XOTC:VUME Annual Report 10-K Filing - 8/31/2012

Effective Date 8/31/2012

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended August 31, 2012 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to __________________ Commission file number: 000-53910 VUMEE, INC. (Exact Name of Registrant as Specified in its Charter) NEVADA 35-2340897 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 50 E. SAMPLE RD. SUITE 301 POMPANO BEACH, FLORIDA 33064 (Address of principal executive offices) (Zip Code) Registrant's telephone number (800) 854-0654 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $.001 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] 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 [ ] No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. Yes [ ] No [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. (Check one): Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] As of September 21, 2012, the Registrant had 60,001,000 shares of common stock issued and outstanding. No market value had been computed based upon the fact that no active trading market had been established as of September 21, 2012. The number of shares of Common Stock issued and outstanding as of August 31, 2012 was 60,001,000. DOCUMENTS INCORPORATED BY REFERENCE List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended August 24, 1980). <PAGE> VuMEE, Inc. FORM 10-K INDEX 10-K - YEAR END REPORT PAGE ---- PART I ITEM 1 BUSINESS 4 ITEM 1A RISK FACTORS 5 ITEM 1B UNRESOLVED STAFF COMMENTS 5 ITEM 2 PROPERTIES 5 ITEM 3 LEGAL PROCEEDINGS 5 ITEM 4 MINE SAFETY DISCLOSURES 5 PART II ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITES 6 ITEM 6 SELECTED FINANCIAL DATA 8 ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS 15 ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA 15 ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 15 ITEM 9A CONTROLS AND PROCEDURES 15 ITEM 9B OTHER INFORMATION 16 PART III ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 16 ITEM 11 EXECUTIVE COMPENSATION 18 ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 19 ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE 21 ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES 21 PART IV ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES 22 SIGNATURES 23 2 <PAGE> FORWARD-LOOKING STATEMENTS Some of the statements contained in this Form 10-K that are not historical facts are "forward-looking statements" which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. We urge you to be cautious of the forward-looking statements, that such statements, which are contained in this Form 10-K, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. All written forward-looking statements made in connection with this Form 10-K that are attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements. Our audited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report. Unless otherwise specified in this annual report, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to shares of our common stock. Our company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. As used in this annual report, the terms "we", "us", "our" and "our company" mean VuMee, Inc. unless otherwise indicated. 3 <PAGE> PART I ITEM 1. BUSINESS HISTORY OF VUMEE, INC. Our company was incorporated under the laws of State of Nevada on April 30, 2008 under the name PaperWorks, Inc., with an authorized capital of 75,000,000 common shares with a par value of $0.001. On May 2, 2012, we filed Articles of Merger with the Nevada Secretary of State to change the name of our company to "VuMee Inc.", to be effected by way of a merger with our wholly-owned subsidiary VuMee Inc., which was created solely for the name change. Also on May 2, 2012, we filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of our authorized and issued and outstanding shares of common stock on a 10 new for one (1) old basis and, consequently, our company's authorized capital increased from 75,000,000 to 750,000,000 shares of common stock and our issued and outstanding shares of common stock shall increased from 6,000,000 to 60,000,000 shares of common stock, all with a par value of $0.001. These amendments became effective on May 8, 2012 upon approval from the Financial Industry Regulatory Authority ("FINRA"). The forward split and name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on May 8, 2012. Our new symbol is "VUME". Our CUSIP number is 92922C105. RECENT ACTIVITIES; STATUS OF THE COMPANY On May 17, 2012, the Company closed a share exchange agreement with Data Pangea, LLC, a Florida Limited Liability Company ("Data Pangea"), in exchange for 30,001,000 shares of its common stock. Concurrently a former director and officer cancelled 30,000,000 shares previously held. This transaction was accounted for as a reverse merger. These statements contain the balance sheet and operations of Data Pangea before and after the merger. Since, Data Pangea was started in March 2012, there is no audited balance sheet at August 31, 2011. Data Pangea, LLC.is a limited liability company organized on March 22, 2012 under the laws of Florida. Data Pangea, LLC d/b/a VuMee was founded on the principle that celebrities should be monetized for video content that they publish to their social networks. Data Pangea is a development stage entity that was organized to purchase and utilize the intangible assets of a company related by certain common owners. VuMee allows celebrities with a social network fan base ("Celebrities") the ability to generate revenue by simply uploading video content to their social networks. The VuMee platform allows Celebrities the ability to share in the advertising revenues with the Company. VuMee is a fully functional celebrity video sharing platform via a mobile experience. VuMee has developed an automated mobile video content distribution network for distributing video content with paid advertising over mobile networks. VuMee's proprietary business model harnesses the global power of existing social networks, by providing a way to monetize Celebrities' friends and fans. VuMee provides the ability for anyone or any brand with a fan base, to upload video via the VuMee App on their mobile device or PC, and seamlessly share that content with their fan base. VuMee's proprietary business methodology 4 <PAGE> and software provides the method of coupling paid advertising with video content which allows the Celebrity to generate revenue through the VuMee platform. On June 29, 2012, our subsidiary, Data Pangea LLC, entered into a loan agreement with MLJP LLC, whereby MLJP has agreed to lend $350,000 to Data Pangea. This loan is evidenced by a promissory note pursuant to which the principal amount will be due and payable on the earlier of September 1, 2013. The loan bears interest at the rate of 12% per annum, payable in quarterly, in arrears, commencing August 29, 2012, and quarterly thereafter. EMPLOYEES Currently, we have 9 employees. We do not foresee any significant changes in the number of employees we will have over the next twelve months. ITEM 1A. RISK FACTORS As a "smaller reporting company," as defined by Securities and Exchange Commission ("SEC") regulations promulgated under the Securities Exchange Act of 1934, the Company is not required to provide the information required by this item. ITEM 1B. UNRESOLVED STAFF COMMENTS As a "smaller reporting company," as defined by SEC regulations promulgated under the Securities Exchange Act of 1934, the Company is not required to provide the information required by this item. ITEM 2. PROPERTIES VuMEE is leasing corporate office space located in Pompano Beach, Florida from an unrelated third party. The lease was effective May 4, 2012, and provides for a term of three years and two months with monthly rental payments of approximately $2,700 with 3% annual increases. The lease provides for a one, three year renewal unless either party provides at least 30 days' prior written notice to the other of its intent to terminate the lease upon expiration of the then-current term. The total rents paid 2012 were approximately $7,800. ITEM 3. LEGAL PROCEEDINGS As of August 31, 2012, the Company is not involved in any material claim, lawsuit or legal proceeding. From time to time, the Company is a party to disputes and claims arising in the normal course of its business. The Company's management believes that none of these actions, standing alone or in the aggregate, is currently material to the Company's operations or financial condition. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 5 <PAGE> PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Our common stock is currently listed for quotation on the Over-the-Counter Bulletin Board ("OTCBB"), under the symbol " VUME". The following table sets forth the range of high and low bid prices per share of the Company's Common Stock for each of the quarters, as reported on the OTCBB system. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. PRICE PERIOD HIGH LOW ------------- ---- --- Fiscal Year Ended August 31, 2012 First Quarter $ .01 $ .01 Second Quarter .01 .01 Third Quarter .01 .01 Fourth Quarter .01 .01 PENNY STOCK RULES The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). A purchaser is purchasing penny stock which limits the ability to sell the stock. Our shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which: a. contains a description of the nature and level of risk in the market for penny stock in both public offerings and secondary trading; b. contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the Securities Act of 1934, as amended; c. contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" price for the penny stock and the significance of the spread between the bid and ask price; 6 <PAGE> d. contains a toll-free telephone number for inquiries on disciplinary actions; e. defines significant terms in the disclosure document or in the conduct of trading penny stocks; and f. contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation; The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer: a. the bid and offer quotations for the penny stock; b. the compensation of the broker-dealer and its salesperson in the transaction; c. the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and d. monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS We do not have any equity compensation plans. SECTION 16(a) Based solely upon a review of Form 3 and 4 furnished by us under Rule 16a-3(d) of the Securities Exchange Act of 1934, we are not aware of any individual who failed to file a required report on a timely basis required by Section 16(a) of the Securities Exchange Act of 1934. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS Other than as previously disclosed, there were no purchases of shares of our common stock by us or any affiliated purchasers during the year ended August 31, 2012. HOLDERS Based on information provided by the Company's registrar and transfer agent, the Company had 26 holders of Common Stock of record as of August 31, 2012. DIVIDENDS The Company did not pay dividends on its common stock in fiscal 2012, and has no present plans or intention (and not present ability) to pay dividends in the future. The payment of cash dividends is a matter within the discretion of the 7 <PAGE> Board, and will depend upon the Company's earnings, cash on hand, financial and legal requirements and restrictions and other relevant factors. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table sets forth summary information regarding options granted and outstanding under equity compensation plans previously approved and not previously approved by the Company's stockholders. As of August 31, 2012, there were no outstanding or exercisable options, warrants, or rights to purchase shares of the Company's Common Stock. Number of Securities Remaining Available for Number of Securities to be Future Issuance Under Issued Upon Exercise of Weighted-Average Exercise Equity Compensation Plans Outstanding Options, Price of Outstanding Options, (excluding securities Plan Category Warrants and Rights Warrants and Rights reflected in column (a)) ------------- ------------------- ------------------- ------------------------ <S> <C> <C> <C> Equity Compensation Plans -0- n/a -0- Approved by Security Holders Equity Compensation Plans Not -- -- -- Approved by Security Holders TOTAL -0- n/a -0- UNREGISTERED SALES AND REPURCHASES BY THE COMPANY During the fiscal year ended August 31, 2012, there were no equity securities issued or sold by the Company that were not registered under the Securities Act of 1933, as amended. During the fiscal year ended August 31, 2012, there were no repurchases of securities by the Company. ITEM 6. SELECTED FINANCIAL DATA As a "smaller reporting company," as defined by SEC regulations promulgated under the Securities Exchange Act of 1934, the Company is not required to provide the information required by this Item. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CORPORATE OVERVIEW Our company was incorporated under the laws of State of Nevada on April 30, 2008 under the name PaperWorks, Inc., with an authorized capital of 75,000,000 common shares with a par value of $0.001. On May 2, 2012, we filed Articles of Merger with the Nevada Secretary of State to change the name of our company to "VuMee Inc.", to be effected by way of a merger with our wholly-owned subsidiary VuMee Inc., which was created solely for the name change. Also on May 2, 2012, we filed a Certificate of Change with the Nevada Secretary of State to give effect to a forward split of our authorized and issued and outstanding shares of common stock on a 10 new for one (1) old basis and, consequently, our company's authorized capital increased from 75,000,000 to 8 <PAGE> 750,000,000 shares of common stock and our issued and outstanding shares of common stock shall increased from 6,000,000 to 60,000,000 shares of common stock, all with a par value of $0.001. These amendments became effective on May 8, 2012 upon approval from the Financial Industry Regulatory Authority ("FINRA"). The forward split and name change became effective with the Over-the-Counter Bulletin Board at the opening of trading on May 8, 2012. Our new symbol is "VUME". Our CUSIP number is 92922C105. CURRENT BUSINESS On May 17, 2012, our company closed a share exchange agreement with Data Pangea, LLC, a Florida limited liability company, in exchange for 30,001,000 shares of its common stock. Concurrently a former director and officer of our company cancelled 30,000,000 shares previously held. This transaction was accounted for as a reverse merger. Data is a limited liability company, organized on March 22, 2012 under the laws of Florida. Data d/b/a VuMee was founded on the principle that celebrities should be monetized for video content that they publish to their social networks. Our company is a development stage entity that was organized to purchase and utilize the intangible assets of a company related by certain common owners. VuMee allows celebrities with a social network fan base ("Celebrities") the ability to generate revenue by simply uploading video content to their social networks. The VuMee platform allows Celebrities the ability to share in the advertising revenues with our company. VuMee is a fully functional celebrity video sharing platform via a mobile experience. VuMee has developed an automated mobile video content distribution network for distributing video content with paid advertising over mobile networks. VuMee's proprietary business model harnesses the global power of existing social networks, by providing a way to monetize Celebrities' friends and fans. VuMee provides the ability for anyone or any brand with a fan base, to upload video via the VuMee App on their mobile device or PC, and seamlessly share that content with their fan base. VuMee's proprietary business methodology and software provides the method of coupling paid advertising with video content which allows the Celebrity to generate revenue through the VuMee platform. On June 29, 2012, our subsidiary Data Pangea LLC entered into a loan agreement with MLJP LLC, whereby MLJP has agreed to lend US$350,000 to Data Pangea. This loan is evidenced by a promissory note pursuant to which the principal amount will be due and payable on September 1, 2013. The loan will bear interest at the rate of 12% per annum, payable in quarterly, in arrears, commencing August 29, 2012, and quarterly thereafter. RESULTS OF OPERATIONS The following summary of our results of operations should be read in conjunction with our financial statements for the fiscal year ended August 31, 2012 which are included herein. 9 <PAGE> FOR THE PERIOD FROM MARCH 22, 2012(INCEPTION) THROUGH AUGUST 31, 2012. Cumulative From March 22, 2012 (Inception) to August 31, 2012 ---------- Revenues $ Nil Expenses $ 591,994 Net Loss $ (591,994) EXPENSES Our operating expenses for the period from March 22, 2012 (inception) to August 31, 2012 are outlined in the table below: Cumulative From March 22, 2012 (Inception) to August 31, 2012 ---------- Computer and internet expenses $ 171,373 Marketing and related expenses $ 141,373 Salary expenses $ 80,818 Professional fees $ 54,228 Travel and related expenses $ 40,338 Contract labor $ 38,400 Amortization and depreciation expenses $ 15,034 Other general and administrative $ 50,671 NET LOSS For the period from March 22, 2012 (inception) to August 31, 2012 we incurred a net loss of $591,994. Most of the expenses were due to marketing and computer expenses in an effort to realize our new business strategy. 10 <PAGE> LIQUIDITY AND CASH REQUIREMENTS WORKING CAPITAL At August 31, 2012 ---------- Current Assets $ 33,157 Current Liabilities $ 238,316 Working Capital $ (205,159) CASH FLOWS Cumulative From March 22, 2012 (Inception) to August 31, 2012 ---------- Net Cash (Used in) Operating Activities $ (502,016) Net Cash (Used In) Investing Activities $ (527,687) Net Cash Provided by Financing Activities $1,060,000 NET INCREASE IN CASH DURING THE PERIOD $ 30,297 As of August 31, 2012 we had $30,297 in cash, current assets of $33,157, current liabilities of $238,316 and working capital of ($205,159). We currently have $30,297 cash in the bank. We do not expect to satisfy our cash requirements for business operations for the next 12 months with our current cash in the bank. We had working capital of ($205,159) at August 31, 2012. Our operating and capital requirements in connection with supporting our expanding operations and introducing new products have been and will continue to be significant to us. Since inception, our losses from operations along with the increased costs and working capital required to grow our business were satisfied through the initial contribution. CASH FLOWS FROM MARCH 22, 2012 (INCEPTION) THROUGH AUGUST 31, 2012 CASH FLOWS USED IN OPERATING ACTIVITIES Operating activities used net cash from March 22, 2012 (inception) through August 31, 2012 of ($502,016). Net cash used reflects an adjusted net loss for the year ended of $591,994, as adjusted for various items which impact net loss but do not impact cash during the period, such as changes in prepaid expenses ($2,860), security deposits ($10,512) and accounts payable $88,316 and adjustments for depreciation and amortization $15,034. CASH FLOWS USED IN INVESTING ACTIVITIES Our investing activities used $527,687 in net cash from March 22, 2012 (inception) through August 31, 2012. Net cash used is composed primarily of purchases of furniture and equipment, website development costs and purchase of intangibles. 11 <PAGE> CASH FLOWS FROM FINANCING ACTIVITIES Our financing activities provided cash in the amount $1,060,000 from March 22, 2012 (inception) through August 31, 2012. Net cash provided was composed primarily of related party loans in the amount of $410,000, proceeds received on notes payable in the amount of $150,000, and initial contributions of capital of $500,000. FUTURE FINANCING If we do not generate substantial revenue from operations we will require additional financing to fund our planned operations. We currently do not have committed sources of additional financing and may not be able to obtain additional financing, particularly, if the volatile conditions in the stock and financial markets, and more particularly the market for an early development stage company stocks persist. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to delay or scale down some or all of our development activities or perhaps even cease the operation of our business. Since inception we have funded our operations primarily through equity financings and we expect that we will continue to fund our operations through the equity and debt financing if revenues are insufficient. If we raise additional financing by issuing equity securities, our existing stockholders' ownership will be diluted. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his, her, or its investment in our common stock. Further, we may continue to be unprofitable. On June 29, 2012, our subsidiary Data Pangea LLC entered into a loan agreement with MLJP LLC, whereby MLJP has agreed to lend US $350,000 to Data Pangea. This loan is evidenced by a promissory note pursuant to which the principal amount will be due and payable on the earlier of September 1, 2013. The loan will bear interest at the rate of 12% per annum, payable in quarterly, in arrears, commencing August 29, 2012, and quarterly thereafter. MLJP LLC (Majority Stockholder) is a 45% shareholder of the Company. During August 2012, additional loans were made totaling $60,000. OFF BALANCE SHEET ARRANGEMENTS We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. DEVELOPMENT STAGE COMPANY Our company complies with the ASC 915, its characterization of our company as a Development Stage enterprise. 12 <PAGE> USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. We believe our estimates and assumptions are reasonable; however, such estimates and assumptions are subject to a number of risks and uncertainties that may cause actual results to differ materially from such estimates. RISKS AND UNCERTAINTIES Our company's business could be impacted by price pressure on its product manufacturing, acceptance of its products in the market place, new competitors, changes in federal and/or state legislation and other factors. If our company is unsuccessful in securing adequate liquidity, its plans may be curtailed. Adverse changes in these areas could negatively impact our company's financial position, results of operations and cash flows. CASH Cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. PROPERTY AND EQUIPMENT Property and equipment is stated at cost. Depreciation is computed by the straight-line method over estimated useful lives (3-7 years). Intellectual property assets are stated at their fair value acquisition cost. Amortization of intellectual property assets is calculated by the straight line method over their estimated useful lives (3- 15 years). Historical costs are reviewed and evaluated for their net realizable value of the assets. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, our company believes that no impairment of property and equipment existed at August 31, 2012. LONG-LIVED ASSETS Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, Our company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. Depreciation expense from inception March 22, 2012 through August 31, 2012 was $3,826. 13 <PAGE> REVENUE RECOGNITION Revenues of our company will be from the sale of advertising on the web-site and video viewing platform. Revenues will be recognized once all of the following criteria have been met: * persuasive evidence of an arrangement exists; * delivery of Facebook's obligations to our customer has occurred; * the price is fixed or determinable; and * collectability of the related receivable is reasonably assured. Advertising revenue is generated from the display of advertisements on our website and viewing platform. The arrangements are evidenced by either online acceptance of terms and conditions or contracts that stipulate the types of advertising to be delivered, the timing and the pricing. The typical term of an advertising arrangement is approximately 30 days with billing generally occurring after the delivery of the advertisement. We will recognize revenue from the display of impression-based advertisements on our website in the contracted period when the impressions are delivered. Impressions are considered delivered when an advertisement appears in pages delivered to users. We will also recognize revenue from the delivery of click-based advertisements on our website. Revenue associated with these advertisements is recognized in the period that a user clicks on an advertisement. ADVERTISING The costs of advertising are expensed as incurred. Advertising expenses are included in our company's operating expenses. Advertising expenses were $0 for the period from March 22, 2012 (inception) through August 31, 2012. RESEARCH AND DEVELOPMENT Research expenditure is recognized as an expense when it is incurred. Development expenditure is recognized as an expense except that expenditure incurred on development projects are capitalized as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalized if, and only if an entity can demonstrate all of the following: 1. its ability to measure reliably the expenditure attributable to the asset under development; 2. the product or process is technically and commercially feasible; 3. its future economic benefits are probable; 4. its ability to use or sell the developed asset; 5. the availability of adequate technical, financial and other resources to complete the asset under development; and 6. its intention to complete the intangible asset and use or sell. INCOME TAXES Our company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. 14 <PAGE> EARNINGS PER SHARE Our company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, "Earnings per Share". Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of our company. Note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties. Please see the section entitled "Forward-Looking Statements" on page 4 for important information to consider when evaluating such statements and related notes included under Item 8 hereof. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a "smaller reporting company," as defined by SEC regulations promulgated under the Securities Exchange Act of 1934, the Company is not required to provide the information required by this item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The accompanying financial statements of the Company and report of independent registered public accounting firm required by this item are filed herewith as Exhibit F and are incorporated herein by this reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES (a) The Company maintains a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). As required by Rule 13a-15(b) under the Exchange Act, management of the Company, under the direction of the Company's Chief Executive Officer and Chief Financial Officer, reviewed and performed an evaluation of the effectiveness of design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of August 31, 2012. Based on that review and evaluation, the Chief Executive Officer and Chief Financial Officer, along with the management of the Company, have determined that as of August 31, 2012, the disclosure controls and procedures are effective. MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of those internal controls. As defined by the SEC, internal control over financial reporting is a process designed by the Company's Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the 15 <PAGE> reliability of financial reporting and the preparation of the financial statements in accordance with U.S. generally accepted accounting principles. Management has assessed the effectiveness of the Company's internal control over financial reporting as of August 31, 2012. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its assessment and those criteria, management has concluded that its internal control over financial reporting was effective as of August 31, 2012. This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to SEC rules that permit the Company to provide only management's report in this annual report. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes in the Company's internal control over financial reporting or in other factors identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter ended August 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The Company has not adopted a Code of Ethics applicable to its officers, including its principal executive officer, principal financial officer, principal accounting officer or controller and any other persons performing similar functions. DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth the names, ages and positions held with respect to each executive officer and each member of the Board of Directors of the Company as of August 31, 2012. Name Age Position Since ---- --- -------- ----- Michael Spiegel 43 Chief Executive Officer, March 2012 President, and Director Lou Rosen 58 Chief Financial Officer, March 2012 Chief Operating Officer, and Director MICHAEL SPIEGEL has served as a Director of the Company since March 2012 and as the Company's Acting Principal Executive Officer since March 2012. Michael Spiegel was appointed as Chief Executive Officer. Michael Spiegel is an 16 <PAGE> established entrepreneur with a history of incubating technology startups since 1996. He has been an integral part in developing the burgeoning South Florida technology sector. Mr. Spiegel was the President of MNS Holdings, a real estate holding company located in Fort Lauderdale, Florida, from 2005 to 2011. In 1998 he founded WebUnited, one of the first regional ISP's in South Florida, and was its CEO until it was sold in 2004. Prior to that, he served as the CEO of Protectpoint Security, a managed security platform for small to mid-sized businesses. LOU ROSEN has served as a Director of the Company since March 2012, and is currently the Company's Acting Principal Financial Officer. Mr. Lou Rosen was appointed as Chief Operating Officer of the Company. Rosen brings over three decades of experience to VuMee. Prior to joining VuMee, Rosen was an integral part of his family's business, Lynn Electronics Corporation, one of the foremost providers of data and telecommunications products in the industry. Philadelphia, PA native, Lou Rosen received a BS in Education from Temple University in 1976 and continued his education at Temple earning a Juris Doctorate in 1980. Rosen's professional track record with Lynn Electronics Corporation shows great success and prowess. Since Lou Rosen's involvement, Lynn Electronics Corp. has expanded rapidly. As the retail telecom industry grew in the 1980s, Lynn went in a new direction and focused on manufacturing low voltage wire and cable. Keystone Wire & Cable emerged as the distribution arm of Lynn Electronics Corp. Rosen grew Keystone Wire & Cable by opening a warehouse in Pompano Beach, FL. His business model was extremely successful and, through relationships with competitors, Rosen coordinated negotiations to acquire a small local competitor. FAMILY RELATIONSHIPS There are no family relationships between any of the Company's executive officers and directors. CODE OF ETHICS The Company has not adopted a Code of Ethics applicable to its officers, including its principal executive officer, principal financial officer, principal accounting officer or controller or any other persons performing similar functions. AUDIT COMMITTEE The Company does not have a separately-designated, standing audit committee (the "Audit Committee"). The Company's Audit Committee comprises of the Board of Directors. During the 2012 fiscal year, the Audit Committee met with the management and independent auditors of the Company. The Audit Committee reviews the scope of the Company's accountants' engagement, including the remuneration to be paid, and reviews the independence of the auditors. The Audit Committee, with the assistance of appropriate personnel, reviews the Company's annual financial statements and the independent auditor's report, including any significant reporting and operational issues; corporate policies and procedures as they relate to accounting and financial reporting and financial controls; any litigation to which the Company is a party; and use by the Company's executive officers of expense accounts and other non-monetary perquisites, if any. The Audit Committee may direct the Company's legal counsel, independent auditors and internal staff to inquire into and report to it on any matter having to do with the Company's accounting or financial procedures or reporting. The Board of Directors has not adopted a written charter for the Audit Committee. The Board of Directors has determined that none of its Directors are considered an "audit committee financial expert" within the meaning of that term as defined in Item 407(d)(5)(ii) of Regulation S-K by the SEC pursuant to Section 407 of the Sarbanes-Oxley Act of 2002, as amended. The Company does not have an audit committee financial expert serving on its Audit Committee (as the Company is not presently engaged in active operations). 17 <PAGE> SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE To the Company's knowledge, based solely on its review of copies of filed reports (if any) furnished to the Company or written representations that no other reports were required, the Company believes that during the year ended August 31, 2012, its officers, directors and greater than ten percent (10%) beneficial owners complied with all Securities Exchange Act of 1934 Section 16(a) filing requirements. ITEM 11. EXECUTIVE COMPENSATION The Summary Compensation Table below sets forth compensation paid by the Company to Michael Spiegel, the Company's Chief Executive Officer, and Lou Rosen, the Company's Chief Financial Officer, for the fiscal year ended August 31, 2012 (as applicable). Mr. Spiegel and Mr. Rosen are collectively referred to as the "Named Executive Officers." SUMMARY COMPENSATION TABLE Name and Option Principal Position Year Salary($) Bonus($) awards($)(1)(2) Total ------------------ ---- --------- -------- --------------- ----- Michael Spiegel 2012 -0- -0- -0- -0- Chief Executive Officer and President Lou Rosen 2012 -0- -0- -0- -0- Chief Financial Officer ---------- (1) The Company does not have any employment contract or termination of employment or change in control agreement with any Named Executive Officer. (2) The amounts in this column (if any) do not reflect compensation actually received by the Named Executive Officer nor do they reflect the actual value that will be recognized by the Named Executive Officer. COMPENSATION OF DIRECTORS The Board of Directors is not compensated for each regular meeting they attend and are also not reimbursed for out-of-pocket expenses associated with attendance. Director Compensation Fees Non-Equity Nonqualified Earned Incentive Deferred Paid in Stock Option Plan Compensation All Other Name Cash Awards Awards Compensation Earnings Compensation Total ---- ---- ------ ------ ------------ -------- ------------ ----- <S> <C> <C> <C> <C> <C> <C> <C> Michael Spiegel -0- -0- -0- -0- -0- -0- -0- Lou Rosen -0- -0- -0- -0- -0- -0- -0- ---------- (1) No directors fee were paid for attendance at the 2012 annual meeting of stockholders and attendance at regular Board meeting in 2012. 18 <PAGE> OPTION GRANTS IN 2012 The Company granted no stock options during the year ended August 31, 2012, and as of August 31, 2012 the Company had no stock options outstanding or exercisable. FISCAL YEAR END OPTION VALUES There were no stock options exercised by any Named Executive Officer during 2012. As of August 31, 2012, there were no stock options outstanding or exercisable. EMPLOYMENT CONTRACTS The Company has no employment agreements. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Board of Directors does not have a separate compensation committee, or any other committee performing similar functions. Rather, the entire Board of Directors acts as a compensation committee. The Company has only one part-time employee. The Board of Directors does not believe the Company would derive any significant benefit from a separate compensation committee. The Board of Directors, in the foregoing capacity, has determined to compensate non-employee directors as provided under the heading "Compensation of Directors" above, and to compensate executive officers as provided above. COMPENSATION COMMITTEE REPORT As a "smaller reporting company," as defined by SEC regulations promulgated under the Securities Exchange Act of 1934, the Company is not required to review or discuss the Compensation Discussion and Analysis required by ss.229.402(b). Board of Directors Michael Spiegel Lou Rosen ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS EQUITY COMPENSATION PLANS The following table sets forth summary information regarding equity compensation plans previously approved and not previously approved by the Company's stockholders as of August 31, 2012. 19 <PAGE> Number of Securities to be Number of Securities Issued Upon Exercise of Weighted-Average Exercise Remaining Available for Outstanding Options, Price of Outstanding Options, Future Issuance Under Plan Category Warrants and Rights Warrants and Rights Equity Compensation Plans ------------- ------------------- ------------------- ------------------------- <S> <C> <C> <C> Equity Compensation Plans -0- -- -- Approved by Security Holders Equity Compensation Plans Not -0- -- -- Approved by Security Holders TOTAL -0- -- -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table shows, as of August 31, 2012, the Common Stock of the Company owned beneficially by (i) each director of the Company, (ii) each executive officer of the Company, (iii) all directors and executive officers as a group, and (iv) each person known by the Company to be the "beneficial owner" of more than five percent (5%) of the outstanding shares of such Common Stock. "Beneficial ownership" is a technical term broadly defined by the SEC to mean more than ownership in the usual sense. For example, you "beneficially" own Common Stock not only if you hold it directly, but also if you indirectly (through a relationship, a position as a Director or trustee, or a contract or understanding) have or share the power to vote or sell the stock or have the right to acquire it within 60 days. Percentage of Shares Class Beneficially Beneficially Title of Name (1) Current Title Owned Owned Class -------- ------------- ----- ----- ----- <S> <C> <C> <C> <C> Michael Spiegel Director; Chief Executive Officer -0- * Common and President Lou Rosen Director; Chief Financial Officer -0- * Common All Directors and Executive Officers as a Group (2 Persons) -0- * Common ---------- * Less than 1.0%. (1) The address for all persons listed above is c/o VuMEE, Inc., 50 E. Sample Road, Suite 301, Pompano Beach, Florida 33064. 20 <PAGE> ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The following describes certain transactions or relationships between the Company and its officers, directors and certain related parties in which any of them had a direct or indirect material interest. Except as otherwise stated below, all transactions between and among the Company and its subsidiaries described below, its executive officers and the subsidiaries and each of their respective affiliates may involve conflicts of interest. The Company believes that transactions with affiliates have been made on terms no less favorable to the Company than those available from unaffiliated third parties. FUNDING ARRANGEMENTS AND WORKING CAPITAL LOANS Because the Company expects to exhaust its limited cash resources, and does not have any active business operations to generate cash flow to fund its operating expenses, the Company will need to raise additional cash before its cash resources are exhausted or cease operations and liquidate. During the past year, the Company had relied upon the Majority Stockholder to fund operations and expenses (and to extend maturities on indebtedness funded by the Majority Stockholder). The Majority Stockholder has no commitment or obligation to provide additional funding or financing to the Company (or to extend maturities on existing indebtedness), based on a recent communication with the Majority Stockholder, the Company anticipates receiving an additional working capital loan from the Majority Stockholder during the fiscal year 2013. During fiscal year ended August 31, 2012, the Company received loans from its Majority Stockholder in the amount of $410,000. DIRECTOR INDEPENDENCE The members of the Board of Directors are not all "independent" under the definition of independence pursuant to NASDAQ National Market ("NASDAQ") listing standards. None of the members of the Audit Committee are "independent" under the definition of independence for audit committee members pursuant to the NASDAQ listing standards. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES AUDIT FEES The aggregate fees billed for professional services rendered by Drake & Klein, CPAs regarding the audit of the Company's financial statements for the fiscal year ended August 31, 2012 was approximately $7,500 each year. The aggregate fees billed by Drake & Klein, CPAs regarding the reviews of the financial statements included in the Company's Forms 10-Q for the fiscal year ended August 31, 2012 was $2,500. 21 <PAGE> AUDIT-RELATED FEES The aggregate fees billed for audit-related services rendered by Drake & Klein, CPAs to the Company, during the fiscal years ended August 31, 2012, was $0. TAX FEES The aggregate fees billed for tax-related services provided by Drake & Klein, CPAs in connection with tax compliance, tax advice and tax planning services for the fiscal year ended August 31, 2012, was approximately $0. Drake & Klein, CPAs did not prepared the Company's income tax returns for the fiscal year ended August 31, 2012 and provided no tax-related services during the fiscal year ended August 31, 2012. ALL OTHER FEES The Company paid additional fees to Tracy Weintraub, PA for the fiscal year ended August 31, 2012, is $8,000. (for general business consulting). PRE-APPROVAL OF SERVICES BY THE EXTERNAL AUDITOR The Audit Committee has adopted a policy for pre-approval of audit and permitted non-audit services by the Company's external auditor. The Audit Committee will consider annually and, if appropriate, approve the provision of audit services by its external auditor and consider and, if appropriate, pre-approve, the provision of certain defined audit and non-audit services. The Audit Committee will also consider on a case by case basis and, if appropriate, approve specific engagements that are not otherwise pre-approved. Of the AUDIT-RELATED FEES, TAX FEES and ALL OTHER FEES described above, the Audit Committee pre-approved the fees billed. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements Reference is made to the Index set forth on Page F-1 of this Annual Report on Form 10-K. (a)(2) Financial Statement Schedules All schedules have been omitted because they are inapplicable or the information is provided in the financial statements, including the notes thereto. (a)(3) Exhibits 31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of the Chief Financial Officer Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101 Interactive data files pursuant to Rule 405 of Regulation S-T. 22 <PAGE> 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. VuMEE, INC. By: /s/ Michael Spiegel ------------------------------------- Michael Spiegel Chief Executive Officer and President By: /s/ Lou Rosen ------------------------------------- Lou Rosen Chief Financial Officer Dated: October 16, 2012 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. <S> <C> <C> SIGNATURE TITLE DATE --------- ----- ---- /s/ Michael Spiegel ----------------------------- Chief Executive Officer, President and Director October 16, 2012 Michael Spiegel Principal Executive Officer /s/ Lou Rosen ----------------------------- Chief Financial Officer and Director October 16, 2012 Lou Rosen Principal Financial and Accounting Officer 23 <PAGE> "EXHIBIT F" INDEX TO FINANCIAL STATEMENTS VuMEE, Inc. PAGE ---- Report of Independent Registered Public Accounting Firm .................. F-2 Balance Sheet as of August 31, 2012 ...................................... F-3 Statement of Operations from March 22, 2012 (Inception) through August 31, 2012 .......................................................... F-5 Statement of Stockholders' Deficiency from March 22, 2012 (Inception) through August 31, 2012 .................................................. F-6 Statement of Cash Flows from March 22, 2012 (Inception) through August 31, 2012 .......................................................... F-7 Notes to Financial Statements ............................................ F-8 F-1 <PAGE> DRAKE & KLEIN CPAS A PCAOB REGISTERED ACCOUNTING FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders VuMEE, Inc. We have audited the accompanying balance sheet of VuMEE, Inc. as of August 31, 2012, and the related statement of operations, stockholders' deficiency, and cash flows from March 22, 2012 (Inception) through August 31, 2012 then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of VuMEE, Inc. as from March 22, 2012 (Inception) through August 31, 2012, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has significant net losses and cash flow deficiencies. Those conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding those matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Drake & Klein CPAs --------------------------------- Drake & Klein CPAs Clearwater, Florida September 21, 2012 PO Box 2493 2451 McMullen Booth Rd. Dunedin, FL 34697-2493 Suite 210 727-512-2743 Clearwater, FL 33759-1362 F-2 <PAGE> VuMEE, Inc. F/K/A Paperworks, Inc. (A Development Stage Company) Balance Sheet August 31, 2012 --------------- ASSETS Current assets: Cash $ 30,297 Prepaid expenses 2,860 -------- Total current assets 33,157 -------- Property and equipment: Computer equipment 64,810 Furniture and fixtures 2,000 Leasehold improvements 1,681 -------- Total property and equipment 68,491 Less accumulated depreciation 3,826 -------- Property and equipment, net 64,665 -------- Other assets: Security deposits 10,512 Website development 334,196 Intangible assets, net 113,792 -------- Total other assets 458,500 -------- Total assets $556,322 ======== The accompanying notes are an integral part of these financial statements. F-3 <PAGE> VuMEE, Inc. F/K/A Paperworks, Inc. (A Development Stage Company) Balance Sheet (continued) August 31, 2012 --------------- LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current liabilities: Accounts payable $ 88,316 Note payable 150,000 --------- Total current liabilities 238,316 --------- Long-term liabilities: Due to related party 410,000 --------- Total liabilities 648,316 --------- Commitments and contingencies Stockholders' deficiency: Common Stock, $0.001 par value per share. 750,000,000 shares authorized, 60,001,000 shares issued and outstanding at August 31, 2012 60,001 Additional paid-in capital 439,999 Accumulated deficit during the development stage (591,994) --------- Total stockholders' deficiency (91,994) --------- Total liabilities and stockholders' deficiency $ 556,322 ========= The accompanying notes are an integral part of these financial statements. F-4 <PAGE> VuMEE, Inc. F/K/A Paperworks, Inc. (A Development Stage Company) Statement of Operations From March 22, 2012 (Inception) through August 31, 2012 --------------- Revenue $ -- ------------ Expenses: Computer and internet expenses 171,132 Marketing and related expenses 141,373 Salary expenses 80,818 Professional fees 54,228 Travel and related expenses 40,338 Contract labor 38,400 Amortization and depreciation expenses 15,034 Other general and administrative 50,671 ------------ Total expenses 591,994 ------------ Loss before income taxes (591,994) Provision for income taxes -- ------------ Net loss $ (591,994) ============ Basic and diluted net loss per share: Net loss per common share $ (0.01) ============ Net loss attributable to common stockholders $ (0.01) ============ Basic and diluted weighted average shares outstanding 60,000,174 ============ The accompanying notes are an integral part of these financial statements. F-5 <PAGE> VuMEE, Inc. F/K/A Paperworks, Inc. (A Development Stage Company) Statement of Stockholders' Deficiency Accumulated Deficit Additional During the Common Stock Paid in Development Shares Par Value Capital Stage Total ------ --------- ------- ----- ----- <S> <C> <C> <C> <C> <C> Balance at March 21, 2012 6,000,000 6,000 54,000 (45,955) 14,045 Net loss to reverse merger -- -- -- (22,659) (22,659) Stock split 10-1 share of common stock 54,000,000 54,000 (54,000) -- -- Cancellation of previously issued common stock (30,000,000) (30,000) 30,000 -- -- Issuance of common stock in exchange for 100% interest in Data Pangea, LLC 30,001,000 30,001 478,613 -- 508,614 Recapitalization of Paperworks, Inc. on reverse merger -- -- (68,614) 68,614 -- Net loss from March 22, 2012 (inception) through August 31, 2012 -- -- -- (591,994) (591,994) ----------- -------- -------- --------- --------- Balance at August 31, 2012 60,001,000 $ 60,001 $439,999 $(591,994) $ (91,994) =========== ======== ======== ========= ========= The accompanying notes are an integral part of these financial statements. F-6 <PAGE> VuMEE, Inc. F/K/A Paperworks, Inc. (A Development Stage Company) Statement of Cash Flows From March 22, 2012 (Inception) through August 31, 2012 --------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (591,994) Adjustments to reconcile net loss to net cash used in operating activities: Amortization and depreciation 15,034 Changes in operating assets and liabilities: Increase decrease in Prepaid expenses (2,860) Increase decrease in Security deposits (10,512) Increase decrease in Accounts payable 88,316 ----------- NET CASH USED IN OPERATING ACTIVITIES (502,016) ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment (68,491) Purchase of intangibles (125,000) Increase in website development costs (334,196) ----------- NET CASH USED IN INVESTING ACTIVITIES (527,687) ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from note payables 150,000 Proceeds from related party loans 410,000 Proceeds from stockholders' equity 500,000 ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 1,060,000 ----------- Net increase in cash 30,297 Cash at beginning of period -- ----------- Cash at end of period $ 30,297 =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Interest paid $ -- ----------- Income taxes paid $ -- ----------- The accompanying notes are an integral part of these financial statements. F-7 <PAGE> VuMEE, Inc. FKA Paperworks, Inc. (A Development Stage Company) Notes to the Financial Statements 1. GENERAL ORGANIZATION AND BUSINESS VuMee, Inc., F/K/A PaperWorks, Inc. ("the Company") was incorporated under the laws of State of Nevada on April 30, 2008, with an authorized capital of 75,000,000 common shares with a par value of $0.001. The Company's year- end is August 31st. The company is in the development stage. The Corporation per Plan of Merger dated April 23, 2012 deemed it advisable that VuMee, Inc. (it's wholly owned subsidiary) be merged into the Company with the Company remaining as the surviving Corporation under the name "VuMee, Inc.". Also on April 23, 2012, The Company voted to effect a split of the Corporation's authorized, issued and outstanding shares of common stock on a one (1) old for ten (10) new basis, such that its authorized capital shall increase from 75,000,000 shares to 750,000,000 shares of common stock and, correspondingly, its issued and outstanding shares increased from 6,000,000 shares to 60,000,000 shares of common stock, all with a par value of $0.001; no fractional shares were issued in connection with the Forward Split, in the case of a fractional share, the fractional share were rounded up. GOING CONCERN These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $591,994, as of August 31, 2012 and further losses are anticipated in the development of its business raising substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock. ACQUISITION On May 17, 2012, the Company closed a share exchange agreement with Data Pangea, LLC, a Florida Limited Liability Company ("Data Pangea"), in exchange for 30,001,000 shares of its common stock. Concurrently a former director and officer cancelled 30,000,000 shares previously held. This transaction was accounted for as a reverse merger. These statements contain the balance sheet and operations of Data Pangea before and after the merger. Since, Data Pangea was started in March 2012, there is no audited balance sheet at August 31, 2011. Data Pangea, LLC.is a limited liability company organized on March 22, 2012 under the laws of Florida. Data Pangea, LLC d/b/a VuMee was founded on the principle that celebrities should be monetized for video content that they publish to their social networks. Data Pangea is a development stage entity that was organized to purchase and utilize the intangible assets of a company related by certain common owners. F-8 <PAGE> VuMee allows celebrities with a social network fan base ("Celebrities") the ability to generate revenue by simply uploading video content to their social networks. The VuMee platform allows Celebrities the ability to share in the advertising revenues with the Company. VuMee is a fully functional celebrity video sharing platform via a mobile experience. VuMee has developed an automated mobile video content distribution network for distributing video content with paid advertising over mobile networks. VuMee's proprietary business model harnesses the global power of existing social networks, by providing a way to monetize Celebrities' friends and fans. VuMee provides the ability for anyone or any brand with a fan base, to upload video via the VuMee App on their mobile device or PC, and seamlessly share that content with their fan base. VuMee's proprietary business methodology and software provides the method of coupling paid advertising with video content which allows the Celebrity to generate revenue through the VuMee platform. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DEVELOPMENT STAGE COMPANY The Company complies with the ASC 915, its characterization of the Company as a Development Stage enterprise. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management's knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results. We believe our estimates and assumptions are reasonable; however, such estimates and assumptions are subject to a number of risks and uncertainties that may cause actual results to differ materially from such estimates. RISKS AND UNCERTAINTIES The Company's business could be impacted by price pressure on its product manufacturing, acceptance of its products in the market place, new competitors, changes in federal and/or state legislation and other factors. If the Company is unsuccessful in securing adequate liquidity, its plans may be curtailed. Adverse changes in these areas could negatively impact the Company's financial position, results of operations and cash flows. CASH Cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. CONCENTRATIONS OF CREDIT RISK AND FAIR VALUE Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable. The Company maintains significant cash deposits primarily with three financial institutions. All deposits are fully insured as of August 31, 2012. The Company has not previously experienced any losses on such deposits. Additionally, the Company performs periodic evaluations of the relative credit ratings of these institutions as part of its investment strategy. Concentrations of credit risk with respect to accounts receivable are limited due to accelerated payment terms in current customer contracts and creditworthiness of the current customer base. F-9 <PAGE> The carrying amounts of cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses approximate fair value due to the short-term nature of these instruments. The carrying value of loans and notes payable approximate fair value based on their terms which reflect market conditions existing as of August 31, 2012. PROPERTY AND EQUIPMENT Property and equipment is stated at cost. Depreciation is computed by the straight-line method over estimated useful lives (3-7 years). Intellectual property assets are stated at their fair value acquisition cost. Amortization of intellectual property assets is calculated by the straight line method over their estimated useful lives (3- 15 years). Historical costs are reviewed and evaluated for their net realizable value of the assets. The carrying amount of all long-lived assets is evaluated periodically to determine if adjustment to the depreciation and amortization period or the unamortized balance is warranted. Based upon its most recent analysis, the Company believes that no impairment of property and equipment existed at August 31, 2012. LONG-LIVED ASSETS Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any period ended August 31, 2012. Depreciation expense from March 22, 2012 (inception) through August 31, 2012 was approximately $3,800. REVENUE RECOGNITION Revenues of the Company will be from the sale of advertising on the web-site and video viewing platform. Revenues will be recognized once all of the following criteria have been met: * persuasive evidence of an arrangement exists; * delivery of Facebook's obligations to our customer has occurred; * the price is fixed or determinable; and * collectability of the related receivable is reasonably assured. Advertising revenue is generated from the display of advertisements on our website and viewing platform. The arrangements are evidenced by either online acceptance of terms and conditions or contracts that stipulate the types of advertising to be delivered, the timing and the pricing. The typical term of an advertising arrangement is approximately 30 days with billing generally occurring after the delivery of the advertisement. We will recognize revenue from the display of impression-based advertisements on our website in the contracted period when the impressions are delivered. Impressions are considered delivered when an advertisement appears in pages delivered to users. We will also recognize revenue from the delivery of click-based advertisements on our website. Revenue associated with these advertisements is recognized in the period that a user clicks on an advertisement. F-10 <PAGE> ADVERTISING The costs of advertising are expensed as incurred. Advertising expenses are included in the Company's operating expenses. Advertising expenses were $0 for the period from inception, March 22, 2012 through August 31, 2012. RESEARCH AND DEVELOPMENT Research expenditure is recognized as an expense when it is incurred. Development expenditure is recognized as an expense except that expenditure incurred on development projects are capitalized as long-term assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalized if, and only if an entity can demonstrate all of the following: 1. its ability to measure reliably the expenditure attributable to the asset under development; 2. the product or process is technically and commercially feasible; 3. its future economic benefits are probable; 4. its ability to use or sell the developed asset; 5. the availability of adequate technical, financial and other resources to complete the asset under development; and 6. its intention to complete the intangible asset and use or sell. INCOME TAXES The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. EARNINGS PER SHARE The Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, "Earnings per Share". Basic earnings per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. RECENT ACCOUNTING PRONOUNCEMENTS The Company reviews new accounting standards as issued. No new standards had any material effect on these financial statements. The accounting pronouncements issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to August 31, 2012 through the date these financial statements were issued. 3. FINANCIAL INSTRUMENTS AND FAIR VALUES The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument. F-11 <PAGE> The carrying amount of cash and other assets approximates fair value due to the short-term maturities of these instruments. The fair values of all other financial instruments, including debt, approximate their book values as the instruments are short-term in nature or contain market rates of interest. 4. INTANGIBLE ASSETS During 2011 and the first months of 2012, VuMee, LLC a Delaware limited liability company, was developing a social media video sharing platform. In March 2012, as part of a settlement agreement between members, VuMee, LLC transferred the intangible assets developed to VuMee Acquisition, LLC, also a Delaware limited liability company. On March 23, 2012 VuMee Acquisition and Data Pangea entered into an asset purchase agreement, whereby Data Pangea purchased all of the intangible assets of VuMee Acquisition. The final value of each asset and the allocation of the purchase price of the intangible assets has not yet been determined. Current estimates are listed below. Certain members of VuMee, LLC and VuMee,Acquisition LLC also have an interest in Data Pangea. Due to the related party relationship, the recorded values of the intangible assets acquired by Data Pangea will be limited to the consideration given. Identifiable intangible assets at August 31, 2012 include the following: Allocated Amortization purchase price Period (years) -------------- -------------- Trade names, logos, trademarks $ 10,000 10 years Internet domain name 2,000 10 years Patents 45,000 10 years Customer lists 11,000 5 years Software 50,000 3 years Website 2,000 3 years Infrastructure - procedures, manuals, records 5,000 3 years -------- Total purchase price to allocate $125,000 ======== Amortization expense for the period, March 22, 2012 through August 31, 2012 was approximately $11,000. 5. NOTE PAYABLE - SHORT-TERM The Company has a note payable in the amount of $150,000. The interest is at 8% per annum and shall be paid quarterly in arrears commencing October 15, 2012 and quarterly thereafter. The note matures on June 30, 2013. 6. DUE TO RELATED PARTY - LONG-TERM As of August 31, 2012, the Company has loans payable to stockholders in the amount of $410,000. Interest at 12% per annum and will accrue quarterly beginning August 29, 2012 with all unpaid interest and principal payable on September 1, 2013. 7. COMMON STOCK The total number of common shares authorized that may be issued by the Company is 750,000,000 shares with a par value of one tenth of one cent ($0.001) per share. No other class of shares is authorized. F-12 <PAGE> On August 31, 2008, the company issued 3,000,000 pre-split shares of the common stock for a total cash proceeds of $15,000. On July 13, 2009, the Company issued 3,000,000 pre-split shares of common stock for a total cash proceeds of $45,000. On May 17, 2012 the Company issued 30,001,000 shares of its common stock for the acquisition of Data Pangea, LLC, and cancelled 30,000,000 shares of common stock of a former Director/Officer. At August 31, 2012 there were no outstanding stock options or warrants. As of August 31, 2012, the Company had 60,001,000 common shares issued and outstanding. 8. COMMITMENTS AND CONTINGENCIES LEASES VuMEE is leasing corporate office space located in Pompano Beach, Florida from an unrelated third party. The lease was effective May 4, 2012, and provides for a term of three years and two months with monthly rental payments of approximately $2,700 with 3% annual increases. The lease provides for a one, three year renewal unless either party provides at least 30 days' prior written notice to the other of its intent to terminate the lease upon expiration of the then-current term. The total rents paid in 2012 were approximately $7,800. LEGAL PROCEEDINGS From time to time, the Company is party to business disputes arising in the normal course of its business operations. The Company's management believes that none of these actions, standing alone, or in the aggregate, is currently material to the Company's operations or financial condition. EMPLOYMENT AGREEMENTS The Company has no employment agreements. 9. INCOME TAXES As of August 31, 2012, the Company had net operating loss carry forwards of approximately $592,000 that may be available to reduce future years' taxable income through 2032. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. Significant components of the Company's net deferred income taxes are as follows: From March 22, 2012 (Inception) through August 31, 2012 --------------- Deferred tax assets: Net operating loss carryforwards $ 228,400 --------- Deferred tax assets 228,400 Less valuation allowance (228,400) --------- Net deferred tax assets $ -- ========= F-13 <PAGE> A reconciliation of the U.S. statutory federal income tax rate to the effective income tax rate (benefit) follows: From March 22, 2012 (Inception) through August 31, 2012 --------------- U.S. Federal Statutory rate (35.00%) State income taxes, net of federal benefit (3.58) Change in valuation allowance 38.58 --------- 0.00% ========= In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more than likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making the assessment. After consideration of the evidence, both positive and negative, management has determined that a $228,400 valuation allowance at August 31, 2012 is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. The change in the valuation allowance for the current year is $228,400. At August 31, 2012, the Company has available net operating loss carryforwards for federal and state income tax purposes of approximately $592,000 expiring at various times through 2032. 10. VALUATION AND QUALIFYING ACCOUNTS A summary of the activity in the Company's valuation and qualifying accounts is as follows: Balance at Charged to Balance at Beginning of Costs and Other End of Description Period Expenses Write-off's Changes Period ----------- ------ -------- ----------- ------- ------ <S> <C> <C> <C> <C> <C> Deferred tax asset valuation allowance: From March 22, 2012 (Inception) through August 31, 2012 -- $228,400 -- -- $228,400 11. SUBSEQUENT EVENT On September 1, 2012, the Company entered into one year employment agreements with Michael Spiegel, CEO and Lou Rosen, CFO for monthly compensation in the amount of $12,500 and $12,500, respectively. F-14

XOTC:VUME Annual Report 10-K Filling

XOTC:VUME Stock - Get Annual Report SEC Filing of XOTC:VUME stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

XOTC:VUME Annual Report 10-K Filing - 8/31/2012
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