What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-15 compared with 2025-11-14 · 316 added, 532 removed, 747 unchanged (53% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

September 30, 2025

March 31, 2026

December 31, 2025

7 unchanged sentences

Total Current Assets

Property and Equipment, Net

and Equipment, Net

Right of Use Asset, Net

11 unchanged sentences

Preferred Stock, $ 0.00001 par value;

12,500,000 shares authorized, no preferred shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

12,500,000 shares authorized, no preferred shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Common Stock, $ 0.00001 par value;

300,000,000 shares authorized;

4,457,444 and 2,808,071 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

11,594,027 and 5,879,741 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional Paid-In Capital

9 unchanged sentences

For the Three

September 30, 2025

March 31, 2026

For the Three

September 30, 2024

September 30, 2025

September 30, 2024

Equipment Sales (including sales to Iveda Philippines of $ 0 and $ 188,445 for the three and nine months ended September 30, 2025, respectively.

March 31, 2025

Equipment Sales

Service Revenue

6 unchanged sentences

LOSS FROM OPERATIONS

( 1,582,221 )

( 2,549,207 )

OTHER INCOME (EXPENSE)

3 unchanged sentences

Total Other Income (Expense), Net

LOSS BEFORE INCOME TAXES

$ ( 532,831 )

$ ( 793,672 )

$ ( 1,548,782 )

$ ( 2,437,486 )

PROVISION FOR INCOME TAXES

$ ( 221,304 )

$ ( 581,373 )

$ ( 1,579,225 )

$ ( 2,469,950 )

BASIC AND DILUTED LOSS PER SHARE

3 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

For the Three Months ended

September 30, 2025

For the Three Months ended

September 30, 2024

For the Nine months ended

September 30, 2025

For the Nine months ended

September 30, 2024

$ ( 221,304 )

$ ( 581,373 )

For the Three

March 31, 2026

For the Three

March 31, 2025

$ ( 532,831 )

5 unchanged sentences

$ ( 804,552 )

$ ( 1,511,043 )

$ ( 2,496,605 )

accompanying Notes to Unaudited Condensed Consolidated Financial Statements .

6 unchanged sentences

$ ( 280,209 )

Cost of Financing

( 1,289,596 )

Comprehensive Loss

2 unchanged sentences

$ ( 291,089 )

Common Stock for Services

Stock Compensation Expense

Comprehensive Loss

BALANCE AT June 30, 2024

$ ( 51,084,474 )

$ ( 277,027 )

Common Stock Issued in September 2024 offering

Pre-Funded Warrrants – 450,000

Cost of Financing

Reverse Split Fractional shares

Comprehensive Loss

BALANCE AT September 30, 2024

$ ( 51,665,848 )

$ ( 248,072 )

BALANCE AT December 31, 2025

1 unchanged sentence

$ ( 249,168 )

Comprehensive Loss

BALANCE AT March 31, 2025

$ ( 53,970,389 )

$ ( 291,089 )

Sale of Common Stock

Comprehensive Loss

BALANCE AT June 30, 2025

$ ( 54,534,638 )

$ ( 170,765 )

$ ( 54,534,638 )

$ ( 170,765 )

Sale of Common Stock

Stock for Services

Stock Option Compensation

Comprehensive Loss

BALANCE AT September 30, 2025

$ ( 54,755,942 )

$ ( 212,027 )

BALANCE AT March 31, 2026

$ ( 56,907,660 )

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

THE NINE MONTHS ENDING SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)

September 30, 2025

September 30, 2024

THE THREE MONTHS ENDING MARCH 31, 2026 AND 2025 (UNAUDITED)

March 31, 2026

March 31, 2025

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Stock Compensation Expense

Common Stock for Services

Increase in allowance for uncollectible accounts

Changes in operating assets and liabilities

Accounts Receivable

( 1,872,233 )

Deferred Cost of Goods

1 unchanged sentence

Other Current Assets

Increase (Decrease) in Accounts and Other Payables

Increase in Accounts and Other Payables

Lease Liability

Net Cash Used in Operating Activities

( 1,775,080 )

( 3,529,933 )

CASH FLOWS FROM INVESTING ACTIVITIES

9 unchanged sentences

NET DECREASE IN CASH, RESTRICTED CASH AND CASH EQUIVALENTS

( 1,239,071 )

Cash, Restricted Cash and Cash Equivalents- Beginning of Period

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

THE NINE MONTHS ENDING SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)

September 30, 2025

September 30, 2024

THE THREE MONTHS ENDING MARCH 31, 2026 AND 2025 (UNAUDITED)

March 31, 2026

March 31, 2025

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

6 unchanged sentences

TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDING SEPTEMBER 30,

2025 AND 2024 (UNAUDITED)

THE THREE MONTHS ENDING MARCH 31, 2026 AND 2025 (UNAUDITED)

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

11 unchanged sentences

commercial clients worldwide.

Consolidation

April 30, 2011, we completed our acquisition of Sole Vision Technologies (fka MEGAsys and dba Iveda Taiwan), a company based in Taiwan.

2 unchanged sentences

been eliminated in consolidation.

of Presentation

unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2025 and 2024 have been

prepared in accordance with accounting principles generally accepted in the U.S.

(“GAAP”) for interim financial

information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K for scaled disclosures for smaller

reporting companies.

Accordingly, they do not include all the information and footnotes required by GAAP for complete financial

However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in

the opinion of management, necessary for the fair presentation of the Company’s financial position and results of operations.

Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year.

sheet information as of December 31, 2024 was derived from the audited financial statements included in the Company’s

financial statements as of and for the years ended December 31, 2024 and 2023 contained in the Company’s Annual Report on Form

10-K filed with the Securities and Exchange Commission.

These financial statements should be read in conjunction with that

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

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

The Company experienced net losses and

negative operating cash flows during the nine months ended September 30, 2025, and had an accumulated deficit as of that date.

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

September 30, 2025, the Company had cash on hand in the amount of $ 3,298,474 .

Subsequent to September 30, 2025 we raised an additional

$ 2,224,048 net proceeds from the sale of our common shares (See Note 11).

Although we believe we now have a strong cash position after

the subsequent raise and have experienced an overall improvement in our operations that will result in improved cash flow, Management

cannot be certain that its current liquidity will support operations and other future business opportunities from a date of twelve months

from the issuance of this financial statement.

As a result, management has concluded that there is substantial doubt about the Company’s

ability to continue as a going concern.

The accompanying consolidated financial statements do not include any adjustments relating to

the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in

the event the company cannot continue as a going concern.

The Company’s independent registered public accounting firm, in its report

on the Company’s consolidated financial statements for the year ended December 31, 2024, has also expressed substantial doubt about

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

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

operations until it begins generating positive cash flow.

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

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

Even if the Company is able to obtain additional financing,

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

in case of equity financing.

of Accounting

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.

Company recorded a net loss of $ 0.5

million and used cash in operations of $ 0.9

million during the period ended March 31, 2026.

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 $ 5.7

million at March 31, 2026, 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.

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.

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

15 unchanged sentences

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

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

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.

42 unchanged sentences

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

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

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

retail price.

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

The distributor or integrator

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

and rewards of ownership.

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

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

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

The revenues are recorded monthly, if

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

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

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

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

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

all related risks and rewards of ownership of customer receivables.

Accordingly, upon application of steps one through five above,

revenue is recorded when the product is shipped to the distributor or as directed by the distributor consistent with the terms of

the distribution agreement.

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.

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

1 unchanged sentence

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

following table presents our net sales by revenue source for the period presented:

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

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

For the three

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

Net Sales Source

15 unchanged sentences

of the CDIC Insurance limit.

from four customers out of approximately 74 total customers represented approximately 66 % of total revenue for the nine months ended

September 30, 2025.

These specific customers were 1) National Chung Shan Institute of Science and Technology with 28 %, 2) Taiwan Stock

Exchange with 15 %, SECURITY INTEGRATION & CONSULTANT TECHNOLOGY CO., LTD.

with 13 % and Chunghwa Telecom with 10 % (all Taiwan companies).

Revenue from five customers out of 72 total customers represented approximately 76 % of total revenue for the nine months ended September

These specific customers were 1) Security Integration & Consultant Technology CO., LTD.

(Taiwan company) with 19 %, 2) Chicony

Power Technology Co., Ltd.

(Taiwan company) with 16 %, 3) HWACOM Systems Inc.

(Taiwan company) with 15 %, 4) Claro Enterprise Solutions

with 14 % (US Company) and 5) Chunghwa Telecom (Taiwan company) with 13 %.

other customers represented greater than 10 % of total revenues the nine months ended September 30, 2025 and 2024.

of the total accounts receivable at September 30, 2025 was from three customers out of a total of 42 customer accounts receivable accounts.

These specific customers were SECURITY INTEGRATION & CONSULTANT TECHNOLOGY CO., LTD.

( 33 %), Chunghwa Telecom ( 16 %) and National Chung

Shan Institute of Science and Technology ( 25 %) (all Taiwan companies).

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.

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

We had net losses for the nine months ended September 30, 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 September 30, 2025 and 2024.

the nine months ended September 30, 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:

OF ANTI-DILUTIVE SECURITIES

September 30, 2025

September 30, 2024

from two customers out of approximately 74 total customers represented approximately 79 % of total revenue for the three months ended

March 31, 2026.

These specific customers were 1) National Chung Shan Institute of Science and Technology with 63 %, 2) Chunghwa Telecom

with 16 % (both Taiwan companies).

Revenue from two customers out of approximately 70 total customers represented approximately 58 % of

total revenue for the three months ended March 31, 2025.

These specific customers were 1) National Chung Shan Institute of Science and

Technology with 41 % and 2) Chunghwa Telecom with 17 % (both Taiwan companies).

other customers represented greater than 10% of total revenues the three months ended March 31, 2026 and 2025.

of the total accounts receivable at March 31, 2026 was from one customer out of a total of 32 customer accounts receivable accounts.

This specific customers was National Chung Shan Institute of Science and Technology.

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.

and Cash Equivalents

9 unchanged sentences

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

The Company had $ 749,619 and $ 1,025,675 of its cash and cash equivalents in Taiwan New Dollars at September 30, 2025 and December

31, 2024, respectively.

The Company had approximately $ 1 million and $ 1.4 million of its cash and cash equivalents in Taiwan New Dollars at March 31,

2026 and December 31, 2025, respectively.

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

4 unchanged sentences

on individual credit valuation and specific circumstances of the customer.

As of September 30, 2025 and December 31, 2024, no allowance

for uncollectible accounts was deemed necessary.

Cost of Goods

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.

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

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

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

There was no allowance for slow-moving

and obsolete inventory necessary as of September 30, 2025 and December 31, 2024, respectively.

and Equipment

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 nine

months ended September 30, 2025 and 2024 was $ 16,062 and $ 15,806 , respectively.

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

Management determined that there was no indicator of impairment as of September 30, 2025 and December 31, 2024.

Method Investment

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

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

The equity method investments are initially recorded at cost,

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

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

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

not be recoverable.

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

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

Impairment analyses are based

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

During 2023 the Company made

a $ 180,000 investment for a 40% interest in Iveda Phils Joint Venture (located in the Philippines).

Based on Management’s assessment,

the value of its equity method investment was impaired as of December 31, 2023, and as such, recorded an impairment charge of $ 180,000 .

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

During the three months and nine months ended September

30, 2025 we had revenues to Iveda Phils JV of $ 155,750 and 188,445 for the three and nine months ended September 30, 2025, respectively..

are subject U.S.

federal income and state income taxes, as well as Taiwan income taxes.

During the three and nine months ended September

30, 2025 we incurred income tax expense of $ 665 and $ 30,443 , respectively related to our Taiwan operations.

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

the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates.

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.

income tax returns are subject to review and examination by federal, state, and local authorities.

tax returns for the

years 2020 to 2023 are open to examination by federal, local, and state authorities.

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

Our Taiwan tax return for the years 2020

to 2023 are open to examination by the Taiwan Ministry of Finance.

There was no reserve necessary at March 31, 2026 or December

Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’

specific terms and applicable authoritative guidance in ASC 480 and ASC 815.

The assessment considers whether the instruments are freestanding

financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all

of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own

Common Stock and whether the instrument holders could potentially require net cash settlement in a circumstance outside of the Company’s

control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted

at the time of warrant issuance and, for liability-classified warrants, at each reporting period end date while the warrants are outstanding.

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

13 unchanged sentences

affect compensation expense recorded in future periods.

We recognized $ 12,000 and $ 0 of stock-based compensation expense for the three

months ended March 31, 2026 and 2025, respectively, related to the amortization of stock options.

Value of Financial Instruments

7 unchanged sentences

its own assumptions.

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

30, 2025 and December 31, 2024.

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

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

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

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

2026 and 2025.

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

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

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

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

The carrying values of financing obligations

approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.

Accounting Standards

18 unchanged sentences

ACCOUNTS AND OTHER PAYABLES

SCHEDULE OF ACCOUNTS AND OTHER PAYABLES

September 30, 2025

OF ACCOUNTS AND OTHER PAYABLES

March 31, 2026

December 31, 2025

1 unchanged sentence

Accrued Expenses

Customer Deposits

Deferred Revenue and Customer Deposits

Accounts and Other Payables

2 unchanged sentences

SCHEDULE OF SHORT-TERM DEBT

September 30, 2025

March 31, 2026

December 31, 2025

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

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

Loan from Shanghai Commercial Bank at 3.1 %- 3.2 %

interest rate per annum.

Fully paid off in 2025.

Loan from HuaNam Bank at 3.45% interest rate per annum.

Due in July 2026.

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

Fully paid off in 2025.

Loan from HuaNam Bank at 3.45 % interest rate per annum.

Due in July 2026.

Balance at end of period

of September 30, 2025 and December 31, 2024, there was $ 32,802 and $ 29,013 , respectively, of restricted cash pledged as security for

the Shanghai Commercial Bank short term loan.

The Company repaid the outstanding loan balance during

the period ended March 31, 2026, and there are no further obligations due to this bank.

Long-term debt balances were as follows:

4 unchanged sentences

Balance at end of period

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

The term for the revolving loan is 1

year (and was fully paid off as of September 30, 2025) and for the term loan is 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 short-term Shanghai Commercial Bank loan is 75 %

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

by saving deposit security.

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).

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

The 5 year term loan requires monthly payments including interest

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

The guarantors of this loan are Mr.

Cheung, who are both part of Iveda Taiwan’s

management team.

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

As of March 31, 2026 ,

and December 31, 2025, there was $ 62,488 and $ 63,694 , respectively, of restricted cash pledged as security for the Shanghai Commercial

Bank long term loan.

4 PREFERRED STOCK

9 unchanged sentences

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

5 COMMON STOCK

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

17 unchanged sentences

for any of our securities.

4, 2024, We and a certain institutional investor (the “Investor”) entered into a securities purchase agreement (the “Securities

Purchase Agreement”) pursuant to which the Company agreed to sell and issue to the Investor in a registered direct offering (the

(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 (the “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 the Company’s outstanding common stock immediately following the consummation of this Offering.

of the Pre-Funded Warrants were exercisable for one share of Common Stock.

The Pre-Funded Warrants had an exercise price of $ 0.008 per

share, were immediately exercisable, and all of the Pre-Funded Warrants were exercised in 2024.

The Offering was made pursuant to an effective

shelf registration statement on Form S-3 (File No.

333-276676) that was filed with the Securities and Exchange Commission (the “SEC”)

on January 24, 2024 and declared effective by the SEC on February 7, 2024.

During 2025 we filed a

Prospectus Supplement to the Prospectus dated January 24, 2024 to issue up to $ 5,082,431 ,

from time to time through or to our sales agent, H.C.

Wainwright & Co.

(the “Agent”).

These sales,were made pursuant

to the terms of an At Market Issuance Sales Agreement, or the Sales Agreement, between us and the Agent (the “Sales

As of September 30, 2025 we had completed the sale of 1,599,383

shares of common stock with net proceeds of $ 2,706,346 .

See Note 11 Subsequent Events for October 2025 disclosure of additional sales.

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.

Net proceeds to the Company after

the payment of all costs was $ 1.6 Million.

The Offering included (i) 5,259,999

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

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

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

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

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

shares of Common Stock.and accompanying Series X Warrant.

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

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

Pre-Funded Warrants have been exercised in full.

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

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

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

All of the pre-funded warrants were exercised

during the period ended March 31, 2026 resulting in an aggregate issuance of 5,714,286 shares of common stock from the offering.

In addition, the Company issued two

year placement agent warrants to purchase 400,000

shares of common stock at an exercise price of $ 0.4375

6 STOCK OPTION PLANS

9 unchanged sentences

The 2010 Option Plan expired on January 18, 2020 .

As of September 30, 2025 there

As of March 31, 2026 there

were 14,308 options outstanding under the 2010 Option Plan and as of December 31, 2025 there were 14,778 options outstanding under the

7 unchanged sentences

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.

of September 30, 2025 and December 31, 2024, there were 221,756 and 217,056 options outstanding, respectively, under all the option plans.

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 March 31, 2026

there were 717,834 options outstanding under the 2020 Option Plan.

As of December 31, 2025 there were 720,959 options outstanding under

the 2020 Option Plan.

of March 31, 2026 and December 31, 2025, there were 732,142 and 735,737 options outstanding, respectively, under all the option plans.

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

6 unchanged sentences

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

All non-qualified options are generally issued with an exercise

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

Options may be

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

Vesting schedules vary

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

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

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.

option transactions during nine months ended September 30, 2025 were as follows:

SCHEDULE OF STOCK OPTION TRANSACTIONS

September 30, 2025

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

the three months ended March 31, 2026, the Company repriced 535,000

which resulted in an incremental compensation cost of $ 12,000 that was recorded during the period.

option transactions during three months ended March 31, 2026 were as follows:

OF STOCK OPTION TRANSACTIONS

March 31, 2026

Exercise Price

3 unchanged sentences

Options Exercisable at Period-End

the nine months ended September 30, 2025 the Company granted options to acquire 10,000 shares of our common stock with a fair value of

$ 16,573 or based on a Black-Scholes valuation model.

During the nine month periods ended September 30, 2025 and 2024 the Company recognized

$ 0 and $ 25,600 of compensation cost relating to the vesting of options.

with respect to stock options outstanding and exercisable at September 30, 2025 is as follows:

SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE AND EXERCISABLE EXERCISE PRICE RANGE

the three months ended March 31, 2026 and 2025 the Company recognized $ 12,000 and $ 0 of compensation cost relating to the vesting of

OF STOCK OPTION OUTSTANDING AND EXERCISABLE

Options Outstanding

Options Exercisable

Exercise Prices

Outstanding at

September 30, 2025

Average Remaining

Exercise Price

Exercisable at

September 30, 2025

Exercise Price

0.29 - 142.08

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.

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 NASDAQ 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.

to the lack of historical exercise history, the expected term of the Company’s stock options has been determined by calculating

the midpoint of the contractual term of the options and the weighted-average vesting period.

Expected Volatility.

The expected stock price volatility assumption was determined by examining the historical volatilities for industry

peers, as the Company did not have any trading history for the common stock.

The Company will continue to analyze the historical stock

price volatility and expected term assumption as more historical data for the common stock becomes available.

Risk-Free Interest Rate.

The risk-free interest rate assumption is based on the U.S.

Treasury instrument whose term was consistent with

the expected term of the Company’s stock options.

The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in

the foreseeable future.

Consequently, an expected dividend yield of zero was used.

fair value of options granted was estimated using the Black-Scholes valuation model using the following assumptions for the three months

ended March 31, 2026:

OF WEIGHTED-AVERAGE ASSUMPTIONS

Expected Life

Three months ended

March 31, 2026

Expected volatility

Expected dividend yield

Expected term (in years)

Risk-free interest rate

transactions during the nine months ended September 30, 2025 were as follows:

There was no intrinsic value of the outstanding options at March 31, 2026.

transactions during the Three Months ended March 31, 2026 were as follows:

SCHEDULE OF WARRANT TRANSACTIONS

September 30, 2025

For the Three Months ended

March 31, 2026

Weighted-Average

5 unchanged sentences

Weighted-Average Fair Value of Warrants Granted During the Period

with respect to warrants outstanding and exercisable at September 30, 2025 is as follows:

with respect to warrants outstanding and exercisable at March 31, 2026 is as follows:

SUMMARY OF WARRANTS OUTSTANDING AND EXERCISABLE

3 unchanged sentences

Outstanding at

September 30, 2025

March 31, 2026

Average Remaining Contractual

1 unchanged sentence

Exercisable at

September 30, 2025

March 31, 2026

Exercise Price

$ 0.35 -$ 34.00

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

weighted-average assumptions used for options granted.

of September 30, 2025 there were 1,863,069 outstanding.

For the nine months ended September 30, 2025 there were no warrants granted and

19,007 warrants cancelled.

Company accounts for its leases in accordance with the guidance of ASC 842, Leases .

The Company determines whether a contract

is, or contains, a lease at inception.

Right-of-use assets represent the Company’s right to use an underlying asset during the

lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over

the lease term.

The Company uses its incremental borrowing rate based on the information available at lease commencement in determining

the present value of unpaid lease payments.

In 2025, the Company entered into a long-term non-cancellable lease agreement for its facility that requires aggregate average

monthly payments of $ 4,540

beginning March 2025 through February 2029.

On the date of the lease, the Company determined that the value of the new right of use

asset and lease liability was $ 182,668 ,

respectively, using a discount rate of 8 %.

During the period ended September 30, 2025, the Company reflected amortization of the right of use assets of $ 23,405

related to the lease, resulting in a net asset balance of $ 159,263

as of September 30, 2025.

During the period ended September 30, 2025, the Company made combined aggregate payments of $ 33,050

related to these leases, of which $ 15,267 was reflected as a reduction in the lease liabilities.

As of September 30, 2025 the lease

liability amounted to $ 167,413 .

There was no intrinsic value of the outstanding warrants at March 31, 2026.

8 EARNINGS (LOSS) PER SHARE

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

We had net losses for the three months ended March 31, 2026 and 2025 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

March 31, 2026 and 2025.

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

March 31, 2026

March 31, 2025

$ ( 532,831 )

$ ( 793,672 )

Weighted Average Shares

Basic Loss Per Share

the three months ended March 31, 2026 and 2025, 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

March 31, 2026

March 31, 2025

9 COMMITMENTS AND CONTINGENCIES

5 unchanged sentences

Legal expenses associated with the contingency are expensed as incurred.

September 13, 2024 Aegis Capital Corp.

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

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

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

The Company rejects the Plaintiff’s

claims that it is due the 7% plus expenses in the PPA and asserts that the PAA had been terminated on August 15, 2024 due to the plaintiff’s

non-performance and that the plaintiff is not entitled to any fees in the offering since it raised none of the funds in the offering.

The parties have agreed to a mutually agreeable settlement amount to cancel the action which has been provided for in the accompanying September 30, 2025 financial statements.

to certain contracts with Chicony Power Technology Co., Ltd., Shihlin Electric & Engineering Corporation, National Chung Shan Institute

1 unchanged sentence

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

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

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

31, 2026 is $ 361,953 .

10 unchanged sentences

SCHEDULE OF SEGMENT INFORMATION

Three Months Ended September 30, 2025

Three Months Ended September 30, 2024

Cost of Goods Sold

Operating Expenses

Salaries and Payroll Expenses

Travel and Entertainment

Public Company expenses

Audit and Accounting

Research and Development

Other operating expenses

Total Operating Expenses

Loss (Income) from Operations

Interest Income and Other (Expenses), net

Net loss before Income Tax

Income Tax Expense

$ ( 221,304 )

$ ( 514,472 )

$ ( 581,373 )

$ ( 796,668 )

Nine Months Ended September 30, 2025

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

Cost of Goods Sold

7 unchanged sentences

Total Operating Expenses

Loss (Income) from Operations

( 1,582,222 )

( 2,123,591 )

( 2,549,209 )

( 3,011,480 )

Income (Loss) from Operations

Interest Income and Other (Expenses), net

Net loss before Income Tax

$ ( 532,831 )

2 unchanged sentences

$ ( 847,874 )

Income Tax Expense

$ ( 1,579,225 )

$ ( 2,088,457 )

$ ( 2,469,950 )

$ ( 2,931,540 )

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

10 unchanged sentences

SCHEDULE OF REVENUES BY GEOGRAPHIC REGIONS

Nine months ended

Three Months ended

March 31, 2026

March 31, 2025

United States

3 unchanged sentences

SCHEDULE OF NET ASSETS LIABILITIES BY GEOGRAPHIC REGIONS

December 31, 2024

Net Assets (Liabilities)

March 31, 2026

December 31, 2025

1 unchanged sentence

Republic of China (Taiwan)

Republic of China (Taiwan) [Member]

of China (Taiwan) [Member]

Total Consolidated

5 unchanged sentences

that existed at the balance sheet date.

Company sold 1,373,809

shares of common stock in October 2025 for net proceeds of $ 2,224,048

via the ATM with H.C.

Wainwright effectively closing out the February 27, 2025 S-3 prospectus supplement.

Financial Information.

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

47 unchanged sentences

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

Search (No Database Required)

Recognition (from a Database)

Plate Recognition (100+ Countries), includes make and model

Health Analytics (Facemask Detection)

and Barcode Detection

Detection – Vehicle/Person wrong direction detection

Vehicle/Person

Loitering Detection

Parking Detection

Object Search

Face Search (No Database

Face Recognition (from

License Plate Recognition

(100+ Countries), includes make and model

Intrusion Detection

Weapon Detection

Fire Detection

People Counting

Vehicle Counting

Temperature Detection

Public Health Analytics

(Facemask Detection)

QR and Barcode Detection

Live Camera View

Live Tracking

Abnormality Detection –

Vehicle/Person wrong direction detection

Vehicle/Person Loitering

Fall Detection

Illegal Parking Detection

Heatmap Generation

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

54 unchanged sentences

Our smart pole offering is also ideal for:

or large-scale city deployments

and Improving City Services

Emergency Response Times

Hazard Protection

and Improving Air Quality

Monitoring and Mobility as a Service

Analytics and Monetization Opportunities

Government or large-scale

city deployments

Supporting and Improving

City Services

Reducing Emergency Response

Crime& Hazard Protection

Monitoring and Improving

Sound Detection

Traffic Monitoring and

Mobility as a Service

Data Analytics and Monetization

Opportunities

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

1 unchanged sentence

in multiple industries for uses such as:

and Maintenance Exams:

vumastAR has the power to assist with critical measuring of carcinogenic chemical compound levels, electrical

wiring, and welding inspections.

and Line Work:

Quality and Maintenance

vumastAR has the power to assist with critical measuring of carcinogenic chemical compound levels, electrical wiring,

and welding inspections.

Factory and Line Work:

Fast and accurate machine recognition enables itemized counting, inventory audits, and assembly kitting.

Accurately identify and quantify medication, greatly reducing the manual labor of counting pills while eliminating human error.

Detect defects and anomalies for improved accuracy, increasing the bottom line by actively reducing lost revenue incurred

from manual mistakes.

identify and quantify medication, greatly reducing the manual labor of counting pills while eliminating human error.

Supply Chain:

defects and anomalies for improved accuracy, increasing the bottom line by actively reducing lost revenue incurred from manual mistakes.

Manufacturing:

Digitalize meter and gauge reading and monitoring, as well as part number identification, with the ability to turn analog information

into digital data

meter and gauge reading and monitoring, as well as part number identification, with the ability to turn analog information into digital

Transportation:

Enhance safety and security for operations including loading and unloading tanker trucks, protecting both personnel and products/equipment.

Ensure correct item identification and organization, providing increased accuracy for retail checkout and product categorization,

ultimately impacting revenue streams.

safety and security for operations including loading and unloading tanker trucks, protecting both personnel and products/equipment.

Ensure correct

item identification and organization, providing increased accuracy for retail checkout and product categorization, ultimately impacting

revenue streams.

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

37 unchanged sentences

geographic data and analysis report

8 (multiply redundant)

29.76″ / 756 mm

Diagonal Footprint:

14.1lbs / 6.4 Kg

Beaufort scale – 6

Dual RGB, IR/thermal

5G/4G LTE and 2.4G Wi-Fi

Wind tolerance:

Camera sensor:

5G/4G LTE and

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

57 unchanged sentences

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

of Operations for the Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

of Operations for the Three Months Ended March 31, 2026 Compared with the Three Months Ended March 31, 2025

table below sets forth the Net Revenue, Cost of Goods Sold, Operating Expenses, Other Income and Expenses, Tax Expense and Net Income

by segment for each of the respective periods and a comparison period over period.

of Three Months ended

30, 2025 and 2024

of Goods Sold

Operating Expenses

Salaries and Payroll Expenses

Travel and Entertainment

Public Company expenses

Audit and Accounting

Research and Development

Other operating

Operating Expenses

(Income) from Operations

Interest Income

and Other (Expenses), net

loss before Income Tax

Income Tax Expense

decrease in revenue for the three months ended September 30, 2025 compared with the same period in 2024 is attributable primarily to

decreased equipment sales from Iveda Taiwan as a result of delivery timing related to long-term government contracts.

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

Three Months Ended March 31, 2026

Compared to Three Months Ended March 31, 2025

Cost of Goods Sold

Total Operating Expenses

Income (Loss) from Operations

Interest Income and Other (Expenses), net

increase in revenue for the three months ended March 31, 2026 compared with the same period in 2025 is attributable primarily to increased

equipment sales from Iveda Taiwan as a result of delivery timing related to long-term government contracts.

increase in overall gross margin was primarily attributed to the higher margin contract sales in Taiwan.

net decrease in operating expenses in the three months ended September 30, 2025 compared with the same period in 2024 is due primarily

to no re-audit and general operation expenses in the US and Taiwan based operations during this period.

net decrease in operating expenses in the three months ended March 31, 2026 compared with the same period in 2025 is due primarily to

reduction in general operation expenses in the US based operations during this period.

majority of the decrease in loss from operations was primarily due to increased gross margins and reduction in operating expenses.

decrease in net loss was primarily due to a reduction in operating expenses for the three months ended September 30, 2025 compared to

the same period in 2024.

of Operations for the Nine months ended September 30, 2025 Compared with the Nine months ended September 30, 2024

table below sets forth the Net Revenue, Cost of Goods Sold, Operating Expenses, Other Income and Expenses, Tax Expense and Net Income

by segment for each of the respective periods and a comparison period over period.

Nine Months Ended

September 30, 2025

Nine Months Ended

September 30, 2024

Comparison of Six Months ended

June 30, 2025 and 2024

of Goods Sold

Operating Expenses

Salaries and Payroll Expenses

Travel and Entertainment

Public Company expenses

Audit and Accounting

Research and Development

Other operating

Operating Expenses

(Income) from Operations

Interest Income

and Other (Expenses), net

loss before Income Tax

Income Tax Expense

$ (1,579,224 )

$ (2,088,457 )

$ (2,469,950 )

$ (2,931,540 )

increase in revenue for the nine months ended September 30, 2025 compared with the same period in 2024 is attributable primarily to increased

equipment sales from Iveda Taiwan as a result of delivery timing related to long-term government contracts and increased US revenues

through its distributors.

overall gross margin had a slight increase attributed to the higher margin contract sales in the US and Taiwan.

net decrease in operating expenses in the nine months ended September 30, 2025 compared with the same period in 2024 is due primarily

to a reduction in R&D expense in the US and no significant investor relations campaigns in the US based operations during this period.

majority of the decrease in loss from operations was primarily due to increased revenues and related gross margins and reduction in operating

decrease in net loss was primarily due to a reduction in operating expenses for the nine months ended September 30, 2025 compared to

the same period in 2024.

decrease in net loss was primarily due to a reduction in operating expenses for the three months ended March 31, 2026 compared to the

same period in 2025.

and Capital Resources

of September 30, 2025, we had cash and cash equivalents of $3.3 million compared to $2.7 million as of December 31, 2024.

This increase

in our cash and cash equivalents for the nine months ended September 30, 2025 is related to the sale of common stock offset by the operating

losses during the nine months ended September 30, 2025.

There are no legal or economic factors that materially impact our ability to

transfer funds between our U.S.-based and Taiwan-based segments.

cash used in operating activities during the nine months ended September 30, 2025 was ($1.8) million compared to ($3.5) million net cash

used during the nine months ended September 30, 2024.

Net cash used in operating activities for the nine months ended September 30, 2025

of March 31, 2026, we had cash and cash equivalents of $5.7 million compared to $5.2 million as of December 31, 2025.

This increase in

our cash and cash equivalents for the three months ended March 31, 2026 is related to the sale of common stock offset by the operating

losses during the three months ended March 31, 2026.

There are no legal or economic factors that materially impact our ability to transfer

funds between our U.S.-based and Taiwan-based segments.

cash used in operating activities during the three months ended March 31, 2026 was ($0.9) million compared to ($0.1) million net cash

used during the three months ended March 31, 2025.

Net cash used in operating activities for the t hree months ended March 31,

2026 consisted primarily of the net loss of ($0.5) million.

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

Net cash used by operating activities for the three months ended March 31,

2025 consisted primarily of the net loss of ($0.8) million.

cash used in investing activities for the three months ended September 30, 2025 and 2024 were negligible.

cash provided by financing activities for the nine months ended September 30, 2025 were $2.4 million compared with $2.3 million provided

during the nine months ended September 30, 2024.

Net cash provided by financing activities in 2025 included $2.7 million from the sale

of stock via an ATM managed by H.C.Wainwright as compared to $1.8 million proceeds from the sale of stock in a direct offering during

the nine months ended September 30, 2024.

cash used in investing activities for the three months ended March 31, 2026 and 2024 were negligible.

cash provided by financing activities for the three months ended March 31, 2026 were $1.4 million compared with $0 million provided

during the three months ended March 31, 2025.

Net cash provided by financing activities in 2026 included $1.6 million from the sale of

stock in a direct offering managed by H.C.Wainwright.

have experienced significant operating losses since our inception.

57 unchanged sentences

For our U.S.-based segment,

we had no doubtful accounts receivable allowances for the nine months ended September 30, 2025 and year ended December 31, 2024.

our Taiwan-based segment, we set up no doubtful accounts receivable allowances for the nine months ended September 30, 2025 and year

ended December 31, 2024.

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

of the customer contracts and past experience with similar customers.

Delinquent receivables are written off based on individual credit

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

we had no doubtful accounts receivable allowances for the Three Months ended March 31, 2026 and year ended December 31, 2025.

Taiwan-based segment, we set up no doubtful accounts receivable allowances for the Three Months ended March 31, 2026 and year ended December

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

contracts and past experience with similar customers.

Delinquent receivables are written off based on individual credit valuation and

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

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

10 unchanged sentences

if we had engaged in such relationships.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

are a smaller reporting company as defined by 17 C.F.R.

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements