What changed in this filing

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Item 1. Financial Statements

2026-08-14 compared with 2026-05-15 · 325 added, 200 removed, 863 unchanged (38% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

March 31, 2026

June 30, 2026

December 31, 2025

7 unchanged sentences

Total Current Assets

and Equipment, Net

Property 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 March 31, 2026 and December 31, 2025, respectively

12,500,000 shares authorized, no preferred shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Common Stock, $ 0.00001 par value;

300,000,000 shares authorized;

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

12,519,027 and 5,879,741 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional Paid-In Capital

9 unchanged sentences

For the Three

March 31, 2026

June 30, 2026

For the Three

March 31, 2025

June 30, 2025

June 30, 2026

June 30, 2025

Equipment Sales

7 unchanged sentences

LOSS FROM OPERATIONS

( 1,275,825 )

( 1,367,918 )

OTHER INCOME (EXPENSE)

3 unchanged sentences

Total Other Income (Expense), Net

LOSS BEFORE INCOME TAXES

$ ( 679,373 )

$ ( 534,471 )

$ ( 1,212,204 )

$ ( 1,328,143 )

PROVISION FOR INCOME TAXES

$ ( 793,469 )

$ ( 564,249 )

$ ( 1,326,300 )

$ ( 1,357,921 )

BASIC AND DILUTED LOSS PER SHARE

4 unchanged sentences

For the Three

March 31, 2026

June 30, 2026

For the Three

March 31, 2025

June 30, 2025

June 30, 2026

June 30, 2025

$ ( 793,469 )

$ ( 564,249 )

$ ( 1,326,300 )

$ ( 1,357,921 )

Other Comprehensive Loss

3 unchanged sentences

$ ( 443,925 )

$ ( 1,340,354 )

$ ( 1,248,477 )

accompanying Notes to Unaudited Condensed Consolidated Financial Statements .

9 unchanged sentences

( 53,970,389 )

Sale of Common Stock

Comprehensive Loss

BALANCE AT June 30, 2025

$ ( 54,534,638 )

$ ( 170,765 )

BALANCE AT December 31, 2025

6 unchanged sentences

( 56,907,660 )

Sale of Common Stock, warrant exercise

Common Stock for Services

Comprehensive Loss

BALANCE AT June 30, 2026

$ ( 57,701,129 )

$ ( 263,222 )

accompanying Notes to Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

March 31, 2026

March 31, 2025

THE SIX MONTHS ENDING JUNE 30, 2026 AND 2025 (UNAUDITED)

June 30, 2026

June 30, 2025

CASH FLOWS FROM OPERATING ACTIVITIES

4 unchanged sentences

Stock Compensation Expense

Stock Issued for Services

Increase in allowance for uncollectible accounts

7 unchanged sentences

Net Cash Used in Operating Activities

( 2,364,394 )

( 1,458,074 )

CASH FLOWS FROM INVESTING ACTIVITIES

9 unchanged sentences

NET DECREASE IN CASH, RESTRICTED CASH AND CASH EQUIVALENTS

( 1,031,866 )

Cash, Restricted Cash and Cash Equivalents- Beginning of Period

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

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

March 31, 2026

March 31, 2025

THE SIX MONTHS ENDING JUNE 30, 2026 AND 2025 (UNAUDITED)

June 30, 2026

June 30, 2025

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

6 unchanged sentences

TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

THE THREE AND SIX MONTHS ENDING JUNE 30, 2026 AND 2025 (UNAUDITED)

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

16 unchanged sentences

been eliminated in consolidation.

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.

Company recorded a net loss of $ 1.3 million and used cash in operations of $ 2.4 million during the period ended June 30, 2026.

2025, and subsequently, the Company took significant steps to raise capital to fund operations, and to reduce its historical operating

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 $ 4.8 million at June 30, 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

83 unchanged sentences

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.

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

The revenues are recorded annually,

4 unchanged sentences

For the three

March 31, 2026

March 31, 2025

June 30, 2026

For the three

June 30, 2025

June 30, 2026

June 30, 2025

Net Sales Source

2 unchanged sentences

Taiwan Government

Net Sales Source

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

10 unchanged sentences

of the CDIC Insurance limit.

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

March 31, 2026.

from three customers out of approximately 74 total customers represented approximately 72 % of total revenue for the six months ended

June 30, 2026.

These specific customers were 1) National Chung Shan Institute of Science and Technology with 41 %, 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.

with 17 % and Security Integration & Consultant Technology Co., LTD.

with 14 % (all Taiwan companies).

Revenue from two customers out

of approximately 70 total customers represented approximately 52 % of total revenue for the six months ended June 30, 2025.

These specific

customers were 1) National Chung Shan Institute of Science and Technology with 31 % and 2) Taiwan Stock Exchange with 21 % (both Taiwan

other customers represented greater than 10% of total revenues the six months ended June 30, 2026, and 2025.

of the total accounts receivable at June 30, 2026 was from four customers out of a total of 32 customer accounts receivable accounts.

These specific customers included US customer Claro Enterprise Systems at 28 %, Taiwan customers;

Chunghwa Telecom at 27 %, MiTAC Advance

Technology Corp.

at 20 % and HWACOM Systems Inc.

Our accounts receivable 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 approximately $ 1 million and $ 1.4 million of its cash and cash equivalents in Taiwan New Dollars at March 31,

The Company had approximately $ 1 million and $ 1.4 million of its cash and cash equivalents in Taiwan New Dollars at June 30,

2026, and December 31, 2025, respectively.

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.

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, if any, are considered delinquent.

Delinquent receivables are written off based

on individual credit valuation and specific circumstances of the customer.

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

receivables are written off based on individual credit valuation and specific circumstances of the customer.

As of June 30, 2026, we

had a reserve for doubtful collections of $ 20,000 and no reserve necessary at December 31, 2025.

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

23 unchanged sentences

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.

months ended June 30, 2026 and 2025 and we recognized $ 12,000 and $ 0 of stock-based compensation expense for the six months ended June

30, 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 March 31,

2026 and 2025.

value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of June 30, 2026

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.

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.

Accounting Standards

18 unchanged sentences

ACCOUNTS AND OTHER PAYABLES

OF ACCOUNTS AND OTHER PAYABLES

March 31, 2026

SCHEDULE OF ACCOUNTS AND OTHER PAYABLES

June 30, 2026

December 31, 2025

6 unchanged sentences

SCHEDULE OF SHORT-TERM DEBT

March 31, 2026

June 30, 2026

December 31, 2025

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

Due in July 2026.

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

Due in July 2026.

from ChangHwa Bank at 3.3% interest rate per annum.

Due in Aug 2026.

from ChangHwa Bank at 3.3 % interest rate per annum.

Due in Aug 2026 .

Loans from Shanghai Bank at 3.2 %

interest rate per annum.

in January, 2027 .

Loan from HuaNam Bank at 3.45 %

interest rate per annum.

in July 2026 .

Balance at end of period

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:

1 unchanged sentence

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

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

Loans from Shanghai Commercial Bank with interest rates 2.1 %

per annum due

January 2029 (1)

Current Portion of Long-term debt

Balance at end of period

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

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

The term for the revolving loan is 1

year and for the term loan is 5

year term loan requires monthly payments including interest

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

1 unchanged sentence

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.

of June 30, 2026, and December 31, 2025, there was $ 63,001 and $ 63,694 , respectively, of restricted cash pledged as security for the

Shanghai Commercial Bank long term loan.

The Company repaid the outstanding loan balance during the period ended June 30, 2026, and there are no further obligations

due to this bank.

4 PREFERRED STOCK

28 unchanged sentences

for any of our securities.

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

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

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.

addition, the Company issued two year placement agent warrants to purchase 400,000 shares of common stock at an exercise price of $ 0.4375

The Company issued 100,000 shares of common stock

for services values at $ 58,000 during the six months ended June 30, 2026.

June 16, 2026, warrant holders exercised 825,000

of the series X warrants at $ 0.35

per warrant resulting in net proceeds to the Company of $ 272,863 .

6 STOCK OPTION PLANS

9 unchanged sentences

The 2010 Option Plan expired on January 18, 2020 .

As of March 31, 2026 there

As of June 30, 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

9 unchanged sentences

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

As of June 30, 2026

there were 716,584 options outstanding under the 2020 Option Plan.

1 unchanged sentence

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.

of June 30, 2026 and December 31, 2025, there were 730,892 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.

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

alternate terms are specified at grant.

All non-qualified options are generally issued with an exercise

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

Options may be

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

Vesting schedules vary

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

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

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

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

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

The estimated fair value of options

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

During the six months ended June 30, 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 six months ended June 30, 2026 were as follows:

SCHEDULE OF STOCK OPTION TRANSACTIONS

June 30, 2026

Weighted-Average

Exercise Price

3 unchanged sentences

Options Exercisable at Period-End

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

the six months ended June 30, 2026 and 2025 the Company recognized $ 12,000 and $ 0 of compensation cost relating to the vesting of options.

SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE

Options Outstanding

1 unchanged sentence

Outstanding at

June 30, 2026

Weighted- Average

Exercisable at

June 30, 2026

0.29 - 142.08

19 unchanged sentences

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

Three months ended

March 31, 2026

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

ended June 30, 2026:

SCHEDULE OF WEIGHTED-AVERAGE ASSUMPTIONS

Six months ended

June 30, 2026

Expected volatility

2 unchanged sentences

Risk-free interest rate

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:

was no intrinsic value of the outstanding options at June 30, 2026.

transactions during the six months ended June 30, 2026 were as follows:

SCHEDULE OF WARRANT TRANSACTIONS

For the Three Months ended

March 31, 2026

For the Six Months ended

June 30, 2026

Weighted-Average

5 unchanged sentences

Weighted-Average Fair Value of Warrants Granted During the Period

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

with respect to warrants outstanding and exercisable at June 30, 2026 is as follows:

SUMMARY OF WARRANTS OUTSTANDING AND EXERCISABLE

3 unchanged sentences

Outstanding at

March 31, 2026

Average Remaining Contractual

June 30, 2026

Weighted-Average Remaining

Weighted-Average

Exercise Price

Exercisable at

March 31, 2026

June 30, 2026

Weighted-Average

Exercise Price

$ 0.35 -$ 34.00

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

was no intrinsic value of the outstanding warrants at June 30, 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.

We had net losses for the three months ended June 30, 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 June

30, 2026 and 2025.

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

March 31, 2026

March 31, 2025

For the three

June 30, 2026

For the three

June 30, 2025

June 30, 2026

June 30, 2025

$ ( 793,469 )

$ ( 564,249 )

$ ( 1,326,300 )

$ ( 1,357,921 )

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

the six months ended June 30, 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.

1 unchanged sentence

SCHEDULE OF BASIC AND DILUTED LOSS PER SHARES SECURITIES

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

9 COMMITMENTS AND CONTINGENCIES

8 unchanged sentences

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 March

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

30, 2026, is $ 349,621 .

10 unchanged sentences

SCHEDULE OF SEGMENT INFORMATION

Three Months Ended March 31, 2026

Three Months Ended March 31, 2025

Three Months Ended June 30, 2026

Three Months Ended June 30, 2025

Cost of Goods Sold

9 unchanged sentences

Interest Income and Other (Expenses), net

Net Income (Loss) before Income Tax

Income Tax Expense

Net Income (Loss)

$ ( 793,469 )

2 unchanged sentences

$ ( 726,112 )

Six Months Ended June 30, 2026

Six Months Ended June 30, 2025

Cost of Goods Sold

Operating Expenses

Salaries and Payroll Expenses

Travel and Entertainment

Stock Compensation

Public Company expenses

Audit and Accounting

Research and Development

Other operating expenses

Total Operating Expenses

Income (Loss) from Operations

( 1,275,825 )

( 1,730,514 )

( 1,367,918 )

( 1,611,587 )

Interest Income and Other (Expenses), net

Net Income (Loss) before Income Tax

( 1,212,204 )

( 1,677,814 )

( 1,328,143 )

( 1,573,985 )

Income Tax Expense

Net Income (Loss)

$ ( 1,326,300 )

$ ( 1,677,814 )

$ ( 1,357,921 )

$ ( 1,573,985 )

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

Three Months ended

March 31, 2026

March 31, 2025

Six Months ended

June 30, 2026

June 30, 2025

United States

4 unchanged sentences

Net Assets (Liabilities)

March 31, 2026

June 30, 2026

December 31, 2025

1 unchanged sentence

Republic of China (Taiwan)

of China (Taiwan) [Member]

Republic of China (Taiwan) [Member]

Total Consolidated

266 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 March 31, 2026 Compared with the Three Months Ended March 31, 2025

of Operations for the Three Months Ended June 30, 2026 Compared with the Three Months Ended June 30, 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.

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

Months Ended June 30, 2026

Months Ended June 30, 2025

to Three Months Ended June 30, 2025

Cost of Goods Sold

Total Operating Expenses

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

Interest Income and Other

(Expenses), net

Income (Loss) before Income Tax

Income Tax Expense

Net Income (Loss)

decrease in revenue for the three months ended June 30, 2026 compared with the same period in 2025 is attributable primarily to decreased

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 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 March 31, 2026 compared to the

same period in 2025.

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

net increase in operating expenses in the three months ended June 30, 2026, compared with the same period in 2025 is due primarily to

investor relations activities in the US based operations during this period.

majority of the increase in loss from operations was primarily due to a slight increase in operating expenses.

increase in net loss was primarily due to a slight increase in operating expenses for the three months ended June 30, 2026 compared to

the same period in 2025.

of Operations for the Six Months Ended June 30, 2026 Compared with the Six Months Ended June 30, 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.

Ended June 30, 2026

Months Ended June 30, 2026

Months Ended June 30, 2025

to Six Months Ended June 30, 2025

Cost of Goods Sold

Operating Expenses

Income (Loss) from Operations

Interest Income and Other

(Expenses), net

Net income (loss) before Income

Income Tax Expense

Net Income (Loss)

decrease in revenue for the six months ended June 30, 2026, compared with the same period in 2025 is attributable primarily to decreased

equipment sales from the US from a reduction in sales to distributors and 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 and US.

slight net increase in operating expenses in the six months ended June 30, 2026, compared with the same period in 2025 is due primarily

to investor relations activities in the US based operations during this period.

majority of the decrease in loss from operations was primarily due to increased gross profits and just a slight increase in operating

decrease in net loss was primarily due to increased gross profits and just a slight increase in operating expenses.

for the six months

ended June 30, 2026, compared to the same period in 2025.

and Capital Resources

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 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 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.

of June 30, 2026, we had cash and cash equivalents of $4.8 million compared to $5.2 million as of December 31, 2025.

This decrease in

our cash and cash equivalents for the six months ended June 30, 2026 is related to the sale of common stock offset by the operating losses

during the six months ended June 30, 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 six months ended June 30, 2026 was ($2.4) million compared to ($1.5) million net cash used

during the six months ended June 30, 2025.

Net cash used in operating activities for the six months ended June 30, 2026 consisted primarily

of the net loss of ($1.3) million and increase in deferred cost of goods sold of $0.9 million, related to government entity sales in

Net cash used by operating activities for the six months ended June 30, 2025 consisted primarily of the net loss of ($1.4) million.

cash used in investing activities for the six months ended June 30, 2026 and 2025 were negligible.

cash provided by financing activities for the six months ended June 30, 2026 was $1.9 million compared with $0.3 million provided during

the six months ended June 30, 2025.

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

a direct offering in February 2026 managed by H.C.Wainwright and $0.3 million from the exercise of warrants during June 2026.

have experienced significant operating losses since our inception.

46 unchanged sentences

provided on credit.

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

and existing economic conditions.

Payment terms for our U.S.-based segment require prepayment for most products before they are shipped

and monthly Sentir licensing fees, which are due in advance on the first day of each month.

For our U.S.-based segment, accounts receivable

that are more than 120 days past due are considered delinquent.

Payment terms for our Taiwan-based segment vary based on our agreements

with our customers.

Generally, we receive payment for our products and services within one year of commencing the project, except that

we retain 5% of the total payment amount and release such amount one year after the completion of the project.

For our U.S.-based segment,

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.

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

information, and existing economic conditions.

Payment terms for our U.S.-based segment require prepayment for most products before

they are shipped and monthly Sentir licensing fees, which are due in advance on the first day of each month.

For our U.S.-based

segment, accounts receivable that are more than 120 days past due are considered delinquent.

Payment terms for our Taiwan-based

segment vary based on our agreements with our customers.

Generally, we receive payment for our products and services within one year

of commencing the project, except that we retain 5% of the total payment amount and release such amount one year after the

completion of the project.

For our U.S.-based segment, we had a reserve for doubtful collections of $20,000 of accounts receivable

for the six months ended June 30, 2026 and no reserve for the year ended December 31, 2025.

For our Taiwan-based segment, we set up

no doubtful accounts receivable allowances for the six months ended June 30, 2026 and year ended December 31, 2025.

We deem the rest

of our accounts receivable to be collectible based on certain factors, including the nature of the customer contracts and past

experience with similar customers.

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

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

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

14 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements