At 7:50 a.m. ET on Friday, premarket trading is seeing notable activity in several stocks, with early price movements signaling potential opportunities before the opening bell.For active traders, premarket trading offers a head start in spotting potential breakouts, reversals, or sharp price swings. These early moves often indicate where momentum may carry into the regular session, making premarket analysis a key part of the trading day.In the Green - Premarket GainersThe following stocks are trading highe ...

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Landscape - Wall Street is investing hundreds of billions into AI, but there is a looming question regarding the energy supply needed to sustain this growth [2] - AI data centers, such as those powering large language models, consume energy equivalent to that of a small city, indicating a significant strain on global power grids [2] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI, making it a unique investment opportunity [3][6] Company Profile - The company is described as a "toll booth" operator in the AI energy boom, collecting fees from energy exports and benefiting from the onshoring trend due to tariffs [5][6] - It possesses critical nuclear energy infrastructure assets, making it integral to America's future power strategy [7] - The company is noted for its ability to execute large-scale engineering, procurement, and construction projects across various energy sectors, including oil, gas, and renewables [7] Financial Position - The company is completely debt-free and has a significant cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened with debt [8][10] - It also holds a substantial equity stake in another AI-related company, providing investors with indirect exposure to multiple growth engines in the AI sector [9] Market Sentiment - There is a growing interest from hedge funds in this company, which is considered undervalued and off the radar, trading at less than seven times earnings [10][11] - The company is recognized for delivering real cash flows and owning critical infrastructure, making it a compelling investment choice in the context of the AI revolution [11][12]

PART I - FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements of Iveda Solutions, Inc. for the period ended June 30, 2025, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with accompanying notes detailing significant accounting policies and financial disclosures [CONDENSED CONSOLIDATED BALANCE SHEETS](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheets show a decrease in total assets and stockholders' equity from December 31, 2024, to June 30, 2025, primarily driven by a reduction in cash and cash equivalents and an accumulated deficit. Total liabilities increased during the same period Condensed Consolidated Balance Sheets Data | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :----- | | Cash and Cash Equivalents | $1,592,209 | $2,629,287 | -$1,037,078 | | Total Current Assets | $4,084,903 | $5,026,415 | -$941,512 | | Total Assets | $4,389,867 | $5,179,516 | -$789,649 | | Total Current Liabilities | $2,402,716 | $2,297,889 | +$104,827 | | Total Liabilities | $2,909,310 | $2,674,077 | +$235,233 | | Total Stockholders' Equity | $1,480,557 | $2,505,439 | -$1,024,882 | [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three and six months ended June 30, 2025, the company reported net losses, though the net loss decreased compared to the same periods in 2024. Total revenue increased for the six-month period but slightly decreased for the three-month period, while gross profit margins declined Condensed Consolidated Statements of Operations Data | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | | Total Revenue | $1,527,907 | $1,534,055 | -0.4% | $3,002,484 | $1,880,821 | +59.6% | | Gross Profit | $444,769 | $501,178 | -11.3% | $732,981 | $683,058 | +7.3% | | Gross Profit Margin | 29% | 33% | -4 ppts | 24% | 36% | -12 ppts | | Loss from Operations | $(532,360) | $(608,395) | +12.5% | $(1,367,918) | $(1,940,274) | +29.5% | | Net Loss | $(564,249) | $(598,981) | +5.8% | $(1,357,921) | $(1,888,576) | +28.1% | | Basic and Diluted Loss Per Share | $(0.20) | $(0.30) | +33.3% | $(0.48) | $(0.93) | +48.3% | [CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) The company reported a comprehensive loss for both the three and six months ended June 30, 2025, which improved compared to the prior year periods, primarily due to a positive change in equity adjustment from foreign currency translation Condensed Consolidated Statements of Comprehensive Loss Data | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Loss | $(564,249) | $(598,981) | $(1,357,921) | $(1,888,576) | | Change in Equity Adjustment from Foreign Currency Translation, Net of Tax | $120,324 | $(21,018) | $109,444 | $(55,609) | | Comprehensive Loss | $(443,925) | $(619,999) | $(1,248,477) | $(1,944,185) | [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Total stockholders' equity decreased from $2,505,439 at December 31, 2024, to $1,480,557 at June 30, 2025, primarily due to net losses, partially offset by proceeds from the sale of common stock and a positive comprehensive loss adjustment Condensed Consolidated Statements of Stockholders' Equity Data | Metric | December 31, 2024 | June 30, 2025 | Change | | :-------------------------- | :---------------- | :-------------- | :----- | | Common Stock (shares) | 2,808,071 | 2,906,726 | +98,655 | | Additional Paid-In Capital | $55,962,337 | $56,185,931 | +$223,594 | | Accumulated Deficit | $(53,176,717) | $(54,534,638) | -$1,357,921 | | Total Stockholders' Equity | $2,505,439 | $1,480,557 | -$1,024,882 | [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) The company experienced a net decrease in cash, restricted cash, and cash equivalents for the six months ended June 30, 2025, primarily due to net cash used in operating activities, partially offset by cash provided by financing activities Condensed Consolidated Statements of Cash Flows Data | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | | Net Cash Used in Operating Activities | $(1,458,074) | $(2,293,174) | +$835,100 | | Net Cash Used in Investing Activities | $(1,201) | $(2,626) | +$1,425 | | Net Cash Provided by Financing Activities | $318,834 | $518,076 | -$199,242 | | Effect of Exchange Rate Changes on Cash | $108,575 | $(111,772) | +$220,347 | | Net Decrease in Cash, Restricted Cash and Cash Equivalents | $(1,031,866) | $(1,889,496) | +$857,630 | | Cash and Cash Equivalents - End of Period | $1,626,434 | $2,978,786 | -$1,352,352 | [NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=9&type=section&id=NOTES%20TO%20THE%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed disclosures on the company's significant accounting policies, financial instruments, debt, equity, stock-based compensation, leases, commitments, contingencies, and segment information, offering context to the condensed consolidated financial statements [NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%201%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the company's business, basis of presentation, going concern considerations, accounting principles, use of estimates, revenue recognition policies, and concentrations of credit risk. It highlights the company's focus on AI-driven video surveillance and IoT platforms, the substantial doubt about its ability to continue as a going concern due to net losses and negative cash flows, and its revenue recognition based on transfer of control - Iveda Solutions, Inc. offers smart city technologies globally, focusing on advanced AI-driven video surveillance solutions and IoT platforms[24](index=24&type=chunk) - The company's financial statements are prepared under a "going concern" assumption, but management has concluded there is substantial doubt about its ability to continue as a going concern due to net losses and negative operating cash flows[27](index=27&type=chunk)[28](index=28&type=chunk) Key Data for SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Net Sales Source | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Commercial Enterprises | $929,073 | $1,258,850 | $1,595,467 | $1,522,290 | | Distributors | $220,295 | $216,474 | $398,462 | $267,170 | | Municipalities | $45,263 | $51,828 | $63,394 | $84,458 | | Taiwan Government | $333,276 | $6,903 | $945,161 | $6,903 | | **Total Revenue** | **$1,527,907** | **$1,534,055** | **$3,002,484** | **$1,880,821** | - Revenue concentration for the six months ended June 30, 2025, shows two Taiwan customers (National Chung Shan Institute of Science and Technology and Taiwan Stock Exchange) accounted for approximately **52%** of total revenue[40](index=40&type=chunk) - **86%** of total accounts receivable at June 30, 2025, was from three Taiwan customers: Taiwan Stock Exchange (**47%**), Chunghwa Telecom (**14%**), and National Chung Shan Institute of Science and Technology (**25%**)[41](index=41&type=chunk) [NOTE 2 Accounts and Other Payables](index=14&type=section&id=NOTE%202%20Accounts%20and%20Other%20Payables) This note details the composition of accounts and other payables, showing a slight decrease in total from December 31, 2024, to June 30, 2025, primarily due to a reduction in accrued expenses and customer deposits Key Data for Accounts and Other Payables | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :-------------- | :---------------- | :----- | | Accounts Payable | $862,157 | $730,297 | +$131,860 | | Accrued Expenses | $840,463 | $981,769 | -$141,306 | | Customer Deposits | $8,157 | $36,791 | -$28,634 | | **Total** | **$1,710,777** | **$1,748,857** | **-$38,080** | [NOTE 3 SHORT-TERM AND LONG-TERM DEBT](index=14&type=section&id=NOTE%203%20SHORT-TERM%20AND%20LONG-TERM%20DEBT) The company's short-term debt increased from December 31, 2024, to June 30, 2025, while long-term debt slightly decreased. Short-term loans are primarily from Taiwan banks and are secured by restricted cash and government guarantees Key Data for SHORT-TERM AND LONG-TERM DEBT | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :-------------- | :---------------- | :----- | | Short Term Debt | $529,525 | $427,025 | +$102,500 | | Current Portion of Long-Term Debt | $125,588 | $122,007 | +$3,581 | | Long Term Debt | $365,346 | $376,188 | -$10,842 | | Restricted Cash (pledged) | $34,225 | $29,013 | +$5,212 | - A new revolving loan facility of up to **TWD 10,000,000** (approx. **$300,000 USD**) and a term loan facility of **TWD 20,000,000** (approx. **$600,000 USD**) were granted by Shanghai Commercial Bank in January 2024[68](index=68&type=chunk) [NOTE 4 PREFERRED STOCK](index=14&type=section&id=NOTE%204%20PREFERRED%20STOCK) The company is authorized to issue up to 12,500,000 shares of preferred stock, with specific designations for Series A and Series B, but no preferred shares were issued or outstanding as of June 30, 2025, or December 31, 2024 - The company has **12,500,000** authorized shares of preferred stock (**$0.00001** par value), with **1,250,000** designated as Series A and **500** as Series B[69](index=69&type=chunk) - No preferred shares were issued or outstanding as of June 30, 2025, and December 31, 2024[7](index=7&type=chunk) [NOTE 5 COMMON STOCK](index=14&type=section&id=NOTE%205%20COMMON%20STOCK) The company is authorized to issue up to 300,000,000 shares of common stock. A 1-for-8 reverse stock split was effectuated on September 17, 2024. As of June 30, 2025, 2,906,726 shares were issued and outstanding, an increase from December 31, 2024 - The company is authorized to issue up to **300,000,000** shares of common stock (**$0.00001** par value)[70](index=70&type=chunk) - A **1-for-8** reverse stock split was effectuated on September 17, 2024[70](index=70&type=chunk) Key Data for COMMON STOCK | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :----- | | Common Stock (shares) | 2,906,726 | 2,808,071 | +98,655 | [NOTE 6 STOCK OPTION PLANS](index=15&type=section&id=NOTE%206%20STOCK%20OPTION%20PLANS) The company has two stock option plans (2010 and 2020 Plans) under which options are granted to directors, officers, key employees, and service providers. As of June 30, 2025, 224,256 options were outstanding, with 10,000 new options granted during the six-month period - The company operates under the 2010 Stock Option Plan (expired January 2020) and the 2020 Plan (amended in 2024 to authorize up to **656,250** shares)[71](index=71&type=chunk)[72](index=72&type=chunk) Key Data for STOCK OPTION PLANS | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :----- | | Total Options Outstanding | 224,256 | 217,056 | +7,200 | | Options Exercisable | 212,225 | N/A | N/A | | Weighted-Average Exercise Price (Outstanding) | $18.24 | $18.56 | -$0.32 | - During the six months ended June 30, 2025, **10,000** options were granted with a fair value of **$16,573**, and **$0** compensation cost was recognized, compared to **$25,600** in the prior year[76](index=76&type=chunk) [NOTE 7 WARRANTS](index=16&type=section&id=NOTE%207%20WARRANTS) As of June 30, 2025, the company had 1,863,069 warrants outstanding. No new warrants were granted during the six-month period, but 19,007 warrants were forfeited or cancelled Key Data for WARRANTS | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :----- | | Warrants Outstanding | 1,863,069 | 1,882,076 | -19,007 | | Warrants Exercisable | 566,193 | N/A | N/A | | Weighted-Average Exercise Price (Outstanding) | $9.13 | $22.59 | -$13.46 | - No warrants were granted during the six months ended June 30, 2025, while **19,007** warrants were cancelled[80](index=80&type=chunk) [NOTE 8 LEASES](index=17&type=section&id=NOTE%208%20LEASES) In 2025, the company entered a new long-term non-cancellable facility lease, recognizing a right-of-use asset and lease liability of $182,668. As of June 30, 2025, the net right-of-use asset was $166,053 and the lease liability was $178,074 - In 2025, the company entered a new long-term non-cancellable lease for its facility, with average monthly payments of **$4,540** from March 2025 through February 2029[82](index=82&type=chunk) Key Data for LEASES | Metric | June 30, 2025 | | :-------------------------- | :-------------- | | Right of Use Asset, Net | $166,053 | | Lease Liability | $178,074 | | Amortization of Right of Use Assets (6M 2025) | $13,301 | [NOTE 9 COMMITMENTS AND CONTINGENCIES](index=17&type=section&id=NOTE%209%20COMMITMENTS%20AND%20CONTINGENCIES) The company is involved in a legal action with Aegis Capital Corp. regarding a breached Placement Agency Agreement, which it intends to vigorously defend. Additionally, Iveda Taiwan has a financial exposure of $396,133 for potential failure to provide after-project services under certain contracts - Aegis Capital Corp. commenced an action against the company on September 13, 2024, alleging breach of a Placement Agency Agreement and seeking placement agent fees. The company denies the claims and intends to vigorously defend the action[84](index=84&type=chunk) - Iveda Taiwan has a financial exposure of **$396,133** as of June 30, 2025, for potential failure to provide after-project services under contracts with Chicony Power Technology Co., Ltd., Shihlin Electric & Engineering Corporation, National Chung Shan Institute of Science and Technology, and Chung-Hsin Electric and Machinery Manufacturing Corp[85](index=85&type=chunk) [NOTE 10 SEGMENT INFORMATION](index=17&type=section&id=NOTE%2010%20SEGMENT%20INFORMATION) The company operates in two reportable segments: US and Taiwan. For the six months ended June 30, 2025, Taiwan generated significantly higher revenue and net income compared to the US segment, which reported a net loss - The company operates and manages its business as two reportable and operating segments: US and Taiwan[86](index=86&type=chunk) Key Data for SEGMENT INFORMATION | Metric (6 Months Ended June 30, 2025) | Consolidated | US | Taiwan | | :------------------------------------ | :----------- | :--------- | :--------- | | Revenues | $3,002,484 | $620,104 | $2,382,380 | | Gross Profit | $732,981 | $158,792 | $574,189 | | Net Loss (Income) | $(1,357,921) | $(1,573,985) | $216,064 | | Net Assets (Liabilities) as of June 30, 2025 | $1,480,557 | $425,163 | $1,055,394 | - Taiwan segment revenues increased by **52%** for the six months ended June 30, 2025, compared to the same period in 2024, while US segment revenues increased by **97%**[136](index=136&type=chunk) [NOTE 11 SUBSEQUENT EVENTS](index=19&type=section&id=NOTE%2011%20SUBSEQUENT%20EVENTS) The company reviewed subsequent events up to the financial statement issuance date and did not identify any material recognized or non-recognized events requiring adjustment or disclosure - No material recognized or non-recognized subsequent events were identified that would require adjustment or disclosure[93](index=93&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=20&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and results of operations, highlighting its smart city technologies, AI and IoT market positioning, and a detailed comparison of financial performance for the three and six months ended June 30, 2025, against the prior year. It also discusses liquidity, capital resources, and critical accounting policies [Note Regarding Forward-Looking Information](index=20&type=section&id=Note%20Regarding%20Forward-Looking%20Information) This subsection serves as a cautionary statement, indicating that the report contains forward-looking statements subject to risks and uncertainties, which may cause actual results to differ materially from projections - The report contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied[96](index=96&type=chunk) [Overview](index=20&type=section&id=Overview) Iveda offers smart city technologies globally, including AI-driven video surveillance and IoT platforms, positioning itself for significant growth in the expanding smart city, AI, and IoT markets - Iveda offers smart city technologies globally, including advanced AI-driven video surveillance solutions and IoT platforms[97](index=97&type=chunk) Overview Data | Market | 2020 Value | 2021 Value | 2028 Projection | CAGR (2026-2032) | | :-------------------------- | :--------- | :--------- | :-------------- | :--------------- | | Global IoT Market | $308.97B | $381.30B | $1,854.76B | N/A | | Global Smart City Platforms Market | N/A | N/A | N/A | 9% | | Global AI Spending | $50.1B | N/A | N/A | N/A | - Global spending on artificial intelligence is projected to double from **USD 50.1 billion** in 2020 to over **USD 110 billion** in 2024[99](index=99&type=chunk) [Technology / Products](index=20&type=section&id=Technology%20%2F%20Products) Iveda offers a diverse portfolio of AI-driven and IoT products, including IvedaAI for video analytics, various IoT sensors and platforms like Cerebro and IvedaSPS for smart power, Utilus for smart poles, vumastAR for AI vision software, IvedaXpress for plug-and-play AI analytics, Smart UVC for air disinfection, Smart Drones for autonomous aerial functions, Smart Utility Cabinet for energy monitoring, Vemo Body Camera for live streaming, and LevelNOW for liquid level management - IvedaAI provides deep-learning video analytics software for fast and efficient video search, compatible with ONVIF-compliant IP cameras and NVR/VMS platforms[101](index=101&type=chunk)[102](index=102&type=chunk) - Iveda offers a robust suite of IoT sensors and devices for energy management, smart home/building, smart community, and patient/elder care, including gateways and various smart devices[106](index=106&type=chunk) - Iveda's product offerings include IvedaSPS (smart power solution), Utilus (smart pole solution), vumastAR (AI vision software for real-time data analysis), IvedaXpress (plug-and-play AI analytics for IP cameras), Iveda Smart UVC (AI-driven UVGI for air disinfection), Smart Drones (autonomous, cloud-based drones with AI), Smart Utility Cabinet (energy monitoring), Vemo Body Camera (live streaming, push-to-talk), and LevelNOW (IoT-based liquid level monitoring)[109](index=109&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[124](index=124&type=chunk) [Customers](index=24&type=section&id=Customers) In the US, Iveda primarily sells hardware and licenses software to organizations that serve existing customer bases, while Iveda Taiwan focuses on project-based sales to enterprise and government clients, including major entities like Chunghwa Telecom and the Taiwan Stock Exchange - Iveda's US business model involves selling hardware and licensing software to service providers, generating dual revenue streams from hardware sales and software licensing fees[125](index=125&type=chunk) - Iveda Taiwan services enterprise and government clients on a per-project basis, with key customers including Chunghwa Telecom, Taiwan Stock Exchange, New Taipei City Police Department, Chicony Power Technology Co, Ltd., and Taiwan Energy Systems[126](index=126&type=chunk) [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's financial statements are prepared in accordance with GAAP, requiring management to make estimates and judgments that affect reported amounts. The critical accounting policies and related judgments remain unchanged from the December 31, 2024, consolidated financial statements - The preparation of financial statements requires management to make estimates and judgments affecting reported amounts, based on historical experience and reasonable assumptions[127](index=127&type=chunk) - Critical accounting policies and related judgments and estimates are unchanged from the consolidated financial statements for the year ended December 31, 2024[127](index=127&type=chunk) [New Accounting Standards](index=24&type=section&id=New%20Accounting%20Standards) Management has determined that no recently issued new accounting standards will have a material impact on the company's operations or disclosures - No new accounting standards recently issued are believed to have a material impact on the company's operations or disclosures[128](index=128&type=chunk) [Results of Operations for the Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024](index=24&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20with%20the%20Three%20Months%20Ended%20June%2030%2C%202024) For the three months ended June 30, 2025, total revenue slightly decreased, while gross profit declined by 11%. Operating expenses saw a significant 12% reduction, primarily due to no major investor relations campaigns, leading to a 12% decrease in loss from operations and a 6% decrease in net loss compared to the prior year Results of Operations for the Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024 Data | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | | Total Revenues | $1,527,907 | $1,534,055 | -0.4% | | Cost of Goods Sold | $1,083,138 | $1,032,877 | +4.9% | | Gross Profit | $444,769 | $501,178 | -11.3% | | Total Operating Expenses | $977,129 | $1,109,573 | -12.0% | | Loss from Operations | $(532,360) | $(608,395) | +12.5% | | Net Loss | $(564,249) | $(598,980) | +5.8% | - The decrease in revenue was primarily due to decreased equipment sales from Iveda Taiwan, offset by increased US distributor revenues[131](index=131&type=chunk) - The decrease in overall gross margin was attributed to lower margin larger government contract sales in Taiwan[132](index=132&type=chunk) - Operating expenses decreased primarily due to no significant investor relations campaigns in US operations[132](index=132&type=chunk) [Results of Operations for the Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024](index=26&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20with%20the%20Six%20Months%20Ended%20June%2030%2C%202024) For the six months ended June 30, 2025, total revenue significantly increased by 60%, driven by higher equipment sales in Taiwan and the US. Despite a 12 percentage point drop in gross profit margin, total operating expenses decreased by 20%, leading to a 29% reduction in loss from operations and a 28% decrease in net loss compared to the prior year Results of Operations for the Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024 Data | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | | Total Revenues | $3,002,484 | $1,880,821 | +59.6% | | Cost of Goods Sold | $2,269,503 | $1,197,763 | +89.5% | | Gross Profit | $732,980 | $683,058 | +7.3% | | Gross Profit Margin | 24% | 36% | -12 ppts | | Total Operating Expenses | $2,100,899 | $2,623,332 | -19.9% | | Loss from Operations | $(1,367,918) | $(1,940,274) | +29.5% | | Net Loss | $(1,357,920) | $(1,888,576) | +28.1% | - The increase in revenue was primarily due to increased equipment sales from Iveda Taiwan (long-term government contracts) and increased US revenues through distributors[136](index=136&type=chunk) - The decrease in overall gross margin was attributed to lower margin larger government contract sales in Taiwan[137](index=137&type=chunk) - Operating expenses decreased primarily due to a reduction in R&D expense in the US and no significant investor relations campaigns[137](index=137&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash and cash equivalents decreased to $1.6 million as of June 30, 2025, from $2.7 million at December 31, 2024, primarily due to operating losses. Net cash used in operating activities improved, while financing activities provided less cash compared to the prior year. The company's continuation as a going concern is dependent on generating more revenue or raising additional funds Liquidity and Capital Resources Data | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :----- | | Cash and Cash Equivalents | $1.6 million | $2.7 million | -$1.1 million | Liquidity and Capital Resources Data | Metric (6 Months Ended June 30) | 2025 | 2024 | YoY Change | | :------------------------------------ | :----------- | :----------- | :--------- | | Net Cash Used in Operating Activities | $(1.5) million | $(2.3) million | +$0.8 million | | Net Cash Provided by Financing Activities | $0.3 million | $0.5 million | -$0.2 million | - The company has experienced significant operating losses since inception and has limited liquidity, with its continuation as a going concern dependent on increased sales or additional financing[143](index=143&type=chunk)[144](index=144&type=chunk) - As of December 31, 2024, the company had approximately **$38 million** in federal net operating loss carryforwards (expiring from 2025) and **$12.0 million** in state net operating loss carryforwards (expiring after five years)[143](index=143&type=chunk) [Effects of Inflation](index=27&type=section&id=Effects%20of%20Inflation) Management believes that current inflation levels in both the United States and Taiwan have not had a significant impact on the company's operations - Current inflation levels in the United States and Taiwan have not had a significant impact on the company's operations[148](index=148&type=chunk) [Off Balance Sheet Arrangements](index=27&type=section&id=Off%20Balance%20Sheet%20Arrangements) The company does not have any off-balance sheet arrangements, such as relationships with unconsolidated entities, undisclosed borrowings, or synthetic leases, and is therefore not materially exposed to related financing, liquidity, market, or credit risks - The company does not have any off-balance sheet arrangements, undisclosed borrowings, or synthetic leases[149](index=149&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=28&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Iveda Solutions, Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Iveda Solutions, Inc. is not required to provide quantitative and qualitative disclosures about market risk[150](index=150&type=chunk)[162](index=162&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=28&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The company's disclosure controls and procedures and internal control over financial reporting were deemed ineffective as of June 30, 2025, due to inadequate segregation of duties and insufficient personnel with U.S. GAAP knowledge. Remediation efforts are ongoing [Evaluation of Disclosure Controls and Procedures](index=28&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The Chief Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, to ensure timely and accurate reporting of required information - The company's disclosure controls and procedures were not effective as of June 30, 2025, to provide reasonable assurance that required information is recorded, processed, summarized, and reported within specified time periods[151](index=151&type=chunk)[152](index=152&type=chunk) [Management's Annual Report on Internal Control over Financial Reporting](index=28&type=section&id=Management's%20Annual%20Report%20on%20Internal%20Control%20over%20Financial%20Reporting) Management assessed the effectiveness of internal control over financial reporting and concluded it was not effective as of June 30, 2025, due to material weaknesses including inadequate segregation of duties and insufficient personnel with U.S. GAAP knowledge - Management concluded that internal control over financial reporting was not effective as of June 30, 2025[154](index=154&type=chunk) - Material weaknesses identified include inadequate segregation of duties and an insufficient number of personnel with appropriate U.S. GAAP knowledge and experience[154](index=154&type=chunk) - Remediation efforts are ongoing to implement and document policies, procedures, and internal controls[155](index=155&type=chunk) [Changes in Internal Control over Financial Reporting](index=28&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) There were no changes in the company's internal control over financial reporting during the six months ended June 30, 2025, that materially affected or are reasonably likely to materially affect it - No material changes in internal control over financial reporting occurred during the six months ended June 30, 2025[157](index=157&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=28&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) This section acknowledges that all internal control systems have inherent limitations, meaning they may not prevent or detect all misstatements due to human judgment, errors, or circumvention, and their effectiveness can deteriorate over time - Internal control systems have inherent limitations, including faulty human judgment, errors, and intentional circumvention, which mean they may not prevent or detect all misstatements[158](index=158&type=chunk) [Changes in Disclosure Controls and Procedures](index=28&type=section&id=Changes%20in%20Disclosure%20Controls%20and%20Procedures) No changes in disclosure controls and procedures were reported during the period - No changes in disclosure controls and procedures were reported[159](index=159&type=chunk) PART II - OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=29&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company may be involved in various legal proceedings in the ordinary course of business but is currently unaware of any that would have a material adverse effect on its business, financial condition, or results of operations - The company is not currently aware of any legal proceedings or claims that are believed to have a material adverse effect on its business, financial condition, or results of operations[161](index=161&type=chunk) [ITEM 1A. RISK FACTORS](index=29&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a smaller reporting company, Iveda Solutions, Inc. is not required to provide information under this item - As a smaller reporting company, Iveda Solutions, Inc. is not required to provide risk factor disclosures[162](index=162&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=29&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities or use of proceeds were reported[163](index=163&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=29&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities were reported for the period - No defaults upon senior securities were reported[164](index=164&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=29&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - This item is not applicable to the company[165](index=165&type=chunk) [ITEM 5. OTHER INFORMATION](index=29&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No material changes to procedures for recommending Board nominees were reported. Additionally, no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No material changes to procedures for security holders to recommend nominees to the Board of Directors were reported[166](index=166&type=chunk) - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[167](index=167&type=chunk) [ITEM 6. EXHIBITS](index=29&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed as part of the Form 10-Q, including various certifications and XBRL documents - The exhibits include certifications from the Principal Financial Officer and Principal Executive Officer, as well as Inline XBRL documents[168](index=168&type=chunk) SIGNATURES [SIGNATURES](index=30&type=section&id=SIGNATURES) The report is duly signed on behalf of Iveda Solutions, Inc. by David Ly, Chief Executive Officer and Chairman, and Robert J. Brilon, Chief Financial Officer, on August 14, 2025 - The report was signed by David Ly, Chief Executive Officer and Chairman, and Robert J. Brilon, Chief Financial Officer, on August 14, 2025[171](index=171&type=chunk)

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) [Filing Details](index=1&type=section&id=Filing%20Details) This document is a Quarterly Report (Form 10-Q) filed by IVEDA SOLUTIONS, INC. for the quarterly period ended March 31, 2025, incorporated in Delaware with common stock and warrants registered on The Nasdaq Stock Market LLC - The filing is a **Quarterly Report (Form 10-Q)** for the period ended **March 31, 2025**[2](index=2&type=chunk) - IVEDA SOLUTIONS, INC. is incorporated in **Delaware** and its common stock and warrants are listed on **The Nasdaq Stock Market LLC**[3](index=3&type=chunk) Outstanding Shares | Class | Outstanding as of April 30, 2025 | | :-------------------------------- | :------------------------------- | | Common Stock, $0.00001 par value per share | 2,808,071 | [PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Iveda Solutions, Inc.'s unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Comprehensive Loss, Stockholders' Equity, and Cash Flows, along with detailed notes on accounting policies and restatements [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The company's total assets decreased to **$4.53 million** at March 31, 2025, while total liabilities increased and total stockholders' equity significantly decreased due to accumulated deficit Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Total Assets | $4,528,325 | $5,179,516 | | Total Liabilities | $2,827,438 | $2,674,077 | | Total Stockholders' Equity | $1,700,887 | $2,505,439 | | Cash and Cash Equivalents | $2,490,482 | $2,629,287 | | Accounts Receivable, Net | $819,750 | $1,277,635 | | Accumulated Deficit | $(53,970,389) | $(53,176,717) | [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended March 31, 2025, Iveda Solutions, Inc. reported a significant increase in total revenue, primarily from equipment sales, a decrease in gross profit margin, and a reduced net loss compared to the prior year due to lower operating expenses Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 (Restated) | | :-------------------------- | :-------------------------------- | :------------------------------------------- | | Total Revenue | $1,474,576 | $346,766 | | Cost of Revenue | $1,186,365 | $164,886 | | Gross Profit | $288,211 | $181,880 | | Loss from Operations | $(835,559) | $(1,331,879) | | Net Loss | $(793,672) | $(1,289,596) | | Basic and Diluted Loss Per Share | $(0.28) | $(0.64) | - **Total revenue** increased by **325%** from **$346,766** in Q1 2024 to **$1.47 million** in Q1 2025, primarily due to increased equipment sales[12](index=12&type=chunk)[129](index=129&type=chunk) - **Net loss** decreased by **38%** from **$(1.29) million** in Q1 2024 to **$(793,672)** in Q1 2025, driven by increased revenues and reduced operating expenses[12](index=12&type=chunk)[131](index=131&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20LOSS) The comprehensive loss for the three months ended March 31, 2025, was **$(804,552)**, a reduction from **$(1.32) million** in the same period of 2024, mainly due to a lower net loss partially offset by foreign currency translation adjustments Condensed Consolidated Statements of Comprehensive Loss | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 (Restated) | | :------------------------------------------------ | :-------------------------------- | :------------------------------------------- | | Net Loss | $(793,672) | $(1,289,596) | | Change in Equity Adjustment from Foreign Currency Translation, Net of Tax | $(10,880) | $(34,591) | | Comprehensive Loss | $(804,552) | $(1,324,187) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Total stockholders' equity decreased from **$2.51 million** at December 31, 2024, to **$1.70 million** at March 31, 2025, primarily due to the net loss and accumulated other comprehensive loss Condensed Consolidated Statements of Stockholders' Equity Highlights | Metric | December 31, 2024 | March 31, 2025 | | :-------------------------- | :---------------- | :------------- | | Common Stock Amount | $28 | $28 | | Additional Paid-In Capital | $55,962,337 | $55,962,337 | | Accumulated Deficit | $(53,176,717) | $(53,970,389) | | Accumulated Other Comprehensive Loss | $(280,209) | $(291,089) | | Total Stockholders' Equity | $2,505,439 | $1,700,887 | - The **accumulated deficit** increased by **$793,672** due to the net loss for the three months ended March 31, 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash used in operating activities significantly decreased from **$(1.29) million** in Q1 2024 to **$(0.13) million** in Q1 2025, primarily due to improved net loss and accounts receivable collection, while financing activities provided minimal cash in Q1 2025 Condensed Consolidated Statements of Cash Flows Highlights | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 (Restated) | | :-------------------------------- | :-------------------------------- | :------------------------------------------- | | Net Cash Used in Operating Activities | $(125,966) | $(1,293,473) | | Net Cash Used in Investing Activities | $109 | $- | | Net Cash Provided by Financing Activities | $839 | $525,609 | | Net Decrease in Cash, Restricted Cash and Cash Equivalents | $(139,212) | $(851,248) | | Cash and Cash Equivalents - End of Period | $2,519,088 | $4,017,034 | - **Net cash used in operating activities** decreased significantly from **$(1.29) million** in Q1 2024 to **$(0.13) million** in Q1 2025, primarily due to a lower net loss and **$0.5 million** cash provided from accounts receivable collection[19](index=19&type=chunk)[133](index=133&type=chunk) - **Net cash provided by financing activities** was minimal (**$839**) in Q1 2025, a substantial decrease from **$0.53 million** in Q1 2024, which included proceeds from long-term loans[19](index=19&type=chunk)[134](index=134&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20THE%20UNAUDITED%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes detail Iveda Solutions, Inc.'s accounting policies, financial instruments, debt, equity, leases, commitments, segment information, and restatements, highlighting going concern uncertainty, revenue recognition, customer concentrations, and prior period adjustments [NOTE 1 Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%201%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines Iveda's business, consolidation of Iveda Taiwan, and critical accounting policies, including going concern uncertainty, revenue recognition, and policies for cash, receivables, inventory, property, income taxes, stock-based compensation, and fair value measurements - **Iveda Solutions, Inc.** offers advanced **AI-driven video surveillance solutions** and **IoT platforms** globally, focusing on smart city technologies[24](index=24&type=chunk) - The company has experienced **net losses** and **negative operating cash flows**, raising substantial doubt about its ability to continue as a **going concern** without additional financing[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - **Revenue recognition** follows ASC 606-10, with revenue

Revenue Sources and Financial Performance - Iveda's revenue primarily comes from Iveda Taiwan, which specializes in deploying and integrating video surveillance systems, contributing significantly to the company's financial performance since its acquisition in April 2011[17]. - Revenue from five key customers accounted for approximately 67% of total revenue for the year ended December 31, 2024, with Chunghwa Telecom contributing 18%[82]. - Iveda Taiwan accounted for 85% and 87% of the company's total revenue for the years ended December 31, 2024 and 2023, respectively[85]. - Revenue from Taiwan operations was $5.2 million in 2024, a decrease of $0.5 million or 9% from $5.6 million in 2023, attributed to the timing of large project completions[194]. - Consolidated net revenue for the year ended December 31, 2024, was $6.0 million, a decrease of $0.5 million or 7% compared to $6.5 million in 2023[193]. Market Opportunities and Growth Potential - The global smart city platforms market is projected to grow at a CAGR of 9% from 2026 to 2032, increasing from USD 208.8 billion to USD 416.1 billion, indicating a strong market opportunity for Iveda's offerings[20]. - The global IoT market, valued at USD 308.97 billion in 2020, expanded by 23.1% that year and is expected to surge to USD 1,854.76 billion by 2028, highlighting the growth potential for Iveda's IoT solutions[20]. - The International Data Corporation (IDC) projects global spending on artificial intelligence will double from USD 50.1 billion in 2020 to over USD 110 billion in 2024, indicating a growing demand for Iveda's AI-driven solutions[21]. Product Offerings and Innovations - IvedaAI enables accurate search across dozens to thousands of cameras in less than 1 second, maximizing efficiency and reducing operational costs for users[24]. - Iveda's smart power solutions, including smart meters and lighting control systems, are designed for various applications in office buildings, schools, and smart city projects, enhancing energy management[32]. - IvedaCare, launched in November 2022, provides a suite of wireless health and wellness devices for real-time monitoring, fall detection, and medication reminders, targeting the elderly care market[47]. - Iveda's smart drones are equipped with AI-based software for autonomous operation, capable of performing various industrial, commercial, and military applications, enhancing operational efficiency[42]. - The company offers a comprehensive suite of IoT technologies, including AI intelligent video search technology and smart sensors, to improve public safety and operational efficiency in urban environments[35]. - Iveda's Cerebro platform integrates multiple systems for centralized management, providing a unified interface for monitoring and controlling city infrastructure[33]. - The company plans to license its CEREBRO platform and sell IoT hardware to service providers, creating dual revenue streams from hardware sales and monthly licensing fees[185]. - Iveda's smart power technology includes a comprehensive management platform, Cerebro, which integrates energy, security, and safety applications[181]. Financial Challenges and Losses - For the year ended December 31, 2024, the company incurred a net loss of approximately $3.7 million, following a net loss of $4.0 million for the year ended December 31, 2023, with accumulated losses totaling around $51 million[73]. - The company has generated accumulated losses of approximately $53 million since inception, raising substantial doubt about its ability to continue as a going concern[72]. - Consolidated loss from operations for 2024 was $4.1 million, an increase of $0.1 million or 2% compared to $4.0 million in 2023[201]. - Net loss for the year ended December 31, 2024, was $4.0 million, a slight improvement from a net loss of $4.1 million in 2023[205]. Operational Risks and Challenges - The company relies on third-party manufacturers and suppliers for all hardware components, which poses risks such as reduced control over delivery schedules and quality assurance[89]. - The timing of revenue can vary significantly due to lengthy evaluation periods by customers, particularly governmental ones[97]. - The company faces risks associated with operating in Taiwan, including economic downturns and political instability, which may adversely affect revenue[100]. - Recent geopolitical issues, such as the conflict in Ukraine, could adversely impact the company's results of operations and financial condition[102]. - The company may need to decrease prices to remain competitive against rivals with greater resources[94]. - The company is subject to risks from changes in U.S. trade policy, which could disrupt its supply chain and increase costs[107]. - The company may face difficulties in integrating acquired businesses, which could disrupt operations and adversely affect financial results[113]. - Compliance with U.S. and foreign export controls and trade sanctions could harm international sales and adversely affect revenue[109]. Internal Controls and Governance - As of December 31, 2024, the company concluded that its internal control over financial reporting was not effective due to inadequate controls related to change management within the technology supporting financial reporting[133]. - The company recognizes the importance of maintaining effective internal controls to prevent fraud and ensure reliable financial reporting[134]. - The company plans to engage external auditors and consultants to assess its internal cybersecurity programs and compliance with applicable standards[154]. Stock and Market Performance - The company's common stock experienced significant price volatility, with a high bid of $8.05 and a low bid of $1.27 in the fourth quarter of fiscal year 2024[164]. - The company has never declared or paid any cash dividends on its common stock and anticipates retaining future earnings for business development and expansion[137]. - There were approximately 2,808,071 shares of common stock outstanding as of December 31, 2024, held by 96 shareholders of record[166]. - The trading market for the company's common stock may decline if securities analysts do not publish adequate or favorable research about the company[147]. - The company has limited trading activity in its securities, raising concerns about the sustainability of a regular trading market for its common stock[165]. Liquidity and Cash Flow - Cash and cash equivalents decreased to $1.6 million in the U.S. segment and $1.0 million in the Taiwan segment as of December 31, 2024, down from $2.9 million and $1.8 million respectively in 2023[206]. - Net cash used in operating activities increased to $4.4 million in 2024 from $3.3 million in 2023, primarily due to the net loss and various operational expenses[207]. - Net cash provided by financing activities rose to $2.3 million in 2024, compared to $1.0 million in 2023, mainly from a $1.7 million direct offering of Common Stock[209]. - The company has limited liquidity and has not established a stable revenue source to cover operating costs, making future financing critical[211]. - Approximately $35 million in net operating loss carryforwards available for federal income tax purposes will begin to expire in 2025, with no benefits recognized in 2024 or 2023[210]. - Substantially all cash is deposited in three financial institutions, with potential exposure exceeding insurance limits in both the U.S. and Taiwan[212]. - Accounts receivable are unsecured, posing a risk of uncollectibility without requiring collateral from customers[213].

Financial Performance - Net consolidated revenue for Q3 2024 was $2.40 million, a 175% increase from $0.87 million in Q3 2023[129] - For the nine months ended September 30, 2024, net consolidated revenue was $4.3 million, a 22% decrease from $5.5 million in the same period in 2023[137] - Net loss for Q3 2024 was $0.57 million, a 33% decrease from $0.85 million in Q3 2023[137] - Net loss for the nine months ended September 30, 2024, was $2.16 million, a slight increase of $0.02 million, or 1%, compared to $2.14 million in 2023[143] Revenue Composition - Equipment sales and installation revenue accounted for 97% of net revenue in Q3 2024, compared to 90% in Q3 2023[129] - Iveda Taiwan accounted for 93% of total revenue in 2023, up from 71% in 2022, highlighting its critical role in the company's revenue generation[123] Cost and Expenses - Total cost of revenue for Q3 2024 was $2.0 million, representing 83% of revenue with a gross margin of 17%[131] - Total cost of revenue for the nine months ended September 30, 2024, was $3.2 million, a 30% decrease from $4.6 million in the same period in 2023[138] - Operating expenses for the nine months ended September 30, 2024, increased by 6% to $3.4 million compared to $3.2 million in the same period in 2023[139] Operational Losses - Loss from operations decreased to $0.60 million in Q3 2024, down 34% from $0.91 million in Q3 2023[134] - Loss from operations for the nine months ended September 30, 2024, was $2.3 million, consistent with the same period in 2023[140] Cash Flow and Liquidity - Cash and cash equivalents decreased to $3.6 million as of September 30, 2024, down from $4.8 million as of December 31, 2023, due to operating losses[144] - Net cash used in operating activities for the nine months ended September 30, 2024, was ($3.2) million, compared to ($1.9) million in the same period of 2023[145] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $2.3 million, an increase from $0.9 million in 2023, primarily from the sale of common stock and pre-funded warrants[147] - The company has limited liquidity and has not established a stabilized source of revenue sufficient to cover operating costs, impacting its ability to continue as a going concern[149] Other Income and Tax - Other income for the nine months ended September 30, 2024, increased by $35,157, or 46%, totaling $111,657, primarily from interest income[141] - The company has approximately $32 million in net operating loss carryforwards available for federal income tax purposes, which will begin to expire in 2025[148] Risk Factors - The company does not have any off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing and liquidity risks[154] - Inflation levels in the U.S. and Taiwan have not significantly impacted the company's operations[153] Technology and Product Offering - Iveda's AI technology includes features such as face recognition, license plate recognition, and public health analytics, enhancing its product offerings in the surveillance market[112]

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]

While some of the hype tied to artificial intelligence may not be sustainable, digital transformation technology specialist Iveda Solutions (NASDAQ:IVDA) could offer a more practical bet. IVDA stock appears to be printing a compelling bullish pattern in the charts. Therefore, it could be a short-term scalp or in my opinion a long-term investment.Iveda’s deep-learning video analytics software — or facial recognition tech — could have practically endless applications. Per the company’s public profile, Iveda c ...

Business Model and Revenue Streams - Iveda's business model transitioned from direct project-based sales to licensing its platform and selling IoT hardware, resulting in dual revenue streams from hardware sales and monthly licensing fees [15]. - Iveda's revenue model in the US involves licensing software to organizations with existing customer bases, facilitating hardware acquisition through third-party partners [45]. - Iveda Taiwan accounted for 87% of total revenue for the years ended December 31, 2023, compared to 79% in 2022 [77]. - Revenue from two customers out of 65 total customers represented approximately 48% of total revenue for the year ended December 31, 2023, with YOU MING HUEI CO. LTD contributing 25% and Chicony Power Technology Co Ltd contributing 23% [74]. - For the year ended December 31, 2023, the company recorded net consolidated revenue of $6.5 million, an increase of $2.0 million, or 45%, compared to $4.5 million in 2022 [193]. - Recurring service revenue for 2023 was $0.44 million, or 7% of net revenue, while equipment sales and installation revenue was $6.0 million, or 93% of net revenue [193]. - Iveda Taiwan has been a significant revenue contributor since its acquisition in April 2011, focusing on deploying and integrating video surveillance systems for various sectors [17]. Technology and Product Offerings - The company offers a suite of IoT technologies, including AI intelligent video search, smart sensors, and video surveillance systems, to support smart city initiatives [20]. - IvedaAI technology enables accurate search across dozens to thousands of cameras in less than 1 second, enhancing efficiency and reducing operational costs [23]. - The company is developing the Cerebro IoT platform, which includes features such as power management, traffic management, and AI intelligent video search management [51]. - The company’s AI intelligent video search technology, IvedaAI, enhances video surveillance systems and is a key focus for future product development [173]. - Iveda's product offerings include smart utility cabinets that monitor energy consumption and detect abnormalities, utilizing IoT sensors for enhanced safety [42]. - The company has developed smart drones equipped with AI-based software for autonomous operation, enhancing safety and security in various applications [40]. Financial Performance and Losses - For the years ended December 31, 2023 and 2022, the company incurred net losses of approximately $3.2 million and $3.3 million, respectively, with accumulated losses of approximately $47 million through December 31, 2023 [65]. - Loss from operations for 2023 was $3.4 million, an increase of $0.1 million, or 2%, compared to $3.3 million in 2022 [196]. - Net loss for 2023 was $3.2 million, a decrease of $0.1 million, or 3%, from a net loss of $3.3 million in 2022 [199]. - The company has incurred significant net losses since inception and may not achieve or maintain profitability in the near future [65]. Operational Challenges and Risks - The company faces potential strains on management and operational resources due to rapid growth, which could adversely affect its financial condition and results of operations [80]. - The company relies on key management personnel, with the loss of any key employee potentially having a material adverse effect on operations [67]. - The company has limited resources for reseller distribution activities, which may impact the demand for its products [69]. - The company relies on third-party manufacturers and suppliers for hardware components, which introduces risks such as reduced control over delivery schedules and quality assurance [81]. - The company may struggle to maintain favorable terms with third-party manufacturers, impacting its ability to meet quality and quantity requirements [82]. - If the company cannot find timely replacements for manufacturers, it may have to discontinue certain products, risking legal liability and loss of reputation [83]. - An increase in manufacturers' prices or a decline in their financial condition could adversely affect the company's operations and costs [84]. - The company operates in a highly competitive industry, facing challenges from competitors with greater resources and potentially superior products [85]. Compliance and Regulatory Risks - The company is subject to risks associated with international operations, including regulatory environments and political instability in Taiwan, which could adversely impact its financial condition [91]. - The company may face risks related to compliance with export controls and trade regulations, potentially harming international sales [102]. - Recent geopolitical issues, such as the conflict in Ukraine, could have a material adverse effect on the company's results of operations and financial condition [95]. Cash Flow and Liquidity - The company has limited liquidity and has not established a stabilized source of revenue sufficient to cover operating costs [206]. - As of December 31, 2023, cash and cash equivalents were $2.9 million in the U.S. segment and $1.8 million in the Taiwan segment, down from $6.0 million and $1.3 million respectively as of December 31, 2022 [200]. - Net cash used in operating activities for the year ended December 31, 2023 was $3.5 million, an improvement from $5.4 million used in 2022 [201]. - The company has approximately $32 million in net operating loss carryforwards available for federal income tax purposes, which will begin to expire in 2025 [205]. Stock and Market Risks - The company has never declared or paid any cash dividends on its common stock and does not anticipate doing so in the foreseeable future [131]. - The company's common stock is subject to price volatility, which could fluctuate substantially due to various factors including market perception and quarterly operating results of other companies in the same industry [132]. - On September 28, 2023, the company received notice from Nasdaq that it no longer complies with the minimum bid price requirement of $1.00 per share [136]. - The company is subject to potential delisting from Nasdaq if it fails to regain compliance with listing requirements [138]. - The company intends to monitor the closing bid price of its common stock and consider available options to resolve noncompliance with the minimum bid price requirement [138]. Cybersecurity and Internal Controls - The company recognizes the importance of cybersecurity and plans to engage external auditors to assess its internal cybersecurity programs [151]. - The company plans to develop processes for assessing and managing cybersecurity risks as part of its overall risk management strategy [150]. - Information security breaches could lead to significant capital expenditures and damage to the company's reputation, affecting its business operations [88]. - The company has identified weaknesses in its internal controls over financial reporting, which could harm its business and stock price [127]. Real Estate and Office Space - The company currently rents approximately 3,000 square feet for its principal executive offices at a cost of approximately $4,500 per month until February 2025 [155]. - Iveda Taiwan leases approximately 4,567 square feet for its principal executive offices at a total cost of approximately $3,136 per month, with leases expiring between June and September 2024 [156].

Revenue Performance - Net consolidated revenue for Q3 2023 was $0.87 million, a decrease of 41% from $1.47 million in Q3 2022[114]. - For the nine months ended September 30, 2023, net consolidated revenue increased to $5.47 million, up 133% from $2.35 million in the same period of 2022[115]. - Service revenue for Q3 2023 was $0.09 million, representing 10% of net revenue, while equipment sales and installation revenue was $0.78 million, or 90% of net revenue[114]. - Iveda Taiwan accounted for 93% of total revenue in 2022, highlighting its significance to the company's financial performance[109]. Cost and Expenses - Total cost of revenue for Q3 2023 was $0.73 million, with a gross margin of 16%, compared to $1.11 million and a gross margin of 24% in Q3 2022[116]. - Operating expenses for Q3 2023 were $1.05 million, a slight decrease of 2% from $1.03 million in Q3 2022[118]. - Loss from operations for Q3 2023 increased to $0.9 million, up 34% from $0.7 million in Q3 2022[121]. Income and Loss - Other income for Q3 2023 was approximately $54,000, an increase from $11,000 in Q3 2022, primarily due to interest income[123]. - Net loss for the three months ended September 30, 2023, was $0.83 million, an increase of $0.16 million or 24% compared to a net loss of $0.67 million for the same period in 2022[126]. - Net loss for the nine months ended September 30, 2023, was $2.1 million, a decrease of $0.3 million or 11% compared to a net loss of $2.4 million for the same period in 2022[127]. - Other income for the nine months ended September 30, 2023, was approximately $76,000, a net increase of $84,000 compared to a net expense of ($8,000) for the same period in 2022[124]. Cash Flow - Cash and cash equivalents as of September 30, 2023, were $5.6 million, down from $7.3 million as of December 31, 2022, primarily due to operating losses[128]. - Net cash used in operating activities for the nine months ended September 30, 2023, was ($1.9) million, an improvement compared to ($3.3) million for the same period in 2022[129]. - Net cash used in investing activities for the nine months ended September 30, 2023, was $0.64 million, primarily for the development of additional IvedaAI platforms[130]. - Net cash provided by financing activities for the nine months ended September 30, 2023, was $0.84 million, a significant decrease from $12.6 million for the same period in 2022[131]. Financial Position and Risks - The company has approximately $32 million in net operating loss carryforwards available for federal income tax purposes, which will begin to expire in 2025[132]. - The company has limited liquidity and has not established a stabilized source of revenue sufficient to cover operating costs, making its continuation as a going concern dependent on generating greater revenue or raising additional funds[133]. - The company does not have any off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing, liquidity, market, or credit risk[138]. Business Model and Strategy - The company has evolved its core product line to include AI intelligent search technology and IoT devices in response to digital transformation demands[95]. - Iveda's business model includes dual revenue streams from hardware sales and monthly licensing fees through partnerships with service providers[107].