Note 7 – Investment and its valuations

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

 Schedule of investments

Investment in Horizon

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

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

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

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

The Company did not recognize an impairment loss for the years ended December 31, 2024, 2023 and 2022, respectively.

TMD Energy Limited

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022