Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 08, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Iveda Solutions, Inc. | ' |
Entity Central Index Key | '0001397183 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'IVDA | ' |
Entity Common Stock, Shares Outstanding | ' | 26,437,466 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
ASSETS | ' | ' |
Cash and Cash Equivalents | $1,082,353 | $114,462 |
Restricted Cash | 883,630 | 447,206 |
Accounts Receivable, net | 508,136 | 1,958,799 |
Inventory | 208,133 | 123,021 |
Other Current Assets | 391,007 | 645,728 |
Total Current Assets | 3,073,259 | 3,289,216 |
PROPERTY AND EQUIPMENT, Net | 451,211 | 516,981 |
OTHER ASSETS | ' | ' |
Intangible Assets, Net | 151,666 | 166,666 |
Goodwill | 841,000 | 841,000 |
Other Assets | 104,026 | 105,621 |
Total Other Assets | 1,096,692 | 1,113,287 |
Total Assets | 4,621,162 | 4,919,484 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ' | ' |
Accounts and Other Payables | 1,793,682 | 2,456,788 |
Due to Related Parties, net of debt discount | 100,000 | 336,605 |
Short Term Debt | 87,000 | 802,122 |
Current Portion of Long-Term Debt | 185,338 | 75,707 |
Total Current Liabilities | 2,166,020 | 3,671,222 |
LONG TERM DEBT | 64,542 | 67,695 |
STOCKHOLDERS’ EQUITY | ' | ' |
Preferred Stock | 0 | 0 |
Common Stock | 262 | 204 |
Additional Paid-In Capital | 21,754,820 | 16,204,068 |
Accumulated Comprehensive Income (Loss) | -24,997 | -23,629 |
Accumulated Deficit | -19,339,485 | -15,000,076 |
Total Stockholders’ Equity | 2,390,600 | 1,180,567 |
Total Liabilities and Stockholders’ Equity | $4,621,162 | $4,919,484 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
REVENUE | ' | ' | ' | ' |
Equipment Sales | $409,222 | $212,531 | $1,467,044 | $1,309,495 |
Service Revenue | 149,578 | 162,970 | 476,410 | 811,591 |
Other Revenue | 10,118 | 5,672 | 34,852 | 31,406 |
TOTAL REVENUE | 568,918 | 381,173 | 1,978,306 | 2,152,492 |
COST OF REVENUE | 471,992 | 322,824 | 1,667,665 | 1,729,001 |
GROSS PROFIT | 96,926 | 58,349 | 310,641 | 423,491 |
OPERATING EXPENSES | 1,645,563 | 867,958 | 4,531,718 | 2,854,794 |
LOSS FROM OPERATIONS | -1,548,637 | -809,609 | -4,221,077 | -2,431,303 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Foreign Currency Gain (Loss) | -8,611 | -87 | -9,718 | -87 |
Loss from conversion of debt | 0 | 0 | -44,000 | 0 |
Interest Income | 0 | 6 | 997 | 545 |
Interest Expense | -16,221 | -24,414 | -65,611 | -46,738 |
Total Other Income (Expense) | -24,832 | -24,495 | -118,332 | -46,280 |
LOSS BEFORE INCOME TAXES | -1,573,469 | -834,104 | -4,339,409 | -2,477,583 |
BENEFIT FOR INCOME TAXES | 0 | 0 | 0 | 0 |
NET LOSS | ($1,573,469) | ($834,104) | ($4,339,409) | ($2,477,583) |
BASIC AND DILUTED LOSS PER SHARE (in dollars per share) | ($0.06) | ($0.04) | ($0.18) | ($0.15) |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net Loss | ($1,573,469) | ($834,104) | ($4,339,409) | ($2,477,583) |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustment | 1,022 | 14,660 | -7,757 | 21,486 |
Comprehensive Loss | ($1,572,447) | ($819,444) | ($4,347,166) | ($2,456,097) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net Loss | ($4,339,409) | ($2,477,583) |
Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities | ' | ' |
Depreciation and Amortization | 169,164 | 181,456 |
Loss from Conversion of Debt | 44,000 | 0 |
Stock Compensation | 126,813 | 96,573 |
Common Stock Issued for Services | 222,206 | 110,562 |
(Increase) Decrease in Operating Assets: | ' | ' |
Accounts Receivable | 1,410,678 | 245,307 |
Inventory | -86,424 | -24,686 |
Other Current Assets | 56,312 | -243,041 |
Accounts and Other Payables | -438,889 | -113,204 |
Net cash used in operating activities | -2,835,549 | -2,224,616 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Purchase of Property and Equipment | -89,897 | -387,064 |
Net cash used in investing activities | -89,897 | -387,064 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Changes in Restricted Cash | -441,724 | -46,903 |
Proceeds from (Payments on) Short-Term Notes Payable/Debt | -586,514 | 431,662 |
Proceeds from Exercise of Stock Options | 244,574 | 0 |
Proceeds from (Payments to) Related Parties | -236,605 | 352,892 |
Proceeds from (Payments on) Long-Term Debt | 0 | -35,839 |
Payments on Capital Lease Obligations | -6,987 | -8,561 |
Common Stock Issued, net of Cost of Capital | 4,913,216 | 1,797,021 |
Net cash provided by financing activities | 3,885,960 | 2,490,272 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 7,377 | 16,731 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 967,891 | -104,677 |
Cash and Cash Equivalents - Beginning of Period | 114,462 | 850,364 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 1,082,353 | 745,687 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ' | ' |
Interest Paid | $66,203 | $46,738 |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ' | |||||||||||||
NOTE 1 | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||
These statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted. The operating results and cash flows for the nine-month period ended September 30, 2013, are not necessarily indicative of the results that will be achieved for the full fiscal year ending December 31, 2013 or for future periods. | ||||||||||||||
The accompanying condensed consolidated financial statements have been prepared without audit and reflect all adjustments, consisting of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of financial position and the results of operations for the interim periods. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Estimates are used for, but not limited to, the accounting for the allowance for doubtful accounts, impairment costs, depreciation and amortization, sales returns and discounts, warranty costs, uncertain tax positions and the recoverability of deferred tax assets, stock compensation, contingencies and the fair value of assets and liabilities disclosed. Actual results and outcomes may differ from management’s estimates and assumptions. The statements have been prepared in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures, normally included in financial statements prepared in accordance with GAAP, have been condensed or omitted pursuant to such SEC rules and regulations. | ||||||||||||||
The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. | ||||||||||||||
Consolidation | ||||||||||||||
Effective April 30, 2011, Iveda Solutions, Inc. (the “Company”) completed its acquisition of Sole Vision Technologies (dba “MegaSys”), a company based in Taiwan. The consolidated financial statements include the accounts of the Company and MegaSys. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||
Going Concern | ||||||||||||||
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Since inception, the Company has generated an accumulated deficit from operations of approximately $19.3 million at September 30, 2013 and has used approximately $2.8 million in cash from operations through the current nine months ended September 30, 2013. As a result, a risk exists regarding our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty. | ||||||||||||||
A multi-step plan was adopted by management to enable the Company to continue to operate and begin to report operating profits. The highlights of that plan are: | ||||||||||||||
⋅ The Company is seeking additional financing and has engaged an investment bank to serve as placement agent. The financing may be in the form of sales of equity securities, debt convertible into equity securities and non-convertible debt, which may either be secured or unsecured. | ||||||||||||||
⋅ In the third quarter of 2013, the Company launched two new camera lines in collaboration with MegaSys, its Taiwan subsidiary and Industrial Technology Research Institute (ITRI), its nonprofit research and development partner in Taiwan. These products are enablers of the Company’s video hosting services. | ||||||||||||||
⋅ The Company has also recently developed two other standalone services: | ||||||||||||||
o IvedaMobile–a cloud-hosting service that turns any smartphone or tablet into a mobile, cloud video streaming device. This was developed with ITRI. | ||||||||||||||
o IvedaXchange – In collaboration with a technology partner, the Company developed a real-time situational awareness dashboard to enable organizations instant access to vital and filtered information such as emergency situations, location of critical assets, video monitoring, and local news. IvedaXchange is well-suited for law enforcement agencies and schools. | ||||||||||||||
⋅ The Company launched a new website to highlight new products and services with corresponding applications. | ||||||||||||||
⋅ The Company launched a second website allowing for direct web-sales, geared toward the residential and small-to-medium sized businesses. | ||||||||||||||
⋅ The Company intends to continue to participate in industry and vertical tradeshows to launch new products, generate leads, solicit resellers and other sales channels, and identify potential technology partners. | ||||||||||||||
⋅ The Company intends to continue advertising on selected trade magazines and running Google Adwords to generate leads. | ||||||||||||||
⋅ The Company has evaluated its reseller distribution channel and eliminated non-performing components of the channel. | ||||||||||||||
⋅ The Company is in active collaboration with certain telecommunications companies in other countries to resell the Company’s products and services in their respective countries. | ||||||||||||||
Concentrations | ||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. | ||||||||||||||
Substantially all cash is deposited in two financial institutions, one in the United States and one in Taiwan. At times, amounts on deposit in the United States may be in excess of the FDIC insurance limit. Deposits in Taiwan financial institutions are insured by CDIC (Central Deposit Insurance Corporation) with maximum coverage of NTD 3 million. At times, amounts on deposit in Taiwan may be in excess of the CDIC insurance limit. | ||||||||||||||
Accounts receivable are unsecured, and the Company is at risk to the extent such amount becomes uncollectible. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. Revenue from three customers represented approximately 59% of total revenues for the nine months ended September 30, 2013, and approximately 17% of total accounts receivable at September 30, 2013. | ||||||||||||||
Intangible Assets and Goodwill | ||||||||||||||
Intangible assets consist of trademarks and other intangible assets associated with the purchase price allocation of MegaSys. Such assets are being amortized over their estimated useful lives ranging from six months to ten years. Other Intangible Assets are fully amortized as of September 30, 2013. Future amortization of Intangible Assets is as follows: | ||||||||||||||
Trademarks | ||||||||||||||
2013 | $ | 5,000 | ||||||||||||
2014 | 20,000 | |||||||||||||
2015 | 20,000 | |||||||||||||
2016 | 20,000 | |||||||||||||
Thereafter | 86,666 | |||||||||||||
Total | $ | 151,666 | ||||||||||||
Goodwill represents the excess of the purchase price of MegaSys over the net assets acquired. Goodwill is tested annually for impairment or more frequently if indicators of impairment exist. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2013. The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses, convertible notes 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 fair values or they are receivable or payable on demand. | ||||||||||||||
Segment Information | ||||||||||||||
The Company conducts operations in various geographic regions outside the United States. The operations and the customer base conducted in the foreign countries are similar to the United States operations. The net revenues and net assets (liabilities) for other significant geographic regions outside the United States during the 9 months ended September 30, 2013 are as follows: | ||||||||||||||
Net Revenues | Net Assets | |||||||||||||
United States | $ | 378,222 | $ | 2,349,594 | ||||||||||
Asia | $ | 1,404,127 | $ | 41,006 | ||||||||||
Mexico | $ | 195,957 | - | |||||||||||
Furthermore, due to operations in various geographic locations, the Company is susceptible to changes in national, regional and local economic conditions, demographic trends, consumer confidence in the economy and discretionary spending priorities that may have a material adverse effect on the Company’s future operations and results. | ||||||||||||||
The Company is required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. These taxes and fees are legal assessments to the customer, for which the Company has a legal obligation to act as a collection agent. Because the Company does not retain these taxes and fees, the Company does not include such amounts in revenue. The Company records a liability when the amounts are collected and relieves the liability when payments are made to the applicable governmental agencies. | ||||||||||||||
The Company operates as two reportable business segments in defined in ASC 280, "Segment Reporting." Each business segment has a chief operating decision maker and management personnel which review their business segment’s performance as it relates to revenue, operating profit and operating expenses. | ||||||||||||||
Three Months | Three Months | Condensed | ||||||||||||
Ended September, 2013 | Ended September 30, 2013 | Consolidated | ||||||||||||
Iveda Solutions, Inc. | MegaSys | Total | ||||||||||||
Revenue | $ | 203,942 | $ | 364,976 | $ | 568,918 | ||||||||
Cost of Revenue | 209,195 | 262,797 | 464,603 | |||||||||||
Gross Profit | -5,253 | 102,179 | 96,926 | |||||||||||
Depreciation and Amort. | 53,181 | 2,634 | 55,815 | |||||||||||
General and Administrative | 1,375,451 | 214,297 | 1,589,748 | |||||||||||
(Loss) from Operations | -1,433,885 | -114,752 | -1,548,637 | |||||||||||
Foreign Currency Gain (Loss) | -8,611 | - | -8,611 | |||||||||||
Loss from the conversion of debt | - | - | - | |||||||||||
Interest Income | - | - | - | |||||||||||
Interest Expense | 11,676 | 4,545 | 16,221 | |||||||||||
(Loss) Before Income Taxes | -1,454,172 | -119,297 | -1,573,469 | |||||||||||
(Provision) For Income Taxes | - | - | - | |||||||||||
Net Loss | $ | -1,454,172 | $ | -119,297 | $ | -1,573,469 | ||||||||
Nine Months | ||||||||||||||
Ended September 30, | Nine Months | |||||||||||||
2013 | Ended September 30, | Condensed | ||||||||||||
Iveda Solutions, | 2013 | Consolidated | ||||||||||||
Inc. | MegaSys | Total | ||||||||||||
Revenue | $ | 574,179 | $ | 1,404,127 | $ | 1,978,306 | ||||||||
Cost of Revenue | 565,258 | 1,102,407 | 1,667,665 | |||||||||||
Gross Profit | 8,921 | 301,720 | 310,641 | |||||||||||
Depreciation and Amortization | 161,157 | 8,007 | 169,164 | |||||||||||
General and Administrative | 3,758,437 | 604,117 | 4,362,554 | |||||||||||
(Loss) from Operations | -3,910,673 | -310,404 | -4,221,077 | |||||||||||
Foreign Currency Gain (Loss) | -9,718 | - | -9,718 | |||||||||||
Loss from the conversion of debt | -44,000 | - | -44,000 | |||||||||||
Interest Income | - | 997 | 997 | |||||||||||
Interest Expense | 51,670 | 13,941 | 65,611 | |||||||||||
(Loss) Before Income Taxes | -4,016,061 | -323,348 | -4,339,409 | |||||||||||
(Provision) For Income Taxes | - | - | - | |||||||||||
Net Loss | $ | -4,016,061 | $ | -323,348 | $ | -4,339,409 | ||||||||
Revenues as shown below represent sales to external customers for each segment. Additions to long-lived assets as presented in the following table represent capital expenditures. Inventories, property and equipment for operating segments are regularly reviewed by management and are therefore provided below. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues | ||||||||||||||
United States | $ | 203,943 | $ | 148,226 | $ | 574,179 | $ | 601,230 | ||||||
Republic of China (Taiwan) | 364,975 | 232,947 | 1,404,127 | 1,551,262 | ||||||||||
$ | 568,918 | $ | 381,173 | $ | 1,978,306 | $ | 2,152,492 | |||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Operating earnings (loss) | ||||||||||||||
United States | $ | -1,433,885 | $ | -713,160 | $ | -3,910,673 | $ | -2,216,260 | ||||||
Republic of China (Taiwan) | -114,752 | -96,449 | -310,404 | -215,043 | ||||||||||
$ | -1,548,637 | $ | -809,609 | $ | -4,221,077 | $ | -2,431,303 | |||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Property and equipment | ||||||||||||||
United States | $ | 438,686 | $ | 580,014 | ||||||||||
Republic of China (Taiwan) | 12,525 | 31,095 | ||||||||||||
$ | 451,211 | $ | 611,109 | |||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Additions to long-lived assets | ||||||||||||||
United States | $ | 86,868 | 223,705 | |||||||||||
Republic of China (Taiwan) | -1,660 | 11,884 | ||||||||||||
$ | 85,208 | 235,589 | ||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Inventory | ||||||||||||||
United States | $ | 51,955 | $ | 810 | ||||||||||
Republic of China (Taiwan) | 156,178 | 106,766 | ||||||||||||
$ | 208,133 | $ | 107,576 | |||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Total Assets | ||||||||||||||
United States | $ | 2,467,126 | $ | 1,898,479 | ||||||||||
Republic of China (Taiwan) | 2,154,036 | 1,924,128 | ||||||||||||
$ | 4,621,162 | $ | 3,822,607 | |||||||||||
Reclassification | ||||||||||||||
Certain amounts in 2012 may have been reclassified to conform to the 2013 presentation. | ||||||||||||||
New Accounting Pronouncements | ||||||||||||||
In March 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-05, Foreign Currency Matters (Topic 830). This ASU resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights)within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. This ASU is the final version of Proposed Accounting Standards Update EITF11Ar—Foreign Currency Matters (Topic 830), which has been deleted. The amendments in this Update are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. For nonpublic entities the amendments in this Update are effective prospectively for the first annual period beginning after December 15, 2014, and interim and annual periods thereafter. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity’s fiscal year of adoption. | ||||||||||||||
In February 2013, FASB issued Accounting Standards Update (ASU) No. 2013-03, Financial Instruments (Topic 825). This ASU clarifies the scope and applicability of a disclosure exemption that resulted from the issuance of Accounting Standards Update No. 2011-04,Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendment clarifies that the requirement to disclose "the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3)" does not apply to nonpublic entities for items that are not measured at fair value in the statement of financial position, but for which fair value is disclosed. This ASU is the final version of Proposed Accounting Standards Update 2013-200—Financial Instruments (Topic 825) which has been deleted. The amendments are effective upon issuance. | ||||||||||||||
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. | ||||||||||||||
The new amendments will require an organization to: | ||||||||||||||
• | Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. | |||||||||||||
• | Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense. | |||||||||||||
The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). A private company is required to meet the reporting requirements of the amended paragraphs about the roll forward of accumulated other comprehensive income for both interim and annual reporting periods. However, private companies are only required to provide the information about the effect of reclassifications on line items of net income for annual reporting periods, not for interim reporting periods. The amendments are effective for reporting periods beginning after December 15, 2012, for public companies and are effective for reporting periods beginning after December 15, 2013, for private companies. Early adoption is permitted. | ||||||||||||||
In January 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the FASB Accounting Standards Codification(TM) (Codification) or subject to a master netting arrangement or similar agreement. The FASB undertook this clarification project in response to concerns expressed by U.S. stakeholders about the standard’s broad definition of financial instruments. After the standard was finalized, companies realized that many contracts have standard commercial provisions that would equate to a master netting arrangement, significantly increasing the cost of compliance at minimal value to financial statement users. An entity is required to apply the amendments in ASU 2013-01 for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the required disclosures retrospectively for all comparative periods presented. The effective date is the same as the effective date of ASU 2011-11. | ||||||||||||||
In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013. | ||||||||||||||
In August 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics. | ||||||||||||||
In July 2012, the FASB has issued Accounting Standards Update (ASU) No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles-Goodwill and Other General Intangibles Other than Goodwill. Under the guidance in this ASU,an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. | ||||||||||||||
SHORTTERM_DEBT
SHORT-TERM DEBT | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Bank Loans Short-term [Text Block] | ' | ||||
NOTE 2 | SHORT-TERM DEBT | ||||
The Company has short term loans with two banks in Asia that bear interest from 3.24% to 5.82% During the third quarter, all short-term bank loans were paid off. | |||||
Note Payable, 10% interest per annum, maturing on December 7, 2013 | $ | 77,000 | |||
Note Payable, 10% interest per annum, maturing on December 20, 2013 | 10,000 | ||||
Total Short-Term Debt | $ | 87,000 | |||
The holder of the $77,000 note is entitled to subscribe for a purchase 7,000 warrant shares at an exercise price of $1.50 per share. The holder of the $10,000 note is entitled to subscribe for a purchase 909 warrant shares at an exercise price of $1.50 per share. | |||||
During the three months ended June 30, 2013, a $50,000 debenture was converted into shares of the Company’s common stock at a price of $1.00 per share. As a result, the Company recorded a loss on conversion of debt totaling $27,500. | |||||
During the three months ended March 31, 2013, a $45,000 note was extinguished, with $15,000 of principal being paid in cash and $30,000 of principal being converted into shares of the Company’s common stock at a price of $1.00. As a result, the Company recorded a loss from conversion of debt totaling $16,500. | |||||
EQUITY
EQUITY | 9 Months Ended | ||
Sep. 30, 2013 | |||
Stockholders' Equity Note [Abstract] | ' | ||
Stockholders' Equity Note Disclosure [Text Block] | ' | ||
NOTE 3 | EQUITY | ||
Preferred Stock | |||
The Company is authorized to issue 100,000,000 shares of $0.00001 par value preferred stock. No shares have been issued, and the rights and privileges of this class of stock have not been defined. | |||
Common Stock | |||
During the nine months ended September 30, 2013, the Company raised $5,459,501 in a private placement of shares ranging from $1.00 to a $1.10 per share. Costs associated with this raise totaled $540,150. | |||
During the nine months ended September 30, 2013, the Company issued 80,000 shares of its common stock to consultants for services. The fair market value of these shares on their respective date of issuances totaled $122,000. As a result, the Company recorded non-cash compensation expense of $122,000. | |||
During the nine months ended September 30, 2013, the Company issued a warrant to purchase 100,000 shares of its common stock at an exercise price of $1.65 per share. The warrant became fully vested at the time of issuance and expires ten years from the date of issuance. Using the Black Scholes pricing model, the warrant was valued at $60,075. As a result, the Company recorded non-cash compensation expense of $60,075. | |||
STOCK_OPTION_PLAN
STOCK OPTION PLAN | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | ||||||||||||||||
NOTE 4 | STOCK OPTION PLAN | ||||||||||||||||
The Company has also granted non-qualified stock options to employees and contractors. All non-qualified options are generally issued with an exercise price equal to the closing price of the Common Stock on the date of the grant. Options may be exercised up to ten years following the date of the grant, with vesting schedules determined by the Company upon grant. Vesting periods range from 100% fully vested upon grant to a range of four to five years. Vested options may be exercised up to three months following date of termination of the relationship. The fair values of options are determined using the Black-Scholes option-pricing model. The estimated fair value of options is recognized as an expense on the straight-line basis over the options’ vesting periods. | |||||||||||||||||
Stock option transactions during the nine months ended September 30, 2013 were as follows: | |||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Weighted - | |||||||||||||||||
Average | |||||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding at Beginning of Year | 5,038,512 | $ | 0.91 | ||||||||||||||
Granted | 160,000 | 1.63 | |||||||||||||||
Exercised | -244,500 | - | |||||||||||||||
Forfeited or Canceled | -155,000 | 1.09 | |||||||||||||||
Outstanding at End of Period | 4,799,012 | 0.93 | |||||||||||||||
Options Exercisable at Period-End | 3,566,628 | 1.25 | |||||||||||||||
Weighted-Average Fair Value of Options Granted During | $ | 0.27 | |||||||||||||||
the Period | |||||||||||||||||
Information with respect to stock options outstanding and exercisable as of September 30, 2013 is as follows: | |||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Number | Weighted - | Number | |||||||||||||||
Outstanding | Average | Weighted - | Exercisable | Weighted - | |||||||||||||
Range of | at | Remaining | Average | At | Average | ||||||||||||
Exercise | Sept. 30, | Contractual | Exercise | Sept. 30, | Exercise | ||||||||||||
Prices | 2013 | Life | Price | 2013 | Price | ||||||||||||
$ 0.10 - $1.80 | 4,799,012 | 8.2 Years | $ | 0.93 | 3,566,628 | $ | 1.25 | ||||||||||
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. | |||||||||||||||||
2013 | |||||||||||||||||
Expected Life | 5 yrs | ||||||||||||||||
Dividend Yield | 0 | % | |||||||||||||||
Expected Volatility | 26.28 | % | |||||||||||||||
Risk-Free Interest Rate | 0.85 | % | |||||||||||||||
Expected volatility for 2013 was estimated by using the Dow Jones U.S. Industry indexes sector classification methodology for industries similar to the Company. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of the options is based on management’s estimate using historical experience. | |||||||||||||||||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Related Party Transactions [Abstract] | ' | ||||
Related Party Transactions Disclosure [Text Block] | ' | ||||
NOTE 5 RELATED PARTY TRANSACTIONS | |||||
On November 19, 2012, the Company entered into a convertible debenture agreement with Robert Gillen for $100,000. Under the original terms of the agreement, Interest is payable at 10% per annum, payable on the maturity date of May 19, 2013. The Company issued warrants to purchase 10,000 shares of the Company Stock, at an exercise price of $ 1.10. The debenture is convertible into shares of Company Common Stock on or before the Maturity Date, at a conversion rate of $1.10 per share. On May 19, 2013, the Company extended the maturity date of the convertible debenture to November 19, 2013. | 100,000 | ||||
Total Due to Related Parties | $ | 100,000 | |||
EARNINGS_LOSS_PER_SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Earnings Per Share [Text Block] | ' | |||||||||||||
NOTE 6 | 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. | ||||||||||||||
Basic EPS is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding. The Company had net losses for the three months and nine months ended September 30, 2013 and 2012, and the effect of including dilutive securities in the earnings per common share would have been anti-dilutive. Accordingly, all options and warrants to purchase common shares (totaling 8,127,581 potential shares at September 30, 2013) were excluded from the calculation of diluted earnings per share for the three months and nine months ended September 30, 2013 and 2012. | ||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | |||||||||||
Ending | Ending | Ending | Ending | |||||||||||
Sept. 30, 2013 | Sept. 30, 2012 | Sept. 30, 2013 | Sept. 30, 2012 | |||||||||||
Basic EPS | ||||||||||||||
Net Loss | $ | -1,573,469 | -834,104 | $ | -4,339,409 | -2,477,583 | ||||||||
Weighted Average Shares | 25,700,296 | 19,541,679 | 24,181,281 | 15,383,548 | ||||||||||
Basic and Diluted Loss Per Share | $ | -0.06 | $ | -0.04 | $ | -0.18 | $ | -0.15 | ||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
NOTE 7 SUBSEQUENT EVENTS | |
In October 2013, the Company sold 100,000 shares of Company Common Stock at a purchase price of $1.10 per share and 20,000 shares at a purchase price of $1.00 in two private placement transactions with one individual and one trust. | |
BASIS_OF_PRESENTATION_AND_SUMM1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Consolidation, Policy [Policy Text Block] | ' | |||||||||||||
Consolidation | ||||||||||||||
Effective April 30, 2011, Iveda Solutions, Inc. (the “Company”) completed its acquisition of Sole Vision Technologies (dba “MegaSys”), a company based in Taiwan. The consolidated financial statements include the accounts of the Company and MegaSys. All intercompany balances and transactions have been eliminated in consolidation. | ||||||||||||||
Liquidity Disclosure [Policy Text Block] | ' | |||||||||||||
Going Concern | ||||||||||||||
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Since inception, the Company has generated an accumulated deficit from operations of approximately $19.3 million at September 30, 2013 and has used approximately $2.8 million in cash from operations through the current nine months ended September 30, 2013. As a result, a risk exists regarding our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty. | ||||||||||||||
A multi-step plan was adopted by management to enable the Company to continue to operate and begin to report operating profits. The highlights of that plan are: | ||||||||||||||
⋅ The Company is seeking additional financing and has engaged an investment bank to serve as placement agent. The financing may be in the form of sales of equity securities, debt convertible into equity securities and non-convertible debt, which may either be secured or unsecured. | ||||||||||||||
⋅ In the third quarter of 2013, the Company launched two new camera lines in collaboration with MegaSys, its Taiwan subsidiary and Industrial Technology Research Institute (ITRI), its nonprofit research and development partner in Taiwan. These products are enablers of the Company’s video hosting services. | ||||||||||||||
⋅ The Company has also recently developed two other standalone services: | ||||||||||||||
o IvedaMobile–a cloud-hosting service that turns any smartphone or tablet into a mobile, cloud video streaming device. This was developed with ITRI. | ||||||||||||||
o IvedaXchange – In collaboration with a technology partner, the Company developed a real-time situational awareness dashboard to enable organizations instant access to vital and filtered information such as emergency situations, location of critical assets, video monitoring, and local news. IvedaXchange is well-suited for law enforcement agencies and schools. | ||||||||||||||
⋅ The Company launched a new website to highlight new products and services with corresponding applications. | ||||||||||||||
⋅ The Company launched a second website allowing for direct web-sales, geared toward the residential and small-to-medium sized businesses. | ||||||||||||||
⋅ The Company intends to continue to participate in industry and vertical tradeshows to launch new products, generate leads, solicit resellers and other sales channels, and identify potential technology partners. | ||||||||||||||
⋅ The Company intends to continue advertising on selected trade magazines and running Google Adwords to generate leads. | ||||||||||||||
⋅ The Company has evaluated its reseller distribution channel and eliminated non-performing components of the channel. | ||||||||||||||
⋅ The Company is in active collaboration with certain telecommunications companies in other countries to resell the Company’s products and services in their respective countries. | ||||||||||||||
Concentration Risk, Credit Risk, Policy [Policy Text Block] | ' | |||||||||||||
Concentrations | ||||||||||||||
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. | ||||||||||||||
Substantially all cash is deposited in two financial institutions, one in the United States and one in Taiwan. At times, amounts on deposit in the United States may be in excess of the FDIC insurance limit. Deposits in Taiwan financial institutions are insured by CDIC (Central Deposit Insurance Corporation) with maximum coverage of NTD 3 million. At times, amounts on deposit in Taiwan may be in excess of the CDIC insurance limit. | ||||||||||||||
Accounts receivable are unsecured, and the Company is at risk to the extent such amount becomes uncollectible. The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. Revenue from three customers represented approximately 59% of total revenues for the nine months ended September 30, 2013, and approximately 17% of total accounts receivable at September 30, 2013. | ||||||||||||||
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | ' | |||||||||||||
Intangible Assets and Goodwill | ||||||||||||||
Intangible assets consist of trademarks and other intangible assets associated with the purchase price allocation of MegaSys. Such assets are being amortized over their estimated useful lives ranging from six months to ten years. Other Intangible Assets are fully amortized as of September 30, 2013. Future amortization of Intangible Assets is as follows: | ||||||||||||||
Trademarks | ||||||||||||||
2013 | $ | 5,000 | ||||||||||||
2014 | 20,000 | |||||||||||||
2015 | 20,000 | |||||||||||||
2016 | 20,000 | |||||||||||||
Thereafter | 86,666 | |||||||||||||
Total | $ | 151,666 | ||||||||||||
Goodwill represents the excess of the purchase price of MegaSys over the net assets acquired. Goodwill is tested annually for impairment or more frequently if indicators of impairment exist. | ||||||||||||||
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' | |||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2013. The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses, convertible notes 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 fair values or they are receivable or payable on demand. | ||||||||||||||
Segment Reporting, Policy [Policy Text Block] | ' | |||||||||||||
Segment Information | ||||||||||||||
The Company conducts operations in various geographic regions outside the United States. The operations and the customer base conducted in the foreign countries are similar to the United States operations. The net revenues and net assets (liabilities) for other significant geographic regions outside the United States during the 9 months ended September 30, 2013 are as follows: | ||||||||||||||
Net Revenues | Net Assets | |||||||||||||
United States | $ | 378,222 | $ | 2,349,594 | ||||||||||
Asia | $ | 1,404,127 | $ | 41,006 | ||||||||||
Mexico | $ | 195,957 | - | |||||||||||
Furthermore, due to operations in various geographic locations, the Company is susceptible to changes in national, regional and local economic conditions, demographic trends, consumer confidence in the economy and discretionary spending priorities that may have a material adverse effect on the Company’s future operations and results. | ||||||||||||||
The Company is required to collect certain taxes and fees from customers on behalf of government agencies and remit these back to the applicable governmental agencies on a periodic basis. These taxes and fees are legal assessments to the customer, for which the Company has a legal obligation to act as a collection agent. Because the Company does not retain these taxes and fees, the Company does not include such amounts in revenue. The Company records a liability when the amounts are collected and relieves the liability when payments are made to the applicable governmental agencies. | ||||||||||||||
The Company operates as two reportable business segments in defined in ASC 280, "Segment Reporting." Each business segment has a chief operating decision maker and management personnel which review their business segment’s performance as it relates to revenue, operating profit and operating expenses. | ||||||||||||||
Three Months | Three Months | Condensed | ||||||||||||
Ended September, 2013 | Ended September 30, 2013 | Consolidated | ||||||||||||
Iveda Solutions, Inc. | MegaSys | Total | ||||||||||||
Revenue | $ | 203,942 | $ | 364,976 | $ | 568,918 | ||||||||
Cost of Revenue | 209,195 | 262,797 | 464,603 | |||||||||||
Gross Profit | -5,253 | 102,179 | 96,926 | |||||||||||
Depreciation and Amort. | 53,181 | 2,634 | 55,815 | |||||||||||
General and Administrative | 1,375,451 | 214,297 | 1,589,748 | |||||||||||
(Loss) from Operations | -1,433,885 | -114,752 | -1,548,637 | |||||||||||
Foreign Currency Gain (Loss) | -8,611 | - | -8,611 | |||||||||||
Loss from the conversion of debt | - | - | - | |||||||||||
Interest Income | - | - | - | |||||||||||
Interest Expense | 11,676 | 4,545 | 16,221 | |||||||||||
(Loss) Before Income Taxes | -1,454,172 | -119,297 | -1,573,469 | |||||||||||
(Provision) For Income Taxes | - | - | - | |||||||||||
Net Loss | $ | -1,454,172 | $ | -119,297 | $ | -1,573,469 | ||||||||
Nine Months | ||||||||||||||
Ended September 30, | Nine Months | |||||||||||||
2013 | Ended September 30, | Condensed | ||||||||||||
Iveda Solutions, | 2013 | Consolidated | ||||||||||||
Inc. | MegaSys | Total | ||||||||||||
Revenue | $ | 574,179 | $ | 1,404,127 | $ | 1,978,306 | ||||||||
Cost of Revenue | 565,258 | 1,102,407 | 1,667,665 | |||||||||||
Gross Profit | 8,921 | 301,720 | 310,641 | |||||||||||
Depreciation and Amortization | 161,157 | 8,007 | 169,164 | |||||||||||
General and Administrative | 3,758,437 | 604,117 | 4,362,554 | |||||||||||
(Loss) from Operations | -3,910,673 | -310,404 | -4,221,077 | |||||||||||
Foreign Currency Gain (Loss) | -9,718 | - | -9,718 | |||||||||||
Loss from the conversion of debt | -44,000 | - | -44,000 | |||||||||||
Interest Income | - | 997 | 997 | |||||||||||
Interest Expense | 51,670 | 13,941 | 65,611 | |||||||||||
(Loss) Before Income Taxes | -4,016,061 | -323,348 | -4,339,409 | |||||||||||
(Provision) For Income Taxes | - | - | - | |||||||||||
Net Loss | $ | -4,016,061 | $ | -323,348 | $ | -4,339,409 | ||||||||
Revenues as shown below represent sales to external customers for each segment. Additions to long-lived assets as presented in the following table represent capital expenditures. Inventories, property and equipment for operating segments are regularly reviewed by management and are therefore provided below. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues | ||||||||||||||
United States | $ | 203,943 | $ | 148,226 | $ | 574,179 | $ | 601,230 | ||||||
Republic of China (Taiwan) | 364,975 | 232,947 | 1,404,127 | 1,551,262 | ||||||||||
$ | 568,918 | $ | 381,173 | $ | 1,978,306 | $ | 2,152,492 | |||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Operating earnings (loss) | ||||||||||||||
United States | $ | -1,433,885 | $ | -713,160 | $ | -3,910,673 | $ | -2,216,260 | ||||||
Republic of China (Taiwan) | -114,752 | -96,449 | -310,404 | -215,043 | ||||||||||
$ | -1,548,637 | $ | -809,609 | $ | -4,221,077 | $ | -2,431,303 | |||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Property and equipment | ||||||||||||||
United States | $ | 438,686 | $ | 580,014 | ||||||||||
Republic of China (Taiwan) | 12,525 | 31,095 | ||||||||||||
$ | 451,211 | $ | 611,109 | |||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Additions to long-lived assets | ||||||||||||||
United States | $ | 86,868 | 223,705 | |||||||||||
Republic of China (Taiwan) | -1,660 | 11,884 | ||||||||||||
$ | 85,208 | 235,589 | ||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Inventory | ||||||||||||||
United States | $ | 51,955 | $ | 810 | ||||||||||
Republic of China (Taiwan) | 156,178 | 106,766 | ||||||||||||
$ | 208,133 | $ | 107,576 | |||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Total Assets | ||||||||||||||
United States | $ | 2,467,126 | $ | 1,898,479 | ||||||||||
Republic of China (Taiwan) | 2,154,036 | 1,924,128 | ||||||||||||
$ | 4,621,162 | $ | 3,822,607 | |||||||||||
Reclassification, Policy [Policy Text Block] | ' | |||||||||||||
Reclassification | ||||||||||||||
Certain amounts in 2012 may have been reclassified to conform to the 2013 presentation. | ||||||||||||||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |||||||||||||
New Accounting Pronouncements | ||||||||||||||
In March 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-05, Foreign Currency Matters (Topic 830). This ASU resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights)within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. This ASU is the final version of Proposed Accounting Standards Update EITF11Ar—Foreign Currency Matters (Topic 830), which has been deleted. The amendments in this Update are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. For nonpublic entities the amendments in this Update are effective prospectively for the first annual period beginning after December 15, 2014, and interim and annual periods thereafter. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity’s fiscal year of adoption. | ||||||||||||||
In February 2013, FASB issued Accounting Standards Update (ASU) No. 2013-03, Financial Instruments (Topic 825). This ASU clarifies the scope and applicability of a disclosure exemption that resulted from the issuance of Accounting Standards Update No. 2011-04,Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendment clarifies that the requirement to disclose "the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3)" does not apply to nonpublic entities for items that are not measured at fair value in the statement of financial position, but for which fair value is disclosed. This ASU is the final version of Proposed Accounting Standards Update 2013-200—Financial Instruments (Topic 825) which has been deleted. The amendments are effective upon issuance. | ||||||||||||||
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. | ||||||||||||||
The new amendments will require an organization to: | ||||||||||||||
• | Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. | |||||||||||||
• | Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense. | |||||||||||||
The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). A private company is required to meet the reporting requirements of the amended paragraphs about the roll forward of accumulated other comprehensive income for both interim and annual reporting periods. However, private companies are only required to provide the information about the effect of reclassifications on line items of net income for annual reporting periods, not for interim reporting periods. The amendments are effective for reporting periods beginning after December 15, 2012, for public companies and are effective for reporting periods beginning after December 15, 2013, for private companies. Early adoption is permitted. | ||||||||||||||
In January 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the FASB Accounting Standards Codification(TM) (Codification) or subject to a master netting arrangement or similar agreement. The FASB undertook this clarification project in response to concerns expressed by U.S. stakeholders about the standard’s broad definition of financial instruments. After the standard was finalized, companies realized that many contracts have standard commercial provisions that would equate to a master netting arrangement, significantly increasing the cost of compliance at minimal value to financial statement users. An entity is required to apply the amendments in ASU 2013-01 for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the required disclosures retrospectively for all comparative periods presented. The effective date is the same as the effective date of ASU 2011-11. | ||||||||||||||
In October 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-04, Technical Corrections and Improvements. This ASU make technical corrections, clarifications, and limited-scope improvements to various Topics throughout the Codification. The amendments in this ASU that will not have transition guidance will be effective upon issuance for both public entities and nonpublic entities. For public entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2012. For nonpublic entities, the amendments that are subject to the transition guidance will be effective for fiscal periods beginning after December 15, 2013. | ||||||||||||||
In August 2012, FASB has issued Accounting Standards Update (ASU) No. 2012-03, Technical Amendments and Corrections to SEC Sections. This ASU amends various SEC paragraphs pursuant to SAB 114, SEC Release No. 33-9250, and ASU 2010-22, which amend or rescind portions of certain SAB Topics. | ||||||||||||||
In July 2012, the FASB has issued Accounting Standards Update (ASU) No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles-Goodwill and Other General Intangibles Other than Goodwill. Under the guidance in this ASU,an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. | ||||||||||||||
BASIS_OF_PRESENTATION_AND_SUMM2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |||||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | ' | |||||||||||||
Future amortization of Intangible Assets is as follows: | ||||||||||||||
Trademarks | ||||||||||||||
2013 | $ | 5,000 | ||||||||||||
2014 | 20,000 | |||||||||||||
2015 | 20,000 | |||||||||||||
2016 | 20,000 | |||||||||||||
Thereafter | 86,666 | |||||||||||||
Total | $ | 151,666 | ||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | |||||||||||||
The net revenues and net assets (liabilities) for other significant geographic regions outside the United States during the 9 months ended September 30, 2013 are as follows: | ||||||||||||||
Net Revenues | Net Assets | |||||||||||||
United States | $ | 378,222 | $ | 2,349,594 | ||||||||||
Asia | $ | 1,404,127 | $ | 41,006 | ||||||||||
Mexico | $ | 195,957 | - | |||||||||||
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | ' | |||||||||||||
The Company operates as two reportable business segments in defined in ASC 280, "Segment Reporting." Each business segment has a chief operating decision maker and management personnel which review their business segment’s performance as it relates to revenue, operating profit and operating expenses. | ||||||||||||||
Three Months | Three Months | Condensed | ||||||||||||
Ended September, 2013 | Ended September 30, 2013 | Consolidated | ||||||||||||
Iveda Solutions, Inc. | MegaSys | Total | ||||||||||||
Revenue | $ | 203,942 | $ | 364,976 | $ | 568,918 | ||||||||
Cost of Revenue | 209,195 | 262,797 | 464,603 | |||||||||||
Gross Profit | -5,253 | 102,179 | 96,926 | |||||||||||
Depreciation and Amort. | 53,181 | 2,634 | 55,815 | |||||||||||
General and Administrative | 1,375,451 | 214,297 | 1,589,748 | |||||||||||
(Loss) from Operations | -1,433,885 | -114,752 | -1,548,637 | |||||||||||
Foreign Currency Gain (Loss) | -8,611 | - | -8,611 | |||||||||||
Loss from the conversion of debt | - | - | - | |||||||||||
Interest Income | - | - | - | |||||||||||
Interest Expense | 11,676 | 4,545 | 16,221 | |||||||||||
(Loss) Before Income Taxes | -1,454,172 | -119,297 | -1,573,469 | |||||||||||
(Provision) For Income Taxes | - | - | - | |||||||||||
Net Loss | $ | -1,454,172 | $ | -119,297 | $ | -1,573,469 | ||||||||
Nine Months | ||||||||||||||
Ended September 30, | Nine Months | |||||||||||||
2013 | Ended September 30, | Condensed | ||||||||||||
Iveda Solutions, | 2013 | Consolidated | ||||||||||||
Inc. | MegaSys | Total | ||||||||||||
Revenue | $ | 574,179 | $ | 1,404,127 | $ | 1,978,306 | ||||||||
Cost of Revenue | 565,258 | 1,102,407 | 1,667,665 | |||||||||||
Gross Profit | 8,921 | 301,720 | 310,641 | |||||||||||
Depreciation and Amortization | 161,157 | 8,007 | 169,164 | |||||||||||
General and Administrative | 3,758,437 | 604,117 | 4,362,554 | |||||||||||
(Loss) from Operations | -3,910,673 | -310,404 | -4,221,077 | |||||||||||
Foreign Currency Gain (Loss) | -9,718 | - | -9,718 | |||||||||||
Loss from the conversion of debt | -44,000 | - | -44,000 | |||||||||||
Interest Income | - | 997 | 997 | |||||||||||
Interest Expense | 51,670 | 13,941 | 65,611 | |||||||||||
(Loss) Before Income Taxes | -4,016,061 | -323,348 | -4,339,409 | |||||||||||
(Provision) For Income Taxes | - | - | - | |||||||||||
Net Loss | $ | -4,016,061 | $ | -323,348 | $ | -4,339,409 | ||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | ' | |||||||||||||
Revenues as shown below represent sales to external customers for each segment. Additions to long-lived assets as presented in the following table represent capital expenditures. Inventories, property and equipment for operating segments are regularly reviewed by management and are therefore provided below. | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Revenues | ||||||||||||||
United States | $ | 203,943 | $ | 148,226 | $ | 574,179 | $ | 601,230 | ||||||
Republic of China (Taiwan) | 364,975 | 232,947 | 1,404,127 | 1,551,262 | ||||||||||
$ | 568,918 | $ | 381,173 | $ | 1,978,306 | $ | 2,152,492 | |||||||
Three Months Ended | Nine Months Ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Operating earnings (loss) | ||||||||||||||
United States | $ | -1,433,885 | $ | -713,160 | $ | -3,910,673 | $ | -2,216,260 | ||||||
Republic of China (Taiwan) | -114,752 | -96,449 | -310,404 | -215,043 | ||||||||||
$ | -1,548,637 | $ | -809,609 | $ | -4,221,077 | $ | -2,431,303 | |||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Property and equipment | ||||||||||||||
United States | $ | 438,686 | $ | 580,014 | ||||||||||
Republic of China (Taiwan) | 12,525 | 31,095 | ||||||||||||
$ | 451,211 | $ | 611,109 | |||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Additions to long-lived assets | ||||||||||||||
United States | $ | 86,868 | 223,705 | |||||||||||
Republic of China (Taiwan) | -1,660 | 11,884 | ||||||||||||
$ | 85,208 | 235,589 | ||||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Inventory | ||||||||||||||
United States | $ | 51,955 | $ | 810 | ||||||||||
Republic of China (Taiwan) | 156,178 | 106,766 | ||||||||||||
$ | 208,133 | $ | 107,576 | |||||||||||
Nine Months Ended | ||||||||||||||
September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Total Assets | ||||||||||||||
United States | $ | 2,467,126 | $ | 1,898,479 | ||||||||||
Republic of China (Taiwan) | 2,154,036 | 1,924,128 | ||||||||||||
$ | 4,621,162 | $ | 3,822,607 | |||||||||||
SHORTTERM_DEBT_Tables
SHORT-TERM DEBT (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Debt Disclosure [Abstract] | ' | ||||
Schedule of Short-term Debt [Table Text Block] | ' | ||||
The Company has short term loans with two banks in Asia that bear interest from 3.24% to 5.82% During the third quarter, all short-term bank loans were paid off. | |||||
Note Payable, 10% interest per annum, maturing on December 7, 2013 | $ | 77,000 | |||
Note Payable, 10% interest per annum, maturing on December 20, 2013 | 10,000 | ||||
Total Short-Term Debt | $ | 87,000 | |||
STOCK_OPTION_PLAN_Tables
STOCK OPTION PLAN (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | ' | ||||||||||||||||
Stock option transactions during the nine months ended September 30, 2013 were as follows: | |||||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||
Weighted - | |||||||||||||||||
Average | |||||||||||||||||
Shares | Exercise Price | ||||||||||||||||
Outstanding at Beginning of Year | 5,038,512 | $ | 0.91 | ||||||||||||||
Granted | 160,000 | 1.63 | |||||||||||||||
Exercised | -244,500 | - | |||||||||||||||
Forfeited or Canceled | -155,000 | 1.09 | |||||||||||||||
Outstanding at End of Period | 4,799,012 | 0.93 | |||||||||||||||
Options Exercisable at Period-End | 3,566,628 | 1.25 | |||||||||||||||
Weighted-Average Fair Value of Options Granted During | $ | 0.27 | |||||||||||||||
the Period | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | ' | ||||||||||||||||
Information with respect to stock options outstanding and exercisable as of September 30, 2013 is as follows: | |||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Number | Weighted - | Number | |||||||||||||||
Outstanding | Average | Weighted - | Exercisable | Weighted - | |||||||||||||
Range of | at | Remaining | Average | At | Average | ||||||||||||
Exercise | Sept. 30, | Contractual | Exercise | Sept. 30, | Exercise | ||||||||||||
Prices | 2013 | Life | Price | 2013 | Price | ||||||||||||
$ 0.10 - $1.80 | 4,799,012 | 8.2 Years | $ | 0.93 | 3,566,628 | $ | 1.25 | ||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | ||||||||||||||||
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. | |||||||||||||||||
2013 | |||||||||||||||||
Expected Life | 5 yrs | ||||||||||||||||
Dividend Yield | 0 | % | |||||||||||||||
Expected Volatility | 26.28 | % | |||||||||||||||
Risk-Free Interest Rate | 0.85 | % | |||||||||||||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Related Party Transactions [Abstract] | ' | ||||
Schedule of Related Party Transactions [Table Text Block] | ' | ||||
On November 19, 2012, the Company entered into a convertible debenture agreement with Robert Gillen for $100,000. Under the original terms of the agreement, Interest is payable at 10% per annum, payable on the maturity date of May 19, 2013. The Company issued warrants to purchase 10,000 shares of the Company Stock, at an exercise price of $ 1.10. The debenture is convertible into shares of Company Common Stock on or before the Maturity Date, at a conversion rate of $1.10 per share. On May 19, 2013, the Company extended the maturity date of the convertible debenture to November 19, 2013. | 100,000 | ||||
Total Due to Related Parties | $ | 100,000 | |||
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | |||||||||||||
The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations. | ||||||||||||||
Three Months | Three Months | Nine Months | Nine Months | |||||||||||
Ending | Ending | Ending | Ending | |||||||||||
Sept. 30, 2013 | Sept. 30, 2012 | Sept. 30, 2013 | Sept. 30, 2012 | |||||||||||
Basic EPS | ||||||||||||||
Net Loss | $ | -1,573,469 | -834,104 | $ | -4,339,409 | -2,477,583 | ||||||||
Weighted Average Shares | 25,700,296 | 19,541,679 | 24,181,281 | 15,383,548 | ||||||||||
Basic and Diluted Loss Per Share | $ | -0.06 | $ | -0.04 | $ | -0.18 | $ | -0.15 | ||||||
BASIS_OF_PRESENTATION_AND_SUMM3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Trademarks [Member], USD $) | Sep. 30, 2013 |
Trademarks [Member] | ' |
2013 | $5,000 |
2014 | 20,000 |
2015 | 20,000 |
2016 | 20,000 |
Thereafter | 86,666 |
Total | $151,666 |
BASIS_OF_PRESENTATION_AND_SUMM4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net Revenues | $149,578 | $162,970 | $476,410 | $811,591 |
United States [Member] | ' | ' | ' | ' |
Net Revenues | ' | ' | 378,222 | ' |
Net Assets | 2,349,594 | ' | 2,349,594 | ' |
Asia [Member] | ' | ' | ' | ' |
Net Revenues | ' | ' | 1,404,127 | ' |
Net Assets | 41,006 | ' | 41,006 | ' |
Mexico [Member] | ' | ' | ' | ' |
Net Revenues | ' | ' | 195,957 | ' |
Net Assets | $0 | ' | $0 | ' |
BASIS_OF_PRESENTATION_AND_SUMM5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue | $568,918 | $381,173 | $1,978,306 | $2,152,492 |
Cost of Revenue | 471,992 | 322,824 | 1,667,665 | 1,729,001 |
Gross Profit | 96,926 | 58,349 | 310,641 | 423,491 |
Depreciation and Amort. | ' | ' | 169,164 | 181,456 |
(Loss) from Operations | -1,548,637 | -809,609 | -4,221,077 | -2,431,303 |
Foreign Currency Gain (Loss) | -8,611 | -87 | -9,718 | -87 |
Loss from the conversion of debt | 0 | 0 | -44,000 | 0 |
Interest Expense | -16,221 | -24,414 | -65,611 | -46,738 |
(Loss) Before Income Taxes | -1,573,469 | -834,104 | -4,339,409 | -2,477,583 |
(Provision) For Income Taxes | 0 | 0 | 0 | 0 |
Net Loss | -1,573,469 | -834,104 | -4,339,409 | -2,477,583 |
Iveda Solutions Inc [Member] | ' | ' | ' | ' |
Revenue | 203,942 | ' | 574,179 | ' |
Cost of Revenue | 209,195 | ' | 565,258 | ' |
Gross Profit | -5,253 | ' | 8,921 | ' |
Depreciation and Amort. | 53,181 | ' | 161,157 | ' |
General and Administrative | 1,375,451 | ' | 3,758,437 | ' |
(Loss) from Operations | -1,433,885 | ' | -3,910,673 | ' |
Foreign Currency Gain (Loss) | -8,611 | ' | -9,718 | ' |
Loss from the conversion of debt | 0 | ' | -44,000 | ' |
Interest Income | 0 | ' | 0 | ' |
Interest Expense | 11,676 | ' | 51,670 | ' |
(Loss) Before Income Taxes | -1,454,172 | ' | -4,016,061 | ' |
(Provision) For Income Taxes | 0 | ' | 0 | ' |
Net Loss | -1,454,172 | ' | -4,016,061 | ' |
Megasys [Member] | ' | ' | ' | ' |
Revenue | 364,976 | ' | 1,404,127 | ' |
Cost of Revenue | 262,797 | ' | 1,102,407 | ' |
Gross Profit | 102,179 | ' | 301,720 | ' |
Depreciation and Amort. | 2,634 | ' | 8,007 | ' |
General and Administrative | 214,297 | ' | 604,117 | ' |
(Loss) from Operations | -114,752 | ' | -310,404 | ' |
Foreign Currency Gain (Loss) | 0 | ' | 0 | ' |
Loss from the conversion of debt | 0 | ' | 0 | ' |
Interest Income | 0 | ' | 997 | ' |
Interest Expense | 4,545 | ' | 13,941 | ' |
(Loss) Before Income Taxes | -119,297 | ' | -323,348 | ' |
(Provision) For Income Taxes | 0 | ' | 0 | ' |
Net Loss | -119,297 | ' | -323,348 | ' |
Condensed Consolidated [Memeber] | ' | ' | ' | ' |
Revenue | 568,918 | ' | 1,978,306 | ' |
Cost of Revenue | 464,603 | ' | 1,667,665 | ' |
Gross Profit | 96,926 | ' | 310,641 | ' |
Depreciation and Amort. | 55,815 | ' | 169,164 | ' |
General and Administrative | 1,589,748 | ' | 4,362,554 | ' |
(Loss) from Operations | -1,548,637 | ' | -4,221,077 | ' |
Foreign Currency Gain (Loss) | -8,611 | ' | -9,718 | ' |
Loss from the conversion of debt | 0 | ' | -44,000 | ' |
Interest Income | 0 | ' | 997 | ' |
Interest Expense | 16,221 | ' | 65,611 | ' |
(Loss) Before Income Taxes | -1,573,469 | ' | -4,339,409 | ' |
(Provision) For Income Taxes | 0 | ' | 0 | ' |
Net Loss | ($1,573,469) | ' | ($4,339,409) | ' |
BASIS_OF_PRESENTATION_AND_SUMM6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Revenues | $568,918 | $381,173 | $1,978,306 | $2,152,492 | ' |
Operating earnings (loss) | -1,548,637 | -809,609 | -4,221,077 | -2,431,303 | ' |
Property and equipment | 451,211 | 611,109 | 451,211 | 611,109 | 516,981 |
Additions to long-lived assets | ' | ' | 85,208 | 235,589 | ' |
Inventory | 208,133 | 107,576 | 208,133 | 107,576 | ' |
Total Assets | 4,621,162 | 3,822,607 | 4,621,162 | 3,822,607 | 4,919,484 |
United States [Member] | ' | ' | ' | ' | ' |
Revenues | 203,943 | 148,226 | 574,179 | 601,230 | ' |
Operating earnings (loss) | -1,433,885 | -713,160 | -3,910,673 | -2,216,260 | ' |
Property and equipment | 438,686 | 580,014 | 438,686 | 580,014 | ' |
Additions to long-lived assets | ' | ' | 86,868 | 223,705 | ' |
Inventory | 51,955 | 810 | 51,955 | 810 | ' |
Total Assets | 2,467,126 | 1,898,479 | 2,467,126 | 1,898,479 | ' |
Republic of China (Taiwan) [Member] | ' | ' | ' | ' | ' |
Revenues | 364,975 | 232,947 | 1,404,127 | 1,551,262 | ' |
Operating earnings (loss) | -114,752 | -96,449 | -310,404 | -215,043 | ' |
Property and equipment | 12,525 | 31,095 | 12,525 | 31,095 | ' |
Additions to long-lived assets | ' | ' | -1,660 | 11,884 | ' |
Inventory | 156,178 | 106,766 | 156,178 | 106,766 | ' |
Total Assets | $2,154,036 | $1,924,128 | $2,154,036 | $1,924,128 | ' |
BASIS_OF_PRESENTATION_AND_SUMM7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Accumulated Deficit | $19,339,485 | ' | $15,000,076 |
Net Cash Used in Operating Activities | 2,835,549 | 2,224,616 | ' |
Accounting Standards Update 2012-02 [Member] | ' | ' | ' |
New Accounting Pronouncement or Change in Accounting Principle, Description | 'The FASB has issued Accounting Standards Update (ASU) No. 2012-02, Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. If, after assessing the totality of events and circumstances, an entity concludes that it is not more likely than not that the indefinite-lived intangible asset is impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the indefinite-lived intangible asset and perform the quantitative impairment test by comparing the fair value with the carrying amount in accordance with Codification Subtopic 350-30, Intangibles-Goodwill and Other General Intangibles Other than Goodwill. Under the guidance in this ASU,an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. An entity will be able to resume performing the qualitative assessment in any subsequent period. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity's financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. | ' | ' |
Customer Three [Member] | ' | ' | ' |
Concentration Risk Customer Percentage | 59.00% | ' | ' |
Accounts Receivable [Member] | ' | ' | ' |
Concentration Risk Customer Percentage | 17.00% | ' | ' |
Minimum [Member] | ' | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '6 months | ' | ' |
Maximum [Member] | ' | ' | ' |
Cash CDIC Insured Amount | $3,000,000 | ' | ' |
Finite-Lived Intangible Asset, Useful Life | '10 years | ' | ' |
SHORTTERM_DEBT_Details
SHORT-TERM DEBT (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Total Short-Term Debt | $87,000 | $802,122 |
Note Payable, 10% interest per annum, maturing on December 7, 2013 [Member] | ' | ' |
Notes Payable | 77,000 | ' |
Note Payable, 10% interest per annum, maturing on December 20, 2013 [Member] | ' | ' |
Notes Payable | $10,000 | ' |
SHORTTERM_DEBT_Details_Textual
SHORT-TERM DEBT (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
Maximum [Member] | Minimum [Member] | Note Payable, 10% interest per annum, maturing on December 7, 2013 [Member] | Note Payable, 10% interest per annum, maturing on December 20, 2013 [Member] | |||
Due in April and September of 2013 [Member] | Due in April and September of 2013 [Member] | |||||
Short-term Debt, Percentage Bearing Fixed Interest Rate | ' | ' | 5.82% | 3.24% | 10.00% | 10.00% |
Debt Instrument, Maturity Date | ' | ' | ' | ' | 7-Dec-13 | 20-Dec-13 |
Purchase of Warrant | ' | ' | ' | ' | 7,000 | 909 |
Warrant Exercise Price | ' | ' | ' | ' | $1.50 | $1.50 |
Extinguishment of Debt, Amount | ' | $45,000 | ' | ' | ' | ' |
Payments of Debt Extinguishment Costs | ' | 15,000 | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Amount | 50,000 | 30,000 | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | $1 | $1 | ' | ' | ' | ' |
Gain Loss On Conversion Of Debt | $27,500 | $16,500 | ' | ' | ' | ' |
EQUITY_Details_Textual
EQUITY (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Preferred Stock, Shares Authorized (in shares) | 100,000,000 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $0.00 |
Proceeds from Issuance of Private Placement | $5,459,501 |
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs (in dollars) | 540,150 |
Maximum [Member] | ' |
Stock Issued During Period, Price Per Share (in dollars per share) | $1.10 |
Minimum [Member] | ' |
Stock Issued During Period, Price Per Share (in dollars per share) | $1 |
Common Stock [Member] | ' |
Stock Issued During Period, Shares, Issued for Services | 80,000 |
Stock Issued During Period, Value, Issued for Services | 122,000 |
Allocated Share-based Compensation Expense | 122,000 |
Warrant [Member] | ' |
Allocated Share-based Compensation Expense | 60,075 |
Warrants To Purchase Common Stock | 100,000 |
Investment Warrants, Exercise Price | $1.65 |
Investment Warrants Expiration Period | '10 years |
Stock and Warrants Issued During Period, Value, Preferred Stock and Warrants | $60,075 |
STOCK_OPTION_PLAN_Details
STOCK OPTION PLAN (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Shares, Outstanding at Beginning of Year | 5,038,512 |
Shares, Granted | 160,000 |
Shares, Exercised | -244,500 |
Shares, Forfeited or Canceled | -155,000 |
Shares, Outstanding at End of Period | 4,799,012 |
Shares, Options Exercisable at Period-End | 3,566,628 |
Weighted-Average Fair Value of Options Granted During the Period | $0.27 |
Weighted - Average Exercise Price, Outstanding at Beginning of Year | $0.91 |
Weighted - Average Exercise Price, Granted | $1.63 |
Weighted - Average Exercise Price, Exercised | $0 |
Weighted - Average Exercise Price, Forfeited or Canceled | $1.09 |
Weighted - Average Exercise Price, Outstanding at End of Period | $0.93 |
Weighted - Average Exercise Price, Options Exercisable at Period-End | $1.25 |
STOCK_OPTION_PLAN_Details_1
STOCK OPTION PLAN (Details 1) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | |
Range of Exercise Prices (Minimum) (in dollars per share) | $0.10 | ' |
Range of Exercise Prices (Maximum) (in dollars per share) | $1.80 | ' |
Number of Options, Outstanding at September 30, 2013 (in shares) | 4,799,012 | 5,038,512 |
Weighted - Average Remaining Contractual Life (in years) | '8 years 2 months 12 days | ' |
Options Outstanding, Weighted -Average Exercise Price (in dollars per share) | $0.93 | $0.91 |
Number of Options, Exercisable at September 30, 2013 (in shares) | 3,566,628 | ' |
Options Exercisable, Weighted - Average Exercise Price (in dollars per share) | $1.25 | ' |
STOCK_OPTION_PLAN_Details_2
STOCK OPTION PLAN (Details 2) | 9 Months Ended |
Sep. 30, 2013 | |
Expected Life | '5 years |
Dividend Yield | 0.00% |
Expected Volatility | 26.28% |
Risk-Free Interest Rate | 0.85% |
STOCK_OPTION_PLAN_Details_Text
STOCK OPTION PLAN (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Defined Contribution Plan, Employers Matching Contribution, Annual Vesting Percentage | 100.00% |
Minimum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '4 years |
Maximum [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '5 years |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | Sep. 30, 2013 |
Due to Related Parties | $100,000 |
Convertible debenture agreement with Robert Gillen [Member] | ' |
Due to Related Parties | $100,000 |
RELATED_PARTY_TRANSACTIONS_Det1
RELATED PARTY TRANSACTIONS (Details Textual) (USD $) | Jun. 30, 2013 | Mar. 31, 2013 | 19-May-13 | Nov. 19, 2012 |
Debt Agreement 2 [Member] | Debt Agreement 2 [Member] | |||
Debt Instrument, Face Amount | ' | ' | ' | $100,000 |
Debt Instrument, Interest Rate at Period End | ' | ' | ' | 10.00% |
Debt Instrument, Maturity Date | ' | ' | 19-Nov-13 | 19-May-13 |
Issuance of Warrants to Purchase Common Stock | ' | ' | ' | 10,000 |
Warrants Exercise Price | ' | ' | ' | $1.10 |
Debt Instrument, Convertible, Conversion Price | $1 | $1 | ' | $1.10 |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS (LOSS) PER SHARE (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Basic EPS | ' | ' | ' | ' |
Net Loss | ($1,573,469) | ($834,104) | ($4,339,409) | ($2,477,583) |
Weighted Average Shares (in shares) | 25,700,296 | 19,541,679 | 24,181,281 | 15,383,548 |
Basic and Diluted Loss Per Share (in dollars per share) | ($0.06) | ($0.04) | ($0.18) | ($0.15) |
EARNINGS_LOSS_PER_SHARE_Detail1
EARNINGS (LOSS) PER SHARE (Details Textual) | 9 Months Ended |
Sep. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,127,581 |
SUBSEQUENT_EVENTS_Details_Text
SUBSEQUENT EVENTS (Details Textual) (Subsequent Event [Member]) | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Event [Member] | ' |
Subsequent Event, Description | 'In October 2013, the Company sold 100,000 shares of Company Common Stock at a purchase price of $1.10 per share and 20,000 shares at a purchase price of $1.00 in two private placement transactions with one individual and one trust. |