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 UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 For
the fiscal year ended December 31, 2023

 or

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 For
the transition period from ______________ to ______________

 Commission
File No. 001-41345

 IVEDA

 (Exact
name of registrant as specified in its charter)

 Nevada

 20-2222203

 (State
 or other jurisdiction of

 incorporation
 or organization)

 (I.R.S.
 Employer

 Identification
 No.)

 1744
 S Val Vista, Suite 213

 Mesa,
 Arizona

 85204

 (Address
 of principal executive offices)

 (Zip
 code)

 Registrant's
telephone number, including area code: (480) 307-8700

 Securities
registered pursuant to Section 12(b) of the Act: None

 Securities
registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.00001 per share

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act. (Check one):

 Check
one:

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated
 filer

 Smaller
 reporting company

 (Do
 not check if a smaller reporting company)

 Emerging
 growth company

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes No

 The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold was approximately $ 9,500,000 as of the last business day of the registrant's most recently completed
fiscal quarter. For purposes of this computation, all officers, directors, and 10% beneficial owners of the registrant are deemed to
be affiliates. Such determination should not be deemed to be an admission that such officers, directors, or 10% beneficial owners are,
in fact, affiliates of the registrant.

 As
of March 15, 2024, there were outstanding 16,169,891 shares of the registrant's common stock, par value $0.00001 per share.

 IVEDA

 TABLE
OF CONTENTS

 ITEM 1 – BUSINESS

 ITEM 1A – RISK FACTORS

 ITEM lB – UNRESOLVED STAFF COMMENTS

 ITEM 1C – CYBERSECURITY

 ITEM 2 – PROPERTIES

 ITEM 3 – LEGAL PROCEEDINGS

 ITEM 4 – MINE SAFETY DISCLOSURES

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

 ITEM 6 – SELECTED FINANCIAL DATA

 ITEM 7 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 ITEM 7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 ITEM 8 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 ITEM 9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 ITEM 9A – CONTROLS AND PROCEDURES

 ITEM 9B – OTHER INFORMATION

 ITEM 9C – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 ITEM 11 – EXECUTIVE COMPENSATION

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

 ITEM 13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 ITEM 14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

 ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 SIGNATURES

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 EX-31.1

 EX-31.2

 EX-32.1

 EX-32.2

 Cautionary
Note Regarding Forward-Looking Statements

 This
Annual Report on Form 10-K contains forward looking statements that involve risks and uncertainties. All statements other than statements
of historical fact contained in this Annual Report on Form 10-K, including statements regarding future events, our future financial performance,
business strategy, and plans and objectives for future operations, are forward-looking statements. In many cases, you can identify forward-looking
statements by terminology such as "anticipates," "believes," "can," "continue," "could,"
"estimates," "expects," "intends," "may," "plans," "potential,"
"predicts," "should," or "will" or the negative of these terms or other comparable terminology. Although
we do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.
These statements are only predictions and involve known and unknown risks, uncertainties, and other factors, including the risks outlined
under "Risk Factors" or elsewhere in this Annual Report on Form 10-K, which may cause our or our industry's actual
results, levels of activity, performance, or achievements to differ materially from those expressed or implied by these forward-looking
statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time, and it is
not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause our actual results to differ materially from those contained in any forward-looking
statements.

 You
should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Annual Report on
Form 10-K. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after
the date of this Annual Report on Form 10-K to conform our statements to actual results or changed expectations.

 PART
I

 ITEM
1 – BUSINESS

 History

 Iveda
Solutions, Inc. ("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. In December 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.

 In
April 2011, Iveda completed the acquisition of the Taiwan-based company Sole-Vision Technologies (doing business as Iveda Taiwan).

 Historically,
we sold and installed video surveillance equipment, primarily for security purposes and secondarily for operational efficiencies and
marketing. We also provided video hosting, in-vehicle streaming video, archiving, and real-time remote surveillance services to a variety
of businesses and organizations. While we only used off-the shelf camera systems from well-known camera brands, we now source our own
cameras using manufacturers in Taiwan in order for us to be more flexible in fulfilling our customer needs. We now have the capability
to provide IP cameras and NVRs based on customer specifications. We still utilize ONVIF (Open Network Video Interface Forum) cameras
which is a global standard for the interface of IP-based physical security products.

 In
2014, we changed our business model from direct project-based sales to licensing our platform and selling IoT hardware to service providers
such as telecommunications companies, integrators, and other technology resellers already providing services to an existing customer base.
Partnering with service providers that have an existing loyal customer base allows us to focus on servicing just a handful of our partners
and concentrating on our technology offering. Service providers leverage their end-user infrastructure to sell, bill, and provide customer
service for Iveda's product offering. This business model provides dual revenue streams – one from hardware sales and the
other from monthly licensing fees.

 Iveda
Taiwan, our subsidiary in Taiwan, specializes in deploying new, and integrating existing, video surveillance systems for airports, commercial
buildings, government customers, data centers, shopping centers, hotels, banks, and Safe City. Iveda Taiwan combines security surveillance
products, software, and services to provide integrated security solutions to the end user. Through Iveda Taiwan, we have access not only
to Asian markets but also to Asian manufacturers and engineering expertise. Iveda Taiwan is our research and development arm, working
with a team of developers in Taiwan. The company depends on Iveda Taiwan as the majority of the company's revenues have come from
Iveda Taiwan since we acquired them in April 2011.

 Overview

 Iveda
specializes in AI and digital transformation technologies with real-world applications that improve quality of life and safety worldwide.

 Iveda,
through its wholly-owned subsidiary IntelaSight, Inc. has been offering real-time IP video surveillance technologies to our customers
since 2005, prior to its merger with the company. While we still offer video surveillance technologies, our core product line has evolved
to include AI intelligent video search technology that provide true intelligence to any video surveillance system and IoT (Internet of
Things) devices and platforms. Our evolution is in response to digital transformation demands from many cities and organizations worldwide.
Our IvedaAI intelligent video search technology adds critical intelligence to normally passive video surveillance systems. IvedaAI provides
AI functions to any IP camera and most popular network video recorders (NVR) and video management systems (VMS). IvedaAI comes with an
appliance or server, preconfigured with multiple AI functions based on the end user requirements.

 In
the last few years, the concept of a smart city has been a hot topic among cities across the globe. With little to no human interaction,
technology increases efficiency, expedites decision making, and reduces response time. Dwindling public safety budgets and resources
have necessitated the transformation. More and more municipalities are using next-generation technologies to improve the safety and security
of its citizens. Our response is our complete suite of IoT technologies, including AI intelligent video search technology, smart sensors,
tracking devices, video surveillance systems, and smart power.

 Technology
/ Products

 Iveda
offers AI intelligent video search, smart utility, smart sensors, gateways, and trackers, and IoT platforms (Products).

consists of deep-learning video analytics software running in a computer/server environment that can either be deployed at an edge level
or data center for centralized cloud model. We combined hardware and artificial intelligence software for fast and efficient video search
for objects stored in an external (NVR) or storage device and live streaming video data from any IP camera.

works with any ONVIF-compliant IP cameras and most popular NVR/VMS (Video Management System) platforms, enabling accurate search across
dozens to thousands of cameras in less than 1 second. IvedaAI products are designed to maximize efficiency, save time, and cut cost.
Instead of watching hours of video recording after-the-fact, users can set up alerts.

 AI
Functions

 Object
 Search

 Face
 Search (No Database Required)

 Face
 Recognition (from a Database)

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

 Intrusion

 Weapon

 Fire

 People

 Vehicle

 Temperature

 Public
 Health Analytics (Facemask Detection)

 QR
 and Barcode Detection

 Key
Features

 Live
 Camera View

 Live
 Tracking

 Abnormality
 Detection – Vehicle/Person wrong direction detection

 Vehicle/Person
 Loitering Detection

 Fall

 Illegal
 Parking Detection

 Heatmap
 Generation

 consists of deep-learning video analytics software running in a computer/server environment that can either be deployed at an edge
level or data center for centralized cloud model. We combined hardware and artificial intelligence software for fast and efficient video
search for objects stored in an external (NVR) or storage device and live streaming video data from any IP camera.

 works with any ONVIF-compliant IP cameras and most popular NVR/VMS (Video Management System) platforms, enabling accurate search
across dozens to thousands of cameras in less than 1 second. IvedaAI products are designed to maximize efficiency, save time, and cut
cost. Instead of watching hours of video recording after-the-fact, users can set up alerts.

 Iveda
offers many IoT sensors and devices for various applications, such as energy management, smart home, smart building, smart community
and patient/elder care. Our gateway and station serve as the main hub for sensors and devices in any given area. They are equipped with
high-level communication protocols such as Zigbee, WiFi, Bluetooth, and USB. They connect to the Internet via Ethernet or cellular data
network. We provide IoT platforms that enable centralized device management and push digital services on a massive scale. Our smart devices
include water sensor, environment sensor, entry sensor, smart plug, siren, body temperature pad, a care wrist watch and tracking devices.

 We
also offer smart power technology for office buildings, schools, shopping centers, hotels, hospitals, and smart city projects. Our
smart power hardware is equipped with an RS485 communication interface allowing the meters to be connected to various third-party
SCADA (supervisory control and data acquisition) software for monitoring and control purposes. This line of product includes smart
power, water meter, smart lighting controls systems, and smart payment system.

Cerebro is a software technology platform that integrates a multitude of disparate systems for central access and management of applications,
subsystems, and devices throughout an entire environment. It is system agnostic and will support cross-platform interoperability. Cerebro's
roadmap includes a dashboard for all of Iveda's platforms for central management of all devices. It provides remote access to a
Dashboard for a single user interface, providing convenient anywhere, anytime access and analysis of relevant information in a timely
manner for managing an entire organization or city. Cerebro links city systems and subsystems inseparably to each other. This integration
and unification of all subsystems enable acquisition and analysis of all information on one central entity allowing comprehensive, effective
and overall management and protection of a city.

 IvedaSPS
 is our smart power solution, utilizing our Cerebro IoT platform. This completes our digital transformation solution crucial in smart
city deployments as well as in large organizations. We offer smart power technology for office buildings, schools, shopping centers,
hotels, hospitals, and smart city projects. This product includes smart power, water meter, smart lighting controls systems, and smart
payment system.

 In
the last few years, smart city has been a hot topic among cities across the globe. With little to no human interaction, technology increases
efficiency, expedites decision making, and reduces response time. Dwindling public safety budgets and resources have necessitated this
transformation. More and more municipalities are using next-generation technologies to improve the safety and security of its citizens.
Our response is our complete suite of IoT technologies, including AI intelligent video search technology, smart sensors, tracking devices,
video surveillance systems, and smart power.

 Utilus
 is our smart pole solution, utilizing our Cerebro IoT platform. This completes our digital transformation solution crucial in smart
city deployments as well as in large organizations. Iveda leverages infrastructure already available in most modern cities – Light
poles with power We equip existing poles with Utilus. Utilus consists of power and Internet, establishing a communication network for
access and management of sensors and devices that the city requires to keep its citizens safe and secure and to effectively manage utility
consumption. Our smart pole offering is also ideal for:

 Government
 or large-scale city deployments

 Supporting
 and Improving City Services

 Reducing
 Emergency Response Times

 Crime&
 Hazard Protection

 Monitoring
 and Improving Air Quality

 Sound

 Traffic
 Monitoring and Mobility as a Service

 Data
 Analytics and Monetization Opportunities

 vumastAR
 is an AI vision software that uses video taken on IP cameras, AR glasses, Androids, and tablets to analyze and process data in real-time.
vumastAR is fully customizable to the user's needs, with one short video the AI can be trained in as little as two hours. Deployable
in multiple industries for uses such as:

 Quality and Maintenance Exams: vumastAR has the power to assist with critical measuring of carcinogenic chemical compound levels, electrical wiring, and welding inspections.

 Factory and Line Work: Fast and accurate machine recognition enables itemized counting, inventory audits, and assembly kitting.

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

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

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

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

 Retail:
 Ensure correct item identification and organization, providing increased accuracy for retail checkout and product categorization,
 ultimately impacting revenue streams.

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

 IvedaXpress
 is a system that enables users to use pre-existing IP cameras and apply AI analytics without the need for large servers or a dedicated
IT department. Designed to be plug-and-play IvedaXpress provides a hassle free set up process with no maintenance required for hardware.
Each IP camera is hosted from a local computer or smartphone for live viewing and playback. Video may be stored on that local computer
or stored remotely using free storage from Amazon or Dropbox.

 Iveda
Smart UVC is a Commercial-grade, AI-driven Ultraviolet Germicidal Irradiation (UVGI). Iveda Smart UVC adds UV lights to standard
HVAC vents for quick, easy, and inexpensive deployment to homes and commercial buildings. Leveraging the existing air circulation system,
Iveda Smart UVC vents disinfect the air by irradiating UV light on the passing air. Eliminating the need to manually disinfect offices,
meeting rooms, and other workspaces. Iveda Smart UVC can be Integrated with Iveda SPS (smart power management) and sensors to efficiently
and effectively operate the light source upon detected movement.

Smart Drones are flown to perform certain functions from an aerial view without the need for a pilot onboard. Smart Drones utilize
AI-based software for autonomous operation and navigation from taking off, returning to base, carrying out mission-critical tasks or
simply doing an aerial patrol, without the need of human intervention. Unlike typical drones, Iveda Smart Drones are cloud-based and
can be part of a network of drones for central management. They are equipped with Iveda's Sentir Video Surveillance System and
IvedaAI Intelligent Video Search Technology.

 Iveda
Smart Drone product offering is robust and expansive for a multitude of industrial, commercial, and military applications.

 Key
Features of Iveda's Smart Drone:

 Fully
Autonomous

 Scheduled
autonomous take-off, flight mission execution, monitoring, landing and recharging

 Easy
operation and 24-7 flight mission

 Intelligent
Computing

 Live
video streaming - real-time object recognition and tracking

 Onboard
(edged) AI and data analysis

 Safety
Design

 Multiply
redundant and fail-safe systems

 Weather
resistant industrial grade systems (IP54)

 Designed
and made in Taiwan (MIT)

 Skywatch

 Planning
and editing real-time/timed missions

 User/Group
permission control & flight data management

 Failsafe
alarm and FPV gimbal control

 Insight

 Automated
orthorectified service of imagery (2D/3D)

 AI
technology for inspecting natural disaster, vehicle & pedestrian tracking, and energy facilities inspection.

 Visualizing
geographic data and analysis report

 Propellers:
 8 (multiply redundant)

 Diagonal
 Footprint: 29.76 / 756 mm

 Weight:
 14.1lbs / 6.4 Kg

 Hover
 time: 30 mins

 Wind
 tolerance: Beaufort scale – 6

 IP
 rating: IP54

 Camera
 sensor: Dual RGB, IR/thermal

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

 The
Smart Utility Cabinet gives end users a convenient tool to monitor their daily energy consumption, to pinpoint electrical leaks,
and to prevent power line overload and potential fire. It utilizes IoT sensors to detect abnormalities in consumption, temperature and
tampering. Iveda Smart Utility Cabinet has an internal environment control design, housed in a durable industrial-grade cabinet. It includes
a smart edge computing gateway with multi-RF communication protocols such as 4G, Z-Wave and WiFi and tampering sensor for unauthorized
access. Smart water meter and gas meter may be added to the Cabinet.

 Vemo
Body Camera streams live video, using 4G, to headquarters and doubles as a walkie talkie with a push-to-talk feature. With its multi-mode
audio, it can also be used for broadcasting and hands-free audio conferencing for group talk. Vemo has WiFi capability which is ideal
for city-wide deployments. Vemo transmits live streaming video instantaneously to the cloud without additional software or hardware.
Vemo's cloud management platform can centrally manage an unlimited number of devices and video can be accessed on a PC, Android,
and iOS client. Moreover, Vemo can stream directly into the IvedaAI platform for real-time video analytics to search for faces, objects
or license plates in real time.

 IvedaCare,
launched in November 2022, is a simple, easy to use suite of wireless health and wellness devices intended to help you monitor the health
and activities of your loved ones, even when you can't be there yourself. Our mission is to help ensure your loved one's
safety and independence. Stay connected to your elderly loved ones with our advanced IoT devices for real-time monitoring, fall detection,
medication reminders and more. With IvedaCare, you not only can monitor your home and loved ones from afar but can potentially make life-saving
decisions using the app. Cloud-based, wireless sensors collect real-time data shared with the entire family circle within the app. Customers
may add a subscription service for Pro Monitoring. If the Trusted Circle is unavailable, our emergency call center will dispatch emergency
services quickly.

 Customers

 Our
business model in the US is to license our software to organizations already providing services to an existing customer base and facilitating
hardware acquisition through third party partners. This business model provides dual revenue streams – one from surveillance camera
and analytics hardware sales to the service providers and the other from software licensing fees.

 Iveda
Taiwan continues to service its enterprise and government clients on a per-project basis. Some of its customers include Chunghwa Telecom,
the Taiwan Stock Exchange, New Taipei City Police Department, Chicony Power Technology Co, Ltd. and Taiwan Energy Systems.

 Here
is a sample list of our historical and present customers and partners:

 Seasonality
of Business

 There
is no significant seasonality in our business.

 Research
and Development

 Our
CTO is spearheading the continued development of Cerebro, our proprietary IoT platform, utilizing internal resources and outsourced software
engineers.

 Intellectual
Property

 We
regard certain aspects of our internal operations, products, and documentation as proprietary and rely on a combination of copyright
and trademark (federal and common) laws, trade secrets, software security measures, license agreements, and nondisclosure agreements
to protect our proprietary information. We do not own any patents, but in November 2012 we licensed, through our subsidiary, Sole-Vision
Technologies, Inc., the right to use U.S. Patent No. 8,719,442 (as well as its Taiwanese and Chinese counterparts) ITRI with respect
to the development of cloud-video technologies. We also recognize common law trademarks for "Iveda Solutions" and "Iveda"
and its logo. We have pending trademarks applications before the U.S. Patent and Trademark Office for these marks.

 We
cannot guarantee that our protections will be adequate or that our competitors will not independently develop technologies that are substantially
equivalent or superior to our system. Nonetheless, we intend to vigorously defend our proprietary technologies, trademarks, and trade
secrets. We have required and will continue to require existing and future members of management, employees, and consultants to sign
non-disclosure and invention assignment agreements for work performed on our behalf.

 We
are currently developing Cerebro IoT platform. Cerebro is a federated software platform for smart city management. It consists of power
management, traffic management, location-based asset tracking, security systems management and AI intelligent video search management.
We may consider patent protection for Cerebro based on the unique features we are developing. We are using a combination of open source
and proprietary code for all our source coding.

 We
do not believe that our proprietary rights infringe the intellectual property rights of third parties. However, we cannot guarantee that
third parties will not assert infringement claims against us with respect to current or future technology or that any such assertion
may not require us to enter into royalty arrangements or result in costly litigation. Furthermore, our proposed future products and services
may not be proprietary and other companies may already be providing these products and services.

 Environmental
Issues

 Our
business currently does not implicate any environmental regulation.

 Industry
Overview

 Iveda
is in AI space providing critical intelligence to video surveillance systems and IoT space providing digital transformation
solutions to cities around the world. Both industry segments are projected to grow significantly. According to International Data
Corporation (IDC) Worldwide Artificial Intelligence Spending Guide, global spending on AI is forecast to double over the next four
years from USD 50.1 billion in 2020 to more than USD 110 billion in 2024. Spending on AI systems will accelerate over the next
several years as organizations deploy artificial intelligence as part of their digital transformation efforts and to remain
competitive in the digital economy.

 According
to Fortune Business Insights, the global IoT market size was USD 308.97 billion in 2020, exhibiting a growth of 23.1% in 2020 compared
to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 381.30 billion in 2021 to USD 1,854.76
billion in 2028.

 Corporate

 Our
principal executive office is located at 1744 S. Val Vista Drive, Ste. 213, Mesa, Arizona 85204. The telephone number of our principal
executive offices is (480) 307-8700. Our registered agent is CT Corporation System and their office is located at 701 S Carson Street,
Suite 200, Carson City, NV, 89701. Information contained on our website on that can be accessed through our website is not incorporated
by reference in this prospectus.

 Government
Regulation

 The
security and surveillance industry and consumer data privacy are subject to government regulation. Future changes in laws or regulations
could require us to change the way we operate, which could increase costs or otherwise disrupt operations. In addition, failure to comply
with any applicable laws or regulations could result in substantial fines or revocation of any required operating permits and licenses.
If laws and regulations change or we fail to comply in the future, our business, financial condition, and results of operations could
be materially and adversely affected.

 Employees

 As
of December 31, 2023, we had 7 full-time employees in the United States and 25 full-time employees in Taiwan. Our future success will
depend, in part, on our ability to attract, retain, and motivate highly qualified security, sales, marketing, technical, and management
personnel. From time to time, we employ independent consultants or contractors to support our development, marketing, sales and support,
and administrative needs. Our employees are not represented by any collective bargaining unit.

 Insurance

 We
maintain insurance, including comprehensive general liability coverage, in amounts and types of coverage that we believe are customary
in our industry. Special coverage is sometimes added in response to unique customer requirements. We also maintain compliance with applicable
state workers' compensation laws. A certificate of insurance, which meets individual contract specifications, is made available
to every customer.

 Our
History

 We
were incorporated in Nevada in June 2006 under the name Charmed Homes, Inc. and engaged in the construction and marketing of custom homes
in Alberta, Canada. As a result of the unfavorable housing market and a lack of available funding, we ceased operations in 2008. On October
15, 2009, we completed a reverse merger with IntelaSight, Inc. doing business as Iveda Solutions, a Washington corporation ("IntelaSight"),
pursuant to which IntelaSight became a wholly owned subsidiary of our company. Thereafter, we changed our name to Iveda Corporation.
After the reverse merger, all of our operations were conducted under IntelaSight until December 31, 2010, at which time IntelaSight merged
with and into our company, with our company surviving. At that time, we changed our name to Iveda Solutions, Inc. On April 30, 2011,
we completed our acquisition of Iveda Taiwan, which was incorporated in the Republic of China (Taiwan) on July 5, 1999.

 Our
common stock is listed on NASDAQ under the symbol "IVDA."

 Available

 Our
principal executive offices are located at 1744 Val Vista, Suite 213, Mesa, Arizona 85204 and our telephone number is (480) 307-8700.
Iveda Taiwan's headquarters is located at 2F,-15, No. 14, Lane 609, Sec. 5, Chongxin Rd., Sanchong Dist., New Taipei City 241, Taiwan
(R.O.C.). We have two website addresses: www.iveda.com and www.mega-sys.com. The information contained on our websites
does not constitute a part of this Annual Report on Form 10-K.

 We
electronically file our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments
to these reports and other information with the Securities and Exchange Commission (the "SEC"). Through our website, we make
available free of charge our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments
to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

 The
public can also obtain copies of any materials we file with, or furnish to, the SEC by visiting the SEC's Public Reference Room
at 100 F Street NE, Washington, DC 20549 on official business days during the hours of 10:00 a.m. to 3:00 p.m. or by calling the SEC
at 1-800-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC.

 ITEM
1A – RISK FACTORS

 An
investment in our common stock involves a high degree of risk. Before deciding whether to invest in our securities, you should consider
carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled
"Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial
statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations or cash
flow could be materially and adversely affected, which could cause the trading price of our common stock to decline, resulting in a loss
of all or part of your investment. The risks described below and in the documents referenced above are not the only ones that we face.
Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider
investing in our securities if you can bear the risk of loss of your entire investment.

 Risks
Related to Our Company and Business

 We
Have Incurred Significant Net Losses Since Our Inception And May Not Be Able To Achieve Or Maintain Profitability On An Annual Basis
In The Future.

 We
have incurred significant net losses since our inception. For the years ended December 31, 2023 and 2022, we incurred net losses of approximately
$3.2 million and $3.3 million, respectively, and had accumulated losses of approximately $47 million through December 31, 2023. We cannot
predict if we will achieve or maintain annual profitability in the near future or at all. The expected growth due to the recent change
in our revenue model may not be sustainable or may decrease, and we may not generate sufficient revenue to achieve or maintain annual
profitability. Our ability to achieve and maintain annual profitability depends on a number of factors, including our ability to attract
and service customers on a profitable basis and the growth of the video surveillance industry. If we are unable to achieve or maintain
annual profitability, we may not be able to execute our business plan, our prospects may be harmed, and our stock price could be materially
and adversely affected.

 We
Depend On Certain Key Personnel.

 Our
future success is dependent on the efforts of key management personnel, particularly David Ly, our Chairman and Chief Executive Officer,
Robert J. Brilon, our Chief Financial Officer, and Gregory Omi, our Chief Technology Officer, each of whom is employed by us at will.
Mr. Ly's relationships within our industry are vital to our continued operations, and if Mr. Ly were no longer actively involved
with us, we would likely be unable to continue our operations. The loss of one or more of our other key employees could also have a material
adverse effect on our business, financial condition, and results of operations.

 We
also believe that our future success will be largely dependent on our ability to attract and retain highly qualified management, sales,
and marketing personnel. We cannot assure investors that we will be able to attract and retain such personnel and our inability to retain
such personnel or to train them rapidly enough to meet our expanding needs could cause a decrease in the overall quality and efficiency
of our staff, which could have a material adverse effect on our business, financial condition, and results of operations.

 Demand
For Our Products May Be Lower Than We Anticipate.

 We
have limited resources to undertake reseller distribution activities. We cannot predict with certainty the potential customer demand
for our intelligent video search, smart utility, smart sensors, gateways and trackers, and IoT platforms (Products) or the degree to
which we will meet that demand. If demand for our Products does not develop to the extent or as quickly as expected, we might not be
able to generate enough revenue to become profitable.

 We
are currently targeting the sale of our Products to telecommunications companies and technology and systems integrators. Our strategy
to target those organizations is based upon their interest and a number of assumptions, some or all of which could prove to be incorrect.

 Even
if markets for our Products develop, we could achieve a smaller share of those markets than we currently anticipate. Achieving market
share will require substantial investment in technical, marketing, project management, and engineering functions to support the deployment
of our Products. We cannot assure investors that our efforts will result in the attainment of sufficient market share to become profitable.

 We
Believe Industry Trends Support Our Open Source Systems, But If Trends Reverse We May Experience Decreased Demand.

 The
security and surveillance industry is characterized by rapid changes in technology and customer demands. We believe that the existing
market preference for open source systems (systems capable of integrating a wide range of products and services through community and
private-based cooperation, such as the Internet, Linux, and certain cameras used in our business) is strong and will continue for the
foreseeable future. We cannot assure investors that customer demand for our products and the market's preference for open source
systems will continue. A lack of customer demand or a decline in the preference of open source systems could have a material adverse
effect on our business, financial condition, and results of operations.

 A
Relatively Small Number Of Key Customers Account For A Significant Portion Of Our Revenue.

 Historically,
a significant portion of our revenue has come from a limited number of key customers. 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). Revenue from two customers out of 42 total customers
represented approximately 52% of total revenue for the year ended December 31, 2022. These specific customers were 1) Chunghwa Telecom
with 21%, 2) Chicony Power Technology Co Ltd with 31%, (both Taiwan companies). Total number of customers were 65 and 42, for the years
ended December 31, 2023 and 2022, respectively. 50% of the total accounts receivable at December 31, 2023 was from one customer out of
a total of 24 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 generally do not require collateral in exchange for our products and services provided on credit.

 Our
licensing business, in particular, may be susceptible to concentration of revenue, if through our licensing customers' large consumer
bases of end users. The loss of a key service provider customer, the delay, reduction, or cancellation of a significant order, or difficulty
collecting on our accounts receivable from our service provider customers could have a material adverse effect on our business, financial
condition, and results of operations.

 Payment
terms for our U.S.-based segment require prepayment for our Products before they are shipped. For our U.S.-based segment, accounts receivable
that are more than 120 days past due are considered delinquent. Payment terms for our Taiwan-based segment vary based on our agreements
with our customers. Generally, we receive payment for our Products and services within one year of commencing the project, except that
we retain 5% of the total payment amount and release such amount one year after the completion of the project. Iveda Taiwan provides
an allowance for doubtful accounts for any receivables that will not be paid within one year, which excludes such retained amounts. We
have set up no doubtful accounts receivable allowances for our Taiwan-based and U.S.-based segments, respectively, as of the years ended
December 31, 2023 and 2022. We deem our accounts receivable to be collectible based on certain factors, including the nature of the customer
contracts and past experience with similar customers.

 We
Rely On Iveda Taiwan, Our Taiwan Subsidiary, For A Significant Portion Of Our Revenue.

 We
rely on Iveda Taiwan, our Taiwan subsidiary, for a significant portion of our revenue. For the years ended December 31, 2023 and 2022,
Iveda Taiwan's operations accounted for 87% and 79% of our total revenue, respectively. If Iveda Taiwan experiences a decline in
customer demand for its services, an increase in supplier pricing, currency fluctuations, or general economic or governmental instability,
our business, financial condition, and results of operations may be materially and adversely affected.

 Rapid
Growth May Strain Our Resources.

 As
we continue the commercialization of our Products, we expect to experience significant and rapid growth in the scope and complexity of
our business, which may place a significant strain on our senior management team and our financial and other resources. Such growth,
if experienced, may expose us to greater costs and other risks associated with growth and expansion. We may be required to hire a broad
range of additional employees, including engineers, project managers, and other support personnel, among others, in order to successfully
advance our operations. We may also be required to expand and enhance our technology to accommodate customized customer solutions. We
may be unsuccessful in these efforts or we may be unable to project accurately the rate or timing of these increases.

 The
nature of our distribution channel business does not require us to increase our leased space. Our licensing partners may host our platforms
in their own data centers or public cloud such as Amazon or Google. Our ability to manage our rapid growth effectively will require us
to continue to improve our operations, to improve our financial and management information systems, and to train, motivate, and manage
our employees.

 This
growth may place a strain on our management and operational resources. The failure to develop and implement effective systems, or to
hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage our business,
or the failure to manage growth effectively, could have a materially adverse effect on our business, financial condition, and results
of operations. In addition, difficulties in effectively managing the budgeting, forecasting, and other process control issues presented
by such a rapid expansion could harm our business, financial condition, and results of operations.

 We
Depend On Third Party Manufacturers and Suppliers For The Products We Sell.

 We
have relationships with a number of third-party manufacturers and suppliers that provide all of the hardware components of our Products.
We have direct relationships with camera manufacturers in Taiwan for camera systems. Risks associated with our dependence upon third-party manufacturers include the following: (i) reduced control over delivery schedules; (ii) lack of control over quality assurance;
(iii) poor manufacturing yields and high costs; (iv) potential lack of adequate capacity during periods of excess demand; and (v) potential
misappropriation of our intellectual property. Although we depend on third-party manufacturers and suppliers for the Products we sell,
risks are minimized because we do not depend exclusively on any one manufacturer or supplier. We utilize an open platform, which means
that in order to deliver our services, we do not discriminate based on camera brand or manufacturer and our services can be used with
a wide array of products.

 We
do not know if we will be able to maintain third-party manufacturing and supply contracts on favorable terms, if at all, or if our current
or future third-party manufacturers and suppliers will meet our requirements for quality, quantity, or timeliness. Our success depends
in part on whether our manufacturers are able to fill the orders we place with them in a timely manner. If our manufacturers fail to
satisfactorily perform their contractual obligations or fill purchase orders we place with them, we may be required to pursue replacement
manufacturer relationships.

 While
we believe we would be able to find replacement sources for all of our third-party manufacturers and suppliers, if we are unable to find
replacements on a timely basis, or at all, we may be forced to either temporarily or permanently discontinue the sale of certain products
and associated services, which could expose us to legal liability, loss of reputation, and risk of loss or reduced profit. We believe
that our present suppliers offer products that are superior to comparable products available from other suppliers. In addition, we have
development partner relationships with many of our present suppliers, which provide us with greater control over future enhancements
to the products we sell. Our business, financial condition, results of operation, and reputation could be adversely impacted if we are
unable to provide quality products to our customers in a timely manner.

 We
could also be adversely affected by an increase in our manufacturers' prices for our product components or a significant decline
in our manufacturers' financial condition. Our manufacturers' prices may increase as a result of internal price determinations,
fluctuations in the prices of raw materials, natural disasters, raw material shortages, or other events beyond our control. If our relationship
with any one of our manufacturers is terminated and we cannot successfully establish a relationship with an alternative manufacturer
that offers similar services at similar prices, our costs could increase, adversely affecting our operations.

 We
Operate In A Highly Competitive Industry And Our Failure To Compete Effectively May Adversely Affect Our Ability To Generate Revenue.

 We
believe that our products offer more functions and are priced better than our competitors. However, some companies may be developing
a similar product, including companies that may have significantly greater financial, technical, and marketing resources, larger
distribution networks, and that generate greater revenue and have greater name recognition than we do. Those companies may develop
products that are superior to those that we offer. Such competition may potentially affect our chances of achieving
profitability.

 Some
of our competitors may conduct more extensive promotional activities and may offer lower prices to customers than we can, which could
allow them to gain greater market share or prevent us from increasing our market share. In the future, we may need to decrease our prices
to remain competitive. Our competitors may be able to respond more quickly to new or changing opportunities, technologies, and customer
requirements. To be successful, we must carry out our business plan, establish and strengthen our brand awareness through marketing,
effectively differentiate our services from those of our potential competitors, and build our network of service providers, while maintaining
a superior platform and level of service, which we believe will ultimately differentiate our Products from those of our competitors.
We may have to substantially increase marketing and development activities to compete effectively.

 If
Our Information Security Measures Are Breached And Unauthorized Access Is Obtained, Existing And Potential Service Providers May Not
Perceive Our Software And Services As Being Secure And May Terminate Their Licensing Agreements Or Fail To Order Additional Products
And Services.

 Our
software involves the monitoring of cameras that may be recording sensitive areas of end users' facilities and the storage of sensitive
data obtained from such cameras. Our software utilizes data and other security measures that are comparable to those used by financial
institutions. However, because we no longer host the platform at our own data centers, information security risks associated with data
centers are borne by the service providers. If we or any of our service providers or their end-users experience any breach of security
in our software, we may be required to expend significant capital and resources to help restore our service providers' systems.
Furthermore, because techniques used to obtain unauthorized access to information systems change frequently and generally are not recognized
until launched against a target, we may not be able to anticipate those techniques or to implement adequate preventative measures. Given
the nature of our business and the business of the service providers we serve, if unauthorized parties gain access to our or our service
providers' information systems or such information is used in an unauthorized manner, misdirected, lost, or stolen during transmission,
any theft or misuse of such information could result in, among other things, unfavorable publicity, governmental inquiry and oversight,
difficulty in marketing our software, allegations by our service providers that we have not performed our contractual obligations, termination
of services by existing customers, litigation by affected parties, and possible financial obligations for damages related to the theft
or misuse of such information, any of which could have a material adverse effect on our business, financial condition, and results of
operations.

 Our
Property And Business Interruption Insurance Coverage Is Limited And May Not Compensate Us Fully For Losses That May Occur As A Result
Of A Disruption To Our Business.

 Our
property and business interruption insurance coverage is limited and is subject to deductibles and coverage limits. In the event that
we experience a disruption to our business, our insurance coverage may not compensate us fully for losses that may occur. Any damage
or failure that causes interruptions to our business could have a material adverse effect on our business, financial condition, and results
of operations.

 The
Timing Of Our Revenue Can Vary Depending On How Long Customers Take To Evaluate Our Platform.

 It
is difficult to forecast the timing of revenue because the development period for a customized system or solution may be lengthy. In
addition, our larger customers may need a significant amount of time to evaluate our products before purchasing them, and our governmental
customers are subject to budgetary and other bureaucratic processes that may affect the timing of payment. The period between initial
customer contact and a purchase by a customer varies greatly depending on the customer and historically has taken several months. During
the evaluation period, customers may defer or reduce proposed orders of products or systems for various reasons, including (i) changes
in budgets and purchasing priorities, (ii) decreased market adoption expectations, (iii) a reduced need to upgrade existing systems,
(iv) introduction of products by competitors, and (v) general market and economic conditions.

 We
Are Subject To Certain Risks Inherent In Managing And Operating Businesses In Taiwan.

 We
have significant international operations in Taiwan that involve matters central to our business, including those relating to e-commerce,
privacy and data protection, live streaming services, intellectual property, computer security, anti-money laundering, anti-corruption
and anti-bribery, currency control regulations, data protection, privacy, consumer protection, competition, telecommunications and product
liability. There are risks inherent in operating and selling products and services internationally, including the following: different
regulatory environments and reimbursement systems; difficulties in enforcing agreements and collecting receivables through certain foreign
legal systems; foreign customers who may have longer payment cycles than customers in the United States; fluctuations in foreign currency
exchange rates; tax rates in certain foreign countries that may exceed those in the United States and foreign earnings that may be subject
to withholding requirements; the imposition of tariffs, exchange controls, or other trade restrictions; general economic and political
conditions in countries where we operate or where our customers reside; government control of capital transactions, including the borrowing
of funds for operations or the expatriation of cash; potential adverse tax consequences; security concerns and potential business interruption
risks associated with political or social unrest in foreign countries where our facilities or assets are located; difficulties associated
with managing a large organization spread throughout various countries; difficulties in enforcing intellectual property rights and weaker
intellectual property rights protection in some countries; required compliance with a variety of foreign laws and regulations; and differing
customer preferences. The factors described above may have a material adverse effect on our business, financial condition, and results
of operations.

 Because
the majority of the Company's revenues come from our Iveda Taiwan subsidiary, which is located in Taiwan, the Company is subject
to the risks of doing business in Taiwan, including periodic foreign economic downturns and political instability, which may adversely
affect the Company's revenue and cost of doing business in Taiwan.

 Sole-Vision
Technologies (doing business as Iveda Taiwan) is the Company's wholly-owned subsidiary and generates the majority of the Company's
revenues. Iveda Taiwan' primary place of business is in Taiwan, Republic of China, and the Company has certain key employees in
Taiwan. Foreign economic downturns may affect our results of operations in the future. Additionally, other facts relating to the operation
of the Company's business outside of the U.S. may have a material adverse effect on the Company's business, financial condition
and results of operations, including:

 international
 economic and political changes;

 the
 imposition of governmental controls or changes in government regulations, including tax laws, regulations, trade policies, and
 treaties;

 changes
 in, or impositions of, legislative or regulatory requirements regarding the pharmaceutical industry;

 compliance
 with U.S. and international laws involving international operations, including the Foreign Corrupt Practices Act and export control
 laws;

 restrictions
 on transfers of funds and assets between jurisdictions;

 disruption to supply chains, impacting access to raw materials, labor, or finished products from third-party manufacturers;

 uncertainty in financial markets, leading to currency fluctuations, changes in interest rates, and stock market volatility;

 risk of elevated security concerns, including cyber threats, protests, or civil unrest; and

 China-
 Taiwan geo-political instability.

 As
the Company continues to operate its business in Taiwan, our success will depend in part, on our ability to anticipate and effectively
manage these risks. The impact of any one or more of these factors could materially adversely affect our business, financial condition
and results of operations.

 Recent
Geopolitical issues, conflicts and other global events could adversely affect our results of operations and financial condition.

 Because
a substantial portion of our business is conducted outside of the United States, our business is subject to global political issues and
conflicts. Such political issues and conflicts could have a material adverse effect on our results of operations and financial condition
if they escalate in areas in which we do business. In addition, changes in and adverse actions by governments in foreign markets in which
we do business could have a material adverse effect on our results of operations and financial condition. For example, the recent and
continuing conflict arising from the invasion of Ukraine by Russia could adversely impact macroeconomic conditions, give rise to regional
instability and result in heightened economic tariffs, sanctions and import-export restrictions from the U.S. and the international community
in a manner that adversely affects us, including to the extent that any such actions cause material business interruptions, restrict
our ability to conduct business with certain suppliers or vendors, utilize the banking system, or repatriate cash.

 We
face risks associated with increased political uncertainty.

 The
recent invasion of Ukraine by Russia and the sanctions, bans and other measures taken by governments, organizations and companies against
Russia and certain Russian citizens in response thereto has increased the political uncertainty in Europe and has strained the relations
between Russia and a significant number of governments, including the U.S. The duration and outcome of this conflict, any retaliatory
actions taken by Russia and the impact on regional or global economies is unknown, but could have a material adverse effect on our business,
financial condition and results of our operations.

 In
the U.S., the change in the U.S. government to the Biden administration has resulted in uncertainty regarding potential changes in regulations,
fiscal policy, social programs, domestic and foreign relations and international trade policies. In addition, potential changes in relationships
among the U.S. and China and other countries including Taiwan could have significant impacts on global trade and regional economic conditions,
among other things. In addition, changes in the relationships between the U.S. and its neighbors, such as Mexico, could have significant,
potentially negative, impacts on commerce. Further, anti-American sentiment could harm the reputation and success of U.S. companies doing
business abroad.

 Our
ability to respond to these developments or comply with any resulting new legal or regulatory requirements, including those involving
economic and trade sanctions, could reduce our sales, increase our costs of doing business, reduce our financial flexibility and otherwise
have a material adverse effect on our business, financial condition and results of our operations.

 Our
supply chain may be disrupted by changes in U.S. trade policy.

 We
rely on domestic and foreign suppliers to provide us with products in a timely manner and at favorable prices. We have experienced, and
expect to continue to experience, increased international transit times. A disruption in the flow of our imported products or a material
increase in the cost of those goods or transportation without any offsetting price increases may significantly decrease our profits.
U.S. tariffs or other actions against foreign nations including China and any responses by such nations including China, could impair
our ability to meet customer demand and could result in lost sales or an increase in our cost of products This would have a material
adverse impact on our business and results of operations.

 Our
business activities may be subject to the U.S. Foreign Corrupt Practices Act, or the FCPA, and similar anti-bribery and anti-corruption
laws of other countries in which we operate, as well as U.S. and certain foreign export controls, trade sanctions, and import laws and
regulations. Compliance with these legal requirements could limit our ability to compete in foreign markets and subject us to liability
if we violate them.

 If
we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and
regulations in each jurisdiction in which we plan to operate. Our business activities may be subject to the FCPA and similar anti-bribery
or anti-corruption laws, regulations or rules of other countries in which we operate. The FCPA generally prohibits companies and their
employees and third party intermediaries from offering, promising, giving or authorizing the provision of anything of value, either directly
or indirectly, to a non-U.S. government official in order to influence official action or otherwise obtain or retain business. The FCPA
also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation
and to devise and maintain an adequate system of internal accounting controls. Our business is heavily regulated and therefore involves
significant interaction with public officials, including officials of non-U.S. governments. Additionally, in many other countries, hospitals
owned and operated by the government, and doctors and other hospital employees would be considered foreign officials under the FCPA.
Recently the Securities and Exchange Commission (SEC) and Department of Justice (DOJ) have increased their FCPA enforcement activities
with respect to biotechnology and pharmaceutical companies. There is no certainty that all of our employees, agents or contractors, or
those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these
laws. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, disgorgement,
and other sanctions and remedial measures, and prohibitions on the conduct of our business. Any such violations could include prohibitions
on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international
activities, our ability to attract and retain employees and our business, prospects, operating results and financial condition.

 In
addition, our products and technology may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations.
Governmental regulation of the import or export of our products and technology, or our failure to obtain any required import or export
authorization for our products, when applicable, could harm our international sales and adversely affect our revenue. Compliance with
applicable regulatory requirements regarding the export of our products may create delays in the introduction of our products in international
markets or, in some cases, prevent the export of our products to some countries altogether. Furthermore, U.S. export control laws and
economic sanctions prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S. sanctions.
If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or
denial of certain export privileges. Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement
or scope of existing regulations, or in the countries, persons, or products targeted by such regulations, could result in decreased use
of our products by, or in our decreased ability to export our products to existing or potential customers with international operations.
Any decreased use of our products or limitation on our ability to export or sell access to our products would likely adversely affect
our business.

 We
Rely On Service Providers To Distribute Our Products To Customers.

 We
rely on service providers such as telecommunications companies, security integrators and other technology integrators to purchase and
distribute our Products to their customers. We plan to continue this method of our internal sales activity for the foreseeable future
to service large service providers and government accounts. While we believe we will be able to find alternate service providers if our
relationship with any of our larger service providers is terminated and we are not successful in establishing a relationship with an
alternative service provider that offers similar services at similar prices, our business could decline.

 We
have acquired, and may in the future acquire, assets, businesses and technologies as part of our business strategy. If we acquire companies
or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value, and adversely
affect our operating results and the value of our common stock.

 As
part of our business strategy, we may acquire, enter into joint ventures with, or make investments in complementary or synergistic companies,
services, and technologies in the future. Acquisitions and investments involve numerous risks, including, without limitation:

 difficulties
 in identifying and acquiring products, technologies, proprietary rights or businesses that will help our business

 difficulties
 in integrating operations, technologies, services, and personnel

 diversion
 of financial and managerial resources from existing operations

 the
 risk of entering new development activities and markets in which we have little to no experience

 risks
 related to the assumption of known and unknown liabilities

 risks
 related to our ability to raise sufficient capital to fund additional operating activities and

 the
 issuance of our securities as partial or full payment for any acquisitions and investments could result in material dilution to our
 existing stockholders.

 If
we fail to integrate any acquired business into our operations, or if we fail to properly evaluate acquisitions or investments, we may
not achieve the anticipated benefits of any such acquisitions, we may incur costs in excess of what we anticipate, and management resources
and attention may be diverted from other necessary or valuable activities.

 Any
acquisitions we make could disrupt our business and seriously harm our financial condition.

 We
have in the past made (and may, from time to time, consider) acquisitions of complementary companies, products or technologies. Acquisitions
involve numerous risks, including difficulties in the assimilation of the acquired businesses, the diversion of our management's
attention from other business concerns and potential adverse effects on existing business relationships. In addition, any acquisitions
could involve the incurrence of substantial additional indebtedness. We cannot assure you that we will be able to successfully integrate
any acquisitions that we pursue or that such acquisitions will perform as planned or prove to be beneficial to our operations and cash
flow. Any such failure could seriously harm our business, financial condition and results of operations.

 Our
Ability To Use Our Net Operating Loss Carryforwards And Certain Other Tax Attributes May Be Limited, Which Could Potentially Result In
Increased Tax Liabilities To Us In The Future.

 In
prior years, we have suffered losses, for tax and financial statement purposes that generated significant federal and state net operating
loss carryforwards. As of December 31, 2023, we had approximately $35.0 million of federal and $5.0 million of state net operating loss
carryforwards, which we believe could offset otherwise taxable income in the United States and Arizona. Our federal net operating loss
carryforwards begin to expire in 2025. Our state net operating loss carryforwards, which are applicable in California and Arizona, began
to expire in 2014. Although these net operating loss carryforwards may be used against taxable income in future periods, we will not
receive any tax benefits from the losses we incurred unless, and only to the extent that, we have taxable income during the period prior
to their expiration. In addition, our ability to use the net operating loss carryforwards would be severely limited in the event we complete
a transaction that results in an ownership change under Section 382 of the Internal Revenue Code of 1986, as amended.

 Risks
Related to Our Intellectual Property

 We
Could Incur Substantial Costs Defending Against Claims That Our Products Infringe On The Proprietary Rights Of Others.

 We
do not own any patents. While we do not believe that our products infringe on the proprietary rights of any third parties, the intellectual
property rights that we do have may not be sufficient to prevent infringement claims against us or claims that we have violated the intellectual
property rights of third parties. We were named as a defendant in two patent-related lawsuits, both of which have been settled.

 Competitors
may have filed patent applications for or may have been issued patents and may obtain additional patents or other proprietary rights
relating to products or processes that compete with or are related to our products and services. The scope and viability of these patents
and other proprietary rights, the extent to which we may be required to obtain licenses under these patents or under other proprietary
rights, and the cost and availability of licenses are unknown, but these factors may limit our ability to market our products and services.

 While
we do not believe that our products infringe on the proprietary rights of any third parties, third parties may claim infringement by
us with respect to any patents or other proprietary rights that they hold, and we cannot assure investors that we would prevail in any
such proceeding as the intellectual property status of our current and future competitors' products and services is uncertain.
Any infringement claim against us, whether meritorious or not, could be time-consuming, result in costly litigation or arbitration and
diversion of technical and management personnel, or require us to develop non-infringing technology or to enter into royalty or licensing
agreements.

 We
may not be successful in developing or otherwise acquiring rights to non-infringing technologies. Royalty or licensing agreements, if
required, may not be available on terms acceptable to us, or at all, and could significantly harm our business and operating results.
A successful claim of infringement against us or our failure or inability to license the infringed or similar technology could require
us to pay substantial damages and could harm our business because we would not be able to continue operating our products without incurring
significant additional expense.

 In
addition, to the extent we have agreed to or will agree to indemnify customers or other third parties against infringement of the intellectual
property rights of others, a claim of infringement could require us to incur substantial time, effort, and expense to indemnify these
customers and third parties and could disrupt or terminate their ability to use, market, or sell our products. Furthermore, our suppliers
may not provide us with indemnification in the event that their products are found to infringe upon the intellectual property rights
of any third parties, and if they do not, we would be forced to bear any resulting expense.

 We
Depend On Our Intellectual Property.

 Our
success and ability to compete depends in part on our proprietary Cerebro Smart IoT Platform and IvedaAI intelligent video search technology.
We rely on a combination of copyright and trademark (federal and common) laws, trade secrets, software security measures, license agreements,
and nondisclosure agreements to protect our proprietary information. We licensed, through our subsidiary, Sole-Vision Technologies, Inc.,
the right to use U.S. Patent No. 8,719,442 (as well as its Taiwanese and Chinese counterparts) from Industrial Technology Research Institute
(ITRI) with respect to the development of cloud-video technologies. If any of our competitors copy or otherwise gain access to our proprietary
technology or develop similar technologies independently, we may not be able to compete as effectively. We consider our proprietary platform
invaluable to our ability to continue to develop and maintain the goodwill and recognition associated with our brand. We do not currently
own any patents. The measures we take to protect our technologies and other intellectual property rights, which presently are based upon
trade secrets, may not be adequate to prevent their unauthorized use.

 If
we are unable to protect our intellectual property, our competitors could use our intellectual property to market products, services,
and technologies similar to ours, which could reduce demand for our Products, services, and technologies. We may be unable to prevent
unauthorized parties from attempting to copy or otherwise obtaining and using our products or technology. Policing unauthorized use of
our technology is difficult, and we may not be able to prevent misappropriation of our technology, particularly in foreign countries
where the laws may not protect our intellectual property as fully as those in the United States. Others may circumvent the trade secrets,
trademarks, and copyrights that we currently or in the future may own. We do not have patent protection with respect to our software
or systems, although we are considering seeking such protection.

 We
seek to protect our proprietary intellectual property, which includes intellectual property that may only be protectable as a trade secret,
in part by confidentiality agreements with our employees, consultants, and business partners. These agreements afford only limited protection
and may not provide us with adequate remedies for any breach or prevent other persons or institutions from asserting rights to intellectual
property arising out of these relationships. See "Business – Intellectual Property."

 We
Could Incur Substantial Costs Defending Our Intellectual Property From Infringement By Others.

 Unauthorized
parties may attempt to copy aspects of our proprietary software or to obtain and use our other proprietary information. Litigation may
be necessary to enforce our intellectual property rights, to protect our trade secrets, and to determine the validity and scope of the
proprietary rights of others. We may not have the financial resources to prosecute any infringement claims that we may have. Any litigation
could result in substantial costs and diversion of resources with no assurance of success.

 Risk
Related to Ownership of Our Securities

 We
May Not Be Able To Access The Equity Or Credit Markets.

 We
face the risk that we may not be able to access various capital sources, including investors, lenders, or suppliers. Failure to access
the equity or credit markets from any of these sources could have a material adverse effect on our business, financial condition, results
of operations, and future prospects.

 Future
Sales Of Our Common Stock In The Public Market By Our Existing Stockholders, Or The Perception That Such Sales Might Occur, Could Depress
The Market Price Of Our Common Stock.

 The
market price of our common stock could decline as a result of the sales of a large number of shares of our common stock in the market
by the selling stockholders, and even the perception that these sales could occur may depress the market price of our common stock.

 Future
Sales And Issuances Of Our Common Stock Or Rights To Purchase Common Stock By Us, Including Pursuant To Acquisitions, Investments, Financings
or Our Equity Incentive Plans, Could Result In Additional Dilution Of Percentage Ownership Of Our Stockholders And Could Cause Our Stock
Price To Fall.

 We
intend to issue additional securities pursuant to our equity incentive plans and may issue equity or convertible securities in the future
in connection with acquisitions, investments and/or additional financings. To the extent we do so, our stockholders may experience substantial
dilution. We may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a
manner we determine from time to time. If we sell common stock, convertible securities, or other equity securities in more than one transaction,
investors may be materially diluted by subsequent sales and new investors could gain rights superior to our existing stockholders.

 There
Is A Limited Market For Our Common Stock.

 Our
common stock is listed on the Nasdaq Capital Markets under the symbol "IVDA". No assurance can be given that an active trading
market for our shares will be maintained. In the absence of an active trading market for our common stock, the ability of our stockholders
to sell their shares could be limited.

 Our
Warrants are speculative in nature.

 Our
Warrants do not confer any rights of common stock ownership on its holders, such as voting rights or the right to receive dividends,
but rather merely represent the right to acquire common stock at a fixed price for a limited period of time. Commencing on the date of
issuance, holders of the Warrants may exercise their rights to acquire the common stock and pay an exercise price of $4.25 per share,
subject to certain adjustments, prior to the fifth anniversary of the date of issuance, after which date any unexercised Warrants will
expire and have no further value.

 Our
Reporting Obligations As A Public Company Are Costly.

 As
a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"), and the Securities Act. These rules, regulations
and requirements are extensive. We may incur significant costs associated with our public company corporate governance and reporting
requirements. This may divert management's attention from other business concerns, which could have a material adverse effect on
our business, financial condition and results of operations. We also expect that these applicable rules and regulations may make it more
difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy
limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult
for us to attract and retain qualified individuals to serve on our board of directors or as executive officers.

 Future
Changes in Financial Accounting Standards or Practices May Cause Adverse Unexpected Financial Reporting Fluctuations and Affect Reported
Results of Operations.

 A
change in accounting standards or practices can have a significant effect on our reported results and may even affect our reporting of
transactions completed before the change is effective. New accounting pronouncements and varying interpretations of accounting pronouncements
have occurred and may occur in the future. Changes to existing rules or the questioning of current practices may adversely affect our
reported financial results or the way we conduct business.

 If
we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial
results or prevent fraud and our business may be harmed and our stock price may be adversely impacted.

 Effective
internal controls over financial reporting are necessary for us to provide reliable financial reports and to effectively prevent fraud.
Any inability to provide reliable financial reports or to prevent fraud could harm our business. The Sarbanes-Oxley Act of 2002 (the
"Sarbanes-Oxley Act") requires management to evaluate and assess the effectiveness of our internal control over financial
reporting. In order to continue to comply with the requirements of the Sarbanes-Oxley Act, we are required to continuously evaluate and,
where appropriate, enhance our policies, procedures and internal controls. We have in the past failed, and may in the future fail, to
maintain the adequacy of our internal controls over financial reporting. Such failure could subject us to litigation or regulatory scrutiny
and investors could lose confidence in the accuracy and completeness of our financial reports. We cannot provide any assurance that in
the future we will be able to fully comply with the requirements of the Sarbanes-Oxley Act or that management will conclude that our
internal control over financial reporting is effective. If we fail to fully comply with the requirements of the Sarbanes-Oxley Act, our
business may be harmed and our stock price may decline. For example, our assessment, testing and evaluation of the design and operating
effectiveness of our internal control over financial reporting resulted in our conclusion that as of December 31, 2023 our internal control
over financial reporting was not effective, due to the Company not having adequate controls related to change management within the technology
that support the Company's financial reporting function.

 Our
financial controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information, which, as a
public company, could materially harm our stock price.

 We
require significant financial resources to maintain our public reporting status. We cannot assure you we will be able to maintain adequate
resources to ensure that we will not have any future material weakness in our system of internal controls. The effectiveness of our controls
and procedures may in the future be limited by a variety of factors including:

 faulty
 human judgment and simple errors, omissions or mistakes;

 fraudulent
 action of an individual or collusion of two or more people;

 inappropriate
 management override of procedures; and

 the
 possibility that any enhancements to controls and procedures may still not be adequate to assure timely and accurate financial information.

 Our
internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
in the United States of America. Our internal control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect
on the financial statements.

 Despite
these controls, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Furthermore, smaller reporting companies like us face additional limitations. Smaller reporting companies employ fewer individuals and
can find it difficult to employ resources for complicated transactions and effective risk management. Additionally, smaller reporting
companies tend to utilize general accounting software packages that lack a rigorous set of software controls.

 If
we fail to have effective controls and procedures for financial reporting in place, we could be unable to provide timely and accurate
financial information and be subject to investigation by the Securities and Exchange Commission and civil or criminal sanctions.

 We
Do Not Intend To Pay Dividends On Our Common Stock So Any Returns Will Be Limited To The Value Of Our Stock.

 We
have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain any future earnings for
the development, operation, and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable
future. Any return to stockholders will be limited to the value of their stock.

 Our
common stock is subject to price volatility unrelated to our operations.

 The
market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability
to achieve our planned growth, quarterly operating results of other companies in the same industry, trading volume in our common stock,
changes in general conditions in the economy and the financial markets or other developments affecting the Company's competitors
or the Company itself.

 A
decline in the price of our common stock could affect our ability to raise working capital and adversely impact our ability to continue
operations.

 A
prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. A decline in the price of our common stock could be especially detrimental to our liquidity, our operations
and strategic plans. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect
on our business plan and operations, including our ability to develop new services and continue our current operations. If our common
stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient
to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue
our normal operations.

 If
we are not able to comply with the applicable continued listing requirements or standards of the Nasdaq Capital Market, Nasdaq could
delist our securities.

 We
are listed on The Nasdaq Capital Market under the symbol "IVDA". We also list the Warrants under the symbol "IVDAW."
We cannot assure you that our securities will continue to be, listed on The Nasdaq Capital Market in the future. In order to maintain
that listing, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director
independence and independent committee requirements, minimum stockholders' equity, minimum share price, and certain corporate governance
requirements. We may not be able to comply with the applicable listing standards and Nasdaq could delist our securities as a result.

 We
cannot assure you that our common stock and/or Warrants, if delisted from The Nasdaq Capital Market, will be listed on another national
securities exchange. If our common stock and/or Warrants are delisted by The Nasdaq Capital Market, they would likely trade on the OTCQB
where an investor may find it more difficult to sell our securities or obtain accurate quotations as to the market value of our common
stock and/or Warrants.

 On
September 28, 2023, the Company received
written notice (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market ("Nasdaq")
notifying the Company that, based on the closing bid price of the Company's Common
Stock, the Company no longer complies with the minimum bid price requirement for continued
listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00
per share (the "Minimum Bid Price Requirement"), and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the
Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive trading days.

 To
regain compliance, the closing bid price of the Common Stock must be at least $1.00 per share for a minimum of 10 consecutive trading
days prior to March 26, 2024, and the Company
must otherwise satisfy The Nasdaq Capital Market's requirements for listing. If the Company does not regain
compliance by March 26, 2024, the Company may be eligible for an additional 180 calendar
day compliance period if it meets the continued listing requirement for market value of publicly held shares and all other initial listing
standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of
its intention to cure the deficiency during the second compliance period. If the Company
does not qualify for the second compliance period or fails to regain compliance during the second
compliance period, then Nasdaq will notify the Company of its determination to delist the Company's common stock, at which point
the Company will have an opportunity to appeal the delisting determination to a Hearings Panel.

 The
Company intends to monitor the closing bid price of the Common Stock and consider its available options to resolve the noncompliance
with the Minimum Bid Price Requirement. There can be no assurance that the
Company will be able to regain compliance with The Nasdaq Capital Market's continued listing
requirements or that Nasdaq will grant the Company a further extension of time to regain compliance, if applicable.

 Techniques
employed by short sellers may drive down the market price of the common stock.

 Short
selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention
of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value
of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects
to pay less in that purchase than it received in the sale.

 As
it is in the short seller's interest for the price of the security to decline, many short sellers publish, or arrange for the publication
of, negative opinions regarding the relevant issuer and its prospects to create negative market momentum and generate profits for themselves
after selling a security short. These short attacks have, in the past, led to selling of shares in the market.

 It
is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether
such allegations are proven to be true or untrue, we could have to expend significant resources to investigate such allegations and/or
defend ourselves.

 While
we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against the
relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such a situation
could be costly and time-consuming, and could distract our management from growing our business. Even if such allegations are ultimately
proven to be groundless, allegations against us could severely impact our business, and any investment in the common stock could be greatly
reduced or even rendered worthless.

 If
securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market
price for the common stock and trading volume could decline.

 The
trading market for the common stock will depend in part on the research and reports that securities or industry analysts publish about
us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who
covers us downgrades the common stock or publishes inaccurate or unfavorable research about our business, the market price for the common
stock would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly,
we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for the common stock
to decline.

 Our
articles of incorporation contain anti-takeover provisions that could materially adversely affect the rights of holders of our common
stock.

 We
have adopted an amended and restated memorandum and articles of incorporation that contain provisions to limit the ability of others
to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could deprive our shareholders
of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain
control of our company in a tender offer or similar transaction.

 Our
board of directors has the authority, subject to any resolution of the shareholders to the contrary, to issue preferred shares in one
or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights
and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption
and liquidation preferences, any or all of which may be greater than the rights associated with our common stock. Preferred shares could
be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult.
If our board of directors decides to issue preferred shares, the price of our common stock may fall and the voting and other rights of
the holders of our common stock may be materially adversely affected.

 ITEM
lB – UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY.

 Cybersecurity Risk Management and Strategy

 We recognize the importance of assessing, identifying,
and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation
S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers
and violation of data privacy or security laws.

 We do not presently
have any general processes for assessing, identifying, and managing material risks from cybersecurity threats. As we expand our
business operations, we plan to develop processes that will allow for the identification and assessment of cybersecurity risk that
will be integrated into an overall risk management system, which will be managed by senior management and overseen by
the Board of Directors. As part of this development, we plan to identify and address cybersecurity risks related to our business,
privacy and compliance issues through a multi-faceted approach that is expected to include third party assessments, internal
information technology (IT) audit, IT security, governance, risk and compliance reviews. In connection with these planned
approaches, and to defend, detect and respond to cybersecurity incidents, we, among other things, will consider: conducting
proactive privacy and cybersecurity reviews of systems and applications, audits of applicable data policies, performing penetration
testing using external third-party tools and techniques to test security controls, conducting employee training, monitoring emerging
laws and regulations related to data protection and information security, and implementing appropriate changes.

 As part of the above planned processes, we may engage
external auditors and consultants with expertise in cybersecurity to assess our internal cybersecurity programs and compliance with applicable
practices and standards.

 We plan to design our risk management program to also
assesses third party risks, and we plan to perform third-party risk management to identify and mitigate risks from third parties, such
as vendors, suppliers, and other business partners associated with our use of third-party service providers. In addition to new vendor
onboarding, we plan to perform risk management during third-party cybersecurity compromise incidents to identify and mitigate risks to
us from third-party incidents.

 Cybersecurity Governance

 We expect that cybersecurity
will become an important part of our risk management processes and an area of focus for our Board of Directors and management. We expect
that our Board of Directors will be responsible for the oversight of risks from cybersecurity threats. We expect our senior management
will provide our Board of Directors updates on a quarterly basis regarding matters of cybersecurity. This is expected to include existing
and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents
(if any) and status on key information security initiatives. We expect that our Board members will also engage in periodic conversations
with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.

 Currently, our Chief Financial Officer is expected
to lead our cybersecurity risk assessment and management processes and oversees their implementation and maintenance. Our Chief Financial
Officer will be tasked with staying informed about, and monitoring the prevention, mitigation, detection and remediation of cybersecurity
incidents through his management of, and participation in, the cybersecurity risk management and strategy processes we plan to develop
and as described above, including the operation of an incident response plan, and report to the Board of Directors on any appropriate
items.

 ITEM
2 – PROPERTIES

 We
currently rent for our principal executive offices approximately 3,000 square feet until February 2025 for approximately $4,500 per month.
We believe that our current office space is adequate for the foreseeable future.

 Iveda
Taiwan leases for its principal executive offices in Taiwan, comprised of three suites totaling approximately 4,567 square feet.
Iveda Taiwan pays an aggregate of approximately $3,136 per month under the terms of the three leases, which expire on June 30, 2024,
September 15, 2024 and September 11, 2024.

 ITEM
3 – LEGAL PROCEEDINGS

 From
time to time we may become involved in various legal proceedings that arise in the ordinary course of business, including actions related
to our intellectual property. Although the outcomes of these legal proceedings cannot be predicted with certainty, we are currently not
aware of any such legal proceedings or claims that we believe, either individually or in the aggregate, will have a material adverse
effect on our business, financial condition, or results of operations.

 ITEM
4 – MINE SAFETY DISCLOSURES

 Not
applicable.

 PART
II

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

 Market

 Our
common stock is listed on The Nasdaq Capital Market under the symbol "IVDA" since April 1, 2022. Set forth in the table below
is information with respect to the high and low bid quotations of our common stock for the periods indicated as reported by NASDAQ and
the OTC Markets. The quotations represent inter-dealer prices without retail mark-ups, mark-downs, or commissions and may not necessarily
represent actual transactions.

 See
the High and Low Bid data below:

 Fiscal Year 2023

 High Bid

 Low Bid

 First Quarter

 $
 2.91

 $
 0.57

 Second Quarter

 $
 1.90

 $
 1.04

 Third Quarter

 $
 1.15

 $
 0.74

 Fourth Quarter

 $
 0.95

 $
 0.57

 Fiscal
 Year 2022

 High
 Bid

 Low
 Bid

 First
 Quarter

 $

 18.00

 $

 5.28

 Second
 Quarter

 $

 4.87

 $

 1.07

 Third
 Quarter

 $

 0.80

 $

 0.47

 Fourth
 Quarter

 $

 1.00

 $

 0.50

 As
of December 31, 2023, we had 16,169,891 shares of our Common Stock, par value $0.00001, issued and outstanding. There were approximately
700 beneficial owners of our Common Stock.

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

 Security
Holders

 As
of December 31, 2023, we had 16,169,891 shares of our common stock outstanding held by 103 shareholders of record, 0 shares of our Series
A Preferred Stock outstanding and 0 shares of our series B Preferred Stock.

 Dividend
Policy

 We
have never paid a cash dividend on our common stock. We currently intend to retain all earnings, if any, to finance the growth and development
of our business. We do not anticipate paying any cash dividends in the foreseeable future.

 Equity
Compensation Plans

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

 Recent
Sales of Unregistered Securities

 Set
forth below are the sales of all securities by the Company within the past three years which were not registered under the Securities
Act. The Company believes that each of such issuances was exempt from registration under the Securities Act in reliance on Section 4(a)(2)
of the Securities Act and/or Regulation S under the Securities Act.

 Between
January 1, 2020 and December 31, 2021 the Company issued and sold an aggregate of 835,757 shares of common stock to investors for aggregate
proceeds of approximately $2,790,000 in gross proceeds.

 Between
January 1, 2020 and December 31, 2021 the Company issued 439,527 shares of common stock to convertible debt holders upon conversion of
$1,294,580 in principal and interest.

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

 Between
January 1, 2023 and December 31, 2023 the Company issued 157,252 shares of restricted common stock for services valued at $138,547.

 All
of the securities referred to, above, were issued without registration under the Securities Act of 1933, as amended (the "Securities
Act") in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as provided in Rule 506(b) of Regulation
D promulgated thereunder.

 ITEM
6 – SELECTED FINANCIAL DATA

 Not
applicable.

 ITEM
7 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 Overview

 Iveda
has been offering real-time IP video surveillance technologies to our customers since 2005. While we still offer video surveillance technologies,
our core product line has evolved to include AI intelligent search technology that provide true intelligence to any video surveillance
system and IoT (Internet of Things) devices and platforms. Our evolution is in response to digital transformation demands from many cities
and organizations across the globe. Our IvedaAI intelligent video search technology adds critical intelligence to normally passive video
surveillance systems. IvedaAI provides AI functions to any IP camera and most popular network video recorders (NVR) and video management
systems (VMS). IvedaAI comes with an appliance or server, preconfigured with multiple AI functions based on the end user requirements.

 AI
Functions

 Object
 Search

 Face
 Search (No Database Required)

 Face
 Recognition (from a Database)

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

 Intrusion

 Weapon

 Fire

 People

 Vehicle

 Temperature

 Public
 Health Analytics (Facemask Detection,)

 QR
 and Barcode Detection

 Key
Features

 Live
 Camera View

 Live
 Tracking

 Abnormality
 Detection – Vehicle/Person wrong direction detection

 Vehicle/Person
 Loitering Detection

 Fall

 Illegal
 Parking Detection

 Heatmap
 Generation

consists of deep-learning video analytics software running in a computer/server environment that can either be deployed at an edge level
or data center for centralized cloud model. We combined hardware and artificial intelligence software for fast and efficient video search
for objects stored in an external (NVR) or storage device and live streaming video data from any IP camera.

works with any ONVIF-compliant IP cameras and most popular NVR/VMS (Video Management System) platforms, enabling accurate search across
dozens to thousands of cameras in less than 1 second. IvedaAI products are designed to maximize efficiency, save time, and cut cost.
Instead of watching hours of video recording after-the-fact, users can set up alerts.

 Iveda
offers many IoT sensors and devices for various applications such as energy management, smart home, smart building, smart community and
patient/elder care. Our gateway and station serve as the main hub for sensors and devices in any given area. They are equipped with high-level
communication protocols such as Zigbee, WiFi, Bluetooth, and USB. They connect to the Internet via Ethernet or cellular data network.
We provide IoT platforms that enable centralized device management and push digital services on a massive scale. Our smart devices include
water sensor, environment sensor, entry sensor, smart plug, siren, body temperature pad, care watch and tracking devices.

 We
also offer smart power technology for office buildings, schools, shopping centers, hotels, hospitals, and smart city projects. Our smart
power hardware is equipped with an RS485 communication interface allowing the meters to be connected to various third-party SCADA software
for monitoring and control purposes. This line of product includes smart power, water meter, smart lighting controls systems, and smart
payment system.

Cerebro manages all the components of our smart power technology including statistics on energy consumption. Cerebro is a software platform
designed to integrate multiple unconnected energy, security and safety applications and devices and control them through one comprehensive
user interface.

 Cerebro's
roadmap includes dashboard for all of Iveda's platforms for central management of all devices. Cerebro is system agnostic and will
support cross-platform interoperability. The common unified user interface will allow remote control of platforms, sensors and subsystems
throughout an entire environment. This integration and unification of all subsystems enable acquisition and analysis of all information
on one central command center, allowing comprehensive, effective, and overall management and protection of a city.

Utilus smart pole technology is a smart power management and wireless mesh communications network deployed on new or existing light pole
structures. The Utilus network uses WiFi, 4G and 5G small cell capabilities, and other wireless protocols to provide distributed video
surveillance with AI video search technology and remote management of local devices such as trackers, water meters, electrical meters,
valves, circuit breakers and sensors.

 In
the last few years, the smart city concept has been a hot topic among cities across the globe. With little to no human interaction, technology
increases efficiency, expedites decision making, and reduces response time. Dwindling public safety budgets and resources has necessitated
the transformation. More and more municipalities are using next-generation technologies to improve the safety and security of its citizens.
Our response is our complete suite of IoT technologies, including AI intelligent video search technology, smart sensors, tracking devices,
video surveillance systems, and smart power.

 We
license our platform and sell IoT hardware to service providers such as telecommunications companies, integrators and other technology
resellers already providing services to an existing customer base. Partnering with service providers that have an existing loyal customer
base allows us to focus on servicing just a handful of our partners and concentrating on our technology offering. Service providers leverage
their end-user infrastructure to sell, bill, and provide customer service for Iveda's product offering. This business model provides
dual revenue streams – one from hardware sales and the other from monthly licensing fees.

 Iveda
Taiwan, our subsidiary in Taiwan, specializes in deploying new, and integrating existing, video surveillance systems for airports, commercial
buildings, government customers, data centers, shopping centers, hotels, banks, and Safe City. Iveda Taiwan combines security surveillance
products, software, and services to provide integrated security solutions to the end user. Through Iveda Taiwan, we have access not only
to Asian markets but also to Asian manufacturers and engineering expertise. Iveda Taiwan is our research and development arm, working
with a team of developers in Taiwan.

 In
April 2011, we completed our acquisition of Iveda Taiwan, a company founded in 1998 by a group of sales and research and development
professionals from Taiwan Panasonic Company. Iveda Taiwan, our subsidiary in Taiwan, specializes in deploying new, and integrating existing,
video surveillance systems for airports, commercial buildings, government customers, data centers, shopping centers, hotels, banks, and
Safe City initiatives in Taiwan and other neighboring countries. Iveda Taiwan combines security surveillance products, software, and
services to provide integrated security solutions to the end user. Through Iveda Taiwan, we have access not only to Asian markets but
also to Asian manufacturers and engineering expertise. Iveda Taiwan is our research and development arm, working with a team of developers
and managing our relationship with the Industrial Technology Research Institute ("ITRI") in Taiwan. Iveda Taiwan also houses
the application engineering team that supports Sentir implementation for our service provider customers in Asia. The Company depends
on Iveda Taiwan as the majority of the company's revenues have come from Iveda Taiwan since we acquired them in April 2011. For
the years ended December 31, 2023 and 2022, Iveda Taiwan's operations accounted for 93% and 71% of our total revenue, respectively.

 The
acquisition of Iveda Taiwan provided the following benefits to our business:

 An
 established presence and credibility in Asia and access to the Asian market.

 Relationships
 in Asia for cost-effective research and development of new product offerings and securing the best pricing for end user devices.

 Sourcing
 of products directly using Iveda Taiwan's product sourcing expertise to enhance our custom integration capabilities.

 Enhancements
 to the global distribution potential for our products and services.

 In
November 2012, we signed a cooperation agreement with ITRI, a research and development organization based in Taiwan. Together with ITRI,
we have developed cloud-video services. Pursuant to the cooperation agreement, we licensed, through our subsidiary, Sole-Vision Technologies,
Inc., the right to use U.S. Patent No. 8,719,442 (as well as its Taiwanese and Chinese counterparts) with respect to the development
of cloud-video technologies.

 In
June and August 2014, in collaboration with our local partner in the Philippines, we shipped our ZEE cloud plug-and-play cameras for
delivery to the Philippine Long Distance Telephone Company ("PLDT") for distribution to its customers with a cloud video
surveillance service offering, utilizing our Sentir platform.

 Critical
Accounting Policies and Estimates

 Management's
Discussion and Analysis of Financial Conditions and Results of Operations is based upon our financial statements, which have been prepared
in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We base our estimates
on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may
differ from these estimates under different assumptions or conditions. A description of our critical accounting policies and related
judgments and estimates that affect the preparation of our financial statements is set forth in our audited consolidated financial statements
for the year ended December 31, 2023. Such policies are unchanged.

 New
Accounting Standards

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

 Results
of Operations for the Year Ended December 31, 2023 Compared with the Year Ended December 31, 2022

 Net

 We
recorded net consolidated revenue of $6.5 million for the year ended December 31, 2023, compared with $4.5 million for the year ended
December 31, 2022, an increase of $2.0 million, or 45%. For the year ended December 31, 2023, our recurring service revenue was $0.44
million, or 7% of net revenue, and our equipment sales and installation revenue was $6.0 million, or 93% of net revenue. In fiscal 2022,
our recurring service revenue was $0.31 million, or 7% of consolidated net revenue, and our equipment sales and installation revenue
was $4.2 million, or 93% of net revenue. The increase in total revenue in 2023 compared with the same period in fiscal 2022 is attributable
primarily to increased equipment sales from Iveda Taiwan as a result of additional long-term contracts awarded and started during 2023.

 Cost
of Revenue

 Total
cost of revenue was $5.4 million (84% of revenue; gross margin of 16%) for the year ended December 31, 2023, compared with $3.5 million
(78% of revenue; 22% gross margin) for the year ended December 31, 2022, an increase of ($1.1 million), or (55%). The increase in cost
of revenue was primarily driven by increased Iveda Taiwan revenue. The decrease in overall gross margin was also primarily attributed
to increased equipment sales proportion within Iveda Taiwan revenue as a result of additional long-term contracts awarded and started
during 2023.

 Operating
Expenses

 Operating
expenses were $4.5 million for the year ended December 31, 2023, compared with $4.3 million for the year ended December 31, 2022, an
increase of $0.2 million, or 4%. This net increase in operating expenses in 2023 compared with 2022 is due primarily related to a ramp
up in personnel in sales and technical support personnel as well as research and development expenses for Cerebro IoT Platform and IvedaAI.
Additional professional expenses have been incurred during this period with an effort to increase investor relations and marketing.

 Loss
from Operations

 Loss
from operations increased to $3.4 million for the year ended December 31, 2023, compared with $3.3 million for the year ended December
31, 2022, an increase of $0.1 million, or 2%. A majority of the increase in loss from operations was primarily due to increased operating
expenses.

 Other
Income (Expense)-Net

 Other
income (expense)-net was $96,527 other income for the year ended December 31, 2023, compared with ($13,004) other expense for the year
ended December 31, 2022, a positive change of $109,531. The majority of the other income in 2023 is interest income from cash balances.

 Non-Controlled
Portion of Joint Venture

 Non-Controlled
Portion of the Philippines Joint Venture net loss was $97,605 for the year ended December 31, 2023.

 Net
Loss

 Net
loss was $3.2 million for the year ended December 31, 2023, compared with $3.3 million for the year ended December 31, 2022. The decrease
of $0.1 million, or 3%, in net loss was caused primarily by a decrease in operating expenses related to a ramp up in sales and technical
support personnel as well as research and development expenses for Cerebro IoT Platform and IvedaAI. Additional professional expenses
have been incurred during this period with an effort to increase investor relations and marketing.

 Liquidity
and Capital Resources

 As
of December 31, 2023, we had cash and cash equivalents of $2.9 million in our U.S.-based segment and $1.8 million in our Taiwan-based
segment, compared to $6.0 million in our U.S.-based segment and $1.3 million in our Taiwan-based segment as of December 31, 2022. This
decrease in our cash and cash equivalents is primarily a result of the cash used in operating activities of $3.5 million and $0.9 million
investment in software platform development (Cerebro) during the year ended December 31, 2023. There are no legal or economic factors
that materially impact our ability to transfer funds between our U.S.-based and Taiwan-based segments.

 Net
cash used in operating activities during the year ended December 31, 2023 was $3.5 million compared to $5.4 million net cash used during
the year ended December 31, 2022. Net cash used in operating activities for the year ended December 31, 2023 consisted primarily of the
$3.2 million net loss including $0.3 million of non-cash charges (primarily stock option compensation and common stock issued for investor
relations services), $0.2 million of Taiwan vendor deposits, prepaids and advances to suppliers and $0.5 million net payments for accounts
payable and accrued operating expenses. Net cash used in operating activities for the year ended December 31, 2022 consisted primarily
of the $3.3 million net loss including $0.4 million of non-cash charges (primarily stock option compensation and common stock issued
for investor relations services), $0.8 million in accounts receivable, $0.2 million of inventory, $0.2 million of Taiwan vendor deposits,
prepaids and advances to suppliers and $1.2 million net payments for accounts payable and accrued operating and interest expenses.

 Net
cash used in investing activities for the year ended December 31, 2023 was $0.9 million. Net cash used by investing activities during
the year ended December 31, 2022 was $14,165.

 Net
cash provided by financing activities for the year ended December 31, 2023 was $0.9 million compared with $11.4 million provided during
the year ended December 31, 2022. Net cash provided by financing activities in 2023 is primarily a result of the $1.3 million exercise
of warrants to purchase Common Stock at $1.40 per share issued with the offering of August 2022. Net cash provided by financing activities
in 2022 is primarily a result of the $11.5 million sale of Common Stock and Pre-Funded warrants during the year ended December 31, 2023.

 We
have experienced significant operating losses since our inception. At December 31, 2023, we had approximately $32 million in net operating
loss carryforwards available for federal income tax purposes, which will begin to expire in 2025. We did not recognize any benefit from
the federal net operating loss carryforwards in 2023 or 2022. We also had approximately $5.0 million in state net operating loss carryforwards,
which expire after five years.

 We
have limited liquidity and have not yet established a stabilized source of revenue sufficient to cover operating costs, based on our
current estimated burn rate. Accordingly, our continuation as a going concern is dependent upon our ability to generate greater revenue
through increased sales and/or our ability to raise additional funds through the capital markets. No assurance can be given that we will
be successful in future financing and revenue-generating efforts. Even if funding is available, we cannot assure investors that it will
be available on terms that are favorable to our existing stockholders. Additional funding may be achieved through the issuance of equity
or debt securities that could be significantly dilutive to the percentage ownership of our existing stockholders. In addition, these
newly issued securities may have rights, preferences, or privileges senior to those of our existing stockholders. Accordingly, such a
financing transaction could materially and adversely impact the price of our common stock.

 Substantially
all of our 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 limit.

 Our
accounts receivable are unsecured, and we are at risk to the extent such amounts become uncollectible. Although we perform periodic evaluations
of our customers' credit and financial condition, we generally do not require collateral in exchange for our products and services
provided on credit.

 We
provide an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information,
and existing economic conditions. Payment terms for our U.S.-based segment require prepayment for most products before they are shipped
and monthly Sentir licensing fees, which are due in advance on the first day of each month. For our U.S.-based segment, accounts receivable
that are more than 120 days past due are considered delinquent. Payment terms for our Taiwan-based segment vary based on our agreements
with our customers. Generally, we receive payment for our products and services within one year of commencing the project, except that
we retain 5% of the total payment amount and release such amount one year after the completion of the project. For our U.S.-based segment,
we had no doubtful accounts receivable allowances for the years ended December 31, 2023 and 2022, respectively. For our Taiwan-based
segment, we set up no doubtful accounts receivable allowances for the years ended December 31, 2023 and 2022, respectively. We deem our
accounts receivable to be collectible based on certain factors, including the nature of the customer contracts and past experience with
similar customers. Delinquent receivables are written off based on individual credit valuation and specific circumstances of the customer,
and we generally do not charge interest on past due receivables.

 Effects
of Inflation

 For
the periods for which financial information is presented, we do not believe that the current levels of inflation in the United States
have had a significant impact on our operations. Likewise, we do not believe that the current levels of inflation in Taiwan have had
a significant impact on the operations of Iveda Taiwan.

 Off
Balance Sheet Arrangements

 We
do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured
finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements
or other contractually narrow or limited purposes. In addition, we do not have any undisclosed borrowings or debt, and we have not entered
into any synthetic leases. We are, therefore, not materially exposed to any financing, liquidity, market, or credit risk that could arise
if we had engaged in such relationships.

 Application
of Critical Accounting Policies

 We
have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact
on our business operations and any associated risks related to these policies are discussed throughout Management's Discussion
and Analysis of Financial Condition and Results of Operations when such policies affect our reported or expected financial results.

 In
the ordinary course of business, we have made a number of estimates and assumptions relating to the reporting of results of operations
and financial condition in the preparation of our financial statements in conformity with accounting principles generally accepted in
the United States ("GAAP"). We base our estimates on historical experience and on various other assumptions that we believe
are reasonable under the circumstances. The results form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results could differ significantly from those estimates under different assumptions
and conditions. We believe that the following discussion addresses our most critical accounting policies, which are those that are most
important to the portrayal of our financial condition and results of operations and require our most difficult, subjective, and complex
judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

 The
material estimates for our company are that of the stock-based compensation recorded for options and warrants issued and the income tax
valuation allowance recorded for deferred tax assets. The fair values of options and warrants are determined using the Black-Scholes
option pricing model. We have no historical data on the accuracy of these estimates. The estimated sensitivity to change is related to
the various variables of the Black-Scholes option pricing model stated below. The specific quantitative variables are included in the
notes to the financial statements. The estimated fair value of options and warrants is recognized as expense on the straight-line basis
over the options' and warrants' vesting periods. The fair value of each option and warrant granted is estimated on the date
of grant using the Black-Scholes option pricing model with the expected life, dividend yield, expected volatility, and risk-free interest
rate weighted-average assumptions used for options and warrants granted. Expected volatility for 2014 and 2013 was estimated using the
Dow Jones U.S. Industry indexes sector classification methodology for industries similar to that in which we operate. The risk-free rate
for periods within the contractual life of the option and warrant is based on the U.S. Treasury yield curve in effect at the grant date.
The expected life of options and warrants is based on the average of three public companies offering services similar to ours.

 Impairment
of Long-Lived Assets

 We
have a significant amount of property and equipment primarily consisting of leased equipment. We review the recoverability of the carrying
value of long-lived assets using the methodology prescribed in ASC 360 "Property, Plant and Equipment." Recoverability of
long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future net operating
cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured
as the amount by which the carrying value of the assets exceeds their fair value.

and Expense Recognition

 We
recognize revenue when (1) persuasive evidence of an arrangement exists, (2) title transfer has occurred, (3) the price is fixed or readily
determinable, and (4) collectability is reasonably assured. We recognize revenue in accordance with ASC 60, "Revenue Recognition."
Sales are recorded net of sales returns and discounts, which are estimated at the time of shipment based upon historical data. Revenue
from monitoring services are recognized when the services are provided. Expenses are recognized as incurred.

from fixed-price equipment installation contracts are recognized on the percentage-of-completion method. The percentage completed is
measured by the costs incurred to date as a percentage of estimated total costs for each contract. This method is used because we consider
expended costs to be the best available measure of progress on these contracts. Because of inherent uncertainties in estimating costs
and revenue, it is at least reasonably possible that the estimates used will change.

 Contract
costs include all direct material, subcontractors, labor costs, and equipment costs and those indirect costs related to contract performance.
General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made
in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result
in revisions to costs and income and are recognized in the period in which the revisions are determined. Changes in estimated job profitability
resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements are accounted for
as changes in estimates in the current period. Profit incentives are included in revenue when their realization is reasonably assured.
Claims are included in revenue when realization is probable and the amount can be reliably estimated.

 The
liability, "Billings in excess of costs and estimated earnings on uncompleted contracts," represents billings in excess of
revenue recognized.

 Stock-Based
Compensation

 On
January 1, 2006, we 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. We elected the modified prospective transition method as
permitted by ASC 718. Under this transition method, stock-based compensation expense for the years ended December 31, 2023 and 2022 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. We recognize 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,
2023 and 2022, was estimated using the "minimum value method" as prescribed by the original provisions of ASC 718, "Accounting
for Stock-Based Compensation" and therefore, no compensation expense was recognized for these awards in accordance with ASC 718.
We recognized $104,600 and $120,581 of stock-based compensation expense for the years ended December 31, 2023 and 2022, respectively.

 ITEM
7A – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 We are a smaller reporting company as defined by Item 10(f)
of Regulation S-K and are not required to provide the information otherwise required under this item.

 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.

 ITEM
9 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM
9A – CONTROLS AND PROCEDURES

 Evaluation
of Disclosure Controls and Procedures

 Under
the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted
an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer, as of December
31, 2023, concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act
was 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 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 defined in Rule 13a-15(f)
under the Exchange Act.

 Under
the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness
of our internal control over financial reporting as of December 31, 2023 as required by Rule 13a-15(c) under the Exchange Act. We utilized
the criteria and framework established by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal
Control – Integrated Framework (2013) in performing this assessment. Based on this evaluation, management concluded that our
internal control over financial reporting was not effective as of December 31, 2023.

 Internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

 This
Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control
over financial reporting. Our management's report was not subject to attestation by our independent registered public accounting
firm pursuant to rules of the SEC that permit us to provide only management's report in this Annual Report on Form 10-K.

 Changes
in Internal Control over Financial Reporting

 In
December 2013, we hired Robert J. Brilon, as Chief Financial Officer who has experience in SEC reporting and disclosures. We have 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 identified by management's evaluation pursuant to Rules 13a-15(d) or 15d-15(d)
of the Exchange Act during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.

 Limitations
on the Effectiveness of Controls

 Our
management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures
or our internal controls will prevent all error 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. Because
of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues,
misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or 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.

 The
design 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 detected.

 Identified
Material Weakness

 As
of December 31, 2023, we need to hire additional employees at Iveda Taiwan that are knowledgeable in SEC accounting and reporting. Increased
staffing at the subsidiary level will provide daily oversight of Iveda Taiwan's 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 2023.

 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.

 Segregation
of Duties

 As
of December 31, 2023, we had two employees knowledgeable in SEC accounting and reporting. Our management has put in place policies and
procedures designed, to the extent possible, to segregate the duties of initiating transactions, maintaining custody over assets, and
recording transactions. Due to our size and limited resources, segregation of all conflicting duties may not always be possible and may
not be economically feasible.

 ITEM
9B – OTHER INFORMATION

 (a)
None.

 (b)
Corporate Governance

 During
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.

 (c)
Insider Trading Arrangements and Policies

 During
the quarter ended December 31, 2023, 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
S-K.

 ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not applicable.

 PART
III

 ITEM
10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Executive
Officers and Directors

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

 Name

 Age

 Position

 David
 Ly

 Chief
 Executive Officer, Chairman of the Board of Directors and President

 J. Brilon

 Chief
 Financial Officer, Treasurer and Corporate Secretary

 Gregory
 Omi

 Chief
 Technology Officer

 Joseph
 Farnsworth

 Alejandro
 Franco

 D. Gillen

 David
Ly founded our company and has served as our Chief Executive Officer and Chairman of the Board of Directors since October 2009. Mr.
Ly also served as our President from October 2009 to February 2014. Mr. 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. Mr. Ly served as an Applications Engineer at Metricom, Inc., the first
micro cellular data network, from November 1998 to August 2001. Mr. 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.

J. 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. Mr. 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. Mr. Brilon is a Board Director and independent contract CFO for Bitech Technologies Corporation from October
2021 to present. Mr. Brilon joined New Gen Management Services, Inc. in July 2017 as the CFO (subsequently becoming President and CFO
of New Gen in July 2018). Mr. 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. Mr. 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
2013. From January 2010 to August 2010, Mr. Brilon served as Chief Financial Officer of MD Helicopters, a manufacturer of commercial
and light military helicopters. Mr. Brilon also served as Chief Executive Officer, President, and Chief Financial Officer of InPlay Technologies
(NASDAQ: NPLA), formerly, Duraswitch (NASDAQ: DSWT), a company that licensed patented electronic switch technology and manufactured digital
pen technology, from November 1998 to June 2007. Mr. Brilon served as Chief Financial Officer of Gietz Master Builders from 1997 to 1998,
Corporate Controller of Rental Service Corp. (NYSE: 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. Mr. Brilon is a certified
public accountant and practiced with several leading accounting firms, including McGladrey Pullen, Ernst and Young and Deloitte and Touche.
Mr. Brilon holds a Bachelor of Science degree in Business Administration from the University of Iowa.

 Gregory
Omi has served as our Chief Technology Officer since May 2021. Prior, Mr. Omi served as director of our company from October
2009 to November 2016. Mr. 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. Mr. 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. Mr. 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. Mr. Omi attended DeVry Institute in Phoenix, Arizona from 1979
to 1980 where he studied industrial electronics engineering.

 Joseph
Farnsworth has served as a director of our company since January 2010. Mr. 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. Mr. Farnsworth has also served as a director of The Farnsworth Companies since 2008.
Mr. Farnsworth has also served as a director of Venture West Aviation since 2022. From 1990 to 1995, Mr. 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. Mr. 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. Farnsworth's
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.

 Alejandro
Franco has served as a director of our company since November 2011. Mr. Franco has also served as a consultant to our company since
2011, advising on business development and strategic partnership opportunities in Mexico. Mr. Franco is the founder and has served as
President of Amextel, a telecommunications company in Mexico, since June 2003. Mr. 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. Mr. Franco also founded and served as President of Bela Corp., a cloud technology and services company, from
1988 to 2000. Prior to that, Mr. Franco founded and served as President of TVM, Inc., a television and technology company in Mexico,
from 1985 to 1988. Mr. Franco attended UNAM University, Mexico where he studied Economics. Mr. Franco also attended IBERO University,
Mexico, where he studied Industrial Design. Mr. Franco holds a Master degree in Theology from the Oblate School of Theology in San Antonio,
Texas. 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.

D. Gillen has served as a director of our company since November 2011. Mr. 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. Mr. Gillen retired in October 2014. Mr. Gillen
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. Mr. 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.

 Family
Relationships

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

 Terms
of Directors and Executive Officers

 The
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.

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

 Board
of Directors and Board Committees

 Our
board of directors consists of four directors, three of whom are independent as such term is defined by the Nasdaq Capital Market. We
have determined that Joseph Farnsworth, Alejandro Franco and Robert D. Gillen satisfy the "independence" requirements under
NASDAQ Rule 5605.

 Board
Committees

 We
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.

 Each
committee's members and functions are described below.

 Audit
Committee. Our audit committee consists of Joseph Farnsworth, Alejandro Franco and Robert D. Gillen. Mr. 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:

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

 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;

 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;

 and approving all proposed related party transactions;

 meeting
 separately and periodically with management and the independent auditors; and

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

 Compensation
Committee. Our compensation committee consists of Joseph Farnsworth, Alejandro Franco and Robert D. Gillen. Mr. Farnsworth is the
chair of our compensation committee. The compensation committee will be responsible for, among other things:

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

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

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

 selecting
 compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person's
 independence from management.

 Nominations
and Corporate Governance Committee. Our Nominations and Corporate Governance committee consists of Joseph Farnsworth, Alejandro Franco
and Robert D. Gillen. Mr. 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
committee. 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
duties. 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.

 Involvement
in Certain Legal Proceedings

 None
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. Except as
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 the SEC.

 Code
of Business Conduct and Ethics

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

 ITEM
11 – EXECUTIVE COMPENSATION

 Summary
Compensation Table

 We
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.

 We
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
to us; however, we acknowledge that base salaries are currently below market.

 The
following table sets forth certain information with respect to compensation for the years ended December 31, 2023 and 2022, 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").

 Name and Principal Position

 Year

 Salary (1)

 Warrants Awards (2)

 Option
 Awards (3)

 All Other Compensation (4)

 Total

 David Ly

 2023

 $
 190,000

 $
 23,859

 $
 11,968

 $
 225,827

 Chairman and Chief Executive Officer

 2022

 $
 190,000

 $
 13,725

 $
 11,968

 $
 215,693

 Sid Sung

 2023

 $
 150,000

 $
 2,130

 $
 152,130

 Former President (6)

 2022

 $
 150,000

 $
 2,825

 $
 152,825

 Robert J. Brilon

 2023

 $
 180,000

 $
 20,450

 $
 200,450

 Chief Financial Officer, Treasurer and Corporate Secretary

 2022

 $
 180,000

 $
 11,350

 $
 191,350

 Luz A. Berg Former Chief Operating Officer

 2023

 $
 -

 $
 -

 $
 -

 Chief Marketing Officer and Corporate Secretary (5)

 2022

 $
 165,000

 $
 141,000

 $
 306,000

 Gregory Omi

 2023

 -

 $
 2,130

 $
 2,130

 Chief Technology Officer

 2022

 $
 2,825

 $
 2,825

 (1)

 The
 amounts in this column reflect the amounts earned during the fiscal year, whether or not actually paid during such year.

 (2)

 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.

 (3)

 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.

 (4)

 The
 amounts in this column reflect the amount of perquisites related to a vehicle allowance.

 (5)

 Resigned
 effective December 31, 2022.

 (6)

 Resigned
 effective December 31, 2023.

 Outstanding
Equity Awards as of December 31, 2023

 The
following table provides information regarding outstanding equity awards held by our named executive officers as of December 31, 2023.

 Outstanding
Equity Awards at Fiscal Year Ended December 31, 2023

 Name and Principal Position

 Grant Date

 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

 David Ly

 Chairman and

 12/31/2013

 6,250
 (1)

 -

 -

 $
 14.00

 12/31/2023

 Chief Executive Officer

 12/31/2014

 6,250
 (1)

 -

 -

 $
 9.20

 12/31/2024

 2/25/2015

 (1)

 -

 -

 $
 6.16

 2/25/2025

 12/11/2015

 25,000
 (1)

 -

 -

 $
 5.76

 12/11/2025

 12/15/2020

 87,500
 (1)

 -

 -

 $
 2.96

 12/15/2030

 12/30/2021

 18,750
 (1)

 -

 -

 $
 16.24

 12/31/2031

 6/15/2022

 (1)

 -

 -

 $
 1.42

 6/15/2032

 10/3/2022

 5,000
 (1)

 -

 -

 $
 0.75

 10/3/2032

 12/1/2022

 15,000
 (1)

 -

 -

 $
 0.54

 12/1/2032

 11/3/2023

 70,000
 (2)

 -

 -

 $
 0.68

 11/3/2033

 Robert J. Brilon

 Chief Financial Officer,

 12/1/2013

 37,500
 (1)

 -

 -

 $
 8.00

 12/1/2023

 Treasurer and Corporate Secretary

 12/8/2014

 (1)

 -

 -

 $
 8.00

 12/8/2024

 5/2/2014

 (1)

 -

 -

 $
 8.00

 5/2/2024

 12/31/2014

 6,250
 (1)

 -

 -

 $
 9.20

 12/31/2024

 12/30/2021

 (1)

 -

 -

 $
 16.24

 12/31/2031

 6/15/2022

 10,000
 (1)

 -

 -

 $
 1.42

 6/15/2032

 10/3/2022

 5,000
 (1)

 -

 -

 $
 0.75

 10/3/2032

 12/1/2022

 (1)

 -

 -

 $
 0.54

 12/1/2032

 11/3/2023

 60,000
 (2)

 -

 -

 $
 0.68

 11/3/2033

 Luz Berg

 Former Chief Operating Officer,

 12/31/2013

 3,125
 (1)

 -

 -

 $
 14.00

 12/31/2023

 Chief Marketing Officer

 12/31/2014

 3,125
 (1)

 -

 -

 $
 9.20

 12/31/2024

 and Corporate Secretary (resigned effective 12/31/2022)

 12/11/2015

 3,125
 (1)

 -

 -

 $
 5.76

 12/11/2025

 12/15/2020

 87,500
 (1)

 -

 -

 $
 2.96

 12/15/2030

 12/30/2021

 (1)

 -

 -

 $
 16.24

 12/30/2031

 6/15/2022

 10,000
 (1)

 -

 -

 $
 1.42

 6/15/2032

 10/3/2022

 5,000
 (1)

 -

 -

 $
 0.75

 10/3/2032

 Sid Sung

 President (resigned effective 12/31/2023)

 12/20/2019

 (1)

 -

 -

 $
 2.24

 12/20/2029

 12/15/2020

 (1)

 -

 -

 $
 2.96

 12/15/2030

 12/30/2021

 (1)

 -

 -

 $
 16.24

 12/30/2031

 10/3/2022

 5,000
 (1)

 -

 -

 $
 0.75

 10/3/2032

 12/1/2022

 6,250
 (1)

 -

 -

 $
 0.54

 12/1/2032

 11/3/2023

 6,250
 (2)

 -

 -

 $
 0.68

 11/3/2033

 (1)

 The
options became fully vested on the date of grant.

 (2)

 The options became fully vested on December 31, 2023.

 Equity
Compensation Plans

 On
October 15, 2009, we adopted the 2009 Stock Option Plan (the "2009 Option Plan"), with an aggregate number of 187,500 shares
of common stock issuable under the plan. The purpose of the 2009 Option Plan was to assume options that were already issued in the 2006
and 2008 Option plans under Iveda Corporation after the merger with Charmed Homes.

 On
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 125,000 shares of common stock to directors, officers, key employees, and service providers of our company. In 2011,
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 1,625,000 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
(No. 333-175143), and December 4, 2013 (No. 333-192655). The 2010 Option Plan expired on January 18, 2020. As of December 31, 2023, 359,125
options were outstanding under the 2010 Option Plan.

 On
December 15, 2020, we adopted the Iveda Solutions, Inc. 2020 Plan (the "2020 Plan"). The 2020 Plan has a maximum of 1,250,000
shares authorized with similar terms and conditions to the 2010 Option Plan. As of December 31, 2023, 941,875 options were 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)

 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 our 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 us under Section 162(m). Under
the plans, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant.

 We
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. The estimated fair value of options
is recognized as expense on the straight-line basis over the options' vesting periods. At December 31, 2023, we had approximately
$62,066 unrecognized stock- based compensation.

 We
have periodically issued warrants to purchase shares of our common stock as equity compensation to officers, directors, employees, and
consultants. As of December 31, 2023, warrants to purchase 394,822 shares of our common stock were outstanding, which were issued for
services or incentive for the purchase of convertible debentures or common stock subscription. Terms of these warrants are comparable
to the terms of the outstanding options.

Compensation

 Non-employee
directors receive stock-based compensation for their service on our Board of Directors and are reimbursed for their cost of attending
meetings. For the year ended December 31, 2023, Joseph Farnsworth, Alejandro Franco and Robert Gillen received 50,000 options to purchase
shares of our common stock as compensation for services during the year ended December 31, 2023. For the year ended December 31, 2022,
Joseph Farnsworth received 15,000 options and Alejandro Franco and Robert Gillen received 11,250 options to purchase shares of our common
stock as compensation for services during the year ended December 31, 2022. 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.

 Name

 Fees Earned or paid in Cash $

 Stock Awards

$

 2023 Options Awards

$

 Non-Equity Incentive Plan Compensation

 Nonqualified Deferred Compensation
 Earnings

$

 All Other Compensation

$

 Total

$

 Joseph Farnsworth

 -

 -

 $
 (1)

 -

 -

 -

 $

 Alejandro Franco

 -

 -

 $
 (2)

 -

 -

 -

 $

 Robert Gillen

 -

 -

 $
 (3)

 -

 -

 -

 $

 (1)
As of December 31, 2023, Mr. Farnsworth had outstanding options to purchase 168,125 shares of our common stock.

 (2)
As of December 31, 2023, Mr. Franco had outstanding options to purchase 123,750 shares of our common stock.

 (3)
As of December 31, 2023, Mr. Gillen had outstanding options to purchase 128,750 shares of our common stock.

 Incentive-Based Compensation
Recovery Policy

 The 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 restatement.

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

 The
following table and accompanying footnotes set forth as of December 31, 2023, 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
S. Val Vista Drive, Suite 213, Mesa, Arizona 85204.

 Name of Beneficial Owner

 Common Shares

 % of Common Shares

 Directors and Officers

 David Ly (1)

 746,898

 4.6
 %

 Robert J. Brilon (2)

 330,499

 2.0
 %

 Gregory Omi (3)

 187,982

 1.2
 %

 Joseph Farnsworth (4)

 275,067

 1.7
 %

 Alejandro Franco (5)

 155,000

 1.0
 %

 Robert D. Gillen (6)

 291,393

 1.8
 %

 All Directors and Officers

 1,755,588

 11.5
 %

 (1)

 Includes
 options to purchase 258,750 shares of common stock, which are exercisable within 60 days of December 31, 2023.

 (2)

 Includes
 options to purchase 168,750 shares of common stock, which are exercisable within 60 days of December 31, 2023.

 (3)

 Includes
 options to purchase 75,000 shares of common stock, which are exercisable within 60 days of December 31, 2023.

 (4)

 of (a) options to purchase 168,125 shares of common stock, which are exercisable within 60 days of December 31, 2023, (b) 19,925 shares
 of common stock held by Farnsworth Realty, an entity owned by Mr. Farnsworth and (c) 87,018 shares of common stock.

 (5)

 of (a) options to purchase 123,750 shares of common stock, which are exercisable within 60 days of December 31, 2023, and (b) 31,250
 shares of common stock held by Amextel S.A. De C.V. an entity owned by Mr. Franco.

 (6)

 (a) options to purchase 128,750 shares of common stock, which are exercisable within 60 days of December 31, 2023, and (b) 162,643
 shares of common stock.

Authorized for Issuance Under Equity Compensation Plans

 The
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, 2023.

 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)

 359,125

 $
 6.96

 -

 Equity compensation plans approved by stockholders (2)

 941,875

 $
 3.56

 308,125

 Equity compensation plans not approved by stockholders (3)

 5,053,896

 $
 2.84

 -

 Total

 6,354,896

 $
 3.18

 308,125

 (1)

 of our 2010 and 2012 Option Plan.

 (2)

 of our 2020 Option Plan

 (3)

 Warrants
 issued not under a plan

 ITEM
13 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Transactions
with Related Persons, Promoters and Certain Control Persons

 Other
than equity and other compensation, termination, change in control and other similar arrangements, which are described under "Executive
and Director Compensation.", since January 1, 2020 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
interest.

Independence

 Our
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. Mr. Ly is an employee director.

 The
Audit Committee currently consists of Messrs. Farnsworth (Chairman), Franco and Gillen, each of whom is an independent director of our
company. 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.

 ITEM
14 – PRINCIPAL ACCOUNTANT FEES AND SERVICES

 Fees
Paid to Independent Registered Public Accounting Firm

 In
July 2021, with the approval of the Audit Committee of the Board of Directors, we appointed BF Borgers CPA PC ("BFB") as
our principal accounting firm. BFB has served as the principal audit firm for Iveda 2020 and 2019 Financial Statements, and 2021 Financial
Statements since July 2021.

 We
paid or accrued $137,500 and $119,000, during the year ended December 31, 2023 and 2022, respectively.

 Audit
Committee Pre-Approval Policies

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

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

 PART
IV

 ITEM
15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 (a)

 Financial
 Statements and Financial Statement Schedules

 1.

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

 2.

 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.

 (b)

 Exhibits

 Exhibit

 Description
 of Exhibit

 2.1

 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)

 3.1

 Articles of Incorporation of Charmed Homes Inc. (Incorporated by reference to the Form SB-2 filed on 4/27/2007)

 3.2

 Bylaws of Iveda Solutions, Inc. (Incorporated by reference to the Form 10-K filed on 3/31/2014)

 3.3

 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)

 3.4

 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, 2010)

 3.5

 Certificate of Amendment to Articles of Incorporation filed with the Secretary of State of Nevada on December 9, 2014 containing the rights and preferences of the Series A Preferred Stock (Incorporated by reference to the Form 8-K filed on December 15, 2014)

 3.6

 Certificate of Amendment of Articles of Incorporation filed with the Secretary of State of Nevada on January 15, 2015, containing the Designation of the Preferences, Rights and Limitations of the Series B Preferred Stock (Incorporated by reference to the Form 8-K filed on January 23, 2015)

 4.1

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

 4.2

 Form of Stock Option Agreement under the IntelaSight, Inc. 2008 Stock Option Plan (Incorporated by reference to the Form S-4/A1 filed on 7/10/2009)

 4.3

 Form of Common Stock Purchase Warrant issued by IntelaSight, Inc. (Incorporated by reference to the Form S-4/A1 filed on 7/10/2009)

 4.4

 2009 Stock Option Plan, dated October 15, 2009 (Incorporated by reference to the Form 8-K filed on 10/21/2009)

 4.5

 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)

 4.6

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

 4.7

 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)

 4.8

 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)

 4.9

 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)

 4.10

 Form of Tranche A Warrant (Incorporated by reference to the Form 8-K filed on 1/28/2015)

 4.11

 Form of Tranche B Warrant (Incorporated by reference to the Form 8-K filed on 1/28/2015)

 4.12

 Registration Rights Agreement dated January 16, 2015 (Incorporated by reference to the Form 8-K filed on 1/28/2015)

 4.13

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

 4.14

 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)

 4.15

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

 4.16

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

 10.1

 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)

 10.2

 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)

 10.3

 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)

 10.4

 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)

 10.5

 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)

 10.6

 Subscription Agreement, dated July 26, 2010 (Incorporated by reference to Form 10-Q filed on November 12, 2010)

 10.7

 Line of Credit Promissory Note, dated September 15, 2010 (Incorporated by reference to Form 10-Q filed on November 12, 2010)

 10.8

 Agreement for Service, dated October 20, 2010 (Incorporated by reference to Form 10-Q filed on November 12, 2010)

 10.9

 Consulting Agreement, dated October 25, 2010 (Incorporated by reference to Form 10-Q filed on November 12, 2010)

 10.10

 Operating Level Agreement, dated October 25, 2010 (Incorporated by reference to Form 10-Q filed on November 12, 2010)

 10.11

 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)

 10.12

 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)

 10.13

 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)

 10.14

 Consulting Agreement between Iveda Solutions, Inc. and Amextel S.A. de C.V. dated November 2, 2011 (Incorporated by reference to Form 10-K/A filed on 5/11/2012)

 10.15

 Securities Purchase Agreement dated January 16, 2015 (Incorporated by reference to the Form 8-K filed on 1/28/2015)

 10.17

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

 10.18

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

 14.1

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

 14.2

 Code of Ethics for Chief Executive Officer and Senior Financial Officers (Incorporated by reference to the Form 10-K filed on 4/15/2010)

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

 31.1*

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

 31.2*

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

 32.1*

 Certification of Principal Executive Officer Pursuant to Section 1350

 32.2*

 Certification of Principal Financial Officer Pursuant to Section 1350

 97.1

 Compensation Recovery Policy of Iveda Solutions, Inc.

 101.INS*

 101.SCH*

 101.CAL*

 101.DEF*

 101.LAB*

 101.PRE*

 Cover

 *

 Filed
 herewith.

 **

 Furnished
 herewith.

 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.

 SIGNATURES

 Pursuant
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.

 Date:

 IVEDA

 By:

 /s/
 David Ly

 David
 Ly

 Chief
 Executive Officer and Chairman

 Date:

 IVEDA

 By:

 /s/
 Robert J. Brilon

 J. Brilon

 Chief
 Financial Officer, Treasurer and Secretary

 Pursuant
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.

 Signature

 Capacity

 Date

 /s/
 David Ly

 Chief
 Executive Officer and Chairman

 David
 Ly

 (Principal
 Executive Officer)

 /s/
 Robert J. Brilon

 Chief
 Financial Officer, Treasurer and Secretary

 J. Brilon

 (Principal
 Financial and Accounting Officer)

 /s/
 Joseph Farnsworth

 Joseph
 Farnsworth

 /s/
 Alejandro Franco

 Alejandro
 Franco

 /s/
 Robert D. Gillen

 D. Gillen

TO CONSOLIDATED FINANCIAL STATEMENTS

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 5041)

 CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2023 AND 2022

 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 F- 1

 Report
of Independent Registered Public Accounting Firm

 To
the shareholders and the board of directors of Iveda Solutions, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Iveda Solutions, Inc. as of December 31, 2023 and 2022, the related statements
of operations, stockholders' equity (deficit), and cash flows for the years then ended, and the related notes (collectively referred
to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2023 and 2022, 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.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audit. 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the 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 audits
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
audit included performing procedures to assess the risks of material misstatement of the 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 financial statements. Our audit 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 audit provides
a reasonable basis for our opinion.

 Critical
Audit Matter

 Critical
audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be
communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and
(2) involved our especially challenging, subjective, or complex judgments.

 We
determined that there are no critical audit matters.

 /S/
 BF Borgers CPA PC (PCOAB ID 5041)

 We
have served as the Company's auditor since 2021

 Lakewood,
CO

 April
1, 2024

 F- 2

 IVEDA

BALANCE SHEETS

 DECEMBER
31, 2023 AND 2022

 December 31, 2023

 December 31, 2022

 ASSETS

 CURRENT ASSETS

 Cash and Cash Equivalents

 $
 4,754,597

 $
 7,312,095

 Restricted Cash

 129,778

 129,527

 Accounts Receivable, Net

 281,049

 1,222,690

 Inventory, Net

 324,515

 526,470

 Other Current Assets

 435,580

 371,990

 Total Current Assets

 5,925,520

 9,562,772

 PROPERTY AND EQUIPMENT, NET

 891,187

 32,911

 OTHER ASSETS

 Other Assets

 444,723

 267,387

 Total Other Assets

 444,723

 267,387

 Total Assets

 $
 7,261,430

 $
 9,863,070

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES

 Accounts and Other Payables

 $
 1,110,087

 $
 1,638,727

 Short Term Debt

 348,771

 398,409

 Current Portion of Long-Term Debt

 -

 65,408

 Total Current Liabilities

 1,458,858

 2,102,544

 LONG-TERM DEBT

 -

 190,776

 STOCKHOLDERS' EQUITY

 Preferred Stock, $ 0.00001 par value; 100,000,000 shares authorized

 Series B Preferred Stock, $ 0.00001 par value; 500 shares authorized, no shares issued and outstanding
 as of December 31, 2023 and December 31, 2022.

 -

 -

 Preferred Stock, value

 -

 -

 Common Stock, $ 0.00001 par value; 100,000,000 shares authorized; 16,169,891 and 15,066,739 shares
 issued and outstanding as of December 31, 2023 and December 31, 2022, respectively

 Additional Paid-In Capital

 54,065,633

 52,496,914

 Joint Venture Non-Controlled Equity Portion

 ( 99,048
)

 Accumulated Comprehensive Loss

 ( 222,380
)

 ( 220,643
)

 Accumulated Deficit

 ( 47,941,796
)

 ( 44,706,671
)

 Total Stockholders' Equity

 5,802,572

 7,569,750

 Total Liabilities and Stockholders' Equity

 $
 7,261,430

 $
 9,863,070

 See
accompanying Notes to Consolidated Financial Statements.

 F- 3

 IVEDA

STATEMENTS OF OPERATIONS

 YEARS
ENDED DECEMBER 31, 2023 AND 2022

 2023

 2022

 REVENUE

 Equipment Sales

 $
 6,052,298

 $
 4,159,398

 Service Revenue

 443,567

 308,881

 Other Revenue

 -

 -

 TOTAL REVENUE

 6,495,865

 4,468,279

 COST OF REVENUE

 5,428,261

 3,504,778

 GROSS PROFIT

 1,067,604

 963,501

 OPERATING EXPENSES

 General & Administrative

 4,478,553

 4,292,820

 Total Operating Expenses

 4,478,553

 4,292,820

 LOSS FROM OPERATIONS

 ( 3,410,949
)

 ( 3,329,320
)

 OTHER INCOME (EXPENSE)

 Miscellaneous Income (Expense)

 ( 28,099
)

 ( 17,078
)

 Interest Income

 131,881

 57,397

 Interest Expense

 ( 7,254
)

 ( 53,323
)

 Total Other Income (Expense)

 96,527

 ( 13,004
)

 Joint Venture Non-Controlled Interest

 97,605

 LOSS BEFORE INCOME TAXES

 ( 3,216,817
)

 ( 3,342,324
)

 BENEFIT (PROVISION) FOR INCOME TAXES

 ( 18,308
)

 ( 2,947
)

 NET LOSS

 $
)

 $
)

 BASIC AND DILUTED LOSS PER SHARE

 $
 ( 0.20
)

 $
 ( 0.26
)

 WEIGHTED AVERAGE SHARES

 15,973,422

 12,846,848

 See
accompanying Notes to Consolidated Financial Statements.

 F- 4

 IVEDA

STATEMENTS OF STOCKHOLDERS' EQUITY

 Common

 Common
 Stock
 Amount

 Preferred

 Additional
 Paid-in-Capital

 Accumulated
 Deficit

 Accumulated
 Other
 Comprehensive
 Income (loss)

 Total
 Stockholders'
 Equity(Deficit)

 BALANCE AT December 31, 2021

 9,668,369

 -
 -

 $
 40,727,518

 $
 ( 41,361,401
)

 $
 ( 143,493
)

 $
 ( 777,279
)

 Costs of Capital

 ( 1,613,470
)

 ( 1,163,918
)

 Stock Based Compensation

 -
 -

 120,581

 120,581

 Common Stock issued for conversion error

 -

 -

 -

 Common Stock issued for services

 215,000

 -
 -

 219,899

 219,900

 Warrants for Services

 5,555

 5,555

 Exercise of options and warrants

 8,215

 -

 23,000

 23,000

 Common Stock Offering for Cash

 1,885,000

 8,011,231

 8,011,250

 Common Stock and Pre-Funded Warrant Offering for Cash – August 2022

 3,289,474

 4,999,803

 4,999,836

 Warrants sold in
 Over allotment

 2,797

 2,797

 Net Loss

 -

 -

)

)

 Comprehensive Loss

 ( 77,150
)

 ( 77,150
)

 8 for 1 conversion adjustment

 BALANCE AT December 31, 2022

 15,066,739

 $

 -
 -

 $
 52,496,914

 $
 ( 44,706,671
)

 $
 ( 220,643
)

 $
 7,569,750

 Balance

 15,066,739

 $

 -
 -

 $
 52,496,914

 $
 ( 44,706,671
)

 $
 ( 220,643
)

 $
 7,569,750

 Exercise of warrants issued August 2022

 945,900

 1,322,875

 1,322,885

 Common Stock issued for services

 157,252

 -
 -

 138,544

 138,546

 Joint Venture Non-Controlled Equity Interest

 ( 99,048
)

 Net Loss

 -

 -

)

)

 Comprehensive Loss

 -

 ( 1,737
)

 ( 1,737
)

 BALANCE AT December 31, 2023

 16,169,891

 $

 -

 $
 54,065,633

 $
 ( 47,941,796
)

 $
 ( 222,380
)

 $
 5,802,572

 Balance

 16,169,891

 $

 -

 $
 54,065,633

 $
 ( 47,941,796
)

 $
 ( 222,380
)

 $
 5,802,572

 *

 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 March 31, 2022.

 See
accompanying Notes to Consolidated Financial Statements

 F- 5

 IVEDA

STATEMENTS OF CASH FLOWS

 DECEMBER
31, 2023 AND 2022

 2023

 2022

 CASH FLOWS FROM OPERATING ACTIVITIES

 Net Loss

 $
)

 $
)

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

 Depreciation and Amortization

 19,753

 17,801

 Interest Value of Convertible Debt Issued

 -

 -

 Stock Option Compensation

 104,600

 120,581

 Common Stock Warrants Issued for Services

 2,700

 5,555

 Common Stock Warrants Issued for Interest

 -

 -

 Common Stock issued for Services

 138,546

 219,900

 (Increase) Decrease in Operating Assets

 Accounts Receivable

 930,803

 ( 785,969
)

 Inventory

 199,124

 ( 214,898
)

 Other Current Assets

 ( 66,995
)

 ( 168,122
)

 Other Assets

 ( 175,592
)

 ( 19,919
)

 Increase (Decrease) in Accounts and Other Payables

 ( 522,460
)

 ( 1,238,379

 Net Cash Used in Operating Activities

 ( 2,604,645
)

 ( 5,408,720
)

 CASH FLOWS FROM INVESTING ACTIVITIES

 Purchase of Property and Equipment

 ( 878,205
)

 ( 14,165
)

 Net Cash Provided by (Used in) Investing Activities

 ( 878,205
)

 ( 14,165
)

 CASH FLOWS FROM FINANCING ACTIVITIES

 Changes in Restricted Cash

 ( 685
)

 ( 214
)

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

 ( 47,554
)

 358,888

 Proceeds from (Payments to) Due to Related Parties

 -

 ( 300,000
)

 Proceeds from (Payments to) Long-Term Debt

 ( 251,498
)

 ( 164,093
)

 Joint Venture Non-Controlled Equity Portion

 ( 99,048
)

 -

 Common Stock Issued, Net of (Cost of Capital)

 1,322,885

 11,511,741

 Net Cash Provided by Financing Activities

 924,100

 11,406,322

 EFFECT OF EXCHANGE RATE CHANGES ON CASH

 1,252

 ( 56,617
)

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 ( 2,557,499
)

 5,926,820

 Cash and Cash Equivalents- Beginning of Period

 7,312,095

 1,385,275

 CASH AND CASH EQUIVALENTS - END OF PERIOD

 $
 4,754,596

 $
 7,312,095

 See
accompanying Notes to Consolidated Financial Statements.

 F- 6

 IVEDA

STATEMENTS OF CASH FLOWS - CONTINUED

 FOR
THE YEARS ENDING DECEMBER 31, 2023 AND 2022

 2023

 2022

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 Interest Paid

 $
 9,793

 $
 53,323

 Income Tax Paid

 $
 28,779

 $
 -

 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

 See
accompanying Notes to Consolidated Financial Statements.

 F- 7

 IVEDA

 NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS

 NOTE
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Nature
of Operations

 Iveda
has been offering real-time IP video surveillance technologies to our customers since 2005. While we still offer video surveillance technologies,
our core product line has evolved to include AI intelligent video search technology that provides true intelligence to any video surveillance
system and IoT (Internet of Things) devices and platforms. Iveda also offers smart utility, smart sensors, gateways and trackers. Our
evolution is in response to digital transformation demands from many cities and organizations across the globe. Our IvedaAI intelligent
video search technology adds critical intelligence to normally passive video surveillance systems. IvedaAI provides AI functions to any
IP camera and most popular network video recorders (NVR) and video management systems (VMS). IvedaAI comes with an appliance or server,
preconfigured with multiple AI functions based on the end user requirements.

 AI
Functions

 Object
 Search

 Face
 Search (No Database Required)

 Face
 Recognition (from a Database)

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

 Intrusion

 Weapon

 Fire

 People

 Vehicle

 Temperature

 Public
 Health Analytics (Facemask Detection)

 QR
 and Barcode Detection

 Key
Features

 Live
 Camera View

 Live
 Tracking

 Abnormality
 Detection – Vehicle/Person wrong direction detection

 Vehicle/Person
 Loitering Detection

 Fall

 Illegal
 Parking Detection

 Heatmap
 Generation

 consists of deep-learning video analytics software running in a computer/server environment that can either be deployed at an edge
level or data center for centralized cloud model. We combined hardware and artificial intelligence software for fast and efficient video
search for objects stored in an external (NVR) or storage device and live streaming video data from any IP camera.

 works with any ONVIF-compliant IP cameras and most popular NVR/VMS (Video Management System) platforms, enabling accurate search
across dozens to thousands of cameras in less than 1 second. IvedaAI products are designed to maximize efficiency, save time, and cut
cost. Instead of watching hours of video recording after-the-fact, users can set up alerts.

 Iveda
offers many IoT sensors and devices for various applications, such as energy management, smart home, smart building, smart community
and patient/elder care. Our gateway and station serve as the main hub for sensors and devices in any given area. They are equipped with
high-level communication protocols such as Zigbee, WiFi, Bluetooth, and USB. They connect to the Internet via Ethernet or cellular data
network. We provide IoT platforms that enable centralized device management and push digital services on a massive scale. Our smart devices
include water sensor, environment sensor, entry sensor, smart plug, siren, body temperature pad, a care wrist watch and tracking devices.

 F- 8

 We
also offer smart power technology for office buildings, schools, shopping centers, hotels, hospitals, and smart city projects. Our smart
power hardware is equipped with an RS485 communication interface allowing the meters to be connected to various third-party SCADA software
for monitoring and control purposes. This line of product includes smart power, water meter, smart lighting controls systems, and smart
payment system.

Cerebro is a software technology platform that integrates a multitude of disparate systems for central access and management of applications,
subsystems, and devices throughout an entire environment. It is system agnostic and will support cross-platform interoperability. Cerebro's
roadmap includes a dashboard for all of Iveda's platforms for central management of all devices. It provides remote access to a
Dashboard for a single user interface, providing convenient anywhere, anytime access and analysis of relevant information in a timely
manner for managing an entire organization or city. Cerebro links city systems and subsystems inseparably to each other. This integration
and unification of all subsystems enable acquisition and analysis of all information on one central entity allowing comprehensive, effective
and overall management and protection of a city.

 IvedaSPS
 is our smart power solution, utilizing our Cerebro IoT platform. This completes our digital transformation solution crucial in smart
city deployments as well as in large organizations. We offer smart power technology for office buildings, schools, shopping centers,
hotels, hospitals, and smart city projects. This product includes smart power, water meter, smart lighting controls systems, and smart
payment system.

 In
the last few years, smart city has been a hot topic among cities across the globe. With little to no human interaction, technology increases
efficiency, expedites decision making, and reduces response time. Dwindling public safety budgets and resources have necessitated this
transformation. More and more municipalities are using next-generation technologies to improve the safety and security of its citizens.
Our response is our complete suite of IoT technologies, including AI intelligent video search technology, smart sensors, tracking devices,
video surveillance systems, and smart power.

 Utilus
 is our smart pole solution, utilizing our Cerebro IoT platform. This completes our digital transformation solution crucial in smart
city deployments as well as in large organizations. Iveda leverages infrastructure already available in most modern cities – Light
poles with power We equip existing poles with Utilus. Utilus consists of power and Internet, establishing a communication network for
access and management of sensors and devices that the city requires to keep its citizens safe and secure and to effectively manage utility
consumption. Our smart pole offering is also ideal for:

 Government
 or large-scale city deployments

 Supporting
 and Improving City Services

 Reducing
 Emergency Response Times

 Crime&
 Hazard Protection

 Monitoring
 and Improving Air Quality

 Sound

 Traffic
 Monitoring and Mobility as a Service

 Data
 Analytics and Monetization Opportunities

 vumastAR
 is an AI vision software that uses video taken on IP cameras, AR glasses, Androids, and tablets to analyze and process data in real-time.
vumastAR is fully customizable to the user's needs, with one short video the AI can be trained in as little as two hours. Deployable
in multiple industries for uses such as:

 Quality
 and Maintenance Exams: vumastAR has the power to assist with critical measuring of carcinogenic chemical compound levels, electrical
 wiring, and welding inspections.

 Factory
 and Line Work: Fast and accurate machine recognition enables itemized counting, inventory audits, and assembly kitting.

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

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

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

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

 Retail:
 Ensure correct item identification and organization, providing increased accuracy for retail checkout and product categorization,
 ultimately impacting revenue streams.

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

 IvedaXpress
 is a system that enables users to use pre-existing IP cameras and apply AI analytics without the need for large servers or a dedicated
IT department. Designed to be plug-and-play IvedaXpress provides a hassle free set up process with no maintenance required for hardware.
Each IP camera is hosted from a local computer or smartphone for live viewing and playback. Video may be stored on that local computer
or stored remotely using free storage from Amazon or Dropbox.

 F- 9

 Iveda
Smart UVC is a Commercial-grade, AI-driven Ultraviolet Germicidal Irradiation (UVGI). Iveda Smart UVC adds UV lights to standard
HVAC vents for quick, easy, and inexpensive deployment to homes and commercial buildings. Leveraging the existing air circulation system,
Iveda Smart UVC vents disinfect the air by irradiating UV light on the passing air. Eliminating the need to manually disinfect offices,
meeting rooms, and other workspaces. Iveda Smart UVC can be Integrated with Iveda SPS (smart power management) and sensors to efficiently
and effectively operate the light source upon detected movement.

Smart Drones are flown to perform certain functions from an aerial view without the need for a pilot onboard. Smart Drones utilize
AI-based software for autonomous operation and navigation from taking off, returning to base, carrying out mission-critical tasks or
simply doing an aerial patrol, without the need of human intervention. Unlike typical drones, Iveda Smart Drones are cloud-based and
can be part of a network of drones for central management. They are equipped with Iveda's Sentir Video Surveillance System and
IvedaAI Intelligent Video Search Technology.

 Iveda
Smart Drone product offering is robust and expansive for a multitude of industrial, commercial, and military applications.

 Key
Features of Iveda's Smart Drone:

 Fully
Autonomous

 Scheduled
autonomous take-off, flight mission execution, monitoring, landing and recharging

 Easy
operation and 24-7 flight mission

 Intelligent
Computing

 Live
video streaming - real-time object recognition and tracking

 Onboard
(edged) AI and data analysis

 Safety
Design

 Multiply
redundant and fail-safe systems

 Weather
resistant industrial grade systems (IP54)

 Designed
and made in Taiwan (MIT)

 Skywatch

 Planning
and editing real-time/timed missions

 User/Group
permission control & flight data management

 Failsafe
alarm and FPV gimbal control

 Insight

 Automated
orthorectified service of imagery (2D/3D)

 AI
technology for inspecting natural disaster, vehicle & pedestrian tracking, and energy facilities inspection.

 Visualizing
geographic data and analysis report

 Propellers:
 8 (multiply redundant)

 Diagonal
 Footprint: 29.76 / 756 mm

 Weight:
 14.1lbs / 6.4 Kg

 Hover
 time: 30 mins

 Wind
 tolerance: Beaufort scale – 6

 IP
 rating: IP54

 Camera
 sensor: Dual RGB, IR/thermal

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

 The
Smart Utility Cabinet gives end users a convenient tool to monitor their daily energy consumption, to pinpoint electrical leaks,
and to prevent power line overload and potential fire. It utilizes IoT sensors to detect abnormalities in consumption, temperature and
tampering. Iveda Smart Utility Cabinet has an internal environment control design, housed in a durable industrial-grade cabinet. It includes
a smart edge computing gateway with multi-RF communication protocols such as 4G, Z-Wave and WiFi and tampering sensor for unauthorized
access. Smart water meter and gas meter may be added to the Cabinet.

 Vemo
Body Camera streams live video, using 4G, to headquarters and doubles as a walkie talkie with a push-to-talk feature. With its multi-mode
audio, it can also be used for broadcasting and hands-free audio conferencing for group talk. Vemo has WiFi capability which is ideal
for city-wide deployments. Vemo transmits live streaming video instantaneously to the cloud without additional software or hardware.
Vemo's cloud management platform can centrally manage an unlimited number of devices and video can be accessed on a PC, Android
and iOS client. Moreover, Vemo can stream directly into the IvedaAI platform for real-time video analytics to search for faces, objects
or license plates in real time.

 IvedaCare,
launched in November 2022, is a simple, easy to use suite of wireless health and wellness devices intended to help you monitor the health
and activities of your loved ones, even when you can't be there yourself. Our mission is to help ensure your loved one's
safety and independence. Stay connected to your elderly loved ones with our advanced IoT devices for real-time monitoring, fall detection,
medication reminders and more. With IvedaCare, you not only can monitor your home and loved ones from afar but can potentially make life-saving
decisions using the app. Cloud-based, wireless sensors collect real-time data shared with the entire family circle within the app. Customers
may add a subscription service for Pro Monitoring. If the Trusted Circle is unavailable, our emergency call center will dispatch emergency
services quickly.

 Historically,
we sold and installed video surveillance equipment, primarily for security purposes and secondarily for operational efficiencies and
marketing. We also provided video hosting, in-vehicle streaming video, archiving, and real-time remote surveillance services to a variety
of businesses and organizations. While we previously only used off-the shelf camera systems from well-known camera brands, we now source
our own cameras using manufacturers in Taiwan in order for us to be more flexible in fulfilling our customer needs. We now have the capability
to provide IP cameras and NVRs based on customer specifications. We still utilize ONVIF (Open Network Video Interface Forum) cameras,
which are a global standard for the interface of IP-based physical security products.

 F- 10

 In
2014, we changed our revenue model from direct project-based sales to licensing our platform and selling IoT hardware to service providers
such as telecommunications companies, integrators and other technology resellers already providing services to an existing customer base.
Partnering with service providers that have an existing loyal subscriber base allows us to focus on servicing just a handful of our partners
and concentrating on our technology offering. Service providers leverage their end-user infrastructure to sell, bill, and provide customer
service for Iveda's product offering. This business model provides dual revenue streams – one from hardware sales and the
other from monthly licensing fees.

 MEGAsys,
our subsidiary in Taiwan, specializes in deploying new, and integrating existing, video surveillance systems for airports, commercial
buildings, government customers, data centers, shopping centers, hotels, banks, and Safe City. MEGAsys combines security surveillance
products, software, and services to provide integrated security solutions to the end user. Through Iveda Taiwan, we have access not only
to Asian markets but also to Asian manufacturers and engineering expertise. Iveda Taiwan is our research and development arm, working
with a team of developers in Taiwan.

 Consolidation

 Effective
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.

 F- 11

 Impairment
of Long-Lived Assets

 We
have a significant amount of property and equipment, consisting primarily of leased 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 value. We did
not make any impairment for the years ended December 31, 2023 and 2022.

 Basis
of Accounting

 Our
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.

 Use
of Estimates

 The
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 these estimates.

and Expense Recognition

 The
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.

 The
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). For each contract, the Company
considers the promise to transfer products, each of which is distinct, to be the identified performance obligations. 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 component. The Company allocates the transaction
price to each distinct product based on its relative standalone selling price. The 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. 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. The 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.

 F- 12

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

 The
 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 and charged for service when installation or maintenance work is performed.

 Revenues
from fixed-price equipment installation contracts (project sales) 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.

 Contract
costs include all direct material, subcontractors, labor costs, and equipment costs and those indirect costs related to contract performance.
General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made
in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result
in revisions to costs and income and are recognized in the period in which the revisions are determined. Changes in estimated job profitability
resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements are accounted for
as changes in estimates in the current period. Profit incentives are included in revenues when their realization is reasonably assured.
Claims are included in revenues when realization is probable and the amount can be reliably estimated.

 The
 majority of Iveda US hardware sales are to 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.

 Iveda
 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 period.

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

 Concentrations

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

 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 limit.

 F- 13

 Accounts
receivables are unsecured, and we are at risk to the extent such amount becomes uncollectible. We perform periodic credit evaluations
of our customers' financial condition and generally do not require collateral. 50 % of the total accounts receivable at December
31, 2023 was from one customer out of a total of 24 customer accounts receivable accounts. This specific customer was Chunghwa Telecom.
At December 31, 2022 one customer out of a total of 36 customer accounts receivable accounts was 52 % of the total accounts receivable.
This specific customer was Chicony Power Technology Co Ltd. These customers are longtime customers, and we don't expect any problem
with collectability of these accounts receivable.

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).

from two customers out of 42 total customers represented approximately 52 % of total revenue for the year ended December 31, 2022. These
specific customers were 1) Chunghwa Telecom with 21 %, 2) Chicony Power Technology Co Ltd with 31 %, (both Taiwan companies).

 No
other customers represented greater than 10 % of total revenues in years ended December 31, 2023 and 2022.

 Cash
and Cash Equivalents

 For
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.

 Accounts
Receivable

 We
provide an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information,
and existing economic conditions. For our U.S.-based segment, receivables past due more than 120 days are considered delinquent. For
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, 2023 and 2022, respectively, an allowance for uncollectible
accounts of $ 0 and $ 0 was deemed necessary for our U.S.-based segment.

 Deposits
– Current

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

 Other
Current Assets

 Other
current assets represent cash paid in advance to vendors for service coverage extending into subsequent periods.

 Inventories

 We
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. The allowance for slow-moving and obsolete
inventory is $ 0 and $ 0, as of December 31, 2023 and 2022, respectively.

 Property
and Equipment

 Property
and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over estimated useful lives of three
to seven years. Expenditures for routine maintenance and repairs are charged to expense as incurred. Depreciation expense for the years
ended December 31, 2023 and 2022 was $ 19,753 and $ 17,801, respectively.

 F- 14

 Deposits—Long-Term

 Long-term
deposits consist of a deposit related to the leases of Iveda Taiwan' office space, and tender deposits placed with local governments
and major customers in Taiwan as part of the bidding process, which are anticipated to be held more than one year if the bid is accepted.

 Income
Taxes

 Deferred
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. 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 our best estimate of such deferred tax assets that, more likely
than not, will be realized. Income tax expense is the tax payable for the year and the change during the year in deferred tax assets
and liabilities. During 2023, we reevaluated the valuation allowance for deferred tax assets and determined that no current benefits
should be recognized for the year ended December 31, 2023.

 We
are subject to U.S. federal income tax as well as state income tax.

 Our
U.S. income tax returns are subject to review and examination by federal, state, and local authorities. Our U.S. tax returns for the
years 2019 to 2022 are open to examination by federal, local, and state authorities.

 Our
Taiwan tax returns are subject to review and examination by the Taiwan Ministry of Finance. Our Taiwan tax return for the years 2019
to 2022 are open to examination by the Taiwan Ministry of Finance.

 Restricted
Cash

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

 Accounts
and Other Payables

OF ACCOUNTS AND OTHER PAYABLES

 December 31, 2023

 December 31, 2022

 Accounts Payable

 $
 179,949

 $
 360,395

 Accrued Expenses

 900,928

 1,243,027

 Deferred Revenue and Customer Deposits

 29,211

 35,305

 Accounts and Other Payables

 $
 1,110,087

 $
 1,638,727

 Deferred

 Advance
payments received from customers on future installation projects are recorded as deferred revenue.

 F- 15

 Stock-Based
Compensation

 On
January 1, 2006, we 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. We elected the modified prospective transition method as
permitted by ASC 718. Under this transition method, stock-based compensation expense 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. We recognize stock-based 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, 2023 and 2022, 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. We recognized $ 104,600 and $ 120,581 of
stock-based compensation expense for the years ended December 31, 2023 and 2022, respectively.

 Fair
Value of Financial Instruments

 Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of December 31,
2023 and December 31, 2022. The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values.
These financial instruments include cash, accounts receivable, 0 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.

 Segment

 We
conduct operations in various geographic regions. The operations conducted and the customer bases located in the foreign countries are
similar to the business conducted and the customer bases located in the United States. The net revenues and net assets (liabilities)
for other significant geographic regions are as follows:

OF NET REVENUE AND NET ASSETS (LIABILITIES) FOR OTHER SIGNIFICANT GEOGRAPHIC REGIONS

 December 31, 2023

 Net Revenue

 Net Assets (Liabilities)

 United States

 $
 852,136

 $
 5,364,184

 Republic of China (Taiwan)

 $
 5,648,982

 $
 907,113

 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. The taxes 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.

 Reclassification

 Certain
amounts in 2022 have been reclassified to conform to the 2023 presentation.

 New
Accounting Standards

 No
new relevant accounting standards

 F- 16

 NOTE
2 RELATED PARTIES - None

 NOTE
3 SHORT-TERM AND LONG-TERM DEBT

 The
short-term debt balances were as follows:

OF SHORT-TERM DEBT

 December 31, 2023

 December 31, 2022

 Loan from Shanghai Bank at 1%-3.06% interest rate per annum. Due in January 2024 and July 2024.

 88,032

 -

 Loan from Shanghai Bank at 1 %- 3.06 % interest rate per annum. Due in January 2024 and July 2024.

 88,032

 -

 Loan from HuaNam Bank at 3.44 % interest rate per annum. Due in May 2024.

 97,777

 -

 Loan from ChangHwa Bank at 3 % interest rate per annum. Due in November 2024.

 162,962

 -

 Loan Agreement with Shanghai Bank at 2.94 % interest rate per annum due September 2023.

 -

 398,409

 Balance at end of period

 $
 348,771

 $
 398,409

 The
Long-term debt balances were as follows:

OF LONG-TERM DEBT

 Loans from Shanghai Bank with interest rates 1.50% - 2.97% per annum due February 2024 – November 2026

 -

 256,184

 Loans from Shanghai Bank with interest rates 1.50 % - 2.97 % per annum due February 2024 – November 2026

 -

 256,184

 Current Portion of Long-term debt

 -

 ( 65,408
)

 Balance at end of period

 $
 -

 190,776

 F- 17

 NOTE
4 PREFERRED STOCK

 We
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.

 NOTE
5 EQUITY

 Common
Stock

 We
are authorized to issue up to 37,500,000 shares of common stock, par value $ 0.00001 per share. 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.

 NOTE
6 STOCK OPTION PLAN AND WARRANTS

 Stock
Options

 On
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 125,000 shares of common stock to directors, officers, key employees, and service providers of our company. In 2011,
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 1,625,000 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
(No. 333-175143), and December 4, 2013 (No. 333-192655). The 2010 Option Plan expired on January 18, 2020. As of December 31, 2023 there
were 359,125 options outstanding under the 2010 Option Plan.

 On
December 15, 2020, we adopted the Iveda Solutions, Inc. 2020 Plan (the "2020 Plan"). The 2020 Plan has a maximum of 1,250,000
shares authorized with similar terms and conditions to the 2010 Option Plan. As of December 31, 2023 there were 941,875 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)

 F- 18

 As
of December 31, 2023 and December 31, 2022, there were 1,301,000 and 1,014,438 options outstanding, respectively, under all the option
plans.

 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 our 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 us under Section 162(m). Under
the plans, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant.

 We
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. The estimated fair value of options
is recognized as expense on the straight-line basis over the options' vesting periods. At December 31, 2023, we had approximately
$ 93,887 unrecognized stock-based compensation.

 Stock
option transactions during 2023 and 2022 were as follows:

OF STOCK OPTION TRANSACTIONS

 2023

 2022

 Price

 Price

 Outstanding at Beginning of Year

 1,014,438

 $
 5.61

 893,438

 $
 6.80

 Granted

 233,125

 0.68

 233,125

 2.26

 Exercised

 -

 -

 -

 -

 Forfeited or Cancelled

 ( 10,938
)

 1.35

 ( 112,125
)

 16.19

 Outstanding at End of Year

 1,301,000

 4.50

 1,014,438

 5.61

 Options Exercisable at Year-End

 1,260,375

 4.62

 959,750

 5.61

 Weighted-Average Fair Value of Options Granted During the Year

 $
 0.34

 $
 0.92

with respect to stock options outstanding and exercisable at December 31, 2023 is as follows:

OF STOCK OPTION OUTSTANDING AND EXERCISABLE

 Options Outstanding

 Options Exercisable

 Range of
 Prices

 Outstanding at
 2023

 Remaining
 Contractual
 Life

 Price

 Exercisable at
 2023

 Price

 $
 0.32 - $ 17.76

 1,301,000

 6.5

 $
 4.50

 1,260,375

 $
 4.62

 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.

OF BLACK-SCHOLES OPTION-PRICING MODEL

 2023

 2022

 Expected Life

 5 yrs

 5 yrs

 Dividend Yield

 %

 %

 Expected Volatility

 %

 %

 Risk-Free Interest Rate

 4.00
 %

 1.00
 %

 F- 19

 Warrant
transactions during 2023 and 2022 were as follows:

 SCHEDULE OF WARRANT TRANSACTIONS

 2023

 2022

 Price

 Price

 Outstanding at Beginning of Year

 $
 2.66

 872,259

 $
 3.04

 Granted

 11,250

 0.72

 5,616,224

 2.96

 Exercised

 ( 945,900
)

 1.40

 ( 8,214
)

 2.80

 Forfeited or Cancelled

 ( 245,114
)

 3.34

 ( 246,609
)

 2.80

 Outstanding at End of Year

 5,053,896

 2.84

 2.66

 Warrant Exercisable at Year-End

 5,053,896

 2.84

 2.66

 Weighted-Average Fair Value of Warrants Granted During the Year

 $
 0.24

 $
 0.72 - $ 2.53

with respect to warrants outstanding and exercisable at December 31, 2023 is as follows:

 SUMMARY
OF WARRANTS OUTSTANDING AND EXERCISABLE INFORMATION

 Warrants Outstanding

 Warrants Exercisable

 Range of
 Prices

 Outstanding
 at
 2023

 Average Remaining Contractual
 Life

 Price

 Exercisable
 at
 2023

 Price

 $
 0.68 - $ 13.20

 3.4

 $
 2.84

 $
 2.84

 The
fair value of each warrant granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for options granted.

OF WARRANTS OUTSTANDING AND EXERCISABLE

 2023

 2022

 Expected Life

 1.5
yrs

 1.5
yrs

 Dividend Yield

 %

 %

 Expected Volatility

 %

 %

 Risk-Free Interest Rate

 4.00
 %

 0.18
- 1.00
 %

 F- 20

 NOTE
7 INCOME TAXES

 U.S.
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
carryforward that create deferred tax assets and liabilities are as follows:

OF DEFERRED TAX ASSETS AND LIABILITIES

 2023

 2022

 Tax Operating Loss Carryforward - USA

 $
 14,800,000

 $
 11,800,000

 Other

 -

 -

 Valuation Allowance - USA

 ( 14,800,000
)

 ( 11,800,000
)

 Deferred Tax Assets, Net

 $
 -

 $
 -

 The
valuation allowance increased approximately $ 1.0 million, primarily as a result of the increased net operating losses of our U.S.- based
segment.

 As
of December 31, 2023, we had federal net operating loss carryforwards for income tax purposes of approximately $ 35 million which will
begin to expire in 2025. We also have Arizona net operating loss carryforwards for income tax purposes of approximately $ 2.0 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 only.

 SUMMARY OF OPERATING LOSS CARRYFORWARDS

 Year Ending

 Net Operating

 Year of

 Loss:

 Expiration

 2023

 $
 3,000,000

 2043

 2022

 3,000,000

 2042

 2021

 1,000,000

 2041

 2020

 590,000

 2040

 2019

 260,000

 2039

 2018

 160,000

 2038

 2017

 140,000

 2037

 2016

 1,640,000

 2036

 2015

 3,400,000

 2035

 2014

 5,230,000

 2034

 2013

 5,600,000

 2033

 2012

 2,850,000

 2032

 2011

 2,427,000

 2031

 2010

 1,799,000

 2030

 2009

 1,750,000

 2029

 2008

 1,308,000

 2028

 2007

 429,000

 2027

 2006

 476,000

 2026

 2005

 414,000

 2025

 Taiwan
(Republic of China) Corporate Tax

 Sole-Vision
Technologies, Inc. is a subsidiary of the Company which is operating in Taiwan as a profit-seeking enterprise. Its applicable corporate
income tax rate is 17%. 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.

 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. 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.

 F- 21

 NOTE
8 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 by ASC No. 260, "Earnings per Share."

 Basic
earnings per share ("EPS") is computed by dividing reported earnings available to stockholders by the weighted average shares
outstanding. We had net losses for the years ended December 31, 2023 and 2022 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, 2023 and 2022.

 If
we did not have net losses in 2023 and 2022 we would have had an additional amount of dilutive securities convertible at less than the
then fair market value of the common stock. These amounts would have been 90,000 and 90,000, respectively.

 SCHEDULE OF EARNINGS PER SHARE BASIC AND DILUTED

 2023

 2022

 Basic EPS

 Net Loss

 $
)

 $
)

 Weighted Average Shares

 15,973,422

 12,840,598

 Basic Loss Per Share

 $
 ( 0.20
)

 $
 ( 0.26
)

 NOTE
9 CONTINGENT LIABILITIES—TAIWAN

 Pursuant
to certain contracts with Chicony Power Technology Co., Ltd., Siemens, Shihlin Electric & Engineering Corporation, and Chung-Hsin
Electric and Machinery Manufacturing Corp., 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, 2023 is $ 320,237.

 NOTE
10 SUBSEQUENT EVENTS

 F- 22