Nevada
|
000-53285
|
98-0611159
|
(State or other jurisdiction
|
(Commission
|
(IRS Employer
|
of incorporation)
|
File Number)
|
Identification No.)
|
Item
1.01.
|
Entry
Into a Material Definitive
Agreement
|
Item
2.01.
|
Completion
of Acquisition or Disposition of
Assets
|
|
o
|
Business
– see the sections of the Information Statement entitled "Information
About Charmed – Description of Business" on page 48 and "Information About
Iveda" beginning on page 54.
|
|
o
|
Risk
Factors – see the section of the Information Statement entitled "Risk
Factors" beginning on page 20.
|
|
o
|
Financial
Information – see the section of the Quarterly Report entitled
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" beginning on page 11; as a smaller reporting company, the
Company is not required to provide the additional financial information
required by Items 301 and 305 of Regulation
S-K.
|
|
o
|
Properties
– see the sections of the Information Statement entitled "Information
About Charmed – Description of Property" on page 48 and "Information About
Iveda - Property" on page 67.
|
|
o
|
Directors
and Executive Officers – see the section of the Information Statement
entitled "Information About Iveda – Management" beginning on page 76 and
the section of the Schedule 14F entitled "Information Concerning the
IntelaSight Designees to our Board of Directors" on page
3.
|
|
o
|
Executive
Compensation – see the sections of the Information Statement entitled
"Information About Charmed – Management Contracts" on page 53,
"Information About Charmed – Executive Compensation" on page 53,
"Information About Iveda – Executive Compensation" on page 79, and
"Information About Iveda – Director Compensation" on page 79, and the
section of the Schedule 14F entitled "Executive Compensation" on page
5.
|
|
o
|
Certain
Relationships and Related Transactions, and Director Independence – see
the sections of the Information Statement entitled "Information About
Charmed – Certain Relationships and Related Transactions of Charmed" on
page 53 and "Information About Iveda – Certain Relationships and Related
Transactions" on page 80, and the sections of the Schedule 14F entitled
"Board of Directors' Committees and Corporate Governance" on page 4 and
"Certain Relationships and Related Transactions" on page
5.
|
|
o
|
Legal
Proceedings – see the sections of the Information Statement entitled
"Information About Charmed – Legal Proceedings" on page 48 and
"Information About Iveda – Legal Matters" on page 68, and the section of
the Schedule 14F entitled "Legal Proceedings" on page
3.
|
|
o
|
Description
of Registrant's Securities – see the section of the Information Statement
entitled "Comparison of Shareholder Rights" beginning on page
81.
|
|
o
|
Indemnification
of Directors and Officers – see the sections of the Information Statement
entitled "Information About Charmed – Disclosure of Commission Position on
Indemnification for Securities Act Liabilities" on page 52, "Information
About Iveda – Indemnification of Directors and Officers" on page 80,
"Comparison of Shareholder Rights – Limitation of Director's Liability" on
page 87 and "Comparison of Shareholder Rights – Indemnification of
Directors and Officers" on page 87.
|
|
o
|
Financial
Statements and Supplementary Data – see the section of the Quarterly
Report entitled "Financial Statements" beginning on page
2.
|
|
o
|
Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure – see the section of the Information Statement entitled
"Information About Charmed – Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure" on page
52.
|
|
o
|
Exhibits
– see the Exhibit Index to the Information
Statement.
|
|
·
|
A
private placement memorandum was prepared to raise an additional
$2,500,000 of equity. As of June 30, 2009, $736,000 was still to be
raised.
|
|
·
|
Establish
distributor networks with existing companies to create a reseller network
to increase the scope of IntelaSight's marketing activities with low cost
to IntelaSight.
|
|
·
|
IntelaSight
has entered into a merger agreement with a public shell
company.
|
Year
Ending December 31,
|
||||
2009
|
$ | 173,862 | ||
2010
|
$ | 177,523 | ||
2011
|
$ | 121,838 | ||
Total
|
$ | 473,223 |
Name
|
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
|
3,836,181 | 0 | 35.57 | % | 32.99 | % | ||||||||||
Luz
Berg (3)
|
COO,
Secretary
|
77,817 | 922,183 | 9.27 | % | 8.60 | % | ||||||||||
Bob
Brilon (3)
|
Interim
CFO, Treasurer
|
0 | 200,000 | 1.85 | % | 1.72 | % | ||||||||||
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
|
4,817,857 | 1,172,183 | 55.55 | % | 51.51 | % |
(1)
|
Reflects
ownership of securities in IntelaSight by the listed individuals and group
immediately prior to the closing of the Merger and assumes all of the
outstanding IntelaSight options and warrants to purchase shares of common
stock are exercised.
|
(2)
|
Based
on ownership of Iveda following the Merger and assumes that all of the
outstanding options and warrants to purchase shares of Iveda common stock
are exercised, and the 2.5 million shares of post-reverse split Iveda
common stock sold to IntelaSight prior to the Merger and held in escrow
are cancelled.
|
(3)
|
The address for each of these
individuals is c/o Iveda Corporation, 1201 S. Alma School Road, Suite
4450, Mesa, AZ 85210.
|
2009
|
High Bid
|
Low Bid
|
||||||
Third
Quarter 7-1-09 to 9-30-09
|
$ | 1.90 | $ | 1.55 | ||||
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 |
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights (#)
|
Weighted-average
exercise price of
outstanding options,
warrants and rights ($)
|
Number of securities
remaining available for
future issuance under equity
compensation plans
|
|||||||||
Equity
compensation plans approved by shareholders
|
N/A | N/A | N/A | |||||||||
Equity
compensation plans not approved by shareholders
|
1,187,729 | $ | 0.37 | 312,271 | ||||||||
Total
|
1,187,729 | $ | 0.37 | 312,271 |
Item
5.02.
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers
|
Item
5.03.
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
Item
5.06.
|
Change
in Shell Company Status
|
Item
8.01.
|
Other
Events
|
Item 9.01.
|
Financial
Statements and Exhibits
|
(d)
|
Exhibits
|
Exhibit
|
|
Description
|
2.1
|
Merger
Agreement, dated January 8, 2009 by and among Charmed Homes Inc., Charmed
Homes Subsidiary, Inc., certain shareholders and IntelaSight, Inc.,
incorporated by reference, filed with the Form 8-K/A1 on
7/15/2009.
|
|
2.3
|
Articles
of Merger, filed with the Nevada Secretary of State on October 15, 2009,
filed herewith.
|
|
2.4
|
Articles
of Merger, filed with the Washington Secretary of State on October 15,
2009, filed herewith.
|
|
3.4
|
Amendment
to the Articles of Incorporation, filed with the Nevada Secretary of State
on September 9, 2009, filed herewith.
|
|
4.4
|
2009
Stock Option Plan, dated October 15, 2009, filed
herewith.
|
|
4.5
|
Form
of Common Stock Purchase Warrant issued by Iveda Corporation in
conjunction with the Merger, filed herewith.
|
|
10.10
|
Stock
Purchase Agreement, dated October 15, 2009, by and among Iveda
Corporation, IntelaSight, Inc., Ian Quinn and Kevin Liggins, filed
herewith.
|
|
23.1
|
Consent
of Eide Bailly, LLP dated October 20, 2009, filed
herewith.
|
Iveda
Corporation, a Nevada corporation
|
|
By:
|
/s/ David Ly
|
David
Ly, CEO
|
2008
|
2007
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and Cash Equivalents
|
$ | 335,189 | $ | 41,344 | ||||
Accounts
Receivable
|
26,971 | 20,497 | ||||||
Prepaid
Expenses
|
11,532 | 4,767 | ||||||
Inventory
|
13,530 | - | ||||||
Total
Current Assets
|
387,222 | 66,608 | ||||||
PROPERTY
AND EQUIPMENT
|
||||||||
Office
Equipment
|
87,050 | 75,560 | ||||||
Furniture
and Fixtures
|
22,712 | 13,948 | ||||||
Software
|
36,634 | 16,244 | ||||||
Leased
Equipment
|
213,460 | 3,813 | ||||||
Leasehold
Improvements
|
34,495 | 9,562 | ||||||
Total
Property and Equipment
|
394,351 | 119,127 | ||||||
Less:
Accumulated Depreciation
|
99,099 | 50,037 | ||||||
Property
and Equipment, Net
|
295,252 | 69,090 | ||||||
OTHER
ASSETS
|
||||||||
Deferred
Income Taxes
|
- | 558,370 | ||||||
Escrow
Deposits
|
50,000 | |||||||
Deposits
|
16,523 | 2,293 | ||||||
Total
Assets
|
$ | 748,997 | $ | 696,361 |
2008
|
2007
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Current
Portion of Capital Lease Obligations
|
$ | 65,916 | $ | 1,043 | ||||
Notes
Payable
|
- | 100,000 | ||||||
Accounts
Payable
|
48,465 | 45,573 | ||||||
Deferred
Revenue
|
21,964 | - | ||||||
Billings
in Excess of Costs and Estimated Earnings on Uncompleted
Contracts
|
- | 12,805 | ||||||
Accrued
Expenses
|
70,285 | 47,898 | ||||||
Total
Current Liabilities
|
206,630 | 207,319 | ||||||
LONG-TERM
LIABILITIES
|
||||||||
Capital
Lease Obligations, Net of Current Portion
|
117,162 | 2,725 | ||||||
Total
Liabilities
|
323,792 | 210,044 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
Stock, $0.001 par value; 40,000,000 shares authorized; 8,774,304 and
4,989,743 shares issued and outstanding, as of December 31, 2008
and 2007, respectively.
|
8,774 | 4,990 | ||||||
Preferred
Stock, $0.001 par value; 10,000,000 shares authorized; -0- and
853,275 shares issued and outstanding, as of December 31, 2008
and 2007, respectively.
|
- | 853 | ||||||
Additional
Paid-In Capital
|
3,385,251 | 1,348,497 | ||||||
Accumulated
Deficit
|
(2,968,820 | ) | (868,023 | ) | ||||
Total
Stockholders' Equity
|
425,205 | 486,317 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 748,997 | $ | 696,361 |
2008
|
2007
|
|||||||
REVENUE
|
$ | 506,285 | $ | 544,259 | ||||
COST
OF REVENUE
|
357,184 | 306,949 | ||||||
GROSS
PROFIT
|
149,101 | 237,310 | ||||||
OPERATING
EXPENSES
|
1,661,718 | 701,135 | ||||||
LOSS
FROM OPERATIONS
|
(1,512,617 | ) | (463,825 | ) | ||||
OTHER
INCOME (EXPENSE)
|
||||||||
Interest
Income
|
5,994 | - | ||||||
Interest
Expense
|
(35,804 | ) | (1,164 | ) | ||||
Total
Other Income (Expense)
|
(29,810 | ) | (1,164 | ) | ||||
LOSS
BEFORE INCOME TAXES
|
(1,542,427 | ) | (464,989 | ) | ||||
BENEFIT
(PROVISION) FOR INCOME TAXES
|
(558,370 | ) | 182,670 | |||||
NET
LOSS
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
BASIC
LOSS PER SHARE
|
$ | (0.30 | ) | $ | (0.04 | ) | ||
DILUTED
LOSS PER SHARE
|
$ | (0.30 | ) | $ | (0.04 | ) |
Common Stock
|
Preferred Stock
|
Additional Paid-In Capital
|
Accumulated
|
|||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Common
|
Preferred
|
Deficit
|
Total
|
|||||||||||||||||||||||||
BALANCE
AT DECEMBER 31, 2006
|
6,330,000 | 6,330 | 785,011 | 785 | 66,275 | 972,905 | (585,704 | ) | 460,591 | |||||||||||||||||||||||
Stock
Relinquished
|
(1,423,002 | ) | (1,423 | ) | - | - | 1,423 | - | - | - | ||||||||||||||||||||||
Stock
Based Compensation
|
- | - | - | - | 29,209 | - | - | 29,209 | ||||||||||||||||||||||||
Stock
Options Exercised
|
82,745 | 83 | - | - | 8,192 | - | - | 8,275 | ||||||||||||||||||||||||
Net
Loss
|
- | - | - | - | - | - | (282,319 | ) | (282,319 | ) | ||||||||||||||||||||||
Preferred
Stock Issued
|
- | - | 68,264 | 68 | - | 274,932 | - | 275,000 | ||||||||||||||||||||||||
Costs
of Capital
|
- | - | - | - | - | (4,439 | ) | - | (4,439 | ) | ||||||||||||||||||||||
BALANCE
AT DECEMBER 31, 2007
|
4,989,743 | 4,990 | 853,275 | 853 | 105,099 | 1,243,398 | (868,023 | ) | 486,317 | |||||||||||||||||||||||
Common
Stock Issued
|
1,629,000 | 1,629 | - | - | 1,427,371 | - | - | 1,429,000 | ||||||||||||||||||||||||
Stock
Based Compensation
|
- | - | - | - | 222,892 | - | - | 222,892 | ||||||||||||||||||||||||
Preferred
Stock Converted to Common
|
1,307,347 | 1,307 | (853,275 | ) | (853 | ) | 1,242,944 | (1,243,398 | ) | - | - | |||||||||||||||||||||
Debt
Converted to Common Stock
|
848,214 | 848 | - | - | 574,147 | - | - | 574,995 | ||||||||||||||||||||||||
Net
Loss
|
- | - | - | - | - | - | (2,100,797 | ) | (2,100,797 | ) | ||||||||||||||||||||||
Costs
of Capital
|
- | - | - | - | (187,202 | ) | - | - | (187,202 | ) | ||||||||||||||||||||||
BALANCE
AT DECEMBER 31, 2008
|
8,774,304 | $ | 8,774 | - | $ | - | $ | 3,385,251 | $ | - | $ | (2,968,820 | ) | $ | 425,205 |
2008
|
2007
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
Loss
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
Adjustments
to Reconcile Net Loss to Net Cash Used by Operating
Activities
|
||||||||
Depreciation
|
49,063 | 24,735 | ||||||
Interest
Expense Converted to Equity
|
24,079 | - | ||||||
Stock
Compensation
|
222,892 | 29,209 | ||||||
Deferred
Tax Provision (Benefit)
|
558,370 | (182,670 | ) | |||||
(Increase)
Decrease in Operating Assets:
|
||||||||
Accounts
Receivable
|
(6,474 | ) | 19,905 | |||||
Prepaid
Expense
|
(6,765 | ) | 1,440 | |||||
Inventory
|
(13,530 | ) | - | |||||
Deposits
|
(14,230 | ) | - | |||||
Increase
(Decrease) in Operating Liabilities:
|
||||||||
Accounts
Payable
|
2,892 | 8,803 | ||||||
Accrued
Expenses
|
23,303 | 9,968 | ||||||
Deferred
Revenue
|
21,964 | - | ||||||
Billings
in Excess of Costs and Estimated Earnings on
|
||||||||
Uncompleted
Contracts
|
(12,805 | ) | 12,805 | |||||
Net
Cash Used by Operating Activities
|
(1,252,038 | ) | (358,124 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Escrow
Deposits
|
(50,000 | ) | - | |||||
Purchase
of Property and Equipment
|
(65,579 | ) | (24,582 | ) | ||||
Net
Cash Used by Investing Activities
|
(115,579 | ) | (24,582 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds
from Short-Term Borrowings
|
450,000 | 100,000 | ||||||
Payments
on Capital Lease Obligations
|
(30,336 | ) | (45 | ) | ||||
Preferred
Stock Issued, net of Costs of Capital
|
- | 270,561 | ||||||
Common
Stock Issued, net of Costs of Capital
|
1,241,798 | 8,275 | ||||||
Net
Cash Provided by Financing Activities
|
1,661,462 | 378,791 | ||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
293,845 | (3,915 | ) | |||||
Cash
and Cash Equivalents - Beginning of Year
|
41,344 | 45,259 | ||||||
CASH
AND CASH EQUIVALENTS - END OF YEAR
|
$ | 335,189 | $ | 41,344 | ||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Short-Term
Debt Converted to Preferred Stock
|
$ | 574,995 | $ | - | ||||
Interest
Paid
|
$ | 11,725 | $ | 1,164 | ||||
Property
and Equipment Purchased via Capital Lease
|
$ | 209,646 | $ | 3,813 |
NOTE 1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING
POLICIES
|
|
·
|
A
private placement memorandum was prepared to raise an additional
$2,500,000 of equity. As of December 31, 2008, $1,271,000 was still to be
raised.
|
|
·
|
Establish
distributor networks with existing companies to create a reseller network
to increase the scope of the Company’s marketing activities with low cost
to the Company.
|
|
·
|
The
Company may evaluate and consider merger and/or acquisition
activities.
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE 1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE 1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
1
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
|
NOTE
2
|
ESCROW
DEPOSITS
|
NOTE
3
|
ACCRUED
EXPENSES
|
NOTE
4
|
COSTS,
ESTIMATED EARNINGS AND BILLINGS ON CONTRACTS IN
PROCESS
|
2007
|
||||
Costs
Incurred on Uncompleted Projects
|
$ | 24,082 | ||
Estimated
Gross Profit
|
5,431 | |||
Contract
Revenues Earned
|
29,513 | |||
Less:
Billings to Date
|
42,318 | |||
Total
|
$ | (12,805 | ) |
2007
|
||||
Costs
and Estimated Earnings in Excess of
|
||||
Billings
on Uncompleted Contracts
|
$ | - | ||
Billings
in Excess of Costs and Estimated
|
||||
Earnings
on Uncompleted Contracts
|
(12,805 | ) | ||
Total
|
$ | (12,805 | ) |
NOTE
5
|
NOTES
PAYABLE
|
NOTE
6
|
OBLIGATIONS
UNDER CAPITAL LEASES
|
Year Ending December 31,
|
||||
2009
|
$ | 88,888 | ||
2010
|
88,807 | |||
2011
|
43,028 | |||
Total
Minimum Lease Payments
|
220,723 | |||
Less:
Interest
|
37,645 | |||
Total
Principal
|
183,078 | |||
Less:
Current Portion
|
65,916 | |||
Long-Term
Capital Lease
|
$ | 117,162 |
NOTE
7
|
OPERATING
LEASES
|
Year
Ending December 31,
|
||||
2009
|
$ | 173,862 | ||
2010
|
$ | 177,523 | ||
2011
|
$ | 121,838 | ||
Total
|
$ | 473,223 |
NOTE
8
|
SERIES
A AND A-1, CONVERTIBLE PREFERRED
STOCK
|
NOTE
9
|
STOCK
OPTION PLAN
|
2008
|
2007
|
|||||||||||||||
Weighted
-
|
Weighted
-
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Exercise
|
Exercise
|
|||||||||||||||
Shares
|
Price
|
Shares
|
Price
|
|||||||||||||
Outstanding
at Beginning of Year
|
406,267 | $ | 0.10 | 653,157 | $ | 0.10 | ||||||||||
Granted
|
795,712 | 0.52 | 93,245 | 0.10 | ||||||||||||
Exercised
|
- | - | (82,745 | ) | 0.10 | |||||||||||
Forfeited
or Canceled
|
(1,250 | ) | 0.10 | (257,390 | ) | 0.10 | ||||||||||
Outstanding
at End of Year
|
1,200,729 | 0.38 | 406,267 | 0.10 | ||||||||||||
Options
Exercisable at Year-End
|
883,375 | 0.19 | 360,686 | 0.10 | ||||||||||||
Weighted-Average
Fair Value of
|
||||||||||||||||
Options
Granted During the Year
|
$ | 0.41 | $ | 0.09 |
Options Outstanding
|
Options Exercisable
|
||||||||||||||||
Number
|
Weighted
-
|
Number
|
|||||||||||||||
Outstanding
|
Average
|
Weighted
-
|
Exercisable
|
Weighted
-
|
|||||||||||||
Range
of
|
at
|
Remaining
|
Average
|
at
|
Average
|
||||||||||||
Exercise
|
December
31,
|
Contractual
|
Exercise
|
December
31,
|
Exercise
|
||||||||||||
Prices
|
2008
|
Life
|
Price
|
2008
|
Price
|
||||||||||||
$0.10
- $1.00
|
1,200,729 |
9
Years
|
$ | 0.38 | 883,375 | $ | 0.19 |
Employee
|
Non-Employee
|
|||||||||||
Options
|
Options
|
|||||||||||
2008
|
2007
|
2007
|
||||||||||
Expected
Life
|
4.6
Years
|
10
Years
|
10
Years
|
|||||||||
Dividend
Yield
|
0 | % | 0 | % | 0 | % | ||||||
Expected
Volatility
|
42 | % | 82 | % | 82 | % | ||||||
Risk-Free
Interest Rate
|
3.75 | % | 4.75 | % | 4.75 | % |
NOTE
10
|
STOCK
WARRANTS
|
2008
|
2007
|
|||||||||||||||
Weighted
-
|
Weighted
-
|
|||||||||||||||
Average
|
Average
|
|||||||||||||||
Redemption
|
Redemption
|
|||||||||||||||
Shares
|
Price
|
Shares
|
Price
|
|||||||||||||
Outstanding
at Beginning of Year
|
509,278 | $ | 0.10 | 268,947 | $ | 0.10 | ||||||||||
Issued
|
50,000 | 1.00 | 240,331 | 0.10 | ||||||||||||
Outstanding
at End of Year
|
559,278 | 0.18 | 509,278 | 0.10 | ||||||||||||
Warrants
Redeemable at End of Year
|
521,778 | 0.12 | 499,671 | 0.10 | ||||||||||||
Weighted-Average
Fair Value of
|
||||||||||||||||
Warrants
Issued During the Year
|
$ | 0.41 | $ | 0.09 |
Warrants Outstanding
|
Warrants Redeemable
|
||||||||||||||||
Number
|
Weighted
-
|
Number
|
|||||||||||||||
Outstanding
|
Average
|
Weighted
-
|
Redeemable
|
Weighted
-
|
|||||||||||||
Range
of
|
at
|
Remaining
|
Average
|
at
|
Average
|
||||||||||||
Exercise
|
December
31,
|
Contractual
|
Redemption
|
December
31,
|
Redemption
|
||||||||||||
Prices
|
2008
|
Life
|
Price
|
2008
|
Price
|
||||||||||||
$0.10
- $1.00
|
559,278 |
8
Years
|
$ | 0.19 | 521,778 | $ | 0.12 |
2008
|
2007
|
|||||||
Expected
Life
|
4.6
Years
|
10
Years
|
||||||
Dividend
Yield
|
0 | % | 0 | % | ||||
Expected
Volatility
|
42 | % | 82 | % | ||||
Risk-Free
Interest Rate
|
3.00 | % | 4.75 | % |
NOTE
11
|
INCOME
TAXES
|
2008
|
2007
|
|||||||
Deferred
Income Tax (Provision) Benefit
|
$ | (558,370 | ) | $ | 182,670 |
2008
|
2007
|
|||||||
Tax
Operating Loss Carryforward
|
$ | 1,115,000 | $ | 562,000 | ||||
Accelerated
Depreciation
|
(13,330 | ) | (3,630 | ) | ||||
Valuation
Allowance
|
(1,101,670 | ) | - | |||||
$ | - | $ | 558,370 |
2008
|
2007
|
|||||||
Total
Deferred Tax Assets
|
$ | 1,115,000 | $ | 562,000 | ||||
Total
Deferred Tax (Liability)
|
(13,330 | ) | (3,630 | ) | ||||
Valuation
Allowance
|
(1,101,670 | ) | - | |||||
Deferred
Tax Asset
|
$ | - | $ | 558,370 |
2008
|
2007
|
|||||||
Noncurrent
Deferred Income Tax Asset
|
$ | 1,101,670 | $ | 558,370 | ||||
Valuation
Allowance
|
(1,101,670 | ) | - | |||||
$ | - | $ | 558,370 |
Year Ending
|
Net Operating
|
Year of
|
|||
December 31,
|
Loss:
|
Expiration:
|
|||
2008
|
$ | 1,308,000 |
2028
|
||
2007
|
429,000 |
2027
|
|||
2006
|
476,000 |
2026
|
|||
2005
|
414,000 |
2025
|
|||
$ | 2,627,000 |
2008
|
2007
|
|||||||
Tax
Benefit of 34%
|
$ | (524,425 | ) | $ | (158,096 | ) | ||
Increase
(Decrease) in Income Taxes Resulting from:
|
||||||||
State
Income Tax Benefit, Net of Federal Tax
|
(94,658 | ) | (37,404 | ) | ||||
Nondeductible
Expenses
|
75,783 | 12,830 | ||||||
Valuation
Allowance
|
1,101,670 | - | ||||||
Total
|
$ | 558,370 | $ | (182,670 | ) |
NOTE
12
|
RELATED
PARTY TRANSACTIONS
|
NOTE
13
|
EARNINGS
(LOSS) PER SHARE
|
2008
|
2007
|
|||||||
Basic
EPS
|
||||||||
Net
Loss
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
Weighted
Average Shares
|
7,004,583 | 6,589,121 | ||||||
Basic
Loss Per Share
|
$ | (0.30 | ) | $ | (0.04 | ) | ||
Diluted
EPS
|
||||||||
Net
Loss
|
$ | (2,100,797 | ) | $ | (282,319 | ) | ||
Basic
Weighted Average Shares
|
7,004,583 | 6,589,121 | ||||||
Dilutive
Effect of Stock Options
|
- | - | ||||||
Diluted
Weighted Average Shares
|
7,004,583 | 6,589,121 | ||||||
Diluted
Loss Per Share
|
$ | (0.30 | ) | $ | (0.04 | ) |
NOTE
14
|
SUBSEQUENT
EVENTS
|
BALANCE
SHEETS
|
1
|
|
STATEMENTS
OF OPERATIONS
|
3
|
|
STATEMENTS
OF CASH FLOWS
|
4
|
|
NOTES
TO FINANCIAL STATEMENTS
|
5
|
(Unaudited)
June 30, |
December 31,
|
|||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and Cash Equivalents
|
$ | 1,740 | $ | 335,189 | ||||
Accounts
Receivable
|
44,870 | 26,971 | ||||||
Prepaid
Expenses
|
7,830 | 11,532 | ||||||
Inventory
|
9,164 | 13,530 | ||||||
Total
Current Assets
|
63,604 | 387,222 | ||||||
PROPERTY
AND EQUIPMENT
|
||||||||
Office
Equipment
|
89,227 | 87,050 | ||||||
Furniture
and Fixtures
|
27,416 | 22,712 | ||||||
Software
|
36,800 | 36,634 | ||||||
Leased
Equipment
|
226,496 | 213,460 | ||||||
Leasehold
Improvements
|
37,007 | 34,495 | ||||||
Total
Property and Equipment
|
416,946 | 394,351 | ||||||
Less:
Accumulated Depreciation
|
138,386 | 99,099 | ||||||
Property
and Equipment, Net
|
278,560 | 295,252 | ||||||
OTHER
ASSETS
|
||||||||
Escrow
Deposits
|
10,000 | 50,000 | ||||||
Deposits
|
16,523 | 16,523 | ||||||
Total
Assets
|
$ | 368,687 | $ | 748,997 |
(Unaudited)
June
30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Current
Portion of Capital Lease Obligations
|
$ | 75,773 | $ | 65,916 | ||||
Notes
Payable
|
152,000 | - | ||||||
Accounts
Payable
|
155,564 | 48,465 | ||||||
Deferred
Revenue
|
- | 21,964 | ||||||
Accrued
Expenses
|
124,529 | 70,285 | ||||||
Total
Current Liabilities
|
507,866 | 206,630 | ||||||
LONG-TERM
LIABILITIES
|
||||||||
Capital
Lease Obligations, Net of Current Portion
|
90,875 | 117,162 | ||||||
Total
Liabilities
|
598,741 | 323,792 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
Stock, $0.001 par value; 40,000,000 shares authorized; 9,014,304 and
8,774,304 shares issued and outstanding, as of June 30, 2009 and December
31, 2008, respectively
|
9,014 | 8,774 | ||||||
Preferred
Stock, $0.001 par value; 10,000,000 shares authorized
|
- | - | ||||||
Additional
Paid-In Capital
|
3,644,011 | 3,385,251 | ||||||
Subscription
Receivable
|
(45,000 | ) | ||||||
Accumulated
Deficit
|
(3,838,079 | ) | (2,968,820 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
(230,054 | ) | 425,205 | |||||
Total
Liabilities and Stockholders' Equity
|
$ | 368,687 | $ | 748,997 |
3 Months
Ending
|
3 Months
Ending
|
6 Months
Ending
|
6 Months
Ending
|
|||||||||||||
June 30,
2009
|
June 30,
2008
|
June 30,
2009
|
June 30,
2008
|
|||||||||||||
REVENUE
|
$ | 108,580 | $ | 151,922 | $ | 332,404 | $ | 328,979 | ||||||||
COST
OF REVENUE
|
97,758 | 117,573 | 262,990 | 177,247 | ||||||||||||
GROSS
PROFIT
|
10,822 | 34,349 | 69,414 | 151,732 | ||||||||||||
OPERATING
EXPENSES
|
345,950 | 492,216 | 924,916 | 707,653 | ||||||||||||
LOSS
FROM OPERATIONS
|
(345,128 | ) | (457,867 | ) | (855,502 | ) | (555,921 | ) | ||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
Interest
Income
|
- | - | 1,184 | - | ||||||||||||
Interest
Expense
|
(7,010 | ) | (9,091 | ) | (14,941 | ) | (16,524 | ) | ||||||||
Total
Other Income (Expense)
|
(7,010 | ) | (9,091 | ) | (13,757 | ) | (16,524 | ) | ||||||||
LOSS
BEFORE INCOME TAXES
|
(352,138 | ) | (466,958 | ) | (869,259 | ) | (572,445 | ) | ||||||||
BENEFIT
(PROVISION) FOR INCOME TAXES
|
- | 105,000 | - | 145,000 | ||||||||||||
NET
LOSS
|
$ | (352,138 | ) | $ | (361,958 | ) | $ | (869,259 | ) | $ | (427,445 | ) | ||||
BASIC
AND DILUTED LOSS PER SHARE
|
$ | (0.04 | ) | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.08 | ) |
6
Months
Ending |
6
Months
Ending |
|||||||
June 30, 2009
|
June 30, 2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
Loss
|
$ | (869,259 | ) | $ | (427,445 | ) | ||
Adjustments
to Reconcile Net Loss to Net Cash Used by Operating
Activities
|
||||||||
Depreciation
|
39,286 | 16,786 | ||||||
Stock
Compensation
|
20,000 | 179,000 | ||||||
Deferred
Tax Benefit
|
(145,000 | ) | ||||||
(Increase)
Decrease in Operating Assets:
|
||||||||
Accounts
Receivable
|
(17,899 | ) | (34,985 | ) | ||||
Prepaid
Expense
|
3,702 | - | ||||||
Inventory
|
4,366 | - | ||||||
Deposits
|
- | (13,620 | ) | |||||
Increase
(Decrease) in Operating Liabilities:
|
- | |||||||
Accounts
Payable
|
107,099 | (16,814 | ) | |||||
Accrued
Expenses
|
54,244 | 72,320 | ||||||
Deferred
Revenue
|
(21,964 | ) | - | |||||
Billings
in Excess of Costs and Estimated Earnings on Uncompleted
Contracts
|
- | (12,805 | ) | |||||
Net
Cash Used by Operating Activities
|
(680,425 | ) | (382,563 | ) | ||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Escrow
Deposit reduction
|
40,000 | - | ||||||
Purchase
of Property and Equipment
|
(9,558 | ) | (11,105 | ) | ||||
Net
Cash Used by Investing Activities
|
30,442 | (11,105 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds
from Short-Term Borrowings
|
152,000 | 275,916 | ||||||
Payments
on Capital Lease Obligations
|
(29,466 | ) | (7,058 | ) | ||||
Common
Stock Issued, net of Costs of Capital
|
194,000 | 336,670 | ||||||
Net
Cash Provided by Financing Activities
|
316,534 | 605,528 | ||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(333,449 | ) | 222,965 | |||||
Cash
and Cash Equivalents - Beginning of Year
|
335,189 | 41,344 | ||||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$ | 1,740 | $ | 264,309 | ||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Common
Stock Subscription Receivable
|
$ | 45,000 | $ | - | ||||
Interest
Paid
|
$ | 14,941 | $ | 4,024 | ||||
Property
and Equipment Purchased via Capital Lease
|
$ | 13,036 | $ | 79,815 |
|
·
|
A
private placement memorandum was prepared to raise an additional
$2,500,000 of equity. As of June 30, 2009, $1,031,000 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.
|
For the three
|
For the three
|
For the six
|
For the six
|
|||||||||||||
months
ended
|
months
ended
|
months
ended
|
months
ended
|
|||||||||||||
6/30/2009
|
6/30/2008
|
6/30/2009
|
6/30/2008
|
|||||||||||||
Basic
and Diluted EPS
|
||||||||||||||||
Net
Loss
|
$ | (352,138 | ) | $ | (361,958 | ) | $ | (869,259 | ) | $ | (427,445 | ) | ||||
Weighted
Average Shares
|
8,936,804 | 5,090,006 | 8,882,637 | 5,056,585 | ||||||||||||
Basic
Loss Per Share
|
$ | (0.04 | ) | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.08 | ) |
Unaudited
Pro Forma Condensed Balance Sheets
|
IntelaSight,
Inc.
|
Iveda
Corporation
(fka
Charmed Homes Inc.)
|
|||||||||||||||
June
30,
|
July
31,
|
Pro
Forma
|
Pro
Forma
|
||||||||||||||
2009
|
2009
|
Adjustments
|
Notes
|
Combined
|
|||||||||||||
ASSETS
|
|||||||||||||||||
CURRENT
ASSETS
|
|||||||||||||||||
Cash
and Cash Equivalents
|
$ | 1,740 | $ | 64,233 |
(a)
|
$ | 65,973 | ||||||||||
Accounts
Receivable
|
$ | 44,870 | 44,870 | ||||||||||||||
Prepaid
Expenses
|
$ | 7,830 | 7,830 | ||||||||||||||
Inventory
|
$ | 9,164 | 9,164 | ||||||||||||||
Total
Current Assets
|
63,604 | 64,233 | - | 127,837 | |||||||||||||
PROPERTY
AND EQUIPMENT
|
|||||||||||||||||
Office
Equipment
|
89,227 | 89,227 | |||||||||||||||
Furniture
and Fixtures
|
27,416 | 27,416 | |||||||||||||||
Software
|
36,800 | 36,800 | |||||||||||||||
Leased
Equipment
|
226,496 | 226,496 | |||||||||||||||
Leasehold
Improvements
|
37,007 | 37,007 | |||||||||||||||
Total
Property and Equipment
|
416,946 | 416,946 | |||||||||||||||
Less:
Accumulated Depreciation
|
138,386 | 138,386 | |||||||||||||||
Property
and Equipment, Net
|
278,560 | 278,560 | |||||||||||||||
OTHER
ASSETS
|
|||||||||||||||||
Deferred
Income Taxes
|
- | ||||||||||||||||
Escrow
Deposits
|
10,000 | (10,000 | ) |
(b)
|
- | ||||||||||||
Deposits
|
16,523 | 16,523 | |||||||||||||||
Total
Assets
|
$ | 368,687 | $ | 64,233 | $ | (10,000 | ) | 422,920 | |||||||||
- | |||||||||||||||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||
CURRENT
LIABILITIES
|
|||||||||||||||||
Current
Portion of Capital Lease Obligations
|
$ | 75,773 | 75,773 | ||||||||||||||
Notes
Payable
|
$ | 152,000 | 152,000 | ||||||||||||||
Accounts
Payable
|
$ | 155,564 | 2,171 |
(a)
|
157,735 | ||||||||||||
Deferred
Revenue
|
- | - | |||||||||||||||
Billings
in Excess of Costs and Estimated Earnings on
|
- | ||||||||||||||||
Uncompleted
Contracts
|
- | - | |||||||||||||||
Accrued
Expenses
|
124,529 | 190,000 |
(c)
|
314,529 | |||||||||||||
Total
Current Liabilities
|
507,866 | 2,171 | 190,000 | 700,037 | |||||||||||||
LONG-TERM
LIABILITIES
|
|||||||||||||||||
Capital
Lease Obligations, Net of Current Portion
|
90,875 | 90,875 | |||||||||||||||
Total
Liabilities
|
598,741 | 2,171 | 190,000 | 790,912 | |||||||||||||
STOCKHOLDERS'
EQUITY
|
|||||||||||||||||
Common
Stock, $0.001 par value; 40,000,000 shares
|
9,014 | 845 |
(f)
|
9,859 | |||||||||||||
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
|
3,644,011 | 173,933 | (173,933 | ) |
(e)
|
3,644,011 | |||||||||||
(845 | ) |
(f)
|
|||||||||||||||
Common
Stock Subscription Receivable
|
(45,000 | ) | (45,000 | ) | |||||||||||||
Donated
Capital
|
18,500 | (18,500 | ) |
(e)
|
- | ||||||||||||
Accumulated
Deficit
|
(3,838,079 | ) | (130,438 | ) | (69,562 | ) |
(d)
|
(4,038,079 | ) | ||||||||
Total
Stockholders' Equity
|
(230,054 | ) | 62,062 | (262,062 | ) | (430,054 | ) | ||||||||||
Total
Liabilities and Stockholders' Equity
|
$ | 368,687 | $ | 64,233 | $ | (72,062 | ) | 360,858 |
Unaudited
Pro Forma Condensed Statement of Operations
|
IntelaSight,
Inc.
|
Iveda
Corporation
(fka
Charmed Homes Inc.)
|
Pro
Forma
|
||||||||||||||
6
Months ended
June
30,
|
6
Months ended
July
31,
|
Pro
Forma
Adjustments
|
Combined
July
31,
|
||||||||||||||
2009
|
2009
|
2009
|
|||||||||||||||
REVENUE
|
$ | 332,404 | - | 332,404 | |||||||||||||
COST
OF REVENUE
|
262,990 | - | 262,990 | ||||||||||||||
GROSS
PROFIT
|
69,414 | - | 69,414 | ||||||||||||||
OPERATING
EXPENSES
|
924,916 | 24,482 | 200,000 |
(g)
|
1,149,398 | ||||||||||||
LOSS
FROM OPERATIONS
|
(855,502 | ) | (24,482 | ) | (879,984 | ) | |||||||||||
OTHER
INCOME (EXPENSE)
|
|||||||||||||||||
Interest
Income
|
1,184 | 1,184 | |||||||||||||||
Interest
Expense
|
(14,941 | ) | (14,941 | ) | |||||||||||||
Total
Other Income (Expense)
|
(13,757 | ) | (13,757 | ) | |||||||||||||
LOSS
BEFORE INCOME TAXES
|
(869,259 | ) | (869,259 | ) | |||||||||||||
BENEFIT
(PROVISION) FOR INCOME TAXES
|
- | - | |||||||||||||||
NET
LOSS
|
$ | (869,259 | ) | (24,482 | ) | (200,000 | ) | $ | (1,093,741 | ) | |||||||
BASIC
LOSS PER SHARE
|
$ | (0.10 | ) | $ | - | $ | (0.12 | ) | |||||||||
DILUTED
LOSS PER SHARE
|
$ | (0.10 | ) | $ | - | $ | (0.12 | ) | |||||||||
Weighted
Average Shares Outstanding
|
8,882,637 | 6,690,000 | 8,882,637 |
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 - This Elimination
was WAIVED at closing hence $0
|
||||||||
(b) To
recognize the escrow deposit to certain Charmed shareholders as a
transaction cost
|
||||||||
(c) To record the
$190,000 commitment at closing to certain Charmed
shareholders
|
||||||||
(d) Eliminate $130,438
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
|