Iveda Solutions, Inc. 10-K

ITEM 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, 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. 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 with U.S. GAAP. As 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. Based on 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: 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 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. 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. 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. Changes in Internal Control over Financial Reporting There 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. 33 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 control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Changes in Disclosure Controls and Procedures None ITEM 9B – OTHER INFORMATION (a) None. (b) Corporate Governance During the period covered by this Annual Report on Form 10-K, there were no changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors. (c) Insider Trading Arrangements and Policies During the quarter ended December 31, 2025, no director or officer of the Company “ adopted ” or “ terminated ” a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K. A copy of the Company’s insider trading policy is attached as Exhibit 19.1 hereto. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 34 PART III ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Executive Officers and Directors Set forth below is information concerning our directors, director nominees, executive officers and other key employees. Name Age Position David Ly 50 Chief Executive Officer, Chairman of the Board of Directors and President Robert J. Brilon 65 Chief Financial Officer, Treasurer and Corporate Secretary Gregory Omi 64 Chief Technology Officer Joseph Farnsworth 66 Director Alejandro Franco 72 Director Robert D. Gillen 71 Director David Ly founded our company and has served as our Chief Executive Officer and Chairman of the Board of Directors since October 2009. Mr. Ly also served as our President from October 2009 to February 2014. Mr. Ly served in Business-to-Business Sales for T-Mobile USA, a wireless network and communications company, from August 2002 to September 2003. From September 2001 to July 2002, Mr. Ly served as Market Manager of Door To Door Storage, a moving and portable storage company. Mr. Ly served as an Applications Engineer at Metricom, Inc., the first micro cellular data network, from November 1998 to August 2001. Mr. Ly holds a Bachelor of Science Degree in Civil Engineering with a minor in International Business from San Francisco State University. We believe Mr. Ly’s position as our Chief Executive Officer, his extensive knowledge and understanding of the video surveillance and AI industries, and his business and engineering expertise and management skills provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors. Robert J. Brilon has served as our Chief Financial Officer since December 2013. He was also our President from February 2014 to July 2018 and Treasurer from December 2013 to July 2018 and was appointed Treasurer again on December 15, 2021. Mr. Brilon served as our Executive Vice President of Business Development from December 2013 to February 2014 and as our interim Chief Financial Officer and Treasurer from December 2008 to August 2010. Mr. Brilon is a Board Director and independent contract CFO for Bimergen Energy Corporation from October 2021 to present. Mr. Brilon joined New Gen Management Services, Inc. in July 2017 as the CFO (subsequently becoming President and CFO of New Gen in July 2018). Mr. Brilon was the President, Chief Financial Officer, Corporate Secretary, and Director of both Vext Science, Inc and New Gen until he resigned in February 2020. Mr. Brilon served as Chief Financial Officer and Executive Vice President of Business Development of Brain State Technologies, a brainwave optimization software licensing and hardware company, from August 2010 to November 2013. From January 2010 to August 2010, Mr. Brilon served as Chief Financial Officer of MD Helicopters, a manufacturer of commercial and light military helicopters. Mr. Brilon also served as Chief Executive Officer, President, and Chief Financial Officer of InPlay Technologies (NASDAQ: NPLA), formerly, Duraswitch (NASDAQ: DSWT), a company that licensed patented electronic switch technology and manufactured digital pen technology, from November 1998 to June 2007. Mr. Brilon served as Chief Financial Officer of Gietz Master Builders from 1997 to 1998, Corporate Controller of Rental Service Corp. (NYSE: RRR) from 1995 to 1996, Chief Financial Officer and Vice President of Operations of DataHand Systems, Inc. from 1993 to 1995, and Chief Financial Officer of Go-Video (AMEX:VCR) from 1986 to 1993. Mr. Brilon is a certified public accountant and practiced with several leading accounting firms, including McGladrey Pullen, Ernst and Young and Deloitte and Touche. Mr. Brilon holds a Bachelor of Science degree in Business Administration from the University of Iowa. 35 Gregory Omi has served as our Chief Technology Officer since May 2021. Prior, Mr. Omi served as director of our company from October 2009 to November 2016. Mr. Omi served as a senior programmer for Zynga, an online and mobile social gaming company, from November 2009 to March 2014 and then again briefly in 2016 and 2019 as architect. Mr. Omi served as senior engineer at Tesla, an electric vehicle manufacturer, from October 2016 to October 2017. Prior to that, Mr. Omi served as a programmer for Monkey Gods, LLC, a video game developer, from January 2009 to November 2009. Mr. Omi also served as Senior Programmer for Flektor, Inc., a developer of online audio and video editing tools, from October 2006 to January 2009. From October 1996 to June 2006, Mr. Omi served as a Senior Programmer for Naughty Dog, a computer game developer. Prior to that, Mr. Omi served in programming roles for 3DO from 1992 to 1996, TekMagic in 1992, Epyx from 1986 to 1992, Atari in 1991, Nexa from 1982 to 1983 and 1985 to 1986, and HES in 1983. Mr. Omi attended DeVry Institute in Phoenix, Arizona from 1979 to 1980 where he studied industrial electronics engineering. Joseph Farnsworth has served as a director of our company since January 2010. Mr. Farnsworth has served as President and as a director of Farnsworth Realty & Management Co., an Arizona-based privately held real estate company, and as a director of Farnsworth Development, a closely held real estate developer, since 1995. Mr. Farnsworth has also served as a director of The Farnsworth Companies since 2008. Mr. Farnsworth has also served as a director of Venture West Aviation since 2022. From 1990 to 1995, Mr. Farnsworth served as President of Alfred’s International, with operations in China and Korea. Prior to that, Mr. Farnsworth served as President of Farnsworth International, a real estate investment company based in Taipei, Taiwan from 1987 to 1991. Mr. Farnsworth holds a Bachelor of Science degree in Real Estate Finance from Brigham Young University and is a licensed real estate broker in Arizona. We believe Mr. Farnsworth’s experience leading companies with operations in Asia and his business and management skills provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors. Alejandro Franco has served as a director of our company since November 2011. Mr. Franco has also served as a consultant to our company since 2011, advising on business development and strategic partnership opportunities in Mexico. Mr. Franco is the founder and has served as President of Amextel, a telecommunications company in Mexico, since June 2003. Mr. Franco founded the Mexican American Business Council, a non-profit organization facilitating border relationships to increase business, support trade growth and investments, and has been the CEO since June 2015. Mr. Franco also founded and served as President of Bela Corp., a cloud technology and services company, from 1988 to 2000. Prior to that, Mr. Franco founded and served as President of TVM, Inc., a television and technology company in Mexico, from 1985 to 1988. Mr. Franco attended UNAM University, Mexico where he studied Economics. Mr. Franco also attended IBERO University, Mexico, where he studied Industrial Design. Mr. Franco holds a Master degree in Theology from the Oblate School of Theology in San Antonio, Texas. We believe Mr. Franco’s experience leading businesses with operations in Asia and Mexico, his experience as a consultant for our company, his extensive knowledge and understanding of the telecommunications and cloud technology industries, and his business and management skills provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors. Robert D. Gillen has served as a director of our company since November 2011. Mr. Gillen founded and has served as President of the Law Offices of Robert D. Gillen, Ltd., a law firm located in Scottsdale, Arizona and Naperville, Illinois, which specializes in advising small- and medium-size businesses on domestic and international tax planning, since 1979. Mr. Gillen retired in October 2014. Mr. Gillen holds a Bachelor of Science degree in Business Administration from the University of Illinois and a J.D. from the Illinois Institute of Technology – Chicago Kent College of Law. Mr. Gillen also has extensive experience educating, CPAs, attorneys, and other financial and business professionals about asset protection and tax planning. We believe Mr. Gillen’s experience advising, clients operating the cellular industry, his experience leading a business involved in the lease and sale of cellular sites, his experience navigating international business and legal issues, and his prior board experience provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on our Board of Directors. 36 Family Relationships There are no family relationships among any of our directors, director nominees or executive officers. Terms of Directors and Executive Officers The number of directors of the Company shall be not less than one nor more than thirteen. Each of our directors holds office until the next annual meeting of shareholders and until his or her successor shall have been elected and qualified, until his or her resignation, or until his or her office is otherwise vacated in accordance with our articles of incorporation. Our officers are elected by and serve at the discretion of the board of directors. Board of Directors and Board Committees Our board of directors consists of four directors, three of whom are independent as such term is defined by the Nasdaq Capital Market. We have determined that Joseph Farnsworth, Alejandro Franco and Robert D. Gillen satisfy the “independence” requirements under NASDAQ Rule 5605. Board Committees We have established three committees under the board of directors: an audit committee, a compensation committee and a nomination and corporate governance committee, and adopted a charter for each of the three committees. Copies of our committee charters are posted on our corporate investor relations website. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Joseph Farnsworth, Alejandro Franco and Robert D. Gillen. Mr. Farnsworth is the chair of our audit committee. The audit committee will oversee our accounting and financial reporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things: ● appointing 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; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. Compensation Committee. Our compensation committee consists of Joseph Farnsworth, Alejandro Franco and Robert D. Gillen. Mr. Farnsworth is the chair of our compensation committee. 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; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. 37 Nominations and Corporate Governance Committee. Our Nominations and Corporate Governance committee consists of Joseph Farnsworth, Alejandro Franco and Robert D. Gillen. Mr. Gillen is the chair of our Nominations and Corporate Governance committee. The nominating and corporate governance committee is responsible for, among other things, (i) determining the qualifications, qualities and skills required to be a director of the Company and evaluating, selecting and approving nominees to serve as directors, (ii) periodically reviewing, assessing and making recommendations for changes to the Board of Directors and its committees and (iii) overseeing the process for evaluation of the Board of Directors. Pursuant to the nominating and corporate governance committee charter, the nominating and corporate governance committee has the authority to delegate all or a portion of its duties and responsibilities to a subcommittee of the nominating and corporate governance committee. In addition, the nominating and corporate governance committee has unrestricted access to and assistance from our officers, employees and independent auditors and the authority to employ experts, consultants and professionals to assist with performance of their duties. The nominating and corporate governance committee is also responsible for establishing procedures regarding director nominees put forward by stockholders. The committee is also responsible for establishing procedures for shareholder communications with the Board of Directors. Involvement in Certain Legal Proceedings None of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has any been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC. Code of Business Conduct and Ethics We have adopted a code of business conduct and ethics which is applicable to all of our directors, executive officers and employees. A copy of the code of business conduct and ethics is posted on our corporate investor relations website as required for our listing on the Nasdaq Capital Market. ITEM 11 – EXECUTIVE COMPENSATION Summary Compensation Table We believe that it is important to design a compensation program that supports our business strategy. As a result, our compensation program emphasizes performance-based compensation and is designed to support our business goals, promote short- and long-term growth, and attract, retain, and motivate key talent. Our compensation program is comprised of three components: base salary, bonus awards, and long-term performance incentives. We believe that our executive officers and other key employees should have a portion of their potential annual compensation tied to our profitability and our other goals. Additionally, we seek to align the ability to earn long-term incentives directly with the interests of our stockholders through the use of equity-based incentives. We strive to ensure compensation is competitive with companies similar to us; however, we acknowledge that base salaries are currently below market. The following table sets forth certain information with respect to compensation for the years ended December 31, 2025 and 2024, earned by or paid to our chief executive officer and principal executive officer, our principal financial officer, and our other most highly compensated executive officers whose total compensation exceeded US $100,000 (the “named executive officers”). Name and Principal Position Year Salary (1) Warrants Awards (2) Option Awards (3) All Other Compensation (4) Total David Ly 2025 $ 190,000 $ 124,250 $ 16,586 $ 330,836 Chairman and Chief Executive Officer 2024 $ 190,000 $ 18,367 $ 16,586 $ 224,953 Robert J. Brilon 2025 $ 180,000 $ 88,730 $ 268,730 Chief Financial Officer, Treasurer and Corporate Secretary 2024 $ 180,000 $ 18,367 $ 198,367 Gregory Omi 2025 - $ - $ - Chief Technology Officer 2024 - $ - $ - (1) The amounts in this column reflect the amounts earned during the fiscal year, whether or not actually paid during such year. (2) 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. (3) 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. (4) The amounts in this column reflect the amount of perquisites related to a vehicle allowance. 38 Outstanding Equity Awards as of December 31, 2025 The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2025. Outstanding Equity Awards as of December 31, 2025 The following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2025. Name and Principal Position Grant Date Number of Securities Underlying Unexercised Options/Warrants (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date David Ly Chairman and Chief Executive Officer 12/15/2020 10,938 (1) - - $ 23.68 12/15/2030 12/30/2021 2,344 (1) - - $ 129.92 12/31/2031 6/15/2022 1,563 (1) - - $ 11.36 6/15/2032 10/03/2022 625 (1) - - $ 6.00 10/03/2032 12/01/2022 1,875 (1) - - $ 4.32 12/01/2032 11/3/2023 8,750 (2) - - $ 5.44 11/3/2033 12/7/2024 15,000 (3) - - $ 1.71 12/7/2034 12/29/2025 175,000 - - $ 0.82 12/29/2035 Robert J. Brilon Chief Financial Officer 12/30/2021 1,563 (1) - - $ 129.92 12/31/2031 6/15/2022 1,250 (1) - - $ 11.36 6/15/2032 10/03/2022 625 (1) - - $ 6.00 10/03/2032 12/01/2022 1,563 (1) - - $ 4.32 12/01/2032 11/3/2023 7,500 (2) - - $ 5.44 11/3/2033 12/7/2024 15,000 (3) - - $ 1.71 12/7/2034 12/29/2025 125,000 (1) - - $ 0.82 12/29/2035 Gregory Omi Chief Technology Officer 01/05/2016 313 (1) - - $ 41.60 01/05/2026 12/29/2016 313 (1) - - $ 16.64 12/29/2026 05/10/2021 2,344 (1) - - $ 48.00 5/10/2031 12/30/2021 1,563 (1) - - $ 129.92 12/30/2031 10/03/2022 625 (1) - - $ 6.00 10/03/2032 12/01/2022 782 (1) - - $ 4.32 12/01/2032 11/3/2023 782 (2) - - $ 5.44 11/3/2033 (1) The options became fully vested on the date of grant. (2) The options became fully vested on December 31, 2023. (3) The options became fully vested on December 31, 2024. 39 Equity Compensation Plans On January 18, 2010, we adopted the 2010 Stock Option Plan (the “2010 Option Plan”), which allows the Board to grant options to purchase up to 15,625 shares of common stock to directors, officers, key employees, and service providers of our company. In 2011, the 2010 Option Plan was amended to increase the number of shares issuable under the 2010 Option Plan to 375,000 shares. In 2012, 2010 Option Plan was again amended to increase the number of shares issuable under the 2010 Option Plan to 203,125 shares. The shares issuable pursuant to the 2010 Option Plan are registered with the SEC under Forms S-8 filed on February 4, 2010 (No. 333- 164691), June 24, 2011 (No. 333-175143), and December 4, 2013 (No. 333-192655). The 2010 Option Plan expired on January 18, 2020. As of December 31, 2025 there were 14,778 options outstanding under the 2010 Option Plan. On December 15, 2020, we adopted the Iveda Solutions, Inc. 2020 Plan (the “2020 Plan”). The 2020 Plan has a maximum of 156,250 shares authorized with similar terms and conditions to the 2010 Option Plan. As of December 31, 2025 there were 720,959 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. 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, the 2020 Option Plan was amended to increase the number of shares issuable under the 2020 Option Plan to 1,156,250 shares. As of December 31, 2025 and December 31, 2024, there were 735,737 and 162,265 options outstanding, respectively, under all the option plans. Stock options may be granted as either incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or as options not qualified under Section 422 of the Code. All options are issued with an exercise price at or above the fair market value of the common stock on the date of the grant as determined by our Board of Directors. Incentive stock option plan awards of restricted stock are intended to qualify as deductible performance-based compensation under Section 162(m) of the Code. Incentive Stock Option awards of unrestricted stock are not designed to be deductible to us under Section 162(m). Under the plans, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant. We 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. The fair values of options are determined using the Black-Scholes option-pricing model. 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. Director Compensation Non-employee directors receive stock-based compensation for their service on our Board of Directors and are reimbursed for their cost of attending meetings. 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. 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. 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. Name Fees Earned or paid in Cash $ Stock Awards $ 2025 Options Awards $ Non-Equity Incentive Plan Compensation Nonqualified Deferred Compensation Earnings $ All Other Compensation $ Total $ Joseph Farnsworth - - $ 71,000 (1) - - - $ 71,000 Alejandro Franco - - $ 17,750 (2) - - - $ 17,750 Robert Gillen - - $ 71,000 (3) - - - $ 71,000 (1) As of December 31, 2025, Mr. 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 53,130 shares of our common stock. (3) As of December 31, 2025, Mr. 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. 40 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 S. Val Vista Drive, Suite 213, Mesa, Arizona 85204. Name of Beneficial Owner Common Shares % of Common Shares Directors and Officers David Ly (1) 277,114 4.6 % Robert J. Brilon (2) 172,723 2.9 % Gregory Omi (3) 21,627 0.4 % Joseph Farnsworth (4) 147,044 2.5 % Alejandro Franco (5) 57,037 1.0 % Robert D. Gillen (6) 128,599 2.1 % All Directors and Officers 804,144 12.2 % (1) Includes options to purchase 216,096 shares of common stock, which are exercisable within 60 days of December 31, 2025. (2) Includes options to purchase 152,503 shares of common stock, which are exercisable within 60 days of December 31, 2025. (3) Includes options to purchase 7,504 shares of common stock, which are exercisable within 60 days of December 31, 2025. (4) 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. (5) 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. De C.V. an entity owned by Mr. Franco. (6) Consists (a) options to purchase 128,599 shares of common stock, which are exercisable within 60 days of December 31, 2025. 41 Shares Authorized for Issuance Under Equity Compensation Plans The following table shows the number of securities to be issued upon exercise of outstanding options under equity compensation plans approved by our stockholders and under equity compensation plans not approved by our stockholders as of December 31, 2025. Number of securities to be issued upon exercise 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 Equity compensation plans approved by stockholders (1) 14,778 $ 12.82 - Equity compensation plans approved by stockholders (2) 720,959 $ 5.35 435,291 Equity compensation plans not approved by stockholders (3) 1,863,069 $ 9.13 - Total 1,898,806 $ 8.10 435,291 (1) Consists of our 2010 and 2012 Option Plan. (2) Consists of our 2020 Option Plan (3) Warrants issued not under a plan ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Transactions with Related Persons, Promoters and Certain Control Persons Other than equity and other compensation, termination, change in control and other similar arrangements, which are described under “Executive and Director Compensation.”, since January 1, 2024 there are no transactions to which we were a party in which (i) the amount involved exceeded or will exceed the lesser of $120,000 of one percent (1%) of our average total assets at year-end for the last two completed fiscal years and (ii) any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, any of the foregoing persons, had or will have a direct or indirect material interest. 42 Director Independence Our Board of Directors has undertaken a review of its composition, the composition of its committees, and the independence of each director. Our Board of Directors has determined, after considering all of the relevant facts and circumstances, that Messrs. Farnsworth, Franco, Gillen, and Omi do not have a relationship with us that would interfere with their exercise of independent judgment in carrying out their responsibilities as a director and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC. In making this determination, our Board of Directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director. Our Board of Directors did not consider any relationship or transaction between our company and the independent directors not already disclosed in this Annual Report on Form 10-K in making this determination. Mr. Ly is an employee director. The Audit Committee currently consists of Messrs. Farnsworth (Chairman), Franco and Gillen, each of whom is an independent director of our company. The Compensation Committee currently consists of Messrs. Farnsworth (Chairman), Franco and Gillen, each of whom is an independent director of our company. The Nominations and Corporate Governance Committee currently consists of Messrs. Gillen (Chairman), Farnsworth, and Franco, each of whom is an independent director of our company. ITEM 14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES Fees Paid to Independent Registered Public Accounting Firm In 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 services. We paid or accrued $283,000 for audit fees during the year ended December 31, 2024. During 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. On 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 2024. We paid KC $189,500 for their 10-Q reviews and their work on the re-audit until we replaced them with Weinberg in February 2025. KC did not finish or opine on the 2023 or 2024 audits. No other fees were paid to KC. Audit Committee Pre-Approval Policies As part of its responsibility for oversight of the independent registered public accountants, the Audit Committee has established a pre-approval policy for engaging audit and permitted non-audit services provided by our independent registered public accountants, Weinberg. In accordance with this policy, each type of audit, audit-related, tax and other permitted service to be provided by the independent auditors is specifically described and each such service, together with a fee level or budgeted amount for such service, is pre-approved by the Audit Committee. The Audit Committee has delegated authority to its Chairman to pre-approve additional non-audit services (provided such services are not prohibited by applicable law) up to a pre-established aggregate dollar limit. All services pre-approved by the Chairman of the Audit Committee must be presented at the next Audit Committee meeting for review and ratification. All of the services provided by Weinberg described above were approved by the Audit Committee pursuant to our Audit Committee’s pre-approval policy. Our principal accountants, Weinberg, did not engage any other persons or firms other than their respective full-time, permanent employees. 43 PART IV ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Financial Statements and Financial Statement Schedules 1. Consolidated Financial Statements are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K. 2. Other schedules are omitted because they are not applicable, not required, or because required information is included in the Consolidated Financial Statements or notes thereto. (b) Exhibits Exhibit Number Description of Exhibit 2.1 Agreement and Plan of Merger, dated March 21, 2011, by and among Iveda Solutions, Inc., a Nevada corporation, Sole-Vision Technologies, Inc. (doing business as MEGAsys), a corporation organized under the laws of the Republic of China, and the shareholders of MEGAsys (Incorporated by reference to the Form 10-K/A filed on 2/9/2012) 4.1 Specimen Stock Certificate (Incorporated by reference to the Form SB-2 filed on 4/20/2007) 4.5 Form of Common Stock Purchase Warrant issued by Iveda Corporation in conjunction with the Merger (Incorporated by reference to the Form 8-K filed on 10/21/2009) 4.6 2010 Stock Option Plan, dated January 18, 2010 (Incorporated by reference to the Form S-8 filed on 2/4/2010) 4.7 Form of Notice of Grant of Stock Option under the Iveda Solutions, Inc. 2010 Stock Option Plan, as amended (Incorporated by reference to Form S-8 filed on 6/24/2011) 4.8 Form of Stock Option Agreement under the Iveda Solutions, Inc. 2010 Stock Option Plan, as amended (Incorporated by reference to Form S-8 filed on 6/24/2011) 4.9 Form of Stock Option Exercise Notice under the Iveda Solutions, Inc. 2010 Stock Option Plan, as amended (Incorporated by reference to Form S-8 filed on 6/24/2011) 4.13 2020 Stock Option Plan, dated January 18, 2020 (filed with amended Form 10-12g filed on 10/25/2021) 4.14 Form of Warrant to purchase common stock to officers, directors, employees, and consultants (Incorporated by reference to the Form S-1 filed on 12/30/2021) 4.15 Form of Convertible Debenture(Incorporated by reference to the Form S-1 filed on 12/30/2021) 4.16 Form of Warrant(Incorporated by reference to the Form S-1 filed on 12/30/2021) 4.17 Form of Pre-Funded Warrant (Incorporated by reference to the Form 8-K filed on 02/09/2026) 4.18 Form of Series X Warrant (Incorporated by reference to the Form 8-K filed on 02/09/2026) 4.19 Form of Placement Agent Warrant (Incorporated by reference to the Form 8-K filed on 02/09/2026) 10.1 Application Development Service Agreement dated July 14, 2006 by and between Axis Communications AB and IntelaSight, Inc. (Incorporated by reference to the Form S-4/A2 filed on 8/2/2009) 10.2 Partner Agreement dated January 30, 2007 by and between Milestone Systems, Inc. and IntelaSight, Inc. (Incorporated by reference to the Form S-4/A1 filed on 7/10/2009) 10.3 Solution Partner Agreement dated March 13, 2008 by and between Milestone Systems A/S and IntelaSight, Inc. (Incorporated by reference to the Form S-4/A1 filed on 7/10/2009) 10.4 Channel Partner Program Membership Agreement – Gold Solution Partner Level – dated June 23, 2009 by and between Axis Communications Inc. and IntelaSight, Inc. (Incorporated by reference to the Form S-4/A1 filed on 7/10/2009) 10.5 Stock Purchase Agreement, dated October 15, 2009, by and among Iveda Corporation, IntelaSight, Inc., Ian Quinn and Kevin Liggins (Incorporated by reference to the Form 8-K filed on 10/21/2009) 10.11 Side Letter, dated March 21, 2011, by and among Iveda Solutions, Inc., a Nevada corporation, Sole-Vision Technologies, Inc. (doing business as MEGAsys), a corporation organized under the laws of the Republic of China, and the shareholders of MEGAsys (Incorporated by reference to Form 10-K filed on 3/30/2011) 10.12 Non-Exclusive Strategic Collaboration Agreement between Iveda Solutions, Inc. and Telmex, U.S.A., LLC, dated October 28, 2011 (Incorporated by reference to Form 10-Q/A filed on 3/7/2012) 10.13 2010 Digital Video Remote Monitoring Recording System Procurement Contract between Sole-Vision Technology, Inc. and New Taipei City Police Department Purchasing Authority, dated January 9, 2012 (Incorporated by reference to Form 10-K filed on 3/30/2012) 44 10.14 Consulting Agreement between Iveda Solutions, Inc. and Amextel S.A. de C.V. dated November 2, 2011 (Incorporated by reference to Form 10-K/A filed on 5/11/2012) 10.17 Cooperation Agreement with Industrial Technology Research Institute dated November 2012 (Incorporated by reference to the Form S-1 filed on 12/30/2021) 10.18 Engagement Agreement, by and between Iveda Solutions, Inc. and H.C. Wainright & Co., LLC, dated as of August 28, 2024 ((Incorporated by reference to the Form 8-K filed on 02/09/2026) 10.19 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) 14.1 Code of Conduct and Ethics (Incorporated by reference to the Form 10-K filed on 4/15/2010) 14.2 Code of Ethics for Chief Executive Officer and Senior Financial Officers (Incorporated by reference to the Form 10-K filed on 4/15/2010) 19.1 Iveda Solutions, Inc. Insider Trading Policy 21 Subsidiaries of the Registrant (Incorporated by reference to Form 10-K filed on 3/30/2012) 23.1* Consent of Weinberg & Company P.A. 31.1* Certification of Principal Executive Officer pursuant to Exchange Act Rule 15d-14(a) 31.2* Certification of Principal Financial Officer pursuant to Exchange Act Rule 15d-14(a) 32.1* Certification of Principal Executive Officer Pursuant to Section 1350 32.2* Certification of Principal Financial Officer Pursuant to Section 1350 97.1 Compensation Recovery Policy of Iveda Solutions, Inc. (Incorporated by reference to the Form 10-K filed on 4/01/2024) 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. 45 SIGNATURES Pursuant 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. Date: March 31, 2026 IVEDA SOLUTIONS, INC. By: /s/ David Ly David Ly Chief Executive Officer and Chairman Date: March 31, 2026 IVEDA SOLUTIONS, INC. By: /s/ Robert J. Brilon Robert J. Brilon Chief Financial Officer, Treasurer and Secretary Pursuant to the requirements of Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Capacity Date /s/ David Ly Chief Executive Officer and Chairman March 31, 2026 David Ly (Principal Executive Officer) /s/ Robert J. Brilon Chief Financial Officer, Treasurer and Secretary March 31, 2026 Robert J. Brilon (Principal Financial and Accounting Officer) /s/ Joseph Farnsworth Director March 31, 2026 Joseph Farnsworth /s/ Alejandro Franco Director March 31, 2026 Alejandro Franco /s/ Robert D. Gillen Director March 31, 2026 Robert D. Gillen 46 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 572 ) F-2 CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024 F-3 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 F-4 CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 F-6 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 F-7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-9 F- 1 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, 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. 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. 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) 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 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 disclosures. We have served as the Company’s auditor since 2025. /s/ Weinberg & Company, P.A. Weinberg & Company, P.A. Los Angeles, California March 31, 2026 F- 2 IVEDA SOLUTIONS, INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2025 AND 2024 December 31, 2025 December 31, 2024 ASSETS CURRENT ASSETS Cash and Cash Equivalents $ 5,156,252 $ 2,629,287 Restricted Cash 63,694 29,013 Accounts Receivable, Net 256,699 1,277,635 Deferred Cost of Goods 116,951 507,308 Inventory, Net 235,958 148,120 Other Current Assets 326,005 435,052 Total Current Assets 6,155,559 5,026,415 PROPERTY AND EQUIPMENT, NET 47,093 68,677 Right of Use Asset, Net 148,943 - Other Assets 76,195 84,424 Total Assets $ 6,427,790 $ 5,179,516 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts and Other Payables $ 938,560 $ 1,748,857 Short Term Debt 159,500 427,025 Current Portion of Long-Term Debt 127,600 122,007 Current Portion Lease Liability 41,632 - Total Current Liabilities 1,267,292 2,297,889 Long- Term Debt 265,832 376,188 Long term Lease Liability, Net of Current Portion 114,904 - STOCKHOLDERS’ EQUITY Preferred Stock, $ 0.00001 par value; 12,500,000 shares authorized - Series B Preferred Stock, $ 0.00001 par value; 500 shares authorized, no shares issued and outstanding as of December 31, 2025 and December 31, 2024. - - Common Stock, $ 0.00001 par value; 300,000,000 shares authorized; 5,879,741 and 2,021,236 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 59 28 Additional Paid-In Capital 61,403,700 55,962,337 Accumulated Comprehensive Loss ( 249,168 ) ( 280,209 ) Accumulated Deficit ( 56,374,829 ) ( 53,176,717 ) Total Stockholders’ Equity 4,779,762 2,505,439 Total Liabilities and Stockholders’ Equity $ 6,427,790 $ 5,179,516 See accompanying Notes to Consolidated Financial Statements. F- 3 IVEDA SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 2025 AND 2024 2025 2024 REVENUE Equipment Sales $ 4,901,748 $ 5,592,395 Service Revenue 378,564 428,244 Other Revenue - - TOTAL REVENUE 5,280,312 6,020,639 COST OF REVENUE 4,007,440 4,719,005 GROSS PROFIT 1,272,872 1,301,634 OPERATING EXPENSES General & Administrative 4,328,968 5,008,587 Research and Development 170,800 363,350 Total Operating Expenses 4,499,768 5,371,937 LOSS FROM OPERATIONS ( 3,226,896 ) ( 4,070,303 ) OTHER INCOME (EXPENSE) Miscellaneous Income (Expense) 33,840 34,323 Interest Income 61,937 113,728 Interest Expense ( 36,509 ) ( 26,183 ) Total Other Income (Expense) 59,268 121,868 LOSS BEFORE INCOME TAXES ( 3,167,628 ) ( 3,948,435 ) BENEFIT (PROVISION) FOR INCOME TAXES ( 30,484 ) ( 32,385 ) NET LOSS $ ( 3,198,112 ) $ ( 3,980,820 ) BASIC AND DILUTED LOSS PER SHARE $ ( 0.88 ) $ ( 1.81 ) WEIGHTED AVERAGE SHARES 3,640,615 2,203,893 See accompanying Notes to Consolidated Financial Statements. F- 4 IVEDA SOLUTIONS, INC. COMPREHENSIVE LOSS For the Year ended December 31, 2025 For the Year ended December 31, 2024 Net Loss $ ( 3,198,112 ) $ ( 3,980,820 ) Other Comprehensive Loss Foreign Currency Translation, Net of Tax 31,041 ( 58,791 ) Comprehensive Loss $ ( 3,167,071 ) $ ( 4,039,611 ) See accompanying Notes to Consolidated Financial Statements . F- 5 IVEDA SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Common Common Stock Additional Paid-in- Accumulated Accumulated Other Comprehensive Total Stockholders’ Stock Amount Capital Deficit (Loss) Equity BALANCE AT December 31, 2023 2,021,236 $ 20 $ 54,065,775 $ ( 49,195,897 ) $ ( 221,418 ) $ 4,648,480 Common Stock for Services 12,500 - 90,000 - - 90,000 Stock Option Compensation - 122,600 - - 122,600 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 625,000 6 1,683,964 - - 1,683,970 Reverse Split fractional shares 149,335 2 ( 2 ) - - - Net Loss - - - ( 3,980,820 ) - ( 3,980,820 ) Comprehensive Loss - - - - ( 58,791 ) ( 58,791 ) BALANCE AT December 31, 2024 2,808,071 $ 28 $ 55,962,337 $ ( 53,176,717 ) $ ( 280,209 ) $ 2,505,439 BALANCE 2,808,071 $ 28 $ 55,962,337 $ ( 53,176,717 ) $ ( 280,209 ) $ 2,505,439 Common Stock for Services 100,000 1 134,999 - - 135,000 Stock Option Compensation - 376,000 - - 376,000 Common Stock Issued in ATM during 2025 2,971,670 30 4,930,364 - - 4,930,394 Net Loss - - - ( 3,198,112 ) - ( 3,198,112 ) Comprehensive Loss - - - - 31,041 31,041 BALANCE AT December 31, 2025 5,879,741 $ 59 $ 61,403,700 $ ( 56,374,829 ) $ ( 249,168 ) $ 4,779,762 BALANCE 5,879,741 $ 59 $ 61,403,700 $ ( 56,374,829 ) $ ( 249,168 ) $ 4,779,762 * 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 17, 2024. See accompanying Notes to Consolidated Financial Statements F- 6 IVEDA SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS DECEMBER 31, 2025 AND 2024 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ ( 3,198,112 ) $ ( 3,980,820 ) Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities Depreciation and Amortization 21,584 31,805 Stock Option Compensation 376,000 122,600 Common Stock issued for Services 135,000 90,000 (Increase) Decrease in Operating Assets Accounts Receivable 1,020,936 ( 996,586 ) Deferred Cost of Goods 390,357 ( 507,308 ) Right of Use Asset 33,725 Inventory ( 87,838 ) 176,395 Other Current Assets 109,048 528 Other Assets 8,229 203,693 Increase (Decrease) in Accounts and Other Payables ( 810,298 ) 439,945 Lease Liability ( 26,132 ) Net Cash Used in Operating Activities ( 2,027,501 ) ( 4,419,748 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property and Equipment - ( 2,608 ) Net Cash Used in Investing Activities - ( 2,608 ) CASH FLOWS FROM FINANCING ACTIVITIES Payments on Short-Term Notes Payable/Debt ( 919,097 ) ( 324,995 ) Proceeds from Short-Term Notes Payable/Debt 651,572 403,249 Proceeds from (Payments to) Long-Term Debt ( 104,763 ) 498,195 Common Stock Issued, net of (Cost of Capital) 4,930,394 1,683,970 Net Cash Provided by Financing Activities 4,558,106 2,260,419 EFFECT OF EXCHANGE RATE CHANGES ON CASH 31,041 ( 48,045 ) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,561,646 ( 2,209,982 ) Cash and Cash Equivalents- Beginning of Period 2,658,300 4,868,282 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 5,219,946 $ 2,658,300 See accompanying Notes to Consolidated Financial Statements. F- 7 IVEDA SOLUTIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED FOR THE YEARS ENDING DECEMBER 31, 2025 AND 2024 2025 2024 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest Paid $ 25,374 $ 15,316 Income Tax Paid $ 28,240 $ 38,544 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Present Value of Right of Use Asset and Lease Obligations on New Lease $ 182,668 $ - See accompanying Notes to Consolidated Financial Statements. F- 8 IVEDA SOLUTIONS, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2025 AND 2024 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Iveda 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. 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. Consolidation Effective April 30, 2011, we completed our acquisition of Sole Vision Technologies (fka MEGAsys and dba Iveda Taiwan), a company based in Taiwan. We consolidate our financial statements with the financial statements of Iveda Taiwan. All intercompany balances and transactions have been eliminated in consolidation. Liquidity 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. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. 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. Basis of Accounting Our consolidated financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. Use of Estimates The 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. Accordingly, 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. Revenue and Expense Recognition The Company applies the provisions of Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers , and all related appropriate guidance. The Company recognizes revenue under the core principle to depict the transfer of control to its customers in an amount reflecting the consideration to which it expects to be entitled. In order to achieve that core principle, the Company applies the following five-step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied. The 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). 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. The 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. F- 9 The Company sells its products and services primarily to municipalities and commercial customers in the following manner: ● 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 of Goods. Revenue for product and software sales without installation is recorded when the product and/or software has been shipped to the customer. Revenue from fixed-price equipment installation contracts, if any, is recognized as the contracts allow for invoicing at various milestones. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements are accounted for as changes in estimates in the current period. Profit incentives are included in revenue when their realization is deemed earned by the contract. ● Iveda 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. The Company 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 agreement. ● Iveda 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. The 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 2025 2024 % Change Years Ended December 31, 2025 2024 % Change Net Sales Source Commercial Enterprises $ 3,283,536 $ 4,675,122 ( 30 )% Distributors 517,561 762,660 ( 32 )% Municipalities 163,544 170,467 ( 4 )% Taiwan Government 1,315,671 319,767 311 % Other - 92,625 ( 100 )% Net Sales Source 5,280,312 6,020,639 ( 12 )% The Company sells and installs video surveillance systems comprised of various components of hardware and software. Comprehensive Loss Comprehensive loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. Our current component of other comprehensive income is the foreign currency translation adjustment. Concentrations Financial instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. Substantially all cash is deposited in three financial institutions, two in the United States and one in Taiwan. At times, amounts on deposit in the United States may be in excess of the FDIC insurance limit. Deposits in Taiwan financial institutions are insured by CDIC (Central Deposit Insurance Corporation) with maximum coverage of NTD 3 million. At times, amounts on deposit in Taiwan may be in excess of the CDIC Insurance limit. F- 10 Revenue from four customers out of approximately 70 total customers represented approximately 63 % of total revenue for the year ended December 31, 2025. 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 companies). 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) Chunghwa Telecom with 18 % 2) SECURITY INTEGRATION & CONSULTANT TECHNOLOGY CO., LTD. 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 %. 78 % 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. No other customers represented greater than 10% of total revenues in years ended December 31, 2025 and 2024. Cash and Cash Equivalents For purposes of the statement of cash flows, we consider all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. The Company’s consolidated financial statements include the results of operations and financial position of its subsidiary located in Taiwan. 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. 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 $ 1,352,166 and $ 1,025,675 of its cash and cash equivalents in Taiwan New Dollars at December 31, 2025 and 2024, respectively. Accounts Receivable We provide an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. For our U.S.-based segment, receivables past due more than 120 days, if any, are considered delinquent. For our Taiwan-based segment, receivables over one year are considered delinquent. Delinquent receivables are written off based on individual credit valuation and specific circumstances of the customer. As of December 31, 2025 and 2024, no allowance for uncollectible accounts was deemed necessary. Other Current Assets Other current assets represent cash paid in advance to vendors for service coverage extending into subsequent periods, advances to suppliers of product and tender deposits placed with local governments and major customers in Taiwan during the bidding process for new proposed projects. Deferred Cost of Goods In Taiwan we ship product to be held at the customer locations in advance of installment per the contract with the customer. 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. Inventories Inventory is stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (“FIFO”) basis. We 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, 2025 and 2024, respectively. Property and Equipment Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over estimated useful lives of three 3 to seven years . Expenditures for routine maintenance and repairs are charged to expense as incurred. Depreciation expense for the years ended December 31, 2025 and 2024 was $ 21,584 and $ 31,805 , respectively. We have a relatively minimal amount of property and equipment, consisting primarily of office equipment. We review the recoverability of the carrying value of long-lived assets using the methodology prescribed in ASC 360 “Property, Plant and Equipment.” We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net operating cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying value of the assets exceeds their fair value. Management determined that there was no indicator of impairment as of December 31, 2025 and 2024. F- 11 Income Taxes Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from sales cut-off, depreciation, deferred rent expense, and net operating losses. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that represents our best estimate of such deferred tax assets that, more likely than not, will be realized. Income tax expense is the tax payable for the year and the change during the year in deferred tax assets and liabilities. We are subject to U.S. federal income tax as well as state income tax. Our U.S. income tax returns are subject to review and examination by federal, state, and local authorities. Our U.S. tax returns for the years 2021 to 2024 are open to examination by federal, local, and state authorities. Our Taiwan tax returns are subject to review and examination by the Taiwan Ministry of Finance. Our Taiwan tax returns for the years 2021 to 2024 are open to examination by the Taiwan Ministry of Finance. Restricted Cash Restricted cash represents time deposits on account to secure short-term bank loans in our Taiwan-based segment. Deferred Revenue Advance payments received from customers on future installation projects are recorded as deferred revenue until such time our performance obligations on the contracts are completed. F- 12 Stock-Based Compensation 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 $ 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. Fair 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. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of December 31, 2025 and December 31, 2024. The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses, and amounts due to related parties. Fair values were assumed to approximate carrying values for these financial instruments because they are short-term in nature and their carrying amounts approximate their fair values or because they are receivable or payable on demand. The carrying values of financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates. New Accounting Standards In November 2024, FASB issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses. The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases of inventory; employee compensation; and depreciation and amortization expense for each caption on the income statement where such expenses are included. The update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. We are currently evaluating the provisions of this guidance and assessing the potential impact on our financial statement disclosures. Other recent accounting pronouncements and guidance issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. F- 13 NOTE 2 Accounts and Other Payables ACCOUNTS AND OTHER PAYABLES SCHEDULE OF ACCOUNTS AND OTHER PAYABLES December 31, 2025 December 31, 2024 Accounts Payable $ 459,308 $ 730,297 Accrued Expenses 479,057 981,769 Deferred Revenue and Customer Deposits 195 36,791 Accounts and Other Payables $ 938,560 $ 1,748,857 NOTE 3 SHORT-TERM AND LONG-TERM DEBT The short-term debt balances were as follows: 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. Due originally in January 2025 and subsequently replaced with a new loan which was repaid in 2025. $ - $ 183,011 Loan from HuaNam Bank at 3.4 % interest rate per annum. Due in July 2026. 159,500 91,505 Loan from ChangHwa Bank at 3 % - 3.3 % interest rate per annum. Paid May 2025. - 152,509 Balance at end of period $ 159,500 $ 427,025 As of December 31, 2025, there was $ 63,694 of restricted cash pledged as security for the Shanghai Commercial Bank short term loan. The Long-term debt balances were as follows: SCHEDULE OF LONG-TERM DEBT Loans from Shanghai Commercial Bank with interest rates 2.1 % per annum due January 2029 (1) $ 393,432 $ 498,195 Current Portion of Long-term debt ( 127,600 ) ( 122,007 ) Balance at end of period $ 265,832 $ 376,188 SCHEDULE OF MATURITY OF LONG TERM DEBT 2026 127,600 2027 127,600 2028 127,600 Thereafter 10,632 Total $ 393,432 (1) 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. Siu and Mr. Cheung, who are both part of Iveda Taiwan’s management team. F- 14 NOTE 4 PREFERRED STOCK We are currently authorized to issue up to 12,500,000 shares of preferred stock, par value $ 0.00001 per share, 1,250,000 shares of which are designated as Series A Preferred Stock and 500 shares of which are designated as Series B Preferred Stock. Our Articles of Incorporation authorize the issuance of shares of preferred stock with designations, rights, and preferences determined from time to time by our Board of Directors. Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the stockholders of our common stock. In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying, or preventing a change in control of our company. NOTE 5 EQUITY Common Stock We 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. 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 own more than 4.99% (or at the election of the investor, 9.99%) of our outstanding common stock immediately following the consummation of the offering. Each of the pre-funded warrants will be exercisable for one share of Common Stock. The pre-funded warrants had an exercise price of $ 0.01 per share, were immediately exercisable and could be exercised at any time until all of the pre-funded warrants issued in the offering were exercised in full. 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. In 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. The 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 . 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 . Restricted Common shares issued for services The 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. NOTE 6 STOCK OPTION PLAN AND WARRANTS Stock Options On January 18, 2010, we adopted the 2010 Stock Option Plan (the “2010 Option Plan”), which allows the Board to grant options to purchase up to 15,625 shares of common stock to directors, officers, key employees, and service providers of our company. In 2011, the 2010 Option Plan was amended to increase the number of shares issuable under the 2010 Option Plan to 375,000 shares. In 2012, 2010 Option Plan was again amended to increase the number of shares issuable under the 2010 Option Plan to 203,125 shares. The shares issuable pursuant to the 2010 Option Plan are registered with the SEC under Forms S-8 filed on February 4, 2010 (No. 333- 164691), June 24, 2011 (No. 333-175143), and December 4, 2013 (No. 333-192655). The 2010 Option Plan expired on January 18, 2020 . As of December 31, 2025 there were 14,778 options outstanding under the 2010 Option Plan. On December 15, 2020, we adopted the Iveda Solutions, Inc. 2020 Plan (the “2020 Plan”). The 2020 Plan had a maximum of 156,250 shares authorized with similar terms and conditions to the 2010 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. 333- 267792). 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. F- 15 As of December 31, 2025 and December 31, 2024, there were 735,737 and 217,056 options outstanding, respectively, under all the option plans. Stock options may be granted as either incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or as options not qualified under Section 422 of the Code. All options are issued with an exercise price at or above the fair market value of the common stock on the date of the grant as determined by our Board of Directors. Incentive stock option plan awards of restricted stock are intended to qualify as deductible performance-based compensation under Section 162(m) of the Code. Incentive Stock Option awards of unrestricted stock are not designed to be deductible to us under Section 162(m). Under the plans, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant. We 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. The fair values of options are determined using the Black-Scholes option-pricing model. 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 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. Stock option transactions during 2025 and 2024 were as follows: SCHEDULE OF STOCK OPTION TRANSACTIONS 2025 2024 Shares Weighted- Average Exercise Price Shares Weighted- Average Exercise Price Outstanding at Beginning of Year 217,056 $ 18.56 162,625 $ 36.01 Granted 535,000 0.84 79,000 1.78 Exercised - - - - Forfeited or Cancelled ( 16,319 ) 22.40 ( 24,569 ) 75.86 Outstanding at End of Year 735,737 5.50 217,056 18.56 Options Exercisable at Year-End 732,612 $ 5.50 214,525 $ 18.74 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. ● Dividends. 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: SCHEDULE OF WEIGHTED-AVERAGE ASSUMPTIONS Year ended December 31, 2025 2024 Expected volatility 138 - 180 % 90 % Expected dividend yield — % — % Expected term (in years) 5.0 - 6.0 5.0 - 6.0 Risk-free interest rate 3.7 % - 4.5 % 4.0 % 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: SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding at December 31, 2025 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Number Exercisable at December 31, 2025 Weighted- Average Exercise Price $ 0.82 - 142.08 738,862 9.2 $ 5.50 735,737 $ 5.50 The fair value of each option 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. The intrinsic value of the outstanding options at December 31, 2025 was $ 10,500 . F- 16 Warrant transactions during 2025 and 2024 were as follows: SCHEDULE OF WARRANT TRANSACTIONS 2025 2024 Shares Weighted- Average Exercise Price Shares Weighted- Average Exercise Price Outstanding at Beginning of Year 1,882,076 $ 9.42 631,737 $ 75.34 Granted - 3.47 1,296,876 3.47 Exercised - - - - Forfeited or Cancelled ( 19,007 ) 37.79 ( 46,537 ) 24.23 Outstanding at End of Year 1,863,069 9.13 1,882,076 9.42 Warrant Exercisable at Year-End 585,200 9.13 585,200 22.59 Weighted-Average Fair Value of Warrants Granted During the Year $ - $ 0.25 Information with respect to warrants outstanding and exercisable at December 31, 2025 is as follows: SUMMARY OF WARRANTS OUTSTANDING AND EXERCISABLE Warrants Outstanding Warrants Exercisable Range of Exercise Prices Number Outstanding at December 31, 2025 Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Number Exercisable at December 31, 2025 Weighted- Average Exercise Price $ 3.44 -$ 34.00 1,863,069 2.0 $ 9.13 1,863,069 $ 9.13 The 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. There was no intrinsic value of the outstanding warrants at December 31, 2025. F- 17 NOTE 7 INCOME TAXES U.S. Federal Corporate Income Tax The Company uses an asset and liability approach for accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. At December 31, 2025, the Company had available Federal and state net operating loss carryforwards to reduce future taxable income. As 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. 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). The Company has adopted FASB guidelines that address the determination of whether lax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the lax benefit from an uncertain lax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. This guidance also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. As of December 31, 2025 and 2024, the Company did not have a liability for unrecognized tax benefits, and no adjustment was required at adoption. The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of December 31, 2025, and 2024, the Company has not accrued interest or penalties related to uncertain tax positions. Additionally, tax years 2021 through 2024 remain open to examination by the major taxing jurisdictions to which the Company is subject. Upon the attainment of taxable income by the Company, management will assess the likelihood of realizing the tax benefit associated with the use of the carryforwards and will recognize the appropriate deferred tax asset at that time. The Company’s effective income tax rate differs from the amount computed by applying the federal statutory income tax rate to loss before income taxes as follows: SCHEDULE OF EFFECTIVE TAX RATE December 31, 2025 December 31, 2024 Income tax benefit at federal statutory rate ( 21.0 )% ( 21.0 )% State income tax benefit, net of federal benefit ( 5.0 )% ( 5.0 )% Change in valuation allowance 26 % 26.0 % Income taxes at effective rate - % - % F- 18 Temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and tax credit and operating loss carryforward that create deferred tax assets and liabilities are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2025 2024 Tax Operating Loss Carryforward $ 10,760,000 $ 9,900,000 Unamortized Research and Development Costs 180,000 207,000 Valuation Allowance ( 10,940,000 ) ( 10,107,000 ) Deferred Tax Assets, Net $ - $ - The valuation allowance increased approximately $ 0.8 million, primarily as a result of the increased net operating losses of our U.S.- based segment. Taiwan (Republic of China) Corporate Tax Sole-Vision Technologies, Inc. is a subsidiary of the Company which is operating in Taiwan as a profit-seeking enterprise. Its applicable corporate income tax rate is 20%. In addition, Taiwan’s corporate tax system allows the government to levy a 10% profit retention tax on undistributed earnings for the prior year. This tax will not be provided if the company distributed the earnings before the ended of the fiscal year. According to the Taiwan corporate income tax (“TCIT”) reporting system, the TCIT sales cut-off base is concurrent with the business tax classified as value-added type (“VAT”) which will be reported to the Ministry of Finance (“MOF”) on a bi-monthly basis. Since the VAT and TCIT are accounted for on a VAT tax basis that recorded all sales on business tax on a VAT tax reporting system, the Company is bound to report the TCIT according to the MOF prescribed tax reporting rules. Under the VAT tax reporting system, sales cut-off does not use the accrual basis but rather on a VAT taxable reporting basis. F- 19 NOTE 8 EARNINGS (LOSS) PER SHARE The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required by ASC No. 260, “Earnings per Share.” Basic earnings per share (“EPS”) is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding. We had net losses for the years ended December 31, 2025 and 2024 and the effect of including dilutive securities in the earnings per common share would have been anti-dilutive for the purpose of calculating EPS. Accordingly, all options, warrants, and shares potentially convertible into common shares were excluded from the calculation of diluted earnings per share for the periods ended December 31, 2025 and 2024. SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED December 31, 2025 December 31, 2024 Basic EPS Net Loss $ ( 3,198,112 ) $ ( 3,980,820 ) Weighted Average Shares 3,640,615 2,203,893 Basic Loss Per Share $ ( 0.88 ) $ ( 1.81 ) For the years ended December 31, 2025 and 2024, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following: SCHEDULE OF BASIC AND DILUTED LOSS PER SHARES SECURITIES December 31, 2025 December 31, 2024 Warrants 1,863,069 1,882,076 Options 738,862 217,016 Total 2,601,931 2,099,092 NOTE 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. 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., 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 . NOTE 10 SEGMENT INFORMATION The Company operates and manages its business as two reportable and operating segments. The Company’s CODM reviews financial information presented and decides how to allocate resources based on net income (loss). 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. F- 20 SCHEDULE OF SEGMENT INFORMATION Consolidated US Taiwan Consolidated US Taiwan December 31, 2025 December 31, 2024 Revenues $ 5,280,312 $ 709,197 $ 4,571,115 $ 6,020,639 $ 869,261 $ 5,151,378 Cost of Goods Sold 4,007,440 545,438 3,462,002 4,719,005 615,010 4,103,995 Gross Profit 1,272,872 163,759 1,109,113 1,301,634 254,251 1,047,383 Operating Expenses Salaries and Payroll Expenses 1,699,049 1,026,934 672,115 1,667,330 967,793 699,537 Pension - - 21,832 21,832 Travel and Entertainment 477,125 412,747 64,378 552,123 483,146 68,977 Stock-based compensation 376,000 376,000 - 122,600 122,600 - Marketing 338,469 338,469 757,736 757,736 Public Company expenses 245,448 245,448 520,966 520,966 - Audit and Accounting 334,264 334,264 312,920 312,920 - Consulting Services 326,339 326,339 412,962 412,962 - Research and Development 170,800 170,800 363,350 363,350 - Software Subscription 84,750 84,750 85,111 85,111 - Insurance 82,973 18,604 64,396 60,873 12,664 48,209 Rent 88,534 43,434 45,100 142,986 101,731 41,255 Office Supplies and Postage - - 34,276 - 34,276 Other Operating Expenses 275,990 111,601 164,389 316,872 215,849 101,023 Total Operating Expenses 4,499,768 3,489,390 1,010,378 5,371,937 4,356,828 1,015,109 Income (Loss) from Operations ( 3,226,896 ) ( 3,325,631 ) 98,735 ( 4,070,303 ) ( 4,102,577 ) 32,274 Interest Income and Other (Expenses), net 59,268 61,659 ( 2,391 ) 121,868 95,330 26,538 Net Income (Loss) before Income Tax $ ( 3,167,628 ) $ ( 3,263,972 ) $ 96,344 $ ( 3,948,435 ) $ ( 4,007,247 ) $ 58,812 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. 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. The net assets (liabilities) for our significant geographic regions are as follows: SCHEDULE OF NET ASSETS LIABILITIES BY GEOGRAPHIC REGIONS Net Assets (Liabilities) For the Year Ended For the Year Ended December 31, 2025 December 31, 2024 United States $ 3,918,970 $ 1,775,554 Republic of China (Taiwan) $ 860,792 $ 729,885 Total Consolidated $ 4,779,762 $ 2,505,439 NOTE 11 SUBSEQUENT EVENTS On 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. The 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 . F- 21