FonU2 (FONU) 10-Q/A 2013 Q2 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

FORM 10-Q/A

____________________

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to____________

Commission File No. 000-49652

FONU2 Inc.

(Exact name of registrant as specified in its charter)

Nevada	65-0773383
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

331 East Commercial Blvd.

Ft. Lauderdale, Florida 33334

 (Address of principal executive offices)

(954) 938-4133

 (Registrant’s telephone number, including area code)

Zaldiva, Inc.

(Former name, former address and former fiscal year,

if changed since last report)

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 (§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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition 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]

1

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Not applicable.

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:

May 17, 2012 - Common – 66,368,945

May 17, 2012 - Preferred –175,000

EXPLANATORY NOTE

On May 21, 2012, FONU2 Inc., a Nevada corporation formerly known as “Zaldiva, Inc.” (the “Company”), filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012 (the “Original Filing”).  The Company is filing this amended Quarterly Report on Form 10-Q/A to reflect the restatement of its unaudited financial statements for the quarterly period ended March 31, 2012, and the notes thereto.  For a more detailed discussion of this restatement, see “Note 8 – Restated Financial Statements” of the unaudited financial statements included in Part I, Item 1 hereof.  Information contained in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” has also been restated as applicable.  With the exception of these changes, this Form 10-Q/A continues to describe conditions that existed as of the date of the Original Filing.  The Company has not updated such disclosures to reflect events that have occurred subsequent to the Original Filing date.

PART I

Item 1.  Financial Statements

The financial statements of the registrant required to be filed with this amended Quarterly Report on Form 10-Q/A were prepared by management and commence below, together with related notes. In the opinion of management, the financial statements fairly present the financial condition of the registrant.

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FONU2 INC.

(formerly Cygnus Internet, Inc.)

Balance Sheets

ASSETS
			March 31,		December 31,
			2012		2011
			(Restated)		(Restated)
CURRENT ASSETS			(Unaudited)
	Cash		$	14,630	$	-
	Inventory			18,044		-
	Prepaid expenses			420,000		-
		Total Current Assets		452,674		-
PROPERTY AND EQUIPMENT, net				333,555		1,030
OTHER ASSETS
	Security deposits			2,285		2,285
		TOTAL ASSETS	$	788,514	$	3,315
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
	Accounts payable and accrued expenses		$	14,895	$	11,800
	Notes payable			-		25,000
	Convertible notes payable			75,000		-
	Bank overdraft			-		893
		Total Current Liabilities		89,895		37,693
		TOTAL LIABILITIES		89,895		37,693
STOCKHOLDERS' (DEFICIT)
	Preferred stock series A; 1,400,000 shares authorized,
	at $0.01 par value, 500,000 and 868,239
	shares issued and outstanding, respectively			500		8,682
	Preferred stock series B; 1,712,052 shares authorized,
	at $0.01 par value, -0- and 1,639,638			-		16,394
	shares issued and outstanding, respectively
	Common stock; 50,000,000 shares authorized,
	at $0.01 par value, 65,436,182 and 16,003,175
	shares issued and outstanding, respectively			65,436		16,003
	Additional paid-in capital			37,338,514		2,372,400
	Deficit accumulated during the development stage			(36,705,831)		(2,447,857)
		Total Stockholders' Deficit		698,619		(34,378)
		TOTAL LIABILITIES AND STOCKHOLDERS'
		(DEFICIT)	$	788,514	$	3,315

The accompanying notes are an integral part of these unaudited financial statements.

3

FONU2, INC.
(Formerly Cygnus Internet, Inc.)
Statements of Operations
(unaudited)
(Restated)
			For the Three Months Ended
			March 31,
			2012		2011
REVENUES			$	-	$	-
COST OF SALES				-		-
GROSS PROFIT				-		-
OPERATING EXPENSES
	Depreciation			-		1,080
	General and administrative			34,257,974		139,219
		Total Operating Expenses		34,257,974		140,299
LOSS FROM OPERATIONS				(34,257,974)		(140,299)
OTHER EXPENSES
	Interest expense			-		-
		Total Other Expenses		-		-
INCOME (LOSS) BEFORE INCOME TAXES				(34,257,974)		(140,299)
PROVISION FOR INCOME TAXES				-		-
NET INCOME (LOSS)			$	(34,257,974)	$	(140,299)
BASIC AND DILUTED INCOME (LOSS)
PER SHARE			$	(1.95)	$	(0.01)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING				17,577,512		15,518,009

The accompanying notes are an integral part of these unaudited financial statements.

4

FONU2, INC.
(Formerly Cygnus Internet, Inc.)
Statements of Cash Flows
(Unaudited)
(Restated)
			For the Three Months Ended
			March 31,
			2012		2011
OPERATING ACTIVITIES
	Net loss		$	(34,257,974)	$	(140,299)
	Adjustments to reconcile loss to cash flows from operating activities:
	Stock-based compensation			34,159,083		125,000
	Depreciation expense			-		1,080
	Changes in operating assets and liabilities
	Prepaid expenses			(20,000)		-
	Other assets			2,285		(2,285)
	Accounts payable			(11,520)		(10)
	Net Cash Used in Operating Activities			(128,126)		(16,514)
INVESTING ACTIVITIES
	Cash received from Zaldiva.com			8,249		-
		Net Cash Used  in Investing Activities		8,249		-
FINANCING ACTIVITIES
	Proceeds from convertible notes payable			50,000		-
	Bank overdraft			(893)		-
	Common and preferred stock issued for cash			85,400		21,110
		Net Cash Provided by Financing Activities		134,507		21,110
NET INCREASE (DECREASE) IN CASH				14,630		4,596
CASH AT BEGINNING OF PERIOD				-		-
CASH AT END OF PERIOD			$	14,630	$	4,596
SUPPLEMENTAL CASH FLOW INFORMATION:
	CASH PAID FOR:
		Interest	$	-	$	-
		Income taxes	$	-	$	-
NON-CASH INVESTING ACTIVITY
	Shares issued to acquire Zaldiva.com			338,239		-
	Conversion of preferred stock to common stock			25,076		-
	Stock issued for prepaid expenses			400,000		-
	Cancellation of shares			100		-

The accompanying notes are an integral part of these unaudited financial statements.

5

FONU2, Inc.

(Formerly Cygnus Internet, Inc.)

Notes to the Financial Statements

(Unaudited)

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by FonU2, Inc. (“we”, “our”, the “Company”) without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2012 and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2011  audited financial statements as included in the Form 8-K/A as filed with the Securities and Exchange Commission on November 27, 2012.  The results of operations for the periods ended March 31, 2012 is not necessarily indicative of the operating results for the full year.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  During the three months ended March 31, 2012 the Company realized a net loss of $34,257,974 and has incurred an accumulated deficit of $36,705,831.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Reverse-Merger Transaction

On December 2, 2011, the stockholders of Zaldiva, Inc., a Florida corporation (“Zaldiva”) approved Zaldiva’s change of domicile from the state of Florida to the state of Nevada.  The change of domicile was effectuated by merging Zaldiva into its newly-formed wholly-owned subsidiary, FONU2 Inc., a Nevada corporation formerly known as Zaldiva, Inc. (“FONU2”), with every share of Zaldiva’s common and preferred stock automatically being converted into one-half of one corresponding share of FONU2, and with all fractional shares that would otherwise result from such conversion being rounded up to the nearest whole share.  Zaldiva and FONU2 filed Articles of Merger in the States of Florida and Nevada on December 2, 2011.  The change of domicile and de facto reverse-split were effectuated on January 9, 2012. 

6

FONU2, Inc.

(Formerly Cygnus Internet, Inc.)

Notes to the Financial Statements

(Unaudited)

On March 6, 2012, the Company executed an Agreement and Plan of Reorganization (the “Agreement”) with Cygnus Internet Inc. (“Cygnus”), and Jeffrey M. Pollitt, who is Cygnus’ Chief Executive Officer and the holder of approximately 37% of Cygnus outstanding shares of common stock.  Under the Agreement, FONU2 acquired all of the material assets of Cygnus in exchange for 53,411,262 “unregistered” and “restricted” of FONU2’s common stock, which represented approximately 85% of FONU2’s issued and outstanding common stock upon issuance, with such shares to be issued pro rata to the Cygnus common stockholders.  The transaction closed on March 29, 2012.

The Agreement was accounted for as a reverse-merger recapitalization transaction, with Cygnus as the accounting acquirer, and FONU2 as the legal acquirer.  The historical financial statements presented herein for the period prior to the merger date are those of Cygnus.  Concurrent with the transaction, Cygnus changed its fiscal year end to September 30.  The Company has elected to file financial statements for the nine months ended September 30, 2012 to satisfy the requirement for filing financial statements for a period of one year as allowed by SEC Rule S-X 3-06.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 4 – CONVERTIBLE NOTES PAYABLE

During 2011, the Company entered into two debt agreements for a total of $75,000. The proceeds from the notes were to be held in escrow until the completion of a merger with a public entity. The notes carry interest at 10% and are convertible into shares of the potential merged entity at a discount of 30% to the market price of the potential merged entity’s common stock, however the conversion price can be no lower than $0.10 or higher than $0.50. If the

merger did not occur, the Company must repay the note plus 10% interest. As of December 31, 2011, $25,000 of the funds were released from escrow for working capital purposes but are not considered convertible until closing of the merger. During the three months ended March 31, 2012, the remaining $50,000 of the funds were released from escrow. As of March 31, 2012, the Company has $75,000 in convertible notes outstanding. The Company analyzed the conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the instruments should be classified as liabilities as of the merger date of March 29, 2012, due to there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The value of the derivative liabilities on the merger date were insignificant, and none were recorded as of March 31, 2012.

NOTE 5 – COMMON STOCK

During the three months ended March 31, 2012 the Company converted 868,239 shares of Series A preferred stock and an additional 1,639,368 shares of Series B preferred stock into 2,507,607 shares of common stock.  The preferred shares were converted into common shares on a one preferred share for one common share basis, pursuant to the conversion terms of the preferred stock.

7

FONU2, Inc.

(Formerly Cygnus Internet, Inc.)

Notes to the Financial Statements

(Unaudited)

During the period ended March 31, 2012 the Company issued the following:

·

89,125 shares of common stock for cash proceeds of $85,400.

·

6,120,341 shares of common stock for services rendered.  The shares issued for services were valued at the value of the most recent cash issuances, resulting in an aggregate value of $5,306,889.

·

29,441,014 shares of common stock to various parties pursuant to certain non-dilution clauses in various service agreements.  These shares were valued at an aggregate of $28,852,194, or $0.98 per share.

·

2,000,000shares of common stock as a prepayment on certain professional services.  These shares were valued at an aggregate of $400,000.

The Company cancelled 100,000 shares issued for services due to non-performance.

On March 6, 2012, the Company executed an Agreement and Plan of Reorganization (the “Agreement”) with FONU2, and Jeffrey M. Pollitt, who is the Company’s Chief Executive Officer and the holder of approximately 37% of the Company’s outstanding shares of common stock.  Under the Agreement, FONU2 acquired all of the material assets of the Company in exchange for 53,411,262 “unregistered” and “restricted” shares of FONU2’s common stock, which represented approximately 85% of FONU2’s issued and outstanding common stock upon issuance, with such shares to be issued pro rata to the Company’s common stockholders.  The transaction closed on March 29, 2012.

Prior to the merger, there were 500,000 shares of Preferred Stock Series A and 9,374,920 shares of common stock outstanding.  The fair value of FONU2’s net assets acquired on March 29, 2012 consisted of the following:

	AMOUNT
Cash	$          8,249
Inventory	18,044
Land and Building	320,700
Property, plant and equipment	12,855
Deposit	2,285
Accounts Payable	(15,645)
Total	$      346,488

NOTE 6 – COMMON STOCK WARRANTS AND OPTIONS

Prior to the merger transaction described in Note 1, Zaldiva had 500,000 warrants and 905,000 options outstanding.  These options and warrants were exchanged in the transaction at a 1:1 ratio and are now exercisable into shares of FONU2, Inc.  The following tables summarize these options and warrants from the date of merger through March 31, 2012. 

	WARRANTS
		Number of Warrants	Weighted Average Exercise Price		Value if Exercised	Weighted Average Remaining Contractual Term
Outstanding at March 29, 2012		1,661,000	$	0.58	968,345	1.45
Expired		-		-	-	-
Outstanding at March 31, 2012		1,661,000	$	0.01	968,345	1.45
Exercisable at March 31, 2012		1,661,000	$	0.01	968,345	1.45

8

FONU2, Inc.

(Formerly Cygnus Internet, Inc.)

Notes to the Financial Statements

(Unaudited)

NOTE 6 – COMMON STOCK WARRANTS AND OPTIONS (Continued)

	OPTIONS
	Date	Number of Options	Weighted Average Exercise Price		Value if Exercised	Weighted Average Remaining Contractual Term
Outstanding at March 29, 2012		905,000	$	0.50	452,500	5.56
Granted		-		-	-	-
Exercised		-		-	-	-
Cancelled		-		-	-	-
Outstanding at March 31 , 2012		905,000	$	0.50	452,500	5.56
Exercisable at March 31, 2012		905,000	$	0.50	452,500	5.56

NOTE 7 – SIGNIFICANT EVENTS

On December 2, 2011, the Company’s stockholders approved the Company’s change of domicile from the state of Florida to the state of Nevada.  The change of domicile was effectuated by merging the company into the Company’s wholly-owned subsidiary, Zaldiva, Inc., a Nevada corporation (“Zaldiva Nevada”), with every share of the Company’s common and preferred stock automatically being converted into one-half of one corresponding share of Zaldiva Nevada, and with all fractional shares that would otherwise result from such conversion being rounded up to the nearest whole share.  The Company filed Articles of Merger in the States of Florida and Nevada on December 2, 2011. The Company’s financial statements have been retroactively restated to reflect the reverse stock-split.

NOTE 8 – RESTATED FINANCIAL STATEMENTS

The Company originally reported the acquisition of Cygnus as a purchase and presented Zaldiva Nevada’s historical financial statements as those of the Company. The Company has now determined that since the issuance of shares of the Company’s common stock resulted in the shareholders of Cygnus becoming the controlling shareholders of the Company the correct accounting is a recapitalization of Cygnus. Accordingly, the accompanying financial statements have been restated to show the historical financial statements of Cygnus as those of the Company and to show Cygnus as the accounting acquirer of Zaldiva Nevada.

NOTE 9 – SUBSEQUENT EVENTS

Subsequent to March 31, 2012, the Company issued 1,750,000 shares of its common stock for services, 250,000 shares of its common stock for prepaid services valued at $27,500, 50,000 shares for interest valued at $13,500, and 40,000 shares for cash of $10,000.

On October 22, 2012, the Company entered into a Redemption Agreement with HMBL Trust, William Lavenia, and SLP-DZ-NTZ, LLC (collectively, the “Stockholders”), by which the Company agreed to purchase a total of 8,102,736 shares of its common stock from the Stockholders for total aggregate consideration of one dollar.  The Company further agreed to release the Stockholders from any and all liability relating to any claims that it may have as of the date of the Redemption Agreement. The transaction was recorded at par and $8,102 was recorded as a decrease to common stock and increase to additional paid in capital.

Subsequent to March 31, 2012, the Company borrowed an aggregate amount of $29,000 from its CEO, Jeff Pollitt. The note is unsecured, bears no interest and is due on demand.

In accordance with ASC 855, the Company’s management has reviewed all material events through the date of this report and there are no additional material subsequent events to report.

9

Item 2.  Management’s Discussions and Analysis of Financial Condition and Results of Operations.

Forward-looking Statements

Statements made in this Quarterly Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words “may,” “would,” “could,” “should,” “expects,” “projects,” “anticipates,” “believes,” “estimates,” “plans,” “intends,” “targets” or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements.  Forward-looking statements speak only as of the date they are made.  We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Results of Operation

For The Three Months Ended March 31, 2012 Compared to The Three Months Ended March 31, 2011.

We did not recognize and revenue in the quarterly periods ended March 31, 2012, and March 31, 2011.  Cost of goods sold and gross profits were also $0 and $0, respectively, in both periods.

Our operating expenses increased to $34,257,974 during the quarterly period ended March 31, 2012, from $140,299 in the year-ago period.  The increase is due to $34,159,083 of expense recorded for the value of shares issued as compensation during the period.

For the three months ended March 31, 2012, our net loss was $34,257,974, or $1.95 per share, as compared to a net loss of $140,299, or $0.01 per share, during the March 31, 2011 period.  Our increasing net loss was largely attributable to the above-referenced $34,159,083 of expense recorded for the value of shares issued as compensation during the period.

Liquidity

The Company had cash on hand of $14,630 at March 31, 2012.  We believe that this cash on hand will not be sufficient to meet our expenses through the end of our 2012 fiscal year.  We will have to seek additional financing through either a private placement of our stock or through debt financing.  While management expects to be able to raise the required funds, there is no guarantee that we can obtain adequate financing.  Our ability to achieve a level of profitable operations and/or additional financing may affect our ability to continue as a going concern.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not required.

Item 4.  Controls and Procedures.

Evaluation of disclosure controls and procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the

10

effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q.  In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.  In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.  The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of March 31, 2012, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules, regulations and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. This material deficiency is due to a lack of adequate internal controls and the absence of an audit committee.

Changes in internal control over financial reporting

There were no significant changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

None; not applicable.

Item 1A.  Risk Factors.

Not required.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

On January 12, 2012, the Company issued a total of 62,500 “unregistered” and “restricted” shares of its common stock to Branden T. Burningham, Esq., and Leonard W. Burningham, Esq. for services.  The shares were valued at $0.08 per share for a total of $5,000.

On February 8, 2012, the Company issued a total of 125,000 “unregistered” and “restricted” shares of its common stock to Messrs. Burningham and Burningham in consideration of services valued at $0.08 for a total of $10,000.

On March 6, 2012 the Company issued 90,000 shares of common stock to an unrelated third party vendor in order to satisfy an outstanding debt.  The shares were valued at the market price on the date of issuance of $0.20 per share, for a total of $18,000.  As the aggregate market value of the shares issued exceeded the amount of the satisfied debt, the Company recorded a loss on settlement of debt in the amount of $10,800 relative to this transaction.

On March 29, 2012, pursuant to the closing of its Agreement and Plan of Reorganization (the “Agreement”) with Cygnus Internet, Inc. the Company became obligated to issue a total of 53,411,262 “unregistered” and “restricted” shares of its common stock to the stockholders of Cygnus Internet.  The Company intends to issue such shares in the third quarter of its current fiscal year, once it has determined that the issuance of such shares will be in compliance with Rule 506 of the Securities and Exchange Commission, including the determination that there will be no more than 35 non-accredited recipients of such shares.  Also on March 29, 2012, the Company consummated several employment and consulting agreements, for which common stock was issued as partial consideration.  Each of the agreements has a one-year term.  A total of 2,600,000 shares were issued pursuant to these agreements.  The shares were valued at the market price of $0.20 per share.  $120,000 was expensed immediately for the employment agreements as the shares were fully vested.  The Company has recorded prepaid expenses in the amount of $400,000 pursuant to the consummation of the independent contractor agreements and will be expensed over the term of the

11

agreement.  The execution of these agreements was disclosed in the Company’s Current Report on Form 8-K dated March 29, 2012, which was filed with the Securities and Exchange Commission on the same date, and which is incorporated herein by reference.

Item 3.  Defaults Upon Senior Securities.

None; not applicable.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.  Other Information.

During the quarterly period ended March 31, 2012, there were no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors.

Item 6.  Exhibits.

                   (i)                                                                              Where incorporated in this Report

Current Report on Form 8-K dated March 29, 2012                             Part II, Item 2

Exhibit No.                          Identification of Exhibit

31.1 31.2 32	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Jeffrey M. Pollitt, President and Director. Certification Pursuant to Section 302 of the Sarbanes-Oxley Act provided by Robert B. Lees, Chief Financial Officer and Director. Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 provided by Jeffrey M. Pollitt, President and Robert B. Lees, Chief Financial Officer.
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101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.SCH	XBRL Taxonomy Extension Schema*

*Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements 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

FONU2, INC.

Date:	February  21, 2013	By:	/s/Jeffrey M. Pollitt
			Jeffrey Pollitt, President, CEO and Director

Date:	February 21, 2013	By:	/s/Robert B. Lee
			Robert B. Lees, CFO, and Director

Date:	February 21, 2013	By:	/s/ Nicole Leigh
			Nicole Leigh,  Director

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