Iveda Solutions(IVDA) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 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 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 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 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 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 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 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 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] - 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][28] 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] - 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] NOTE 2 Accounts and Other Payables 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 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] NOTE 4 PREFERRED STOCK 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] - No preferred shares were issued or outstanding as of June 30, 2025, and December 31, 2024[7] NOTE 5 COMMON STOCK 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] - A 1-for-8 reverse stock split was effectuated on September 17, 2024[70] 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 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][72] 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] NOTE 7 WARRANTS 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] NOTE 8 LEASES 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] 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 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] - 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] NOTE 10 SEGMENT INFORMATION 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] 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] NOTE 11 SUBSEQUENT EVENTS 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] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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 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] 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] 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] Technology / Products 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][102] - 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] - 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][112][113][114][115][117][120][121][124] 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] - 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] Critical Accounting Policies and Estimates 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] - Critical accounting policies and related judgments and estimates are unchanged from the consolidated financial statements for the year ended December 31, 2024[127] New Accounting Standards 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] Results of Operations for the Three Months Ended June 30, 2025 Compared with the Three Months Ended June 30, 2024 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] - The decrease in overall gross margin was attributed to lower margin larger government contract sales in Taiwan[132] - Operating expenses decreased primarily due to no significant investor relations campaigns in US operations[132] Results of Operations for the Six Months Ended June 30, 2025 Compared with the Six Months Ended June 30, 2024 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] - The decrease in overall gross margin was attributed to lower margin larger government contract sales in Taiwan[137] - Operating expenses decreased primarily due to a reduction in R&D expense in the US and no significant investor relations campaigns[137] Liquidity and Capital Resources 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][144] - 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] Effects of Inflation 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] Off Balance Sheet Arrangements 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] ITEM 3. 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 - As a smaller reporting company, Iveda Solutions, Inc. is not required to provide quantitative and qualitative disclosures about market risk[150][162] ITEM 4. CONTROLS AND PROCEDURES 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 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][152] Management's Annual Report on Internal Control over Financial Reporting 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] - Material weaknesses identified include inadequate segregation of duties and an insufficient number of personnel with appropriate U.S. GAAP knowledge and experience[154] - Remediation efforts are ongoing to implement and document policies, procedures, and internal controls[155] Changes in Internal Control over Financial Reporting 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] Inherent Limitations on Effectiveness of Controls 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] Changes in Disclosure Controls and Procedures No changes in disclosure controls and procedures were reported during the period - No changes in disclosure controls and procedures were reported[159] PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 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] ITEM 1A. RISK FACTORS 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] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 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] ITEM 3. DEFAULTS UPON SENIOR SECURITIES No defaults upon senior securities were reported for the period - No defaults upon senior securities were reported[164] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the company - This item is not applicable to the company[165] ITEM 5. OTHER INFORMATION 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] - 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] ITEM 6. EXHIBITS 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] SIGNATURES 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]