Iveda Solutions(IVDA) - 2023 Q1 - Quarterly Report

Financial Performance - Net consolidated revenue for Q1 2023 was $2.21 million, an increase of $1.98 million or 855% compared to $0.23 million in Q1 2022[106] - Service revenue accounted for $0.20 million or 9% of net revenue in Q1 2023, while equipment sales and installation revenue was $2.0 million or 91% of net revenue[106] - Total cost of revenue for Q1 2023 was $1.72 million, representing 78% of revenue with a gross margin of 22%, compared to $0.09 million and 61% gross margin in Q1 2022[107] - Operating expenses increased by $0.25 million or 31% to $1.04 million in Q1 2023, primarily due to increased personnel for IvedaAI and investor relations expenses[108] - Loss from operations decreased to $0.55 million in Q1 2023, a reduction of $0.10 million or 15% compared to Q1 2022[110] - Net loss for Q1 2023 was $0.55 million, down $0.12 million or 17% from $0.67 million in Q1 2022, driven by increased net revenues[112] Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2023, were $8.4 million, up from $7.3 million in Q1 2022, attributed to the exercise of warrants[113] - Net cash provided in operating activities for Q1 2023 was $0.17 million, compared to a net cash used of $0.77 million in Q1 2022[114] - Net cash used in investing activities for Q1 2023 was $0.18 million, primarily for the development of additional IvedaAI platforms[115] - Net cash provided by financing activities for Q1 2023 was $1.07 million, up from $0.15 million in Q1 2022, primarily due to the exercise of 945,900 warrants[116] - The company has limited liquidity and its continuation as a going concern depends on generating greater revenue or raising additional funds through capital markets[119] - Substantially all cash is deposited in three financial institutions, with amounts in the U.S. potentially exceeding FDIC insurance limits[120] - The company does not require collateral for accounts receivable, which are unsecured and subject to collection risk[121] - No doubtful accounts receivable allowances were set up for both U.S. and Taiwan-based segments for Q1 2023[122] Operational Insights - Iveda Taiwan accounted for 93% of total revenue in 2022, highlighting its significance to the company's overall financial performance[101] - As of March 31, 2023, the company had approximately $32 million in net operating loss carryforwards for federal income tax purposes, which will begin to expire in 2025[118] - Current levels of inflation in the U.S. and Taiwan have not significantly impacted the company's operations[123] - The company does not have off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing and liquidity risks[124]