UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C.  20549

                                Form 10-QSB

(Mark One)
     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

     For the quarter ended March 31, 2006

     [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

     For the transition period from ________ to ________

                      Commission File Number: 000-30874

                                 CANEUM, INC.
              (Exact name of Registrant as specified in charter)

Nevada                                                             33-0916900
State or other jurisdiction of                       I.R.S. Employer I.D. No.
incorporation or organization

170 Newport Center Drive, Suite 220, Newport Beach, CA                  92660
(Address of principal executive offices)                           (Zip Code)

Issuer's telephone number, including area code:  (949) 273-4000

<PAGE>

Check whether the Issuer (1) has filed all reports required to be filed
by section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such fling requirements for the
past 90 days.  (1) Yes [X] No [ ]   (2) Yes [X] No [ ]

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes [ ]  No [X]

State the number of shares outstanding of each of the Issuer's classes
of common equity as of the latest practicable date:  At May 12, 2006,
there were 6,197,271 shares of our common stock outstanding.

<PAGE>
                                    PART I

                            FINANCIAL INFORMATION

1. Financial Statements

                              Table of Contents

                For the quarters ended March 31, 2006 and 2005


                                                                         Page


Financial Statements

     Condensed Consolidated Balance Sheets - Assets                         4

     Condensed Consolidated Balance Sheets - Liabilities
       and Stockholders' Equity                                             5

     Condensed Consolidated Statements of Operations and
       Comprehensive Loss                                                   6

     Condensed Consolidated Statements of Cash Flows                        7

     Notes to Condensed Consolidated Financial Statements                   8

<PAGE>

                                 Caneum, Inc.

                     Condensed Consolidated Balance Sheets

                  As of March 31, 2006 and December 31, 2005

                                    ASSETS

                                                   March 31,    December 31,
                                                     2006           2005
                                                 ------------   ------------
                                                  (Unaudited)
CURRENT ASSETS

  Cash and cash equivalents, including
    restricted cash of $343,750                  $    838,411   $     99,760
  Accounts receivable, net of
    allowance for doubtful accounts
    of $9,454 and $10,446, respectively             1,138,693        469,074
  Prepaid assets - related parties (Note 3)            82,695         68,750
  Other prepaid expenses and current assets            81,326         51,099
                                                  -----------    -----------
     TOTAL CURRENT ASSETS                           2,141,125        688,683

FIXED ASSETS

  Property and Equipment                               23,119           -
  Software                                             61,073         16,128
                                                  -----------    -----------
                                                       84,192         16,128
  Less accumulated depreciation                       (32,497)        (1,571)
                                                  -----------    -----------
     TOTAL FIXED ASSETS                                51,695         14,557

INTANGIBLE ASSETS (Note 4 and 7)

  Employment contracts                                 78,000           -
  Customer contracts/relationships                    670,000           -
  Trademarks and logos                                 90,000           -
  Goodwill                                          1,348,325           -
                                                  -----------    -----------
                                                    2,186,325           -
  Less accumulated amortization                        (1,600)          -
                                                  -----------    -----------
                                                    2,184,725           -
                                                  -----------    -----------
     TOTAL ASSETS                                $  4,377,545   $    703,240
                                                  ===========    ===========

     See accompanying notes to condensed consolidated financial statements

                                      4
<PAGE>

                                 Caneum, Inc.

               Condensed Consolidated Balance Sheets (continued)

                  As of March 31, 2006 and December 31, 2005

                     LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                   March 31,    December 31,
                                                     2006           2005
                                                 ------------   ------------
                                                  (Unaudited)
<S>                                              <C>            <C>
CURRENT LIABILITIES

  Accounts payable and accrued liabilities       $    418,038   $    284,656
  Credit line                                              13          6,833
  Accrued payroll and related expenses                132,086         25,839
  Purchase price installment payable (Note 7)         687,500           -
                                                  -----------    -----------
     TOTAL CURRENT LIABILITIES                      1,237,637        317,328
                                                  -----------    -----------
LONG TERM LIABILITIES

  Purchase price installment payable (Note 7)         687,500           -

COMMITMENTS AND CONTINGENCIES (Notes 6, 7 and 10)

STOCKHOLDERS' EQUITY

  Common stock, 100,000,000 shares authorized
   at $.001 par value: 6,177,045 and 5,386,991
   shares issued and outstanding, respectively          6,177          5,386
  Preferred stock, 20,000,000 shares authorized
   at $.001 par value: 4,000,000 and 0 shares
   issued and outstanding, respectively                 4,000           -
  Additional paid in capital                        6,748,814      3,434,328
  Accumulated deficit                              (4,266,583)    (3,013,802)
  Deferred compensation                               (40,000)       (40,000)
                                                  -----------    -----------
     TOTAL STOCKHOLDERS' EQUITY                     2,452,408        385,912
                                                  -----------    -----------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $  4,377,545 	$    703,240
                                                  ===========    ===========
</TABLE>
     See accompanying notes to condensed consolidated financial statements
                                      5
<PAGE>

                                 Caneum, Inc.

               Condensed Consolidated Statements of Operations
<TABLE>
<CAPTION>
                                                   For the quarter ended
                                                 March 31,        March 31,
                                                   2006             2005
                                               ------------     ------------
                                                (unaudited)      (unaudited)
<S>                                            <C>              <C>
REVENUE                                        $    854,719     $    204,522

COST OF REVENUE                                     640,309          137,938
                                                -----------      -----------
     GROSS PROFIT                                   214,410           66,584
                                                -----------      -----------
OPERATING EXPENSES                                  566,422          568,705
                                                -----------      -----------
     LOSS FROM OPERATIONS                          (352,012)        (502,121)

OTHER INCOME (EXPENSE)

  Other income                                           31             -
  Interest income                                      -                 993
                                                -----------      -----------
     TOTAL OTHER INCOME (EXPENSE)                        31              993
                                                -----------      -----------
     LOSS BEFORE INCOME TAX                        (351,981)        (501,128)

     INCOME TAX EXPENSE                                (800)            (800)
                                                -----------      -----------
     NET LOSS                                  $   (352,781)    $   (501,928)
                                                ===========      ===========

LOSS PER COMMON SHARE-Basic and Diluted        $      (0.06)    $      (0.11)
                                                ===========      ===========
SHARES USED IN EARNINGS PER SHARE CALCULATIONS
  WEIGHTED AVERAGE COMMON SHARES                  5,820,551        4,405,277
                                                ===========      ===========
</TABLE>
     See accompanying notes to condensed consolidated financial statements
                                      6
<PAGE>

                                 Caneum, Inc.

               Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                For the quarter ended
                                                              March 31,       March 31,
                                                                2006            2005
                                                            ------------    ------------
                                                             (unaudited)     (unaudited)
<S>                                                         <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss)                                                  $   (352,781)   $   (501,928)
  Adjustments to reconcile net loss to net
  cash used by operating activities:
    Stock-based compensation expense                             129,272         183,646
    Depreciation and amortization                                  2,401            -
    Expenses paid by stock issuance                               15,000           9,077
    Increase in accounts receivable                              (35,758)       (113,674)
    Increase in prepaid expenses and other assets                (29,859)           -
    Decrease accounts payable and accrued liabilities            (83,263)        (57,660)
    Increase in accrued payroll and related expenses              57,754          58,391
                                                             -----------     -----------
      NET CASH FLOWS USED BY OPERATING ACTIVITIES               (297,234)       (422,148)
                                                             -----------     -----------
CASH FLOWS FROM INVESTING ACTIVITIES

  Cash issued for purchase of TierOne Consulting, Inc.,
    net of cash acquired                                      (1,226,353)           -
  Purchase of fixed assets                                          (945)           -
                                                             -----------     -----------
      NET CASH FLOWS USED BY INVESTING ACTIVITIES             (1,227,298)           -
                                                             -----------     -----------
CASH FLOWS FROM FINANCING ACTIVITIES

  Issuance of common stock for cash                              350,003          40,000
  Issuance of Series A preferred shares for cash, net          1,790,000            -
  Exercise of options                                            130,000            -
  Decrease in credit line                                         (6,820)           -
                                                             -----------     -----------
      NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES          2,263,183          40,000
                                                             -----------     -----------
      NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS       738,651        (382,148)

      CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD          99,760         506,790
                                                             -----------     -----------
      CASH AND CASH EQUIVALENTS, END OF THE PERIOD          $    838,411    $    124,642
                                                             ===========     ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

  Stock issued to satisfy TierOne acquisition costs         $      5,000    $       -
                                                             ===========     ===========
  Stock issued to satisfy accrued expenses                          -             82,200
                                                             ===========     ===========
  Stock issued in connection with cost preference
   shares issued                                            $     50,400    $       -
                                                             ===========     ===========
  Stock issued for services                                 $     20,000    $       -
                                                             ===========     ===========
  Cash paid for taxes                                       $       -       $        800
                                                             ===========     ===========
</TABLE>
     See accompanying notes to condensed consolidated financial statements
                                      7
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

NOTE 1 - CORPORATE HISTORY

Caneum, Inc. (the "Company") was incorporated in Nevada on March 1,
2000, as Saiph Corporation for the purpose of seeking and consummating a
merger or acquisition with a business entity organized as a private
corporation, partnership, or sole proprietorship.  On March 5, 2003, the
Company filed Amended Articles of Incorporation changing its name to
SaiphT Corporation.  On July 21, 2003, the Company changed its name to
Caneum, Inc.

The Company currently provides a broad variety of business process
outsourcing, software development and information technology consulting
services and products.  The Company also intends to acquire and grow
companies in the software and information technology sectors.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Consolidation
-------------
The accompanying condensed consolidated financial statements include the
accounts of the company and its wholly owned subsidiary TierOne Consulting,
Inc. from the date of its acquisition of March 28, 2006.  All intercompany
transactions have been eliminated upon consolidation.

Revenue Recognition
-------------------
The Company derives its revenue primarily from the sale of services.
Revenue is recognized as services are performed in accordance with the
provisions of SEC Staff Accounting Bulletin No. 104, "Revenue
Recognition."  The Company recognizes revenue when there is persuasive
evidence of an arrangement, title and risk of loss have passed, delivery
has occurred or the services have been rendered, the sales price is
fixed or determinable and collection of the related receivable is
reasonably assured.  The Company records all expense reimbursements
billed to customers as revenue, and related costs as cost of sales, when
incurred, in accordance with Emerging Issues Task Force ("EITF") 01-14
"Income Statement Characterization of Reimbursements Received for
"out-of-pocket" expenses."

During the quarters ended March 31, 2006 and March 31, 2005, the Company
had three customers that each accounted for at least 10% of the Company's
revenue.  For the quarter ended March 31, 2006 one customer accounted for
46% of the Company's revenue.

As of March 31, 2006, and December 31, 2005, one and three customers
respectively, each accounted for at least 10% of accounts receivable.  At
March 31, 2006, the largest such customer accounted for 11% of the
Company's net accounts receivable.

Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.  At March 31, 2006, and
December 31, 2005, the Company had $757,928 and $53,998, respectively,
on deposit that exceeded federally insured limits.

Stock Options
-------------
The Company estimates the fair value of stock options using a Black-Scholes
option pricing model, consistent with the provisions of SFAS No. 123R,
Securities and Exchange Commission Staff Accounting Bulletin No. 107
("SAB 107") and our prior period pro forma disclosures of net income (loss),
including stock-based compensation as required by SFAS No. 123.  The fair
value of stock options granted is recognized to expense over the requisite
service period.  Compensation expense for all share-based payment awards is
recognized using the straight-line single-option method.  Compensation
expense related to stock-based compensation is reported as general and
administrative based upon the department to which the associated employee
reports.

                                      8
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

The Company used the historical stock price volatility to value stock
options under SFAS 123R and in accordance with SFAS 123 for purposes of
pro forma information.  The expected term of stock options represents the
period of time options are expected to be outstanding and is based on
observed historical exercise patterns for the Company which we believe are
indicative of future exercise behavior.  For the risk free interest rate,
the Company utilizes the observed interest rates appropriate for the term of
time options are expected to be outstanding.  The dividend yield assumption
is based on the Company's history and expectation of dividend payouts.

The following weighted average assumptions were used for grants issued in the
quarter ended March 31, 2005, under the SFAS No. 123 requirements and in the
quarter ended March 31, 2006, under the SFAS No. 123R requirements:

                                       For the quarter ended
                                      March 31,      March 31,
                                        2006           2005
                                     ----------     ----------
     Volatility                          71.23%        178.33%
     Risk free Interest rate              4.72%          4.50%
     Expected life of Options         4-5 years      4-5 years

In the pro forma disclosures prior to the adoption of SFAS No. 123R, the
Company accounted for forfeitures as they occurred.  SFAS No. 123R requires
forfeitures to be estimated at the time of grant and revised if necessary in
subsequent periods if actual forfeiture rates differ from those estimates.
Forfeitures were estimated based on historical activity for the Company.

Impact of SFAS No. 123R
-----------------------
The following table presents the impact to the Company's condensed consolidated
financial statements as a result of our adoption of SFAS No. 123R for the three
months ended March 31, 2006:

                                                  Three months
                                                 ended March 31,
                                                      2006
                                                 ---------------
     Stock-based compensation expense 	           $   129,272
     Effect on loss per share:
       Basic                                       $     (0.02)

As of March 31, 2006, the unamortized compensation expense related to
outstanding unvested options was approximately $1,341,274 with a weighted
average remaining vesting period of approximately four years.  The Company
expects to amortize this expense over the remaining vesting period of these
stock options.

Prior to the adoption of SFAS No. 123R, for options granted to employees, the
Company applied Accounting Principles Board Opinion No. 25 "Accounting for Stock
Issued to Employees" and provided the pro forma disclosures of SFAS No. 123 as
amended by Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure."  No compensation expense
has been recognized for options granted unless the grants were issued at
exercise prices below market value prior to the adoption of SFAS No.123R.

                                      9
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

The Company accounts for options and warrants granted to non-employees under
SFAS No. 123 and Emerging Issues Task Force Issue No. 96-18, "Accounting for
Equity Instruments that are issued to other than Employees for Acquiring or
in Conjunction with Selling Goods or Services."  The Company measures the fair
value of such options using the Black-Scholes option pricing model at each
financial reporting date.

The per share weighted-average fair value of stock options granted during the
three months ended March 31, 2006 and 2005 was $0.83 and $2.24, respectively.

The total cash received from employees as a result of employee stock option
exercises during the three months ended March 31, 2006 was $130,000.

The Company's stock option plans are described in Note 9 to the condensed
consolidated financial statements.

Pro forma for 2005 Under SFAS No. 123
-------------------------------------
The following table compares the loss per share that the Company reported
to the pro forma amounts that the Company would have reported for the three
months ended March 31, 2005, had the Company recognized compensation expense
for stock-based compensation awards in accordance with SFAS No. 123:

                                                         Three months
                                                        ended March 31,
                                                             2005
                                                        ---------------
     Net income (loss) as reported                       $   (501,928)
     Add:  stock option-based employee compensation
           expense included in reported net loss,
           net of related tax effects                         183,646
     Deduct:  stock-based employee compensation
              expense, net of related tax effects            (397,800)
                                                          -----------
     Pro forma                                           $   (716,082)
                                                          ===========

     Basic and diluted net loss per share, as reported   $     (0.11)
     Basic and diluted net loss per share, pro forma     $     (0.16)

The Black-Scholes model, as well as other currently accepted option
valuation models, was developed to estimate the fair value of
freely-tradable, fully-transferable options without vesting
restrictions, which significantly differ from the Company's stock option
plan.  These models also require highly subjective assumptions, including
future stock price volatility and expected time until exercise, which
greatly affect the calculated fair value on the grant date.

Fair Value of Financial Instruments
-----------------------------------
SFAS No. 107, "Disclosures About Fair Value of Financial Instruments,"
requires management to disclose the estimated fair value of certain
assets and liabilities defined by SFAS No. 107 as financial instruments.
Financial instruments are generally defined by SFAS No. 107 as cash and
cash equivalents, evidence of ownership interest in equity, or a
contractual obligation that both conveys to one entity a right to
receive cash or other financial

                                      10
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

instruments from another entity and imposes on the other entity the
obligation to deliver cash or other financial instruments to the first
entity.  At March 31, 2006 and December 31, 2005, management believes
that the carrying amounts of cash and cash equivalents approximate fair
value because of the short maturity of these financial instruments.

Accounting for Income Taxes
---------------------------
Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes" requires an asset and liability approach for financial
accounting and reporting for income tax purposes. This statement
recognizes (a) the amount of taxes payable or refundable for the current
year and (b) deferred tax liabilities and assets for future tax
onsequences of events that have been recognized in the financial
statements or tax returns.  Valuation  allowances are established,
when necessary, to reduce deferred tax assets to the amount expected
to be realized.  Based on the Company's historical operating results,
a 100% valuation allowance has been provided against the Company's
net deferred tax assets.

Earnings (Loss) Per Share
-------------------------
Basic earnings (loss) per share includes no dilution and is computed by
dividing earnings (loss) available to common shareholders by the
weighted average number of common shares outstanding for the period.
Diluted earnings per share reflect the potential dilution of securities
that could share in the earnings of an entity.  Such shares are not
included when there is a loss as the effect would be anti-dilutive.  At
March 31, 2006 and December 31, 2005, the Company had 14,166,672 and
4,786,583, of options and warrants outstanding for the respective
periods.  Certain of these instruments are potentially dilutive
securities pursuant to SFAS No. 128.

Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the reporting
period.  In these financial statements, assets, liabilities and earnings
involve extensive reliance on management's estimates. Actual results
could differ from those estimates.

New Accounting Pronouncements
-----------------------------
In December 2004, the FASB issued SFAS 123R, which revises SFAS 123,
APB 25 and related accounting interpretations.  SFAS 123R eliminates
the use of the intrinsic value method for employee stock-based
compensation and requires compensation costs related to share-based
payment transactions to be recognized in the financial statements over
the period that an employee provides service in exchange for the award.
SFAS 123R requires the expensing of all share-based compensation,
including options, using the fair value based method.  This standard was
adopted by the Company on January 1, 2006.

In December 2004, the FASB issued SFAS 153 which is based on the
principle that exchanges of nonmonetary assets should be measured based
on the fair value of the assets exchanged.  SFAS 153 also replaces the
narrow exception for nonmonetary exchanges of similar productive assets
with a broader exception for exchanges of nonmonetary assets that do not
have commercial substance.  APB 29 previously required that the
accounting for an exchange of a productive asset for a similar productive
asset or an equivalent interest in the same or similar productive asset
should be based on the recorded amount of the asset relinquished.  APB 29
provided an exception to its basic measurement principle of fair value
for exchanges of similar productive assets.  The FASB believes that
exception required that some nonmonetary exchanges, although commercially
substantive, be recorded on a carryover basis.  By focusing the exception
on exchanges that lack commercial substance, the FASB believes SFAS 153
produces financial reporting that more faithfully represents the
economics of the transactions.  SFAS 153 is effective for nonmonetary
asset exchanges occurring in fiscal periods beginning after June 15,
2005.  The Company has evaluated the impact of the adoption of SFAS 153
and does not believe there was a significant impact to the Company's
overall results of operations or financial position.

                                      11
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

In May 2005, the FASB issued SFAS 154 which replaces APB 20 and SFAS 3
to require retrospective application of changes in accounting principle
to prior periods' financial statements.  The provisions of SFAS 154 are
effective for accounting changes made in fiscal years beginning after
December 15, 2005.  The adoption of SFAS 154 is not expected to have a
material effect on the Company's financial statements.

The FASB issued SFAS 155 in February 2006.  SFAS 155 amends SFAS 133 and
SFAS 140.  SFAS 155 resolves issues addressed in Statement 133
Implementation Issue No. D1, Application of Statement 133 to Beneficial
Interests in Securitized Financial Assets.  In summary, SFAS 155 permits
fair value remeasurement for any hybrid financial instrument that contains
an embedded derivative that otherwise would require bifurcation.  It also
clarifies which interest-only strips and principal-only strips are not
subject to the requirements of SFAS 133 and establishes a requirement to
evaluate interests in securitized financial assets to identify interests
that are freestanding derivatives or that are hybrid financial
instruments that contain embedded derivative requiring bifurcation.
SFAS 155 clarifies that concentrations of credit risk in the form of
subordination are not embedded derivatives and amends SFAS 140 to
eliminate the prohibition on qualifying special-purpose entity from
holding a derivative financial instrument that pertains to a beneficial
interest other than another derivative financial instrument.  This
statement is effective for all financial instruments acquired or issued
after the beginning of an entity's first fiscal year that begins after
September 15, 2006.  Earlier adoption is permitted as of the beginning of
an entity's fiscal year, provided the entity has not yet issued financial
statements, including financial statements for any interim period for
that fiscal year.  The Company is presently assessing the impact that the
adoption of SFAS 155 will have on the Company's financial statements.

NOTE 3 - RELATED PARTY TRANSACTIONS

During the quarters ended March 31, 2006 and 2005, the Company entered
into the following transactions with entities whose principals and/or
directors are shareholders of the Company:

Rent
----
The Company subleases space from Cygni Capital, LLC whose principal is a
shareholder of the Company.  The current rent is $1,150 per month.  The
rent expense under this agreement was $3,450 and $5,400 for the quarters
ended March 31, 2006 and 2005 respectively.  This agreement is on a
month-to-month term and the rent varies with the amount of space
subleased by the Company.

Management Services Agreement
-----------------------------
The Company had retained Cygni Capital, LLC whose principal is a
shareholder of the Company, to perform certain management services.
These services included, but were not limited to reception, telephone,
janitorial, bookkeeping and general office services.  The agreement
expired in 2005.  This agreement was on a month-to-month term and the
expense incurred has been eliminated as the Company's staff has
undertaken the services previously provided by Cygni Capital, LLC.  The
total expense under this agreement was $0 and $1,350 for the quarters
ended March 31, 2006 and 2005 respectively.

Consulting Services
-------------------
The Company had retained Cygni Capital, LLC whose principal is a
shareholder of the Company to perform certain consulting services.  These
services were professional in nature and included, but were not limited
to document preparation and consulting services.  This agreement was on a
month-to-month term and ended on December 31, 2005.  The total expense
under this agreement was $0 and $15,000 for the quarters ended March 31,
2006 and 2005 respectively.

                                      12
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

Investor Relations
------------------
Jason Daggett (a former director) is the President of The Liquid Group,
Inc., which has an agreement to provide investor relations and public
relations services for $5,850 on a month-to-month basis to the Company.
In addition The Liquid Group, through its affiliates, has conducted
other public relations and promotional activities for the Company.  The
amount paid to The Liquid Group or its affiliates was $92,550 and
$32,000 for the quarters ended March 31, 2006 and 2005 respectively.
At March 31 2006, $68,750 of the payments made to The Liquid Group was
recorded as a prepaid asset and will be recognized as expense as the
Company receives related services.

Consulting
----------
The Company currently has a consulting agreement with Robert F. Mitro, a
Director of our board.  Mr. Mitro originally provided services pursuant
to an employment agreement approved on October 28, 2003, but the current
consulting agreement replaces it in its entirety.  The initial period of
the consulting agreement for Mr. Mitro is through October 23, 2006, and
the agreement may be extended thereafter.  His base compensation is $60,000
per annum, payable monthly, in common stock.

Revenue
-------
The Company has been retained by Trycera Financial, a company with a
common director, to perform certain consulting services.  These services
are operational in nature and include, but are not limited to,
outsourced business process and marketing and consulting services.  The
total revenue pursuant to this agreement was $3,500 and $0 for the
quarters ended March 31, 2006 and 2005 respectively.  The agreement
operates on a project by project basis.

NOTE 4 - INTANGIBLE ASSETS

On March 28, 2006, and as more fully described in Note 7 the Company
acquired TierOne for a purchase price of $2,750,000.  In addition to
the assets acquired and liabilities assumed, which have been recorded
at their fair market value the Company allocated a purchase price of
$90,000 to the trade marks and logos, $310,000 to the customer
relationships, and $78,000 to the employment agreements of the two
principals.  These values were calculated based on the discounted net
revenues estimated to accrue from each of the identified intangible
assets and represent managements best estimates at the time the
transaction occurred.  The balance of the purchase price represents
Goodwill of $1,348,325.

The Company accounts for goodwill and other intangible assets in accordance
with SFAS No. 142, which requires that goodwill and other intangible assets
that have indefinite lives not be amortized but instead be tested at
least annually for impairment, or more frequently when events or a
change in circumstances indicate that the asset might be impaired.  For
indefinite lived intangible assets, impairment is tested by comparing
the carrying value of the asset to its fair value and assessing the
ongoing appropriateness of the indefinite life classification.  For
goodwill, a two-step test is used to identify the potential impairment
and to measure the amount of impairment, if any.  The first step is to
compare the fair value of a reporting unit with its carrying amount,
including goodwill.  If the fair value of a reporting unit exceeds its
carrying amount, goodwill is considered not impaired, otherwise goodwill
is impaired and the loss is measured by performing step two.  Under step
two, the impairment loss is measured by comparing the implied fair value
of the reporting unit with the carrying amount of goodwill.  At March 31,
2006, there was no impairment to the intangible assets.

Total amortization for the period ended March 31, 2006 and 2005, was
$1,600 and $0 respectively.  The amortization period for the definite lived
intangible assets is 2-5 years.

                                      13
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

NOTE 5 - INCOME TAX

Income tax provision is summarized as follows:
                             For the quarter ended
                                   March 31,
                               2006        2005
                              ------      ------
     Current:
       Federal               $   -       $   -
       State                     800         800
                              ------      ------
                                 800         800
     Deferred:
       Federal               $   -       $   -
       State                     -           -
                              ------      ------
     Income tax provision    $   800     $   800
                              ======      ======

As of March 31, 2006, the Company's primary net deferred tax assets are its
net operating loss carryforwards, which have been fully reserved with a
100% valuation allowance.

In assessing the realizability of deferred tax assets, management
considers whether it is more likely than not that some portion or all of
the deferred tax assets will not be realized.  The ultimate realization
of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences
become deductible.  Management considers the scheduled reversal of
deferred tax liabilities, projected future taxable income, and tax
planning strategies in making this assessment.  Based on the level of
historical operating results and projections of taxable income for the
future, management has determined that it cannot be determined "more
likely than not" that the portion of deferred tax assets not utilized
through the reversal of deferred tax liabilities will be realized.
Accordingly, management recorded a 100% valuation allowance against the
Company's deferred tax assets.  There can be no assurance that the
Company will be able to realize the benefit of some or all of the
federal and state loss carryforwards either due to the ongoing operating
losses, expiry of the carryforward period or due to ownership changes,
which may limit the usefulness of the loss carryforwards.

At March 31, 2006, the Company has available unused net operating loss
carryforwards of approximately $2,500,000 for federal and for state that
may be applied against future taxable income and that, if unused, expire
beginning in 2015.  Utilization of the net operating loss carryforwards
may be subject to a substantial annual limitation due to ownership
change limitations provided by the Internal Revenue Code of 1986.  The
annual limitation may result in the expiration of net operating loss
carryforwards before utilization.

NOTE 6 - BARRON FINANCING

On March 24, 2006, the Company entered into and closed a funding
agreement with Barron Partners, LP ("Barron").  Pursuant to the Preferred
Stock Purchase Agreement which set forth the terms of the funding, the
Company issued 4,000,000 shares of Series A Preferred Stock to Barron at
$0.50 per share for gross proceeds of $2,000,000.  The Series A Preferred
Stock is convertible into shares of the Company's common stock on a
share-for-share basis, and is subject to adjustment in the event of
certain corporate transactions.  In addition, if the Company fails to
meet certain adjusted EBITDA targets for 2006 or 2007, it has agreed to
issue additional shares of Series A Preferred Stock to Barron, not to
exceed 2,600,000 shares.  Pursuant to the agreement with Barron, the
Company also issued 4,000,000 A Warrants exercisable at $0.50 per share,
2,000,000 B Warrants exercisable at $1.00 per share, and 2,000,000 C
Warrants exercisable at $1.50 per share.  The warrants are exercisable
immediately and expire on March 24, 2010.  At any time that the average
closing sale price of our common stock for a period of twenty
consecutive trading days equals or exceeds 200% of the then existing
exercise price of the warrants, and provided that a registration
statement covering the shares underlying the warrants is available for
the resale of the common shares, the Company has the

                                      14
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

right, upon twenty days written notice to the warrant holders, to call
the warrant for cancellation in whole or in part.  Maximum potential
funding pursuant to the agreement with Barron, including the purchase
of the Series A Preferred Stock and assuming the exercise of all of the
warrants, of which there is no assurance, is $9,000,000.  At closing,
the Company paid a $50,000 due diligence fee to Barron.

The Preferred Stock Purchase Agreement also prevents any officer or
director of the Company from selling any shares for a period of six
months from March 24, 2006.  As placement agent for the funding
transaction with Barron, Ascendiant Securities, LLC ("Ascendiant")
received $160,000 at closing and the Company issued to them 60,000
common shares and 160,000 A Warrants, 80,000 B Warrants, and 80,000 C
Warrants.  The Company has also agreed to issue to Ascendiant warrants
equal to 8% of the shares issued to Barron upon any future exercise of
the outstanding warrants issued to Barron upon the same terms as the
warrants so exercised.  If all of the warrants are exercised by Barron,
the Company would be obligated to issue a total of 320,000 A Warrants,
160,000 B Warrants, and 160,000 C Warrants to Ascendiant.  The Company
has agreed to register the common shares underlying the warrants and the
60,000 common shares issued to Ascendiant.

In connection with the closing of this funding transaction on March 24,
2006, the Company entered into a Registration Rights Agreement with
Barron and has agreed to register the common shares issuable upon
conversion of the outstanding shares of the Series A Preferred Stock and
the common shares issuable upon exercise of the warrants held by Barron.
If the registration statement is not effective within six months from
March 24, 2006, the Company has agreed to pay liquidated damages equal
to 30,000 shares of common stock for each thirty-day period after this
six-month period during which the registration statement is not
effective, or if the Company does not maintain the effectiveness of the
registration statement, up to a maximum of 240,000 shares.  Because the
registration rights agreement does not require any liquidated damages to
be settled in cash, the relative fair value of the warrants have been
presented in equity.

NOTE 7 - TIERONE TRANSACTION

On March 28, 2006, the Company entered into and closed a Stock Purchase
Agreement with Tier One Consulting, Inc. ("Tier One") and its two
shareholders, Michael A. Willner and Robert J. Morris, in which the
Company acquired all of the outstanding shares of Tier One.  The purchase
price for the shares of Tier One was $2,750,000, of which $1,375,000 was
paid at closing and the balance of which is payable in two equal
installments on the first and second anniversary of the closing.  In
addition, the Company deposited $343,750 into a designated bank account
for payment toward the first installment and it agreed to reserve a like
amount from our bank lines of credit for payment of the first
installment, if necessary.  The installment payments are subject to
adjustment for certain set-offs for any post-closing undisclosed
liabilities of Tier One, enforcement of indemnification provisions by
Tier One in the agreement, a decline in the EBIT calculation in the Tier
One audited financial statements for 2005, or any increase or decrease
in the estimated cost of the audit of the Tier One financial statements
for 2005.  The funds for the payment at closing and the deposit into the
designated bank account were furnished from the funding transaction with
Barron described in Note 6.  As a result of the acquisition of all of the
outstanding stock of Tier One from its shareholders, Tier One is now a
wholly owned subsidiary of the Company.  The allocation of the purchase
price to the net tangible and intangible assets of TierOne is described
in Note 4.

Tier One is an information technology services and solutions provider
located in Aliso Viejo, California.  It was founded in 2003 and has been
managed by Messrs. Willner and Morris.  It currently has over forty
customers, including commercial and government entities.  Representative
vertical industries associated with Tier One's customer base include
automotive, banking, communications, consumer goods, energy, financial
services, insurance, government, media and entertainment, medical,
technology, and utilities.  Over the last eighteen months, the Company
has outsourced several projects for its clients to Tier One.

                                      15
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

NOTE 8 - QUARTERLY COMMON STOCK TRANSACTIONS

The Company issued 19,544 shares at an average price of $0.77 to a
consultant for services rendered on a monthly basis.  The value of the
services was $15,000.  An additional 5,813 of shares were issued for
legal services at $0.86.

In connection with a private placement, the Company issued 466,667
shares of common stock for cash at $0.75 per share.

Pursuant to the Company's 2002 Stock Option/Stock Issuance Plan, 240,454
shares were issued in connection with the exercising of stock options at
an average price of $0.54 for cash proceeds of $350,003

The Company granted an award of 60,000 shares to an agent of the Company
in connection with the Barron financing.  The fair value of these shares
was recorded at $50,400.

NOTE 9 - STOCK PLAN

On December 18, 2002, the Company's Board of Directors and shareholders
adopted the 2002 Stock Option/Stock Issuance Plan (the "Plan").  The
purpose of the Plan is to provide eligible persons an opportunity to
acquire a proprietary interest in the Company and as an incentive to
remain in the service of the Company.

There were initially 3,000,000 shares of common stock authorized for
nonstatutory and incentive stock options and stock grants under the
Plan, which are subject to adjustment in the event of stock splits,
stock dividends, and other situations.  On March 10, 2004, the Board of
Directors authorized an amendment to the Plan to increase the number of
shares of common stock under the plan to 7,500,000, which the
shareholders approved on February 28, 2005.  The Plan will continue in
effect until all of the stock available for grant or issuance has been
acquired through exercise of options or grants of shares, or until
December 1, 2010, whichever is earlier.  The Plan may also be terminated
in the event of certain corporate transactions such as a merger or
consolidation or the sale, transfer or other disposition of all or
substantially all of our assets.

The purchase price under each option is established by the plan
administrator.  Additionally, the plan administrator will fix the terms
of each option, but no option can be granted for a term in excess of 10
years.  Stock issued under the Plan may vest immediately or upon terms
established by the plan administrator.

A summary of the status of the plan and changes for the periods ended
March 31, 2006 and 2005 are presented below:

                                      16
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006
<TABLE>
<CAPTION>
                                        For the quarter ended            For the quarter ended
                                            March 31, 2006                   March 31, 2005
                                    -----------------------------  -----------------------------
                                                 Weighted-Average               Weighted-Average
                                      Shares      Exercise Price     Shares      Exercise Price
                                    -----------  ----------------  -----------  ----------------
<S>                                 <C>              <C>            <C>              <C>
Outstanding at January 1             4,636,250        $0.81         3,990,000        $0.67

Granted                              2,090,000        $0.83           670,000        $2.24

Cancelled/forfeited                   (148,125)       $1.86              -

Exercised                             (240,454)       $0.54              -
                                     ---------                      ---------
Outstanding at March 31              6,337,671        $0.81         4,660,000        $0.89
                                     =========                      =========

Options exercisable at March 31      3,988,818                      3,191,250

Weighted-average fair value of
  options granted during the period      $0.83                          $2.42
</TABLE>

The following table summarizes information about the options outstanding
at March 31, 2006:

<TABLE>
<CAPTION>
                               Options Outstanding                    Options Exercisable
                 -----------------------------------------------  -----------------------------
<S>              <C>          <C>               <C>               <C>          <C>
                   Number     Weighted-Average                      Number
   Range of      Outstanding     Remaining      Weighted-Average  Exercisable  Weighted-Average
Exercise Prices  at 3/31/06   Contractual Life  Exercise Prices   at 3/31/06    Exercise Price
---------------  -----------  ----------------  ----------------  -----------  ----------------
 $0.00 - $1.00    5,570,796       4 years            $0.69         3,515,935        $0.61

 $1.00 - $2.00      679,375       5 years            $1.47           275,321        $1.47

 $2.00 - $3.00       87,500       5 years            $2.66           197,562        $2.50
                  ---------                                        ---------
 $0.00 - $3.00    6,337,671       4 years            $0.81         3,757,739        $0.76
                  =========                                        =========
</TABLE>

In addition to the options discussed above, the Company has the
following outstanding warrants as follows:

  *  50,000 warrants for common shares at $0.75 each.  These warrants
     were issued during 2005 and are fully vested.

  *  50,000 warrants for common shares at $1.40 each.  These warrants
     were issued to consultants to the Company and are fully vested.


     In connection with the Barron funding that is more fully described in
     Note 6, the Company issued warrants 4,160,000 warrants for common shares at
     $.50, 2,080,000 warrants for common shares at $1.00 and 2,080,000
     warrants for common shares at $1.50.

                                      17
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

     The Company issued shares of common stock in a private placement with
     accompanying Common Stock Purchase Warrants at the rate of 50% of
     the shares purchased.  Accordingly 283,668 warrants are outstanding
     related to this common stock.  The warrants will be exercisable at $1.00
     with certain incentive discounts to the exercise price available through
     December 31, 2008.

     At March 31, 2006 the Company has 8,703,668 warrants outstanding at a
     weighted average exercise price of $0.88.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Credit Line
-----------
As of March 31, 2006, the Company maintained a small business credit
line with Wells Fargo Bank.  Under the terms of the agreement the total
credit available is $100,000, there is no collateral for the line and
the interest rate is variable in nature.  The Company must pay the
finance charge every month.  The balance outstanding on the line was
$13 at March 31, 2006 and the interest rate at that time was 8.5%.
The credit line may be terminated at any time.

Employment Contracts
--------------------
On October 28, 2003, the Company's Compensation Committee approved
employment agreements with the Company's President, Sukhbir Singh Mudan,
and Alan S. Knitowski, the Company's Chairman.  The following description
sets forth the material individual terms of these agreements:

  *  Sukhbir Singh Mudan.  The initial period of the employment agreement
     for Mr. Mudan is three years.  Mr. Mudan is required to devote 100%
     of his business time to the business of the Company, and his base
     salary is $120,000 per annum.  Mr. Mudan received options to
     purchase 1,000,000 shares at $0.55 per share as additional
     compensation for entering into the agreement.

  *  Alan S. Knitowski.  Mr. Knitowski is required to devote his best
     efforts to performing well all duties that the Company may
     reasonably assign to him from time to time during the term of the
     agreement, but he will not be required to devote in excess of 25%
     of his business time and effort to providing these services.  His
     base salary is $120,000 per annum and he received options to
     purchase 1,000,000 shares at $0.55 per share as additional
     compensation for entering into the agreement.

On March 17, 2004, the Compensation Committee approved an employment
agreement with the Company's Executive Vice-President, Gary D. Allhusen.
The initial period of the employment agreement for Mr. Allhusen is three
years and he is required to devote 100% of his business time to the
business of the Company.  Mr. Allhusen's base salary is $120,000 per
annum and he received options to purchase 750,000 shares at $0.75 per
share as additional compensation for entering into the agreement.

Effective with the closing of the transaction with Tier One (Note 7), the
Company entered into two-year full-time employment agreements with Messrs.
Willner and Morris and appointed them Senior Vice-Presidents of the
Company.  Each employment agreement provides for a base salary of
$200,000 and each person was granted options to purchase 1,000,000
shares of the Company's common stock pursuant to its existing Stock
Option/Stock Issuance Plan at $0.83 per share.  The options will vest at
the rate of 1/16th per calendar quarter beginning with the quarter

                                      18
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006

ending March 31, 2006, with the first 62,500 options vesting on
March 31, 2006, subject to early vesting in the event of a corporate
transaction and in the event the person dies or is disabled, or if the
Company terminates him without cause.

NOTE 11 - SUBSEQUENT EVENTS

Clarence Kelley
---------------
On April 20, 2005, we signed a letter of intent to acquire 1138, Inc., a
Kansas corporation, doing business as Clarence M. Kelley and Associates.
The letter of intent provided for Clarence Kelley to be merged with and
into our company.  Under the terms of the letter of intent, the
shareholders of Clarence Kelley would have received 50% of the purchase
price at closing, and that the balance of purchase price would be issued
25% at the end of the first anniversary of the closing and 25% at the
end of the second anniversary of the closing, in each case subject to
the fulfillment of mutually agreed to performance benchmarks and the
terms of a definitive agreement.  The installment payments in each case
were conditioned upon the company maintaining gross revenue equal to at
least 90% of gross revenue at closing and net revenue margin not less
than that at closing.  All common shares issued by us as part of the
purchase price would have included piggyback registration rights.  It was
contemplated that the purchase price would be subject to offset on
negotiated terms and conditions.  The number of shares to be issued by
us to the shareholders in the proposed transaction would have been
appropriately decreased to reflect the intrinsic value of any warrants or
options assumed by us or for which replacement options or warrants with
equivalent economic benefits were issued by us.  On August 2, 2005, we
extended the letter of intent until March 31, 2006.  On March 31, 2006,
the LOI expired without executing a binding definitive agreement.  At
this point, both companies continue discussions concerning an acquisition,
but there can be no assurance that the Company will be successful in
achieving closure on the proposed transaction.  In the interim, both
companies have executed a reseller agreement such that Caneum will offer
Clarence Kelley's pre-employment screening and background investigations
capability as a core component to its human resources business process
outsourcing (BPO) offering to its customers.

Note 12 - PROFORMA CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited Pro Forma Consolidated Statement of Operations
for the Company for the quarters ended March 31, 2006 and 2005, have been
prepared to illustrate the estimated effect of the acquisition of TierOne
by Caneum, Inc. as if the transaction had occurred on the first day of
the presented periods.  The pro forma consolidated Statements of Operation
do not purport to be indicative of the consolidated results of operations
that would actually be attained had such transactions been completed on
the assumed dates and for the period presented, or which may be attained
in the future.  The pro forma financial statements include adjustments for
amortization of finite lived assets and elimination of intercompany
transactions for the periods presented.  These statements should be read
in conjunction with the separate historical financial statements of the
individual companies.

                                      19
<PAGE>

                                 Caneum, Inc.
             Notes to Condensed Consolidated Financial Statements
                                March 31, 2006
<TABLE>
<CAPTION>
                                                   For the quarter ended
                                               -----------------------------
                                                 March 31,        March 31,
                                                   2006             2005
                                               ------------     ------------
                                                 Proforma         Proforma
                                                (unaudited)      (unaudited)
<S>                                            <C>              <C>
REVENUE                                        $  1,854,459     $  1,417,841

COST OF REVENUE                                   1,275,996     1,108,327
                                                -----------      -----------
     GROSS PROFIT                                   578,463          309,514

OPERATING EXPENSES                                  911,335          792,146
                                                -----------      -----------
     LOSS FROM OPERATIONS                          (332,872)        (482,632)
                                                -----------      -----------
OTHER INCOME (EXPENSE)

  Other income                                           31             -
  Interest income                                      -                 993
                                                -----------      -----------
     TOTAL OTHER INCOME (EXPENSE)                        31              993
                                                -----------      -----------
     LOSS BEFORE INCOME TAX                        (332,841)        (481,639)

     INCOME TAX EXPENSE                                (800)            (800)
                                                -----------      -----------
     NET LOSS                                  $   (333,641)    $   (482,439)
                                                ===========      ===========

LOSS PER COMMON SHARE-Basic and Diluted        $      (0.06)    $      (0.11)
                                                ===========      ===========
SHARES USED IN EARNINGS PER SHARE CALCULATIONS
  WEIGHTED AVERAGE COMMON SHARES                  5,823,950        4,405,277
                                                ===========      ===========
</TABLE>

                                      20
<PAGE>

Item  2.  Management's Discussion and Analysis and Plan of Operation

     The following discussion should be read in conjunction with our
unaudited consolidated financial statements and related notes thereto as
filed with this report.

Background

     We are a global provider of business process and information
technology outsourcing products and services across vertical industries
including technology, energy, government, transportation, financial
services, education and healthcare.  We provide a suite of business
strategy and planning capabilities to assist companies with their "make
versus buy" decisions in the areas of data, network, product
development, product maintenance and customer support, and fulfills its
services in-house, on-shore, near-shore and off-shore depending on the
business goals and objectives of our global customers.  In parallel, we
are opportunistically pursuing accretive acquisitions within our core
outsourcing product and service suite in order to broaden our core
capabilities, expand our customer base and supplement our organic
growth.

     On March 28, 2006, we acquired Tier One Consulting, Inc., a
California- based information technology services and solutions
provider, for an aggregate purchase price of $2,750,000.  On March 24,
2006, we closed a transaction with Barron Partners LP ("Barron") in
which we issued 4,000,000 shares of Series A Convertible Preferred Stock
to Barron at $0.50 per share for gross proceeds of $2,000,000.  We also
issued to Barron 4,000,000 A Warrants exercisable at $0.50 per share,
2,000,000 B Warrants exercisable at $1.00 per share, and 2,000,000 C
Warrants exercisable at $1.50 per share.  As placement agent for the
funding transaction with Barron, Ascendiant Securities, LLC received
$160,000 at closing and we issued to them 60,000 common shares and
160,000 A Warrants exercisable at $0.50 per share, 80,000 B Warrants
exercisable at $1.00 per share, and 80,000 C Warrants exercisable at
$1.50 per share.

     On March 28, 2006, we closed the transaction with Tier One
Consulting, Inc. ("Tier One") and its two shareholders, Michael A.
Willner and Robert J. Morris, in which we acquired all of the
outstanding shares of Tier One.  The purchase price for the shares of
Tier One was $2,750,000, of which $1,375,000 was paid at closing and the
balance of which is payable in two equal installments on the first and
second anniversary of the closing.  In addition, we deposited $343,750
into a designated bank account for payment toward the first installment
and we agreed to reserve a like amount from our bank lines of credit for
payment of the first installment, if necessary.  The installment
payments are subject to adjustment for certain set-offs for any
post-closing undisclosed liabilities of Tier One, enforcement of
indemnification provisions by Tier One in the agreement, a decline in
the EBIT calculation in the Tier One audited financial statements for
2005, or any increase or decrease in the estimated cost of the audit of
the Tier One financial statements for 2005.  Also as a result of the
closing of the transaction with Tier One, we entered into two-year
full-time employment agreements with Messrs. Willner and Morris and
appointed them Senior Vice-Presidents of our company.  Each employment
agreement provides for a base salary of $200,000 and each person was
granted options to purchase 1,000,000 shares of our common stock
pursuant to our existing Stock Option/Stock Issuance Plan at $0.83 per

                                      21
<PAGE>

share. The options will vest at the rate of 1/16th per calendar quarter
beginning with the quarter ending March 31, 2006, with the first 62,500
options vesting on March 31, 2006, subject to early vesting in the event
of a corporate transaction and in the event the person dies or is
disabled, or if we terminate him without cause.

The impact of this acquisition will be significant increases in our
revenues, cost of revenues and operating expenses for periods subsequent
to March 28, 2006.  In addition, we expect to reap the benefits of
considerable cross selling between our established customer bases.

Critical Accounting Policies

     Critical accounting policies are defined as those that are
reflective of significant judgments and uncertainties, and potentially
result in materially different results under different assumptions and
conditions. There were no changes to our critical accounting policies
for the quarter ended March 31, 2006.

     We derive our revenue primarily from the sale of services either by
our parent or our wholly-owned subsidiary.  Revenue is recognized as
services are performed in accordance with the provisions of SEC Staff
Accounting Bulletin No. 104, "Revenue Recognition."  We recognize
revenue when there is persuasive evidence of an arrangement, title and
risk of loss have passed, delivery has occurred or the services have
been rendered, the sales price is fixed or determinable and collection
of the related receivable is reasonably assured.

     Cost of revenue consists primarily of payments to third-party
vendors and contractors and in-house resources charged to customers
based on hours of work performed.  Operating expenses include general
and administrative expenses and corporate overhead expenses.  General
and administrative expenses consist primarily of overhead in managing
programs, marketing expenses for future projects, and due diligence
costs in reviewing acquisition targets.  Corporate overhead expenses
relate to salaries and benefits of personnel responsible for corporate
activities, including acquisitions, administrative, and reporting
responsibilities. We record these expenses when incurred.

Results of Operations

Three Months Ended March 31, 2006 versus the Three Months Ended March
31, 2005

     Revenue was $854,719 and $204,522 for the quarters ended March 31,
2006 and 2005, respectively, representing an increase of $650,197 or
318% as compared to the same period in the prior year (the "comparable
prior year period").  The Company's increased marketing effort resulted
in several Business Process Outsourcing contracts which occurred
subsequent to the comparative prior year period.  These contracts are
with customers such as Countrywide, DirecTV and Innofone,com and have
generated a combined $715,120 in revenues during the quarter ended March
31, 2006, with $0 revenues in the comparative prior year period.  In

                                      22
<PAGE>

addition, during the current quarter, the Company recorded $49,433 in
post-acquisition revenues as a direct result of the acquisition of Tier
One.

     We expect that our reported consolidated revenue numbers will
increase significantly in future periods as a result of continued
organic growth and our acquisition of Tier One.

Cost of Revenue and Gross Profit

     Cost of revenue was $640,309 and $137,938 for the quarters ended
March 31, 2006 and 2005, respectively, representing an increase of
$502,371 or 364%. The increase in absolute dollars was due to the
increased sales activity as described in the preceding paragraph.  The
increase also includes $40,376 as a direct result of the Tier One
acquisition.

     Our gross margin percentages were 25% and 33% for the quarters
ended March 31, 2006 and 2005, respectively. The decrease in the gross
margin percentages was primarily due to the nature of the Company's
contracts in the respective periods and the fact that, in the current
quarter, the Company has more consultants utilized on longer-term
contracts that provide a lower margin.

     We expect that our report consolidated cost of revenue and gross
margin will increase significantly in future periods as a result of
continued organic growth and our acquisition of Tier One.  We expect
that our future gross margin percentage will be fairly consistent with
the percentage we earned in the current quarter.

Operating Expenses

      Operating expenses were $566,423 and $568,705 for the quarters
ended March 31, 2006 and 2005, respectively, representing a decrease of
$2,282 or 0.4%.  We believe that this decrease was achieved, in light of
significantly increased revenues, because of the Company's increased
focus and execution on sales and cost containment and on achieving a
breakeven scenario on a cash basis.

     The major components of our operating expenses are as follows:

     Stock-based compensation expense was of $129,272 and $183,646 for
the quarters ended March 31, 2006 and 2005, respectively. This
represents a decrease of $54,374 or 30%. The decrease is principally the
result less shares vesting in the current quarter relative to the
comparative prior year period (253,150 versus 536,042) and a reduction
in the estimated fair value of options that resulted from current
assumptions used in the Black-Scholes option pricing model.

     Payroll, (excluding bonus), and related expenses are approximately
26% of our operating expenses and amounted to $146,916 and $187,315 for
the quarters ended March 31, 2006 and 2005, respectively. The decrease
of $40,399 or 22% resulted primarily from the fact that one of

                                      23
<PAGE>

our directors worked directly on a client project during the current
quarter, and accordingly, related expenses have been presented as cost
of revenue.

     We determine the cost of being public as including legal and
accountant fees, filing fees and investor relations. These expenses are
approximately 32% of the operating expenses and amounted to $182,224 and
$92,168 for the quarters ended March 31, 2006 and 2005, respectively.
This increase of $90,056 or 98% resulted largely from the fact that our
audit and accounting fees increased over 2005, as our operating
activities expanded, while we also undertook a investor relations
campaign.

     We also incurred operating expenses of $9,057 in the current
quarter that directly related to our acquisition of Tier One.

     We expect that our consolidated operating expenses will increase
significantly in future periods as a result of continued growth in
revenues and our acquisition of Tier One.  Additionally, we expect to
incur future non-cash amortization charges as a result of certain
intangible assets that we acquired in connection with the Tier One
acquisition.

Other Income (Expense)

     Other income (expense) was $31 and $993 for quarters ended March
31, 2006 and 2005, respectively. This income was primarily interest
income on maintained cash balances.  We do not expect to earn or incur
significant amounts of other income or expense.

     Income Tax Expense

     We recorded income tax expenses of $800 for each of the quarters
ended March 31, 2006 and 2005.  Such amount represents our minimum state
income tax liability.  We do not expect to incur significant amounts of
income tax expenses until we earn profits.

     Net loss

     We incurred a net loss of $352,781 and $501,928 for the quarters
ended March 31, 2006 and 2005, respectively, as a result of the factors
described above.

Liquidity  and Capital Resources

       Cash and cash equivalents were $838,411 and $99,760 as of March
31, 2006 and December 31, 2005, respectively. The increase in cash and
cash equivalents in the current quarter was a result of the cash
provided by our financing activities of $2,263,183 (which included sales
of our Series A preferred stock, sales of our common stock, and
exercises of stock options), less cash used in operations of $297,234,
and cash used by investing activities of $1,227,298 (which principally
included cash used in our acquisition of Tier One of $1,226,353).

                                      24
<PAGE>

     Net cash used by operations was $297,234 and $422,148 for the
quarters ended March 31, 2006 and 2005, respectively. The decrease in
cash used by operations was largely due to the decrease in our net loss.

     Net cash used by investing activities was $1,227,298 and $0 for the
quarters ended March 31, 2006 and 2005, respectively. On March 28, 2006,
we closed the acquisition of Tier One Consulting, Inc. in which we
acquired all of the outstanding shares of Tier One.  The purchase price
for the shares of Tier One was $2,750,000, of which $1,375,000 was paid
at closing and the balance of which is payable in two equal installments
on the first and second anniversary of the closing. As part of the
transaction, we received the closing bank accounts of Tier One.

     Net cash provided by financing activities was $2,263,183 and
$40,000 for the quarters ended March 31, 2006 and 2005, respectively. On
March 24, 2006, we entered into and closed a funding agreement with
Barron Partners, LP ("Barron"). Pursuant to the Agreement, which is more
fully described in Part I of this Form 10QSB, we issued 4,000,000 shares
of Series A Preferred Stock to Barron at $0.50 per share for net
proceeds of $1,790,000. Additionally during the quarters ended March 31,
2006 and 2005, we raised gross proceeds of $480,003 and $40,000
respectively, from the issuance of common stock through private
placements and the exercise of stock options.

     While both of these transactions, the Barron financing and the Tier
One acquisition, are more fully described elsewhere, management believes
that the funding and acquisition will enable us to attain a cash neutral
position within the next year.

     Additionally, we may continue to compensate employees with equity
incentives, where possible, and continue to utilize equity instruments
to compensate existing and new employees hired to minimize cash outlays.
Management believes this strategy provides the ability to increase
stockholder value as well as utilize cash resources more effectively.

     During future periods, we may seek additional funding to finance
future acquisitions. The amount and timing of such capital transactions
is not yet known and will depend largely on our operating needs and the
cost to acquire new information technology companies. Our ability to
secure this additional funding given present market conditions is
uncertain, as is the financial effect any such funding may have on our
capital structure or operating results.

Off-Balance Sheet Arrangements

     During the three months ended March 31, 2006, we did not engage in
any off-balance sheet arrangements.

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<PAGE>

Recent Accounting Pronouncements

     In December 2004, the FASB issued SFAS 123R, which revises SFAS
123, APB 25 and related accounting interpretations. SFAS 123R eliminates
the use of the intrinsic value method for employee stock-based
compensation and requires compensation costs related to share-based
payment transactions to be recognized in the financial statements over
the period that an employee provides service in exchange for the award.
SFAS 123R requires the expensing of all share-based compensation,
including options, using the fair value based method. We adopted this
standard on January 1, 2006.

     In December 2004, the FASB issued SFAS 153 which is based on the
principle that exchanges of nonmonetary assets should be measured based
on the fair value of the assets exchanged. SFAS 153 also replaces the
narrow exception for nonmonetary exchanges of similar productive assets
with a broader exception for exchanges of nonmonetary assets that do not
have commercial substance. APB 29 previously required that the
accounting for an exchange of a productive asset for a similar
productive asset or an equivalent interest in the same or similar
productive asset should be based on the recorded amount of the asset
relinquished. APB 29 provided an exception to its basic measurement
principle of fair value for exchanges of similar productive assets. The
FASB believes that exception required that some nonmonetary exchanges,
although commercially substantive, be recorded on a carryover basis. By
focusing the exception on exchanges that lack commercial substance, the
FASB believes SFAS 153 produces financial reporting that more faithfully
represents the economics of the transactions. SFAS 153 is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after
June 15, 2005. We evaluated the impact of the adoption of SFAS 153 and
we do not believe there was a significant impact to the Company's
overall results of operations or financial position.

     In May 2005, the FASB issued SFAS 154 which replaces APB 20 and
SFAS 3 to require retrospective application of changes in accounting
principle to prior periods' financial statements. The provisions of SFAS
154 are effective for accounting changes made in fiscal years beginning
after December 15, 2005. The adoption of SFAS 154 is not expected to
have a material effect on our financial statements.

     The FASB issued SFAS 155 in February 2006. SFAS 155 amends SFAS 133
and SFAS 140. SFAS 155 resolves issues addressed in Statement 133
Implementation Issue No. D1, Application of Statement 133 to Beneficial
Interests in Securitized Financial Assets. In summary, SFAS 155 permits
fair value remeasurement for any hybrid financial instrument that
contains an embedded derivative that otherwise would require
bifurcation. It also clarifies which interest-only strips and
principal-only strips are not subject to the requirements of SFAS 133
and establishes a requirement to evaluate interests in securitized
financial assets to identify interests that are freestanding derivatives
or that are hybrid financial instruments that contain embedded
derivative requiring bifurcation. SFAS 155 clarifies that concentrations
of credit risk in the form of subordination are not embedded derivatives
and amends SFAS 140 to eliminate the prohibition on qualifying
special-purpose entity from holding a derivative financial instrument
that pertains to a beneficial interest other than another derivative
financial instrument. This statement is effective for all financial
instruments acquired or issued after the beginning of an entity's first
fiscal year that begins after September 15, 2006. Earlier adoption is
permitted as of the beginning of an entity's fiscal year, provided the
entity has not yet issued financial statements, including financial
statements for any interim period for that fiscal year. We are presently
assessing the impact that the adoption of SFAS 155 will have on our
financial statements.

                                      26
<PAGE>

Forward-Looking Statements

     This report contains certain forward-looking statements and
information that are based on assumptions made by management and on
information currently available. When used in this report, the words
"anticipate," "believe," "estimate," "expect," "intend," "plan," and
similar expressions, as they relate to our company or its management,
are intended to identify forward-looking statements. These statements
reflect management's current view of our company concerning future
events and are subject to certain risks, uncertainties and assumptions,
including among many others the following: changes in the information
technology industry; changes in out-sourcing and off-shore operations; a
general economic downturn; a further downturn in the securities markets;
our early phase of operations; reliance on foreign suppliers and
contractors; the inability to locate suitable acquisition targets; and
other risks and uncertainties. Should any of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in
this report as anticipated, estimated or expected.

Item 3.  Controls and Procedures

     Disclosure Controls and Procedures.  Our principal executive
officer and principal financial officer, Sukhbir Singh Mudan, has
concluded, based on his evaluation, as of the end of the period covered
by this report, that our disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Exchange Act) are (1) effective to ensure
that material information required to be disclosed by us in reports
filed or submitted by us under the Exchange Act is recorded, processed,
summarized, and reported within the time periods specified in the  rules
and forms of the Securities and Exchange Commission, and (2) designed to
ensure that material information required to be disclosed by us in such
reports is accumulated, organized and communicated to our management,
including our principal executive officer and principal financial
officer, as appropriate, to allow timely decisions regarding required
disclosure.

     Internal Control Over Financial Reporting.  There were no changes
in our internal control over financial reporting (as defined in Rule
13a-15(f) under the Exchange Act) that occurred during our most recent
quarter ended March 31, 2006, that has materially affected, or is
reasonably likely to materially affect, our internal control over
financial reporting.

     We expect that we will be required to make changes in our internal
control over financial reporting as a result of our acquisition of Tier
One that is described elsewhere in this report.  We are presently
assessing the internal control of Tier One and any changes we may be
required to implement to Tier One's internal control, as well as our
internal control, to ensure that our disclosure controls and procedures
are designed and operating effectively.  Accordingly, we expect that our
Form 10-QSB for the period ending June 30, 2006, will report material
changes in our internal control over financial reporting.

                                      27
<PAGE>

     It should be noted that any system of controls, however well
designed and operated, can provide only reasonable and not absolute
assurance that the objectives of the system will be met. In addition,
the design of any control system is based in part upon certain
assumptions about the likelihood of future events.  Because of these and
other inherent limitations of control systems, there is only reasonable
assurance that our controls will succeed in achieving their stated goals
under all potential future conditions.

     Under current SEC guidelines, the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002 (the "Act") will be effective for our
year ending December 31, 2007.  In order to comply with the Act, we will
undertake a comprehensive effort, which includes documentation and
testing of the design and operation of its internal control using the
guidelines established by Internal Control - Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission.
During the course of these activities, we may identify certain internal
control matters that management believes should be improved.  These
improvements, if necessary, will likely include further formalization of
existing policies and procedures, improved segregation of duties,
additional information technology systems controls and additional
monitoring controls.  Because management has not presently determined
whether these matters will result in material weaknesses being
identified in the Company's internal control as defined by the Public
Company Accounting Oversight Board (United States), no assurances can be
given regarding the outcome of these efforts at the present time.

                                   PART II

                              OTHER INFORMATION

Item 2.  Unregistered Sales of Equity Securities

     During the quarter ended March 31, 2006, the following securities
were sold by us without registering the securities under the Securities
Act, except as otherwise previously reported:

  *  In February 2005 we entered into a consulting agreement with Robert
     Mitro, one of our directors, to provide consultation relating to
     general business and financials matters.  As part of the
     consideration to be paid for such services, we agreed to issue
     shares of our common stock at the rate of $5,000 per month.  The
     monthly fee is payable in shares of restricted stock at a price per
     share equal to the average closing bid (or sale if reported) price
     of the shares in the public trading market for the twenty trading
     days immediately preceding the first of the following month.  For
     services rendered for the month of March, 2006, we issued 6,147
     shares valued at $.81 per share.  These shares were issued without
     registration under the Securities Act by reason of the exemption
     from registration afforded by the provisions of Section 4(6) and/or
     Section 4(2) thereof, and Rule 506 promulgated thereunder, as a
     transaction by an issuer not involving any public offering.
     Mr. Mitro was an accredited investor as defined in Rule 501 of
     Regulation D at the time of issuance.  He delivered appropriate
     investment representations with respect to this

                                      28
<PAGE>

     issuance and consented to the imposition of restrictive legends upon
     the certificates evidencing such shares.  He represented that he had
     not entered into the transaction with us as a result of or
     subsequent to any advertisement, article, notice, or other
     communication published in any newspaper, magazine, or similar
     media or broadcast on television or radio, or presented at any
     seminar or meeting.  Mr. Mitro represented that he had been
     afforded the opportunity to ask questions of our management and to
     receive answers concerning the terms and conditions of the stock
     issuance.  No underwriting discounts or commissions were paid in
     connection with the transaction.

  *  On March 30, 2006, Robert Mitro exercised 150,000 of his vested
     options.  Proceeds to the company were $82,500.  The shares were
     issued without registration under the Securities Act by reason of
     the exemption from registration afforded by the provisions of
     Section 4(6) and/or Section 4(2) thereof, and Rule 506 promulgated
     thereunder, as a transaction by an issuer not involving any public
     offering.  Mr. Mitro was an accredited investor as defined in Rule
     501 of Regulation D at the time of the exercise.  He delivered
     appropriate investment representations with respect to this
     issuance and consented to the imposition of restrictive legends
     upon the documents evidencing the shares.  He represented that he
     had not entered into the transaction with us as a result of or
     subsequent to any advertisement, article, notice, or other
     communication published in any newspaper, magazine, or similar
     media or broadcast on television or radio, or presented at any
     seminar or meeting.  Mr. Mitro represented that he had been
     afforded the opportunity to ask questions of our management and to
     receive answers concerning the terms and conditions of the
     exercise.  No underwriting discounts or commissions were paid in
     connection with the issuance.

  *  On February 17, 2006, our compensation committee approved an
     engagement agreement with Ronald Vance, our secretary and outside
     counsel.  Pursuant to the terms of that engagement agreement we
     granted 13,404 shares to Mr. Vance for services rendered in the
     month of March.  All of the shares were granted without
     registration under the Securities Act by reason of the exemption
     from registration afforded by the provisions of Section 4(2)
     thereof, and Rule 506 promulgated thereunder, as a transaction by
     an issuer not involving any public offering.  Mr. Vance was a
     sophisticated investor as defined in Rule 501 of Regulation D at
     the time of the granting.  He delivered appropriate investment
     representations with respect to this issuance and consented to the
     imposition of restrictive legends upon the certificate evidencing
     the shares.  He represented that he had not entered into the
     transaction with us as a result of or subsequent to any
     advertisement, article, notice, or other communication published in
     any newspaper, magazine, or similar media or broadcast on
     television or radio, or presented at any seminar or meeting.  Mr.
     Vance was provided access to information similar to the type of
     information which would be included in a prospectus and was also
     afforded the opportunity to ask questions of our management and to
     receive answers concerning the terms and conditions of the
     issuance. No underwriting discounts or commissions were paid in
     connection with the issuance.

                                      29
<PAGE>

Item 5.  Other Information

Unregistered Sales of Equity Securities Following First Quarter

     In April 2006 we granted ten-year options to Richard Scott Leonard
to purchase 125,000 shares at $.70 per share for acceptance of position
as Director of SAP NetWeaver Service Line.  The options vest based upon
new revenues and book of business delivered to the company from
activities of Mr. Leonard, with the lone requirement that it be
profitable revenue in accordance with our policies/guidelines.  New
revenue will be reviewed every quarter.  Vesting would be based on new
revenues, divided by $4,000,000 times the total number of options
granted.  Any unvested options outstanding at the four (4) year six (6)
month anniversary of the date of hire shall automatically vest at that
time.  Options would also vest in the event of a Corporate Transaction,
as defined in the 2002 Stock Option/Stock Issuance Plan.  The options
were granted without registration under the Securities Act by reason of
the exemption from registration afforded by the provisions of Section
4(6) and/or Section 4(2) thereof, and Rule 506 promulgated thereunder,
as a transaction by an issuer not involving any public offering.  Mr.
Leonard was an accredited investor as defined in Rule 501 of Regulation
D at the time of the grant.  He delivered appropriate investment
representations with respect to this grant and consented to the
imposition of restrictive legends upon the option grant form.  He
represented that he had not entered into the transaction with us as a
result of or subsequent to any advertisement, article, notice, or other
communication published in any newspaper, magazine, or similar media or
broadcast on television or radio, or presented at any seminar or
meeting.  Mr. Leonard represented that he had been afforded the
opportunity to ask questions of our management and to receive answers
concerning the terms and conditions of the option grant.  No
underwriting discounts or commissions were paid in connection with the
transaction.

     In April 2006 we granted ten-year options to Rich Low to purchase
30,000 shares at $.70 per share for acceptance of position as Director
of Recruiting Operations.  The options vest one-fourth (1/4th) of the
total options granted at the end of the first year of services and
1/48th per month thereafter.  Options would also vest in the event of a
Corporate Transaction, as defined in the 2002 Stock Option/Stock
Issuance Plan.  The options were granted without registration under the
Securities Act by reason of the exemption from registration afforded by
the provisions of Section 4(6) and/or Section 4(2) thereof, and Rule 506
promulgated thereunder, as a transaction by an issuer not involving any
public offering.  Mr. Low was an accredited investor as defined in Rule
501 of Regulation D at the time of the grant.  He delivered appropriate
investment representations with respect to this grant and consented to
the imposition of restrictive legends upon the option grant form.  He
represented that he had not entered into the transaction with us as a
result of or subsequent to any advertisement, article, notice, or other
communication published in any newspaper, magazine, or similar media or
broadcast on television or radio, or presented at any seminar or
meeting.  Mr. Low represented that he had been afforded the opportunity
to ask questions of our management and to receive answers concerning the
terms and conditions of the option grant.  No underwriting discounts or
commissions were paid in connection with the transaction.

                                      30
<PAGE>

Warrants to Ascendiant Securities, LLC

     As previously reported, we issued common stock purchase warrants to
Ascendiant Securities, LLC in connection with the funding transaction
with Barron Partners LP, the closing of which occurred on March 24,
2006.  These warrants consisted of warrants to purchase 160,000 shares
at $0.50 per share, warrants to purchase 80,000 shares at $1.00 per
share, and warrants to purchase 80,000 shares at $1.50 per share.  We
previously reported that the forms of these warrants would be identical
to the warrant forms used in connection with the warrants issued to
Barron Partners LP.  In fact, the warrant forms used for Ascendiant
contained two modifications from the forms used for Barron Partners LP.
Section 5(e) in regard to a prohibition on the cashless exercise
provision of the warrant and Section 8 in regard to the call provision
were eliminated from the forms of the warrants issued to Ascendiant.
Copies of these revised forms are included as exhibits with this filing.

Item 6.  Exhibits

     The following exhibits are included as part of this report:

     4.1  Form of D Warrant exercisable at $0.50 issued to
          Ascendiant Securities
     4.2  Form of E Warrant exercisable at $1.00 issued to
          Ascendiant Securities
     4.3  Form of F Warrant exercisable at $1.50 issued to
          Ascendiant Securities
     31.1 Rule 13a-14(a) Certification by Principal Executive Officer
     31.2 Rule 13a-14(a) Certification by Principal Financial Officer
     32   Section 1350 Certification of Principal Executive Officer
          and Principal Financial Officer

                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Caneum, Inc.


Date:  May 15, 2006                     By /s/ Sukhbir Singh Mudan
                                           Sukhbir Singh Mudan,
                                           President and Treasurer
                                           (Principal executive officer,
                                           principal financial officer,
                                           and chief accounting officer)

                                      31