Iveda Solutions(IVDA) - 2023 Q2 - Quarterly Report

Financial Performance - Net consolidated revenue for Q2 2023 was $2.39 million, a 267% increase from $0.65 million in Q2 2022[108] - For the first half of 2023, net consolidated revenue reached $4.60 million, up 421% from $0.88 million in the same period of 2022[109] - Equipment sales and installation revenue constituted 97% of net revenue in Q2 2023, compared to 91% in Q2 2022[108] - Total cost of revenue for Q2 2023 was $2.11 million, representing 88% of revenue and a gross margin of 12%[110] - Operating expenses for Q2 2023 were $1.1 million, a decrease of 12% from $1.2 million in Q2 2022[112] - Loss from operations decreased to $0.82 million in Q2 2023, down 22% from $1.06 million in Q2 2022[115] - Net loss for the three months ended June 30, 2023, was $0.76 million, a decrease of $0.31 million or 29% compared to the same period in 2022[120] - Net loss for the six months ended June 30, 2023, was $1.3 million, down $0.36 million or 21% from $1.7 million in the same period in 2022[121] Cash Flow and Liquidity - Cash and cash equivalents increased to $8.6 million as of June 30, 2023, compared to $7.3 million as of December 31, 2022, primarily due to the exercise of 945,900 warrants[122] - Net cash provided in operating activities for the six months ended June 30, 2023, was $0.85 million, a significant improvement from net cash used of ($2.18) million in the same period in 2022[123] - Net cash used in investing activities for the six months ended June 30, 2023, was $0.44 million, primarily for the development of additional IvedaAI platforms[124] - Net cash provided by financing activities for the six months ended June 30, 2023, was $0.94 million, compared to $7.0 million in the same period in 2022[125] - Company has limited liquidity and has not established a stabilized source of revenue sufficient to cover operating costs[127] Tax and Financial Risks - Approximately $32 million in net operating loss carryforwards available for federal income tax purposes, beginning to expire in 2025[126] - Company does not have any off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing and liquidity risks[132] Market and Business Model - Iveda Taiwan accounted for 93% of total revenue in 2022, highlighting its significance to the company's financial performance[103] - The company’s AI intelligent video search technology enhances traditional video surveillance systems, responding to global digital transformation demands[89] - Iveda's business model includes dual revenue streams from hardware sales and monthly licensing fees, leveraging partnerships with service providers[101] Economic Environment - No significant impact from current levels of inflation in the United States or Taiwan on operations[131]