What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-06-16 compared with 2014-05-01 · 49 added, 579 removed, 2 unchanged (100% of the section changed)

MARKET FOR REGISTRANT’S COMMON EQUITY,

RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Iveda shares trade on the OTC Bulletin Board under

the symbol “IVDA”.

in the table below is information with respect to the high and low bid quotations of our common stock for the periods indicated,

as reported by the OTC Bulletin Board.

The quotations represent inter-dealer prices without retail mark-ups, mark-downs or commissions,

and may not necessarily represent actual transactions.

The quotations may be rounded for presentation.

There is an absence of an

established trading market for Iveda’s common stock, as the market is limited, sporadic, and highly volatile, all of which

may affect the prices listed below.

Quarter Ended March 31, 2014 (through March 14, 2014)

Quarter Ended December 31, 2013

Quarter Ended September 30, 2013

Quarter Ended June 30, 2013

Quarter Ended March 31, 2013

Quarter Ended December 31, 2012

Quarter Ended September 30, 2012

Quarter Ended June 30, 2012

Quarter Ended March 31, 2012

There is limited trading activity in Iveda’s

securities, and there can be no assurance that a regular trading market for our common stock will be sustained.

Security Holders

14, 2014, we had 26,757,012 shares of our common stock outstanding held by 242 shareholders of record, exclusive of shares held

in street name.

We have no preferred stock outstanding.

never paid cash dividends on its capital stock.

Iveda currently intends to retain all earnings, if any, to finance the growth and

development of its business.

Iveda does not anticipate paying any cash dividends in the foreseeable future.

Equity Compensation Plans

15, 2009, the Company adopted the 2009 Stock Option Plan (the “2009 Option Plan”), with an aggregate number of shares

issuable under the plan of One Million Five Hundred Thousand (1,500,000) shares.

The purpose of the 2009 Option Plan was to assume

options that were already issued in the 2006 and 2008 Option plans under Iveda Corporation after the merger with Charmed Homes.

As of December 31, 2013, options to purchase 927,539 shares were outstanding under the 2009 Option Plan.

On January 18,

2010, the Company adopted the 2010 Stock Option Plan (the “2010 Option Plan”), which allows the Board to grant

options to purchase up to 1,000,000 shares of common stock to directors, officers, key employees, and service providers of

In 2011, the 2010 Option Plan was amended to increase the number of shares issuable under the 2010 Option Plan

to 3,000,000 shares and in 2012, the plan was further amended to increase the maximum number of shares that may be issued

under the 2010 Option Plan to 13,000,000 shares.

The shares under the 2010 Option Plan are registered with the SEC under

Forms S-8 filed on February 2, 2010, June 24, 2011, and December 4, 2013.

As of December 31, 2013, options to purchase

2,922,078 shares were outstanding under the 2010 Option Plan.

has also periodically issued warrants to purchase shares of common stock as equity compensation to officers, directors, employees,

and consultants.

As of December 31, 2013, warrants to purchase 3,745,005 shares of common stock were outstanding, all of which

were issued as equity compensation.

Terms of these warrants are comparable to the terms of the outstanding options.

Plan Category

Number of securities to be

issued upon exercise of

outstanding options,

warrants and rights

Weighted-average

exercise price of

outstanding options,

warrants and rights

Number of securities

remaining available for future

issuance under equity

5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

common stock is listed on The Nasdaq Capital Market under the symbol “IVDA” since April 1, 2022.

Set forth in the table below

is information with respect to the high and low bid quotations of our common stock for the periods indicated as reported by NASDAQ and

the OTC Markets.

The quotations represent inter-dealer prices without retail mark-ups, mark-downs, or commissions and may not necessarily

represent actual transactions.

the High and Low Bid data below:

Fiscal Year 2024

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

Fiscal Year 2023

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

of December 31, 2024, we had 2,808,071 shares of our Common Stock, par value $0.00001, issued and outstanding.

There were approximately

25,000 beneficial owners of our Common Stock.

is limited trading activity in our securities, and there can be no assurance that a regular trading market for our common stock will

be sustained.

of December 31, 2024, we had 2,808,071 shares of our common stock outstanding held by 96 shareholders of record, 0 shares of our Series

A Preferred Stock outstanding and 0 shares of our series B Preferred Stock.

have never paid a cash dividend on our common stock.

We currently intend to retain all earnings, if any, to finance the growth and development

of our business.

We do not anticipate paying any cash dividends in the foreseeable future.

Compensation Plans

Equity compensation plans approved by shareholders

Equity compensation plans not approved by shareholders

Recent Sales of Unregistered Securities

During our fiscal year ended December 31, 2013, the

Company sold the following equity securities that were not registered under the Securities Act:

From December

12 to December 24, 2013, the Company issued an aggregate of $425,000 of senior convertible debentures

("Debentures"), together with 38,636 warrants to purchase shares of common stock at an exercise price of $1.65 per

share ("Warrants").

In connection with this private placement of Debentures and Warrants, the Company paid an

aggregate selling commissions of $42,500.

The Debentures bear interest at a rate of 9.5% per year;

the interest accrues but

is not paid until six months after the date of issuance and then is paid monthly thereafter.

The Debentures are due and

payable three years after the date of issuance.

The Debentures may be converted, at any time before maturity, at the option

of the holder, into shares of common stock at the conversion price of $1.50 per share.

The Warrants are exercisable for five

years after the date of issuance.

The Company relied on exemptions from registration from the Securities Act provided by Rule

506 of Regulation D thereunder, based on representations and warranties provided by each purchaser in the subscription

agreement between the Company and such purchaser.

The Company has used the net proceeds from the private placement for

working capital and general corporate needs.

equity compensation plans information refer to Item 12 of Part III of this Annual Report on Form 10-K.

Sales of Unregistered Securities

forth below are the sales of all securities by the Company within the past three years which were not registered under the Securities

The Company believes that each of such issuances was exempt from registration under the Securities Act in reliance on Section 4(a)(2)

of the Securities Act and/or Regulation S under the Securities Act.

January 1, 2022 and December 31, 2022 the Company issued 8,215 shares of common stock to warrant holders upon exercise of $23,000 in

January 1, 2023 and December 31, 2023 the Company issued 19,656 shares of restricted common stock for services valued at $138,547.

On September 6, 2024, the Company

agreed to sell and issue to investors unregistered Series A Common Stock Purchase Warrants (the “Series A Warrants”) to purchase

up to 5,000,000 shares of Common Stock and unregistered Series B Common Stock Purchase Warrants (the “Series B Warrants,”

and collectively with the Series A Warrants, the “Common Warrants”) to purchase up to 5,000,000 shares of Common Stock.

Common Warrants will be exercisable on the effective date the Company obtains stockholder approval (the “Stockholder Approval”)

of the issuance of the shares underlying the exercise of the Common Warrants (the “Common Warrant Shares”), at an exercise

price of $0.43 per share.

The Series A Warrants will expire five years following the Stockholder Approval and the Series B Warrants will

expire 18 months following the Stockholder Approval.

January 1, 2024 and December 31, 2024 the Company issued 12,500 shares of restricted common stock for services valued at $90,000.

of the securities referred to, above, were issued without registration under the Securities Act of 1933, as amended (the “Securities

Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as provided in Rule 506(b) of Regulation

D promulgated thereunder.

6 – SELECTED FINANCIAL DATA

As a smaller reporting company, the Company is not

required to provide Item 6 disclosure in this Annual Report.

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should

be read in conjunction with our audited and unaudited financial statements and associated notes appearing elsewhere in this report.

Iveda Solutions,

began operations on January 24, 2005 under the name of IntelaSight, Inc.

On October 15, 2009, IntelaSight became a wholly-

owned subsidiary of Charmed Homes, Inc., which changed its name to Iveda Corporation.

All Company operations were conducted through

IntelaSight until December 31, 2010, at which time IntelaSight merged with and into Iveda Corporation and changed its name to Iveda

On April 30, 2011, the Company completed its acquisition of MegaSys .

See “Item 1.

Business –

General.”

Unless otherwise noted, all references to “Iveda,”

“Company,”

“we,”

“us”

and “our”

hereafter in this section refer to the current business of Iveda Solutions, Inc.

Iveda installs

video surveillance equipment, primarily for security purposes, and provides video hosting, archiving and real-time remote surveillance

services to a variety of businesses and organizations.

The accompanying financial statements have been prepared assuming that Iveda

will continue as a going concern.

Iveda generated accumulated losses of approximately $21.8 million through December 31, 2013.

plan was adopted by management to enable the Company to continue to operate and begin to report operating profits.

The highlights

of that plan are as follows:

The Board of Directors approved the Company

to engage with a financial capital markets advisor in connection with a potential capital financial transaction to raise up to

$30 million in long-term financing.

In December 2013, the Board of Directors

also approved the Company to raise up to an aggregate amount of $3.6 million in bridge financing through the sale of Convertible

Debentures in advance of the long-term financing.

In the third quarter of 2013, the Company

launched two new camera lines in collaboration with MegaSys, its Taiwan subsidiary and Industrial Technology Research Institute

(ITRI), its nonprofit research and development partner in Taiwan.

These products are enablers of the Company’s video hosting

Company has recently developed two other standalone services:

o IvedaMobile–a cloud-hosting service that turns

any smartphone or tablet into a mobile, cloud video streaming device.

This was developed with ITRI.

IvedaXchange –

In collaboration

with a technology partner, the Company developed a real-time situational awareness dashboard to enable organizations instant access

to vital and filtered information such as emergency situations, location of critical assets, video monitoring, and local IvedaXchange

In collaboration with a technology partner, the Company developed a real-times situational awareness dashboard to enable

organizations instant access to vital and filtered information such as emergency situations, location of critical assets, video

monitoring, and local news.

IvedaXchange is well-suited for law enforcement agencies and schools.

Company launched a new website to highlight new products and services with corresponding applications.

Company launched a second website allowing for direct web-sales, geared toward the residential and small-to-medium sized businesses.

The Company intends to continue to participate

in industry and vertical tradeshows to launch new products, generate leads, solicit resellers and other sales channels, and identify

potential technology partners.

Company intends to continue advertising on selected trade magazines and running Google Adwords to generate leads.

Company has evaluated its reseller distribution channel and eliminated non-performing components of the channel.

In November 2013, Iveda hired Bob Brilon

as our chief financial officer and executive vice president of business development.

He has strong ties with the investment community

and has extensive experience in mergers and acquisitions, strategic growth planning, and interacting with domestic and foreign

institutional investors, which will be instrumental to our market expansion, global distribution of our cloud video hosting platform

and services, and raising capital to fund our growth.

In February 2014, he was also appointed as the Company’s president.

The Company is in active collaboration

with certain telecommunications companies in other countries to resell the Company’s products and services in their respective

Application of Critical Accounting Policies

identified the policies below as critical to our business operations and the understanding of our results of operations.

and any associated risks related to these policies on our business operations are discussed throughout Management’s Discussion

and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial results.

In the ordinary

course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations and financial

condition in the preparation of our financial statements in conformity with accounting principles generally accepted in the United

We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the

circumstances.

The results form the basis for making judgments about the carrying values of assets and liabilities that are not

readily apparent from other sources.

Actual results could differ significantly from those estimates under different assumptions

and conditions.

We believe that the following discussion addresses our most critical accounting policies, which are those that

are most important to the portrayal of our financial condition and results of operations and require our most difficult, subjective,

and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

estimates for Iveda are that of the stock based compensation recorded for options and warrants issued and the income tax valuation

allowance recorded for deferred tax assets.

The fair values of options and warrants are determined using the Black-Scholes option-pricing

Iveda has no historical data on the accuracy of these estimates.

The estimated sensitivity to change is related to the various

variables of the Black-Scholes option-pricing model stated below.

The specific quantitative variables are included in the Notes

to the Financial Statements.

The estimated fair value of options and warrants is recognized as expense on the straight-line basis

over the options’

and warrants’

vesting periods.

The fair value of each option and warrant granted is estimated on

the date of grant using the Black-Scholes option-pricing model with the expected life, dividend yield, expected volatility, and

risk free interest rate weighted- average assumptions used for options and warrants granted.

Expected volatility for 2013 and 2012

was estimated by using the Dow Jones U.S.

Industry indexes sector classification methodology for industries similar to the Company.

The risk-free rate for periods within the contractual life of the option and warrant is based on the U.S.

Treasury yield curve

in effect at the grant date.

The expected life of options and warrants is based on the average of three public companies offering

services similar to Iveda.

Impairment of Long-Lived Assets

a significant amount of property and equipment primarily consisting of leased equipment.

The Company reviews the recoverability

of the carrying value of long-lived assets using the methodology prescribed in ASC 360 “Property, Plant and Equipment.”

Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted

future net operating cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment

to be recognized is measured as the amount by which the carrying value of the assets exceeds their fair value.

Basis of Accounting and Going Concern

Iveda’s

financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted

in the United States of America.

In addition, the accompanying financial statements have been prepared assuming that the Company

will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal

course of business.

The Company generated accumulated losses of approximately $21.8 million through December 31, 2013 and has insufficient

working capital and cash flows to support operations.

These factors raise substantial doubt about the Company’s ability to

continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability and classification

of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty.

Revenue and Expense Recognition

recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily

determinable, and collectability is reasonably assured.

The Company recognizes revenue in accordance with ASC 60, “Revenue

Recognition.”

Sales are recorded net of sales returns and discounts, which are estimated at the time of shipment based upon

historical data.

Revenues from monitoring services are recognized when the services are provided.

Expenses are recognized as incurred.

from fixed-price equipment installation contracts are recognized on the percentage-of-completion method.

The percentage completed

is measured by the percentage of costs incurred to date to estimated total costs for each contract.

This method is used because

management considers expended costs to be the best available measure of progress on these contracts.

Because of inherent uncertainties

in estimating costs and revenues, it is at least reasonably possible that the estimates used will change.

costs include all direct material, subcontractors, labor costs, and equipment costs and those indirect costs related to contract

General and administrative costs are charged to expense as incurred.

Provisions for estimated losses on uncompleted

contracts are made in the period in which such losses are determined.

Changes in job performance, job conditions, and estimated

profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change

orders, and settlements are accounted for as changes in estimates in the current period.

Profit incentives are included in revenues

when their realization is reasonably assured.

Claims are included in revenues when realization is probable and the amount can be

reliably estimated.

The liability, “Billings

in excess of costs and estimated earnings on uncompleted contracts,”

represents billings in excess of revenues recognized.

Stock-Based Compensation

On January 1,

2006, the Company adopted the fair value recognition provisions of ASC 718, Share-Based Payment , which requires the

recognition of an expense related to the fair value of stock-based compensation awards.

The Company elected the modified

prospective transition method as permitted by ASC 718.

Under this transition method, stock-based compensation expense for the

years ended December 31, 2011 and 2010 includes compensation expense for stock- based compensation granted on or after the

date ASC 718 was adopted based on the grant-date fair value estimated in accordance with the provisions of ASC 718.

Company recognizes compensation expense on a straight-line basis over the requisite service period of the award.

value of stock-based compensation awards granted prior to, but not yet vested as of December 31, 2010 and 2009, were

estimated using the “minimum value method”

as prescribed by original provisions of ASC 718, Accounting for

Stock-Based Compensation , therefore, no compensation expense is recognized for these awards in accordance with ASC 718.

Company recognized $221,177 and $248,072 of stock-based compensation expense for the years ended December 31, 2013 and 2012,

respectively.

Acquisition of MegaSys

2011, the Company acquired Sole-Vision Technologies, Inc.

(doing business as MegaSys), a corporation organized under the laws

of the Republic of China (“MegaSys”), pursuant to the share exchange agreement (the “Agreement”)

dated March 21, 2011 and a related side agreement of even date (the “Side Agreement”), by and among the Company,

MegaSys, and the shareholders of MegaSys (the “MegaSys Shareholders”).

Pursuant to the Agreement (i) the Company

acquired 100% of the issued and outstanding shares of MegaSys Common Stock in exchange for the issuance to the MegaSys

Shareholders of 1,700,000 shares of Common Stock of the Company (the “Exchange”), and (ii) MegaSys became a

wholly owned subsidiary of Iveda.

The Side Agreement provided that the MegaSys Shareholders were entitled to receive up to an

additional 2,000,000 shares of Common Stock of the Company upon achievement by MegaSys of certain financial milestones set

forth therein.

Those financial milestones were not achieved, therefore, the additional 2,000,000 shares will not be issued.

The Exchange was approved by Taiwan’s Foreign Investment Commission Agency.

is a Taiwanese company specializing in deploying video surveillance systems for airports, commercial buildings, government customers,

data centers, shopping centers, hotels, banks, and Safe City initiatives in Taiwan and other neighboring countries.

MegaSys integrates

security surveillance products, software and services to provide integrated security solutions to the end user.

Most of MegaSys’s

revenues are derived from one-time sales, which differs from Iveda’s business model of on-going monitoring revenues.

does not own any proprietary technology or intellectual property other than certain trademarks in China and Taiwan used in its

Management believes that the acquisition of MegaSys

provides the following potential benefits to the Company’s business:

MegaSys has an established presence and credibility

in, and provides the Company with access to, the Asian market.

Management believes that the Company will be able to leverage MegaSys’s relationships in Asia for cost-effective research

and development of new product offerings and cost reduction of current product offerings.

Management is able to source products directly using

MegaSys’s product sourcing expertise to enhance the Company’s custom integration capabilities.

The Company benefits from cost reductions for infrastructure equipment (servers, storage devices, network switches, and Super

Wifi technologies) through a direct OEM relationship.

Management believes that MegaSys enhances the global

distribution potential for Iveda’s products and services.

MegaSys benefits from the Company’s expertise

in cloud-based video surveillance and access to the U.S.

markets for its products.

does not expect to derive significant revenues from prior MegaSys customer installations.

However, the prior MegaSys customer base

helps to establish credibility for the Company to market its products and services in the Taiwanese and other Asian marketplaces.

There can be no assurance that the Company will generate material future revenue from MegaSys’s customers at the time of

the Exchange.

Results of Operations for the

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

We recorded net

consolidated revenue of $3,345,217 for the year ended December 31, 2013, compared to $3,608,998 for the year ended December 31,

2012, a decrease of $263,781 or 7%.

In fiscal 2013, our recurring service revenue was $495,585 or 15% of consolidated net revenue,

and our equipment sales and installation revenue was $2,691,915 or 80% of net revenue, compared to 605,840 or 17% of net revenue

for recurring service and $2,815,150 or 78% of net revenue for equipment sales and installation revenue in 2012.

Revenues in our

operations were primarily derived from our recurring monthly service revenue, which represents 67% of U.S.

decrease in total revenue in 2013 compared to the same period in 2012 is attributable primarily to reduced equipment sales from

Cost of Revenue.

Total cost of

revenue was $2,729,350 (82% of revenues;

gross margin of 18%) for the year ended December 31, 2013, compared to $3,230,495 (89%

11% gross margin) for the year ended December 31, 2012, a decrease of $501,145 or 16%.

The decrease in cost of revenue

and increase of gross margin was primarily due to the more favorable gross margins associated to the approximately 96% of MegaSys’

revenue, derived from equipment sales and installation.

Operating Expenses.

expenses were $7,415,682 for the year ended December 31, 2013, compared to $4,223,455 for the year ended December 31, 2012, an

increase of $3,192,227 or 76%.

The significant increase in operating expenses was largely due to an impairment charge to goodwill

during 2013 of $841,000.

Without the goodwill charge in 2013 compared to 2012, operating expenses increased by $2,351,227, or 56%.

This increase was attributable primarily to additional professional sales personnel and increased salaries and benefits, increased

spending for sales and marketing collateral and tradeshows, increased sales consulting expenses, increased travel expenses for

sales personnel including international travel, and increased costs for product and software development.

Significant operating

expense and effort was expended in 2013 related to potential sales opportunities that are expected to be recognized during 2014.

Loss from Operations.

operations increased to $6,799,815 for the year ended December 31, 2013, compared to $3,844,952 for the year ended December 31,

2012, an increase of $2,954,863 or 77%.

A majority portion of this increase was due to the one-time goodwill impairment charge

of $841,000 in 2013.

The remaining increase in loss of $2,113,863 was primarily due to the increased operating expenses of additional

professional sales personnel and increased salaries and benefits, increased spending for sales and marketing collateral and tradeshows,

increased sales consulting expenses, increased travel expenses for sales personnel including international travel, and increased

costs for product and software development.

The majority of the loss, $6,325,892, was from our U.S.

operations and the remaining

$473,923 was from our operations in Taiwan.

Other Expense-Net.

Other expense-net was $71,235 for

the year ended December 31, 2013, compared to $79,477 for the year ended December 31, 2012, a decrease of $8,242 or 10%.

The expense-net

decrease is primarily in which relates to a gain on foreign currency exchange of $10,496.

Net loss was $6,801,714

for the year ended December 31, 2013, compared to $3,841,927 for the year ended December 31, 2012 The increase of $2,959,787 or

77% in net loss was caused by a significant increase in operating expenses coupled with a slight decrease in overall revenues.

Significant operating expenses and effort was expended in 2013 related to potential sales opportunities that are expected to be

recognized during 2014.

Liquidity and Capital Resources

As of December 31, 2013, we had cash and cash equivalents

of $210,515 in our domestic business and $349,214 in our foreign business, compared to $42,920 in our domestic business and $71,542

in our foreign business as of December 31, 2012.

This increase in our cash and cash equivalents is primarily a result of financing

There are no legal or economic factors that materially impact our ability to transfer funds between our domestic and

foreign businesses.

Net cash used in operating activities during the

year ended December 31, 2013 was $3,570,922 and during the year ended December 31, 2012 was $3,327,703.

Cash used in operating

activities for the year ended December 31, 2013 consisted primarily of the net loss offset by approximately $336,402 in non- cash

stock option compensation and $222,206 in non-cash compensation.

Cash used in operating activities for the year ended December

31, 2012 consisted primarily of the net loss offset by approximately $248,072 in non-cash stock option compensation and $123,940

in non-cash compensation.

Net cash used by investing activities for the

year ended December 31, 2013 was $157,230.

Net cash used by investing activities during the year ended December 31, 2012 was

Net cash provided by financing activities for

the year ended December 31, 2013 was $4,179,185 and during the year ended December 31, 2012 was $2,918,602.

Net cash provided

in both periods consisted primarily of net proceeds from the sale of stock and proceeds from short-term borrowings, which

were partially offset by principal payments on short term debt note obligations.

31, 2013, we had approximately $17,000,000 in net operating loss carryforwards available for federal income tax purposes.

not recognize any benefit from these operating loss carryforwards, which federal operating loss carryforwards will expire beginning

in 2025 through 2033.

State net operating loss carryforwards have begun to expire in 2013.

experienced significant operating losses since our inception.

Our capital expenditures and working capital requirements will increase

and other adjustments to our operating plan will be needed to respond to changes in competition or unexpected events.

that our cash on hand at December 31, 2013 is sufficient to meet our anticipated cash needs for working capital and capital expenditures

for the near term.

However, the Company has limited liquidity and has not yet established a stabilized source of revenues to cover

operating costs over an extended period of time.

As a result, risk exists regarding the Company’s ability to continue as

a going concern.

The Company’s continuation as a going concern is dependent upon its ability to generate greater revenues

through increased sales and/or its ability to raise additional funds through capital markets No assurance can be given that the

Company raise sufficient funding to continue as a going concern or to operate profitably.

Two customers

in 2013 represented approximately 54% of total revenue and one customer in 2012 represented approximately 69% of total revenue.

The accounts receivable from this customer/s was approximately 0% of total accounts receivable as of December 31, 2013.

customers represented greater than 10% of total revenues in 2013 and 2012.

operation has 8% of gross accounts receivable aged over 120 days at the year ended December 31, 2013.

The terms for payment for

operations are “due upon receipt”.

Therefore, we have established an allowance for doubtful accounts of $31,594

to be recorded with respect to our U.S.

operations, through MegaSys, have 90% of gross accounts receivables aged over 180 days at December 31, 2013.

The payment terms

vary based on the timing of the completion of the project.

In general, payment takes place within one year of commencing the project,

except that 5% of the total payment is retained and released one year after the completion of the project.

Excluding such retained

amounts, MegaSys provides an allowance for doubtful accounts for any receivables that will not be paid within one year.

has set up a 57%, or $465,933, allowance for doubtful accounts as of the year ended December 31, 2013.

Management deems the rest

to be collectible based on the nature of the customer contracts and past experience with similar customers.

Substantially all cash is deposited in two financial

institutions, one in the United States and one in Taiwan.

At times, amounts on deposit in the United States may be in excess of

the FDIC insurance limit.

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

with maximum coverage of NTD 3 million.

At times, amounts on deposit in Taiwan may be in excess of the CDIC insurance limit.

leases its office facilities under a non-cancelable operating lease expiring October 2016 that requires minimum monthly payments

ranging from $8,669 to $10,836.

Rent expense was $106,362 and $107,885 for the years ended December 31, 2013 and 2012, respectively.

The Company also has two non-cancellable data center service agreements for approximately $7,517 and $2,518 per month, expiring

September 2014.

The Company has a third non- cancellable data center service agreement for approximately $6,117, expiring March

Data center services expense was $192,181 and $170,776 for the years ended December 31, 2013 and 2012, respectively, and

is included as a component of Cost of Revenue in the Statement of Operations.

Future minimum lease payments under these leases

are as follows:

The Company has no off-balance sheet arrangements.

Management does not believe that

the current levels of inflation in the United States have had a significant impact on the operations of the Company.

management does not believe that the current levels of inflation in Taiwan have had a significant impact on the operations of MegaSys.

Recent Accounting Standards

2013, FASB has issued Accounting Standards Update (ASU) No.

2013-05, Foreign Currency Matters (Topic 830).

This ASU resolve the

diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation

of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells

a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group

of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas

mineral rights)within a foreign entity.

In addition, the amendments in this Update resolve the diversity in practice for the treatment

of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity.

ASU is the final version of Proposed Accounting Standards Update EITF11Ar—Foreign Currency Matters (Topic 830), which has

been deleted.

The amendments in this Update are effective prospectively for fiscal years (and interim reporting periods within

those years) beginning after December 15, 2013.

For nonpublic entities the amendments in this Update are effective prospectively

for the first annual period beginning after December 15, 2014, and interim and annual periods thereafter.

The amendments should

be applied prospectively to derecognition events occurring after the effective date.

Prior periods should not be adjusted.

adoption is permitted.

If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity’s

fiscal year of adoption.

2013, FASB issued Accounting Standards Update (ASU) No.

2013-03, Financial Instruments (Topic 825).

This ASU clarifies the scope

and applicability of a disclosure exemption that resulted from the issuance of Accounting Standards Update No.

2011-04,Fair Value

Measurement (Topic 820):

Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.

GAAP and IFRSs.

The amendment clarifies that the requirement to disclose "the level of the fair value hierarchy within which the fair value

measurements are categorized in their entirety (Level 1, 2, or 3)"

does not apply to nonpublic entities for items that are

not measured at fair value in the statement of financial position, but for which fair value is disclosed.

This ASU is the final

version of Proposed Accounting Standards Update 2013-200—

Financial Instruments (Topic 825) which has been deleted.

The amendments

are effective upon issuance.

2013, FASB has issued Accounting Standards Update (ASU) No.

2013-02, Comprehensive Income (Topic 220):

Reporting of Amounts Reclassified

Out of Accumulated Other Comprehensive Income.

This ASU improves the transparency of reporting these reclassifications.

Other comprehensive

income includes gains and losses that are initially excluded from net income for an accounting period.

Those gains and losses are

later reclassified out of accumulated other comprehensive income into net income.

The amendments in this ASU do not change the

current requirements for reporting net income or other comprehensive income in financial statements.

All of the information that

this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S.

The new amendments will require an organization

Present (either on the face of the statement

where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified

out of accumulated other comprehensive income - but only if the item reclassified is required under U.S.

GAAP to be reclassified

to net income in its entirety in the same reporting period.

Cross-reference

to other disclosures currently required under U.S.

GAAP for other reclassification items (that are not required under U.S.

to be reclassified directly to net income in their entirety in the same reporting period.

This would be the case when a portion

of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g.,

inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public

and private companies that report items of other comprehensive income.

Public companies are required to comply with these amendments

for all reporting periods (interim and annual).

A private company is required to meet the reporting requirements of the amended

paragraphs about the roll forward of accumulated other comprehensive income for both interim and annual reporting periods.

private companies are only required to provide the information about the effect of reclassifications on line items of net income

for annual reporting periods, not for interim reporting periods.

The amendments are effective for reporting periods beginning after

December 15, 2012, for public companies and are effective for reporting periods beginning after December 15, 2013, for private

Early adoption is permitted.

In January 2013, FASB has

issued Accounting Standards Update (ASU) No.

2013-01, Balance Sheet (Topic 210):

Clarifying the Scope of Disclosures about

Offsetting Assets and Liabilities.

This ASU clarifies that ordinary trade receivables and receivables are not in the scope of

2011-11, Balance Sheet (Topic 210):

Disclosures about Offsetting Assets and Liabilities.

Specifically, ASU 2011-11

applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities

lending transactions that are either offset in accordance with specific criteria contained in the FASB Accounting Standards

Codification(TM) (Codification) or subject to a master netting arrangement or similar agreement.

The FASB undertook this

clarification project in response to concerns expressed by U.S.

stakeholders about the standard’s broad definition of

financial instruments.

After the standard was finalized, companies realized that many contracts have standard commercial

provisions that would equate to a master netting arrangement, significantly increasing the cost of compliance at minimal

value to financial statement users.

An entity is required to apply the amendments in ASU 2013-01 for fiscal years beginning

on or after January 1, 2013, and interim periods within those annual periods.

An entity should provide the required

disclosures retrospectively for all comparative periods presented.

The effective date is the same as the effective date of

2012, FASB has issued Accounting Standards Update (ASU) No.

2012-04, Technical Corrections and Improvements.

This ASU make technical

corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification.

The amendments in this

ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities.

public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after

December 15, 2012.

For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal

periods beginning after December 15, 2013.

The Company does not expect the adoption of this guidance to have a material impact

on its consolidated financial statements.

2012, FASB has issued Accounting Standards Update (ASU) No.

2012-03, Technical Amendments and Corrections to SEC Sections.

ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No.

33-9250, and ASU 2010-22, which amend or rescind portions

of certain SAB Topics.

The Company does not expect the adoption of this guidance to have a material impact on its consolidated

financial statements.

In July 2012,

the FASB issued ASU 2012-02, Intangibles—Goodwill and Other (Topic 350):

Testing Indefinite-Lived Intangible Assets for

The objective of the measure is to reduce the cost and complexity associated with performing an impairment test

for indefinite-lived intangible assets and to make the impairment test similar to the recent changes for testing goodwill for

impairment (ASU 2011-08).

ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years

beginning after September 15, 2012 and early adoption is permitted.

The Company does not expect the adoption of this guidance

to have a material impact on its consolidated financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As a smaller reporting company, Iveda is not required

to provide Item 7A disclosure in this Annual Report.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The required accompanying financial statements begin

on page F-1 of this Annual Report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

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

What changed 10-K/A

Item 5. Market for Registrant’s Common Equity