Iveda Solutions Inc

Previous wording

We recorded net consolidated revenue of $1.53 million for the three months ended June 30, 2024, compared with $2.39 million for the three months ended June 30, 2023, a decrease of ($0.86 million), or (36%). For the three months ended June 30, 2024, our service revenue was $0.89 million, or 6% of net revenue, and our equipment sales and installation revenue was $1.45 million, or 94% of net revenue. For the three months ended June 30, 2023, our service revenue was $0.08 million, or 3% of consolidated net revenue, and our equipment sales and installation revenue was $2.32 million, or 97% of net revenue. The decrease in total revenue in 2024 compared with the same period in 2023 is attributable primarily to decreased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term contracts.

Current wording

We recorded net consolidated revenue of $2.40 million for the three months ended September 30, 2024, compared with $0.87 million for the three months ended September 30, 2023, an increase of $1.53 million, or 175%. For the three months ended September 30, 2024, our service revenue was $0.06 million, or 3% of net revenue, and our equipment sales and installation revenue was $2.34 million, or 97% of net revenue. For the three months ended September 30, 2023, our service revenue was $0.09 million, or 10% of consolidated net revenue, and our equipment sales and installation revenue was $0.79 million, or 90% of net revenue. The increase in total revenue in 2024 compared with the same period in 2023 is attributable primarily to increased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term contracts.

Previous wording

Total cost of revenue was $1.20 million (64% of revenue; gross margin of 36%) for the six months ended June 30, 2024, compared with $3.83 million (83% of revenue; gross margin of 17%) for the six months ended June 30, 2023, a decrease of ($2.63 million), or (69%). The increase in cost of revenue was primarily driven by increased Iveda Taiwan revenue. The increase in overall gross margin was primarily attributed to the higher margin service revenue.

Current wording

Total cost of revenue was $2.0 million (83% of revenue; gross margin of 17%) for the three months ended September 30, 2024, compared with $0.73 million (84% of revenue; gross margin of 16%) for the three months ended September 30, 2023, an increase of $1.26 million, or 172%. The increase in cost of revenue was primarily driven by increased Iveda Taiwan revenue. The slight increase in overall gross margin was primarily attributed to the higher margin equipment and service revenue for new customers.

Previous wording

Operating expenses were $1.02 million for the three months ended June 30, 2024, compared with $1.10 million for the three months ended June 30, 2023, a decrease of ($0.08) million, or (8%). This net decrease in operating expenses in 2024 compared with 2023 is due primarily to no significant investor relations campaigns in the US based operations during this period.

Current wording

Operating expenses were $1.01 million for the three months ended September 30, 2024, compared with $1.05 million for the three months ended September 30, 2023, a decrease of ($0.04) million, or (3%). This net decrease in operating expenses in 2024 compared with 2023 is due primarily to no significant investor relations campaigns in the US based operations during this period.

Previous wording

Loss from operations decreased to $0.51 million for the three months ended June 30, 2024, compared with $0.82 million for the three months ended June 30, 2023, a decrease of $0.31 million, or 37%. A majority of the decrease in loss from operations was primarily due to increased gross margins and reduction in operating expenses.

Current wording

Loss from operations decreased to $0.60 million for the three months ended September 30, 2024, compared with $0.91 million for the three months ended September 30, 2023, a decrease of $0.31 million, or 34%. A majority of the decrease in loss from operations was primarily due to increased revenues and related gross margins and reduction in operating expenses.

Previous wording

Other income (expense)-net was $84,294 of net other income for the six months ended June 30, 2024, compared with $22,197 of net other expense for the six months ended June 30, 2023, an increase of $62,097 of other income, or 280%. The majority of the other income for 2024 was interest income from cash in the bank.

Current wording

Other income (expense), net was $27,363 of net other income for the three months ended September 30, 2024, compared with $54,303 of net other expense for the three months ended September 30, 2023, a decrease of ($26,904) of other income, or (50%). The majority of the other income for 2024 and 2023 was interest income from cash in the bank.

Previous wording

Non-Controlling Interest of the Philippines Joint Venture was $10,497 for the three months ended June 30, 2024 compared to $59,967 for the three months ended June 30, 2023. The reduction is attributed to less pre-revenue expenses in 2024 versus the initial travel and presentation expenses of 2023 to various cities in the Philippines.

Current wording

Net Loss Attributable to Non-Controlling Interest of the Philippines Joint Venture was $19,331 for the three months ended September 30, 2024 compared to $23,522 for the three months ended September 30, 2023. The reduction is attributed to less pre-revenue expenses in 2024 versus the initial travel and presentation expenses of 2023 to various cities in the Philippines.

Previous wording

Net loss was $0.49 million for the three months ended June 30, 2024, compared with $0.76 million for the three months ended June 30, 2023. The decrease of $0.27 million, or 35%, in net loss was primarily due to increased gross margins and reduction in operating expenses.

Current wording

Net loss was $0.57 million for the three months ended September 30, 2024, compared with $0.85 million for the three months ended September 30, 2023. The decrease of $0.28 million, or 33%, in net loss was primarily due to increased revenues and related gross margins and reduction in operating expenses.

Previous wording

We recorded net consolidated revenue of $1.88 million for the six months ended June 30, 2024, compared with $4.60 million for the six months ended June 30, 2023, a decrease of ($2.71 million), or (59%). For the six months ended June 30, 2024, our service revenue was $0.21 million, or 11% of net revenue, and our equipment sales and installation revenue was $1.67 million, or 89% of net revenue. For the six months ended June 30, 2023, our service revenue was $0.28 million, or 6% of consolidated net revenue, and our equipment sales and installation revenue was $4.3 million, or 94% of net revenue. The decrease in total revenue in 2024 compared with the same period in 2023 is attributable primarily to decreased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term contracts.

Current wording

We recorded net consolidated revenue of $4.3 million for the nine months ended September 30, 2024, compared with $5.5 million for the nine months ended September 30, 2023, a decrease of ($1.2 million), or (22%). For the nine months ended September 30, 2024, our service revenue was $0.27 million, or 6% of net revenue, and our equipment sales and installation revenue was $4.0 million, or 94% of net revenue. For the nine months ended September 30, 2023, our service revenue was $0.36 million, or 7% of consolidated net revenue, and our equipment sales and installation revenue was $5.1 million, or 93% of net revenue. The decrease in total revenue in 2024 compared with the same period in 2023 is attributable primarily to decreased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term contracts.

Previous wording

Total cost of revenue was $1.03 million (67% of revenue; gross margin of 33%) for the three months ended June 30, 2024, compared with $2.11 million (88% of revenue; gross margin of 12%) for the three months ended June 30, 2023, a decrease of ($1.07 million), or (51%). The decrease in cost of revenue was primarily driven by decreased Iveda Taiwan revenue. The increase in overall gross margin was primarily attributed to the higher margin equipment and service revenue for new customers.

Current wording

Total cost of revenue was $3.2 million (74% of revenue; gross margin of 26%) for the nine months ended September 30, 2024, compared with $4.6 million (83% of revenue; gross margin of 17%) for the nine months ended September 30, 2023, a decrease of ($1.4 million), or (30%). The decrease in cost of revenue was primarily driven by decreased Iveda Taiwan revenue. The increase in overall gross margin % was primarily attributed to the higher margin equipment and service revenue for smaller contracts.

Previous wording

Operating expenses were $2.36 million for the six months ended June 30, 2024, compared with $2.14 million for the six months ended June 30, 2023, an increase of $0.22 million, or 10%. This net increase in operating expenses in 2024 compared with 2023 is due primarily to a ramp up in investor relations in the US based operations related to maintaining NASDAQ compliance.

Current wording

Operating expenses were $3.4 million for the nine months ended September 30, 2024, compared with $3.2 million for the nine months ended September 30, 2023, an increase of $0.2 million, or 6%. This net increase in operating expenses in 2024 compared with 2023 is due primarily to a ramp up in investor relations in the US based operations related to maintaining NASDAQ compliance.

Previous wording

Other income (expense)-net was $10,666 of net other income for the three months ended June 30, 2024, compared with $2,798 of net other expense for the three months ended June 30, 2023, an increase of $7,868 of other income, or 281%. The majority of the other income for 2024 was interest income from cash in the bank.

Current wording

Other income (expense), net was $111,657 of net other income for the nine months ended September 30, 2024, compared with $76,500 of net other expense for the nine months ended September 30, 2023, an increase of $35,157 of other income, or 46%. The majority of the other income for 2024 was interest income from cash in the bank.

Previous wording

Non-Controlling Interest of the Philippines Joint Venture was $20,999 for the six months ended June 30, 2024 compared to $59,967 for the six months ended June 30, 2023. The reduction is attributed less pre-revenue expenses in 2024 versus the initial travel and presentation expenses of 2023 to various cities in the Philippines.

Current wording

Net Loss Attributable to Non-Controlling Interest of the Philippines Joint Venture was $40,330 for the nine months ended September 30, 2024 compared to $83,489 for the nine months ended September 30, 2023. The reduction is attributed less pre-revenue expenses in 2024 versus the initial travel and presentation expenses of 2023 to various cities in the Philippines.

Previous wording

Net loss was $1.60 million for the six months ended June 30, 2024, compared with $1.31 million for the six months ended June 30, 2023. The increase of $0.29 million, or 23%, in net loss was primarily due to decreased net revenues and increased investor relations costs.

Current wording

Net loss was $2.16 million for the nine months ended September 30, 2024, compared with $2.14 million for the nine months ended September 30, 2023. The increase of $0.02 million, or 1%, in net loss was primarily due to increased gross margins and decreased operating costs.

Previous wording

As of June 30, 2024, we had cash and cash equivalents of $2.9 million compared to $4.8 million as of December 31, 2023. This decrease in our cash and cash equivalents for the six months ended June 30, 2024 is related to the operating losses during the six months ended June 30, 2024. There are no legal or economic factors that materially impact our ability to transfer funds between our U.S.-based and Taiwan-based segments.

Current wording

As of September 30, 2024, we had cash and cash equivalents of $3.6 million compared to $4.8 million as of December 31, 2023. This decrease in our cash and cash equivalents for the nine months ended September 30, 2024 is related to the operating losses during the nine months ended September 30, 2024 offset by a sale of common stock and pre-funded warrants during the quarter ended September 30, 2024. There are no legal or economic factors that materially impact our ability to transfer funds between our U.S.-based and Taiwan-based segments.

Previous wording

Net cash used in operating activities during the six months ended June 30, 2024 was ($2.0) million compared to $0.79 million net cash provided during the six months ended June 30, 2023. Net cash used in operating activities for the six months ended June 30, 2024 consisted primarily of the net loss of ($1.6) million. Other factors for the six months ended June 30, 2024 included ($0.55) million cash used from the increase of inventory and other current assets and by the increase of ($0.81) million of accounts receivable. Net cash provided by operating activities for the six months ended June 30, 2023 consisted primarily of the $0.98 million net collection of accounts receivable offset by net loss of ($1.3) million. Other factors for the six months ended June 30, 2023 included $0.35 million cash provided by the decrease of inventory and other current assets and the increase of $0.76 million of accounts payable and accrued expenses.

Current wording

Net cash used in operating activities during the nine months ended September 30, 2024 was ($3.2) million compared to ($1.9) million net cash used during the nine months ended September 30, 2023. Net cash used in operating activities for the nine months ended September 30, 2024 consisted primarily of the net loss of ($2.2) million. Other factors for the nine months ended September 30, 2024 included ($1.0) million cash used from the increase of inventory and by the increase of ($1.9) million of accounts receivable. Net cash used by operating activities for the nine months ended September 30, 2023 consisted primarily of the $0.8 million net collection of accounts receivable offset by net loss of ($2.1) million.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2024 was $0.30 million consisting primarily of the development of additional IvedaAI platforms. Net cash used by investing activities during the six months ended June 30, 2023 was $0.44 million consisting primarily of the development of additional IvedaAI platforms.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2024 was $0.3 million consisting primarily of the development of the IvedaAI platforms. Net cash used by investing activities during the nine months ended September 30, 2023 was $0.6 million consisting primarily of the development of the IvedaAI platforms.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2024 was $0.52 million compared with $1.0 million provided during the six months ended June 30, 2023. Net cash provided by financing activities in 2024 of $0.52 million is primarily a result of the proceeds from bank loans in Taiwan for the six months ended June 30, 2024. The cash provided for the six months ended June 30, 2023 is related primarily to the exercise of 945,900 warrants at $1.40 with net proceeds of $1.3 million offset by $0.35 million payments against short and long term loans in Taiwan during the six months ended June 30, 2023.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $2.3 million compared with $0.9 million provided during the nine months ended September 30, 2023. Net cash provided by financing activities in 2024 of $2.3 million is primarily a result of the sale of common stock and pre-funded warrants, $1.8 million, and the net proceeds from bank loans in Taiwan for the nine months ended September 30, 2024. The cash provided for the nine months ended September 30, 2023 is related primarily to the exercise of 945,900 warrants at $1.40 with net proceeds of $1.4 million offset by $0.45 million payments against short and long term loans in Taiwan during the nine months ended September 30, 2023.

Previous wording

We provide an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Payment terms for our U.S.-based segment require prepayment for most products before they are shipped and monthly Sentir licensing fees, which are due in advance on the first day of each month. For our U.S.-based segment, accounts receivable that are more than 120 days past due are considered delinquent. Payment terms for our Taiwan-based segment vary based on our agreements with our customers. Generally, we receive payment for our products and services within one year of commencing the project, except that we retain 5% of the total payment amount and release such amount one year after the completion of the project. For our U.S.-based segment, we had no doubtful accounts receivable allowances for the six months ended June 30, 2024 and year ended December 31, 2023. For our Taiwan-based segment, we set up no doubtful accounts receivable allowances for the six months ended June 30, 2024 and year ended December 31, 2023. We deem the rest of our accounts receivable to be collectible based on certain factors, including the nature of the customer contracts and past experience with similar customers. Delinquent receivables are written off based on individual credit valuation and specific circumstances of the customer, and we generally do not charge interest on past due receivables.

Current wording

We provide an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. Payment terms for our U.S.-based segment require prepayment for most products before they are shipped and monthly Sentir licensing fees, which are due in advance on the first day of each month. For our U.S.-based segment, accounts receivable that are more than 120 days past due are considered delinquent. Payment terms for our Taiwan-based segment vary based on our agreements with our customers. Generally, we receive payment for our products and services within one year of commencing the project, except that we retain 5% of the total payment amount and release such amount one year after the completion of the project. For our U.S.-based segment, we had no doubtful accounts receivable allowances for the nine months ended September 30, 2024 and year ended December 31, 2023. For our Taiwan-based segment, we set up no doubtful accounts receivable allowances for the nine months ended September 30, 2024 and year ended December 31, 2023. We deem the rest of our accounts receivable to be collectible based on certain factors, including the nature of the customer contracts and past experience with similar customers. Delinquent receivables are written off based on individual credit valuation and specific circumstances of the customer, and we generally do not charge interest on past due receivables.