##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-QSB/A-2
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarter ended March 31, 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
 o þ þ o
 o þ
  o þ




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##### 



PART I
FINANCIAL INFORMATION
 Item 1 Financial Statements
 
 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




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EXPLANATION
      3




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PART I
FINANCIAL INFORMATION
 
 
 March 31,
    
    
    December 31,2006
    
    
    2005(Unaudited)As RestatedCURRENT ASSETSCash and cash equivalents, including restricted cash of $343,750 as of March 31, 2006
    
    $
    838,411
    
    
    $
    99,760Accounts receivable, net of allowance of $9,454 and $6,733 at Mar 31, 2006 and Dec 31, 2005 respectively
    
    
    1,112,247
    
    
    
    469,074Prepaid assets  related parties
    
    
    75,270
    
    
    
    68,750Prepaid assets
    
    
    72,959
    
    
    
    51,099Other current assets
    
    
    15,000
    
    
    
    Total current assets
    
    
    2,113,887
    
    
    
    688,683LONG TERM ASSETSProperty & equipment, net
    
    
    51,695
    
    
    
    14,557Intangibles, net
    
    
    928,400
    
    
    
    Goodwill
    
    
    1,464,805
    
    
    
    Other
    
    
    1,150
    
    
    
    TOTAL ASSETS
    
    $
    4,559,937
    
    
    $
    703,240
   4




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March 31,
    
    
    December 31,2006
    
    
    2005(Unaudited)As RestatedCURRENT LIABILITIESAccounts payable and accrued liabilities
    
    $
    415,276
    
    
    $
    284,656Credit lines
    
    
    250
    
    
    
    6,833Accrued payroll and related expenses
    
    
    135,265
    
    
    
    25,839Current portion of installment loans
    
    
    750,348
    
    
    
    Other current liabilities
    
    
    1,500
    
    
    
    Total current liabilities
    
    
    1,302,639
    
    
    
    317,328LONG TERM LIABILITIESInstallment loans, less current portion
    
    
    699,136
    
    
    
    Other non current liabilities
    
    
    9,300
    
    
    
    Total liabilities
    
    
    2,011,075
    
    
    
    317,328SHAREHOLDERS EQUITYPreferred stock, $0.001 par value 20,000,000 shares authorized, 4,000,000
and 0 shares issued and outstanding (Liquidation preference $2,000,000)
    
    $
    4,000
    
    
    $
    Common stock, $0.001 par value 100,000,000 shares authorized, 6,177,045
and 5,386,991 shares issued and outstanding
    
    
    6,177
    
    
    
    5,386Additional paid-in capital
    
    
    5,916,039
    
    
    
    3,434,328Deferred compensation
    
    
    (40,000
    )
    
    
    (40,000
    )Accumulated deficit
    
    
    (3,337,354
    )
    
    
    (3,013,802
    )Total shareholders equity
    
    
    2,548,862
    
    
    
    385,912TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    4,559,937
    
    
    $
    703,240
   5




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Three Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005Unaudited
    
    
    UnauditedAs RestatedRevenue
    
    $
    900,675
    
    
    $
    204,522Cost of revenue
    
    
    652,896
    
    
    
    137,938Gross profit
    
    
    247,779
    
    
    
    66,584Operating expenses
    
    
    570,562
    
    
    
    568,705Loss from operations
    
    
    (322,783
    )
    
    
    (502,121
    )Other income (expense)Interest income (expense), net
    
    
    31
    
    
    
    993Total other income (expense)
    
    
    31
    
    
    
    993Loss before income tax
    
    
    (322,752
    )
    
    
    (501,128
    )Income tax expense
    
    
    (800
    )
    
    
    (800
    )Net loss
    
    $
    (323,552
    )
    
    $
    (501,928
    )Beneficial Conversion Charge upon Issuance of
Preferred Shares
    
    
    755,048
    
    
    
    Net Loss Attributable to Common Stockholders
    
    $
    (1,078,600
    )
    
    $
    (501,928
    )Basic and diluted net loss per common share
    
    $
    (0.19
    )
    
    $
    (0.11
    )Weighted average number of Common Shares
outstanding used in the calculation
    
    
    5,820,551
    
    
    
    4,405,277
   6




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##### Table of Contents



For the Three Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005Unaudited
    
    
    UnauditedAs RestatedCASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (323,552
    )
    
    $
    (501,928
    )Adjustments to reconcile net loss to net cash used in operating activitiesStock-based compensation expense
    
    
    129,272
    
    
    
    183,646Expenses paid by stock issuances
    
    
    15,000
    
    
    
    9,077Depreciation and amortization
    
    
    3,939
    
    
    
    Amortization of acquired intangibles from business combinations
    
    
    1,600
    
    
    
    Bad Debt expense
    
    
    2,721
    
    
    
    (Increase) decrease inAccounts receivable
    
    
    (42,551
    )
    
    
    (113,674
    )Prepaid expenses and other current assets
    
    
    16,380
    
    
    
    Increase (decrease) inAccounts payable and accrued expenses
    
    
    (100,033
    )
    
    
    (57,660
    )Accrued payroll and related expenses
    
    
    109,426
    
    
    
    58,391Net cash used in operating activities
    
    
    (187,798
    )
    
    
    (422,148
    )CASH FLOWS FROM INVESTING ACTIVITIESCash paid for acquisition of TierOne Consulting, Inc., net of cash acquired
    
    
    (1,338,627
    )
    
    
    Purchase of property and equipment
    
    
    (945
    )
    
    
    Net cash used in investing activities
    
    
    (1,339,572
    )
    
    
    CASH FLOWS FROM FINANCING ACTIVITIESIssuance of common stock and warrants for cash
    
    
    350,004
    
    
    
    40,000Issuance of Series A Preferred Shares and warrants for cash, net
    
    
    1,790,000
    
    
    
    Payment of debt
    
    
    (6,231
    )
    
    
    Exercise of options
    
    
    132,250
    
    
    
    Net cash provided by financing activities
    
    
    2,266,023
    
    
    
    40,000Net increase (decrease) in cash and cash equivalents
    
    
    738,653
    
    
    
    (382,148
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    99,760
    
    
    
    506,790CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    838,413
    
    
    $
    124,642SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONInterest Paid
    
    $
    430
    
    
    
    Income taxes paid
    
    $
    800
    
    
    $
    800
   7




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8




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NOTE 1  PRIOR PERIOD RESTATEMENT
 March 31,
    
    
    Previously
    
    
    Restatement2006
    
    
    Reported
    
    
    AdjustmentAs RestatedUnaudited
    
    
    Unaudited
    
    
    UnauditedCURRENT ASSETSCash and cash equivalents
    
    $
    838,411
    
    
    $
    838,411
    
    
    $
    Accounts receivable
    
    
    1,112,247
    
    
    
    1,205,637
    
    
    
    (93,390
    )Prepaid assets  related parties
    
    
    75,270
    
    
    
    82,695
    
    
    
    (7,425
    )Prepaid assets
    
    
    72,959
    
    
    
    66,326
    
    
    
    6,633Other current assets
    
    
    15,000
    
    
    
    15,000
    
    
    
    Total current assets
    
    
    2,113,887
    
    
    
    2,208,069
    
    
    
    (94,182
    )LONG TERM ASSETSProperty and equipment, net
    
    
    51,695
    
    
    
    51,695
    
    
    
    Intangibles, net
    
    
    928,400
    
    
    
    836,400
    
    
    
    92,000Goodwill
    
    
    1,464,805
    
    
    
    1,432,214
    
    
    
    32,591Other
    
    
    1,150
    
    
    
    
    
    
    
    1,150TOTAL ASSETS
    
    $
    4,559,937
    
    
    $
    4,528,378
    
    
    $
    31,559CURRENT LIABILITIESAccounts payable and accrued liabilities
    
    $
    415,276
    
    
    $
    464,833
    
    
    $
    (49,557
    )Credit lines
    
    
    250
    
    
    
    13
    
    
    
    237Accrued payroll and related expenses
    
    
    135,265
    
    
    
    132,086
    
    
    
    3,179Current portion of Installment loans
    
    
    750,348
    
    
    
    772,564
    
    
    
    (22,216
    )Other current liabilities
    
    
    1,500
    
    
    
    1,500
    
    
    
    Total current liabilities
    
    
    1,302,639
    
    
    
    1,370,996
    
    
    
    (68,357
    )LONG TERM LIABILITIESInstallment loans
    
    
    699,136
    
    
    
    695,674
    
    
    
    3,462Other non current liabilities
    
    
    9,300
    
    
    
    9,300
    
    
    
    Total liabilities
    
    
    2,011,075
    
    
    
    2,075,970
    
    
    
    (64,895
    )SHAREHOLDERS EQUITYPreferred stock, $0.001 par value 20,000,000 shares
authorized 4,000,000 shares issued and outstanding
(Liquidation preference $2,000,000)
    
    $
    4,000
    
    
    $
    4,000
    
    
    $
    Common stock. $0.001 par value 100,000,000 shares
authorized 6,177,045 shares issued and outstanding
    
    
    6,177
    
    
    
    6,177
    
    
    
    Additional paid-in capital
    
    
    5,916,039
    
    
    
    5,848,814
    
    
    
    67,225Deferred compensation
    
    
    (40,000
    )
    
    
    (40,000
    )
    
    
    Accumulated deficit
    
    
    (3,337,354
    )
    
    
    (3,366,583
    )
    
    
    29,229Total shareholders equity
    
    
    2,548,862
    
    
    
    2,452,408
    
    
    
    96,454TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    4,559,937
    
    
    $
    4,528,378
    
    
    $
    31,559
  9




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For the Three Months EndedMarch 31,
    
    
    Previously
    
    
    Restatement2006
    
    
    Reported
    
    
    AdjustmentAs RestatedUnaudited
    
    
    Unaudited
    
    
    UnauditedRevenue
    
    $
    900,675
    
    
    $
    854,719
    
    
    
    45,956Cost of revenue
    
    
    652,896
    
    
    
    640,309
    
    
    
    12,587Gross profit
    
    
    247,779
    
    
    
    214,410
    
    
    
    33,369Operating expenses
    
    
    570,562
    
    
    
    566,422
    
    
    
    4,140Loss from operations
    
    
    (322,783
    )
    
    
    (352,012
    )
    
    
    29,229Other income (expense)Interest income (expense), net
    
    
    31
    
    
    
    31
    
    
    
    Total other income, net
    
    
    31
    
    
    
    31
    
    
    
    Loss before income tax
    
    
    (322,752
    )
    
    
    (351,981
    )
    
    
    29,229Income tax expense
    
    
    800
    
    
    
    800
    
    
    
    Net loss
    
    $
    (323,552
    )
    
    $
    (352,781
    )
    
    $
    29,229Beneficial Conversion Charge upon issuance of
Preferred Shares
    
    
    755,048
    
    
    
    
    
    
    
    755,048Net Loss Attributable to common Stockholders
    
    $
    (1,078,600
    )
    
    $
    (352,781
    )
    
    $
    (725,819
    )Basic and diluted Net loss per common share
    
    $
    (0.19
    )
    
    $
    (0.06
    )
    
    $
    (0.13
    )BASIC AND DILUTED WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
    
    
    5,820,551
    
    
    
    5,820,551
  10




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*
    11




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NOTE 2  CORPORATE HISTORY
 Organization
   Basis of Presentation
    12




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NOTE 3  SIGNIFICANT ACCOUNTING POLICIES
 Consolidation
  Revenue Recognition
 Revenue Recognition
 Segment Reporting
  Customer Concentrations
  Accounts Receivable Policy
  Cash and Cash Equivalents
   13




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Stock-Based Compensation
 Share-Based
Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to
Employees
  Impact of SFAS No. 123R
 Three monthsended March 31,2006Stock-based compensation expense
    
    $
    129,272Effect on loss per share:Basic
    
    $
    (0.02
    )
    14




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Three monthsended March 31,2005Net income (loss) as reported
    
    $
    (501,928
    )Add: stock option-based employee compensation expense included
in reported net loss, net of related tax effects
    
    
    183,646Deduct: 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
    )
  15




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Goodwill and Other Intangible Assets
 Goodwill and Other Intangible Assets,
 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
   16




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Property & Equipment
   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
  17




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NOTE 4  RELATED PARTY TRANSACTIONS
  Rent
  Management Services Agreement
  Consulting Services
  Investor Relations
   18




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Consulting
  Revenue
  NOTE 5  INTANGIBLE ASSETS
    19




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NOTE 6  INCOME TAX
  NOTE 7  BARRON FINANCING
   20




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21




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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
  22




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NOTE 9  COMMON STOCK TRANSACTIONS
     NOTE 10  STOCK PLAN
     23




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For the quarter ended
    
    
    For the quarter endedMarch 31, 2006
    
    
    March 31, 2005Weighted-Average
    
    
    
    
    
    
    Weighted-AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding at January 1
    
    
    4,636,250
    
    
    $
    0.81
    
    
    
    3,990,000
    
    
    $
    0.67Granted
    
    
    2,090,000
    
    
    $
    0.83
    
    
    
    670,000
    
    
    $
    2.24Cancelled/forfeited
    
    
    (148,125
    )
    
    $
    1.86
    
    
    
    Exercised
    
    
    (240,454
    )
    
    $
    0.54
    
    
    
    Outstanding at March 31
    
    
    6,337,671
    
    
    $
    0.81
    
    
    
    4,660,000
    
    
    $
    0.89Options exercisable at March 31
    
    
    3,988,818
    
    
    
    
    
    
    
    3,191,250Weighted-average fair value of
options granted during the
period
    
    $
    0.83
    
    
    
    
    
    
    $
    2.42
  Options Outstanding
    
    
    Options ExercisableNumber
    
    
    Weighted-Average
    
    
    
    
    
    
    NumberRange of
    
    Outstanding
    
    
    Remaining
    
    
    Weighted-Average
    
    
    Exercisable
    
    
    Weighted-AverageExercise 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
  
    
    50,000 warrants for common shares at $0.75 each. These warrants were issued during
2005 and were fully vested at December 31, 2005.
    
    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.
  24




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NOTE 11  NOTES PAYABLE
 Credit Lines
  Installment Loans Payable to Tier One Consulting Principals
   25




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Item 2. Managements Discussion and Analysis and Plan of Operation
  Forward-Looking Statements
  Background
   26




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##### Table of Contents



Critical Accounting Policies
 Share-Based Payment Accounting for Stock-Based
Compensation Accounting for
Stock Issued to Employess
  27




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Results of Operations
 Three Months Ended March 31, 2006 versus the Three Months Ended March 31, 2005
 Revenue
  Cost of Revenue and Gross Profit
   28




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Operating Expenses
      Net loss
   29




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##### Table of Contents



Liquidity and Capital Resources
     Off-Balance Sheet Arrangements
   30




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Recent Accounting Pronouncements
      31




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##### Table of Contents



Item 3. Controls and Procedures
 Internal Control over Financial Reporting
   Disclosure Controls and Procedures
   32




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PART II
OTHER INFORMATION
 Item 5. Other Information
 Warrants to Ascendiant Securities, LLC
   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
  33




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SIGNATURES
  Caneum, Inc.Date:
September 27, 2007
    
    By
    
    /s/ Suki MudanSuki Mudan, President(Principal executive officer)Date:
September 27, 2007
    
    By
    
    /s/ Gary AllhusenGary Allhusen, Chief Operating Officer(Principal financial officer)
  34




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description31.1
    
    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
  35