| 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. |
