Business Context and Reporting Period
This Form 10-K covers the fiscal year ended January 31, 2009, for Charmed Homes Inc. (a Nevada corporation). The company is classified as a development-stage enterprise and a smaller reporting company. Historically engaged in custom home construction in Calgary, Alberta, the company ceased these operations in 2008 following the sale of a single home due to market downturns and funding constraints. As of the filing date, the company is in the process of a reverse merger with IntelaSight, Inc. (d/b/a Iveda Solutions), a provider of remote video monitoring services. Upon closing, the company intends to change its name to "Iveda Corporation."
Key Financial Metrics
| Metric | Value (USD) |
|---|---|
| Revenue (Accumulated from Inception) | $505,665 |
| Net Loss (Accumulated from Inception) | ($105,956) |
| Net Loss (Fiscal Year 2009) | ($36,501) |
| Cash and Cash Equivalents (Jan 31, 2009) | $86,957 |
| Total Assets (Jan 31, 2009) | $86,957 |
| Total Liabilities (Jan 31, 2009) | $3,413 |
| Stockholders' Equity (Jan 31, 2009) | $83,544 |
| Shares Outstanding | 6,690,000 |
Note: The company reported no revenue for the fiscal year ended January 31, 2009. All revenue was recognized in the prior fiscal year from the sale of one home.
Material Changes vs. Prior Period
- Cessation of Core Business: The company discontinued its home construction operations in 2008 after selling its only developed property. Consequently, inventory (real estate) dropped from $489,844 in 2008 to $0 in 2009.
- Debt Repayment: A significant related-party liability of $395,751 owed to the President was fully repaid during the 2009 fiscal year, reducing total liabilities from $398,547 to $3,413.
- Strategic Pivot: The company entered into a Merger Agreement with Iveda Solutions to transition into the remote video monitoring sector, marking a complete shift from real estate development.
- Stock Structure: Shareholders approved a 2-for-1 reverse stock split and a name change to facilitate the merger, though the split had not yet taken effect as of the balance sheet date.
Outlook, Risks, and Management Commentary
Going Concern: The auditors have issued a "going concern" opinion, stating there is substantial doubt about the company's ability to continue as an ongoing business for the next twelve months without additional capital. The company has a history of operating losses and relies on equity financing to fund operations.
Merger Status: The merger with Iveda Solutions is subject to shareholder approval and closing conditions, with a target closing date of March 31, 2009. If the merger fails, the company retains its current name and shell status.
Risks:
- Liquidity Risk: Limited working capital and no assurance of future financing availability.
- Market Risk: The new business model (video monitoring) is unproven for the registrant, and the company faces competition from established security firms.
- Regulatory Risk: Shares are subject to Section 15(g) of the Securities Exchange Act (penny stock rules), which may limit liquidity and trading.
Investor Verification Checklist
- Merger Completion: Verify if the merger with Iveda Solutions closed by the March 31, 2009 deadline and if the name change to "Iveda Corporation" was filed.
- Capital Adequacy: Confirm if the company has secured additional funding to support the transition to the video monitoring business, given the "going concern" warning.
- Stock Split Execution: Verify the effective date and ratio of the 2-for-1 reverse stock split to understand current share count and price.
- Iveda Financials: Review the financial statements of Iveda Solutions (the target company) as they will become the primary operating entity post-merger.
- Related Party Transactions: Monitor for new loans or transactions with the new management team (David Ly, Bob Brilon, Luz Berg) replacing the current officers.