What changed in this filing

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Item 9A. Controls and Procedures

2025-06-16 compared with 2014-05-01 · 1602 added, 1582 removed, 111 unchanged (97% of the section changed)

CONTROLS AND PROCEDURES

9A – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

supervision and with the participation of our management, including our principal executive officer and principal financial officer,

we conducted an evaluation of the design and operation of our disclosure controls and procedures, as such term is defined nnder

Rules 13a-15(e) and 15d-15(e) promulgated nnder the Securities Exchange Act of 1934, as amended (the "Exchange Act"),

as of December 31, 2013.

Based on our evaluation, our management has concluded that our disclosure controls and procedures are

effective to ensure that the reports that we file or submit nnder the Exchange Act are recorded, processed, slllllrnarized and

reported within the time periods specified in the SEC's rules and forms and that the information required to be disclosed by us

in such reports is accumulated and conununicated to our management, including our principal executive officer and principal financial

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

Management’s Report on

Internal Control over Financial Reporting

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a- 15(f) and 15d-15(f)

of the Exchange Act.

Under the supervision and with the participation of our management, including our principal executive

officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over

financial reporting based on the framework in Internal Control –

Integrated Framework issued by the Committee of

Sponsoring Organizations of the Treadway Commission.

Based on our evaluation under the framework in Internal Control –

Integrated Framework , our management concluded that our internal control over financial reporting was not effective as of

December 31, 2013.

report does not include an attestation report of our registered public accounting firm regarding internal control over financial

In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) was enacted

The Dodd-Frank Act provides non- accelerated filers with a permanent exemption from the requirement to obtain an external

audit on the effectiveness of internal financial reporting controls provided in Section 404(b) of the Sarbanes-Oxley Act.

Changes in Internal Control over

Financial Reporting

2013, we hired a new CFO who has experience in SEC reporting and disclosures.

The Companynowhas two employees knowledgeable in

SEC accounting and reporting..

The Company has plans for hiring additional financial personnel and implementing additional controls

and processes involving both of our financial personnel in order to ensure all transactions are accounted for and disclosed in

an accurate and timely manner.

There have not been any other changes in our internal control over financial reporting (as such

term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially

affected, or are reasonably likely to materially affect our internal control over financial reporting for our business operations.

Limitations on the Effectiveness

Our management,

including our principal executive officer and principal financial officer, does not expect that our disclosure controls and internal

controls will prevent all errors and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable,

not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect

the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues

and instances of fraud, if any, within Iveda have been detected.

These inherent limitations include the realities that judgments

in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake.

Additionally, controls can

be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or Board override

of the control.

of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be

no assurance that any design will succeed in achieving its stated goals under all potential future conditions;

over time, controls

may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be

Identified Material Weakness

of Subsidiary Operations:

As of December 31, 2013, the Company needs to hire additional staff at MegaSys that are knowledgeable

in SEC accounting and reporting.

Increased staffing at the subsidiary level will provide daily oversight of MegaSys operations

and minimize the likelihood of any material error in reporting the subsidiary’s results.

Action plans are in place to address

this staffing need during 2014.

Management's Remediation Initiatives

As our resources allow, we plan

to add financial personnel at the subsidiary level to properly provide accurate and timely financial reporting.

OTHER INFORMATION

During 2013, the Company raised $5,339,500 in a private

placement of shares at $1.00 per share and $723,000 at $1.10 per share.

Costs associated with this raise totaled $606,320.

mix of investors includes 51 individuals, 12 trusts and 24 corporations.

During the fourth quarter of 2013, the Company raised

$425,000 in Convertible Debentures with warrants.

These issuances were made pursuant to Section 4(2)

of the Securities Act of 1933, as amended, Regulation D, and Rule 506 promulgated thereunder.

The facts relied upon by the Company

to use this exemption were the following:

(a) the Company did not use general solicitation or advertising to market the securities;

(b) the issuances were only made to accredited investors;

and (c) the Company informed the investors that they would receive only

“restricted”

There were no other items required

to be disclosed in a report on Form 8-K during the fourth quarter of the fiscal year ended December 31, 2013 that have not been

already disclosed on a Form 8-K filed with the SEC.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

Each member of the Company’s Board serves a one-year term

and is subject to reelection at the Company’s Annual Meeting of Shareholders held each year.

Board Committees

has established an Audit Committee consisting of James Staudohar (Chairman), Joseph Farnsworth and Robert Gillen;

a Compensation

Committee consisting of Joseph Farnsworth (Chairman), James Staudohar, Gregory Omi, Alex Kuo and Alejandro Franco;

and a Nominating

Committee consisting of Gregory Omi (Chairman), Joseph Farnsworth, Alex Kuo and Alejandro Franco.

No other committees have been

Audit Committee

The Audit Committee was

established on February 18, 2010, although the Board had previously adopted a Charter which was amended on April 13, 2010.

The Audit Committee Charter lists the purposes of the Audit Committee as overseeing the accounting and financial reporting

processes of the Company and audits of the financial statements of the Company, and providing assistance to the Board in

monitoring the (i) integrity of the Company’s financial statements;

(ii) Company’s compliance with legal and

regulatory requirements;

(iii) independent auditor’s qualifications and independence;

and (4) performance of the

Company’s internal audit function, if any, and independent auditor.

has determined that Mr.

Staudohar is an “audit committee financial expert”

as defined in Item 407(d)(5) of Regulation

S-K promulgated by the SEC.

The Board’s conclusions regarding the qualifications of Mr.

Staudohar as an audit committee financial

expert were based on his service as a chief financial officer of numerous companies in various industries, his experience as a

certified public accountant, and his degree in accounting.

Directors, Executive Officers

and Key Employees .

The executive officers, directors and other key employees serving the Company as of the date of this report

were as follows:

Chairman of the Board, CEO

Robert Brilon

President, CFO, Treasurer

Secretary, COO, CMO

Richard Gibson

Vice President of Global Sales & Support

Chen-Ho (Alex) Kuo

Our Chief Executive Officer and Principal Financial

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

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

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

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

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

Based on their evaluation of our disclosure controls

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

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

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

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

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

Management’s Annual Report on Internal

Control over Financial Reporting

Our management is responsible for establishing and

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

Rule 13a-15(f).

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

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

(the “COSO Framework”).

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

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

As of December 31, 2024, management assessed the effectiveness

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

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

and SEC guidance on conducting such assessments.

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

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

The material weaknesses identified include (i) the

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

with an appropriate level of U.S.

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

GAAP and SEC disclosure

requirements commensurate with the Company’s financial reporting requirements.

We are working to remediate the deficiencies and material

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

and internal controls.

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

the deficiencies and address material weaknesses.

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

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

that the remediation efforts described above require modification.

Executive management, in consultation with and at the direction of

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

of the identified material weaknesses.

Although we plan to complete this remediation process

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

and our efforts may not be successful in remediating

the deficiencies or material weaknesses.

This Annual Report does not include an attestation

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

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

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

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over

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

our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Because of its inherent limitations, internal control

over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are

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

or procedures may deteriorate.

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

These include the

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

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

Therefore, even those systems determined to

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

Because of the inherent

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

control over financial reporting.

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

Changes in Disclosure Controls and Procedures

9B – OTHER INFORMATION

Corporate Governance

the period covered by this Annual Report on Form 10-K, there were no changes to the procedures by which security holders may recommend

nominees to the Company’s Board of Directors.

Insider Trading Arrangements and Policies

the quarter ended December 31, 2024, no director or officer of the Company “ adopted ” or “ terminated ” a “Rule

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

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Officers and Directors

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

Chief Executive Officer, Chairman of the Board of Directors

and President

Chief Financial Officer, Treasurer and Corporate Secretary

Chief Technology Officer

Joseph Farnsworth

Alejandro Franco

Ly founded Iveda and has served as a director and as Chairman of the Board and Chief Executive Officer since inception.

He has held positions with several major corporations, including Applications Engineer at Metricom, Inc.

(from 1998 to 2001), Corporate

Sales at Nextel Communications (from 2001 to 2002), Market Manager at Door To Door Storage (from 2001 to 2002), and B2B Sales Manager

at T-Mobile USA (from 2002 to 2004).

While at T- Mobile, his last position before founding Iveda Solutions, he was awarded the

prestigious sales award of President’s Club Top Salesman.

Ly received his B.S.

in Civil Engineering, with a minor in

International Business, from San Francisco State University.

Ly’s day-to-day leadership as our Chief Executive Officer

provides him with detailed knowledge of our business and operations.

Among other professional experiences, qualifications, and

Ly brings in depth knowledge and understanding of the video surveillance industry, as well as business and engineering

expertise and management skills that have been critical to formulating the Company’s short and long-term strategies.

Luz Berg joined Iveda Solutions in 2004, prior to its incorporation as the VP of Marketing.

She was promoted to

Senior VP of Operations & Marketing in 2007, and was further promoted to Chief Operating Officer and Chief Marketing

Officer in 2009.

Berg also serves as the Corporate Secretary.

Berg has over 20 years of business experience in a

variety of industries, with a proven track record in building a startup company from the ground up.

She has been working

alongside the CEO since inception, making sure that the Company remains focused on its goals and the founder’s vision

Berg manages the Company’s day-to-day operation, formulating policies and procedures.

extensive experience in developing and implementing results- driven marketing communications plans for lead/sales generation,

building brand, brand revitalization, and customer retention in a wide-range of industries.

She has been instrumental in the

Company’s messaging and image building.

Berg served as the Director of Marketing at Cygnus Business Media from 2003

to 2004 and at Penton Media from 2001 to 2003.

She has also worked in the high-tech industry at Metricom, serving as

Marketing Programs/Channel Marketing Manager from 1999 to 2001, and Spectra-Physics Lasers, serving as Marketing

Communications Specialist from 1991 to 1999.

Berg received her B.A.

in Management from St.

Mary’s College in

Brilon –

Bob is a senior executive with over 30 years of experience as a Chief Financial Officer (CFO) and Chief Executive

Officer (CEO) for both private and public companies.

Most recently, Bob served as CFO and EVP of Business Development for Brain

State Technologies, a leading system for Brainwave Optimization®.

During his tenure there, he was successful in raising capital

while also providing leadership in financial operations, technology licensing programs, and channel development.

Prior to that,

Bob held CFO positions for various companies that required his expertise including MD Helicopters and Iveda (2008 to 2010).

was instrumental in Iveda becoming a fully reporting public company and subsequently structuring the transaction that led to the

acquisition of MEGAsys, Iveda's subsidiary in Taiwan.

Bob served as the CEO and CFO for InPlay Technologies (NASDAQ:NPLA), formerly

Duraswitch (NASDAQ:DSWT) patent holder and global licensor of magnetic switches, from 1998 to 2007.

Other positions held include

CFO at Gietz Master Builders, Corporate Controller at Rental Service Corp.

(NYSE:RRR) and CFO and Vice President of Operations

at DataHand Systems, Inc.

Bob was also CFO at Go- Video (AMEX:VCR), manufacturer of the first dual-deck VCR.

Prior to his career

in the corporate world, Bob obtained CPA certification and accumulated four years of audit and tax experience with such “Big

CPA firms as McGladrey & Pullen, Ernst & Young, and Deloitte & Touche.

Bob oversees the financial well-being

of the Company and all aspects of accounting and finance, administration, and human resources functions.

He develops and manages

banking/vendor relationships, financial reports, budgets, and internal control systems.

Bob is also in charge of investor relations

and capital strategies to support the company’s growth.

Bob received his B.S.

Degree in Business Administration from University

Gibson - Richard Gibson joined Iveda in October 2011 as Senior Vice President of Global Sales & Support.

Gibson comes to

Iveda with 30 years’

experience in IT, networks, and security.

He has held leadership positions in large companies such as

IBM and Motorola, as well as in several smaller companies.

From 2008 up to just before Mr.

Gibson joined Iveda in October 2011,

he was Senior Vice President of Sales and Service at SEER Technology, Inc.

From 2005 to 2008, Mr.

Gibson provided consulting services

in sales, marketing, start-up funding, and business plan development to small technology companies.

Gibson worked at CYBERAIR

Technologies, Inc.

from 2003 to 2005 as Senior Vice President of Sales and Marketing.

From 1999 to 2003, he worked for Motorola

Global Infrastructure Solutions as Director of Business Development.

From 1997 to 1999, Mr.

Gibson worked for NETSAFE and INTERCELL

in sales and marketing executive roles.

Gibson held sales and marketing management positions at Motorola Government Electronics

from 1992 to 1997.

He started his professional career at IBM as Senior Market Representative from 1988 to 1992 and Systems Engineer

from 1979 to 1988.

Gibson is managing Iveda’s strategic sales initiatives overseas.

Gibson is in charge of establishing

and enhancing new sales and customer service methodologies, systems, and organization.

Gibson received his MBA degree at Thunderbird

School of International Management in Glendale, Arizona, specializing in the Asia region.

He earned his undergraduate Bachelor

of Science in International Relations degree from the University of Minnesota in Minneapolis, Minnesota, graduating summa cum laude.

He also completed IBM’s Internal Graduate School program at IBM Systems Research Institute.

Joseph Farnsworth

Farnsworth was appointed to Iveda’s Board in January 2010.

Farnsworth has over 25 years of experience in

the real estate industry.

Since 1995, Mr.

Farnsworth has served as President and a director of Farnsworth Realty & Management

Co., an Arizona based privately held real estate company.

He has also served on the Board of Farnsworth Development, a closely

held real estate developer, since 1995, and on the Board of Farnsworth Companies since 2008.

From 1987 to 1991, Mr.

served as President of Farnsworth International, a real estate investment company based in Taipei, Taiwan, and from 1990 to 1995,

Farnsworth served as President of Alfred’s International, a company with operations in China and Korea.

the Board of Directors of Arizona Brain Food, an organization providing food to lower income school children, and is actively involved

with the La Masita, a homeless shelter.

He has previously served on the Board of Adjustment for the City of Mesa, Arizona, and

also previously served on the City Planning and Zoning Board for the City of Mesa, Arizona.

Farnsworth is a graduate of Brigham

Young University with a B.S.

in real estate finance and is a licensed Arizona real estate broker.

Among other professional experiences,

qualifications, and skills, Mr.

Farnsworth has substantial knowledge of the usefulness of the Company’s services in the real

estate industry and has extensive contacts in the industry.

In addition, Mr.

Farnsworth has extensive experience in managing companies,

as well as a strong background in finance, all of which are vital to the overall success of the Company.

Omi has been a director since 2005.

Omi has been working as a senior programmer for Zynga since November

2009, writing online games in Flash for Facebook.

From January 2009 to November 2009, Mr.

Omi worked at Monkey Gods, LLC, a

video game provider, designing Facebook applications as a programmer.

From October 2006 to January 2009, Mr.

Omi worked at

Flektor, Inc., focused on Flash 9 / Flex 2 / Action Script 3, C, XML and Ruby programming for a web application, including

video and image processing.

Flektor was acquired by FOX Interactive Media in 2007.

From October 1996 to June 2006, Greg held

the position of Senior Programmer with Naughty Dog, a computer game company, which was acquired by Sony.

He has also held

programming positions with 3DO (from 1992 to 1996), TekMagic (during 1992), Epyx (from 1986 to 1992), Atari (during 1991),

Nexa (from 1982 to 1983 and 1985 to 1986) and HES (during 1983).

Omi assists the Company in overseeing all software

development activities and improvements to its technologies including development of a web-based executive dashboard to

gather information and functionalities for cameras, video services, digital video recorders and access control.

attended DeVry Institute in Phoenix, Arizona from 1979 to 1980 where he studied industrial electronics engineering.

other professional experiences, qualifications, and skills, Mr.

Omi’s expertise and skills in computer programming,

software development, and writing code are instrumental to the development of our products.

Staudohar was appointed to Iveda’s Board in January 2010.

Since 2003, Mr.

Staudohar has served as President of Lakeview

Enterprises, LLC, providing business advisory and consulting services to companies throughout the Phoenix metropolitan area.

2007 to 2009, Mr.

Staudohar served as the Chief Financial Officer and as a director of Veritest International Corporation, a startup

company that raised approximately $2.8 million dollars for the development of a drug screening device.

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

Ly also served as our President from October 2009 to February 2014.

Ly served in Business-to-Business Sales for T-Mobile USA, a wireless

network and communications company, from August 2002 to September 2003.

From September 2001 to July 2002, Mr.

Ly served as Market Manager

of Door To Door Storage, a moving and portable storage company.

Ly served as an Applications Engineer at Metricom, Inc., the first

micro cellular data network, from November 1998 to August 2001.

Ly holds a Bachelor of Science Degree in Civil Engineering with a

minor in International Business from San Francisco State University.

We believe Mr.

Ly’s position as our Chief Executive Officer,

his extensive knowledge and understanding of the video surveillance and AI industries, and his business and engineering expertise and

management skills provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve on

our Board of Directors.

Brilon has served as our Chief Financial Officer since December 2013.

He was also our President from February 2014 to July 2018

and Treasurer from December 2013 to July 2018 and was appointed Treasurer again on December 15, 2021.

Brilon served as our Executive

Vice President of Business Development from December 2013 to February 2014 and as our interim Chief Financial Officer and Treasurer from

December 2008 to August 2010.

Brilon is a Board Director and independent contract CFO for Bimergen Energy Corporation from October

2021 to present.

Brilon joined New Gen Management Services, Inc.

in July 2017 as the CFO (subsequently becoming President and CFO

of New Gen in July 2018).

Brilon was the President, Chief Financial Officer, Corporate Secretary, and Director of both Vext Science,

Inc and New Gen until he resigned in February 2020.

Brilon served as Chief Financial Officer and Executive Vice President of Business

Development of Brain State Technologies, a brainwave optimization software licensing and hardware company, from August 2010 to November

From January 2010 to August 2010, Mr.

Brilon served as Chief Financial Officer of MD Helicopters, a manufacturer of commercial

and light military helicopters.

Brilon also served as Chief Executive Officer, President, and Chief Financial Officer of InPlay Technologies

NPLA), formerly, Duraswitch (NASDAQ:

DSWT), a company that licensed patented electronic switch technology and manufactured digital

pen technology, from November 1998 to June 2007.

Brilon served as Chief Financial Officer of Gietz Master Builders from 1997 to 1998,

Corporate Controller of Rental Service Corp.

RRR) from 1995 to 1996, Chief Financial Officer and Vice President of Operations

of DataHand Systems, Inc.

from 1993 to 1995, and Chief Financial Officer of Go-Video (AMEX:VCR) from 1986 to 1993.

Brilon is a certified

public accountant and practiced with several leading accounting firms, including McGladrey Pullen, Ernst and Young and Deloitte and Touche.

Brilon holds a Bachelor of Science degree in Business Administration from the University of Iowa.

Omi has served as our Chief Technology Officer since May 2021.

Omi served as director of our company from October 2009

to November 2016.

Omi served as a senior programmer for Zynga, an online and mobile social gaming company, from November 2009 to

March 2014 and then again briefly in 2016 and 2019 as architect.

Omi served as senior engineer at Tesla, an electric vehicle manufacturer,

from October 2016 to October 2017.

Prior to that, Mr.

Omi served as a programmer for Monkey Gods, LLC, a video game developer, from January

2009 to November 2009.

Omi also served as Senior Programmer for Flektor, Inc., a developer of online audio and video editing tools,

from October 2006 to January 2009.

From October 1996 to June 2006, Mr.

Omi served as a Senior Programmer for Naughty Dog, a computer

game developer.

Prior to that, Mr.

Omi served in programming roles for 3DO from 1992 to 1996, TekMagic in 1992, Epyx from 1986 to 1992,

Atari in 1991, Nexa from 1982 to 1983 and 1985 to 1986, and HES in 1983.

Omi attended DeVry Institute in Phoenix, Arizona from 1979

to 1980 where he studied industrial electronics engineering.

Farnsworth has served as a director of our company since January 2010.

Farnsworth has served as President and as a director of

Farnsworth Realty & Management Co., an Arizona-based privately held real estate company, and as a director of Farnsworth Development,

a closely held real estate developer, since 1995.

Farnsworth has also served as a director of The Farnsworth Companies since 2008.

Farnsworth has also served as a director of Venture West Aviation since 2022.

From 1990 to 1995, Mr.

Staudohar served as Vice Chairman and Chief Financial Officer of RSI Enterprises, Inc., a multi-million dollar profitable asset

recovery business located in Phoenix, Arizona.

Prior to 1994, Mr.

Staudohar held a number of financial positions, including serving

as Vice President and Corporate Controller of Modern Merchandising, Inc.

from 1981 until its acquisition by Best Products, Inc.

in 1983, when Mr.

Staudohar was promoted to Chief Financial Officer and Senior Vice President of Best Products, a $3 billion retail

organization, positions he held until 1989.

Staudohar also served from 1973-1981 as Vice President and Controller of B.

Bookseller during a period when the retail chain grew from 66 to 650 stores.

to his financial experience, Mr.

Staudohar previously served on the Board of Directors of Smith & Wesson Holding Corporation,

the publicly traded parent company of the gun manufacturer from 2002 to 2004.

He also served as the Chair of Smith & Wesson’s

Audit Committee and as a member of the Nominating Committee.

Staudohar presently serves on the Board of Directors and on multiple

committees of the Phoenix Sister Cities Commission, a not for profit company.

Staudohar holds a B.A.

from the University of

Among other professional experiences, qualifications and skills, Mr.

Staudohar’s knowledge and understanding of

the capital markets and his in-depth experience in corporate finance and business management will provide valuable assistance to

the Company in oversight of financial management, internal controls, and strategic planning.

Staudohar also serves as Chairman

of the Company’s Audit Committee.

Gillen was appointed to Iveda’s Board in November 2011.

Gillen is the president of the Law Offices of Robert

Gillen, Ltd., a law firm assisting clients with domestic and international planning, with offices located in Scottsdale, Arizona

and Naperville, Illinois.

Gillen is an international speaker and has extensive experience in advising businesses and professionals

on tax and legal matters.

Gillen graduated from the University of Illinois in 1976 with a Bachelor of Science in Business

Administration and from IIT Chicago Kent College of Law in 1979 with a Juris Doctor Degree with Honors.

Gillen has been active

in the cellular industry since its inception and has assisted in the development of the cellular network.

Gillen has served

on various boards of directors and advisory committees for growing companies, as well as donating his time and expertise on not-for-profit

Gillen has also authored many articles on business, tax and legal matters.

Chen-Ho (Alex) Kuo - Mr.

was appointed to Iveda’s Board in November 2011.

In 2009, Alex Kuo was hired by Iveda as a consultant to facilitate the acquisition

of MEGAsys—Taiwan.

Shortly after the completion of the acquisition, in May 2011, Iveda hired Mr.

Kuo as Senior Vice President

of Global Strategies—Asia, and he was recently promoted to Chief Strategy Officer.

Kuo has 20 years of executive experience

at Acer Group.

Prior to Acer, he was General Manager at Servex/Anextek from 2001 to 2007.

He also held Vice President and Senior

Vice President positions at China Security and Surveillance Technology (NYSE:CSR), FalconStor Software (NASDAQ:

FALC), and Global

Data SolutionsLimited from 2007 to 2010.

Kuo also serves as an instructor at the Cloud Computing Industry Association of Taiwan.

Kuo received his Masters of Science and Technology Innovation Management from George Washington University and his undergraduate

degree from National Taiwan University.

Alejandro Franco –

Franco was appointed to Iveda’s Board in November 2011.

Franco has been serving Iveda as a consultant for two years,

with respect to business development and strategic partnership opportunities in Mexico.

He has been advising and facilitating the

Company’s negotiations with a telecommunications company in Mexico.

Franco has 26 years of cross-industry experience

and accomplishment with leading start-up and high-growth companies.

He is known for delivering strong and sustainable revenue and

profit gain in highly competitive markets throughout China, Taiwan, USA, Mexico, and Brazil.

He has extensive experience in leading

large-scale, complex, global operations in China, Taiwan, Latin America, and the U.S.

Franco is the president and founder of

Amextel in Mexico.

He also founded and was president of TVM, Inc., in Mexico from 1985 to 1988 and Bela Corp.

Farnsworth served as President

of Alfred’s International, with operations in China and Korea.

Prior to that, Mr.

Farnsworth served as President of Farnsworth

International, a real estate investment company based in Taipei, Taiwan from 1987 to 1991.

Farnsworth holds a Bachelor of Science

degree in Real Estate Finance from Brigham Young University and is a licensed real estate broker in Arizona.

We believe Mr.

experience leading companies with operations in Asia and his business and management skills provide the requisite qualifications, skills,

perspectives, and experience that make him well qualified to serve on our Board of Directors.

Franco has served as a director of our company since November 2011.

Franco has also served as a consultant to our company since

2011, advising on business development and strategic partnership opportunities in Mexico.

Franco is the founder and has served as

President of Amextel, a telecommunications company in Mexico, since June 2003.

Franco founded the Mexican American Business Council,

a non-profit organization facilitating border relationships to increase business, support trade growth and investments, and has been

the CEO since June 2015.

Franco also founded and served as President of Bela Corp., a cloud technology and services company, from

1988 to 2000.

Franco has a degree in Economics from UNAM University, Mexico, a degree in Industrial Design from IBERO University,

Mexico, and Masters in Theology from Oblate University, San Antonio Texas.

Iveda’s

directors, as named above, will serve until the next annual meeting of Iveda’s shareholders or until their successors are

duly elected and qualified.

Directors will be elected for one-year terms at the annual shareholders meeting.

There is no arrangement

or understanding between any of the directors or officers of Iveda and any other person pursuant to which any director or officer

was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management

shareholders will exercise their voting rights to continue to elect the current directors to Iveda’s board.

There are also

no arrangements, agreements or understandings between non-management shareholders that may directly or indirectly participate in

or influence the management of Iveda’s affairs.

There are no agreements

or understandings for any officer or director to resign at the request of another person, and none of the officers or directors

are acting on behalf of, or will act at the direction of, any other person.

There are no family relationships among our executive

officers and directors.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the

Exchange Act requires Iveda’s directors and executive officers, and persons who beneficially own more than ten percent of

a registered class of our equity securities, to file with the SEC initial reports of beneficial ownership and reports of changes

in beneficial ownership of our common stock.

The rules promulgated by the SEC under Section 16(a) of the Exchange Act require those

persons to furnish us with copies of all reports filed with the SEC pursuant to Section 16(a).

The information in this section

is based solely upon a review of Forms 3, 4, and 5 received by us.

We believe that Iveda’s

executive officers, directors and 10% shareholders timely complied with their filing requirements during the year ended December

31, 2013, with the following exceptions:

1) On June 5, 2013, Mr.

Joe Farnsworth filed an untimely Form 4 with respect to an acquisition

of shares acquired on January 23, 2013.

Code of Ethics

We have adopted a

Code of Ethics, which was amended and restated on April 13, 2010.

We adopted a Code of Conduct and Ethics (filed as Exhibit 14.1

to Form 10-K, filed on April 15, 2010) that applies to all of our officers, directors, and employees, and a separate Code of Ethics

(filed as Exhibit 14.2 to Form 10-K, filed on April 15, 2010) for our Chief Executive Officer and Senior Financial Officers that

supplements our Code of Conduct and Ethics.

Each of these policies comprises written standards that are reasonably designed to

deter wrongdoing and to promote the behavior described in Item 406 of Regulation S-K promulgated by the SEC.

Nominating Procedures

There have been no

material changes to the procedures by which our shareholders may recommend nominees to the Board of Directors during our last fiscal

Prior to that, Mr.

Franco founded and served as President of TVM, Inc., a television and technology company in Mexico,

from 1985 to 1988.

Franco attended UNAM University, Mexico where he studied Economics.

Franco also attended IBERO University,

Mexico, where he studied Industrial Design.

Franco holds a Master degree in Theology from the Oblate School of Theology in San Antonio,

We believe Mr.

Franco’s experience leading businesses with operations in Asia and Mexico, his experience as a consultant

for our company, his extensive knowledge and understanding of the telecommunications and cloud technology industries, and his business

and management skills provide the requisite qualifications, skills, perspectives, and experience that make him well qualified to serve

on our Board of Directors.

Gillen has served as a director of our company since November 2011.

Gillen founded and has served as President of the Law

Offices of Robert D.

Gillen, Ltd., a law firm located in Scottsdale, Arizona and Naperville, Illinois, which specializes in advising

small- and medium-size businesses on domestic and international tax planning, since 1979.

Gillen retired in October 2014.

holds a Bachelor of Science degree in Business Administration from the University of Illinois and a J.D.

from the Illinois Institute

of Technology – Chicago Kent College of Law.

Gillen also has extensive experience educating, CPAs, attorneys, and other financial

and business professionals about asset protection and tax planning.

We believe Mr.

Gillen’s experience advising, clients operating

the cellular industry, his experience leading a business involved in the lease and sale of cellular sites, his experience navigating

international business and legal issues, and his prior board experience provide the requisite qualifications, skills, perspectives, and

experience that make him well qualified to serve on our Board of Directors.

Relationships

are no family relationships among any of our directors, director nominees or executive officers.

of Directors and Executive Officers

number of directors of the Company shall be not less than one nor more than thirteen.

Each of our directors holds office until the next

annual meeting of shareholders and until his or her successor shall have been elected and qualified, until his or her resignation, or

until his or her office is otherwise vacated in accordance with our articles of incorporation.

officers are elected by and serve at the discretion of the board of directors.

of Directors and Board Committees

board of directors consists of four directors, three of whom are independent as such term is defined by the Nasdaq Capital Market.

have determined that Joseph Farnsworth, Alejandro Franco and Robert D.

Gillen satisfy the “independence” requirements under

NASDAQ Rule 5605.

have established three committees under the board of directors:

an audit committee, a compensation committee and a nomination and corporate

governance committee, and adopted a charter for each of the three committees.

Copies of our committee charters are posted on our corporate

investor relations website.

committee’s members and functions are described below.

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

Farnsworth is the chair

of our audit committee.

The audit committee will oversee our accounting and financial reporting processes and the audits of the financial

statements of our company.

The audit committee is responsible for, among other things:

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

reviewing with the independent

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

discussing the annual audited

financial statements with management and the independent auditors;

reviewing the adequacy

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

financial risk exposures;

reviewing and approving

all proposed related party transactions;

meeting separately and

periodically with management and the independent auditors;

monitoring compliance with

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

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

Farnsworth is the

chair of our compensation committee.

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

reviewing and

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

reviewing and recommending

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

reviewing periodically

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

selecting compensation

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

from management.

and Corporate Governance Committee.

Our Nominations and Corporate Governance committee consists of Joseph Farnsworth, Alejandro Franco

and Robert D.

Gillen is the chair of our Nominations and Corporate Governance committee.

The nominating and corporate governance

committee is responsible for, among other things, (i) determining the qualifications, qualities and skills required to be a director

of the Company and evaluating, selecting and approving nominees to serve as directors, (ii) periodically reviewing, assessing and making

recommendations for changes to the Board of Directors and its committees and (iii) overseeing the process for evaluation of the Board

of Directors.

Pursuant to the nominating and corporate governance committee charter, the nominating and corporate governance committee

has the authority to delegate all or a portion of its duties and responsibilities to a subcommittee of the nominating and corporate governance

In addition, the nominating and corporate governance committee has unrestricted access to and assistance from our officers,

employees and independent auditors and the authority to employ experts, consultants and professionals to assist with performance of their

The nominating and corporate governance committee is also responsible for establishing procedures regarding director nominees

put forward by stockholders.

The committee is also responsible for establishing procedures for shareholder communications with the Board

of Directors.

in Certain Legal Proceedings

of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has

any been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final

order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding

of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.

set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any

transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations

of Business Conduct and Ethics

have adopted a code of business conduct and ethics which is applicable to all of our directors, executive officers and employees.

of the code of business conduct and ethics is posted on our corporate investor relations website as required for our listing on the Nasdaq

Capital Market.

11 – EXECUTIVE COMPENSATION

The information required by Item 11 will

be furnished on or prior to April 30, 2014 (and is hereby incorporated by reference) pursuant to a definitive proxy statement in

connection with the Company’s annual meeting of stockholders in 2014.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND

MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding security ownership

of certain beneficial owners and management and related stockholder matters will be included in our definitive proxy statement

for our annual meeting of stockholders in 2014, and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

AND DIRECTOR INDEPENDENCE

Information regarding related transactions will be included

in our definitive proxy statement for our annual meeting of stockholders in 2014, and is incorporated herein by reference.

Director Independence

standards of the NYSE Amex (to which rules and regulations Iveda is not subject), Iveda’s Board has determined that Mr.

Staudohar, Mr.

Gillen, and Mr.

Franco each qualify as an independent director and as a member of the Audit Committee,

Nominating and Compensation Committees, as applicable.

No other directors are independent under these standards.

Iveda did not

consider any relationship or transaction between itself and these independent directors not already disclosed in this report in

making this determination.

Compensation Table

believe that it is important to design a compensation program that supports our business strategy.

As a result, our compensation program

emphasizes performance-based compensation and is designed to support our business goals, promote short- and long-term growth, and attract,

retain, and motivate key talent.

Our compensation program is comprised of three components:

base salary, bonus awards, and long-term

performance incentives.

believe that our executive officers and other key employees should have a portion of their potential annual compensation tied to our

profitability and our other goals.

Additionally, we seek to align the ability to earn long-term incentives directly with the interests

of our stockholders through the use of equity-based incentives.

We strive to ensure compensation is competitive with companies similar

however, we acknowledge that base salaries are currently below market.

following table sets forth certain information with respect to compensation for the years ended December 31, 2024 and 2023, earned by

or paid to our chief executive officer and principal executive officer, our principal financial officer, and our other most highly compensated

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

and Principal Position

Other Compensation (4)

Chairman and Chief Executive Officer

Former President (5)

Chief Financial Officer, Treasurer and Corporate Secretary

Chief Technology Officer

The amounts in this column reflect

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

The amounts in this column reflect the aggregate probable

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

ASC Topic 718, Stock Compensation .

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

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

The amounts in this column reflect the aggregate probable

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

ASC Topic 718, Stock Compensation .

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

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

The amounts in this column reflect the amount of perquisites

related to a vehicle allowance.

Resigned effective December 31, 2023.

Equity Awards as of December 31, 2024

following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2024.

Equity Awards at Fiscal Year Ended December 31, 2024

Name and Principal Position

Number of Securities Underlying Unexercised Options/Warrants (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards:

Number of Securities Underlying Unexercised Unearned Options

Option Exercise Price

Option Expiration Date

Chairman and Chief Executive Officer

Chief Financial Officer

Sid Sung President

Chief Technology Officer

became fully vested on the date of grant.

The options became fully

vested on December 31, 2024.

Compensation Plans

January 18, 2010, we adopted the 2010 Stock Option Plan (the “2010 Option Plan”), which allows the Board to grant options

to purchase up to 15,625 shares of common stock to directors, officers, key employees, and service providers of our company.

the 2010 Option Plan was amended to increase the number of shares issuable under the 2010 Option Plan to 375,000 shares.

In 2012, 2010

Option Plan was again amended to increase the number of shares issuable under the 2010 Option Plan to 203,125 shares.

The shares issuable

pursuant to the 2010 Option Plan are registered with the SEC under Forms S-8 filed on February 4, 2010 (No.

333- 164691), June 24, 2011

333-175143), and December 4, 2013 (No.

The 2010 Option Plan expired on January 18, 2020.

As of December 31, 2024 there

were 23,659 options outstanding under the 2010 Option Plan.

December 15, 2020, we adopted the Iveda Solutions, Inc.

2020 Plan (the “2020 Plan”).

The 2020 Plan has a maximum of 156,250

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

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

under the 2020 Option Plan.

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

October 7, 2022 (No.

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 December 31, 2024 and December 31, 2023, there were 217,056 and 162,265 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,

as amended (the “Code”), or as options not qualified under Section 422 of the Code.

All options are issued with an exercise

price at or above the fair market value of the common stock on the date of the grant as determined by our Board of Directors.

stock option plan awards of restricted stock are intended to qualify as deductible performance-based compensation under Section 162(m)

Incentive Stock Option awards of unrestricted stock are not designed to be deductible to us under Section 162(m).

the plans, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant.

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

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

The estimated fair value of options

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

At December 31, 2024, we had approximately

$7,854 unrecognized stock-based compensation.

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

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

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

For the year ended December 31, 2023,

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

services during the year ended December 31, 2024.

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

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

Fees Earned or paid in Cash

2024 Options Awards

Non-Equity Incentive Plan Compensation

Nonqualified Deferred Compensation Earnings

All Other Compensation

Joseph Farnsworth

Alejandro Franco

Robert Gillen

As of December 31, 2024, Mr.

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

As of December 31, 2024, Mr.

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

As of December 31, 2024, Mr.

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

Incentive-Based

Compensation Recovery Policy

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

Exchange Act.

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

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

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

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

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

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

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

of shares of our common stock by:

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

(ii) each member

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

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

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

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

Name of Beneficial Owner

Common Shares

% of Common Shares

Directors and Officers

Gregory Omi (3)

Joseph Farnsworth (4)

Alejandro Franco (5)

All Directors and Officers

Includes options

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

Includes options to purchase

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

Includes options to purchase

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

Consists of (a) options

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

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

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

Consists of (a) options

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

stock held by Amextel S.A.

an entity owned by Mr.

Consists (a) options to

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

Authorized for Issuance Under Equity Compensation Plans

following table shows the number of securities to be issued upon exercise of outstanding options under equity compensation plans approved

by our stockholders and under equity compensation plans not approved by our stockholders as of December 31, 2024.

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

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

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

Equity compensation plans approved by stockholders (1)

Equity compensation plans approved by stockholders (2)

Equity compensation plans not approved by stockholders (3)

our 2010 and 2012 Option Plan.

Consists of our 2020 Option

Warrants issued not under

13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

with Related Persons, Promoters and Certain Control Persons

than equity and other compensation, termination, change in control and other similar arrangements, which are described under “Executive

and Director Compensation.”, since January 1, 2024 there are no transactions to which we were a party in which (i) the amount involved

exceeded or will exceed the lesser of $120,000 of one percent (1%) of our average total assets at year-end for the last two completed

fiscal years and (ii) any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the

immediate family of, or person sharing the household with, any of the foregoing persons, had or will have a direct or indirect material

Board of Directors has undertaken a review of its composition, the composition of its committees, and the independence of each director.

Our Board of Directors has determined, after considering all of the relevant facts and circumstances, that Messrs.

Farnsworth, Franco,

Gillen, and Omi do not have a relationship with us that would interfere with their exercise of independent judgment in carrying out their

responsibilities as a director and that each of these directors is “independent” as that term is defined under the applicable

rules and regulations of the SEC.

In making this determination, our Board of Directors considered the current and prior relationships

that each non-employee director has with our company and all other facts and circumstances our Board of Directors deemed relevant in

determining their independence, including the beneficial ownership of our capital stock by each non-employee director.

Our Board of Directors

did not consider any relationship or transaction between our company and the independent directors not already disclosed in this Annual

Report on Form 10-K in making this determination.

Ly is an employee director.

Audit Committee currently consists of Messrs.

Farnsworth (Chairman), Franco and Gillen, each of whom is an independent director of our

The Compensation Committee currently consists of Messrs.

Farnsworth (Chairman), Franco and Gillen, each of whom is an independent

director of our company.

The Nominations and Corporate Governance Committee currently consists of Messrs.

Gillen (Chairman), Farnsworth,

and Franco, each of whom is an independent director of our company.

14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

On October 17, 2011,

Iveda Solutions, Inc.

Iveda ”), with the approval of the Audit Committee of the Board of Directors, appointed

Albert Wong & Co.

AW ”) as Iveda’s principal accounting firm.

Since 2008, AW has served as the

principal accounting firm for Sole Vision Technologies (“

MegaSys ”), a Taiwanese corporation acquired by Iveda

in April 2011.

Due to the larger business comprised by the MegaSys subsidiary, Iveda decided to replace its former principal accounting

firm, Farber Hass Hurley LLP (“

FHH ”), with AW in order to increase efficiencies and reduce costs in its auditing

FHH will continue to assist AW with the audit of the U.S.

operations of Iveda.

The Company paid or accrued the following fees in each of the

prior two fiscal years to Albert Wong & Co.

and Farber Hass Hurley LLP:

Audit-related fees

All other fees

Audit fees include

fees for the audit of our annual financial statements, reviews of our quarterly financial statements, and related consents for

documents filed with the SEC.

As part of its responsibility

for oversight of the independent registered public accountants, the Audit Committee has established a pre-approval policy for engaging

audit and permitted non-audit services provided by our independent registered public accountants, Farber Hass Hurley LLP and Albert

Wong & Company.

In accordance with this policy, each type of audit, audit-related, tax and other permitted service to be provided

by the independent auditors is specifically described and each such service, together with a fee level or budgeted amount for such

service, is pre-approved by the Audit Committee.

The Audit Committee has delegated authority to its Chairman to pre-approve additional

non-audit services (provided such services are not prohibited by applicable law) up to a pre-established aggregate dollar limit.

All services pre-approved by the Chairman of the Audit Committee must be presented at the next Audit Committee meeting for review

and ratification.

All of the services provided by Albert Wong & Co.

and Farber Hass Hurley LLP described above were approved

by the Audit Committee for 2011.

Iveda’s principal

accountant, Albert Wong & Co., and Farber Hass Hurley LLP, did not engage any other persons or firms other than their respective

full-time, permanent employees .

Paid to Independent Registered Public Accounting Firm

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

as our principal accounting firm.

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

February 2025.

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

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

During 2024 we paid $93,500

to BF Borgers for the audit of 2023.

BF Borgers was sanctioned by the SEC in May 2024.

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

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

We paid KC $189,500 for their 10-Q reviews and their work on the re-audit until we replaced them with Weinberg in February 2025.

KC did not finish or opine on the 2023 or 2024 audits.

No other fees were paid to KC.

Committee Pre-Approval Policies

part of its responsibility for oversight of the independent registered public accountants, the Audit Committee has established a pre-approval

policy for engaging audit and permitted non-audit services provided by our independent registered public accountants, Weinberg.

In accordance

with this policy, each type of audit, audit-related, tax and other permitted service to be provided by the independent auditors is specifically

described and each such service, together with a fee level or budgeted amount for such service, is pre-approved by the Audit Committee.

The Audit Committee has delegated authority to its Chairman to pre-approve additional non-audit services (provided such services are

not prohibited by applicable law) up to a pre-established aggregate dollar limit.

All services pre-approved by the Chairman of the Audit

Committee must be presented at the next Audit Committee meeting for review and ratification.

All of the services provided by Weinberg

described above were approved by the Audit Committee pursuant to our Audit Committee’s pre-approval policy.

principal accountants, Weinberg, did not engage any other persons or firms other than their respective full-time, permanent employees.

15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

as otherwise indicated, all exhibits were previously filed)

Description of Exhibits

Financial Statements and Financial

Statement Schedules

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

Other schedules are omitted

because they are not applicable, not required, or because required information is included in the Consolidated Financial Statements

or notes thereto.

Agreement and Plan of Merger, dated March 21, 2011, by and among Iveda Solutions, Inc., a Nevada corporation, Sole-Vision Technologies, Inc.

(doing business as MEGAsys), a corporation organized under the laws of the Republic of China, and the shareholders of MEGAsys (Incorporated by reference to the Form 10-K/A filed on 2/9/2012)

Articles of Incorporation of Charmed Homes Inc.

(Incorporated by reference to the Form SB-2 filed on 4/27/2007)

Bylaws of Iveda Solutions, Inc.

(Incorporated by reference to the Form 10-K filed on 3/31/2014)

Amendment to Articles of Incorporation, filed

with the Nevada Secretary of State on September 9, 2009 (Incorporated by reference to the Form 8-K filed on 10/21/2009)

Articles of Merger filed with the Secretary of State of Nevada

on December 28, 2010, and dated effective December 31, 2010

(Incorporated by reference to the Form 8-K filed on January 4,

Specimen Stock Certificate (Incorporated by reference to the Form

SB-2 filed on 4/27/2007)

Form of Stock Option Agreement under the IntelaSight, Inc.

Stock Option Plan (Incorporated by reference to the Form S-4/A1 filed on 7/10/2009)

Form of Common Stock Purchase Warrant issued by IntelaSight, Inc.

Specimen Stock Certificate (Incorporated by reference to the Form SB-2 filed on 4/27/2007)

Form of Common Stock Purchase Warrant issued by Iveda Corporation in conjunction with the Merger (Incorporated by reference to the Form 8-K filed on 10/21/2009)

2010 Stock Option Plan, dated January 18, 2010 (Incorporated by reference to the Form S-8 filed on 2/4/2010)

Form of Notice of Grant of Stock Option under the Iveda Solutions, Inc.

2010 Stock Option Plan, as amended (Incorporated by reference to Form S-8 filed on 6/24/2011)

Form of Stock Option Agreement under the Iveda Solutions, Inc.

2010 Stock Option Plan, as amended (Incorporated by reference to Form S-8 filed on 6/24/2011)

Form of Stock Option Exercise Notice under the Iveda Solutions, Inc.

2010 Stock Option Plan, as amended (Incorporated by reference to Form S-8 filed on 6/24/2011)

2020 Stock Option Plan, dated January 18, 2020 (filed with amended Form 10-12g filed on 10/25/2021)

Form of Warrant to purchase common stock to officers, directors, employees, and consultants (Incorporated by reference to the Form S-1 filed on 12/30/2021)

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

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

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

(Incorporated by reference to the Form S-4/A2 filed on 8/2/2009)

2009 Stock Option Plan, dated October 15, 2009 (Incorporated by

reference to the Form 8-K filed on 10/21/2009)

Form of Common Stock Purchase Warrant issued by Iveda Corporation

in conjunction with the Merger (Incorporated by reference to the Form 8-K filed on 10/21/2009)

2010 Stock Option Plan, dated January 18, 2010 (Incorporated by

reference to the Form S-8 filed on 2/4/2010)

Form of Notice of Grant of Stock Option under the Iveda Solutions,

2010 Stock Option Plan, as amended (Incorporated by reference to

Form S-8 filed on 6/24/2011)

Form of Stock Option Agreement under the Iveda Solutions,

2010 Stock Option Plan, as amended (Incorporated by reference to Form

S-8 filed on 6/24/2011)

Form of Stock Option Exercise Notice under the Iveda Solutions,

2010 Stock Option Plan, as amended (Incorporated by reference to

Form S-8 filed on 6/24/2011)

Application Development Service Agreement dated July 14, 2006 by

and between Axis Communications AB and IntelaSight, Inc.

(Incorporated

by reference to the Form S-4/A2 filed on 8/2/2009)

Partner Agreement dated January 30, 2007 by and between Milestone

Systems, Inc.

Partner Agreement dated January 30, 2007 by and between Milestone Systems, Inc.

and IntelaSight, Inc.

(Incorporated by reference to the

Form S-4/A1 filed on 7/10/2009)

Solution Partner Agreement dated March 13, 2008 by and between

Milestone Systems A/S and IntelaSight, Inc.

(Incorporated by reference to the Form S-4/A1 filed on 7/10/2009)

Channel Partner Program Membership Agreement –

Gold Solution

Partner Level –

dated June 23, 2009 by and between Axis

Communications Inc.

Solution Partner Agreement dated March 13, 2008 by and between Milestone Systems A/S and IntelaSight, Inc.

(Incorporated by reference to the Form S-4/A1 filed on 7/10/2009)

Channel Partner Program Membership Agreement – Gold Solution Partner Level – dated June 23, 2009 by and between Axis Communications Inc.

and IntelaSight, Inc.

(Incorporated by reference to the Form S-4/A1 filed

on 7/10/2009)

Stock Purchase Agreement, dated October 15, 2009, by and among

Iveda Corporation, IntelaSight, Inc., Ian Quinn and Kevin Liggins

(Incorporated by reference to the Form 8-K filed on 10/21/2009)

Subscription Agreement, dated July 26, 2010 (Incorporated by reference

to Form 10-Q filed on November 12, 2010)

Line of Credit Promissory Note, dated September 15, 2010 (Incorporated

by reference to Form 10-Q filed on November 12, 2010)

Agreement for Service, dated October 20, 2010 (Incorporated by

reference to Form 10-Q filed on November 12, 2010)

Consulting Agreement, dated October 25, 2010 (Incorporated by reference

to Form 10-Q filed on November 12, 2010)

Operating Level Agreement, dated October 25, 2010 (Incorporated

by reference to Form 10-Q filed on November 12, 2010)

Side Letter, dated March 21, 2011, by and among Iveda Solutions,

Inc., a Nevada corporation, Sole-Vision Technologies, Inc.

(doing business as MegaSys), a corporation organized

under the laws of the Republic of China, and the shareholders of MegaSys (Incorporated by reference to Form 10-K filed on

Non-Exclusive Strategic Collaboration Agreement between Iveda

Solutions, Inc.

(Incorporated by reference to the Form S-4/A1 filed on 7/10/2009)

Stock Purchase Agreement, dated October 15, 2009, by and among Iveda Corporation, IntelaSight, Inc., Ian Quinn and Kevin Liggins (Incorporated by reference to the Form 8-K filed on 10/21/2009)

Side Letter, dated March 21, 2011, by and among Iveda Solutions, Inc., a Nevada corporation, Sole-Vision Technologies, Inc.

(doing business as MEGAsys), a corporation organized under the laws of the Republic of China, and the shareholders of MEGAsys (Incorporated by reference to Form 10-K filed on 3/30/2011)

Non-Exclusive Strategic Collaboration Agreement between Iveda Solutions, Inc.

and Telmex, U.S.A., LLC, dated October 28, 2011 (Incorporated by reference to Form 10-Q/A filed on 3/7/2012)

2010 Digital Video Remote Monitoring Recording System Procurement

Contract between Sole-Vision Technology, Inc.

and New Taipei

City Police Department Purchasing Authority, dated January 9, 2012 (Incorporated by reference

to Form 10-K filed on 3/30/2012).

2010 Digital Video Remote Monitoring Recording System Procurement Contract between Sole-Vision Technology, Inc.

and New Taipei City Police Department Purchasing Authority, dated January 9, 2012 (Incorporated by reference to Form 10-K filed on 3/30/2012)

Consulting Agreement between Iveda Solutions, Inc.

dated November 2, 2011 (Incorporated by reference to

Form 10-K/A filed on 5/11/2012).

and Amextel S.A.

dated November 2, 2011 (Incorporated by reference to Form 10-K/A filed on 5/11/2012)

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

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

1 unchanged sentence

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

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 –

Chief Executive Officer

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 –

Chief Financial Officer

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 –

Chief Executive Officer

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 –

Chief Financial Officer

The following financial information from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language):

(i) Condensed Consolidated Balance Sheets as of December 31, 2013 and December 31, 2012, (ii) Condensed Consolidated Statements of Operations for the years ended December 31, 2013 and 2012, (iii) Condensed Consolidated Statements of Stockholders’

Equity for the years ended December 31, 2013 and 2012, (iv) Condensed Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012, and (v) the Notes to Condensed Consolidated Financial Statements.

Consent of Weinberg & Company P.A.

Certification of Principal Executive Officer pursuant to Exchange Act Rule 15d-14(a)

Certification of Principal Financial Officer pursuant to Exchange Act Rule 15d-14(a)

Certification of Principal Executive Officer Pursuant to Section 1350

Certification of Principal Financial Officer Pursuant to Section 1350

Compensation Recovery Policy of Iveda Solutions, Inc.

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension

Schema Document

Inline XBRL Taxonomy Extension

Calculation Linkbase Document

Inline XBRL Taxonomy Extension

Definition Linkbase Document

Inline XBRL Taxonomy Extension

Label Linkbase Document

Inline XBRL Taxonomy Extension

Presentation Linkbase Document

Cover Page Interactive

Data File (embedded within the Inline XBRL document)

Filed herewith.

Furnished herewith.

*** Previously filed with Form 10-K on March 31, 2014

!VEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS YEARS ENDED

DECEMBER 31, 2013 AND 2012

INDEPENDENT AUDITORS’

CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS

ALBERT WONG & CO.

CERTIFIED PUBLIC ACCOUNTANTS

7th Floor, Nan Dao Commercial Building

359-361 Queen’s Road Central

B.Soc., Sc., ACA., LL.B., C.P.A.(Practising)

The board of directors and stockholders of

Pursuant to Rule 406T of

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

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

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

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

on its behalf by the undersigned, thereunto duly authorized.

June 16, 2025

IVEDA SOLUTIONS, INC.

(“the Company”)

Report of Independent Registered Public

Accounting Firm

We have audited the accompanying consolidated

balance sheet of Iveda Solutions, Inc.

and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements

of income, stockholders' equity and cash flows for the years then ended.

Chief Executive Officer and Chairman

June 16, 2025

IVEDA SOLUTIONS, INC.

/s/ Robert J.

Chief Financial Officer, Treasurer and Secretary

to the requirements of Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant

and in the capacities and on the dates indicated.

Executive Officer and Chairman

June 16, 2025

Executive Officer)

Financial Officer, Treasurer and Secretary

June 16, 2025

Financial and Accounting Officer)

Joseph Farnsworth

June 16, 2025

Alejandro Franco

June 16, 2025

TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Iveda Solutions, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of Iveda Solutions, Inc.

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

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

financial statements”).

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

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

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

Going Concern

The accompanying consolidated financial statements

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

As discussed in Note 1 to the financial statements, the

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

These conditions raise

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

Management’s plans in regard to these matters

are also described in Note 1 to the financial statements.

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

the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with

standards of the Public Company Accounting Oversight Board (United States).

Those standards require that we plan and perform the

audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

An audit also includes

assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial

statement presentation.

We believe that our audits provide a reasonable basis for our opinion.

We were not engaged to examine management’s

assertion about the effectiveness of the Company’s internal control over financial reporting as of December 31, 2013 and

2012 included in the Company’s Item 9A “Controls and Procedures”

in the Annual Report on Form 10-K and, accordingly,

we do not express an opinion thereon.

In our opinion, the consolidated financial

statements referred to above present fairly, in all material respects, the consolidated financial position of Iveda Solutions,

as of December 31, 2013 and 2012, and the results of its operations and its cash flows for the years then ended in conformity

with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial

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

As discussed in Note 1 to the consolidated

financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit.

the Company continues to experience negative cash flows from operations.

These factors raise substantial doubt about the Company's

ability to continue as a going concern.

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

from the outcome of this uncertainty.

Hong Kong, China

Albert Wong & Co.

March 28, 2014

Certified Public Accountants

IVEDA SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2013 AND 2012

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

based on our audits.

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

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

federal securities laws and the applicable

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

We conducted our audits in accordance with the standards

of the PCAOB.

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

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

The Company is not required to have, nor were we

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

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

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

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

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

that respond to those risks.

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

consolidated financial statements.

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

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

We believe that our audits provided a reasonable

basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a

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

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

subjective, or complex judgments.

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

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

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

Costs of Goods

As described further in Note 1 to the consolidated

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

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

These deferred costs totaled $507,308

as of December 31, 2024.

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

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

evaluation of the existence and realization of these assets.

Our audit procedures related to the existence and

realization of this asset included the following:

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

of these assets.

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

documentation relating to the purchase of these assets.

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

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

obligation and corresponding recognition of revenue.

The December 31, 2023 consolidated financial statements,

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

We have served as the Company’s auditor since

/s/ Weinberg & Company, P.A.

Weinberg & Company, P.A.

Los Angeles, California

April 15, 2025

SOLUTIONS, INC.

BALANCE SHEETS

31, 2024 AND 2023

December 31, 2024

December 31, 2023 (Restated)

CURRENT ASSETS

2 unchanged sentences

Accounts Receivable, Net

Deferred Cost of Goods

Inventory, Net

Other Current Assets

1 unchanged sentence

PROPERTY AND EQUIPMENT, NET

Intangible Assets, Net

Total Other Assets

T otal Assets

LIABILITIES AND STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts and Other Payables

Due to Related Parties, net of debt discount

Short Term Debt

Derivative Liability

Current Portion of Long-Term Debt

Total Current Liabilities

LONG-TERM DEBT AND CONVERTIBLE DEBENTURES, Net of Discount

DUE TO RELATED PARTY, Net of discount

STOCKHOLDERS’

LONG-TERM DEBT

STOCKHOLDERS’ EQUITY

Preferred Stock, $ 0.00001 par value;

100,000,000 shares

12,500,000 shares authorized

Series B Preferred Stock, $ 0.00001 par value;

500 shares authorized, no shares issued and outstanding as of December 31, 2024 and December 31, 2023.

Common Stock, $ 0.00001 par value;

300,000,000 shares authorized;

26,722,012 and 20,458,048 shares issued and outstanding as of December 31, 2013 and 2012, respectively

2,808,071 and 2,021,236 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

Additional Paid-In Capital

Accumulated Comprehensive Income (Loss)

Accumulated Comprehensive Loss

Accumulated Deficit

1 unchanged sentence

( 49,195,897 )

Total Stockholders’

Total Liabilities and Stockholders’

See accompanying Notes to Financial Statements.

IVEDA SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2013 AND 2012

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying Notes to Consolidated Financial Statements.

SOLUTIONS, INC.

STATEMENTS OF OPERATIONS

ENDED DECEMBER 31, 2024 AND 2023

2023 (Restated)

Equipment Sales

5 unchanged sentences

General & Administrative

Impairment of Goodwill

Research and Development

Total Operating Expenses

LOSS FROM OPERATIONS

( 4,070,303 )

( 4,040,875 )

OTHER INCOME (EXPENSE)

Foreign Currency Gain (Loss)

Loss on derivatives

Miscellaneous Income (Expense)

Loss from investment in Iveda Phils JV

Interest Income

2 unchanged sentences

LOSS BEFORE INCOME TAXES

( 3,948,435 )

( 4,124,358 )

BENEFIT (PROVISION) FOR INCOME TAXES

3 unchanged sentences

WEIGHTED AVERAGE SHARES

See accompanying Notes to Financial Statements.

IVEDA SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE

accompanying Notes to Consolidated Financial Statements.

COMPREHENSIVE

For the Year ended

$ ( 3,980,820 )

$ ( 4,142,666 )

Change in equity adjustment from foreign currency translation, net of tax

Other Comprehensive Loss

Foreign Currency Translation, Net of Tax

Comprehensive Loss

See accompanying Notes to Financial Statements.

IVEDA SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

YEARS ENDED DECEMBER 31, 2013 AND 2012

Comprehensive

Stockholder’s

Paid-in-Capital

Income (loss)

Equity (Deficit)

BALANCE AT DECEMBER 31, 2011

$ ( 4,039,612 )

Common Stock Issued for Cash

Costs of Capital

Stock Based Compensation

Debt Discount

Common Stock Issued for Services

Comprehensive Loss

BALANCE AT DECEMBER 31, 2012

$ ( 4,143,441 )

Common Stock Issued for Cash

Costs of Capital

Stock Based Compensation

Conversion of Debt to Stock

Common Stock Issued for Services

Exercise of options

accompanying Notes to Consolidated Financial Statements .

SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Comprehensive

Stockholders’

BALANCE AT December 31, 2022, as originally reported

Prior Period Adjustments

BALANCE AT December 31, 2022, as restated

Exercise of warrants issued August 2022

Warrants issued for services

Common Stock for Services

Stock Option Compensation

Comprehensive Loss

AT December 31, 2023, as restated

Common Stock for Services

Stock Option Compensation

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

Reverse Split fractional shares

Comprehensive Loss

BALANCE AT December 31, 2024

$ (21,801,790 )

See accompanying Notes to Financial Statements.

IVEDA SOLUTIONS, INC.

STATEMENTS OF CASH FLOWS YEARS ENDED

DECEMBER 31, 2013 AND 2012

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

on September 17, 2024.

accompanying Notes to Consolidated Financial Statements

SOLUTIONS, INC.

STATEMENTS OF CASH FLOWS

31, 2024 AND 2023

2023 (restated)

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 4,142,666 )

Adjustments to

Reconcile Net Loss to Net Cash Used by Operating Activities

Depreciation and

Amortization of

Debt Discount

Stock Compensation

Bad Debt Expense

Common stock issued

Impairment of Goodwill

Provision for

obsolete inventory

(Increase) Decrease

in Operating Assets:

Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities

Depreciation and Amortization

Stock Option Compensation

Common Stock Warrants Issued for Services

Common Stock issued for Services

Loss from Iveda Phils Joint Venture

(Increase) Decrease in Operating Assets

Accounts Receivable

Other Current

and Other Payables

cash used in operating activities

Deferred Cost of Goods

Other Current Assets

Increase (Decrease) in Accounts and Other Payables

Net Cash Used in Operating Activities

( 4,419,748 )

( 3,333,360 )

CASH FLOWS FROM INVESTING ACTIVITIES

Cash Acquired

in Acquisition

of Property and Equipment

cash (used in) investing activities

Purchase of Property and Equipment

Investment in Iveda Phils Joint Venture

Net Cash Used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES

Changes in Restricted Cash

Proceeds from (Payments on) Short-term

Notes Payable/Debt

Proceeds from (Payments to) Related

Proceeds from (Payments on) Long-term

Deferred Finance Costs, Net

Proceeds from Exercise of Stock Options

Common Stock Issued,

net of Costs of Capital

Net cash provided

by financing activities

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

Proceeds from (Payments to) Long-Term Debt

Common Stock Issued, Net of (Cost of Capital)

Net Cash Provided by Financing Activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH

NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENTS

Cash and Cash Equivalents - Beginning

CASH AND CASH EQUIVALENTS - END OF YEAR

SUPPLEMENTAL DISCLOSURE OF CASH FLOW

Stock issued for convertible debt and interest

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

( 2,209,982 )

( 2,573,340 )

Cash and Cash Equivalents- Beginning of Period

CASH AND CASH EQUIVALENTS - END OF PERIOD

accompanying Notes to Consolidated Financial Statements.

SOLUTIONS, INC.

STATEMENTS OF CASH FLOWS - CONTINUED

THE YEARS ENDING DECEMBER 31, 2024 AND 2023

2023 (restated)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest Paid

Establishment of derivative liability

Discount on convertible debt

Issuance of common stock as consideration

for payment of Loan payable

Common Stock warrants issued as deferred

finance costs

See accompanying Notes to Financial Statements.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Income Tax Paid

accompanying Notes to Consolidated Financial Statements.

SOLUTIONS, INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2024 AND 2023

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Iveda Solutions, Inc.

Iveda Corporation) (the “Company”) began operations on January 24, 2005, under the name IntelaSight, Inc., a Washington

corporation doing business as Iveda Solutions (“IntelaSight”).

On October 15, 2009, IntelaSight completed a reverse

merger with Charmed Homes, Inc., a Nevada corporation (“Charmed”) pursuant to which IntelaSight became a wholly-owned

subsidiary of Charmed and Charmed changed its name to Iveda Corporation.

Prior to the reverse merger, Charmed was a shell company

and did not have any operations.

All Company operations

were conducted through IntelaSight until December 31, 2010, at which time IntelaSight merged with and into Iveda Corporation

and Iveda Corporation changed its name to Iveda Solutions, Inc.

The Company 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 throughout the United States.

On April 30, 2011, the Company

completed its acquisition of Sole-Vision Technologies, Inc (doing business as MegaSys) (“MegaSys”).

MegaSys was incorporated

in the Republic of China (Taiwan) on July 5, 1999.

MegaSys designs and integrates electronic security and surveillance products,

software, and services.

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

in June 2006.

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

2010, IntelaSight merged with and into the Company and the Company became the surviving company.

Iveda offered the first cloud hosting

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

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

Iveda offers smart city technologies globally, offering advanced

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

cities and commercial clients worldwide.

Consolidation

The consolidated financial statements

include the accounts of the Company and MegaSys through December 31, 2013.

All intercompany balances and transactions have been

eliminated in consolidation.

Going Concern

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 from January 2005 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

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.

A multi-step 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:

x 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.

x The Company successfully raised $1,735,000 through March

14, 2014 in convertible debentures and warrants in a private placement memorandum offering and will continue efforts of this nature

during 2014 as deemed necessary.

x 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 (“Long Term Financing”).

x 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 services.

x The Company has recently developed two other standalone

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.

x The Company launched a new website to highlight new products

and services with corresponding applications.

x The Company launched a second website allowing for direct

web-sales, geared toward the residential and small-to-medium sized businesses.

x 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.

x The Company intends to continue advertising on selected

trade magazines and running Google Adwords to generate leads.

x The Company has evaluated its reseller distribution channel

and eliminated non-performing components of the channel.

x 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.

x The Company is in active collaboration with certain telecommunications companies in other countries

to resell the Company’s products and services in their respective countries.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

Impairment of Long-Lived Assets

The Company has 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."

The Company reviews

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.

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.

The Company did not make any impairment for the years ended December 31, 2013 and 2012.

Basis of Accounting

The Company’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.

Use of Estimates

The preparation of financial

statements in conformity with accounting principles generally accepted in the United States of America requires management to make

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

Actual results could

differ from these estimates.

Revenue and Expense Recognition

Company 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 605, "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 services are recognized

when the services are provided.

Expenses are recognized as incurred.

Revenues 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.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

Contract costs include all direct

material, subcontractors, labor costs, and equipment costs and those indirect costs related to contract performance.

administrative costs are charged to expense as incurred.

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

We consolidate our financial statements with the financial statements of Iveda Taiwan.

All intercompany balances and transactions have

been eliminated in consolidation.

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

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

The Company experienced net losses and

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

These factors raise substantial doubt about the Company’s

ability to continue as a going concern.

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

Management does not expect that its current liquidity

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

As a result, management has concluded

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

The accompanying consolidated financial

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

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

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

operations until it begins generating positive cash flow.

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

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

Even if the Company is able to obtain additional financing,

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

in case of equity financing.

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.

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

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

actual results could differ from those estimates.

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

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

reserve, among other items.

and Expense Recognition

Company applies the provisions of Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers , and all

related appropriate guidance.

The Company recognizes revenue under the core principle to depict the transfer of control to its customers

in an amount reflecting the consideration to which it expects to be entitled.

In order to achieve that core principle, the Company applies

the following five-step approach:

(1) identify the contract with a customer, (2) identify the performance obligations in the contract,

(3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize

revenue when a performance obligation is satisfied.

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

the customer.

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

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

As part of its consideration for

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

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

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

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

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

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

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

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

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

Revenue is recognized when control of the product is

transferred to the customer ( i.e.

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

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

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

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

Customers do not have a right to

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

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

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

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

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

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

Revenue is recorded when the equipment is

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

when installation or maintenance work is performed.

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

is reclassified to Deferred Cost of Goods.

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

from fixed-price equipment installation contracts, if any, is recognized as the contracts allow for invoicing at various milestones.

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.

Comprehensive loss

Comprehensive loss is defined

to include all changes in equity except those resulting from investments by owners and distributions to owners.

Among other disclosures,

all items that are required to be recognized under current accounting standards as components of comprehensive income are required

to be reported in a financial statement that is presented with the same prominence as other financial statements.

The Company’s

current component of other comprehensive income is the foreign currency translation adjustment.

Changes in job performance, job conditions, and estimated profitability may result in revisions

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

Changes in estimated job profitability resulting

from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements are accounted for as changes

in estimates in the current period.

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

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

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

retail price.

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

The distributor or integrator

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

and rewards of ownership.

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

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

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

The revenues are recorded monthly, if the

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

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

The revenues are recorded annually,

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

The following table presents our net sales by revenue

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

of Disaggregation of Revenue

Ended December 31,

Municipalities

Net Sales Source

The Company sells and installs video

surveillance systems comprised of various components of hardware and software.

Comprehensive

loss is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.

other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income

are required to be reported in a financial statement that is presented with the same prominence as other financial statements.

component of other comprehensive income is the foreign currency translation adjustment.

Concentrations

Financial instruments, which

potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts

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

Accounts receivable are unsecured

and the Company is at risk to the extent such amount becomes uncollectible.

The Company performs periodic credit evaluations of

its customers’

financial condition and generally does not require collateral.

Two customers in 2013 represented approximately

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

The net accounts receivable from

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

No other customers represented greater

than 10% of total revenues in 2013 and 2012.

Cash and Cash Equivalents

For purposes of the statement

of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or

less to be cash equivalents.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

instruments, which potentially subject us to concentrations of credit risk, consist principally of cash and cash equivalents and trade

accounts receivable.

The Company provides an

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

Substantially

all cash is deposited in three financial institutions, two in the United States and one in Taiwan.

At times, amounts on deposit in the

United States may be in excess of the FDIC insurance limit.

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

Insurance Corporation) with maximum coverage of NTD 3 million.

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

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

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

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

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

(a US company) with 12 %.

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

year ended December 31, 2023.

These specific customers were 1) YOU MING HUEI CO.

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

23 %, (both Taiwan companies).

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

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

This specific customer was Chunghwa Telecom.

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

uncollectible.

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

in exchange for our products and services provided on credit.

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

with the collectability of these accounts receivable.

other customers represented greater than 10 % of total revenues in years ended December 31, 2024 and 2023.

and Cash Equivalents

purposes of the statement of cash flows, we consider all highly liquid debt instruments purchased with an original maturity of three

months or less to be cash equivalents.

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

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

For consolidation purposes, the subsidiary’s financial statements

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

Assets and liabilities are translated using the exchange rate

at the balance sheet date.

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

Exchange rate

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

The Company had $ 1,025,675 and $ 1,959,399 of its cash and cash equivalents in Taiwan New Dollars at December 31, 2024 and 2023, 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 US operation, receivables past due more than 120 days are considered delinquent.

For our Taiwan operation, receivables over one year are considered delinquent.

Delinquent receivables are written off based

on individual credit valuation and specific circumstances of the customer.

As of December 31, 2013 and 2012 respectively, an

allowance for uncollectible accounts of $31,594 and $22,554 was deemed necessary for our US Operation.

As of December 31,

2013 and 2012, respectively, an allowance of $465,933 and $116,315 was established against the receivables in our foreign

The Company does not generally charge interest on past due receivables.

Trade receivables, net are comprised of the

Trade receivables, gross

Allowance for doubtful accounts

Trade receivables, net

Other Current Assets

Other current assets are comprised of the following:

Notes receivables

Restricted cash

Deposits-current

Prepaid expenses and other current assets

Other current assets

Notes Receivable

Notes receivable represents post-dated

checks collected from customers in Taiwan.

The Company provides an allowance for doubtful accounts which is based upon a review

of outstanding receivables, historical collection information and existing economic conditions.

For our Taiwan operation, notes

receivables over 90 days are considered delinquent.

Delinquent receivables are written off based on individual credit valuation

and specific circumstances of the customer.

As of December 31, 2013 and 2012, no allowance for doubtful accounts was deemed necessary

for our Taiwan operation.

The company does not generally charge interest on notes receivable.

Deposits –

The Company’s current deposits

represent tender deposits placed with local governments and major customers in Taiwan during the bidding process for new proposed

Prepaid Expenses and Other Current

Prepaid expenses and other current

assets represent cash paid in advance to insurance companies and vendors for service coverage extending into 2014.

It also includes

some other receivables as the result of travel advances due from employees.

Inventories consists of equipment

purchased for installation projects and is recorded at the lower of cost (first-in, first-out) or market.

Property and Equipment

Property and equipment are stated

Depreciation is computed primarily using the straight-line method over the estimated useful lives of three to seven years.

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

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

Delinquent receivables are written off based on individual

credit valuation and specific circumstances of the customer.

As of December 31, 2024 and 2023, no allowance for uncollectible accounts

was deemed necessary.

Current Assets

current assets represent cash paid in advance to vendors for service coverage extending into subsequent periods, advances to suppliers

of product and tender deposits placed with local governments and major customers in Taiwan during the bidding process for new proposed

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.

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

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

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

There was no allowance for slow-moving and obsolete

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

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 years ended December

31, 2013 and 2012 was $201,298 and $197,557, respectively.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

Intangible Assets and Goodwill

Intangible assets consist of trademarks

and other intangible assets associated with the purchase price allocation of MegaSys.

Such assets are being amortized over their

estimated useful lives of six months to ten years.

Other intangible assets are fully amortized at December 31, 2013.

Future amortization

of Trademarks is as follows:

Goodwill represents the excess

of the purchase price of MegaSys over the net assets acquired.

goodwill to reporting units based on the reporting unit expected to benefit from the business combination.

We evaluate our reporting

units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach.

Goodwill is tested

for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change

that would more likely than not reduce the fair value of a reporting unit below its carrying value.

These events or circumstances

could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale

or disposition of a significant portion of a reporting unit.

of the goodwill impairment test requires judgment.

We first assess qualitative factors to determine whether it is more likely than

not that goodwill is impaired.

If the more likely than not threshold is met, we perform a quantitative impairment test.

31, 2013, the Company determined that goodwill was impaired and has recorded an impairment of $841,000.

Other assets are comprised of

the following:

Deposits- long-term

Deferred tax assets

Deferred Finance Costs (Net of Amortization)

Deposits- long-term

Long-term deposits consists of our security deposit

held by Landlord under the First Amendment to Lease effective July 1, 2011 for our domestic office space.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

Deferred income taxes are recognized

in the financial statements for the tax consequences in future years of differences between the tax bases of assets and liabilities

and their financial reporting amounts based on enacted tax laws and statutory tax rates.

Temporary differences arise from sales

cut-off, depreciation, deferred rent expense, and net operating losses.

Valuation allowances are established when necessary to

reduce deferred tax assets to the amount that represents the Company's best estimate of such deferred tax assets that, more likely

Depreciation expense for the years

ended December 31, 2024 and 2023 was $ 31,805 and $ 19,753 , 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 December 31, 2024 and 2023.

Method Investment

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

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

The equity method investments are initially recorded at cost,

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

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

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

not be recoverable.

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

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

Impairment analyses are based

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

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

Iveda Phils Joint Venture (located in the Philippines).

Based on Management’s

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

of $ 180,000 .

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

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

the tax bases 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.

1 unchanged sentence

and liabilities.

During 2013, the Company reevaluated the valuation allowance for deferred tax assets and determined that no current

benefits should be recognized for the year ended December 31, 2013 for our U.S.

However, a benefit of $160,198 is recorded

on the balance sheet for our Taiwan business.

See Note 9 for more information.

The Company is subject to U.S.

are subject to U.S.

federal income tax as well as state income tax.

The Company’s U.S.

income tax returns are subject

to review and examination by federal, state, and local authorities.

tax returns for the years 2010 to 2012 are open to

examination by federal, local, and state authorities.

The Company’s Taiwan

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

The Taiwan tax return for the years 2008 to 2012

are open to examination of Ministry of Finance.

Restricted cash

Restricted cash represents time

deposits on account to secure short-term bank loans in our foreign operation.

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.

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

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

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

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

The Company accounts for such grants issued and vesting based on

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

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

Recognition of compensation expense for non-employees is in

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

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

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

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

Compensation expense is recorded based upon the value derived

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

The assumptions used in the Black-Scholes-Merton Option

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

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

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

Value of Financial Instruments

The Company uses various inputs in determining the

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

Financial assets recorded at fair value

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

Accounting Standards Codification

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

Level 1—Quoted prices in active markets for

identical assets or liabilities.

Level 2—Inputs, other than the quoted prices

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

Level 3—Unobservable inputs in which there is

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

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

2024 and December 31, 2023.

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

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

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

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

The carrying values of financing

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

Accounting Standards

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

Improvements to Reportable Segment Disclosure , which

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

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

profit or loss.

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

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

including the significant segment expense disclosures.

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

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

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

(Subtopic 220-40) Disaggregation of Income Statement Expenses.

The guidance in ASU 2024-03 requires public business entities to disclose

in the notes to the financial statements, among other things, specific information about certain costs and expenses including purchases

of inventory;

employee compensation;

and depreciation and amortization expense for each caption on the income statement where such expenses

are included.

The update is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning

after December 15, 2027.

Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the

effective date or retrospectively to all periods presented in the financial statements.

We are currently evaluating the provisions of

this guidance and assessing the potential impact on our financial statement disclosures.

recent accounting pronouncements and guidance issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified

Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on

the Company’s present or future financial statements.

2 Accounts and Other Payables

Accounts and other payables are

comprised of the following:

Of Accounts and Other Payables

December 31, 2024

December 31, 2023

Accounts Payable

Accrued Expenses

Income Tax Payable

Deferred Revenue

Deferred Revenue and Customer Deposits

Accounts and Other Payables

Deferred Revenue

Deposits received from customers on future installation

projects are recorded as deferred revenue.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

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

Under this transition method, stock-based compensation expense for the years ended December 31, 2012 and 2011 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.

The Company recognizes compensation expense on a straight-line basis

over the requisite service period of the award.

The fair value of stock-based compensation awards granted prior to, but not yet

vested as of December 31, 2013 and 2012, 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.

The Company recognized $336,402 and $248,072 of stock-based compensation expense for the years ended

December 31, 2013 and 2012, respectively.

Fair Value of Financial Instruments

Fair value estimates discussed

herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2013 and

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

These financial

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

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

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

Segment Information

The Company conducts operations

in various geographic regions outside the United States.

The operations and the customer base conducted in the foreign countries

are similar to the United States operations.

The net revenues and net assets (liabilities) for other significant geographic regions

outside the United States are as follows:

United States

Furthermore, due to operations

in various geographic locations, the Company is susceptible to changes in national, regional and local economic conditions, demographic

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

Company’s future operations and results.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013

The Company is required to collect

certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies

on a periodic basis.

These taxes and fees are legal assessments to the customer, for which the Company has a legal obligation to

act as a collection agent.

Because the Company does not retain these taxes and fees, the Company does not include such amounts

The Company records a liability when the amounts are collected and relieves the liability when payments are made to

the applicable governmental agencies.

The company operates as two reportable

business segments as defined in ASC 280.

“Segment Reporting.”

Each company has a chief operating decision maker and

management personnel which review their company’s performance as it relates to revenue, operating profit and operating expenses.

Twelve Months

Iveda Solutions,

Cost of Revenue

Depreciation and Amort.

General & Administrative

Impairment of Goodwill

(Loss) from Operations

Other Income (Expense)

(Loss) Before Income Taxes

Benefit For Income Taxes

$ (6,586,815 )

$ (6,801,714 )

Revenues as shown below represent sales to external

customers for each segment.

Intercompany revenues have been eliminated and are immaterial for separate disclosure.

Additions to long-lived assets as presented in the

following table represent capital expenditures.

Inventories, property and equipment for operating

segments are regularly reviewed by management and are therefore provided below.

United States

Republic of China (Taiwan)

Elimination of intersegment revenues

Operating earnings (loss)

United States

$ (6,510,129 )

$ (3,348,419 )

Republic of China (Taiwan)

Elimination of intersegment profit

$ (6,799,815 )

$ (3,844,952 )

Property and equipment

United States

Republic of China (Taiwan)

Additions to long-lived assets

United States

Republic of China (Taiwan)

United States

Republic of China (Taiwan)

United States

Republic of China (Taiwan)

Reclassification

Certain amounts in 2012 have been reclassified to

conform to the 2013 presentation.

New 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 to:

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

Cross-reference to other disclosures currently required

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

GAAP) 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

3 SHORT-TERM AND LONG-TERM DEBT

short-term debt balances were as follows:

OF SHORT-TERM DEBT

December 31, 2024

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 Impairment.

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).

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

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013

NOTE 2 RELATED PARTIES

On June 20, 2012, the Company entered into a convertible debenture agreement with a Board Member for $200,000.

Interest is payable at 12% per annum, payable on the maturity date of June 20, 2013.

The Company issued warrants to purchase 20,000 shares of the Company Stock, at an exercise price of $ 1.00.

Accordingly, the Company recognized a discount of $16,789 on the principal value of the $200,000 and is amortizing the discount over the 12 month term of the debenture.

The debenture is convertible into shares of Company Common Stock on or before the Maturity Date, at a conversion rate of $1.00 per share.

On June 20, 2013, the Company paid off, in full, this debenture which totaled $200,000 plus $24,000 interest.

On September 26, 2011, the Company entered into a $45,000 promissory note agreement with one of its shareholders.

Interest on the note will be payable in 45,000 warrants at a $1.10 exercise price, exercisable within three years of issuance.

On October 24, 2011, the Board of Directors approved the issuance of the warrants.

Accordingly, the Company recognized a discount of $16,909 on the principal value of the $45,000 note payable and is amortizing the discount over the 12 month life of the note.

On September 25, 2012 a Promissory Note Extension Agreement was signed to extend the maturity date of one of the $45,000 notes to March 25, 2013.

On May 14, 2013, the Company paid off, in full, this promissory note which totaled $45,000 plus $3,417.53 interest.

On November 19, 2012, the Company entered into a separate convertible debenture agreement with a different Board Member for $100,000.

Interest is payable at 10% per annum, payable on the maturity date of May 19, 2013.

The Company issued warrants to purchase 10,000 shares of the Company Stock, at an exercise price of $ 1.10.

The debenture is convertible into shares of Company Common Stock on or before the Maturity Date, at a conversion rate of $1.10 per share.

On December 20, 2013, the Company entered into a Convertible Debenture with an officer for $75,000 which includes warrants to purchase 6,818 shares of the Company stock , at an exercise price of $1.65.

Accordingly, the Company recognized a discount of $4,886 on the principal value of $75,000 and is amortizing the discount over the three year term of the debenture.

Total Due to Related Parties

Less Current Portion

Debt Discount

Total Long-Term

NOTE 3 SHORT-TERM DEBT

Two short-term bank loans were initiated on September

28, 2012 and November 26, 2012, due and payable on May 31, 2014 and November 26, 2014 respectively.

The short-term debt balances

were as follows:

Loan from Shanghai Commercial & Savings at an interest rate at 5.5% per annum, due on November 26, 2014

Loan from Chailease Bank at various interest rates ranging from 1% per annum to 3.24%.

Due on May 31, 2014

Notes Payable

Balance at end of year

NOTE 4 CONVERTIBLE DEBENTURES

In December 2013, the

Company sold $425,000 5 year debentures, convertible at any time into common stock at $1.50 per share.

The debentures bear

interest at 9.5% interest payable in cash or stock, at maturity.

The debentures included 38,636, 5-year warrants exercisable

The Company paid $111,657 in cash and issued 38,636 warrants (equal to $3,313 on the issue date) for financing

these deferred costs have been capitalized to Other assets in the accompanying balance sheets, and are being amortized

to interest expense using the effective interest method over the 5 year life of the debt.

The fair value of the conversion

option and warrants on the date issued to the debenture holders totaled $27,608, is discounted from the carrying value of the

debenture and amortized into interest expense over the 5 year life of the debt using the effective interest method.

December 31, 2013, the carrying value of the Convertible debentures totaled $397,852, net of the $27,148 debt discount, and

accrued interest totaled $2,096.

The company expects to amoritize approximately $49,500 into interest expense in each of the

next 5 years reducing the related deferred costs and debt discount.

Principal and all accrued interest is due at maturity,

but can be repaid at any time with no penalty.

The fair value of the conversion

option and detachable warrants is carried on the face of of the accompanying Balance Sheet as Derivative Liability and totaled

$39,804 as of December 31, 2013.

Any change in fair value of the derivative liability is reported as a gain or loss on derivative

liability in the accompanying statement of operations.

The company recognized a loss on the derivative of $241 during the year

ended December 31.

In conjuntion with the debenture

offering, the Company accrued contingent payments due to third parties totaling $50,000 in cash and 100,000 warrants (with a fair

value of $8,642 at December 31, 2013) due if certain funding levels are achieved.

NOTE 5 FAIR VALUE MEASUREMENTS

We apply fair value accounting for all financial assets

and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements

on a recurring basis.

Fair value is estimated by applying the following hierachy, which prioritizes the inputs used to measure

the fair value into three levels and bases the categorization within the hierarchy upon the lowest l evel of input that is available

and significant to the fair value measurements.

Level I - Quoted prices in an active market for identical

assets or liabilities

Level II - Observable inputs other than quoted prices

in active markets for identical assets and liabilities, quoted prices for identical or similar assets and liabilities in inactive

markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of

the assets or liabilities

Level III - Inputs that are generally unobservable

and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability.

The carrying amounts for cash, accounts payable, accrued expenses,

short term debt, approximate their fair values due to the short period of time until maturity.

The fair value of the convertible

option and debenture warrants are measured by using the Black-Scholes option-pricing model.

As of December 31, 2013, the assumptions

used to measure fair value of the liability embedded in our debenture included a conversion price of $1.50, and our freestanding

debenture warrants included a warrant exercise price of $1.65 per share, a common share price of $1.10, a discount rate of 1.75%,

December 2018 maturity, and a volatility of 20.76%.

The following table sets forth, by level within the

fair value hierarchy, our financial instrument liabilities as of December 31, 2013:

Derivative liability

No financial instrument liabilities were present as of December

The following table sets forth a summary of changes in the fair

value of our Level 3 financial instrument liability for the year ended December 31, 2013.

Beginning Balance

(Gains) losses during the period

Ending Balance

NOTE 6 LONG-TERM DEBT

Long-term debt consists of the following:

Loan from Chailease Finance Co., Ltd.

with an interest rate at 5% per annum, due on May 30, 2015

Loan from Taipei Fubon Bank with an interest rate at 5.5% per annum, due on November 26, 2014

Convertible debenture

Current portion

Debt discount

The future principal payments under the bank loans

are as follows:

For the year ended December 31,

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 7 OPERATING LEASES

The Company leases its office

facilities under a non-cancelable operating lease expiring October 2016 that requires minimum monthly payments ranging from $8,669

Rent expense was $107,885 and $95,635 for the years ended December 31, 2012 and 2011, respectively.

The Company also

has two non-cancellable data center service agreements for approximately $7,298 and $2,575 per month, expiring September 2014.

The company has a third non-cancellable data center service agreement for approximately $5,826, expiring March 2015.

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:

NOTE 8 PREFERRED STOCK

The Company has the authority

to issue 100 million shares of preferred stock with a par value of $0.00001 per share and may be divided into and issued in series.

The Board of Directors is authorized, within any limitations prescribed by law and the Company’s Article of Incorporation

to fix and determine the designations, rights, qualifications, preferences, limitations and terms of the shares of any series of

December 31, 2023

Loan from Shanghai Commercial Bank at 3.1 %- 3.2 %

interest rate per annum.

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

Loan from HuaNam Bank at 3.4 %

interest rate per annum.

in June 2025.

Loan from ChangHwa Bank at 3 %

interest rate per annum.

Balance at end of period

of December 31, 2024, there was $29,013 of restricted cash pledged as security for the Shanghai Commercial Bank short term loan.

Long-term debt balances were as follows:

OF LONG-TERM DEBT

Loans from Shanghai Commercial Bank with interest rates 2.1 %

per annum due January

Current Portion of Long-term debt

Balance at end of period

SCHEDULE OF MINIMUM PAYMENT OF LONG TERM DEBT

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

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

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

of TWD 20,000,000

(approximately ($ 600,000 USD) .

The term for the

revolving loan is 1

year and for the term loan is 5

year term loan requires monthly payments including interest

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

The short-term Shanghai Commercial Bank loan is 75 %

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

by saving deposit security.

The guarantors of this loan are Mr.

Cheung, who are

both part of Iveda Taiwan’s management team.

4 PREFERRED STOCK

NOTE 9 EQUITY

During 2012, the Company raised

$2,426,319 in a private placement of shares at $1.00 per share.

Costs associated with this raise totaled $317,465.

The mix of investors

include 21 individuals, 3 trusts and 4 corporations.

During 2013, the Company raised

$5,093,799 in a private placement of shares at $1.00 per share and $723,000 at $1.10 per share.

Costs associated with this raise

totaled $606,320.

The mix of investors includes 51 individuals, 12 trusts and 24 corporations.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 10 STOCK OPTION PLAN AND WARRANTS

Stock Options

On October 15, 2009, the Company

adopted the 2009 Stock Option Plan (the “2009 Option Plan”), pursuant to which it may grant equity awards to eligible

The 2009 Option Plan allows the Company’s Board of Directors (the “Board”) to grant options to purchase

up to 1,500,000 shares of common stock to directors, officers, key employees, and service providers of the Company.

As of December

31, 2013, options to purchase 938,039 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 the Company.

2010 Option Plan was amended to increase the number of shares issuable under the 2010 Option Plan to 3,000,000 shares.

under the 2010 Option Plan are registered with the SEC under Forms S-8 filed on February 2, 2010 and June 24, 2011.

As of December

31, 2013, options to purchase 4,755,283 shares were outstanding under the 2010 Option Plan.

Stock options may be granted

as either incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”),

or as options not qualified under Section 422 of the Code.

All options are issued with an exercise price at or above the fair market

value of the common stock on the date of the grant as determined by the Company's Board of Directors.

Incentive stock option plan

awards of restricted stock are intended to qualify as deductible performance-based compensation under Section 162(m) of the Code.

Incentive Stock Option awards of unrestricted stock are not designed to be deductible to the Company under Section 162(m).

the Plan, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

The Company has also granted non-qualified

stock options to employees and contractors.

All non-qualified options are generally issued with an exercise price that may not

be less than the fair value of the common stock on the date of the grant as determined by the Company's Board of Directors.

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

Vesting periods range from 100% fully vested upon grant to a range of up to four years.

Vested options may be exercised up to three

months following date of termination of the relationship.

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

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

The Company has unrecognized stock-based compensation with a weighted-average term of approximately 3 years of $486,750

at December 31, 2013.

Stock option transactions during

2013 and 2012 were as follows:

are currently authorized to issue up to 12,500,000 shares of preferred stock, par value $ 0.00001 per share, 1,250,000 shares of which

are designated as Series A Preferred Stock and 500 shares of which are designated as Series B Preferred Stock.

Our Articles of Incorporation

authorize the issuance of shares of preferred stock with designations, rights, and preferences determined from time to time by our Board

of Directors.

Accordingly, our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend,

liquidation, conversion, voting, or other rights which could adversely affect the voting power or other rights of the stockholders of

our common stock.

In the event of issuance, the preferred stock could be utilized, under certain circumstances, as a method of discouraging,

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

are authorized to issue up to 300,000,000

shares of common stock, par value $ 0.00001

We effectuated a reverse stock split

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

All share values within

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

All outstanding shares of our common stock are of the

same class and have equal rights and attributes.

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

to a vote of the stockholders of our company.

Our common stock does not have cumulative voting rights.

Persons who hold a majority of

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

for election.

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

our Board of Directors.

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

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

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

Holders of our common stock

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

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

During September 2024 we

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

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

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

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

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

of the offering.

Each of the pre-funded warrants will be exercisable for one share of Common Stock.

The pre-funded warrants had an exercise

price of $ 0.01 per share, were immediately exercisable and could be exercised at any time until all of the pre-funded warrants issued

in the offering were exercised in full.

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

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

result of the direct offering.

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

shares of Common Stock and unregistered Series

B warrants to purchase up to 625,000

shares of Common Stock, which warrants will be

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

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

The Series A warrants will expire

years following the Stockholder Approval and the

Series B warrants will expire 18

months following the Stockholder Approval.

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

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

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

A and Series B warrants.

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

share and an expiration date of September 4, 2029.

Restricted Common

shares issued for services

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

Company issued 19,656 shares of its common stock with a fair value of $ 138,546 for services during the year ended December 31, 2023.

6 STOCK OPTION PLAN AND WARRANTS

January 18, 2010, we adopted the 2010 Stock Option Plan (the “2010 Option Plan”), which allows the Board to grant options

to purchase up to 15,625 shares of common stock to directors, officers, key employees, and service providers of our company.

the 2010 Option Plan was amended to increase the number of shares issuable under the 2010 Option Plan to 375,000 shares.

In 2012, 2010

Option Plan was again amended to increase the number of shares issuable under the 2010 Option Plan to 203,125 shares.

The shares issuable

pursuant to the 2010 Option Plan are registered with the SEC under Forms S-8 filed on February 4, 2010 (No.

333- 164691), June 24, 2011

333-175143), and December 4, 2013 (No.

The 2010 Option Plan expired on January 18, 2020.

As of December 31, 2024 there

were 23,659 options outstanding under the 2010 Option Plan.

December 15, 2020, we adopted the Iveda Solutions, Inc.

2020 Plan (the “2020 Plan”).

The 2020 Plan has a maximum of 156,250

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

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

under the 2020 Option Plan.

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

October 7, 2022 (No.

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 December 31, 2024 and December 31, 2023, there were 217,056 and 162,265 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,

as amended (the “Code”), or as options not qualified under Section 422 of the Code.

All options are issued with an exercise

price at or above the fair market value of the common stock on the date of the grant as determined by our Board of Directors.

stock option plan awards of restricted stock are intended to qualify as deductible performance-based compensation under Section 162(m)

Incentive Stock Option awards of unrestricted stock are not designed to be deductible to us under Section 162(m).

the plans, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant.

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

All non-qualified options are generally issued with an

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

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

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

to four years.

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

alternate terms are specified at grant.

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

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

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

unrecognized stock-based compensation.

During 2024 and 2023, the Company granted 79,000

stock options with a weighted average fair value of $ 1.10

and $ 0.34 per share,

respectively.

The Company recorded stock compensation costs of $ 122,600

and $ 104,600

on vesting of the options during 2024 and 2023, respectively.

option transactions during 2024 and 2023 were as follows:

OF STOCK OPTION TRANSACTIONS

Outstanding at Beginning of Year

Forfeited or Canceled

Forfeited or Cancelled

Outstanding at End of Year

Options Exercisable at Year-End

Weighted-Average Fair Value of Options Granted During the Year

Information with respect to stock options outstanding

and exercisable at December 31, 2013 is as follows:

Options Outstanding

Options Exercisable

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

OF STOCK OPTION OUTSTANDING AND EXERCISABLE AND EXERCISABLE EXERCISE PRICE RANGE

Outstanding at

Exercisable at

1.58 - 142.08

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

The fair value of each option

granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted- average assumptions

used for options granted.

Expected Life

Dividend Yield

Expected Volatility

Risk-Free Interest Rate

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

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

Treasury yield curve in

effect at the grant date.

The expected life of the options is based on the actual expiration date of the grant.

The Company 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 3,883,641 shares of common stock were outstanding, all of which were issued either as equity compensation or in connection

with financing transactions.

Warrants may be exercised between a range of two to ten years following the date of the grant, with

vesting schedules determined by the Company upon issue.

Vesting periods range from 100% fully vested upon grant to four years.

The fair value of warrants is determined using the Black-Scholes option-pricing model.

The estimated fair value of warrants is

recognized as expense on the straight-line basis over the warrants’

vesting periods.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013

Stock warrant transactions for 2013 and 2012 were

Exercise Price

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.

transactions during 2024 and 2023 were as follows:

SCHEDULE OF WARRANT TRANSACTIONS

Outstanding at Beginning of Year

Forfeited or Canceled

Forfeited or Cancelled

Outstanding at End of Year

Warrants Redeemable at End of Year

Weighted-Average Fair Value of Warrants Issued During the Year

Information with respect to warrants outstanding and exercisable

at December 31, 2013 is as follows:

Warrants Outstanding

Warrants Redeemable

$0.10 - $1.65

The fair value of each warrant issued is estimated on the

date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for warrants

Expected Life

Dividend Yield

Expected Volatility

Risk-Free Interest Rate

Expected volatility 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 is based on the U.S.

Treasury yield curve in effect at the grant date.

The expected life of warrants is based on the average of three public companies offering services similar to the Company.

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 11 INCOME TAXES

Warrant Exercisable at Year-End

Weighted-Average Fair Value of Warrants Granted During the Year

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

OF WARRANTS OUTSTANDING AND EXERCISABLE

Average Remaining Contractual

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

weighted-average assumptions used for options granted.

During the year ended December 31, 2023, warrant

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

7 INCOME TAXES

Federal Corporate Income Tax

Temporary differences between financial statement carrying

amounts and the tax basis of assets and liabilities and tax credit and operating loss carryforwards that create deferred tax assets

and liabilities are as follows:

Tax Operating Loss Carryforward - USA

Accelerated Depreciation –

Valuation Allowance - USA

The valuation allowance increased

approximately $2,100,000, primarily as a result of the increased net operating losses of the operation in the USA.

As of December 31, 2013, the Company

has federal net operating loss carryforwards for income tax purposes of approximately $17,000,000 which will begin to expire in

The Company also has Arizona, California and Minnesota net operating loss carryforwards for income tax purposes of approximately

$9,624,000, $1,890,000 and $105,000 which will begin to expire in 2013.

Company uses an asset and liability approach for accounting and reporting for income taxes that allows recognition and measurement of

deferred tax assets based upon the likelihood of realization of tax benefits in future years.

Under the asset and liability approach,

deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for

financial reporting purposes and the amounts used for income tax purposes.

A valuation allowance is provided for deferred tax assets

if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility

is uncertain.

The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

December 31, 2024, the Company had available Federal and state net operating loss carryforwards to reduce future taxable income.

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

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

We also have Arizona net operating loss carryforwards

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

These carryforwards have been utilized in the determination

of the deferred income taxes for financial statement purposes.

The following table accounts for federal net operating loss carryforwards

Net Operating

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

The tax provision differs from the expense that would

result from applying Federal statutory rates to income before income taxes due to the effect of state income taxes and because

certain expenses are deducted for financial reporting that are not deductible for tax purposes.

Tax Benefit of 34%

Given the Company’s history of net operating

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

carryforwards.

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

Section 382 generally limits the use

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

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

“testing period” (generally three years).

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

return should be recorded in the financial statements.

Under this guidance, we may recognize the lax benefit from an uncertain lax position

only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical

merits of the position.

The tax benefits recognized in the financial statements from such a position should be measured based on the

largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

This guidance also provides

guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased

As of December 31, 2024 and 2023, the Company did not have a liability for unrecognized tax benefits, and no adjustment

was required at adoption.

Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense.

As of December 31, 2024,

and 2023, the Company has not accrued interest or penalties related to uncertain tax positions.

Additionally, tax years 2021 through

2024 remain open to examination by the major taxing jurisdictions to which the Company is subject.

the attainment of taxable income by the Company, management will assess the likelihood of realizing the tax benefit associated with the

use of the carryforwards and will recognize the appropriate deferred tax asset at that time.

Company’s effective income tax rate differs from the amount computed by applying the federal statutory income tax rate to loss

before income taxes as follows:

OF EFFECTIVE TAX RATE

December 31, 2024

December 31, 2023

Income tax benefit at federal statutory rate

State income tax benefit, net of federal benefit

Change in valuation allowance

Income taxes at effective rate

differences between financial statement carrying amounts and the tax basis of assets and liabilities and tax credit and operating loss

carryforward that create deferred tax assets and liabilities are as follows:

OF DEFERRED TAX ASSETS AND LIABILITIES

Tax Operating Loss Carryforward

Unamortized Research and Development Costs

Valuation Allowance

( 10,107,000 )

( 7,975,000 )

Increase (Decrease) in Income Taxes Resulting from:

State Income Tax Benefit, Net of Federal Tax

Nondeductible Expenses

Valuation Allowance

TAIWAN (REPUBLIC OF CHINA) CORPORATE

Sole-Vision Technologies, Inc.

Deferred Tax Assets, Net

valuation allowance increased approximately $ 0.8 million, primarily as a result of the increased net operating losses of our U.S.- based

(Republic of China) Corporate Tax

Technologies, Inc.

is a subsidiary of the Company which is operating in Taiwan as a profit-seeking enterprise.

Its applicable corporate income tax

In addition, Taiwan’s corporate tax system allows the government to levy a 10% profit retention tax on undistributed

earnings for the prior year.

This tax will not be provided if the company distributed the earnings before the ended of the fiscal

According to the Taiwan corporate

income tax (“TCIT”) reporting system, the TCIT sales cut-off base is concurrent with the business tax classified as

value-added type (“VAT”) which will be reported to the Ministry of Finance (“MOF”) on a bi-monthly basis.

Its applicable corporate

income tax rate is 20%.

In addition, Taiwan’s corporate tax system allows the government to levy a 10% profit retention tax on

undistributed earnings for the prior year.

This tax will not be provided if the company distributed the earnings before the ended of

the fiscal year .

to the Taiwan corporate income tax (“TCIT”) reporting system, the TCIT sales cut-off base is concurrent with the business

tax classified as value-added type (“VAT”) which will be reported to the Ministry of Finance (“MOF”) on a bi-monthly

Since the VAT and TCIT are accounted for on a VAT tax basis that recorded all sales on business tax on a VAT tax reporting system,

the Company is bound to report the TCIT according to the MOF prescribed tax reporting rules.

Under the VAT tax reporting system,

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

Therefore, when the company adopted US

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

sales cut-off timing difference and this difference is reflected in the deferred tax assets or liabilities calculations on the

income tax estimation reported in the Form 10-K.

IVEDA SOLUTIONS,

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013

Temporary differences between financial statement

carrying amounts and the tax basis of assets and liabilities and VAT tax reporting system and operating loss carryforwards that

create deferred tax assets and liabilities are as follows:

Under the VAT tax reporting system, sales

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

Therefore, when the company adopted US GAAP on accrual

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

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

8 EARNINGS (LOSS) PER SHARE

following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations,

as required by ASC No.

260, “Earnings per Share.”

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

We had net losses for the years ended December 31, 2024 and 2023 and the effect of including dilutive securities in the

earnings per common share would have been anti-dilutive for the purpose of calculating EPS.

Accordingly, all options, warrants, and shares

potentially convertible into common shares were excluded from the calculation of diluted earnings per share for the periods ended December

31, 2024 and 2023.

SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

Average Shares

Loss Per Share

the years ended December 31, 2024 and 2023, 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

9 CONTINGENT LIABILITIES

The Company may be involved in certain legal proceedings

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

Except for income tax contingencies, we record accruals for contingencies

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

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

Legal expenses associated

with the contingency are expensed as incurred.

September 13, 2024 Aegis Capital Corp.

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

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

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

The Company rejects

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

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

raised none of the funds in the offering.

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

defend the action.

Related to Iveda Taiwan pursuant to certain contracts with Chicony Power

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

Chung Shan Institute of Science and Technology, Iveda Taiwan is required to provide after-project services.

If Iveda Taiwan fails to

provide these after-project services in the future, other parties of the related contract would have recourse.

The financial exposure

to Iveda Taiwan in the event of failure to provide after- project services in the future as of December 31, 2024 is $ 339,042 .

10 SEGMENT INFORMATION

Company operates and manages its business as two reportable and operating segments.

The Company’s CODM reviews financial information

presented and decides how to allocate resources based on net income (loss).

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

Significant segment expenses include salaries and

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

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

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

The following table presents the significant

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

OF SEGMENT INFORMATION

December 31, 2024

Tax Operating Income –

Temporary Difference:

VAT reporting system –

Sales cut-off

VAT reporting system –

Cost & expenses cut-off

Provision of Bad Debt

Research & Development

Permanent Difference:

Non-deductible expenses

Adjusted Net Loss Before Tax –

Income tax expense (benefits) for the years ended

December 31, 2013 and 2012 is summarized as followings:

Provision for Federal Income Tax (34%)

Provision for TCIT (17%)

Provision for Undistributed Earnings Tax (10%)

Increase (Decrease) in Income Taxes Resulting from:

Pre-acquisition TCIT

Temporary Difference

Income Tax Expenses (Benefit)

RECONCILIATION OF DEFERRED TAX ASSET/(LIABILITIES)

Deferred Tax Assets

Balance at Beginning of Year

Temporary Difference

Foreign currency difference

Balance at End of Year

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 12 EARNINGS (LOSS) PER SHARE

The following table provides a

reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required

260, “Earnings Per Share“

(“EPS”).

Basic EPS is computed by dividing

reported earnings available to stockholders by the weighted average shares outstanding.

The Company had net losses for the years

ended December 31, 2013 and 2012 and the effect of including dilutive securities in the earnings per common share would have been

anti-dilutive.

Accordingly, all options, warrants and shares potentially convertible into common shares were excluded from the

calculation of diluted earnings per share for the years ended December 31, 2013 and 2012.

Total common stock equivalents that could

be convertible into common stock were 9,860,296 and 7,835,731 for 2013 and 2012 , respectively.

December 31, 2023

Cost of Goods Sold

Operating Expenses

Salaries and Payroll Expenses

Travel and Entertainment

Stock-based compensation

Public Company expenses

Audit and Accounting

Consulting Services

Research and Development

Software Subscription

Office Supplies and Postage

Other operating expenses

Total Operating Expenses

Loss (Income) from Operations

( 4,070,303 )

( 4,102,577 )

Weighted Average Shares

Basic Loss Per Share

IVEDA SOLUTIONS, INC.

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013 AND 2012

NOTE 13 CONTINGENT LIABILITIES

As part of the terms of contracts

with New Taipei City for projects performed during 2013, MegaSys is required to provide after-project services in accordance with

the contract terms.

If MegaSys were to fail provide these after-project services in the future, other parties of the related contract

would have recourse.

The financial exposure to MegaSys in the event of failure to provide after-project services in the future

total $2,041,571.

NOTE 14 SUBSEQUENT EVENTS (UNAUDITED)

Since January 1, 2014

through March 14, 2014 the Company has raised $1,310,000 through a private placement memorandum of Convertible Debentures

with warrants that began in December 2013.

The Company has evaluated subsequent

events from the balance sheet date through the date the financial statements were issued and determined that there are no additional

items to disclose.

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-K/A to be

signed on its behalf by the undersigned, thereunto duly authorized, on April 30, 2014.

IVEDA SOLUTIONS, INC.

Chief Executive Officer,

(Principal Executive Officer)

( 4,040,875 )

( 4,183,943 )

Interest Income and Other (Expenses), net

Net loss before Income Tax

$ ( 3,948,435 )

$ ( 4,007,247 )

$ ( 4,124,358 )

$ ( 4,268,395 )

Furthermore, due to operations in various geographic

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

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

We are required to collect certain taxes and fees

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

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

Because we do not retain

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

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

when payments are made to the applicable governmental agencies.

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

OF NET ASSETS LIABILITIES BY GEOGRAPHIC REGIONS

Net Assets (Liabilities)

For the Year Ended

December 31, 2024

December 31, 2023

United States

Republic of China (Taiwan)

Total Consolidated

11 RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

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

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

As of December 31, 2022

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

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

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

As of December 31, 2023

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

In addition, the Company is making certain reclassification entries.

effects on the previously issued financial statements are as follows:

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

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

The amount was recorded as an adjustment to accumulated deficit

at December 31, 2022.

[2] The intercompany

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

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

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

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

[4] An adjustment

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

should have been recorded as the equity method.

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

Accumulated Other Comprehensive Income (Loss) and accumulated deficit

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

OF RESTATEMENTS

As of December 31, 2023

As Previously Reported

$ ( 146,560 ) [1]

Accounts and Other Payables

( 1,110,087 )

Property and Equipment, Net

( 792,612 )[3]

Joint Venture Non-Controlled Equity Portion

Cash and Cash Equivalents

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

$ ( 47,941,796 )

$ ( 1,254,101 )[5]

$ ( 49,195,897 )

[1] Deferred Tax Asset eliminated from Other Assets

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

[3] 2023 capitalized software expensed to Research and Development

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

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

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

Other Comprehensive Income (Loss).

[5] Each of the above restatements effected Accumulated Deficit

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

of operations

As of December 31, 2023

As Previously Reported

Research and Development

Loss from Investment in Iveda Phils

Eliminate JV G&A recorded 2023

Eliminate JV Interest Income recorded 2023

Eliminate Loss attributable to non-controlled interest

$ ( 3,235,124 )

$ ( 907,542 )

$ ( 4,142,666 )

Basic and Diluted Cost per Share

* Restated per share amount

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

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

of operations

Common Stock Amount

Additional Paid in Capital

Accumulated Deficit

Non-Controlling Interest

Accumulated Other Comprehensive (Loss)

Stockholders’

Balance, December 31, 2022 as previously reported

$ ( 44,706,671 )

$ ( 220,643 )

Correction of Deferred Tax Asset

Correction of Prior Period Intercompany Accounts Payable

Balance, December 31, 2022 as restated

( 45,053,171 )

Balance, December 31, 2023 as previously reported

( 47,941,796 )

Correction of Deferred Tax Asset

$ ( 146,560 )

Correction of Prior Period Intercompany Accounts Payable

Capitalized Software expensed to Research and Development

$ ( 792,612 )

Expense Investment in Iveda Phils JV, net

Balance, December 31, 2023 as restated

$ ( 49,195,897 )

$ ( 221,418 )

$ ( 49,195,897 )

$ ( 221,418 )

The following table presents the effect of the restatements

of the Company’s previously issued statement of cashflows:

As Previously Reported

As of December 31, 2023

As Previously Reported

$ ( 3,235,124 )

( 792,612 ) [3]

( 114,930 ) [4]

( 4,142,666 )

Loss from Iveda Phils Joint Venture

Increase (Decrease) in Accounts and Other Payables

( 1,173 ) [4]

Net Cash Used in Operating Activities

( 2,604,645 )

( 792,612 ) [3]

( 114,930 ) [4]

( 1,173 ) [4]

( 3,333,360 )

Purchase of Property and Equipment, Net

$ ( 878,205 )

$ ( 792,612 ) [3]

Net Cash Provided by (Used in) Investing Activities

$ ( 878,205 )

$ ( 792,612 ) [3]

Joint Venture Non-Controlled Equity Portion

Change in restricted Cash

Net Cash Provided by Financing Activities

EFFECT OF EXCHANGE RATE CHANGES ON CASH

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS – END OF PERIOD

Capitalized Software expensed to Research and Development

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

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

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

recorded in 2023 in consolidation.

Net $ 114,930 additional loss recorded in 2023.

Eliminate line item for change in restricted cash of $ 685

Added Restricted Cash to Cash and Cash Equivalents

NOTE 12 SUBSEQUENT

On February 27, 2025, Iveda Solutions, Inc.

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

(the “Sales Agreement”) with H.C.

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

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

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

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

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

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

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

333-276676) (the “Registration

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

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

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

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

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

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

Actual sales will depend

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

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

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

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

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

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

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

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

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

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

On March 14, 2025, the “Company redomiciled

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

Of which (i) 300 million shares shall be common

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

The Company headquarters lease in Mesa Arizona

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

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 9A. Controls and Procedures