Financial Performance - Net consolidated revenue for Q2 2023 was $2.39 million, a 267% increase from $0.65 million in Q2 2022[108] - For the first half of 2023, net consolidated revenue reached $4.60 million, up 421% from $0.88 million in the same period of 2022[109] - Equipment sales and installation revenue constituted 97% of net revenue in Q2 2023, compared to 91% in Q2 2022[108] - Total cost of revenue for Q2 2023 was $2.11 million, representing 88% of revenue and a gross margin of 12%[110] - Operating expenses for Q2 2023 were $1.1 million, a decrease of 12% from $1.2 million in Q2 2022[112] - Loss from operations decreased to $0.82 million in Q2 2023, down 22% from $1.06 million in Q2 2022[115] - Net loss for the three months ended June 30, 2023, was $0.76 million, a decrease of $0.31 million or 29% compared to the same period in 2022[120] - Net loss for the six months ended June 30, 2023, was $1.3 million, down $0.36 million or 21% from $1.7 million in the same period in 2022[121] Cash Flow and Liquidity - Cash and cash equivalents increased to $8.6 million as of June 30, 2023, compared to $7.3 million as of December 31, 2022, primarily due to the exercise of 945,900 warrants[122] - Net cash provided in operating activities for the six months ended June 30, 2023, was $0.85 million, a significant improvement from net cash used of ($2.18) million in the same period in 2022[123] - Net cash used in investing activities for the six months ended June 30, 2023, was $0.44 million, primarily for the development of additional IvedaAI platforms[124] - Net cash provided by financing activities for the six months ended June 30, 2023, was $0.94 million, compared to $7.0 million in the same period in 2022[125] - Company has limited liquidity and has not established a stabilized source of revenue sufficient to cover operating costs[127] Tax and Financial Risks - Approximately $32 million in net operating loss carryforwards available for federal income tax purposes, beginning to expire in 2025[126] - Company does not have any off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing and liquidity risks[132] Market and Business Model - Iveda Taiwan accounted for 93% of total revenue in 2022, highlighting its significance to the company's financial performance[103] - The company’s AI intelligent video search technology enhances traditional video surveillance systems, responding to global digital transformation demands[89] - Iveda's business model includes dual revenue streams from hardware sales and monthly licensing fees, leveraging partnerships with service providers[101] Economic Environment - No significant impact from current levels of inflation in the United States or Taiwan on operations[131]

Financial Performance - Net consolidated revenue for Q1 2023 was $2.21 million, an increase of $1.98 million or 855% compared to $0.23 million in Q1 2022[106] - Service revenue accounted for $0.20 million or 9% of net revenue in Q1 2023, while equipment sales and installation revenue was $2.0 million or 91% of net revenue[106] - Total cost of revenue for Q1 2023 was $1.72 million, representing 78% of revenue with a gross margin of 22%, compared to $0.09 million and 61% gross margin in Q1 2022[107] - Operating expenses increased by $0.25 million or 31% to $1.04 million in Q1 2023, primarily due to increased personnel for IvedaAI and investor relations expenses[108] - Loss from operations decreased to $0.55 million in Q1 2023, a reduction of $0.10 million or 15% compared to Q1 2022[110] - Net loss for Q1 2023 was $0.55 million, down $0.12 million or 17% from $0.67 million in Q1 2022, driven by increased net revenues[112] Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2023, were $8.4 million, up from $7.3 million in Q1 2022, attributed to the exercise of warrants[113] - Net cash provided in operating activities for Q1 2023 was $0.17 million, compared to a net cash used of $0.77 million in Q1 2022[114] - Net cash used in investing activities for Q1 2023 was $0.18 million, primarily for the development of additional IvedaAI platforms[115] - Net cash provided by financing activities for Q1 2023 was $1.07 million, up from $0.15 million in Q1 2022, primarily due to the exercise of 945,900 warrants[116] - The company has limited liquidity and its continuation as a going concern depends on generating greater revenue or raising additional funds through capital markets[119] - Substantially all cash is deposited in three financial institutions, with amounts in the U.S. potentially exceeding FDIC insurance limits[120] - The company does not require collateral for accounts receivable, which are unsecured and subject to collection risk[121] - No doubtful accounts receivable allowances were set up for both U.S. and Taiwan-based segments for Q1 2023[122] Operational Insights - Iveda Taiwan accounted for 93% of total revenue in 2022, highlighting its significance to the company's overall financial performance[101] - As of March 31, 2023, the company had approximately $32 million in net operating loss carryforwards for federal income tax purposes, which will begin to expire in 2025[118] - Current levels of inflation in the U.S. and Taiwan have not significantly impacted the company's operations[123] - The company does not have off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing and liquidity risks[124]

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 Taiwan has been a significant revenue source since its acquisition in April 2011, focusing on deploying and integrating video surveillance systems for various sectors [17]. - Revenue from two customers out of 42 total customers represented approximately 52% of total revenue for the year ended December 31, 2022, with Chunghwa Telecom contributing 21% and Chicony Power Technology Co Ltd contributing 31% [73]. - Iveda Taiwan's operations accounted for 79% and 93% of the company's total revenue for the years ended December 31, 2022 and 2021, respectively [76]. - Net consolidated revenue for the year ended December 31, 2022, was $4.5 million, an increase of $2.6 million, or 133%, compared to $1.9 million in 2021 [183]. - Recurring service revenue for 2022 was $308,881, or 7% of net revenue, while equipment sales and installation revenue was $4.2 million, or 93% of net revenue [183]. Market Trends and Technology - The global AI market is projected to grow from USD 50.1 billion in 2020 to over USD 110 billion by 2024, indicating a doubling of spending [45]. - The global IoT market size was USD 308.97 billion in 2020, with a projected growth to USD 1,854.76 billion by 2028, reflecting a compound annual growth rate of 23.1% [46]. - IvedaAI technology enables accurate search across dozens to thousands of cameras in less than 1 second, enhancing efficiency and reducing operational costs [23]. - IvedaAI technology provides various AI functions, including object search, face recognition, and intrusion detection, enhancing video surveillance systems [164]. - Iveda has evolved its core product line to include AI intelligent search technology and IoT devices in response to digital transformation demands [163]. - The Cerebro IoT platform integrates various systems for centralized management, supporting smart city initiatives and enhancing operational efficiency [30]. - Iveda's Cerebro platform integrates multiple applications for centralized management of energy, security, and safety systems [171]. - Iveda's smart pole solution, Utilus, provides power and internet connectivity for sensor management, improving city services and emergency response times [33]. Financial Performance and Challenges - For the years ended December 31, 2022 and 2021, the company incurred net losses of approximately $3.3 million and $3.0 million, respectively, with accumulated losses of approximately $44 million through December 31, 2022 [58]. - The company experienced a significant reduction in revenues during 2020 and the first quarter of 2021 due to the global effects of the COVID-19 pandemic [59]. - The company expects to experience significant and rapid growth, which may strain its senior management team and financial resources [77]. - Operating expenses increased to $4.3 million for 2022, up $0.7 million, or 21%, primarily due to increased personnel and research and development expenses [185]. - Loss from operations for 2022 was $3.3 million, an increase of $0.6 million, or 22%, compared to $2.7 million in 2021 [186]. - Net cash used in operating activities for 2022 was $5.4 million, compared to $2.0 million in 2021 [190]. Risks and Dependencies - The company relies on key management personnel, and the loss of any of these individuals could materially adversely affect its business [67]. - The company cannot predict with certainty the potential customer demand for its products, which may impact its ability to generate sufficient revenue to become profitable [69]. - 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 [80]. - The company may face challenges in maintaining favorable terms with third-party manufacturers, impacting the ability to meet quality, quantity, or timeliness requirements [81]. - If unable to find timely replacements for manufacturers, the company may have to discontinue certain products, risking legal liability and loss of reputation [82]. - Increased prices from manufacturers or a decline in their financial condition could adversely affect the company's operations and costs [83]. - The company operates in a highly competitive industry, facing competition from companies with greater resources, which may affect profitability [84]. - The timing of revenue can vary significantly due to lengthy evaluation periods by customers, impacting cash flow [89]. - The company is subject to risks associated with international operations in Taiwan, including economic downturns and political instability, which could adversely affect revenue [92]. - Recent geopolitical issues, such as the conflict in Ukraine, could negatively impact the company's operations and financial condition [94]. - The company relies on service providers for distribution, and termination of relationships with larger providers could lead to a decline in business [102]. Intellectual Property and Legal Matters - Iveda does not own any patents but has licensed U.S. Patent No. 8,719,442 for cloud-video technologies, indicating a reliance on proprietary technology for competitive advantage [40]. - The company does not own any patents and relies on trade secrets and other measures to protect its intellectual property, which may not be sufficient [113]. - The company has been named as a defendant in two patent-related lawsuits, both of which have been settled [108]. - The company may incur substantial costs defending against claims of infringement on the proprietary rights of others [110]. Capital and Stock Information - The company intends to issue additional securities, which could result in substantial dilution for existing stockholders [121]. - 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 common stock is subject to significant price volatility, influenced by market perception and economic conditions [132]. - A prolonged decline in the stock price could adversely affect the company's ability to raise working capital and continue operations [133]. - The company is listed on The Nasdaq Capital Market under the symbol "IVDA" and must comply with continued listing requirements to avoid delisting [134]. - The company has issued a total of 15,066,739 shares of common stock as of December 31, 2022, with approximately 700 beneficial owners [152]. - The high bid for the common stock in the first quarter of fiscal year 2022 was $18.00, while the low bid was $5.28 [152]. Operational and Accounting Matters - The company has approximately $32 million in net operating loss carryforwards available for federal income tax purposes, which will begin to expire in 2025 [193]. - The company's federal net operating loss carryforwards begin to expire in 2025, while state carryforwards applicable in California and Arizona began to expire in 2014 [106]. - The company has no off-balance sheet arrangements or undisclosed borrowings, minimizing exposure to financing and liquidity risks [207]. - Critical accounting policies include stock-based compensation and income tax valuation allowances, which require complex judgments and estimates [210]. - The company reviews the recoverability of long-lived assets, primarily leased equipment, to ensure their carrying value is supported by future cash flows [211]. - The company reported that its internal control over financial reporting was not effective as of December 31, 2022, due to inadequate controls related to change management [127]. COVID-19 Impact and Economic Conditions - The Company has effectively maintained business operations during the COVID-19 pandemic without significant challenges or material expenditures expected for business continuity [203]. - Revenue for the year ending December 31, 2021, has been impacted by COVID-19 conditions, but the Company believes it has sufficient capital to sustain operations for one year [205]. - Current inflation levels in the United States and Taiwan have not significantly impacted the Company's operations [206].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ Commission File No. 001-41345 IVEDA SOLUTIONS, INC. (Exact name of registrant as specified in its charter) Nevada 20-2222203 (State or oth ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ Commission File No. 001-41345 IVEDA SOLUTIONS, INC. (Exact name of registrant as specified in its charter) Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Nevada 20-2222203 (State or other ju ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR Commission File No. 000-53285 IVEDA SOLUTIONS, INC. (Exact name of registrant as specified in its charter) Nevada 20-2222203 (State or other j ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2021 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______________ to ______________ Commission File No. 000-53285 Registrant's telephone number, including area code: (480) 307-8700 Securities registered pursuant to Section 12 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________ Commission File No. 000-53285 IVEDA SOLUTIONS, INC. (Exact name of registrant as specified in its charter) Nevada 20-2222203 (State or oth ...