Exhibit 99.1
TOYO Co., Ltd
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| June 30, 2026 |
December 31, 2025 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Accounts receivable – related parties | ||||||||
| Prepayments | ||||||||
| Prepayments – a related party | ||||||||
| Inventories, net | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets | ||||||||
| Restricted cash, non-current | ||||||||
| Long-term prepaid expenses | ||||||||
| Deposits for property and equipment | ||||||||
| Property and equipment, net | ||||||||
| Right of use assets | ||||||||
| Deferred tax assets | ||||||||
| Other non-current assets | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Short-term bank borrowings | $ | $ | ||||||
| Accounts payable | ||||||||
| Accounts payable – related parties | ||||||||
| Contract liabilities | ||||||||
| Contract liabilities – related parties | ||||||||
| Income tax payable | ||||||||
| Due to related parties | ||||||||
| Other payable and accrued expenses | ||||||||
| Lease liabilities, current | ||||||||
| Long-term bank borrowings, current portion | ||||||||
| Total Current Liabilities | ||||||||
| Lease liabilities, non-current | ||||||||
| Due to a related party, non-current | ||||||||
| Total Non-current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 16) | ||||||||
| Shareholders’ Equity | ||||||||
| Ordinary shares (par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserves | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity | ||||||||
| Total Liabilities and Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
TOYO Co., Ltd
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues from related parties | $ | $ | $ | $ | ||||||||||||
| Revenues from third parties | ||||||||||||||||
| Revenues | ||||||||||||||||
| Cost of revenues – related parties | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cost of revenues – third parties | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income from operations | ||||||||||||||||
| Other expenses | ||||||||||||||||
| Interest income (expenses), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Other expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Changes in fair value of contingent consideration payable | ( | ) | ( | ) | ||||||||||||
| Total other expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income before income taxes | ||||||||||||||||
| Income tax expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income | ||||||||||||||||
| Less: net loss attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||||||
| Net income attributable to TOYO Co., Ltd.’s shareholders | $ | $ | $ | $ | ||||||||||||
| Other comprehensive loss | ||||||||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Comprehensive income | $ | $ | ||||||||||||||
| Less: net loss attributable to noncontrolling interests | ( | ) | ( | ) | ||||||||||||
| Comprehensive income attributable to TOYO Co., Ltd.’s shareholders | $ | $ | ||||||||||||||
| Weighted average number of ordinary share outstanding– basic | ||||||||||||||||
| Earnings per share – basic | $ | $ | $ | $ | ||||||||||||
| Weighted average number of ordinary share outstanding– diluted | ||||||||||||||||
| Earnings per share –diluted | $ | $ | $ | $ | ||||||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
2
TOYO Co., Ltd
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| Attributable to TOYO Co., Ltd.’s shareholders | ||||||||||||||||||||||||||||||||
| Ordinary shares | Additional | Accumulated other |
Non- | |||||||||||||||||||||||||||||
| Number of shares |
Amount | paid-in capital |
Statutory reserve |
Retained Earnings |
comprehensive loss |
controlling interest |
Total Amount |
|||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||
| Issuance warrants to a service provider | — | |||||||||||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance as of March 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Settlement of contingent consideration payable | ||||||||||||||||||||||||||||||||
| Issuance warrants to a service provider | — | |||||||||||||||||||||||||||||||
| Capital injection from a non-controlling shareholder | — | |||||||||||||||||||||||||||||||
| Net income (loss) | — | ( | ) | |||||||||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||
| — | ||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||
| Share-based compensation to employees | ( | ) | ||||||||||||||||||||||||||||||
| Share-based compensation to nonemployees | ||||||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance as of March 31, 2026 | ( | ) | ||||||||||||||||||||||||||||||
| Issuance of ordinary shares in connection with a registered direct offering | ||||||||||||||||||||||||||||||||
| Issuance of ordinary shares in connection with at-the-market offering (“ATM”) | ||||||||||||||||||||||||||||||||
| Appropriation of statutory reserves | — | ( | ) | |||||||||||||||||||||||||||||
| Net income | — | |||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
3
TOYO Co., Ltd
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency expressed in United States Dollars (“US$”)
| For the Six Months Ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| Net cash provided by operating activities | $ | $ | ||||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Advances made to a related party | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Capital injection from shareholders | ||||||||
| Proceeds from issuance of ordinary shares in connection with a registered direct offering | ||||||||
| Proceeds from issuance of ordinary shares in connection with ATM | ||||||||
| Proceeds from short-term bank borrowings | ||||||||
| Repayment of short-term bank borrowings | ( | ) | ( | ) | ||||
| Repayment of long-term bank borrowings | ( | ) | ( | ) | ||||
| Proceeds of borrowings from a related party | ||||||||
| Repayment of borrowings to a related party | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash and restricted cash | ( | ) | ||||||
| Net increase in cash and restricted cash | ||||||||
| Cash and restricted cash at beginning of period | ||||||||
| Cash and restricted cash at end of period | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for income tax | $ | $ | ||||||
| Noncash investing and financing activities | ||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Payables related to purchase of property and equipment | $ | $ | ||||||
| Issuance of ordinary shares to settle contingent consideration payable | $ | $ | ||||||
Reconciliation of cash and restricted cash to the consolidated balance sheets:
| June 30, 2026 |
December 31, 2025 |
|||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Restricted cash, non-current | ||||||||
| Total cash and restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
4
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
1. ORGANIZATION AND BUSINESS DESCRIPTION
History of TOYO Co., Ltd
TOYO was incorporated on
As of June 30, 2026, the accompanying unaudited condensed consolidated financial statements reflect the activities of TOYO and each of the following entities:
| Name of Entity | Date of Incorporation | Place of Incorporation | Ownership | Principal Activities | ||||
| Parent company: | ||||||||
| TOYO | ||||||||
| Wholly owned subsidiaries of TOYO | ||||||||
| TOPTOYO Investment Pte. Ltd. (“SinCo”) | ||||||||
| TOYO Solar | ||||||||
| TOYO China Co., Ltd. (“TOYO China”) | ||||||||
| TOYO Holdings LLC (“TOYO USA Holding”) | ||||||||
| TOYO America LLC (“TOYO America”) | ||||||||
| TOYO Solar LLC | ||||||||
| TOYO Solar Texas LLC (formerly named as Solar Plus Technology Texas LLC, “TOYO Texas”) | ||||||||
| TOYO Solar (Singapore) Pte. Ltd. (“TOYO Singapore”) | ||||||||
| TOYO Solar Manufacturing One Member PLC (“TOYO Ethiopia”) | ||||||||
| TOYO Energy LLC (“TOYO Solar PLC”) | ||||||||
| TOYO Solar Clean Energy Company Limited (“TOYO Solar Clean Energy”) |
5
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
1. ORGANIZATION AND BUSINESS DESCRIPTION (cont.)
Reorganization of TOYO
On February 27, 2024, TOYO completed the reorganization of entities under common control of its then existing shareholders, who collectively owned
On February 23, 2024, the Company issued
The Company believed that it was appropriate to reflect the reorganization on a retroactive basis as if such structure existed at that time and in accordance with ASC 805-50-45-5, the entities under common control are presented on a combined basis for all periods to which such entities were under common control. The Company has retroactively adjusted all share and per share data for all periods presented. The unaudited condensed consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first year presented in the unaudited condensed consolidated financial statements.
History of Blue World Acquisition Corporation (“BWAQ”)
BWAQ is a blank check company incorporated as a Cayman Islands exempted company on July 19, 2021, and formed for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. The registration statement for BWAQ’s Initial Public Offering (“Initial Public Offering”) was declared effective on January 31, 2022.
As a part of Business Combination, BWAQ merged with and into TOYOone Limited, a Cayman Islands exempted company and wholly-owned subsidiary of TOYO (“Merger Sub”), with Merger Sub continuing as the surviving company.
On December 31, 2024, Merger Sub was struck from the Registrar of Companies of the Cayman Islands and dissolved accordingly. Merger Sub was a holding company. The management believed the disposal of Merger Sub does not represent a strategic shift, in both operating and financing aspects, because it is not changing the way it is running its business. The Company has not shifted the nature of its operations or the major geographic market area. The management believed the deconsolidation of Merger Sub does not represent a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. The dissolution is not accounted for as discontinued operations in accordance with ASC 205-20.
Business Combination with a SPAC
On August 10, 2023, BWAQ entered into the Agreement and Plan of Merger (the “Business Combination Agreement”) with TOYO, Merger Sub, SinCo, and TOYO Solar (together with TOYO, Merger Sub and SinCo, the “Group Companies”, or each individually, a “Group Company”), Vietnam Sunergy Joint Venture Stock Company (“VSUN”), and Fuji Solar Co., Ltd, a Japanese company (“Fuji Solar”, together with VSUN, the “Shareholders”, or individually, a “Shareholder”).
6
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
1. ORGANIZATION AND BUSINESS DESCRIPTION (cont.)
Business Combination with a SPAC (cont.)
Pursuant to the Business Combination Agreement, (a) the Group Companies, VSUN and Fuji Solar shall consummate a series of transactions involving the Group Companies, including (A) TOYO (“PubCo”) acquiring one hundred percent (
Among the
| a. | Following the closing of Business Combination, if the net profit, excluding changes in fair value of Earnout Shares, of PubCo for the fiscal year ending December 31, 2024 as shown on the audited financial statements of PubCo for the fiscal year ending December 31, 2024 (such net profit, the “2024 Audited Net Profit”) is no less than $ |
| b. | If the 2024 Audited Net Profit is less than $ |
The Business Combination was consummated on July 1, 2024. Following the consummation of the Business Combination, the ordinary shares of TOYO commenced trading on the Nasdaq Stock Market on July 2, 2024, under the symbol “TOYO.”
7
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
1. ORGANIZATION AND BUSINESS DESCRIPTION (cont.)
Business Combination with a SPAC (cont.)
Upon closing of the Business Combination, each Class A ordinary share of BWAQ was cancelled in exchange for the right to receive
After giving effect to the Business Combination and the issuance of the ordinary shares described above, there were
The reverse recapitalization is equivalent to the issuance of securities by the Company for the net monetary assets of BWAQ, accompanied by a recapitalization. The Company debited equity for the fair value of the net liabilities of BWAQ. In the subsequent financial statements after the Business Combination, the amounts of assets and liabilities for the period before the reverse recapitalization in financial statements are presented as the Company’s and recognized and measured at their pre-combination carrying amounts.
On May 14, 2025, based on the 2024 Audited Net Profit which was reported in the Company’s Annual Report on Form 20-F for the year ended December 31, 2024, filed on May 12, 2025 (the “Form 20-F”), which excludes changes in the fair value of Earnout Shares, the Company released an aggregate of
8
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“U.S. GAAP’’) for interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in conformity with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2025.
In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Company’s consolidated financial statements for the year ended December 31, 2025. The results of income for the three and six months ended June 30,2026 are not necessarily indicative of the results for the full year.
Foreign currency translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing on the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates on the date of the balance sheet.
The reporting currency of the Company is U.S. dollars (“USD” or “$”) and the accompanying unaudited condensed consolidated financial statements have been expressed in USD.
In general, assets and liabilities of the Company whose functional currency is not the USD, are translated into USD, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of the Company is recorded as a separate component of accumulated other comprehensive income within the statement of shareholders’ equity.
| June 30, 2026 | December 31, 2025 | |||||||
| VND exchange rate for balance sheet items, except for equity accounts | ||||||||
| RMB exchange rate for balance sheet items, except for equity accounts | ||||||||
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| VND exchange rate for items in the statement of operations and comprehensive income, and statement of cash flows | ||||||||
| RMB exchange rate for items in the statement of operations and comprehensive income, and statement of cash flows | ||||||||
No representation is made that the VND and RMB amounts could have been, or could be, converted into USD at the rates used in translation.
9
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Accounts receivable, net
Accounts receivables are recorded at the gross amount less an allowance for expected credit losses and do not bear interest.
The management maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “general and administrative expenses” in the unaudited condensed consolidated statements of operations and comprehensive income. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of June 30, 2026 and December 31, 2025, the Company did not record allowance for expected credit losses.
Inventories, net
Inventories are stated at the lower of cost or net realizable value. Cost of inventories is determined using the moving weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to damaged and slow-moving goods, which is dependent upon factors such as historical and forecasted consumer demand, and specific customer requirements. The Company takes ownership, risks, and rewards of the products. Write downs are recorded in “cost of revenues” in the unaudited condensed consolidated statements of operations and comprehensive income. For the three months ended June 30, 2026 and 2025, the Company provided inventory provision of $
Revenue recognition
The Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) since its setup. In accordance with ASC 606, revenue is recognized when the control of the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied, in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services (excluding sales taxes collected on behalf of government authorities). The Company’s revenue contracts generally do not include a right of return in relation to the delivered products or services.
The Company determines revenue recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.
10
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue recognition (cont.)
Sales of solar cells
The Company officially commenced sales of solar cells to customers in the second half of 2023. The Company recognizes revenue generated from sales of solar cells at a point in time following the transfer of control of the solar cells to the customers, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. The transaction price was fixed in the contracts with customers. No variable considerations, significant financing component or payable to customers were identified in contracts with the customer. The contracts with customers may contain provisions that require the Company to make liquidated damage payments to the customer if the Company fails to ship or deliver solar cells before scheduled dates. The Company recognizes these liquidated damages as a reduction of revenue. For the three and six months ended June 30,2026 and 2025, the Company did not incur such liquidation damages.
Customers are generally required to make prepayment ranging between
Sales agreements typically contain the assurance-type customary product warranties if defects in solar cells exceeds agreed percentage of delivered quantity. The percentage varies among different customers. The assurance-type product warranties are subject to ASC 450, Contingencies. As of June 30, 2026 and December 31, 2025, the Company did not accrue warranty liabilities.
Sales of solar modules
The Company recognizes revenue generated from sales of solar modules at a point in time following the transfer of control of the solar modules to the customers, which typically occurs upon shipment or delivery depending on the terms of the underlying contracts. The transaction price was fixed in the contracts with customers. No variable consideration, significant financing component or payable to customers were identified in contracts with the customer.
The related party customer is required to make prepayment of
Provision of original equipment manufacturer (OEM) services
During the three and six months ended June 30,2026, the Company provided OEM services to a third-party customer. The Company manufactured solar cells under the customer’s name and recognized revenues on a net basis upon delivery of solar cells to the customer.
11
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue recognition (cont.)
Provision of facilitation services
The Company provided facilitation services for customers’ solar cell and solar module products. The Company is an agent in facilitation services, as it did not bear inventory risks or determine the product selling price in provision of services. The Company identifies one performance obligation in the agreements with customers. The commission rate and the amount of customers’ solar cell and solar module products sold are both explicitly stipulated in the agreements with customers. No variable considerations, significant financing components or payable to customers were identified in contracts with the customer. The Company recognizes revenue from facilitation services for the customers’ solar cells and solar module products at a point when the end customers accept the agreed solar cell and solar module products and the customers collect the fees from end customers. The transaction prices are collected after the sales, accounts receivable are recognized when revenue is recognized. Accounts receivable is generally due within 60 days from provision of facilitation services.
Contract liabilities
Contract liabilities are recognized if the Company receives consideration prior to satisfying the performance obligation. As of June 30, 2026, the Company had contract liabilities of $
For the three and six months ended June 30,2026, the Company disaggregate revenue into three streams as the following table:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues from third parties: | ||||||||||||||||
| Sales of solar cells | $ | $ | $ | $ | ||||||||||||
| Sales of solar modules | ||||||||||||||||
| Provision of OEM services | ||||||||||||||||
| Revenues from related parties: | ||||||||||||||||
| Sales of solar cells | ||||||||||||||||
| Sales of solar modules | ||||||||||||||||
| Provision of facilitation services | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
12
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue recognition (cont.)
For the six months ended June 30,2026 and 2025, the movement of contract liabilities, including related parties and third parties was as follows:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Opening balance | $ | $ | ||||||
| Addition of contract liabilities | ||||||||
| Revenue recognition during the year | ( | ) | ( | ) | ||||
| Net off gross billing to the OEM customers | ( | ) | ||||||
| Foreign exchange adjustment | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
| Contract liabilities – third party customers | $ | $ | ||||||
| Contract liabilities – related party customers | $ | $ | ||||||
For the six months ended June 30,2026, the contract liabilities increased by $
Income taxes
The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes. The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is more likely than not these items will be utilized against taxable income in the future. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities.
An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than
13
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent period end date while the warrant is outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter with changes in fair value recognized in the statements of operations in the period of change.
Segment reporting
The Company uses the management approach to determine operating segment. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocation of resources and assessing performance.
The CODM assesses performance and decides how to allocate resources for our
Since the Company operates in
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| USA | $ | $ | $ | $ | ||||||||||||
| Other areas | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table disaggregates the geographic information of the Company’s long-lived assets, which consist of long-term prepaid expenses, deposits for property and equipment, property and equipment and operating lease right-of-use assets, as of June 30, 2026 and December 31, 2025.
| June 30, 2026 | December 31, 2025 | |||||||
| Vietnam | $ | $ | ||||||
| USA | ||||||||
| Ethiopia | ||||||||
| Total | $ | $ | ||||||
14
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recently adopted accounting standards
In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (SEC) Regulation S-X 210.4-08(h), Rules of General Application—General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this Update should be applied on a prospective basis. Retrospective application is permitted. As an Emerging Growth Company (“EGC”), the Company adopted ASU 2023-09 effective January 1, 2026. The amendments were applied prospectively, and the adoption did not have a significant impact on the Company’s consolidated financial statements.
In July 30 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to provide a practical expedient for all entities which elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses, and an accounting policy election for all entities, other than a public business entity, that elect the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient and, if so, whether it has also applied the accounting policy election. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. The Company adopted ASU 2025-05 from January 1, 2026 and the adoption did not have a significant impact on the Company’s unaudited condensed consolidated financial statements.
Recently issued accounting standards
On December 17, 2025, the FASB issued ASU 2025-12, which is to correct, clarify, and otherwise improve U.S. GAAP. ASU 2025-12 includes 33 improvements that span a wide range of topics, including Clarifying diluted earnings per share (EPS) calculation when a loss from continuing operations exists, Clarifying disclosure requirements for lease receivables from sales-type or direct financing leases, Revising the calculation of the reference amount for beneficial interests to prevent double counting credit losses, Clarifying the permissible methods to account for treasury stock retirements, and Clarifying the guidance for transfers of receivables from contracts with customers. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: (i) Prospectively to all transactions recognized on or after the date that the entity first applies the amendments, or (ii) Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
15
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recently issued accounting standards (cont.)
On December 8, 2025, the FASB issued ASU 2025-11, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides “interim financial statements and notes in accordance with GAAP.” The ASU also addresses the form and content of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity.” For public business entities, the amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. For all other entities, the amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. Early adoption is permitted for all entities. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
In January 2025, the FASB issued ASU 2025-01, “Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date.” This pronouncement revises the effective date of ASU 2024-03 and clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU’s scope are permitted to early adopt the accounting standard update. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal.
The Company does not believe the above-mentioned recently issued but not yet effective accounting standards, if currently adopted, would have a material impact on its consolidated financial position, statements of operations and comprehensive income and cash flows.
16
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Significant risks and uncertainties
1) Credit risk
Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of June 30, 2026, the Company held cash of $
Each bank account in Singapore is insured by government authority with the maximum limit of SG$
To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in Vietnam which management believes are of high credit quality and the Company also continually monitors their credit worthiness.
2) Foreign currency risk
The Company has contracts for the sales of products, purchases of materials and equipment which are denominated in foreign currencies, including Vietnam Dong (VND), Renminbi (RMB), Ethiopia Birr (ETB), and Singapore Dollar (SGD). For the six months ended June 30, 2026, substantially all of the Company’s revenues are dominated in US Dollar. VND, the functional currency of TOYO Solar, and RMB, the functional currency of TOYO China, are not freely convertible into foreign currencies.
All foreign exchange transactions in Vietnam take place either through the State Bank of Vietnam (“SBV”) or other authorized financial institutions at exchange rates quoted by SBV. Approval of foreign currency payments by the SBV or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of VND is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the Vietnam Foreign Exchange Trading System market.
All foreign exchange transactions in China take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.
3) Concentration risk
The Company has a concentration of its revenues from specific customers and accounts payable with specific vendors.
For the six months ended June 30, 2026, one third-party customer and one related-party customer accounted for
17
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Significant risks and uncertainties (cont.)
3) Concentration risk (cont.)
As of June 30, 2026, two third-party customers accounted for
As of June 30, 2026, three third-party suppliers accounted for
For the six months ended June 30, 2026, two third-party suppliers accounted for
3. LIQUIDITY CONDITION
As of March 31, 2026 and December 31, 2025, the Company had working capital deficits of $
During the three and six months ended June 30, 2026, the Company generated net income of $
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 upon repayment of principal. As a result of the extension, the Company reclassified the borrowing and related interest payable due to VSUN from current liabilities to non-current liabilities. After giving effect to this reclassification, the Company had working capital of $
Management considered the extension of the VSUN loan, the improvement in the Company’s working capital position, the Company’s recent profitability and positive operating cash flows, and the net proceeds received from the registered direct offering and the at-the-market offering in evaluating the Company’s ability to meet its obligations as they become due. Accordingly, the conditions and events that previously raised substantial doubt about the Company’s ability to continue as a going concern have been resolved, and substantial doubt no longer exists regarding the Company’s ability to continue as a going concern for at least twelve months from the date these unaudited condensed consolidated financial statements are issued. The unaudited condensed consolidated financial statements have been prepared on a going concern basis.
18
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
4. ACCOUNTS RECEIVABLE, NET
Accounts receivable, net consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Accounts receivable | $ | $ | ||||||
| Less: expected credit losses | ||||||||
| Accounts receivable, net | $ | $ | ||||||
For the three and six months ended June 30, 2026 and 2025, the Company did not provide expected credit losses against accounts receivable. Of the balance of $
5. INVENTORIES, NET
Inventories, net consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Goods in transit | ||||||||
| Total inventories, net | $ | $ | ||||||
In May 2026, the Company was subject to an investigation by U.S. Customs and Border Protection (“CBP”) relating to certain shipments manufactured by TOYO Ethiopia. The management assessed that the investigation was temporary and currently it is uncertain whether the final decision of CBP had any impact on the Company’s sales distributions and potential inventory recoverability.
For the three months ended June 30, 2026 and 2025, the Company provided an inventory write-down of $
6. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Construction in progress | $ | $ | ||||||
| Machinery | ||||||||
| Building | ||||||||
| Leasehold improvement | ||||||||
| Office equipment | ||||||||
| Vehicle | ||||||||
| Total property and equipment | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
19
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
6. PROPERTY AND EQUIPMENT, NET (cont.)
Depreciation expense was $
As of December 31, 2025, the Company collateralized all of its buildings in TOYO Solar with a carrying value of $
7. LONG-TERM PREPAID EXPENSES
In November 2022, the Company entered into an agreement with a third party. The agreement conveys the Company the right to use a piece of designated land (“Land Use Rights”) and the right to use certain public infrastructures within the industrial zones, for a period of 45 years maturing in October 2067. Pursuant to the agreement, the third party charged a total fee of $
Because these public infrastructures were shared among all lessees in the industrial zone, the Company has no rights to obtain substantially all of the economic benefits from this public infrastructure. The Company recorded the total public infrastructure service fee as long-term prepaid expenses, and amortized the long-term prepaid expenses over
Long-term prepaid expenses were comprised of the following:
| June 30, 2026 | December 31, 2025 | |||||||
| Prepaid expenses for public infrastructure | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
For the three months ended June 30, 2026 and 2025, the amortization expenses for long-term prepaid expenses were $
20
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
8. OPERATING LEASE
As of June 30, 2026, the Company leased its land use rights, office spaces and staff dormitory with third party lessors in Vietnam, Ethiopia and the USA. The lease term ranged between
The table below presents the operating lease related assets and liabilities recorded on the consolidated balance sheets.
| June 30, 2026 | December 31, 2025 | |||||||
| Right of use assets | $ | $ | ||||||
| Operating lease liabilities, current | ||||||||
| Operating lease liabilities, noncurrent | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
Other information about the Company’s leases is as follows:
| For the Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating cash flows used in operating leases | $ | $ | ||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
For the three months ended June 30, 2026, operating lease expenses were $
The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2026:
| June 30, 2026 | ||||
| For the six months ending December 31, 2026 | $ | |||
| For the year ending December 31, 2027 | ||||
| For the year ending December 31, 2028 | ||||
| For the year ending December 31, 2029 | ||||
| For the year ending December 31, 2030 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less: Imputed interest | ||||
| Present value of operating lease liabilities | $ | |||
21
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
9. LINE OF CREDIT
On April 26, 2023, the Company entered into a three-year bank credit facility with BIDV, under which the Company can draw-down up to $
For the six months ended June 30, 2026 and 2025, the Company did not draw down loans from the long-term bank credit facility from BIDV, respectively. For the six months ended June 30, 2026 and 2025, the Company repaid loans of $
For the three months ended June 30, 2026 and 2025, the Company recognized interest expenses of $
Short-term bank credit facility
On January 31, 2024, the Company entered into a one-year revolving bank credit facility with BIDV (“2024 Bank Credit Facility”), under which the Company can draw-down up to $
In March 2025, The Company entered the revolving bank credit facility with BIDV (“2025 Bank Credit Facility”), under which the Company can draw-down up to $
Letter of credit
In April 2025, the Company issued a letter of credit of $
For the six months ended June 30, 2026, the Company issued eight letters of credit aggregating $
22
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
10. SHORT-TERM BORROWINGS
In connection with the 2024 Bank Credit Facility (Note 9), the Company repaid loans of $
In connection with the 2025 Bank Credit Facility (Note 9), the Company has drawn down loans of $
For the three months ended June 30, 2026 and 2025, the Company recognized and fully paid interest expenses of $
11. INCOME TAXES
Cayman Islands
Under the current tax laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains.
Singapore
SinCo and TOYO Singapore are subject to corporate income tax for its business operation in Singapore. Tax on corporate income is imposed at a flat rate of
Vietnam
TOYO Solar and TOYO Clean are subject to Vietnam Enterprise Income Tax (“EIT”) on the taxable income in accordance with the relevant Vietnam income tax laws. The Vietnam’s statutory, Enterprise Income Tax (“EIT”) rate is
As a new enterprise, TOYO Solar received the preferential tax treatments since its inception, and is exempt from income taxes for the first two years since the year ended December 31, 2023. When TOYO Solar generated taxable income through year 2024, TOYO Solar is entitled to income tax rate of
China
Under the Enterprise Income Tax (“EIT”) Law in the PRC, the unified EIT rate for domestic enterprises and foreign invested enterprises is
USA
In the United States, TOYO USA Holding, TOYO America, TOYO Solar LLC, TOYO Texas and TOYO Energy are subject to federal and state income taxes on its business operations.
The Company also evaluated the impact from the recent tax reforms in the United States, including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the One Big Beautiful Bill Act and Inflation Reduction Act. No material impact on the Company is expected based on our analysis. We will continue to monitor the potential impact going forward.
23
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
11. INCOME TAXES (cont.)
Ethiopia
TOYO Ethiopia is subject to corporate income tax at a standard rate of
For the three months ended June 30, 2026 and 2025, the Company incurred current income tax expenses of $
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2026 and December 31, 2025, the Company did have any unrecognized uncertain tax positions. For the three and six months ended June 30, 2026 and 2025, the Company did incur any interest and penalties related to potential underpaid income tax expenses.
The Company and its subsidiaries’ major tax jurisdictions are Vietnam, Singapore, Ethiopia, PRC and the United States. Income tax returns of the Company and its subsidiaries remain open and subject to examination by the local tax authorities of Vietnam, Singapore, Ethiopia, PRC and the United States until the statute of limitations expire in each corresponding jurisdiction. The statute of limitations in Vietnam, Singapore, Ethiopia, PRC and the United States are between
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”) | ||
| VSUN | ||
| Vietnam Sunergy (Bac Ninh) Company Limited (“VSun Bac Ninh”) | ||
| VSun Solar USA Inc. (“VSun USA”) | ||
| VSun China Co., Ltd. (“VSun China”) | ||
| Vietnam Sunergy Wafer Co., Ltd. (“VSun Wafer”) |
24
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
12. RELATED PARTY TRANSACTIONS AND BALANCES (cont.)
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 | $ | $ | $ | $ | ||||||||||||
| VSun USA (a) | ( | ) | ||||||||||||||
| VSun Bac Ninh | ||||||||||||||||
| VSun China (a) | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Purchase of raw materials from related parties | ||||||||||||||||
| VSun Bac Ninh | ||||||||||||||||
| VSun China | ||||||||||||||||
| VSun Wafer | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Purchase of machinery from a related party | ||||||||||||||||
| VSun China | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Prepayments of raw materials to related parties | ||||||||||||||||
| VSun China | $ | $ | $ | $ | ||||||||||||
| VSun Wafer | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Borrowings from related parties | ||||||||||||||||
| VSun USA (b) | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Repayment of borrowings to a related party | ||||||||||||||||
| VSun USA (c) | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Accrual of interest expenses on borrowings from related parties | ||||||||||||||||
| VSUN (b) | $ | $ | $ | $ | ||||||||||||
| VSun USA (b) | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| Repayment of interest expenses on borrowings from a related party | ||||||||||||||||
| VSun USA (b) | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| (a) |
25
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
12. RELATED PARTY TRANSACTIONS AND BALANCES (cont.)
| (b) | For the six months ended June 30, 2025, the Company borrowed a loan of $ |
| For the three months ended June 30, 2026 and 2025, the Company accrued interest expenses of $ and $ |
| (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 $
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 | $ | $ | |||||||
| VSun China | Sales to the related party | |||||||||
| Total | $ | $ | ||||||||
Prepayments — a related party
| Related party | Nature of balance | June 30, 2026 | December 31, 2025 | |||||||
| VSUN | Prepayments for raw materials | |||||||||
| Total | $ | $ | ||||||||
26
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
12. RELATED PARTY TRANSACTIONS AND BALANCES (cont.)
Accounts payable – related parties
| Related party | Nature of balance | June 30, 2026 | December 31, 2025 | |||||||
| VSun Bac Ninh | Purchase of equipment | $ | $ | |||||||
| VSun Bac Ninh | Purchase of raw materials | |||||||||
| VSun China | Purchase of raw materials | |||||||||
| Total | $ | $ | ||||||||
Contract liabilities — related parties
| Related party | Nature of balance | June 30, 2026 | December 31, 2025 | |||||||
| VSUN | Advance for solar cells | $ | $ | |||||||
| VSun Bac Ninh | Advance for solar cells | |||||||||
| VSun USA | Advance for solar modules | |||||||||
| Total | $ | $ | ||||||||
Due to related parties
| Related party | Nature of balance | June 30, 2026 | December 31, 2025 | |||||||
| VSUN | Borrowings | $ | $ | |||||||
| VSUN | Interest payable | |||||||||
| VSUN | Payment of other operating expenses on behalf of the Company | |||||||||
| VSun USA | Borrowings | |||||||||
| VSun USA | Interest payable | |||||||||
| Others | Payment of other operating expenses on behalf of the Company | |||||||||
| Total | $ | $ | ||||||||
Due to a related party, non-current
| Related party | Nature of balance | June 30, 2026 | December 31, 2025 | |||||||
| VSUN | Borrowings | $ | $ | |||||||
| VSUN | Interest payable | |||||||||
| Total | $ | $ | ||||||||
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.
27
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
13. EQUITY
Ordinary shares
| a) | Reorganization of TOYO |
TOYO’s authorized share capital is
On February 23, 2024, the Company issued
The issuance of
| b) | Earnout shares |
Among the
| (a) | Following the closing of Business Combination, if the net profit, excluding changes in fair value of Earnout Shares, of PubCo for the fiscal year ending December 31, 2024 as shown on the audited financial statements of PubCo for the fiscal year ending December 31, 2024 (such net profit, the “2024 Audited Net Profit”) is no less than $ |
| (b) | If the 2024 Audited Net Profit is less than $ |
Upon the closing of the Business Combination, the
On May 14, 2025, based on the 2024 Audited Net Profit which was reported in the Form 20-F, which excludes changes in the fair value of Earnout Shares, the Company released an aggregate of
| c) | Business Combination with BWAQ |
On July 1, 2024, as part of the Business Combination between the Company and BWAQ, the Company issued
28
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
13. EQUITY (cont.)
| d) | Share-based compensation |
On August 29, 2025, the Company granted an aggregated
| e) | PIPE purchase agreement |
On March 6, 2024, the Company entered into a share purchase agreement (as amended on June 26, 2024, the “PIPE Purchase Agreement”) with BWAQ and a certain investor, NOTAM Co., Ltd., a Japanese corporation (the “PIPE Investor” or “NOTAM”), in connection with the Business Combination. Pursuant to the PIPE Purchase Agreement, NOTAM agrees to purchase a total of
| f) | At-the-market offering |
On April 22, 2026, the Company entered into a sales agreement with Roth Capital Partners, LLC and H.C. Wainwright & Co., LLC as agents (collectively, the “Agents”). Pursuant to the sales agreement, the Company may offer and sell up to $
| g) | Registered direct offering |
On June 25, 2026, the Company consummated a registered direct offering (“RDO”) with certain institutional investors, pursuant to which the Company issued: (i)
As of June 30, 2026 and December 31, 2025, the Company had
29
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
13. EQUITY (cont.)
Public Warrants
Pursuant to BWAQ’s initial public offering on February 2, 2022, BWAQ sold
Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants will expire five years from the consummation of a business combination or earlier upon redemption or liquidation.
The Public Warrants became exercisable after the consummation of the Business Combination between the Company and BWAQ on July 1, 2024. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. The Company may call the warrants for redemption, in whole and not in part, at a price of $
| ● | at any time while the warrants are exercisable, |
| ● | upon not less than |
| ● | if, and only if, the reported last sale price of the Ordinary Shares equals or exceeds $ |
| ● | if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption and for the entire |
If the Company call the warrants for redemption as described above, its management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the ordinary shares for the
As the Public Warrants meet the criteria for equity classification under ASC 815, therefore, the warrants are classified as equity. As of June 30, 2026 and December 31, 2025, the Company had
Private Warrants
Simultaneously with the closing of the initial public offering of BWAQ, BWAQ also sold
The Private Placement Units are identical to the Public Units being sold in the initial public offering of BWAQ except that Private Placement Units will not be transferable, assignable or saleable until 30 days after the completion of the business combination and will be entitled to registration rights.
As the Private Warrants meet the criteria for equity classification under ASC 815, therefore, the warrants are classified as equity. As of June 30, 2026 and December 31, 2025, the Company had
30
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
13. EQUITY (cont.)
Other Warrants
On July 1, 2024, the Company issued
The Other Units are identical to the Private Units. As the Other Warrants meet the criteria for equity classification under ASC 815, therefore, the warrants are classified as equity. As of June 30, 2026 and December 31, 2025, the Company had
Public Rights, Private Rights and Other Rights
Each holder of a Public Right and Private Right will automatically receive one-tenth (1/10) of an ordinary share upon consummation of a business combination, even if the holder of a Public Right converted all ordinary shares held by him, her or it in connection with a business combination or an amendment to the Company’s Amended and Restated Memorandum and Articles of Association with respect to its pre-business combination activities. Upon the closing of the Business Combination of the Company and BWAQ, the Company issued
AMI Warrants
On February 26, 2025, the Company also issued certain warrants to AUM Media Inc. exercisable for
RDO Warrants
In connection with the registered direct offering closed on June 25, 2026, the Company issued RDO Warrants, which have an exercise price of $
The fair value of RDO Warrants was determined at $
| June 25, 2026 | ||||
| Stock price | $ | |||
| Expected volatility (%) | % | |||
| Risk-free interest rate | % | |||
| Expected terms (in years) | ||||
| Expected dividends (%) | % | |||
31
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
14. SHARE-BASED COMPENSATION
Warrants issued to AUM Media Inc. (“AMI”)
On February 26, 2025, the Company issued warrants to AMI to purchase up to
AMI Warrants was classified as equity (Note 13). The fair value of AMI Warrants was determined using a binomial model.
| February 26, 2025 | ||||
| Stock price | $ | |||
| Expected volatility (%) | % | |||
| Risk-free interest rate | % | |||
| Expected terms (in years) | ||||
| Expected dividends (%) | % | |||
On February 26, 2025, the fair value of AMI Warrants was $
Restricted shares under TOYO ESOP
The Company has TOYO ESOP, under which the Company may grant share incentive awards, including options, restricted shares and restricted share units, to eligible service providers in order to attract, retain and motivate the talent for which the Company competes. The number of ordinary shares initially be approved for issuance under the TOYO ESOP (the “Share Limit”) is
On August 29, 2025, the Company granted an aggregated
As of June 30, 2026 and December 31, 2025, the Company had
32
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
14. SHARE-BASED COMPENSATION (cont.)
The details were as the following:
| Recipients | Granted and issued shares | Outstanding shares as of June 30, 2026 | Outstanding shares as of December 31, 2025 | Share compensation expenses recognized in the three months ended June 30, 2026 | ||||||||||||
| Restricted shares issued to management: | ||||||||||||||||
| Management (a) | $ | |||||||||||||||
| Independent directors (b) | ||||||||||||||||
| $ | ||||||||||||||||
| Restricted shares issued to non-employees: | ||||||||||||||||
| Three consultants (c) | $ | |||||||||||||||
| One consultant (d) | ||||||||||||||||
| Employees of Abalance Corporation (e) | $ | |||||||||||||||
| $ | ||||||||||||||||
| (a) |
| (b) |
| (c) |
| (d) |
| (e) |
For the six months ended June 30, 2026, the transaction activities of restricted shares were as below:
| Number of Restricted Shares | Weighted Average Grant-date Fair Value | |||||||
| Unvested restricted shares as of December 31, 2025 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Unvested restricted shares as of June 30, 2026 | $ | |||||||
As of June 30, 2026, the Company had
33
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
15. EARNINGS PER SHARE
The Company had
The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2026 and 2025:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||
| Less: Net loss attributable to holders of earnout shares | ( | ) | ( | ) | ||||||||||||
| Net income attributable to TOYO Co., Ltd.’s shareholders | $ | $ | $ | $ | ||||||||||||
| Weighted average number of ordinary share outstanding– basic | ||||||||||||||||
| Earnings per share – basic | $ | $ | $ | $ | ||||||||||||
| Weighted average number of ordinary share outstanding– diluted | ||||||||||||||||
| Earnings per share –diluted | $ | $ | $ | $ | ||||||||||||
Pursuant to ASC 260, Earnings Per Share, the Company has retroactively restated all shares and per share data for all periods presented. For the three months and six months ended June 30, 2026, the Public Warrants, Private Warrants, Other Warrants and AMI Warrants were dilutive securities and were included in the calculation of diluted net earnings per ordinary share under the treasury stock method. The RDO warrants were excluded from the calculation of diluted net earnings per ordinary share, as their inclusion would have been anti-dilutive. For the three and six months ended June 30, 2025, the outstanding warrants, including Public Warrants, Private Warrants, Other Warrants and AMI Warrants, were excluded from the calculation of diluted net loss per ordinary share, as their inclusion would have been anti-dilutive.
The number of incremental shares included in diluted earnings per share for the three months ended June 30, 2026 was computed using the average market prices during the three months. The number of incremental shares included in diluted earnings per share for the six months ended June 30, 2026 was determined by computing a year-to-date weighted average of the number of incremental shares included in each quarterly diluted EPS computation.
The weighted-average number of potentially anti-dilutive shares excluded from calculation of dilutive earnings per share are as follows:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Public Warrants | ||||||||||||||||
| Private Warrants | ||||||||||||||||
| Other Warrants | ||||||||||||||||
| RDO Warrants | ||||||||||||||||
| AMI Warrants | ||||||||||||||||
| Total | ||||||||||||||||
34
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
16. COMMITMENTS AND CONTINGENCIES
Legal proceedings
On December 6, 2024, Shanghai Jinko Green Energy Enterprise Management Co, Ltd and Zhejiang Jinko Solar Co., Ltd. (collectively “JINKO”) filed a patent infringement lawsuit with the United States District Court for the Northern District of California (“CA Case”), against Abalance Corporation, the Company’s ultimate shareholder, and its seven subsidiaries, including the Company. JINKO alleged that VSUN’s solar panel products (including TOPCON N-type solar panels) allegedly utilize JINKO’s patented technologies without authorization. JINKO asserts that the lawsuit was filed to recover damages for both past and future losses resulting from VSUN’s alleged patent infringement. Defendants Abalance Corporation, WWB Corporation, and Fuji Solar filed a motion to dismiss the Complaint for lack of personal jurisdiction and failure to state a claim on April 16, 2025. On July 24, 2025, the Court held a hearing on WWB Corporation’s motion to dismiss. The Court granted WWB Corporation’s motion to dismiss on July 28, 2025. Defendants Abalance Corporation and Fuji Solar were dismissed on August 8, 2025. Prior to the dismissal described below, the Court had set a Markman hearing for February 3, 2026. No trial date had been set.
On February 7, 2025, Shanghai Jinko Green Energy Enterprise Management Co., Ltd. et. al. brought a patent infringement claim against Waaree Solar Americas Inc. et. al. in the Southern District of Texas (“TX Case”). On July 11, 2025, TOYO Solar, Toyo America, and SinCo, filed a motion to intervene in the lawsuit as intervenors-defendants because a portion of the products subject to the litigation were produced by the Company. The Court granted the motion on July 16, 2025. Prior to the dismissal described below, the Court had set a Markman hearing for February 2, 2026, and a trial in February or March 2027.
Pursuant to a certain settlement and release agreement between JINKO and TOYO dated December 30, 2025, on January 30, 2026, the CA Case was dismissed pursuant to a joint stipulation of dismissal of JINKO and VSUN, VSun Bac Ninh, VSun USA, TOYO, TOYO Solar, TOYO Texas, and TOYO Ethiopia. In addition, on February 20, 2026, the TX Case was dismissed with respect to TOYO Solar, TOYO America, SinCo pursuant to the parties’ joint stipulation. Regardless of outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.
On March 26, 2026, the U.S. International Trade Commission (the “USITC”) instituted an investigation pursuant to Section 337 of the Tariff Act of 1930. The investigation is based on a complaint filed by First Solar, Inc. (“First Solar”) on February 24, 2026, as supplemented on March 10, 2026, alleging that certain respondents, including TOYO, TOYO Texas and VSun USA of Fremont, violated Section 337 by importing into the United States certain TOPCon solar cells, modules, panels, components thereof, and products containing the same (the “TOPCon products”), that allegedly infringe one or more U.S. patents asserted by First Solar. First Solar has requested that the USITC issue a general exclusion order that would bar the TopCon products from entry into the United States, or in the alternative a limited exclusion order, as well as cease and desist orders against the respondents. As of the date of issuance of the report, USITC has not made any determination on the merits of the allegations, and the Company’s products continue to be imported and sold in the United States in the ordinary course. The investigation remains ongoing in the discovery phase, and the USITC has not made any determination that the TOYO has infringed the asserted patent or otherwise violated Section 337. The Company, together with its outside counsel, is actively defending against First Solar’s allegations and disputes that the accused products infringe the asserted patent. As of the date of issuance of the report, the Company are unable to predict the outcome of the investigation or whether any remedial orders will be issued and will evaluate the potential impact of this matter as the investigation progresses.
35
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
16. COMMITMENTS AND CONTINGENCIES (cont.)
On May 12, 2026, First Solar, Hanwha Q CELLS and certain other U.S. solar manufacturers filed a request with the U.S. Department of Commerce seeking the initiation of a country-wide anti-circumvention inquiry under Section 781(b) of the Tariff Act of 1930 concerning certain crystalline silicon photovoltaic products completed in Ethiopia using inputs from China. The request alleges that certain solar products produced in Ethiopia and/or assembled into modules in third countries using Ethiopian-produced cells are circumventing existing U.S. antidumping and countervailing duty orders applicable to solar products from China.
On May 27, 2026 and May 28, 2026, TOYO received detention notices from U.S. Customs and Border Protection (CBP) on May 27 and May 28, 2026, respectively, regarding cell shipments under Entry Nos. 8QH26007473 and 8QH26007481. CBP has indicated that the shipments are suspected of being associated with forced labor. The total quantities of the detained solar cells are approximately 0.094MW at the amount of $
On July 17, 2026, Commerce formally initiated the requested country-wide circumvention inquiry. The inquiry covers (i) solar cells and modules completed in Ethiopia using parts and components from China and subsequently exported from Ethiopia to the United States, and (ii) solar cells completed in Ethiopia using parts and components from China that are subsequently completed or assembled into modules in Vietnam using additional inputs from China and exported from Vietnam to the United States. The inquiry will determine whether such products are circumventing existing U.S. antidumping and countervailing duty orders applicable to crystalline silicon photovoltaic cells from China. TOYO submitted comments and factual information opposing the request prior to initiation and will continue to vigorously defend its position in the proceeding.
Capital commitments
As of June 30, 2026, the Company entered into certain construction agreements with vendors to build its plant in Vietnam, Texas, and Ethiopia. Future minimum capital payment under non-cancellable agreements are as follows:
| Minimum capital payments | ||||
| For the six months ending December 31, 2026 | $ | |||
| For the twelve months ending December 31, 2027 and thereafter | ||||
| Total | $ | |||
36
TOYO Co., Ltd
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Currency expressed in United States Dollars (“US$”), except for number of shares)
16. COMMITMENTS AND CONTINGENCIES (cont.)
Contingent consideration
On February 23, 2024, the Company issued
The
The fair value of Earnout Shares was determined using a Monte Carlo simulation model. This approach considered (i) the share price on July 1, 2024 and December 31, 2024, (ii) the discount for lack of marketability (“DLOM”). According to the agreement, the share consideration to be issued to the existing equity holders in the business combination will be subject to a lock-up. The lock-up will be staggered, with
The following table summarizes the assumptions used in estimating the fair value of the Earnout Shares on July 1, 2024 and December 31, 2024.
| December 31, 2024 | July 1, 2024 | |||||||
| Stock price | $ | $ | ||||||
| Expected volatility (%) | % | % | ||||||
| Expected terms (in years) | ||||||||
| Expected dividends (%) | % | % | ||||||
The fair value of contingent consideration on July 1, 2024 and December 31, 2024 was estimated at $
On May 14, 2025, based on the 2024 Audited Net Profit which was reported in the Form 20-F, which excludes changes in the fair value of Earnout Shares, the Company released an aggregate of
As of June 30, 2026 and December 31, 2025, the Company had outstanding balance of contingent consideration payable.
37