TMD Energy : Amendment to Annual Report by Foreign Issuer (Form 20-F/A)

About this update from Tmd Energy Limited

This Amendment No. 1 on Form 20-F/A (this "Amendment") amends the Annual Report on Form 20-F of TMD Energy Limited (the "Company") for the transition period from January 1, 2025 to June 30, 2025, originally filed with the U.S. Securities and Exchange Commission (the "SEC") on September 29, 2025 (the "Original Filing"). The Company is filing this Amendment in response to a comment letter received from the staff of the Division of Corporation Finance of the SEC dated April 15, 2026 (the "Comment Letter"), regarding the classification of advances to related parties in the Company's Consolidated Statements of Cash Flows. This Amendment revises the Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and the year ended December 31, 2024. Additionally, this Amendment includes corresponding conforming revisions to the Cash Flows and Working Capital discussion under Item 5. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Amendment No. 1 also includes, as Exhibits 12.1 and 12.2, the certifications of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, and, as Exhibits 13.1 and 13.2, the certifications of the Chief Executive Officer and the Chief Financial Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Except as expressly set forth in this Amendment, the Original Filing has not been amended, updated or otherwise modified. This Amendment does not reflect events that may have occurred after the date of the Original Filing or modify or update any disclosures that may have been affected by such events. Table of Contents Page PART I. ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 1 ITEM 8. FINANCIAL INFORMATION 20 PART II. ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 20 ITEM 14. MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 20 PART III. ITEM 17. FINANCIAL STATEMENTS 21 ITEM 18. FINANCIAL STATEMENTS 21 ITEM 19. EXHIBITS 21 i CONVENTIONS THAT APPLY TO THIS TRANSITION REPORT Unless we indicate otherwise, references in this Transition Report to: ● "6M2024" are to six months ended June 30, 2024; ● "6M2025" are to six months ended June 30, 2025; ● "Exchange Act" are to the U.S. Securities Exchange Act of 1934, as amended from time to time; ● "FY2022" are to the financial year ended December 31, 2022; ● "FY2023" are to the financial year ended December 31, 2023; ● "FY2024" are to the financial year ended December 31, 2024; ● "IPO" are to the Company's initial public offering which was consummated on April 22, 2025; ● "Labuan" are to Labuan, an island federal territory of Malaysia; ● "Labuan Companies Act" are to Labuan Companies Act 1990 (Act 441) of Labuan, as amended and restated from time to time; ● "Malaysia" are to the sovereign state of Malaysia; ● "mt" are to the metric ton; ● "M.T." are to the motor tanker; ● "Ordinary Shares" are the ordinary shares of our Company, par value of $0.0001 per share; ● "our Board" are to the board of directors of our Company; ● "our Company" are to TMD Energy Limited, a company incorporated in the Cayman Islands with limited liability on October 17, 2023; ● "our Group", "we", "us" and "our" are to our Company and its subsidiaries, as the context requires; ● "our Director(s)" are to the director(s) of our Company; ● "RM" are to the legal currency of Malaysia; ● "SEC" are to U.S. Securities and Exchange Commission; ● "SGD" are to the legal currency of Singapore; ● "Singapore" are to Republic of Singapore; ● "STS" are to ship-to-ship; and ● "$", "USD", "US$" or "U.S. dollars" are to the legal currency of the United States. ii SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Transition Report contains forward-looking statements that involve risks and uncertainties, including statements based on our current expectations, assumptions, estimates and projections about us and our industry. These forward-looking statements are made under the "safe harbor" provision under Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and as defined in the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. In some cases, these forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "believe", "potential", "continue", "is/are likely to" or other similar expressions. The forward-looking statements included in this Transition Report relate to, among others: ● timing of the development of future business; ● capabilities of our business operations; ● expected future economic performance; ● competition in our market; ● continued market acceptance of our services and products; ● protection of our intellectual property rights; ● changes in the laws that affect our operations; ● inflation and fluctuations in foreign currency exchange rates; ● our ability to obtain and maintain all necessary government certifications, approvals, and/or licenses to conduct our business; ● continued development of a public trading market for our securities; ● the cost of complying with current and future governmental regulations and the impact of any changes in the regulations on our operations; ● managing our growth effectively; ● projections of revenue, earnings, capital structure and other financial items; ● fluctuations in operating results; and ● health crisis, including due to pandemics such as the COVID-19 pandemic and government measures taken in response thereto. You should read these statements in conjunction with the risks disclosed in "Item 3. Key Information-3.D. Risk Factors" of our annual report on Form 20-F filed with the SEC on May 14, 2025 and other risks outlined in our other filings with the Securities and Exchange Commission, or the SEC. Moreover, we operate in an evolving environment. New risks may emerge from time to time, and it is not possible for our management to predict all risks, nor can we assess the impact of such risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ materially from those contained in any forward-looking statements. The forward-looking statements made in this Transition Report relate only to events or information as of the date on which the statements are made in this Transition Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this Transition Report and the documents that we have referred to in this Transition Report, completely and with the understanding that our actual future results may be materially different from what we expect. iii PART I. ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS You should read the following discussion and analysis of the Group's financial condition and results of operations in conjunction with the Group's unaudited consolidated financial statements and the related notes included elsewhere in this transition report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. The Group's actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Item 3. Key Information - 3.D. Risk Factors" of our annual report on Form 20-F for the year ended December 31, 2024. We caution you that our businesses and financial performance are subject to substantial risks and uncertainties. 5.A. Operating Results Holding Company Structure Our Company is a holding company with no material operations of its own other than investment holding. We conduct our operations primarily through our indirect operating subsidiaries which are owned by Straits Marine Fuels & Energy Sdn. Bhd. (" SMF "), the sole direct subsidiary of our Company. Similarly, SMF is a holding company with no material operations of its own other than holding investment in all the indirect subsidiaries of our Company. As a result, both our Company and SMF's ability to pay dividends depends upon dividends paid by our subsidiaries. Some of our subsidiaries have debt on their own with instruments governing their debt that may restrict their ability to pay dividend to us, unless those debts are repaid. The same restrictions may apply if they incur any new debt on their own in the future. Straits Energy Resources Berhad (" Straits "), the holding company of our Company through its wholly-owned subsidiary, Straits Management Services Sdn. Bhd. will continue to provide overall group management and coordination services encompassing but not restricted to listing compliance and requirement, group consolidation and reporting, corporate governance, corporate secretarial, corporate finance, corporate banking, accounting, market and public relations at a management fee that will be reviewed annually for our group of companies. Our Company, through our various subsidiaries, are involved in oil trading and bunkering with its own vessel management team overseeing its fleet of bunkering vessels servicing and providing quality bunker to both domestic and international liners and vessels of all nature, that ply through Malaysian waters. Being a Malaysian company operating in Malaysian waters, it is natural that this oil trading and bunkering unit maintain its financial records and statements in its domestic currency, RM. Our Company will be looking into possibilities of expanding its operation regionally out of Malaysian waters. Recent Developments We consummated our initial public offering on the NYSE American on April 22, 2025, issuing 3,100,000 ordinary shares at a price of $3.25 per share. In addition, we entered into an underwriting agreement with the underwriter on April 21, 2025, which granted the underwriter a 45-day option to purchase up to an additional 465,000 ordinary shares at the public offering price of $3.25 per share to cover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option in full, purchasing an additional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering closed on April 22, 2025 and the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11.59 million, before deducting underwriting discounts and offering expenses. The ordinary shares began trading on April 21, 2025 on NYSE American and commenced trading under the ticker symbol "TMDE". On May 16, 2025, we had changed our fiscal year end from December 31 to June 30, to align with the fiscal year end of our holding company, Straits. Factors Affecting Our Results of Operations We rely on sales to key customers and purchases from a limited number of suppliers, where reduction or loss of key customers or supply chain disruptions and price volatility from supplier could diminish our operating results. We have not derived a significant amount of revenue from volume commitments or any other understandings with our key customers related to future purchases. Orders from our key customers could be reduced or ceased at any time without obligation. Our Group also does not enter into long-term agreements with our customers. If any of our major customers terminate their business relationship with us, and we fail to secure new customers or new orders from other existing customers in a timely manner, a substantial reduction or termination of purchases by our key customer could significantly affect our operations. In addition, we currently purchase refined marine fuel products from a limited number of suppliers. If our relationship with any of our key suppliers is terminated or if our key suppliers experience production disruptions, we may not be able to obtain a sufficient quantity of refined marine fuel on acceptable terms and without interruptions to our business. We may encounter difficulties and delays in obtaining marine fuel from alternative sources. Any interruption or delay in the supply of marine fuel, or the inability to obtain fuel from alternate sources at acceptable prices and within a reasonable timeframe, would impair our ability to meet scheduled deliveries to our customers and could lead to order cancellations or penalties. We rely on the expertise of our senior management, and our inability to retain key personnel could disrupt our business and limit our growth. Our business success and growth prospects depend significantly on the continued service of our senior management team and our ability to hire and retain key members of our management team. The unexpected loss of any of these key individuals could disrupt our operations, damage important business relationships, and delay strategic initiatives, potentially harming our competitive position. We face inherent challenges in attracting and retaining qualified personnel due to intense industry competition for executive talent. While we implement retention measures, there is no assurance that we will successfully maintain our current management team. Any disruption in leadership could materially adversely affect our operations. Material disruptions in the availability or supply of oil may reduce the supply of our products and have a material impact on our operations. Our operations face substantial risks from marine fuel supply disruptions that could impair our ability to fulfill customer demand. Global oil markets remain exposed to geopolitical conflicts, trade restrictions, and natural disasters that may reduce refinery output or disrupt logistics. Political instability in producing regions, terrorist activity, or military actions could abruptly constrain supply availability, while extreme weather or accidents might damage critical infrastructure. Such events typically trigger sudden price spikes and inventory shortages across the bunker fuel market. These constraints would directly limit our sales volumes and erode our competitive pricing position. Although we maintain alternative supply arrangements, the integrated nature of oil markets means local disruptions often escalate into prolonged shortages. Our commodity-based business model leaves us particularly vulnerable to these shocks, as securing substitute fuel during crises becomes costly and time-consuming. Persistent supply issues could damage customer relationships and significantly pressure margins, leading to lasting effects on financial performance. Adverse conditions in the shipping industry may reduce the demand for our products and services and negatively affect our results of operations and financial condition. Our marine fuel supply business remains highly dependent on the cyclical performance of the shipping industry. Fluctuations in vessel charter rates, fuel costs, and operational expenses directly impact our customers' purchasing capacity. During market downturns, when freight rates decline or operating costs rise, shipping companies typically reduce bunkering consumption, creating immediate pressure on our sales volumes and margins. The industry's vulnerability to risks, including geopolitical conflicts, piracy incidents, trade disputes, and port security threats, can disrupt shipping routes and vessel operations, leading to sudden drops in regional fuel demand. Prolonged market weakness often forces shipowners to idle vessels or slow steam, further depressing bunker demand. While we actively monitor industry trends and adjust our commercial strategies accordingly, these macroeconomic and geopolitical factors remain beyond our control. Our financial performance will continue to reflect shipping market volatility, with potential impacts on revenue stability, profitability, and cash flow generation. This inherent sector exposure represents a persistent challenge to our business model's resilience. Impact of Russia's Invasion of Ukraine, Conflicts in Middle East and Related Supply Chain Issues In February 2022, Russia launched a military attack on Ukraine, leading to further regional and international conflicts or armed action. As Russia is one of the largest exporters of crude oil in the world, this crisis had disrupted the oil supply and caused a spike in oil prices for the year ended December 31, 2022 (" FY2022 "), which subsequently declined for the year ended December 31, 2023 (" FY2023 "). Since late 2023, conflicts in the Middle East, including the Israel-Gaza war and related regional escalations, have contributed to heightened geopolitical instability. These developments, combined with increased security risks in major shipping lanes, disrupted global maritime trade by lengthening voyage times and raising operational costs across the industry. The Russia-Ukraine conflict caused a spike in oil prices that was offset by a continuing growth in demand volume in our oil cargo bunkered in FY2023, resulting in our revenue dropping to $633.1 million in FY2023 from approximately $702.1 million in FY2022. As the financial impact of this crisis had already been reflected in FY2022 and FY2023, there was no material impact on our revenue for the year ended December 31, 2024 (" FY2024 "). In fact, after considering the increase in the volume of oil cargo bunkered, our revenue rose from $633.1 million in FY2023 to $688.6 million in FY2024, driven by the expansion of our marketplace. Since then, the direct effect of the Russia-Ukraine conflict on our operations has moderated, and subsequent movements in oil prices have been influenced more by global economic conditions and trade policy developments and regional conflicts in the Middle East. For the six months ended June 30, 2025, our performance was affected by a combination of factors. Middle East tensions contributed to additional volatility in oil prices and operational costs, serving as another headwind that, together with trade and tariff issues, led to a decline in our revenue. In response to these market challenges, we have been strengthening collaboration with our key service providers and exploring alternative sourcing and supply chain options to enhance resilience and operational continuity. While these measures aim to mitigate potential impacts, there can be no assurance that they will fully shield us from ongoing geopolitical and trade policy volatility. Escalating Trade Tensions and Impacts of Tariff Policy Volatility Recent global trade developments have introduced heightened uncertainty into international commerce. In early 2025, the implementation of broad new tariffs on a wide range of imported goods significantly disrupted global trade dynamics, raising concerns across multiple sectors. Frequent changes in tariff rates and enforcement timelines further disrupted global shipping schedules, causing vessel delays, delivery rescheduling, and a slowdown in trade flows across major routes. The prolonged tariff crisis reduced shipping activity and cargo movement, which in turn lowered demand for marine fuel. Coupled with softer global consumption, weaker economic growth, and a continuing shift toward alternative energy, these headwinds exerted downward pressure on oil demand and contributed to a significant decline in international oil prices, with the global average oil price declined. For the six months ended June 30, 2025, revenue decreased to $276.3 million from $357.5 million for the six months ended June 30, 2024. This decline was primarily attributable to lower sales volume, despite our enlarged customer base compared to the six months ended June 30, 2024. In addition, weaker shipping activity and softer global consumption further depressed oil prices, which deteriorated our performance for the six months ended June 30, 2025. In response, we are strengthening collaboration with our key service providers and exploring alternative sourcing and supply chain options to enhance resilience and operational continuity. While these strategic measures aim to mitigate potential impacts, there can be no assurance that they will fully shield us from the broader effects of ongoing trade policy shifts. We will continue to monitor developments closely and adapt our business strategy as needed to maintain operational stability and financial performance. Nevertheless, any negative impact arising from an escalation of geopolitical tensions, including the Russia-Ukraine conflict, conflicts in the Middle East, a slowdown in global economy, or continued trade tension and tariff crisis could adversely affect our business conditions. The volatility of crude oil price and inflationary pressures can increase our operating cost and a prolonged crisis may adversely impact the supply and demand of oil cargo, which may result in a lower volume of oil cargo bunkered. In addition, any significant increase in marine fuel price might tighten the operating cash flows of our Group, which may, in turn, adversely affect our working capital requirements, financial conditions and prospects. These disruptions may also heighten many other risks disclosed in the "Risk Factors" section in our annual report on Form 20-F for the year ended December 31, 2024, including our ability to market our securities, raise equity or debt financing. The ultimate impact of the conflict on our operations remains unknown and will depend on future developments. The Group will continuously monitor the situation closely and initiate any necessary mitigating actions when required. Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024 Results of Operations The following table summarizes the results of our operations during the six months ended June 30, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years. For the Six Months Ended June 30, 2025 2024 Variance - $'000 $'000 Increase (Decrease) (Unaudited) (Unaudited) $'000 % Revenues, net 276,185 357,486 (81,301 ) (22.7 ) Revenues - related party, net 155 39 116 297.4 Total revenues 276,340 357,525 (81,185 ) (22.7 ) Cost of revenues (272,275 ) (351,629 ) (79,354 ) (22.6 ) Cost of revenues - related party (82 ) (350 ) (268 ) (76.6 ) Total cost of revenues (272,357 ) (351,979 ) (79,622 ) (22.6 ) Gross profit 3,983 5,546 (1,563 ) (28.2 ) Operating expenses Selling and marketing expenses (38 ) (47 ) (9 ) (19.1 ) General and administrative expenses (3,330 ) (3,061 ) 269 8.8 Depreciation expenses (2,559 ) (2,305 ) 254 11.0 Total operating expenses (5,927 ) (5,413 ) 514 9.5 (Loss) Income from operations (1,944 ) 133 (2,077 ) (1,561.7 ) Other (expenses) income, net Interest income 16 29 (13 ) (44.8 ) Sundry (expense) income (775 ) 3,229 (4,004 ) (124.0 ) Interest expenses (2,803 ) (1,987 ) 816 41.1 Share of losses of associate (4 ) - (4 ) (100.0 ) Total other (expenses) income, net (3,566 ) 1,271 (4,837 ) (380.6 ) (Loss) Income before income taxes (5,510 ) 1,404 (6,914 ) (492.5 ) Income tax benefits (expenses) 988 (277 ) 1,265 456.7 Net (loss) income (4,522 ) 1,127 (5,649 ) (501.2 ) Less: loss (income) attributable to non-controlling interest 212 (287 ) 499 173.9 Net (loss) income attributable to controlling interest (4,310 ) 840 (5,150 ) (613.1 ) Other comprehensive (loss) income: Net (loss) income (4,522 ) 1,127 (5,649 ) (501.2 ) Foreign currency translation adjustments (96 ) (248 ) 152 61.3 Total comprehensive (loss) income (4,618 ) 879 (5,497 ) (625.4 ) Key Components of Results of Operations Revenues Our Group's revenue comprises of bunkering services, vessel chartering services and ship management services as tabulated below: Total Revenue Inter-Segment Revenue from Customers For the Six Months Ended June 30, For the Six Months Ended June 30, For the Six Months Ended June 30, Variance - 2025 2024 2025 2024 2025 2024 Increase $'000 $'000 $'000 $'000 $'000 $'000 (Decrease) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) $'000 % Analysis By Segment: Bunkering services 275,440 357,350 - - 275,440 357,350 (81,910 ) (22.9 ) Vessel chartering services 3,548 3,486 3,548 3,486 - - - - Ship management services 5,074 965 4,174 790 900 175 725 414.3 Total Revenue 284,062 361,801 7,722 4,276 276,340 357,525 (81,185 ) (22.7 ) Overall Our Group's overall revenue for the six months ended June 30, 2025 had decreased by 22.7%, or equivalent to $81.2 million, to $276.3 million from $357.5 million achieved for the six months ended June 30, 2024 due to decrease in contribution from the bunkering services segment, as it contributed more than 99% of our Group's revenue for the six months ended June 30, 2025, offset by a slight increase in ship management services. The decrease in revenue for the six months ended June 30, 2025 was primarily attributable to a decrease in the volume of oil cargo bunkered of approximately 11.2%, from 578,614 metric ton for the six months ended June 30, 2024 to 514,025 metric ton for the six months ended June 30, 2025. Bunkering Services The decrease in the bunkering services revenue by $81.9 million to $275.4 million for the six months ended June 30, 2025 from $357.3 million for the six months ended June 30, 2024 was substantially attributable to the decrease of approximately 11.2% in volume of oil cargo bunkered, from 578,614 metric ton for the six months ended June 30, 2024 to 514,025 metric ton for the six months ended June 30, 2025. In addition, because the selling price of bunker fuel is generally benchmarked to the prevailing market oil price, the 17.9% decrease in the average oil price for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 further reduced the revenue recognized from bunkering services. We expanded our customer base in bunkering services from 53 customers for the six months ended June 30, 2024 to 77 for the six months ended June 30, 2025. Despite this expansion, bunkered volume declined due to a slowdown in global trade and shipping activity. The tariff crisis in early 2025, marked by broad new tariffs and frequent changes in implementation timelines, significantly disrupted shipping schedules and cargo flows. These disruptions, together with softer global consumption and weaker economic growth, reduced overall demand for marine fuel and directly contributed to the decline in oil cargo bunkered. The combined impact of reduced bunkered volume and declining global marine fuel prices offset the benefits of customer base expansion, thereby constraining overall revenue growth in our bunkering services. Vessel Chartering Services Our vessel chartering services segment previously generated revenue by chartering vessels to third parties. There was no revenue from third parties related to vessel chartering services for the six months ended June 30, 2025 and 2024, as our Group temporarily discontinued the segment after the chartering contract expired in July 2023. The vessel was subsequently redeployed to our bunkering fleet to support the growth of our oil bunkering operations. Ship Management Services Our ship management services, supported by a competent team of qualified professional mariners, also managed third-party vessels, including tugboats used in the port and STS operations that are owned by other subsidiaries within the Straits Group, which are outside our Group. The ship management services generated approximately $0.9 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively, due to the addition of new customers for the six months ended June 30, 2025. Cost of revenues Our cost of revenues represent direct expenses incurred to generate revenue. These costs are recorded and accrued as incurred. The cost of revenues primarily comprise oil cargo cost, along with other bunkering operation costs such as bunker own used, port charges, crew wages and consumables, transport costs and agency fees. It also includes vessel operation-related costs, such as vessel consumables, insurance, general upkeep and repair costs. Its major cost components are as follow: For the Six Months Ended June 30, 2025 2024 Variance - (Unaudited) (Unaudited) Increase (Decrease) $'000 $'000 $'000 % Oil cargo sold 264,009 343,994 (79,985 ) (23.3 ) Bunker own used 1,818 2,136 (318 ) (14.9 ) Crew wages 1,815 1,767 48 2.7 Other operating cost 4,715 4,082 633 15.5 Total cost of revenues 272,357 351,979 (79,622 ) (22.6 ) Our overall cost of revenues decreased by 22.6%, or equivalent to $79.6 million, to $272.4 million for the six months ended June 30, 2025 from $352.0 million for the six months ended June 30, 2024, representing 98.6% and 98.4% of our total revenue respectively. This decrease was in line with the decline in the volume of cargo bunkered, with oil cargo costs dropped to $264.0 million for the six months ended June 30, 2025 from $344.0 million for the six months ended June 30, 2024. In addition, other operating costs increased to $4.7 million for the six months ended June 30, 2025 from $4.1 million for the six months ended June 30, 2024. The increase was primarily attributable to higher port-related operation costs, partially offset by a reduction in equipment upkeep expenses. Gross Profit and Gross Profit Margin Overall For the Six Months Ended June 30, 2025 2024 Variance - (Unaudited) (Unaudited) Increase (Decrease) $'000 $'000 $'000 % Revenue 276,340 357,525 (81,185 ) (22.7 ) Cost of revenues (272,357 ) (351,979 ) (79,622 ) (22.6 ) Gross profit 3,983 5,546 (1,563 ) (28.2 ) Gross profit margin 1.44 % 1.55 % (0.11 )% (7.1 ) As a result of the foregoing, we recorded an overall decrease of 28.2% in gross profit, or equivalent to $1.6 million, to $4.0 million for the six months ended June 30, 2025 from $5.6 million for the six months ended June 30, 2024. Nevertheless, our gross profit margin decreased marginally by 0.11%, to 1.44% for the six months ended June 30, 2025 from 1.55% for the six months ended June 30, 2024 primarily reflecting increased operational expenses from our oil bunkering services, resulting in a marginal compression of our gross profit margin. Bunkering Services For the Six Months Ended June 30, 2025 2024 Variance - (Unaudited) (Unaudited) Increase (Decrease) $'000 $'000 $'000 % Revenue 275,440 357,350 (81,910 ) (22.9 ) Cost of revenues (271,627 ) (351,979 ) (80,352 ) (22.8 ) Gross profit 3,813 5,371 (1,558 ) (29.0 ) Gross profit margin 1.38 % 1.50 % (0.12 )% (7.9 ) Total metric ton sold (mt) 514,025 578,614 (64,589 ) (11.2 ) Average gross profit per metric ton $ 7.42 $ 9.28 $ (1.86 ) (20.0 ) We recorded a decrease of 29.0% in gross profit of bunkering services, or equivalent to $1.6 million, to $3.8 million for the six months ended June 30, 2025 from $5.4 million for the six months ended June 30, 2024. Our gross profit margin decreased marginally by 0.12%, to 1.38% for the six months ended June 30, 2025 from 1.50% for the six months ended June 30, 2024. The average gross profit per mt of oil cargo sold had decreased by approximately 20.0%, or equivalent to $1.86 per mt, to $7.42 per mt for the six months ended June 30, 2025 from $9.28 per mt for the six months ended June 30, 2024. This margin compression was largely due to elevated operating costs and sharp decline in demand for bunkering. Tariff-related delays and logistical disruptions increased transportation and handling expenses, while deferred tariff adjustments limited cost pass-through capabilities. Additionally, global oil demand softness and broader inflationary pressures narrowed the spread between selling prices and procurement costs, further eroding profitability. Ship Management Services Gross profit of ship management services was relatively stable, representing $169,761 for the six months ended June 30, 2025, up from $175,465 for the six months ended June 30, 2024. The slight decrease in gross profit margin primarily reflects the recognition of certain direct costs associated with technical management and agency services for the six months ended June 30, 2025. Selling and Marketing Expenses The selling and marketing expenses comprise marketing, advertising and business development expenses incurred by the sales and marketing team. Our selling and marketing expenses decreased by 19.1% or approximately $0.01 million, to $0.04 million for the six months ended June 30, 2025, down from $0.05 million for the six months ended June 30, 2024. The decrease was primarily attributable to a reversal of approximately $0.03 million in previously over provisioned marketing expenses, partially offset by an increase in spending of $0.04 million for business development for the six months ended June 30, 2025. General and Administrative Expenses The general and administrative expenses which increased by 8.8% or $0.2 million, to $3.3 million for the six months ended June 30, 2025 from $3.1 million for the six months ended June 30, 2024 comprise the following: For the Six Months Ended June 30, 2025 2024 Variance - (Unaudited) (Unaudited) Increase (Decrease) $'000 $'000 $'000 % Staff cost 1,505 1,174 331 28.2 Management fees 373 91 282 309.9 Professional fees 410 353 57 16.1 Leasing license 170 160 10 6.3 Others 872 1,283 (411 ) (32.0 ) Total general and administrative expenses 3,330 3,061 269 8.8 Staff cost increased by $0.3 million, to $1.5 million for the six months ended June 30, 2025, up from $1.2 million for the six months ended June 30, 2024. Without significant change in the number of overall headcounts, the increase was primarily due to annual salary adjustments and bonus payments during the six months ended June 30, 2025. In addition, approximately $0.07 million of directors' remuneration was incurred following our listing. Management fees paid to Straits Management Services Sdn. Bhd., a related company within the Straits Group, increased to $0.4 million for the six months ended June 30, 2025 from $0.1 million for the six months ended June 30, 2024. These fees cover overall group management and coordination services, encompassing but not limited to listing compliance and requirement, group consolidation and reporting, corporate governance, corporate secretarial, corporate finance, corporate banking, accounting, market and public relations to the subsidiaries of our Company. The increase was mainly due to a higher fee being charged for the six months ended June 30, 2025. Professional fees include statutory audit fees, tax fees, corporate secretarial fees, and legal fees. The professional fees remained relatively stable for the six months ended June 30, 2025, which mainly represented fee incurred in connection with our expenses related to investor relationship and a provision of audit fee for the consolidated financial statement. Corporations incorporated under Labuan Companies Act 1990 are required to pay an annual leasing license fee of $20,000 to Labuan Financial Services Authority (" LFSA "). As such, there was leasing license fee of $0.01 million each for the six months ended June 30, 2025 and 2024. In addition, $0.02 million and $0.01 million represents other license fees charged for the six months ended June 30, 2025 and 2024, respectively. The decrease in other general and administrative expenses for the six months ended June 30, 2025 primarily reflected the reduced in late charge in payment to suppliers driven by greater access to funding and implementation of our cost savings initiatives aimed at optimizing operational efficiency and reducing discretionary spending. Depreciation Depreciation represents the annual depreciation on the cost of Group's fleet of 15 vessels, dry-dock cost, tools, office equipment, computer hardware and software, motor vehicles, real property and furniture and fittings. The increase in depreciation by $0.3 million to $2.6 million for the six months ended June 30, 2025, up from $2.3 million for the six months ended June 30, 2024, was due to the addition of dry-dock cost which resulted in higher depreciation charges. Other (Expense) Income, net Interest Income Interest income decreased to $16,072 for the six months ended June 30, 2025 from $28,903 for the six months ended June 30, 2024. The decrease was primarily attributable to an adjustment recorded in respect of interest income relating to earlier periods during the six months ended June 30, 2024, with no corresponding adjustment in the six months ended June 30, 2025. Interest income was derived from principal sums approximating $0.1 million and $2.4 million placed with lender bank of Tumpuan Megah Development Sdn. Bhd. (" Tumpuan Megah ") as a term deposit and in a designated current account respectively. Sundry (Expense) Income For the Six Months Ended June 30, 2025 2024 Variance - (Unaudited) (Unaudited) Increase (Decrease) $'000 $'000 $'000 % (Loss) Gain on foreign exchange (1,496 ) 3,210 (4,706 ) (146.6 ) Miscellaneous income 721 19 702 3,694.7 Total sundry (expense) income (775 ) 3,229 (4,004 ) (124.0 ) Although the majority of our business activities are denominated in USD, the functional currencies of our five subsidiaries remain RM and SGD. As a result, foreign currency gains and losses arise when USD-denominated balances of these subsidiaries are remeasured into their respective functional currencies. We currently do not have a foreign currency hedging policy, as the USD generated from our revenue is sufficient to cover our USD purchases. However, we continue to monitor our foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. In the current state of RM and SGD strengthening against the USD, the weakening of the USD reduced the RM-equivalent and SGD-equivalent values of our USD-denominated cash balances, receivables and payables, resulting in a net foreign currency loss. We recorded a net foreign currency loss of $1.5 million for the six months ended June 30, 2025 as compared to net foreign currency gain of $3.2 million for the six months ended June 30, 2024. Miscellaneous income primarily comprises late payment interest income of $0.6 million from a related party, Straits, arising from late payment at an interest rate of 8.25%. Interest Expense Interest expense included interest on trade financing facilities granted to Tumpuan Megah, term loan interest and vessel vendor financing interest. The increase in interest expense by $0.8 million, to $2.8 million for the six months ended June 30, 2025, up from $2.0 million for the six months ended June 30, 2024, was due to a higher volume of trade financing facilities granted to Tumpuan Megah, which bear interest rates ranging from 5.75% to 7.75%. Provision For Income Taxes Cayman Islands Our Company was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, we are not subject to income, corporation or capital gains tax, and no withholding tax is imposed upon the payment of dividends. Malaysia Profits of Malaysian corporations incorporated under the Companies Act 2016 are subject to the prevailing corporate income tax rate at 24%, and this is applicable to SMF, TMD Marine Fuels Sdn. Bhd. and Tumpuan Megah. For corporations incorporated under the Labuan Companies Act 1990, that individually own each of our 15 vessels, their audited net profits are subject to the prevailing corporate income tax rate at 3%. Singapore For Singapore incorporated corporations, their prevailing corporate income tax rate is at 17% with the following partial tax exemption on its chargeable income: 1. 75% of its first chargeable income of SGD10,000; and 2. 50% of its next chargeable income of SGD190,000. With the aforementioned, our Group's effective tax rate was 19.7% for the six months ended June 30, 2024. For the six months ended June 30, 2025, the Group recorded an income tax benefit of $1.0 million, representing (i) current tax expenses of $0.08 million for the ended June 30, 2025; (ii) deferred tax income arising from temporary differences amounted to $0.07 million; and (iii) over-provision of income tax expenses of $1.0 million in FY2024 due to the change in our fiscal year end. For the Six Months Ended June 30, 2025 2024 Variance - (Unaudited) (Unaudited) Increase (Decrease) $'000 $'000 $'000 % Current Income Tax Based on result for the period 78 277 (199 ) (71.8 ) Over provision in prior periods (1,001 ) - (1,001 ) (100.0 ) (923 ) 277 (1,200 ) (433.2 ) Deferred Tax Reversal of temporary differences (65 ) - (65 ) 100.0 Under provision in prior periods - - - - (65 ) - (65 ) 100.0 Total income tax (benefit) expense (988 ) 277 (1,265 ) (456.7 ) With the change of fiscal year end from December 31 to June 30, the tax reporting period of Tumpuan Megah covered 18 months from January 1, 2024 to June 30, 2025. Given Tumpuan Megah recorded a net loss for the six months ended June 30, 2025, the tax loss position reduced the overall assessable profits for the full 18-month reporting period. As a result, the provision for income tax previously recognized for the year ended December 31, 2024 was overstated by $1.0 million. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Results of Operations The following table summarizes the results of our operations during the fiscal years ended December 31, 2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or (decrease) during such years. For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Revenues, net 688,430 632,790 55,640 8.8 Revenues - related party, net 178 290 (112 ) (38.6 ) Total revenues 688,608 633,080 55,528 8.8 Cost of revenues (671,616 ) (619,867 ) 51,749 8.3 Cost of revenues - related party (947 ) (1,123 ) (176 ) (15.7 ) Total cost of revenues (672,563 ) (620,990 ) 51,573 8.3 Gross profit 16,045 12,090 3,955 32.7 Operating expenses Selling and marketing expenses (40 ) (101 ) (61 ) (60.4 ) General and administrative expenses (5,249 ) (5,127 ) 122 2.4 Depreciation expenses (4,758 ) (4,257 ) 501 11.8 Total operating expenses (10,047 ) (9,485 ) 562 5.9 Income from operations 5,998 2,605 3,393 130.2 Other (expenses) income Interest income 52 10 42 420.0 Sundry income, net 2,022 3,321 (1,299 ) (39.1 ) Interest expenses (4,598 ) (2,203 ) (2,395 ) (108.7 ) Share of losses of associate (1 ) - (1 ) (100.0 ) Total other (expenses) income, net (2,525 ) 1,128 (3,653 ) 323.8 Income before income taxes 3,473 3,733 (260 ) (7.0 ) Income tax expenses (1,428 ) (774 ) 654 84.5 Net income 2,045 2,959 (914 ) (30.9 ) Less: income attributable to non-controlling interest (168 ) (963 ) (795 ) (82.6 ) Net income attributable to controlling interest 1,877 1,996 (119 ) (6.0 ) Other comprehensive income: Net income 2,045 2,959 (914 ) (30.9 ) Foreign currency translation adjustments 276 1,888 (1,612 ) (85.4 ) Total comprehensive income 2,321 4,847 (2,526 ) (52.1 ) Key Components of Results of Operations Revenues Our Group's revenue comprises of bunkering services, vessel chartering services and ship management services as tabulated below: Total Revenue Inter-Segment Revenue from Customers For the Years Ended December 31, For the Years Ended December 31, For the Years Ended December 31, Variance - Increase 2024 2023 2024 2023 2024 2023 (Decrease) $'000 $'000 $'000 $'000 $'000 $'000 $'000 % Analysis By Segment: Bunkering services 688,210 631,608 - - 688,210 631,608 56,602 9.0 Vessel chartering services 7,097 8,041 7,097 6,847 - 1,194 (1,194 ) (100.0 ) Ship management services 1,917 1,911 1,519 1,633 398 278 120 43.2 Total Revenue 697,224 641,560 8,616 8,480 688,608 633,080 55,528 8.8 Overall Our Group's overall revenue for FY2024 had increased by 8.8%, or equivalent to $55.5 million, to $688.6 million from $633.1 million achieved in FY2023 due to rise in contribution from the bunkering services segment, as it contributed more than 99% of our Group's revenue. The increase in revenue in FY2024 was primarily attributable to an increase in the volume of oil cargo bunkered of approximately 6.0%, from 933,418 metric ton in FY2023 to 989,512 metric ton in FY2024. Bunkering Services The increase in the bunkering services revenue by $56.6 million to $688.2 million in FY2024 from $631.6 million in FY2023 was substantially attributable to the increase of approximately 6.0% in volume of oil cargo bunkered, from 933,418 metric ton in FY2023 to 989,512 metric ton in FY2024. The increase in bunkered volume was driven by both our Group's ongoing efforts to meet customer demand through enhanced operational efficiency. In addition, we expanded our customer base in bunkering services from 90 customers in FY2023 to 101 in FY2024, which further contributed to the increase in bunkered volume and revenue. We also benefited from higher vessel capacity, as one of our vessels, previously chartered to a third party in FY2023, was redeployed to our bunkering fleet in July 2023 following the expiration of the charter contract to support the expansion of our oil bunkering operations. Vessel Chartering Services Our vessel chartering services segment previously generated revenue by chartering vessels to third parties. There was no revenue from third parties related to vessel chartering services in FY2024, compared to $1.2 million in FY2023, as our Group temporarily discontinued the segment after the chartering contract expired in July 2023. The vessel was subsequently redeployed to our bunkering fleet to support the growth of our oil bunkering operations. Ship Management Services Our ship management services, supported by a competent team of qualified professional mariners, also managed third-party vessels, including tugboats used in the port and STS operations that are owned by other subsidiaries within the Straits Group, which are outside our Group. The ship management services remained steady, generating approximately $0.4 million and $0.3 million in FY2024 and FY2023, respectively. Cost of revenues Our cost of revenues represent direct expenses incurred to generate revenue. These costs are recorded and accrued as incurred. The cost of revenues primarily comprise oil cargo cost, along with other bunkering operation costs such as bunker own used, port charges, crew wages and consumables, transport costs and agency fees. It also includes vessel operation-related costs, such as vessel consumables, insurance, general upkeep and repair costs. Its major cost components are as follow: For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Oil cargo sold 656,864 606,451 50,413 8.3 Bunker own used 4,011 4,439 (428 ) (9.6 ) Crew wages 3,550 3,481 69 2.0 Other operating cost 8,138 6,619 1,519 22.9 Total cost of revenues 672,563 620,990 51,573 8.3 Our overall cost of revenues increased by 8.3%, or equivalent to $51.6 million, to $672.6 million for FY2024 from $621.0 million for FY2023, representing 97.7% and 98.1% of our total revenue respectively. This increase was in line with the growth in the volume of cargo bunkered, with oil cargo costs rising to $656.9 million in FY2024 from $606.4 million in FY2023. In addition, other operating costs increased to $8.1 million in FY2024 from $6.6 million in FY2023, primarily due to higher vessel maintenance and bunkering loading costs. Gross Profit and Gross Profit Margin Overall For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Revenue 688,608 633,080 55,528 8.8 Cost of revenues (672,563 ) (620,990 ) (51,573 ) (8.3 ) Gross profit 16,045 12,090 3,955 32.7 Gross profit margin 2.33 % 1.91 % 0.42 % 22.0 As a result of the foregoing, we recorded an overall increase of 32.7% in gross profit, or equivalent to $3.9 million, to $16.0 million for FY2024 from $12.1 million in FY2023. Nevertheless, our gross profit margin increased marginally by 0.42% to 2.33% in FY2024 from 1.91% in FY2023 due to improved margins in our oil bunkering services. Bunkering Services For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Revenue 688,210 631,608 56,602 9.0 Cost of revenues (672,563 ) (620,610 ) 51,953 8.4 Gross profit 15,647 10,998 4,649 42.3 Gross profit margin 2.27 % 1.74 % 0.53 % 30.5 Total metric ton sold (mt) 989,512 933,418 56,094 6.0 Average gross profit per metric ton $ 15.81 $ 11.78 $ 4.03 34.2 We recorded an increase of 42.3% in gross profit of bunkering services, or equivalent to $4.6 million, to $15.6 million in FY2024 from $11.0 million in FY2023. Our gross profit margin increased marginally by 0.53% to 2.27% in FY2024 from 1.74% in FY2023. The average gross profit per metric ton of oil cargo sold had increased by approximately 34.2%, or equivalent to $4.03 per mt, to $15.81 in FY2024 from $11.78 in FY2023. This improvement was attributable to our strategic focus on penetrating new markets and expanding our customer base contributed to higher sales volumes. We successfully attracted new customers while maintaining strong relationships with existing buyers. Through maintaining a steady demand, we optimized resource usage and lowered the overall cost of providing services for FY2024. In addition, the increase in bunkering activities, which led to higher operational efficiencies, enabling us to leverage economies of scale and optimize our cost structure. Vessel Chartering Services For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Revenue - 1,194 (1,194 ) (100.0 ) Cost of revenues - (380 ) 380 100.0 Gross profit - 814 814 100.0 Gross profit margin - 68.2 % (68.2 )% (100.0 ) We recorded a decrease in gross profit of vessel chartering services to nil in FY2024, down from $0.8 million in FY2023. Our gross profit margin decreased to nil in FY2024 from 68.2% in FY2023. The drop in gross profit of vessel chartering services was due to our Group redeployed the chartered vessel to our bunkering fleet of vessels to meet the growing demand for our bunkering services following the expiration of the charter contract in July 2023. Ship Management Services Gross profit of ship management services increased to $ 0.4 million in FY2024, from $0.3 million in FY2023, remaining relatively stable. Selling and Marketing Expenses The selling and marketing expenses comprise marketing travelling and advertising expenses incurred by the sales and marketing team. Our selling and marketing expenses decreased by 60.4% or approximately $0.06 million, to $0.04 million in FY2024, down from $0.1 million in FY2023, due to cost-saving plan on marketing expenses in FY2024. General and Administrative Expenses The general and administrative expenses which increased by 2.4% or $0.1 million, to $5.2 million in FY2024 from $5.1 million in FY2023 comprise the following: For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Staff cost 2,300 2,266 34 1.5 Management fees 499 487 12 2.5 Professional fees 424 415 9 2.2 Leasing license 300 300 - - Vessel deposit written off - 273 (273 ) (100.0 ) Impairment/ assets written off 71 (5 ) 76 1,520.0 Others 1,655 1,391 264 19.0 Total general and administrative expenses 5,249 5,127 122 2.4 Staff cost increased by $0.03 million to $2.30 million in FY2024, up from $2.27 million in FY2023. This was mainly due to higher staff-related costs and the recruitment of a senior management member for a subsidiary, Straits Marine Services Pte. Ltd. in FY2024. This increase was partially offset by the adjustment for the over-provision of staff and director bonuses for FY2023 in Tumpuan Megah. Management fees are paid to Straits Management Services Sdn. Bhd., a related company within the Straits Group, remained stable at $0.5 million in both FY2024 and FY2023. These fees cover overall group management and coordination services, encompassing but not limited to listing compliance and requirement, group consolidation and reporting, corporate governance, corporate secretarial, corporate finance, corporate banking, accounting, market and public relations to the subsidiaries of our Company. Professional fees include statutory audit fees, tax fees, corporate secretarial fees, and legal fees. The increase in professional fees for FY2024 was due to legal expenses incurred in connection with securing additional trade facilities from local financial institutions. Corporations incorporated under Labuan Companies Act 1990 are required to pay an annual leasing license fee of $20,000 to Labuan Financial Services Authority (" LFSA "). As such, there was leasing license fee of $0.3 million each in FY2024 and FY2023. We paid a deposit of approximately $0.3 million in FY2020 for the purchase of a vessel. However, the deposit was written off during FY2023 as the vendor became uncontactable after the COVID-19 Pandemic, and the vessel was not maintained and was in a deplorable condition. We have taken the necessary action in our attempts to recover the deposit paid. The significant change under impairment was mainly due to an allowance for expected credit loss of our accounts receivable amounted to $0.07 million in FY2024. The increase in other general and administrative expenses mainly represented (i) an increase in environmental, social, and governance activities payable to a related party, Benua Hijau Sdn. Bhd., an entity owned by a controlling shareholder, amounting to $0.1 million; (ii) an increase of $0.1 million in bank charges for issuing $6.5 million in bank guarantees to suppliers; and (iii) an increase in operating costs, such as insurance and travelling expenses, amounting to $0.05 million due to the expansion of business. Depreciation Depreciation represents the annual depreciation on the cost of Group's fleet of 15 vessels, dry-dock cost, tools, office equipment, computer hardware and software, motor vehicles, real property and furniture and fittings. The increase in depreciation by $0.5 million to $4.8 million in FY2024, up from $4.3 million in FY2023, was due to the addition of dry-dock cost incurred during the year. Other Income, net Interest Income Interest income increased to $0.05 million in FY 2024 from $0.01 million in FY2023. The increase arises from approximately $0.04 million which consists of principal sums approximating $0.1 million and $2.0 million placed with lender bank of Tumpuan Megah as a term deposit and in a designated current account respectively. Sundry Income For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Gain on foreign exchange 1,415 2,982 (1,567 ) (52.5 ) Cancellation fees - 230 (230 ) (100.0 ) Fair value adjustments - 46 (46 ) (100.0 ) Miscellaneous income 607 63 544 863.5 Total sundry income 2,022 3,321 (1,299 ) (39.1 ) Our business activities are substantially denominated in USD, while our assets and liabilities are denominated in our functional currency. We currently do not have a foreign currency hedging policy, as the USD generated from our revenue is sufficient to cover our USD purchases. However, we continue to monitor our foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arise. In the current state of RM strengthening against the USD, we recorded a lower net foreign currency gain of $1.4 million for FY2024 as compared to $3.0 million for FY2023. Cancellation fees are received from customers who cancelled their purchase of oil cargo. There was no cancellation fee recorded in FY2024. A fair value adjustment of approximately $0.1 million was made in FY2022 on a debt due from the vendor of Tumpuan Megah. Approximately $0.05 million of this impairment was written back in FY2023 following subsequent payment from the vendor. The debt was related to legal fees for a legal case involving Tumpuan Megah prior to the acquisition of Tumpuan Megah by Straits in 2018. The debt currently stood at approximately $1.8 million of which $0.8 million was being repaid through a repayment plan spanning a period beyond 12 months commencing from April 2023 till March 2027. No adjustment was made in FY2024. Miscellaneous income includes interest income of $0.4 million from related party, Straits on late payment with interest rate at 8.25%. In addition, there was a $0.2 million adjustment related to the previously recognized value of the acquisition of SMF. Interest Expense Interest expense included interest on trade financing facilities granted to Tumpuan Megah, term loan interest and vessel vendor financing interest. The increase in interest expense by $2.4 million to $4.6 million in FY2024, up from $2.2 million in FY2023, was due to a higher volume of trade financing facilities granted to Tumpuan Megah, which bear interest rates ranging from 5.82% to 8.25%. Provision For Income Taxes Cayman Islands Our Company was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, we are not subject to income, corporation or capital gains tax, and no withholding tax is imposed upon the payment of dividends. Malaysia Profits of Malaysian corporations incorporated under the Companies Act 2016 are subject to the prevailing corporate income tax rate of 24%, and this is applicable to SMF, TMD Marine Fuels Sdn. Bhd. and Tumpuan Megah. For corporations incorporated under the Labuan Companies Act 1990, that individually own each of our 15 vessels, their audited net profits are subject to the prevailing corporate income tax rate of 3%. Singapore For Singapore incorporated corporations, their prevailing corporate income tax rate is at 17% with the following partial tax exemption on its chargeable income: 3. 75% of its first chargeable income of SGD10,000; and 4. 50% of its next chargeable income of SGD190,000. With the aforementioned, our Group's effective tax rate was 41.1% for FY2024 and 20.7% for FY2023. The increase in income tax expenses in FY2024 was primarily due to higher gross profit from our bunkering services, which led to increased operating income. In addition, certain bank charges and professional fees incurred in relation to bank facilities were non-deductible for tax purposes. Furthermore, a non-taxable exchange gain of approximately $2.5 million reduced chargeable income in FY2023, whereas a non-deductible exchange loss of approximately $0.5 million increased chargeable income in FY2024. The reduction in non-taxable income further contributed to the increase in chargeable income for FY2024. Consequently, higher tax expenses and an increased effective tax rate were observed in FY2024. No deferred tax was recognized in FY2024 after the crystallization of deferred tax liabilities arising from assets controlled transfer to Labuan companies. For the Years Ended December 31, Variance - 2024 2023 Increase (Decrease) $'000 $'000 $'000 % Current Income Tax Based on result for the year 1,458 698 760 108.9 (Over) Under provision in prior years (30 ) 168 (198 ) (117.9 ) 1,428 866 562 64.9 Deferred Tax Reversal of temporary differences - (88 ) 88 100.0 Over provision in prior years - (4 ) 4 100.0 - (92 ) 92 100.0 Total income tax expense 1,428 774 654 84.5 5.B. Liquidity and Capital Resources We are exposed to liquidity risk, which is the risk that we may encounter difficulties in meeting our financial obligations as they become due. We manage this risk by maintaining adequate levels of cash and cash equivalents, monitoring cash flows, and maintaining access to financing sources. As of June 30, 2025, we had net working capital deficit of $8.7 million and a net loss of $4.5 million. Despite this, we believe that we can meet all our financial obligations as they become due in the foreseeable future. This conclusion is based on a detailed assessment of our financial position, forecast, and plans up to the date of approval of these financial statements. Key considerations in this assessment include: ● We maintained cash and cash equivalents of $7.1 million as of June 30, 2025. ● Our strong payment track record and long-standing relationships suggest that trade facilities amounting to approximately $91.8 million and supplier purchasing limits of $11.2 million will be available for the next 12 months. ● As of June 30, 2025, we had balances of available trade facilities amounting to $7.6 million to support our operational needs. ● We entered into a repayment plan with major debtors covering approximately $15.0 million, with scheduled monthly repayments from June 2025 to May 2026, which are expected to provide additional liquidity. Prior to the consummation of our initial public offering on April 22, 2025, our principal sources of liquidity to finance our operating activities were from the working capital, trade financing from financial institutions, suppliers credit financing and cash generated from business operation. On April 22, 2025, we consummated our initial public offering on the NYSE American. In this offering, 3,100,000 ordinary shares were issued at a price of $3.25 per share. In addition, we entered into an underwriting agreement with the underwriter on April 21, 2025, which granted the underwriter a 45-day option to purchase up to an additional 465,000 ordinary shares at the public offering price of $3.25 per share to cover any over-allotment. Subsequently, on April 22, 2025, the underwriter exercised the over-allotment option in full, purchasing an additional 465,000 ordinary shares at the public offering price of $3.25 per share. The initial public offering closed on April 22, 2025 and the exercise of the over-allotment option closed on April 24, 2025, with gross proceeds totaling $11.59 million, before deducting underwriting discounts and offering expenses. We believe that our existing cash resources, anticipated cashflow from operations, anticipated cash raised from financing together with net proceeds from our public offering will be sufficient to meet and fund our anticipated operation working capital and capital expansion requirements for the next 12 months from the date of this transition report. If we experience an adverse operating environment or incur unanticipated capital expenditure requirements, or if we determine to accelerate our growth, then additional financing may be required. No assurance can be given, however, that such financing would be available at all or on favorable terms. Additional financing may include the use of debt, credit facilities from financial institutions, or the sale of equity or instruments convertible into equity securities, whether by our Group or its holding company. Any issuance of additional equity could result in immediate and possibly significant dilution to our existing shareholders, while incurrence of debt would increase fixed obligations and bring along operating covenants that could restrict our operations. As at June 30, 2025, our cash and cash equivalents were approximately $7.1 million, comprising primarily in cash and cash equivalent. Cash Flows and Working Capital The following table sets forth a summary of our cash flows for the six months ended June 30, 2025 and 2024 and the years ended December 31, 2024 and 2023. The amounts presented below for the six months ended June 30, 2025 and the year ended December 31, 2024 have been revised to correct certain immaterial classification errors within the consolidated statements of cash flows. See Note 2, "Summary of Significant Accounting Policies," to the consolidated financial statements for further details. For the Six Months Ended June 30, For the Years Ended December 31, 2025 2024 2024 2023 (Unaudited) (Unaudited) (Audited) (Audited) $'000 $'000 $'000 $'000 (Revised) (Revised) Net cash (used in) provided by operating activities (20,251 ) (42,896 ) (24,290 ) 654 Net cash used in investing activities (8,341 ) (1,942 ) (16,006 ) (3,148 ) Net cash provided by (used in) financing activities 19,023 45,136 50,900 (2,489 ) Net (decrease) increase in cash and restricted cash (9,569 ) 298 10,604 (4,983 ) Effect of exchange rates on cash and restricted cash 559 860 636 (1,456 ) Cash and restricted cash, beginning of period / year 16,070 4,830 4,830 11,269 Cash and restricted cash, end of period / year 7,060 5,988 16,070 4,830 Operating Activities Our cash inflow from operating activities was principally from collections of revenue. Our cash outflows used in operating activities was principally for payment of oil cargo purchased, operating expenses, staff cost and general administrative expenses. The net cash used in operating activities for the six months ended June 30, 2025 was $20.3 million, after adjusting for non-cash item which includes: i. $2.6 million in depreciation charges for the six months ended June 30, 2025. The increase in depreciation charges was due to additional capital expenditure incurred on docking expenditure for the six months ended June 30, 2025. Meanwhile, the changes for the six months ended June 30, 2025 working capital were mainly attributable by the following operating assets and liabilities: i. Increase in accounts receivable by $6.6 million due to the implementation of our accounts receivable repayment plan, in which installment agreements were established with customers for repayment of outstanding balances. In addition, slower collections from customers were observed for the six months ended June 30, 2025, primarily due to delays in cargo movement and the ongoing tariff situation. These disruptions affected delivery schedules and invoicing cycles, which in turn strained customer cash flows and extended payment timelines; ii. Lower inventory levels were maintained amid market instability for the six months ended June 30, 2025, resulting in a decrease of $2.5 million; iii. Increase in other receivables and current assets by $11.9 million, mainly due to advance payments related to marketing and business development activities of and a vessel deposit paid for sourcing target vessel amounting to total of $6.1 million. In addition, advance payments were made to suppliers for purchase of cargo oil increased by $3.7 million; and iv. Decrease in income tax payable of $1.8 million as the operating entity, Tumpuan Megah, incurred a net loss for the six months ended June 30, 2025 which reduced the current tax expense and related tax payable. The net cash used in operating activities for the six months ended June 30, 2024 was $42.9 million, after adjusting for non-cash item which includes: i. $2.3 million in depreciation charges for the six months ended June 30, 2024. The increase in depreciation charges was due to additional capital expenditure incurred for the six months ended June 30, 2024. Meanwhile, the changes in working capital for the six months ended June 30, 2024 were mainly attributable by the following operating assets and liabilities: i. Decrease in accounts receivable by $2.3 million as we had established a repayment installment agreement with a customer for his repayment of the outstanding balance and hence leading to reduction in account receivables; ii. The decrease in inventory was mainly due to the increase in the volume cargo bunkered, resulting a lower inventory level at period end; iii. Increase in other receivables and current assets by $5.7 million was substantially due to advance payment amounting to $3.3 million in anticipation of higher demand by customers in coming months. There was a further $1.2 million pledged to a supplier for an additional $7.0 million in credit limit and $0.6 million in deferred IPO expenses; iv. Decrease in accounts payable by $29.7 million as payment to suppliers were made through trade financing facilities which had increased by $46.5 million; and v. Increase in due from related parties by $4.5 million was attributable to working capital advances to related parties. The net cash used in operating activities for FY2024 was $24.3 million, after adjusting for non-cash item which includes: i. $4.8 million in depreciation charges for FY2024. The increase in depreciation charges was due to additional capital expenditure incurred on docking expenditure in FY2024. Meanwhile, the changes in FY2024 working capital were mainly attributable by the following operating assets and liabilities: i. Decrease in accounts receivable by $2.8 million as the collection of accounts receivable had improved due to our successful repayment plan implementation, in which we established a repayment installment agreement with a customer for the repayment of the outstanding balance and hence leading to a reduction in account receivables; ii. The increase in the bunkered cargo volume and the implementation of improved inventory control, resulting in a lower inventory level maintained in FY2024 by $6.5 million; iii. Decrease in other receivables and current assets by $5.1 million, mainly due to advance payments being utilized to settle previous secured orders with the increase in bunkering services. In addition, $1.3 million was paid for deferred IPO expenses; and iv. Decrease in accounts payable and accrued expenses by $45.3 million following the acquisition of new bank facilities to support our operations. This enabled the settlement of accounts payable and advance payments for cargo expenses, thus reduced accrued expenses. The net cash provided by operating activities for FY2023 was $0.7 million, after adjusting for non-cash items which includes: i. $4.3 million in depreciation charges for FY2023. The increase in depreciation charges was due to additional capital expenditure incurred during the year and the full effect of previous year's capital expenditure incurred, as disclosed under the investing activities' cash flow below; and ii. Reversal of deferred tax of $0.1 million as the vessels were transferred from Tumpuan Megah to the respective Labuan companies as part of our risk management strategy and practices, representing the transfer of one vessel in FY2023. Meanwhile, the changes in FY2023 working capital were mainly attributable to the following operating assets and liabilities: i. Increase in accounts receivable by $15.6 million as we extended our credit terms to garner higher cargo volumes despite the drop in overall revenue which was due to lower global cargo prices; ii. The conversion of a water barge into a bunker vessel and cessation of the chartering out of a vessel in FY2023 to meet increasing fuel cargo demand enabled us to increase our inventory holding by $6.0 million; iii. Increase in other receivables and current assets by $9.5 million was substantially due to advance payment amounting to $6.2 million in anticipation of higher demand by customers subsequent to year end. There was also a further $2.2 million pledged to a supplier for an additional $7.0 million in credit limit and $0.6 million in deferred IPO expenses; and iv. Increase in accounts payable by $19.3 million, aligned with an increase of 54.0% of sales to approximately $24.0 million in the month of December 2023 as compared to the month of December 2022 and an increase in accrued expenses by $6.4 million due to deferring supplier payment for cargo oil procurement in response to the higher sales in December 2023. Investing Activities Our cash flow used in investing activities mainly comprised advances of $6.2 million made to our related parties for the six months ended June 30, 2025. In addition, we incurred dry-dock expenditures amounted to $1.7 million and $1.8 million for the six months ended June 30, 2025 and 2024, respectively. The dry-dock activities are necessary to maintain our fleet of vessels in good performing conditions to ensure smooth bunkering operation apart from complying with the strict and stringent operation procedures and requirements of our suppliers and loading terminals. These spendings are financed by our internally generated funds. Our cash flow used in investing activities mainly comprised advance s of $12.2 million to our related parties in FY2024. In addition, we incurred dry-dock expenditures amounted to $3.8 million and $3.1 million in FY2024 and FY2023, respectively. The dry-dock activities are necessary to maintain our fleet of vessels in good performing conditions to ensure smooth bunkering operation apart from complying with the strict and stringent operation procedures and requirements of our suppliers and loading terminals. These spendings are financed by our internally generated funds. Financing Activities Our cash flow provided by financing activities amounted to $19.0 million for the six months ended June 30, 2025. It mainly represented proceeds from issuance of common shares pursuant to IPO amounted to $11.6 million, as well as net borrowings of $7.4 million, representing trade facilities obtained from local financial institutions and repayment of our vessel vendors who provided vendor-financed borrowing for vessel acquisitions. Our cash flow provided by financing activities amounting to $45.1 million for the six months ended June 30, 2024 was mainly from the drawdown of trade financing facilities from the local financial institutions to repay our payables and our vessel financing vendors who had provided us vendor financing borrowing in our acquisition of their vessels. The net drawdown and repayment to the borrowings was approximately of $45.3 million for the six months ended June 30, 2024. Our cash flow provided by financing activities amounted to $50.9 million for FY2024. It represented proceeds from borrowings obtained through additional trade facilities from banks, offset by repaying our vessel vendors who provided vendor-financed borrowing for vessel acquisitions. Our cash flow used in financing activities amounted to $2.5 million for FY2023, representing a net amount of $2.8 million in repayment to our vessel vendors who provided vendor-financed borrowing for vessel acquisitions. In addition, we received proceeds totaling $0.3 million from our related parties. Contractual obligations and Contingencies In the normal course of our business, we are subject to contingencies, such as legal proceedings and claims arising out of our business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. As of the date of this transition report, we did not have any loss contingencies which require to be recognized or disclosed in our consolidated financial statements. As of June 30, 2025, our contractual obligations were as follows: Less than 1 year Between 1-2 years Over 3 years Total Contractual obligations $ $ $ $ Finance lease commitment 14,758 29,516 29,104 73,378 Operating lease commitment 26,833 14,695 - 41,528 Repayment of loan borrowings 409,025 62,655 462,493 934,173 450,616 106,866 491,597 1,049,079 Analysis of items with major changes on the unaudited consolidated balance sheets as at June 30, 2025 and December 31, 2024 As of June 30, 2025 December 31, 2024 (Unaudited) (Audited) $'000 $'000 ASSETS Current Assets Cash and cash equivalents 7,060 16,070 Accounts receivable, net 28,372 20,322 Inventories, net 7,627 9,667 Due from related parties 17,993 11,593 Other receivables and current assets 30,959 20,207 Income tax recoverable 1,003 - Total current assets 93,014 77,859 Non-Current Assets Property, plant and equipment, net 31,733 32,133 Investments, net 90 89 Operating lease right of use asset (" ROU asset "), net 38 17 Deferred tax assets, net 67 - Total Non-Current Assets 31,928 32,239 Total Assets 124,942 110,098 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses 7,057 7,426 Other payables 1,403 1,503 Short-term loans 91,807 79,269 Due to related parties 1,024 627 Taxes payable - 774 Operating lease liabilities - current portion 24 9 Long-term debt payable - current portion 409 777 Finance lease payable - current portion 12 11 Total current liabilities 101,736 90,396 Non-Current Liabilities Operating lease liabilities - non-current 14 8 Long term debt payable 525 504 Finance lease payable 54 57 Total Non-Current Liabilities 593 569 Total Liabilities 102,329 90,965 Shareholders' Equity Ordinary share, par value $0.0001 per share; 500,000,000 shares authorized; 23,565,000 and 20,000,000 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 2 2 Additional paid-in capital 12,732 4,635 Retained earnings 8,274 12,582 Accumulated other comprehensive income 578 664 Total equity attributable to equity holders' of TMD Energy Limited 21,586 17,883 Non-controlling interests 1,027 1,250 Total Equity 22,613 19,133 Total Liabilities and Shareholders' Equity 124,942 110,098 Cash and Cash Equivalents Cash and cash equivalents represent cash on hand and balances in bank accounts, including fixed deposits pledged for banking facilities. The decrease in cash and cash equivalents was primarily driven by an increase in accounts receivable, advances to suppliers and related parties, and deposits paid for sourcing a target vessel, partially offset by proceeds from our initial public offering. Accounts Receivable, Net Accounts receivable mainly arise from our bunkering services. The increase in receivables was due to the repayment installment agreement established with customers and slower payments from our customers as they were affected by the delays in cargo shipments and tariff crisis. Inventory, Net Inventory consists of marine gas oil (" MGO ") and low sulfur fuel oil (" LSFO ") held for sale, as well as bunker fuel for vessel operations. The vessels primarily use MGO as bunker fuel. The decrease in inventory was mainly due to lower sales resulting in reduced stock on hand and fewer purchases to maintain appropriate inventory levels. Due From (To) Related Parties This represents transactions occurring in the ordinary course of business, as well as advances provided to or received from related parties to support the Group's operational activities. The increase was primarily attributable to an advance to Straits, part of which were unsecured, interest bearing at 8.25% and had no fixed repayment terms. Other Receivables and Current Assets These include advance payments, supplier deposits for trade purposes, and deferred offering costs. Supplier deposits were pledged to secure purchase credit limits and refundable only upon termination of the credit limit or offsetting against outstanding supplier balances. The increase was due to advance payments made to suppliers for marketing and business development activities, as well as deposit paid for sourcing target vessels. For the six months ended June 30, 2025, deferred offering costs were charged to shareholder's equity after the completion of initial public offerings. Property, Plant and Equipment, Net Property, plant, and equipment, net, comprise vessels, docking fees, tools, equipment, and other assets. The decrease in property, plant and equipment, net was primarily attributable to the increase in accumulated depreciation, which outpaced additions in docking expenditures associated with our bunkering operations. Accounts Payable and Accrued Expenses With the availability of greater access to funding, we were enabled to place advance payments with suppliers, ensuring a smoother procurement process and securing orders ahead of schedule, resulting in a decrease in our accounts payable and accrued expenses. Short-term Loans Short-term loans represent trade facilities granted by various banking institutions to finance the purchase and importation of goods essential for our business operations. We successfully obtained additional trade facilities to meet our operational needs, ensuring adequate funding for timely supplier payments. Long Term Liabilities These consist of long-term debt used to finance leasehold properties, vessels, and motor vehicles. The decrease in long-term liabilities was mainly due to the repayment of a vessel installment loan, with no additional long-term debt incurred for the six months ended June 30, 2025. Capital Expenditures We had a capital expenditure of $2.1 million, $3.8 million and $3.1 million for the six months ended June 30, 2025, FY2024 and FY2023 respectively. These were financed through funds generated from operations. Capital Commitments As at June 30, 2025, there was no material capital expenditures or purchase commitment to acquire vessels. Should there arise a need to expand the existing fleet of vessels, we will seek financing from financial institutions or vendors of vessels with an extended long term payment schedule. 5.C. Research and Development, Patent and Licenses, etc. Not applicable. The Company has not undertaken any Research and Development activities in the past three years. 5.D. Trend Information Other than as disclosed elsewhere in this transition report, we are not aware of any trends, uncertainties, demands, commitments, or events for the six months ended June 30, 2025 that are reasonably likely to have a material and adverse effect on revenues, income, profitability, liquidity, or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial condition. 5.E. Critical Accounting Estimates We prepare our unaudited consolidated financial statement in accordance with U.S. GAAP, which requires us to make judgement, estimation and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during each reporting period. We continually evaluate these judgements, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information, which together form our basis for making judgements about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from these estimates. Some of our accounting policies require a higher degree of judgment than others in their application. The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) allowance for doubtful accounts; (iii) impairment of long-lived assets; (iv) leases; and (v) income taxes. See Note 2 - Significant Accounting Policies to our unaudited consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements. Revenue Recognition We adopted ASC Topic 606, Revenue from Contracts with Customers (" ASC 606 ") for all years presented. The core principle of this new revenue standard is that a company should recognize revenue when control of the promised goods or services is transferred to the customers, in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle by us in our determination of revenue recognition: (1) identification of the contract, or contracts, with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, the company satisfy a performance obligation. We derived our revenues from a diverse range of maritime services provided to clients within the industry. 1. Sales of cargo oil and fresh water, and bunkering facilitation Revenue generated from sales of cargo oil and fresh water, and bunkering facilitation involves the procurement and delivery of marine gas oil, low sulfur fuel oil, and fresh water for delivery to customers' ships. We recognize revenues at a point in time when cargo oil and fresh water have been delivered and accepted by the customer, indicating fulfillment of the performance obligation. Sales of cargo oil and fresh water, and bunkering facilitation are not capable of being a distinct and separately identifiable. The performance obligation is only considered satisfied when sales of cargo oil and fresh water and bunkering facilitation are completed simultaneously. 2. Vessel chartering services Revenue generated from vessel chartering services involves arranging charters for marine transportation for various purposes such as cargo transportation or offshore operations. We recognize revenues over time based on the time elapsed between the delivery of a vessel to a charterer and the return of a vessel from the charterer and invoicing is done on a monthly basis. 3. Ship management services Revenue from ship management services involves providing technical management, crew management, marine consultancy, and shipping services. We recognize revenues at a point in time when services are rendered and accepted by customer indicating fulfillment of the performance obligation. We considered as a principal for all the revenues we generate above as we are directly involved in the procurement, delivery, and provision of the goods and services to customers. As the principal, we assume the risks and rewards associated with the transactions, including responsibility for fulfilling the performance obligations and bearing any associated costs and risks, bears the risk of loss or damage to inventory, bears the credit risk associated with customers' ability to pay for the goods or services. Therefore, we recognize revenue at the gross amount. Credit Losses on Financial Instruments The Company recognizes credit losses on financial instruments in accordance with ASC Topic 326, Financial Instruments - Credit Losses. The Company uses the Current Expected Credit Losses (" CECL ") model to estimate credit losses on financial assets measured at amortized cost, as well as certain off-balance sheet credit exposures. Under the CECL model, the estimation of credit losses involves significant judgment and estimation uncertainty. Management exercises its judgment based on historical loss experience, current economic conditions, and reasonable and supportable forecasts. Changes in these factors could have a material impact on the estimated credit losses. The Company has evaluated its account receivables and recognized a credit loss of $807, $69,474 and $nil for the six months ended June 30, 2025 and the years ended December 31, 2024 and 2023 respectively. Recent accounting pronouncements See the discussion of the recent accounting pronouncements contained in Note 2 to the unaudited consolidated financial statements, "Summary of Significant Accounting Policies". ITEM 8. FINANCIAL INFORMATION 8.A. Consolidated Statements and Other Financial Information We have appended the consolidated financial statements filed as part of this Transition Report. 8.B. Significant Changes No significant change has occurred since the date of our consolidated financial statements filed as part of this Transition Report. PART II. ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES None. ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 14.E. Use of Proceeds On March 31, 2025, the registration statement (File No. 333-283704) (the " Registration Statement ") relating to the Company's IPO was declared effective by the SEC. In connection therewith, the Company entered into an underwriting agreement with Maxim Group LLC, dated April 21, 2025. On April 22, 2025, the Company consummated the IPO of 3,100,000 ordinary shares, par value $0.0001 per share at a price of $3.25 per share (the " Offering Price "), pursuant to the Underwriting Agreement. The underwriters were granted a 45-day option to purchase up to additional 465,000 ordinary shares to cover over-allotments, if any. The underwriters exercised their over-allotment option fully on April 22, 2025, the underwriters purchased an additional 465,000 ordinary shares at the Offering Price. The IPO (including the sale of the Ordinary Shares to cover over-allotment) generated gross proceeds to the Company of approximately $11.59 million. We incurred a total of $1.25 million listing expenses and the net offering proceeds to us after deducting the total expenses was $10.34 million. As at the date of this Transition Report, we had utilized 55%, 29% and 16% of the IPO proceeds for purchase of cargo, listing expenses and general and corporate expenses respectively. PART III ITEM 17. FINANCIAL STATEMENTS We have elected to provide financial statements pursuant to Item 18. ITEM 18. FINANCIAL STATEMENTS On May 16, 2025, the Company announced the change of fiscal year end from December 31 to June 30, with effect from May 16, 2025. This change is being made to better align the fiscal year end of its holding company, Straits which has changed its fiscal year end from December 31 to June 30. As a result, the Company is required to file this Transition Report for the transition period, which is the six-month period from January 1, 2025 to June 30, 2025. After filing the Transition Report, the Company's next fiscal year end will be June 30, 2026. We have appended the consolidated financial statements filed as part of this Transition Report. The financial statements have not been audited by, J&S Associate PLT, the Company's independent registered public accounting firm. ITEM 19. EXHIBITS Exhibit No. Description of Exhibit 1.1** Amended and Restated Memorandum and Articles of Association of the Company (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 6-K filed with the Securities and Exchange Commission on April 23, 2025). 2.1** Specimen certificate evidencing Ordinary Shares (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025). 4.1** Underwriting Agreement dated April 21, 2025 (incorporated by reference to Exhibit 1.1 to the Company's Current Report on Form 6-K filed with the Securities and Exchange Commission on April 23, 2025). 4.2** Form of Director Agreement (incorporated by reference to Exhibit 10.1 to the Company's Registration Statement on Form F-1 (Registration No. 333-283704 ) filed with the Securities and Exchange Commission on February 27, 2025). 4.3** Form of Executive Officer Agreement (incorporated by reference to Exhibit 10.2 to the Company's Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025). 4.4** Form of Independent Director Agreement (incorporated by reference to Exhibit 10.3 to the Company's Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025). 8.1** List of subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to the Company's Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025). 11.1** Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 to the Company's Registration Statement on Form F-1 (Registration No. 333-283704) filed with the Securities and Exchange Commission on February 27, 2025). 11.2** Insider Trading Policy 12.1* CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 12.2* CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 13.1* CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 13.2* CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97** Clawback Policy 99.1* Regulations that may affect our business activities. 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed with this Transition Report. ** Previously filed. SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on the Transition Report on Form 20-F and that it has duly caused and authorized the undersigned to sign this Transition Report on its behalf. TMD Energy Limited By: /s/ Dato' Sri Kam Choy Ho Name: Dato' Sri Kam Choy Ho Title: Director and Chief Executive Officer Date: May 15, 2026 INDEX TO FINANCIAL STATEMENTS TMD ENERGY LIMITED TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 (Audited) F-3 Consolidated Statements of Operations and Comprehensive (Loss) Income for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December 31, 2024 and 2023 (Audited) F-4 Consolidated Statements of Changes in Shareholders' Equity for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December 31, 2024 and 2023 (Audited) F-5 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 (Unaudited) and the Years Ended December 31, 2024 and 2023 (Audited) F-6 Notes to Unaudited Consolidated Financial Statements for the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023 F-7 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM J&S Associate PLT Certified Public Accountants Firm ID: 6743 Malaysia Please note the Company's transition report for the six-month period ended June 30, 2025 is unaudited, there will be no Report of Independent Registered Public Accounting Firm" included in the transition Form 20-F. F-2 TMD Energy Limited Unaudited Consolidated Balance Sheets As of June 30, 2025 and December 31, 2024 (Expressed in U.S. Dollars, except for the number of shares) As of June 30, 2025 December 31, 2024 (Unaudited) (Audited) ASSETS Current Assets Cash and cash equivalents $ 7,060,410 $ 16,069,851 Accounts receivable, net 28,371,702 20,321,697 Inventories, net 7,627,129 9,667,559 Due from related parties 17,992,929 11,592,567 Other receivables and current assets 30,958,684 20,206,845 Income tax receivable 1,003,350 - Total current assets 93,014,204 77,858,519 Non-Current Assets Property, plant and equipment, net 31,733,289 32,133,461 Investments, net 89,712 88,908 Operating lease right of use asset (" ROU asset "), net 37,981 16,603 Deferred tax assets, net 67,217 - Total Non-Current Assets 31,928,199 32,238,972 Total Assets $ 124,942,403 $ 110,097,491 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 7,057,387 $ 7,426,422 Other payables 1,402,444 1,502,965 Short-term loans 91,806,603 79,268,515 Due to related parties 1,024,058 626,745 Taxes payable - 773,578 Operating lease liabilities - current portion 24,437 9,223 Long-term debt payable - current portion 409,025 776,753 Finance lease payable - current portion 11,979 11,053 Total current liabilities 101,735,933 90,395,254 Non-Current Liabilities Operating lease liabilities - non current 14,301 7,564 Long term debt payable - non current 525,148 504,319 Finance lease payable - non current 53,658 56,559 Total Non-Current Liabilities 593,107 568,442 Total Liabilities 102,329,040 90,963,696 Shareholders' Equity Ordinary share, par value $ 0.0001 per share; 500,000,000 shares authorized; 23,565,000 and 20,000,000 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 2,357 2,000 Additional paid-in capital 12,731,677 4,634,755 Retained earnings 8,274,248 12,583,150 Accumulated other comprehensive income 578,386 663,895 Total equity attributable to equity holders' of TMD Energy Limited 21,586,668 17,883,800 Non-controlling interests 1,026,695 1,249,995 Total Equity 22,613,363 19,133,795 Total Liabilities and Shareholders' Equity $ 124,942,403 $ 110,097,491 The accompanying notes are an integral part of these unaudited consolidated financial statements. F-3 TMD Energy Limited Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023 (Expressed in U.S. Dollars, except for the number of shares) For the Six Months Ended For the Years Ended June 30, 2025 December 31, 2024 December 31, 2023 (Unaudited) (Audited) (Audited) Revenues, net $ 276,185,254 $ 688,430,008 $ 632,789,396 Revenues - related parties, net 154,866 177,534 290,377 Total revenues 276,340,120 688,607,542 633,079,773 Cost of revenues (272,274,995 ) (671,615,772 ) (619,866,604 ) Cost of revenues - related parties (81,654 ) (947,060 ) (1,123,356 ) Total cost of revenues (272,356,649 ) (672,562,832 ) (620,989,960 ) Gross profit 3,983,471 16,044,710 12,089,813 Operating expenses Selling and marketing expenses (38,067 ) (39,664 ) (101,302 ) General and administrative expenses (3,330,264 ) (5,249,099 ) (5,127,137 ) Depreciation expenses (2,558,809 ) (4,758,014 ) (4,257,189 ) Total operating expenses (5,927,140 ) (10,046,777 ) (9,485,628 ) (Loss) Income from operations (1,943,669 ) 5,997,933 2,604,185 Other (expenses) income, net Interest income 16,072 52,126 10,264 Sundry (expense) income (774,985 ) 2,022,473 3,321,563 Interest expenses (2,802,798 ) (4,598,376 ) (2,203,061 ) Share of losses of associate (4,029 ) (710 ) - Total other (expenses) income, net (3,565,740 ) (2,524,487 ) 1,128,766 (Loss) Income before income taxes (5,509,409 ) 3,473,446 3,732,951 Income tax benefits (expenses) 988,034 (1,428,299 ) (774,239 ) Net (loss) income (4,521,375 ) 2,045,147 2,958,712 Less: loss (income) attributable to non-controlling interest 212,473 (167,910 ) (962,761 ) Net (loss) income attributable to controlling interest $ (4,308,902 ) $ 1,877,237 $ 1,995,951 Weighted average number of ordinary shares outstanding: Ordinary shares - Basic and diluted 21,359,033 20,000,000 20,000,000 (Loss) Earnings per share: Basic and diluted $ (0.20 ) $ 0.09 $ 0.10 Other comprehensive (loss) income: Net (loss) income $ (4,521,375 ) $ 2,045,147 $ 2,958,712 Foreign currency translation adjustments (96,336 ) 276,068 1,887,789 Total comprehensive (loss) income $ (4,617,711 ) $ 2,321,215 $ 4,846,501 Comprehensive (loss) income including non-controlling interest $ (4,617,711 ) $ 2,321,215 $ 4,846,501 Comprehensive (loss) income attributable to non-controlling interest 223,300 (167,781 ) (832,987 ) Comprehensive (loss) income attributable to controlling interest $ (4,394,411 ) $ 2,153,434 $ 4,013,514 The accompanying notes are an integral part of these unaudited consolidated financial statements. F-4 TMD Energy Limited Unaudited Consolidated Statements of Changes in Shareholders' Equity For the Six Months Ended June 30, 2025 and the Years Ended December 31, 2024 and 2023 (Expressed in U.S. Dollars, except for the number of shares) Ordinary Shares Additional Accumulated Other Equity Attributable to TMD Non- Number of Shares Amount Paid-in Capital Retained Earnings Comprehensive (Loss) Income Energy Limited Controlling Interests Total Balance as of December 31, 2022 (Audi...

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