Summary of VUMEE INC. - Yahoo! Finance

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT 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 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. These statements contain the balance sheet and operations of Data Pangea before and after the merger. Since, Data Pangea was started on March 22, 2012, there is no audited balance sheet at November 30, 2011.

Data Pangea is a limited liability company, organized on March 22, 2012 under the laws of Florida. Data Pangea, 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 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.

On November 26, 2012, we entered into a line of credit agreement with Coventry Capital LLC pursuant to which Coventry will make available up to $2,000,000 by way of advances. Pursuant to the terms of the agreement, all indebtedness shall be paid to Coventry on November 26, 2013 and thereon, shall bear interest at the rate of 8% per annum, calculated annually. Coventry has the option to, at any time, convert any portion of the outstanding debt into shares of our common stock at the closing price of our stock on the day preceding the notice to convert.

RESULTS OF OPERATIONS

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended November 30, 2012 which are included herein.

THREE MONTHS  ENDED  NOVEMBER  30, 2012 AND FROM MARCH 22, 2012  (INCEPTION)  TO
NOVEMBER 30, 2012.

                                                                 Cumulative From
                                                   Three Months   March 22, 2012
                                                      Ended       (Inception) To
                                                   November 30,    November 30,
                                                      2012            2012
                                                   ----------      ----------
Revenues                                           $   14,616      $   14,616
Expenses                                           $  416,041      $1,008,035
Net Loss                                           $ (401,425)     $ (993,419)

EXPENSES

Our  operating  expenses for the three  months ended  November 30, 2012 and from
March 22, 2012 (inception) to November 30, 2012 are outlined in the table below:

                                                                 Cumulative From
                                                   Three Months   March 22, 2012
                                                      Ended       (Inception) To
                                                   November 30,    November 30,
                                                      2012            2012
                                                   ----------      ----------
Payroll and related expenses                       $  116,214      $  197,033
Management fees                                    $   75,000      $   75,000
Impairment loss                                    $   55,422      $   55,422
Marketing and related expenses                     $   30,532      $  171,905
Computer and internet expenses                     $   29,928      $  201,060
Interest expenses                                  $   20,771      $   22,771
Professional fees                                  $   16,440      $   70,667
Amortization and depreciation expenses             $   13,397      $   28,431
Other general and administrative                   $   58,337      $  185,746

NET LOSS

For the three months ended November 30, 2012 and from March 22, 2012 (inception) to November 30, 2012, our company incurred a net loss of $401,425 and $993,419, respectively. Most of the expenses for the quarter were due to payroll and related expenses, management fees, impairment losses, marketing and computer expenses.

LIQUIDITY AND CASH REQUIREMENTS

WORKING CAPITAL
                                                       At              At
                                                   November 30,     August 31,
                                                      2012            2012
                                                   -----------     -----------
Current Assets                                     $    19,032     $    33,157
Current Liabilities                                $ 1,068,024     $   238,316
Working Capital                                    $(1,048,992)    $  (205,159)

CASH FLOWS

                                                                 Cumulative From
                                                   Three Months   March 22, 2012
                                                      Ended       (Inception) To
                                                   November 30,    November 30,
                                                      2012            2012
                                                   ----------      ----------
Net Cash  (Used in) Operating Activities           $ (254,036)     $ (756,052)
Net Cash (Used In) Investing Activities            $  (83,403)     $ (611,090)
Net Cash Provided by Financing Activities          $  308,720      $1,368,720
NET INCREASE (DECREASE) IN CASH DURING THE PERIOD  $  (28,719)     $    1,578

As of November 30, 2012 we had $1,578 in cash, current assets of $19,032, current liabilities of $1,068,024 and a working capital deficit of ($1,048,992).

We currently have $1,578 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 deficit of ($1,048,992) at November 30, 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 FOR THE THREE MONTHS ENDED NOVEMBER 30, 2012 AND FROM MARCH 22, 2012
(INCEPTION) THROUGH NOVEMBER 30, 2012

CASH FLOWS USED IN OPERATING ACTIVITIES

Operating activities used net cash for the three months ended November 30, 2012 and from March 22, 2012 (inception) through November 30, 2012 of ($254,036) and ($756,052), respectively. Net cash used reflects an adjusted net loss for the three months ended November 30, 2012 and from March 22, 2012 (inception) through November 30, 2012 of $401,425 and $993,419, respectively. The period adjustments for various items which impact net loss but do not impact cash during the period, such as impairment loss, amortization and depreciation, and changes in accounts receivable, prepaid expenses, security deposits, accounts payable, accrued management fees, and accrued interest payable.

CASH FLOWS USED IN INVESTING ACTIVITIES

Our investing activities used $83,403 for the three months ended November 30, 2012 and $611,090 in net cash from March 22, 2012 (inception) through November 30, 2012. Net cash used is composed primarily of purchases of furniture and equipment, website development costs and purchase of intangibles.

CASH FLOWS FROM FINANCING ACTIVITIES

Our financing activities provided cash in the amount $308,720 for the three months ended November 30, 2012 and $1,368,720 from March 22, 2012 (inception) through November 30, 2012. Net cash provided was composed primarily of related party loans, proceeds received on notes payable and initial contributions of capital.

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 $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.

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.

CRITICAL ACCOUNTING POLICIES

Our unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial information have been included. Operating results for the period, March 22, 2012 through November 30, 2012 are not necessarily indicative of the results that may be expected for the year ending August 31, 2013.

DEVELOPMENT STAGE COMPANY

Our company complies with the ASC 915, its characterization of our 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

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 November 30, 2012.

Depreciation expenses were $6,672 and $10,498, for the three months ended November 30, 2012 and from March 22, 2012 (inception) through November 30, 2012, respectively.

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. During the quarter ended November 30, 2012, our company impaired all of its original intangible assets related to patents, customer lists, and infrastructure - procedures, manual and records, in the amount of $55,422.

Amortization expenses were $6,725 and $17,933, for the three months ended November 30, 2012 and from March 22, 2012 (inception) through November 30, 2012, respectively.

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 three months ended November 30, 2012 and from March 22, 2012 (inception) through November 30, 2012, respectively.

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.

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.