Executive Summary / Key Takeaways

• VIVIC Corp. is undergoing a significant strategic shift, narrowing its focus from broad marine tourism ventures to specialized yacht sales and services, primarily centered in Taiwan, with exclusive distribution rights for Monte Fino yachts in key Asian and Middle Eastern markets.
• A core component of VIVC's strategy is differentiation through technology, specifically the development and promotion of energy-saving and electric-powered yachts, highlighted by a recent joint development agreement and a binding order for three electric yachts valued at $2.2 million.
• Despite strategic initiatives and technological focus, VIVC faces severe financial challenges, reporting minimal revenue ($0 in Q3 2025, $44k in 9M 2025) and significant net losses ($951k in Q3 2025, $2.5M in 9M 2025) from continuing operations, a stark contrast to prior periods.
• The company's liquidity is precarious, with limited cash ($61k as of March 31, 2025) and working capital heavily reliant on related party balances, leading management to disclose substantial doubt about VIVC's ability to continue as a going concern without further external financing or significant sales increases.
• VIVC operates as a niche player in a competitive landscape dominated by large, financially robust online travel agencies and cruise operators, relying on its specialized offerings and technology to carve out market share while grappling with higher operational costs and lower efficiency compared to peers.

A Strategic Recharting in the Yacht Market

VIVIC Corp. (OTCQB: VIVC), established in 2017, has navigated a dynamic path within the pleasure boat industry. Following a change in control in late 2018, the company explored various marine-related ventures, including yacht sales, tourism, marina development, and rental services. More recently, VIVIC has undertaken a significant strategic pivot, streamlining its operations to focus primarily on yacht sales and related services from its base in Taiwan. This shift involved divesting non-core assets, notably the sale of its mainland China subsidiary, Weiguan Ship, in July 2023. The company now positions itself as a provider of yachts and comprehensive service solutions, targeting not just individual owners but also marine tourism operators, yacht clubs, and fractional ownership models. VIVC holds exclusive distribution rights for the established Monte Fino brand in key territories including the Peoples Republic of China, the Philippines, and the Middle East, alongside developing its own VIVIC-branded yachts designed for specific group and business uses.

This strategic narrowing is a direct response to the complexities and capital intensity of the broader marine industry. By focusing on sales and service, VIVC aims to leverage its relationships and market knowledge in Taiwan and its exclusive distribution regions. However, operating as a smaller entity in a market that includes large, diversified players presents inherent challenges in scale and market reach.

Technological Edge: A Bet on Efficiency and Sustainability

Central to VIVC's refined strategy is a focus on technological differentiation, particularly in the realm of energy efficiency and electric propulsion. The company is actively involved in the development of energy-saving yacht engines and, more recently, has entered into a joint development agreement with ACEL Power Inc. for electric catamaran yachts. This collaboration underscores a commitment to renewable and smart marine technology, aiming to address growing environmental consciousness and demand for sustainable tourism solutions.

While specific performance metrics for VIVC's proprietary energy-saving engines are not extensively detailed in the latest financial reporting, the competitive analysis suggests these engines could offer estimated benefits such as 20-30% greater fuel efficiency compared to standard models. This efficiency gain translates directly into lower operating costs for yacht operators, a tangible benefit that VIVC can leverage in its sales pitch. However, this technology may come with a higher upfront cost, estimated at 10-15% more per unit, which could be a barrier for some buyers.

The recent binding order from ACEL Power Inc. for three electric yachts, valued at approximately $2.2 million, represents a concrete step in commercializing this technological focus. This order, announced in March 2025, provides a glimpse into the potential revenue streams from VIVC's electric yacht initiatives and validates the strategic direction. The stated goals of VIVC's R&D and development efforts, particularly with electric yachts, are to enhance operational economies and energy efficiencies, thereby providing a competitive advantage in specific market segments like eco-tourism and group charters. For investors, the success of this technological pivot and the ability to secure further orders will be critical indicators of VIVC's potential to differentiate itself and capture market share against larger, more established competitors.

Financial Performance: A Period of Minimal Activity and Deep Losses

Despite the strategic focus and technological aspirations, VIVC's recent financial performance from continuing operations paints a challenging picture. For the three months ended March 31, 2025, the company reported no revenue, a significant decline from $1.84 million in the same period of 2024, which was primarily driven by yacht sales at the Taiwan branch. The nine months ended March 31, 2025, saw minimal revenue of just $44,243, derived mainly from the sale of yacht models below cost for marketing purposes, compared to $3.44 million in the prior year period, also predominantly from yacht sales.

This dramatic drop in revenue resulted in zero gross profit for the three months ended March 31, 2025, and a gross loss of $84,341 for the nine-month period (due to the below-cost model sales). This contrasts sharply with gross profits of $1.19 million and $1.40 million in the corresponding periods of the previous year, highlighting a severe operational downturn in the core sales business.

Operating expenses saw mixed trends. General and administrative expenses decreased by 71.48% to $115,386 in Q3 2025 (from $404,541 in Q3 2024), primarily due to decreased commission expense, though partly offset by increases in payroll and professional fees. However, stock-based compensation emerged as a significant expense, totaling $829,292 in Q3 2025 and $1.68 million for the nine months, related to share issuances to directors and officers. This non-cash expense contributed substantially to the operating loss, which stood at $944,678 for Q3 2025 and $2.36 million for the nine months, a considerable deterioration from operating income of $783,410 and $752,736 in the prior year periods, respectively.

Including other expenses, such as interest and a $110,221 penalty from the cancellation of a purchase contract with the divested Weiguan Ship in the nine-month period, VIVC reported a net loss from continuing operations of $950,807 for the three months and $2.50 million for the nine months ended March 31, 2025. This compares to net income from continuing operations of $610,165 and $557,088 in the prior year periods. The nine months ended March 31, 2024, also included $1.86 million in net income from discontinued operations, contributing to a total net income of $2.42 million in that period, underscoring the impact of the divestiture and the current operational challenges.

Trailing twelve-month (TTM) figures further illustrate the recent weakness, showing annual revenue of only $106,322, a net loss of $959,664, operating cash flow of $3,193, and negative free cash flow of $147,112. While these TTM figures may lag the most recent quarterly data, they confirm a trend of minimal revenue generation and significant losses over the past year.

Liquidity and the Going Concern Challenge

VIVC's financial health is further complicated by its liquidity position and the significant uncertainty regarding its ability to continue operations. As of March 31, 2025, the company held cash and cash equivalents of just $61,623. While reported working capital stood at approximately $2.55 million, a substantial portion of this was comprised of amounts due from related parties ($2.50 million) and deposits and prepayments to related parties ($1.48 million), offset by amounts due to related parties ($0.41 million). This composition indicates that a large portion of the stated working capital is not readily available cash for immediate operational needs.

The company generated negative cash flow from operating activities, using $511,134 during the nine months ended March 31, 2025. Financing activities provided $262,129, primarily through proceeds from related party advances ($556,048) and third-party loans ($123,073), partly offset by repayments.

Management explicitly states that the company does not have sustained and stable income and that there is significant uncertainty regarding its income for the next 12 months. These conditions, coupled with the accumulated deficit of approximately $4.80 million as of March 31, 2025, raise substantial doubt about VIVC's ability to meet its obligations and continue as a going concern for the next year.

The continuation of the company is dependent upon securing continued financial support from related parties, obtaining loans or investments from third parties, and significantly increasing sales and diversifying its customer base. While VIVC is actively pursuing additional financing through loans and equity issuances, there is no assurance of success. The financial statements do not include any adjustments that would be necessary if the company were unable to continue as a going concern, such as the potential write-down of asset values or reclassification of liabilities.

Competitive Landscape and Strategic Positioning

VIVC operates within the broader travel and tourism industry, specifically targeting the yacht and marine tourism sectors. Its competitive landscape includes a mix of large online travel agencies (OTAs) like Expedia (EXPE) and Booking Holdings (BKNG), major cruise line operators such as Royal Caribbean Group (RCL), and numerous smaller, niche yacht brokers, charter companies, and marine service providers.

Compared to the large OTAs and cruise lines, VIVC is a significantly smaller player with a regional focus (Taiwan, specific distribution territories) and a niche strategy centered on specific yacht types for group/tourism use and increasingly, electric propulsion. Financially, VIVC's recent performance is vastly weaker than its larger peers. For example, while VIVC reported minimal revenue and deep losses, companies like Expedia and Booking Holdings reported billions in revenue with healthy gross margins (around 85-97%) and positive operating and net margins (ranging from 9-32% for the latest TTM/Annual data provided). Royal Caribbean Group also reported billions in revenue with positive margins (gross margin ~48%, operating margin ~25%). VIVC's TTM profitability ratios (Gross Margin 22.22%, Operating Margin -1106.20%, Net Margin -902.60%) starkly illustrate its current financial distress compared to the robust profitability of these larger competitors. VIVC's efficiency metrics like ROIC (8% estimated in competitive analysis vs. 10-63% for peers) also lag significantly.

VIVC's strategic positioning attempts to mitigate its scale disadvantage by focusing on specialized offerings and technological differentiation. Its emphasis on yachts designed for specific group scenarios and its push into energy-efficient and electric models aim to carve out a niche market where traditional mass-market players may not compete directly or have the same specialized product focus. The integrated service solutions, including maintenance and management, also provide a potential value-add.

However, VIVC faces vulnerabilities. Its smaller scale leads to potentially higher operating costs and lower throughput compared to the efficiencies gained by larger digital platforms or fleet operators. The reliance on third-party manufacturers also introduces supply chain risks. While VIVC's technological edge in energy efficiency could attract eco-conscious customers and potentially allow for higher pricing in niche segments, the higher upfront cost of such technology could deter price-sensitive buyers. The competitive analysis suggests VIVC's niche focus might lead to better customer satisfaction in those specific segments but struggles with overall market share capture and profitability compared to the broad reach and operational efficiency of companies like Booking Holdings and Expedia.

Risks and Challenges Ahead

The path forward for VIVIC is fraught with significant risks. The most immediate and pressing is the substantial doubt about its ability to continue as a going concern. Without securing additional financing or achieving a dramatic turnaround in sales, the company's ability to fund operations is uncertain. Reliance on related party support, while helpful to date, is not a sustainable long-term solution and lacks formal commitment.

Beyond funding, VIVC faces operational and market risks. The successful execution of its strategic pivot, particularly the expansion into electric yachts and securing sales beyond the initial ACEL order, is not guaranteed. Market acceptance of its specialized VIVIC-branded yachts and its ability to effectively market the Monte Fino brand in its exclusive territories are critical unknowns. Competition from larger, better-funded players with established brands and extensive distribution networks remains a constant threat. General economic conditions impacting discretionary spending on luxury goods and tourism could also adversely affect demand.

Furthermore, the company's internal controls over financial reporting were deemed ineffective as of March 31, 2025, due to limited resources and deficiencies in financial staff expertise. While management plans to address these issues, the lack of effective controls presents a risk to financial reporting reliability.

Conclusion

VIVIC Corp. is at a critical juncture, attempting a strategic pivot towards a niche focus on yacht sales and services, underpinned by a bet on energy-efficient and electric marine technology. The recent ACEL Power order for electric yachts offers a potential glimpse into a future revenue stream and validates the company's technological direction. However, the company's current financial state is dire, marked by minimal revenue from continuing operations, significant losses, negative operating cash flow, and a precarious liquidity position heavily dependent on related party support.

The disclosed substantial doubt about VIVC's ability to continue as a going concern overshadows its strategic aspirations. While the niche focus and technological differentiation provide a theoretical competitive angle against larger industry giants, VIVC's current financial weakness and limited scale present formidable challenges to execution. For investors, VIVC represents a highly speculative opportunity. The investment thesis hinges entirely on the company's ability to successfully secure crucial external funding, translate its technological focus into sustainable, high-margin sales, and navigate a competitive landscape dominated by far larger and more financially stable entities. The coming quarters will be critical in determining if VIVC can secure the necessary resources to keep its strategic pivot afloat or if the financial headwinds prove too strong.