FORWARD-LOOKING STATEMENTS

Statements made in this Annual Report that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act ") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such

as "may, ""will, ""expect, ""believe, ""anticipate, ""estimate, ""approximate" or "continue, " or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements.

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.





Overview

VIVIC CORP. ("VIVC") is a corporation established under the corporation laws in the State of Nevada on February 16, 2017. Starting December 27, 2018, associated with the change of management, we expanded our business operations to include new types of marine tourism. In addition, we started making efforts to enter into the businesses of constructing marinas and constructing yachts in the mainland China under the brand of Monte Fino. Monte Fino is a famous yacht brand owned by Taiwan Kha Shing Yacht Company, one of the leading yacht manufacturers in the world.

It has also developed and operates "Joy Wave", an online yacht rental and leisure service business in Guangzhou, China. In the mainland China and Taiwan, primarily through the Internet, we provide third-party yacht and marine tourism services. This marine tourism involves high quality coastal tourism attractions in Taiwan and China including Hainan, Guangdong, Xiamen, and Quanzhou.

In the field of marine tourism, the number of yachts that can be rented has been increased through a yacht-sharing program system, which can provide services for more customers.


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We also started to develop energy-saving yacht engines. Because it has advanced technology, it can achieve up to 50% energy efficiency. This energy-saving and innovative technology may be applied to new energy-saving engines for yachts. This innovative technology may bring favorable changes to the yachting industry and promote a low-carbon tourism for global environmental protection.





RESULTS OF OPERATIONS

Our business has been impacted by the COVID-19 pandemic with the authority's implementation of various preventive measures including, but not limited to, travel bans and restrictions, mandatory quarantine requirements, limited business activities and operations, and shelter-in-place orders. These measures have led to, and are continuing to lead to, business slowdowns or shutdowns worldwide. The global economy and financial markets have been adversely influenced as well. Considering the features of our business in the tourism and recreation industries, the COVID-19 pandemic has caused a reduction in the demand for recreational trips and activities. Our business has been experiencing the downturn with the COVID-19 pandemic. It is expected that our business will be resumed, at least, after the abolition of the travel restrictions and mandatory quarantine requirements.





RESULTS OF OPERATIONS

Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recover ability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We generated net revenues of $244,191 and $243,508 for years ended December 31, 2021 and 2020, respectively. The increase in net revenues was primarily because the revenue deriving from consulting services rendered on sales and marketing of yachts increased.

The cost of revenue incurred were $366,852 and $3,913 for years ended December 31, 2021 and 2020, respectively.

The gross profits were $(122,661) and $239,595 for the years ended December 31, 2021 and 2020, respectively. The falling gross profit in 2021 was essentially caused by the COVID- 19 pandemic, which unfavorably influenced our consulting service fee on sales and marketing of yachts.

The general and administrative expenses incurred were $1,263,691 and $1,261,761 for years ended December 31, 2021 and 2020, respectively. General and administrative expenses were basically the business expenses and corporate overhead.

Impairment loss was $87,414 and $0 for year ended December 31, 2021 and 2020, respectively. The impairment loss in 2021 was primarily due to the impairment loss on goodwill.

Other income was $176,189 and $35,909 for year ended December 31, 2021 and 2020, respectively. The increase in other income was primarily because the increase in subsidy income.

The net losses were $2,662,829 and $987,524 for the year ended December 31, 2021 and 2020, respectively. The main reason for the increased losses was the $1,340,664 loss on loan settlement.





LIQUIDITY AND GOING CONCERN

The Company has suffered from net loss of $2,662,829 during the year ended December 31, 2021. Also, at December 31, 2021, the Company has incurred the accumulated deficit of $3,865,450 and working capital deficit of $499,399. As of December 31, 2021, the Company had approximately $80,306 of cash and cash equivalents. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company's business.

Cash Flows from Operating Activities

The net cash used in operating activities were $(967,216) and (1,343,316) for the years ended December 31, 2021 and 2020, respectively. For year ended December 31, 2021, the most affected the net cash used in operating activities were the net loss $2,662,829 offset by the loss on loan settlement of $1,340,664 and increase in receipt in advance $204,442. For the year ended December 31, 2020, the cash used in operating activities for year ended December 31, 2020 mostly were changes in deposits and prepayments $77,213, other receivable $30,362, accrued liabilities and other payable $235,871, deferred revenue $36,841 and income tax payable $6,388.

Cash Flows from Investing Activities

The net cash used in investing activities were $350,297 and $2,921 for the years ended December 31, 2021 and 2020, respectively. The change is primarily attributable to an increase in cash used in acquisition of subsidiary and purchase of property, plant and equipment for the year ended December 31, 2021.

Cash Flows from Financing Activities

The net cash provided by financing activities were $920,901 for the years ended December 31, 2021 and $1,302,101 for the year ended December 31, 2020. The net cash provided for these two periods was mostly attributed from the cash proceeds from loans and issuance of common stocks. For the year ended December 31, 2021, the cash used in financing activities were repayment of related party $161,053 and the cash generated from financing activities included proceeds from loans $1,081,954. For the year ended December 31, 2020, the cash used in financing activities were repayment to related parties $93,715 and repayment of lease liability $7,032 and the cash generated from financing activities included proceed from issuance of common stock $1,308,316 and proceeds from promissory note $87,500, which was the COVID- 19 economic injury disaster loan and offered by The U.S. Small Business Administration.


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Going Concern

The independent auditors' report accompanying our financial statements contain a note expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

For the year ended December 31, 2021, we have not established a recurring source of revenue to sufficiently cover its operating costs in the next twelve months. These factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital and implement business and expansion plans. These consolidated financial statements do not include any adjustments to the recover ability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Our management believes that the current actions to obtain additional funding and implement our strategic plans provide the opportunity for us to continue as a going concern. There are no assurances that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.

PLAN OF OPERATION AND FUNDING

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with business and (ii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long- term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such

securities might have rights, preferences or privileges senior to our

common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

MATERIAL COMMITMENTS

As of the date of this Annual Report, we do not have any material commitments.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Annual Report, we do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

SIGNIFICANT ACCOUNTING POLICIES

Our consolidated financial statements are prepared in accordance with U.S. GAAP.

The preparation of these consolidated financial statements requires us to make estimates and assumptions which affect the reported the amounts of assets, liabilities, revenue, costs and expenses and related disclosures. Accounting policies are critical and necessary to account for the material estimates and assumptions on our consolidated financial statements. For further information on all of our significant accounting policies, see the "Notes to Consolidated Financial Statements" of this Annual Report.

· Revenue recognition

In accordance with 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 the processing, distribution, and sale of its products.

· Net loss per share

The Company calculates net 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 common shares 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

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number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

· Recent accounting pronouncements

In April 2019, the FASB issued ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments" ("ASU 2019-04") which clarifies treatment of certain credit losses. In May 2019, the FASB issued ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief" ("ASU 2019-05") which provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. In November 2019, the FASB issued ASU No. 2019- 11, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses" ("ASU 2019- 11"), which provides guidance around how to report expected recoveries. In February 2020, the Financial Accounting Standards Board issued ASU No. 2020-02, "Financial Instruments - Credit Losses" (Topic 326) ("ASU 2020-02") which provides updated guidance on how an entity should measure credit losses on financial instruments and delayed the effective date of the original pronouncement for smaller reporting companies. ASU 2016- 13, ASU 2018- 19, ASU 2019-04, ASU 2019-05, ASU 2019- 11 and ASU 2020-02 (collectively, "ASC 326") are effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. The adoption of ASC 326 did not have a material impact on the Company's recognition of financial instruments within the scope of the standard.

In December 2019, the FASB issued ASU No 2019- 12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes" ("ASU 2019- 12"). ASU 2019- 12 removes certain exceptions to the general principles in Topic 740 in Generally Accepted Accounting Principles. ASU 2019- 12 is effective for public entities for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company does not expect ASU 2019- 12 to have a material effect on the Company's current financial position, results of operations or financial statement disclosures.

In March 2020, the FASB issued ASU 2020-03, "Codification Improvements to Financial Instruments" ("ASU 2020-03"). ASU 2020-03 improves and clarifies various financial instruments topics. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The Company adopted ASU 2020-03 upon issuance, which did not have a material effect on the Company's current financial position, results of operations or financial statement disclosures. --------------------------------------------------------------------------------


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In March 2020, the FASB issued ASU No 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04"). ASU 2020-04 provides temporary optional expedients and exceptions to the US GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. ASU 2020-04 is effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company does not expect ASU

2020-04 to have a material effect on the Company's current financial position, results of operations or financial statement disclosures.

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