Charmed Homes Inc. (Form: S-4/A, Received: 08/05/2009 15:12:46)

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Charmed securities to be issued in connection with the merger or determined whether this joint information statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This joint information statement/prospectus is dated ___________, 2009, and is first being mailed to shareholders of each of Charmed and Iveda on or about ___________, 2009.

The information in this joint information statement/prospectus is not complete and may be changed. Charmed may not sell these securities until the registration statement filed with the United States Securities and Exchange Commission is effective. This joint information statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

ADDITIONAL INFORMATION

Charmed has filed a registration statement on Form S-4 to register with the Securities and Exchange Commission up to 9,036,800 shares of its common stock, options to purchase up to 1,195,229 shares of its common stock, warrants to purchase up to 559,278 shares of its common stock, and up to 1,754,507 shares of its common stock issuable upon exercise of options and warrants. This document is a part of that registration statement. As permitted by Securities and Exchange Commission rules, this document does not contain all of the information included in the registration statement or in the exhibits or schedules to the registration statement. You may read and copy these documents at the SEC’s public reference facilities. Please call the SEC at 1-800-SEC-0330 for information about these facilities. Statements contained in this document as to the contents of any contract or other document referred to in this document are not necessarily complete. In each case, you should refer to the copy of the applicable contract or other document filed as an exhibit to the registration statement. This information is also available at the Internet site the SEC maintains at http://www.sec.gov. See “Where You Can Find More Information.”

Charmed will provide you with copies of these documents, without charge, upon written or oral request to:

Charmed Homes Inc.

60 Mt. Kidd Point SE

Calgary, Alberta T2Z 3C5

Canada

Attention: Ian Quinn, CEO

(403) 831-2202

In order for you to receive timely delivery of the documents in advance of the closing of the merger, Charmed should receive your request no later than ___________, 2009.

IntelaSight, Inc. is a private company and is not subject to the reporting requirements of the Securities Exchange Act of 1934. Accordingly, there are no filings of Iveda available through the SEC.

Charmed has supplied all information contained in this joint information statement/prospectus relating to Charmed, and Iveda has supplied all information contained in this joint information statement/prospectus relating to Iveda.

Charmed Homes Inc.

60 Mt. Kidd Point SE

Calgary, Alberta T2Z 3C5

Canada

NOTICE OF CONSENT IN LIEU OF A SPECIAL MEETING OF SHAREHOLDERS

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

IntelaSight, Inc.

dba Iveda Solutions

1201 South Alma School Road, Suite 4450

Mesa, Arizona 85201

NOTICE OF CONSENT IN LIEU OF A SPECIAL MEETING OF SHAREHOLDERS

Action Taken:		Holders of a majority of the outstanding Iveda common stock have approved and adopted the Merger Agreement among Charmed Homes Inc., Charmed Homes Subsidiary, Inc., certain shareholders of Charmed Homes Inc., and IntelaSight, Inc., and have approved the merger contemplated by the Merger Agreement by written consent in lieu of a special meeting of the shareholders. The written consent was dated January 8, 2009.

Record Date:		The record date for the consent in lieu of special meeting and for determining shareholders eligible to receive this Notice was the close of business on January 8, 2009.

Dissenters Rights		Each holder of Iveda shares has the right to dissent from the proposed merger and to demand payment of the fair value of his or her shares in the event the merger is completed. To preserve the right to exercise these dissenters rights, a holder of Iveda shares must not have voted his or her shares in favor of the merger agreement and the merger through the written consent, and also must deliver to Iveda, before ________, 2009, a written notice to demand payment for his or her shares in the manner provided under the Washington Business Corporation Act (a copy of the relevant portions of which is attached as Annex B to the accompanying joint information statement/prospectus). To preserve the right to exercise dissenters rights, a holder of Iveda shares must also otherwise comply with all requirements of Washington law. These dissenter's rights are more fully explained under "The Merger – Dissenters Rights" in the accompanying joint information statement/prospectus. If 1% or more of the outstanding shares of Iveda common stock dissent, then the merger may not be consummated in the discretion of the Iveda Board of Directors.

		By Order of the Board of Directors,


_________, 2009		David Ly, CEO
Mesa, Arizona

TABLE OF CONTENTS

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
COMPARATIVE HISTORICAL AND PRO FORMA PER SHARE DATA		16
SECURITIES OWNERSHIP PRE- AND POST-MERGER		17
STOCK PRICE AND DIVIDEND INFORMATION		18
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION		19
RISK FACTORS		20
Risk Factors Involving Iveda		20
The Audit Report On Iveda's Financial Statements Contains A Going Concern Opinion.		20
Iveda Is An Emerging Growth Company.		20
Iveda's Ability To Grow Is Dependent Upon The Success Of Iveda's Current And Future Operations And Iveda's Ability To Obtain Additional Financing.		20
Iveda Depends On Certain Key Personnel.		20
Rapid Growth May Strain Iveda's Resources.		21
Demand For Iveda's Security And Surveillance Products And Services May Be Lower Than Iveda Anticipates.		21
Iveda Believes Industry Trends Support Its Open Source Systems, But If Trends Reverse, Iveda May Experience Decreased Demand.		22
Future Loan Agreements With Lenders May Hinder Iveda's Ability To Operate The Business By Imposing Restrictive Loan Covenants.		22
Risks Associated with the Surveillance and Remote Security Industry		22
Iveda Depends On Third Party Manufacturers And Suppliers For The Products It Sells.		23
Iveda Operates In A Highly-Competitive Industry And its Failure To Compete Effectively May Adversely Affect Its Ability To Generate Revenue.		23
Future Legislation Or Governmental Regulations Or Policies Could Have A Significant Impact On Iveda's Operations.		24

Regulation Of The Telecommunications Industry And The Internet May Impact Iveda's Operations		24
The Failure Of Iveda's Systems Could Result In A Material Adverse Effect.		24
If Iveda's Security Measures Are Breached And Unauthorized Access Is Obtained, Existing And Potential Customers Might Not Perceive Iveda's Services As Being Secure And Might Terminate Or Fail To Purchase Iveda's Services.		25
The Timing Of Iveda's Revenues Can Vary Depending On How Long Customers Take To Evaluate Iveda's Services.		25
Iveda Will Rely On Both Iveda's Internal Sales Force And Resellers To Distribute Iveda's Security Products And Services To Customers.		25
Government Contracts Generally Contain Rights And Remedies Which Could Reduce The Value Of Such Contracts, Or Result In Losses.		26
There Is A Shortage Of Qualified Electricians. Since The Majority Of Iveda's Work Is Performed By Electricians, This Shortage May Negatively Impact Iveda's Business, Including Its Ability To Grow.		26
The Estimates Iveda Uses In Placing Bids Could Be Materially Incorrect, Resulting In Possible Losses.		26
Risks Related to Iveda's Intellectual Property		27
Iveda Depends On its Intellectual Property.		27
Iveda Could Incur Substantial Costs Defending its Intellectual Property From Infringement By Others.		27
Iveda Could Incur Substantial Costs Defending Against Claims That Its Products Infringe On The Proprietary Rights Of Others.		27
Risk Factors Involving Charmed Stock and the Merger		28
Charmed Shares Are "Penny Stock".		28
Iveda Shareholders Will Experience Dilution As Part Of The Merger.		28
There Will Be A Limited Market For Charmed Common Stock Following The Merger.		28
Post-Merger Reporting Obligations as a Public Company Will Be Costly.		28
Once The Merger Closes, Iveda Will Have Limited Ability to Unwind the Merger.		29
THE MERGER		30
General Terms of the Transaction; The Merger Agreement		30
Background and Reasons for the Offer and Subsequent Merger		30
Representations and Warranties		32
Conduct of Iveda's Business Before Completion of the Merger		34
Conduct of Charmed's Business Before Completion of the Merger		34
Summary of Principal Conditions to Completing the Merger		34
Indemnification of Iveda and its Directors and Officers		35
Termination of the Merger Agreement		35
Effect of Termination of the Merger Agreement		36
Directors and Executive Officers of Charmed Following the Merger		36
Securities and Employment Agreements to be Received in the Merger		36
Federal Income Tax Considerations		37
Accounting Treatment of the Merger		37
Regulatory Requirements		37
Appraisal Rights for Charmed Shareholders		37
Dissenters Rights as to Iveda Shares		37
The Merger Agreement		38
OTHER ACTIONS APPROVED BY THE CHARMED SHAREHOLDERS		39
Approval of the Amendment to the Articles of Incorporation		39
Description of the Amended Articles and Reasons for the Amendment		39
Vote Required		40
Effective Date		40
Dissenters Rights of Appraisal		40

Approval of the Reverse Stock Split		40
General		40
Purpose of the Reverse Split		40
Principal Effects of the Reverse Split		41
Procedure for Effecting Exchange of Stock Certificates		43
No Appraisal Rights		43
United States Federal Income Tax Consequences		43
Vote Required		44
Effective Date		44
Costs		44
Record Date		45
Outstanding Shares and Voting Rights		45
Material Terms of the Common Stock		45
ACTION BY WRITTEN CONSENT IN LIEU OF SPECIAL MEETING OF THE CHARMED SHAREHOLDERS		46
Items of Business		46
Recommendation of the Charmed Board of Directors		46
Method of Voting; Record Date; Stock Entitled to Receive Notice		46
Required Vote		46
Share Ownership of Charmed Directors and Executive Officers		46
Contact for Questions		46
CONSENT IN LIEU OF SPECIAL MEETING OF IVEDA SHAREHOLDERS		47
Items of Business		47
Recommendation of the Iveda Board of Directors		47
Method of Voting; Record Date; Stock Entitled to Receive Notice		47
Required Vote		47
Share Ownership of Iveda Directors and Executive Officers		47
Contact for Questions		47
INFORMATION ABOUT CHARMED		48
Description of Business		48
Description of Property		48
Legal Proceedings		48
Market Price of and Dividends on the Registrant's Common Equity and Related Shareholder Matters		48
Securities Authorized For Issuance Under Equity Compensation Plans		48
Selected Financial Information		48
Supplementary Financial Information		48
Management's Discussion and Analysis of Financial Condition and Results of Operations		48
Operations to Date		49
Future Operations		50
Limited Operating History; Need For Additional Capital		50
Results of Operations		50
Liquidity and capital resources		50
Recent Accounting Pronouncements		51
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		52
Quantitative and Qualitative Disclosures About Market Risk		52
Disclosure of Commission Position on Indemnification for Securities Act Liabilities		52
Management of Charmed		52
Management Contracts		53
Executive Compensation		53
Security Ownership of Directors, Officers and Certain Beneficial Owners of Charmed		53
Certain Relationships and Related Transactions of Charmed		53
INFORMATION ABOUT IVEDA		54

iii

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

QUESTIONS AND ANSWERS ABOUT THE MERGER, NAME CHANGE AND REVERSE SPLIT

General Questions and Answers

Q:	Why am I receiving this joint information statement/prospectus?

IntelaSight, Inc., doing business as Iveda Solutions ("Iveda") and Charmed Homes Inc. ("Charmed") have agreed to combine their companies under the terms of a merger agreement (the "Merger Agreement") that is described in this information statement/prospectus (the "information statement/prospectus"). A copy of the Merger Agreement is attached to this information statement/prospectus as Annex A . The most material terms of the proposed merger (the "Merger") are as follows:

Iveda provides remote video monitoring services and currently has clients in Arizona, California, and Minnesota. Charmed previously developed a single residential property in Calgary, Alberta, Canada, which was sold in the summer of 2008. See "Summary of the Terms of the Merger - Parties to the Merger" on page 5 and "Information About Iveda" on page 54 below.

Charmed Homes Subsidiary, Inc. (the "Merger Sub"), a wholly-owned subsidiary of Charmed formed specifically to engage in the Merger, will merge with and into Iveda, resulting in Iveda becoming a wholly-owned subsidiary of the Company. See "The Merger – General Terms of the Transaction" on page 30 below.

The former shareholders of Iveda will receive a number of shares of Charmed's common stock such that they will own not less than 90% of Charmed's common stock post-Merger. The former option and warrant holders of Iveda will also receive replacement options and warrants to purchase 1,754,507 shares of Charmed's common stock with substantially equivalent value to Iveda's outstanding options and warrants. See "The Merger – General Terms of the Transaction" on page 30 below.

The consummation of the Merger is subject to: (i) Iveda shareholder approval of the transactions contemplated by the Merger Agreement (already obtained by written consent), with the number of dissenting shares not exceeding 1% of Iveda's outstanding stock; (ii) Charmed shareholder approval of a reverse split and an amendment to the Company's articles of incorporation to change the Company's name to "Iveda Corporation" (already obtained by written consent); (iii) the sale by Ian Quinn and Kevin Liggins of 5 million pre-reverse split shares of Charmed's common stock to Iveda for cash consideration of $200,000; (iv) the adoption by Charmed's Board of a stock option plan substantially similar to Iveda's existing stock option plan and the authorization by Charmed's Board of warrants to purchase Charmed stock with substantially similar terms as the Iveda warrants. See "The Merger – Summary of Principal Conditions to Completing the Merger" on page 34 below.

The Merger Agreement contains representations and warranties made by Iveda, Charmed, the Merger Sub, and Ian Quinn and Kevin Liggins, Charmed's principal shareholders. Iveda, Charmed and the Merger Sub also made certain covenants relating to the conduct of their respective businesses between the time the Merger Agreement was signed and the closing of the Merger, including providing the other parties with access to their records. See "The Merger – Representations and Warranties" on page 32, "The Merger – Conduct of Iveda's Business Before Completion of the Merger" on page 34, and "The Merger – Conduct of Charmed's Business Before Completion of the Merger" on page 34 below.

The Board of Directors of Charmed following the Merger will consist of four directors selected by Iveda. The officers of Charmed following the Merger will also be selected by Iveda. See "The Merger – Directors and Executive Officers of Charmed Following the Merger" on page 36 below.

Q:	Why are Charmed and Iveda proposing the Merger? (see page 30)

Iveda's management believes that the liquidity offered by a public company such as Charmed will provide an attractive opportunity for investors who would not be willing to invest in Iveda if it were to remain a private company. Given Iveda's projected capital needs in the near future as it commences full-scale marketing of its products and services, it is critical that Iveda be made as attractive to potential investors as possible, and Iveda's management believes the proposed Merger will accomplish this.

Charmed's management believes that the Merger can provide Charmed's shareholders with a possible way to recover a portion of their equity investment in Charmed now that Charmed has discontinued its homebuilding operations in Canada. Charmed presently has no operations.

Q:	What benefits will principal shareholders, directors and officers, and affiliates receive as a result of the Merger?

Iveda's principal shareholders, directors, and officers, and their affiliates, will generally not receive any special benefits as a result of the Merger. These individuals will receive shares in Charmed to the extent they hold securities that are subject to conversion upon completion of the Merger at the same conversion rate as other security holders. David Ly, Iveda's CEO, Bob Brilon, Iveda's CFO, and Luz Berg, Iveda's Senior VP of Operations & Marketing, will enter into new employment agreements with Charmed upon the closing of the Merger, but these new agreements will contain substantially similar terms to Mr. Ly, Mr. Brilon and Ms. Berg's current employment agreements with the Company.

Charmed's principal shareholders, directors and officers – Ian Quinn and Kevin Liggins – will sell 5 million pre-reverse split Charmed common shares to Iveda for consideration of $200,000 in cash payable in part at the closing of the Merger and in part following the closing of the Merger. This sale will result in Ian Quinn and Kevin Liggins not owning any shares of Charmed stock following the Merger.

Q:	When do Iveda and Charmed expect to complete the Merger?

Iveda and Charmed expect to complete the Merger after the 20 day waiting period required under Washington law has elapsed. This waiting period will begin on the date on which this information statement/prospectus is mailed to all Iveda shareholders to notify them of the execution of the written consent to approve the Merger. The name change and reverse split, which must occur prior to or concurrent with the Merger closing, cannot take effect until at least 20 days have elapsed from the date on which this information statement/prospectus has been mailed to all Charmed shareholders.

Q:	Has the Board of Directors of Iveda recommended approval of the Merger? (see page 47)

A:	The Iveda Board of Directors has unanimously recommended that Iveda shareholders vote "FOR" the proposal to approve and adopt the Merger Agreement and approve the Merger.

Q:	Has the Board of Directors of Charmed recommended approval of the name change and reverse split and approved the Merger? (see page 46)

A:	The Charmed Board of Directors has unanimously approved the Merger and recommended that Charmed shareholders vote "FOR" the proposal to approve the name change and approve the reverse split.

Q:	What should I do now?

A:	Please review this information statement/prospectus carefully. No further action is required on your part unless you are an Iveda shareholder who elects to dissent from the Merger.

Questions and Answers for Charmed Shareholders

Q:	How was approval of the Merger, name change and reverse split obtained? (see page 39)

The Charmed Board of Directors approved the Merger on behalf of Charmed and Charmed's wholly-owned subsidiary, the Merger Sub. The Charmed Board of Directors decided to solicit consents in lieu of a special meeting of Charmed shareholders to approve the name change and reverse split, and on November 21, 2008, holders of 74.74% of the outstanding voting stock of Charmed signed a written consent to approve the name change and reverse split.

Q:	What was the record date for the written consent? (see page 46)

A:	The record date for the written consent was November 21, 2008, and each Charmed shareholder or joint holder as of the close of business on November 21, 2008 is entitled to receive a copy of this information statement/prospectus.

Q:	What was the vote of Charmed shareholders required to approve the name change and reverse split, and what approvals were required to approve the Merger? (see page 46)

Approval and adoption of the name change and reverse split required the affirmative vote of the holders of a majority of the shares of Charmed common stock outstanding as of the record date for the written consent. No approval of the Charmed shareholders was required for the Merger and the Merger Agreement – the Charmed Board of Directors approved the Merger and approved and adopted the Merger Agreement for Charmed and the Merger Sub.

Q:	As a Charmed shareholder, what happens if I dissent from the transaction? (see page 37)

A:	Nevada law does not provide dissenters rights to Charmed shareholders with respect to approval of the Merger, the name change or the reverse split.

Q:	As a Charmed shareholder, who can help answer my questions?

A:	If you have any questions about the Merger, you should contact:

Ian Quinn, CEO

c/o Charmed Homes Inc.

60 Mt. Kidd Point SE

Calgary, Alberta T2Z 3C5

Telephone: (403) 831-2202

If you need additional copies of this information statement/prospectus, you should contact Ian Quinn as described above.

Questions and Answers for Iveda Shareholders

Q:	How was approval of the Merger obtained? (see page 47)

A:	The Iveda Board of Directors decided to solicit consents in lieu of a special meeting of Iveda shareholders, and on January 8, 2009, holders of 64.87% of the outstanding voting stock of Iveda signed a written consent to approve the Merger.

Q:	What was the record date for the written consent? (see page 47)

A:	The record date for the written consent was January 8, 2009, and each Iveda shareholder or joint holder as of the close of business on January 8, 2009 is entitled to receive a copy of this information statement/prospectus.

Q:	What was the vote of Iveda shareholders required to approve and adopt the Merger Agreement and approve the Merger? (see page 47)

A:	Approval and adoption of the Merger Agreement required the affirmative vote of the holders of a majority of the shares of Iveda common stock outstanding as of the record date for the written consent.

Q:	As an Iveda shareholder, what happens if I dissent from the transaction? (see page 37)

A:	If you dissent, you will be paid fair market value for your shares under Washington law, but only if you follow the procedures outlined on page 37.

Q:	As an Iveda shareholder, what will I receive upon completion of the Merger? (see page 30)

Upon completion of the Merger, holders of Iveda common stock will be entitled to receive one share of Charmed common stock for each share of Iveda common stock owned at the effective time of the Merger. Upon completion of the Merger, holders of options and warrants to purchase Iveda common stock will receive an option or warrant to purchase Charmed common stock in exchange for cancellation of their Iveda options/warrants at the same exchange ratio as the common shareholders.

Q:	What are the material federal income tax consequences of the Merger to me? (see page 37)

The Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, which is referred to in this information statement/prospectus as the Code. For U.S. federal income tax purposes, shareholders of Iveda whose shares of Iveda stock are exchanged in the Merger for shares of Charmed stock will not recognize gain or loss. See the section entitled "The Merger—Federal Income Tax Considerations" beginning on page 37.

Q:	As an Iveda shareholder, will I be able to trade the Charmed common stock that I receive in connection with the Merger?

The shares of Charmed common stock issued in connection with the Merger will be freely tradable. Generally, persons who are deemed to be affiliates of Iveda must comply with Rule 144 under the Securities Act of 1933 if they wish to sell or otherwise transfer any of the shares of Charmed common stock received in connection with the Merger. You will be notified if you are an affiliate of Iveda.

Q:	Should I send in my share certificates at this time?

Do not send in your certificates at this time. Promptly following completion of the Merger, Securities Transfer Corporation, Charmed's transfer agent and the exchange agent for the Merger, will send you written instructions for exchanging your Iveda share certificates for Charmed stock certificates.

Q:	As an Iveda shareholder, who can help answer my questions?

A:	If you have any questions about the Merger, you should contact:

Bob Brilon, Chief Financial Officer

c/o IntelaSight, Inc.

1201 South Alma School Road, Suite 4450

Mesa, AZ 85201

Telephone: (480) 307-8700

Email: bbrilon@ivedasolutions.com

If you need additional copies of this information statement/prospectus, you should contact Luz Berg at (480) 307-8700 or send an e-mail to lberg@ivedasolutions.com .

SUMMARY

The following is a summary of the information contained in this information statement/prospectus. This summary may not contain all of the information about the Merger that is important to you. For a more complete description of the Merger, we encourage you to read carefully this entire information statement/prospectus, including the attached annexes. See also "Where You Can Find More Information" beginning on page 92 of this information statement/prospectus.

The Merger and the Merger Agreement (see page 30)

Iveda and Charmed have agreed to combine their companies under the terms of a Merger Agreement between the companies. A copy of the Merger Agreement is attached to this information statement/prospectus as Annex A . Under the terms of the Merger Agreement, the Merger Sub, a wholly-owned subsidiary of Charmed, will merge with and into Iveda, and Iveda will be the surviving entity and a wholly-owned subsidiary of Charmed. Upon completion of the Merger, holders of Iveda common stock will be entitled to receive one share of Charmed common stock for each share of Iveda common stock they hold at that time. Holders of options or warrants to purchase Iveda common stock will be issued an option or warrant to purchase one share of Charmed common stock in exchange for the cancellation of each option or warrant to purchase one share of Iveda common stock owned by the option and warrant holders.

Charmed shareholders will continue to own their existing shares of Charmed common stock after the Merger. It is a condition to the Merger that (i) Ian Quinn and Kevin Liggins, Charmed's major shareholders, officers and directors, sell 5,000,000 shares of their pre-reverse split Charmed common stock to Iveda, resulting in approximately 1,690,000 shares of common stock remaining outstanding; and (ii) Charmed complete a reverse stock split, which will result in every two shares of common stock being combined into one share of common stock, resulting in Charmed's shareholders owning approximately 845,000 shares of common stock of the post-Merger company. Charmed's common stock is listed solely on the Over-the-Counter Bulletin Board as of the date of this information statement/prospectus, a market with very limited liquidity and minimal listing standards. Charmed and its counsel have advised Iveda and its counsel that no vote of the Charmed shareholders is required to approve the Merger, but Charmed has already obtained the approval of its shareholders for the reverse stock split and name change (to “Iveda Corporation”) as described below beginning on page 39.

Parties to the Merger

IntelaSight, Inc. (see page 54)

IntelaSight, Inc. was incorporated in Washington in January 2005, and began operations at that time. It conducts business under the name Iveda Solutions. Its principal office is located at 1201 South Alma School Road, Suite 4450, Mesa, Arizona 85201 and its phone number is (480) 308-8700.

Iveda provides remote video surveillance services and currently has clients in Arizona, California and Minnesota. Iveda offers a proactive security solution using network cameras, a real-time Internet-based surveillance system, and a remote surveillance facility with trained intervention specialists. Based in Mesa, Arizona, Iveda's core monitoring service offers private and public entities what management believes to be a more affordable, reliable, and effective security solution than either security guards or closed circuit television ("CCTV") on-site monitoring. Iveda has provided security solutions to 42 customers, with over 263 cameras installed, 76 of which are being monitored and 8 hosted by Iveda in 18 properties, as of the date of this information statement/prospectus.

Iveda has recently opened its reseller distribution channel. Without active solicitation, Iveda signed eight active resellers and six independent agents in 2008. To date, Iveda has signed a total of fifteen resellers. These resellers and agents will assist Iveda in its marketing and customer service activities.

Management projects a 3-year window of opportunity to get a first mover's advantage in the real-time video surveillance market. Management believes that Iveda remains the only company providing real-time video surveillance in the United States as of the date of this information statement/prospectus. Integrators and central monitoring companies, Iveda's closest competitors, provide monitoring services based on electronic alarm triggers which generate a response time of often 6-10 minutes or more. Iveda's real-time monitoring provides immediate response capabilities. Iveda has already received local publicity for stopping crimes in progress. Since January 2005, Iveda has raised approximately $3.2 million, which has been used to initiate and fund operations. As Iveda has high fixed capital and operating costs that can be moderated only through increases in its customer monitoring services, Iveda needs to continue to raise capital to increase its marketing budget and obtain significant additional customers to offset its fixed costs.

Charmed Homes Inc. (see page 48)

Charmed previously engaged in the construction and marketing of custom homes in the Calgary area in Alberta, Canada. During 2008, Charmed completed construction of its first such home and sold this home. Due to downturns in the housing market in Calgary and a lack of available funding, Charmed decided to cease operations following the sale of this single home.

Charmed was organized under Nevada law in 2006, its executive offices are located at 60 Mt. Kidd Point SE, Calgary, Alberta, Canada T2Z 3C5 and its telephone number is (403) 831-2202. Charmed has no operations as of the date of this information statement/prospectus.

Charmed Homes Subsidiary, Inc.

Charmed Homes Subsidiary, Inc. is a newly-formed, wholly-owned subsidiary of Charmed. Charmed formed Charmed Homes Subsidiary, Inc. solely to effect the Merger, and Charmed Homes Subsidiary, Inc. has not conducted and will not conduct any business during any period of its existence. Its executive offices are located at 60 Mt. Kidd Point SE, Calgary, Alberta, Canada T2Z 3C5 and its telephone number is (403) 831-2202.

Risk Factors (see page 20)

The "Risk Factors" beginning on page 20 of this information statement/prospectus should be considered carefully by Iveda and Charmed shareholders. These risk factors should be considered along with any additional risk factors contained in the periodic reports of Charmed and filed with the Securities and Exchange Commission and the other information included in this information statement/prospectus.

Recommendation of the Iveda Board of Directors (see page 47)

After careful consideration, the Iveda Board of Directors unanimously 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. The Iveda Board of Directors recommended that Iveda shareholders vote "FOR" the proposal to approve and adopt the Merger Agreement and approve the Merger.

Recommendation of the Charmed Board of Directors (see page 46)

After careful consideration, the Charmed Board of Directors unanimously 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. The Charmed Board of Directors also recommended that Charmed shareholders vote "FOR" the name change and reverse split.

Share Ownership of Directors and Executive Officers of Charmed (see page 53)

At the close of business on the record date for the Charmed written consent, directors and executive officers of Charmed and their affiliates beneficially owned and were entitled to vote 74.74% of the 6,690,000 shares of Charmed common stock outstanding on that date.

Share Ownership of Directors and Executive Officers of Iveda (see page 80)

At the close of business on the record date for the Iveda written consent, directors and executive officers of Iveda and their affiliates beneficially owned and were entitled to vote 5,667,857 shares, or 63.9%, of the 8,869,304 shares of Iveda common stock outstanding on that date.

Directors and Executive Officers of Charmed Following the Merger (see page 36)

Following the Merger, the directors of Charmed will be David Ly (Chairman), Greg Omi, Jody Bisson and one additional director that will be appointed by Mr. Ly, Mr. Omi and Ms. Bisson. The executive officers will be David Ly, President and Chief Executive Officer, Bob Brilon, Treasurer and Chief Financial Officer, and Luz Berg, Secretary and Senior VP of Operations & Marketing.

What is Needed to Complete the Merger? (see page 34)

Several conditions must be satisfied or waived before we complete the Merger, including those summarized below:

the sale of 5 million pre-reverse split Charmed shares to Iveda by Ian Quinn and Kevin Liggins;

completion of a 1:2 reverse stock split by Charmed;

filing of all required tax returns by Charmed;

Charmed must have no liabilities and no assets (has been waived by Iveda);

adoption of a stock option plan by Charmed that is substantially similar to the existing Iveda option plan and authorization of warrants by Charmed with substantially similar terms to the existing Iveda warrants; and

Charmed and its officers and directors must be current on all required filings with the SEC.

Charmed and Iveda are Prohibited from Soliciting Other Offers

The Merger Agreement contains provisions that prohibit Iveda from taking any action to solicit, initiate or encourage any other person to acquire a controlling interest in Iveda or substantially all of its assets.

Charmed and Iveda May Terminate the Merger Agreement Under Specified Circumstances (see page 35)

Under circumstances specified in the Merger Agreement, either Iveda or Charmed may terminate the Merger Agreement if:

the Merger is not completed by September 30, 2009;

the required approval of the Iveda shareholders is not obtained or the number of dissenting shares exceeds 1% of Iveda's total outstanding shares;

the other party breaches any material representations, warranties or covenants in the Merger Agreement, and breach is not cured in 30 days after notice; or such that its conditions to completion of the Merger regarding representations, warranties or covenants can not be satisfied; or

both the Board of Iveda and the Board of Charmed consent to termination.

The Merger is Intended to Qualify as a Reorganization for United States Federal Income Tax Purposes (see page 37)

The Merger of Charmed Homes Subsidiary, Inc. 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"). As a tax-free reorganization under Section 368(a) of the Code, 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. Neither Iveda nor Charmed will recognize gain or loss as a result of the Merger.

Accounting Treatment of the Merger (see page 37)

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.

SUMMARY SELECTED HISTORICAL

FINANCIAL DATA OF CHARMED

The following table sets forth selected financial data of Charmed for the years ended January 31, 2009 and 2008 and for the three months ended April 30, 2009. The data for the January fiscal years has been derived from the financial statements of Charmed, which have been audited by Manning Elliott LLP, independent auditors, and which are included in this information statement/prospectus. The following selected financial data of Charmed should be read in conjunction with Charmed's financial statements and the notes thereto included herein.

	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	$	15,356		$	51,568		$	50,569		$	121,023
Net loss	$	(15,356	)	$	(36,501	)	$	(50,569	)	$	(105,956	)
Per Share Data:
Basic and diluted net loss per share		-		$	(.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

SUMMARY SELECTED HISTORICAL

FINANCIAL DATA OF IVEDA

The following table sets forth selected financial data of Iveda for the years ended December 31, 2008 and 2007and for the three months ended March 31, 2009 and 2008. The data for the December fiscal years has been derived from the financial statements of Iveda, which have been audited by Eide Bailly LLP, independent certified public auditors, and which are included in this information statement/prospectus. The following selected financial data of Iveda should be read in conjunction with Iveda's financial statements and the notes thereto included herein.

	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

PRO FORMA FINANCIAL DATA

The Merger combines the historical balance sheets and statements of earnings of Iveda with those of Charmed after giving effect to the Merger. The Merger of Iveda into Charmed will result in the owners and management of Iveda having operating control of the combined company after the transaction, with shareholders of Charmed continuing only as passive investors. A transaction of this nature is considered to be a capital transaction in substance, rather than a business combination. Accordingly, the business combination will be accounted for as an additional capitalization of Charmed (a reverse acquisition with Iveda as the acquirer). That is, the transaction is equivalent to the issuance of stock by Iveda for the net assets of Charmed accompanied by a recapitalization. Therefore, no goodwill or other intangibles will be recorded as part of the transaction. For financial accounting purposes, Iveda is considered the surviving entity.

The unaudited Pro Forma Condensed Consolidated Balance Sheet as of April 30, 2009 is presented as if the merger and related financing had occurred on that date. The unaudited pro forma condensed consolidated income statements for the year ended January 31, 2009 and for the three months ended April 30, 2009 were prepared assuming that the merger occurred on February 1, 2008 with respect to the year ended January 31, 2009 and February 1, 2009 for the interim three month period . The pro forma adjustments are based upon the assumptions set forth in the notes thereto.

The following pro forma financial data was prepared from, and should be read in conjunction with, the historical financial statements and related notes of Charmed and Iveda, all of which are included elsewhere herein. See " Index to Financial Statements ." The following information is not necessarily indicative of the financial position or operating results that would have occurred had the Merger been consummated on the date, or at the beginning of the periods, for which the Merger is being given effect, nor is it necessarily indicative of future operating results or financial position.

UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AND STATEMENT OF OPERATIONS - DECEMBER 31, 2008 AND JANUARY 31, 2009

Unaudited Pro Forma Condensed Balance Sheets	Iveda Solutions			Charmed Homes
	December 31,			January 31,			Pro Forma				Pro Forma
	2008			2009			Adjustments			Notes	Combined
ASSETS

CURRENT ASSETS
Cash and Cash Equivalents	$	335,189		$	86,957			(86,957	)	(a)	$	335,189
Accounts Receivable		26,971										26,971
Prepaid Expenses		11,532										11,532
Inventory		13,530										13,530
Total Current Assets		387,222			86,957			(86,957	)			387,222

PROPERTY AND EQUIPMENT
Office Equipment		87,050										87,050
Furniture and Fixtures		22,712										22,712
Software		36,634										36,634
Leased Equipment		213,460										213,460
Leasehold Improvements		34,495										34,495
Total Property and Equipment		394,351										394,351
Less: Accumulated Depreciation		99,099										99,099
Property and Equipment, Net		295,252										295,252

OTHER ASSETS
Deferred Income Taxes		-
Escrow Deposits		50,000						(50,000	)	(b)		-
Deposits		16,523										16,523

Total Assets	$	748,997		$	86,957		$	(136,957	)			698,997

	2008											-
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current Portion of Capital Lease Obligations	$	65,916										65,916
Notes Payable		-										-
Accounts Payable		48,465			3,413			(3,413	)	(a)		48,465
Deferred Revenue		21,964										21,964
Billings in Excess of Costs and Estimated Earnings on												-
Uncompleted Contracts		-										-
Accrued Expenses		70,285						150,000		( c )		220,285
Total Current Liabilities		206,630			3,413			146,587				356,630

LONG-TERM LIABILITIES
Capital Lease Obligations, Net of Current Portion		117,162										117,162
Total Liabilities		323,792			3,413			146,587				473,792

STOCKHOLDERS' EQUITY
Common Stock, $0.001 par value; 40,000,000 shares		8,774						845		(f)		9,619
					67			(67	)	(e)		-
issued and outstanding, as of December 31, 2008 and

Preferred Stock, $0.001 par value; 10,000,000 shares		-

Additional Paid-In Capital		3,385,251			173,933			(173,933	)	(e)		3,385,251
								(845	)	(f)
Donated Capital					15,500			(15,500	)	(e)		-
Accumulated Deficit		(2,968,820	)		(105,956	)		(94,044	)	(d)		(3,168,820	)
Total Stockholders' Equity		425,205			83,544			(283,544	)			225,205

Total Liabilities and Stockholders' Equity	$	748,997		$	86,957		$	(136,957	)			698,997

	Iveda Solutions			Charmed Homes						Pro Forma
	12 Months ended			12 Months ended			Pro Forma			Combined
Unaudited Pro Forma Condensed Statement of Operations	December 31,			January 31,			Adjustments			January 31,
	2008			2009						2009

REVENUE	$	506,285			505,665						1,011,950

COST OF REVENUE		357,184			490,598						847,782

GROSS PROFIT		149,101			15,067						164,168

OPERATING EXPENSES		1,661,718			51,568			200,000	(g)		1,913,286

LOSS FROM OPERATIONS		(1,512,617	)		(36,501	)					(1,549,118	)

OTHER INCOME (EXPENSE)
Interest Income		5,994									5,994
Interest Expense		(35,804	)								(35,804	)
Total Other Income (Expense)		(29,810	)								(29,810	)

LOSS BEFORE INCOME TAXES		(1,542,427	)								(1,542,427	)

BENEFIT (PROVISION) FOR INCOME TAXES		(558,370	)								(558,370	)

NET LOSS	$	(2,100,797	)		(36,501	)				$	(2,137,298	)

BASIC LOSS PER SHARE	$	(0.30	)	$	(0.01	)				$	(0.31	)

DILUTED LOSS PER SHARE	$	(0.30	)	$	(0.01	)				$	(0.31	)

Weighted Average Shares Outstanding		7,004,583			6,690,000						7,004,583

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information

Note 1—Pro Forma Adjustments

(a)	To eliminate all assets and liabilities of Charmed per merger agreement

(b)	To recognize the $50,000 escrow deposit to certain Charmed shareholders as a transaction cost

(c)	To record the $150,000 commitment at closing to certain Charmed shareholders

(d)	Eliminate $105,956 of Accumulated deficit and reflect $200,000 of transaction costs to certain Charmed shareholders

(e)	Adjustment to eliminate Charmed Common Shares, Additional Paid-in Capital and Donated Capital

(f)	Adjust Common Stock to reflect the par value of 845,000 shares that remain with Charmed shareholders after merger

(g)	Reflect the $200,000 transaction costs on Operating Statement

UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AND STATEMENT OF OPERATIONS - MARCH 31, 2009 AND APRIL 30, 2009

Unaudited Pro Forma Condensed Balance Sheets	Iveda Solutions			Charmed Homes
	March 31,			April 30,			Pro Forma				Pro Forma
	2009			2009			Adjustments			Notes	Combined
ASSETS

CURRENT ASSETS
Cash and Cash Equivalents	$	24,900		$	83,531			(83,531	)	(a)	$	24,900
Accounts Receivable		48,839										48,839
Prepaid Expenses		4,498										4,498
Inventory		0										-
Total Current Assets		78,237			83,531			(83,531	)			78,237

PROPERTY AND EQUIPMENT
Office Equipment		87,589										87,589
Furniture and Fixtures		27,416										27,416
Software		36,800										36,800
Leased Equipment		213,460										213,460
Leasehold Improvements		36,280										36,280
Total Property and Equipment		401,545										401,545
Less: Accumulated Depreciation		118,418										118,418
Property and Equipment, Net		283,127										283,127

OTHER ASSETS
Deferred Income Taxes		-
Escrow Deposits		50,000						(50,000	)	(b)		-
Deposits		16,523										16,523

Total Assets	$	427,887		$	83,531		$	(133,531	)			377,887

	2008											-
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current Portion of Capital Lease Obligations	$	65,916										65,916
Notes Payable		50,000										50,000
Accounts Payable		118,515			13,843			(13,843	)	(a)		118,515
Deferred Revenue		-										-
Billings in Excess of Costs and Estimated Earnings on												-
Uncompleted Contracts		-										-
Accrued Expenses		85,428						150,000		( c )		235,428
Total Current Liabilities		319,859			13,843			136,157				469,859

LONG-TERM LIABILITIES
Capital Lease Obligations, Net of Current Portion		104,944										104,944
Total Liabilities		424,803			13,843			136,157				574,803

STOCKHOLDERS' EQUITY
Common Stock, $0.001 par value; 40,000,000 shares		8,859						845		(f)		9,704
					67			(67	)	(e)		-
issued and outstanding, as of December 31, 2008 and

Preferred Stock, $0.001 par value; 10,000,000 shares		-

Additional Paid-In Capital		3,480,166			173,933			(173,933	)	(e)		3,480,166
								(845	)	(f)
Donated Capital					17,000			(17,000	)	(e)		-
Accumulated Deficit		(3,485,941	)		(121,312	)		(78,688	)	(d)		(3,685,941	)
Total Stockholders' Equity		3,084			69,688			(269,688	)			(196,916	)

Total Liabilities and Stockholders' Equity	$	427,887		$	83,531		$	(133,531	)			377,887

	Iveda Solutions			Charmed Homes						Pro Forma
	3 Months ended			3 Months ended			Pro Forma			Combined
Unaudited Pro Forma Condensed Statement of Operations	March 31,			April 30,			Adjustments			April 30,
	2009			2009						2009

REVENUE	$	223,824			-						223,824

COST OF REVENUE		165,232			-						165,232

GROSS PROFIT		58,592			-						58,592

OPERATING EXPENSES		568,966			15,356			200,000	(g)		784,322

LOSS FROM OPERATIONS		(510,374	)		(15,356	)					(525,730	)

OTHER INCOME (EXPENSE)
Interest Income		1,184									1,184
Interest Expense		(7,931	)								(7,931	)
Total Other Income (Expense)		(6,747	)								(6,747	)

LOSS BEFORE INCOME TAXES		(517,121	)								(517,121	)

BENEFIT (PROVISION) FOR INCOME TAXES		-									-

NET LOSS	$	(517,121	)		(15,356	)		(200,000	)	$	(732,477	)

BASIC LOSS PER SHARE	$	(0.06	)	$	-					$	(0.08	)

DILUTED LOSS PER SHARE	$	(0.06	)	$	-					$	(0.08	)

Weighted Average Shares Outstanding		8,819,304			6,690,000						8,819,304

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information

Note 1—Pro Forma Adjustments

(a)	To eliminate all assets and liabilities of Charmed per merger agreement

(b)	To recognize the $50,000 escrow deposit to certain Charmed shareholders as a transaction cost

( c )

To record the $150,000 commitment at closing to certain Charmed shareholders

(d)	Eliminate $121,312 of Accumulated deficit and reflect $200,000 of transaction costs to certain Charmed shareholders

(e)	Adjustment to eliminate Charmed Common Shares, Additional Paid-in Capital and Donated Capital

(f)	Adjust Common Stock to reflect the par value of 845,000 shares that remain with Charmed shareholders after merger

(g)	Reflect the $200,000 transaction costs on Operating Statement

COMPARATIVE HISTORICAL AND

PRO FORMA PER SHARE DATA

The following table presents selected comparative per share data for Iveda on a historical basis. As the Exchange Ratio for the Merger is 1 to 1 for the Iveda Common Stock, the pro forma equivalent per share amounts are identical to the historical amounts presented below for the indicated periods. The comparative per share data presented herein is based on and derived from, and should be read in conjunction with, the historical consolidated financial statements and related notes thereto of Iveda, incorporated by reference herein, and unaudited pro forma financial information included elsewhere herein. See " Unaudited Pro Forma Condensed Financial Statements ." Pro forma amounts are not necessarily indicative of results of operations or the combined financial position that would have resulted had the Merger been consummated at the beginning of the periods presented.

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

SECURITIES OWNERSHIP PRE- AND POST-MERGER

The following table sets forth the security ownership of Iveda and Charmed prior to the Merger (as of July 31, 2009) and the security ownership of Charmed immediately following the Merger:

	Ownership as of July 31, 2009 (1)			Ownership of Charmed Post-Merger
Iveda (2)		10,791,307	(3)		10,791,307(92.7%)	(3)
Charmed (4)		6,690,000	(5)		845,000(7.3%)	(6)

(1)	Reflects the total number of securities (common stock, options and warrants) outstanding for each of the companies on a fully diluted basis.

(2)	Reflects shareholdings of the Iveda shareholders in Iveda prior to the Merger and in Charmed after the merger.

(3)	Includes 9,036,800 shares of common stock and options and warrants to purchase 1,754,507 shares of common stock.

(4)	Reflects shareholdings of the Charmed shareholders prior to and after the Merger in Charmed.

(5)	Includes shares of common stock only (pre 1:2 reverse stock split).

(6)	Includes shares of common stock only (post 1:2 reverse stock split and assuming the cancellation of the 5 million pre-reverse split shares sold by Ian Quinn and Kevin Liggins to Iveda before the Merger)

STOCK PRICE AND DIVIDEND INFORMATION

Charmed shares began trading on the OTC Bulletin Board operated by the Financial Industry Regulatory Authority under the symbol "CHDH" on November 15, 2007. The following table sets forth, for the calendar periods indicated, the range of the high and low last reported bid prices of Charmed common stock, as reported by the OTC Bulletin Board, since Charmed stock began trading on the OTC Bulletin Board. The quotations represent inter-dealer prices without retail mark-ups, mark-downs or commissions, and may not necessarily represent actual transactions. The quotations may be rounded for presentation. There is an absence of an established trading market for Charmed's common stock, as the market is limited, sporadic and highly volatile, which may affect the prices listed below.

2009	High Bid		Low Bid

Second Quarter 4-1-09 to 6-30-09	$	N/A	$	N/A
First Quarter 1-1-09 to 3-31-09	$	2.00	$	2.00

2008	High Bid		Low Bid

Fourth Quarter 10-1-08 to 12-31-08	$	N/A	$	N/A
Third Quarter 7-1-08 to 9-30-08	$	N/A	$	N/A
Second Quarter 4-1-08 to 6-30-08	$	N/A	$	N/A
First Quarter 1-1-08 to 3-31-08	$	N/A	$	N/A

2007	High Bid		Low Bid

Fourth Quarter 10-1-07 to 12-31-07	$	N/A	$	N/A

* N/A indicates no recorded trading activity during the period presented.

There is limited trading activity in Charmed's securities, and there can be no assurance a regular trading market for our common stock will be sustained. On February 4, 2009, the closing price per share of Charmed common stock on the OTC Bulletin Board was $2.00, and there has been no trading activity since that date.

The last trading day before the Merger was announced was November 14, 2008. On that date the closing price for Charmed shares on the OTC Bulletin Board was N/A as the stock had not been traded. Charmed has never paid cash dividends on its capital stock. Charmed currently intends to retain all earnings, if any, to finance the growth and development of its business. Charmed does not anticipate paying any cash dividends in the foreseeable future. As of July 31, 2009, Charmed had approximately 56 shareholders of record, exclusive of shares held in street name.

Iveda is a privately held company and there is no established public trading market for its stock. Iveda has never paid, and does not anticipate paying, cash dividends on its common stock.

CAUTIONARY STATEMENT REGARDING

FORWARD-LOOKING INFORMATION

All statements contained in this information statement/prospectus and the documents annexed to or incorporated by reference into this information statement/prospectus, other than statements of historical facts, that address future activities, events or developments are forward-looking statements, including, but not limited to, statements containing the words "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," and similar expressions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

These statements are based on certain assumptions and analyses made by Iveda and Charmed in light of their experience and their assessment of historical trends, current conditions and expected future developments as well as other factors they believe are appropriate under the circumstances. However, whether actual results will conform to the expectations and predictions of management is subject to a number of risks and uncertainties described under " Risk Factors " beginning on the next page and in the " Risk Factors " sections of Charmed's Form 10-K and Form 10-Q filings with the SEC that may cause actual results to differ materially.

The principal risks and uncertainties include the fact that Iveda has limited operating history and that Iveda may need to raise capital to stay in business or expand its scope of operations and other risks that are described in the section entitled " Risk Factors ," which follows on the next page.

Consequently, all of the forward-looking statements made in this information statement/prospectus are qualified by these cautionary statements and there can be no assurance that the actual results anticipated by management will be realized or, even if substantially realized, that they will have the expected consequences to or effects on our business operations. Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of Iveda or Charmed's views as of the date the statement was made. Iveda and Charmed undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 July 31, 2009, Iveda had approximately $15,000 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.

ANNEX A

MERGER AGREEMENT

AMONG

CHARMED HOMES INC.,

CHARMED HOMES SUBSIDIARY, INC.,

CERTAIN SHAREHOLDERS,

AND

INTELASIGHT, INC.

January 8, 2009

TABLE OF CONTENTS

1.	DEFINITIONS.		A-1

2.	BASIC TRANSACTION.		A-6
	2.1	The Merger.	A-6
	2.2	The Closing.	A-6
	2.3	Actions at the Closing.	A-6
	2.4	Effect of Merger.	A-6
	2.5	Closing of Transfer Records.	A-7
	2.6	Dissenting Shares.	A-7

3.	REPRESENTATIONS AND WARRANTIES OF THE TARGET.		A-7
	3.1	Organization, Qualification, and Corporate Power.	A-8
	3.2	Capitalization.	A-8
	3.3	Authorization of Transaction.	A-8
	3.4	Noncontravention.	A-9
	3.5	Financial Statements.	A-9
	3.6	Books And Records.	A-9
	3.7	Title To Properties; Encumbrances.	A-9
	3.8	Condition And Sufficiency Of Assets.	A-10
	3.9	No Undisclosed Liabilities.	A-10
	3.10	Taxes.	A-10
	3.11	Compliance With Legal Requirements; Governmental Authorizations.	A-10
	3.12	Legal Proceedings; Orders.	A-11
	3.13	Contracts; No Defaults.	A-12
	3.14	Insurance.	A-14
	3.15	Environmental Matters.	A-15
	3.16	Employees.	A-15
	3.17	Labor Relations; Compliance.	A-16
	3.18	Intellectual Property.	A-16
	3.19	Certain Payments.	A-18
	3.20	Relationships With Related Persons.	A-18
	3.21	Brokers' Fees.	A-18
	3.22	Tax Treatment.	A-18
	3.23	Disclosure.	A-18

4. REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE TRANSITORY SUBSIDIARY AND THE MAJOR BUYER SHAREHOLDERS.			A-19
	4.1	Organization.	A-19
	4.2	No Brokers' Fees.	A-19
	4.3	Buyer's Securities.	A-19

	4.4	Limited Business Conducted.	A-20
	4.5	Undisclosed Liabilities.	A-20
	4.6	Authorization of Transaction.	A-20
	4.7	Disclosure.	A-20
	4.8	Filings with the SEC.	A-20
	4.9	Financial Statements.	A-21
	4.10	Books and Records.	A-21
	4.11	No Contravention.	A-22
	4.12	Reporting Company Status.	A-22
	4.13	No Injunctions.	A-22
	4.14	Antitakeover Statutes and Rights Agreement; Dissenters Rights.	A-22
	4.15	Absence of Certain Changes.	A-22
	4.16	Compliance with Laws and Court Orders.	A-23
	4.17	Tax Treatment.	A-23
	4.18	Litigation.	A-23
	4.19	Agreements, Contracts and Commitments.	A-23
	4.20	Taxes.	A-23
	4.21	Relationships With Related Persons.	A-24
	4.22	Disclosure.	A-24

5.	COVENANTS.		A-24
	5.1	General.	A-24
	5.2	Notices and Consents.	A-24
	5.3	Regulatory Matters and Approvals.	A-24
	5.4	Operation of Business.	A-25
	5.5	Full Access.	A-26
	5.6	Notice of Developments.	A-26
	5.7	Exclusivity.	A-26

6.	CONDITIONS TO OBLIGATION TO CLOSE.		A-26
	6.1	Conditions to Obligation of the Buyer and the Transitory Subsidiary.	A-26
	6.2	Conditions to Obligation of the Target.	A-27

7.	INDEMNIFICATION.		A-29
	7.1	Indemnification.	A-29
	7.2	Warranty of No Claims.	A-29
	7.3	Indemnity Procedure.	A-29
	7.4	Payment.	A-29

8.	TERMINATION.		A-30
	8.1	Termination of Agreement.	A-30
	8.2	Effect of Termination.	A-30

9.	MISCELLANEOUS.		A-30
	9.1	Survival.	A-30

9.2	Press Releases and Public Announcements.	A-31
9.3	No Third-Party Beneficiaries.	A-31
9.4	Entire Agreement.	A-31
9.5	Succession and Assignment.	A-31
9.6	Counterparts.	A-31
9.7	Headings.	A-31
9.8	Notices.	A-31
9.9	Governing Law.	A-32
9.10	Amendments and Waivers.	A-32
9.11	Severability.	A-33
9.12	Expenses.	A-33
9.13	Construction.	A-33
9.14	Incorporation of Exhibits and Schedules.	A-33
9.15	Separate Counsel.	A-33

iii

Exhibit A – Articles of Merger

Exhibit B – Stock Option Plan

Exhibit C – Stock Purchase Agreement

Disclosure Schedule — Exceptions to Representations and Warranties

MERGER AGREEMENT

This Merger Agreement (the “Agreement” ) is entered into as of January 8, 2009, by and among Charmed Homes Inc., a Nevada corporation (the "Buyer" ), Charmed Homes Subsidiary, Inc., a Nevada corporation that is a wholly-owned Subsidiary of the Buyer (the "Transitory Subsidiary" ), and IntelaSight, Inc., a Washington corporation (the "Target" ). The Buyer, the Transitory Subsidiary, and the Target are referred to collectively herein as the "Parties."

A. Target is engaged in the business of providing video hosting and remote monitoring services.

B. Buyer is a public company without any significant ongoing business operations whose shareholders would like to acquire Target as it has operations which Buyer believes could be financed by the public markets.

C. Target needs financing to meet its business objectives and Target's management believes the needed financing may become more readily available following the merger due to the anticipated increase in liquidity of the combined companies.

D. Transitory Subsidiary has been formed to merge with and into the Target pursuant to a non-taxable reorganization under Section 368(a) (1) (A) of the Internal Revenue Code of 1986, as amended ("Code"), and specifically as a reverse triangular merger as authorized by Section 368(a) (2) (E) of the Code whereby the Common Stock and other securities of the Buyer shall be used as consideration for the transaction.

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows:

1.	DEFINITIONS.

"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act.

"Articles of Merger" has the meaning set forth in Section 2.3 below.

"Audited Statements" has the meaning set forth in Section 3.5 below.

"Buyer" has the meaning set forth in the preface above.

"Buyer Options" means any options to purchase Common Stock issued by Buyer.

"Buyer Preferred Shares" means any shares of Preferred Stock, of any series, issued by Buyer.

"Buyer Securities" means all Buyer Options, Buyer Preferred Shares, Buyer Shares, and Buyer Warrants.

"Buyer Special Meeting" has the meaning set forth in Section 5.3(d) below.

"Buyer Shares" means any shares of Common Stock, $.0001 par value per share, issued by Buyer.

"Buyer Warrants" means any warrants to purchase Preferred or Common Stock issued by the Buyer.

"Closing" has the meaning set forth in Section 2.2 below.

"Closing Date" has the meaning set forth in Section 2.2 below.

"Confidential Information" means any information concerning the businesses and affairs of the Target that is not already generally available to the public.

"Consent" means any approval, consent, ratification, waiver, or other authorization (including any Governmental Authorization).

"Contract" means any agreement, contract, obligation, promise, or undertaking (whether written or oral and whether express or implied) that is legally binding.

"Derivative Securities" shall mean those securities as defined in Section 3.2 below.

"Disclosure Schedule" has the meaning set forth in Section 3 below.

"Dissenting Share" has the meaning set forth in Section 2.6 below.

"Effective Time" has the meaning set forth in Section 2.4(a) below.

"Encumbrance" means any charge, claim, community property interest, condition, equitable interest, lien, option, pledge, security interest, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.

"ERISA" means the Employee Retirement Income Security Act of 1974 or any successor law, and regulations and rules issued pursuant to that Act or any successor law.

"GAAP" means United States generally accepted accounting principles as in effect from time to time.

"Governmental Authorization " means any approval, consent, license, permit, waiver, or other authorization issued, granted, given, or otherwise made available by or under the authority of any Governmental Body or pursuant to any Legal Requirement.

"Governmental Body" means any:

(a) nation, state, county, city, town, village, district, or other jurisdiction of any nature;

(b) federal, state, local, municipal, foreign, or other government;

(c) governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal);

(d) multi-national organization or body; or

(e) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

"Intellectual Property Assets" has the meaning set forth in Section 3.18 below.

A-2

"Knowledge" means an individual shall be deemed to have "Knowledge" of a particular fact or other matter if (i) such individual is actually aware of such fact or other matter, or (ii) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably comprehensive investigation concerning the existence of such fact or other matter. A Person (other than an individual) will be deemed to have "Knowledge" of a particular fact or other matter if any individual who is serving, or who has at any time within the last six years served, as a director, officer, partner, executor, or trustee of such Person (or in any similar capacity) has, or at any time within the last six years had, Knowledge of such fact or other matter provided that the loyalty and diligence of such director, officer, partner, executor or trustee was at the time and under the circumstances Knowledge was acquired, steadfast and undiminished.

"Legal Requirement" means any federal, state, local, municipal, foreign, international, multinational, or other administrative order, constitution, law, ordinance, principle of common law, regulation, statute, or treaty.

"Major Buyer Shareholders" shall mean Ian Quinn and Kevin Liggins, who collectively own approximately 74% of the outstanding Buyer Shares.

"Merger" has the meaning set forth in Section 2.1 below.

"Merger Consideration" has the meaning set forth in Section 2.4(e) below.

"Most Recent Fiscal Quarter End" has the meaning set forth in Section 4.9 below.

" Nevada Business Corporation Act " means the Business Corporation Act of the State of Nevada, as amended.

"Order" means any award, decision, injunction, judgment, order, ruling, subpoena, or verdict entered, issued, made, or rendered by any court, administrative agency, or other Governmental Body or by any arbitrator.

"Ordinary Course of Business" means an action taken by a Person will be deemed to have been taken in the "Ordinary Course of Business" only if:

(a) such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

(b) such action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority); and

(c) such action is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

"Organizational Documents" shall mean (a) the articles or certificate of incorporation and the bylaws of a corporation; (b) the partnership agreement and any statement of partnership of a general partnership; (c) the limited partnership agreement and the certificate of limited partnership of a limited partnership; (d) any charter or similar document adopted or filed in connection with the creation, formation, or organization of a Person; and (e) any amendment to any of the foregoing.

"Party" has the meaning set forth in the preface above.

A-3

"Person" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

"Proceeding" means any action, arbitration, audit, hearing, investigation, litigation, or suit (whether civil, criminal, administrative, investigative, or informal) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Body, or arbitrator.

"Related Person" means, with respect to a particular individual:

(a) each other member of such individual's Family;

(b) any Person that is directly or indirectly controlled by such individual or one or more members of such individual's Family;

(c) any Person in which such individual or members of such individual's Family hold (individually or in the aggregate) a Material Interest; and

(d) any Person with respect to which such individual or one or more members of such individual's Family serves as a director, officer, partner, executor, or trustee (or in a similar capacity).

With respect to a specified Person other than an individual:

(a) any Person that directly or indirectly controls, is directly or indirectly controlled by, or is directly or indirectly under common control with such specified Person;

(b) any Person that holds a Material Interest in such specified Person;

(c) each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity);

(d) any Person in which such specified Person holds a Material Interest;

(e) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and

(f) any Related Person of any individual described in clause (b) or (c).

For purposes of this definition, (a) the "Family" of an individual includes (i) the individual, (ii) the individual's spouse and former spouses, (iii) any other natural person who is related to the individual or the individual's spouse within the second degree, and (iv) any other natural person who resides with such individual, and (b) "Material Interest" means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of voting securities or other voting interests representing at least 5% of the outstanding voting power of a Person or equity securities or other equity interests representing at least 5% of the outstanding equity securities or equity interests in a Person.

"Requisite Shareholder Approval" means the affirmative vote of the holders of fifty and one-tenth percent (50.1%) of the Target Shares.

"SEC" means the Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.

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"Security Interest" means any mortgage, pledge, lien, encumbrance, charge, or other security interest, other than (a) mechanic's, materialman's, and similar liens, (b) liens for taxes not yet due and payable or for taxes that the taxpayer is contesting in good faith through appropriate proceedings, (c) purchase money liens and liens securing rental payments under capital lease arrangements, and (d) other liens arising in the Ordinary Course of Business and not incurred in connection with the borrowing of money.

"Subsidiary" means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors.

"Surviving Corporation" has the meaning set forth in Section 2.1 below.

"Target" has the meaning set forth in the preface above.

"Target Options " means any options to purchase Common Stock issued by Target.

"Target PPM" means the private placement memorandum and consent notice prepared by Target for distribution to its shareholders in connection with the Merger.

"Target Preferred Shares" means any shares of Preferred Stock, of any series, issued by Target.

"Target Securities" means all Target Options, Target Preferred Shares, Target Shares and Target Warrants.

"Target Securityholder" means any Person who or which holds any Target Securities.

"Target Share" means any share of the Common Stock, $.001 par value per share, of the Target.

"Target Shareholder" means any Person who or which holds any Target Shares or Target Preferred Shares.

"Target Special Meeting" has the meaning set forth in Section 5.3(b) below.

"Target Warrants" means any warrants to purchase Preferred or Common Stock issued by Target.

"Tax Return" means any return (including any information return), report, statement, schedule, notice, form, or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Body in connection with the determination, assessment, collection, or payment of any tax or in connection with the administration, implementation, or enforcement of or compliance with any Legal Requirement relating to any tax.

"Threatened" means that a claim, Proceeding, dispute, action, or other matter will be deemed to have been "Threatened" if any demand or statement has been made (orally or in writing) or any notice has been given (orally or in writing), or if any other event has occurred or any other circumstances exist, that would lead a prudent Person to conclude that such a claim, Proceeding, dispute, action, or other matter is likely to be asserted, commenced, taken, or otherwise pursued in the future.

"Transitory Subsidiary" has the meaning set forth in the preface above.

"Washington Business Corporation Act" means the Business Corporation Act of the State of Washington, as amended.

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2.	BASIC TRANSACTION.

2.1 The Merger.

On and subject to the terms and conditions of this Agreement, the Transitory Subsidiary will merge with and into the Target (the "Merger" ) at the Effective Time. The Target shall be the corporation surviving the Merger (the "Surviving Corporation" ) and shall be a wholly-owned subsidiary of Buyer.

2.2 The Closing.

The closing of the transactions contemplated by this Agreement (the "Closing" ) shall take place at the offices of Keller Rohrback, PLC in Phoenix, Arizona, commencing at 10:00 a.m. local time on the second business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective Parties will take at the Closing itself) or such other date as the Parties may mutually determine (the "Closing Date" ).

2.3 Actions at the Closing.

At the Closing, (i) the Target will deliver to the Buyer and the Transitory Subsidiary the various certificates, instruments, and documents referred to in Section 6.1 below, (ii) the Buyer and the Transitory Subsidiary will deliver to the Target the various certificates, instruments, and documents referred to in Section 6.2 below, (iii) the Target and the Transitory Subsidiary will file with the Secretaries of State of the States of Nevada and Washington Articles of Merger in the form attached hereto as Exhibit A (the "Articles of Merger" ), and (iv) the Buyer will cause the Buyer Securities to be issued in exchange for the Target Securities in the manner provided in the Articles of Merger.

2.4 Effect of Merger.

(a) General . The Merger shall become effective at the later of the times (the "Effective Time" ) that the Target and the Transitory Subsidiary file the Articles of Merger with the Secretaries of State of the States of Nevada and Washington. The Merger shall have the effects set forth in the Nevada Business Corporation Act and the Washington Business Corporation Act. The Surviving Corporation may, at any time after the Effective Time, take any action (including executing and delivering any document) in the name and on behalf of either the Target or the Transitory Subsidiary in order to carry out and effectuate the transactions contemplated by this Agreement.

(b) Articles of Incorporation . Unless otherwise determined by Buyer prior to the Effective Time, the Articles of Incorporation of the Target shall be the Articles of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Articles of Incorporation. Concurrent with the Merger, the name of Buyer shall be changed to "Iveda Corporation".

(c) Bylaws . The Bylaws of the Target, as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation until thereafter amended, and the Bylaws of the Buyer shall remain unchanged until later amended by the Buyer's new Board of Directors.

(d) Directors and Officers . At least a majority of the directors and officers of the Target shall become directors and officers of the Surviving Corporation at and as of the Effective Time (retaining their respective positions and terms of office and as determined by Target). At the Effective Time, all of the directors and officers of the Buyer shall resign and the directors of the Buyer following the Merger shall be David Ly, Greg Omi, Jody Bisson, and one additional director to be appointed by Target and the officers of the Buyer shall be David Ly, President and CEO, Bob Brilon, CFO and Treasurer, and Luz Berg, Secretary.

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(e) Conversion of Target Securities . At and as of the Effective Time, each Target Security (other than any Dissenting Share) shall be converted into the right to receive Buyer Securities as set forth in the Articles of Merger attached hereto as Exhibit A (the “Merger Consideration” ). No Target Security shall be deemed to be outstanding or to have any rights other than those set forth above in this Section 2.4 after the Effective Time.

(f) Conversion of Capital Stock of the Transitory Subsidiary . At and as of the Effective Time, each share of Common Stock, $0.001 par value per share, of the Transitory Subsidiary shall be converted into one share of Common Stock, $0.001 par value per share, of the Surviving Corporation as set forth in the Articles of Merger attached hereto as Exhibit A . Each stock certificate of Transitory Subsidiary evidencing ownership of any such shares shall continue to evidence ownership of such shares of capital stock of the Surviving Corporation.

2.5 Closing of Transfer Records.

After the close of business on the Closing Date, transfers of Target Securities outstanding prior to the Effective Time shall not be made on the stock transfer books of the Surviving Corporation.

2.6 Dissenting Shares.

(a) Notwithstanding any provision of this Agreement to the contrary, any Target Shares or Target Preferred Shares issued and outstanding immediately prior to the Effective Time that are held by a Target Shareholder who has exercised and perfected dissenters rights for such shares in accordance with the Washington Business Corporation Act and who, as of the Effective Time, has not effectively withdrawn or lost such appraisal rights ( "Dissenting Shares" ), shall not be converted into or represent a right to receive Buyer Shares or Buyer Preferred Shares pursuant to Section 2.4 , but the holder thereof shall only be entitled to such rights as are granted by the Washington Business Corporation Act.

(b) Notwithstanding the provisions of subsection (a), if any holder of Dissenting Shares shall effectively withdraw or lose (through failure to perfect or otherwise) his or her dissenters rights, then, as of the later of Effective Time and the occurrence of such event, such holder's shares shall automatically be converted into and represent only the right to receive the Buyer Shares or Buyer Preferred Shares to which such Target Shareholder would otherwise be entitled under Section 2.4 upon surrender of the certificate representing such shares.

(c) The Target shall give the Buyer prompt notice of any written demand for appraisal received by the Target pursuant to the applicable provisions of the Washington Business Corporation Act and the opportunity to participate in all negotiations and proceedings with respect to such demands. The Target shall not, except with the prior written consent of the Buyer, voluntarily make any payment with respect to any such demands or offer to settle or settle any such demands.

(d) After payments of fair value in respect of Dissenting Shares have been made to dissenting shareholders pursuant to the Washington Business Corporation Act, such Dissenting Shares shall be canceled.

3.	REPRESENTATIONS AND WARRANTIES OF THE TARGET.

The Target represents and warrants to Buyer and the Transitory Subsidiary that the statements contained in this Section 3 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 3 ), except as set forth in the Disclosure Schedule accompanying this Agreement and initialed by the Parties (the "Disclosure Schedule" ). The Disclosure Schedule will be arranged in paragraphs corresponding to the lettered and numbered paragraphs contained in this Section 3 .

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3.1 Organization, Qualification, and Corporate Power.

Target is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation. Target is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required except where the lack of such qualification would not have a material adverse effect on the financial condition of the Target taken as a whole or on the ability of the Parties to consummate the transactions contemplated by this Agreement. Target has full corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.

3.2 Capitalization.

The entire authorized capital stock of the Target consists of 40,000,000 Target Shares, of which 8,757,660 Target Shares are issued and outstanding and none are held in treasury, and 10,000,000 Target Preferred Shares, of which no Target Preferred Shares are issued and outstanding, and none are held in treasury designated into series as follows – 703,333 Target Series A Preferred Shares, of which none are issued and outstanding and none are held in treasury, and 1,241,176 Target Series A-1 Preferred Shares, of which none are issued and outstanding and none are held in treasury. All of the issued and outstanding Target Shares and Target Preferred Shares have been duly authorized and are validly issued, fully paid, and nonassessable, free and clear of all Encumbrances. Other than as set forth in Schedule 3.2 which shall be updated through the date of the Closing for future issuance of Target Options, if any, there are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require the Target to issue, sell, or otherwise cause to become outstanding any of its capital stock (collectively, "Derivative Securities" ). There are no outstanding or authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to the Target. Schedule 3.2 contains a complete list of the holders of and the date of issuance of the Target Shares and the Derivative Securities and the number of securities held by each. None of the Target Shares or Derivative Securities was issued in violation of the Securities Act or any other Legal Requirement. Other than as set forth in Schedule 3.2 , no registration rights have been given to any holder of capital stock or Derivative Securities. The Target does not have any Contract to acquire any equity securities or other securities of any Person or any direct or indirect equity or ownership interest in any other business.

3.3 Authorization of Transaction.

The Target has full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform its obligations hereunder; provided, however, that the Target cannot consummate the Merger unless and until it receives the Requisite Shareholder Approval. This Agreement constitutes the valid and legally binding obligation of the Target, enforceable in accordance with its terms and conditions.

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3.4 Noncontravention.

Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will, directly or indirectly, (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Target is subject or any provision of the charter or bylaws of Target or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Target is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Security Interest upon any of its assets) or (iii) cause Target to become subject to, or to become liable for the payment of, any tax, or (iv) cause any of the assets owned by Target to be reassessed or revalued by any taxing authority or other Governmental Body. Other than in connection with the Washington Business Corporation Act, the Securities Exchange Act, the Securities Act, and the state securities laws, Target does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement. Except as set forth in Schedule 3.4 , Target will not be required to give any notice to or obtain any Consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the transactions contemplated herein.

3.5 Financial Statements.

Buyer has received audited balance sheets of Target as of December 31 in each of the two years ended 2007 and 2006, and the related audited statements of income, changes in shareholders' equity, and cash flow for each of the fiscal years then ended, including the notes thereto, together with the report thereon of Eide Bailly LLP, independent certified public accountants (collectively, "Audited Statements" ); an unaudited balance sheet of the Target as at September 30, 2008, (the "Interim Balance Sheet" ), and the related audited statements of income, changes in shareholders' equity, and cash flow for the nine months then ended. Such financial statements and notes do and shall fairly present the financial condition and the results of operations, changes in shareholders' equity, and cash flow of the Target as at the respective dates of and for the periods referred to in such financial statements, all in accordance with GAAP. The financial statements referred to in this Section 3.5 shall reflect the consistent application of such accounting principles throughout the periods involved. No financial statements of any Person other than the Target are required by GAAP to be included in the consolidated financial statements of the Target.

3.6 Books And Records.

The minute books of the Target contain accurate and complete records of all meetings held of, and corporate action taken by, the shareholders, the Board of Directors, and committees of the Board of Directors of the Target, and no meeting of any such shareholders, Board of Directors, or committee has been held for which minutes have not been prepared and are not contained in such minute books. At the Closing, all of those books and records will be in the possession of the Target.

3.7 Title To Properties; Encumbrances.

Schedule 3.7 contains a complete and accurate list of all real property, leaseholds, or other interests therein owned by Target. The Target owns (with good and marketable title in the case of real property, subject only to the matters permitted by the following sentence) all the properties and assets (whether real, personal, or mixed and whether tangible or intangible) that it purports to own, including all of the properties and assets reflected in the Audited Statements and the Interim Balance Sheet (except for assets held under capitalized leases disclosed in Schedule 3.7 and personal property sold since the date of the Audited Statements and the Interim Balance Sheet, as the case may be, in the Ordinary Course of Business), and all of the properties and assets purchased or otherwise acquired by the Target since the date of the Audited Statements (except for personal property acquired and sold since the date of the Audited Statements in the Ordinary Course of Business and consistent with past practice). All material properties and assets reflected in the Audited Statements and the Interim Balance Sheet are free and clear of all Security Interests other than as set forth in Schedule 3.7 .

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3.8 Condition And Sufficiency Of Assets.

The equipment of the Target is in good operating condition and repair, and is adequate for the uses to which it is being put. The equipment will be sufficient for the continued conduct of the Target's business after the Closing in substantially the same manner as conducted prior to the Closing.

3.9 No Undisclosed Liabilities.

Except as set forth in Schedule 3.9 , the Target has no liabilities or obligations of any nature (whether known or unknown and whether absolute, accrued, contingent, or otherwise) except for current liabilities incurred in the Ordinary Course of Business.

3.10 Taxes.

(a) Except as set forth in Schedule 3.10 , the Target has filed or caused to be filed (on a timely basis since inception of the Target) all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of corporations, pursuant to applicable Legal Requirements. Target has delivered to Buyer copies of all such Tax Returns filed since inception of the Target. The Target has paid all taxes that have become due pursuant to those Tax Returns or otherwise, or pursuant to any assessment received by Target, except such taxes, if any, as are listed in Schedule 3.10 and are being contested in good faith and as to which adequate reserves (determined in accordance with GAAP) have been provided in the Audited Statements and on the Interim Balance Sheet.

(b) The charges, accruals, and reserves with respect to Taxes on the respective books of Target are adequate (determined in accordance with GAAP) and are at least equal to Target's liability for Taxes. All taxes that Target is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

(c) All Tax Returns filed by (or that include on a consolidated basis) Target are true, correct, and complete. There is no tax sharing agreement that will require any payment by Target after the date of this Agreement.

3.11 Compliance With Legal Requirements; Governmental Authorizations.

(a) Except as set forth in Schedule 3.11 :

(i) Target is, and at all times since inception has been, in full compliance with each Legal Requirement that is or was applicable to it or to the conduct or operation of its business or the ownership or use of any of its assets;

(ii) no event has occurred or circumstance exists that (with or without notice or lapse of time) (A) may constitute or result in a violation by Target of, or a failure on the part of Target to comply with, any Legal Requirement, or (B) may give rise to any obligation on the part of Target to undertake, or to bear all or any portion of the cost of, any remedial action of any nature; and

(iii) Target has not received, at any time since inception, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or potential violation of, or failure to comply with, any Legal Requirement, or (B) any actual, alleged, possible, or potential obligation on the part of Target to undertake, or to bear all or any portion of the cost of, any remedial action of any nature.

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(b) Schedule 3.11 contains a complete and accurate list of each Governmental Authorization that is held by Target or that otherwise relates to the business of, or to any of the assets owned or used by, Target. Each Governmental Authorization listed or required to be listed in Schedule 3.11 is valid and in full force and effect. Except as set forth in Schedule 3.11 :

(i) Target is, and at all times since inception has been, in full compliance with all of the terms and requirements of each Governmental Authorization identified or required to be identified in Schedule 3.11 ;

(ii) no event has occurred or circumstance exists that may (with or without notice or lapse of time) (A) constitute or result directly or indirectly in a violation of or a failure to comply with any term or requirement of any Governmental Authorization listed or required to be listed in Schedule 3.11 , or (B) result directly or indirectly in the revocation, withdrawal, suspension, cancellation, or termination of, or any modification to, any Governmental Authorization listed or required to be listed in Schedule 3.11 ;

(iii) Target has not received, at any time since inception, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding (A) any actual, alleged, possible, or potential violation of or failure to comply with any term or requirement of any Governmental Authorization, or (B) any actual, proposed, possible, or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to any Governmental Authorization; and

(iv) all applications required to have been filed for the renewal of the Governmental Authorizations listed or required to be listed in Schedule 3.11 have been duly filed on a timely basis with the appropriate Governmental Bodies, and all other filings required to have been made with respect to such Governmental Authorizations have been duly made on a timely basis with the appropriate Governmental Bodies.

The Governmental Authorizations listed in Schedule 3.11 collectively constitute all of the Governmental Authorizations necessary to permit Target to lawfully conduct and operate its business in the manner it currently conducts and operates such business and to permit the Target to own and use its assets in the manner in which it currently owns and uses such assets.

3.12 Legal Proceedings; Orders.

(a) Except as set forth in Schedule 3.12 , there is no pending Proceeding:

(i) that has been commenced by or against Target or that otherwise relates to or may affect the business of, or any of the assets owned or used by, Target; or

(ii) that challenges, or that may have the effect of preventing, delaying, making illegal, or otherwise interfering with, the Merger.

(1) No such Proceeding has been Threatened, and (2) no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such Proceeding. Target has delivered to Buyer copies of all pleadings, correspondence, and other documents relating to each Proceeding listed in Schedule 3.12 . The Proceedings listed in Schedule 3.12 will not have a material adverse effect on the business, operations, assets, condition, or prospects of Target.

(b) Except as set forth in Schedule 3.12 :

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(i) there is no Order to which any of the Target, or any of the assets owned or used by Target, is subject; and

(ii) no officer, director, agent, or employee of Target is subject to any Order that prohibits such officer, director, agent, or employee from engaging in or continuing any conduct, activity, or practice relating to the business of Target.

(i) Target is, and at all times since inception has been, in full compliance with all of the terms and requirements of each Order to which it, or any of the assets owned or used by it, is or has been subject;

(ii) no event has occurred or circumstance exists that may constitute or result in (with or without notice or lapse of time) a violation of or failure to comply with any term or requirement of any Order to which Target, or any of the assets owned or used by Target is subject; and

(iii) Target has not received, at any time since inception, any notice or other communication (whether oral or written) from any Governmental Body or any other Person regarding any actual, alleged, possible, or potential violation of, or failure to comply with, any term or requirement of any Order to which Target, or any of the assets owned or used by Target, is or has been subject.

3.13 Contracts; No Defaults.

(a) Schedule 3.13 contains a complete and accurate list of:

(i) each Contract that involves performance of services or delivery of goods or materials by Target of an amount or value in excess of $10,000;

(ii) each Contract that involves performance of services or delivery of goods or materials to Target of an amount or value in excess of $10,000;

(iii) each Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts of Target in excess of $10,000;

(iv) each lease, rental or occupancy agreement, license, installment and conditional sale agreement, and other Contract affecting the ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real or personal property (except personal property leases and installment and conditional sales agreements having a value per item or aggregate payments of less than $10,000 and with terms of less than one year);

(v) each licensing agreement or other Contract with respect to patents, trademarks, copyrights, or other intellectual property, including agreements with current or former employees, consultants, or contractors regarding the appropriation or the non-disclosure of any of the Intellectual Property Assets;

(vi) each collective bargaining agreement and other Contract to or with any labor union or other employee representative of a group of employees;

(vii) each joint venture, partnership, and other Contract (however named) involving a sharing of profits, losses, costs, or liabilities by Target with any other Person;

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(viii) each Contract containing covenants that in any way purport to restrict the business activity of Target or any Affiliate of Target or limit the freedom of Target or any Affiliate of Target to engage in any line of business or to compete with any Person;

(ix) each Contract providing for payments to or by any Person based on sales, purchases, or profits, other than direct payments for goods;

(x) each power of attorney that is currently effective and outstanding;

(xi) each Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by Target to be responsible for consequential damages;

(xii) each Contract for capital expenditures in excess of $10,000;

(xiii) each written warranty, guaranty, or other similar undertaking with respect to contractual performance extended by Target other than in the Ordinary Course of Business; and

(xiv) each amendment, supplement, and modification (whether oral or written) in respect of any of the foregoing.

Schedule 3.13 sets forth reasonably complete details concerning such Contracts, including the parties to the Contracts and the amount of the remaining commitment of the Target under the Contracts.

(b) Except as set forth in Schedule 3.13 :

(i) no officer, director or shareholder who was in excess of five percent (5%) of the capital stock of the Target (and no Related Person of the foregoing) has nor may it acquire any rights under, any Contract that relates to the business of, or any of the assets owned or used by, Target; and

(ii) no officer, director, agent, employee, consultant, or contractor of Target is bound by any Contract that purports to limit the ability of such officer, director, agent, employee, consultant, or contractor to (A) engage in or continue any conduct, activity, or practice relating to the business of Target, or (B) assign to Target or to any other Person any rights to any invention, improvement, or discovery.

(c) Except as set forth in Schedule 3.13 , each Contract identified or required to be identified in Schedule 3.13 is in full force and effect and is valid and enforceable in accordance with its terms.

(d) Except as set forth in Schedule 3.13 :

(i) Target is, and at all times since inception has been, in full compliance with all applicable terms and requirements of each Contract under which Target has or had any obligation or liability or by which Target or any of the assets owned or used by such Target is or was bound;

(ii) each other Person that has or had any obligation or liability under any Contract under which Target has or had any rights is, and at all times since inception has been, in full compliance with all applicable terms and requirements of such Contract;

(iii) no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with, or result in a violation or breach of, or give Target or any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate, or modify, any Contract; and

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(iv) Target has not given to or received from any other Person, at any time since inception, any notice or other communication (whether oral or written) regarding any actual, alleged, possible, or potential violation or breach of, or default under, any Contract.

(e) There are no renegotiations of, attempts to renegotiate or outstanding rights to renegotiate any material amounts paid or payable to Target under current or completed Contracts with any Person and no such Person has made written demand for such renegotiation.

3.14 Insurance.

(a) On or before Closing, Target will deliver to Buyer:

(i) true and complete copies of all policies of insurance to which Target is a party or under which Target, or any director of Target, is or has been covered at any time since inception;

(ii) true and complete copies of all pending applications for policies of insurance; and

(iii) any statement by the auditor of Target's financial statements with regard to the adequacy of such entity's coverage or of the reserves for claims.

(b) Schedule 3.14 describes:

(i) any self-insurance arrangement by or affecting Target, including any reserves established thereunder;

(ii) any contract or arrangement, other than a policy of insurance, for the transfer or sharing of any risk by Target; and

(iii) all obligations of the Target to third parties with respect to insurance (including such obligations under leases and service agreements) and identifies the policy under which such coverage is provided.

(i) All policies to which Target is a party or that provide coverage to Target, or any director or officer of Target:

(A) shall be valid, outstanding, and enforceable;

(B) shall be issued by an insurer that is financially sound and reputable;

(C) taken together, shall provide adequate insurance coverage for the assets and the operations of the Target for all risks normally insured against by a Person carrying on the same business or businesses as Target;

(D) shall be sufficient for compliance with all Legal Requirements and Contracts to which Target is a party or by which any of them is bound;

(E) shall continue in full force and effect following the consummation of the Merger; and

(F) shall not provide for any retrospective premium adjustment or other experience-based liability on the part of Target.

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(ii) As of Closing, Target has not received (A) any refusal of coverage or any notice that a defense will be afforded with reservation of rights, or (B) any notice of cancellation or any other indication that any insurance policy is no longer in full force or effect or will not be renewed or that the issuer of any policy is not willing or able to perform its obligations thereunder.

(iii) The Target shall have paid all premiums due, and have otherwise performed all of its respective obligations, under each policy to which Target is a party or that provides coverage to Target or any director thereof.

(iv) The Target shall give notice to the insurer of all claims that may be insured thereby.

3.15 Environmental Matters.

Except as disclosed in Schedule 3.15 , Target (i) is currently in compliance with all applicable environmental laws, and has obtained all permits and other authorizations needed to operate its facilities, (ii) has not violated any applicable environmental law, (iii) is unaware of any present requirements of any applicable environmental law which is due to be imposed upon it which will increase its cost of complying with the environmental laws, (iv) all past on-site generation, treatment, storage and disposal of waste, including hazardous waste, by Target has been done in compliance with the currently applicable environmental laws; and (v) all past off-site treatment, storage and disposal of waste, including hazardous waste, generated by Target has been done in compliance with the currently applicable environmental laws. As used in this Agreement, the terms (i) "Environmental Laws" include but are not limited to any federal, state or local law, statute, charter or ordinance, and any rule, regulation, binding interpretation, binding policy, permit, order, court order or consent decree issued pursuant to any of the foregoing, which pertains to, governs or otherwise regulates any of the following activities, and (ii) "Waste," "Hazardous Substance," and "Hazardous Waste" include any substance defined as such by any applicable environmental law.

3.16 Employees.

(a) Schedule 3.16 contains a complete and accurate list of the following information for each employee or director of Target, including each employee on leave of absence or layoff status; employer; name; job title; current compensation paid or payable; vacation accrued; and service credited for purposes of vesting and eligibility to participate under Target's pension, retirement, profit-sharing, thrift-savings, deferred compensation, stock bonus, stock option, cash bonus, employee stock ownership (including investment credit or payroll stock ownership), severance pay, insurance, medical, welfare, or vacation plan, employee pension benefit plan or employee welfare benefit plan, or any other employee benefit plan or any plan for directors.

(b) No employee or director of Target is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, noncompetition, or proprietary rights agreement, between such employee or director and any other Person ( "Proprietary Rights Agreement" ) that in any way adversely affects or will affect (i) the performance of his duties as an employee or director of the Target, or (ii) the ability of Target to conduct its business, including any Proprietary Rights Agreement with the Target by any such employee or director.

(c) Schedule 3.16 also contains a complete and accurate list of the following information for each retired employee or director of the Target, or their dependents, receiving benefits or scheduled to receive benefits in the future: name, pension benefit, pension option election, retiree medical insurance coverage, retiree life insurance coverage, and other benefits.

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3.17 Labor Relations; Compliance.

Since inception, Target has not been and is not a party to any collective bargaining or other labor Contract. Target has complied in all respects with all Legal Requirements relating to employment, equal employment opportunity, nondiscrimination, immigration, wages, hours, benefits, collective bargaining, the payment of social security and similar taxes, occupational safety and health, and plant closing. Target is not liable for the payment of any compensation, damages, taxes, fines, penalties, or other amounts, however designated, for failure to comply with any of the foregoing Legal Requirements.

3.18 Intellectual Property.

(a) Intellectual Property Assets . The term "Intellectual Property Assets" includes:

(i) Target's name, all fictional business names, trading names, registered and unregistered trademarks, service marks, and applications (collectively, "Marks" );

(ii) all patents, patent applications, and inventions and discoveries that may be patentable (collectively, "Patents" );

(iii) all copyrights in both published works and unpublished works (collectively, "Copyrights" );

(iv) all rights in mask works (collectively, "Rights in Mask Works" ); and

(v) all know-how, trade secrets, confidential information, customer lists, software, technical information, data, process technology, plans, drawings, and blue prints (collectively, "Trade Secrets" ); owned, used, or licensed by Target as licensee or licensor.

(b) Agreements . Schedule 3.18 contains a complete and accurate list and summary description, including any royalties paid or received by the Target, of all Contracts relating to the Intellectual Property Assets to which Target is a party or by which Target is bound, except for any license implied by the sale of a product and perpetual, paid-up licenses for commonly available software programs with a value of less than $10,000 under which Target is the licensee. There are no outstanding and no threatened disputes or disagreements with respect to any such agreement.

(i) The Intellectual Property Assets are all those necessary for the operation of the Target's business as it is currently conducted or as reflected in the business plan given to Buyer by Target. Target is the owner of all right, title, and interest in and to each of the Intellectual Property Assets, free and clear of all Security Interests, equities or other adverse claims, and has the right to use without payment to a third party all of the Intellectual Property Assets.

(ii) Except as set forth in Schedule 3.18 , all former and current employees of Target have executed written Contracts with Target that assign to Target all rights to any inventions, improvements, discoveries, or information relating to the business of Target. No employee of Target has entered into any Contract that restricts or limits in any way the scope or type of work in which the employee may be engaged or requires the employee to transfer, assign, or disclose information concerning his work to anyone other than the Target.

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(d) Patents .

(i) Schedule 3.18 contains a complete and accurate list and summary description of all Patents. Target is the owner of all right, title, and interest in and to each of the Patents, free and clear of all liens, security interests, charges, encumbrances, and other adverse claims.

(ii) All of the issued Patents are currently in compliance with formal legal requirements (including payment of filing, examination, and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the Closing Date.

(iii) No Patent has been or is now involved in any interference, reissue, reexamination, or opposition proceeding.

(iv) All products made, used, or sold under the Patents have been marked with the proper patent notice.

(e) Trademarks .

(i) Schedule 3.18 contains a complete and accurate list and summary description of all Marks. Target is the owner of all right, title, and interest in and to each of the Marks, free and clear of all liens, security interests, charges, encumbrances, equities, and other adverse claims.

(ii) All Marks that have been registered with the United States Patent and Trademark Office are currently in compliance with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the Closing Date.

(iii) No Mark has been or is now involved in any opposition, invalidation, or cancellation.

(iv) All products and materials containing a Mark bear the proper federal registration notice where permitted by law.

(f) Copyrights .

(i) Schedule 3.18 contains a complete and accurate list and summary description of all Copyrights. Target is the owner of all right, title, and interest in and to each of the Copyrights, free and clear of all liens, security interests, charges, encumbrances, equities, and other adverse claims.

(ii) All the Copyrights have been registered and are currently in compliance with formal legal requirements, are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety days after the date of Closing.

(iii) All works encompassed by the Copyrights have been marked with the proper copyright notice.

(g) Trade Secrets .

(i) With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory of any individual.

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(ii) The Target has taken all reasonable precautions to protect the secrecy, confidentiality, and value of their Trade Secrets.

(iii) Target has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets. The Trade Secrets are not part of the public knowledge or literature, and, to Target’s Knowledge, have not been used, divulged, or appropriated either for the benefit of any Person (other than the Target) or to the detriment of the Target. No Trade Secret is subject to any adverse claim or has been challenged or threatened in any way.

3.19 Certain Payments.

Since inception, neither Target nor any director, officer, agent, or employee of Target, or other Person associated with or acting for or on behalf of Target, has directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment to any Person, private or public, regardless of form, whether in money, property, or services (i) to obtain favorable treatment in securing business, (ii) to pay for favorable treatment for business secured, (iii) to obtain special concessions or for special concessions already obtained, for or in respect of Target or any Affiliate of Target, or (iv) in violation of any Legal Requirement, (b) established or maintained any fund or asset that has not been recorded in the books and records of the Target.

3.20 Relationships With Related Persons.

Except as set forth in Schedule 3.20 , no Related Person of Target has, or since inception of the Target has had, any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Target's business. No Related Person of Target is, or since inception of the Target has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with Target, or (ii) engaged in competition with Target with respect to any line of the products or services of Target (a "Competing Business") in any market presently served by Target except for less than one percent of the outstanding capital stock of any Competing Business that is publicly traded on any recognized exchange or in the over-the-counter market. Except as set forth in Schedule 3.20 , no Related Person of Target is a party to any Contract with, or has any claim or right against, Target.

3.21 Brokers' Fees.

Other than as set forth in Schedule 3.21 , Target has no liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

3.22 Tax Treatment.

Neither the Target nor any of its Affiliates has taken or agreed to take any action, or is aware of any fact or circumstance, that would prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Internal Revenue Code (a " 368 Reorganization "). The Target operates at least one significant historic business line, or owns at least a significant portion of its historic business assets, in each case within the meaning of Treasury Regulation 1.368-1(d).

3.23 Disclosure.

(a) The Target PPM will comply with the Securities Act in all material respects. The Target PPM will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they will be made, not misleading; provided, however, that the Target makes no representation or warranty with respect to any information that the Buyer and the Transitory Subsidiary will supply specifically for use in the Target PPM.

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(b) No representation or warranty of Target in this Agreement omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

(c) No notice given pursuant to Section 9.8 will contain any untrue statement or omit to state a material fact necessary to make the statements therein or in this Agreement, in light of the circumstances in which they were made, not misleading.

4.	REPRESENTATIONS AND WARRANTIES OF THE BUYER AND THE TRANSITORY SUBSIDIARY AND THE MAJOR BUYER SHAREHOLDERS.

The Buyer, the Transitory Subsidiary and each of the Major Buyer Shareholders represent and warrant to the Target that the statements contained in this Section 4 are correct and complete as of the date of this Agreement and will be correct and complete (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Section 4 ), except as set forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Section 4 :

4.1 Organization.

The Buyer and the Transitory Subsidiary are, and will as of the Closing Date be, corporations duly organized, validly existing, and in good standing under the laws of the jurisdiction of their respective incorporations.

4.2 No Brokers' Fees.

Neither the Buyer nor the Transitory Subsidiary have any liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Target could become liable or obligated.

4.3 Buyer's Securities.

(a) The entire authorized capital stock of the Buyer consists of 200,000,000 Buyer Shares, $.00001 par value per share, of which 6,690,000 Buyer Shares are issued and outstanding and none are held in treasury as of the date of execution of this Agreement;

(b) Schedule 4.3 sets forth a complete and accurate list of all shareholders of Buyer, indicating the number and class of Buyer Shares held by each shareholder;

(c) all of the issued and outstanding Buyer Shares have been duly authorized and are validly issued, fully paid, and nonassessable;

(d) the Buyer Securities to be delivered at Closing pursuant to Section 2 have been duly authorized and are validly issued, fully paid, and non-assessable;

(e) Buyer only has one class of common stock which is not divided into series, and the Buyer Shares to be delivered at the Closing to the Target Shareholders will represent not less than ninety percent (90%) of the outstanding Buyer Shares as of the Closing Date, excluding the 2.5 million Buyer Shares that will be cancelled pursuant to the Stock Purchase Agreement attached as Exhibit C ;

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(f) except as may be disclosed in Schedule 4.3 , there are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights or contracts or commitments that could require Buyer to issue, sell, or otherwise cause to become outstanding any of its capital stock, and there are no outstanding authorized stock appreciation, phantom stock, profit participation, or similar rights with respect to Buyer (collectively, " Buyer Derivative Securities "); and

(g) as of the Closing, there shall not be any issued Buyer Derivative Securities and any Buyer Derivative Securities not exercised prior to the Closing shall be cancelled and rendered null and void.

4.4 Limited Business Conducted.

Since inception, Buyer has conducted no business, sales or marketing activities nor generated any revenue other than from the sale of a single home during 2008.

4.5 Undisclosed Liabilities.

Neither Buyer nor Transitory Subsidiary will have any liability (whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due) as of the Closing.

4.6 Authorization of Transaction.

The Buyer and the Transitory Subsidiary have full power and authority (including full corporate power and authority) to execute and deliver this Agreement and to perform their respective obligations hereunder. This Agreement constitutes the valid and legally binding obligation of the Buyer and the Transitory Subsidiary, enforceable in accordance with its terms and conditions.

4.7 Disclosure.

Any information supplied by the Buyer for inclusion in the Target PPM and any filing made by Buyer with the SEC regarding the Merger will comply with the Securities Act and Securities Exchange Act, as applicable, in all material respects. Such disclosures will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they will be made, not misleading; provided, however, that the Buyer and the Transitory Subsidiary make no representation or warranty with respect to any information that the Target will supply specifically for use in any SEC filings.

4.8 Filings with the SEC.

(a) Buyer has delivered or otherwise made available to Target true and complete copies of (i) the Buyer's annual report on Form 10-K for its fiscal year ended January 31, 2008, (ii) the Buyer’s quarterly reports on Form 10-Q for its fiscal quarters ended October 31, 2008, July 31, 2008 and April 30, 2008, (iii) its proxy or information statements relating to meetings of, or actions taken without a meeting by, the shareholders of the Buyer held since April 20, 2007, and (iv) all of its other reports, statements, schedules and registration statements (and all exhibits, attachments, schedules and appendixes filed with the foregoing) filed with the SEC since April 20, 2007 (the documents referred to in this Section 4.8 , collectively, the " Buyer SEC Documents "). Except as disclosed in Schedule 4.8 , the Buyer and Buyer’s officers and directors have timely filed all forms, reports and documents required to be filed by the Buyer pursuant to any relevant securities statutes, regulations and rules. None of the Buyer's Subsidiaries is subject to the periodic reporting requirements of the Securities Exchange Act or is otherwise required to file any forms, reports or registration statements with the SEC, any state or local securities regulatory agency.

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(b) As of its filing date, each Buyer SEC Document complied, and each such Buyer SEC Document filed subsequent to the date hereof will comply, as to form in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act, as the case may be.

(c) As of its filing date (or, if amended or superseded by a filing prior to the date hereof, on the date of such filing), each Buyer SEC Document filed did not, and each such Buyer SEC Document filed subsequent to the date hereof and prior to the Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

4.9 Financial Statements.

The Buyer has filed a Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2008 (the " Most Recent Fiscal Quarter End ") and an Annual Report on Form 10-K for the fiscal year ended January 31, 2008. The financial statements included in or incorporated by reference into these Buyer SEC Documents (including the related notes and schedules) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby and present fairly the financial condition of the Buyer as of the indicated dates and the results of operations of the Buyer for the indicated periods; provided, however, that the interim statements are subject to normal year-end adjustments.

4.10 Books and Records.

The books and records of the Buyer, in all material respects, (i) have been maintained in accordance with good business practices on a basis consistent with prior years, (ii) state in reasonable detail the material transactions and dispositions of the assets of the Buyer and (iii) accurately and fairly reflect the basis for the consolidated financial statements of the Buyer filed with the Buyer SEC Documents. The Buyer has (i) designed and maintains disclosure controls and procedures (as defined in the Securities Exchange Act) to ensure that material information relating to the Buyer is made known to management of the Buyer by others within those entities, in a timely manner, and that no changes are required at this time, and (ii) designed and maintains a system of internal control over financial reporting sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements, including that (A) transactions are executed in accordance with management's general or specific authorization; and (B) transactions are recorded as necessary (x) to permit preparation of consolidated financial statements in conformity with GAAP and (y) to maintain accountability of the assets of the Buyer. The management of the Buyer has disclosed, based on its most recent evaluation, to the Buyer's auditors and the Buyer's Board of Directors (i) all significant deficiencies in the design or operation of internal controls which could adversely affect the Buyer's ability to record, process, summarize and report financial data and have identified for the Buyer's auditors any material weaknesses in internal controls and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Buyer's internal controls. A summary of any such disclosure made by management to the Buyer's auditors and Board is set forth on Schedule 4.10 . There have been no significant changes in the Buyer's internal controls or in other factors that could significantly affect the Buyer's internal controls, or any significant deficiencies or material weaknesses in such internal controls requiring corrective actions.

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4.11 No Contravention.

Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which either the Buyer or the Transitory Subsidiary is subject or any provision of the charter or bylaws of either the Buyer or the Transitory Subsidiary or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which either the Buyer or the Transitory Subsidiary is a party or by which it is bound or to which any of its assets is subject. Other than in connection with the provisions of the Nevada Business Corporation Act, the Securities Exchange Act, the Securities Act, and the state securities laws, neither the Buyer nor the Transitory Subsidiary needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement.

4.12 Reporting Company Status.

Buyer files reports with the SEC pursuant to Section 12(g) of the Securities Exchange Act. The Buyer has a duly filed all material and documents required to be filed pursuant to all reporting obligations under either Section 13(a) or 12(g) of the Exchange Act.

4.13 No Injunctions.

Neither Buyer, nor any of its present officers or present directors have, during the past five (5) years, been the subject of any injunction, cease and desist order, assurance of discontinuance, suspension or restraining order, revocation or suspension of a license to practice a trade, occupation or profession, denial of an application to obtain or renew same, any stipulation or consent to desist from any act or practice, any disciplinary action by any court or administrative agency, nor has Buyer or any of its present officers or present directors knowingly violated any state or federal laws regulating the offering and sale of securities.

4.14 Antitakeover Statutes and Rights Agreement; Dissenters Rights.

The provisions of Sections 78.378 – 78.3793 and 78.411 – 78.444 of the Nevada Business Corporation Act do not apply to this Agreement, the Merger, or any of the transactions contemplated hereby and no other antitakeover or similar statute or regulation applies or purports to apply to any such transactions. No other "control share acquisition," "fair price," "moratorium" or other antitakeover laws or regulations enacted under U.S. state or federal laws apply to this Agreement, the Merger, or any of the transactions contemplated hereby. In addition, there are no available dissenters or appraisal rights for Buyer Security holders for the Merger or the transactions contemplated by this agreement .

4.15 Absence of Certain Changes.

Since the Most Recent Fiscal Quarter End, Buyer has conducted no operations and, except as disclosed to the Target in writing prior to the date hereof, there has not been:

(a) any event, occurrence, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on Buyer;

(b) any declaration, setting aside or payment of any dividend or other distribution with respect to any shares of capital stock of Buyer, or any repurchase, redemption or other acquisition by Buyer of any outstanding shares of capital stock or other securities of, or other ownership interests in, Buyer;

(c) any split, combination or reclassification of any capital stock of the Buyer or any issuance or the authorization of any issuance of any securities of the Buyer;

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(d) any amendment of any material term of any outstanding security of Buyer;

(e) any change in any method of accounting or accounting principles or practice by Buyer, except for any such change required by reason of a concurrent change in GAAP or Regulation S-X under the Securities Exchange Act; or

(f) any contract, agreement, arrangement or understanding by Buyer to do any of the things described in the preceding clauses (a) through (e).

4.16 Compliance with Laws and Court Orders.

Buyer is and has been in compliance with, and is not under investigation with respect to and has not been threatened to be charged with or given notice of any violation of, any applicable law, rule, regulation, judgment, injunction, order or decree, except for violations that would not reasonably be expected to be material to Buyer.

4.17 Tax Treatment.

Neither Buyer nor any of its Affiliates has taken or agreed to take any action, or is aware of any fact or circumstance, that would prevent the Merger from qualifying as a 368 Reorganization.

4.18 Litigation.

Except as set forth in Schedule 4.18 , there is no action, suit, investigation or proceeding (or any basis therefore) pending against, or threatened against or affecting, Buyer, any present or former officer, director or employee of Buyer or any Person for whom Buyer may be liable or any of its properties before any court or arbitrator or before or by any governmental body, agency or official, domestic, foreign or supranational, that, if determined or resolved adversely in accordance with the plaintiff's demands, would reasonably be expected to be material to Buyer or that in any manner challenges or seeks to prevent, enjoin, alter or materially delay the Merger or any of the other transactions contemplated hereby .

4.19 Agreements, Contracts and Commitments.

Neither Buyer nor any other party to a Buyer Contract (as defined below) is in breach, violation or default under, and Buyer has not received written notice that it has breached, violated or defaulted under, any of the terms or conditions of any of the agreements, contracts or commitments to which Buyer is a party or by which they are bound (any such agreement, contract or commitment, a " Buyer Contract "), except for breaches, violations or defaults that, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on Buyer.

4.20 Taxes.

(a) Except as set forth in Schedule 4.20 , the Buyer has filed or caused to be filed (on a timely basis since inception of the Buyer) all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of companies, pursuant to applicable Legal Requirements. Buyer has delivered to Target copies of all such Tax Returns filed since inception of the Buyer. The Buyer has paid all taxes that have become due pursuant to those Tax Returns or otherwise, or pursuant to any assessment received by Buyer, except such taxes, if any, as are listed in Schedule 4.20 and are being contested in good faith and as to which adequate reserves have been provided in the Buyer financial statements included in the Buyer SEC Documents.

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(b) The charges, accruals, and reserves with respect to taxes on the books of Buyer are adequate and are at least equal to Buyer's liability for taxes, other than the penalties set forth on Schedule 4.20 , which if assessed against Buyer following the Closing shall be the sole responsibility of Major Buyer Shareholders to pay in full. All taxes that Buyer is or was required by Legal Requirements to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Body or other Person.

(c) All Tax Returns filed by (or that include on a consolidated basis) Buyer are true, correct, and complete. There is no tax sharing agreement that will require any payment by Buyer after the date of this Agreement.

4.21 Relationships With Related Persons.

Except as set forth in Schedule 4.21 , no Related Person of Buyer has, or since inception of the Buyer has had, any interest in any property (whether real, personal, or mixed and whether tangible or intangible), used in or pertaining to the Buyer's business. No Related Person of Buyer is, or since inception of the Buyer has owned (of record or as a beneficial owner) an equity interest or any other financial or profit interest in, a Person that has (i) had business dealings or a material financial interest in any transaction with Buyer or is owned by Buyer, or (ii) engaged in competition with Buyer with respect to any line of the products or services of Buyer (a "Buyer Competing Business") in any market presently served by Buyer except for less than one percent of the outstanding capital stock of any Buyer Competing Business that is publicly traded on any recognized exchange or in the over-the-counter market. Except as set forth in Schedule 4.21 , no Related Person of Buyer is a party to any Contract with, or has any claim or right against, Buyer.

4.22 Disclosure.

(a) No representation or warranty of Buyer, Transitory Subsidiary or Major Buyer Shareholders in this Agreement omits to state a material fact necessary to make the statements herein or therein, in light of the circumstances in which they were made, not misleading.

(b) No notice given pursuant to Section 9.8 will contain any untrue statement or omit to state a material fact necessary to make the statements therein or in this Agreement, in light of the circumstances in which they were made, not misleading.

5.	COVENANTS.

The Parties agree as follows with respect to the period from and after the execution of this Agreement.

5.1 General.

Each of the Parties will use its best efforts to take all action and to do all things necessary in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 6 below).

5.2 Notices and Consents.

The Target will give any notices to third parties, and will use its best efforts to obtain any third party consents, that the Buyer may request in connection with the matters referred to in Section 3.4 above.

5.3 Regulatory Matters and Approvals.

Each of the Parties will give any notices to, make any filings with, and use its best efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies in connection with the matters referred to in Section 3.4 and Section 4.11 above. Without limiting the generality of the foregoing:

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(a) Securities Act, Securities Exchange Act, and State Securities Laws. Buyer and the Target will mutually prepare and file with the SEC any filings required under the Securities Exchange Act relating to the Merger. The filing Party in each instance will use its best efforts to respond to the comments of the SEC thereon and will make any further filings (including amendments and supplements) in connection therewith that may be necessary. The Buyer will provide the Target, and the Target will provide the Buyer, with whatever information and assistance in connection with the foregoing filings that the filing Party may request. The Target will take all actions that may be necessary under state securities laws in connection with the offering and issuance of the Buyer Securities.

(b) Target Special Meeting . The Target will call a special meeting of its shareholders (the "Target Special Meeting" ), or if permitted will obtain a Consent in Lieu of Meeting, as soon as practicable to consider and vote upon the adoption of this Agreement and the approval of the Merger in accordance with the Washington Business Corporation Act. The Target will mail the Target PPM to its shareholders as soon as practicable. The Target PPM will contain the affirmative recommendation of the board of directors of the Target in favor of the adoption of this Agreement and the approval of the Merger. Target shall use its best efforts and in good faith shall solicit the favorable vote by or consent of its shareholders concerning this Agreement and the Articles of Merger.

(c) Buyer Special Board Meeting . The Buyer will call a special meeting of its Board of Directors, or if permitted will obtain a Consent in Lieu of Meeting, as soon as practicable to approve this Agreement and the Merger.

(d) Buyer Special Meeting . The Buyer will call a special meeting of its shareholders (the "Buyer Special Meeting" ), or if permitted will obtain a Consent in Lieu of Meeting, as soon as practicable to approve the change of Buyer’s name to Iveda Corporation and a 1:2 reverse stock split.

(e) Buyer Information . Buyer shall furnish to Target all information concerning Buyer and Transitory Subsidiary required to be included in the Target PPM.

(f) Blue Sky Laws . Target shall comply with all applicable state securities laws relating to the distribution of Buyer Securities to holders of Target Securities pursuant to this Agreement.

5.4 Operation of Business.

Neither the Target, nor the Buyer nor its Subsidiaries shall engage in any practice, take any action, or enter into any transaction outside the Ordinary Course of Business. Without limiting the generality of the foregoing:

(a) other than as set forth in this Agreement, neither the Target, nor the Buyer nor its Subsidiaries will authorize or effect any change in its charter or bylaws;

(b) other than as set forth in this Agreement, neither the Target, nor the Buyer nor its Subsidiaries will grant any options, warrants, or other rights to purchase or obtain any of its capital stock or issue, sell, or otherwise dispose of any of its capital stock (except upon the conversion or exercise of options, warrants, and other rights currently outstanding and except for the grant by Target of options issued pursuant to Target's existing stock option plan);

(c) neither the Target, nor the Buyer nor its Subsidiaries will declare, set aside, or pay any dividend or distribution with respect to its capital stock (whether in cash or in kind), or, other than as set forth in this Agreement, redeem, repurchase, or otherwise acquire any of its capital stock;

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(d) neither the Target, nor the Buyer nor its Subsidiaries will issue any note, bond, or other debt security or create, incur, assume, or guarantee any indebtedness for borrowed money or capitalized lease obligation outside the Ordinary Course of Business;

(e) neither the Target, nor the Buyer nor its Subsidiaries will impose any Security Interest upon any of its assets outside the Ordinary Course of Business;

(f) neither the Target, nor the Buyer nor its Subsidiaries will make any capital investment in, make any loan to, or acquire the securities or assets of any other Person outside the Ordinary Course of Business; and

(g) other than as set forth in this Agreement, neither the Target, nor the Buyer nor its Subsidiaries will commit to any of the foregoing.

5.5 Full Access.

Each of the Parties will (and will cause each of its Subsidiaries to) permit representatives of the other Party to have full access to all premises, properties, personnel, books, records (including tax records), contracts, and documents of or pertaining to it and its Subsidiaries. Each of the Parties will treat and hold as such any Confidential Information it receives from the other Party in the course of the reviews contemplated by this Section 5.5 , will not use any of the Confidential Information except in connection with this Agreement, and, if this Agreement is terminated for any reason whatsoever, agrees to return to the other Party all tangible embodiments (and all copies) thereof which are in its possession as obtained from the other Party.

5.6 Notice of Developments.

Each Party will give prompt written notice to the others of any material adverse development causing a breach of any of its own representations and warranties in Section 3 and Section 4 above. No disclosure by any Party pursuant to this Section 5.6 , however, shall be deemed to amend or supplement the Disclosure Schedule or to prevent or cure any misrepresentation, breach of warranty, or breach of covenant.

5.7 Exclusivity.

The Target will not solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of all or substantially all of the capital stock or assets of the Target (including any acquisition structured as a merger, consolidation, or share exchange); provided, however, that the Target, and its directors and officers will remain free to participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing to the extent their fiduciary duties may require. The Target shall notify the Buyer immediately if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing.

6.	CONDITIONS TO OBLIGATION TO CLOSE.

6.1 Conditions to Obligation of the Buyer and the Transitory Subsidiary.

The obligation of the Buyer and the Transitory Subsidiary to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

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(a) this Agreement and the Merger shall have received the Requisite Shareholder Approval and the number of Dissenting Shares shall not exceed one percent (1%) of the number of outstanding Target Shares and Target Preferred Shares on an aggregate basis;

(b) the Target shall have procured all of the third party consents specified in Section 5.2 above;

(c) the representations and warranties set forth in Section 3 above shall be true and correct in all material respects at and as of the Closing Date;

(d) the Target shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

(e) no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) affect adversely the right of the Target to own the capital stock of the Surviving Corporation and to control the Surviving Corporation, or (D) affect adversely the right of the Surviving Corporation to own its assets and to operate its businesses (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

(f) the Major Buyer Shareholders shall have sold 5,000,000 Buyer Shares to Target as provided in the Stock Purchase Agreement attached hereto as Exhibit C ;

(g) the Target shall have delivered to the Buyer and the Transitory Subsidiary a certificate to the effect that each of the conditions specified above in Sections 6.1(a)-(f) is satisfied in all respects;

(h) the Buyer and the Transitory Subsidiary shall have received the resignations, effective as of the Closing, of each director and officer of the Target other than those set forth in the Articles of Merger as directors and officers of the Surviving Corporation;

(i) all actions to be taken by the Target in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be satisfactory in form and substance to the Buyer and the Transitory Subsidiary.

The Buyer and the Transitory Subsidiary may waive any condition specified in this Section 6.1 if they execute a writing so stating at or prior to the Closing.

6.2 Conditions to Obligation of the Target.

The obligation of the Target to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

(a) the representations and warranties set forth in Section 4 above shall be true and correct in all material respects at and as of the Closing Date;

(b) each of the Buyer and the Transitory Subsidiary shall have performed and complied with all of its covenants hereunder in all material respects through the Closing;

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(c) no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) affect adversely the right of the Target to own the capital stock of the Surviving Corporation and to control the Surviving Corporation, or (D) affect adversely the right of the Surviving Corporation to own its assets and to operate its businesses (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

(d) immediately prior to the Closing and following completion of the 1:2 reverse stock split, there shall not be greater than 845,000 shares of Common Stock, issued and outstanding of Buyer, and there shall not be any Buyer Derivative Securities outstanding.

(e) Buyer shall have no assets, liabilities or contingent liabilities as of the Closing Date;

(f) Buyer and Buyer’s officers and directors shall be current on all filings with the SEC required under the Securities Exchange Act;

(g) Buyer shall have adopted a stock option plan in the form attached hereto as Exhibit B with substantially similar terms to the existing Target stock option plan and shall have authorized warrants to purchase both preferred and common stock with substantially similar terms as the Target Warrants;

(h) Buyer shall have filed all Tax Returns that are or were required to be filed by or with respect to it, either separately or as a member of a group of companies, pursuant to applicable Legal Requirements, since inception of Buyer;

(i) each of the Buyer and the Transitory Subsidiary shall have delivered to the Target a certificate to the effect that each of the conditions specified above in Sections 6.2(a)-(h) is satisfied in all respects;

(j) this Agreement and the Merger shall have received the Requisite Shareholder Approval and the number of Dissenting Shares shall not exceed one percent (1%) of the number of outstanding Target Shares and Target Preferred Shares on an aggregate basis;

(k) the Target shall have received the resignations, effective as of the Closing, of each director and officer of Buyer and of the Transitory Subsidiary; and

(l) all actions to be taken by the Buyer and the Transitory Subsidiary in connection with consummation of the transactions contemplated hereby and all certificates, instruments, and other documents required to effect the transactions contemplated hereby will be satisfactory in form and substance to the Target.

The Target may waive any condition specified in this Section 6.2 if it executes a writing so stating at or prior to the Closing.

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7.	INDEMNIFICATION.

7.1 Indemnification.

Each of the Major Buyer Shareholders agrees to indemnify and hold Target and its officers, directors, and affiliates, including but not limited to Buyer and the Surviving Corporation (the “ Indemnitees ”) harmless against all claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys' fees and expenses of investigation (hereinafter individually a “ Loss ” and collectively “ Losses ”) incurred by Target, its officers, directors, or affiliates (including Buyer and the Surviving Corporation) directly or indirectly as a result of (i) any inaccuracy or breach of a representation or warranty of such Major Buyer Shareholder contained in this Agreement, (ii) any failure of such Major Buyer Shareholder to perform or comply with any covenant contained in this Agreement, or (iii) any failure of Buyer or any of the Major Buyer Shareholders to comply with all Legal Requirements in connection with Buyer's private offerings of securities prior to the Closing Date. The representations, warranties and covenants made by each Major Buyer Shareholder in this Agreement shall survive for a period expiring on the date that is twenty-four (24) months following the Closing (the " Survival Date ") and any action for a breach of a Major Buyer Shareholder's representations or warranties, the failure of a Major Buyer Shareholder to comply with a covenant hereunder or any Loss under this Section 7.1 must be made and filed by the Survival Date. Any claim for a breach of a Major Buyer Shareholder's representations or warranties, the failure of a Major Buyer Shareholder to comply with a covenant hereunder or any Loss under this Section 7.1 which is not made and filed by an Indemnitee prior to the Survival Date shall, from and after the Survival Date, be deemed to have been waived by such Indemnitee and rendered null and void and of no further force and effect.

7.2 Warranty of No Claims.

Buyer and Major Buyer Shareholders hereby represent and warrant, that to the best of their knowledge and belief, there is no known past condition or set of facts relating to the executive officers and directors of Buyer which will give rise to any claims, demands, obligations, actions or causes of action, of any nature whatsoever, which a party may now have, or which may hereafter accrue or otherwise be acquired, arising out of tort, contract, securities, or other theories of liability related to the duties and obligations imposed upon the executive officers and directors of Buyer.

7.3 Indemnity Procedure.

Within 15 days after service upon an indemnified party of a summons or other first legal process in connection with the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7 , notify the indemnifying party in writing of the commencement thereof; the omission to notify the indemnifying party will relieve it from any liability which it may have to any indemnified party under this Section (but not otherwise) if the indemnifying party proves that it has been materially prejudiced by such omission. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate in and, to the extent that it may wish, jointly with any other indemnifying party, similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation.

7.4 Payment .

Each Loss that the Major Buyer Shareholders are liable to indemnify for pursuant to this Section 7 shall be paid by reducing the amount then owed by Target to the Major Buyer Shareholders under the Stock Purchase Agreement attached as Exhibit C dollar for dollar for each Loss. In the event that the no amounts are then owed to Major Buyer Shareholders under the Stock Purchase Agreement, or in the event that the amount of a Loss is in excess of the amounts then owed to Major Buyer Shareholders under the Stock Purchase Agreement, the amount of the Loss shall be paid in cash to the indemnified party by the Major Buyer Shareholders.

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8.	TERMINATION.

8.1 Termination of Agreement.

Any of the Parties may terminate this Agreement with the prior authorization of its board of directors (whether before or after shareholder approval) as provided below:

(a) the Parties may terminate this Agreement by mutual written consent at any time prior to the Effective Time;

(b) the Buyer and the Transitory Subsidiary may terminate this Agreement by giving written notice to the Target at any time prior to the Effective Time (A) in the event the Target has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, the Buyer or the Transitory Subsidiary has notified the Target of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (B) if the Closing shall not have occurred on or before February 28, 2009, by reason of the failure of any condition precedent under Section 6.1 hereof (unless the failure results primarily from the Buyer or the Transitory Subsidiary breaching any representation, warranty, or covenant contained in this Agreement);

(c) the Target may terminate this Agreement by giving written notice to the Buyer and the Transitory Subsidiary at any time prior to the Effective Time (A) in the event the Buyer or the Transitory Subsidiary has breached any material representation, warranty, or covenant contained in this Agreement in any material respect, the Target has notified the Buyer and the Transitory Subsidiary of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (B) if the Closing shall not have occurred on or before February 28, 2009, by reason of the failure of any condition precedent under Section 6.2 hereof (unless the failure results primarily from the Target breaching any representation, warranty, or covenant contained in this Agreement) or (C) if the number of Dissenting Shares exceeds one percent (1%) of the number of outstanding Target Shares and Target Preferred Shares on an aggregate basis; or

(d) any Party may terminate this Agreement by giving written notice to the other Parties at any time after the Target Special Meeting in the event this Agreement and the Merger fail to receive the Requisite Shareholder Approval.

8.2 Effect of Termination.

If any Party terminates this Agreement pursuant to Section 8.1 above, all rights and obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party (except for any liability of any Party then in breach).

9.	MISCELLANEOUS.

9.1 Survival.

Each of the representations, warranties, and covenants of the Parties shall survive the Effective Time by two years.

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9.2 Press Releases and Public Announcements.

No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing Party will use its best efforts to advise the other Party prior to making the disclosure).

9.3 No Third-Party Beneficiaries.

This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns; provided, however, that the provisions in Section 2 above concerning payment of the Merger Consideration are intended for the benefit of the Target Securityholders.

9.4 Entire Agreement.

This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they related in any way to the subject matter hereof.

9.5 Succession and Assignment.

This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Parties.

9.6 Counterparts.

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

9.7 Headings.

The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

9.8 Notices.

All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient as set forth below:

	If to the Target:		IntelaSight, Inc.
			1201 S. Alma School Rd.
			Suite 4450
			Mesa, AZ 85210
			Attn: David Ly

	Copy to:		Stephen R. Boatwright, Esq.
			Keller Rohrback, PLC
			3101 North Central Avenue, Suite 1400
			Phoenix, Arizona 85012-2600

A-31

	If to the Buyer:		Charmed Homes Inc.
			60 Mount Kidd Point S.E.
			Calgary, Alberta
			T2Z 3C5
			Attn: Ian Quinn

	Copy to:		Conrad C. Lysiak, Esq.
			601 West First Avenue, Suite 903
			Spokane, Washington 99201

	If to the Transitory Subsidiary:		Charmed Homes Subsidiary, Inc.
			60 Mount Kidd Point S.E.
			Calgary, Alberta
			T2Z 3C5
			Attn: Ian Quinn

	Copy to:		Conrad C. Lysiak, Esq.
			601 West First Avenue, Suite 903
			Spokane, Washington 99201

Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

9.9 Governing Law.

This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Nevada.

9.10 Amendments and Waivers.

The Parties may mutually amend any provision of this Agreement at any time prior to the Effective Time with the prior authorization of their respective boards of directors; provided, however, that any amendment effected subsequent to shareholder approval will be subject to the restrictions contained in the Washington Business Corporation Act and Nevada Business Corporation Act. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all of the Parties. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

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9.11 Severability.

Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

9.12 Expenses.

Each of the Parties will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

9.13 Construction.

The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context otherwise requires. The word “including” shall mean including without limitation.

9.14 Incorporation of Exhibits and Schedules.

The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof.

9.15 Separate Counsel.

Each of the parties warrant and confirm that Keller Rohrback, PLC has only represented Target in connection with this Agreement and the transactions referenced herein or contemplated hereby. Keller Rohrback has not represented any of the Buyer, Transitory Subsidiary, or Major Buyer Shareholders. Buyer and Transitory Subsidiary were represented by Conrad Lysiak, Esq. The parties stipulate and agree that, in entering into this Agreement, they have relied upon the advice and representation of counsel and other advisors selected by them or have waived the right to do so. Each of the Buyer, Transitory Subsidiary and Major Buyer Shareholders particularly stipulate and agree that they and their counsel and advisors have not received and are not relying on any representations or warranty from any person or entity retained or employed by Target in connection with their entry into this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

	CHARMED HOMES INC.

	By:	/s/ Ian Quinn
		Ian Quinn, CEO

	CHARMED HOMES SUBSIDIARY, INC.

	By:	/s/ Ian Quinn
		Ian Quinn, CEO

	INTELASIGHT, INC.

	By:	/s/ David Ly
		David Ly, CEO

	MAJOR BUYER SHAREHOLDERS

	/s/ Ian Quinn
	Ian Quinn

	/s/ Kevin Liggins
	Kevin Liggins

A-34

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.

F-34

INTELASIGHT, INC. DBA

IVEDA SOLUTIONS

(A WASHINGTON CORPORATION)

NOTES TO THE FINANCIAL STATEMENTS

(UNAUDITED)

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.

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, 2009 $			January 31, 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, 2009 $			January 31, 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:

Year Incurred	Amount $		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.

II-1

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.

II-2

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.

II-3

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.

2.2##		Waiver of Closing Condition dated August 3, 2009 by 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)

II-4

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/A1 on 7/15/2009

*****		Incorporated by Reference filed in Form S-4 on 5/15/2009

#		Incorporated by reference filed in Form S-4/A1 on 7/10/2009

##		Filed herewith

II-5

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:

II-6

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

ii Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

iii The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

iv. Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(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.

II-7

(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.

II-8

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 2 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 August 5, 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,	August 5, 2009
Ian Quinn	Principal Financial Officer and Principal Accounting Officer)

/s/ Kevin Liggins	Secretary and Director	August 5, 2009
Kevin Liggins

II-9

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.

2.2##		Waiver of Closing Condition dated August 3, 2009 by 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)

II-10

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/A1 on 7/15/2009

*****		Incorporated by Reference filed in Form S-4 on 5/15/2009

#		Incorporated by reference filed in Form S-4/A1 on 7/10/2009

##		Filed herewith

II-11

Nevada		1531
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)

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 as a group (2 individuals)		5,000,000		74.74	%

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

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

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		9,036,800	$	1.00	$	9,036,800	$	504.25

Stock Options		1,195,229	$	1.00	$	1,195,229	$	66.69

Warrants		559,278	$	1.00	$	559,278	$	31.21

Common Stock issuable upon exercise of stock options and warrants		1,754,507	$	1.00	$	1,754,507	$	97.90

Total							$	700.05


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


	•	the number of shares of our common stock issued and outstanding would be reduced from 6,690,000 shares to 3,345,000 shares; and


	•	the number of authorized shares of our common stock would remain at 100 million shares.


	•	If you are entitled to post-reverse stock split shares, a transaction statement will automatically be sent to your address of record indicating the number of shares you hold.


	•	The shares of post-reverse stock split common stock in the hands of a shareholder will have an aggregate basis for computing gain or loss on a subsequent disposition equal to the aggregate basis of the shares of pre-reverse split common stock held by the shareholder immediately prior to the reverse stock split.


	•	A shareholder's holding period for the post-reverse stock split common stock will include the holding period of the pre-reverse split common stock exchanged.

Name	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

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		36.27	%		33.64	%
Luz Berg (3)	Senior VP, Secretary		0		922,183		8.55	%		7.93	%
Bob Brilon (3)	CFO		0		200,000		1.85	%		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		4.23	%		3.92	%
Greg Omi (3)	Director		903,859		0		8.38	%		7.77	%
Jody Bisson (3)	Director		0		50,000		0.46	%		0.43	%
All directors and officers as a group			5,017,857		1,528,323		60.66	%		56.26	%

President/CEO	David Ly
CFO/Treasurer Secretary/Senior VP	Bob Brilon Luz Berg

Charmed Homes Subsidiary, Inc., a Nevada corporation

By:
	Ian Quinn, President

If to the Sellers:	Ian Quinn and Kevin Liggins
	60 Mt. Kidd Point SE
	Calgary, AB T223C5
	Canada

If to the Buyer:	IntelaSight, Inc.
	Attn: David Ly, CEO
	1201 S. Alma School Rd.
	Suite 4450
	Mesa, AZ 85210

	BUYER:
	IntelaSight, Inc.

	By:
	David Ly, CEO

	SELLERS:


	Ian Quinn


	Kevin Liggins

	COMPANY:
	Charmed Homes Inc.

	By:
	Ian Quinn, CEO

23B.13.010	Definitions.
23B.13.020	Right to dissent.
23B.13.030	Dissent by nominees and beneficial owners.
23B.13.200	Notice of dissenters' rights.
23B.13.210	Notice of intent to demand payment.
23B.13.220	Dissenters' rights — Notice.
23B.13.230	Duty to demand payment.
23B.13.240	Share restrictions.
23B.13.250	Payment.
23B.13.260	Failure to take action.
23B.13.270	After-acquired shares.
23B.13.280	Procedure if shareholder dissatisfied with payment or offer.
23B.13.300	Court action.
23B.13.310	Court costs and counsel fees.