UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 20-F

 

(Mark One)

 

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

 

OR

 

☐	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

OR

 

☒	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from January 1, 2025 to June 30, 2025

 

OR

 

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of event requiring this shell company report __________

  

Commission file number 001-42604

 

TMD ENERGY LIMITED

(Exact name of Registrant as specified in its charter)

 

Cayman Islands

(Jurisdiction of incorporation or organization)

 

B-10-06, Block B, Plaza Mont Kiara

No. 2, Jalan Kiara, Mont Kiara

50480 Kuala Lumpur

Wilayah Persekutuan, West Malaysia

(Address of principal executive office)

 

Dato’ Sri Kam Choy Ho, Chief Executive Officer

Telephone: +603 6419 1266

Email: corporate@tmdel.com

At the address of the Company set forth above

(Name, Telephone, E-mail and Address of Company Contact Person)

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Ordinary Shares, par value $0.0001 per share		TMDE		NYSE American LLC

 

Securities registered or to be registered pursuant to Section 12(g): None

 

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Transition Report.

 

23,565,000 ordinary shares were outstanding as of June 30, 2025

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ No

 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. ☐ Yes ☒ No

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

 

Indicate by check mark whether the registrant has submitted every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Emerging growth company	☒

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☒

 

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

 

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

 

Indicate by check mark which basis of accounting the registration has used to prepare the financial statements included in this filing:

 

U.S. GAAP ☒

International Financial Reporting Standards as issued by the International Accounting Standards Board ☐

Other ☐

 

If “Other” has been checked in response to the previous question, indicate by check mark which consolidated financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18

 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). ☐ Yes ☒ No

 

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

 

 

 

Table of Contents

 

				Page
PART I.
ITEM 5.		OPERATING AND FINANCIAL REVIEW AND PROSPECTS		1
ITEM 8.		FINANCIAL INFORMATION		20
PART II.
ITEM 13.		DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		20
ITEM 14.		MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		20
PART III.
ITEM 17.		FINANCIAL STATEMENTS		21
ITEM 18.		FINANCIAL STATEMENTS		21
ITEM 19.		EXHIBITS		21

 

 

CONVENTIONS THAT APPLY TO THIS TRANSITION REPORT

 

Unless we indicate otherwise, references in this Transition Report to:

 

	●	“6M2024” are to six months ended June 30, 2024;
	●	“6M2025” are to six months ended June 30, 2025;
	●	“Exchange Act” are to the U.S. Securities Exchange Act of 1934, as amended from time to time;
	●	“FY2022” are to the financial year ended December 31, 2022;
	●	“FY2023” are to the financial year ended December 31, 2023;
	●	“FY2024” are to the financial year ended December 31, 2024;
	●	“IPO” are to the Company’s initial public offering which was consummated on April 22, 2025;
	●	“Labuan” are to Labuan, an island federal territory of Malaysia;
	●	“Labuan Companies Act” are to Labuan Companies Act 1990 (Act 441) of Labuan, as amended and restated from time to time;
	●	“Malaysia” are to the sovereign state of Malaysia;
	●	“mt” are to the metric ton;
	●	“M.T.” are to the motor tanker;
	●	“Ordinary Shares” are the ordinary shares of our Company, par value of $0.0001 per share;
	●	“our Board” are to the board of directors of our Company;
	●	“our Company” are to TMD Energy Limited, a company incorporated in the Cayman Islands with limited liability on October 17, 2023;
	●	“our Group”, “we”, “us” and “our” are to our Company and its subsidiaries, as the context requires;
	●	“our Director(s)” are to the director(s) of our Company;
	●	“RM” are to the legal currency of Malaysia;
	●	“SEC” are to U.S. Securities and Exchange Commission;
	●	“SGD” are to the legal currency of Singapore;
	●	“Singapore” are to Republic of Singapore;
	●	“STS” are to ship-to-ship; and
	●	“$”, “USD”, “US$” or “U.S. dollars” are to the legal currency of the United States.

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Transition Report contains forward-looking statements that involve risks and uncertainties, including statements based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements are made under the “safe harbor” provision under Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and as defined in the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”, “continue”, “is/are likely to” or other similar expressions. The forward-looking statements included in this Transition Report relate to, among others:

 

	●	timing of the development of future business;
	●	capabilities of our business operations;
	●	expected future economic performance;
	●	competition in our market;
	●	continued market acceptance of our services and products;
	●	protection of our intellectual property rights;
	●	changes in the laws that affect our operations;
	●	inflation and fluctuations in foreign currency exchange rates;
	●	our ability to obtain and maintain all necessary government certifications, approvals, and/or licenses to conduct our business;
	●	continued development of a public trading market for our securities;
	●	the cost of complying with current and future governmental regulations and the impact of any changes in the regulations on our operations;
	●	managing our growth effectively;
	●	projections of revenue, earnings, capital structure and other financial items;
	●	fluctuations in operating results; and
	●	health crisis, including due to pandemics such as the COVID-19 pandemic and government measures taken in response thereto.

 

You should read these statements in conjunction with the risks disclosed in “Item 3. Key Information—3.D. Risk Factors” of our annual report on Form 20-F filed with the SEC on May 14, 2025 and other risks outlined in our other filings with the Securities and Exchange Commission, or the SEC. Moreover, we operate in an evolving environment. New risks may emerge from time to time, and it is not possible for our management to predict all risks, nor can we assess the impact of such risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ materially from those contained in any forward-looking statements. The forward-looking statements made in this Transition Report relate only to events or information as of the date on which the statements are made in this Transition Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this Transition Report and the documents that we have referred to in this Transition Report, completely and with the understanding that our actual future results may be materially different from what we expect.

 

 

PART I.

 

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

 

You should read the following discussion and analysis of the Group’s financial condition and results of operations in conjunction with the Group’s unaudited consolidated financial statements and the related notes included elsewhere in this transition report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Group’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information — 3.D. Risk Factors” of our annual report on Form 20-F for the year ended December 31, 2024. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties.

 

5.A. Operating Results

 

Holding Company Structure

 

Our Company is a holding company with no material operations of its own other than investment holding. We conduct our operations primarily through our indirect operating subsidiaries which are owned by Straits Marine Fuels & Energy Sdn. Bhd. (“SMF”), the sole direct subsidiary of our Company. Similarly, SMF is a holding company with no material operations of its own other than holding investment in all the indirect subsidiaries of our Company. As a result, both our Company and SMF’s ability to pay dividends depends upon dividends paid by our subsidiaries. Some of our subsidiaries have debt on their own with instruments governing their debt that may restrict their ability to pay dividend to us, unless those debts are repaid. The same restrictions may apply if they incur any new debt on their own in the future.

 

Straits Energy Resources Berhad (“Straits”), the holding company of our Company through its wholly-owned subsidiary, Straits Management Services Sdn. Bhd. will continue to provide overall group management and coordination services encompassing but not restricted to listing compliance and requirement, group consolidation and reporting, corporate governance, corporate secretarial, corporate finance, corporate banking, accounting, market and public relations at a management fee that will be reviewed annually for our group of companies.

 

Our Company, through our various subsidiaries, are involved in oil trading and bunkering with its own vessel management team overseeing its fleet of bunkering vessels servicing and providing quality bunker to both domestic and international liners and vessels of all nature, that ply through Malaysian waters. Being a Malaysian company operating in Malaysian waters, it is natural that this oil trading and bunkering unit maintain its financial records and statements in its domestic currency, RM. Our Company will be looking into possibilities of expanding its operation regionally out of Malaysian waters.

 

Recent Developments

 

We consummated our initial public offering on the NYSE American on April 22, 2025, issuing 3,100,000 ordinary shares at a price of $3.25 per share. In addition, we entered into an underwriting agreement with the underwriter on April 21, 2025, which granted the underwriter a 45-day option to purchase up to an additional 465,000 ordinary shares at the public offering price of $3.25 per share to cover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option in full, purchasing an additional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering closed on April 22, 2025 and the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11.59 million, before deducting underwriting discounts and offering expenses. The ordinary shares began trading on April 21, 2025 on NYSE American and commenced trading under the ticker symbol “TMDE”.

 

On May 16, 2025, we had changed our fiscal year end from December 31 to June 30, to align with the fiscal year end of our holding company, Straits.

 

Factors Affecting Our Results of Operations

 

We rely on sales to key customers and purchases from a limited number of suppliers, where reduction or loss of key customers or supply chain disruptions and price volatility from supplier could diminish our operating results.

 

We have not derived a significant amount of revenue from volume commitments or any other understandings with our key customers related to future purchases. Orders from our key customers could be reduced or ceased at any time without obligation. Our Group also does not enter into long-term agreements with our customers. If any of our major customers terminate their business relationship with us, and we fail to secure new customers or new orders from other existing customers in a timely manner, a substantial reduction or termination of purchases by our key customer could significantly affect our operations.

 

In addition, we currently purchase refined marine fuel products from a limited number of suppliers. If our relationship with any of our key suppliers is terminated or if our key suppliers experience production disruptions, we may not be able to obtain a sufficient quantity of refined marine fuel on acceptable terms and without interruptions to our business. We may encounter difficulties and delays in obtaining marine fuel from alternative sources. Any interruption or delay in the supply of marine fuel, or the inability to obtain fuel from alternate sources at acceptable prices and within a reasonable timeframe, would impair our ability to meet scheduled deliveries to our customers and could lead to order cancellations or penalties.

 

 

We rely on the expertise of our senior management, and our inability to retain key personnel could disrupt our business and limit our growth.

 

Our business success and growth prospects depend significantly on the continued service of our senior management team and our ability to hire and retain key members of our management team. The unexpected loss of any of these key individuals could disrupt our operations, damage important business relationships, and delay strategic initiatives, potentially harming our competitive position. We face inherent challenges in attracting and retaining qualified personnel due to intense industry competition for executive talent. While we implement retention measures, there is no assurance that we will successfully maintain our current management team. Any disruption in leadership could materially adversely affect our operations.

 

Material disruptions in the availability or supply of oil may reduce the supply of our products and have a material impact on our operations.

 

Our operations face substantial risks from marine fuel supply disruptions that could impair our ability to fulfill customer demand. Global oil markets remain exposed to geopolitical conflicts, trade restrictions, and natural disasters that may reduce refinery output or disrupt logistics. Political instability in producing regions, terrorist activity, or military actions could abruptly constrain supply availability, while extreme weather or accidents might damage critical infrastructure. Such events typically trigger sudden price spikes and inventory shortages across the bunker fuel market.

 

These constraints would directly limit our sales volumes and erode our competitive pricing position. Although we maintain alternative supply arrangements, the integrated nature of oil markets means local disruptions often escalate into prolonged shortages. Our commodity-based business model leaves us particularly vulnerable to these shocks, as securing substitute fuel during crises becomes costly and time-consuming. Persistent supply issues could damage customer relationships and significantly pressure margins, leading to lasting effects on financial performance.

 

Adverse conditions in the shipping industry may reduce the demand for our products and services and negatively affect our results of operations and financial condition.

 

Our marine fuel supply business remains highly dependent on the cyclical performance of the shipping industry. Fluctuations in vessel charter rates, fuel costs, and operational expenses directly impact our customers’ purchasing capacity. During market downturns, when freight rates decline or operating costs rise, shipping companies typically reduce bunkering consumption, creating immediate pressure on our sales volumes and margins. The industry’s vulnerability to risks, including geopolitical conflicts, piracy incidents, trade disputes, and port security threats, can disrupt shipping routes and vessel operations, leading to sudden drops in regional fuel demand. Prolonged market weakness often forces shipowners to idle vessels or slow steam, further depressing bunker demand.

 

While we actively monitor industry trends and adjust our commercial strategies accordingly, these macroeconomic and geopolitical factors remain beyond our control. Our financial performance will continue to reflect shipping market volatility, with potential impacts on revenue stability, profitability, and cash flow generation. This inherent sector exposure represents a persistent challenge to our business model’s resilience.

 

Impact of Russia’s Invasion of Ukraine, Conflicts in Middle East and Related Supply Chain Issues

 

In February 2022, Russia launched a military attack on Ukraine, leading to further regional and international conflicts or armed action. As Russia is one of the largest exporters of crude oil in the world, this crisis had disrupted the oil supply and caused a spike in oil prices for the year ended December 31, 2022 (“FY2022”), which subsequently declined for the year ended December 31, 2023 (“FY2023”). Since late 2023, conflicts in the Middle East, including the Israel–Gaza war and related regional escalations, have contributed to heightened geopolitical instability. These developments, combined with increased security risks in major shipping lanes, disrupted global maritime trade by lengthening voyage times and raising operational costs across the industry.

 

The Russia-Ukraine conflict caused a spike in oil prices that was offset by a continuing growth in demand volume in our oil cargo bunkered in FY2023, resulting in our revenue dropping to $633.1 million in FY2023 from approximately $702.1 million in FY2022.

 

As the financial impact of this crisis had already been reflected in FY2022 and FY2023, there was no material impact on our revenue for the year ended December 31, 2024 (“FY2024”). In fact, after considering the increase in the volume of oil cargo bunkered, our revenue rose from $633.1 million in FY2023 to $688.6 million in FY2024, driven by the expansion of our marketplace.

 

Since then, the direct effect of the Russia-Ukraine conflict on our operations has moderated, and subsequent movements in oil prices have been influenced more by global economic conditions and trade policy developments and regional conflicts in the Middle East.

 

For the six months ended June 30, 2025, our performance was affected by a combination of factors. Middle East tensions contributed to additional volatility in oil prices and operational costs, serving as another headwind that, together with trade and tariff issues, led to a decline in our revenue.

 

In response to these market challenges, we have been strengthening collaboration with our key service providers and exploring alternative sourcing and supply chain options to enhance resilience and operational continuity. While these measures aim to mitigate potential impacts, there can be no assurance that they will fully shield us from ongoing geopolitical and trade policy volatility.

 

 

Escalating Trade Tensions and Impacts of Tariff Policy Volatility

 

Recent global trade developments have introduced heightened uncertainty into international commerce. In early 2025, the implementation of broad new tariffs on a wide range of imported goods significantly disrupted global trade dynamics, raising concerns across multiple sectors. Frequent changes in tariff rates and enforcement timelines further disrupted global shipping schedules, causing vessel delays, delivery rescheduling, and a slowdown in trade flows across major routes.

 

The prolonged tariff crisis reduced shipping activity and cargo movement, which in turn lowered demand for marine fuel. Coupled with softer global consumption, weaker economic growth, and a continuing shift toward alternative energy, these headwinds exerted downward pressure on oil demand and contributed to a significant decline in international oil prices, with the global average oil price declined.

 

For the six months ended June 30, 2025, revenue decreased to $276.3 million from $357.5 million for the six months ended June 30, 2024. This decline was primarily attributable to lower sales volume, despite our enlarged customer base compared to the six months ended June 30, 2024. In addition, weaker shipping activity and softer global consumption further depressed oil prices, which deteriorated our performance for the six months ended June 30, 2025.

 

In response, we are strengthening collaboration with our key service providers and exploring alternative sourcing and supply chain options to enhance resilience and operational continuity. While these strategic measures aim to mitigate potential impacts, there can be no assurance that they will fully shield us from the broader effects of ongoing trade policy shifts. We will continue to monitor developments closely and adapt our business strategy as needed to maintain operational stability and financial performance.

 

Nevertheless, any negative impact arising from an escalation of geopolitical tensions, including the Russia-Ukraine conflict, conflicts in the Middle East, a slowdown in global economy, or continued trade tension and tariff crisis could adversely affect our business conditions. The volatility of crude oil price and inflationary pressures can increase our operating cost and a prolonged crisis may adversely impact the supply and demand of oil cargo, which may result in a lower volume of oil cargo bunkered. In addition, any significant increase in marine fuel price might tighten the operating cash flows of our Group, which may, in turn, adversely affect our working capital requirements, financial conditions and prospects. These disruptions may also heighten many other risks disclosed in the “Risk Factors” section in our annual report on Form 20-F for the year ended December 31, 2024, including our ability to market our securities, raise equity or debt financing.

 

The ultimate impact of the conflict on our operations remains unknown and will depend on future developments. The Group will continuously monitor the situation closely and initiate any necessary mitigating actions when required.

 

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

 

Results of Operations

 

The following table summarizes the results of our operations during the six months ended June 30, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years.

 

		For the Six Months Ended June 30,
		2025				2024				Variance –
		$’000				$’000				Increase (Decrease)
		(Unaudited)				(Unaudited)				$’000				%
Revenues, net			276,185				357,486				(81,301	)			(22.7	)
Revenues – related party, net			155				39				116				297.4
Total revenues			276,340				357,525				(81,185	)			(22.7	)
Cost of revenues			(272,275	)			(351,629	)			(79,354	)			(22.6	)
Cost of revenues – related party			(82	)			(350	)			(268	)			(76.6	)
Total cost of revenues			(272,357	)			(351,979	)			(79,622	)			(22.6	)
Gross profit			3,983				5,546				(1,563	)			(28.2	)
Operating expenses
Selling and marketing expenses			(38	)			(47	)			(9	)			(19.1	)
General and administrative expenses			(3,330	)			(3,061	)			269				8.8
Depreciation expenses			(2,559	)			(2,305	)			254				11.0
Total operating expenses			(5,927	)			(5,413	)			514				9.5
(Loss) Income from operations			(1,944	)			133				(2,077	)			(1,561.7	)
Other (expenses) income, net
Interest income			16				29				(13	)			(44.8	)
Sundry (expense) income			(775	)			3,229				(4,004	)			(124.0	)
Interest expenses			(2,803	)			(1,987	)			816				41.1
Share of losses of associate			(4	)			-				(4	)			(100.0	)
Total other (expenses) income, net			(3,566	)			1,271				(4,837	)			(380.6	)
(Loss) Income before income taxes			(5,510	)			1,404				(6,914	)			(492.5	)
Income tax benefits (expenses)			988				(277	)			1,265				456.7
Net (loss) income			(4,522	)			1,127				(5,649	)			(501.2	)
Less: loss (income) attributable to non-controlling interest			212				(287	)			499				173.9
Net (loss) income attributable to controlling interest			(4,310	)			840				(5,150	)			(613.1	)
Other comprehensive (loss) income:
Net (loss) income			(4,522	)			1,127				(5,649	)			(501.2	)
Foreign currency translation adjustments			(96	)			(248	)			152				61.3
Total comprehensive (loss) income			(4,618	)			879				(5,497	)			(625.4	)

 

 

Key Components of Results of Operations

 

Revenues

 

Our Group’s revenue comprises of bunkering services, vessel chartering services and ship management services as tabulated below:

 

		Total Revenue								Inter-Segment								Revenue from Customers
		For the Six Months Ended June 30,								For the Six Months Ended June 30,								For the Six Months Ended June 30,								Variance –
		2025				2024				2025				2024				2025				2024				Increase
		$’000				$’000				$’000				$’000				$’000				$’000				(Decrease)
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				$’000				%
Analysis By Segment:
Bunkering services			275,440				357,350				-				-				275,440				357,350				(81,910	)			(22.9	)
Vessel chartering services			3,548				3,486				3,548				3,486				-				-				-				-
Ship management services			5,074				965				4,174				790				900				175				725				414.3
Total Revenue			284,062				361,801				7,722				4,276				276,340				357,525				(81,185	)			(22.7	)

 

Overall

 

Our Group’s overall revenue for the six months ended June 30, 2025 had decreased by 22.7%, or equivalent to $81.2 million, to $276.3 million from $357.5 million achieved for the six months ended June 30, 2024 due to decrease in contribution from the bunkering services segment, as it contributed more than 99% of our Group’s revenue for the six months ended June 30, 2025, offset by a slight increase in ship management services. The decrease in revenue for the six months ended June 30, 2025 was primarily attributable to a decrease in the volume of oil cargo bunkered of approximately 11.2%, from 578,614 metric ton for the six months ended June 30, 2024 to 514,025 metric ton for the six months ended June 30, 2025.

 

Bunkering Services

 

The decrease in the bunkering services revenue by $81.9 million to $275.4 million for the six months ended June 30, 2025 from $357.3 million for the six months ended June 30, 2024 was substantially attributable to the decrease of approximately 11.2% in volume of oil cargo bunkered, from 578,614 metric ton for the six months ended June 30, 2024 to 514,025 metric ton for the six months ended June 30, 2025. In addition, because the selling price of bunker fuel is generally benchmarked to the prevailing market oil price, the 17.9% decrease in the average oil price for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 further reduced the revenue recognized from bunkering services.

 

We expanded our customer base in bunkering services from 53 customers for the six months ended June 30, 2024 to 77 for the six months ended June 30, 2025. Despite this expansion, bunkered volume declined due to a slowdown in global trade and shipping activity. The tariff crisis in early 2025, marked by broad new tariffs and frequent changes in implementation timelines, significantly disrupted shipping schedules and cargo flows. These disruptions, together with softer global consumption and weaker economic growth, reduced overall demand for marine fuel and directly contributed to the decline in oil cargo bunkered.

 

The combined impact of reduced bunkered volume and declining global marine fuel prices offset the benefits of customer base expansion, thereby constraining overall revenue growth in our bunkering services.

 

Vessel Chartering Services

 

Our vessel chartering services segment previously generated revenue by chartering vessels to third parties. There was no revenue from third parties related to vessel chartering services for the six months ended June 30, 2025 and 2024, as our Group temporarily discontinued the segment after the chartering contract expired in July 2023. The vessel was subsequently redeployed to our bunkering fleet to support the growth of our oil bunkering operations.

 

Ship Management Services

 

Our ship management services, supported by a competent team of qualified professional mariners, also managed third-party vessels, including tugboats used in the port and STS operations that are owned by other subsidiaries within the Straits Group, which are outside our Group.

 

The ship management services generated approximately $0.9 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively, due to the addition of new customers for the six months ended June 30, 2025.

 

Cost of revenues

 

Our cost of revenues represent direct expenses incurred to generate revenue. These costs are recorded and accrued as incurred. The cost of revenues primarily comprise oil cargo cost, along with other bunkering operation costs such as bunker own used, port charges, crew wages and consumables, transport costs and agency fees. It also includes vessel operation-related costs, such as vessel consumables, insurance, general upkeep and repair costs.

 

 

Its major cost components are as follow:

 

		For the Six Months Ended June 30,
		2025				2024				Variance –
		(Unaudited)				(Unaudited)				Increase (Decrease)
		$’000				$’000				$’000				%
Oil cargo sold			264,009				343,994				(79,985	)			(23.3	)
Bunker own used			1,818				2,136				(318	)			(14.9	)
Crew wages			1,815				1,767				48				2.7
Other operating cost			4,715				4,082				633				15.5
Total cost of revenues			272,357				351,979				(79,622	)			(22.6	)

 

Our overall cost of revenues decreased by 22.6%, or equivalent to $79.6 million, to $272.4 million for the six months ended June 30, 2025 from $352.0 million for the six months ended June 30, 2024, representing 98.6% and 98.4% of our total revenue respectively. This decrease was in line with the decline in the volume of cargo bunkered, with oil cargo costs dropped to $264.0 million for the six months ended June 30, 2025 from $344.0 million for the six months ended June 30, 2024. In addition, other operating costs increased to $4.7 million for the six months ended June 30, 2025 from $4.1 million for the six months ended June 30, 2024. The increase was primarily attributable to higher port-related operation costs, partially offset by a reduction in equipment upkeep expenses.

 

Gross Profit and Gross Profit Margin

 

Overall

 

		For the Six Months Ended June 30,
		2025				2024				Variance –
		(Unaudited)				(Unaudited)				Increase (Decrease)
		$’000				$’000				$’000				%
Revenue			276,340				357,525				(81,185	)			(22.7	)
Cost of revenues			(272,357	)			(351,979	)			(79,622	)			(22.6	)
Gross profit			3,983				5,546				(1,563	)			(28.2	)
Gross profit margin			1.44	%			1.55	%			(0.11	)%			(7.1	)

 

As a result of the foregoing, we recorded an overall decrease of 28.2% in gross profit, or equivalent to $1.6 million, to $4.0 million for the six months ended June 30, 2025 from $5.6 million for the six months ended June 30, 2024.

 

Nevertheless, our gross profit margin decreased marginally by 0.11%, to 1.44% for the six months ended June 30, 2025 from 1.55% for the six months ended June 30, 2024 primarily reflecting increased operational expenses from our oil bunkering services, resulting in a marginal compression of our gross profit margin.

 

Bunkering Services

 

		For the Six Months Ended June 30,
		2025				2024				Variance –
		(Unaudited)				(Unaudited)				Increase (Decrease)
		$’000				$’000				$’000				%
Revenue			275,440				357,350				(81,910	)			(22.9	)
Cost of revenues			(271,627	)			(351,979	)			(80,352	)			(22.8	)
Gross profit			3,813				5,371				(1,558	)			(29.0	)
Gross profit margin			1.38	%			1.50	%			(0.12	)%			(7.9	)
Total metric ton sold (mt)			514,025				578,614				(64,589	)			(11.2	)
Average gross profit per metric ton		$	7.42			$	9.28			$	(1.86	)			(20.0	)

 

We recorded a decrease of 29.0% in gross profit of bunkering services, or equivalent to $1.6 million, to $3.8 million for the six months ended June 30, 2025 from $5.4 million for the six months ended June 30, 2024. Our gross profit margin decreased marginally by 0.12%, to 1.38% for the six months ended June 30, 2025 from 1.50% for the six months ended June 30, 2024.

 

The average gross profit per mt of oil cargo sold had decreased by approximately 20.0%, or equivalent to $1.86 per mt, to $7.42 per mt for the six months ended June 30, 2025 from $9.28 per mt for the six months ended June 30, 2024. This margin compression was largely due to elevated operating costs and sharp decline in demand for bunkering. Tariff-related delays and logistical disruptions increased transportation and handling expenses, while deferred tariff adjustments limited cost pass-through capabilities. Additionally, global oil demand softness and broader inflationary pressures narrowed the spread between selling prices and procurement costs, further eroding profitability.

 

 

Ship Management Services

 

Gross profit of ship management services was relatively stable, representing $169,761 for the six months ended June 30, 2025, up from $175,465 for the six months ended June 30, 2024.

 

The slight decrease in gross profit margin primarily reflects the recognition of certain direct costs associated with technical management and agency services for the six months ended June 30, 2025.

 

Selling and Marketing Expenses

 

The selling and marketing expenses comprise marketing, advertising and business development expenses incurred by the sales and marketing team.

 

Our selling and marketing expenses decreased by 19.1% or approximately $0.01 million, to $0.04 million for the six months ended June 30, 2025, down from $0.05 million for the six months ended June 30, 2024. The decrease was primarily attributable to a reversal of approximately $0.03 million in previously over provisioned marketing expenses, partially offset by an increase in spending of $0.04 million for business development for the six months ended June 30, 2025.

 

General and Administrative Expenses

 

The general and administrative expenses which increased by 8.8% or $0.2 million, to $3.3 million for the six months ended June 30, 2025 from $3.1 million for the six months ended June 30, 2024 comprise the following:

 

		For the Six Months Ended June 30,
		2025				2024				Variance –
		(Unaudited)				(Unaudited)				Increase (Decrease)
		$’000				$’000				$’000				%
Staff cost			1,505				1,174				331				28.2
Management fees			373				91				282				309.9
Professional fees			410				353				57				16.1
Leasing license			170				160				10				6.3
Others			872				1,283				(411	)			(32.0	)
Total general and administrative expenses			3,330				3,061				269				8.8

 

Staff cost increased by $0.3 million, to $1.5 million for the six months ended June 30, 2025, up from $1.2 million for the six months ended June 30, 2024. Without significant change in the number of overall headcounts, the increase was primarily due to annual salary adjustments and bonus payments during the six months ended June 30, 2025. In addition, approximately $0.07 million of directors’ remuneration was incurred following our listing.

 

Management fees paid to Straits Management Services Sdn. Bhd., a related company within the Straits Group, increased to $0.4 million for the six months ended June 30, 2025 from $0.1 million for the six months ended June 30, 2024. These fees cover overall group management and coordination services, encompassing but not limited to listing compliance and requirement, group consolidation and reporting, corporate governance, corporate secretarial, corporate finance, corporate banking, accounting, market and public relations to the subsidiaries of our Company. The increase was mainly due to a higher fee being charged for the six months ended June 30, 2025.

 

Professional fees include statutory audit fees, tax fees, corporate secretarial fees, and legal fees. The professional fees remained relatively stable for the six months ended June 30, 2025, which mainly represented fee incurred in connection with our expenses related to investor relationship and a provision of audit fee for the consolidated financial statement.

 

Corporations incorporated under Labuan Companies Act 1990 are required to pay an annual leasing license fee of $20,000 to Labuan Financial Services Authority (“LFSA”). As such, there was leasing license fee of $0.01 million each for the six months ended June 30, 2025 and 2024. In addition, $0.02 million and $0.01 million represents other license fees charged for the six months ended June 30, 2025 and 2024, respectively.

 

The decrease in other general and administrative expenses for the six months ended June 30, 2025 primarily reflected the reduced in late charge in payment to suppliers driven by greater access to funding and implementation of our cost savings initiatives aimed at optimizing operational efficiency and reducing discretionary spending.

 

Depreciation

 

Depreciation represents the annual depreciation on the cost of Group’s fleet of 15 vessels, dry-dock cost, tools, office equipment, computer hardware and software, motor vehicles, real property and furniture and fittings.

 

 

The increase in depreciation by $0.3 million to $2.6 million for the six months ended June 30, 2025, up from $2.3 million for the six months ended June 30, 2024, was due to the addition of dry-dock cost which resulted in higher depreciation charges.

 

Other (Expense) Income, net

 

Interest Income

 

Interest income decreased to $16,072 for the six months ended June 30, 2025 from $28,903 for the six months ended June 30, 2024. The decrease was primarily attributable to an adjustment recorded in respect of interest income relating to earlier periods during the six months ended June 30, 2024, with no corresponding adjustment in the six months ended June 30, 2025. Interest income was derived from principal sums approximating $0.1 million and $2.4 million placed with lender bank of Tumpuan Megah Development Sdn. Bhd. (“Tumpuan Megah”) as a term deposit and in a designated current account respectively.

 

Sundry (Expense) Income

 

		For the Six Months Ended June 30,
		2025				2024				Variance –
		(Unaudited)				(Unaudited)				Increase (Decrease)
		$’000				$’000				$’000				%
(Loss) Gain on foreign exchange			(1,496	)			3,210				(4,706	)			(146.6	)
Miscellaneous income			721				19				702				3,694.7
Total sundry (expense) income			(775	)			3,229				(4,004	)			(124.0	)

 

Although the majority of our business activities are denominated in USD, the functional currencies of our five subsidiaries remain RM and SGD. As a result, foreign currency gains and losses arise when USD-denominated balances of these subsidiaries are remeasured into their respective functional currencies. We currently do not have a foreign currency hedging policy, as the USD generated from our revenue is sufficient to cover our USD purchases. However, we continue to monitor our foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. In the current state of RM and SGD strengthening against the USD, the weakening of the USD reduced the RM-equivalent and SGD-equivalent values of our USD-denominated cash balances, receivables and payables, resulting in a net foreign currency loss. We recorded a net foreign currency loss of $1.5 million for the six months ended June 30, 2025 as compared to net foreign currency gain of $3.2 million for the six months ended June 30, 2024.

 

Miscellaneous income primarily comprises late payment interest income of $0.6 million from a related party, Straits, arising from late payment at an interest rate of 8.25%.

 

Interest Expense

 

Interest expense included interest on trade financing facilities granted to Tumpuan Megah, term loan interest and vessel vendor financing interest.

 

The increase in interest expense by $0.8 million, to $2.8 million for the six months ended June 30, 2025, up from $2.0 million for the six months ended June 30, 2024, was due to a higher volume of trade financing facilities granted to Tumpuan Megah, which bear interest rates ranging from 5.75% to 7.75%.

 

Provision For Income Taxes

 

Cayman Islands

 

Our Company was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, we are not subject to income, corporation or capital gains tax, and no withholding tax is imposed upon the payment of dividends.

 

Malaysia

 

Profits of Malaysian corporations incorporated under the Companies Act 2016 are subject to the prevailing corporate income tax rate at 24%, and this is applicable to SMF, TMD Marine Fuels Sdn. Bhd. and Tumpuan Megah.

 

For corporations incorporated under the Labuan Companies Act 1990, that individually own each of our 15 vessels, their audited net profits are subject to the prevailing corporate income tax rate at 3%.

 

Singapore

 

For Singapore incorporated corporations, their prevailing corporate income tax rate is at 17% with the following partial tax exemption on its chargeable income:

 

	1.	75% of its first chargeable income of SGD10,000; and
	2.	50% of its next chargeable income of SGD190,000.

 

 

With the aforementioned, our Group’s effective tax rate was 19.7% for the six months ended June 30, 2024. For the six months ended June 30, 2025, the Group recorded an income tax benefit of $1.0 million, representing (i) current tax expenses of $0.08 million for the ended June 30, 2025; (ii) deferred tax income arising from temporary differences amounted to $0.07 million; and (iii) over-provision of income tax expenses of $1.0 million in FY2024 due to the change in our fiscal year end.

 

		For the Six Months Ended June 30,
		2025				2024				Variance –
		(Unaudited)				(Unaudited)				Increase (Decrease)
		$’000				$’000				$’000				%
Current Income Tax
Based on result for the period			78				277				(199	)			(71.8	)
Over provision in prior periods			(1,001	)			-				(1,001	)			(100.0	)
			(923	)			277				(1,200	)			(433.2	)
Deferred Tax
Reversal of temporary differences			(65	)			-				(65	)			100.0
Under provision in prior periods			-				-				-				-
			(65	)			-				(65	)			100.0
Total income tax (benefit) expense			(988	)			277				(1,265	)			(456.7	)

 

With the change of fiscal year end from December 31 to June 30, the tax reporting period of Tumpuan Megah covered 18 months from January 1, 2024 to June 30, 2025. Given Tumpuan Megah recorded a net loss for the six months ended June 30, 2025, the tax loss position reduced the overall assessable profits for the full 18-month reporting period. As a result, the provision for income tax previously recognized for the year ended December 31, 2024 was overstated by $1.0 million.

 

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

 

Results of Operations

 

The following table summarizes the results of our operations during the fiscal years ended December 31, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years.

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Revenues, net			688,430				632,790				55,640				8.8
Revenues – related party, net			178				290				(112	)			(38.6	)
Total revenues			688,608				633,080				55,528				8.8
Cost of revenues			(671,616	)			(619,867	)			51,749				8.3
Cost of revenues – related party			(947	)			(1,123	)			(176	)			(15.7	)
Total cost of revenues			(672,563	)			(620,990	)			51,573				8.3
Gross profit			16,045				12,090				3,955				32.7
Operating expenses
Selling and marketing expenses			(40	)			(101	)			(61	)			(60.4	)
General and administrative expenses			(5,249	)			(5,127	)			122				2.4
Depreciation expenses			(4,758	)			(4,257	)			501				11.8
Total operating expenses			(10,047	)			(9,485	)			562				5.9
Income from operations			5,998				2,605				3,393				130.2
Other (expenses) income
Interest income			52				10				42				420.0
Sundry income, net			2,022				3,321				(1,299	)			(39.1	)
Interest expenses			(4,598	)			(2,203	)			(2,395	)			(108.7	)
Share of losses of associate			(1	)			-				(1	)			(100.0	)
Total other (expenses) income, net			(2,525	)			1,128				(3,653	)			323.8
Income before income taxes			3,473				3,733				(260	)			(7.0	)
Income tax expenses			(1,428	)			(774	)			654				84.5
Net income			2,045				2,959				(914	)			(30.9	)
Less: income attributable to non-controlling interest			(168	)			(963	)			(795	)			(82.6	)
Net income attributable to controlling interest			1,877				1,996				(119	)			(6.0	)
Other comprehensive income:
Net income			2,045				2,959				(914	)			(30.9	)
Foreign currency translation adjustments			276				1,888				(1,612	)			(85.4	)
Total comprehensive income			2,321				4,847				(2,526	)			(52.1	)

 

 

Key Components of Results of Operations

 

Revenues

 

Our Group’s revenue comprises of bunkering services, vessel chartering services and ship management services as tabulated below:

 

		Total Revenue								Inter-Segment								Revenue from Customers
		For the Years Ended December 31,								For the Years Ended December 31,								For the Years Ended December 31,								Variance – Increase
		2024				2023				2024				2023				2024				2023				(Decrease)
		$’000				$’000				$’000				$’000				$’000				$’000				$’000				%
Analysis By Segment:
Bunkering services			688,210				631,608				-				-				688,210				631,608				56,602				9.0
Vessel chartering services			7,097				8,041				7,097				6,847				-				1,194				(1,194	)			(100.0	)
Ship management services			1,917				1,911				1,519				1,633				398				278				120				43.2
Total Revenue			697,224				641,560				8,616				8,480				688,608				633,080				55,528				8.8

 

Overall

 

Our Group’s overall revenue for FY2024 had increased by 8.8%, or equivalent to $55.5 million, to $688.6 million from $633.1 million achieved in FY2023 due to rise in contribution from the bunkering services segment, as it contributed more than 99% of our Group’s revenue. The increase in revenue in FY2024 was primarily attributable to an increase in the volume of oil cargo bunkered of approximately 6.0%, from 933,418 metric ton in FY2023 to 989,512 metric ton in FY2024.

 

Bunkering Services

 

The increase in the bunkering services revenue by $56.6 million to $688.2 million in FY2024 from $631.6 million in FY2023 was substantially attributable to the increase of approximately 6.0% in volume of oil cargo bunkered, from 933,418 metric ton in FY2023 to 989,512 metric ton in FY2024.

 

The increase in bunkered volume was driven by both our Group’s ongoing efforts to meet customer demand through enhanced operational efficiency. In addition, we expanded our customer base in bunkering services from 90 customers in FY2023 to 101 in FY2024, which further contributed to the increase in bunkered volume and revenue.

 

We also benefited from higher vessel capacity, as one of our vessels, previously chartered to a third party in FY2023, was redeployed to our bunkering fleet in July 2023 following the expiration of the charter contract to support the expansion of our oil bunkering operations.

 

Vessel Chartering Services

 

Our vessel chartering services segment previously generated revenue by chartering vessels to third parties. There was no revenue from third parties related to vessel chartering services in FY2024, compared to $1.2 million in FY2023, as our Group temporarily discontinued the segment after the chartering contract expired in July 2023. The vessel was subsequently redeployed to our bunkering fleet to support the growth of our oil bunkering operations.

 

Ship Management Services

 

Our ship management services, supported by a competent team of qualified professional mariners, also managed third-party vessels, including tugboats used in the port and STS operations that are owned by other subsidiaries within the Straits Group, which are outside our Group.

 

The ship management services remained steady, generating approximately $0.4 million and $0.3 million in FY2024 and FY2023, respectively.

 

Cost of revenues

 

Our cost of revenues represent direct expenses incurred to generate revenue. These costs are recorded and accrued as incurred. The cost of revenues primarily comprise oil cargo cost, along with other bunkering operation costs such as bunker own used, port charges, crew wages and consumables, transport costs and agency fees. It also includes vessel operation-related costs, such as vessel consumables, insurance, general upkeep and repair costs.

 

 

Its major cost components are as follow:

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Oil cargo sold			656,864				606,451				50,413				8.3
Bunker own used			4,011				4,439				(428	)			(9.6	)
Crew wages			3,550				3,481				69				2.0
Other operating cost			8,138				6,619				1,519				22.9
Total cost of revenues			672,563				620,990				51,573				8.3

 

Our overall cost of revenues increased by 8.3%, or equivalent to $51.6 million, to $672.6 million for FY2024 from $621.0 million for FY2023, representing 97.7% and 98.1% of our total revenue respectively. This increase was in line with the growth in the volume of cargo bunkered, with oil cargo costs rising to $656.9 million in FY2024 from $606.4 million in FY2023. In addition, other operating costs increased to $8.1 million in FY2024 from $6.6 million in FY2023, primarily due to higher vessel maintenance and bunkering loading costs.

 

Gross Profit and Gross Profit Margin

 

Overall

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Revenue			688,608				633,080				55,528				8.8
Cost of revenues			(672,563	)			(620,990	)			(51,573	)			(8.3	)
Gross profit			16,045				12,090				3,955				32.7
Gross profit margin			2.33	%			1.91	%			0.42	%			22.0

 

As a result of the foregoing, we recorded an overall increase of 32.7% in gross profit, or equivalent to $3.9 million, to $16.0 million for FY2024 from $12.1 million in FY2023.

 

Nevertheless, our gross profit margin increased marginally by 0.42% to 2.33% in FY2024 from 1.91% in FY2023 due to improved margins in our oil bunkering services.

 

Bunkering Services

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Revenue			688,210				631,608				56,602				9.0
Cost of revenues			(672,563	)			(620,610	)			51,953				8.4
Gross profit			15,647				10,998				4,649				42.3
Gross profit margin			2.27	%			1.74	%			0.53	%			30.5
Total metric ton sold (mt)			989,512				933,418				56,094				6.0
Average gross profit per metric ton		$	15.81			$	11.78			$	4.03				34.2

 

We recorded an increase of 42.3% in gross profit of bunkering services, or equivalent to $4.6 million, to $15.6 million in FY2024 from $11.0 million in FY2023. Our gross profit margin increased marginally by 0.53% to 2.27% in FY2024 from 1.74% in FY2023.

 

The average gross profit per metric ton of oil cargo sold had increased by approximately 34.2%, or equivalent to $4.03 per mt, to $15.81 in FY2024 from $11.78 in FY2023. This improvement was attributable to our strategic focus on penetrating new markets and expanding our customer base contributed to higher sales volumes. We successfully attracted new customers while maintaining strong relationships with existing buyers. Through maintaining a steady demand, we optimized resource usage and lowered the overall cost of providing services for FY2024. In addition, the increase in bunkering activities, which led to higher operational efficiencies, enabling us to leverage economies of scale and optimize our cost structure.

 

Vessel Chartering Services

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Revenue			-				1,194				(1,194	)			(100.0	)
Cost of revenues			-				(380	)			380				100.0
Gross profit			-				814				814				100.0
Gross profit margin			-				68.2	%			(68.2	)%			(100.0	)

 

 

We recorded a decrease in gross profit of vessel chartering services to nil in FY2024, down from $0.8 million in FY2023. Our gross profit margin decreased to nil in FY2024 from 68.2% in FY2023.

 

The drop in gross profit of vessel chartering services was due to our Group redeployed the chartered vessel to our bunkering fleet of vessels to meet the growing demand for our bunkering services following the expiration of the charter contract in July 2023.

 

Ship Management Services

 

Gross profit of ship management services increased to $ 0.4 million in FY2024, from $0.3 million in FY2023, remaining relatively stable.

 

Selling and Marketing Expenses

 

The selling and marketing expenses comprise marketing travelling and advertising expenses incurred by the sales and marketing team.

 

Our selling and marketing expenses decreased by 60.4% or approximately $0.06 million, to $0.04 million in FY2024, down from $0.1 million in FY2023, due to cost-saving plan on marketing expenses in FY2024.

 

General and Administrative Expenses

 

The general and administrative expenses which increased by 2.4% or $0.1 million, to $5.2 million in FY2024 from $5.1 million in FY2023 comprise the following:

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Staff cost			2,300				2,266				34				1.5
Management fees			499				487				12				2.5
Professional fees			424				415				9				2.2
Leasing license			300				300				-				-
Vessel deposit written off			-				273				(273	)			(100.0	)
Impairment/ assets written off			71				(5	)			76				1,520.0
Others			1,655				1,391				264				19.0
Total general and administrative expenses			5,249				5,127				122				2.4

 

Staff cost increased by $0.03 million to $2.30 million in FY2024, up from $2.27 million in FY2023. This was mainly due to higher staff-related costs and the recruitment of a senior management member for a subsidiary, Straits Marine Services Pte. Ltd. in FY2024. This increase was partially offset by the adjustment for the over-provision of staff and director bonuses for FY2023 in Tumpuan Megah.

 

Management fees are paid to Straits Management Services Sdn. Bhd., a related company within the Straits Group, remained stable at $0.5 million in both FY2024 and FY2023. These fees cover overall group management and coordination services, encompassing but not limited to listing compliance and requirement, group consolidation and reporting, corporate governance, corporate secretarial, corporate finance, corporate banking, accounting, market and public relations to the subsidiaries of our Company.

 

Professional fees include statutory audit fees, tax fees, corporate secretarial fees, and legal fees. The increase in professional fees for FY2024 was due to legal expenses incurred in connection with securing additional trade facilities from local financial institutions.

 

Corporations incorporated under Labuan Companies Act 1990 are required to pay an annual leasing license fee of $20,000 to Labuan Financial Services Authority (“LFSA”). As such, there was leasing license fee of $0.3 million each in FY2024 and FY2023.

 

We paid a deposit of approximately $0.3 million in FY2020 for the purchase of a vessel. However, the deposit was written off during FY2023 as the vendor became uncontactable after the COVID-19 Pandemic, and the vessel was not maintained and was in a deplorable condition. We have taken the necessary action in our attempts to recover the deposit paid.

 

The significant change under impairment was mainly due to an allowance for expected credit loss of our accounts receivable amounted to $0.07 million in FY2024.

 

The increase in other general and administrative expenses mainly represented (i) an increase in environmental, social, and governance activities payable to a related party, Benua Hijau Sdn. Bhd., an entity owned by a controlling shareholder, amounting to $0.1 million; (ii) an increase of $0.1 million in bank charges for issuing $6.5 million in bank guarantees to suppliers; and (iii) an increase in operating costs, such as insurance and travelling expenses, amounting to $0.05 million due to the expansion of business.

 

Depreciation

 

Depreciation represents the annual depreciation on the cost of Group’s fleet of 15 vessels, dry-dock cost, tools, office equipment, computer hardware and software, motor vehicles, real property and furniture and fittings.

 

The increase in depreciation by $0.5 million to $4.8 million in FY2024, up from $4.3 million in FY2023, was due to the addition of dry-dock cost incurred during the year.

 

 

Other Income, net

 

Interest Income

 

Interest income increased to $0.05 million in FY 2024 from $0.01 million in FY2023. The increase arises from approximately $0.04 million which consists of principal sums approximating $0.1 million and $2.0 million placed with lender bank of Tumpuan Megah as a term deposit and in a designated current account respectively.

 

Sundry Income

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Gain on foreign exchange			1,415				2,982				(1,567	)			(52.5	)
Cancellation fees			-				230				(230	)			(100.0	)
Fair value adjustments			-				46				(46	)			(100.0	)
Miscellaneous income			607				63				544				863.5
Total sundry income			2,022				3,321				(1,299	)			(39.1	)

 

Our business activities are substantially denominated in USD, while our assets and liabilities are denominated in our functional currency. We currently do not have a foreign currency hedging policy, as the USD generated from our revenue is sufficient to cover our USD purchases. However, we continue to monitor our foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. In the current state of RM strengthening against the USD, we recorded a lower net foreign currency gain of $1.4 million for FY2024 as compared to $3.0 million for FY2023.

 

Cancellation fees are received from customers who cancelled their purchase of oil cargo. There was no cancellation fee recorded in FY2024.

 

A fair value adjustment of approximately $0.1 million was made in FY2022 on a debt due from the vendor of Tumpuan Megah. Approximately $0.05 million of this impairment was written back in FY2023 following subsequent payment from the vendor. The debt was related to legal fees for a legal case involving Tumpuan Megah prior to the acquisition of Tumpuan Megah by Straits in 2018. The debt currently stood at approximately $1.8 million of which $0.8 million was being repaid through a repayment plan spanning a period beyond 12 months commencing from April 2023 till March 2027. No adjustment was made in FY2024.

 

Miscellaneous income includes interest income of $0.4 million from related party, Straits on late payment with interest rate at 8.25%. In addition, there was a $0.2 million adjustment related to the previously recognized value of the acquisition of SMF.

 

Interest Expense

 

Interest expense included interest on trade financing facilities granted to Tumpuan Megah, term loan interest and vessel vendor financing interest.

 

The increase in interest expense by $2.4 million to $4.6 million in FY2024, up from $2.2 million in FY2023, was due to a higher volume of trade financing facilities granted to Tumpuan Megah, which bear interest rates ranging from 5.82% to 8.25%.

 

Provision For Income Taxes

 

Cayman Islands

 

Our Company was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, we are not subject to income, corporation or capital gains tax, and no withholding tax is imposed upon the payment of dividends.

 

Malaysia

 

Profits of Malaysian corporations incorporated under the Companies Act 2016 are subject to the prevailing corporate income tax rate of 24%, and this is applicable to SMF, TMD Marine Fuels Sdn. Bhd. and Tumpuan Megah.

 

For corporations incorporated under the Labuan Companies Act 1990, that individually own each of our 15 vessels, their audited net profits are subject to the prevailing corporate income tax rate of 3%.

 

Singapore

 

For Singapore incorporated corporations, their prevailing corporate income tax rate is at 17% with the following partial tax exemption on its chargeable income:

 

	3.	75% of its first chargeable income of SGD10,000; and
	4.	50% of its next chargeable income of SGD190,000.

 

 

With the aforementioned, our Group’s effective tax rate was 41.1% for FY2024 and 20.7% for FY2023. The increase in income tax expenses in FY2024 was primarily due to higher gross profit from our bunkering services, which led to increased operating income. In addition, certain bank charges and professional fees incurred in relation to bank facilities were non-deductible for tax purposes. Furthermore, a non-taxable exchange gain of approximately $2.5 million reduced chargeable income in FY2023, whereas a non-deductible exchange loss of approximately $0.5 million increased chargeable income in FY2024. The reduction in non-taxable income further contributed to the increase in chargeable income for FY2024. Consequently, higher tax expenses and an increased effective tax rate were observed in FY2024. No deferred tax was recognized in FY2024 after the crystallization of deferred tax liabilities arising from assets controlled transfer to Labuan companies.

 

		For the Years Ended December 31,								Variance –
		2024				2023				Increase (Decrease)
		$’000				$’000				$’000				%
Current Income Tax
Based on result for the year			1,458				698				760				108.9
(Over) Under provision in prior years			(30	)			168				(198	)			(117.9	)
			1,428				866				562				64.9
Deferred Tax
Reversal of temporary differences			-				(88	)			88				100.0
Over provision in prior years			-				(4	)			4				100.0
			-				(92	)			92				100.0
Total income tax expense			1,428				774				654				84.5

 

5.B. Liquidity and Capital Resources

 

We are exposed to liquidity risk, which is the risk that we may encounter difficulties in meeting our financial obligations as they become due. We manage this risk by maintaining adequate levels of cash and cash equivalents, monitoring cash flows, and maintaining access to financing sources.

 

As of June 30, 2025, we had net working capital deficit of $8.7 million and a net loss of $4.5 million. Despite this, we believe that we can meet all our financial obligations as they become due in the foreseeable future. This conclusion is based on a detailed assessment of our financial position, forecast, and plans up to the date of approval of these financial statements.

 

Key considerations in this assessment include:

 

●	We maintained cash and cash equivalents of $7.1 million as of June 30, 2025.
●	Our strong payment track record and long-standing relationships suggest that trade facilities amounting to approximately $91.8 million and supplier purchasing limits of $11.2 million will be available for the next 12 months.
●	As of June 30, 2025, we had balances of available trade facilities amounting to $7.6 million to support our operational needs.
●	We entered into a repayment plan with major debtors covering approximately $15.0 million, with scheduled monthly repayments from June 2025 to May 2026, which are expected to provide additional liquidity.

 

Prior to the consummation of our initial public offering on April 22, 2025, our principal sources of liquidity to finance our operating activities were from the working capital, trade financing from financial institutions, suppliers credit financing and cash generated from business operation.

 

On April 22, 2025, we consummated our initial public offering on the NYSE American. In this offering, 3,100,000 ordinary shares were issued at a price of $3.25 per share. In addition, we entered into an underwriting agreement with the underwriter on April 21, 2025, which granted the underwriter a 45-day option to purchase up to an additional 465,000 ordinary shares at the public offering price of $3.25 per share to cover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option in full, purchasing an additional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering closed on April 22, 2025 and the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11.59 million, before deducting underwriting discounts and offering expenses.

 

We believe that our existing cash resources, anticipated cashflow from operations, anticipated cash raised from financing together with net proceeds from our public offering will be sufficient to meet and fund our anticipated operation working capital and capital expansion requirements for the next 12 months from the date of this transition report.

 

If we experience an adverse operating environment or incur unanticipated capital expenditure requirements, or if we determine to accelerate our growth, then additional financing may be required. No assurance can be given, however, that such financing would be available at all or on favorable terms. Additional financing may include the use of debt, credit facilities from financial institutions, or the sale of equity or instruments convertible into equity securities, whether by our Group or its holding company. Any issuance of additional equity could result in immediate and possibly significant dilution to our existing shareholders, while incurrence of debt would increase fixed obligations and bring along operating covenants that could restrict our operations.

 

As at June 30, 2025, our cash and cash equivalents were approximately $7.1 million, comprising primarily in cash and cash equivalent.

 

 

Cash Flows and Working Capital

 

The following table sets forth a summary of our cash flows for the six months ended June 30, 2025 and 2024 and the years ended December 31, 2024 and 2023 as indicated.

 

		For the Six Months Ended June 30,								For the Years Ended December 31,
		2025				2024				2024				2023
		(Unaudited)				(Unaudited)				(Audited)				(Audited)
		$’000				$’000				$’000				$’000
Net cash (used in) provided by operating activities			(20,251	)			(42,896	)			(24,290	)			654
Net cash used in investing activities			(2,096	)			(1,942	)			(3,761	)			(3,148	)
Net cash provided by (used in) financing activities			12,778				45,136				38,655				(2,489	)
Net (decrease) increase in cash and restricted cash			(9,569	)			298				10,604				(4,983	)
Effect of exchange rates on cash and restricted cash			559				860				636				(1,456	)
Cash and restricted cash, beginning of period / year			16,070				4,830				4,830				11,269
Cash and restricted cash, end of period / year			7,060				5,988				16,070				4,830

 

Operating Activities

 

Our cash inflow from operating activities was principally from collections of revenue. Our cash outflows used in operating activities was principally for payment of oil cargo purchased, operating expenses, staff cost and general administrative expenses.

 

The net cash used in operating activities for the six months ended June 30, 2025 was $20.3 million, after adjusting for non-cash item which includes:

 

i.

$2.6 million in depreciation charges for the six months ended June 30, 2025. The increase in depreciation charges was due to additional capital expenditure incurred on docking expenditure for the six months ended June 30, 2025.

 

Meanwhile, the changes for the six months ended June 30, 2025 working capital were mainly attributable by the following operating assets and liabilities:

 

	i.	Increase in accounts receivable by $6.6 million due to the implementation of our accounts receivable repayment plan, in which installment agreements were established with customers for repayment of outstanding balances. In addition, slower collections from customers were observed for the six months ended June 30, 2025, primarily due to delays in cargo movement and the ongoing tariff situation. These disruptions affected delivery schedules and invoicing cycles, which in turn strained customer cash flows and extended payment timelines;
	ii.	Lower inventory levels were maintained amid market instability for the six months ended June 30, 2025, resulting in a decrease of $2.5 million;
	iii.	Increase in other receivables and current assets by $11.9 million, mainly due to advance payments related to marketing and business development activities of and a vessel deposit paid for sourcing target vessel amounting to total of $6.1 million. In addition, advance payments were made to suppliers for purchase of cargo oil increased by $3.7 million; and
	iv.	Decrease in income tax payable of $1.8 million as the operating entity, Tumpuan Megah, incurred a net loss for the six months ended June 30, 2025 which reduced the current tax expense and related tax payable.

 

The net cash used in operating activities for the six months ended June 30, 2024 was $42.9 million, after adjusting for non-cash item which includes:

 

i.

$2.3 million in depreciation charges for the six months ended June 30, 2024. The increase in depreciation charges was due to additional capital expenditure incurred for the six months ended June 30, 2024.

 

Meanwhile, the changes in working capital for the six months ended June 30, 2024 were mainly attributable by the following operating assets and liabilities:

 

	i.	Decrease in accounts receivable by $2.3 million as we had established a repayment installment agreement with a customer for his repayment of the outstanding balance and hence leading to reduction in account receivables;
	ii.	The decrease in inventory was mainly due to the increase in the volume cargo bunkered, resulting a lower inventory level at period end;
	iii.	Increase in other receivables and current assets by $5.7 million was substantially due to advance payment amounting to $3.3 million in anticipation of higher demand by customers in coming months. There was a further $1.2 million pledged to a supplier for an additional $7.0 million in credit limit and $0.6 million in deferred IPO expenses;

 

 

	iv.	Decrease in accounts payable by $29.7 million as payment to suppliers were made through trade financing facilities which had increased by $46.5 million; and
	v.	Increase in due from related parties by $4.5 million was attributable to working capital advances to related parties.

 

The net cash used in operating activities for FY2024 was $24.3 million, after adjusting for non-cash item which includes:

 

i.

$4.8 million in depreciation charges for FY2024. The increase in depreciation charges was due to additional capital expenditure incurred on docking expenditure in FY2024.

 

Meanwhile, the changes in FY2024 working capital were mainly attributable by the following operating assets and liabilities:

 

	i.	Decrease in accounts receivable by $2.8 million as the collection of accounts receivable had improved due to our successful repayment plan implementation, in which we established a repayment installment agreement with a customer for the repayment of the outstanding balance and hence leading to a reduction in account receivables;
	ii.	The increase in the bunkered cargo volume and the implementation of improved inventory control, resulting in a lower inventory level maintained in FY2024 by $6.5 million;
	iii.	Decrease in other receivables and current assets by $5.1 million, mainly due to advance payments being utilized to settle previous secured orders with the increase in bunkering services. In addition, $1.3 million was paid for deferred IPO expenses; and
	iv.	Decrease in accounts payable and accrued expenses by $45.3 million following the acquisition of new bank facilities to support our operations. This enabled the settlement of accounts payable and advance payments for cargo expenses, thus reduced accrued expenses.

 

The net cash provided by operating activities for FY2023 was $0.7 million, after adjusting for non-cash items which includes:

 

	i.	$4.3 million in depreciation charges for FY2023. The increase in depreciation charges was due to additional capital expenditure incurred during the year and the full effect of previous year’s capital expenditure incurred, as disclosed under the investing activities’ cash flow below; and
	ii.	Reversal of deferred tax of $0.1 million as the vessels were transferred from Tumpuan Megah to the respective Labuan companies as part of our risk management strategy and practices, representing the transfer of one vessel in FY2023.

 

Meanwhile, the changes in FY2023 working capital were mainly attributable to the following operating assets and liabilities:

 

	i.	Increase in accounts receivable by $15.6 million as we extended our credit terms to garner higher cargo volumes despite the drop in overall revenue which was due to lower global cargo prices;
	ii.	The conversion of a water barge into a bunker vessel and cessation of the chartering out of a vessel in FY2023 to meet increasing fuel cargo demand enabled us to increase our inventory holding by $6.0 million;
	iii.	Increase in other receivables and current assets by $9.5 million was substantially due to advance payment amounting to $6.2 million in anticipation of higher demand by customers subsequent to year end. There was also a further $2.2 million pledged to a supplier for an additional $7.0 million in credit limit and $0.6 million in deferred IPO expenses; and
	iv.	Increase in accounts payable by $19.3 million, aligned with an increase of 54.0% of sales to approximately $24.0 million in the month of December 2023 as compared to the month of December 2022 and an increase in accrued expenses by $6.4 million due to deferring supplier payment for cargo oil procurement in response to the higher sales in December 2023.

 

Investing Activities

 

Our cash flow used in investing activities was mainly carrying out our periodic dry-dock activities which amounted to $1.7 million and $1.8 million for the six months ended June 30, 2025 and 2024, respectively. The dry-dock activities are necessary to maintain our fleet of vessels in good performing conditions to ensure smooth bunkering operation apart from complying with the strict and stringent operation procedures and requirements of our suppliers and loading terminals. These spendings are financed by our internally generated funds.

 

Our cash flow used in investing activities was mainly carrying out our periodic dry-dock activities which amounted to $3.8 million and $3.1 million in FY2024 and FY2023, respectively. The dry-dock activities are necessary to maintain our fleet of vessels in good performing conditions to ensure smooth bunkering operation apart from complying with the strict and stringent operation procedures and requirements of our suppliers and loading terminals. These spendings are financed by our internally generated funds.

 

Financing Activities

 

Our cash flow provided by financing activities amounted to $12.8 million for the six months ended June 30, 2025. It mainly represented proceeds from issuance of common shares pursuant to IPO amounted to $11.6 million, as well as net borrowings of $7.4 million, representing trade facilities obtained from local financial institutions and repayment of our vessel vendors who provided vendor-financed borrowing for vessel acquisitions. These inflows were partly offset by advances of $6.2 million made to our related parties.

 

 

Our cash flows provided by financing activities amounting to $45.1 million for the six months ended June 30, 2024 was mainly from the drawdown of trade financing facilities from the local financial institutions to repay our payables and our vessel financing vendors who had provided us vendor financing borrowing in our acquisition of their vessels. The net drawdown and repayment to the borrowings was approximately of $45.3 million for the six months ended June 30, 2024.

 

Our cash flow provided by financing activities amounted to $38.7 million for FY2024. It mainly represented proceeds from borrowings obtained through additional trade facilities from banks, offset by repaying our vessel vendors who provided vendor-financed borrowing for vessel acquisitions amounting to a net amount of $50.9 million. In addition, we also advanced $12.2 million to our related parties.

 

Our cash flow used in financing activities amounted to $2.5 million for FY2023, representing a net amount of $2.8 million in repayment to our vessel vendors who provided vendor-financed borrowing for vessel acquisitions. In addition, we received proceeds totaling $0.3 million from our related parties.

 

Contractual obligations and Contingencies

 

In the normal course of our business, we are subject to contingencies, such as legal proceedings and claims arising out of our business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

 

As of the date of this transition report, we did not have any loss contingencies which require to be recognized or disclosed in our consolidated financial statements.

 

As of June 30, 2025, our contractual obligations were as follows:

 

		Less than 1 year				Between 1-2 years				Over 3 years				Total
Contractual obligations		$				$				$				$
Finance lease commitment			14,758				29,516				29,104				73,378
Operating lease commitment			26,833				14,695				-				41,528
Repayment of loan borrowings			409,025				62,655				462,493				934,173
			450,616				106,866				491,597				1,049,079

 

 

Analysis of items with major changes on the unaudited consolidated balance sheets as at June 30, 2025 and December 31, 2024

 

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
		$’000				$’000
ASSETS
Current Assets
Cash and cash equivalents			7,060				16,070
Accounts receivable, net			28,372				20,322
Inventories, net			7,627				9,667
Due from related parties			17,993				11,593
Other receivables and current assets			30,959				20,207
Income tax recoverable			1,003				-
Total current assets			93,014				77,859
Non-Current Assets
Property, plant and equipment, net			31,733				32,133
Investments, net			90				89
Operating lease right of use asset (“ROU asset”), net			38				17
Deferred tax assets, net			67				-
Total Non-Current Assets			31,928				32,239
Total Assets			124,942				110,098
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses			7,057				7,426
Other payables			1,403				1,503
Short-term loans			91,807				79,269
Due to related parties			1,024				627
Taxes payable			-				774
Operating lease liabilities - current portion			24				9
Long-term debt payable - current portion			409				777
Finance lease payable - current portion			12				11
Total current liabilities			101,736				90,396
Non-Current Liabilities
Operating lease liabilities - non-current			14				8
Long term debt payable			525				504
Finance lease payable			54				57
Total Non-Current Liabilities			593				569
Total Liabilities			102,329				90,965
Shareholders’ Equity
Ordinary share, par value $0.0001 per share; 500,000,000 shares authorized; 23,565,000 and 20,000,000 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively			2				2
Additional paid-in capital			12,732				4,635
Retained earnings			8,274				12,582
Accumulated other comprehensive income			578				664
Total equity attributable to equity holders’ of TMD Energy Limited			21,586				17,883
Non-controlling interests			1,027				1,250
Total Equity			22,613				19,133
Total Liabilities and Shareholders’ Equity			124,942				110,098

 

Cash and Cash Equivalents

 

Cash and cash equivalents represent cash on hand and balances in bank accounts, including fixed deposits pledged for banking facilities. The decrease in cash and cash equivalents was primarily driven by an increase in accounts receivable, advances to suppliers and related parties, and deposits paid for sourcing a target vessel, partially offset by proceeds from our initial public offering.

 

 

Accounts Receivable, Net

 

Accounts receivable mainly arise from our bunkering services. The increase in receivables was due to the repayment installment agreement established with customers and slower payments from our customers as they were affected by the delays in cargo shipments and tariff crisis.

 

Inventory, Net

 

Inventory consists of marine gas oil (“MGO”) and low sulfur fuel oil (“LSFO”) held for sale, as well as bunker fuel for vessel operations. The vessels primarily use MGO as bunker fuel. The decrease in inventory was mainly due to lower sales resulting in reduced stock on hand and fewer purchases to maintain appropriate inventory levels.

 

Due From (To) Related Parties

 

This represents transactions occurring in the ordinary course of business, as well as advances provided to or received from related parties to support the Group’s operational activities. The increase was primarily attributable to an advance to Straits, part of which were unsecured, interest bearing at 8.25% and had no fixed repayment terms.

 

Other Receivables and Current Assets

 

These include advance payments, supplier deposits for trade purposes, and deferred offering costs. Supplier deposits were pledged to secure purchase credit limits and refundable only upon termination of the credit limit or offsetting against outstanding supplier balances. The increase was due to advance payments made to suppliers for marketing and business development activities, as well as deposit paid for sourcing target vessels. For the six months ended June 30, 2025, deferred offering costs were charged to shareholder’s equity after the completion of initial public offerings.

 

Property, Plant and Equipment, Net

 

Property, plant, and equipment, net, comprise vessels, docking fees, tools, equipment, and other assets. The decrease in property, plant and equipment, net was primarily attributable to the increase in accumulated depreciation, which outpaced additions in docking expenditures associated with our bunkering operations.

 

Accounts Payable and Accrued Expenses

 

With the availability of greater access to funding, we were enabled to place advance payments with suppliers, ensuring a smoother procurement process and securing orders ahead of schedule, resulting in a decrease in our accounts payable and accrued expenses.

 

Short-term Loans

 

Short-term loans represent trade facilities granted by various banking institutions to finance the purchase and importation of goods essential for our business operations. We successfully obtained additional trade facilities to meet our operational needs, ensuring adequate funding for timely supplier payments.

 

Long Term Liabilities

 

These consist of long-term debt used to finance leasehold properties, vessels, and motor vehicles. The decrease in long-term liabilities was mainly due to the repayment of a vessel installment loan, with no additional long-term debt incurred for the six months ended June 30, 2025.

 

Capital Expenditures

 

We had a capital expenditure of $2.1 million, $3.8 million and $3.1 million for the six months ended June 30, 2025, FY2024 and FY2023 respectively. These were financed through funds generated from operations.

 

Capital Commitments

 

As at June 30, 2025, there was no material capital expenditures or purchase commitment to acquire vessels. Should there arise a need to expand the existing fleet of vessels, we will seek financing from financial institutions or vendors of vessels with an extended long term payment schedule.

 

5.C. Research and Development, Patent and Licenses, etc.

 

Not applicable. The Company has not undertaken any Research and Development activities in the past three years.

 

5.D. Trend Information

 

Other than as disclosed elsewhere in this transition report, we are not aware of any trends, uncertainties, demands, commitments, or events for the six months ended June 30, 2025 that are reasonably likely to have a material and adverse effect on revenues, income, profitability, liquidity, or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition.

 

5.E. Critical Accounting Estimates

 

We prepare our unaudited consolidated financial statement in accordance with U.S. GAAP, which requires us to make judgement, estimation and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during each reporting period. We continually evaluate these judgements, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information, which together form our basis for making judgements about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from these estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

 

 

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) allowance for doubtful accounts; (iii) impairment of long-lived assets; (iv) leases; and (v) income taxes. See Note 2 - Significant Accounting Policies to our unaudited consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.

 

Revenue Recognition

 

We adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all years presented. The core principle of this new revenue standard is that a company should recognize revenue when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle by us in our determination of revenue recognition: (1) identification of the contract, or contracts, with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the company satisfy a performance obligation.

 

We derived our revenues from a diverse range of maritime services provided to clients within the industry.

 

1.	Sales of cargo oil and fresh water, and bunkering facilitation

 

Revenue generated from sales of cargo oil and fresh water, and bunkering facilitation involves the procurement and delivery of marine gas oil, low sulfur fuel oil, and fresh water for delivery to customers’ ships. We recognize revenues at a point in time when cargo oil and fresh water have been delivered and accepted by the customer, indicating fulfillment of the performance obligation.

 

Sales of cargo oil and fresh water, and bunkering facilitation are not capable of being a distinct and separately identifiable. The performance obligation is only considered satisfied when sales of cargo oil and fresh water and bunkering facilitation are completed simultaneously.

 

2.	Vessel chartering services

 

Revenue generated from vessel chartering services involves arranging charters for marine transportation for various purposes such as cargo transportation or offshore operations. We recognize revenues over time based on the time elapsed between the delivery of a vessel to a charterer and the return of a vessel from the charterer and invoicing is done on a monthly basis.

 

3.	Ship management services

 

Revenue from ship management services involves providing technical management, crew management, marine consultancy, and shipping services. We recognize revenues at a point in time when services are rendered and accepted by customer indicating fulfillment of the performance obligation.

 

We considered as a principal for all the revenues we generate above as we are directly involved in the procurement, delivery, and provision of the goods and services to customers. As the principal, we assume the risks and rewards associated with the transactions, including responsibility for fulfilling the performance obligations and bearing any associated costs and risks, bears the risk of loss or damage to inventory, bears the credit risk associated with customers’ ability to pay for the goods or services. Therefore, we recognize revenue at the gross amount.

 

Credit Losses on Financial Instruments

 

The Company recognizes credit losses on financial instruments in accordance with ASC Topic 326, Financial Instruments – Credit Losses. The Company uses the Current Expected Credit Losses (“CECL”) model to estimate credit losses on financial assets measured at amortized cost, as well as certain off-balance sheet credit exposures.

 

Under the CECL model, the estimation of credit losses involves significant judgment and estimation uncertainty. Management exercises its judgment based on historical loss experience, current economic conditions, and reasonable and supportable forecasts. Changes in these factors could have a material impact on the estimated credit losses.

 

The Company has evaluated its account receivables and recognized a credit loss of $807, $69,474 and $nil for the six months ended June 30, 2025 and the years ended December 31, 2024 and 2023 respectively.

 

Recent accounting pronouncements

 

See the discussion of the recent accounting pronouncements contained in Note 2 to the unaudited consolidated financial statements, “Summary of Significant Accounting Policies”.

 

 

ITEM 8.

FINANCIAL INFORMATION

 

8.A. Consolidated Statements and Other Financial Information

 

We have appended the consolidated financial statements filed as part of this Transition Report.

 

8.B. Significant Changes

 

No significant change has occurred since the date of our consolidated financial statements filed as part of this Transition Report.

 

PART II.

 

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

 

None.

 

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

 

14.E. Use of Proceeds

 

On March 31, 2025, the registration statement (File No. 333-283704) (the “Registration Statement”) relating to the Company’s IPO was declared effective by the SEC. In connection therewith, the Company entered into an underwriting agreement with Maxim Group LLC, dated April 21, 2025. On April 22, 2025, the Company consummated the IPO of 3,100,000 ordinary shares, par value $0.0001 per share at a price of $3.25 per share (the “Offering Price”), pursuant to the Underwriting Agreement. The underwriters were granted a 45-day option to purchase up to additional 465,000 ordinary shares to cover over-allotments, if any. The underwriters exercised their over-allotment option fully on April 22, 2025, the underwriters purchased an additional 465,000 ordinary shares at the Offering Price.

 

The IPO (including the sale of the Ordinary Shares to cover over-allotment) generated gross proceeds to the Company of approximately $11.59 million. We incurred a total of $1.25 million listing expenses and the net offering proceeds to us after deducting the total expenses was $10.34 million. As at the date of this Transition Report, we had utilized 55%, 29% and 16% of the IPO proceeds for purchase of cargo, listing expenses and general and corporate expenses respectively.

 

 

PART III

 

ITEM 17.

FINANCIAL STATEMENTS

 

We have elected to provide financial statements pursuant to Item 18.

 

ITEM 18.

FINANCIAL STATEMENTS

 

On May 16, 2025, the Company announced the change of fiscal year end from December 31 to June 30, with effect from May 16, 2025. This change is being made to better align the fiscal year end of its holding company, Straits which has changed its fiscal year end from December 31 to June 30. As a result, the Company is required to file this Transition Report for the transition period, which is the six-month period from January 1, 2025 to June 30, 2025. After filing the Transition Report, the Company’s next fiscal year end will be June 30, 2026.

 

We have appended the consolidated financial statements filed as part of this Transition Report.

 

The financial statements have not been audited by, J&S Associate PLT, the Company’s independent registered public accounting firm.

 

ITEM 19.

EXHIBITS

 

Exhibit No.		Description of Exhibit
1.1**		Amended and Restated Memorandum and Articles of Association of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 6-K filed with the Securities and Exchange Commission on April 23, 2025).
2.1**		Specimen certificate evidencing Ordinary Shares (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025).
4.1**		Underwriting Agreement dated April 21, 2025 (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 6-K filed with the Securities and Exchange Commission on April 23, 2025).
4.2**		Form of Director Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form F-1 (Registration No. 333-283704 ) filed with the Securities and Exchange Commission on February 27, 2025).
4.3**		Form of Executive Officer Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025).
4.4**		Form of Independent Director Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025).
8.1**		List of subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Company’s Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025).
11.1**		Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025).
11.2**		Insider Trading Policy
12.1*		CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*		CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1*		CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2*		CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97**		Clawback Policy
99.1*		Regulations that may affect our business activities.
101.INS*		Inline XBRL Instance Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*	Filed with this Transition Report.
**	Previously filed.

 

 

SIGNATURES

 

The registrant hereby certifies that it meets all of the requirements for filing on the Transition Report on Form 20-F and that it has duly caused and authorized the undersigned to sign this Transition Report on its behalf.

 

	TMD Energy Limited
	By:	/s/ Dato’ Sri Kam Choy Ho
	Name:	Dato’ Sri Kam Choy Ho
	Title:	Director and Chief Executive Officer

 

Date: September 29, 2025

 

 

INDEX TO FINANCIAL STATEMENTS

 

TMD ENERGY LIMITED

 

TABLE OF CONTENTS

 

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 (Audited)	F-3
Consolidated Statements of Operations and Comprehensive (Loss) Income for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December 31, 2024 and 2023 (Audited)	F-4
Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December 31, 2024 and 2023 (Audited)	F-5
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December 31, 2024 and 2023 (Audited)	F-6
Notes to Unaudited Consolidated Financial Statements for the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023	F-7

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

J&S Associate PLT

 

Certified Public Accountants

 

Firm ID: 6743

Malaysia

Please note the Company’s transition report for the six-month period ended June 30, 2025 is unaudited, there will be no Report of Independent Registered Public Accounting Firm” included in the transition Form 20-F.

 

 

TMD Energy Limited

 

Unaudited Consolidated Balance Sheets

 

As of June 30, 2025 and December 31, 2024

 

(Expressed in U.S. Dollars, except for the number of shares)

 

		June 30, 2025				December 31, 2024
		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
ASSETS
Current Assets
Cash and cash equivalents		$	7,060,410			$	16,069,851
Accounts receivable, net			28,371,702				20,321,697
Inventories, net			7,627,129				9,667,559
Due from related parties			17,992,929				11,592,567
Other receivables and current assets			30,958,684				20,206,845
Income tax receivable			1,003,350				-
Total current assets			93,014,204				77,858,519
Non-Current Assets
Property, plant and equipment, net			31,733,289				32,133,461
Investments, net			89,712				88,908
Operating lease right of use asset (“ROU asset”), net			37,981				16,603
Deferred tax assets, net			67,217				-
Total Non-Current Assets			31,928,199				32,238,972
Total Assets		$	124,942,403			$	110,097,491
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses		$	7,057,387			$	7,426,422
Other payables			1,402,444				1,502,965
Short-term loans			91,806,603				79,268,515
Due to related parties			1,024,058				626,745
Taxes payable			-				773,578
Operating lease liabilities – current portion			24,437				9,223
Long-term debt payable – current portion			409,025				776,753
Finance lease payable – current portion			11,979				11,053
Total current liabilities			101,735,933				90,395,254
Non-Current Liabilities
Operating lease liabilities – non current			14,301				7,564
Long term debt payable – non current			525,148				504,319
Finance lease payable – non current			53,658				56,559
Total Non-Current Liabilities			593,107				568,442
Total Liabilities			102,329,040				90,963,696
Shareholders’ Equity
Ordinary share, par value $0.0001 per share; 500,000,000 shares authorized; 23,565,000 and 20,000,000 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively			2,357				2,000
Additional paid-in capital			12,731,677				4,634,755
Retained earnings			8,274,248				12,583,150
Accumulated other comprehensive income			578,386				663,895
Total equity attributable to equity holders’ of TMD Energy Limited			21,586,668				17,883,800
Non-controlling interests			1,026,695				1,249,995
Total Equity			22,613,363				19,133,795
Total Liabilities and Shareholders’ Equity		$	124,942,403			$	110,097,491

 

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

 

 

TMD Energy Limited

 

Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

(Expressed in U.S. Dollars, except for the number of shares)

 

		(Unaudited)				(Audited)				(Audited)
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Revenues, net		$	276,185,254			$	688,430,008			$	632,789,396
Revenues – related parties, net			154,866				177,534				290,377
Total revenues			276,340,120				688,607,542				633,079,773
Cost of revenues			(272,274,995	)			(671,615,772	)			(619,866,604	)
Cost of revenues – related parties			(81,654	)			(947,060	)			(1,123,356	)
Total cost of revenues			(272,356,649	)			(672,562,832	)			(620,989,960	)
Gross profit			3,983,471				16,044,710				12,089,813
Operating expenses
Selling and marketing expenses			(38,067	)			(39,664	)			(101,302	)
General and administrative expenses			(3,330,264	)			(5,249,099	)			(5,127,137	)
Depreciation expenses			(2,558,809	)			(4,758,014	)			(4,257,189	)
Total operating expenses			(5,927,140	)			(10,046,777	)			(9,485,628	)
(Loss) Income from operations			(1,943,669	)			5,997,933				2,604,185
Other (expenses) income, net
Interest income			16,072				52,126				10,264
Sundry (expense) income			(774,985	)			2,022,473				3,321,563
Interest expenses			(2,802,798	)			(4,598,376	)			(2,203,061	)
Share of losses of associate			(4,029	)			(710	)			-
Total other (expenses) income, net			(3,565,740	)			(2,524,487	)			1,128,766
(Loss) Income before income taxes			(5,509,409	)			3,473,446				3,732,951
Income tax benefits (expenses)			988,034				(1,428,299	)			(774,239	)
Net (loss) income			(4,521,375	)			2,045,147				2,958,712
Less: loss (income) attributable to non-controlling interest			212,473				(167,910	)			(962,761	)
Net (loss) income attributable to controlling interest		$	(4,308,902	)		$	1,877,237			$	1,995,951
Weighted average number of ordinary shares outstanding:
Ordinary shares - Basic and diluted			21,359,033				20,000,000				20,000,000
(Loss) Earnings per share:
Basic and diluted		$	(0.20	)		$	0.09			$	0.10
Other comprehensive (loss) income:
Net (loss) income		$	(4,521,375	)		$	2,045,147			$	2,958,712
Foreign currency translation adjustments			(96,336	)			276,068				1,887,789
Total comprehensive (loss) income		$	(4,617,711	)		$	2,321,215			$	4,846,501
Comprehensive (loss) income including non-controlling interest		$	(4,617,711	)		$	2,321,215			$	4,846,501
Comprehensive (loss) income attributable to non-controlling interest			223,300				(167,781	)			(832,987	)
Comprehensive (loss) income attributable to controlling interest		$	(4,394,411	)		$	2,153,434			$	4,013,514

 

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

 

 

TMD Energy Limited

 

Unaudited Consolidated Statements of Changes in Shareholders’ Equity

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

(Expressed in U.S. Dollars, except for the number of shares)

 

		Number of Shares				Amount				Paid-in Capital				Retained Earnings				Comprehensive (Loss) Income				Energy Limited				Controlling Interests				Total
		Ordinary Shares								Additional								Accumulated Other				Equity Attributable to TMD				Non-
		Number of Shares				Amount				Paid-in Capital				Retained Earnings				Comprehensive (Loss) Income				Energy Limited				Controlling Interests				Total
Balance as of December 31, 2022 (Audited)			20,000,000			$	2,000			$	10,790,348			$	5,344,116			$	(28,064	)		$	16,108,400			$	3,932,230			$	20,040,630
Balance			20,000,000			$	2,000			$	10,790,348			$	5,344,116			$	(28,064	)		$	16,108,400			$	3,932,230			$	20,040,630
Return of capital for unissued shares			-				-				(2,676,807	)			-				-				(2,676,807	)			-				(2,676,807	)
Net income			-				-				-				1,995,951				-				1,995,951				962,761				2,958,712
Foreign currency translation adjustments			-				-				-				-				2,017,563				2,017,563				(129,774	)			1,887,789
Balance as of December 31, 2023 (Audited)			20,000,000				2,000				8,113,541				7,340,067				1,989,499				17,445,107				4,765,217				22,210,324
Balance			20,000,000				2,000				8,113,541				7,340,067				1,989,499				17,445,107				4,765,217				22,210,324
Acquisition of subsidiary			-				-				-				-				-				-				71,484				71,484
Return of capital for unissued shares			-				-				(5,311,880	)			-				-				(5,311,880	)			-				(5,311,880	)
Acquisition of non-controlling interest			-				-				1,833,094				3,365,846				(1,601,801	)			3,597,139				(3,754,487	)			(157,348	)
Net income			-				-				-				1,877,237				-				1,877,237				167,910				2,045,147
Foreign currency translation adjustments			-				-				-				-				276,197				276,197				(129	)			276,068
Balance as of December 31, 2024 (Audited)			20,000,000				2,000				4,634,755				12,583,150				663,895				17,883,800				1,249,995				19,133,795
Balance			20,000,000				2,000				4,634,755				12,583,150				663,895				17,883,800				1,249,995				19,133,795
Issuance of shares pursuant to IPO, net of offering cost			3,565,000				357				8,096,922				-				-				8,097,279				-				8,097,279
Net loss			-				-				-				(4,308,902	)			-				(4,308,902	)			(212,473	)			(4,521,375	)
Net income (loss)			-				-				-				(4,308,902	)			-				(4,308,902	)			(212,473	)			(4,521,375	)
Foreign currency translation adjustments			-				-				-				-				(85,509	)			(85,509	)			(10,827	)			(96,336	)
Balance as of June 30, 2025 (Unaudited)			23,565,000			$	2,357			$	12,731,677			$	8,274,248			$	578,386			$	21,586,668			$	1,026,695			$	22,613,363
Balance			23,565,000			$	2,357			$	12,731,677			$	8,274,248			$	578,386			$	21,586,668			$	1,026,695			$	22,613,363

 

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

 

 

TMD Energy Limited

 

Unaudited Consolidated Statements of Cash Flows

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

(Expressed in U.S. Dollars)

 

		(Unaudited)				(Audited)				(Audited)
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Cash flows from operating activities:
Net (loss) income		$	(4,521,375	)		$	2,045,147			$	2,958,712
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation expense			2,558,809				4,758,014				4,257,189
Amortization of operating lease ROU assets			11,602				21,033				21,107
Provision of expected credit losses			807				69,474				-
Impairment of goodwill			-				1,129				-
Written off of assets			-				373				-
Deferred tax liabilities			(64,914	)			-				(92,664	)
Gain on disposal of assets			-				-				(18,724	)
Share of losses of associate			4,029				710				-
Change in assets and liabilities:
Accounts receivable			(6,574,111	)			2,769,950				(15,597,836	)
Inventories, net			2,493,022				6,487,098				(6,016,083	)
Due from related parties			1,016,378				(536,841	)			(740,331	)
Other receivables and current assets			(11,914,902	)			5,121,986				(9,480,769	)
Accounts payable and accrued expenses			(682,395	)			(45,253,722	)			25,671,804
Other payables			(811,143	)			(419,027	)			68,039
Taxes payable			(1,756,153	)			651,026				(355,168	)
Operating lease liabilities			(11,058	)			(6,761	)			(21,057	)
Net cash (used in) provided by operating activities			(20,251,404	)			(24,290,411	)			654,219
Cash flows from investing activities:
Purchase of fixed assets			(2,095,807	)			(3,751,944	)			(3,149,397	)
Acquisition of investment			-				(83,089	)			(4,388	)
Increase investment in subsidiary			-				74,120				-
Proceeds from disposal of fixed assets			-				-				6,127
Net cash used in investing activities			(2,095,807	)			(3,760,913	)			(3,147,658	)
Cash flows from financing activities:
Gross proceeds from issuance of common shares pursuant to initial public offering			11,586,250				-				-
Proceeds from (Repayment to) borrowings			7,443,090				50,910,672				(2,768,651	)
Repayment to finance lease payables			(5,561	)			(10,216	)			(41,328	)
(Advance to) Proceeds from related parties			(6,245,369	)			(12,245,223	)			320,485
Net cash provided by (used in) financing activities			12,778,410				38,655,233				(2,489,494	)
Net (decrease) increase in cash and cash equivalents			(9,568,801	)			10,603,909				(4,982,933	)
Effect of exchange rate changes on cash and cash equivalents			559,360				635,595				(1,456,188	)
Cash and cash equivalents, beginning of period / year			16,069,851				4,830,347				11,269,468
Cash and cash equivalents, end of period / year		$	7,060,410			$	16,069,851			$	4,830,347
Supplemental disclosures of cash flow information
Income taxes paid		$	877,184			$	776,331			$	1,220,804
Supplemental non-cash investing and financing activities
Acquisition of non-controlling interest by issuance of ordinary shares		$	-			$	2,798,887			$	-
Deferred offering costs charged to additional paid-in capital			3,488,971				-				-
Recognized assets through finance lease liabilities			-				-				100,771
Recognized ROU assets through lease liabilities			31,350				15,359				-
Reversal of additional paid-in capital via decrease in related party receivables		$	-			$	5,311,880			$	2,676,807

 

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

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 1 - Organization and Principal Business

 

TMD Energy Limited (“TMDEL”) was incorporated on October 17, 2023 in the Cayman Islands. TMDEL is a holding company without any operations.

 

TMDEL consummated its initial public offering on the NYSE American on April 22, 2025, issuing 3,100,000 ordinary shares at a price of $3.25 per share. In addition, the Company entered into an underwriting agreement with the underwriter on April 21, 2025, which granted the underwriter a 45-day option to purchase up to an additional 465,000 ordinary shares at the public offering price of $3.25 per share to cover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option in full, purchasing an additional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering closed on April 22, 2025 and the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11,586,250, before deducting underwriting discounts and offering expenses. The ordinary shares began trading on April 21, 2025 on NYSE American and commenced trading under the ticker symbol “TMDE”.

 

Business Re-organization

 

The re-organization of the legal entity structure was initialized with the acquisition of TMDEL by Straits Energy Resources Berhad (“Straits”) which was completed on November 21, 2023. Prior to this re-organization, Straits was the shareholder with direct or indirect control over all related entities involved in this re-organization.

 

	●	On December 1, 2023, Straits increased its ownership in Straits Marine Fuels & Energy Sdn. Bhd. (“SMF”) and its seven subsidiaries (“SMF Group”) from 67% to 100%, with the acquisition of the balance 33% previously held by Tumpuan Megah Development Sdn. Bhd. (“Tumpuan Megah”). On December 14, 2023, TMDEL acquired 100% ownership of SMF Group from Straits by issuing 3,968,556 ordinary shares of TMDEL to Straits on May 31, 2024.
	●	On January 10, 2024, SMF, the wholly-owned subsidiary of TMDEL, acquired 100% ownership of TMD Straits Ltd (“TMD Straits”) and TMD Sturgeon Ltd (“TMD Sturgeon”) from Straits by issuing 890,026 and 1,132,607 ordinary shares of TMDEL to Straits on May 31, 2024, respectively.
	●	On January 24, 2024, SMF acquired 51% ownership of Straits Marine Services Pte. Ltd. (“SMS 1”) and its wholly-owned subsidiary, Straits Maritime Services Pte. Ltd. (“SMS 2”), from Straits by issuing 1,237,055 ordinary shares of TMDEL to Straits on May 31, 2024.
	●	On January 24, 2024, SMF acquired 70% ownership of Tumpuan Megah and its six subsidiaries from Straits by issuing 8,108,179 ordinary shares of TMDEL to Straits on May 31, 2024.

 

The above transaction was treated as a re-organization of the Companies under common control and the financial statements give retroactive effect to these transactions.

 

On May 31, 2024, SMF acquired the remaining 49% ownership interest of SMS 1 and its wholly-owned subsidiary from the non-controlling interest shareholder by issuing 1,188,543 ordinary shares of TMDEL on May 31, 2024. The non-controlling interest is adjusted in the financial statements prospectively.

 

On May 31, 2024, SMF acquired the remaining 30% ownership interest of Tumpuan Megah and its six subsidiaries from non-controlling interest shareholders by issuing 3,474,934 ordinary shares of TMDEL on May 31, 2024. The non-controlling interest is adjusted in the financial statements prospectively.

 

On July 1, 2024, the Company reorganized its legal entity structure, whereby SMF acquired 100% equity interest in all wholly-owned subsidiaries of Tumpuan Megah. All related entities have effectively become subsidiaries of SMF, with TMDEL effectively holding ownership and control of SMF and its subsidiaries.

 

The re-organization transaction is treated as a combination between entities under common control in accordance with ASC 805-50. These entities are considered under common control because they share the same ultimate parent entity, which holds a “controlling financial interest”, as defined by ASC 810, in both entities before and after the re-organization. The historical financial statements of each of the entities are the historical financial statements of the combined entity, with no adjustments made to the entities’ historical revenue, expenses, assets, or liabilities, the components of historical total equity are adjusted to reflect the capital structure of TMDEL in accordance to ASC 805-40-45-3 through 45-5.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

On January 3, 2024, Tumpuan Megah acquired a 30% equity interest in TMD Marine Fuels Sdn. Bhd. (“TMDF”) through the purchase of 300 ordinary shares for RM300. On February 23, 2024, Tumpuan Megah acquired an additional 149,700 ordinary shares in TMDF for RM149,700, maintaining its equity interest at 30%. The total cash consideration for these transactions amounted to RM150,000.

 

In contrast to the reorganization, TMDF is consolidated under ASC 810 due to TMDEL’s ability to exert control over its financial and operational policies, despite holding only a 30% equity interest.

 

TMDEL and its subsidiaries operate as a comprehensive provider of marine fuel logistics, and offers related services, including vessel chartering services and ship management services, within the maritime industry.

 

TMDEL and its consolidated subsidiaries are collectively referred to herein as the “Company” unless specific reference is made to an entity.

 

TMDEL and its subsidiaries as at June 30, 2025 is as follows:

 Schedule of Subsidiaries

Entity Name		Percentage of Ownership		Place of Incorporation		Principal activities
TMD Energy Limited (“TMDEL”)		Parent		Cayman Islands		Investment Holding
Straits Marine Fuels & Energy Sdn. Bhd. (“SMF”)		100%		Malaysia		Investment Holding
Straits Marine Services Pte. Ltd. (“SMS 1”)		100%		Singapore		Ship Management Services
Straits Maritime Services Pte. Ltd. (“SMS 2”)		100%		Singapore		Provision of Shipping Services, General Cleaning & Disinfection
Tumpuan Megah Development Sdn. Bhd. (“Tumpuan Megah”)		100%		Labuan, Malaysia		Provision of Bunkering Services for Marine Fuels and Petroleum-Based Products
Cavalla Asia Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
Dolphin Asia Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
Escolar Asia Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
Oscar Asia Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
Phoenix Asia Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
S3 Asia Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
TMD Straits Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
TMD Sturgeon Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
SMF Begonia Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
SMF Ixora Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
SMF Omura Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
SMF Eden Maritime Ltd		100%		Labuan, Malaysia		Provision of Vessel Chartering Services
SMF Beluga Ltd		51%		Labuan, Malaysia		Provision of Vessel Chartering Services
Sierra Pioneer Marine Ltd		51%		Labuan, Malaysia		Provision of Vessel Chartering Services
Katsu Pioneer Marine Ltd		51%		Labuan, Malaysia		Provision of Vessel Chartering Services
TMD Marine Fuels Sdn. Bhd. (“TMDF”)		30%		Malaysia		Dealing in Oil and Petroleum Products, Oil Trading, Oil Bunkering and Related Services

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

The effective organizational flow chart of TMDEL and its subsidiaries as at June 30, 2025 is as follows:

 

 

Note 2 - Summary of Significant Accounting Policies

 

Basis of Presentation and Consolidation

 

The unaudited consolidated financial statements and related notes include all the accounts of the Company and its subsidiaries, entities in which the Company directly and indirectly controls. The unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

 

TMD Marine Fuels Sdn. Bhd.

 

TMDEL has consolidated the financial statements of TMDF, in which it holds a 30% equity interest, in accordance with ASC 810, Consolidation. Under ASC 810, entities may be consolidated when the reporting entity exercises control over the investee’s significant financial and operational policies, regardless of ownership percentage, if control exists.

 

Although TMDEL, through its subsidiary Tumpuan Megah, directly owns only 30% of TMDF, TMDF is considered to be under control due to the governance structure and ownership arrangements. Dato’ Mohd Suhaimi bin Hashim, who holds a 70% equity interest in TMDF, also serves as a common director of Tumpuan Megah. Additionally, Dato’ Sri Kam Choy Ho is the director of TMDF and also serves as a common director of Tumpuan Megah, TMDEL and Straits. As a result of the above, Tumpuan Megah has effective control over the governance, strategic decision making and operations of TMDF.

 

Based on this assessment of control, management has concluded that TMDEL has the ability to control TMDF’s financial and operational policies, justifying consolidation under ASC 810.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 2 - Summary of Significant Accounting Policies (Continued)

 

Use of Estimates

 

The preparation of unaudited consolidated financial statements in conformity with U.S. GAAP requires the Company to make certain estimates and assumptions that affect the amounts reported and disclosed in the unaudited consolidated financial statements and related notes.

 

The most significant estimates and judgments include the allowance for doubtful accounts, useful life of property, plant and equipment, residual values for leased assets, income taxes and uncertain tax positions. Actual amounts could differ from those estimates.

 

Functional Currency and Foreign Currency Translation

 

The accompanying unaudited consolidated financial statements are presented in United States dollar (“$”), which is the reporting currency of the Company. For the subsidiaries whose functional currencies are Ringgit Malaysia (“RM”) and Singapore Dollar (“SGD”), results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the exchange rate at the end of the period, and equity is translated at historical exchange rates. The resulting translation adjustments are included in determining other comprehensive income or loss. Transaction gains and losses are reflected in the unaudited consolidated statements of operations and comprehensive (loss) income.

 

Fair Value of Financial Instruments

 

The Company follows the provisions of ASC Topic 820, Fair Value Measurements and Disclosures. It clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

 

	●	Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.
	●	Level 2 – Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.
	●	Level 3 – Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

 Schedule of Fair Value Measurements

		Carrying Amount												Estimated
		Level 1				Level 2				Level 3				Fair Value
June 30, 2025
Investment in equity securities		$	-			$	-			$	89,712			$	89,712
December 31, 2024
Investment in equity securities		$	-			$	-			$	88,908			$	88,908

 

For other accounts, the carrying amounts reported in the accompanying unaudited consolidated balance sheets for cash and cash equivalents, accounts receivable, other receivables and current assets, short-term loans, accounts payable, and other payables, due to related parties and income tax payable approximate their fair value based on the short-term maturity of these instruments.

 

Cash and cash equivalents

 

Cash and cash equivalents are financial assets that are either cash or highly liquid investments if any with an original maturity term of 90 days or less.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 2 - Summary of Significant Accounting Policies (Continued)

 

Accounts Receivable and Credit Losses on Financial Instruments

 

Accounts receivable consists principally of amounts due from trade customers. Credit is extended based on an evaluation of the customer’s financial condition and collateral is not generally required.

 

The Company recognizes credit losses on financial instruments in accordance with ASC Topic 326, Financial Instruments – Credit Losses. The Company uses the Current Expected Credit Losses (“CECL”) model to estimate credit losses on financial assets measured at amortized cost, as well as certain off-balance sheet credit exposures.

 

Under the CECL model, the estimation of credit losses involves significant judgment and estimation uncertainty. Management exercises its judgment based on historical loss experience, current economic conditions, and reasonable and supportable forecasts. Changes in these factors could have a material impact on the estimated credit losses.

 

The Company has evaluated its account receivables and recognized a credit loss of $807 for the six months ended June 30, 2025, and $69,474 and $nil for the years ended December 31, 2024 and 2023 respectively.

 

Inventories

 

Inventories, primarily consisting of marine gas oil and low sulfur fuel oil. Inventories are stated at the lower of cost or net realizable value, with net realized value represented by estimated selling prices in the ordinary course of business, less reasonably predictable costs of disposal and transportation.

 

Cost of inventory is determined using the weighted average method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise, reduction in prices, and damaged products, which is dependent upon factors such as historical and forecasted consumer demand.

 

Deferred Offering Costs

 

Deferred offering costs represent legal, accounting, and other direct costs related to the Company’s initial public offering (“IPO”). These costs are capitalized as incurred and are included in the accompanying balance sheet as “Other receivables and current assets”. As of December 31, 2024, the Company recorded $1,839,846 of deferred offering costs.

 

On April 22, 2025, upon the completion of IPO of the Company, IPO costs capitalized as of December 31, 2024, together with other IPO costs incurred during the six months ended June 30, 2025, totaling $3,488,971, were charged to shareholder’s equity under additional paid-in capital.

 

Related Party Transactions

 

A related party is generally defined as (i) any person and or their immediate family hold 10% or more of the Company’s securities (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business. Related parties may be individuals or corporate entities.

 

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 2 - Summary of Significant Accounting Policies (Continued)

 

Property, Plant and Equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Identifiable significant improvements are capitalized and expenditures for maintenance, repairs, and betterments, including replacement of minor items, are charged to expense.

 

Depreciation is computed based on cost, less the estimated residual value, if any, using the straight-line method over the estimated useful life.

 

The residual value rate and useful life of property, plant and equipment are summarized as follows:

 Schedule of Residual Value Rate and Useful Life of Property, Plant and Equipment

Property, Plant and Equipment		Useful Life
Dry-docking expenditures		2.5 years from the date of dry dock
Furniture and fittings		5 – 10 years
Leased property		Over the life of the lease
Leasehold improvements		5 –10 years
Motor vehicles		5 years
Real properties		40 years
Shipping tools, equipment and computers		2 – 10 years
Vessels		9 – 25 years

 

Residual values for vessels

 

The Company determines the residual value of finance lease vessels based on the lightweight of the vessels valued at the metal scrap prices quoted by vessel demolition markets. The Company reassess the estimated residual value of the vessel once in every 5 years.

 

Dry-docking expenditures

 

Dry-docking expenditures such as inspection, manual, and certificate, engine maintenance, spare part, painting, vessel maintenance etc. are capitalized in accordance ASC 360-10-35 when such costs are considered to enhance the future economic benefits of the vessel. The expenditures are capitalized when they significantly extend the useful life of the vessel, improve the efficiency or performance of the vessel, or increase the capacity of the vessel.

 

Capitalized dry-docking expenditures are included in the carrying amount of the vessel and are depreciated over the period until the next scheduled dry-docking. If the criteria for capitalization are not met, the expenditures are expensed as incurred.

 

Goodwill

 

Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. The Company assesses goodwill for impairment in accordance with ASC subtopic 350-20, Intangibles—Goodwill and Other: Goodwill (“ASC 350-20”), which requires that goodwill be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20.

 

A reporting unit is defined as an operating segment or one level below an operating segment referred to as a component. The Company determines its reporting units by first identifying its operating segments, and then assesses whether any components of these segments constituted a business for which discrete financial information is available and where the Company’s segment manager regularly reviews the operating results of that component. The Company determined that it has one reporting unit because components below the consolidated level either did not have discrete financial information or their operating results were not regularly reviewed by the segment manager.

 

The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test in accordance with ASC 350-20. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. For the six months ended June 30, 2025 and the years ended December 31, 2024 and 2023, impairment of goodwill of $nil, $1,129 and $nil was identified, respectively.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

The attributable amount of goodwill is included in the determination of the amount of gain or loss recognized upon disposal of a portion of reporting unit that constitutes a business. When the Company disposes of a business within the reporting unit, the amount of goodwill disposed is measured on the basis of the relative fair value of the business disposed and the portion of the reporting unit retained. This relative fair value approach is not used when the business to be disposed was not integrated into the reporting unit after its acquisition, in which case the current carrying amount of the acquired goodwill should be included in the carrying amount of the business to be disposed.

 Schedule of Goodwill

		June 30, 2025				December 31, 2024				December 31, 2023
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Acquisition of TMDF		$	-			$	1,129			$	-
Impairment of goodwill in relation to TMDF			-				(1,129	)			-
Balance as of June 30, 2025			-				-				-

 

Impairment of Long-Lived Assets

 

The Company accounts for impairment of long-lived assets in accordance with ASC 360, Property, Plant and Equipment. Long-lived assets consist primarily of property, plant and equipment. In accordance with ASC 360, the Company evaluates the carrying value of long-lived assets when it determines a triggering event has occurred, or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When indicators exist, recoverability of assets is measured by a comparison of the carrying value of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. Examples of such triggering events include a significant disposal of a portion of such assets and adverse changes in the market involving the business employing the related assets. If such assets are determined not to be recoverable, the Company performs an analysis of the fair value of the asset group and will recognize an impairment loss when the fair value is less than the carrying amounts of such assets. The fair value, based on reasonable and supportable assumptions and projections, requires subjective judgments. Depending on the assumptions and estimates used, the appraised fair value projected in the evaluation of long-lived assets can vary within a range of outcomes. The Company considers the likelihood of possible outcomes in determining the best estimate for the fair value of the assets.

 

The Company engaged an independent third-party valuer to assess the cost of the vessels, ensuring that the carrying amount of the vessels does not exceed their recoverable amount.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 2 - Summary of Significant Accounting Policies (Continued)

 

Investments

 

Cost Method Investments

 

The Company accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise significant influence under the cost method; using ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The Company measure investments in equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. Gains and losses on these securities are recognized in other income and expenses.

 

Equity Method Investments

 

The Company accounts for its investment that represents 20% to 50% ownership, and for which the Company have the ability to exercise significant influence through board representation under the equity method.

 

Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the investee’s profits or losses in the income statement, and its share of movements in other comprehensive (loss) income. Dividends received or receivable from investees are recognized as a reduction in the carrying amount of the investment.

 

When the Company’s share of losses in an investee equals or exceeds its interest in the investee, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred obligations or made payments on behalf of the investee.

 

The carrying amounts of equity-accounted investments are tested for impairment.

 

Lease Commitments

 

The Company adopted ASC Topic 842, Leases which generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.

 

The Company determined if an arrangement is a lease at inception.

 

Operating leases are included in operating lease ROU assets and short and long-term lease liabilities in the unaudited consolidated balance sheets. Lease cost for operating leases is recognized on a straight-line basis which includes the amortization of the ROU asset and interest expense related to the operating lease liability and is recorded as rent expenses.

 

Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in the unaudited consolidated balance sheets. Lease cost for finance leases includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded as Depreciation and amortization expense; and interest expense on the finance lease liability, which is calculated using the effective interest method and recorded as interest expense.

 

Revenue Recognition

 

The Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all years presented. The core principle of this new revenue standard is that a company should recognize revenue when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle by the Company in its determination of revenue recognition: (1) identification of the contract, or contracts, with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the Company satisfy a performance obligation.

 

The Company’s derived its revenues from a diverse range of maritime services provided to clients within the industry.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Sales of cargo oil and fresh water, and bunkering facilitation

 

Revenue generated from sales of cargo oil and fresh water, and bunkering facilitation involves the procurement and delivery of marine gas oil, low sulfur fuel oil, and fresh water for delivery to customers’ ships. The Company recognize revenues at a point in time when cargo oil and fresh water has been delivered and accepted by the customer, indicating fulfillment of the performance obligation.

 

Sales of cargo oil and fresh water, and bunkering facilitation are not capable of being a distinct and separately identifiable. The performance obligation is only considered satisfied when sales of cargo oil and fresh water and bunkering facilitation are completed simultaneously.

 

Vessel Chartering Services

 

Revenue generated from vessel chartering services involves arranging charters for marine transportation for various purposes such as cargo transportation or offshore operations. The Company recognizes revenues over time based on the time elapsed between the delivery of a vessel to a charterer and the return of a vessel from the charterer and invoicing is done on a monthly basis.

 

Ship Management Services

 

Revenue from ship management services involves providing technical management, crew management, marine consultancy, and shipping services. The Company recognize revenues at a point in time when services are rendered and accepted by customer indicating fulfillment of the performance obligation.

 

The Company is considered a principal for all the revenues it generates above as it is directly involved in the procurement, delivery, and provision of the goods and services to customers. As the principal, the Company assumes the risks and rewards associated with the transactions, including responsibility for fulfilling the performance obligations and bearing any associated costs and risks, bears the risk of loss or damage to inventory, bears the credit risk associated with customers’ ability to pay for the goods or services. Therefore, the Company recognizes revenue at the gross amount.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 2 - Summary of Significant Accounting Policies (Continued)

 

Costs of Revenues

 

Cost of revenues primarily consist of cost of goods sold, cargo insurance, and cost incurred in the course of sales and distribution of cargo oil.

 

Share of Losses of Associate

 

Share of losses of associates comprises our share in the net loss of associate, Horizon Shipyard Inter Globe (M) Sdn. Bhd., accounted for under the equity method.

 

Segment and Geographic Information

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update, or ASU 2023-07 – Improvements to Reportable Segment Disclosures, which enhances the disclosures required for reportable segments in annual and interim consolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 for the year ended December 31, 2024, retrospectively to all periods presented in the unaudited consolidated financial statement.

 

Based on the criteria established by ASC 280, Segment Reporting, the Company uses the management approach in determining its operating segments. The Company’s chief operating decision maker (“CODM”), identified as the chief executive officer of the Company, reviews consolidated results when making decisions, allocating resources and assessing performance of the Company, based on ASC 280, Segment Reporting.

 

The CODM assesses performance for the segment primarily by reviewing the segment net income (loss), which is also reported as consolidated net (loss) income on the unaudited consolidated statements of operations and comprehensive (loss) income. This assessment considers the Company’s strategic priorities, cash balance, and expected use of cash. Although the CODM also reviews revenue disaggregated by type of services provided, this information is not accompanied by any allocation of direct or indirect costs, and therefore does not constitute a separate measure of segment profit or loss. The CODM does not evaluate expenses, assets, or profitability at a disaggregated level. Instead, the CODM reviews and utilizes functional expenses (i.e., selling and marketing, general and administrative, and depreciation expenses) at the consolidated level to manage the Company’s operations. Other segment items included interest expense, total other (expense) income, net, and provision for income taxes, which are reflected in the segment and consolidated net (loss) income. The measure of segment assets is reported on the unaudited consolidated balance sheet as total consolidated assets, without reviewing segment assets at a different assets level or category.

 

The adoption of this ASU had no material impact on reportable segments identified and had no effect on the Company’s unaudited consolidated financial position, results of operations, or cash flows. Consequently, the Company has determined that it operates in one operating segment and serves both Malaysian and international customers.

 Schedule of Revenue By Reportable Segments

		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Revenue		$	276,340,120			$	688,607,542			$	633,079,773
Cost of revenues			(272,356,649	)			(672,562,832	)			(620,989,960	)
Selling and marketing expenses			(38,067	)			(39,664	)			(101,302	)
General and administrative expenses			(3,330,264	)			(5,249,099	)			(5,127,137	)
Depreciation expenses			(2,558,809	)			(4,758,014	)			(4,257,189	)
Other (expenses) income			(2,577,706	)			(3,952,786	)			354,527
Net (loss) income of single operating segment		$	(4,521,375	)		$	2,045,147			$	2,958,712

 

Earnings (Loss) per Common Share

 

Basic earnings (loss) per ordinary share is computed by dividing net (loss) income attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net (loss) income attributable to ordinary shareholders by the sum of the weighted-average number of ordinary shares outstanding and dilutive potential ordinary shares during the period.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 2 - Summary of Significant Accounting Policies (Continued)

 

Income Taxes

 

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

 

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred.

 

The Company applied the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification related to the process associated with accounting for uncertain tax positions recognized in the Company’s financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period.

 

Recently Issued Accounting Pronouncements

 

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.

 

Recent accounting pronouncements not yet adopted

 

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The intent of ASU 2023-09 is to improve the disclosures around a company’s rate reconciliation information and certain types of income taxes companies are required to pay. Specifically, these new disclosure requirements will provide more transparency regarding income taxes companies pay in the United States and other countries, along with more disclosure around a company’s rate reconciliation, among other new disclosure requirements, such that users of financial statements can get better information about how the operations, related tax risks, tax planning and operational opportunities of companies affect their effective tax rates and future cash flow prospects. ASU 2023-09 is effective for annual fiscal years beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments under ASU 2023-09 should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the potential impact of ASU 2023-09 on its unaudited consolidated financial statements and disclosures.

 

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application are permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its unaudited consolidated financial statements.

 

In January 2025, the FASB issued ASU 2025-01 Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024. ASU 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in an annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

 

The Company believe that other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission do not have a material impact on our present or near future financial statements.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 3 – Accounts receivable, net

 

Accounts receivable, net consist of the following:

 Schedule of accounts receivable, net

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Accounts receivable		$	29,942,050			$	21,808,030
Allowance for doubtful accounts			(1,570,348	)			(1,486,333	)
Total, net		$	28,371,702			$	20,321,697

 

As of the end of each of the financial year, the aging analysis of accounts receivable, net of allowance for expected credit loss, based on the invoice date is as follows:

 Schedule of aging analysis of accounts receivable

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Within 90 days		$	11,898,706			$	7,998,811
Between 91 and 180 days			1,636,109				11,774,674
Between 181 and 365 days			5,095,824				529,797
More than 365 days			9,741,063				18,415
Total, net		$	28,371,702			$	20,321,697

 

The movement of allowances for expected credit loss is as follow:

 Schedule of movement of allowances for expected credit loss

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Balance at January 1, 2025 and 2024		$	1,486,333			$	1,371,341
Addition			807				69,474
Foreign exchange difference			83,208				45,518
Balance at June 30, 2025 and December 31, 2024		$	1,570,348			$	1,486,333

 

The Company’s normal trade credit term is 30 days (2024: 30 days). Other credit terms are assessed and approved by the management on a case-by-case basis.

 

Subsequent to June 30, 2025, the Company received a total of $11,137,302 in payments on accounts receivable. The Company entered into installment agreements with major customers, which stipulated periodic payments over a specified duration, requiring the customers to fulfil all payment obligations. Under the terms of these installment agreements, $14,986,210 was scheduled with monthly repayments and will be fully settled by May 2026. For the six months ended June 30, 2025 and the years ended December 31, 2024 and 2023, allowances for expected credit loss were $807, $69,474 and $nil respectively.

 

Note 4 – Inventories, net

 

Inventories consist of the following:

 Schedule of inventories

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Bunkering marine oil		$	7,627,129			$	9,667,559

 

There was no inventory write-downs for the six months ended June 30, 2025, and the years ended December 31, 2024 and 2023.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 5 – Other receivables and current assets

 

Other receivables and currents assets consist of the following:

 Schedule of other receivables and currents assets

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Deferred offering costs		$	-			$	1,839,846
Deposits			8,220,641				5,434,606
Prepayments and other deposits			6,730,423				626,540
Other receivables			16,007,620				12,305,853
Total		$	30,958,684			$	20,206,845

 

Deposits consist of cargo deposit paid to third party supplier for upgrading of payment term and credit limit, deposit paid to third party contingent suppliers for supply of fuel oil. The deposits paid to suppliers are pledged for the purpose of obtaining purchases credit limit and is only refundable to the Company in the event the credit limit is terminated or to offset against any outstanding amount due to the suppliers.

 

Prepayments and other deposits consist of advance payments related to marketing and business development activities. In addition, a payment of $2,500,000 was made to a vessel broker to assist in identifying a target vessel. The deposit is refundable if the broker is unable to locate a suitable vessel.

 

Other receivables consist of advance payment to suppliers for purchase of cargo oil.

 

Note 6 – Property and equipment, net

 

Property and equipment, net consist of the following:

 Schedule of property and equipment, net

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
At Cost:
Dry-docking expenditures		$	15,998,313			$	14,342,245
Furniture and fixtures			68,964				58,174
Motor vehicles			284,462				252,916
Real property			836,276				784,966
Renovation and improvements			195,967				185,072
Tools and equipment			1,922,063				1,498,228
Vessels			34,399,918				34,399,919
Total, at cost			53,705,963				51,521,520
Less: Accumulated depreciation			(21,972,674	)			(19,388,059	)
Total, net		$	31,733,289			$	32,133,461

 

Depreciation expenses, including the depreciation expense of assets under finance leases were $2,558,809 for the six months ended June 30, 2025, and $4,758,014 and $4,257,189 for the years ended December 31, 2024 and 2023, respectively.

 

Note 7 – Investment and its valuations

 

Investments in Horizon Shipyard Inter Globe (M) Sdn. Bhd. (“Horizon”) consist of the following:

 Schedule of investments

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Balance at January 1, 2025 and 2024		$	88,908			$	4,343
Beginning balance		$	88,908			$	4,343
Investments during the period / year			-				85,293
Share of losses of associate			(4,029	)			(710	)
Foreign exchange difference			4,833				(18	)
Balance at June 30, 2025 and December 31, 2024		$	89,712			$	88,908
Ending Balance		$	89,712			$	88,908

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Investment in Horizon

 

On June 22, 2023, Tumpuan Megah subscribed 20% equity interest in Horizon through the purchase of 20,000 ordinary shares for RM20,000. Horizon is a company specializing in repair and maintenance of transport equipment except motor vehicles in Malaysia. The investment is accounted for using the measurement alternative.

 

The investment above consist of investment in equity securities without readily determinable fair values are investments in privately held companies, the Company adopted the guidance of ASC 321, Investments - Equity Securities, which allows an entity to measure investments in equity securities without a readily determinable fair value using a measurement alternative that measures these securities at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of same issuer (the “Measurement Alternative”). The fair value of equity securities without readily determinable fair values that have been remeasured due to impairment are classified within Level 3. Management assesses each of these investments on an individual basis and is required to make a qualitative assessment for impairment at each reporting period.

 

On April 9, 2024, Tumpuan Megah subscribed additional 380,000 ordinary shares in Horizon in proportion with its existing shareholding in Horizon for cash consideration of RM380,000. Tumpuan Megah’s equity interest remained unchanged at 20% after subscription of additional shares.

 

After SMF acquired the remaining 30% ownership interest of Tumpuan Megah on May 31, 2024, the Company accounts for its investment that represents 20% ownership, and for which the Company have the ability to exercise significant influence through board representation under the equity method. Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the investee’s profits or losses in the income statement, and its share of movements in other comprehensive (loss) income. The carrying amounts of equity-accounted investments are tested for impairment. For the six months ended June 30, 2025 and the year ended December 31, 2024, share of losses of associate were $4,029 and $710, respectively.

 

The Company did not recognize an impairment loss for the six months ended June 30, 2025 and the years ended December 31, 2024, and 2023, respectively.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 8 - Related party transactions

 

The nature and purpose of transaction amounts and outstanding balances for related parties consist of the following:

 Schedule of nature and purpose of transaction amounts and outstanding balances for related parties

						As of								For the Six Months Ended				For the Years Ended
						June 30, 2025				December 31, 2024				June 30, 2025				December 31, 2024				December 31, 2023				Subsequent to June 30,
						(Unaudited)				(Audited)				(Unaudited)				(Audited)				(Audited)				2025
						Balances								Amounts												Amounts
Name		Relationship		Nature/Purpose		Receivables (Liabilities)								Sales (Purchases)												Settled
Benua Hijau Sdn. Bhd.		Entity owned by Controlling Shareholder		Corporate Social Responsibility expenses		$	(156,136	)		$	(98,504	)		$	-			$	(98,658	)		$	-			$	18,085
Black Hummer Security Sdn. Bhd.		An entity controlled by Tan Sri Mohd Bakri Bin Mohd Zinin, one of the directors of Tumpuan Megah		Security services			-				-				-				-				(1,448	)			-
Dato’ Mohd Suhaimi bin Hashim		Director of Tumpuan Megah and shareholder of TMDF		Advances			(237	)			(224	)			-				-				-				-
Pan Management Services Ltd		Entity owned by Controlling Shareholder		Management service			(72,942	)			(131,081	)			-				-				(234,137	)			2,600
Raja Ismail Bin Raja Mohamed		Director of Tumpuan Megah		Reimbursable legal fees			1,927,246				1,823,609				-				-				-				-
Sinar Maju Logistik Sdn. Bhd.		Entity owned by Controlling Shareholder		Shipping agency services			137,715				95,841				(47,325	)			(270,505	)			(525,067	)			23,471
Sinar Maju Marin Sdn. Bhd.		Subsidiary of Sinar Maju Logistik Sdn. Bhd., Entity owned by Controlling Shareholder		Shipping agency services			(1,665	)			(1,710	)			(17,213	)			(69,404	)			(71,606	)			1,665
Straits Alliance Transport Sdn. Bhd.		Entity owned by Controlling Shareholder		Advances			1,116				1,057				-				-				-				-
Straits Energy Resources Berhad		Controlling Shareholder		Working capital advances			15,903,625				8,636,466				-				-				-				888,254
Straits Management Services Sdn. Bhd.		Entity owned by Controlling Shareholder		Management service			(793,078	)			(395,226	)			-				(499,091	)			(269,897	)			42,307
Victoria STS (Labuan) Sdn. Bhd.		Entity owned by Controlling Shareholder		(i) Sales of marine gas oil			11,592				27,762				-				-				151,349				-
				(ii) Sales of ship management service			8,480				935,522				154,866				177,534				122,240				-
				(iii) Purchase of tugboat services			-				-				(17,116	)			(9,402	)			(21,201	)			-
Victoria 3 Limited		Subsidiary of Victoria STS (Labuan) Sdn. Bhd., Entity owned by Controlling Shareholder		Sales of ship management service			3,155				72,310				-				-				16,788				-
Total, net						$	16,968,871			$	10,965,822			$	73,212			$	(769,526	)		$	(832,979	)		$	976,382

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 8 - Related party transactions (Continued)

 

Related party transactions other than sales and purchases:

 

						For the Six Months Ended				For the Years Ended
						June 30, 2025				December 31, 2024				December 31, 2023
Name		Relationship		Nature/Purpose		(Unaudited)				(Audited)				(Audited)
Benua Hijau Sdn. Bhd.		Entity owned by Controlling Shareholder		Corporate social responsibility expenses		$	(79,458	)		$	-			$	-
Ho Hung Ming		Son of Dato’ Sri Kam Choy Ho		Remuneration			(38,894	)			(72,487	)			(67,895	)
Straits Management Services Sdn. Bhd.		Entity owned by Controlling Shareholder		Management service			(373,129	)			-				-
Straits Energy Resources Berhad		Controlling Shareholder		Interest income			617,809				375,365				32,089
						$	126,328			$	302,878			$	(35,806	)

 

 Schedule of related party balances

		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Due from related parties		$	17,992,929			$	11,592,567
Due to related parties			(1,024,058	)			(626,745	)
Total, net		$	16,968,871			$	10,965,822

 

The majority of the amounts due from and due to related parties are interest-free, unsecured, with no fixed terms of repayment, and are payable on demand.

 

Certain amounts due from the related party, Straits, totaling $16,892,805 (2024: $11,911,593), are interest-bearing at 8.25% (2024: 8.25%) per annum and have no fixed repayment terms.

 

Interest income from amounts due from related parties was $617,809, $375,365 and $32,089 for the six months ended June 30, 2025, and the years ended December 31, 2024 and 2023, respectively.

 

The Company received bank guarantees from a bank to support certain trade payables. Straits provided a corporate guarantee to the bank for these facilities. The guarantees ensure timely payment to suppliers in the event of default by the Company. The maximum potential liability under the guarantees is $1,798,391 as at June 30, 2025.

 

Amounts due from Raja Ismail Bin Raja Mohamed

 

The amounts due from Raja Ismail Bin Raja Mohamed (“Raja Ismail”) (not a principal shareholder) consist of reimbursable legal fees incurred by Tumpuan Megah, a subsidiary of the Company (with Straits as a controlling shareholder of the Company). These fees are recoverable from Raja Ismail through a personal guarantee provided to Straits under a binding personal guarantee agreement (the “Guarantee Agreement”). While the guarantee is formally provided to Straits, it indemnifies Tumpuan Megah by ensuring reimbursement of legal costs associated with arbitration, resulting in no net financial impact on Tumpuan Megah.

 

The Guarantee Agreement, which includes a continuing guarantee clause, binds Raja Ismail (the “Guarantor”) to cover all sums potentially payable by Tumpuan Megah in connection with the arbitration, and indemnifies Tumpuan Megah against any losses, damages, or expenses related to the case. Under ASC 310-10, receivables can be recognized at fair value if there is a contractual right to payment. This Agreement creates such a right, allowing the Company to recognize a receivable. Despite the general presumption against recognizing an asset when the counterparty disputes liability, the presumption is overcome here because (1) Raja Ismail has agreed to reimburse the legal fees, as outlined in the binding Guarantee Agreement, and (2) he has begun repaying these fees according to a set schedule, reinforcing the recovery certainty.

 

For accounting treatment, the Company records the legal fees as an expense and with a corresponding liability upon receipt of the bill. Simultaneously, a receivable from Raja Ismail is recorded to offset the expense under the terms of the Guarantee Agreement. This accounting approach ensures that all costs incurred in relation to the arbitration are contractually recoverable from Raja Ismail.

 

The sales revenues and purchases for related parties consist of the following:

 Schedule of sales revenues and purchases for related parties

		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Related party sales revenues		$	154,866			$	177,534			$	290,377
Related party purchases			(81,654	)			(947,060	)			(1,123,356	)
Total, net		$	73,212			$	(769,526	)		$	(832,979	)

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 9 – Other payables

 

Other payables consist of the following:

 Schedule of other payables

		June 30, 2025				December 31, 2024
		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Deferred interest income		$	11,354			$	10,752
Professional fee			330,465				233,756
Insurance services			78,880				290,809
Secretary services			110				5,490
Vessel related expenses			155,542				312,836
Others			826,093				649,322
Total other payables		$	1,402,444			$	1,502,965

 

Note 10 – Loans borrowings

 

Short-term borrowings consist of the following:

  Schedule of short-term borrowings

		June 30, 2025				December 31, 2024
		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Trade Financing Facilities		$	91,806,603			$	79,268,515

 

Line of Credit

 

Trade financing facilities is a line of credit facility which bears interest of 5.75% to 7.75% (2024: 5.82% to 8.25%) per annum and the repayment term were up to 90 days (2024: 90 days) from utilization date and is secured by the following:

 

(i)	Registered legal charge by way of debenture over all the present and future assets, rights interests and undertakings of Tumpuan Megah, a subsidiary;
(ii)	Registered legal charge by way of debenture over all the present and future assets, rights, interests and undertakings of SMF, a subsidiary;
(iii)	Corporate guarantee by the Straits, majority shareholder of the Company;
(iv)	Personal guarantee by Dato’ Sri Kam Choy Ho, director of the Company; and
(v)	Upfront cash and sinking fund placement by Tumpuan Megah and Straits.

 

Long-term borrowings consist of the following:

 Schedule of long-term borrowings

		June 30, 2025				December 31, 2024
		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Vendor installment loans		$	380,000			$	744,480
Bank term loan			554,173				536,592
Total			934,173				1,281,072
Less: current portion of loans payable			(409,025	)			(776,753	)
Long-term debt payable		$	525,148			$	504,319

 

Long-term borrowings maturities, excluding finance leases as follows:

 Schedule of long-term borrowings maturity

For the year ending June 30,
2026		$	409,025
2027			29,928
2028			32,727
2029			35,690
2030			38,824
Thereafter			387,979
Total		$	934,173

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Vendor Installment Loans

 

The Company has entered into installment loans for the purchase of vessels, which are used primarily for its bunkering operations. These loans are secured by the vessels acquired and bear fixed repayment schedules over the life of the loan, with periodic payments consisting of both principal and interest components.

 

As of June 30, 2025, the aggregate outstanding balance of installment loans for the purchase of vessels amounted to $380,000, which shall be settled within 1 year, with interest rates at 5.24% (2024: ranging from 5.24% to 7.93%). The Company is in compliance with all covenants and requirements stipulated in the loan agreements. The vessels acquired through these loans are recorded as assets on the Company’s balance sheet and are depreciated over their useful lives.

 

Interest expenses related to these installment loans are recognized over the life of the loans using the effective interest method.

 

Bank Term Loan

 

On June 24, 2022, the Company entered into a facility agreement for a term loan up to SGD824,000 (equivalent to $593,198) to partially finance the acquisition of leasehold property. Interest is charged at 1.20% per annum over the 3-month Compounded Singapore Overnight Rate Average (“SORA”) for the first two years from the date of first disbursement, and at 2.00% per annum over the 3-month Compounded SORA from the third year onwards. The loan is secured by way of legal mortgage over the property and guarantees provided by SMS 1.

 

Total interest expenses on loans borrowings were $2,801,233, $4,594,956 and $2,200,755 for the six months ended June 30, 2025 and the years ended December 31, 2024 and 2023, respectively.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 11 – Leases

 

Classification related to operating and finance leases on the unaudited consolidated balance sheet consists of the following:

 Schedule of operating and finance leases assets and liabilities

		June 30, 2025				December 31, 2024
		As of
		June 30, 2025				December 31, 2024
		(Unaudited)				(Audited)
Lease assets and liabilities
Operating lease assets, net		$	37,981			$	16,603
Finance lease assets, net			15,432				40,454
Operating lease liabilities – current		$	24,437			$	9,223
Operating lease liabilities – noncurrent			14,301				7,564
Operating lease liabilities – total		$	38,738			$	16,787
Finance lease liabilities – current		$	11,979			$	11,053
Finance lease liabilities – noncurrent			53,658				56,559
Finance lease liabilities – total		$	65,637			$	67,612

 

Components of lease cost, weighted average remaining lease terms and discount rates of operating and finance leases consist of the following:

 Schedule of lease cost, weighted average remaining lease terms and discount rates of operating and finance leases

		June 30, 2025				December 31, 2024				December 31, 2023
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Lease expenses
Operating lease expenses – SG&A portion		$	13,225			$	21,874			$	23,089
Finance lease expenses
Depreciation expense of leased assets			26,351				50,426				17,625
Interest expense of finance lease		$	1,564			$	3,420			$	2,306
Other Information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows – operating leases		$	12,683			$	22,959			$	23,039
Operating cash flows – finance leases			1,564				3,420				2,306
Financing cash flows – finance leases		$	5,562			$	10,216			$	41,328
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		$	31,350			$	15,359			$	-
Weighted average remaining lease term (in years)
Operating leases			1.51				1.01				1.00
Finance leases			4.91				5.41				3.25
Average discount rate
Operating leases			8.72	%			7.74	%			5.77	%
Finance leases			4.67	%			4.67	%			4.63	%

 

Future minimum payments under operating and finance leases consist of the following:

 Schedule of future minimum payments under operating and finance leases

		Operating Leases				Finance Leases
Future minimum lease payments
Period ended June 30, 2026		$	26,833			$	14,758
Period ended June 30, 2027			14,695				14,758
Period ended June 30, 2028			-				14,758
Period ended June 30, 2029			-				14,758
Period ended June 30, 2030			-				14,346
Total		$	41,528			$	73,378
Less: Interest			(2,790	)			(7,741	)
Present value of lease liabilities		$	38,738			$	65,637

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 12 – Equity

 

The Company is authorized to issue 500,000,000 shares of ordinary shares with $0.0001 par value.

 

As at date of incorporation, the Company has 100 shares of ordinary shares $0.0001 par value issued and outstanding. These shares were issued on the incorporation of the Company on October 17, 2023.

 

On May 31, 2024, the Company issued additionally 19,999,900 ordinary shares of $0.0001 par value for its re-organization transactions as follows:

 

(i)	An aggregate 15,336,423 shares of ordinary shares to Straits for the acquisition of 100% in SMF, TMD Straits and TMD Sturgeon, 70% in Tumpuan Megah and 51% in SMS 1;
(ii)	1,737,467 shares of ordinary shares to Dato’ Mohd Suhaimi bin Hashim for the acquisition of 15% Tumpuan Megah;
(iii)	1,737,467 shares of ordinary shares to Yong Sing Goo for the acquisition of 15% Tumpuan Megah; and
(iv)	1,188,543 shares of ordinary shares to Platinum Gate Capital Pte Ltd. for the acquisition of 49% SMS 1.

 

On June 30, 2024, the Company reversed $5,311,880 of additional paid-in capital (“APIC”). This amount represented cash contributions from Straits intended for the acquisition of shares in Tumpuan Megah, which had been classified as APIC within Tumpuan Megah’s equity. However, the shares were never issued. As part of the restructuring exercise for the IPO, Straits formally terminated the share acquisition agreement, and this amount was reclassified as a liability under amounts due to related parties, Straits.

 

On April 22, 2025, the Company consummated its initial public offering on NYSE American, under the ticker symbol “TMDE”. Under this offering, 3,100,000 ordinary shares were issued at a price of $3.25 per share. In addition, the Company granted a 45-day option to the underwriter to purchase up to an additional 465,000 ordinary shares at the public offering price to cover over-allotment, if any. On April 22, 2025, the underwriter exercised the over-allotment option in full to purchase an additional 465,000 ordinary shares. On April 24, 2025, the Company closed its initial public offering and the exercise of the over-allotment option, received gross proceeds of $11,586,250 from the offering before deducting underwriting discounts and offering expenses.

 

On April 22, 2025, upon the completion of IPO of the Company, IPO costs capitalized as of December 31, 2024 amounted to $1,839,846, together with other IPO costs incurred during the period ended June 30, 2025, totaling $3,488,971, were charged to shareholder’s equity under APIC.

 

As at June 30, 2025, the Company has 23,565,000 shares of ordinary shares $0.0001 par value issued and outstanding.

 

Acquisition of non-controlling interest

 

On May 31, 2024, the Company’s subsidiary, SMF acquired 4,500,000 ordinary shares in Tumpuan Megah, representing 30% of the non-controlling interest in Tumpuan Megah, from Dato’ Mohd Suhaimi bin Hashim and Yong Sing Goo held equally. The purchase consideration amounting to RM9,720,989 (equivalent to $2,085,557) was settled by the issuance of 3,474,934 ordinary shares of TMDEL.

 

On May 31, 2024, SMF acquired 49,000 ordinary shares in SMS 1, representing 49% of the non-controlling interest in SMS 1, from Platinum Gate Capital Pte. Ltd. The purchase consideration amounting to RM3,324,902 (equivalent to $713,330) was settled by issuance of 1,188,543 ordinary shares of TMDEL.

 

These acquisitions are accounted for as transactions with non-controlling interests in accordance with ASC 810 (Consolidation). The impact on the Company’s equity and any adjustments to the non-controlling interests are reflected in the statement of equity and the foreign currency translation adjustments associated with these acquisitions are recorded as part of Accumulated Other Comprehensive Income in accordance with ASC 830 (Foreign Currency Matters).

 

Note 13 – Disaggregated revenue and geographic information

 

Disaggregated revenue by service lines as follows:

 Schedule of disaggregated revenue by services lines

		June 30, 2025				December 31, 2024				December 31, 2023
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Revenue by service lines recognized at a point in time:
Sales of cargo oil and fresh water, and bunkering facilitation		$	275,440,318			$	688,210,369			$	631,607,903
Vessel chartering services			-				-				1,193,594
Ship management services			899,802				397,173				278,276
Total revenue		$	276,340,120			$	688,607,542			$	633,079,773

 

Geographic revenue information as follows:

 Schedule of geographic revenue information

		June 30, 2025				December 31, 2024				December 31, 2023
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Revenue by geographic area:
Hong Kong		$	30,697,646			$	53,718,192			$	-
Malaysia			245,507,942				634,482,899				633,022,743
Indonesia			-				-				6,356
Singapore			41,538				405,544				50,674
Vietnam			92,994				907				-
Total revenue		$	276,340,120			$	688,607,542			$	633,079,773

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 14 – Income Taxes

 

Cayman Islands

 

Cayman Islands entities are not subject to income taxes on profits, income, gains or appreciation, and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

 

Payments of dividends and capital in respect of the Company’s ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, as the case may be, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

 

Malaysia

 

Malaysia Income Tax is calculated at 24% of the estimated assessable profits for the relevant year. Net operating losses can be carried forward for a limit of ten consecutive years starting from the year subsequent to the year in which the loss was incurred.

 

For Labuan Trading activity, the chargeable profits would subject to tax under Labuan Business Activity Act, 1990 (“LBATA”) of which 3% of net audited profits would be taxed.

 

Singapore

 

Singapore Income Tax is calculated at 17% of chargeable income for the relevant year. Net operating losses can be carried forward indefinitely to offset against future taxable income.

 

Taxable (loss) income before income taxes by jurisdiction are as follows:

 Schedule of taxable income/(loss) before income taxes by jurisdiction

		June 30, 2025				December 31, 2024				December 31, 2023
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Labuan		$	1,022			$	26,190			$	25,263
Malaysia			(1,039,138	)			1,280,329				684,759
Singapore			50,082				121,780				64,217
Total tax (benefits) expenses		$	(988,034	)		$	1,428,299			$	774,239

 

Reconciliations of the statutory income tax rate and the Company’s effective income tax rate are as follow:

 Schedule of reconciliations of the statutory income tax rate and effective income tax rate

		June 30, 2025				December 31, 2024				December 31, 2023
		For the Six Months Ended				For the Years Ended
		June 30, 2025				December 31, 2024				December 31, 2023
		(Unaudited)				(Audited)				(Audited)
Income tax expense at Labuan statutory rate		$	8,411				26,247			$	25,375
Income tax expense at Malaysia statutory rate			283,787				613,388				710,438
Income tax expense at Singapore statutory rate			69,507				110,461				91,240
Increases (decreases) due to:
Other adjustments			(303,211	)			743,918				(177,593	)
Temporary differences			(45,490	)			(9,092	)			13,072
Other exemption, rebate and credit			-				(26,038	)			(56,397	)
(Over) Under provision in prior years(1)			(1,001,038	)			(30,585	)			168,104
Tax expense (benefits), net		$	(988,034	)			1,428,299			$	774,239

 

(1)

With the change of fiscal year end from December 31 to June 30, the reporting period of Tumpuan Megah covered 18 months from January 1, 2024 to June 30, 2025. Given Tumpuan Megah recorded a net loss for the six months ended June 30, 2025, the tax loss position reduced the overall assessable profits for the full 18-month reporting period. As a result, the provision for income tax previously recognized for the year ended December 31, 2024 was overstated by $1,001,038.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 15 – Commitments and contingencies

 

Contingencies

 

Legal proceedings between ING Bank N.V., O.W. Bunker Far East (Singapore) Pte. Ltd., and Tumpuan Megah Development Sdn. Bhd.

 

The Company’s subsidiary, Tumpuan Megah, is involved in a legal proceeding consisting of disputes over financing agreements, gas oil supply contracts, and an enforcement attempt of an English judgment against Tumpuan Megah for $937,353, along with interest and costs. The proceedings include applications, appeals, and hearings in Malaysian courts. On August 13, 2025, the Federal Court of Malaysia allowed the appeal filed by ING Bank N.V. and O.W. Bunker Far East (Singapore) Pte. Ltd. (collectively, the “Appellants”) against the Court of Appeal’s decision to order a trial of issues in connection with an application to set aside the High Court judgment dated March 22, 2021. That judgment registered a decision of the English High Court enforcing an arbitral award obtained by the Appellants against Tumpuan Megah. Accordingly, RM130,000 (equivalent to $30,745) was awarded to the Appellants. Consequently, Tumpuan Megah’s application to set aside the judgment will now resume in the High Court, with the hearing date to be scheduled in due course.

 

Tumpuan Megah is accompanied by an agreement from Straits to release to Tumpuan Megah all amounts it receives under a personal guarantee from the vendor (Raja Ismail), indemnifying Straits against Tumpuan Megah’s liabilities after deducting Straits’ cost and expense in recovery of such amount from the vendor, with the scope of indemnification potentially extending to liabilities arising from these legal proceedings.

 

There is no reasonable possibility that any losses may be incurred by the Company, as the Guaranteed Obligations are fully indemnified by Raja Ismail under the binding personal guarantee agreement (Guarantee Agreement referred to in Note 8) and there is no additional exposure to the Company as all costs and the potential liability have been indemnified under the agreement.

 

A claim for loss recovery generally can be recognized when a loss event has occurred and recovery is considered probable. If the claim is subject to dispute or litigation, a rebuttable presumption exists that recoverability of the claim is not probable. If the potential recovery exceeds the loss recognized in the financial statements or relates to a loss not yet recognized in the financial statements, such recovery should be recognized under the gain contingency model.

 

As a result of this indemnification agreement, where all potential liabilities are indemnified, no provisions have been made in the financial statements for these potential liabilities, nor has any recognition of loss contingency has been made under ASC 450-20. The total reimbursable legal fees are recorded as “Due from related parties”, which is disclosed in Note 8.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

Note 16 – Concentration, risks, and uncertainties

 

a)	Concentration of credit risk

 

Financial instruments that potentially subject the Company to concentration of credit risk are cash and cash equivalents, and accounts receivable arising from its normal business activities.

 

The Company is exposed to credit risks associated with deposits held in financial institutions. The aggregate deposit amounts in financial institutions exceeding the insurance limits set by local authorities which may be at risk in the event of a financial institution default. The Company regularly assesses and monitors credit risks associated with its deposit accounts and takes appropriate measures to mitigate potential losses.

 

The Company evaluates customer creditworthiness and maintains an allowance for expected credit losses. While the Company believes its allowance adequately covers estimated credit risks, certain long-outstanding receivables present heightened collection risks that may exceed the current allowance. The Company routinely assesses the financial strength of its customer and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, consequently, believes that its accounts receivable credit risk exposure beyond such allowance is limited. However, prolonged delinquencies could result in additional allowances or write-offs in future periods.

 

b)

Foreign currency exchange rate risk

 

The functional currencies of the subsidiaries are RM and SGD, respectively. The Company’s exposure to foreign currency exchange rate risk primarily relates to cash and cash equivalents, accounts receivable and accounts payable. Any significant fluctuation of the functional currencies against U.S. dollars may materially and adversely affect the Company’s cash flows, revenues, earnings and financial positions.

 

c)	Liquidity risk

 

The Company is exposed to liquidity risk, which is the risk that it may encounter difficulties in meeting its financial obligations as they become due. The Company manages this risk by maintaining adequate levels of cash and cash equivalents, monitoring cash flows, and maintaining access to financing sources.

 

As of June 30, 2025, the Company had net working capital deficit of $8,721,729 and a net loss of $4,521,375. Despite this, the Company believes that it can meet all its financial obligations as they become due in the foreseeable future. This conclusion is based on a detailed assessment of the Company’s financial position, forecast, and plans up to the date of approval of these financial statements.

 

Key considerations in this assessment include:

 

●	The Company maintained cash and cash equivalents of $7,060,410 as of June 30, 2025.
●	The Company’s strong payment track record and long-standing relationships suggest that trade facilities amounting to approximately $91,806,603 and supplier purchasing limits of $11,221,250 will be available for the next 12 months.
●	As of June 30, 2025, the Company had balances of available trade facilities amounting to $7,623,591 to support its operational needs.
●	Tumpuan Megah entered into a repayment plan with major debtors covering $14,986,210, with scheduled monthly repayments from June 2025 to May 2026, which are expected to provide additional liquidity.

 

Prior to the consummation of the initial public offering on April 22, 2025, the Company’s principal sources of liquidity to finance its operating activities were from the working capital, trade financing from financial institutions, suppliers credit financing and cash generated from business operation.

 

On April 22, 2025, the Company consummated its initial public offering on the NYSE American. In this offering, 3,100,000 ordinary shares were issued at a price of $3.25 per share. In addition, the Company entered into an underwriting agreement with the underwriter on April 21, 2025, which granted the underwriter a 45-day option to purchase up to an additional 465,000 ordinary shares at the public offering price of $3.25 per share to cover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option in full, purchasing an additional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering closed on April 22, 2025 and the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11,586,250, before deducting underwriting discounts and offering expenses.

 

 

TMD Energy Limited

 

Notes to Unaudited Consolidated Financial Statements

 

For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023

 

The Company believes that its existing cash resources, anticipated cashflow from operations, anticipated cash raised from financing together with net proceeds from its public offering will be sufficient to meet and fund its anticipated operation working capital and capital expansion requirements for the next 12 months from the date of this transition report.

 

If the Company experiences an adverse operating environment or incur unanticipated capital expenditure requirements, or if the Company determines to accelerate its growth, then additional financing may be required. No assurance can be given, however, that such financing would be available at all or on favorable terms. Additional financing may include the use of debt, credit facilities from financial institutions, or the sale of equity or instruments convertible into equity securities, whether by the Group or its ultimate holding company. Any issuance of additional equity could result in immediate and possibly significant dilution to its existing shareholders, while incurrence of debt would increase fixed obligations and bring along operating covenants that could restrict its operations.

 

As at June 30, 2025, the Company’s cash and cash equivalents were approximately $7,060,410, comprising primarily in cash and cash equivalent.

 

d)	Environment risk

 

The Company is subject to numerous local and international environmental laws and regulations as its operation involved the risks of fuel spillage or seepage, environmental damage and hazardous waste disposal which subsequently could result in substantial claims, fines or penalties that will have a material adverse effect on our business and operating results. To mitigate any possible environmental and financial impact, the Company implements stringent standard operating procedures and policies throughout its bunkering and vessel operations.

 

e)	Concentration risk

 

Customers

 

For the six months ended June 30, 2025, Customer A, Customer B, Customer C and Customer D accounted for 91.43%, 0.72%, 0.71% and nil of the Company’s revenues, respectively. As of June 30, 2025, these customers accounted for 33%, 26%, 19% and 19% of the Company’s accounts receivable, respectively.

 

For the year ended December 31, 2024, Customer A, Customer B, Customer C and Customer D accounted for 92.43%, 1.03%, 1.42% and 0.86% of the Company’s revenues, respectively. As of December 31, 2024, these customers accounted for 13%, 32%, 23% and 30% of the Company’s accounts receivable, respectively.

 

For the year ended December 31, 2023, Customer A and Customer B accounted for 92.66%, and 1.66% of the Company’s revenues, respectively. As of December 31, 2023, these customers accounted for 44% and 36% of the Company’s accounts receivable, respectively.

 

Suppliers

 

For the six months ended June 30, 2025, Supplier A, Supplier B and Supplier C accounted for 71.81%, 2.71% and 1.37% of the Company’s total cost of revenues, respectively. As of June 30, 2025, these suppliers accounted for 33%, 38% and 26% of the Company’s accounts payable, respectively.

 

For the year ended December 31, 2024, Supplier A, Supplier D and Supplier C accounted for 79.59%, 2.56% and 1.19% of the Company’s total cost of revenues, respectively. As of December 31, 2024, these suppliers accounted for 39%, 38% and 19% of the Company’s accounts payable, respectively.

 

For the year ended December 31, 2023, Supplier A and Supplier D accounted for 46.01% and 36.26% of the Company’s total cost of revenues, respectively. As of December 31, 2023, these suppliers accounted for nil and 95% of the Company’s accounts payable, respectively.

 

Note 17 – Subsequent events

 

The Company evaluates all events and transactions that occur after June 30, 2025 up through the date the Company issues the unaudited consolidated financial statements. Other than the event disclosed elsewhere in these unaudited consolidated financial statements, there is no other subsequent event occurred that would require recognition or disclosure in the Company’s unaudited consolidated financial statements.