{"url_path":"/sec/tmde/10-k/2026/item-19","section_key":"item-19","section_title":"Item 19 **","topic":"sec","document":{"doc_type":"20-F/A","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2009714/0001493152-26-023294-index.html","accession_number":"0001493152-26-023294","cik":"0002009714","ticker":"TMDE","issuer_name":"TMD Energy Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/2009714/0001493152-26-023294-index.html","primary_entity_key":"0002009714","primary_entity_name":"TMD Energy Ltd"},"word_count":16065,"has_tables":true,"body_markdown":"**ITEM\n19.**\n**EXHIBITS**\n\n \n\n**Exhibit\nNo.**\n\n \n\n**Description\nof Exhibit**\n\n1.1**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000164117225005803/ex3-1.htm)\n\n2.1**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000149315224049393/ex4-1.htm)\n\n4.1**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000164117225005803/ex1-1.htm)\n\n4.2**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000149315224049393/ex10-1.htm)\n\n4.3**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000149315224049393/ex10-2.htm)\n\n4.4**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000149315224049393/ex10-3.htm)\n\n8.1**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000149315224049393/ex21-1.htm)\n\n11.1**\n \n[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).](https://www.sec.gov/Archives/edgar/data/2009714/000149315224049393/ex99-1.htm)\n\n11.2**\n \n[Insider Trading Policy](https://www.sec.gov/Archives/edgar/data/2009714/000164117225010134/ex11-2.htm)\n\n12.1*\n \n[CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex12-1.htm)\n\n12.2*\n \n[CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex12-2.htm)\n\n13.1*\n \n[CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13-1.htm)\n\n13.2*\n \n[CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13-2.htm)\n\n97**\n \n[Clawback Policy](https://www.sec.gov/Archives/edgar/data/2009714/000164117225010134/ex97.htm)\n\n99.1*\n \n[Regulations that may affect our business activities.](ex99-1.htm)\n\n101.INS*\n \nInline\nXBRL Instance Document.\n\n101.SCH*\n \nInline\nXBRL Taxonomy Extension Schema Document\n\n101.CAL*\n \nInline\nXBRL Taxonomy Extension Calculation Linkbase Document\n\n101.DEF*\n \nInline\nXBRL Taxonomy Extension Definition Linkbase Document\n\n101.LAB*\n \nInline\nXBRL Taxonomy Extension Label Linkbase Document\n\n101.PRE*\n \nInline\nXBRL Taxonomy Extension Presentation Linkbase Document\n\n104*\n \nCover\nPage Interactive Data File (embedded within the Inline XBRL document)\n\n \n\n*\nFiled\nwith this Transition Report.\n\n**\nPreviously\nfiled.\n\n \n\n21\n\n \n\n \n\n**SIGNATURES**\n\n \n\nThe\nregistrant hereby certifies that it meets all of the requirements for filing on the Transition Report on Form 20-F and that it has duly\ncaused and authorized the undersigned to sign this Transition Report on its behalf.\n\n \n\n \nTMD\nEnergy Limited\n\n \n \n \n\n \nBy:\n*/s/\nDato’ Sri Kam Choy Ho*\n\n \nName:\n\n Dato’\nSri Kam Choy Ho\n\n \nTitle:\nDirector\nand Chief Executive Officer\n\n \n\nDate:\nMay 15, 2026\n\n \n\n22\n\n \n\n \n\n**INDEX\nTO FINANCIAL STATEMENTS**\n\n \n\n**TMD\nENERGY LIMITED**\n\n \n\n**TABLE\nOF CONTENTS**\n\n \n\n[Report of Independent Registered Public Accounting Firm](#Fin_001)\n\nF-2\n\n \n \n\n[Consolidated\nBalance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 (Audited)](#Y-001)\nF-3\n\n \n \n\n[Consolidated\nStatements of Operations and Comprehensive (Loss) Income for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December\n31, 2024 and 2023 (Audited)](#Y-002)\nF-4\n\n \n \n\n[Consolidated\nStatements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December\n31, 2024 and 2023 (Audited)](#Y-003)\nF-5\n\n \n \n\n[Consolidated\nStatements of Cash Flows for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December 31, 2024 and 2023 (Audited)](#Y-004)\nF-6\n\n \n \n\n[Notes\nto Unaudited Consolidated Financial Statements for the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023](#Y-005)\n\nF-7\n\n \n\nF-1\n\n \n\n** **\n\n**REPORT OF INDEPENDENT\nREGISTERED PUBLIC ACCOUNTING FIRM**\n\n \n\n**J&S Associate PLT**\n\n \n\nCertified Public Accountants\n\n \n\nFirm ID: 6743\n\nMalaysia\n\nPlease note the Company’s transition\nreport for the six-month period ended June 30, 2025 is unaudited, there will be no Report of Independent Registered Public Accounting\nFirm” included in the transition Form 20-F.\n\n \n\n****\n\nF-2\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Unaudited\nConsolidated Balance Sheets**\n\n \n\n**As\nof June 30, 2025 and December 31, 2024**\n\n** **\n\n**(Expressed\nin U.S. Dollars, except for the number of shares)**\n\n \n\n  \n\n**June\n30,**\n\n**2025**\n  \n\n**December\n31,**\n\n**2024**\n \n\n  \nAs\nof \n\n  \n\n**June\n30, 2025**\n  \n\n**December\n31, 2024**\n \n\n  \n(Unaudited)  \n(Audited) \n\nASSETS \n   \n  \n\nCurrent Assets \n    \n   \n\nCash and cash\nequivalents \n$7,060,410  \n$16,069,851 \n\nAccounts receivable, net \n 28,371,702  \n 20,321,697 \n\nInventories, net \n 7,627,129  \n 9,667,559 \n\nDue from related parties \n 17,992,929  \n 11,592,567 \n\nOther receivables and current\nassets \n 30,958,684  \n 20,206,845 \n\nIncome\ntax receivable \n 1,003,350  \n - \n\nTotal\ncurrent assets \n 93,014,204  \n 77,858,519 \n\n  \n    \n   \n\nNon-Current Assets \n    \n   \n\nProperty, plant and equipment,\nnet \n 31,733,289  \n 32,133,461 \n\nInvestments, net \n 89,712  \n 88,908 \n\nOperating\nlease right of use asset (“**ROU asset**”), net \n 37,981  \n 16,603 \n\nDeferred\ntax assets, net \n 67,217  \n - \n\nTotal\nNon-Current Assets \n 31,928,199  \n 32,238,972 \n\n  \n    \n   \n\nTotal\nAssets \n$124,942,403  \n$110,097,491 \n\n  \n    \n   \n\nLIABILITIES AND SHAREHOLDERS’\nEQUITY \n    \n   \n\nCurrent liabilities \n    \n   \n\nAccounts payable and accrued\nexpenses \n$7,057,387  \n$7,426,422 \n\nOther payables \n 1,402,444  \n 1,502,965 \n\nShort-term loans \n 91,806,603  \n 79,268,515 \n\nDue to related parties \n 1,024,058  \n 626,745 \n\nTaxes payable \n -  \n 773,578 \n\nOperating lease liabilities\n– current portion \n 24,437  \n 9,223 \n\nLong-term debt payable\n– current portion \n 409,025  \n 776,753 \n\nFinance\nlease payable – current portion \n 11,979  \n 11,053 \n\nTotal\ncurrent liabilities \n 101,735,933  \n 90,395,254 \n\n  \n    \n   \n\nNon-Current Liabilities \n    \n   \n\nOperating lease liabilities\n– non current \n 14,301  \n 7,564 \n\nLong term debt payable\n– non current \n 525,148  \n 504,319 \n\nFinance\nlease payable – non current \n 53,658  \n 56,559 \n\nTotal\nNon-Current Liabilities \n 593,107  \n 568,442 \n\n  \n    \n   \n\nTotal\nLiabilities \n 102,329,040  \n 90,963,696 \n\n  \n    \n   \n\nShareholders’ Equity \n    \n   \n\nOrdinary share, par value $0.0001 per share;\n500,000,000 shares authorized;\n23,565,000 and 20,000,000 shares issued and outstanding at June 30, 2025 and December 31, 2024,\nrespectively \n 2,357  \n 2,000 \n\nAdditional paid-in capital \n 12,731,677  \n 4,634,755 \n\nRetained earnings \n 8,274,248  \n 12,583,150 \n\nAccumulated\nother comprehensive income \n 578,386  \n 663,895 \n\nTotal equity attributable\nto equity holders’ of TMD Energy Limited \n 21,586,668  \n 17,883,800 \n\nNon-controlling interests \n 1,026,695  \n 1,249,995 \n\nTotal\nEquity \n 22,613,363  \n 19,133,795 \n\n  \n    \n   \n\nTotal\nLiabilities and Shareholders’ Equity \n$124,942,403  \n$110,097,491 \n\n \n\nThe\naccompanying notes are an integral part of these unaudited consolidated financial statements.\n\n \n\nF-3\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Unaudited\nConsolidated Statements of Operations and Comprehensive (Loss) Income**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n** **\n\n**(Expressed\nin U.S. Dollars, except for the number of shares)**\n\n \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\n  \n\nFor the Six Months\nEnded\n  \nFor\nthe Years Ended \n\n  \n\n**June\n30, 2025**\n  \n\n**December\n31, 2024**\n  \n\n**December\n31, 2023**\n \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nRevenues, net \n$276,185,254  \n$688,430,008  \n$632,789,396 \n\nRevenues – related\nparties, net \n 154,866  \n 177,534  \n 290,377 \n\nTotal revenues \n 276,340,120  \n 688,607,542  \n 633,079,773 \n\n  \n    \n    \n   \n\nCost of revenues \n (272,274,995) \n (671,615,772) \n (619,866,604)\n\nCost of revenues –\nrelated parties \n (81,654) \n (947,060) \n (1,123,356)\n\nTotal cost of revenues \n (272,356,649) \n (672,562,832) \n (620,989,960)\n\n  \n    \n    \n   \n\nGross profit \n 3,983,471  \n 16,044,710  \n 12,089,813 \n\n  \n    \n    \n   \n\nOperating expenses \n    \n    \n   \n\nSelling and marketing expenses \n (38,067) \n (39,664) \n (101,302)\n\nGeneral and administrative\nexpenses \n (3,330,264) \n (5,249,099) \n (5,127,137)\n\nDepreciation\nexpenses \n (2,558,809) \n (4,758,014) \n (4,257,189)\n\nTotal operating expenses \n (5,927,140) \n (10,046,777) \n (9,485,628)\n\n  \n    \n    \n   \n\n(Loss) Income from operations \n (1,943,669) \n 5,997,933  \n 2,604,185 \n\n  \n    \n    \n   \n\nOther (expenses) income,\nnet \n    \n    \n   \n\nInterest income \n 16,072  \n 52,126  \n 10,264 \n\nSundry (expense) income \n (774,985) \n 2,022,473  \n 3,321,563 \n\nInterest expenses \n (2,802,798) \n (4,598,376) \n (2,203,061)\n\nShare of losses of associate \n (4,029) \n (710) \n - \n\nTotal other (expenses) income, net \n (3,565,740) \n (2,524,487) \n 1,128,766 \n\n  \n    \n    \n   \n\n(Loss) Income before income\ntaxes \n (5,509,409) \n 3,473,446  \n 3,732,951 \n\nIncome tax benefits (expenses) \n 988,034  \n (1,428,299) \n (774,239)\n\nNet (loss) income \n (4,521,375) \n 2,045,147  \n 2,958,712 \n\nLess: loss (income) attributable\nto non-controlling interest \n 212,473  \n (167,910) \n (962,761)\n\nNet\n(loss) income attributable to controlling interest \n$(4,308,902) \n$1,877,237  \n$1,995,951 \n\n  \n    \n    \n   \n\nWeighted average number of ordinary shares\noutstanding: \n    \n    \n   \n\nOrdinary shares - Basic\nand diluted \n 21,359,033  \n 20,000,000  \n 20,000,000 \n\n  \n    \n    \n   \n\n(Loss) Earnings per share: \n    \n    \n   \n\nBasic and diluted \n$(0.20) \n$0.09  \n$0.10 \n\n  \n    \n    \n   \n\nOther comprehensive (loss)\nincome: \n    \n    \n   \n\nNet (loss) income \n$(4,521,375) \n$2,045,147  \n$2,958,712 \n\nForeign currency translation\nadjustments \n (96,336) \n 276,068  \n 1,887,789 \n\nTotal\ncomprehensive (loss) income \n$(4,617,711) \n$2,321,215  \n$4,846,501 \n\n  \n    \n    \n   \n\nComprehensive (loss) income including non-controlling\ninterest \n$(4,617,711) \n$2,321,215  \n$4,846,501 \n\nComprehensive (loss) income\nattributable to non-controlling interest \n 223,300  \n (167,781) \n (832,987)\n\nComprehensive (loss)\nincome attributable to controlling interest \n$(4,394,411) \n$2,153,434  \n$4,013,514 \n\n \n\nThe\naccompanying notes are an integral part of these unaudited consolidated financial statements.\n\n \n\nF-4\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Unaudited\nConsolidated Statements of Changes in Shareholders’ Equity**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n** **\n\n**(Expressed\nin U.S. Dollars, except for the number of shares)**\n\n \n\n  \nNumber\nof Shares  \nAmount  \nPaid-in Capital  \nRetained\nEarnings  \nComprehensive\n(Loss) Income  \nEnergy Limited  \nControlling\nInterests  \nTotal \n\n  \nOrdinary\nShares  \n**Additional**  \n   \n\nAccumulated\n\nOther\n  \n\nEquity\n\nAttributable to TMD\n  \nNon-  \n  \n\n  \nNumber\nof Shares  \nAmount  \nPaid-in Capital  \nRetained\nEarnings  \nComprehensive\n(Loss) Income  \nEnergy Limited  \nControlling\nInterests  \nTotal \n\nBalance as of December 31, 2022\n(Audited) \n 20,000,000  \n$2,000  \n$10,790,348  \n$5,344,116  \n$(28,064) \n$16,108,400  \n$3,932,230  \n$20,040,630 \n\nBalance \n 20,000,000  \n$2,000  \n$10,790,348  \n$5,344,116  \n$(28,064) \n$16,108,400  \n$3,932,230  \n$20,040,630 \n\nReturn of capital for unissued\nshares \n -  \n -  \n (2,676,807) \n -  \n -  \n (2,676,807) \n -  \n (2,676,807)\n\nNet income \n -  \n -  \n -  \n 1,995,951  \n -  \n 1,995,951  \n 962,761  \n 2,958,712 \n\nForeign\ncurrency translation\nadjustments \n -  \n -  \n -  \n -  \n 2,017,563  \n 2,017,563  \n (129,774) \n 1,887,789 \n\nBalance as of December 31, 2023 (Audited) \n 20,000,000  \n 2,000  \n 8,113,541  \n 7,340,067  \n 1,989,499  \n 17,445,107  \n 4,765,217  \n 22,210,324 \n\nBalance \n 20,000,000  \n 2,000  \n 8,113,541  \n 7,340,067  \n 1,989,499  \n 17,445,107  \n 4,765,217  \n 22,210,324 \n\nAcquisition of subsidiary \n -  \n -  \n -  \n -  \n -  \n -  \n 71,484  \n 71,484 \n\nReturn of capital for unissued\nshares \n -  \n -  \n (5,311,880) \n -  \n -  \n (5,311,880) \n -  \n (5,311,880)\n\nAcquisition of non-controlling\ninterest \n -  \n -  \n 1,833,094  \n 3,365,846  \n (1,601,801) \n 3,597,139  \n (3,754,487) \n (157,348)\n\nNet income \n -  \n -  \n -  \n 1,877,237  \n -  \n 1,877,237  \n 167,910  \n 2,045,147 \n\nForeign\ncurrency translation adjustments \n -  \n -  \n -  \n -  \n 276,197  \n 276,197  \n (129) \n 276,068 \n\nBalance as of December 31, 2024 (Audited) \n 20,000,000  \n 2,000  \n 4,634,755  \n 12,583,150  \n 663,895  \n 17,883,800  \n 1,249,995  \n 19,133,795 \n\nBalance \n 20,000,000  \n 2,000  \n 4,634,755  \n 12,583,150  \n 663,895  \n 17,883,800  \n 1,249,995  \n 19,133,795 \n\nIssuance of shares pursuant\nto IPO, net of offering cost \n 3,565,000  \n 357  \n 8,096,922  \n -  \n -  \n 8,097,279  \n -  \n 8,097,279 \n\nNet loss \n -  \n -  \n -  \n (4,308,902) \n -  \n (4,308,902) \n (212,473) \n (4,521,375)\n\nNet income\n(loss) \n -  \n -  \n -  \n (4,308,902) \n -  \n (4,308,902) \n (212,473) \n (4,521,375)\n\nForeign\ncurrency translation adjustments \n -  \n -  \n -  \n -  \n (85,509) \n (85,509) \n (10,827) \n (96,336)\n\nBalance as of June\n30, 2025 (Unaudited) \n 23,565,000  \n$2,357  \n$12,731,677  \n$8,274,248  \n$578,386  \n$21,586,668  \n$1,026,695  \n$22,613,363 \n\nBalance \n 23,565,000  \n$2,357  \n$12,731,677  \n$8,274,248  \n$578,386  \n$21,586,668  \n$1,026,695  \n$22,613,363 \n\n \n\nThe\naccompanying notes are an integral part of these unaudited consolidated financial statements.\n\n \n\nF-5\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Unaudited\nConsolidated Statements of Cash Flows**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n** **\n\n**(Expressed\nin U.S. Dollars)**\n\n \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\n  \n\nFor the Six Months\nEnded\n  \n\nFor the Years Ended\n \n\n  \n\nJune 30, 2025\n  \n\nDecember 31,\n\n2024\n  \n\nDecember 31,\n\n2023\n \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\n  \n(Revised)  \n(Revised)  \n  \n\nCash flows from operating\nactivities: \n    \n    \n   \n\nNet (loss)\nincome \n$(4,521,375) \n$2,045,147  \n$2,958,712 \n\nAdjustments to reconcile\nnet (loss) income to net cash (used in) provided by operating activities: \n    \n    \n   \n\nDepreciation expense \n 2,558,809  \n 4,758,014  \n 4,257,189 \n\nAmortization of operating\nlease ROU assets \n 11,602  \n 21,033  \n 21,107 \n\nProvision of expected credit\nlosses \n 807  \n 69,474  \n - \n\nImpairment of goodwill \n -  \n 1,129  \n - \n\nWritten off of assets \n -  \n 373  \n - \n\nDeferred tax liabilities \n (64,914) \n -  \n (92,664)\n\nGain on disposal of assets \n -  \n -  \n (18,724)\n\nShare of losses of associate \n 4,029  \n 710  \n - \n\nChange in assets and liabilities: \n    \n    \n   \n\nAccounts receivable \n (6,574,111) \n 2,769,950  \n (15,597,836)\n\nInventories, net \n 2,493,022  \n 6,487,098  \n (6,016,083)\n\nDue from related parties \n 1,016,378  \n (536,841) \n (740,331)\n\nOther receivables and current\nassets \n (11,914,902) \n 5,121,986  \n (9,480,769)\n\nAccounts payable and accrued\nexpenses \n (682,395) \n (45,253,722) \n 25,671,804 \n\nOther payables \n (811,143) \n (419,027) \n 68,039 \n\nTaxes payable \n (1,756,153) \n 651,026  \n (355,168)\n\nOperating\nlease liabilities \n (11,058) \n (6,761) \n (21,057)\n\nNet\ncash (used in) provided by operating activities \n (20,251,404) \n (24,290,411) \n 654,219 \n\n  \n    \n    \n   \n\nCash flows from investing\nactivities: \n    \n    \n   \n\nPurchase of fixed assets \n (2,095,807) \n (3,751,944) \n (3,149,397)\n\nAcquisition of investment \n -  \n (83,089) \n (4,388)\n\nIncrease investment in\nsubsidiary \n -  \n 74,120  \n - \n\nProceeds\nfrom disposal of fixed assets \n -  \n -  \n 6,127 \n\nAdvance to related parties \n \n(6,245,369\n) \n \n(12,245,223\n) \n - \n\nNet cash used in investing\nactivities \n (8,341,176) \n (16,006,136) \n (3,147,658)\n\n  \n    \n    \n   \n\nCash flows from financing\nactivities: \n    \n    \n   \n\nGross proceeds from issuance\nof common shares pursuant to initial public offering \n 11,586,250  \n -  \n - \n\nProceeds from (Repayment\nto) borrowings \n 7,443,090  \n 50,910,672  \n (2,768,651)\n\nRepayment to finance lease\npayables \n (5,561) \n (10,216) \n (41,328)\n\nProceeds from related parties \n - \n \n-\n \n 320,485 \n\nNet cash provided by (used\nin) financing activities \n 19,023,779  \n 50,900,456  \n (2,489,494)\n\n  \n    \n    \n   \n\nNet (decrease) increase in cash and cash equivalents \n (9,568,801) \n 10,603,909  \n (4,982,933)\n\nEffect of exchange rate changes on cash and\ncash equivalents \n 559,360  \n 635,595  \n (1,456,188)\n\nCash and cash equivalents,\nbeginning of period / year \n 16,069,851  \n 4,830,347  \n 11,269,468 \n\nCash and cash equivalents,\nend of period / year \n$7,060,410  \n$16,069,851  \n$4,830,347 \n\n  \n    \n    \n   \n\nSupplemental disclosures\nof cash flow information \n    \n    \n   \n\nIncome\ntaxes paid \n$877,184  \n$776,331  \n$1,220,804 \n\n  \n    \n    \n   \n\nSupplemental non-cash investing\nand financing activities \n    \n    \n   \n\nAcquisition\nof non-controlling interest by issuance of ordinary shares \n$-  \n$2,798,887  \n$- \n\nDeferred\noffering costs charged to additional paid-in capital \n 3,488,971  \n -  \n - \n\nRecognized\nassets through finance lease liabilities \n -  \n -  \n 100,771 \n\nRecognized\nROU assets through lease liabilities \n 31,350  \n 15,359  \n - \n\nReversal\nof additional paid-in capital via decrease in related party receivables \n$-  \n$5,311,880  \n$2,676,807 \n\n \n\nThe\naccompanying notes are an integral part of these unaudited consolidated financial statements.\n\n \n\nPlease\nrefer to Note 2 “Summary of Significant Accounting Policies” to these unaudited consolidated financial statements included\nin this transition report for further information on the nature of the revision.\n\n \n\nF-6\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n1 - Organization and Principal Business**\n\n \n\nTMD\nEnergy Limited (“**TMDEL**”) was incorporated on October 17, 2023 in the Cayman Islands. TMDEL is a holding company without\nany operations.\n\n \n\nTMDEL\nconsummated its initial public offering on the NYSE American on April 22, 2025, issuing 3,100,000 ordinary shares at a price of $3.25\nper share. In addition, the Company entered into an underwriting agreement with the underwriter on April 21, 2025, which granted the\nunderwriter 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\ncover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option in full, purchasing an\nadditional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering closed on April 22, 2025\nand the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11,586,250, before deducting underwriting\ndiscounts and offering expenses. The ordinary shares began trading on April 21, 2025 on NYSE American and commenced trading under the\nticker symbol “TMDE”.\n\n \n\nBusiness\nRe-organization\n\n \n\nThe\nre-organization of the legal entity structure was initialized with the acquisition of TMDEL by Straits Energy Resources Berhad (“**Straits**”)\nwhich was completed on November 21, 2023. Prior to this re-organization, Straits was the shareholder with direct or indirect control\nover all related entities involved in this re-organization.\n\n \n\n●On\nDecember 1, 2023, Straits increased its ownership in Straits Marine Fuels & Energy Sdn.\nBhd. (“**SMF**”) and its seven subsidiaries (“**SMF Group**”)\nfrom 67% to 100%, with the acquisition of the balance 33% previously held by Tumpuan Megah\nDevelopment Sdn. Bhd. (“**Tumpuan Megah**”). On December 14, 2023, TMDEL acquired\n100% ownership of SMF Group from Straits by issuing 3,968,556 ordinary shares of TMDEL to\nStraits on May 31, 2024.\n\n   \n\n●On\nJanuary 10, 2024, SMF, the wholly-owned subsidiary of TMDEL, acquired 100% ownership of TMD\nStraits Ltd (“**TMD Straits**”) and TMD Sturgeon Ltd (“**TMD\nSturgeon**”) from Straits by issuing 890,026 and 1,132,607 ordinary shares of TMDEL to Straits on May 31, 2024,\nrespectively.\n\n   \n\n●On\nJanuary 24, 2024, SMF acquired 51% ownership of Straits Marine Services Pte. Ltd. (“**SMS\n1**”) and its wholly-owned subsidiary, Straits Maritime Services Pte. Ltd. (“**SMS\n2**”), from Straits by issuing 1,237,055 ordinary shares of TMDEL to Straits on May\n31, 2024.\n\n   \n\n●On\nJanuary 24, 2024, SMF acquired 70% ownership of Tumpuan Megah and its six subsidiaries from\nStraits by issuing 8,108,179 ordinary shares of TMDEL to Straits on May 31, 2024.\n\n \n\nThe\nabove transaction was treated as a re-organization of the Companies under common control and the financial statements give retroactive\neffect to these transactions.\n\n \n\nOn\nMay 31, 2024, SMF acquired the remaining 49% ownership interest of SMS 1 and its wholly-owned subsidiary from the non-controlling interest\nshareholder by issuing 1,188,543 ordinary shares of TMDEL on May 31, 2024. The non-controlling interest is adjusted in the financial\nstatements prospectively.\n\n \n\nOn\nMay 31, 2024, SMF acquired the remaining 30% ownership interest of Tumpuan Megah and its six subsidiaries from non-controlling interest\nshareholders by issuing 3,474,934 ordinary shares of TMDEL on May 31, 2024. The non-controlling interest is adjusted in the financial\nstatements prospectively.\n\n \n\nOn\nJuly 1, 2024, the Company reorganized its legal entity structure, whereby SMF acquired 100% equity interest in all wholly-owned subsidiaries\nof Tumpuan Megah. All related entities have effectively become subsidiaries of SMF, with TMDEL effectively holding ownership and control\nof SMF and its subsidiaries.\n\n \n\nThe\nre-organization transaction is treated as a combination between entities under common control in accordance with ASC 805-50. These entities\nare considered under common control because they share the same ultimate parent entity, which holds a “controlling financial interest”,\nas defined by ASC 810, in both entities before and after the re-organization. The historical financial statements of each of the entities\nare the historical financial statements of the combined entity, with no adjustments made to the entities’ historical revenue, expenses,\nassets, or liabilities, the components of historical total equity are adjusted to reflect the capital structure of TMDEL in accordance\nto ASC 805-40-45-3 through 45-5.\n\n \n\nF-7\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n1 - Organization and Principal Business (Continued)**\n\n \n\nOn\nJanuary 3, 2024, Tumpuan Megah acquired a 30% equity interest in TMD Marine Fuels Sdn. Bhd. (“**TMDF**”) through the purchase\nof 300 ordinary shares for RM300. On February 23, 2024, Tumpuan Megah acquired an additional 149,700 ordinary shares in TMDF for RM149,700,\nmaintaining its equity interest at 30%. The total cash consideration for these transactions amounted to RM150,000.\n\n \n\nIn\ncontrast to the reorganization, TMDF is consolidated under ASC 810 due to TMDEL’s ability to exert control over its financial and\noperational policies, despite holding only a 30% equity interest.\n\n \n\nTMDEL\nand its subsidiaries operate as a comprehensive provider of marine fuel logistics, and offers related services, including vessel chartering\nservices and ship management services, within the maritime industry.\n\n \n\nTMDEL\nand its consolidated subsidiaries are collectively referred to herein as the “Company” unless specific reference is made\nto an entity.\n\n \n\nTMDEL\nand its subsidiaries as at June 30, 2025 is as follows:\n\n Schedule of Subsidiaries\n\nEntity\nName \nPercentage\nof Ownership \nPlace\nof Incorporation \nPrincipal\nactivities\n\nTMD Energy Limited (“**TMDEL**”) \nParent \nCayman Islands \nInvestment Holding\n\nStraits Marine\nFuels & Energy Sdn. Bhd. (“**SMF**”) \n100% \nMalaysia \nInvestment Holding\n\n**Straits Marine Services Pte. Ltd.**\n(“**SMS\n1**”) \n100% \nSingapore \nShip Management Services\n\nStraits Maritime Services\nPte. Ltd. (“**SMS 2**”) \n100% \nSingapore \nProvision of Shipping Services, General Cleaning\n& Disinfection\n\nTumpuan Megah Development\nSdn. Bhd. (“**Tumpuan Megah**”) \n100% \nLabuan, Malaysia \nProvision of Bunkering Services for Marine\nFuels and Petroleum-Based Products\n\nCavalla Asia Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nDolphin Asia Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nEscolar Asia Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nOscar Asia Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nPhoenix Asia Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nS3 Asia Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nTMD Straits Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nTMD Sturgeon Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nSMF Begonia Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nSMF Ixora Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nSMF Omura Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nSMF Eden Maritime Ltd \n100% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nSMF Beluga Ltd \n51% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nSierra Pioneer Marine Ltd \n51% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nKatsu Pioneer Marine Ltd \n51% \nLabuan, Malaysia \nProvision of Vessel Chartering Services\n\nTMD Marine Fuels Sdn. Bhd.\n(“**TMDF**”) \n30% \nMalaysia \nDealing in Oil and Petroleum Products, Oil\nTrading, Oil Bunkering and Related Services\n\n** **\n\nF-8\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n1 - Organization and Principal Business (Continued)**\n\n** **\n\nThe\neffective organizational flow chart of TMDEL and its subsidiaries as at June 30, 2025 is as follows:\n\n**Note\n2 - Summary of Significant Accounting Policies**\n\n \n\nBasis\nof Presentation and Consolidation\n\n \n\nThe\nunaudited consolidated financial statements and related notes include all the accounts of the Company and its subsidiaries, entities\nin which the Company directly and indirectly controls. The unaudited consolidated financial statements are prepared in accordance with\naccounting principles generally accepted in the United States of America (“**U.S. GAAP**”). All intercompany transactions\nand balances among the Company and its subsidiaries have been eliminated upon consolidation.\n\n \n\n*TMD\nMarine Fuels Sdn. Bhd.*\n\n \n\nTMDEL\nhas consolidated the financial statements of TMDF, in which it holds a 30% equity interest, in accordance with ASC 810, Consolidation.\nUnder ASC 810, entities may be consolidated when the reporting entity exercises control over the investee’s significant financial\nand operational policies, regardless of ownership percentage, if control exists.\n\n \n\nAlthough\nTMDEL, through its subsidiary Tumpuan Megah, directly owns only 30% of TMDF, TMDF is considered to be under control due to the governance\nstructure and ownership arrangements. Dato’ Mohd Suhaimi bin Hashim, who holds a 70% equity interest in TMDF, also serves as a\ncommon director of Tumpuan Megah. Additionally, Dato’ Sri Kam Choy Ho is the director of TMDF and also serves as a common director\nof Tumpuan Megah, TMDEL and Straits. As a result of the above, Tumpuan Megah has effective control over the governance, strategic decision\nmaking and operations of TMDF.\n\n \n\nBased\non this assessment of control, management has concluded that TMDEL has the ability to control TMDF’s financial and operational\npolicies, justifying consolidation under ASC 810.\n\n \n\nF-9\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nCorrection\nof Immaterial Error in the Consolidated Statements of Cash Flows\n\n \n\nFollowing\nthe issuance of the Company’s previously filed unaudited consolidated financial statement for the transition period ended June\n30, 2025, management identified an error in the classification of certain cash flows relating to advances to related parties in the previously\nissued consolidated statements of cash flows.\n\n \n\nIn\nthe previously issued unaudited consolidated financial statements , certain advances to related parties were classified within financing\nactivities. Upon further evaluation, management determined that such cash flows should have been classified within investing activities.\nThe correction relates solely to the classification of cash flows in the consolidated statements of cash flows and does not affect the\nCompany’s consolidated balance sheets, consolidated statements of operations and comprehensive loss and consolidated statements\nof changes in shareholders’ equity. There is no impact on total cash and cash equivalents for any period presented.\n\n \n\nManagement\nevaluated the error in accordance with the guidance in ASC 250, Accounting Changes and Error Corrections, and the materiality guidance\nset forth in Staff Accounting Bulletin No. 99 (SAB Topic 1.M, Materiality) and Staff Accounting Bulletin No. 108 (SAB Topic 1.N, Considering\nthe Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements).\n\n \n\nThe\nerror solely affects the classification between two non-operating sections of the consolidated statements of cash flows. The error has\nno impact on:\n\n \n\n(i)\ntotal cash and cash equivalents, or any subtotal of cash and cash equivalents, at any reporting date;\n\n(ii)\nthe net change in cash and cash equivalents for any period presented;\n\n(iii)\nnet cash flows from operating activities for any period presented;\n\n(iv)\nthe consolidated balance sheets, consolidated statements of operations and comprehensive (loss) income, or consolidated statements of\nchanges in shareholders’ equity for any period presented;\n\n(v)\ntotal assets, total liabilities, total shareholders’ equity, working capital, or net working capital;\n\n(vi)\nrevenue, gross profit, operating income, net (loss) income, or comprehensive (loss) income;\n\n(vii)\n(loss) earnings per share, on a basic or diluted basis;\n\n(viii)\nany non-GAAP financial measure used or disclosed by the Company;\n\n(ix)\nany financial covenant or other contractual obligation under the Company’s trade financing facilities, vendor installment loans, or bank\nterm loan disclosed in Note 10 (the Company has confirmed that none of these instruments contains a covenant or term that references\ncash flow classification or any subtotal that would be affected by the revision); or\n\n(x)\nthe Company’s compliance with NYSE American continued listing standards.\n\n \n\nManagement\nalso considered the qualitative factors set out in SAB Topic 1.M and concluded that the error:\n\n \n\n(a)\ndoes not arise from an item capable of precise measurement and does not reflect any imprecision in an estimate;\n\n(b)\ndoes not mask a change in earnings or other trends, since the directional trend of cash flows from investing and financing activities,\nand the underlying economic substance of the related party advances, is unchanged;\n\n(c)\ndoes not hide a failure to meet analyst consensus expectations, as the Company is not covered by sell-side research and the affected\ncaptions are not consensus measures;\n\n(d)\ndoes not change a loss into income or vice versa, and does not affect the presentation of a positive or negative cash flow trend;\n\n(e)\ndoes not concern a segment or other portion of the business that has been identified as playing a significant role in the Company’s operations\nor profitability;\n\n(f)\ndoes not affect the Company’s compliance with regulatory requirements, debt covenants or other contractual requirements;\n\n(g)\ndoes not increase management’s compensation, including amounts payable under any bonus or incentive arrangement;\n\n(h)\ndoes not involve concealment of an unlawful transaction; and\n\n(i)\nis not the result of an intentional misstatement, but rather a classification judgment that has been reconsidered in light of the interest-bearing\nnature of the advances and ASC 230-10-45-13.\n\n \n\nManagement\nhas further considered whether a reasonable investor would consider the error material in the total mix of information, having regard\nto the underlying economic substance of the related party advances (which are interest-bearing at 8.25% per annum, are due from the controlling\nshareholder, Straits, and are separately disclosed as to amount, counterparty, terms and balances in Note 8 — Related Party Transactions\n— of both the original filing and these unaudited consolidated financial statements), and concluded that no reasonable investor\nwould have viewed the corrected presentation as significantly altering the total mix of information made available.\n\n \n\nBased\non the foregoing evaluation, management has concluded that the error was not material to the previously issued unaudited consolidated\nfinancial statements, either individually or in the aggregate, and that the error correction does not constitute a restatement of previously\nissued unaudited consolidated financial statements. Accordingly, this effects an immaterial revision (a “little r” revision)\nof the affected periods.\n\n \n\nThe\nerror correction affects only the consolidated statements of cash flows for the six months ended June 30, 2025 and the year ended December\n31, 2024. The consolidated statement of cash flows for the year ended December 31, 2023 is not affected, because no advances of the type\ngiving rise to the revision were made during the year ended December 31, 2023. Accordingly, no revision is being made to the audited\nconsolidated statement of cash flows for the year ended December 31, 2023, and that statement is presented in these unaudited consolidated\nfinancial statements unchanged from what was presented in the original filing.\n\n \n\nThe\neffects of the revision on the consolidated statements of cash flows were as follows:\n\n Schedule\nof Revision Consolidated Statements of Cash Flows\n\nJune\n30, 2025\n\n \n\n  \nAs reported  \nAdjustment  \nAs revised \n\nCash flows from investing activities: \n    \n    \n   \n\nPurchase of fixed assets \n$(2,095,807) \n$-  \n$(2,095,807)\n\n Acquisition of investment  \n    \n    \n   \n\nIncrease investment in subsidiary \n    \n    \n   \n\nAdvance to related parties \n$-  \n$(6,245,369) \n$(6,245,369)\n\nNet cash used in investing activities \n$(2,095,807) \n$(6,245,369) \n$(8,341,176)\n\n  \n    \n    \n   \n\nCash flows from financing activities: \n    \n    \n   \n\nGross proceeds from issuance of common shares pursuant to initial public offering \n$11,586,250  \n$-  \n$11,586,250 \n\nProceeds from borrowings \n$7,443,090  \n$-  \n$7,443,090 \n\nRepayment to finance lease payables \n$(5,561) \n$-  \n$(5,561)\n\nAdvance to related parties \n$(6,245,369) \n$6,245,369  \n$- \n\nNet cash provided by financing activities \n$12,778,410  \n$6,245,369  \n$19,023,779 \n\n \n\nF-10\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nDecember\n31, 2024\n\n \n\n  \nAs reported  \nAdjustment  \nAs revised \n\nCash flows from investing activities: \n    \n    \n   \n\nPurchase of fixed assets \n$(3,751,944) \n$-  \n$(3,751,944)\n\nAcquisition of investment \n$(83,089) \n$-  \n$(83,089)\n\nIncrease investment in subsidiary \n$74,120  \n$-  \n$74,120 \n\nAdvance to related parties \n$-  \n$(12,245,223) \n$(12,245,223)\n\nNet cash used in investing activities \n$(3,760,913) \n$(12,245,223) \n$(16,006,136)\n\n  \n    \n    \n   \n\nCash flows from financing activities: \n    \n    \n   \n\nProceeds from borrowings \n$50,910,672  \n$-  \n$50,910,672 \n\nRepayment to finance lease payables \n$(10,216) \n$-  \n$(10,216)\n\nAdvance to related parties \n$(12,245,223) \n$12,245,223  \n$- \n\nNet cash provided by financing activities \n$38,655,233  \n$12,245,223  \n$50,900,456 \n\n \n\nUse\nof Estimates\n\n \n\nThe\npreparation of unaudited consolidated financial statements in conformity with U.S. GAAP requires the Company to make certain estimates\nand assumptions that affect the amounts reported and disclosed in the unaudited consolidated financial statements and related notes.\n\n \n\nThe\nmost significant estimates and judgments include the allowance for doubtful accounts, useful life of property, plant and equipment, residual\nvalues for leased assets, income taxes and uncertain tax positions. Actual amounts could differ from those estimates.\n\n \n\nFunctional\nCurrency and Foreign Currency Translation\n\n \n\nThe\naccompanying unaudited consolidated financial statements are presented in United States dollar (“**$**”), which is the\nreporting currency of the Company. For the subsidiaries whose functional currencies are Ringgit Malaysia (“**RM**”) and\nSingapore Dollar (“**SGD**”), results of operations and cash flows are translated at average exchange rates during the\nperiod, assets and liabilities are translated at the exchange rate at the end of the period, and equity is translated at historical exchange\nrates. The resulting translation adjustments are included in determining other comprehensive income or loss. Transaction gains and losses\nare reflected in the unaudited consolidated statements of operations and comprehensive (loss) income.\n\n \n\nFair\nValue of Financial Instruments\n\n \n\nThe\nCompany follows the provisions of ASC Topic 820, Fair Value Measurements and Disclosures. It clarifies the definition of fair value,\nprescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value\nas follows:\n\n \n\n●Level\n1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities\navailable at the measurement date.\n\n●Level\n2 – Inputs are unadjusted quoted prices for similar assets and liabilities in active\nmarkets, quoted prices for identical or similar assets and liabilities in markets that are\nnot active, inputs other than quoted prices that are observable, and inputs derived from\nor corroborated by observable market data.\n\n●Level\n3 – Inputs are unobservable inputs which reflect the reporting entity’s own assumptions\non what assumptions the market participants would use in pricing the asset or liability based\non the best available information.\n\n Schedule of Fair Value Measurements\n\n  \nCarrying\nAmount  \n**Estimated** \n\n  \nLevel\n1  \nLevel\n2  \nLevel\n3  \nFair Value \n\nJune 30, 2025 \n    \n    \n    \n   \n\nInvestment in equity securities \n$  -  \n$  -  \n$89,712  \n$89,712 \n\n  \n    \n    \n    \n   \n\nDecember 31, 2024 \n    \n    \n    \n   \n\nInvestment in equity securities \n$-  \n$-  \n$88,908  \n$88,908 \n\n \n\nFor\nother accounts, the carrying amounts reported in the accompanying unaudited consolidated balance sheets for cash and cash equivalents,\naccounts receivable, other receivables and current assets, short-term loans, accounts payable, and other payables, due to related parties\nand income tax payable approximate their fair value based on the short-term maturity of these instruments.\n\n \n\nCash\nand cash equivalents\n\n \n\nCash\nand cash equivalents are financial assets that are either cash or highly liquid investments if any with an original maturity term of\n90 days or less.\n\n \n\nF-11\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nAccounts\nReceivable and Credit Losses on Financial Instruments\n\n \n\nAccounts\nreceivable consists principally of amounts due from trade customers. Credit is extended based on an evaluation of the customer’s\nfinancial condition and collateral is not generally required.\n\n \n\nThe\nCompany recognizes credit losses on financial instruments in accordance with ASC Topic 326, Financial Instruments – Credit Losses.\nThe Company uses the Current Expected Credit Losses (“**CECL**”) model to estimate credit losses on financial assets measured\nat amortized cost, as well as certain off-balance sheet credit exposures.\n\n \n\nUnder\nthe CECL model, the estimation of credit losses involves significant judgment and estimation uncertainty. Management exercises its judgment\nbased on historical loss experience, current economic conditions, and reasonable and supportable forecasts. Changes in these factors\ncould have a material impact on the estimated credit losses.\n\n \n\nThe\nCompany has evaluated its account receivables and recognized a credit loss of $807 for the six months ended June 30, 2025, and $69,474\nand $nil for the years ended December 31, 2024 and 2023 respectively.\n\n \n\nInventories\n\n \n\nInventories,\nprimarily consisting of marine gas oil and low sulfur fuel oil. Inventories are stated at the lower of cost or net realizable value,\nwith net realized value represented by estimated selling prices in the ordinary course of business, less reasonably predictable costs\nof disposal and transportation.\n\n \n\nCost\nof inventory is determined using the weighted average method. Adjustments are recorded to write down the cost of inventory to the estimated\nnet realizable value due to slow-moving merchandise, reduction in prices, and damaged products, which is dependent upon factors such\nas historical and forecasted consumer demand.\n\n \n\nDeferred\nOffering Costs\n\n \n\nDeferred\noffering costs represent legal, accounting, and other direct costs related to the Company’s initial public offering (“**IPO**”).\nThese costs are capitalized as incurred and are included in the accompanying balance sheet as “Other receivables and current assets”.\nAs of December 31, 2024, the Company recorded $1,839,846 of deferred offering costs.\n\n \n\nOn\nApril 22, 2025, upon the completion of IPO of the Company, IPO costs capitalized as of December 31, 2024, together with other IPO costs\nincurred during the six months ended June 30, 2025, totaling $3,488,971, were charged to shareholder’s equity under additional\npaid-in capital.\n\n \n\nRelated\nParty Transactions\n\n \n\nA\nrelated party is generally defined as (i) any person and or their immediate family hold 10% or more of the Company’s securities\n(ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control\nwith the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction\nis considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company\nconducts business with its related parties in the ordinary course of business. Related parties may be individuals or corporate entities.\n\n \n\nTransactions\ninvolving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,\nfree market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related\nparty transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations\ncan be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related\nparty nature.\n\n \n\nF-12\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nProperty,\nPlant and Equipment\n\n \n\nProperty,\nplant and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs\nincurred to bring the asset into its existing use. Identifiable significant improvements are capitalized and expenditures for maintenance,\nrepairs, and betterments, including replacement of minor items, are charged to expense.\n\n \n\nDepreciation\nis computed based on cost, less the estimated residual value, if any, using the straight-line method over the estimated useful life.\n\n \n\nThe\nresidual value rate and useful life of property, plant and equipment are summarized as follows:\n\n Schedule of Residual Value Rate and Useful Life of Property, Plant and Equipment\n\nProperty,\nPlant and Equipment \nUseful\nLife\n\nDry-docking expenditures \n2.5 years from the date of dry dock\n\nFurniture and fittings \n5 – 10 years\n\nLeased property \nOver the life of the lease\n\nLeasehold improvements \n5 –10 years\n\nMotor vehicles \n5 years\n\nReal properties \n40 years\n\nShipping tools, equipment and computers \n2 – 10 years\n\nVessels \n9 – 25 years\n\n \n\n*Residual\nvalues for vessels*\n\n \n\nThe\nCompany determines the residual value of finance lease vessels based on the lightweight of the vessels valued at the metal scrap prices\nquoted by vessel demolition markets. The Company reassess the estimated residual value of the vessel once in every 5 years.\n\n \n\n*Dry-docking\nexpenditures*\n\n \n\nDry-docking\nexpenditures such as inspection, manual, and certificate, engine maintenance, spare part, painting, vessel maintenance etc. are capitalized\nin accordance ASC 360-10-35 when such costs are considered to enhance the future economic benefits of the vessel. The expenditures are\ncapitalized when they significantly extend the useful life of the vessel, improve the efficiency or performance of the vessel, or increase\nthe capacity of the vessel.\n\n \n\nCapitalized\ndry-docking expenditures are included in the carrying amount of the vessel and are depreciated over the period until the next scheduled\ndry-docking. If the criteria for capitalization are not met, the expenditures are expensed as incurred.\n\n \n\nGoodwill\n\n \n\nGoodwill\nrepresents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. The\nCompany assesses goodwill for impairment in accordance with ASC subtopic 350-20, Intangibles—Goodwill and Other: Goodwill (“**ASC\n350-20**”), which requires that goodwill be tested for impairment at the reporting unit level at least annually and more frequently\nupon the occurrence of certain events, as defined by ASC 350-20.\n\n \n\nA\nreporting unit is defined as an operating segment or one level below an operating segment referred to as a component. The Company determines\nits reporting units by first identifying its operating segments, and then assesses whether any components of these segments constituted\na business for which discrete financial information is available and where the Company’s segment manager regularly reviews the\noperating results of that component. The Company determined that it has one reporting unit because components below the consolidated\nlevel either did not have discrete financial information or their operating results were not regularly reviewed by the segment manager.\n\n \n\nThe\nCompany has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment\ntest in accordance with ASC 350-20. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not\nthat the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test described above is required.\nOtherwise, no further testing is required. In the qualitative assessment, the Company considers primary factors such as industry and\nmarket considerations, overall financial performance of the reporting unit, and other specific information related to the operations.\nThe quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares\nthe fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit is greater\nthan zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. For the six months\nended June 30, 2025 and the years ended December 31, 2024 and 2023, impairment of goodwill of $nil, $1,129 and $nil was identified, respectively.\n\n \n\nF-13\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nThe\nattributable amount of goodwill is included in the determination of the amount of gain or loss recognized upon disposal of a portion\nof reporting unit that constitutes a business. When the Company disposes of a business within the reporting unit, the amount of goodwill\ndisposed is measured on the basis of the relative fair value of the business disposed and the portion of the reporting unit retained.\nThis relative fair value approach is not used when the business to be disposed was not integrated into the reporting unit after its acquisition,\nin which case the current carrying amount of the acquired goodwill should be included in the carrying amount of the business to be disposed.\n\n Schedule of Goodwill\n\n  \n\n**June\n30,**\n\n**2025**\n  \n\n**December\n31,**\n\n**2024**\n  \n\n**December\n31,**\n\n**2023**\n \n\n  \n\nFor the Six Months\nEnded\n  \nFor\nthe Years Ended \n\n  \n\n**June\n30, 2025**\n  \n\n**December\n31,**\n\n**2024**\n  \n\n**December\n31,**\n\n**2023**\n \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nAcquisition of TMDF \n$-  \n$1,129  \n$     - \n\nImpairment of goodwill\nin relation to TMDF \n       -  \n (1,129) \n - \n\nBalance as of June 30,\n2025 \n -  \n -  \n - \n\n \n\nImpairment\nof Long-Lived Assets\n\n \n\nThe\nCompany accounts for impairment of long-lived assets in accordance with ASC 360, Property, Plant and Equipment. Long-lived assets consist\nprimarily of property, plant and equipment. In accordance with ASC 360, the Company evaluates the carrying value of long-lived assets\nwhen it determines a triggering event has occurred, or whenever events or changes in circumstances indicate that the carrying amount\nof an asset may not be recoverable. When indicators exist, recoverability of assets is measured by a comparison of the carrying value\nof the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. Examples of such\ntriggering events include a significant disposal of a portion of such assets and adverse changes in the market involving the business\nemploying the related assets. If such assets are determined not to be recoverable, the Company performs an analysis of the fair value\nof the asset group and will recognize an impairment loss when the fair value is less than the carrying amounts of such assets. The fair\nvalue, based on reasonable and supportable assumptions and projections, requires subjective judgments. Depending on the assumptions and\nestimates used, the appraised fair value projected in the evaluation of long-lived assets can vary within a range of outcomes. The Company\nconsiders the likelihood of possible outcomes in determining the best estimate for the fair value of the assets.\n\n \n\nThe\nCompany engaged an independent third-party valuer to assess the cost of the vessels, ensuring that the carrying amount of the vessels\ndoes not exceed their recoverable amount.\n\n \n\nF-14\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nInvestments\n\n \n\n*Cost\nMethod Investments*\n\n \n\nThe\nCompany accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise\nsignificant influence under the cost method; using ASU 2016-01, *Financial Instruments – Overall: Recognition and Measurement\nof Financial Assets and Financial Liabilities*. The Company measure investments in equity securities without a readily determinable\nfair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus\nchanges resulting from observable price changes on a non-recurring basis. Gains and losses on these securities are recognized in other\nincome and expenses.\n\n \n\n*Equity\nMethod Investments*\n\n \n\nThe\nCompany accounts for its investment that represents 20% to 50% ownership, and for which the Company have the ability to exercise significant\ninfluence through board representation under the equity method.\n\n \n\nUnder\nthe equity method, investments are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the\ninvestee’s profits or losses in the income statement, and its share of movements in other comprehensive (loss) income. Dividends\nreceived or receivable from investees are recognized as a reduction in the carrying amount of the investment.\n\n \n\nWhen\nthe Company’s share of losses in an investee equals or exceeds its interest in the investee, including any other unsecured receivables,\nthe Company does not recognize further losses, unless it has incurred obligations or made payments on behalf of the investee.\n\n \n\nThe\ncarrying amounts of equity-accounted investments are tested for impairment.\n\n \n\nLease\nCommitments\n\n \n\nThe\nCompany adopted ASC Topic 842, Leases which generally requires lessees to recognize operating and financing lease liabilities and corresponding\nright-of-use (“**ROU**”) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing\nand uncertainty of cash flows arising from leasing arrangements.\n\n \n\nThe\nCompany determined if an arrangement is a lease at inception.\n\n \n\nOperating\nleases are included in operating lease ROU assets and short and long-term lease liabilities in the unaudited consolidated balance sheets.\nLease cost for operating leases is recognized on a straight-line basis which includes the amortization of the ROU asset and interest\nexpense related to the operating lease liability and is recorded as rent expenses.\n\n \n\nFinance\nleases are included in property and equipment, other current liabilities, and other long-term liabilities in the unaudited consolidated\nbalance sheets. Lease cost for finance leases includes the amortization of the ROU asset, which is amortized on a straight-line basis\nand recorded as Depreciation and amortization expense; and interest expense on the finance lease liability, which is calculated using\nthe effective interest method and recorded as interest expense.\n\n \n\nRevenue\nRecognition\n\n \n\nThe\nCompany adopted ASC Topic 606, Revenue from Contracts with Customers (“**ASC 606**”) for all years presented. The core\nprinciple of this new revenue standard is that a company should recognize revenue when control of the promised goods or services is transferred\nto the customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods\nor services. The following five steps are applied to achieve that core principle by the Company in its determination of revenue recognition:\n(1) identification of the contract, or contracts, with a customer; (2) identification of the performance obligations in the contract;\n(3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and\n(5) recognition of revenue when, or as, the Company satisfy a performance obligation.\n\n \n\nThe\nCompany’s derived its revenues from a diverse range of maritime services provided to clients within the industry.\n\n \n\nF-15\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\n*Sales\nof cargo oil and fresh water, and bunkering facilitation*\n\n \n\nRevenue\ngenerated from sales of cargo oil and fresh water, and bunkering facilitation involves the procurement and delivery of marine gas oil,\nlow sulfur fuel oil, and fresh water for delivery to customers’ ships. The Company recognize revenues at a point in time when cargo\noil and fresh water has been delivered and accepted by the customer, indicating fulfillment of the performance obligation.\n\n \n\nSales\nof cargo oil and fresh water, and bunkering facilitation are not capable of being a distinct and separately identifiable. The performance\nobligation is only considered satisfied when sales of cargo oil and fresh water and bunkering facilitation are completed simultaneously.\n\n \n\n*Vessel\nChartering Services*\n\n \n\nRevenue\ngenerated from vessel chartering services involves arranging charters for marine transportation for various purposes such as cargo transportation\nor offshore operations. The Company recognizes revenues over time based on the time elapsed between the delivery of a vessel to a charterer\nand the return of a vessel from the charterer and invoicing is done on a monthly basis.\n\n \n\n*Ship\nManagement Services*\n\n \n\nRevenue\nfrom ship management services involves providing technical management, crew management, marine consultancy, and shipping services. The\nCompany recognize revenues at a point in time when services are rendered and accepted by customer indicating fulfillment of the performance\nobligation.\n\n \n\nThe\nCompany is considered a principal for all the revenues it generates above as it is directly involved in the procurement, delivery, and\nprovision of the goods and services to customers. As the principal, the Company assumes the risks and rewards associated with the transactions,\nincluding responsibility for fulfilling the performance obligations and bearing any associated costs and risks, bears the risk of loss\nor damage to inventory, bears the credit risk associated with customers’ ability to pay for the goods or services. Therefore, the\nCompany recognizes revenue at the gross amount.\n\n \n\nF-16\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nCosts\nof Revenues\n\n \n\nCost\nof revenues primarily consist of cost of goods sold, cargo insurance, and cost incurred in the course of sales and distribution of cargo\noil.\n\n \n\nShare\nof Losses of Associate\n\n \n\nShare\nof losses of associates comprises our share in the net loss of associate, Horizon Shipyard Inter Globe (M) Sdn. Bhd., accounted for under\nthe equity method.\n\n \n\nSegment\nand Geographic Information\n\n \n\nIn\nNovember 2023, the Financial Accounting Standards Board (“**FASB**”) issued Accounting Standards Update, or ASU 2023-07 –\nImprovements to Reportable Segment Disclosures, which enhances the disclosures required for reportable segments in annual and interim\nconsolidated financial statements, including additional, more detailed information about a reportable segment’s expenses. The standard\nis effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15,\n2024. The Company adopted ASU 2023-07 for the year ended December 31, 2024, retrospectively to all periods presented in the unaudited\nconsolidated financial statement.\n\n \n\nBased\non the criteria established by ASC 280, Segment Reporting, the Company uses the management approach in determining its operating segments.\nThe Company’s chief operating decision maker (“**CODM**”), identified as the chief executive officer of the Company,\nreviews consolidated results when making decisions, allocating resources and assessing performance of the Company, based on ASC 280,\nSegment Reporting.\n\n \n\nThe\nCODM assesses performance for the segment primarily by reviewing the segment net income (loss), which is also reported as consolidated\nnet (loss) income on the unaudited consolidated statements of operations and comprehensive (loss) income. This assessment considers the\nCompany’s strategic priorities, cash balance, and expected use of cash. Although the CODM also reviews revenue disaggregated by\ntype of services provided, this information is not accompanied by any allocation of direct or indirect costs, and therefore does not\nconstitute a separate measure of segment profit or loss. The CODM does not evaluate expenses, assets, or profitability at a disaggregated\nlevel. Instead, the CODM reviews and utilizes functional expenses (i.e., selling and marketing, general and administrative, and depreciation\nexpenses) at the consolidated level to manage the Company’s operations. Other segment items included interest expense, total other\n(expense) income, net, and provision for income taxes, which are reflected in the segment and consolidated net (loss) income. The measure\nof segment assets is reported on the unaudited consolidated balance sheet as total consolidated assets, without reviewing segment assets\nat a different assets level or category.\n\n \n\nThe\nadoption of this ASU had no material impact on reportable segments identified and had no effect on the Company’s unaudited consolidated\nfinancial position, results of operations, or cash flows. Consequently, the Company has determined that it operates in one operating\nsegment and serves both Malaysian and international customers.\n\n Schedule of Revenue By Reportable Segments\n\n  \n   \n   \n  \n\n  \nFor\nthe Six Months Ended  \nFor\nthe Years Ended \n\n  \n\n**June\n30,**\n\n**2025**\n  \n\nDecember 31,\n\n2024\n  \n\nDecember 31,\n\n2023\n \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nRevenue \n$276,340,120  \n$688,607,542  \n$633,079,773 \n\nCost of revenues \n (272,356,649) \n (672,562,832) \n (620,989,960)\n\nSelling and marketing expenses \n (38,067) \n (39,664) \n (101,302)\n\nGeneral and administrative expenses \n (3,330,264) \n (5,249,099) \n (5,127,137)\n\nDepreciation expenses \n (2,558,809) \n (4,758,014) \n (4,257,189)\n\nOther (expenses) income \n (2,577,706) \n (3,952,786) \n 354,527 \n\nNet (loss) income of\nsingle operating segment \n$(4,521,375) \n$2,045,147  \n$2,958,712 \n\n \n\nEarnings\n(Loss) per Common Share\n\n \n\nBasic\nearnings (loss) per ordinary share is computed by dividing net (loss) income attributable to ordinary shareholders by the weighted-average\nnumber of ordinary shares outstanding during the period. Diluted earnings (loss) per share is computed by dividing net (loss) income\nattributable to ordinary shareholders by the sum of the weighted-average number of ordinary shares outstanding and dilutive potential\nordinary shares during the period.\n\n \n\nF-17\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n2 - Summary of Significant Accounting Policies (Continued)**\n\n \n\nIncome\nTaxes\n\n \n\nThe\nCompany accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred\ntax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred\ntaxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial\nreporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more\nlikely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is\nuncertain.\n\n \n\nUnder\nASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained\nin a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first\nstep is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution\nof any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that\nmeets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position\nis measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions\nthat previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in\nwhich the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized\nin the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to\nunderpayment of income tax are classified as income tax expense in the year incurred.\n\n \n\nThe\nCompany applied the provisions of ASC 740-10-50, “Accounting for Uncertainty in Income Taxes”, which provides clarification\nrelated to the process associated with accounting for uncertain tax positions recognized in the Company’s financial statements.\nAudit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute\nof limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment\ncould be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results\nof operations for the given period.\n\n \n\nRecently\nIssued Accounting Pronouncements\n\n \n\nThe\nCompany considers the applicability and impact of all accounting standards updates (“**ASUs**”). Management periodically\nreviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “**JOBS\nAct**”), the Company meets the definition of an emerging growth company, or EGC, and has elected the extended transition period\nfor complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply\nto private companies.\n\n \n\n*Recent\naccounting pronouncements not yet adopted*\n\n \n\nIn\nDecember 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“**ASU 2023-09**”).\nThe intent of ASU 2023-09 is to improve the disclosures around a company’s rate reconciliation information and certain types of\nincome taxes companies are required to pay. Specifically, these new disclosure requirements will provide more transparency regarding\nincome taxes companies pay in the United States and other countries, along with more disclosure around a company’s rate reconciliation,\namong other new disclosure requirements, such that users of financial statements can get better information about how the operations,\nrelated tax risks, tax planning and operational opportunities of companies affect their effective tax rates and future cash flow prospects.\nASU 2023-09 is effective for annual fiscal years beginning after December 15, 2024, with early adoption permitted for annual financial\nstatements that have not yet been issued or made available for issuance. The amendments under ASU 2023-09 should be applied on a prospective\nbasis, although retrospective application is permitted. The Company is currently evaluating the potential impact of ASU 2023-09 on its\nunaudited consolidated financial statements and disclosures.\n\n \n\nIn\nNovember 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures\n(Subtopic 220-40): Disaggregation of Income Statement Expenses (“**ASU 2024-03**”), and in January 2025, the FASB issued\nASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying\nthe Effective Date (“**ASU 2025-01**”). ASU 2024-03 requires additional disclosure of the nature of expenses included\nin the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income\nstatement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and\ninterim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application\nare permitted. The Company is currently evaluating the impact that the adoption of these standards will have on its unaudited consolidated\nfinancial statements.\n\n \n\nIn\nJanuary 2025, the FASB issued ASU 2025-01 Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures\n(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\nentities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.\nFollowing the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual\nreporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance\nwas written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements\nin ASU 2024-03 in an interim reporting period, rather than in an annual reporting period. The FASB’s intent in the basis for conclusions\nof ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting\nperiod beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15,\n2027. The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.\n\n \n\nThe\nCompany believe that other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American\nInstitute of Certified Public Accountants, and the Securities and Exchange Commission do not have a material impact on our present or\nnear future financial statements.\n\n \n\nF-18\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n3 – Accounts receivable, net**\n\n \n\nAccounts\nreceivable, net consist of the following:\n\n Schedule\nof accounts\nreceivable, net\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31,\n2024 \n\n  \n(Unaudited)  \n(Audited) \n\nAccounts receivable \n$29,942,050  \n$21,808,030 \n\nAllowance for doubtful\naccounts \n (1,570,348) \n (1,486,333)\n\nTotal, net \n$28,371,702  \n$20,321,697 \n\n \n\nAs\nof the end of each of the financial year, the aging analysis of accounts receivable, net of allowance for expected credit loss, based\non the invoice date is as follows:\n\n Schedule\nof aging analysis of accounts receivable\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31,\n2024 \n\n  \n(Unaudited)  \n(Audited) \n\nWithin 90 days \n$11,898,706  \n$7,998,811 \n\nBetween 91 and 180 days \n 1,636,109  \n 11,774,674 \n\nBetween 181 and 365 days \n 5,095,824  \n 529,797 \n\nMore than 365 days \n 9,741,063  \n 18,415 \n\nTotal, net \n$28,371,702  \n$20,321,697 \n\n \n\nThe\nmovement of allowances for expected credit loss is as follow:\n\n Schedule\nof movement of allowances for expected credit loss\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31,\n2024 \n\n  \n(Unaudited)  \n(Audited) \n\nBalance at January 1, 2025 and 2024 \n$1,486,333  \n$1,371,341 \n\nAddition \n 807  \n 69,474 \n\nForeign exchange difference \n 83,208  \n 45,518 \n\nBalance at June 30, 2025 and December\n31, 2024 \n$1,570,348  \n$1,486,333 \n\n** **\n\nThe\nCompany’s normal trade credit term is 30 days (2024: 30 days). Other credit terms are assessed and approved by the management on\na case-by-case basis.\n\n \n\nSubsequent\nto June 30, 2025, the Company received a total of $11,137,302\nin payments on accounts receivable. The Company entered into\ninstallment agreements with major customers, which stipulated periodic payments over a specified duration, requiring the customers to\nfulfil all payment obligations. Under the terms of these installment agreements, $14,986,210\nwas scheduled with monthly repayments and will be fully settled\nby May 2026. For the six months ended June 30, 2025 and the years ended December 31, 2024 and 2023, allowances for expected credit loss\nwere $807,\n$69,474 and\n$nil respectively.\n\n \n\n**Note\n4 – Inventories, net**\n\n \n\nInventories\nconsist of the following:\n\n Schedule\nof inventories\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31,\n2024 \n\n  \n(Unaudited)  \n(Audited) \n\nBunkering\nmarine oil \n$7,627,129  \n$9,667,559 \n\n \n\nThere\nwas no inventory write-downs for the six months ended June 30, 2025, and the years ended December 31, 2024 and 2023.\n\n \n\nF-19\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n5 – Other receivables and current assets**\n\n \n\nOther\nreceivables and currents assets consist of the following:\n\n Schedule\nof other\nreceivables and currents assets\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nDeferred offering costs \n$-  \n$1,839,846 \n\nDeposits \n 8,220,641  \n 5,434,606 \n\nPrepayments and other deposits \n 6,730,423  \n 626,540 \n\nOther receivables \n 16,007,620  \n 12,305,853 \n\nTotal \n$30,958,684  \n$20,206,845 \n\n \n\nDeposits\nconsist of cargo deposit paid to third party supplier for upgrading of payment term and credit limit, deposit paid to third party contingent\nsuppliers for supply of fuel oil. The deposits paid to suppliers are pledged for the purpose of obtaining purchases credit limit and\nis only refundable to the Company in the event the credit limit is terminated or to offset against any outstanding amount due to the\nsuppliers.\n\n \n\nPrepayments\nand other deposits consist of advance payments related to marketing and business development activities. In addition, a payment of $2,500,000\nwas 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\nvessel.\n\n \n\nOther\nreceivables consist of advance payment to suppliers for purchase of cargo oil.\n\n \n\n**Note\n6 – Property and equipment, net**\n\n \n\nProperty\nand equipment, net consist of the following:\n\n Schedule\nof property\nand equipment, net\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nAt Cost: \n    \n   \n\nDry-docking expenditures \n$15,998,313  \n$14,342,245 \n\nFurniture and fixtures \n 68,964  \n 58,174 \n\nMotor vehicles \n 284,462  \n 252,916 \n\nReal property \n 836,276  \n 784,966 \n\nRenovation and improvements \n 195,967  \n 185,072 \n\nTools and equipment \n 1,922,063  \n 1,498,228 \n\nVessels \n 34,399,918  \n 34,399,919 \n\nTotal, at cost \n 53,705,963  \n 51,521,520 \n\nLess: Accumulated depreciation \n (21,972,674) \n (19,388,059)\n\nTotal, net \n$31,733,289  \n$32,133,461 \n\n \n\nDepreciation\nexpenses, including the depreciation expense of assets under finance leases were $2,558,809 for the six months ended June 30, 2025, and\n$4,758,014 and $4,257,189 for the years ended December 31, 2024 and 2023, respectively.\n\n \n\n**Note\n7 – Investment and its valuations**\n\n \n\nInvestments\nin Horizon Shipyard Inter Globe (M) Sdn. Bhd. (“**Horizon**”) consist of the following:\n\n Schedule\nof investments\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nBalance at January 1, 2025 and 2024 \n$88,908  \n$4,343 \n\nBeginning balance  \n$88,908  \n$4,343 \n\nInvestments during the period / year \n -  \n 85,293 \n\nShare of losses of associate \n (4,029) \n (710)\n\nForeign exchange difference \n 4,833  \n (18)\n\nBalance at June 30, 2025 and December\n31, 2024 \n$89,712  \n$88,908 \n\nEnding Balance \n$89,712  \n$88,908 \n\n \n\nF-20\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n7 – Investment and its valuations (Continued)**\n\n** **\n\n*Investment\nin Horizon*\n\n \n\nOn\nJune 22, 2023, Tumpuan Megah subscribed 20%\nequity 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\nvehicles in Malaysia. The investment is accounted for using the measurement alternative.\n\n \n\nThe\ninvestment above consist of investment in equity securities without readily determinable fair values are investments in privately held\ncompanies, the Company adopted the guidance of ASC 321, Investments - Equity Securities, which allows an entity to measure investments\nin equity securities without a readily determinable fair value using a measurement alternative that measures these securities at cost\nminus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar\ninvestment of same issuer (the “**Measurement Alternative**”). The fair value of equity securities without readily determinable\nfair values that have been remeasured due to impairment are classified within Level 3. Management assesses each of these investments\non an individual basis and is required to make a qualitative assessment for impairment at each reporting period.\n\n \n\nOn\nApril 9, 2024, Tumpuan Megah subscribed additional 380,000 ordinary shares in Horizon in proportion with its existing shareholding in Horizon\nfor cash consideration of RM380,000. Tumpuan Megah’s equity interest remained unchanged at 20% after subscription of additional\nshares.\n\n \n\nAfter\nSMF acquired the remaining 30% ownership interest of Tumpuan Megah on May 31, 2024, the Company accounts for its investment that represents\n20% ownership, and for which the Company have the ability to exercise significant influence through board representation under the equity\nmethod. Under the equity method, investments are initially recognized at cost and adjusted thereafter to recognize the Company’s\nshare of the investee’s profits or losses in the income statement, and its share of movements in other comprehensive (loss) income.\nThe carrying amounts of equity-accounted investments are tested for impairment. For the six months ended June 30, 2025 and the year ended\nDecember 31, 2024, share of losses of associate were $4,029 and $710, respectively.\n\n \n\nThe\nCompany did not recognize an impairment loss for the six months ended June 30, 2025 and the years ended December 31, 2024, and 2023,\nrespectively.\n\n \n\nF-21\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n8 - Related party transactions**\n\n \n\nThe\nnature and purpose of transaction amounts and outstanding balances for related parties consist of the following:\n\n Schedule of nature and purpose of transaction amounts and outstanding balances for related parties\n\n  \n  \n  \nAs\nof  \nFor\nthe Six Months Ended  \nFor\nthe Years Ended  \n  \n\n  \n  \n  \n\nJune\n\n30,\n2025\n  \nDecember\n31, 2024  \n\nJune\n\n30,\n2025\n  \nDecember\n31, 2024  \nDecember\n31, 2023  \nSubsequent\nto June 30, \n\n  \n  \n  \n(Unaudited)  \n(Audited)  \n(Unaudited)  \n(Audited)  \n(Audited)  \n2025 \n\n  \n  \n  \nBalances  \nAmounts  \nAmounts \n\nName \nRelationship \nNature/Purpose \nReceivables\n(Liabilities)  \nSales\n(Purchases)  \nSettled \n\nBenua Hijau Sdn. Bhd. \nEntity owned by Controlling\nShareholder \nCorporate Social Responsibility expenses \n$(156,136) \n$(98,504) \n$-  \n$(98,658) \n$-  \n$18,085 \n\nBlack Hummer Security Sdn. Bhd. \nAn entity controlled by Tan Sri Mohd Bakri\nBin Mohd Zinin, one of the directors of Tumpuan Megah \nSecurity services \n -  \n -  \n -  \n -  \n (1,448) \n - \n\nDato’ Mohd Suhaimi bin Hashim \nDirector of Tumpuan Megah and shareholder\nof TMDF \nAdvances \n (237) \n (224) \n -  \n -  \n -  \n - \n\nPan Management Services Ltd \nEntity owned by Controlling Shareholder \nManagement service \n (72,942) \n (131,081) \n -  \n -  \n (234,137) \n 2,600 \n\nRaja Ismail Bin Raja Mohamed \nDirector of Tumpuan Megah \nReimbursable legal fees \n 1,927,246  \n 1,823,609  \n -  \n -  \n -  \n - \n\nSinar Maju Logistik Sdn. Bhd. \nEntity owned by Controlling Shareholder \nShipping agency services \n 137,715  \n 95,841  \n (47,325) \n (270,505) \n (525,067) \n 23,471 \n\nSinar Maju Marin Sdn. Bhd. \nSubsidiary of Sinar Maju Logistik Sdn. Bhd.,\nEntity owned by Controlling Shareholder \nShipping agency services \n (1,665) \n (1,710) \n (17,213) \n (69,404) \n (71,606) \n 1,665 \n\nStraits Alliance Transport Sdn. Bhd. \nEntity owned by Controlling Shareholder \nAdvances \n 1,116  \n 1,057  \n -  \n -  \n -  \n - \n\nStraits Energy Resources Berhad \nControlling Shareholder \nWorking capital advances \n 15,903,625  \n 8,636,466  \n -  \n -  \n -  \n 888,254 \n\nStraits Management Services Sdn. Bhd. \nEntity owned by Controlling Shareholder \nManagement service \n (793,078) \n (395,226) \n -  \n (499,091) \n (269,897) \n 42,307 \n\nVictoria STS (Labuan) Sdn. Bhd. \nEntity owned by Controlling Shareholder \n(i) Sales of marine gas oil \n 11,592  \n 27,762  \n -  \n -  \n 151,349  \n - \n\n  \n  \n(ii) Sales of ship management service \n 8,480  \n 935,522  \n 154,866  \n 177,534  \n 122,240  \n - \n\n  \n  \n(iii) Purchase of tugboat services \n -  \n -  \n (17,116) \n (9,402) \n (21,201) \n - \n\nVictoria 3 Limited \nSubsidiary of Victoria\nSTS (Labuan) Sdn. Bhd., Entity owned by Controlling Shareholder \nSales of ship management\nservice \n 3,155  \n 72,310  \n -  \n -  \n 16,788  \n - \n\nTotal, net \n  \n  \n$16,968,871  \n$10,965,822  \n$73,212  \n$(769,526) \n$(832,979) \n$976,382 \n\n \n\nF-22\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n8 - Related party transactions (Continued)**\n\n \n\n**Related\nparty transactions other than sales and purchases:**\n\n \n\n  \n  \n  \n\nFor\nthe Six Months\n\nEnded\n  \nFor\nthe Years Ended \n\n  \n  \n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\nName \nRelationship \nNature/Purpose \n(Unaudited)  \n(Audited)  \n(Audited) \n\nBenua Hijau Sdn. Bhd. \nEntity owned by Controlling Shareholder \nCorporate social responsibility\nexpenses \n$(79,458) \n$-  \n$- \n\nHo Hung Ming \nSon of Dato’ Sri Kam Choy Ho \nRemuneration \n (38,894) \n (72,487) \n (67,895)\n\nStraits Management Services Sdn. Bhd. \nEntity owned by Controlling Shareholder \nManagement service \n (373,129) \n -  \n - \n\nStraits Energy Resources\nBerhad \nControlling Shareholder \nInterest income \n 617,809  \n 375,365  \n 32,089 \n\n  \n  \n  \n$126,328  \n$302,878  \n$(35,806)\n\n \n\n Schedule\nof related party balances\n\n  \n   \n  \n\n  \nAs\nof \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nDue from related parties \n$17,992,929  \n$11,592,567 \n\nDue to related parties \n (1,024,058) \n (626,745)\n\nTotal, net \n$16,968,871  \n$10,965,822 \n\n \n\nThe\nmajority of the amounts due from and due to related parties are interest-free, unsecured, with no fixed terms of repayment, and are payable\non demand.\n\n \n\nCertain\namounts due from the related party, Straits, totaling $16,892,805 (2024: $11,911,593), are interest-bearing at\n8.25% (2024: 8.25%) per annum and have no fixed repayment terms.\n\n \n\nInterest\nincome 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\nended December 31, 2024 and 2023, respectively.\n\n \n\nThe\nCompany received bank guarantees from a bank to support certain trade payables. Straits provided a corporate guarantee to the bank for\nthese facilities. The guarantees ensure timely payment to suppliers in the event of default by the Company. The maximum potential liability\nunder the guarantees is $1,798,391 as at June 30, 2025.\n\n \n\n*Amounts\ndue from Raja Ismail Bin Raja Mohamed*\n\n \n\nThe\namounts due from Raja Ismail Bin Raja Mohamed (“**Raja Ismail**”) (not a principal shareholder) consist of reimbursable\nlegal fees incurred by Tumpuan Megah, a subsidiary of the Company (with Straits as a controlling shareholder of the Company). These fees\nare recoverable from Raja Ismail through a personal guarantee provided to Straits under a binding personal guarantee agreement (the “**Guarantee\nAgreement**”). While the guarantee is formally provided to Straits, it indemnifies Tumpuan Megah by ensuring reimbursement of\nlegal costs associated with arbitration, resulting in no net financial impact on Tumpuan Megah.\n\n \n\nThe\nGuarantee Agreement, which includes a continuing guarantee clause, binds Raja Ismail (the “**Guarantor**”) to cover all\nsums potentially payable by Tumpuan Megah in connection with the arbitration, and indemnifies Tumpuan Megah against any losses, damages,\nor expenses related to the case. Under ASC 310-10, receivables can be recognized at fair value if there is a contractual right to payment.\nThis Agreement creates such a right, allowing the Company to recognize a receivable. Despite the general presumption against recognizing\nan asset when the counterparty disputes liability, the presumption is overcome here because (1) Raja Ismail has agreed to reimburse the\nlegal fees, as outlined in the binding Guarantee Agreement, and (2) he has begun repaying these fees according to a set schedule, reinforcing\nthe recovery certainty.\n\n \n\nFor\naccounting treatment, the Company records the legal fees as an expense and with a corresponding liability upon receipt of the bill. Simultaneously,\na receivable from Raja Ismail is recorded to offset the expense under the terms of the Guarantee Agreement. This accounting approach\nensures that all costs incurred in relation to the arbitration are contractually recoverable from Raja Ismail.\n\n \n\nThe\nsales revenues and purchases for related parties consist of the following:\n\n Schedule of sales revenues and purchases for related parties\n\n  \n   \n   \n  \n\n  \n\nFor the Six Months\nEnded\n  \nFor\nthe Years Ended \n\n  \n\nJune 30,\n\n2025\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nRelated party sales revenues \n$154,866  \n$177,534  \n$290,377 \n\nRelated party purchases \n (81,654) \n (947,060) \n (1,123,356)\n\nTotal, net \n$73,212  \n$(769,526) \n$(832,979)\n\n \n\nF-23\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n9 – Other payables**\n\n** **\n\nOther\npayables consist of the following:\n\n Schedule of other payables\n\n  \n\nJune\n30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \nAs\nof \n\n  \n\nJune\n30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nDeferred interest income \n$11,354  \n$10,752 \n\nProfessional fee \n 330,465  \n 233,756 \n\nInsurance services \n 78,880  \n 290,809 \n\nSecretary services \n 110  \n 5,490 \n\nVessel related expenses \n 155,542  \n 312,836 \n\nOthers \n 826,093  \n 649,322 \n\nTotal other payables \n$1,402,444  \n$1,502,965 \n\n \n\n**Note\n10 – Loans borrowings**\n\n** **\n\nShort-term\nborrowings consist of the following:\n\n** **\nSchedule of short-term borrowings\n\n  \n\nJune\n30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \nAs\nof \n\n  \n\nJune\n30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nTrade Financing\nFacilities \n$91,806,603  \n$79,268,515 \n\n** **\n\n*Line\nof Credit*\n\n \n\nTrade\nfinancing 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\nterm were up to 90 days (2024: 90 days) from utilization date and is secured by the following:\n\n \n\n(i)Registered\nlegal charge by way of debenture over all the present and future assets, rights interests\nand undertakings of Tumpuan Megah, a subsidiary;\n\n(ii)Registered\nlegal charge by way of debenture over all the present and future assets, rights, interests\nand undertakings of SMF, a subsidiary;\n\n(iii)Corporate\nguarantee by the Straits, majority shareholder of the Company;\n\n(iv)Personal\nguarantee by Dato’ Sri Kam Choy Ho, director of the Company; and\n\n(v)Upfront\ncash and sinking fund placement by Tumpuan Megah and Straits.\n\n \n\nLong-term\nborrowings consist of the following:\n\n Schedule of long-term borrowings\n\n  \nJune\n30,\n2025  \nDecember\n31, 2024 \n\n  \nAs\nof \n\n  \nJune\n30,\n2025  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nVendor installment loans \n$380,000  \n$744,480 \n\nBank term loan \n 554,173  \n 536,592 \n\nTotal \n 934,173  \n 1,281,072 \n\nLess: current portion\nof loans payable \n (409,025) \n (776,753)\n\nLong-term debt payable \n$525,148  \n$504,319 \n\n \n\nLong-term\nborrowings maturities, excluding finance leases as follows:\n\n Schedule of long-term borrowings maturity\n\nFor the year ending June 30, \n  \n\n2026 \n$409,025 \n\n2027 \n 29,928 \n\n2028 \n 32,727 \n\n2029 \n 35,690 \n\n2030 \n 38,824 \n\nThereafter \n 387,979 \n\nTotal \n$934,173 \n\n \n\nF-24\n\n \n\n** **\n\n**TMD Energy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n** **\n\n**Note\n10 – Loans borrowings (Continued)**\n\n** **\n\n*Vendor\nInstallment Loans*\n\n \n\nThe\nCompany has entered into installment loans for the purchase of vessels, which are used primarily for its bunkering operations. These\nloans are secured by the vessels acquired and bear fixed repayment schedules over the life of the loan, with periodic payments consisting\nof both principal and interest components.\n\n \n\nAs\nof June 30, 2025, the aggregate outstanding balance of installment loans for the purchase of vessels amounted to $380,000, which shall\nbe 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\nand requirements stipulated in the loan agreements. The vessels acquired through these loans are recorded as assets on the Company’s\nbalance sheet and are depreciated over their useful lives.\n\n \n\nInterest\nexpenses related to these installment loans are recognized over the life of the loans using the effective interest method.\n\n \n\n*Bank\nTerm Loan*\n\n \n\nOn\nJune 24, 2022, the Company entered into a facility agreement for a term loan up to SGD824,000 (equivalent to $593,198) to partially finance\nthe acquisition of leasehold property. Interest is charged at 1.20% per annum over the 3-month Compounded Singapore Overnight Rate Average\n(“**SORA**”) for the first two years from the date of first disbursement, and at 2.00% per annum over the 3-month Compounded\nSORA from the third year onwards. The loan is secured by way of legal mortgage over the property and guarantees provided by SMS 1.\n\n \n\nTotal\ninterest 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\nended December 31, 2024 and 2023, respectively.\n\n \n\nF-25\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n11 – Leases**\n\n \n\nClassification\nrelated to operating and finance leases on the unaudited consolidated balance sheet consists of the following:\n\n Schedule\nof operating and finance leases assets and liabilities\n\n  \n\nJune\n30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \nAs\nof \n\n  \n\nJune\n30,\n\n2025\n  \nDecember\n31, 2024 \n\n  \n(Unaudited)  \n(Audited) \n\nLease assets and liabilities \n    \n   \n\nOperating lease assets, net \n$37,981  \n$16,603 \n\nFinance lease assets, net \n 15,432  \n 40,454 \n\n  \n    \n   \n\nOperating lease liabilities\n– current \n$24,437  \n$9,223 \n\nOperating lease\nliabilities – noncurrent \n 14,301  \n 7,564 \n\nOperating lease\nliabilities – total \n$38,738  \n$16,787 \n\n  \n    \n   \n\nFinance lease liabilities –\ncurrent \n$11,979  \n$11,053 \n\nFinance lease liabilities\n– noncurrent \n 53,658  \n 56,559 \n\nFinance lease\nliabilities – total \n$65,637  \n$67,612 \n\n \n\nComponents\nof lease cost, weighted average remaining lease terms and discount rates of operating and finance leases consist of the following:\n\n Schedule\nof lease cost, weighted average remaining lease terms and discount rates of operating and finance leases\n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n\nFor\nthe Six Months\n\nEnded\n  \nFor\nthe Years Ended \n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nLease expenses \n    \n    \n   \n\nOperating lease expenses – SG&A\nportion \n$13,225  \n$21,874  \n$23,089 \n\nFinance lease expenses \n    \n    \n   \n\nDepreciation expense of\nleased assets \n 26,351  \n 50,426  \n 17,625 \n\nInterest\nexpense of finance lease \n$1,564  \n$3,420  \n$2,306 \n\n  \n    \n    \n   \n\nOther Information \n    \n    \n   \n\nCash paid for amounts included in the measurement\nof lease liabilities \n    \n    \n   \n\nOperating cash flows –\noperating leases \n$12,683  \n$22,959  \n$23,039 \n\nOperating cash flows –\nfinance leases \n 1,564  \n 3,420  \n 2,306 \n\nFinancing\ncash flows – finance leases \n$5,562  \n$10,216  \n$41,328 \n\n  \n    \n    \n   \n\nOperating lease right-of-use\nassets obtained in exchange for operating lease liabilities \n$31,350  \n$15,359  \n$- \n\n  \n    \n    \n   \n\nWeighted average remaining lease term (in years) \n    \n    \n   \n\nOperating leases \n 1.51  \n 1.01  \n 1.00 \n\nFinance leases \n 4.91  \n 5.41  \n 3.25 \n\n  \n    \n    \n   \n\nAverage discount rate \n    \n    \n   \n\nOperating leases \n 8.72% \n 7.74% \n 5.77%\n\nFinance leases \n 4.67% \n 4.67% \n 4.63%\n\n \n\nFuture\nminimum payments under operating and finance leases consist of the following:\n\n Schedule\nof future\nminimum payments under operating and finance leases\n\n  \nOperating\nLeases  \n\nFinance\n\nLeases\n \n\nFuture minimum lease payments \n    \n   \n\nPeriod ended June 30, 2026 \n$26,833  \n$14,758 \n\nPeriod ended June 30, 2027 \n 14,695  \n 14,758 \n\nPeriod ended June 30, 2028 \n -  \n 14,758 \n\nPeriod ended June 30, 2029 \n -  \n 14,758 \n\nPeriod ended June 30, 2030 \n -  \n 14,346 \n\nTotal \n$41,528  \n$73,378 \n\nLess: Interest \n (2,790) \n (7,741)\n\nPresent value of lease liabilities \n$38,738  \n$65,637 \n\n \n\nF-26\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n12 – Equity**\n\n \n\nThe\nCompany is authorized to issue 500,000,000 shares of ordinary shares with $0.0001 par value.\n\n \n\nAs\nat date of incorporation, the Company has 100 shares of ordinary shares $0.0001 par value issued and outstanding. These shares were issued\non the incorporation of the Company on October 17, 2023.\n\n \n\nOn\nMay 31, 2024, the Company issued additionally 19,999,900 ordinary shares of $0.0001 par value for its re-organization transactions as\nfollows:\n\n \n\n(i)An\naggregate 15,336,423 shares of ordinary shares to Straits for the acquisition of 100% in\nSMF, TMD Straits and TMD Sturgeon, 70% in Tumpuan Megah and 51% in SMS 1;\n\n(ii)1,737,467\nshares of ordinary shares to Dato’ Mohd Suhaimi bin Hashim for the acquisition of 15%\nTumpuan Megah;\n\n(iii)1,737,467\nshares of ordinary shares to Yong Sing Goo for the acquisition of 15% Tumpuan Megah; and\n\n(iv)1,188,543\nshares of ordinary shares to Platinum Gate Capital Pte Ltd. for the acquisition of 49% SMS\n1.\n\n \n\nOn\nJune 30, 2024, the Company reversed $5,311,880 of additional paid-in capital (“**APIC**”). This amount represented cash\ncontributions from Straits intended for the acquisition of shares in Tumpuan Megah, which had been classified as APIC within Tumpuan\nMegah’s equity. However, the shares were never issued. As part of the restructuring exercise for the IPO, Straits formally terminated\nthe share acquisition agreement, and this amount was reclassified as a liability under amounts due to related parties, Straits.\n\n \n\nOn\nApril 22, 2025, the Company consummated its initial public offering on NYSE American, under the ticker symbol “TMDE”. Under\nthis 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\nto the underwriter to purchase up to an additional 465,000 ordinary shares at the public offering price to cover over-allotment, if any.\nOn April 22, 2025, the underwriter exercised the over-allotment option in full to purchase an additional 465,000 ordinary shares. On\nApril 24, 2025, the Company closed its initial public offering and the exercise of the over-allotment option, received gross proceeds\nof $11,586,250 from the offering before deducting underwriting discounts and offering expenses.\n\n \n\nOn\nApril 22, 2025, upon the completion of IPO of the Company, IPO costs capitalized as of December 31, 2024 amounted to $1,839,846, together\nwith other IPO costs incurred during the period ended June 30, 2025, totaling $3,488,971, were charged to shareholder’s equity under\nAPIC.\n\n \n\nAs\nat June 30, 2025, the Company has 23,565,000 shares of ordinary shares $0.0001 par value issued and outstanding.\n\n \n\n*Acquisition\nof non-controlling interest*\n\n \n\nOn\nMay 31, 2024, the Company’s subsidiary, SMF acquired 4,500,000 ordinary shares in Tumpuan Megah, representing 30% of the non-controlling\ninterest in Tumpuan Megah, from Dato’ Mohd Suhaimi bin Hashim and Yong Sing Goo held equally. The purchase consideration amounting\nto RM9,720,989 (equivalent to $2,085,557) was settled by the issuance of 3,474,934 ordinary shares of TMDEL.\n\n \n\nOn\nMay 31, 2024, SMF acquired 49,000 ordinary shares in SMS 1, representing 49% of the non-controlling interest in SMS 1, from Platinum\nGate Capital Pte. Ltd. The purchase consideration amounting to RM3,324,902 (equivalent to $713,330) was settled by issuance of 1,188,543\nordinary shares of TMDEL.\n\n \n\nThese\nacquisitions are accounted for as transactions with non-controlling interests in accordance with ASC 810 (Consolidation). The impact\non the Company’s equity and any adjustments to the non-controlling interests are reflected in the statement of equity and the foreign\ncurrency translation adjustments associated with these acquisitions are recorded as part of Accumulated Other Comprehensive Income in\naccordance with ASC 830 (Foreign Currency Matters).\n\n \n\n**Note\n13 – Disaggregated revenue and geographic information**\n\n \n\nDisaggregated\nrevenue by service lines as follows:\n\n Schedule\nof disaggregated revenue by services lines\n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n\nFor the Six Months\nEnded\n  \nFor\nthe Years Ended \n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nRevenue by service lines\nrecognized at a point in time: \n    \n    \n   \n\nSales of cargo oil and fresh water,\nand bunkering facilitation \n$275,440,318  \n$688,210,369  \n$631,607,903 \n\nVessel chartering services \n -  \n -  \n 1,193,594 \n\nShip management services \n 899,802  \n 397,173  \n 278,276 \n\nTotal revenue \n$276,340,120  \n$688,607,542  \n$633,079,773 \n\n \n\nGeographic\nrevenue information as follows:\n\n Schedule\nof geographic revenue information\n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n\nFor the Six Months\nEnded\n  \nFor\nthe Years Ended \n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nRevenue by geographic area: \n    \n    \n   \n\nHong Kong \n$30,697,646  \n$53,718,192  \n$- \n\nMalaysia \n 245,507,942  \n 634,482,899  \n 633,022,743 \n\nIndonesia \n -  \n -  \n 6,356 \n\nSingapore \n 41,538  \n 405,544  \n 50,674 \n\nVietnam \n 92,994  \n 907  \n - \n\nTotal revenue \n$276,340,120  \n$688,607,542  \n$633,079,773 \n\n \n\nF-27\n\n \n\n** **\n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n14 – Income Taxes**\n\n \n\n*Cayman\nIslands*\n\n \n\nCayman\nIslands entities are not subject to income taxes on profits, income, gains or appreciation, and there is no taxation in the nature of\ninheritance tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the Cayman\nIslands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within the jurisdiction\nof 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\ncompany. There are no exchange control regulations or currency restrictions in the Cayman Islands.\n\n \n\nPayments\nof dividends and capital in respect of the Company’s ordinary shares will not be subject to taxation in the Cayman Islands and\nno 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\nwill gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.\n\n \n\n*Malaysia*\n\n \n\nMalaysia\nIncome Tax is calculated at 24% of the estimated assessable profits for the relevant year. Net operating losses can be carried forward\nfor a limit of ten consecutive years starting from the year subsequent to the year in which the loss was incurred.\n\n \n\nFor\nLabuan Trading activity, the chargeable profits would subject to tax under Labuan Business Activity Act, 1990 (“**LBATA**”)\nof which 3% of net audited profits would be taxed.\n\n \n\n*Singapore*\n\n \n\nSingapore\nIncome Tax is calculated at 17% of chargeable income for the relevant year. Net operating losses can be carried forward indefinitely\nto offset against future taxable income.\n\n \n\nTaxable\n(loss) income before income taxes by jurisdiction are as follows:\n\n Schedule\nof taxable income/(loss) before income taxes by jurisdiction\n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n\nFor the Six Months\nEnded\n  \nFor\nthe Years Ended \n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n(Unaudited)  \n(Audited)  \n(Audited) \n\nLabuan \n$1,022  \n$26,190  \n$25,263 \n\nMalaysia \n (1,039,138) \n 1,280,329  \n 684,759 \n\nSingapore \n 50,082  \n 121,780  \n 64,217 \n\nTotal tax (benefits)\nexpenses \n$(988,034) \n$1,428,299  \n$774,239 \n\n \n\nReconciliations\nof the statutory income tax rate and the Company’s effective income tax rate are as follow:\n\n Schedule\nof reconciliations of the statutory income tax rate and effective income tax rate\n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n\nFor the Six Months\nEnded\n  \nFor\nthe Years Ended \n\n  \n\n**June\n30,**\n\n**2025**\n  \nDecember\n31, 2024  \nDecember\n31, 2023 \n\n  \n(Unaudited)  \n**(Audited)**  \n**(Audited)** \n\nIncome tax expense at Labuan statutory\nrate \n$8,411  \n 26,247  \n$25,375 \n\nIncome tax expense at Malaysia statutory rate \n 283,787  \n 613,388  \n 710,438 \n\nIncome tax expense at Singapore statutory rate \n 69,507  \n 110,461  \n 91,240 \n\nIncreases (decreases) due to: \n    \n    \n   \n\nOther adjustments \n (303,211) \n 743,918  \n (177,593)\n\nTemporary differences \n (45,490) \n (9,092) \n 13,072 \n\nOther exemption, rebate\nand credit \n -  \n (26,038) \n (56,397)\n\n(Over)\nUnder provision in prior years(1) \n (1,001,038) \n (30,585) \n 168,104 \n\nTax expense (benefits),\nnet \n$(988,034) \n 1,428,299  \n$774,239 \n\n \n\n(1)With\nthe change of fiscal year end from December 31 to June 30, the reporting period of Tumpuan\nMegah covered 18 months from January 1, 2024 to June 30, 2025. Given Tumpuan Megah recorded\na net loss for the six months ended June 30, 2025, the tax loss position reduced the overall\nassessable profits for the full 18-month reporting period. As a result, the provision for\nincome tax previously recognized for the year ended December 31, 2024 was overstated by $1,001,038.\n\n \n\nF-28\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n15 – Commitments and contingencies**\n\n \n\n*Contingencies*\n\n \n\nLegal\nproceedings between ING Bank N.V., O.W. Bunker Far East (Singapore) Pte. Ltd., and Tumpuan Megah Development Sdn. Bhd.\n\n \n\nThe\nCompany’s subsidiary, Tumpuan Megah, is involved in a legal proceeding consisting of disputes over financing agreements, gas oil\nsupply contracts, and an enforcement attempt of an English judgment against Tumpuan Megah for $937,353,\nalong with interest and costs. The proceedings include applications, appeals, and hearings in Malaysian courts. On August 13, 2025, the\nFederal Court of Malaysia allowed the appeal filed by ING Bank N.V. and O.W. Bunker Far East (Singapore) Pte. Ltd. (collectively, the\n“**Appellants**”) against the Court of Appeal’s decision to order a trial of issues in connection with an application\nto set aside the High Court judgment dated March 22, 2021. That judgment registered a decision of the English High Court enforcing an\narbitral award obtained by the Appellants against Tumpuan Megah. Accordingly, RM130,000\n(equivalent to $30,745)\nwas awarded to the Appellants. Consequently, Tumpuan Megah’s application to set aside the judgment will now resume in the High\nCourt, with the hearing date to be scheduled in due course.\n\n \n\nTumpuan\nMegah is accompanied by an agreement from Straits to release to Tumpuan Megah all amounts it receives under a personal guarantee from\nthe vendor (Raja Ismail), indemnifying Straits against Tumpuan Megah’s liabilities after deducting Straits’ cost and expense\nin recovery of such amount from the vendor, with the scope of indemnification potentially extending to liabilities arising from these\nlegal proceedings.\n\n \n\nThere\nis no reasonable possibility that any losses may be incurred by the Company, as the Guaranteed Obligations are fully indemnified by Raja\nIsmail under the binding personal guarantee agreement (Guarantee Agreement referred to in Note 8) and there is no additional exposure\nto the Company as all costs and the potential liability have been indemnified under the agreement.\n\n \n\nA\nclaim for loss recovery generally can be recognized when a loss event has occurred and recovery is considered probable. If the claim\nis subject to dispute or litigation, a rebuttable presumption exists that recoverability of the claim is not probable. If the potential\nrecovery exceeds the loss recognized in the financial statements or relates to a loss not yet recognized in the financial statements,\nsuch recovery should be recognized under the gain contingency model.\n\n \n\nAs\na result of this indemnification agreement, where all potential liabilities are indemnified, no provisions have been made in the financial\nstatements for these potential liabilities, nor has any recognition of loss contingency has been made under ASC 450-20. The total reimbursable\nlegal fees are recorded as “Due from related parties”, which is disclosed in Note 8.\n\n \n\nF-29\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n16 – Concentration, risks, and uncertainties**\n\n \n\na)Concentration\nof credit risk\n\n \n\nFinancial\ninstruments that potentially subject the Company to concentration of credit risk are cash and cash equivalents, and accounts receivable\narising from its normal business activities.\n\n \n\nThe\nCompany is exposed to credit risks associated with deposits held in financial institutions. The aggregate deposit amounts in financial\ninstitutions exceeding the insurance limits set by local authorities which may be at risk in the event of a financial institution default.\nThe Company regularly assesses and monitors credit risks associated with its deposit accounts and takes appropriate measures to mitigate\npotential losses.\n\n \n\nThe\nCompany evaluates customer creditworthiness and maintains an allowance for expected credit losses. While the Company believes its allowance\nadequately covers estimated credit risks, certain long-outstanding receivables present heightened collection risks that may exceed the\ncurrent allowance. The Company routinely assesses the financial strength of its customer and, based upon factors surrounding the credit\nrisk, establishes an allowance, if required, for uncollectible accounts and, consequently, believes that its accounts receivable credit\nrisk exposure beyond such allowance is limited. However, prolonged delinquencies could result in additional allowances or write-offs\nin future periods.\n\n \n\nb)Foreign\ncurrency exchange rate risk\n\n \n\nThe\nfunctional currencies of the subsidiaries are RM and SGD, respectively. The Company’s exposure to foreign currency exchange rate risk\nprimarily relates to cash and cash equivalents, accounts receivable and accounts payable. Any significant fluctuation of the functional\ncurrencies against U.S. dollars may materially and adversely affect the Company’s cash flows, revenues, earnings and financial\npositions.\n\n \n\nc)Liquidity\nrisk\n\n \n\nThe\nCompany is exposed to liquidity risk, which is the risk that it may encounter difficulties in meeting its financial obligations as they\nbecome due. The Company manages this risk by maintaining adequate levels of cash and cash equivalents, monitoring cash flows, and maintaining\naccess to financing sources.\n\n \n\nAs\nof 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\nthat it can meet all its financial obligations as they become due in the foreseeable future. This conclusion is based on a detailed assessment\nof the Company’s financial position, forecast, and plans up to the date of approval of these financial statements.\n\n \n\nKey\nconsiderations in this assessment include:\n\n \n\n●The\nCompany maintained cash and cash equivalents of $7,060,410 as of June 30, 2025.\n\n●The\nCompany’s strong payment track record and long-standing relationships suggest that\ntrade facilities amounting to approximately $91,806,603 and supplier purchasing limits of\n$11,221,250 will be available for the next 12 months.\n\n●As\nof June 30, 2025, the Company had balances of available trade facilities amounting to $7,623,591\nto support its operational needs.\n\n●Tumpuan\nMegah entered into a repayment plan with major debtors covering $14,986,210, with scheduled\nmonthly repayments from June 2025 to May 2026, which are expected to provide additional liquidity.\n\n \n\nPrior\nto the consummation of the initial public offering on April 22, 2025, the Company’s principal sources of liquidity to finance its\noperating activities were from the working capital, trade financing from financial institutions, suppliers credit financing and cash\ngenerated from business operation.\n\n \n\nOn\nApril 22, 2025, the Company consummated its initial public offering on the NYSE American. In this offering, 3,100,000 ordinary shares\nwere issued at a price of $3.25 per share. In addition, the Company entered into an underwriting agreement with the underwriter on April\n21, 2025, which granted the underwriter a 45-day option to purchase up to an additional 465,000 ordinary shares at the public offering\nprice of $3.25 per share to cover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option\nin full, purchasing an additional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering\nclosed on April 22, 2025 and the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11,586,250,\nbefore deducting underwriting discounts and offering expenses.\n\n \n\nF-30\n\n \n\n \n\n**TMD\nEnergy Limited**\n\n \n\n**Notes\nto Unaudited Consolidated Financial Statements**\n\n \n\n**For\nthe Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023**\n\n \n\n**Note\n16 – Concentration, risks, and uncertainties (Continued)**\n\n \n\nThe\nCompany believes that its existing cash resources, anticipated cashflow from operations, anticipated cash raised from financing together\nwith net proceeds from its public offering will be sufficient to meet and fund its anticipated operation working capital and capital\nexpansion requirements for the next 12 months from the date of this transition report.\n\n \n\nIf\nthe Company experiences an adverse operating environment or incur unanticipated capital expenditure requirements, or if the Company determines\nto accelerate its growth, then additional financing may be required. No assurance can be given, however, that such financing would be\navailable at all or on favorable terms. Additional financing may include the use of debt, credit facilities from financial institutions,\nor the sale of equity or instruments convertible into equity securities, whether by the Group or its ultimate holding company. Any issuance\nof additional equity could result in immediate and possibly significant dilution to its existing shareholders, while incurrence of debt\nwould increase fixed obligations and bring along operating covenants that could restrict its operations.\n\n \n\nAs\nat June 30, 2025, the Company’s cash and cash equivalents were approximately $7,060,410, comprising primarily in cash and cash\nequivalent.\n\n \n\nd)Environment\nrisk\n\n \n\nThe\nCompany is subject to numerous local and international environmental laws and regulations as its operation involved the risks of fuel\nspillage or seepage, environmental damage and hazardous waste disposal which subsequently could result in substantial claims, fines or\npenalties that will have a material adverse effect on our business and operating results. To mitigate any possible environmental and\nfinancial impact, the Company implements stringent standard operating procedures and policies throughout its bunkering and vessel operations.\n\n \n\ne)Concentration\nrisk\n\n \n\n*Customers*\n\n \n\nFor\nthe six months ended June 30, 2025, Customer A, Customer B, Customer C and Customer D accounted for 91.43%, 0.72%, 0.71%\nand nil\nof the Company’s revenues, respectively. As of June 30, 2025, these customers accounted for 33%, 26%, 19%\nand 19%\nof the Company’s accounts receivable, respectively.\n\n \n\nFor\nthe year ended December 31, 2024, Customer A, Customer B, Customer C and Customer D accounted for 92.43%, 1.03%, 1.42%\nand 0.86%\nof the Company’s revenues, respectively. As of December 31, 2024, these customers accounted for 13%, 32%, 23%\nand 30%\nof the Company’s accounts receivable, respectively.\n\n \n\nFor\nthe year ended December 31, 2023, Customer A and Customer B accounted for 92.66%,\nand 1.66%\nof the Company’s revenues, respectively. As of December 31, 2023, these customers accounted for 44%\nand 36%\nof the Company’s accounts receivable, respectively.\n\n \n\n*Suppliers*\n\n \n\nFor\nthe six months ended June 30, 2025, Supplier A, Supplier B and Supplier C accounted for 71.81%, 2.71%\nand 1.37%\nof the Company’s total cost of revenues, respectively. As of June 30, 2025, these suppliers accounted for 33%, 38%\nand 26%\nof the Company’s accounts payable, respectively.\n\n \n\nFor\nthe year ended December 31, 2024, Supplier A, Supplier D and Supplier C accounted for 79.59%, 2.56%\nand 1.19%\nof the Company’s total cost of revenues, respectively. As of December 31, 2024, these suppliers accounted for 39%, 38%\nand 19%\nof the Company’s accounts payable, respectively.\n\n \n\nFor\nthe year ended December 31, 2023, Supplier A and Supplier D accounted for 46.01%\nand 36.26%\nof the Company’s total cost of revenues, respectively. As of December 31, 2023, these suppliers accounted for nil\nand 95%\nof the Company’s accounts payable, respectively.\n\n \n\n**Note\n17 – Subsequent events**\n\n \n\nThe\nCompany evaluates all events and transactions that occur after June 30, 2025 up through the date the Company issues the unaudited consolidated\nfinancial statements. Other than the event disclosed elsewhere in these unaudited consolidated financial statements, there is no other\nsubsequent event occurred that would require recognition or disclosure in the Company’s unaudited consolidated financial statements.\n\n \n\nF-31"}