Item 8. Financial Statements and Supplementary Data
ITEM
8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference
is made to our consolidated financial statements, the notes thereto, and the report thereon, commencing on page F-1 of this Annual Report
on Form 10-K, which consolidated financial statements, notes, and report are incorporated herein by reference.
Restatement
impact of previously issued unaudited quarterly financial statements
The
impact of the restatement on the Financial Statements for December 31, 2023 also affects the 2023 and 2024 quarterly reports (10-Qs)
presentation. We have presented the following tables which represent the restated values for the balance sheets, statements of operations,
statements of stockholders’ equity and statements of cash flows for the 2023 and 2024 10-Q Financial Statements. The detailed impacts
are as follows:
[1] The Deferred Tax
asset of $146,560 recorded at December 31, 2022 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 at December 31, 2022 was understated by $200,000 related to a payment made on behalf of Iveda US by Iveda
Taiwan.
[3] An
adjustment to expense research and development expenses for all quarterly reports for 2023 and 2024 that were initially capitalized.
[4] Adjustments
related to correction of the accounting for the investment in Iveda Phils JV which was initially
recorded as a consolidation. This effected cash, account and other payables, Joint
Venture Non-Controlled Equity Portion, Accumulated Other Comprehensive Income (Loss) and
accumulated deficit.
SCHEDULE
OF RESTATEMENTS (UNAUDITED)
The
following table presents the effect of the restatements of the Company’s previously issued balance sheet:
As of March 31, 2023
As Previously Reported
Adjustments
As Restated
Other Assets
$ 288,599
$ (146,560 ) [1]
$ 142,039
Property and Equipment, Net
204,516
(170,785 ) [3]
33,731
Accounts and Other Payables
(1,313,360 )
(200,000 ) [2]
(1,513,360 )
Accumulated Deficit
(45,256,934 )
(517,345 )
(45,774,279 )
Total Shareholders’ Equity
8,341,698
(517,345 )
7,824,353
As Previously Reported
Adjustments
As Restated
As of June 30, 2023
As Previously Reported
Adjustments
As Restated
Cash
$ 8,601,307
$ (101,249 ) [4]
$ 8,500,058
Other Current Assets
231,989
180,000 [4]
411,989
Other Assets
270,721
(146,560 ) [1]
124,161
Property and Equipment, Net
465,182
(355,753 ) [3]
109,429
Accounts and Other Payables
(2,408,670 )
(200,000 ) [2]
JV Accrued Expenses
21,274 [4]
(2,587,396 )
Joint Venture - Net Asset Value
(59,968 )
59,968 [4]
-
Accumulated Other Compensation Income (Loss)
(242,567 )
79 [4]
(242,288 )
Accumulated Deficit
(46,014,306 )
(662,335 )
(46,676,641 )
Total Shareholders’ Equity
7,540,809
(602,289 )
6,938,520
As Previously Reported
Adjustments
As Restated
As of September 30, 2023
As Previously Reported
Adjustments
As Restated
Cash
$ 5,565,074
$ (99,678 ) [4]
$ 5,465,396
Other Current Assets
324,291
180,000 [4]
504,291
Other Assets
427,049
(146,560 ) [1]
280,489
Property and Equipment, Net
651,931
(546,402 ) [3]
105,529
Accounts and Other Payables
(1,161,569 )
(200,000 ) [2]
JV Accrued Expenses
58,827 [4]
(1,302,742 )
Joint Venture - Net Asset Value
(83,489 )
83,489 [4]
-
Accumulated Other Compensation Income (Loss)
(274,862 )
70 [4]
(274,792 )
Accumulated Deficit
(46,843,124 )
(837,372 )
(47,680,496 )
Total Shareholders’ Equity
6,680,020
(753,814 )
5,926,206
34
The
following table presents the effect of the restatements of the Company’s previously issued statement of operations
As Previously Reported
Adjustments
As Restated
for the three months ended March 31, 2023
As Previously Reported
Adjustments
As Restated
Research and Development
$ -
$ 175,285 [3]
$ 175,285
General and Administrative
850,347
(4,500 ) [2]
845,847
Total Operating expenses
850,347
170,785 [2]
1,021,132
Net Loss attributable to Iveda Solutions, Inc.
(550,263 )
(170,785 ) [2]
(721,048 )
Basic and Diluted Cost per Share *
(0.28 )
(0.37 )
Weighted Average Shares *
1,937,336
1,937,336
As Previously Reported
Adjustments
As Restated
For the six months ended June 30, 2023
As Previously Reported
Adjustments
As Restated
Research and Development
$ -
$ 360,253 [2]
$ 360,253
General and Administrative
2,139,031
(4,500 ) [2]
(99,945 ) [4]
2,034,586
Total Operating expenses
2,139,031
255,808
2,394,839
Net Loss attributable to JV
59,967
(59,967 ) [4]
-
Net Loss attributable to Iveda Solutions, Inc.
(1,307,635 )
(315,775 )
(1,623,410 )
Basic and Diluted Cost per Share *
(0.66 )
(0.82 )
Weighted Average Shares *
1,990,869
1,990,869
As Previously Reported
Adjustments
As Restated
For the nine months ended September 30, 2023
As Previously Reported
Adjustments
As Restated
Research and Development
$ -
$ 550,902 [3]
$ 550,902
General and Administrative
3,187,581
(4,500 ) [2]
(139,079 ) [4]
3,044,002
Total Operating expenses
3,187,581
407,323
3,594,904
Net Loss attributable to JV
83,489
(83,489 ) [4]
0
Net Loss
(2,136,453 )
(490,812 )
(2,627,265 )
Basic and Diluted Cost per Share *
(1.07 )
(1.32 )
Weighted Average Shares *
1,992,658
1,992,658
*
All share amounts and per share amounts reflect a reverse stock split of the outstanding shares of our Common Stock at a ratio of 1-for-8 effected on September 17, 2024.
35
The
following table presents the effect of the restatements of the Company’s previously issued statement of stockholders equity
Accumulated Deficit
Total Stockholders’ Equity
Balance, March 31, 2023 as previously reported
$ (45,256,934 )
$ 8,341,698
Prior Period Adjustments [1] [2]
(346,560 ) [1][2]
(346,560 )
Capitalized Software expensed to Research and Development
(170,785 ) [3]
(170,785 )
Balance, March 31, 2023 as restated
(45,774,279 )
7,824,353
Balance, June 30, 2023 as previously reported
(46,014,306 )
7,540,809
Prior Period Adjustments [1] [2]
(346,560 ) [1][2]
(346,560 )
Capitalized Software expensed to Research and Development
(355,753 ) [3]
(355,753 )
Iveda Portion of JV Loss not consolidated
39,978 [4]
100,024
Balance, June 30, 2023 as restated
(46,676,641 )
6,938,520
Balance, September 30, 2023 as previously reported
(46,843,124 )
6,680,020
Prior Period Adjustments [1] [2]
(346,560 ) [1][2]
(346,560 )
Capitalized Software expensed to Research and Development
(546,402 ) [3]
(546,402 )
Iveda Portion of JV Loss not consolidated
55,590 [4]
139,148
Balance, September 30, 2023 as restated
(47,680,496 )
5,926,206
The
following table presents the effect of the restatements of the Company’s previously issued statement of cashflows:
As Previously Reported
Adjustments
As Restated
for the three months ended March 31, 2023
As Previously Reported
Adjustments
As Restated
Net Loss
$ (550,263 )
$ (170,785 ) [3]
$ (721,048 )
Net Cash Provided by (Used in) Operating Activities
172,563
(170,785 ) [3]
1,778
Purchase of Property and Equipment, Net
(176,156 )
170,785 [3]
(5,371 )
Net Cash Provided by (Used in) Investing Activities
(176,156 )
170,785 [3]
(5,371 )
As Previously Reported
Adjustments
As Restated
for the six months ended June 30, 2023
As Previously Reported
Adjustments
As Restated
Net Loss
$ (1,307,635 )
$ (315,775 ) [3][4]
$ (1,623,410 )
Increase (Decrease) in Accounts and Other Payables
823,367
(21,274 ) [4]
802,093
Net Cash Provided by (Used in) Operating Activities
851,117
(337,049 ) [3][4]
514,068
Purchase of Property and Equipment, Net
(439,708 )
355,753 [3]
(83,955 )
Investment in JV
-
(180,000 ) [4]
(180,000 )
Net Cash Provided by (Used in) Investing Activities
(439,708 )
175,753
(263,955 )
JV Non-Controlled portion
(59,967 )
59,967 [4]
-
Net Cash Provided by (Used in) Financing Activities
940,175
59,967
1,000,142
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(62,732 )
79 [4]
(62,653 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
1,289,212
(101,249 )
1,187,963
CASH AND CASH EQUIVALENTS - END OF PERIOD
8,601,307
(101,249 )
8,500,058
As Previously Reported
Adjustments
As Restated
for the nine months ended September, 2023
As Previously Reported
Adjustments
As Restated
Net Loss
$ (2,136,453 )
$ (490,812 ) [3][4]
$ (2,627,265 )
Increase (Decrease) in Accounts and Other Payables
(378,538 )
(58,827 ) [4]
(437,365 )
Net Cash Provided by (Used in) Operating Activities
(1,865,342 )
(549,639 ) [3][4]
(2,414,981 )
Purchase of Property and Equipment, Net
(638,046 )
546,402 [3]
(91,644 )
Investment in JV
-
(180,000 ) [4]
(180,000 )
Net Cash Provided by (Used in) Investing Activities
(638,046 )
366,402
(271,644 )
JV Non-Controlled portion
(83,489 )
83,489 [4]
-
Net Cash Provided by (Used in) Financing Activities
838,023
83,489
921,512
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(81,656 )
70 [4]
(81,586 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(1,747,021 )
(99,678 )
(1,846,699 )
CASH AND CASH EQUIVALENTS - END OF PERIOD
5,565,074
(99,678 )
5,465,396
36
The
following table presents the effect of the restatements of the Company’s previously issued balance sheet:
As Previously Reported
Adjustments
As Restated
As of March 31, 2024
As Previously Reported
Adjustments
As Restated
Other Assets
$ 252,213
$ (146,560 ) [1]
$ 105,653
Property and Equipment, Net
1,071,249
(981,011 ) [3]
90,238
Accounts and Other Payables
(1,101,491 )
(200,000 ) [2]
JV Accrued Expenses
12,183 [4]
(1,289,308 )
Cash
3,899,152
(9,083 ) [4]
3,890,069
Non-controlling interest
109,860
(109,860 ) [4]
-
Accumulated Other Comprehensive Income (Loss)
(257,178 )
(1,169 ) [4]
(256,009 )
Accumulated Deficit
(49,049,993 )
(1,435,500 )
(50,485,493 )
As Previously Reported
Adjustments
As Restated
As of June 30, 2024
As Previously Reported
Adjustments
As Restated
Other Assets
$ 248,190
$ (146,560 ) [1]
$ 101,630
Property and Equipment, Net
1,177,452
(1,092,712 ) [3]
84,740
Accounts and Other Payables
(1,678,335 )
(200,000 ) [2]
JV Accrued Expenses
23,755 [4]
(1,854,580 )
Cash and Cash Equivalents
2,857,423
(4,305 ) [4]
2,853,118
Non-controlling interest
119,670
(119,670 ) [4]
-
Accumulated Other Comprehensive Income (Loss)
(277,736 )
(710 ) [4]
(277,026 )
Accumulated Deficit
(49,544,271 )
(1,540,202 )
(51,084,473 )
As Previously Reported
Adjustments
As Restated
As of September 30, 2024
As Previously Reported
Adjustments
As Restated
Other Assets
$ 219,280
$ (146,560 ) [1]
$ 72,720
Intangible Asset, Net
1,131,962
(1,131,962 ) [3]
-
Accounts and Other Payables
(2,701,427 )
(200,000 ) [2]
JV Accrued Expenses
50,536 [4]
(2,850,891 )
Cash and Cash Equivalents
3,598,012
(1,734 ) [4]
3,596,278
Other Current Assets
548,312
(3,278 ) [4]
545,034
Non-controlling interest
132,605
(132,605 ) [4]
-
Accumulated Other Comprehensive Income (Loss)
(249,035 )
(962 ) [4]
(248,073 )
Accumulated Deficit
(50,099,282 )
(1,566,565 )
(51,665,847 )
37
The
following table presents the effect of the restatements of the Company’s previously issued statement of operations
As Previously Reported
Adjustments
As Restated
for the three months ended March 31, 2024
As Previously Reported
Adjustments
As Restated
General and Administrative Expenses
$ 1,342,863
$ (17,504 ) [4]
$ 1,325,359
Research and Development
-
188,400 [3]
188,400
Total Operating Expenses
1,342,863
170,896 [3][4]
1,513,759
Loss Before Income Taxes
(1,087,356 )
(170,896 ) [3][4]
(1,258,252 )
Net Loss
(1,118,700 )
(170,896 ) [3][4]
(1,289,596 )
Net loss attributable to Non-contolling Interest
10,502
(10,502 ) [4]
-
Net loss attributable to Iveda Solutions, Inc
(1,108,198 )
(181,398 ) [3][4]
(1,289,596 )
Basic and Diluted Cost per Share *
(0.55 )
(0.64 )
Weighted Average Shares *
2,021,236
2,021,236
As Previously Reported
Adjustments
As Restated
For the six months ended June 30, 2024
As Previously Reported
Adjustments
As Restated
General and Administrative Expenses
$ 2,358,231
$ (34,998 ) [4]
$ 2,323,233
Research and Development
-
300,100 [3]
300,100
Total Operating Expenses
2,358,231
265,102 [3][4]
2,623,333
Loss Before Income Taxes
(1,590,880 )
(265,102 ) [3][4]
(1,855,982 )
Net Loss
(1,623,475 )
(265,102 ) [3][4]
(1,888,577 )
Net loss attributable to Non-contolling Interest
20,999
(20,999 ) [4]
-
Net loss attributable to Iveda Solutions, Inc
(1,602,476 )
(286,101 ) [3][4]
(1,888,577 )
Basic and Diluted Cost per Share *
(0.79 )
(0.93 )
Weighted Average Shares *
2,025,820
2,025,820
As Previously Reported
Adjustments
As Restated
For the nine months ended September 30, 2024
As Previously Reported
Adjustments
As Restated
General and Administrative Expenses
$ 3,370,549
$ (67,153 ) [4]
$ 3,303,396
Research and Development
-
339,350 [3]
339,350
Total Operating Expenses
3,370,549
272,197 [3][4]
3,642,746
Interest Expense
(15,420 )
64 [4]
(15,356 )
Loss Before Income Taxes
(2,165,353 )
(272,133 ) [3][4]
(2,437,486 )
Net Loss
(2,197,817 )
(272,133 ) [3][4]
(2,469,950 )
Net loss attributable to Non-contolling Interest
40,330
(40,330 ) [4]
-
Net Loss attributable to Iveda Solutions, Inc.
(2,157,487 )
(312,463 ) [3][4]
(2,469,950 )
Basic and Diluted Cost per Share *
(1.05 )
(1.20 )
Weighted Average Shares *
2,055,649
2,055,649
*
All share amounts and per share amounts reflect a reverse stock split of the outstanding shares of our Common Stock at a ratio of 1-for-8 effected on September 17, 2024.
38
The
following table presents the effect of the restatements of the Company’s previously issued statement of stockholders equity
Accumulated
Deficit
Total Stockholders’ Equity
Balance, March 31, 2024 as previously reported
$ (49,049,993 )
$ 4,645,074
Correction of Prior Period Adjustments
(346,560 ) [1][2]
(346,560 )
Capitalized Software expensed to Research and Development
(981,012 ) [3]
(981,012 )
Iveda Portion of JV Loss not consolidated
(107,928 ) [4]
3,101
Balance, March 31, 2024 as restated
(50,485,493 )
3,320,603
Balance, June 30, 2024 as previously reported
(49,544,271 )
4,236,028
Correction of Prior Period Adjustments
(346,560 ) [1][2]
(346,560 )
Capitalized Software expensed to Research and Development
(1,092,712 ) [3]
(1,092,712 )
Iveda Portion of JV Loss not consolidated
(100,930 ) [4]
19,450
Balance, June 30, 2024 as restated
(51,084,473 )
2,816,206
Balance, September 30, 2024 as previously reported
(50,099,282 )
5,531,243
Correction of Prior Period Adjustments
(346,560 ) [1][2]
(346,560 )
Capitalized Software expensed to Research and Development
(1,131,962 ) [3]
(1,131,962 )
Iveda Portion of JV Loss not consolidated
(88,044 ) [4]
45,525
Balance, September 30, 2024 as restated
(51,665,848 )
4,098,246
The
following table presents the effect of the restatements of the Company’s previously issued statement of cashflows:
As Previously Reported
Adjustments
As Restated
for the three months ended March 31, 2024
As Previously Reported
Adjustments
As Restated
Net Loss
$ (1,108,198 )
$ (188,400 ) [3]
$ (1,296,596 )
Net Cash Provided by (Used in) Operating Activities
(1,112,075 )
(188,400 ) [3]
(1,300,475 )
Purchase of Property and Equipment, Net
(188,400 )
188,400 [3]
-
Net Cash Provided by (Used in) Investing Activities
(188,400 )
188,400 [3]
-
As Previously Reported
Adjustments
As Restated
for the six months ended June 30, 2024
As Previously Reported
Adjustments
As Restated
Net Loss
$ (1,602,476 )
$ (286,101 ) [3][4]
$ (1,888,577 )
Increase (Decrease) in Accounts and Other Payables
657,858
(3,133 ) [4]
654,725
Net Cash Provided by (Used in) Operating Activities
(2,003,940 )
(289,234 ) [3][4]
(2,293,174 )
Purchase of Property and Equipment, Net
(302,726 )
300,100 [3]
(2,626 )
Net Cash Provided by (Used in) Investing Activities
(302,726 )
300,100 [3]
(2,626 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(112,694 )
922 [4]
(111,772 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(1,901,284 )
11,788
(1,889,496 )
CASH AND CASH EQUIVALENTS - END OF PERIOD
2,983,091
(4,305 )
2,978,786
As Previously Reported
Adjustments
As Restated
for the nine months ended September 30, 2024
As Previously Reported
Adjustments
As Restated
Net Loss
$ (2,157,487 )
$ (312,463 ) [3][4]
$ (2,469,950 )
Other Current Assets
(116,342 )
3,279 [4]
(113,063 )
Increase (Decrease) in Accounts and Other Payables
1,565,741
(16,979 ) [4]
1,548,762
Net Cash Provided by (Used in) Operating Activities
(3,203,769 )
(326,163 ) [3][4]
(3,529,932 )
Purchase of Intangible Asset
(339,350 )
339,350 [3]
-
Net Cash Provided by (Used in) Investing Activities
(341,965 )
339,350 [3][4]
(2,615 )
EFFECT OF EXCHANGE RATE CHANGES ON CASH
(26,780 )
(1,172 ) [4]
(27,952 )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(1,253,430 )
13,187
(1,240,243 )
CASH AND CASH EQUIVALENTS - END OF PERIOD
3,630,945
(1,734 )
3,629,211
39
ITEM
9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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