10-Q: Vivic Corp. Reports Zero Revenue, Going Concern Doubts

Vivic Corp. reported a net loss of $374,803 for Q1 2026 with no revenue, raising substantial doubt about its ability to continue as a going concern.

Summary

• Vivic Corp. reported zero revenue for the three months ended September 30, 2025, a significant decrease from $44,243 in the same period last year.
• The company incurred a net loss of $374,803 for the quarter, an improvement from a net loss of $584,508 in the prior year, primarily due to reduced operating expenses.
• Cash and cash equivalents decreased to $8,756 as of September 30, 2025, from $41,903 on June 30, 2025.
• A working capital deficit of approximately $0.15 million was reported as of September 30, 2025.
• The company had an accumulated deficit of approximately $6.12 million as of September 30, 2025.
• Vivic Corp. is winding down its Taiwan operations (Vivic Taiwan) by the end of 2025 due to government policy prohibiting ship imports from China, shifting focus to the U.S. and Southeast Asia.
• Several key management personnel, including the CFO, CEO, and multiple independent directors, resigned on October 17, 2025, with a new CEO/CFO appointed on the same date.
• Disclosure controls and procedures were deemed not effective as of September 30, 2025, due to limited financial staff expertise and internal control deficiencies.

Sentiment

Score: 2

Explanation: The company reported zero revenue, a significant cash burn, and explicitly stated 'substantial doubt about its ability to continue as a going concern.' This is compounded by ineffective internal controls and a high level of management turnover, including the CEO and CFO. These factors collectively indicate severe operational and financial distress, despite a reduced net loss.

Positives

• Net loss decreased by 35.88% to $374,803 for the three months ended September 30, 2025, compared to $584,508 in the prior year.
• Total operating expenses decreased by 24.24% to $372,556, driven by reductions in general and administrative expenses and share-based compensation.
• Interest expenses, net, decreased by 58.68% to $3,288 for the quarter.

Negatives

• Revenue for the three months ended September 30, 2025, was $0, a 100% decrease from $44,243 in the prior year.
• The company reported a working capital deficit of approximately $0.15 million and an accumulated deficit of $6.12 million as of September 30, 2025.
• Cash and cash equivalents significantly declined to $8,756 from $41,903 over the quarter.
• Net cash used in operating activities increased to $235,051 from $129,776 in the prior year, indicating higher cash burn.
• Substantial doubt exists about the company's ability to continue as a going concern due to lack of sustained income and negative cash flow from operations.
• Multiple key executives and directors resigned on October 17, 2025, indicating significant management instability.

Risks

• Substantial doubt about the company's ability to continue as a going concern, dependent on continued financial support from related parties or third-party financing.
• Lack of sustained and stable income, with significant uncertainty regarding income for the next 12 months.
• Inability to secure sufficient additional financing (loans or equity issuances) to sustain operations.
• Ineffective disclosure controls and procedures as of September 30, 2025, due to limited resources and deficiencies in internal control over financial reporting.
• Potential dilution to current stockholders from future issuances of equity or convertible debt securities.
• Risk that additional financing may not be available on acceptable terms, or at all, potentially restricting business operations.
• Reliance on related parties for financial support and advances, which are unsecured, interest-free, and have no fixed repayment terms.

Future Outlook

The company plans to concentrate its operations in the United States and Southeast Asia, discontinuing the Taiwan market. It aims to expand yacht brands, market territories, and potentially become an exclusive distributor in new regions. Efforts include entering other profitable marine industry areas and co-developing electric catamaran yachts. The company expects working capital requirements to be funded through existing funds, cash from operations, and further issuances of securities to principal shareholders, with additional capital raises anticipated for long-term operating requirements.

Management Comments

• Management believes the change in fiscal year end to June 30 will cause annual financial statements to more accurately reflect performance and facilitate timely periodic reports.
• Management has determined that conditions indicate it may be probable that the company would not be able to meet its obligations within one year after the report's issuance, raising substantial doubt about its ability to continue as a going concern.
• Management believes the sale of 100 yacht models to a director below cost in Q1 2024 was for marketing and advertising purposes, as the director would give them to prospective purchasers to promote yachts.

Industry Context

Vivic Corp. operates in the global yacht sales and service industry, focusing on pleasure boats, marine tourism, and electric yacht development. The company's strategic shift from Taiwan to the U.S. and Southeast Asia reflects a response to regional market dynamics, specifically Taiwan's policy prohibiting ship imports from China, where its main suppliers are. Its emphasis on yachts for multiple user group scenarios (tourism, group tours, fractional ownership) differentiates it from traditional individual luxury yacht sales. The collaboration on electric catamaran yachts aligns with broader industry trends towards sustainable and environmentally friendly marine transportation.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently party to any material legal or administrative proceedings and not aware of any claim which might lead to a material legal claim or proceeding being commenced in the foreseeable future.

Related Party Transactions

• Prepayments to Weiguan Ship of $312,169 and Fujian Jiaxin Company Limited of $444,492 as of September 30, 2025.
• Receivable from Weiguan Ship of $1,714,752 and Anhua Tu of $42,000 as of September 30, 2025.
• A Debt and Obligation Transfer Agreement on September 30, 2025, where Kung Hwang Liu Shiang transferred creditor rights (approx. $0.35 million) to Yun-Kuang Kung, who then offset $0.30 million against debt owed by Weiguan Ship to Vivic Corp. The total outstanding amount due from Weiguan Ship is $1.6 million after this settlement.
• Amounts due to related parties as of September 30, 2025: Kung Hwang Liu Shiang ($2,823), Yun-Kuang Kung ($106,198), Shang-Chiai Kung ($178,651), and Chengwei Kung ($50,000). These are unsecured, interest-free advances with no fixed repayment terms.
• Financing activities for the quarter included $1,450,055 in proceeds from related parties and $697,896 in repayments to related parties.

Stakeholder Impact

• Shareholders face significant risk of dilution from potential future equity issuances and uncertainty regarding the company's ability to continue as a going concern.
• Employees (especially management) have experienced significant turnover, which could impact operational stability and morale.
• Creditors, particularly related parties, are providing substantial financial support, but the company's going concern status raises questions about repayment capacity.
• Customers may face uncertainty regarding long-term service and product availability given the company's operational shift and financial instability.

Next Steps

• Complete the wind-down and deregistration of Vivic Taiwan by the end of 2025.
• Focus on promoting sales in the U.S. entity.
• Expand the yacht brands offered for sale and the territories in which yachts are marketed.
• Seek to become the exclusive distributor for yacht manufacturers in the United States, Southeast Asia, and other territories.
• Enter other profitable areas related to the marine industry.
• Actively pursue additional financing for operations via potential loans and equity issuances.
• Designate individuals responsible for identifying reportable developments and implement procedures to remediate material weaknesses in internal accounting functions.

Key Dates

Recommendation

The company reported zero revenue, a substantial net loss, and a significant decline in cash, leading to an explicit 'going concern' warning. This fundamental financial distress is exacerbated by ineffective internal controls and a high level of management turnover, including the CEO and CFO. While operating expenses decreased, the lack of revenue generation and reliance on related-party financing indicate a highly precarious financial position. These factors collectively present an extremely high risk profile, making the stock a strong sell for any investor.

Keywords

yacht sales, marine tourism, electric yachts, SEC filing, 10-Q, financial results, going concern, management changes, corporate governance, VIVC, Taiwan operations, Southeast Asia market, US market, Monte-Fino, Acel Power Inc.