Business Context and Reporting Period
Company: Iveda Corporation (also referenced as Iveda Solutions, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: October 25, 2010
Event: Entry into a Material Definitive Agreement (Operating Level Agreement or "OLA").
Key Financial Metrics
This filing details a specific contract rather than general financial statements. Key contract values include:
- Upfront Fees: $280,000
- Initial Hardware (SVC-1002): $142,000
- Second Phase Hardware: $100,000
- Recurring Revenue: Monthly fees for remote video hosting, storage, and maintenance (specific amounts not disclosed).
- Total Scope: Services and hardware for 164 vehicles.
Note: The filing does not provide data on overall company revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes and Contract Details
The Company entered into an agreement with Digital Ally and Tecnologia y Diagnosticos Del Norte S.A. de C.V. ("TDN"). Iveda acts as a sub-contractor to TDN to provide services to a Federal Government Agency in Mexico. Deliverables include the SVC-1002 streaming video converter, in-vehicle surveillance systems, video hosting, and archiving services.
Outlook, Risks, and Contingencies
Contract Terms: The agreement includes early termination provisions if continued service causes damage or harm to the Agency. The contract may also be terminated for failure to perform.
Risks: Management explicitly states the contract is subject to various risks and uncertainties, specifically citing performance risk.
Investor Verification Checklist
- Verify the exact monthly fee structure for hosting and maintenance, as specific figures are not disclosed.
- Confirm the status of the relationship with TDN and the Federal Government Agency in Mexico.
- Assess the impact of the "performance risk" and early termination clauses on revenue recognition.
- Check subsequent filings for actual revenue recognition from this $522,000+ hardware and upfront fee contract.