| RELATED PARTY TRANSACTIONS AND BALANCES |
12. RELATED PARTY TRANSACTIONS AND BALANCES 1) Nature of relationships with related parties The table below sets forth the major related parties and their relationships with the Company, with which the Company entered into transactions for the three and six months ended June 30, 2026 and 2025, or recorded balances as of June 30, 2026 and December 31, 2025. | Name | | Relationship with the Company | | Fuji Solar Co., Ltd. (“Fuji Solar”) | | Controlled by the controlling shareholder of the Company | | VSUN | | Controlled by Fuji Solar | | Vietnam Sunergy (Bac Ninh) Company Limited (“VSun Bac Ninh”) | | Wholly owned by VSUN | | VSun Solar USA Inc. (“VSun USA”) | | Wholly owned by VSUN | | VSun China Co., Ltd. (“VSun China”) | | Wholly owned by VSUN | | Vietnam Sunergy Wafer Co., Ltd. (“VSun Wafer”) | | Wholly owned by VSUN | 2) Transactions with related parties | | | For the Three Months Ended
June 30, | | | For the Six Months Ended
June 30, | | | | | 2026 | | | 2025 | | | 2026 | | | 2025 | | | Sales and service revenue from related parties | | | | | | | | | | | | | | VSUN | | $ | 3,878,586 | | | $ | 14,793,688 | | | $ | 21,307,444 | | | $ | 20,503,210 | | | VSun USA (a) | | | 14,771,925 | | | | (590,188 | ) | | | 29,039,759 | | | | 1,257,254 | | | VSun Bac Ninh | | | 2,886,018 | | | | 362,838 | | | | 7,147,040 | | | | 2,427,884 | | | VSun China (a) | | | — | | | | — | | | | — | | | | 899,140 | | | Total | | $ | 21,536,529 | | | $ | 14,566,338 | | | $ | 57,494,243 | | | $ | 25,087,488 | | | Purchase of raw materials from related parties | | | | | | | | | | | | | | | | | | VSun Bac Ninh | | | 7,445,510 | | | | — | | | | 7,445,510 | | | | — | | | VSun China | | | — | | | | 39,806,985 | | | | | | | | 39,806,985 | | | VSun Wafer | | | — | | | | 3,770 | | | | | | | | 3,770 | | | Total | | $ | 7,445,510 | | | $ | 39,810,755 | | | $ | 7,445,510 | | | $ | 39,810,755 | | | Purchase of machinery from a related party | | | | | | | | | | | | | | | | | | VSun China | | $ | — | | | $ | — | | | $ | 2,638,953 | | | $ | — | | | Total | | $ | — | | | $ | — | | | $ | 2,638,953 | | | $ | — | | | Prepayments of raw materials to related parties | | | | | | | | | | | | | | | | | | VSun China | | $ | — | | | $ | 6,289,920 | | | $ | — | | | $ | 6,289,920 | | | VSun Wafer | | | — | | | | 107,720 | | | | — | | | | 183,685 | | | Total | | $ | — | | | $ | 6,397,640 | | | $ | — | | | $ | 6,473,605 | | | Borrowings from related parties | | | | | | | | | | | | | | | | | | VSun USA (b) | | $ | — | | | $ | — | | | $ | — | | | $ | 12,000,000 | | | Total | | $ | — | | | $ | — | | | $ | — | | | $ | 12,000,000 | | | Repayment of borrowings to a related party | | | | | | | | | | | | | | | | | | VSun USA (c) | | $ | — | | | $ | — | | | $ | 11,000,000 | | | $ | — | | | Total | | $ | — | | | $ | — | | | $ | 11,000,000 | | | $ | — | | | Accrual of interest expenses on borrowings from related parties | | | | | | | | | | | | | | | | | | VSUN (b) | | $ | 241,623 | | | $ | 244,873 | | | $ | 482,067 | | | $ | 492,460 | | | VSun USA (b) | | | — | | | | 163,440 | | | | 275,322 | | | | 288,586 | | | Total | | $ | 241,623 | | | $ | 408,313 | | | $ | 757,389 | | | $ | 781,046 | | | Repayment of interest expenses on borrowings from a related party | | | | | | | | | | | | | | | | | | VSun USA (b) | | $ | — | | | $ | — | | | $ | 672,100 | | | $ | | | | Total | | $ | — | | | $ | — | | | $ | 672,100 | | | $ | | | | (a) | For the three months ended June 30, 2025, the negative revenue from VSUN USA was primarily due to return of sales commissions relating to sales of solar modules. With TOYO Texas manufactured solar modules in its plant in April 2025, the Company sold its own solar modules to customers. Accordingly, the Company did not sell solar modules for VSUN USA and refunded sales commission to VSUN USA. This is a one-off transaction with VSUN USA and has no material impact on the Company’s sales of solar module business. | | (b) | For the six months ended June 30, 2025, the Company borrowed a loan of $12.0 million from VSun USA as payment for property and equipment in TOYO Texas. The loan was matured through March 2026. The interest rate of borrowings were 4.2% and is payable on maturity of the borrowing. For the six months ended June 30, 2026, the Company repaid borrowings of $11,000,000 and interest expenses of $672,100 to VSUN USA, respectively. | | | For the three months ended June 30, 2026 and 2025, the Company accrued interest expenses of $nil and $163,440, respectively. For the six months ended June 30, 2026 and 2025, the Company accrued interest expenses of $275,322 and $288,586, respectively. | | (c) | For the six months ended June 30, 2026 and 2025, the Company did not borrow loans from or repaid loans to VSUN. For the six months ended June 30, 2026 and 2025, the Company did not make payments of interest expenses to VSUN. |
For the three months ended June 30, 2026 and 2025, the Company accrued interest expenses of $241,623 and $244,873 on the borrowings brought forward from the year 2024, respectively. For the six months ended June 30, 2026 and 2025, the Company accrued interest expenses of $482,067 and $492,460 on the borrowings brought forward from the year 2024, respectively. 3) Balances with related parties Accounts receivable – related parties | Related party | | Nature of balance | | June 30,
2026 | | | December 31,
2025 | | | VSun USA | | Sales to the related party | | $ | — | | | $ | 486,378 | | | VSun China | | Sales to the related party | | | — | | | | 8,317 | | | Total | | | | $ | — | | | $ | 494,695 | | Prepayments — a related party | Related party | | Nature of balance | | June 30,
2026 | | | December 31,
2025 | | | VSUN | | Prepayments for raw materials | | | — | | | | 72,264 | | | Total | | | | $ | — | | | $ | 72,264 | | Accounts payable – related parties | Related party | | Nature of balance | | June 30,
2026 | | | December 31,
2025 | | | VSun Bac Ninh | | Purchase of equipment | | $ | 2,647,058 | | | $ | — | | | VSun Bac Ninh | | Purchase of raw materials | | | 421,637 | | | | — | | | VSun China | | Purchase of raw materials | | | — | | | | 3,269,212 | | | Total | | | | $ | 3,068,695 | | | $ | 3,269,212 | | Contract liabilities — related parties | Related party | | Nature of balance | | June 30,
2026 | | | December 31,
2025 | | | VSUN | | Advance for solar cells | | $ | 45,020,048 | | | $ | 78,856,795 | | | VSun Bac Ninh | | Advance for solar cells | | | 12,958,851 | | | | — | | | VSun USA | | Advance for solar modules | | | 6,736,870 | | | | 1,491,508 | | | Total | | | | $ | 64,715,769 | | | $ | 80,348,303 | | Due to related parties | Related party | | Nature of balance | | June 30,
2026 | | | December 31,
2025 | | | VSUN | | Borrowings | | $ | — | | | $ | 48,530,388 | | | VSUN | | Interest payable | | | — | | | | 2,390,023 | | | VSUN | | Payment of other operating expenses on behalf of the Company | | | 10,090 | | | | 10,098 | | | VSun USA | | Borrowings | | | — | | | | 11,000,000 | | | VSun USA | | Interest payable | | | — | | | | 396,778 | | | Others | | Payment of other operating expenses on behalf of the Company | | | 1,000 | | | | 1,000 | | | Total | | | | $ | 51,373,744 | | | $ | 62,328,287 | | Due to a related party, non-current | Related party | | Nature of balance | | June 30,
2026 | | | December 31,
2025 | | | VSUN | | Borrowings | | $ | 48,493,498 | | | $ | - | | | VSUN | | Interest payable | | | 2,869,156 | | | | - | | | Total | | | | $ | 51,362,654 | | | $ | - | | On June 18, 2026, the Company and VSUN entered into a loan extension agreement, pursuant to which VSUN agreed to extend the loan repayment date to June 17, 2028. Interest is payable with payment of principal. Accordingly, the Company reclassified the borrowing and interest payable due to VSUN to noncurrent liabilities.
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