##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-QSB/A-1
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarter ended September 30, 2006
 o
    
    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.
  Nevada
State or other jurisdiction of 
incorporation or organization
    
    33-0916900
I.R.S. Employer I.D. No.3101 W. Coast Highway, Suite 400 Newport Beach, CA
(Address of principal executive offices)
    
    92663-4035
(Zip Code)
 (949) 273-4000
 þ o þ o
 o þ
  o þ




---



##### 



PageFinancial
StatementsCondensed Consolidated Balance Sheets  Assets
    
    
    4Condensed Consolidated Balance Sheets  Liabilities and Stockholders Equity
    
    
    5Condensed Consolidated Statements of Operations
    
    
    6Condensed Consolidated Statements of Cash Flows
    
    
    7Notes to Condensed Consolidated Financial Statements
    
    
    9Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




---



##### Table of Contents



EXPLANATION
       3




---



##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 
 September 30,
    
    
    December 31,2006
    
    
    2005UnauditedAs RestatedCURRENT ASSETSCash and cash equivalents, including restricted cash of $349,088 as of Sept 30,
2006
    
    $
    469,402
    
    
    $
    99,760Accounts receivable, net of allowance of $97,454 and $6,733, respectively
    
    
    1,730,975
    
    
    
    469,074Prepaid assets
    
    
    4,475
    
    
    
    68,750Other current assets
    
    
    15,000
    
    
    
    51,099Total current assets
    
    
    2,219,852
    
    
    
    688,683LONG TERM ASSETSProperty & equipment, net
    
    
    50,865
    
    
    
    14,557Intangibles, net
    
    
    836,800
    
    
    
    Goodwill
    
    
    1,464,805
    
    
    
    TOTAL ASSETS
    
    $
    4,572,322
    
    
    $
    703,240
   4




---



##### Table of Contents



September 30,
    
    
    December 31,2006
    
    
    2005UnauditedAs RestatedCURRENT LIABILITIESAccounts payable and accrued liabilities
    
    $
    635,194
    
    
    $
    284,656Credit lines
    
    
    175,448
    
    
    
    6,833Accrued payroll and related expenses
    
    
    144,251
    
    
    
    25,839Current portion of installment loans
    
    
    792,758
    
    
    
    Other current liabilities
    
    
    1,500
    
    
    
    Total current liabilities
    
    
    1,749,151
    
    
    
    317,328LONG TERM LIABILITIESInstallment loans, less current portion
    
    
    658,086
    
    
    
    Other non current liabilities
    
    
    9,300
    
    
    
    Total liabilities
    
    
    2,416,537
    
    
    
    317,328SHAREHOLDERS EQUITYPreferred stock, $0.001 par value 20,000,000 shares authorized, 3,632,500
and 0 shares issued and outstanding (Liquidation preference $1,816,250)
    
    
    3,632
    
    
    
    Common stock, $0.001 par value 100,000,000 shares authorized, 6,835,658
and 5,386,991 shares issued and outstanding
    
    
    6,835
    
    
    
    5,386Additional paid-in capital
    
    
    6,314,343
    
    
    
    3,434,328Deferred compensation
    
    
    (40,000
    )
    
    
    (40,000
    )Accumulated deficit
    
    
    (4,129,025
    )
    
    
    (3,013,802
    )Total shareholders equity
    
    
    2,155,785
    
    
    
    385,912TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    4,572,322
    
    
    $
    703,240
   5




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Unaudited
    
    
    Unaudited
    
    
    Unaudited
    
    
    UnauditedAs Restated
    
    
    
    
    
    As RestatedRevenue
    
    $
    2,112,935
    
    
    $
    739,417
    
    
    $
    4,997,138
    
    
    $
    1,379,321Cost of revenue
    
    
    1,571,142
    
    
    
    606,159
    
    
    
    3,684,580
    
    
    
    1,082,161Gross profit
    
    
    541,793
    
    
    
    133,258
    
    
    
    1,312,558
    
    
    
    297,160Operating expenses
    
    
    814,590
    
    
    
    340,000
    
    
    
    2,352,912
    
    
    
    1,382,825Loss from operations
    
    
    (272,797
    )
    
    
    (206,742
    )
    
    
    (1,040,354
    )
    
    
    (1,085,665
    )Interest income (expense), net
    
    
    (37,968
    )
    
    
    273
    
    
    
    (74,069
    )
    
    
    1,552Loss before income tax
    
    
    (310,765
    )
    
    
    (206,469
    )
    
    
    (1,114,423
    )
    
    
    (1,084,113
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    (800
    )
    
    
    (800
    )Net loss
    
    $
    (310,765
    )
    
    $
    (206,469
    )
    
    $
    (1,115,223
    )
    
    $
    (1,084,913
    )Beneficial Conversion Charge upon Issuance of
Preferred Shares
    
    
    
    
    
    
    
    
    
    $
    755,048
    
    
    
    Net Loss Attributable to Common Stockholders
    
    $
    (310,765
    )
    
    $
    (206,469
    )
    
    $
    (1,870,271
    )
    
    $
    (1,084,913
    )Basic and diluted net loss per common share
    
    $
    (0.05
    )
    
    $
    (0.04
    )
    
    $
    (0.31
    )
    
    $
    (0.24
    )Weighted average number of Common Shares
outstanding used in the calculation
    
    
    6,614,031
    
    
    
    4,738,032
    
    
    
    6,062,621
    
    
    
    4,559,043
   6




---



##### Table of Contents



For the Nine Months EndedSeptember 30,
    
    
    September 30,2006
    
    
    2005Unaudited
    
    
    UnauditedAs RestatedCASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (1,115,223
    )
    
    $
    (1,084,913
    )Adjustments to reconcile net loss to net cash
used in operating activitiesStock-based compensation expense
    
    
    379,902
    
    
    
    334,858Expenses paid by stock issuances
    
    
    107,164
    
    
    
    39,077Interest accreted to TierOne notes
    
    
    65,962
    
    
    
    Depreciation and amortization
    
    
    20,985
    
    
    
    705Amortization of acquired intangibles from business combinations
    
    
    143,200
    
    
    
    Bad Debt expense
    
    
    90,721
    
    
    
    (Increase) decrease inAccounts receivable
    
    
    (749,280
    )
    
    
    (83,711
    )Prepaid assets and other current assets
    
    
    112,084
    
    
    
    (33,565
    )Increase inAccounts payable and accrued liabilities
    
    
    69,884
    
    
    
    54,458Accrued payroll and related expenses
    
    
    118,412
    
    
    
    81,558Net cash used in operating activities
    
    
    (756,189
    )
    
    
    (691,533
    )CASH FLOWS FROM INVESTING ACTIVITIESCash paid for acquisition of TierOne Consulting, Inc., net of cash acquired
    
    
    (1,338,627
    )
    
    
    Purchase of fixed assets
    
    
    (17,161
    )
    
    
    (16,028
    )Net cash used in investing activities
    
    
    (1,355,788
    )
    
    
    (16,028
    )CASH FLOWS FROM FINANCING ACTIVITIESIssuance of common stock for cash
    
    
    350,004
    
    
    
    415,000Issuance of Series A preferred shares for cash, net
    
    
    1,790,000
    
    
    
    Payment of debt
    
    
    (64,602
    )
    
    
    Exercise of warrants
    
    
    105,000
    
    
    
    Exercise of options
    
    
    132,250
    
    
    
    Increase in credit line
    
    
    168,967
    
    
    
    9,368Net cash provided by financing activities
    
    
    2,481,619
    
    
    
    424,368Net increase (decrease) in cash and cash equivalents
    
    
    369,642
    
    
    
    (283,193
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    99,760
    
    
    
    506,790CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    469,402
    
    
    $
    223,597SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONInterest paid
    
    $
    17,881
    
    
    $
    Income taxes paid
    
    $
    800
    
    
    $
    800
   7




---



##### Table of Contents



Supplement disclosure of Non-Cash Investing and Financing Activities:
           8




---



##### Table of Contents



NOTE 1  PRIOR PERIOD RESTATEMENT
  September 30,
    
    
    Previously
    
    
    Restatement2006
    
    
    Reported
    
    
    AdjustmentAs restatedUnaudited
    
    
    Unaudited
    
    
    UnauditedCURRENT ASSETSCash and cash equivalents
    
    $
    469,402
    
    
    $
    469,402
    
    
    $
    Accounts receivable, net of allowance of $97,454
    
    
    1,730,975
    
    
    
    1,730,975
    
    
    
    Prepaid assets
    
    
    4,475
    
    
    
    19,054
    
    
    
    (14,579
    )Other current assets
    
    
    15,000
    
    
    
    15,000
    
    
    
    Total current assets
    
    
    2,219,852
    
    
    
    2,234,431
    
    
    
    (14,579
    )LONG TERM ASSETSProperty and equipment, net
    
    
    50,865
    
    
    
    46,771
    
    
    
    4,094Intangibles, net
    
    
    836,800
    
    
    
    795,642
    
    
    
    41,158Goodwill
    
    
    1,464,805
    
    
    
    1,612,500
    
    
    
    (147,695
    )TOTAL ASSETS
    
    $
    4,572,322
    
    
    $
    4,689,344
    
    
    $
    (117,022
    )CURRENT LIABILITIESAccounts payable and accrued liabilities
    
    $
    635,194
    
    
    $
    640,490
    
    
    $
    (5,296
    )Credit lines
    
    
    175,448
    
    
    
    149,360
    
    
    
    26,088Accrued payroll and related expenses
    
    
    144,251
    
    
    
    163,968
    
    
    
    (19,717
    )Current portion of installment loans
    
    
    792,758
    
    
    
    803,814
    
    
    
    (11,056
    )Other current liabilities
    
    
    1,500
    
    
    
    1,500
    
    
    
    Total current liabilities
    
    
    1,749,151
    
    
    
    1,759,132
    
    
    
    (9,981
    )LONG TERM LIABILITIESInstallment loans, less current portion
    
    
    658,086
    
    
    
    661,697
    
    
    
    (3,611
    )Other non current liabilities
    
    
    9,300
    
    
    
    9,300
    
    
    
    Total liabilities
    
    
    2,416,537
    
    
    
    2,430,129
    
    
    
    (13,592
    )SHAREHOLDERS EQUITYPreferred stock, $0.001 par value 20,000,000 shares
authorized 3,632,500 shares issued and outstanding
(Liquidation preference $1,816,250)
    
    
    3,632
    
    
    
    3,632
    
    
    
    Common stock. $0.001 par value 100,000,000 shares
authorized 6,835,658 shares issued and outstanding
    
    
    6,835
    
    
    
    6,860
    
    
    
    (25
    )Additional paid-in capital
    
    
    6,314,343
    
    
    
    6,279,383
    
    
    
    34,960Deferred compensation
    
    
    (40,000
    )
    
    
    (40,000
    )
    
    
    Accumulated deficit
    
    
    (4,129,025
    )
    
    
    (3,990,660
    )
    
    
    (138,365
    )Total shareholders equity
    
    
    2,155,785
    
    
    
    2,259,215
    
    
    
    (103,430
    )TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    4,572,322
    
    
    $
    4,689,344
    
    
    $
    (117,022
    )
  9




---



##### Table of Contents



For the Three Months EndedSeptember 30,
    
    
    Previously
    
    
    Restatement2006
    
    
    Reported
    
    
    AdjustmentAs restatedUnaudited
    
    
    Unaudited
    
    
    UnauditedRevenue
    
    $
    2,112,935
    
    
    $
    2,127,211
    
    
    $
    (14,276
    )Cost of revenue
    
    
    1,571,142
    
    
    
    1,575,373
    
    
    
    (4,231
    )Gross profit
    
    
    541,793
    
    
    
    551,838
    
    
    
    (10,045
    )Operating expenses
    
    
    814,590
    
    
    
    730,995
    
    
    
    83,595Loss from operations
    
    
    (272,797
    )
    
    
    (179,157
    )
    
    
    (93,640
    )Interest expense, net
    
    
    (37,968
    )
    
    
    (35,215
    )
    
    
    (2,753
    )Loss before income tax
    
    
    (310,765
    )
    
    
    (214,372
    )
    
    
    (96,393
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (310,765
    )
    
    $
    (214,372
    )
    
    $
    (96,393
    )Beneficial Conversion Charge upon issuance of
Preferred Shares
    
    
    
    
    
    
    
    
    
    
    Net Loss Attributable to Common Stockholders
    
    $
    (310,765
    )
    
    $
    (214,372
    )
    
    $
    (96,393
    )Basic and diluted net loss per common share
    
    $
    (0.05
    )
    
    $
    (0.03
    )
    
    $
    (0.02
    )Weighted average number of Common Shares
outstanding used in the calculation
    
    
    6,614,031
    
    
    
    6,614,031
    
    
    
    
  10




---



##### Table of Contents



For the Nine Months EndedSeptember 30,
    
    
    Previously
    
    
    Restatement2006
    
    
    Reported
    
    
    AdjustmentAs restatedUnaudited
    
    
    Unaudited
    
    
    UnauditedRevenue
    
    $
    4,997,138
    
    
    $
    5,027,337
    
    
    $
    (30,199
    )Cost of revenue
    
    
    3,684,580
    
    
    
    3,679,398
    
    
    
    5,182Gross profit
    
    
    1,312,558
    
    
    
    1,347,939
    
    
    
    (35,381
    )Operating expenses
    
    
    2,352,912
    
    
    
    2,255,209
    
    
    
    97,703Loss from operations
    
    
    (1,040,354
    )
    
    
    (907,270
    )
    
    
    (133,084
    )Interest expense, net
    
    
    (74,069
    )
    
    
    (68,788
    )
    
    
    (5,281
    )Loss before income tax
    
    
    (1,114,423
    )
    
    
    (976,058
    )
    
    
    (138,365
    )Income tax expense
    
    
    (800
    )
    
    
    (800
    )
    
    
    Net loss
    
    $
    (1,115,223
    )
    
    $
    (976,858
    )
    
    $
    (138,365
    )Beneficial Conversion Charge upon issuance of
Preferred Shares
    
    
    755,048
    
    
    
    
    
    
    
    755,048Net Loss Attributable to Common Stockholders
    
    $
    (1,870,271
    )
    
    $
    (976,858
    )
    
    $
    (893,413
    )Basic and diluted net loss per common share
    
    $
    (0.31
    )
    
    $
    (0.16
    )
    
    $
    (0.15
    )Weighted average number of Common Shares
outstanding used in the calculation
    
    
    6,062,621
    
    
    
    6,062,621
    
    
    
    
  11




---



##### Table of Contents



*
    12




---



##### Table of Contents



NOTE 2  CORPORATE HISTORY
 Organization
   Basis of Presentation
    13




---



##### Table of Contents



NOTE 3  SIGNIFICANT ACCOUNTING POLICIES
 Consolidation
  Revenue Recognition
 Revenue Recognition
 Segment Reporting
  Customer Concentrations
  Accounts Receivable
  Cash and Cash Equivalents
   14




---



##### Table of Contents



Stock-Based Compensation
 Share-Based
Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to
Employees
  Impact of SFAS No. 123R
  Nine monthsended September 30, 2006Stock-based compensation expense
    
    $
    379,902Effect on net loss per share:Basic and diluted
    
    $
    (0.06
    )
   15




---



##### Table of Contents



Pro forma for 2005 Under SFAS No. 123
  Three months
    
    
    Nine monthsended September 30,
    
    
    ended September 30,2005
    
    
    2005Net loss as reported
    
    $
    (206,469
    )
    
    $
    (1,084,913
    )Add: stock option-based employee compensation expense included in reported
net loss, net of related tax effects
    
    
    6,657
    
    
    
    334,858Deduct: stock-based employee compensation expense, net of related tax effects
    
    
    (241,748
    )
    
    
    (1,132,630
    )Pro forma
    
    $
    (441,560
    )
    
    $
    (1,882,685
    )Basic and diluted net loss per share, as reported
    
    $
    (0.04
    )
    
    $
    (0.24
    )Basic and diluted net loss per share, pro forma
    
    $
    (0.09
    )
    
    $
    (0.41
    )
     Goodwill and Other Intangible Assets
 Goodwill and Other Intangible Assets,
  16




---



##### Table of Contents



Accounting
for the Impairment or Disposal of Long-lived Assets.
 Fair Value of Financial Instruments
  Accounting for Income Taxes
 Accounting for Income Taxes
 Long-Lived Assets
  Property & Equipment
    17




---



##### Table of Contents



Per Share Data
 Earnings Per
Share, Computations of Earnings Per
Share
 Use of Estimates
  New Accounting Pronouncements
 Accounting for Servicing of Financial Assets  an Amendment of FASB Statement No. 140
   18




---



##### Table of Contents



NOTE 4  RELATED PARTY TRANSACTIONS
  Rent
    19




---



##### Table of Contents



Investor Relations
  Consulting Services
  Revenue
  NOTE 5  INTANGIBLE ASSETS
  Goodwill
and Other Intangible Assets,
   20




---



##### Table of Contents



NOTE 6  INCOME TAX
  NOTE 7  BARRON FINANCING
    21




---



##### Table of Contents



22




---



##### Table of Contents



NOTE 8  TIER ONE TRANSACTION
  Allocated to purchase price:
    
    $
    2,971,700Accounts receivable and cash
    
    
    777,800Fixed assets
    
    
    40,200Trademarks
    
    
    90,000Customer contracts & relationships
    
    
    737,000Employment contracts
    
    
    78,000Less liabilities assumed
    
    
    (216,100
    )Total identifiable assets, net
    
    
    1,506,900Remaining balance to goodwill
    
    $
    1,464,800
  23




---



##### Table of Contents



NOTE 9  COMMON STOCK TRANSACTIONS
       NOTE 10  STOCK PLAN
     24




---



##### Table of Contents



For the nine months ended
    
    
    For the nine months endedSeptember 30, 2006
    
    
    September 30, 2005Weighted-Average
    
    
    
    
    
    
    Weighted-AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding at January 1
    
    
    4,636,250
    
    
    $
    0.81
    
    
    
    3,990,000
    
    
    $
    0.67Granted during the nine months ended September 30,
    
    
    2,795,000
    
    
    $
    0.78
    
    
    
    1,377,500
    
    
    $
    1.84Cancelled/forfeited
    
    
    (148,125
    )
    
    $
    1.86
    
    
    
    (31,250
    )
    
    $
    1.65Exercised
    
    
    (240,454
    )
    
    $
    0.54
    
    
    
    
    
    
    $
    Outstanding at September 30
    
    
    7,042,671
    
    
    $
    0.79
    
    
    
    5,336,250
    
    
    $
    0.97Options exercisable at September 30
    
    
    5,020,949
    
    
    $
    0.79
    
    
    
    4,074,739
    
    
    $
    0.97Weighted-average fair value of options granted during the
period
    
    
    
    
    
    $
    0.52
    
    
    
    
    
    
    $
    0.58
  
    
    50,000 warrants for common shares at $0.75 each. These warrants were issued during
2005 and were 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.
    
    The Company issued 100,667 shares of common stock in a private placement dated October 1,
2005, with accompanying Common Stock Purchase Warrants at the rate of 50% of the shares
purchased. Accordingly 50,333 warrants are outstanding related to this common stock. The
warrants are exercisable at $1.00 with certain incentive discounts to the exercise price
available through December 31, 2009.
    
    The Company issued 466,671 shares of common stock in a private placement dated January 2,
2006, with accompanying Common Stock Purchase Warrants at the rate of 50% of the shares
purchased. Accordingly 233,336 warrants are outstanding related to this common stock. The
warrants are exercisable at $1.00 with certain incentive discounts to the exercise price
available through March 31, 2010.
    
    At September 30, 2006 the Company had 8,493,668 warrants outstanding at a weighted average
exercise price of $0.87.
  25




---



##### Table of Contents



NOTE 11  NOTES PAYABLE
 Credit Lines
    Installment Loans Payable to Tier One Consulting Principals
   26




---



##### Table of Contents



Item 2. Managements Discussion and Analysis and Plan of Operation
  Forward-Looking Statements
  Background
   27




---



##### Table of Contents



Critical Accounting Policies
 Share-Based Payment Accounting for Stock-Based
Compensation Accounting for
Stock Issued to Employees
 28
    Table of Contents  Results of Operations
 Three Months and Nine months ended September 30, 2006 versus the Three Months and Nine months ended
September 30, 2005
 Revenue
   Cost of Revenue and Gross Profit
   29
    Table of Contents  Operating Expenses
       30
    Table of Contents  Net loss
   Liquidity and Capital Resources
     31
    Table of Contents    Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
 Accounting for Servicing of Financial Assets
   32
    Table of Contents   Item 3. Controls and Procedures
 Internal Control over Financial Reporting
   Disclosure Controls and Procedures
 33
    Table of Contents  PART II
OTHER INFORMATION
 Item 6. Exhibits
  31.1
    
    Rule 13a-14(a) Certification by Principal Executive Officer31.2
    
    Rule 13a-14(a) Certification by Principal Financial Officer32.1
    
    Section 1350 Certification of Principal Executive Officer32.2
    
    Section 1350 Certification of Principal Financial Officer
 SIGNATURES
  Caneum, Inc.Date:  October 12, 2007
    By:

/s/
Suki MudanSuki Mudan, President(Principal executive officer)Date:  October 12, 2007
    By:

Gary
AllhusenGary Allhusen, Chief Operating Officer(Principal financial officer)  34