VIVIC CORP
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001493152-24-019136
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001493152-24-032004
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 82 current paragraphs.
35 unchanged; 14 reworded; 25 added; 7 removed; 1 previous and 8 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Other income (expenses), net
Current report
Net other expenses were $31,023 for the three months ended June 30, 2024, and net other income was $26,366 for the three months ended June 30, 2023, respectively. For the three months ended June 30, 2024, the net other expenses mainly consisted of other expenses of $24,609 and interest expense of $6,414. For the three months ended June 30, 2023, the net other income mainly consisted of other income of $31,081, which was partly offset by interest expense of $4,715.
Current report
Net income from discontinued operations
Current report
There was no financial impact in the three months ended June 30, 2024, from the operations which were disposed of previously. We generated net income from discontinued operations of $113,776 for the three months ended June 30, 2023.
Current report
Revenue
Current report
Cost of revenue
Current report
Gross profit
Current report
Operating expenses
Current report
General and administrative expenses consist mainly of employee salaries and welfare, business meeting, utilities, accounting, consulting, and legal expenses. General and administrative expenses were $788,727 for the six months ended June 30, 2024, compared to $152,436 for the six months ended June 30, 2023, an increase of $636,291 or 417.42%. The increase was mainly due to increased commission expense of $388,127, increased audit fee of $40,128, increased advertising expenses of $105,415, increased legal expenses of $36,082, increased consulting expenses of $30,000, increased salary expense of $18,372, increased travel expense of $9,500, increased OTC listing fee of $7,650 and increased amortization expense of $1,202.
Current report
Other income (expenses), net
Current report
There was no financial impact in the six months ended June 30, 2024, from the operations which were disposed of previously. We incurred a net loss of $112,905 from discontinued operations for the six months ended June 30, 2023.
Current report
Net cash provided by operating activities from continuing operations was $231,396 for the six months ended June 30, 2024, compared to net cash provided by operating activities from continuing operations of $1,374,231 for the six months ended June 30, 2023. The decrease in cash inflow from operating activities was principally attributable to increased cash outflow on accounts receivables of $1,232,553, and decreased cash inflow on deferred revenue of $3,220,574, which was partly offset by increased cash inflow on deposit and prepayments of $1,154,925, increased cash inflow on other receivables of $84,073, increased cash inflow on accounts payable to related party of $903,728, increased cash inflow on accounts payable of $107,424, increased cash inflow on income taxes payable of $137,129 and decreased cash outflow on inventory of $834,789.
Current report
● Credit losses
Current report
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.
Current report
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.
Current report
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.
Current report
● Accounts receivable
Current report
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 December 31, 2023, the Company had no allowance for doubtful accounts.
Current report
● Income taxes
Current report
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.
Current report
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.
Current report
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.
Current report
● Related parties
Current report
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.
Current report
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 unaudited condensed consolidated financial statement presentation or disclosures.
Removed paragraphs (7)
Previous report
Other expenses, net
Previous report
Because we disposed of all of our other operations in 2023, there were no revenues, expenses, income or loss from discontinued operations for the three months ended March 31, 2024. Our discontinued operations incurred a net loss of $226,682 for the three months ended March 31, 2023.
Previous report
Net income (loss) for the period
Previous report
We had net income of $610,165 for the three months ended March 31, 2024, compared to net loss of $332,224 for the three months ended March 31, 2023, an increase of net income of $942,389 for the reasons explained above.
Previous report
Net cash used in operating activities from continuing operations was $76,213 for the three months ended March 31, 2024, compared to net cash used in operating activities from continuing operations of $122,399 for the three months ended March 31, 2023. The decrease in cash outflow from operating activities for the three months ended March 31, 2024 was principally attributable to an increase in net income from continuing operations of $715,707, decreased deposits and prepayments of $686,307 and an increase in our tax payable of $159,392, which was partly offset by increased accounts receivables of $301,956, increased other receivables of $3,963, increased deferred revenue of $1,175,737, and decreased accrued liabilities and other payables of $31,869.
Previous report
● Net loss per share
Previous report
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Reworded paragraphs (14)
Previous wording
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes to those statements included elsewhere in this Form 10-Q and with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. 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 important 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. You should specifically consider the various risk factors identified in our 2023 Form 10-K, that could cause actual results to differ materially from those anticipated in these forward-looking statements.
Current wording
The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and the notes to those statements included elsewhere in this Form 10-Q and with the audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”). This discussion contains forward-looking statements that involve risks and uncertainties. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date hereof. 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 important 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 to revise any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated or unanticipated events. You should specifically consider the various risk factors identified in our 2023 Form 10-K, that could cause actual results to differ materially from those anticipated in these forward-looking statements.
Previous wording
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, such as the United States, 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.”
Current wording
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.”
Previous wording
Revenue from continuing operations was $1,837,442 for the three months ended March 31, 2024. We did not generate any revenues from continuing operations in the three months ended March 31,2023. The revenue from continuing operations for the first quarter of 2024 reflects sales of yachts at our Taiwan Branch. In 2023, we determined to focus our efforts on yacht sales in Taiwan and other selected regions throughout the world and we began to generate revenues from the sale of yachts in the third quarter of 2023, when revenues were $791,043.
Current wording
Revenue from continuing operations was $2,574,818 for the three months ended June 30, 2024. We did not generate revenues from continuing operations in the three months ended June 30, 2023. The revenue from continuing operations for the three months 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 and we began to generate revenues from the sale of yachts in the third quarter of 2023, when revenues were $791,043.
Previous wording
Cost of revenue from continuing operations was $649,491 for the three months ended March 31, 2024. We did not generate revenues from continuing operations in the three months ended March 31, 2023 and thus had no cost of revenues in the period. The cost of revenues in the first quarter of 2024 was mainly due to costs associated with yacht sales.
Current wording
Cost of revenue from continuing operations was $1,749,265 for the three months ended June 30, 2024. We did not generate revenues from continuing operations in the three months ended June 30, 2023 and thus had no cost of revenues in the period. The cost of revenues in the three months ended June 30, 2024 was mainly due to costs associated with yacht sales.
Previous wording
Gross profit from continuing operations was $1,187,951 for the three months ended March 31, 2024. We did not generate any revenues from continuing operations in the three months ended March 31,2023, and, consequently, had no gross profits from continuing operations during such quarter, The gross profit in the first quarter of 2024 is all the result of yacht sales.
Current wording
Gross profit from continuing operations was $825,553 for the three months ended June 30, 2024. We did not generate any revenues from continuing operations in the three months ended June 30,2023, and, consequently, had no gross profits from continuing operations during such quarter, The gross profit in the three months ended June 30, 2024 is all the result of yacht sales.
Previous wording
General and administrative expenses consisted mainly of employee salaries and welfare, the cost of business meetings, utilities, accounting, consulting, and legal expenses. General and administrative expenses were $404,541 for the three months ended March 31, 2024, compared to $48,527 for the three months ended March 31, 2023, an increase of $356,014 or 733.64%. The increase was mainly due to an increase in commission expense of $318,007, an increase in audit fees of $10,000, increased professional fees of $2,862, increased legal expenses of $13,011, and increased travel expenses of $11,338.
Current wording
General and administrative expenses consist mainly of employee salaries and welfare, business meeting, utilities, accounting, consulting, and legal expenses. General and administrative expenses were $384,186 for the three months ended June 30, 2024, compared to $109,103 for the three months ended June 30, 2023, an increase of $275,083 or 252%, the increase was mainly due to increased commission expense of $70,120, increased audit fee of $30,128, increased advertising expenses of $105,415, increased legal expenses of $23,071, increased consulting expenses of $30,000, and increased salary expense of $15,840.
Previous wording
We had net income from continuing operations of $610,165 for the three months ended March 31, 2024, compared to a net loss of $105,542 for the three months ended March 31, 2023, an increase of $715,707. The increase in net income from continuing operations was mainly due to the revenue and gross profit generated by yacht sales and decreased other expenses, which was partly offset by increased G&A expenses and increased income tax expense.
Current wording
We had net income from continuing operations of $425,222 for the three months ended June 30, 2024, compared to a net loss of $82,737 for the three months ended June 30, 2023, an increase of $507,959 or 613.94%. The increase in net income from continuing operations was mainly due to the gross profit generated through yacht sales which was partly offset by increased G&A expenses.
Previous wording
Net other expenses were $6,008 for the three months ended March 31, 2024, and $57,015 for the three months ended March 31, 2023, respectively. For the three months ended March 31, 2024, net other expenses mainly consisted of interest expense of $6,008. For the three months ended March 31, 2023, net other expenses mainly consisted of interest expense of $2,211, and other expenses of $54,804.
Current wording
Net other expenses were $37,031 for the six months ended June 30, 2024, and $35,847 for the six months ended June 30, 2023, respectively. For the six months ended June 30, 2024, the net other expenses mainly consisted of other expenses of $24,609 and interest expense of $12,422. For the six months ended June 30, 2023, the net other expenses mainly consisted of other expenses of $28,921, and interest expense of $6,926.
Previous wording
Net loss from discontinued operations
Current wording
Net (income) loss from discontinued operations
Previous wording
We had $47,224 of cash and cash equivalents and working capital of $2,780,765 (including $2,817,646 due from a related party) as of March 31, 2024, and generated net income of $610,165 during the three months ended March 31, 2024. The following is a summary of cash provided by or used in each of the indicated types of activities during the three months ended March 31, 2024, and 2023.
Current wording
We had $310,859 of cash and cash equivalents and working capital of $3,202,096 as of June 30, 2024, and generated net income from continuing operations of $1,035,387 during the six months ended June 30, 2024. The following is a summary of cash provided by or used in each of the indicated types of activities during the six months ended June 30, 2024, and 2023.
Previous wording
Net cash from continuing operations used in or provided by operating activities.
Current wording
Net cash provided by operating activities from continuing operations
Previous wording
Net cash used in investing activities for continuing operations was $ nil for both the three months ended March 31, 2024, and 2023, respectively.
Current wording
There was no cash used in investing activities for continuing operations for both the six months ended June 30, 2024, and 2023, respectively.
Previous wording
Net cash provided by financing activities from continuing operations was $51,087 for the three months ended March 31, 2024, compared to net cash provided by financing activities from continuing operations of $164,780 for three months ended March 31, 2023. The net cash provided by financing activities from continuing operations for the three months ended March 31, 2024, consisted of proceeds of advances from related parties of $51,087. The net cash provided by financing activities from continuing operations for the three months ended March 31, 2023, consisted of proceeds of advances from related parties of $271, and proceeds from loans of $164,509.
Current wording
Net cash used in financing activities for continuing operations was $10,495 for the six months ended June 30, 2024, compared to net cash provided by financing activities for continuing operations of $491,438 for six months ended June 30, 2023. Net cash used in financing activities for continuing operations for the six months ended June 30, 2024, consisted of advance from related party of $17,095 and repayment to related party of $6,600. Net cash provided by financing activities for continuing operations for the six months ended June 30, 2023, consisted of proceeds from loans of $555,900, which was partly offset by repayment to related parties of $64,462.
Previous wording
The Company had $47,224 of cash and cash equivalents available for the Company’s continuing operations and working capital of $2,780,765 (which included $2,817,646 due from a related party) as of March 31, 2024, and generated net income of $610,165 and a net loss of $332,224 during the three months ended March 31, 2024 and 2023, respectively. In addition, we had an accumulated deficit of $2.69 million as of March 31, 2024.
Current wording
The Company had $310,859 of cash and cash equivalents and working capital of approximately $3.2 million as of June 30, 2024, which included a receivable from a related party in the amount of $2.8 million, and the Company generated net income of $1.04 million during the six months ended June 30, 2024. However, the Company had an accumulated deficit of approximately $2.3 million as of June 30, 2024.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Comparison of results of operations for the six months ended June 30, 2024, and 2023
Current report — wording carried from elsewhere
Revenue from continuing operations was $4,412,260 for the six months ended June 30, 2024. We did not generate any revenues from continuing operations in the six months ended June 30, 2023. The revenue from continuing operations for the six months 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 and we began to generate revenues from the sale of yachts in the third quarter of 2023, when revenues were $791,043.
Current report — wording carried from elsewhere
Cost of revenue from continuing operations was $2,398,756 for the six months ended June 30, 2024. We did not generate revenues from continuing operations in the same period of 2023 and thus had no cost of revenues in the period. The cost of revenues in the six months ended June 30, 2024 was mainly due to costs associated with yacht sales.
Current report — wording carried from elsewhere
Gross profit from continuing operations was $2,013,504 for the six months ended June 30, 2024. We did not generate any revenues from continuing operations in the six months ended June 30,2023, and, consequently, had no gross profits from continuing operations during such period, The gross profit in the six months ended June 30, 2024 is all the result of yacht sales.
Current report — wording carried from elsewhere
Selling expenses consist mainly of employee salaries and welfare, entertainment, and transportation expenses of the marketing department. There were no selling expenses incurred for the six months ended June 30, 2024 and 2023.
Current report — wording carried from elsewhere
Net (income) loss from continuing operations
Current report — wording carried from elsewhere
We had net income from continuing operations of $1,035,387 for the six months ended June 30, 2024, compared to a net loss of $188,283 for the six months ended June 30, 2023, an increase of $1,223,670. The increase in net income from continuing operations was mainly due to the increased gross profit which was partly offset by increased G&A expenses and increased income tax expense.
Current report — wording carried from elsewhere
Net cash provided by financing activities from continuing operations
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net cash from continuing operations provided by or used in financing activities.