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INVESTOR PRESENTATION September 2014 GO Enabling Cloud Video Surveillance

Iveda sept general investor presentation 092614

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Iveda sept general investor presentation 092614

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Page 1: Iveda sept general investor presentation 092614

INVESTOR PRESENTATIONSeptember 2014

GO

Enabling Cloud Video Surveillance

Page 2: Iveda sept general investor presentation 092614

This presentation contains forward-looking statements that represent our beliefs, projections and predictions about future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievement described in or implied by such statements, including statements relating to: (a) Iveda’s future revenue, expenses, margins, profitability, net income, taxes, adjusted net income, adjusted operating expenses and other measures of results of operations; and (b) Iveda Solution's ability to capitalize on industry trends. Actual results may differ materially from the expected results described in our forward-looking statements, including with respect to: development and acceptance of Iveda’s services; competitive risks, including competing technologies, products and services, and the competitive activities of our competitors; risks associated with the introduction of new products and services; risks inherent in strategic relationships, and technology and service integration efforts. The preparation of our financial statements and forward-looking financial guidance requires us to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenues and expenses during the reported period. Actual results may differ materially from these estimates under different assumptions or conditions.

Iveda assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the Iveda Solutions' securities should not place undue reliance on these forward-looking statements.

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FORWARD LOOKING STATEMENT

Page 3: Iveda sept general investor presentation 092614

COMPANY STATISTICS

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Share Statistics      Cap Structure  Trading Symbol (OTC) IVDA  Cash & Restricted Cash $1.7MStock Price (8/30/14)   $1.18  Long Term Debt $3.6MShares Outstanding   27.3M  Shareholder Equity ($2.3)M52wk Range   $1.08 - $2.30     

3 Month Avg. Volume   4,610 Financials (TTM)-Legacy  

Warrants/Options   3.7M / 5.7M  Revenue $3.3MFully Diluted Shares   36.7M  EBITDA ($5.9)MInsider Ownership   32.8%  Operating Cash Flow ($4.9)MMarket Capitalization   $32.2M  EPS (per share) ($0.27)Enterprise Value   $35.7M          Other         Full-time Employees 50       Fiscal Year Ends Dec 31st

     Public Accounting FirmAlbert Wong &

Co.        Website www.iveda.com       Corporate HQ Mesa, AZ

Source: S&P Capital IQ

Page 4: Iveda sept general investor presentation 092614

Large & Growing Market− IP Video Surveillance & VSaaS sales are expected to increase at a 37% CAGR over

the next six years.

Unique Business Model− Strategy of licensing a scalable software platform through the reseller/service providers looking for

additional monthly recurring revenue streams (e.g. ISPs, telcos) allows for greater scale and more rapid adoption. Branded or white label cameras also available.

Disruptive VSaaS Innovative Technology− Sentir™ video management platform is designed to work with any device, anywhere—and can easily be

deployed on the public or private cloud− Flexible platform is easy to use, highly scalable and requires minimal set up and maintenance

Signed Contracts Provide Path to Profitable Growth− Iveda has signed contracts w/ two telcos & is in negotiations with several

domestic and international resellers/service providers

INVESTMENT HIGHLIGHTS

4

Iveda is a leader in harnessing the cloud to provide innovative IP video surveillance and Video Surveillance as a Service (VSaaS) solutions.#1

#2

#3

High Margin Software Recurring Revenue Model

#4

#5

− Projecting 85% gross margin on software licensing business vertical

Page 5: Iveda sept general investor presentation 092614

MARKET OPPORTUNITY

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Sources: IDC, Allied Market Research

Estimated CAGR for global sales for IP video

surveillance and VSaaS from 2013-2020

37%

$38.6B

$18.7B

$57.3B

Global Cloud Software Revenue Estimates

Page 6: Iveda sept general investor presentation 092614

User Friendly

Customers can securely watch live or recorded

video from multiple cameras anywhere in the world with one log in from their web brower or mobile

app.

No Hardware

Because video footage is stored in the cloud,

customers don’t need a Digital Video Recorder.

Easy to Deploy

Sentir eliminates infrastructure management

and maintnance and support burdens because every aspect is controlled by the service provider.

Devices are Plug and Play.

Camera Agnostic

Iveda’s firmware enables Sentir to be compatable

with any IP-enabled camera.

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Cloud-based video management platform

Page 7: Iveda sept general investor presentation 092614

ENDUSER APPLICATIONS

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Home Small & Medium Businesses

(SMBs)

Enterprise Government

Sentir’s flexibility and cost-effectiveness provides an almost endless number of applications.

Page 8: Iveda sept general investor presentation 092614

SALES STRATEGY

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Telcos

Data Centers

Cable Service Providers

ISPs

Resellers/Service

ProvidersEnd Users

Home

SMBs

Enterprise

Government

Page 9: Iveda sept general investor presentation 092614

STRATEGIC BENEFITS

9

For Iveda For Resellers/Service Providers

Reach

Working with reseller/service providers with millions of customers allows Iveda to efficiently maximize its sales efforts.

Scalability

Since the reseller/service provider will handle billing, hardware distribution, and in most cases hosting Sentir on their cloud, Iveda can quickly grow its business without having to make prohibitive investments in back office systems and infrastructure.

Value Add

Sentir provides an easy way for resellers to generate an additional revenue stream from their existing customer base or attract new customers by offering a complementary services that enhances their current offerings..Simple And Cost-Effective

Because Sentir is in the cloud and device agnostic, it is easy to deploy and requires minimal capital investment.

Pay Per Activation Model

No up front fees and immediate positive cash flow to reseller/service providers is an easy purchase decision and builds annuity for Iveda.

Infrastructure Utilization

Sentir resides within the resellers data center allowing them to increase revenues for bandwidth and storage.

Page 10: Iveda sept general investor presentation 092614

REVENUE MODEL

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Resellers are expected to charge their customers $10-$20/per camera/month for Sentir video surveillance management functionality.

The Company generates additional revenue from sales of its branded cameras. The reseller has storage and bandwidth up sell opportunity from the base fee they are charging their customer.

85%

25%

Gross Margin

Page 11: Iveda sept general investor presentation 092614

ILLUSTRATIVE FINANCIALS

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First Year Camera

Activations

Avg. Camera Revenue

First Year Camera Revenue

Monthly Sentirfee per Camera

End of 1st Year Sentir

Fee Annuity

10,000 $100 $1,000,000 $3 $360,000

100,000 $100 $10,000,000 $3 $3,600,000

Small Telecom20MM

SubscribersLarge Telecom

200MM Subscribers

Page 12: Iveda sept general investor presentation 092614

TELECOM CONTRACTS

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PLDT Telecom70MM Subscribers

TELMEX Telecom200MM

Subscribers

Near Term Pipeline Includes:Near Term Pipeline Includes:−JapanJapan−South AmericaSouth America−VietnamVietnam

Page 13: Iveda sept general investor presentation 092614

CORPORATE ROADMAP

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With the launch of Sentir in 2014, Iveda is on course to execute on its licensing strategy culminating with an up list to Nasdaq.

Path to Path to ProfitabilityProfitability

Sign Additional Sign Additional ResellerReseller

AgreementsAgreements

NASDAQ UplistNASDAQ Uplist

Achieve Achieve ProfitabilityProfitability

Sentir LaunchSentir Launch

Existing ResellersExisting Resellers

Page 14: Iveda sept general investor presentation 092614

Iveda Legacy Revenues

FINANCIALS

14

Iveda Net Income (Loss)(Millions) (Millions)

Note: Iveda unveiled its new strategy of partnering with telecom resellers in connection with the launch of Sentir in 2Q14. Past and some future revenues are legacy project business.

Page 15: Iveda sept general investor presentation 092614

CAPITALIZATION OVERVIEW

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(millions)

Notes:Short-term debt is arranged through three banks with annual interest rates ranging from 1%-3.26% and maturities through September 2014.

In December 2013 – May 2014, Iveda raised $3.6 million in convertible debentures in an offering that was oversubscribed by $600,000. The notes mature in three years, bear an annual interest rate of 9.5% and can be converted into common stock anytime at $1.50/share.

(As of August 30, 2014)

Page 16: Iveda sept general investor presentation 092614

MANAGEMENT TEAM

David Ly Chairman and CEO

Bob Brilon President and CFO

• 10 years cloud video hosting technology development and go-to-market within the security surveillance industry;

• 14 years Technical Sales and Sales Management wireless data, cellular, IT, & security surveillance

•30 years’ experience as a senior executive at both public and private technology companies

•Public company experience includes InPlay (NASDAQ:NPLA); Duraswitch (NASDAQ:DSWT); Rental Service Corp. (NYSE:RRR) and Go-Video (AMEX:VCR)

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Page 17: Iveda sept general investor presentation 092614

ADVISORY TEAM

Dr. Joseph LeeCloud Architect

Dr. Eric ChenCloud Storage

• Cloud computer expert

• Currently Chief Technology Officer at 21Vianet, largest carrier neutral data center in China

• Senior executive experience at Microsoft, Lucent Technologies, Exxon and Owens Corning

• Ph.D. in Electrical Engineering at Iowa State

•Extensive experience in cloud storage and data services technology; Big Data storage architecture expert

•Founder and CEO of California-based ProphetStor Data Services

•Senior executive experience at FalconStor Software (NASDAQ: FALC), IBM

•Ph.D. in Computer and Information Sciences at Ohio State University

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Page 18: Iveda sept general investor presentation 092614

Large & Growing Market− IP Video Surveillance & VSaaS sales are expected to increase at a 37% CAGR over

the next six years.

Unique Business Model− Strategy of licensing a scalable software platform through reseller/service providers looking for

additional monthly recurring revenue streams (e.g. ISPs, telcos) allows for greater scale and more rapid adoption. Branded or white label cameras also available

Disruptive VSaaS Innovative Technology− Sentir™ video management platform is designed to work with any device, anywhere—and can easily be

deployed on the public or private cloud.− Flexible platform is easy to use, highly scalable and requires minimal set up and maintenance

Signed Contracts Provide Path to Profitable Growth− Iveda has signed contracts w/ two telcos & is in negotiations with several

domestic and international resellers/service providers

INVESTMENT HIGHLIGHTS

18

Iveda is a leader in harnessing the cloud to provide innovative IP video surveillance and Video Surveillance as a Service (VSaaS) solutions.#1

#2

#3

High Margin Software Recurring Revenue Model

#4

#5

− Projecting 85% gross margin on software licensing business vertical

Page 19: Iveda sept general investor presentation 092614

GO

APPENDIX

Page 20: Iveda sept general investor presentation 092614

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True Plug & Play

• Easy to set up • Excellent video quality at an

affordable price • See all your cameras on a single

dashboard • View from your computer, tablet

or smartphone • Cloud hosted, 24/7 Web access

to live & recorded video • Off-site cloud storage for video

security