Shinfox Energy receives qualified review conclusion; auditors flag material uncertainty over going concern

Shinfox Energy announced its auditors’ review report. PricewaterhouseCoopers Taiwan completed the review of the consolidated balance sheets of Shinfox Energy and its subsidiaries as of March 31, 2026 and 2025, as well as the consolidated statements of comprehensive income, changes in equity, cash flows, and related notes for the periods from January 1 to March 31 of 2026 and 2025. The auditors stated that, except for matters described in the basis for qualified conclusion, the review was conducted in accordance with Taiwan Standard on Review Engagements 2410. A qualified conclusion was issued because financial statements and related disclosures of certain non-material subsidiaries were not reviewed by auditors and were prepared based on those companies’ self-prepared, unaudited financial statements. In addition, certain investments accounted for using the equity method were measured and disclosed based on unaudited financial statements prepared by the investees. The auditors said that, except for possible adjustments that may arise if the above subsidiaries and equity-method investments had been reviewed by auditors, nothing came to their attention indicating that the consolidated financial statements were not prepared, in all material respects, in accordance with applicable financial reporting rules and IAS 34 Interim Financial Reporting, or that they failed to fairly present Shinfox Group’s consolidated financial position, financial performance, and cash flows. The report also noted a material uncertainty related to going concern. As of March 31, 2026, Shinfox Group had accumulated losses of NT7,003.619 million, exceeding one-half of its paid-in capital. Equity attributable to owners of the parent was negative NT82.233 million, while its debt ratio and current ratio were 96% and 54%, respectively. These conditions indicate material uncertainty over the group’s ability to continue as a going concern. The auditors did not modify their review conclusion regarding this matter. The auditors also emphasized that Shinfox Group is no longer able, from an operational strategy perspective, to support the continued operations of Shinfox Far East Company Pte. Ltd. (SFE), and SFE is unable to repay its debts. Management therefore recognized related losses on intra-group guarantees and loans to SFE, increasing the net loss attributable to owners of the parent. Separately, Shinfox Group estimated variable consideration using the expected value method based on a mediation agreement issued by the Public Construction Commission, past negotiation experience, and contract terms. These emphasis matters did not result in a modification of the auditors’ review conclusion. The accounting firm is PricewaterhouseCoopers Taiwan. The signing accountants are Hsiao-Tzu Chou and Chen ?-Tung. The review report date is May 13, 2026. The company stated that there are no response measures and no other matters to disclose.