VIVIC CORP

NOTE– 1 ORGANIZATION AND BUSINESS BACKGROUND

VIVIC CORP. (the “Company” or “VIVC”) was established under the corporate laws of the State of Nevada on February 16, 2017. Beginning with a change in management resulting from a change in control of the Company which occurred at the end of 2018, the Company has 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. More recently, the Company determined to focus its efforts on yacht sales in Taiwan and other selected regions throughout the world. The Company is the exclusive distributor of Monte-Fino yachts in the People’s Republic of China, the Philippines and the Middle East. Monte Fino is a well-known brand owned by Taiwan Kha Shing Yacht Company, one of the leading yacht manufacturers in the world.

The Company’s headquarters are maintained at its branch in the Republic of China (“ROC” or “Taiwan”), Vivic Corp. Taiwan Branch (“Vivic Taiwan”). It is mainly engaged in yacht procurement, sales, and leasing services in Taiwan and other countries.

On July 12, 2023, Vivic Corporation (Hong Kong) Co. Limited (“Vivic Hong Kong”), a wholly-owned subsidiary of the Company, entered into a Stock Purchase Agreement with Yun-Kuang Kung (“Mr. Kung”, son of Shang-Chiai Kung, the Company’s principal shareholder, President and Chairman), pursuant to which, Mr. Kung acquired all of the shares of the Company’s wholly owned subsidiary Guangdong Weiguan Ship Tech Co., Ltd (“Weiguan Ship”). In consideration for its interest in Weiguan Ship, the Company received RMB 1,000 ($137) and the agreement of Mr. Kung to indemnify the Company and its affiliates and hold them harmless from, against and in respect of any and all claims arising out of or related to the business of Weiguan Ship whether arising before or after the date of the Stock Purchase Agreement, whether currently known or unknown, including, without limitation any claims for taxes.

Description of subsidiaries as of December 31, 2024 is as follows:

On October 9, 2024, the Board of Directors of the Company adopted a resolution changing the fiscal year end of the Company to June 30, effective June 30, 2024. Management believes the change 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 required to be filed with the Securities and Exchange Commission.

NOTE– 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying unaudited condensed consolidated financial statements and notes.

●Basis of presentation

These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

●Use of estimates

Preparing these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods reported. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the unaudited condensed consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Such estimates may be subject to change as more current information becomes available. Actual results may differ from these estimates.

●Principles of consolidation

The unaudited condensed consolidated financial statements include the financial statements of VIVC and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

●Cash and cash equivalents

Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.

●Credit losses

On January 1, 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 unaudited condensed 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 evaluate the expected credit losses on an individual basis. When establishing the loss rate, the Company makes the assessment based 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 a receivable is unlikely to be collected.

Expected credit losses are recorded as allowance for credit losses on the unaudited condensed 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 an amount that it 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 December 31, 2024 and June 30, 2024, the Company hadno allowance for doubtful accounts.

●Advances to Suppliers

The Company makes advances to certain vendors to purchase finished goods and service. The advances are interest-free and unsecured. As of December 31, 2024 and June 30, 2024, the Company had advanced to suppliers of $317,736 and $250,794, respectively.

●Inventories

Inventories are stated at the lower of cost or net realizable value with cost determined on a weighted-average basis. Management compares the cost of inventories with the net realizable value and an allowance is made to write down inventories to market value, if lower.

●Property and equipment

Property, plant, and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on a straight-line basis over the following expected useful lives from the date on which assets become fully operational and after taking into account their estimated residual values:

Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

● Intangible assets, net

Intangible assets are stated at cost less accumulated amortization. Intangible assets represent the trademark registered in the PRC and purchased software which are amortized on a straight-line basis over a useful life of 10 years.

The Company follows ASC Topic 350 in accounting for intangible assets, which requires impairment losses to be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the assets are less than the assets’ carrying amounts. During the three and six months ended December 31, 2024 and 2023, there wereno intangible asset impairments to be recorded.

●Deferred revenue

Deferred revenue represents advance payments made by a customer for goods and services the Company will provide in the future. Due to its short-term nature, deferred revenue is usually satisfied within 12 months.

● Revenue recognition

In accordance with Accounting Standard Codification (“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 processing, distribution, and sales of its products, mainly yachts. The Company recognize its revenue at a point in time when the control of the products has been transferred to customers.

●Comprehensive income (loss)

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components, and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying unaudited condensed consolidated statements of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income (loss) is not included in the computation of income tax expense or benefit.

●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 jurisdictions. As a result of its business activities, the Company files tax returns that are subject to examination by the relevant tax authorities.

●Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of transactions. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the unaudited condensed consolidated statements of operations.

The reporting currency of the Company is the United States Dollar (“US$”) and the accompanying unaudited condensed consolidated financial statements have been expressed in US$. In addition, the Company and its subsidiaries operating or which operated in the PRC, Taiwan and Hong Kong, maintain their books and records in their local currency, Renminbi (“RMB”), New Taiwan Dollar (“TWD”) and Hong Kong dollars (“HK$”), each of which is a functional currency, being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the year. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the unaudited condensed consolidated statements of changes in stockholder’s equity (deficit).

Translation of amounts from TWD and HK$ into US$ has been made at the following exchange rates as of December 31, 2024 and June 30, 2024, and for the six months ended December 31, 2024 and 2023.

●Lease

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g., land, building, etc.), non-lease components (e.g., common area maintenance, consumables, etc.), and non-components (e.g., property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.

●Net income (loss) per share

The Company calculates net income (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of shares of common stock outstanding during the period. Diluted loss per share of common stock is computed similar to basic loss per share of common stock 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 stock were dilutive (see Note 13).

●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.

●Concentrations and credit risk

The Company’s principal financial instruments subject to potential concentration of credit risk are cash and cash equivalents, including amounts held in money market accounts. The Company places cash deposits with a federally insured financial institution. The Company maintains its cash at banks and financial institutions it considers to be of high credit quality; however, the Company’s domestic cash deposits may at times exceed the insured limit. Balances in excess of insured limitations may not be insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts.

●Fair value of financial instruments

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and notes payable): cash and cash equivalents, accounts receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximates their fair values because of the short-term nature of these financial instruments.

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of notes payable approximates the carrying amount.

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

● Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

● Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and

●Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

●Value-Added Tax (“VAT”)

Sellers and service providers are generally obligated to pay business tax for sales of goods or services within Taiwan unless the law provides otherwise. For imported goods, the business tax will be paid by the goods receivers or buyers via customs. For imported services sold by foreign companies to Taiwanese buyers, business tax shall be paid by the service buyers. However, the service buyer (corporate entity) will not be required to pay business tax if it is exclusively engaged in taxable transactions subject to either 5% or 0% VAT.

VAT is applicable to general industries, and the VAT rate is 5%. Under the VAT system, each seller collects output VAT from the buyer at the time of sale, deducts input VAT paid on purchases from output VAT, and remits the balance to the tax authority.

●Recent accounting pronouncements

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.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires disclosures of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. This ASU will be effective for annual reporting periods beginning after December 15, 2024.

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 unaudited condensed consolidated financial statement presentation or disclosures.

NOTE– 3 GOING CONCERN UNCERTAINTIES

The accompanying unaudited condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company had $53,616 of cash and cash equivalents and working capital of approximately $3.2 million as of December 31, 2024, which included amounts due from related parties of $2.5 million, deposit and prepayments to related parties of $1.5 million, and due to related parties of $0.4 million and the Company generated a net loss of $1.0 million and $1.5 million during the three and six months ended December 31, 2024. The Company had an accumulated deficit of approximately $3.8 million as of December 31, 2024 and negative cash flow from operating activities during the period of $0.4 million. The Company does not have sustained and stable income, and there is also significant uncertainty regarding its income for the next 12 months.

The continuation of the Company as a going concern through the one-year period from the date on which this report is filed is dependent upon continued financial support from its related parties or loans or investments by third parties, increasing its sales and the diversity of its customer base. The Company is actively pursuing additional financing for its operations via potential loans and equity issuances. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain its operations.

Management has determined that the above conditions indicate that it may be probable that the Company would not be able to meet its obligations within one year after the date that this report is issued. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. The unaudited condensed consolidated financial statements contained in this report do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result if the Company is unable to continue as a going concern. To date the Company has financed its operations primarily through equity investments and loans made by related parties and their affiliates in addition to loans from commercial banks and third parties. The Company may also seek funding through public or private financings, collaborative arrangements, and other possible means of financing.

In addition, the Company will seek to expand the yacht brands the Company can offer for sale, the territories in which the Company markets its yachts and, if appropriate based on the Company’s capabilities and what the Company can offer, seek to become the exclusive distributor for yacht manufacturers in Taiwan and other territories. The Company will also seek to enter other areas related to the marine industry where the Company believes it can be profitable.

NOTE– 4 INVENTORY

Inventory consisted of the following:

NOTE– 5 DEPOSIT AND PREPAYMENTS

Deposit and prepayments consisted of the following:

Prepayments mainly consisted of prepaid expenses to vendors. The prepaid service fee consisted of prepaid OTC listing fee and annual filling fee.

NOTE– 6 NOTES RECEIVABLE –BANK ACCEPTANCES

The Company sold goods to its customers and received notes (bank acceptances) from them in lieu of payment. These bank acceptances were issued by customers to the Company and will be honored by the applicable bank. The Company may hold a bank acceptance until maturity for full payment or have the bank acceptance cashed by the bank at a discount at an earlier date or transfer the bank acceptance to its vendors in lieu of payment for its obligations. As of December 31, 2024 and June 30, 2024, the Company had notes receivable of $nil and $159,708, respectively. The Company cashed the notes in full in July 2024.

NOTE– 7 PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

Depreciation expenses from continuing operation for the three months ended December 31, 2024, and 2023 were $112 and $113, respectively.

Depreciation expenses from continuing operation for the six months ended December 31, 2024, and 2023 were $223 and $227, respectively.

NOTE– 8 INTANGIBLE ASSETS

Intangible assets consisted of the following:

Amortization expense for the three months ended December 31, 2024 and 2023 were $592 and $602, respectively.

Amortization expense for the six months ended December 31, 2024 and 2023 were $1,186 and $1,207, respectively.

NOTE– 9 ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables consisted of the following:

On August 22, 2023, 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, without including sufficient detail under the circumstances presented as to why the Form 10-Q could not be timely filed. More specifically, the SEC alleged that the delay was the result of an anticipated restatement of financial statements. Further, the Company failed to acknowledge in the Form 12b-25 anticipated significant changes in its results of operations for the first quarter of 2022 as compared to the first quarter of 2021 and to provide an explanation of the changes. Without admitting or denying the findings of the SEC, the Company agreed to a cease-and-desist order that found that the Company filed one deficient Form NT and one untimely Form 8-K. In addition, the Company agreed to pay a fine of $60,000.

The Company recorded the $60,000 fine in September 2021. During the three months ended December 31, 2024 and 2023, the Company made a payment of nil and $12,150 to an escrow account, which fund was subsequently released to the SEC. During the six months ended December 31, 2024 and 2023, the Company made a payment of $9,400 and $27,150 to an escrow account, which fund was subsequently released to the SEC. As of December 31, 2024, the Company paid the penalty in full.

Accrued liabilities and other payables are the expenses that will be settled in next twelve months.

NOTE– 10 LOAN PAYABLE

On March 13, 2023, Vivic Taiwan entered a loan agreement with a third-party individual. Vivic Taiwan borrowed TWD 5,000,000 ($0.16 million) from this individual for a term of one year, with annual interest of 10%, the interest is to be paid monthly. Vivic Taiwan was required to pay the interest for the first and second months on the 15 thof the month in which the Company received the loan proceeds. During the three months ended December 31, 2024 and 2023, the Company recorded and paid interest expenses of $3,866 and $2,611, respectively. During the six months ended December 31, 2024 and 2023, the Company recorded and paid interest expenses of $7,737 and $6,555, respectively. The loan is collateralized by 162,391 shares of the Company’s common stock owned by the son of the Company’s Chairman (Mr. Yun-Kuang Kung). The fair value of 162,391 shares was $82,836 on March 13, 2023. When the loan matures, the lender has the option to ask for cash repayment from the Company or keep the 162,391 shares of the Company’s stock as repayment in full. If the lender decides to keep the 162,391 shares at maturity of the loan, the Company will repay TWD 5,000,000 ($164,042) to Yun-Kuang Kung without any interest. If the Company is not able to repay Yun-Kuang Kung by March 15, 2024, the Company is required to issue a number of shares equivalent to the loan amount based upon the fair market value of the shares at such date, plus 10% more of the equivalent shares. On March 13, 2024, the Company and the lender agreed to extend the term of this loan for an additional year.

On May 18, 2023, Vivic Taiwan entered a loan agreement with Taiwan Hua Nan Bank. Vivic Taiwan borrowed TWD 12,000,000 ($0.38 million) from the bank for a term of one year, with an annual interest rate of approximately 3%, the interest is to be paid monthly. On November 1, 2024, the Company repaid TWD 4.5 million ($0.14 million) to the bank, and the bank issued a new note for the remaining balance of TWD 7.5 million ($0.23 million) with same interest rate for the term from November 14, 2024 to May 14, 2025. On December 6, 2024, Vivic Taiwan entered into a new loan agreement with Taiwan Hua Nan Bank for loan amount of TWD 3,000,000 ($92,845). The loan is due on April 2, 2025, with an annual interest rate of approximately 3%, to be paid monthly. During the three months ended December 31, 2024 and 2023, the Company recorded and paid interest expense of $2,253 and $2,709, respectively. During the six months ended December 31, 2024 and 2023, the Company recorded and paid interest expense of $4,728 and $5,096, respectively. The loan is collateralized by a piece of land and real property. In addition, the loan is guaranteed by Yun-Kuang Kung (son of Shang-Chiai Kung CEO of Vivic Corp) and Kung Hwang Liu Shiang (spouse of Shang-Chiai Kung CEO of Vivic Corp). As of December 31, 2024, the outstanding balance of this loan was $320,220.

NOTE– 11 SBA LOAN PAYABLE

As of September 30, 2024, the future minimum EIDL loan payments for the Company to be paid by year are as follows:

On June 23, 2020, Vivic Corp. received an $87,500 Economic Injury Disaster Loan (“EIDL loan”) from the Small Business Administration (“SBA”). This is a low-interest federal disaster loan for working capital to small businesses and non-profit organizations of any size suffering substantial economic injury as a result of the Coronavirus (COVID-19) epidemic, to help businesses to meet financial obligations and operating expenses that could have been met had the disaster not occurred. This loan has an annual interest rate of 3.75% and is not forgivable. The maturity of the loan is 30 years, installment payments including principal and interest of $427 monthly will begin 30 months from the loan disbursement date. Due to the fact that the loan repayment was deferred for 30 months, the payments are going 100% toward interest since the interest started to accrue from the original disbursement date. For the three months ended December 31, 2024 and 2023, the Company made payments of interest of $1,281 and $1,281 on the EIDL loan, respectively. For the six months ended December 31, 2024 and 2023, the Company made payments of interest of $2,899 and $2,562 on the EIDL loan, respectively.

As of December 31, 2024, the future minimum EIDL loan payments for the Company to be paid by year are as follows:

NOTE– 12 STOCKHOLDERS’ EQUITY

Authorized Shares

The Company is authorized to issue 5,000,000 shares of preferred stock and 70,000,000 shares of common stock each with a par value of $0.001 per share.

Preferred Stock

As of December 31, 2024 and June 30, 2024, the Company had 832,000 shares of its Series A preferred stock issued and outstanding, with a par value of $0.001 per share, each Series A preferred share can be converted into 10 shares of the Company’s common stock. The holders of Series A preferred stock have voting rights equal to 50 votes per share of Series A preferred stock, and shall be entitled to the dividend equal to the aggregate dividends for 10 shares of common stock for every one share of Series A preferred stock.

Common Stock

The Company issued an aggregate of 700,000 shares of the Company’s common stock on September 30, 2024 with fair value of $1,932,000 to its chairman and the five new directors in consideration of their agreements to serve for the one-year beginning from August 1, 2024. The Company recorded $1,127,000 prepayment to related parties as reflected on the balance sheets. During the three months ended December 31, 2024, the Company expensed $483,000 from the prepayment as stock compensation expense (see Note 14). During the six months ended December 31, 2024, the Company expensed $805,000 from the prepayment as stock compensation expense (see Note 14).

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 will pay 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. During the three months ended December 31, 2024, the Company recorded $25,625 stock compensation expense for shares issued to Mr. Lai. During the six months ended December 31, 2024, the Company recorded $34,167 stock compensation expense for shares issued to Mr. Lai.

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 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 three months ended December 31, 2024, the Company issued 3,000 shares of the Company’s common stock and recorded $6,150 stock compensation expense in respect of this agreement. During the six months ended December 31, 2024, the Company issued 3,000 shares of the Company’s common stock and recorded $8,200 stock compensation expense in respect of this agreement.

As of December 31, 2024 and June 30, 2024, the Company had 27,410,921 and 26,657,921 shares of its common stock issued and outstanding, respectively.

NOTE– 13 NET INCOME (LOSS) PER SHARE OF COMMON STOCK

Basic net (loss) income per share is computed using the weighted average number of shares of common stock outstanding during the periods. The dilutive effect of potential common stock outstanding is included in diluted net (loss) income per share of common stock. The following table sets forth the computation of basic and diluted net loss per share for the three months ended December 31, 2024 and 2023:

NOTE– 14 RELATED PARTY TRANSACTIONS

a. Related parties

b. Deposit and prepayment - related party

As of December 31, 2024 and June 30, 2024, the Company had deposits and prepayments to Weiguan of $312,000 and $250,462.

In addition, on and effective August 1, 2024, the Board of Directors (the “Board”) of the Company 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 will each be 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 will receive 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. The Board also approved the issuance of 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 Company issued an aggregate of 700,000 shares of the Company’s common stock for the six months ended December 31, 2024 with a fair value of 1,932,000 as prepaid stock compensation expense. During the three months ended December 31, 2024, the Company expensed $483,000 from prepaid expense as stock compensation expense. During the six months ended December 31, 2024, the Company expensed 805,000 from prepaid expense as stock compensation expense. As of December 31, 2024, the Company had prepaid Chairman and Directors’ compensation of $1,127,000.

Moreover, 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 will pay 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. During the three months ended December 31, 2024, the Company recorded $25,625 stock compensation expense for shares issued to Mr. Lai. During the six months ended December 31, 2024, the Company recorded $34,167 stock compensation expense for shares issued to Mr. Lai. As of December 31, 2024, the Company had prepaid Chairman and Directors’ compensation of $68,333.

c. Due from related parties

Due from related parties consisted of the following:

As of December 31, 2024, the due from related parties consisted of the following:

d. Due to related parties

Due to related parties consisted of the following:

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or stockholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.

Due to related parties represented temporary advances to the Company by the stockholders or senior management of the Company, which were unsecured, interest-free and had no fixed terms of repayments. Imputed interests from related parties’ loan are not significant.

Apart from the transactions and balances detailed elsewhere in these accompanying unaudited condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.

NOTE– 15 COMMITMENTS AND CONTINGENCIES

As of December 31, 2024 and June 30, 2024, the Company hasno material commitments and contingencies.

NOTE– 16 SUBSEQUENT EVENTS

The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events. The Company evaluated subsequent events through the date the unaudited condensed consolidated financial statements were issued and determined the Company had the major subsequent events that need to be disclosed as following:

On January 7, 2025, the Board of Directors appointed Mr. Tse-Ling Wang to serve as the Chief Executive Officer of the Company and Mr. Andy F Wong to serve as the Chief Financial Officer of the Company. The Company entered into an employment agreement with Mr. Wang which provides for an initial term expiring December 31, 2025, after which the agreement continues on an “at will” basis. In consideration of his services, Mr. Wang is to be issued 250,000 restricted stock units which shall be deemed earned in equal monthly instalments of 20,833 shares.

The Company also entered into an employment agreement with Mr. Wong which provides for an initial term expiring December 31, 2025, after which the agreement continues on an “at will” basis. In consideration of his services Mr. Wong is to be issued 100,000 restricted stock units which shall be deemed earned in equal monthly instalments of 8,333 shares.

On January 25, 2025, the Board appointed Mr. Kun-Teng Liao as Chief Operating Officer of the Company. Mr. Kun-Teng Liao is party to an Employment Agreement with the Company which commenced October 1, 2024. The agreement may be terminated by the Company at any time, with or without cause. Mr. Liao will be issued 50,000 shares in the first year as remuneration and is to receive 20,000 shares in respect of each year served thereafter.