Value Exchange International, Inc. (VEII) reported significant financial developments in its latest 10-Q filing for the period ending September 30, 2024. The company experienced a notable increase in net revenues, which reached $11.8 million for the nine months ended September 30, 2024, compared to $8.7 million for the same period in 2023, marking a 35.9% increase. This growth was driven primarily by increased service income from systems maintenance and hardware sales, which rose to $7.7 million and $3.9 million, respectively.

Despite the revenue growth, VEII reported a net loss of $480.6 thousand for the nine months ended September 30, 2024, a significant improvement from the net loss of $1.1 million in the same period of the previous year, reflecting a 57.2% reduction in losses. The company’s gross profit also increased to $2.4 million, representing 20.1% of net revenues, compared to $1.5 million (17.3% of net revenues) in the prior year.

Operating losses for the nine-month period decreased to $845.3 thousand from $991.9 thousand in 2023, indicating improved operational efficiency. However, general and administrative expenses rose to $3.1 million, up from $2.5 million, contributing to the ongoing losses.

As of September 30, 2024, VEII's total assets increased to $6.8 million from $5.2 million at the end of 2023, while total liabilities also rose to $10.7 million from $8.5 million. The accumulated deficit grew to $6.3 million, compared to $5.9 million at the end of 2023, and total shareholders’ equity remained negative at $(3.9 million).

The company’s cash reserves decreased to $325.8 thousand from $886.5 thousand at the beginning of the period, with net cash used in operating activities improving to $(514.4) thousand from $(1.4) million in the previous year. VEII also reported an acquisition of a subsidiary, Value E Consultant International (M) Sdn. Bhd., for $60.4 thousand, expanding its market presence in Malaysia.

Strategically, VEII has shifted its focus to IT services, particularly in the retail sector, and has not pursued any acquisitions during the fiscal quarter ended September 30, 2024. The company continues to face challenges in retaining skilled IT workers due to competitive job offers, and it has not offered stock-based incentives, which may impact its ability to attract talent.

Overall, while VEII has shown improvements in revenue and reduced losses, it continues to navigate significant operational challenges and market conditions that could affect its future performance.