UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,D.C.20549











FORM
10-K/A


(Amendment
No. 1)








x ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





For
the fiscal Year ended June 30, 2008





r TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d)


OF
THE SECURITIES EXCHANGE ACT OF1934





Commission
file number: 000-52765





VEMICS,
INC.


(Exact
Name of Registrant as Specified in Its Charter)







Nevada
            95-4696799(State
      or other jurisdiction of incorporation or
    organization)
            (I.R.S.
      Employer Identification No.)




523 Avalon Gardens
Drive,Nanuet,New York10954


(Address
of principal executive offices) (Zip Code)





(845)
371-7380


(Registrant’s
Telephone Number, Including Area Code)




Securities
registered pursuant to Section 12(b) of the Act: None




Securities
registered under Section 12(g) of the Act: Common Stock, $.001 par
value





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes r    No
x





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.  Yes r No x




Check
whether the issuer: (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for
such shorter period that the issuer was required to file such reports); and (2)
has been subject to such filing requirements for the past 90
days.


Yes x No r




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  x





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.


Large
accelerated filer r            
Accelerated filer r          
 Non-accelerated filer r         
 Smaller reporting company x





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




Aggregate
market value of the Registrant’s common stock held by non-affiliates of the
Registrant as of September 29, 2008: $3,450,907.70.




The
number of shares outstanding of the Registrant's common stock as of September
29, 2008: 81,656,418









EXPLANATORY
NOTES




Vemics,
Inc. is filing this Amendment No. 1, or the Amended Report, to our Annual
Report on Form 10-K for the fiscal year ended June 30, 2008, filed with the
Securities and Exchange Commission (the “SEC”), on October 14, 2008 (the
“Original Report”), in order to add certain information required by Part III of
Form 10-K.





Except as
otherwise expressly stated for the items amended in this Amended Report, this
Amended Report continues to speak as of the date of the Original Report and we
have not updated the disclosure contained herein to reflect events that have
occurred since the filing of the Original Report.  Accordingly, this
Amended Report should be read in conjunction with our Original Report and our
other filings made with the SEC subsequent to the filing of the Original
Report.




All
references to the “Company, “we,” “us,” or “our” mean Vemics, Inc.






*****






PART
III




Item 10.  Directors,
Executive Officers and Corporate Governance.





Set forth
below are the names, ages, titles, principal occupation and certain biographical
information as of September 29, 2008, concerning the Company’s directors and
executive officers.  All of the Company’s officers have been appointed
by and serve at the discretion of the Board.





NAME
            
            AGE
            
            POSITIONFred
      Zolla
            
            58
            
            CEO
      & ChairmanCraig
      Stout
            
            41
            
            Chief
      Operating Officer/Interim Chief Financial OfficerTom
      Dorsett
            
            34
            
            PresidentBrian
      Howell
            
            47
            
            Chief
      Technology OfficerF.
      Chandler Coddington, Jr.
            
            76
            
            DirectorLarry
      Shemen
            
            53
            
            DirectorBrian
      Groh
            
            50
            
            Director





Fred Zolla, CEO
and Chairman.Mr. Zolla has
served as our Chief Executive Officer and Chairman of the Board of Vemics since
the date of our acquisition of Vemics-Delaware in November
2005.  Further, Mr. Zolla served as the CEO and Chairman of
Vemics-Delaware since its inception on July 17, 2001.  Before founding
Vemics-Delaware, Mr. Zolla served as the Chief Operating Officer of Educational
Video Conferencing, Inc., a publicly traded company in the technology and
distance learning fields from April 1999 to June 2001.  From January
1990 to February 1999, Mr. Zolla was the President of Distance Learning
Associates, the first content aggregator in the K-12 and corporate distributed
learning space in the U.S.  In 1996, he served on the White House
Committee for technology in education chaired by then vice-president Al
Gore.  Mr. Zolla has taught and lectured in England, France, Italy,
Spain, Korea and throughout the U.S. on the “Integration of distance learning
resources and technology in the classroom and workplace.”  Mr. Zolla
served as chairman of the board of the New York Film Festival, non-broadcast
division from 1992 through 1995 and remains an active board
member.  Mr. Zolla has been married to Michelle, the original
co-founder of Vemics, since 1969, they have two daughters and four grandchildren
all of who live in Rockland County, New York.





Craig Stout,
Chief Operating Officer and Interim Chief Financial Officer.Mr. Stout has been our
Chief Operating Officer since the date of our acquisition of Vemics-Delaware in
November 2005 and has served as Interim Chief Financial Officer since June 30,
2008.  Mr. Stout has 20 years of operational and corporate finance
experience across multiple industries.  Before joining Vemics, Mr.
Stout consulted to the international reinsurance firm, Renaissance Reinsurance
in Hamilton, Bermuda working on operation projects including assisting in
managing the conversion to Sarbanes Oxley compliance.  In addition,
from 2000 to 2005, Mr. Stout worked on a consulting basis to approximately 35
companies in connection with the acceleration and management of their growth
through strategic acquisitions, restructuring and refinancing.  From
1989 to 1991, Mr. Stout was employed by Elders IXL in London as part of the
strategic business development group where he was part of the European
acquisition team that identified businesses of strategic value to Elders
interests, initiated acquisitions and developed the execution plans focused on
integrating these new businesses into the Elders corporate
structure.





2




Tom Dorsett,
President.Mr. Dorsett joined
Vemics in October 2006 and brings 10 years of experience in the healthcare IT
market.  He was co-founder of NuScribe, a privately held medical
software company acquired by Vemics in November 2006, where he served as Chief
Executive Officer from January 2002 to October 2006.  Before NuScribe,
Mr. Dorsett founded and operated Channel Management Software from 1996 to 2002,
a reseller of medical voice recognition and electronic medical records
applications.  He served as sales manager for MD Productivity, a
manufacturer of voice recognition driven healthcare documentation applications
and he was Chief Executive Officer and founder of Industryworks Software, a
manufacturer of management applications for the transportation and
insurance industries.





Brian Howell,
Chief Technology Officer.Mr. Howell has
served as our Chief Technology Officer since the date of our acquisition of
Vemics-Delaware in November 2005.  He served in the same capacity for
Vemics-Delaware since 2003.  He brings more than 20 years of video,
voice, data and network technology experience.  Before joining Vemics,
from 2001 to 2002 he was Senior Manager for Video Systems and Solutions at
Cetacean Networks where he worked on applying real-time routing technologies to
the Internet.  From 1984 to 2001, Mr. Howell was a member of the
start-up team at PictureTel Corporation (now Polycom).  During his 16
years at that company, he was a key member of the team that brought about
advances in the marketplace including development of the first integrated
Rollabout Videoconferencing System, MCU and PC-based videophone.  Mr.
Howell also managed the “Living Lab” working on future technologies and is named
on three patents with PictureTel and Polycom.





F. Chandler
Coddington, Jr., Director.Mr. Coddington
has served as a director of Vemics since the date of our acquisition of
Vemics-Delaware in November 2005 and served as a director of Vemics-Delaware
since 2002.  Mr. Coddington has 46 years of experience in the
insurance and retail/agency brokerage business and has served in several chair
posts, including Travelers, St. Paul, Cigna, Connecticut General Life Insurance
Company.  He is active in many local non-profit endeavors, including
United Way, Overlook Hospital, Chamber of Commerce and the
YMCA.





Larry Shemen, MD,
Director.  Dr.  Shemen
has served as a director of Vemics since the date of our acquisition of
Vemics-Delaware in November 2005 and served as a director of Vemics-Delaware
since June 2006.  Dr. Shemen is a practicing physician and currently
operates his medical practice from his Manhattan location and in Queens, New
York.  He is a Surgical Attending - Manhattan Eye Ear and
Throat Hospital, St. Vincent's Hospital, New York Hospital Queens,
Beth Israel Medical Center, Hackensack Medical Center,
Catholic Medical Center, Lenox Hill Hospital, New York Eye and Ear
Infirmary.  Dr. Shemen served as Chief Resident of St. Michael's
Hospital and The Wellesley Hospital and was Chief Fellow, Head and
Neck Surgery Memorial Sloan-Kettering Cancer Center.  Dr.
Shemen currently serves on the Editorial Board for Otolaryngology- Head and Neck
Surgery; is a Diplomat of the National Board of Medical Examiners; is aLicencate of the
Medical Council of Canada, licensed as general practitioner with the College of
Physicians and Surgeons of Ontario, is aLicencate State of
California Board of Medical Quality Assurance as Physician and Surgeon andLicencate with
the State of New York and New Jersey.  Dr. Shemen is a member of
American Medical Association, Canadian Otolaryngological Society,
American Academy of Otolaryngology, Head and Neck Surgery,
American Academy of Facial Plastic and Reconstructive Surgery, New York
Society of Head and Neck Surgeons, Society of Head and Neck Surgeons, Academy of
Oral Medicine, American College of Surgeons, American Society for Head and
Neck Surgery, American Rhinologic Society.




Brian Groh,
Director.Mr. Groh has
served as a director of Vemics since September 2006.Mr. Groh is currently
a Managing Director with Blackwater Capital and has served in that capacity
since May 2007.  In 1996, Mr. Groh founded and became President and
CEO of Xplore Technologies trading on the Toronto Stock Exchange and recognized
as a global leader in the engineering, development, integration and marketing of
rugged mobile wireless pen-based computing systems.  After leaving
Xplore in 2005 through spring 2007, Mr. Groh worked as an independent consultant
to Valt.X Inc, Aerius, Vemics, Screen Innovations and Wistron
Corporation.  Mr. Groh worked as a consultant to these   early
stage technology companies   assisting them in   raising funds, with
marketing, and consulting with respect to a number of mergers and
acquisitions.  Previously, Mr. Groh was one of Bell Mobility and
Motorola’s first cellular dealers in Canada and became one of owners of the
first Bell Cellular Mobility Centers in Canada.  In 1986, he founded
Telular Canada.





Dr. James H.
Desnick.Dr. Desnick has served as a director from July 29,
2008 to October 24, 2008.  Dr. Desnick serves as a director of Zenith
Medical Systems, LLC, MJ Investments and Cardiac Imaging Centers of America,
LLC.  Dr. Desnick began his career in private practice in late 1979
and subsequently founded Medical Management of America, Inc., a publicly traded
company that Desnick took private in the early 1990's at which time he opened
the Desnick Eye Centers.  Dr. Desnick’s Eye Centers pioneered major
advancements in the field of ophthalmology, such as developing the no-stitch
cataract procedure and establishing cataract surgery as an outpatient procedure
are only and providing courtesy transportation services to patients is an extra
level of care.  Along with the Desnick Eye Centers, Dr. Desnick was
the Chairman and C.E.O. of Doctors Hospital Hyde Park on Chicago's south side
for nearly eight years.  Dr. Desnick was also founder and chairman of
a pharmaceutical company, Fast Rx, based in Miami, Florida in the late
1990's.  In 2005, Dr. Desnick opened Heart Scan of Chicago, a 5-star
private CT imaging center that provides advanced, non-invasive cardiac
technology available for heart disease diagnosis that provides a non-invasive
means to a complete view of the heart and surrounding arteries and vessels in
approximately ten minutes.





On
October 24, 2008, Dr. James H. Desnick voluntarily resigned from our Board of
Directors for personal reasons.  However, as managing member of Ravine
Valley, LLC, Dr. Desnick intends to remain involved in the Company, which would
include, in part, advising the Company and the Board of Directors as needed on
various business and operational matters.





Code
of Ethics





As a
result of the Company's limited operations over the past couple of
years, the Company has not adopted a code of ethics as defined in Item 406
of Regulation S-K under the Securities Exchange Act of 1934.  The Company
expects to adopt a code of ethics within the next twelve
months.





3




Item 11.  Executive
Compensation





The
following table sets forth annual compensation paid to our named executive
officers for the fiscal year ended June 30, 2007 and for the year ended
June 30, 2008.





SUMMARY
COMPENSATION TABLE


Name
      and Principal Position
            
            Year
            
            Salary
              ($) (1)
            
            Bonus
              ($)
            
            
            Stock
              Awards
              ($) (2)
            
            
            Option
              Awards
              ($)
            
            
            Non-Equity
      Incentive Plan Compensation
              ($)
            
            
            Non-Qualified
      Deferred Compensation
              Earnings
              ($)
            
            
            All
              Other
      Compensation
              ($)
            
            
            Total
              ($)Fred
      Zolla, CEO & Chairman (3) (5)
            
            2008
              2007
            
            $
              $
            120,000
              162,000
            
            -
              -
            
            
            $
            -
              114,750
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            $
              $
            120,000
              276,750Craig
      Stout,  Chief Operating Officer/Interim Chief Financial
      Officer (4) (5)
            
            2008
              2007
            
            $
              $
            100,800
              116,500
            
            -
              -
            
            
            $
            -
              148,500
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            $
              $
            100,800
              265,000Tom
      Dorsett, President  (5)
            
            2008
              2007
            
            $
              $
            93,000
              78,000
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            $
              $
            93,000
              78,000Brian
      Howell, Chief Technology Officer (5)
            
            2008
              2007
            
            $
              $
            81,600
              129,600
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            
            -
              -
            
            
            $
              $
            81,600
              129,600





(1)  On
December 15, 2007, the Company’s executive management began voluntarily
deferring portions of their salaries along with the majority of the workforce to
conserve available cash.  The compensation table above does not
reflect the deferred amounts through June 30, 2008.  As of June 30,
2008, Mr. Zolla was owed an additional $30,000 in deferred salary, Mr. Stout was
owed and additional $19,200 in deferred salary, Mr. Dorsett was owed an
additional $13,000 in deferred salary and Mr. Howell was owed an additional
$18,400 in deferred salary.  As of the date of this filing all
executive officers and employees have been paid all deferred
amounts.





(2) The
value of shares of Vemics’ common stock (“Common Stock”) issued to employees for
prior services and bonuses were based on the closing notice of our Common Stock
on the date of issuance as reported on the Pink Sheets, multiplied by a discount
factor of 46% based on the restricted nature of the shares and limited
liability.





(3) On
June 6, 2007, Mr. Zolla was awarded 450,000 shares of Common Stock by the Board
of Directors for prior services and 400,000 shares of Common Stock as a bonus
for his activities in connection with financing and acquisition transactions for
the Company.





(4) On
June 6, 2007, Mr. Stout was awarded 450,000 shares of Common Stock by the Board
of Directors for prior services and 650,000 shares of Common Stock for his
activities in connection with financing and acquisition transactions for the
Company.





(5) On
August 14, 2008, the Company granted stock options under the Vemics, Inc. 2007
Equity Compensation Plan (the “Equity Plan”), to purchase 9,300,000 shares of
the Common Stock to these four executive officers along with one member of the
board of directors.  Upon further reflection in an attempt to preserve
shareholder equity, these officers and the one director voluntarily decided to
reject these grants at this time.





Employment
Agreements with Executive Officers





The
Company and Mr. Fred Zolla, its Chief Executive Officer and Chairman of the
Board, entered into a three-year employment agreement effective as of October 1,
2004, pursuant to which Mr. Zolla was paid an annual salary (based on a calendar
year) of $70,000 in 2005, $130,000 in 2006 and $168,000 for 2007.  Mr.
Zolla may terminate the agreement for any reason on 90-days written notice to
the Company or by the Company immediately for cause.  The Agreement
provides for 18 months of severance in the event of termination without
cause.  Mr. Zolla's initial agreement expired on December 31, 2007;
however, this agreement was renewed for two years and is due to expire on
December 1, 2009.





In
addition, effective as of October 1, 2004, the Company and Brian Howell, its
Chief Technology Officer, entered into a three-year employment agreement
pursuant to which Mr. Howell was paid an annual salary of $93,000 in 2005,
$107,000 in 2006 and $134,400 for 2007.  Mr. Howell may terminate the
agreement for any reason on 90-days written notice to the Company or by the
Company immediately for cause.  In the event of a termination by us
for any reason other than cause, the Company is to pay Mr. Howell an amount
equal to 12 months' salary.  Mr. Howell's initial agreement expired on
December 31, 2007; however, this agreement was renewed for two years and is due
to expire on December 1, 2009.





On March
10, 2008, the Company entered into an employment agreement with Craig Stout
pursuant to which Mr. Stout will serve as our Chief Operating Officer at an
initial term of three years.  This agreement commenced April 1, 2008
and terminates on March 31, 2011.  The agreement provides for an
annual salary of $120,000, which amount would increase to $156,000 if the
Company raises in excess of $5,000,000 in equity.  Mr. Stout may
terminate the agreement for any reason on 90-days written notice to the Company
or by the Company immediately for cause.  In the event of a
termination by us for any reason other than cause, the Company is to pay Mr.
Stout an amount equal to 12 months' salary.





On
October 12, 2006, as part of the acquisition of NuScribe, the Company entered
into an agreement with Tom Dorsett the former CEO of NuScribe.  Mr.
Dorsett currently serves as President of the Company.  The agreement
has an initial term of two years, commencing on October 12, 2006 and ending on
October 12, 2008, which has automatically renewed for an additional two-year
term through October 12, 2010.  This agreement provided for an annual
salary of $80,000, which was increased to $120,000 upon a funding event to the
Company in excess of $1,000,000 earlier in 2008.  Mr. Dorsett may
terminate the agreement for any reason on 90-days written notice to the Company
or by the Company immediately for cause.





4




Equity
Incentive Plan





The
Company adopted the Vemics, Inc. 2007 Equity Compensation Plan, which was
approved by our stockholders on June 6, 2007 (the “Equity Plan”), to provide
employees, non-employee directors, consultants and advisors with the opportunity
to receive grants of stock options and stock awards.  The purpose of
the Equity Plan is to give participants an ownership interest in our Company,
and to create an incentive to contribute to our economic success.  The
Equity Plan authorizes the issuance of incentive stock options, nonqualified
stock options and other stock based awards to employees, non-employee directors,
consultants and advisors.  There are 17,000,000 shares of Common Stock
authorized under the Equity Plan.  As of June 30, 2008, no options to
purchase shares of Common Stock or other awards have been granted under the
Equity Plan.





As of
September 30, 2008, the Company has issued options to purchase 5,607,801 shares
of Vemics Common Stock to non-executive officers employees, former employees and
consultants of the company.





Item 12.  Security
Ownership of Certain Beneficial Owners and Management





The
following table sets forth as of September 29, 2008, certain information with
respect to the beneficial ownership of the Common Stock by: (1) each person
known by us to beneficially own more than 5% of our outstanding shares, (2) each
of our directors, (3) each named executive officer and (4) all of our executive
officers and directors as a group.





Except as
otherwise indicated, each person listed below has sole voting and investment
power with respect to the shares of Common Stock set forth opposite such
person's name.  Applicable percentage of ownership is based on
81,656,418 shares of our Common Stock outstanding on September 29,
2008.





In
computing the number and percentage of shares beneficially owned by a
person, shares of Common Stock subject to options and/or warrants currently
exercisable, or exercisable within 60 days of September 29, 2008, are
counted as outstanding, but these shares are not counted as outstanding for
computing the percentage ownership of any other person.




Name
      and Address of Beneficial Owner (1) (2)
            
            Amount
      of Beneficial Ownership
            
            
            Percent
      of Outstanding SharesF.
      Chandler Coddington, Jr.  (3)
            
            
            25,746,795
            
            
            
            30.99
            %Ronald
      Bornhuetter (4)
            
            
            4,920,000
            
            
            
            5.92
            %Tom
      Dorsett
            
            
            3,767,077
            
            
            
            4.53
            %Fred
      Zolla & Michelle F. Zolla (5)
            
            
            4,238,283
            
            
            
            5.10
            %Ravine
      Valley LLC  (6)
            
            
            17,333,333
            
            
            
            20.86
            %James
      H. Desnick, M.D (6) (7)
            
            
            17,333,333
            
            
            
            20.86
            %Brian
      Howell
            
            
            1,294,572
            
            
            
            1.56
            %Brian
      Groh
            
            
            786,538
            
            
            
            *Dr.
      Larry Shemen (8)
            
            
            1,074,299
            
            
            
            *Craig
      Stout
            
            
            1,100,000
            
            
            
            1.32
            %All
      officers and directors as a group (9 persons) (9)
            
            
            59,905,898
            
            
            
            58.48
            %




*
less than 1%





(1)
            Beneficial
      ownership is determined in accordance with the rules of the Securities and
      Exchange Commission.  Unless otherwise indicated, this column
      reflects amounts as to which the beneficial owner has sole voting power
      and sole investment power.





(2)
            The
      address of each of the executive officers and directors is care of Vemics,
      Inc., 523 Avalon Gardens Drive, Nanuet, NY
  10954.





(3)
            Includes
      2,896,140 shares of Common Stock that may be acquired upon exercise of
      currently exercisable warrants.  Also includes 7,913,816 shares
      of Common Stock owned by trusts of which Mr. Coddington is trustee but not
      beneficiary.  Mr. Coddington has dispositive power over the
      shares owned by the trusts and is therefore considered to be beneficial
      owner of such shares, although he disclaims beneficial ownership
      thereof.





(4)
            Includes
      953,333 shares of Common Stock that may be acquired upon exercise of
      currently exercisable warrants.





(5)
            Includes
      588,500 shares of Common Stock that may be acquired upon exercise of
      currently exercisable warrants.





(6)
            Includes
      4,000,000 shares of Common Stock that may be acquired upon exercise of
      currently exercisable warrants.





(7)
            Reflects
      17,333,333 shares held in the name of Ravine Valley LLC, of which Dr.
      James H. Desnick is the managing member and owner of approximately 47% of
      the membership interests of Ravine Valley
LLC.





(8)
            Includes
      205,000 shares of Common Stock that may be acquired upon exercise of
      currently exercisable warrants.





(9)
            Includes
      8,642,974 shares of Common Stock that may be acquired upon exercise of
      currently exercisable warrants.





5




Item 13.  Certain
Relationships and Related Transactionsand DirectorIndependence





Vemics
entered into a consulting agreement with Brian Groh, a member of Vemics’ Board
of Directors, on October 15, 2006, whereby Mr. Groh provided marketing services
to Vemics forLiveAccess.  Mr. Groh's services were non-exclusive to Vemics
and Mr. Groh was paid $5,000 per month for his services plus bonuses based upon
the successful completion of each project in which Mr. Groh is
involved.  From November 2006 through April 2007, Mr. Groh provided
consulting services to Vemics in connection with various management-consulting
topics including developing a strategy to raise equity or other types of
financing and the integration of NuScribe Inc. into Vemics operations post
acquisition.  On or about May 1, 2007, the consulting agreement was
terminated by mutual agreement of the parties.




Vemics
utilizes office space provided by some of its key employees and
officers.  Vemics’ President and CEO, Fred H. Zolla provides Vemics’
principal office space located at 523 Avalon Gardens Drive, Nanuet,
NY 10954.  Vemics pays approximately $4,500 per year to Mr. Zolla
for the use of the office space he provides.  Vemics will continue to
maintain this office for the near future.  Vemics website lists the
home offices of the Company’s chief technology officer, Brian Howell, located at
247 Green St, Marblehead, MA 01945, and a consultant of the Company, John
Walber, located at 403 Vernon Rd, Jenkintown, PA 19046.  The
Company does not pay any compensation to Mr. Howell or Mr. Walber for the use of
this additional office space.




F.
Chandler Coddington has been member of our Board of Directors since
2002.  He is the largest individual investor in the Company, having
invested $3,681,200 to date (or $3,733,254 when including accrued interest on
convertible debt that was converted to equity).  He currently owns
13,699,237 shares of Common Stock and has the right to acquire 2,896,140
additional shares of Common Stock pursuant to currently exercisable
warrants.  In addition, as of June 30, 2007 and December 31, 2007, we
have outstanding short-term loans from Mr. Coddington totaling $11,716 and
$487,024, respectively.





Mr.
Coddington received 200,000 shares of Common Stock in exchange for consulting
services he provided to the Company.  These services included
financial advisory services, insurance advisory services and corporate
governance, as well as for making introductions to potential clients and
investors and other related business matters to the Company.





Mr.
Coddington has also received 832,245 shares of Common Stock in exchange for
providing personal guarantees on behalf of the Company for the following credit
facilities:  Somerset Community Bank ($300,000 equipment credit line
established on April 30, 2004); Valley National Bank ($115,000 credit line
established on September 30, 2004); and Citibank ($600,000 credit line
established in September 2007).  Mr. Coddington is the primary obligor
on the foregoing credit facilities.  Accordingly, the Company issued a
three-year promissory note to Mr. Coddington on June 30, 2008, in the amount of
$1,400,914 with interest payable at 8%, which promissory note calls for $2,500
interest payments to Mr. Coddington commencing July 1, 2008.





In
addition, on December 1, 2006, Mr. Coddington received 80,000 shares for his
service to the Vemics-Delaware Board of Directors while Vemics was a private
company from 2002 through 2005.  The Company’s methodology for
calculating the fair value of his services involved multiplying the price of the
Common Stock at the value that shares were being sold by the Company in private
placements (before the Company’s shares were quoted on the Pink Sheets) or at
the market closing price on the date of the transaction once the Company began
trading on the Pink Sheets.





Between
June 30, 2005 and February 28, 2008, Dr. Larry Shemen, a member of our Board of
Directors, has invested $170,000 into the Company in exchange for shares of
Common Stock.









6




Item 14.  Principal
Accountant Fees and Services





Cost
of Fees and Services





During
fiscal years 2008 and 2007, the Company’s independent registered public
accounting firm, Demetrius & Company L.L.C., rendered services to the
Company for the following fees:




2008
            
            
            2007Audit
      Fees
            
            $
            72,000
            
            
            $
            42,000Audit-Related
      Fees(1)Tax
      Fees(2)All
      Other Fees(3)Total
            
            $
            72,000
            
            
            
            42,000




(1)
            
            Audit
      Fees consisted principally of audit work performed on the consolidated
      financial statements, as well as work generally only the independent
      registered public accounting firm can reasonably be expected to provide,
      such as statutory audits for our financial statements included in our
      report on 10-Q and Form 10-K for the most recent fiscal quarter and year
      and other services typically provided by an accountant in connection with
      statutory and regulatory filings or engagements for those fiscal years,
      including the filing of our Registration Statement on Form
    10.(2)
            
            The
      Company did not engage Demetrius & Company, LLC, for any Audit Related
      services.(3)
            
            The
      Company did not engage Demetrius & Company, LLC for any Tax
      services.(4)
            
            The
      Company did not engage Demetrius & Company, LLC for “other”
      services.




Audit Committee's Pre-Approval
Practice





Inasmuch
as the Company does not have an audit committee, its board of
directors performs the functions of its audit committee.  Section
10A(i) of the Securities Exchange act of 1934 prohibits our auditors from
performing audit services for us as well as any services not considered to be
"audit services" unless
such services are pre-approved by the board of directors (in lieu of the audit
committee) or unless the services meet certain de minimis
standards.




PART
IV




Item
15.  Exhibits, Financial Statements Schedules




10.1              Unsecured Promissory Note dated June 30, 2008, by and between
the Company and Chandler Coddington for $1,400,914.
 
 7


SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.




Name
              Title
              Date/s/ Fred
      Zolla
              President and Chief
      Executive Officer,
              October 28,
      2008Fred Zolla
              (Principal Executive
      Officer)/s/ Craig
      Stout
              Chief Operating
      Officer and
              October 28,
      2008Craig Stout
              Interim Chief
      Financial Officer/s/ Brian
      Howell
              Chief Technology
      Officer
              October 28,
      2008Brian Howell/s/ F. Chandler Coddington,
      Jr.
              Director
              October 28,
      2008F. Chandler Coddington, Jr./s/ Larry
      Shemen
              Director
              October 28,
      2008Larry
      Shemen, MD/s/
      Brian
      Groh
              Director
              October 28,
      2008Brian Groh






8