Iveda's Annual Results and Doubtful Future
Last year, hosted / monitoring video provider Iveda Solutions [link no longer available] went public. Examining their recently released 10k / annual report indicates major concerns and only minor improvements. The report is quite detailed on the challenges faced and is recommended reading for those wanting to understand the challenges in entering the monitoring video market.
Here are key metrics and points from the report:
- "The Company generated accumulated losses of $4,746,835 through December 31, 2009 and has a working capital deficit of approximately $734,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern. "
- "Iveda currently has and will continue to have significant capital requirements to fund its growth. Iveda anticipates, based on its currently proposed intentions and assumptions relating to its operations, that substantial additional capital will be needed to satisfy Iveda’s cash requirements to implement its growth plan."
- The company has raised about $5 Million since launch in 2005, with most recent fundraising of $1.4 Million in January 2010.
- "As of April 1, 2010, Iveda had approximately $682,000 cash on hand. At Iveda’s current estimated burn rate of $110,000 per month, Iveda has sufficient capital to continue its operations for at least the next five months "
- In 2009, annual revenue was $659,762 up notably from 2008 revenue of $506,285.
- However, losses were $1.8 Million in 2009 down from $2.1 Million in 2008.
- Driving these losses are low gross margins (about 20%) and high fixed costs.
Iveda's value proposition centers around reducing guard costs (they claim by up to 75%) by outsourcing guard monitoring to Iveda's investigation team. They are attempting to scale by building up a network of partners. However, given their financial concerns, prospective partners should consider the long term risks carefully.