What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-04-01 compared with 2023-03-31 · 36 added, 82 removed, 310 unchanged (28% of the section changed)

132 unchanged sentences

For the year ended December 31, 2023, our recurring service revenue was $0.44

or 7% of net revenue, and our equipment sales and installation revenue was $4.2 million, or 93% of net revenue.

In fiscal 2021, our recurring

service revenue was $264,402, or 14% of consolidated net revenue, and our equipment sales and installation revenue was $1.65 million,

or 86% of net revenue.

The increase in total revenue in 2022 compared with the same period in fiscal 2021 is attributable primarily to

increased equipment sales from Iveda Taiwan as a result of additional long-term contracts awarded and started during 2022.

million, or 7% of net revenue, and our equipment sales and installation revenue was $6.0 million, or 93% of net revenue.

In fiscal 2022,

our recurring service revenue was $0.31 million, or 7% of consolidated net revenue, and our equipment sales and installation revenue

was $4.2 million, or 93% of net revenue.

The increase in total revenue in 2023 compared with the same period in fiscal 2022 is attributable

primarily to increased equipment sales from Iveda Taiwan as a result of additional long-term contracts awarded and started during 2023.

cost of revenue was $5.4 million (84% of revenue;

15 unchanged sentences

A majority of the increase in loss from operations was primarily due to increased operating

expense-net was $13,004 for the year ended December 31, 2022, compared with $273,295 for the year ended December 31, 2021, a decrease

of $260,291, or 95%.

The majority of the other expense in 2021 is interest expense accrued for convertible debentures, valuation of the

convertible debenture features and the value of warrants given as incentive for the convertible debentures.

Income (Expense)-Net

income (expense)-net was $96,527 other income for the year ended December 31, 2023, compared with ($13,004) other expense for the year

ended December 31, 2022, a positive change of $109,531.

The majority of the other income in 2023 is interest income from cash balances.

Non-Controlled

Portion of Joint Venture

Non-Controlled

Portion of the Philippines Joint Venture net loss was $97,605 for the year ended December 31, 2023.

loss was $3.2 million for the year ended December 31, 2023, compared with $3.3 million for the year ended December 31, 2022.

of $0.3 million, or 12%, in net loss was caused primarily by a increase in operating expenses related to a ramp up in sales and technical

of $0.1 million, or 3%, in net loss was caused primarily by a decrease in operating expenses related to a ramp up in sales and technical

support personnel as well as research and development expenses for Cerebro IoT Platform and IvedaAI.

4 unchanged sentences

segment, compared to $6.0 million in our U.S.-based segment and $1.3 million in our Taiwan-based segment as of December 31, 2022.

increase in our cash and cash equivalents is primarily a result of the $11.5 million sale of Common Stock and Pre-Funded warrants during

decrease in our cash and cash equivalents is primarily a result of the cash used in operating activities of $3.5 million and $0.9 million

investment in software platform development (Cerebro) during the year ended December 31, 2023.

There are no legal or economic factors

that materially impact our ability to transfer funds between our U.S.-based and Taiwan-based segments.

cash used in operating activities during the year ended December 31, 2023 was $3.5 million compared to $5.4 million net cash used during

the year ended December 31, 2022.

There are no legal or economic factors that materially impact our ability to transfer funds between

our U.S.-based and Taiwan-based segments.

cash used in operating activities during the year ended December 31, 2022 was $5.4 million compared to $2.0 million net cash used

during the year ended December 31, 2021.

Net cash used in operating activities for the year ended December 31, 2022 consisted

primarily of the $3.3 million net loss including $0.4 million of non-cash charges (primarily stock option compensation and common

stock issued for investor relations services), $0.8 million in accounts receivable, $0.2 million of inventory, $0.2 million of

Taiwan vendor deposits, prepaids and advances to suppliers and $1.2 million net payments for accounts payable and accrued operating

and interest expenses.

Net cash used in operating activities for the year ended December 31, 2023 consisted primarily of the

million net loss including $1.1 million of non-cash charges (primarily stock option compensation and warrants for services), $0.3

million in accounts receivable, $0.3 of inventory, prepaids and advances to suppliers in total, offset by approximately $0.5 million

in additional accrued expenses

cash used in investing activities for the year ended December 31, 2022 was $14,165.

Net cash used by investing activities during the

year ended December 31, 2021 was $24,513.

$3.2 million net loss including $0.3 million of non-cash charges (primarily stock option compensation and common stock issued for investor

relations services), $0.2 million of Taiwan vendor deposits, prepaids and advances to suppliers and $0.5 million net payments for accounts

payable and accrued operating expenses.

Net cash used in operating activities for the year ended December 31, 2022 consisted primarily

of the $3.3 million net loss including $0.4 million of non-cash charges (primarily stock option compensation and common stock issued

for investor relations services), $0.8 million in accounts receivable, $0.2 million of inventory, $0.2 million of Taiwan vendor deposits,

prepaids and advances to suppliers and $1.2 million net payments for accounts payable and accrued operating and interest expenses.

cash used in investing activities for the year ended December 31, 2023 was $0.9 million.

Net cash used by investing activities during

the year ended December 31, 2022 was $14,165.

cash provided by financing activities for the year ended December 31, 2023 was $0.9 million compared with $11.4 million provided during

the year ended December 31, 2022.

Net cash provided by financing activities in 2022 is primarily a result of the $11.5 million sale of

Common Stock and Pre-Funded warrants during the year ended December 31, 2022.

Net cash provided by financing activities in 2021 is primarily

a result of the $2.8 million sale of Common Stock with Warrants during the year ended December 31, 2021.

Net cash provided by financing activities in 2023 is primarily a result of the $1.3 million exercise

of warrants to purchase Common Stock at $1.40 per share issued with the offering of August 2022.

Net cash provided by financing activities

in 2022 is primarily a result of the $11.5 million sale of Common Stock and Pre-Funded warrants during the year ended December 31, 2023.

have experienced significant operating losses since our inception.

49 unchanged sentences

and we generally do not charge interest on past due receivables.

COVID-19 pandemic represents a fluid situation that presents a wide range of potential impacts of varying durations for different global

geographies, including locations where the Company has offices, employees, customers, vendors and other suppliers and business partners.

most businesses, the COVID-19 pandemic and efforts to mitigate the same began to have impacts on our business in March 2020.

time, much of our first fiscal quarter was completed.

During the remainder of 2020 and the first quarter of 2021, the Company observed

decreases in demand from certain customers, including primarily municipalities and commercial customers in Taiwan as well as delays in

project timelines in Taiwan.

The Company estimates that the COVID-19 pandemic resulted in decreases of approximately $1.2 million revenues

and $0.3 million gross profit contribution for the year ended December 31, 2020 and $0.2 million revenues and $0.05 million gross profit

contribution for the three months ended March 31, 2021.

However, the Company is began to experience an increase in demand for the six

months ended December 31, 2021, compared to the last half of 2020.

the fact that the Company’s products are sold through a variety of distribution channels, the Company expects its sales will experience

more volatility as a result of the changing and less predictable operational needs of many customers as a result of the COVID-19 pandemic.

The Company is aware that many companies, including many of its suppliers and customers, are reporting or predicting negative impacts

from COVID-19 on future operating results.

Although the Company observed significant declines in demand for its products from certain

customers during 2020 and the first quarter of 2021, the Company believes that the impact of the COVID-19 remains too fluid and unknown,

hindering the Company from determining the long-term demand for current products.

The Company also cannot be certain how demand may shift

over time as the impacts of the COVID-19 pandemic may go through several phases of varying severity and duration.

Company does not expect there to be material changes to its assets on its balance sheet or its ability to timely account for those assets.

The Company has also reviewed the potential impacts on future risks to the business as it relates to collections, returns and other business-related

date, travel restrictions and border closures have not materially impacted its ability to obtain inventory or manufacture or deliver

products or services to customers.

However, if such restrictions become more severe, they could negatively impact those activities in

a way that would harm the business over the long term.

Travel restrictions impacting people can restrain our ability to assist its customers

and distributors as well as impact its ability to develop new distribution channels, but at present the Company does not expect these

restrictions on personal travel to be material to our business operations or financial results.

The Company has taken steps to restrain

and monitor its operating expenses and therefore it does not expect any such impacts to materially change the relationship between costs

and revenues.

most companies, the Company has taken a range of actions with respect to how it operates to assure it complies with government restrictions

and guidelines as well as best practices to protect the health and well-being of its employees and its ability to continue operating

its business effectively.

To date, the Company has been able to operate its business effectively using these measures and to maintain

internal controls as documented and posted.

The Company also has not experienced challenges in maintaining business continuity and does

not expect to incur material expenditures to do so.

However, the impacts of COVID-19 and efforts to mitigate the same have remained unpredictable

and it remains possible that challenges may arise in the future.

actions the Company has taken so far during the COVID-19 pandemic include, but are not limited to requiring all employees who can work

from home to work from home and increasing its IT networking capability to best assure employees can work effectively outside the office.

Company currently believes revenue for the year ending December 31, 2021 has been impacted due to the conditions noted.

Company’s current cash position and its projected cash flow from operations, the Company believes that it will have sufficient

capital and or have access to sufficient capital through public and private equity and debt offerings to sustain operations for a period

of one year following the date of this filing.

If business interruptions resulting from the COVID-19 pandemic were to be prolonged or

expanded in scope, the business, financial condition, results of operations and cash flows would be negatively impacted.

will continue to actively monitor this situation and will implement actions necessary to maintain business continuity.

the periods for which financial information is presented, we do not believe that the current levels of inflation in the United States

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7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Item 10(f)

of Regulation S-K and are not required to provide the information otherwise required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis