Iveda Solutions(IVDA) - 2024 Q1 - Quarterly Report

Revenue Performance - Net consolidated revenue for Q1 2024 was $0.35 million, a decrease of 84% from $2.21 million in Q1 2023, primarily due to decreased equipment sales from Iveda Taiwan[119] - Service revenue accounted for 35% of net revenue in Q1 2024, compared to 9% in Q1 2023, while equipment sales and installation revenue made up 65% in Q1 2024, down from 91% in Q1 2023[119] Cost and Expenses - Total cost of revenue was $0.16 million in Q1 2024, representing 48% of revenue with a gross margin of 52%, compared to $1.72 million (78% of revenue; gross margin of 22%) in Q1 2023[121] - Operating expenses increased by 29% to $1.34 million in Q1 2024, up from $1.04 million in Q1 2023, primarily due to increased investor relations costs[122] Losses - Loss from operations rose to $1.16 million in Q1 2024, an increase of 111% from $0.55 million in Q1 2023, driven by decreased net revenues and higher costs[124] - Net loss for Q1 2024 was $1.1 million, a 101% increase from $0.55 million in Q1 2023, attributed to lower revenues and increased investor relations expenses[127] Cash Flow - Cash and cash equivalents decreased to $3.9 million as of March 31, 2024, down from $4.8 million at the end of 2023, due to operating losses[128] - Net cash used in operating activities was ($1.11) million in Q1 2024, compared to $0.17 million provided in Q1 2023, primarily due to the net loss[129] - Net cash used in investing activities was $0.19 million in Q1 2024, primarily for the development of additional IvedaAI platforms, similar to $0.18 million in Q1 2023[130] - Net cash provided by financing activities was $0.52 million in Q1 2024, down from $1.07 million in Q1 2023, mainly from bank loans in Taiwan[131] Tax and Loss Carryforwards - As of December 31, 2023, the company had approximately $32 million in net operating loss carryforwards available for federal income tax purposes, which will begin to expire in 2025[133] - The company has approximately $5.0 million in state net operating loss carryforwards, which expire after five years[133] - The company has not recognized any benefit from federal net operating loss carryforwards in 2023 or 2022[133] Liquidity and Financial Relationships - The company reported limited liquidity and has not established a stabilized source of revenue sufficient to cover operating costs, indicating a dependency on increased sales or additional capital raising efforts[134] - The company does not believe that current levels of inflation in the United States or Taiwan have had a significant impact on its operations[138] - The company has no relationships with unconsolidated entities or financial partnerships that would expose it to off-balance sheet risks[139] - Substantially all cash is deposited in three financial institutions, with amounts in the U.S. sometimes exceeding the FDIC insurance limit[135] Accounts Receivable - Accounts receivable for the U.S.-based segment had no doubtful accounts receivable allowances for the three months ended March 31, 2024, and the year ended December 31, 2023[137] - Payment terms for the U.S.-based segment require prepayment for most products before shipment, while the Taiwan-based segment generally receives payment within one year of project commencement[137] - Delinquent receivables are written off based on individual credit valuation and specific circumstances of the customer, with no interest charged on past due receivables[137]