Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 11, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | Iveda Solutions, Inc. | |
Entity Central Index Key | 1,397,183 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | IVDA | |
Entity Common Stock, Shares Outstanding | 27,451,690 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and Cash Equivalents | $ 684,554 | $ 87,900 |
Restricted Cash | 539,187 | 979,095 |
Accounts Receivable, Net | 1,295,150 | 358,804 |
Inventory, Net | 420,823 | 387,918 |
Other Current Assets | 567,503 | 647,659 |
Total Current Assets | 3,507,217 | 2,461,376 |
PROPERTY AND EQUIPMENT, NET | 365,693 | 532,512 |
OTHER ASSETS | ||
Intangible Assets, Net | 116,666 | 126,666 |
Other Assets | 212,444 | 364,320 |
Total Other Assets | 329,110 | 490,986 |
Total Assets | 4,202,020 | 3,484,874 |
CURRENT LIABILITIES | ||
Accounts and Other Payables | 2,224,650 | 2,166,246 |
Due to Related Parties | 430,000 | 575,000 |
Short Term Debt | 1,036,713 | 1,080,500 |
Derivative Liability | 69,418 | 112,009 |
Current Portion of Long-Term Debt | 0 | 34,610 |
Total Current Liabilities | 3,760,781 | 3,968,365 |
LONG-TERM DIVIDENDS PAYABLE | 463,072 | 272,901 |
STOCKHOLDERS' EQUITY | ||
Common Stock, $0.00001 par value; 100,000,000 shares authorized; 27,451,690 and 27,308,357 shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively | 275 | 273 |
Additional Paid-In Capital | 30,017,724 | 27,261,762 |
Accumulated Comprehensive Loss | (33,519) | (35,615) |
Less Notes Receivable from Stockholder | (492,194) | (492,194) |
Accumulated Deficit | (29,514,159) | (27,490,658) |
Total Stockholders' Equity (Deficit) | (21,833) | (756,392) |
Total Liabilities and Stockholders' Equity | 4,202,020 | 3,484,874 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock Value | 40 | 40 |
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Preferred Stock Value | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,451,690 | 27,308,357 |
Common stock, shares outstanding | 27,451,690 | 27,308,357 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 4,003,592 | 4,003,592 |
Preferred Stock, Shares Outstanding | 4,003,592 | 4,003,592 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 500 | 500 |
Preferred Stock, Shares Issued | 302.5 | 0 |
Preferred Stock, Shares Outstanding | 302.5 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
REVENUE | ||||
Equipment Sales | $ 726,695 | $ 191,705 | $ 1,141,218 | $ 402,016 |
Service Revenue | 46,911 | 143,837 | 145,251 | 302,638 |
Other Revenue | 1,955 | 15,720 | 14,915 | 21,472 |
TOTAL REVENUE | 775,561 | 351,262 | 1,301,384 | 726,126 |
COST OF REVENUE | 634,857 | 313,867 | 993,552 | 524,401 |
GROSS PROFIT | 140,704 | 37,395 | 307,832 | 201,725 |
OPERATING EXPENSES | 967,788 | 1,531,084 | 1,983,727 | 3,058,814 |
LOSS FROM OPERATIONS | (827,084) | (1,493,689) | (1,675,895) | (2,857,089) |
OTHER INCOME (EXPENSE) | ||||
Foreign Currency Gain | 4,683 | 8,475 | 9,126 | 10,709 |
Gain on Derivatives and Debt Conversion | 5,659 | 30,401 | 42,591 | 42,001 |
Loss on Disposal of Assets | (29,454) | 0 | (29,454) | 0 |
Interest Income | 7,594 | 1,874 | 13,677 | 1,877 |
Interest Expense | (28,894) | (119,949) | (66,925) | (175,953) |
Total Other Income (Expense) | (40,412) | (79,199) | (30,985) | (121,366) |
LOSS BEFORE INCOME TAXES | (867,496) | (1,572,888) | (1,706,880) | (2,978,455) |
(PROVISION) FOR INCOME TAXES | (12,853) | (15,879) | (12,853) | (15,879) |
NET LOSS | $ (880,349) | $ (1,588,767) | $ (1,719,733) | $ (2,994,334) |
BASIC AND DILUTED LOSS PER SHARE (in dollars per share) | $ (0.03) | $ (0.06) | $ (0.06) | $ (0.11) |
WEIGHTED AVERAGE S HARES (in shares) | 27,380,701 | 26,849,456 | 27,344,729 | 26,814,103 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Net Loss | $ (880,349) | $ (1,588,767) | $ (1,719,733) | $ (2,994,334) |
Other Comprehensive Loss | ||||
Change in Equity Adjustment from Foreign Currency Translation, Net of Tax | 565 | 1,834 | 2,096 | 33 |
Comprehensive Loss | $ (879,784) | $ (1,586,933) | $ (1,717,637) | $ (2,994,301) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (1,719,733) | $ (2,994,334) |
Adjustments to Reconcile Net Loss to Net Cash Used by Operating Activities | ||
Depreciation and Amortization | 109,302 | 110,952 |
Amortization of Debt Discount | 0 | 13,152 |
Amortization of Deferred Financing Costs | 0 | 41,227 |
Gain on Derivatives and Debt Conversion | (42,591) | (42,001) |
Stock Option Compensation | 84,000 | 195,000 |
Bad Debt Expense | 3,085 | 3,936 |
Loss on Disposal of Assets | 29,454 | 0 |
Inventory Valuation Allowance | 1,000 | 0 |
Common Stock Warrants Issued for Interest | 14,826 | 0 |
(Increase) Decrease in Operating Assets and Liabilities | ||
Accounts Receivable | (924,865) | (104,288) |
Inventory | (30,715) | (193,606) |
Other Current Assets | 93,989 | 9,821 |
Other Assets | (7,869) | 0 |
Accounts and Other Payables | (46,905) | (271,636) |
Net Cash Used in Operating Activities | (2,437,022) | (3,231,777) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Property and Equipment | (5,055) | (214,378) |
Proceeds from Sale of Equipment | 5,353 | 0 |
Net Cash Provided by (Used in) Investing Activities | 298 | (214,378) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Changes in Restricted Cash | 461,896 | 169,834 |
Proceeds from (Payments on) Short-Term Notes Payable/Debt | (68,406) | 3,479,750 |
Proceeds from Exercise of Stock Options | 0 | 8,636 |
Proceeds from (Payments to) Due to Related Parties | (145,000) | 88,000 |
Proceeds from Long-Term Debt, Net of Payments | (35,270) | (85,694) |
Payments on Capital Lease Obligations | 0 | (1,961) |
Payments on Dividends | (2,956) | 0 |
Deferred Finance Costs, Net | 0 | (98,978) |
Series B Preferred Stock Issued, Net of Cost of Capital | 2,821,482 | 0 |
Net Cash Provided by Financing Activities | 3,031,746 | 3,559,587 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 1,632 | 439 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 596,654 | 113,871 |
Cash and Cash Equivalents- Beginning of Period | 87,900 | 559,729 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 684,554 | 673,600 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest Paid | 37,422 | 18,339 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Discount on Convertible Debt | 0 | 112,784 |
Establishment of Derivative Liability | 0 | 126,214 |
Common Stock Issued for Investor Relations | 7,500 | 0 |
Warrants Issued for Interest Expense | 7,327 | 0 |
Common Stock Warrants Issued as Deferred Finance Costs | $ 0 | $ 13,430 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
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, 2014. The operating results and cash flows for the six-month period ended June 30, 2015 are not necessarily indicative of the results that will be achieved for the full fiscal year ending December 31, 2015 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 our opinion, necessary for a fair statement of the financial position and the results of operations for the interim periods. Preparing financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Estimates are used for, but not limited to, 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 our 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, 2014 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. Effective April 30, 2011, we completed our acquisition of Sole Vision Technologies (dba MEGAsys), a company based in Taiwan. We consolidate our financial statements with the financial statements of MEGAsys. All intercompany balances and transactions have been eliminated in consolidation. The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Our Audit Report on the Consolidated Financial Statements for the year ended December 31, 2014 contained a going concern qualification. Since inception, we have generated an accumulated deficit from operations of approximately $ 29.5 2.4 We adopted a multi-step plan to enable us to continue to operate and begin to report operating profits. The highlights of that plan are as follows: ⋅ We developed Sentir ® ⋅ We introduced the ZEE ® ⋅ We developed IvedaMobile ® ⋅ We are actively collaborating with certain foreign telecommunications and manufacturing companies to resell our products and services in their respective countries and are actively engaged in such sales processes with other similar companies. We are licensing Sentir and selling the ZEE line of cameras. ⋅ In December 2014, we entered into an agreement (the “Debenture and Warrant Amendment”) with the holders of certain debentures (the “2013 Debentures”) and certain warrants (the “2013 Warrants”), pursuant to which the holders agreed to cancel the 2013 Debentures and convert them into an aggregate of 3,600,000 ⋅ As of the final closing of a private placement on March 13, 2015, we raised approximately $ 3.1 ⋅ During July 2014 we launched a new website highlighting our licensing business model, which focuses on telecommunications companies, data centers, ISPs, cable companies, and other similar organizations. ⋅ We reduced our U.S.-based segment operating costs by eliminating our direct project-based sales channel and all costs related to project-based sales and operations to focus our activities and resources on licensing Sentir. ⋅ In November 2013, we hired Bob Brilon as our Chief Financial Officer and Executive Vice President of Business Development. Mr. Brilon has strong ties with the investment community and has extensive experience with strategic growth planning and domestic and foreign institutional investors, which have been and will continue to be instrumental to our market expansion, global distribution of our cloud video hosting platform and services, and raising capital to fund our growth. In February 2014, Mr. Brilon was appointed as our President. 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 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 Accounts receivable 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. U.S.-based segment revenue from two customers represented approximately 31 83 72 51 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 at June 30, 2015. 2015 $ 10,000 2016 20,000 2017 20,000 2018 20,000 Thereafter 46,666 Total $ 116,666 Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to us as of June 30, 2015 and December 31, 2014. The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses, and amounts due to related parties. Fair values were assumed to approximate carrying values for these financial instruments because either they are short-term in nature and their carrying amounts approximate their fair values or they are receivable or payable on demand. We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at the reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, we use the Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Our derivative liability relates to the 2013 Warrants issued in connection with the 2013 Debentures (subsequently converted to Series A Preferred Stock on December 9, 2014). These warrants contain a ratchet provision, which allows the exercise price to adjust downward based on certain events. We conduct operations in various geographic regions. The operations conducted and the customer bases located in the foreign countries are similar to the operations conducted and the customer bases located in the United States. The net revenue and net assets (liabilities) for other significant geographic regions are as follows: June 30, 2015 Net Revenue Net Assets (Liabilities) United States $ 148,235 $ 141,230 Republic of China (Taiwan) $ 1,153,149 $ (163,063) 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. We operate two reportable business segments as defined in ASC 280, “Segment Reporting.” We have a U.S.-based segment, Iveda, and a Taiwan-based segment, MEGAsys. Each segment has a chief operating decision maker and management personnel who review their respective segment’s performance as it relates to revenue, operating profit, and operating expenses. Three Months Three Months Condensed Ended June 30, 2015 Ended June 30, 2015 Consolidated Iveda MEGAsys Total Revenue $ 48,912 $ 726,649 $ 775,561 Cost of Revenue 28,562 606,295 634,857 Gross Profit 20,350 120,354 140,704 Depreciation and Amortization 48,067 4,111 52,178 General and Administrative 817,499 98,111 915,610 Gain (Loss) from Operations (845,216) 18,132 (827,084) Foreign Currency Gain 3,460 1,223 4,683 Gain on Derivatives 5,659 - 5,659 Loss on Disposal of Assets, Net (29,454) - (29,454) Interest Income 6,136 1,458 7,594 Interest Expense (18,818) (10,076) (28,894) Gain (Loss) Before Income Taxes (878,233) 10,737 (867,496) Provision for Income Taxes - (12,853) (12,853) Net Income (Loss) $ (878,233) $ (2,116) $ (880,349) Six Months Six Months Condensed Ended June 30, 2015 Ended June 30, 2015 Consolidated Iveda MEGAsys Total Revenue $ 148,235 $ 1,153,149 $ 1,301,384 Cost of Revenue 129,043 864,509 993,552 Gross Profit 19,192 288,640 307,832 Depreciation and Amortization 101,130 8,172 109,302 General and Administrative 1,658,457 215,967 1,874,424 Gain (Loss) from Operations (1,740,396) 64,501 (1,675,895) Foreign Currency Gain 7,715 1,411 9,126 Gain on Derivatives 42,591 - 42,591 Loss on Disposal of Assets, Net (29,454) - (29,454) Interest Income 12,205 1,472 13,677 Interest Expense (48,512) (18,413) (66,925) Gain (Loss) Before Income Taxes (1,755,851) 48,971 (1,706,880) Provision for Income Taxes - (12,853) (12,853) Net Income (Loss) $ (1,755,851) $ 36,118 $ (1,719,733) Additions to long-lived assets as presented in the following table represent capital expenditures. Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Revenue United States $ 48,912 $ 318,459 $ 148,235 $ 521,769 Republic of China (Taiwan) 726,649 32,803 1,153,149 204,357 $ 775,561 $ 351,262 $ 1,301,384 $ 726,126 Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Operating Earnings (Loss) United States $ (845,216) $ (1,484,040) $ (1,740,396) $ (2,795,377) Republic of China (Taiwan) 18,132 (9,649) 64,501 (61,712) $ (827,084) $ (1,493,689) $ (1,675,895) $ (2,857,089) Six Months Ended June 30, 2015 2014 Property and Equipment, Net United States $ 354,218 $ 544,092 Republic of China (Taiwan) 11,475 40,791 $ 365,693 $ 584,883 Six Months Ended June 30, 2015 2014 Additions to (Deletions from) Long-Lived Assets United States $ (3,883) $ 198,888 Republic of China (Taiwan) (1,172) 15,490 $ (5,055) $ 214,378 Six Months Ended June 30, 2015 2014 Inventory United States $ 262,880 $ 376,076 Republic of China (Taiwan) 157,943 149,246 $ 420,823 $ 525,322 Six Months Ended June 30, 2015 2014 Total Assets United States $ 1,659,937 $ 1,955,088 Republic of China (Taiwan) 2,542,083 2,133,558 $ 4,202,020 $ 4,088,646 Certain amounts in 2014 may have been reclassified to conform to the 2015 presentation. There were no new standards recently issued which would have an impact on our operations or disclosures. |
SHORT-TERM DEBT
SHORT-TERM DEBT | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Short-term Debt [Text Block] | NOTE 2 SHORT-TERM DEBT The short term debt balances were as follows: June 30, 2015 December 31, 2014 Loan from Shanghai Bank at 3.24% interest rate per annum. Due July - December 2015. $ 494,073 $ 325,500 Loan from Hua Nan Bank at 3.26% interest rate per annum. Due November - December 2015. 323,000 315,000 Loan from SinoPac Bank at 3.26% interest rate per annum. Due July 2015. 161,500 315,000 Loans from unrelated individuals in MEGAsys management. Due December 2015 58,140 - KTV Holding, LLC at 9.5% interest rate per annum. Paid January 26, 2015. - 75,000 A&A Property Investments, Inc. at 9.5% interest rate per annum. Paid January 26, 2015 - 50,000 Balance at end of period $ 1,036,713 $ 1,080,500 |
EQUITY
EQUITY | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | NOTE 3 EQUITY Preferred Stock We are currently authorized to issue up to 100,000,000 0.00001 10,000,000 500 Series A Preferred Stock We are authorized to issue up to 10,000,000 shares of Series A Preferred Stock. Each share of Series A Preferred Stock accrues cumulative dividends at a rate of 9.5 1.00 Each share of Series A Preferred Stock is convertible at the option of the holder, at any time, into shares of our common stock equal to the original issue price divided by an adjusted conversion price of $ 0.97 The holders of Series A Preferred Stock have the same voting rights as, and vote as a single class with, the holders of our common stock. Each holder of our Series A Preferred Stock is entitled to the number of votes equal to the number of shares of our common stock into which such shares of Series A Preferred Stock may be converted. In addition, in the event we sell, grant, or issue any Common Stock Equivalent (as defined in our Articles of Incorporation) at a price per share that is lower than the then-applicable conversion price for the Series A Preferred Stock, the conversion price for the Series A Preferred Stock will be adjusted to account for the dilutive issuance. If we effectuate a stock split or subdivision of our common stock or our Board of Directors declares a dividend payable in our common stock, the conversion price for the Series A Preferred Stock will be appropriately decreased to protect the Series A Preferred Stock holders from any dilutive effect of the stock split, subdivision, or stock dividend. Similarly, if the number of shares of our common stock outstanding decreases due to a reverse stock split or other combination of the outstanding shares of our common stock, then the applicable conversion price of the Series A Preferred Stock will increase in order to proportionately decrease the number of shares issuable upon conversion . Series B Preferred Stock We are authorized to issue up to 500 shares of Series B Preferred Stock. Each share of Series B Preferred Stock accrues dividends at a rate of 9.5 10,000 In the event of any liquidation, dissolution, or winding up of our company, the holders of Series B Preferred Stock are entitled to receive distributions of any of the assets of our company equal to 100 0.75 The holders of Series B Preferred Stock have no voting rights, except as are expressly provided in our Articles of Incorporation or required by law. Without the approval of at least a majority of the outstanding Series B Preferred Stock, we may not authorize or issue (i) any additional or other shares of capital stock that are of senior rank to the shares of Series B Preferred Stock in respect of the preferences as to dividends, distributions, or payments upon the liquidation, dissolution, and winding up of our company, (ii) any additional or other shares of capital stock that are of equal rank to the shares of Series B Preferred Stock in respect of the preferences as to dividends, distributions, or payments upon the liquidation, dissolution, and winding up of our company, or (iii) any capital stock junior in preference to the Series B Preferred Stock having a maturity date that is prior to the maturity date of the Series B Preferred Stock. Furthermore, if we consummate a Fundamental Transaction (as defined in our Articles of Incorporation) while shares of our Series B Preferred Stock are outstanding, then the holders of those outstanding shares have the right to receive, upon conversion of the Series B Preferred Stock, the same amount and kind of securities, cash, or property as they would have received if they would have been holders of the number of shares of common stock issuable upon conversion in full of all shares of our Series B Preferred Stock immediately prior to the Fundamental Transaction. In addition, in the event we sell, grant, or issue any Common Stock Equivalent (as defined in our Articles of Incorporation) at a price per share that is lower than the then-applicable conversion price for the Series B Preferred Stock (the “Effective Price”), the conversion price for the Series B Preferred Stock will be adjusted to the Effective Price. If we effectuate a stock split or subdivision of our common stock or our Board of Directors declares a dividend payable in our common stock, the conversion price for the Series B Preferred Stock will be appropriately decreased to protect the Series B Preferred Stock holders from any dilutive effect of the stock split, subdivision, or stock dividend. Similarly, if the number of shares of our common stock outstanding decreases due to a reverse stock split or other combination of the outstanding shares of our common stock, then the applicable conversion price of the Series B Preferred Stock will increase in order to proportionately decrease the number of shares issuable upon conversion. Holders of our Series B Preferred Stock have no sinking fund rights. Common Stock We are authorized to issue up to 100,000,000 0.00001 During the six months ended June 30, 2015 we issued 10,000 Notes Receivable from Stockholder In June 2014, an advisor/stockholder of our company exercised warrants to purchase 200,000 300,000 1.02 1.00 5 504,000 11,806 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | NOTE 4 STOCK OPTIONS AND WARRANTS Stock Options We have granted non-qualified stock options to employees, contractors and directors as equity compensation and to debenture holders for the extension of debenture maturity dates. All non-qualified options are generally issued with an exercise price no less than the fair market 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 and others vesting ratably over a period of time up to four years. Standard vested options may be exercised up to three months following the date of termination of the relationship with the employee, contractor or director 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. Six months ended June 30, 2015 Shares Weighted- Outstanding at Beginning of Year 5,953,227 $ 1.03 Granted 291,000 0.77 Exercised - - Forfeited or Canceled (161,208) 1.41 Outstanding at End of Period 6,083,019 1.01 Options Exercisable at End of Period 6,017,894 $ 1.02 Weighted-Average Fair Value of Options Granted During the Period $ 0.77 Options Outstanding Options Exercisable Range of Number Weighted- Weighted- Number Weighted- $0.10 - $1.75 6,083,019 7 $ 1.01 6,017,894 $ 1.02 2015 Expected Life 6.25 yrs Dividend Yield 0 % Expected Volatility 18.35 % Risk-Free Interest Rate 1.99 % Expected volatility for 2015 and 2014 was estimated by using the Dow Jones U.S. Industry Indices 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 is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of the options is based on the actual expiration date of the grant. Warrants We have periodically issued warrants to purchase shares of common stock as equity compensation to officers, directors, employees, and consultants. We have also issued warrants as incentive in connection with the purchase of debt and equity securities. As of June 30, 2015, warrants to purchase 7,883,303 Outstanding at December 31, 2014 3,749,550 Granted 4,369,162 Exercised - Forfeited or Canceled (235,409) Warrants Redeemable at June 30, 2015 7,883,303 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | NOTE 5 RELATED PARTY TRANSACTIONS On December 30, 2014, we entered into a debenture agreement with Joe Farnsworth, a member of our Board of Directors, for $ 10,000 9.5 On December 9, 2014, we entered into a debenture agreement with Robert Gillen, a member of our Board of Directors, for $ 100,000 9.5 25,000 1.00 25,000 1.00 On October 14, 2014, we entered into a debenture agreement with Mr. Farnsworth, a member of our Board of Directors, for $ 35,000 9.5 On September 10, 2014, we entered into a debenture agreement with Alex Kuo, a member of the Board of Directors, for $ 30,000 9.5 December 31, 2015 3,000 0.77 On September 8, 2014, we entered into a debenture agreement with Mr. Kuo’s wife, Li-Min Hsu, for $ 100,000 9.5 December 31, 2015 10,000 0.77 On August 28, 2014, we entered into a debenture agreement with Gregory Omi, a member of the Board of Directors of the Company, for $ 200,000 9.5 December 31, 2015 20,000 0.77 On November 19, 2012, we entered into a convertible debenture agreement with Mr. Gillen, a member of our Board of Directors, for $ 100,000 10 5,000 December 31, 2015 10,000 0.77 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2015 | |
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, 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, 2014 and 2013 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 quarters ended June 30, 2015 and 2014 and six months ended June 30, 2015 and 2014. 22,127,032 11,807,271 Three Months Three Months Six Months Six Months Ended Ended Ended Ended Basic EPS June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Net Loss $ (880,349) $ (1,588,767) $ (1,719,733) $ (2,994,334) Weighted Average Shares 27,380,701 26,849,456 27,344,729 26,814,103 Basic and Diluted Loss Per Share $ (0.03) $ (0.06) $ (0.06) $ (0.11) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | NOTE 7 SUBSEQUENT EVENTS We have evaluated subsequent events from the balance sheet date through the date the condensed consolidated financial statements were issued and determined that there are no additional items to disclose. |
BASIS OF PRESENTATION AND SUM14
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Consolidation Effective April 30, 2011, we completed our acquisition of Sole Vision Technologies (dba MEGAsys), a company based in Taiwan. We consolidate our financial statements with the financial statements of MEGAsys. All intercompany balances and transactions have been eliminated in consolidation. |
Going Concern [Policy Text Block] | Going Concern The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Our Audit Report on the Consolidated Financial Statements for the year ended December 31, 2014 contained a going concern qualification. Since inception, we have generated an accumulated deficit from operations of approximately $ 29.5 2.4 We adopted a multi-step plan to enable us to continue to operate and begin to report operating profits. The highlights of that plan are as follows: ⋅ We developed Sentir ® ⋅ We introduced the ZEE ® ⋅ We developed IvedaMobile ® ⋅ We are actively collaborating with certain foreign telecommunications and manufacturing companies to resell our products and services in their respective countries and are actively engaged in such sales processes with other similar companies. We are licensing Sentir and selling the ZEE line of cameras. ⋅ In December 2014, we entered into an agreement (the “Debenture and Warrant Amendment”) with the holders of certain debentures (the “2013 Debentures”) and certain warrants (the “2013 Warrants”), pursuant to which the holders agreed to cancel the 2013 Debentures and convert them into an aggregate of 3,600,000 ⋅ As of the final closing of a private placement on March 13, 2015, we raised approximately $ 3.1 ⋅ During July 2014 we launched a new website highlighting our licensing business model, which focuses on telecommunications companies, data centers, ISPs, cable companies, and other similar organizations. ⋅ We reduced our U.S.-based segment operating costs by eliminating our direct project-based sales channel and all costs related to project-based sales and operations to focus our activities and resources on licensing Sentir. ⋅ In November 2013, we hired Bob Brilon as our Chief Financial Officer and Executive Vice President of Business Development. Mr. Brilon has strong ties with the investment community and has extensive experience with strategic growth planning and domestic and foreign institutional investors, which have been and will continue to be instrumental to our market expansion, global distribution of our cloud video hosting platform and services, and raising capital to fund our growth. In February 2014, Mr. Brilon was appointed as our President. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | 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 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 Accounts receivable 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. U.S.-based segment revenue from two customers represented approximately 31 83 72 51 |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Intangible Assets 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 at June 30, 2015. 2015 $ 10,000 2016 20,000 2017 20,000 2018 20,000 Thereafter 46,666 Total $ 116,666 |
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 us as of June 30, 2015 and December 31, 2014. The respective carrying values of certain on-balance-sheet financial instruments approximate their fair values. These financial instruments include cash, accounts receivable, accounts payable, accrued expenses, and amounts due to related parties. Fair values were assumed to approximate carrying values for these financial instruments because either they are short-term in nature and their carrying amounts approximate their fair values or they are receivable or payable on demand. |
Derivatives, Policy [Policy Text Block] | Derivative Financial Instruments We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at the reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, we use the Black-Scholes option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Our derivative liability relates to the 2013 Warrants issued in connection with the 2013 Debentures (subsequently converted to Series A Preferred Stock on December 9, 2014). These warrants contain a ratchet provision, which allows the exercise price to adjust downward based on certain events. |
Segment Reporting, Policy [Policy Text Block] | We conduct operations in various geographic regions. The operations conducted and the customer bases located in the foreign countries are similar to the operations conducted and the customer bases located in the United States. The net revenue and net assets (liabilities) for other significant geographic regions are as follows: June 30, 2015 Net Revenue Net Assets (Liabilities) United States $ 148,235 $ 141,230 Republic of China (Taiwan) $ 1,153,149 $ (163,063) 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. We operate two reportable business segments as defined in ASC 280, “Segment Reporting.” We have a U.S.-based segment, Iveda, and a Taiwan-based segment, MEGAsys. Each segment has a chief operating decision maker and management personnel who review their respective segment’s performance as it relates to revenue, operating profit, and operating expenses. Three Months Three Months Condensed Ended June 30, 2015 Ended June 30, 2015 Consolidated Iveda MEGAsys Total Revenue $ 48,912 $ 726,649 $ 775,561 Cost of Revenue 28,562 606,295 634,857 Gross Profit 20,350 120,354 140,704 Depreciation and Amortization 48,067 4,111 52,178 General and Administrative 817,499 98,111 915,610 Gain (Loss) from Operations (845,216) 18,132 (827,084) Foreign Currency Gain 3,460 1,223 4,683 Gain on Derivatives 5,659 - 5,659 Loss on Disposal of Assets, Net (29,454) - (29,454) Interest Income 6,136 1,458 7,594 Interest Expense (18,818) (10,076) (28,894) Gain (Loss) Before Income Taxes (878,233) 10,737 (867,496) Provision for Income Taxes - (12,853) (12,853) Net Income (Loss) $ (878,233) $ (2,116) $ (880,349) Six Months Six Months Condensed Ended June 30, 2015 Ended June 30, 2015 Consolidated Iveda MEGAsys Total Revenue $ 148,235 $ 1,153,149 $ 1,301,384 Cost of Revenue 129,043 864,509 993,552 Gross Profit 19,192 288,640 307,832 Depreciation and Amortization 101,130 8,172 109,302 General and Administrative 1,658,457 215,967 1,874,424 Gain (Loss) from Operations (1,740,396) 64,501 (1,675,895) Foreign Currency Gain 7,715 1,411 9,126 Gain on Derivatives 42,591 - 42,591 Loss on Disposal of Assets, Net (29,454) - (29,454) Interest Income 12,205 1,472 13,677 Interest Expense (48,512) (18,413) (66,925) Gain (Loss) Before Income Taxes (1,755,851) 48,971 (1,706,880) Provision for Income Taxes - (12,853) (12,853) Net Income (Loss) $ (1,755,851) $ 36,118 $ (1,719,733) Revenue as shown below represents sales to external customers for each segment. Intercompany revenue is immaterial and has been eliminated. Additions to long-lived assets as presented in the following table represent capital expenditures. Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Revenue United States $ 48,912 $ 318,459 $ 148,235 $ 521,769 Republic of China (Taiwan) 726,649 32,803 1,153,149 204,357 $ 775,561 $ 351,262 $ 1,301,384 $ 726,126 Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Operating Earnings (Loss) United States $ (845,216) $ (1,484,040) $ (1,740,396) $ (2,795,377) Republic of China (Taiwan) 18,132 (9,649) 64,501 (61,712) $ (827,084) $ (1,493,689) $ (1,675,895) $ (2,857,089) Six Months Ended June 30, 2015 2014 Property and Equipment, Net United States $ 354,218 $ 544,092 Republic of China (Taiwan) 11,475 40,791 $ 365,693 $ 584,883 Six Months Ended June 30, 2015 2014 Additions to (Deletions from) Long-Lived Assets United States $ (3,883) $ 198,888 Republic of China (Taiwan) (1,172) 15,490 $ (5,055) $ 214,378 Six Months Ended June 30, 2015 2014 Inventory United States $ 262,880 $ 376,076 Republic of China (Taiwan) 157,943 149,246 $ 420,823 $ 525,322 Six Months Ended June 30, 2015 2014 Total Assets United States $ 1,659,937 $ 1,955,088 Republic of China (Taiwan) 2,542,083 2,133,558 $ 4,202,020 $ 4,088,646 |
Reclassification, Policy [Policy Text Block] | Reclassification Certain amounts in 2014 may have been reclassified to conform to the 2015 presentation. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Standards There were no new standards recently issued which would have an impact on our operations or disclosures. |
BASIS OF PRESENTATION AND SUM15
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | Future amortization of trademarks is as follows: 2015 $ 10,000 2016 20,000 2017 20,000 2018 20,000 Thereafter 46,666 Total $ 116,666 |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | We conduct operations in various geographic regions. The operations conducted and the customer bases located in the foreign countries are similar to the operations conducted and the customer bases located in the United States. The net revenue and net assets (liabilities) for other significant geographic regions are as follows: June 30, 2015 Net Revenue Net Assets (Liabilities) United States $ 148,235 $ 141,230 Republic of China (Taiwan) $ 1,153,149 $ (163,063) |
Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block] | Statements of operations for the three and six months ended June 30, 2015 for each of our reporting segments are provided below. Three Months Three Months Condensed Ended June 30, 2015 Ended June 30, 2015 Consolidated Iveda MEGAsys Total Revenue $ 48,912 $ 726,649 $ 775,561 Cost of Revenue 28,562 606,295 634,857 Gross Profit 20,350 120,354 140,704 Depreciation and Amortization 48,067 4,111 52,178 General and Administrative 817,499 98,111 915,610 Gain (Loss) from Operations (845,216) 18,132 (827,084) Foreign Currency Gain 3,460 1,223 4,683 Gain on Derivatives 5,659 - 5,659 Loss on Disposal of Assets, Net (29,454) - (29,454) Interest Income 6,136 1,458 7,594 Interest Expense (18,818) (10,076) (28,894) Gain (Loss) Before Income Taxes (878,233) 10,737 (867,496) Provision for Income Taxes - (12,853) (12,853) Net Income (Loss) $ (878,233) $ (2,116) $ (880,349) Six Months Six Months Condensed Ended June 30, 2015 Ended June 30, 2015 Consolidated Iveda MEGAsys Total Revenue $ 148,235 $ 1,153,149 $ 1,301,384 Cost of Revenue 129,043 864,509 993,552 Gross Profit 19,192 288,640 307,832 Depreciation and Amortization 101,130 8,172 109,302 General and Administrative 1,658,457 215,967 1,874,424 Gain (Loss) from Operations (1,740,396) 64,501 (1,675,895) Foreign Currency Gain 7,715 1,411 9,126 Gain on Derivatives 42,591 - 42,591 Loss on Disposal of Assets, Net (29,454) - (29,454) Interest Income 12,205 1,472 13,677 Interest Expense (48,512) (18,413) (66,925) Gain (Loss) Before Income Taxes (1,755,851) 48,971 (1,706,880) Provision for Income Taxes - (12,853) (12,853) Net Income (Loss) $ (1,755,851) $ 36,118 $ (1,719,733) |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Inventories and property and equipment for operating segments are regularly reviewed by management and are therefore provided below. Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Revenue United States $ 48,912 $ 318,459 $ 148,235 $ 521,769 Republic of China (Taiwan) 726,649 32,803 1,153,149 204,357 $ 775,561 $ 351,262 $ 1,301,384 $ 726,126 Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Operating Earnings (Loss) United States $ (845,216) $ (1,484,040) $ (1,740,396) $ (2,795,377) Republic of China (Taiwan) 18,132 (9,649) 64,501 (61,712) $ (827,084) $ (1,493,689) $ (1,675,895) $ (2,857,089) Six Months Ended June 30, 2015 2014 Property and Equipment, Net United States $ 354,218 $ 544,092 Republic of China (Taiwan) 11,475 40,791 $ 365,693 $ 584,883 Six Months Ended June 30, 2015 2014 Additions to (Deletions from) Long-Lived Assets United States $ (3,883) $ 198,888 Republic of China (Taiwan) (1,172) 15,490 $ (5,055) $ 214,378 Six Months Ended June 30, 2015 2014 Inventory United States $ 262,880 $ 376,076 Republic of China (Taiwan) 157,943 149,246 $ 420,823 $ 525,322 Six Months Ended June 30, 2015 2014 Total Assets United States $ 1,659,937 $ 1,955,088 Republic of China (Taiwan) 2,542,083 2,133,558 $ 4,202,020 $ 4,088,646 |
SHORT-TERM DEBT (Tables)
SHORT-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt [Table Text Block] | The short term debt balances were as follows: June 30, 2015 December 31, 2014 Loan from Shanghai Bank at 3.24% interest rate per annum. Due July - December 2015. $ 494,073 $ 325,500 Loan from Hua Nan Bank at 3.26% interest rate per annum. Due November - December 2015. 323,000 315,000 Loan from SinoPac Bank at 3.26% interest rate per annum. Due July 2015. 161,500 315,000 Loans from unrelated individuals in MEGAsys management. Due December 2015 58,140 - KTV Holding, LLC at 9.5% interest rate per annum. Paid January 26, 2015. - 75,000 A&A Property Investments, Inc. at 9.5% interest rate per annum. Paid January 26, 2015 - 50,000 Balance at end of period $ 1,036,713 $ 1,080,500 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | Stock option transactions during the six months ended June 30, 2015 were as follows: Six months ended June 30, 2015 Shares Weighted- Outstanding at Beginning of Year 5,953,227 $ 1.03 Granted 291,000 0.77 Exercised - - Forfeited or Canceled (161,208) 1.41 Outstanding at End of Period 6,083,019 1.01 Options Exercisable at End of Period 6,017,894 $ 1.02 Weighted-Average Fair Value of Options Granted During the Period $ 0.77 |
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 June 30, 2015 is as follows: Options Outstanding Options Exercisable Range of Number Weighted- Weighted- Number Weighted- $0.10 - $1.75 6,083,019 7 $ 1.01 6,017,894 $ 1.02 |
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: 2015 Expected Life 6.25 yrs Dividend Yield 0 % Expected Volatility 18.35 % Risk-Free Interest Rate 1.99 % |
Warrant [Member] | |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block] | Warrant transactions during the six months ended June 30, 2015 were as follows: Outstanding at December 31, 2014 3,749,550 Granted 4,369,162 Exercised - Forfeited or Canceled (235,409) Warrants Redeemable at June 30, 2015 7,883,303 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Total common stock equivalents that could be convertible into common stock were 22,127,032 11,807,271 Three Months Three Months Six Months Six Months Ended Ended Ended Ended Basic EPS June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 Net Loss $ (880,349) $ (1,588,767) $ (1,719,733) $ (2,994,334) Weighted Average Shares 27,380,701 26,849,456 27,344,729 26,814,103 Basic and Diluted Loss Per Share $ (0.03) $ (0.06) $ (0.06) $ (0.11) |
BASIS OF PRESENTATION AND SUM19
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Trademarks [Member] | Jun. 30, 2015USD ($) |
Accounting Policies [Line Items] | |
2,015 | $ 10,000 |
2,016 | 20,000 |
2,017 | 20,000 |
2,018 | 20,000 |
Thereafter | 46,666 |
Total | $ 116,666 |
BASIS OF PRESENTATION AND SUM20
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accounting Policies [Line Items] | ||||
Net Revenue | $ 775,561 | $ 351,262 | $ 1,301,384 | $ 726,126 |
United States [Member] | ||||
Accounting Policies [Line Items] | ||||
Net Revenue | 148,235 | |||
Net Assets (Liabilities) | 141,230 | 141,230 | ||
Republic of China (Taiwan) MEGAsys [Member] | ||||
Accounting Policies [Line Items] | ||||
Net Revenue | 1,153,149 | |||
Net Assets (Liabilities) | $ (163,063) | $ (163,063) |
BASIS OF PRESENTATION AND SUM21
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Accounting Policies [Line Items] | ||||
Revenue | $ 775,561 | $ 351,262 | $ 1,301,384 | $ 726,126 |
Cost of Revenue | 634,857 | 313,867 | 993,552 | 524,401 |
Gross Profit | 140,704 | 37,395 | 307,832 | 201,725 |
Depreciation and Amortization | 52,178 | 109,302 | 110,952 | |
General and Administrative | 915,610 | 1,874,424 | ||
Gain (Loss) from Operations | (827,084) | (1,493,689) | (1,675,895) | (2,857,089) |
Foreign Currency Gain | 4,683 | 8,475 | 9,126 | 10,709 |
Gain on Derivatives | 5,659 | 30,401 | 42,591 | 42,001 |
Loss on Disposal of Assets, Net | (29,454) | 0 | (29,454) | 0 |
Interest Income | 7,594 | 1,874 | 13,677 | 1,877 |
Interest Expense | (28,894) | (119,949) | (66,925) | (175,953) |
Gain (Loss) Before Income Taxes | (867,496) | (1,572,888) | (1,706,880) | (2,978,455) |
Provision for Income Taxes | (12,853) | (15,879) | (12,853) | (15,879) |
Net Income (Loss) | (880,349) | $ (1,588,767) | (1,719,733) | $ (2,994,334) |
Iveda Solutions Inc [Member] | ||||
Accounting Policies [Line Items] | ||||
Revenue | 48,912 | 148,235 | ||
Cost of Revenue | 28,562 | 129,043 | ||
Gross Profit | 20,350 | 19,192 | ||
Depreciation and Amortization | 48,067 | 101,130 | ||
General and Administrative | 817,499 | 1,658,457 | ||
Gain (Loss) from Operations | (845,216) | (1,740,396) | ||
Foreign Currency Gain | 3,460 | 7,715 | ||
Gain on Derivatives | 5,659 | 42,591 | ||
Loss on Disposal of Assets, Net | (29,454) | (29,454) | ||
Interest Income | 6,136 | 12,205 | ||
Interest Expense | (18,818) | (48,512) | ||
Gain (Loss) Before Income Taxes | (878,233) | (1,755,851) | ||
Provision for Income Taxes | 0 | 0 | ||
Net Income (Loss) | (878,233) | (1,755,851) | ||
MEGAsys [Member] | ||||
Accounting Policies [Line Items] | ||||
Revenue | 726,649 | 1,153,149 | ||
Cost of Revenue | 606,295 | 864,509 | ||
Gross Profit | 120,354 | 288,640 | ||
Depreciation and Amortization | 4,111 | 8,172 | ||
General and Administrative | 98,111 | 215,967 | ||
Gain (Loss) from Operations | 18,132 | 64,501 | ||
Foreign Currency Gain | 1,223 | 1,411 | ||
Gain on Derivatives | 0 | 0 | ||
Loss on Disposal of Assets, Net | 0 | 0 | ||
Interest Income | 1,458 | 1,472 | ||
Interest Expense | (10,076) | (18,413) | ||
Gain (Loss) Before Income Taxes | 10,737 | 48,971 | ||
Provision for Income Taxes | (12,853) | (12,853) | ||
Net Income (Loss) | $ (2,116) | $ 36,118 |
BASIS OF PRESENTATION AND SUM22
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Accounting Policies [Line Items] | |||||
Revenues | $ 775,561 | $ 351,262 | $ 1,301,384 | $ 726,126 | |
Operating Earnings (Loss) | (827,084) | (1,493,689) | (1,675,895) | (2,857,089) | |
Property and Equipment, Net | 365,693 | 584,883 | 365,693 | 584,883 | $ 532,512 |
Additions to (Deletions from) Long-Lived Assets | (5,055) | 214,378 | |||
Inventory | 420,823 | 525,322 | 420,823 | 525,322 | |
Total Assets | 4,202,020 | 4,088,646 | 4,202,020 | 4,088,646 | $ 3,484,874 |
UNITED STATES | |||||
Accounting Policies [Line Items] | |||||
Revenues | 48,912 | 318,459 | 148,235 | 521,769 | |
Operating Earnings (Loss) | (845,216) | (1,484,040) | (1,740,396) | (2,795,377) | |
Property and Equipment, Net | 354,218 | 544,092 | 354,218 | 544,092 | |
Additions to (Deletions from) Long-Lived Assets | (3,883) | 198,888 | |||
Inventory | 262,880 | 376,076 | 262,880 | 376,076 | |
Total Assets | 1,659,937 | 1,955,088 | 1,659,937 | 1,955,088 | |
Republic of China (Taiwan) [Member] | |||||
Accounting Policies [Line Items] | |||||
Revenues | 726,649 | 32,803 | 1,153,149 | 204,357 | |
Operating Earnings (Loss) | 18,132 | (9,649) | 64,501 | (61,712) | |
Property and Equipment, Net | 11,475 | 40,791 | 11,475 | 40,791 | |
Additions to (Deletions from) Long-Lived Assets | (1,172) | 15,490 | |||
Inventory | 157,943 | 149,246 | 157,943 | 149,246 | |
Total Assets | $ 2,542,083 | $ 2,133,558 | $ 2,542,083 | $ 2,133,558 |
BASIS OF PRESENTATION AND SUM23
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) TWD in Millions | Mar. 13, 2015USD ($) | Dec. 31, 2014USD ($)shares | Jun. 30, 2015USD ($) | Jun. 30, 2015TWD | Jun. 30, 2014USD ($) |
Accounting Policies [Line Items] | |||||
Accumulated Deficit | $ 27,490,658 | $ 29,514,159 | |||
Cash CDIC Insured Limit | TWD | TWD 3 | ||||
Net Cash Provided by (Used in) Operating Activities | 2,437,022 | $ 3,231,777 | |||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 2,821,482 | $ 0 | |||
US Based Segment [Member] | Customer Two [Member] | Sales Revenue, Goods, Net [Member] | |||||
Accounting Policies [Line Items] | |||||
Concentration Risk Customer Percentage | 31.00% | 31.00% | |||
US Based Segment [Member] | Customer Two [Member] | Accounts Receivable [Member] | |||||
Accounting Policies [Line Items] | |||||
Concentration Risk Customer Percentage | 83.00% | 83.00% | |||
Taiwan Based Segment [Member] | Customer Two [Member] | Sales Revenue, Goods, Net [Member] | |||||
Accounting Policies [Line Items] | |||||
Concentration Risk Customer Percentage | 72.00% | 72.00% | |||
Taiwan Based Segment [Member] | Customer Two [Member] | Accounts Receivable [Member] | |||||
Accounting Policies [Line Items] | |||||
Concentration Risk Customer Percentage | 51.00% | 51.00% | |||
Series A Preferred Stock [Member] | |||||
Accounting Policies [Line Items] | |||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 3,600,000 | ||||
Series B Preferred Stock [Member] | Private Placement [Member] | |||||
Accounting Policies [Line Items] | |||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 3,100,000 |
SHORT-TERM DEBT (Details)
SHORT-TERM DEBT (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Short-term Debt [Line Items] | ||
Short-term Debt, Total | $ 1,036,713 | $ 1,080,500 |
Shanghai Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short Term Bank Loans | 494,073 | 325,500 |
Hua Nan Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short Term Bank Loans | 323,000 | 315,000 |
SinoPac Bank [Member] | ||
Short-term Debt [Line Items] | ||
Short Term Bank Loans | 161,500 | 315,000 |
MEGAsys management [Member] | ||
Short-term Debt [Line Items] | ||
Short Term Bank Loans | 58,140 | 0 |
KTV Holding, LLC [Member] | ||
Short-term Debt [Line Items] | ||
Short Term Bank Loans | 0 | 75,000 |
A&A Property Investments, Inc. [Member] | ||
Short-term Debt [Line Items] | ||
Short Term Bank Loans | $ 0 | $ 50,000 |
SHORT-TERM DEBT (Details Textua
SHORT-TERM DEBT (Details Textual) - Jun. 30, 2015 | Total |
Shanghai Bank [Member] | |
Short-term Debt [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 3.24% |
Debt Instrument, Maturity Date Range, Start | Jul. 31, 2015 |
Debt Instrument, Maturity Date Range, End | Dec. 31, 2015 |
Hua Nan Bank [Member] | |
Short-term Debt [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 3.26% |
Debt Instrument, Maturity Date Range, Start | Nov. 30, 2015 |
Debt Instrument, Maturity Date Range, End | Dec. 31, 2015 |
SinoPac Bank [Member] | |
Short-term Debt [Line Items] | |
Debt Instrument, Maturity Date | Jul. 31, 2015 |
Debt Instrument, Interest Rate, Stated Percentage | 3.26% |
MEGAsys management [Member] | |
Short-term Debt [Line Items] | |
Debt Instrument, Maturity Date | Dec. 31, 2015 |
KTV Holding, LLC [Member] | |
Short-term Debt [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 9.50% |
A&A Property Investments, Inc. | |
Short-term Debt [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 9.50% |
EQUITY (Details Textual)
EQUITY (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | |
Class of Stock [Line Items] | |||
Preferred Stock, Shares Authorized (in shares) | 100,000,000 | 100,000,000 | |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 | |
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Exercises In Period | 0 | ||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 | |
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 0.77 | ||
Series A Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred Stock, Shares Authorized (in shares) | 10,000,000 | 10,000,000 | |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 | |
Debt Conversion, Converted Instrument, Rate | 9.50% | ||
Conversion Price | $ 0.97 | ||
Shares Issued, Price Per Share | $ 1 | ||
Series B Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred Stock, Shares Authorized (in shares) | 500 | 500 | |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.00001 | $ 0.00001 | |
Debt Conversion, Converted Instrument, Rate | 9.50% | ||
Conversion Price | $ 0.75 | ||
Shares Issued, Price Per Share | $ 10,000 | ||
Percentage Of Original Issue Price | 100.00% | ||
Promissory Notes [Member] | |||
Class of Stock [Line Items] | |||
Long-term Debt, Gross | $ 504,000 | ||
Debt Instrument, Maturity Date | Jun. 30, 2017 | ||
Common Stock [Member] | |||
Class of Stock [Line Items] | |||
Common Stock, Shares Authorized | 100,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | ||
Long-term Debt, Gross | $ 11,806 | ||
Stock Issued During Period, Shares, Issued for Services | 10,000 | ||
Warrant [Member] | Exercise Price Range 1.02 [Member] | |||
Class of Stock [Line Items] | |||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Exercises In Period | 200,000 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1.02 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | ||
Warrant [Member] | Exercise Price Range 1.00 [Member] | |||
Class of Stock [Line Items] | |||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Exercises In Period | 300,000 | ||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 1 | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details) - 6 months ended Jun. 30, 2015 - $ / shares | Total |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Shares, Outstanding at Beginning of Year | 5,953,227 |
Shares, Granted | 291,000 |
Shares, Exercised | 0 |
Shares, Forfeited or Canceled | (161,208) |
Shares, Outstanding at End of Period | 6,083,019 |
Shares, Options Exercisable at Period-End | 6,017,894 |
Weighted-Average Fair Value of Options Granted During the Year | $ 0.77 |
Weighted - Average Exercise Price, Outstanding at Beginning of Year | 1.03 |
Weighted - Average Exercise Price, Granted | 0.77 |
Weighted - Average Exercise Price, Exercised | 0 |
Weighted - Average Exercise Price, Forfeited or Canceled | 1.41 |
Weighted - Average Exercise Price, Outstanding at End of Period | 1.01 |
Weighted - Average Exercise Price, Options Exercisable at Period-End | $ 1.02 |
STOCK OPTIONS AND WARRANTS (D28
STOCK OPTIONS AND WARRANTS (Details 1) - Jun. 30, 2015 - $ / shares | Total |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Range of Exercise Prices (Minimum) (in dollars per share) | $ 0.10 |
Range of Exercise Prices (Maximum) (in dollars per share) | $ 1.75 |
Number of Options, Outstanding at June 30, 2015 (in shares) | 6,083,019 |
Weighted - Average Remaining Contractual Life (in years) | 7 years |
Options Outstanding, Weighted -Average Exercise Price (in dollars per share) | $ 1.01 |
Number of Options, Exercisable at June 30, 2015 (in shares) | 6,017,894 |
Options Exercisable, Weighted - Average Exercise Price (in dollars per share) | $ 1.02 |
STOCK OPTIONS AND WARRANTS (D29
STOCK OPTIONS AND WARRANTS (Details 2) - 6 months ended Jun. 30, 2015 | Total |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Expected Life | 6 years 3 months |
Dividend Yield | 0.00% |
Expected Volatility | 18.35% |
Risk-Free Interest Rate | 1.99% |
STOCK OPTIONS AND WARRANTS (D30
STOCK OPTIONS AND WARRANTS (Details 3) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2015shares | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Shares, Outstanding at Beginning of Year (in shares) | 3,749,550 |
Shares, Granted (in shares) | 4,369,162 |
Shares, Exercised (in shares) | 0 |
Shares, Forfeited or Canceled (in shares) | (235,409) |
Shares, Warrants Redeemable at Year-End (in shares) | 7,883,303 |
STOCK OPTIONS AND WARRANTS (D31
STOCK OPTIONS AND WARRANTS (Details Textual) | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Warrants To Purchase Common Stock, Value | $ 7,883,303 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Textual) - Equity Component [Domain] - USD ($) | Jan. 05, 2015 | Sep. 10, 2014 | Sep. 08, 2014 | Feb. 25, 2015 | Dec. 09, 2014 | Aug. 28, 2014 | Jun. 20, 2013 | Jun. 30, 2015 | Dec. 30, 2014 | Oct. 14, 2014 | Nov. 19, 2012 |
Related Party Transaction [Line Items] | |||||||||||
Shares, Granted | 291,000 | ||||||||||
Options Granted, Exercise Price | $ 0.77 | ||||||||||
Mr. Alex Kuo [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 30,000 | ||||||||||
Debt Instrument, Maturity Date | Dec. 31, 2015 | ||||||||||
Warrants Exercise Price 1 | $ 0.77 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | ||||||||||
Shares, Granted | 3,000 | ||||||||||
Mr. Gregory Omi [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 200,000 | ||||||||||
Debt Instrument, Maturity Date | Dec. 31, 2015 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | ||||||||||
Shares, Granted | 20,000 | ||||||||||
Options Granted, Exercise Price | $ 0.77 | ||||||||||
Mr. Kuo's wife [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 100,000 | ||||||||||
Debt Instrument, Maturity Date | Dec. 31, 2015 | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | ||||||||||
Shares, Granted | 10,000 | ||||||||||
Options Granted, Exercise Price | $ 0.77 | ||||||||||
Mr. Joe Farnsworth [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 10,000 | $ 35,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | 9.50% | |||||||||
Mr. Gillen [Member] | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Debt Instrument, Face Amount | $ 100,000 | $ 100,000 | |||||||||
Debt Instrument, Maturity Date | Dec. 31, 2015 | ||||||||||
Issuance of Warrants to Purchase Common Stock | 25,000 | 25,000 | |||||||||
Warrants Exercise Price 1 | $ 1 | $ 1 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | 10.00% | |||||||||
Debt Instrument, Periodic Payment, Interest | $ 5,000 | ||||||||||
Shares, Granted | 10,000 | ||||||||||
Options Granted, Exercise Price | $ 0.77 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Basic EPS | ||||
Net Loss | $ (880,349) | $ (1,588,767) | $ (1,719,733) | $ (2,994,334) |
Weighted Average Shares (in shares) | 27,380,701 | 26,849,456 | 27,344,729 | 26,814,103 |
Basic and Diluted Loss Per Share (in dollars per share) | $ (0.03) | $ (0.06) | $ (0.06) | $ (0.11) |
EARNINGS (LOSS) PER SHARE (De34
EARNINGS (LOSS) PER SHARE (Details Textual) - shares | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 22,127,032 | 11,807,271 |