Iveda Solutions(IVDA) - 2023 Q3 - Quarterly Report

Revenue Performance - Net consolidated revenue for Q3 2023 was $0.87 million, a decrease of 41% from $1.47 million in Q3 2022[114]. - For the nine months ended September 30, 2023, net consolidated revenue increased to $5.47 million, up 133% from $2.35 million in the same period of 2022[115]. - Service revenue for Q3 2023 was $0.09 million, representing 10% of net revenue, while equipment sales and installation revenue was $0.78 million, or 90% of net revenue[114]. - Iveda Taiwan accounted for 93% of total revenue in 2022, highlighting its significance to the company's financial performance[109]. Cost and Expenses - Total cost of revenue for Q3 2023 was $0.73 million, with a gross margin of 16%, compared to $1.11 million and a gross margin of 24% in Q3 2022[116]. - Operating expenses for Q3 2023 were $1.05 million, a slight decrease of 2% from $1.03 million in Q3 2022[118]. - Loss from operations for Q3 2023 increased to $0.9 million, up 34% from $0.7 million in Q3 2022[121]. Income and Loss - Other income for Q3 2023 was approximately $54,000, an increase from $11,000 in Q3 2022, primarily due to interest income[123]. - Net loss for the three months ended September 30, 2023, was $0.83 million, an increase of $0.16 million or 24% compared to a net loss of $0.67 million for the same period in 2022[126]. - Net loss for the nine months ended September 30, 2023, was $2.1 million, a decrease of $0.3 million or 11% compared to a net loss of $2.4 million for the same period in 2022[127]. - Other income for the nine months ended September 30, 2023, was approximately $76,000, a net increase of $84,000 compared to a net expense of ($8,000) for the same period in 2022[124]. Cash Flow - Cash and cash equivalents as of September 30, 2023, were $5.6 million, down from $7.3 million as of December 31, 2022, primarily due to operating losses[128]. - Net cash used in operating activities for the nine months ended September 30, 2023, was ($1.9) million, an improvement compared to ($3.3) million for the same period in 2022[129]. - Net cash used in investing activities for the nine months ended September 30, 2023, was $0.64 million, primarily for the development of additional IvedaAI platforms[130]. - Net cash provided by financing activities for the nine months ended September 30, 2023, was $0.84 million, a significant decrease from $12.6 million for the same period in 2022[131]. Financial Position and Risks - The company has approximately $32 million in net operating loss carryforwards available for federal income tax purposes, which will begin to expire in 2025[132]. - The company has limited liquidity and has not established a stabilized source of revenue sufficient to cover operating costs, making its continuation as a going concern dependent on generating greater revenue or raising additional funds[133]. - The company does not have any off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing, liquidity, market, or credit risk[138]. Business Model and Strategy - The company has evolved its core product line to include AI intelligent search technology and IoT devices in response to digital transformation demands[95]. - Iveda's business model includes dual revenue streams from hardware sales and monthly licensing fees through partnerships with service providers[107].