##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarter ended March 31, 2008
 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
    
    33-0916900State or other jurisdiction of 
incorporation or organization
    
    I.R.S. Employer I.D. No.3101 West Coast Highway, Suite 400, Newport Beach, CA
(Address of principal executive offices)
    
    92663
(Zip Code)
 (949) 273-4000
 þ o þ o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer o
    
    Smaller reporting company þ
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Contents
 PART I
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operation
    
    
    18Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T. Controls and Procedures
    
    
    23PART II
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 6. Exhibits
    
    
    25SIGNATURES
    
    
    25Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I
 FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CANEUM, INC.
March 31, 2008 and December 31, 2007
 Condensed Consolidated Balance Sheets
Assets
 March 31,
    
    
    December 31,2008
    
    
    2007Unaudited
    
    
    NoteCURRENT ASSETSCash and cash equivalents
    
    $
    72,028
    
    
    $
    46,280Accounts receivable, net of allowance of $390,271 and $392,157, respectively
    
    
    1,934,536
    
    
    
    1,559,352Accounts
receivable from related parties, net of allowance of $153,852 at
March 31, 2008
    
    
    44,910
    
    
    
    111,010Prepaid assets
    
    
    134,533
    
    
    
    134,764Other current assets
    
    
    33,476
    
    
    
    33,202Total current assets
    
    
    2,219,483
    
    
    
    1,884,608LONG TERM ASSETSProperty & equipment, net
    
    
    179,498
    
    
    
    193,843Intangibles, net
    
    
    592,200
    
    
    
    643,555Goodwill
    
    
    1,464,805
    
    
    
    1,464,805Other
    
    
    32,227
    
    
    
    32,264TOTAL ASSETS
    
    $
    4,488,213
    
    
    $
    4,219,075
    3




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##### Table of Contents



CANEUM, INC.
March 31, 2008 and December 31, 2007
 Condensed Consolidated Balance Sheets
Liabilities and Shareholders Equity
 March 31,
    
    
    December 31,2008
    
    
    2007Unaudited
    
    
    NoteCURRENT LIABILITIESAccounts payable
    
    $
    1,827,276
    
    
    $
    1,552,870Accrued expenses
    
    
    45,143
    
    
    
    25,975Credit lines
    
    
    1,516,067
    
    
    
    1,231,694Accrued payroll and related expenses
    
    
    271,595
    
    
    
    248,287Deferred revenue
    
    
    47,026
    
    
    
    22,880Current portion of installment loans
    
    
    725,593
    
    
    
    734,974Other current liabilities
    
    
    106,385
    
    
    
    90,992Total current liabilities
    
    
    4,539,085
    
    
    
    3,907,672LONG TERM LIABILITIESCurrent portion of installment loan reclassified to non-current
    
    
    
    
    
    
    200,000Promissory notes  related party
    
    
    250,000
    
    
    
    Installment loans, less current portion
    
    
    15,459
    
    
    
    17,894Other non current liabilities
    
    
    64,023
    
    
    
    61,058Total liabilities
    
    
    4,868,567
    
    
    
    4,186,624SHAREHOLDERS EQUITYPreferred stock, $0.001 par value 20,000,000 shares authorized, 3,332,500
and 3,332,500 shares issued and outstanding (Liquidation preference $1,666,250)
    
    
    3,332
    
    
    
    3,332Common stock, $0.001 par value 100,000,000 shares authorized, 9,173,293
and 8,896,368 shares issued and outstanding
    
    
    9,171
    
    
    
    8,895Additional paid-in capital
    
    
    8,922,097
    
    
    
    8,708,827Accumulated other comprehensive income
    
    
    78,009
    
    
    
    87,416Accumulated deficit
    
    
    (9,392,961
    )
    
    
    (8,776,019
    )Total shareholders equity (deficit)
    
    
    (380,352
    )
    
    
    32,451TOTAL LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
    
    $
    4,488,213
    
    
    $
    4,219,075
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CANEUM, INC.
March 31, 2008 and 2007
 Condensed Consolidated Statements of
Operations and Comprehensive Income (Loss)
Unaudited
 Three Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007Revenue
    
    $
    3,236,624
    
    
    $
    2,750,373Cost of revenue
    
    
    2,727,087
    
    
    
    2,188,212Gross profit
    
    
    509,537
    
    
    
    562,161Operating expenses
    
    
    1,079,371
    
    
    
    1,109,955Loss from operations
    
    
    (569,834
    )
    
    
    (547,794
    )Other income (expense)Interest expense, net
    
    
    (55,306
    )
    
    
    (52,492
    )Gain (loss) on foreign exchange
    
    
    9,838
    
    
    
    (14,303
    )Total other income (expense)
    
    
    (45,468
    )
    
    
    (66,795
    )Minority Interest
    
    
    
    
    
    
    (68,378
    )Loss before income tax
    
    
    (615,302
    )
    
    
    (682,967
    )Income tax expense
    
    
    (1,640
    )
    
    
    (2,984
    )Net loss
    
    $
    (616,942
    )
    
    $
    (685,951
    )Basic and diluted net loss per common share
    
    $
    (0.07
    )
    
    $
    (0.09
    )Weighted average number of Common Shares
outstanding used in the calculation
    
    
    9,055,571
    
    
    
    7,946,621Net loss
    
    $
    (616,942
    )
    
    $
    (685,951
    )Comprehensive Income:Foreign currency translation adjustment (Note 2)
    
    
    (9,407
    )
    
    
    14,056Comprehensive Loss
    
    $
    (626,349
    )
    
    $
    (671,895
    )
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CANEUM, INC.
March 31, 2008 and 2007
Condensed Consolidated Statements of Cash Flows
Unaudited
 For the Three MonthsMarch 31,
    
    
    March 31,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (616,942
    )
    
    $
    (685,951
    )Adjustments to reconcile net loss to net cash used in operating activitiesStock option compensation expense
    
    
    127,913
    
    
    
    161,857Expenses paid by common stock issuances or committed issuances
    
    
    35,176
    
    
    
    174,035Interest accreted to TierOne installment loans
    
    
    19,204
    
    
    
    17,026Depreciation and amortization
    
    
    28,069
    
    
    
    17,464Amortization of acquired intangibles
    
    
    50,626
    
    
    
    67,188Bad debt expense
    
    
    20,000
    
    
    
    Minority interest
    
    
    
    
    
    
    68,378(Increase) decrease inAccounts receivable
    
    
    (335,750
    )
    
    
    (189,980
    )Prepaid assets and other current assets
    
    
    (1,479
    )
    
    
    (45,425
    )Increase inAccounts payable and accrued expenses
    
    
    293,824
    
    
    
    151,020Accrued payroll and related expenses
    
    
    77,521
    
    
    
    40,258Deferred revenue
    
    
    24,146
    
    
    
    31,373Other current liabilities
    
    
    15,687
    
    
    
    Net cash used in operating activities
    
    
    (262,005
    )
    
    
    (192,756
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property & equipment
    
    
    (15,265
    )
    
    
    (18,663
    )Net cash used in investing activities
    
    
    (15,265
    )
    
    
    (18,663
    )CASH FLOWS FROM FINANCING ACTIVITIESIssuance of
promissory notes  related party
    
    
    50,000
    
    
    
    Payment of debt
    
    
    (49,484
    )
    
    
    (441,381
    )Addition to debt
    
    
    18,750
    
    
    
    24,225Increase in credit lines
    
    
    284,373
    
    
    
    834,054Net cash provided by financing activities
    
    
    303,639
    
    
    
    416,898Effect of changes in foreign currency exchange rates on cash
    
    
    (621
    )
    
    
    4,012Net increase (decrease) in cash and cash equivalents
    
    
    25,748
    
    
    
    209,491CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    46,280
    
    
    
    335,202CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    72,028
    
    
    $
    544,693SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONInterest paid
    
    $
    21,367
    
    
    $
    38,076Income taxes paid
    
    $
    1,626
    
    
    $
    2,984
 Supplemental disclosure of non cash investing and financing activities:
 During the three months ended March 31, 2008, the Company converted $200,000 of
installment debt due to the former Principals of Tier One into $200,000 of Promissory
Notes due in 2011.
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NOTE 1  CORPORATE HISTORY
 Organization
   Basis of Presentation
    7




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NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
 Consolidation
  Revenue Recognition
 Revenue Recognition
 Segment Reporting
   8




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Stock-Based Compensation
 Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
  Foreign Currency
   Use of Estimates
   9




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Comprehensive Income
 Reporting
Comprehensive Income
 NOTE 3  GOING CONCERN UNCERTAINTY
    10




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NOTE 4  PROMISSORY NOTES  RELATED PARTY
  NOTE 5  RELATED PARTY TRANSACTIONS
  Customer
   NOTE 6  BARRON FINANCING
   11




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NOTE 7  TIER ONE TRANSACTION
   12




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NOTE 8  STOCK PLAN
    13




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NOTE 9  NOTES PAYABLE
 Credit Lines
   Installment Loans Payable to Tier One Consulting Principals
    14




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NOTE 10  LITIGATION
 Barron Litigation
     15




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Innofone Litigation
  Publishing Concepts, L.P.
     16




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2008
    
    $
    133,2982009
    
    $
    181,4472010
    
    $
    138,365
   2008
    
    $
    77,8792009
    
    $
    75,1182010
    
    $
    51,2982011
    
    $
    7,900
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation
  Forward-Looking Statements
  Background
  Overview
   18




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
    
    Customer Support, including call centers and web agents for online and
offline technical, customer and product support;
    
    Human Resources, including benefits packages, pre-employment screening,
retained and contingent recruiting and information technology centric
staffing;
    
    Sales and Marketing, including online web agents, lead generation and
distribution channel expansion;
    
    Investor Relations and Public Relations, including audio transcription
and web development, deployment and maintenance for investor
communications; and
    
    Finance and Accounting, including data entry and back office processing.
  Results of Operations
 Three months ended March 31, 2008, versus the three months ended March 31, 2007
 Revenue
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Cost of Revenue and Gross Profit
   Operating Expenses
   
    
    Stock-Based Compensation expense and Expenses Paid by Stock Issuance
were $163,089 and $335,892 for the three months ended March 31, 2008 and 2007,
respectively. This represents a decrease of $172,803 and principally results
from the lower value of our stock used as incentives for services.
    
    U.S. Payroll and Related Expenses, (excluding stock based) amounted to $407,326
and $343,561 for the three months ended March 31, 2008 and 2007, respectively.
The increase of $63,765 or 19% resulted from the increase in our infrastructure
to expand our business growth. U.S, Payroll and Related Expenses is expected
decrease beginning in the second quarter of 2008 as a result of the departure
of three senior executives.
    
    U.S. Professional Services, including legal, auditing and other
consulting services amounted to $186,912 and $127,278 during the first quarter
of 2008 and 2007 respectively. The increase of $59,634 was primarily
attributable to the legal costs associated with litigation against Innofone.com
and Barron Partners LP.
    
    Most expenses of our wholly-owned India subsidiary are a direct cost of
revenue and are recoded as such. Operating expenses of our India subsidiary,
excluding depreciation and amortization, were $109,032 and $53,793 for the
three months ended March 31, 2008 and 2007, respectively.
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Other Income (Expense)
  Net loss
 We incurred a net loss of $616,942 and $685,951 for the three months ended March 31, 2008 and
2007, respectively, as a result of the factors described above.
 Liquidity and Capital Resources
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Off-Balance Sheet Arrangements
  Recent Accounting Pronouncements
     22




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4T. Controls and Procedures
 Disclosure Controls and Procedures
     23




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Managements Report on Internal Control over Financial Reporting
     Changes in Internal Control Over Financial Reporting
   24




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PART II
OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Barron Litigation
  Publishing Concepts, L.P.
  Item 2, Sale of Unregistered Securities
  
 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
 
   Caneum, Inc.Date:  May 20, 2008
    By

/s/
Suki MudanSuki Mudan, President(Principal Executive and Financial Officer)  25