What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 290 added, 205 removed, 793 unchanged (38% of the section changed)

2 unchanged sentences

30, 2023 AND DECEMBER 31, 2022

June 30, 2023

December 31, 2022

September 30,

CURRENT ASSETS

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Series B Preferred Stock, $ 0.00001 par value;

500 shares authorized, no shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

500 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Preferred Stock, value

Common Stock, $ 0.00001 par value;

100,000,000 shares authorized;

16,012,639 and 15,066,739 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

16,069,891 and 15,066,739 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional Paid-In Capital

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STATEMENTS OF OPERATIONS

THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

For the Three

June 30, 2023

September 30, 2023

For the Three

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2022

September 30, 2023

September 30, 2022

Equipment Sales

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( 2,387,090 )

( 1,709,804 )

OTHER INCOME (EXPENSE)

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Total Other Income (Expense)

Joint Venture Non-Controlled Interest

Venture Non-Controlled Interest

LOSS BEFORE INCOME TAXES

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( 2,395,333 )

( 1,728,640 )

BENEFIT (PROVISION) FOR INCOME TAXES

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$ ( 220,643 )

Balance, value

$ ( 44,706,671 )

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Comprehensive Loss

BALANCE AT June 30, 2023 (UNAUDITED)

BALANCE AT September 30, 2023 (UNAUDITED)

$ ( 46,843,124 )

$ ( 274,862 )

Balance, value

$ ( 46,843,124 )

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CONSOLIDATED STATEMENTS OF CASH FLOWS

THE SIX MONTHS ENDING JUNE 30, 2023 AND 2022

June 30, 2023

June 30, 2022

THE NINE MONTHS ENDING SEPTEMBER 30, 2023 AND 2022

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

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Common Stock Issued for Services

Common Stock Warrants Issued for Interest

Common Stock Warrants Issued for Services

(Increase) Decrease in Operating Assets

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( 1,865,342 )

( 3,296,178 )

CASH FLOWS FROM INVESTING ACTIVITIES

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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

( 1,747,021 )

Cash and Cash Equivalents- Beginning of Period

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CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

THE SIX MONTHS ENDING JUNE 30, 2023 AND 2022

June 30, 2023

June 30, 2022

THE NINE MONTHS ENDING SEPTEMBER 30, 2023 AND 2022

September 30,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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Common Stock issued for services

Warrants issued for services

accompanying Notes to Condensed Consolidated Financial Statements.

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While we still offer video surveillance technologies,

our core product line has evolved to include AI intelligent search technology that provide true intelligence to any video surveillance

our core product line has evolved to include AI intelligent video search technology that provides true intelligence to any video surveillance

system and IoT (Internet of Things) devices and platforms.

Our evolution is in response to digital transformation demands from many cities

and organizations across the globe.

Our IvedaAI intelligent video search technology adds critical intelligence to normally passive video

surveillance systems.

IvedaAI provides AI functions to any IP camera and most popular network video recorders (NVR) and video management

systems (VMS).

IvedaAI comes with an appliance or server, preconfigured with multiple AI functions based on the end user requirements.

Iveda also offers smart utility, smart sensors, gateways and trackers.

evolution is in response to digital transformation demands from many cities and organizations across the globe.

intelligent video search technology adds critical intelligence to normally passive video surveillance systems.

IvedaAI provides AI

functions to any IP camera and most popular network video recorders (NVR) and video management systems (VMS).

IvedaAI comes with an appliance

or server, preconfigured with multiple AI functions based on the end user requirements.

Search (No Database Required)

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Parking Detection

consists of deep-learning video analytics software running in a computer/server environment that can either be deployed at an edge level

or data center for centralized cloud model.

We combined hardware and artificial intelligence software for fast and efficient video search

for objects stored in an external (NVR) or storage device and live streaming video data from any IP camera.

works with any ONVIF-compliant IP cameras and most popular NVR/VMS (Video Management System) platforms, enabling accurate search across

dozens to thousands of cameras in less than 1 second.

IvedaAI products are designed to maximize efficiency, save time, and cut cost.

consists of deep-learning video analytics software running in a computer/server environment that can either be deployed at an edge

level or data center for centralized cloud model.

We combined hardware and artificial intelligence software for fast and efficient video

search for objects stored in an external (NVR) or storage device and live streaming video data from any IP camera.

works with any ONVIF-compliant IP cameras and most popular NVR/VMS (Video Management System) platforms, enabling accurate search

across dozens to thousands of cameras in less than 1 second.

IvedaAI products are designed to maximize efficiency, save time, and cut

Instead of watching hours of video recording after-the-fact, users can set up alerts.

offers many IoT sensors and devices for various applications, such as energy management, smart home, smart building, smart community and

patient/elder care.

offers many IoT sensors and devices for various applications, such as energy management, smart home, smart building, smart community

and patient/elder care.

Our gateway and station serve as the main hub for sensors and devices in any given area.

They are equipped with high-level

communication protocols such as Zigbee, WiFi, Bluetooth, and USB.

They connect to the Internet via Ethernet or cellular data network.

They are equipped with

high-level communication protocols such as Zigbee, WiFi, Bluetooth, and USB.

They connect to the Internet via Ethernet or cellular data

We provide IoT platforms that enable centralized device management and push digital services on a massive scale.

Our smart devices include

water sensor, environment sensor, entry sensor, smart plug, siren, body temperature pad, a care wrist watch and tracking devices.

Our smart devices

include water sensor, environment sensor, entry sensor, smart plug, siren, body temperature pad, a care wrist watch and tracking devices.

also offer smart power technology for office buildings, schools, shopping centers, hotels, hospitals, and smart city projects.

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payment system.

Cerebro manages all the components of our smart power technology, including statistics on energy consumption.

Cerebro is a software platform

designed to integrate multiple unconnected energy, security and safety applications and devices and control them through one comprehensive

user interface.

roadmap includes a dashboard for all of Iveda’s platforms for central management of all devices.

Cerebro is system agnostic

and will support cross-platform interoperability.

The common unified user interface will allow remote control of platforms, sensors

and subsystems throughout an entire environment.

This integration and unification of all subsystems enable acquisition and analysis

of all information on one central command center, allowing comprehensive, effective, and overall management and protection of a

Cerebro is a software technology platform that integrates a multitude of disparate systems for central access and management of

applications, subsystems, and devices throughout an entire environment.

It is system agnostic and will support cross-platform

interoperability.

Cerebro’s roadmap includes a dashboard for all of Iveda’s platforms for central management of all

It provides remote access to a Dashboard for a single user interface, providing convenient anywhere, anytime access and

analysis of relevant information in a timely manner for managing an entire organization or city.

Cerebro links city systems and

subsystems inseparably to each other.

This integration and unification of all subsystems enable acquisition and analysis of all

information on one central entity allowing comprehensive, effective and overall management and protection of a city.

is our smart power solution, utilizing our Cerebro IoT platform.

This completes our digital transformation solution crucial in smart

city deployments as well as in large organizations.

We offer smart power technology for office buildings, schools, shopping centers,

hotels, hospitals, and smart city projects.

This product includes smart power, water meter, smart lighting controls systems, and smart

payment system.

the last few years, smart city has been a hot topic among cities across the globe.

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video surveillance systems, and smart power.

is our smart pole solution, utilizing our Cerebro IoT platform.

This completes our digital transformation solution crucial in smart city

deployments as well as in large organizations.

Iveda leverages infrastructure already available in most modern cities – light poles

equip existing poles with Utilus.

Utilus is our smart pole

solution, utilizing our Cerebro IoT platform.

This completes our digital transformation solution crucial in smart city deployments as

well as in large organizations.

Iveda leverages infrastructure already available in most modern cities – Light poles with power

We equip existing poles with Utilus.

Utilus consists of power and Internet, establishing a communication network for access and management

of sensors and devices that the city requires to keep its citizens safe and secure and to effectively manage utility consumption.

smart pole offering is also ideal for government or large scale city deployments:

smart pole offering is also ideal for:

or large-scale city deployments

and Improving City Services

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Analytics and Monetization Opportunities

launched in November 2022, is a simple, easy to use suite of wireless health and wellness devices intended to help you monitor the

health and activities of your loved ones, even when you can’t be there yourself.

Our mission is to help ensure your loved

one’s safety and independence.

Stay connected to your elderly loved ones with our advanced IoT devices for real-time

monitoring, fall detection, medication reminders and more.

With IvedaCare, you not only can monitor your home and loved ones from

afar, but can potentially make life-saving decisions using the app.

Cloud-based, wireless sensors collect real-time data

shared with the entire family circle within the app.

Customers may add a subscription service for Pro Monitoring.

If the Trusted

Circle is unavailable, our emergency call center will dispatch emergency services quickly.

is an AI vision software that uses video taken on IP cameras, AR glasses, Androids, and tablets to analyze and process data in real-time.

vumastAR is fully customizable to the user's needs, with one short video the AI can be trained in as little as two hours.

in multiple industries for uses such as:

and Maintenance Exams:

vumastAR has the power to assist with critical measuring of carcinogenic

chemical compound levels, electrical wiring, and welding inspections.

and Line Work:

Fast and accurate machine recognition enables itemized counting, inventory

audits, and assembly kitting.

Accurately identify and quantify medication, greatly reducing the manual labor of counting

pills while eliminating human error.

Detect defects and anomalies for improved accuracy, increasing the bottom line

by actively reducing lost revenue incurred from manual mistakes.

● Manufacturing:

Digitalize meter and gauge reading and monitoring, as well as part number identification,

with the ability to turn analog information into digital data

● Transportation:

Enhance safety and security for operations including loading and unloading tanker trucks,

protecting both personnel and products/equipment.

Ensure correct item identification and organization, providing increased accuracy for

retail checkout and product categorization, ultimately impacting revenue streams.

is sold as a license per device with a monthly subscription requirement for cloud access to trained AI models.

is a system that enables users to use pre-existing IP cameras and apply AI analytics without the need for large servers or a dedicated

IT department.

Designed to be plug-and-play IvedaXpress provides a hassle free set up process with no maintenance required for hardware.

Each IP camera is hosted from a local computer or smartphone for live viewing and playback.

Video may be stored on that local computer

or stored remotely using free storage from Amazon or Dropbox.

Smart UVC is a Commercial-grade, AI-driven Ultraviolet Germicidal Irradiation (UVGI).

Iveda Smart UVC adds UV lights to standard

HVAC vents for quick, easy, and inexpensive deployment to homes and commercial buildings.

Leveraging the existing air circulation system,

Iveda Smart UVC vents disinfect the air by irradiating UV light on the passing air.

Eliminating the need to manually disinfect offices,

meeting rooms, and other workspaces.

Iveda Smart UVC can be Integrated with Iveda SPS (smart power management) and sensors to efficiently

and effectively operate the light source upon detected movement.

Smart Drone is a cloud-based Unmanned Aerial Vehicle drone equipped with Iveda’s Sentir Video Surveillance System and IvedaAI Intelligent

Video Search Technology.

Autonomous - Scheduled autonomous take-off, flight mission execution, monitoring, landing

and recharging

● Intelligent

Computing - Live video streaming, real-time object recognition and tracking

Design- Weather resistant industrial grade systems

Helicopter Drone , gasoline-powered multi-purpose Helicopter Drone is a highly advanced aircraft known for its long

flight time, impressive payload capacity, and exceptional performance.

Engineered with three half-symmetrical blades and a strong carbon

structure, it ensures optimal efficiency.

Our company’s 100cc 4-stroke gasoline engine powers this helicopter.

With a spacious

area between the skids and body, users can easily mount various payloads, while the integration of a fully automatic flight control system

enhances its agility and functionality.

Offering extended flight duration is a versatile and reliable choice for diverse applications.

Features of Our Helicopter Control System:

via Ground Station or Remote Control

● Pre-Planned

Flight Routes, Including Takeoff, Landing, and Autonomous Navigation

● Instantaneous

Display of Flight Information

● Comprehensive

Flight Data Recording and Playback

Ground Station Interface with Joystick Control

Station for Adjustable Gimbal Angle and Direction

Landing Functionality for Added Safety

Smart Utility Cabinet gives end users a convenient tool to monitor their daily energy consumption, to pinpoint electrical leaks,

and to prevent power line overload and potential fire.

It utilizes IoT sensors to detect abnormalities in consumption, temperature and

Iveda Smart Utility Cabinet has an internal environment control design, housed in a durable industrial-grade cabinet.

a smart edge computing gateway with multi-RF communication protocols such as 4G, Z-Wave and WiFi and tampering sensor for unauthorized

Smart water meter and gas meter may be added to the Cabinet.

Body Camera streams live video, using 4G, to headquarters and doubles as a walkie talkie with a push-to-talk feature.

With its multi-mode

audio, it can also be used for broadcasting and hands-free audio conferencing for group talk.

Vemo has WiFi capability which is ideal

for city-wide deployments.

Vemo transmits live streaming video instantaneously to the cloud without additional software or hardware.

Vemo’s cloud management platform can centrally manage an unlimited number of devices and video can be accessed on a PC, Android

and iOS client.

Moreover, Vemo can stream directly into the IvedaAI platform for real-time video analytics to search for faces, objects

or license plates in real time.

launched in November 2022, is a simple, easy to use suite of wireless health and wellness devices intended to help you monitor the health

and activities of your loved ones, even when you can’t be there yourself.

Our mission is to help ensure your loved one’s

safety and independence.

Stay connected to your elderly loved ones with our advanced IoT devices for real-time monitoring, fall detection,

medication reminders and more.

With IvedaCare, you not only can monitor your home and loved ones from afar but can potentially make life-saving

decisions using the app.

Cloud-based, wireless sensors collect real-time data shared with the entire family circle within the app.

may add a subscription service for Pro Monitoring.

If the Trusted Circle is unavailable, our emergency call center will dispatch emergency

services quickly.

Historically,

we sold and installed video surveillance equipment, primarily for security purposes and secondarily for operational efficiencies and

We also provided video hosting, in-vehicle streaming video, archiving, and real-time remote surveillance services to a

variety of businesses and organizations.

While we previously only used off-the shelf camera systems from well-known camera brands,

we now source our own cameras using manufacturers in Taiwan in order for us to be more flexible in fulfilling our customer needs.

now have the capability to provide IP cameras and NVRs based on customer specifications.

We still utilize ONVIF (Open Network Video

Interface Forum) cameras, which are a global standard for the interface of IP-based physical security products.

We also provided video hosting, in-vehicle streaming video, archiving, and real-time remote surveillance services to a variety

of businesses and organizations.

While we previously only used off-the shelf camera systems from well-known camera brands, we now source

our own cameras using manufacturers in Taiwan in order for us to be more flexible in fulfilling our customer needs.

We now have the capability

to provide IP cameras and NVRs based on customer specifications.

We still utilize ONVIF (Open Network Video Interface Forum) cameras,

which are a global standard for the interface of IP-based physical security products.

2014, we changed our revenue model from direct project-based sales to licensing our platform and selling IoT hardware to service providers

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all cash is deposited in three financial institutions, two in the United States and one in Taiwan.

At times, amounts on deposit in

the United States may be in excess of the FDIC insurance limit.

Deposits in Taiwan financial institutions are insured by CDIC

(Central Deposit Insurance Corporation) with maximum coverage of NTD 3 million.

At times, amounts on deposit in Taiwan may be

in excess of the CDIC Insurance limit.

At times, amounts on deposit in the

United States may be in excess of the FDIC insurance limit.

Deposits in Taiwan financial institutions are insured by CDIC (Central Deposit

Insurance Corporation) with maximum coverage of NTD 3 million.

At times, amounts on deposit in Taiwan may be in excess of the CDIC Insurance

receivables are unsecured, and we are at risk to the extent such amount becomes uncollectible.

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OF ACCOUNTS AND OTHER PAYABLES

June 30, 2023

September 30, 2023

December 31, 2022

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stock-based compensation expense for the years ended December 31, 2022 and 2021, respectively and no stock based compensation for the

six months ended June 30, 2023.

nine months ended September 30, 2023.

Value of Financial Instruments

value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of June 30, 2023

value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of September

30, 2023 and December 31, 2022.

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values.

The respective carrying values of certain on-balance-sheet financial instruments approximate their fair

These financial instruments include cash, accounts receivable, 0 payable, accrued expenses, and amounts due to related parties.

values were assumed to approximate carrying values for these financial instruments because they are short-term in nature and their carrying

amounts approximate their fair values or because they are receivable or payable on demand.

Fair values were assumed to approximate carrying values for these financial instruments because they are short-term in nature and their

carrying amounts approximate their fair values or because they are receivable or payable on demand.

conduct operations in various geographic regions.

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OF NET REVENUE AND NET ASSETS (LIABILITIES) FOR OTHER SIGNIFICANT GEOGRAPHIC REGIONS

June 30, 2023 (UNAUDITED)

September 30, 2023

Net Assets (Liabilities)

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OF SHORT -TERM DEBT

June 30, 2023

December 31, 2022

September 30,

Loan Agreement with Shanghai Bank at 3.06 % interest rate per annum due August 2023 and January 2024 .

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OF LONG -TERM DEBT

June 30, 2023

December 31, 2022

September 30,

Loans from Shanghai Bank with interest rates 1.50 % - 2.97 % per annum due February 2024 – November 2026

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of December 31, 2022 and December 31, 2021, there were 1,014,438 and 907,188 options outstanding, respectively, under all the option

For the six months ended June 30, 2023 there were no options granted and 1,250 options cancelled.

For the nine months ended September 30, 2023 there were 2,500 options granted and 10,625 options cancelled.

options may be granted as either incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986,

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The following table accounts for federal net operating loss carryforwards only.

SUMMARY OF OPERATING LOSS CARRYFORWARDS

OF OPERATING LOSS CARRYFORWARDS

Net Operating

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earnings per share (“EPS”) is computed by dividing reported earnings available to stockholders by the weighted average shares

We had net losses for the six months ended June 30, 2023 and 2022 and the effect of including dilutive securities in the

earnings per common share would have been anti-dilutive for the purpose of calculating EPS.

Accordingly, all options, warrants, and shares

potentially convertible into common shares were excluded from the calculation of diluted earnings per share for the Six months ended

June 30, 2023 and 2022.

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

June 30, 2023

June 30, 2022

We had net losses for the nine months ended September 30, 2023 and 2022 and the effect of including dilutive securities

in the earnings per common share would have been anti-dilutive for the purpose of calculating EPS.

Accordingly, all options, warrants,

and shares potentially convertible into common shares were excluded from the calculation of diluted earnings per share for the Nine months

ended September 30, 2023 and 2022.

OF EARNINGS PER SHARE BASIC AND DILUTED

September 30, 2023

September 30, 2022

$ ( 2,136,453 )

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9 CONTINGENT LIABILITIES—TAIWAN

to certain contracts with Siemens, Chicony Power Technology, Chung-Hsin Electric and Machinery Manufacturing Corp, Iveda Taiwan is required

to provide after-project services.

If Iveda Taiwan fails to provide these after-project services in the future, other parties of the

related contract would have recourse.

The financial exposure to Iveda Taiwan in the event of failure to provide after- project services

in the future as of June 30, 2023 is $ 297,424 .

to certain contracts with Siemens, Chicony Power Technology, Shihlin Electric & Engineering Corporation and Chung-Hsin Electric &

Machinery Manufacturing Corp, Iveda Taiwan is required to provide after-project services.

If Iveda Taiwan fails to provide these after-project

services in the future, other parties of the related contract would have recourse.

The financial exposure to Iveda Taiwan in the event

of failure to provide after- project services in the future as of September 30, 2023 is $ 304,854 .

10 SUBSEQUENT EVENTS

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were no new standards recently issued which would have an impact on our operations or disclosures.

of Operations for the Three and Six Months Ended June 30, 2023 Compared with the Three and Six Months Ended June 30, 2022

recorded net consolidated revenue of $2.39 million for the three months ended June 30, 2023, compared with $0.65 million for the three

months ended June 30, 2022, an increase of ($1.74 million, or 267%.

For the three months ended June 30, 2023, our service revenue was

$0.08 million, or 3% of net revenue, and our equipment sales and installation revenue was $2.32 million, or 97% of net revenue.

three months ended June 30, 2022, our service revenue was $.06 million, or 9% of consolidated net revenue, and our equipment sales and

installation revenue was $.59 million, or 91% of net revenue.

The increase in total revenue in 2023 compared with the same period in

2022 is attributable primarily to increased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term contracts

awarded and started during 2022 and additional government agency contracts.

recorded net consolidated revenue of $4.60 million for the six months ended June 30, 2023, compared with $0.88 million for the six months

ended June 30, 2022, an increase of $3.71 million, or 421%.

For the six months ended June 30, 2023, our service revenue was $0.28 million,

or 6% of net revenue, and our equipment sales and installation revenue was $4.32, or 94% of net revenue.

In fiscal 2022, our service

revenue was $0.10, or 12% of consolidated net revenue, and our equipment sales and installation revenue was $0.78, or 88% of net revenue.

The increase in total revenue in 2023 compared with the same period in 2022 is attributable primarily to increased equipment sales from

Iveda Taiwan as a result of delivery timing related to long-term contracts awarded and started during 2022 and additional government

agency contracts.

of Operations for the Three and Nine months Ended September 30, 2023 Compared with the Three and Nine months Ended September 30, 2022

recorded net consolidated revenue of $0.87 million for the three months ended September 30, 2023, compared with $1.47 million for the

three months ended September 30, 2022, a decrease of ($0.59) million, or (41%).

For the three months ended September 30, 2023, our service

revenue was $0.09 million, or 10% of net revenue, and our equipment sales and installation revenue was $0.78 million, or 90% of net revenue.

For the three months ended September 30, 2022, our service revenue was $.10 million, or 7% of consolidated net revenue, and our equipment

sales and installation revenue was $1.36 million, or 93% of net revenue.

The decrease in total revenue in 2023 compared with the same

period in 2022 is attributable primarily to decreased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term

contracts awarded and started during 2022 and additional government agency contracts.

recorded net consolidated revenue of $5.47 million for the nine months ended September 30, 2023, compared with $2.35 million for the

nine months ended September 30, 2022, an increase of $3.12 million, or 133%.

For the nine months ended September 30, 2023, our service

revenue was $0.36 million, or 7% of net revenue, and our equipment sales and installation revenue was $5.11 million, or 93% of net revenue.

In fiscal 2022, our service revenue was $0.21 million, or 9% of consolidated net revenue, and our equipment sales and installation revenue

was $2.14 million, or 91% of net revenue.

The increase in total revenue in 2023 compared with the same period in 2022 is attributable

primarily to increased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term contracts awarded and started

during 2022 and additional government agency contracts.

cost of revenue was $0.73 million (84% of revenue;

gross margin of 12%) for the three months ended June 30, 2023, compared with $0.46

gross margin of 16%) for the three months ended September 30, 2023, compared with

$1.11 million (76% of revenue;

29% gross margin) for the three months ended June 30, 2022, an increase of ($1.65 million), or (356%).

24% gross margin) for the three months ended September 30, 2022, a decrease of ($0.38 million), or (34%).

The decrease in cost of revenue was primarily driven by decreased Iveda Taiwan revenue.

The decrease in overall gross margin was primarily

attributed to the more indicative and standard margin of Iveda Taiwan revenue as a result of additional lower margin, larger long-term

contracts awarded and started during 2022.

cost of revenue was $4.56 million (83% of revenue;

gross margin of 17%) for the nine months ended September 30, 2023, compared with $1.67

million (71% of revenue;

29% gross margin) for the nine months ended September 30, 2022, an increase of $2.89 million, or 174%.

in cost of revenue was primarily driven by increased Iveda Taiwan revenue.

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awarded and started during 2022.

cost of revenue was $3.83 million (83% of revenue;

gross margin of 17%) for the six months ended June 30, 2023, compared with $0.55 million

(63% of revenue;

37% gross margin) for the six months ended June 30, 2022, an increase of $3.28 million, or 593%.

The increase in cost

of revenue was primarily driven by increased Iveda Taiwan revenue.

The decrease in overall gross margin was primarily attributed to the

more indicative and standard margin of Iveda Taiwan revenue as a result of additional lower margin, larger long-term contracts awarded

and started during 2022.

expenses were $1.1 million for the three months ended June 30, 2023, compared with $1.2 million for the three months ended June 30, 2022,

expenses were $1.05 million for the three months ended September 30, 2023, compared with $1.03 million for the three months ended September

30, 2022, a decrease of ($0.02) million, or (2%).

This net decrease in operating expenses in 2023 compared with 2022 is due primarily related to a

stabilization in personnel in the US based administrative, sales and technical support personnel for IvedaAI and reduced travel during

the three months ended June 30, 2023.

expenses were $2.1 million for the six months ended June 30, 2023, compared with $2.0 million for the six months ended June 30, 2022,

This net decrease in operating expenses in 2023 compared with 2022 is due primarily

related to a stabilization in personnel in the US based administrative, sales and technical support personnel for IvedaAI and reduced

travel during the three months ended September 30, 2023.

expenses were $3.19 million for the nine months ended September 30, 2023, compared with $3.07 million for the nine months ended September

30, 2022, an increase of $0.12 million, or 4%.

This minimal net increase in operating expenses in 2023 compared with 2022 is due primarily related

to a stabilization in personnel in the US based administrative, sales and technical support personnel for IvedaAI and increased investor

and public relations for the six months ended June 30, 2023.

This minimal net increase in operating expenses in 2023 compared with 2022 is due primarily

related to a stabilization in personnel in the US based administrative, sales and technical support personnel for IvedaAI and increased

investor and public relations for the nine months ended September 30, 2023.

from Operations

from operations decreased to $0.82 million for the three months ended June 30, 2023, compared with $1.06 million for the three months

ended June 30, 2022, a decrease of $0.24 million, or 22%.

A majority of the decrease in loss from operations was primarily due to increased

net revenues.

from operations decreased to $1.4 million for the six months ended June 30, 2023, compared with $1.7 million for the six months ended

June 30, 2022, a decrease of $0.34 million, or 20%.

A majority of the decrease in loss from operations was primarily due to increased

net revenues.

income (expense)-net was approximately $2,800 of net other income for the three months ended June 30, 2023, compared with ($6,800) of

net other expense for the three months ended June 30, 2022, an increase of $9,600 of net other income.

The majority of the increase in

other income for 2023 was interest income from cash in the bank.

income (expense)-net was approximately $22,000 for the six months ended June 30, 2023, compared with ($18,000) for the six months ended

June 30, 2022, an increase of $41,000 other income.

The majority of the increase in other income for 2023 was interest income from cash

from operations increased to $0.9 million for the three months ended September 30, 2023, compared with $0.7 million for the three months

ended September 30, 2022, an increase of $0.2 million, or 34%.

A majority of the increase in loss from operations was primarily due to

decreased net revenues and gross profit.

from operations decreased to $2.3 million for the nine months ended September 30, 2023, compared with $2.4 million for the nine months

ended September 30, 2022, a decrease of ($0.1) million, or (5%).

A majority of the decrease in loss from operations was primarily due

to increased net revenues and gross profits.

income (expense)-net was approximately $54,000 of net other income for the three months ended September 30, 2023, compared with $11,000

of net other income for the three months ended September 30, 2022, an increase of $44,000 of net other income.

The majority of the increase

in other income for 2023 was interest income from cash in the bank.

income (expense)-net was approximately $76,000 income for the nine months ended September 30, 2023, compared with ($8,000) expense for

the nine months ended September 30, 2022, a net increase of $84,000 other income.

The majority of the increase in other income for 2023

was interest income from cash in the bank.

Joint Venture (JV)

consolidate the financial statements of the JV and recorded approximately $24,000 of offset related to the non-controlled portion of

the JV loss for the three and six months ended June 30, 2023.

loss was $0.76 million for the three months ended June 30, 2023, compared with $1.06 million for the three months ended June 30, 2022.

the JV loss for the three months ended September 30, 2023 and $83,000 nine months ended September 30, 2023.

loss was $0.83 million for the three months ended September 30, 2023, compared with $0.67 million for the three months ended September

The increase of $0.16 million, or 24%, in net loss was primarily the result of decreased net revenues in Iveda Taiwan.

loss was $2.1 million for the nine months ended September 30, 2023, compared with $2.4 million for the nine months ended September 30,

The decrease of $0.3 million, or 11%, in net loss was primarily the result of increased net revenues in Iveda Taiwan.

loss was $1.3 million for the six months ended June 30, 2023, compared with $1.7 million for the six months ended June 30, 2022.

decrease of $0.36 million, or 21%, in net loss was primarily the result of increased net revenues in Iveda Taiwan.

and Capital Resources

of June 30, 2023, we had cash and cash equivalents of $8.6 million compared to $7.3 million as of December 31, 2022.

This increase in

our cash and cash equivalents for the six months ended June 30, 2023 is related to the exercise of 945,900 warrants at $1.40 with net

proceeds of $1.3 Million offset by of the operating losses during the six months ended June 30, 2023.

There are no legal or economic

factors that materially impact our ability to transfer funds between our U.S.-based and Taiwan-based segments.

cash provided in operating activities during the six months ended June 30, 2023 was $0.85 million compared to ($2.18) million net cash

used during the six months ended June 30, 2022.

Net cash provided in operating activities for the six months ended June 30, 2023 consisted

primarily of the $0.93 million net collection of accounts receivable and an increase of $0.82 of accounts and other payables offset by

net loss of ($1.3) million.

Other factors for the six months ended June 30, 2023 included $0.21 cash provided from the reduction of inventory.

Net cash used in operating activities for the six months ended June 30, 2022 consisted primarily of the ($1.7) million net loss including

$0.26 million of non-cash charges (primarily stock option compensation and stock for services).

An increase in inventory used $0.29 and

a decrease by $0.83 million in additional accounts and other payables offset by a decrease of $0.37 million in accounts receivable.

cash used in investing activities for the six months ended June 30, 2023 was $0.44 million consisting primarily of the development of

additional IvedaAI platforms.

Net cash used by investing activities during the six months ended June 30, 2022 was $1,964.

cash provided by financing activities for the six months ended June 30, 2023 was $.94 million compared with $7.0 million provided during

the six months ended June 30, 2022.

This increase in our cash and cash equivalents for the six months ended June 30, 2023 is related

primarily to the exercise of 945,900 warrants at $1.40 with net proceeds of $1.3 million offset by $0.36 million payments against short

and long term loans in Taiwan during the six months ended June 30, 2023.

Net cash provided by financing activities in 2022 of $7.0 million

is primarily a result of the proceeds from the stock offering that closed April 2022.

of September 30, 2023, we had cash and cash equivalents of $5.6 million compared to $7.3 million as of December 31, 2022.

This decrease

in our cash and cash equivalents for the nine months ended September 30, 2023 is related to the exercise of 945,900 warrants at $1.40

with net proceeds of $1.3 Million offset by of the operating losses during the nine months ended September 30, 2023.

There are no legal

or economic factors that materially impact our ability to transfer funds between our U.S.-based and Taiwan-based segments.

cash used in operating activities during the nine months ended September 30, 2023 was ($1.9) million compared to ($3.3) million net cash

used during the nine months ended September 30, 2022.

Net cash provided by operating activities for the nine months ended September 30,

2023 consisted primarily of the $0.76 million increase of accounts receivable.

Net cash used in operating activities for the nine months

ended September 30, 2023 were primarily the ($2.1) million net loss and a decrease of ($0.38) million of accounts and other payables.

Net cash used in operating activities for the nine months ended September 30, 2022 consisted primarily of the ($2.4) million net loss

offset by $0.26 million of non-cash charges (primarily stock option compensation and stock for services) and an increase in inventory

of $0.37 million and a decrease by $0.81 million in additional accounts and other payables were the additional net cash used in operating

cash used in investing activities for the nine months ended September 30, 2023 was $0.64 million consisting primarily of the development

of additional IvedaAI platforms.

Net cash used by investing activities during the nine months ended September 30, 2022 was $5,184.

cash provided by financing activities for the nine months ended September 30, 2023 was $.84 million compared with $12.6 million provided

during the nine months ended September 30, 2022.

This increase in our cash and cash equivalents for the nine months ended September 30,

2023 is related primarily to the exercise of 945,900 warrants at $1.40 with net proceeds of $1.3 million offset by $0.46 million payments

against short and long term loans in Taiwan during the nine months ended September 30, 2023.

Net cash provided by financing activities

in 2022 of $7.0 million is primarily a result of the proceeds from the stock offering that closed April 2022 and 5.0 million a result

of the proceeds from the stock offering that closed August 2022.

have experienced significant operating losses since our inception.

At June 30, 2023, we had approximately $32 million in net operating

At September 30, 2023, we had approximately $32 million in net operating

loss carryforwards available for federal income tax purposes, which will begin to expire in 2025.

40 unchanged sentences

For our U.S.-based segment,

we had no doubtful accounts receivable allowances for the six months ended June 30, 2023 and year ended December 31, 2022.

For our Taiwan-based

segment, we set up no doubtful accounts receivable allowances for the six months ended June 30, 2023 and year ended December 31, 2022.

We deem the rest of our accounts receivable to be collectible based on certain factors, including the nature of the customer contracts

and past experience with similar customers.

Delinquent receivables are written off based on individual credit valuation and specific

circumstances of the customer, and we generally do not charge interest on past due receivables.

we had no doubtful accounts receivable allowances for the nine months ended September 30, 2023 and year ended December 31, 2022.

our Taiwan-based segment, we set up no doubtful accounts receivable allowances for the nine months ended September 30, 2023 and year

ended December 31, 2022.

We deem the rest of our accounts receivable to be collectible based on certain factors, including the nature

of the customer contracts and past experience with similar customers.

Delinquent receivables are written off based on individual credit

valuation and specific circumstances of the customer, and we generally do not charge interest on past due receivables.

the periods for which financial information is presented, we do not believe that the current levels of inflation in the United States

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements