10-K: Vivic Corp. Reports $2.85 Million Net Income in Fiscal Year 2024, Driven by Yacht Sales

Vivic Corp. reports a significant turnaround with a net income of $2.85 million for fiscal year 2024, primarily due to the company's focus on yacht sales.

Summary

• Vivic Corp., a Nevada holding company, reported a net income of $2.85 million for the fiscal year ended June 30, 2024, a substantial improvement from a net loss of $780,326 in the previous year.
• The company's revenue from continuing operations was $5.95 million, driven by yacht sales, compared to no revenue from continuing operations in the previous year.
• The cost of revenue was $4.15 million, resulting in a gross profit of $1.8 million.
• Operating expenses totaled $641,119, including selling expenses of $127,708 and general and administrative expenses of $513,411.
• The company also reported a net income from discontinued operations of $1.87 million, primarily from the sale of its subsidiary, Weiguan Ship.
• As of June 30, 2024, Vivic Corp. had cash and cash equivalents of $310,859 and working capital of $3.2 million.
• The company's financial statements have been prepared assuming it will continue as a going concern, which is dependent on continued financial support from related parties and third-party funding.

Sentiment

Score: 6

Explanation: The document presents a mixed picture. While the company has achieved a significant financial turnaround and is generating revenue, there are substantial risks and uncertainties, including going concern issues and reliance on related party funding. The positive financial results are tempered by the company's dependence on external funding and the lack of effective internal controls.

Positives

• The company successfully transitioned to focusing on yacht sales, generating substantial revenue.
• The sale of the Weiguan Ship subsidiary resulted in a significant gain.
• The company has a positive working capital of $3.2 million.
• The company has a growing book of business with orders to achieve revenues in excess of $10 million for calendar year 2024.
• The company is the exclusive distributor of Monte Fino yachts in Asia and the Middle East.

Negatives

• The company's auditor has expressed substantial doubt about its ability to continue as a going concern.
• The company is dependent on continued financial support from related parties and third-party funding.
• The company has a limited operating history and has generated minimal revenues until recently.
• The company is highly leveraged and may need additional financing.
• The company's internal controls over financial reporting were deemed ineffective as of June 30, 2024.

Risks

• The company's ability to continue as a going concern is dependent on securing additional financing.
• The company faces intense competition in the yacht sales market.
• The company relies on third-party manufacturers, which could pose supply chain risks.
• The company's limited investment in R&D may hinder its ability to compete effectively.
• The company is subject to various regulations, including those related to environmental protection.
• The company's business is subject to economic conditions that impact consumer spending.
• The company's stock price is likely to be volatile.
• The company's management has limited experience operating a company with publicly traded shares.
• The company's intellectual property may not be adequately protected.
• The company is subject to risks associated with doing business in Taiwan, including political and climate issues.

Future Outlook

The company expects working capital requirements to be funded through existing funds, cash generated from operations, and further issuances of securities to principal shareholders. The company anticipates additional increases in operating expenses and capital expenditures related to business development and marketing. The company will seek to expand its yacht brands, territories, and enter other areas of the marine industry.

Management Comments

• Management believes the change in fiscal year end will cause the Company's annual financial statements to more accurately reflect the Company's performance and facilitate the timely preparation of its periodic reports.
• Management has determined that conditions indicate that it may be probable that the Company would not be able to meet its obligations within one year after the date of issuance of this report.

Industry Context

The company operates in the competitive high-end yacht market, which is experiencing a shift towards more eco-friendly and energy-efficient designs. The company is positioning itself to cater to yacht operators with standardized configurations, greater open space, and flexible accommodations. The company is also seeking to expand its market for luxury yachts.

Comparison to Industry Standards

• The document does not provide specific comparisons to industry standards or benchmarks.
• The company's competitors include well-established companies like Azimut and Ferretti, which have greater resources and brand recognition.
• The company is attempting to differentiate itself by targeting yacht operators rather than individual buyers, a niche market with few direct competitors.
• The company's focus on standardized designs and cost optimization is a response to the needs of yacht operators, which differs from the traditional high-end yacht market.

Management Changes

Legal Proceedings

• The company was charged by the Securities and Exchange Commission with violating Rule 12b-25 by filing a Form 12b-25 Notification of Late Filing with respect to its Report on Form 10-Q for the quarter ended March 31, 2022. The company agreed to a cease-and-desist order and paid a fine of $60,000.

Related Party Transactions

• The company has significant related party transactions, including loans, sales, and purchases with entities owned by the CEO's family members.
• The company has a receivable from Weiguan Ship for $2.36 million, which was previously eliminated at consolidation.
• The company sold yachts to Jiazhou Yacht Company for $1.51 million, with $1.23 million outstanding as accounts receivable.
• The company loaned $0.31 million to Yun-Kuang Kung, secured by a lien on a yacht.
• The company has outstanding payables to Shang-Chiai Kung and Liu-Shiang Kung Hwang for loans to the company.

Stakeholder Impact

• Shareholders may experience volatility in the stock price due to the company's financial situation and market conditions.
• Employees may be affected by the company's financial stability and potential restructuring.
• Customers may be impacted by the company's ability to deliver products and services.
• Suppliers may be affected by the company's financial stability and ability to pay for goods and services.
• Creditors may be at risk due to the company's high leverage and dependence on external funding.

Next Steps

• The company will continue to pursue additional financing for its operations.
• The company will seek to expand its yacht brands and territories.
• The company will explore other areas related to the marine industry.
• The company will improve its operational, financial, and management controls.
• The company will establish various committees and adopt appropriate charters governing the responsibilities of each committee.

Key Dates

Keywords

yacht sales, Monte Fino, Taiwan, marine industry, electric yachts, charter boats, financial results, going concern, related party transactions, risk factors