Charmed Homes Inc. (Form: S-4/A, Received: 07/10/2009 16:48:03)

RISK FACTORS

Charmed and Iveda will operate as a combined company in a market environment that cannot be predicted and that involves significant risks, many of which will be beyond the combined company's control. In addition to the other information contained in this information statement/prospectus, you should carefully consider the risks described below.

Risk Factors Involving Iveda

The Audit Report On Iveda's Financial Statements Contains A Going Concern Opinion.

Iveda's financial statements for the years ended December 31, 2008 and 2007 were prepared on a "going concern basis" and the audit report contains a "going concern qualification" (see Iveda's audit report on the financial statements in this information statement/prospectus, and note 1 to those financial statements). Iveda's financial statements assume Iveda will continue as a going concern, but its ability to do so will require additional capital to fund operations until positive operating cash flow is achieved.

Iveda Is An Emerging Growth Company.

Iveda began operations in 2005. While Iveda has monthly revenues, there is limited historical, operating or financial information about Iveda to evaluate Iveda's performance. As of the date of this information statement/prospectus, Iveda had approximately $45,000 cash on hand. At Iveda's current estimated burn rate of $60,000 per month, Iveda needs to continue to raise capital to continue its operations. Iveda intends to continue to seek to raise capital following the Merger predominantly to expand its sales and marketing capabilities and hire additional employees to meet the demand for its services. If Iveda does not raise sufficient capital, of which there can be no assurance, it will have a significant impact on the ability of Iveda to expand operations. There can be no assurance that Iveda can be operated profitably or, if profitability is achieved, that it can be sustained.

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.

Iveda is close to generating sufficient revenue to fund its ongoing operations, but needs additional funding to implement its growth plan. Iveda currently has and will continue to have significant capital requirements to fund its growth. Iveda anticipates, based on its currently proposed intentions and assumptions relating to its operations, that substantial additional capital will be needed to satisfy Iveda's cash requirements to implement its growth plan. While Iveda expects to continue raising capital, Iveda has no committed sources of additional financing and Iveda's officers, directors and shareholders are not required to provide any portion of Iveda's future financing requirements. Iveda cannot assure investors that additional financing will be available on commercially reasonable terms, or at all. Any inability to obtain additional financing when needed could require Iveda to significantly curtail its growth plans.

If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of Iveda's existing shareholders will be reduced, and these newly issued securities may have rights, preferences or privileges senior to those of existing shareholders. Iveda cannot assure investors that additional financing will be available on terms favorable to Iveda, or at all.

Iveda Depends On Certain Key Personnel.

Iveda's future success will be dependent on the efforts of key management personnel, particularly David Ly, Iveda's President and CEO, Luz Berg, Iveda's Senior VP of Operations & Marketing, Bob Brilon, Iveda's Chief Financial Officer, Ray Palomaa, Iveda's Director of Sales, and Michael Religioso, Iveda's Director of Systems Development, each of whom is employed at will by Iveda. Mr. Ly's relationships within Iveda's industry are vital to Iveda's continued operations and if Mr. Ly was no longer actively involved with Iveda, Iveda would likely be unable to continue its operations. Iveda does not have any key man insurance on Mr. Ly. The loss of one or more of Iveda's other key employees could also have a material adverse effect on Iveda's business, results of operations and financial condition. Iveda also believes that Iveda's future success will be largely dependent on Iveda's ability to attract and retain highly qualified management, sales and marketing personnel. Iveda cannot assure investors that Iveda will be able to attract and retain such personnel. Iveda's inability to retain such personnel or to train them rapidly enough to meet Iveda's expanding needs could cause a decrease in the overall quality and efficiency of Iveda's staff, which could have a material adverse effect on Iveda's business, results of operations and financial condition.

Rapid Growth May Strain Iveda's Resources.

As Iveda continues the commercialization of Iveda's security and surveillance products and services, Iveda expects to experience significant and rapid growth in the scope and complexity of its business, which may place a significant strain on Iveda's senior management team and Iveda's financial and other resources. The proposed acceleration will expose us to greater overhead, marketing and support costs and other risks associated with growth and expansion. Iveda will need to add staff to monitor additional cameras, market its products and services, manage operations, handle sales and marketing efforts and perform finance and accounting functions. Iveda will be required to hire a broad range of additional personnel in order to successfully advance its operations.

Management has implemented strategies to handle projected growth, including acquiring an option on additional leased space within Iveda's existing building. Iveda's existing leased space can accommodate up to 15 monitoring stations, with four employees required to monitor each station around the clock. Iveda may also seek to relocate its existing data center, located in Scottsdale, Arizona, to a less expensive part of the United States. Iveda's ability to manage its rapid growth effectively will require Iveda to continue to improve its operations, to improve its financial and management information systems and to train, motivate and manage its employees.

This growth may place a strain on Iveda's management and operational resources. The failure to develop and implement effective systems, or to hire and retain sufficient personnel for the performance of all of the functions necessary to effectively service and manage Iveda's business, or the failure to manage growth effectively, could have a materially adverse effect on Iveda's business and financial condition. In addition, difficulties in effectively managing the budgeting, forecasting and other process control issues presented by such a rapid expansion could harm Iveda's business, prospects, results of operations and financial condition.

Demand For Iveda's Security And Surveillance Products And Services May Be Lower Than Iveda Anticipates.

Iveda has commenced a public relations and marketing campaign. Iveda has limited resources to undertake extensive marketing activities, although Luz Berg, Iveda's Senior VP of Operations & Marketing, has significant marketing experience from her past positions at mid-cap public companies, and she will manage Iveda's future marketing efforts. In 2008, Iveda hired Ray Palomaa, who has significant past experience in the high-technology security industry, as Iveda's Director of Sales. Mr. Palomaa is managing a small sales team to develop Iveda's reseller distribution channel. Management anticipates that his addition to Iveda's team will allow Iveda to tap into the industry contacts he was able to build over his years of experience. Iveda cannot predict with certainty the potential consumer demand for its security and surveillance products or services or the degree to which Iveda will meet that demand. If demand for its security and surveillance products and services does not develop to the extent or as quickly as expected, Iveda might not be able to generate revenue to become profitable.

Iveda plans to target the sale of its security and surveillance products and services to the following primary customer groups: commercial users of other products seeking cost savings or remote monitoring capabilities, remote monitoring of day care and educational facilities, golf course monitoring, monitoring of residential communities, automotive lot monitoring, warehouse access point monitoring, small unattended business monitoring, nursing home monitoring, recording and broadcasting of school or entertainment events, monitoring of construction sites and auto dealerships, and government-related monitoring. Iveda has based its strategy to target these consumers on a number of assumptions, some or all of which could prove to be incorrect.

Even if markets for its products and services develop, Iveda could achieve a smaller share of these markets than Iveda currently anticipates. Achieving market share will require substantial marketing efforts and expenditure of significant funds to inform customers of the distinctive characteristics and benefits of using Iveda's products and services. Iveda cannot assure investors that its marketing efforts will result in the attainment of sufficient market share to become profitable.

Iveda Believes Industry Trends Support Its Open Source Systems, But If Trends Reverse, Iveda May Experience Decreased Demand.

The security and surveillance industry is characterized by rapid changes in technology and customer demands. Management believes that the existing market preference for open source systems (systems capable of integrating a wide range of products and services through community and private based cooperation, such as the Internet, Linux, and certain cameras used in Iveda's business) is strong and will continue for the foreseeable future. However, should the market shift toward closed source, proprietary systems (private, closed systems built to only support a specific manufacturer or developer's product or service, such as CCTV cameras), demand for Iveda's services may decline as Iveda is unable to monitor cameras that are part of a closed source system. Management believes that such a shift is unlikely. While Iveda is able to convert CCTV and analog systems for use with Iveda's monitoring services, certain systems may not be convertible in the future, and to the extent that customers prefer to install these systems, it would be more difficult to sell Iveda's services since customers would be required to spend additional funds to acquire new cameras that Iveda would be able to monitor.

Future Loan Agreements With Lenders May Hinder Iveda's Ability To Operate The Business By Imposing Restrictive Loan Covenants.

Iveda will likely need to incur debt to implement its business plan, and has and plans to continue to obtain lease financing for certain equipment acquisitions. Any debt load necessary to implement Iveda's business plan could result in substantial debt service requirements. These future debt load and service requirements could have important consequences which could hinder Iveda's ability to operate, including Iveda's ability to:

· Incur additional indebtedness;

· Make capital expenditures or enter into lease arrangements in excess of prescribed thresholds;

· Make distributions to shareholders, or redeem or repurchase Iveda's shares;

· Make certain types of investments;

· Create liens on Iveda's assets;

· Utilize the proceeds of asset sales; and

· Merge or consolidate or dispose of all, or substantially all, of Iveda's assets.

In the event that Iveda is unable to pay its debt service obligations, Iveda's creditors could force it to (1) reduce or eliminate distributions to shareholders; or (2) reduce or eliminate needed capital expenditures. It is possible that Iveda could be forced to sell assets, seek to obtain additional equity capital or refinance or restructure all or a portion of Iveda's debt. In the event that Iveda would be unable to refinance Iveda's indebtedness or raise funds through asset sales, sales of equity or otherwise, Iveda's ability to operate would be greatly affected.

Risks Associated with the Surveillance and Remote Security Industry

As a result of providing its products and services, Iveda is exposed to risks associated with participation in the security and surveillance industry. These risks are summarized below.

Iveda Depends On Third Party Manufacturers And Suppliers For The Products It Sells.

Iveda has relationships with a number of third party manufacturers and suppliers, including Axis Communications, Milestone, Scansource, Anixter, Dotworkz and Ingram Micro for cameras and Dell for network computer equipment, for the supply of all of the hardware components of Iveda's products. Iveda has a signed reseller and development partner agreements with Axis Communications and Milestone. Risks associated with Iveda's dependence upon third party manufacturing relationships include: (i) reduced control over delivery schedules; (ii) lack of control over quality assurance; (iii) poor manufacturing yields and high costs; (iv) potential lack of adequate capacity during periods of excess demand; and (v) potential misappropriation of Iveda's intellectual property. Although Iveda depends on third party manufacturers and suppliers for products it sells, risks are minimized because it does not depend on one manufacturer and supplier. It utilizes an open platform, which means that in order to deliver its services, it does not discriminate based on camera brand or manufacturer and its services can be used with a wide array of products.

Iveda does not know if Iveda will be able to maintain third party manufacturing and supply contracts on favorable terms, if at all, or that its current or future third party manufacturers and suppliers will meet its requirements for quality, quantity or timeliness. Iveda's success depends in part on whether its manufacturers are able to fill the orders it places with them in a timely manner. If Iveda's manufacturers fail to satisfactorily perform their contractual obligations or fill purchase orders Iveda places with them, Iveda may be required to pursue replacement manufacturer relationships. If Iveda is unable to find replacements on a timely basis, or at all, Iveda may be forced to either temporarily or permanently discontinue the sale of certain products and associated services, which could expose it to legal liability, loss of reputation and risk of loss or reduced profit. Management believes that Iveda's present suppliers offer products that are superior to comparable products available from other suppliers. Iveda's business, results of operation and reputation would be adversely impacted if Iveda is unable to provide quality products to its customers in a timely manner.

In addition, Iveda has development partner relationships with many of its present suppliers, which provides it with greater control over future enhancements to the off-the-shelf products Iveda sells.

Iveda could also be adversely affected by an increase in its manufacturers' prices for its product components or a significant decline in Iveda's manufacturers' financial condition. If Iveda's relationship with any one of its manufacturers is terminated and Iveda is not successful in establishing a relationship with an alternative manufacturer who offers similar services at similar prices, Iveda's costs could increase, adversely affecting its operations.

Iveda Operates In A Highly-Competitive Industry And its Failure To Compete Effectively May Adversely Affect Its Ability To Generate Revenue.

Although management believes that there is, at this time, no competitor that offers a similar package of services to the package offered by Iveda, management is aware of similar products and services which compete indirectly with Iveda's products and services. In management's opinion, companies providing indirect competition include Westec Interactive, Smart Interactive Systems, Inc., and Monitoring Partners. Some companies may also be developing similar products and services, including companies that may have significantly greater financial, technical and marketing resources, larger distribution networks, and generate greater revenue and have greater name recognition than Iveda. These companies may develop security products and services that are superior to those offered by Iveda. Such competition may potentially affect Iveda's chances of achieving profitability.

Some of Iveda's current and future competitors may conduct more extensive promotional activities and may offer lower prices to customers than Iveda does, which could allow them to gain greater market share or prevent Iveda from increasing its market share. In the future, Iveda may need to decrease its prices if Iveda's competitors lower their prices. Iveda's competitors may be able to respond more quickly to new or changing opportunities, technologies and customer requirements. To be successful, Iveda must carry out its business plan, establish and strengthen its brand awareness through marketing, effectively differentiate its services from those of its competitors and build its reseller network, while maintaining superior levels of service, which management believes is what will ultimately differentiate Iveda's services from any similar services its competitors may develop in the future. To achieve this Iveda may have to substantially increase marketing and development activities in order to compete effectively. Such competition will potentially affect Iveda's chances of achieving profitability.

Future Legislation Or Governmental Regulations Or Policies Could Have A Significant Impact On Iveda's Operations.

While Iveda is presently subject only to licensing requirements related to its contracting activities, for which Iveda holds low voltage contractors' licenses in California and Arizona, the security and surveillance industry as a whole is subject to regulation. As Iveda continues operations, Iveda may be subject to additional regulation in the future. Future changes in laws or regulations could require Iveda to change the way Iveda operates, which could increase costs or otherwise disrupt operations. In addition, failure to comply with any applicable laws or regulations could result in substantial fines or revocation of any required operating permits and licenses. If laws and regulations change or Iveda fails to comply in the future, Iveda's financial condition, results of operations and cash flows could be materially and adversely affected.

Regulation Of The Telecommunications Industry And The Internet May Impact Iveda's Operations

Aspects of Iveda's operations may be, or become, subject to regulations governing the Internet. There can be no assurance that government agencies will not increasingly regulate Internet-related services. Increased regulation may slow Iveda's growth, and legislation could be enacted that would prohibit certain forms of telecommunication critical to Iveda's operations. Such regulation may also negatively impact the cost of doing business and materially adversely affect Iveda's business, financial condition and results of operations.

The Failure Of Iveda's Systems Could Result In A Material Adverse Effect.

Iveda utilizes a third party, fourth-tier data center in Scottsdale, Arizona. Tier 4 data centers meet the most stringent requirements established by the Telecommunications Industry Association's Telecommunications Infrastructure Standards for Data Centers, or TIA-942. This data center transmits data to Iveda's monitoring system via a dedicated fiber connection, and offers the greatest reliability provided by the industry, 99.995% availability, due to a number of back-up measures. Iveda's operations are dependent upon its ability to support a complex network infrastructure and avoid damage to both its monitoring center and the data center from fires, earthquakes, floods, hurricanes, power losses, war, terrorist acts, telecommunications failures and similar natural or manmade events. The occurrence of a natural disaster, intentional or unintentional human error or actions, or other unanticipated problem could cause interruptions in the services provided by Iveda, and resulting losses by Iveda's customers. Any damage or failure that causes interruptions in the service provided by Iveda could have a material adverse effect on its business, operating results and financial condition.

Iveda has experienced individual camera failures or outages in the past, and will likely experience future individual camera failures or outages that disrupt the monitoring of those cameras. Iveda's revenue depends in large part on maintaining the operability of its monitoring systems. Accordingly, the performance, reliability and availability of Iveda's network, servers for Iveda's corporate operations and infrastructure are critical to Iveda's reputation and Iveda's ability to attract and retain customers.

Iveda is continually expanding and enhancing its technology and network infrastructure and other technologies to accommodate substantial increases in the volume of traffic on its network and the overall size of its customer base. Iveda may be unsuccessful in these efforts or Iveda may be unable to project accurately the rate or timing of these increases. The data center that Iveda currently uses has significant additional bandwidth available should Iveda need it for expanding its operations. Approximately three to four weeks elapses between signing a new customer and commencing monitoring of that customer's cameras, which provides Iveda with what management believes to be sufficient time to acquire additional bandwidth if needed. However, Iveda's failure, or Iveda's suppliers' failure, to achieve or maintain high data transmission capacity could significantly reduce consumer demand for Iveda's services.

Iveda's computer hardware operations, data processing, storage and backup systems are located in a single, third party, fourth-tier data center in Scottsdale, Arizona. If this location experienced a significant system failure or interruption, Iveda's business would be harmed. Iveda's systems can be vulnerable to damage from fire, power loss, telecommunications failures, computer viruses, physical and electronic break-ins and similar events. The property and business interruption insurance Iveda carries may not have coverage adequate to compensate it fully for losses that may occur.

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.

Iveda's business involves the monitoring of cameras that may be recording sensitive areas of its customers' facilities, and as a result, Iveda utilizes security measures that are comparable to those used by banks in providing online banking services. No security measures are completely secure, however, and, for example, hackers or individuals who attempt to breach its network security could, if successful, cause interruptions in Iveda's services. If Iveda experiences any breaches of its network security or sabotage, Iveda might be required to expend significant capital and resources to protect against or alleviate these problems. Iveda may not be able to remedy any problems caused by hackers or saboteurs in a timely manner, or at all. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, Iveda may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of Iveda's security occurs, the perception of the effectiveness of Iveda's security measures and Iveda's reputation could be harmed and Iveda could lose current and potential customers.

The Timing Of Iveda's Revenues Can Vary Depending On How Long Customers Take To Evaluate Iveda's Services.

It is difficult to forecast the timing of revenues in the security industry because the development period for a customized system or solution may be lengthy, larger customers may need a significant amount of time to evaluate products before purchasing them and, in the case of governmental customers, sales are dependent on budgetary and other bureaucratic processes. The period between initial customer contact and a purchase by a customer varies greatly depending on the customer, and historically has ranged from days to weeks. During the evaluation period, customers may defer or scale down proposed orders of products or systems for various reasons, including: (i) changes in budgets and purchasing priorities; (ii) a reduced need to upgrade existing systems; (iii) deferrals in anticipation of enhancements or new products; (iv) introduction of products by competitors; and (v) lower prices offered by competitors.

Iveda Will Rely On Both Iveda's Internal Sales Force And Resellers To Distribute Iveda's Security Products And Services To Customers.

Iveda relies on both Iveda's internal sales force and resellers to distribute its security products and services to its customers. As of the date of this information statement/prospectus, Iveda has signed fifteen resellers and six independent agents, and anticipates adding more as Iveda implements its business plan. However, Iveda plans to continue its internal sales activity for the foreseeable future to market its products and services until its resellers are completely trained and mobilized. Iveda could be adversely affected by any significant decline in the service provided by its resellers as any customers dissatisfied with its resellers may cause damage to its reputation. If Iveda's relationship with any of its larger resellers is terminated and Iveda is not successful in establishing a relationship with an alternative reseller who offers similar services at similar prices, Iveda's business could decline depending on the level of revenue generated by that reseller.

Government Contracts Generally Contain Rights And Remedies Which Could Reduce The Value Of Such Contracts, Or Result In Losses.

Iveda presently provides its products and services for certain state and local government customers, and has recently obtained certification of SAFETY Act Designation by the Department of Homeland Security under the Support Anti-terrorism by Fostering Effective Technologies Act, or SAFETY Act. Although not significant sources of revenue at this time, government contracts often contain provisions that give the governments that are party to those contracts certain rights and remedies not typically found in private commercial contracts, including provisions enabling the governments to: (i) terminate or cancel existing contracts for convenience; (ii) in the case of the U.S. government, suspend the contracting company from doing business with a foreign government or prevent the company from selling its products in certain countries; (iii) audit and object to the company's contract-related costs and expenses, including allocated indirect costs; and (iv) change specific terms and conditions in the company's contracts, including changes that would reduce the value of its contracts. In addition, many jurisdictions have laws and regulations that deem government contracts in those jurisdictions to include these types of provisions, even if the contract itself does not contain them. If a government terminates a contract with Iveda for convenience, Iveda may not be able to recover its incurred or committed costs, any settlement expenses or profit on work completed prior to the termination. If a government terminates a contract for default, Iveda may not recover those amounts and, in addition, Iveda may be liable for any costs incurred by a government in procuring undelivered items and services from another source. Further, an agency within a government may share information regarding Iveda's termination with other government agencies. As a result, Iveda's on-going or prospective relationships with such other government agencies could be impaired.

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.

There is a shortage of qualified electricians in the United States. In order to conduct Iveda's business, it is necessary for Iveda or Iveda's resellers to employ electricians and have those electricians qualified in the states where they do business. Iveda's ability to increase productivity and profitability may be limited by its and its resellers' ability to employ, train and retain skilled electricians required to meet Iveda's customers' needs. Accordingly there can be no assurance, among other things, that:

• Iveda or Iveda's resellers will be able to maintain the skilled labor force necessary to operate efficiently;

• Iveda's or Iveda's resellers' labor expenses will not increase as a result of a shortage in the skilled labor supply; and

• Iveda or Iveda's resellers will be able to maintain the skilled labor force necessary to implement Iveda's planned growth.

The Estimates Iveda Uses In Placing Bids Could Be Materially Incorrect, Resulting In Possible Losses.

Iveda currently generates, and expect to continue to generate, a significant portion of its revenues for product sales and installation under fixed price contracts. The cost of gasoline, labor and materials, however, may vary significantly from the costs Iveda originally estimates. Variations from estimated contract costs along with other risks inherent in performing fixed price contracts may result in actual revenue and gross profits for a project differing from those Iveda originally estimated and could result in losses on projects. Depending upon the size of a particular project, variations from estimated contract costs can have a significant impact on Iveda's operating results.

Risks Related to Iveda's Intellectual Property

Iveda Depends On its Intellectual Property.

Iveda's success and ability to compete depends in part on Iveda's proprietary database, Cerebro, the security information and reporting web service developed and used by Iveda internally, and on the process by which Iveda integrates existing third party products into a monitoring solution. If any of Iveda's competitors copy or otherwise gain access to Iveda's proprietary technology or develop similar technologies independently, Iveda may not be able to compete as effectively. Iveda considers its proprietary software invaluable to its ability to continue to develop and maintain the goodwill and recognition associated with its brand. The measures Iveda takes to protect its technologies, and other intellectual property rights, which presently are based upon trade secrets, may not be adequate to prevent their unauthorized use.

If Iveda is unable to protect its intellectual property, Iveda's competitors could use Iveda's intellectual property to market products, services and technologies similar to Iveda's, which could reduce demand for Iveda's products, services and technologies. Iveda may be unable to prevent unauthorized parties from attempting to copy or otherwise obtain and use its products or technology. Policing unauthorized use of Iveda's technology is difficult, and Iveda may not be able to prevent misappropriation of its technology, particularly in foreign countries where the laws may not protect its intellectual property as fully as those in the United States. Others may circumvent the trade secrets, trademarks and copyrights that Iveda currently or in the future owns. Iveda does not have patent protection with respect to its software or systems, although management is considering seeking such protection.

Iveda seeks to protect its proprietary intellectual property, which includes intellectual property that may only be protectable as a trade secret, in part by confidentiality agreements with its employees, consultants and business partners. These agreements afford only limited protection and may not provide us with adequate remedies for any breach or prevent other persons or institutions from asserting rights to intellectual property arising out of these relationships. See " Information About Iveda – Other Information – Proprietary Rights. "

Iveda Could Incur Substantial Costs Defending its Intellectual Property From Infringement By Others.

Unauthorized parties may attempt to copy aspects of Iveda's proprietary software product or to obtain and use its other proprietary information. Litigation may be necessary to enforce Iveda's intellectual property rights, to protect its trade secrets and to determine the validity and scope of the proprietary rights of others. Iveda may not have the financial resources to prosecute any infringement claims that it may have. Any litigation could result in substantial costs and diversion of resources with no assurance of success.

Iveda Could Incur Substantial Costs Defending Against Claims That Its Products Infringe On The Proprietary Rights Of Others.

The scope of any intellectual property rights that Iveda has is uncertain and may not be sufficient to prevent infringement claims against Iveda or claims that Iveda has violated the intellectual property rights of third parties. While Iveda knows of no basis for any claims of this type, the existence of and ownership of intellectual property can be difficult to verify and Iveda has not made an exhaustive search of all patent filings. Competitors may have filed applications for or may have been issued patents and may obtain additional patents and proprietary rights relating to products or processes that compete with or are related to Iveda's products and services. The scope and viability of these patents, the extent to which Iveda may be required to obtain licenses under these patents or under other proprietary rights and the cost and availability of licenses are unknown, but these factors may limit Iveda's ability to market its products and services.

Third parties could claim infringement by us with respect to any patents or other proprietary rights that they hold, and Iveda cannot assure investors that Iveda would prevail in any such proceeding as the intellectual property status of its current and future competitors' products and services is uncertain. Any infringement claim against Iveda, whether meritorious or not, could be time-consuming, result in costly litigation or arbitration and diversion of technical and management personnel, or require Iveda to develop non-infringing technology or to enter into royalty or licensing agreements.

Iveda might not be successful in developing or otherwise acquiring rights to non-infringing technologies. Royalty or licensing agreements, if required, may not be available on terms acceptable to Iveda, or at all, and could significantly harm Iveda's business and operating results. A successful claim of infringement against Iveda or Iveda's failure or inability to license the infringed or similar technology could require it to pay substantial damages and could harm its business because Iveda would not be able to continue operating its surveillance products without incurring significant additional expense. In addition, to the extent Iveda agrees to indemnify customers or other third parties against infringement of the intellectual property rights of others, a claim of infringement could require Iveda to incur substantial time, effort and expense to indemnify these customers and third parties and could disrupt or terminate their ability to use, market or sell Iveda's products. Furthermore, Iveda's suppliers may not provide it with indemnification in the event that their products are found to infringe upon the intellectual property rights of any third parties, and if they do not, Iveda would be forced to bear any resulting expense.

Risk Factors Involving Charmed Stock and the Merger

Charmed Shares Are "Penny Stock".

In general, "penny stock" includes securities of companies which are not listed on the principal stock exchanges and have a bid price in the market of less than $5.00; and companies with net tangible assets of less than $2 million ($5 million if the issuer has been in continuous operation for less than three years), or which has recorded revenues of less than $6 million in the last three years. As "penny stock," Charmed's stock therefore is subject to Rule 15g-9, which imposes additional sales practice requirements on broker-dealers which sell such securities to persons other than established customers and "accredited investors" (generally, individuals with net worth in excess of $1 million or annual incomes exceeding $200,000, or $300,000 together with their spouses, or individuals who are the officers or directors of the issuer of the securities). For transactions covered by Rule 15g-9, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser's written consent to the transaction prior to sale. Consequently, this rule may adversely affect the ability of broker-dealers to sell Charmed's stock, and therefore may adversely affect Iveda and Charmed stockholders' ability to sell the stock in the public market following the Merger.

Iveda Shareholders Will Experience Dilution As Part Of The Merger.

As part of the Merger, Iveda's shareholders will experience dilution as the existing shareholders of Charmed will continue to own their shares after the Merger and, as a result, will own approximately ten percent of the common stock of the post-Merger company. Charmed has no significant assets and no ongoing business.

There Will Be A Limited Market For Charmed Common Stock Following The Merger.

Only a very limited trading market currently exists for Charmed's common stock. As a result, any broker/dealer that makes a market in its stock or other person that buys or sells its stock following Iveda's Merger with Charmed could have a significant influence over its price at any given time. The post-Merger company cannot assure its shareholders that a market for Charmed's stock will be sustained. There is no assurance that Charmed's shares will have any greater liquidity than shares which do not trade on a public market.

Post-Merger Reporting Obligations as a Public Company Will Be Costly.

Operating a public company involves substantial costs to comply with reporting obligations under federal securities laws. These reporting obligations will increase Iveda's operating costs significantly should it complete the Merger with Charmed. The post-Merger company may not reach sufficient size to justify its public reporting status. If it were forced to become a private company, then its shareholders may lose their ability to sell their shares and there would be substantial costs associated with becoming a private company.

Once The Merger Closes, Iveda Will Have Limited Ability to Unwind the Merger.

Following the closing of the Merger, Iveda will have very limited ability to unwind the transaction. Thus, the post-Merger company will be a public, reporting company and subject to the reporting obligations of the Securities Exchange Act of 1934, as amended, and the requirements of the exchange or other market listing its common stock.

THE MERGER

The following is a description of the material aspects of the Merger, including the Merger Agreement. While we believe that the following description covers the material terms of the Merger, the description may not contain all of the information that is important to you. We encourage you to read carefully this entire information statement/prospectus, including the Merger Agreement attached to this information statement/prospectus as Annex A and incorporated herein by this reference, for a more complete understanding of the Merger.

General Terms of the Transaction; The Merger Agreement

On January 8, 2009, IntelaSight, Inc., Charmed Homes Inc., Charmed Homes Subsidiary, Inc. (the "Merging Companies"), and certain major shareholders of Charmed Homes Inc. signed the Merger Agreement. In general, the Merger Agreement will result in Iveda shareholders becoming shareholders of Charmed (holding approximately ninety-one percent (91%) of the total of approximately 11.5 million Charmed shares of common stock outstanding after completion of the Merger, not including the 2.5 million post-reverse split Charmed shares that will be owned by Iveda following the sale by Quinn and Liggins). The Merger Agreement will also result in the holders of options and warrants to purchase Iveda common stock becoming holders of options and warrants to purchase Charmed common stock. The Merger exchange ratio for all Iveda securities will be 1 for 1. The continuing Charmed shareholders will hold 845,000 shares of Charmed common stock or approximately 9% of the Charmed common stock outstanding after the Merger. Following the Merger, holders of all Iveda securities combined, on a fully diluted basis, will own approximately 93% of the outstanding securities of Charmed. All of the share numbers in this paragraph may change if Iveda sells or issues securities after the date of the Merger Agreement, which has occurred and may occur subsequent to the filing of this information statement/prospectus.

When the Merger is completed, Iveda will become a wholly-owned subsidiary of Charmed, and will continue its operations as a Washington corporation. Charmed will change its name to Iveda Corporation, a Nevada corporation, and will act as a holding corporation for Iveda.

Background and Reasons for the Offer and Subsequent Merger

Charmed has recently discontinued its homebuilding operations in Canada, and the Board of Directors and major shareholders of Charmed decided to begin looking for a company to merge with Charmed as a way to provide shareholders with a possible way to recover a portion of their equity investment in Charmed. At the same time, the Iveda Board of Directors began investigating ways to obtain additional financing for Iveda's operations and additional liquidity for existing Iveda investors. The two companies were introduced through T.R. Winston, a registered broker-dealer, with a view to a possible Merger between them.

After considering the possible Merger with Iveda, the Charmed Board of Directors has determined that the Merger is advisable, and is fair to and in the best interests of Charmed and its shareholders, and unanimously approved the Merger Agreement. In reaching its decision, the Charmed Board of Directors identified several reasons for, and potential benefits to Charmed and its shareholders of, the Merger. Charmed believes there are a number of potential benefits of the proposed Merger, including, among others:

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.

After considering the possible Merger with Charmed, the Iveda Board of Directors has determined that the Merger is advisable, and is fair to and in the best interests of Iveda and its shareholders, and unanimously approved the Merger Agreement. In reaching its decision, the Iveda Board of Directors identified several reasons for, and potential benefits to Iveda and its shareholders of, the Merger. Iveda believes there are a number of potential benefits of the proposed Merger, including, among others:

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 consideration given to Iveda securityholders was determined by the Board of Directors to be in accord with the market for companies which have elected shell status in their filings. As the registrant was current on its filings and had filed a Form SB-2 registration statement soon after its formation, it offered a more attractive opportunity than alternative public shells at similar prices.

In reaching their decisions to approve the Merger Agreement, the Iveda and Charmed Boards of Directors consulted with Iveda and Charmed's management, Keller Rohrback, PLC and Conrad Lysiak, Esq., outside legal counsel, regarding the legal terms of the Merger, and Source Capital Group, Inc., financial advisors, regarding the financial aspects of the Merger. The factors that the Iveda and Charmed Boards of Directors considered in reaching their determination included, but were not limited to, the following:

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.

The primary negative factor considered by the Boards was the ability to raise capital and operate the public company in the future. As the market has slowed, it has become harder for Iveda to meet sales objectives. If the price of the shares decreases significantly, the post-merger company may be valued at a price per share less than that of a private company. Financing may be heavily dilutive to shareholders as a result.

Representations and Warranties

The Merger Agreement contains a number of customary representations and warranties made by Iveda, on the one hand, and Charmed, on the other, regarding aspects of their respective businesses, financial condition and structure, as well as other facts pertinent to the Merger. These representations and warranties relate to the following subject matters with respect to Iveda:

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.

Charmed made representations and warranties regarding:

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.

Conduct of Iveda's Business Before Completion of the Merger

Under the Merger Agreement, Iveda has agreed that, until the earlier of the completion of the Merger or termination of the Merger Agreement, it will conduct its business in the ordinary course consistent with past practice.

Without limiting the generality of the foregoing, until completion of the Merger or termination of the Merger Agreement, Iveda has specifically agreed to not:

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.

Conduct of Charmed's Business Before Completion of the Merger

Under the Merger Agreement, Charmed has agreed that, until the earlier of the completion of the Merger or termination of the Merger Agreement, Charmed and its subsidiary will conduct their business in the ordinary course consistent with past practice.

Without limiting the generality of the foregoing, until completion of the Merger or termination of the Merger Agreement, Charmed and the Merger Sub have specifically agreed to not:

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

Summary of Principal Conditions to Completing the Merger

Completion of the Merger is subject to the satisfaction of the following principal conditions, all of which may be waived by the Charmed and/or Iveda Boards of Directors, as applicable, if unmet, except for the condition that the Iveda shareholders approve the Merger Agreement and the Merger:

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.

Indemnification of Iveda and its Directors and Officers

Subsequent to the effective time of the Merger, certain major shareholders of Charmed have agreed to indemnify Iveda and its officers, directors and affiliates for liabilities and expenses incurred directly or indirectly as a result of any inaccuracy or breach of representations or warranties made by such shareholder, Charmed or the Merger Sub, or such shareholder's, Charmed's or the Merger Sub's failure to perform or comply with any covenant contained in the Merger Agreement. In addition, Charmed and its major shareholders have agreed to indemnify Iveda and its directors, officers and controlling persons for liabilities and expenses resulting from any untrue statements of a material fact or any material omission in information provided to Iveda by Charmed or its subsidiary for use in this information statement/prospectus. Such indemnification shall generally continue for two years following the closing of the Merger.

Termination of the Merger Agreement

The Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the effective time of the Merger by mutual written agreement of Iveda and Charmed notwithstanding any approval of the Merger Agreement by the shareholders of Iveda. Alternatively, either Iveda or Charmed can terminate the Merger Agreement and abandon the Merger notwithstanding any approval of the Merger Agreement by the shareholders of Iveda if the Merger has not been consummated on or before July 31, 2009.

Charmed may terminate the Merger Agreement and abandon the Merger at any time prior to the effective time of the Merger notwithstanding any approval of the Merger Agreement by the shareholders of Iveda, if:

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.

Iveda may terminate the Merger Agreement and abandon the Merger at any time prior to the effective time of the Merger notwithstanding any approval the Merger Agreement by the shareholders of Iveda, if:

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.

Any party desiring to terminate the Merger Agreement pursuant to the above requirements will give notice of such termination to the other party.

Effect of Termination of the Merger Agreement

If the Merger Agreement is terminated pursuant to the requirements summarized above, the Merger Agreement will become void and of no effect without liability of any party (or any shareholder, director, officer, employee, agent, consultant or representative of such party) to the other party thereto, except for any liability of a party then in breach.

Directors and Executive Officers of Charmed Following the Merger

The executive officers and directors of Charmed will be:

David Ly: President, CEO and Chairman of the Board. Information about Mr. Ly may be found on page 77.

Gregory Omi: Director. Information about Mr. Omi may be found on page 78.

Jody Bisson: Director. Information about Ms. Bisson may be found on page 78.

Robert Brilon: CFO. Information about Mr. Brilon may be found on page 77.

Luz Berg: Senior VP of Operations & Marketing; Secretary. Information about Ms. Berg may be found on page 77.

Securities and Employment Agreements to be Received in the Merger

The above directors and executive officers will receive shares of common stock, options and warrants in Charmed at the same ratio as other Iveda securityholders, and Mr. Ly, Mr. Brilon and Ms. Berg will receive new employment agreements with Charmed with substantially similar terms as their existing employment agreements with Iveda. Following the closing of the Merger, the new directors and officers of Charmed will own the following Charmed securities –

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)

(1) Assuming $2 Charmed stock price as of last trade date of February 4, 2009

(2) Using SFAS 123R criteria current valuation method, at $0.10 exercise price

(3) Using SFAS 123R criteria current valuation method, at $1.00 exercise price

Other than current annual salary of $88,000 for David Ly and Luz Berg and $35,200 for Bob Brilon, no other additional compensation or cash will be payable to directors and executive officers following the Merger.

Federal Income Tax Considerations

The following discussion summarizes the material Federal income tax consequences of the Merger. The discussion does not address all aspects of Federal income taxation that may be relevant to particular shareholders and may not be applicable to shareholders who are not citizens or residents of the United States, or who will acquire their Charmed shares pursuant to the exercise or termination of employee stock options or otherwise as compensation, nor does the discussion address the effect of any applicable foreign, state, local or other tax laws. Except as otherwise noted, this discussion assumes that shareholders hold their Iveda shares as capital assets within the meaning of Section 1221 of the Code. EACH SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF FOREIGN, STATE, LOCAL AND OTHER TAX LAWS.

In the opinion of Iveda's tax counsel Bade & Baskin, PLC, the Merger of the Merger Sub with and into Iveda pursuant to which the shareholders of Iveda will exchange their shares for shares of Charmed will, under current law, constitute a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and Charmed, Charmed Homes Subsidiary, Inc. and Iveda will each be a party to the reorganization within the meaning of Section 368(b) of the Code. In rendering such opinion, counsel has relied upon written representations and covenants of Charmed and Iveda. No ruling has been sought from the Internal Revenue Service as to the Federal income tax consequences of the Merger, and the opinion of counsel set forth below is not binding on the Internal Revenue Service or any court.

As a tax-free reorganization, the Merger will have the following Federal income tax consequences for Charmed, Iveda, and the shareholders of Iveda:

1. No gain or loss will be recognized by holders of Iveda shares as a result of the exchange of such shares for Charmed shares pursuant to the Merger, except that gain or loss will be recognized on the receipt of cash, if any, received in lieu of fractional shares. Any cash received by a shareholder of Iveda in lieu of a fractional share will be treated as received in exchange for such fractional share, and any gain or loss recognized as a result of the receipt of such cash will be capital gain or loss equal to the difference between the cash received and the portion of the shareholder's basis in the Iveda shares allocable to such fractional share interest.

2. The tax basis of the Charmed shares received by each shareholder of Iveda will equal the tax basis of such shareholder's Iveda shares (reduced by any amount allocable to fractional share interests for which cash is received) exchanged in the Merger.

3. The holding period for the Charmed shares received by each shareholder of Iveda will include the holding period for the Iveda shares of such shareholder exchanged in the Merger.

4. Neither Iveda nor Charmed will recognize gain or loss as a result of the Merger.

Accounting Treatment of the Merger

The Merger transaction is a reverse recapitalization, equivalent to the issuance of stock by the private company for the net monetary assets of the shell corporation accompanied by a recapitalization. The accounting is similar to that resulting from a reverse acquisition, except that no goodwill or other intangible assets should be recorded.

Regulatory Requirements

There are no material federal or state regulatory requirements related to the Merger.

Appraisal Rights for Charmed Shareholders

No appraisal or dissenters rights will be available for Charmed shareholders as a result of the Merger.

Dissenters' Rights as to Iveda Shares

The Washington Business Corporation Act ("WBCA") provides that if a shareholder in a corporation party to a merger follows specific procedures, the shareholder is entitled to be paid the fair value of his or her shares. The following summarizes the procedures to be followed if an Iveda shareholder desires to be paid cash for his or her Iveda shares instead of receiving Charmed shares, and the procedures Iveda must follow to inform its shareholders of dissenters' rights. See Annex B (a copy of the relevant parts of the WBCA) for the details. "You" refers to Iveda shareholders who desire to dissent and be paid the fair value of their shares.

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.

Within 30 days after the later of the effective date of the Merger and the date on which Iveda receives a proper payment demand from a shareholder, Iveda will pay each dissenter who has complied with the WBCA the amount that Iveda has estimated to be the fair value of the shareholder's shares immediately before the first public announcement of the Merger (which occurred on November 17, 2008), plus any interest due. If a shareholder who properly asserted dissenters rights is unsatisfied with the corporation's payment, the shareholder may submit the dissenter's own estimate of the fair value of the shares and demand payment of that amount, less amounts already paid to the dissenter by the corporation. If the corporation does not agree with the shareholder's estimate of fair value, the corporation may start a court proceeding and ask the court to determine the fair value of the shares, with such an action required to commence within sixty days after receipt by the corporation of the dissenter's conflicting payment demand. The court would appoint appraisers to determine fair value. Dissenters will be entitled to judgment for the fair value of the shares, plus interest, less amounts already paid to the dissenters by the corporation, all as determined by the court. Costs of the court proceeding, including appraisers, and attorney fees would be paid by the corporation, unless the court finds that the dissenters acted arbitrarily, vexatiously, or not in good faith in demanding payment, in which case the dissenters would be responsible to pay the costs of the court proceeding.

If more than one percent of the outstanding Iveda shares dissent, the Merger may not occur at the sole discretion of the Board of Directors.

The Merger Agreement – Investor Disclaimer

The foregoing description of the Merger Agreement does not purport to be complete, and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached to this information statement/prospectus as Annex A . The Merger Agreement is not in any way intended as a document for investors to obtain factual information about the current state of affairs of Charmed. Such information can be found in Charmed's reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. The Merger Agreement contains representations and warranties made by Charmed and Iveda which are used as a tool to allocate risks between the parties where the parties do not have completed knowledge of all facts. Furthermore, the representations, warranties and covenants contained in the Merger Agreement were made only for the purposes of the Merger Agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and are subject to limitations agreed upon by the contracting parties, including being qualified, modified or limited by confidential disclosures exchanged between the parties in connection with the execution of the Merger Agreement. Investors are not third-party beneficiaries under the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in Charmed's public disclosures.

INDEX TO FINANCIAL STATEMENTS

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Intelasight, Inc. d/b/a Iveda Solutions

Mesa, Arizona

We have audited the accompanying balance sheets of Intelasight, Inc. d/b/a Iveda Solutions as of December 31, 2008 and 2007, and the related statements of operations, stockholders’ equity, and cash flows for each of the years then ended. The management of Intelasight, Inc. d/b/a Iveda Solutions is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Intelasight, Inc. d/b/a Iveda Solutions as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred significant operating losses during the years ended December 31, 2008 and 2007, and throughout its existence. These matters raise substantial doubt about the ability of the Company to continue as a going concern. Management's plans in regard to these matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Subsequent to the issuance of the Company’s financial statements referred to above and our report dated April 23, 2009, management determined that the future minimum lease commitments disclosed in Note 7 to the financial statements did not reflect the terms of one agreement. Note 7 has been restated to include the disclosures related to this agreement.

/s/ Eide Bailly LLP

Minneapolis, Minnesota

April 23, 2009, except for the last paragraph above and

Note 7, which are as of May 14, 2009

F-2

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

BALANCE SHEETS

DECEMBER 31, 2008 AND 2007

	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

See accompanying Notes to Financial Statements.

F-3

	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

See accompanying Notes to Financial Statements.

F-4

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2008 AND 2007

	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	)

See accompanying Notes to Financial Statements.

F-5

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2008 AND 2007

	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

See accompanying Notes to Financial Statements.

F-6

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2008 AND 2007

	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

See accompanying Notes to Financial Statements.

F-7

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

IntelaSight, Inc. dba Iveda Solutions (“Iveda” or “the Company”) began operations

January 24, 2005. The Company installs video surveillance equipment, primarily for security purposes, and provides video hosting, archiving and real-time remote surveillance services to a variety of businesses and organizations throughout the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated accumulated losses of ($2,968,820) through December 31, 2008.

A multi-step plan was adopted by management to enable the company to continue to operate and begin to report operating profits. The highlights of that plan are:

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.

Basis of Accounting

The Company’s financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates.

Revenue and Expense Recognition

Revenues from monitoring services are recognized when the services are provided. Expenses are recognized as incurred.

Revenues from fixed-price equipment installation contracts are recognized on the percentage-of-completion method. The percentage completed is measured by the percentage of costs incurred to date to estimated total costs for each contract. This method is used because management considers expended costs to be the best available measure of progress on these contracts. Because of inherent uncertainties in estimating costs and revenues, it is at least reasonably possible that the estimates used will change.

F-8

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue and Expense Recognition (Continued)

Contract costs include all direct material, subcontractors, labor costs, and equipment costs and those indirect costs related to contract performance. General and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements are accounted for as changes in estimates in the current period. Profit incentives are included in revenues when their realization is reasonably assured. Claims are included in revenues when realization is probable and the amount can be reliably estimated.

The liability, "Billings in excess of costs and estimated earnings on uncompleted contracts," represents billings in excess of revenues recognized.

Concentrations

Revenues from one customer represented approximately 13% of total revenues for the year ended December 31, 2008. The accounts receivable from the customer was $5,160 as of December 31, 2008. No other customers represented greater than 10% of total revenues for 2008.

Revenues from two customers represented approximately 17% and 13% of total revenues for the year ended December 31, 2007. The accounts receivable from these customers were $-0- as of December 31, 2007. No other customers represented greater than 10% of total revenues in 2007.

Substantially all cash is deposited in one financial institution. At times, amounts on deposit

may be in excess of the FDIC insurance limit.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of twelve months or less to be cash equivalents.

Accounts Receivable

The Company provides an allowance for doubtful collections which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Receivables past due more than 120 days are considered delinquent. Delinquent receivables are written off based on individual credit valuation and specific circumstances of the customer. As of December 31, 2008 and 2007, no allowance for uncollectible accounts was deemed necessary. The Company does not generally charge interest on past due receivables.

F-9

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Inventory

Inventory consists of equipment purchased for installation projects and is recorded at the lower of cost or market.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of three to seven years. Expenditures for routine maintenance and repairs are charged to expense as incurred. Depreciation expense for the years ended December 31, 2008 and 2007 was $49,063 and $24,735, respectively.

Deferred Revenue

Deposits received from customers on future installation projects are recorded as deferred revenue.

Advertising Costs

Advertising costs are expensed as incurred. The Company does not incur any direct response advertising costs. Advertising expenses were $113,363 and $16,511 for the years ended December 31, 2008 and 2007, respectively.

Research and Development Costs

Research and development costs are expensed as incurred. Research and development expenses were $17,871 and $- for the years ended December 31, 2008 and 2007, respectively.

Income Taxes

Deferred income taxes are recognized in the financial statements for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates. Temporary differences arise from depreciation, deferred rent expense, and net operating losses. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that represents the Company's best estimate of such deferred tax assets that, more likely than not, will be realized. Income tax expense is the tax payable for the year and the change during the year in deferred tax assets and liabilities. During 2008, the Company reevaluated the valuation allowance for deferred tax assets and determined that no current benefits should be recognized for the year ended December 31, 2008, and that benefits recorded in prior years would not be recognized.

In June 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in tax positions. FIN 48 requires financial statement recognition of the impact of a tax position, if that position is more likely than not to be sustained on examination, based on the technical merits of the position. The company’s 2005, 2006 and 2007 income tax returns are open to audit by the Internal Revenue Service. There are no uncertain tax positions that have been identified for those years, and accordingly, no liability has been recorded.

F-10

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Sales Tax

The Company is liable for sales taxes in Arizona and California. Sales tax invoiced to customers is recorded as a liability on the Company’s financial statements.

Stock-Based Compensation

On January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123R, Share-Based Payment , which requires the recognition of an expense related to the fair value of stock-based compensation awards. The Company elected the modified prospective transition method as permitted by SFAS No. 123R. Under this transition method, stock-based compensation expense for the years ended December 31, 2008 and 2007 includes compensation expense for stock-based compensation granted on or after the date SFAS 123R was adopted based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123R. The Company recognizes compensation expense on a straight-line basis over the requisite service period of the award. The fair value of stock-based compensation awards granted prior to, but not yet vested as of December 31, 2008 and 2007, were estimated using the “minimum value method” as prescribed by original provisions of SFAS No. 123, Accounting for Stock-Based Compensation , therefore, no compensation expense is recognized for these awards in accordance with SFAS No. 123R. The Company recognized $222,892 and $29,209 of stock-based compensation expense for the years ended December 31, 2008 and 2007, respectively.

Fair Value of Financial Instruments

On January 1, 2008, the Company adopted Statement of Financial Accounting Standard No. 157, Fair Value Measurements (SFAS 157). As permitted, adoption of SFAS 157 has been delayed for certain nonfinancial assets and nonfinancial liabilities to January 1, 2009. SFAS 157 applies to reported balances that are required or permitted to be measured at fair value under an existing accounting pronouncement. SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability and establishes a fair value hierarchy. The fair value hierarchy consists of three levels of inputs that may be used to measure fair value as follows:

Level 1 – Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 – Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows.

F-11

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments (Continued)

Level 3 – Inputs that are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

Securities available for sale are recorded at fair value on a recurring basis. Fair value measurement is based upon quoted prices, if available. If quoted prices are not available, fair values are measured using independent pricing models or other model-based valuation techniques such as the present value of future cash flows, adjusted for the security’s credit rating, prepayment assumptions, and other factors such as credit loss assumptions. Securities valued using Level 2 inputs include mutual funds valued at a net asset valuation or “NAV”. The Company does not have any securities that are valued using Level 1 or 3 inputs.

The Company also adopted Statement of Financial Accounting Standard No. 159, The Fair Value Option for Financial Assets and Liabilities (SFAS 159) on January 1, 2008. SFAS 159 allows entities the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on an instrument-by-instrument basis. The Company has not elected to measure any existing financial instruments at fair value at January 1, 2008, as permitted under SFAS 159. However, the Company may elect to measure newly acquired financial instruments at fair value in the future.

New Accounting Standards

In December 2007, the FASB issued SFAS 141(revised 2007), “Business Combinations,” to increase the relevance, representational faithfulness, and comparability of the information a reporting entity provides in its financial reports about a business combination and its effects. SFAS 141R replaces SFAS 141, “Business Combinations” but, retains the fundamental requirements of SFAS 141 that the acquisition method of accounting be used and an acquirer be identified for all business combinations. SFAS 141R expands the definition of a business and of a business combination and establishes how the acquirer is to: (1) recognize and measure in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2) recognize and measure the goodwill acquired in the business combination or a gain from a bargain purchase; and (3) determine what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, and is to be applied prospectively. Early adoption is prohibited. The Company has not yet determined the full effect, that the adoption of SFAS 141R will have on the Company’s financial statements.

F-12

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New Accounting Standards (continued )

In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51,” to improve the relevance, comparability, and transparency of the financial information a reporting entity provides in its consolidated financial statements.

SFAS 160 amends ARB 51 to establish accounting and reporting standards for noncontrolling interests in subsidiaries and to make certain consolidation procedures consistent with the requirements of SFAS 141R. It defines a noncontrolling interest in a subsidiary as an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 changes the way the consolidated income statement is presented by requiring consolidated net income to include amounts attributable to the parent and the noncontrolling interest. SFAS 160 establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary which do not result in deconsolidation. SFAS 160 also requires expanded disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners of a subsidiary. SFAS 160 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. SFAS 160 shall be applied prospectively, with the exception of the presentation and disclosure requirements which shall be applied retrospectively for all periods presented. The Company has not yet determined the effect, if any, that the adoption of SFAS 160 will have on the Company’s financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of non-governmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement does not have a material effect on the Company’s financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

F-13

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Reclassification

Certain amounts in 2007 have been reclassified to conform to the 2008 presentation.

NOTE 2

ESCROW DEPOSITS

The Company made an escrow deposit of $50,000 for the purchase of the majority of outstanding stock of Charmed Homes, Inc., pursuant to a reverse merger agreement signed in January 2009.

NOTE 3

ACCRUED EXPENSES

Accrued expenses of $70,285 as of December 31, 2008, consists of $40,567 of deferred rent, $23,905 of accrued payroll and associated costs, and $5,813 of other liabilities.

Accrued expenses of $47,898 as of December 31, 2007 consists of $33,545 of accrued sales tax, $6,068 of accrued payroll and associated costs, $5,804 of accrued interest and $2,481 of other liabilities.

NOTE 4

COSTS, ESTIMATED EARNINGS AND BILLINGS ON CONTRACTS IN PROCESS

There were no contracts in process as of December 31, 2008. Accordingly, there are no amounts reported in the accompanying balance sheet as of December 31, 2008.

As of December 31, 2007, contracts in process were as follows:

	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	)

F-14

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

Reported in the accompanying balance sheets as follows:

	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

In the fourth quarter of 2007, the Company borrowed $100,000 for use in operations. The principal and interest (charged at 10%) is payable in a single payment in December 2008. During the first quarter 2008, the Company borrowed $150,000 for use in operations. The principal and interest (charged at 10%) is payable in a single payment in December 2008. The note holders of the $100,000 and $150,000 exercised their right to convert unpaid principle and interest in December 2008 at $0.50 per share

In June 2008, the Company borrowed $300,000 for use in operations at 12% interest payable in December 2008. The note holders exercised their rights to convert the unpaid principal and interest to common stock in 2008 at $1.00 per share.

In 2008 all outstanding debt and accrued interest was converted to 848,214 shares of common stock.

NOTE 6

OBLIGATIONS UNDER CAPITAL LEASES

In 2008 and 2007, the Company became the lessee of certain computer equipment under capital leases extending through 2011. The assets and liabilities under the capital leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are depreciated over their estimated useful lives. The computer equipment has been recorded in the accompanying financial statements in office equipment of $213,460 and $3,813 and accumulated depreciation of $21,628 and $64 at December 31, 2008 and 2007, respectively. The leases have imputed interest rates between 8% and 25% and monthly payments between $43 and $1,435.

Future minimum lease payments under the capital leases as of December 31, 2008 for each of the remaining years are as follows:

F-15

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

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

The Company leased its office facilities under a non-cancelable operating lease expiring August 2011 and requires minimum monthly payments ranging from $8,098 to $9,015. Rent expense was $77,008 for the year ended December 31, 2008. The Company also has non-cancellable data center services agreement for $6,110 per month, expiring September 2011. Data center services expense was $18,330 for the year ended December 31, 2008.

Future minimum lease payments under this leases are as follows:

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

In 2007, the Company completed an offering of 853,275 shares of $.001 par value, Series A and A-1 Preferred Stock at $0.94 and $4.028 per share, respectively. The Company’s Series A Preferred stockholders, at any time, have the right to convert their stock into common stock shares on a 1:1 basis, adjusted for specific items defined in the Purchase Agreement. The Preferred Stock has liquidation preferences over the other outstanding securities of the Company.

All outstanding Series A and A-1 Preferred Stock was converted to common stock during 2008. The total common shares issued with respect to the conversion were 1,307,347.

F-16

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 9

STOCK OPTION PLAN

In 2008, the Company established a stock option plan (the Plan) in which options to purchase the common stock of the Company may be awarded to employees and consultants. The Company has reserved 2,000,000 shares of common stock for issuance under the plan. Under the plan, the Company memorialized options granted during 2007 and 2006.

Stock options may be granted as either incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or as options not qualified under Section 422 of the Code. All options are issued with an exercise price at or above 100 percent of the fair market value of the common stock on the date of the grant as determined by the Company's board of directors. Incentive stock option plan awards of restricted stock are intended to qualify as deductible performance-based compensation under Section 162(m) of the Code. Incentive Stock Option awards of unrestricted stock are not designed to be deductible to the Company under Section 162(m). Under the Plan, stock options will terminate on the tenth anniversary date of the grant or earlier if provided in the grant.

The Company has also granted non-qualified stock options to employees and contractors. All non-qualified options are generally issued with an exercise price that may be less than 100 percent of the fair value of the common stock on the date of the grant as determined by

the Company's board of directors. Options may be exercised up to ten years following the date of the grant, with vesting schedules determined by the Company upon grant. Options fully vest immediately upon grant through a range of four to ten years after the grant date. Vested options may be exercised up to three months following date of termination of the relationship. The fair values of options are determined using the Black-Scholes option-pricing model. The estimated fair value of options is recognized as expense on the straight-line basis over the options’ vesting periods. The Company has unrecognized stock-based compensation with a weighted-average term of approximately ten years of $115,784 at December 31, 2008.

F-17

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

Stock option transactions during 2008 and 2007 were as follows:

	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

Information with respect to stock options outstanding and exercisable at December 31, 2008 is as follows:

Options Outstanding

Options Exercisable

Number

Weighted -

Number

Outstanding

Average

Weighted -

Exercisable

Weighted -

Range of

Remaining

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

The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for options granted.

				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	%

Expected volatility was estimated by using the average volatility of three public companies offering services similar to the Company. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of options is based on the average of three public companies offering services similar to the Company.

F-18

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 10

STOCK WARRANTS

The Company issued stock warrants to employees and a member of the board of directors. Warrants may be exercised up to between five and ten years following the date of the grant, with vesting schedules determined by the Company upon issue. Warrants fully vest immediately upon issue through three years after the issue date. The fair value of warrants are determined using the Black-Scholes option-pricing model. The estimated fair value of warrants is recognized as expense on the straight-line basis over the warrants’ vesting periods. The Company has unrecognized stock-based compensation with a weighted-average term of approximately eight years of $15,449 at December 31, 2008.

Stock warrant transactions for 2008 and 2007 were as follows:

	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

Information with respect to stock options outstanding and exercisable at December 31, 2008 is as follows:

Warrants Outstanding

Warrants Redeemable

Number

Weighted -

Number

Outstanding

Average

Weighted -

Redeemable

Weighted -

Range of

Remaining

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

F-19

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

The fair value of each warrant issued is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for warrants issued.

	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	%

Expected volatility was estimated by using the average volatility of three public companies offering services similar to the Company. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the grant date. The expected life of warrants is based on the average of three public companies offering services similar to the Company.

NOTE 11

INCOME TAXES

The components of the (provision) benefit for income taxes for the years ended

December 31 were as follows:

		2008				2007
Deferred Income Tax (Provision) Benefit		$	(558,370	)		$	182,670

Temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities and tax credit and operating loss carryforwards that create deferred tax assets and liabilities are as follows:

	2008			2007
Tax Operating Loss Carryforward	$	1,115,000		$	562,000
Accelerated Depreciation		(13,330	)		(3,630	)
Valuation Allowance		(1,101,670	)		-
	$	-		$	558,370

The total deferred tax assets in the accompanying balance sheets include the following amounts of deferred tax assets and liabilities:

	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

F-20

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

These amounts have been presented in the Company’s financial statements as follows:

	2008			2007
Noncurrent Deferred Income Tax Asset	$	1,101,670		$	558,370
Valuation Allowance		(1,101,670	)		-
	$	-		$	558,370

As of December 31, 2008, the Company has federal net operating loss carryforwards for income tax purposes of approximately $2,627,000 which will begin to expire in 2025. The Company also has Arizona and California net operating loss carryforwards for income tax purposes of approximately $2,012,000 and $614,000 which will begin to expire in 2010. These carryforwards have been utilized in the determination of the deferred income taxes for financial statement purposes. The following table accounts for federal net operating loss carryforwards only.

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

The tax provision differs from the expense that would result from applying Federal statutory rates to income before income taxes due to the effect of state income taxes and because certain expenses are deducted for financial reporting that are not deductible for tax purposes.

	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

During 2007, the Company’s majority shareholder relinquished 1,423,002 shares of common stock to the Company. The shareholder received no consideration for the shares.

The Company has provided surveillance services since 2005 to entities owned by Ross Farnsworth, either through a family partnership or through ahis majority owned LLC, and subsequently Ross Farnsworth became a shareholder of The Company in 2006. Mr. Farnsworth’s holdings are less than 5% of the Company but the revenue for years ending 2008 and 2007 was $40,466 and $ 35,672, respectively, and there was a trade accounts receivable balance of $3,021 and $2,105 at December 31, 2008 and 2007.

F-21

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

NOTE 13

EARNINGS (LOSS) PER SHARE

The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required by SFAS No. 128, “Earnings Per Share“(“EPS”).

Basic EPS is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding. Diluted EPS also includes the effect of dilutive potential common shares. The Company had net losses for the years ended December 31, 2008 and 2007 and the effect of including dilutive securities in the earnings per common share would have been anti-dilutive. Accordingly, all options to purchase common shares were excluded from the calculation of diluted earnings per share for the years ended December 31, 2008 and 2007.

	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

The Company issued 50,000 shares of common stock for $1 per share in February 2009.

On January 8, 2009, Charmed Homes Inc. (“Charmed") entered into a merger agreement (the "Merger Agreement") with IntelaSight, Inc., a Washington corporation dba Iveda Solutions ("Iveda"), Charmed Homes Subsidiary, Inc., a Nevada corporation and a wholly owned subsidiary of Charmed ("Merger Sub"), and certain Charmed shareholders.

F-22

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2008 AND 2007

Under the Merger Agreement, Charmed and Iveda have agreed, subject to the satisfaction or waiver of the closing conditions set forth in the Merger Agreement, to engage in a merger whereby the Merger Sub will merge with and into Iveda, and as a result Iveda will become a wholly-owned subsidiary of Charmed. As part of the merger, Iveda's stock and derivative securities will be exchanged for stock and derivative securities of Charmed at a ratio of one share of Charmed's common stock for each one share held in Iveda immediately prior to the merger closing. As part of the merger, Charmed will change its name to "Iveda Corporation."

Under the Merger Agreement, the Company has committed to pay an additional $150,000 to certain shareholders of Charmed Homes in addition to the $50,000 in escrow at December 31, 2008.

F-23

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

FINANCIAL STATEMENTS

(UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008

F-24

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

BALANCE SHEETS

	(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

See accompanying Notes to Financial Statements.

F-25

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

BALANCE SHEETS

	(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

See accompanying Notes to Financial Statements.

F-26

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

STATEMENTS OF OPERATIONS

(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2009 AND 2008

	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	)

See accompanying Notes to Financial Statements.

F-27

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	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

F-28

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

IntelaSight, Inc. dba Iveda Solutions (“Iveda” or “the Company”) began operations January 24, 2005. The Company installs video surveillance equipment, primarily for security purposes, and provides video hosting, archiving and real-time remote surveillance services to a variety of businesses and organizations throughout the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company generated accumulated losses of ($3,485,941) through March 31, 2009. These conditions raise substantial doubt about the company’s ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverabiiity and classification of assets or the amounts and classification of liabilities that may result from the outcome of these uncertainties.

A multi-step plan was adopted by management to enable the company to continue to operate and begin to report operating profits. The highlights of that plan are:

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.

On January 8, 2009, Charmed Homes Inc. (“Charmed") entered into a merger agreement (the "Merger Agreement") with the Company, Charmed Homes Subsidiary, Inc., a Nevada corporation and a wholly owned subsidiary of Charmed ("Merger Sub"), and certain Charmed shareholders.

Under the Merger Agreement, the Company has committed to pay an additional $150,000 to certain shareholders of Charmed Homes in addition to the $50,000 in escrow at December 31, 2008.

Basis of Presentation and Accounting

The unaudited interim financial statements of the Company included herein have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting including the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These statements do not include all disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual audited financial statements and should be read in conjunction with the Company’s audited financial statements and related notes for the year ended December 31, 2008,

F-29

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

In the opinion of management, the accompanying unaudited interim financial statements reflect all adjustments, including normal recurring accruals, necessary to present fairly the financial position of the Company at March 31, 2009, the results of operations for the three months ended March 31, 2009 and 2008, and the cash flows for the three months ended March 31, 2009 and 2008. The results of operations for the three months ended March 31, 2009, are not necessarily indicative of the expected results of operations for the full year or any future period. The balance sheet as of December 31, 2008, is derived from the Company’s audited financial statement s.

Use of Estimates

Revenue and Expense Recognition

Revenues from monitoring services are recognized when the services are provided. Expenses are recognized as incurred.

F-30

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

Income Taxes

In June 2006, the Financial Accounting Standards Board (“FASB”) issued FIN 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in tax positions. FIN 48 requires financial statement recognition of the impact of a tax position, if that position is more likely than not to be sustained on examination, based on the technical merits of the position. The company’s 2005, 2006 and 2007 income tax returns are open to audit by the Internal Revenue Service. There are no uncertain tax positions that have been identified for those years, and accordingly, no liability has been recorded.

Stock-Based Compensation

On January 1, 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) 123R, Share-Based Payment , which requires the recognition of an expense related to the fair value of stock-based compensation awards. The Company elected the modified prospective transition method as permitted by SFAS 123R. Under this transition method, stock-based compensation expense for the years ended December 31, 2008 and 2007 includes compensation expense for stock-based compensation granted on or after the date SFAS 123R was adopted based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. The Company recognizes compensation expense on a straight-line basis over the requisite service period of the award. The fair value of stock-based compensation awards granted prior to, but not yet vested as of December 31, 2008 and 2007, were estimated using the “minimum value method” as prescribed by original provisions of SFAS 123, Accounting for Stock-Based Compensation , therefore, no compensation expense is recognized for these awards in accordance with SFAS 123R. The Company has recognized $10,000 and $0 of stock compensation for the three months ended March 31, 2009 and 2008, respectively.

Fair Value of Financial Instruments

On January 1, 2008, the Company adoptedSFAS 157, Fair Value Measurements. As permitted, adoption of SFAS 157 has been delayed for certain nonfinancial assets and nonfinancial liabilities to January 1, 2009. SFAS 157 applies to reported balances that are required or permitted to be measured at fair value under an existing accounting pronouncement. SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability and establishes a fair value hierarchy. The fair value hierarchy consists of three levels of inputs that may be used to measure fair value as follows:

F-31

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

Level 1 – Inputs that utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 3 – Inputs that are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

The Company also adopted SFAS 159, The Fair Value Option for Financial Assets and Liabilities on January 1, 2008. SFAS 159 allows entities the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities on an instrument-by-instrument basis. The Company has not elected to measure any existing financial instruments at fair value at January 1, 2008, as permitted under SFAS 159. However, the Company may elect to measure newly acquired financial instruments at fair value in the future.

New Accounting Standards

In May 2009, the FASB issued SFAS 165 “Subsequent Events”. SFAS 165 provides general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued or available to be issued. The statement sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements. The statement also sets forth the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements. Furthermore, this statement identifies the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. It is effective for interim or annual financial periods ending after June 15, 2009. Management is currently evaluating the impact of this statement.

F-32

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

In April 2009, the FASB issued three related FASB Staff Positions (“FSP”): (i) FSP FAS 115-2 and FAS 124-2, “Recognition of Presentation of Other-Than-Temporary Impairments” (“FSP FAS 115-2 and FAS 124-2”), (ii) FSP FAS 107-1 and Accounting Principles Board Opinion (“APB”) 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1 and APB 28-1”), and (iii) FSP FAS 157-4, “Determining the Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4), which are effective for interim and annual reporting periods ending after June 15, 2009. FSP FAS 115-2 and FAS 124-2 amend the other-than-temporary impairment guidance in U.S. GAAP for debt securities to modify the requirement for recognizing other-than-temporary impairments, change the existing impairment model, and modify the presentation and frequency of related disclosures. FSP FAS 107-1 and APB 28-1 require disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. FSP FAS 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157, “Fair Value Measurements” (“SFAS 157”). We are currently evaluating the impact of adopting these Staff Positions, but we do not expect the adoption to have a material impact on our consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS 141(revised 2007), “Business Combinations,” to increase the relevance, representational faithfulness, and comparability of the information a reporting entity provides in its financial reports about a business combination and its effects. SFAS 141R replaces SFAS 141, “Business Combinations” but, retains the fundamental requirements of SFAS 141 that the acquisition method of accounting be used and an acquirer be identified for all business combinations. SFAS 141R expands the definition of a business and of a business combination and establishes how the acquirer is to: (1) recognize and measure in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (2) recognize and measure the goodwill acquired in the business combination or a gain from a bargain purchase; and (3) determine what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is applicable to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, and is to be applied prospectively. Early adoption is prohibited. The adoption of SFAS 141R does not have a material effect on the Company’s financial statements .

In December 2007, the FASB issued SFAS 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB 51,” to improve the relevance, comparability, and transparency of the financial information a reporting entity provides in its consolidated financial statements.

F-33

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

SFAS 160 amends ARB 51 to establish accounting and reporting standards for noncontrolling interests in subsidiaries and to make certain consolidation procedures consistent with the requirements of SFAS 141R. It defines a noncontrolling interest in a subsidiary as an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. SFAS 160 changes the way the consolidated income statement is presented by requiring consolidated net income to include amounts attributable to the parent and the noncontrolling interest. SFAS 160 establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary which do not result in deconsolidation. SFAS 160 also requires expanded disclosures that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners of a subsidiary. SFAS 160 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008, and interim periods within those fiscal years. Early adoption is prohibited. SFAS 160 shall be applied prospectively, with the exception of the presentation and disclosure requirements which shall be applied retrospectively for all periods presented. The adoption of SFAS 160 does not have a material effect on the Company’s financial statements.

In May 2008, the FASB issued SFAS 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of non-governmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement does not have a material effect on the Company’s financial statements.

In March 2008, the FASB issued SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”. SFAS 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of SFAS 161 does not have a material effect on the Company’s financial statements.

NOTE 2: ESCROW DEPOSITS

The Company made an escrow deposit of $50,000 for the purchase of the majority of outstanding stock of Charmed Homes, Inc., pursuant to a reverse merger agreement signed in January 2009.

NOTE 3: ACCRUED EXPENSES

Accrued expenses of $85,428 as of March 31, 2009, consists of $37,664 of deferred rent, $36,381 of accrued payroll and associated costs, and $11,383 of other liabilities.

Accrued expenses of $70,285 as of December 31, 2008, consists of $40,567 of deferred rent, $23,905 of accrued payroll and associated costs, and $8,993 of other liabilities.

F-34

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 4: NOTES PAYABLE

In the fourth quarter of 2007, the Company borrowed $100,000 for use in operations. The principal and interest (charged at 10%) was payable in a single payment in December 2008. During the first quarter 2008, the Company borrowed $150,000 for use in operations. The principal and interest (charged at 10%) was payable in a single payment in December 2008. The note holders of the $100,000 and $150,000 exercised their right to convert unpaid principle and interest in December 2008 at $0.50 per share

In 2008 all outstanding debt and accrued interest was converted to 848,214 shares of common stock.

In March 2009, the Company borrowed $50,000 for use in operations at 12% interest payable upon demand, unsecured.

NOTE 5: SERIES A AND A-1, CONVERTIBLE PREFERRED STOCK

All outstanding Series A and A-1 Preferred Stock was converted to common stock during 2008. The total common shares issued with respect to the conversion were 1,307,347.

NOTE 6: RELATED PARTY TRANSACTIONS

The Company has provided surveillance services since 2005 to entities owned by Ross Farnsworth, either through a family partnership or through ahis majority owned LLC, and subsequently Ross Farnsworth became a shareholder of The Company in 2006. Mr. Farnsworth’s holdings are less than 5% of the Company but the revenue for the three months ended March 31, 2009 and the year ending 2008 was $6,100 and $40,466, respectively, and there was a trade accounts receivable balance of $ 0 and $3,021 at March 31, 2009 and December 31, 2008, respectively.

F-35

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7: EARNINGS (LOSS) PER SHARE

The following table provides a reconciliation of the numerators and denominators reflected in the basic and diluted earnings per share computations, as required by SFAS 128, “Earnings Per Share“(“EPS”).

Basic EPS is computed by dividing reported earnings available to stockholders by the weighted average shares outstanding. Diluted EPS also includes the effect of dilutive potential common shares. The Company had net losses for the three months ended March 31, 2009 and 2008 and the effect of including dilutive securities in the earnings per common share would have been anti-dilutive. Accordingly, all options to purchase common shares were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2009 and 2008.

	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		-			-

NOTE 8: COMMON STOCK

The Company issued 85,000 shares of common stock for $1 per share in the quarter ended March 31, 2009 under a private placement memorandum.

NOTE 9: SUBSEQUENT EVENTS

The Company issued 30,000 shares of common stock for $1 per share in April 2009 and an additional 25,000 shares of common stock for $1 per share in June 2009.

F-36

Report of Independent Registered Public Accounting Firm

To the Directors and Stockholders

Charmed Homes Inc.

(A Development Stage Company)

We have audited the accompanying consolidated balance sheets of Charmed Homes Inc. (A Development Stage Company) as of January 31, 2009 and 2008, and the related consolidated statements of operations, cash flows and stockholders' equity for the years then ended and accumulated for the period from June 27, 2006 (Date of Inception) to January 31, 2009. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Charmed Homes Inc. (A Development Stage Company) as of January 31, 2009 and 2008, and the results of its operations, cash flows and stockholders’ equity for the years then ended and accumulated for the period from June 27, 2006 (Date of Inception) to January 31, 2009 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred operating losses since inception. This factor raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

April 14, 2009

F-37

Charmed Homes Inc.

(A Development Stage Company)

Consolidated Balance Sheets

(Expressed in US dollars)

	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

(The accompanying notes are an integral part of these consolidated financial statements)

F-38

Charmed Homes Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(Expressed in US dollars)

	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

(The accompanying notes are an integral part of these consolidated financial statements)

F-39

Charmed Homes Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Expressed in US dollars)

	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		–			–			–

(The accompanying notes are an integral part of these consolidated financial statements)

F-40

Charmed Homes Inc.

(A Development Stage Company)

Consolidated Statement of Stockholders’ Equity

For the Period from June 27, 2006 (Date of Inception) to January 31, 2009

(Expressed in US dollars)

	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

(The accompanying notes are an integral part of these consolidated financial statements)

F-41

Charmed Homes Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

January 31, 2009

(Expressed in US dollars)

1.	Nature of Operations and Continuance of Business

Charmed Homes Inc. (the “Company”) was incorporated in the State of Nevada on June 27, 2006. The Company is a Development Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No.7, “Accounting and Reporting by Development Stage Enterprises”. The Company’s principal business is the sale of constructed or purchased homes.

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated revenues of $505,665 since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at January 31, 2009, the Company has accumulated losses of $105,956. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.	Summary of Significant Accounting Policies

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, are expressed in US dollars and include the accounts of the Company and its wholly-owned subsidiary, Charmed Homes Subsidiary, Inc., which was incorporated on November 26, 2008. All intercompany transactions and balances have been eliminated upon consolidation. The Company’s fiscal year-end is January 31.

Use of Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to donated expenses, valuation of inventory and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

F-42

Earnings Per Share

The Company computes earnings (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

Comprehensive Loss

SFAS No. 130, “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at January 31, 2009 and 2008, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Inventory

Inventory consists of real estate purchased for resale and is valued at the lower of cost and net realizable value. Cost is determined using the specific identification method.

Financial Instruments

Financial instruments, which include cash and accounts payable, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company’s operations are in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with SFAS No. 109, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

F-43

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Significant transactions may occur in Canadian dollars and management has adopted SFAS No. 52, “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

Revenue Recognition

The Company recognizes revenue in accordance with SFAS No. 66, ”Accounting for Sales of Real Estate”. The sale of constructed or purchased houses will be recognized in full once the real estate property has been sold, the profit is determinable, collectibility of the sales price is reasonably assured, and the earnings process is virtually complete whereas the Company is no longer further obligated to perform significant activities after the sale to earn the profit.

Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of non-governmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

F-44

In December 2007, the FASB issued No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No.51”. SFAS No. 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS No. 160 also requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS No. 160 also requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary. SFAS No. 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”. This statement replaces SFAS No. 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS No. 141 (revised 2007) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS No. 141 (revised 2007) also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

Recent Adopted Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. In October 2008, the FASB issued FSP 157-3 “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active” (“FSP 157-3”). FSP 157-3 clarifies the application of SFAS No. 157 in a market that is not active, and provides guidance on the key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. Effective February 1, 2008, the Company adopted the measurement and disclosure requirements related to financial assets and financial liabilities. The adoption of SFAS 157 for financial assets and financial liabilities did not have a material impact on the Company’s results of operations or the fair values of its financial assets and liabilities.

FASB Staff Position 157-2, “Effective Date of FASB Statement No. 157,” (“FSP 157-2”) delayed the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until the beginning of fiscal 2010. The Company is currently assessing the impact that the application of SFAS 157 to nonfinancial assets and liabilities will have on its results of operations and financial position.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115” (“SFAS 159”). Under SFAS 159, a company may choose, at specified election dates, to measure eligible items at fair value and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Effective February 1, 2008, the Company adopted SFAS 159, but the Company has not elected the fair value option for any eligible financial instruments as of January 31, 2009.

F-45

Inventory

	January 31, 2009 $		January 31, 2008 $
Land		–		153,653
Building		–		311,844
Other		–		24,347

		–		489,844

4.	Related Party Transactions

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.

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

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.

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

The Company is subject to United States income taxes at a rate of 35%. The reconciliation of the provision for income taxes at the United States statutory rate compared to the Company’s income tax expense as reported is as follows:

	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		–			–

F-46

The significant components of net deferred tax assets at January 31, 2009 and 2008 are as follows:

	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		–			–

The Company has incurred net operating losses of $90,456 which, if unutilized, will expire as follows:

	Amount
Year Incurred	$		Year of Expiry
2007		15,386		2027
2008		44,569	2028
2009		30,501	2029
		90,456

7.	Subsequent Event

On January 8, 2009, the Company entered into a merger agreement (the “Agreement”) with IntelaSight, Inc. (“IntelaSight”). Under the Agreement, the Company will engage in a 1 for 2 reverse stock split and IntelaSight’s stock and derivative securities will be exchanged for stock and derivative securities of the Company at a ratio of one share of the Company’s common stock for one share of IntelaSight. IntelaSight will merge with the Company’s subsidiary, Charmed Homes Subsidiary, Inc. The Agreement is subject to the satisfaction of closing conditions and shareholder approval.

F-47

Charmed Homes Inc.

(A Development Stage Company)

April 30, 2009

	Index

Balance Sheets	F-49

Statements of Operations	F-50

Statements of Cash Flows	F-51

Notes to the Financial Statements	F-52

F-48

Charmed Homes Inc.

(A Development Stage Company)

Consolidated Balance Sheets

(Expressed in US dollars)

(unaudited)

	(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

(The accompanying notes are an integral part of these financial statements.)

F-49

Charmed Homes Inc.

(A Development Stage Company)

Consolidated Statements of Operations

(Expressed in US dollars)

(unaudited)

	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

(The accompanying notes are an integral part of these financial statements.)

F-50

Charmed Homes Inc.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Expressed in US dollars)

(unaudited)

	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		–			–			–

(The accompanying notes are an integral part of these financial statements.)

F-51

Charmed Homes Inc.

(A Development Stage Company)

Notes to the Consolidated Financial Statements

April 30, 2009

(Expressed in US dollars)

(unaudited)

1.	Nature of Operations and Continuance of Business

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has generated revenues of $505,665 since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at April 30, 2009, the Company has accumulated losses of $121,312. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.	Summary of Significant Accounting Policies

Basis of Presentation

Interim Financial Statements

These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

F-52

2.	Summary of Significant Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to donated expenses and deferred income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Earnings Per Share

Comprehensive Loss

SFAS No. 130, “Reporting Comprehensive Income,” establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at April 30, 2009 and 2008, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

F-53

2.	Summary of Significant Accounting Policies (continued)

Inventory

Inventory consists of real estate purchased for resale and is valued at the lower of cost and net realizable value. Cost is determined using the specific identification method.

Financial Instruments

Financial instruments, which include cash, accounts payable and accrued liabilities, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company’s operations are in Canada, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with SFAS No. 109, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduced deferred tax assets to the amount that is believed more likely than not to be realized.

Foreign Currency Translation

F-54

2.	Summary of Significant Accounting Policies (continued)

Revenue Recognition

Recent Accounting Pronouncements

In May 2009, the FASB issued SFAS No. 165 “Subsequent Events”. SFAS No. 165 provides general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued or available to be issued. The statement sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements. The statement also sets forth the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements. Furthermore, this statement identifies the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. It is effective for interim or annual financial periods ending after June 15, 2009. Management is currently evaluating the impact of this statement.

In April 2009, the FASB issued SFAS No. 164, “Not-for-Profit Entities: Mergers and Acquisitions”. SFAS No. 164 provides guidance on accounting for a combination of not-for-profit entities, which is a transaction or other event that results in a not-for-profit entity initially recognizing another not-for-profit entity, a business, or a non-profit activity in its financial statements. It is effective for financial statements issued for fiscal years beginning after December 15, 2009. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of non-governmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.

F-55

2.	Summary of Significant Accounting Policies (continued)

Recently Adopted Accounting Pronouncements

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. Effective February 1, 2009, the Company adopted SFAS No. 161. The adoption of SFAS No. 161 did not have a material effect on the Company’s financial statements.

In December 2007, the FASB issued No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No.51”. SFAS No. 160 requires consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated statement of income, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS No. 160 also requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. SFAS No. 160 also requires expanded disclosures in the consolidated financial statements that clearly identify and distinguish between the interests of the parent’s owners and the interests of the noncontrolling owners of a subsidiary. Effective February 1, 2009, the Company adopted SFAS No. 160. The adoption of SFAS No. 160 did not have a material effect on the Company’s financial statements.

F-56

2.	Summary of Significant Accounting Policies (continued)

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”. This statement replaces SFAS No. 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS No. 141 (revised 2007) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS No. 141 (revised 2007) also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. Effective February 1, 2009, the Company adopted SFAS No. 141. The adoption of SFAS No. 141 did not have a material effect on the Company’s financial statements.

3.	Related Party Transactions

Commencing July 1, 2006, the President of the Company provided management services and office space to the Company with a fair value of $300 and $200 per month, respectively. During the three months ended April 30, 2009, the Company recorded donated services of $900 (2008 - $900) and donated rent of $600 (2008 - $600).

4.	Commitment

F-57

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers

Charmed Homes Inc.

Set forth below is a description of certain provisions of the articles of incorporation of Charmed Homes Inc. ("Charmed"), the bylaws of Charmed, and the Nevada Business Corporation Act. This description is intended as a summary only and is qualified in its entirety by reference to the Charmed articles of incorporation, the Charmed bylaws, and Nevada law.

Under our articles of incorporation and bylaws, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest. We may advance expenses incurred in defending a proceeding. To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Nevada law provides that a director is not individually liable to the corporation or its shareholders or creditors for any damages as a result of any act or failure to act in such director's capacity as a director unless it is proven that:

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.

The Charmed articles of incorporation provide that, to the extent permitted by Nevada law, a Charmed director will not be personally liable for monetary damages to the corporation or its shareholders for breach of his or her fiduciary duty as a director, except for liability under the above-listed exception.

Nevada law does not permit a corporation to indemnify directors against judgments in actions brought by or in the right of the corporation in which the director was adjudged liable to the corporation and extends this limitation to indemnification of officers. However, Nevada law does permit indemnification for reasonable expenses in these situations if the indemnification is ordered by a court.

Under Nevada law, directors and officers as well as other individuals may be indemnified against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation as a derivative action) if they acted in a manner they reasonably believed to be in, or not opposed to, the best interest of the corporation, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful. In addition, Nevada law permits the corporation to advance expenses upon a written undertaking for their repayment if the person receiving the advance is not ultimately entitled to indemnification. Nevada law specifies that the statutory provisions are not exclusive of other rights to indemnification or advancement of expenses that may be provided by bylaws, agreements, votes of shareholders or disinterested directors, or otherwise.

The Charmed articles of incorporation provide to directors and officers indemnification to the full extent provided by law; therefore, Charmed directors and officers will have all the protections available to directors and officers of Nevada corporations. The articles of incorporation also provide that the corporation may enter into specific agreements with individual officers or directors for greater or different indemnification.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

IntelaSight, Inc.

Set forth below is a description of certain provisions of the articles of incorporation of IntelaSight, Inc. ("Iveda"), the bylaws of Iveda, and the Washington Business Corporation Act. This description is intended as a summary only and is qualified in its entirety by reference to the Iveda articles of incorporation, the Iveda bylaws, and Washington law.

The Company's articles of incorporation provide to directors and officers indemnification to the full extent provided by law, and provide that, to the extent permitted by Washington law, a director will not be personally liable for monetary damages to the Company or its shareholders for breach of his or her fiduciary duty as a director, except for liability for certain actions that may not be limited under Washington law.

The Iveda articles of incorporation eliminate the liability of Iveda directors to Iveda or its shareholders for monetary damages for conduct as a director to the fullest extent permissible under the Washington Business Corporation Act.

According to Section 23B.08.320 of the Act, a director's liability cannot be eliminated or limited for:

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.

According to Section 23B.08.510 of the Washington Business Corporation Act, a Washington corporation such as Iveda may indemnify an individual made a party to a proceeding because the individual is or was a director against liability incurred in the proceeding if the individual acted in good faith and reasonably believed the conduct was in the corporation's best interests (or not opposed to its best interests for conduct not in an official capacity) and not criminally unlawful. This includes service with respect to an employee benefit plan. A corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation; or in connection with any other proceeding charging improper personal benefit to the director, in which the director was adjudged liable on the basis that personal benefit was improperly received. Section 23B.08.520 states that unless limited by its articles of incorporation, a corporation shall indemnify a director who was wholly successful, on the merits or otherwise, in the defense of any proceeding to which the director was a party because of being a director of the corporation against the reasonable expenses incurred by the director as a result.

The Washington Business Corporation Act permits an advancement of expenses to a director indemnitee if the director submits a written affirmation of his or her good faith belief in meeting the appropriate level of conduct and promises to repay the advance if it is ultimately determined that the director did not meet the standard of conduct.

A director who is a party to a proceeding may apply for indemnification or advance of expenses to the court conducting the proceeding or to another court of competent jurisdiction.

According to Section 23B.08.570 of the Washington Business Corporation Act, Iveda may indemnify its officers, employees, and agents to the same extent as the Iveda directors. Any corporate indemnification or advancement of expenses must be reported to shareholders before the next shareholders' meeting.

The Iveda articles of incorporation provide that Iveda shall indemnify any person who was or is a party to any suit or proceeding by reason of the fact that he is or was a director, trustee, officer, employee or agent of the corporation, and their heirs, spouses, executors, and administrators, against costs, expenses (including attorneys' fees), judgments, liabilities, and amounts paid in settlement. The indemnification applies in connection with any action, suit, or proceeding, civil, criminal, administrative, or investigative, if he or she acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation. As required by Washington law, the termination of any action, suit, or proceeding by judgment, order, settlement, or conviction or upon a plea of nolo contendere or its equivalent shall not create a presumption that the person did not act in good faith or opposed to or not in the best interests of Iveda with respect to a criminal proceeding, had cause to believe the conduct was unlawful. The articles expressly state that the provided indemnification shall not be deemed exclusive of any other rights to which those indemnified may be entitled.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.

Item 21. Exhibits and Financial Statement Schedules

a. Exhibits.

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

Item 22. Undertakings.

(1) The undersigned registrant hereby undertakes:

(a) To file, during any period in which offers or sales are being made, a post effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(b) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bonafide offering thereof.

(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(2) The undersigned registrant hereby undertakes that each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(3) The undersigned registrant hereby undertakes that, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

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.

(4) The undersigned registrant hereby undertakes that , for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

( 5 ) The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

( 6 ) The registrant undertakes that every prospectus (a) that is filed pursuant to paragraph (3) immediately preceding, or (b) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

( 7 ) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

( 8 ) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

( 9 ) The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Calgary, Province of Alberta, on July 10, 2009.

Charmed Homes Inc.
(Registrant)

By:	/s/	Ian Quinn
Name:		Ian Quinn
Title:		President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director

Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

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 INDEX

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

100

***		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

101

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

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.


Ian Quinn President and CEO of Charmed Homes Inc.		David Ly President and CEO of IntelaSight, Inc.

		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

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

	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

Notes to the Unaudited Pro Forma Condensed Consolidated																Book Value
																$	(0.02	)

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)

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

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)

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

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

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

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	%

Grant Number:	____________________

Date of Option Grant:	____________________ , 200_

Initial Vesting Date :	____________________

Number of Option Shares:	_____________

Exercise Price:	$___________________

Option Expiration Date:	The date ten (10) years after the Date of Option Grant.

Tax Status of Option:	Nonstatutory

	Vested Ratio
Prior to Initial Vesting Date	0

On Initial Vesting Date, provided the Optionee’s Service has not terminated prior to such date	1/4

Plus :

For each full year of the Optionee’s continuous Service from Initial Vesting Date until the Vested Ratio equals 1/1, an additional	1/4

INTELASIGHT, Inc.		OPTIONEE

By:
	David Ly, President	( signature )

		Address:



		Email address:

Total Shares Purchased:

Total Exercise Price (Total Shares X Price per Share)		$

Ô Cash:		$

Ô Check:		$

Ô Tender of Company Stock:		Contact Plan Administrator

	IntelaSight, Inc ., a Washington corporation


	By:
		David Ly, CEO

Deliver certificates to:


Dated:
			(Signature of Registered Owner)

			(Street Address)

			(City) (State) (Zip Code)