<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   -----------

                                    FORM 10-K
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                       For fiscal year ended June 30, 2004
                        Commission file number: 000-18839

                     UNITED AMERICAN HEALTHCARE CORPORATION
               (Exact name of registrant as specified in charter)

           MICHIGAN                                      38-2526913
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                           300 RIVER PLACE, SUITE 4950
                             DETROIT, MICHIGAN 48207
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (313) 393-4571

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

           Securities registered pursuant to Section 12(g) of the Act:

                           COMMON STOCK, NO PAR VALUE
                                (Title of Class)

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 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. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12-b-2 of the Act). Yes [ ] No [X]

THE AGGREGATE MARKET VALUE OF THE VOTING STOCK OF THE REGISTRANT HELD BY
NON-AFFILIATES AS OF AUGUST 23, 2004, COMPUTED BY REFERENCE TO THE NASDAQ
SMALLCAP MARKET CLOSING PRICE ON SUCH DATE, WAS $31,235,543.

THE NUMBER OF OUTSTANDING SHARES OF REGISTRANT'S COMMON STOCK AS OF AUGUST 23,
2004 WAS 7,419,369.

Portions of the registrant's Proxy Statement for its 2004 Annual Meeting of
Shareholders have been incorporated by reference in Part III of this Annual
Report of Form 10-K.

================================================================================
    As filed with the Securities and Exchange Commission on August 26, 2004*

<PAGE>

                     UNITED AMERICAN HEALTHCARE CORPORATION

                                    FORM 10-K

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            Page
<S>                                                                                                         <C>
PART I
      Item 1.  Business....................................................................................   2
      Item 2.  Properties..................................................................................  11
      Item 3.  Legal Proceedings...........................................................................  11
      Item 4.  Submission of Matters to a Vote of Security Holders.........................................  13

PART II
      Item 5.  Market for the Registrant's Common Stock and Related Stockholder
               Matters  ...................................................................................  13
      Item 6.  Selected Financial Data.....................................................................  14
      Item 7.  Management's Discussion and Analysis of Financial Condition and
               Results of Operations.......................................................................  14
      Item 8.  Financial Statements........................................................................  24
      Item 9.  Changes In and Disagreements with Accountants on Accounting and
               Financial Disclosure........................................................................  24
      Item 9A. Controls and Procedures.....................................................................  25

PART III
      Item 10. Directors and Executive Officers of the Registrant..........................................  25
      Item 11. Executive Compensation......................................................................  25
      Item 12. Security Ownership of Certain Beneficial Owners and Management..............................  25
      Item 13. Certain Relationships and Related Transactions..............................................  26
      Item 14. Principal Accounting Fees and Services......................................................  26

PART IV
      Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.............................  26

Financial Statements....................................................................................... F-1
</TABLE>

<PAGE>

                                     PART I

ITEM 1. BUSINESS

GENERAL

United American Healthcare Corporation (the "Company") was incorporated in
Michigan on December 1, 1983 and commenced operations in May 1985. Unless the
context otherwise requires, all references to the Company indicated herein shall
mean United American Healthcare Corporation and its consolidated subsidiaries.

The Company provides comprehensive management and consulting services to a
managed care organization in Tennessee, and previously to other health
maintenance organizations in other states, principally (until November 1, 2002)
Michigan. The Company also arranges for the financing of health care services
and delivery of these services by primary care physicians and specialists,
hospitals, pharmacies and other ancillary providers to commercial employer
groups and government-sponsored populations in Tennessee and previously (until
November 1, 2002) Michigan.

Management and consulting services provided by the Company are and have been
generally to health maintenance organizations with a targeted mix of Medicaid
and non-Medicaid/commercial enrollment. As of August 1, 2004, there were 129,484
enrollees in OmniCare Health Plan, Inc., in Tennessee ("OmniCare-TN"), owned by
the Company's wholly owned subsidiary.

Pursuant to notice received from OmniCare Health Plan in Michigan
("OmniCare-MI"), the Company's management agreement with OmniCare-MI terminated
November 1, 2002. On that date, the Company ceased providing services to
OmniCare-MI, and OmniCare-TN became the Company's only managed plan.

Management and consulting services provided by the Company include feasibility
studies for licensure, strategic planning, corporate governance, management
information systems, human resources, marketing, pre-certification, utilization
review programs, individual case management, budgeting, provider network
services, accreditation preparation, enrollment processing, claims processing,
member services and cost containment programs.

In 1985, the Company became one of the pioneers in arranging for the financing
and delivery of health care services to Medicaid recipients utilizing managed
care programs. Management believes the Company has gained substantial expertise
in understanding and serving the particular needs of the Medicaid population.

INDUSTRY

In an effort to control costs while assuring the delivery of quality health care
services, the public and private sectors have increasingly turned to managed
care solutions. As a result, the managed

                                        1
<PAGE>

care industry, which includes health maintenance organization ("HMO"), preferred
provider organization ("PPO") and prepaid health service plans, has grown
substantially.

While the trend toward managed care solutions has traditionally been pursued
most aggressively by the private sector, the public sector has embraced the
trend in an effort to control the costs of health care provided to Medicaid
recipients. Consequently, many states are promoting managed care initiatives to
contain these rising costs and supporting programs that encourage or mandate
Medicaid beneficiaries to enroll in managed care plans.

MANAGED CARE PRODUCTS AND SERVICES

The Company owns and manages the operations of an HMO in Tennessee, OmniCare-TN.
The Company also managed the operations of an HMO in which it had no ownership
interest, OmniCare-MI, pursuant to a management agreement, which terminated
November 1, 2002.

The Company previously participated in the "County Care" plan in Michigan under
a contract with Urban Hospital Care Plus, which expired on September 30, 2001 at
the Company's election. The Company also has had an ownership interest in three
other HMOs which are no longer part of its business: UltraMedix Healthcare
Systems, Inc., in Florida ("UltraMedix"), OmniCare Health Plan of Louisiana,
Inc., in Louisiana ("OmniCare-LA"), and PhilCare Health Systems, Inc., in
Pennsylvania ("PhilCare"), each briefly described below in this Form 10-K annual
report.

The following table shows the approximate number of OmniCare-TN members serviced
by the Company as of August 1, 2004:

<TABLE>
<CAPTION>
Medicaid         Non - Medicaid     Total
--------         --------------     -----
<S>              <C>                <C>
112,894             16,590          129,484
</TABLE>

                                       2
<PAGE>

The following table shows the Company's principal revenue sources in dollar
amounts and as a percentage of the Company's total revenues for the periods
indicated. Such data are not indicative of the relative contributions to the
Company's net earnings.

<TABLE>
<CAPTION>
                                          YEAR ENDED JUNE 30,
               -------------------------------------------------------------------------
                         2004                     2003                     2002
               -------------------------------------------------------------------------
                                    (in thousands, except percentages)
<S>            <C>               <C>      <C>              <C>   <C>                <C>
Revenues
OmniCare-TN    $     21,921      99.3%    $    24,314      87%   $     160,608      90%
OmniCare-MI*              -         -           3,395      12%          14,941       8%
County Care**             -         -               -       -            2,486       1%
</TABLE>

---------
* The Company's gross revenues derived from OmniCare-MI are based on management
fees earned under a management agreement with OmniCare-MI, which terminated
November 1, 2002, and is reflected as a discontinued operation in the
consolidated financial statements.

** County Care was no longer a managed plan of the Company after September 30,
2001.

MANAGED PLANS

The Company has entered into a long-term management agreement, through a wholly
owned subsidiary of the Company, with OmniCare-TN. In addition, the Company had
a long-term management agreement with OmniCare-MI, which terminated November 1,
2002. Pursuant to these management agreements, the Company provides to
OmniCare-TN and provided to OmniCare-MI management and consulting services
associated with the financing and delivery of health care services. Table A
summarizes the terms of these agreements.

Services provided to OmniCare-TN and previously OmniCare-MI (the "Managed
Plans") include strategic planning; corporate governance; human resource
functions; provider network services; provider profiling and credentialing;
premium rate setting and review; marketing services (group and individual);
accounting and budgeting functions; deposit, disbursement and investment of
funds; enrollment functions; collection of accounts; claims processing;
management information systems; utilization review; and quality management.

                                       3
<PAGE>

         Table A- Summary of Terms of Agreements with the Managed Plans

<TABLE>
<CAPTION>
              Terms                                          OmniCare-TN                 OmniCare-MI(1)
              -----                                          -----------                 --------------
<S>                                                        <C>                           <C>
(1) Duration:
   (a) Effective dates:
        (i) Commencement                                    July 1, 1996                   May 1, 1985
        (ii) Expiration                                    June 30, 2005                   Nov. 1, 2002

   (b) Term extension:
        (i) Automatically renewable                        Yes - 4 successive                 N/A
                                                            5-year periods
        (ii) Terms of renewal/ continuation                    5 years                        N/A
        (iii) Next review period                           January 1, 2005                    N/A

   (c) Termination:

         (i) Without cause by the Plan at
             such review dates                                  Yes                           N/A
         (ii) Either party with cause                           Yes                           N/A

(2) Fees paid to the Company:

   (a) Percentage of revenues                                   Yes                           Yes(2)
   (b) Fixed premium rates                                      No                            No

(3) Expenses incurred by the Company:
      All administrative expenses necessary to
      carry out and perform the functions
      of the Plan, excluding:

         (i) Audit                                              Yes                           No
        (ii) Legal                                              Yes                           No
        (iii) Marketing                                         No                            No
</TABLE>

(1) The Company's management agreement with OmniCare-MI was amended after the
Rehabilitator of OmniCare-MI was appointed by court order on July 31, 2001, and
terminated November 1, 2002, pursuant to notice the Company received from
OmniCare-MI.

(2) Fees paid to the Company were changed, however, to a cost-based fee, by
amendment dated December 14, 2001 and effective August 1, 2001.

                                       4
<PAGE>

MANAGED PLAN OWNED BY THE COMPANY

OMNICARE-TN. OmniCare-TN was organized as a Tennessee corporation in October
1993, and is headquartered in Memphis, Tennessee. The Company was active in the
development of OmniCare-TN, and through the Company's wholly owned subsidiary,
United American of Tennessee, Inc., wholly owns OmniCare-TN. OmniCare-TN began
as a PPO contractor with the Bureau of TennCare, a State of Tennessee program
that provides medical benefits to Medicaid and working uninsured and uninsurable
recipients, and operated as a full-risk prepaid health services plan until it
obtained its TennCare HMO license in March 1996. OmniCare-TN's TennCare HMO
contract was executed in October 1996, retroactive to the date of licensure.

In November 1993, OmniCare-TN contracted with the State of Tennessee, doing
business as TennCare ("TennCare"), as a Medicaid PPO to arrange for the
financing and delivery of health care services on a capitated basis to eligible
Medicaid beneficiaries and the Working Uninsured and Uninsurable
("Non-Medicaid") individuals who lack access to private or employer sponsored
health insurance or to another government health plan. TennCare placed an
indefinite moratorium on Working Uninsured enrollment in December 1994; however,
such action did not affect persons enrolled in a plan prior to the moratorium.
In April 1997, enrollment was expanded to include the children of the Working
Uninsured up to age 18.

The contract between OmniCare-TN and TennCare was renewed July 1, 2000 for a
42-month term, expiring December 31, 2003. The new contract provided for
increased capitation rates, but eliminated the practice of providing retroactive
payments to managed care organizations for high cost chronic conditions of their
members ("adverse selection") and payments earmarked as adjustments for covered
benefits.

OmniCare-TN was assigned approximately 6,000 members by TennCare in the second
half of fiscal 2000 as a result of three other managed care organizations, which
had contracts with TennCare, ceasing to serve their enrollees or being unable to
take on new enrollees. Medical services expenses for such new OmniCare-TN
members disproportionately exceeded OmniCare-TN's normal per member per month
("PMPM") experience and adversely affected its earnings for and since that
period. OmniCare-TN received from TennCare in fiscal 2001 an adverse selection
payment of $0.8 million for such fiscal 2000 expenses.

In June 2001, TennCare developed new risk-sharing options for its participating
managed care organizations (MCOs), including OmniCare-TN. OmniCare-TN entered
into its changed contract with TennCare effective July 1, 2001.

At June 30, 2001, OmniCare-TN was licensed in and served Shelby and Davidson
Counties in Tennessee (which include the cities of Memphis and Nashville,
respectively). Effective July 1, 2001, OmniCare-TN received approval from
TennCare to expand its service area to western Tennessee and to withdraw from
Davidson County. Additionally, a significant competitor of OmniCare-TN ceased
doing business in October 2001, and TennCare assigned approximately 40,000 of
that plan's members to OmniCare-TN on February 15, 2002.

                                       5
<PAGE>

Beginning July 1, 2002, TennCare implemented an 18-month stabilization program
which entailed changes to TennCare's contracts with MCOs, including OmniCare-TN.
During that period, MCOs were generally compensated for administrative services
only (commonly called "ASO"), earned fixed administrative fees, were not at risk
for medical costs in excess of targets established based on various factors,
were subject to increased oversight, and could incur financial penalties for not
achieving certain performance requirements. Through an amendment completed on
December 19, 2003, TennCare extended the ASO reimbursement system applicable to
OmniCare-TN through June 30, 2004. A subsequent amendment completed on June 25,
2004 further extended the ASO reimbursement system applicable to OmniCare-TN
through December 31, 2004. There has been no specific indication yet of what
TennCare reimbursement system will apply after that date to OmniCare-TN.

OmniCare-TN sought reimbursement from TennCare for exceptionally high medical
expenses incurred by new OmniCare-TN enrollees in fiscal year 2002, including
for actuarially estimated claims incurred but not yet reported to OmniCare-TN.
In response, TennCare amended its contract with OmniCare-TN in September 2002,
retroactive to July 1, 2001 in some respects and to May 1, 2002 in other
respects. The amendment stated that OmniCare-TN's outside actuary certified the
plan required $7.5 million to meet its statutory net worth requirement for the
year ended June 30, 2002 and that OmniCare-TN "is a viable HMO under contract
with TennCare on the same basis as other comparable HMOs in the program
effective July 1, 2002."

Pursuant to such contractual amendment: OmniCare-TN retroactively elected an
available risk option for the ten months from July 1, 2001 through April 30,
2002; TennCare retroactively agreed to reimburse OmniCare-TN on a no-risk ASO
basis for medical services effective beginning May 1, 2002, and TennCare agreed
to pay OmniCare-TN up to $7.5 million as necessary to meet its statutory net
worth requirement as of June 30, 2002. Pursuant to an agreement between TennCare
and OmniCare-TN in October 2002, TennCare further agreed to pay additional funds
to OmniCare-TN if future certified actuarial data confirmed they were needed by
OmniCare-TN to meet that requirement.

Under generally accepted accounting principles, the $7.5 million receivable was
not recorded in fiscal 2002 financial statements but was recorded in fiscal 2003
financial statements. Based on an actuarial determination, an additional $0.4
million of fiscal 2002 medical claims liability was recorded during fiscal 2003.
In all, fiscal 2002 medical claims of $7.9 million were processed in the fiscal
year ended June 30, 2003, and the same aggregate amount was recognized as
revenue by OmniCare TN.

OmniCare-TN's application for a commercial HMO license was approved on September
7, 2001. Management is not yet actively pursuing that commercial business,
however, due to OmniCare-TN's substantially increased enrollment from members
TennCare assigned to it from defunct other plans.

As of August 1, 2004, OmniCare-TN's total enrollment was 129,050 members, of
whom 87% were Medicaid enrollees and 13% were Non-Medicaid enrollees.

                                       6
<PAGE>

MANAGED PLAN OPERATED BY THE COMPANY

OMNICARE-MI. As further described below, OmniCare-MI ceased to be a Managed Plan
operated by the Company effective November 1, 2002.

While managed by the Company, OmniCare-MI was a not-for-profit, tax-exempt
corporation headquartered in Detroit, Michigan and serving southeastern
Michigan, operating in Wayne, Oakland, Macomb, Monroe and Washtenaw counties.
Its history included a number of innovations that were adopted and proved
successful for the industry. While managed by the Company, it was the first
network model HMO in the country and the first to capitate physician services in
an IPA-model HMO (an Independent Practice Association model HMO does not employ
physicians as staff, but instead contracts with associations or groups of
independent physicians to provide services to HMO members). OmniCare-MI also
created and implemented the first known mental health capitation carve out in
1983.

While managed by the Company, OmniCare-MI's enrollment was through companies
that offered the health plan coverage to employees and their family members,
through individual enrollment and through the State of Michigan's Medicaid
program pursuant to an agreement with the Michigan Department of Community
Health, which made HMO coverage available to eligible Medicaid beneficiaries in
certain counties and mandatory in others.

On April 13, 2000, the Company funded an unsecured loan to OmniCare-MI evidenced
by a surplus note of $7.7 million to enable OmniCare-MI to meet its minimum
statutory requirement for net worth and working capital. The loan consisted of
$4.0 million in cash and conversion of $3.7 million of management fees owed to
the Company. Pursuant to the terms of the surplus note, interest and principal
payments required approval by the Michigan Office of Financial and Insurance
Services and were repayable only from any statutory surplus earnings of
OmniCare-MI. Note interest was payable annually and forfeited if not then paid.
Interest income of $0.9 million and $1.1 million on that and a similar earlier
surplus note was forfeited for fiscal years 2002 and 2001, respectively. The
note principal had no stated maturity or repayment date. The surplus notes were
subordinated to all other claimants of OmniCare-MI. Based on an analysis of
OmniCare-MI's projected cash flows, the Company recorded impairment losses on
the valuation of the surplus notes which resulted in bad debt expense of $6.9
million for the year ended June 30, 2001. On July 29, 2002, claims of all
creditors holding surplus notes from OmniCare-MI were permanently disallowed by
the State circuit court order, which approved OmniCare-MI's amended
rehabilitation plan.

As a Michigan HMO, OmniCare-MI has been subject to oversight by the State of
Michigan's Commissioner of the Office of Financial and Insurance Services (the
"Commissioner"). On July 31, 2001, pursuant to a motion by the Commissioner, a
State circuit court judge entered an order of rehabilitation of OmniCare-MI (the
"Order") and appointed the Commissioner as Rehabilitator of OmniCare-MI. The
Order directed the Rehabilitator to administer all of OmniCare-MI's assets and
business while attempting to effectuate its rehabilitation, preserve its
provider network and maintain uninterrupted health care services to the greatest
extent possible.

                                       7
<PAGE>

The Order required the Company to continue performing all services under its
OmniCare-MI management agreement, which the Company did until that agreement's
termination on November 1, 2002, pursuant to OmniCare-MI's court-approved
rehabilitation plan.

The OmniCare-MI management agreement was amended December 14, 2001, effective
August 1, 2001. The amendment reduced the Company's management fee revenues from
OmniCare-MI beginning August 1, 2001, by changing the methodology for
determining the Company's management fee from a fixed percentage (14%) of
premiums earned by OmniCare-MI to a cost-based fee, which was equivalent to
approximately 10% of premiums earned beginning in August 2001, subject to
adjustment to appropriately reflect the Company's actual costs of performing the
management agreement. The amendment continued unchanged the other basic terms of
the Company's management agreement with OmniCare-MI as summarized in Table A
under "Managed Plans" above.

GOVERNMENT REGULATION

The Company is and/or has been subject to extensive federal and state health
care and insurance regulations designed primarily to protect enrollees in the
Managed Plans, particularly with respect to government sponsored enrollees. Such
regulations govern many aspects of the Company's business affairs and typically
empower state agencies to review management agreements with health care plans
for, among other things, reasonableness of charges. Among the other areas
regulated by federal and state law are licensure requirements, premium rate
increases, new product offerings, procedures for quality assurance, enrollment
requirements, covered benefits, service area expansion, provider relationships
and the financial condition of the managed plans, including cash reserve
requirements and dividend restrictions. There can be no assurances that the
Company or OmniCare-TN will be granted the necessary approvals for new products
or will maintain federal qualifications or state licensure.

The licensing and operation of OmniCare-TN are governed by the Tennessee
statutes and regulations applicable to health maintenance organizations. The
licenses are subject to denial, limitation, suspension or revocation if there is
a determination that the plan is operating out of compliance with the state's
HMO statute, failing to provide quality health services, establishing rates that
are unfair or unreasonable, failing to fulfill obligations under outstanding
agreements or operating on an unsound fiscal basis. OmniCare-TN is not a
federally-qualified HMO and, therefore, is not subject to the federal HMO Act.

Federal and state regulation of health care plans and managed care products is
subject to frequent change, varies from jurisdiction to jurisdiction and
generally gives responsible administrative agencies broad discretion. Laws and
regulations relating to the Company's business are subject to amendment and/or
interpretation in each jurisdiction. In particular, legislation mandating
managed care for Medicaid recipients is often subject to change and may not
initially be accompanied by administrative rules and guidelines. Changes in
federal or state governmental regulation could affect the Company's operations,
profitability and business prospects. While the Company is unable to predict
what additional government regulations, if any, affecting its business may be
enacted in the future or how existing or future regulations may be interpreted,
regulatory revisions may have a material adverse effect on the Company.

                                       8
<PAGE>

INSURANCE

The Company presently carries comprehensive general liability, directors and
officers liability, property, business automobile, and workers' compensation
insurance. Management believes that coverage levels under these policies are
adequate in view of the risks associated with the Company's business. In
addition, OmniCare-TN has (and OmniCare-MI while managed by the Company had)
professional liability insurance that covers liability claims arising from
medical malpractice. OmniCare-TN is required to pay the professional liability
insurance premiums under the terms of the Company's management agreement. There
can be no assurance as to the future availability or cost of such insurance, or
that the Company's business risks will be maintained within the limits of such
insurance coverage.

COMPETITION

The managed care industry is highly competitive. The Company directly competes
with other entities that provide health care plan management services, some of
which are nonprofit corporations and others, which have significantly greater
financial and administrative resources. The Company primarily competes on the
basis of fee arrangements, cost effectiveness and the range and quality of
services offered to prospective health care clients. While the Company believes
that its experience gives it certain competitive advantages over existing and
potential new competitors, there can be no assurance that the Company will be
able to compete effectively in the future.

The Company competes with other HMOs, PPOs and insurance companies. The level of
this competition may affect, among other things, the operating revenues of
OmniCare-TN and, therefore, the revenues of the Company. OmniCare-TN's primary
market competitors in western Tennessee are TLC, Better Health Plans and
TennCare Select. OmniCare-TN primarily competes on the basis of enrollment,
provider networks and other related plan features and criteria. Management
believes that OmniCare-TN is able to compete effectively with its primary market
competitors.

EMPLOYEES

The Company's ability to maintain its competitive position and expand its
business into new markets depends, in significant part, upon the maintenance of
its relationships with various existing senior officers, as well as its ability
to attract and retain qualified health care management professionals. The
Company neither has nor intends to pursue any long-term employment agreement
with any of its key personnel. Accordingly, there is no assurance that the
Company will be able to maintain such relationships or attract such
professionals.

The total number of employees at August 1, 2004 was 119 compared to 112 at
September 1, 2003. The Company's employees do not belong to a collective
bargaining unit and management considers its relations with employees to be
good.

                                       9
<PAGE>

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements to encourage management to provide prospective
information about their companies without fear of litigation so long as those
statements are identified as forward-looking and are accompanied by meaningful
cautionary statements identifying important factors that could cause actual
results to differ materially from those projected in the statements. Certain
statements contained in this Form 10-K annual report, including, without
limitation, statements containing the words "believes," "anticipates," "will,"
"could," "may," "might" and words of similar import, constitute "forward-looking
statements" within the meaning of this "safe harbor."

Such forward-looking statements are based on management's current expectations
and involve known and unknown risks, uncertainties and other factors, many of
which the Company is unable to predict or control, that may cause the actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors potentially include, among others,
the following:

      1.    Inability to increase premium rates commensurate with increases in
            medical costs due to utilization, government regulation, or other
            factors.

      2.    Discontinuation of, limitations upon, or restructuring of
            government-funded programs, including but not limited to the
            TennCare program.

      3.    Increases in medical costs, including increases in utilization and
            costs of medical services and the effects of actions by competitors
            or groups of providers.

      4.    Adverse state and federal legislation and initiatives, including:
            the State of Tennessee's limitations upon or reductions in premium
            payments; prohibition or limitation of capitated arrangements or
            financial incentives to providers; federal and state benefit
            mandates (including mandatory length of stay and emergency room
            coverage); limitations on the ability to manage care and
            utilization; and any willing provider or pharmacy laws.

      5.    Failure to obtain new customer bases or members or retain or regain
            customer bases or members, or reductions in work force by existing
            customers.

      6.    Increased competition between current organizations, the entrance of
            new competitors and the introduction of new products by new and
            existing competitors.

      7.    Adverse publicity and media coverage.

      8.    Inability to carry out marketing and sales plans.

      9.    Loss or retirement of key executives.

      10.   Termination of provider contracts or renegotiations at less
            cost-effective rates or terms of payment.

      11.   Adverse regulatory determinations resulting in loss or limitations
            of licensure, certification or contracts with governmental payers.

      12.   Higher sales, administrative or general expenses occasioned by the
            need for additional advertising, marketing, administrative or
            management information systems expenditures.

                                       10
<PAGE>

      13.   Increases by regulatory authorities of minimum capital, reserve and
            other financial solvency requirements.

      14.   Denial of accreditation by quality accrediting agencies, e.g., the
            National Committee for Quality Assurance (NCQA).

      15.   Adverse results from significant litigation matters.

      16.   Inability to maintain or obtain satisfactory bank loan credit
            arrangements.

      17.   Increased costs to comply with the Health Insurance Portability and
            Accountability Act of 1996 (HIPAA).

ITEM 2. PROPERTIES

The Company currently leases approximately 34,000 aggregate square feet from
which it conducts its operations in Michigan and Tennessee. In addition, the
Company has arranged a sublease of all its former premises (approximately 54,000
square feet) in Detroit, Michigan, to OmniCare-MI, retroactive to November 1,
2002 and expiring at its lease end in May 2005. The principal offices of the
Company are located at 300 River Place, Suite 4950, Detroit, Michigan, where it
currently leases approximately 2,000 square feet of office space.

The Company believes that its current facilities provide sufficient space
suitable for all of its activities and that sufficient other space will be
available on reasonable terms, if needed.

ITEM 3. LEGAL PROCEEDINGS

On June 17, 2004, a Circuit Court judge for the 30th Judicial Circuit, in Ingham
County, Michigan, conducted a hearing and approved a report and recommendation
filed by the court-appointed Special Deputy Rehabilitator of OmniCare-MI, in
case no. 98-88265-CR, to which the Company is not a party. The Company provided
services for many years to OmniCare-MI under a management agreement that
terminated November 1, 2002. The approved report and recommendation were filed
May 14, 2004 and requested that any potential cause of action against the
Company "resulting from its actions as the management company" of OmniCare-MI be
assigned to the creditors of OmniCare-MI who filed timely objections to its
first amended Rehabilitation Plan. (The court approved that Plan on July 29,
2002.)

At the June 17th hearing, the judge acknowledged the Company's arguments
opposing the recommendation, declared he was not prejudging any claims which
creditors of OmniCare-MI might pursue against the Company, and stated he would
enter an appropriate order to implement the Special Deputy Rehabilitator's
recommendation. On August 20, 2004, the judge entered an order assigning jointly
to "those persons that are health care providers/creditors" of OmniCare-MI any
"rights and/or claims for damages of any kind" of OmniCare-MI against the
Company in connection with the management of OmniCare-MI. The order required
establishment of a creditors committee to make all decisions whether to pursue
any claim and regarding any litigation of any claim. The order approved paying
$50,000 of OmniCare-MI's assets for legal expenses to investigate the merits of
pursuing any litigation and, if litigation is pursued, up to $150,000 more of
OmniCare-MI's assets therefore, subject to required semiannual accountings to

                                       11
<PAGE>

the court. No such claim has been asserted against the Company, and it is
premature and not possible to predict what subsequent proceedings and claims, if
any, might ensue, or the magnitude or outcome of such claims, if any.

                                       12
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Shares of the Company's common stock have been traded on the Nasdaq SmallCap
Market. since January 2, 2003, under the trading symbol "UAHC". Prior thereto,
shares of the Company's Common Stock were traded since May 16, 2002 on the
NASDAQ National Market. Shares of the Company's Common Stock earlier were traded
on the OTC Bulletin Board with the symbol "UAH".

The table below sets forth for the Common Stock the range of the high and low
sales prices per share on the NASDAQ SmallCap or National Market for each
quarter in the past two fiscal years.

<TABLE>
<CAPTION>
                         2004 SALES PRICE           2003 SALES PRICE
                         ----------------           ----------------
FISCAL QUARTER           HIGH        LOW            HIGH         LOW
--------------           ----        ---            ----         ---
<S>                      <C>        <C>            <C>          <C>
First                    $3.25      $1.52          $4.80        $1.80
Second                   $4.15      $2.57          $2.14        $0.88
Third                    $5.32      $3.33          $1.18        $0.76
Fourth                   $6.44      $3.70          $2.05        $0.96
</TABLE>

As of August 23, 2004, the closing price of the Common Stock was $4.21 per share
and there were approximately 120 shareholders of record of the Company.

The Company has not paid any cash dividends on its Common Stock since its
initial public offering in the fourth quarter of fiscal 1991 and does not
anticipate paying such dividends in the foreseeable future. The Company intends
to retain earnings for use in the operation and expansion of its business.

                                       13
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

The following table shows consolidated financial data for the periods indicated:

<TABLE>
<CAPTION>
                                                  2004           2003         2002        2001          2000
                                                  ----           ----         ----        ----          ----
                                                               (in thousands, except per share data)
<S>                                             <C>          <C>          <C>          <C>          <C>
Operating Data (Year ended June 30):
Operating revenues                              $  22,084    $  24,530    $ 165,176    $ 105,330    $  90,284
Earnings (loss) from continuing
  operations                                        7,871        7,333       (9,259)       4,562        3,881
Earnings (loss) from discontinued
  operation, net of income taxes                     (700)      (2,127)      (1,704)      (3,333)      (2,897)
Net earnings (loss)                                 7,171        5,206      (10,963)       1,229          984
Earnings (loss) per common share from
  continuing operations - basic                 $    1.09    $    1.06    $   (1.35)   $    0.67    $    0.57
Net earnings (loss) per common share -
  basic and diluted                             $    0.99    $    0.75    $   (1.60)   $    0.18    $    0.15
Weighted average common shares
  outstanding - diluted                             7,266        6,950        6,839        6,808        6,779

Balance Sheet Data (June 30):
Cash and investments                            $   8,767    $   4,693    $  18,810    $  24,766    $  10,569
Goodwill                                            3,452        2,952        2,952        2,952        3,663
Total assets                                       20,081       15,114       33,336       41,657       34,809
Medical claims and benefits payable                   406          591       24,495       19,815       11,245
Debt                                                  847        1,766        2,869        3,492        4,345
Shareholders' equity                               14,886        7,140        1,747       12,313       11,051
</TABLE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

                                    OVERVIEW

This Financial Review discusses the Company's results of operations, financial
position and liquidity. This discussion should be read in conjunction with the
consolidated financial statements and related notes thereto contained elsewhere
in this annual report.

The Company provides comprehensive management and consulting services to managed
care organizations, including health maintenance organizations ("HMOs") in
Tennessee and (until November 1, 2002) Michigan, with a targeted mix of Medicaid
and commercial enrollment.

                                       14
<PAGE>

OmniCare Health Plan, in Michigan ("OmniCare-MI"), an HMO then administered by
the Company under a management agreement, was placed in court-ordered
rehabilitation proceedings on July 31, 2001, which relieved the Company from
further funding OmniCare-MI's capital deficiencies and which continued its
OmniCare-MI management agreement, with substantially reduced management fee
revenues from OmniCare-MI beginning August 1, 2001. In March 2002, upon the
court-appointed Rehabilitator's filing a proposed rehabilitation plan for
OmniCare-MI, the Company announced it anticipated eventual termination of the
management agreement. Such termination occurred November 1, 2002, after which
the Company's only managed plan has been OmniCare Health Plan, Inc., in
Tennessee ("OmniCare-TN"), an HMO which is owned by the Company's wholly owned
subsidiary. Accordingly, the consolidated financial statements in this annual
report have been restated to present the operations related to managing
OmniCare-MI as a discontinued operation.

Beginning July 1, 2002, TennCare implemented an 18-month stabilization program
which entailed changes to TennCare's contracts with MCOs, including OmniCare-TN.
During that period, MCOs were generally compensated for administrative services
only (commonly called "ASO"), earned fixed administrative fees, were not at risk
for medical costs in excess of targets established based on various factors,
were subject to increased oversight, and could incur financial penalties for not
achieving certain performance requirements. Through an amendment completed on
December 19, 2003, TennCare extended the ASO reimbursement system applicable to
OmniCare-TN through June 30, 2004. A subsequent amendment completed on June
25,2004, further extended the ASO reimbursement system applicable to OmniCare-TN
through December 31, 2004. There has been no specific indication yet of what
TennCare reimbursement system will apply after that date to OmniCare-TN. These
matters are more fully discussed and analyzed below under the heading "Review of
Consolidated Results of Operations - 2004 Compared to 2003."

The following are earlier events, which notably affected results of operations
for fiscal years covered by the consolidated financial statements contained
elsewhere in this annual report.

On April 13, 2000, the Company funded an unsecured loan to OmniCare-MI evidenced
by a surplus note of $7.7 million to enable OmniCare-MI to meet its minimum
statutory requirement for net worth and working capital. The loan consisted of
$4.0 million in cash and conversion of $3.7 million of management fees owed to
the Company. Pursuant to the terms of the surplus note, interest and principal
payments required approval by the Michigan Office of Financial and Insurance
Services and were repayable only from any statutory surplus earnings of
OmniCare-MI. Note interest was payable annually and forfeited if not then paid.
Interest income of $0.9 million and $1.1 million on that and a similar earlier
surplus note was forfeited for fiscal years 2002 and 2001, respectively. The
note principal had no stated maturity or repayment date. The surplus notes were
subordinated to all other claimants of OmniCare-MI. Based on an analysis of
OmniCare-MI's projected cash flows, the Company recorded impairment losses on
the valuation of the surplus notes which resulted in bad debt expense of $6.9
million for the year ended June 30, 2001. On July 29, 2002, claims of all
creditors holding surplus notes from OmniCare-MI were permanently disallowed by
the State circuit court order, which approved OmniCare-MI's amended
rehabilitation plan.

                                       15
<PAGE>

Effective July 1, 2001, OmniCare-TN entered into a new 42-month contract with
the State of Tennessee's TennCare Program. The contract provided for an
automatic renewal for calendar year 2005 with an expiration date of December 31,
2005 with future premium increases to be determined by the State of Tennessee.

      REVIEW OF CONSOLIDATED RESULTS OF OPERATIONS - 2004 COMPARED TO 2003

OMNICARE-TN DEVELOPMENTS

OmniCare-TN's results of operations for fiscal 2003 are best understood in the
context of certain events preceding that fiscal year involving several of
TennCare's major contracted MCOs, which ceased doing business in fiscal 2002.
Beginning in February, March and April 2002, OmniCare-TN unexpectedly noticed
increases in its claims payments, investigated, and found that approximately
9,500 new members added in September-December 2001 represented children with
special needs with medical costs over 100% of the premiums received, and that
many members transferred to OmniCare-TN from failed MCOs also had medical costs
in excess of OmniCare-TN's premiums received. Beginning in April 2002,
OmniCare-TN wrote to TennCare seeking risk adjustments and reimbursements to
compensate OmniCare-TN for such medical expenses, including for actuarially
estimated claims incurred but not yet reported to OmniCare-TN.

TennCare responded to its MCOs' situation generally and in some instances
individually. For all its contracted MCOs generally, TennCare changed its
reimbursement system to an administrative services only ("ASO") program for an
18-month stabilization period (July 1, 2002 through December 31, 2003), during
which the MCOs - including OmniCare-TN - have no medical cost risk (i.e., no
risk for medical losses), earn fixed administrative fees and are subject to
increased oversight. Through an amendment completed on December 19, 2003,
TennCare extended the ASO reimbursement system applicable to OmniCare-TN through
June 30, 2004. A subsequent amendment completed on June 25, 2004, further
extended the ASO reimbursement system applicable to OmniCare-TN through December
31, 2004. There has been no specific indication yet of what TennCare
reimbursement system will apply after that date to OmniCare-TN.

TennCare responded to OmniCare-TN's situation individually as well. In September
2002, OmniCare-TN and the State of Tennessee, doing business as TennCare,
amended the Contractor Risk Agreement between them. Pursuant to the amendment:

- Retroactively effective July 1, 2001 through April 30, 2002, OmniCare-TN
elected to operate under a shared risk arrangement, under which gains or losses
are shared with the State of Tennessee;

- retroactively effective beginning May 1, 2002, OmniCare-TN has been reimbursed
under an administrative services only agreement with no risk of medical loss;
and

                                       16
<PAGE>

- the State of Tennessee agreed to pay OmniCare-TN up to $7.5 million as
necessary to meet its statutory net worth requirement as of June 30, 2002.

Pursuant to a further agreement with OmniCare-TN in October 2002, the State of
Tennessee agreed to pay additional funds to OmniCare-TN if future certified
actuarial data confirm they are needed by OmniCare-TN to meet its statutory net
worth requirement as of June 30, 2002.

Under generally accepted accounting principles, the $7.5 million receivable was
not recorded in fiscal 2002 financial statements but was recorded in fiscal 2003
financial statements. Based on an actuarial determination, an additional $0.4
million of fiscal 2002 medical claims liability was recorded during fiscal 2003.
In all, fiscal 2002 medical claims of $7.9 million were processed in the fiscal
year ended June 30, 2003, and the same aggregate amount was recognized as
revenue by OmniCare TN. For the year ended June 30, 2004, an additional $0.5
million of such medical claims were processed, and the same amount was
recognized as revenue by Omnicare-TN.

On May 25, 2004, and effective as of January 1, 2004, the Company's wholly owned
subsidiary, United American of Tennessee, Inc. ("UA-TN"), which already owned
75% of the outstanding stock of OmniCare-TN, purchased the remaining 25% of the
outstanding common stock of OmniCare-TN. OmniCare-TN thereby became a wholly
owned subsidiary of UA-TN and a wholly owned second-tier subsidiary of the
Company. The 25% minority interest was purchased under a longstanding option
agreement for $500,000 evidenced by a Company promissory note payable by
December 31, 2004.

As of June 30, 2004, OmniCare-TN's total enrollment was 129,484 members,
compared to 130,080 at June 30, 2003.

OMNICARE-MI DEVELOPMENTS

It should be noted initially in this discussion that the Company's longstanding
management agreement with OmniCare-MI ended effective November 1, 2002. The
consolidated financial statements have been restated to present the operations
related to managing OmniCare-MI as a discontinued operation.

As a Michigan HMO, OmniCare-MI is subject to oversight by the State of
Michigan's Commissioner of the Office of Financial and Insurance Services (the
"Commissioner"). On July 31, 2001, pursuant to a motion by the Commissioner, a
State circuit court judge entered an order of rehabilitation of OmniCare-MI (the
"Order") and appointed the Commissioner as Rehabilitator of OmniCare-MI. The
Order directed the Rehabilitator to administer all of OmniCare-MI's assets and
business while attempting to effectuate its rehabilitation, preserve its
provider network and maintain uninterrupted health care services to the greatest
extent possible. Pursuant to and since the Order, through the management
agreement's termination date, the Rehabilitator's appointed special deputy
served as the Chief Executive Officer of OmniCare-MI.

The OmniCare-MI management agreement was amended on December 14, 2001, effective
August 1, 2001 (the second month of fiscal 2002). Pursuant to the amendment,
OmniCare-MI paid all of its own expenses commencing as of August 1, 2002, except
for personnel, rent and depreciation, which the Company continued to pay. The
amendment reduced the Company's

                                       17
<PAGE>

management fee revenues from OmniCare-MI beginning August 1, 2001, by changing
the methodology for determining the management fee from a fixed percentage (14%)
of premiums earned by OmniCare-MI to a cost-based fee, which was equivalent to
approximately 10% of premiums earned beginning in August 2001, subject to
adjustment to reflect the Company's actual costs of performing the management
agreement.

The Order beneficially relieved the Company from further funding OmniCare-MI's
capital deficiencies through unsecured loans and forgiving earned management
fees. The Order required the Company to continue performing all services under
its OmniCare-MI management agreement, which continued through October 31, 2002.
That agreement terminated November 1, 2002 pursuant to notice received from
OmniCare-MI in accordance with its amended rehabilitation plan, which a State
circuit court judge approved on July 29, 2002.

Because of its resulting workforce reduction, the Company made plans to sublease
all of its then principal office premises in Detroit, Michigan, to OmniCare-MI,
retroactive to November 1, 2002, and expiring at the lease end in May 2005, and
to sell to OmniCare-MI furniture, a telephone system and certain computer
hardware and software that the Company chose to leave there. OmniCare-MI
commenced its occupancy of the premises on November 1, 2002 and the Company
remained in a portion of the premises until it moved its principal offices to
new leased premises in Detroit on February 3, 2003. Management had expected both
parties to finalize and sign the sublease, and close the sale of such assets, in
the fourth quarter of fiscal 2003, but was delayed as a result of the
appointment by the Governor of Michigan of Linda A. Watters as the new
Commissioner of the Office of Financial and Insurance Services on April 11,
2003. Ms. Watters had served on the Company's Board of Directors continually
since 2000 and resigned that office on the same date she became the new
Commissioner (as required to avoid any possible appearance of a conflict of
interest and not as the result of any disagreement with the Company). Because of
the new Commissioner's prior association with the Company, the State circuit
court judge who retained jurisdiction over OmniCare-MI's rehabilitation
proceedings then required that a designated independent person replace the
Rehabilitator's (i.e., Commissioner's) special deputy who had been dealing with
the sublease and assets purchase. Meanwhile, due to the subsequent sale of
OmniCare-MI members to Coventry of Michigan approved on May 10, 2004 and
effective October 1, 2004, Company management now does not expect to complete
the sale of assets and accordingly has recorded a loss from discontinued
operations of $0.7 million in the fourth quarter of fiscal year 2004. While
OmniCare-MI has been regularly paying monthly rent under such de facto sublease
with the Company, based on preliminary discussions management now expects that
OmniCare-MI's occupancy of the subleased premises will diminish at some unknown
future date and then cease at some unknown later date, but sooner than the
primary lease end in May 2005. Those events would increase the Company's rent
expense under that lease, but management cannot currently predict the timing and
amount thereof.

In connection with the November 1, 2002 termination of its OmniCare-MI
management agreement, the Company recorded a $1.8 million loss from discontinued
operations in the second quarter of fiscal 2003. Such loss was due in part to:
(i) a $0.6 million write-down of assets held for sale in excess of the
anticipated selling price for the expected sale of assets described above; (ii)
the above-described sublease, with an expected cost to the Company of
approximately $0.04

                                       18
<PAGE>

million per month through the remainder of the lease, ending in May 2005,
resulting in a loss of $1.2 million recorded in the second quarter of fiscal
2003, which was offset by a $0.6 million write-down of a deferred rent liability
associated with the original lease; and (iii) a bad debt charge of $0.3 million
recorded because management determined the collectability of that amount of
receivables from OmniCare-MI was doubtful. The recorded charges discussed above
were offset by management fees from OmniCare-MI of $0.8 million.

Specific Comparisons of 2004 to 2003

Total revenues decreased $2.4 million (10%), to $22.1 million for the fiscal
year ended June 30, 2004 from $24.5 million for the fiscal year ended June 30,
2003, principally as the result of the change in the reimbursement system of
TennCare, discussed above.

Medical premium revenues were $0.5 million for the fiscal year ended June 30,
2004, a decrease of $7.3 million (93%) from medical premium revenues of $7.8
million for the fiscal year ended June 30, 2003. The decrease came from
OmniCare-TN as the result of TennCare's changing its reimbursement system to an
ASO program for an initially declared 18-month stabilization period beginning
July 1, 2002, subsequently extended through December 31, 2004.

Fixed administrative fees related to the ASO program were $20.4 million for the
fiscal year ended June 30, 2004, an increase of $5.6 million (38%) from fixed
administrative fees of $14.8 million for the fiscal year ended June 30, 2003.
The increase in fixed administrative fees is principally due to an increase in
members and an increase in reimbursement rates effective July 1, 2003.

Total expenses were $15.3 million for the fiscal year ended June 30, 2004,
compared to $16.6 million for the year ended June 30, 2003, a decrease of $1.3
million (8%). The decreases were principally due to the TennCare ASO program for
OmniCare-TN discussed above.

Because of TennCare's new ASO reimbursement system, medical services expenses
were $0.5 million in the fiscal year ended June 30, 2004, an increase of $0.1
million (23%) as compared with medical services expenses of $0.4 million in the
fiscal year ended June 30, 2003. The $0.5 million of medical services expenses
represent fiscal 2002 claims processed and reimbursed by TennCare in fiscal 2004
as explained under the above heading "OmniCare-TN Developments."

Marketing, general and administrative expenses were $14.5 million for the fiscal
year ended June 30, 2004, as compared with marketing, general and administrative
expenses of $15.7 million for the comparable period a year earlier, a decrease
of $1.2 million (8%). The decrease is principally due to TennCare's payment of
premium tax as a result of the ASO arrangement discussed above, offset by the
costs of claims processing associated with a membership increase.

Depreciation and amortization expense decreased $0.07 million (23%), to $0.23
million for the fiscal year ended June 30, 2004 from $0.3 million for the fiscal
year ended June 30, 2003.

                                       19
<PAGE>

Interest expense decreased $0.08 million (60%), to $0.06 million for the fiscal
year ended June 30, 2004 from $0.14 million for the fiscal year ended June 30,
2003, principally due to debt reduction.

Income tax expense decreased $1.7 million (269%), to $(1.1) million in the
fiscal year ended June 30, 2004 from $0.6 million in the fiscal year ended June
30, 2003. The Company's effective tax rate for the fiscal year ended June 30,
2003 was (16)% and differs from the statutory rate of 34%. This difference is
primarily a result of the utilization of net operating loss carryforwards.

Earnings from continuing operations before income taxes were $6.8 million and
$8.0 million for the fiscal years ended June 30, 2004 and 2003, respectively.
Such decrease in earnings from continuing operations of $1.2 million is
principally due to the fiscal 2002 contractual risk agreement discussed above.

Earnings from continuing operations were $7.9 million, or $1.09 per basic share,
for the fiscal year ended June 30, 2004 compared to earnings from continuing
operations of $7.3 million, or $1.06 per basic share, for the fiscal year ended
June 30, 2003. Such increase in earnings from continuing operations of $0.5
million, or $0.03 per basic share, is principally due to the recognition of a
deferred tax asset, an increase in members and an increase in reimbursement
rates effective July 1, 2003.

The Company recognized a loss from discontinued operations of $0.7 million in
the fiscal year ended June 30, 2004 compared to a loss from discontinued
operations of $2.1 million in the fiscal year ended June 30, 2003 as the result
of the termination of the Company's longstanding management agreement with
OmniCare-MI, effective November 1, 2002. See "Overview" above for more detailed
discussion and analysis of such loss from discontinued operations.

Net earnings were $7.2 million, or $0.99 per basic share, for the fiscal year
ended June 30, 2004 compared to net earnings of $5.2 million, or $0.75 per basic
share, for the fiscal year ended June 30, 2003, principally due to the
utilization of net operating loss carryforwards, an increase in members and an
increase in reimbursement rates effective July 1, 2003.

           REVIEW OF CONSOLIDATED RESULTS OF OPERATIONS - 2003 TO 2002

Medical premium revenues were $7.9 million in the fiscal year ended June 30,
2003, a decrease of $155.3 million (95%) from $163.1 million in the fiscal year
ended June 30, 2002. Such $7.9 million of medical premium revenues in fiscal
2003 represent the fiscal 2002 medical claims processed and disbursed pursuant
to the TennCare commitment discussed above. The decrease from the prior year
came from OmniCare-TN as the result of TennCare's changing its reimbursement
system to an ASO program for an 18-month stabilization period beginning July 1,

                                       20
<PAGE>

2002, as described under "Overview" above. Fixed administrative fees related to
the ASO program were $14.8 million for the fiscal year ended June 30, 2003.

Interest and other income decreased $0.2 million (10%) to $1.9 million in the
fiscal year ended June 30, 2003 from $2.1 million in the fiscal year ended June
30, 2002.

Because of TennCare's new ASO reimbursement system, medical services expenses
were $0.4 million in the fiscal year ended June 30, 2003 and relate totally to
fiscal 2002 claims, as compared with medical services expenses of $155.0 million
in the fiscal year ended June 30, 2002. The percentage of medical services
expenses to medical premium revenues -- the medical loss ratio ("MLR") -- was
95% for the fiscal year ended June 30, 2002 for OmniCare-TN due to the
assignment of 49,000 members in fiscal 2002 that disproportionately exceeded
Omni-TN's normal medical services expense experience.

Marketing, general and administrative expenses decreased approximately $2.3
million (13%), to $15.7 million in the fiscal year ended June 30, 2003 from
$18.0 million in the fiscal year ended June 30, 2002. The decrease is
principally due to reduced advertising costs and TennCare's payment of premium
tax as a result of the ASO arrangement referred to above.

Depreciation and amortization expense decreased $0.02 million (8%), to $0.3
million in the fiscal year ended June 30, 2003 from $0.32 million in the fiscal
year ended June 30, 2002.

Interest expense decreased $0.08 million (35%), to $0.14 million in the fiscal
year ended June 30, 2003 from $0.22 million in the fiscal year ended June 30,
2002, due to debt reduction of $1.1 million and decreases in the prime rate.

Total expenses were $16.6 million in the fiscal year ended June 30, 2003,
compared to $173.6 million in the fiscal year ended June 30, 2002, a decrease of
$157.1 million (90%).

Income tax expense decreased $0.2 million (21%), to $0.6 million in the fiscal
year ended June 30, 2003 from $0.8 million in the fiscal year ended June 30,
2002. The Company's effective tax rate for the fiscal year ended June 30, 2003
was 8% and differs from the statutory rate of 34%. This difference is primarily
a result of the utilization of net operating loss carryforwards which reduced
the effective tax rate by 25 percentage points. Furthermore, the release of
certain tax liabilities that management deemed to be no longer needed reduced
the effective tax rate by 1 percentage point.

The Company recognized earnings from continuing operations before income taxes
of $8.0 million in the fiscal year ended June 30, 2003, compared to a loss
before income taxes of $8.4 million in the fiscal year ended June 30, 2002.
Earnings from continuing operations were $7.3 million, or $1.06 per basic share,
in the fiscal year ended June 30, 2003, compared to a loss from continuing
operations of $9.3 million, or $1.35 per basic share, in the fiscal year ended
June 30, 2002, an increase of $16.6 million, or $2.41 per basic share. The
increase in earnings is primarily due to the amendment to OmniCare-TN's TennCare
contract in September 2002, retroactive to July 1, 2001 in some respects and to
May 1, 2002 in other respects, as described

                                       21
<PAGE>

under "Overview" above. In the amendment, the State of Tennessee agreed to pay
OmniCare-TN up to $7.5 million as necessary to meet its statutory net worth
requirement as of June 30, 2002. OmniCare-TN received a permitted practice
letter from the State of Tennessee to include such $7.5 million receivable in
its statutory net worth at June 30, 2002. Under generally accepted accounting
principles, the $7.5 million receivable was not recorded in fiscal 2002
financial statements but was recorded in fiscal 2003 financial statements. Based
on an actuarial determination, an additional $0.4 million of fiscal 2002 medical
claims liability was recorded during fiscal 2003. The change in the estimated
reimbursement from the State of Tennessee offset the corresponding change in the
medical claims liability, still resulting in $7.5 million of net earnings in
fiscal year 2003. In all, fiscal 2002 medical claims of $7.9 million were
processed in the fiscal year ended June 30, 2003, and the same aggregate amount
was recognized as revenue by OmniCare-TN.

The Company recognized a loss from discontinued operations of $2.1 million in
the fiscal year ended June 30, 2003 compared to a loss from discontinued
operations of $1.7 million in the fiscal year ended June 30, 2002 as the result
of the termination of the Company's longstanding management agreement with
OmniCare-MI, effective November 1, 2002. See "Overview" above for more detailed
discussion and analysis of such loss from discontinued operations.

Net earnings were $5.2 million, or $0.75 per basic share, in the fiscal year
ended June 30, 2003 compared to a net loss of $11.0 million, or $1.60 per basic
share, in the fiscal year ended June 30, 2002. Such increase in net earnings is
principally due to OmniCare-TN's contractual amendment with TennCare offset by
the loss from discontinued operations, described above.

                         LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2004, the Company had (i) cash and cash equivalents and short-term
marketable securities of $8.8 million, compared to $4.7 million at June 30,
2003; (ii) working capital of $8.1 million, compared to working capital of $1.7
million at June 30, 2003; and (iii) a current assets-to-current liabilities
ratio of 2.56-to-1, compared to 1.26-to-1 at June 30, 2003.

Net cash from operating activities was $5.0 million in fiscal 2004 compared to
net cash used in operating activities of $12.6 million in fiscal 2003. Investing
activities in fiscal 2004 included the purchase of equipment of $0.07 million,
the purchase of marketable securities of $0.2 million, and the issuance of a
promissory note for $0.5 million. Debt repayments were $1.4 million in fiscal
2004.

Cash and marketable securities increased by $4.1 million at June 30, 2004
compared to June 30, 2003 due primarily to operating activities.

Accounts receivable decreased by $0.3 million at June 30, 2004 compared to June
30, 2003, primarily due to the elimination of the pharmacy rebate program and
reduction in reinsurance receivables.

                                       22
<PAGE>

Property, plant and equipment decreased by $0.2 million at June 30, 2004
compared to June 30, 2003, due to the recording of depreciation of $0.2 million.

Medical claims payable decreased by $0.2 million at June 30, 2004 compared to
June 30, 2003, which is directly related to the payment of outstanding medical
claims.

OmniCare-TN's application for a commercial HMO license was approved on September
7, 2001. Management is not yet actively pursuing that commercial business,
however, due to OmniCare-TN's substantially increased enrollment from members
TennCare assigned from defunct other plans, together with adapting to TennCare's
stabilization program.

Beginning July 1, 2002, TennCare implemented an 18-month stabilization program,
which entailed changes to TennCare's contracts with MCOs, including OmniCare-TN.
During that period, MCOs are generally compensated for administrative services
only (commonly called "ASO"), earned fixed administrative fees, were not at risk
for medical costs in excess of targets established based on various factors,
were subject to increased oversight, and could incur financial penalties for not
achieving certain performance requirements. Through an amendment completed on
December 19, 2003, TennCare extended the ASO reimbursement system applicable to
OmniCare-TN through June 30, 2004. A subsequent amendment completed on June 25,
2004, further extended the ASO reimbursement system applicable to OmniCare-TN
through December 31, 2004. There has been no specific indication yet of what
TennCare reimbursement system will apply after that date to OmniCare-TN.

The Company's de facto sublease to OmniCare-MI of all of the Company's leased
premises in Detroit, Michigan, from November 1, 2002 to the end of the lease in
May 2005 has cost the Company approximately $40,000 per month through the
remainder of the lease. While OmniCare-MI has been regularly paying monthly rent
under such de facto sublease with the Company, based on preliminary discussions
management now expects that OmniCare-MI's occupancy of the subleased premises
will diminish at some unknown future date and then cease at some unknown later
date, but sooner than the primary lease end in May 2005. Those events would
increase the Company's rent expense under that lease, but management cannot
currently predict the timing and amount thereof.

The Company currently has a $0.6 million term loan with Standard Federal Bank,
N.A. repayable in monthly installments of principal and interest of $0.1
million, with an interest rate equal to the bank's prime rate (4.0% at June 30,
2004) plus one percent per annum, and a maturity date of September 30, 2004. The
loan agreement is collateralized by a security interest in all of the Company's
personal property.

The Company's ability to generate adequate amounts of cash to meet its future
cash needs depends on a number of factors, particularly including its ability to
control administrative costs, related to the ASO arrangement for the TennCare
program and controlling corporate overhead costs. On the basis of the matters
discussed above, management believes at this time that the Company has the
ability to generate sufficient cash to adequately support its financial
requirements through the next twelve months, maintain compliance with bank
financial covenants, and maintain minimum statutory net worth requirements of
OmniCare-TN.

                                       23
<PAGE>

                         RECENTLY ENACTED PRONOUNCEMENTS

The following are new accounting standards and interpretations that may be
applicable in the future to the Company:

SFAS No. 149, "Amendments of Statement 133 on Derivative Instruments and Hedging
Activities" amends and clarifies accounting for derivative instruments,
including certain derivative instruments embedded in other contracts, and
hedging activities. The Statement is effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after June
30, 2003. The adoption of this standard had no effect on the Corporation's
financial condition or results of operations.

SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits" was revised in December 2003. The revisions to SFAS132 are intended to
improve financial statement disclosures for defined benefit plans by requiring
more detail about plan assets, benefit obligations, cash flows, benefit costs
and other relevant quantitative and qualitative information. The revisions are
effective for fiscal years after December 15, 2003. The adoption of this
standard had no effect on the Corporation's financial condition or results of
operations.

Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition", was issued by
the Securities and Exchange Commission ("SEC") in December 2003. SAB No. 104
revises and rescinds certain sections of SAB No. 101 in order to make this
interpretive guidance consistent with current authoritative accounting and
auditing guidance and SEC rules and regulations. Accordingly there is no impact
the Corporation's financial condition or results of operations as a result of
the issuance of SAB No. 104.

FIN 46R, a revision to FIN 46, "Consolidation of Variable Interest Entities",
was issued in December 2003. FIN 46R clarifies some of the provisions of FIN 46
and exempts certain entities from its requirements. FIN 46R is effective at the
end of the first interim period ending after March 15, 2004. Entities that have
adopted FIN 46 prior to this effective date can continue to apply the provisions
of FIN 46 until the effective date of FIN 46R. The adoption of FIN 46R had no
effect on the Corporation's financial condition or results of operations.

ITEM 8. FINANCIAL STATEMENTS

Presented beginning at page F-1 of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.
                                       24
<PAGE>

ITEM 9A. CONTROLS AND PROCEDURES

Under the supervision and with the participation of the Company's management,
including our Chief Executive Officer and Chief Financial Officer, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures within 90 days of the filing date of this Report, and,
based on their evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that these controls and procedures are effective. There
were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.

Disclosure controls and procedures are the Company's controls and other
procedures that are designed to ensure that information required to be disclosed
by us in the reports that the Company files or submits under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that we file
under the Exchange Act 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.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated herein by reference to United American Healthcare Corporation
definitive proxy statement to be filed with the Securities and Exchange
Commission within 120 days after the year covered by this Form 10-K with respect
to its Annual Meeting of Shareholders to be held on November 5, 2004.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated herein by reference to United American Healthcare Corporation
definitive proxy statement to be filed with the Securities and Exchange
Commission within 120 days after the year covered by this Form 10-K with respect
to its Annual Meeting of Shareholders to be held on November 5, 2004.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated herein by reference to United American Healthcare Corporation
definitive proxy statement to be filed with the Securities and Exchange
Commission within 120 days after the year covered by this Form 10-K with respect
to its Annual Meeting of Shareholders to be held on November 5, 2004.

                                       25
<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference to United American Healthcare Corporation
definitive proxy statement to be filed with the Securities and Exchange
Commission within 120 days after the year covered by this Form 10-K with respect
to its Annual Meeting of Shareholders to be held on November 5, 2004.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Incorporated herein by reference to United American Healthcare Corporation
definitive proxy statement to be filed with the Securities and Exchange
Commission within 120 days after the year covered by this Form 10-K with respect
to its Annual Meeting of Shareholders to be held on November 5, 2004 is the
information set forth in such proxy statement under the headings "Audit Fees"
and "Audit Committees Pre-Approval Policies and Procedures."

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

a) (1) & (2) The financial statements listed in the accompanying Index to
Consolidated Financial Statements at page F-1 are filed as part of this Form
10-K report

(3) The Exhibit Index lists the exhibits required by Item 601 of Regulation S-K
to be filed as a part of this Form 10-K report. The Exhibit Index identifies
those documents which are exhibits filed herewith or incorporated by reference
to (i) the Company's Form S-1 Registration Statement under the Securities Act of
1933, as amended, declared effective on April 23, 1991 (Commission File No.
33-36760); (ii) the Company's Form 10-K reports for its fiscal years ended June
30, 1993, 1994, 1995, 1996, 1997, 1998, 1999, 2001 and 2002; (iii) the Company's
10-K/A report filed October 14, 1996; (iv) the Company's Form 10-Q reports for
its quarters ended March 31, 1996, September 30, 1996, December 31, 1996, March
31, 1997, March 31, 1998, December 31, 1998, December 31, 2001, September 30,
2002 and December 31, 2002; (v) the Company's Form 8-K reports filed with the
Commission August 8, 1991, April 23, 1993, May 24, 1993, January 29, 1996, April
19, 1996, October 30, 1997, January 20, 1998, January 14, 2000, March 5, 2003
and April 15, 2003; or (vi) the Company's Form 8-K/A reports filed with the
Commission July 21, 1993, November 12, 1997 and March 10, 2003. The Exhibit
Index is hereby incorporated by reference into this Item 15.

Reports on Form 8-K

         1) The Company filed a Current Report on Form 8-K on June 1, 2004,
            reporting the purchase of the remaining 25% of the outstanding
            common stock of Omnicare-TN and a scheduled court hearing regarding
            a petition filed by the Special Deputy Rehabilitator of OmniCare-MI
            recommending that the "Court assign the potential cause of action
            against UAHC [the Company] resulting from its actions as the
            management company of OmniCare-MI to the creditors of OmniCare-MI
            who filed timely objections to the first amended Rehabilitation
            Plan."

         2) The Company filed a Current Report on Form 8-K on June 23, 2004,
            reporting the extension of the ASO reimbursement system for
            OmniCare-TN through December 31, 2004, and that a court approved a
            report and recommendation filed by the Special Deputy Rehabilitator
            of OmniCare-MI.


                                       26
<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.

UNITED AMERICAN HEALTHCARE CORPORATION (REGISTRANT)

<TABLE>
<CAPTION>
           SIGNATURE                                    CAPACITY
           ---------                                    --------
<S>                                         <C>
/s/ WILLIAM C. BROOKS                       Chairman, President and CEO
-------------------------------             (Principal Executive Officer)
William C. Brooks

/s/ STEPHEN D. HARRIS                       Chief Financial Officer
-------------------------------             (Principal Financial Officer and
Stephen D. Harris                           Principal Accounting Officer)


/s/ EMMETT S. MOTEN, JR.                    Secretary and Director
-------------------------------
Emmett S. Moten, Jr.

/s/ OSBIE HOWARD                            Director
-------------------------------
Osbie Howard

/s/ RICHARD M. BROWN, D.O.                  Director
-------------------------------
Richard M. Brown, D.O.

/s/ DARREL W. FRANCIS                       Director
-------------------------------
Darrel W. Francis

/s/ TOM A. GOSS                             Director
-------------------------------
Tom A. Goss

/s/ RONALD E. HALL, SR.                     Director
-------------------------------
Ronald E. Hall, Sr.

/s/ PETER F. HURST, JR.                     Director
-------------------------------
Peter F. Hurst, Jr.

Date: August 26, 2004

</TABLE>

                                       27
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                             Page
<S>                                                                                          <C>
Report of Independent Registered Public Accounting Firm...................................   F-2

Report of Independent Registered Public Accounting Firm...................................   F-3

Consolidated Balance Sheets as of June 30, 2004 and 2003..................................   F-4

Consolidated Statements of Operations for each of the years in the three-year period
     Ended June 30, 2004..................................................................   F-5

Consolidated Statements of Shareholders' Equity and Comprehensive Income for
     each of the years in the three-year period ended June 30, 2004.......................   F-6

Consolidated Statements of Cash Flows for each of the years in the three-year period
     ended June 30, 2004..................................................................   F-7

Notes to Consolidated Financial Statements................................................   F-9
</TABLE>

                                       F-1

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
United American Healthcare Corporation:

We have audited the accompanying consolidated balance sheets of United American
Healthcare Corporation and Subsidiaries as of June 30, 2004 and 2003, and the
related consolidated statements of operations, shareholders' equity and
comprehensive income, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of United American
Healthcare Corporation and Subsidiaries as of June 30, 2004 and 2003, and the
results of their operations and their cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.

/s/ Follmer Rudzewicz PLC

Southfield, Michigan
August 5, 2004

                                       F-2

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
United American Healthcare Corporation

We have audited the consolidated statements of operations, stockholders' equity
and comprehensive income, and cash flows of United American Healthcare
Corporation and Subsidiaries for the year ended June 30, 2002. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of their operations and their cash
flows for the year ended June 30, 2002 in conformity with accounting principles
generally accepted in the United States of America.

As discussed in note 14 to the consolidated financial statements, the Company
has restated the 2002 consolidated financial statements to reflect certain
discontinued operations.

/s/ KPMG LLP

Detroit, Michigan
October 11, 2002, except for note 14, as to
   which the date is September 23, 2003

                                       F-3

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                       JUNE 30,
                                                                                ---------------------
                                                                                  2004         2003
                                                                                --------     --------
<S>                                                                             <C>          <C>
ASSETS
Current assets
    Cash and cash equivalents                                                   $  7,767     $  3,693
    Marketable securities                                                          1,000        1,000
    Accounts receivable - State of Tennessee                                       1,230        1,213
    Other receivables                                                              1,206        1,495
    Prepaid expenses and other                                                       147          167
    Deferred income taxes                                                          1,939          570
                                                                                --------     --------
       Total current assets                                                       13,289        8,138

Assets held for sale                                                                 100          800
Property and equipment, net                                                          323          478
Goodwill                                                                           3,452        2,952
Marketable securities                                                              2,331        2,160
Other assets                                                                         586          586
                                                                                --------     --------
                                                                                $ 20,081     $ 15,114
                                                                                ========     ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
    Current portion of debt                                                     $    847     $  1,108
    Medical claims payable                                                           406          591
    Accounts payable and accrued expenses                                          1,140        2,516
    Accrued compensation and related benefits                                        582          519
    Accrued rent                                                                     837          280
    Other current liabilities                                                      1,384        1,430
                                                                                --------     --------
       Total current liabilities                                                   5,196        6,444

Long-term debt, less current portion                                                   -          658
Accrued rent                                                                           -          872
                                                                                --------     --------
Total Liabilities                                                                  5,196        7,974

Shareholders' equity
    Preferred stock, 5,000,000 shares authorized; none issued                          -            -
    Common stock, no par, 15,000,000 shares authorized; 7,418,519 and
      6,910,721 shares issued and outstanding at June 30, 2004 and 2003,
      respectively                                                                12,226       11,570
    Retained earnings (deficit)                                                    2,702       (4,469)
    Accumulated other comprehensive (loss) income, net of deferred federal
      income taxes                                                                   (43)          39
                                                                                --------     --------
Total shareholders' equity                                                        14,885        7,140
                                                                                --------     --------
                                                                                $ 20,081     $ 15,114
                                                                                ========     ========
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       F-4

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                       YEAR ENDED JUNE 30,
                                                                                ----------------------------------
                                                                                  2004         2003         2002
                                                                                --------     --------     --------
<S>                                                                             <C>          <C>          <C>
REVENUES
  Fixed administrative fees                                                     $ 20,391     $ 14,750     $      -
  Medical premiums                                                                   532        7,841      163,094
  Interest and other income                                                        1,161        1,939        2,082
                                                                                --------     --------     --------
     Total revenues                                                               22,084       24,530      165,176

EXPENSES
  Medical services                                                                   532          434      155,092
  Marketing, general and administrative                                           14,483       15,680       17,989
  Depreciation and amortization                                                      227          296          320
  Interest expense                                                                    66          140          216
                                                                                --------     --------     --------
     Total expenses                                                               15,308       16,550      173,617
                                                                                --------     --------     --------
Earnings (loss) from continuing operations before income taxes                     6,776        7,980       (8,441)
Income tax expense (benefit)                                                      (1,095)         647          818
                                                                                --------     --------     --------
Earnings (loss) from continuing operations                                         7,871        7,333       (9,259)

DISCONTINUED OPERATIONS
  Loss from discontinued operations                                                 (700)      (2,127)      (1,704)
                                                                                --------     --------     --------
Net earnings (loss)                                                             $  7,171     $  5,206     $(10,963)
                                                                                ========     ========     ========

NET EARNINGS (LOSS) PER COMMON SHARE - BASIC
  Earnings (loss) from continuing operations                                    $   1.09     $   1.06     $  (1.35)
  Loss from discontinued operations                                                (0.10)       (0.31)       (0.25)
                                                                                --------     --------     --------
  Net earnings (loss) per common share                                          $   0.99     $   0.75     $  (1.60)
                                                                                ========     ========     ========
       Weighted average shares outstanding                                         7,207        6,941        6,839
                                                                                ========     ========     ========
NET EARNINGS (LOSS) PER COMMON SHARE - DILUTED
  Earnings (loss) from continuing operations                                    $   1.08     $   1.06     $  (1.35)
  Loss from discontinued operations                                                (0.10)       (0.31)       (0.25)
                                                                                --------     --------     --------
  Net earnings (loss) per common share                                          $   0.98     $   0.75     $  (1.60)
                                                                                ========     ========     ========
       Weighted average shares outstanding                                         7,266        6,950        6,839
                                                                                ========     ========     ========
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       F-5

<PAGE>


             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                             RETAINED      ACCUMULATED
                                                             EARNINGS         OTHER           TOTAL
                                         COMMON STOCK      (ACCUMULATED   COMPREHENSIVE   SHAREHOLDERS'
                                       SHARES    AMOUNT      DEFICIT)     INCOME (LOSS)      EQUITY
                                       ------   --------   ------------   -------------   -------------
<S>                                    <C>      <C>        <C>            <C>             <C>
BALANCE AT JUNE 30, 2001                6,779   $ 11,188   $      1,288   $        (163)  $      12,313
                                       ======   ========   ============   =============   =============
Issuance of common stock                  132   $    219   $          -   $           -   $         219
Comprehensive income:
   Net loss                                 -          -        (10,963)              -         (10,963)
Unrealized gain on marketable
  securities                                -          -                            178             178
                                       ------   --------   ------------   -------------   -------------
Total comprehensive income (loss)           -          -        (10,963)            178         (10,785)
                                       ------   --------   ------------   -------------   -------------
BALANCE AT JUNE 30, 2002                6,911   $ 11,407   $     (9,675)  $          15   $       1,747
                                       ======   ========   ============   =============   =============
Issuance of common stock                  148   $    163   $          -   $           -   $         163
Comprehensive income:
   Net earnings                             -          -          5,206               -           5,206
Unrealized gain on marketable
  securities                                -          -              -              24              24
                                       ------   --------   ------------   -------------   -------------
Total comprehensive income                  -          -          5,206              24           5,230
                                       ------   --------   ------------   -------------   -------------
BALANCE AT JUNE 30, 2003                7,059   $ 11,570   $     (4,469)  $          39   $       7,140
                                       ======   ========   ============   =============   =============
Issuance of common stock                  360   $    656   $              $               $         656
Comprehensive income:
   Net earnings                             -          -          7,171               -           7,171
Unrealized loss on marketable
  securities                                -          -              -             (82)            (82)
                                       ------   --------   ------------   -------------   -------------
Total comprehensive income (loss)           -          -          7,171             (82)          7,089
                                       ------   --------   ------------   -------------   -------------
BALANCE AT JUNE 30, 2004                7,419   $ 12,226   $      2,702   $         (43)  $      14,885
                                       ======   ========   ============   =============   =============
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       F-6

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    YEAR ENDED JUNE 30,
                                                               ------------------------------
                                                                 2004       2003       2002
                                                               --------   --------   --------
<S>                                                            <C>        <C>        <C>
OPERATING ACTIVITIES
    Net earnings (loss)                                        $  7,171   $  5,206   $(10,963)
    Adjustments to reconcile net earnings (loss) to net cash
       provided by (used in) operating activities:
       Bad debt expense                                               -        847          -
       Loss on disposal of assets                                   700        577      2,411
       Loss (gain) on liquidation of investment                     (82)        24        166
       Depreciation and amortization                                227        640      1,800
       Deferred income taxes                                     (1,369)       520        556
       Stock awards                                                 385        127         50
    Changes in assets and liabilities
       Accounts receivable- State of Tennessee                      (17)       581     (1,358)
       Other receivables                                            289        514       (567)
       Refundable federal income taxes                                -        284          -
       Prepaid expenses and other                                    20        454        (72)
       Other assets                                                   -         91          -
       Medical claims payable                                      (185)   (23,904)     4,680
       Accounts payable and accrued expenses                     (1,376)     1,648     (1,990)
       Accrued rent                                                (315)       367        (75)
       Accrued compensation and related benefits                     63       (269)      (305)
       Other current liabilities                                    (46)      (354)       558
                                                               --------   --------   --------
       Net cash provided by (used in) operating activities        5,465    (12,647)    (5,109)
                                                               --------   --------   --------
INVESTING ACTIVITIES
    Purchase of marketable securities                              (171)      (334)   (19,388)
    Proceeds from the sale of marketable securities                   -     15,784      5,997
    Purchase of property and equipment                              (72)       (68)    (1,005)
                                                               --------   --------   --------
       Net cash provided by (used in) investing activities         (243)    15,382    (14,396)
                                                               --------   --------   --------
FINANCING ACTIVITIES
    Payments made on debt                                        (1,419)    (1,104)      (623)
    Issuance of common stock                                        271         36        169
                                                               --------   --------   --------
       Net cash used in financing activities                     (1,148)    (1,068)      (454)
                                                               --------   --------   --------
       Net increase (decrease) in cash and cash equivalents       4,074      1,667    (19,959)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                    3,693      2,026     21,985
                                                               --------   --------   --------
CASH AND CASH EQUIVALENTS AT END OF YEAR                       $  7,767   $  3,693   $  2,026
                                                               ========   ========   ========
</TABLE>

                                       F-7

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    YEAR ENDED JUNE 30,
                                                               ------------------------------
                                                                 2004       2003       2002
                                                               --------   --------   --------
<S>                                                            <C>        <C>        <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Interest paid                                              $     63   $    133   $    200
                                                               ========   ========   ========
    Income taxes paid                                          $      -   $      -   $    250
                                                               ========   ========   ========
     Non-cash financing activity - Promissory note and
     goodwill recorded upon purchase of minority interest           500          -          -
                                                               ========   ========   ========
</TABLE>

See accompanying notes to the consolidated financial statements.

                                       F-8

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 1 - DESCRIPTION OF BUSINESS

United American Healthcare Corporation, together with its wholly and majority
owned subsidiary (collectively, the "Company"), is a provider of health care
services, including consulting services to managed care organizations and the
provision of health care services in Tennessee and previously (until November 1,
2002) Michigan.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      a.    PRINCIPLES OF CONSOLIDATION. The consolidated financial statements
            include the accounts of United American Healthcare Corporation, and
            its wholly owned operational subsidiary: United American of
            Tennessee, Inc. ("UA-TN") and Subsidiary. OmniCare Health Plan, Inc.
            ("OmniCare-TN") is a wholly owned subsidiary of UA-TN. All
            significant intercompany transactions and balances have been
            eliminated in consolidation.

      b.    USE OF ESTIMATES. The accompanying consolidated financial statements
            have been prepared in conformity with accounting principles
            generally accepted in the United States of America which requires
            management to make estimates and assumptions that affect the
            reported amounts of assets and liabilities and disclosure of
            contingent assets and liabilities at the date of the financial
            statements. Actual results could differ from those estimates as more
            information becomes available and any such difference could be
            significant. The most significant estimates that are susceptible to
            change in the near term relate to the determination of medical
            claims payable.

      c.    CASH AND CASH EQUIVALENTS. The Company considers all highly liquid
            instruments purchased with original maturities of three months or
            less to be cash equivalents.

      d.    FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying value of cash and
            cash equivalents, receivables, marketable securities and debt
            approximate fair values of these instruments at June 30, 2004 and
            2003.

                                      F-9

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

      e.    MARKETABLE SECURITIES. Investments in marketable securities are
            primarily comprised of U.S. Treasury notes, debt issues of
            municipalities and foreign countries and common stocks all carried
            at fair value, based upon published quotations of the underlying
            securities, and six month certificates of deposit carried at cost
            plus interest earned, which approximates fair value. Marketable
            securities placed in escrow to meet statutory funding requirements,
            although considered available for sale, are not reasonably expected
            to be used in the normal operating cycle of the Company and are
            classified as non-current. All other securities available for sale
            are classified as current.

            Premiums and discounts are amortized or accreted, respectively, over
            the life of the related debt security as adjustment to yield using
            the yield-to-maturity method. Interest and dividend income is
            recognized when earned. Realized gains and losses on investments in
            marketable securities are included in investment income and are
            derived using the specific identification method for determining the
            cost of the securities sold; unrealized gains and losses on
            marketable securities are reported as a separate component of
            shareholders' equity, net of the provision for deferred federal
            income taxes.

      f.    PROPERTY AND EQUIPMENT. Property and equipment are stated at cost.
            Expenditures and improvements, which add significantly to the
            productive capacity or extend the useful life of an asset, are
            capitalized. Depreciation and amortization are computed using the
            straight-line method over the estimated useful lives of the related
            assets. Estimated useful lives of the major classes of property and
            equipment are as follows: furniture and fixtures - 5 to 13 years;
            equipment - 5 years; and computer software - 2 to 5 years. Leasehold
            improvements are included in furniture and fixtures and are
            amortized on a straight-line basis over the shorter of the lease
            term or the estimated useful life, which ranges from 5 to 13 years.
            The Company uses accelerated methods for income tax purposes.

      g.    GOODWILL. Goodwill resulting from business acquisitions is carried
            at cost. Effective July 1, 2001, the Company adopted Statement of
            Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
            Intangible Assets." SFAS No. 142 eliminates the amortization of
            goodwill, but requires that the carrying amount of goodwill be
            tested for impairment at least annually at the reporting unit level,
            as defined, and will only be reduced if it is found to be impaired
            or is associated with assets sold or otherwise disposed of.

            Management has assessed the remaining carrying amount of previously
            recorded goodwill of $3.5 million and determined that such amount is
            not impaired in accordance with SFAS No. 142. Accordingly, goodwill
            impairment was not recorded for the years ended June 30, 2004, 2003
            and 2002.

                                      F-10

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

      h.    LONG-LIVED ASSETS. Following the criteria set forth in Statement of
            Financial Accounting Standards ("SFAS") No. 144, "Accounting for the
            Impairment or Disposal of Long-Lived Assets," long-lived assets and
            certain identifiable intangibles are reviewed by the Company for
            events or changes in circumstances which would indicate that the
            carrying value may not be recoverable. In making this determination,
            the Company considers a number of factors, including estimated
            future undiscounted cash flows associated with long-lived assets,
            current and historical operating and cash flow results and other
            economic factors. When any such impairment exists, the related
            assets are written down to fair value. Based upon its most recent
            analysis, the Company believes that long-lived assets are recorded
            at their net recoverable values.

      i.    MEDICAL CLAIMS PAYABLE. The Company provides for medical claims
            incurred but not reported and the cost of adjudicating claims based
            primarily on past experience, together with current factors, using
            accepted actuarial methods. Although considerable variability is
            inherent in such estimates, management believes that these reserves
            are adequate.

      j.    REVENUE RECOGNITION. Medical premium revenues are recognized in the
            month in which members are entitled to receive health care services.
            Medical premiums collected in advance are recorded as deferred
            revenues. Management fee revenues are recognized in the period the
            related services are performed. Per generally accepted accounting
            principles ("GAAP"), the Company's revenue recognition policy has
            been adjusted for fiscal 2003 and 2004 to reflect TennCare's
            administrative services only ("ASO") arrangement in which
            OmniCare-TN assumes no risk for medical claims. See Note 13 for
            further discussion.

      k.    MEDICAL SERVICES EXPENSE RECOGNITION. The Company contracts with
            various health care providers for the provision of certain medical
            services to its members and generally compensates those providers on
            a capitated and fee for service basis. The estimates for medical
            claims payable are regularly reviewed and adjusted as necessary,
            with such adjustments generally reflected in current operations.

      l.    STOP LOSS INSURANCE. Stop loss insurance premiums are reported as
            medical services expense, while the related insurance recoveries are
            reported as deductions from medical services expense.

      m.    INCOME TAXES. Deferred income tax assets and liabilities are
            recognized for the expected future tax consequences attributable to
            differences between the financial statement carrying amount of
            existing assets and liabilities and their respective tax bases.
            Deferred income tax assets and liabilities are measured using
            enacted tax rates expected to apply to taxable income in the years
            in which these temporary differences are expected to be recovered or
            settled. The effect on

                                      F-11

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

            deferred income tax assets and liabilities of a change in tax rates
            is recognized in income in the period that involves the deferred tax
            assets and liabilities in the amount expected to be realized.
            Valuation allowances are established when necessary to reduce the
            deferred tax assets and liabilities in the amount expected to be
            realized. The deferred income tax provision or benefit generally
            reflects the net change in deferred income tax assets and
            liabilities during the year. The current income tax provision
            reflects the tax consequences of revenues and expenses currently
            taxable or deductible for the period.

      n.    STOCK BASED COMPENSATION. The Company has adopted SFAS No. 148 and
            the disclosure-only provisions of SFAS No. 123, "Accounting for
            Stock-Based Compensation." The Company records compensation expense
            for stock options only if the market price of the Company's stock,
            on the date of grant, exceeds the amount an individual must pay to
            acquire the stock, if dilutive. Accordingly, if the Company had
            elected to recognize compensation cost based on the fair value of
            the options at grant date, the Company's earnings and earnings per
            share from continuing operations, assuming dilution, for fiscal
            2004, 2003 and 2002 would have been the pro forma amounts indicated
            below (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                2004       2003        2002
                                              --------   --------   ----------
<S>                                           <C>        <C>        <C>
Net earnings as reported                      $  7,171   $  5,206   $  (10,963)
Deduct: Total stock-based employee
      compensation expense determined under
      fair value based method for all
      awards, net of related tax effects         1,047         74          244
Pro forma net earnings                        $  6,124   $  5,132   $  (11,207)
Earnings (loss) per share:
      As reported - Basic                     $   0.99   $   0.75   $    (1.60)
      As reported - Diluted                       0.98       0.75        (1.60)
      Pro forma (Basic and Diluted)           $   0.84   $   0.74   $    (1.64)
                                              --------   --------   ----------
</TABLE>

            The fair value of options at date of grant was estimated using the
            Black-Scholes option pricing model with the following weighted
            average assumptions used for grants in fiscal 2004: dividend yield
            of 0%; expected volatility of 57.18%; risk free interest rate of
            4.47%; and expected life of 9.5 years. The effects of applying SFAS
            No. 123 in the above pro forma disclosures are not necessarily
            indicative of future amounts, because additional stock option awards
            could be made in future years.

      o.    EARNINGS PER SHARE. Basic net earnings per share excluding dilution
            has been computed by dividing net earnings by the weighted-average
            number of common

                                      F-12

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

            shares outstanding for the period. Diluted earnings per share is
            computed the same as basic except that the denominator also includes
            shares issuable upon assumed exercise of stock options.

            For the fiscal years ended June 30, 2004, June 30, 2003 and June 30,
            2002 the Company had outstanding stock options of 59,448, 9,241, and
            0, respectively, having a dilutive effect on earnings per share.

      p.    SEGMENT INFORMATION. The Company reports financial and descriptive
            information about its reportable operating segments. Operating
            segments are components of an enterprise about which separate
            financial information is available that is evaluated regularly by
            the chief operating decision-maker in deciding how to allocate
            resources and in assessing performance. Financial information is
            reported on the basis that it is used internally for evaluating
            segment performance and deciding how to allocate resources to
            segments.

      q.    RECLASSIFICATION. Certain fiscal 2002 amounts have been reclassified
            to comform with the fiscal 2004 and 2003 presentation, which present
            the operations related to managing OmniCare-MI as a discontinued
            operation. Such reclassifications have no effect on net earnings
            (loss) as originally presented for those years. See Note 14 for
            further discussion.

                                      F-13

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 3 - ACQUISITIONS

OMNICARE HEALTH PLAN, INC. OF TENNESSEE (OMNICARE-TN)

In February 1994, the Company and its wholly owned subsidiary, UA-TN, entered
into a long-term agreement to manage OmniCare-TN and, effective July 1994,
acquired a 50% equity interest in OmniCare-TN for $1.3 million in cash.
Effective January 31, 1996, the Company purchased an additional 25% of the
voting common stock and 100% of the preferred stock of OmniCare-TN. This
increased the Company's ownership in the voting common stock of OmniCare-TN to
75%. The purchase price for the additional common stock and preferred stock of
OmniCare-TN was $0.1 million and $10.9 million, respectively, of which $8.7
million was the conversion of OmniCare-TN debt to the Company into equity and
$2.3 million was paid in cash. In July 1998 and September 2000, the Company made
additional cash contributions of $0.75 million and $0.9 million, respectively,
to OmniCare-TN, in exchange for additional preferred stock of OmniCare-TN.

This acquisition was accounted for under the purchase method of accounting. The
excess of the purchase price over the fair value of the net assets acquired of
$7.4 million has been recorded as goodwill, and was amortized over ten years on
a straight-line basis until July 1, 2001. See Note 2g for further discussion.
Results of operations are included in the accompanying financial statements
effective with the date of purchase of the majority common stock ownership
interest. In fiscal 1999, goodwill was reduced by $0.5 million as a result of
the utilization of OmniCare-TN's net operating loss carryforwards ("NOL" or
"NOLs") generated prior to January 31, 1996. The remaining NOLs related to
OmniCare-TN were generated subsequent to January 31, 1996.

On May 25, 2004, and effective as of January 1, 2004, the Company's wholly owned
subsidiary, United American of Tennessee, Inc. ("UA-TN"), which already owned
75% of the outstanding stock of OmniCare-TN, purchased the remaining 25% of the
outstanding common stock of OmniCare-TN. OmniCare-TN thereby became a wholly
owned subsidiary of UA-TN and a wholly owned second-tier subsidiary of the
Company. The 25% minority interest was purchased under a longstanding option
agreement for $0.5 evidenced by a Company promissory note payable by December
31, 2004. This acquisition was accounted for under the purchase method of
accounting. The excess of the purchase price over the fair value of the net
assets acquired of $0.5 million has been recorded as goodwill.

                                      F-14

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 4 - MARKETABLE SECURITIES

A summary of estimated fair value, which approximates amortized cost, of
marketable securities as of June 30, 2004 and 2003 is as follows (in thousands):

<TABLE>
<CAPTION>
                                         2004       2003
                                       --------   --------
<S>                                    <C>        <C>
Available for sale - Current:
 Certificates of deposit               $  1,000   $  1,000
 Equity and other securities                  -          -
                                       --------   --------
                                          1,000      1,000
Available for sale - Noncurrent:
 U.S. government obligations              2,331      2,160
                                       --------   --------
                                       $  3,331   $  3,160
                                       ========   ========
</TABLE>

Certain of the Company's operations are obligated by state regulations to
maintain a specified level of escrowed funds to assure the provision of
healthcare services to enrollees. To fulfill these statutory requirements, the
Company maintains funds in highly liquid escrowed investments, which amounted to
$2.3 million and $2.2 million at June 30, 2004 and 2003, respectively.

NOTE 5 - CONCENTRATION OF RISK

During the years ended June 30, 2004, 2003 and 2002, approximately 100%, 87% and
91%, respectively, of the Company's revenues were derived from a single
customer, TennCare, a State of Tennessee program that provides medical benefits
to Medicaid and Working Uninsured recipients. Prior to the current
administrative services only arrangement discussed in Note 13, TennCare withheld
5% of the Company's monthly capitation payment, which withheld amounts were
distributed to the Company when certain informational filing requirements were
met by the Company. There are no withholdings by TennCare under the current
administrative services only arrangement for the years ended June 30, 2004 and
2003.

The Company had a long-term management agreement with OmniCare Health Plan, in
Michigan ("OmniCare-MI"), which terminated on November 1, 2002. Pursuant to the
management agreement, the Company provided management and consulting services to
OmniCare-MI and was paid a percentage of revenues until August 1, 2001 and
thereafter cost-based fee, from OmniCare-MI as a percentage of the Company's
total revenues were 8% and 20% for the years ended June 30, 2003 and 2002,
respectively. See Note 10 for further discussion of the OmniCare-MI management
agreement.

                                      F-15

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 6 - PROPERTY AND EQUIPMENT

Property and equipment at each June 30 consists of the following (in thousands):

<TABLE>
<CAPTION>
                                                    2004       2003
                                                  --------   --------
<S>                                               <C>        <C>
Furniture and fixtures                            $    878   $    863
Equipment                                            2,665      2,636
Computer software                                      202        177
                                                  --------   --------
                                                     3,745      3,676
Less accumulated depreciation and amortization       3,422      3,198
                                                  --------   --------
                                                  $    323   $    478
                                                  ========   ========
</TABLE>

See Note 14 for discussion on assets held for sale.

NOTE 7 - LONG TERM DEBT

The Company currently has a $0.6 million term loan with Standard Federal Bank,
N.A. It is repayable in monthly installments of principal and interest of $0.1
million, with an interest rate equal to the bank's prime rate (4.0% at June 30,
2004) plus one percent per annum, and a maturity date of September 30, 2004. The
loan agreement is collateralized by a security interest in all of the Company's
personal property. The Company's outstanding debt at each June 30 is as follows
(in thousands):

<TABLE>
<CAPTION>
                                                    2004       2003
                                                  --------   --------
<S>                                               <C>        <C>
Term loan                                         $    597   $  1,766
Promissory note                                        250          -
                                                  --------   --------
             Total debt                                847      1,766
Less debt payable within one year                      847      1,108
                                                  --------   --------
Long-term debt, less current portion              $      -   $    658
                                                  ========   ========
</TABLE>

NOTE 8 - MEDICAL CLAIMS PAYABLE

The Company has recorded a liability of $0.4 million, $0.6 million, and $24.5
million at June 30, 2004, 2003, and 2002 respectively, for unpaid claims and
medical claims incurred by enrollees. The ultimate settlement of medical claims
may vary from the estimated amounts reported at June 30, 2004, 2003 and 2002.

The following table provides a reconciliation of the unpaid claims for the years
ended June 30, 2004, 2003 and 2002 (in thousands):

                                      F-16

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

<TABLE>
<CAPTION>
                                                    2004       2003       2002
                                                  --------   --------   --------
<S>                                               <C>        <C>        <C>
Balance at beginning of fiscal year               $    591   $ 24,495   $ 19,815

Incurred losses related to current year                  -          -    157,953
Incurred loss related to prior year                    532        434          -
Reserve reversal related to prior year                   -          -     (2,861)
                                                  --------   --------   --------
Total losses incurred                                  532        434    155,092

Paid claims related to current year                      -          -    132,734
Paid claims related to prior year                      717     24,338     17,678
                                                  --------   --------   --------
Total paid claims                                      717     24,338    150,412
                                                  --------   --------   --------
Balance at end of fiscal year                     $    406   $    591   $ 24,495
                                                  ========   ========   ========
</TABLE>

                                      F-17

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 9 - INCOME TAXES

The components of income tax expense (benefit) for each year ended June 30 are
as follows (in thousands):

<TABLE>
<CAPTION>
                                                    2004       2003       2002
                                                  --------   --------   --------
<S>                                               <C>        <C>        <C>
Continuing operations:
Current expense                                   $    275   $    127   $    262
Deferred expense (credit)                              408      1,592     (2,991)
Change in valuation allowance                       (1,778)    (1,072)     3,547
                                                  --------   --------   --------
                                                  $ (1,095)  $    647   $    818
                                                  ========   ========   ========
</TABLE>

A reconciliation of the provision for income taxes for each year ended June 30
follows (in thousands):

<TABLE>
<CAPTION>
                                                    2004       2003       2002
                                                  --------   --------   --------
<S>                                               <C>        <C>        <C>
Income tax expense (benefit) at the statutory
 tax rate                                         $  2,073   $  1,990   $ (3,449)
State and city income tax                              313        177        299
Utilization of AMT credit                                -          -          -
Tax-exempt interest on municipal bonds                   -          -        (13)
Utilization of NOL carryforward                     (1,462)         -          -
Valuation allowance                                 (1,778)    (1,072)     3,547
Other, net                                            (241)      (448)       434
                                                  --------   --------   --------
                                                  $ (1,095)  $    647   $    818
                                                  ========   ========   ========
</TABLE>

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of 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 reversals of deferred taxes, projected future taxable income, and tax
planning strategies in making this assessment.

Based upon the level of historical taxable income and projections for future
taxable income over the periods in which the deferred tax assets are deductible,
management believes it is more likely than not that the Company will realize the
benefits of these deductible differences, net of the existing valuation
allowance at June 30, 2004. The amount of the deferred tax assets considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced.

                                      F-18

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

As of June 30, 2004, the NOLs for federal income tax purposes expire from 2011
to 2021. Components of the Company's deferred tax assets and liabilities at each
June 30 are (in thousands):

<TABLE>
<CAPTION>
                                                                2004       2003
                                                              --------   --------
<S>                                                           <C>        <C>
Deferred tax assets
    Accrued rent                                              $    150   $    297
    Bad debt expense                                             1,360      1,360
    Deferred compensation                                          149        135
    Net operating loss carryforward of consolidated losses       4,863      5,381
    Net operating loss carryforward of purchased subsidiary        598      1,563
    Alternative minimum tax credit carryforward                    392        403
    Property and equipment                                       2,247      1,018
    Unrealized loss on marketable securities                       (11)
                                                              --------   --------
Total gross deferred tax assets                                  9,748     10,157
    Valuation allowance                                         (7,809)    (9,587)
                                                              --------   --------
Total gross deferred tax liabilities                                 -          -
                                                              --------   --------
    Net deferred tax asset                                    $  1,939   $    570
                                                              ========   ========
</TABLE>

NOTE 10 - RELATED PARTY TRANSACTIONS

The Company had a long-term management agreement with OmniCare-MI from 1985
until November 1, 2002. OmniCare-MI was related to the Company via certain
common officers and directors until July 31, 2001. During the period of such
relationship, the agreement provided that: it would expire in December 2010; it
was subject to review every five years and could be terminated without cause by
OmniCare-MI at the time of the review or by either party with cause; the Company
was required to pay certain administrative expenses associated with its activity
on behalf of OmniCare-MI; and all costs associated with the management of
OmniCare-MI were expensed as incurred.

A court order issued on July 31, 2001 placed OmniCare-MI in rehabilitation.
Pursuant to the court order, the Company continued to perform the management
agreement without interruption and no Company officers or directors were any
longer OmniCare-MI officers or directors. The Company and OmniCare-MI amended
the agreement effective as of August 1, 2001, reducing the Company's management
fee percentage from a fixed percentage (14%) of premiums earned by OmniCare-MI
to a cost-based fee beginning in August 2001, subject to adjustment to
appropriately reflect the Company's costs of performing the contract, and
continuing unchanged the agreement's other basic terms. The management agreement
terminated November 1, 2002.

Health insurance for some of the Company's employees was provided by
OmniCare-MI. The expense was $0.03 million and $0.6 million for the years ended
June 30, 2003 and 2002 respectively.

The Company then arranged in October 2002 for a sublease to OmniCare-MI of all
of the Company's leased former office premises in Detroit, Michigan, commencing
November 1, 2002 and expiring at the end of the lease in May 2005. This
arrangement has cost the Company

                                      F-19

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

approximately $40,000 per month. While OmniCare-MI has been regularly paying
monthly rent under such de facto sublease with the Company, based on preliminary
discussions management now expects that OmniCare-MI's occupancy of the subleased
premises will diminish at some unknown future date and then cease at some
unknown later date, but sooner than the primary lease end in May 2005. Those
events would increase the Company's rent expense under that lease, but
management cannot currently predict the timing and amount thereof.

NOTE 11 - BENEFIT AND OPTION PLANS

The Company offers a 401(k) retirement and savings plan that covers
substantially all of its employees. Effective April 1, 2001, the Company has
matched 50% of an employee's contribution up to 4% of the employee's salary.
Prior to April 1, 2001, the Company matched 1% of compensation. Expenses related
to the 401(k) plan were $65,862, $45,653 and $94,000 for the years ended June
30, 2004, 2003 and 2002, respectively.

The Company has reserved 200,000 common shares for its Employee Stock Purchase
Plan ("ESPP"), which became effective October 1996, and enables all eligible
employees of the Company to subscribe for shares of common stock on an annual
offering date at a purchase price which is the lesser of 85% of the fair market
value of the shares on the first day or the last day of the annual period.
Employee contributions for each of the years ended June 30, 2004 and 2003 were
$7,812 and $527, respectively.

On August 6, 1998, the Company's Board of Directors adopted the 1998 Stock
Option Plan ("1998 Plan"). The 1998 Plan was approved by the Company's
shareholders on November 12, 1998. The Company reserved an aggregate of 500,000
common shares for issuance upon exercise of options under the 1998 Plan. On
November 14, 2003 the Company's shareholders approved an increase in the number
of common shares reserved for issuance pursuant to the exercise of options
granted under the amended plan from 500,000 to 1,000,000 shares, and extended
the termination date of the plan by 5 years to August 6, 2013. On September 9,
1998, December 15, 1998, February 3, 1999, November 10, 1999, May 3, 2001
November 30, 2001, May 8, 2003, December 4, 2003, and April 29, 2004
nonqualified options for a total of 325,000, 26,000, 5,000, 8,000, 50,000,
75,000, 25,000, 196,500 and 280,000 common shares, respectively, were granted
under the amended and restated 1998 Plan. The exercise prices of the options
range from $0.63 to $5.28.

Independent of any stock option plan, on May 11, 1998 the Company granted
nonqualified stock options for 100,000 common shares to the Company's prior
President and reserved that number of common shares for issuance upon exercise
of such options. Such options expired on May 11, 2003 without being exercised.
On March 1, 2003, the Company granted nonqualified stock options for 100,000
common shares (outside the 1998 Plan) to the Company's President and CEO and
reserved that number of common shares for issuance upon exercise of such
options. Such options expire March 1, 2008 and are fully exercisable beginning
March 1, 2005 at a price of $1.10 per share.

                                      F-20

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

Information regarding the stock options for fiscal 2004, 2003 and 2002 follows
(shares in thousands):

<TABLE>
<CAPTION>
                             OPTIONS OUTSTANDING                   OPTIONS EXERCISABLE
                  ------------------------------------------   ----------------------------
                              WEIGHTED          AVERAGE         NUMBER OF       WEIGHTED
                              AVERAGE          REMAINING         SHARES         AVERAGE
                  SHARES   EXERCISE PRICE   CONTRACTUAL LIFE   EXERCISABLE   EXERCISE PRICE
                  ------   --------------   ----------------   -----------   --------------
<S>               <C>      <C>              <C>                <C>           <C>
Options
outstanding at
June 30, 2002        436   $         2.08          7.2 years           434   $         2.08
Granted              155             1.27          6.8 years             1             5.28
Exercised            (38)            0.96              -               (38)               -
Expired             (100)            1.38              -              (100)               -
Forfeited             (2)            1.25              -                (2)               -
                  ------   --------------   ----------------   -----------   --------------
Options
outstanding at
June 30, 2003        451   $         2.03          7.2 years           295   $         2.42
Granted              477             3.37          9.6 years           120             2.09
Exercisable            -                -              -                32             1.48
Exercised           (143)            1.56              -              (143)               -
Expired                -                -              -                 -                -
Forfeited             (5)            1.72              -                 -                -
                  ------   --------------   ----------------   -----------   --------------
Options
outstanding at
June 30, 2004        780   $         2.94          8.0 years           304   $         2.65
                  ------   --------------   ----------------   -----------   --------------
</TABLE>

Options for 38,500 common shares were available for grant under the amended and
restated 1998 Plan at the end of fiscal 2004.

NOTE 12 - LEASES

The Company leases its facilities and certain furniture and equipment under
operating leases expiring at various dates through February 2006. Terms of the
facility leases generally provide that the Company pay its pro rata share of all
operating expenses, including insurance, property taxes and maintenance.

Rent expense for the years ended June 30, 2004, 2003 and 2002 totaled $0.6
million, $1.9 million and $1.7 million, respectively. Based on the current
commitments, the Company estimates rent expense of $0.6 million for fiscal years
2005 and 2006.

                                      F-21

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

The Company's de facto sublease to OmniCare-MI of all of the Company's leased
former office premises in Detroit, Michigan, commencing November 1, 2002 and
expiring at the end of the lease in May 2005, has cost the Company approximately
$40,000 per month through the remainder of the lease. The Company recognized a
charge of $1.2 million recorded in the second quarter of fiscal 2003, which was
offset by a $0.6 million write-down of a deferred rent liability associated with
the original lease and is included in discontinued operations. While OmniCare-MI
has been regularly paying monthly rent under such de facto sublease with the
Company, based on preliminary discussions management now expects that
OmniCare-MI's occupancy of the subleased premises will diminish at some unknown
future date and then cease at some unknown later date, but sooner than the
primary lease end in May 2005. Those events would increase the Company's rent
expense under that lease, but management cannot currently predict the timing and
amount thereof.

NOTE 13 - CONTRACTUAL RISK AGREEMENT

Beginning July 1, 2002, TennCare implemented an 18-month stabilization program
which entailed changes to TennCare's contracts with MCOs, including OmniCare-TN.
During that period, MCOs were generally compensated for administrative services
only (commonly called "ASO"), earned fixed administrative fees, were not at risk
for medical costs in excess of targets established based on various factors,
were subject to increased oversight, and could incur financial penalties for not
achieving certain performance requirements. Through an amendment completed on
December 19, 2003, TennCare extended the ASO reimbursement system applicable to
OmniCare-TN through June 30, 2004. A subsequent amendment completed on June 25,
2004, further extended the ASO reimbursement system applicable to OmniCare-TN
through December 31, 2004. There has been no specific indication yet of what
TennCare reimbursement system will apply after that date to OmniCare-TN.

In September 2002, OmniCare-TN and the State of Tennessee, doing business as
TennCare, amended the Contractor Risk Agreement between them. Pursuant to the
amendment:

- Retroactively effective July 1, 2001 through April 30, 2002, OmniCare-TN
elected to operate under a shared risk arrangement, under which gains or losses
are shared with the State of Tennessee;

- retroactively effective beginning May 1, 2002, OmniCare-TN has been reimbursed
under an administrative services only agreement with no risk of medical loss;
and

- the State of Tennessee agreed to pay OmniCare-TN up to $7.5 million as
necessary to meet its statutory net worth requirement as of June 30, 2002.

Pursuant to a further agreement with OmniCare-TN in October 2002, the State of
Tennessee agreed to pay additional funds to OmniCare-TN if future certified
actuarial data confirm they are needed by OmniCare-TN to meet its statutory net
worth requirement as of June 30, 2002.

OmniCare-TN received a permitted practice letter from the State of Tennessee to
include such $7.5 million receivable in its statutory net worth at June 30,
2002. Under generally accepted

                                      F-22

<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

accounting principles, the $7.5 million receivable was not recorded in fiscal
2002 financial statements but was recorded in fiscal 2003 financial statements.
Based on an actuarial determination, an additional $0.4 million of fiscal 2002
medical claims liability was recorded during fiscal 2003. In all, fiscal 2002
medical claims of $7.9 million were processed in the fiscal year ended June 30,
2003, and the same aggregate amount was recognized as revenue by OmniCare TN.
For the year ended June 30, 2004, an additional $0.5 million of such medical
claims were processed, and the same amount was recognized as revenue by
OmniCare-TN pursuant to the State's TennCare amendment and further agreement
discussed above in this Note 13.

NOTE 14 - DISCONTINUED OPERATIONS

The Company's longstanding management agreement with OmniCare-MI, ended
effective November 1, 2002. Because of its resulting workforce reduction, the
Company made plans to sublease all of its then principal office premises in
Detroit, Michigan, to OmniCare-MI, retroactive to November 1, 2002, and expiring
at the lease end in May 2005, and to sell to OmniCare-MI furniture, a telephone
system and certain computer hardware and software that the Company chose to
leave there. OmniCare-MI commenced its occupancy of the premises on November 1,
2002 and the Company remained in a portion of the premises until it moved its
principal offices to new leased premises in Detroit on February 3, 2003.
Management expected to complete the signing of the sublease and the sale of
assets by the third quarter of fiscal 2004; however, due to the subsequent sale
of OmniCare-MI members to Coventry of Michigan approved on May 10, 2004 and
effective October 1, 2004, management now does not expect to complete the sale
of assets and has recorded a loss from discontinued operations of $0.7 million
in the fourth quarter of fiscal year 2004. While OmniCare-MI has been regularly
paying monthly rent under such de facto sublease with the Company, based on
preliminary discussions management now expects that OmniCare-MI's occupancy of
the subleased premises will diminish at some unknown future date and then cease
at some unknown later date, but sooner than the primary lease end in May 2005.
Those events would increase the Company's rent expense under that lease, but
management cannot currently predict the timing and amount thereof.

In connection with the November 1, 2002 termination of its OmniCare-MI
management agreement, the Company recorded a $1.8 million loss from discontinued
operations in the second quarter of fiscal 2003. Such loss was due in part to:
(i) a $0.6 million write-down of assets held for sale in excess of the
anticipated selling price for the expected sale of assets described above; (ii)
the above-described sublease, with an expected cost to the Company of
approximately $0.04 million per month through the remainder of the lease, ending
in May 2005, resulting in a loss of $1.2 million recorded in the second quarter
of fiscal 2003, which was offset by a $0.6 million write-down of a deferred rent
liability associated with the original lease; and (iii) a bad debt charge of
$0.3 million recorded because management determined the collectability of that
amount of receivables from OmniCare-MI was doubtful. The recorded charges
discussed above were offset by management fees from OmniCare-MI of $0.8 million.

                                      F-23
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

The loss in fiscal year 2002 of $1.7 million is primarily attributed to an
impairment loss equal to the $2.4 million remaining carrying value of the
patient care software system which the Company had purchased to fulfill a
requirement of the State of Michigan's Office of Financial and Insurance
Services to implement such a system for OmniCare-MI. The system was not in use
at June 30, 2002 and Company management recognized that the system would not be
used by OmniCare-MI because its management agreement with the Company would
terminate November 1, 2002.

Summarized selected financial information for the discontinued operations is as
follows:

<TABLE>
<CAPTION>
                                                               2004        2003        2002
                                                               ----        ----        ----
<S>                                                          <C>         <C>         <C>
Management fees                                              $      -    $  3,395    $ 14,941
                                                             --------    --------    --------
Loss from discontinued operations net of zero income taxes   $   (700)   $ (2,127)   $ (1,704)
                                                             ========    ========    ========
</TABLE>

                                      F-24
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 15 - UNAUDITED SELECTED QUARTERLY FINANCIAL DATA

The following table presents selected quarterly financial data for the years
ended June 30, 2004 and 2003 (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED
                              -------------------------------------------------------------
                              SEPT. 30,          DEC. 31,       MARCH 31,          JUNE 30,        TOTAL
                              ---------          --------       ---------          --------        -----
<S>                           <C>                <C>            <C>                <C>             <C>
2004
Total revenues                $  5,728            5,479           5,547             5,330          22,084
Net earnings                       912            1,329           1,397             3,533           7,171
Net earnings per common
 share assuming dilution      $   0.13             0.19            0.19              0.48            0.98

2003
Total revenues                $  7,114            8,042           4,717             4,657          24,530
Net earnings                     2,402            1,448             528               828           5,206
Net earnings per common
 share assuming dilution      $   0.34             0.21            0.08              0.12            0.75
</TABLE>

                                      F-25
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 16 - SEGMENT FINANCIAL INFORMATION

Summarized financial information for the Company's principal operations is as
follows (in thousands):

<TABLE>
<CAPTION>
                                                            HMOs &
                                        MANAGEMENT       MANAGED PLANS       CORPORATE &      CONSOLIDATED
                                       COMPANIES (1)          (2)            ELIMINATIONS        COMPANY
                                       -------------          ---            ------------        -------
<S>                                    <C>               <C>                 <C>              <C>
     2004
Revenues - external customers            $        -        $   20,923        $         -       $   20,923
Revenues - intersegment                      18,352                 -            (18,352)               -
Interest and other income                       163               998                  -            1,161
                                         ----------        ----------        -----------       ----------
Total revenues                           $   18,515        $   21,921        $   (18,352)      $   22,084
                                         ==========        ==========        ===========       ==========
Interest expense                         $       66        $        -        $         -       $       66
Earnings from continuing operations           4,967             2,904                  -            7,871
Loss from discontinued operations              (700)                -                  -             (700)
Segment assets                               44,633            12,175            (36,727)          20,081
Purchase of equipment                            72                 -                  -               72
Depreciation and amortization                   227                 -                  -              227
                                         ==========        ==========        ===========       ==========
     2003
Revenues - external customers            $        -        $   22,591        $         -       $   22,591
Revenues - intersegment                      13,291                 -            (13,291)               -
Interest and other income                       231             1,708                  -            1,939
                                         ----------        ----------        -----------       ----------
Total revenues                           $   13,522        $   24,299        $   (13,291)      $   24,530
                                         ==========        ==========        ===========       ==========
Interest expense                         $      140        $        -        $         -       $      140
Earnings (loss) from continuing
   operations                                (2,211)            9,544                  -            7,333
Loss from discontinued operations            (2,127)                -                  -           (2,127)
Segment assets                               30,416             9,987            (25,289)          15,114
Purchase of equipment                            68                 -                  -               68
Depreciation and amortization                   296                 -                  -              640
                                         ==========        ==========        ===========       ==========
     2002
Revenues - external customers            $        -        $  163,094        $         -       $  163,094
Revenues - intersegment                      16,191                 -            (16,191)               -
Interest and other income (loss)                (13)            2,095                  -            2,082
                                         ----------        ----------        -----------       ----------
Total revenues                           $   16,178        $  165,189        $   (16,191)      $  165,176
                                         ==========        ==========        ===========       ==========
Interest expense                         $      216        $        -        $         -       $      216
Earnings (loss) from continuing
   operations                                   639            (9,898)                 -           (9,259)
Loss from discontinued operations            (1,704)                -                  -           (1,704)
Segment assets                               29,485            23,836            (19,985)          33,336
Purchase of equipment                         1,005                 -                  -            1,005
Depreciation and amortization                   320                 -                  -              320
                                         ==========        ==========        ===========       ==========
</TABLE>

(1)   Management Companies: United American Healthcare Corporation, United
      American of Tennessee, Inc.

(2)   HMOs and Managed Plans: OmniCare Health Plan of Tennessee (2004, 2003,
      2002) and County Care (through September 30, 2001).

                                      F-26
<PAGE>

             UNITED AMERICAN HEALTHCARE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          JUNE 30, 2004, 2003 AND 2002

NOTE 17 - RECENTLY ENACTED PRONOUNCEMENTS

The following are new accounting standards and interpretations that may be
applicable in the future to the Company:

SFAS No. 149, "Amendments of Statement 133 on Derivative Instruments and Hedging
Activities" amends and clarifies accounting for derivative instruments,
including certain derivative instruments embedded in other contracts, and
hedging activities. The Statement is effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after June
30, 2003. The adoption of this standard had no effect on the Corporation's
financial condition or results of operations.

SFAS No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits" was revised in December 2003. The revisions to SFAS132 are intended to
improve financial statement disclosures for defined benefit plans by requiring
more detail about plan assets, benefit obligations, cash flows, benefit costs
and other relevant quantitative and qualitative information. The revisions are
effective for fiscal years after December 15, 2003. The adoption of this
standard had no effect on the Corporation's financial condition or results of
operations.

Staff Accounting Bulletin ("SAB") No. 104, "Revenue Recognition", was issued by
the Securities and Exchange Commission ("SEC") in December 2003. SAB No. 104
revises and rescinds certain sections of SAB No. 101 in order to make this
interpretive guidance consistent with current authoritative accounting and
auditing guidance and SEC rules and regulations. Accordingly there is no impact
the Corporation's financial condition or results of operations as a result of
the issuance of SAB No. 104.

FIN 46R, a revision to FIN 46, "Consolidation of Variable Interest Entities",
was issued in December 2003. FIN 46R clarifies some of the provisions of FIN 46
and exempts certain entities from its requirements. FIN 46R is effective at the
end of the first interim period ending after March 15, 2004. Entities that have
adopted FIN 46 prior to this effective date can continue to apply the provisions
of FIN 46 until the effective date of FIN 46R. The adoption of FIN 46R had no
effect on the Corporation's financial condition or results of operations.

                                      F-27
<PAGE>

                      (This page intentionally left blank.)

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>
3.1             Restated Articles of Incorporation    Exhibit 3.1 to the Registrant's Form S-1
                of Registrant                         Registration Statement under the
                                                      Securities Act of 1933, as amended,
                                                      declared effective on April 23, 199"
                                                      ("1991 "-1")

3.1(a)          Certificate of Amendment to the       Exhibit 3.1(a) to 1991 S-1
                Articles of Incorporation of
                Registrant

3.2             Amended and Restated Bylaws of        Exhibit 3.2 to the Registrant's 1993 Form
                Registrant                            10-K

4.1             Incentive and Non-Incentive Stock     Exhibit 4.1 to the Registrant's 1995 Form
                Option Plan of Registrant effective   10-K
                March 25, 1991, as amended

4.2             Form of Common Share Certificate      Exhibit 4.2 to the Registrant's 1995 Form
                                                      10-K

10.1            Employees' Retirement Plan for        Exhibit 10.1 to 1991 S-1
                Registrant dated May 1, 1985, with
                First Amendment thereto and Summary
                Plan Description therefore

10.2            Management Agreement between          Exhibit 10.2 to 1991 S-1
                Michigan Health Maintenance
                Organization Plans, Inc. and
                Registrant dated March 15, 1985, as
                amended June 12, 1985

10.3            Management Agreement between U.A.     Exhibit 10.3 to 1991 S-1
                Health Care Corporation and
                Personal Physician Care, Inc. dated
                March 18, 1987

10.4            Amendment dated February 16, 1993     Exhibit 10.5 to the Registr'nt's 1995 Form
                to Management Agreement between       10-K
                United American Healthcare
                Corporation and Personal Physician
                Care, Inc. dated March 18, 1987

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>

10.5            Amendment dated June 16, 1994 to      Exhibit 10.4 to the Registrant's 1994 Form
                Management Agreement between U.A.     10-K
                Health Care Corporation and
                Personal Physician Care, Inc. dated
                March 18, 1987

10.6            Management Agreement between          Exhibit 10.5 to Registr'nt's 1994 Form 10-K
                OmniCare Health Plan, Inc. and
                United American of Tennessee, Inc.
                dated February 2, 1994

10.7            Management Agreement between          Exhibit 10.6 to Registrant's 1994 Form 10-K
                UltraMedix Health Care Systems,
                Inc. and United American of
                Florida, Inc. dated February 1, 1994

10.8            Amendment dated September 4, 1995     Exhibit 10.9 to the Registrant's 1995 Form
                to Management Agreement between       10-K
                UltraMedix Healthcare Systems, Inc.
                and United American of Florida,
                Inc. dated February 1, 1995

10.9            Amendment dated September 20, 1995    Exhibit 10.10 to Registrant's 1995 Form
                to Management Agreement between       10-K
                UltraMedix Health Care Systems,
                Inc. and United American of
                Florida, Inc. dated February 1, 1995

10.10           Lease Agreement between 1155          Form 8-K filed August 8, 1991
                Brewery Park Limited Partnership
                and Registrant dated July 24, 1991,
                effective May 1, 1992

10.11           Amendment dated December 8, 1993 to   Exhibit 10.8 to the Registrant's 1994 Form
                Lease agreement between 1155          10-K
                Brewery Park Limited Partnership
                and Registrant dated July 24, 1991

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>

10.12           Amendment dated April 15, 1993 to     Exhibit 10.13 to Registrant's 1995 Form
                Lease Agreement between 1155          10-K
                Brewery Park Limited Partnership
                and Registrant dated July 24, 1991

10.13           Lease Agreement between Baltimore     Exhibit 10.7 to the Registrant's 1993 Form
                Center Associates Limited             10-K
                Partnership and Corporate
                Healthcare Financing, Inc. dated
                August 24, 1988, as amended April
                12, 1993, effective the later of
                May 1, 1993 or the date premises
                are ready for occupancy

10.14           Amendment dated May 11, 1994          Exhibit 10.11 to the Registrant's 1994
                (effective June 30, 1994) to Lease    Form 10-K
                agreement between Baltimore Center
                Associates Limited Partnership and
                Corporate Healthcare Financing, Inc

10.15           Lease Agreement between CLW Realty    Exhibit 10.2 to Registrant's 1994 Form 10-K
                Asset Group, Inc., as agent for The
                Prudential Insurance Company of
                America and United American of
                Florida dated May 31, 1994,
                effective June 1, 1994

10.16           Lease Agreement between Fleming       Exhibit 10.3 to Registrant's 1994 Form 10-K
                Companies, Inc. and United American
                of Tennessee dated June 30, 1994,
                effective the date premises are
                ready for occupancy
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>
10.17           Lease Agreement between               Exhibit 10.19 to Registrant's 1995 Form
                International Business Machines       10-K
                Corporation and Registrant dated
                August 29, 1994

10.18           Amended and Restated Line of Credit   Exhibit 10.20 to Registrant's 1995 Form
                Facility Agreement between Michigan   10-K
                National Bank and Registrant dated
                March 14, 1995

10.19           Promissory notes between Michigan     Exhibit 10.9 to the Registrant's 1993 Form
                National Bank and Registrant dated    10-K
                August 26, 1993

10.20           Asset Purchase Agreement between      Form 8-K filed May 24, 1993 and Form 8-K/A
                CHF, Inc., Healthcare Plan            filed July 21, 1993
                Management, Inc., CHF-HPM Limited
                Partnership, Louis J. Nicholas and
                Keith B. Sullivan and Registrant
                dated May 7, 1993

10.21           Loan and Security Agreement between   Exhibit 10.18 to Registrant's 1994 Form
                UltraMedix Health Care Systems,       10-K
                Inc. and United American of Florida
                dated February 1, 1994

10.22           Amendment dated June 13, 1995 to      Exhibit 10.26 to Registrant's 1995 Form
                the Loan and Security Agreement       10-K
                between UltraMedix Care Systems,
                Inc. and United American of
                Florida, Inc. dated February 1, 1994

10.23           Form of Stock Transfer Services       Exhibit 10.19 to Registrant's 1994 Form
                Agreement between Huntington          10-K
                National Bank and Registrant

10.24           Employment Agreement between Julius   Exhibit 10.15 to 1991 S-1
                V. Combs, M.D. and Registrant dated
                March 15, 1991
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>
10.25           Employment Agreement between Ronald   Exhibit 10.16 to 1991 S-1
                R. Dobbins and Registrant dated
                March 15, 1991

10.26           Employment Agreement between Louis    Exhibit 10.22 to Registrant's 1994 Form
                J. Nicholas and Corporate             10-K
                Healthcare Financing, Inc. dated
                May 7, 1993

10.27           First Amendment to Contingent Note    Form 10-Q for the Quarter Ended March 31,
                Promissory Note between CHF-HPM       1996, filed May 14, 1996
                Limited Partnership and the
                Registrant

10.28           Acquisition of majority interest in   Form 8-K filed April 19, 1996
                OmniCare Health Plan, Inc. of
                Tennessee and UltraMedix Healthcare
                Systems, Inc.

10.29           Injured Workers' Insurance Fund       Form 10-K/A filed October 14, 1996, as
                Contract No. IWIF 9-96 Managed Care   amended
                Contract with Statutory Benefits
                Management Corporation dated June
                19, 1996

10.30           Ernst & Young LLP Report of           Exhibit 10.30 to Registrant's 1998 Form
                Independent Auditors as of June 30,   10-K
                1996

10.31           Renaissance Center Office Lease       Form 10-Q for the Quarter Ended September
                between Renaissance Center Venture    30, 1996, filed November 13, 1996
                and Registrant

10.32           Purchase Agreement between            Form 10-Q for the Quarter Ended December
                Statutory Benefits Management         31, 1996, filed February 10, 1997
                Corporation and Spectera, Inc.

10.33           Agreement of Purchase and Sale of     Form 10-K filed October 14, 1997
                Stock, between CHF Acquisition,
                Inc. and the Registrant dated
                September 12, 1997

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>

10.34           Ernst & Young LLP Report of           Form 10-K filed October 14, 1997
                Independent Auditors as of June 30,
                1997

10.35           Amended and Restated Business Loan    Form 10-Q for the Quarter Ended
                Agreement between Michigan National   March 31, 1998, filed May 15, 1998
                Bank and Registrant dated March 12,
                1998 (effective as of February 1,
                1998)

10.36           Business Loan Agreement Addendum      Form 10-Q for the Quarter Ended
                between Michigan National Bank and    March 31, 1998, filed May 15, 1998
                Registrant dated March 12, 1998
                (effective as of February 1, 1998)

10.37           Promissory Note from Registrant to    Form 10-Q for the Quarter Ended
                Michigan National Bank dated March    March 31, 1998, filed May 15, 1998
                12, 1998 (effective as of February
                1, 1998)

10.38           Employment Agreement between          Exhibit 10.38 to Registrant's 1998
                Gregory H. Moses, Jr. and             Form 10-K
                Registrant dated May 11, 1998

10.39           Amendment dated as of June 30, 1998   Exhibit 10.39 to Registrant's 1998
                to Lease Agreement between 1155       Form 10-K
                Brewery Park Limited Partnership
                and Registrant dated June 24, 1991
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>

10.40           Termination of Lease between          Exhibit 10.40 to Registrant's 1998
                Renaissance Holdings, Inc.            Form 10-K
                (successor to Renaissance Center
                Venture) and Registrant dated June
                24, 1998

10.41           United American Healthcare            Exhibit 10.41 to Registrant's 1998
                Corporation 1998 Stock Option Plan    Form 10-K

10.42           Stock Purchase Agreement among        Exhibit 10.42 to Registrant's 1998
                Registrant, CHFA, Inc. and            Form 10-K
                Corporate Healthcare Financing,
                Inc. dated August 31, 1998

10.43           Secured Promissory Note from CHFA,    Exhibit 10.43 to Registrant's 1998
                Inc. to Registrant dated August 31,   Form 10-K
                1998

10.44           Unsecured Promissory Note from        Exhibit 10.44 to Registrant's 1998
                CHFA, Inc. to Registrant dated        Form 10-K
                August 31, 1998

10.45           Guaranty Agreement of Louis J.        Exhibit 10.45 to Registrant's 1998
                Nicholas dated August 31, 1998        Form 10-K

10.46           Pledge Agreement between CHFA, Inc.   Exhibit 10.46 to Registrant's 1998
                and Registrant dated August 31, 1998  Form 10-K

10.47           Amendment of Business Loan            Exhibit 10.47 to Registrant's 1998
                Agreement between Registrant and      Form 10-K
                Michigan National Bank dated
                September 1, 1998

10.48           Promissory Note of Registrant to      Exhibit 10.48 to Registrant's 1998
                Michigan National Bank dated          Form 10-K
                September 1, 1998

10.49           Pledge Agreement from Registrant to   Exhibit 10.49 to Registrant's 1998
                Michigan National Bank dated          Form 10-K
                September 1, 1998
</TABLE>

<PAGE>


<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>

10.50           Promissory Note from Registrant to    Form 10-Q for the Quarter Ended December
                UAH Securities Litigation Fund        31, 1998, filed February 16, 1999
                dated December 11, 1998

10.51           Amendment of Promissory Note and      Exhibit 10.51 to Registrant's 1999
                Business Loan Agreement from          Form 10-K
                Michigan National Bank dated May 6,
                1999

10.52           Provider Contract between Urban       Exhibit 10.52 to Registrant's 1999
                Hospital Care Plus and Registrant     Form 10-K
                dated April 1, 1999

10.53           Assignment and Assumption of          Exhibit 10.53 to Registrant's 1999
                Subleases and Security Deposits       Form 10-K
                between International Business
                Machines Corporation and Registrant
                dated September 9, 1999

10.54           Business Loan Agreement between       Exhibit 10.54 to Registrant's 2001
                Registrant and Michigan National      Form 10-K
                Bank dated September 25, 2000

10.55           Promissory Note of Registrant to      Exhibit 10.55 to Registrant's 2001
                Michigan National Bank dated          Form 10-K
                September 25, 2000

10.56           Security Agreement between            Exhibit 10.56 to Registrant's 2001
                Registrant and Michigan National      Form 10-K
                Bank dated September 25, 2000

10.57           Amendment of Business Loan            Form 10-Q for the Quarter Ended December
                Agreement with Standard Federal       31, 2001, filed February 14, 2002
                Bank N.A., dated November 29, 2001
                and effective September 30, 2001.

10.58           Amended and Restated Promissory       Form 10-Q for the Quarter Ended December
                Note to Standard Federal Bank N.A.,   31, 2001, filed February 14, 2002
                dated November 29, 2001 and
                effective September 30, 2001.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>

10.59           Amendment to Management Agreement     Form 10-Q for the Quarter Ended December
                with OmniCare Health Plan dated       31, 2001, filed February 14, 2002
                December 14, 2001 and effective
                August 1, 2001.

10.60           Amendment of Business Loan            Exhibit 10.60 to Registrant's 2002
                Agreement with Standard Federal Bank  Form 10-K
                N.A., dated October 11, 2002

10.61           Amendment of Business Loan            Form 10-Q for the Quarter Ended September
                Agreement with Standard Federal       30, 2002, filed November 13, 2003
                Bank N.A., dated October 11, 2002
                and effective September 30, 2002

10.62           Letter amendment of Business Loan     Form 10-Q for the Quarter Ended December
                Agreement with Standard Federal       31, 2002, filed May 13, 2003
                Bank N.A., dated February 5, 2003

16.1            Concurring Letter regarding change    Form 8-K filed October 30, 1997
                in Certifying Accountants dated
                October 30, 1997, from Grant
                Thornton LLP

16.2            Concurring Letter regarding change    Form 8-K/A filed November 12, 1997
                in Certifying Accountants dated
                November 12, 1997, from Grant
                Thornton LLP

16.3            Concurring Letter regarding change    Form 8-K/A filed November 12, 1997
                in Certifying Accountants dated
                November 12, 1997, from Ernst &
                Young LLP

16.4            Concurring Letter regarding change    Form 8-K filed January 20, 1998
                in Certifying Accountants dated
                January 16, 1998, from Arthur
                Andersen LLP

16.5            Letter of KPMG LLP dated March 5,     Form 8-KA filed March 10, 2003
                2003 to the Securities and Exchange
                Commission.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT                                                         INCORPORATED HEREIN BY                  FILED
NUMBER                DESCRIPTION OF DOCUMENT                        REFERENCE TO                      HEREWITH
------                -----------------------                        ------------                      --------
<S>             <C>                                   <C>                                              <C>

21              Subsidiaries of the Registrant                                                           *

31.1            Certification of Chief Executive                                                         *
                Officer under Section 302 of the
                Sarbanes-Oxley Act of 2002

31.2            Certification of Chief Financial                                                         *
                Officer under Section 302 of the
                Sarbanes-Oxley Act of 2002

32.1            Certification of Chief Executive                                                         *
                Officer Pursuant to 18 U.S.C.
                Section 1350

32.2            Certification of Chief Financial                                                         *
                Officer Pursuant to 18 U.S.C.
                Section 1350

99.1            Press Release dated January 12, 1998  Form 8-K filed January 20, 1998

99.2            Press Release dated January 6, 2000   Form 8-K filed January 14, 2000
</TABLE>