reflects the potential dilution that could occur if potentially dilutive instruments were exercised, resulting in the issuance of additional shares that would then share in the Company’s net income. For the purpose of calculating diluted earnings per common share, the weighted average number of diluted shares outstanding includes (i) the conversion of outstanding Series A Preferred Shares (Note 8) calculated with the “if converted” method by using the average closing market price over the reporting period from January 1, 2024 to March 31, 2024 and (ii) the incremental shares assumed to be issued, determined under the two-class method weighted for the periods the non-vested shares were outstanding, since the two-class method was more dilutive than the treasury stock method. The components of the calculation of basic and diluted earnings per common share in each of the periods comprising the accompanying unaudited interim condensed consolidated statements of comprehensive income are as follows:

F-16

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

12.	Earnings Per Common Share: (continued)

	Three months ended March 31,			Three months ended March 31,
	2023			2024
Net income and comprehensive income	$	21,959,213		$	22,127,359
Dividend on Series A Preferred Shares		(97,222	)		(353,889	)
Deemed dividend on Series A Preferred Shares		(200,255	)		(751,378	)
Undistributed earnings to non-vested participating securities		—			(1,373,460	)
Net income attributable to common Shareholders, basic	$	21,661,736		$	19,648,632
Undistributed earnings to non-vested participating securities		—			1,373,460
Undistributed earnings reallocated to non-vested participating securities		—			(600,811	)
Dividend on Series A Preferred Shares		97,222			353,889
Deemed dividend on Series A Preferred Shares		200,255			751,378
Net income attributable to common Shareholders, diluted	$	21,959,213		$	21,526,548
Weighted average number of common shares outstanding, basic		9,461,009			17,739,362
Effect of dilutive shares		52,437,558			24,407,671
Weighted average number of common shares outstanding, diluted		61,898,567			42,147,033
Earnings per common share, basic	$	2.29		$	1.11
Earnings per common share, diluted	$	0.35		$	0.51

13.	Vessel Revenues:

The following table includes the voyage revenues earned by the Company by type of contract (time charters, voyage charters and pool agreements) in each of the three-month periods ended March 31, 2023, and March 31, 2024, as presented in the accompanying unaudited interim condensed consolidated statements of comprehensive income:

	Three months ended March 31,		Three months ended March 31,
	2023		2024
Time charter revenues		1,906,250		3,179,490
Voyage charter revenues		7,930		762,148
Pool revenues		29,239,974		3,064,191
Total Vessel Revenues	$	31,154,154	$	7,005,829

The Company generates its revenues from time charters, voyage contracts and pool arrangements.

F-17

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

13.	Vessel Revenues: (continued)

The Company typically enters into time charters ranging from one month to twelve months, and, in isolated cases, for longer terms, depending on market conditions. The charterer has the full discretion over the ports visited, shipping routes and vessel speed, subject to the owner’s protective restrictions set forth in the agreed charterparty’s terms. Time charter agreements may have extension options that range over certain time periods, which are usually periods of months. The time charter party generally provides, among others, typical warranties regarding the speed and the performance of the vessel as well as owner protective restrictions such that the vessel is sent only to safe ports by the charterer, subject always to compliance with applicable sanction laws and war risks, and carry only lawful and non-hazardous cargo.

Vessels are also chartered under voyage charters, where a contract is made for the use of a vessel under which the Company is paid freight on the basis of transporting cargo from a loading port to a discharge port. Depending on charterparty terms, freight can be fully prepaid, or be paid upon reaching the discharging destination upon delivery of the cargo, at the discharging destination but before discharging, or during a ship’s voyage.

The Company employs certain of its vessels in pools. The main objective of pools is to enter into arrangements for the employment and operation of the pool vessels, so as to secure for the pool participants the highest commercially available earnings per vessel on the basis of pooling the revenue and expenses of the pool vessels and dividing it between the pool participants based on the terms of the pool agreement. The Company typically enters into pool arrangements for a minimum period of six months, subject to certain rights of suspension and/or early termination.

As of December 31, 2023, and March 31, 2024, ‘Trade accounts receivable, net’, related to voyage charters, amounted to $303,577 and $644,401, respectively. This increase by $340,824 in ‘Trade accounts receivable, net’ was mainly attributable to the timing of collections.

As of December 31, 2023, and March 31, 2024, there were $0 and $24,409 deferred assets and no deferred liabilities related to voyage charters, respectively.

14.	Vessel Operating and Voyage Expenses:

The amounts in the accompanying unaudited interim condensed consolidated statements of comprehensive income are analyzed as follows:

	Three months ended March 31,			Three months ended March 31,
Voyage expenses	2023			2024
Brokerage commissions		74,565			78,898
Brokerage commissions- related party		394,803			87,938
Port & other expenses		55,368			68,175
Bunkers consumption		—			260,176
Gain on bunkers		(5,939	)		(197	)
Total Voyage expenses	$	518,797		$	494,990

F-18

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

14.	Vessel Operating and Voyage Expenses: (continued)

	Three months ended March 31,		Three months ended March 31,
Vessel Operating Expenses	2023		2024
Crew & crew related costs		2,851,495		1,664,968
Repairs & maintenance, spares, stores, classification, chemicals & gases, paints, victualling		1,002,661		465,154
Lubricants		298,541		93,794
Insurance		344,727		109,835
Tonnage taxes		86,297		30,808
Other		532,800		193,288
Total Vessel operating expenses	$	5,116,521	$	2,557,847

15.	Interest and Finance Costs:

The amounts in the accompanying unaudited interim condensed consolidated statements of comprehensive income are analyzed as follows:

	Three months ended March 31,		Three months ended March 31,
	2023		2024
Interest on long-term debt	$	251,613	$	30,041
Amortization of deferred finance charges		25,470		43,414
Other finance charges		40,590		16,909
Total	$	317,673	$	90,364

16.	Segment Information:

In the second quarter of 2023, the Company established its LPG carrier operations through the acquisition of two LPG carrier vessels. With effect from the second quarter of 2023, the Company operated in three reportable segments: (i) the Aframax/LR2 tanker segment, (ii) the Handysize tanker segment and (iii) the LPG carrier segment. The reportable segments reflect the internal organization of the Company and the way the chief operating decision maker reviews the operating results and allocates capital within the Company. Further, the transport of crude oil (carried by Aframax/LR2 tankers), refined petroleum products (carried by Handysize tanker vessels) and liquefied petroleum gas (carried by LPG carriers) has different characteristics. In addition, the nature of trade, trading routes,

charterers and cargo handling of liquefied petroleum gas, refined petroleum products and crude oil differs.

As a result of the sale of M/T Wonder Sirius (Note 5), the Company no longer has any Aframax/LR2 vessels and management has determined that, with effect from the second quarter of 2024, the Company operates in two reportable segments: (i) the Handysize tanker segment and (ii) the LPG carrier segment.

The table below presents information about the Company’s reportable segments for the three months ended March 31, 2023 and 2024. The accounting policies followed in the preparation of the reportable segments are the same as those followed in the preparation of the Company’s unaudited interim condensed consolidated financial statements. Segment results are evaluated based on income from operations.

F-19

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

16.	Segment Information: (continued)

	Three months ended March 31, 2023									Three months ended March 31, 2024
	Aframax/LR2 tanker segment			Handysize tanker segment			Total			Aframax/LR2 tanker segment			Handysize tanker segment			LPG carrier segment			Total
- Time charter revenues	$	1,906,250		$	—		$	1,906,250		$	1,356		$	—		$	3,178,134		$	3,179,490
- Voyage charter revenues		7,930			—			7,930			—			—			762,148			762,148
- Pool revenues		25,379,990			3,859,984			29,239,974			585,011			2,479,180			—			3,064,191
Total vessel revenues	$	27,294,170		$	3,859,984		$	31,154,154		$	586,367		$	2,479,180		$	3,940,282		$	7,005,829
Voyage expenses (including charges from related parties)		(467,029	)		(51,768	)		(518,797	)		(12,266	)		(43,787	)		(438,937	)		(494,990	)
Vessel operating expenses		(3,915,402	)		(1,201,119	)		(5,116,521	)		(307,057	)		(587,743	)		(1,663,047	)		(2,557,847	)
Management fees to related parties		(526,500	)		(175,500	)		(702,000	)		(24,936	)		(94,549	)		(378,196	)		(497,681	)
Recovery of provision / (provision) for doubtful accounts		266,732			—			266,732			—			—			(25,369	)		(25,369	)
Depreciation and Amortization		(1,689,735	)		(365,911	)		(2,055,646	)		(35,305	)		(228,548	)		(927,762	)		(1,191,615	)
Gain on sale of vessel		—			—			—			19,559,432			—			—			19,559,432
Segments operating income	$	20,962,236		$	2,065,686		$	23,027,922		$	19,766,235		$	1,524,553		$	506,971		$	21,797,759
Interest and finance costs								(317,673	)											(90,364	)
Interest income								435,429												2,067,006
Dividend income from related party								—												631,944
Foreign exchange (losses)/ gains								(10,000	)											1,085
Less: Unallocated corporate general and administrative expenses (including related parties)								(983,264	)											(2,257,574	)
Net income and comprehensive income, before taxes							$	22,152,414											$	22,149,856

A reconciliation of total segment assets to total assets presented in the accompanying unaudited condensed consolidated balance sheets of December 31, 2023, and March 31, 2024, is as follows:

	As of December 31, 2023		As of March 31, 2024
Aframax/LR2 tanker segment	$	22,802,392	$	2,957,582
Handysize tanker segment		10,445,507		9,130,332
LPG carrier segment		71,651,775		71,503,303
Cash and cash equivalents⁽¹⁾		151,757,138		186,328,152
Prepaid expenses and other assets⁽¹⁾		51,447,318		51,009,756
Total assets	$	308,104,130	$	320,929,125

(1) Refers to assets of other, non-vessel owning, entities included in the unaudited interim condensed consolidated financial statements.

F-20

TORO CORP.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars – except for share data unless otherwise stated)

17.	Subsequent Events:

(a)	Dividend on Series A Preferred Shares: On April 15, 2024, the Company paid to Castor a dividend on the Series A Preferred Shares, which was declared on March 26, 2024, amounting to $350,000 for the dividend period from January 15, 2024 to April 14, 2024.

F-21

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TORO Toro Corporation