Nevada
|
1531
|
(State
or other jurisdiction of incorporation or organization)
|
(Primary
Standard Industrial Classification Code
Number)
|
Title
Of Each Class of
Securities
To Be
Registered
|
Amount
to be
Registered(1)
|
Proposed
Maximum
Offering
Price Per
Share(1)
|
Proposed
Maximum
Aggregate
Offering
Price(2)
|
Amount
of
Registration
Fee(3)
|
||||||||||||
Common
Stock, par value $0.00001 per share
|
9,009,304 | $ | 1.00 | $ | 9,009,304 | $ | 502.72 | |||||||||
Stock
Options
|
1,196,604 | $ | 1.00 | $ | 1,196,604 | $ | 66.77 | |||||||||
Warrants
|
559,278 | $ | 1.00 | $ | 559,278 | $ | 31.21 | |||||||||
Common
Stock issuable upon exercise of stock options and
warrants
|
1,755,882 | $ | 1.00 | $ | 1,755,882 | $ | 97.98 | |||||||||
Total
|
$ | 698.68 |
(1)
|
Based
upon the maximum number of shares of common stock, par value $0.00001 per
share, of Charmed Homes Inc., a Nevada corporation, that may be issued in
connection with the merger described herein, and the value of the target
corporation's stock (see (2)
below).
|
(2)
|
Estimated
solely for purposes of calculating the registration fee required by the
Securities Act of 1933, as amended, and computed pursuant to Rule
457(f)(2) under the Securities Act. There is no market for the
corporation's stock, and the target corporation has an accumulated capital
deficit. The fee was calculated using the maximum number of
shares of IntelaSight, Inc. common stock to be canceled in connection with
the merger described herein, and the current fee rate of $55.80 per
$1,000,000 of securities
registered.
|
(3)
|
$594.23
of the registration fee was paid at the time of the initial filing of the
Company’s Registration Statement on Form S-4, filed with the Commission on
May 15, 2009.
|
Ian
Quinn
President
and CEO of Charmed Homes Inc.
|
David
Ly
President
and CEO of IntelaSight,
Inc.
|
Actions
Taken:
|
Holders
of a majority of Charmed Homes Inc. common stock have approved the
following two actions by written consent in lieu of a special meeting of
the shareholders dated November 21, 2008:
1.
an Amendment to the Charmed
Homes Inc. Articles of Incorporation to change the company's name to
"Iveda Corporation;" and
2.
a reverse split of the
Charmed Homes Inc. common stock whereby each two shares of issued and
outstanding common stock as of December 5, 2008 shall be exchanged for one
share of common stock.
|
|
Record
Date:
|
The
record date for the consent in lieu of special meeting and for determining
shareholders eligible to receive this Notice was the close of business on
November 21, 2008.
|
|
Dissenters'
Rights:
|
No
dissenters' rights are available for Charmed Homes Inc. shareholders under
Nevada law for the merger (which does not require shareholder approval),
the name change or the reverse
split.
|
By
Order of the Board of Directors,
|
||
_______________,
2009
|
Ian
Quinn, President
|
|
Calgary,
Alberta
|
Action
Taken:
|
Holders
of a majority of the outstanding Iveda common stock have approved and
adopted the Merger Agreement among Charmed Homes Inc., Charmed Homes
Subsidiary, Inc., certain shareholders of Charmed Homes Inc., and
IntelaSight, Inc., and have approved the merger contemplated by the Merger
Agreement by written consent in lieu of a special meeting of the
shareholders. The written consent was dated January 8,
2009.
|
|
Record
Date:
|
The
record date for the consent in lieu of special meeting and for determining
shareholders eligible to receive this Notice was the close of business on
January 8, 2009.
|
|
Dissenters'
Rights
|
Each
holder of Iveda shares has the right to dissent from the proposed merger
and to demand payment of the fair value of his or her shares in the event
the merger is completed. To preserve the right to exercise
these dissenters' rights, a holder of Iveda shares must not have voted his
or her shares in favor of the merger agreement and the merger through the
written consent, and also must deliver to Iveda, before ________, 2009, a
written notice to demand payment for his or her shares in the manner
provided under the Washington Business Corporation Act (a copy of the
relevant portions of which is attached as Annex B to the
accompanying joint information statement/prospectus). To
preserve the right to exercise dissenters' rights, a holder of Iveda
shares must also otherwise comply with all requirements of Washington
law. These dissenter's rights are more fully explained under
"The Merger – Dissenters' Rights" in the accompanying joint information
statement/prospectus. If 1% or more of the outstanding shares
of Iveda common stock dissent, then the merger may not be consummated in
the discretion of the Iveda Board of
Directors.
|
By
Order of the Board of Directors,
|
||
_________,
2009
|
David
Ly, CEO
|
|
Mesa,
Arizona
|
QUESTIONS
AND ANSWERS ABOUT THE MERGER, NAME CHANGE AND REVERSE
SPLIT
|
1 | |||
General
Questions and Answers
|
1 | |||
Questions
and Answers for Charmed Shareholders
|
3 | |||
Questions
and Answers for Iveda Shareholders
|
3 | |||
SUMMARY
|
5 | |||
The
Merger and the Merger Agreement (see page 32)
|
5 | |||
Parties
to the Merger
|
5 | |||
IntelaSight,
Inc. (see page 56)
|
5 | |||
Charmed
Homes Inc. (see page 50)
|
6 | |||
Charmed
Homes Subsidiary, Inc.
|
6 | |||
Risk
Factors (see page 21)
|
6 | |||
Recommendation
of the Iveda Board of Directors (see page 49)
|
6 | |||
Recommendation
of the Charmed Board of Directors (see page 48)
|
6 | |||
Share
Ownership of Directors and Executive Officers of Charmed (see page
55)
|
6 | |||
Share
Ownership of Directors and Executive Officers of Iveda (see page
81)
|
7 | |||
Directors
and Executive Officers of Charmed Following the Merger (see page
38)
|
7 | |||
What
is Needed to Complete the Merger? (see page 36)
|
7 | |||
Charmed
and Iveda are Prohibited from Soliciting Other Offers
|
7 | |||
Charmed
and Iveda May Terminate the Merger Agreement Under Specified Circumstances
(see page 37)
|
7 | |||
The
Merger is Intended to Qualify as a Reorganization for United States
Federal Income Tax Purposes (see page 38)
|
8 | |||
Accounting
Treatment of the Merger (see page 39)
|
8 | |||
SUMMARY
SELECTED HISTORICAL FINANCIAL DATA OF CHARMED
|
9 | |||
SUMMARY
SELECTED HISTORICAL FINANCIAL DATA OF IVEDA
|
10 | |||
PRO
FORMA FINANCIAL DATA
|
11 | |||
UNAUDITED
PRO FORMA CONDENSED BALANCE SHEET AND STATEMENT OF OPERATIONS - DECEMBER
31, 2008 AND JANUARY 31, 2009
|
12 | |||
UNAUDITED
PRO FORMA CONDENSED BALANCE SHEET AND STATEMENT OF OPERATIONS - MARCH 31,
2009 AND APRIL 30, 2009
|
14 | |||
COMPARATIVE
HISTORICAL AND PRO FORMA PER SHARE DATA
|
16 | |||
SECURITIES
OWNERSHIP PRE- AND POST-MERGER
|
17 | |||
STOCK
PRICE AND DIVIDEND INFORMATION
|
18 | |||
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING INFORMATION
|
19 | |||
RISK
FACTORS
|
20 | |||
Risk
Factors Involving Iveda
|
20 | |||
The
Audit Report On Iveda's Financial Statements Contains A Going Concern
Opinion
|
20 | |||
Iveda
Is An Emerging Growth Company
|
20 | |||
Iveda's
Ability To Grow Is Dependent Upon The Success Of Iveda's Current And
Future Operations And Iveda's Ability To Obtain Additional
Financing
|
20 | |||
Iveda
Depends On Certain Key Personnel
|
20 | |||
Rapid
Growth May Strain Iveda's Resources
|
21 | |||
Demand
For Iveda's Security And Surveillance Products And Services May Be Lower
Than Iveda Anticipates
|
21 | |||
Iveda
Believes Industry Trends Support Its Open Source Systems, But If Trends
Reverse, Iveda May Experience Decreased Demand
|
22 | |||
Future
Loan Agreements With Lenders May Hinder Iveda's Ability To Operate The
Business By Imposing Restrictive Loan Covenants
|
22 | |||
Risks
Associated with the Surveillance and Remote Security
Industry
|
22 | |||
Iveda
Depends On Third Party Manufacturers And Suppliers For The Products It
Sells
|
23 |
Iveda
Operates In A Highly-Competitive Industry And its Failure To Compete
Effectively May Adversely Affect Its Ability To Generate
Revenue
|
23 | |||
Future
Legislation Or Governmental Regulations Or Policies Could Have A
Significant Impact On Iveda's Operations
|
24 | |||
Regulation
Of The Telecommunications Industry And The Internet May Impact Iveda's
Operations
|
24 | |||
The
Failure Of Iveda's Systems Could Result In A Material Adverse
Effect
|
24 | |||
If
Iveda's Security Measures Are Breached And Unauthorized Access Is
Obtained, Existing And Potential Customers Might Not Perceive Iveda's
Services As Being Secure And Might Terminate Or Fail To Purchase Iveda's
Services
|
25 | |||
The
Timing Of Iveda's Revenues Can Vary Depending On How Long Customers Take
To Evaluate Iveda's Services
|
25 | |||
Iveda
Will Rely On Both Iveda's Internal Sales Force And Resellers To Distribute
Iveda's Security Products And Services To Customers
|
25 | |||
Government
Contracts Generally Contain Rights And Remedies Which Could Reduce The
Value Of Such Contracts, Or Result In Losses
|
26 | |||
There
Is A Shortage Of Qualified Electricians. Since The Majority Of Iveda's
Work Is Performed By Electricians, This Shortage May Negatively Impact
Iveda's Business, Including Its Ability To Grow
|
26 | |||
The
Estimates Iveda Uses In Placing Bids Could Be Materially Incorrect,
Resulting In Possible Losses
|
26 | |||
Risks
Related to Iveda's Intellectual Property
|
27 | |||
Iveda
Depends On its Intellectual Property
|
27 | |||
Iveda
Could Incur Substantial Costs Defending its Intellectual Property From
Infringement By Others
|
27 | |||
Iveda
Could Incur Substantial Costs Defending Against Claims That Its Products
Infringe On The Proprietary Rights Of Others
|
27 | |||
Risk
Factors Involving Charmed Stock and the Merger
|
28 | |||
Charmed
Shares Are "Penny Stock"
|
28 | |||
Iveda
Shareholders Will Experience Dilution As Part Of The
Merger
|
28 | |||
There
Will Be A Limited Market For Charmed Common Stock Following The
Merger
|
28 | |||
Post-Merger
Reporting Obligations as a Public Company Will Be
Costly
|
28 | |||
Once
The Merger Closes, Iveda Will Have Limited Ability to Unwind the
Merger
|
29 | |||
THE
MERGER
|
30 | |||
General
Terms of the Transaction; The Merger Agreement
|
30 | |||
Background
and Reasons for the Offer and Subsequent Merger
|
30 | |||
Representations
and Warranties
|
32 | |||
Conduct
of Iveda's Business Before Completion of the Merger
|
34 | |||
Conduct
of Charmed's Business Before Completion of the Merger
|
34 | |||
Summary
of Principal Conditions to Completing the Merger
|
34 | |||
Indemnification
of Iveda and its Directors and Officers
|
35 | |||
Termination
of the Merger Agreement
|
35 | |||
Effect
of Termination of the Merger Agreement
|
36 | |||
Directors
and Executive Officers of Charmed Following the Merger
|
36 | |||
Securities
and Employment Agreements to be Received in the Merger
|
36 | |||
Federal
Income Tax Considerations
|
37 | |||
Accounting
Treatment of the Merger
|
37 | |||
Regulatory
Requirements
|
37 | |||
Appraisal
Rights for Charmed Shareholders
|
37 | |||
Dissenters'
Rights as to Iveda Shares
|
37 | |||
The
Merger Agreement – Investor Disclaimer
|
38 | |||
OTHER
ACTIONS APPROVED BY THE CHARMED SHAREHOLDERS
|
39 | |||
Approval
of the Amendment to the Articles of Incorporation
|
39 |
Description
of the Amended Articles and Reasons for the Amendment
|
39 | |||
Vote
Required
|
40 | |||
Effective
Date
|
40 | |||
Dissenters'
Rights of Appraisal
|
40 | |||
Approval
of the Reverse Stock Split
|
40 | |||
General
|
40 | |||
Purpose
of the Reverse Split
|
40 | |||
Principal
Effects of the Reverse Split
|
41 | |||
Procedure
for Effecting Exchange of Stock Certificates
|
43 | |||
No
Appraisal Rights
|
43 | |||
United
States Federal Income Tax Consequences
|
43 | |||
Vote
Required
|
44 | |||
Effective
Date
|
44 | |||
Costs
|
44 | |||
Record
Date
|
45 | |||
Outstanding
Shares and Voting Rights
|
45 | |||
Material
Terms of the Common Stock
|
45 | |||
ACTION
BY WRITTEN CONSENT IN LIEU OF SPECIAL MEETING OF THE CHARMED
SHAREHOLDERS
|
46 | |||
Items
of Business
|
46 | |||
Recommendation
of the Charmed Board of Directors
|
46 | |||
Method
of Voting; Record Date; Stock Entitled to Receive
Notice
|
46 | |||
Required
Vote
|
46 | |||
Share
Ownership of Charmed Directors and Executive Officers
|
46 | |||
Contact
for Questions
|
46 | |||
CONSENT
IN LIEU OF SPECIAL MEETING OF IVEDA SHAREHOLDERS
|
47 | |||
Items
of Business
|
47 | |||
Recommendation
of the Iveda Board of Directors
|
47 | |||
Method
of Voting; Record Date; Stock Entitled to Receive
Notice
|
47 | |||
Required
Vote
|
47 | |||
Share
Ownership of Iveda Directors and Executive Officers
|
47 | |||
Contact
for Questions
|
47 | |||
INFORMATION
ABOUT CHARMED
|
48 | |||
Description
of Business
|
48 | |||
Description
of Property
|
48 | |||
Legal
Proceedings
|
48 | |||
Market
Price of and Dividends on the Registrant's Common Equity and Related
Shareholder Matters
|
48 | |||
Securities
Authorized For Issuance Under Equity Compensation
Plans
|
48 | |||
Selected
Financial Information
|
48 | |||
Supplementary
Financial Information
|
48 | |||
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
48 | |||
Operations
to Date
|
49 | |||
Future
Operations
|
50 | |||
Limited
Operating History; Need For Additional Capital
|
50 | |||
Results
of Operations
|
50 | |||
Liquidity
and capital resources
|
50 | |||
Recent
Accounting Pronouncements
|
51 | |||
Changes
in and Disagreements With Accountants on Accounting and Financial
Disclosure
|
52 | |||
Quantitative
and Qualitative Disclosures About Market Risk
|
52 | |||
Disclosure
of Commission Position on Indemnification for Securities Act
Liabilities
|
52 | |||
Management
of Charmed
|
52 | |||
Management
Contracts
|
53 |
Executive
Compensation
|
53 | |||
Security
Ownership of Directors, Officers and Certain Beneficial Owners of
Charmed
|
53 | |||
Certain
Relationships and Related Transactions of Charmed
|
53 | |||
INFORMATION
ABOUT IVEDA
|
54 | |||
General
Information
|
54 | |||
Overview
|
54 | |||
Problems
with Existing Systems
|
55 | |||
Business
Strategy
|
56 | |||
The
Iveda Solution
|
57 | |||
Order
Fulfillment
|
59 | |||
Pricing
Strategy
|
59 | |||
Government
Contracts
|
60 | |||
Private
Sector Contracts
|
61 | |||
Sales
and Marketing
|
61 | |||
Market
Segmentation
|
62 | |||
Marketing
Strategy
|
62 | |||
Sales
Strategy
|
63 | |||
Strategic
Partnerships
|
64 | |||
Pending
Law Enforcement Contracts
|
64 | |||
Other
Information
|
64 | |||
Direct
Competitors
|
66 | |||
Indirect
Competitors
|
66 | |||
Property
|
67 | |||
Legal
Matters
|
68 | |||
Management's
Discussion and Analysis of Financial Condition and Results of
Operations
|
68 | |||
Overview
|
68 | |||
Application
of Critical Accounting Policies
|
68 | |||
Liquidity
and Capital Resources
|
74 | |||
Management
|
76 | |||
Executive
Compensation
|
79 | |||
Compensation
of Directors
|
79 | |||
Indemnification
of Directors and Officers
|
80 | |||
Securities
Ownership of Certain Beneficial Owners and Management
|
80 | |||
Certain
Relationships and Related Transactions
|
80 | |||
COMPARISON
OF SHAREHOLDER RIGHTS
|
81 | |||
Authorized
Capital Stock
|
81 | |||
Terms
of Charmed Common Stock
|
82 | |||
Terms
of Iveda Common Stock
|
82 | |||
Terms
of Charmed Preferred Stock
|
82 | |||
Terms
of Iveda Preferred Stock
|
82 | |||
Voting
Groups
|
82 | |||
Cumulative
Voting
|
83 | |||
Voting
Rights Generally
|
83 | |||
Amendments
to the Articles of Incorporation
|
84 | |||
Amendments
to Bylaws
|
85 | |||
Vote
Required for Merger and Other Transactions
|
85 | |||
Directors
|
85 | |||
Classification
of Board of Directors
|
86 | |||
Election
of Board of Directors
|
86 | |||
Removal
of Directors
|
86 | |||
Newly
Created Directorships and Vacancies
|
86 | |||
Limitation
of Director's Liability
|
87 |
Indemnification
of Directors and Officers
|
87 | |||
Special
Meeting of Shareholders; Action by Consent
|
88 | |||
Business
Combinations Involving a Change of Control
|
89 | |||
Anti-takeover
Provisions
|
89 | |||
Dissenters'
Rights
|
90 | |||
Dividends
and Distributions
|
90 | |||
Transactions
with Directors and Officers of the Company
|
91 | |||
Preemptive
Rights
|
91 | |||
EXPERTS
|
92 | |||
INTEREST
OF NAMED EXPERTS AND COUNSEL
|
92 | |||
LEGAL
MATTERS
|
92 | |||
WHERE
YOU CAN FIND MORE INFORMATION
|
92 | |||
Available
Information
|
92 |
A:
|
IntelaSight,
Inc., doing business as Iveda Solutions ("Iveda") and Charmed Homes Inc.
("Charmed") have agreed to combine their companies under the terms of a
merger agreement (the "Merger Agreement") that is described in this
information statement/prospectus (the "information
statement/prospectus"). A copy of the Merger Agreement is
attached to this information statement/prospectus as Annex A. The
most material terms of the proposed merger (the "Merger") are as
follows:
|
|
·
|
Iveda
provides remote video monitoring services and currently has clients in
Arizona, California, and Minnesota. Charmed
previously developed a single residential property in Calgary, Alberta,
Canada, which was sold in the summer of 2008. See "Summary of
the Terms of the Merger - Parties to the Merger" on page 5 and
"Information About Iveda" on page 54
below.
|
|
·
|
Charmed
Homes Subsidiary, Inc. (the "Merger Sub"), a wholly-owned subsidiary of
Charmed formed specifically to engage in the Merger, will merge with and
into Iveda, resulting in Iveda becoming a wholly-owned subsidiary of the
Company. See "The Merger – General Terms of the Transaction" on
page 30 below.
|
|
·
|
The
former shareholders of Iveda will receive a number of shares of Charmed's
common stock such that they will own not less than 90% of Charmed's common
stock post-Merger. The former option and warrant holders of
Iveda will also receive replacement options and warrants to purchase
1,755,882 shares of Charmed's common stock with substantially equivalent
value to Iveda's outstanding options and warrants. See "The
Merger – General Terms of the Transaction" on page 30
below.
|
|
·
|
The
consummation of the Merger is subject to: (i) Iveda shareholder
approval of the transactions contemplated by the Merger Agreement (already
obtained by written consent), with the number of dissenting shares not
exceeding 1% of Iveda's outstanding stock; (ii) Charmed shareholder
approval of a reverse split and an amendment to the Company's articles of
incorporation to change the Company's name to "Iveda Corporation" (already
obtained by written consent); (iii) the sale by Ian Quinn and Kevin
Liggins of 5 million pre-reverse split shares of Charmed's common stock to
Iveda for cash consideration of $200,000; (iv) the adoption by Charmed's
Board of a stock option plan substantially similar to Iveda's existing
stock option plan and the authorization by Charmed's Board of warrants to
purchase Charmed stock with substantially similar terms as the Iveda
warrants. See "The Merger – Summary of Principal Conditions to
Completing the Merger" on page 34
below.
|
|
·
|
The
Merger Agreement contains representations and warranties made by Iveda,
Charmed, the Merger Sub, and Ian Quinn and Kevin Liggins, Charmed's
principal shareholders. Iveda, Charmed and the Merger Sub also
made certain covenants relating to the conduct of their respective
businesses between the time the Merger Agreement was signed and the
closing of the Merger, including providing the other parties with access
to their records. See "The Merger – Representations and
Warranties" on page 32, "The Merger – Conduct of Iveda's Business Before
Completion of the Merger" on page 34, and "The Merger – Conduct of
Charmed's Business Before Completion of the Merger" on page 34
below.
|
|
·
|
The
Board of Directors of Charmed following the Merger will consist of four
directors selected by Iveda. The officers of Charmed following
the Merger will also be selected by Iveda. See "The Merger –
Directors and Executive Officers of Charmed Following the Merger" on page
36 below.
|
A:
|
Iveda's
management believes that the liquidity offered by a public company such as
Charmed will provide an attractive opportunity for investors who would not
be willing to invest in Iveda if it were to remain a private
company. Given Iveda's projected capital needs in the near
future as it commences full-scale marketing of its products and services,
it is critical that Iveda be made as attractive to potential investors as
possible, and Iveda's management believes the proposed Merger will
accomplish this.
|
Q:
|
What
benefits will principal shareholders, directors and officers, and
affiliates receive as a result of the
Merger?
|
A:
|
Iveda's
principal shareholders, directors, and officers, and their affiliates,
will generally not receive any special benefits as a result of the
Merger. These individuals will receive shares in Charmed to the
extent they hold securities that are subject to conversion upon completion
of the Merger at the same conversion rate as other security
holders. David Ly, Iveda's CEO, Bob Brilon, Iveda's CFO, and
Luz Berg, Iveda's Senior VP of Operations & Marketing, will enter into
new employment agreements with Charmed upon the closing of the Merger, but
these new agreements will contain substantially similar terms to Mr. Ly,
Mr. Brilon and Ms. Berg's current employment agreements with the
Company.
|
A:
|
Iveda
and Charmed expect to complete the Merger after the 20 day waiting period
required under Washington law has elapsed. This waiting period
will begin on the date on which this information statement/prospectus is
mailed to all Iveda shareholders to notify them of the execution of the
written consent to approve the Merger. The name change and
reverse split, which must occur prior to or concurrent with the Merger
closing, cannot take effect until at least 20 days have elapsed from the
date on which this information statement/prospectus has been mailed to all
Charmed shareholders.
|
Q:
|
Has
the Board of Directors of Iveda recommended approval of the Merger? (see
page 47)
|
A:
|
The
Iveda Board of Directors has unanimously recommended that Iveda
shareholders vote "FOR" the proposal to approve and adopt the Merger
Agreement and approve the Merger.
|
Q:
|
Has
the Board of Directors of Charmed recommended approval of the name change
and reverse split and approved the Merger? (see page
46)
|
A:
|
The
Charmed Board of Directors has unanimously approved the Merger and
recommended that Charmed shareholders vote "FOR" the proposal to approve
the name change and approve the reverse
split.
|
A:
|
Please
review this information statement/prospectus carefully. No
further action is required on your part unless you are an Iveda
shareholder who elects to dissent from the
Merger.
|
A:
|
The
Charmed Board of Directors approved the Merger on behalf of Charmed and
Charmed's wholly-owned subsidiary, the Merger Sub. The Charmed
Board of Directors decided to solicit consents in lieu of a special
meeting of Charmed shareholders to approve the name change and reverse
split, and on November 21, 2008, holders of 74.74% of the outstanding
voting stock of Charmed signed a written consent to approve the name
change and reverse split.
|
A:
|
The
record date for the written consent was November 21, 2008, and each
Charmed shareholder or joint holder as of the close of business on
November 21, 2008 is entitled to receive a copy of this information
statement/prospectus.
|
Q:
|
What
was the vote of Charmed shareholders required to approve the name change
and reverse split, and what approvals were required to approve the Merger?
(see page 46)
|
A:
|
Approval
and adoption of the name change and reverse split required the affirmative
vote of the holders of a majority of the shares of Charmed common stock
outstanding as of the record date for the written consent. No
approval of the Charmed shareholders was required for the Merger and the
Merger Agreement – the Charmed Board of Directors approved the Merger and
approved and adopted the Merger Agreement for Charmed and the Merger
Sub.
|
A:
|
Nevada
law does not provide dissenters' rights to Charmed shareholders with
respect to approval of the Merger, the name change or the reverse
split.
|
A:
|
If
you have any questions about the Merger, you should
contact:
|
A:
|
The
Iveda Board of Directors decided to solicit consents in lieu of a special
meeting of Iveda shareholders, and on January 8, 2009, holders of 64.87%
of the outstanding voting stock of Iveda signed a written consent to
approve the Merger.
|
A:
|
The
record date for the written consent was January 8, 2009, and each Iveda
shareholder or joint holder as of the close of business on January 8, 2009
is entitled to receive a copy of this information
statement/prospectus.
|
Q:
|
What
was the vote of Iveda shareholders required to approve and adopt the
Merger Agreement and approve the Merger? (see page
47)
|
A:
|
Approval
and adoption of the Merger Agreement required the affirmative vote of the
holders of a majority of the shares of Iveda common stock outstanding as
of the record date for the written
consent.
|
Q:
|
As
an Iveda shareholder, what happens if I dissent from the transaction? (see
page 37)
|
A:
|
If
you dissent, you will be paid fair market value for your shares under
Washington law, but only if you follow the procedures outlined on page
37.
|
Q:
|
As
an Iveda shareholder, what will I receive upon completion of the Merger?
(see page 30)
|
A:
|
Upon
completion of the Merger, holders of Iveda common stock will be entitled
to receive one share of Charmed common stock for each share of Iveda
common stock owned at the effective time of the Merger. Instead
of a fractional share of Charmed common stock, you will be entitled to
receive an amount of cash equal to the value of the fractional share
remaining after aggregating all of your shares of Iveda common stock held
in a single account, based on $1.00 per share of Charmed common stock,
which the Board of Directors of Charmed has determined is the fair market
value of these shares. Upon completion of the Merger, holders
of options and warrants to purchase Iveda common stock will receive an
option or warrant to purchase Charmed common stock in exchange for
cancellation of their Iveda options/warrants at the same exchange ratio as
the common shareholders.
|
A:
|
The
Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended,
which is referred to in this information statement/prospectus as the
Code. For U.S. federal income tax purposes, shareholders of
Iveda whose shares of Iveda stock are exchanged in the Merger for shares
of Charmed stock will not recognize gain or loss, except to the extent of
the cash, if any, received in lieu of a fractional share of stock of the
combined company. See the section entitled "The Merger—Federal Income Tax
Considerations" beginning on page
37.
|
Q:
|
As
an Iveda shareholder, will I be able to trade the Charmed common stock
that I receive in connection with the
Merger?
|
A:
|
The
shares of Charmed common stock issued in connection with the Merger will
be freely tradable. Generally, persons who are deemed to be
affiliates of Iveda must comply with Rule 144 under the Securities
Act of 1933 if they wish to sell or otherwise transfer any of the shares
of Charmed common stock received in connection with the
Merger. You will be notified if you are an affiliate of
Iveda.
|
A:
|
Do
not send in your certificates at this time. Promptly following
completion of the Merger, Securities Transfer Corporation, Charmed's
transfer agent and the exchange agent for the Merger, will send you
written instructions for exchanging your Iveda share certificates for
Charmed stock certificates.
|
A:
|
If
you have any questions about the Merger, you should
contact:
|
|
·
|
the
sale of 5 million pre-reverse split Charmed shares to Iveda by Ian Quinn
and Kevin Liggins;
|
|
·
|
completion
of a 1:2 reverse stock split by
Charmed;
|
|
·
|
filing
of all required tax returns by
Charmed;
|
|
·
|
Charmed
must have no liabilities and no
assets;
|
|
·
|
adoption
of a stock option plan by Charmed that is substantially similar to the
existing Iveda option plan and authorization of warrants by Charmed with
substantially similar terms to the existing Iveda warrants;
and
|
|
·
|
Charmed
and its officers and directors must be current on all required filings
with the SEC.
|
|
·
|
the
Merger is not completed by July 31,
2009;
|
|
·
|
the
required approval of the Iveda shareholders is not obtained or the number
of dissenting shares exceeds 1% of Iveda's total outstanding
shares;
|
|
·
|
the
other party breaches any material representations, warranties or covenants
in the Merger Agreement, and breach is not cured in 30 days after notice;
or such that its conditions to completion of the Merger regarding
representations, warranties or covenants can not be satisfied;
or
|
|
·
|
both
the Board of Iveda and the Board of Charmed consent to
termination.
|
For
the three
months
ended
April
30,
2009
|
For
the year
ended
January
31,
2009
|
For
the year
ended
January
31, 2008
|
Inception
(June
27, 2006)
through
January
31, 2009
|
|||||||||||||
Income
Statement Data:
|
||||||||||||||||
Total
revenue
|
$ | 0 | $ | 505,665 | $ | 0 | $ | 505,665 | ||||||||
Cost
of goods sold
|
$ | 0 | $ | 490,598 | $ | 490,598 | ||||||||||
Total
expenses
|
$ | 200,000 | $ | 51,568 | $ | 50,569 | $ | 121,023 | ||||||||
Net
loss
|
$ | (200,000 | ) | $ | (36,501 | ) | $ | (50,569 | ) | $ | (105,956 | ) | ||||
Per
Share Data:
|
||||||||||||||||
Basic
and diluted net loss per share
|
$ | (.08 | ) | $ | (.01 | ) | $ | (.01 | ) | |||||||
Basic
and diluted weighted average shares outstanding
|
6,690,000 | 6,690,000 | $ | 5,972,000 | ||||||||||||
Balance
Sheet Data:
|
||||||||||||||||
Current
assets
|
$ | 83,531 | $ | 86,957 | $ | 512,592 | ||||||||||
Total
assets
|
$ | 83,531 | $ | 86,957 | $ | 512,592 | ||||||||||
Current
liabilities
|
$ | 13,843 | $ | 3,413 | $ | 398,547 | ||||||||||
Total
liabilities
|
$ | 13,843 | $ | 3,413 | $ | 398,547 | ||||||||||
Stockholders' equity
|
$ | 69,688 | $ | 83,544 | $ | 114,045 |
For
the three
months
ended
March
31, 2009
|
For
the three
months
ended
March 31,
2008
|
For
the year
ended
December 31,
2008
|
For
the year
ended
December 31,
2007
|
|||||||||||||
Income
Statement Data:
|
||||||||||||||||
Total
revenue
|
$ | 223,824 | $ | 177,057 | $ | 506,285 | $ | 544,259 | ||||||||
Operating
expenses
|
$ | 568,966 | $ | 215,437 | $ | 1,661,718 | $ | 701,135 | ||||||||
Net loss
|
$ | (517,121 | ) | $ | (65,487 | ) | $ | (2,100,797 | ) | $ | (282,319 | ) | ||||
Per
Share Data:
|
||||||||||||||||
Basic and diluted net loss
per share
|
$ | (0.06 | ) | $ | (0.01 | ) | $ | (0.30 | ) | $ | (0.04 | ) | ||||
Basic and diluted weighted
average shares outstanding
|
8,819,304 | 6,305,423 | 7,004,583 | 6,589,121 | ||||||||||||
Balance
Sheet Data:
|
||||||||||||||||
Current
assets
|
$ | 78,237 | $ | 120,511 | $ | 387,222 | $ | 66,608 | ||||||||
Total
assets
|
$ | 427,887 | $ | 874,387 | $ | 748,997 | $ | 696,361 | ||||||||
Current
liabilities
|
$ | 322,469 | $ | 384,064 | $ | 206,630 | $ | 207,319 | ||||||||
Total
liabilities
|
$ | 424,803 | $ | 431,055 | $ | 323,792 | $ | 210,044 | ||||||||
Stockholders'
equity
|
$ | 3,084 | $ | 332 | $ | 425,205 | $ | 486,317 |
Unaudited
Pro Forma Condensed Balance Sheets
|
Iveda
Solutions
|
Charmed
Homes
|
|||||||||||||||
December
31,
|
January
31,
|
Pro
Forma
|
Pro
Forma
|
||||||||||||||
2008
|
2009
|
Adjustments
|
Notes
|
Combined
|
|||||||||||||
ASSETS
|
|||||||||||||||||
CURRENT
ASSETS
|
|||||||||||||||||
Cash
and Cash Equivalents
|
$ | 335,189 | $ | 86,957 | (86,957 | ) |
(a)
|
$ | 335,189 | ||||||||
Accounts
Receivable
|
26,971 | 26,971 | |||||||||||||||
Prepaid
Expenses
|
11,532 | 11,532 | |||||||||||||||
Inventory
|
13,530 | 13,530 | |||||||||||||||
Total
Current Assets
|
387,222 | 86,957 | (86,957 | ) | 387,222 | ||||||||||||
PROPERTY
AND EQUIPMENT
|
|||||||||||||||||
Office
Equipment
|
87,050 | 87,050 | |||||||||||||||
Furniture
and Fixtures
|
22,712 | 22,712 | |||||||||||||||
Software
|
36,634 | 36,634 | |||||||||||||||
Leased
Equipment
|
213,460 | 213,460 | |||||||||||||||
Leasehold
Improvements
|
34,495 | 34,495 | |||||||||||||||
Total
Property and Equipment
|
394,351 | 394,351 | |||||||||||||||
Less:
Accumulated Depreciation
|
99,099 | 99,099 | |||||||||||||||
Property
and Equipment, Net
|
295,252 | 295,252 | |||||||||||||||
OTHER
ASSETS
|
|||||||||||||||||
Deferred
Income Taxes
|
- | ||||||||||||||||
Escrow
Deposits
|
50,000 | (50,000 | ) |
(b)
|
- | ||||||||||||
Deposits
|
16,523 | 16,523 | |||||||||||||||
Total
Assets
|
$ | 748,997 | $ | 86,957 | $ | (136,957 | ) | 698,997 | |||||||||
2008
|
- | ||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||
CURRENT
LIABILITIES
|
|||||||||||||||||
Current
Portion of Capital Lease Obligations
|
$ | 65,916 | 65,916 | ||||||||||||||
Notes
Payable
|
- | - | |||||||||||||||
Accounts
Payable
|
48,465 | 3,413 | (3,413 | ) |
(a)
|
48,465 | |||||||||||
Deferred
Revenue
|
21,964 | 21,964 | |||||||||||||||
Billings in Excess of Costs and Estimated Earnings on
|
- | ||||||||||||||||
Uncompleted
Contracts
|
- | - | |||||||||||||||
Accrued
Expenses
|
70,285 | 150,000 |
(c)
|
220,285 | |||||||||||||
Total
Current Liabilities
|
206,630 | 3,413 | 146,587 | 356,630 | |||||||||||||
LONG-TERM
LIABILITIES
|
|||||||||||||||||
Capital
Lease Obligations, Net of Current Portion
|
117,162 | 117,162 | |||||||||||||||
Total
Liabilities
|
323,792 | 3,413 | 146,587 | 473,792 | |||||||||||||
STOCKHOLDERS'
EQUITY
|
|||||||||||||||||
Common
Stock, $0.001 par value; 40,000,000 shares
|
8,774 | 845 |
(f)
|
9,619 | |||||||||||||
67 | (67 | ) |
(e)
|
- | |||||||||||||
issued
and outstanding, as of December 31, 2008 and
|
|
||||||||||||||||
Preferred
Stock, $0.001 par value; 10,000,000 shares
|
- | ||||||||||||||||
Additional
Paid-In Capital
|
3,385,251 | 173,933 | (173,933 | ) |
(e)
|
3,385,251 | |||||||||||
(845 | ) |
(f)
|
|||||||||||||||
Donated
Capital
|
15,500 | (15,500 | ) |
(e)
|
- | ||||||||||||
Accumulated
Deficit
|
(2,968,820 | ) | (105,956 | ) | (94,044 | ) |
(d)
|
(3,168,820 | ) | ||||||||
Total
Stockholders' Equity
|
425,205 | 83,544 | (283,544 | ) | 225,205 | ||||||||||||
Total
Liabilities and Stockholders' Equity
|
$ | 748,997 | $ | 86,957 | $ | (136,957 | ) | 698,997 |
Iveda
Solutions
|
Charmed
Homes
|
Pro
Forma
|
|||||||||||||||
12
Months ended
|
12
Months ended
|
Pro
Forma
|
Combined
|
||||||||||||||
Unaudited
Pro Forma Condensed Statement of Operations
|
December
31,
|
January
31,
|
Adjustments
|
January
31,
|
|||||||||||||
2008
|
2009
|
2009
|
|||||||||||||||
REVENUE
|
$ | 506,285 | 505,665 | 1,011,950 | |||||||||||||
COST
OF REVENUE
|
357,184 | 490,598 | 847,782 | ||||||||||||||
GROSS
PROFIT
|
149,101 | 15,067 | 164,168 | ||||||||||||||
OPERATING
EXPENSES
|
1,661,718 | 51,568 | 200,000 |
(g)
|
1,913,286 | ||||||||||||
LOSS
FROM OPERATIONS
|
(1,512,617 | ) | (36,501 | ) | (1,549,118 | ) | |||||||||||
OTHER
INCOME (EXPENSE)
|
|||||||||||||||||
Interest
Income
|
5,994 | 5,994 | |||||||||||||||
Interest
Expense
|
(35,804 | ) | (35,804 | ) | |||||||||||||
Total
Other Income (Expense)
|
(29,810 | ) | (29,810 | ) | |||||||||||||
LOSS
BEFORE INCOME TAXES
|
(1,542,427 | ) | (1,542,427 | ) | |||||||||||||
BENEFIT
(PROVISION) FOR INCOME TAXES
|
(558,370 | ) | (558,370 | ) | |||||||||||||
NET
LOSS
|
$ | (2,100,797 | ) | (36,501 | ) | $ | (2,137,298 | ) | |||||||||
BASIC
LOSS PER SHARE
|
$ | (0.30 | ) | $ | (0.01 | ) | $ | (0.31 | ) | ||||||||
DILUTED
LOSS PER SHARE
|
$ | (0.30 | ) | $ | (0.01 | ) | $ | (0.31 | ) | ||||||||
Weighted
Average Shares Outstanding
|
7,004,583 | 6,690,000 | 7,004,583 |
(a)
|
To
eliminate all assets and liabilities of Charmed per merger
agreement
|
(b)
|
To
recognize the $50,000 escrow deposit to certain Charmed shareholders as a
transaction cost
|
(c)
|
To
record the $150,000 commitment at closing to certain Charmed
shareholders
|
(d)
|
Eliminate
$105,956 of Accumulated deficit and reflect $200,000 of transaction costs
to certain Charmed shareholders
|
(e)
|
Adjustment
to eliminate Charmed Common Shares, Additional Paid-in Capital and Donated
Capital
|
(f)
|
Adjust
Common Stock to reflect the par value of 845,000 shares that remain with
Charmed shareholders after
merger
|
(g)
|
Reflect
the $200,000 transaction costs on Operating
Statement
|
Unaudited
Pro Forma Condensed Balance Sheets
|
Iveda
Solutions
|
Charmed
Homes
|
||||||||||||||||
March
31,
|
April
30,
|
Pro
Forma
|
Pro
Forma
|
|||||||||||||||
2009
|
2009
|
Adjustments
|
Notes
|
Combined
|
||||||||||||||
ASSETS
|
||||||||||||||||||
CURRENT
ASSETS
|
||||||||||||||||||
Cash
and Cash Equivalents
|
$ | 24,900 | $ | 83,531 | (83,531 | ) |
(a)
|
$ | 24,900 | |||||||||
Accounts
Receivable
|
48,839 | 48,839 | ||||||||||||||||
Prepaid
Expenses
|
4,498 | 4,498 | ||||||||||||||||
Inventory
|
0 | - | ||||||||||||||||
Total
Current Assets
|
78,237 | 83,531 | (83,531 | ) | 78,237 | |||||||||||||
PROPERTY
AND EQUIPMENT
|
||||||||||||||||||
Office
Equipment
|
87,589 | 87,589 | ||||||||||||||||
Furniture
and Fixtures
|
27,416 | 27,416 | ||||||||||||||||
Software
|
36,800 | 36,800 | ||||||||||||||||
Leased
Equipment
|
213,460 | 213,460 | ||||||||||||||||
Leasehold
Improvements
|
36,280 | 36,280 | ||||||||||||||||
Total
Property and Equipment
|
401,545 | 401,545 | ||||||||||||||||
Less:
Accumulated Depreciation
|
118,418 | 118,418 | ||||||||||||||||
Property
and Equipment, Net
|
283,127 | 283,127 | ||||||||||||||||
OTHER
ASSETS
|
||||||||||||||||||
Deferred
Income Taxes
|
- | |||||||||||||||||
Escrow
Deposits
|
50,000 | (50,000 | ) |
(b)
|
- | |||||||||||||
Deposits
|
16,523 | 16,523 | ||||||||||||||||
Total
Assets
|
$ | 427,887 | $ | 83,531 | $ | (133,531 | ) | 377,887 | ||||||||||
2008
|
- | |||||||||||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||
CURRENT
LIABILITIES
|
||||||||||||||||||
Current
Portion of Capital Lease Obligations
|
$ | 65,916 | 65,916 | |||||||||||||||
Notes
Payable
|
50,000 | 50,000 | ||||||||||||||||
Accounts
Payable
|
118,515 | 13,843 | (13,843 | ) |
(a)
|
118,515 | ||||||||||||
Deferred
Revenue
|
- | - | ||||||||||||||||
Billings
in Excess of Costs and Estimated Earnings on
|
- | |||||||||||||||||
Uncompleted
Contracts
|
- | - | ||||||||||||||||
Accrued
Expenses
|
85,428 | 150,000 |
(
c )
|
235,428 | ||||||||||||||
Total
Current Liabilities
|
319,859 | 13,843 | 136,157 | 469,859 | ||||||||||||||
LONG-TERM
LIABILITIES
|
||||||||||||||||||
Capital
Lease Obligations, Net of Current Portion
|
104,944 | 104,944 | ||||||||||||||||
Total
Liabilities
|
424,803 | 13,843 | 136,157 | 574,803 | ||||||||||||||
STOCKHOLDERS'
EQUITY
|
||||||||||||||||||
Common
Stock, $0.001 par value; 40,000,000 shares
|
8,859 | 845 |
(f)
|
9,704 | ||||||||||||||
67 | (67 | ) |
(e)
|
- | ||||||||||||||
issued
and outstanding, as of December 31, 2008 and
|
||||||||||||||||||
Preferred
Stock, $0.001 par value; 10,000,000 shares
|
- | |||||||||||||||||
Additional
Paid-In Capital
|
3,480,166 | 173,933 | (173,933 | ) |
(e)
|
3,480,166 | ||||||||||||
(845 | ) |
(f)
|
||||||||||||||||
Donated
Capital
|
17,000 | (17,000 | ) |
(e)
|
- | |||||||||||||
Accumulated
Deficit
|
(3,485,941 | ) | (121,312 | ) | (78,688 | ) |
(d)
|
(3,685,941 | ) | |||||||||
Total
Stockholders' Equity
|
3,084 | 69,688 | (269,688 | ) | (196,916 | ) | ||||||||||||
Total
Liabilities and Stockholders' Equity
|
$ | 427,887 | $ | 83,531 | $ | (133,531 | ) | 377,887 |
Iveda
Solutions
|
Charmed
Homes
|
Pro
Forma
|
||||||||||||||||
3
Months ended
|
3
Months ended
|
Pro
Forma
|
Combined
|
|||||||||||||||
Unaudited
Pro Forma Condensed Statement of Operations
|
March
31,
|
April
30,
|
Adjustments
|
April
30,
|
||||||||||||||
2009
|
2009
|
2009
|
||||||||||||||||
REVENUE
|
$ | 223,824 | - | 223,824 | ||||||||||||||
COST
OF REVENUE
|
165,232 | - | 165,232 | |||||||||||||||
GROSS
PROFIT
|
58,592 | - | 58,592 | |||||||||||||||
OPERATING
EXPENSES
|
568,966 | 15,356 | 200,000 |
(g)
|
784,322 | |||||||||||||
LOSS
FROM OPERATIONS
|
(510,374 | ) | (15,356 | ) | (525,730 | ) | ||||||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||||
Interest
Income
|
1,184 | 1,184 | ||||||||||||||||
Interest
Expense
|
(7,931 | ) | (7,931 | ) | ||||||||||||||
Total
Other Income (Expense)
|
(6,747 | ) | (6,747 | ) | ||||||||||||||
LOSS
BEFORE INCOME TAXES
|
(517,121 | ) | (517,121 | ) | ||||||||||||||
BENEFIT
(PROVISION) FOR INCOME TAXES
|
- | - | ||||||||||||||||
NET
LOSS
|
$ | (517,121 | ) | (15,356 | ) | (200,000 | ) | $ | (732,477 | ) | ||||||||
BASIC
LOSS PER SHARE
|
$ | (0.06 | ) | $ | - | $ | (0.08 | ) | ||||||||||
DILUTED
LOSS PER SHARE
|
$ | (0.06 | ) | $ | - | $ | (0.08 | ) | ||||||||||
Weighted
Average Shares Outstanding
|
8,819,304 | 6,690,000 | 8,819,304 |
Notes
to the Unaudited Pro Forma Condensed
Consolidated
|
Book
Value
|
|||||||||||||||||
$ | (0.02 | ) |
(a)
|
To
eliminate all assets and liabilities of Charmed per merger
agreement
|
(b)
|
To
recognize the $50,000 escrow deposit to certain Charmed shareholders as a
transaction cost
|
(
c )
|
To
record the $150,000 commitment at closing to certain Charmed
shareholders
|
(d)
|
Eliminate
$121,312 of Accumulated deficit and reflect $200,000 of transaction costs
to certain Charmed shareholders
|
(e)
|
Adjustment
to eliminate Charmed Common Shares, Additional Paid-in Capital and Donated
Capital
|
(f)
|
Adjust
Common Stock to reflect the par value of 845,000 shares that remain with
Charmed shareholders after
merger
|
(g)
|
Reflect
the $200,000 transaction costs on Operating
Statement
|
CHARMED
|
FOR THE THREE
MONTHS ENDED
APRIL 30, 2009
|
FOR YEAR ENDED
JANUARY 31, 2009
|
||||||
Historical
Per Common Share Data:
|
||||||||
Basic
net loss per share
|
$ | .00 | $ | (.01 | ) | |||
Diluted
net loss per share
|
$ | .00 | $ | (.01 | ) | |||
Book
value per share
|
$ | .01 | $ | .01 |
IVEDA
|
FOR THE THREE
MONTHS ENDED
MARCH 31, 2009
|
FOR YEAR ENDED
DECEMBER 31, 2008
|
||||||
Historical
Per Common Share Data:
|
||||||||
Basic
net loss per share
|
$ | (.06 | ) | $ | (.30 | ) | ||
Diluted
net loss per share
|
$ | (.06 | ) | $ | (.30 | ) | ||
Book
value per share
|
$ | .00 | $ | .05 |
CHARMED & IVEDA
|
FOR THE THREE
MONTHS ENDED
APRIL 30, 2009
|
FOR YEAR ENDED
JANUARY 31, 2009
|
||||||
Historical
Per Common Share Data:
|
||||||||
Basic
net loss per share
|
$ | (.08 | ) | $ | (.31 | ) | ||
Diluted
net loss per share
|
$ | (.08 | ) | $ | (.31 | ) | ||
Book
value per share
|
$ | (.02 | ) | $ | .03 |
Ownership as of June 30, 2009 (1)
|
Ownership of Charmed
Post-Merger
|
|||||||
Iveda
(2)
|
10,765,186 | (3) | 10,765,186(92.7%) | (3) | ||||
Charmed
(4)
|
6,690,000 | (5) | 845,000(7.3%) | (6) |
(1)
|
Reflects
the total number of securities (common stock, options and warrants)
outstanding for each of the companies on a fully diluted
basis.
|
(2)
|
Reflects
shareholdings of the Iveda shareholders in Iveda prior to the Merger and
in Charmed after the merger.
|
(3)
|
Includes
9,009,304 shares of common stock and options and warrants to purchase
1,755,882 shares of common
stock.
|
(4)
|
Reflects
shareholdings of the Charmed shareholders prior to and after the Merger in
Charmed.
|
(5)
|
Includes
shares of common stock only (pre 1:2 reverse stock
split).
|
(6)
|
Includes
shares of common stock only (post 1:2 reverse stock split and assuming the
cancellation of the 5 million pre-reverse split shares sold by Ian Quinn
and Kevin Liggins to Iveda before the
Merger)
|
2009
|
High
Bid
|
Low
Bid
|
||||||
Second
Quarter 4-1-09 to 6-30-09
|
$ | N/A | $ | N/A | ||||
First
Quarter 1-1-09 to 3-31-09
|
$ | 2.00 | $ | 2.00 |
2008
|
High Bid
|
Low Bid
|
||||||
Fourth
Quarter 10-1-08 to 12-31-08
|
$ | N/A | $ | N/A | ||||
Third
Quarter 7-1-08 to 9-30-08
|
$ | N/A | $ | N/A | ||||
Second
Quarter 4-1-08 to 6-30-08
|
$ | N/A | $ | N/A | ||||
First
Quarter 1-1-08 to 3-31-08
|
$ | N/A | $ | N/A |
2007
|
High Bid
|
Low Bid
|
||||||
Fourth
Quarter 10-1-07 to 12-31-07
|
$ | N/A | $ | N/A |
|
·
|
Gaining
an operating subsidiary; and
|
|
·
|
Pursuing
a business opportunity with the potential for increasing revenues in a
recessionary environment and leaving a rapidly declining real estate
market.
|
|
·
|
Retention
of control of Iveda by current management and shareholders, who have
developed a marketing strategy they believe is vital to Iveda's future
products and services and roll-out of existing products and
services;
|
|
·
|
Anticipated
broker support of the surviving
corporation;
|
|
·
|
Iveda
becoming a wholly-owned subsidiary of a publicly traded corporation should
make it easier for Iveda to raise needed capital as investors are more
likely to invest in companies with more liquid
securities;
|
|
·
|
Greater
credibility in the market with potential purchasers of Iveda's products
and services; and
|
|
·
|
Potential
for more favorable long term debt
financing.
|
|
·
|
the
strategic benefits of the Merger which in this case solely relate to
providing Iveda the opportunity to raise additional working capital with a
viable exit strategy;
|
|
·
|
information
concerning Iveda's and Charmed's respective businesses, prospects,
financial performance and condition, operations, technology, management
and competitive position, including, with respect to Charmed, public
reports filed with the Securities and Exchange Commission which disclosed
that Charmed was current on its filings and had a registration statement
still in effect;
|
|
·
|
management's
view of the financial condition, results of operations and businesses of
Iveda and Charmed before and after giving effect to the Merger which
showed nominal outstanding liabilities or contingent
liabilities;
|
|
·
|
current
financial market conditions and historical market prices, volatility and
trading information with respect to the common stock of Charmed which
evidenced minimal trading and limited
volatility;
|
|
·
|
their
belief that the terms of the Merger Agreement are
reasonable;
|
|
·
|
a
comparison of management's view of the prospects of Iveda and Charmed with
and without the Merger with Charmed's management realizing that there were
no further prospects except dissolution and Iveda needing better financing
alternatives than those offered to private
companies;
|
|
·
|
other
strategic alternatives for Iveda and Charmed, including the potential to
enter into strategic relationships and alliances with third parties
meaning that many large publicly traded companies would consider entry
into a long term contract for services with another publicly traded
company perceived to be better able able to service the contract long
term;
|
|
·
|
an
assessment of market demands and future customer requirements, and the
associated development resources needed to satisfy these requirements with
management concluding that it is highly likely that this business will
mandate a national scope and that economies of scale will likely result in
significant consolidation of competing technologies focused on the service
provided and not the specific technology
itself;
|
|
·
|
the
effect of the Merger on Iveda's customers, suppliers and employees which
management believes will increase its credibility in the purchase decision
(customers are purchasing long term services not a one time product),
better credit terms should be available from suppliers, and better
benefits can be offered to
employees;
|
|
·
|
the
expenses associated with operating a public, reporting company which may
total $100,000 per year;
|
|
·
|
the
limited experience of Iveda's management with operating a public,
reporting company;
|
|
·
|
the
results of the due diligence investigations of Charmed and Iveda;
and
|
|
·
|
unavailability
of private equity and venture capital financing which means Iveda will be
more dependent on the brokers to support a market conducive for longer
term financing.
|
|
·
|
corporate
existence and power;
|
|
·
|
capitalization;
|
|
·
|
corporate
authorization;
|
|
·
|
non-contravention
of the Merger Agreement with other
obligations;
|
|
·
|
financial
statements;
|
|
·
|
corporate
books and records;
|
|
·
|
title
to properties;
|
|
·
|
condition
and sufficiency of assets;
|
|
·
|
no
undisclosed liabilities;
|
|
·
|
taxes;
|
|
·
|
compliance
with laws and court orders;
|
|
·
|
legal
proceedings;
|
|
·
|
contracts;
|
|
·
|
insurance;
|
|
·
|
environmental
matters;
|
|
·
|
employees
and labor relations;
|
|
·
|
tax
treatment of the Merger;
|
|
·
|
intellectual
property;
|
|
·
|
disclosure
documents;
|
|
·
|
finder's
fees; and
|
|
·
|
relationships
with related persons.
|
|
·
|
corporate
existence;
|
|
·
|
broker's
fees;
|
|
·
|
capitalization;
|
|
·
|
limited
business conducted;
|
|
·
|
no
undisclosed liabilities;
|
|
·
|
corporate
authorization;
|
|
·
|
disclosure
documents;
|
|
·
|
Securities
& Exchange Commission filings;
|
|
·
|
financial
statements;
|
|
·
|
corporate
books and records;
|
|
·
|
non-contravention
of the Merger Agreement with other
obligations;
|
|
·
|
reporting
company status;
|
|
·
|
no
injunctions;
|
|
·
|
dissenters'
rights and antitakeover statutes;
|
|
·
|
absence
of certain changes or events;
|
|
·
|
compliance
with laws and court orders;
|
|
·
|
tax
treatment of the Merger;
|
|
·
|
litigation;
|
|
·
|
taxes;
|
|
·
|
relationships
with related parties;
|
|
·
|
disclosure
documents; and
|
|
·
|
agreements,
contracts, and commitments.
|
|
·
|
adopt
or propose any change to its articles of incorporation or
bylaws;
|
|
·
|
issue,
sell, dispose of or grant rights to acquire any of its capital stock
(other than upon exercise or conversion of existing derivative securities,
the grant of options under its existing stock option plan, or pursuant to
its private placement memorandum dated April 1,
2009);
|
|
·
|
declare,
set aside or pay any dividends of distributions on its capital stock, or
redeem or repurchase any of its capital
stock;
|
|
·
|
make
any capital investments in, or make a loan to, any other person or entity
or acquire the stock or assets of any other person or
entity;
|
|
·
|
grant
a security interest in or create any other material lien on its assets,
except in the ordinary course consistent with past practice;
and
|
|
·
|
issue
any note, bond, or other debt security or incur, create, assume or
otherwise become liable for any indebtedness for borrowed money or
guarantee the obligations of any third party, other than in the ordinary
course of business consistent with past
practice.
|
|
·
|
adopt
or propose any change to their articles of incorporation or
bylaws;
|
|
·
|
issue,
sell, dispose of or grant rights to acquire any of their capital stock
(other than upon exercise or conversion of existing derivative
securities);
|
|
·
|
declare,
set aside or pay any dividends of distributions on their capital stock, or
redeem or repurchase any of their capital
stock;
|
|
·
|
make
any capital investments in, or make a loan to, any other person or entity
or acquire the stock or assets of any other person or
entity;
|
|
·
|
grant
a security interest in or create any other material lien on their assets,
except in the ordinary course consistent with past practice;
and
|
|
·
|
issue
any note, bond, or other debt security or incur, create, assume or
otherwise become liable for any indebtedness for borrowed money or
guarantee the obligations of any third party, other than in the ordinary
course of business consistent with past
practice.
|
|
·
|
Approval
by the Iveda shareholders of the Merger Agreement and the Merger, with the
holders of not more than 1% of the common shares of Iveda exercising
appraisal rights;
|
|
·
|
The
sale of 5,000,000 pre-reverse split shares of Charmed common stock from
Ian Quinn and Kevin Liggins to
Iveda;
|
|
·
|
Completion
of a 1:2 reverse stock split by
Charmed;
|
|
·
|
Charmed
must have no assets or liabilities as of the
closing;
|
|
·
|
Charmed
must have filed all required tax
returns;
|
|
·
|
Charmed
and its officers and directors must be current on all required filings
with the SEC;
|
|
·
|
Authorization
by Charmed of the warrants to be issued as part of the Merger, and
adoption of a stock option plan substantially similar to the current Iveda
plan;
|
|
·
|
Resignation
of all Charmed officers and directors, effective as of the closing of the
Merger; and
|
|
·
|
Satisfaction
by Iveda and Charmed of customary representations and warranties regarding
accuracy of information delivered, absence of litigation, and similar
matters.
|
|
·
|
a
breach of any material representation or warranty or failure to perform
any material covenant or agreement on the part of Iveda set forth in the
Merger Agreement will have occurred, and such breach is not cured within
30 days from the date such breach or failure
occurred.
|
|
·
|
Greater
than one (1%) of the Iveda common shares dissent;
or
|
|
·
|
a
breach of any material representation or warranty or failure to perform
any material covenant on the part of Charmed or the Merger Sub set forth
in the Merger Agreement will have occurred, and such breach is not cured
within 30 days from the date such breach or failure
occurred.
|
|
·
|
Mr.
Ly – 3,913,998 shares of common stock, with current value of
$7,827,996(1)
|
|
·
|
Ms.
Berg – options/warrants to purchase 922,183 shares of common stock, with
current value of $1,770,591(1)(2)
|
|
·
|
Mr.
Brilon – options/warrants to purchase 200,000 shares of common stock, with
current value of $252,000(1)(3)
|
|
·
|
Mr.
Omi – 903,859 shares of common stock, with current value of
$1,807,718(1)
|
|
·
|
Ms.
Bisson – options/warrants to purchase 50,000 shares of common stock, with
current value of $63,00(1)(3)
|
|
·
|
You
must not have voted in favor of the Merger Agreement and Merger through
the written consent.
|
|
·
|
You
must deliver a written demand for payment for your shares, together with
your original stock certificate for all certificated shares and a
certification of beneficial ownership (see the payment demand form
attached to this information statement/prospectus as Annex C), to Iveda on
or before ______, 2009.
|
|
•
|
the
negative perception of reverse stock splits held by some investors,
analysts and other stock market
participants;
|
|
•
|
the
fact that the stock price of some companies that have effected reverse
stock splits has subsequently declined back to pre-reverse stock split
levels;
|
|
•
|
the
adverse effect on liquidity that might be caused by a reduced number of
shares outstanding; and
|
|
•
|
the
costs associated with implementing a reverse stock
split.
|
|
•
|
each
two shares of our common stock owned by a shareholder immediately prior to
the reverse stock split would become one share of common stock after the
reverse stock split;
|
|
•
|
the
number of shares of our common stock issued and outstanding would be
reduced from 6,690,000 shares to 3,345,000 shares;
and
|
|
•
|
the
number of authorized shares of our common stock would remain at 100
million shares.
|
|
•
|
If
you hold registered shares in a book-entry form, you do not need to take
any action to receive your post-reverse stock split
shares.
|
|
•
|
If
you are entitled to post-reverse stock split shares, a transaction
statement will automatically be sent to your address of record indicating
the number of shares you hold.
|
|
•
|
The
reverse stock split would qualify as a tax-free recapitalization under the
Internal Revenue Code. Accordingly, a shareholder will not recognize any
gain or loss for United States federal income tax purposes as a result of
the receipt of the post-reverse stock split common stock pursuant to the
reverse stock split.
|
|
•
|
The
shares of post-reverse stock split common stock in the hands of a
shareholder will have an aggregate basis for computing gain or loss on a
subsequent disposition equal to the aggregate basis of the shares of
pre-reverse split common stock held by the shareholder immediately prior
to the reverse stock split.
|
|
•
|
A
shareholder's holding period for the post-reverse stock split common stock
will include the holding period of the pre-reverse split common stock
exchanged.
|
Name and Address of
Beneficial Owner
|
Common Stock
Beneficially Owned
|
Percent of
Common Stock Owned(1)
|
||||||
Ian
Quinn (CEO, CFO, Chairman)
60
Mt Kidd Pt SE
Calgary,
Alberta
Canada
T2Z 3C5
|
2,500,000 | 37.37 | % | |||||
Kevin
Liggins (Secretary, Director)
1308
Bayside Ave. SW
Airdrie,
Alberta
Canada
T4B 2X4
|
2,500,000 | 37.37 | % | |||||
All
Officers and Directors
|
5,000,000 | 74.74 | % | |||||
as
a group (2 individuals)
|
(1)
|
Percentage
ownership is based on 6,690,000 shares of Common Stock outstanding on
November 21, 2008.
|
|
·
|
Support
the field operations team.
|
|
·
|
Conduct
regional marketing campaigns in the Company's existing markets, while
strategically launching in other key
markets.
|
|
·
|
Provide
assistance to its growing reseller channel distribution to utilize
resellers' camera installed base and increase the Company's remote
monitoring subscribers.
|
|
·
|
Generate
sufficient cash reserves to fund operations for at least 9
months.
|
|
·
|
Further
develop Cerebro, the proprietary centralized security reporting
system.
|
|
·
|
The
recent wide-spread availability of high-bandwidth Internet connections
(known as IP-based networks;
|
|
·
|
Drastic
reductions in digital camera component costs;
and
|
|
·
|
The
introduction of innovative "smart scanning"
software.
|
Status
|
Item
|
|
Complete
|
1.
Prove working configuration of camera and networking
equipment
|
|
Complete
|
2.
Build relationships with multiple vendors of critical camera and
networking equipment
|
|
Complete
|
3.
Identify primary markets and customers; prove successful
approach
|
|
Complete
|
4.
Install several working sites for paying customers; begin generating
revenue
|
|
Complete
|
5.
Obtain initial funding for infrastructure, sales fulfillment, and
continued growth
|
|
Complete
|
6.
Obtain additional funding for infrastructure build out and hiring
additional employees
|
|
Ongoing
|
7.
Solicit strategic partners and technology partners that compliment Iveda
Solutions' product offerings
|
|
Ongoing
|
8.
Support existing channel partners and solicit new channel partners to
resell Iveda Solutions' service offerings.
|
|
Ongoing
|
9.
Implement marketing plan, increase sales force, initiate brand awareness
and national recognition of Iveda Solutions
|
|
Upon funding
|
10.
Develop vertical markets and deploy specialized
applications
|
|
Upon
funding
|
11.
Further develop Cerebro, the internal event reporting database that
manages the daily customer monitoring report and gathers statistical
information regarding activities at customer
sites
|
·
|
Proactive versus
after-the-fact – With humans behind the cameras assessing
situations in real-time, they can call the police when necessary to
prevent a crime. Recorded video footage only helps to investigate after a
crime has already been committed.
|
·
|
Daily Monitoring Report
– Every morning, customers get an activity report in their email box,
consisting of time-stamped video footage and a detailed description of
events from the previous night.
|
·
|
Cost Savings - Savings
of up to 75% are possible compared to traditional guard
services.
|
·
|
Secure Data- The Company
utilizes a third party, highly secure datacenter to process, store, and
protect its customers' video
footage.
|
·
|
Live Visual Verification
– Several cities nationwide have adopted ordinances that impose a
substantial fine for every false alarm. An alarm system may be declared a
nuisance for excessive false alarms. Live video verification can reduce or
even eliminate false alarms. With live video verification, police
departments of some cities escalate response priority, depending on the
seriousness of the event.
|
·
|
Redundancy – Video data
are stored in the Company's datacenter, remote monitoring facility, and
its customers' facilities.
|
·
|
Internet Access - Allows
customers 24/7 secure Internet access to their cameras
remotely.
|
·
|
Data Center – Iveda
Solutions utilizes a third party data center housed in a blast-resistant
concrete structure and equipped with emergency
power.
|
·
|
VOIP – The Company can
utilize voice-over-IP to allow a 1-way or 2-way communication between its
intervention specialists and suspicious individuals on its customers'
properties.
|
·
|
Camera Manufacturer
Agnostic – The Company can monitor security cameras from the
majority of manufacturers, whether analog or
digital.
|
·
|
Carrier/ISP Neutral –The
Company can work with customers' current Internet providers as long as
minimum bandwidth requirements are
met.
|
|
·
|
Reduced
false alarm costs that are historically high for alarm-based security
solutions.
|
|
·
|
No
costly Virtual Private Network (VPN) required to link multiple
cameras.
|
|
·
|
Integrating
the customer's existing cameras into its solution, reducing the high cost
of purchasing and installing new
cameras.
|
|
·
|
Insurance
Auto Auction* (6 locations out of 100+) –
54%
|
|
·
|
Leisure
World – 7%
|
|
·
|
Farnsworth
Realty – 7%
|
|
·
|
Pacific
Coast Producers (Lodi and Oroville, CA)
–2%
|
|
·
|
Sunol
Golf Course – 2%
|
|
·
|
Sunland
Storage – 2%
|
|
·
|
City
of Mesa Parks and Recreation Dept. –
2%
|
|
·
|
Glendale
Police, CA
|
|
·
|
Town
of Florence Police, AZ
|
|
·
|
Calexico
Police, CA
|
|
·
|
U.S.
Department of Health & Human
Services
|
|
·
|
Prescott
Unified School District
|
|
·
|
Days
Inn Tucson
|
|
·
|
One
N. Macdonald Center
|
|
·
|
East
Valley Tribune/Downtown Mesa
|
|
·
|
Schuck
and Son Construction
|
|
·
|
Fleming
West
|
|
·
|
Monthly
subscribers who wish to save on traditional security
services.
|
|
·
|
Customers
who wish to integrate or Iveda-enable an existing simple system to a
remote monitoring system.
|
|
·
|
Real-time,
in-vehicle streaming video accessibility for operational efficiency for
transportation management and traffic
safety.
|
|
·
|
Day
care centers who wish to integrate a subscriber based model for parents to
be able to monitor their children from wherever they
are.
|
|
·
|
Educational
institutions that want to integrate monitoring systems in their
facilities.
|
|
·
|
Security
and remote monitoring of school playground areas, corridors, halls and
classrooms, as security of buildings
themselves.
|
|
·
|
Broadcasting
– Customers who wish to integrate a pay per view model, or just the simple
ability to web cast an event. For example: school play, a nursery in a
hospital, nursing home watch, auto mechanic garage, reality TV show,
building construction, behind the scenes: NFL, NHL, NBA,
etc.
|
|
·
|
Derive
recurring revenue stream from offering a complimentary service for their
line of security products, without having to build network infrastructure
for remote monitoring.
|
|
·
|
Camera
deployments are normally a one-time sell, until it is time for a
replacement. With Iveda Solutions, installers can offer a new monitoring
service to their installed base to generate additional revenue from
existing customers.
|
|
1.
|
Does
the company offer IP-based cameras, recording, and views and management
via the Web?
|
|
2.
|
Does
the company install and maintain the
equipment?
|
|
3.
|
Does
the company offer camera monitoring and response without
customer-triggered alarms?
|
Features
|
Iveda
Solutions
|
Westec
|
Smart
Interactive
|
Monitoring
Partners
|
||||
Remote
Monitoring
|
YES
|
YES
|
YES
|
YES
|
||||
Real-Time
Monitoring
|
YES
|
NO
|
NO
|
NO
|
||||
Requires
a customer to push a button or automatic alarm trigger.*
|
NO.
Always watching. |
YES
|
YES
|
YES
|
||||
Applications
beyond security
|
YES
|
NO
|
NO
|
NO
|
||||
Allow
customers view camera footage remotely
|
YES
|
NO
|
YES
|
YES
|
|
·
|
A
private placement memorandum was prepared to raise an additional
$2,500,000 of equity. As of June 30, 2009, $736,000 was still to be
raised.
|
|
·
|
Establish
distributor networks with existing companies to create a reseller network
to increase the scope of the Company's marketing activities with low cost
to the Company.
|
|
·
|
The
Company has entered into a merger agreement with a public shell
company.
|
Year
Ending December 31,
|
||||
2009
|
$ | 173,862 | ||
2010
|
$ | 177,523 | ||
2011
|
$ | 121,838 | ||
Total
|
$ | 473,223 |
Name
|
Age
|
Position
|
David
Ly
|
33
|
CEO,
President, Director
|
Luz
Berg
|
47
|
Secretary,
Senior VP of Operations & Marketing
|
Bob
Brilon
|
48
|
Chief
Financial Officer
|
Ray
Palomaa
|
52
|
Director
of Sales
|
Michael
Religioso
|
31
|
Director
of Online Services & Technology
|
Greg
Omi
|
47
|
Director
|
Jody
Bisson
|
52
|
Director
|
SUMMARY COMPENSATION TABLE
|
||||||||||||||||||||||
Name and
Principal Position
(a)
|
Year
(b)
|
(Salary)
(c)
|
Bonus
(d)
|
Stock
Awards
(e)
|
Option or
Warrant
Awards
(f)
|
Non-
Equity
Incentive
Plan
Compen-
sation
(g)
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(h)
|
All Other
Compen-
sation
(i)
|
Total
(j)
|
|||||||||||||
David
Ly
|
2008
|
$ | 108,600 | $ | 0 | $ | 108,600 | |||||||||||||||
CEO
and President
|
2007
|
$ | 70,000 | $ | 0 | $ | 70,000 | |||||||||||||||
Bob
Brilon
|
2008
|
$ | 0 | $ | 82,000 |
(1)
|
$ | 82,000 | ||||||||||||||
CFO
|
2007
|
$ | 0 | $ | 0 | $ | 0 | |||||||||||||||
Luz
Berg
|
2008
|
$ | 104,434 | $ | 174,542 |
(1)
|
$ | 278,976 | ||||||||||||||
Senior
VP of Operations & Marketing
|
2007
|
$ | 60,000 | $ | 21,630 |
(1)
|
$ | 81,630 | ||||||||||||||
Ray
Palomaa
|
2008
|
$ | 48,558 | $ | 41,000 |
(1)
|
$ | 89,558 | ||||||||||||||
Director
of Sales
|
2007
|
$ | 0 | $ | 0 | $ | 0 | |||||||||||||||
Michael
Religioso
|
2008
|
$ | 61,384 | $ | 0 | $ | 61,384 | |||||||||||||||
Director
of Online Services & Technology
|
2007
|
$ | 47,000 | $ | 0 | $ | 47,000 |
(1)
|
The
fair value of each option and warrant granted is estimated on the date of
grant using the Black-Scholes option-pricing model with weighted-average
assumptions used for options and warrants
granted.
|
Name
|
Position
|
Shares of
Common Stock
|
Options or
Warrants to
Purchase
Common Stock
|
Percentage Prior to
the Merger (1)
|
Percentage After the
Merger (2)
|
|||||||||||||
David
Ly (3)
|
CEO,
Director, President
|
3,913,998 | 0 | 36.36 | % | 33.71 | % | |||||||||||
Luz
Berg (3)
|
Senior
VP, Secretary
|
0 | 922,183 | 8.57 | % | 8.50 | % | |||||||||||
Bob
Brilon (3)
|
CFO
|
0 | 200,000 | 1.86 | % | 1.72 | % | |||||||||||
Ray
Palomaa (3)
|
Director
of Sales
|
0 | 100,000 | 0.93 | % | 0.86 | % | |||||||||||
Michael
Religioso (3)
|
Director
of Online Services & Technology
|
200,000 | 256,140 | 4.24 | % | 3.93 | % | |||||||||||
Greg
Omi (3)
|
Director
|
903,859 | 0 | 8.40 | % | 7.79 | % | |||||||||||
Jody
Bisson (3)
|
Director
|
0 | 50,000 | 0.46 | % | 0.46 | % | |||||||||||
All
directors and officers as a group
|
5,017,857 | 1,528,323 | 60.81 | % | 56.38 | % |
(1)
|
Assumes
all of the outstanding options and warrants to purchase shares of common
stock are exercised.
|
(2)
|
Based
on ownership of Charmed following the Merger and that all of the
outstanding options and warrants to purchase shares of common stock are
exercised, no additional Iveda securities are issued after June 30, 2009,
and the 2.5 million shares of Charmed common stock to be sold to Iveda
prior to the Merger are
cancelled.
|
(3)
|
The
address for each of these individuals is c/o IntelaSight, Inc., 1201 S.
Alma School Road, Suite 4450, Mesa, AZ
85210.
|
|
·
|
100
million shares of common stock, par value of $0.00001 per share;
and
|
|
·
|
100
million shares of preferred stock, also with a par value of $0.00001 per
share.
|
|
·
|
40
million shares of common stock, par value $0.001 per
share.
|
|
·
|
10
million shares of preferred stock, par value $0.001 per
share.
|
o
|
each
share of its capital stock is entitled to one
vote;
|
o
|
a
majority of voting power of the shares entitled to vote, present in person
or represented by proxy, shall constitute a quorum at a shareholders
meeting; and
|
o
|
in
all matters other than the election of directors, the affirmative vote of
the majority of the voting power of shares, present in person or
represented by proxy at the meeting and entitled to vote on the subject
matter, shall be the act of the
shareholders.
|
|
·
|
increase
the aggregate number of authorized shares of the class or
series;
|
|
·
|
effect
an exchange or reclassification of all or part of the shares of the class
or series into shares of another class or
series;
|
|
·
|
change
the rights, preferences, or limitations, of all or part of the shares of
the class or series;
|
|
·
|
change
the shares of all or part of the class or series into a different number
of shares of the same class or
series;
|
|
·
|
create
a new class or series of shares having rights or preferences with respect
to distributions or dissolution that are prior, superior or substantially
equal to the shares of the class;
|
|
·
|
increase
the rights, preferences, or number of authorized shares of any class or
series that, after giving effect to the amendment, have rights or
preferences with respect to distributions or to dissolutions that are
prior, superior, or substantially equal to the shares of the class or
series;
|
|
·
|
limit
or deny an existing preemptive right of all or part of the shares of the
class or series;
|
|
·
|
cancel
or otherwise adversely affect rights to distributions or dividends that
have accumulated but have not yet been declared on all or part of the
shares of the class; or
|
|
·
|
effect
a redemption or cancellation of all or part of the shares of the class or
series in exchange for cash or other consideration other than shares of
the corporation.
|
|
·
|
the
director's act or failure to act constituted a breach of the director's
fiduciary duty as a director; and
|
|
·
|
the
director's breach of those duties involved intentional misconduct, fraud
or a knowing violation of law.
|
|
·
|
acts
or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law;
|
|
·
|
acts
of the directors as specified in Section 23B.08.310 of Washington law
which section relates to unlawful distributions to shareholders;
or
|
|
·
|
any
transaction from which the director will personally receive an improper
personal benefit.
|
|
·
|
quoted
on a national securities exchange or The Nasdaq Stock Market;
or
|
|
·
|
held
of record by more than 2,000
shareholders.
|
|
·
|
a
merger involving the corporation if shareholder approval is required and
the shareholder is entitled to vote, or if the corporation is a subsidiary
that is merged with its parent;
|
|
·
|
a
share exchange to which the corporation is a party as the corporation
whose shares will be acquired, if the shareholder is entitled to vote on
the plan;
|
|
·
|
a
sale or exchange of substantially all of the corporation's property, if
the shareholder is entitled to vote on the sale or exchange, not including
transactions in the usual and regular course of business or pursuant to a
court order in which the proceeds will be distributed to shareholders
within one year;
|
|
·
|
amendments
to the articles of incorporation affecting a redemption or cancellation of
all the shareholder's shares; or
|
|
·
|
any
corporate action pursuant to a shareholder vote that the articles of
incorporation, bylaws, or board resolutions provide that shareholders are
entitled to dissent and obtain payment for their
shares.
|
|
·
|
the
corporation would not be able to pay its debts as they become due in the
usual course of business; or
|
|
·
|
the
corporation's total assets would be less than the sum of its total
liabilities plus, unless the articles of incorporation permit otherwise,
the amount that would be needed, if the corporation were dissolved at the
time of the distribution, to satisfy the preferential rights of
shareholders whose preferential rights are superior to those holders
receiving the dividend.
|
|
·
|
the
fact of that relationship or interest is disclosed or known to the Iveda
Board of Directors or the committee, which authorizes, approves or
ratifies the contract or transaction by a majority vote, without counting
the votes or consents of the interested
directors;
|
|
·
|
the
fact of the director's relationship or interest is disclosed or known to
the shareholders entitled to vote, and the conflicting interest
transaction is specifically authorized, approved or ratified in good faith
by a majority vote of the disinterested shareholders;
or
|
|
·
|
the
conflicting interest transaction is established to have been fair to Iveda
according to the circumstances at the time of
commitment.
|
Financial
Statements of IntelaSight, Inc.
|
|
Year Ended December 31,
2008
|
|
Report
of Independent Registered Public Accounting Firm
|
F-2
|
Balance
Sheets
|
F-3
|
Statements
of Operations
|
F-5
|
Statement
of Changes in Stockholders' Equity
|
F-6
|
Statements
of Cash Flows
|
F-7
|
Notes
to Financial Statements
|
F-8
|
Quarter Ended March 31, 2009
(unaudited)
|
|
Balance Sheets
|
F-25
|
Statements of
Operations
|
F-27
|
Statements of Cash
Flows
|
F-28
|
Notes to Financial
Statements
|
F-29
|
Financial
Statements of Charmed Homes Inc.
|
|
Year Ended January 31,
2009
|
|
Report
of Independent Registered Public Accounting Firm
|
F-37
|
Consolidated
Balance Sheets
|
F-38
|
Consolidated
Statements of Operations
|
F-39
|
Consolidated
Statements of Cash Flows
|
F-40
|
Consolidated
Statements of Stockholders’ Equity
|
F-41
|
Notes
to the Consolidated Financial Statements
|
F-42
|
Quarter Ended April 30, 2009
(unaudited)
|
|
Consolidated Balance
Sheets
|
F-49
|
Consolidated Statements of
Operations
|
F-50
|
Consolidated Statements of Cash
Flows
|
F-51
|
Notes to the Consolidated Financial
Statements
|
F-52
|
2008
|
2007
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and Cash Equivalents
|
$ | 335,189 | $ | 41,344 | ||||
Accounts
Receivable
|
26,971 | 20,497 | ||||||
Prepaid
Expenses
|
11,532 | 4,767 | ||||||
Inventory
|
13,530 | - | ||||||
Total
Current Assets
|
387,222 | 66,608 | ||||||
PROPERTY
AND EQUIPMENT
|
||||||||
Office
Equipment
|
87,050 | 75,560 | ||||||
Furniture
and Fixtures
|
22,712 | 13,948 | ||||||
Software
|
36,634 | 16,244 | ||||||
Leased
Equipment
|
213,460 | 3,813 | ||||||
Leasehold
Improvements
|
34,495 | 9,562 | ||||||
Total
Property and Equipment
|
394,351 | 119,127 | ||||||
Less:
Accumulated Depreciation
|
99,099 | 50,037 | ||||||
Property
and Equipment, Net
|
295,252 | 69,090 | ||||||
OTHER
ASSETS
|
||||||||
Deferred
Income Taxes
|
- | 558,370 | ||||||
Escrow
Deposits
|
50,000 | |||||||
Deposits
|
16,523 | 2,293 | ||||||
Total
Assets
|
$ | 748,997 | $ | 696,361 |
2008
|
2007
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Current
Portion of Capital Lease Obligations
|
$ | 65,916 | $ | 1,043 | ||||
Notes
Payable
|
- | 100,000 | ||||||
Accounts
Payable
|
48,465 | 45,573 | ||||||
Deferred
Revenue
|
21,964 | - | ||||||
Billings
in Excess of Costs and Estimated Earnings on Uncompleted
Contracts
|
- | 12,805 | ||||||
Accrued
Expenses
|
70,285 | 47,898 | ||||||
Total
Current Liabilities
|
206,630 | 207,319 | ||||||
LONG-TERM
LIABILITIES
|
||||||||
Capital
Lease Obligations, Net of Current Portion
|
117,162 | 2,725 | ||||||
Total
Liabilities
|
323,792 | 210,044 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
Stock, $0.001 par value; 40,000,000 shares authorized; 8,774,304 and
4,989,743 shares issued and outstanding, as of December 31, 2008 and 2007,
respectively.
|
8,774 | 4,990 | ||||||
Preferred
Stock, $0.001 par value; 10,000,000 shares authorized; -0- and 853,275
shares issued and outstanding, as of December 31, 2008 and 2007,
respectively.
|
- | 853 | ||||||
Additional
Paid-In Capital
|
3,385,251 | 1,348,497 | ||||||
Accumulated
Deficit
|
(2,968,820 | ) | (868,023 | ) | ||||
Total
Stockholders' Equity
|
425,205 | 486,317 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 748,997 | $ | 696,361 |
2008
|
2007
|
|||||||
REVENUE
|
$ | 506,285 | $ | 544,259 | ||||
COST
OF REVENUE
|
357,184 | 306,949 | ||||||
GROSS
PROFIT
|
149,101 | 237,310 | ||||||
OPERATING
EXPENSES
|
1,661,718 | 701,135 | ||||||
LOSS
FROM OPERATIONS
|
(1,512,617 | ) | (463,825 | ) | ||||
OTHER
INCOME (EXPENSE)
|
||||||||
Interest
Income
|
5,994 | - | ||||||
Interest
Expense
|
(35,804 | ) | (1,164 | ) | ||||
Total
Other Income (Expense)
|
(29,810 | ) | (1,164 | ) | ||||
LOSS
BEFORE INCOME TAXES
|
(1,542,427 | ) | (464,989 | ) | ||||
BENEFIT
(PROVISION) FOR INCOME TAXES
|
(558,370 | ) | 182,670 | |||||
NET
LOSS
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
BASIC
LOSS PER SHARE
|
$ | (0.30 | ) | $ | (0.04 | ) | ||
DILUTED
LOSS PER SHARE
|
$ | (0.30 | ) | $ | (0.04 | ) |
Common Stock
|
Preferred Stock
|
Additional Paid-In
Capital
|
Accumulated
|
|||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Common
|
Preferred
|
Deficit
|
Total
|
|||||||||||||||||||||||||
BALANCE
AT DECEMBER 31, 2006
|
6,330,000 | 6,330 | 785,011 | 785 | 66,275 | 972,905 | (585,704 | ) | 460,591 | |||||||||||||||||||||||
Stock
Relinquished
|
(1,423,002 | ) | (1,423 | ) | - | - | 1,423 | - | - | - | ||||||||||||||||||||||
Stock
Based Compensation
|
- | - | - | - | 29,209 | - | - | 29,209 | ||||||||||||||||||||||||
Stock
Options Exercised
|
82,745 | 83 | - | - | 8,192 | - | - | 8,275 | ||||||||||||||||||||||||
Net
Loss
|
- | - | - | - | - | - | (282,319 | ) | (282,319 | ) | ||||||||||||||||||||||
Preferred
Stock Issued
|
- | - | 68,264 | 68 | - | 274,932 | - | 275,000 | ||||||||||||||||||||||||
Costs
of Capital
|
- | - | - | - | - | (4,439 | ) | - | (4,439 | ) | ||||||||||||||||||||||
BALANCE
AT DECEMBER 31, 2007
|
4,989,743 | 4,990 | 853,275 | 853 | 105,099 | 1,243,398 | (868,023 | ) | 486,317 | |||||||||||||||||||||||
Common
Stock Issued
|
1,629,000 | 1,629 | - | - | 1,427,371 | - | - | 1,429,000 | ||||||||||||||||||||||||
Stock
Based Compensation
|
- | - | - | - | 222,892 | - | - | 222,892 | ||||||||||||||||||||||||
Preferred
Stock Converted to Common
|
1,307,347 | 1,307 | (853,275 | ) | (853 | ) | 1,242,944 | (1,243,398 | ) | - | - | |||||||||||||||||||||
Debt
Converted to Common Stock
|
848,214 | 848 | - | - | 574,147 | - | - | 574,995 | ||||||||||||||||||||||||
Net
Loss
|
- | - | - | - | - | - | (2,100,797 | ) | (2,100,797 | ) | ||||||||||||||||||||||
Costs
of Capital
|
- | - | - | - | (187,202 | ) | - | - | (187,202 | ) | ||||||||||||||||||||||
BALANCE
AT DECEMBER 31, 2008
|
8,774,304 | $ | 8,774 | - | $ | - | $ | 3,385,251 | $ | - | $ | (2,968,820 | ) | $ | 425,205 |
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
Loss
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
Adjustments
to Reconcile Net Loss to Net Cash Used by Operating
Activities
|
||||||||
Depreciation
|
49,063 | 24,735 | ||||||
Interest
Expense Converted to Equity
|
24,079 | - | ||||||
Stock
Compensation
|
222,892 | 29,209 | ||||||
Deferred
Tax Provision (Benefit)
|
558,370 | (182,670 | ) | |||||
(Increase)
Decrease in Operating Assets:
|
||||||||
Accounts
Receivable
|
(6,474 | ) | 19,905 | |||||
Prepaid
Expense
|
(6,765 | ) | 1,440 | |||||
Inventory
|
(13,530 | ) | - | |||||
Deposits
|
(14,230 | ) | - | |||||
Increase
(Decrease) in Operating Liabilities:
|
||||||||
Accounts
Payable
|
2,892 | 8,803 | ||||||
Accrued
Expenses
|
23,303 | 9,968 | ||||||
Deferred
Revenue
|
21,964 | - | ||||||
Billings
in Excess of Costs and Estimated Earnings on Uncompleted
Contracts
|
(12,805 | ) | 12,805 | |||||
Net
Cash Used by Operating Activities
|
(1,252,038 | ) | (358,124 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Escrow
Deposits
|
(50,000 | ) | - | |||||
Purchase
of Property and Equipment
|
(65,579 | ) | (24,582 | ) | ||||
Net
Cash Used by Investing Activities
|
(115,579 | ) | (24,582 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds
from Short-Term Borrowings
|
450,000 | 100,000 | ||||||
Payments
on Capital Lease Obligations
|
(30,336 | ) | (45 | ) | ||||
Preferred
Stock Issued, net of Costs of Capital
|
- | 270,561 | ||||||
Common
Stock Issued, net of Costs of Capital
|
1,241,798 | 8,275 | ||||||
Net
Cash Provided by Financing Activities
|
1,661,462 | 378,791 | ||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
293,845 | (3,915 | ) | |||||
Cash
and Cash Equivalents - Beginning of Year
|
41,344 | 45,259 | ||||||
CASH
AND CASH EQUIVALENTS - END OF YEAR
|
$ | 335,189 | $ | 41,344 | ||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Short-Term
Debt Converted to Preferred Stock
|
$ | 574,995 | $ | - | ||||
Interest
Paid
|
$ | 11,725 | $ | 1,164 | ||||
Property
and Equipment Purchased via Capital Lease
|
$ | 209,646 | $ | 3,813 |
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
|
·
|
A
private placement memorandum was prepared to raise an additional
$2,500,000 of equity. As of December 31, 2008, $1,271,000 was still to be
raised.
|
|
·
|
Establish
distributor networks with existing companies to create a reseller network
to increase the scope of the Company’s marketing activities with low cost
to the Company.
|
|
·
|
The
Company may evaluate and consider merger and/or acquisition
activities.
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
2
|
ESCROW
DEPOSITS
|
NOTE
3
|
ACCRUED
EXPENSES
|
NOTE
4
|
COSTS,
ESTIMATED EARNINGS AND BILLINGS ON CONTRACTS IN
PROCESS
|
2007
|
||||
Costs
Incurred on Uncompleted Projects
|
$ | 24,082 | ||
Estimated
Gross Profit
|
5,431 | |||
Contract
Revenues Earned
|
29,513 | |||
Less:
Billings to Date
|
42,318 | |||
Total
|
$ | (12,805 | ) |
2007
|
||||
Costs
and Estimated Earnings in Excess of Billings on Uncompleted
Contracts
|
$ | - | ||
Billings
in Excess of Costs and Estimated Earnings on Uncompleted
Contracts
|
(12,805 | ) | ||
Total
|
$ | (12,805 | ) |
NOTE
5
|
NOTES
PAYABLE
|
NOTE
6
|
OBLIGATIONS
UNDER CAPITAL LEASES
|
Year
Ending December 31,
|
||||
2009
|
$ | 88,888 | ||
2010
|
88,807 | |||
2011
|
43,028 | |||
Total
Minimum Lease Payments
|
220,723 | |||
Less:
Interest
|
37,645 | |||
Total
Principal
|
183,078 | |||
Less:
Current Portion
|
65,916 | |||
Long-Term
Capital Lease
|
$ | 117,162 |
NOTE
7
|
OPERATING
LEASES
|
Year
Ending December 31,
|
||||
2009
|
$ | 173,862 | ||
2010
|
$ | 177,523 | ||
2011
|
$ | 121,838 | ||
Total
|
$ | 473,223 |
NOTE
8
|
SERIES
A AND A-1, CONVERTIBLE PREFERRED
STOCK
|
NOTE
9
|
STOCK
OPTION PLAN
|
2008
|
2007
|
|||||||||||||||
Weighted
-
|
Weighted
-
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Exercise
|
Exercise
|
|||||||||||||||
Shares
|
Price
|
Shares
|
Price
|
|||||||||||||
Outstanding
at Beginning of Year
|
406,267 | $ | 0.10 | 653,157 | $ | 0.10 | ||||||||||
Granted
|
795,712 | 0.52 | 93,245 | 0.10 | ||||||||||||
Exercised
|
- | - | (82,745 | ) | 0.10 | |||||||||||
Forfeited
or Canceled
|
(1,250 | ) | 0.10 | (257,390 | ) | 0.10 | ||||||||||
Outstanding
at End of Year
|
1,200,729 | 0.38 | 406,267 | 0.10 | ||||||||||||
Options
Exercisable at Year-End
|
883,375 | 0.19 | 360,686 | 0.10 | ||||||||||||
Weighted-Average
Fair Value of Options Granted During the Year
|
$ | 0.41 | $ | 0.09 |
Options Outstanding
|
Options Exercisable
|
|||||||||||||||
Number
|
Weighted -
|
Number
|
||||||||||||||
Outstanding
|
Average
|
Weighted -
|
Exercisable
|
Weighted -
|
||||||||||||
Range of
|
at
|
Remaining
|
Average
|
at
|
Average
|
|||||||||||
Exercise
|
December 31,
|
Contractual
|
Exercise
|
December 31,
|
Exercise
|
|||||||||||
Prices
|
2008
|
Life
|
Price
|
2008
|
Price
|
|||||||||||
$0.10
- $1.00
|
1,200,729
|
9
Years
|
$ |
0.38
|
883,375
|
$ |
0.19
|
Employee
|
Non-Employee
|
|||||||||||
Options
|
Options
|
|||||||||||
2008
|
2007
|
2007
|
||||||||||
Expected
Life
|
4.6
Years
|
10
Years
|
10
Years
|
|||||||||
Dividend
Yield
|
0 | % | 0 | % | 0 | % | ||||||
Expected
Volatility
|
42 | % | 82 | % | 82 | % | ||||||
Risk-Free
Interest Rate
|
3.75 | % | 4.75 | % | 4.75 | % |
NOTE
10
|
STOCK
WARRANTS
|
2008
|
2007
|
|||||||||||||||
Weighted -
|
Weighted -
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Redemption
|
Redemption
|
|||||||||||||||
Shares
|
Price
|
Shares
|
Price
|
|||||||||||||
Outstanding
at Beginning of Year
|
509,278 | $ | 0.10 | 268,947 | $ | 0.10 | ||||||||||
Issued
|
50,000 | 1.00 | 240,331 | 0.10 | ||||||||||||
Outstanding
at End of Year
|
559,278 | 0.18 | 509,278 | 0.10 | ||||||||||||
Warrants
Redeemable at End of Year
|
521,778 | 0.12 | 499,671 | 0.10 | ||||||||||||
Weighted-Average
Fair Value of Warrants Issued During the Year
|
$ | 0.41 | $ | 0.09 |
Warrants Outstanding
|
Warrants Redeemable
|
||||||||||||||||
Number
|
Weighted -
|
Number
|
|||||||||||||||
Outstanding
|
Average
|
Weighted -
|
Redeemable
|
Weighted -
|
|||||||||||||
Range of
|
at
|
Remaining
|
Average
|
at
|
Average
|
||||||||||||
Exercise
|
December 31,
|
Contractual
|
Redemption
|
December 31,
|
Redemption
|
||||||||||||
Prices
|
2008
|
Life
|
Price
|
2008
|
Price
|
||||||||||||
$0.10
- $1.00
|
559,278 |
8
Years
|
$ | 0.19 | 521,778 | $ | 0.12 |
2008
|
2007
|
|||||||
Expected
Life
|
4.6
Years
|
10
Years
|
||||||
Dividend
Yield
|
0 | % | 0 | % | ||||
Expected
Volatility
|
42 | % | 82 | % | ||||
Risk-Free
Interest Rate
|
3.00 | % | 4.75 | % |
NOTE
11
|
INCOME
TAXES
|
2008
|
2007
|
|||||||
Deferred
Income Tax (Provision) Benefit
|
$ | (558,370 | ) | $ | 182,670 |
2008
|
2007
|
|||||||
Tax
Operating Loss Carryforward
|
$ | 1,115,000 | $ | 562,000 | ||||
Accelerated
Depreciation
|
(13,330 | ) | (3,630 | ) | ||||
Valuation
Allowance
|
(1,101,670 | ) | - | |||||
$ | - | $ | 558,370 |
2008
|
2007
|
|||||||
Total
Deferred Tax Assets
|
$ | 1,115,000 | $ | 562,000 | ||||
Total
Deferred Tax (Liability)
|
(13,330 | ) | (3,630 | ) | ||||
Valuation
Allowance
|
(1,101,670 | ) | - | |||||
Deferred
Tax Asset
|
$ | - | $ | 558,370 |
2008
|
2007
|
|||||||
Noncurrent
Deferred Income Tax Asset
|
$ | 1,101,670 | $ | 558,370 | ||||
Valuation
Allowance
|
(1,101,670 | ) | - | |||||
$ | - | $ | 558,370 |
Year Ending
|
Net Operating
|
Year of
|
||||||
December 31,
|
Loss:
|
Expiration:
|
||||||
2008
|
$ | 1,308,000 |
2028
|
|||||
2007
|
429,000 |
2027
|
||||||
2006
|
476,000 |
2026
|
||||||
2005
|
414,000 |
2025
|
||||||
$ | 2,627,000 |
2008
|
2007
|
|||||||
Tax
Benefit of 34%
|
$ | (524,425 | ) | $ | (158,096 | ) | ||
Increase
(Decrease) in Income Taxes Resulting from:
|
||||||||
State
Income Tax Benefit, Net of Federal Tax
|
(94,658 | ) | (37,404 | ) | ||||
Nondeductible
Expenses
|
75,783 | 12,830 | ||||||
Valuation
Allowance
|
1,101,670 | - | ||||||
Total
|
$ | 558,370 | $ | (182,670 | ) |
NOTE
12
|
RELATED
PARTY TRANSACTIONS
|
NOTE
13
|
EARNINGS
(LOSS) PER SHARE
|
2008
|
2007
|
|||||||
Basic
EPS
|
||||||||
Net
Loss
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
Weighted
Average Shares
|
7,004,583 | 6,589,121 | ||||||
Basic
Loss Per Share
|
$ | (0.30 | ) | $ | (0.04 | ) | ||
Diluted
EPS
|
||||||||
Net
Loss
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
Basic
Weighted Average Shares
|
7,004,583 | 6,589,121 | ||||||
Dilutive
Effect of Stock Options
|
- | - | ||||||
Diluted
Weighted Average Shares
|
7,004,583 | 6,589,121 | ||||||
Diluted
Loss Per Share
|
$ | (0.30 | ) | $ | (0.04 | ) |
NOTE
14
|
SUBSEQUENT
EVENTS
|
(Unaudited)
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and Cash Equivalents
|
$ | 24,900 | $ | 335,189 | ||||
Accounts
Receivable
|
48,839 | 26,971 | ||||||
Prepaid
Expenses
|
4,498 | 11,532 | ||||||
Inventory
|
- | 13,530 | ||||||
Total
Current Assets
|
78,237 | 387,222 | ||||||
PROPERTY
AND EQUIPMENT
|
||||||||
Office
Equipment
|
87,589 | 87,050 | ||||||
Furniture
and Fixtures
|
27,416 | 22,712 | ||||||
Software
|
36,800 | 36,634 | ||||||
Leased
Equipment
|
213,460 | 213,460 | ||||||
Leasehold
Improvements
|
36,280 | 34,495 | ||||||
Total
Property and Equipment
|
401,545 | 394,351 | ||||||
Less:
Accumulated Depreciation
|
118,418 | 99,099 | ||||||
Property
and Equipment, Net
|
283,127 | 295,252 | ||||||
OTHER
ASSETS
|
||||||||
Escrow
Deposits
|
50,000 | 50,000 | ||||||
Deposits
|
16,523 | 16,523 | ||||||
Total
Assets
|
$ | 427,887 | $ | 748,997 |
(Unaudited)
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Current
Portion of Capital Lease Obligations
|
$ | 68,526 | $ | 65,916 | ||||
Notes
Payable
|
50,000 | - | ||||||
Accounts
Payable
|
118,515 | 48,465 | ||||||
Deferred
Revenue
|
- | 21,964 | ||||||
Accrued
Expenses
|
85,428 | 70,285 | ||||||
Total
Current Liabilities
|
322,469 | 206,630 | ||||||
LONG-TERM
LIABILITIES
|
||||||||
Capital
Lease Obligations, Net of Current Portion
|
102,344 | 117,162 | ||||||
Total
Liabilities
|
424,803 | 323,792 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
Stock, $0.001 par value; 40,000,000 shares authorized;
8,859,304 and 8,774,304 shares issued
and outstanding, as of March 31, 2009 and December 31, 2008,
respectively
|
8,859 | 8,774 | ||||||
Preferred
Stock, $0.001 par value; 10,000,000 shares authorized
|
- | - | ||||||
Additional
Paid-In Capital
|
3,480,166 | 3,385,251 | ||||||
Accumulated
Deficit
|
(3,485,941 | ) | (2,968,820 | ) | ||||
Total
Stockholders' Equity
|
3,084 | 425,205 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 427,887 | $ | 748,997 |
3
Months Ending
|
3
Months Ending
|
|||||||
March 31, 2009
|
March 31, 2008
|
|||||||
REVENUE
|
$ | 223,824 | $ | 177,057 | ||||
COST
OF REVENUE
|
165,232 | 59,674 | ||||||
GROSS
PROFIT
|
58,592 | 117,383 | ||||||
OPERATING
EXPENSES
|
568,966 | 215,437 | ||||||
LOSS
FROM OPERATIONS
|
(510,374 | ) | (98,054 | ) | ||||
OTHER
INCOME (EXPENSE)
|
||||||||
Interest
Income
|
1,184 | - | ||||||
Interest
Expense
|
(7,931 | ) | (7,433 | ) | ||||
Total
Other Income (Expense)
|
(6,747 | ) | (7,433 | ) | ||||
LOSS
BEFORE INCOME TAXES
|
(517,121 | ) | (105,487 | ) | ||||
BENEFIT
(PROVISION) FOR INCOME TAXES
|
- | 40,000 | ||||||
NET
LOSS
|
$ | (517,121 | ) | $ | (65,487 | ) | ||
BASIC
AND DILUTED LOSS PER SHARE
|
$ | (0.06 | ) | $ | (0.01 | ) |
3
Months
Ending
|
3
Months
Ending
|
|||||||
March 31, 2009
|
March 31, 2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
Loss
|
$ | (517,121 | ) | $ | (65,487 | ) | ||
Adjustments
to Reconcile Net Loss to Net Cash
|
||||||||
Used
by Operating Activities
|
||||||||
Depreciation
|
19,318 | 8,393 | ||||||
Stock
Compensation
|
10,000 | - | ||||||
Deferred
Tax Benefit
|
(40,000 | ) | ||||||
(Increase)
Decrease in Operating Assets:
|
||||||||
Accounts
Receivable
|
(21,868 | ) | (45,618 | ) | ||||
Prepaid
Expense
|
7,034 | - | ||||||
Inventory
|
13,530 | - | ||||||
Deposits
|
- | (13,617 | ) | |||||
Increase
(Decrease) in Operating Liabilities:
|
- | |||||||
Accounts
Payable
|
70,050 | (19,427 | ) | |||||
Accrued
Expenses
|
15,143 | 10,104 | ||||||
Deferred
Revenue
|
(21,964 | ) | - | |||||
Billings
in Excess of Costs and Estimated Earnings on
|
||||||||
Uncompleted
Contracts
|
- | (12,805 | ) | |||||
Net
Cash Used by Operating Activities
|
(425,878 | ) | (178,457 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase
of Property and Equipment
|
(7,193 | ) | (9,717 | ) | ||||
Net
Cash Used by Investing Activities
|
(7,193 | ) | (9,717 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds
from Short-Term Borrowings
|
50,000 | 175,916 | ||||||
Payments
on Capital Lease Obligations
|
(12,218 | ) | (1,959 | ) | ||||
Common
Stock Issued, net of Costs of Capital
|
85,000 | 22,502 | ||||||
Net
Cash Provided by Financing Activities
|
122,782 | 196,459 | ||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(310,289 | ) | 8,285 | |||||
Cash
and Cash Equivalents - Beginning of Year
|
335,189 | 41,344 | ||||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$ | 24,900 | $ | 49,629 | ||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Interest
Paid
|
$ | 7,931 | $ | 1,183 | ||||
Property
and Equipment Purchased via Capital Lease
|
$ | - | $ | 69,182 |
|
·
|
A
private placement memorandum was prepared to raise an additional
$2,500,000 of equity. As of March 31, 2009, $1,186,000 was still to be
raised.
|
|
·
|
Establish
distributor networks with existing companies to create a reseller network
to increase the scope of the Company’s marketing activities with low cost
to the Company.
|
3/31/2009
|
3/31/2008
|
|||||||
Basic
and Diluted EPS
|
||||||||
Net
Loss
|
$ | (517,121 | ) | $ | (65,487 | ) | ||
Weighted
Average Shares
|
8,819,304 | 6,305,423 | ||||||
Basic
Loss Per Share
|
$ | (0.06 | ) | $ | (0.01 | ) | ||
Dilutive
Effect of Stock Options
|
- | - |
January 31,
|
January 31,
|
|||||||
2009
$
|
2008
$
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
86,957 | 22,748 | ||||||
Inventory
(Note 3)
|
– | 489,844 | ||||||
Total
Assets
|
86,957 | 512,592 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable
|
3,413 | 2,796 | ||||||
Due
to related party (Note 4(a))
|
– | 395,751 | ||||||
Total
Liabilities
|
3,413 | 398,547 | ||||||
Contingency
(Note 1)
|
||||||||
Subsequent
Event (Note 7)
|
||||||||
Stockholders’
Equity
|
||||||||
Common Stock, 200,000,000 shares
authorized, $0.00001 par value; 6,690,000 shares issued and
outstanding (Note 5)
|
67 | 67 | ||||||
Additional
Paid-in Capital
|
173,933 | 173,933 | ||||||
Donated
Capital (Note 4(b))
|
15,500 | 9,500 | ||||||
Deficit
Accumulated During the Development Stage
|
(105,956 | ) | (69,455 | ) | ||||
Total
Stockholders’ Equity
|
83,544 | 114,045 | ||||||
Total
Liabilities and Stockholders’ Equity
|
86,957 | 512,592 |
Accumulated from
|
For the Year
|
For the Year
|
||||||||||
June 27, 2006
|
Ended
|
Ended
|
||||||||||
(Date of Inception)
|
January 31,
|
January 31,
|
||||||||||
to January 31, 2009
|
2009
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Revenue
|
505,665 | 505,665 | – | |||||||||
Cost
of Goods Sold
|
490,598 | 490,598 | – | |||||||||
Gross
Profit
|
15,067 | 15,067 | – | |||||||||
Expenses
|
||||||||||||
Donated
services and rent (Note 4(b))
|
15,500 | 6,000 | 6,000 | |||||||||
Foreign
exchange loss
|
12,376 | 5,300 | 7,076 | |||||||||
General
and administrative
|
3,456 | 360 | 2,710 | |||||||||
Professional
fees
|
88,371 | 38,588 | 34,783 | |||||||||
Property
taxes and utilities
|
1,320 | 1,320 | – | |||||||||
Total
Expenses
|
121,023 | 51,568 | 50,569 | |||||||||
Net
Loss For the Period
|
105,956 | 36,501 | 50,569 | |||||||||
Net
Loss Per Share – Basic and Diluted
|
(0.01 | ) | (0.01 | ) | ||||||||
Weighted
Average Shares Outstanding
|
6,690,000 | 5,972,000 |
Accumulated
from June 27,
2006 (Date of
Inception) to
January 31,
2009
|
For the Year
Ended
January 31,
2009
|
For the Year
Ended
January 31,
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Operating
Activities
|
||||||||||||
Net
loss for the period
|
(105,956 | ) | (36,501 | ) | (50,569 | ) | ||||||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||||
Donated
services and rent
|
15,500 | 6,000 | 6,000 | |||||||||
Changes
in operating assets and liabilities
|
||||||||||||
Inventory
|
– | 489,844 | (489,844 | ) | ||||||||
Accounts
payable
|
3,413 | 617 | 2,416 | |||||||||
Net
Cash Provided By (Used In) Operating Activities
|
(87,043 | ) | 459,960 | (531,997 | ) | |||||||
Financing
Activities
|
||||||||||||
Advances
from a related party
|
– | – | 380,751 | |||||||||
Repayment
of related party advances
|
– | (395,751 | ) | – | ||||||||
Proceeds
from issuance of common stock
|
174,000 | – | 169,000 | |||||||||
Net
Cash Provided By (Used In) Financing Activities
|
174,000 | (395,751 | ) | 549,751 | ||||||||
Increase
in Cash
|
86,957 | 64,209 | 17,754 | |||||||||
Cash
- Beginning of Period
|
– | 22,748 | 4,994 | |||||||||
Cash
- End of Period
|
86,957 | 86,957 | 22,748 | |||||||||
Supplemental
Disclosures
|
||||||||||||
Interest
paid
|
– | – | – | |||||||||
Income
taxes paid
|
– | – | – |
Common Stock
|
Additional
Paid-In
|
Donated
|
Deficit
Accumulated
During the
Development
|
|||||||||||||||||||||
Number
|
Par Value
|
Capital
|
Capital
|
Stage
|
Total
|
|||||||||||||||||||
$
|
$
|
$
|
$
|
$
|
||||||||||||||||||||
Balance
- June 27, 2006 (Date of Inception)
|
- | - | - | - | - | - | ||||||||||||||||||
Common
stock issued for cash at $0.001 per share
|
5,000,000 | 50 | 4,950 | - | - | 5,000 | ||||||||||||||||||
Donated
services and rent
|
- | - | - | 3,500 | - | 3,500 | ||||||||||||||||||
Net
loss for the period
|
- | - | - | - | (18,886 | ) | (18,886 | ) | ||||||||||||||||
Balance
– January 31, 2007
|
5,000,000 | 50 | 4,950 | 3,500 | (18,886 | ) | (10,386 | ) | ||||||||||||||||
Common
stock issued for cash at $0.10 per share
|
1,690,000 | 17 | 168,983 | - | - | 169,000 | ||||||||||||||||||
Donated
services and rent
|
- | - | - | 6,000 | - | 6,000 | ||||||||||||||||||
Net
loss for the year
|
- | - | - | - | (50,569 | ) | (50,569 | ) | ||||||||||||||||
Balance
– January 31, 2008
|
6,690,000 | 67 | 168,983 | 9,500 | (69,455 | ) | 114,045 | |||||||||||||||||
Donated
services and rent
|
- | - | - | 6,000 | - | 6,000 | ||||||||||||||||||
Net
loss for the year
|
- | - | - | - | (36,501 | ) | (36,501 | ) | ||||||||||||||||
Balance
– January 31, 2009
|
6,690,000 | 67 | 173,933 | 15,550 | (105,956 | ) | 83,544 |
1.
|
Nature
of Operations and Continuance of
Business
|
2.
|
Summary
of Significant Accounting
Policies
|
a)
|
Basis
of Presentation
|
b)
|
Use
of Estimates
|
c)
|
Earnings
Per Share
|
d)
|
Comprehensive
Loss
|
e)
|
Cash
and Cash Equivalents
|
f)
|
Inventory
|
g)
|
Financial
Instruments
|
h)
|
Income
Taxes
|
i)
|
Foreign
Currency Translation
|
j)
|
Revenue
Recognition
|
k)
|
Recent
Accounting Pronouncements
|
l)
|
Recent
Adopted Accounting
Pronouncements
|
3.
|
Inventory
|
January 31,
2009
$
|
January 31,
2008
$
|
|||||||
Land
|
– | 153,653 | ||||||
Building
|
– | 311,844 | ||||||
Other
|
– | 24,347 | ||||||
– | 489,844 |
4.
|
Related
Party Transactions
|
a)
|
As
at January 31, 2008 the Company owed $395,751 to the president of the
Company. During the year ended January 31, 2009, this amount was repaid.
The amount owing was unsecured, non-interest bearing, and due on
demand.
|
b)
|
Commencing
July 1, 2006, the president of the Company has provided management
services and office space to the Company with an estimated fair value of
$300 and $200 per month, respectively. During the year ended January 31,
2009, the Company recorded donated services of $3,600 (2007 - $3,600) and
donated rent of $2,400 (2007 -
$2,400).
|
5.
|
Common
Stock
|
a)
|
In July 2007, the Company
issued 1,690,000 common shares of the Company at a price of $0.10 per
common share for proceeds of $169,000 pursuant to an SB-2 Registration
Statement.
|
b)
|
On July 15, 2006, the Company
issued 5,000,000 shares of common stock to officers and directors at a
price of $0.001 per share for cash proceeds of
$5,000.
|
6.
|
Income
Taxes
|
January 31,
|
January 31,
|
|||||||
2009
|
2008
|
|||||||
$
|
$
|
|||||||
Expected
income tax recovery at statutory rate
|
(12,776 | ) | (17,699 | ) | ||||
Non-deductible
expenses
|
2,100 | 2,100 | ||||||
Change
in valuation allowance
|
10,676 | 15,599 | ||||||
Income
tax recovery
|
– | – |
January 31,
|
January 31,
|
|||||||
2009
|
2008
|
|||||||
$
|
$
|
|||||||
Deferred
tax assets:
|
||||||||
Cumulative
net operating losses
|
31,660 | 20,984 | ||||||
Less
valuation allowance
|
(31,660 | ) | (20,984 | ) | ||||
Net
deferred tax asset
|
– | – |
Amount
|
||||||||
Year Incurred
|
$ |
Year of Expiry
|
||||||
2007
|
15,386 | 2027 | ||||||
2008
|
44,569 |
2028
|
||||||
2009
|
30,501 |
2029
|
||||||
90,456 |
7.
|
Subsequent
Event
|
Index
|
|
Balance
Sheets
|
F-49
|
Statements
of Operations
|
F-50
|
Statements
of Cash Flows
|
F-51
|
Notes
to the Financial Statements
|
F-52
|
(Unaudited)
April
30,
|
January
31,
|
|||||||
2009
|
2009
|
|||||||
$
|
$
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
83,531 | 86,957 | ||||||
Total
Assets
|
83,531 | 86,957 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
payable and accrued liabilities
|
13,843 | 3,413 | ||||||
Total
Liabilities
|
13,843 | 3,413 | ||||||
Contingency
(Note 1)
|
||||||||
Commitment
(Note 4)
|
||||||||
Stockholders’
Equity
|
||||||||
Common
Stock, 200,000,000 shares authorized, $0.00001 par value; 6,690,000 shares
issued and outstanding
|
67 | 67 | ||||||
Additional
Paid-in Capital
|
173,933 | 173,933 | ||||||
Donated
Capital (Note 3)
|
17,000 | 15,500 | ||||||
Deficit
Accumulated During the Development Stage
|
(121,312 | ) | (105,956 | ) | ||||
Total
Stockholders’ Equity
|
69,688 | 83,544 | ||||||
Total
Liabilities and Stockholders’ Equity
|
83,531 | 86,957 |
Accumulated
from
|
||||||||||||
June
27, 2006
(Date
|
Three
Months
|
Three
Months
|
||||||||||
of
Inception) to
|
Ended
|
Ended
|
||||||||||
April
30,
|
April
30,
|
April
30,
|
||||||||||
2009
|
2009
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Revenue
|
505,665 | – | – | |||||||||
Cost
of Goods Sold
|
490,598 | – | – | |||||||||
Gross
Profit
|
15,067 | – | – | |||||||||
Expenses
|
||||||||||||
Donated
services and rent (Note 3)
|
17,000 | 1,500 | 1,500 | |||||||||
Foreign
exchange loss
|
12,376 | – | 6,101 | |||||||||
General
and administrative
|
3,468 | 12 | 181 | |||||||||
Professional
fees
|
102,215 | 13,844 | 10,238 | |||||||||
Property
taxes and utilities
|
1,320 | – | – | |||||||||
Total
Expenses
|
136,379 | 15,356 | 18,020 | |||||||||
Net
Loss for the Period
|
121,312 | 15,356 | 18,020 | |||||||||
Net
Loss Per Share – Basic and Diluted
|
– | – | ||||||||||
Weighted
Average Shares Outstanding
|
6,690,000 | 6,690,000 |
Accumulated
from
|
||||||||||||
June 27, 2006
|
||||||||||||
(Date of
Inception)
|
Three Months
Ended
|
Three Months
Ended
|
||||||||||
to April 30,
|
April 30,
|
April 30,
|
||||||||||
2009
|
2009
|
2008
|
||||||||||
$
|
$
|
$
|
||||||||||
Operating
Activities
|
||||||||||||
Net
loss for the period
|
(121,312 | ) | (15,356 | ) | (18,020 | ) | ||||||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||||
Donated
services and rent
|
17,000 | 1,500 | 1,500 | |||||||||
Changes
in operating assets and liabilities
|
||||||||||||
Accounts
payable
|
4,393 | 980 | 1,435 | |||||||||
Accrued
liability
|
9,450 | 9,450 | 7,088 | |||||||||
Due
to related party
|
– | – | 6,101 | |||||||||
Net
Cash Provided By (Used In) Operating Activities
|
(90,469 | ) | (3,426 | ) | (1,896 | ) | ||||||
Financing
Activities
|
||||||||||||
Proceeds
from issuance of common stock
|
174,000 | – | – | |||||||||
Net
Cash Provided By (Used In) Financing Activities
|
174,000 | – | – | |||||||||
Increase
(decrease) in Cash
|
83,531 | (3,426 | ) | (1,896 | ) | |||||||
Cash
- Beginning of Period
|
– | 86,957 | 22,748 | |||||||||
Cash
- End of Period
|
83,531 | 83,531 | 20,852 | |||||||||
Supplemental
Disclosures
|
||||||||||||
Interest
paid
|
– | – | – | |||||||||
Income
taxes paid
|
– | – | – |
1.
|
Nature
of Operations and Continuance of
Business
|
2.
|
Summary
of Significant Accounting
Policies
|
a)
|
Basis
of Presentation
|
b)
|
Interim
Financial Statements
|
2.
|
Summary
of Significant Accounting Policies
(continued)
|
c)
|
Use
of Estimates
|
d)
|
Earnings
Per Share
|
e)
|
Comprehensive
Loss
|
f)
|
Cash
and Cash Equivalents
|
2.
|
Summary
of Significant Accounting Policies
(continued)
|
g)
|
Inventory
|
h)
|
Financial
Instruments
|
i)
|
Income
Taxes
|
j)
|
Foreign
Currency Translation
|
2.
|
Summary
of Significant Accounting Policies
(continued)
|
k)
|
Revenue
Recognition
|
l)
|
Recent
Accounting Pronouncements
|
2.
|
Summary
of Significant Accounting Policies
(continued)
|
m)
|
Recently
Adopted Accounting
Pronouncements
|
2.
|
Summary
of Significant Accounting Policies
(continued)
|
3.
|
Related
Party Transactions
|
4.
|
Commitment
|
·
|
the
director's act or failure to act constituted a breach of the director's
fiduciary duty as a director; and
|
·
|
the
director's breach of those duties involved intentional misconduct, fraud
or a knowing violation of law.
|
·
|
acts
or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law;
|
·
|
acts
of the directors as specified in Section 23B.08.310 of Washington law
which section relates to unlawful distributions to shareholders;
or
|
·
|
any
transaction from which the director will personally receive an improper
personal benefit.
|
Exhibit
Number
|
Description of Exhibits
|
|
2.1****
|
Merger
Agreement, dated January 8, 2009 by and among Charmed Homes Inc., Charmed
Homes Subsidiary, Inc., certain shareholders and IntelaSight,
Inc.
|
|
3.1*
|
Articles
of Incorporation of Charmed Homes Inc.
|
|
3.2*
|
Bylaws
of Charmed Homes Inc.
|
|
3.3***
|
Amendment
to Bylaws of Charmed Homes Inc.
|
|
4.1*
|
Specimen
Stock Certificate
|
|
4.2#
|
Form of Stock Option Agreement under the
IntelaSight, Inc. 2008 Stock Option Plan
|
|
4.3#
|
Form of Common Stock Purchase Warrant issued by
IntelaSight, Inc.
|
|
5.1#
|
Opinion of Keller Rohrback,
PLC
|
|
8.1#
|
Tax Opinion of Bade & Baskin
PLC
|
|
10.1#
|
Employment Agreement dated January 15, 2005 by
and between David Ly and IntelaSight, Inc.
|
|
10.2#
|
Channel Partner Program Membership Agreement
dated April 1, 2005 by and between Axis Communications Inc. and
IntelaSight, Inc.
|
|
10.3#
|
Employment Agreement dated June 15, 2005 by and
between Luz Berg and IntelaSight, Inc.
|
|
10.4#
|
Application Development Service Agreement dated
July 14, 2006 by and between Axis Communications AB and IntelaSight,
Inc.
|
|
10.5#
|
Partner Agreement dated January 30, 2007 by and
between Milestone Systems, Inc. and IntelaSight,
Inc.
|
|
10.6#
|
Solution Partner Agreement dated March 13, 2008
by and between Milestone Systems A/S and IntelaSight,
Inc.
|
|
10.7#
|
Customer Agreement dated March 25, 2008 by and
between IAAI – North Hollywood and IntelaSight,
Inc.
|
|
10.8#
|
Employment Agreement dated December 10, 2008 by
and between Bob Brilon and IntelaSight, Inc.
|
|
10.9#
|
Channel Partner Program Membership Agreement –
Gold Solution Partner Level – dated June 23, 2009 by and between Axis
Communications Inc. and IntelaSight, Inc.
|
|
21*****
|
Subsidiaries
of the Registrant
|
|
23.1#
|
Consent
of Manning Elliott LLP
|
|
23.2#
|
Consent
of Eide Bailly LLP
|
|
23.3#
|
Consent of Keller Rohrback, PLC (included in
Exhibit 5.1)
|
|
23.4#
|
Consent of Bade of Baskin PLC (included in
Exhibit 8.1)
|
|
99.1**
|
Letter
of Intent between Charmed Homes Inc. and IntelaSight,
Inc.
|
|
*
|
Incorporated
by Reference filed in Form SB-2 on 4/27/2007
|
|
**
|
Incorporated
by Reference filed in Form 10-Q on 12/15/2008
|
|
***
|
Incorporated
by Reference filed in Form 8-K on 12/15/2008
|
|
****
|
Incorporated
by Reference filed in Form 8-K on 1/14/2009
|
|
*****
|
Incorporated by Reference filed in Form S-4 on
5/15/2009
|
|
#
|
Filed
herewith
|
i
|
Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be filed
pursuant to Rule 424;
|
ii
|
Any free writing prospectus relating to the
offering prepared by or on behalf of the undersigned registrant or used or
referred to by the undersigned
registrant;
|
iii
|
The portion of any other free writing
prospectus relating to the offering containing material information about
the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant;
and
|
iv.
|
Any other communication that is an offer in the
offering made by the undersigned registrant to the
purchaser.
|
Charmed
Homes Inc.
|
|||
(Registrant)
|
|||
By:
|
/s/
|
Ian Quinn
|
|
Name:
|
Ian
Quinn
|
||
Title:
|
President,
Principal Executive Officer, Principal
Financial
Officer, Principal Accounting Officer
and
Director
|
Signature
|
Title
|
Date
|
||
President,
Treasurer and Director
|
||||
/s/ Ian Quinn
|
(Principal
Executive Officer,
|
July 10, 2009
|
||
Ian
Quinn
|
Principal
Financial Officer and
|
|||
Principal
Accounting Officer)
|
||||
Secretary
and Director
|
||||
/s/ Kevin Liggins
|
July 10, 2009
|
|||
Kevin
Liggins
|
Exhibit
Number
|
Description of Exhibits
|
|
2.1****
|
Merger
Agreement, dated January 8, 2009 by and among Charmed Homes Inc., Charmed
Homes Subsidiary, Inc., certain shareholders and IntelaSight,
Inc.
|
|
3.1*
|
Articles
of Incorporation of Charmed Homes Inc.
|
|
3.2*
|
Bylaws
of Charmed Homes Inc.
|
|
3.3***
|
Amendment
to Bylaws of Charmed Homes Inc.
|
|
4.1*
|
Specimen
Stock Certificate
|
|
4.2#
|
Form of Stock Option Agreement under the
IntelaSight, Inc. 2008 Stock Option Plan
|
|
4.3#
|
Form of Common Stock Purchase Warrant issued by
IntelaSight, Inc.
|
|
5.1#
|
Opinion of Keller Rohrback,
PLC
|
|
8.1#
|
Tax Opinion of Bade & Baskin
PLC
|
|
10.1#
|
Employment Agreement dated January 15, 2005 by
and between David Ly and IntelaSight, Inc.
|
|
10.2#
|
Channel Partner Program Membership Agreement
dated April 1, 2005 by and between Axis Communications Inc. and
IntelaSight, Inc.
|
|
10.3#
|
Employment Agreement dated June 15, 2005 by and
between Luz Berg and IntelaSight, Inc.
|
|
10.4#
|
Application Development Service Agreement dated
July 14, 2006 by and between Axis Communications AB and IntelaSight,
Inc.
|
|
10.5#
|
Partner Agreement dated January 30, 2007 by and
between Milestone Systems, Inc. and IntelaSight,
Inc.
|
|
10.6#
|
Solution Partner Agreement dated March 13, 2008
by and between Milestone Systems A/S and IntelaSight,
Inc.
|
|
10.7#
|
Customer Agreement dated March 25, 2008 by and
between IAAI – North Hollywood and IntelaSight,
Inc.
|
|
10.8#
|
Employment Agreement dated December 10, 2008 by
and between Bob Brilon and IntelaSight, Inc.
|
|
10.9#
|
Channel Partner Program Membership Agreement –
Gold Solution Partner Level – dated June 23, 2009 by and between Axis
Communications Inc. and IntelaSight, Inc.
|
|
21*****
|
Subsidiaries
of the Registrant
|
|
23.1#
|
Consent
of Manning Elliott LLP
|
|
23.2#
|
Consent
of Eide Bailly LLP
|
|
23.3#
|
Consent of Keller Rohrback, PLC (included in
Exhibit 5.1)
|
|
23.4#
|
Consent of Bade of Baskin PLC (included in
Exhibit 8.1)
|
|
99.1**
|
Letter
of Intent between Charmed Homes Inc. and IntelaSight,
Inc.
|
|
*
|
Incorporated
by Reference filed in Form SB-2 on 4/27/2007
|
|
**
|
Incorporated
by Reference filed in Form 10-Q on
12/15/2008
|
***
|
Incorporated
by Reference filed in Form 8-K on 12/15/2008
|
|
****
|
Incorporated
by Reference filed in Form 8-K on 1/14/2009
|
|
*****
|
Incorporated by Reference filed in Form S-4 on
5/15/2009
|
|
#
|
Filed
herewith
|