What changed in this filing

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Item 9A. Controls and Procedures

2026-03-31 compared with 2025-04-15 · 623 added, 801 removed, 906 unchanged (61% of the section changed)

9A – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Principal Financial

Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange

Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation

Date”), concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable

assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed,

summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

Based on their evaluation of our disclosure controls

and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024, our Principal Executive Officer

and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective to provide reasonable assurance

that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized

and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our

management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required

Management’s Annual Report on Internal

Control over Financial Reporting

Our management is responsible for establishing and

maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934

Rule 13a-15(f).

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on

the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission

(the “COSO Framework”).

Our internal control over financial reporting is a process designed to provide reasonable assurance

regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance

As of December 31, 2024, management assessed the effectiveness

of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established

in Internal Control-Integrated Framework of 2013 issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”)

and SEC guidance on conducting such assessments.

Based on that evaluation under this framework, our management concluded that as of December

31, 2024, our internal control over financial reporting was not effective because of the following material weaknesses:

The material weaknesses identified include (i) the

Company had inadequate segregation of duties consistent with control objectives and (ii) the Company had an insufficient number of personnel

with an appropriate level of U.S.

GAAP knowledge and experience and ongoing training in the application of U.S.

GAAP and SEC disclosure

requirements commensurate with the Company’s financial reporting requirements.

We are working to remediate the deficiencies and material

Our remediation efforts are ongoing, and we will continue our initiatives to implement and document policies, procedures,

and internal controls.

We have taken steps to enhance our internal control environment and plan to take additional steps to remediate

the deficiencies and address material weaknesses.

In addition, we continue to evaluate, remediate and improve our internal control over

financial reporting, executive management may elect to implement additional measures to address control deficiencies or may determine

that the remediation efforts described above require modification.

Executive management, in consultation with and at the direction of

our Audit Committee, will continue to assess the control environment and the above-mentioned efforts to remediate the underlying causes

of the identified material weaknesses.

Although we plan to complete this remediation process

as quickly as possible, we are unable, at this time to estimate how long it will take;

and our efforts may not be successful in remediating

the deficiencies or material weaknesses.

This Annual Report does not include an attestation

report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.

report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC

that permit the company to provide only management’s report on internal control in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over

financial reporting during the year ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are

subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies

or procedures may deteriorate.

All internal control systems, no matter how well designed, have inherent limitations.

These include the

fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures

such as simple errors or mistakes or intentional circumvention of the established process.

Therefore, even those systems determined to

be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Because of the inherent

limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal

of Disclosure Controls and Procedures

Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures”

(as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual

Report on Form 10-K (the “Evaluation Date”), concluded that as of the Evaluation Date, our disclosure controls and procedures

were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under

the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission

rules and forms.

on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as

of December 31, 2025, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and

procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or

submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms,

and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial

officer, as appropriate, to allow timely decisions regarding required disclosure.

Annual Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined

in the Securities Exchange Act of 1934 Rule 13a-15(f).

Our management conducted an evaluation of the effectiveness of our internal

control over financial reporting based on the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring

Organizations of the Treadway Commission (the “COSO Framework”).

Our internal control over financial reporting is a process

designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements

for external purposes in accordance with U.S.

of December 31, 2025, management assessed the effectiveness of our internal control over financial reporting based on the criteria for

effective internal control over financial reporting established in Internal Control-Integrated Framework of 2013 issued by the Committee

of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.

that evaluation under this framework, our management concluded that as of December 31, 2025, our internal control over financial reporting

was not effective because of the following material weaknesses:

material weaknesses identified include (i) the Company had inadequate segregation of duties consistent with control objectives and (ii)

the Company had an insufficient number of personnel with an appropriate level of U.S.

GAAP knowledge and experience and ongoing training

in the application of U.S.

GAAP and SEC disclosure requirements commensurate with the Company’s financial reporting requirements.

are working to remediate the deficiencies and material weaknesses.

Our remediation efforts are ongoing, and we will continue our initiatives

to implement and document policies, procedures, and internal controls.

We have taken steps to enhance our internal control environment

and plan to take additional steps to remediate the deficiencies and address material weaknesses.

In addition, we continue to evaluate,

remediate and improve our internal control over financial reporting, executive management may elect to implement additional measures

to address control deficiencies or may determine that the remediation efforts described above require modification.

Executive management,

in consultation with and at the direction of our Audit Committee, will continue to assess the control environment and the above-mentioned

efforts to remediate the underlying causes of the identified material weaknesses.

we plan to complete this remediation process as quickly as possible, we are unable, at this time to estimate how long it will take;

our efforts may not be successful in remediating the deficiencies or material weaknesses.

Annual Report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal

control over financial reporting.

However, these inherent limitations are known features of the financial reporting process.

Changes in Disclosure Controls and Procedures

Management’s report was not subject to attestation by the Company’s independent registered

public accounting firm pursuant to rules of the SEC that permit the company to provide only management’s report on internal control

in this annual report.

in Internal Control over Financial Reporting

were no changes in our internal control over financial reporting during the year ended December 31, 2025, that have materially affected,

or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that

the degree of compliance with the policies or procedures may deteriorate.

All internal control systems, no matter how well designed,

have inherent limitations.

These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal

control can occur because of human failures such as simple errors or mistakes or intentional circumvention of the established process.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation

and presentation.

Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented

or detected on a timely basis by internal control over financial reporting.

However, these inherent limitations are known features of

the financial reporting process.

in Disclosure Controls and Procedures

9B – OTHER INFORMATION

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10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation

A copy of the Company’s insider trading policy is attached as Exhibit 19.1 hereto.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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forth below is information concerning our directors, director nominees, executive officers and other key employees.

Chief Executive Officer, Chairman of the Board of Directors

and President

Chief Financial Officer, Treasurer and Corporate Secretary

Chief Technology Officer

Joseph Farnsworth

Alejandro Franco

Executive Officer, Chairman of the Board of Directors and President

Financial Officer, Treasurer and Corporate Secretary

Technology Officer

Ly founded our company and has served as our Chief Executive Officer and Chairman of the Board of Directors since October 2009.

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the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;

reviewing with the independent

auditors any audit problems or difficulties and management’s response;

discussing the annual audited

financial statements with management and the independent auditors;

reviewing the adequacy

and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major

financial risk exposures;

reviewing and approving

all proposed related party transactions;

meeting separately and

periodically with management and the independent auditors;

monitoring compliance with

our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

with the independent auditors any audit problems or difficulties and management’s response;

the annual audited financial statements with management and the independent auditors;

the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and

control major financial risk exposures;

and approving all proposed related party transactions;

separately and periodically with management and the independent auditors;

compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to

ensure proper compliance.

Our compensation committee consists of Joseph Farnsworth, Alejandro Franco and Robert D.

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The compensation committee will be responsible for, among other things:

reviewing and

approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers;

reviewing and recommending

to the shareholders for determination with respect to the compensation of our directors;

reviewing periodically

and approving any incentive compensation or equity plans, programs or similar arrangements;

selecting compensation

consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence

from management.

and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive

and recommending to the shareholders for determination with respect to the compensation of our directors;

periodically and approving any incentive compensation or equity plans, programs or similar arrangements;

compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s

independence from management.

and Corporate Governance Committee.

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executive officers whose total compensation exceeded US $100,000 (the “named executive officers”).

and Principal Position

Other Compensation (4)

Name and Principal Position

Warrants Awards

All Other Compensation

Chairman and Chief Executive Officer

Former President (5)

Chief Financial Officer, Treasurer and Corporate Secretary

Chief Technology Officer

The amounts in this column reflect

the amounts earned during the fiscal year, whether or not actually paid during such year.

The amounts in this column reflect the aggregate probable

grant date fair value of warrants awards to our named executive officers during the fiscal year calculated in accordance with FASB

ASC Topic 718, Stock Compensation .

The amounts reported in this column do not correspond to the actual economic value that

may be received by our named executive officers from their option awards.

The amounts in this column reflect the aggregate probable

grant date fair value of option awards to our named executive officers during the fiscal year calculated in accordance with FASB

ASC Topic 718, Stock Compensation .

The amounts reported in this column do not correspond to the actual economic value that

may be received by our named executive officers from their option awards.

The amounts in this column reflect the amount of perquisites

related to a vehicle allowance.

Resigned effective December 31, 2023.

amounts in this column reflect the amounts earned during the fiscal year, whether or not actually paid during such year.

amounts in this column reflect the aggregate probable grant date fair value of warrants awards to our named executive officers during

the fiscal year calculated in accordance with FASB ASC Topic 718, Stock Compensation .

The amounts reported in this column

do not correspond to the actual economic value that may be received by our named executive officers from their option awards.

amounts in this column reflect the aggregate probable grant date fair value of option awards to our named executive officers during

the fiscal year calculated in accordance with FASB ASC Topic 718, Stock Compensation .

The amounts reported in this column

do not correspond to the actual economic value that may be received by our named executive officers from their option awards.

amounts in this column reflect the amount of perquisites related to a vehicle allowance.

Equity Awards as of December 31, 2025

following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2025.

Equity Awards at Fiscal Year Ended December 31, 2024

Equity Awards as of December 31, 2025

following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2025.

Name and Principal Position

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Option Expiration Date

Chairman and Chief Executive Officer

David Ly Chairman and Chief Executive Officer

Chief Financial Officer

Sid Sung President

Chief Technology Officer

became fully vested on the date of grant.

The options became fully

vested on December 31, 2024.

options became fully vested on the date of grant.

options became fully vested on December 31, 2023.

options became fully vested on December 31, 2024.

Compensation Plans

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Option Plan to 656,250 shares.

In 2025, the 2020 Option Plan was amended to increase the number of shares issuable under the 2020 Option

Plan to 1,156,250 shares.

of December 31, 2025 and December 31, 2024, there were 735,737 and 162,265 options outstanding, respectively, under all the option plans.

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directors receive stock-based compensation for their service on our Board of Directors and are reimbursed for their cost of attending

For the year ended December 31, 2024, Joseph Farnsworth, Alejandro Franco and Robert Gillen received 15,000 options to purchase

shares of our common stock as compensation for services during the year ended December 31, 2024.

For the year ended December 31, 2023,

Joseph Farnsworth, Alejandro Franco and Robert Gillen received 6,250 options to purchase shares of our common stock as compensation for

services during the year ended December 31, 2024.

We do not pay additional compensation to our directors for their service, either as

Chair or as a member, on the Audit Committee, Compensation Committee, or Nominations and Corporate Governance Committee.

For the year ended December 31, 2025, Joseph Farnsworth Robert Gillen and Alejandro Franco received 100,000, 100,000, and 25,000

options to purchase shares of our common stock as compensation for services during the year ended December 31, 2025, respectively.

the year ended December 31, 2024, Joseph Farnsworth, Alejandro Franco and Robert Gillen received 15,000 options to purchase shares of

our common stock as compensation for services during the year ended December 31, 2024.

We do not pay additional compensation to our directors

for their service, either as Chair or as a member, on the Audit Committee, Compensation Committee, or Nominations and Corporate Governance

Fees Earned or paid in Cash

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(1) As of December 31, 2025, Mr.

Farnsworth had outstanding options to purchase 34,457 shares of our common stock.

Farnsworth had outstanding

options to purchase 133,675 shares of our common stock.

(2) As of December 31, 2025, Mr.

Franco had outstanding options to purchase 28,912 shares of our common stock.

Franco had outstanding

options to purchase 53,130 shares of our common stock.

(3) As of December 31, 2025, Mr.

Gillen had outstanding options to purchase 29,538 shares of our common stock.

Incentive-Based

Compensation Recovery Policy

Company adopted an Incentive-Based Compensation Recovery Policy in order to comply with Nasdaq Listing Rules and Rule 10D-1 under the

Exchange Act.

In the event the Company is required to prepare an accounting restatement to correct an error in previously issued financial

statements that is material to the previously issued financial statements or that would result in a material misstatement if the error

were corrected in the current period or left uncorrected in the current period, subject to the terms of the policy, the Company must

recover reasonably promptly from its current and former executive officers the amount of any erroneously awarded incentive based compensation

received on or after October 2, 2023 and during the three years preceding the date that the Company is required to prepare such accounting

12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table and accompanying footnotes set forth as of December 31, 2024, certain information regarding the beneficial ownership

of shares of our common stock by:

Gillen had outstanding

options to purchase 128,599 shares of our common stock.

Incentive-Based Compensation Recovery Policy

The Company adopted an Incentive-Based Compensation

Recovery Policy in order to comply with Nasdaq Listing Rules and Rule 10D-1 under the Exchange Act.

In the event the Company is required

to prepare an accounting restatement to correct an error in previously issued financial statements that is material to the previously

issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left

uncorrected in the current period, subject to the terms of the policy, the Company must recover reasonably promptly from its current and

former executive officers the amount of any erroneously awarded incentive based compensation received on or after October 2, 2023 and

during the three years preceding the date that the Company is required to prepare such accounting restatement.

ITEM 12 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table and accompanying

footnotes set forth as of December 31, 2025, certain information regarding the beneficial ownership of shares of our common stock by:

(i) each person who is known by us to own beneficially more than 5% of such stock;

(ii) each member

of our Board of Directors, and each of our named executive officers and (iii) all of our directors and executive officers as a group.

Except as otherwise indicated, all Common Stock is owned directly, and the beneficial owners listed in the table below possess sole voting

and investment power with respect to the stock indicated, and the address for each beneficial owner is c/o Iveda Solutions, Inc., 1744

Val Vista Drive, Suite 213, Mesa, Arizona 85204.

(ii) each member of our Board of Directors, and each

of our named executive officers and (iii) all of our directors and executive officers as a group.

Except as otherwise indicated, all Common

Stock is owned directly, and the beneficial owners listed in the table below possess sole voting and investment power with respect to

the stock indicated, and the address for each beneficial owner is c/o Iveda Solutions, Inc., 1744 S.

Val Vista Drive, Suite 213, Mesa,

Arizona 85204.

Name of Beneficial Owner

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All Directors and Officers

Includes options

to purchase 45,784 shares of common stock, which are exercisable within 60 days of December 31, 2024.

Includes options to purchase

27,503 shares of common stock, which are exercisable within 60 days of December 31, 2024.

Includes options to purchase

7,817 shares of common stock, which are exercisable within 60 days of December 31, 2024.

Consists of (a) options

to purchase 34,457 shares of common stock, which are exercisable within 60 days of December 31, 2024, (b) 2,491 shares of common

stock held by Farnsworth Realty, an entity owned by Mr.

Includes options to purchase 216,096 shares of common stock, which are exercisable within 60 days of December 31, 2025.

Includes options to purchase 152,503 shares of common stock, which are exercisable within 60 days of December 31, 2025.

Includes options to purchase 7,504 shares of common stock, which are exercisable within 60 days of December 31, 2025.

Consists of (a) options to purchase 133,675 shares of common stock, which are exercisable within 60 days of December 31, 2025, (b) 2,491 shares of common stock held by Farnsworth Realty, an entity owned by Mr.

Farnsworth and (c) 10,878 shares of common stock.

Consists of (a) options

to purchase 28,912 shares of common stock, which are exercisable within 60 days of December 31, 2024, and (b) 3,907 shares of common

stock held by Amextel S.A.

Consists of (a) options to purchase 53,130 shares of common stock, which are exercisable within 60 days of December 31, 2025, and (b) 3,907 shares of common stock held by Amextel S.A.

an entity owned by Mr.

Consists (a) options to

purchase 29,538 shares of common stock, which are exercisable within 60 days of December 31, 2024, and (b) 20,331 shares of common

Consists (a) options to purchase 128,599 shares of common stock, which are exercisable within 60 days of December 31, 2025.

Authorized for Issuance Under Equity Compensation Plans

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Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Weighted-average

exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans

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Equity compensation plans not approved by stockholders (3)

our 2010 and 2012 Option Plan.

Consists of our 2010 and

2012 Option Plan.

Consists of our 2020 Option

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Paid to Independent Registered Public Accounting Firm

February 2025, with the approval of the Audit Committee of the Board of Directors, we appointed Weinberg &Co (“Weinberg”)

as our principal accounting firm.

Weinberg has served as the principal audit firm for Iveda 2024 and 2023 Financial Statements since

February 2025.

No fees were paid to or accrued in 2024 related to Weinberg’s services.

paid or accrued $283,000 and $137,500 for audit fees, during the year ended December 31, 2024 and 2023, respectively.

During 2024 we paid $93,500

to BF Borgers for the audit of 2023.

February 2025, with the approval of the Audit Committee of the Board of Directors, we appointed Weinberg &Co

(“Weinberg”) as our principal accounting firm.

Weinberg has served as the principal audit firm for Iveda 2025, 2024 and

2023 Financial Statements since February 2025.

$349,000 were paid to or accrued in 2025 related to Weinberg’s

paid or accrued $283,000 for audit fees during the year ended December 31, 2024.

we paid $93,500 to BF Borgers for the audit of 2023.

BF Borgers was sanctioned by the SEC in May 2024.

No other fees were paid to Borgers for the respective periods.

No other fees were paid to Borgers

for the respective periods.

May 10, 2024 we engaged Kreit and Chiu CPA LLP (“KC”) to do the quarterly 10-Q reviews for 2024 and a re-audit of 2023 and

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15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements and Financial

Statement Schedules

Financial Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K.

Financial Statements and Financial Statement Schedules

Consolidated Financial

Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K.

Other schedules are omitted

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Form of Warrant(Incorporated by reference to the Form S-1 filed on 12/30/2021)

Form of Pre-Funded Warrant (Incorporated by reference to the Form 8-K filed on 02/09/2026)

Form of Series X Warrant (Incorporated by reference to the Form 8-K filed on 02/09/2026)

Form of Placement Agent Warrant (Incorporated by reference to the Form 8-K filed on 02/09/2026)

Application Development Service Agreement dated July 14, 2006 by and between Axis Communications AB and IntelaSight, Inc.

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Cooperation Agreement with Industrial Technology Research Institute dated November 2012 (Incorporated by reference to the Form S-1 filed on 12/30/2021)

Engagement Agreement, by and between Iveda Solutions, Inc.

Wainright & Co., LLC, dated as of August 28, 2024 ((Incorporated by reference to the Form 8-K filed on 02/09/2026)

Form of Securities Purchase Agreement, by and between Iveda Solutions, Inc.

and certain investors, dated February 9, 2026 (Incorporated by reference to the Form 8-K filed on 02/09/2026)

Code of Conduct and Ethics (Incorporated by reference to the Form 10-K filed on 4/15/2010)

Code of Ethics for Chief Executive Officer and Senior Financial Officers (Incorporated by reference to the Form 10-K filed on 4/15/2010)

Iveda Solutions, Inc.

Insider Trading Policy

Subsidiaries of the Registrant (Incorporated by reference to Form 10-K filed on 3/30/2012)

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Compensation Recovery Policy of Iveda Solutions, Inc.

(Incorporated by reference to the Form 10-K filed on 4/01/2024)

Inline XBRL Instance Document

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Filed herewith.

Furnished herewith.

Pursuant to Rule 406T of

Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes

of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities

Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

April 15, 2025

March 31, 2026

IVEDA SOLUTIONS, INC.

Chief Executive Officer and Chairman

April 15, 2025

March 31, 2026

IVEDA SOLUTIONS, INC.

/s/ Robert J.

Chief Financial Officer, Treasurer and Secretary

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:

BALANCE SHEETS AS OF DECEMBER 31, 2024 AND 2023 (as

STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 ( as

STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (as

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (as

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Iveda Solutions, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of Iveda Solutions, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations,

stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated

financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years

then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the

Company experienced net losses and negative operating cash flows during the years ended December 31, 2024 and 2023.

These conditions raise

substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 1 to the financial statements.

The financial statements do not include any adjustments that might result from

the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

Solutions, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Iveda Solutions, Inc.

(the “Company”) as of December 31, 2025

and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then ended, and

the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated

financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31,

2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles

generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provided a reasonable

basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a

matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit

committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging,

subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated

financial statements taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions

on the critical audit matter or on the accounts or disclosures to which they relate.

Costs of Goods

As described further in Note 1 to the consolidated

financial statements, the Company’s accounting policy is to classify inventory that has been purchased and delivered to customer

locations in Taiwan as a deferred cost until the Company has completed its performance obligations.

These deferred costs totaled $507,308

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

that our audits provided a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial

statements and (2) involved especially challenging, subjective, or complex judgments.

The communication of critical audit matters does

not alter in any way our opinion on the consolidated financial statements taken as a whole, and we are not, by communicating the critical

audit matters below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Evaluation of the Company’s Liquidity

As discussed in Note 1 to the financial statements, the Company recorded

a net loss of $3.2 million and used cash in operations of $2 million during the year ended December 31, 2025.

As of December 31, 2025

We identified the existence and realization of these assets as a critical audit matter because of the materiality

of the deferred costs, and that a high degree of auditor judgment was required to evaluate various factors used in the Company’s

evaluation of the existence and realization of these assets.

Our audit procedures related to the existence and

realization of this asset included the following:

● We obtained an understanding of Managements policy and process for assessing the existence and realization

of these assets.

● We obtained detail schedules of these deferred costs at December 31, 2024, and examined the underlying

documentation relating to the purchase of these assets.

● Verified through our testing that the inventories were delivered to the customer site.

● Verified realization of these assets through examination of subsequent collections, completion of performance

obligation and corresponding recognition of revenue.

The December 31, 2023 consolidated financial statements,

which were audited by another auditor, have been restated (See Note 11).

We have served as the Company’s auditor since

/s/ Weinberg & Company, P.A.

the Company had existing cash of $5.2 million and raised an additional $2 million through subsequent sales of its equity.

Management believes

that the Company’s ongoing business, existing cash, and credit facilities are sufficient to fund operations for twelve months from

the date of issuance of these financial statements.

We identified the evaluation of Management’s assessment of the

Company’s ability fund its operations over the next twelve months as a critical audit matter due to the high degree of subjective

auditor judgment required to evaluate the Company’s forecasted cash flows used in its liquidity analysis due to uncertainty in certain

assumptions, specifically forecasted sales, gross profit margins, and feasibility of the Company’s expense management activities.

The primary procedures we performed to address this critical audit

matter included:

● We obtained management’s cash flow forecast and evaluated the reasonableness

of the cash flow forecast by comparing it to historical operating results, considering management’s ability to accurately forecast

and perform sensitivity analysis on revenue, cash expenditures, and commitments.

● We performed sensitivity analyses on the forecasted revenue and operating

margins used in the Company’s cash flow forecast to evaluate the impact on the conclusions reached by management.

● We considered the Company’s historical ability to raise financing and

re-finance its debt, if necessary.

● We assessed the appropriateness and sufficiency of the Company’s liquidity

disclosures and compared to other audit evidence obtained to determine whether such information is consistent with the Company’s

have served as the Company’s auditor since 2025.

Weinberg & Company, P.A.

Los Angeles, California

April 15, 2025

& Company, P.A.

Angeles, California

March 31, 2026

SOLUTIONS, INC.

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December 31, 2025

December 31, 2023 (Restated)

December 31, 2024

CURRENT ASSETS

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PROPERTY AND EQUIPMENT, NET

Right of Use Asset, Net

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Current Portion of Long-Term Debt

Current Portion Lease Liability

Total Current Liabilities

Long- Term Debt

Long term Lease Liability, Net of Current Portion

STOCKHOLDERS’ EQUITY

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ENDED DECEMBER 31, 2025 AND 2024

2023 (Restated)

Equipment Sales

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Miscellaneous Income (Expense)

Loss from investment in Iveda Phils JV

Interest Income

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accompanying Notes to Consolidated Financial Statements.

IVEDA SOLUTIONS, INC.

COMPREHENSIVE

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Comprehensive

Stockholders’

BALANCE AT December 31, 2022, as originally reported

Prior Period Adjustments

BALANCE AT December 31, 2022, as restated

Exercise of warrants issued August 2022

Warrants issued for services

Additional Paid-in-

Accumulated Other Comprehensive

Total Stockholders’

BALANCE AT December 31, 2023

$ ( 49,195,897 )

$ ( 221,418 )

Common Stock for Services

Stock Option Compensation

Common Stock Issued in ATM during 2025

Common Stock Issued in ATM during 2025, shares

Common Stock Issued in September Direct Offering (including Pre-Funded Warrants sold and exercised

Reverse Split fractional shares

( 3,980,820 )

Comprehensive Loss

AT December 31, 2023, as restated

BALANCE AT December 31, 2024

$ ( 53,176,717 )

$ ( 280,209 )

$ ( 53,176,717 )

$ ( 280,209 )

Common Stock for Services

Stock Option Compensation

Stock Issued in September Direct Offering (including Pre-Funded Warrants sold and exercised

Reverse Split fractional shares

Common Stock Issued in ATM during 2025

( 3,198,112 )

Comprehensive Loss

BALANCE AT December 31,

amounts and per share amounts reflect a reverse stock split of the outstanding shares of our Common Stock at a ratio of 1-for-8 effected

on September 17, 2024.

All share amounts and

per share amounts reflect a reverse stock split of the outstanding shares of our Common Stock at a ratio of 1-for-8 effected on September

accompanying Notes to Consolidated Financial Statements

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31, 2025 AND 2024

2023 (restated)

CASH FLOWS FROM OPERATING ACTIVITIES

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Stock Option Compensation

Common Stock Warrants Issued for Services

Common Stock issued for Services

Loss from Iveda Phils Joint Venture

(Increase) Decrease in Operating Assets

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Deferred Cost of Goods

Right of Use Asset

Other Current Assets

Increase (Decrease) in Accounts and Other Payables

Lease Liability

Net Cash Used in Operating Activities

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Purchase of Property and Equipment

Investment in Iveda Phils Joint Venture

Net Cash Used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from (Payments on) Short-Term Notes Payable/Debt

Payments on Short-Term Notes Payable/Debt

Proceeds from Short-Term Notes Payable/Debt

Proceeds from (Payments to) Long-Term Debt

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( 2,209,982 )

( 2,573,340 )

Cash and Cash Equivalents- Beginning of Period

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THE YEARS ENDING DECEMBER 31, 2025 AND 2024

2023 (restated)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

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Income Tax Paid

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Present Value of Right of Use Asset and Lease Obligations on New Lease

accompanying Notes to Consolidated Financial Statements.

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TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2024 AND 2023

OF DECEMBER 31, 2025 AND 2024

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Iveda Solutions, Inc.

Solutions, Inc.

(“Iveda”, or the “Company”) was incorporated in Nevada as Charmed Homes, Inc.

in June 2006.

On October 15, 2009, IntelaSight, d/b/a Iveda, a Washington corporation, became a wholly owned subsidiary of the Company.

October 15, 2009, IntelaSight, d/b/a Iveda, a Washington corporation, became a wholly owned subsidiary of the Company.

In December 2010,

IntelaSight merged with and into the Company and the Company became the surviving company.

Iveda offered the first cloud hosting

of streaming and recorded video from security cameras for its customers and real-time remote surveillance service utilizing intervention

specialists to watch our customers’ cameras in real time, 24/7.

Iveda offers smart city technologies globally, offering advanced

AI-driven video surveillance solutions and a robust suite of Internet of Things (IoT) platforms that power digital transformation for

cities and commercial clients worldwide.

Iveda offered the first cloud hosting of streaming

and recorded video from security cameras for its customers and real-time remote surveillance service utilizing intervention specialists

to watch our customers’ cameras in real time, 24/7.

Iveda offers smart city technologies globally, offering advanced AI-driven

video surveillance solutions and a robust suite of Internet of Things (IoT) platforms that power digital transformation for cities and

commercial clients worldwide.

Consolidation

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been eliminated in consolidation.

accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the

United States of America, which contemplates the continuation of the Company as a going concern.

The Company experienced net losses and

negative operating cash flows during the years ended December 31, 2024 and 2023.

These factors raise substantial doubt about the Company’s

ability to continue as a going concern.

December 31, 2024, the Company had cash on hand in the amount of $ 2,658,300 .

Management does not expect that its current liquidity

will support operations from a date of twelve months from the issuance of this financial statement.

As a result, management has concluded

that there is substantial doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial

statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification

of liabilities that might be necessary in the event the company cannot continue as a going concern.

continuation of the Company as a going concern is dependent upon its ability to obtain necessary debt or equity financing to continue

operations until it begins generating positive cash flow.

No assurance can be given that any future financing will be available or, if

available, that it will be on terms that are satisfactory to the Company.

Even if the Company is able to obtain additional financing,

it may contain undue restrictions on our operations in the case of debt financing, or cause substantial dilution for our stockholders,

in case of equity financing.

The Company recorded a net loss of $ 3.2

million and used cash in operations of $ 2

million during the year ended December 31, 2025.

During 2025, and subsequently, the Company took significant steps to raise capital to

fund operations, and to reduce its historical operating losses.

In accordance with Accounting Standards Codification (“ASC”)

205-40, Going Concern, the Company’s management has evaluated whether there are conditions and events, considered in the aggregate,

that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the accompanying

financial statements were issued.

As of the issuance date of these financial statements, management expects that the Company’s

cash of $ 5.2 million at December 31, 2025 and additional $ 2

million raised through subsequent sales of its equity, will be sufficient to fund the Company’s current operating plan for at least

twelve months from the date of issuance of these financial statements.

The financial statements do not include any adjustments that might

be necessary if the Company is unable to continue as a going concern.

Management’s assessment whether there is

sufficient cash on hand, together with expected capital raises, to assure operations for a period of at least twelve months from the

date these financial statements are issued, is based on conditions that are known and reasonably knowable to management, considering

various scenarios, projections, and estimates and certain key assumptions.

These assumptions include, among other factors, management’s

ability to increase operating efficiencies, raise additional capital, and the expected timing and nature of the Company’s forecasted

cash expenditures.

Historically, the Company has financed its operations

through public and private sales of common stock, credit lines from financial institutions, and cash generated from operations.

seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at

Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market

and economic conditions, our performance and investor sentiment with respect to us and our industry.

of Accounting

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accepted in the United States of America.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

actual results could differ from those estimates.

On an ongoing basis, we evaluate our estimates, including those related to

accounts receivable, deferred cost of revenue, share-based compensation, deferred income taxes, provisions for losses, and inventory

reserve, among other items.

On an ongoing basis, we evaluate our estimates, including those related to accounts

receivable, deferred cost of revenue, share-based compensation, deferred income taxes, provisions for losses, and inventory reserve,

among other items.

and Expense Recognition

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revenue when a performance obligation is satisfied.

Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with

the customer.

In situations where sales are to a distributor, the Company had concluded its contracts are with the distributor as

the Company holds a contract bearing enforceable rights and obligations only with the distributor.

As part of its consideration for

the contract, the Company evaluates certain factors including the customers’ ability to pay (or credit risk).

contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance

In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to

determine the net consideration to which it expects to be entitled.

As the Company’s standard payment terms are less than one

year, it has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing

The Company allocates the transaction price to each distinct product based on its relative standalone selling price.

product price as specified on the purchase order is considered the standalone selling price as it is an observable input which

depicts the price as if sold to a similar customer in similar circumstances.

Revenue is recognized when control of the product is

transferred to the customer ( i.e.

, when the Company’s performance obligations is satisfied), which typically occurs at

shipment unless installation is required as with certain of our Taiwan sales – see below.

Further in determining whether control has been transferred, the Company considers if there is a present right to payment

and legal title, along with risks and rewards of ownership having transferred to the customer.

Customers do not have a right to

return the product other than for warranty reasons for which they would only receive repair services or replacement product.

Company has also elected the practical expedient under ASC 340-40-25-4 to expense commissions for product sales when incurred as the

amortization period of the commission asset the Company would have otherwise recognized is less than one year.

Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with the

In situations where sales are to a distributor, the Company had concluded its contracts are with the distributor as the Company

holds a contract bearing enforceable rights and obligations only with the distributor.

As part of its consideration for the contract,

the Company evaluates certain factors including the customers’ ability to pay (or credit risk).

For each contract, the Company

considers the promise to transfer products, each of which is distinct, to be the identified performance obligations.

In determining the

transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which

it expects to be entitled.

As the Company’s standard payment terms are less than one year, it has elected the practical expedient

under ASC 606-10-32-18 to not assess whether a contract has a significant financing component.

The Company allocates the transaction

price to each distinct product based on its relative standalone selling price.

The product price as specified on the purchase order is

considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar

circumstances.

Revenue is recognized when control of the product is transferred to the customer ( i.e.

, when the Company’s

performance obligations is satisfied), which typically occurs at shipment unless installation is required as with certain of our Taiwan

sales – see below.

Further in determining whether control has been transferred, the Company considers if there is a present right

to payment and legal title, along with risks and rewards of ownership having transferred to the customer.

Customers do not have a right

to return the product other than for warranty reasons for which they would only receive repair services or replacement product.

has also elected the practical expedient under ASC 340-40-25-4 to expense commissions for product sales when incurred as the amortization

period of the commission asset the Company would have otherwise recognized is less than one year.

Company sells its products and services primarily to municipalities and commercial customers in the following manner:

majority of Iveda Taiwan sales are project sales to Taiwan customers and are made direct to the end customer (typically a municipality

or a commercial customer) through its sales force, which is composed of its employees.

Revenue is recorded when the equipment is

shipped to the end customer unless the contract requires the inventory to be installed before it can be billed and charged for service

when installation or maintenance work is performed.

If inventory is shipped to the customer before it is installed the inventory

is reclassified to Deferred Cost of Goods.

The majority of Iveda Taiwan

sales are project sales to Taiwan customers and are made direct to the end customer (typically a municipality or a commercial customer)

through its sales force, which is composed of its employees.

Revenue is recorded when the equipment is shipped to the end customer

unless the contract requires the inventory to be installed before it can be billed and charged for service when installation or maintenance

work is performed.

If inventory is shipped to the customer before it is installed the inventory is reclassified to Deferred Cost

for product and software sales without installation is recorded when the product and/or software has been shipped to the customer.

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Profit incentives are included in revenue when their realization is deemed earned by the contract.

US hardware sales are to domestic and international customers and are made through independent distributors or integrators who purchase

products from the Company at a wholesale price and sell to the end user (typically municipalities or a commercial customer) at a

retail price.

The distributor retains the margin as its compensation for its role in the transaction.

The distributor or integrator

generally maintains product inventory or product is drop shipped from the manufacturer, customer receivables and all related risks

and rewards of ownership.

Accordingly, upon application of steps one through five above, revenue is recorded when the product is

shipped to the distributor or as directed by the distributor consistent with the terms of the distribution agreement.

US also sells software that include licensing fees that are paid either monthly or yearly.

The revenues are recorded monthly, if the

license is paid yearly the revenue will be recorded as deferred revenue and amortized on a straight-line basis over the respective time

US also sells hardware and software warranty and maintenance for an annual fee that are paid yearly.

The revenues are recorded annually,

if the revenue is a material amount it will be recorded as deferred revenue and amortized on a straight-line basis over the respective

The following table presents our net sales by revenue

source and the period over period percentage change, for the period presented:

of Disaggregation of Revenue

Ended December 31,

US hardware sales are to domestic and international independent distributors or integrators who purchase products from the Company

at a wholesale price and sell to the end user (typically municipalities or a commercial customer) at a retail price.

will maintain product inventory and ship to the distributor or integrator or product is drop shipped from the manufacturer at the

request of the Company to the distributor or integrator, and the Company at all times maintains the obligation to pay vendors and

all related risks and rewards of ownership of customer receivables.

Accordingly, upon application of steps one through five above, revenue is recorded when

the product is shipped to the distributor or as directed by the distributor consistent with the terms of the distribution

US also sells a one time software license to customers that allows them to activate software embedded in the purchased hardware.

The software revenues are recorded

as the license is delivered.

Iveda US also sells hardware

and software warranty and maintenance for an annual fee that are paid yearly.

The revenues are recorded annually, if the revenue

is a material amount it will be recorded as deferred revenue and amortized on a straight-line basis over the respective time period.

following table presents our net sales by revenue source and the period over period percentage change, for the period presented:

SCHEDULE OF DISAGGREGATION OF REVENUE

Years Ended December 31,

Net Sales Source

Commercial Enterprises

Municipalities

Taiwan Government

Net Sales Source

The Company sells and installs video

surveillance systems comprised of various components of hardware and software.

Company sells and installs video surveillance systems comprised of various components of hardware and software.

Comprehensive

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

from five customers out of approximately 70 total customers represented approximately 67 % of total revenue for the year ended December

These specific customers were 1) Chunghwa Telecom with 18 % 2) SECURITY INTEGRATION & CONSULTANT TECHNOLOGY CO., LTD.

16 %, 3) Chicony Power Technology Co Ltd with 11 % and 4) HWACOM SYSTEMS INC.

with 10 %, (all Taiwan companies) and Claro Enterprise Solutions

(a US company) with 12 %.

Revenue from two customers out of 65 total customers represented approximately 48 % of total revenue for the

from four customers out of approximately 70 total customers represented approximately 63 % of total revenue for the year ended December

These specific customers were 1) NATIONAL CHUNG SHAN INSTITUTE OF SCIENCE AND TECHNOLOGY with 25 % 2) Taiwan Stock Exchange

Corporation with 15 %, 3) Chunghwa Telecom with 12 % and 4) SECURITY INTEGRATION & CONSULTANT TECHNOLOGY CO., LTD.

with 12 % (all Taiwan

Revenue from five customers out of approximately 70 total customers represented approximately 67 % of total revenue for the

year ended December 31, 2024.

These specific customers were 1) YOU MING HUEI CO.

LTD with 25 %, 2) Chicony Power Technology Co Ltd with

23 %, (both Taiwan companies).

Total number of customers were 70 and 65, for the years ended December 31, 2024 and 2023, respectively.

of the total accounts receivable at December 31, 2024 was from one customer out of a total of 42 customer accounts receivable accounts.

This specific customer was Chunghwa Telecom.

Our accounts receivables are unsecured, and we are at risk to the extent such amounts become

uncollectible.

Although we perform periodic evaluations of our customers’ credit and financial condition, we do not require collateral

in exchange for our products and services provided on credit.

These customers are longtime customers, and we don’t expect any problem

with the collectability of these accounts receivable.

These specific customers were 1) Chunghwa Telecom with 18 % 2) SECURITY INTEGRATION & CONSULTANT TECHNOLOGY

with 16 %, 3) Chicony Power Technology Co Ltd with 11 % and 4) HWACOM SYSTEMS INC.

with 10 %, (all Taiwan companies) and Claro

Enterprise Solutions (a US company) with 12 %.

of the total accounts receivable at December 31, 2025 was from four customers out of a total of 42 customer accounts receivable accounts.

These specific customers were 1) Taiwan Stock Exchange Corporation with 29 % 2) MiTAC Advance Technology Corp.

with 24 % 3) Chunghwa Telecom

with 10 % (all Taiwan companies) and Claro Enterprise Solutions (a US company) with 15 %.

Our accounts receivables are unsecured, and we

are at risk to the extent such amounts become uncollectible.

Although we perform periodic evaluations of our customers’ credit

and financial condition, we do not require collateral in exchange for our products and services provided on credit.

These customers are

longtime customers, and we don’t expect any problem with the collectability of these accounts receivable.

other customers represented greater than 10% of total revenues in years ended December 31, 2025 and 2024.

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months or less to be cash equivalents.

Company’s consolidated financial statements include the results of operations and financial position of its subsidiary located in Taiwan.

Company’s consolidated financial statements include the results of operations and financial position of its subsidiary located

The subsidiary’s functional currency is the Taiwan New Dollar (TWD).

For consolidation purposes, the subsidiary’s financial statements

are translated into US Dollars (USD) using the following methods:

Assets and liabilities are translated using the exchange rate

at the balance sheet date.

For consolidation purposes, the subsidiary’s

financial statements are translated into US Dollars (USD) using the following methods:

Assets and liabilities are translated using the

exchange rate at the balance sheet date.

Income statement items are translated using the average exchange rate for the period.

Exchange rate

fluctuations between TWD and USD result in gains or losses that are included in Other Comprehensive Income (Loss) until they are realized.

The Company had $ 1,025,675 and $ 1,959,399 of its cash and cash equivalents in Taiwan New Dollars at December 31, 2024 and 2023, respectively.

rate fluctuations between TWD and USD result in gains or losses that are included in Other Comprehensive Income (Loss) until they are

The Company had $ 1,352,166 and $ 1,025,675 of its cash and cash equivalents in Taiwan New Dollars at December 31, 2025 and 2024,

respectively.

provide an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information,

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For our U.S.-based segment, receivables past due more than 120 days, if any, are considered delinquent.

our Taiwan-based segment, receivables over one year are considered delinquent.

For our Taiwan-based segment, receivables over one year are considered delinquent.

Delinquent receivables are written off based on individual

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We reclassify

inventory that we have purchased and delivered to the customer location to Deferred Cost of Goods until this product is installed

and can be invoiced to the customer.

Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”)

inventory that we have purchased and delivered to the customer location to Deferred Cost of Goods until this product is installed and

can be invoiced to the customer.

is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis.

review our inventories for excess or obsolete products or components based on an analysis of historical usage and an evaluation of estimated

future demand, market conditions, and alternative uses for possible excess or obsolete parts.

There was no allowance for slow-moving and obsolete

inventory necessary as of December 31, 2024 and 2023, respectively.

There was no allowance for slow-moving

and obsolete inventory necessary as of December 31, 2025 and 2024, respectively.

and Equipment

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Management determined that there was no indicator of impairment as of December 31, 2025 and 2024.

Method Investment

Company accounts for investments in entities in which the Company has significant influence over the entity’s financial and operating

policies, but does not control, using the equity method of accounting.

The equity method investments are initially recorded at cost,

and subsequently increased for capital contributions and allocations of net income, and decreased for capital distributions and allocations

Equity in net income (loss) from the equity method investment is allocated based on the Company’s economic interest.

Equity method investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may

not be recoverable.

If it is determined that a loss in value of the equity method investment is other than temporary, an impairment loss

is measured based on the excess of the carrying amount of an investment over its estimated fair value.

Impairment analyses are based

on current plans, intended holding periods, and available information at the time the analysis is prepared.

During 2023 the Company made a $ 180,000 investment for a 40 % interest in

Iveda Phils Joint Venture (located in the Philippines).

Based on Management’s

assessment, the value of its equity method investment was impaired as of December 31, 2023, and as such, recorded an impairment charge

of $ 180,000 .

As of December 31, 2023 and 2024, the remaining value of its investments was $ 0 .

income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between

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Taiwan tax returns are subject to review and examination by the Taiwan Ministry of Finance.

Our Taiwan tax return for the years 2020

Our Taiwan tax returns for the years 2021

to 2024 are open to examination by the Taiwan Ministry of Finance.

cash represents time deposits on account to secure short-term bank loans in our Taiwan-based segment.

payments received from customers on future installation projects are recorded as deferred revenue until such time our performance obligations on the contracts are completed.

The Company periodically issues stock, stock options and restricted stock awards to employees and non-employees in

non-capital raising transactions for services and for financing costs.

The Company accounts for such grants issued and vesting based on

ASC 718, Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized for employees

as compensation expense on the straight-line basis over the vesting period.

Recognition of compensation expense for non-employees is in

the same period and manner as if the Company had paid cash for the services.

The fair value of the Company’s stock options is estimated

using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility,

expected life of the stock options or restricted stock, and future dividends.

Compensation expense is recorded based upon the value derived

from the Black-Scholes-Merton Option Pricing model and based on actual experience.

The assumptions used in the Black-Scholes-Merton Option

Pricing model could materially affect compensation expense recorded in future periods.

We recognized $ 122,600 and $ 104,600 of

stock-based compensation expense for the years ended December 31, 2024 and 2023, respectively.

payments received from customers on future installation projects are recorded as deferred revenue until such time our performance obligations

on the contracts are completed.

Company periodically issues stock, stock options and restricted stock awards to employees and non-employees in non-capital raising transactions

for services and for financing costs.

The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation

whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line

basis over the vesting period.

Recognition of compensation expense for non-employees is in the same period and manner as if the Company

had paid cash for the services.

The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option

Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options

or restricted stock, and future dividends.

Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton

Option Pricing model and based on actual experience.

The assumptions used in the Black-Scholes-Merton Option Pricing model could materially

affect compensation expense recorded in future periods.

We recognized $ 376,000 and $ 122,600 of stock-based compensation expense for the

years ended December 31, 2025 and 2024, respectively, related to the amortization of stock options.

Value of Financial Instruments

The Company uses various inputs in determining the

fair value of its financial assets and liabilities and measures these assets on a recurring basis.

Financial assets recorded at fair value

are categorized by the level of subjectivity associated with the inputs used to measure their fair value.

Accounting Standards Codification

Section 820 defines the following levels of subjectivity associated with the inputs:

Level 1—Quoted prices in active markets for

identical assets or liabilities.

Level 2—Inputs, other than the quoted prices

in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs in which there is

little or no market data for the asset or liability which requires the Company to develop its own assumptions.

Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring

Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure

their fair value.

Accounting Standards Codification Section 820 defines the following levels of subjectivity associated with the inputs:

1—Quoted prices in active markets for identical assets or liabilities.

2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

3—Unobservable inputs in which there is little or no market data for the asset or liability which requires the Company to develop

its own assumptions.

value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of December 31,

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Accounting Standards

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure , which

is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense

categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s

profit or loss.

The update also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided

in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting ,

including the significant segment expense disclosures.

This standard became effective for the Company on January 1, 2024.

of 2023-7 did not have a material impact on the Company’s results of operations, financial position or cash flows.

November 2024, FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

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2 Accounts and Other Payables

ACCOUNTS AND OTHER PAYABLES

OF ACCOUNTS AND OTHER PAYABLES

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short-term debt balances were as follows:

OF SHORT-TERM DEBT

SCHEDULE OF SHORT-TERM DEBT

December 31, 2025

December 31, 2024

Loan from Shanghai Commercial Bank at 3.1 %- 3.2 %

interest rate per annum.

originally in January 2025 and subsequently replaced with a new loan which matures January 2026.

Loan from HuaNam Bank at 3.4 %

interest rate per annum.

in June 2025.

Loan from ChangHwa Bank at 3 %

interest rate per annum.

Loan from Shanghai Commercial Bank at 3.1 %- 3.2 % interest rate per annum.

Due originally in January 2025 and subsequently replaced with a new loan which was repaid in 2025.

Loan from HuaNam Bank at 3.4 % interest rate per annum.

Due in July 2026.

Loan from ChangHwa Bank at 3 % - 3.3 % interest rate per annum.

Paid May 2025.

Balance at end of period

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Long-term debt balances were as follows:

OF LONG-TERM DEBT

Loans from Shanghai Commercial Bank with interest rates 2.1 %

per annum due January

SCHEDULE OF LONG-TERM DEBT

Loans from Shanghai Commercial Bank with interest rates 2.1 % per annum due January 2029 (1)

Current Portion of Long-term debt

Balance at end of period

SCHEDULE OF MINIMUM PAYMENT OF LONG TERM DEBT

January 24, 2024, the Company received a facility notice from Shanghai Commercial Bank, granting

a revolving loan facility totaling up to TWD 10,000,000

(approximately $ 300,000 USD) and term loan facility amounting

of TWD 20,000,000

(approximately ($ 600,000 USD) .

The term for the

revolving loan is 1

year and for the term loan is 5

year term loan requires monthly payments including interest

and principle, and the revolving loan requires a full principal repayment at the maturity

The short-term Shanghai Commercial Bank loan is 75 %

securitized by the government guarantee fund called SME credit guarantee fund and 10 %

by saving deposit security.

SCHEDULE OF MATURITY OF LONG TERM DEBT

On January 24, 2024, the

Company received a facility notice from Shanghai Commercial Bank, granting a revolving loan facility totaling up to TWD 10,000,000

(approximately $ 300,000 USD) and term loan facility amounting of TWD 20,000,000 (approximately ($ 600,000 USD).

The term for the revolving

loan is 1 year and for the term loan is 5 years.

The 5 year term loan requires monthly payments including interest and principal,

and the revolving loan requires a full principal repayment at the maturity date.

The guarantors of this loan are Mr.

Cheung, who are

both part of Iveda Taiwan’s management team.

Cheung, who are both part of Iveda Taiwan’s management team.

4 PREFERRED STOCK

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delaying, or preventing a change in control of our company.

are authorized to issue up to 300,000,000

shares of common stock, par value $ 0.00001

are authorized to issue up to 300,000,000 shares of common stock, par value $ 0.00001 per share.

We effectuated a reverse stock split

on September 17, 2024 of 1 for 8 shares of common stock.

All share values within

this report have been retroactively adjusted to the post reverse split values.

All outstanding shares of our common stock are of the

same class and have equal rights and attributes.

The holders of our common stock are entitled to one vote per share on all matters submitted

to a vote of the stockholders of our company.

All share values within this report have been retroactively adjusted to the

post reverse split values.

All outstanding shares of our common stock are of the same class and have equal rights and attributes.

holders of our common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders of our company.

Our common stock does not have cumulative voting rights.

Persons who hold a majority of

the outstanding shares of our common stock entitled to vote on the election of directors can elect all of the directors who are eligible

for election.

Holders of our common stock are entitled to share equally in dividends, if any, as may be declared from time to time by

our Board of Directors.

In the event of liquidation, dissolution, or winding up of our company, subject to the preferential liquidation

rights of any series of preferred stock that we may from time to time designate, the holders of our common stock are entitled to share

ratably in all of our assets remaining after payment of all liabilities and preferential liquidation rights.

Holders of our common stock

have no conversion, exchange, sinking fund, redemption, or appraisal rights (other than such as may be determined by the Board of Directors

in its sole discretion) and have no preemptive rights to subscribe for any of our securities.

During September 2024 we

sold to a certain institutional investor pursuant to a prospectus supplement and prospectus (i) 225,000 shares of common stock, par value

$ 0.00001 per share (the “Common Stock”), at an offering price of $ 3.44 per share, and (ii) pre-funded warrants to purchase

up to 400,000 shares of Common Stock, at an offering price of $ 3.43 per pre-funded warrant, to the investor whose purchase of Common

Stock in this offering would otherwise result in the investor, together with its affiliates and certain related parties, beneficially

Persons who hold a majority of the outstanding shares of our common stock entitled

to vote on the election of directors can elect all of the directors who are eligible for election.

Holders of our common stock are entitled

to share equally in dividends, if any, as may be declared from time to time by our Board of Directors.

In the event of liquidation, dissolution,

or winding up of our company, subject to the preferential liquidation rights of any series of preferred stock that we may from time to

time designate, the holders of our common stock are entitled to share ratably in all of our assets remaining after payment of all liabilities

and preferential liquidation rights.

Holders of our common stock have no conversion, exchange, sinking fund, redemption, or appraisal

rights (other than such as may be determined by the Board of Directors in its sole discretion) and have no preemptive rights to subscribe

for any of our securities.

September 2024 we sold to a certain institutional investor pursuant to a prospectus supplement and prospectus (i) 225,000 shares of common

stock, par value $ 0.00001 per share (the “Common Stock”), at an offering price of $ 3.44 per share, and (ii) pre-funded warrants

to purchase up to 400,000 shares of Common Stock, at an offering price of $ 3.43 per pre-funded warrant, to the investor whose purchase

of Common Stock in this offering would otherwise result in the investor, together with its affiliates and certain related parties, beneficially

own more than 4.99% (or at the election of the investor, 9.99%) of our outstanding common stock immediately following the consummation

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All 400,000 pre-funded warrants were exercised during October and November 2024.

The Company issued an aggregate of 625,000 shares of common stock resulting in net proceeds of $ 1,683,970 as a

result of the direct offering.

a concurrent private placement, we issued to such institutional investor unregistered Series A warrants to purchase up to 625,000

shares of Common Stock and unregistered Series

B warrants to purchase up to 625,000

shares of Common Stock, which warrants will be

exercisable on the effective date of stockholder approval of the issuance of the shares upon exercise of the unregistered warrants (the

“Stockholder Approval”), at an exercise price of $ 3.44

The Series A warrants will expire

years following the Stockholder Approval and the

Series B warrants will expire 18

months following the Stockholder Approval.

unregistered warrants and the unregistered common stock issuable upon the exercise of the warrants were offered pursuant to the exemptions

provided in Section 4(a)(2) under the Securities Act of 1933, as amended, or the Securities Act, and/or Regulation D promulgated thereunder.

The Company adjourned its annual meeting until June 2, 2025 to continue to solicit votes for the approval of the unregistered Series

A and Series B warrants.

issued an aggregate of 625,000 shares of common stock resulting in net proceeds of $ 1,683,970 as a result of the direct offering.

a concurrent private placement, we issued to such institutional investor unregistered Series A warrants to purchase up to 625,000 shares

of Common Stock and unregistered Series B warrants to purchase up to 625,000 shares of Common Stock, which warrants will be exercisable

on the effective date of stockholder approval of the issuance of the shares upon exercise of the unregistered warrants (the “Stockholder

Approval”), at an exercise price of $ 3.44 per share.

The Series A warrants will expire five years following the Stockholder Approval

and the Series B warrants will expire 18 months following the Stockholder Approval.

The unregistered warrants and the unregistered common

stock issuable upon the exercise of the warrants were offered pursuant to the exemptions provided in Section 4(a)(2) under the Securities

Act of 1933, as amended, or the Securities Act, and/or Regulation D promulgated thereunder.

The Company adjourned its annual meeting

until June 2, 2025 to continue to solicit votes for the approval of the unregistered Series A and Series B warrants.

company issued 46,876 warrants to the underwriters of the September 2024 direct offering, with an exercise price of $ 4.30 per common

share and an expiration date of September 4, 2029 .

Restricted Common

shares issued for services

Company issued 12,500 shares of its common stock with a fair value of $ 90,000 for services during the year ended December 31, 2024.

During 2025 we filed a Prospectus Supplement to the Prospectus dated

January 24, 2024 to issue up to $ 5,082,431 , from time to time through or to our sales agent, H.C.

Wainwright & Co.

(the “Agent”).

These sales were made pursuant to the terms of an At Market Issuance Sales Agreement, or the Sales Agreement, between us and the Agent

(the “Sales Agreement”).

As of December 31, 2025 we had completed the sale of 2,971,670 shares of common stock with net proceeds

of $ 4,930,394 .

Common shares issued for services

Company issued 100,000 shares of its common stock with a fair value of $ 135,000 for services during the year ended December 31, 2025.

The Company issued 12,500 shares of its common stock with a fair value of $ 90,000 for services during the year ended December 31, 2024.

6 STOCK OPTION PLAN AND WARRANTS

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2020 Plan (the “2020 Plan”).

The 2020 Plan has a maximum of 156,250

The 2020 Plan had a maximum of 156,250

shares authorized with similar terms and conditions to the 2010 Option Plan.

As of December 31, 2024 there were 193,397 options outstanding

under the 2020 Option Plan.

The shares issuable pursuant to the 2020 Option Plan are registered with the SEC under Forms S-8 filed on

October 7, 2022 (No.

The shares issuable pursuant to the 2020 Option Plan are

registered with the SEC under Forms S-8 filed on October 7, 2022 (No.

333- 267792).

In 2024, the 2020 Option Plan was amended to increase the number of shares issuable under the 2020

Option Plan to 656,250 shares.

In 2025 and 2024, the 2020 Option Plan was amended

to increase the number of shares issuable under the 2020 Option Plan to 1,156,250 and 656,250 shares respectively.

As of December 31,

2025 there were 720,959 options outstanding under the 2020 Option Plan.

of December 31, 2025 and December 31, 2024, there were 735,737 and 217,056 options outstanding, respectively, under all the option plans.

7 unchanged sentences

have also granted non-qualified stock options to employees and contractors.

All non-qualified options are generally issued with an

exercise price no less than the fair value of the common stock on the date of the grant as determined by our Board of Directors.

Options may be exercised up to ten years following the date of the grant, with vesting schedules determined by us upon grant.

Vesting schedules vary by grant, with some fully vesting immediately upon grant to others that ratably vest over a period of time up

to four years.

Standard vested options may be exercised up to three months following date of termination of the relationship unless

alternate terms are specified at grant.

All non-qualified options are generally issued with an exercise

price no less than the fair value of the common stock on the date of the grant as determined by our Board of Directors.

Options may be

exercised up to ten years following the date of the grant, with vesting schedules determined by us upon grant.

Vesting schedules vary

by grant, with some fully vesting immediately upon grant to others that ratably vest over a period of time up to four years.

vested options may be exercised up to three months following date of termination of the relationship unless alternate terms are specified

The fair values of options are determined using the Black-Scholes option-pricing model.

estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods.

December 31, 2024, we had approximately $ 32,800

The estimated fair value of options

is recognized as expense on the straight-line basis over the options’ vesting periods.

At December 31, 2025, we had approximately

$ 6,000 unrecognized stock-based compensation.

During 2024 and 2023, the Company granted 79,000

stock options with a weighted average fair value of $ 1.10

and $ 0.34 per share,

respectively.

The Company recorded stock compensation costs of $ 122,600

and $ 104,600

During 2025 and 2024, the Company granted 535,000 and 79,000 stock options with a weighted

average fair value of $ 0.73 and $ 1.10 per share, respectively.

The Company recorded stock compensation costs of $ 376,000 and $ 122,600

on vesting of the options during 2025 and 2024, respectively.

5 unchanged sentences

Options Exercisable at Year-End

with respect to stock options outstanding and exercisable at December 31, 2024 is as follows:

OF STOCK OPTION OUTSTANDING AND EXERCISABLE AND EXERCISABLE EXERCISE PRICE RANGE

The Black-Scholes option pricing model, used to

estimate fair value of the option awards, requires the use of the following assumptions:

● Fair value of common stock.

The fair value

of the common stock is the Company’s closing price per share on the OTC listing at the grant date.

● Expected Term.

The expected term of options

granted represents the period of time that the options are expected to be outstanding.

Due to the lack of historical exercise history,

the expected term of the Company’s stock options has been determined by calculating the midpoint of the contractual term of the

options and the weighted-average vesting period.

● Expected Volatility.

The expected stock

price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have any

trading history for the common stock.

The Company will continue to analyze the historical stock price volatility and expected term assumption

as more historical data for the common stock becomes available.

● Risk-Free Interest Rate.

The risk-free

interest rate assumption is based on the U.S.

Treasury instrument whose term was consistent with the expected term of the Company’s

stock options.

The Company has not paid any

cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future.

Consequently, an

expected dividend yield of zero was used.

The fair value of options granted was estimated

using the Black-Scholes valuation model using the following assumptions for the years ended December 31, 2025 and 2024, respectively:

OF WEIGHTED-AVERAGE ASSUMPTIONS

Year ended December 31,

Expected volatility

Expected dividend yield

Expected term (in years)

Risk-free interest rate

3.7 % - 4.5 %

The fair value of options granted was estimated

using the Black-Scholes valuation model using the following assumptions for the years ended December 31, 2025 and 2024, respectively:

OF STOCK OPTION OUTSTANDING AND EXERCISABLE

Options Outstanding

Options Exercisable

Outstanding at

3 unchanged sentences

assumptions used for options granted.

The intrinsic value of the outstanding options at December 31, 2025 was $ 10,500 .

transactions during 2025 and 2024 were as follows:

8 unchanged sentences

Average Remaining Contractual

3.44 -$ 34.00

fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following

weighted-average assumptions used for options granted.

During the year ended December 31, 2023, warrant

holders exercised 118,238 warrants to acquire 118,238 shares for net proceeds to the Company of $ 1,322,885 .

There was no intrinsic value of the outstanding warrants at December 31, 2025.

7 INCOME TAXES

10 unchanged sentences

December 31, 2025, the Company had available Federal and state net operating loss carryforwards to reduce future taxable income.

As of December 31, 2024, we had federal and state net operating loss carryforwards

for income tax purposes of approximately $ 38 million which will begin to expire in 2025.

We also have Arizona net operating loss carryforwards

for income tax purposes of approximately $ 12.0 million which expire after five years.

These carryforwards have been utilized in the determination

of the deferred income taxes for financial statement purposes.

Given the Company’s history of net operating

losses, management has determined that it is more likely than not that the Company will not be able to realize the tax benefit of the

carryforwards.

Accordingly, The Company has not recognized a deferred tax asset for this benefit.

Section 382 generally limits the use

of NOLs and credits following an ownership change, which occurs when one or more 5 percent shareholders increase their ownership,

in aggregate, by more than 50 percentage points over the lowest percentage of stock owned by such shareholders at any time during the

“testing period” (generally three years).

of December 31, 2025, we had federal and state net operating loss carryforwards for income tax purposes of approximately $ 38

million which will begin to expire in 2025 and under TCJA, post 2017 losses can be carried forward indefinitely.

We also have Arizona net operating loss carryforwards for income tax purposes of

approximately $ 12

million which expire after five years.

These carryforwards have been utilized in the determination of the deferred income taxes for

financial statement purposes.

the Company’s history of net operating losses, management has determined that it is more likely than not that the Company will

not be able to realize the tax benefit of the carryforwards.

Accordingly, The Company has not recognized a deferred tax asset for this

Section 382 generally limits the use of NOLs and credits following an ownership change, which occurs when one or more 5 percent

shareholders increase their ownership, in aggregate, by more than 50 percentage points over the lowest percentage of stock owned by such

shareholders at any time during the “testing period” (generally three years).

Company has adopted FASB guidelines that address the determination of whether lax benefits claimed or expected to be claimed on a tax

49 unchanged sentences

Under the VAT tax reporting system, sales

cut-off did not take the accrual base but rather on a VAT taxable reporting basis.

Therefore, when the company adopted US GAAP on accrual

basis, the sales cut-off TCIT timing difference which derived from the VAT reporting system will create a temporary sales cut-off timing

difference and this difference is reflected in the deferred tax assets or liabilities calculations.

cut-off does not use the accrual basis but rather on a VAT taxable reporting basis.

8 EARNINGS (LOSS) PER SHARE

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SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

Average Shares

Loss Per Share

$ ( 3,198,112 )

$ ( 3,980,820 )

Weighted Average Shares

Basic Loss Per Share

the years ended December 31, 2025 and 2024, the calculations of basic and diluted loss per share are the same because potential dilutive

2 unchanged sentences

SCHEDULE OF BASIC AND DILUTED LOSS PER SHARES SECURITIES

December 31, 2025

December 31, 2024

9 CONTINGENT LIABILITIES

The Company may be involved in certain legal proceedings

that arise from time to time in the ordinary course of our business.

Except for income tax contingencies, we record accruals for contingencies

to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated.

Management believes the accompanying financial statements include all provisions, of any, for any potential losses.

Legal expenses associated

with the contingency are expensed as incurred.

September 13, 2024 Aegis Capital Corp.

commenced an action against the Company alleging that it had breached the provisions of a

Placement Agency Agreement (PPA) dated June 24, 2024 and that the Company was required to pay the plaintiff placement agent fees as

a result of the Company’s September 4, 2024 direct offering of $2.15 million with H.

The Company rejects

the Plaintiff’s claims that it is due the 7% plus expenses in the PPA and asserts that the PAA had been terminated on August

15, 2024 due to the plaintiff’s non-performance and that the plaintiff is not entitled to any fees in the offering since it

raised none of the funds in the offering.

The action is currently in the discovery stage and the Company intends to vigorously

defend the action.

Related to Iveda Taiwan pursuant to certain contracts with Chicony Power

Technology Co., Ltd., Shihlin Electric & Engineering Corporation, Chung-Hsin Electric and Machinery Manufacturing Corp., and National

Chung Shan Institute of Science and Technology, 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 December 31, 2024 is $ 339,042 .

Company may be involved in certain legal proceedings that arise from time to time in the ordinary course of our business.

income tax contingencies, we record accruals for contingencies to the extent that our management concludes that the occurrence is probable

and that the related amounts of loss can be reasonably estimated.

Management believes the accompanying financial statements include all

provisions, of any, for any potential losses.

Legal expenses associated with the contingency are expensed as incurred.

to Iveda Taiwan pursuant to certain contracts with Chicony Power Technology Co., Ltd., Shihlin Electric & Engineering Corporation,

Chung-Hsin Electric and Machinery Manufacturing Corp., National Chung Shan Institute of Science and Technology, and Chunghwa Telecom

Co., Ltd, 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 December 31, 2025, is $ 368,939 .

10 SEGMENT INFORMATION

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Net income (loss) is used for evaluating financial performance.

Significant segment expenses include salaries and

payroll, stock based compensation, marketing, public company expenses, audit and accounting, consulting, research and development, travel

and entertainment, software subscription and other administrative expenses for the US and salaries and payroll, insurance, rent, travel

and entertainment, office supplies and postage, pension and other administrative expenses.

The following table presents the significant

segment expenses and other segment items regularly reviewed by our CODM.

OF SEGMENT INFORMATION

segment expenses include salaries and payroll, stock based compensation, marketing, public company expenses, audit and accounting, consulting,

research and development, travel and entertainment, software subscription and other administrative expenses for the US and salaries and

payroll, insurance, rent, travel and entertainment, office supplies and postage, pension and other administrative expenses.

The following

table presents the significant segment expenses and other segment items regularly reviewed by our CODM.

SCHEDULE OF SEGMENT INFORMATION

December 31, 2025

13 unchanged sentences

Total Operating Expenses

Loss (Income) from Operations

Income (Loss) from Operations

( 3,226,896 )

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Interest Income and Other (Expenses), net

Net loss before Income Tax

Net Income (Loss) before Income Tax

$ ( 3,167,628 )

2 unchanged sentences

$ ( 4,007,247 )

Furthermore, due to operations in various geographic

locations, we are susceptible to changes in national, regional, and local economic conditions, demographic trends, consumer confidence

in the economy, and discretionary spending priorities that may have a material adverse effect on our future operations and results.

We are required to collect certain taxes and fees

from customers on behalf of government agencies and remit them back to the applicable governmental agencies on a periodic basis.

and fees are legal assessments to the customer, for which we have a legal obligation to act as a collection agent.

Because we do not retain

the taxes and fees, we do not include such amounts in revenue.

We record a liability when the amounts are collected and relieve the liability

when payments are made to the applicable governmental agencies.

due to operations in various geographic locations, we are susceptible to changes in national, regional, and local economic conditions,

demographic trends, consumer confidence in the economy, and discretionary spending priorities that may have a material adverse effect

on our future operations and results.

are required to collect certain taxes and fees from customers on behalf of government agencies and remit them back to the applicable

governmental agencies on a periodic basis.

The taxes and fees are legal assessments to the customer, for which we have a legal obligation

to act as a collection agent.

Because we do not retain the taxes and fees, we do not include such amounts in revenue.

We record a liability

when the amounts are collected and relieve the liability when payments are made to the applicable governmental agencies.

net assets (liabilities) for our significant geographic regions are as follows:

8 unchanged sentences

Total Consolidated

11 RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

financial statements for the year ended December 31, 2023 and the accumulated deficit as of December 31, 2022 have been restated.

to the original issuance of these financial statements, our audit committee and management determined the following:

As of December 31, 2022

the Company erroneously did not recognize a valuation decrease in recorded deferred tax assets in its Taiwan subsidiary.

the Company erroneously did not recognize an intercompany payable to its subsidiary, Iveda Taiwan.

affected included other assets and liabilities affected included accounts and other payables.

As of December 31, 2023

the Company had erroneously capitalized software development costs during 2023 and 2024 Quarterly filings.

In addition, the Company is making certain reclassification entries.

effects on the previously issued financial statements are as follows:

periods before 2022, Management of the Company determined that the following:

The Deferred Tax asset of $ 146,560 was no longer a valid tax difference.

The amount was recorded as an adjustment to accumulated deficit

at December 31, 2022.

[2} The intercompany

amount due to Iveda Taiwan was understated by $ 200,000 related to a payment made on behalf of Iveda US by Iveda Taiwan.

the year ending December 31, 2023, Management of the Company determined that the following:

An adjustment for $ 792,612 related to expensing the research and development expense was needed related to activity in 2023.

was recorded as a reduction to assets and the associated expense was recorded to the statement of operations.

[4] An adjustment

for $ 180,000 to expense its investment in Iveda Phils JV originally recorded as a consolidation but we have determined this investment

should have been recorded as the equity method.

This effected cash, account and other payables, Joint Venture Non-Controlled Equity Portion,

Accumulated Other Comprehensive Income (Loss) and accumulated deficit

following table presents the effect of the restatements of the Company’s previously issued balance sheet:

OF RESTATEMENTS

As of December 31, 2023

As Previously Reported

$ ( 146,560 ) [1]

Accounts and Other Payables

( 1,110,087 )

Property and Equipment, Net

( 792,612 )[3]

Joint Venture Non-Controlled Equity Portion

Cash and Cash Equivalents

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

$ ( 47,941,796 )

$ ( 1,254,101 )[5]

$ ( 49,195,897 )

[1] Deferred Tax Asset eliminated from Other Assets

[2] The intercompany amount due to Iveda Taiwan was understated by $ 200,000 related to a payment made on behalf of Iveda US by Iveda Taiwan added back to Accounts and Other Payables

[3] 2023 capitalized software expensed to Research and Development

[4] An adjustment for $ 180,000 to expense its investment

in Iveda Phils JV originally recorded as a consolidation but we have determined this investment should have been recorded using the equity

On the balance sheet this effected Cash and Cash equivalents, Accounts and Other Payables, Joint Venture Non-Controlled Equity Portion, Accumulated

Other Comprehensive Income (Loss).

[5] Each of the above restatements effected Accumulated Deficit

following table presents the effect of the restatements and reclassification on the Company’s previously issued and reported statement

of operations

As of December 31, 2023

As Previously Reported

Research and Development

Loss from Investment in Iveda Phils

Eliminate JV G&A recorded 2023

Eliminate JV Interest Income recorded 2023

Eliminate Loss attributable to non-controlled interest

$ ( 3,235,124 )

$ ( 907,542 )

$ ( 4,142,666 )

Basic and Diluted Cost per Share

* Restated per share amount

reflects a reverse stock split of the outstanding shares of our Common Stock at a ratio of 1-for-8 effected on September 17,

following table presents the effect of the restatements and reclassification on the Company’s previously issued and reported statement

of operations

Common Stock Amount

Additional Paid in Capital

Accumulated Deficit

Non-Controlling Interest

Accumulated Other Comprehensive (Loss)

Stockholders’

Balance, December 31, 2022 as previously reported

$ ( 44,706,671 )

$ ( 220,643 )

Correction of Deferred Tax Asset

Correction of Prior Period Intercompany Accounts Payable

Balance, December 31, 2022 as restated

( 45,053,171 )

Balance, December 31, 2023 as previously reported

( 47,941,796 )

Correction of Deferred Tax Asset

$ ( 146,560 )

Correction of Prior Period Intercompany Accounts Payable

Capitalized Software expensed to Research and Development

$ ( 792,612 )

Expense Investment in Iveda Phils JV, net

Balance, December 31, 2023 as restated

$ ( 49,195,897 )

$ ( 221,418 )

$ ( 49,195,897 )

$ ( 221,418 )

The following table presents the effect of the restatements

of the Company’s previously issued statement of cashflows:

As Previously Reported

As of December 31, 2023

As Previously Reported

$ ( 3,235,124 )

( 792,612 ) [3]

( 114,930 ) [4]

( 4,142,666 )

Loss from Iveda Phils Joint Venture

Increase (Decrease) in Accounts and Other Payables

( 1,173 ) [4]

Net Cash Used in Operating Activities

( 2,604,645 )

( 792,612 ) [3]

( 114,930 ) [4]

( 1,173 ) [4]

Purchase of Property and Equipment, Net

$ ( 878,205 )

$ ( 792,612 ) [3]

Net Cash Provided by (Used in) Investing Activities

$ ( 878,205 )

$ ( 792,612 ) [3]

Joint Venture Non-Controlled Equity Portion

Change in restricted Cash

Net Cash Provided by Financing Activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS – END OF PERIOD

Capitalized Software expensed to Research and Development

An adjustment for $ 180,000 to expense its investment in Iveda Phils JV originally recorded as a consolidation but

we have determined this investment should have been recorded as the equity method.

The net loss effect is $ 180,000 less the $ 65,070 loss

recorded in 2023 in consolidation.

Net $ 114,930 additional loss recorded in 2023.

Eliminate line item for change in restricted cash of $ 685

Added Restricted Cash to Cash and Cash Equivalents

NOTE 12 SUBSEQUENT

On February 27, 2025, Iveda Solutions, Inc.

(the “Company”) entered into an At the Market Offering Agreement

(the “Sales Agreement”) with H.C.

Wainwright & Co., LLC (the “Sales Agent), pursuant to which the Company may offer

and sell, from time to time, through or to the Sales Agent, shares (the “Placement Shares”) of the Company’s common

stock, par value $ 0.00001 per share (the “Common Stock”), having an aggregate offering price of up to $ 5,082,431 (the “ATM

Sales pursuant to the Sales Agreement will be made only upon instructions by the Company to the Sales Agent, and the

Company cannot provide any assurances that it will issue any Shares pursuant to the Sales Agreement.

The issuance and sale, if any, of the Placement Shares by the Company under the Sales Agreement will be made pursuant

to the Company’s effective “shelf” registration statement on Form S-3 (Registration Statement No.

333-276676) (the “Registration

Statement”), the base prospectus contained therein, and a prospectus supplement relating to the ATM offering, dated February 27,

Under the terms of the Sales Agreement, the Company may sell the Placement Shares by any method permitted that is

deemed an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities

The Sales Agent will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable

state and federal laws, rules and regulations to sell the Placement Shares from time to time, based upon the Company’s instructions

(including any price, time or size limits or other customary parameters or conditions the Company may impose).

Actual sales will depend

on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price

of the Company’s Common Stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company.

The Company is not obligated to make any sales of Placement Shares under the Sales Agreement and the Company cannot provide any assurances

that it will issue any Placement Shares pursuant to the Sales Agreement.

The Company will pay a commission rate of 3% of the gross sales

price per share sold and agreed to reimburse the Sales Agent for certain specified expenses, including the fees and disbursements of its

legal counsel in an amount not to exceed $ 50,000 and have agreed to reimburse the Sales Agents an amount not to exceed $ 5,000 per due

diligence update session conducted in connection with each such date the Company files its Quarterly Reports on Form 10-Q, its Annual

Report on Form 10-K and amendments or supplements to the Registration Statement, the accompanying prospectus, or any prospectus supplement.

The Company has also agreed pursuant to the Sales Agreement to provide the Sales Agent with customary indemnification and contribution

On March 14, 2025, the “Company redomiciled

to Delaware form Nevada with authorized to issue 312,500,000 shares of capital stock.

Of which (i) 300 million shares shall be common

stock, $ 0.00001 par value and (ii) 12,500,000 shares shall be shares of preferred stock, $ 0.00001 par value.

The Company headquarters lease in Mesa Arizona

expired February 28, 2025 and has been renewed for 5 years at similar terms to the previous lease.

11 SUBSEQUENT EVENTS

February 11, 2026, Iveda Solutions, Inc., a Delaware corporation (the “Company”) consummated a public offering (the

“Offering”) for aggregate gross proceeds of approximately $ 2 million before deducting placement agent fees and other

offering expenses payable by the Company.

The Offering included (i) 5,259,999

shares (the “Shares”) of the Company’s common stock, par value $ 0.00001

per share (“Common Stock”) at an offering price of $ 0.35

per share of Common Stock, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 454,287

shares of Common Stock, at an offering price of $ 0.3499

per Pre-Funded Warrant and (iii) accompanying series X warrants (the “Series X Warrants”) to purchase up to 11,428,572

shares of Common Stock.and accompanying Series X Warrant.

Pre-Funded Warrants are immediately exercisable subject to certain ownership limitations, have an exercise price of $ 0.0001

per share, and may be exercised at any time until all of the

Pre-Funded Warrants have been exercised in full.

The Series X Warrants are exercisable at a price of $ 0.35

per share, are exercisable from and after the date of their

issuance and expire on the second (2)-year anniversary of the original issuance date .

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-K

Item 9A. Controls and Procedures