VIVC 10-K & 10-Q changes, risk factors and insider trading
Vivic Corp. · OTC · Services-Miscellaneous Amusement & Recreation · CIK 1703073 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “U.S. tariffs on imports from China, Taiwan, and other regions may increase our costs, disrupt our supply chain, and materially harm our business and financial results.”
Largest changes
“U.S. tariffs on imports from China, Taiwan, and other regions may increase our costs, disrupt our supply chain, and materially harm our business and financial results.”see in full comparison
“Our business may be adversely affected by tariffs imposed by the United States on goods imported from China, Taiwan. Escalating trade tensions between the U.S. and China, as well as the longstanding dispute regarding Taiwan, increase the likelihood of changes in laws, tariffs, or trade restrictions that could impact our ability to source products and components. As of the date of this Annual Report, the U.S. …”see in full comparison
We currently have outstanding 832,000 shares of Class A Convertible Preferred Stock which are owned bysee in full comparisonHonetechShang-ChiaiInc, a Samoa company, which is owned by Ms. Yu Cheng.Kung. Each share of our Class A Preferred Stock is convertible, at any time, into ten (10) shares of our common stock. The holder of our Class A Preferred Stock votes together with the holders of our common stock on all matters brought for a vote by our shareholders and is entitled to cast 50 votes for each share of Series A Convertible Preferred Stock or 41,600,000 votes in total. We have outstanding 27,410,921 shares of common stock. Therefore,YuShangCheng,Chiaias the owner of Hontech Inc.,Kung can cast votes representing 60.28% of the aggregate voting power on all matters voted upon by our stockholders, including the election of members of our Board of Directors. Accordingly, Ms. Cheng will have significant influence in determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election of directors and other significant corporate actions. Ms. Cheng will also have the power to prevent or cause a change in control of our Company. Without the consent of Ms. Cheng, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. Ms. Cheng’s interests may differ from the interests of our other shareholders.
see in full comparisonOurAlthough the Company has determined to concentrate its operations in the United States and Southeast Asia, as of June 30, 2025, our business is based in Taiwan and we rely upon manufacturers in Taiwan. The sovereignty of Taiwan is a longstanding point of contention between China and the United States. The United States maintains unofficial relations with Taiwan, while also recognizing the “One China” policy of China, which acknowledges Beijing as the legitimate government of China. Both China and the United States have engaged in military posturing around the Taiwan Strait. This increases the risk of accidental clashes or misunderstandings that could escalate into conflict, which will affect both our China-mainland-based and Taiwan-based suppliers.
We have funded our operations to date through loans from related parties, third party lenders and commercial banks and the willingness ofsee in full comparisonofthird parties to delay payment of amounts due. Consequently, as June 30,2024,2025, we hadaccruedno accounts payabledueto relatedparties of $903,728parties, and loans payabledueto third parties were in the amount of$611,383$339,054 and the amount of our indebtedness has increased from such date. If we are not able to pay or refinance the outstanding principal and accrued interest on our loans when due, our operations may be materially and adversely affected. We may need to offer the holders of our debt increases in the rates of interest they receive or otherwise compensate them through payments of cash or issuances of our equity securities or securities convertible into our equity or modification of our loan agreements to provide additional compensation. Future financings or re-financings may involve the issuance of additional debt, equity and securities convertible into or exercisable for our equity securities. If we are unable to consummate such financings or re-financings, our operations may be adversely affected and the trading price of our common stock could be adversely affected and the terms of such financings may adversely affect the interests of our existing stockholders. Any failure to obtain additional working capital when required would have a material adverse impact on our business and financial condition and may result in a decline in the price of our common stock. If we are not able to fund ongoing losses through funds provided by third parties or our stockholders, we may become insolvent and cease operations.
Full comparison: every changed paragraph (5)
We
have funded our operations to date through loans from related parties, third party lenders and commercial banks and the willingness of
of third parties to delay payment of amounts due. Consequently, as June 30, 2024,2025, we had accruedno accounts payable dueto related parties
of $903,728parties, and loans
payable dueto third parties were in the amount of $611,383$339,054 and the amount of our indebtedness has increased from such
date. If we are not
able to pay or refinance the outstanding principal and accrued interest on our loans when due, our operations
may be materially and adversely
affected. We may need to offer the holders of our debt increases in the rates of interest they
receive or otherwise compensate them through
payments of cash or issuances of our equity securities or securities convertible into
our equity or modification of our loan agreements
to provide additional compensation. Future financings or re-financings may involve
the issuance of additional debt, equity and securities
convertible into or exercisable for our equity securities. If we are unable
to consummate such financings or re-financings, our operations
may be adversely affected and the trading price of our common stock
could be adversely affected and the terms of such financings may
adversely affect the interests of our existing stockholders. Any
failure to obtain additional working capital when required would have
a material adverse impact on our business and financial
condition and may result in a decline in the price of our common stock. If we
are not able to fund ongoing losses through funds
provided by third parties or our stockholders, we may become insolvent and cease operations.
OurAlthough
the Company has determined to concentrate its operations in the United States and Southeast Asia, as of June 30, 2025, our
business is based in Taiwan and we rely upon manufacturers in Taiwan. The sovereignty of Taiwan is a longstanding point of contention
between China and the United States. The United States maintains unofficial relations with Taiwan, while also recognizing the “One
China” policy of China, which acknowledges Beijing as the legitimate government of China. Both China and the United States have
engaged in military posturing around the Taiwan Strait. This increases the risk of accidental clashes or misunderstandings that could
escalate into conflict, which will affect both our China-mainland-based and Taiwan-based suppliers.
U.S. tariffs on imports from China, Taiwan, and other regions may increase our costs, disrupt our supply chain, and materially harm our business and financial results.
Our business may be adversely affected by tariffs imposed by the United States on goods imported from China, Taiwan. Escalating trade tensions between the U.S. and China, as well as the longstanding dispute regarding Taiwan, increase the likelihood of changes in laws, tariffs, or trade restrictions that could impact our ability to source products and components. As of the date of this Annual Report, the U.S. tariff rate on goods imported from China remains significant and has been subject to volatility, while additional tariffs or trade restrictions could be imposed on goods imported from Taiwan. Because we may rely on suppliers or manufacturers based in China and Taiwan for certain boats and components, increases in tariffs could materially increase our cost of revenue and reduce profit margins. There is no guarantee that current tariff levels will remain stable or that new trade barriers will not be enacted. Any continuation, escalation, or expansion of tariffs on products imported from China, Taiwan, or other regions could materially and adversely affect our supply chain, business operations, financial condition, and results of operations. In August 2025, the Company determined to concentrate its operations in the United States and Southeast Asia.
We
currently have outstanding 832,000 shares of Class A Convertible Preferred Stock which are owned by HonetechShang-Chiai Inc, a Samoa company, which
is owned by Ms. Yu Cheng.Kung. Each share of our
Class A Preferred Stock is convertible, at any time, into ten (10) shares of our common stock.
The holder of our Class A Preferred Stock
votes together with the holders of our common stock on all matters brought for a vote by our
shareholders and is entitled to cast 50
votes for each share of Series A Convertible Preferred Stock or 41,600,000 votes in total. We
have outstanding 27,410,921 shares of common
stock. Therefore, YuShang Cheng,Chiai as the owner of Hontech Inc.,Kung can cast votes representing
60.28% of the aggregate voting power on all matters voted upon by our
stockholders, including the election of members of our Board of
Directors. Accordingly, Ms. Cheng will have significant influence in
determining the outcome of any corporate transaction or other matter
submitted to the shareholders for approval, including mergers, consolidations,
the election of directors and other significant corporate
actions. Ms. Cheng will also have the power to prevent or cause a change in
control of our Company. Without the consent of Ms. Cheng,
we may be prevented from entering into transactions that could be beneficial
to us or our minority shareholders. Ms. Cheng’s interests
may differ from the interests of our other shareholders.
Management's Discussion & Analysis (MD&A)
Largest changes
“In addition to our own yachts, we are the exclusive distributor of Monte Fino yachts in the People’s Republic of China, the Philippines and the Middle East pursuant to our agreement with Kha Shing Enterprise Co., Ltd. (Taiwan) (“Kha Shing”). While seeking to develop the market for sales to tour operators, we will also seek to increase sales of Monte Fino luxury yachts in the territories where we are the exclusive distributor, particularly in the 70 to 150 foot range, which are generally purchased by individual private yacht owners.”see in full comparison
“In 2023, we determined to focus our efforts on yacht sales in Taiwan and other selected regions throughout the world, and since that time have disposed of all of our business operations in mainland China. On July 12, 2023, our subsidiary, Vivic Corporation (Hong Kong) Co. Limited (“Vivic Hong Kong”), entered into a Stock Purchase Agreement with Yun-Kuang Kung pursuant to which Mr. Kung acquired all of the shares of our wholly-owned subsidiary, Weiguan Ship. The divestiture of Weiguan Ship completed our plan to divest of all activities other than our ongoing yacht business in Taiwan. …”see in full comparison
“Our consolidated financial statements contained in this report have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.”see in full comparison
“Our yachts are manufactured by third parties selected by us on the basis of their production capabilities, technical ability and financial wherewithal. Once a customer places an order, we negotiate and sign an original equipment manufacturer (“OEM”) contract with a selected local manufacturer. Upon completion, we deliver the boat to the location designated by our customer. …”see in full comparison
“We are the exclusive distributor of Monte-Fino yachts in Asia and the Middle East pursuant to our agreement with Kha Shing Enterprise Co. We also distribute Monte Fino yachts in other territories throughout the world other than those where Kha Shing has granted another company exclusive distribution rights. Our employees located in Taiwan engage in the design, construction, on an outsourced basis, and distribution of power boats, charter boats and eco-friendly new energy boats. …”see in full comparison
“Beginning with a change in our management resulting from a change in control of our Company which occurred at the end of 2018, we have explored and initiated operations in a number of business areas related to the pleasure boat industry. These included yacht sales, marine tourism, development of electric powered yachts, development and operation of yacht marinas in Asia and the development of a yacht rental and time share service. …”see in full comparison
Full comparison: every changed paragraph (59)
Statements
made in this Annual Report that are not historical or current facts are “forward-looking statements” made pursuant to the
safe harbor
provisions of Section 27A of the Securities Act of 1933 (the “Act “) and Section 21E of the Securities Exchange
Act of 1934.
These statements often can be identified by the use of terms such as “may,” “will,” “expect,”
“believe,”
“anticipate,” “estimate,” “approximate” or “continue,” or the
negative thereof. We intend
that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution
readers not to place undue
reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking
statements represent management’s
commercially reasonable judgment as to what may occur in the future. However, forward-looking
statements are subject to risks, uncertainties
and factors beyond our control that could cause actual results and events to differ materially
from historical results of operations
and events and those presently anticipated or projected. We disclaim any obligation subsequently
to revise any forward-looking statements
to reflect events or circumstances after the date of such statement or to reflect the occurrence
of anticipated or unanticipated events.
We are a global yacht sales and service provider based in Taiwan focused on offering yachts, ancillary products, technical support, service solutions and systematic management solutions to yacht marinas, yacht clubs, yacht operators and marine tourism providers. In August 2025, the Company determined to concentrate its operations in the United States and Southeast Asia. Our mission is to offer our clients, which we refer to as yacht operators, more profitable products and comprehensive service solutions. We differentiate ourselves from other yacht manufacturers by offering yachts specifically designed for marine tourism, group tours, business meetings, yacht clubs and fractional ownership as opposed to individual owners. In addition to our products, we seek to support our customers by providing maintenance and other yacht management services, yacht activity scenarios, business solutions and marketing strategies to enhance yacht tourism and operational efficiencies to enable them to grow their businesses and improve their bottom lines.
We design and offer various yachts models which differ in their sizes, performance, and functions and are sold under our brand name, “VIVIC.” Our yachts are designed to be more suitable for multiple user group scenarios, emphasizing open deck and cabin space suitable for group tours and business meetings, with improved operational economies and energy efficiencies. We collaborate with our marketing agents, encouraging them to develop yacht marinas and seek out yacht operators interested in developing their own businesses based upon yacht sharing.
Our yachts are manufactured by third parties selected by us on the basis of their production capabilities, technical ability and financial wherewithal. Once a customer places an order, we negotiate and sign an original equipment manufacturer (“OEM”) contract with a selected local manufacturer. Upon completion, we deliver the boat to the location designated by our customer. Our principal supplier and distributor in mainland China is Weiguan Ship, which utilizes the mainland’s production and supply chain advantages to provide us with yacht production, delivery, and after-sales services based on our designs. Weiguan Ship is responsible for providing the required products and after-sales services for all sales orders in mainland China and remits 15% of the order amount of each yacht to us as a “VIVIC” brand usage fee.
In addition to our own yachts, we are the exclusive distributor of Monte Fino yachts in the People’s Republic of China, the Philippines and the Middle East pursuant to our agreement with Kha Shing Enterprise Co., Ltd. (Taiwan) (“Kha Shing”). While seeking to develop the market for sales to tour operators, we will also seek to increase sales of Monte Fino luxury yachts in the territories where we are the exclusive distributor, particularly in the 70 to 150 foot range, which are generally purchased by individual private yacht owners.
Beginning
with a change in our management resulting from a change in control of our Company which occurred at the end of 2018, we have explored
and initiated operations in a number of business areas related to the pleasure boat industry. These included yacht sales, marine tourism,
development of electric powered yachts, development and operation of yacht marinas in Asia and the development of a yacht rental and
time share service. In 2023, we determined to focus our efforts on yacht sales in Taiwan and other selected regions throughout the world,
and since that time have disposed of all of our business operations in mainland China.
We
are the exclusive distributor of Monte-Fino yachts in Asia and the Middle East pursuant to our agreement with Kha Shing Enterprise Co.
We also distribute Monte Fino yachts in other territories throughout the world other than those where Kha Shing has granted another company
exclusive distribution rights. Our employees located in Taiwan engage in the design, construction, on an outsourced basis, and distribution
of power boats, charter boats and eco-friendly new energy boats. In cooperation with Kha Shing, we design and offer various yachts models
which differ in their sizes, performances, and functions. Currently, we own our own brand name, “VIVIC.”
As
our companyCompany grows, we will seek to expand the yacht brands we offer for sale, the territories in which we market yachts and, if appropriate
based on our capabilities and what we can offer, seek to become the exclusive distributor for yacht manufacturers in Taiwanthe United States,
Southeast Asia and other
territories. We will also seek to enter other areas related to the marine industry where we believe we can
be profitableprofitable. OurAs part of our efforts, we recently entered into an Electric Catamaran Yacht Co-Development Agreement with Acel Power
yachtsInc. areto manufactured by third parties selected by uscollaborate on the basisdevelopment of their production capabilities, technical ability and financial
wherewithal. Once a customer places an order,electric we negotiate and sign an original equipment manufacturer contract with a selected local
manufacturer. Our technical staff closely monitors the progress of construction. Upon completion, we deliver the boat to the location
designated by our customer.yacht.
In 2023, we determined to focus our efforts on yacht sales in Taiwan and other selected regions throughout the world, and since that time have disposed of all of our business operations in mainland China. On July 12, 2023, our subsidiary, Vivic Corporation (Hong Kong) Co. Limited (“Vivic Hong Kong”), entered into a Stock Purchase Agreement with Yun-Kuang Kung pursuant to which Mr. Kung acquired all of the shares of our wholly-owned subsidiary, Weiguan Ship. The divestiture of Weiguan Ship completed our plan to divest of all activities other than our ongoing yacht business in Taiwan. However, we ceased Vivic Taiwan operation on August 21, 2025 due to Taiwan government’s policy of prohibiting importing ships from China, where our main suppliers are. We commenced the wind-down and deregistration of Vivic Taiwan, which, subject to customary procedures and approvals, is expected to be completed by the end of 2025. In August 2025, the Company determined to concentrate its operations in the United States and Southeast Asia and to discontinue pursuing the Taiwan market. In connection with this decision, we will focus on promoting the sales in Vivic, our U.S. entity.
On
July 12, 2023, our subsidiary, Vivic Corporation (Hong Kong) Co. Limited (“Vivic Hong Kong”), entered into a Stock Purchase
Agreement with Yun-Kuang Kung pursuant to which Mr. Kung acquired all of the shares of our wholly-owned subsidiary, Guangdong
Weiguan Ship Tech Co., Ltd. (“Weiguan Ship”). In consideration for our interest in Weiguan Ship, we received RMB 1,000 ($137)
and the agreement of Mr. Kung to indemnify us and our affiliates against any and all claims, including unknown claims and claims for
taxes, related to the business of Weiguan Ship whether arising before or after the date of the Stock Purchase Agreement. The divestiture
of Weiguan Ship completed our plan to divest of all activities other than our ongoing yacht business in Taiwan.
Our
consolidated financial statements contained in this report have been prepared assuming that we will continue as a going concern and,
accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that
might be necessary should we be unable to continue in operation.
As
a result of the sale of our interest in Weiguan Ship and its subsidiaries, the assets and related liabilities and the results of operations
of such entities are included in theour financial statements included in this report as discontinued operations. The following table sets
forth the results of our
operations for the periods indicated as a percentage of net sales. Certain columns may not addbe added due to rounding.
Revenue was $44,515 for the year ended June 30, 2025. Toal revenue from continuing operations was $5,950,692 for the year ended June 30, 2024. The revenue for the year ended June 30, 2025 was mainly from the sale of yacht models. We sold 100 yacht models to one of the Company’s directors below cost. We considered this as marketing and advertising because the director will give our yacht models to prospective purchasers to promote and market our yachts. The revenue for the year ended June 30, 2024 was mainly from the sales of yachts at Vivic Taiwan.
Revenue
from continuing operations was $5,950,692 for the year ended June 30, 2024. We did not generate revenues from continuing operations in
the year ended June 30, 2023. The revenue from continuing operations for the year ended June 30, 2024 reflected sales of yachts. In 2023,
we determined to focus our efforts on yacht sales in Taiwan and other selected regions throughout the world.
Cost
of revenue was $126,927 for the year ended June 30, 2025. Cost of revenue from continuing operations was $4,152,372 for the year ended
June 30, 2024. We did not generate revenues from continuing operations
in year ended June 30, 2023 and thus had no cost of revenues in the period. The cost of revenues infor the year ended June 30, 20242025 was
mainly due to costs associated with yacht model sales. We sold
100 yacht models to one of the Company’s directors below cost. We considered this as marketing and advertising because the director
will give our yacht models to prospective purchasers to promote and market our yachts. The cost of revenues for the year ended June 30,
2024 was mainly due to the costs of yacht sales at Vivic Taiwan.
Gross profit (loss)
Gross
profit (loss) for the year ended June 30, 2025, was a loss of $82,412 as we had no sales other than yacht model sale. Gross profit from
continuing operations was $1,798,320 for the year ended June 30, 2024. We had noThe gross profitsloss from continuing operations
forin the year ended June 30, 2023.2025, Thewas the result
of our decision to sell yacht models below cost for marketing purposes, while gross profit in the year ended June 30, 20242024, is allwas the result
of yacht sales.
Selling
expenses consisted mainly of advertising, employee salaries and welfare, entertainment, and transportation expenses of the marketing
department. Selling expenses were $nil for the year ended June 30, 2025, compared to $127,708 for the year ended June 30, 2024,2024. comparedThe decrease
in selling expenses was mainly due to $nil for the yeardecrease endedof Juneadvertising 30, 2023.expenses.
General
and administrative expenses consisted mainly of employee
salaries and welfare, and expenses for business meeting,meetings, utilities,
accounting, consulting, and legal expenses.services. General and administrative expenses were $784,492 for the year ended June 30, 2025,
werecompared to $513,411 for the year ended June 30, 2024, compared to $280,483 for the year ended June 30, 2023, an increase of $232,928$271,081 or 83.05%
resulting from our increased operations and sales activities.52.80%. The increase of general and administrative
(“G&A”) expenses mainly includedreflected increased professional fee by $147,399, increased bad debt expense by $86,026,
increased repair and maintenance expense by $37,638, increased payroll expense
of $18,427,by $53,991, increased professionalOTC feeslisting offee $111,655,by increased$5,555,
which travelwas expensespartly ofoffset $11,204,by increased meal and entertainment expenses of
$15,587, increaseddecreased subcontract labor of $61,904, increased OTC Listing fee of $4,290, and increased other expenses ofby $10,440.$60,951.
In addition, on and effective August 1, 2024, the board of directors (the “Board”) appointed Mr. Tse-Ling Wang, Ms. Liu-Shiang Kung Hwang, Mr. Richard Pao, Mr. Kevin Lee and Ms. Amy Huang to the Board of Directors of the Company. Ms. Hwang, Mr. Wang and Mr. Kevin Lee were each issued 150,000 shares of the Company’s common stock in consideration of his or her agreement to serve as a director of the Company for a period of one-year, and each of Ms. Huang and Mr. Pao received 50,000 shares of the Company’s common stock in consideration of his or her agreement to serve as a director of the Company for a period of one-year. We also issued 150,000 shares of the Company’s common stock to Mr. Shang-Chiai Kung, the Chairman of the Board, in consideration of his service for a period of one-year. The 700,000 shares of the Company’s common stock were issued on September 30, 2024 with fair value of $1,932,000. During the year ended June 30, 2025, the Company recorded $1,771,000 of stock compensation expense.
On September 1, 2024, the Company entered an employment agreement with Mr. Hong Hsin Lai who will serve as the Company’s Chief Technology Officer (“CTO”). The Company will issue Mr. Lai 50,000 shares of the Company’s common stock for the first year of his employment. The shares are to be paid in full within four months from September 1, 2024. If Mr. Lai’s employment continues beyond September 1, 2025, the Company will grant Mr. Lai 20,000 shares of the Company’s common stock each year. During the year ended June 30, 2025, the Company recorded $85,417 stock compensation expense for Mr. Lai’s services.
On September 6, 2024, the Company entered an engagement agreement with an Investor Relation (“IR”) firm. The Company will pay the IR firm $500 cash per month and 1,000 shares of the Company’s common stock per month, to be paid quarterly. During the year ended June 30, 2025, the Company recorded $8,200 stock compensation expense in respect of this arrangement.
On January 7, 2025, the Company entered an employment agreement with Mr. Andy F Wong to serve as the Company’s Chief Financial Officer (“CFO”) for an initial term expiring December 31, 2025. The agreement was approved by the Board on January 7, 2025. The Company will issue 100,000 restricted stock units which shall be deemed earned in equal monthly instalments of 8,333 shares. During the year ended June 30, 2025, the Company recorded $180,000 stock compensation expense for shares to be issued to Mr. Wong.
On January 7, 2025, the Company entered an employment agreement with Mr. Tse-Ling Wang to serve as the Company’s Chief Executive Officer (“CEO”) for an initial term expiring December 31, 2025. The agreement was approved by the Board on January 7, 2025. The Company will issue 250,000 restricted stock units which shall be deemed earned in equal monthly instalments of 20,833 shares. During the year ended June 30, 2025, the Company recorded $450,000 stock compensation expense for shares to be issued to Mr. Wang.
On October 1, 2024, the Company entered into an employment agreement with Mr. Kun-Teng Liao to serve as the Company’s director and Secretary. On January 25, 2025, the Board appointed Mr. Liao as the Company’s Chief Operating Officer (“COO”) for an initial term expiring September 20, 2025. The agreement was approved by the Board on January 25, 2025. The Company will pay Mr. Liao 50,000 shares of the Company’s common stock in the first year of employment. If the employment agreement is renewed after one-year, the Company will pay Mr. Liao 20,000 shares of the Company’s common stock each year in which he remains employed by the Company. During the year ended June 30, 2025, the Company recorded $14,166 stock compensation expense for shares to be issued to Mr. Liao.
Net
other expenses waswere $145,296 for the year ended June 30, 2025, and $22,015 for the year ended June 30, 2024,2024. and $38,366 forFor the year ended June
30, 2023.2025, net other expenses mainly consisted of interest expense of $30,409, and other expense of $114,887. For the
year ended June
30, 2024, net other expenses mainly consisted of interest expense of $23,683, which was partly offset by other
income of $1,632. For the year ended June 30, 2023, net other expenses mainly consisted of miscellaneous expenses of $29,050,
and interest expense of $9,316.
We
had net income from continuing operations of $980,951 for the year ended
June 30, 2024, compared to a net loss of $318,849$3,446,751 for the year ended June 30, 2023,2025, compared to a net income of $980,951 for the year ended June 30,
2024, an increase in our net loss of $1,299,800$4,427,702 or 407.65%.451.37%. The increase
in our net incomeloss from continuing operations was mainly due
to the grossdecrease profitin generatedour throughrevenue yacht sales which was partly offset byand increased
G&A expenses.share-based compensation as described above.
We
had $310,859 of$41,903 cash and cash equivalentsequivalents, and working capital deficit of $3,201,865$0.6 million as of June 30, 2024,2025, and generated a net income from continuing
operationsloss of $980,951$3.4
million during the year ended June 30, 2024.2025. Of the assets included in working capital, approximately prepayment to related parties of
$0.9 million. The following is a summary of cash provided by or used in each of the indicated
types of activities during the yearsyear ended
June 30, 20242025 and 2023.2024.
Net
cash provided by (used in) operating activities
Net cash used in operating activities was $458,645 for the year ended June 30, 2025, compared to net cash used in operating activities of $261,488 for the year ended June 30, 2024. The increase in the use of cash in operating activities was principally attributable to 1) the increase in our loss (after adjustments to reconcile net income (loss) to net cash used in operating activities) by $1,833,314, 2) decreased cash inflow from inventory of $801,929, 3) decreased cash inflow from tax payables by $221,909, 4) increased cash outflow from accounts payable and accounts payable to related party by $2,374,107, 5) increased cash outflow from deposit and prepayments and deposit and prepayments to related party by $695,346, which was partly offset by 1) increased cash inflow from accounts receivable and accounts receivable from related party by $2,485,250, 2) increased cash inflow from note receivable by $324,322, 3) increased cash inflow from accrued liabilities and other payables by $41,080, 4) increased cash inflow from deferred revenue by $2,871,000, and 5) decreased cash outflow on other receivables by $7,796.
Net
cash used in operating activities from continuing operations was $261,488 for the year ended June 30, 2024, compared to net cash
provided by operating activities from continuing operations of $313,226 for the year ended June 30, 2023. Net cash used in
discontinued operations was $1,239,304 for the year ended June 30, 2023. The decrease in cash inflow from operating activities from
continuing operations was principally attributable to 1) an increase in accounts receivable – related parties by $1,242,690,
2) an increase in deferred revenue by $4,636,568, and 3) an increase in note receivables by $162,831, which was partly offset by 1)
an increase in deposits and prepayments by $1,406,927, 2) an increase in inventory by $1,637,113, 3) an increase in accounts payable
of $979,007, and 4) an increase in tax payables by $140,957, as well as increased net income by $1,299,800.
There
was no cash provided by or used in investing activities for continuing operations for the yearyears ended June 30, 20242025 and 2023. Cash used in investing activities for discontinued operations was $180,787 for the year ended June
30, 2023.2024.
Net cash provided by financing activities was $187,749 for the year ended June 30, 2025, compared to net cash used in financing activities of $304,080 for the year ended June 30, 2024. Net cash provided by financing activities for the year ended June 30, 2025, consisted of proceeds from related party advances of $561,420 and loan proceeds from a third party of $124,642, which was partly offset by repayments to related parties of $358,091, and repayment of third party loans of $140,222. Net cash used in financing activities for the year ended June 30, 2024, consisted of repayments to related parties of $352,329, which was partly offset by proceeds from related parties of $48,249.
Net
cash used in financing activities for continuing operations was $304,080 for the year ended June 30, 2024, compared to net cash
provided by financing activities for continuing operations of $496,040 for the year ended June 30, 2023. Net cash provided by
financing activities for discontinued operations was $1,453,069 for the year ended June 30, 2023. Net cash used in financing activities
for continuing operations for the year ended June 30, 2024, consisted of repayments to related parties of $352,329 which was partly offset by proceeds from related parties of $48,249. Net cash provided
by financing activities for continuing operations for the year ended June 30, 2023, consisted of proceeds from loans of $553,586,
and proceeds from advances from related parties of $63,336, which was partly offset by repayment to related parties of $120,882.
TheWe
Company had $310,859 of$41,903 cash and cash equivalents and working capital deficit of approximately $3.2$0.62 million as of June 30, 2024,2025, which included
includedamounts accounts receivableprepayments from a related party -Weiguan Shipclients of $0.02$0.35 million, accountsprepayments receivable from a related party - Jiazhou
Yacht of $1.2 million, and amounts due fromto related parties of $2.5$0.94 million,million. andWe
generated the Company generateda net incomeloss of $2.9$3.45 million
(including $1.87 million gain on disposal of Weiguan ship) during the year ended June
30, 2024.2025, However,and the Companywe had an accumulated deficit of approximately $2.3 $5.75
million as of June 30, 2024.2025, and generated negative cash flow from operating activities during the period of $0.46 million. We do
not have sustained and stable income, and there is also significant uncertainty in regarding its income for the next 12
months.
We
expect that working capital requirements will continue to be funded through a combination of our existing funds, cash generated from
operationsoperations, loans from and further issuances of securities to our principal shareholders. Our working capital requirements are expected
to increase
in line with the growth of our business.
As
of the date of this Annual Report,report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or
or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital
capital expenditures or capital resources that are material to investors.
CRITICAL
ACCOUNTING POLICIES AND ESTIMATES
Our
consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements
requires us to make estimates and assumptions which affect the reported the amounts of assets, liabilities, revenue, costs and expenses
and related disclosures. Accounting policies are critical and necessary to account for the material estimates and assumptions on our
consolidated financial statements. For further information on all of our significant accounting policies, see the “Notes to Consolidated
Financial Statements” of this Annual Report.
●
Revenue recognition
In
accordance with ASC Topic 606, “Revenue from Contracts with Customers”, the Company recognizes revenues when goods or services
are transferred to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those
goods or services. In determining when and how revenues are recognized from contracts with customers, the Company performs the following
five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement
of the transaction price; (iv) allocation of the transaction price to the performance obligations, and (v) recognition of revenues
when (or as) the Company satisfies each performance obligation. The Company derives revenues from the processing, distribution, and sale
of its products.
●
Credit losses
On
January1, 2023, the Company adopted Accounting Standards Update 2016-13 “Financial Instruments — Credit Losses (Topic 326),
Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss methodology with an expected loss methodology
that is referred to as the current expected credit loss (“CECL”) methodology. The adoption of the credit loss accounting
standard has no material impact on the Company’s consolidated financial statements as of January 1, 2023.
The
Company’s account receivables and other receivables in the balance sheet are within the scope of ASC Topic 326. As the Company
has limited customers and debtors, the Company uses the loss-rate method to evaluates the expected credit losses on an individual basis.
When establishing the loss rate, the Company makes the assessment on various factors, including historical experience, credit-worthiness
of customers and debtors, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other
factors that may affect its ability to collect from the customers and debtors. The Company also provides specific provisions for allowance
when facts and circumstances indicate that the receivable is unlikely to be collected.
Expected
credit losses are recorded as allowance for credit losses on the consolidated statements of operations. After all attempts to collect
a receivable have failed, the receivable is written off against the allowance. In the event the Company recovers amount that is previously
reserved for, the Company will reduce the specific allowance for credit losses.
●
Accounts receivable
Accounts
receivable are recorded at the invoiced amount and do not bear interest and are due within contractual payment terms, generally 30 to
90 days from completion of service. Credit is extended based on an evaluation of a customer’s financial condition, the customer’s
credit-worthiness and payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past
due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. Under the current expected
credit loss model, at the end of each period, the Company specifically evaluates each individual customer’s financial condition,
credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company considers
the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments.
For receivables that are past due or not being paid according to payment terms, appropriate actions are taken to collect the amounts
due, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all reasonable
means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet
credit exposure related to its customers. As of June 30, 2024 and 2023, the Company had no allowance for doubtful accounts.
●
Income taxes
Income
taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under
this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities
are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the
financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax
positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of
being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
The
Company is subject to tax in local and foreign jurisdiction. As a result of its business activities, the Company files tax returns that
are subject to examination by the relevant tax authorities.
●
Related parties
Parties,
which can be an entity or individual, are considered to be related if the Company has the ability, directly or indirectly, to control
the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also
considered to be related if they are subject to common control or common significant influence.
●RECENT
RecentACCOUNTING accounting pronouncementsPRONOUNCEMENTS
In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements — Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC. The ASU was issued in response to the SEC’s August 2018 final amendments in Release No. 33-10532, Disclosure Update and Simplification that updated and simplified disclosure requirements that the SEC believed were duplicative, overlapping, or outdated. The guidance in ASU 2023-06 is intended to align GAAP requirements with those of the SEC and to facilitate the application of GAAP for all entities. The amendments introduced by ASU 2023-06 are effective if the SEC removes the related disclosure or presentation requirement from its existing regulations by June 30, 2027. If, by June 30, 2027, the SEC has not removed the applicable requirements from its existing regulations, the pending content of the associated amendment will be removed from the ASC and will not become effective for any entities. Early adoption is permitted. The adoption of ASU 2023-06 is not expected to have a material impact on the Company’s consolidated financial statements or related disclosures.
In
November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU
2023-07”). The amendments in ASU 2023-07 improve reportable segment disclosure requirements through enhanced disclosures about
significant segment expenses that are regularly provided to the chief operating decision maker (CODM). In addition, the amendments enhance
interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide
new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. ASU 2023-07
will be effective for annual reporting periods beginning after December 15, 2023, and interim periods within annual reporting periods
beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-01 did not have a material impact on the Company’s
consolidated financial statement presentation or disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the consolidated financial statements to provide enhanced transparency into the expense captions presented on the face of the statement of income and comprehensive income. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted, and may be applied either prospectively or retrospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented in the financial statements. On January 6, 2025, FASB issued ASU 2025-01 that clarifies for non-calendar year-end entities the interim effective date of Accounting Standards Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Public business entities are required to adopt the guidance in Update 2024-03 in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its related disclosures.
In January 2025, the FASB issued ASU 2025-01 Income Statement-Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). The FASB issued ASU 2024-03 on November 4, 2024-03 states that the amendments are effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Following the issuance of ASU 2024-03, the FASB was asked to clarify the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). Because of how the effective date guidance was written, a non-calendar year-end entity may have concluded that it would be required to initially adopt the disclosure requirements in ASU 2024-03 in an interim reporting period, rather than in annual reporting period. The FASB’s intent in the basis for conclusions of ASU 2024-03 is clear that all public business entities should initially adopt the disclosure requirements in the first annual reporting period beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.
The Company’s management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, will have a material impact on the Company’s consolidated financial statement presentation or disclosures.
What changed in the latest 10-Q
Risk Factors
Reference is made to the risks and uncertainties disclosed in Item 1A (“Risk Factors”) of our Annual Report on Form 10-K for the year ended June 30, 2025 (the “2025 Form 10-K”), which are incorporated by reference into this report. Prospective investors are encouraged to consider the risks described in the 2025 Form 10-K, Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and other information publicly disclosed or contained in documents we file with the Securities and Exchange Commission before purchasing our securities.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
General and administrative expenses consisted mainly of employee salaries and welfare, expenses for business meetings, utilities, accounting, consulting, and legal services. General and administrative expenses weresee in full comparison$163,947$206,406 for thesixnine months endedDecemberMarch 31,2025,2026, compared to$488,564$603,950 for thesixnine months endedDecemberMarch 31,2024,2025, a decrease of$324,617$397,544 or66.44%.65.82%. The decrease of general and administrative (“G&A”) expenses mainly reflected decreased professional fees by$215,815,$214,122, decreased subcontract labor expenses by$71,344,$75,134, decreased payroll expense by $49,467, decreased insurance expense by$24,861,$2,807, decrease labor pension expense by $1,232, decreased meals and entertainment expense by $8,734, decreased office expense by $4,462, decreased OTC listing fee by $4,685, decreased travel expense by $4,708 and decreased other G&A expenses by$11,000.$32,193.
see in full comparisonExisting workingBasedcapital,onfurthercurrentadvancescashand the issuance of debt instruments,resources and anticipatedcashsupportflowfromarerelatedexpectedparties,tomanagement believes the Company may beadequateable to fundourlimited operationsoverin thenextnearsixterm.months.However, there can be no assurance that such support or additional financing will be available when needed or on acceptable terms. We have no lines of credit or other bank financing arrangements apart from amounts outstanding under our EIDLloan and our loan with Taiwan Hua Nan Bank.loan. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments to our principal shareholders. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with our business and (ii) marketing expenses. We intend to finance these expenses with further issuances of equity securities and debt instruments. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current stockholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available on acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.
In 2023, we determined to focus our efforts on yacht sales in Taiwan and other selected regions throughout the world, and since that time have disposed of all of our business operations in mainland China. On July 12, 2023, our subsidiary, Vivic Corporation (Hong Kong) Co. Limited (“Vivic Hong Kong”), entered into a Stock Purchase Agreement with Yun-Kuang Kung pursuant to which Mr. Kung acquired all of the shares of our wholly-owned subsidiary, Weiguan Ship. The divestiture of Weiguan Ship completed our plan to divest of all activities other than our ongoing yacht business in Taiwan. However, we ceased Vivic Taiwan operation on August 21, 2025 due to Taiwan government’s policy of prohibiting importing ships from China, where our main supplierssee in full comparisonare.are located. We commenced the wind-down and deregistration of VivicTaiwan,Taiwan which, subject to customary procedures and approvals, is expected to be completed by June 30, 2026. In August 2025, the CompanyCompanydetermined to concentrate its operations in the United States and Southeast Asia and to discontinue pursuing the Taiwan market. Accordingly, we initiated the wind-down and deregistration of Vivic Taiwan, which was completed in April 2026. In connection with this decision, wewillexpect to focus on promoting the sales in Vivic, our U.S.entity.entity, on a going forward basis.
Net cash used in operating activities wassee in full comparison$302,787$304,578 for thesixnine months endedDecemberMarch 31,2025,2026, compared to net cash used in operating activitiesactivitiesof$443,287$511,134 for thesixnine months endedDecemberMarch 31,2024.2025. The decrease in cash used in operating activities was principally attributableattributableto 1) the decrease in our loss after adjustments to reconcile net loss to net cash used in operating activities by$532,922,$610,430, 2) decreased cash outflow from accounts payable and accounts payable to related party by$1,357,048,$1,355,245, 3) decreased cash outflow on other receivables byof$9,823,$9,566,4) increase cash inflow on deposit and prepayments from related party by $503,421 and 4) increased cash inflow on inventory by $4,150, which was partly offset by 1) decreased cash inflow from accounts receivable and accounts receivable from related party by$1,242,454,$1,242,364, 2) decreased cash inflow from note receivable by$160,391,$48,692, 3) decreased cash inflow from deposit and prepayment by$108,471, 3$114,674, 4) decreased cash inflow from accrued liabilities and other payables by$47,316,$11,625,45) increased cash outflow from deferred revenue by$125,250,$776,932, and56) increased cash outflow from tax payables by$82,137.$82,226.
On October 1, 2024, the Company entered into an employment agreement with Mr. Kun-Teng Liao to serve as the Company’s director and Secretary. On January 25, 2025, the Board appointed Mr. Liao as the Company’s Chief Operating Officer (“COO”) for an initial term expiring September 20, 2025. The agreement was approved by the Board on January 25, 2025. The Company paid Mr. Liao 50,000 shares of the Company’s common stock in the first year of employment.see in full comparisonIfEffectivetheJanuaryemployment25,agreement2026,isLiaorenewedKuntengafteragreedonetoyear,transition histheposition as Director of Marketing and Sales. The Company will pay Mr. Liao20,000asharescommission equal to one percent (1%) of theCompany’svessel’s listedcommonsalestockprice.each year in which he remains employed byDuring theCompany. During the sixnine months endedDecemberMarch 31,20252026 and2024,2025, the Company recorded$17,000$19,833 and nil stock compensation expense for shares to be issued to Mr. Liao.
On October 1, 2024, the Company entered into an employment agreement with Mr. Kun-Teng Liao to serve as the Company’s director and Secretary. On January 25, 2025, the Board appointed Mr. Liao as the Company’s Chief Operating Officer (“COO”) for an initial term expiring September 20, 2025. The agreement was approved by the Board on January 25, 2025. The Company paid Mr. Liao 50,000 shares of the Company’s common stock in the first year of employment.see in full comparisonIfEffectivetheJanuaryemployment25,agreement2026,isLiaorenewedKuntengafteragreedonetoyear,transition histheposition as Director of Marketing and Sales. The Company will pay Mr. Liao20,000asharescommission equal to one percent (1%) of theCompany’svessel’s listedcommonsalestock each year in which he remains employed by the Company.price. During the three months endedDecemberMarch 31,20252026 and2024,2025, the Company recorded$8,500$2,833 andnil$5,667 stock compensation expense, respectively, for shares to be issued to Mr. Liao.
Full comparison: every changed paragraph (41)
In
2023, we determined to focus our efforts on yacht sales in Taiwan and other selected regions throughout the world, and since that time
have disposed of all of our business operations in mainland China. On July 12, 2023, our subsidiary, Vivic Corporation (Hong Kong) Co.
Limited (“Vivic Hong Kong”), entered into a Stock Purchase Agreement with Yun-Kuang Kung pursuant to which Mr. Kung acquired
all of the shares of our wholly-owned subsidiary, Weiguan Ship. The divestiture of Weiguan Ship completed our plan to divest of all activities
other than our ongoing yacht business in Taiwan. However, we ceased Vivic Taiwan operation on August 21, 2025 due to Taiwan government’s
policy of prohibiting importing ships from China, where our main suppliers are.are located. We commenced the wind-down and deregistration
of Vivic
Taiwan, Taiwan which, subject to customary procedures and approvals, is expected to be completed by June 30, 2026. In August 2025, the
Company Company
determined to concentrate its operations in the United States and Southeast Asia and to discontinue pursuing the Taiwan market.
Accordingly, we initiated the wind-down and deregistration of Vivic Taiwan, which was completed in April 2026. In connection
with this
decision, we willexpect to focus on promoting the sales in Vivic, our U.S. entity.entity, on a going forward basis.
Comparison
of results of operations for the three months ended DecemberMarch 31, 2025,2026, and 20242025
There
were no revenuerevenues for the three months ended DecemberMarch 31, 20252026 and 2024,2025, respectively.
Cost
of revenue was nil for the three months ended DecemberMarch 31, 20252026 and 2024.2025.
There
was no gross profit (loss) for the three months ended DecemberMarch 31, 20252026 and 20242025, as we had no sales.
Selling
expenses consisted mainly of advertising, employee salaries and welfare, entertainment, and transportation expenses of the marketing
department. Selling expenses were nil for the three months ended DecemberMarch 31, 20252026, and 2024.2025.
General
and administrative expenses consisted mainly of employee salaries and welfare, expenses for business meetings, utilities, accounting,
consulting, and legal services. General and administrative expenses were $52,930$42,459 for the three months ended DecemberMarch 31, 2025,2026, compared
to $329,402$115,386 for the three months ended DecemberMarch 31, 2024,2025, a decrease of $276,472$72,927 or 83.93%.63.20%. The decrease of general and administrative
(“G&A”)
expenses mainly reflected decreased professional fees by $163,064,$42,760, decreased travelpayroll expenses by $6,062, decreased
meal and entertainment expense by $3,454, decreased insurance expense by $3,333,$24,606, and decreased payrollOTC expenselisting fee
by $92,332.$4,895.
In
addition, on and effective August 1, 2024, the board of directors (the “Board”) appointed Mr. Tse-Ling Wang, Ms. Liu-Shiang
Kung Hwang, Mr. Richard Pao, Mr. Kevin Lee, and Ms. Amy Huang to the Board of Directors of the Company. Ms. Hwang, Mr. Wang, and Mr.
Kevin Lee were each issued 150,000 shares of the Company’s common stock in consideration of his or her agreement to serve as a
director of the Company for a period of one year, and each of Ms. Huang and Mr. Pao received 50,000 shares of the Company’s common
stock in consideration of his or her agreement to serve as a director of the Company for a period of one year. We also issued 150,000
shares of the Company’s common stock to Mr. Shang-Chiai Kung, the Chairman of the Board, in consideration of his service for a
period of one year. The 700,000 shares of the Company’s common stock were issued on September 30, 2024 with fair value of $1,932,000.
During the three months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recorded nil and $483,000, respectively, from the prepayment as stock
stock compensation expense.
On
August 1, 2025, the Company entered into renewed one-year agreements with Shang-Chiai Kuang and Kung Hwang Liu Shiang to serve as the
Company’s independent directors. Under the terms of the agreements, each director is entitled to receive 30,000 shares of the Company’s
common stock as compensation. For the three months ended DecemberMarch 31, 2025,2026, the Company recorded $1,092 in stock-based compensation expense
related to these agreements.
On
August 1, 2025, the Company entered into renewed one-year agreements with Chuen-Huei Lee, Hui-Ming Pao, and Yin-Zhen Huang to serve as
independent directors. Under the terms of these agreements, each director was to receive 20,000 shares of the Company’s common
stock as compensation. On October 17, 2025, all three individuals resigned from their positions as directors of the Company. For the
three months ended DecemberMarch 31, 2025,2026, the Company recorded $243 innil stock-based compensation expense related to these agreements.
On
September 1, 2024, the Company entered an employment agreement with Mr. Hong Hsin Lai to serve as the Company’s Chief Technology
Officer (“CTO”). The agreement was approved by the Board on October 8, 2024. The Company would pay Mr. Lai 50,000 shares
of the Company’s common stock in the first year of employment. The shares were to be paid in full within four months from September
1, 2024. If the employment agreement were renewed after one year, the Company would pay Mr. Lai 20,000 shares of the Company’s
common stock each year in which he remains employed by the Company. On September 1, 2025, the Company entered a one-year renewed agreement
with Mr. Hong Hsin Lai. During the three months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recorded nil and $25,625 stock compensation
expense, respectively, for shares issued to Mr. Lai. On October 17, 2025, Mr. Hong Hsin Lai resigned from his position as Chief Technology
Officer of the Company and agreed to forgo the issuance of any stock for the period from September 1, 2025 to October 17, 2025.
On
September 6, 2024, the Company entered an engagement agreement with an Investor Relation (“IR”) firm, approved by the Board
on October 8, 2024. The Company paid the IR firm $500 cash per month and 1,000 shares of the Company’s common stock per month to
be paid quarterly. The Company terminated the service with this IR firm during the three months ended March 31, 2025. During the three
months ended DecemberMarch 31, 2024,2025, the Company recorded $6,150nil stock compensation expense in respect of this agreement.
On
January 7, 2025, the Company entered an employment agreement with Mr. Andy F. Wong to serve as the Company’s Chief Financial Officer
(“CFO”) for an initial term expiring December 31, 2025. The agreement was approved by the Board on January 7, 2025. The Company
will issue 100,000 restricted stock units which shall be deemed earned in equal monthly instalments of 8,333 shares. During the three
months ended DecemberMarch 31, 2026 and 2025, the Company recorded $30,000nil and $90,000 stock compensation expense for shares to be issued to Mr.
Wong. On October
17, 2025, Andy F. Wong resigned from his position as Chief Financial Officer of the Company.
On
January 7, 2025, the Company entered an employment agreement with Mr. Tse-Ling Wang to serve as the Company’s Chief Executive Officer
(“CEO”) for an initial term expiring December 31, 2025. The agreement was approved by the Board on January 7, 2025. The Company
would issue 250,000 restricted stock units which shall be deemed earned in equal monthly instalments of 20,833 shares. During the three
months ended DecemberMarch 31, 2026 and 2025, the Company recorded $30,000nil and $225,000 stock compensation expense for shares to be issued to Mr.
Wang. On October
17, 2025, Mr. Tse-Ling Wang resigned from his positions as President, Chief Executive Officer, and Secretary of the
Company. At the same
time, Mr. Tse-Ling Wang agreed to forgo the 87,500 shares that were to be granted for the service period from January
1, 2025 to July
31, 2025. During the period from January 7, 2025 to October 17, 2025, Mr. Tse-Ling Wang was entitled to 208,333 restricted
stock units
under the agreement. After deducting the 87,500 shares forgone as mentioned above, the remaining number of shares to be issued
is 120,833
shares.
On
October 1, 2024, the Company entered into an employment agreement with Mr. Kun-Teng Liao to serve as the Company’s director and
Secretary. On January 25, 2025, the Board appointed Mr. Liao as the Company’s Chief Operating Officer (“COO”) for an
initial term expiring September 20, 2025. The agreement was approved by the Board on January 25, 2025. The Company paid Mr. Liao 50,000
shares of the Company’s common stock in the first year of employment. IfEffective theJanuary employment25, agreement2026, isLiao renewedKunteng afteragreed oneto year,transition
his the
position as Director of Marketing and Sales. The Company will pay Mr. Liao 20,000a sharescommission equal to one percent (1%) of the Company’svessel’s
listed commonsale stock each year in which he remains employed by the Company.price. During
the three months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recorded $8,500$2,833 and nil$5,667 stock compensation expense,
respectively, for
shares to be issued to Mr. Liao.
Other
income (expenses),expenses, net
Net
other incomeexpense was $405$856 for the three months ended DecemberMarch 31, 2025.2026. Net other expenses was $117,770$6,129 for the three months ended DecemberMarch 31,
31, 2024.2025. For the three months ended DecemberMarch 31, 2025,2026, net other incomeexpense mainly consisted of other income of $1,686, which was partly
offset by interest expense of $1,281.$856. For the three months
ended DecemberMarch 31, 2024,2025, net other expenses mainly consisted of interest expense
of $7,316$6,817 andwhich was partly offset by other expensesincome of $110,454.$688.
We
had a net loss of $126,147$51,815 for the three months ended DecemberMarch 31, 2025,2026, compared to a net loss of $962,685$950,807 for the three months ended March
December 31, 2024,2025, a decrease in our net loss of $836,538$898,992 or 86.90%.94.55%. The decrease in our net loss from continuing operations was mainly
due to decreased general and administrative
expense and decreased share-based compensation as described above.
Comparison
of results of operations for the sixnine months ended DecemberMarch 31, 20252026 and 20242025
There
was no revenue for the sixnine months ended DecemberMarch 31, 2025.2026. Revenue was $44,243 for the sixnine months ended DecemberMarch 31, 2024.2025. The revenue for
for the sixnine months ended DecemberMarch 31, 20242025 was mainly from the sale of yacht models. We sold 100 yacht models to one of the Company’s
directors below cost. We considered this as marketing and advertising because the director will give our yacht models to prospective
purchasers to promote and market our yachts.
Cost
of revenue was nil and $128,584 for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. The cost of revenues in the sixnine months
ended DecemberMarch 31, 20242025 was mainly due to costs associated with yacht model sales. We sold 100 yacht models to one of the Company’s
directors below cost. We considered this as marketing and advertising because the director will give our yacht models to prospective
purchasers to promote and market our yachts.
There
was no gross profit (loss) for the sixnine months ended DecemberMarch 31, 20252026 as we had no sales. Gross loss for the sixnine months ended DecemberMarch 31,
31, 20242025 was $84,341 as we had no sales other than yacht model sales. The gross loss in the sixnine months ended DecemberMarch 31, 20242025 was the result
result of our decision to sell yacht models below cost for marketing.
Selling
expenses consisted mainly of advertising, employee salaries and welfare, entertainment, and transportation expenses of the marketing
department. Selling expenses were nil for the sixnine months ended DecemberMarch 31, 20252026, and 2024.2025.
General
and administrative expenses consisted mainly of employee salaries and welfare, expenses for business meetings, utilities, accounting,
consulting, and legal services. General and administrative expenses were $163,947$206,406 for the sixnine months ended DecemberMarch 31, 2025,2026, compared
to $488,564$603,950 for the sixnine months ended DecemberMarch 31, 2024,2025, a decrease of $324,617$397,544 or 66.44%.65.82%. The decrease of general and administrative
(“G&A”)
expenses mainly reflected decreased professional fees by $215,815,$214,122, decreased subcontract labor expenses by $71,344,
$75,134, decreased payroll
expense by $49,467, decreased insurance expense by $24,861,$2,807, decrease labor pension expense by $1,232, decreased meals and entertainment
expense by $8,734, decreased office expense by $4,462, decreased OTC listing fee by $4,685, decreased travel expense by $4,708 and decreased
other G&A expenses by $11,000.$32,193.
In
addition, on and effective August 1, 2024, the board of directors (the “Board”) appointed Mr. Tse-Ling Wang, Ms. Liu-Shiang
Kung Hwang, Mr. Richard Pao, Mr. Kevin Lee, and Ms. Amy Huang to the Board of Directors of the Company. Ms. Hwang, Mr. Wang, and Mr.
Kevin Lee were each issued 150,000 shares of the Company’s common stock in consideration of his or her agreement to serve as a
director of the Company for a period of one year, and each of Ms. Huang and Mr. Pao received 50,000 shares of the Company’s common
stock in consideration of his or her agreement to serve as a director of the Company for a period of one year. We also issued 150,000
shares of the Company’s common stock to Mr. Shang-Chiai Kung, the Chairman of the Board, in consideration of his service for a
period of one year. The 700,000 shares of the Company’s common stock were issued on September 30, 2024 with fair value of $1,932,000.
During the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recorded $161,000 and $805,000,$1,288,000, respectively, from the prepayment
as stock compensation expense.
On
August 1, 2025, the Company entered into renewed one-year agreements with Shang-Chiai Kuang and Kung Hwang Liu Shiang to serve as the
Company’s independent directors. Under the terms of the agreements, each director is entitled to receive 30,000 shares of the Company’s
common stock as compensation. For the sixnine months ended DecemberMarch 31, 2025,2026, the Company recorded $1,820$2,912 in stock-based compensation expense
related to these agreements.
On
August 1, 2025, the Company entered into renewed one-year agreements with Chuen-Huei Lee, Hui-Ming Pao, and Yin-Zhen Huang to serve as
independent directors. Under the terms of these agreements, each director was to receive 20,000 shares of the Company’s common
stock as compensation. On October 17, 2025, all three individuals resigned from their positions as directors of the Company. For the
sixnine months ended DecemberMarch 31, 2025,2026, the Company recorded $971$nil in stock-based compensation expense related to these agreements.
On
September 1, 2024, the Company entered an employment agreement with Mr. Hong Hsin Lai to serve as the Company’s Chief Technology
Officer (“CTO”). The agreement was approved by the Board on October 8, 2024. The Company paid Mr. Lai 50,000 shares of the
Company’s common stock in the first year of employment. The shares are to be paid in full within four months from September 1,
2024. If the employment agreement is renewed after one year, the Company will pay Mr. Lai 20,000 shares of the Company’s common
stock each year in which he remains employed by the Company. On September 1, 2025, the Company entered a one-year renewed agreement with
Mr. Hong Hsin Lai. During the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recorded $17,083 and $34,167$59,792 stock compensation
expense, respectively, for shares issued to Mr. Lai. On October 17, 2025, Mr. Hong Hsin Lai resigned from his position as Chief Technology
Officer of the Company and agreed to forgo the issuance of any stock for the period from September 1, 2025 to October 17, 2025.
On
September 6, 2024, the Company entered an engagement agreement with an Investor Relation (“IR”) firm, approved by the Board
on October 8, 2024. The Company paid the IR firm $500 cash per month and 1,000 shares of the Company’s common stock per month to
be paid quarterly. The Company terminated the service with this IR firm during the three months ended March 31, 2025. During the sixnine
months ended DecemberMarch 31, 2024,2025, the Company issued 3,000 shares of the Company’s common stock and recorded $8,200 stock compensation
compensation expense in respect of this agreement.
On
January 7, 2025, the Company entered an employment agreement with Mr. Andy F. Wong to serve as the Company’s Chief Financial Officer
Officer (“CFO”) for an initial term expiring December 31, 2025. The agreement was approved by the Board on January 7,
2025. The Company
issued 100,000 restricted stock units which shall be deemed earned in equal monthly instalments of 8,333 shares.
During the sixnine months
ended DecemberMarch 31, 2025,2026, the Company recorded $120,000 stock compensation expense for shares to Mr. Wong. On
October 17, 2025, Andy F. Wong
resigned from his position as Chief Financial Officer of the Company.
On
January 7, 2025, the Company entered an employment agreement with Mr. Tse-Ling Wang to serve as the Company’s Chief Executive Officer
(“CEO”) for an initial term expiring December 31, 2025. The agreement was approved by the Board on January 7, 2025. The Company
will issue 250,000 restricted stock units which shall be deemed earned in equal monthly instalments of 20,833 shares. During the sixnine
months ended DecemberMarch 31, 2025,2026, the Company recorded $220,500 stock compensation expense for shares to be issued to Mr. Wang. On October
17, 2025, Mr. Tse-Ling Wang resigned from his positions as President, Chief Executive Officer, and Secretary of the Company. At the same
time, Mr. Tse-Ling Wang agreed to forgo the 87,500 shares that were to be granted for the service period from January 1, 2025 to July
31, 2025. During the period from January 7, 2025 to October 17, 2025, Mr. Tse-Ling Wang was entitled to 208,333 restricted stock units
under the agreement. After deducting the 87,500 shares forgone as mentioned above, the remaining number of shares to be issued is 120,833
shares.
On
October 1, 2024, the Company entered into an employment agreement with Mr. Kun-Teng Liao to serve as the Company’s director and
Secretary. On January 25, 2025, the Board appointed Mr. Liao as the Company’s Chief Operating Officer (“COO”) for an
initial term expiring September 20, 2025. The agreement was approved by the Board on January 25, 2025. The Company paid Mr. Liao 50,000
shares of the Company’s common stock in the first year of employment. IfEffective theJanuary employment25, agreement2026, isLiao renewedKunteng afteragreed oneto year,transition
his the
position as Director of Marketing and Sales. The Company will pay Mr. Liao 20,000a sharescommission equal to one percent (1%) of the Company’svessel’s
listed commonsale stockprice. each year in which he remains employed byDuring the Company. During
the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recorded $17,000$19,833 and nil stock compensation expense
for shares to be issued
to Mr. Liao.
Other
income (expenses),expenses, net
Net
other lossexpense was $1,842$2,698 and $126,183$132,312 for the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, respectively. For the sixnine months ended DecemberMarch
31, 2025,2026, net other incomeexpense mainly consisted of other income of $2,727, which was partly offset by interest expense of $4,569.$5,425. For the
sixnine months ended DecemberMarch 31, 2024,2025, net other expenses mainly consisted of interest expense of $15,274,$22,091, and other expenses of $110,909.$110,221.
We
had a net loss of $500,950$552,765 for the sixnine months ended DecemberMarch 31, 2025,2026, compared to a net loss of $1,547,193$2,498,000 for the sixnine months ended March
December 31, 2024,2025, a decrease in our net loss of $1,046,243$1,945,235 or 67.62%.77.87%. The decrease in our net loss from continuing operations was mainly
due to decreased general and administrative
expense and decreased share-based compensation as described above.
We
had $17,906$13,985 cash and cash equivalents and working capital deficit of $0.15$0.19 million as of DecemberMarch 31, 20252026 and generated a net loss of $0.55
$0.50 million during the sixnine months ended DecemberMarch 31, 2025.2026. Of the assets included in working capital, prepayment to related parties amounted
amounted to $0.76$0.74 million. The following is a summary of cash provided by or used in each of the indicated types of activities during
the six nine
months ended DecemberMarch 31, 20252026 and 2024.2025.
Net
cash used in operating activities was $302,787$304,578 for the sixnine months ended DecemberMarch 31, 2025,2026, compared to net cash used in operating activities
activities of $443,287$511,134 for the sixnine months ended DecemberMarch 31, 2024.2025. The decrease in cash used in operating activities was principally attributable
attributable to 1) the decrease in our loss after adjustments to reconcile net loss to net cash used in operating activities by
$532,922, $610,430, 2) decreased
cash outflow from accounts payable and accounts payable to related party by $1,357,048,$1,355,245, 3) decreased cash
outflow on other receivables
by of$9,823, $9,566,4) increase cash inflow on deposit and prepayments from related party by $503,421 and 4) increased cash inflow on inventory
by $4,150, which was partly offset by 1) decreased
cash inflow from accounts receivable and accounts receivable from related party by $1,242,454,
$1,242,364, 2) decreased cash inflow from note
receivable by $160,391,$48,692, 3) decreased cash inflow from deposit and prepayment by $108,471, 3$114,674,
4) decreased cash inflow from accrued
liabilities and other payables by $47,316,$11,625, 45) increased cash outflow from deferred revenue by $125,250, $776,932,
and 56) increased cash
outflow from tax payables by $82,137.$82,226.
Net
cash used in investing activities was nil for the sixnine months ended DecemberMarch 31, 20252026 and 2024.2025.
Net
cash provided by financing activities was $279,580$275,954 for the sixnine months ended DecemberMarch 31, 2025,2026, compared to net cash provided by financing
activities of $186,263$262,129 for the sixnine months ended DecemberMarch 31, 2024.2025. Net cash provided by financing activities for the sixnine months ended
DecemberMarch 31, 20252026 consisted of proceeds from related party of $1,531,210,$1,539,785, which was partly offset by repayments to related parties of $711,574
$699,373 and repayment to third party loans of $552,257. Net cash provided by financing activities for the sixnine months ended December
March 31, 20242025, consisted
of proceeds from related party advances of $512,630$556,048 and loan proceeds from a loan from a third party of $92,845,$123,073, which
was partly offset by repayments
to related parties of $279,944$278,535 and repayment of loans of $139,268.$138,457.
We
had $17,906$13,985 cash and cash equivalents and working capital deficit of approximately $146,879$192,907 as of DecemberMarch 31, 2025,2026, which included prepayments
to related parties of $0.76$0.74 million and due to related parties of $0.37$0.36 million. We generated a net loss of $0.50$0.55 million during the
sixnine months ended DecemberMarch 31, 2025,2026, and we had an accumulated deficit of approximately $6.25$6.30 million as of DecemberMarch 31, 20252026 and generated
negative cash flow from operating activities during the period of $0.30 million. We do not have sustained and stable income, and there
is also significant uncertainty in regarding its income for the next 12 months.
Existing
workingBased capital,on furthercurrent advancescash and the issuance of debt instruments,resources and anticipated cashsupport flowfrom arerelated expectedparties, tomanagement believes the Company may
be adequateable to fund
our limited operations overin the nextnear sixterm. months.However, there can be no assurance that such support or additional financing will
be available when needed or on acceptable terms. We have no lines of credit or other bank financing arrangements apart from amounts outstanding
under our EIDL loan and our loan with Taiwan Hua Nan Bank.loan. Generally, we have financed operations to date through the proceeds of the
private placement of equity and debt instruments to our principal shareholders. In connection with our business plan, management anticipates
additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with our business
and (ii) marketing expenses. We intend to finance these expenses with further issuances of equity securities and debt instruments. Thereafter,
we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances
of equity or convertible debt securities will result in dilution to our current stockholders. Further, such securities might have rights,
preferences or privileges senior to our common stock. Additional financing may not be available on acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors
or opportunities, which could significantly and materially restrict our business operations.
VIVC insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding VIVC (13F)
None of the 59 investors we track reported a position in their latest 13F.